House of Commons

Wednesday 3rd July 2013 Commons Chamber

Wednesday 3 July 2013

The House met at half-past Eleven o’clock

Prayers

Wednesday 3rd July 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 3rd July 2013 Commons Chamber

The Secretary of State was asked—

[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?

[Mr Jones]

That is entirely a matter for the Welsh Assembly Government, who have purchased it at a cost of £52 million. Clearly Cardiff does need an international airport, and I very much hope it will develop under the Welsh Government’s tutelage.

[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?

[Mr Jones]

I was very pleased to see that a service is being developed at Hawarden airport. It will clearly be extremely important to north-east Wales and the two enterprise zones at Deeside and Wirral Waters.

[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?

[Mr Jones]

The issue of a referendum on Europe has, of course, yet to be determined. Consultation will take place with all sectors of industry, aviation included.

[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?

[Mr Jones]

I am, clearly, happy to raise the hon. Lady’s concerns with the MOD, but when I visited the British Airways maintenance centre at Cardiff airport only a few weeks ago I was impressed by the fact that a large number of workers there were former RAF employees.

[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?

[Mr Jones]

These issues fall to be considered in the debate about whether we should have a referendum on the European Union.

[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 Jones]

Absolutely. S4C is extremely important to the cultural life of Wales. It is the only Welsh language channel in the whole world and its value to Wales cannot be overstated.

[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 Jones]

My hon. Friend makes an extremely important point. The independent production sector in Wales is not only innovative but extremely important to the Welsh economy and I am sure it was very relieved by the Government’s announcement last week.

[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?

[Mr Jones]

HS2 is a United Kingdom project and both north and mid-Wales will benefit from it. I know that the right hon. Gentleman uses the north Wales line regularly, so I presume that he will support our campaign for electrification of that route.

[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?

[Mr Jones]

I believe that Wales has had more than a fair share of capital expenditure announced. Let me reiterate: the electrification of the south Wales and valley lines, the north Wales prison and the commitment to support new nuclear through guarantees.

[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?

[Mr Jones]

Compared with the average cut across Whitehall, which was 8%, and the cut to the Wales Office budget, which was 10%, I would say that the real-terms cut of 1.9% for Wales, because of the protection of the health budget and the education budget, is a good deal.

[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.

[Mr Jones]

The hon. Gentleman is in a terrible quandary. On the one hand, he wants to support his Westminster boss and accept coalition spending cuts; on the other, he wants to obey his Cardiff boss who says, “Enough is enough”, and borrow more: one man, two guvnors.

[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?

[Mr Jones]

With regard to legal aid, I can only reiterate the answer I gave the hon. Member for Islwyn (Chris Evans): the Government’s proposals are to ensure that choice is available to clients and solicitors’ firms.

[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?

[Mr Jones]

I hear what the hon. Gentleman says, but frankly the word from smaller businesses in Wales is that they are frequently precluded from bidding because of the Welsh procurement process. I hope that will change under the new arrangements.

[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?

[Mr Jones]

For the first time, democracy has been introduced into the policing of this country, and that must be desirable. I also heard the evidence, and no doubt the Home Affairs Committee will be reporting in due course.

The Prime Minister was asked—

[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—

[Thomas Docherty]

indicated dissent.

[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

Wednesday 3rd July 2013 Commons Chamber

Greg Mulholland (Leeds North West) (LD)

- Hansard - - Excerpts

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

Wednesday 3rd July 2013 Commons Chamber

12:34

[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.

12:44

[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 Hammond]

rose—

[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 Murphy]

Is it your advice that I should continue, Mr. Speaker, on the basis that the House has not been provided with the information relating to the statement?

[Angus Robertson (Moray) (SNP)]

On a point of order, Mr. Speaker.

[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.

[Several hon. Members]

rose—

[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.

[Several hon. Members]

rose—

[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—

[Tom Blenkinsop]

They are.

[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.

[Hon. Members]

Kilmarnock?

[Mr Speaker]

There is a sort of sedentary chant of “Kilmarnock”, but—

[Thomas Docherty]

rose—

[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]

rose—

[Mr Speaker]

Does the Secretary of State wish to say it now?

[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.

[Several hon. Members]

rose—

[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 Hammond]

It is an additional unit.

[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

Wednesday 3rd July 2013 Commons Chamber

13:56

[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)

Wednesday 3rd July 2013 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:59

[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

Wednesday 3rd July 2013 Commons Chamber

[1st Allotted Day]

Estimates 2013-14

Wednesday 3rd July 2013 Commons Chamber

Department of Health

Wednesday 3rd July 2013 Commons Chamber

Health and Care Services

Wednesday 3rd July 2013 Commons Chamber

[Relevant Documents: Eleventh Report from the Health Committee, Session 2012-13, Public expenditure on health and care services, HC 651, and the Government response, Cm 8624, and uncorrected oral evidence taken before the Health Committee on 2 July 2013, on Implementation of the Health and Social Care Act 2012, HC 119-iii.]

