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Oral Answers to Questions
(11 years, 4 months ago)
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Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
1. What discussions he has had with National Grid on future electricity transmission projects in Wales.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
The Wales Office takes a close interest in National Grid’s electricity transmission projects in Wales, and I will meet National Grid later this month to discuss them in further detail.
Jonathan Edwards
Western Power Distribution is consulting on routes for electricity poles linking TAN 8 area G in north Carmarthenshire to the national grid in the south of the county. Local people feel strongly that any electric cables should be underground to preserve the beauty of the Tywi valley, and are concerned that the consultation period is far too short. Will the Minister impress upon the Department of Energy and Climate Change and National Grid that such transmission projects in open Welsh countryside should be underground, and at the very least that the WPD consultation should be extended into the autumn?
Stephen Crabb
These transmission projects are best dealt with case by case. The problem with a default position of saying they should always be underground is that it adds huge cost and complexity, making projects unaffordable. We want to keep the lights on in Wales, so we need infrastructure that is affordable, but I will certainly look into the specific point the hon. Gentleman raises about the consultation period with Western Power.
Glyn Davies (Montgomeryshire) (Con)
National Grid has proposed to construct a 40 km 400 kV line through my constituency, but the local economy depends to a significant extent on its physical beauty and tourism. Will the Secretary of State press National Grid to ensure that if it does go ahead with this monstrous proposal it will be placed entirely underground?
Stephen Crabb
National Grid has already given a commitment that where possible it will use underground cabling projects in my hon. Friend’s constituency, but in my discussion with National Grid the week after next I will certainly raise the point again and come back to my hon. Friend with a fuller answer.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
On electricity generation, does the Minister share my concern about the stance of Plaid Cymru and its leader Leanne Wood on new nuclear, and Wylfa B in particular, despite the £10 billion of investment and the 6,000 jobs it could bring to Ynys Môn and the wider Welsh economy?
Stephen Crabb
I share the hon. Gentleman’s concern about many of the positions of the Plaid Cymru leader in Wales, not least on nuclear. We still do not quite know the party’s position on investment in nuclear power, but we know that project would be a huge boost to the economy of north Wales.
Mr James Gray (North Wiltshire) (Con)
Has the Minister noticed some of the very fine print in the Energy Bill allowing pylons, which are already large enough, broadly speaking to be doubled in size without extra planning permission? Does he agree that that would wreck the landscape of Wales, as of England, and we ought to be extraordinarily cautious about it?
Stephen Crabb
I agree with my hon. Friend that we have some unique and outstanding areas of beauty in Wales that need to be protected where possible, but, as I said in answer to an earlier question, these projects are best dealt with case by case, balancing environmental considerations with those of affordability and, of course, the views of the local communities, which should be at the heart of all planning applications.
Laura Sandys (South Thanet) (Con)
2. What recent assessment he has made of the role and importance of the aviation sector in Wales.
Karen Lumley (Redditch) (Con)
8. What recent assessment he has made of the role and importance of the aviation sector in Wales.
Stephen Mosley (City of Chester) (Con)
10. What recent assessment he has made of the role and importance of the aviation sector in Wales.
The Secretary of State for Wales (Mr David Jones)
The aviation sector is vital to the Welsh economy, and I was pleased to see so many Welsh businesses represented at the Paris air show last month.
Laura Sandys
Does the Secretary of State agree that the UK’s overall aviation strategy is there to support more jobs, exciting top-end engineering and ensuring we have a strong technology base in this country?
Mr Jones
Yes, the United Kingdom aerospace industry is the second largest in the world, and is by far the largest in Europe, and it contributes some £24 billion per annum to the UK economy. The Government have set out our strategic vision for the UK’s civil aerospace sector in the aerospace industrial strategy, which includes Government investment of £2 billion over the next seven years.
Karen Lumley
Does my right hon. Friend think it is a good use of taxpayers’ money to buy Cardiff International airport?
Stephen Mosley
I am sure my right hon. Friend is aware of the new terminal being built at Chester Hawarden airport in the constituency of the hon. Member for Alyn and Deeside (Mark Tami), which will cater for small planes carrying up to 50 passengers. What benefits does my right hon. Friend foresee for north-east Wales, and for Chester as well, from having direct flights to Cardiff, across the UK, and to continental Europe?
Mark Tami (Alyn and Deeside) (Lab)
At the last Welsh questions, the Secretary of State was asked whether he thought Airbus jobs would be safer if the UK was outside the EU. He failed to answer that question. Will he answer it now?
Mrs Madeleine Moon (Bridgend) (Lab)
Constituents have visited my surgery expressing concern at the potential closure of 71 Inspection and Repair Squadron at St Athan, with the loss of 75 highly skilled jobs in the aviation sector that are based at the station there. Will the Secretary of State talk to the Ministry of Defence to explain how the defence footprint, particularly in highly skilled aviation jobs in Wales, is shrinking? Will they make sure that that does not happen?
Ian Lucas (Wrexham) (Lab)
Does the Secretary of State agree that membership of the European Union is an essential precondition of the continued success of the UK arm of Airbus?
Alun Cairns (Vale of Glamorgan) (Con)
3. What discussions he has had with (a) his ministerial colleagues and (b) Ministers in the Welsh Government on improvements to the M4 motorway.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues here in London and with Welsh Ministers on improvements to the M4. I am clear that the M4 is the single most important piece of transport infrastructure for the Welsh economy, and we are absolutely committed to working with the Welsh Government to deliver the funding solution required for improving that motorway.
Alun Cairns
I am grateful to the Minister for his efforts in trying to deliver improvements to the network and the M4 around Newport. It is the gateway to the south Wales economy. What reassurance can he give me that the project will go ahead this time, because it was cancelled twice by the Labour party?
Stephen Crabb
I pay tribute to my hon. Friend’s campaigning, and the work of other Government Members, to see the improvements to the M4. He rightly points out that this project was shelved on several occasions by Welsh Ministers. I do not want to pre-empt any announcement today, but I would like to give him every reason to be optimistic that we will get a successful outcome to the discussions with the Welsh Government on this issue.
Jessica Morden (Newport East) (Lab)
Help to relieve the traffic nightmare around Newport is vital, but will the Minister assure my constituents that any resource given to the Welsh Government will be significant enough to help deal with the big impact that any new road will have on local communities and the environment?
Stephen Crabb
The hon. Lady is absolutely right to raise the technical challenges involved in a new relief road for the M4. She will have noted the Welsh Government announcement that they will shortly launch a consultation on the details of the scheme, which will provide her local community with every opportunity to express concerns and, we hope, get answers to their questions.
David T. C. Davies (Monmouth) (Con)
I applaud the Minister for his determination to go ahead with this much-needed project, which has been blocked so many times by members of the Labour party in the Welsh Assembly. May I also urge him to ensure that it is linked to an announcement about the future of the Severn bridge, as motorists are struggling to pay the costs of it, just a few years before it is returned to the Government?
Stephen Crabb
I thank my hon. Friend for his question. As I said in answer to a previous question, I am not going to pre-empt any announcement today. I recognise the concerns of the Chairman and other members of the Select Committee about the high tolls on the Severn bridge, but we are not in a position today to make any comment on what lies beyond 2018, when the current concession comes to an end.
Albert Owen (Ynys Môn) (Lab)
4. What discussions he has had with the Chancellor of the Exchequer on the effect of the spending review on Wales.
Geraint Davies (Swansea West) (Lab/Co-op)
6. What discussions he has had with the Chancellor of the Exchequer on the effect of the spending review on Wales.
The Secretary of State for Wales (Mr David Jones)
I have had a number of discussions with the Chancellor on the spending review. This Government are investing in Wales. The announcement of the £250-million new prison in north Wales will create much-needed jobs for the region and further boost economic growth.
Albert Owen
Missing from the spending review was real investment in Welsh ports and Welsh infrastructure to those ports. Wales has already lost out under this Government on ports, which are the gateways to Wales. They could regenerate sectors such as energy and, thus, make places such as Holyhead world leaders. When will this Secretary of State stand up for Welsh ports and make sure that we get a level playing field for this energy development, which includes marine, tidal, onshore wind, offshore wind and nuclear power, which Plaid Cymru does not support?
Mr Jones
I regularly visit ports across Wales and am well aware of the importance of Holyhead port to the economy. The hon. Gentleman is quite right that we need better connectivity with the ports, on which I am pressing my right hon. Friend the Secretary of State for Transport, and I am raising it with the Welsh Government.
Geraint Davies
The austerity audit published in the Financial Times found that the average working Welsh adult would lose £549 a year from the cuts compared with just £470 for an adult in England. Given that, why is the lion’s share of investment in infrastructure plans in London and the south-east, with no high-speed rail to Wales and no capital investment? Will he fight for a fair share of investment as well as an unfair share of cuts?
Mr Jones
I strongly refute the hon. Gentleman’s suggestion that Wales has somehow been short-changed: the investment in railways is very significant, with electrification right through to Swansea; in north Wales, we have a new prison; and we have new nuclear on Wylfa. The hon. Gentleman should also remember that as a result of our tax changes the average taxpayer in Wales is some £750 per annum better off.
Guto Bebb (Aberconwy) (Con)
Will my right hon. Friend the Secretary of State join me in welcoming the decision to protect funding for S4C in the recent spending review?
Mr Mark Williams (Ceredigion) (LD)
Further to that answer, will the Secretary of State reiterate the importance of that decision for the independent television production sector in Wales, which is critical for many of our local economies?
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
As the Secretary of State will know, total pay in Wales has fallen by 8% since 2007, one of the biggest falls in living standards in Europe. The spending review will not help the Welsh economy very much, taking a further £1 billion out of the Welsh economy—and the Labour party has now signed up to that. It is for Ynys Môn to decide whether it wants Labour cuts or Conservative cuts. Which does the Secretary of State think would be appropriate?
Mr Jones
I will make no apologies for the way in which the Government have treated the interests of Wales since we came to power. We have seen more infrastructure investment in Wales under this Government than under 13 years of Labour and I am proud of the support we are giving to Welsh families and the Welsh economy.
Mr Llwyd
The IMF—the high priests of austerity—said that the Government should cut less and start spending more on infrastructure projects. The re-announcement of HS2 last week was sort of welcome, but the cost has gone up to £50 billion. Is the Secretary of State satisfied that Wales will not be given the £2.5 billion consequential?
Jonathan Evans (Cardiff North) (Con)
In the spending review, the Chancellor made a significant announcement about capital expenditure. What steps is the Secretary of State taking to ensure that we in Wales get the appropriate proportion of that capital infrastructure spend?
Owen Smith (Pontypridd) (Lab)
The reality is that since 2010 the Welsh budget has been cut in real terms by £1.7 billion, or 11%, yet on Welsh television last week the Secretary of State for Wales said that Wales had “got off lightly”. I know that the right hon. Gentleman is not exactly famed across the House for his humour, but was that meant to be a joke?
Owen Smith
The answer is clear: Wales is meant to be grateful for this Government’s largesse, but the reality is that on the right hon. Gentleman’s watch, the budget is down £1.7 billion, real wages are down £1,700, 3,000 more people are out of work, 35,000 people are using food banks, 33% of children in Wales are in child poverty and 400,000 people have lost their tax credits. If that is “getting off lightly”, heaven help the most vulnerable in Wales if he and his Government decide to get serious.
Craig Whittaker (Calder Valley) (Con)
5. What discussions he has had on the effect of the Government's energy policies on the Welsh economy.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
This Government’s energy reforms are designed to attract substantial investment in energy infrastructure throughout the UK, including in Wales. I believe that Wales has a key and significant role to play in meeting the challenge of creating a low-carbon energy network, fit for the 21st century.
Craig Whittaker
Does the Minister agree that last week’s announcement on contracts for difference provides future certainty for all investors?
Stephen Crabb
I certainly do agree. That announcement and other spending review announcements show that we are a serious Government—serious about attracting the investment that Wales and the UK need to keep the lights on and upgrade our energy networks.
Mr David Hanson (Delyn) (Lab)
How many green deal starts have there been in Wales? Will the Minister reflect on the fact that there are likely to be very few, and that businesses told him so?
Stephen Crabb
I am surprised that the right hon. Gentleman tries to criticise the green deal programme. We are in the early weeks of a 20-year programme that will lead to real improvements in energy efficiency and help to tackle fuel poverty in Wales. Perhaps he would like to come with me on a visit to the British Gas green deal academy in Tredegar, where he will see the value of the green deal for Wales.
Hywel Williams (Arfon) (PC)
It is intended that 10% of UK energy consumption will be carried across Ynys Môn and the Menai straits on pylons. At the same time, electricity from Scotland to England will not go through the Lake district, but be carried under-sea to the Wirral and across the Wirral underground. Why the difference?
Stephen Crabb
As I understand the project across the Menai straits, four options are being looked at and sub-sea is one of them. I shall certainly discuss the matter with National Grid, as I recognise the significant concern, and I will follow up with the hon. Gentleman in due course.
Nia Griffith (Llanelli) (Lab)
The Welsh steel industry could have to wait yet another year for the Government to get state aid clearance for the energy-intensive industries package—a package that would not have been necessary had the Government not gone it alone and introduced such a high carbon floor price. What can the Minister do to secure interim support to prevent energy-intensive industries in Wales from being forced to run down production and lay off workers?
Stephen Crabb
I and the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), recently met representatives of different industries in south and north Wales for a round table to discuss precisely that question. Those present included Tata Steel and Celsa Steel, large industrialists from south Wales, and Toyota from north Wales. We are looking at specific solutions that will keep the Welsh economy powering ahead.
Chris Evans (Islwyn) (Lab/Co-op)
7. What discussions he has had with the Secretary of State for Justice on the effect of the Government's legal aid proposals in Wales.
The Secretary of State for Wales (Mr David Jones)
I recently met my right hon. Friend the Justice Secretary to discuss matters relating to Wales, including the proposed reforms to criminal legal aid in England and Wales. I have also met Welsh representatives of the legal profession to hear their views on the proposed changes.
Chris Evans (Islwyn) (Lab/Co-op)
Research by the Monmouthshire Law Society found that law firms serving Gwent would have to make up to 15 members of staff redundant if they lost their criminal legal aid contract. Does the Minister share their belief that these changes are the final nail in high street law firms in Wales?
Mr Jones
No, I do not. It is clear that there have to be reductions in legal aid spend, and a consultation is ongoing. Recently, my right hon. Friend the Justice Secretary made it clear that, having listened to representations, he believed that choice is important both to clients and to solicitors, and choice will be incorporated in the final proposals. [Interruption.]
Mr Speaker
Order. There are some very noisy private conversations taking place in the Chamber. Let us hear Mr Chris Ruane.
Chris Ruane (Vale of Clwyd) (Lab)
The legal aid cuts in my constituency will affect many of my constituents, who will also be affected by the closure of the Rhyl family court, the closure of the Rhyl Army recruitment centre, the closure of the Rhyl tax office and, on top of all that, the closure of the Crown post office. How will that help the regeneration of Rhyl?
Andrea Leadsom (South Northamptonshire) (Con)
9. What assessment he has made of the potential effect on Wales of the proposal to limit the allocation of EU structural funds to those member states with a GDP per capita of less than 90% of the EU average.
The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)
In February, my right hon. Friend the Prime Minister negotiated a real-terms reduction in the EU budget for the first time in its history, saving UK taxpayers an estimated £3.5 billion over the next five years. I continue to support reforms that are in the best interests of Wales and the United Kingdom as a whole.
Andrea Leadsom
Does my hon. Friend agree that imposing reforms in the structural funds would be a fantastic deal for European taxpayers and would enable Westminster to determine best the regional policy that would be in the best interests of Wales?
Stephen Crabb
I thank my hon. Friend for that question and recognise the particular expertise she has developed in this area. We are always open to listening to new ideas for reforming European funding, but I hope that she will recognise the fantastic deal that British, Welsh and European taxpayers got as a result of the historic negotiated agreement to see a real-terms reduction in the EU budget for the very first time.
Jesse Norman (Hereford and South Herefordshire) (Con)
11. What assessment he has made of the effect of the Welsh Government’s national procurement service on suppliers based in England.
The Secretary of State for Wales (Mr David Jones)
Public sector contracts are an important source of income for many businesses. Although I support efforts to make the procurement of public service contracts more streamlined in Wales, I do not think that should be at the expense of ensuring value for money regardless of where the supplier is located.
Jesse Norman
Small businesses in Herefordshire find it increasingly difficult to become accredited suppliers to the Welsh public sector. There is a growing tendency, and indeed a Welsh Government policy, to encourage public organisations to buy Welsh. Does the Secretary of State share my view that public organisations in Wales should not be discouraged from buying from English suppliers and that the Welsh Government should make it very clear that they cannot do so?
Mr Jones
I trust that the new public procurement process will be driven by providing value for taxpayers’ money, irrespective of where the business is located. Part of the object of the procurement service is to develop local supply chains, and in many parts of Wales the local economy will include businesses located in England.
Huw Irranca-Davies (Ogmore) (Lab)
Will the Secretary of State applaud the work of Professor Dermot Cahill of Bangor university, who is working with others and the Welsh Government to increase the number of small and medium-sized enterprises that are now making use of procurement in Wales? Would the right hon. Gentleman not say that, in that regard, Wales is leading the way?
Wayne David (Caerphilly) (Lab)
13. What discussions he has had with the Secretary of State for the Home Department on the responsibilities of police and crime commissioners in Wales.
The Secretary of State for Wales (Mr David Jones)
I have discussed the responsibilities of police and crime commissioners with my right hon. Friend the Home Secretary. PCCs are democratically elected and accountable to the communities they serve.
Wayne David
Does the Secretary of State share my concern that the former chief constable of Gwent yesterday told a Select Committee of this House that she was bullied out of her job?
Mr Jones
I heard what the former chief constable said. I want to reiterate what I said at the last Welsh Grand Committee. I have the highest possible regard for Carmel Napier. Ultimately, however, it must be for the police and crime commissioner to make that decision, and of course he is accountable to Parliament through the Home Affairs Committee.
Kevin Brennan (Cardiff West) (Lab)
Does the Secretary of State think that it is desirable that police and crime commissioners should in effect be able to sack police constables on a whim, as has happened in Gwent?
Mr Jones
Clearly, the power to dismiss a chief constable is one of the statutory powers given to that officer. However, when it is exercised, the police and crime commissioner must be extremely careful to ensure that the proper procedures are adopted and, furthermore, must understand that he will be accountable to Parliament.
Paul Flynn (Newport West) (Lab)
The evidence we heard yesterday from the chief constable was that she was called in and, out of the blue, the police and crime commissioner said that he would dismiss and humiliate her. That is an extraordinary, menacing and bullying attitude. Are police and crime commissioners the Government’s stupidest policy?
Charlotte Leslie (Bristol North West) (Con)
Q1. If he will list his official engagements for Wednesday 3 July.
The Prime Minister (Mr David Cameron)
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Charlotte Leslie
Does the Prime Minister agree with me, and I think much of the nation, that the best way to celebrate the 65th birthday of the NHS is for the Government to strip out the culture of secrecy and cover-up that we have seen so strongly in Morecambe and Mid Staffs and put patient safety and empowered professionals back at the heart of the NHS?
The Prime Minister
I think my hon. Friend is absolutely right. The way to celebrate the NHS’s 65th birthday is to go on investing in it as this Government are with an extra £12 billion, but also to be on the side of patients. That is why we are introducing the chief inspector of hospitals, who will make a real difference. Yes, we do need to end the culture of secrecy and cover-up that we had under Labour.
Edward Miliband (Doncaster North) (Lab)
I am sure I speak for everyone in this House when I say that there is deep concern about what we have witnessed over the past few days in Egypt, including appalling violence and deaths, just a year on from free elections. I begin by asking the Prime Minister for assurances that all the appropriate steps are being taken by the Government to guarantee the safety of UK nationals in that country.
The Prime Minister
I can certainly give the right hon. Gentleman that assurance—and also to safeguard our embassy in Cairo. I should add that we are advising British nationals against all but essential travel to Egypt, except for the Red sea resorts, as set out on the Foreign Office website.
The right hon. Gentleman is right that these are deeply disturbing scenes. The level of violence is appalling. We should appeal to all sides for calm and to stop the levels of violence and particularly the sexual assaults. It is not for this country to support any single group or party; what we should support are proper democratic processes and proper government by consent.
Edward Miliband
I agree with the Prime Minister. All of us want to see a peaceful resolution to the present crisis. Therefore, can the Prime Minister tell the House what work is being done, even at this late stage, by the UK and indeed the European Union to encourage the Egyptian Government to secure a negotiated political solution to this crisis in advance of today’s Egyptian army deadline?
The Prime Minister
What I can tell the right hon. Gentleman is that very clear messages have been sent to President Morsi—including by President Obama, who spoke with him directly; we have also been communicating through our ambassadors—that, yes, he has a democratic mandate and we respect that, but democracy also means ensuring that everyone has a voice and leaders have a responsibility to represent all Egyptians and show they are responsive to their concerns. That is what the Government need to do in order to bring about peace and stability in that country.
Edward Miliband
I am grateful for the Prime Minister’s answer and I know that he and the Foreign Secretary will keep the House updated in the coming days.
Let me turn to another subject. The country will need 240,000 extra primary school places by 2014. Can the Prime Minister assure parents that that will not be met by increasing primary school class sizes?
The Prime Minister
I can assure the right hon. Gentleman that we put in place through the spending review the additional money for 500,000 extra school places, so we should be able to provide those school places without seeing an increase in classes.
Edward Miliband
But class sizes are rising. When the Labour Government came to office, the number of infants being taught in class sizes of over 30 was a quarter. When we left office, it was just 1.8%. It has doubled on the Prime Minister’s watch—that is the reality for lots of parents.
Under the Prime Minister’s plans, one third of new schools are being built in areas where there are surplus places. Can he explain to parents in areas where they are struggling to get their children into primary school why he is spending money building schools where there are already plenty of places?
The Prime Minister
I have to say to the right hon. Gentleman that he left the biggest budget deficit in Britain’s peacetime history. We have had to make difficult decisions. That is why we have cut welfare, that is why we have cut areas of spending—but we have made education a priority. That is why the amount of money going into our schools is going up and not down. That is why we are funding half a million extra school places. That is why this Government have built 200 new school buildings since taking office.
The right hon. Gentleman asks about new schools going into different areas. What that is code for is Labour’s opposition to free schools. We want more new, good schools. Their policy is still the same as John Prescott’s policy—remember that? The trouble with good schools is that everyone wants to go to them. Well we want good schools, but, as ever, his questions are written by Len McCluskey of Unite.
Edward Miliband
As always, this Prime Minister has no answers to the questions that he is asked. If he will not answer me, maybe he will answer David Simmonds, who is the Conservative spokesman for the Local Government Association. This is what Mr Simmonds says:
“We know of schools that are literally falling down and still have to compete with brand new builds down the road”—
in other words, in areas where there are surplus places. Is not the truth that while the Prime Minister is pouring millions of pounds into building new schools where there are already places, the only way he is going to meet the shortage in other areas is teaching kids in Portakabins and increasing class sizes?
The Prime Minister
The fact is that the last Labour Government cut primary school places. Let me tell the right hon. Gentleman what this Government are doing. The education capital budget is £21 billion over the next six years: that is what we are doing. What is so interesting is that he is taking his script from the trade unions, who do not like choice, who do not like new schools, who do not like free schools—they want to control everything. But we know one organisation they have got control of. We see it in black and white—they have taken control of the Labour party.
Edward Miliband
I am speaking for parents up and down this country—[Interruption.]
Mr Speaker
Order. There is the usual, very low-grade, very substandard, very unnecessary heckling. If the session has to run longer, it has to run longer. Let us try to observe some decorum, which the public can respect.
Edward Miliband
Let us have a debate about ethics. This is a Prime Minister who had dinners for donors in Downing street. He gave a tax cut to his Christmas card list, and he brought Andy Coulson into the heart of Downing street. The idea that he is lecturing us about ethics takes double standards to a whole new level.
In this one policy on schools we see the hallmark of this Government: they make the wrong choices on tax and spending. The millionaires’ tax cut, the top-down reorganisation of the NHS, and schools in areas where there are surplus places—and all the time they repeat the meaningless mantra, “We’re all in this together.”
The Prime Minister
The right hon. Gentleman goes up and down the country speaking for Len McCluskey. No wonder the former Home Secretary calls them “the party of the graveyard”. I have the press release here: “How Unite plans to change the Labour Party”. [Interruption.] I know you are paid to shout by Unite, but calm down a bit. This is what it says: “We give millions of pounds to the party—the relationship has to change” and
“We want a firmly class-based and left-wing general election campaign”.
That is what this week shows: too weak to sack his Health Secretary, too weak to stand up for free schools, too weak to stand up to the Unite union, too weak to run Labour, and certainly too weak to run the country.
Karen Lumley (Redditch) (Con)
Q2. New rules mean that my constituents in Redditch have to register individually if they want to vote to stop electoral fraud. Does my right hon. Friend think the same rules should apply to joining a political party?
The Prime Minister
My hon. Friend is absolutely right. Individual voter registration is a major step forward, but, frankly, we have a situation with one of this country’s political parties whereby it has become apparent that votes are being bought and people signed up without consent—all done by the man, Len McCluskey, who gave the right hon. Member for Doncaster North (Edward Miliband) his job.
Stephen Timms (East Ham) (Lab)
Q3. There was demand for food banks from 30,000 households in the year before the general election, but the figure was 350,000 households last year. Will the Prime Minister acknowledge, unlike his noble friend Lord Freud, that rocketing demand for food banks shows we have a problem?
The Prime Minister
I am sure that the right hon. Gentleman, as a member of Unite, will want to look very carefully at his own constituency Labour party. Who knows how many people it has bought and put on the register?
Food bank use went up 10 times under Labour—that is what happened—and it is this Government who are helping working people by freezing their council tax, giving 24 million people a tax cut and taking 2.4 million of the poorest people out of tax.
Philip Davies (Shipley) (Con)
The Prime Minister will be aware of the recent terrible stabbings in my constituency that led to the death of Louisa Denby, aged 84, and the serious injury to nine-year-old Jason D’Arcy, who was playing in the park. Will the Prime Minister join me not only in praising the police for their swift action in making arrests, but in supporting the local community and congratulating it on its steadfastness and community spirit, which has helped it get through a traumatic period?
The Prime Minister
I certainly join my hon. Friend. These were truly shocking events. To read this morning about the young the boy who staggered out of the park bleeding, having been stabbed, and the grandmother who was described as so much of a community member that she was seen as everybody’s grandmother was truly disturbing. I join my hon. Friend in praising the police and the local community. We must make sure that justice is done.
Mr Clive Betts (Sheffield South East) (Lab)
Q4. The Government have promised that by 2016 no one will have to pay more than £72,000 towards the cost of their personal care. I do not know whether the Prime Minister had a chance to read an article in Saturday’s Financial Times, but it said that the cap will be not on actual costs, but on eligible costs, which will not include people’s costs in meeting their moderate care needs or, indeed, all the costs they incurred in going into a private residential home. Is this not another example of the Prime Minister promising to do one thing when in reality he plans to do something completely different?
The Prime Minister
What we are introducing is what was debated and discussed in this House in terms of those costs that will be covered and those that will not. I have to say to the hon. Gentleman that the Labour party had 13 years to cap the costs of care and do something about the rising costs of social care, but it did precisely nothing.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Q5. May I congratulate the Government on achieving political agreement on the next round of common agricultural policy reform? May I also make a plea that proper time be taken to agree its implementation in order to ensure a level playing field and a fair deal for Britain and our farmers?
The Prime Minister
My hon. Friend is absolutely right: we have got a good deal on the common agricultural policy. We need to listen carefully to our farmers’ concerns so that they are not disadvantaged compared with other countries. We also need to take the time to introduce the new system, because when the single farm payments were introduced so quickly under the last system we suffered large fines from Europe as a result. My hon. Friend is being extremely wise on this issue.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Q6. Is the Prime Minister aware of the rather disturbing commitment given yesterday by his Chancellor to continue to interfere and intervene in the affairs of the Royal Bank of Scotland on behalf of the taxpayer? Is he also aware that the Chancellor’s last intervention—the completely irresponsible ousting of Stephen Hester—has cost the British taxpayer £4.5 billion so far as a result of the loss in value of their shareholding? Will the Prime Minister, as First Lord of the Treasury, instruct his Chancellor to desist from any such interventions in the future?
The Prime Minister
What I would say to the hon. Gentleman, who I know has great experience of lending money, is that it is important that the Government stand up for the taxpayer and ensure that Royal Bank of Scotland has the right strategy and the right leadership so that we get back the money that was put into the banks by the last Government.
Dr Julian Huppert (Cambridge) (LD)
Two days ago saw the start of independent retailer month. Does the Prime Minister agree that we need to do more to support local independent shops, to keep our high streets vibrant and creative, and to avoid takeover by multiple retailers and the formation of clone towns?
The Prime Minister
On this issue, I very much agree with the hon. Gentleman and think that he speaks for a lot of Britain. We should be working out what we can do through the Portas review and in other ways to back our town centres. We should be looking at how the rates system works for our town centres. We should also be looking at the planning system, as we are, and how we can use change of use to back our town centres. We should work with local authorities that want to see their town centres succeed. This is a vital issue for towns up and down our country, and it has my full backing.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
Q7. When he plans to visit the north-east of England.
The Prime Minister
I very much enjoyed my recent visit to the Nissan factory in Sunderland for the launch of the first mass-market electric vehicle to be fully produced in the UK. That will support more than 500 jobs at the plant and 2,000 jobs across Britain’s car industry. I look forward to visiting the north-east again soon.
Mr Brown
When the Prime Minister next visits, he will see again for himself that the key issue facing the region is unemployment. There are more than 20 applicants for every advertised vacancy. His policy of local enterprise partnerships and enterprise zones is not having the same effective impact on the region’s economy as the development agency had. Will he consider the appointment of a Minister to work with the local enterprise partnerships and Members of Parliament from the region to push forward the private sector employment agenda?
The Prime Minister
Ministers do work with the enterprise zones. Let me give the right hon. Gentleman the figures. Obviously we want to see more, but employment in the north-east is up by 9,000 and private sector jobs in the north-east by 37,000 since the election. There is not only the success at Nissan: Hitachi is committed to building a new train building plant in County Durham, which will bring 700 jobs; the new Tyne tunnel opened in 2011; and extra money is going into the Tyne and Wear metro. All those things will make a difference. In the right hon. Gentleman’s constituency, the youth claimant count has fallen by 4% over the past year.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
On his next visit, will the Prime Minister take the opportunity to promote apprenticeships and the support that the Government are giving to them among north-east businesses? Will he also take another look at the A1 and press the Department for Transport to get on with dualling it?
The Prime Minister
The last time I was in the north-east, I made a speech about apprenticeships. It is remarkable how many people have started apprenticeships under this Government. On the transport issue, we are funding feasibility studies into fixing problems on the A1 north of Newcastle to Scotland and on the Newcastle and Gateshead A1 western bypass. We are also improving the A19 between Newcastle and South Shields. That is a much better record than that of the Labour party. Even though it had a Prime Minister who came from the north-east, it never did what we are proposing to do with the A1.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
Q8. Given that the Prime Minister is so keen to talk about infrastructure investment, will he explain why his Government have cut capital investment again in 2015-16 by nearly £1 billion?
The Prime Minister
The hon. Lady is wrong. If she looks at the figures, she will see that we have added to the plans that Labour had for this Parliament and are increasing the amount of capital spending. The Opposition come to this House and oppose changes to welfare, oppose cuts to Government programmes and oppose the efficiency changes that we are making. They have not supported a single cut that we have made. If they did all the things they say, there would be no capital spending at all. That is the problem with the weakness of Labour Front Benchers: because they have taken no tough decisions, they cannot support the capital spending that this country needs.
Harriett Baldwin (West Worcestershire) (Con)
Can the Prime Minister confirm reports from Jordan that a new treaty has been signed and that this country could have the pleasure of seeing the back of Abu Qatada as soon as this weekend?
The Prime Minister
I can confirm that this treaty has been taken through both the Jordanian Parliament and our own, but I do not want to say anything that in any way could stop what we all want to happen happening.
John Cryer (Leyton and Wanstead) (Lab)
Q9. When the Government tried to get workers to exchange their rights for shares, we were told that 6,000 businesses would sign up. In the event, only six have even shown an interest—not 600 or 60, only six. What went wrong?
The Prime Minister
The programme has not even started yet: it starts in September. It is a programme that has been praised by the Institute of Directors, the CBI and the Federation of Small Businesses, but of course it has not been praised by Len McCluskey and the Unite union. The hon. Gentleman is a member of Unite, so he has to stick to their script. What a sad day for democracy.
Mr David Nuttall (Bury North) (Con)
Q10. When he plans to visit Bury North constituency.
The Prime Minister
I enjoy all my visits to Bury. I look forward to visiting it again, and I always take special time to look at the statue of Sir Robert Peel.
Mr Nuttall
Whenever the Prime Minister does next find time to sample the delights of Bury, Ramsbottom and Tottington, will he join me in meeting some of the hundreds of local small businesses and charities that will be £2,000 a year better off from next April because of the new employment allowance, which will cut employers’ national insurance contributions, giving them a real incentive to create genuine new jobs?
The Prime Minister
My hon. Friend is right: you can now walk down any high street in any town in Britain and point out to shopkeepers and business owners that if they employ people, they will see a £2,000 reduction in their national insurance bill, and if they do not employ people, they can take people on and not pay national insurance. That is possible only because of the tough decisions the Government have taken on public spending and welfare, decisions that have never been backed by Labour, but which demonstrate that we are on the side of people who work hard and want to get on.
Angus Robertson (Moray) (SNP)
The Prime Minister’s deputy party leader in Scotland describes the UK Government’s scaremongering about independence as “silly”; one of his key donors in Scotland describes it as “puerile”; and the country’s leading Conservative commentator says that it is “tripe”. Given that the Prime Minister is in charge of Project Fear for the UK Government, will he ditch this silly, puerile tripe?
The Prime Minister
I have a remarkable feeling of déjà vu, because I was asked precisely this question yesterday. I will give a similar answer: the information that has been produced by the Government on what would happen under Scottish independence is impartial, extremely powerful and very sensible. The fact is that the Scottish nationalists are losing the arguments on jobs, the economy and the influence that Scotland would have in the world. I say bring on the referendum, because they are losing the battle.
Steve Baker (Wycombe) (Con)
Q11. Last Sunday, High Wycombe Rotarians raised more than £10,000 for local under-privileged children. I feel sure the Prime Minister will join me in encouraging membership of a full range of voluntary service clubs in the community, but does he agree that those wonderful voluntary institutions stand in stark contrast to the kind of institution that would try to block-buy political influence despite—[Interruption.]
The Prime Minister
My hon. Friend is right. It is a huge honour for me to be an honorary member of my local Rotary club in Witney. Such clubs are an important part of the big society, they raise a lot of money and they do an excellent job, but they certainly do not go around hoovering up members by making single payments from trade unions in order to buy influence.
Thomas Docherty (Dunfermline and West Fife) (Lab)
Q12. Back in March, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) said, “I wouldn’t be sleeping if we didn’t have 10,000 signed up to the Green Deal by the end of the year.” So far only four households have signed on the dotted line: is that Len McCluskey’s fault as well?
The Prime Minister
The hon. Gentleman is wrong about the figures. The fact is that 37,000 households have had green deal assessments and more than 5,000 have had their boilers changed. Of course, the hon. Gentleman also receives sponsorship from the Unite union—
The Prime Minister
He does not? He should go through his constituency records and check all the members are still alive—that might be a good start.
Andrew Selous (South West Bedfordshire) (Con)
The Prime Minister has rightly won praise for his work on dealing with tax avoidance, but some people have called him hypocritical. What does he say to that?
The Prime Minister
What is hypocritical is to take donations from a donor in the form of shares to avoid taxes. That is what the Labour party has done. It should pay back that £700,000 to the taxpayer, and that money should go to schools and hospitals. That is Labour’s shame.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
Q13. Can the Prime Minister confirm that the latest Work programme figures show that it is missing every single one of its minimum performance standards?
The Prime Minister
If the hon. Lady is asking about the Work programme, the fact is that it has got 312,000 people into work. Some 60% of the people going into the Work programme are coming off benefits. While the Unite union and all the Unite Members opposite might not want to hear it, and while it might not be part of Len McCluskey’s script, the fact is that this programme is twice as good as the flexible new deal.
Dr Phillip Lee (Bracknell) (Con)
Q14. As a doctor who once had to listen incredulously to a patient explain, via a translator, that she only discovered she was nine months’ pregnant on arrival at terminal 3 at Heathrow, I was pleased to hear the statement from the Secretary of State for Health today on health tourism. Does the Prime Minister agree that although the savings are modest, the principle matters? The health service should be national, not international.
The Prime Minister
My hon. Friend makes a very important point. This is a national health service, not an international health service. British families pay about £5,000 a year in taxes for our NHS. It is right to ensure that those people who do not have a right to use our NHS are properly charged for it. We have made this announcement, and I hoped that there would be all-party support for it, but Labour’s public health Minister has condemned it as “xenophobic”, so I assume that Labour will oppose this sensible change that working people in this country will roundly support.
Pat Glass (North West Durham) (Lab)
Q15. The bedroom tax is turning into a disaster in constituencies such as mine. Families are moving out of good-quality social housing and into the private rented sector at a greater cost to the taxpayer. Three and four-bedroom houses are now standing empty and are classed as hard to let. I even have pensioners approaching me saying that they want to downsize but cannot because small properties are prioritised for families. Is this not turning into a disaster for the taxpayer, as well as for families?
The Prime Minister
This is fair for the taxpayer. We do not give a spare room subsidy to people in private sector accommodation, so we should not give a spare room subsidy to people in council accommodation. The question now is for the Opposition. We have decided to remove the spare room subsidy. They now say they support our spending changes—well, they did for about five minutes last week. Is that still the case, or are they committed to repealing this? There is absolutely no answer.
Paul Burstow (Sutton and Cheam) (LD)
The shocking abuse that was revealed in Winterbourne View and by Operation Jasmine in Wales has revealed a gap in the law, which means that while the staff are prosecuted, the organisations are never corporately accountable for what they have allowed to take place. Will the Prime Minister meet me and a small delegation to discuss how to plug the gap in the law and ensure that there is proper accountability for abuse and neglect?
The Prime Minister
I am very happy to meet the right hon. Gentleman, because this issue is vital. I think the Francis report had a number of recommendations on duties of care and duties of candour that we need to put in place. I am keen to ensure that we get that done.
Mr Ben Bradshaw (Exeter) (Lab)
Why has the royal charter, which was approved overwhelmingly by this House, still not been sent to the Privy Council when that should have been done in May? Will the Prime Minister assure the House and the victims that he will not do a deal with certain newspapers further to water down Lord Justice Leveson’s recommendations?
The Prime Minister
What I can say to the right hon. Gentleman is that we have to follow the correct legal processes. The legal advice, which we have shared with the Leader of the Opposition and his deputy, is that we have to take these things in order: we have to take the press’s royal charter proposal first, and then we have to bring forward the royal charter on which we have all agreed. I have to say that I think the press’s royal charter has some serious shortcomings, so, no, I have not changed my view.
Mr Speaker
I call Mr Drax. [Interruption.] The hon. Gentleman wanted to be called and I have called him. He should be thanking me.
Richard Drax (South Dorset) (Con)
Thank you, Mr Speaker, very much indeed. I am most grateful to you.
Given that the selection of parliamentary candidates is a legitimate concern of this House, does the Prime Minister agree with me that the voting irregularities in the Falkirk constituency should be looked at as a matter of urgency?
Mr Speaker
Order. The question is about a party matter. It is not a matter of Government responsibility, not a matter—[Interruption.] No, no: it is not a matter for the Prime Minister—complete waste of time.
Mr Peter Bone (Wellingborough) (Con)
The all-party group against human trafficking has raised the awareness of modern-day slavery to a great level. I am delighted to report that last night 158 hon. and right hon. Members of this House and the other House attended the annual general meeting. That is a credit to the Prime Minister’s personal commitment to this issue. Would he consider, perhaps in the next Queen’s Speech, having a modern slavery Act?
The Prime Minister
I pay tribute to my hon. Friend for the consistent work he has done on this vital issue. It is important that we wipe out modern-day slavery, and I very much enjoyed going to meet him and other Members to see just how bad the situation is. We are looking at legislative options, and I will be chairing a committee across Government to look at what more can be done.
Glenda Jackson (Hampstead and Kilburn) (Lab)
One of my constituents and her three-year-old child had become homeless fleeing the most heinous domestic violence; and now, despite legally living and working in this country for four years, an immigration technicality has made them destitute. Will the Prime Minister please examine this legislation and its possibly unintended consequences, so that in future no woman and her child may suffer double abuse?
The Prime Minister
I am very happy to look at the individual case the hon. Lady raises, which actually links to the last question, about modern-day slavery. Sometimes immigration rules have caused difficulty for those who want to flee the people who are keeping them entrapped in their homes, so I am very happy to take up the individual case.
George Freeman (Mid Norfolk) (Con)
Does my right hon. Friend agree that the shocking catalogue of revelations of NHS management failures highlights the importance of the Government’s quiet revolution of patient empowerment and accountability, which we need to modernise the NHS so that it becomes driven by the patients who pay for it and whom it is there to serve?
The Prime Minister
My hon. Friend is absolutely right. I am a huge fan of and believer in our NHS. At its best, it provides the best care in the world and incredible compassion for families who use it, but we do not serve the NHS if we hide or cover up when there are difficulties in individual hospitals. Clearly there were in Stafford, there were in Morecambe Bay and, we read today, there are in the Tameside hospital, too. That is why the reform of the Care Quality Commission and the chief inspector of hospitals post are so important, and why I think the friends and family test, which will be applied in every part of every hospital over time, will make a real difference. That is in stark contrast to what we had under the last Government, when inspectors were basically told not to surface problems, because it was somehow embarrassing for the Government.
Paul Flynn (Newport West) (Lab)
Was it the Prime Minister’s conception when he set up the office of police and crime commissioner that a fine chief constable such as the one in Gwent should have a career cut short by a vindictive bully who told her to resign or he would humiliate her?
The Prime Minister
The point of having police and crime commissioners is to make sure there is proper accountability and that police constables have to account to a local person. That is why a number of former Labour Members of Parliament stood for the post. In some cases, such as that of John Prescott, the people of his region saw sense and rejected him.
Mr Speaker
Order. Before I call the Secretary of State for Defence to make a statement, let me say that we need an orderly House, both because that is right in itself and because it will be of interest, in the light of the coverage of this matter, to discover whether he has anything to say in the House that we have not already heard outside. We look forward to it.
Petition
Greg Mulholland (Leeds North West) (LD)
Earlier today I accompanied the family of Jamie Still—Jamie’s mother Karen, father Mike, sister Rebecca and grandfather Peter—to present a 13,000-strong petition on behalf of the Jamie Still campaign. I want briefly to pay tribute to their courage and especially to the work of Jamie’s sister Rebecca, who has shown remarkable courage in the face of the tragic and unnecessary loss of her brother.
The petition states:
The Petition of a resident of the UK,
Declares that the Petitioner believes that the sentences for drink driving need to be tougher in the UK; in one case the brother of Rebecca Still was knocked down and killed by a drunk driver whilst he was on the pavement with his friends; further that the Petitioner believes that the driver did not lose his licence until 8 months later and did not go to prison until 9 months later; further that the driver received 4 years in prison but may only serve 2 years. The Petitioner would like zero tolerance for drink drivers so that they lose their license earlier and so that sentences are longer.
The Petitioner therefore requests that the House of Commons urges the Government to amend legislation so as to be tougher on drink driving.
And the Petitioner remains, etc.
[P001192]
Reserve Forces
(11 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Defence (Mr Philip Hammond)
With permission, Mr Speaker, I wish to make a statement on the future of our reserve forces. In November last year, I announced a formal consultation, which lasted until January this year. I am grateful for the more than 3,000 responses we received. I have placed copies of the summary of consultation findings in the Library of the House.
More than 25,000 reservists from all three services have deployed on operations over the last 10 years. Sadly, 30 have paid the ultimate price, and I know the whole House will want to join me in saluting their sacrifice.
In 2011, the Future Reserves 2020 Commission reported that our reserves were in serious decline. This Government responded by committing to revitalise our reserve forces as part of Future Force 2020, reversing the decline of the recent past, growing their trained strength to 35,000 by 2018 and investing an additional £1.8 billion in them over 10 years.
We recognise the extraordinary commitment reservists make and, in return, we commit to deliver the reservist a challenging and rewarding experience, combined with an enhanced remuneration and support package and an improved deal for employers. However, to recruit the reserves we need and to train and equip them to be fit for purpose in Future Force 2020 requires substantial change. I am today publishing a White Paper setting out our vision for the reserve forces and the detail of how we will make reserve service more attractive. It also confirms our intention to change the name of the Territorial Army to Army Reserve—better to reflect the future role.
Alongside the White Paper, I am publishing the first report of the independent external scrutiny group, which I announced last year to oversee and report on our progress in delivering Future Reserves 2020. The White Paper reiterates our commitment to improve access to modern equipment and to provide better training as part of the £1.8 billion package. About £200 million will be invested in equipment for the Army Reserve and to kick-start that programme, I can announce today that we will bring forward to this year £40 million of investment in new dismounted close combat equipment, meaning that upgraded weapons and sights, night vision systems, and GPS capabilities will start to be delivered to reserve units before the end of the year.
The integration of regulars and reserves is key to Future Force 2020. That integration prompts a closer alignment of the structure of remuneration across the armed forces. We have therefore decided to increase reservists’ total remuneration in two ways: through the provision for the first time of a paid annual leave entitlement in respect of training days, and through the accrual of pension entitlements under the new future armed forces pension scheme 2015 for time spent on training as well as when mobilised. These two measures represent a substantial percentage increase in total reserve remuneration.
The White Paper sets out details of an improved package of occupational health support for reservists to underpin operational fitness. We will also ensure that effective welfare support is delivered to reservists and their families. Welfare officers are being recruited now for Army Reserve units. Additionally, we have already implemented measures to streamline and incentivise the process by which those leaving the regular forces can transfer to the volunteer reserve, with accelerated processing, passporting of medical and security clearances and retention of rank, as well as a “signing-on” bounty of £5,000 for ex-regulars and for direct entry officers joining the Army Reserve.
The support of employers is crucial to delivering the future reserve forces. We seek to strengthen the Ministry of Defence’s relationships with employers so that they are open and predictable. The White Paper sets out how we will make liability for call-up more predictable; make it easier for them to claim the financial assistance that is already available; increase financial support for small and medium-sized enterprises by introducing a financial award of £500 a month per reservist when any of their reservist employees are mobilised; and improve civilian-recognised training accreditation to help employers to benefit from reserve training and skills.
The White Paper signals a step change in Defence’s offer to employers. I urge them to take up this challenge. In turn, by building on the armed forces covenant with the introduction of the corporate covenant, we will ensure that reservist employers get the recognition they deserve. However, while Defence is fully committed to an open and collaborative relationship with employers, it is essential that the interests of reservists should be protected. Dismissal of reservists on the ground of their mobilised reserve service is already illegal. We will legislate in the forthcoming defence reform Bill to ensure access to employment tribunals in claims for unfair dismissal on the ground of reserve service, without a qualifying employment period.
The job that we are asking our reservists to do is changing, and the way in which we organise and train them will also have to change. That will impact on force structure, and on basing laydown. The force structures and roles of the maritime and air reserves will remain broadly similar to now, although increased in size and capability. The Army, however, has had substantially to redesign its reserve component to ensure that regular and reserve capabilities seamlessly complement each other in an integrated structure designed for the future role. That redesigned structure has been driven primarily by the changed function and roles of the Army Reserve and by the need to reach critical mass for effective sub-unit training.
The details of the future Army Reserve structure are complex, and beyond what could coherently be explained in an oral statement. I have therefore laid a written statement, supported by detailed documents that have been placed in the Library of the House, showing the complete revised order of battle of the reserve component of Army 2020.
The restructuring will require changes to the current basing laydown of the Army Reserve. The TA currently operates from 334 individual sites around the United Kingdom, including a number of locations with small detachments of fewer than 30 personnel. Some of those sites are seriously under-recruited. To maximise the potential for future recruitment, the Army has determined that, as it translates its revised structure into a basing laydown, it should take the opportunity to rationalise its presence by merging small, poorly recruited sub-units into larger sites in the same conurbation or in neighbouring communities. As part of that exercise, the Army Reserve will open or reopen nine additional reserve sites.
However, the consolidation of all poorly recruited units would have led to a significant reduction in basing footprint and a significant loss of presence in some, particularly rural, areas. I have decided that that would not be appropriate as we embark on a major recruitment campaign. We will therefore retain a significant number of small and under-recruited sites that the Army considers could become viable through effective recruiting. The units on those sites will be challenged to recruit up to strength in the years ahead. Over the next couple of years, we will work with local communities, through the Army’s regional chain of command, to target recruitment into those units. I know that right hon. and hon. Members will want to lead their local communities in rising to that challenge.
The result of the decisions I am announcing today is that the overall number of Army Reserve bases will be reduced from the current total of 334 to 308—a net reduction of 26 sites. With your permission Mr Speaker, I will distribute a summary sheet that identifies the reserve locations being opened and those being vacated.
The White Paper and the written ministerial statement on structure and basing set the conditions to grow and sustain our reserves as we invest an additional £1.8 billion over 10 years in our vision for the integrated reserves of Future Force 2020. That vision calls for an even bigger contribution from our reservists and from employers as we expand the reserve forces. I am confident that both will rise to the challenge.
For the first time in 20 years, the reserves are on an upward trajectory. Those of us who are neither reservists nor employers can none the less provide vital support and encouragement to our fellow citizens who make such a valuable contribution to delivering our national security, and I know that Members on both sides of the House will want to take the lead in urging our communities to get behind the reserves and the recruiting drive that will build their strength to the target level over the next five years. I commend this statement to the House.
Mr Jim Murphy (East Renfrewshire) (Lab)
I thank the Secretary of State and his officials for giving me advance briefing, but I am disappointed by the fact that we have been given only half a statement. The House does not have the luxury of possessing a list of the bases that the Government intend to close, because that has not been shared with Members on either side the House. It does not appear to be in the Library either, and it is not contained in the White Paper. I will happily accept your guidance, Mr. Speaker, on whether I should continue.
Mr Speaker
It is certainly open to the right hon. Gentleman to continue. If it was the Government’s intention that such further details should be available in the Vote Office and they are not, that is at the very least regrettable, and arguably incompetent. If it was not the intention for the material to be available, it should have been.
Mr Speaker
Order. I do not think that the Secretary of State can respond at this stage. He will have to do his best to respond to questions later, and we shall have to cope as best we can, but the situation is deeply unsatisfactory.
Mr Speaker
Order! I cannot take points of order in the middle of a statement.
The shadow Secretary of State is his own best adviser. He has material, he is a dextrous fellow, and I suggest that he will wish to continue.
Mr Murphy
Under your guidance, Mr. Speaker, I shall of course do so, but I am sure that Members in all parts of the House will, like me, consider it utterly unacceptable that we are being expected to comment on a statement that has not been shared with the House. We have been told that a number of bases are to be closed—26, I understand—but the House is not in a position even to scrutinise any of the measures that have been advocated by the Government. I do not think that that is malevolent; I believe it to be utterly incompetent. However, on the basis of your advice, Mr. Speaker, I shall continue.
We support an enhanced role for the reserve forces, working alongside regulars to project force globally. Our reserves make an enormous contribution here at home in many ways, including the 2,000 who helped to protect the Olympics. Many serve overseas in faraway terrain in the name of national security. It is right that we pay tribute to each of those who have served, and above all to those who have lost their lives. It is even more important for us to reflect on their courage, professionalism and patriotism so soon after Armed Forces day.
While we champion reserve forces, we recognise the need to modernise. However, it is worrying that rather than synchronising the reform of the Army with that of the reserves, today’s announcement appears to have been belated. There are also fears that the reserves uplift is designed not to complement our Army, but to supplement lost capacity. Many people will reasonably want the Government to explain the defence rationale. They will want to know why the cuts in the regular Army are happening regardless of the success of any uplift in the reserves. Concern about that is only added to by the fact that the TA recruitment targets were missed by more than 4,000 last year.
Labour Members welcome much of today’s announcement—that which has been shared with the House—including the information about mental health. Increased training alongside regulars and investment in equipment will enhance reserves’ capability. Transferability of qualifications will encourage recruitment, and the change in the name is welcome. However, there will undoubtedly be concern and real hurt in the 26 as yet anonymous communities in which centres are being closed. We will examine the detail of that as soon as the Secretary of State and his team deign to share it with the House, as they have already shared it with the media.
There will be concern in certain parts of the country, particularly Scotland and south-west England, about some of the decisions that seem to have been reached. We have said repeatedly that we want, and the country needs, a reservist plan to succeed, but much of that will depend on getting the offer right for employers and reservists. A central challenge to be overcome is ensuring that reservists’ employment patterns are compatible with longer deployment periods, and that they do not face discrimination in the workplace. Service experience is an enormous asset to business, but despite that, a recent survey by the Federation of Small Businesses found that one in three employers believed that nothing would encourage them to employ a reservist.
Will the Secretary of State comment on the balance between transparency and security, particularly in respect of reservists in Northern Ireland? Will he also tell us what measures he will introduce to ensure that the employers who are least well equipped to absorb the impact of large-scale deployment, such as small businesses, are able to manage requests for leave?
Engagement with public sector employers is compulsory. We should not be inviting demands on the private sector that we would not make of the public sector. Will the Secretary of State explain how the process will be managed and monitored across Departments, and will he tell us how many Departments currently bill the Ministry of Defence for the cost of members of their work force who are deployed as reservists?
It is essential that those who volunteer to protect our country are protected in their workplace. The announcement on access to unfair dismissal tribunals is welcome, but, on discrimination at the point of hiring, I fear that the Secretary of State may be missing an opportunity. We need to get this right, rather than be rushed, but many will worry that time spent on consultation on the principle could be better used by consulting business on specific proposals.
A number of reservists who have recently lost their jobs will be on welfare. We have heard assertions from the Government on the bedroom tax and the armed forces that have turned out to be unfounded. I do not doubt Ministers’ intentions on welfare, but question the implementation, so for the purpose of clarity will the Secretary of State publish full detailed tables on how reservists in receipt of benefits or credits will be affected?
On niche specialisms, can the Secretary of State say more about how he would seek to recruit reservists with specialisms where there are current skills shortages, particularly in languages, with targeted recruitment among diaspora communities?
These reforms must succeed to fill the capability gaps, but, more importantly, they should mark a change in culture where we strengthen our front-line force with a greater and more integrated use of civilian expertise. Our modern forces must be as diverse as the threats we face, and that means having a new, high quality Army Reserve. In the interests of national security, we will work with the Government to make that a reality—but I wish to say again on behalf of the whole House how unacceptable I find it that I am expected to respond to a statement about the closures of bases, the detail of which was not shared with any Member of this House, whereas those who gather to record our proceedings have the full detail. It is a shameful way to behave, and occasionally Ministers have to have the courage to come and advocate their own policy in this Chamber.
Mr Speaker
Order. Before the Secretary of State rises to respond, he said in his statement:
“With your permission Mr Speaker, I will distribute a summary sheet that identifies the reserve locations being opened and those being vacated.”
It was not clear from that wording quite when the intention to distribute was, but clearly significant numbers of Members had not received a copy of the tri-service site summary by location, which is a detailed piece of information on one sheet. It was, however, apparently available to members of the media. I hope that the Secretary of State—[Interruption.] Order. I hope that the Secretary of State can clarify the situation, but on the face of it, it is a very considerable discourtesy to the House of Commons, and I hope he can either prove it is not, or if he recognises or accepts that it is, I am sure he will be gracious enough fulsomely to apologise to the House of Commons.
Mr Hammond
I was intending to open my remarks by apologising for the evident delay in distributing these summary sheets. The summary sheet I referred to relates to the basing and structure statement that has been made today as a written statement. However, I felt that Members would wish to have a summary of the most important element of that—the base closures—and it was my intention, Mr Speaker, with your permission to distribute that sheet as I sat down at the end of my statement, and I deeply regret that it was not available until just a few moments ago. I am also not aware that it has been distributed outside this House.
I am grateful to the right hon. Member for East Renfrewshire (Mr Murphy) for his broad support for these measures. We have discussed these issues before, and I know the Opposition wish these measures to succeed. It is our intention that the reserves, and, as the right hon. Gentleman said, civilian contractors, will play a crucial role in the delivery of Future Force 2020, and the integrated regular reserve whole force will be at the centre of that construct.
The right hon. Gentleman referred to “longer deployment periods”. It is not the intention to increase the maximum length of deployment period. That will remain as now, usually six months in an enduring operation, with a period of pre-deployment training to precede it.
The right hon. Gentleman asked about transparency and security, and mentioned specifically the context of Northern Ireland. This is a perfectly fair point. We want to be as transparent as possible with employers, and we want to recognise employers, but we also recognise that there will be both employers and reservists who for various reasons will be reluctant to be identified, and we will, of course, respect that as we deliver this agenda.
The right hon. Gentleman asked about small and medium-sized enterprises. We have today introduced a very significant bonus for SMEs, with a £500 per month per reservist cash bonus on top of the other allowances that are already available for SMEs when an employee reservist is called up for operations, but the right hon. Gentleman is absolutely right: on top of the cash inducement, flexibility is crucial to SMEs, and we will continue to exercise flexibility in dealing with requests for postponement.
The right hon. Gentleman asked about public sector employers. I absolutely agree that the public sector must lead the way. Central Government have already set out a very generous offer to reservist employees in excess of that which is statutorily available. We are challenging the wider public sector to match that, and the NHS is already a very considerable provider of reservists, but I should just clarify that public sector employers are not eligible for the financial inducements we have announced today, and, indeed, for the ones that were already available.
The right hon. Gentleman referred to the issue of discrimination at the point of hiring. As he knows, the consultation response identified that some 46% of reservists reported a perception of discrimination at some point either in the workplace or in applying for work. We have announced in the White Paper that we are today establishing a website at which reservists can report incidences of perceived discrimination, which we will then investigate. If we discover that there is a case for further action, we will take it, including considering the possibility of further measures in the next quinquennial armed forces Bill, which is due for introduction in 2015.
The right hon. Gentleman asked about the specific issue of the spare room subsidy as it affects members of the reserve forces. We have been clear about that. There is a section in the White Paper on benefits and related matters. If the situation is still not clear to him after he has looked at that, I will be very happy to clarify further, although the Department for Work and Pensions is, of course, the lead Department on this matter. I can say this to the right hon. Gentleman, however: where any adult member of the reserves is deployed on operations or pre-deployment training and is called up and as a consequence vacates a room in their parents’—or another person’s—house, that room will not be treated as unoccupied for the purposes of calculation of the spare room subsidy.
Mr James Arbuthnot (North East Hampshire) (Con)
I declare an interest in that my daughter is a member of the Territorial Army.
I know my right hon. Friend and the entire House will wish to pay tribute to my hon. Friend the Member for Canterbury (Mr Brazier) for what is by any standards an astonishing parliamentary achievement. Does my right hon. Friend agree that there is no plan B, and that it is absolutely essential that this reserves plan succeeds? Will he therefore persuade our right hon. Friend the Prime Minister to join forces with the Leader of the Opposition to make it absolutely plain to employers that the success of this strategy is vital in the national interest?
Mr Hammond
My right hon. Friend is, of course, absolutely right. The success of this strategy is vital in the national interest, and I very much welcome the fact that the Opposition have approached the matter in a bipartisan fashion, challenging and questioning us where appropriate, but supporting the basic principle of expanding the reserve forces. I would be very happy to suggest to my right hon. Friend the Prime Minister that he make a joint approach to employers with the Leader of the Opposition. I am sure both of them share the view that the support of the employer community is critical to the success of this project.
Mrs Madeleine Moon (Bridgend) (Lab)
As we withdraw from Afghanistan it will be increasingly important to have community buy-in and community awareness of our ongoing defence needs, so the building up of reserve forces within communities will be vital. It is disappointing that hon. Members, who will take a lead often in their communities to encourage people to focus on the reserve forces, do not have a copy of the statement and have belatedly had copies of the details of the areas that have been closed. I find that two are being closed in Wales, which is worrying for me because Wales’s defence footprint is already particularly small compared with that of the rest of the UK. Will the Secretary of State assure me that he will look at the impact on recruitment in Wales and the opportunity for reservists in Wales to continue to serve following the closure of these bases?
Mr Hammond
I can tell the hon. Lady that I have already done that. For example, the Territorial Army centre at Caernarfon is to close and I have looked at the distribution of the home addresses of TA members serving at that base. The nearest alternative base where they would be expected to go is at Colwyn Bay and, in fact, the majority of them live closer to Colwyn Bay than they do to Caernarfon. So we would expect the majority of them to continue to serve at the Colwyn Bay TA centre.
I have to explain to the House that when I said in my statement that some of these small units are significantly under-recruited, I was not overstating my case. We have TA centres with six or seven people enlisted at them, and we have one where the average attendance on training nights has been one over the past year. This is not just a question of the careful husbandry of resources; it is also a question of delivering the kind of training that we have promised members of the Army Reserve. We cannot deliver effective training unless we have a critical mass at the sub-unit level, and that is the driver of all the changes we are announcing today.
Mr James Gray (North Wiltshire) (Con)
I warmly welcome many of the detailed announcements that the Secretary of State has made this afternoon about the way in which both regulars and civilians will be incentivised to join the TA and how employers—small and medium-sized enterprises, in particular—will be able to look after their employees. Nevertheless, is he not concerned that there will be a time gap between a large number of regular soldiers, sailors and airmen being made redundant, which is happening at the moment, and having the 30,000 fully trained TA members that he intends to have in place? What is he going to do about the time gap?
Mr Hammond
Of course, as my hon. Friend correctly presents, it will take us until 2018 to have achieved a 30,000-strong trained Army Reserve. We are seeking to capture as many ex-regulars leaving the regular service as we possibly can, and we expect that the £5,000 transfer bounty, together with the streamlining of the procedures for transfer from the regular to the reserve, will have a significant impact. He rightly says that there will not be a smooth trajectory between now and 2018—some of the measures we have to take will have short-term negative impacts before they deliver long-term positive gain—but we are clear that this is the right path to adopt.
Joan Walley (Stoke-on-Trent North) (Lab)
Given the confusion that we have just had, can the Secretary of State categorically confirm that our campaign to keep the Cobridge TA centre in Stoke-on-Trent open, not least because of its community work, has meant that it is definitely not for closure and will stay open? Will he also give me an assurance about the recent Supreme Court judgment relating to the late Corporal Stephen Allbutt, whereby the Ministry of Defence has a duty of care properly to equip all serving armed forces under the Secretary of State’s jurisdiction? Will he assure me that the change being brought forward today will make sure that all our armed forces will be properly equipped and kitted out?
Mr Hammond
I am a bit astonished that someone who was a supporter of the previous Government has the effrontery to sit there and challenge me to declare that all our armed forces will be properly equipped when they go into battle, given the shocking examples that we had during the last years of the last decade in Afghanistan.
The hon. Lady correctly says that we have a duty of care, and we take it very seriously; we have made a very clear political and moral commitment to properly equipping our armed forces. I have to say to her that I do not believe that enshrining that as a legal duty, as the Supreme Court appears to have done, will help the operation of our armed forces. She also asked me specifically about Stoke-on-Trent and I can tell her that if it is not on the list we have supplied, it is not going to be vacated.
Mr Speaker
Order. I gather—I have just been informed and seen evidence for myself—that the oral statement, or copies thereof, is now being distributed around the Chamber, in what is an unedifying spectacle. I have, in all sincerity and candour, to say to the Secretary of State that, as he will know, the content of statements is not a matter for me and I take no view of them, but the administration of this matter has been woefully inadequate and, frankly, utterly incompetent. I have not known a worse example during my tenure as Speaker. I know that the Secretary of State has expressed himself in his usual, rather understated, terms, but I hope he genuinely does feel some sense of embarrassment and contrition at what has been a total mishandling by his Department, for which he is solely responsible—it is as simple as that.
Sir Menzies Campbell (North East Fife) (LD)
I hesitate to pile Pelion on Ossa, but you will recall, Mr Speaker, that earlier this year I had occasion to raise a similar issue with you about the provision of information—the MOD has form and, no doubt, the opportunity will be taken to revise procedures.
A quick perusal of the list allows me to say that I am grateful that the bases at RAF Leuchars where an engineer regiment is based, and at Cupar, where a yeomanry squadron is based, both of which are in my constituency, are to be preserved. May I make a point to my right hon. Friend that is less about process and more about substance? Those, such as me, who have been in the House for a long time have on many occasions heard statements of the kind we have just heard from him advocating a much greater use of the value of reserves—like me, the hon. Member for Canterbury (Mr Brazier) will recall many of them. The issue now is not what the statement says; it is the extent to which it will be implemented and the extent to which the MOD will be answerable if it is not.
Mr Hammond
First, I am indeed embarrassed by what appears to have just occurred. As you would expect, Mr Speaker, I will be investigating precisely what has happened and I will write to you to let you know what has gone wrong this afternoon. I understood that copies of the statement and copies of the spreadsheet would be distributed as soon as I sat down, and I apologise for the fact that that did not happen.
My right hon. and learned Friend is, of course, right to say that a statement in itself, or a White Paper in itself, does not deliver the solution. But I am not coming to the House today presenting a set of ideas that we will now begin to implement; many of these ideas and processes are already under way and beginning to have effect. I have given commitments previously, and I will give them again, to keeping the House updated through the publication of both recruitment figures and trained strength figures as we turn the corner with the Army Reserve.
Angus Robertson (Moray) (SNP)
The Secretary of State will be aware that today is the first anniversary of the Moray Firth Tornado crash tragedy, in which Flight Lieutenant Adam Sanders, Squadron Leader Samuel Bailey and Flight Lieutenant Hywel Poole and a seriously injured fourth serviceman were involved. RAF Lossiemouth, friends and families are remembering them today, as I am sure everybody does in the House.
On the statement, there has been a discourtesy to not only Members of the House, but to the parties in this House. Some hon. Members may not be aware that all political parties in this House—the Labour party and the parties of Scotland, Wales and Northern Ireland—receive an advance copy, and we were not provided with the appropriate information either. That is a huge discourtesy. It is unprecedented—I have never experienced it in my 13 years in this House—and it is unacceptable. Frankly, it is a dog’s breakfast and the MOD should be ashamed of itself.
As we know, in recent years there have been disproportionate cuts to personnel, to basing, to spending and now even to the Territorial Army in Scotland. In the absence of providing the list in detail and on time, will the Secretary of State please confirm that six of our 38 Army and Navy reserve sites are to close? That is 16% of the total and it represents twice Scotland’s population share, so the disproportionate cuts continue.
Mr Hammond
The approach to dealing with the estate and the rationalisation of structure has not been territorial but was based on the structure of the Army. Some new major units are relocating to Scotland. To answer the hon. Gentleman’s specific questions, there are 52 reserve sites in Scotland. Seven will be vacated and a new site will reopen, which means a net loss of six. According to my calculation, that is a 12% reduction in site footprint. I accept that the hon. Gentleman does not have ready access to the information, so he cannot know this, but some of the sites in Scotland are so incredibly poorly recruited that I think that even he would struggle to argue for their retention. There are sites with an establishment of 30 or 40 and a recruited strength of six, seven, eight or 10. We clearly cannot deliver a proper offer to Scottish reservists unless we consolidate on to sites that will deliver a critical mass at the sub-unit level for training.
Mr Julian Brazier (Canterbury) (Con)
I congratulate my right hon. Friend and the Minister of State, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), on an immensely good package. In the last statement, we heard that the Government were going to get back to using formed sub-units, which is what reserve officers want. This time, we have heard that we have gripped the critical mass issue at sub-unit level, that we are resourcing equipment properly and that we will have opportunities for employers at all levels and money for SMEs. This is a package for the future of the reserves and the future of our armed forces, of which we should all be proud.
Mr Hammond
I am grateful to my hon. Friend and repeat the congratulations expressed by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on his work in this area as a member of the independent commission, a tireless advocate of the reserves and a giver of good advice over a long period on a complex issue. I am grateful to him for his endorsement, as he is one of the significant number of people in this place who understand the reserves and what the debate is all about.
Derek Twigg (Halton) (Lab)
I would be grateful to know why the Secretary of State proposes to close the Widnes site in my constituency. Halton has 125,000 people and I would love to know the logic behind that decision. However, my question is as follows. Is not the Secretary of State missing the point? He tells us that he wants massively to increase the recruitment of reservists, but at the same time he is closing down a number of centres around the country. How is that logical and how does it make any sense whatsoever? He particularly makes the point that he wants to recruit ex-members of the armed forces. Halton is one of the best recruiting areas for the armed forces in the country, so why would he want to close down the TA centre?
Mr Hammond
Even in conurbation where there are numbers of TA bases, in some cases it has been necessary to consolidate them to reach critical mass and to provide the training offer that we have committed to deliver to reservists. I should explain to the House that the TA, as structured by the previous Government’s review in 2007, had an established strength of 36,500. It never resourced that and never recruited up to that strength. We are doing two things today. We are setting out a structure and basing laydown that will work for Future Force 2020 with a force of 30,000, but we are also dealing with the overhang of a hugely over-ambitious and underfunded proposition that the previous Government put in place in 2007.
Sir Gerald Howarth (Aldershot) (Con)
Although it is regrettable that the Secretary of State was not furnished with the correct information to enable the House to judge these matters, is it not the case that generally speaking with statements the devil is in the detail? The House will need to examine all the detail set out not only in the statement but in the White Paper. Although my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) is absolutely right that this is the only show in town, the Secretary of State should be under no illusions about the fact that this is a substantial challenge we face in cutting our regular Army to 82,000. Will the Secretary of State assure me that he will continue to keep the House regularly informed about the success of the recruitment so that the conditions that he has just set out, which applied after the last review conducted by the previous Government, do not apply to this one?
Mr Hammond
I am grateful to my hon. Friend and he is absolutely right. The complexity of such an issue requires a written statement, which is why I have made one today. The changes to the structure of the Army run into the hundreds—re-rollings, relocations and amalgamations—to create an effective force, and I pay tribute to the Army staff, who have done an enormous amount of work in producing this structure. I urge right hon. and hon. Members to look carefully at the detailed documents that have been provided today, because they explain the detailed position more clearly than an oral statement ever can. My hon. Friend challenges me to publish regular updates. I have already said that I have previously committed to publishing recruitment figures and trained strength figures—on a quarterly basis, I think—and I repeat that commitment.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
We welcome the broad thrust of the statement. As the Secretary of State will know, the reserve forces in Northern Ireland are among the best recruited of any region in the United Kingdom. Indeed, 2nd Battalion the Royal Irish Regiment is one of the best recruited reserve infantry units in the British Army. Although we welcome the decision to reopen Kinnegar, will the Secretary of State explain the decision to close the Territorial Army centre in Armagh?
Mr Hammond
I am afraid I shall be repeating myself. The right hon. Gentleman is absolutely right that Northern Ireland is one of the best-recruited areas—in fact, most of the units in Northern Ireland are over strength and we appreciate the commitment of the community in Northern Ireland to reserve service. The changes to Army structure and the delivery of efficient and effective training require the closure of the TAC at Armagh and the opening of an additional site. I hope that the right hon. Gentleman will accept that the transfer from Armagh to Portadown is part of the Army’s best effort to deliver the most effective way of training, recruiting and managing the reserve Army in Northern Ireland. We are not talking about something for just the next couple of years but about a structure and laydown that we expect to endure for many decades and to form the basis of the fully integrated Army we all want to see.
Mr John Baron (Basildon and Billericay) (Con)
I suggest that the Government have still failed, however, to show that their plans represent value for money or are in the best interests of this country. The fact that further cash incentives have been announced today, that that ex-regular reservists will be on a better scale of pay than brigadiers and that TA numbers have been falling all point to doubt being cast on Government plans—and that is before we consider the issue of capability. Would it not be wise to halt the disbandment of the regular battalions and to stop the loss of 20,000 regular troops until we know for sure that these plans will work?
Mr Hammond
My hon. Friend returns to a familiar theme—he has suggested that course of action to me on many previous occasions. We are restructuring our armed forces to reflect the threat they will face in the future, as identified in the strategic defence and security review, and to respond to the fiscal challenges we must address if we are to have a stable platform for the proper defence of this country. I am afraid to say to my hon. Friend that although it might be tempting to wish that we had the resources to retain the regular Army at its historic strength while we recruit up to 30,000 trained reserves, we do not have that luxury. I think the Opposition would acknowledge—and have implicitly acknowledged—that reducing the size of the regular Army while increasing the size of the reserves is not without risk but is the best way to manage the resources we have to deliver the military output we require.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
When the Secretary of State says that there will be effective welfare support for reservists, including in the context of the bedroom tax, I welcome that, and I am sure that my hon. Friends do, too. However, under DWP measures reservists are already exempt from the bedroom tax, and that is not the issue. Regular members of the Army are the ones who are affected by the definition of the bedroom tax. The veterans Minister, the right hon. Member for Rayleigh and Wickford (Mr Francois), is already well aware of that and has promised a meeting with me that will, I am sure, occur soon. We must resolve the issue now, because armed forces families are about four months in arrears.
Mr Hammond
The position is the same for members of the regular armed forces: if they are deployed on operations, the rooms they leave behind will not be treated as vacated—
Mr Hammond
I am happy to meet the hon. Gentleman and discuss the matter. I personally read the DWP regulations on this yesterday and I am clear that when a member of regular military personnel is deployed on operations, their room will continue to be treated as occupied for the purpose of the spare room subsidy.
Sir Bob Russell (Colchester) (LD)
What happens if the recruitment strategy fails?
Mr Hammond
We are committed to recruiting a reserve force of 35,000. I remind my hon. Friend that as recently as 1990, we had a trained reserve force of 72,500, so it is not as if we are trying to do something that has not been done before. All our English-speaking allies operate with far greater reserve forces as a proportion of their regular forces than we do.
I should tell my hon. Friend that the responsibility for delivering the strength required lies with the individual commands, and they understand and accept that they may have to flex resources if that is necessary to deliver the objective. We have no plan B: we will deliver these reserve numbers.
Keith Vaz (Leicester East) (Lab)
One of the huge threats we face at the moment is a cyber-attack. The United Kingdom is the primary target of operatives in 25 countries. What specific training will be given to reservists in this important but specialist field?
Mr Hammond
I am grateful to the right hon. Gentleman for allowing me to refer to that matter in detail. Part of the structure change relates to a new focus on reservists’ contributions to cyber-defence. Alongside the traditional image of the reservist, we are looking for people who spend their week sitting in front of a screen, perhaps working for one of the big IT companies, but who relish being able to deploy their skills in a more operational environment. We will specifically recruit cyber-reservists, who will not necessarily have to have the same levels of fitness or deployability as reservists in general if they are willing to deploy to add to our cyber-defence capabilities at UK locations on a routine basis.
Bob Stewart (Beckenham) (Con)
I hope very much that we will get 30,000 trained and deployable reservists by 2018, but over the past year recruitment to the Territorial Army—the Army Reserve, as it will be—has not been great, so I am slightly pessimistic. In 2018, will the armed forces be blamed if 30,000 reservists are not fully trained and deployable?
Mr Hammond
It will be for individuals to point the finger, although I can guess where it is most likely to be pointed. I should say that, having previously declined sharply, numbers have stabilised. Of course that is not enough, but it is at least a start; the hole is not getting deeper. The purpose of announcing the measures in the White Paper is to provide the backdrop for what will now be an aggressive recruiting drive to bring through the recruits who in two years’ time—it will of course take two years—will have become fully trained members of the reserve forces.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I am incredibly disappointed about the shambles today, not least because I learned only 20 minutes ago that Dunfermline was to close. I hope that the Secretary of State will explain the rationale behind that decision. However, written in hand on the summary sheet for this omnishambles of a statement is the word “Kilmarnock”. Will the right hon. Gentleman clarify whether that is a late addition or someone’s homework? What exactly is going on with Kilmarnock?
Mr Hammond
The hon. Gentleman is right that Dunfermline is closing: 154 Transport Regiment is to move to Bruce House Territorial Army centre, in one of a significant number of consolidations. In most cases, consolidations do not give rise to site closures because there is more than one unit on a site, but in some cases, where a consolidation removes the last unit or all the units on a site, logically the site closes. I emphasise again that the driver for these changes is not to vacate sites; it is to create a structure that will deliver the military capability we require and allow reservists to receive the training offer that we have set out to them today. I regret that, in some cases, that will mean that people have to travel to an Army Reserve centre in an adjoining community, but I should mention that reservists receive home-to-duty travel allowance and will therefore be reimbursed for the costs of making the journey.
Mr Speaker
Order. The hon. Gentleman is an eager beaver. The Secretary of State has given his reply. If he decides he wants to say anything further in response to a subsequent question, he is well able to do so.
Mr Hammond
Inspiration has just come to me. A new Army Reserve unit will move into Kilmarnock on an existing site, which will reopen to accommodate it.
Mr Crispin Blunt (Reigate) (Con)
Nine days ago, I took part in a flag-raising ceremony at the beginning of Armed Forces week, organised by the borough of Reigate and Banstead, at which more than 20 organisations signed a community covenant to support the armed forces. I challenge my right hon. Friend to find any local authority that has been more forward in its support for the armed forces locally, and it is a pretty poor reward that 80% of the reservists in the borough are to disappear. May I gently register my concern about the fate of the cadet forces associated with the TA centre in Redhill that he is proposing to close? I very much want to come and see him or one of his colleagues to discuss whether, in terms of the establishment of the wider armed forces, including the cadets, they have got the decision right locally.
Mr Hammond
I recognise that individual Members whose constituencies are affected by site closures are disappointed. The site at Redhill is occupied by a Royal Electrical and Mechanical Engineers battalion. REME is being reinforced as a result of the structural changes, but there is a need for consolidation to make it work, and 103 Battalion REME, 150 Recovery Company, is to move to the Mitcham Road TAC in Croydon. My hon. Friend’s constituency will of course retain the TAC at Reigate.
Cadets are co-located on many reserve sites. The fact that we are vacating a site does not mean that the building will be shut or the site disposed of. Where cadets are in occupation, they will continue to occupy and we will seek appropriate ways of reproviding for cadets in the same area; that may be on the same site or on one in the near vicinity.
Mr Speaker
Order. I am keen to accommodate the large number of right hon. and hon. Members who wish to contribute to exchanges on the statement, but doing so necessitates brevity.
Robert Flello (Stoke-on-Trent South) (Lab)
I too pay tribute to reservists, particularly those I had the privilege to meet in Afghanistan and Iraq on visits in recent years.
May I bring the Secretary of State back to the impact on businesses, especially SMEs? As we know, they are at the heart of the British economy. I have heard his statement, but I want to return to the concern that many SMEs have, because quite often it is a key individual in the business who is a reservist, and I am not sure that £500 is enough to cover the loss of that individual. Will he, as part of the White Paper process, look carefully at how he engages with businesses, particularly those that are not members of a wider business organisation?
Mr Hammond
We engaged extensively with business during the consultation period. The definition of an SME, of course, is very broad: up to 250 employees and £25 million. The £500 a month is not intended to compensate for the loss of the employee; it is intended to be an additional recognition, on top of all the other allowances and compensation amounts that employers can already claim. One of the crucial statements we made in the White Paper, and in the actions we have already taken, is the need to streamline the claiming procedure. One of the things we heard loud and clear in the consultation was that many employers find the process so cumbersome that it is hardly worth claiming. We are confident that, by streamlining the process, we will make it much more accessible and user-friendly for employers.
Andrew Griffiths (Burton) (Con)
Although I welcome the Secretary of State’s commitment to reservists and the extra funds available, clearly the announcement of the closure of the TA centre in Burton, Coltman House, will be greeted with disappointment and sadness by many of my constituents. Will he make available the rationale behind that decision and the recruitment figures to reassure me and my constituents that it is the right one? Following the earlier comments about cadet forces, Coltman House is also home to two fine cadet forces, the Army and Air Cadets, which have strong leadership and great young men and women involved. Will he meet me to ensure that those cadets have a future?
Mr Hammond
As I have just said, the cadets will remain in occupation. We are committed to providing them with accommodation, usually on the site but possibly close by, so that is the driver. I do not want anyone to get the impression that these changes are being made in order to vacate sites, because that is not the driver. The changes are being made because of Army structure considerations. It is not just about recruitment; it is also about the changing structure of the Army’s reserve component and the way it has to work in future. When my hon. Friend looks at the detailed information that has been laid in the Library, he will see that the change is part of a much bigger pattern of change to deliver the effective forces we need for the future.
Ian Austin (Dudley North) (Lab)
We have still not been provided with the detail in the written statement. Will the Secretary of State confirm that the effect of his statement today will be an overall reduction in the strength of reserve units in the west midlands, an area that makes a huge contribution to the armed forces generally? Will he also confirm that he has decided to abolish the Royal Mercian and Lancastrian Yeomanry in order to set up a Scottish yeomanry, a move that has failed twice before? If so, will he explain why, because absolutely no information has been provided about that so far? Although I have been told that the TA base in Dudley, which is currently part of the RMLY, will be retained, what confidence can we have that its long-term future will not be jeopardised by transferring the regional headquarters from Telford, which is 30 miles away, to Croydon, which is 190 miles away?
Mr Speaker
Order. The hon. Gentleman has availed himself of the opportunity to ask four questions, which he had no right to do, but I think that he will get one answer.
Mr Hammond
I am grateful to the hon. Gentleman for the opportunity to choose between his four questions. I will answer the RMLY question, because I know that other Members will be interested in it. The reason I did not include it in the oral statement is that it is a complex matter and one must limit the content of an oral statement, or else one would be severely admonished from the Chair. The RMLY’s regimental headquarters, the headquarters squadron, will be relocated to Edinburgh, where it will be renamed the Scottish and North Irish Yeomanry. The troop squadrons will remain where they are and will come under the command of other yeomanry units. At Telford, a troop will remain and come under command of A squadron, which will remain based at Dudley. It is a complex change that the hon. Gentleman will be able to understand if he looks at the documents that have been laid in the Library. We expect the troop squadrons remaining in the west midlands to adopt the name of the Royal Mercian and Lancastrian Regiment in their squadron titles.
Jane Ellison (Battersea) (Con)
Although today’s confirmation of the closure of the St John’s Hill barracks is sad, it has been widely understood locally that that would be the case. It has been a great honour to represent the London Regiment, based at its headquarters there, which has given distinguished service in operations over recent years. Will the Secretary of State confirm that he is content with the arrangements being made for the London Regiment?
Mr Hammond
The London Regiment is a very important component of the Territorial Army. It is well recruited and plays an important role, having made a large contribution to the campaigns in Iraq and Afghanistan. The rationalisation of the estate across London to provide training opportunities and optimum use of the new equipment we will be delivering has come from the Army itself, from the bottom up, as the best way of delivering the capability we need. I know that my hon. Friend will regret the loss of the TA centre in her constituency, but the London Regiment will continue to be a very important part of the reserve forces construct in London.
Naomi Long (Belfast East) (Alliance)
I welcome the Secretary of State’s comments about integrating welfare for reserve and regular soldiers. A constituent of mine, a former Royal Marine who is now in the Territorial Army, was injured on a training exercise and was unable to access Army rehabilitation and medical services in the same way he had been able to as a regular soldier. Will the right hon. Friend clarify whether the proposals will specifically address that point, and will he review the case to ensure that it is dealt with fully?
Mr Hammond
I take what the hon. Lady says at face value, but I am pretty surprised by the case she outlines. If she would like to write to the Minister of State, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), he will look into the matter.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
As my right hon. Friend knows, during a recent visit to the US Department of Veterans Affairs, the Northern Ireland Affairs Committee learned about how the US deals with its veterans, especially as far as mental health and other welfare issues are concerned. I suggest that he talks with colleagues in the Treasury and the Department for Work and Pensions to explore whether it might be possible to put an “R” after reservists’ national insurance numbers so that they are more easily identifiable in order to receive that kind of mental health support.
Mr Hammond
I am happy to explore that with DWP and the Treasury, but I recommend that my hon. Friend does not hold his breath while waiting for the answer. The way US veterans administration works is very different from the way we do things in this country, because they do not have the benefit of a national health service or a comprehensive welfare state.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Number 13 on the list of sites for closure is in my constituency. Is the intention to consolidate its activities at other sites in Edinburgh, and particularly in my constituency? With regard to the new or reopened Navy Reserve facility in Edinburgh, which facility is that and what activities does the Secretary of State envisage being undertaken there?
Mr Hammond
As the hon. Gentleman knows better than I do, there are a number of sites in Edinburgh, and there will still be a very substantial Army Reserve presence there. The unit he is talking about, 5 Military Intelligence Battalion, will be going to Fenham barracks in Newcastle.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
I commend the strategy and understand the logic of putting units together. I can save the Secretary of State the trouble of telling me that the Wick unit is down to six and that regularly only one attends, because I know that from conversations I have had with serving and former Territorials. That is a relatively recent development, because 10 years ago a substantial number of troops served on deployment in Iraq with distinction. I point out that it is a 250-mile round trip to the nearest reserve base of any kind, so if Wick closes it will effectively mean that the inhabitants of Caithness and Sutherland will no longer be able to give reserve service, and people who leave the Army and wish to be reservists will no longer be able to live in Caithness and Sutherland.
Mr Hammond
I realise that my hon. Friend will be disappointed by the decision in respect of Wick. However, he saved me the trouble of pointing out that seven people are registered at Wick, only a couple of whom regularly turn up on any training occasion. I have to say to him that it is just not possible to operate such a unit effectively.
The issue is not penny pinching or closing a base for economic reasons; it is that we cannot deliver effective training or any effective military capability out of a base with that kind of level of strength. I am afraid that we just have to be realistic about that. I do recognise that, unlike many other closing bases, Wick’s nearest alternative base is so far away that it is not practical to expect those seven people to transfer. Many of the other bases—of the 26—that we have been referring to are within easy travelling distance of other reserve facilities.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
What concerns me particularly about the shambles of this statement is the lack of detail in the documents provided. I am learning now that yet another document has been made available in the past few minutes, which I do not have in front of me—my right hon. Friend the shadow Secretary of State has it.
In the absence of that document, will the Secretary of State provide detail on the announcement about a new or reopened base in Cardiff? The list literally just says “Cardiff”; there is no other detail. What impact might there be, if any, on HMS Cambria, which is just over the border in the neighbouring constituency of the hon. Member for Vale of Glamorgan (Alun Cairns), but draws on many reservists from my constituency?
Mr Hammond
I think I am right in saying—I shall write to the hon. Gentleman if I am incorrect—that the decision has been taken to open an additional site in Cardiff, but the exact location has not yet been confirmed. The changes will happen over the next two and a half to three years. In some cases, there is an obvious site that we are going to reopen; in others, the Army is looking at different candidates. The Army is looking at structural conditions of buildings, for example. I will be happy to write to the hon. Gentleman and confirm that, if that would be helpful.
Bill Wiggin (North Herefordshire) (Con)
I share with the House my sadness at the closure of the Caernarfon Territorial Army centre, where I was a platoon commander. My concern is about the loss of the term “Territorial Army”. The Secretary of State will be aware that the greatest threat to part-timers comes from regular officers within the MOD who starve the reserves of their resources. Will the Secretary of State make sure that that cannot happen under his restructuring?
Mr Hammond
I say two things to my hon. Friend. First, the overwhelming majority of respondents to the consultation supported the proposal to change the name of the Territorial Army, better to reflect the role that it will play in future. The second thing is that—he will just have to take my word for this—at senior level there has been a sea change in the attitude in the Army. The Army now understands that it has to grip this as its problem and deliver the solution. I accept that there is still more work to be done in the middle ranks of the Army officer corps, to persuade people to adopt the integrated model for the future. That is a work in progress.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his statement and concur with the statement made by my right hon. Friend the Member for Lagan Valley (Mr Donaldson) on the closure of the Armagh unit; I express my disappointment at that as well. However, the announcement that Kinnegar in Holywood will become a centre for reservists is good news, which I welcome. Civilian staff there have been uncertain about their position in recent months. Can the Secretary of State confirm that Kinnegar will not be subject to any run-down or loss of civilian personnel as it becomes a centre for reservists in Northern Ireland?
Mr Hammond
My understanding is that, at the moment, Kinnegar is mostly used as a storage facility and the number of civilians employed there is relatively small. However, I cannot guarantee—this is part of another statement, in a sense—that as that role decreases there will not be some changes in the civilian staffing level. However, if the hon. Gentleman would like me to write to him with further details of the overall position affecting Kinnegar, I will be happy to do so.
Mr Tobias Ellwood (Bournemouth East) (Con)
I declare an interest as a member of Her Majesty’s armed forces reserves in the Military Stabilisation Support Group. As the Army rebalances its regular-reserve ratio, I hope that emphasis is placed on not only war-fighting skills but nation-building, peacekeeping, upstream intervention and stabilisation, where reservists can bring their civilian skills to the fore. May I also ask the Secretary of State what more could be done to ensure that the Army stabilisation activities that qualify against Development Assistance Committee rules can be claimed against the official development aid target?
Mr Hammond
As my hon. Friend will see when he reads the White Paper—the document that the shadow Secretary of State was waving a few moments ago—we do indeed emphasise that the role of the reserves in future will include participation in stabilisation and conflict-prevention operations.
On eligibility for ODA-compliant funding in these operations, recently my hon. Friend kindly sent me a paper that he has written suggesting areas that might be ODA-compliant. I have passed it to officials so that they can look further at whether there might be avenues to pursue.
Mark Garnier (Wyre Forest) (Con)
I am grateful to the Secretary of State for his statement, although I regret the closure of the Shrubbery TA centre in Kidderminster. Can my right hon. Friend assure me that the neighbouring King Charles I secondary school combined cadet force unit is safe? Can he also confirm that the 30 or so reservists who are currently based at the Shrubbery TA centre will be given financial support for travelling a greater distance?
Mr Hammond
On that last point, as I have said already, a home-to-duty allowance is payable for travel between home and the place of duty. Over and above that, the Army will be looking on an individual basis to ensure that, within reason, anyone whose unit is closing, relocating or re-roling, and who wishes to transfer to a different unit, will be supported. We expect that to be done at local unit level, engaging with individuals to try to retain them in the reserve service if we possibly can.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Instead of withdrawing entirely from a rural centre such as Berwick-upon-Tweed, which will lose its TA centre, Royal Logistics Corps and Fusiliers component, should not Ministers be looking at flexible ways of organising training and recruitment in rural areas, so as not to close off that source of recruitment?
Mr Hammond
I have looked at the situation in my right hon. Friend’s constituency. The driver is that the Pioneers, both regulars and reserves, are being withdrawn from the Army’s order of battle, so the Pioneer unit based at Berwick will no longer have a role to play. However, we hope that many of those serving in that unit will re-role and move to Alnwick, where the Army reserve centre will continue.
Mr Andrew Turner (Isle of Wight) (Con)
Drill Hall and Jersey Camp, the TA facilities on the Isle of Wight, are shared by our very strong cadet forces, who number more than 200. Given the unique transport challenges facing the island, the loss of those facilities would be a terrible blow to those young people. Will my right hon. Friend meet me and a group of constituents to discuss the matter?
Mr Hammond
I sense that the Minister for the Armed Forces is anxious to meet my hon. Friend. I can say this: if the facility has 200 cadets, the vacation by the reserves will not make any difference to the cadets’ continued use of it. It will remain in use by the cadets, as will be the case for a significant number of the bases being vacated.
Mr Speaker
The hon. Member for Pendle (Andrew Stephenson) has beetled forward by two Benches from his normal position; I am grateful that I am nevertheless able to see and recognise him.
Andrew Stephenson (Pendle) (Con)
Thank you, Mr Speaker.
There is a lot to welcome in today’s statement, particularly the incentives for small and medium-sized enterprises. Last Friday, I organised a jobs and apprenticeship fair at Colne municipal hall. More than 1,200 people attended and I am pleased to say that there was a great deal of interest in both the regular and reserve forces. What more does the Secretary of State believe right hon. and hon. Members across the House can do to help deliver the plans and ensure that we recruit more reserve forces in our local areas?
Mr Hammond
I am grateful to my hon. Friend for the work that he is obviously already doing in supporting the reserves agenda, which is about raising awareness of reserves, particularly in communities where reserve units are significantly under-recruited—essentially getting behind a “use it or lose it” challenge to those communities. We have now created a space and will be putting in place a substantial recruiting drive. Those units need to show that they can make a sustained militarily significant contribution to the Army reserves.
Amber Rudd (Hastings and Rye) (Con)
SME support is essential for the success of the growth of our reserve forces, so I really welcome the financial and procedural package that has been put in place for them. What support or advice has the Secretary of State received from business organisations such as the Federation of Small Businesses to ensure that we get exactly the right package to encourage our employers to support this issue?
Mr Hammond
The FSB has been involved with us in the consultation process, along with many others. I am glad to be able to say that it, along with the other four major employer organisations, has signed the corporate covenant that my right hon. Friend the Minister for the Armed Forces launched last Friday, which includes a pledge to support reserve service. In this White Paper we explicitly recognise that reserve service impacts on different types of employer differently, and the offer that we make has to be tailored to recognise that. That will make a significant difference to our relationships with small and medium-sized employers.
Mr Robin Walker (Worcester) (Con)
The 214 Battery Royal Artillery in Worcester has a magnificent new TA centre right at the heart of our city. Its officers and gunners have seen a great deal of service in Afghanistan. The whole city is very proud of having this military presence right at its heart. Can my right hon. Friend confirm that in making his difficult decisions on basing, he has paid attention to the quality of facilities available at TA centres and to the historic role of our county towns in supporting recruitment to the armed forces?
Mr Hammond
My hon. Friend tempts me, but I have to say in all honesty that the driver has been the structural requirements of the Army Reserve. There is no point in keeping a TA centre because it is a shiny new building if it does not fit into the structural laydown that the Army needs to deliver military effect in the 21st century, so that has been the overriding consideration.
Alun Cairns (Vale of Glamorgan) (Con)
HMS Cambria in my constituency has a long, proud history in supporting the unit from the communities of Barry and Sully in Cardiff South and Penarth. The statement talks about a unit in Cardiff that is to be new or renewed, but it is not yet clear whether it is the same unit or another one in place of it. Will the Secretary of State clarify that?
Mr Philip Hollobone (Kettering) (Con)
Employer support will be crucial. There is a Queen’s award for business, a Queen’s award for technology and a Queen’s award for exports. Might there not be a Queen’s award for supporting the armed forces reserves?
Mr Hammond
We explored that in the consultation. We have decided to proceed via the corporate covenant, which already provides for recognition for employers who support the services broadly, including the reserve service, and provides them with a logo that they can put on their letterhead.
Julian Smith (Skipton and Ripon) (Con)
I, too, welcome the measures that the Secretary of State has announced for business. However, for our smallest businesses across the UK—our one, two or three-man bands—losing a key worker will pose a particular challenge. May I urge him, as he develops the White Paper, to give special credence to their views and those of employers who are not represented by the business organisations we discussed earlier?
Mr Hammond
The FSB has of course been involved in this process. My hon. Friend’s point is absolutely valid. It will not be right or practical for all SMEs to employ a reservist, and we must recognise that fact. It will be easier for larger businesses. Many SMEs, perhaps including some very small ones, will be keen to employ a reservist, perhaps for a particular reason. We have to be flexible and tailor our package to respond to the needs of individual employers and employer types.
Mark Pawsey (Rugby) (Con)
May I express my disappointment at seeing on the list of surplus sites the Territorial Army centre at Edward street, Rugby?
I thank the Secretary of State for listening to the representations on reservists by businesses, particularly small businesses, many of which stand to lose a key member of staff for a substantial period. I particularly thank him for his provisions regarding greater predictability of call-up.
Mr Hammond
I am grateful to my hon. Friend. I am sorry about the disappointment regarding Rugby. As he will know, the reserve unit there will be consolidated at Coventry—another example of consolidation to create critical mass.
My hon. Friend is absolutely right that predictability of liability for call-up is one of the key issues for smaller employers. If, at the beginning of the year, we can give them proper notice of training periods, and as lengthy notice as possible of a period of high liability for call-up, they can plan accordingly.
Henry Smith (Crawley) (Con)
Last Saturday, Crawley borough council rightly signed its military covenant. That was, in part, a sign of the great respect in my constituency for the Royal Electrical and Mechanical Engineers Territorial Army centre. Will my right hon. Friend say a little more about how he sees the REME reserves developing?
Mr Hammond
The Royal Electrical and Mechanical Engineers are one of the resources on which we will be relying more in future for reserve capabilities than we have in the past. My hon. Friend gives me the opportunity to use this as another specific example. We will be looking to ensure a basing laydown for REME units that reflects the nature of the work force in different areas. We clearly need to recruit to REME reserve units in areas where there are significant numbers of electrical and mechanical engineers in the work force. That is the right way to build the integrated whole force of the future.
Guto Bebb (Aberconwy) (Con)
There will be genuine disappointment in the town of Llandudno in my constituency at the news that the Territorial Army centre in Argyll road will see its services relocated to Colwyn Bay, but I think that that disappointment will be tempered by appreciation of the fact that it will remain a strong presence within the county of Conwy. However, it should be noted that the centre in Argyll road is also home to two vibrant cadet units which use the facilities on a regular basis. It would be appreciated in the town of Llandudno and in the wider constituency if we could have some certainty that those facilities will still be available for those two cadet forces.
Mr Hammond
Our commitment to the cadets is clear and enduring, and we will not throw them out on the street. We may at some point re-provision those facilities. That will depend on the individual site and whether the location is suitable to continue in the long term as a stand-alone cadet facility. We will find alternative facilities for them in the vicinity if, over the longer term, the decision is taken to close the building.
Points of Order
(11 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Thomas Docherty (Dunfermline and West Fife) (Lab)
On a point of order, Mr Speaker. Further to the exchange with the Secretary of State for Defence regarding the site at Kilmarnock, as I understand it, he confirmed that this is a 10th new or reopened reserves site. That is a direct contradiction of the figures given in the belated statement and in the exchanges with, for example, my right hon. Friend the Member for East Renfrewshire (Mr Murphy) and the hon. Member for Moray (Angus Robertson). Can the Secretary of State give any indication as to whether that information was accurate? When he writes to you, Mr Speaker, will he also be encouraged to explain what on earth has gone on with the sudden appearance of this 10th site?
Mr Speaker
If the Secretary of State wishes to respond, he is welcome to do so.
The Secretary of State for Defence (Mr Philip Hammond)
Thank you, Mr Speaker. I cannot answer the hon. Gentleman’s question from the Dispatch Box, but I will of course write to him as soon as I get back to the MOD. I am not sure that it does represent what he is suggesting it represents. Some of the sites in question are complex. I am happy to write to him and copy the letter to you, Mr Speaker, as soon as I get back to the MOD.
Mr Speaker
I happily accept that offer from the Secretary of State. As he will know, I am principally concerned with matters of order and good form. Although in a human sense, no doubt, particular sites are of interest, they are not within my sphere of competence, and he knows that. What I am interested to hear about is the handling of the matter. He has given me a commitment on that, and I am grateful for it.
Mr Jim Murphy (East Renfrewshire) (Lab)
On a point of order, Mr Speaker. My hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) has just raised a point of order about Kilmarnock being on the list of reopened or opening sites. The only place in Scotland that is determined as a location appears to be in Edinburgh, which is nowhere near Kilmarnock. It seems that every Member of the House, including Ministers, was reading this list for the first time.
I seek your guidance, Mr Speaker, because I was handed a copy of the Secretary of State’s oral statement as I arrived towards the end of Prime Minister’s questions, which is why I did not thank him for advance sight of it. The written statement was provided late. In fact, I have an e-mail from the House of Commons Library confirming that it arrived at 12.55 pm. That is well after the Secretary of State spoke and well after I spoke. When the House of Commons Library receives it only at 12.55 pm, something deeply untoward has happened. At 1 pm, a few minutes later, the supporting paperwork arrived.
