House of Commons
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Oral Answers to Questions
(10 years, 10 months ago)
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Anas Sarwar (Glasgow Central) (Lab)
1. What effect the measures announced in the 2013 spending review will have on social mobility.
The Deputy Prime Minister (Mr Nick Clegg)
The spending review protected spending in key areas that will promote social mobility, including the schools budget, £2.5 billion for the pupil premium, 15 hours a week of free early education for the lowest-income two-year-olds and an additional £200 million to support the most troubled families.
Anas Sarwar
Child poverty fell by half under the previous Labour Government, but it is forecast to rise by 500,000 by 2015 under this Government. The Deputy Prime Minister has cut the national scholarship programme, the Sure Start programme and working tax credits for families. Are not the only beneficiaries of social mobility since the general election the Deputy Prime Minister and Lib Dem Ministers?
The Deputy Prime Minister
It is under this Government that we have given over 20 million people paying the basic rate of tax, particularly those on low incomes, a significant tax break so that they keep more of the money they earn. It is under this Government that we are taking close to 3 million people out of income tax altogether by raising the starting point at which it is paid to £10,000. It is under this Government that for the first time ever, from this September, two-year-old toddlers from the poorest families will get 15 hours free pre-school support. Relative child poverty is now at its lowest level since the mid-1980s, and the proportion of children living in relative poverty was lower in the past two years under this Government than it was in the last two years under the hon. Gentleman’s Government.
Caroline Dinenage (Gosport) (Con)
Gosport schools receive pupil premium funding, particularly because there are so many children from armed forces families. Does the Deputy Prime Minister agree that that underlines the Government’s commitment to education as one of the keys to improving life chances?
The Deputy Prime Minister
I agree with my hon. Friend. Only yesterday I attended the pupil premium awards ceremony, which was for teachers and head teachers who have made best use of the additional money, which will be £2.5 billion extra going to those schools that are educating children from the most disadvantaged backgrounds. It was a wonderful occasion, because it really showed, much as the schools in her constituency have shown, what good can come from good use of the pupil premium.
Andrew Stephenson (Pendle) (Con)
2. What assessment he has made of the role of campaigning by bodies other than political parties in elections.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
At the 2010 general election, the Electoral Commission registered 30 so-called third parties, which between them spent nearly £3 million. The Government are introducing sensible and necessary improvements to the controls on third parties to ensure that they are fully transparent and not allowed to distort the political process.
Andrew Stephenson
Given the scandal involving Unite the Union in Falkirk, and the leaked internal document showing that it is now trying to influence selections in 40 other constituencies across the country, including Pendle, does the Minister agree that there is huge public demand for complete transparency on the influence of trade unions on our political system?
Miss Smith
It is high time this is looked at. I think that the examples my hon. Friend has just given demonstrate that these are by no means isolated cases. It is the same old Labour party, which Len McCluskey still bankrolls, still rigs selections for, still controls and still chooses the leader for.
Sadiq Khan (Tooting) (Lab)
The Minister talks about transparency in the political system. She will be aware of the huge concern in March last year when it was first disclosed that multi-millionaires were getting privileged access to No. 10 Downing street and potentially influencing Government policy. It is about more than just elections; it is about influencing Government policy. Does she think that those millionaires will have more of an impact or less of an impact at the next general election?
Miss Smith
I think that the right hon. Gentleman is just treading time until his leader gets up to speak. Perhaps the leader is as weak as he is.
Lorely Burt (Solihull) (LD)
3. What consideration he has given to changing the regulations concerning voting by UK citizens living overseas.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
UK citizens resident overseas can register to vote in UK and European parliamentary elections provided that they have been registered in the UK in the past 15 years. We are extending the electoral timetable for UK parliamentary elections, which will make it easier for people overseas to use their postal votes, and the Government are also removing the requirement for an initial application as an overseas elector to be attested by another British citizen abroad.
Lorely Burt
I am grateful for that answer. As we know, many UK citizens living overseas are eligible to vote but are not registered. What steps can we take to ensure that British people living overseas are enfranchised?