Motion made, and Question proposed,

That, for the year ending with 31 March 2014, for expenditure by the Department of Health:

(1) further resources, not exceeding £50,475,001,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,

(2) further resources, not exceeding £2,414,054,000, be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £50,292,107,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Anne Milton.)

14:10

[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.

[Richard Fuller (Bedford) (Con)]

Will my right hon. Friend give way?

[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.

14:37

[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.

14:48

[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.

14:59

[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.”

[Mr Dorrell]

rose—

[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.

[Mr Dorrell]

The next sentence.

[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.

[Mr Kevan Jones (North Durham) (Lab)]

Will my hon. Friend give way?

[Grahame M. Morris]

I will give way to my hon. Friend.

[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]

Okay—

[Mr Jones]

Will my hon. Friend give way?

[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.

15:22

[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.

15:30

[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.

15:40

[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.

15:48

[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.

16:04

[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.

16:18

[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 Dorrell]

rose—

[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 Deputy Speaker]

One minute, I am sure you have.

16:30

[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

Wednesday 3rd July 2013 Commons Chamber

[Relevant Documents: Seventh Report from the Transport Committee, Session 2012-13, Rail 2020, HC 329-I, the Government and Office of Rail Regulation responses, Session 2012-13, HC 1059, and the Rail Delivery Group and Passenger Focus responses, HC 81.]

Motion made, and Question proposed,

That, for the year ending with 31 March 2014, for expenditure by the Department for Transport:

(1) further resources, not exceeding £3,070,706,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,

(2) further resources, not exceeding £4,648,442,000, be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £6,414,882,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Nicky Morgan.)

16:32

[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.

16:50

[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 (Edinburgh East) (Lab)]

rose—

[Iain Stewart]

Edinburgh is about to intervene.

[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.

17:13

[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.

17:25

[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.

[Caroline Lucas]

Will the hon. Gentleman give way?

[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.

[Mr Kevan Jones]

Will the hon. Gentleman give way?

[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.

[Alison Seabeck]

indicated dissent.

[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.

[Mr Simon Burns]

indicated dissent.

[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.

17:42

[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.

17:57

[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.

[Several hon. Members]

rose—

[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.

18:15

[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.

18:24

[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—

[Mr Simon Burns]

Under your Government.

[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.

18:37

[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 Burns]

The hon. Lady is labouring the point a bit. It has been made quite clear—[Interruption.] If the hon. Member for Scunthorpe (Nic Dakin) keeps quiet and listens, he will get the answer. This matter obviously causes amusement in every part of the Chamber.

[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.

[Kelvin Hopkins]

Will the Minister give way?

[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.

[Sheila Gilmore]

Will the Minister give way?

[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.

[Graham Stringer]

Will the Minister give way?

[Mr Burns]

I will not.

[Graham Stringer]

There is plenty of time.

[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.

18:56

[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).

19:00

The Speaker put the deferred Questions (Standing Order No. 54).

Department of Health

Resolved,

That, for the year ending with 31 March 2014, for expenditure by the Department of Health:

(1) further resources, not exceeding £50,475,001,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,

(2) further resources, not exceeding £2,414,054,000, be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £50,292,107,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.

Department for Transport

Resolved,

That, for the year ending with 31 March 2014, for expenditure by the Department for Transport:

(1) further resources, not exceeding £3,070,706,000, be authorised for use for current purposes as set out in HC 1074 of Session 2012-13,

(2) further resources, not exceeding £4,648,442,000, be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £6,414,882,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.

The Speaker then put the Questions on the outstanding Estimates (Standing Order No. 55).

estimates 2013-14

Wednesday 3rd July 2013 Commons Chamber

Resolved,

That, for the year ending with 31 March 2014:

(1) further resources, not exceeding £192,766,307,000, be authorised for use for current purposes as set out in HC 1074, 1070, 1079 and 1082 of Session 2012-13, and in HC 322 and HC 396 of this Session,

(2) further resources, not exceeding £19,622,161,000, be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £187,933,974,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Greg Clarke.)

Ordered, That a Bill be brought in upon the foregoing Resolutions relating to Estimates 2013-14;

That the Chairman of Ways and Means, Mr Chancellor of the Exchequer, Danny Alexander, Sajid Javid, Mr David Gauke and Greg Clark bring in the Bill.

Supply and Appropriation (Main Estimates) Bill

Presentation and First Reading.