Then, in the midst of all that, at about the same time, the hon. Member for Suffolk Coastal (Dr Coffey), the Parliamentary Private Secretary to the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon), took it upon herself to scurry round the Chamber with a poor photocopy of documentation that we should have been provided with earlier. It does not have Kilmarnock on the list, so it was not only a rushed photocopy circulated informally but perhaps also incomplete.
My point of order, therefore, is to ask whether you would look kindly, Mr Speaker, on a request by the Minister for the Armed Forces to make a supplementary statement tomorrow in light of the fact that the weighty impact assessment arrived only in the past couple of minutes. No Member apart from myself and, I suspect, the Secretary of State is in possession of the impact assessment of the measures announced today. Would you look kindly, Mr Speaker, on a request by the Minister for the Armed Forces to make an additional statement tomorrow, so that this sordid mess can be clarified once and for all and so that we can have proper scrutiny?
Mr Speaker
What I would say to the right hon. Gentleman is that it is a matter for Ministers to decide whether they wish to make oral statements to the House. As he will be aware, the convention whereby a Minister delivering an oral statement begins it by saying, “With permission, Mr Speaker, I should like to make a statement”, is just a convention and, frankly, a courtesy that is, I think, on the whole appreciated by the House, but Ministers can make statements to the House when they wish. The right hon. Gentleman may wish to wait to see whether there is an offer of a statement, but there are various parliamentary devices open to Members to deliver the scrutiny that they think a particular measure warrants and everything ought to be looked at on a case-by-case basis. Perhaps I can leave it there for now.
Bill Presented
Defence Reform Bill
Presentation and First Reading (Standing Order No. 57)
Mr Secretary Hammond, supported by the Prime Minister, the Deputy Prime Minister, Danny Alexander, Secretary Vince Cable, Secretary Chris Grayling, Francis Maude, the Attorney-General and Mr Philip Dunne, presented a Bill to make provision in connection with any arrangements that may be made by the Secretary of State with respect to the provision to the Secretary of State of defence procurement services; to make provision relating to defence procurement contracts awarded, or amended, otherwise than as the result of a competitive process; to make provision in relation to the reserve forces of the Crown; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 84) with explanatory notes (Bill 84-EN).
Drink Driving (Repeat Offenders)
Rehman Chishti (Gillingham and Rainham) (Con)
I beg to move,
That leave be given to bring in a Bill to allow the Magistrates Court discretion to refer a third or subsequent offence for drink driving to the Crown Court for sentencing and to grant the Crown Court the jurisdiction to give a custodial sentence of up to two years.
When a driver gets behind the wheel they have a responsibility for their own and other road users’ safety, but public safety is put at risk by those who choose to drink and drive. Studies have consistently shown that someone’s ability to drive is impaired by having alcohol present in their blood and that the risk increases as more alcohol is consumed. This risk to public safety has been recognised in law for almost 90 years since the first drink-driving offence was introduced in 1925.
The current statutory provisions governing drink-driving make it an offence to drive or attempt to drive while unfit through drink or with excess levels of alcohol in the bloodstream. Currently the maximum sentence an offender can receive is six months in prison, which is the same for a first, second, third, fifth, sixth or even seventh offence. I believe that that needs to change so that those who continue to reoffend will face tougher sentences and those who persist in driving after drinking over the legal limits will be deterred from doing so.
There has been a huge shift in the public’s attitude towards drink-driving over the years and we should not lose sight of the significant achievements of successive Governments in tackling this issue. In 1979, 28 people were killed or seriously injured every day in drink-driving accidents. Thirty years later the number has fallen to four a day, despite the volume of traffic increasing by 80% since the 1980s. By combining education and enforcement through the THINK! campaign run over Christmas and during the summer, road safety has improved. However, more still needs and has to be done.
The figures show that in 2011 almost 10,000 casualties occurred when someone was driving while over the legal alcohol limit. Sadly, 1,570 people were killed or seriously injured in drink-driving accidents in 2011, which was up on the previous year. More people are in fact killed as a result of drink-driving than of knife crime, yet the maximum penalty for carrying a knife is four years in prison compared with the significantly lower six months for drink-driving.
Worryingly, many drivers continue to ignore the risks and get behind the wheel after drinking, with 8% of drivers admitting that they have driven in the past 12 months believing that they were over the legal limit. According to a recent AA/Populus survey, one in five motorists has admitted to risking drink-driving at Christmas. Nearly 20,000 extra breath tests were carried out by the police last December and more than 7,000 of those breathalysed were found to be drink-drivers. In Medway, which includes my own constituency, more than 30 arrests were made during the Christmas crackdown.
It is clear that the current law is not a powerful enough deterrent for many people, as 12% of offenders, some of whom will have been disqualified and uninsured, will go on to drink and drive again. The reoffending rate is even greater for high-risk offenders, including those who have previously been disqualified twice for drink-driving offences, with three out of 10 of them repeating the offence.
I say to the Under-Secretary of State for Transport, my hon. Friend the Member for Wimbledon (Stephen Hammond), who is in his place, that the same proposals that I am outlining today could also be applied to those who drive while disqualified, which is linked to drink-driving. In a recent case in Medway, a driver was caught an astonishing five times in 11 years but still escaped a prison sentence.
The latest review into drink-driving laws in 2010 by Sir Peter North noted that it is a minority of drivers who persist in drink-driving. The coalition Government’s response to the North review stated that many drink-drivers are well above the limit—a staggering 40% of those caught are two and a half times over the lawful limit.
To tackle this problem, it is the behaviour of that minority of hard-core drinkers that needs to be targeted. As the Secretary of State for Transport at the time of the North report, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond), told the House in a written ministerial statement:
“Their behaviour is entrenched and displays a flagrant disregard for the law and the safety of other road users.”—[Official Report, 21 March 2011; Vol. 525, c. 45WS.]
The Government’s response indicated that the biggest deterrent is the perceived risk of the severe consequences of detection. Under the plans that I am outlining today, there would be a serious deterrent not to drink and drive.
How would the proposal work in practice? On a first offence, the vast majority of drink-drivers receive a non-custodial sentence usually consisting of a fine and driving ban. On a second offence or in aggravating circumstances, we would expect the magistrates court to give a harsher sentence ranging from a community penalty to a custodial sentence. On a third offence, the magistrates court would have the discretion to refer the case to the Crown court, where the offender could receive up to two years’ imprisonment. This measure would provide the courts with the additional tools they need to tackle those who persist in flouting the law.
The principle of increased sentences for repeat offenders proposed in this Bill has already been applied to other crimes. The Powers of Criminal Courts (Sentencing) Act 2000 provides a minimum sentence of three years for a third burglary offence. The system has also been adopted in other countries. In New Zealand, a motorist caught over the limit for a third or subsequent offence faces two years’ imprisonment. In the Australian state of New South Wales, people can receive a two-year sentence for subsequent offences. In America, many states have imposed more than one-year prison sanctions on those who reoffend three times or more.
It is clear that in order to reduce further drink-driving casualties we need to take a tougher stance. This proposal will send a clear message to those who continue to drink and drive that they will face up to two years in prison if they persist in exceeding the legal limits and continue to put innocent lives at risk. This Bill will mean that we continue to have not only some of the toughest drink-driving laws, but some of the safest roads. I commend the Bill to the House.
Question put and agreed to.
Ordered,
That Rehman Chishti, Keith Vaz, Kate Hoey, Steve Baker, Lorely Burt, Gordon Henderson, Valery Vaz, Gareth Johnson, Angie Bray, Mr David Ruffley, Henry Smith and John Stevenson present the Bill.
Rehman Chishti accordingly presented the Bill.
Bill read the First time; to be read a Second time on 22 November 2013, and to be printed (Bill 85).
Estimates Day
Estimates 2013-14
Department of Health
Health and Care Services
(11 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Stephen Dorrell (Charnwood) (Con)
It is one of the more endearing characteristics of the House of Commons that although the motion before us and those that follow it involve £517 billion of public expenditure, it falls to a Back Bencher to make the case on behalf of the absent Financial Secretary. It is obviously a minor detail that the House of Commons should be asked to approve £517 billion of public expenditure. Also, I suspect that all parties in the House are on a one-line Whip on this minor matter.
Having made that observation on the slight absurdity of parliamentary process, I will begin by saying a word about the approach to public expenditure and health policy that the Health Committee, which I have the honour to chair, has adopted since the beginning of this Parliament. We have our differences within the Committee; it would be absurd to pretend otherwise. We were elected from different party platforms and have different views about how health care can best be delivered in our society. However, from the beginning of this Parliament, we have taken the view that there is not much point in using the Select Committee as the platform for elaborating those differences, because there are many other platforms where they may be amplified. We have sought consciously to explore areas of common ground in the delivery of health and social care, and to establish where there can be cross-party agreement.
The easy way to achieve that objective would be to avoid all the difficult political questions. We have consciously not done that—we have dealt with the difficult questions. We have talked about commissioning in the context of the Health and Social Care Act 2012. We had a hearing this morning on the developments in the Care Quality Commission. We have not sought to avoid difficult territory, but when we are in it, we look for areas of common ground. That means that we are not grandstanding on health policy, but seeking to develop a coherent or, given what I will go on to say, integrated view of how health care ought to develop on a cross-party basis.
Against that background, it is significant that we have had a consistent and serious view since the beginning of this Parliament on the questions that are raised for those who work in the health and care sector by the pressures on public expenditure that exist in this Parliament and, I believe, will exist for the foreseeable future. It is not a coincidence that the first substantive report that we issued in this Parliament was on public expenditure. In that report, the Committee coined the phrase “the Nicholson challenge”, which has passed into common parlance, to refer to the challenge faced by the health and care system to deliver quality care against the background of rising demand and, roughly speaking, flat real-terms budgets.
That challenge was articulated first not by the Select Committee or the coalition Government but by Sir David Nicholson, a distinguished public servant, in his capacity as chief executive of the national health service in May 2009. It was endorsed by the previous Government. The Committee has sought to explore the success of the coalition Government in meeting that challenge and to bring to the surface some of the choices and challenges that are implicit in the phrase “the Nicholson challenge”. Incidentally, we know that the challenge lives beyond Sir David Nicholson.
Let us be clear what we are talking about. Since May 2009, the core issue has been that resources are growing extremely slowly, if at all, while demand continues to rise. One does not need a degree in mathematics to know that if demand for health and care services rises, as it has in this and every other country for the last 50 years, by roughly 4% per annum and there is no new money coming into the system, the only way in which demand can be met is by increasing the efficiency with which the resources are used by an equivalent percentage each year. In other words, the Nicholson challenge is how to deliver health and care to the required standard—I will come back to that point—4% more efficiently year on year.
I emphasise that it is not my view, nor the Committee’s view, that there are no political choices to be made about the level of resources that are committed to health and care. It falls to the Government of the day to make those choices every year when resources are voted on, as we are doing this afternoon on the estimate of £105 billion. That represents a political choice. However, members of the Committee read the newspapers, understand the laws of arithmetic and understand the broader political environment in which we live. We hear it when the Leader of the Opposition says that an incoming Labour Government would have to live with the spending plans of the current Government, at least for their first year in office. That is, to put it mildly, an exercise in expectation management by the Leader of the Opposition.
It is against that background that the Committee recommends in paragraph 16 of the report on health and social care:
“In our view it would be unwise for the NHS to rely on any significant net increase in annual funding in 2015-16 and beyond. Given trends in cost and demand pressures, the only way to sustain or improve present service levels in the NHS will be to continue the disciplines of the Nicholson Challenge after 2015, focusing on a transformation of care through genuine and sustained service integration.”
That is an example of a recommendation that was reached on a cross-party basis. We are not signing up to decisions about funding, but saying that the health and care system faces a huge challenge to deliver more integrated services if it is to meet the quality and economic standards that are likely in any political scenario.
Andrew George (St Ives) (LD)
I thank my right hon. Friend for the way in which he is introducing this subject. He will acknowledge that the Nicholson challenge and the need for year-on-year efficiency gains of 4% were originally proposed under the last Labour Government. There is therefore continuity from the previous Government, through the coalition and on to any subsequent Government. Does he agree that the result of the efficiency gains must not be that NHS rank and file staff are subjected to lower regional pay and conditions, as was proposed in one region of the country?
Mr Dorrell
I will come on to the impact on pay later. My hon. Friend is right that the challenge antedates the election of this Government and that it increasingly looks beyond this Parliament, as did last week’s public expenditure announcements. There are specific challenges implicit in the Nicholson challenge for the coalition and for the Opposition. To my colleagues in the Conservative party, who sometimes ask why we have a ring fence around the national health service, I simply say, “Understand what you are asking.” We are already strapping ourselves to the mast indefinitely into the future of meeting a rise in demand of 4% per annum without substantial growth in real resources. Looking back, we see that the national health service has delivered a 1% efficiency gain trend rate over its first 60 years, and the national average for the rest of the economy is 2%. We are expecting the health and care system to deliver a 4% efficiency gain. To anyone believing that we are likely to be able to meet demand for health and care to acceptable standards against a background of reduced resources—in other words, more than a 4% efficiency gain year on year—I say, “Do the maths.” That is the challenge to the Conservative party.
Mr Dorrell
Will my hon. Friend forgive me if I complete the challenge so as to be even-handed, as the Chair of a cross-party Committee should be?
Some Labour Members may wish to look for ways to avoid the difficult questions posed by the Nicholson challenge, but we need to remember that if we were to try to meet demand without addressing any of the efficiency questions—to take it to the other extreme—we would need £5 billion a year of new money over and above keeping up with inflation. That is more than 1p on income tax year on year, or 6p on income tax in the lifetime of a Parliament, to meet demand in the health service, unless we address the Nicholson challenge.
The conclusion that the Committee puts to the House is that the Nicholson challenge is unavoidable. Anybody who takes any serious interest in health and care has to address it. Nobody seriously believes that any Government will put up income tax by 6p in the pound in the life of one Parliament simply to fund health and care, and nobody in my party seriously thinks that we can avoid meeting demand for health and care. If we cannot avoid meeting that demand, we have to deliver a 4% efficiency gain out of the service merely to allow it to live within the current real resource available to it. That is the Nicholson challenge, and it is why the Committee—from a cross-party standpoint—has said, from the beginning of this Parliament, that it is the most important challenge facing the health and care system.
Richard Fuller
I wish to challenge my right hon. Friend on the 4% efficiency requirement that is, essentially, the 4% increase in demand that we expect. I am a big believer that history is a good guide to the future, and I understand the changes in demography that will push that challenge. How much of the demand comes from a quantum increase in demand and how much from a price increase for the inputs into the health budget?
Mr Dorrell
I do not wish to detain the House for the whole of the time available for this debate, but my hon. Friend raises an important question about how that demand is made up. The interesting thing about the drivers of demand—rising expectations, the cost and availability of modern medicine and the implications of an increasingly elderly population—which each new Front-Bench spokesman reveals as a newly discovered truth, is that they were first discovered by Rab Butler when he became Chancellor of the Exchequer in 1951. He set up a commission to ask whether the health service was an insupportable burden. The conclusion reached then, and by every successive Government since, in this and in similar processes in other countries, is that demand can be met, but it requires a serious analysis of the nature of the demand and how resources are used effectively to deliver it.
There is a danger in discussing health and care as if they were purely an economic question, especially for those of us who have been employed in the Treasury—like you, Madam Deputy Speaker, and me. There is a danger of sounding like a Treasury Minister and implying that the economic questions are the only issues in this regard. I need only offer names to the House to demonstrate that economics is not the only issue here—Winterbourne View, Mid Staffordshire and Morecambe Bay. Our system faces huge challenges, not just to do with economics but in respect of the quality of service that is delivered on a daily basis. Put simply, it is not enough just to go on delivering the service as it is now because, too often, it fails. Implicit in the Nicholson challenge is the requirement to face profound quality challenges, as they exist in the system, at the same time as squaring the financial circle I have been describing. In some quarters, it is suggested that that is a counsel of despair—that the circle is unsquareable.
The Committee disagrees, which is why the report states, at paragraph 30:
“At a time when steadily rising demand for health and care services needs to be met within very modest real terms funding increases for the NHS and even tighter resource constraints on social care, the Committee remains convinced that the breadth and quality of services will only be maintained and improved through the full integration of commissioning activity across health and social care.”
In other words, it is the Committee’s cross-party view that it is the integration—the reimagining of what health and care need to look like—that is the answer to the questions posed both by the Nicholson challenge and the quality challenges implicit in the names that I mentioned. It is important to be clear why that is the Committee’s view.
Efficiency, as implicit in the context of the Nicholson challenge, is not just about buying a bit more cleverly or holding down costs. It is about understanding what the demand is that we are trying to meet and putting in place the structures—incidentally, I do not mean the management structures—for the delivery of care that are likely to be able to meet the demands placed on them, not over the last 50 years but over the next 20. It is reimagining and driving a process of change through the health and care system that is the only realistic challenge to the financial and quality challenges that I have articulated.
Dr Phillip Lee (Bracknell) (Con)
Talking of efficiency, is my right hon. Friend as shocked as I am to hear that the Department of Health spent almost £74,000 on outside consultancy to prepare for just one Public Accounts Committee hearing? If that is the case, the Department might want to lead from the front on efficiency.
Mr Dorrell
I am sure that my hon. Friend will forgive me if, faced with an estimate of £103 billion, I do not go through every £70,000 of expenditure. However, he has made his point.
This is where I believe the Committee has held the Government to account, although not always comfortably for the Government of the day. There is no solution to the Nicholson challenge purely through adjusting the numbers—to use a non-emotive phrase. It has been reported to the Committee that in the first two years of the Nicholson challenge, 73% of the efficiencies that have so far been delivered are attributable as follows: 16% to pay freezes, which is the point made by my hon. Friend the Member for St Ives (Andrew George)—yes, holding down wages does reduce the cost of delivery and is, in the short term, a form of economic efficiency, but it is not a long-term solution to the Nicholson challenge—and, most implausibly, 45% to just changing the tariff between the commissioner and the provider. That is not an efficiency; that is an internal transfer, a bookkeeping entry, accounting, make believe. Another 12% over the two years is put down as “other”, which is an old accounting technique for concealing not very much, usually.
John Pugh (Southport) (LD)
Was the right hon. Gentleman able to establish exactly how much was saved through smarter and better procurement?
Mr Dorrell
That is not listed, and so is probably among “other” and is not very much towards £5 billion. The 4% efficiency gain translates to £5 billion of recorded savings. The two biggest items are £2.5 billion through tariff efficiency and £850 million through pay freezes. We have not yet made much progress towards the process of reimagining care which, from a Committee standpoint, we regard as so important.
I do not propose to detain the House by going through the detail of what reimagined care needs to look like, but the headlines are clear and becoming increasingly familiar. It is complete nonsense for us to imagine that community health and care can be provided efficiently to a high quality if we retain the distinction between primary health care, community health care and social care. Primary care is divorced from community health care purely as a result of a political fix by Nye Bevan and the British Medical Association in 1947. I was not born in 1947—indeed, not many Members were born in 1947. How much longer do we have to live with the structural absurdity that was not even a plan in 1947? It does not look like much of a plan now. Reimagining high-quality efficient care to enable people to live longer, healthier and fuller lives and avoid going to hospital unnecessarily is the core challenge that the Committee believes needs to be put at the door of policy makers in the Department of Health and in NHS England.
I will conclude by picking out two key recommendations from the Committee’s report, and I am pleased to be able to say that one has been picked up by the Opposition. I am pleased to endorse their policy of developing the role of the health and wellbeing boards—created by my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), the former Secretary of State for Health—as the agencies best placed to develop genuine reimagination at local level of what fully integrated, joined-up health and social care should look like. It is often described as the Burnham plan. I am happy to endorse it, because the Select Committee wrote it first and we did it building on the institution created by the coalition through the Health and Social Care Act 2012. I strongly endorse the development of the health and wellbeing boards, and so, I believe, do my colleagues on the Committee.
Joining up budgets and creating single commissioning budgets through the health and wellbeing boards is only part of the answer if that single budget then allows resources to leech away through the local authority system without checks on the limits of the definition of the services that are being secured. That is why our report recommends not just joined-up budgets and the development of the health and wellbeing boards, but an extension of the ring fence, which so many of my colleagues on the Conservative Benches do not like, so that it covers not just NHS spend but social care spend too. We did that because it makes no sense to make the case for a single health and care system, and then imagine that transfer of resource out of the NHS budget into the social care budget as free to be spent anywhere else in the local authority world.
The commitment to a ring fence makes sense only in the context of a single integrated service if it covers the whole of the integrated service. That is why I strongly welcome the announcement made by my right hon. Friend the Secretary of State for Health that increased resources from the NHS budget would be made available to social care, but only—as he made clear to the Committee yesterday—subject to that resource transfer first satisfying NHS England and Ministers, who are ultimately accountable to this House, that it will be used for social care and not for other local authority services.
I have sought to identify what I regard as the key issue facing the health and care system—the Nicholson challenge—and to recognise that it is not just about economics, but about quality. The only way we can respond to those two challenges is by rethinking a set of institutions that grew up for a different world and a different time. I welcome the fact that the Committee’s recommendations and analysis, which have been developed over three years, have been endorsed both by Labour Front Benchers, who have picked up our proposal on health and wellbeing boards, and by the coalition in the announcement my right hon. Friend the Secretary of State made last week about resource transfer, subject to an effective ministerial guarantee of a ring fence. If the Select Committee has done nothing else, it has identified common ground on which those on the Front Benches seem to be gathering.
Barbara Keeley (Worsley and Eccles South) (Lab)
I thank the Chair of the Select Committee, the right hon. Member for Charnwood (Mr Dorrell), for the way he opened the debate.
The context of our debate on public expenditure for health and care is, as we have heard, not just the substantial upward cost pressure on the NHS, but substantial cuts to the budgets of local councils, which are affecting their social care budgets. Adult social care directors tell us that £2.7 billion has been cut from care budgets since 2011, representing a significant 20% of those budgets. That level of cuts now means actual service reductions, as well as increased charges for service users—a fact brought home to me week in, week out by the cases I am now seeing in my constituency. My local authority of Salford had maintained eligibility criteria of “moderate” until this year and has been pushed by cuts into changing it to “substantial”. That is very sad.
Often what are described as efficiency savings in social care budget cuts are actually cuts to the fees paid to care providers. Some 45% of the adult social care directors polled by the Association of Directors of Adult Social Services said that they did not increase fees to care homes to cover inflation this year, while nearly half said that providers in their areas were now facing financial difficulties as a result of savings made in fees paid to councils. In many cases, this has led to the poor care that we have had described in so many reports, and to which the right hon. Member for Charnwood has just referred. We hear of care tasks timed down to the minute, and paid care workers earning less than the minimum wage because they are not paid for travel time or costs.
The social care directors also warned that worse cuts are still to come, given that further cuts to local council budgets are still planned. Sandie Keene, the president of ADASS, warned Ministers that further cuts could have seriously adverse consequences for families. She said:
“it is absolutely clear that all the ingenuity and skill that we have brought to cushioning vulnerable people as far as possible from the effects of the economic circumstances cannot be stretched any further, and that some of the people we have responsibilities for may be affected by serious reductions in service—with more in the pipeline over the next two years.”
Not surprisingly, the Local Government Association has warned the Government that they need to ensure protection for adult social care in future. Zoe Patrick, chair of the LGA’s community wellbeing board—so perhaps the most senior wellbeing board in the country—has said:
“We need an urgent injection of money to meet rising demand in the short term and radical reform of the way adult social care is paid for and delivered in future, or things will get much worse.”
Both the LGA and the Society of Local Authority Chief Executives have warned that the planned cuts will get in the way of implementing the Dilnot proposals and the measures in the Care Bill. They also say that the Government’s impact assessment for the Bill significantly underestimated the likely cost to councils of the new duties under the Bill—an issue that came up repeatedly on the Joint Committee considering the draft Bill. I hope that as the Care Bill makes it way through Parliament—and certainly by the time it reaches the Commons—issues to do with the cost on local authorities will be dealt with.
Some £1 billion of funds from NHS budgets was earmarked for transfer to councils responsible for adult social services in the 2010 comprehensive spending review. However, three years into a four-year process, much of the funding continues to be spent in a short-term way—there was much focus in our report on that fact—and not on the systemic transformation that social care needs if it is to ensure sustainable services in future. Let me give an example. Of the £648 million transferred in 2011-12, 18% was used just to maintain eligibility criteria, with £284 million spent on offsetting pressures and cuts to services and another £149 million allocated to working budgets. As we have heard, that is not the sort of systemic transformation that the Health Committee would like to start seeing.
Of course, this firefighting is not surprising given the cuts to local council budgets, which I have touched on, but it is not sustainable if our aim overall is the transformation necessary to achieve the integration of health and care services. We have seen a downward spiral in social care funding. It is clear that more must be done to move from using scarce resources when they are allocated as a sticking plaster to cover the costs. They should instead be used to build more joined-up services. With another £2 billion a year moving from the health budget to social care from 2015, it is extremely important that we start to get this right. I fully support the call made in the Committee’s report for a ring fence to protect social care funding. That is important.
As for health spending, the Department of Health says that it managed to save £5.8 billion in 2011-12, but evidence provided to our Committee by the National Audit Office shows that much of that was made through one-off savings, such as pay restraint and other staff cost savings, reducing payments to NHS providers and some savings that were truly one-off, such as land sales, which cannot be repeated. Those savings are not sustainable and cannot continue in the long term. There is an argument, which we keep coming back to, that a lead needs to be taken as soon as possible to transform how services are delivered.
I welcome the suggestion of a pooled budget for health and social care services to help older and disabled people. I see that as a move in the right direction. Indeed, the shadow Health Secretary, my right hon. Friend the Member for Leigh (Andy Burnham), has repeatedly made the point that integration is the future direction of health and social care. Mike Farrar, the chief executive of the NHS Confederation—I guess this was the expression of an NHS view—said of pooled budgets:
“This allocation should help address the need to join up services and provide the right care for people, allowing them to stay in their own homes. But NHS organisations will want to have strong assurances that the money going to social care does the job it is meant to do.
Rather than see local health and social care budgets as separate, we need to support integrated care by bringing together providers and commissioners to look at how we can spend our money to the best effect.”
That must be what we start to see.
Creating joint budgets has the potential to facilitate a move towards more joined-up working, but as the right hon. Member for Charnwood outlined, there need to be safeguards. In fact, we need to be clear that the money intended for social care should definitely be spent on it. Labour’s whole-person care approach is a vision for a truly integrated service—not just battling disease and infirmity, but aspiring to give people a complete state of well-being across all the services, physical, mental and social. Shared budgets are one small step towards that, but we want to see a people-centred service, strengthening and extending the NHS in this century, not whittling it away.
Let me turn to the long-term funding of social care to avoid catastrophic costs falling on certain groups of people, particularly those with long-term conditions or dementia. Support will be given in such a way that people must meet thresholds and a spending cap. First, people must meet eligibility criteria, which, we know now, the Government plan to set at the “substantial” level. Secondly, they must fall below a means-tested threshold. I understand that the upper level is to be set at £100,000, but the lower level is still set at £14,250, with an assumption that assets between those thresholds attract interest, which affects the calculation of social care funding.
After all that there is the cap, set at the—in my view—high level of £72,000, plus accommodation costs of £12,000 a year. I feel that the £72,000 that individuals must contribute to their care before they exceed the cap is not as it seems. That is how the figure is expressed, but the metering will take account only of the costs that the council would pay for care. Many thousands of families are already paying a top-up for care. Cuts to council budgets, which I touched on earlier, will continue to depress the rate at which they pay towards providers, yet that is the rate that would be taken into account in the calculation of the metering.
My hon. Friend the Member for Leicester West (Liz Kendall) has analysed the plans and said that
“families will face losing even more of their homes than they do now”.
Since she pointed that out, we have learned that in 2016, with accommodation costs of £12,000 a year and councils at that point paying about £500 a week, it would take about five years to reach the care cap. Even at that point, we now know that care needs would have to be at the “substantial” level. Families using nursing homes charging more than the local authority rate will therefore have to pay the extra cost, as they do now.
I have had constituents paying £40,000, plus interest, for care costs, which were taken out of the value of their home, which was eventually sold for only £60,000. There are people in my local authority area who have homes valued at only the £50,000, £60,000 or £70,000 mark who surely will look at the cap set by the Government and think that it would help them. It is unfair not to tell people that what they think is a cap set at £72,000 will, for many of them, turn out to be much higher.
The Health Committee has committed to look at the implications of the Government setting the cap at a level higher than that recommended by the Dilnot commission. I hope that the review shows that this is not a policy to brag about straightforwardly, as the Prime Minister did today. I understand that the number of people likely to be helped by a cap set at that level is around 110,000. I am sure that many people would be surprised by that low figure. However, I am pleased that the direction of travel for Government policy is towards what the Health Committee has repeatedly set out in its reports on social care and the whole-person approach set out by my right hon. Friend the Member for Leigh. Pooled or joint budgets are a small step on the way. I hope that Government policy will start to move further towards addressing some of the other vital issues in social care that I have outlined. Unless we solve those issues in social care, we cannot move forward on the whole picture.
David Tredinnick (Bosworth) (Con)
I wish to run through some of the points in our report for the benefit of the House and to suggest that there is one area of supply to the health service that is not being considered enough. At the moment we have two legs on the stool, rather than three.
Before I do that, I would like to congratulate my right hon. Friend the Member for Charnwood (Mr Dorrell)—I used to know him as the Member for Loughborough, which might cause some confusion—on his speech. He is ever modest to say that the Committee came up with the term “Nicholson challenge”. I firmly remember that it was he who came up with it. It is absolutely to his credit that, as a former Treasury Minister, he has focused absolutely on the costs; and here we are today, addressing estimates and how we deal with the ever-increasing demand for health services.
Although they have come up already, there are a couple of points that we must bear in mind. They include the devastating impact of the potential 6p on income tax if we do not get this right and the difficulties—although some of my hon. Friends might dispute this—of achieving a 4% efficiency gain.
We have seen the impossibility of solving the problem through public sector pay restraint alone, and tinkering with tariffs is another issue. How do we cope with that? Tinkering with the tariffs will not solve the problem; we have to go for a full integration of services. That issue was well illustrated by the ghastliness of the Mid Staffs experience, the Winterbourne experience and the Morecambe Bay experience—those unbelievable failures in the health service. Apart from the financial requirements, that points us in the direction of the importance of delivering improved services through integration.
We really must focus on structures and the delivery of care. The primary response of the NHS to the Nicholson challenge should be, as the Committee said, to prioritise fundamental service redesign. That will lead to better quality care for more NHS patients. Paragraph 82 of the Committee’s report states that it is
“inconceivable that this performance can be delivered—together with quality improvement that is…required—if planning proceeds within traditional silos.”
We have to break down the old system and start afresh.
Of course, the Health and Social Care Act 2012 is the foundation of this new approach. It is a Bill that had a somewhat tortuous passage through the House, with some reconfiguration, but it has delivered enormous opportunities. Yesterday, when the Health Secretary came to the Health Select Committee, I was struck when he explained to us the savings that the 2012 Act has already achieved. Although the reconfiguration is hugely costly in itself, running to over £1 billion, the fact is that the savings are already in place. My right hon. Friend the Member for Charnwood highlighted the importance of bearing down on costs, and this is already being realised through the reconstruction that the Health and Social Care Act 2012 has provided.
The Conservative party is ever the party of choice, and we made it quite clear—in deference to my Liberal colleagues I should say that the coalition made it clear—that we want patient choice. That is essential. Through the Health and Social Care Act 2012, the health and wellbeing boards and personal budgets—they are somewhat overlooked but have proved to be incredibly successful—we have the structure to provide for patient choice.
What we have not really addressed or seen yet is what the patients will choose to ask for. There is a supply-side issue here in the range of services, treatments and therapies that are—or are not—currently available through the health service. If we are further to reduce costs, and broaden choice, we are going to have to put what I would describe as the third leg on the stool. We have the integration of health and social care, but what is also important is the integration of the range of therapies available in this country that are not necessarily statutorily regulated and available within the health service as we speak.
You may recall, Madam Deputy Speaker, that many years ago I had the honour of serving on the Committees considering the osteopathy and chiropractic Bills, which subsequently became Acts. That legislation which brought statutory regulation to osteopathy and chiropractic, brought them more fully into the mainstream health service. The Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter)is, I am reliably informed, tasked with dealing with the next great challenge, which is herbal medicine. He may not be overwhelmingly delighted to know that there is a one and a half hour Adjournment debate next Tuesday in Westminster Hall, where we will discuss this issue in some detail.
When we talk about 13-year spans in this place, it usually refers to 13 years of Conservative government. It has also been 13 years, however, since the House of Lords Science and Technology Committee report on complementary medicine, which recommended the statutory regulation of herbal practitioners. We must address this issue, as we will next Tuesday in some detail, but let me set out the stall by pointing out that three quarters of the population are using herbal medicine, homeopathy or other types of alternative medicine.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The hon. Gentleman mentions 13 years, but it is only three years since the House of Commons Science and Technology Committee delivered a damning report, saying that there was no evidence base for homeopathy at all. Does the hon. Gentleman think that we should address that before we try to use precious NHS resources in this way?
David Tredinnick
There are two separate issues here: herbal medicine and homeopathic medicine. The Science and Technology report was very controversial. I now have the honour to serve on the Science and Technology Committee, and we have been looking at these issues. Let me tell the hon. Gentleman that in France, 70% of the population and all pregnant women use homeopathy. Some doctors are trained in both types of medicine, and they tend to prescribe fewer allopathic drugs for their patients, which works out much cheaper. There is a lot of research to be done on that. Homeopathy is, of course, widely used across the world, including in the United States and in India. I think this country has a lot of catching up to do. That is why, as I said to the Secretary of State yesterday, I have stuck with this issue over the years.
I would also say to the hon. Member for Birmingham, Selly Oak (Steve McCabe) that there is a huge injustice here. Just as we had racial prejudice in the past, we seem to have a similar kind of prejudice here based on the worst possible “turf war” considerations. I think I had better leave it there, Madam Deputy Speaker, as I might be indulging your patience.
The former Secretary of State for Health said in 2011 that he thought statutory regulation was the way forward. I have to say to my hon. Friend the Under-Secretary that he should consider going down the route of the Health and Care Professions Council; I think there is some talk about the Professional Standards Authority. As the Minister reflects on the challenge he faces, he should remember that many people in this country are affected by this, and that we are looking to him to come up with a workable solution.
I leave him with one thought on this subject. By chance, I spoke in a recent meeting to Lord Wilson of Tillyorn, the last but one Governor of Hong Kong. He brought statutory regulation of herbal medicines into Hong Kong. He said that he did so not just because it was better to have a properly regulated discipline that would help to avoid the misuse of prescribing, but also because of the turf war between the medical establishment and the herbal community. I think that there is a real danger—I shall expand on it next week—of the Minister being pressurised by people who are doing so only because of vested interests, which I think is very sad.
I applaud the direction in which my right hon. Friend the Member for Charnwood has taken our Select Committee in focusing on the need to bear down on costs in the health service and to shine a bright light on this phenomenally difficult challenge of increasing demand and how we pay for it. I have suggested that while it is brilliant to have the integration of health and social care, if we are to satisfy the demands of people—through the different boards under the Health and Social Care Act 2012 and through personal budgets—we are going to have to look more seriously at the other therapies that are available but are not regulated or brought into the health service. The Minister really must try to grasp the importance of herbal medicine because practitioners cannot get the supplies they need to be able to practise as they should. I wish him well in his endeavours.
Grahame M. Morris (Easington) (Lab)
It is always a pleasure to follow the right hon. Member for Charnwood (Mr Dorrell) who chairs the Health Committee with such authority and distinction. He gave a thoughtful and helpful explanation of the Committee’s report, and made some suggestions about integrating commissioning and budgets. My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) and the hon. Member for Bosworth (David Tredinnick) also highlighted several issues, and I am proud to serve with them on the Health Committee.
We need to look at the background of what is happening because in many respects, the Government have created a situation in which the NHS is in crisis. I often refer to how we measure satisfaction with the national health service, and one established measure was the public satisfaction survey. We have seen a record fall in public satisfaction with the NHS under this Government.
The hon. Member for Bosworth referred to evidence that the Secretary of State gave yesterday to the Health Committee, in which he cited the cost savings that reorganisation had brought about. However, we must also think about some of the hidden costs of that reorganisation such as clinicians’ time. How many clinicians carrying out a management function in clinical commissioning groups in other providers find that their time is not accounted for properly? What about the opportunity cost in skills and training applied for the benefit of patients if those clinicians are engaged in a management capacity? What about the loss of experience for managers at every level? Some people may have spent a number of years working in the health service and taken an interest in structures, but we seem to be going round in circles. We broke up what we described as large monolithic structures, formed separate mental health trusts and separated community services. It seems that the wheel has now turned full circle and we are realising the benefits of efficiencies of scale and integration.
With the new structure, however, we have lost some management expertise in commissioning, organising and troubleshooting—again, that point was highlighted effectively by the Health Committee. The Secretary of State and his team respond that there has been a cost saving, but in fact the vacuum had to be filled by new structures. Strategic health authorities—an unloved institution—were swept away, but local area teams were created. It is necessary to have a strategic dimension to plan health care, particularly restructurings and reorganisations.
In my view and, I suspect, for many Members across the House, this top-down reorganisation—it was not initiated by people on the ground—has impacted on front-line services and resulted in considerable expense and disruption at a time when the NHS is facing unprecedented pressures due to budgetary constraints and growing demands on the service. We have seen that manifested at the coal face, the fulcrum, in the crisis in accident and emergency departments. Unless we seriously address those issues, there is a risk to the long-term financial stability of the NHS.
Yesterday in Committee I put on the record a rather controversial point about the Government’s claim to be maintaining funding in real terms, despite NHS inflation, which is higher than inflation in the normal economy. As right hon. and hon. Members have said, there are also a number of financial manoeuvrings—I do not know whether that is an accounting term. One concern relates to how the underspend is reallocated or returned to the Treasury, and I suspect that despite assurances from Ministers, we have seen an actual reduction in funding.
Let me draw the House’s attention once more to the letter sent to the Secretary of State by Andrew Dilnot CBE, chair of the UK Statistics Authority, following representations by my right hon. Friend the Member for Leigh (Andy Burnham). Mr Dilnot wrote that
“we would conclude that expenditure on the NHS in real terms was lower in 2011-12 than it was in 2009-10.”
Grahame M. Morris
The right hon. Gentleman has risen to the bait and I will happily give way.
Mr Dorrell
The hon. Gentleman might like to read the next sentence from the same letter.
Grahame M. Morris
I am grateful for that. We have argued for a number of months about the real position, and we have had a number of debates in the House about whether there has been a real-terms increase or a small decrease. I heard the arguments about NHS inflation and so on as recently as yesterday.
Grahame M. Morris
I will not read that out because I will come on to the issue in a moment. First I want to talk about integration, so I will press on. Statistics published in Public Spending Statistics in July 2012 show that real expenditure on the NHS fell by 0.02% in 2011-12 and 0.69% in the fiscal year before that. I understand that those are small percentages, but we are dealing with a budget of £105 billion, including the capital element, and I think the public would be concerned because those sums are not insignificant. Those percentages equate to £740 million over two years, and we should think about what that money could buy. In my area, one of the first schemes to be cancelled when the coalition came to power was a new hospital. It was not funded through a private finance initiative but through Department of Health capital resources. That hospital would have cost £464 million, but we are still waiting for it. The figures I mentioned would have built two such hospitals.
Mr David Ward (Bradford East) (LD)
When talking about budgets, the focus is all on integrating health with social care, so we cannot really consider the overall picture unless we also look at local authority budgets.
Grahame M. Morris
That is an excellent point, and my hon. Friend the Member for Worsley and Eccles South mentioned evidence presented to the Health Committee that showed that £2.7 billion of expenditure or allocations has been removed from local government budgets and social care. That has had a huge impact on the service and resulted in changes to eligibility and thresholds, and charges for transport and other things.
Mr Jim Cunningham (Coventry South) (Lab)
I apologise to my hon. Friend for arriving a minute after the start of his speech. The hon. Member for Bradford East (Mr Ward) raised an interesting point about social care, particularly in relation to local authorities. Given the one-third cut, plus the 10% cut, in those budgets, I see a major problem for local authorities in buying care for elderly people. Indeed, it has been a major problem over the past two or three years.
Grahame M. Morris
That is an excellent point. I am sure that Members across the Chamber will have experience of that. On Friday gone, we had a crisis meeting of the county MPs and senior politicians in my local authority area of County Durham to determine how to cope with a further tranche of cuts. The situation is becoming serious. It is said that the allocations have been ring-fenced, but the local authorities’ discretionary spend is all being absorbed into social care and expenditure for children and the elderly, and there is very little room for manoeuvre.
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Member for North Durham (Mr Jones) has only just come into the Chamber. Interventions are normally about facilitating those who have heard the debate, and it is not appropriate just to walk in and intervene. The hon. Gentleman is experienced enough to know that that is the case.
Grahame M. Morris
Am I allowed to give way to my hon. Friend, Madam Deputy Speaker?
Madam Deputy Speaker
This is a timed debate. The courtesies of the House, which have been circulated to Members of Parliament a number of times, are not about walking in, spending a few minutes in here, then intervening. Of course the hon. Member for Easington (Grahame M. Morris) can give way if he chooses to do so, but he might want to bear in mind that other Members who have been in the Chamber for some time are still waiting to speak. That was the point I was making.
Grahame M. Morris
With all due respect, Madam Deputy Speaker, I know that my hon. Friend was at the same meeting as me on Friday, and he will probably have a relevant point to make about that, so if you do not mind, I will give way to him.
Mr Jones
With respect to the Deputy Speaker, the point I wanted to make was that at the meeting last Friday we were told that Durham county council has to take £210 million out of its budget. Does my hon. Friend think that areas such as ours, which has a growing elderly population, will face more pressure than some others?
Grahame M. Morris
Absolutely. The pressures are becoming intolerable. Some of our great northern cities, such as Liverpool and Middlesbrough, seem to be shouldering a disproportionate share of the cuts, and it is a difficult task to try to balance the budgets and deliver the services that people require. There has been a discussion about whether the councils are in a position even to deliver their statutory requirements.
As the right hon. Member for Charnwood said, the NHS has been set productivity targets of 4% per year, as the Government seek to make savings of £20 billion over the lifetime of this Parliament. As the report identifies, the Government believe that those savings can be made in part by prioritising competition over co-operation. I find that questionable, and we need a cost-benefit analysis of the consequences in regard to the value for money of outsourcing. There has been a lot of criticism of PFI schemes, and questions have been asked about whether they provide value for money for the public purse. To date, efficiencies have largely been achieved by freezing staff salaries and cutting the tariffs paid to NHS providers. Neither of those is sustainable, and both fail to meet the spirit, if not the letter, of the Nicholson challenge.
There are signs of falling morale in the NHS, and that is due in no small part to the Government’s attacks on pay, pensions and conditions of service. It is not helpful that Ministers seek to blame NHS staff for problems caused by the Government’s cuts and reforms. These are not the innovative changes that we need to see from a restructured NHS. In the main, we are seeing the picking of low-hanging fruit. Some of the cuts are rash and damaging, and they are being made to satisfy the Government’s need for cuts across the board.
I understand that the current Secretary of State for Health has joined his predecessor in receiving a vote of no confidence from the health care professionals at the British Medical Association conference. I only hope that the next Secretary of State for Health will seek to work with health care professionals, not against them.
The NHS Confederation’s survey of NHS chief executives indicated that 74% of respondents believed that the NHS’s financial situation was either the worst they had ever seen or “very serious”. Despite the Government’s claim to have ring-fenced funding, which has been called into question, NHS executives are not confident that the situation they face is good for their organisations or their patients, with 85% expecting things to get worse in the next fiscal year.
There is no doubt—the figures are there in the report—that the NHS is facing the biggest financial challenge for a generation, as a result of unprecedented demographic changes, an increasing demand for health and care services, co-morbidities, and people living longer with chronic illnesses such as diabetes and dementia. The Nuffield Trust has warned that, unless we improve the way in which services are delivered, growing care needs will result in a shortfall of up to £29 billion a year in NHS funding by 2020.
The NHS faces new challenges in the 21st century. The last Labour Government corrected the chronic under-investment following 18 years of the previous Conservative Government. Investment in the NHS trebled under Labour. We built more than 100 new hospitals, replaced much of the ageing infrastructure, and developed the new walk-in centres, primary care centres and a new generation of modern community hospitals. There were extended GP opening hours, and more doctors and nurses than ever before.
Mr Jim Cunningham
Does my hon. Friend agree that, unless something realistic is done about the health service, we could find ourselves back in a pre-1997 situation, with a shortage of beds and with people sleeping on trolleys?
Grahame M. Morris
I am grateful to my hon. Friend for that intervention. There is certainly a crisis in emergency care. The causes of that are multi-faceted, and I certainly do not agree with the Secretary of State’s analysis that it is simply the result of the change in the GP contract in 2006. Some of his comments to that effect have caused great offence to the medical profession. We are in crisis in many respects, including in the area of recruitment. It has been pointed out in recent evidence to the Select Committee that the NHS is not recruiting enough people into emergency care, or enough GPs. We are storing up bigger problems for the future if we do not have the necessary cohorts of trainees going through medical school.
A new approach is needed if we are to meet today’s challenge of the rising demand for health care in an ageing society. We will certainly need more co-operation, not more competition. We will need to see the integration of health and social care services, not more fragmentation, and we will need more whole-person care. In many respects, the Government’s reforms will make that harder, with markets fragmenting services and an open-tendering free-for-all meaning more providers dealing with smaller elements of a person’s care, without the necessary overall co-ordination.
We know about joint budgets. We have seen the Government transfer resources from the NHS to social care. However, what we need is a single budget. I should like to see a national health and care service, a co-ordinated service that focuses on an individual’s physical, mental and social care needs from home to hospital. We need a new focus on prevention: people who are at risk of being admitted to hospital should be identified and supported in their homes. The Select Committee has been looking into the policies and interventions that have enabled that to be done in other countries. We need to end costly migrations from home to hospital, and from there to expensive care homes where, in many cases, the individual must bear a huge financial burden. That is good for neither the taxpayer nor the individual. The integration of services will allow significant savings to be made. Investment in early intervention will limit more costly hospital admissions, as well as helping people to lead healthier lives.
There is a real choice. While the coalition Government are pushing for a free market in health care, Labour is calling for the full integration of health and care services. While the coalition talks of choice, it is delivering fragmentation. In contrast, Labour supports co-operation between doctors, nurses, social workers and therapists, all working together with a single point of contact.
There are huge risks, and the first news stories about them are beginning to surface. If we do not deal with the present situation, the need for fees may arise, and we may end up with a two-tier system. Top-up payments for treatment may be required, especially as more private companies enter the market. We may even see the re-emergence of an insurance-based free-market private health care system. I believe that we should remain true to the founding principle of the NHS: that it should be a health service funded from general taxation and provided free at the point of use. Ministers may shake their heads, but they should remember their last promise, that there would be no more top-down reorganisations.
The NHS, whose 65th birthday we celebrate this weekend, is Labour’s greatest achievement. We created it, we protected it, and we saved it after years of Tory neglect and under-investment. We must continue to protect and transform our most cherished public service, so that we can meet the challenges that we face in the future.
John Pugh (Southport) (LD)
It is an honour to follow the hon. Member for Easington (Grahame M. Morris). We all appreciate his style, even if we do not share his conclusions and his fears. Let me also congratulate the right hon. Member for Charnwood (Mr Dorrell) on the Health Committee’s excellent report. Indeed, I congratulate all the Committee’s members, who must be among the most diligent and assiduous members of any Select Committee in the House, and many of whom are in the Chamber now.
On the occasion of our last debate on the estimates, I made the huge strategic mistake of trying to talk about the estimates, and was ruled out of order for doing so. That was a schoolboy error. I shall therefore draw a veil over the £50 billion of expenditure that we are notionally considering, and limit myself to a few brief observations.
The bottom line is that the NHS faces huge demographic and financial problems. Having wasted two years reorganising it, we have now secured universal agreement on what we must do. The way forward seems clear to me, and it seems good. We must integrate care, reduce the cost burdens on the acute sector, and remodel the acute sector to allow that to happen. We must encourage self-management and co-management of chronic disease. As was pointed out by the hon. Member for Easington, we must encourage local co-operation. We must share data: that is very important, but it has not been mentioned so far. We must pool resources—that has been mentioned—and develop networks for the treatment of strokes, cardiac conditions, cancer and so on. No one disagrees in the slightest with that analysis.
There is general support for personal health budgets, which were mentioned by the hon. Member for Bosworth (David Tredinnick), although it is not entirely clear whether they will complicate or solve the financial challenges that we face. There are other no-brainers on which we happily agree. We want to encourage medical research, and we want better public health.
The goal is clear, and there is little argument about it in the Select Committee or in the House. What is not clear, however, is exactly how all this is going to happen. We refer frequently to a string of laudable actions: empowering patients, conducting pilots, providing incentives for integration and co-operation, issuing mandates—that is rather a new thing—setting quality standards, establishing frameworks, and commissioning services. A word that we do not use much however—although it was heard in the speech of the hon. Member for Easington—is “management”. That has become almost a discredited word. We talk about disease management, but we are less happy to talk about system management, except when we talk about micro-management. The sin of non-delegation is clearly a bad thing, but references to management tend to occur only in that context. We boast about culling managers, but what we need now is good executive management. If we are to implement the aims to which we have all signed up, we shall need not more managers, but better management and better managers.
Ministers, and Governments in general—all Governments—have recently been rather good at thinking up policies, making announcements and changing structures, labels and names, but at times they appear to have forgotten that the main business of Government is to govern, and to engage in the day-to-day business of making things happen. They neglect the day job, or become unaware of the need to carry it out. That is the reason for the constant gap between announcement and delivery. That is why there is all the teasing at Prime Minister’s Question Time about programmes that are announced but not implemented.
I was delighted when the Secretary of State sent Department of Health officials into hospitals for work experience, so that they could observe real-time implementation. The Under-Secretary of State himself has real experience of hospitals, and knows what it is like to suffer under the policy mandates of a variety of Governments. However, there is a vacuum at the moment. There is a lack of local levers, which prevents us from achieving the integration at local level that we want. There is a gap in local leadership, especially when it comes to making integration happen. There are more organisations around, but there is less strategic control and command. As we heard from the hon. Member for Easington, the strategic health authorities have gone.
When taken to task about problems of that kind, many people—including, possibly, the members of the Health Committee—cite the health and wellbeing boards, saying that they are crucial to making it all happen and bringing it all together. I wish them luck and I hope that they can do that, but they are a variable mix at present. They are not kitted out or resourced to be proper health boards. They have no genuine executive power, no budget and no real authority.
We need people who can get the local networks right, get the parts of the NHS machine working together, and ensure that procurement is organised rationally, data are shared, resources are pooled and good practice is spread. We need people who can get a grip on the new agenda and see it through. However, on the current landscape, it is not obvious who those people are, or whether they have the capacity to do what is needed.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I recognise that there is almost no prospect of a return to the 4% annual rises in the health economy that we had got used to, and the right hon. Member for Charnwood (Mr Dorrell) explained the impact on income tax of such a move. The Institute for Fiscal Studies reported that to return to that would require a budget freeze on every other Government Department for the foreseeable future, even allowing for significant growth in our economy. We have to recognise that the NHS will have to make do, therefore.
The NHS is currently halfway through finding efficiency savings of more than £16 billion up to 2016. The savings are coming primarily from pay restraint, administrative cuts and reductions in centrally determined payments. In the long run, pay restraint may lead to a shortage of essential staff and, of course, poor pay and conditions is a factor in the poor-quality social and residential care we already see. As my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) pointed out, social services directors say that reductions in payments to care providers are leading to a fall in the quality of the care they are able to commission, and that often leads to a cycle of admissions to hospital.
Although it is politically convenient to scapegoat administrators, even the Minister must recognise that there is a limit to efficiency savings in administration. In these circumstances, the decision to waste so much on a top-down reorganisation now looks a little stupid.
Richard Fuller
The hon. Gentleman has raised the issue of low pay in certain sectors. He will know from the evidence of the Select Committee report that 16 of the 42 trusts stated that pay amounts to at least 50% of the total cost pressures. Does he think there is a case throughout the NHS for looking at managing down the pay of the more highly paid, so that those on the bottom can get higher increases?
Steve McCabe
There is some merit in looking at that, but when the people at the top end are scarce, we must be careful not to lose them to other countries. That is a challenge.
Today’s announcement about charging foreign nationals was strange in the sense that it seems to undercut existing private providers such as BUPA. I am not quite clear how that will save money. I fear it is the kind of posturing that may well end up costing us money, rather than saving money.
Like others, I welcome the Chancellor’s decision to allocate £3.8 billion to the joint NHS social care budget, but I would like to know an awful lot more about how it will be allocated and spent. In particular, I would like to know how the Minister hopes to measure its impact on medical services such as accident and emergency and hospital beds.
I would like us to have a statement on the proposed pathfinder integrated care pilots, because many of us are curious to know where that is going. It seems to me that there is not an awful lot of point in proclaiming the virtues of pooled budgets unless we know exactly what the Secretary of State thinks he is going to achieve. We have an idea from the Health Committee about where it thinks that might go, and the shadow Secretary of State has sketched a vision, but so far we have had an announcement from the Chancellor about making money available yet we do not have any idea what the Secretary of State hopes to achieve through that measure.
I would like to make one suggestion to the Minister: he should take a look at the home from hospital care service, which I understand operates in several parts of the country, and which was inspired by the work of Geraldine Amos almost 40 years ago now. In Birmingham, that service helps people move from hospital back into their own home and community and, of course, frees up hospital beds. It is quite a limited service in Birmingham at present, as it is currently financed by a grant from Birmingham city council, and I am not sure how much longer that will last, given the pressure on local authority budgets. That is, however, one example of how quite a small amount of money can be used to make quite a big impact in getting people back and settled at home, and trying to stop repeat admissions and bed-blocking. The recent NHS Confederation survey of chairs and chief executives revealed that 50% of respondents believed that the financial pressures have affected waiting times and access in the past 12 months and that 70% believe that waiting times and access will be affected by the continuing financial pressures in the next 12 months. So it is slightly strange that we have heard so little from the Government about how they plan to redesign services so that they are able to unlock more sustainable efficiencies for the future.
Given the answers I have received to some written parliamentary questions, my impression is that far from having a vision for the NHS, Ministers are seeking to evade responsibility for it. I have lost count of the number of written answers I have received advising me to contact this body or that body when I have asked the Minister for basic information and figures. We need a bit more clarity about the Government vision, and local communities and their representatives, including local and national politicians, should be properly engaged in that vision. That is one area where we could all be in it together; we could all be party to some kind of change programme, which would help us to redesign the services and to plan an NHS that will have to operate with fewer resources in future.
My recent experience of trying to obtain straight answers on the future of the NHS walk-in centre at Katie road in my constituency does not fill me with any optimism. Why on earth should clinical commissioning groups be allowed to keep private and secret a report on the future of walk-in centres, given that the report was not even commissioned by them? Why should the local Members of Parliament not be given access to that report? Why on earth set up a body such as HealthWatch if it does not get automatic access to it?
I would really like to know a bit more about that Government vision, and I would be particularly interested to know what they want to do to manage some of the growing pressures to which hon. Members have referred. I would like to know the Government’s policy with regard to the greater prevalence of long-term conditions such as diabetes and dementia. Like the hon. Member for Southport (John Pugh), I think it is hard to see the impact of health and wellbeing boards in that area, not because they are not bringing the right mix of people together, but because their chairmen are currently engaged in a line-by-line review of budgets designed to exclude everything that is not a statutory obligation. It is difficult to see how such bodies will be the ones with vision about long-term conditions when that is the level at which they are currently operating.
The Secretary of State should give a clear commitment to tackling the problem of conflicting incentives in the NHS. Acute trusts are paid for their activity through the tariff, while primary care and community care is paid through block contracts which actually serve as a disincentive to activity. I welcome the news that Monitor and NHS England are to examine this problem, but we need some response to it fairly quickly.
In conclusion, I recognise that we are discussing the estimates made possible by the economic circumstances of the country, but it remains the responsibility of the Secretary of State to provide vision and leadership for the NHS, even in such difficult times.
Priti Patel (Witham) (Con)
I welcome today’s debate and I, too, want to pay tribute to my right hon. Friend the Member for Charnwood (Mr Dorrell) for his comments. He clearly made some strong and valid points about expectations of the NHS and the required pre-requisite of expectation management. Yes, the debate is about funding and finance, but it is also about some of the significant challenges we face as a society and a country because of our changing demographics and our ageing population.
I pay tribute to the Government for prioritising investment in the NHS and in health and social care and for committing to increase spending on the NHS and health to more than £115 billion for the next comprehensive spending review period. I also welcome the measures they have introduced to focus resources on the front line and in particular to clamp down on NHS bureaucracy—my hon. Friend the Minister will know my views on that. I believe that the importance of making £20 billion of bureaucratic and efficiency savings should not be underestimated.
As we have heard, increasing demand on services requires more spending, but targeted specifically at the front line. In my constituency, a scandalous deficit in health care provision built up while Labour was in power as resources were soaked up by NHS bureaucracy. Across the former East of England strategic health authority, the number of senior managers doubled between 1997 and 2009 from 1,300 to 2,700.
Mr Kevan Jones
Does the hon. Lady think that there has been any sense whatever in the top-down reorganisation? I know that in many areas managers have taken large redundancy payments from primary care trusts only to be re-employed weeks later by GP commissioning groups.
Priti Patel
The answer to the hon. Gentleman’s question is yes. In the east of England, and certainly in Essex, there have been significant changes. The change to the structure has been specifically welcomed because resources are now going to the front line, which, for my constituents, is the most important thing.
The numbers of administrators and managers grew vastly in the PCTs that used to cover my constituency. I am afraid that we did not have one PCT—we had several. The number of managers and senior managers at the Mid Essex primary care trust and its predecessor trust increased tenfold from 10 to 102, while at the North Essex primary care trust the number went up from 25 to 84. By the time the Labour party was kicked out of office by the British public, the proportion of administrative staff had risen to one third, and between those two PCTs something like £25 million was spent on management costs alone—money that could have been much better spent on providing front-line services to my constituents and to constituents elsewhere in Essex and across the eastern region.
Although bureaucracy increased, health service provision in Witham town suffered as NHS managers completely neglected the area in favour of spending money elsewhere. As a result, Witham town’s GP surgeries are bursting at the seams. Almost 30,000 patients are registered across four practices with just 13.5 full-time equivalent GPs. That means that there are 2,200 patients registered per GP, nearly 50% more than the national average of 1,500 patients per GP.
My constituents report that they are struggling to register with a GP and are facing insufferable delays in getting appointments. One wrote to me, saying:
“Two doctors’ surgeries in Witham have refused to take me on, because the books are closed for new patients.”
Another said that they
“waited 12 days for an appointment with my GP. In the end, I was diagnosed with appendicitis.”
Unfortunately there will only be more such cases, exacerbated not just by our changing demographics but by housing growth, which creates greater pressures on existing practices. On Witham’s Maltings Lane estate, 1,700 new homes will be built, increasing the local population by more than 4,000. Other sites have been identified for development over the next decade, quite rightly bringing new homes and affordable homes to my constituents.
When Labour was in power, opportunities to bring in new medical facilities through section 106 agreements and other funding arrangements were completely spurned by the PCT managers, who neglected and ignored the situation and the strains of a growing population in the community. New GP practices could have been opened and new facilities to provide treatments and assessments could have been brought in to save my constituents from travelling to Chelmsford, Colchester or even Braintree, which involves considerable distances. That demonstrates how patients in my constituency were not being put first. It was bureaucracy that was being put first by the army of bureaucrats in charge of running the local NHS in my part of Essex at that time.
The Minister will understand the legacy of problems left to the town. I also pay tribute to him—like the Secretary of State, he has received a fair amount of correspondence and is well aware of the issues. One of the biggest challenges for the NHS today, with the increased investment that it has, quite rightly, received from the Government, is ensuring that the savings in bureaucracy that this Government are making are reinvested in providing new local health care services in Witham in particular. I hope that my hon. Friend will give a commitment to support our local efforts to increase health care provision in Witham, to ensure that my constituents of today and those of tomorrow, gained through new housing growth in particular, receive and benefit from a 21st century health care service.
With more money than ever being invested in the NHS, it is essential that those who are responsible for spending decisions and run our local NHS are also held to account. Accountability and transparency are key. We in the east of England have had from our ambulance trust the worst ambulance service in the country. It was run by a board of non-executive directors who failed to provide the trust with the leadership, skills and expertise required to address endless shortcomings and delays in ambulances attending to patients. Lives were put at risk, but despite the failures, a damning governance review and a “failing” report from the Care Quality Commission, the board bit the bullet and resigned only last Friday morning, following substantial pressure from MPs in the east of the region, including my hon. Friend the Minister, and a Westminster Hall debate last week. The situation was shameful and scandalous, because the board refused to go until the pressure became too much for them.
None of us can avoid the need for accountability and transparency. We have seen in Mid Staffordshire with the Francis review, in Cumbria, in the East of England with our ambulance trust, and now with the Tameside hospital trust—I think the chief executive resigned this afternoon—what can happen when NHS managers and directors get it wrong. They have to be accountable for their failures. Transparency is required. I recognise that the Government are taking this seriously and hope that at the end of the debate my hon. Friend the Minister will give details of steps that will be taken to remove failing directors and managers and, importantly, to replace them with people who have the skills and capabilities to put patients first and to deliver value for money. A huge amount of taxpayers’ money is used to pay for the NHS. It is only right and proper that all of us, including the public, should feel confident that the money is being well spent.
Dr Phillip Lee (Bracknell) (Con)
The nature of this debate is such that one can talk about anything to do with the NHS, be it local or national, in the context of the estimates of costs. The figures in the documents are immense—£1 billion here, £50 billion there; perhaps we need to plant some money trees in this country—and will only increase, as we all know. It has been interesting to listen to Members on both sides of the House this afternoon. Everybody accepts that demands are rising. Obesity is increasing—26% of adults are obese and the proportion is rising—and our population is ageing, so that by 2030 almost 25% of the population will be over 60. On top of that, there are advances in medical technology and the costs thereof to deal with—today’s cancer drugs can cost upwards of £5,000, £6,000 or £7,000 per month per patient.
Given those demands and costs, maintaining the current service will inevitably become nigh on impossible. I sense, even in the Chamber, and certainly outside it, that the public are beginning to realise that. I will say a few words about that before going local and discussing some of the things I have been suggesting in my region, and “region” is the key word here, rather than constituency.
The figures are really quite shocking. It has been suggested that by 2025 around 25% of the NHS budget will be spent on type 1 and type 2 diabetes alone. Only this morning a colleague told me that he had been diagnosed with type 2 diabetes. It affects all groups in society. Around 21% of the population smoke and around 28% of the adult male population drink too much—the figure is about 20% for women.
The number of prescriptions in 2009 was 886 million. The total cost of the NHS drugs budget in 2009 was between £13 billion and £14 billion, and it increases by £600 million each year. We are getting cleverer at inventing new drugs and classes of drugs, so I suspect that those costs will continue to increase, because it is human nature for someone to want the very best drug, the drug that will cure their cancer or extend their life.
Cases of dementia are set to double over the next 10 years, which will have a profound impact on health and social care. There will be a huge impact on the economy, as families will increasingly have to spend more time looking after the vulnerable, rather than going to work. The ramifications are immense.
I have detected some recognition in the Chamber today, particularly from my right hon. Friend the Member for Charnwood (Mr Dorrell), that there needs to be some cross-party agreement on this. I suspect that we will be arguing over the next 10 to 15 years about how we pay for health care. I have been brave enough to suggest that relying solely on general taxation to fund health care is not practical in the medium to long term. It is difficult politics—trust me, I saw my Twitter account explode at that point—but I think that we are likely to have a debate on that, and an argument, across the House, and that is as it should be.
However, where we should not disagree is about the way health care is structured in this country. I think that for both parties—it is a plague on both houses—the introduction of the market into hospital health care and the use of private finance initiative contracts, particularly over the past 10 years, has made it extremely difficult to reconfigure hospitals in certain parts of the country, which is unfortunate.
I have also heard that the introduction of competition law and its possible implications with regard to reconfiguration is also looming large in the national health service. Government Front Benchers might want to look at that, because I am persuaded—I have spoken about this on many occasions—that in future we will need fewer acute hospitals but more community hospitals. The majority of care will increasingly be offered closer to home, or indeed in the home, but the clever stuff, such as the life-saving stuff shown in the television series that the BBC is currently broadcasting on Thursdays, cannot and will not be offered in the number of district general hospitals that we currently have. Anybody who thinks that it can be does not understand. I suggest that it is increasingly becoming good politics to save lives, not to defend the indefensible, and I think that Members on both sides of the House should reflect on that.
One example from that television series was a nasty accident involving a head-on collision 30 minutes north of Addenbrooke’s hospital. The injured did not go to the local hospital, which had recently opened, because it could not care for them; they went 30 minutes down the road to be treated at Addenbrooke’s. In other words, a hospital that had been built in the past few years was already not fit for purpose. We should reflect on that.
Reconfiguration is essential, and it has been shown—not least in respect of London stroke services—to save lives and improve care. That should be replicated across the country.
Mr Kevan Jones
The hon. Gentleman is speaking a lot of sense. The stroke unit in the north of County Durham has just been specialised, and the results are already showing the benefits, although in parts of the region there was a lot of opposition to the move.
Does the hon. Gentleman think that long-term health should be managed not only by doctors but by pharmacists and others, who can play a key role?
Dr Lee
I am pleased that services are improving in County Durham; as the hon. Gentleman knows, I have family roots in his part of the world that go back centuries. I am not persuaded of the role of pharmacies, although I am persuaded of the role of pharmacists. I distinguish between the two because I personally think that all GP surgeries should be dispensing drugs. I do not see why the taxpayer should be subsidising pharmacies.
It is no surprise to me that Boots was the biggest ever private equity buy-out in the history of British industry, given that the taxpayer is outside the front door: “Come here for your amoxicillin, and while you’re here you can get your shampoo, conditioner and royal jelly.” I am not convinced about the role of pharmacies in the longer term; pharmacists most certainly have a role and should be included. Community pharmacists should be checking drugs, particularly when patients have polypharmacy—when they have a multitude of medications, another pair of eyes is always appropriate.
To return to the reconfiguration, in my locality we have a number of district general hospitals. Historically, Bracknell itself has been under-served by acute services since it was created in the late ’50s or early ’60s. We have seen services diminish in the area for a variety of reasons and under Governments of both parties, and we are sensitive about that.
Before I was elected as Member of Parliament for Bracknell—I stress that it was before I was elected—I suggested as part of my campaign that we needed to close hospitals in the area and consolidate to improve clinical outcomes. I am not aware that my result at the election was adversely impacted by that. Having worked in the area as a GP for a number of years and looked after 50,000 patients, I guess that people trusted what I was saying, and I recognise that.
I was trying to argue that we could consolidate acute services on a single site and improve community hospital services in appropriate locations around the region. I stress the word “appropriate”, as the problem is often that, for a variety of legacy reasons, hospitals are in inappropriate locations. They are not often on motorways, but on land bequeathed before the war. In my part of the world, the Astor family bequeathed the land for Heatherwood hospital. The local farmer outside Slough bequeathed some land because his daughter was looked after well. People thought, “Okay, we’ll build a hospital in the middle of a farm field nowhere near the population that it seeks to serve.”
There is a legacy problem. There is some need to close and relocate, while in some parts current locations can be enhanced. In my locality, there is the problem with Heatherwood hospital. I must put on the record something bizarre that frustrates me. It is “blue on blue”; if I was in a defence debate, it would be called friendly fire. The Royal Borough of Windsor and Maidenhead has called for a judicial review of the relocation of a minor injuries unit just three miles down the road, would you believe, to Bracknell—an urban centre in a better location and away from a place opposite the Royal Ascot racecourse. That judicial review will delay the move and cost money. I find that baffling and bizarre. It is evidence of the problem that I guess all colleagues of both political colours experience in local politics with regard to health care and trying to change services for the improvement of clinical outcomes, because it is not about cost, although obviously that is a factor, but about improving clinical outcomes. That frustrates me, and I will certainly be dealing with it robustly in local terms. At the moment, it is in the best interests of the general public to have fewer acute hospitals.
Andrew Percy (Brigg and Goole) (Con)
My hon. Friend is making an interesting point. Does he agree that in applying solutions such as those he is espousing, we must be careful that we do not apply an urban solution to rural areas? Moving an A and E three miles might be acceptable, but moving it 30 miles would not be acceptable to a lot of us.
Dr Lee
My hon. Friend is right: in a rural location the distances become further. I do not know the particular situation in his region, but I would suggest that there are probably location issues with regard to existing hospitals.
Moving neatly on, that is why—yes, you heard it here first: a Conservative calling for a Soviet-style central plan—I have called for a national plan for acute and emergency care. By definition, we cannot have a market interfering in that; we need to look at it in the round and say, “Where would we put these hospitals? Where are the motorways? What is the population density? Where is the rural location? Where is the urban location?” The problem is that if we reconfigure in isolation—I have seen this locally—it has a knock-on effect on other hospital services which then say, “Where are we getting our patients from?”
We should have a national plan that everyone from both parties has bought into. We should have—dare I say it?—a cross-party party committee looking into this. We should take it out of the political exchanges that we all engage in. We know what is going to happen in certain quarters in 2015—it will become a political football. I know that my hon. Friend the Minister is very aware of this. That is dreadful when we are talking about saving lives. Let us try to take this out of party politics. We can have robust exchanges, on principle, about payment, about how services are commissioned or not commissioned, and about whether there should be top-down reorganisation, but the fundamental question of where hospitals—acute and community hospitals—are located should be decided nationally; otherwise we could have perverse decisions whereby some services wither on the vine and we end up with gaps in emergency and acute care across the country. I make a plea for some cross-party activity on this.
Let us put the national health service’s budget into context. This country has debts and liabilities in excess of five times the size of our economy, and the situation is getting worse. Almost 40% of spending is on health and welfare, and it is growing. We know that that will happen; we have heard it this afternoon. Let us be realistic: there is only so much we can afford. I genuinely want a service that is based on clinical need. I genuinely want somebody to arrive at the appropriate location and get the very best care available. I fear that if we continue along this path of denial as regards how the service is paid for and, more important, structured, we will end up with more and more scandals. There are more in the pipeline. The chief executive of Tameside hospital has just resigned.
The public out there want more from us. They want us to make some difficult decisions, for sure, but using evidence, not party politics. I make that plea to everybody. If we can do that, we can structure a service that becomes the envy of the world; it is not that at the moment. However long I end up staying in this House, if that is achieved in the time I have been here, I will retire a happy man.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Before I call the Front Benchers, may I remind Members that if they are going to bring mobile phones into the Chamber they must be on silent and that they should not wait for them to ring? This is not the first time I have said that, but I certainly want it to be the last. Has the hon. Member for Strangford (Jim Shannon) taken that on board? Excellent.
Andrew Gwynne (Denton and Reddish) (Lab)
May I begin by thanking the Health Committee and its Chairman for the report and the clarity with which he presented its findings, and Members from all parties for the thoughtful way in which they have debated the issues today? The right hon. Member for Charnwood (Mr Dorrell) is known for his diligence and attention to detail, and his speech clearly illustrated those instincts.
Before I address the points raised by the report, let me put on record our gratitude to the many thousands who work in our health service. As we approach the 65th anniversary of the NHS, we should take a moment to pay tribute to those staff who are doing a tremendous job, often in difficult and challenging circumstances.
With the indulgence of the House, I would also like to place firmly on the record my support for and appreciation of the dedicated doctors, consultants, nurses, carers and support staff in Tameside general hospital, many of whom will be feeling battered and bruised today. Tameside general hospital serves most of my constituency and today’s media reports highlight some of its failings. Deep-seated issues need to be grappled with urgently, but we should also recognise and listen to the many decent, good and hard-working staff who work there, because they often have many of the solutions and have not been listened to in the past.
I also apologise for leaving the Chamber briefly during the speech of my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley). There was no discourtesy intended to either her or the House: I was dealing with the BBC’s breaking news that both the chief executive and the medical director of Tameside general hospital have resigned, which I support. Sadly, it has come three years too late—I called for it to happen three years ago—but, nevertheless, it is a step in the right direction to ensure that Tameside general hospital has a safe and secure future.
Barbara Keeley
We heard from the hon. Member for Southport (John Pugh) about the value of executive leadership. Our conurbation of Greater Manchester has one of the best and safest hospitals in the country. The Salford Royal hospital is the seventh safest in the country and has an excellent chief executive. Today the leadership of Tameside hospital has changed and I hope that the people of Tameside will end up with an excellently led hospital. I agree with the hon. Member for Southport. My example shows the difference between a hospital that is well led and one that is not.
Andrew Gwynne
I agree with my hon. Friend. Had she been listening to BBC Radio Manchester this morning, she would have heard me making precisely that point. The situation at Tameside is incredibly frustrating for me and my hon. Friends the Members for Stalybridge and Hyde (Jonathan Reynolds) and for Ashton-under-Lyne (David Heyes). Whenever we meet the chief executive and chair of Tameside hospital—we do so frequently—they always give us excuses as to why Tameside is different from the rest of Greater Manchester because of the industrial legacy and poor health outcomes in the borough, but one could make exactly the same arguments for Salford: there is no reason why one part of Greater Manchester should have an excellent hospital while another has one with long-term problems.
Following that slight indulgence, I want to turn to the report and focus on four key areas. First, the right hon. Member for Charnwood made some pertinent points about the Nicholson challenge. To be fair, in previous reports the Health Committee has taken the consistent view that the Nicholson challenge can be achieved only by making fundamental changes to the way in which care is delivered. It makes that argument in this report too. It states:
“Too often…the measures used to respond to the Nicholson Challenge represent short-term fixes rather than long-term service transformation.”
The Select Committee is right about that.
If we are to sustain the breadth and quality of health and care services, we need a fully integrated approach to commissioning—something that the right hon. Member for Charnwood and others have spoken about powerfully. The Opposition agree with that. I hope that the right hon. Gentleman will agree that we have put forward bold proposals for a genuinely integrated NHS and social care system that brings physical health, mental health and social care into a single service to meet all our care needs.
We know that that approach works. In Torbay, integrated health and care teams have virtually eliminated delayed discharges. Partnerships for older people have helped older people to stay living independently in their own homes and have delayed the need for hospital care—something that my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) rightly referred to. Where physical and mental health professionals have worked closely together, they have shown that a real difference can be made.
An integrated, whole-person approach is the best way to deliver better health and care in an era when money remains tight. As the Committee’s report notes,
“the care system should treat people not conditions.”
The right hon. Member for Charnwood was right to point out that developing the role of health and wellbeing boards is the best way to plan such integrated care. He reaffirmed that he is “happy to endorse” the Burnham plan. We were happy to hear that. He is right that there is an issue with single commissioning budgets without checks on local government. As somebody who has a background in local government, I think that he is right about the need to extend the ring fence to social care spending. Unless those budgets are protected, there will be a temptation to siphon off the money that is needed to provide the integration that we all want to see.
Mr Dorrell
I do not want to detain the House, but will the hon. Gentleman confirm that the Opposition support the proposals set out by the Chancellor last week that will provide exactly that principle?
Andrew Gwynne
I will come on to the Chancellor’s proposals. We do have concerns because there is an immediate care crisis that needs to be tackled now. There are also wider issues. My hon. Friend the Member for Worsley and Eccles South rightly raised the concern of local government that it will not have the funds to implement the new requirements in the Care Bill. We need reassurances about that.
My second point is about the cost of the Government’s reorganisation, about which my hon. Friends the Members for Easington (Grahame M. Morris) and for Birmingham, Selly Oak spoke eloquently. In the update from the Government last autumn, the overall cost was up by 33% or £400 million, making a total of £1.6 billion so far. What is that money being spent on? A full £1 billion has been spent on redundancy packages for managers, 1,300 of whom have received six-figure pay-offs and 173 of whom have received pay-offs of more than £200,000, all while the number of nursing posts has been cut by more than 4,000—six-figure pay-outs for managers; P45s for nurses.
The really unfortunate thing is that the reorganisation has diverted money and attention away from the front line. The Committee’s report notes that the reorganisation has
“had an impact on the NHS budget”.
I do not want to get into that debate. I will leave it to the UK Statistics Authority, which confirmed that spending on the NHS was lower in real terms in 2011-12 than in 2009-10, albeit marginally. We have seen reductions in NHS spending. Mental health spending has been cut in real terms for two years running, cancer spending has fallen in real terms and social care budgets have been slashed.
Let me now turn to the funding crisis in social care. The Library’s analysis, which is borne out by the Local Government Association’s statistics, shows that Government funding reductions have forced local authorities to reduce their adult social care budgets by £2.7 billion over the last three years. They have had to slash services and increase charges in order to balance their books, leaving thousands of vulnerable older and disabled people facing a daily struggle to get the care and support they desperately need.
That is why what the Chancellor announced last week in the spending review is at best a sticking plaster, or if I am feeling generous, a plaster cast. Sadly, it will not solve the financial pressures on councils, break the flow of funds into the acute sector or address the fundamental problem of two systems operating to conflicting rules.
To be fair, the Government have started talking Labour’s language of integration—the right hon. Member for Charnwood would say that it is the Select Committee’s language—but as the Committee notes, the only way to achieve what we want to see is by making fundamental system changes, which brings me to my final point, which is the Department of Health underspend.
I note that the Committee has raised concerns about the operation of the Department of Health policy on underspends and budget exchange. The small print of this year’s Budget revealed that the Department of Health is expected to underspend against its 2012-13 expenditure limit by £2.2 billion. That would be the biggest underspend of any Department in this financial year. Page 70 of the Budget document appears to show that none of this has been carried forward to be used in subsequent financial years as part of the Budget exchange programme. Perhaps the Minister could explain why—at a time when the NHS is facing its biggest financial challenge, when 4,000 nursing posts have been lost and when there is a crisis in A and E—they have decided to hand the full £2.2 billion back to the Treasury. Can the Minister also confirm that this means the underspend for 2012-13 would be 2% higher than the 1.5% figure that his Department says is consistent with “prudent financial management”?
We think that people will struggle to understand why this money has not been spent on the NHS. That is why we proposed that the Treasury exceptionally allows a £1.2 billion “end-year flexibility” carry-forward of around half of this year’s under-spend. We would ring-fence this money for social care budgets this year and next, to tackle the immediate crisis, with £600 million allocated for 2013-14 and a further £600 million allocated for 2014-15. With that extra investment, we could relieve the pressure on A and E and help to tackle the scandal of care services being withdrawn from older people who need them, enabling more people to stay healthy and independent in their own homes, and help families being squeezed by rising charges for care.
I thank the right hon. Member for Charnwood and members of the Committee—and other hon. Members on both sides of the House—for the sterling and thorough work that they have done and the powerful arguments they have made, especially on integration. They are right to highlight those issues, because it is the only way in which the NHS and care services will be able to make the necessary step changes to meet the challenges of an ageing society within the financial constraints we face. It is just as important that we get it right in terms of outcomes for patients, because the care services they receive will be greatly strengthened and improved through integration.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
It is a pleasure to close this debate and to respond to my right hon. Friend the Member for Charnwood (Mr Dorrell) and to his Committee’s report. I had the great privilege of serving under his chairmanship before I was appointed as a Minister, and he has been perhaps the greatest advocate of joined-up and integrated care, both as a distinguished member of previous Governments as Secretary of State for Health, and in all the work he has done as Chair of the Health Committee. His work has helped to lead to the great emphasis that the Government are placing on integrated and joined-up care, both through the Health and Social Care Act 2012 and in the statement by the Chancellor last week.
Friday marks the 65th anniversary of the NHS. I am proud to work in the NHS and to look after its patients. I think every Member in this House wants to see a health service of which we can all be proud. We are proud of our health service, but this 65th year of the NHS has also been marked by many challenges, which were outlined in the Mid Staffs report, the response to Morecambe Bay and in the comments on Tameside hospital made by the hon. Member for Denton and Reddish (Andrew Gwynne). We have to respond to those challenges, and the Government are taking strong steps to ensure that we deliver and stamp out the small pockets of poor care in the care system.
If we are to deliver a health service that is fit for the future, it has to be a joined-up health and care service. We can no longer afford to see the NHS and the social care sector as silos in their own right: we have to have a joined-up integrated approach. It is for that reason that we are proud to have increased the NHS budget by £12.7 billion. We are driving integration with that budget increase. We are encouraging local authorities and the NHS to collaborate in treating the needs of patients, and to address the problem highlighted by the Select Committee of people being passed, like pass the parcel, from one part of the system to another without any joined-up thinking or integrated care. I know that Members on both sides of the House want an end to that. In the spirit of consensus, we all want a health and care system that truly looks after the needs of individuals and is not run by the different financial and cultural silos of the whole.
We have heard strong contributions from hon. Members on both sides of the House in what has been a consensual debate. If we are to tackle the challenge outlined by Sir David Nicholson in 2009, when the previous Government were in power, to make 4% efficiency savings year on year just to stand still and to meet the increasing demand of an ageing population and the increasing health care expectations of patients, then we need consensus. To meet the challenge, we have to see a fundamental service transformation and redesign. We also have to see a far more productive NHS. Productivity gains and efficiency savings have to be made, while the challenges outlined by the Mid Staffs case and others are just as true today.
My hon. Friend the Member for Witham (Priti Patel) outlined clearly the importance of cutting back on bureaucracy and waste in the NHS where possible. Under the Health and Social Care Act 2012, £1.5 billion of bureaucratic savings will be put back into front-line care on an annual basis. She was right to highlight the importance of clinical leadership in delivering better services. There is good evidence that clinical leadership is not just about improving patient care. We can improve productivity through clinical leadership by improving the procurement of services and goods in the NHS. Procurement of services and goods makes up £20 billion of the NHS budget. There is good evidence that strong clinical engagement and leadership will help us to deliver greater productivity.
My hon. Friend the Member for Bosworth (David Tredinnick) talked about a number of other opportunities that the Health and Social Care Act offers to drive integrated care. I am pleased, as late converts, that the Opposition are now supporting the arguments we outlined during the passage of the Act about the importance of integrated health and social care. He also looked forward to the debate, which I will not enter into today—I hope he will forgive me—about the importance of complementary and alternative therapies. I look forward to furthering that debate with him next week.
Jim Shannon (Strangford) (DUP)
I thank the Minister for giving way—I asked to make an intervention beforehand, so he knows the subject matter. In the last year health tourism cost the NHS some £24 million, ranging from £100,000 in some trusts to £3.5 million in others. The Secretary of State made an important statement this morning about addressing that issue. Is the Minister in a position to set out the time scale for saving the NHS that £24 million a year?
Dr Poulter
The hon. Gentleman is absolutely right to highlight the fact that health tourism presents challenges. We need to look at them, which is why we have launched a consultation on exactly how to do so. We should recognise that we hugely value the fact—it is very beneficial to the British economy—that students come here from overseas to train and, sometimes, to work. Part of ensuring that they do so in a responsible manner and do not short-change British taxpayers and British patients means making provision for their health care needs, if necessary, and ensuring that the NHS does not pick up the tab. That is something we have opened a consultation on. It will report back later this year, and I am happy to discuss the matter further with the hon. Gentleman away from this debate.
In opening the debate, my right hon. Friend the Member for Charnwood was absolutely right to ask how we would deliver greater productivity in the NHS and to say that pay plays a part. Improving procurement, driving greater productivity and, crucially, service reconfiguration all play their parts too. It is worth highlighting the fact that the NHS needs to become more efficient at how it manages its estates, with £3.1 billion or so spent on NHS estates annually. There is much that can be done to improve the energy efficiency of those estates, which is why the Government launched a £50 million fund to support that work. A lot also needs to be done to reduce the £2.4 billion temporary staffing bill. That is something we will be talking about when we launch a paper later in the summer. There also needs to be greater focus on good leadership at board level—something we have touched on before—and engaging clinical leaders in helping to drive productivity and improvements in patient care.
It is also worth outlining the role of tariffs, which were touched on in the Committee’s report and in today’s debate, in driving more joined-up care. It is true that tariff change in itself is not good enough to drive improvements in patient care. Tariff change must drive service change and transformation at the same time, driving the more integrated care model that we all believe in. When my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) was Secretary of State, he initiated a review of the tariff system and looked specifically at best practice tariffs. We are now seeing the emergence of tariff change in a way that not only reduces costs, but drives service transformation. In the case of fragile hip fractures, day case procedures—such as cholecystectomies and similar procedures—and major trauma, we are seeing service change and transformation being driven by improved tariffs, which often cut across primary and secondary care.
If we are to deliver an NHS that is fit for the future, both financially and in human terms, that will be down to major service transformation and moving towards a system that provides integrated health and care. That is why last week my right hon. Friend the Chancellor outlined in his statement a £3.8 billion fund that will be shared between the NHS and local authorities to deliver integrated services more efficiently for older people and disabled people, ensuring that health and social care work together to improve outcomes for local people. Importantly, the Health Committee’s calls for health and wellbeing boards to play a vital role in overseeing the fund is something that we envisage becoming a reality.
In conclusion, we know that there are big challenges to the NHS in driving up productivity, and we know that we have already met some of them by cutting out, through our reforms, £1.5 billion of bureaucracy in the NHS—money much better spent on patient care. Crucially, in the years ahead, we will focus on the service transformation that is required to deliver a more integrated health service, continuing to develop those best practice tariffs that drive integration and bring together health and social care. It is not just about finances, because it is also about good care, which is why it is important to deliver the integrated system that patients deserve.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Did you want to come back, Mr Dorrell? We are up against time with the next debate.
Mr Dorrell
I am not pressing; I was led to believe that it is the convention to respond. I believe I have two minutes.
Mr Dorrell
I will seek to compress the one point that I wanted to make into one minute.
I stressed the importance of the role we have sought to play in the Select Committee in developing a cross-party view of the challenges facing the health and care system. That is not the same as saying that they are not political. A cross-party view has been demonstrated by people with different constituency interests and different ideas about how, in precise detail, that shared view about the future of health and care needs to be delivered. The challenge for both the Opposition and Government Front-Bench teams is to do what their predecessors—in my time as a Minister and stretching back before me—did not do, which is to turn the rhetoric about transformational change in health and care into a reality.
What we have sought to do in the Select Committee is to sketch out the ground and indeed some of the methods by which we believe that can be done. We welcome the fact that the Labour party has picked up our views on health and wellbeing boards, and we welcome the fact that the Chancellor of the Exchequer has picked up our views about a ring fence for social care spending. There is hope for the future that a Select Committee can sketch out common cross-party ground in an area of public policy that is necessarily as political—with a small “p”—as health and social care.
Question deferred (Standing Order No. 54(4)).
department for transport
Rail 2020
(11 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
I am pleased to have this opportunity to debate the Transport Committee’s “Rail 2020” report, which we published in January. The report sets out our vision for the railway to the end of the decade. Our main focus was considering the Government’s plan to achieve efficiency savings of £3.5 billion by 2019, and its implications for passengers and taxpayers. Currently, the railway costs the taxpayer around £4 billion each year. These issues are highly relevant to today’s consideration of the departmental estimates.
It is important to put today’s debate into context. In many ways, the railway has been a success. The number of passenger journeys has almost doubled since privatisation from 735 million in 1994-95 to 1.6 billion in 2011-12; passenger miles travelled have doubled over the same period to 35.4 billion; and rail freight has expanded by over 60%, with 11.5% of freight now conveyed by rail. There has been investment in major projects such as Crossrail and Thameslink in London, with more ongoing or planned work to electrify 800 miles of track and improve rail services in the north with the northern hub.
Caroline Lucas (Brighton, Pavilion) (Green)
Can the hon. Lady tell me whether she or her Committee have made any assessment of the “Rebuilding Rail” report, which says that we could reduce fares if we could reduce the fragmentation of the rail system by bringing the rail back into public ownership?
Mrs Ellman
Addressing fares is an important matter, which I shall refer to later, although we have not specifically considered the report that the hon. Lady mentions.
An important aspect of our inquiry examined Government policy on franchising, particularly in relation to securing value for money. During our inquiry, franchising policy was thrown into disarray when the competition for the inter-city west coast franchise was cancelled as a result of major errors made by the Department for Transport. We published a report on that issue earlier in the year.
A number of serious mistakes were made by officials, but there were also policy failings for which past Ministers were ultimately responsible. The review of franchising that Richard Brown undertook at the request of the Department concluded that it was not sensible to let a 15-year contract for the west coast franchise without a break clause. He also drew attention to the difficulties caused by cutting back on resources while attempting to meet an ambitious timetable. The Department has now published a new timetable. The postponement in tendering for new franchises means a delay of 26 years, with consequential uncertainty for the industry and potential financial implications. I will return to that issue later.
Rail poses a number of policy challenges. Increasing numbers of passengers have led to overcrowding on some routes, and capacity constraints can rarely be resolved quickly or cheaply. It is also important to remember that rail investment is vital for regeneration as well as for relieving overcrowding. The provision of rolling stock is complicated and expensive. Fares are often too high and difficult to understand, and a wide variety of fares are often available for the same journey, from heavily discounted “advance purchase” tickets to very expensive “anytime” walk-on fares. The structure of the industry is complex, and there is suspicion that it creates opportunities for money to leak out of the system, some of it in the form of unjustified profits.
The rail subsidy peaked at £7 billion in 2007-08, and the previous Government asked Sir Roy McNulty to consider how to secure value for money. His report was published in 2011. His most striking conclusion was that there is a 40% efficiency gap between the UK railway and four European comparators: France, the Netherlands, Sweden and Switzerland. Reasons given for that disparity include the fragmentation of the rail industry, poor management, problems with franchising, and cultural factors. He made a wide range of recommendations aimed at achieving a 30% cost reduction in the industry by 2019.
Although the rail subsidy has fallen in recent years, it is higher now than in the years before privatisation. In real terms, the passenger railway costs 50% more than in the early 1990s, and there are a number of reasons for that. Increased demand has led to new capital projects and rolling stock.
Kelvin Hopkins (Luton North) (Lab)
My hon. Friend may be interested to remember a report by Catalyst which found that productivity under British Rail was, at that time, the highest in Europe. Since then, things have changed dramatically.
Mrs Ellman
My hon. Friend makes a relevant comment.
As Network Rail’s debt has grown, more money is being spent on servicing that debt than ever before, and train operating costs have increased. Rail subsidy is necessary. Few rail lines would be profitable on a commercial basis, and even potentially profitable lines would lose passengers if the national network was cut back. There are good environmental and social reasons to subsidise the railway, and we were pleased to hear that the Government share that view.
Although the Government want to cut the subsidy, it is not clear what level of reduction they seek and under what time scale. Neither is it clear exactly where the subsidy goes at present. The Department should articulate more clearly why it subsidises rail and what taxpayers get for their money. We recommended that the Government consult on and publish a clear statement of what the rail subsidy is for and where it should be targeted. The Department’s reply was disappointing and focused on practical difficulties because of current funding arrangements. There is scope for much more work in that area.
This issue illustrates the lack of transparency in the rail industry. That has now started to change with recent work by the Office of Rail Regulation and the disclosure of wide variations in the financial performance of different routes and operators. Establishing why those variations occur will be crucial to ensuring that the rail subsidy is well spent.
Securing the efficiency savings indentified by McNulty will be challenging, particularly as they require different parts of the industry to work together in new ways. More than £1 billion is expected to be saved from train operating costs. I am concerned, however, that the savings have been put at risk by the Department’s problems with franchising. In many cases, existing franchisees will be awarded new contracts to run services for as long as four years. The Department will struggle to drive a hard bargain with existing operators without going to the market. I ask the Minister whether the Department’s decision to prioritise the re-tendering by 2015 of the east coast main line, currently operated by the Department’s company, Directly Operated Railways, will weaken the Department’s bargaining power as it seeks to extend franchises. It is clear that the Department does not want trains to be run by the public sector.
Graham Stringer (Blackley and Broughton) (Lab)
My hon. Friend is making a powerful point. Does she agree that the Government are trying to privatise the east coast main line for completely ideological reasons, and not for reasons of financial benefit? The east coast main line gives £563.4 million back to the Exchequer, which is almost twice as much as Virgin gave back over a two-year period. It also gets only one seventh of the subsidy per passenger mile, so there can be no other reason than ideology. The plan is undermining the Government’s negotiating position as they extend the other franchises by nearly 26 years.
Mrs Ellman
I thank my hon. Friend for his comment. The Minister was questioned in the Select Committee and it became apparent that the Government’s decision was to do with Government policy. I, for one, did not hear a compelling value-for-money reason for the decision.
There are a number of ways of assessing whether a franchise delivers value for money. The letter that the Minister sent to the Committee on 4 June stated that, over the three years 2009-10 to 2011-12, the inter-city east coast franchise produced a net return to the Department of £563 million. The letter also stated that, over the same period, the west coast main line made a net return of £290 million. The Minister certainly did not accept that that meant that the east coast franchise produced better value for money, but I am simply presenting the facts in the letter as a contribution to the debate. One consequence of the decision has been the postponing of the re-letting of the west coast franchise by 29 months, to April 2017. The previous timetable had been announced as recently as November. It is a matter of concern that such constant change is unsettling for the industry.
We have already seen two direct awards to current operators, and neither has demonstrated how the Government can secure a better deal for passengers or taxpayers. In the case of the west coast franchise, we were told that there might be new services to Blackpool and Shrewsbury, but they have not materialised. The old Essex Thameside franchise paid money into the Department. The new one, a directly awarded contract to run until September 2014, will cost the taxpayer money. Will the Minister acknowledge that there will be problems in achieving the McNulty savings in the light of the franchising fiasco and its aftermath?
The Committee recommended that the Department should strengthen its commercial capability in relation to assessing franchises, that it should consider franchises being let and managed by a Department agency or arm’s length body, and that it should consider spreading premium payments over the full length of the franchise. We suggested that franchise periods of seven to 10 years would be appropriate while the situation was being reviewed. Indeed, a review is now taking place, and we hope to hear the Government’s conclusions shortly.
During our inquiry, the rail unions argued that the privatised structure was the main cause of inefficiency in the industry, and that renationalisation would bring costs down. McNulty rejected that argument, saying that renationalisation would
“take years to complete, cause major diversion of effort, incur massive costs, and delay progress on improvements”
that were under way.
Kelvin Hopkins
It has been said many times that all that is needed to solve the problem is for the franchises to be awarded to Network Rail.
Mrs Ellman
Having considered all the evidence before it, the Committee decided that McNulty’s proposed methods of achieving efficiencies should be given a chance, although some concerns were expressed. We felt that if the McNulty savings did not materialise, the arguments for more far-reaching structural changes would be compelling.
We have identified a number of issues that the Government must get right if the railway is to continue to grow and become more efficient. The McNulty recommendations include calls for ticket office hours to be reduced, for driver-only operating to be the norm, and for salary restraint. The Committee considers that any changes in staffing, terms and conditions and salaries should be made in the context of a wider programme of changes made throughout the industry and after full consultation with trades unions. Any changes in the numbers and duties of station staff should not be pursued solely to reduce costs, but should reflect changes in passenger ticket-buying behaviour, and should be designed to improve passengers’ experience at stations, including their perception of safety. We were very concerned about the possibility that reducing staffing at stations and on trains would make the railway less safe, particularly at night, and would deter women and vulnerable users from travelling by train.
Caroline Lucas
Given that the train operating companies depend on public subsidies, does the hon. Lady agree that it is entirely wrong for those same companies to hand over an estimated 90% of their operating profits to shareholders, rather than reinvesting them in the staff and safety provisions to which she has referred?
Mrs Ellman
That is a very interesting point. The thrust of our inquiry concerned how efficiencies could be achieved without jeopardising passenger safety. As I have said, the Committee felt that the McNulty changes should have a chance to succeed, but that if they did not, other measures should be considered. We intend to return to the issue of safety in the inquiry on policing the railway that we recently announced.
We have no objection in principle to the development of joint working between Network Rail and train operators through, for example, the Rail Development Group and rail industry alliances, but new arrangements must not compromise safety. We will consider that in more detail in our proposed new inquiry on safety at level crossings. The interests of the travelling public must be protected throughout the partnerships, and so must the interests of freight, which, by its very nature, cannot be involved in a partnership in the same way as passenger rail.
I have discussed financial aspects of franchising, but other aspects are also important. One question that remains unresolved is how the Government will fulfil their promise to put passengers’ interests at the heart of franchising. We have raised that in the Committee, but we have not yet heard a full explanation of how it is to be achieved.
The outcome of the Government’s long-awaited fares and ticketing review is also crucial. We were pleased to learn that the Department had ruled out the introduction of “super-peak” fares to reduce demand for the busiest peak-time services, but it remains committed to managing demand to reduce overcrowding. It is not clear how that will be achieved. We also welcomed the Government’s decision not to proceed with RPI+3% fare increases, but recognised that that left them without a clear policy on fares. Smart ticketing is another issue mentioned in our report on which progress has been slow. Can the Minister tell us when he will publish the report of the outcome of the Department’s review, which is already overdue?
The Committee’s vision for rail included the following: a clear link between policy on rail and other aspects of transport policy; a strategic approach to policy making by the Department that does not sacrifice democratic accountability, assisted by a strong industry regulator and an effective industry leadership; clarity about the objectives of subsidising rail and how these can be achieved; more transparency about the costs of rail; passenger interests to be more clearly taken into account in deciding questions of rail policy; more modern, flexible fare and ticketing options and a clear long-term policy on regulated fares; and no diminution in existing safety standards.
The Government have struggled so far to set out their own vision for rail or to link rail policy to other transport priorities. The west coast main line franchising fiasco has knocked the Department off course and threatens to challenge efforts to achieve better value for money across the industry. Strong leadership is required.
Rail is increasingly popular. It is important that the Government’s investment in rail, as part of our transport network, secures value for money for both taxpayer and passenger.
Iain Stewart (Milton Keynes South) (Con)
It is a pleasure to follow, for the second successive Wednesday, the hon. Member for Liverpool, Riverside (Mrs Ellman), Chairman of the Transport Committee. Last week our discussions were about high-speed rail; this week’s discussions will be at a slightly more sedate pace.
These are encouraging times for railways in the United Kingdom. As the hon. Lady mentioned, since privatisation passenger numbers have doubled and freight is showing a healthy increase of about 60%. That compares very favourably with our counterparts on the continent. I believe it is fair to say we have had the fastest growth in rail usage.
We are also seeing a substantial programme of investment in our rail network, with large projects such as the electrification of the great western line and the midland main line and the opening of new rail lines, including, I am pleased to say, the east-west line through my constituency to connect Bedford, Milton Keynes, Oxford and Aylesbury, and, it is to be hoped, in due course going further east towards Cambridge and the East Anglian network.
Caroline Lucas
The hon. Gentleman made some comparisons with the rest of Europe in terms of railway passenger numbers. Would he also make some comparisons about the levels of fares in this country and many other European countries?
Iain Stewart
I will happily do that. Indeed, I looked into this matter for a previous debate, as it is often claimed that our rail fares are the highest in Europe. Certainly if we compare immediate, walk-up, any time fares, we are comparatively more expensive, but if we look at the whole basket of fares, we compare very favourably. I urge the hon. Lady to look at an independent website compiled by regular rail users called “The Man in Seat Sixty-One”. It compares similar journeys on the continent and here, and for even very short-time advance fares we compare very favourably, so I do not accept that across the piece it is more expensive to travel by rail in this country than on the continent.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
As my hon. Friend has been comparing fares between here and the continent, does he agree that we have greater scope to use different levels of fares to spread the use of our railways more evenly throughout the day, rather than having people crowding into certain rush hour periods? That would be a useful change that could be made, especially on certain lines.
Iain Stewart
I am grateful to my right hon. Friend for that. I think I anticipate where her question is leading—it perhaps relates to high-speed rail—and I hope she will forgive me for not commenting on that. However, I agree that there is potential for expanding rail use outwith the peaks. Although the whole west coast main line franchise process had to be suspended, FirstGroup’s bid submission contained an ambitious but, I thought, deliverable wish to increase patronage of the railways outwith the peaks. That will help to generate more income and bring about a shift from other modes of transport to rail.