Miss Smith
The Government will certainly explore all possible ways, in discussion with the Electoral Commission and other interested parties, to encourage registration among overseas electors, as we do, of course, for any eligible elector who seeks to be registered. As I say, the measures that we are taking in the context of moving towards individual electoral registration will help. I urge the hon. Lady and all those here in the House to take this issue very seriously, because very many more overseas electors ought to be registered.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
Does the Minister agree that, given the importance she puts on this, the immediate priority must be the 6 million people in this country who are already eligible to vote but are missing from the register? What is she going to do about that?
Miss Smith
I have an entire programme of activities on individual electoral registration, about which I have always been happy to brief the House; in fact, I will do so again shortly by invitation to all right hon. and hon. Members. When it comes to deciding which voters are more important than others, all voters are equally important.
Sir Peter Tapsell (Louth and Horncastle) (Con)
Is consideration being given to the possibility that residents of the Falkland Islands will be given the right to vote in British elections in the same way as the French give people living on the island of Réunion the right to vote in French elections?
Miss Smith
There are various categories of eligibility depending on the status of the country in question—for example, the rules that relate to Commonwealth voters who are resident in this country. I would be happy to take a further look into that question in the light of any changes that my right hon. Friend might be referring to.
Andrew Gwynne (Denton and Reddish) (Lab)
Does the Minister have any concern that a number of local authorities are cutting the money that is dedicated to electoral registration? If so, what is she going to do about it?
Miss Smith
The hon. Gentleman will have been eagle-eyed and read my written ministerial statement last week announcing £4.2 million to deal with exactly that.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
4. What assessment he has made of the work of the Commission on Devolution in Wales.
The Deputy Prime Minister (Mr Nick Clegg)
The Government are grateful to the commission for its hard work and for engaging widely across Wales. We have been carefully considering its recommendations on the financial powers of the Assembly, and we intend to respond shortly. The commission is now undertaking a thorough review of the broader devolution settlement for Wales, and I look forward to seeing its report next year.
Simon Hart
The Chief Secretary to the Treasury has said that funding improvements to the M4 are largely connected with the recommendations of the Silk commission. Given that Welsh businesses have already suffered two delays, will the Deputy Prime Minister ensure that they do not suffer a third as a result of delayed negotiations?
The Deputy Prime Minister
As my hon. Friend knows, the Chancellor recently confirmed that we would respond to part 1 of the Silk commission’s report shortly. It is a complex area of work. There are 33 recommendations that touch on various complex areas of fiscal and taxation policy. We are endeavouring to respond as soon as possible, including on the issue of infrastructure investment that he raises.
Mr David Hanson (Delyn) (Lab)
Will the Deputy Prime Minister give me a guarantee that, as a Member of Parliament representing a constituency in Wales, I will still be able to vote and speak in this House on matters that affect my constituents who use health services, transport and employment in England?
The Deputy Prime Minister
Yes, I think that is an assurance that I can give the right hon. Gentleman; I am not quite sure what he is driving at. The process of devolution across the United Kingdom is not incompatible with making sure that the House acts as one where we need to do so, but also, as the McKay commission examined, that we explore the possibility of ensuring that where matters apply only to England that is somehow reflected in the procedures of this House.
Stephen Lloyd (Eastbourne) (LD)
Will the Deputy Prime Minister update me on what discussions have taken place with the Northern Ireland Executive on the further devolution of powers to the Executive?
The Deputy Prime Minister
There are of course ongoing discussions. I was in Northern Ireland myself just a few weeks ago. As my hon. Friend may know, one of the main topics of discussion has been the proposal for the devolution of corporation tax to Northern Ireland because of Northern Ireland’s rather atypical economic position given its significant land border with the Republic of Ireland. We are giving very serious consideration to this. We will not make a final decision until after the referendum on Scottish independence next year.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Last night we were legislating on some of the recommendations of the Parliamentary Commission on Banking Standards, 13 days after it published its final report. It is eight months since Silk finished the first phase of his report. Why are the UK Government treating the people of Wales with such contempt, when all the polls indicate strong support for official powers for Wales?