Greg Clark accordingly presented a Bill to authorise the use of resources for the year ending with 31 March 2014; to authorise both the issue of sums out of the Consolidated Fund and the application of income for that year; and to appropriate the supply authorised for that year by this Act and by the Supply and Appropriation (Anticipation and Adjustments) Act 2013.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 86).

[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

Wednesday 3rd July 2013 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Road Traffic

That the draft Road Safety (Financial Penalty Deposit) (Appropriate Amount) (Amendment) Order 2013, which was laid before this House on 5 June, be approved.—(Mr Syms.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Probation

That the draft Offender Management Act 2007 (Commencement No. 6) Order 2013, which was laid before this House on 10 June, be approved.—(Mr Syms.)

Question agreed to.

Business of the House

Wednesday 3rd July 2013 Commons Chamber

Ordered,

That, at the sitting on Wednesday 10 July:

(1) paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the name of Edward Miliband as if the day were an Opposition Day; and proceedings on the Motion may continue for three hours and shall then lapse if not previously disposed of; and

(2) notwithstanding the provisions of Standing Order No. 20 (Time for taking private business), the Private Business set down by the Chairman of Ways and Means shall be entered upon at any hour and may then be proceeded with, though opposed, for three hours, after which the Speaker shall interrupt the business. .—(Mr Syms.)

Jamie Still Campaign

Wednesday 3rd July 2013 Commons Chamber

19:04

[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)

Wednesday 3rd July 2013 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Syms.)

19:06

[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.

19:24

[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 Kevan Jones]

What about jobs?

[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.

19:36

House adjourned without Question put (Standing Order No. 9(7)).

Ministerial Correction

Wednesday 3rd July 2013 Ministerial Corrections

Wednesday 3 July 2013

Members: Correspondence

Wednesday 3rd July 2013 Ministerial Corrections

[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

Wednesday 3rd July 2013 Westminster Hall

Wednesday 3 July 2013

[Sandra Osborne in the Chair]

High Speed 2 (Ancient Woodlands)

Wednesday 3rd July 2013 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Syms.)

09:30

[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.

[Mr Simon Burns]

And after.

[Michael Fabricant]

No, it is not; ancient woodland is described as existing from 1600.

[Mr Burns]

rose—

[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.

09:48

[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]

My right hon. Friend might be interested to know that I walked both in her constituency and in the constituency of my hon. Friend the Member for Lichfield in a private visit by car all the way from the M25 up to Warwickshire along the line of route.

[Mrs Gillan]

Which of my ancient woods was it?

[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—

[Mr Simon Burns]

It was a private visit.

[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.

10:17

[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.

10:30

[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.

[Michael Fabricant]

indicated assent.

[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.

[Lilian Greenwood]

Will the Minister give way?

[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)

Wednesday 3rd July 2013 Westminster Hall

11:00

[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 (York Central) (Lab)]

rose—

[Julian Sturdy]

I am more than happy to give way to my neighbour.

[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.

11:19

[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.

11:29

Sitting suspended.

Co-operatives

Wednesday 3rd July 2013 Westminster Hall

[Mr Philip Hollobone in the Chair]

14:29

[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.

[Chris Evans]

I agree with my hon. Friend; he is correct.

[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.

[Several hon. Members]

rose—

[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.

14:49

[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.

15:00

[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.

15:08

[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.

15:19

[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.

[Stella Creasy]

rose—

[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.

15:39

[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.

15:40

[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.

15:50

[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

Wednesday 3rd July 2013 Westminster Hall

16:00

[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.

16:13

[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]

Will the Minister give way?

[Mr Foster]

I am happy to give way. I want to illustrate that we are providing support to housing of the type that the hon. Gentleman describes in his constituency.

[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 am grateful for that acknowledgement. There is, of course, always more that can be done. The hon. Gentleman will know that we have recently given local authorities the power to increase council tax by up to 100% for empty properties—

[Graham Jones]

rose—

[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.

16:19

Sitting suspended.

Disabled Access (Train Stations)

Wednesday 3rd July 2013 Westminster Hall

16:30

[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.

16:48

[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.

16:58

Sitting adjourned.

Written Statements

Wednesday 3rd July 2013 Written Statements

Wednesday 3 July 2013

Gift Aid

Wednesday 3rd July 2013 Written Statements

[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)

Wednesday 3rd July 2013 Written Statements

[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

Wednesday 3rd July 2013 Written Statements

[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

Wednesday 3rd July 2013 Written Statements

[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

Wednesday 3rd July 2013 Written Statements

[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

Wednesday 3rd July 2013 Written Statements

[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

Wednesday 3rd July 2013 Written Statements

[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.