On investment, I was mentioning some of the larger projects that are going on, but much smaller-scale, incremental improvements are being made, particularly on the west coast main line. Passengers in my constituency are already benefiting from the lengthening of the Pendolino trains from nine to 11 carriages; and on London Midland’s commuter lines the speed of many trains has already been increased to 110 mph and it is in the process of procuring additional carriages to provide more capacity on those trains. so substantial investment is being made at the moment.
That investment compares very favourably to the situation not that long ago—two or three decades ago—when our railways were in a period of marked decline. The Serpell report in the 1980s was commissioned by the nationalised British Rail, and its most radical option would have truncated the national network. There would have been nothing north of Newcastle, nothing west of Exeter and the network would have been reduced to the core inter-city lines in a bid to cut out loss-making lines and deliver the railways to profitability.
Damian Collins (Folkestone and Hythe) (Con)
My hon. Friend will welcome, as I do, the transformation of rail services in Kent thanks to High Speed 1 and, in particular, the additional investment in extra trains and services resulting from the popularity of that new route.
Iain Stewart
I am happy to endorse the point that my hon. Friend eloquently makes. I have travelled on that line and seen at first hand many of the improvements that have been made.
The point has been made that the rail network requires subsidy to operate, and I agree with that. Many lines would not be profitable in themselves, but for social and environmental reasons they require subsidy. We need to take into account not just the operating profit and loss of an individual rail service, but the opportunity cost: the cost to the country if that rail line did not exist and people had to travel by car or another mode of transport. We can only imagine the congestion on the roads around our major cities if we did not have commuter rail lines. They might not, in themselves, be profitable, but the environmental and financial cost of having those passengers travelling by car or another mode of transport would just be too much to bear.
I welcome the Government’s commitment to continue to subsidise large parts of our rail network, but we cannot escape the conclusion that Sir Roy McNulty and others reached in their report, which was that we should be looking to make our network as efficient as possible, in order to achieve his aim of a 30% reduction in the unit cost. Our network is comparatively expensive to run compared with others. I believe that that is a product of history, not just of one approach, be it the franchise model or the nationalised model. It is a cost that has been built into the system over many decades, particularly because until relatively recently we have had a period of managed decline of our network and what investment there has been has been made on a “make do and mend” basis. Additional costs are hard-wired into our system, but the system we now have is sensibly evolving.
Graham Stringer
The hon. Gentleman is a serious student of the rail system in this country. There is not a lot in what he has said with which I disagree. He is trying to put the issue into its historical perspective, so let me put it into real historical perspective. When John Major’s Conservative Government privatised the railways in the 1990s, they came to this Chamber and told right hon. and hon. Members that there would be no subsidy. That was used as justification for selling the railways off at a lower price. Network Rail now carries a debt of £30 billion on its balance sheet, so I hope the hon. Gentleman will take into consideration the false prospectus that the Conservatives gave this House in the 1990s.
Iain Stewart
It is always a pleasure to take an intervention from my fellow Select Committee member. If the hon. Gentleman will forgive me, I will not rehash the debates of the 1990s as I am more interested in what happens from here on. In an earlier intervention, he made the point that the Government are seeking to return the east coast main line to private hands as a matter of ideology. Equally, I could argue that it is because of ideology that the Opposition want to renationalise it. I draw the hon. Gentleman’s attention to the conclusion of Richard Brown’s report on franchising, which concluded that the franchising model was not fundamentally flawed and that although the detail could sensibly be changed, the investment in and success of the railways could not have happened if the franchising was fundamentally flawed.
Let me turn to a number of initiatives that, I believe, can deliver a more efficient railway. The hon. Member for Liverpool, Riverside mentioned the development of alliances between Network Rail and train operating companies. That is a very helpful and sensible development. The one large-scale alliance, between Network Rail and South West Trains, has not been in operation long enough for us to make any sensible assessment of what savings it can deliver, but as the real expert, Nigel Harris, said in evidence to the Select Committee, it
“is the only game in town”
at the moment and requires a fair wind to achieve the savings that it hopes to.
Such alliances are not the only form of alliance available. One or two other examples provide evidence that such an arrangement can deliver useful savings and efficiencies in the railway. The project in Scotland to electrify the branch line to Paisley Canal on the Greater Glasgow network was an alliance between Network Rail, First ScotRail and Babcock engineering. They were able to electrify the branch line at a substantially lower than expected cost and two years ahead of the planned development because the power was devolved down to that level, meaning that the various experts and operators could get together and deliver the project very efficiently.
I am doing a fellowship with the Industry and Parliament Trust on the rail industry and I have spent a good number of days going around parts of the railway system. I have seen two separate examples of an alliance between a train operating company and the rolling stock manufacturer, which enables a much more efficient system of maintenance and refurbishment of the rolling stock. I visited the Kings Heath depot, jointly operated by London Midland and Siemens on the London Midland franchise, and—this will interest my hon. Friend the Member for Folkestone and Hythe (Damian Collins)—the Hitachi depot where the Javelin trains are maintained with Southeastern. Those depots are delivering a much faster and more efficient turnaround in train maintenance. They are not “grands projets” or exciting stuff, but they deliver a much better service for rail users at a much lower cost.
Damian Collins
My hon. Friend mentions the Southeastern trains. He might have noticed that the Javelin trains perform much better in poor weather, as they can cut through the snow and, effectively, open up the lines for the more traditional services.
Iain Stewart
That is another excellent point from my hon. Friend. As we continue to procure new rolling stock, there is greater scope for the more efficient method of alliancing between operators and manufacturers.
Mr Marcus Jones (Nuneaton) (Con)
Does my hon. Friend agree that alliances between Network Rail and local authorities are also extremely important in delivering local rail infrastructure projects, such as the Coventry to Nuneaton rail upgrade? We are working with Network Rail and local authorities, with funding from the Government, to deliver that important project.
Iain Stewart
I am happy to endorse that point. There is no one-size-fits-all model of alliance; different parts of the country will have different network requirements, and it is sensible to allow different arrangements to be established where they make sense.
Before leaving alliances, I want to sound two cautionary notes about bigger alliances, such as the one between Network Rail and South West Trains. First, they should not exclude open access operators, which I think offer a healthy alternative and competitive service on some lines. There is concern that too tight a deal between Network Rail and the dominant train operating company might—I put it no higher than that—exclude open access operators. I ask the Minister to keep an eye on that. Related to that, one of the witnesses to the inquiry that the Transport Committee is conducting into access to ports flagged up a concern that rail freight operators might be disadvantaged in securing paths on busy rail lines if too deep an alliance exists. Again, that is only one concern that has been expressed, but it is something to keep an eye on.
I agree that the Government’s review of ticketing offers considerable scope for encouraging more passengers on to the railway system and delivering that aspect of the network more efficiently and cheaply. There are all sorts of options, including smart ticketing and moving staff from behind windows on to station concourses to assist passengers; and more and more people will use their mobile phone to buy tickets and make reservations. The Select Committee heard evidence from some train operating companies that they will be able to deliver a more customer-friendly system of making reservations, rather than customers having to reserve some time in advance. There are considerable opportunities to boost numbers on our railways.
Another opportunity is offered by developing retail services at stations, from large destination stations such as St Pancras, where there is a considerable number of retail outlets, down to much smaller stations. As part of my IPT fellowship, I looked at Denmark Hill station.
Kelvin Hopkins
Perhaps the rents from premises on stations will go to the railway industry, but profits will go to the retailers, so retail development at stations would not make much difference, I would have thought.
Iain Stewart
I must disagree. Airports derive a considerable part of their income from the retail space at airports, and I see no reason why railway stations could not do the same. I am not saying that it would transform the economic model of railways, but it would be a useful additional source of income.
As I was saying, retail development is happening at smaller stations. Denmark Hill station is a lovely Victorian building, which is being remodelled so that, instead of a fairly horrible little ticket office and coffee machine, there will be a swish café, making it a much more attractive environment that will encourage people to use the railway. There is a lot of scope in such developments. I would even suggest that, where the Government are trying to reduce Government real estate costs, they might consider moving services such as post office counters into railway stations. It would be a bit of joined-up government to have public services all available in one spot. That is just one little suggestion, but at the heart of all this is the ability of the private sector to innovate, provide different services and deliver what the customer wants.
Kelvin Hopkins
It occurs to me that if all the retail outlets and hotels were, perhaps not renationalised, but taken back into, say, Network Rail, all the income and profits would go to the railway sector, rather than retail.
Iain Stewart
The hon. Gentleman seems to have a rose-tinted view of British Rail. I gently remind him of the nationalised British Rail catering options, from the curling cheese sandwiches to the tea and coffee that were indistinguishable. I would support private innovation in that field.
Mr Kevan Jones (North Durham) (Lab)
I am sorry that the hon. Gentleman has such strange views of the old British Rail, which I accept was starved of investment under successive Governments, but certainly the breakfast on the east coast main line was excellent.
Iain Stewart
I am too young to have been able to enjoy the east coast main line in those years, so I cannot comment, but from what I remember of the old British Rail Scottish region, the catering offer was not—
Sheila Gilmore
Has the hon. Gentleman sampled the catering offer and customer comfort on ScotRail, because I rather suspect it is not much better?
Iain Stewart
I have been on a number of trains in Scotland and had a thoroughly enjoyable experience. I do not know which services the hon. Lady has been on, but the last time I took a ScotRail train it was rather good.
If the Minister will forgive me, I want to touch on two local issues. First, I mentioned earlier the welcome investment that Virgin and London Midland are making in their rolling stock, which when all is delivered will achieve a considerable increase in capacity for my constituents. Until we get that, we have a problem with overcrowding, particularly during the evening peak. I have written to him about that before and so am just giving a gentle nudge to see whether we can reach a temporary arrangement between London Midland and Virgin to allow some London Midland passengers to use Virgin trains in the evening peak in order to spread demand.
Secondly—I made this point this last week—when we look at the second phase of high-speed rail and where the east-west line will intersect the proposed high-speed line in Buckinghamshire, perhaps it would be sensible to look at an intermediate station to allow people in Milton Keynes and the rest of Buckinghamshire to access the line.
In conclusion, the railways are in a good place. The problems and challenges we face are the product of success and increased patronage. The investment that is being made is welcome. I heartily endorse the different investments the Government are making and look forward to our achieving another golden age for the railway network.
Alison Seabeck (Plymouth, Moor View) (Lab)
My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), in her usual expansive and thoughtful way, gave a very detailed assessment of her Committee’s work, particularly in relation to rail franchises. Its excellent and extremely thorough report on public support for the railways and the implications of Government spending plans, as well as the subsequent report on the collapse of the west coast main line franchise, paints a worrying picture of an overcrowded, overpriced and, at times, dysfunctional railway system that needs continued public support.
The Committee also expressed a view on the delicate balance that needs to be struck, but which is not always achieved, between the Government seeking savings and seeking, at times, to micromanage while at the same time not always listening to rail users and lacking accountability, specifically in relation to the franchise process.
From a south-west perspective, we have the great western main line carrying 50% more passengers than it did 10 years ago. Network Rail states that the line is full. In 2002-03, 72 million people used the line, and in 2012-13 the figure was 110 million. The Reading to Paddington trains account for six out of 10 of the most overcrowded journeys in the UK. There is simply no more space for extra trains at peak times to relieve those pressures at the moment.
As the Select Committee acknowledged, the competing pressures mean that freight lines—so important, although that is perhaps not always fully recognised by the House—commuter lines and community lines, as well as intercity services, are almost at breaking point in some areas. On the main line between Penzance and London there is at times single-track running, in part because of the topography. Lines run along the seafront at Dawlish, and locals have concerns about that as the sea level rises.
To the great anger of people living in the far south-west, there is a sense that none of the problems is likely to be resolved because investment in rail has been made elsewhere in the country under successive Governments. We know from answers to parliamentary questions that transport and rail spend per person in the south-west is lower than virtually anywhere else in the country.
Kelvin Hopkins
I am sorry to disturb my hon. Friend’s flow. She was talking about the competing demands for freight and passenger capacity. Does she not agree that if freight could be dealt with by alternative infrastructure investment, freeing up the main lines for passengers yet again, that would make a real difference?
Alison Seabeck
That argument can certainly be made by people in the south-west, in respect of whether there is scope for realigning the routes for the main line and allowing freight to use some of the older lines. However, the issue is complicated and hugely expensive, as I am sure the Minister would be the first to tell me. There are a lot of people, certainly in the south-west, with a lot of good and interesting ideas. Were the money available, I am sure that Governments of all complexions would be prepared to consider them.
The investment started under the last Labour Government at Reading and in Crossrail will improve reliability and connectivity. However, the geographical constraints on the tracks’ infrastructure in the south-west will continue severely to limit the maximum line speed and extend journey times. If we are serious about reducing pollution and car use, it should not be quicker to drive from Tiverton or Exeter to Plymouth than to take the train.
The fragility of the south-west’s infrastructure has been ignored repeatedly. The recent severe floods affecting the signalling near Taunton, washing away the line at Cowley bridge, has served only to reinforce the view in the south-west that people in Whitehall do not have a clue about the potential for economic growth in the region.
Mel Stride (Central Devon) (Con)
I agree that railway resilience is a particular issue in the south-west and Cowley bridge has been a particular problem. However, does the hon. Lady welcome, as I do, the fact that many millions of pounds are now being invested in the Cowley bridge problem, in particular to make sure that cabling is above the likely water level in the event of further flooding? Does she welcome and recognise that progress?
Alison Seabeck
That work was essential. We cannot continue with a situation in which severe weather conditions completely wipe out the links to the far south-west. No Government of any complexion would ever have been forgiven for not ensuring that the signalling around Cowley bridge in particular was made more resilient.
I was about to mention some of the important pinch points highlighted by Network Rail in the region, including Cowley bridge. Others were Chipping Sodbury, Hinksey, Whiteball tunnel, Athelney, Hele and Bradninch, Flax Bourton, Patchway tunnel and the Exeter diversionary route, all of which eventually need to be progressed. I fully accept that there is a restricted funding envelope, but how that limited funding is prioritised across the country can give or take away hope from rail users and local authorities, particularly in the south-west.
The latest solution for the problem at Exeter, over and above the lifting of the cabling and signalling, and put forward by the Environment Agency, appears to have been effectively to put a barrier across the section of rail if the flooding comes back, to manage the water flow. That effectively closes the south-west off for business. Plymouth has no airport and if either the M5 or the A303, which is not yet dualled, close at the same time, as has happened more than once, financial losses in the region will be significant, running into millions of pounds.
The weather troubles of last winter showed precisely the need for improvements to infrastructure in the south-west. During that period, First Great Western’s public performance measure for trains arriving on time fell to 80%. We should acknowledge—I am sure that Government Members who use the service would do so—the work that the staff of First Great Western undertook at that time, which was well over and above their usual call of duty. That includes everybody from drivers to station managers to the man who was tweeting the problems on the line—as well as the engineers, of course, who were out in all weathers trying to mitigate and cope with the effects of landslides and flooding.
The Minister of State, Department for Transport (Mr Simon Burns)
And the emergency services.
Alison Seabeck
And, of course, the emergency services. I thank the Minister; he is absolutely right.
The rail network is our lifeline. Ministers and officials, as well as those involved through other organisations such as the Environment Agency, who clearly have a responsibility for tackling adverse weather conditions, must understand that the transport network and the environmental infrastructure network have to work together and we have to come up with solutions that work for both. We cannot have parts of the country simply being cut off.
The growth in demand for travel to the south-west for its cities and leisure activities continues to grow, and that is a really good thing. Of course, many of these travellers and visitors are expected to arrive by rail. Indeed, 24,000 people arrived at Castle Cary to go to the Glastonbury festival last weekend, including a member of my staff, who has probably just about recovered. Many businesses are keen to establish themselves in the south-west because of the quality of life there, but they voice concerns about the transport linkages.
Yet now we have had a backtracking on promises made to MPs, commuters, local authorities and rail user groups regarding the great western franchise. The visit made by the Secretary of State, with a fanfare of trumpets, was welcome. However, on almost the same day, others were being told—officials were talking to officials in local government—that the service upgrades that we had all fought for and believed we were getting were being taken away: no early-morning train to Plymouth, no extra three-hour journeys from London, no wi-fi. Improvements could happen only if a third party—a local authority or business—was willing to contribute. It was always very unlikely that First Great Western would be willing or able to take on the additional financial risk over the shortened period of the revised franchise. There was perhaps a hope that the local enterprise partnerships could step in to assist with the recommended Heseltine regional funding, but the Chancellor knocked that on the head when he reduced so drastically the amount going to the regions.
If the Government are serious about getting growth back into the economy, they must look at the transport infrastructure in all the regions and not be totally fixated with High Speed 2. How can local authorities invest when they have just learned that their budgets are going to be cut further by the Government, with another 10% having to be found? Many are asking how they can be expected to fund and support long-distance services.
The franchising and re-franchising process has, at times, been disastrous. The Transport Committee has rightly raised serious concerns and made recommendations, one of which advised the Government to look at wider policy objectives such as the promotion of sustainable end-to-end journeys, the quality of the passenger experience, and, crucially for Plymouth and the south-west, social and economic development. It is far from clear that any of these factors have been considered with any seriousness specifically in relation to the great western franchise. Where is the joined-up government in all this? The delay and uncertainty around the great western franchise is deeply damaging to the region. Other areas are now suffering because of the failure of the franchise process. Staff on the affected lines are concerned that the pressure on the companies is leading to cost-cutting and an increase in casualisation of posts, and from the companies’ perspective there is a risk to share prices and, ultimately, viability.
There are justifiable reasons—environmental, economic and social—for public subsidy of the rail network, but it is not clear that the Government are getting value for money. There should be greater transparency on where the subsidy is going. It would also be good if we could have some explanation of why the home countries of the overseas-based companies running lines in the UK—they are usually in Europe and include France, Germany, Holland—have fares that are, on average, a third lower than they are here. Are we subsidising some of those routes in Europe?
My party rightly wants to give the travelling public some hope by using funds more wisely, scrapping the costly privatisation of InterCity East Coast and reforming the ticketing process. Introducing a legal right to the cheapest ticket will help, because people are struggling to use public transport as the cost of living rises and their wages fall.
Our rail links nationally are a vital part of our infrastructure and are essential to the growth and prosperity of our regions because of their ability to move people and freight. In many parts of the country, however, they are hampered by the failure of the franchise process, the failure of the infrastructure and resilience planning and the failure of this Government.
Ben Gummer (Ipswich) (Con)
When Thomas Telford was invited at the end of his career to help with the engineering of some new railway projects, the inventor of this country’s modern road network declined the offer, not because he did not admire railway engineering and the extraordinary speeds that these amazing new machines could achieve—he admired them very much—but because he understood that the railway itself had a necessary monopoly that the road did not. Part of the attraction of the road to Thomas Telford was that once it was built, it allowed someone to travel at any time they pleased in their chosen method of transport, but the railway, for all its brilliance, did not.
That is not to say that the railway is not a useful or brilliant invention. It has been central to the progress and advancement of our country and all developed countries across the world. However, the railway has an intrinsic problem—this is recognised by Sir Roy McNulty’s report, the various commissions instigated by the Department for Transport and, indeed, the Transport Committee report—namely its inability to get the market to work in the normal, functioning way that it would elsewhere.
The interesting thing about the railway is that, over time, it has found different competitors. Despite the fact that its technology is intrinsically the same as that it began with 200 years ago, it continues to compete with road—over the past 50 or 60 years it has competed with it on speed—and increasingly with flight. Rail, as well as its regulation and franchising arrangements, must therefore be seen in its wider context as a competitor with other modes of transport around the country.
It is important to understand why the Government are progressing with the reprivatisation and refranchising of various lines. Ideology is important and has been brought up by several Opposition Members, but privatisation has worked not because of ideology but because it is the most practical and pragmatic way of getting the railways to work. In fact, the entire railway system, which was instigated by the Victorians and which spread around the world to America, France and elsewhere, was a product of private enterprise.
Ben Gummer
I will in a moment.
The system would not be with us today were it not for the massive investments—many of which failed as a result of the risk of capitalism—that made this extraordinary invention possible. Before I allow the hon. Lady to intervene, I recall that in a previous debate she told me about the efficiency of the German railway system, but when I reminded her afterwards that it is now a private system she could not believe it. One of the reasons this country is having to rebuild the railway network is the decades of underinvestment. That is not necessarily a product of various Governments; it is the natural result of a nationalised system whose control rests in the Treasury’s hands.
Caroline Lucas
On that very point, there is still significant state involvement in German railways. What does the hon. Gentleman have to say about the fact that 60% of Britain’s rail operators are owned by European state rail arms? Our high rail fares are being used to subsidise rail services in Germany and beyond, which seems crazy to me.
Ben Gummer
The hon. Lady did not admit to the role of the private sector when I spoke to her about German railways. Of course, there is a role for the state—that is what we are discussing. Any railway has a necessary monopoly: only one train can travel at a time and it has to be owned by somebody. Unlike road, it is not possible for two trains to travel on the same track at the same time, so the state has to intervene at some point in order to regulate and subsidise, as it does with road travel.
We have seen the results of privatisation since 1995. Rail travel has increased by 133%. It is at a higher rate than in the 1920s in absolute numbers. Rail freight has also increased to a point that would have been impossible to imagine in the 1960s and 1970s.
Kelvin Hopkins
The hon. Gentleman is raising, yet again, a correlation, not a cause and effect. Railway usage has gone up despite privatisation, not because of it.
Ben Gummer
The hon. Gentleman is a marvel of this House and is respected deeply by many Members on both sides of the House. However, he must see that the graphs of declining rail use up to 1995, for both freight and passenger, were turned on their heads after privatisation. That is not just a correlative effect, but a causal one.
Mr Kevan Jones
I am interested in the hon. Gentleman’s history lesson. He is right that the early railways were pioneered by private enterprise. However, by the time they were nationalised, many of them were in a dire state. That was the case not just in this country, but around the world. Rail passenger numbers went down after the war because there was a rise in car ownership and because of the development of road transport. The reason Germany has good railways is that a British civil servant planned the system after the second world war.
Ben Gummer
This is an interesting parlour game and we should pursue it at greater length outside the Chamber. The hon. Gentleman is right that the railways were on their knees after the war. That was partly a result of the war and partly a result of the rise of the car.
It is interesting that this necessary monopoly that was challenged profoundly in the second half of the 20th century is now able to compete successfully with motor vehicles and planes, precisely because of the investment from the private sector. As a result of that investment, the subsidy per passenger kilometre has gone down considerably since privatisation, even though the total subsidy has gone up.
Mr Marcus Jones
My hon. Friend is making an important argument. It has been argued that the decline of the railways was caused by the success of the car. However, car ownership in this country has accelerated since 1995. The increase in passenger numbers therefore shows that privatisation has had a huge positive effect on the railways.
Ben Gummer
I agree completely with my hon. Friend. I will come on in a second to the link between his constituency and mine.
Ben Gummer
I will give way in a while, if I may.
The Government are continuing a strategy. There are, rightly, arguments about whether the franchising process was got exactly right, but to my mind, John Major’s privatisation of the railways was one of his most significant acts. It has transformed the way in which—[Interruption.] Opposition Members laugh, but they ignore the fact that we now have some of the safest railways in Europe, second only to Luxembourg, which we did not have before privatisation.
Ben Gummer
The hon. Lady shakes her head, but she should listen to the facts. We have the fastest rate of passenger growth in Europe. We have the safest railways in Europe after Luxembourg. That is the result of privatisation, which has made a significant difference.
The ideologues are the Opposition Members, including the shadow Secretary of State for Transport, who espouse the ideology that dare not speak its name. She wants gradually to bring the railways back into public ownership and undo the extraordinary progress that has been made.
Mr Kevan Jones
The hon. Gentleman has a very selective view of history. He obviously does not remember—perhaps he was still at school—the period between privatisation and the effective renationalisation of Network Rail, when there were a number of tragic rail accidents in this country because of the inefficient way in which privatisation was carried out and the lack of investment. He must take into account that the effective renationalisation of Network Rail was how the investment was got right.
Ben Gummer
I am giving a bit of history because it does inform our discussion of the franchise process, which is the core of the report. I am not going to start trading statistics, but over the period of Railtrack, rail safety improved and we were going up the European safety league table. The reason so much money had to be invested—very successfully with private help—was the years of underinvestment by a series of Governments, Conservative among them. I disagree with the hon. Gentleman’s intervention on that point, not least because the facts on the safety of the rail network under privatisation speak for themselves.
How do we get this franchise system to work so that rail companies can compete with their natural competitors, the motorways and the airlines? I plead with the Government to do as much as they can. I know that the advice they have had recently has been to shorten slightly the long franchises that have been planned, but the longer the franchise rail companies can get, the better their ability to invest in rolling stock, customer service and improving the capacity and punctuality of their services.
Those of my constituents who have had the misfortune of having to commute on the Ipswich to London line for a long time will say that the best improvements they have seen were under the first franchise—as I am sure my right hon. Friend the Minister will agree—which was quite long and had the loosest possible terms. It allowed the then Anglia franchisee to put maximum efforts into improving performance. The last Government did many good things in rail, but one of the bad things was to have far too tight a control over the franchises, stipulating to the dot and comma how the services should be delivered. Unsurprisingly, the bidders for those franchises went in at the lowest possible price, bidding on the specification provided by the Government, and the improvement in service flattened and, in some cases, reversed. We need as loose a franchise framework as possible, and as long as possible so that the private sector can invest as fully as possible in the services without being second-guessed by the doubtless otherwise brilliant officials at the Department for Transport.
We need to see other improvements, and I am glad that the Committee recommended them in its report. We need transparency in subsidy. The system is still not good enough at identifying where subsidy goes. I have tried to understand how much subsidy goes in to the great eastern main line. Network Rail and the Office for Rail Regulation are not good at disaggregating subsidy in sufficient granular detail. I have questioned them about control period 5, but it is almost impossible to get a decent idea of the quantity of subsidy or public investment we are likely to get in our line, which makes it very difficult for us, as public representatives, to fight for our constituents.
Transparency is also important for the way in which the franchise system develops. When privatisation was introduced, there was only one profit-making line in the UK and there are now many that turn a surplus. Effectively—and I know that the Minister disagrees with me slightly on the detail of this—fare income is transferred from one part of the country to another. Roughly £30 of the £74 standard fare ticket from Ipswich to London is paid in premium which is moved, effectively, to those parts of the country that need a subsidy. That is unfair on my constituents, especially those who are paid the same bad wages that some people in subsidised areas are paid. They rightly demand a social subsidy so that they can get their rail service for less than they would otherwise.
If a lot of our fare income is being moved to other parts of the country, it makes it difficult for us to get the investment we need. We should have more transparency about how the premiums are moved so that we can achieve some sort of parity for investment.
I turn now to a discussion of the east of England, and I know that the Minister has a constituency interest there and, therefore, a profound knowledge of the area. Only two regions of England outside London are net contributors to the UK Exchequer: the south-east and the east. Since the 19th century, the eastern region has suffered some of the worst levels of investment. Historically, there has been a poor level of investment in the main line from London to Norwich, with hand-me-down carriages and levels of service that other parts of the country have long forgotten about. The region has contributed to the UK economy in the past five or 10 years, but investment is needed for that contribution to continue. The region is not demanding new motorways or A roads, but investment is required for people to able to get from London, Ipswich and Norwich to the midlands. That would lead to growth that would make a significant contribution to the UK economy.
We are profoundly grateful for the investment that has occurred in the past few years. It was promised for many years, but not delivered. We will soon have a direct line between Felixstowe and Nuneaton, the constituency of my hon. Friend the Member for Nuneaton (Mr Jones). Thereafter, I hope we will have a direct line from Nuneaton to Coventry. I hope—the Minister will speak on this later—that there will be a new bypass loop north of the Minister’s constituency of Chelmsford, which would release capacity and improve performance between London and Norwich. All of these plans, in addition to Ely North junction, have been long promised and long talked about. They are at last being delivered, and for that we are very grateful. However, we need new trains on the new track; not now, not immediately or in the next few years, but within the new franchise that will be set in 2016. We need the new trains that have been provided to the rest of the country and have been denied to us. Whenever the rest of the country is finished with a new train, it is passed on to East Anglia. That is no longer good enough.
Ben Gummer
Well, it has been true since the 19th century. I hope that at some point we will get the new trains that will release the economic potential in Ipswich and Norwich that has so long been denied to my constituents and their forefathers.
We are making good progress. My hon. Friend the Member for Milton Keynes South (Iain Stewart) is now able to say that the railways are in a good place, something that would have been unutterable 10, 15, 20 or 30 years ago. We need investment to continue, we need to release the power of the private sector and we need to be able to continue the miracle of rail privatisation.
Kelvin Hopkins (Luton North) (Lab)
I will not spend too much time on the public-private argument, because that would go on for ever and we would probably never agree.
I mentioned that the Catalyst report of some 10 years ago found that British Rail had the highest productivity of any rail system in Europe. That was not because it was performing ideally, but because there was so much underinvestment that it was working “miracles on a pittance”, in the words of Tom Winsor, who was the rail regulator some years ago. He went beyond that to say that BR handed the rail system over to the private sector in good order. There was desperate underinvestment, but it did its best in difficult circumstances.
As a commuter of 44 years on Thameslink and its predecessors, I love railways. Their renaissance has been a wonderful thing and I want it to continue. I have always thought that railways would be the transport mode of the future, not the past. If one goes back 20 or 30 years, one recalls that they were regarded with utter cynicism by the Department for Transport. A senior official was put on to the BR board, as was the custom in those days. He arrived at his first meeting and said that he had come to oversee the demise of the railways—that was the attitude. Everybody thought that the great freedom-loving individualists would go by car, not by this collectivist, socialist system called rail. Nevertheless, we have seen a renaissance in the investment and use of the railways. Indeed, just about the only way to guarantee to get to a place on time is to go by rail. I could not possibly drive to Parliament at peak times; it would be impossible. I remember that my father used to drive from the suburbs of London into Kensington every day, but people could do that 50 years ago. It would not be possible now. People have to go by public transport—or, specifically, by rail. Railways are wonderful things.
Mr Kevan Jones
Does my hon. Friend agree that increasing congestion on the roads is one reason rail usage has gone up, not the great privatisation, which is what the hon. Member for Ipswich (Ben Gummer) thinks is the reason?
Kelvin Hopkins
My hon. Friend is absolutely right. We have seen people travelling longer distances to work and growth in the economy, particularly in London and the south-east, leading to much more commuting from longer distances to take advantage of lower house prices further from London, and so on. The amount of travelling that people need to do has increased enormously. The only way they can do it is by rail. I speak as someone who is sometimes asked by people, “How long does it take you to drive to London?”, to which I say, “I don’t know and I’ve never done it”—why would I, from Luton to London every day? That is my view of rail. I have been a passionate supporter of railways for a long time.
However, since privatisation we have seen a surge in costs, not just on the operating side, but on maintenance and track renewal. Time and again when Labour was in office, I raised with Transport Secretaries the fact that the costs of maintenance and track renewal had gone up by four or even five times since privatisation. The reason was largely to do with the move towards more contracting and away from direct works. That contracting involved lots of lawyers and layer upon layer of project management, all of which meant bureaucratic cost, which is still the situation now. Indeed, after some time maintenance was brought back in-house. The problem was that the bad habits established while it was contracted out continued and the same people who operated in the contracted-out version carried on doing the work in-house, so there was not much difference. We have to look back to how things operated in the days of BR, when they were done much more efficiently.
Direct employment of engineers is crucial in that. Rather than having project managers running schemes, with layer after layer of project management, and engineers employed as consultants, we should have engineers directly employed by Network Rail and running schemes from the top, not being brought in as expensive consultants.
Iain Stewart
May I draw the hon. Gentleman’s attention to the example I gave of the electrification of the Paisley Canal line? It involved the train operating company, Network Rail and Babcock engineering, a private contractor that delivered the project considerably under budget and two years ahead of schedule.
Kelvin Hopkins
There are undoubtedly examples of good practice, but there are many, many examples of bad practice, involving cost overruns and things being done expensively.
Having an engineer at the highest level in projects is crucial. Project managers cannot make judgments about technology in the way that an engineer can. We need track engineers, signal engineers and people with all those kinds of skills, which are gradually disappearing because we are not training enough in-house. In future, I hope there will be a move back towards direct employment of engineers. So that is where we are.
There is also a need to invest in infrastructure. We are talking about “Rail 2020”, not longer-term investments in things such as HS2, which we debated only last week. That is all years away—it might even be parked in a siding, which I would not object to either, although that is another view. Obviously I welcome the electrification plans. They are tremendous, but other things could be done—and need to be done quickly and could be done inexpensively—to make major improvements. As I said last week, upgrading the east coast main line, for example, could make a tremendous difference, even simply by doubling the viaduct at Welwyn. At the moment, there are just two tracks over the Mimram. If there was another viaduct, there would be four tracks and the bottleneck would be overcome. That would cost something, but nothing like the billions we are talking about with HS2. If we had east-west flyovers at Peterborough and Newark, it would free up the track for fast operation.
As I mentioned last week, a 1990 test run was undertaken by BR to see how a fast train could operate from King’s Cross to Edinburgh. Remarkably, the line was cleared for the test run and the train ran to Newcastle in two and a half hours, with a two-minute stop there, and then onward to Edinburgh in three and a half hours. That showed what could be done if the track were upgraded on a regular basis. Three and a half hours to Edinburgh is eight minutes faster than the time HS2 is now advertising. It is not heavily trafficked, and if we took the freight off the east coast main line, we could—with longer trains, more modern signalling and a bit more of an upgrade—get much more capacity on that line very cheaply. I should mention, of course, that King’s Cross could also serve Leeds in that way in an hour and a half. With a 140 mph operation—the sort of speed that is possible not throughout the line, but for much of it—this King’s Cross to Leeds service could bring more capacity.
The problem with the west coast main line is essentially the London to Birmingham route. As I said last week, there is an easy way of overcoming the problem by upgrading the Paddington to Birmingham Snow Hill route through Banbury. A 125 mph operation on that line would be relatively easy, with longer trains, a bit of upgrading and more modern signalling. That could effectively double the capacity for getting to Birmingham, and it would not be difficult or expensive. Paddington will be on the Crossrail route. From the City, then, someone could travel Crossrail to Paddington and straight through to Birmingham Snow Hill in the centre of Birmingham, overcoming a major problem. The station proposed for HS2 is rather further away from the centre than Snow Hill is, so some of the advantage of that is lost. Going further north, there is a stretch of 10 miles or so with three-track working north of Rugby. If it were made four-track, it would overcome a bottleneck and increase capacity going through to the north-west. As I said, things could be done that are not expensive and they could be brought in quickly, so that by 2020 all these things could easily be in operation.
Most important of all, we have to look at investment for freight. I have personally been heavily involved in a freight scheme idea—it is not a pecuniary interest, but a political interest—and I believe we need new freight infrastructure. If we could get all the freight off the existing main lines on to dedicated freight infrastructure, we could solve enormous problems. Freight and passengers do not mix well, as they have different operating speeds. Passenger trains tend to go faster and are more reliable, whereas freight goes on long, slow and heavy trains, which do not fit well with passengers.
There is a scheme to overcome that problem—at least on the north-south line linking the main conurbations. I have proposed the GB Railfreight route, and last week I put in a submission on behalf of colleagues to Network Rail for its consultation on freight. The GB Railfreight route would be a dedicated line going all the way from the channel tunnel to Glasgow, linking all the main conurbations in Britain.
The important thing about freight, of course, is that 80% of it goes by lorry and trailer, not by container, so we would need to have a freight route capable of taking lorries on trains. Without that, we will not see the big modal shift from road to rail that we need. This scheme proposes precisely that, taking the largest lorries on trains. This is happening all over the continent of Europe with dedicated routes. New tunnels are being built through the Alps that are capable of taking through the largest sized freight. If we could run trains directly from Rome to Birmingham or from Berlin to Glasgow without interruption by passenger trains on a dedicated freight route capable of taking lorries on trains, I think we would see a transformation of the links between our regions and the continent of Europe, which would also breathe new life into the regional economies that so many Members represent. That scheme is a realistic proposition. It could be built quickly and cheaply, and all it needs is a nod from the Government. I have met previous Secretaries of State and officials from the Department for Transport and put the case to them, and it is a realistic prospect that I hope will be taken seriously. It has the backing of supermarkets, hauliers and so on.
One important point I wish to make to the Minister is that such a scheme would use existing track route, under-utilised lines and old track bed. Only 14 miles would be new line, and nine of those would be in a tunnel. Two routes would have to be electrified to a sufficient gauge to take lorries on trains: Gospel Oak to Barking, and Wigston to Chesterfield in the midlands. If on those routes the gauge was raised to a sufficient level and able to take full-scale lorries on trains, the scheme would work. Those lines will be electrified—rightly so; we welcome that—but if they could be raised to a sufficient gauge to accommodate that sort of freight, it would be a tremendous advantage. If that is not done and the freight scheme goes ahead later, we will have to do the work all over again, which would be an expensive irrationality.
That is what I suggest. The scheme would take up to 5 million lorry loads off our roads every year. It would take all the north-south traffic off the west coast main line, the east coast main line and the midlands main line, and breathe new life into the economies of Scotland, the north-east, the north-west and south Yorkshire. There could eventually be a link to south Wales and Birmingham, and of course to London and the south-east, and it would link directly to the continent of Europe.
Trains currently take lorries from the continent through the channel tunnel, but they can get only as far as the terminal at Barking where they are lifted off. They cannot get past Barking because the gauge is not sufficient to accommodate them. In a sense, the first phase of the scheme is already operating, but we want Governments and Network Rail to grasp hold of the idea and build the freight line that we think will transform Britain’s transport infrastructure. I hope that what I have said is helpful to Ministers and of interest to fellow hon. Members.
Mr Kevan Jones (North Durham) (Lab)
I thank my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) for her contribution, and for the work she does as Chair of the Transport Committee not only on rail but on all transport matters. As we have heard, passenger numbers are growing and the amount of freight on our railways has increased, and it is important to bear that in mind when talking about the future structure of railways in the UK. The argument made by the hon. Member for Ipswich (Ben Gummer) that those increased numbers were somehow down to the fact that John Major got privatisation so right stretches his ideological point a little far. As my hon. Friend the Member for Luton North (Kelvin Hopkins) said, in recent years the increase in car ownership and congestion mean that many journeys cannot be made by road within a sensible time, and—quite rightly—people are using the railways.
An efficient and well structured rail system for the UK is not only important to provide the transport links we rely on for individual travel and freight; it is also vital for our economy, especially in regions such as the north-east of England. That is why investment in our railway system is so vital. We have heard a lot of talk over the past few weeks about the capital investment projects outlined by the Government, but over the next two years we will actually see a reduction in the transport budget of some £300 million. A lot of the investment projects that have been outlined are jam tomorrow, or even jam a very long way into the future. Capital investment in our railways now would not only improve the situation in the ways outlined by my hon. Friend the Member for Luton North, it would stimulate the economy. Such investment would not be wasted; it would boost the economy of the United Kingdom and it would certainly improve the economies of regions such as the north-east of England.
We had a debate on High Speed 2 last week. When I opened the Daily Mail this morning, I found myself in a rather difficult position, because I found myself agreeing with Lord Mandelson. That has to be a first, although I was not sure that I could believe what I was reading. Some of the points he raised were perfectly legitimate, however. The investment in HS2 is going to be enormous and, I have to say, regions such as the north-east will see very little benefit, even when, in the longer term, the high-speed route reaches Newcastle or beyond.
There has been a silly argument about high-speed rail being an alternative to regional air transport in this country. I do not agree with that; I believe that the two can compete alongside each other, as the hon. Member for Ipswich said earlier. For someone travelling from the north-east to Bristol, for example, flying is a better option than taking what is at the moment a long train journey. I do not think that the investment in high-speed rail will produce greatly reduced journey times to Birmingham and beyond. I also fear that it could sap scarce capital investment from the existing rail network.
We have to thank the Victorians for many things, and our existing rail network is one of them. It was a good example of their forward thinking. I accept that, under nationalisation, a number of Governments starved the network of investment, and that that led to some of the problems that we now face. However, that should not take away from the achievements of British Rail, including the introduction of the high-speed InterCity 125 service. That was so far-sighted that the service is still running today.
As my hon. Friend the Member for Luton North has said, we could achieve some quick and relatively inexpensive changes to the north-east main line for a fraction of the cost of HS2. Those changes would have a dramatic effect on journey times and, as he said, they would achieve a modal shift as we moved freight off the roads and on to the railways. Before we embark on the full investment in HS2, those proposals need to be looked at seriously. They are doable and relatively cheap, and they would benefit many regions of this country, not 20 or 30 years in the future but now.
Kelvin Hopkins
I agree with everything my hon. Friend has said—not just the compliments he has paid me but the earlier part of his speech, with which I strongly agreed. The outside estimate for the GB Freight Route scheme is £6 billion, which is a tiny fraction of what is being proposed for HS2.
Mr Jones
My hon. Friend makes a very good point. We also need to consider the multiplier effect of such a scheme, and the economic benefits to regions such as the north-east. There would be benefits in reduced journey times, and in the increased amount of freight on the railways. The climate change cost would also be reduced as we got freight off the roads, and the scheme could create regional expansion in areas such as County Durham.
Guy Opperman (Hexham) (Con)
I am following the hon. Gentleman’s argument with interest, but would he not agree, given the funding for the northern hub, the improvements to northern rail services and the totemic importance of HS2, that there is now a strategic shift, supported by those on both Front Benches, in favour of high-speed rail coming to the north-east? That must surely be a very good thing.
Mr Jones
I fear that we will have exactly what we experienced in the early days of the channel tunnel, when trains travelled at high speed through northern France and then came to a slow stop at the other end, crawling into Waterloo. The idea that someone would travel to Birmingham or Manchester by high-speed rail and then continue the journey on the current CrossCountry network is ridiculous.
The hon. Gentleman, representing a north-east constituency as he does, will be well aware that travelling to Birmingham, for example, is very difficult at the best of times. Even if journeys to Birmingham and Manchester were speeded up marginally, travelling to the eventual destination could take a further two hours. If the hon. Gentleman has ever travelled from Durham to Manchester, he will know that it takes about two hours, and sometimes involves changing trains at York. As my hon. Friend the Member for Luton North has suggested, the investment that is being proposed could reduce those journey times now, at a fraction of the cost of HS2.
I hope that I do not sound too much like the little boy who pointed out that the emperor had no clothes on, but I have seen a great many projects such as this, and it is clear to me that the Government have become starry-eyed about HS2. In the last Parliament, Lord Adonis became starry-eyed in the same way, saying that this was the big idea that would solve the problems of the United Kingdom’s railway network. I am sorry, but I do not agree.
Guy Opperman
Both the hon. Gentleman and I contributed to Lord Adonis’s review of the north-east for the North East local enterprise partnership. Consideration of HS2, the northern hub development and an increase in connectivity between the various regions of the north-east formed a pivotal part of that review. I respectfully suggest that the lessons that we discussed and apparently learnt at that time seem to have been forgotten by the hon. Gentleman, given the speech that he is delivering now.
Mr Jones
The hon. Gentleman may have had the privilege of contributing to Lord Adonis’s report, but I was never even asked for my opinion. I think that many things in that report are complete nonsense, and that it has been given a status in the north-east far beyond its content. What my hon. Friend the Member for Luton North has proposed would increase connectivity in the north-east at a far lower cost than HS2, and would, I believe, be of more benefit to the north-east.
It interests me greatly that the hon. Member for Hexham is now enthralled by Lord Adonis’s report and believes that it is the answer to the problems of the north-east’s economy. I am afraid that I do not share his view, and I think that if he talks to people in business and to his parliamentary colleagues, he will find that many of them do not share it either. The debate about the investment in HS2 needs to take place, and I hope that it is not too late for some of the decisions that have been made to be reconsidered.
Kelvin Hopkins
One assumes that the hon. Member for Hexham (Guy Opperman) would travel to Newcastle on HS2, and would then take a slower train from Newcastle to Hexham. In fact, in 1990 a train on a British Rail test run travelled to Newcastle in the same time that it would take on HS2.
Mr Jones
Exactly—and if we are talking about the scarcity of capital, we should consider the upgrading of links to Hexham. In my constituency, some existing lines could be opened up. The Leamside line, for instance, could take freight off the main routes.
Let me now say something about East Coast. My hon. Friend the Member for Blackley and Broughton (Graham Stringer), who is not in the Chamber at present, wondered why the Government were in such a rush to return to privatisation. As he said, the line is contributing to the Exchequer, and is performing well in terms of punctuality and the quality of the service that it provides. Investment in rolling stock is clearly needed. However, the staff have worked hard to ensure the success of the line since renationalisation. They should be given credit for that, and for the tremendous loyalty that they have generated among the travelling public.
Iain Stewart
May I draw the hon. Gentleman’s attention to one of the recommendations of Richard Brown’s review of the franchising system after the west coast main line issue? He said that
“it is very important that the franchising programme is restarted as soon as possible.”
I would suggest that that is a reason for bringing forward the franchising process for the east coast main line.
Mr Jones
That may well be the case, but is it going to be good for the taxpayer? We currently have a very successful operator contributing to the taxpayer, so why automatically go down this route, unless there is an ideological reason of wanting to ensure that the operator moves from the public sector back into the private sector, which is clearly the position of the hon. Member for Ipswich (Ben Gummer)?
Iain Stewart
One of the other conclusions of the Brown review was that the pause in the franchising programme was having knock-on effects in the railway procurement industry, and that delay could interrupt the important investment in long-term projects. That is one of the reasons Brown concluded that the franchising timetable should be restarted as soon as possible.
Mr Jones
I am going to come on to the issue of franchising in a moment, but the hon. Gentleman’s point is based on the assumption that the Government would not invest in the rolling stock now for a nationalised company. The idea that the new rolling stock will be provided only by a private provider is not a good enough reason for saying that we should not at least examine the reasons for keeping the company in public ownership.
This is not just about the rail network itself; it raises issues around rolling stock and guaranteeing jobs in this country in providing new rolling stock, including through new investment in the north-east by Hitachi, which is very welcome and is locating a new factory at Newton Aycliffe.
How local people can influence the franchising process is a key issue. My hon. Friend the Member for Liverpool, Riverside (Mrs Ellman) raised the important point of the transparency of the process, and there is a constituency issue that I have been campaigning on for a number of years now: the stretch of the east coast main line that goes through my North Durham constituency from Chester-le-Street into Newcastle. Chester-le-Street has now increasingly become a commuter town for Tyneside and Teesside. It takes less than 15 minutes to travel from Chester-le-Street into Newcastle, and if it was in south-east England it would therefore be seen as an obvious place to commute to work from. In the mornings and early evenings there is an hourly, and sometimes a half-hourly, service, but throughout the rest of the day the timetable is intermittent, and later in the evening when people want to travel into Newcastle for entertainment there is a limited service.
I pay tribute to the campaign of the stationmaster at Chester-le-Street, Alex Nelson. He has been arguing for an hourly stopping service from Chester-le-Street to Newcastle. We have met Northern Rail to make the case for that, and the point it keeps making to us is that the franchising model puts an emphasis on inter-city routes, rather than stopping services. It is clear from the public meetings I have had about this issue over the past few years that there is huge interest in Chester-le-Street to ensure it gets an hourly service into Newcastle not only at peak times, but throughout the day and at weekends. That would serve to reduce the number of cars travelling to Newcastle and alleviate congestion. We need to think about how local people can have a voice in determining issues such as the train service from Chester-le-Street, which is not only important for local people, but which benefits the economy of Tyneside. A study has recently been undertaken on widening the western bypass, as we need to get the cars off that. One of the easiest ways of doing so is to invest in the likes of an hourly stopping service from Chester-le-Street.
Finally, I wish to discuss the wider transport picture in the north-east. I congratulate the seven local authorities in the north-east which are coming together in a strategic partnership to examine economic development. Not only that, but one of their key objectives is to look at a joined-up transport policy. This debate is about rail, but we cannot look at that in isolation; we need to consider how it joins up to other public transport networks, be it the buses or the Metro system in Tyneside. It also needs to be as easy as possible for people to transfer from one mode of transport to another. One thing I would like the authorities to back is some kind of Oyster card, whereby people could travel using different modes of transport in the north-eastern region. That would make travel a lot easier, and the new authority may well be able to push forward with such things. The investment we need in our rail network is not only vital for the purpose of people travelling; it is vital to the future economic benefit of this country and certainly of regions such as the north-east.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Before I call the hon. Member for Edinburgh East (Sheila Gilmore), I remind hon. Members that at 6.25 pm the Front Benchers need to start their speeches.
Sheila Gilmore (Edinburgh East) (Lab)
In recent months, I have been spending a lot of time working on issues relating to the east coast main line and the proposal to re-privatise it. The Backbench Business Committee was good enough to grant a debate on that some two weeks ago, which gave many of us an opportunity to explain why we had severe concerns about what was happening. In a lot of these debates it is interesting to see how we reprise a lot of our own prejudices—we are probably all a bit guilty of that—and we heard repeated the old mantra about British Rail’s soggy sandwiches and drinks that were like coffee or tea. However, some of us can also recall some pretty good things about British Rail. As a student, I was able to send my luggage in advance, door to door. None of the privatised rail companies has, at least as yet, repeated that. When my children were going to university, it was difficult to send their luggage. No doubt a lot of people now drive their children there and back, but we did not do that. There are good and bad things here. If we, on both sides of this argument, constantly raise those issues without having a proper debate, we will not progress things much further.
One advantage of the east coast line having been operated by Directly Operated Railways in the past few years is that we have been given something of a comparator. The Minister is fond of saying, “There is nothing really to compare. Every area and every franchise is different, so it is not a fair comparison.” Nevertheless, this arrangement has given us something that is perhaps as close as we are ever going to get to an ability to try out a comparison. It is a pity that the Government do not seem to want to allow it to continue so that we can see what is happening over a longer period.
Obviously, today’s debate is about looking more widely at railway issues and where they are going to be in the next few years. The things that have exercised the Government and the Transport Committee are the McNulty report, the cost of Britain’s railways and McNulty’s stark conclusion that our railways cost 40% more to run than comparable networks in Europe, many of which are state-run. If we had still had a nationalised railway at the time of McNulty and it had been found to be 40% more expensive, there would have been a huge outcry from many people about how dreadful it was and how we must do something about it. In some ways, one could start to construct the argument that it is a sign of the failure of the entire process of franchising and privatisation over nearly 20 years that we are in this position. We were promised that the system would be innovative and cheaper but that just does not seem to have happened. We should be having some serious discussions about why.
The Transport Committee has considered the problem and tried to analyse some of the reasons behind it. We have heard a number of suggestions about how we could achieve the efficiencies identified by McNulty. He considered staffing, closing ticket offices and cutting the number of train guards, but as the Transport Committee rightly said, safety issues must be considered, including people feeling safe when they travel. We do not want to compromise safety and we must ask what savings can be realised in such circumstances, particularly as McNulty was looking for substantial savings of £3.5 billion.
McNulty also suggested closer working between Network Rail and individual train operating companies—what is now called alliancing in the language of transport. A key driver of increased cost since privatisation has been the fragmentation of the industry to try to create competition when it is inherently difficult to do so with the split between track and stations and the operation of trains. The difficulty with alliancing is that it will not—or probably cannot—be rolled out on routes with multiple operators. Network Rail therefore said that from that point of view it does not expect to save much money, so, on that basis, we must ask how it would actually work.
McNulty also mentioned raising income from retail and we discussed that today. There have been changes in places such as the new King’s Cross station and the new St Pancras station. Sometimes, one walks into a station nowadays and wonders whether one is in a station or a shopping centre. It can even be quite difficult to find out where the platforms are, and people get quite disoriented. Whether such an approach is feasible anywhere other than in the big mainline stations must be considered with some degree of caution. Much of people’s travelling life is spent in relatively small stations in small places and people want to get there, get on their train and go, rather than have a shopping experience. One reason it works for the airlines is that people are required to arrive at airports very early and have a lot of time on their hands. In my view, one of the advantages of rail travel is that passengers are not required to spend a lot of time waiting. That is not to say that the idea is not a good one, to some extent, but the notion that we can achieve huge income and therefore efficiencies through such an approach is doubtful.
The Transport Committee states that if the efficiencies are not achieved, we must go back and consider the whole way in which the industry is structured to see whether that is the best way to make the railways work for us. If the McNulty proposals that the Government are working through do not achieve those savings, we will still have a serious problem ahead.
It is good that we are here. Our predecessors 40 years ago would have been surprised to find that we are in the Chamber discussing the railways with such enthusiasm, as they thought they were becoming a rather niche interest. However, there is a question about whether we are in this position because of privatisation, as some speakers have suggested, or whether we have seen a change all over Europe in how people travel. The initial attractions of car transport have diminished, particularly in a crowded island such as Britain. It must be said that much of the investment that has gone in since privatisation and that is still going in is from the public sector. It is not coming from the private operators, regardless of what was promised, so we as taxpayers are subsidising the railways. Perhaps that is the right thing to do, but whether it is the right thing to do through privatisation, so that we are, in effect, subsidising the profits made—where they are made—is a completely different question. As my hon. Friend the Member for Luton North (Kelvin Hopkins) said, we must not confuse correlation with causation.
Lilian Greenwood (Nottingham South) (Lab)
I congratulate the Transport Select Committee on the “Rail 2020” report, which combines an informative overview of the rail industry with some acute analysis of the challenges it faces. It certainly provoked a thoughtful debate this afternoon, albeit not necessarily one that involved a high degree of consensus. I suspect that the challenges to franchising in particular have deepened since the report was published last year. If the Committee were to repeat its inquiry today, perhaps its conclusions would be even stronger.
When the McNulty report was published in 2011, it was widely acknowledged that the rail industry was in need of reform. Privatisation had left us with a fragmented and opaque system—a system that incurred massive costs and offered little accountability for the money being spent. Contrary to what the architects of privatisation had promised, subsidy had increased in real terms since the mid-1990s—
Lilian Greenwood
And passengers faced some of the highest fares in Europe, as well as often bewildering pricing structures. The Minister says, “Under your Government” from a sedentary position, but that is precisely why we commissioned McNulty to look at how to achieve efficiencies.
The Committee’s recommendations on financial transparency, fares and ticketing reform and devolution were welcome, but implementation has been delayed by a Department that seems to have been overtaken by problems of its own creation. In the past year, we have witnessed the collapse of the franchising system, which has cost the taxpayer at least £55 million. Those are the direct costs; that figure does not cover the fall in orders that is hurting the supply chain or the uncertainty that still hangs over the industry, nor does it reflect the damage that has been inflicted on the Government’s own efficiency plans—both points well highlighted by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman).
The Government intend to find £3.5 billion of industry cost reductions by 2019. An annexe to the “Rail 2020” report states that while
“Some of the savings are already in Network Rail’s plans, most of the rest have to be secured by passenger train operators and their suppliers…via the next generation of franchises.”
Does the Minister accept that analysis? If he does, what does he believe the cost to the taxpayer will be in deferred efficiencies, owing to the much extended delays to the franchising programme?
Against that background, Ministers have taken the politically motivated decision to make the privatisation of East Coast their top priority. At the same time as they are agreeing lucrative extensions for private operators, at great cost to the taxpayer—for example, it was recently reported in the trade press that the c2c contract extension came in £17 million over budget—for ideological reasons the Government are disrupting the one stable part of the network. Since the last private operator walked away, East Coast has returned £640 million to the taxpayer and invested £40 million in the service; it makes the second highest contribution of any operator to the Treasury; and it has significantly improved passenger services.
East Coast provides an interesting test of the Government’s commitment to openness. Despite Ministers’ stated intention to improve transparency, they are trying to have it both ways when it comes to East Coast. The Government cannot both laud the Office of Rail Regulation’s breakdown of the industry’s finances, as they did in the formal response to the “Rail 2020” report, and dismiss the figures that show East Coast to be most efficient operator. It is simply not credible.
The Government have even invented a new measure to bolster the comparison between Virgin Trains’ and East Coast’s premium payments while conveniently ignoring subsidy going the other way. As the net payment figures show, East Coast comfortably paid more to the Treasury over the past three years, but Ministers have tried to give the opposite impression. It is not policy led by evidence—it is just the opposite—from a Government determined to push through privatisation, which will not benefit the railways or passengers.
We have seen no progress on fares and ticketing either. The Government’s review was originally due to be published in May, but we are now told that it will be published at some point in the summer. The Minister will surely appreciate the irony when he next lectures East Coast on punctuality. I hope that the review will now bring forward serious proposals for reform, because at present passengers often find it difficult to secure the cheapest tickets, especially from automatic ticketing machines. The definition of peak and off-peak is not always obvious, and as a consequence some passengers find themselves with huge bills through no fault of their own.
Passengers also rightly feel aggrieved when they have to use a replacement bus service but are not entitled to compensation, regardless of the inconvenience to their journey. Those are the sorts of issues that the fares and ticketing review should be looking at. The Transport Committee was right to call for so-called super-peak tickets to be ruled out. They would penalise those commuters who have no choice but to travel at peak times. I urge the Minister to go further than he had done previously and rule out granting train operating companies the right to redefine peak time periods. I also ask him to give the House a categorical assurance that operators will not be given additional powers to price commuters out of peak time periods.
Ben Gummer
There is a technical problem with the hon. Lady’s suggestion. Currently, with the Government setting peak times, we end up with the ridiculous situation that people leaving London to go to Ipswich, Norwich or Chelmsford in the morning are on empty trains and paying £74, but if they are going into London they are of course on packed trains and paying £74. The Government have set the peak time rules for many years, so the franchisee cannot make an elastic arrangement to encourage people to take the train when it is empty and discourage them when it is full. I suggest that that is in the commuter’s interests.
Lilian Greenwood
I suggest that the people who stand to suffer as a result of that are those who have no choice about when to travel. If people have a choice, they will not travel on peak trains. Those who have no choice will be stung by having to pay whatever price is asked.
As the McNulty report put it, we have a fare structure that is complex, often appears illogical and is hard for the uninitiated, or even the initiated, to understand. The answer is not new, unreasonable super-peak fares. We fully support the development of smart ticketing schemes, a policy closely linked to the devolution agenda. Transport for London and Centro have demonstrated how strong local transport authorities can successfully introduce smart card schemes, making rail and other forms of public transport more convenient for everyday use. We believe that regional partnerships are best placed to introduce new schemes, drive forward integration with other modes of transport and decide their own priorities for developing local rail services.
However, the pattern of dither and delay from the Department for Transport is also affecting the devolution agenda. Were it not for its extensions to the Northern Rail and TransPennine franchises, we could have seen an earlier decision on devolution, with the new settlement starting next year. We want to see an ambitious model of genuine devolution, learning from the success of continental models, that can be extended to other areas, including the west midlands.
Unfortunately, we have already seen some reductions in local facilities. Although they are not as high profile as the cuts to passenger services we have seen in the past, we are concerned about ticket office closures, especially as some seem to be going ahead by stealth, using the McNulty review as cover. Last year, leaked e-mails from the Department for Transport revealed that Ministers had decided to approve closures and let train operating companies take the blame. That was an unacceptable way for closure decisions to be taken. I hope that Ministers will take note of the Campaign for Better Transport’s “Going Local” report, which drew together evidence from London Overground and Merseyrail. The evidence suggested that staffed stations and ticket offices led to increased passenger numbers, lower levels of fare evasion and increased passenger satisfaction.
There are simply better ways to save money than closing ticket offices. Of course we need more efficient railways. Network Rail has delivered substantial efficiency savings since Labour ended the disaster that was Railtrack, and the rolling programme of electrification, which the last Government committed to, will help reduce operating costs.
However, as McNulty helps to establish, although technology can bring about savings, the greatest challenge is fragmentation. Privatisation has left us a system with a 40% efficiency gap as measured against European comparators. Fragmentation has built in additional unnecessary costs at every level and we need a serious debate about how they can be addressed. On the Government’s response, it is too early to quantify properly the impact of alliancing and there are real concerns over the accountability of the Rail Delivery Group, which must not be used as an excuse to diminish ministerial responsibility.
We must also be alive to the danger that through alliancing, non-dominant operators will be excluded from decision making. That is especially true in the case of freight operators—a danger acknowledged by the hon. Member for Milton Keynes South (Iain Stewart). If there are increased disputes over access rights, that will only generate a higher administrative burden for the regulator.
To conclude, I should say that the Government have tied themselves so closely to the stalled franchising system that they have left the industry in stasis. Awards are being extended for up to four years at a massive cost to the taxpayer, on top of the £51 million net payment that the Government made to operators in the last financial year. The paralysis caused by the collapse of franchising has hit the supply chain’s order books, threatening jobs and skills. Ministers have made restoring franchising a point of political pride, even to the extent of privatising the successful east coast service, instead of seriously examining alternatives. That is what Labour is committed to doing, and why we are conducting a thorough review of the rail industry that is not hampered by ideological baggage.
The “Rail 2020” report made some useful recommendations for reform, but it also noted that there could be a case for structural changes. In the light of the franchising fiasco, we should seriously examine the alternatives, instead of remaining ideologically wedded to the failed models of the past.
The Minister of State, Department for Transport (Mr Simon Burns)
I begin by adding my congratulations to the Transport Committee on its important report, which comes up with a number of important and interesting recommendations. As the hon. Member for Liverpool, Riverside (Mrs Ellman), the Committee Chair, will know, the Government have responded in full to the recommendations, and on a number of issues we have considerable sympathy and agreement with them.
Like the Select Committee’s, the Government’s vision is for a transport system that is an engine for economic growth—one that is environmentally sustainable and promotes quality of life in our communities. Rail offers commuters a safe and reliable route to work. It facilitates business and leisure travel, connects communities with their public services and workplaces and transports millions of tonnes of freight around the country, relieving congestion on our roads and bringing huge environmental benefits.
It is easy for some to criticise our railways, but as the Transport Committee itself noted:
“In many ways the railway has been a success in recent years.”
We have made tremendous progress. As hon. Members, including my hon. Friend the Member for Milton Keynes South (Iain Stewart), have said, since privatisation passenger journeys have almost doubled—from 735 million in 1994-95, to more than 1.5 billion in 2012-13. That point was made by the hon. Member for Liverpool, Riverside in her introductory comments. There are some 4,000 more services a day on our railways than in the mid-1990s. Rail freight, which the hon. Lady also mentioned, has grown by over 60%, with traffic reaching over 21.5 billion net tonne km in 2012-13.
With an ageing network built in Victorian times, coupled with underinvestment over a number of decades by successive Governments, operating today’s railway is a task of colossal proportions, but we are getting better at it. GB Railfreight has been ranked as the EU’s most improved rail network. Passenger satisfaction is up by about 10 percentage points in the past decade. Punctuality is up by about 12 percentage points, with just under 91% of trains arriving on time last year compared with just over 79% in 2002-03. That rather meets the point made by my hon. Friends the Members for Milton Keynes South and for Ipswich (Ben Gummer)—that the performance and the quality of service today is better than it was under British Rail, to which the hon. Member for Luton North (Kelvin Hopkins) is wedded, as we have now heard on at least two occasions in the past week. As other hon. Members have said, we are among the safest railways in the world.
Just running today’s railways is not an option. We have the fastest growth rate of any of the major European railways so the Government have committed over £16 billion to running and expanding the network between 2014 and 2019. We are providing capacity for an extra 140,000 commuter journeys into our major cities during the morning peak. Schemes such as Crossrail, Thameslink and the northern hub cross-Manchester link will have a transforming effect. They will increase capacity and connectivity and reduce journey times. [Interruption.] It is interesting that the hon. Member for North Durham (Mr Jones) is chuntering—I think that is the right word—from the Back Benches. He seems to be able to get away with it in a way that others cannot.
Mr Speaker
Order. The Minister will resume his seat. Let me be clear and explicit. There is a saying about pots and kettles. It is a point so obvious that I think it is within the comprehension of the Minister of State, who should now continue uninterrupted with his speech.
Mr Burns
Improved rail links to major ports and airports will support inward investment, trade and connectivity.
Electrification will provide faster, more reliable services on the midland and great western main lines and elsewhere. We have confirmed funding for the completion of electrification of over 324 route miles and added a new requirement for a further 537 route miles. That means that we are funding electrification of 11% of all route miles in England and Wales. Our programme contrasts with the approach of the previous Administration, under whom fewer than 10 miles of track was electrified during their 13 years in power. By 2020, about three quarters of passenger miles travelled in England and Wales will be on electric trains, compared with just 58% today.
We have provided a £300 million fund to improve passenger journey times. There is £200 million for stations across England, including £100 million to support accessibility. A further £200 million will build a better network for freight.
Kelvin Hopkins
I am delighted about the massive investment going into railways; I am sure we all support that. Does the Minister agree, however, that it is important to preserve the existing old corridors that could be used for rail travel in future? Will he undertake to make sure that the Woodhead tunnel in particular remains a possibility for rail travel in future?
Mr Burns
I have considerable sympathy with what the hon. Gentleman says. It is important that we consider opening new railway lines or reopening lines that have been removed but whose beds remain in place where there is demand and need for them and if the business case backs it up. Tunnels are an important and topical issue that has come across my desk and we are looking at it very carefully.
Iain Stewart
May I underline the importance of keeping old route lines open or free for potential reopening? Work on the western section of the east-west rail project has been very easy because the line is still there, but there are difficulties on the Bedford to Cambridge and East Anglia section because part of that track has been built on.
Mr Burns
My hon. Friend makes an extremely valid point. We have to learn from some of the mistakes of the past and what happened to the railways post-Beeching. I accept what my hon. Friend says.
We are well on the way to delivering a new high-speed railway for Britain, bringing extra capacity, faster journeys and better services and changing our economic geography. I am sorry that the hon. Member for North Durham is not as enthusiastic about this exciting way of improving connectivity, journey times and increasing capacity. [Interruption.] The hon. Gentleman is chuntering, but I am surprised—
Mr Speaker
Order. Actually, the hon. Gentleman was not chuntering. There are many Members who do chunter in the House, in some cases extremely noisily, and an exemplar of that approach is the right hon. Gentleman. I suggest that it would be in his own best interests, of which he is not always the most appropriate guardian, that further references to chuntering by him might seem singularly inappropriate. Continue.
Mr Burns
Well, let’s move on.
I was just saying that I am surprised and disappointed that the hon. Member for North Durham does not share the enthusiasm of his colleague the Leader of the Opposition for the new high-speed railway. I hope that he will be reassured, however, that rail is thriving. It makes a vital contribution to the UK’s economic competitiveness and the Government’s investment ensures that that will continue.
The Government recognise, however, that we need to work to make rail even better. As recent surveys have shown, although passenger satisfaction is high on average across Great Britain, it can vary significantly across franchises, and although nine out of every 10 trains are running on time, with historically high levels of performance, punctuality is not yet as good as it should be, particularly on long-distance services, but also on London, south-east and regional services. Finally, the railway still costs more than it should.
We fully understand the importance of achieving the McNulty savings, which have been mentioned by the hon. Member for Liverpool, Riverside and others. Our railways must become more efficient and financially sustainable. It is crucial that we ease the pressure of fares on hard-working families and reduce the burden on taxpayers, which is another issue of concern, not only to members of the Transport Committee, but to other hon. Members who have taken part in this debate.
That was the challenge in the Government’s rail Command Paper: how to reduce the costs of running the railway while keeping the passengers at the heart of everything we do. We are making progress. Network Rail will have delivered 40% efficiencies over 2004-2014 and the regulator recently announced a new 20% target for 2019. Further efficiencies will be made through the programme of franchising competitions and the initiatives of the Rail Delivery Group. The key message is that aligning incentives between train operators and Network Rail is one of the most important reforms to drive down costs and bring passenger benefits.
Lilian Greenwood
Will the Minister set out how that has been set back by the delays to franchising, which he seems to be glossing over? Questions have been asked about whether his Department is up to the task.
Mr Speaker
Order. The Minister of State is a slow learner, but he must try to grasp the point that it ill behoves a right hon. Gentleman who regularly shouts, hollers, chunters and accuses other people of all sorts of things from a sedentary position to make something of the fact that somebody else mutters from a sedentary position. I gently advise the Minister to raise his game and operate at the level of events. Minister of State, continue with the speech and the reading thereof.
Mr Burns
As I was saying in answer to the hon. Member for Nottingham South (Lilian Greenwood), the Secretary of State made it clear last September that what happened with regard to the west coast main line was unacceptable and apologised for it. Even more importantly, he set up the Brown inquiry and the Laidlaw inquiry. I will not rehearse what they did, but the Brown inquiry came up with recommendations to ensure that we learn from that mistake and that it never happens again. We have a new franchise timetable, in keeping with the recommendations of that report, to ensure that we minimise the opportunities for that mistake to happen again.
Mr Burns
I must make progress, because it is almost time for me to finish.
The Rail Delivery Group is showing how collaborative working across the rail industry can secure improvements in asset programme and supply chain management. We are working through our franchise programme to facilitate regional partnership working arrangements and alliances between train operators and Network Rail, as has been mentioned by a number of hon. Members.
Mr Burns
No, because I am running out of time.
Those arrangements could involve joint working to improve performance and planning for engineering works or to reducing delays and disruption for passengers. Integrated control centres can deliver smoother and more efficient network operations.
The Rail Delivery Group brings together Network Rail, freight operators and passenger train operators. It provides leadership for the industry, and offers a coherent and focused response to the investment and operational challenges laid down by the Government. Network Rail is enhancing its accountability with a new transparency scheme to publish more information and data that are of interest to the public.
Mr Burns
There is not plenty of time. I am not speaking until 7 o’clock because the hon. Member for Liverpool, Riverside would like to make a brief winding-up speech.
Network Rail has appointed a public interest director to articulate taxpayers’ views at the highest levels in the company.
Responding to the Government’s rail Command Paper, the Transport Committee published its report on “Rail 2020” in January this year. As I said earlier, we have welcomed that report and the Select Committee’s support for our strategy, which is focused on making the existing structures and responsibilities in rail work better. We are not throwing everything up in the air and starting again, given the cost and disruption that that would be likely to entail.
We are confident that our strategy can bring rail to the cutting edge of efficiency by 2019. To do so, the industry must take advantage of new technologies by looking to introduce smart ticketing and making ticket machines easier to use. The hon. Member for Nottingham South asked when that will happen. I reaffirm that it will be during the summer. Passengers will continue to be able to get help and advice from a member of staff about buying a ticket when they can currently do so. Train operators must also look at driver-only operations for trains. This is already standard practice on 30% of existing franchise services, including many commuter services in London and Glasgow.
Crucial to the debate about rail is the Department’s role in letting and managing franchises for passenger rail services. This was discussed at length by several hon. Members during the debate. The Government’s firm belief is that franchising gives us the best possible basis for doing what we want to do with rail. The most liberalised railways in Europe have seen the highest growth in the last 15 years, with the UK and Sweden first and second respectively.
The Government are committed to ensuring that we continue to have private sector innovation and experience in our railways. As hon. Members will be aware, in March we announced a new rail franchising programme, covering every rail franchise for the next eight years. It builds on much of the authoritative work undertaken by Richard Brown, as I have said. Supporting our franchising relaunch, we have now published a new guide about how franchising competitions are run. This is information that we want to be generally available and accessible to all. It will give certainty to the market and to suppliers throughout the industry and support major investment in our rail network.
To grow a railway that will support passengers and our economy, we need that railway to be financially sustainable. Our rail strategy aims to achieve that, while putting passengers at its heart.
Mrs Ellman
I thank hon. Members for their varied contributions in this constructive debate. Underlying all the contributions was support for the continued expansion of the railway. Privatisation separated both ownership and operation of train and track, and it is ironic that the solution being put forward now to deal with some of the problems that rail services face is to enable them to work more closely together.
I listened carefully to the Minister’s reply to the questions I put, but I have a couple of other points to put to him. In relation to franchises and securing passengers’ interests, we need to know more about what weighting will be given to securing those interests when assessing the award of franchises in the future. I asked the Minister to say what the financial implications would be of the cumulative 26-year delay in awarding franchises, but I did not hear a response. I hope that we will be able to get one, as it has implications for the industry as well as for the Department. I am pleased to hear that the fares and ticketing review will be published shortly. I note that it will be “during the summer”: I hope that will be sooner rather than later.
Those are all important issues and it is essential that they are resolved to enable the railway to continue to expand and grow. We need proper franchises that reflect value for money for passengers and the taxpayer, and we need to ensure that fares are fair and not unaffordable. We must not price people off the railway.
I know that the Government will produce more information about how the franchise system will develop in the future, and we look forward to that. The Committee will continue to consider all these issues, which are all ongoing and extremely important. Strong leadership is required to resolve them, from both the industry and the Department. The aim of the Committee’s work in this area will be to produce a more effective and efficient rail service. Rail is already popular, but it can be more efficient and fares can be brought down—at least, the rate of fare increases can be stopped.
I hope that this debate, and the range of views we have heard, will help Ministers to address those issues, and I hope that we will secure more effective leadership from both the Department and the industry.
Question deferred (Standing Order No. 54).
estimates 2013-14
Thomas Docherty (Dunfermline and West Fife) (Lab)
On a point of order, Mr Speaker. This afternoon we saw bizarre scenes where the Secretary of State did not have information in front of him about the future of Territorial Army bases. You will recall that I inquired about the future of Dunfermline TA, which was listed for closure. The Secretary of State confirmed that that TA was closing and that they would have to travel to an adjoining community. I have, late today, received a letter from the Minister for the Armed Forces, the right hon. Member for South Leicestershire (Mr Robathan), saying that what will actually happen is that they will cross a road. Given that this has caused huge distress today in Dunfermline, is there anything you can do to encourage the Ministry of Defence to get its stories accurate and straight, and to encourage Ministers to come back to the House at the earliest opportunity to clear up this whole sorry mess?
Mr Speaker
The responsibility for clarity of statement rests with every Member of the House. Obviously, where a ministerial statement is concerned, one would hope that it would be both accurate and clear. It is not for me to require a Minister to return to the House on this specific matter. However, the hon. Gentleman, through his point of order, has drawn attention to the factual situation, which I rather imagine he will communicate externally. Whether he wishes to communicate with others, including those in the Ministry of Defence, in the hope that they will wish to communicate with organs of journalistic expression I know not, but the hon. Gentleman is doing his best to advance his case.
Thomas Docherty
Further to that point of order, Mr Speaker. You will also recall that the Secretary of State undertook to write to both you and me about the Kilmarnock confusion today. I have checked the letter board and my e-mails, and I have had no such communication. I do not know whether you have received any communication, but the Scottish media have been briefed on the situation. I am curious to know whether the Secretary of State bothered to contact you, as he undertook to do so today.
Mr Speaker
I have not been contacted by the Secretary of State in the course of the afternoon. What I would like to say to the hon. Gentleman is that I stand by the remarks that I made, and which I think were echoed by others in respect of the handling of this matter today. It was clearly very unsatisfactory. If the hon. Gentleman is in his place tomorrow at business questions, and if his senior and responsible position in the team does not preclude him from participation in business questions, he may find that there are words uttered that will assuage even his very considerably wounded feelings on this matter. I think we will leave it there for now.
Business without Debate
Business of the House
Jamie Still Campaign
Greg Mulholland (Leeds North West) (LD)
Earlier today I accompanied the family of Jamie Still—Jamie’s mother Karen, father Mike, sister Rebecca and grandfather Peter—to present a 13,000-strong petition on behalf of the Jamie Still campaign. I want briefly to pay tribute to their courage and especially to the work of Jamie’s sister Rebecca, who has shown remarkable courage in the face of the tragic and unnecessary loss of her brother.
The petition states:
The Petition of a resident of the UK,
Declares that the Petitioner believes that the sentences for drink driving need to be tougher in the UK; in one case the brother of Rebecca Still was knocked down and killed by a drunk driver whilst he was on the pavement with his friends; further that the Petitioner believes that the driver did not lose his licence until 8 months later and did not go to prison until 9 months later; further that the driver received 4 years in prison but may only serve 2 years. The Petitioner would like zero tolerance for drink drivers so that they lose their license earlier and so that sentences are longer.
The Petitioner therefore requests that the House of Commons urges the Government to amend legislation so as to be tougher on drink driving.
And the Petitioner remains, etc.
[P001192]
Benefits and Food Banks (County Durham)
(11 years, 4 months ago)
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Phil Wilson (Sedgefield) (Lab)
I would like to start this debate with two quotations. The first is as follows:
“Relief varied…theoretically graduated according to the recipient’s power of earning his own living. As usual, the deserving poor were crowded out by the idle and worthless.”
The second quotation refers to
“the shift-worker, leaving home in the dark hours of early morning, who looks up at the closed blinds of the next-door neighbour sleeping off a life on benefits”.
What do they have in common? Both refer to the deserving and undeserving poor; both are divisive. They appeal to emotion and prejudice, but not reason. The worker starting the night shift will probably be having to do so because he is on a low income and needs the money, while the person asleep behind the blinds will be the millionaire, dreaming of how to spend his tax cut.
Those two quotations are from over a century apart. The first is from “A History of the County of Durham”, published in 1907, and can be found on page 245 of volume II of the series. The second quotation is from the Chancellor’s 2012 Conservative party conference speech. In some quarters, times change but everything stays the same. The quotation from 1907 ends with these words:
“some of the towns and more populous parts found it advisable to have workhouses.”
As we approach the middle years of the second decade of the 21st century, we do not have workhouses, but we do have a growing network of food banks.
I want to congratulate and thank all the volunteers who work in food banks, especially in County Durham, many of whom I have known for a long time and can proudly count among my friends. I wanted to hold this debate to raise what I believe to be a growing crisis in our communities. It is a hidden crisis, because the recipients of food parcels do not, in the main, want to talk about their needs. They are embarrassed and can be cowed by their experiences—they do not appear on “The Jeremy Kyle Show”. How can we be surprised that they feel that way, when their Government refer to them as shirkers and demonise their predicament, even though almost 20% of those who use food banks in County Durham are in work?
I have no doubt that the Minister will say in his response that the number of people using food banks in 2005-06 stood, according to the Trussell Trust, at about 2,800 and rose to 40,000 four years later. The Minister may well talk about it now, but he did not talk about it then. I do not know whether he will mention that, by 2012-13, that figure had grown to a staggering 350,000—up from 128,000 the year before. This figure does not include independent food banks, of which there are a growing number. A report produced for Church Action on Poverty and Oxfam by Niall Cooper and Sarah Dumpleton is entitled “Walking the breadline”, and it puts the number at nearly 500,000.
The Minister may also say that the previous Labour Government refused to allow Jobcentre Plus to refer people to the local food bank, and that this Government have reversed that decision. I will say two things on that. First, when Labour was in power there were only about 50 food banks—50 too many, in my book—but today there are more than 300, so there will be a better chance of finding a food bank today than back then, which is a sad reflection on 21st-century Britain. Secondly, I will take no lessons from the Conservative party about Labour’s record on poverty: we introduced the minimum wage and the Conservatives opposed it; and we introduced tax credits and Sure Start. Those are all things to be proud of, and they were all opposed by the Conservatives.
This Government are referring people in need to food banks because there are more people in need and there are more food banks to refer them to. In 2011, the Trussell Trust had one food bank in the north-east, located in Durham—in the Labour years there were no food banks in the north-east of England—and in that year, food was distributed to 741 people. Today, there are 10 major centres in the north-east. In the previous financial year, Trussell food banks distributed crisis help to 10,500 people. In the first three months of this financial year, they have provided help to 7,100.
Durham Christian Partnership runs the food banks in Durham. The main distribution centre is in Durham city. There are many more in the county now acting as satellite food banks to the main food bank in the city. There are three in my constituency: at St Alban church in Trimdon Grange, at Trimdon village hall and at St Clare’s church in Newton Aycliffe. Three more are to open in Deaf Hill, Fishburn, and Sedgefield in the coming months.
Jim Shannon (Strangford) (DUP)
What the hon. Gentleman says about Durham is replicated across the whole of the United Kingdom; it is the same in my constituency. People who are perhaps seen to be well-off or middle class are also using the food banks, because they do not have enough wages. Does the hon. Gentleman feel that the initiative by the churches and the faith communities has been the real goer for making the food banks work? It is they who have driven it, along with the local government, and perhaps local government could do more alongside the faith communities to make it happen for more people.
Phil Wilson
That is a valid point, and we should pay tribute to the churches up and down the country that are now providing food to half a million of our fellow citizens in Northern Ireland, Scotland, Wales and England.
I would also like to mention the growth of independent food banks. One is run by the Excel church in Newton Aycliffe—known as Excel Local—and it has fed over 1,000 people in the area over the past year or so. In September 2011, the Durham Christian Partnership distributed 42 kg of food, helping 18 people. The latest figures for May this year show that the network of 12 food banks in County Durham has fed 934 people, providing 300-plus meals a day. This figure is increasing month on month. In total, the partnership has distributed in the region of 70,000 kg of food.
Lord Freud, the Work and Pensions Minister has made headlines today when he said that the demand for food banks
“has nothing to do with benefits squeeze”.
I rebut those comments by quoting from an e-mail I received from Peter MacLellan who runs the Durham Christian Partnership food bank network. He says that
“from the distribution points and also from calls received in the office that the changes to crisis loans and the other welfare changes have a major impact. Looking at the reasons why people are referred to the food bank up to the end of March 2013 out of 6620 people 18% came because of benefit changes and 34% due benefit delays. For April and May together, of 1,800 fed 22% came because of benefit changes and 40% due to benefit delays. So combining benefit issues the percentage has grown from 52% to 62% which I would regard as a significant rise.”
He goes on:
“I am especially concerned that there seems to be an issue with delays in claim processing and I’m not sure whether this is a local issue or national one or how the benefit claim processing centres are performing against their targets.”
Can the Minister say why there seems to be an issue with delays to benefits?
Mr Kevan Jones (North Durham) (Lab)
I congratulate my hon. Friend on securing this debate. Does he think it an absolute disgrace that in 2013 not only are people relying on food banks, but in County Durham children are turning up at school hungry?
Phil Wilson
My hon. Friend—a fellow Durham MP—and I both know what is happening in our schools now. Children are turning up hungry, and we know of cases where teachers have paid for food for the children out of their own pockets. That is a crucial issue in areas such as ours.
Will the Minister tell the House whether there are problems with benefit claim processing centres hitting their targets? If there are not, why do data from food banks prove there is a problem? There seems to be a huge difference between what independent charities are saying and what the Government are saying. Other worrying statistics show that just under 20% of those using food banks are in work and use them because their income does not cover the cost of electricity, rent and food, and something has to give. More significantly, a third of recipients are children. Food banks now claim that demand is outstripping supply, and the welfare reforms have yet to be implemented.
Durham county council estimates that 119,600 households in County Durham— just over half of all households in the county—will be affected by universal credit when it is introduced. The council also estimates that changes to benefits and tax credits will see each household lose £680 a year, and that £151 million will be taken out of the local economy. Around 8,500 people in so-called under-occupied properties will be affected by the bedroom tax. That is an insidious measure which, anecdotally, is starting to be seen as another reason people are using food banks.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
In Tees Valley, which is partly covered by my hon. Friend’s constituency, we are aware that unemployment for 16 to 24-year-olds is above 32%, long-term claimants of jobseeker’s allowance have more than doubled since mid-2010, and Middlesbrough council estimates that 10,000 children are now living in poverty. We also know today from ITV news in the north-east that £500,000 in rent arrears has not been paid due to the bedroom tax. Does my hon. Friend think that those four factors are contributing to the rising use of food banks?
Phil Wilson
Of course they are. Some people say it is an issue of supply and that because there are more food banks, more people are using them, but there is definitely demand out there. The statistics being quoted have massive consequences. No one is denying that welfare provision needs reform, but whatever any Government do in that regard, they must be prepared to face the consequences. When the welfare bill is increased by £20 billion, it is obvious that the reforms are not working. The increase in the number of food banks proves that the holes in the safety net are getting bigger.
The key issue for people using food banks seems to be the delay in the receipt of benefits. Yesterday, in the other place Lord Freud said:
“The Trussell Trust has said that one reason why people have come to it is benefit delays. I checked through the figures and in the period of that increase the number of delays that we had had reduced.”—[Official Report, House of Lords, 2 July 2013; Vol. 746, c. 1072.]
Whoever we talk to in the food bank movement, they say that delays to benefits are the main reason people are referred to their centres. Surely it is not for food banks to be the stop-gap because the system is not working. Will the Minister say what his Department is doing to resolve that issue?
What kind of people attend food banks? They include the mother who lost her job 16 months ago and is distressed that her nine-year-old child has not eaten fresh fruit or vegetables for most of that period. Another young mother did not have any food in the house and was worried about how she would feed her children when they returned home from school that day. There were many more examples from all over Durham and indeed the UK—all harrowing and all tragic.
Olivier De Schutter, the UN special rapporteur on the right to food stated in an article in The Guardian on 27 February:
“Food banks should not be seen as a “normal” part of national safety nets…Food banks depend on donations, and they are often run by volunteers: they are charity-based, not rights-based, and they should not be seen as a substitute for the robust social safety nets to which each individual has a right.”
I agree with him. I also agree with him when he says that although society might not have completely broken down because of the significant increase in the number of food banks, it is fair to say that the increase reveals where society is broken. As I have said, the safety net might be there, but the holes in it are getting bigger, allowing more people to fall through.
In the other place yesterday, in reply to a question from Baroness Howarth of Breckland about the monitoring of food banks, Lord Freud said:
“It is not the job of the DWP to monitor this provision, which is done on a charitable basis.”—[Official Report, House of Lords, 2 July 2013; Vol. 746, c. 1073.]
I would respectfully say to the Minister that, as there are now 500,000 of our fellow citizens using food banks, I believe the time has come to monitor food bank usage. The increase could be down to supply, but it is certainly down to demand. Why is it that the three main reasons for people using food banks are delay in benefit receipt, benefit changes and low incomes? Domestic violence and homelessness are other reasons for usage. Surely a responsible Government would start revising their approach to welfare reform by using the data acquired from food banks to help to close the holes in the welfare safety net that are so obviously opening up.
The Government state that one reason for the increase in the number of food banks is that Jobcentre Plus now refers people on to them. However, the House of Commons Library standard note on food banks and food poverty states, on page 13:
“While increasing awareness of the existence of food banks may well be a factor in explaining recent growth in usage...the role of Jobcentre Plus in this regard is difficult to quantify since it does not collate statistics on food bank referrals.”
In addition, referrals from Jobcentre Plus did not start until September 2011, by which time the number of people being fed by food banks was increasing from about 60,000 in the previous year to 128,000 by the end of 2011.
Perhaps it would be in the Minister’s own interest to start collecting data; it would certainly be in the interest of those being fed by food banks if the Government were to look at what we can do to close the holes in the safety net. It is not only me saying that; the UN special rapporteur on the right to food believes so too. He said in the same article that I quoted earlier:
“The lesson of the current upsurge in soup kitchens and food pantries is not that we need more food banks or fewer food banks, it is everything else—the social safety net above and around it—that needs to change, and the direction of that change can be oriented by the lessons that food banks, and the stories of their clientele, teach us.”
The Government must not be allowed to renege on their responsibilities because charities are left to pick up the pieces. My request of the Minister is to learn from the food bank phenomenon, because it is not going to go away. It is only going to get bigger. If we are not careful, the social safety net built up over the decades will be dismantled and put away somewhere as a memory.
I would also like to hear the Minister’s response to the call from Church Action on Poverty and Oxfam in their report “Walking the breadline” for the Government to set up an inquiry by the House of Commons Work and Pensions Select Committee into any relationship between benefit changes and food poverty. Would the Minister welcome such an inquiry? The report also called for regular publication by the DWP of data on benefit delays, errors and sanctions, for monitoring by the DWP of the effect of universal credit on food poverty, and for the recording and monitoring of food bank referrals made by Government agencies. I know that the Minister will deny this, but I believe that, if we are not careful, food banks will become a part of the welfare system—and that it will happen by default.
Finally, I would like to thank the volunteers who make the food bank network work. They include Peter MacLellan, who co-ordinates the food banks in County Durham for the Durham Christian Partnership, and Ernie Temple who runs the food bank at St Clare’s church in Newton Aycliffe. I also want to thank Rachael Mawston and her team at Excel Local for all the hard work they put into running their food bank, and Councillor Peter Brookes, Michael King and Rev. Michael Gobbett of Sedgefield Churches Together, who run the food banks in the Trimdons and who are looking to expand into Sedgefield, Fishburn and Deaf Hill. I am sure that the Minister will applaud their hard work. There will always be those who fall through the safety net, however well constructed it might be, and we need such people to prevent those most in need from falling through the net on to the ground. I believe that those people now have their hands full.
The Minister of State, Department for Work and Pensions (Mr Mark Hoban)
I congratulate the hon. Member for Sedgefield (Phil Wilson) on securing the debate.
I believe that, in the long run, the process of welfare reform on which we have embarked will enable more people in County Durham to find work, and will help those who are in work but on low incomes. The hon. Gentleman implied that Durham county council was fearful of universal credit, but I believe that the council should welcome the opportunity that it presents. Our intervention and support will encourage and help people to move up the earnings scale.
Mr Hoban
I shall return to the subject of jobs shortly.
My Department has been asked a number of questions about food banks in recent weeks, and this evening I have listened to what the hon. Member for Sedgefield has said about constituents of his who make use of them. I hope he will be reassured to know that we do not think that they form part of the welfare system. We do not measure their use, but we do “signpost” people to them, just as we might direct people to any charity that provides help and support. I should add, however, that we know from the Trussell Trust’s own figures that only 2% of people say that they were directed to a food bank by Jobcentre Plus.
Under the current benefits system, it is not obvious to people that working will make them better off. The problem lies not with claimants, but with the system. Our reforms will, over time, deliver dynamic benefits as more people are encouraged to work and to increase their earnings. As all the evidence shows, work is the best route out of poverty for individuals and households. Universal credit is a seamless “in and out of work” benefit which will make it easier for people to move into work. Because people should know that work pays and earning more pays more, incentives are built into the system to encourage them to move from low incomes to higher ones. Over the next few months, we shall be identifying ways in which we can help people to increase their earnings and reduce their dependence on the welfare state, thus giving them more dignity and boosting their self-esteem.
Universal credit will make 3 million households better off and will lift a quarter of a million children out of poverty, because we are putting more money into the system. The hon. Gentleman asked about family poverty. Statistics relating to households with below-average incomes show that the number of children in workless poor families has fallen by 100,000 over the past year.
As well as making work pay, however, we must ensure that benefit payments are directed towards those who need them most, that they provide a fair deal for the taxpayer, and that they restore fiscal responsibility to our finances. The reforms that we have introduced are already helping more people to move into work. In the last year alone, there has been a 6% fall in the number of claimants of jobseeker’s allowance in County Durham, and the figure for young people is even better: 14% fewer are claiming the allowance.
The Work programme in County Durham is helping people to find sustained employment. Of the 12,000 who have joined the programme in County Durham, 1,200 have secured jobs, and four out of five of those have remained in work for longer than six months. That demonstrates—here I address the point made by the hon. Member for North Durham (Mr Jones)—that there are jobs there, and that people are staying in employment. We are seeing a break in the pattern of worklessness that persisted under the last Government, who wrote off many of those people.
Let me give an example of what is happening under the Work programme. Wesley McGinn had applied for more than 1,000 jobs since leaving school. His provider worked with him to improve his interview skills and his CV, and helped him to search for jobs that matched his skills and aspirations. Now he is working for Care UK. Wesley has said:
“I'm so glad that Ingeus helped me succeed...I have a good job, I feel I am making a real difference, and I can now pay my own way in life.”
The system that we inherited from the last Government simply wrote people off when they were unfit for work, but in the last two years the number of people in County Durham receiving employment and support allowance and incapacity benefit has fallen by more than 3,000. Some of those people had been receiving incapacity benefit for more than five years. Now, either those people are in work or we are actively helping them to find work rather than writing them off and leaving them stuck on a life of benefits. We are beginning to see real change as a consequence of our reforms.
Mr Jones
The Minister is from County Durham, and presumably knows the area well. I must tell him, however, that when people in my constituency obtain work, it is low-paid work involving short-term contracts. Those people cannot secure the long-term security that they need. For instance, they cannot gain access to credit. The proposal in the autumn statement not to pay jobseeker’s allowance for the first seven days of unemployment will lead to poverty, and people in that position have no savings to fall back on.
Mr Hoban
People who lose their jobs are paid in arrears and the money we are saving by increasing the period from three days to seven is going to be used to provide more support to get more people into work and to get them into work quicker.
The benefit cap is often cited as a cause for referrals. We have decided to cap the total amount people can receive in benefits, and we will restore the incentive for them to move back into work. That is very important. We are working with Jobcentre Plus and local authorities to get people affected by the benefit cap into employment. We have given more money to councils through discretionary housing payments. In County Durham, only 200 households have been affected by the benefit cap, but we will work with those families to get them into employment.
Crisis loans were mentioned, so let me say a bit about the reform of the discretionary social fund and support for short-term financial need. From 1 April this year, locally based provision of crisis loans is being delivered by local authorities in England and the devolved Administrations in Scotland and Wales, because local authorities are best placed to ensure help is targeted at those most in need. Durham county council has delivered support through HAND—Help and Advice Network Durham.
Crisis support is provided in two forms. The first is settlement grants, where the applicant must have applied for a budgeting loan or advance from DWP if they are eligible to do so and have been declined. This aims to help people to remain in the community or move back into the community after a period in supported or unsettled accommodation. Awards are only available for items such as beds, bedding, furniture, white goods and kitchen equipment. The second is daily living expenses, to help to meet immediate short-term needs for goods or services that arise because of a disaster or unforeseen circumstances. Awards are available only for food, baby consumables, clothing, heating and travel, and for a maximum of seven days’ support. At a meeting last week County Durham local authority confirmed it was receiving about 50 to 60 applications a week, much less than the 250 to 300 per week it had anticipated. National provision is also available in the form of advances of benefit delivered by DWP for those awaiting first payment of benefit.
Provision is therefore available for those who have had a delay. The hon. Member for Sedgefield might want to ask Durham county council why it thinks it is getting far fewer applications for support than it expected.
Phil Wilson
I am still waiting for the Minister to get to the main point of my comments. What he is saying is all very well, but there are still half a million people using food banks for three main reasons, and other reasons as well. Are the Government going to do any analysis? Are they going to look at why people are using food banks, to see whether there is any way they can close the holes in the safety net that people are falling through? We should continue to reform welfare, so it is the state that is doing this, not charities.
Mr Hoban
We are making reforms to welfare. The hon. Gentleman raised the issue of people on low incomes using food banks, and I am saying that we are introducing universal credit, which will support people on low incomes and increase their earnings. The Department for Environment, Food and Rural Affairs is doing a review of food aid. That is in the public domain and it will be reporting shortly.
The hon. Gentleman raised the issue of benefit delays. The Trussell Trust has said that benefit delays are accounting for an increase in referrals to food banks, from 18.6% to 32.8% over the last year. However, our figures show that since April 2010 we have speeded up our processing of benefit claims by almost 5%. It is therefore hard to square the argument put by the Trussell Trust and the hon. Gentleman with what is happening in benefit centres.
The hon. Gentleman asked what is happening locally in benefit centres. In the Sunderland benefit centre, there has been a delay in processing jobseeker’s allowance claims. It is below the national average, but he will be reassured to know that it is back on an upward trajectory, so we are clearing work faster. The national target is 90%, and we hit that. In the year to date, we have hit 79.5% in Sunderland, with the figure for May being 81.4%, so we are improving.
On employment and support allowance clearance rates, hon. Members will be pleased to know that in the Sunderland benefits centre, which covers County Durham, we exceed the national target of 85%. [Interruption.] Nationally, the argument the Trussell Trust is making is that the situation is down to benefit delay, but the point I am making is that we have speeded up the processing of benefits, so there is a mismatch. There has been an issue to address in the Sunderland benefits centre, but that has been tackled in respect of jobseeker’s allowance. In the north-east, the Sunderland benefits centre is processing claims faster than the national target, so there is a disconnect at a local level between what is being said by the Trussell Trust and others, and what the statistics show. We publish the figures for processing times and for sanctions, so that hon. Members can see them.
In conclusion, we are seeing a process of benefit reform that is helping the north-east; it is getting people off benefit and into work. We see that in the Work programme, in the falling levels of incapacity benefit claims and in what is happening with JSA claims. We are trying to tackle a processing backlog in County Durham, but what we are seeing generally is that we are processing benefits far faster than we were in April 2010, and Labour Members should welcome that. Our reforms are the long-term solution to the welfare issue, as they ensure that we give people the dignity and self-esteem that comes from being in employment.
Ministerial Correction
(11 years, 4 months ago)
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Members: Correspondence
(11 years, 4 months ago)
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Bridget Phillipson
To ask the Secretary of State for Justice when the Parliamentary Under-Secretary of State for Justice will reply to the letter from the hon. Members for Houghton and Sunderland South and for Sunderland Central of 20 March 2013.
[Official Report, 20 June 2013, Vol. 564, c. 792W.]
Letter of correction from Jeremy Wright:
An error has been identified in the written answer given to the hon. Member for Houghton and Sunderland South (Bridget Phillipson) on 20 June 2013.
The full answer given was as follows:
Jeremy Wright
I can confirm that a response was sent to the hon. Member in response to her letter dated 20 March 2013. The response was dated 22 April 2013 and a copy of the letter was sent to her office based in the House of Commons.
The correct answer should have been:
Jeremy Wright
I can confirm that a response was sent to the hon. Members in response to the letter dated 20 March 2013. The response was dated 2 July 2013 and a copy of the letter was sent to their office based in the House of Commons.
Westminster Hall
(11 years, 4 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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High Speed 2 (Ancient Woodlands)
(11 years, 4 months ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Michael Fabricant (Lichfield) (Con)
I am grateful to have secured this important debate, which addresses the environmental impact of High Speed 2’s present route. Later I will specifically address the damage that will be wrought on our ancient woodland heritage—damage that will take literally hundreds of years to repair, if it can be repaired at all.
My constituents face being the unique recipients of both phase 1 and phase 2 of the HS2 project—a double whammy indeed. Its construction will cut through unspoiled countryside right across southern Staffordshire. There, and elsewhere along the route, HS2 will destroy our natural heritage, including some of the UK’s most precious natural assets, such as our ancient woodland, impacting, sadly, on wildlife and on the communities that cherish living in such a beautiful environment.
As I said in the Queen’s Speech debate earlier this year, HS2, as currently formulated, is causing an unnatural disaster in Staffordshire and huge problems in many other constituencies, not least those of Mr Speaker and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), who is sitting beside me.
As my right hon. Friend the Minister and Members of the House might be aware, I fully support the principle of an additional north-south line to relieve congestion on the west coast main line. The congestion on that line can only get worse in the years to come, as petrol and diesel prices move inexorably upwards, driving commuters off the roads and on to trains. I also anticipate and hope that the spare capacity freed up by HS2 will eventually enable more direct fast train services from Lichfield Trent Valley down to London and up to the north-west. However, despite those benefits, I cannot bring myself to support a project whose route causes such environmental degradation and blight, particularly when other options could be explored—an issue to which I will return.
I do not, therefore, oppose HS2 on principle, but as I said in the Queen’s Speech debate, it feels as if the route has been almost deliberately designed to be as damaging as possible to rural England. We have chosen the Labour route instead of the one we favoured in opposition, which used existing transport corridors, as is the norm in continental Europe. The route also fails to link with HS1 or adequately with Heathrow airport, and nor does it provide a direct link to Birmingham New Street, relying instead on a footway. It is seriously flawed.
Thousands of homes are being blighted by the present route. The Government must be swift and generous with compensation, and I hope they will adopt the property bond referred to by the Secretary of State during the Second Reading of the High Speed Rail (Preparation) Bill.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
My hon. Friend has touched a nerve by referring to the property bond. As he knows, my constituents, and particularly Hilary Wharf, who leads the HS2 Action Alliance, are really set on getting a property bond, as the fairest and most reasonable way of compensating people whose lives, businesses and houses are being destroyed by the project. Does he hope the Government will adapt the paving Bill in Committee to include a property bond?