The Deputy Prime Minister
Of course I acknowledge the fact that the success of the Silk commission is that it has mobilised such cross-party consensus and support in Wales. That is why, far from treating the recommendations with contempt, we are treating them with a great deal of seriousness. I accept that that is taking a little longer than the hon. Gentleman might want, but when we announce our response to the 33 recommendations I hope he will be pleasantly surprised at our forthcoming and forward-leaning approach.
David T. C. Davies (Monmouth) (Con)
Does the Deputy Prime Minister agree that it would be utterly wrong to allow yet further powers to be given to the Welsh Assembly before we have resolved the problem of what we do about English devolution?
The Deputy Prime Minister
I do not think one should seek to be too neat about these things. Of course I accept that there is an issue with how English votes on issues that affect only English constituencies are dealt with in this House. The McKay commission examined that, and we are now reflecting on its recommendations, but that does not mean that we should somehow freeze in time an ongoing process of devolution to other parts of the United Kingdom.
Jonathan Lord (Woking) (Con)
5. What recent representations he has received on the role of trade unions in the funding of political parties.
The Deputy Prime Minister (Mr Nick Clegg)
The cross-party funding talks during 2012 and 2013 included discussions on reform of donations, spending, and how to deal with affiliate bodies such as trade unions. In my written statement to the House last Thursday I expressed my disappointment that, as on previous occasions, the talks were not able to reach agreement on beginning party funding reform in this Parliament.
Jonathan Lord
I welcome the Damascene conversion of the Leader of the Opposition to the merits of trade union members opting in to the political levy, but does the Deputy Prime Minister agree that it is way past time for trade union members to be able to decide to which political party they donate?
The Deputy Prime Minister
I agree with my hon. Friend and think that, as on so many other matters, the vast majority of the British people would also agree with him rather than the Labour party. If Labour Members want to turn their leader’s words today into action, we are prepared to work with them and use the forthcoming party funding Bill—[Interruption.] That is a serious suggestion and offer to turn the principle of an opt-in on the political levy into law, and indeed to give trade union members the right to support other parties, if that is what they wish. I hope Labour Members will take that opportunity, because it is time to turn words into actions.
Mr David Winnick (Walsall North) (Lab)
Would not the Deputy Prime Minister speak with more credibility about political funding if his party returned the £2.5 million given to it by a convicted criminal, Michael Brown? That money was stolen. Why not return it?
The Deputy Prime Minister
I know that things must be difficult for the hon. Gentleman at this time and that he wants to spread mud around the place, but the fact is that the issue in British politics today is how on earth it is possible that the Labour party—a so-called progressive party—is funded to the tune of £11 million by Unite, which hand-picks its parliamentary questions and its parliamentary candidates. That is why I repeat my sincere offer to use forthcoming legislation to turn the promises being made by his leader into action.
Stephen Mosley (City of Chester) (Con)
Given the scandal engulfing the Labour party, is it not time that my right hon. Friend offered the Leader of the Opposition a helping hand and introduced a £50,000 cap on donations to political parties, which would stop big-money trade unions buying parliamentary seats?
The Deputy Prime Minister
I should point out to my hon. Friend that the donation cap did not find favour among various parties in the recent cross-party talks. The issue of the day is: are parties in this House free of vested interests—yes or no? I do not think it healthy for the Labour party or, for that matter, the trade unions to have this dysfunctional relationship. I welcome what the leader of the Labour party is saying today and offer legislation on behalf of the coalition Government to turn his words into action.
Wayne David (Caerphilly) (Lab)
On the funding of political parties, in recent years donations to the Conservative party from hedge fund managers, bankers and others associated with the City of London have doubled to nearly £43 million. They obviously like the half-baked regulatory measures being introduced by this Government. What measures does the Deputy Prime Minister plan to take to ensure full transparency, so that these donations, to use his own words, are not allowed to distort the political process?