Michael Fabricant
I have discussed this with the Secretary of State, and he says he is open to the idea, although a number of practical difficulties need to be overcome. Providing that they are, however, I hope, as I said just now, that the Government will adopt the property bond, because it will give comfort to my right hon. Friend’s constituents and mine.
The Minister of State, Department for Transport (Mr Simon Burns)
May I give my hon. Friend the reassurance that my right hon. Friend the Secretary of State and I gave during the Second Reading of the paving Bill? As a result of the 10th judicial review—we won the other nine—we will reconsult on the compensation schemes. Let me say categorically that consideration of, and consultation on, a property bond will be one of the options.
Sandra Osborne (in the Chair)
Order. May I remind hon. Members that the debate is about High Speed 2 and ancient woodlands, not the project as a whole?
Michael Fabricant
I thank you, Mrs Osborne. That is, indeed, what I am getting on to.
Christopher Pincher (Tamworth) (Con)
I am sure my hon. Friend agrees that it is good news that the Government will reconsider the property bond, as we just heard from the Minister. However, does he agree that they must deal with blight now—because homes and, indeed, ancient woodlands are being blighted now—rather than in the future, when the line is built.
Michael Fabricant
That is absolutely right. My hon. Friend and I are affected by phase 1 of the route. We have been living with this issue since before 2010, and my constituents have been living with it too. The issue is, therefore, urgent, and it needs to be dealt with sooner rather than later. However, let me get on to the main subject of the debate.
The compensation packages must be the same for both phases, because it would be totally wrong for people living south of Lichfield, who are affected by phase 1, to be treated differently from those in the north of my constituency, who are affected by phase 2.
The Woodland Trust has indicated that the preferred routes for both phases will cause loss or damage to at least 67 irreplaceable ancient woods, which are home to 256 species that are of conservation concern. Some lessons have been learned in the design of the phase 2 route, because the most devastating environmental impact occurs in the construction of the London-to-Lichfield route, or phase 1. However, that alone will damage 21 ancient woods, while noise and vibration will affect the delicate balance of a further 48 woods within 100 metres of the line.
Ancient woods are lands that have been continuously wooded since 1600. They form only about 2% of our land. Their unique, undisturbed soils form the UK’s richest habitats for wildlife. They just cannot be translocated, and, once destroyed, they are lost—in effect, for ever.
We cannot credibly lecture other countries on deforestation while taking a cavalier approach to the loss of our own equivalent of the rain forest. Ironically, given their support for such a destructive route, the Government fully recognise the unique place ancient woodlands hold in our society. The forestry policy statement published earlier this year notes:
“England’s 340,000 hectares of ancient woodlands are exceptionally rich in wildlife, including many rare species and habitats. They are an integral part of England’s cultural heritage and act as reservoirs from which wildlife can spread into new woodlands.”
I agree.
As I indicated, my constituency is unique in that it will suffer the double whammy of construction during both phases of HS2. Phase 1 passes between Lichfield and Whittington below Fradley junction. Phase 2 joins the phase 1 route just below Fradley junction and travels through the constituency towards Stafford, passing Colton and the villages knows as the Ridwares. The phase 1 route will continue beyond the junction with phase 2 to join the west coast main line. The damage it will do is heartbreaking.
As a result of such extensive construction, three ancient woods in the constituency would be severely damaged. The line will pass directly through Ravenshaw wood, Slaish wood and Black Slough wood, while Vicar’s coppice, being only 62 metres from the line, would be damaged by noise and vibration during its construction—damage that, as I said, is irreparable.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing the matter to the House. HS2 does not have any direct impact on my constituency, because I am a Northern Ireland Member, but none the less as a parliamentarian I have an interest in the environment, including what happens to ancient woodlands. I understand from the background information that four wildlife trust reserves, 10 sites of special scientific interest, 50 ancient woodlands and 84 local wildlife sites will be affected. Does the hon. Gentleman feel that it is not yet too late to give full consideration to the retention of habitat for wildlife including flora and mammals?
Michael Fabricant
I have pleasure in agreeing with the hon. Gentleman, and I hope indeed that the Minister will deal with that issue. The simple answer is no, it is not too late. I hope that the Government will rethink the route, because in my view it should not carve its way through previously unspoiled countryside, cherished by the communities who live in harmony with it. If it does, it will cause environmental damage not only to southern Staffordshire, as I have described, but to other sensitive areas such as the Chilterns area of outstanding natural beauty. The Under-Secretary of State for Justice, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright), wanted me to point out, as, being a Minister, he cannot do so today, that South Cubbington wood in his constituency will be damaged too.
Not only does the plan fly in the face of common sense and environmental progress; it transgresses the Government’s own policies on protection of ancient woodland. Indeed, the forestry policy statement of the Department for Environment, Food and Rural Affairs states categorically:
“Protection of our trees, woods and forests, especially our ancient woodland, is our top priority.”
Christopher Pincher
I am obliged again to my hon. Friend; he is very kind. He rightly mentioned that south Staffordshire and its ancient woodland are affected by the proposals. He mentioned Kenilworth and Southam, and between there and Lichfield is the Bourne valley in the Tamworth constituency, where ancient woodland will also be affected by the proposed route. The effect on the midlands, coming on top of the toll road and the extension to the A5, is damage to much ancient woodland. The Government must recognise that.
Michael Fabricant
As ever, my hon. Friend makes his point powerfully and well. I hope that the Minister has listened to what he said. He is right to say that the west midlands has suffered, and I think that it has suffered in a way that has not been replicated in other parts of the United Kingdom.
In May, I tabled a question asking my right hon. Friend the Secretary of State for his own assessment of the impact of the proposed HS2 route on ancient woodland. The response that I received in the Official Report on 6 June at column 1224W seemed, sadly, to indicate a belief in Government that such destruction is a price worth paying. It also noted that certain mitigation measures were being proposed, including the construction of a tunnel to avoid one ancient wood and movement of a line to minimise land take within another. That is simply not good enough. When we consider the vast sums of public money being committed we realise that the damage is inordinately large. As a minimum, mitigation should be proportionate and applied comprehensively for any ancient woodland lost or damaged as a result of the project. That should be based on the Lawton principles on habitat networks and landscape scale impact already enshrined in the Government’s widely welcomed natural environment White Paper of 2011. If, as it is claimed, HS2 is meant to be a world-class transport project, it should demonstrate world-class practice when it comes to the avoidance of damage and the showcasing of the very best practice in mitigation.
Further insult has been added to injury by the publication of a poorly written, half-finished environmental statement, which neglected to include crucial ecological surveys and assessments that are required for communities to respond effectively. The environmental statement sadly misunderstands the complexity and national significance of the habitats being damaged. For example, the summary states that
“at present there are no route-wide significant effects on habitats”.
Extraordinary. That is clearly not the case, given the national significance of ancient woodland, which is recognised in the national planning policy framework. I tabled another question in May—it appears at column 1224W in the Official Report of 6 June—about what discussions were taking place with the Department for Environment, Food and Rural Affairs on minimising the impact of construction on ancient woodland. The evidence of the environmental statement is that there has been far too little such discussion, and the result is a statement that pays mere lip service to environmental protection.
It does not need to be this way. Done properly, HS2 would provide the Government with a golden opportunity to showcase the very best of British construction. However, if it is to be the world-class and truly green transport solution that it purports to be, far greater respect for the natural environment needs to be demonstrated, or the opportunity will sadly be lost.
In the light of the impacts that I have highlighted, I call on my right hon. Friend the Minister, and the Government, with whom I have had the honour of serving, to look again at the proposed route for HS2. In opposition, as I have said, my party championed a route that followed existing transport corridors, a tried and tested method used across Europe, which minimises environmental damage. I know that phase 2 of the route is an attempt to do that, but of course in southern Staffordshire it is not possible, because of the need to link to the existing and most environmentally damaging route: phase 1. That policy position is now, ironically, receiving favour from the current Opposition party, whose route the coalition Government have now adopted. It is incredible.
I call on my right hon. Friend, rather than cutting a destructive swathe through previously unblemished countryside, to think again and deliver a route that better respects the environment we all treasure. I hope that in his answer he will address the following six questions of which, Mrs Osborne, I have given him prior notice—so he has no excuse not to answer. He is waving his speech, so I hope he will answer these questions in detail: first, will he look further at how the loss of ancient woodland can be minimised? Secondly, what assessment has been made of how many hectares of ancient woodland will be lost? Thirdly, how much of the £33 billion—of course, that sum has now gone up—will be spent on seeking to avoid loss of woodland and on the creation of new woodland as part of the mitigation process? Of course, I pointed out earlier that ancient woodland cannot be replaced overnight. Ancient woodland is woodland formed in 1600 and before.
Michael Fabricant
No, it is not; ancient woodland is described as existing from 1600.
Michael Fabricant
I will not give way to my right hon. Friend, simply because I think others want to take part in the debate. He can answer that point, if he wishes, in his speech.
My fourth question is whether my right hon. Friend will undertake to involve DEFRA and environmental organisations more fully. Fifthly, what say and involvement will communities have in any mitigation planting? Finally, will he ensure that the full environmental impact assessment, when it is published alongside the Bill, will be a major improvement on the somewhat inadequate work that was released earlier in the spring? I thank you for your indulgence, Mrs Osborne, and look forward to hearing from others in the debate.
Mrs Cheryl Gillan (Chesham and Amersham) (Con)
It is a pleasure to speak in Westminster Hall under your chairmanship, Mrs Osborne, and I welcome you to the Chair. I also congratulate my hon. Friend the Member for Lichfield (Michael Fabricant) on initiating the debate and speaking so well in opening it. I am glad to welcome the Transport Minister; however, perhaps he will understand my disappointment, because although I am sure he will show that he has great expertise and has been briefed perfectly, it would have been nice to have an Environment Minister present to engage with a subject that is specifically environmental. Much more cross-departmental co-operation is needed on the project, because it is not only the Department for Transport that should be putting its head on the block over HS2.
I want to take up a point that my hon. Friend the Member for Lichfield made. I just happen to have looked, on my hand-held device, at the definition of “ancient woodland”. It is a term used in the United Kingdom to refer specifically to woodland that has existed continuously since 1600 or before, in England and Wales, or 1750 in Scotland. Before those dates, planting of new woodland was uncommon, so a wood present in 1600 is likely to have developed naturally.
Mr Burns
I am extremely grateful to my right hon. Friend for giving me the opportunity to make a point that I would have made to my hon. Friend the Member for Lichfield (Michael Fabricant), which is that 1600 is an arbitrary date; it does not mean that every woodland created in 1601 or 1602 is not necessarily an ancient woodland. That is the simple point that I was making.
Mrs Gillan
I know my right hon. Friend the Minister is getting on, but none of us were around in 1600 to see when those woods were planted. I would be interested to know when he last walked in ancient woodland.
Mr Burns
I was talking in particular about the constituency of my hon. Friend the Member for Lichfield. I went through the whole route from the M25, so I saw not only ancient woodlands but other areas of outstanding natural beauty. I also saw some water features, particularly near the proposed elevated sections near the M25.
Mrs Gillan
I would be delighted if the Minister had walked in Farthings wood or Mantle’s wood, if he had looked at the River Chess or the River Misbourne, our famous chalk streams, or even if he were uniquely familiar with all the details of the area of outstanding natural beauty. I am glad that he paid a private visit, and I invite him to make a public visit and come to meet some of our excellent conservation people who spend a lot of time maintaining one of the most beautiful parts of the United Kingdom.
I was first elected to the House 21 years ago, and 20 years ago I found myself involved in the most amazing campaign to save Penn wood at Penn street. I believe that Penn wood was the first wood saved by the Woodland Trust. We collected donations from across the country to save the wood, which is still there to this day. I pay tribute to the Woodland Trust, which, among other conservation organisations, has briefed me for today’s debate. Saving Penn wood 20 years ago brought me much more closely in touch with our natural habitat in the Chilterns.
The Woodland Trust has analysed the number of woods threatened by the HS2 project—33 ancient woods are under threat and 34 ancient woods are at risk within 200 metres of the proposed line. Given the threat posed by, say, climate change to the natural environment, not least to ancient woodland, the Woodland Trust also supports the move to develop a low-carbon economy. However, a transport solution that inflicts such serious damage on our natural heritage, as the current route does, can never really be described as green. The Government’s preferred routes for the phases of the scheme will cause loss or damage to at least 67 irreplaceable ancient woods. As the Woodland Trust has said to me, that is too high an environmental price to pay, and the route should be reconsidered in light of those facts alone.
Why is ancient woodland important, and why does it matter? We have already established that ancient woodland is land that has been continuously wooded since 1600. My hon. Friend the Member for Lichfield rightly says that ancient woodland forms only 2% of our country. We are considering the largest infrastructure project since time immemorial, and it will damage that precious, small percentage that comprises our ancient woodland that still exists. Ancient woodlands have unique, undisturbed soils, and they form the UK’s richest wildlife habitats. They support at least 256 species of conservation concern. According to Natural England, nearly 50% of the ancient woodland that survived beyond the 1930s has already been lost. We should not threaten that small, precious piece of our environment in 2013.
There appears to be a huge conflict in Government policy. There is, for example, a Government policy to protect ancient woodland, and my hon. Friend referred to the recent forestry policy of the Department for Environment, Food and Rural Affairs. The January 2013 policy statement reads:
“England’s 340,000 hectares of ancient woodlands are exceptionally rich in wildlife, including many rare species and habitats. They are an integral part of England’s cultural heritage”.
It states categorically:
“Protection of our trees, woods and forests, especially our ancient woodland, is our top priority.”
That last quote is relevant to the Department for Transport and High Speed Two Ltd. How can that be when the Government propose to destroy comparably large swathes of ancient woodland?
Michael Fabricant
Does my right hon. Friend agree that the words she quotes are all very fine but that it is not words but deeds that count? So far, we have not seen any of those words translated into deeds or practice.
Mrs Gillan
My hon. Friend is absolutely right. What is even more worrying is that, against the background of the National Audit Office report, the evidence given to the Public Accounts Committee on Monday, and the project budget going up by £10 billion, none of the promises or deeds that the Government are talking about at this stage will be kept if and when the project proceeds to construction. I am doubly worried, and my hon. Friend is absolutely right.
In Chesham and Amersham, we have the highest number of ancient woods within 500 metres of the line, 18 in total, and they will be severely damaged by the construction and ongoing operation of HS2; ironically, I am informed by the Woodland Trust that the Chancellor’s constituency of Tatton has the second highest number— 10 ancient woods will be devastated. Of those 18 ancient woods in my constituency, seven are directly in the path of the proposed line and will be totally devastated by its construction.
I will give three examples. I do not know whether the Minister has walked in Sibley’s coppice, but it will suffer the loss of 2.1 hectares of what is only a 7.52 hectare ancient wood, which is more than 28%. Farthings wood will see almost 1 hectare of ancient woodland lost to the construction of a cutting. The wood is only 2.56 hectares, so the loss represents more than 40% of the wood.
One wood about which I am particularly concerned, because I was walking in it on Friday morning, is Mantle’s wood. It will lose 6.3 hectares of ancient woodland, which represents a loss of more than 25% of a 20.45 hectare wood that is cherished by the local community. When I walked the public pathway to the entrance of the wood on Friday, I could hear some background noise—in fact, there was a lark singing overhead—and the distant sound of a plane from Heathrow, but by the time I had walked 5 yards inside Mantle’s wood, I was transported into a greenwood and back in time. It is one of the most beautiful woods that can be imagined, with dips and cherry trees that have been there for years. There are birds, insects and flowers, and I just missed the best season, because the wood had bluebells before I arrived, but they were just over. I encourage people to visit Mantle’s wood to see what this project will destroy.
There is no point saying, “Okay, we are just going to lose 6.3 hectares of a 20.45 hectare wood.” The path I walked along will become the main transport route to the portal that will emerge in the middle of Mantle’s wood. Nobody can tell me that all those men and vehicles, all that spoil shifting and everything that will go on during the construction of the major exit of a tunnel will not damage the rest of that wood irreparably. People would weep if they could see what their children, their children’s children and future generations will lose if the project goes ahead.
The loss of ancient woodland can never be compensated; it does not matter what the Minister says or how many people write it. Matt Jackson is the head of conservation and strategy at the Berkshire, Buckinghamshire and Oxfordshire Wildlife Trust, and I am grateful to him and his colleague for taking me into the middle of Mantle’s wood and letting me see it not through a layman’s eyes, as I have just described it, but through those of a conservationist and expert. Anyone who saw what was there would understand implicitly that such woodland can never be replaced.
Over the millennia, ancient woodland has evolved its own ecosystem, including soils and fungi. When those are disturbed, they are lost. One cannot just pick up the wood and the soil, move them somewhere else, build something, and then move them back and replant. That ecosystem has taken hundreds of years to develop, and we are going to destroy it just like that.
The plans drawn up by the Department for Transport, which involve planting 4 million native trees to create new habitats for wildlife and flora and to offset some of the carbon impact of construction, are not good enough. They may be welcomed, but they will never compensate for the loss of ancient woodland, which is, by nature, irreplaceable. It is important that that is understood fully by a much wider audience.
The Woodland Trust has considered the biodiversity offsetting ratio produced by the Department for Transport, which is approximately 2:1, and suggests an absolute minimum compensation ratio of 30:1. I refer the Minister to the trust’s HS2 fact sheet “Compensation and Mitigation for Biodiversity Loss”. He needs to re-evaluate and to revisit that issue.
Michael Fabricant
On the Minister’s visit—by the way, he did not write to me to say that he was visiting—
Michael Fabricant
Far be it from me to criticise my right hon. Friend. On his private visits, has he been to one of the newer woodlands to see for himself the difference between newly planted woodland and a wood of the type my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) describes that has existed for 300 or 400 years?
Mrs Gillan
I am sure that the Minister will want to respond to that point. Walking in any wood is a great pleasure, but if you go down to the woods today, Minister, you are in for a big surprise, because there are many people throughout this country who feel strongly about our habitat, our woods and our natural heritage.
The draft environmental statement goes on to say that the proposed woodland planting will have a beneficial effect that will be significant at the district and borough level. However, the view of our environmental organisations is that it is unacceptable to claim that the effect will be beneficial when the woodland planting will be only partial compensation for the loss of ancient woodland.
The draft environmental statement also says that one aspect of the design of the proposed scheme is to avoid or reduce impacts on features of ecological value. It refers to constructing a green tunnel next to South Heath in my constituency to reinstate habitat continuity in the area. However, ancient woodland at Sibley’s coppice would be destroyed to create that cut-and-cover green tunnel, and the avoidance of ecological impact is almost impossible. Strip planting schemes are proposed that purport to replace the loss of our ancient woodland, but the habitats of certain animals and organisms cannot be joined up across a road. Some of the claims that are made in the environmental statement need close evaluation because I do not believe that they do what they say on the tin.
Natural England states that ancient woodland is a system that cannot be moved. The baldness of that statement makes me believe that no matter what the Minister says about grand plans for replacing our ancient woodland, once it is destroyed, it is destroyed. We need to accept that, and to admit that that is what the scheme will do.
Mr Andrew Turner (Isle of Wight) (Con)
Is an ancient wood an ancient wood, or are there different types of ancient wood? In other words, would one find the same things in Chesham and Amersham as in Lichfield, for instance?
Mrs Gillan
I honestly cannot answer my hon. Friend with accuracy; I can answer only from my own experience. In Mantle’s wood, for example, we have the most magnificent cherry trees, which are native to the Chilterns. One can see that they have been there for years by the huge size of their trunks, their shininess and the rings on their bark. They are absolutely magnificent. It is a mixed wood; there are even oaks and beeches growing there. In the Chilterns and our area of outstanding natural beauty, we were famous for making beechwood furniture. I imagine that there will be some commonality across the country, but each wood is bound to have a unique and different nature, wherever it is, which makes it irreplaceable.
Michael Fabricant
Perhaps I can help. There will be variations between different types of wood depending on the quality of the soil, whether there is water and the environmental weather patterns in different parts of the country, but ancient woods all have one thing in common: because they have existed for hundreds of years, their ecosystems have evolved in such a way that any replacement with new plantations cannot replicate them. That is the point that my right hon. Friend and I are making.
Mrs Gillan
That is helpful. There is no doubt that my hon. Friend and I share a passion for our ancient woods. I hope that the fact that he has secured the debate and given others an opportunity to speak up will make the Minister and the Department think twice about pursuing the project and the route.
I want to allow other hon. Members to speak, but before I draw my remarks to a conclusion, I must say that, sadly, many people have found the draft environmental statement, which is currently subject to consultation, to be superficial, inconsistent and incomplete. Crucial ecology surveys and assessments are yet to be undertaken. It is almost impossible for communities to respond effectively, and the presentation suggests that environmental impact is a secondary consideration, but that is simply not good enough for such an expensive project.
The non-technical summary of the statement considers environmental impact only superficially and completely misunderstands the complexity and national significance of damage to habitats. For example, it states:
“At present there are no route-wide significant effects on habitats”,
which is clearly not the case given that 67 ancient woods will suffer direct loss or damage, and given the national importance ascribed to ancient woodland by the national planning policy framework.
I have some questions for the Minister, although I could speak for much longer. Sadly, we have not had the opportunity for detailed debates on HS2 in the House. On Second Reading of the preparation Bill, so many people wanted to speak that even I, despite being called first after the Front Benchers, had only six minutes. There has been little or no opportunity to consider into the detail of the project, which is why I am so grateful to my hon. Friend the Member for Lichfield for securing this debate.
If the project goes ahead, the Department for Transport must come up with a much better story to support it and a much better way to deal with the problems arising from it. The route through the Chilterns and my hon. Friend’s constituency is a straight line. It is like a piece of steel going through the heart of our community and through an area of outstanding natural beauty, which is designated as such because we are supposed to protect it for future generations. We are breaking that protection and that vow by putting the project through the middle of the AONB.
Reportedly, the route has to be a straight line through the middle of the AONB and up to Birmingham because everything is about speed; a straight line is necessary to run those really fast trains. The story has changed a little, however; it is now about capacity on the west coast main line. If that is the case, the Department for Transport must look seriously at variations to the route to minimise not only the environmental damage, at least, but some of the horrors of blight that will be caused to people’s lives, homes, businesses and communities along the line. The existing proposal had better not be the last word on the route from the Department. We will have the hybrid Bill process, if HS2 goes ahead, but if that happens, I make a plea for moving some of the line so that we can protect one of the most fragile parts of the United Kingdom.
Michael Fabricant
Does my right hon. Friend share my curiosity about what the Opposition spokesperson will say about the line’s route? The Opposition now seem to have adopted the route for which we were campaigning when we were in opposition before 2010.
Mrs Gillan
Senior distinguished members of the Labour party, such as the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), have come out in public against the route. Today, the former Business Secretary, Lord Mandelson, features on the front page of the Financial Times, and “‘Expensive mistake’ warning derails consensus on HS2” is a pretty heavy headline. The Labour party is in a great deal of difficulty. This morning, Lord Adonis tweeted with bravado that it will not make the same mistakes as were made on the Channel tunnel and cancel HS2. The original idea was indeed Lord Adonis’s way of dealing with what was looking like a pretty comprehensive transport policy from the Conservative party in the run-up to the election. The gaff has been blown by Lord Mandelson—Lord Adonis came up with an idea that was more political than practical. Labour was probably a little surprised when we adopted it hook, line and sinker, and certainly when we went for the route through the AONB.
I want the Minister to re-examine the reasons for HS2. If the case for HS2 is not only speed, but capacity, and if the project goes ahead, even though the dreadful business case is getting worse, it must be possible to vary the route of the line to minimise the damage. I want him to look at greater tunnelling. I was grateful when the Government’s second Transport Secretary—I think the Minister works for the third Transport Secretary in as many years—listened to me and took seriously my points about the geology of my area, with its chalk streams and the aquifer, and about the environment and woodlands that would be affected. She extended the tunnel, although unfortunately she extended it right into the middle of a piece of ancient woodland.
I want the Minister to undertake to look seriously at greater tunnelling. A Brett tunnel plan, with a gap at Durham farm for engineering and environmental reasons, is being proposed on behalf of Conserve the Chilterns and Countryside and the Chiltern Ridges HS2 Action Group. It would protect all the ancient woodland in the Chilterns for future generations to enjoy. I want him to assure me today that he will examine the proposal seriously and not rule it out on grounds of cost, because the cost to our environment will be even greater. I want the Government to ensure that that is covered by the final environmental statement, when that is deposited along with the hybrid Bill. That is in the Minister’s gift, because the current consultation on the draft environmental statement is being carried out by HS2 Ltd, so it is not a statutory consultation, but a gratuitous one—perhaps that is why the document is so poor. The real environmental statement must be produced by the Department for Transport and it must be deposited with the hybrid Bill. I understand that it will run to at least 50,000 pages, but I want an undertaking from the Minister today that it will run to 50,001 and include the full tunnelling option that would protect the AONB.
If HS2 goes ahead, and goes ahead on a straight line, without the route being varied and without greater tunnelling, I ask the Minister to look at the mitigation ratios that I was discussing earlier, because 2:1 is not enough; 30:1 is more like it. What is more, I want the finance for that to be protected—I am not stupid. The project has already gone up in cost by £10 billion and has one of the largest contingency funds in living memory. The costing has been got wrong at almost every turn, and at every stage, by clever consultants, by the Department and by HS2 Ltd. Mistakes have been made in calculating the spoil coming out of tunnels and in the business case. Dare I say it, mistakes might even have been made in calculating the traffic on the west coast main line. When money is squeezed, the first thing to go is promises to protect the environment. That is all too easy, and I have seen that process happen along the London underground line in my constituency. Trees and foliage were cleared to keep the line safe; on one side they were replaced by soil full of local flora and fauna, but the money ran out, so a spray thing was used for the other side instead. Anyone walking along the line can see the meadows and the wildlife coming back on one side along that Chiltern railway line, which is so beautiful, while on the other side, where the cheaper material has been used, it is like a desert. I have written to London Underground asking it to ensure that it continues the planting. I therefore have practical experience of the fact that when the Government and organisations run out of money, the first thing to go is the promises that they made to protect and enhance the environment.
There is another option, however. You know it, Mrs Osborne, I know it, my hon. Friend the Member for Lichfield knows it, everyone else involved in the project knows it and now Lord Mandelson and the right hon. Member for Edinburgh South West know it: cancel HS2 and look at other options. If we are going to spend billions of pounds of taxpayers’ money—we are not in Victorian times, so it is our money, not private money, that will build the railway line—a better way to achieve the Government’s laudable aims is to look at other projects that will deliver better value for money for the taxpayer and protect our environment. I hope that the Minister will take my points seriously and reflect on them at the Department for Transport, and that he will make alterations or look to other schemes that would benefit the country far more.
Lilian Greenwood (Nottingham South) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Osborne. I apologise for my terrible cold, which is affecting my delivery somewhat.
I congratulate the hon. Member for Lichfield (Michael Fabricant) on securing this important debate and for posing some important questions on behalf of his constituents and others who are concerned about our natural environment. The debate will be followed closely in communities along the proposed route and, speaking as a Greenwood myself, I have a natural sympathy for a number of the points he made. The debate is timely, because there are only eight days left before consultation on the phase 1 draft environmental statement closes. We have heard from right hon. and hon. Members about the impact on ancient woodlands. Before addressing such valid concerns, however, I will say a few words about the wider environmental significance of the new north-south line.
A new line can help the UK to meet its 2050 carbon reduction targets under the Climate Change Act 2008 by attracting new passengers to the railways and by providing the additional capacity that freight and passenger services need. The rail freight sector has enjoyed 10 years of growth, and any Government that is serious about tackling carbon emissions would want to see that success continue. Without additional capacity, however, the risk is that freight operators will have to be turned away in future. Greengauge 21 looked at the environmental impact of the HS2 project last year, in a report commissioned by the Campaign to Protect Rural England, the Campaign for Better Transport and the Royal Society for the Protection of Birds. That report makes it clear that the environmental benefits of the new line have a close relationship with other policy areas.
At the moment, rail journeys consume much less carbon than equivalent car journeys. That gap was expected to close as more electric cars entered the market. I remind Government Members that the full coalition agreement included a commitment to
“a national recharging network for electric and plug in vehicles”.
In reality, those plans have been drastically cut back. It may make uncomfortable listening for some Government Members, but the Government’s failure to deliver a national recharging network strengthens the environmental case for a new rail line.
The report also highlights the need for a full network as the carbon reduction benefits are multiplied fourfold when the second phase to Manchester and Leeds is factored in. The Government should and could have provided that certainty by introducing a single hybrid Bill to cover the entire route, allowing construction to start at both ends of the line. We need a clear timetable for decarbonisation of the electricity market, and that was one of the report’s recommendations. Labour has made a commitment to decarbonise the sector by 2030 before phase 2 of the new line is completed.
Network Rail has embarked on a major programme of electrification on our existing rail network, as well as on the new high-speed line. We need an ambitious timetable for decarbonisation to reduce the impact of that additional demand. There are steps that the Government could take now to maximise the environmental benefits of the new north-south rail line, However, those wider gains will not cancel out the loss of individual habitats. Loss in some areas may be unavoidable, but damage should take place only when all reasonable alternatives have been exhausted. The test is whether every reasonable step has been taken to mitigate environmental damage.
Hon. Members and communities along the line have raised serious concerns about the way in which HS2 Ltd has handled consultation up to this point. It is no secret that many of the early community forum meetings in particular were badly organised, with underprepared staff giving incorrect or conflicting information to the public. As the Chilterns Conservation Board said at the time, the meetings were characterised by
“a lack of clarity on what the Community Forums will actually cover. Many of the HS2 Ltd staff…were…quite new in post and could not confirm how the meetings should work or even if they would be attending future ones.”
The Minister must ensure that when the consultation on the final environmental statement begins—I would welcome a date for that—the process is transparent and accessible, and that enough time is provided for proper responses fully involving the affected communities. More than a year on, there are still serious questions about the route, including whether the tunnel under the Chilterns will be extended, with only eight days left for the draft environmental statement consultation.
The situation was not helped when misleading statements were made early last year. In a letter to the right hon. Member for Chesham and Amersham (Mrs Gillan), the then Secretary of State for Transport, the right hon. Member for Putney (Justine Greening), suggested that woodland could be transplanted to an adjacent site, a process known as translocation. We must be clear that ancient woodland cannot be moved, but some animal species and soil can be moved or translocated, although the consequences of moving soil from ancient woodland are, sadly, poorly understood. Any trees that are moved will be coppiced, radically altering their appearance and risking the death of individual trees during the moving process. Although some constituent parts of the woodland may be salvaged, the original biodiversity cannot be recreated and is lost for ever. Natural England has said that translocation might, if carried out as a last resort when loss of the original habitat is completely unavoidable, form part of a package of compensation measures. In other words, translocation may have a part to play, but we must be honest about its limitations.
The onus should be on route design and mitigation measures to avoid disrupting ancient woodland in the first place. Some measures have been introduced to reduce the line’s impact, such as additional tunnelling, but we would like clearer information about the cost, especially now that the overall cost of the project has increased, largely because of new tunnels in west London, Birmingham and the east midlands.
Michael Fabricant
Will the hon. Lady clarify whether the official Opposition now support the route, more or less, that we proposed when in Opposition, which would follow an existing transport corridor, thus minimising environmental damage, and not the Adonis route that we have adopted?
Lilian Greenwood
I thank the hon. Gentleman for his intervention. He is right to point out that we considered alternative routes and argued that they should be considered by the new Government. We want the project to proceed, but there are significant concerns about the Government’s timetable, particularly the hybrid Bill. The Government are in a position to make decisions and we want the project to proceed, but that does not mean that we should not look carefully at the option for mitigation and compensation to protect the natural habitat.
Will the Minister tell us whether he is satisfied with the way in which alterations to the proposed route have been made so far, whether he expects further changes, including additional tunnelling, to avoid ancient woodland, and whether he has given any thought to how ancient woodland in particular will be approached during the hybrid Bill’s petitioning process? When the Bill goes into Committee, the Government will be able to set limits of deviation restricting the extent to which alterations may be made during that process. We ask for careful thought to be given to how ancient woodland might be affected by those limits. The commitment to planting new trees is welcome, provided they form a sensitive and effective sound barrier, but they cannot replace ancient woodland which is, by definition, irreplaceable.
I am pleased that the hon. Member for Lichfield agrees that a north-south rail line is right in principle. As the House debated last week, there is an impending capacity crunch for our railways, especially on the west coast main line which will be full by 2024.
Mrs Gillan
The hon. Lady says that the west coast main line will be full by a certain date. Can she give me her source of information and the evidence base on which her statement is based?
Lilian Greenwood
My information is based on the evidence provided by Network Rail and others showing the continuing huge growth not just on the west coast main line, but on all rail lines. There is great demand from passengers and freight and we must be able to meet that from an environmental perspective because of the importance of rail for our future economic growth and regeneration.
A new north-south rail line is necessary to keep pace with rising passenger and freight demand. This project can bring additional private investment along the route, generating jobs and growth while improving connections between our cities, particularly in the midlands and the north. The hon. Member for Lichfield was absolutely right to call for this debate on ancient woodland, which is a particular concern for his constituents. This discussion comes at a crucial point as the designs for phase 1 are finalised. I hope that the Minister will explain exactly how he intends to act on the back of the points raised today, and provide full answers to the questions that other hon. Members and I have posed.
There is no doubt that there is a difficult balance to be struck. High-speed rail can help to deliver carbon reduction, which is why the Woodland Trust, the Campaign to Protect Rural England and Greenpeace support it in principle. Inaction is not an option, as road schemes and degraded air quality also threaten woodland. The line can bring real environmental benefits, but only if other policy decisions are taken, including in particular a commitment to decarbonise electricity. That wider context is crucial, especially as Parliament is being asked to confer extra spending and planning powers in aid of the scheme.
As hon. Members have pointed out, there is an apparent contradiction between the Government’s national planning framework, which contains a provision against development on ancient woodland sites, and the proposed route, which goes through several such areas. This is exactly the sort of issue that could be addressed in the long-awaited national transport strategy, but three years in, the Government still do not have one. Perhaps the Minister will tell us when he expects the document to be published; it would be of great assistance to MPs and the public as the debate continues.
To conclude, we have lost half our ancient woodland since the 1930s, mainly as a result of agricultural development. The hard truth is that although the new north-south rail line will bring a great number of benefits, it is likely to result in further loss. That is a matter of regret, and both the Government and HS2 Ltd must present an absolutely watertight case when they propose the disruption or destruction of ancient woodland sites. I promise hon. Members and the wider public that Labour will return to the issue during the Bill’s Committee stage.
The Minister of State, Department for Transport (Mr Simon Burns)
It is a great pleasure to serve under your chairmanship, Mrs Osborne, and I thank my hon. Friend the Member for Lichfield (Michael Fabricant) for securing the debate. As everybody who has taken part in the debate or been in the Chamber will acknowledge, the issues that have been raised are extremely important. I assure my hon. Friend that, during the course of my comments, he will be getting answers to the six questions that he asked.
One has to accept, as the hon. Member for Nottingham South (Lilian Greenwood) did during her speech, that a balance has to be struck between the economic needs of the country and the potential impact on a countryside that has been enjoyed by generations of people. My right hon. Friend the Member for Chesham and Amersham (Mrs Gillan) described, in very moving terms, the importance to many communities throughout the country of not only ancient woodlands, but other environmental features of their local communities.
Although I believe HS2 to be in the national interest, we know that it is sadly not possible to build a railway without any effect on the environment. When designing the route, we must carefully weigh important considerations such as wildlife habitats against other concerns, such as protecting as many people’s homes as possible. We must ensure that any environmental effects are reduced as far as possible and also look for opportunities to benefit the environment along the way.
I assure right hon. and hon. Members that the Government are determined to make the scheme environmentally responsible, and I believe that we have gone to great lengths to listen to those who are concerned about the environmental effects of the project. In February 2011, we consulted on the appraisal of sustainability. As hon. Members said, we are now consulting on a more detailed draft environmental statement. That is an unprecedented level of consultation to ensure that we do the right thing by the environment.
A great deal has also been done on designing the route of HS2 to reduce its environmental impact. HS2 Ltd has worked closely with Natural England and the Environment Agency on choosing options and preparing designs that have no impact on sites of international importance for nature. In addition, bilateral meetings have been held with county wildlife trusts to discuss possible impacts on wildlife sites and mitigation measures that could be employed to reduce impacts whenever practicable.
As I said, in September last year, I made a private visit—driving from the M25 up to Warwickshire—to see exactly what the impact of the line of route would be on not only the environment, including woodlands and water, but some of the communities, villages and houses near the route. It was extremely important that I could visualise that for myself, rather than seeing this only as a concept on a piece of paper, from photographs, or from what people have told me.
What struck me was that all too often, when the Government or some other organisation produces a recommendation, that is their view of what should happen. More often than not, when people come up with improvements, fine tuning, or even criticism to it, those who have drawn up the proposal feel threatened, dig their heels in, and take an attitude that what they want is right and what anyone else wants to change, modify or reject is wrong. Hard and fast positions are taken, so no one is prepared to budge. Going along that line of route, I was impressed by proposals that had come in to fine tune or change the line of route slightly, or associated proposals, and the way in which HS2 Ltd has been prepared to work with groups and local communities to make improvements. We have not had the unfortunate situation that happens all too often whereby because the proposal was the Government’s and HS2 Ltd’s, it was 100% right, and anything that challenged it was a criticism of them, and they were not prepared to think again.
It is fair to say that a number of changes—and, to my mind, improvements—have been made to alleviate problems for not only the environment, but individuals, their communities and their properties. However, I also accept that one will never be 100% able to meet the wishes and requests of people who want changes, because it is just not possible to do so, given the project’s sheer scale. One has to reach a judgment on what is in the national interest and what must go forward, because it is in the national interest, while at the same time trying to minimise any damage that might occur to the environment and to people’s homes and businesses. I will deal with part of that later in my speech.
As I said, HS2 Ltd has worked closely with Natural England and the Environment Agency on choosing options and preparing designs that would have no impact on sites of international importance for nature, which is important. There have been bilateral meetings with county wildlife trusts to discuss the possible impacts on wildlife sites. The Government have already committed to planting 4 million new trees as part of the HS2 project, and hon. Members referred to that important point in their comments. I certainly take the point that that has to be done sensitively and properly, but it represents an important improvement to the environment, especially where the line of route will be.
Mrs Gillan
I am not being ungrateful for what the Minister is saying, but I would like to point out that the ratio of replanting—the 2:1 that I referred to, although the experts say that 30:1 is needed—should be considered. It sounds like an awful lot of trees, but when we start to look at the density per hectare, it is not a large number of trees.
On community involvement and bilateral meetings, the Minister must admit that, particularly in my area, they have not always been the most successful or effective exchanges of information as far as larger groups are concerned, even in relation to their number and frequency.
Mr Burns
I take on board my right hon. Friend’s point about the number of trees, but I am not 100% convinced that 4 million new trees along the line of route is not the right number. Of course, that is only part of the remedial action that the Government and HS2 Ltd will take to protect the environment, which I shall address in greater detail later.
My right hon. Friend also raises an important point about community forums and the interactive dialogue between communities and HS2 Ltd. I will be frank with her: we get a variety of reports of those meetings. Some reports have been extremely positive, saying that people have found the meetings extremely helpful. As she will know from her correspondence with me on behalf of her constituents, they have been concerned about some of the meetings that have taken place in her constituency, and I accept that point. I have noted the criticisms that she has drawn to my attention. We have certainly spoken to HS2 Ltd and we or it will address the concerns of several of her constituents, because we believe that it is important that there is a proper dialogue between communities and HS2 Ltd, and that people work together. Even if people do not necessarily agree with the project, that is the important thing. Because I and the rest of the Government believe that the project is in the national interest and should go ahead, we must work with local communities, and local and national organisations, to ensure that we get the best project that causes the least damage to the environment.
In addition to the new trees that will be planted, we are examining opportunities to enhance existing habitats or create new woodland areas and wildlife habitats, but we must be mindful that it is not possible—unfortunately, and as much as I would love to have it in my gift—to avoid completely all sensitive areas. We have already made every effort to avoid sites that are of importance for their international ecological value and areas of national designation, such as the Chilterns area of outstanding natural beauty. In this instance, of the 13 miles of route through the area, less than 2 miles will be at or above the surface. Compared with the phase 1 route that was originally subject to consultation in 2011, there will be a more than 50% increase overall in tunnel or green tunnel, and the initial preferred scheme for phase 2 has no impact on national parks or areas of outstanding natural beauty.
When it comes to minimising impact on ancient woodlands, the Department and HS2 Ltd take their obligation to conserve them extremely seriously. Through careful design of the route and strict controls during construction, we are seeking to reduce, as far as practicable, any impacts. For example, the provision of a tunnel at Long Itchington avoids the ancient wood there, and a retained cutting minimises land take at South Cubbington wood.
Ancient woodlands, as everyone who has taken part in or has listened to the debate accepts, are a very important part of our natural heritage. However, as I have said, it is, sadly, not possible to build a railway without any effects on important environmental sites. Other factors, such as the location of people’s homes, have to be taken into account as well. The Government have to strike a balance between a range of important considerations. That debate has taken place to good effect in the constituency of my hon. Friend the Member for Lichfield, where the original route has been moved away from those places where the majority of people live. Designs have also been developed to avoid important employment areas and to ensure that local conditions for growth are not missed.
Mr Burns
I hope from the way my hon. Friend is nodding in the affirmative that he is appreciative and accepts that that was the right thing to do.
To provide an effective outcome for the natural environment, I strongly believe that we have listened and engaged, and we will continue to engage with those non-governmental organisations with an interest in the natural environment. The Woodland Trust, the Wildlife Trusts, the RSPB and other groups already form part of the debate through my regular environmental round-table meetings. They are already proving effective, and as a result we are implementing plans for a design panel to inform the aesthetics of the detailed design.
I assure my hon. Friend that we will be providing suitable compensation for any ancient woodland that is lost, following the best practice recommended by our ecologists, which is developed in conjunction with Natural England. We will also be examining opportunities to enhance existing woodland and to create new woodland areas and wildlife habitats. With more than 22,000 ancient woodlands in England and Wales, it is impossible to avoid them all. That being the case, we believe that it is appropriate to provide some form of compensation when avoidance is not possible.
Current best practice, which builds on methods employed for other major infrastructure projects, such as High Speed 1 and the M2 widening scheme, includes the relocation of the ancient woodland soil with its seeds to allow it to regenerate over time, together with the planting of native trees of local provenance. Ten years’ monitoring undertaken by environmental specialists has shown that new areas of habitat were successfully created along the HS1 route, including for protected species such as the dormouse.
It should be noted also that HS2 has committed to seeking no net loss of habitats. When ancient woodlands are affected, it will result in a larger area of woodland being created than the area lost.
Mrs Gillan
I appreciate what the Minister is saying and I know that he is on a very sticky wicket in dealing with this. In the draft environmental statement, HS2 claims that the translocation of woods will result in habitat of a similar value, but the Construction Industry Research and Information Association specifically states that translocation of ancient woodland is only
“an appropriate activity to salvage and create a new habitat of some value, albeit a lower one than lost”.
That directly contradicts the claim in the draft environmental statement. Will the Minister now admit that it does not matter what is said here as the position is in line with what Natural England says? We cannot replace ancient woodland at all, and whatever we do will always result in a habitat of lesser value.
Mr Burns
May I say to my right hon. Friend, in shorthand script, that the answer to both points is no? First, I am not on a sticky wicket. I am outlining to hon. Members what the Government are doing to try to minimise the damage. It is certainly not a sticky wicket; it is actually a range of proposals and initiatives of which I believe that the Government can be proud because of the efforts that we are putting into ensuring that we do everything to avoid causing damage when that is possible and, when it is not, taking the maximum opportunity to minimise the damage that will be caused by building the railway.
Secondly, I do not accept the point about conflict with what HS2 is proposing. Yes, by definition, we cannot uproot an ancient woodland and transplant it lock, stock and barrel to another site, so in that respect my right hon. Friend is correct, but what we can do is take the measures I have described to transplant an area when woodland is being lost because of building work, which will go a considerable way towards helping to protect and improve the environment. That will not, of course, be the same as if one did nothing at all and left the existing ancient woodland, but it is a very good second-best option, and it is certainly better than doing nothing at all and letting that woodland be lost for ever.
Lilian Greenwood
I want to return to the Minister’s statement about no net loss. I query whether that is consistent with the Government’s national policy as set out in the natural environment White Paper and the national planning policy framework. Should they not actually adhere to the current policy of net gain?
Mr Burns
Yes, certainly. What I said was absolutely right: there will be no net loss. We will work according to that principle. In some respects, we will have to wait and see whether there is an increase, particularly with the second phase of the route. All my right hon. Friend the Secretary of State has done is to publish the proposed preferred route—the consultation is still to take place. Just as with the hybrid Bill on phase 1, and the hybrid Bill on phase 2 in due course, decisions may be taken in the light of the process that might have an impact. As of now, the policy, the intention and the determination is that there will be no net loss.
Many of our remaining ancient woodlands are small, and there is generally a patchwork of fragmented sites in an intensive agricultural landscape. One of our objectives, which is very much in line with the recommendations that emerged from the Lawton report, is to take this opportunity to link fragments of ancient woodland, when practicable, through the planting of new woodland links. Natural England and the nature conservation NGOs have welcomed that approach, and I hope that it will be welcomed by hon. Members in the Chamber and beyond. Even though it can take many years before the replanted woodland returns to anything like the character of the original, such planting is important to ensure that future generations can enjoy these important sites, but we would be open to any other ideas, if people think that a different form of compensation would be more appropriate. I invite any of my hon. Friends or the official Opposition to contribute if they have any ideas that they believe will help to improve or enhance the process.
We should not lose sight of the fact that many of the best environmental specialists in the country are working on a detailed environmental impact assessment, which will identify the true effects and allow us to bring forward our plans to mitigate them as much as we can. It is currently in draft form for consultation, so I urge all hon. Members to ensure that their constituents who have an interest contribute to the process.
Mrs Gillan
The Minister knows that I have tabled questions about the environmental consultation and asked him to extend the consultation period beyond the eight weeks allowed, but he has repeatedly refused to do so. May I ask him one more time? He appreciates the complexity of these matters and the imperfect nature of the document. Given their resources, many people are struggling to respond to a project of this nature—the environmental organisations are stretched to the limit. Will he please once more see whether he can extend the consultation period by four weeks? That would be the right thing to do, because many of our conservation organisations are stretched to the limit by this project and they need to put proper responses into ensuring that our environment is protected. He is causing damage by not extending the consultation period.
Mr Burns
I do not want to cause disharmony between myself and my right hon. Friend, but I am afraid that what I said in correspondence to her is the answer: I am not prepared to look again, because there has been a reasonable period, for reasons I will come to when I answer the last question asked by my hon. Friend the Member for Lichfield. In the spirit of co-operation, however, I will respond to her important point about the Brett tunnel option. She asked whether we will reconsider whether the tunnel could be extended beyond where it is proposed to end. HS2 Ltd has looked at the matter again and found that an extension will not offer more benefits than the current option, not least because to extend the tunnel beyond the wood, we would need a ventilation tunnel in the middle of the wood, given the safety requirements for tunnels of certain lengths, and I believe that that would be far more environmentally damaging than the current proposals.
I now come to the specific points raised by my hon. Friend the Member for Lichfield at the end of his speech. He asked whether my Department will look further at how the loss of ancient woodland can be minimised. The answer is emphatically yes. HS2 Ltd is constantly looking at the route and refining the mitigation that can be applied, and that will continue up until the hybrid Bill process. He asked what assessment has been made of how many hectares of ancient woodland will be lost. HS2 Ltd’s proposals, as they stand, identify fewer than 36 hectares of ancient woodland lost for phase 1, including the land needed for the construction phases of the route. That will be confirmed in the environmental statement that comes before Parliament later this year. It is too early in the design of phase 2 to give accurate figures on the potential loss, but 17 ancient woodland sites are directly affected by it. For some of those sites, the impact is at or near the margins of the wood, and there is scope for reducing the impact as the design progresses. I hope he is reassured on that.
My hon. Friend also asked how much of the total cost of HS2 will be spent on avoiding the loss of woodland and creating new woodland as part of the mitigation process. I hope that he will be pleased to learn that the rough estimate—he will understand why there is only a rough estimate at this stage—is between £10 million and £20 million. We have not finalised the ancient woodland compensation measures however, which will be reported in the formal environmental statement.
My hon. Friend asked whether we will undertake to involve DEFRA and environmental organisations more fully. I assure him that DEFRA, Natural England and the Environment Agency are fully engaged in phase 1 and will continue to be fully engaged. He also asked what involvement communities will have in any mitigation planning. HS2 Ltd engages with local authorities through the planning forum and local people are engaged through the community forums and the current round of consultations. Their views will continue to be considered throughout the development of the designs for HS2. I reiterate that it is important that people respond to the consultations and engage fully in the whole process so that we can work together to do as much as we can to get this right.
Finally—my right hon. Friend the Member for Chesham and Amersham might also be interested in this—my hon. Friend asked whether we will ensure that the full environmental impact assessment, when it is published alongside the Bill, will be a major improvement on the “somewhat inadequate work” that was released earlier in the spring—those are my hon. Friend’s words, not mine. I hope that I can reassure him. The draft environmental statement has been provided at the earliest stage to enable people to participate in the development of the scheme. There is no requirement for the Government to provide such a draft, so we are setting a high standard by taking this approach and publishing the document. To my knowledge, no project on this scale has attempted to provide such information at this early stage—before there is even consent.
Mr Burns
No, because I have only half a minute left.
In conclusion, I reassure my hon. Friend the Member for Lichfield, my right hon. Friend the Member for Chesham and Amersham and others who have been kind enough to attend the debate that the Government will keep listening to those who are concerned about the impact of the scheme on the environment. We will endeavour to make the scheme as environmentally responsible as possible. It is in all our interests to get the scheme right. We are determined to work with organisations and agencies and in government to do the least damage possible through this massive national project in the national interest.
York (Green Belt)
(11 years, 4 months ago)
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Julian Sturdy (York Outer) (Con)
It is a pleasure to serve under your chairmanship, Mrs Osborne, for what is, I think, the first time. The subject of the debate is an incredibly important issue, not only for my constituency and the City of York, but for the rest of our great county of Yorkshire and the many other historic and beautiful cathedral cities across the country.
The green belt is absolutely necessary to protect the rural countryside for which this country is renowned, but it also protects the character and setting of our cities, and prevents suburban sprawl. Without it, I have little doubt that some of the most culturally and economically important cities in the country would be changed beyond all recognition. The green belt covers 4 million acres of land across England, and serves five main purposes: stopping urban sprawl; preventing coalescence—the joining together—of local settlements; safeguarding the countryside from encroachment; protecting the setting of historic towns and cities; and encouraging urban regeneration.
The importance of the green belt, particularly in carrying out the stated aims, is well secured in the national planning policy framework—NPPF—which states:
“The fundamental aim of Green Belt…is to prevent urban sprawl by keeping land permanently open; the essential characteristics of Green Belts are their openness and their permanence.”
Sadly, in York the permanence of the green belt is being dramatically tested. City of York council’s draft local plan is currently out for consultation, and I speak on behalf of the vast majority of my constituents when I say that many of the proposals in the plan are deeply concerning.
Hugh Bayley
For decades, City of York council, under Conservative, Liberal Democrat and Labour leaderships, has failed to designate the green belt around the city, which has acted as a blight on development. Does my hon. Friend—I call him that because he is a friend—agree that designation should go ahead, even if he does not agree with the precise details and wants changes to the proposed local plan? Does he agree with the principle of designating a green-belt area around our city?
Julian Sturdy
My hon. Friend is absolutely right. It is right and proper that we finalise the green belt in the local plan. That was always the intention. It was the intention in previous local plans that were sadly thrown out by the inspector for a number of different reasons. However, I believe that in the process of finalising the green-belt boundaries in the new local plan, sacrificing more than 2,000 acres of green-belt land and potentially changing the setting and character of our great city for generations to come is a sacrifice too far. Although the draft plan makes the green belt permanent, it sadly threatens the very fibre of York’s existing green belt.
The council has proposed a staggering 22,000 homes over the 15 to 20-year lifetime of the plan, which is a vastly over-ambitious and completely unsustainable figure, but perhaps what concerns me most is the fact that more than 16,000 of the proposed homes are to be placed on more than 1,400 acres of York’s green belt. In trying to fulfil what can only be described as over-inflated targets, the council not only proposes radically to alter the make-up of a number of communities in my constituency by extending them dramatically but to develop two entirely new towns on York’s already deeply congested road network—the Minister has witnessed that congestion at first hand.
In one of the proposed towns, which is known as Winthorpe in the draft local plan, more than 5,500 new homes have been proposed on nearly 500 acres of prime agricultural land. Although it is not a conservation zone per se, the land is home to an array of important wildlife, including protected water voles. In addition, the council has proposed a 4,000-home town on more than 300 acres to the north of the city, again on high-grade food-producing land. Sadly, however, that has not fulfilled the council’s hungry appetite for devouring green-belt land, and in many areas of my constituency it has sectioned off hundreds more acres, which are deceptively termed “safeguarded land”. At first glance, one might think that the land was safeguarded from development, but sadly it is safeguarded for future development, in the longer term. The terminology in the NPPF regarding safeguarded land is, sadly, causing confusion, and could be used by local authorities such as City of York council to brush proposals under the carpet by failing to explain safeguarded land properly to the wider public, including in any so-called public consultations. I therefore urge the Minister to consider amending the terminology used in the NPPF to prevent any further confusion about the definition of safeguarded land.
In total, the land safeguarded for future development in York—land taken out of the green belt—stands at just short of 1,000 acres, which means that the full development burden on York’s green belt from the draft local plan amounts to well over 2,000 acres, as I have mentioned. Sadly, that is not all that City of York council has proposed for the green belt. Adding insult to injury for all those who care passionately about protecting York’s picturesque rural setting, the council had proposed 40 potential sites for wind farms, encircling the city. York is evidently the first local authority to go down that route in its local plan, and one has to wonder why, because if the plan is realised it will be hugely damaging for York and for those who live in and around the city. In essence, the wind farms could change the character and setting of the city beyond all recognition. The proposals could also have a sustained negative impact on the local tourism industry, with York’s standing as a beautiful, cultural and historic holiday destination sadly diminishing.
Perhaps what has caused most controversy in my constituency are the proposals in the council’s draft local plan for more than 80 Traveller and showpeople pitches. My constituents are not only perplexed by the quantity of pitches proposed—they believe that the number is being justified by an exaggerated calculation of need—but, like me, they are astonished by the locations put forward, all of which are on green-belt land. That is against Government guidance, in which Traveller sites on green-belt land are deemed inappropriate developments. In the award-winning village of Dunnington, where a 15-pitch Traveller site has been proposed, local residents are understandably concerned that such a site on the green gateway into the village will, without a doubt, be hugely detrimental to Dunnington’s character and setting.
Knapton is a tiny, peaceful village on the outskirts of York. It is very close to my hon. Friend’s constituency of York Central, and I am sure that he will have received representations on the proposal for the village. If the council gets its way, Knapton will become home to 20 travelling showpeople families. The guidance states that each showpeople pitch must be 0.25 sq km, which would mean that Knapton residents could be facing a site larger than the village itself.
The NPPF and supporting documents refer specifically to the need for such sites to be smaller than the nearest settled community, so Knapton residents are astonished by the council’s proposal. Needless to say, those proposals are entirely inappropriate both for the villages concerned and for York’s green belt as a whole.
I remain steadfast in my support for localism. I believe that the Government were absolutely right to give local authorities and communities more say over development. The NPPF clearly places the emphasis on local authorities in the drawing up of development plans, but given what the council has proposed, I wonder whether it paid any attention whatever to the rest of the NPPF when it drew up its draft local plan. For example, one core planning policy principle is recognition of the intrinsic character and beauty of the countryside, but the council seems to have disregarded the sanctity of York’s countryside and surroundings and, sadly, to be treating them as a bargaining tool for eager developers. Planning policy is clear about the need to prioritise brownfield sites.
Hugh Bayley
I am grateful to my hon. Friend for giving way, especially as we do not see entirely eye to eye on the green belt. He is about to discuss brownfield sites. I am strongly committed to the development of housing on brownfield sites such as the former sugar factory site—the former Terry’s factory site—that is going ahead, and the York central site. York has had strong growth in jobs over recent decades, which is driving up housing prices for both rent and sale. Does he agree that development needs to be balanced, with housing development on brownfield sites in the city centre as well as in suburban settings in his constituency?
Julian Sturdy
I agree with part of that intervention. We need sustainable development and a plan that is sustainable and works for the whole of the city. My main argument is that the council’s plan is not sustainable; it is really damaging to the character and setting of the city, given that 1,000 acres of green-belt land will be taken out for development.
The hon. Gentleman is absolutely right about the need for brownfield sites to be prioritised, as is stated in the national planning policy framework. As he mentioned, York has many large and strategically important brownfield sites, yet—this is where we part company—the council has decided to change the emphasis on those sites so that more are used for employment-based development. That has significantly increased the housing burden on the green belt, but what really worries me is that it also calls into question the viability of brownfield sites under the council’s shifting policy. I mentioned at the outset that the fifth main purpose of the green belt is to encourage urban regeneration, but if we rip up thousands of acres of green-belt land around York, where is the incentive to develop such strategic brownfield sites?
The NPPF states that local plans should be “aspirational but realistic”. The council’s draft local plan fulfils the former word, but completely ignores the latter. The council appears to base what I describe as its over-ambitious housing targets on completely unrealistic job growth forecasts that suggest that York will create close to 1,000 jobs a year for the next 15 to 20 years. I am optimistic about York’s economic prospects, and I work closely with my hon. Friend on delivering that, but the figures suggested by the council are off the mark. The York job market has contracted over the past eight years, which calls into question the way in which the council has linked job growth to housing need. That must be closely examined.
The NPPF is clear on the need for sustainable development, but, as I have mentioned, the draft local plan is profoundly unsustainable. York is a small historic city, in which local infrastructure is under strain. To add tens of thousands of homes could mean tens of thousands more cars on already overcrowded and congested roads, and I have not even touched on flooding and drainage issues, as well as the strain on health and school facilities.
The road network in York’s green belt is of particular concern. The Campaign to Protect Rural England reports that York has only 8 metres of public rights of way per hectare, which is just over half the national average. With an average build-out rate of 400 homes a year on any one site, York will be surrounded by construction sites for years to come. I am deeply concerned that added construction traffic will cause the city to grind to a halt. What will that do for the wider local economy?
All the while, the council has no guarantee that it will secure the necessary investment in our infrastructure. Its policy very much puts the cart before the horse. In my mind, the council must absolutely reduce the figures in the local plan to a more sustainable and manageable level. Even its commissioned reports indicate that its highly inflated figures will be difficult to deliver.
Global food security is swiftly becoming one of the most important issues that faces the future of the human race. The importance of productive agricultural land in helping to secure food supply is rightly recognised in the NPPF. In York’s green belt, 30% of the land is grade 1 or grade 2, and it is some of the best and most versatile land. That is nearly double the national average, so why does the council want to develop thousands of acres of fertile, food-producing land?
York’s green belt is a bastion of good environmental practice, with 56% of its agricultural land subject to Natural England funding to support environmentally sensitive farming. York’s environment is certainly worth protecting, with 3% of the green belt registered as sites of special scientific interest, alongside a further 50 acres that is devoted to local nature reserves—for example, the Hassacarr nature reserve in Dunnington, which is adjacent to land on which the council is proposing a 15-pitch Traveller site.
York’s green belt is clearly under threat. Based on the series of packed-out public meetings I have held in my constituency during the past few weeks, I believe that the vast majority of my constituents support my view. York’s local plan is only in its draft—I emphasise, draft—phase and is currently out to public consultation, but I remain deeply concerned that City of York council is using the localism aspect of the NPPF to enable it to ignore the rest of that document.
Sadly, the ruling administration on the council is not interested in formulating a plan that is in the best interests of all—I stress, all—York residents, but I know that local communities will rise above the style of smoke-and-mirrors politics that it appears to conduct locally and will be united and resolute in their opposition to the plan. If the plan is implemented, it could turn a beautiful historic cathedral city, surrounded by green-belt land, into a west Yorkshire suburb of Leeds, by destroying the very land that captures its beauty, as it has done for centuries.
I fear that, in spite of the opposition of the residents whom it is supposed to represent, the council will push ahead with its proposals. I therefore conclude by asking my right hon. Friend the Minister what advice the Government can give my constituents, who are desperate to protect York’s green belt from the threats posed by the council’s draft local plan. In turn, what advice can the Government give the local authority to ensure that its plan is representative of the wants and needs of all York residents, not just those in the ruling administration?
In closing, I want to add my voice to recent calls for an amendment to the NPPF, the better to strengthen the protections afforded to green-belt land and to prevent unruly local authorities from using localism as a means of disregarding all other planning policies.
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
It is a pleasure, Mrs Osborne, to serve under your chairmanship for the first time. I thank my hon. Friend the Member for York Outer (Julian Sturdy) for having invited me, a few months ago, to visit the fair city of York and, as he pointed out, to spend a certain amount of time stationary in a traffic jam, which did of course allow me to appreciate some of the wider environmental beauties of the city. He was kind, but too kind, to me; I might be honourable, but I am rarely right, and I am certainly not yet right honourable.
Let me start by clarifying green belt policy in the national planning policy framework. Although my hon. Friend referred to it, it is important to understand quite how clear and how strong that policy is. Paragraph 79 of the NPPF says:
“The Government attaches great importance to Green Belts. The fundamental aim of Green Belt policy is to prevent urban sprawl by keeping land permanently open; the essential characteristics of Green Belts are their openness and their permanence.”
That could not be clearer, which is why, when we were going through the process of revoking the regional strategies that were so unpopular and that also failed to deliver their own targets, we listened to representations from my hon. Friend and many others that we should save the policies in the regional strategy for Yorkshire and Humberside to ensure that protection for the green belt around the city of York should remain, until that can be permanently defined in the local plan. I certainly welcome the fact that there is now a local plan process under way in York—it is long overdue—and that that will involve a determination of the boundaries of the green belt of York for the long term. The NPPF says:
“Once established, Green Belt boundaries should only be altered in exceptional circumstances, through the preparation or review of the Local Plan. At that time, authorities should consider the Green Belt boundaries having regard to their intended permanence in the long term, so that they should be capable of enduring beyond the plan period.”
It is important that the conversation that is taking place in York at the moment has a lasting outcome.
The priority that we give to the green belt has also been recently reflected in a written ministerial statement published by the noble Baroness Hanham in the other place. She made it clear that we will be looking more closely at applications for Traveller sites in the green belt, and that we will consider calling in more of those applications than we have in the past, because we are concerned about the balance of policy, as set out in the NPPF. We recognise that there is a need to provide sites for Travellers, as there is a need to provide housing for all members of the community, but it must be properly balanced against the protections for the green belt. We do have a concern that, in recent decisions, that balance has not been completely right.
As my hon. Friend will be aware, we have also clarified our views on the siting of renewable energy infrastructure, especially onshore wind turbines. Recently, on 6 June, the Secretary of State said that the Government will issue new planning practice guidance to assist local councils in their consideration of local plans and individual applications. That will set out clearly that
“the need for renewable energy does not automatically override environmental protections and…decisions should take into account the cumulative impact of wind turbines and properly reflect the increasing impact on (a) the landscape and (b) local amenity as the number of turbines in the area increases”.—[Official Report, 6 June 2013; Vol. 563, c. 114W.]
I hope that my hon. Friend is reassured that those two decisions, on Traveller sites and on wind farm applications, show that we are determined to protect and reassert the protections for the green belt that are contained in the national planning policy framework.
It is important to note that, as the hon. Member for York Central (Hugh Bayley) pointed out, York has an intense housing need. That is evidenced by the house prices in the city of York, which are well ahead of many of the other communities in the area. The NPPF is clear also that it is the responsibility of every local authority in its local plan to make provision for that housing need and specifically to bring forward sites that are immediately deliverable and developable to meet that housing need over the next five years. That, too, is an important priority in the national planning policy framework.
In a sense, the Government and I make no apology for the fact that we do not believe that it is right for Ministers to decide how any local community should balance the important priorities in the NPPF. That is something that can only happen through a local conversation between all parties about a local plan. I welcome the fact that that local conversation has now started. It was a great abdication of responsibility by previous councils that they failed, over many decades, to conclude that conversation.
My hon. Friend is absolutely entitled, encouraged and empowered to take part in that local conversation and to represent the views of his constituents as eloquently and as passionately as he has today. It is not for me as a Minister, nor for any other Minister, to interfere in that conversation or to indicate that one particular policy in the national planning policy framework is more important in a particular set of circumstances than another policy. The importance of the protections for the green belt is clear. The protections are clearer than they were in any previous set of national policy, but so, too, is the requirement to meet housing need.
Almost the most important thing in the national planning policy framework and in the Government’s overall approach to planning—I hope this will provide some reassurance to my hon. Friend—is that development must be sustainable. That means that the development proposed in any local plan must be sustainable, and that any individual planning decision to allow for certain developments must also demonstrate that the particular application is sustainable—environmentally, economically and in terms of the transport infrastructure. All those things are important, and there is no point for any local authority anywhere in the land to propose development in a local plan that is transparently not sustainable, which is where the role of the Planning Inspectorate comes in through the examination.
When the draft has been consulted on and a final draft has been produced, the local plan will be presented for examination by the inspector. My hon. Friend will have, at that point, yet another opportunity to make the arguments on behalf of his constituents as to why he feels that elements of the plan, if it has not been amended by that point, are still not sustainable. The inspector will consider all the evidence and submissions in making a final determination as to whether the plan is acceptable.
I am afraid that, because of that process, I must resist my hon. Friend’s plea for an amendment to the national planning policy framework. It is perhaps a disease that all politicians on both sides of the House suffer from, and I am certainly not immune to it, to think that the answer to every particular problem is a change in national policy. I fear that that is not the case. The virtue of the national planning policy framework is that it is crystal clear, but it will only retain that virtue if it remains stable, and if we are not permanently fiddling with it to try to suit it to a particular circumstance. None the less, I can reassure my hon. Friend that the protections for the green belt are very strong, and he has all the arguments well marshalled to make his case in the local plan process.
Co-operatives
(11 years, 4 months ago)
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Mr Philip Hollobone (in the Chair)
I have a wealth of talent before me to debate the effect of co-operatives on the economy, and I call Chris Evans.
Chris Evans (Islwyn) (Lab/Co-op)
Thank you, Mr Hollobone; you are too kind. It is a pleasure to serve under your chairmanship once again.
It gives me great pleasure to have secured the debate right in the middle of co-operatives fortnight. I am a proud member of the Co-operative party and take great pride in sitting as a Co-operative Member of Parliament. The Westminster group of Co-operative MPs is the largest that it has been for 95 years. I am pleased to work alongside colleagues in the Scottish Parliament and the National Assembly for Wales, together with thousands of councillors around the country.
The purpose of this year’s co-operatives fortnight campaign is to focus on helping people to find co-operatives they love, whether they are providing sparkling wines or energy, and whether they are online or in-store. The campaign also gives Members from all parties in the House an opportunity to learn more about what is happening co-operatively in their constituencies.
Co-operation runs through the fabric of the south Wales valleys, where I was born and brought up, and which I am proud to call home. Indeed, family legend states that the last words of my great-grandmother, before she passed away at the age of 104, were, “It’s okay; I’m with the Co-op.” From Tower colliery in Cynon Valley to local corner shops, co-operatives permeate every strand of our society.
The debate affords me the opportunity to speak about the Islwyn community credit union, which offers saving accounts and small loans to members who, after a few months, become eligible for a loan at low interest rates. The great thing about the credit union is that its methods are working. In the past few days, the coalition has announced its intention to crack down on payday lenders. I am pleased that it is credit unions such as the Islwyn community credit union that have been at the forefront of the fight to turn households away from doorstep lenders and payday loan companies, which for too long have had a stranglehold on the type of valley community that I represent.
I feel extremely privileged to have been able to share a number of milestones with the Islwyn community credit union, most notably when it celebrated lending £1 million to families across my constituency of Islwyn. The credit union is an example of the impact that co-operative organisations can have on a local economy, which is why I am pleased that the co-operative sector has outperformed the rest of the UK economy since the financial crisis began.
With every pound spent in a co-operative generating an additional 40p for the local economy, the success of co-operatives can only be a good thing for the communities that we represent. Co-operatives are popping up all over the country, even in areas that do not have the history of co-operatives enjoyed by areas such as mine in the south Wales valleys. Since 2008, the UK co-operative sector has grown by more than 20%, and co-operative businesses in the UK now have a turnover of more than £36 billion a year.
As other industries and sectors feel the impact of the recession and the economic crisis, the number of co-operatives has increased in each of the past five years. There are now 6,169 co-operatives nationwide, 446 of which are based in Wales. Last year alone, the number of co-operatives throughout the country increased by 236, which was a rise of 4%. Membership of co-operatives is also growing month by month and now stands at more than 15 million, which is a 36% increase in membership since 2008.
The co-operative sector has also diversified over the past five years. More and more people understand that co-operatives are not just supermarkets or—as my great-grandmother understood—providers of funeral services. They also operate in other parts of the economy, from health care to housing, from farms to football clubs, and from credit unions to community-owned shops.
While preparing for the debate, I read about the increase in community-run shops. With more and more commercial shops struggling in the recession, communities are coming together to preserve stores that offer valuable services to a town or village, such as a local bakery. Food stores that can no longer cope with high rents or costs and therefore have to leave the local high street are being replaced not by new commercial businesses buying vacant units on the high street, but by local people who know at first hand how valuable local stores are to the communities in which they live. Some 6% of commercial village shops are being taken on by groups of residents who are determined to ensure that shop closures do not leave a gap in their community. These stores are not only having an effect on local life, but making a significant contribution to the UK economy.
The Co-operative Group has a work force of almost 100,000 people, which makes it one of the largest private employers in the UK. In 2012, community shops had a combined turnover of £49 million and more than 50,000 people were involved in some way in a community-run enterprise. The Plunkett Foundation reports that there are more volunteers working across co-operative community shops in the UK than there are helping national charities. Such co-ops are having a long-term impact on the economy; they are not a short-term fix to keep a store open temporarily before a commercial company can come in and take it over. Research by the Co-operative Group indicates that while only 65% of conventional businesses survive for their first three years, more than 90% of co-ops are still in business after their first three years. Those co-ops are local enterprises that create jobs and employ people on local high streets. In turn, those people are walking up the same high street and spending their wages in local shops. Co-ops and their staff are putting money straight back into the economy and the small businesses that make up our communities.
I was especially interested to read the results of a recent YouGov poll that asked people for their thoughts on co-operative businesses. Some 52% of respondents described co-operative organisations as “trusted”, compared with a figure of just 7% for plcs. We see that though the work done by societies all around the country. The top three words that came to people’s minds when they were asked their views on co-operatives were “fair”, “democratic” and “trusted”. That tells me that, unlike almost every other profession and institution in the UK, co-operatives still have one thing that the rest do not seem to have: that simple word “trust”.
Every Member will have felt the distrust that the public have developed for politicians, but we all know that it does not stop there. The police, journalists and bank managers—all good professions—have been damaged in the past decade, and the trust that people once had in them has all but gone. When I hear about community-run co-operatives, it says to me that they can fill the gap. Quite simply, people have to trust something, and if they do not trust businesses, banks or whatever, they can trust local co-operative organisations. In society, even outside co-operatives, it is important that people have trust, because without trust, people cannot believe in anything, and that brings about anarchy. However, if trust is still there for co-ops, it shows that they can fill the void so, quite simply, we have an opportunity.
I am saddened that the opportunity to promote co-operatives and mutuals as an alternative is not being exploited by the Government. I have spoken about the impact of co-operatives on the economy, but I am worried about how seriously the Government are taking them. We have a heard in the past few weeks from Government Members about the place of the Co-operative party in Westminster, but I know that a Conservative co-operative movement was recently established, and its members will appreciate some of the points that I am about to make.
Let us take the example of the Energy Bill. When the Secretary of State for Energy and Climate Change was appointed, we were promised a “community energy revolution”. My Labour and Co-operative colleagues on Labour’s shadow Energy and Climate Change team worked hard to make sure that he stuck to that commitment. Co-operative energy companies, such as the one created by the Midcounties co-operative, have an important role to play in the energy market. We all want to see large community projects such as the Westmill wind farm co-operative in Oxfordshire, but there will be less and less chance of such projects popping up across the country if the Government do not give co-operatives proper support.
I do not have to tell you, Mr Hollobone, that the energy industry faces a lot of challenges. There is widespread opposition to projects such as wind farms, which will become more and more of a reality in the coming years whether we like it or not. What frustrates me is that a lot of that opposition is completely unnecessary; it could be avoided if the Government further supported co-operatives and did not overlook them ahead of scrutiny in this place.
Research commissioned by the Co-operative party has shown that two thirds of people who would oppose wind turbines near their home would change their mind if the turbines belonged to the community. When people were surveyed on their perception of energy companies, the results showed that the public were 4.5 times more likely to “completely trust” a co-operative energy supplier than another energy supplier. This was what I was getting at when I spoke about trust: people instinctively trust co-operative projects. However, more has to be done if we want co-operatives to continue to stimulate the economy in sectors such as energy.
I have spoken numerous times in the House about housing, because we are facing a genuine housing crisis. There can be little doubt that investing in infrastructure is the way to stimulate and grow the economy, and the prime way of doing that is house building. If the Government are building new homes, it means that people are in work and that building firms can bid for contracts, and it also helps to bridge the gap that is starting to develop between supply and demand. I see that in my constituency surgery each week. When people affected by the bedroom tax ask me, “Where am I going to live? The council do not have any homes and I cannot stay where I am,” I am sorry to say that I do not have an answer for them.
The majority of social tenants in Caerphilly county borough council are in two or three-bedroom homes, and there are no one or two-bedroom homes for them to move into. In parts of my constituency such as Crumlin, 70% of tenants are thought to be in under-occupation. In Newbridge, the figure is 60%. Everyone in the borough knows that there are no homes to move into, but what choice does the council have but to implement the policy? These families are victims of legislation—that is why they are suffering—yet the Government still do not build homes. That frustrates me, because the Government could look to co-operative housing to fill the gap.
Throughout Europe, 10% of people are in housing co-operatives, but the figure for the UK is only 0.6%. In Sweden, co-operative housing tenure has existed since 1920 and nearly one fifth of all housing is provided in this way. In Poland, 3.5 million homes, which account for almost 30% of the total housing stock, are managed by a housing co-operative.
Co-op housing works in different ways in different countries, but the basic principle is no different from that of credit unions or community-owned shops. Such housing providers are jointly owned and democratically controlled by their members. Community co-operatives have rescued pubs and shops in the UK, but we do not seem to think of the impact that they could have on the housing market and, subsequently, our economy, so an opportunity is being missed. David Rodgers, the current president of the International Co-operative Alliance, said:
“Britain has stood still for two and a half years and has failed to recognise the contribution co-operative housing can make”.
Such opportunities are not receiving the support that they should get.
My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) introduced the Co-operative Housing Tenure Bill last year, which would have had a real impact and improved the legislative framework for co-operative tenure. The Bill would have given people an alternative to owning and renting, but the Government did not support it. They like to talk about house building as a way of driving economic growth, and they went as far as explicitly saying in the coalition agreement:
“We will promote shared ownership schemes and help social tenants and others to own or part-own their home”.
However, it seems that co-operative housing is another area in which the Government talk a good game but fail to deliver.
In respect of financial mutuals, the Government could look at co-operative examples to help to stimulate the economy. After three years in this House, talking about the economy month after month, I have discovered a few things. First, it is fashionable to blame the bankers for everything. I admit that when I first came to the House, I was guilty of doing the same thing, like everybody else, even though I used to be one. Secondly, nobody seems to be coming up with any real alternatives to our financial system to avoid scandals such as Lehman Brothers in 2008 and more recently involving LIBOR.
It seems a while since the Prime Minister and Deputy Prime Minister stood together in the rose garden of No. 10, but it was only three years ago. Once again, the coalition offered high hopes to reform our banking sector, pledging to
“bring forward detailed proposals to foster diversity in financial services, promote mutuals and create a more competitive banking industry.”
Yet when the Government had an opportunity to put these words into action, what did we see? Absolutely nothing. If the coalition had been serious about promoting mutuals in our financial sector, they could have re-mutualised Northern Rock. Instead, the Treasury sold the bank to Virgin in a deal that the National Audit Office has subsequently suggested did not give the taxpayer good value for money. Co-operative colleagues tabled a raft of amendments to the Financial Services Bill earlier this year that would have forced the Government to make good on their pledge by introducing financial inclusion, education and transparency, but once again the amendments were chucked out and the Government ploughed on with the same old approach.
Last year, I tabled a private Member’s Bill, the Banking (Disclosure, Responsibility and Education) Bill. It is based on the Dodd-Frank Act in America, which enables every bank transaction to be monitored. My Bill would require banks to produce a report specifying who they are lending to, to find out about those excluded from financial products from mainstream banks.
When we talk about people excluded from financial products, we are not just talking about those without complex bank accounts. We are talking about the 9 million people without access to any credit whatsoever from banks. These households have serious difficulty getting access to essential services such as energy, water, land lines and the internet. A situation like that creates a breeding ground for loan sharks and high-interest lenders.
Where I grew up in the south Wales valleys, we lived on an L-shaped street. On Monday nights we would see a white car come over the top—an XR3i, for hon. Members who remember those souped-up cars. I can remember a woman getting out of the car, and all the doors were slammed shut. All the kids were pulled in from the street. It was the woman from the Provident. My mother claimed that she smelled of cheap Estée Lauder perfume. I do not know what Estée Lauder smells like, but my mother said it was cheap. That woman would knock on someone’s door and shout, “You owe me £400”. That was wrong, but everybody in our street thought that person owed £400. “I’ll get you next week, love”, she used to say.
I remember my mother panicking about whether we had enough money for the Provident. We would get our hands down behind the settees, looking for spare change to get it together to pay the woman, because we did not want her shouting down at us. We felt that climate of fear at 6pm every week, on a Monday. The saddest thing is that I know that is still going on, not just in communities like mine, but in communities throughout the country.
Andy Sawford (Corby) (Lab/Co-op)
My hon. Friend rightly hits on one key benefit of co-operatives, which is their values. He also reminds me of my own childhood. I remember that Sid, who ran the Co-op at the bottom of the road, ran a book based on trust. Every so often, my dad would settle up. Occasionally, we hid in the kitchen from Tommy the milkman, because mum had not got enough money to pay him that week. In the end the accounts were settled, because the Co-op was part of our community and there was a relationship of trust between us. That is one of the key benefits of co-ops.
Chris Evans
That sums up the benefits of co-ops for so many communities, including mine, and those in my hon. Friend’s constituency. When we grew up in those communities, there was a level of trust. We trusted one another. We knew one another and we grew up in communities where we knew everybody. It sounds romantic to say it now, but we did know our next-door neighbour. I knew everybody in the street that I grew up in. I do not think that I do now. That is the saddest thing.
The important thing is that the co-operatives brought about trust and a sense of values and ethics, which we do not see in society very often. That is why it is important for people to support their local co-operative, such as the one run by Sid at the end of the street, who had a savings club for Christmas. My hon. Friend says that his family used to hide from Tommy the milkman behind the settee. I wonder whether his family still speak to him.
David Mowat (Warrington South) (Con)
Many Government Members accept the points being made about trust and the model of the co-operative. However, I hope that the hon. Gentleman will not conclude without considering the recent collapse of the Co-operative bank and the fact that the co-operative movement chose not to bail it out. The bond holders, many of whom are pensioners and not well off, are having to pay to deal with that. Does he consider that some points made about ethics and trust could be undermined by that? I am not asking that in a pejorative way, but because I am interested in the hon. Gentleman’s reaction.
Chris Evans
There is still a lot to work out with the Co-operative bank. These issues are serious. I am not going to deny those things, but the central thrust of what I am saying is that co-operatives have worked and there is still a lot to done about that.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is appropriate to raise the Co-operative bank in this debate, but when doing so we have to consider the Britannia takeover in relation to the situation that the Co-operative bank finds itself in. It would be wrong to besmirch the values or the running of the co-operative movement during this difficult time. Of course, that situation must be faced up to, but we should still consider that, considering the whole array of banking and financial institutions in this country, the co-operative movement—the Co-operative bank—is still very much up there in terms of best practice in this country, difficult as this time is.
David Mowat
I thank the hon. Gentleman for giving way again; I shall not make another contribution after this. I accept that it was the Britannia. It was also mismanagement of a large IT project. I wonder whether one of the lessons to be learned is that there is a size issue in terms of types of activity: whether something that grew out of being a credit union into something much more than that did not have the management processes necessary. I wonder whether there is an issue there that the hon. Gentleman might consider.
Chris Evans
Not being a member of the management team myself or privy to decisions in the Co-operative bank, the best people to answer that are on the board of that bank. The Britannia takeover was particularly difficult for the Co-operative bank and has had a major effect.
We talk about IT projects, and we have seen such things happen in government as well. My predecessor in Islwyn served on the Public Accounts Committee, and when I worked for him I saw that a lot of problems reported by the National Audit Office were often to do with IT programmes. The lesson to be learned for the Co-operative bank, as with others, is that when investing in IT, if it goes wrong it really does go wrong.
Andy Sawford
I sense that my hon. Friend has many other important issues to address, but does he agree that it is important that we use the right language to describe what has happened at the Co-operative bank in recent months? Terms such as “collapse” are not helpful in assuring savers of the bank’s future. We ought to recognise that, unlike other banks and financial institutions, the Co-operative bank has not sought a bail-out from the Government but has righted itself, and we all should support it in what I hope is a sustainable future.
Chris Evans
My hon. Friend is absolutely right. The Co-operative bank—along with other mutuals—is the only bank that did not take a bail-out from the Government. If we have learned anything from the financial crash of 2008, it is that the language we use can have a serious effect on consumer confidence. I do not think any of us will forget the queues outside Northern Rock on that Saturday, which all came from a few misjudged words. The Co-operative bank is still on the high street, is still flourishing and has righted itself. We all have to be careful in the language we use. As the hon. Member for Warrington South (David Mowat) said, there are lessons to be learned, and I am sure they will be learned in the next couple of years.
We do not want to create a breeding ground for loan sharks and high street lenders. Sadly, Provident, Wonga, Cash Converters and Shopacheck are now household names. When people have nowhere else to turn, and when there is no food in the fridge or money left in the electric, where are they going to go? I spoke earlier about Islwyn community credit union, and I am pleased that in Wales everyone has access to a credit union. I have spoken previously about expanding the role of credit unions, which do not have to lend solely to individuals; they can lend to businesses, too, whether they are micro-businesses or small businesses that cannot get money elsewhere. We need to see more from the Government to promote co-operative finance and mutuals so that they live up to the promises they made when they came into office.
It is worth remembering that conventional banks used £60 billion when they were bailed out, but the mutual sector did not use any money at all. Bradford & Bingley operated as a building society for 150 years, yet it lasted only 10 years as a bank. I hope that the Minister will explain exactly what the Government are doing to encourage mutuality in the banking sector. I also hope he will address the potential for co-operatives in the energy and housing sectors, because I believe they could form the basis for real and lasting economic growth.
I will end by citing a statistic that demonstrates the potential of a co-operative economy. The UK is ranked 15th in global GDP, but the UK co-operative economy is the eighth largest globally. We are clearly doing something right, but with more than 1 million co-operatives in the world serving 1 billion members, we have the potential to do a lot more. There is growing consensus on the factors that serve business excellence—a clear mission, better customer service and, above all, fairness and transparency. At the heart of the success of the co-operative movement are the fundamental values of equality, democracy and participation, and therefore co-operatives should be encouraged and adopted.
Mr Philip Hollobone (in the Chair)
Order. I will call Members in the order on my list. I do not want to call Front-Bench Members any later than 3.40 pm, but I would prefer to call them before. I have four people on my list, and I will take them in this order: Simon Danczuk, Jonathan Reynolds, Tom Greatrex and Andy Sawford. If they are all fair to each other in a co-operative way, everyone should be able to speak.
Simon Danczuk (Rochdale) (Lab)
It is a delight to serve under your chairmanship, Mr Hollobone. I also thank my hon. Friend the Member for Islwyn (Chris Evans) for securing this important debate, which is very much appreciated.
Members present do not need me to tell them, although I will tell them anyway, that I am very proud and pleased to say that Rochdale was the birthplace of co-operatives. I think I am right in saying that the Minister hails from Rochdale, so he will have a good understanding of what I am about to say. The Rochdale pioneers established the very first co-operative on Toad lane in 1844. The building is still there, and it has just been renovated with money from the Heritage Lottery Fund. It is a great museum, and I urge hon. Members to pay it a visit whenever they get the opportunity. My reason for mentioning the Rochdale pioneers is that they are the people who made this debate possible. They established and pushed the first co-operative, and co-operatives have now been taken up across the world. People visit the museum from Japan, Canada, America and all over the world to honour the concept of mutual organisations, of which Rochdalians are rightly proud.
Yesterday, I spoke about the importance of self-reliance and about how Governments can encourage people to do things for themselves. Co-operatives are a great and important example of how people come together to help each other. They are a great example of self-reliance, and one that we should continue to support and celebrate.
In Rochdale alone there are co-operatives of many different shapes and sizes that have a real, positive impact on our economy, the community and the town overall. We have just established the largest housing co-operative in the United Kingdom, Rochdale Borough wide Housing. I spoke to its chairwoman, Lynne Brosnan, earlier today. It is owned by its tenants and employees, who have a major say in how the organisation operates across the town. We are proud of that organisation.
Rochdale has a variety of Co-operative Group stores, travel agents and banks, as would be expected, but it also has a number of smaller co-operatives that have an impact on the economy and the community. I particularly want to mention Sunshine Care. Local authority care workers, all women, came out of the local council in 2009 and came together to establish a home care co-operative. I have met those ladies over the years from before they started to where they are now, three or four years later. They have been through some really tough times and challenges in establishing their co-operative. I spoke to one of the founding members, Christine Bailey, just before this debate, and I asked her how the co-operative is progressing. It now has 34 staff, which is fantastic, and it provides 600 care hours a week to older people. Ideally, older people would want services delivered by people coming into their home to be delivered by a mutual—by those women who have come together to develop this fantastic co-operative.
Sunshine Care is great. As Christine says, there are no directors creaming money off the top of the organisation, so everything the organisation earns goes right back to the workers, who each have a stake—they get voting rights after working for the organisation for six months. Sunshine Care is also a Cabinet Office pathfinder, and the ladies who work for it are proud of their co-operative status, which is important to them.
The Government are considering whether to dilute the value of the term “co-operative.” In their red tape challenge, the Government have been talking about removing “co-operative” from the list of sensitive words, which would be a big mistake. We need to protect, not diminish, the good name of co-operatives. I hope the Government will think twice before doing anything that damages the co-operative brand in that way.
My final point is on Government support for co-operatives. I am a member of the Select Committee on Communities and Local Government, which took evidence on mutual and co-operative approaches to delivering local services—I have the report here. The Minister for the Cabinet Office, the right hon. Member for Horsham (Mr Maude) gave evidence to the Committee. Although I got a good sense that the Government are keen on co-operatives and see them as having a role in the economy, I am a bit concerned about the Government’s response to some of the Committee’s recommendations. There are opportunities for the Cabinet Office, the Department for Communities and Local Government and the Treasury to work better together on promoting and helping co-operatives. There is also an opportunity for the Government to push the banks and other financial institutions, including Big Society Capital, to lend to mutuals and co-operatives.
There is probably an opportunity in tax incentives for co-operatives. We also need to look at the procurement rules, particularly for local government, which could be of added benefit to co-operatives. To give the Government some credit, they established the mutuals taskforce and the mutuals support programme, but there is still more to be done to help co-operatives develop.
Co-operatives make a fantastic contribution to our economy. They are just one of the great things to come out of Rochdale.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I pay tribute to my hon. Friend the Member for Islwyn (Chris Evans) for securing this important debate. In his speech, he not only highlighted some of the best practice in co-operatives but made a strong argument about how many current public policy problems in this country could be addressed by taking a more co-operative approach. In particular, I thank him for mentioning co-op housing and my Co-operative Housing Tenure Bill, which I believe has huge potential to address some of the housing challenges that this country faces.
It is with great pride that I sit in Parliament as a Labour and Co-operative MP. I am fortunate to represent a constituency steeped in the co-operative tradition. The first co-operative store in my constituency was opened in Mossley in 1856, and to this day there is a Co-op store on the same site. The co-op movement was active in parts of my area well before the Labour party even existed, and my constituency, of course, is only a stone’s throw away from the co-operative movement’s spiritual home in Rochdale. It would be wrong to claim that the values championed by the co-op movement—democracy, openness, trust and social responsibility—are characteristic only of areas such as mine or south Wales, because the modern co-op movement is nationwide, but it is not mere coincidence that we started it.
I cite these things not just as an amusing historical preamble to my speech, but because it is extremely important, particularly for those of us on this side of the political divide, to remember and stay true to the political tradition that the co-operative movement represents. For many reasons, not least the success of the 1945 Labour Government in creating national institutions such as the NHS, which celebrates its 65th birthday this week, the Labour party in modern times has prioritised a statist, top-down view of politics, but we should never forget to combine that with the earlier tradition of bottom-up, grass-roots and community campaigning.
It is interesting that in recent years, through the work of the co-operative movement and through things such as community organising and living wage campaigns, we have begun to get back in touch with that tradition, which is good. We should recognise that at times, domination by the state can be as detrimental as domination by the market. The co-operative movement is a fine example of something that has always been balanced between the two.
We are obviously still in a difficult economic situation, facilitated by the failure of the Government’s plans to get things going at any level. I am of the firm belief that co-operatives are vital to the economy of this country, not just for their economic value but for their social benefits. More than 15 million people in the UK—nearly a quarter of the population—are members of a co-operative. That is no small number. It is a sign to all of us that there is more to be explored in co-operatives and the value that they can bring.
I want to discuss how co-ops can have a positive impact on our economy and the social fabric of our communities. It is timely that in a week when the Government have organised a summit with the heads of payday loan companies, this debate gives us the opportunity to showcase the value of credit unions, which offer a brilliant example of how co-operative values can have a positive effect on local economies.
More than 1 million people in the UK use credit unions. Research by Salford university on behalf of Leeds city council found that for every £1 the council invested in credit unions, there was a £10 benefit in retained income for the local economy. Manchester credit union, which serves people in my constituency, can trace part of its roots to the Hattersley area, which I represent. Today it has more than 10,000 members and lends out more than £4 million a year. In a few weeks, Cash Box, a local credit union in Hyde, will open its first high street branch, which we should celebrate.
Yet credit unions account for only a small proportion of the total consumer lending market. Given that their average annual percentage rate is 26.8%, we must ask why people are attracted to payday loan companies that get away with APRs of more than 4,000%. Something has to change. Many of us believe that payday lending in this country is out of control.
Stella Creasy (Walthamstow) (Lab/Co-op)
I apologise for not being able to be here at the start of this debate. My hon. Friend is making a strong case about the importance of credit unions. Does he also agree that one thing that credit unions bring to the debate about the cost of living crisis in this country is how they help members, not just by giving loans but by giving debt advice? That is precisely the value of a co-operative mindset: to think in the long term and to think about the whole person and what they need from services. That is why credit unions are so important.
Jonathan Reynolds
I agree completely. We all pay tribute to my hon. Friend for her tremendous campaign against payday lending. My hon. Friend the Member for Islwyn discussed trust and the wider benefits to a person, rather than the exploitative relationship that many of us believe payday lenders have. My hon. Friend the Member for Walthamstow (Stella Creasy) is absolutely right to address the wider benefits of that approach for people and their communities.
I recognise that the Government have relaxed the rules on how credit unions can operate, allowing them to reach out to more of the community, but to echo the point made previously, I regret the Government’s refusal to accept the Co-operative party’s amendments to the Financial Services Bill, which would have helped promote mutuals and create a more competitive financial services industry. In a climate where people feel increasingly detached from the banks, credit unions based on co-operative principles help local people deal with everyday issues and make a positive impact on the local economy.
My second point involves the relatively new idea of co-operative councils and how they may be able to offer a new, innovative way of procuring local services to meet the needs of local communities in difficult financial circumstances. I read the Select Committee on Communities and Local Government report from 2012, “Mutual and Co-operative Approaches to Delivering Local Services”, particularly the evidence given by Lord Glasman, who said that giving users a stake in public services ensures that they feel that they are at the heart of local government, and that making people feel involved strengthens their relationship with their local economy.
Co-operative and mutual models help councils facilitate long-term jobs and investment and help ensure that long-term social benefit is prioritised over short-term gain. It is no coincidence that a majority of all the councils that have signed up to the co-operative council network already pay their staff a living wage, which is clearly of huge benefit to local economies.
The question that we should ask in debates such as this is how the Government can help organisations and local authorities deliver economic growth by building on best practice within the co-operative movement. One of the key conclusions of “Mutual and Co-operative Approaches to Delivering Local Services” is:
“The Government has a choice, if it wants more mutuals and co-operatives to develop: it must take action to provide support.”
Although a recent Co-ops UK report shows that the co-operative movement in this country is still growing, we would all say that the Government could do more to encourage that development. The Government talk a good game on mutuals, but in reality, many of their proposals for public services are joint venture spin-offs with private partners. Those may have merit, but they should not use the language and clothes of the co-operative movement unless that is truly what they are. The example often given is the behavioural unit in the Cabinet Office known as the nudge unit. It is often cited as a flagship Government mutual, but most of us, as well as most people in Co-ops UK and the Co-operative party, would barely consider it a mutual at all.
As we are in the middle of co-operatives fortnight, this debate is an excellent opportunity to promote the benefits of co-ops. I believe that they have a part to play in the economy of every society, from credit unions that lend to families to the running of core services and bigger ideas such as co-operative housing, which has been mentioned. The positive economic and social impact of co-ops should be celebrated, particularly after the financial crisis, when people are seeking to ensure that we never again get ourselves into the situation that we got into in 2008. I believe that all Members should do whatever they can to advance and promote the cause of co-operatives.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
It is a pleasure to serve under your chairmanship again, Mr Hollobone. I declare my interest as a Labour and Co-operative Member of Parliament. As I will speak about football co-operatives and mutuals, I should put on record that I am the founding chair of the Fulham Supporters Trust.
I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this debate during co-operatives fortnight, as my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) said, and on giving a good and comprehensive summary of a range of current co-operative and mutual issues. I will not repeat the points that my hon. Friend the Member for Islwyn made, but I will touch on a couple of the issues that he raised.
First, my hon. Friend rightly highlighted what the Secretary of State for Energy and Climate Change said about the need for a co-operative energy revolution. It was a cause of some frustration during consideration of the Energy Bill that we were unable to convince him to turn his words into action on a community energy strategy and regarding the threshold for the feed-in tariff for community energy projects. My hon. Friend talked about the extent to which people have an interest in energy, and feel a sense of ownership towards it, as a result of community energy projects. There are a number of such projects across the country, but most are relatively small, and if we are to develop them further, we need to change the threshold.
When the Secretary of State was asked about that during the Bill’s pre-legislative scrutiny, he said, “There aren’t any community energy projects above 5 MW.” Well, that is because that is the threshold, so his argument is self-defeating. Earlier in the debate, I was looking at the amendments that the Government have tabled to the Energy Bill in the House of Lords—obviously, I was listening intently to what everybody was saying, but I was multitasking—and I am pleased to say that there is one that will increase the threshold for community energy projects from 5 MW to 10 MW. Those of us who sought to persuade them can reflect on the fact that our argument was well made and will have an impact, unless the Government decide to vote against their own amendment. The change will be a significant step towards helping to meet the challenge that was rightly identified earlier in the debate.
I also want to touch briefly on housing and housing co-operatives. I am pleased and proud to have the West Whitlawburn housing co-operative in my constituency. Obviously the Minister is familiar with Rochdale, but I would not necessarily expect him to be familiar with parts of Cambuslang, in my constituency. On all the neighbourhood statistics available, Whitlawburn is among the most economically deprived neighbourhoods in Scotland. Figures on health conditions, educational attainment, employment and income are collected slightly differently in England—and, I presume, in Wales—but Whitlawburn would probably also come pretty high up any list measuring those things across the UK.
Several years ago, the West Whitlawburn bit of the housing estate in Whitlawburn became a co-operative, and there is a striking contrast between the standard of the housing in that co-operative, given the capital and energy-efficiency improvements that have been made, and the standard of the other housing, which is literally across the road. That is partly because of the real impetus that has come from those who came together to form the co-operative, which is about not only the mechanisms involved in driving investment but, just as importantly, the attitude and ethos that have become apparent. Just last week, along with a colleague from the Scottish Parliament, the local MSP James Kelly, I was pleased to be able to talk to the members of the very engaged management committee, who are all tenants and members of the co-operative. They take their work very seriously, and their attitude is all about what they can do to improve housing in their co-operative and to maintain that improvement, as opposed to expecting somebody else to do things for them. That makes an important point about the ethos of co-operatives.
The area is relatively small, however, and the co-operative is not immune from the impact of Government policies. The bedroom tax or the spare room subsidy—whatever label the Minister uses—is having a considerable impact in West Whitlawburn, where 67% of tenants are on housing benefit. The housing association has found—it has been able to do so because it is relatively small— that 30% of its tenants, or 200 people, are affected by that measure. Its housing stock consists mostly of accommodation with two or three bedrooms, and there is a problem of people needing to move from three bedrooms to two, or from two bedrooms to one. People of pensionable age are not impacted, however, so we have the bizarre situation of the housing association almost considering seeing whether people who are in receipt of state pension and live in one or two-bedroom accommodation will swap with working-age tenants living three or two-bedroom accommodation. The policy will have a significant impact on the housing co-operative as a result of rent arrears. The co-operative does not want to evict its members—nobody wants that—but the financial effects of the policy could have a significant impact on what it is trying to do.
The third issue I want to touch on is football supporters’ trusts, which are an important form of mutual activity. People will be aware that the trusts were born out of the co-operative movement with the support of Supporters Direct. There are now several supporters’ trusts throughout the country, and there are good examples of trusts that are completely or partly in control of running clubs in Wimbledon, Portsmouth, Swansea and Manchester. In other cases, football supporters’ trusts are trying to take a role in running clubs, including Heart of Midlothian in Scotland. In every case, supporters’ trusts have tried to take a role in the ownership and running of clubs when those clubs have been in crisis and everyone else has walked away.
However, I want to draw the Minister’s attention to the example of the trust in Swansea, given its economic impact. Swansea was basically a bankrupt club, and it was sold on for £1. The supporters’ trust was formed and took a role in the club’s ownership, and it has been an integral part of the club since then. Over a couple of seasons, the club has gone from 90th out of 92 in the league to being an established premiership club. It has won the league cup, and it will be playing in Europe next season. All that involved a role for supporter ownership and supporter control, which is a form of co-op.
There have been many debates about football governance—I have spoken in most of them—so I do not want to repeat any points about that, but I do want to talk about clubs’ economic impact. Football clubs have a significant local economic impact—directly and indirectly. When Hull was first promoted to the premiership, people there would have talked about the impact on the city of visiting supporters and the attention that comes with having a top-level club. The same happened when Blackpool was in the premiership, and the same has happened with Swansea. However, when clubs are driven and run by people who are involved in the local community, they are more inclined to ensure that some of their spending power and economic activity benefits that community. Trusts reinforce local economic activity, so they should be encouraged, treasured and nurtured.
Although this is not part of the Economic Secretary’s brief, he will know that the coalition agreement included a commitment to encourage and foster fan involvement in, and ownership of, football clubs. The Minister for Sport, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), has mentioned that commitment a number of times, and he has tried to persuade football authorities to act on it, although I think we are getting towards the end of that road, given the intransigence of the authorities. If the coalition wants that commitment to come to fruition, it might have to take action by forcing the football authorities to do what they seem not to want to do. The coalition should encourage fan involvement for the good reason that it will not only sustain football clubs, but encourage the economic activity that happens when trusts are involved in the management structure, as we can see from the examples I cited. I hope that the Economic Secretary will reflect on that, even though it is not his direct responsibility.
Mr Philip Hollobone (in the Chair)
Our next speaker might be dangerously overqualified because he comes from Desborough, one of the famous co-operative towns in Northamptonshire, which now lies in the Kettering constituency.
Andy Sawford (Corby) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hollobone, as you are my near neighbour. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing this important debate and on opening it in such great style. He covered a broad range of issues relating to how the co-operative movement benefits our economy.
Hon. Members have made many claims regarding the strong co-operative traditions of their constituencies, and I do not dispute the fact that Rochdale is the home of the co-operative movement. I can say, however, that my constituency, with its previous boundaries—you, Mr Hollobone, will understand this, because the Kettering and Corby constituencies were combined at that time—elected the first ever Co-operative MP. Alf Waterson was elected in 1918. Samuel Perry, the father of the tennis legend Fred Perry, was subsequently elected to be the Co-operative MP several times. Samuel Perry was a key mover in joining the forces of the Labour and co-operative movements around the UK.
The driving forces behind the radicalism of people in my constituency, in electing the first Co-operative MP, were the chapels, the boot and shoe workers and, in particular, the blast furnace men’s union at Corby, which adopted Alf Waterson as its candidate. The political movement was connected to an economic movement at the time, as ordinary working people in Northamptonshire came together through co-operatives to try to make a better life for themselves. Their values still hold true today in the co-operative movement—values of self-help, self-responsibility, democracy, equality, equity and solidarity.
In the tradition of the founders of the co-operative movement, co-operative members today—and I am one, and should declare an interest on that account, and as a Labour and Co-operative MP—believe in the ethical values of honesty, openness, social responsibility and caring for others. The co-operative principles are guidelines by which all co-operatives today put their values into practice. Those seven principles are voluntary and open membership; democratic member control; member economic participation, empowering those members; autonomy and independence; education, training and information; co-operation between co-operatives; and concern for community.
There are many benefits to the way in which co-operatives put their values into practice today, in addition to what we might see as core economic benefits. There are thousands of community initiatives around the country, including some in my area. The co-operative movement in the UK has been a leading force for sustainability. There is a significant focus in the Co-operative retail group at the moment on reducing waste. The movement has been a leading force in promoting fair trade in Britain, and I am pleased to say that fair trade sales in co-operatives are rising year on year. Indeed, the Co-operative helps us to celebrate Fairtrade fortnight across the UK.
The co-operative movement has championed staff volunteering. Co-operatives UK, which is one part of the movement in the UK, estimates that the staff time it donates each year is worth about £1.7 million. There are programmes such as the Skills4Schools campaign, which helps to promote numeracy in primary schools and financial literacy in secondary schools. The initiative Farm to Work has led to thousands of primary schoolchildren visiting co-operatives at working farms. There are many ways in which the values of education, training and information are still at the heart of the co-operative movement. Co-operatives are engaged in the education system not only through Skills4Schools but in many other ways. I am pleased with the increase in the number of schools opting to become co-operative trust schools and co-operative academies.
Today’s focus is, rightly, as we seek to get the economy growing again, on the economic benefits of co-operatives. The number of entrepreneurs, employers and communities in the UK that own and control their businesses through co-operative enterprise has reached an all-time high, with a record 15.4 million membership of co-operatives. That is an increase of 36% since 2008 and 13.6% in the past year. The number of co-operative businesses in the UK has also risen by 28% since 2008 or the onset of the recession. The recent report published by Co-operatives UK, entitled “Homegrown: The Co-operative Economy 2013”, shows that co-operatives have a £37 billion turnover in the UK economy.
We might wonder why co-operatives have grown, at a time when little seems to be growing in this country. I think that it is because of the tough economic trading conditions, which have encouraged more and more Britons to turn to co-operatives to take greater control of their destinies and grow their own way out of recession. The Co-operatives UK report highlights the fact that co-operative shops had a combined turnover of £50 million in 2012, with more than 50,000 members. Those who have chosen the co-operative option, who are growing their own co-operative enterprises, include entrepreneurs, employers who share ownership of their firms, communities, customers and even sports fans, as my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) highlighted, who want to own and run their clubs. The growing appeal of sharing ownership, profits and control in line with the traditional values—democratic member control, voluntary and open membership, and autonomy and independence—has, in a diverse co-operative economy, brought about community pubs, foster care and child care providers, and multi-million pound co-operatives such as Co-operative Energy. In the energy setting, in addition to Co-operative Energy, we want many more mutual, local community co-operatives. That is why I support the strong points that my hon. Friends have made about amendments to the Energy Bill. I hope that the Government will now see sense on that matter, as I understand amendments have been made in the Lords.
People are taking action to form co-operatives because they want a say in what matters to them. In a time of limited economic growth and social challenges, people’s appetite is to seek independent control, to run a fair organisation that benefits all, and to put increasing importance on planning for the long term.
The recent study of the effect of co-operatives on local economies carried out by the independent economic analyst K2A showed that money spent by customers increases in value as it goes to local suppliers, to customers as a dividend, and to employees in wages; they in turn spend a proportion of their money locally. The estimates, using the benchmarks that are accepted around the world for examining the value of business in local economies, are that co-operatives generate an additional £40 for the local economy for every £100 spent by a customer. Overall, that means that co-operatives, rather than generating profits for outside investors or national or even global suppliers, generate £100 million for local economies.
Gavin Shuker (Luton South) (Lab/Co-op)
Does my hon. Friend agree that the impact of co-operatives in the economy is felt not only locally but in tax revenues to the Exchequer, which pay for public services? To cite a simple example, there has been concern about the levels of tax paid by some water companies. In comparison, Welsh Water is a co-operative that does extremely well on that front and on environmental sustainability.
Andy Sawford
My hon. Friend is right to highlight the importance of Exchequer receipts from co-operatives, not only through business rates and other forms of taxation paid by those businesses, but also because co-operatives in the UK employ so many people who are economically active and who contribute to tax returns. That is one of the benefits of co-operatives, and I am pleased that my hon. Friend brought it up.
As for local co-operatives, the secretary-general of Co-operatives UK describes the effect of keeping so much money in the local economy, and generating additional value there, with the term “sticky money”. Co-operative money is sticky money: I think it is a good term. He says:
“It stays local, because co-operatives employ local people, are owned by local people and try to source from local firms that do the same. Every pound spent in a co-operative shop is a real boost to the local economy.”
Co-operatives are known as trusted local businesses. Indeed, my hon. Friend the Member for Islwyn has told the Chamber about his experience of that. I share that experience of growing up, and the values that can be seen in co-operatives. Today, the value that they offer to communities is incredibly important.
In my community, the main co-operative is the Midlands Co-operative. It is one of the largest independent retail co-operative societies in the UK. It employs 7,000 staff, is member-owned and has a board of directors, one of whom—I should declare an interest—is my father. It had gross sales of £670 million and a profit of £24.3 million in 2012-13. It operates across a wide range of sectors—food, funeral services, crematoriums, transport—and has more than 300 trading outlets in 12 counties. I want to highlight its achievements.
The Midlands Co-operative Society was recognised as co-operative of the year, which I am sure you welcome, Mr Hollobone, as you must shop, as I do, in a Midlands Co-op in your constituency. It has the highest trading profit of all independent co-operatives, and it rewarded its members with a £4.3 million payout; it created 300 additional jobs in its trading area; it invested more than £0.5 million to help its employees develop their skills; it funded local community projects to the tune of £1.5 million; and it has refurbished many of its outlets to make them energy-efficient, reducing energy consumption.
All the Midlands Co-op stores have a locally sourced range—I have already referred to the initiative to take primary school children to the co-operative’s working farms—and the supply chain benefit of sourcing locally from firms that are less than 50 miles away is incredibly important. In my area, and yours, Mr Hollobone, the supply chain benefit is known as a “Taste of Northamptonshire”. The Midlands Co-op helps vital community initiatives, so I was pleased to support the Corby women’s choir recently at a great local event, and I welcome the news that the co-operative is backing grass-roots football in Thrapston in east Northamptonshire. The benefits are enormous.
I want to say a few words in support of the comments made by my hon. Friends about co-operative housing. I was pleased to hear David Rodgers mentioned in his role in the International Co-operative Alliance, but I have known him for some years as the former chief executive of the Co-operative Development Society, which I think would lay claim to being the largest co-operative housing organisation in Britain—we can have that debate with my hon. Friend the Member for Rochdale (Simon Danczuk) another time—not only for owning many thousands of units of housing directly, but for supporting co-operative housing organisations throughout the UK. The CDS has been a pioneer in introducing new models of intermediate market housing—desperately needed in this country—by looking at examples in north America, especially Vermont, where co-operative housing makes a huge contribution to the housing supply and in particular to intermediate market housing, but also in northern Europe. In cities such as Oslo in Norway, more than half the housing in the city is co-operative housing.
We need to look at the real potential offered by co-operative housing models in this country. In particular, we could link co-operative and mutual models with community land trusts—for rural as well as urban areas—to engage communities in bringing forward significant new developments. Community land trusts offer real potential to capture land values—for example, exception sites can be made community land trusts—and that is something we ought to look at. Using the mutual models, benefits such as corporate mortgages and so on can reduce the cost to people of purchasing their own home. In particular, under flexible models of share ownership, people can buy equity shares in the overall housing trust, which they take on with an element of housing equity growth, if that happens over the time that they are in the housing. That is much better and more flexible for people than traditional ways of getting a foot on the housing ladder or a stake in the housing market.
The community mutual model, as developed in particular by organisations such as Mutuo, has been taken up in Wales. There are community mutuals in Rhondda, in Torfaen and elsewhere in Wales, but I want to see more in England. I also want to see more community gateway models in England, such as those developed by the Confederation of Co-operative Housing; community gateway housing mutuals exist in Preston, Watford, Lewisham and Braintree. On hybrid mutual schemes, Rochdale Boroughwide Housing, which has 14,000 units—I understand why my hon. Friend the Member for Rochdale says that it is an incredibly large and important co-operative—is using an innovative new membership-based model of housing provision.
Those are real opportunities, but I hope that the Government will look at some of the legislative opportunities that might be available in the next few years, including the important Bill to support co-operative housing introduced by my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), to better support the development of co-operative models in the UK economy. Co-operatives can provide enormous benefit and could prove to be as strong in this century as they were in the last.
Mr Philip Hollobone (in the Chair)
A last-minute entry from Stella Creasy—I thought you would not be able to resist as soon as payday loans were mentioned.
Stella Creasy (Walthamstow) (Lab/Co-op)
Thank you, Mr Hollobone, for your kindness in letting me speak in the debate.
I pay tribute to my hon. Friend the Member for Islwyn (Chris Evans) for securing a debate that is incredibly important to us all in the co-op movement. I want to make a plea for the Minister to understand why it is so important for us in the co-op movement—those of us who have worked in co-operatives—to start from the mindset of co-operativism, rather than models.
It seems that the debate requires us to put on record the co-operative history of our constituencies. I am afraid that Walthamstow cannot—unusually—claim to be first in this matter. We can trace our co-op history back to 1840, and the former national offices of the co-operative movement are in Walthamstow—we have a beehive on Hoe street to prove it.
Walthamstow has a strong co-operative concern because we recognise what my hon. Friend the Member for Corby (Andy Sawford) was setting out: the powerful case, especially in recent economic times, for co-operative values and how they work. Why has the co-op economy grown by nearly 20% in the past five or six years compared with what we have seen in our national economy? In Walthamstow, we would argue that it is precisely because of the mindset that co-operativism brings with it—the idea that we work for a broader set of values, and that what we do together, through democratic participation, can reap rewards well beyond mere financial profits. I am disappointed that the hon. Member for Hereford and South Herefordshire (Jesse Norman), the founder of the Conservative co-op movement, is not present in the Chamber, because we are concerned that it has a preference for considering the technicalities of how people work together, rather than why they work together.
I liked the phrase “sticky money” that my hon. Friend the Member for Corby used. A fantastic study from Lincoln shows that co-operatives bring about a multiplier effect that is around six times that of ordinary organisations in a community, so they bring resources into an area. The co-op mindset brings unparalleled creativity to thinking, and I urge the Minister to look at the work of some of our co-op councils. On a recent visit to Oldham, I was particularly struck by the council’s work on debt and financial difficulties. The co-op council negotiated a 30% discount on bus passes for those who joined the credit union. The scheme has been a fantastic success: the number of people joining the credit union has increased massively, thus increasing the amount of money available to lend, while the scheme has been cost-neutral for the bus company and has helped to get the city moving, so it is win, win for everyone. Such creative thinking takes place when our bottom line is the people we serve, meaning that we see people as part of the co-op, rather than just customers. The danger of looking only at employee co-ops—the John Lewis model—is that we miss out on the vital impact of working with the users of our services.
I am also struck by the work that is being done in Lambeth. My community in Walthamstow has a big problem with gangs, and the work that Lambeth is doing on youth services and co-ops is fantastic, as is the response from the local community, so I encourage the Minister to look at that. I also encourage him to go to see the energy co-op in Brixton. I am sure that my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) was talking about such co-ops earlier, as well as about the work of Supporters Direct and especially the “Show Wonga the Red Card” campaign. Whether on housing, social care or energy, co-op solutions are bringing a new creativity to all our public services that is benefiting users and reducing costs.
We know that the market alone cannot provide, which is the problem that we have with payday lenders. As you suggested, Mr Hollobone, I cannot go through the debate without talking about that problem, because the market is failing consumers. Co-op solutions are providing the answers in communities such as Walthamstow, where we have 18 of those lenders on our high street alone. I encourage the Minister to think again about his opposition to a cap on the cost of credit, because only when the cost of credit is capped and we examine how to lend to people responsibly, as social finance models and credit unions do, will a difference be made.
We need co-operative thinking not only in the credit union movement and on payday lending—we need the cap and an expansion in affordable credit—but in our social care. The Minister should look at Nottingham Circle’s adult social care or at co-operative schools. When we work together as a society, and as the co-op movement is ingrained in us from the grass roots up, we deliver the kind of future in which everyone can prosper. When we do not work in such ways, we can learn a lesson from New Harmony, which was the fantastic co-op that was set up by Robert Owen in America, but that fell apart after 25 years because although it had the co-operative model, it did not have the co-op mindset.
The difference that co-op members and co-op thinking bring is an understanding of not just how people work together, but why they work together and in whose interest, so that is what I challenge the hon. Member for Hereford and South Herefordshire and the Government to learn from this debate. I thank everyone who has taken part in it, and I am grateful to my hon. Friend the Member for Islwyn for securing it. I look forward to many more co-operative debates in the House.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing the debate, which is extremely timely, given that it is being held during this year’s co-operatives fortnight. My hon. Friend is well known and respected for his staunch support of the co-operative movement, and he serves as one of 32 Labour and Co-op Members, some of whom are members of the shadow Treasury team. The debate has included several excellent contributions that put the case for co-operatives and their impact on the economy, and I will mention a few of the most powerful points that were made.
My hon. Friend the Member for Islwyn made a characteristically passionate speech about rebuilding trust in our society and the role that the co-operative movement clearly plays and can play in future. My hon. Friend the Member for Rochdale (Simon Danczuk) rightly and proudly proclaimed the historical roots of his constituency as the birthplace of the co-operative movement. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) talked about not just the past and the present but the future of the co-operative movement, while my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) touched on the potential for the co-operative movement to make a real contribution to many of the challenges that we are facing—not just regarding our energy solutions for the future, but in housing.
My hon. Friend the Member for Corby (Andy Sawford) referred to “sticky money”, which is a useful way of thinking about the contribution that co-operatives make to the economy and the issue of trust to which my hon. Friend the Member for Islwyn so poignantly referred. My hon. Friend the Member for Walthamstow (Stella Creasy) made a late but welcome contribution on the many benefits that the co-operative movement brings in finding innovative solutions to the challenges facing us.
I want to add my wholehearted support to this year’s co-operatives fortnight, the theme of which is “Choose co-operative”. It seeks to raise consumers’ awareness and understanding of the diversity and benefits of co-operatives, most of which are local, loved and trusted firms. The co-operative movement employs almost 100,000 people in 2,800 food stores throughout the country, and I declare an interest as a regular shopper at my local Co-op store, which never fails to impress me with its contribution to the local community and its clear desire to put something back. The Co-op also has a significant work force and a dramatic impact on local economies. The Co-operative Group estimates that it contributed £2.2 billion to national wealth in 2012, while co-operative businesses turn over more than £37 billion a year.
We should focus on what makes the Co-operative Group, one of the UK’s largest private employers and the country’s largest mutual business, different. What makes co-operatives—to use the theme of co-operatives fortnight—local, loved and trusted? The speeches made by all hon. Members have provided the answer: the ethical values and principles underpinning those businesses of honesty, openness, social responsibility and caring for others. My hon. Friend the Member for Corby referred to the clear principles on which the co-operative movement bases its approach. They are powerful in themselves, and together they make an important contribution to the economy.
The co-operative movement is about a different way of doing business. It puts sustainability, the welfare of local communities—in the UK and overseas—and its members at the heart of everything it does. The co-operative sector has grown by more than 20% since 2008, despite turbulent economic times, and has around 15.4 million members. It demonstrates that is possible to run a viable, thriving business while staying true to all the social values and principles that saw the Co-operative Group supporting 12,000 community initiatives. My hon. Friend the Member for Corby referred to some of its important work in that regard.
Under the “farm to fork” programme, more than 17,000 primary school pupils were invited to visit Co-op working farms in 2012 alone. The Co-op plays an important role in meeting the rising challenge of childhood obesity and the importance of linking where our food comes from and how it is produced.
An issue that is close to my heart and that was key in bringing me into politics in my youth is fair trade, and the Co-op is delivering record sales of Fairtrade products. Indeed, with sales up 20% over the past 12 months, the Co-operative Group is the UK’s leading Fairtrade retailer, selling three times the volume of such goods that would be expected for a business of its size.
Crucially for the UK’s current and future economy, the co-operative enterprise hub is a nationwide programme that delivers support and assistance to up-and-coming co-operative businesses. It provides advice, skills and support for co-operatives that want to start trading, that are in their first year of trading, that are experiencing rapid growth, that are planning to move premises, that are developing a new product service or market, or that want to change their management structure. The valuable support of the enterprise hub has helped more than 1,000 co-operatives. I am sure that the Minister will want to commend the hub on that impressive figure and that he will suggest how the Government will support its important work.
I would be remiss if I did not mention that 37% of directorships in co-operatives are held by women, which contrasts starkly with 13% in leading companies. Will the Minister comment on that and explain what the Government are doing to learn from the work of co-operatives in supporting women to get to the very top of decision making?
Let me turn to financial services and the Co-operative bank. My hon. Friend the Member for Islwyn explained that his co-operative values and principles, combined with his background in the financial sector, led him to campaign on the need for greater transparency in banks’ activities and transactions through his Banking (Disclosure, Responsibility and Education) Bill. Sadly, it ran out of parliamentary time last year, but it would have ensured that everyone, regardless of their background, would have equal access to routine affordable financial services and credit. He said that it was time that banks started serving society, rather than the other way round, and we should all support that.
The shadow Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Streatham (Mr Umunna), has said that co-operatives are not guarantees of special wisdom or perfect foresight. It is still too early to make a proper assessment of what went wrong at the Co-operative bank that led to the bail-in that was announced last month, but I want to echo the views of hon. Members, including the hon. Member for Warrington South (David Mowat), that it would be incredibly disappointing if the Co-operative bank’s ethos was lost because of a slight change in the way its shares are bought and sold. I would be grateful for an update from the Minister on that important issue for those Members who expressed concern about it.
I finish by again thanking my hon. Friend the Member for Islwyn for securing this important debate and giving Members the opportunity to mark co-operatives fortnight in a very apt way. I look forward to hearing the Minister’s response to the positive solutions that we have heard today.
The Economic Secretary to the Treasury (Sajid Javid)
It is always a pleasure to serve under your chairmanship, Mr Hollobone, and I congratulate the hon. Member for Islwyn (Chris Evans) both on securing this very important debate and on putting forward his case so eloquently. He entered Parliament in May 2010 and he has already made an outstanding mark. I would like to respond to the issues raised by hon. Members, and I will try my best to capture them all, including some of the questions from the shadow Minister, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell).
As many hon. Members will be aware, the Government’s approach to mutuals was set out in the coalition agreement, where we committed to “promote mutuals” and “foster diversity” in the UK economy. That commitment, made in the Government’s founding document, underscores the importance that we attach to the sector. I would like to talk this afternoon about the contribution that the co-operative and mutual sectors make to the economy, and, I hope, to reassure all hon. Members of our determination to support them in their efforts.
First, however, I turn to the Co-operative Group itself, as raised by the hon. Member for Islwyn and other hon. Members. As the hon. Gentleman will be aware, the Co-op is at the forefront of the mutuals sector, with more than 4,800 retail trading outlets and an annual turnover of more than £13 billion. Clearly, the Co-operative bank is an important part of the Co-operative Group. I was pleased to see last month that the group has committed to strengthening the bank’s position, including through a commitment to inject capital. It would not be appropriate for me to say more, other than that the group is rightly taking action and strengthening its banking arm through that recapitalisation.
I turn to the co-operative sector as a whole. The Government have made it clear that the co-operative sector is of great importance to the UK economy. That case was made especially well by the hon. Member for Corby (Andy Sawford). In fact, co-operatives are ingrained in our culture. As we have heard, the first recorded co-op in the world was set up in Scotland in 1761. Building on those foundations, the birth of the modern co-operative movement can be credited to the Rochdale pioneers, no less, in the mid-19th century, as we heard so well from the hon. Member for Rochdale (Simon Danczuk). He correctly said that I am a Rochdale boy, and it is something that fills me with great pride. There are people in this world who do not know where Rochdale is—however shocking that sounds—but when they are told that it is the home of the co-operative movement, they immediately recognise the town’s importance. I am sure that the hon. Gentleman would agree.
From those humble beginnings, a thriving co-operative sector has blossomed. The UK now has more than 6,000 independent co-ops, and there is a co-op in every single postcode area. Those organisations provide valuable services across a wide variety of industries, including agriculture, finance and energy production. However, we should also remember that although co-operatives focus on serving their members, they are also businesses. The co-op sector in the UK had an overall turnover of well over £36 billion in 2012, which is why, in line with the Government’s commitment to promote mutuals, we have taken steps to support the sector and to enable it to thrive further.
Last January, my right hon. Friend the Prime Minister announced the co-operatives consolidation Bill, which will be introduced to Parliament in December this year. Although the Bill will not contain any new legislation, it will put all co-op legislation in one place, reducing complexity and making it easier for new co-operatives to be set up. I know that that will be welcomed by the co-operative movement.
In addition, we will consult very shortly on a further package of measures to support the co-op sector, including making insolvency procedures available to co-ops, so that a troubled co-op has more chance of being rescued. The hon. Member for Rutherglen and Hamilton West (Tom Greatrex) rightly raised the issue of football supporters’ trusts. As he will know, the Football Association is concerned about the inability of those trusts to go into administration. The changes that we propose in the consultation will hopefully help to satisfy that requirement, and help that sector of mutuals—football supporters’ trusts and others—to thrive further. We will also consult on raising the amount of withdrawable share capital that an individual member can invest in one society, so that co-ops can more easily raise capital from their members.
A very important subsection of co-ops, as we heard, is the credit union sector, which provides a mutually owned option for customers looking to save, take out loans, or, in some cases, to get current accounts and even mortgages. We have heard many Members today speak about the sector eloquently, including the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), the hon. Member for Islwyn, and the hon. Member for Walthamstow (Stella Creasy).
We have taken a number of specific measures to support the sector. Most visibly, the Department for Work and Pensions co-ordinated a recent feasibility study to examine the future of credit unions. It was announced only last week that the Government will take forward the study’s findings. That includes the Department for Work and Pensions making a further investment of up to £38 million over the next three years in credit unions, with the aim of supporting the credit union sector to provide sustainable financial services for up to 1 million additional people.
The feasibility study also proposed raising the maximum interest rate that a credit union can charge to 3% a month. The Government have announced that we will take that proposal forward, and it will apply from April 2014. That will enable credit unions to break even on the low-value, short-term loans that are the most expensive to issue, and to become more stable over the long term. That will be an alternative, as we have heard from some hon. Members today, to other avenues for borrowing for short-term loans, such as payday loans.
Stella Creasy
It is fantastic to hear the Minister supporting credit unions doing short-term lending. If he recognises that credit unions can do short-term lending at capped rates, why does he not think that payday lenders could lend at capped rates and introduce a cap on the cost of credit?
Sajid Javid
The hon. Lady will know that we have rightly given the power to an independent regulator to set capped rates, if it thinks that is appropriate in future. That is the correct way to deal with the issue.
In the interests of time, I must plough on. If we are to consider the wider mutuals sector, we should also consider building societies, which remain another key focus for the Government. We set out our approach to applying the recommendations of the Independent Commission on Banking on building societies in “The future of building societies” consultation paper. The consultation closed last year, and we are now considering how best to treat building societies in line with our aims. We will set out our proposed approach in due course.
Several other questions were asked, and before I conclude, I will try to answer some of them as best I can. A number of hon. Members raised the issue of co-ops in the energy sector. The Department of Energy and Climate Change published a call for evidence on community energy in June 2013, and it will publish a community energy strategy for autumn 2013. That highlights the Government’s commitment to supporting community energy projects.
A number of hon. Members raised the issue of housing. I agree that the co-operative sector has an important role to play in housing, particularly because, between 1997 and 2010, we saw a decline in social housing in our country of more than 421,000 units. I think that the co-operative sector can make a contribution to turning that around, and it will benefit from Government funds that have already been made available, in particular, for affordable housing.
The hon. Member for Islwyn raised the issue of Northern Rock. We believe that the sale was in the best interests of the taxpayer, securing the long-term future of Northern Rock plc and increasing competition in the banking sector. The decision to proceed with the sale was based on the advice that the Government received from United Kingdom Financial Investments Ltd and independent advisers, having considered all bids and all other potential options.
Finally, in the interests of time, I will just address one more issue about the use of the name “co-op”, which was a good point made by the hon. Member for Rochdale. That is something, as he rightly identified, that is being looked at by the Department for Business, Innovation and Skills. I am aware that very strong representations have been made to the Secretary of State for Business, Innovation and Skills, not least by Ed Mayo of Co-operatives UK. The Business Secretary has committed to looking into the matter further and to making an announcement shortly.
In conclusion, I reiterate the Government’s support for the co-operative sector, and I thank all hon. Members who have taken part in today’s debate, especially the hon. Member for Islwyn for making his case so well.
Mr Philip Hollobone (in the Chair)
Order. All good things must come to an end. I thank all hon. Members who took part in the debate and I ask those who are not staying for the next debate to leave quickly and quietly, because we are moving on to the important topic of selective licensing of landlords on the basis of poor housing standards.
Selective Licensing of Landlords
(11 years, 4 months ago)
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Graham Jones (Hyndburn) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone, for what I believe is the first time. During this short debate, I want to make the case to the Minister that the Government should introduce measures to amend selective licensing of private landlords in order to allow local authorities to tackle poor-quality rented housing. They should do so by amending the Housing Act 2004 to create a third reason to bring forward a licensing scheme, adding to that of low demand and/or antisocial behaviour. I am talking about changes that will allow local authorities to add new licence conditions if they so choose.
At the moment, there is a huge problem, which is recognised by hon. Members on both sides of the House. Chronically poor housing persists, and in some areas, such as Haslingden and Hyndburn—my constituency—in huge concentrations. Local authorities are not fully able to enforce the housing standards enshrined in the 2004 Act—notably, the housing health and safety rating system. In itself, that is an inadequate standard that does little to tackle anything but the absolute worst of conditions.
Most local authorities faced with concentrations of poor housing do not have the resources to inspect, report, prosecute and enforce housing standards. Amending the 2004 Act would allow councils to fund, by means of selective licensing schemes, enforcement of decency standards as applicable to the area and as deemed appropriate by the local authority. That would bring the private rented sector into the 21st century. The Local Government Association has come out in support of that approach, and a large number of local authorities support the extension of the selective licensing system to cover qualitative standards in the rental market. That approach would, by the very nature of a selective licensing scheme, focus on areas of particularly poor housing and, crucially, it would meet the original aim of the Act—to improve housing standards.
In Haslingden and Hyndburn, low demand has led to considerable speculative property buying, resulting in a bloated private rented sector. Those areas typically contain old housing stock. They are areas of existing low demand and low value.
Mr Jim Cunningham (Coventry South) (Lab)
I totally support what my hon. Friend is saying about a licensing scheme and expanding the abilities of local authorities to help, but does he agree with me that something should happen in addition to that, particularly in relation to poor housing? The Government should consider a return to what we used to call improvement grants, which were abolished by the previous Conservative Government. Also, given that rents are going through the roof, that should be examined.
Graham Jones
Those are obviously two further issues, on top of the issue that is being discussed today. I certainly would call for a review to consider those two aspects of housing market renewal or housing regeneration. Obviously, on the grants issue, all Governments must now face up to the economic reality of Government expenditure. In the future, that issue may be a consideration, but I would like to focus today on the selective licensing aspect as a part-way answer to that shortfall in funding, which my authority certainly used to receive.
According to the Hyndburn stock condition survey, 78% of the stock in Haslingden and Hyndburn is pre-1919, compared with the national average of 45%. Entire streets are almost exclusively owned by landlords, to the extent that people are conscious of what I will describe as “landlorded” areas, where renting but more particularly buying is avoided. In my constituency, 15% of the stock is privately rented—that is the old figure; the percentage is rising, as it is nationally—compared with the national figure of 11%. However, when we zoom in on the poorer areas, we find much higher concentrations of privately rented properties in particularly poor condition, which are often owned by a small number of individuals. According to the last Hyndburn borough council stock survey, 26.6% of private rented properties had category 1 hazards. That is the highest rate of any form of tenure. If we zoom in on the Spring Hill and Scaitcliffe areas, the rate rises to 52.4%. If we looked at specific neighbourhoods or streets, it would be considerably higher still.
Despite the existence of legal powers and the duty on councils to enforce the housing health and safety rating system, there is still a high number of non-decent and dangerous homes. Hyndburn council has had the deepest budgetary cuts. It was surpassed in percentage terms only by Great Yarmouth and neighbouring Burnley. The figure was 16.9%, making it particularly difficult to employ staff to do such work. The reality across the UK is that councils do not have the resources to enforce and prosecute when it comes to the housing health and safety rating system. Extending the scope of selective licensing would in part resolve that.
Andrew Stephenson (Pendle) (Con)
I congratulate the hon. Gentleman on securing this debate on a very important topic. As he will know, my constituency faces similar housing challenges to his. There are well over 1,000 empty properties and similar problems with rogue landlords. I know that he is very keen on selective licensing, but does he not agree with me that voluntary landlord accreditation schemes, such as the one operated by Pendle borough council, can deliver the same kind of results as he hopes to achieve through the extension of the selective licensing regime?
Graham Jones
In part, I share the hon. Gentleman’s ambition for voluntary accreditation schemes. In Hyndburn—in the wider constituency—there are 2,500 to 3,000 empty properties. I find that the accreditation schemes go some of the way and encourage those who wish to participate and to provide a tenanted property of a decent standard, but the rogues or poor landlords or long-distance landlords do not want to be accredited and do not participate in such schemes, and they are the people who are the target of any action to try to improve a neighbourhood, a particular property or the conditions for an individual or a family. Accreditation schemes have a role to play and can offer advantages, such as discounts in the licensing scheme; accreditations are often a passport to a reduced licence fee. There we have a reason to have an accreditation scheme, and such a scheme does encourage higher standards. But when it comes to minimum standards, we have to go further. One sits above the other, I believe.
The work load of the council in dealing with private landlords and the sector is disproportionately large because of the size of the rented sector in the constituency of the hon. Member for Pendle (Andrew Stephenson) and in Haslingden and Hyndburn. Adding simple standards to a licence would be no great burden to the scheme, either financially or in terms of time spent on inspections, with the licence fee funding the extended enforcement activities of environmental health officers and landlord accreditation officers within the scheme.
I shall now deal with the effect that poor-quality homes have on the housing market, which is an important and neglected aspect of this matter. Poor-quality housing is one of the most visible social problems where it is prevalent, and unfortunately in many areas there are large concentrations of extremely poor privately rented properties. As well as the individual tragedy for the young family or particularly the young children in those properties being forced to live in unacceptable conditions, poor landlords cause wider degeneration issues. Streets and neighbourhoods quickly go into decline. While the south of the country and other high-demand areas are suffering a housing crisis of under-supply and high rents, low-demand areas are suffering an altogether different housing crisis—a crisis of substandard accommodation and unwanted properties to let, which are often abandoned. It is the mark of a civilised society that landlords provide tenants, and crucially their children, with basic elements to a property, such as double-glazed windows, a decent heating system, good insulation, safe electrics, and a reasonably modern kitchen and bathroom, which we would all expect in a property in which we lived.
People do not wish to live in sub-standard housing. Tackling low-demand and anti-social behaviour is important in itself, but it is not enough. Low-demand areas turn quickly into streets full of voids, as in my constituency and the constituencies of the hon. Member for Pendle and other hon. Members. Streets are effectively abandoned, which brings down the whole neighbourhood for a generation. The old ways of regeneration through Government grants have gone, for the time being. We must accept the economic times in which we live, and such a licensing scheme is an answer to that reality—a change for the future.
Standards should be another basis for selective licensing, because they fit with the original purpose of the powers, as defined in the 2004 Act. Poor housing standards are hugely damaging to the housing market in an area. They result in people living in areas they no longer wish to be in, lead to negative equity for innocent owner-occupier neighbours, and explain in part why one in 13 properties stands empty in my constituency. There needs to be recognition that undesirable, poor-quality private sector housing is a cause, as well as a symptom, of low demand and weak markets. Making such a change would complement the original aims of selective licensing. The Minister might be able to point to many examples where that is not the case, but I would make a powerful case—one that I am sure he would accept—that in too many areas poor standards are a reality and local authorities should be allowed to license landlords and bring housing up to a reasonable standard. I hope that he will not respond by simply restating that local authorities already have such legal powers; he must recognise that there are problems in the private rented sector that are not being resolved in the existing framework.
These are austere times, when Government programmes for deprived neighbourhoods have all but run dry. Driving up conditions through selective licensing could rebalance housing markets and provide prospective residents and tenants with greater confidence. Cash-strapped town halls need new, more value-driven solutions to the problems of poor housing; a modified 2004 Act might just provide them. Selective licensing was brought in to deal specifically with the problems of declining neighbourhoods, and now it must be extended to meet that ambition.
In conclusion, the private rented sector cannot be seen in isolation from the wider housing market and owner-occupation. Aspiration cannot be removed from whole neighbourhoods. Tenanted families should have the right to a property we ourselves would call a home: double-glazed windows; a decent heating system; good insulation; safe electrics; and a modern kitchen and bathroom. If we make a very small change in the law, we could begin to tackle endemic poor standards in the private rented sector, which would, importantly, give the young children of the future the hope of a better life—a decent life—away from squalor and, more crucially, begin seriously to tackle low demand and regenerate some of England and Wales’s most deprived areas.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Hyndburn (Graham Jones). He is a passionate advocate for this important issue and I am genuinely grateful to him for raising it. As I will say in a moment, this is our second time discussing these issues in a relatively short time.
As the hon. Gentleman knows, the private rented sector is an important part of our housing market. Some 3.8 million households live in the sector, which has seen a huge increase from including 9% of all households in 1988 to about 17% now. The Government actively support that growth. Our “build to rent” fund will support new high-quality, large-scale development for private rent. Notwithstanding the problems he raises, most private sector tenants are happy with their home and the services they receive: the English housing survey found that 84% were satisfied with their accommodation, compared with 77% of local authority tenants. The average tenancy has extended, and now lasts for about two years; nearly 20% of tenants have lived in the same property for more than five years. Importantly, the same survey found that 91% of tenancies were ended by the tenant, rather than the landlord. It is pleasing to note that rents are stable. The latest figures from the Office for National Statistics show that over the past year rental increases were below inflation: in England, they rose by 1.3%, while in London, the figure was higher at 2.2%, but still below inflation.
I know the hon. Gentleman and many members of his party have been keen to push for a national register of landlords. The Government have rejected that proposal, not least because it would cost some £330 million over 10 years—costs that would be passed on to tenants. He rightly raised concerns about some landlords, and I am aware that a minority of landlords fail to meet their basic responsibilities: they neglect their properties and exploit their tenants by placing them in unsafe and unsuitable living conditions. We should focus our attention on them; a point he rightly raised today. Frankly, those landlords have no place in the sector and we are determined to take firm action to crack down on them, which is why earlier today we announced that £3 million of funding would be made available to support local authorities dealing with particularly acute and intractable problems caused by rogue landlords. I am sure that we will discuss access to that funding with the hon. Gentleman.
We have been concerned in particular about beds in sheds—the extreme manifestation of rogue landlord problems. Backed by £2.6 million of Government funding, more than 500 illegally rented outbuildings and overcrowded homes have been discovered. Just this morning, a successful raid was carried out in Hillingdon, where two sheds were found to be being used as illegal accommodation, two of the occupants of which were found to be illegal immigrants and were detained by the police.
I know that many properties in the hon. Gentleman’s constituency are old, frequently in poor condition and, as he said, expensive to heat. Such homes can be less desirable than more modern buildings, and therefore more difficult to rent out, so the properties stand empty for long periods, blighting the local area. Of course, where a property is in a dangerous state of disrepair and there is a risk of harm to the occupants, the local authority should make use of the powers under the 2004 Act to take enforcement action. I discussed that with the hon. Gentleman when we met last month. In some areas, where demand is low, landlords need support to improve empty homes and bring them up to modern standards, which is why my Department gave a grant of £9.4 million to the Pennine partnership, which includes his constituency, to help refurbish and bring empty properties back into use. Hyndburn borough council received a £3.8 million share of that grant to develop the Woodnook neighbourhood, which will be complemented by a loan of £2.5 million from round 1 of the Get Britain Building fund.
Graham Jones
I want to put it on record that the meeting we had a month ago was very constructive. I acknowledge that £3.8 million has come to the Hyndburn area for some 200 properties. My wider point is that we have 3,000 empties and 4,000 to 4,500 rental properties; the empties are largely part of the rental market. There is a much bigger problem, for which selective licensing would have a broader reach with a broader brush, but I appreciate that we are dealing with 200 properties through the scheme that the Minister mentioned.
Mr Foster
I know what the hon. Gentleman is going to say.
We have also given local authorities the power to increase council tax for such properties by 150% after two years. Let me just say to the hon. Gentleman—[Interruption.] I will let him intervene, and I will then answer the question I know he is going to ask.
Graham Jones
I think the Minister knows what I will say—he is correct in saying that. I hope that I represent the hon. Member for Pendle in saying this, because it affects us both. We are in a unique position in that our areas are not in a unitary authority, so the rise in council tax cannot be put back into dealing with empty properties because it all goes to the shire authority, to be spent on other services. That is a problem that we face in local government structures, so although the measure is welcome, it is not helpful on the ground.
Mr Foster
May I just say—as I was going to, because I knew that that was the matter that the hon. Gentleman would raise—that the measure puts pressure on landlords to take action to get properties back into use, even if the extra money from the council tax does not go directly into the local council? It is, therefore, an important measure, in that it puts additional pressure on landlords.
The hon. Gentleman has rightly acknowledged that local authorities have a range of powers with which to tackle problems with poor housing, of which selective licensing is just one. He also rightly said that, at the moment, selective licensing can be introduced only when a local authority is able to demonstrate that a particular area suffers from low housing demand or has a significant and persistent problem with antisocial behaviour. Selective licensing is not, of course, the only solution. It is important to remember that local authorities have other options open to them. One such option, which we strongly support, is to introduce a voluntary licensing scheme for landlords, which can, and does, help to raise standards across the board. My hon. Friend the Member for Pendle (Andrew Stephenson) referred to one such successful scheme in his constituency.
The hon. Gentleman suggested that the criteria for selective licensing should be made more flexible, by way of an additional criterion enabling it to be introduced when a local authority has general concerns about the quality of housing. Given that other enforcement powers are available, I am not yet—and the hon. Gentleman should note that I stress that word—convinced that that is necessary, but I am aware that there is little information about the use or impact of landlord licensing, whether selective or voluntary.
Graham Jones
Although the Minister and I have always had a constructive dialogue and share a similar thought process on the matter, we diverge slightly on this point because I believe that there is a role for selective licensing.
Regarding the two schemes, the housing health and safety rating system is run from within the revenue grant of a local authority—I have stated Hyndburn’s position—and the inspectors involved in landlord licensing cannot inspect for that scheme because it is a separate stand-alone one. There is a bilateral system, with two schemes being run in parallel, and there is a case for arguing that they come together.
Mr Foster
I note the hon. Gentleman’s point. I remind him that because the Government have removed much of the ring-fencing from local government funding, it is for local government itself to decide how to make use of the funding.
May I now be positive? I recognise that perhaps we do not have enough information about the impact of licensing schemes, and I have, therefore, asked my officials to gather information over the summer on how the schemes are used and on the impact they have locally, and I hope that the hon. Gentleman will be willing to contribute information that will help us in our consideration. Although there are no immediate plans to review the legislation, we are keen to ensure that local authorities are able to use it proportionately and effectively. The information gathered on how existing licensing schemes work in practice will be used to inform an update of the current guidance for local authorities on selective licensing.
I am grateful to the hon. Gentleman for raising this issue. It is important that local authorities have the right tools to manage housing in their area as effectively as possible, while not putting undue burdens on landlords who already provide a good service. I hope that the hon. Gentleman will recognise that I seek to be as helpful as possible. We need more information before any further decisions can be taken, and I hope that he will participate by providing information that will help us.
Graham Jones
I want to place it on record that the Minister is trying to be as helpful as he possibly can, but I would like to see the Government go further and faster, and a visit to some of the worst areas might accelerate their thinking on the issue.
Mr Foster
I am grateful for the invitation to visit the hon. Gentleman’s constituency, and if the opportunity arises I will certainly do so. I should say, however, that I have recently made visits around the country, not least to look at empty homes—we are determined to do as much as we can to help bring them back into use—and I have had the opportunity to see areas that are very similar to the one I suspect I would find if I visited the hon. Gentleman’s constituency. Nevertheless, if I get the opportunity I will pay such a visit.
I am grateful for the hon. Gentleman’s generous remarks. We are trying to be as helpful as we can. I know that he would like us to go further, but I cannot commit to that without having more information. However, we will certainly look at the information we gather over the summer and see where it takes us.
Disabled Access (Train Stations)
(11 years, 4 months ago)
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Rory Stewart (Penrith and The Border) (Con)
It is a great pleasure to appear under your chairmanship, Mr Hollobone. It is an extraordinary testimony to the interest in disabled access that there is such a large turnout from all parties for this debate. I want to speak briefly to allow other hon. Members to intervene.
If we are looking for a distinctive British contribution to the world since the second world war, we could do a lot worse than looking at what has happened with disabled rights. Britain has genuinely been in the lead on disabled rights, and that has involved all parties. In 1970, Alf Morris introduced the first disability legislation in the world; he was the first Minister for the disabled. In 1995, the Conservative Government introduced the first disability discrimination legislation, and it was a Lib Dem and Conservative coalition that brought in the equalities legislation. That is something of which all parties should be proud.
The issue of disabled rights reflects two important moral insights: one is the contribution that disabled people make to our society, which we wish to celebrate, support and encourage, and another is the important issue of rights or equality—in other words, the fact that disabled people, along with all the other groups who have been focused on since the second world war, deserve equal dignity and respect.
I very much feel that fact personally. My younger sister is disabled, and over the past 20 years I have been struck by how generous and imaginative Governments have been in supporting her in education and transport, and now in providing her with mentoring in the workplace. Governments have done that in hospitals, and they have worked well in libraries and community halls. They need to do so, because there are 12 million disabled people in this country.
The great remaining challenge to Britain—the final frontier—is in transport. Sadly, transport has not quite reached the level that has been achieved in other public service provision. The rights for disabled people that were originally laid out in 1970 have not been fully realised in the field of transport, and that is becoming increasingly important. For example, the number of disabled people using trains has gone up by 55% or more in the past five years. About 77 million individual trips a year are now taken by disabled people.
Huge progress has been made in the constituencies of some hon. Members, and people have been in touch to congratulate the Government on the work already done on specific train stations. Nevertheless, it remains a challenge, particularly for smaller and more rural train stations. There are a number of reasons for that.
John Howell (Henley) (Con)
That matter relates not just to regional stations. Goring station is in my constituency, which is a centre for disabled access, as it turns out. People travelling from that station have to go a huge distance beyond it or to fall short of it by a huge distance if they wish to cross platforms, because they have to do that at stations that have lifts to allow them to cross platforms and get a train going the other way.
Rory Stewart
My hon. Friend makes an important point, because that is true. At a time when we are about to spend an enormous sum on High Speed 2, partly to accelerate people’s journey times, disabled people up and down the country face much longer journey times because of the necessity of travelling on—for example, from Goring to another station—to get from one platform to another. One of my constituents who is unable to get off the train at Penrith has to travel to Carlisle and wait for a train coming south, which adds approximately 50 minutes to her journey every time she travels.
Philip Davies (Shipley) (Con)
I agree with what my hon. Friend is saying. Another example is at Menston station in my constituency, which has two platforms. People have to go from one platform and come back to the other—they have to use both. There are many car parking spaces for disabled people, but only a massive footbridge between the platforms. Whereas disabled people can park there, they cannot actually get from one platform to the other. Does he agree that that situation cries out for Access for All funding from the Department for Transport to make the station fully accessible for disabled people?
Rory Stewart
Absolutely. That is an exact example of the importance of the Access for All funding provided by the Department. I am sure that the Minister will discuss that at greater length. Of course, it is not quite as generous as we would like. There is not yet a legal obligation on the Government to provide Access for All funding, so it is unlikely to be able to provide for more than a minority of the cases represented by hon. Members in the Chamber.
Guy Opperman (Hexham) (Con)
I welcome my hon. Friend’s campaign, which is supported by Northumberland and the Tyne Valley Line rail users group. Does he agree that the campaign to rebuild Gilsland station—it starts in my constituency, but ends in his—would be the perfect place to have a station with proper disabled access?
Rory Stewart
It is very difficult for me to disagree with my hon. Friend.
I have a more serious and general point that is worth raising with the Minister, who is kindly giving us his time today. One of the challenges for Gilsland and smaller remote stations is one of metrics and measurement, and about how the Government assess which stations to prioritise. Understandably, they tend to focus on footfall as a way of prioritising stations, but that misses many things. It misses the fact that a remote rural station suffers from general transport issues, such as fuel poverty and a lack of bus services.
Remote rural areas tend to have issues relating to an ageing population—demographic issues—that are not necessarily captured by the Government’s form of measurement. For example, the absolute number of people getting off at Penrith station is not that dramatic, but the number of people aged over 65 in my constituency will double in the next 10 years, so that the majority of people in my constituency will be over 65 in 10 years’ time. They may not have disabled cards, but to come down 45 steps with a 35 kg suitcase and get up the other side is not necessarily a problem simply for the disabled.
Jim Shannon (Strangford) (DUP)
I thank the hon. Gentleman for bringing this matter before the House. The reason why everyone is here is that we can all relate to this issue.
In a previous life in Northern Ireland, I was a Member of the Northern Ireland Assembly, which decided to introduce a strategy to address the issue. Every train and almost every station in Northern Ireland now has disabled access. Some £18 million was set aside last year for that purpose, and there are only two stations left to do in Northern Ireland. Is not the real issue that the Government have to set aside money to meet the equality legislation, as we decided to do to meet the needs of disabled people across the whole of Northern Ireland? We have two stations to do—almost there.
Rory Stewart
That is a wonderful example. The argument is about learning not just from Northern Ireland, but from the symbolic benefit. At a time when the public are increasingly frustrated and perplexed by what politicians are up to and about what our job is, such projects are highly visible—people can relate to them and see them—and they generate employment. They are exactly the kind of highly visible infrastructure projects that this Government are promising and that I believe we ought to be able to deliver.
George Freeman (Mid Norfolk) (Con)
I am reluctant to interrupt my hon. Friend’s eloquent exposition. If I might be forgiven the pun, he is making a very good set of points. In particular, he makes a good point about how this country has reached out to the disabled community. Anyone who watched the Paralympics last year would be disabused of any remaining notion that disabled people are not able to rise to the challenge.
Does my hon. Friend agree that disability access is often access for others as well? At rural stations in my constituency, investment in disability facilities benefits bike users, mums with prams and others who are less able to get around. Does he agree that stations in rural areas, with rural broadband and infrastructure, are often the hub of a vibrant rural economy? In my constituency, Wymondham station is the model. I was recently lobbied by some constituents, led by Joy Batley. They have to get off at the southbound platform and get a taxi back to the other side to cross the track.
Rory Stewart
My hon. Friend makes a very eloquent statement. It strikes me that that point—that we should not focus simply on footfall or on disability numbers—is absolutely essential to make to the Minister. My hon. Friend’s argument is crucial: we are of course talking not just about people over 65 or those with prams, but about the usual requirements of tourists, for example. Many of us may represent constituencies that have a high number of tourists, who by their very nature tend to travel with large suitcases and bags.
Steve Brine (Winchester) (Con)
I congratulate my hon. Friend on securing this debate. He is absolutely on the right track—[Hon. Members: “Oh!”] Even as I said it, colleagues. May I welcome his debate today, and wish him luck with his campaign locally? If he wants some inspiration, he could visit the great city of Winchester where Network Rail has just announced that it is to install a footbridge over the station with a lift either side, so that disabled elderly people and visitors can get around. At the moment, the situation is exactly as my hon. Friend has been describing—getting taxis to go round the one-way system just to cross the bridge. He is welcome to come to Winchester at any time, and I am happy to spread a bit of light into his debate.
Rory Stewart
My hon. Friend is very kind. The situation in Winchester is exactly what places such as Penrith would dearly love—a lift and a footbridge across the station. At the moment, if a seriously disabled person is in a wheelchair at Penrith station, unless they travel up to Carlisle, they have to make a formal request—there are 14 formal requests a day and scores more that are not formally made in advance—which involves them being pushed across the great west coast main line in the gaps between trains travelling at 125 mph. Those are not exactly the kind of conditions that we wish to encourage.
Lisa Nandy (Wigan) (Lab)
The hon. Gentleman is very generous with his time. Notwithstanding all the points that he has made, with which I agree, does he accept that there is a real issue about the disappearance of staff from many stations? However many adaptations we introduce, some people will always need extra help to get around. As well as needing that additional assistance, many people with disabilities have been subject to hate crime, and so may be deterred from travelling alone to places where there is not a staff presence.
Rory Stewart
The hon. Lady is absolutely right. She takes us back to the bigger strategic point that the Minister has had a grip on throughout this Administration, which is that we believe in rail and we believe in trains. We are investing an enormous amount of money in that idea. In doing so, we might as well get it right. The sums of money we are talking about to have the right kind of facilities available for disabled people are relatively trivial compared with this enormous bet that the Government are making and that the Opposition voted for on the future of rail travel. If we are spending £43 billion on a high-speed line so that people in my constituency can fly up to Lichfield and then on their trains fly up to Penrith, it would be a great pity if, at the other end, they were unable to get off the train at all.
Nigel Mills (Amber Valley) (Con)
Does my hon. Friend agree that using footfall as a measure is pretty unfair on a station such as Langley Mill, which has a steep and slippery staircase? It is hard for many passengers to use the train. Perhaps if we had stations that were fit for the modern world, we might get the footfall. It is especially hard to understand when several million pounds can be found to invest in a station a few miles down the line, but a few hundred thousand cannot be found to put disabled access into an existing station.
Rory Stewart
That is a vital point. It returns us to the general theme, which is that when we have made the big investment, the big bet, a relatively small amount of money would make all the difference in use. The fact that people in Penrith and the Border can get up to Cumbria in three hours and 15 minutes is the most extraordinary transformation—for tourism, for our economy, for small businesses, for people’s quality of life, for connections to other parts of the country, and for people’s ability to go abroad. All of that is being held back by what would probably be an investment of a few hundred thousand pounds to finish the job.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
I am grateful to the hon. Gentleman for giving way and I congratulate him on choosing such an important subject for debate and on his eloquence. He referred earlier to legislation that has been passed by this House, and I am sure that as he continues his research he will find that in 1986 I was fortunate enough to pilot through the House the Disabled Persons (Services Consultation and Representation) Act 1986. The thematic support for the Act was based on advocacy, because not all disabled people can speak for themselves. Some, as we know, were placed in guards’ vans at that time and given very little help. Can I get the hon. Gentleman to agree that, in addition to what he is doing, which is excellent, he will support advocacy so that those who cannot speak for themselves will find that their views do not go unreported?
Rory Stewart
Absolutely. Indeed, I pay tribute to the right hon. Gentleman for the extraordinary work that he did in the 1980s. Yet again, at a time of cynicism about Parliament, cynicism about Back Benchers, and cynicism about what people can contribute, the contribution that he made as an Opposition Back Bencher at that crucial stage was really heart-warming.
Andrew Stephenson (Pendle) (Con)
My hon. Friend is being incredibly generous with his time. I congratulate him on securing this important debate. Does he agree that it is not just a matter of stations but a real lack of consistency between train operators on disabled access? A constituent of mine uses a mobility scooter, and I was told by Northern Rail that because it has 13 different types of train, most with ramps that are steeper than eight degrees and therefore in its eyes unsafe to use, she has to be accompanied by someone to fold and lift her scooter on to each individual train. In other parts of the country, train operating companies have come up with solutions to that. Does my hon. Friend agree that train operators should try to find a consistent common approach to the issue of access for people using mobility scooters? Perhaps the Minister could look at that as part of the franchise process.
Rory Stewart
My hon. Friend makes two important points. The first is about the inconsistency between operators, which is something that we have experienced very personally in Penrith. The apparently winning bidder for the west coast franchise committed to install a lift at Penrith station. When that franchise collapsed, having got a written commitment from the chief executive of that group, we ended up going back to Virgin and no such commitment is emerging. Virgin says that it has no interest in the work because it has only four or five years to run on its franchise. That has been a great disappointment for us and illustrates my hon. Friend’s point.
The second, bigger point, and the more important one, is that disabled access at the train station—in other words lifts—is only the beginning and not the end of the conversation. There are any number of other things to be considered. Some of them are to do with changes in technology available to disabled people, the increasing use of mobility scooters and the importance of being able to get them on and off trains and the height of the platforms—in many cases, the platforms are built at the wrong height for people to be able to get off the train. Those may be expensive interventions but they certainly need to be part of our objectives.
Another objective is access to disabled lavatories on board trains. Recently, one of my constituents was seated in the wrong carriage and was unable to access the disabled lavatory. No one was able to assist them to get from one carriage to another, and the result was really distressing.
To conclude, this is a matter of which Britain should be proud. All Back Benchers and all parties—all the way from Northern Ireland, through the Labour party, the Liberal Democrats and the Conservatives—have done an extraordinary amount to show what Britain means in terms of disabled rights and disabled access. This is also a Government who are proud of their infrastructure investments and their contribution to employment through infrastructure, particularly through railways. We must put those two things together. If we can do that, we can look forward to a day when all hon. Members will be able to access the wonderful conditions that are now available at Winchester station. All Members who have gathered today to talk about the problems of access in their own constituencies will be able to get to where we would like to be at Penrith, which is a world in which the millions of people using trains, including the 7.5 million tourists who go to the Lake district every year, will step off that train on to Penrith station and see a brand-new lift, and they will see it not just as an article of public convenience but a symbol of British civilisation.
Mr Philip Hollobone (in the Chair)
We are now, metaphorically speaking, going to struggle with our suitcase over the footbridge from the hon. Gentleman’s remarks to the Minister’s response.
The Parliamentary Under-Secretary of State for Transport (Norman Baker)
That is the most eccentric introduction that I have had for quite some time, Mr Hollobone.
I congratulate my hon. Friend the Member for Penrith and The Border (Rory Stewart) on his contribution. I warmly welcomed the way in which he presented his case and endorse his analysis entirely. Let me say for the record that there is a good turnout for this debate. To be honest, it is a pity that it is not a one-and-a-half-hour debate, but I congratulate him none the less on taking a record number of interventions in a half-hour Adjournment debate.
In recent years, expectations about accessibility have changed, both among disabled passengers and the railway industry, and that is a good thing. The success of our transport networks in providing accessible journeys during last year’s Olympics and Paralympics shows what can be achieved. Unfortunately, however, many of our mainline railway stations date from Victorian times, and those 19th century stations were not built with the needs of 21st century passengers in mind, which has left us with the huge task of opening up the rail network to disabled passengers, which is obviously what we want to do.
Clearly, accessible stations make a huge difference to people’s journey experience—not only people with reduced mobility, but those carrying heavy luggage or pushing unwieldy pushchairs. From a personal point of view, I had no idea how inaccessible the tube network was until I became a dad and had to start lumping prams up and down stairs.
The Government therefore remains committed to making further improvements in this area and has continued to support—indeed, to expand—the Access for All programme, which the previous Government launched in 2006. The main programme, which is worth £370 million in 2004-05 prices, will deliver accessible routes at more than 150 stations. To secure value for money, stations were selected based on their annual footfall—several hon. Members referred to footfall during the debate—weighted against the incidence of disability in the area on the basis of census data. Around a third of the stations selected were chosen to ensure a fair geographical spread across the country. We also took into account the views of train operators and proximity to facilities such as hospitals, schools for disabled children and military rehabilitation centres. I noted the points that my hon. Friend the Member for Penrith and The Border made, so I will ask officials to consider whether the criteria should also take account of the nature of remote rural areas.
Duncan Hames (Chippenham) (LD)
I thank the Minister for giving way and, indeed, for the inclusion of Chippenham railway station within the Access for All programme. However, it was more than four years ago when railway staff first told me that we were going to get lifts and disabled access at that station, but the scheme is still to receive planning permission from Wiltshire council. Does the Minister agree that a misguided sense of priorities is preventing us from having access for the 21st century on a Victorian railway? I am sure that the last thing that Brunel would have wanted was for such considerations to inhibit decent access to his railway at Chippenham.
Norman Baker
On Chippenham station, I am advised that Network Rail had to go through the lengthy planning process to which my hon. Friend correctly referred, which of course also involves building consent. In addition, it has to co-ordinate its plans with other projects in and around the station. However, I am told that that has now happened and that a detailed design for the project is complete. Work is due to start in November this year and to be completed by July 2014. However, I have asked Network Rail to review its time lines to determine whether it can accelerate construction, given the delay that has already occurred.
Andy McDonald (Middlesbrough) (Lab)
Given the comments that have been made in the debate and the expectations on train operating companies to build in such facilities described by the hon. Member for Penrith and The Border (Rory Stewart), will the Minister consider giving some guidance on, or commenting about, the extent to which we could build these requirements into the franchising contract documentation and place obligations on the train operating companies to deliver those very facilities?
Norman Baker
I want to come on to the various mechanisms through which improvements can be made, but the hon. Gentleman is right to say that, in theory, franchise requirements can be designed to achieve them. However, other methods are perhaps more effective. If I may make some progress, I hope that I will be able to give him some comfort.
Some 104 of the projects under the Access for All programme have already been completed, which is good news, and we expect the majority of the rest of the projects to be completed by March next year, which will be a full year ahead of schedule. The work has included significant engineering work at stations such as Clapham Junction, which is the station with the most daily train services in Europe and is now fully accessible for the first time in its 150-year history.
Mr Robin Walker (Worcester) (Con)
I commend my hon. Friend the Member for Penrith and The Border (Rory Stewart) for securing this debate. I just want to thank the Government for the Access for All programme on behalf of my constituents who use Worcester Shrub Hill station, another magnificent Isambard Kingdom Brunel station that will be getting new lifts under the Access for All programme this year.
Norman Baker
I am grateful for that intervention. My hon. Friend’s constituents will doubtless be aware of his involvement in pushing for that particular improvement.
To build on the success of the Access for All programme, last year’s high-level output statement included £100 million to extend the programme until 2019, despite the difficult economic circumstances. We have asked the rail industry to nominate stations for inclusion in the extended programme, using the criteria to which I referred, and hopefully taking on board the point that my hon. Friend the Member for Penrith and The Border made about remote rural stations. We also want the industry to take account of factors such as improving inter-urban journeys and the availability of third-party match funding, which can be used to weight business cases for individual station projects. The views of local authorities are also important when considering these matters, so they will be taken into account.
We want to tie in access improvements with other projects to help to deliver efficiency savings by combining costs, including project management costs. For example, last November I opened a joint national stations improvement programme and Access for All project—two different funding streams—at Horsham station, which was worth more than £4 million of Government and local authority funding. This excellent project shows exactly what can be achieved when different stakeholders co-ordinate their plans to deliver a better experience for passengers. I would welcome more examples of such co-ordination in the future.
I would expect a number of stations that were close to being included in the current Access for All programme to be nominated again this time around. They include Penrith, in my hon. Friend’s constituency, where Network Rail has already been looking at options for providing step-free access. I know that the station is one of the few on the west coast main line without a proper accessible route, and that it is an important interchange with National Express coaches and bus services to other parts of the Lake district. All those factors will make Penrith a strong candidate for inclusion in the Access for All programme, although I obviously cannot guarantee that it will be included. Although Network Rail is busy considering the matter, I would expect Virgin, the train company involved, to be frankly a little more sympathetic than appears to have been the case to date. I expect the industry to complete the nomination process by the end of this year, which would enable us to be in a position to announce the successful stations by April 2014, the beginning of the next rail control period.
It is important to remember that improved access can often be achieved using relatively small amounts of funding, combined with innovative thinking by the industry, so the Access for All programme includes an annual small schemes fund of around £7 million a year. That money is allocated between the train operating companies, based on the number of stations they manage and how busy those stations are. Since 2006, more than £100 million of investment, including contributions from the train operators themselves and from local authorities, has seen projects delivered at more than 1,100 stations, which is almost half the total number of stations in this country.
A variety of projects have been supported, including: better provision of accessible toilets; customer information systems, which have now been installed at more than 80% of our national stations; blue badge parking spaces; and features such as induction loops at ticket offices to help those with hearing impairments. The work has removed barriers to travel for many disabled people, and these are real examples of projects that are delivered at a relatively low cost, but have high value.
In 2011, we released £37.5 million of Access for All mid-tier funding to help projects needing up to £1 million of Government support. A total of 42 projects were successful, ranging from the provision of step-free access—via lifts—at stations such as Alton, which serves Treloar college for physically disabled students, to a Changing Places disabled toilet at Paddington and easier access platform humps to reduce the stepping distance between the platform and train at several stations throughout the country. The first phase of those projects is now finishing, and the remainder of the projects are due to be completed by the end of this financial year.
I do not want to give the impression that that is all we are doing to improve access at stations, however. Access for All is over and above work delivered as part of other major investment programmes or work undertaken directly by train operators, which are each required to invest an average of £250,000 a year on improving stations under their minor works programmes as part of the franchise requirements. I understand that that money is now almost exclusively spent on access improvements. We heard mention of High Speed 2, and I want to make it clear that all new stations on the HS2 route or anywhere else—we are busy opening new stations under the new stations fund and the local sustainable transport fund—will be fully accessible.
We are determined to ensure that all rail vehicles are fully accessible, because there is no point in having accessible stations if people cannot get on the train. The latest figures show that more than 7,600 rail vehicles have been built or refurbished to modern access standards, which is 45% of all rail vehicles, including half of all trains—that is the difference between carriages and trains. More than 500 older rail vehicles have been fully refurbished to modern access standards, and contracts have been placed for work on hundreds more. Meanwhile, my officials, with assistance from the Disabled Persons Transport Advisory Committee, continue to provide compliance guidance to the rail industry ahead of the 2020 deadline for all rail vehicles to be accessible. It is a firm commitment of the Government that all rail vehicles will be accessible by 2020, and we are determined to make sure that that is kept to. By the way, there are similar commitments on buses, which are equally important, if not more so, for people in rural areas, as my hon. Friend the Member for Penrith and The Border will no doubt accept.
In summary, I hope that I have been able to demonstrate that the Government is committed—note to Hansard: the Government “is” committed, not “are” committed—to improving access at stations for disabled passengers through specific projects such as Access for All, as well as under improvements delivered as part of our wider commitment to improving the rail network.
I am grateful to hon. Members who contributed to the debate. The evidence of the turnout of Members demonstrates the importance that parliamentarians attach to this issue, and that is matched by the importance that we in the Department for Transport attach to it.
Mr Philip Hollobone (in the Chair)
I congratulate the hon. Member for Penrith and The Border (Rory Stewart) on securing the debate.
Question put and agreed to.
Written Statements
(11 years, 4 months ago)
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Gift Aid
(11 years, 4 months ago)
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The Economic Secretary to the Treasury (Sajid Javid)
Following the announcement at Budget 2013 that the Government are looking to improve the way gift aid works on digital donations, HM Treasury is today publishing a consultation document—“Gift Aid and Digital Giving”. This document focuses on how to increase the level of gift aid take up on digital donations, such as those made online or by text message, as well as other improvements to gift aid.
This Government recognise the important work of charities in our society and have improved the support charities receive through the tax system with a variety of reliefs. Gift aid alone was worth over £1 billion to charities last year, and with the rapid growth in digital donations, the Government want to ensure that gift aid take up remains high.
The consultation seeks views on how intermediaries might collect gift aid on behalf of charities and how the wording of the gift aid declaration might be improved. It also invites thoughts on a database of universal gift aid declarations and wider improvements to gift aid.
The consultation closes on Friday 20 September 2013.
Army Reserve (Structure and Basing)
(11 years, 4 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
The Government have today published a White Paper on Reserve Forces, “Reserves in the Future Force 2020: Valuable and Valued”. The White Paper sets out our vision for the future of the reserve forces following the consultation I launched last October, and the detail of how we will make Reserve Service more attractive to individual reservists, their families and their employers. It also confirms our intention to change the name of the Territorial Army to the Army Reserve.
In order to deliver our vision for the reserves as part of the “Whole Force”, it is necessary to make some changes to the reserve structure and, in some cases, the basing laydown. While the maritime reserves and Royal Auxiliary Air Force structures will see only minimal changes, the Army has had to undertake a fundamental re-design of its reserve force structure to deliver the reserve component of the integrated Army 2020.
Against the backdrop of the revised offer to the reserve forces set out in the White Paper, the Army has developed a plan for the structure and basing of the Army Reserve, consistent with the recommendations of the Independent Commission’s review of the UK’s reserve forces1 led by General Sir Nicholas Houghton, Vice-Chief of the Defence Staff, in 2011. It follows the July 2012 and March 2013 announcements on Regular Army structure and basing, and completes the announcements on the Army 2020 design. The plan provides clarification on the future purpose, roles and locations of Army Reserve units and, in doing so, generates the level of certainty needed to support the major recruiting drive we are undertaking to expand the Army Reserve. The restructuring will have impact across the United Kingdom and to assist right hon. and hon. Members in understanding the effect of these changes on their constituencies, documents setting out the detail have been placed in the Library of the House.
To achieve the Future Force 2020 design of a fully integrated, trained Army of 112,000, comprising around 82,000 regular personnel and around 30,000 reservists, with an additional 8,000 reservists in training, the Army Reserve will need to be restructured. The Territorial Army’s current structure was put in place in 2007 and based on some 36,500 posts. It was never fully resourced or manned, it is no longer consistent with defence policy, and it would not fulfil the roles and capabilities required of the Army Reserve under Army 2020.
We will increase the trained strength of the Army Reserve from about 19,000 to 30,000, but at the same time, we will decrease the number of posts in the structure to match the 30,000 target—delivering a fully-manned force structure, for the first time in many years.
The revised Army Reserve structure of around 30,000 will no longer exist simply to supplement the Regular Army in times of national conflict but, as part of an integrated whole force, will be ready and able to deploy routinely at sub-unit level, and in some circumstances, as formed units. To deliver this effect, the Regular Army and the Army Reserve will, for the first time outside of the two world wars, be fully integrated within a single chain of command. Army Reserve units, like their regular counterparts, will be distributed in varying proportions across the adaptable force brigades, the specialist brigades forming force troops and, to a lesser extent, the reaction force brigades. Most importantly, this structure will be properly resourced both in terms of equipment and training and, as spelled out in the White Paper, will be enabled by terms and conditions of service more relevant to the future requirements of reserve service.
This change is already under way, and the last 15 months have seen significant investment in personal and unit equipment, in the vehicle training fleet, and in UK and overseas training exercises for formed reserve sub-units.
To ensure that formed reserve units and sub-units can operate effectively alongside their regular counterparts, regular and reserve units will be formally paired. Pairing will optimise the use of training and equipment resources, increase the capability of the integrated force, and will ensure force elements are available at appropriate readiness to deliver the Army’s outputs to defence. While the majority of Army Reserve units will be at lower readiness than regular units, the investment planned over the coming years will broadly align the equipment levels and training in reserve units to those of regular units.
Decisions on how to rebalance the Army reserve structure have been based on military judgment taking account of the capabilities required from the reserves in the integrated Army, the need to achieve full manning by 2018, and the greater efficiencies in training and equipment resulting from formal pairing between regular and reserve units. While some of the changes may be unwelcome by the units affected by them, they are necessary to deliver the effective, modern and integrated Army Reserve of the future and to enable us to deliver on our commitment to reservists of better training, better equipment and a fully integrated role.
These changes will involve the re-roling of some units, the raising of new units and the withdrawal of others from the Army order of battle. The capabilities which will make up the fixture Army Reserve will be different from today, and this change will also be reflected in the number of units and sub-units held under each cap-badge. The current Territorial Army structure supports 71 major units; overall it will reduce to 68 major units in the fixture structure:
Nine major units will be withdrawn, and their sub-units will either be withdrawn, re-roled or re-subordinated to another unit in the Army Reserve’s order of battle. They are: 100 (Yeomanry) Regiment Royal Artillery; 72 and 73 Engineer Regiments; 38 Signal Regiment; and from the Royal Logistic Corps 88 Postal and Courier Regiment; 160 Transport Regiment; 165 Port Regiment; 166 Supply Regiment and 168 Pioneer Regiment.
A further three major units will be re-roled within the Royal Logistic Corps: 152 Transport Regiment will become 152 Fuel Support Regiment, 155 Transport Regiment will become 165 Port and Enabling Regiment, and 156 Transport Regiment will become 156 Supply Regiment.
Six new major units will be created: in the Corps of Royal Electrical and Mechanical Engineers, 101 Battalion, 104 Battalion, 105 Battalion and 106 Battalion, and in the Military Intelligence Corps, 6 Military Intelligence Battalion and 7 Military Intelligence Battalion. A number of existing sub-units will either be re-roled or re-subordinated to these new units.
Decisions on withdrawal, re-roling or re-subordination of a sub-unit are completely separate from those regarding the sites each currently occupies, which are addressed later in this statement.
Additionally, there will be changes to structures at minor unit and sub-unit levels. Key details of these changes are contained in the documents that have been placed in the Library of the House.
With the exception of the Royal Mercian and Lancastrian Yeomanry, none of these decisions involves a cap-badge change. The Regimental HQ of the Royal Mercian and Lancastrian Yeomanry (RMLY) will move to Edinburgh where it will be closer to its paired regular unit, the Royal Scots Dragoon Guards, which will be based at Leuchars. It will assume command of existing Yeomanry sub-units across Scotland and Northern Ireland. To better reflect its new geographical focus, it is planned to rename this headquarters; “The Scottish and North Irish Yeomanry”. A, C and D Squadrons of the RMLY will remain in their current geographical locations (respectively Dudley, Chester and Wigan), but will come under command of other Yeomanry regiment headquarters, improving their ability to train effectively, and draw-on support from their formal pairing with regular units; a troop will also remain in Telford, which will be subordinated to A Squadron in Dudley. We expect that those squadrons will carry the RMLY cap-badge preserving it for the fixture, in addition to the antecedents they currently carry.
We will implement this structural rebalancing in a phased manner, and complete it by 2016, in order to ensure that those capabilities that the Army Reserve must deliver in the earliest phases of future operations, are available from 2017.
This restructuring will require changes to the current basing laydown of the Army Reserve. The Army has taken the opportunity to review the laydown not only to reflect the structural changes, but also to address the need to optimise recruitment and to facilitate effective training in the future.
The Territorial Army currently occupies 334 individual sites around the United Kingdom, including a number of locations with small detachments of fewer than 30 personnel—the approximate size of an infantry platoon. Some of these sites are seriously under-recruited. To maximise the potential for future recruitment, and particularly to capitalise on existing areas of specialist skills in the national workforce, the Army has determined that it should increase and rationalise the presence of the Army Reserve in urban areas, by merging small, and/or poorly recruited sub-units, into larger sites already occupied by other units in local or neighbouring communities. As well as improving recruitment opportunities the greater concentration of reserve units in fewer locations, and their increased proximity to their paired regular units, will enable more effective use to be made of manpower, infrastructure and equipment. As part of this exercise, the Army Reserve will open or reopen nine additional reserve sites.
Because the Army will be delivering a focused recruiting drive over the next couple of years, we have decided to retain a significant number of small and under-recruited sites, where long-term viability is considered possible. The units on those sites will be challenged to recruit up to strength in the years ahead. From 2016, the Army’s regional chain of command will gradually rationalise and consolidate any sites which remain persistently and seriously under-recruited and/or unable to generate effective Army capability.
Overall, the changes being announced today will result in the net vacation of 26 Army Reserve sites across the United Kingdom in the period up to 2016. The Army Reserve’s future laydown will maintain the broad pattern of activity in Scotland, Wales, Northern Ireland and England.
Further work will be undertaken to better define how those sites being vacated by the Army Reserve will be managed in the future and how retained sites will be improved and expanded where they are required to accommodate larger numbers following consolidation of Army Reserve units. We expect to invest around £80 million in improvements and expansion across the Army Reserve estate, as part of a £120 million overall investment in reserve estate.
Where cadets are co-located on Army Reserve sites for which there is no longer a defence requirement, we will pursue re-provision of facilities for the cadet unit to ensure that a local cadet presence is maintained.
Overall the structural changes to the Army Reserve and the changes to laydown set out above will deliver a more efficient and effective structure which will allow the Army Reserve to develop in full its planned role in Army 2020. This announcement gives certainty to the Army Reserve as it embarks upon the twin challenges of recruiting and training to grow to a fully manned and fully trained establishment of 30,000 and restructuring the force to deliver the outputs required of it under Army 2020.
1Future Reserves 2020. The Independent Commission to review the United Kingdom’s Reserve Forces. London, July 2011.
EA's Navigations/Canal and River Trust
(11 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
On 28 February 2011, Official Report, column 7WS. I made a statement about inland waterways policy for England and Wales. I set out the Government’s vision of a national trust for the waterways that included the British Waterways and Environment Agency (EA) navigations. I said that there would be a phased approach to the delivery of this vision. In phase 1, the functions, liabilities and assets of British Waterways in England and Wales would transfer into a new charity, and in phase 2 the EA navigations would transfer in 2015-16. I made it clear that the transfer would only take place if sufficient funding could be found in the next spending review to enable the charity to take on the liabilities associated with EA’s navigations, and that a transfer would be subject to the agreement of the charity’s trustees.
British Waterways’ functions, assets and liabilities in England and Wales were transferred to the Canal and River Trust (CRT) on 2 July 2012. This was a great achievement which has been widely welcomed and has already delivered considerable benefits such as raising almost £1 million and drawing upon 29,000 volunteer days to support the waterways.
The fiscal situation remains challenging and as a result DEFRA must identify additional savings in 2015-16 to help deal with the deficit. Initial scoping work on transfer costs which was undertaken during the new waterways charity project indicates that the transfer of EA navigations is unlikely to be affordable in the current climate. The Government have therefore decided that the review planned for 2013-14 to consider options for the transfer will be postponed until DEFRA’s finances improve and there is a realistic prospect of the transfer being affordable and that it can take place on terms which would enable CRT’s trustees to manage the additional liabilities involved.
I realise that this decision will come as a disappointment to all those with an interest in our inland waterways who share the Government’s view that a transfer to CRT offers the most sustainable long-term future for EA’s navigations. The Government, however, remain fully committed to transferring the EA navigations when the economic circumstances allow us to do so. The Government will review the position after the next spending period and will make a further announcement at that time on the timing of the transfer.
Migrant Access to the NHS
(11 years, 4 months ago)
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The Secretary of State for Health (Mr Jeremy Hunt)
The United Kingdom successfully attracts many millions of visitors and migrants each year. If our country is to remain competitive, we need to continue to welcome those who come here to work and to study. At the same time public services like the NHS are under increasing strain, coping with the demands of an ageing population and financial pressures. The NHS is and will remain free at the point of delivery for its residents, but it cannot continue as an international rather than a national health service. We urgently need to address this or the system is likely to become unsustainable.
Our health system is very generous to overseas visitors, perhaps one of the most generous in the world. We allow people who are living here temporarily to use the NHS and exempt many of them from charging, while any visitor, including tourists, can visit a general practitioner free of charge. These sorts of services are often not available for our citizens when they are abroad.
The NHS struggles to identify and recover the cost from those not entitled to free treatment. NHS resources, both financial and clinical, are used to treat and care for people who have no long-term commitment to our country and should contribute towards it.
To address these issues, I am launching a consultation today inviting views on proposed changes to the way temporary migrants and visitors access the NHS in England. The purpose of this consultation is to examine critically who should be charged in the future; what services they should be charged for; and how we can ensure that the system is better able to identify chargeable patients and recover costs. As health is a devolved matter, this consultation is looking specifically at how to address the challenges for the NHS in England. The aim is to ensure they make a fair contribution to the cost of treatment, while not restricting access and maintaining the essential public health role of the NHS.
The Home Office will be running a linked consultation on UK-wide proposals to regulate migrant access to the NHS. This will explore proposals to ensure migrants contribute fairly to the cost of NHS care across the UK, including extending charging for primary care to visitors and illegal migrants, introducing a new qualifying test for non-EEA nationals accessing the NHS and a new mandatory health levy for temporary non-EEA migrants.
In the Department of Health consultation, the Government are proposing a new set of rules for accessing free NHS care, based on a principle of “everyone makes a fair contribution” such that free treatment should only be provided to those people with settled residence here who have an established relationship with the UK.
This would mean that temporary migrants, including students and some workers, would in future have to contribute through a levy or a fee that would then allow them to register with the NHS and subsequently receive all necessary treatment without further payment. We propose to add a provision to waive the fee for some high-value workers who choose to waive their right to free NHS care in favour of private health care provision.
In line with the principle of the established relationship we propose to extend the rights of ex-residents who have a long-term record of national insurance payments to access free NHS treatment when returning to visit the UK—currently some are chargeable or have entitlement only to limited treatment. Short-term non-EEA visitors who are here for less than six months, and illegal migrants will continue to be directly chargeable.
The consultation considers the operational and clinical case for charging for NHS care in all settings including GP, community services and will also consider A and E and emergency GP consultations for chargeable patients. Not compromising patient access would be a fundamental requirement for any such future change.
Finally the consultation addresses the current major weaknesses in the administration of charging. The consultation provides, in outline only, a potential new system, including a revamped registration system with data that identifies a person’s chargeable status. We will seek extensive front-line NHS input to develop a detailed, fit-for-purpose model that has its support. This engagement will continue beyond the end of the formal consultation process.
The consultation will run for eight weeks and will close on 28 August 2013.
The consultation document and supporting evidence has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.
It is also available at: www.dh.gov.uk/consultations.
Immigration Bill Consultation
(11 years, 4 months ago)
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The Minister for Immigration (Mr Mark Harper)
The forthcoming Immigration Bill will make it more difficult for illegal migrants to live in the UK unlawfully and ensure that legal migrants make a fair contribution to our key public services. I am launching two consultations to set out some proposals on how we will achieve this. Copies are available in the Library of the House and on the Home Office website at: http://www.ukba.homeoffice. gov.uk/policyandlaw/consultations/. Further proposals will be set out over the summer.
The first consultation is on proposals to better regulate migrant access to health services in the UK and will run for eight weeks. We are responding to public concern that the current rules regulating non-EEA migrant access to publicly funded health care services are both overly generous, particularly when compared with wider international practice, and poorly applied. These current weaknesses result in the UK taxpayer unfairly bearing the health care costs of temporary non-EEA migrants, who will not make the same financial contribution to our health care systems as permanent residents over their working lives in the UK, and short-term visitors and illegal migrants who access free health services when they should be subject to treatment charges.
This consultation will run in parallel to a separate Department of Health consultation which analyses the vulnerabilities of the current charging regime for overseas visitors in England, and sets out a range of proposals for reforming the system, including through improved registering and tracking of chargeable patients.
The second consultation launched today concerns proposals to prohibit illegal migrants from renting accommodation in the UK and will run for seven weeks. This forms part of the Government’s wider drive to prevent illegal migration, including by removing the means by which migrants can live in the UK unlawfully. Our intention to take action in this area was signalled by my right hon. Friend the Prime Minister in his speech on immigration on 25 March, and the inclusion of related measures in the forthcoming Immigration Bill was announced in the Queen’s Speech on 8 May.
The consultation seeks views on the creation of a duty to require landlords to conduct immigration status checks on tenants before providing residential accommodation, with financial penalties for those landlords who let property to illegal migrants having failed to conduct the necessary checks. The landlord checking proposal is modelled on the existing civil penalty scheme for employers of illegal migrant workers.
Khat
(11 years, 4 months ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
The Government will control khat under the Misuse of Drugs Act 1971 as a class C drug.
The Advisory Council on the Misuse of Drugs (ACMD) undertook a thorough and comprehensive scientific review which focused on the medical and social harms of khat consumption. The ACMD report gives considerable insight into the complexity of this matter and, based on the available evidence, it came to a reasonable conclusion in its recommendation to Government. Although it recommended that khat should not be controlled, the ACMD acknowledges that there is an absence of robust evidence in a number of areas and that there are broader factors for the Government to consider when making their decision. The decision to bring khat under control is finely balanced and takes into account the expert scientific advice and these broader concerns.
The whole of northern Europe—most recently the Netherlands—and the majority of other EU member states have controlled khat, as well as most of the G8 countries including Canada and the USA. In all these cases khat’s exportation, importation, supply and its possession or use has been banned. Failure to take decisive action and change the UK’s legislative position on khat would place the UK at a serious risk of becoming a single, regional hub for the illegal onward trafficking of khat to these countries. Seizures of khat transiting the UK en route to the Netherlands have already been increasing in size and frequency since the Dutch ban earlier this year. The ACMD report recognised the likelihood that some khat is being re-exported to countries where it is illegal. The ACMD could not determine the scale of this activity based on the available evidence and acknowledged that this concern forms part of Government consideration of the matter.
Khat continues to feature prominently amongst the health and social harms, such as low attainment and family breakdown, cited by affected communities and the police and local authorities working with them. The ACMD acknowledged that there was insufficient evidence to enable the ACMD to advise if khat use was a cause or a symptom of social harms. The Government are concerned that we risk underestimating the actual harms of khat in our communities owing to the limitations of the evidence base available to the ACMD. To ensure a proportionate and robust policing response, the Government will introduce an escalation framework for the possession of khat for personal use, similar to that in place for cannabis.
The Government will ban khat so that we can protect vulnerable members of our communities and send a clear message to our international partners and khat smugglers that the UK is serious about stopping the illegal trafficking of khat.
Machinery of Government Change: Youth Policy
(11 years, 4 months ago)
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The Prime Minister (Mr David Cameron)
Cross-cutting responsibilities for youth policy will today transfer from the Department for Education to the Cabinet Office which will now lead for the Government on: cross-Government youth strategy and policy co-ordination; management of the statutory duty on local authorities for youth provision in their areas; and strategic relationship management with young people and youth sector organisations on policy development.
Grand Committee
The Deputy Speaker (Baroness Fookes)
My Lords, first I must issue the usual reminder that should there be a Division in the Chamber, the Committee must adjourn for 10 minutes.
Government Spending Review 2013
(11 years, 4 months ago)
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Lord Deighton
To move that the Grand Committee takes note of the 2013 spending review.
The Commercial Secretary to the Treasury (Lord Deighton)
My Lords, last week’s spending round was a further step in the Government’s programme of returning the public finances to a sustainable position. Spending reductions are being achieved by transforming public service delivery, driving through efficiency savings and controlling welfare spending.
Through three years of reform and savings, the Government’s actions have brought the deficit down by a third; we are set to borrow £108 billion this year, £49 billion less than at the peak. We have kept interest rates at record lows, which is good news for mortgage borrowers as well as, of course, making a major contribution to keeping the Government’s own costs down. We have helped a record number of people into work. From the initial savings plan of £80 billion, we are right on target, having already delivered £53 billion of it. It has been well managed from the beginning.
We have to keep going. This spending round looked at taking £11.5 billion of savings out of departments. At the same time, we continue to meet our pledge to protect certain areas, the so-called ring-fence: the health service, the schools system and our overseas development budget. Because of the tough decisions that we have taken to be able to make economies elsewhere, we have been able to invest in education and accelerate school reform, so the Department for Education’s overall budget will increase to £53 billion and school spending will be protected in real terms. We have increased the health budget from £99 billion when we came into office to £110 billion in 2015-16. Capital spending in health will rise to £4.7 billion. We are proud to be able to fulfil our commitment to spend 0.7% of our national income on development. I do not think of those ring-fences as some sort of constraint on our ability to save but as reflecting our priorities and protecting what we have been able to accomplish in those critical areas.
We are reforming public services to get more for every £1 we spend of taxpayers’ money. Yesterday, I was at a Civil Service programme for staff members called, I think, “Be Exceptional”. The whole point was to clarify for everybody that this is a continuing and constant programme of reform and is now the way we do business: determining how we can deliver things differently and more efficiently. It is not something that you do as a one-off to meet a specific target but a continuing requirement for our Civil Service to be able to deliver and perform in a more effective way, utilising fewer resources.
As part of that, we are driving out costs, renegotiating contracts and reducing the size of government. We have cut spending on things like marketing and consultants. We are focused hard on what technology can do for us, and are consolidating procurement and negotiating hard on behalf of the taxpayer. We must also reform pay in the public sector by keeping pay awards under control and limiting public sector pay rises to an average of up to 1% for 2015-16. In the spending round, we announced that we are ending the automatic progression pay in the Civil Service by 2015-16.
We have already saved £5 billion, and this spending round found another £5 billion of efficiency savings; that is of course nearly half the total of £11.5 billion at which we were aiming. To give noble Lords a sense of where that is coming from, just under £2 billion comes from the departmental administration budgets in the year in question. That means that since 2010 there has been an overall reduction of around 40% in the cost of running Whitehall departments. That tells you on the one hand that it has been a very thorough exercise. On the other hand, it might tell you something about how efficiently we were positioned at the start.
We have reduced by £1.5 billion the Government’s projects portfolio, scaling back some projects and stopping other non-priority ones. That is just a question of being much more rigorous about prioritising, which you always have to do when budgets are tight. I talked about the Government being a much more effective procurer by centralising procurement using our immense bargaining power. We expect to squeeze a further £1 billion out of that. One example highlighted in the spending round is that we are bringing together health and social care to manage more efficiently the delivery of services to the home and over time provide a better service as well; it should help the NHS save something like £1 billion.
In 2010, the Government set out welfare savings worth about £18 billion a year. Last week, my right honourable friend the Chancellor of the Exchequer announced further welfare reforms. We have put in place new measures to support people to get them into work. It is all about keeping welfare spending under control and affordable. The changes involve making sure there is up-front work search and that all claimants prepare for work and search for jobs right from the start of their claim, and introducing weekly rather than fortnightly visits to jobcentres for half of all jobseekers. It is all about getting people back into work in the most efficient and effective way.
That is at the specific level. At the general level the Chancellor also introduced a new welfare cap. The theory behind this is to try to control the very significant overall costs of the benefits Bill. We have capped the benefits of individuals. This now is an approach to try to cap the system as a whole to keep our entire budget within what we can control. That cap will apply to what is effectively more than £100 billion of welfare spending and is another move to make sure that we are managing our budget in a consistent, rigorous and professional way and that welfare remains affordable.
The other half of the spending round statement was in Investing in Britain’s Future, which in effect lays out our plan for infrastructure. It demonstrates that right up to 2020-21 we will invest in infrastructure. It does a number of things. It gives a long-term spending commitment, which is the right horizon to provide for those kinds of long-term projects. We have been plagued by “stop, go, stop, go” historically. This gives certainty to an industry that needs that long-term investment in the right way. It also demonstrates that we are prioritising infrastructure and shows which infrastructure projects we are funnelling the money towards. That is what is done here.
Infrastructure is at the heart of our economic strategy. It is a key supporting foundation for what my right honourable friends the Prime Minister and the Chancellor always refer to as the global race. We need infrastructure in this country that can support industries that expected to be competitive on the global stage. This investment is critical because we have underinvested for generations now and we need to modernise our infrastructure and bring it up to date. We are talking here about transport, energy, communications systems and flood protection. The document also refers to our social infrastructure, both housing and schools. We are getting the right long-term approach to that. I do not think that there is any political contention about whether this is a good thing or not; it is all about how well and how effectively we do it. We will, I am sure, have a discussion about how well and effectively we are doing it and who had the good ideas first, but fundamentally it is really important that this country gets behind its infrastructure programme and delivers it as efficiently as possible. It is now all about delivery and making this programme happen.
To make a programme happen you need three things: a really good plan, the money and the capability to implement it. We are building on the original national infrastructure plan that was produced with the Autumn Statement in 2010. It is to be updated towards the end of this year and we will refresh the so-called construction and infrastructure pipeline, which is where we show the list of projects to industry so that it knows what we are doing and can make preparations to support it. Investing in Britain’s Future is in effect a supporting strategy document that lays out in each of the sectors what we are doing, why we are doing it, and what we think it takes to make this country competitive. To me, that is why what we have done in this spending review is potentially transformational. We are taking the right long-term strategic approach that thinks about the issues in the correct way.
The money is the next step in any plan. I have already referred to how parts of the infrastructure which the Government fund from taxpayer resources will be handled, and of course the majority of the focus in this document is on our roads and our rail system. I will not go through the numbers or the detail of the particular projects because they are all laid out in the document, but the road investment is more significant than anything we have seen since we put the major national structure of roads in place in the 1970s. The rail investment, which has already begun with Network Rail, marks a period of greater investment than anything since the Victorian times, and of course we have also put a comprehensive budget in place for HS2. Similarly, we have put long-term budgets in place for science, infrastructure and affordable housing, and to ensure that we finish off our digital communications programme so that we have very fast broadband coverage in the maximum number of locations as soon as possible. We are working closely with the private sector to accomplish that.
My final point concerns our own capability, which is an exercise that I have been very much involved in myself: making sure that the Government know how to be a good client when they are building infrastructure. We have reviewed the four major departments with infrastructure responsibility, which of course are the Department for Transport, the Department for Energy and Climate Change, Broadband Delivery UK, which sits within DCMS, and the Environment Agency, which sits within the Department for Environment, Food and Rural Affairs. We have looked at the commercial resources that they need to deliver the project portfolio in front of them, and we will work with them to supplement their own resources to make sure that they have people in place. Structurally, from an organisational point of view, the presumption is that we will manage these projects within organisations that are dedicated to project delivery. We will get them done urgently, with focus and for great value. An example would be that we are going to corporatise the Highways Agency so that it has the flexibility it needs to hire the staff it needs to do the job and has flexibility with its funding so that it can get on and be the most effective deliverer of roads that it can be.
Baroness Kramer
My Lords, I want to thank my noble friend Lord Deighton, who has done the heavy lifting in this debate by providing us with the details of the spending review and summarising them for us, so I will not try to repeat that. However, I want to confirm that I find myself very much in support of the general thrust of the two Statements, first on the spending round and then on infrastructure, because what lies beneath them is essentially a strategy of reducing revenue spending in order to allow a shift into infrastructure investment. That surely is what we need to achieve the growth that we require for this country.
I know that the Labour Party now buys into austerity, so I will be very interested to hear its comments, but I am still not clear whether Labour understands why austerity has been so necessary. We have seen the build-up of debt over more than a generation, but during those years Labour spent and borrowed as if we were at the bottom of an economic cycle when we were in fact at the top of one. When the inevitable bust came—it is always caused by one event or another, but cycles happen—the economy found itself so heavily overborrowed that many of the tools that would have been available in more rational circumstances were not available, leaving the Government with no choice but to cut sharply into structural revenue spending.
However, the coalition is also having to rebuild an economy that, in the view of many now, had been neglected for more than generation. It is hard to believe that manufacturing fell from 26% of GDP in 1979 to a low of 10.5% in 2009. The service industry grew but manufacturing did not grow alongside it as it should have done. However, that is only part of the imbalance that was allowed to develop. We became a largely public sector-driven economy, and it has to be excellent news that for every job that has been lost in the public sector, three have been gained in the private sector. Those are now sustainable jobs, which is what we need in order to build. How did we lose so many apprenticeships in the Labour years? How did we take so many young people through education but find that when they finished they lacked the skills needed to get a job? This spending round, again, has supported apprenticeships and protected, in real terms, spending on schools and the pupil premium, which surely is an investment in the future of our most disadvantaged youngsters.
How did we end up with a Government, although this concerns more than one Government, with a procurement process that simply is not fit for purpose? I congratulate the noble Lord, Lord Deighton, for bringing sense, skill and proper planning into government purchasing. I now understand that the infrastructure programme that he has laid out represents a steady rollout, year by year, which is exactly what we need in order to deliver infrastructure. Perhaps he could tell me whether I am correct in my understanding that the order of play of this rollout of infrastructure is to have an early focus on opportunities for fairly quick wins, such as broadband, school places and affordable housing, with the longer-term projects that need much more planning and preparatory work, particularly in transport, coming out over the longer term. We now have a path for that.
We are holding this debate just as increasingly positive news is creeping out; we are moving, as the Chancellor said, from rescue to recovery. Both the manufacturing and service sectors are growing, according to the PMI and the Bank of England. Very encouragingly, the headline small business index rose to 15.9 in the second quarter, up from 6.3 in the first quarter. Mortgage approvals are up and confidence is improving. The position with the silver pound, which is rarely talked about, is interesting. Projections show that spending by the over-50s—a group of people who have been far less hit than others in the population, especially younger people—is increasing steadily. We know that it is a group of people with the capacity to spend. Their spending was up from £250 billion in 2007 to £317 billion in 2012. The forecast according to Age UK is for a bigger number to be delivered this year. That seems to be an affordable place to go to see that kind of consumer stimulus.
I am particularly encouraged that exports are rising markedly. The BCC—the British Chambers of Commerce—reports that the growth in exports is at its fastest since 1989. The Government have taken on a really tough target of doubling exports to £1 trillion by 2020. Much of that will have to come from SMEs, which provide over half our exports today. I give credit to the noble Lord, Lord Green, but also very much to Vince Cable, for turning UKTI into an effective tool after a generation of neglect. This spending round provides more money for our embassies to work with UKTI and for increased export finance, especially to small businesses, which is surely vital. This is an area where scaling up has to continue. It must surely be one of the primary focuses now of economic policy.
The welfare changes in this spending review are, frankly, modest. That must be right, as we have to manage austerity in a fair way. I want us to monitor the impact of the delay in paying jobseeker’s allowance to see whether that has an untoward impact, albeit one that is unintended. As I say, the changes on the welfare side have been very modest. However, I have a point of clarification for the noble Lord, Lord Deighton, on the so-called welfare cap, which strikes me as less a cap and more a sensible management tool to capture key parts of annually managed expenditure: programmes such as incapacity benefit, which spiralled completely out of control under Labour even though there seemed to be no particular increase in either disabled or injured people. Will the Minister confirm my understanding that the cap is the OBR forecast of the cash cost of the included programmes? Does breaking the cap trigger a report to Parliament but not necessarily an automatic curtailment, unless there turns out to be an important need for underlying change?
I will talk briefly about infrastructure because the noble Lord, Lord Shipley, will focus his remarks on that issue, especially on housing. However, I take this opportunity to repeat a plea to the noble Lord, Lord Deighton, for increased flexibility for tax increment financing to allow local authorities to pick up the pace of investment in small-scale infrastructure. The very case that he makes for large infrastructure, involving the orderly rollout of schemes, certainty of funding and tapping into external financing applies just as much to the small and local. We have accepted that small is crucial in business and commerce; we now need to accept that small as well as big is vital in infrastructure.
All this has consequences for our financing system. The business bank is an important beginning, but long-term patient capital is still hard to find in the UK. I hope we will try to develop the capital markets to provide that capital. The noble Lord, Lord Davies, the noble Baroness, Lady Noakes, and I all attended a talk given by Robert Peston not long ago in which he pointed out that in the US, 80% of small business funding comes from the capital markets rather than the banks. The opposite is the case here. Therefore, when a bank is compromised, we are in a very difficult position. The major banks are going to be seriously challenged to meet lending demand, despite Funding for Lending, as growth picks up and firms chew through their cash reserves.
It is good news that RBS has asked Sir Andrew Large, former Bank of England deputy governor, to look at its lending practices, because when it says that it has £20 billion that it would love to push out of the door tomorrow morning but cannot, we all find that a fairly extraordinary statement. However, something is holding our banks back. I suspect that it is not the usual argument about capital but is much more about capability, and it would be interesting to find out more. The Government have done much to enable recovery, and this spending round is an illustration of that. However, we cannot let a weakened banking system derail these early beginnings for which the public have waited and worked.
Lord Risby
My Lords, it is a great pleasure to follow my noble friend Lady Kramer, who makes the very important point that unemployment has fallen and that we have seen growth in the private sector and the emphasis on infrastructure that has characterised the Government’s policy. I congratulate my noble friend Lord Deighton, who brings such enormous private sector expertise to the role that he is fulfilling, which adds huge value to what the Government are doing.
I think it is fair to say that all European countries are trying to restrain expenditure and look at how to generate economic growth. We are in the fortunate position whereby there are now signs of some economic growth. Indeed, most organisations believe that in the coming year we will have the highest rate of growth in Europe of all the major economies, albeit that there is still room to go much further. However, the truth of the matter is that we remain vulnerable. We are not tied to major currencies such as the euro and the dollar. We need to continue our policy of restraint to keep mortgage rates and borrowing costs low, as we still have to borrow an enormous amount. While the point of today’s debate is to look to the future, it is worth remembering that key element of the review, as we know that the markets can be fierce in their judgments, as we saw when they made a judgment some years ago about the competence of policy in this area and promptly devalued our currency by 25%. That has meant that inflation has continued at a high level, which we must never see again.
However, I should very much like to consider how we can stimulate growth from external activity and foreign investment, which were alluded to in the spending review. All Governments are of course trying to do this, but last week an interesting statistic from UNCTAD revealed that foreign direct investment into the United Kingdom rose by 22% in 2012 to the highest in Europe, £41 billion, compared with a drop of 18% in the world, 42% in Europe and, extraordinarily enough, 85% in Germany. It is clear that much of this investment arises from the fact that we have an open economy and are very welcoming, but it is also important to note the high level of re-investment that has been made by foreign-owned corporations in this country, which suggests that they have a high level of confidence. China, with which we have had some political difficulties, has continued to make major investments, and I hope that after the resolution of a recent difficulty this investment will increase further.
Nevertheless, our trade and export activities have been inadequate. For example, there was hardly any improvement in 2012 in our manufacturing and service exports when compared with the previous year. Of course, our European markets have been weak and we have tried and been successful in expanding our exports to countries such as Russia, China and India. Nevertheless, we could have done much better. This is now simply a necessity for us. Household budgets are of course being squeezed and European markets look to remain anaemic. Over the next two years, 90% of world demand will be generated outside the EU.
In the spending review, the Government have set a national challenge to double UK exports and to get 100,000 more companies exporting by 2020. In consequence, £140 million was announced in the Autumn Statement last year to help SMEs to export. I am pleased to see in the spending review that despite the pressures, funding certainty has been given to UKTI to continue with this policy, thereby maintaining the support for the next few years. Some £70 million was announced to package overseas export promotion more professionally, and a new unit has been formed—noble Lords will agree that this is important—to look at the attractions of investment in our financial services sector, again with particular emphasis on SMEs. The CBI welcomed all this by declaring:
“It’s right to link increases in UK Trade and Investment’s budget to improved commercial nous, at a time when it must be firing on all cylinders to boost exports and support the drive for growth”.