The Deputy Prime Minister
All parties in this House, if we are candid with each other, have had problems with the way in which big money circulates in politics. That is why I remain a keen advocate of a cross-party approach to getting big money out of political donations and why I am disappointed that the recent cross-party talks did not lead to fruition. We can make progress, which is why we are about to table a Bill on third party funding to limit the influence of non-political parties in the democratic process. I repeat what I said earlier: given that the Labour party finally seems to have had a change of heart over the way in which it organises its dysfunctional relationship with its financial backers, I hope that it will work with us to reflect that in law.
Jeremy Corbyn (Islington North) (Lab)
6. What steps he is taking to ensure a high level of voter registration by young people.
The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)
The Government, politicians, political parties, electoral administrators and others in society have a role to play in encouraging people, including young people, to register to vote. As I have mentioned, the Government are making available up to £4.2 million this year to maximise the rate of voter registration ahead of the transition to individual electoral registration in 2014. That will be targeted at groups of people who are under-represented on the electoral register, including young people.
Jeremy Corbyn
Does the Minister not accept that under individual registration there will be the serious problem that a lot of young people who lead slightly dysfunctional lives because they are away at college or working away, or for all kinds of other reasons, will not be at an address when a registration form arrives, will not be able to register, and consequently will not be able to vote? Will this system not end up disfranchising a large number of young people who ought to be enfranchised in our system?
Miss Smith
As the youngest Minister in Her Majesty’s Government, I could not agree more on the importance of enfranchising young people. However, I disagree entirely that IER will lead to what the hon. Gentleman describes. There are multiple points at which electoral registration officers will make contact; it is not a case of just one officer turning up. I stand strongly by the principle that it is right in a modern society for people to have an individual right, and indeed a responsibility, to register.
Mr Philip Hollobone (Kettering) (Con)
Given that voter registration is straightforward and free of charge, why do the Government not require all public sector organisations, whenever they come into contact with anybody—young, middle-aged or old—to ask whether they are on their local register, and if they are not, to tell them how to register?
Miss Smith
My hon. Friend makes a helpful point. Many opportunities to achieve the ends that he sets out are afforded by having more public services online. We are introducing digital registration in 2014, which will be very helpful in achieving that shared aim.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Deputy Prime Minister (Mr Nick Clegg)
As Deputy Prime Minister, I support the Prime Minister on the full range of Government policy initiatives and I have responsibility for the Government’s programme of political and constitutional reform.
Debbie Abrahams
In this flatlining economy, nearly 1 million young people are unemployed. In my constituency there has been a 10% increase in youth unemployment. Most worryingly, there is a disproportionate impact on young people from black, Asian and minority communities. One in two young black men is unemployed, compared with one in four young men in the white community. Why are the Government not addressing that appalling inequality?
The Deputy Prime Minister
I am sure that all Members from all parts of the House will agree that it is important that we give young people more opportunities to get into work. That is why we have massively expanded the number of apprenticeships that are available to young people, on a scale that dwarfs anything the previous Government had planned, and why we have made available £1 billion for the Youth Contract. I urge the hon. Lady, if she has not done so—[Interruption.] She says that it is not working. It offers funding for 250,000 new work experience places, which is a great way of getting young people into work. If she worked with us, she could explain to employers in her constituency that wage subsidies are available under the Youth Contract so that if a local employer takes on a young person, they get paid for doing so by the Government.
Mr Speaker
Order. Members need to be much briefer if we are to get through the questions.
Laura Sandys (South Thanet) (Con)
T2. Will the Deputy Prime Minister update the House on the development of single pot funds and on what that will mean for east Kent in respect of the access to devolved money?
The Deputy Prime Minister
The Chancellor announced recently that we will start with a so-called single pot, as proposed by Lord Heseltine, of just over £2 billion. That is just the start of the process. Local enterprise partnerships across the country will be able to bid for at least half of that money and the rest will be distributed on a formula basis.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
Does the Deputy Prime Minister agree that people do not like the fact that MPs can earn tens of thousands of pounds, sometimes even hundreds of thousands of pounds, from second jobs? Will he work with us to clamp down on MPs having second jobs?