It is fair to say that all Prime Ministers have been for years trying to advance the promotion of exports from this country, but I should like to talk about an initiative that was brought into being in November last year, the creation of prime ministerial trade envoys. There are eight of us, six of whom are in your Lordships’ House and two of whom are Members of the other place. We were appointed on a cross-party basis. The whole idea is to assist UKTI, our embassies abroad, our export effort and, with the appellation of being called a prime ministerial trade envoy, get the highest possible access. As it happens, I am the trade envoy to Algeria. Perhaps I may touch on this for a few minutes. The role of the trade envoy is to enhance and develop commercial partnerships through the following: identifying commercial opportunities both for trade and investment, bringing together UK and target market business leaders to develop opportunities to secure the high-level access that I mentioned, and working with the export promotion activities of our embassies and UKTI. It is good that this is done entirely on a cross-party basis. Yesterday morning, we had a very good meeting in which we were trying to exchange best practice and to see how we can work together to really drive this element of our national life, exports, which have frankly been inadequate when compared with many other countries, even in Europe.
I should like to talk a little about Algeria because it summarises exactly what I am talking about. We have had no historical links to that country, but it has $190 billion dollars of reserves and a $300 billion infrastructure programme. We start from a very low base, but in the past 18 months there have been an enormous number of ministerial visits, which were very welcome, including that of the Prime Minister in January. We now have a clear partnership with Algeria. So many of the countries that we are talking to and to which we want to export feel, particularly after a post-colonial experience, that there should be a partnership in the fullest sense of the word. We now have, for obvious reasons, a security relationship and a defence relationship with Algeria, which is important. Every week, English-language schools are springing up all over the country, and we hope that during the course of the next month or two, hopefully in September, we will sign some major contracts. This has come about because of a concerted effort led by the Prime Minister and other Ministers. I pay tribute to a very dynamic ambassador in this regard.
This applies to my colleagues who are prime ministerial trade envoys. It is happening everywhere. It is part of a process, on which I hope everybody will agree, of reorienting our exports to more dynamic markets. It will not solve all our problems, but in the past we have seen erratic and feeble export promotion, and that is changing. This is happening at the highest level of government and is reinforced by the commitments made in this spending review. We have so much to offer. I talked about our open economy and the English language. We make a virtue of not paying bribes and not getting involved in anything like that. We have attempted to reinvigorate UKTI and there are trade envoys to support this. That is all under the direction of my noble friend Lord Marland.
This week, as my noble friend commented, the BCC reported a remarkable level of export activity among its members that showed a considerable increase in confidence to a six-year high. That was also reflected in the purchasing managers’ index, which showed an improvement. I hope that the efforts that are now being made will address a key element of our future growth, and I welcome the commitment given to this in the spending review and the Government’s commitment to try to make this happen.
The Lord Bishop of Truro
My Lords, I thank noble Lords for this opportunity to contribute to this debate. I am especially grateful to the noble Lord, Lord Risby, for his contribution, which helps us see matters from a wider perspective. In a debate such as this, we can sometimes focus too much on our own issues. With my tongue only slightly in cheek, as a Bishop who represents Cornwall, I wonder whether the noble Lord might represent to the Prime Minister the fact that we need a trade envoy from England to Cornwall. Having heard from the noble Lord, Lord Deighton, that infrastructure is an important part of the comprehensive spending review, I mention the dualing of the A30 in Cornwall and, knowing as I do that it is not all down to the Government, there might be something to be said for hoping that the good work that is being done to make the harbours better in Penzance and St Mary’s continues to a successful conclusion very soon to ensure a better and sustainable transport link between the mainland and the Isles of Scilly.
We have been abroad, but I want to spend a few minutes speaking from another perspective: that of the Children’s Society. I declare an interest as its chair. I cannot help but look at these big announcements from the point of view of children and families, especially the most vulnerable among them. According to the Government’s own figures, the combined effect of public expenditure cuts and tax and benefit changes is to make the poorest households nearly £1,000 worse off. The Chancellor pointed out that the richest 10% have paid the most, but he forgot to say that across the rest of the distribution it is poorer households that lose a higher proportion of their income. Low-income families with children in particular are bearing a disproportionate share of the burden of tackling the deficit.
Perhaps optimistically, I was looking for some good news this time around, and there is some. I welcome the Government’s continued commitment to free early education for all 3 and 4 year-olds and to extending this to around 40% of 2 year-olds in more deprived areas. The protection of the pupil premium in real terms is also welcome when so many areas of public spending are being cut. I am concerned about how much of this is actually reaching the most disadvantaged children whom it is designed to benefit. We will know more about this, I hope, when the Government’s evaluation of the pupil premium scheme is published shortly.
However, there are some worrying aspects of the spending round. I apologise to my noble friend Lady Kramer, but I want to use the word “cap”. The first is the overall cap on large parts of the welfare budget, covering housing benefit, disability benefits and tax credits, including universal credit. I am not here to defend social security spending for its own sake. Contrary to much political and media rhetoric, very few people want to be reliant on benefits to make ends meet. Nearly every family aspires to having a job that pays a decent wage and a home they can afford, but the reality is that many millions of people are unemployed or underemployed, wages have been stagnating in real terms for the last decade, and housing costs have soared beyond the means of many working families. Forcing Ministers to choose between the political embarrassment of breaching the welfare cap or meeting vulnerable people’s living costs could mean that many more people will be pushed towards doorstep lenders and food banks because the level of benefits is inadequate to meet their family’s basic needs.
Here I shall expand a little on a question about food banks that I put yesterday to the noble Lord, Lord Freud. From my perspective, while applauding the wonderful work of volunteers in setting up food banks, many of whom are Christians, I have to say that it is a complete scandal that we have any food banks at all in this country in the 21st century. There are over 20 food banks in Cornwall alone. What on earth is happening in our country? I ask the Government again whether we ought not to spend a tiny amount of money on some research. Certainly the anecdotal experience that I have and the stories that I hear make it clear that there are some real benefit issues, which is why many people are driven to go—they do not choose to go; they have to go—to food banks.
If the Government are serious about cutting the welfare bill, they need to address the underlying drivers of social security spending that lie outside the benefits system: a lack of jobs, low pay and a chronic housing shortage. Imposing an artificial cap on the budget risks shifting the blame and the burden on to the poorest families, who have done nothing wrong but who are being penalised for our failure to tackle the root causes of the problem.
This links to my second point, which concerns the low level of public sector net investment. Anyone listening to the Chancellor’s speech could be forgiven for thinking that we were about to embark on a massive infrastructure investment spree, suggested again by the noble Lord, Lord Deighton, this afternoon. But analysis by the Institute for Fiscal Studies shows that public sector net investment is not in fact set to rise, and will actually fall as a share of GDP in 2016-17 and 2017-18. This feels like a huge missed opportunity to make up for years of underinvestment in affordable housing, creating badly needed jobs in the short term and helping to bring down house prices and rents in the longer term, so that fewer people are dependent on government subsidies. The £3 billion capital investment in affordable housing announced by the Chancellor is a small step in the right direction, but it does not go nearly far enough to address Britain’s chronic housing shortage. Housing is arguably the UK’s biggest long-term policy failure. In the past year, there were 102,000 housing starts, less than half the 240,000 a year needed to meet estimated demand. It seems ludicrous to me that only 5% of public expenditure on housing goes on capital investment in new houses while 95% goes on demand-side housing subsidies.
Finally, I remain uneasy about the language used by the Chancellor in speaking about welfare, a concern that is shared by many of my fellow Bishops. This section of his speech starts by distinguishing two groups of people who need to be satisfied with the welfare system. The first group are,
“those who need it who are old, vulnerable, who are disabled, or have lost their job and who we as a compassionate society want to support”.
The second group are,
“the people who pay for this welfare system who go out to work, pay their taxes and expect it to be fair on them, too.—[Official Report, Commons, 26/6/13; col. 313.]
The first group barely get a mention in the rest of the speech, whereas three and a half pages of the transcript are dedicated to addressing the perceived concerns of the second group.
Making such a clear distinction between taxpayers and claimants creates the misleading impression that the welfare system involves a large one-way transfer of money from one group to the other. Far from stimulating compassion, it encourages resentment towards those who are seen to be living off the good will of others. It also ignores the reality that the vast majority of us both contribute to and benefit from the support provided by the benefits system at different points in our lives. For example, around half of all children will be in families that are entitled to universal credit when it is fully implemented.
Forgive me, as I conclude, for using a biblical reference to make my point. Paul, in one of his letters, used the metaphor of the human body to describe a Christian vision of mutual support and interdependency. He said:
“those parts of the body that seem to be weaker are indispensable, and the parts that we think are less honourable we treat with special honour … so that there should be no division in the body … if one part suffers, every part suffers with it”.
Paul was talking, of course, about the church community. I believe the same principles apply to the way we support one another through our social security system. We are in danger of dishonouring the less presentable parts of our society and as a nation we will become less healthy as a result. The Government’s spending plans should have the well-being and development of all our children at the heart of them. When millions of British children are left to grow up in poverty, everyone’s future prosperity suffers.
Baroness Noakes
My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Truro. My own remarks will be focused on rather different areas of the spending review. I was unable to be in the House when the Minister repeated the Chancellor’s spending round Statement, so I am grateful for the opportunity to speak today.
I start by congratulating the Government on sticking to their resolve to keep downward pressure on spending in order to eliminate the deficit. The update on GDP from the Office for National Statistics last week underscored the scale of the problems the Government inherited in 2010. The peak-to-trough deficit in 2008-09 is now calculated at an astonishing 7.2%. That alone vindicates the stern action taken by the Government when we came into power. The Benches opposite could barely conceal their gleeful anticipation of a triple-dip recession earlier this year. However, as last week’s figures confirmed, we avoided that. In addition, we now know that we did not even have a double-dip recession. The Government inherited an extremely poor hand of cards, but my right honourable friend the Chancellor has played them skilfully.
I fully support the Government’s approach on public sector pay. Continuing to limit pay rises to 1% is thoroughly sensible, especially as public sector pay has continued to run ahead of private sector pay in recent years. I also support the move to remove automatic pay progression. I understand that several central government departments have already done this and so I am unclear as to the savings that this move will generate. I could not find any figures on this in the Green Book and I echo the criticisms by the Institute for Fiscal Studies about the paucity of analysis in the Green Book. I hope my noble friend can give some analysis today. Will this apply to local government? What will be the impact on the NHS’s budget? What precisely are the Government’s plans and how much do they expect to save?
I have some concerns about the cost of public sector pensions that have not been dealt with. Public sector workers account for less than 20% of the workforce but are more than three times more likely to have current access to a defined benefit pension scheme than those in the private sector. This would not matter much if public sector pay scales fully reflected the value of the pension promise, but the plain fact is that they do not. The current Government, like the last one, have talked a good story about bearing down on the cost of public sector pensions. In 2011, they claimed that they had done such a good deal that it would last for 25 years and would save billions. That is fine if you have faith in 50-year projections based on heroic assumptions. Meanwhile the real problem, which the Government continue to ignore, is that public sector pension cash flows are now negative: pension payments exceed contributions received. In 2005, this cash cost was only £200 million, but it is now around £11 billion a year. According to the Office for Budget Responsibility, it is forecast to rise to more than £16 billion over the next few years, and this figure is likely to be even higher once the latest proposals for a flat-rate state pension and the related contracting-out changes are implemented. The spending round scraped together £11.5 billion of savings but failed to defuse the cash time bomb of public sector pension costs.
While I fully support the Government’s efforts to control spending, we must not lose sight of the facts that we are still borrowing money each year and that debt will not start to reduce until 2017-18. Furthermore, there are no overall cash cuts; we are spending more every year. In 2009-10, we spent £669 billion. In 2015-16 we are planning for £745 billion. This is not Greek-style austerity.
The Treasury has clearly been involved in tough discussions to cut expenditure, but I am reminded of the line from Horace:
“Parturiunt montes, nascitur ridiculus mus”.
The Treasury laboured but brought forth a ridiculously small amount of savings. We still have a huge problem. Expenditure is in excess of 45% of GDP and debt is north of 75% of GDP. On current plans, even after this spending round, the figures will be 40% and 85%. We are a long way from resolving our finances. It is not surprising that the Cabinet Secretary is warning of a 20-year turnaround timescale.
There is no paradigm shift in this spending round. I had hoped to see an end to salami slicing. International experience points to much tougher decisions, taking out whole programmes rather than bits of them. There are far too many government departments, and along with that far too many government Ministers and senior civil servants, together with their hangers on. Streamlining the machinery of government would be a good place to start.
If we are serious about reducing public expenditure, we need to look again at the sacred cows of education and health. Ring-fencing might be politically astute but is economic nonsense. The overseas aid budget is an extravagance that does not command even general public support. Many of the projects that sail under a green flag are not obviously value for money. I have particular concerns about the Green Investment Bank, which will not be run as a bank or supervised as a bank. I fear that the billions of pounds that are being thrown at it will end up as losses as it “invests” in unbankable projects.
I congratulate my right honourable friend the Chancellor for ignoring the Keynesian siren voices calling for more money to be thrown at infrastructure at the expense of even more debt. The announcements last week about infrastructure spending were, I believe, predicated on no new money. I do not criticise that. I am sceptical about the economic benefits claimed for public sector infrastructure spending, and it is absolutely essential not to abandon hard economic analysis when it comes to spending public money.
That leads me naturally to the High Speed 2 project, on which I find myself surprisingly in agreement with the noble Lord, Lord Mandelson. Last week, the Chief Secretary announced a funding envelope of £42.6 billion for the construction costs of HS2. What he did not say was that the £42.6 billion was one-third higher than the previous budget, as Transport Ministers had to admit the previous day. Two days ago, transport officials as good as admitted to the Public Accounts Committee in the other place that the benefits have been overstated. The benefit/cost ratio for the HS2 project was already low by transport standards and now looks to be completely bust. Even the CBI, usually a cheerleader for infrastructure projects, has called for a rethink. Today is not the day to debate HS2 itself, but these developments remind us that public sector infrastructure is not the panacea that some would claim for it and it does not unambiguously benefit the economy.
I am aware that we are debating only the spending round and not a full Budget or Autumn Statement. However, just let me say that while controlling expenditure is important, the supply side of the economy still feels neglected. We need much more tax reform, lower rates all round and a much simpler system, and we need to make far more progress on deregulation. We need to liberate and incentivise the private sector to create wealth. We need to keep Britain as an attractive place in which overseas companies can invest. In sum, we need a lot more than the spending round gave us.
Lord Higgins
My Lords, it is always a great pleasure to follow my noble friend Lady Noakes, and I very much agree with her general theme and her closing remarks.
As I am going to say quite hard things in the context of what my noble friend said, let me stress that I would not for one moment underestimate the difficulty of reducing a deficit. I began that a very long time ago as a new Treasury Minister. We were an incoming Government determined to cut the deficit and, indeed, public expenditure and the size of the public sector. I was sent to see the new Secretary of State for Education, one Margaret Thatcher, who was basically in favour of cutting back the size of the public sector but not her department. I arrived with a long list of cuts, including eliminating the Open University. In the end, after a lot of haggling, I said, “Margaret, we’ll give you a deal. You can keep the Open University and make all the other cuts, or you can make all the other cuts and keep the Open University”. To my astonishment, she said, “I’ll keep the Open University”, so I got my cuts and we and the country got the Open University, which was probably the right decision. The reason I stress this point is because we have to be a great deal tougher than we are being.
I am worried by the constant repetition—it is once again in the Chancellor’s speech—that we have cut the deficit by one third. That means that we are continuing to borrow at two-thirds of the appalling rate at which the previous Government were borrowing. I hope that we can get rid of that expression. It is interesting that it has not changed since this public expenditure round announcement. We are still saying the same mantra. I hope that we can get rid of it.
My concern is that in the light of that statement we can be complacent. We simply must not be complacent. There is nothing more important for the future of this country than getting the deficit down. I am a little worried about some of the presentational side of things. The public sector finance statistics have the heading, “Public sector net borrowing”. It ought to be, “Net extra borrowing”. We constantly hear figures from the Government that overlook the word “extra” when it ought to be there. There is also a very curious quirk in the figures. In the column for public sector debt, the figure is £1,103.6 billion in 2011, but in 2012 there appears to be a miraculous reduction. The statisticians evidently felt that they could not forecast the figure to the last decimal place so they moved the whole figure one place to the right. If you look down the column there suddenly appears to be an enormous reduction. Clearly they could not forecast it, but it is 10:1 that they would have got the last decimal point right if they tried. I hope that we can improve the statistics and that the Minister will bear that in mind.
In his speech, the Chancellor of the Exchequer made two important points. First, he said:
“We act on behalf of everyone who knows that Britain has got to live within its means”,
but he did not go on to say, “but we are still not doing so”. We are nowhere near doing so. This is a matter of grave concern. He went on to say:
“we have always understood that the greatest unfairness was loading debts onto our children”,
from one generation to another. We are making a massive intergenerational change, and we are not dealing with it as much as we should.
As for the overall figures, there is a problem with cutting. The reality is that the previous Labour Government under Gordon Brown raised a series of benefits and other concessions which people now expect. However, he did not have the money to pay for them and neither do we. It is immensely difficult to try to claw back the benefits and increases in public expenditure that he introduced.
We are faced with cuts of £11.5 billion but are told that there is an increase in spending of, I think, £10.5 billion on the high-speed rail scheme, so we are only about £1 billion better off. I may have misunderstood the figures but that is my understanding of the position. Therefore, we are making very little progress. There is clearly a distinction between expenditure on investment and cuts, but we are not doing as much as we should in this regard.
In addition, extra one-off items are included in the cuts to the Post Office pension fund. We have the assets but do not make explicit allowance for the liabilities, so there again we have a problem. The same is true of the arrangements for transferring balances from the Bank of England with regard to quantitative easing. Neither of those provisions is likely to be repeated, at least not on the same scale. We have also gained £5 billion in efficiency savings, much of which relates to public sector pay. I certainly welcome the provisions in the Statement on not awarding progressive pay increases simply on the basis of the length of someone’s employment.
I am also concerned about debt interest. The Chancellor laid great stress on the fact that we are paying £6 billion a year less to finance the debt. That is obviously a great advantage, but it rests on the proposition that interest rates will stay where they are. They might stay where they are for longer than we would like. We have only to look at the American experience to see that trying to unwind quantitative easing produces very emotional reactions in the markets. Therefore, low interest rates might be maintained, perhaps wrongly, for longer than we expect, but sooner or later they will have to go up. As for the public sector finance statistics, what assumption is made about interest rates when calculating the debt interest payments, which fluctuate widely? It would be helpful to know that. As I say, I do not underestimate for one minute how difficult this exercise is, but we need to renew our determination to reduce the deficit by substantially more than we are doing in the review.
Lord Shipley
My Lords, I am grateful to my noble friend Lord Higgins for raising the Open University, which requires me to declare my interest as a pension holder of that institution after some 34 years’ service. I am very glad that Mrs Thatcher had the common sense not to take my noble friend’s advice, because as we all know the Open University has been the most enormous success and a world beater and world leader. It is a tribute to all those involved in setting it up and making such a success of it.
I should declare that I am a vice-president of the Local Government Association. As an adviser on cities and deputy-chair of the regional growth fund advisory panel, I strongly welcome the Government’s direction of travel on local growth. I wish to comment on some strategic issues on public service reform which I hope the Minister will consider.
I start with the Scottish referendum on independence. In last week’s debate on the Select Committee on Economic Affairs report on the economic impact of independence on the United Kingdom, it was explained that while we know the public expenditure level on Scotland, we do not know the amount of tax raised in Scotland; the data are not collected other than on a UK-wide basis. There have been some private estimates, notably by Oxford Economics, as to the tax raised. In the context of all that the Government are now doing on devolution, decentralisation and the single local growth fund, the tax raised for the constituent parts of the UK needs to be known. Part of this is about how you measure success. We will certainly have a single local growth fund between 2015 and 2020 and the Government will have to measure success, and one measure will inevitably be the tax generated from growth. You have to have a base and work has been done with Greater Manchester on its city deal and the earn-back model, which I understand has now been agreed. Hopefully, that will be an exemplar of how tax can be measured.
The spending round has been difficult and we all understand the reasons for that. If there is a headline cut of 10% in local government, for authorities that have social care responsibilities—notably the counties and unitaries—the real reduction is 2.3% because of the extra £2 billion allocated to local authorities. I make the point to the Minister that if you ring-fence the National Health Service and are content with that, you have to ring-fence health more broadly. If you do not prevent ill health through the social care system, you end up with a cost landing on the National Health Service. I am pleased that the £3.8 billion in total in the spending review that has come to the health service and local authorities is extremely helpful. I hope that if the health service continues being ring-fenced, social care will be ring-fenced as well.
I have noted that there will be a council tax freeze for five years; of course, that depends on local authorities deciding to freeze their council tax, which will be up to them. I observe, however, that when central government permits a freeze of council tax, certainly over a period as long as five years, it makes local government more dependent in the long term on central government. I am not sure, given the Government’s direction of travel towards raising more tax locally and people being more responsible for their spending decisions locally, that there should be such central control of the allocation of money.
I believe strongly in localisation. I also believe strongly, for the avoidance of doubt, in the equalisation of funding on the basis of need. It is difficult to do either properly without knowing more about the tax base of an area to which power is being devolved. In England it is difficult to localise without knowing the current level of public spending in each area, either of local government—a council—or of a local enterprise partnership. Data are not being collected on that basis. They are collected on a regional basis, but they will have to be collected on a different basis to make devolutionary centralisation meaningful.
Data on tax income by local government area are simply not available at all. I hope that as part of public service transformation, the Minister will take on board the need to improve the tax income and public spending data which the Government produce. This is caused not least by the fact that community budgets—the tri-borough pilots in London, Essex, Greater Manchester and Cheshire West—have shown significant signs of savings being generated if public services can be planned together. The numbers are actually very large indeed. I am much encouraged by that. However, while this is partly about integrating health and social care it is also about integrating the work of the Department for Work and Pensions with the work of local authorities and local enterprise partnerships.
As a crucial step, I ask the Minister to look into the concept of total place accounting, which is not the same thing as total place spending. However, at the moment, departments, local authorities and those spending public money in a given locality are not accounting for their expenditure on a local basis. It is going to be important for all service providers in a local area to account formally for what is spent by them in that area and then to produce accounts that demonstrate that. It is two years before we get into the single local growth fund, but improving the data is starting to matter.
That takes me to the concept of the local treasury, because community budgeting is about all the funds available in an area for public investment to be jointly spent as a community budget. For a local treasury to succeed, we need to know what tax is raised and what public money is spent in an area, and then consider the gap so that a needs-based funding system can be applied.
According to the Local Government Association, which revised its figures yesterday on the basis of the spending review announcement, the position for 2015-16 is that some 56 councils in England will have only 86% of the money they need to meet existing commitments in 2015-16. One of the consequences will be a lowering of investment in prevention. You will see that happen despite the extra money going into social care. As I have said, if you do not prevent, you end up with a higher cost later. I have therefore concluded that community budgeting is the answer. There are other possibilities, and I fully understand why the Government do not go down the route of unitary councils in all parts of England. It is nevertheless my view that there are significant savings to be made by local government in the creation of unitary councils. I come from the north-east of England where we have only unitary councils. Some of the savings are demonstrable. The issue is, however, complicated, and such a move needs to be done with the will of those participating. Nevertheless, some of the financial problems that have been caused in some local authorities will mean that we need to do that.
I ask the Minister to read a report called Rewiring Public Services, launched yesterday at the Local Government Association conference. It is a hugely important read that extends the debate about how matters could be progressed. Here is a fact that is telling. By 2018-19, on current projections, council tax and business rates will total more than local government spending on services, excluding schools. We are close to making the central government grant obsolete and we could plan now to move away from local taxes being controlled in Whitehall towards financial independence of the sector, which itself is responsible for redistribution to meet needs. That whole issue could benefit from further work. I mentioned the local treasury concept, which would have at its disposal all the various pots of money and make the local spending decisions. A local treasury could have the power to create specific local taxes.
Finally, my noble friend Lady Kramer talked about housing. It is right to increase the housing borrowing cap for local authorities. The average debt on a council house is £17,000. There is significant headroom. We could build many more social homes by permitting local authorities to borrow more. Since April last year, the housing revenue account has been a trading account and we are the only EU country that treats borrowing in the housing revenue account as public borrowing. That need not be the case and we could build 20,000 or 30,000 houses, maybe more, if that borrowing cap were to be increased. I hope that the Minister will think further about that.
Lord Flight
My Lords, I hope it will be the privilege of all of us to live long enough to see the judgment of economic historians on the times in which we are living. The Chancellor is following blatant neo-Keynesian policies, with an ongoing deficit of £120 billion-plus per annum and printing some £370 billion of money. If I wanted a definition of neo-Keynesian, that would be it. No wonder the Opposition is flummoxed, because to recommend even larger Keynesian policies on top of that is patently unrealistic. Will that approach be vindicated or will the Hayekian school be right that the problem with such policies is that they make returning to normality in due course even worse than it would be if you took hold of the situation much sooner?
In the 1930s when Chamberlain as Chancellor took Hayekian measures and slashed public sector pay, spending and taxation, and unleashed a housing boom because there were no planning restraints, we had growth of 4% a year from 1935 to the start of the Second World War. It was the highest period of growth in the 20th century. Today, although growth and recovery have been disappointing, there are positives and we have heard quite a few of them this afternoon. Thankfully, we are not in the euro. The economy is doing markedly better. Indeed, there was 0.6% growth in the latest quarter. I would expect growth of at least 1.5% this year against falls in the eurozone of 0.6%. Certainly there is no double dip. Foreign investment in the UK is up substantially. As I think the noble Baroness, Lady Kramer, pointed out, there is really good news on the apprenticeship scheme. Exports are rising. In my little territory, EIS venture capital investment has doubled in the past year, as has equity money for new small businesses, and as well as congratulating the noble Lord, Lord Risby, for what he is doing in Algeria, a little bird told me that Algeria was going to apply to join the Commonwealth, so the noble Lord seems to have done extremely well.
There are some useful micro-points as well, which I certainly approve of. The ending of automatic progression in the public sector should at least reduce average nominal pay in the state sector, which keeps rising in a blatant breach of supposed pay freezes. Tougher eligibility rules for jobseeker’s allowance are necessary. Having to learn English makes good sense. Ending winter fuel payments in hot countries is surely a no-brainer. The welfare cap on housing benefit, tax credits, disability benefits and pensioner benefits, and bringing it all together to assess people’s needs, is sensible. Limiting to £2 million the funds to be made available annually for investment by local enterprise partnerships, as suggested by the noble Lord, Lord Heseltine, is a fairly sensible economy. I am particularly keen on the extra 180 free schools and the extra technical colleges. The technical colleges go hand in hand with the apprenticeships and are going to make a big difference to this economy and to the people who attend them.
There is a lot of good going on behind the question of how to judge the macro-stance. Even on the macro-stance it is amazing to have achieved a near political consensus on the need to reduce welfare spending, which is really what the situation amounts to. The state is slimming down modestly. Between 2010 and 2017 it is, I think, a 2.7% reduction in real terms. No one has achieved that in living memory. There is a modest shift from current to capital expenditure, and I am sure that the noble Lord, Lord Deighton, will make the very most of that in the rational management of the infrastructure scenario, which of course is still crucial. However, what about the future? Debt is piling up—it will be 80% of GDP by the end of the year—interest bills are rising, and as QE has to come to an end they are likely to rise dramatically further. We are stuck with a deficit compounding of £120 billion per annum.
In the announcement, there was little net new. Cash spending continues to rise; it will be £720 billion this year, £730 billion next year and £745 billion in 2015-16. Most of the figures have already been announced. There are major changes within spending divisions, but not in the aggregates. For the poor spending divisions affected, out of public spending of £720 billion only £204 billion was really up for cuts. Six of them had cuts of at least 10% of their expenditure. It has become obvious that to have a health budget of £127 billion, a education budget of £97 billion, and a welfare budget of £220 billion in effect not up for cuts is a mistake. I am afraid that the NHS has not been vindicated by all that has come to light.
There are two quite separate points. First, will running a deficit of this size prove the right thing to do economically? For me, the great disappointment is the missed opportunity for sorting out the public sector and shrinking the size of the state. Over 10 years ago, I spent nearly two years of my life organising the James review. A team of consultants looked at each area of the public sector, and the level of potential waste and cuts was then approximately £100 billion. That does not seem to have changed that much. The issue is the will to sort it out and to get the state right out of areas where it should not be involved. Those are the key areas that matter. The cost of health and welfare together is nearly £360 billion, which is more than half of total public expenditure. I think even Prime Minister Attlee would have been shocked if it had been more than half of public expenditure in his time.
The leakage is not allowed for. The noble Baroness, Lady Noakes, referred to the growing public sector cash deficit on public sector pensions. I have banged on about it before, but the real figure is likely to be about £25 billion per annum, and there is no provision for it. There was a quiet study of the student loan book, which is worth £83 billion in total. Some 40% will have to be written off, which is another £30 billion, and there is no provision for that. Is there any review of the whole area as to why that is the outturn? I am afraid not.
Astonishingly, welfare, health and education together account for £516 billion of £720 billion, which is why only £200 billion-odd is eligible for cuts. The harsh truth is that much of the public sector remains bloated and poorly managed and has falling productivity. Many noble Lords may have seen the latest Taxpayers’ Alliance report, which pointed to £120 billion of waste, much of it gravy-train expenditure. It is a drag on the 50% private sector. In fact, it is a huge tribute to the private sector that it managed to create 1.3 million jobs when its opportunity is thus limited.
One thing remains. It is always the case that public sector pay layer by layer should be about 15% below private sector pay, allowing for shorter hours, lower productivity, better pensions and better security of employment, but it remains about 15% above private sector pay layer by layer. There is a gap of 30% in aggregate, which is the result of the strength of public sector unions under the previous Government. In the area of health, we have the highest paid doctors, the worst provision of health, some £20 billion of claims for negligence and the legal costs going with them. It is a great pity that there has not been anything like an adequate resolve to get to grips and sort out the public sector.
I shall end by commenting on the elephant in the room, which is QE. It was very clear that money printing was needed in 2008-09 because the money stock was contracting dramatically and the money supply with it, partly the result of the wrong government policies, because just when we needed to support the money supply, moves against banks led to it contracting. However, this has been allowed to go on and on. Inflation has remained higher than planned. When interest rates return to real levels, they will increase government interest costs substantially and probably hit the housing market seriously.
The reality is that there is no way in which the Bank of England will suddenly be able to sell off £370 billion of gilts into a falling gilt market with rising interest rates. We will have the extra money stock there, and all that it will need is higher velocity of circulation to produce a massive increase in the money supply. One can see what is likely to happen: as and when the economy recovers sufficiently there will be strong pressure for wages to be increased. People have had real-wage cuts for quite a long time. I am afraid that the overall money stock will be there to finance that uncontrollably. No one knows when, but there is clearly a substantial risk of a period of high inflation at some stage in the next 10 years. The idea that new Governor Carney could pursue a more expansionary monetary QE is simply unrealistic. He will need all his wisdom and experience to steer the British economy out of QE over the next couple of years.
In conclusion, if there is no collapse in Japan, which is always possible, or a banking crisis and collapse in China or a break-up of the euro over the next two years, the dear old British economy will look a lot better by the time of the election, even though we have not tackled such major issues. The Government could quite easily win the next general election on the back of that, but what then?
Lord Northbrook
My Lords, after that global tour de force from my noble friend Lord Flight I am going to focus, rather more boringly, on the details of the 2013 spending review. Like my noble friend Lord Higgins, I do not underestimate the difficulties that the Government face in cutting the huge debt mountain that they inherited.
As part of the programme to cut the Budget deficit, the departmental cuts have been difficult but necessary. The deficit has now been cut by a third since the coalition came to power, which I also welcome, but with caveats I will come to later. As other noble friends have said, recent economic figures have been more encouraging, as has been the increase in the numbers employed in the private sector.
Current spending will reduce by £11.5 billion in 2015-16, allowing the coalition to increase capital spending plans by £3 billion a year from 2015-16 and by £18 billion over the next Parliament. The Conservative research department has estimated that the Government will invest,
“over £300 billion guaranteed to the end of this decade”.
I welcome my noble friend Lord Deighton’s expertise in this area, although having been to a recent seminar at the Royal Society the conclusion was, slightly depressingly, that all parties have to agree to this, like Crossrail, so that it is actually implemented. I will, however, argue later in my speech that further significant progress needs to be made in cutting annual managed expenditure so that total expenditure can fall.
The spending review ensures fairness for hard-working people by keeping council tax down for the next two years. This will mean nearly £100 off the average council tax bill over that period. NHS spending is being maintained. Efficiency savings are being reinvested in the front line. Part of the health and social care budgets will be merged, spending £3 billion on joined-up care. The tough new welfare cap, which applies from April 2015, is welcome. The new conditions that are being imposed on jobseekers and the seven-day wait before claiming are useful reforms.
The spending round also prioritises growth. There is a sensible increase in the transport capital budget to 2020, which will encourage road building. The BIS capital budget increase includes big investment in science and apprenticeship funding; and UKTI support for exports, as so clearly described by my noble friend Lord Risby, will be increased. Plans are being set out for the future to support £100 billion of private sector investment in the energy sector.
The IFS has published its usual forensic analysis of the spending review. I will focus first on the departmental spending figures. These show that there is a wide range of outcomes for different departments. There are no cuts overall in 2015-16 for international development, transport and health. Particularly with health, is there not a case for what I understand to be zero-based budgeting before the final figures are agreed?
The other extreme is a near 30% cut in the CLG communities budget. Overall, the IFS estimates that there is an average DEL cut of 2.1% in real terms across departments in 2015-16, on top of an 8.3% average cut between 2011 and 2014. However, capital spending has been increased while current spending has been cut, unlike in the 2010 spending review. Departmental priorities have been the same since 2010. Some departments are set to be cut by more than a third over five years. One issue confuses me, not being an economist. Can the Minister explain, if he agrees, why the IFS claims that public sector net investment is going to be broadly flat in the next four years when so many capital projects have been mentioned?
I now move on to annually managed expenditure, although I query the word “managed”. According to the IFS, this will increase by no less than 18% from 2013-14 to 2017-18. On the positive front, I welcome some major attempts to control this. The social rent uprating policy will save £1 billion by 2017-18. The seven-day waiting period for unemployment claims will save £765 million by the same date. I also welcome limits to public sector pay increases. Capping social security is a positive idea, but why do we have to wait until after the election to put these measures in place? If welfare spending has been allowed to rise undesirably, forcing an active decision could lead to better policy-making. Surely it is better to review all spending frequently, regardless of whether it is higher or lower than forecast, or at least to cap individual components. In addition, which areas exactly are being capped?
On the negative side, as my noble friends Lady Noakes and Lord Flight have already mentioned, public sector pensions will continue to be a huge burden on the state. They mentioned the figures. In a recent CPS publication in 2011, Michael Johnson stated that the shortfall between contributions and payments for public sector pensions was £8 billion. This figure, as my noble friend Lady Noakes mentioned, was fairly insignificant in 2005—about £200 million—but will rocket to £15.4 billion in 2016-17. Even that £15.4 billion figure is net, with the amount being paid by the employer—the state—deducted. The true figure, according to Michael Johnson, will have increased by £17.2 billion to £32.6 billion by 2016-17. My noble friend Lord Newby, I think, was asked during the passage of the Public Sector Pensions Bill what the government figure for this was and said he would look into it. As I understand it, we have not had any reply to that and I wonder whether we could have one from the Minister either today or in writing.
Mr Johnson believes that OBR figures do not take account of the DWP’s White Paper on the single-tier pension last January. This will add another £9 billion, due to some very technical but highly credible unforeseen changes in connection with NIC rebate circularity, single-tier pension transition costs and increased life expectancy. I will not burden the Committee with those details. Mr Johnson calculates the extra costs, within a decade, as being at least £41 billion, an increase of £1,600 a year for every household in the UK. Hence, if you strip out the benefit of transferring the Post Office pensions, where the Government have banked the assets of the scheme but, I understand, not the liabilities, the impact on actual public sector net borrowing position is such that the Chancellor, overall, is mid-way through a two-year suspension of deficit reduction.
The IFS concludes that further cuts are expected beyond 2016. Total spending is approximately frozen in real terms, but annual managed expenditure is increasing. In the absence of further policy action, this implies that there will have to be further departmental cuts. To avoid these would mean tax rises of £25 billion. If tax increases are not made and certain departmental spending continues to be protected—schools, the NHS and overseas development—other departmental spending would have to be cut by almost 15% over two years, which is 8% overall. I do not expect the Minister to give me a response as to which of the options will be taken, but these are daunting figures and choices.
Finally, I echo the comments of my noble friend Lady Noakes that on the supply side we need more tax reform and deregulation, and like my noble friend Lord Higgins, I do not underestimate the difficulties the Government face.
Lord Empey
My Lords, I should like to make a few comments in the gap. Like many people in this country, I am disappointed and to a certain degree angry that the United Kingdom finds itself in its current economic powerlessness around the world. This has major implications for our foreign policy, our defence policy, and for a number of other matters. While a number of noble Lords have pointed at former Prime Minister Gordon Brown and others, this situation has been developing over a substantial period of time. It did not happen overnight. I think that the rock we perished on really goes back to the 1960s and 1970s when we turned our back on manufacturing, thinking it was old hat. It was about dirty, smelly factories, and the new way to do things was in the service sector, with finance and so on. We moved away from a broad-based and balanced economy with a portfolio spread across a range of areas. Indeed, our outward-looking expertise and our contacts throughout the world were not exploited to the extent that they might have been.
I want to make a point about the rhetoric that we are currently using, which other noble Lords have referred to in the debate. We have been talking about “savage cuts” of this, that and the other. The arithmetic disproves that. Spending and borrowing are going up. I did a brief calculation and worked out that as a country we have borrowed around another £80 million since the debate this afternoon began. Anyone who suggests that we are in the throes of brutal cutbacks is simply not being realistic. There are many things that we would like to spend money on and there are many groups in our communities that we would wish to help, but unless we as a nation can make the money to pay for those benefits, clearly they are not possible. Everyone will suffer if we lose that capability.
I have one question in particular for the Minister on pension funds. I asked his colleague, the noble Lord, Lord Freud, about this and received a Written Answer the other day. Pension funds in other parts of the world can buy into our electricity and water sectors, transport, airports, all sorts of things. Why are our own pension funds not doing the same thing? The answer is that there are too many of them and they are too small, so they do not have the capability to do so. An example of this is the Ontario public sector workers’ fund. It has 400,000 members and a huge balance sheet. We now describe a large fund as one with over 1,000 members. That is just not competitive. I know that the Government are looking at this, but there needs to be a radical step change so that the pension funds in this country have enough firepower to make the purchases that will bring revenue into this country instead of being broken up into tiny funds that are of no significance whatever.
I want also to ask about our exchange rates, a subject on which I tabled an Oral Question last week. I know that the lowering of exchange rates can have inflationary implications, but we are not playing on a level field. Other countries are flagrantly manipulating their exchange rates. China has been doing it for years, and Japan is doing it at the moment. Its exchange rate with the dollar has dropped by 15% since the new Prime Minister was elected a few months ago. There is no point in playing by the Queensberry rules while someone is taking the very bread out of your mouth, and that is what is happening. Will the Minister tell us, if he can, whether the Government are looking closely at the issue?
My final point is this. If we are trying to stimulate the economy and achieve some of our objectives in an atmosphere of reduced spending, will the Minister consider how VAT is applied to things such as the retrofitting of buildings? Such activity achieves the Government’s energy objectives by suppressing demand while at the same time increasing employment. We have to be more imaginative in how we use fiscal measures to achieve our objectives and generate further employment.
Lord Haskins
My Lords, I did not intend to participate but could not resist doing so when the noble Lord, Lord Higgins, mentioned the Open University, which has always been very well represented in the House. I happen to chair the Council of the Open University and I was gratified to listen to his story. It is one that I have told many times to people, who listen with increasing disbelief that it could ever have happened. Not only did Mrs Thatcher do as the noble Lord, Lord Higgins, has suggested, she actually broke a manifesto commitment to shut the place. We are eternally grateful to her for that.
I am speaking today because I chair a local enterprise partnership, I sit on the Efficiency and Reform Board in the Cabinet Office, which is an experience in itself, and along with many other noble Lords I recently served on the Select Committee on Small and Medium Sized Enterprises. I was in Whitehall this afternoon talking about the situation with regard to LEPs, and it is clear that there is not very much money. I do not think that that should come as a great surprise to anyone, but some of my colleagues in the LEPs were getting a bit hot under the collar about it. However, anyone who thinks about it will realise that we are not in a situation where money is going to be dished out in a big way, and nor should we be, so we must concentrate on those things that do not relate to money but which can profoundly improve the economic situation.
As a representative of the Humber LEP, I talk to many would-be investors in renewable energy in the North Sea. It is hoped that some very big external investments will be coming in. Of course money comes into it, but there are some real issues that we have to deal with. The environment for people investing in this country is, broadly speaking, positive when compared to investing in, say, France or even in Germany. The broad impression is that this is a good place in which to do business and we must support that.
However, two or three points come up all the time. One that applies right across the country is the skills issue. I do not think it is so much about spending more money but about using the money that is presently available more effectively and efficiently. Last week I was talking to the head of a college in Leeds who pointed out that the college has to manage 39 different funding streams. That is just crazy. The college spends more time trying to understand where the money comes from than spending it. Successive Governments have looked at this but they have always baulked at tackling it. The reason they do not tackle it is twofold. First, Ministers come in with their own pet schemes that they put into the system and no one can cancel and, secondly, the Civil Service—the Whitehall engine—does not like to have its arrangements upset. These 39 schemes really should be whittled down to nine or 10.
The second issue is that of our major projects, which the Cabinet Office Efficiency and Reform Board has been looking at for the past few years. It is scary how badly these projects have been mishandled over the years—going back 20, 30 and even 40 years. We have to get a grip on that and make sure that we do not do it again. Once again it comes from the Whitehall silo mentality where one department finds it difficult to talk to another department. I contrast that with what I see when I go to Scotland to look at how they are doing things there. Whitehall could learn a lot from Scotland. In Scotland, Northern Ireland and Wales, the Ministers and officials know each other and communicate with each other.
I will give noble Lords an example. The noble Lord, Lord Heseltine, is taking a great interest in what we are doing in the Humber. We are looking at regulation. Regulation is another issue which constantly comes up, not because there is too much of it—that is not the issue—but because of the way in which existing regulation is mismanaged. I have a big investor at the moment who is having to go through one regulator and then start again with another, very often duplicating what the first one had done. We are setting up a pilot group to get all the state regulatory agencies together so that when a major project comes along, we all sit down around a table, agree what the issues are and apportion the regulatory problems. That does not sound very exciting, but it makes a huge difference to the attitude of investors.
Finally, looking at the local authorities, the test is whether you have the political leadership to carry all this out. It varies enormously across the country and we could do a lot more. Have we got the quality of officers in the local government offices? Finally, have we got the local business leadership we need to bring all that together, as in the 19th century with the Joe Chamberlains? I am afraid that a lot of the corporations have fled to London. You are not dealing with big companies with a lot of clout in the regions, but we will do our best.
Lord Davies of Oldham
My Lords, this has been a fascinating and somewhat lopsided debate. It is my task to at least try to achieve some balance in the arguments before the country at present. I have only just got my breath back from the Minister’s very first statement, in which he said that this economy has been well managed by the Chancellor from the beginning. So why is the Chancellor back with a second comprehensive spending review Statement? Why is he back with a second round of cuts? I accept that, as the noble Baroness, Lady Noakes, indicated, the economy may not be in a double-dip recession, but why is he here in circumstances where it is absolutely clear that there has been no growth in this economy for the past three years?
There is nothing in the Chancellor’s proposals, which the Minister has been defending with his usual elan today, that suggests growth for the future. The noble Lord of course has particular expertise on infrastructure. We all appreciate that and welcome his appointment to give the Government a boost in that respect. However, let us recognise that there has been no expenditure on infrastructure since 2010. In fact, all those issues which were planned at that time, which I think the Minister referred to as the 2010 pipeline, have been effectively blocked. There is virtually no progress on any of the 2010 schemes. Now, of course, infrastructure spending is being suggested—in the distant future. The things being boasted about are HS2 and north-south Crossrail. Both projects are 10 to 15 years away from significant expenditure; perhaps it is a little earlier with HS2, but certainly not prior to the next general election. If it is being suggested that there will be a boost to the economy through infrastructure spending over the next couple of years, everyone needs to be disabused of this idea. That is not going to happen.
I accept a number of points that were made in the debate. I appreciated the point of the noble Baroness, Lady Kramer, about the decline of manufacturing industry. On whose watch was that? Which Chancellor said that we were going to rely on the service-industry economy? That was the noble Lord, Lord Lawson, in the 1980s. Who turned their backs on the manufacturing industry in the 1980s, when we saw a massive collapse in manufacturing jobs? It was the party of Margaret Thatcher. I will give way to the noble Baroness, of course.
Baroness Noakes
Can the noble Lord remind the Committee what happened to manufacturing industry on Labour’s watch?
Lord Davies of Oldham
The very tragedy, in my view, of Labour’s watch was that it actually continued too many of the positions adopted by the Conservative Party in the 1980s. As regards manufacturing—the noble Lord, Lord Haskins, also made an important point on that—we should have put much greater emphasis upon the development of skills in our society. We have not equipped any of the next generation for the kind of economy that we seek to sustain.
I understand what the noble Lord, Lord Risby, indicated in terms of the enormous value of foreign investment. Of course we would all welcome that but does he think that foreign investors are enthusiastic about the great uncertainty over Britain’s relationship with Europe? That is the product of discord in the governing coalition. How welcome is that for potential investors? The noble Baroness, Lady Noakes, indicated the areas in which she welcomed what was happening but even she will recognise that the IMF has said that some £10 billion ought to be invested in infrastructure in “shovel-ready” industries, particularly construction. It ought to be put into housebuilding because that is the fastest way in which you could inculcate some element of demand into the economy. However, are the Government pursuing that strategy? If the noble Lord, Lord Deighton, were able to identify schemes that could fulfil that aim, I would be surprised. I give way to the noble Lord.
Lord Risby
I am most grateful but a little confused by what the noble Lord is saying. We have just had a record increase, the highest ever, in foreign direct investment in this country, way ahead of anywhere else and the highest in Europe. The point that I was making is that that trend is increasing, so I am afraid that his argument is not sustained by the reality.
Lord Davies of Oldham
My Lords, I was making a point that the noble Lord ought surely to take into account. Far from there being an environment in which foreign investors will necessarily find a place to invest in the future, as long as we are extremely uncertain about our relationship with the biggest market that we service, Europe, it is bound to cause anxieties among investors.
I also noted what the noble Lord, Lord Higgins, said—he is also my noble friend when we are on the golf course. He was very concerned to address some real points to the Minister with regard to the future of interest rates and the assumption made about future public expenditure. The Minister must address that point in his reply.
I appreciated the point that the noble Lord, Lord Shipley, made about local authority finance and being able to identify local resources. One product of the debate on Scottish independence and the referendum will be to identify those issues as far as Scotland is concerned. That is bound to give a stimulus to the broad argument that the noble Lord is putting forward about the resources available to the various localities of the United Kingdom and the needs that may be identified. I would have thought that that is bound to take a significant step forward as a result of the debate on next year’s Scottish referendum.
The noble Lord, Lord Flight, entertained us all with the Hayek versus Keynes debate. Although the noble Lord said that growth before the Second World War was considerable, he may have noticed that full employment in this country did not return until we went into wartime defence production. It is quite clear that under the Hayek principles you can certainly run an economy with a considerable level of unemployment. However, that word has not been manifest in this debate at all because the fact that we have significant levels of unemployment is a limited consideration for all those on the Conservative Benches concerned with how to manage the economy. We have people coming out of our colleges and universities who are highly qualified by any standards and who, in the past, would have expected to find a choice of jobs. They are facing a situation where the market is such that there are no jobs available. That is why I was grateful that the noble Lord, Lord Flight, identified the thinking behind the Conservative position and, to a more limited extent, the Liberal Democrat position with regard to what the Government are doing at present.
It took the right reverend Prelate to introduce morality into this debate. Why is it that the only person who is prepared to talk about those people who suffer the real costs of what is being carried out in the name of austerity is the right reverend Prelate? He identified the shock we all felt in the Chamber yesterday when it was suggested by a Conservative Minister that food banks are supply-driven and nothing to do with people’s needs. People’s needs have occasioned the development of food banks, which are necessary, but our great shame. Nor is there any understanding on the Conservative side about what it is to lose one’s job at present. It is quite okay to say, “We will cut public expenditure by making sure that there is a week in which one cannot claim jobseeker’s allowance”, but what do noble Lords think the morale of a family will be when someone loses his job against a background where the chances of getting a fresh job are very limited indeed? Why is it that, within that framework, it is thought that a really effective cut is to make sure that an application for support cannot be made until a week has elapsed?
Baroness Kramer
Can the noble Lord, Lord Davies, confirm that, during the years of the Labour Government, job centres were prohibited from referring any client to a food bank?
Lord Davies of Oldham
I am not well enough equipped to answer that question, nor am I quite sure of the point of the question.
Baroness Kramer
I shall try to be helpful. Like many people, I take the view that we live in a country where food banks should not be necessary, but unfortunately they have been necessary for a long time because the same issues of delays over benefits and various kinds of crises have affected those at the bottom. As I understand it, during the Labour years, job centres were not permitted to refer clients to food banks. As noble Lords know, you can go to a food bank only with a reference from an appropriate person: a job centre, a doctor or a limited number of other people. You cannot just turn up and make a claim. Today, job centres offer vouchers where they think there is need, but that need is not very different from the need that existed before. Food banks were just not announced.
Lord Davies of Oldham
Food banks are developing in almost every constituency in Britain because the so-called supply-driven factor has been occasioned by the demand of real necessity at present. It is a vastly different situation from that which obtained a decade or even five years ago.
I would ask the Minister to take on board the very important points that have been made by his noble friends today in supporting the coalition. Will he also, at some point in his remarks, address the question of morality? Why is it, for example, that his supporters are concerned to promote a bedroom tax that ensures that there is a desperate issue for impoverished people as to whether they will be forced to move but that when a mansion tax is proposed by the Liberal Party, there are all sorts of anxieties that people who are reasonably well off might be obliged to move and about what an affront to fairness that would represent? The mansion tax would be aimed at properties of very considerable value and at people who know they well might come under attack rather than the very large numbers of people who, under the bedroom tax, are being forced to move from their homes, the schools which their children attend and even the localities in which they have lived for very many years. I hope the Minister will address some of those points.
Lord Deighton
My Lords, first, I thank all noble Lords for their insights, ideas and challenge. It has been a most fascinating exchange and I congratulate the noble Lord, Lord Davies, on holding up the Opposition’s end there. I will address his question about morality straightaway. To me, this is a very simple issue: unless we are able to create a state that can actually afford to sustain itself, those who are most vulnerable will be the most exposed victims of the fall-out from that kind of financial crash. We have to get our ability to afford a welfare state in the right state so that we can sustain it. That is the way that we protect the vulnerable in the long run.
The Chancellor was back with another spending round because we had not defined the spending plans for 2015-16. We took the opportunity to lay out the investment programme through to 2021 because, as I explained in my earlier remarks, we think that it is the right way to provide an environment in which people can plan investment correctly. On the general question of whether anything is really being done about growth for the future, the point is precisely to begin to deliver a programme from which future Governments will benefit. They can quibble over who was responsible for the earlier decisions. These kinds of investments have very long lead times and our planning is trying to break the link between the political and economic cycles. There was some misunderstanding there, in that I do not think anybody was trying to claim more; we were just trying to claim that there is a long-term plan. Public sector gross investment in this decade, 2010 through to 2020, is slightly higher on average than in the previous decade, if you smooth out the peaks and the troughs and take the average.
In terms of delivery today, the noble Lord, Lord Davies, is correct that projects from 2021 and onwards, or in five years’ time, have an impact later. However, the projects we are undertaking now are having an impact. Crossrail is being delivered now—the money in the spending round is for the feasibility study for Crossrail 2. Crossrail will be open in 2018-19 and we are spending something like £15 billion on it. It is the biggest urban infrastructure project in Europe and is going on now, right under our feet. That a very good example of delivery. Similarly, we have upgraded 150 stations, completed more than 30 road projects, opened more than 80 new free schools, delivered more than 84,000 affordable homes and done an enormous amount in rolling out 4G mobile services. There is a significant amount of delivery going on now and we are trying to plan for future delivery. We are trying to accelerate it and make it better value all the way through. I accept the point of my noble friend Lady Noakes that it is not necessarily a good thing just because it is an infrastructure project. We have to evaluate them all, which is what we did in the plan through to 2020. We re-evaluated them all on a zero-budget basis and approved the ones that we thought were most powerful.
My noble friends Lady Kramer and Lord Northbrook both asked about the welfare cap. It will apply to welfare, of course, but does not apply to state pensions. As my noble friend Lady Kramer implied, it will work off the OBR forecast. If the spending is forecast to breach the cap, the Government will have to explain what action has been taken. We will put a buffer in place to ensure that any policy actions are not triggered by small changes. That is how that one works. For the information of the noble Lord, Lord Northbrook, the areas being capped are all in social security: housing benefit, disability benefits, pensioner benefits and tax credits.
The noble Baroness, Lady Kramer, also asked whether we would be focusing on the quick wins in infrastructure and leaving the longer-term strategic projects because they have a longer lead time. It is the portfolio that works; I addressed this earlier. Lots of delivery is going on at the moment and we are trying to put a consistent long-term plan in place. We will, of course, look at local funding of infrastructure projects, of which TIF is one example. Another example is the single local growth fund. The European funds we are allocated will be put into the single pot and be part of that as we devolve responsibility.
I was delighted that the discussion got around to our international competitiveness—I thank the noble Lord, Lord Risby, for giving us the detailed example of what is going on with Algeria. I have spent a lot of my own time dealing with inward investment. This country has a tremendous advantage. Overseas investors really want to invest here. They trust us. They believe in our rule of law. There are many things they like about the opportunities we create here. We are working very hard to exploit this to the country’s fullest advantage. On export promotion we are continuing to fund UKTI. It is in the process of transforming our approach to trade and its support to a very focused business approach.
We had a very powerful discussion about our fiscal position and whether we are moving quickly enough to address what I accept are still very high levels of borrowing. It is absolutely critical that people understand that the deficit each year is extra borrowing—it is adding to the stock of borrowing. I do not think that that is generally perceived or understood more widely. The implications of understanding that properly should focus attention on addressing the deficit as fast as possible.
In defence of the pace at which the Government are addressing the deficit, we are still focused on reaching a balance by 2017-18. We are on that path. There is a plan in place. I am very open to challenges about the paradigm shift, as my noble friend Lady Noakes suggested, that we could be more radical in some of the ways we deliver public services and in some of the ways we have structured the Civil Service. That is a challenge we should set for the next tranche of cost improvement. Without that it becomes very difficult to continue—again, in my noble friend’s words—to “salami-slice”.
My noble friend Lord Shipley asked about whole-place budgets. Community budget pilots have demonstrated that it is possible to do much more by joining up local authorities; I do not think there is any question about that. That is why we talked about the £3.8 billion social care budget that we have set aside. We have also set up a £200 million pot to accelerate joint working among local authorities. Whether we can release the borrowing cap on HRAs is another matter. If we were to do that it would add another £7 billion to public sector borrowing every year. Most of the schemes which creatively try to allow more borrowing at the local level are captured and increase public sector borrowing. That is always the constraint that we are trying to manage.
My noble friend Lord Northbrook asked for a response on public pension cuts. My noble friend Lord Newby and I will certainly get back to him on that.
The noble Lord, Lord Empey, asked why UK pension funds are not investing in UK infrastructure. He is correct to say that that industry is highly fragmented compared to its counterparts overseas. That is why we have worked with the industry to consolidate funds into a pension infrastructure platform of £1 billion. Ten funds have come together so that they can gain economies of scale, develop the expertise to assess those credits and provide us with the scale to begin to get them into that business in the same way that, for example, the Canadians have so effectively prosecuted over the past few years.
I could not agree more with the noble Lord, Lord Haskins, that we need to rationalise the number of funding streams going into skills training. That is why we have set up the single local growth fund so that we can begin to provide that kind of rationalisation.
The noble Lord, Lord Empey, asked about VAT and how it is applied to building. I will get back to him in writing on that.
I thank noble Lords for a very stimulating debate.
Lord Higgins
What is the assumption on interest rates in calculating debt interest payments?
Lord Deighton
I thank my noble friend Lord Higgins for reminding me of that question; I was intending to deal with it directly. There is a ready reckoner in the OBR. Our debt is fixed-rate, so the effect of interest rates going up increases over time as debt matures and as we borrow more. For example, if we had a 1% increase in gilts rates, by 2015-16 that would be costing us just over £4 billion more per annum in debt service costs. That gives a sense of the sensitivity. By 2017-18, it would more or less double to just over £8 billion.
Lord Deighton
That is the impact, but those are not the assumptions. We must consider the impacts, so the assumption is on a stable basis, but that is the sensitivity to change. That is how we measure it.
EU: Justice and Home Affairs
(11 years, 4 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Taylor of Holbeach
To move that the Grand Committee takes note of the report to Parliament on the application of Protocols 19 and 21 to the Treaty on European Union and the Treaty on the Functioning of the European Union in relation to EU justice and home affairs matters (Cm 8541).
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach)
My Lords, the previous Administration made a commitment to table a report each year on the operation of the JHA opt-in protocol. The Government agreed to maintain that pledge and have ensured that such reports cover not only decisions taken under the JHA opt-in but also those taken under the Schengen opt-out protocol. The Government have since published three such reports. The most recent of these, which is the subject of this debate, was published on 25 April this year. It covers opt-in decisions taken between 1 December 2011 and 30 November 2012.
I apologise that the annual report was later than usual this year. We aim for publication in January, but opt-in decisions included in the annual report fall to a wide range of government departments. The late publication of this year’s report was due to a delay in finalising data from across Whitehall. We regret this delay and will aim to ensure that the next annual report is published promptly.
During the period of the latest annual report, the Government took 35 decisions on UK participation in EU justice and home affairs proposals. Under the JHA opt-in protocol we opted in to 24 proposals and did not opt in to eight. The Government took three decisions under the Schengen protocol, choosing to remain bound in each case.
As the Committee will be aware, the Government have stated that we will take opt-in decisions on a case-by-case basis. We consider factors such as the impact of the measure on our security, civil liberties, the integrity of our criminal justice and common law systems and on the control of immigration. At the heart of it is a commitment to focus on the national interest. As such, we will only opt in where we believe it is in the UK’s interests to do so. Examples of proposals where we judged UK participation was in the national interest were the EU-US passenger name records agreement and a directive on data protection. Both of these agreements promise to assist law enforcement authorities in combating serious crime, while including all the necessary data protection safeguards.
Conversely, the Government decided not to opt in to a proposed directive on the freezing and confiscation of proceeds of crime. While we were sympathetic with the aims of this proposal, we had concerns that the published text posed risks to the UK’s domestic non-conviction-based confiscation regime, and therefore felt that it was too risky to opt in prior to negotiations, given that we would then be bound by the final text, once adopted. The Government also decided not to participate in the internal security fund regulation due to concerns over value for money. Despite our decisions in these latter cases, I note that the Government have taken an active role in both of these negotiations and will consider participation post-adoption should our negotiating objectives be met.
The Government have been clear that we want Parliament to play an important role. For this reason, we have further strengthened the role of Parliament in scrutinising opt-in decisions. My noble friend Lord Howell of Guildford’s Written Ministerial Statement of 21 January 2011 pledged to give Parliament as much opportunity as possible to comment on and influence future opt-in decisions. Under these new arrangements, we have committed to the setting aside of government time for a debate on opt-in decisions where there is a particularly strong parliamentary interest. The Government must also now report each opt-in decision to Parliament by a Written or, where appropriate, an oral Ministerial Statement. This procedure is now well practised.
The commitments included in that Statement, to give Parliament more of a say in opt-in decisions, are something which the Government take very seriously. I emphasise to the Grand Committee that we are keenly aware of the essential need to make these new arrangements work on a practical level. To this end, noble Lords will be aware that following extensive consultation with interested parties, including our own European Union Committee, the Government have recently finalised an internal code of practice. Through the code we hope to reach and maintain a consistently high standard across government in respect of handling the parliamentary scrutiny aspects of future opt-in decisions.
I do not plan to dwell on more recent opt-in decisions today because they will be covered by the next annual report to be published early next year, and before then in our six-monthly update to the European Union Committee. However, I note that since 30 November 2012, the Government have taken a further 10 decisions under the JHA opt-in protocol, opting in on seven occasions. No decisions were taken under the Schengen protocol during the period.
I hope that this is a good introduction to the background of the report we have presented to Parliament. I commend it to the Grand Committee and I beg to move.
Baroness Corston
My Lords, it is a pleasure to follow the Minister. I welcome this third report on the application of the arrangements concerning the United Kingdom’s participation in European Union legislation in the field of justice and home affairs, the so-called opt-in arrangements. I am pleased that the report fulfils the present Government’s commitment in the interests of transparency and accountability introduced by the noble Baroness, Lady Ashton of Upholland, in the previous Government. As the Minister has acknowledged, it was something of a pity that it was published late, and I am sure that we all accept his apologies. I understand that there were difficulties this year in finalising the annexe, but that is likely to be a recurring problem for which the departments must plan ahead. My committee hopes very much that next year’s report will be published early in 2014.
As a member of and now the chair of the European Union’s Sub-committee on Justice, Institutions and Consumer Protection, I have followed closely the Government’s approach to European Union proposals. The sub-committee has scrutinised a range of proposals in the justice field since the UK’s opt-in arrangements have applied to the area of justice and home affairs, and I think that the Government’s case-by-case approach is the right one. In the civil justice area, like the Government, we have been cautious and particularly mindful of the principle of subsidiarity because of the potential effects of the proposed measures on UK legal systems, particularly on our law of property and the implications for the laws of inheritance in other jurisdictions. For example, we recommended that the UK should not opt in to a proposal which would lay down common rules on the choice of national court and law to apply where a deceased person had property in more than one member state.
We have also been unable to support, at any rate in its current form, the proposal for a common European sales law, despite its laudable objective of improving the operation of the single market. This would introduce an additional, albeit optional, law of contract for consumer transactions. Our concern is that its potential to introduce legal uncertainty and confusion among consumers would outweigh the expected benefits. We have suggested that the Commission would be wise to adopt generally, in the civil justice area, a cautious step-by-step approach.
In the field of criminal justice, the EU has taken that kind of approach, implementing two so-called road maps which set out specific measures agreed by the Council of Ministers. We have recommended that the Government should opt in to all these measures apart from one on the right of access to a lawyer in criminal proceedings. We agree that the right of a suspect or defendant to legal advice is a vital part of the legal process, but we consider that the original proposal did not strike the right balance between the rights of suspects and defendants on the one hand and the ability of law enforcement authorities to investigate and prosecute offences on the other. For the future, we have suggested that before the EU embarks on further measures in the criminal justice field, it first completes the road maps and then leaves time for a proper evaluation of the effects of the legislation. Any exceptions should require particularly strong justification.
Relatively few proposals subject to the opt-in fell within the remit of my sub-committee during the period covered by the report we are discussing. On the whole, the committee agreed with the Government’s approach to the proposals that have come before us. The single exception this year concerns the justice programme, where we differed on whether it offered good value for money.
Finally, I, too, welcome the code of practice for the guidance of government departments on handling proposals which are subject to the opt-in procedure, which should ensure that the scrutiny committees can undertake their work within the strict time limits imposed by the treaties because committees deserve and need the time properly to fulfil that obligation.
Lord Taverne
My Lords, my main concern so far is on the block opt-out. I could never see any real justification for this, and my feelings were strongly confirmed by the report of the House of Lords committee. Therefore, I thought I would look at the way in which the Government have approached the pre-2013 opt-outs and opt-ins and the ones now up for consideration. Like other speakers, I very much welcome the report as the proposals appear to be extremely pragmatic and the relevant cases are judged on their merits.
I wish to cite a few examples on which I have concerns. The proposal at page 14 of the report for a directive on criminal sanctions for insider dealing and market manipulation is welcome in principle. However, the Government very sensibly say that they want to see how it works out and will participate fully in the negotiations to enable the proposal to be better progressed. That seems to me a very sensible, practical proposal, and I am surprised that that attitude was not taken on the European arrest warrant, the merits of which appear to be extremely plain. The obvious way in which to influence these proceedings is to take part in the negotiations and see how they can be improved.
I have questions about the proposals on page 17 of the report regarding the internal security fund. The Government have not reached a final decision on this matter and state in the report:
“We need to be absolutely sure that the value benefits or cost savings we will secure from the Programme outweighs the cost of participation”.
It is obviously desirable that we should participate, so what are the costs involved? Are they really substantial or are they fairly unimportant in this context?
A further regulation,
“establishes a single Justice funding programme which combines three previous programmes”.
That is very sensible, but the Government raise the question of value for money. What sums are involved?
Finally, I have some questions as regards,
“the need to harmonise the offence of money laundering at EU level”,
mentioned on page 33 of the report. Again, it seems to me that it would be extremely sensible for the Government to look at this further.
It seems to me ludicrous not to support the proposal to combine Europol and CEPOL. It is obviously sensible to rationalise in this case, but it depends on our final decisions on Europol and the training college. It seems that the Government’s attitude has changed during the course of the negotiations between the coalition partners whereby a much more pragmatic mood has been created, but it would be absurd if we were not to remain members of Europol. We have the president of Europol and the college here in Britain, which brings in a considerable income. Obviously, the proposals depend on us remaining part of Europol.
I am pleasantly surprised by the pragmatic spirit in which these questions have been proposed. All the matters up for decision in 2013 seem, in principle, to be welcome, and I hope that we will continue to judge them entirely on their merits. I end by saying that I hope that this new mood of pragmatism, a mood that has always been there in particular areas, will prevail and that in the end we will find that we are full, participating partners in co-operation on criminal justice and crime in Europe.
Lord Boswell of Aynho
My Lords, I, too, thank the Minister for a useful report and, in my role as chairman of the European Union Select Committee as a whole, I extend those thanks to all those who are participating in this debate, which is exposing some interesting issues.
Be it far from me to suggest that the issues are easy to grasp at first instance and, to be frank, I would not recommend them to a novice member of my committee who had never been to one of these debates because it is not the easiest territory on which to start. However, we should remember as a committee that this subject reflects the real interests, welfare and, in certain cases, security of our citizens. It is important that we get it right. I am heartened by the way in which the Minister presented his case in terms of looking at the issues and making decisions on their merits. I say, with respect, that that is the way in which our sub-committees have tended to produce their reports, even on occasions when their conclusions have differed from those of the Government—or perhaps have not been confirmed by government until a later stage.
Inevitably because of those comments, my emphasis will be on aspects of the process. I have to offer some praise to the Government and some blame, too—alternatively, as it were. We certainly all welcome the fact that this report is being debated approximately two months after its publication. That is in line with the request made by the committee during the debate on the first annual report in 2011. I am delighted to see the noble Lord, Lord Roper, attending this debate, and he will remember that request. So far, so good but, as the Minister wisely confessed to the Committee, it is regrettable that this, the third annual report, was published nearly four months late, although its two predecessors were bang on time and both came out in January. The importance of timeliness should be emphasised by the Minister in rallying the outlying departments that have to be consulted on these matters. I hope that he can give an assurance that unless some great disaster intervenes, the fourth annual report will be published on time in January next year. There is a related issue to this and it would be helpful if the Minister could clarify how the report’s delayed publication will impact on the scheduled publication of the mid-year update to the report, which should be available by now, or very shortly in early July.
While on the subject of complaint, we also note that two of the opt-in decisions listed in Annexe 1, which is a very helpful annexe, cited incorrect legal bases. These have been subsequently corrected in correspondence with the European Scrutiny Committee in another place. Mistakes happen, of course, but we trust the Government will ensure that such errors are not repeated in the next annual report.
To turn to the positive, we, too, welcome the recent publication of the Government’s code of practice on scrutiny of opt-in and Schengen opt-out decisions. This is for the attention of all government departments to ensure that the views of Parliament are taken into account. I thank our officials in the Select Committee for their input to that process which has been mutually beneficial.
To come to what is, I suppose, the most important legal crux, but, again, not a particularly immediately obvious one, there is a consistent implication from the Government that the UK opt-in will apply to proposals which include justice and home affairs elements, despite not citing a Title 5 legal base, which is the normal legal basis for a justice and home affairs proposal. The Select Committee of this House and the European Union Scrutiny Committee in the other place have had little sympathy for this approach in the past. We suggest that it tends to fall on deaf ears in the Commission and Council. Perhaps the Minister will indicate to this Committee whether the legal base of a new European Union committee has ever been amended as a result of the Government’s approach in this regard and what the current Commission and Council position is on this matter.
Turning to slightly more substantial matters, the report notes that negotiations continue on a number of proposals where although the United Kingdom Government did not opt in during the initial three-month period, it remains their objective to seek to amend the text in a way that will allow the United Kingdom to exercise its right to opt in to the proposal after it has been adopted across the board. This situation applies to the directive on the freezing and confiscation of the proceeds of crime and the directive on the right of access to a lawyer. I think we all have some sympathy with doing this; the question is whether an acceptable outcome can be achieved. I would be grateful if the Minister could provide an update regarding what progress has been made in relation to both these proposals, including the likelihood of post-adoption opt-ins by the Government.
The Minister’s report refers to the proposed Europol regulation as a “forthcoming dossier”. Owing to the delay, the proposal was published very shortly afterwards. We acted fairly quickly in our Sub-Committee F report regarding the measure, which recommended that the United Kingdom should opt in. It was debated and endorsed by this House on 1 July. We note that the Government must reach a decision in response to that by 30 July, which will take the views of both Houses into account. We look forward to receiving notification of that decision, presumably before the other place goes into recess on 18 July. There is not much time for that, but it is important to know where we are.
Then there is what I might call the elephant in the room, which is the United Kingdom’s opt-out decision to be taken on the existing or pre-existing measures in 2014. The report correctly notes that this is a separate issue as it concerns the pre-Lisbon measures, but it is relevant in the context of this debate. All the post-Lisbon measures that the United Kingdom has chosen to participate in are listed in the report. It is worth recording that the average participation by the United Kingdom Government in these post-Lisbon measures varies, but is somewhere between 70% and 80%, so the significant majority are acceptable to the Government on consideration, although in certain cases, including the two I have referred to, it may take time, and it may take more than the three months to reach an acceptable decision. We would feel better late than never, if I may put it like that in shorthand.
Granted that all the post-Lisbon measures involve the jurisdiction of the Court of Justice of the European Union, we wonder about the Government citing concerns about this jurisdiction as one of the reasons for exercising their opt-out in relation to the pre-Lisbon measures that I have mentioned, which they suggest were not drafted with the court’s jurisdiction in mind. In the report that our joint sub-committees have issued on the opt-out report in relation to Protocol 36, this suggestion was considered and rejected. We therefore look forward to a further announcement on the opt-out, which we understand is now imminent.
It would be fair to say, in summary, that although we are not in any sense ideologically in favour of always acceding to justice and home affairs measures, and have aligned ourselves on a number of occasions with the Government in not doing so, we are broadly sympathetic to the approach where we can do so. We hope that the Government will wish to consider the Protocol 36 decisions sympathetically and provide a good portfolio of responses in due course.
Lord Rosser
My Lords, I, too, thank the Minister for introducing this debate and express my thanks to all who have participated with their considerable experience and knowledge—which I do not mind admitting is somewhat greater than mine—and not least my noble friend Lady Corston, who explained the work and views of her committee on certain key issues and referred to the code of practice. From current personal experience, I certainly share the view of the noble Lord, Lord Boswell of Aynho, on the difficulty of getting to grips with the detail of this report.
As the Minister said, this is the third annual report to Parliament on the application of Protocols 19 and 21 on the Schengen opt-out and justice and home affairs opt-in respectively. Once again, the reports arise from the previous Government’s commitment in 2008 to strengthen parliamentary scrutiny of the justice and home affairs opt-in, part of which was an undertaking to provide Parliament with and make available for debate an annual report that both looked ahead to the Government’s approach to EU justice and home affairs policy and forthcoming dossiers, including in relation to the opt-in, and provided a retrospective annual report on the UK’s application of the opt-in protocol. Annexe 1 of the report in front of us sets out all the JHA opt-in decisions and Schengen opt-out decisions taken from December 2011 until the end of November 2012. Annexe 2 outlines legislative proposals which are expected to be brought forward in the current year and will require a decision on UK participation under the justice and home affairs opt-in protocol.
One of the legislative proposals mentioned in Annexe 2 is the proposal for a regulation on the European Union Agency for Law Enforcement Co-operation and Training—Europol—about which, as has already been noted, we had a debate on Monday in the context of the European Union Committee’s report on the UK opt-in to the Europol regulation. At the end of the debate, the House agreed with the committee’s recommendation that the Government should exercise their right to take part in the adoption and application of the proposed regulation. Whether that will have any impact on the Government’s decision remains to be seen, since it is not unknown for internal party considerations to play a part in determining this Government’s approach to any matters European. The Minister told us on Monday that the decision on whether to opt in to the Europol regulation was “finely balanced”. Can he say which of our law enforcement agencies feel that we should not opt in to the regulation?
Annex 2 sets out a number of other proposed measures. Any specific update from the Minister on the situation in respect of some or all of those proposals would be helpful, in particular on whether any decisions have actually been taken. My noble friend Lady Smith of Basildon asked him, in the debate on the Europol regulation on Monday, how many measures were awaiting an opt-in decision by the Government and whether any have been delayed because of the decisions regarding the opt-out, to which reference has already been made.
There is one other issue I would like to raise from what was said on Monday. If memory serves me right, it was the noble Lord, Lord Hannay of Chiswick, who referred to a European surveillance order in which the Government do not have an opt-in or opt-out. They have simply failed to implement a piece of European legislation that they agreed to and which came into force throughout the European Union in December last year. What is the Government’s position on that order, which provides the possibility for someone who is subject to a European arrest warrant to be bailed in their own country?
The Government have sought to argue in this report that decisions taken in relation to the JHA opt-in and Schengen opt-out protocols are separate from the 2014 opt-out decision under Protocol 36 to the European Union treaties. However, that argument does not really hold water. As was pointed out in Monday’s debate, if the measure is a police and criminal justice measure that was adopted before the Lisbon treaty entered into force in 2009, deciding to opt in to that measure or a variation of it, or deciding not to opt in to a variation of it but to seek to influence it from the outside, would be completely nullified if we then decided to opt out of all those measures under Protocol 36. Perhaps the Minister will tell us which of the measures on which decisions were made to opt in between 1 December 2011 and 30 November 2012 as set out in Annexe 1 of the annual report would cease to apply to the UK if we made an opt-out decision under Protocol 36. Likewise, if we decided to opt in to all the proposals in Annex 2, or not opt in but seek to influence them from the outside, which of those measures would cease to apply to the UK if we made an opt-out decision under Protocol 36? If the Government decided to opt out under Protocol 36, no one knows which measures, including the European arrest warrant, we could subsequently get agreement to opt back in to or, if we could, on what basis or terms. All 130 measures were agreed by unanimity under a system where the UK had the veto, and not a single one of them was foisted on the UK against our will.
The noble Lord, Lord Boswell of Aynho, referred to the Europol regulation. I know it is only two days after the Minister was asked about it on Monday, but can he now clarify the Government’s position, including when the debate on the government Motion on the decision on the Europol regulation, postponed from today, will take place?
I shall conclude with a few specific questions on the report. On page 26, the Government have not opted out of parts of Schengen, such as the Schengen information system second generation. I understand that we will be connected in the fourth quarter of 2014. If we exercise the block opt-out, we will be leaving all pre-Lisbon parts of the Schengen acquis. What does that mean as far as the decision not to opt out of the Schengen information system second generation is concerned? On page 6, reference is made to the directive on the protection of the financial interests of the EU against fraud by means of criminal law. The report says that the Treasury will provide an update as soon as possible. If that has not already happened, when is it likely to happen?
Page 10 refers to the trade agreement between the EU and Colombia and Peru. I am genuinely not entirely sure what the current position is. Has that agreement been concluded? Was there an undertaking, as has been suggested to me, by the Government that there would be a vote in both Houses on the trade agreement between the EU and Colombia and Peru? Page 13 refers to passenger name record sharing with the USA to which the Minister referred in his opening comments. How is that operating and how effective is it proving to be? Page 16 refers to the asylum and migration fund. How would this be affected if we exercised the blanket opt-out? How much of an effect would an opt-out have on the UKBA’s resettlement activities?
Finally, page 23 refers to the confiscation of the proceeds of crime in the EU; once again, the Minister referred to this issue in his opening speech. Have any problems arisen subsequently as a result of not opting in? I appreciate that the Minister is unlikely to have all the information immediately to hand to respond to my detailed points; I mean that—I would be amazed if he did. However, I would nevertheless appreciate a response at not too late a stage.
Lord Taylor of Holbeach
My Lords, this has been a good debate. I would love to be able to amaze the noble Lord, Lord Rosser. I will do my best, but he is quite right in assuming that some of the questions are quite detailed. However, I am becoming more informed every minute, as the noble Lord can see, which is a very helpful support. I think that the noble Lord and I start off as relative novices in this esoteric part of the Home Office brief. We bow to the expertise to which we have had the opportunity of listening. However, I have found in the briefings which I have had that this is a fascinating and important area of government with real effects on how the Government operate and on the lives of the citizens of our country.
I am delighted that my noble friend Lord Taverne takes the view that our approach of being pragmatic and looking at issues on their merits is the right one. That is certainly true, and I have been impressed by the rigour with which this process has been pursued by the Government.
The Government are fully committed to engaging with Parliament on European Union issues and on the opt-in in particular. As such, the debate has been useful. Indeed, as noble Lords have mentioned, this is the second time this week we have considered the implications of this. This is a more general debate; we had a specific debate on Europol on the Floor of the House on Monday. This shows the seriousness with which the Government take these matters. During the period of this report, your Lordships have debated two other decisions on UK participation in EU measures: one on data protection and the other on the confiscation of criminal assets.
I will commence by going through points that noble Lords have made. I am grateful to the noble Baroness, Lady Corston, for her contribution. She started off with a modest reprimand which was reinforced by the noble Lord, Lord Boswell, that we were late. I acknowledge that, but we have plans and do not want this to happen again. We will be providing a report in January. We understand how important that is.
The noble Baroness also rightly asked that the committee be given enough time to consider our proposals. The committee exists to scrutinise, and we want to facilitate that. That is the intention of the code of practice. We are conscious of the time constraints on the committee and, indeed, sometimes on the process in which we are engaged. We will seek to keep the committee informed of what is in development, as well as providing Explanatory Memoranda promptly.
The noble Baroness regretted our decision not to opt in to the justice programme. My noble friend Lord Taverne also expressed concerns about this. We have said that we will consider seeking to opt in after it is agreed, if there is evidence to show that it is worth while. We take note of what the noble Baroness has said and would welcome any further evidence she or interested parties may wish to submit so that my right honourable friend the Justice Secretary can consider it at the appropriate time.
My noble friend Lord Taverne asked what the sums involved are. That issue remains under negotiation. The sums will depend on the nature and outcome of negotiations.
The noble Baroness mentioned the committee’s advice on civil and criminal measures. I completely agree with her about the measure concerning the estate of a deceased person and the directive on access to lawyers. Certainly, there needs to be a cautious approach in both cases because of civil and criminal law. On the question of a common European sales law, I agree it risks causing some legal uncertainly. However, the opt-in does not apply to the measure since it has been brought forward only as an internal market measure not as a justice measure.
My noble friend Lord Taverne wanted more detail on the reasons for the decision not to opt in to the internal security fund. The sums involved are still unclear as discussions on the EU budget remain under negotiation. However, we have committed to review the decision post-adoption and will consult Parliament then. He asked also why the merger of Europol and CEPOL is not a good thing. Noble Lords who were present at the debate on Monday evening will have heard me explain the Government’s position on this measure. We are concerned that by combining the two we are going to dilute the core functions of Europol. We do not believe that is in our interests.
The noble Lord, Lord Boswell, asked what was happening to our mid-year reports. Given this report was presented late, will our mid-year report be late? We plan to send it to the committee this month. We are catching up, and I hope we will continue to be on time in the future. The noble Lord—I keep thinking of him as my noble friend but given his now exalted position I have to reduce my friendship with him as we need to be at arm’s length and it is difficult to do—asked whether the Government’s position on the interpretation of the opt-in had changed. The Government believe that any measure including substantial JHA content triggers the opt-in protocol irrespective of whether it has been categorised as a JHA measure by the EU by, as he says, the citation of a JHA legal base. We often assert that the opt-in applies to measures that are predominantly non-JHA but which include a binding JHA content. That is what is determining policy. The Government have not changed their position in that regard, but it is very important to emphasise that it is the binding JHA content that triggers the opt-in procedure.
The noble Lord also asked about the inaccuracies that had crept into the annual report in the matter of legal bases. There was an administrative error in relation to the correct legal bases. The Secretary of State wrote to the chair to explain that the correct bases for the Turkey social security measure were Articles 289 and 48 TEU and on assurance mediation were Articles 53(1) and 62 TEU.
The noble Lord also asked whether we had ever successfully negotiated a change of legal base. We have done so in the case of a directive on road transport offences, which secured unanimity in the Council to change the transport legal base to a JHA legal base on police co-operation. We did not, in fact, opt into that measure.
As regards further information on the Government’s position on the 2014 opt-out, all noble Lords would like to receive it as quickly as possible. The Government’s position is that we will keep Parliament informed.
The noble Lord, Lord Rosser, asked about the question asked by his noble friend Lady Smith of Basildon in the Europol debate about opt-in decisions pending. I had hoped that the noble Lord would ask about that because I can place this on record and save myself a stamp. Among others, we have opt-in decisions pending on the directive on legal migration, a co-operation agreement with Indonesia, a mandate for an agreement with Cuba, an association agreement with Ukraine, a mandate for an EU-China investment agreement and the Europol decision, as the noble Lord will know. All are being managed within required deadlines.
Talking of the Europol debate, the noble Lord asked which law enforcement agencies say that we should not opt into Europol. The Government are yet to take a decision on the new Europol regulation and in the decision-making process we have been consulting a number of law enforcement colleagues, including the Met police and SOCA, on the options. Given that the decision-making process is ongoing, I cannot give any further detail on that matter.
The noble Lord also asked when the debate will take place. I gave a commitment that Parliament would be informed of the decision and I have little doubt that the debate in the other place will be tabled for consideration before the Recess. We are committed to a debate on the Europol regulation and are seeking to arrange for it to take place before the House rises.
The noble Lord asked about the European surveillance order, which I remember the noble Lord, Lord Hannay, talking about. I asked about that because I could not find any record of it. I think the reference was to the European supervision order, but the noble Lord, Lord Hannay, is normally so reliable, I can understand why the noble Lord, Lord Rosser, followed up on this matter. However, this measure was agreed under the pre-Lisbon arrangements and would fall within the Protocol 36 decision. The Government will determine their approach to implementation when the decision on that protocol has been made.
The final issue on which I have a note here was about the measures in Annexe 1 to our report. Would the Government be forced to leave if we took a block opt-out decision in 2014? I cannot give noble Lords a definitive answer until we have completed our discussions with the Commission on the measures that we would intend to rejoin. We regard the legal thresholds of practical operability and coherence to be a high bar. I hope that I have surprised the noble Lord, Lord Rosser, to some degree but not in absolute terms, and there are some points that I should like to cover in correspondence. I will not have saved a postage stamp, after all.
If we look to the future, it is not possible to say what proposals regarding an opt-in will be brought forward over the remainder of this year. In the report, we have given an indication of what we expect to happen based on work programmes, our knowledge of dossiers which are being considered, those which were carried over from last year and discussions we are having on an ongoing basis with our European partners. The Government have been very clear that we will take opt-in decisions on a case-by-case basis, so noble Lords will understand that it is not appropriate for me to comment on whether we will opt in to any new proposal that might come forward in coming months. I can give a commitment that whatever happens, we hope that the committee will work with us in scrutinising these matters and we will give Parliament as a whole the opportunity to be engaged in this important part of democratic scrutiny of European policy.
We expect a number of EU measures to emerge that will trigger a European opt-in decision. Most significant is the new Eurojust regulation which we expect to be published this month. At the same time, there is likely to be a proposal for a European public prosecutor. We expect that, as with the Europol proposal, the Eurojust opt-in decision will be subject to parliamentary debates in government time. Noble Lords will be aware that the Government have already indicated that we will not participate in the European public prosecutor. We also anticipate the publication of proposals on combating money laundering. After long negotiations, it is possible that an EU-Canada passenger names records agreement will be signed and concluded triggering opt-in decisions. I understand that the Ministry of Justice is anticipating proposals on special safeguards in criminal procedures for vulnerable suspected or accused persons and an initiative regarding legal aid in criminal proceedings. It is also possible that new initiatives on e-justice and the law applicable to contractual and non-contractual obligations will emerge.
Additionally, it is usually the case that we expect a number of further opt-in decisions will fall to other government departments during this period. I assure noble Lords that as the lead government departments on the opt-in the Home Office and the Ministry of Justice are committed to providing advice and assistance to other departments which are grappling with what can be quite a complex policy area.
I look forward to the participation of the European Union Committee and, in particular, the specialist committee headed by the noble Baroness, Lady Corston. Our next annual report covering the period 2012-13 will be laid before the House in January.
House of Lords
Georgia
(11 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Lord Bishop of Wakefield
To ask Her Majesty’s Government what steps they are taking to encourage greater economic and political co-operation between Georgia and the European Union.
Lord Wallace of Saltaire
My Lords, the UK fully supports greater economic and political co-operation between Georgia and the European Union, particularly through regular and intensive high-level contact. Three senior Georgian Ministers have visited London in recent months and three UK Ministers and several senior officials have visited Tbilisi. We are pleased that Euro-Atlantic integration has remained a priority for the new Georgian Government, and, through involvement in the Eastern Partnership, Georgia is finalising an association agreement and a deep and comprehensive free trade area with the EU.
The Lord Bishop of Wakefield
My Lords, I am grateful to the Minister for his response and for setting out the range of co-operation between Georgia and the EU. I remain concerned that, for most Georgians, this assistance remains invisible. Do the Government accept that to avoid similar mistakes to those made with the Ukraine, the EU should take steps to explain to the wider Georgian public the benefits of the association agreement and other such co-operation measures with the EU, rather than after they have been negotiated?
Lord Wallace of Saltaire
I was briefly in Tbilisi eight weeks ago and saw that the EU is quite visible there. The EU monitoring mission is the largest external monitoring mission in Georgia, monitoring the borders with the disputed territories of Abkhazia and South Ossetia. The EU heads of mission meet regularly, and comment regularly and openly, on developments in Georgian politics. The Council of Europe and the OSCE are also active in assisting with judicial training in Georgia and elsewhere. So we are quite visible and extremely active.
Lord Anderson of Swansea
My Lords, the Minister mentioned the EU monitoring mission but failed to mention that Russia and its allies still prevent that EU monitoring mission doing its work in Abkhazia and South Ossetia. What protests are we making to Russia about that, and are we content for yet another frozen conflict in Europe to remain for a longer time?
Lord Wallace of Saltaire
My Lords, we are not content, but as the noble Lord knows well, the Russians are not always the easiest negotiating partners. As he will also know, a fence is being erected along the boundary of the breakaway regions and, in some cases, several hundred metres into Georgian territory beyond the breakaway regions. We continue to talk to the Russians about this. The new Georgian Government have made a number of deliberate unilateral moves to demonstrate their willingness to talk to the Russians. There have been some limited talks but so far the Russians have not given very much in return.
Baroness Falkner of Margravine
My Lords, does my noble friend agree that the greatest challenge for the EU with regard to Georgia is managing the relationship between Russia and Georgia? Can he tell the House the position of Her Majesty’s Government on Georgia’s application to join NATO, which could present some newer challenges?
Lord Wallace of Saltaire
My Lords, at Bucharest some years ago NATO agreed to accept Georgia as a candidate member. The largest non-NATO, non-British force at Helmand at the moment is two Georgian battalions. We support Georgia’s aspiration to join NATO but it will necessarily, unavoidably be a long process. There are, indeed, British military trainers in Georgia.
The Earl of Sandwich
My Lords, the right reverend Prelate mentioned Ukraine as a possible parallel. However, is not Ukraine a good deal behind Georgia politically, and therefore could not Georgia qualify much earlier, given also that the Ukrainian opposition leader is still in prison?
Lord Wallace of Saltaire
My Lords, it is entirely fair to say that Ukraine is considerably behind Georgia in many ways. There was a free and fair election in Georgia last spring which resulted in a change of Government. The Georgian Government have just announced that on 31 October this year there will be a presidential election. Of course, that is not to say that it is a perfect democracy. There are a number of issues, including cases against members of the previous Administration, about which we are concerned. However, when I was in Tbilisi I had lunch at the British embassy with MPs both from the governing party and from the opposition. There are many countries in what was formerly the Soviet Union in which one could not do that.
Lord Kilclooney
My Lords, given that the European Union accepted Cyprus as a member even though its Government did not govern the entire island of Cyprus, why does the European Union welcome Croatia and not Georgia as a member?
Lord Wallace of Saltaire
I note some of the unspoken sentiments behind the noble Lord’s question. As he knows well, the process of admission to the European Union is long and arduous. Georgia is at a very early stage in that process. Georgia’s administrative capability and economic changes and the judicial, rule of law issues that it will have to go through mean that any approach to the European Union will be relatively long, but that is also true for some of the western Balkan countries.
Lord Bates
My Lords, given that the eyes of the world will be on Sochi next February for the Winter Olympic Games and that Sochi is less than 100 miles from the Georgian border, will my noble friend urge the UK mission to the UN to encourage Georgian and Russian reconciliation when the Olympic Truce is presented to the United Nations General Assembly in October? Given that the Russians invaded Georgia in violation of the Beijing Olympic Truce, this might be a timely point for reconciliation.
Lord Wallace of Saltaire
I congratulate the noble Lord on the faithfulness with which he wishes to ensure that we think about the Olympic Truce. We are very conscious that the Sochi Winter Olympics are taking place extremely close to the border with Abkhazia and that that may potentially raise some security issues. There is instability in the north Caucasus as well as in the south Caucasus and we have, of course, spoken to the Russians about that.
Homelessness
Baroness Quin
To ask Her Majesty’s Government whether they are proposing any measures to ensure that homelessness does not increase.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, we are currently investing £470 million over four years to prevent and tackle homelessness. In the recent spending round for 2015-16, it was announced that the Department of Health will bring forward a new £40 million hostels investment programme. We are also encouraging housing supply through expanding the private rented sector, with £10 billion in loan guarantees, the £1 billion Build to Rent fund and a new three-year affordable homes programme of £3.3 billion from 2015-16, including £400 million for new-product, affordable rent-to-buy.
Baroness Quin
My Lords, homelessness has risen sharply over the past two years, and recent government measures do not help. For example, on the BBC’s “Look North” last night, it was reported that rent arrears had shot up in Sunderland, Newcastle and north Tyneside as a result of the bedroom tax, raising fears of further evictions and homelessness. Will the Government recognise that misleading national figures about overcrowding and underoccupancy fail to appreciate the huge mismatch between these two things across the country, and that the Government should now, on an area-by-area basis, work urgently with local authorities and housing associations to stop the acute crisis in housing and homelessness getting even worse?
Baroness Hanham
My Lords, the Government are already working across the country with individual authorities, providing access to funding and policies that enable local authorities to make the decisions they need to make and which we have encouraged. We have changed the law to ensure that local authorities can use the private rented sector for people who are homeless or in danger of homelessness. Local authorities need to make decisions on the amount of housing and money they need to support homelessness and on their policies for dealing with homelessness. The Government are fully aware that there are discrepancies across the country and we are working with local authorities to try to help with that.
Baroness Gardner of Parkes
My Lords, does the Minister realise that many of these homeless people are dealt with by charities, rather than by local authorities? They are very difficult for anyone to manage. When I was a chairman of social services, we had homeless shelters where people used to smoke so often that you had a permanent fire hazard in the building. People who elect to sleep on the street often do not wish to be under any authority that would regulate them. What is the Government’s estimate of the proportion of homeless people dealt with by charities, as opposed to local authorities?
Baroness Hanham
My Lords, I cannot give the noble Baroness the exact proportion but, yes, a number of charities such as Centrepoint and St Mungo’s in London provide an extraordinarily important service. The Passage at Westminster Cathedral and similar organisations across the country play an enormous part in supporting and helping homeless people. The No Second Night Out initiative now takes place not only in London but across the country. It ensures that what my noble friend suggests happens does not happen. People are not on the streets for longer than one night. They are taken off and given advice, help and support to enable them to move back into proper accommodation.
Baroness Morgan of Drefelin
My Lords, official figures say that rough sleeping has increased by 31% in the past two years but experts working in the field say that the increase is double that. Do the Government have a projection for how homelessness, and rough sleeping in particular, is set to go in the future? Do the Government agree that it is essential that all rough sleepers should have access to emergency accommodation and that that needs to be planned for if we are to see this increase continuing in the future?
Baroness Hanham
My Lords, rough sleeping had gone down but I acknowledge that it is beginning to creep up again and, as I have said, that is completely undesirable. The No Second Night Out initiative ensures that people are not left on the streets for long spells of time and that they are given access and help. The £40 million I have just mentioned will come from the Department of Health. It is to build hostels and provide hostel accommodation for people who are sleeping rough and to get them off the streets. It will be very effective, particularly for the mentally ill, of whom there are more in that situation than we would wish.
Lord Berkeley
My Lords, alongside homelessness often goes hunger. The Minister told us yesterday that there was no government policy to encourage soup kitchens. Is starvation part of the Government’s policy, because that seems to be the only way out?
Baroness Hanham
My Lords, I will leave that to my noble friend the Minister who made the statement. Of course, starvation is not part of anyone’s policy or wish. One of the reasons for getting people off the street as quickly as possible is to ensure that they have access to food, medical help and help with accommodation.
Baroness Maddock
Has my noble friend seen the excellent report from St Mungo’s charity, which she mentioned earlier, entitled No More: Homelessness Through the Eyes of Recent Rough Sleepers? According to the report, St Mungo’s found that most of the rough sleepers it surveyed had been in touch with the police before they slept rough, rather than with any other service. What can the Government do to encourage and assist the police to do more work with other agencies to address the problems before they escalate into homelessness?
Baroness Hanham
My Lords, there is already good co-operation between all the agencies that are involved with people who are becoming homeless. The police are often involved in the initial stages, when people have perhaps committed minor crimes, and so they come across them that way. However, there is common accord across the health service, local authorities and the police to ensure that as much help as possible is given.
Baroness Farrington of Ribbleton
My Lords, the Minister has a long and distinguished career in local government. Will she join me in expressing concern that local authorities are repeatedly being told that they are given money for this and money for that, but that global budgets are being cut? The result is that individual groups and needs often start asking for the money to be ring-fenced, when in fact local authorities are being constrained far too much by central government. I remember occasions in her distinguished career when the Minister objected to central government doing that.
Baroness Hanham
My Lords, we could now have a debate for half an hour on the financial situation and why we are in a position where we have to reduce funding across both government and local authorities. As I said before and will reiterate, local authorities need to manage the budgets that they have, and need to make the necessary adjustments to how they administer themselves and allocate their funding. The noble Baroness is right that budgets are not ring-fenced, but local authorities are given specific allocations to help with particular areas, including homelessness. However, we are where we are and in the financial situation that we are, which did not start with this Government. Therefore, we all have to play our part in trying to ensure that that is improved.
Health: Diabetes
(11 years, 4 months ago)
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Lord Harrison
To ask Her Majesty’s Government what assessment they have made of the quality of healthcare available to diabetics with eye problems.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, we have set clear objectives for the NHS and Public Health England to improve the care and quality of life for people with diabetes. The public health outcomes framework includes an indicator on preventable sight loss, which will track three of the commonest causes of preventable sight loss, including diabetic retinopathy, to drive improvements in quality.
Lord Harrison
My Lords, given the decline in the regular and important annual check-up for diabetics, does the Minister acknowledge that the retinopathy screening for diabetics introduced by the previous Government is being undermined and underresourced? On cataract operations, will the Minister explain why, among our European Union colleagues, we are the most demanding regarding the threshold required to have such operations? Given the importance of cataract operations, especially for older people in retaining their vision, will the Minister meet me and other colleagues to discuss these matters and allied subjects?
Earl Howe
I would be happy to meet the noble Lord. I am aware that the whole area of the cataract threshold and, perhaps more importantly, the interpretation of that threshold, is one that NHS England is now actively looking at to ensure greater consistency around the country.
I do not agree with the noble Lord’s interpretation of the screening figures. The UK countries, I believe, lead the world in the area of diabetes eye screening. This is the first time that a population-based screening programme has been introduced on such a large scale. The latest figures show that up to March 2013, 99% of people with diabetes who were eligible for screening were offered it in the previous 12 months.
Baroness Finlay of Llandaff
My Lords, given the importance of prevention, have the Government been monitoring the progress of access to insulin pumps for children with diabetes, in order to prevent eye problems later in life, given that they have better control with insulin pumps?
Earl Howe
My Lords, that tends to be a matter for provider trusts, working in conjunction with clinical commissioning groups. I am aware that there is concern about the variability of access to insulin pumps. Of course, they are not a universal remedy for every diabetic patient, but where they are appropriate they should be commissioned. If I can give the noble Baroness the latest information on that, once I have consulted NHS England, I would be happy to do so.
Baroness Jolly
My Lords, the House has heard that eye screening is critical for those with diabetes. As the national screening programmes are now commissioned by NHS England on behalf of Public Health England, and while diagnostic and treatment services are commissioned by clinical commissioning groups, will my noble friend tell the House what challenges these arrangements pose to the patient when trying to assess quality?
Earl Howe
The key thing here is for NHS England, Public Health England and local commissioners to work closely together, which is indeed what they are doing, so that the patient experiences a seamless service. Essentially, the new commissioning arrangements for national screening programmes enable effective commissioning and oversight of the whole screening pathway, alongside integrating those with the diagnostic and treatment services. To ensure a quality service, local programmes are assured by NHS screening programmes’ quality assurance teams and services are measured against 19 standards.
Lord Low of Dalston
My Lords, I declare my interest as vice-president of RNIB. The Minister will be aware that NICE has recently approved the use of Lucentis as a treatment for those suffering from diabetic macular oedema. We are hearing reports from various parts of the country of queues building up of people requiring treatment for diabetic macular oedema. Will the Minister undertake to do his best to ensure that the necessary resources are put in place to relieve these backlogs and enable people to benefit from this new treatment that has now become available?
Earl Howe
My Lords, I am aware of the issue that the noble Lord raises. He will know that NHS commissioners are statutorily required to fund clinically appropriate drugs and treatments which have been recommended by NICE. The Centre for Workforce Intelligence has been commissioned to review the ophthalmology medical workforce after discussions were held between the royal college and Health Education England earlier this year. That review is due to report in the summer and the results of it should, I hope, point the way to a resolution of the issue that the noble Lord has raised.
Lord Collins of Highbury
My Lords, as a type 2 diabetic, I benefit from annual retinal check-ups at UCH; it is an excellent service. However, despite there being a national screening programme, there is a large variation in take-up, which in some areas is as low as 65%. What steps are the Government taking to ensure a higher and more consistent take-up?
Earl Howe
In the end, accepting the offer of screening is a matter for each individual. There are some people who, for personal reasons, will choose not to take up the offer. However, as part of the process of continuous improvement, we would expect the gap between the number of people offered and the number of people receiving screening to reduce, and for there to be greater consistency in numbers offered and received across local screening programmes.