The Deputy Prime Minister
I am not sure if I agree with the right hon. and learned Lady that we should stop—or clamp down on, as she puts it—MPs having additional employment. What is important is for that to be as transparent and accountable as possible. People expect their MPs to work for their constituents: that is what we are here for, and that should remain the principal purpose of all MPs elected to this place.
Ms Harman
It is important to have transparency, and we have transparency, but we need to do more. It is the amount of money that people see MPs earning that they do not agree with. The Deputy Prime Minister mentioned that he will introduce a Bill. Will it make provision for companies to consult shareholders before they are allowed to make donations to political parties?
The Deputy Prime Minister
Dare I say it, it is interesting that the right hon. and learned Lady is raising detailed points about reforming party funding now, when her party singularly failed to do so in the cross-party talks that, unfortunately, have just come to an end. We see the consequences in the headlines: the Labour party has failed and failed and failed to address the fact that it is at the beck and call of major vested interests in British society. That is not healthy for the Labour party. That is not healthy for trade unions. That is not healthy for democracy.
David Mowat (Warrington South) (Con)
T3. In the event of a no vote in the Scottish referendum next year, there is some discussion that further devolution, sometimes called devo max, will be offered. Will the Deputy Prime Minister confirm that before we go ahead with anything along those lines, there will be clarity on how many fewer MPs from Scotland there will be in this place?
The Deputy Prime Minister
It is for each party to explain how it wants to see the process of devolution continue in the wake of next year’s referendum. Let us first settle the question of whether Scotland will remain a part of the family of nations that makes up the United Kingdom, and then decide as different parties. Speaking on behalf of my party, we will always be at the forefront of arguing for greater devolution within a United Kingdom.
Ian Murray (Edinburgh South) (Lab)
T5. The Deputy Prime Minister said, in launching his party’s 2010 green manifesto, that the Tories“talk the talk on green issues only to align themselves with climate deniers”.Will he explain to the hundreds and hundreds of constituents who contacted me why he and his party voted against the decarbonisation target in the Energy Bill?
The Deputy Prime Minister
As the hon. Gentleman would know if he followed the debate, we will be taking powers to introduce a decarbonisation target when the next carbon budget starts. There are different opinions on this. Some Members suggested recently that we should abolish the Department of Energy and Climate Change—indeed, that we should abolish my office, too—and any mention of climate change. Needless to say, I think they are wrong on all counts.
Karl MᶜCartney (Lincoln) (Con)
T4. Given the success of the Deputy Prime Minister’s political and constitutional reform agenda to date, what other plans might he have to reform party political funding and allow Opposition Members to voice their opinions free from the yoke of union oppression?
The Deputy Prime Minister
As the hon. Gentleman knows, unfortunately, after numerous meetings bringing together representatives of the main parties in the past year or two, once again a cross-party consensus on party funding appears to have eluded us. I remain ready at any time to take up cross-party discussions. We need to reform party funding for the sake of all political parties, but the party in the spotlight today is the Labour party and its dysfunctional links with the trade unions. We will make available Government legislation to turn their words into action.
Rosie Cooper (West Lancashire) (Lab)
T6. Does the Deputy Prime Minister agree that paying the same fee to lawyers whether there is a guilty plea or a not guilty plea risks undue pressure being placed on defendants to plead guilty even though innocent, leading to miscarriages of justice? Does he also agree that the legal aid proposals from the Justice Secretary are half-baked?
The Deputy Prime Minister
The Justice Secretary has made it clear that he cannot and will not escape from the need to make just over £200 million of savings from the significant amount of money invested in our legal system. He will remain open-minded, as he reflects on the results of the recent consultation on his proposed legal aid reforms, on exactly how those reforms should be implemented, as long as the savings are achieved.
Fiona Bruce (Congleton) (Con)
T12. Will the Deputy Prime Minister join me in welcoming this week’s news that after talks South and North Korea have reached agreement to reopen the jointly run Kaesong industrial complex, and does he not agree that this shows that dialogue into North Korea makes a difference and that consideration by the BCC World Service to start transmission into North Korea should be given priority?