Cyclists: Safety
(11 years, 4 months ago)
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Lord Greaves
To ask Her Majesty’s Government, in the light of the Department for Transport’s figures on road casualties in 2012, what steps they are considering to increase the safety of cyclists on the roads.
Earl Attlee
My Lords, as I said on Monday, we take cycle safety very seriously. Earlier this year, we announced £40 million, including local contributions, for 78 junction safety schemes. In addition, the majority of schemes in the £600 million local sustainable transport fund include cycling. We have made it easier for councils to introduce 20 mph speed limits and install Trixi mirrors. We are considering the recommendations of the All-Party Parliamentary Cycling Group inquiry and will respond shortly.
Lord Greaves
My Lords, over the past two years, the number of cyclists killed on the roads has gone up from 111 to 118 per annum and the number seriously injured, perhaps more worryingly, from 2,660 to 3,222. One of the main problems that cyclists have is their interaction with heavy vehicles. It is welcome that the Minister for Road Safety announced, I think last week, the setting up of the cycle-lorry safety working group, jointly between the Transport Department and Transport for London. Can the Minister say when this working group will start work; who will be involved and particularly whether cycling organisations will be able to give evidence to it; and which specific aspects of cycle lorry safety will it look at?
Earl Attlee
My Lords, my noble friend has asked me quite a lot of detailed questions and I think it would be better if I wrote to him. I agree that HGVs are a disproportionate problem. HGVs do not have any more accidents with cycles than do cars. However, when they do have an accident, the result is generally much more serious. It is quite right that we pay special attention to HGVs.
Lord Campbell-Savours
My Lords, the use of mobile phones by motorists is illegal, because it is unsafe. Surely the use of audio headgear by cyclists is equally unsafe and should be made illegal?
Earl Attlee
My Lords, I agree with the noble Lord that it is extremely unwise to cover one’s ears when riding a cycle, because you cannot hear traffic approaching or someone sounding their horn. I am not sure that it is necessary to make it illegal.
Baroness Sharples
Would my noble friend agree that cyclists should wear some form of identification? I was nearly knocked over outside Millbank. I shouted at the cyclist—I did not swipe him—but please could we have some identification on them?
Earl Attlee
My Lords, we want to do everything we can to increase the level of cycling because of the health benefits. To require someone to carry identification when riding a cycle would be an unnecessary burden. There can be incidents with pedestrians, for instance, when it would be good if they carried identity, but we do not require them to do so, so we do not see why a cyclist should carry identity either.
The Earl of Listowel
My Lords, what is being done to encourage children to wear helmets? Is the Minister aware of the particular fragility of the skulls of young children?
Earl Attlee
My Lords, we are acutely aware of this problem. We strongly encourage children to wear helmets. However, again because of the difficulty of enforcing the wearing of helmets for children, we do not want to make it compulsory—a legal requirement—but we strongly encourage children to wear helmets and we think it is a very good idea for adults to wear helmets as well.
Lord Winston
My Lords, does the Minister agree that the health benefits of cycling may not be as great as he imagines, given that in London the pollution from slow-moving traffic is about 10 times the legal limit in Europe?
Earl Attlee
My Lords, the noble Lord raises an interesting point. The noble Baroness, Lady King of Bow, has raised this matter with me and I have had a meeting with her about it. We are doing everything we can to improve the air quality in London, but it is difficult to get to where we want to be.
Lord Taverne
My Lords, the most radical and probably most effective measures proposed by the cycling organisations, such as the Go Dutch campaign, would be quite expensive. However, does the Minister not agree that the benefits would be very substantial? There would be less pollution, less congestion in cities and a better urban environment—and, of course, as the Minister has acknowledged, anyone who gets on a bike instead of sitting in a car will be much healthier, whatever their age.
Earl Attlee
My Lords, I entirely agree with my noble friend. I was a little bit worried when he started talking about expensive solutions, but I do agree with him.
Baroness Butler-Sloss
My Lords, I am concerned about the safety of pedestrians, as has already been mentioned. Cyclists ride with mobiles to their ear, with ear things otherwise filled with music, turning right across the traffic when the light is red against them. What are the Government going to do to tell cyclists to obey the red signs?
Earl Attlee
My Lords, I think that I agree with the whole House that it is important that cyclists adhere to all the rules in the Highway Code, in particular by not using a mobile phone while riding and not covering up their ears, in order to avoid unnecessary accidents.
Lord Davies of Oldham
My Lords, of course cyclists should obey the Highway Code, but the Question with which we started reflected on the fact that deaths and serious injuries for cyclists have increased during the past three years. Several months ago, the Times newspaper launched a campaign on cities fit for cycling and established eight points which have been largely endorsed by the cycling organisations. Are the Government supportive of those points and, if so, what action on them have they taken?
Earl Attlee
My Lords, we are generally supportive of the Times campaign; I have the list of all its suggestions here and we are measuring our performance against them. Not every single one can be adopted, but we are trying as hard as we can to reduce the casualties.
Lord Tebbit
My Lords, how many cyclists actually pay the fixed-penalty tickets which are issued to them for offences such as riding on the pavement to the danger of pedestrians? My noble friend may know that they habitually give false names and addresses; there is no way for the police officer issuing the penalty notice to know that. What are we going to do? Are we going to compel cyclists to have some form of identification so that, if issued with a penalty ticket, they are required to pay it instead of just scoffing at the law?
Earl Attlee
My Lords, it is up to the police to decide how they enforce road traffic law, and they have the necessary tools to do so. I gently say to my noble friend that the police look at where they can deploy their resources to reduce casualties. Although it is extremely annoying for noble Lords to see cyclists riding on the pavement, and although it does cause accidents, it does not cause fatal accidents.
Press Regulation
Lord Fowler
To ask Her Majesty’s Government how it will ensure that the relative merits of the two proposed royal charters on press regulation will be properly compared with one another given that it has been reported today that the relevant Privy Council meetings are likely to be months apart.
Lord Gardiner of Kimble
My Lords, the charter published on 18 March continues to have the support of the three main political parties. The Press Standards Board of Finance has petitioned with an alternative charter and this is being given proper, legally robust consideration in line with the Privy Council process. That will need to include consideration of the merits of the petition in the light of all relevant facts. The Secretary of State for Culture, Media and Sport will update the other House on these matters very shortly.
Lord Fowler
In thanking my noble friend for that response, perhaps I may ask him two questions. First, am I right in saying that the effective decision on the press’s proposal for its royal charter will be taken by a group of Ministers who happen to be privy counsellors? It is four months since the beginning of this royal charter process. Why has it taken so long? Given that the Government and Parliament have already rejected the press’s proposals, why do they need until October to give even further consideration to them? Secondly, is the Minister aware that press proprietors are now in the process of setting up their own body in any event and that one story is that they are to begin recruiting staff? Can the Minister therefore tell me just when we will get round to deciding the royal charter which was overwhelmingly approved by Parliament in March? Surely it is that charter, the charter approved by Parliament, which is pre-eminent and the one that we want to see considered and implemented?
Lord Gardiner of Kimble
A number of questions were asked, my Lords. We have to undertake due processes as regards the PressBoF charter application. One reason for the timing of that is that none of the detailed preliminary work with the relevant government departments and other interested parties that normally precedes a formal petition of the Privy Council has been undertaken. Indeed, that period of openness has resulted in 19,000 responses. Due processes have to be undertaken. That is the legal advice to which it is important to adhere. As for the Government’s charter, work is continuing on the outstanding points. I will perhaps go into them in further detail later, but work is being undertaken on the Government’s proposals. As for the press proprietors’ considerations, this is a matter for the Privy Council, not a matter for the press proprietors. The Privy Council will go through the due processes that are required. They may be lengthy or arcane to some, but they must be undertaken.
Lord Soley
Is it not glaringly obvious to everybody that the press is playing for time in order to avoid their responsibilities? Is it not time that we faced up to this? May I offer my assistance to the Minister, having had some experience of Bills of this nature from 20-odd years ago? I suggest that a group of Members, whether in the House of Commons or the House of Lords or jointly, see the Culture Secretary with proposals for a Bill promoting Leveson’s recommendations. It might take into account some of the other factors that have come to light, but we could have proper regulation fairly soon by putting a Bill through Parliament and ceasing to play for time with royal commissions.
Lord Gardiner of Kimble
My Lords, I understand your Lordships’ frustration about timing. Indeed, already two elements of Acts of Parliament with cross-party agreement deal with some of the Leveson recommendations. Obviously, I will pass on to the Secretary of State the noble Lord’s suggestion. However, I repeat—and I am sorry for doing so—that we have to go through the due process. The legal advice on these matters has been given to the leaders of all the political parties and I know that the Leader of the Opposition is in possession of that. That is why we are going through the necessary procedures.
Baroness Bonham-Carter of Yarnbury
How much support does the Minister think there is for the PressBoF charter other than from a certain powerful interest group? The fact is that its proposal would not create a self-regulator that is genuinely independent or impartial. On Monday, I quoted Sir Tom Stoppard and I want to quote him again.
“The resistance to a statutory monitor suggests that the dream of self-regulation persists in some quarters. Well, they had that, and . . . they blew it”.
Does not my noble friend agree with one of our greatest defenders of the freedom of the press?
Lord Gardiner of Kimble
We are in the position we are because wrongdoing took place, and we have had to decide how best to ensure that this does not happen again. That is why the cross-party royal charter commands the support of all the political parties. Indeed, it is why at PMQs today, my right honourable friend the Prime Minister made very clear his views on the PressBoF proposal and his continuing support for the cross-party royal charter.
Lord Stevenson of Balmacara
My Lords, when the noble Lord answered the question on Monday, he said,
“it is not appropriate for the Privy Council to consider more than one royal charter at a time on the same issue”.—[Official Report, 1/7/13; col. 976.]
Why is the Privy Council uniquely incapable of multitasking? I bet it is a man who is running it. Yes it is—it is the Deputy Prime Minister.
As I am sure noble Lords are aware, there are about 500 members of the full council. I bet there are more than enough in the Chamber this afternoon. Indeed, the noble Lord who asked the question is a member of the Privy Council, as are all the others sitting next to him. We could have a meeting now in the Moses Room. Could the Minister agree that this would be a desirable thing to do so that we can begin to do what the victims want and what Parliament has decided?
Lord Gardiner of Kimble
The noble Lord makes some very tempting suggestions but there is going to be an update by the Secretary of State very shortly—although I am not sure what “very shortly” means. I hope that it will be helpful to your Lordships. Clearly, we all want to make progress.
Lord Low of Dalston
My Lords, what proposals do the Government have for dealing with the situation which may arise when, having gone through due process, two charters have the approval of the Privy Council?
Lord Gardiner of Kimble
Oh dear. The truth is that there will be this due process in which the PressBoF charter is considered. Obviously, I cannot prejudge that because that is part of the due process that will need to be undertaken. Once that is considered, clearly, the cross-party charter would come up for consideration. As we speak, work is going on to ensure that the fine-tuning of that is complete, and that involves Scotland compliance following the vote of the Scottish Parliament on 30 April, and discussions with the Commissioner for Public Appointments.
Lord Tebbit
My Lords, for the sake of clarity, will my noble friend explain to the noble Lord opposite the difference between a meeting of Privy Counsellors and a meeting of the Privy Council? He does not seem to understand the difference.
Lord Gardiner of Kimble
I defer to the many Privy Counsellors in your Lordships’ Chamber. Not being one, I have not yet attended a meeting, so I am not in a position to comment fully, but I entirely understand the point that my noble friend is making.
Baroness Symons of Vernham Dean
The Minister said that wrongdoing took place, so can he explain the Government's retreat from the position that the victims of that wrongdoing had to be satisfied by the outcome of what is now before the Privy Council? Will he please explain to those victims that retreat and the delay in giving them the satisfaction that was promised?
Lord Gardiner of Kimble
The important thing is to make sure that this is done properly and correctly, and that is what is being done. I do not quite understand what the noble Baroness means in so far as we are going through the current process because of the need to ensure that this does not happen again.
Lord Gardiner of Kimble
I understood that. The victims are precisely why we are here. It is to ensure that this does not happen again. That is the final objective that we need to secure.
Baroness O'Neill of Bengarve
Is the Minister still committed to securing a royal charter that will underpin self-regulation but not self-interested regulation?
Lord Gardiner of Kimble
The intention with the cross-party charter is precisely to ensure that there is independent regulation of the press. As I said earlier, we need a free press but we need a responsible press. We need to secure a lasting settlement on both of those.
Reserve Forces
(11 years, 4 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, with the leave of the House, I shall repeat a Statement made in the other place. The Statement is as follows:
“With permission, Mr Speaker, I wish to make a Statement on the future of our Reserve Forces. In November last year, I announced a formal consultation which lasted until January this year. I am grateful for the more than 3,000 responses we received. I have placed copies of the summary of consultation findings in the Library of the House.
More than 25,000 reservists from all three services have deployed on operations over the past 10 years. Sadly, 30 have paid the ultimate price, and I know that the whole House will want to join me in saluting their sacrifice.
In 2011, the Future Reserves 2020 Commission reported that our reserves were in serious decline. The Government responded by committing to revitalise our Reserve Forces as part of Future Force 2020, reversing the decline of the recent past, growing their trained strength to 35,000 by 2018 and investing an additional £1.8 billion in them over 10 years.
We recognise the extraordinary commitment reservists make and, in return, we commit to deliver the reservist a challenging and rewarding experience, combined with an enhanced remuneration and support package and an improved deal for employers, but to recruit the reserves we need and train and equip them to be fit for purpose in Future Force 2020 requires substantial change.
I am today publishing a White Paper setting out our vision for the Reserve Forces and the detail of how we will make reserve service more attractive. It also confirms our intention to change the name of the Territorial Army to Army Reserve—better to reflect the future role. Alongside the White Paper, I am publishing the first report of the independent External Scrutiny Group which I announced last year to oversee and report on our progress in delivering Future Reserves 2020.
The White Paper reiterates our commitment to improve access to modern equipment and provide better training as part of the £1.8 billion package. Two hundred million pounds will be invested in equipment for the Army Reserve and to kick start that programme I can announce today that we will bring forward to this year £40 million of investment in new dismounted close combat equipment—meaning upgraded weapons and sights, night vision systems, and GPS capabilities will start to be delivered to reserve units before the end of the year.
The integration of regulars and reserves is key to Future Force 2020. That integration prompts a closer alignment of the structure of remuneration across the Armed Forces. We have therefore decided to increase reservists’ total remuneration in two ways: through the provision, for the first time, of a paid annual leave entitlement in respect of training days and through the accrual of pension entitlements under the new future armed forces pension scheme 2015, for time spent on training as well as when mobilised. These two measures represent a substantial percentage increase in total reserve remuneration.
The White Paper sets out details of an improved package of occupational health support for reservists to underpin operational fitness. We will also ensure that effective welfare support is delivered to reservists and their families. Welfare officers are being recruited now for Army Reserve units. Additionally, we have already implemented measures to streamline and incentivise the process by which those leaving the Regular Forces can transfer to the volunteer reserve, with accelerated processing, passporting of medical and security clearances and retention of rank, as well as a signing-on bounty of £5,000 for ex-regulars and for direct entry officers joining the Army Reserve.
The support of employers is crucial to delivering the future Reserve Forces. We seek to strengthen Defence’s relationships with employers so that they are open and predictable. The White Paper sets out how we will make liability for call up more predictable; make it easier for them to claim the financial assistance that is already available; increase financial support for SMEs by introducing a £500 per month per reservist financial award to small and medium enterprises when their reservist employees are mobilised; and improve civilian-recognised training accreditation to help employers to benefit from reserve training and skills.
The White Paper signals a step change in Defence’s offer to employers. I urge them to take up this challenge. In turn, by building on the Armed Forces covenant with the introduction of the corporate covenant, we will ensure that reservist employers get the recognition they deserve. However, while Defence is fully committed to an open and collaborative relationship with employers, it is essential that the interests of reservists are protected. Dismissal of reservists on the grounds of their mobilised reserve service is already illegal. We will legislate in the forthcoming defence reform Bill to ensure access to employment tribunals in claims for unfair dismissal on grounds of reserve service without a qualifying employment period.
The job that we are asking our reservists to do is changing, and the way in which we organise and train them will also have to change. That will impact on both force structure, and basing laydown. The force structures and roles of the maritime and air reserves will remain broadly similar to now, although increased in size and capability. The Army, however, has had substantially to redesign its reserve component to ensure regular and reserve capabilities seamlessly complement each other in an integrated structure designed for the future role. That redesigned structure has been driven primarily by the changed function and roles of the Army Reserve and the need to reach critical mass for effective sub-unit training.
The details of the future Army Reserve structure are complex and beyond what could coherently be explained in an Oral Statement. I have therefore laid a Written Ministerial Statement, supported by detailed documents which have been placed in the Library of the House, showing the complete revised order of battle of the reserve component of Army 2020.
This restructuring will require changes to the current basing laydown of the Army Reserve. The TA currently operates from 334 individual sites around the United Kingdom, including a number of locations with small detachments of fewer than 30 personnel. Some of these sites are seriously under-recruited. To maximise the potential for future recruitment, the Army is determined that, as it translates its revised structure into a basing laydown, it should take the opportunity to rationalise its presence by merging small, poorly recruited sub-units into larger sites in the same conurbation or in neighbouring communities. As part of this exercise, the Army Reserve will open or reopen nine additional reserve sites.
However, the consolidation of all poorly recruited units would have led to a significant reduction in basing footprint and a significant loss of presence in some, particularly rural, areas. I have decided that that would not be appropriate as we embark on a major recruitment campaign. We will therefore retain a significant number of small and under-recruited sites that the Army considers could become viable through effective recruiting. The units on those sites will be challenged to recruit up to strength in the years ahead. Over the next couple of years, we will work with local communities, through the Army’s regional chain of command, to target recruitment into those units. I know that honourable and right honourable Members will want to lead their local communities in rising to this challenge.
The result of the decisions I am announcing today is that the overall number of Army Reserve bases will reduce from the current total of 334 to 308, a net reduction of 26 sites. With your permission, Mr Speaker, I am distributing a summary sheet which identifies the reserve locations being opened and those being vacated.
The White Paper and the WMS on structure and basing together set the conditions to grow and sustain our reserves as we invest an additional £1.8 billion over 10 years in our vision for the integrated reserves of Future Force 2020. That vision means an even bigger contribution from our reservists and from employers as we expand the Reserve Forces. I am confident that both will rise to the challenge.
For the first time in 20 years, the reserves are on an upward trajectory. Those of us who are neither reservists nor employers can none the less provide vital support and encouragement to our fellow citizens who make such a valuable contribution to delivering our national security, and I know that Members on all sides of the House will want to take the lead in urging our communities to get behind the reserves and the recruiting drive that will build their strength to the target level over the next five years. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Rosser
My Lords, I thank the Minister for repeating the Statement made earlier in the House of Commons by the Secretary of State. The Minister will be aware that the information on the hardly insignificant issue of the net reduction of 26 sites that will be lost was not available when the Secretary of State made his Statement. The Speaker in the Commons described that as “woefully inadequate” and reminded the Secretary of State that he was responsible for his department. The information on the sites is now available but will the Minister confirm that, in future, when the Secretary of State makes a Statement, he—the Secretary of State —will provide both it and the supporting documentation at the normally accepted time?
Before I go any further, I should say that we support an enhanced role for our Reserve Forces working alongside our regulars. We pay tribute to those who have served, particularly the 30 reservists who have died in the service of our country over the last 10 years and the much larger number who have been wounded. We welcome much of today’s announcement, not least those parts dealing with increased training alongside regulars, investment in equipment, the changed nature of Reserve Forces, improved occupational healthcare and welfare arrangements—including, presumably, for mental health problems—and the intentions to address the issues surrounding potential discrimination against members of our future Reserve Forces in their civilian employment.
We want the increase in the number of our reserves to be achieved, not least because the Government appear to be putting all their eggs in one basket on this issue; there appears to be no plan B. Today’s Statement and White Paper follow on from previous Statements and the consultation document Future Reserves 2020. In the foreword to that document, the Secretary of State said that it marked,
“a significant step forward in our plans to build the effective reserves our Armed Forces require to provide security for the Nation in future”.
The paper also said that our Reserve Forces,
“will be an integral and integrated element of our Armed Forces”,
will be,
“routinely involved in most military deployments”,
and that our Armed Forces will,
“increasingly rely on the Reserve Forces to achieve the full range of tasks set to Defence”.
On the basis of the Government’s own words, the reserves will not simply be complementing our Army; they will be plugging some of the gaps left by cuts to regular personnel. However, when I asked the Government two weeks ago for an assurance that the size of our Regular Army would not be reduced to the intended figure of 82,000 unless the strength of our Army Reserve had been increased to the intended trained strength of 30,000, the Minister said he could not give me such an undertaking.
The Strategic Defence and Security Review in 2010 addressed the issue of the commitments and planning assumptions that our future Armed Forces could be expected to carry out and the maximum level, extent and nature of operations they could be expected to undertake at any one time. Can those planning assumptions, set out in the SDSR in 2010 when there were 102,000 regulars in the Army, still be carried out with a Regular Army of 82,000 and an Army Reserve force of 30,000? Is the reduction in the size of our Regular Army to 82,000 dependent on our having increased the size of our trained Army Reserve to 30,000? If we need a Regular Army of 82,000 and an Army Reserve force of 30,000 to fulfil the maximum level, extent and nature of operations that we would expect our future Armed Forces to undertake at any one time, as set out in the 2010 SDSR, how can the Government allow the size of our Regular Army to fall to 82,000 unless there is, by then, a trained Army Reserve force of 30,000? If the reduction in the size of our Regular Army to 82,000 is not dependent on having first achieved an increase in the size of our trained Army Reserve to 30,000, that must surely mean that we will not have the manpower available that was assumed in the 2010 SDSR. Could the Minister confirm that this would mean less capability as a result and, if so, which capabilities would go or be reduced as a result?
The Statement has confirmed that the Government will be investing an additional £1.8 billion in the reserves over the next 10 years. How will that be divided between buildings, equipment, recruitment—including financial incentives—and pay? Will a trained Army reservist be regarded as having the same level of skills, expertise and experience as a comparable member of the Regular Army?
Some concerns have been expressed about the likelihood of increasing the number in our Reserve Forces to the required level. How is recruitment to our reserves currently going against targets? What was the situation in that regard last year? As for recruitment to the reserves, will new recruits be committed to staying in the reserves for a minimum or any other specific period of time? Will those receiving the taxable bonus of £5,000, to which I think reference was made in the Statement, be required to stay for a minimum period of time? What assumptions have been made about turnover in the reserves in future? How many people has it been assumed will need to be recruited into the reserves each year to sustain the greatly increased numbers in our Reserve Forces, including 30,000 in the Army Reserve?
How easy or otherwise it proves to increase the size of our reserve forces remains to be seen. A recent Federation of Small Businesses survey found that one in three employers believed that nothing would encourage them to employ a reservist, despite the fact that service experience provides people with organisational, team-building and leadership skills. It is of course possible that the financial incentives for SMEs announced in the Statement may change that position.
I reiterate our support for the enhanced role of our Reserve Forces. The move will also provide the opportunity to help to ensure that we can maximise niche civilian skills in a military setting, not least in the fields of cybersecurity and languages. It is also essential that those who want to volunteer to serve their country are protected in the workplace and do not suffer discrimination. That may not always be easy to achieve, since discrimination against someone who is not there the whole time can sometimes be very difficult to prove. I look to the Government to put particular emphasis on that point in the legislation and regulations that will follow.
We hope that the required increase in our Reserve Forces is achieved. The potential consequences for the defence and protection of our nation could be very serious if it is not.
Lord Astor of Hever
My Lords, I thank the noble Lord for his general support for what we are doing. I share his and the Opposition’s aspiration to strengthen the reserves in a very bipartisan way. The noble Lord asked me about the Commons Statement. The Secretary of State said that he would investigate and write to the right honourable shadow Secretary of State. When I have more information, I will pass it on to the noble Lord. I myself have ensured that all the necessary paperwork was distributed in the Peers’ Lobby and the Prince’s Chamber during the first Question, and I hope that noble Lords have got their hands on everything. If they have not and we have run out of copies, I have some spare copies.
There is one correction that I need to point out: in the information that I have handed out, I have been advised that there is an inconsistency over Kilmarnock. There is no change in the end result for the figure of 46 sites for Scotland, but Kilmarnock should have been scored as a new site rather than as an existing one. That is therefore good news regarding occupation.
The reserves are an essential component of our national security, our future forces and success on operations. In future, their contribution to our defence capability will increase and the reserves will become an integrated part of the whole force.
I turn to the noble Lord’s questions. First, he mentioned plan B. I am confident that we can deliver on that, and I will come to that in a short while when I address another of his questions. His second question concerned whether the reductions in the Regular Forces made them more dependent on the reserves and the commitment that I was not able to give the noble Lord the other day. I still cannot give that commitment. We are aware that there are risks in this, but we are confident. Recruiting is going well and the historical figures are on our side. When I was in the Army—a long time ago, admittedly—the reserves numbered 100,000, with a much smaller population, and we had half the strength of the present reserves in 1990. Other countries, such as the United States, Australia and Canada, have a much higher percentage of reserves. We are investing £1.8 billion over 10 years and, as the Statement said, we are investing £40 million this year. We are confident that the reinvigorated reserves will deliver the quality and number of reservists that we will require in future, both in training and on operations.
Employers play a key role in enabling the reserves to deliver their essential contribution to defending the nation’s security. This future relationship may need some incentives, which could include a cross-government commitment to support employers who encourage volunteering. The public sector will take the lead in setting the example.
The noble Lord asked how the £1.8 billion will be divided. We review our allocation on a continuous basis, to maximise value for money from the available resources to meet the needs of the Reserve Forces. He also asked if a trained reservist would have the same level of skills as a regular. When reservists deploy to operations, they will be equally as skilled in their specialist roles as a regular they serve alongside. The noble Lord asked how recruitment was going. All the indications that I have heard indicate that it is going very well and we believe that the announcement will have a positive effect on Army Reserve recruiting.
Our Reserve Forces have always attracted highly motivated individuals, and the assurance that the reserves will play a more routine and assured role within the whole force concept will act to broaden the appeal and encourage those looking for such an opportunity and their employers. The noble Lord asked about the commitment that a reservist must give and whether there is a minimum time. Every service person enlists for an agreed period of service. As we are a voluntary force, we recognise that individuals can exercise choice to remain or leave. Measures announced in the White Paper should further encourage retention.
As for turnover, I can confirm that retention of reservists, particularly in the Army, is on average much better than that of their regular counterparts. The noble Lord then asked me about employers. The Ministry of Defence is committed to working with employers to understand their views on its use of reservists and the impact of legislation, to understand better what an employer can realistically sustain in future. The Ministry of Defence understands the importance of engaging with employers and potential employers and, in addition of engaging with employer groups such as the CBI and FSB through the chain of command, the National Employer Advisory Board, SaBRE and the Reserve Forces’ and Cadets’ Association.
Finally, the noble Lord asked about the legal situation relating to employment tribunals. An individual cannot generally bring a claim for unfair dismissal at an employment tribunal until he or she has completed two years of continuous service with an employer. Periods of mobilisation do not count towards continuous service; therefore, it can take reservists longer than two years to gain this protection. I think that covers all the noble Lord’s questions, but if I have missed anything I will write to him.
Lord Palmer of Childs Hill
My Lords, I thank my noble friend for the Statement that he has repeated. From these Benches we associate ourselves with saluting the sacrifice made by our reservists. To meet the challenge of significantly increasing the numbers in our Reserve Forces we need to foster the belief that employers, employees and the nation all benefit from reserve service. Will the Minister say whether medically trained reservists will be able to bring skills to the military and develop additional skills to bring back to their UK employers? Will he also tell the House how employers and employees are to be convinced that there are benefits to the employer and the employee from improved skills and experience while serving, which might outweigh the temporary loss of civilian work time? Finally, will he say whether consultation with employers—which he mentioned previously—have uncovered signs of corporate social responsibility by allowing or even encouraging participation in the reserves?
Lord Astor of Hever
My Lords, in answer to the first part of the noble Lord’s question, medical reservists develop additional valuable specialist skills when they are deployed, which they then bring back to the National Health Service. The Defence Medical Services is uniquely placed to share the development of operationally specific medical science and clinical excellence with the NHS. The National Institute for Health Research centre has brought together military and civilian trauma surgeons and scientists to share innovation in medical research, to advance clinical practice on the battlefield and to benefit all trauma patients in the National Health Service at an early stage of injury.
On the benefits to an employer who recruits an employee who is a reservist, I would say that reserve service will benefit different employers in different ways. For some, the improved skills, experience and training of the individual reservist will be beneficial. For others, where the reservist’s military role is close to their civilian one, there will be more benefit from transferable skills. For some companies and sectors, reserve service suits and supports their business models. For many, reserve service may support corporate social responsibility objectives and may be part of their social action plans, alongside wider volunteering policies. We encourage employers to publicise their support for the Reserve Forces to customers, suppliers and their local communities. The second part of my answer was in response to my noble friend’s third question.
Lord Craig of Radley
My Lords, the Government say in the White Paper that they will introduce new legislation to enable mobilisation for the full range of tasks that our Armed Forces may be asked to undertake. Current mobilisation arrangements are something of a historical anachronism. Invariably they require ministerial authority. They date from a time when protection for employers was nothing like as good as it will be in future. Will there be arrangements to allow mobilisation of individuals for very small units to be carried out without having to seek ministerial authority?
Lord Astor of Hever
My Lords, I cannot from the Dispatch Box answer the noble and gallant Lord’s question. That point is not in my briefing, but I will write to him.
Lord Freeman
My Lords, as a former president for 10 years of the Reserve Forces Association, I warmly welcome this Statement. I would be grateful if the Minister would confirm two key principles. First, we should maintain the footprint of the Reserve Forces—and the Armed Forces—around the country. I am very pleased that there are no dramatic plans to reduce their number. Secondly, will the Minister confirm that the support of employers, and in particular of small employers, is crucial to maintaining support for the Reserve Forces?
Lord Astor of Hever
My Lords, I can confirm both points. We consider the footprint absolutely vital. Where we have had to close places it is because there has been a very small uptake in recruitment. We have managed to close fewer than we planned. I agree with my noble friend’s point about employers, and in particular small companies. In finishing, I pay tribute to my noble friend for the important work that he did.
Lord Davies of Stamford
The noble Lord was characteristically thorough and conscientious in informing the House and in answering my noble friend’s questions. However, I think that he left out one point. Will the £5,000 joining-up bonus be repayable if the officer does not do a minimum amount of service? I would be interested in the answer to that. I think that it will be quite a challenge to get to 35,000 but an ever greater challenge to get to a point where the reservists are on the same footing as the regulars and do not suffer a higher rate of casualties on active deployment. In that context, it is very important that we should put everything behind them in terms of equipment and training, and the noble Lord gave us some assurances on that point. Equally valuable is the promise by the Government to strengthen the defence of reservists against dismissal. However, would it not be a good idea for the Government to go further and to protect reservists not just against the danger of unfair dismissal but against discrimination in terms of remuneration or promotion? The American national guard has that kind of protection. Surely it is very important that reservists, or those who are planning to join the reserves, are confident that they will not suffer discrimination of that kind in the job market.
Lord Astor of Hever
My Lords, as regards the noble Lord’s first question about the £5,000, I do not change my answer. The reservists who join up are free to leave whenever they want. We are very confident that those regulars who become reservists will stay and will not leave the minute they get their money. We are also very confident that by 2018 we will get up to the figures that we need. I have spent a lot of time being briefed and our recruiting figures are going better than we expected. Noble Lords will see in the White Paper all the inducements that we are giving to the reservists and their families, and the encouragement that we are giving to employers. We realise that we have to work much more closely with employers than has happened in the past and we will endeavour to do that.
Lord Burnett
Will my noble friend confirm to the House that no closures of Royal Naval Reserve and Royal Marines Reserve units are planned? I should remind the House that Corporal Croucher, a Royal Marine reservist, was awarded the George Cross while serving in Afghanistan, and Corporal Seth Stephens, a Special Boat Service reservist who was killed in action in Afghanistan, was posthumously awarded the Conspicuous Gallantry Cross. These two outstanding and brave men had both served for many years as regular Royal Marines. What encouragement are the Government going to give retiring members of the Regular Forces to join the reserves? Regular members of the Armed Forces have so much to offer the reserves. They have a high level of training and expertise and are fully aware of the demands that will be made of them.
Lord Astor of Hever
My Lords, I can confirm my noble friend’s first point. No Royal Naval Reserve or Royal Marines Reserve units are closing as a result of FR20. As part of a wider betterment programme, three units will relocate to new accommodation, often in more populated areas. In some instances, the final decision on where the new locations will be is yet to be made, but the distance that current reserves will be expected to travel to attend their new location is likely to be less than 12 miles.
Regarding my noble friend’s question about regular redundees joining the reserves, the reserves have always benefited from the experience brought by ex-regulars, and some capabilities have relied heavily on their skills owing to the time that it takes to train on advanced equipment. Those who leave the Army through redundancy are being encouraged to consider a part-time military career in the reserves. For the Army, ex-regulars who enlist in the Army Reserve within three years of leaving regular service can enjoy a number of incentives and benefits, such as the reduced Army Reserve commitment and training requirement or, alternatively, a commitment bonus worth £5,000 paid over four years. That partly answers the noble Lord’s question. There is a comprehensive information campaign to ensure that all service leavers, and not just redundees, are aware of the opportunities and benefits of joining the reserves.
Lord Kilclooney
My Lords, can the Minister confirm that, pro rata, recruitment to the reserves in Northern Ireland in recent years has been greater than that in England, Scotland or Wales?
Lord Astor of Hever
My Lords, I can confirm that to the noble Lord. That point came up in the Statement in the other place and it is absolutely true.
Lord Clark of Windermere
My Lords, I thank the Minister for his Statement and wish him and his colleagues every success in achieving this plan for the Reserve Forces. As the Minister knows, in the past I have asked him a number of questions about the Defence Medical Services and I see from the White Paper that 38% of the DMS is currently reservists. What percentage of the DMS does he envisage will be reservists in the future and will there be some medical competences within the DMS which will be entirely dependent on reservists?
Lord Astor of Hever
My Lords, I thank the noble Lord for his support. He is absolutely right that the figure is 38%. I have seen the hugely valuable work that they do in Camp Bastion. Both the Armed Forces and the National Health Service benefit from the work that is going on and we will need these medical people in the future. I cannot give a specific percentage figure but I can assure the noble Lord how vital these people will be to us.
Lord Stirrup
My Lords, the Written Ministerial Statement rightly makes reference to the potential implications that the basing changes may have on cadet force units where these are collated with reservist units. I welcome the statement that alternative accommodation will be pursued in such cases but, of course, “pursue” is a slightly slippery word and does not quite imply the same as “achieve”. Will the Minister undertake to keep a very close eye on this to ensure that the changes being made with regard to the Reserve Forces cause no harm to what is widely acknowledged to be the finest youth institution in the land?
Lord Astor of Hever
My Lords, I can give the noble and gallant Lord that assurance. We take the cadets very seriously. In the few cases where a unit closes, mostly the cadets will remain in the building but on a very few occasions they will be moved very nearby. I have been a patron of sea cadets and I have first-hand knowledge of the important work that they do.
Lord Trefgarne
My Lords, can my noble friend say a little more about the integration of the newly enhanced Reserve Forces with the Regular Forces, which will be crucial to the effective transfer to which he referred?
Lord Astor of Hever
My Lords, my noble friend is absolutely right. Army Reserve units will be paired with regular units in peacetime for training and force generation, enabling combined training and helping to build links with the local community, including employers, to aid recruitment and resettlement of service leavers. Reserve units in all three services may be integrated with regular units for mission rehearsals and for operations. We will ensure that our use of reserves is as predictable as possible to help reservists, their families and particularly employers to plan ahead. Specific levels of attendance will become a compulsory part of the proposition and the majority of reservists can expect a maximum of 12-months mobilised service in a five-year period. Whether it is needed will obviously depend on operational requirement.
Lord Glenarthur
My Lords, I very much welcome the Statement. It is certainly extremely comprehensive. From what one can see from a first glance at the White Paper, it fulfils many of the aspirations which those of us who commented on the Green Paper felt were necessary. However, I should like to ask my noble friend about the national relationship management scheme. I suggest that, in any adaptation of the current relationships that exist, the process should be evolutionary rather than revolutionary. Having been involved in it for several years as chairman of the National Employer Advisory Board, the mechanisms that have existed for the past 12 to 15 years have proved to be extraordinarily effective. For example, the branding of SaBRE is such that it is understood throughout the country. I hope that my noble friend will ensure that this can be built on rather than something totally new created which is more likely to confuse than to help.
Lord Astor of Hever
My Lords, I thank my noble friend for his support. I also pay tribute to him for the important work that he has done for the reserves over many years. My noble friend made some very important points. I will take them on board and take them back to my department.
Lord Lee of Trafford
My Lords, in terms of the importance of enthusing and recognising employers, rather on the lines of the Queen’s Awards for Enterprise, and given the military service of Prince William and Prince Harry, would it be possible to consider something like the Princes’ Reserve Forces Award, which would combine employer participation, national interest and royal recognition?
Lord Astor of Hever
My Lords, we are looking at this area very closely. As I said, we take the relationship with the employers very seriously, and this is one of the ideas under consideration.
Lord Mayhew of Twysden
My Lords, will my noble friend come back to the question of retention? If the reserve units are to be fully integrated into the Regular Forces, does it not follow that if their members do not step up to the plate when called on to do so, the Regular Forces concerned will be deficient in their capability? Can he think a little further as to whether what he says he has great confidence in ought not to be toughened up with something more enforceable?
Lord Astor of Hever
My Lords, I repeat that I am confident. As I understand it, retention in the reserves, particularly the Army reserves, is very much higher than in the regulars. I do not have the figures in front of me, but I was told before I came into the Chamber that retention in the reserves is considerably higher than in the regulars. I can write to my noble and learned friend with the figures.
Viscount Slim
My Lords, the noble Lord is aware that the business community has culled and fined its companies in the matter of strength and management to get through this very difficult economic stage. As a number of noble Lords have mentioned, some sort of reward is essential for those companies which are taking part. I will say a little more bluntly that perhaps some tax benefit or some exemption from certain company taxes should be given to companies which fulfil the deal. Giving away one chap today in a company, particularly in a small to medium-sized company, is a considerable sacrifice, and I believe that Her Majesty’s Government have not fully thought through the rewards for the business community.
Lord Astor of Hever
My Lords, I can assure the noble Viscount that nothing is off the table. We are open to any suggestions. As for his proposal for a tax benefit, I will run it by the Treasury. It is certainly a very good suggestion. We seek an open relationship with employers tailored to meet the needs of different sizes and types of employers, based on mutual benefit. That will include working together to credit the skills and the training that reservists gain during service with recognised civilian qualifications, and the area that the noble Viscount mentioned.
Finance Bill
Care Bill [HL]
(11 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Pitkeathley
Baroness Pitkeathley
My Lords, in the unavoidable absence of my noble friend Lord Warner, I shall move Amendment 74 and speak also to Amendment 75.
These two amendments give an opportunity to put into the Bill further emphasis on the importance of integration. Amendment 74 requires reviews by CQC of regulated health providers to cover the integration of those services with other relevant services. Amendment 75 does the same for reviews of local authority adult social care services. They are a clear reminder in the Bill that when CQC carries out such reviews it will have to pay attention to the issue of integration of services for the benefit of patients and service users.
I shall not detain the Committee today with yet another speech of a kind that I have made many times before on the importance of integration of health and social care services from the point of view of patients, service users and their carers. We all know how important that is. The Committee is familiar with the arguments and, more importantly, so is the Minister. Indeed, the Chancellor of the Exchequer, no less, acknowledged this in his announcement in the comprehensive spending review in regard to joint budgets. The announcement has been widely welcomed, although caution has been expressed about how these budgets will operate in practice.
The amendments are a modest attempt to give some practical effect to the aspiration for integration which we all share. I hope the Minister will say that it is a good idea, “Let’s do it”, and get us off to a cracking start this afternoon. I beg to move.
Lord Hunt of Kings Heath
My Lords, I declare an interest as a chair of a NHS foundation trust and as a consultant and trainer with Cumberlege Connections. I am happy to support my noble friend Lady Pitkeathley’s Amendments 74 and 75, which rightfully push the CQC into the direction of integration of services. I also sympathise with the amendments of the noble Baroness, Lady Greengross, Amendments 76ZZA and 76ZAA, to which she will speak later.
My Amendments 74A, 76ZA and 76ZB and my opposition to Clause 80 stand part go to the core of the purpose of CQC and its approach to performance assessment in health and social care. Inevitably, recent events at that regulator in relation to Morecambe Bay and before that at Mid Staffordshire will readily come to mind. There can be no doubt that the current leadership of CQC faces a major challenge in changing the culture of the organisation and its approach to inspections. It has much to do to restore both public confidence and confidence within the NHS about the way in which it operates. That is why this clause is so important.
Clause 80 substitutes Section 46 of the 2008 Act and provides that the CQC’s duty to conduct periodic reviews, assess performance and publish reports of such assessments, which are henceforth to be known as “ratings”, is to apply in respect of any regulated activities and any registered service providers as may be prescribed in regulations. In addition, where regulations so provide, the CQC must also review and assess the performance of the provision and commissioning of adult social services by English local authorities. CQC is to be given responsibility for determining the quality indicators against which services and providers will be assessed. This may include measures of financial performance and governance if the CQC deems this appropriate. Different quality indicators, methods and frequency in periods may be used for different types of cases. The CQC may also review the indicators of quality and method statement from time to time as it sees fit.
Let me say at once that I support the broad intention of these clauses to make the CQC responsible for rating providers and local authorities. I say again that one should not underestimate the task. It is important that the CQC is not put under undue pressure to rush to change the way that it operates and to introduce new ratings without proper pilots being done and without having enough time to do it.
I refer the noble Earl to the Nuffield Trust’s work. As he knows, the Nuffield Trust was commissioned to carry out a review for the Secretary of State into the possibility of rating providers of health and social care. It argued that the new ratings must be given adequate time to work together with a range of stakeholders in developing a system which enables both patient choice and professional leadership to drive up standards of quality. That is vital. Yet I am concerned by the document issued by the CQC recently that indicates that it is to start inspecting and regulating NHS acute hospitals, in the ways that it set out in that document, from October 2013. Indeed, from December 2013, it will begin to rate NHS acute trusts and NHS foundation acute trusts, aiming to complete them before the end of 2015.
Have Ministers put pressure on the CQC around the timing of those ratings? Secondly, does the noble Earl not think that there is a risk that the CQC will be forced to rush into a new system without proper consideration? I remind him that the chairman of the CQC has recently made a number of statements. First, he has said that the approach to inspections by the previous leadership was wrong; it was wrong to go for generalist inspections. He also says that the culture of the organisation was wrong. Given that there are about 1,000 people employed by the CQC, although I am not absolutely certain, how on earth is the culture going to change in a short period of three or four months? I just do not think it is going to happen.
I have great admiration for the current leadership of CQC, but the risk is that it is going to be forced into a new system too quickly and it could fall over. As a result, its credibility will be very much damaged. Let us face it; it is almost starting from a negative position. I must confess that I am surprised that such an ambitious timetable has been set.
Who will be assessed? As I have already intimated, the clause provides for the Secretary of State to draw up regulations laying out exactly which services the CQC will rate. They are likely to be hospitals, GP practices, care homes, domiciliary care services across both the public and privates sectors and local authorities. Will the noble Earl confirm that? Will he say why this is not specified in the Bill? Does he not consider it important enough for Parliament to decide which bodies should be assessed, and to do so in primary legislation rather than through regulations?
I asked at Second Reading whether clinical commissioning groups are to be assessed. If not, why not? The Bill allows for local authorities to be assessed for their performance in the commissioning of adult social services, so I cannot really see why NHS commissioners—the CCGs—should not be similarly covered. The same logic then applies to NHS England which, after all, has been given a massive commissioning budget in relation to specialist services. If it is appropriate for local authorities to be assessed for their commissioning responsibility, surely all health commissioners should be similarly assessed. That must apply to NHS England because otherwise I do not see who will hold it to account for the mammoth amount of resources it will spend on commissioning specialist services.
I am particularly interested in local authority assessment, particularly in the way that services are commissioned. Can the noble Earl tell me whether this is intended to be a priority for the CQC? He will know that there is real concern about the practices of many private sector providers in social care in using zero-hour contracts and allocating only 15 minutes with each client. It is vital for the CQC to be able to investigate the way in which local authorities commission those services. We will come to this in Clause 5 but it would be very useful if the noble Earl could confirm that the commissioning responsibilities of local authorities will be a priority for the CQC.
Baroness Greengross
My Lords, I shall speak to Amendments 76ZZA and 76ZAA in my name. I thank the noble Lord, Lord Hunt, for the support he expressed earlier. On Amendment 76ZZA, we know that one of the major problems identified in the Francis report was the inadequate handling of complaints and concerns. This issue has not been addressed in the Care Bill. My amendment would enable the Care Quality Commission to introduce more rigorous complaint systems across all care settings. I hope the Minister will consider this because it is very important to get this right now. This is about the way in which a registered service provider or a local authority will handle complaints and concerns, and it is very important.
Amendment 76ZAA is about continence care. I declare an interest as chair of the all-party parliamentary group on this subject. It is hardly spoken about, but it is terribly important; people just do not recognise how many people have some problem with continence. The NHS services should have continence care as an essential indicator of service quality. It therefore needs to be established as an essential indicator of high-quality services across the NHS and care settings within the periodic assessments of care standards undertaken by the CQC.
A number of recent assessments have demonstrated that continence care is still a low priority across NHS settings, with poor treatment resulting in escalated and more costly care needs and poorer patient outcomes. This is in spite of the fact that good bladder and bowel control are fundamental to people’s dignity and independence and that NICE has published a wealth of best practice recommendations to effectively assess and treat the condition. The Francis report included an entire chapter outlining the scale of failures in continence care. Given the expected rise in prevalence of incontinence and the impact that poor care can have on patients and the NHS, continence care must be seen as a key indicator of high-quality provision across care settings. An explicit requirement within the Care Bill for the CQC to assess providers for the quality of their continence care would directly respond to the failings in this field which the Francis report identified—the stated purpose behind Part 2 of the Bill. That would encourage providers actively to address how they manage incontinence by assessing their local protocols and policies about the condition, taking steps to improve awareness among staff about incontinence and undertaking internal audits in order continuously to improve care standards.
Lord Sutherland of Houndwood
My Lords, I wish to register my support for the proposals in some of these amendments. The integration of services should always be highlighted. We have a long way to go and, since we are not providing an integrated budget, every encouragement short of that should be given, so I support the amendments that propose this.
The amendments and stand-part question in the name of the noble Lord, Lord Hunt, have to do with the standing of the CQC. CQC has been through a very rough patch, and to some extent, responsibility lies as much here as elsewhere. I remember the debates a number of years ago, when we changed the structure of the regulation that should be provided in this area three or four times within four or five years and always handed the ball on to a new organisation that we thought would solve all the problems. We failed consistently to answer the question: what are the signs that the new organisation will succeed in all the tasks being given to it? We now see that there have been difficulties. Moving with a degree of caution has a great deal to commend it, and I look forward to the Minister’s response to the questions raised by the noble Lord, Lord Hunt.
The rhetoric around the comments of politicians, those in health regulation and the press continually refers to Ofsted and Ofsted-style inspections. I declare an interest, in that I had something to do with founding Ofsted and the type of inspections that in due course developed. Ofsted is a rather a different beast, and these comparisons do not help. For example, the chief inspector is independent of the control of the department, which seems not to be the case in the plans for the future. That means that the relationships with the Minister and Secretary of State will have to be very carefully managed. I am not sure that sufficient thought has been given to that. That is part of the case for asking whether Clause 80 should stand part of the Bill.
The other pressures being put on CQC have to do with financial assessment. These are additional responsibilities for which CQC is hardly prepared. There is a need for specialist staff and specialist abilities to decide whether companies providing care at all levels have the ability to continue sustainably to do that—but that does not, as we have seen in other forms of financial regulation, come easily to regulatory bodies. This has to be looked at very carefully, along with the pace at which change is introduced into the practices of CQC, which is under, we hope and expect, good new management.
Lord Campbell-Savours
My Lords, the need for the specialist staff referred to by the noble Lord clearly lies behind the tabling of Amendment 76ZB. It is precisely why we need to pilot the proposed system.
My noble friend on the Front Bench referred to the system being created as a new system. We were told that we were going to get a new system in 2009. I sat on the third Bench behind my noble friend—the noble Earl was on the Front Bench on this side—and pointed consistently to the deficiencies in the system while it operated under CSCI and the inevitability of further problems arising under the new structure that was being created. Indeed that is precisely what has happened.
It seems to me that it can only get worse. The report of the Select Committee on Public Service and Demographic Change sets out the scale of the problem that confronts us in future. It prays in aid the Office for National Statistics updating its projections up to 2021 based on a recent release of data from the 2011 census on the ageing population. It says that, by 2021:
“There will be 24% more people aged 65 and over”,
and,
“39% more people aged 85 and over”.
It goes on to say that by 2030 there will be,
“will be 51% more people aged 65 and over”,
and that the population over 85 will have doubled. This means, to put it bluntly, that a lot more people will go into a lot more nursing homes throughout the country. Therefore, we have an absolute responsibility to make sure that the structure that we establish on this occasion is fit for purpose.
At the moment, I understand that there are 2,400 nursing homes catering for approximately 220,000 residents. That is going to increase, and I am still not convinced that the structure that this new so-called CQC is to set in place will be fit for purpose for taking on that task. Nor has the structure been defined in the legislation, as my noble friend has referred to. When I say fit for purpose I am reminded of the comments made by the noble Earl when we met on the last occasion to discuss this Bill, when he talked of a new broom at the CQC. As I understand it, it is not a new broom but an old broom with a new handle, because the person who is now running the operation is in fact the same person, I am told—and the information is available on the internet for anyone to read—who was responsible for the structure, which we are now debating, which has failed miserably over the past four years and is the subject of the complaint.
Mr David Behan, who runs the new operation, prior to his current appointment at the Care Quality Commission, was director-general of Social Care, Local Government and Care Partnerships at the Department of Health. As the director-general—and I read these words very carefully, because I do not want in any way to misrepresent the position—he had lead responsibility for the social care aspects of the Health and Social Care Act 2008, which created the CQC, the very organisation that we are having to review today because of its total failure and the scandals that have been drawn to our attention in the national media over recent years. I understand that he should have been aware of the Act’s requirements for the CQC to perform its functions for the general purpose of encouraging the improvement of health in social care services. This failure is implied in the Department of Health capability review, which in effect admits that the Department of Health was not sufficiently challenging and strategic in the way it supported the CQC.
David Behan is not new to social care regulation. Before taking up his appointment at the Department of Health, he was chief inspector of social services at the Commission for Social Care Inspection—CSCI—the organisation that we criticised in 2009 when the Act was going through on the basis of its failure in this particular area. I remember Ministers going to the Dispatch Box—Labour Ministers, yes—reading briefs produced by civil servants, in which they repeatedly assured us, as they did in personal correspondence to us, that the new structure that was going to be set up would work. It has not worked. It has been a complete and utter disaster area, which is why we are now faced with problems in this particular area that are reflected almost daily in the national press.
There is a very reputable organisation called the Relatives & Residents Association. Before anyone seeks to discredit its operations, it is worth pointing out that it is quoted in the most recent report by the House of Commons Health Select Committee. Its comments are prayed in aid in the committee’s criticism of the CQC. On 18 May 2009, in a letter to me following my criticism in the House, it affirmed its view. Four years ago, it said:
“we are concerned that … inspectors judge homes as delivering an adequate standard of care even when they are failing to meet national minimum standards for care homes”.
We were assured that that was going to be stopped. It has not been stopped under the structure that was established. The letter continued:
“the overall number of inspections of care homes has reduced. Homes that are failing to meet minimum standards are now inspected less often than used to be the case”.
We know that over the past 10 years, there has been a steady decline in the inspection of care homes nationally. We were told when the Act was passed in 2009 that it was going to be a risk-based system with a minimum of one inspection every three years. We know what a disaster that has been. We need an absolute minimum of unannounced inspections of care homes of at least twice per year, irrespective of the grading and irrespective of the ratings that have been applied to a particular home, because we all know that the management of a home can change over months, weeks or even overnight, and the home may drop in ratings dramatically as standards of care fall, depending on the financial considerations of the management of those homes.
The 2009 letter to me, four years before we stand here now, continued:
“requirements made by inspectors for action to improve care homes are often not met, there is little evidence of systematic follow-up by inspectors and requirements left unmet from one inspection to the next are common”.
That has happened over and over again over the past four years, and I am convinced that it will carry on happening until we set clear targets and a requirement of two unannounced inspections annually with a proper rating system, which is precisely why I support the amendment tabled by the noble Baroness, Lady Greengross, on the need for a pilot system for inspections.
I would now like to place on record the latest views expressed by the Relatives & Residents Association about what it believes the new structure should be. I do so because I understand that under the provisions of the Bill, the CQC will itself, following consultation with Ministers and others where necessary, be taking decisions on those very important areas. What does the Relatives & Residents Association say? I think that what it says should be implemented. It calls for the,
“reinstatement of regular twice-yearly inspections of all care homes to ensure compliance with regulations and standards. This case and others show that CQC needs to listen, record and act quickly on complaints which show older people are not receiving”,
the quality of care they should receive.
I add at that point that we are talking about complaints. I could never understand why we established the CQC without a proper complaints remit. According to the Relatives & Residents Association, people ring up to complain about the fact that the CQC is not dealing with complaints. The CQC says, “We do not deal with them, you have to go to the local authority”. The structure is wrong. The CQC should be the body that deals with those matters and should be given that responsibility. The association calls for investment and more and better training of all care home staff, with vastly improved training in leadership skills of care home managers and operators and up-to-date inspection reports which are easy to understand, with any action required by the provider clearly highlighted. It also wants to see:
“Care homes focusing on individual care rather than putting pressure on staff to complete daily tasks such as dressing and feeding.
Statutory registration of all care workers”—
a matter that we were dealing with on the last occasion we met as a Committee—
“by a professional body which can set standards for competence and hold individual care workers to account for their own practice.
The reinstatement of specific standards for care homes for older people”.
That might seem a particularly substantial agenda. However, if the Select Committee’s views on the ageing population are true and there is going to be a vast expansion of the care business in the future, more and more homes will have to open to deal with that increased population. We should be setting in place in this Bill a structure that is capable of dealing with that expansion in care. If we do not, we will be back here again in five years’ time arguing about a deficiency in the system. If I am still alive, I will be on my feet again complaining about the fact that the Bill we introduced in 2013 miserably failed. That is the route that the Government have set out to go down. Unless they make the resources available to address this, the CQC will inevitably fail again.
Baroness Howarth of Breckland
My Lords, I had not intended to speak in this debate and will do so briefly. We need to allow the CQC time to settle down under its new management. We should also remind ourselves of the rest of the history, because it is important to put it in context.
I was the deputy chair of the National Care Standards Commission, the first organisation that brought together the inspectorates for homes under the previous Government. It was also the previous Government who, after two years, made the decision concerning the organisation—which had been quite successful. It had established a baseline of inspection. It had integrated the inspectorates, which several other organisations which had tried to integrate the different teams had failed to do. Like other noble Lords, I would also cite CAFCASS in that regard. The commission did all of that. We should remind ourselves that it was only a year later that the previous Government announced through a newspaper, not directly to the staff, that the organisation would be merged with CSCI.
The merger took place and I think that it was extremely successful. David Behan was involved in ensuring that it went well. CSCI then took on the starring system which was put into place and was having some success. By that time, we had closed 400 poor establishments. The work was continuing in terms of co-operation when it was again decided that there should be a restructuring, this time to bring the inspectorate into health.
I think that we have two lessons to learn. The first is not to restructure yet again on a political basis. If there is good leadership and the lessons have been learnt, let the organisation settle down. The second lesson is clear. If you are going to inspect anything, you need to have the expertise within the teams to carry out the inspections. Again under the previous Government, it was a sort of theory that if you had somebody other than a nurse looking at nursing, a social worker looking at a social work establishment or a teacher looking at teaching—indeed, you usually did have teachers looking at teaching; that always seemed to be an exclusion—then you could get a better answer than if you had a professional do it.
I think that the present leadership at the CQC has learnt that lesson and understands that you need the professional expertise to know what you are looking for, although that should certainly be cross-checked by independents. I hope deeply that we will be able to keep that steadiness, because I understand absolutely what happens to organisations when they are in constant flux and change.
Perhaps I may make one other point while I am on my feet. I support anything that we can do about integration. We have singularly failed to reach some complex conclusions about how health and social care can truly be put together for the benefit of those who are the recipients of that care. We should ensure that we put into the Bill whatever we can about integration. I would support all of that.
Baroness Eaton
I endorse what the noble Baroness, Lady Howarth, has just said because I am firmly of the belief that it will take time to find all the appropriate people for the move which the CQC has clearly said it would make, from generic to specialist inspectors. I am sure that this will make a huge difference to the outcomes of inspections. I, too, think that we should give this organisation time. From what I have seen, it has the drive and the initiative to make sure that things improve enormously.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, this has been a very useful debate and in addressing this group of amendments, it might be helpful if I began by setting out why we believe this clause is necessary.
At the moment, there is no straightforward way for members of the public to get a clear view of performance in hospitals and care homes, nor is there a measure to help drive up performance, so we believe that a new system is needed to give patients and the public a fair, balanced and easy to understand assessment of the quality of care provided. Clear ratings on performance will help to incentivise providers to improve their services, as they will be able to see how well they are doing. One of the central principles behind this clause is that it will enable the CQC to develop the new performance assessment system—informed by the views of stakeholders, of course, but nevertheless independent of government. In its report into ratings, the Nuffield Trust said:
“While there is a legitimate role for … government … to influence priorities, the process should largely be sector-led including the public and users”.
I am rather pleased that we did not debate this group of amendments on the previous Committee day because the CQC has, in the mean time, published a consultation on changes to the way in which it regulates, inspects and monitors care. I draw that to the attention in particular of the noble Lord, Lord Campbell-Savours, whose points I will address in a moment. This consultation, A New Start, sets out the commission’s initial thinking on the timetable for implementing ratings. The consultation document also sets out some detailed thoughts on how the CQC will rate NHS acute hospitals. I take the point made by the noble Lord, Lord Sutherland: this rating process will have to have some fundamental differences from that followed by Ofsted. However, the ratings will be based primarily on inspection judgments. They will be informed by a series of indicators, using data already available and the findings of other bodies such as those from accreditation schemes, clinical peer review and the judgments of other regulators. The CQC will be consulting on this model more fully later this year.
Noble Lords have raised concerns about the ability of a rating system to reflect the complexity of NHS acute hospitals. I assure the Committee that both the CQC and the Government are fully alive to this risk. The CQC is committed to producing ratings at a level which recognises the complexity of NHS services and is useful to people who use them, as well as those who commission NHS care. It is therefore proposing to provide ratings for certain individual services, such as emergency and maternity services, as well as for each hospital.
A rating will also be provided against each of the CQC’s key questions. They are: is the service safe? Is it effective? Is it caring? Is it responsive to people’s needs, and is it well led? This will mean that where the evidence is available, a trust would have five ratings at three different levels—for the individual service level, for the hospital site and for the whole trust. I am sure that noble Lords will agree that this is an ambitious aim, and one that seeks to reflect the complexity of the organisations that provide care.
The Government will draw up regulations that will enable the CQC to develop the programme of performance assessment in the manner outlined in A New Start. The consultation is the first small, but important, step in the process of developing a robust system of performance assessment of providers of health and adult social care. The first ratings of acute hospitals will appear at the end of this year: I will come on to the timetable in a moment. This will be another significant step in developing a ratings system, but it will not be the end of the journey. The Government are clear that the development of ratings will be a process of continuous evolution.
Amendments, 74, 75, 76ZA, 76ZZA and 76ZAA set out areas that the CQC must or could consider as part of its performance assessment of providers. These amendments would mean that the CQC would be required to include or consider the specific issues raised as part of its methodology. The Government share the view of noble Lords on the importance of the issues they have raised through these amendments. I am sure we can all agree that they are useful ideas. However, I hope that they will equally accept the importance of the central principle that we believe should be adhered to: that the CQC should be given freedom to develop its own methodology for the new performance assessments. The clause is deliberately designed to be flexible in that sense. I therefore hope that noble Lords will be content to withdraw their amendments, in the knowledge that the CQC is ready and willing to listen to all good ideas as it puts its final plans together.
The noble Lord, Lord Hunt, has also tabled Amendment 76ZB, which would require the CQC to undertake a pilot of its new performance assessment system and require the evaluation report to be approved by Parliament. The Government agree that the CQC’s new performance assessment methodology should be subject to evaluation. This is why, in our response to the Francis inquiry, Patients First and Foremost, the Government made the commitment that:
“The Department of Health will commission an independent evaluation of the operation of the new ratings system, and this will inform future adaptations”.
The amendment would give Parliament a power of veto over the methodology which the CQC develops for performance assessment. This is not desirable as it would constrain the freedom of the CQC to act on the findings of its consultation with stakeholders. I therefore hope that noble Lords will be content not to move that amendment.
Amendment 74A would require the CQC to undertake performance assessments of commissioners of healthcare services, specifically clinical commissioning groups and NHS England. The wording of Clause 80 could enable the CQC to undertake reviews of local authority commissioning of adult social care services. The absence of a similar requirement for healthcare commissioning therefore requires an explanation. The requirement for the CQC to review healthcare commissioning was removed by the Health and Social Care Act 2012 on 1 April 2013 when primary care trusts were abolished. This is because the function of supporting the development of the commissioning system for healthcare in England has become the responsibility of NHS England. NHS England’s role is to determine how the performance of healthcare commissioners, including clinical commissioning groups, is assessed and managed. There is therefore no need for the CQC to carry out a virtually identical role. I trust that the noble Baroness will be content to withdraw her amendment, but I would like to address the particular points raised.
Lord Hunt of Kings Heath
I do not quite see the logic of that, because in a sense NHS England has a vested interest in ensuring that all is well with the CCGs. It is not an independent body in the way that the CQC would be.
The other question is about NHS England itself. It is a massive commissioner of specialist services. If a local authority is to be assessed, I still do not see why NHS England ought not to be subject to some kind of independent assessment. It could have a huge impact on where specialist services are going to be provided in future. We know that Ministers are no longer prepared to answer questions about lots of things that NHS England does, so there seems now to be a gap in the architecture.
Earl Howe
Ministers most certainly are willing and able to answer questions about what NHS England is doing, and will continue to do so. Parliament, of course, will be entitled to keep NHS England’s performance in the spotlight; that architecture was built into the 2012 Act very deliberately. I do not accept the noble Lord’s point about clinical commissioning groups, because it is for NHS England to assure itself that the commissioning system for healthcare in England is working properly. There will be a high degree of transparency in that regard. The performance management role of NHS England will be right there, and I think that the proof of that will emerge over the coming months.
Perhaps I could cover the individual points raised by noble Lords. The first point was raised by the noble Lord, Lord Hunt, and echoed by the noble Lord, Lord Campbell-Savours, about how we expect the CQC culture to change in a relatively short time. I say to both noble Lords that I firmly believe that the CQC is already very much a changed organisation. It has a new leadership team in which I have full confidence. It has a new board—which, incidentally, the noble Lord, Lord Hunt, may be interested to know will include Kay Sheldon—and I think it has a new attitude to openness and transparency, as its handling of the Grant Thornton report demonstrates.
On 16 July, the CQC’s chief inspector of hospitals, Professor Sir Mike Richards, will start in post, so that is very soon. By September the CQC will be publishing a list of hospitals that it has the greatest concerns about, and it will be using its new surveillance system to develop this list. The CQC is committed to learning from the past and pressing ahead rapidly to improve for the future. I agree with the noble Baroness, Lady Howarth, that the CQC needs stability.
Lord Campbell-Savours
On the question of the surveillance system that the Minister just referred to, what about the proposal that keeps coming up all the time of two unannounced visits per year for every care home within the United Kingdom? Why can that at least not be set down by the Government as a requirement, irrespective of all the other recommendations and decisions that the CQC comes to over its new so-called surveillance system?
Earl Howe
It is not for Ministers to do that. I say that with great respect to the noble Lord. In saying that, however, I also highlight the ability of the CQC to flex its inspection frequency in accordance with information received. The noble Lord will know that organisations such as local Healthwatch, and indeed local authorities themselves, are able to alert the necessary authorities through Healthwatch England, which, as noble Lords know, is an integral part of the CQC, to any problems that may be flagged up. The CQC will be consulting in future on its proposals for care home inspections, and I do not doubt that a difference of view will emerge about the frequency of those inspections. I am the first to say how important it is that the inspections take place, and I totally take the point that those assessments should not be allowed to drift in any way. However, for better or worse we have an independent body known as the CQC, which should be allowed to act accordingly. The noble Lord, Lord Campbell-Savours, took us back to the 2008 Act. I would say to him that, in agreeing with the noble Baroness, Lady Howarth, Robert Francis was clear in his report that the system should not be significantly reorganised.
Lord Sutherland of Houndwood
Perhaps I may ask for clarification on one further point relating to complaints. Amendment 76ZZA does not propose that the CQC should handle complaints, which was the gist of the Minister’s response. Rather, it proposes that there should be a clear and transparent method of handling complaints within each trust and relevant area. The role of the CQC is to open up that window, very much in line with the Francis report, so that we can know that complaints will be handled at the appropriate level and in the appropriate way.
Earl Howe
I completely understand the noble Lord’s point. He will remember that in the registration requirements for providers of health or social care, the existence of a complaints system is one factor on which the CQC will need to satisfy itself. On the quality of the complaints-handling system within that provider, my answer is that it is a powerful point and an important area, but in the end it is one on which we should let the CQC decide as it develops its methodology. I do not in any way dismiss the noble Lord’s suggestion, but it is one for the CQC to take forward.
Baroness Pitkeathley
My Lords, this has been a wide-ranging and well informed debate. It has focused on anxieties about the role and competence of the CQC. The anxieties seem to focus on questions about whether the job of the CQC is doable at all, doable in the very short timescale, or doable with current resources. Suggestions about how to address the anxieties and concerns have included piloting new structures, but there has been much support for the CQC being given time to improve its strategy and performance—although with strong reservations from my noble friend Lord Campbell-Savours. I am grateful for the support for my amendments on integration, and sorry that the Minister was unable to accept them. Given the concern and strength of feeling about the CQC, I am sure that we shall return to this matter on Report. For the present, I beg leave to withdraw the amendment.
“Funding
The provisions enshrining the new duties and responsibilities for local authorities in Part 1 shall not come into force unless and until a comprehensive and sustainable solution has been provided by the Secretary of State to address the funding of existing care and support commitments for local authorities and those arising from this legislation.”
Lord Best
My Lords, we now come to the beginning of the Bill and the very important Part 1, sensibly postponed until after the Chancellor’s Statement last week on the spending review.
I declare my interest as president of the Local Government Association. The LGA has drafted this amendment and, as with many other Bills, has provided invaluable analysis and briefing for parliamentarians, alongside its direct negotiations with central government on behalf of local councils. Indeed, I commend the LGA’s new publication, Rewiring Public Services, which was launched yesterday and sets out a radical agenda for local services, including social care services.
The provisions in Part 1 have been widely welcomed. They will update and reform the adult social care system. They will support greater integration of health and social care and, on the issue of paying for care, the Bill’s provisions will redefine the relationship between the state and the citizen. Some of these changes will lead to future savings in the cost to the public purse of providing adult social care.
However, achieving later savings means spending more today, and some elements of the Bill mean a shift in the cost of care from the individual to the state. Therefore, before your Lordships’ Committee embarks upon its consideration of the important changes contained in Part 1, it seems important to consider the financial position from which we are starting out.
There is compelling evidence that rising costs of care are leading inexorably towards a crisis in funding for the local authorities which are trying to meet the needs of an ageing population. Before we can assess the practicalities of extra activity and extra spending for social care, it is necessary to be clear how existing care commitments can be paid for, as well as how extra costs arising from the Bill will be funded. Decisions on funding need to be taken before, or at least at the same time as, the policy decisions. Therefore, Amendment 77B—and I am very grateful to the noble Lord, Lord Tope, who has added his name to it—seeks to postpone implementation of Part 1 until the Secretary of State has addressed the crucial issue of how the costs of social care and support will be met in the years ahead.
What we now know from the Chancellor’s Statement last week is that the spending review includes genuinely helpful steps to fund key measures contained in the Bill. Following productive dialogue between central government and the LGA, the plans set out in the spending review make it clear that significant extra funds will be available from the NHS to assist with the costs of local care services. As well as needing reassurance that all extra costs for local authorities resulting from the Bill really will be covered, there remains the greater underlying concern that the financial foundation on which the new position is to be built is not secure. Over the past three years, adult social care budgets have reduced by 20%. In a number of areas, to cope with the funding cuts it has already been necessary for councils to raise the bar before regarding older people as eligible for help from the council. Accordingly, despite growing numbers of older people, fewer people are now being helped because their needs are assessed as moderate, not substantial, even though earlier support can prevent the need for higher costs later.
The Association of Directors of Adult Social Services notes that the bulk of this reduction has been made up by efficiency gains. Many adult services directors believe that they can go a bit further; for example, through better procurement, shifting activity to cheaper settings, subcontracting provision to the private sector, and so on. But the scope for further efficiencies clearly now is much reduced. Demographic pressures, with a 3% growth every year in numbers of older people, mean that savings are predicted to be immediately cancelled out by the cost of meeting increasing demand. The cost of just standing still is estimated at another £400 million a year. Efficiency savings alone cannot keep pace with these budget pressures.
Lord Bichard
My Lords, I rise briefly to support this amendment as a mere vice-president of the Local Government Association. Very few Members of this House were here a week or so ago when the noble Lord, Lord Bates, sponsored a debate on the increasing complexity of legislation and, indeed, the increasing volume of legislation. It is a shame that more noble Lords were not there. In that debate, the noble Lord referred to a recent report from the Office of the Parliamentary Counsel, which pointed out that when the Queen came to the Throne in 1952, after 740 years of legislation we had 26 volumes of Halsbury’s Statutes; we now have 74 volumes. In 1952, the average Bill was 22 pages long; it is now 122 pages long. In 1952, there were 29 statutory instruments; last year there were 3,328. This is an astonishing increase even on 2008, when there were just 1,325. On that last statistic, I can bear witness as a member of the Secondary Legislation Scrutiny Committee. Indeed, my postman particularly asked me if I could do something about the volume of secondary legislation.
We have reached a point where we need to think seriously about the volume of legislation and its complexity, and whether we can carry on imposing new burdens and responsibilities, not least on local authorities. It would be fine if all this additional legislation was actually removing some of the red tape and bureaucracy that previous legislation had provided, but we know that it is not doing so and that it does not do so. We need to do one of two things. Either we genuinely reduce the volume of legislation and the additional responsibilities that it places on all sorts of bodies, or, as the noble Lord, Lord Best, suggests, we have realistic costing of what these new responsibilities entail and ensure that resources are available. If we do not, we remain in a cycle of despair and decline where we expect others to deliver new responsibilities, which they are just not able to do. We also raise the expectations of clients and users, who believe that things will change, when in all honesty they probably will not. That, I think, is a cycle of despair and decline, and it is the reason why I support this amendment.
Baroness Howarth of Breckland
My Lords, I rise briefly, as yet another mere vice-president of the Local Government Association, to bring a slightly different dimension to this debate. The noble Lord, Lord Best, pointed out that local authorities are finding a variety of different ways of delivering services. I have been looking at some of those and listening to messages about them. One issue is that they are delivering cheaper services, which often means commissioning them from providers which will then deliver them at a different level of quality. I declare an interest as a provider in the charity Livability, which delivers services to the disabled, the elderly and some children from residential care.
We need to know whether we are prepared to open the debate. Have the Government as a whole given thought to discussing with the community at large what we really can and cannot afford for the future? The noble Lord, Lord Campbell-Savours, raised the issue of the numbers of inspections. When I was involved in inspections, one issue was that you could deliver as many inspections as you had funding for. Now you can use that funding in a variety of different ways to get better options but, at the end of the day, resources count and, unless we know how far the resources will go, it is pointless to try to descend into the abyss, as the noble Lord, Lord Bichard, said.
If we are going to take this forward, we have to know what level of quality people are prepared to accept. Then, when there are failures in organisations, people are not blamed, because the failure is not necessarily one of individuals or even of groups but of the corporate whole simply not having enough resources to work across the whole piece. Until we start that debate, we will not be able to intervene in discussions about criticisms of local authorities giving only 15-minute slots to people when they have only enough resources for 15-minute slots. In residential care, we are taking away some of the extra services because there is no more money them. We are reducing staffing in various institutions because there are simply not enough resources.
I am not denying that because of the deficit we have to look at funding; I think we do. However, we have to open up the debate. Otherwise, we raise expectations in the country of what we are entitled to. I sat in this Chamber until 11 o’clock last night discussing the Children and Families Bill, and we were having exactly the same discussion. We all want these wonderful things. I want things in this Bill, but somehow we have to decide on some priorities between them all. Whatever we say, we cannot go on expecting to get the same out of the same.
Lord Rix
My Lords, I support this amendment in particular. I declare an interest as the president of Mencap. There is no doubt that the services that we are able to provide are being severely cut back because local authorities simply do not have the money to support those services. Where we used to get, say, £15 an hour, we now get £12 an hour. The implication is that we can lower the standard of our services, but we are not prepared to do that. Therefore, we will end up reducing our services and, as a result, people with learning disabilities, their families and their carers will suffer. This is exactly the situation at the moment. Local authorities will try to provide the services, but they are making it much more difficult for voluntary organisations such as Mencap.
Lord Campbell-Savours
My Lords, I shall refer to the report of the Public Service and Demographic Change Committee. Members of the House who have not read the report should do so because it is a fascinating document. It is probably one of the best documents to come out of the House of Lords for many years. On the question of Dilnot, to which I am opposed but I shall explain that later on in the Bill, paragraph 193 states:
“The major gainers will be the relatively better-off, who will be protected from depleting their housing assets”.
In other words, potentially we will be spending in the longer term money that could have been raised in taxation. We are losing that revenue at a time when the same report refers to the deteriorating ability of the state to help people who are in need of medical services. It refers to the fact that the number of people aged over 75 is expected grow from 5.4 million in 2015 to 8.8 million in 2035. It refers to the fact that the demand for hospital and community service spending by those aged 75 and over is, in general, more than three times the demand from those aged between 30 and 40. We have higher demands from the elderly, more people falling into the groups that are liable to want the services historically provided by local authorities and the state, and yet, at the same time, with these Dilnot proposals, over a period of time we will be handing back money to the taxpayer to which, in my view, the taxpayer has no right.
The report says that the number of people in England with three or more long-term conditions is predicted to grow from 1.9 million in 2008 to 2.9 million by 2018. It is forecast that the number of people in England and Wales aged 65 and over with dementia—we all know the care requirements of people with dementia—or moderate or severe cognitive impairment will increase by over 80% between 2010 and 2032 to 1.96 million. The report goes on to say that it is estimated that by 2022 the number of people in England aged 65 and over with some disability will increase by 40% to 3.3 million.
As I understand the amendment of the noble Lord, Lord Best, he is simply saying, “Hang on a minute, before we start spending money, we should take stock of what is available in the longer term. Can the state afford to pay all the bills that are to come? Has that work been done?”. I hope that the noble Earl will seek to give the Committee those assurances because if the work has not been done and the predictions of some have not been taken into account, it may well be that the amendment of the noble Lord, Lord Best, is relevant. Let us defer much of this expenditure until we have sorted out the budgeting.
Baroness Campbell of Surbiton
My Lords, I had thought that I would not respond to the amendment of the noble Lord, Lord Best. However, I feel I must because there seems to be a missing voice in this debate—the voice of the thousands of people who use social care, over 70,000 of whom receive some form of direct payment. Ten years ago, when direct payments were successfully introduced and allowed disabled people to live independently in this country, we were proud to be employers. We were able to employ RPAs at a good rate, with holiday pay, and we were able to advertise. We were equal to those who employed individuals in their own companies. Ten years on, many cannot even give holiday pay and cannot advertise. They fall back on costly social care services or enter hospital as a result of not being able to employ assistants.
We, too, want to know the costings before new services come into effect. Disabled people may have to accept these services and find that they lose choice and control over their lives. So please do not forget the voice of those who say, “We, too, wish to know that the money is settled. We, too, need a voice to remind people that, in order for us to employ or control our services, we must feel that we can do this with equality and dignity and do it absolutely properly”. Otherwise independent living will become just a memory.
Lord Sutherland of Houndwood
My Lords, the noble Lord, Lord Best, is right in his analysis. He is pointing towards a financial problem that we all know is there and will continue to be there, not least in the current situation, for a number of years to come. The noble Lord, Lord Rix, is right about the consequences of this within the community. I declare an interest as president of Alzheimer’s Scotland and I know that the same applies to its sister body in the rest of the UK. There is a shortage of cash, which means that services are being provided more cheaply or, of greater relevance, are not being provided and are being squeezed. That is the analysis.
I do not think I can vote for the amendment as it stands. What is driving this difficulty is not the profligacy of this Government, previous Governments or local authorities—we can all tighten our belts and are doing so—but the reality of changing demography. My favourite statistic is that since the start of this Committee stage our statistical life expectancy has increased by 27 minutes. We cannot cash that in individually, but that is the reality. That is the driver of the difficult position we are in.
Ministers are often between a rock and hard place, and none more so than now. However, in the light of these facts, the Government have not reviewed the priorities of public expenditure across the board—I hope the Minister will persuade them to do that—and how many things can we afford to do with the population that we have. That means looking at priorities across departments. I do not just mean health and social care. It is inevitable that we will have to do this. The sooner the Government—the previous Government were not good at this—are prepared to say that we must undertake a review of priorities in view of the changing nature of our society, the sooner we will begin to move forward. In the mean time, I am in favour of keeping pressure on the Government by introducing a Bill of this kind because there is no doubt that that will sharpen the appetite of the voters for how change should be devised in the future.
Lord Beecham
My Lords, I declare an interest as a vice-president of the Local Government Association and as a member of Newcastle City Council.
Forty years ago, as the newly-appointed chairman of the social services committee in Newcastle, I had to come to terms with the impact of Sir Keith Joseph’s reorganisation of the health service which came into force that year. Among much else, that involved the transfer of responsibility for public health from local government, where it had largely resided for over a century, to the NHS, taking with it paramedical services such as chiropody and bath attendants. The area health authority, as it turned out, was so limited in its resources that, for a period, we as a council felt it necessary to fund the continued provision of those services by the health authority. At the same time, we hugely increased social care provision, doubled the home help service and trebled the number of meals on wheels. I am sad to say that now those services are roughly back to where they were in 1973 as a result of the pressure on the authority’s budget. Now, in a step on which the Government are to be congratulated in principle, public health largely returns to its local government home and the concept of a holistic approach to social care, involving both local government and the NHS, is enshrined in the Bill.
It is unfortunate that the previous Secretary of State, in his shadow capacity, walked out of cross-party talks which the Labour Government had initiated to address the issue of care and its cost, and that it has taken three years to produce the proposals that we are debating. However, it is even more unfortunate that during that time not only has demand risen inexorably, but local authority funding has been severely and deliberately reduced by a greater extent than any other area of government expenditure. It is sad, but not untypical, that the Secretary of State for Communities and Local Government should not only have acquiesced in, but actively promoted, this perverse order of priorities with all it has implied for key services, including those that we are debating in this Committee.
As we have heard, the Local Government Association avers that adult social care budgets have been reduced by £2.6 billion, or 20%, over the past three years, with additional dire impacts on other services, such as leisure and housing, which should contribute to health and well-being and which are threatened with virtual extinction as local authority services by the end of the decade. The noble Lord, Lord Best, reminded us of the London Councils report and its estimate that the cost of the reforms—which, I repeat, we welcome in principle—will amount nationally to an average of £1.5 billion a year over the next four years. Apparently, the greater amounts will be spent in the first and last years of those four. London itself will be facing a bill of at least £877 million as a result of implementing the proposals.
Of course, this, in part, reflects the increasing demand from different client groups. We largely talk of the elderly, but there are other significant groups. The noble Lord, Lord Rix, has reminded us about people with learning disabilities, and there are also people with physical disabilities. These two groups are growing as medical advances have enabled them to live longer. The quality of their life, of course, is the subject of much concern and that imposes additional strains on the budget. It is another example of incremental demand that needs to be met. In addition to that, there are people suffering from mental health problems. The increasing demand so far has manifested itself as between something like 10% and 14% in these different categories. It is clear that inflation and demographic trends alone will push up the cost, as the noble Lord, Lord Best, has indicated, by some £421 million by the beginning of the next spending review period.
There is also a serious question about the amount and timing of the funding designed to assist transition to the new regime, given that this welcome increment was announced in the spending review for 2015-16, but work will have to begin before then if we are to make progress at that time. It would be helpful to know, given that part of the rationale for the changes is that a whole-systems approach is likely to be more cost effective, just what savings the Government anticipate will be made and over what timescale by each of the two principal partners—local government and the health service—and in the case of the latter, by which of its several components.
Given the huge problems currently experienced in A&E—in contrast with the position under the previous Government when 98% of patients were seen within four hours—and the emerging problems that we have read about in the past few days in general practice, how confident can we be that the basic funding projected for both partners is adequate, even before taking into account the scale of change envisaged? How do the Government respond to the comment on the spending review of the Foundation Trust Network, which warns of,
“a further major squeeze on NHS front line services as £4 billion is diverted from the NHS budget to social care”
in 2015-16? It points to fact that trusts,
“are, in many cases, struggling to meet the rapidly rising demand created by an ageing population”.
The concept of pooled budgets is welcome, but given the number of parties to the commissioning process, with local authorities joined by clinical commissioning groups commissioning hospital services and NHS England, currently the national Commissioning Board, commissioning general practice and mental health services, how will this pooling work in practice?
Baroness Wall of New Barnet
I know very little about local government other than that I work with it in the health sector, but I wonder whether, with the pressure that is on all of us with the cuts and the absolute need to reduce things, local authorities have looked at every opportunity. All I know is that since our income in an NHS trust has been looked at more carefully, we have had to have a look at the cost improvement programmes that we can deliver. We had never done that before, but we have delivered so many of those, improving costs by £17 million in the last year.
I am not making a criticism as I have no idea at all, and I know that we can all bemoan the fact that we have less money and all the rest of it, but until we know that we have done everything that we can, and got right down to questioning if we could do things differently, then we perhaps need to look at ourselves as well. Forgive me if you have already done that.
Perhaps I might respond to the question that the noble Lord is asking about what it means to integrate social care and local authority stuff. This is why I worry to death about this amendment. If this part of the legislation does not happen, the whole system will be in much worse straits than it is now. We have an issue about our local authority cutting back on some of the places in nursing homes, which means that we do not have the opportunity to put patients who no longer need to be in a hospital in the place where they ought to be to receive care.
At some stage or other, all of us have got to work together and say, “How do we do this?”. For lots of different reasons, not just the bed space, it is much cheaper for an individual to be in a care home bed than in a hospital bed. If we cannot resolve it between ourselves, and we cannot do it on our own as providers, local authorities cannot do it on their own, and neither can the care sector generally, then I wonder if we are ever going to get there. People perhaps need to start to look at how we might achieve this by being a bit tighter in other things.
Lord Beecham
My noble friend is right to draw attention, as many of your Lordships already have, to the need to integrate the provision and to avoid the sort of cost-shunting that can arise if organisations are kept separate. That is the point of the pooled budget: you look not just at the straightforward provision of care by one or other partner, or both partners, but at what will perhaps reduce the need for care in other ways. As I say, other local services such as leisure and adequate housing, in conjunction with the public health agenda, may very well reduce the demand for particularly expensive forms of care, as I am sure we all agree.
Of course, local government’s track record is not uniform, but it is right to say that local government has proved over the years to be the most efficient part of the public sector. There has been a huge improvement programme in local government, recognised by the shortly to be lamented Audit Commission, and others, over the years. The LGA in particular has sought, through a whole series of policies, including the very extensive and successful use of peer review, to engender new approaches and more cost-effective ways of dealing with a range of problems, including those in the social care arena.
I was about to conclude by drawing attention to another figure, which has just emerged today. It is a rather startling figure: £9.8 billion of uncollected VAT—10% of the total take—according to today’s Guardian. That dwarfs the amount that the Government are putting into the new arrangements. Just as local government needs, together with its partners, to engender the utmost efficiency in the mechanisms that it develops to provide services and make them cost-effective, as my noble friend suggests, so on the revenue-raising side central government has a massive obligation to ensure that it collects the taxes—instead of cutting the resources going into HMRC, which is responsible for collecting VAT, by a further 5% in the spending review.
We do not consider the cost of £3.8 billion and the welcome money that the Government are going to provide to be the last word in these matters. There will have to be a continuing process of establishing programmes that are effective and cost-effective. Looking at the totality, there is scope within the system to prioritise this area, providing that the Government take the right decisions—across the piece, not merely on the narrow front of health and social care but considering the implications for other services and functions of government—and collect the money that they are due anyway and which would relieve the huge pressure on these services and others.
I have a good deal of sympathy with the concerns expressed by the noble Lord, Lord Best, but I share the view of the noble Lord, Lord Sutherland, that it would not be right to hold things up. We must get on, but in doing so we must be realistic about the challenges that will be posed to those responsible for delivering these services. I look forward to hearing the Minister’s response to the various questions that have been raised in the debate.
Earl Howe
My Lords, I do agree with the spirit of this amendment. It is critical that care and support generally, and these reforms in particular, are fully funded. Without adequate funding, they will not deliver the benefits we all want to see. However, let me reassure noble Lords that we already have full procedures in place to ensure that there is proper funding for social care.
The first and very basic point is that the Government set spending plans for all areas of public expenditure at once during a spending review. This ensures that decisions can be taken about the future funding requirements of government as a whole, rather than assessing each part piecemeal. The noble Lord, Lord Sutherland, spoke about the review of priorities being a task of government. I agree, and that is exactly what spending rounds are designed to do.
Secondly, we have the new burdens doctrine in place, which requires that,
“all new burdens on local authorities must be properly assessed and fully funded”.
That ensures that all new funding pressures, including those that result from this Bill, are fully funded. I can tell the noble Lord, Lord Best, that our commitments are in line with the new burdens doctrine, the costs have been identified in the impact assessment, and the funding in the spending round will support local authorities to deliver on current and future commitments through to 2015-16. To answer the noble Lord, Lord Campbell-Savours, yes, the work has been done.
It is only right that the Government take spending decisions for all areas of public expenditure at once. This ensures that future spending plans are drawn up which are coherent and consistent across all public services. This is exactly the purpose of a spending round, the latest of which concluded last week, as noble Lords know, and set spending plans for 2015-16. Fundamentally, this settlement delivers the funding required to ensure that service levels in the care and support system can be protected and are able to deliver on all the commitments in this Bill.
However, with additional pressure on the system, we must ensure that the Government, the NHS, local government and care and support services are all working together to offer the best possible services for patients while also addressing the growing demand on the system that the noble Lord, Lord Best, rightly referred to. That is why we have announced in this year’s settlement a £3.8 billion pooled health and care budget to ensure that everyone gets a properly joined-up service, so that they get the care and support they need from whoever is best placed to deliver it, whether that is the NHS or the local authority.
In 2014-15, the NHS will transfer £1.1 billion to support social care with a health benefit. The pooled fund will include £2 billion more through the NHS in 2015-16. But this money will be given only on the basis that services are commissioned jointly and seamlessly between the local NHS and local councils. I hope that that helps to answer the question posed by the noble Lord, Lord Beecham.
Lord Campbell-Savours
Before the noble Earl moves on, perhaps he can answer this question. Is he saying that the statistics that were used in the report by the Committee on Public Service and Demographic Change were known to the department and were all taken into account, and that the calculations the department made were based on those statistics, which were well sourced, when the budget for these areas was decided upon by the Government?
Earl Howe
The statistics that the Government relied upon were official statistics and, I think, were exactly the same as the statistics used by the report to which the noble Lord referred. Of course, that report takes us forward 10 and 20 years. I am not pretending that the spending round has done that—it never does and I think it is safe to say that it never will. But we did look forward in a rigorous way to the pressures on the system in 2015-16 and based our assessment on the statistics that are officially issued.
As all plans will be jointly agreed by the NHS and local authorities in the pooling arrangements that I referred to, that in itself will provide a strong guarantee that the money is spent in a way that delivers on the priorities of health as well as of care and support. Not only will this fund help to deliver joined-up services, it provides the necessary funding for all the commitments and duties set out in this Bill, and the growth in demand from an ageing population and growing number of disabled people—I say in particular to the noble Lord, Lord Rix, and the noble Baroness, Lady Campbell. In particular, funding worth £335 million has been set aside for the introduction of the cap on care costs and the extension of deferred payment agreements.
Lord Beecham
My question was not about the purpose of the pooling, which I think we all share. My question was rather more detailed. If part of the funding is to be based on outcomes, how and when is that to be judged? If the outcomes are not achieved, how will the money be reclaimed? All this is something of a mystery as matters stand.
Earl Howe
The details of the payment-by-results system will be worked through. We are working with our partners in the sector including the LGA and NHS England to ensure that the system is designed with a view to incentivising integration. Further details of those arrangements are in course and we will announce them as soon as we can.
The kind of things that we will be looking for are, for example, the results that we have seen in places such as Cheshire West and Chester. The pilots, the whole place community budgets, showed that savings from integration could be substantial if implemented effectively. A business case needs to be presented. In that context, the pilot suggested that, once proposals are fully implemented, the net savings that could be achieved over five years are considerable.
Cheshire West and Chester has made savings of £26 million, with £3.8 million for Greater Manchester, £190 million for the Triborough authorities and £90 million for Essex. These savings are being identified. It gives us confidence to say that there is real potential to save money across the country, as shown by the pilots and other reviews, such as the Audit Commission review. Oxfordshire recently announced that it was nearly doubling the amount of money in its pooled budget for older people. That is a significant move.
I agreed with much of what the noble Baroness, Lady Wall, said. Savings are eminently possible without detracting from quality, by slowing and preventing the development of care needs or the onset of health conditions, or the loss of independence. We hope and believe that preventive care can increase the quality of life for individuals. A proactive stance by local authorities will deliver that. At the same time, preventive care will provide longer-term financial savings to the public purse. For the first time, Clause 2 creates a clear legal duty on local authorities to ensure the provision of preventive services.
I come to the point raised by the noble Lord, Lord Campbell-Savours, about the Dilnot package. I do not view the Dilnot package in the same way that he does. I do not see funding reform as being about protecting people’s inheritances. It is about providing hard-working people with peace of mind about how much they will pay for their care. Deferred payments will ensure that people will not have to sell their homes in their lifetime to pay for care. That will prevent distressing sales of houses and provide everyone with breathing space to make decisions and choices about what happens to their home. In the long term, the scheme is broadly cost-neutral to government, because the deferred payments will be repaid. Everyone will benefit from these reforms, but they will particularly help people with modest wealth who are most at risk in the current system of losing their entire home and savings.
Delivering on these transformational changes to health and care is the only way to secure the long-term sustainability of services, both for the NHS and local authorities. I would be firmly against delaying this —I think we would be heavily criticised if we did. The noble Lord, Lord Bichard, referred to the burgeoning weight of regulation during the past 60 years and one cannot argue with the statistics that he produced. This Bill serves to consolidate more than 60 years of legislation; it will repeal provisions from more than a dozen Acts of Parliament. Reducing the complexity of the statute and rationalising burdens on local authorities are our key aims in this context. I hope that, for the reasons that I have outlined, the noble Lord, Lord Best, will feel sufficiently reassured to be able to withdraw his amendment.
Lord Best
My Lords, I am deeply grateful to all noble Lords who have spoken: to the noble Lord, Lord Bichard, for pointing out that we cannot keep loading responsibilities on local authorities and others without willing the means to pay for those things; to the noble Baroness, Lady Howarth, who said that we cannot go on like this; and to the noble Lord, Lord Rix, who explained the position from the Mencap perspective—it could have been that of many other charities which are facing very tough times because local authorities cannot keep up the level of support that they used to have. The noble Lord, Lord Campbell-Savours, produced more impressive statistics, not least in relation to the people with long-term conditions and dementia who are living in the community and need to fund their care needs. The noble Baroness, Lady Campbell, brought us the users’ voice, pointing out that funding cuts have already meant people losing some of the control and choice which had been increasingly expected with use of direct payments and so on.
The noble Lord, Lord Sutherland, pointed out that the culprit is not local government or central government but demography, and that we need to make some choices as a result of those demographic pressures. However, in his view, one of those priorities is clear: it is that we should go ahead with this Bill. The noble Lord, Lord Beecham, also felt that it would be unwise for us to delay things, even though he accepted that cuts mean that social services in Newcastle have returned to the position that they faced in 1973 in terms of the resources available. He pointed that it is local government that has shown itself best able to be more efficient in these difficult times. We need to remember that. The noble Baroness, Lady Wall, pointed out that local authorities should try to make savings wherever they can, and the noble Lord, Lord Beecham, was right that statistics show that local government is doing just that.
I think that it is fair to say that the noble Lord, Lord Bentham, felt that it was necessary to find additional resources, but he thought that those could be found from the underspend in the NHS or the uncollected VAT or some other source. However, he did not want the amendment to delay the good things that the measures bring with them. The noble Earl, Lord Howe, agreed that we need fully to fund the measures—did I say Bentham?
Lord Beecham
My Lords, I hope to be of some utility, but I would not claim to be utilitarian.
Lord Best
I deeply apologise, and not for the first time, to the noble Lord, Lord Beecham, one of the most distinguished of the vice-chairs and past chair of the LGA.
The noble Earl, Lord Howe, agreed with everybody that we need fully to fund the new measures and to ensure that the funding for existing care services is there. He expressed to us the belief that the new measures will do just that and they herald a sustainable funding arrangement for the future. He noted that the settlement for local authorities is extremely challenging this time round, but that, in terms of social care, the settlement that we are now pointing towards, with jointly commissioned services, the pooling of the £3.8 billion and NHS and local authorities working together, will in his view prove enough to fund a sustainable care service. Only time will tell whether those calculations prove to be accurate rather than too optimistic. In the hope that the noble Earl’s predictions are correct, and recognising that government really are attempting to make serious change in this Bill to the funding system as well as in so many important ways to the care services, I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath
“( ) The Secretary of State, in making regulations or issuing guidelines under this Part, must have regard to the general duty of local authorities in exercising a function under this Part in the case of an individual to promote that individual’s well-being.”
Lord Hunt of Kings Heath
My Lords, I shall speak also to my Amendments 78D and 88L. I am also supportive of Amendment 79, which very much follows the thinking behind my own Amendment 78. I also support Amendment 78ZA, in the names of the noble Lord, Lord Bichard, and the noble Baroness, Lady Tyler. I am sympathetic, too, to the amendments tabled by the noble Lord, Lord Black. I have also added my name to Amendments 78A and 78B in the name of the noble Baroness, Lady Barker. She will speak substantively to those amendments, which we have proposed in a number of Bills going back many years. They try to make sure that, when a regulator is dealing with a religious care home, regulations do not get in the way of the spiritual beliefs of the residents in that home.
Amendment 78 takes us to the very important well-being principle. In its consultation paper which led to the consolidation of the social care legislation that we see in this Bill, the Law Commission proposed that there should be tightly defined processes for determining the scope of adult social care. That follows on from the debate that we have just had. Replies to that consultation persuaded the Law Commission to define the purpose of adult social care as promoting or contributing to the well-being of the individual. That recommendation was accepted by the Government and is central to their new approach to adult social care.
Clause 1 provides for a set of legal principles which govern how local authorities are to carry out their care and support functions for adults under the Bill. Subsection (1) establishes the overarching principle that local authorities must promote the well-being of the adult when carrying out functions under the Bill in relation to that adult. This duty applies both in relation to adults who use services and to carers. The well-being principle applies to local authorities when they exercise a function in the case of an adult. My understanding is that it is not intended to be directly enforceable as an individual right, but to carry legal weight where a local authority’s failure to follow the principle may be challenged through judicial review.
This issue was considered very carefully by the Joint Select Committee, which commented specifically on the role of the Secretary of State in relation to the well-being principle. It took the view that many of the details that will shape the way in which local authorities discharge their functions under the Bill are subject to regulations and guidance issued by the Secretary of State. We will, of course, come on to one example—that is, the regulations in relation to eligibility, which we will debate not, I suspect, tonight but on another day.
The Joint Select Committee referred to Section 1B(1) of the National Health Service Act 2006, which provides:
“In exercising functions in relation to the health service, the Secretary of State must have regard to the NHS Constitution”.
The Select Committee suggested that the Secretary of State should be obliged to have regard to the requirements of Clause 1 on well-being when exercising the functions under the draft Bill. In giving evidence to the Joint Select Committee, the Minister replied:
“We absolutely want the wellbeing principle to apply comprehensively”.
The Joint Select Committee comments:
“We welcome the importance that Ministers attach to the well-being principle. We recommend that the draft Bill should include a provision requiring the Secretary of State, when making regulations or issuing guidance, to have regard to the general duty of local authorities under clause 1”.
We debated this at Second Reading. The noble Earl, Lord Howe, said that,
“Clause 1 is intended to apply at an individual level, when a local authority makes a decision. This individual focus on the specific well-being and outcomes for that person is at the heart of the way that the Bill has been drafted. It is not intended to apply in a more general way”.—[Official Report, 21/5/13; col. 829.]
He went on to say that it would therefore not be appropriate for the Secretary of State to be subject to the same duty, as the Secretary of State does not make decisions at the individual level.
I think there is an element of Ministers almost washing their hands of what actually goes on at ground level in health and social care. We have already seen that in the Health and Social Care Act 2012, and we are seeing some elements of that here. Of course, the Bill places a responsibility on local authorities to promote well-being in the way they implement the provisions of the Bill locally. However, if the Secretary of State were to issue regulations without having regard to the promotion of well-being, there is a risk that those regulations or guidance will conflict with the well-being principle. That would place local authorities in an impossible situation. For instance, if the eligibility criteria issued in regulations by the Secretary of State do not take full account of all aspects of well-being in Clause 1, local authorities may find that people who need support to promote well-being as defined in Clause 1 fall outside the eligibility criteria. I will come on to debating the eligibility criteria, but there are some aspects of the eligibility criteria which would suggest that they do not meet the well-being principles in Clause 1. I hope the noble Earl will think very carefully about this. There is a broad consensus in your Lordships’ House and within the Select Committee dealing with the draft Bill that the Secretary of State, when issuing regulations and giving guidance to local authorities, ought to be operating under the same principle of well-being as those local authorities are. It seems to go straight back to the debate instituted by the noble Lord, Lord Best, in relation to the Government legislating but not giving the wherewithal to local authorities to actually carry out that legislation effectively.
I turn to Amendments 78D and 88L, which are concerned with ensuring that health needs are taken fully into account in decisions taken by the local authority. I fully acknowledge that I have been inspired to do this by the noble Baroness, Lady Campbell. The starting point here is that it is essential to look at this through the prism of person-centred integration. As a starting point, we need to look at ways to put the individual’s and carer’s need for integrated working in the Bill and outline a statutory framework for person-centred integration that will support and incentivise local moves towards more integrated working. There are clearly points of contact here with the scheme which the Minister’s honourable friend Mr Norman Lamb announced recently for local pilots on health and social care integration.
Promoting the individual’s well-being, assessing their needs and those of their carers, deciding on eligibility and the priority for needs to be met, developing them with an appropriate care and support plan, enabling the best use of a personal budget and/or direct payment, and ensuring continuity of capacity during and after a move such as a house move are all processes or stages in which active engagement of NHS professionals or services could have a positive effect on the outcomes for individuals and carers. Integrated approaches by social care and the NHS can inform decisions, expand options, widen choice, retain or restore capability, prevent or reverse deterioration, avoid admission to and accelerate discharge from more intensive support and enable more efficient, equitable and economic use of scarce resources.
These amendments, which aim to ensure that happens in relation to the whole well-being agenda, are entirely relevant to the eligibility criteria. I remind the noble Earl that Mr Lamb, in his foreword to the document that we have received, makes the observation that,
“there needs to be better integration between local authorities and the NHS to remove gaps and build services around the needs of people”.
The discussion document’s only reference is in one paragraph which says:
“The assessment process in the Bill … provides for joint assessments between local authorities and other bodies such as the NHS. Improved integration will ensure that the person does not have to undergo separate assessments and will support better care planning to meet the individual’s overall health and care needs, or to join up whole-family assessments which look at an adult needing care alongside those who care for them”.
Of course, that is welcome as far as it goes, but there is a risk that it depends on an ill-defined concept of better integration and may well fall short of a holistic approach to well-being, assessment, care and support planning, carer support and review. We will come to the draft regulations later. This has a significant bearing on assessments for health and social care integration. The intention is to scrap the present assessment system, based on judgments about degrees of risk to areas of individual capability and exclusion from participation in various aspects of ordinary living. The new model proposes to examine people’s ability to carry out various personal care tasks and undertake a selections of household tasks. The rationale offered is that the new system will be more objective and fairer in its application, but there are some concerns here. First, this is explicitly a deficit-model of assessment, requiring individuals, their carers, relatives and social workers to almost play up or exaggerate the things that they are unable to do in order to qualify for support. In many ways, that replicates the very bad approaches that we have seen in some welfare assessments. It is certainly bad for morale and distorts the overall framework for making decisions. In one sense, one can argue that it reverses efforts over the past 20 years to maximise independence, choice and control and build on the strengths, contributions and aspirations that people can have. I must say to the noble Earl that is has some very uncomfortable reminiscence of the new approach to disability benefits, whereby people are required to prove limitations under the inexpert and unsympathetic eye of ATOL assessors. I hope that is not the approach that is going to be taken in relation to the eligibility criteria. There will be very great concern if that is to be the case.
The noble Baroness, Lady Campbell, has many examples, which I hope she might be able to intervene and provide, of disabled people with high health and social care support needs, who are ready for discharge but languishing in costly high-dependency hospital units because clinical commissioning groups have almost ground to a halt due to decision-making, with arguments about who pays being one of the many reasons for this. It is absolutely essential to ensure that when we debate and take forward the well-being concept, which of course we welcome, not only do we have a situation where the Secretary of State is subject to those principles as well, but the health service plays its part in ensuring a wholly integrated approach. As we come to debate the eligibility criteria, that is going to be a very important factor for our consideration. I beg to move.
Lord Bichard
My Lords, I support the amendment and in particular speak to my own Amendment 78ZA, which seeks to place the concepts of dignity and respect on the face of the Bill at the outset. I should declare an interest as chairman of the Social Care Institute for Excellence.
A week or so ago I visited a residential home in Edgbaston, Birmingham, and I came away convinced that I could happily live there. I am not sure that they would want me but I was convinced that I could live there if they would have me. As I reflected on that visit I asked myself why I felt so positively, because I do not always feel that way about a visit. The accommodation was comfortable, clean and not overly institutionalised. The staff were skilled and well qualified. There was a rich programme of voluntary recreational activities and a great deal of interaction between the local community and the home. A special school was visiting on a regular basis and there was clearly a bond between the residents and the students at the special school.
All very impressive, but above all, I experienced a place where residents were treated with dignity and with respect by staff who seemed to understand that people’s greatest need at a time when they have to receive some support is not to lose their dignity. Those residents wanted, above all else, to retain their dignity, and so would I.
Baroness Barker
My Lords, I shall speak to Amendments 78A and 78B, which stand in my name and that of the noble Lord, Lord Hunt of Kings Heath. These and other amendments which will crop up throughout our discussions have been inspired by the Christian Science movement. I wish to say that I am not a Christian Scientist, but Christian Scientists hold to some very firm beliefs which are of great importance to them. Part of their belief system is that they do not wish to receive medical treatment in circumstances where other people would make a different decision. Therefore, in health Bills such as this, where we are setting out the principles that underlie what we define to be good care, it is not uncommon for me and the noble Lord, Lord Hunt, to put on record again that there is a spiritual dimension to health and well-being and that the way in which that spiritual belief is manifested can be different for minority groups.
One great strength of the Bill is that it takes a principled approach to what we define as well-being rather than attempting to define well-being in a descriptive sense. One reason why I think that that is increasingly important is that we have an increasingly diverse population. Therefore, the meaning of well-being for individuals is becoming distinct and diverse throughout society. The amendments place a duty on local authorities and relevant health bodies to respect the increasing diversity of our population.
There are two other reasons why I am very pleased to support the amendments. Like everyone else in the House, I am greatly in favour of the integration of health and social care. I see the undoubted benefits of that, but as someone who has worked in the field of social care, as opposed to health, all my life, I still carry with me the fear of the medicalisation of disability or of old age. When push comes to shove, when budgets are tight, some of the certainties which surround physical health, in particular, can overtake social goods which are less easy to define. Therefore, it is important that we ensure that we do not allow that to happen. One way to prevent that is by taking the approach of the amendments.
The final reason why I raise the amendments now is that I think that setting that out as they do right at the top of the Bill is a strong reminder to everyone who will refer to the Bill in years to come that the autonomy of individuals is an important part of health and well-being. You cannot have good health and be a fully functioning member of society if you do not have that autonomy, an autonomy which means that, in some cases, you have the right to make decisions which other people would regard to be unwise. It is a point of principle, but one which I think has a great deal of practical application not just for those who are receiving care but for those who are in charge of making decisions about it.
Baroness Jolly
My Lords, I am very sorry that the noble Lord, Lord Warner, is not in his seat. He tabled Amendment 79 to express the strength of feeling of Members of this House who were sitting on the scrutiny committee about the Secretary of State’s the duty to have regard to well-being. Were there room for more than four names to the amendment, there would have been more Members of your Lordships’ House on that list.
To put this in context—and the noble Lord, Lord Hunt, has taken us through quite a lot of this—this Bill was widely consulted. It was probably the coalition’s most widely consulted Bill; somebody might be able to tell me to the contrary. At each stage, people welcomed the well-being principle. Perhaps I may remind the House that in the majority report on the Bill, one of the recommendations was that the Secretary of State should have due regard. When the final Bill was produced, many in the sector approached me, and I suspect many others, to express their disappointment that that was not included in it. When the Secretary of State came to give evidence with the Minister for Care and Support, the right honourable Norman Lamb, he was very positive about it. According to the transcript of the session, Norman Lamb said:
“We absolutely want the wellbeing principle to apply comprehensively”.
The well-being principle is around the change of culture and it puts the person at the centre. It is absolutely critical that that happens, and next week we will debate the whole business of assessment and how we are undertaking it. However, unless the Secretary of State has to have regard to the same principle as local authorities, there is an opportunity for future Secretaries of State when making regulation to disregard well-being and just make regulation in the old way. One thing that sets this Bill aside from many others is that it is written in plain English and throughout its intention is pretty clear.
I ask the Minister if he is able to offer any assurance to the House, to the sector and to those for whom the Bill is written—the service users and the carers—that the Government will think again about the decision not to include in the Bill a duty on the Secretary of State to take well-being into consideration.
Baroness Campbell of Surbiton
My Lords, I apologise for not being able to bound in as soon as the noble Lord, Lord Hunt, sat down. At that moment my papers cascaded to the floor. I rise to support Amendment 78D. For logistical and physical reasons, as my noble Lords can probably hear, I was unable to put this amendment down myself and the noble Lord, Lord Hunt, has done miracles to articulate our conversations in such a lucid manner.
I feel, however, that I must give your Lordships a very clear example of why I believe this amendment is so necessary. Why do health and social care practitioners need this further direction in this amendment?
It is true that health and social care consumers enjoy greater personal control now, which affords a small percentage support to live independently in the community. I am an example of the few who live with complex health and social care requirements and live a life just like any other: pursuing a career, tending the family, or in my case revising legislation.
We remain, however, an exception, rather than the rule. Let me give your Lordships a couple of examples. Just over a year ago, I led a JCHR inquiry into Article 13 of the UNCRDP, a right to independent living. When we launched the findings, I dedicated the report to a disabled young man who had secured optimum control over his own life using social care direct payments. He lost everything within a couple of months, after his support needs changed, due to requiring a tracheostomy. He had graduated from university and was about to start his first job .
Baroness Pitkeathley
My Lords, I apologise to the noble Baroness, Lady Campbell. I was so eager to follow the noble Baroness, Lady Jolly, on Amendment 79, and I did not know that she was wishing to speak.
I particularly wanted to follow the noble Baroness, Lady Jolly, in speaking in support of Amendment 79, on which my name appears as well as hers and the noble Lord, Lord Warner, who was unavoidably absent today, and indeed the noble and learned Lord, Lord Mackay.
It will not have escaped the notice of the Committee that we are all members of the Joint Select Committee which scrutinised this Bill. We were very keen to have in Clause 1 the recommendation that when making regulations or issuing guidance, the Secretary of State must have regard to these principles, as must as local authorities.
We put this issue to the Secretary of State and the Minister as the noble Baroness, Lady Jolly, has mentioned, when they appeared before the Joint Committee. They appeared to be very favourably inclined towards it. We were very hopeful that this would be in the Bill. The civil servants were clearly less eager about this, so perhaps it was no surprise that it did not appear. However, we took away from the evidence session the understanding that Ministers were sympathetic to the idea. That is one of the reasons this amendment has been tabled.
Sadly, the official line now seems to be that used by the Minister at Second Reading on 21 May, when he said that,
“the well-being principle in Clause 1 is intended to apply at an individual level, when a local authority makes a decision. This individual focus on the specific well-being and outcomes for that person is at the heart of the way that the Bill has been drafted. It is not intended to apply in a more general way. Given that we do not think it would be appropriate for the Secretary of State to be subject to the same duty, the Secretary of State does not make decisions at the individual level”.—[Official Report, 21/5/13; col. 829.]
Nobody could disagree with the first part of that statement but the second part simply does not follow on, because the Secretary of State’s actions in regulations and guidance determine to a great extent whether local authorities can discharge their duties under Clause 1.
If the Secretary of State asks so much of local authorities without adequate funding being available, they will simply be unable to discharge their duty. Only if the Secretary of State is bound by the same duty as the local authorities can there be any realistic chance that, over time, he will avoid making unreasonable demands of local authorities in the instructions that he gives them. The way that the Bill is drafted, the Secretary of State can simply pass the buck back to the local authorities, which differs from his position in relation to the NHS, where he is required to act in accordance with the NHS Constitution. If it was the Secretary of State’s intention, as he seemed to be saying in his oral evidence to the Joint Committee, to support the well-being principle in practical terms, this amendment should be acceptable, and I hope it will be.
Lord Black of Brentwood
My Lords, I shall speak to Amendments 78E, 87K and 88J, which are in my name. They raise the issue of companion animals—mostly cats, but dogs as well—and the positive role that they can play in the care of elderly, vulnerable and sick people, whose welfare is at the heart of the Bill. I should declare an interest as president of the Printing Charity, as it runs two homes providing sheltered accommodation and financial support and care for people from the printing industry.
Amendment 78E includes the positive contribution of a companion animal to an individual’s well-being in the list of factors to which a local authority must have particular regard in exercising its functions under Part 1. Amendment 87K includes identifying the role of companion animals in the care and support of an individual when a local authority is assessing their needs and those outcomes that an individual wishes to achieve in day-to-day life. Finally, Amendment 88J deals with the issue of companion animals in regulations under Clauses 9 and 10. Taken together, their purpose is to ensure that the benefit which companion animals can provide to well-being, a subject not currently covered in the Bill, is not overlooked by those implementing and interpreting it.
It is estimated that 25% of people over retirement age own one or more pets. For the elderly and vulnerable, the companionship that cats and dogs can bring cannot be overstated. Academic research over many years has documented this. One study by Brooks, Rogers and others, published just last year, highlighted the emotional and practical impact that companion animals offer. Noting that they provide unconditional support and love, as we all know, the study concluded that,
“the policy implications of this study suggest that pets might usefully feature alongside consideration of the usual support systems associated with the management of long-term conditions and in planning how needs might be ... creatively met”.
That, of course, is precisely what this Bill is designed for and what these amendments are crafted to deliver.
Cats in particular can help those who are vulnerable, through age or health, in three ways. First, there is a powerful body of evidence about the contribution of cats to physical health. According to one study published recently in the Journal of Vascular & Interventional Neurology—not a magazine I look at frequently, but it is there—they contribute to a reduction of fatal cardiovascular disease by around 30%.
Secondly, the ownership of a cat brings positive benefits to an individual’s mental health. Research conducted in 2011 for Cats Protection and the Mental Health Foundation among people with a mental health problem found that 76% of people who owned a cat felt they could cope with everyday life much better as a result, and that 87% said it had a positive impact on their well-being. Cats can be especially helpful for depression during the winter period—a particularly important point since, as we now know, this goes on for about nine months of the year. As the Cinnamon Trust, which works tirelessly to support the elderly and their pets, summarises it:
“Pets have the ability to bring happiness and laughter and lift depression. Communication with other people is often easier when a pet is present for reassurance”.
Thirdly, cats make particularly suitable companion animals for those with chronic health problems, including those who are immobile or disabled. I know that this is a charge always made against cat lovers, so I am not forgetting our canine friends. I highlight, for instance, the excellent work of the innovative Dementia Dog Project, which helps to keep people in the early stages of dementia active and engaged with their local community, as well as providing a constant companion to reassure those suffering from dementia in new or unusual situations. This project in particular shows that a dog may aid a sufferer to stay on longer in his or her home—an important ambition that many noble Lords have highlighted in this debate—and may even slow the onset of this terrible disease.
Real-life examples of how cats promote well-being and play a vital role in an individual’s care appear regularly in the excellent magazine, The Cat, which is a publication I do look at regularly and is published by Cats Protection. In recent months, there have been stories about how their cats helped an owner to cope with epileptic seizures, helped a seven year-old boy to deal with the debilitating problem of selective mutism, and comforted a 17 year-old girl confined to bed with the life-long incurable condition of Behçet’s syndrome. One particularly moving story related to how a visit from a cat to an elderly lady who was in a hospital ward and suffering from severe dementia got her to speak for the first time in three months.
There are many other examples. Indeed, I think of the experience of my own mother. In the last year of her life, she was widowed, immobile and more or less housebound. Her faithful cat, Toby, was her constant companion. She talked to him, laughed with him and moaned and shouted at him; he cared for her in return. Indeed, he lay on her bed as she died. That companionship is a priceless gift, which this legislation should protect. Let me explain briefly how these amendments might help, as I ask my noble friend the Minister to consider these three issues.
First, one of the many problems that those who are elderly with a pet can face is how to care for it when they go into a care home. There are some amazing care and retirement homes which welcome pets but others do not have a policy on them, which can cause anxiety and distress to those who need to enter one. For a person to have to give up what might be their sole companion is a tragedy for an owner and for the pet. It also adds to the growing burden on many animal charities, which are having to take increasing numbers of abandoned pets as economic problems have bitten hard in so many families.
Secondly, it would encourage those at the front line of care—GPs, in other words—to become aware of the role of a pet in an individual’s life. Many GP surgeries include in their information about the over-75s whether a companion animal forms part of the client’s household. The signal sent from amending the Bill would encourage many more GPs and clinical commissioning groups to ensure that this important information is routinely collected for all age groups, including the elderly.
Finally, the Bill needs to be drafted widely enough in its definitions of well-being and needs assessments to allow for money, whether budgets or direct payments, to be used where necessary to support an individual who perhaps wishes to retain a pet but is having problems due to health. Professional pet-sitting or feeding may be needed when an individual is hospitalised and where there are no friends or family to help. Knowing that a pet is being cared for can help encourage otherwise reluctant individuals to go into hospital for treatment and relieve anxiety. Equally, in cases where a care assessment shows that a companion animal would bring individual health benefits, money may be needed to help an individual obtain a companion animal. There are many examples of such budget programmes in other countries—most notably, I think, in Australia—where health and local authority budgets are pooled to provide companion animal support programmes. This principle should be embedded in regulation and statutory guidance for all relevant implementing bodies.
Most importantly of all, these amendments would ensure that the role of companion animals is given proper recognition and protection through an individual’s care journey. Some may be too vulnerable or frail to request that their beloved pet is taken into account when their care is planned. Others may need help or assistance in retaining their companion. Others still may not be aware of how a cat or a dog could improve their quality of life, ease their loneliness or help tackle a chronic disease. The amendments I have tabled would ensure that this happens as a matter of routine and is not left to chance in the way that, tragically, too often happens now.
Baroness Masham of Ilton
My Lords, today is bowel awareness day. I have been chairing a reception for bowel care this afternoon. Two of the speakers had disabilities: one with multiple sclerosis and one a tetraplegic, paralysed from the neck down. Both needed bowel care and they both said that dignity and respect were so important. Amendment 78ZA should therefore be a must for the Bill. There are many important amendments in this group, including those on well-being and companion animals, which I support. Happiness is something we should all aim for.
Baroness Tyler of Enfield
My Lords, I add my support to Amendment 78ZA, to which my name is also attached. The noble Lord, Lord Bichard, has already spoken very eloquently of the reasons behind the amendment. Dignity and respect are absolutely fundamental pillars of well-being, which is why I would like to see these words spelt out in the Bill. Well-being is unattainable without dignity and respect as central components. In saying this, I am conscious that the public’s opinion on this matter is one of pessimism and distrust of the current social care system. In a recent survey, only 26% of the public felt confident that older people receiving social care are being treated with dignity. If the public do not trust their loved ones in the hands of the social care sector, what hope is there that well-being is being promoted?
We have recently seen and heard of shocking failures in the care of older people in both the health and social care sectors. These very harrowing examples serve to illustrate the importance of enshrining dignity and respect as a critical part of well-being in order to try to change the culture among care workers in the health and care sectors, to ensure the transformation of services that this Bill is intended to bring about and to have the sort of compassionate care that we all like to see. Dignity will also be very important when it comes to secondary legislation and specifically to the eligibility criteria. It is vital that these criteria have regard to the well-being principle. I am happy to be corrected about this if I am mistaken, but the draft feels very health-and-safety-oriented and does not mention dignity at all.
I would have liked to add my name to Amendment 79 about including well-being as part of the Secretary of State’s duty, the reasons for which have already been set out very clearly. The very wide-ranging definition of well-being, set out in The Care Bill Explained, makes it absolutely clear that for the well-being principle to be made a reality it would need to be the joint responsibility of a wide range of partner agencies, nationally and locally. Government action on key issues such as welfare, transport and housing are likely to have a very distinct impact on well-being at an individual level.
We rightly hear a lot about the importance of joining up health, social care and wider services: horizontal integration, if you like. For any system to work as it is intended and to be fully aligned it must be, as I said at Second Reading, vertically integrated as well to make sure that everyone, from the Secretary of State downwards, has the same objectives and is pulling in the same direction.
Baroness Greengross
My Lords, I support Amendment 78ZA. Six years of serving on the Equality and Human Rights Commission taught me that if we embedded dignity and respect into the training of staff we would avoid many of the tragedies we have read about. This applies, right across the board, to staff in health, social care and housing. It is essential that we take dignity and respect as very serious elements of the training of all staff who come into contact with frail and vulnerable people.
Earl Howe
My Lords, the well-being principle in Clause 1 was devised on the basis of the Law Commission’s report on adult social care which this part implements. The report recommended that the new statute should set out a single, overarching principle that adult care and support must promote or contribute to the well-being of the individual. Not least in the light of our debate at Second Reading, I can therefore understand the noble Lords’ intention in tabling Amendments 78 and 79. It is to ensure that any functions that the Secretary of State exercises under this part take into consideration how such provisions will impact upon people’s well-being. I can give the Committee what I hope will be a welcome reassurance on that issue and, in the process, a rather better and fuller answer than I gave at Second Reading.
It is already the case that the Secretary of State must have regard to the general duty of local authorities to promote an individual’s well-being when making guidance or issuing regulations. This is because, when making regulations or issuing guidance, the Secretary of State must consider how local authorities can fulfil their statutory obligations. He cannot ignore those obligations and I believe this addresses the central concern of the noble Lord, Lord Hunt, and others who have spoken to the amendment. The question is whether the Bill should go further. The Government do not believe that it is appropriate to apply the well-being principle directly to the Secretary of State. The well-being principle is intended to apply at a very real, individual level. It has been designed to frame the relationship that exists between the local authority and the individual adult, in effect setting out how it is expected the local authority will behave when making a decision, or doing anything else, in relation to a person needing care and support or to a carer. The Secretary of State does not act at this individual level, and I am still reluctant to make any amendment which might be seen to detract from this important legal reform.
Having said that, I have listened with care to the strength of feeling in this debate, not least to the point made by the noble Baroness, Lady Pitkeathley, about the Secretary of State’s duty to have regard to the NHS constitution and whether there was something comparable that we could devise in this context. That is an interesting comparison and, while I am not yet convinced that it is fully comparable, I am happy to take the points that have been made away with me and give this matter further thought before the next stage of the Bill.
Amendment 78A seeks to bring in to the well-being principle the idea of spiritual well-being and I listened with care to my noble friend Lady Barker who spoke to this amendment. The Government believe that the clause, as it is already drafted, takes such a factor into consideration. Clause 1(2) sets out that well-being means an individual’s well-being in relation to emotional well-being. The Government believe that emotional well-being incorporates the concept of spiritual well-being.
I turn to Amendment 78B, which proposes that local authorities must take into consideration an individual’s beliefs, values and past practices. While we share my noble friend’s intention in this regard, we believe that the clause as it stands already incorporates the idea that people’s beliefs and values should be taken into account when a local authority has regard to an individual’s views, wishes and feelings.
The second part of the amendment would be to ensure that “past practices” were also taken in account. I reassure my noble friend that we will be setting out in guidance the importance of taking into consideration, when planning a person’s care, their views and feelings as well as considering any practices in the past that have been important to that individual.
The noble Lord, Lord Bichard, highlights the importance of dignity in care in his Amendment 78ZA, and he spoke about that concept very powerfully. I am pleased to say that the Government agree that this is important, which is why we amended the Bill to make an explicit reference to dignity into the well-being principle, following pre-legislative scrutiny. With respect to the noble Lord, I cannot agree with him that the word has somehow been lost; it is right there on the page.
I turn to Amendments 78E, 87K and 88J, tabled by my noble friend Lord Black of Brentwood. These amendments focus on the very important topic of pets. The Government have considered this issue carefully since the amendment was tabled, and we believe that the Care Bill already allows for the consideration of pets. First, Clause 1, the well-being clause, provides that local authorities, when exercising any function under Part 1 of the Bill, have a duty to promote the well-being of an individual. Well-being is composed of many aspects, including emotional well-being. A pet might be so important to an individual that their emotional well-being would depend in some way on their pet. If that is the case, a local authority will have to take it into consideration.
Furthermore, Clause 1(3)(b) sets out that in exercising any function under Part 1 of the Care Bill a local authority must have regard to an individual’s “views, wishes, and feelings”. This could include how an individual feels about a pet, and their wishes for the pet. Clause 9, which covers the assessment of needs for care and support, also allows scope for pets to be taken into consideration in the assessment process. As Clause 9(4)(a) sets out, a needs assessment must take into consideration a person’s well-being. This could certainly include an individual’s pet, from which they derive a lot of emotional well-being.
I turn to Amendments 78D and 88L. The Government believe that it is more important than ever that care and support services operate in tandem with health services. The Government have committed to breaking down barriers between health, care and support, as well as encouraging co-operation, integration and joined-up working between local partners. The Government believe that the Care Bill already allows for such co-operation to occur, and I shall explain how. First, Clause 1(2)(a) makes it clear that the well-being principle incorporates physical and mental health. Local authorities must therefore already consider a person’s health when exercising any functions under Part 1. Secondly, Clause 3 details how local authorities must exercise their functions under Part 1 with a view to ensuring the integration of care and support with health provision, where they consider that this would promote the well-being of an individual.
Regulations on assessments for care and support are also relevant. As Clause 12(1)(f) sets out, regulations may set out when a local authority must consult someone with expertise before undertaking an assessment. Regulations may also set out conditions around co-operation with the NHS, by specifying the circumstances in which the local authority must refer the adult concerned for an assessment of eligibility for NHS continuing healthcare.
The noble Lord, Lord Hunt, expressed the view that the eligibility regulations do not sufficiently promote integration. I note the point that he made and look forward to debating this in perhaps fuller measure when we come to discuss eligibility. However, I ought to point out that the draft regulations published last week are subject to consultation, and I am sure that the discussion will explore the points that he made.
My noble friend Lady Tyler said that the regulations do not mention dignity specifically. I think that they have to be read in context. The well-being principle, including the reference to dignity, applies to the assessment of the adult’s needs and to the local authority’s determination of whether those needs are eligible.
To return to my noble friend Lord Black’s amendment on companion animals, we are clear that there should not be any limitations on the uses of direct payments, which was an issue that he raised, as long as they are used to meet needs for which they are paid and not in a way that is unlawful. The key is that direct payments are used to improve people’s outcomes.
I understand the intentions of noble Lords in tabling these amendments but I hope that they feel reassured that they are not necessary, although I will take back the specific issue that I referred to earlier. In the light of that, I hope that the noble Lord, Lord Hunt of Kings Heath, will feel able to withdraw the amendment.
Baroness Masham of Ilton
Before the Minister sits down, I would just like to ask him: does he not really want to get things right? When there were problems at Mid Staffordshire, people were desperately thirsty, drinking out of flower vases, and were lying in their own refuse in their beds. Surely dignity must be written in all over the Bill.
Earl Howe
I agree that dignity is a very important concept, which is why we expressly amended the Bill to include that word right at the beginning. Clause 1, which defines the well-being principle, is the foundation for everything that follows. While one could pepper the Bill with references to the word “dignity”, I am not sure that that would add very much in practice.
Lord Hunt of Kings Heath
My Lords, I am grateful to the Minister for that response. I hope that he will reflect a little on the amendment from the noble Lord, Lord Bichard, and the noble Baroness, Lady Tyler. I understand what he is saying about the words in the Bill; I think that noble Lords just wanted to find a way of giving that greater focus. That will be well worth giving further consideration to. With regard to the amendment from the noble Baroness, Lady Barker, I am grateful for the reassurance that the Minister has given.
On Amendments 78 and 79, the Minister has essentially said that he still sticks to the general principle that the well-being clause applies to local authorities and individuals. The point here, though, and the reason why I am glad he is taking it away, is a point raised by a number of noble Lords: this legislation, which is a wholesale recasting in the light of the Law Commission’s work, is likely to endure for many years to come. That is why it is so important that the link between the Secretary of State’s duties, and those of local authorities, and the Secretary of State’s powers regarding guidance and regulations are brought together. I hope that the Minister will find a way of getting this into the Bill.
The noble Baroness, Lady Campbell, was very eloquent when she talked about what happens if health and social care do not provide an integrated service. She gave an example of a very distressing case of someone who could be out of hospital and back into work. This was down to a failure of two public bodies to sort things out. I know that the Minister says that in fact the legislation is okay; the problem is that these public bodies will continue to fail people who fall between two stools. These bodies do not seem to have an understanding that it is imperative for them to look after the interests of those individuals. I hope that the noble Baroness might return to this at a later stage.
The noble Lord, Lord Black, made some wholly persuasive arguments. My noble friend Lady Wheeler reminded me that Canine Partnerships is another organisation that is very much involved in pet companions for people with stroke, epilepsy and other illnesses. I myself have come across organisations in Birmingham in connection with the health service that do a fantastic job. All I would say is that if the noble Lord put this to a vote, the Opposition would be right behind him, so let us see. I beg leave to withdraw the amendment.
London Finance Commission: Raising the Capital
Lord Harris of Haringey
To ask Her Majesty’s Government what assessment they have made of the findings and recommendations of the report of the London Finance Commission Raising the Capital.
Lord Harris of Haringey
My Lords, I am grateful to all noble Lords who have put down their names to speak in this short debate. As somebody who has lived in London all my life, I should explain that my starting point is that London is the greatest city in the world. I would find it difficult for anyone to argue against that. I spent 26 years as an elected politician in London: as a councillor, council leader, chair of the Association of London Government, and member of the London Assembly. I believe that the London Finance Commission should be congratulated on the report that it has produced.
I should explain that the London Finance Commission was established by the Mayor of London and London Councils, which in my time was called the Association of London Government. It was an independent group, chaired by Professor Tony Travers, who is probably the country’s pre-eminent expert on local government finance, and it contained cross-party representation and senior representatives from elsewhere in the United Kingdom, including Stephen Hughes, the chief executive of Birmingham City Council. It published its final report in May, and its recommendations have been accepted by the Mayor of London and by Mayor Jules Pipe, on behalf of London Councils, with both Conservatives and Labour accepting. It has been supported by all four parties on the London Assembly.
The context for this report is that London is the engine that drives growth in the rest of the UK economy. I will give just one example. Forty-one thousand jobs were supported outside London last year simply by Transport for London’s supply chain—24,000 of them in the North and Midlands. That is more than the number directly employed by Transport for London—London Underground, buses and so on—in London itself. In addition, 62% of Transport for London’s procurement spend went to suppliers outside London, with the bulk outside the south-east. That is one example of the extent to which London drives the rest of the UK economy. London also makes a net contribution of over £5 billion in tax to the rest of the country each year.
Even without my bias, London is universally acknowledged as one of the leading international cities in the world. To quote the report:
“It is difficult to envisage a scenario in which London’s economic decline would be favourable for the rest of the UK and we reject the notion which is occasionally articulated that London should be constrained in order to ‘balance’ UK economic growth. In most markets, London is competing as much, if not more so, internationally than against other UK cities. Many foreign direct investment projects that London wins in competition with other international cities provide benefits for other regions, and many tourists who visit London go on to other parts of the UK. Other international cities vie for investment, visitors, students and talent, and in the global competition, London risks falling behind and, in respect of infrastructure, further behind”.
That is the context in which this report was prepared.
London's population is equivalent to those of Scotland and Wales combined—and probably to that of Northern Ireland as well if those here in this capital city illegally are included in the count. Its economy is almost double the size of Scotland and Wales combined, but as the report says,
“while the dynamic of devolution continues to offer new powers and financial freedoms to the governments in Edinburgh and Cardiff (and, indeed Belfast) there have been no proposals to increase the autonomy of London government”.
The commission received no evidence as to why London and other English city regions should not be afforded the kind of decentralised power offered to Scotland, Wales and Northern Ireland.
Yet London’s international status and its continued ability to help drive the rest of the UK economy cannot be taken for granted. Historic population growth in London has already placed considerable pressure on the full range of public services and local infrastructure and this is set to increase from a growing population with increasingly complex demography. London's population is growing at a faster rate than any other region in the country. By 2020, its population will exceed 9 million. London’s school-age population grew by 107,000, at a rate of 8.2%, in the past decade—the fastest regional rate.
London has an inherently mobile and changing population. In 2011, it had approximately 70,000 short-term residents, over a third of all short-term residents in England and Wales. It is estimated that 240,000 households live in overcrowded conditions, with 90% of London’s housing stock built before 1991, and new housing supply meeting housing need in only six of the past 20 years. This means that London has the most overcrowded households in the UK, living in the oldest homes, where the market is not delivering sufficient new homes to match current and future demand.
However, if London’s infrastructure crumbles and the quality of life deteriorates, its ability to attract and retain international business will decline, and that cannot be good for the rest of the United Kingdom. It is economic growth that the commission sees as the potential prize of a further shift of financial and fiscal control to London. As the city population grows to 9 million, then perhaps 10 million by 2030, there will need to be massive investment in enabling infrastructure simply to accommodate these new residents and, indeed, commuters. Beyond this investment to keep pace with the population, the commission is convinced that London would be better able to prioritise decisions about that investment. After all, Londoners know they need new railways, schools, homes, waste facilities and streets. Because of their day-to-day dependence on physical infrastructure, London voters are much more likely than voters elsewhere in Britain to prioritise spending on longer-term investments.
If London had enhanced fiscal capacity to back such investment, there could be an enhanced level of capital spending which would, in turn, produce additional growth and tax yield. London government could then reinvest higher tax revenues in more infrastructure and a virtuous circle would be created. As the report acknowledges:
“London is not a city state. But it could have a greater degree of self-government and thus, in our view, be better governed. The same is true for other city regions. No one can seriously any longer believe that Whitehall always knows best”.
In terms of fiscal autonomy, London is an outlier compared to the other cities that the commission studied. By comparison, it relies heavily on transfers from central government, with 74% per cent of its income received through grant, compared to 37% in Madrid, 31% in New York, 25% per cent in Berlin, 17% in Paris and only 7% in Tokyo. Moreover, London does not have comparable access to the diverse tax bases enjoyed in other cities.
I understand that, in correspondence with the chair of the commission, no less a person—if such a thing were possible—than the Chancellor of the Exchequer, the right honourable George Osborne, expressed support for the commission and stated that,
“under the right conditions, fiscal devolution has the potential to increase the financial accountability of local government and promote additional growth”.
The commission accepted his suggestion that the proposals should be judged against three tests. First, they should be based on evidence; secondly, they should have cross-party support; and thirdly, they should be without detriment to the rest of the UK. The achievement of the commission is to meet those three tests. The report is evidence-based. It has the support of all four parties on the London Assembly, all three parties in London Councils, the Corporation of London and significant, leading sections of the London business community, including the London Chamber of Commerce and London First. What is more, what is proposed would not be to the detriment of the rest of the UK. Indeed, it is likely to be of benefit in sustaining the UK’s future growth.
The commission proposed that any devolution of tax-raising powers would be offset by a reduction in government grant. Moreover, many of the commission’s recommendations could be replicated in other cities. Some cities, such as Manchester, have already evolved governance models from which London could learn.
The report, No Stone Unturned, of the noble Lord, Lord Heseltine, who is not in his place, made a parallel case for devolution to city regions. I hope that the Minister will agree that technical working parties should be established by her department and by the Treasury, with the Greater London Authority and London Councils, to examine the detail of these recommendations.
The London Finance Commission report meets the Chancellor’s conditions. It provides a blueprint for taking forward the localism agenda that the Government espouse. It protects and enhances the position of the rest of the United Kingdom. Above all, it would ensure that London continues to be the greatest city in the world.
Lord Patten
The first-order question to ask is whether there is a problem in London, and, if so, whether this report answers it. I do not think that London itself is a problem. In the 1940s, the French scholar over the Channel, Jean-François Gravier, wrote a great book, Paris and the French Desert, in which he reflected on the absolute dominance of the capital in French national life, sucking energy from the rest of the country. It is an odd reflection, which he would certainly not have predicted, that London is the city with the fifth or sixth largest French population, because of the large number of extremely welcome financial and professional people who have come here en masse to escape the Hollande terror.
London has dominated English life for a very long time—certainly since Cobbett’s day. Now it is the most dominant city in Europe, and one of only two or three true global megalopolises. I agree entirely with the noble Lord, Lord Harris of Haringey, who in his tip-top speech said that London was probably the greatest city in the world, among the two or three other megalopolises—the term was coined by another great French geographer, Jean Gottmann.
This has not happened because it was planned or because of governance. It happened of its own volition and vigour, always—at least until recently—more or less free from, and often despite, the actions and policies of national and local government of all colours. Truly, Mr Livingstone and his successor, Mr Johnson, inherited a going concern. This has not happened overnight. I do not think that this is clearly recognised in the report, which in many ways seems to think that London will run into problems caused by its own success, and that those perceived problems will be sorted out only by more government and more power going to London government. So much for lack of concentration.
All this is not surprising, because the commission, with its solemn, grand-sounding title, is a creature of the present London government, and so generally starts from the point, “Please give us more government and more powers as quickly as possible”. Yet already the United Kingdom is one of the most overgoverned countries on earth. This may well be reaching a satiation point rather than a tipping point.
There is a constitutional change industry that promotes constitutional change as the only way to deal with any issue facing any part of the United Kingdom. Hosts of experts, otherwise indigent scholars and think tanks without number and no visible means of support are always proposing more constitutional change as a solution. To suggest that constitutional change, more power and more government is a cure-all for London is a delusive and tinsel thing.
In my experience, most Londoners are much more concerned with the present system of governance and whether it is delivering the goods. I will give one very rapid example: namely, the growing number of rough sleepers in London. The number is indisputably rising, not going down, at the moment. This is a tragedy. I walk along Victoria Street to our flat down the road by the cathedral every night. Since late May, just opposite New Scotland Yard, where Strutton Ground meets Victoria Street, there has been a growing number of rough sleepers, tragically, right under the window of the commissioner for the metropolis. I walked past them tonight at about 6.30 pm and counted seven. They were all clearly British. Two, possibly three, were extremely jolly Scotsmen. That is not a xenophobic remark. They deserve help and not criticism for being there. It is extraordinary, in the middle of what the noble Lord, Lord Harris of Haringey, called one of the greatest cities, if not the greatest city, in the world, that for the past six or seven weeks we have had a growing city of people sleeping rough on the streets. Where is the help coming from? Is the Minister in contact with the mayor, or with other authorities that could help with this issue?
That said, this thought-provoking report—it certainly provoked me—seems to set London, despite the somewhat disingenuous claims that of course it is not a city state, on a course of morphing little by little into becoming such a state. That is not in the national interest, unless it is set in the context of whether we need more or less government in the United Kingdom as a whole.
The report proposes the transfer of the full suite of property taxes to London government, and the assignment of income tax in the same way. There is also a wonderful aside:
“London government should be able to introduce smaller new taxes”.
I look forward to that innovation. How dear Mr Livingstone would have relished having that power in his hands in the old days.
London can properly be viewed only as part of the kingdom as a whole. It will continue to develop apace without many of these proposed changes. It needs to govern better in the first instance. I wonder whether the powers of scrutiny that the London Assembly has are adequate.
In the mean time, the foreword to this report states:
“London is not a city state”.
If all the report’s proposals were implemented overnight én bloc, London would be more than half way to becoming a city state, and that would not be in the national interest.
Baroness Hamwee
My Lords, I welcome and support this report, and did not want to miss the opportunity of saying so from the Liberal Democrat Benches just because I had not had the opportunity I would have liked to produce a perfectly honed and intellectually challenging speech. Sometimes it is more important to say these things than to be proud and retiring.
It is always nice to find one’s prejudices confirmed. I was not surprised at the commission’s finding, or belief, that there would be more jobs and growth if London had more financial autonomy. It goes without saying that it would need to be used well. What is proposed does not seem to be so very extreme. Central government would retain about 88% of taxes paid in London, as against around 93% now.
Devolution in 2000 was very welcome—to me at any rate. The noble Lord, Lord Harris of Haringey, remembers it as well as I do. I declare an interest as a former member of the London Assembly and, some years ago now, a councillor in a London borough. It was welcome to the extent that there was devolution, as distinct from the hoovering up of powers from the boroughs. The noble Lord, Lord Patten, talked about more government, but normally one is talking about a rearrangement.
It would be disappointing if London government were not ambitious to do more—as are the Scots, leaving aside independence, and the Welsh. I am well aware of views from other parts of the UK about the London-centric nature of so much of our government. Non-Londoners might say, of the contents of this report, “Well, they would say that, wouldn't they?”. However, the noble Lord, Lord Harris, mentioned the membership of the commission—and they look to be a pretty independent-minded bunch of individuals.
What is good for London tends to be good for the UK as a whole because of London’s role in the wider economy. Knowing of the debate that is going on about HS2, I rather tremble about venturing that way, but, as regards infrastructure, one has only to ask not just any Londoner and not just any visitor but any company considering locating here.
Of course, housing is a hugely important part of the infrastructure and one about which, like other noble Lords, I feel very strongly, meaning that I support borrowing, including borrowing by the boroughs, to build housing within the prudential rules. That is not least because London’s government, representing Londoners and understanding what is going on in London, knows what is needed. Too often, the social housing element of bigger schemes seems a grudging add-on. It is easy for the developer and it is often identifiable just by looking at the development. Among other things, I think it is offensive.
In the foreword to the report, Tony Travers says that the message from the evidence was,
“clear and unanimous: London’s government needs to be given greater freedom to determine and use the resources raised from taxpayers”.
I read the subtext as including “clarity” and “transparency”. I suspect, too, that introducing new, smaller taxes may not have an entirely smooth path but, as someone who thinks that there is advantage in taxation, I do not dismiss that proposal.
Of course, the mayor should use his existing powers. It is not so very long since prudential borrowing was introduced in the form that it is now, and it does not advance the argument for new powers if the current ones are unused or underused. The mayor could fund a significant increase in affordable housebuilding.
The noble Lord, Lord Patten, referred to rough sleepers. I, for one, am not convinced that centralisation or the reduction of taxes would assist that.
If central government resists these proposals, it will not be the first time that any central government has grasped for arguments as to the importance of central control. I, too, lighted on the quotation from the Chancellor of the Exchequer. It begs the question of what the right conditions are, as the noble Lord, Lord Harris, said.
A Government who believe in entrepreneurship should apply the same thought—that freedom facilitates creativity and success—and apply that to finances, with the raising and spending of taxes. The dynamic in a wider context is towards more financial autonomy. I welcome the Raising the Capital report and I thank the noble Lord, Lord Harris, for the opportunity to say so.
Baroness Valentine
First, I declare that I am chief executive of London First, a not-for-profit membership organisation for businesses based here in the capital. I am also a board member of Peabody housing association.
I congratulate the noble Lord, Lord Harris, on securing this debate today. The London Finance Commission and its report on local government finance might sound arcane but its analysis is in fact at the heart of how we can stimulate growth, not just in London but across our country as a whole.
The commission’s starting point is that the Mayor of London should have a long-term, high-level capital investment plan for the city—a position that manages to be banal and radical at the same time. It is banal because surely every great city ought to have such a plan, and it is radical because local government in the UK just does not do that sort of thing, not least because it does not have the powers or the cash to finance and fund it.
So let us pause for a moment to consider London’s starting point. As the report politely puts it, London, in fiscal autonomy terms, is an,
“outlier compared with other cities”.
Nearly three-quarters of the GLA’s income is through grant, compared with roughly a third in New York and less than 10% in Tokyo. The core competence for a London mayor, therefore, must be good lobbying skills with central government, and particularly the Treasury, to try to get some of our money back at every spending review. This is no way to run a world city and it needs to change. That need is becoming ever more urgent as London accelerates towards a population of 10 million, and maybe more, by 2030.
The commission recommends, in essence, that London government takes ownership of a suite of property taxes raised in London—council tax, business rates and stamp duty land tax—and uses them to create a stable funding stream to support a long-term infrastructure investment programme. This does indeed have the potential to create a virtuous spiral for both the city and the Treasury. New infrastructure will support private sector investment, which creates jobs, adds to private consumption and leads to greater tax revenues for City Hall and Whitehall. This, in turn, supports further, future investment. It is, in my view, a powerful analysis, persuasively made, and a conclusion that could equally be applied to other great cities.
It is also important to emphasise that this is not a bid for more cash for London. The commission’s modest proposal is that the property taxes I referred to earlier simply substitute, pound for pound, existing government grant. However, this simple change has two merits. The first is that it gives much greater certainty to London government that it will have the revenue, over time, to fund investment. This means that it can plan into the long term and, potentially, borrow against that funding. This is substantially more efficient than annual, or even five-yearly, spending settlements. The second is that London government then has a share in growth. If its investments generate prosperity, it has an automatic share in that prosperity. It does not have to go back to the Treasury to haggle.
Those changes would be good, too, for central government in at least three ways. First, it could focus on driving the big policies such as—dare I say?—high-speed rail, which only national government can do, rather than fiddling around with local matters that can best be done elsewhere. Secondly, local government would have a real incentive to support growth. This goes with the grain of the Government’s localism agenda—and puts it on steroids. While London would keep the growth in London’s property taxes, the Exchequer would get the growth on the really big-ticket items such as income tax, national insurance and VAT. Thirdly, local politicians would no longer be able to blame all their ills on the Treasury. If they want more cash, they can make the case for taxing their voters more, or not.
As ever, some details require further analysis—for example, the mechanism to align business rates with council tax and the need to review the levels and banding of the latter. We cannot rationally or credibly base our property taxes on 1990 house prices. There also needs to be a more effective and formal mechanism through which London government consults and listens to business over its budget plans. This is particularly relevant to London, where many of those responsible for generating the city’s wealth do not have a vote on its governance.
However, those important points do not detract from the fundamental strengths of the commission’s conclusions. London, like our other great cities, needs greater freedom from central government if it is to generate the growth, jobs and prosperity that we all wish to see. The Government have recognised this in their localism agenda; the noble Lord, Lord Heseltine, confirmed it in his growth analysis; and the London Finance Commission brings yet greater depth to the arguments. It is time to stop talking about devolution and wrest the cold, although all too alive, hand of the Treasury from the management of our great cities.
Baroness King of Bow
This report sets out the role that financial autonomy can play in driving economic growth. A greater tax base for London means a greater incentive to promote growth and, as the report’s conclusion states, this would be good news not just for London but for the whole country. It is amazing to consider that New York keeps over 50% of taxes levied there, yet London keeps only 7%. London needs to be freed up to compete with the other leading global cities.
On the whole, it is fair to say that I am not a huge fan of this Government’s economic policy—it seems to have almost pushed us into a triple-dip recession—and therefore I am not known for quoting its key architect, George Osborne, but perhaps I may change the habit of a lifetime and quote him very approvingly. The Chancellor of the Exchequer stated that,
“under the right conditions, fiscal devolution has the potential to increase the financial accountability of local government and promote additional growth”.
I was also very impressed by the three tests the Chancellor of the Exchequer set the commission, which my noble friend Lord Harris has already quoted. His proposal was that whatever the commission came up with, its recommendations should be judged against three tests; namely, whether they were evidence-based, whether the proposals had cross-party support and whether they were without detriment to the rest of the UK. Those are excellent tests and I am sure that we would all like a lot of legislation to be benchmarked against them, especially in the current climate.
However, the real issue is how we are going to deal with a huge and growing city, and support growth in London. It is estimated that the infrastructure spend required to support London and allow it to thrive will need to be about £75 billion by 2020. Like the noble Baroness, Lady Hamwee, I feel strongly that housing is one of the most important aspects of infrastructure, although it is not always technically considered to be infrastructure, along with transport and so forth.
As regards housing, the London Finance Commission states:
“Measures to shift public funding from personal subsidy to investment in built assets should be further explored”.
I have argued for that since I became an MP many years ago. The London Finance Commission has put that in very polite terms but the lack of affordable housing in London presents a massive, ongoing crisis. London workers need somewhere to live. Not everyone can commute into London, especially those on modest incomes which do not allow for the cost of the commute. If we do not have that investment in bricks and mortar, only the very rich, or the very poor in whatever social housing is left available, will be able to live in the capital city. That will inhibit growth for our capital, and that is putting aside for one moment the moral obligation that I think is there as well. Therefore, as has been stated, one way in which to resolve the issue is to move from individual subsidy to bricks and mortar. I trust that the Minister will press the Government to look at this issue with urgency.
While I am on housing, I cannot help but comment on what the noble Lord, Lord Patten, said. He decries the concept of more government but is concerned about rough sleepers. The biggest drop in the number of rough sleepers was under the leadership of Louise Casey who was tasked with reducing rough sleeping. Although she is one of the most innovative civil servants you will ever come across, even she would admit that a lot of her success was down to the fact that investment was quadrupled. A laissez-faire approach is the last thing that will reduce the number of rough sleepers on our streets. This cross-party report clearly argues that such an approach is also the last thing that will deliver a high-level investment plan for London.
The report essentially argues for a more grown-up relationship between London and central government. It argues that London needs greater freedom to borrow. Most critically, that would be subject to London’s own self-discipline. It is only where that self-discipline is proven that such freedom should be granted.
In summary, we do not want a city state. We want a world city which will support the growth of the whole of the UK. I believe that that is what this report sets out. It provides the framework for that and I sincerely hope, notwithstanding the politics between the Mayor of London and the Prime Minister, that this report will be acted upon.
Lord Bilimoria
My Lords, I thank the noble Lord, Lord Harris, for initiating this debate. He said right up front that London is the greatest city in the world and I could not agree more. It is the greatest of the world’s great cities. He congratulated the London Finance Commission on its report, Raising the Capital. I had the privilege of serving on mayor Boris Johnson’s Promote London Council, which was a great experience. It came up with what ended up being London & Partners and had huge success. It really understands London and looks at its competitiveness.
It struck me that few cities in the world—the report did not really touch on this—are a political capital, a government capital and a financial business capital. London is one of them: think about Washington, New York, Delhi and Mumbai. We have a huge advantage. But for London to develop I think that autonomy would help. Although Crossrail is going ahead and will make a huge difference to London and the country, we still have the problem of the third runway at Heathrow being delayed and delayed. Our airport infrastructure is creaking. We are losing our competitiveness.
Although tourism brings in well over £100 billion to the economy of Britain and London brings in a huge proportion of that, the most photographed building in the world is the Eiffel Tower. The second most photographed building in the world is our wonderful Houses of Parliament. Why is that? Is it because we do not belong to the Schengen scheme, which would advantage this country so much? Does the Minister agree that we should join the Schengen scheme? That would bring into this country even more tourism, business and investment which would benefit London.
The other aspect that the report did not really touch on was the whole relationship between the City of London and London. Of course, we all know the joke that the lord mayor of London makes the money and the Mayor of London spends the money. We have the richest and most important square mile in the world. Even after the financial crisis, the City of London is still the number one financial centre in the world and we are proud of it. But are the Government really clear about the relationship between the City of London and London? Is that a fair relationship? The report does not address that and I would be very interested in the Minister’s view.
As regards devolution, the future of London and its success is a prize for the whole country. However, in the latest results on productivity, when London was compared with other countries in Europe for example, its productivity was average at £58,000 per worker. Cities such as Paris, Frankfurt and Brussels were higher. Stockholm was number one on the list. Yet London’s productivity is 44% above the UK average. That is a serious issue. We really need to get the productivity of this country up in a big way and London’s productivity could be so much more.
The other point is that cities are the engines of growth for an economy. The noble Lord, Lord Patten, said that we are the most dominant city. In the United States, the Olympic Games did not take place in Washington or New York. Another city was chosen. Here, the Games took place in London and we are very proud of that.
We have not spoken about Europe and the European Union. In my role as the founding chairman of the UK India Business Council, I always see Indian businesses looking on the UK as a gateway into Europe, although in fact they are looking upon London as a gateway to Europe. Again, that would help London in its competitiveness. We must remember that outside London there are other great cities in Britain. Recently, I was in Liverpool where I spoke at the Accelerate Conference. Next year, the International Festival for Business will take place in Liverpool, showcasing the whole of Britain. It is important that in promoting London and giving autonomy—I will come to that later—there is also autonomy for other cities, which will unlock the UK’s economic potential.
The other thing that the report does not really emphasise enough is that we have the best of the best in the world in professional services in London when it comes to lawyers, accountants, insurance and banking. We need to enhance that competitiveness. However, the Financial Times states:
“The Greater London Authority has just one tax—the council tax—from which it receives a precept alongside the other local authorities within its boundaries, while Tokyo raises 16 separate taxes and New York has an array of levies, including property, sales and income taxes. Berlin wields a wage tax, among others, while Frankfurt receives a share of VAT. The drive by London’s authorities for greater leeway on tax is taking place amid a wider devolution movement in Britain”.
City deals are about to take place and incentives will be given to eight large urban centres in Britain. Can the Minister say why those incentives have been given to all those cities? Should they not also be given to London?
I chose London as the headquarters for my business because I think it is the best place in the world to have a global headquarters. I think what the London Finance Commission suggested would without doubt help London and our whole country. More flexibility and more autonomy would unleash London’s potential.
Lord McKenzie of Luton
My Lords, like other noble Lords, I start by thanking my noble friend Lord Harris of Haringey for initiating this debate on the London Finance Commission's report, Raising the Capital. It touches on matters which spread across a range of policy areas and which have broad implications, not least for macroeconomic management of our country. Noble Lords may understand, therefore, if I forgo the opportunity of making new policy announcements this evening—however tempting—but say that we view this report as a serious piece of work that requires proper consideration and analysis. We recognise that it has strong cross-party support and, as the report suggests, its recommendations have potential application for cities beyond London.
The central proposition of the report is that London can grow faster and create more jobs if it has greater autonomy in managing its own affairs, particularly when it comes to planning infrastructure. That autonomy would come from relaxing some of the borrowing rules applicable to local authorities and from devolving certain tax revenue streams. The report’s recommendations are underpinned by research that demonstrated that, compared to other major cities, London has very little fiscal autonomy, although the report recognises that academic research is inconclusive on whether increased fiscal autonomy has a measurable effect on growth.
We recognise, as does the report, that London is an economic powerhouse, one of the strongest growing regions in the UK and one of the world’s greatest cities —indeed, the greatest city, as my noble friend said. That success must be sustained not just in the interests of Londoners but in the interests of us all. It is, after all, our capital city. We should look to it for help to drive our national growth.
We also recognise the case that has been made for investment, which is needed as a direct consequence of population growth to provide housing, schools and primary healthcare. It is also needed to sustain economic growth through improved transport, skills, innovation and research. This case is not unique to London, and we have long been arguing the case for a proper plan for growth and for jobs.
The question is whether the scale and complexity of London's economy and communities mean that they can be addressed only by London government rather than by—as it has been put—23 Whitehall departments. We support a localist approach but, of course, London government is not a homogeneous entity. The 32 boroughs, the GLA and the mayor collectively comprise a vast range of different communities, economic and social circumstances and political make-up. The report recognises that the different interests that the formula funding system exposed in local government could re-emerge at London level should there be greater financial devolution. There is a clear risk that this may be so.
There is an acceptance that, should there be greater financial devolution to London, existing governance arrangements would have to change. The proposition is advanced that it would require new governance systems and structures that are sufficiently robust to cope with a variety of possible situations but sufficiently simple to be efficient. That is a goal worth having, but one more easily stated than achieved, we suggest.
The report bemoans the dramatic budget reductions suffered by local government, reinforced just last week, and makes the point that revenue constraints are inhibiting capital spending. It highlights that the Treasury is imposing additional capital controls over and above the prudential borrowing code and that these could be scrapped. We have debated this issue especially in relation to housing, and it also is not an issue just for London. I believe we had a common recognition that local government had adhered to the prudential borrowing code in a responsible manner, and we were not convinced of the Government’s position that it needed two tiers of capital control. As the noble Baroness, Lady Hamwee, said, local government should make full use of the headroom that the system offers.
We agree that it is time to consider the possible removal or relaxation of the housing capital limits, but only on the basis that prudential rules would continue to apply, as would the rigour of long-term HRA business plans. Measures to shift public funding from personal subsidy to investment in built assets, referred to by my noble friend Lady King, is also something that we consider should be further explored.
The proposal to devolve or assign to London taxes that are currently collected and paid to central government is more problematic. The focus is on property and property-related taxes, so potentially it is easier to establish the locus—in or out of London. Any new boundary lines are likely to open up avoidance possibilities and there would surely be a resource issue to administer these taxes.
Retention of 100% business rates raises issues of how the arrangements would be unpicked from the newly introduced business rate retention scheme and, within London, what needs and resources mechanisms would be required. The more radical tax reforms considered have even greater technical challenges, as the report acknowledges. However, the big question underlying all of this is what it means for the rest of England. Promoting and facilitating growth in London does not have to be at the expense of growth in other parts of the country. Indeed, quite the reverse, and other cities could follow suit. However, there will be a need to ensure that other parts of the country are not left behind, particularly rural areas.
Specifically on fairness, it is proposed that the devolution of tax streams to London could be counterbalanced by adjusting grant levels at the start of the process. However, this will do nothing to stop growing inequality after that. We should consider the effects of devolution of stamp duty land tax in a buoyant property market in London, with revenues going to London not to HMRC.
There is much else to be considered and the report has provided valuable food for thought. I thank my noble friend for bringing it before us and seeking from the Minister a practical way to examine the important issues that it raises.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, I, too, thank the noble Lord, Lord Harris, for introducing the debate. Perhaps more importantly, I thank the people who produced the report, not least Professor Tony Travers, who is known to us all and who has been very influential on the London local government scene for—I had better not say a number of years, he might be offended by that—certainly some time.
The Government recognise the importance of this report. The London Finance Commission set up by the mayor has clearly carried out an in-depth study of what it thinks should be done. However, all I will say at the moment is that its potential impact on both London and, as the noble Lord, Lord McKenzie said, the wider country requires a great deal of thought and consideration.
The report was produced by a distinguished and wide membership, which I was glad to see included people who were not from London but from what we now call the core cities, where devolution is beginning to happen. So they had an understanding of what would happen outside London, which again we need to hold on to.
The proposals would have wide-ranging effects, not only on London but on government finances and the United Kingdom. Given the legal, constitutional and fiscal questions raised, this is clearly a matter that is not going to be decided today and may not even be dealt with in the short term. We need to look forward to see how practical the proposals are not only for London but for the country. The report is London-centric, as one would expect, but, as the noble Lord, Lord Bilimoria, pointed out, there is a lot to London—not just London government but a whole edifice underneath London which supports its financial position in the world.
There are innovative proposals for a further devolution of powers, particularly in regard to finance, and well articulated reasons for this; it is a very well written report, as I would have expected. However, the recommendations have to be considered against the background of the current and perhaps future financial situation.
As to its impact on the London boroughs, I know they were represented on the commission but there is a wobbly bit in the report between London and London government, the mayor and the GLA. It nips in and out of London government and, after reading it quite closely, I came to the conclusion that London government was London and the boroughs, and that London was the mayor. Everything else—London and government and the mayor—was very clear. It is not totally clear where the main emphasis lies except, pretty clearly, with the mayor and the Greater London Authority. Any changes to the way in which the finances are delivered, controlled, measured and administered will affect London boroughs as well.
It would not be appropriate for me to anticipate the Government’s response. I accept that the Chancellor laid out the conditions of what he would want in backing this report. I have no knowledge of his view now of where to go from here but, as I have said, the Government will consider the full implications of the proposals very carefully.
We are already seeing devolution and enormous changes in governance in this country and we cannot ignore the fact that places such as Liverpool, Glasgow, Newcastle and Manchester are all beginning to develop their own core cities along devolved and different paths.
We must not forget that there has been already significant devolution to London through the mayor and, through him, the Greater London Authority. That took place in the spending review of 2010. London recently has received a fair settlement despite the necessity for the deficit reduction. It is worth remembering that as a result of the Localism Act London has gained responsibility for housing. The noble Baroness, Lady King, raised the aspect of affordable housing. London now has responsibility for housing, economic development and the Olympic legacy as well as already having responsibility for transport, planning and the police. That is quite a big raft of local government life.
The London settlement, issued in February 2012, provided the mayor with about £3 billion in unring-fenced grant for 2011-12 to 2014-15. London also has a pretty broad range of financial levers, including business rates supplements—I think Crossrail is the only supplement that has been raised so far, but it has been done—infrastructure levy and tax increment financing. I know the latter is still constrained, and we have discussed this on many occasions, but the possibility of using tax increment financing is not only available to the mayor, but to the London boroughs. London also has, of course, its own enterprise zones.
The Treasury has agreed to provide a guarantee to allow London to borrow £1 billion from the Public Works Loan Board at a preferential rate to support the Northern Line extension to Battersea. Some of the infrastructure work, therefore, is already being done.
The Government are going to create a new enterprise zone in the Battersea and Nine Elms area. Anybody who was watching the news last night will have seen that being laid out, and what a large area it is. That will supplement London’s existing enterprise zone at the Royal Docks. My department has also transferred its assets in London to the Mayor to provide an important and financial growth lever. The Government have also contributed £25 million towards the costs of the Olympic stadium transformation.
London will also benefit from the flagship Francis Crick Institute for translational research which will open in 2015. That follows £650 million investment from the Medical Research Council, Cancer Research UK, the Wellcome Trust, University College London, Imperial College and King’s College. Finally, on the list of this there are three new catapult centres designed to commercialise new and emerging technologies, and they will be based in London.
London is not being ignored in any way at all. It is developing all the time with what it is able to do, and what there is for it to do. It is now largely independent of national government in a very significant range of policy areas, and it has greater financial autonomy than ever before. That is not to say that we should not look carefully at what has been proposed. I am not prejudging or saying that the Government have prejudged the report in any way at all. Clearly not; we have not had it for long enough. It is very detailed and it has some really important aspects to it. We will be looking at it.
The noble Lord asked me whether we would be setting up technical reviews. It is too early to say, but I am sure that one way or another this report has got to be studied very carefully by experts across the field. Whether that is a technical review or not, I am not sure, but if I can get any better than that for the noble Lord then I will let him know.
The noble Lord, Lord Bilimoria, was talking about London’s position in the world, and I think that we would all accept that it is now one of the most important cities. We recognise that; it is the fifth largest city in gross domestic product and it is a global city that is instantly recognisable. The mayor is instantly recognisable —I think both mayors have been instantly recognisable. It staged a fantastic Olympic Games and London is rightly ambitious for its future. We do not want to forget that the mayor has himself penned an attractive vision for London in 2020, and that is with this other report. It sets out a long-term plan for major investment in infrastructure.
We recognise the importance of investing in infrastructure. The Chancellor has announced that the Government will continue to provide the funding to get the £14.5 billion Crossrail project finished on time. There will be feasibility funding for London's Crossrail 2 project. We will continue to invest in transport and the Transport for London grant is now £1.5 billion.
I think that London has developed enormously over the last 10 years in terms of its independence and devolution. Further devolution, also part of this report, is something that we need to look at carefully on the basis of not only London but of other cities in the country. The noble Lord, Lord Patten, spoke about constitutional changes. Of course, further arrangements such as this would amount to a constitutional change.
Most of our expert speakers this evening recognised and supported the report. We had some excellent speeches on the subject, all of which were slightly different, so I am not going to refer to all of them. The noble Lord, Lord Patten, asked about rough sleepers, which takes us slightly away from the report, and we have had several Questions on this subject in the House recently. Yes, the number of rough sleepers did go down. Yes, it has increased again. I am interested in the noble Lord’s identification by nationality of those who were within his immediate sight. The figures that we have suggest that about 53% of rough sleepers are from eastern Europe—that does not excuse the fact that they are there. There is co-operation between the mayor and my department to ensure that there are projects set up for them, not least the mayor’s No Second Night Out programme, which means that people should not be on the streets for a second night. There is a phone line for people to ring if they are concerned about them.
The noble Lord, Lord Bilimoria, asked me a question right at the end, which I am afraid I missed—I have to be honest. So if I may look at Hansard and produce an answer for him in writing, I will do so. I was getting overexcited by that time.
I thank the noble Lord again for introducing this debate. We accept totally that this is an important report. I am almost certain that this will not be the last time that we have the opportunity to discuss it or London’s position in the world.
Care Bill [HL]
(11 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Greengross
Baroness Greengross
My Lords, I will also speak to my Amendments 79C, 79G and 79K.
Amendment 78C is about trying to strengthen the provisions to ensure that we have an integrated approach to care planning. This would happen if we could ensure that local authorities consider how to prevent or delay healthcare needs, as well as care and support needs, when providing or arranging the provision of services, facilities or resources for care. We have talked about this previously but I think that the Bill should require local authorities to have regard to the potential to prevent, delay or reduce health needs as well as care needs when providing or arranging care and support services. This duty would have wider benefits because it would strengthen the requirements on local authorities to prioritise integrated care services in line with Clause 3 of the Bill. It should also improve cost efficiencies for local authority budgets at a time when social care budgets are being squeezed, as we have heard, by reducing the need for more intensive and costly forms of care.
Similarly, Amendment 79K tries to enshrine the duty of prevention. We know, and have heard from other noble Lords, that many people reach a crisis point when the person for whom they are caring is critically ill, or has a fall, or the partner dies, or something else happens. There is a panic and the wrong sort of care or very expensive acute care is provided. If appropriate identification, awareness and assessment of needs could be made before people reach this point, it would be absolutely brilliant at avoiding some of these acute costs of care. Enshrining prevention in the Bill is very important. Accordingly, it is imperative to ensure that the prevention duty focuses on what a local authority must do to prevent deterioration in well-being, to underpin the imperative to prevent, delay and reduce the need for care and support.
In order to make sure that happens, Amendment 80B ensures that local authorities have regard to NICE clinical guidelines and equality standards. This came to me through chairing a committee which produced a report on autism as it now affects a lot of older people. This is a fairly new phenomenon, because fortunately people live longer—not just healthy people, not just sick people, not just frail people, but people who have conditions such as autism. We know that NICE’s remit will be extended—in fact it has been extended since April of this year—to include social care services. It has the potential for a new focus on evidence-based decision-making. For example, the NICE guidelines on adults with autism states that investing in employment support is cost-effective.
This, and similar findings, should be taken into account by local authorities when they are providing services, including preventive services. All of these together would help to provide a range of preventive care. In order to make that happen, I hope we can encourage local authorities to look at more than one-year budgeting, because preventive services need longer than that. Local authorities need to be encouraged to take a longer view. If you are running a business and invest in something, you do not expect a return immediately. If you invest in preventive services, you will not necessarily get a return in one year, you have to give things a longer time span to reap the benefits. That also applies in these cases.
Amendment 87G makes sure that local authorities assess preventable needs and look to reduce these needs as an integral part of their duties in relation to the assessment progress. Briefly, that explains this group of amendments. I beg to move.
Lord Touhig
My Lords, I speak in support of Amendments 79K, 80A, 80B and 87G. At the outset, I pay tribute to the noble Baroness, Lady Greengross, who did an excellent job in chairing the commission on ageing and autism. We look forward to the publication of the report very shortly. It was certainly an eye-opener for a great many of us, and the many who thought they knew a lot about support and social care learnt a great deal during that time.
Lord Rix
My Lords, I wish to speak to Amendment 79D, which focuses on preventing adults at risk suffering abuse or neglect. I welcome the focus in Clause 1 on promoting well-being and the breadth of that definition, which includes protecting people from abuse and neglect. In addition, Clause 2 sets out an important duty whereby a local authority must take steps and provide services which contribute to preventing needs for care and support. However, this crucial clause on prevention makes no reference to abuse and neglect, and my amendment seeks to make this explicit.
Later in the Bill, in the safeguarding section, there is a focus on protecting people once that abuse or neglect is suspected. However, it would be hugely beneficial if local authorities and agencies were obliged and guided to prevent abuse and neglect taking place in the first instance.
Let me give you an example. Decisions were taken to send people with a learning disability and challenging behaviour far away from their homes to Winterbourne View, where they suffered the most horrific abuse. This could clearly have been prevented by local authorities and other agencies if they had taken the right decisions at the outset.
Prevention is recognised also in terms of disability-related harassment, and indeed the Equality and Human Rights Commission highlighted this in its report, Hidden in Plain Sight. It recommended that local authorities and housing providers work from the outset to reduce disability-related harassment by including safety and security measures in the design of social housing estates and facilities. In addition to good decision- making at the top, it is also important to consider how we can empower individuals to understand what abuse is and how they can protect themselves from it. This might be through providing information, advice and advocacy. Safeguarding procedures are vital in order to protect people suspected of abuse and I have tabled a number of amendments on this area under Clause 41. However, before safeguarding comes a strong commitment to preventing abuse occurring in the first place. I look forward to the Minister’s view on this matter.
Lord Low of Dalston
My Lords, I was waiting to see whether the noble Lord, Lord Hunt, was going to speak to his amendments in this group—
Lord Hunt of Kings Heath
Would the noble Lord find it helpful if I went next?
Lord Hunt of Kings Heath
Thank you very much. My Lords, I think this is a very interesting group of amendments and the noble Baroness, Lady Greengross, in her Amendments 78C and 79K—to which I have added my name—and her other amendments makes some very important points about the need for a preventive approach, including its health dimension. My noble friend Lord Touhig has added his powerful voice to it.
In Amendments 79K and 80A there is a real issue here about the national minimum eligibility threshold. It would provide some certainty for some adults about whether their care needs will be met, but we know there will be many people whose needs remain just below the level at which local authorities will at a minimum need to meet through the national eligibility criteria. We know the Ending the Other Care Crisis report produced by Scope with four other charities estimates that 105,000 working-aged disabled adults will in fact continue to rely on universal services. This places greater responsibility on local authorities to put in place the necessary services to help prevent, delay or reduce care needs.
There is an argument for framing Clause 2 more positively to encompass the many diverse forms of preventive support that local authorities could put in place to prevent deterioration in the well-being of adults in their area. We want local authorities to be more ambitious and to think about prevention more positively. While understanding the pressures that undoubtedly local authorities will be under, these amendments would give a very powerful voice to the need to go down the preventive route.
My Amendment 79A, to which the noble Lord, Lord Low, has added his name, continues the same theme on placing a general duty on local authorities to prevent, delay or reduce the need for care and support. We know that in Clause 2 there is a requirement on local authorities to look at how they can make the best use of community facilities to prevent, delay and reduce needs for care and support. That is very welcome indeed but the question is: to what extent are local authorities geared to put that into practice? Hence I have tabled this amendment. I think we need give a push to local authorities to take this seriously. I hope the noble Earl will be sympathetic to agreeing to some form of amendment which would reflect this in Clause 2.
The noble Lord, Lord Low, has a number of other amendments in this area which I would very much wish to support, although I have not lent my name to them. They are very well framed and important. Coming back to the issue we discussed in the debate just before the dinner break, this legislation may well stay on the statute book for many years to come, so it is really important to get it right. The emphasis that the noble Lords, Lord Low and Lord Rix, have given to these points bears careful consideration, so I am very happy to support them.
Lord Low of Dalston
I thank the noble Lord for his anticipatory support of my amendments, and perhaps I may return the compliment by saying that my name is on five amendments in this group and I have the most copious set of notes I have ever had in any debate. I hope that noble Lords will bear with me at this time of night, but with five amendments, there is quite a bit to go through.
As the noble Lord, Lord Hunt, said, I have put my name to his Amendment 79A and to that tabled by the noble Baroness, Lady Greengross, and in the names of the noble Lords, Lord Hunt and Lord Touhig, Amendment 79K. There are the same group of Peers on Amendment 80A, but Amendments 80C and 87F are in my name only, so I shall obviously spend a bit more time on them.
Before that, I shall say a few words on Amendments 79A, 79K and 80A. Clause 2 would be stronger if local authorities were also placed under a general duty to take prevention into account in exercising any of their functions under Part 1, not just those relating to direct provision of care. Amendment 79A would ensure that local authorities act to “prevent, delay or reduce” individual care needs across every one of their functions. Amendment 79K would ensure that the prevention duty focuses on what a local authority must do to prevent a deterioration in well-being, in addition to preventing, delaying or reducing the need for care and support. Amendment 80A would oblige authorities to have regard not just to the importance of identifying adults and carers with needs for care and support and the services available to meet those needs, but,
“the steps it could take to improve and enhance the provision of services, facilities or resources in its area”.
The idea would be to ensure that local authorities actively consider what more they could do to prevent needs for care and support above and beyond identifying existing services, facilities and resources in the authority’s area.
The Bill currently stops short of that, which is bad news for the hundreds of thousands of older and disabled people who are not deemed eligible for adult care and support. It is also bad news for the Government’s aspiration to rebalance the system away from crisis interventions in a more preventive direction. The amendments suggest a more strategic approach which, by putting in place services at the community level, not just directed at individual care, could ensure that those who did not reach the eligibility threshold were, nevertheless, not bereft of support entirely. In other words, they provide a means of enabling available resources to go further by deploying them strategically in aid of prevention.
The kind of preventive services I am thinking of might be of six types. First, there are enabling services, preventing harm before it occurs—as you might say, working well away from the cliff edge. Secondly, there are services that prevent care needs from developing: for example, reablement or specialist rehabilitation to help an adult with sensory loss or a falls prevention service for older people discharged from hospital. Thirdly, there are prompt interventions, detecting and responding to early signs of difficulty, forestalling problems which could lead to more serious consequences —as you might say, working just over the edge of the cliff. Fourthly, there are services that help to delay care needs once they have started to emerge, for example, home adaptations for those no longer independently mobile or befriending services for the recently bereaved, perhaps funded by the local authority but delivered by a local Age UK. Fifthly, there are services that reduce care needs once they have started to intensify, for example, a stroke rehabilitation service provided alongside the NHS to help adults to regain control over key activities of daily living.
Sixthly and finally, there are acute interventions reducing the impact of a situation spiralling down—working well down the cliff, you might say. Wales furnishes an example in the Social Services and Well-being (Wales) Bill, which is currently before the Welsh Assembly. I hope the Minister might be willing to take a look at that. The corresponding section of that Bill, Section 6(4), explicitly states that a local authority must, in the exercise of its other functions, have regard to this preventive services clause in the Bill.
Baroness Anelay of St Johns
My Lords, I would be most grateful if the noble Lord, Lord Low, would be very kind and resume his seat for one moment. I excuse myself for being out of breath. I have been listening very carefully to the noble Lord, Lord Low, outside the Chamber, and it is my duty, as Government Chief Whip, to remind the Committee of the rules of debate in this place, rules which I know the noble Lord would never wish to transgress. Our Companion makes it clear that the House has resolved that speeches in this House should be shorter. Long speeches can create boredom and tend to kill debate. I am sure that is not the case with the noble Lord, Lord Low, but he has been speaking for more than15 minutes and is now in the 16th minute. The Companion makes it clear that speakers are expected to keep within 15 minutes. Might I therefore suggest that the noble Lord winds up his remarks at this stage? Representations have been made from all sides of the House, particularly from the Front Benches, the Chief Whips and the Convenor, to say that they wish that the Whips would intervene more often to give guidance on this matter. It has also been discussed at the Procedure Committee and I have therefore done so at the earliest opportunity. I am sure that the noble Lord, Lord Low, will be able to resume his argument but conclude fairly swiftly. Over to the noble Lord.
Lord Low of Dalston
I apologise to the Members of the Committee, who will understand my difficulty in that a considerable number of amendments to which I put my name have been grouped together. Five amendments in this group had my name and I had a little bit to say about all of them which I hope the Committee will have found useful. It is not my wish to try the patience of the Committee in any way so I will wind up my remarks immediately.
I echo the point made by the noble Lord, Lord Touhig, that greater concentration on prevention could actually save resources. In summary, prevention—or early intervention—matters: it works. The Bill needs to bring the Government’s White Paper vision of a genuinely preventive care system to life, but doing so relies on local authorities assessing how needs can be reduced or prevented from getting worse.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, it is always good when there is an outbreak of consensus across—
Baroness Jolly
I will be brief. I support the amendment in the name of the noble Lord, Lord Rix, on preventing needs for care and support for those with learning disability. We need to remember that those for whom the Bill is written are all vulnerable adults: whether they are vulnerable by virtue of their age; their learning disability; mental state; physical condition, whether that is disability or frailty; whether they are living at home or in other accommodation. A local authority should take all steps it considers will contribute towards adults experiencing, or being put at risk of, abuse or neglect. We have just heard about preventive measures: these are preventive measures linking in with needs. The outcome of the amendment would be a reduction in incidents of neglect or abuse. It might mean local authority employees raising concerns about individuals or organisations providing care; making it a regular agenda item at a team meeting and not turning a blind eye; whistle-blowing where appropriate and making it part of the well-being culture.
Before I saw the regroupings, I had also intended to speak to the amendments of the noble Lord, Lord Best, which were, at one time, grouped together. Amendment 88 seems to have become an orphan amendment within this group. I support it but I will speak to it when the rest of the amendments are dealt with.
Earl Howe
My Lords, I apologise to my noble friend for intervening before she had a chance to speak. As the Committee will have gathered, I was observing that it is always good when there is an outbreak of consensus across the Chamber, and I think this is a case in point. It is critical that care and support work actively to promote people’s well-being and independence, rather than just waiting for people to reach crisis point. We want a system that promotes independence and reduces dependency as well as supporting those who already need care and support.
Preventing and delaying needs from arising, or reducing them where they exist, is a central part of local authorities’ modern responsibilities for care and support. Adopting preventive approaches can reduce needs in the longer term, saving public money and improving outcomes. There has never before been a clear legal duty that reflects this priority and establishes prevention as part of the core local authority responsibility. Clause 2 fills that gap, requiring local authorities to provide or arrange services to prevent, delay or reduce needs for care and support and carer’s support. This will create a legal basis for a wide range of preventive services that can help people maintain their independence for longer. The noble Lord, Lord Low, mentioned some good examples but they might also include exercise classes, which can help people maintain and increase their mobility, befriending services and hobby clubs, which can reduce loneliness and social isolation, and installing grab rails in a frail person’s home, which can prevent falls, broken bones and unnecessary stays in hospital. However, those are not the only examples. We want local authorities to be truly innovative in the services offered in their area, which is why we have not been prescriptive in the way that local authorities carry out the duties conferred by the clause. I agree with the noble Lord that these things can bring direct financial savings, and I quoted some good examples, I hope, in speaking on an earlier group of amendments.
Amendments 79A and 79K make the point that prevention should be an overarching principle of a local authority’s care and support functions, and that this should be framed in the context of well-being. This is surely right. To that end, Clause 1 sets out that in exercising care and support functions, local authorities must promote an individual’s well-being. This includes, among other things, having regard to preventing, delaying and reducing needs, as expressly stated in Clause 1(3)(c).
The noble Lord, Lord Rix, makes clear in tabling Amendment 79D the need for local authorities to be proactive in preventing, delaying and reducing needs for care and support, but also in safeguarding adults with needs for care and support from abuse or neglect. As he mentioned, Clause 41 does just that by requiring local authorities to ensure that inquiries are made when an adult with needs for care and support is at risk of abuse or neglect. Clause 42 and Schedule 2 create the legal framework for local authorities to establish safeguarding adult boards, which must devise, publish and implement annual strategic plans for adult safeguarding in their area. There will of course be the opportunity to discuss safeguarding in greater detail at a later date.
Amendment 80C, proposed by the noble Lord, Lord Low, raises the issue of prevention as part of the joint strategic needs assessment and joint health and well-being strategy under the Local Government and Public Involvement in Health Act 2007. I listened to him with care and hope that I can reassure him. The existing legislation in relation to these joint assessments and strategies is clear that where any needs can be met by the local authority exercising its functions under the prevention duty in Clause 2, these would be included as part of the joint assessments and strategies.
In Amendments 78C, 79C and 79G, the noble Baroness, Lady Greengross, highlights the importance of preventing, delaying and reducing health needs as well as needs for care and support. Again, I find myself in complete agreement with her and, as I said, I believe that the Bill achieves this laudable aim. This is where the importance of integration and co-operation can clearly be seen, a matter also raised by the noble Lord, Lord Hunt, in Amendment 79B. Clause 3 requires local authorities to promote the integration of care and support with health and health-related provision, including where this would contribute to preventing, delaying and reducing needs.
Clauses 6 and 7 require local authorities and their relevant partners to co-operate in the exercise of their care and support and carer’s support functions. Such co-operation is to be performed for the purposes of, among other things, promoting an individual’s well-being, which in turn includes having regard to the importance of prevention through Clause 1(3). Accordingly, there is a clear duty on local authorities and their relevant partners to co-operate with one another in preventing, delaying and reducing needs for care and support and carer’s support.
These duties, coupled with the return of public health responsibilities to local authorities as a result of the 2012 Act and the new prevention duty, present a unique opportunity for aligning prevention services across health and care and support. That is why local authorities will be required to ensure the co-operation of their director of public health, where relevant to care and support functions.
I turn briefly to Amendments 87F and 87G, tabled by the noble Lord, Lord Low, and the noble Baroness, Lady Greengross. The Government believe that the Care Bill allows for the assessment process fully to take account of prevention. As the well-being principle requires the local authority to have regard to the importance of preventing, reducing or delaying needs for care and support, it must also consider this when conducting an assessment.
Amendment 80A highlights that, to be able to prevent delay and reduce needs for care and support and thus promote independence and well-being, we need to improve the quality and diversity of preventive services, facilities and resources. To achieve this, Clause 5(7) makes explicit provision for local authorities to promote the diversity of services, resources and facilities which can prevent delay or reduce needs for care and support. As the noble Baroness also points out with Amendment 80B, commissioning decisions, including for preventive services, should be made on the best evidence available. In the case of preventive interventions, we know through engagement with the care and support sector that this is not yet as strong as we would like. The Government have committed to developing a library of evidence on prevention. That will enable commissioners to make decisions knowing what is proven to work and what is not. However, to be able to build this evidence base and to find the solutions to the care and support needs of the 21st century, we need to allow room for innovation in developing and testing new models of preventive interventions. Without breaking the mould of traditional care packages, pioneering solutions such as shared lives schemes, which offer an alternative model to home care or residential care using community networks, would not have been able to flourish.
The noble Baroness, Lady Greengross, observed that local authorities need more than a year to plan in terms of the budget cycle. Local authorities already have multiyear financial settlements and that gives them scope to plan services in the longer term The noble Lord, Lord Touhig, returned us to the important subject of autism. He remarked that adults with autism rely on low-level preventive services and he felt that the Bill does not do enough in this area. The reforms to care and support set out in the Bill will benefit people with disabilities, including people with autism. The provisions around prevention, personal budgets and transition between children and adult services are just some examples of new laws which will benefit many people with autism.
As local areas gain a better understanding of autism needs locally and develop autism commissioning plans, we expect them to look more at the cost benefits of more low-level and preventive services, such as befriending services or social skills training. Preventive services can be provided to prevent, delay or reduce needs for care and support, regardless of the level of need involved. I hope that I have reassured noble Lords that prevention is suitably reflected within the Bill and that the noble Baroness, Lady Greengross, will feel able to withdraw the amendment.
Baroness Greengross
My Lords, I was very encouraged by the words of the Minister, but I am still rather worried. It was great to hear the points made by the noble Lord, Lord Touhig, who is so knowledgeable about autism. I am also very grateful to the noble Lord, Lord Hunt, for his comments, and to the noble Lord, Lord Low, who made some very apposite points about prevention. If I were a director of adult social services and had very limited funds, I would have to concentrate on the people in the greatest need, and it would be likely that prevention would slip to a lower level of my attention. This is the danger of preventive services not getting the attention that they need. I have yet to be totally convinced that prevention will prevail in the way that the noble Earl suggested. I hope that he is right.
We need a longer timeframe. It is difficult for local authorities to budget in that way, but it is essential if we are to focus on preventive services in the long run. I hope that, as we go through the remaining parts of the Bill, we can be clearer about how to ensure that prevention is at the top of our list. That will apply to eligibility criteria, which we will look at later. In the mean time, I thank all noble Lords who supported what I said and my colleagues for their support. I beg leave to withdraw the amendment.
Baroness Pitkeathley
“( ) For the purposes of this section, “an individual” includes the parents of disabled children.”
Baroness Pitkeathley
My Lords, I will speak also to Amendments 79E, 79H and 88C, all of which are about parent carers, and later to Amendments 88E and 88F, which are about other aspects of carers.
The Care Bill is drafted to apply to adult carers of adults. This means that parents of disabled children are not included in the important new rights and duties introduced by the Bill. The amendments in this group seek to probe the Government’s intentions regarding parents of disabled children, and how their rights can be put on a par with those of other carers.
Under the Care Bill, a carer is an adult who provides or intends to provide care for another adult. It is therefore clear that parent carers of disabled children aged under 18 are excluded from the new entitlements. Parent carers are left with the existing statutory scheme and previous carers Acts, which are mostly Private Members’ Bills. While these Acts impose obligations on the local authority to assess parent carers’ needs, there is no statutory duty to provide services to meet carers’ needs.
In a recent report on the Children and Families Bill, published on 27 June, the Joint Committee on Human Rights acknowledged the concerns about the future of parent carers’ rights, but argued that it was a matter for the Care Bill. As these rights currently sit within children’s legislation, amendments to the Children and Families Bill are therefore needed to put the rights of parents of disabled children on the same level as those of other carers. I know that discussions are going on, and that Ministers have said that amendments will be introduced to the Children and Families Bill. However, it is important that parents caring for disabled children do not fall through the cracks, and that the Government acknowledge the need to give them parity with other carers. How will the Government ensure parity of rights for parents of disabled children, and how will they resolve the issue of whether this matter sits best within this Bill or the Children and Families Bill?
Amendment 78F includes parent carers in the well-being clause. The intention of the amendment is to include the parents of disabled children in the duty placed on local authorities by Clause 1 to promote the well-being of the adult who is carrying out functions under the Bill in relation to another adult. If anyone doubts whether this is necessary, they should remember that 72% of parent carers experience mental ill health, such as anxiety, depression or breakdown; 57% say that lack of support from statutory services means that they are isolated and not able to work as they would like; and one in five says that isolation has led to the break-up of family life.
Amendments 79E and 79H are about including parent carers in the prevention clause. Clause 2 requires local authorities to take steps, including providing or arranging services which are intended to prevent, reduce or delay the need for care and support by all local people, including adults and carers of adults. These amendments seek to include parents of disabled children —referred to here as “child carers”—in this duty so that local authorities have a duty to prevent or delay the development of the need of the parent carers for support. My apologies if any confusion has been caused by the use of the words “child carers”. We often use this term to refer to young carers, who are referred to elsewhere in amendments in this group. However, I wanted to be sure that the Government understood that this was not necessarily the parent of a child—it could be a parent, a grandparent or another relative. I hope that that has not caused any confusion.
Baroness Royall of Blaisdon
My Lords, I shall speak to Amendment 79L tabled by the noble Lord, Lord Patel, who unfortunately cannot be in his place this evening. The purpose of the amendment to which I have added my name is to ensure that carers are identified and signposted to the enhanced support outlined in the Bill as early as possible and before they reach crisis point. I put my name to this amendment following a discussion with Macmillan, to which I am very grateful for its excellent briefing, about the situation of approximately 905,000 cancer carers in England, half of whom are not receiving any support despite the fact that cancer has a real impact on their lives. Of course, the impact is nowhere near as big as that on the person with cancer but nearly half of carers say that it affects their mental health and well-being; one in five says that it affects their relationships and working life; and 15% say that it affects their household finances. Almost half of cancer carers identify at least one type of support they are not currently receiving that would assist them with their caring duties. They are in real need of help but are not aware of who or where to turn for support.
As many noble Lords will know from personal experience, the real problem is that many cancer carers do not think of themselves as carers but they might well need information, advice or support. Indeed, my noble friend Lady Pitkeathley has just made the same point in general about all carers. They have no idea about things such as the local authority carers’ assessment, which is the gateway to statutory support. Consequently, the number of cancer carers who have had such an assessment is far lower than for those caring for people with other conditions and disabilities. Evidence shows that health professionals simply do not identify cancer carers as carers and do not signpost them to help or support.
Therefore, while I welcome the fact that the Care Bill enhances rights for carers, including placing a new duty on local authorities to undertake a carers’ assessment for all carers and to meet the eligible needs of carers, there is a gap which this amendment is designed to fill. Cancer carers have a lot of contact with the NHS but they seldom come into contact with local authorities. This amendment would help to ensure that all NHS bodies work with local authorities to improve the identification of all carers so that in turn they can be assessed and access appropriate support.
In the Care and Support White Paper the Government said that,
“there is still an unacceptable variation in access to tailored support for carers”.
It outlines its requirement for,
“NHS organisations to work with their local authority partners … to agree plans and budgets for identifying and supporting carers”.
This amendment would provide a vehicle for ensuring that this optimal practice of joint identification and partnership became a reality throughout England where, at the moment, the identification is at best patchy and at worst non-existent. Local authorities should take the lead but they could benefit greatly from the help of many relevant health bodies such as NHS England, CCGs, and primary care and hospital trusts which already have procedures and systems in place to identify carers. Clearly, that does not always happen.
The amendment would not lead to additional expenditure. In fact, if carers were identified as early as possible, when in most cases they just need signposting to information and advice, it could save money. Fewer carers would reach the sort of crisis point that requires NHS support for themselves and local authority support for the person for whom they are caring.
On Saturday, I was in Torbay and I talked with some people about their excellent system of integrated healthcare in which they understand that a whole-system approach is needed to support carers and that proactive identification is needed by the NHS. I was therefore interested to read a quote from Mr James Drummond, lead officer for integrated services at the Torbay and Southern Devon Health and Care NHS Trust, in which he says:
“If we wait for carers to approach us we may not engage until there is a crisis. Proactive identification is good practice, but national support is needed to spread this across the country. It should be made clear that identifying carers and signposting them to support is the responsibility of all health and social care professionals, not just local authorities”.
That says it all. I know that the Government recognise the need for the NHS and local authorities to work together on this important issue so I very much hope that the noble Earl will use this amendment and agree to look at ways of formally involving the NHS in the local authority duty to identify carers.
Lord Hunt of Kings Heath
My Lords, this is a very important group of amendments, and I very much support my noble friend Lady Pitkeathley in her Amendments 78F, 79E, 79H, 88C, 88E and 88F. I also support my noble friend the Leader of the Opposition in her Amendment 79L, emphasising the importance of working with the National Health Service.
My Amendments 79F, 79J and 79M to Clause 2 concern the position of young carers. They aim essentially to ensure that local authorities provide or arrange services to prevent young carers from developing needs for care and support, as well as preventing and reducing needs for adults and adult carers. The 2011 census identified 178,000 young carers who have to care for a relative in England and Wales alone. It is good that the Government have now acknowledged that, given the changes being introduced by the Care Bill for adult carers, the law must also be reviewed for young carers. However, we need a much clearer indication of what these changes will look like and particularly of how the Care Bill will ensure that adults receive sufficient care and support so that children are protected from excessive and inappropriate caring roles. We cannot have a situation where people have unmet care and support needs, which results in children and young people having to meet these needs.
I recently met a young man who had been caring for someone in his family for most of his life. He told me that it would have made a huge difference to him if his family had received support earlier. If this had happened, his caring responsibilities might not have had such a clear and serious impact on his education. He is doing well now and hopes to go to university, but it has clearly been extremely challenging for him to stay in education, and there are many thousands of other young people who have been similarly affected. That is why my amendments to Clause 2 are so important. They make clear that local authorities must take steps to prevent children from carrying out caring duties that have a detrimental effect on their health and well-being. Can the noble Earl assure me that the Care Bill will be amended to ensure that this is the case? If he can, I would welcome an indication of which parts of the Bill will be amended so that young carers are protected.
My other amendments on this issue are to Clause 12, which provides for regulations on whole-family assessment. Again, the Government have indicated that they will look at how the law might be changed for young carers in the Bill, but it is not clear how that might be done. We know that currently adult social care services and health services routinely fail to identify children who may be caring for an adult, even where the adult is assessed. That also applies to educational establishments. That means that often children can continue to undertake harmful caring roles and end up developing needs for care and support themselves.
It is very important that adult needs assessments relate to any child in the household, so that inappropriate caring by children is prevented and children's needs for support are prevented or reduced. The law must be clear that adult services need to help to identify young carers. The presence of a young carer should always constitute an appearance of need for the family and should automatically trigger an assessment of the person for whom they care. Can the noble Earl confirm that this is indeed the Government’s view? Will it be made clear, through primary care or regulations, that there should be consideration of whether a joint child and adult assessment would be appropriate and that children’s services should work together; consideration of whether any child should be assessed for support in their own right under children’s law; and consideration of whether lower-level support may be needed for the whole family, including the child?
It is a pity that we are taking this important debate at so late an hour, and no doubt we will return to this matter on Report, but I look forward to the noble Earl’s response.
Baroness Gale
My Lords, Amendment 88H seeks to amend Clause 12. The clause provides an excellent framework for assessments to be carried out by local authorities. However, the clause should be tightened to ensure that the framework is fully and properly implemented.
People with Parkinson’s and long-term conditions have problems in accessing NHS continuing healthcare. The APPG on Parkinson’s, which I chair, is holding an inquiry into NHS continuing care. We have been hearing about the difficulties people experience in finding out about NHS continuing care and the further difficulties in getting an assessment. Even when people are assessed, the assessment can be fraught with problems such as assessors not really understanding the condition and even assessments happening without people knowing about them.
Clause 12(1)(g) states that the regulations may,
“specify circumstances in which the local authority must refer the adult concerned for an assessment of eligibility for NHS continuing healthcare”.
The Care and Support Alliance believes we must ensure that local authorities and health services work together and make people aware of NHS continuing care and that people are referred on to continuing care assessments when there is a health need.
The importance of this cannot be understated. Social care is means tested and healthcare is free, so whether someone is funded by the NHS or through means-tested social care systems has significant cost implications for that individual. The Care Bill provides a perfect opportunity for councils to ensure that people who may well be eligible for free NHS continuing care are rightly signposted to, and assessed for, it.
Clause 12 offers guidance about what may be in the regulations relating to assessing social care needs and assessments for carers under Clauses 9 and 10. It states that regulations “may” make provision on the circumstances in which the local authority must refer the adult for continuing care. This does not go far enough and the word “may” should be amended to “must”. If there is not a clear mandate placed within these regulations, the vital issue of signposting for services and systems such as continuing care could be overlooked in the drafting of these important regulations.
The regulations must make provision for the circumstances where local authorities may refer the adult on to NHS continuing healthcare. There is a lack of knowledge about who is eligible and the funding that people are potentially entitled to, so we should have certainty that these regulations will stipulate these circumstances. This should lead to a greater awareness of NHS continuing healthcare and greater access.
These attributes could ensure that all assessments are carried out in a way that supports the individual, take into account their needs and the needs of their families and carers, ensure that the appropriate professionals and experts are involved in the assessments and that people are referred on to NHS continuing healthcare as appropriate. I know that “may” and “must” are very small words, but I hope that the Minister will take note and agree to the amendment.
Earl Howe
My Lords, the Care Bill marks a historic step forward in improving the rights of adult carers. Although successive Governments have recognised the contribution carers make and have supported Private Member’s Bills about carers, this is the first time that the Government have included specific provision for carers’ rights to social care in their legislative programme. These provisions have been warmly welcomed.
Amendments 88E and 88F, tabled by the noble Baroness, Lady Pitkeathley, bring to the attention of the Committee the important role that the NHS can play in helping those with caring responsibilities look after their own health, identify themselves as carers and access information and advice.
Clinical commissioning groups already work with local authorities through health and well-being boards to understand and plan for identifying and supporting carers. Many clinical commissioning groups already have, or are developing, joint carer strategies. Importantly, the pooled health and care budget for 2015-16 announced last week as part of the spending round will help health and care and support to work together in supporting carers.
I quite agree that it is, of course, crucial that steps are taken to help individuals with caring responsibilities to identify themselves as carers. The Department of Health has provided over £1.5 million to the Royal College of GPs, nursing and carers’ voluntary organisations over recent years to develop training and resources to help those working in primary and community healthcare to support people with caring responsibilities. We will consider further bids to extend this work programme, including extending support to nurses working on hospital wards and outpatient departments.
I listened with care to the noble Baroness, Lady Royall, in this context and I would say that carers of people with cancer will benefit from steps which NHS England and the Department of Health are taking, some of which I have already referred to. I would also say that the current initiatives have unleashed an enormous amount of enthusiasm among frontline staff, and both nurse and GP carer champions and voluntary sector carers’ ambassadors have been recruited. They are increasing understanding about supporting carers locally at both strategic and practice levels.
In terms of identifying carers and helping them to access support, it is also critical to align assessments undertaken by other bodies, including NHS continuing healthcare assessments undertaken by clinical commissioning groups. If a carer is identified in the course of an NHS continuing healthcare assessment, the national framework for NHS continuing healthcare and NHS-funded nursing care makes clear that the clinical commissioning group should inform them about their entitlement to have their needs as a carer assessed and, where appropriate, either advise the carer to contact the local authority or, with the carer’s permission, refer them to the local authority for an assessment.
The provisions in the Care Bill provide a lower threshold for a carer’s assessment than exists now. A situation where the person whom the carer supports is being assessed for NHS continuing healthcare is highly likely to be regarded by a local authority as one where it appears the carer may have a need for support. A carer’s assessment would then be triggered. Clause 10(5) already requires a carer’s assessment to include an assessment of whether the carer is able and willing, and is likely to continue to be able, to provide care for the person needing care. Moreover, regulations under Clause 12 may make provisions for joint assessments. We will consider such particular circumstances further as we develop these regulations.
I turn now to Amendments 78F, 79E, 79H and 88C relating to disabled children. I would not wish to underestimate the challenges that families can face in supporting these young people. Policy on supporting children and families of course lies with the Department for Education. The Minister for Children and Families’ view is that there is already sufficient provision under Section 17 of the Children Act 1989 to provide for the assessment and support of children in need, including disabled children, and their parents. The Department for Education’s investment in parent carers’ forums and short breaks provision for disabled children in recent years have helped to shape family support.
In addition, the special educational needs reforms in the Children and Families Bill, which received its Second Reading in this House yesterday, are intended to give parents much more choice and control about the support they and their children receive. My noble friend Lord Nash confirmed yesterday, at Second Reading, that the Department for Education would consider how legislation for young carers might be changed. I simply ask noble Lords to be a little more patient in waiting for those proposals.
Before turning to the effect of Amendments 79F, 79J, 79M, 88H and 88K, tabled by the noble Lord, Lord Hunt, and members of the Opposition Front Bench, I would like to confirm, as I hope my words just now have, that both the Minister for Care and Support and the Minister for Children and Families are clear about the need to protect young carers from excessive and inappropriate caring by using “whole family” approaches.
Young carers should be regarded first and foremost as children and they should be assessed and supported in the context of children’s legislation. The Minister for Children and Families has confirmed that his department will look at what it can do to remove any legal barriers preventing young carers and their families from receiving the support they need under children’s legislation. We will also work to ensure that children’s legislation works with adult legislation to support the whole family in a meaningful way.
These amendments would extend the requirements on a local authority to prevent and reduce the needs of children caring for either an adult or a child. The local authority would also be required, when identifying carers in the area with needs for support, to include young carers aged under 18. One of the key principles when considering young carers is to address first what is needed to support adults in the family with care and support needs, and then see what remaining needs for support a young carer in the family has.
I hope I can reassure noble Lords that, first, through the provisions in Clause 2 to establish prevention as a core duty of local authorities, and secondly, through the provisions in Clause 12 to make regulations about a “whole family” approach to assessment of adults, we are ensuring that adult care and support makes the appropriate contribution to supporting children and young people with caring responsibilities as well.
Of course, provision of preventive services for adults would be of benefit to other family members, including children, by preventing or delaying either an adult’s needs for care and support or an adult carer’s needs for support. As it stands, without this amendment, I believe that the provisions of Clause 2 will help children and young people significantly.
Amendment 88H looks to require the Secretary of State to make regulations in all the areas listed in Clause 12(1). I reassure the noble Lord, Lord Hunt, that this is our intention, as these are essential in ensuring that the assessment is carried out in an appropriate and proportionate way. In relation to the noble Lord’s Amendment 88K, I confirm that we intend in regulations to make clear that a local authority should have regard to the needs of children in the family, and indeed we would wish to encompass other significant family relationships as well.
As I have set out, robust arrangements are in hand to ensure that carers are identified and supported by the NHS and local authorities, and that both parent carers of disabled children and young carers are adequately and appropriately supported under children’s legislation. The Department of Health and the Department for Education will continue to work closely together to ensure that children’s and adult legislation join up in respect of supporting adults with parenting responsibilities, and in the period of transition from children’s to adult services. I hope that those remarks will be sufficient to enable the noble Baroness to withdraw her amendment.
Baroness Pitkeathley
My Lords, I am grateful to all noble Lords who have spoken and for the recognition that all noble Lords have shown of the problems of carers, as well as the commitment to giving carers the support that they so much need. It is recognition of the fact that, however good a health and care system we put in place, the vast bulk of care will continue to be provided by our families and friends.
I know that the Minister shares this understanding and commitment and I acknowledge the attention given to carers in this Care Bill. In the history of the carers’ movement, with which I have been associated for nearly 30 years, it is truly the most significant development that we have seen.
The hour is late and I think that many more people would have wished to speak on this had we been debating it at a different time of day. I hear what the Minister says about young carers and parent carers. We need to monitor very carefully the progress of the Children and Families Bill to see how that Bill pans out and particularly how the two bits of legislation join up, as the Minister put it. In the mean time, reserving the right to come back to these issues on Report, I beg leave to withdraw the amendment.