The Deputy Prime Minister
I pay tribute to my hon. Friend for all her work on this vital issue, which is of huge significance not just for the region, but for world stability. I agree that the agreement reached—thankfully—on the use of the Kaesong industrial site is a significant step forward, given where we were just a few weeks and months ago, and yes, I agree that the role of the BBC World Service in projecting our values is immensely important.
Sheila Gilmore (Edinburgh East) (Lab)
T8. In answer to my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams), the Deputy Prime Minister did not seem to be aware that the chief executive of the Recruitment and Employment Confederation said that virtually none of its members had taken up the wage incentive. What is he going to do about this, and does he now regret having fully endorsed so quickly the abolition of the future jobs fund?
The Deputy Prime Minister
The problem with the future jobs fund, as I hope the hon. Lady will acknowledge, was that, although it moved young people into jobs, often it did so only temporarily, and the point of the Youth Contract is to learn from those mistakes to ensure that the jobs created for young people last. The evidence, both from our huge expansion of apprenticeships and the parts of the Youth Contract giving young people opportunities, is that they are staying in work, and not simply being provided with temporary work, which is what happened under the future jobs fund.
Greg Mulholland (Leeds North West) (LD)
The Deputy Prime Minister has been hugely helpful in helping to secure Government funding for the Tour de France in Yorkshire next year, but less helpful has been the response I have had to the “be inspired, get involved” initiative. With the anniversary of London 2012 coming up, will he meet me in the next 10 days to discuss the matter?
The Deputy Prime Minister
Of course, I am happy to meet my hon. Friend at any time to discuss that. I strongly agree that having the start of the Tour de France in Yorkshire is a wonderful opportunity not just to show off the virtues of Yorkshire, but to put Britain on the map, once again, for this great, global sporting event.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
T9. The Deputy Prime Minister lauds the success of the Youth Contract, but let me give him a hard fact: one third of businesses recently surveyed said they had not even heard of it. What is he going to do about it?
The Deputy Prime Minister
I hope that the hon. Gentleman will join me in explaining to employers in his constituency that this payment of just shy of £2,300 is available to employers under the wage incentive in the Youth Contract where they take on young people. I hope he will also be aware that the Youth Contract consists not just of those 160,000 wage incentives, but of a funded increase in the number of work experience places—a quarter of a million of them—and a significant increase in funding for apprenticeships aimed at young people.
Dr Julian Lewis (New Forest East) (Con)
How much have the Deputy Prime Minister and his Cabinet Office colleagues cost the public purse in conducting a study of alternatives to Trident that has taken more than two and a half years to show that there are indeed no alternatives to Trident as the basis of our nuclear deterrent?
The Deputy Prime Minister
My hon. Friend must be a soothsayer if he can tell what is in a report that has not been published yet. As he knows, the confidential version of the report has been provided to the Prime Minister and me, and we hope to publish the unclassified version shortly, when he will see that options are available to us. I have always argued against the idea that a total, like-for-like, exact replacement of Trident on precisely the same basis is the only option available to us as a country.
John Woodcock (Barrow and Furness) (Lab/Co-op)
T10. Does “shortly” mean before the summer recess? Given that the Deputy Prime Minister’s report will show that his grand idea of a mini-deterrent was always a complete fantasy, why should anyone take him seriously if he now says that Britain could be adequately protected with a part-time deterrent?
The Deputy Prime Minister
We have another psychic telling us what is in a report that he has not seen yet. We hope that the report will be published shortly; we hope to publish it before the recess, but of course we need to check that the unclassified document is properly vetted in all respects, which is what we are doing at the moment. The simple point is: does the hon. Gentleman believe that a weapons system designed to be fired at the push of a button, at any minute of any hour of any day, 365 days a week, to flatten Moscow in a cold war context, is the only weapons system available to us? That is the question he needs to answer.
Mr David Nuttall (Bury North) (Con)
Will the Deputy Prime Minister set out the occasions on which he or any other Liberal Democrat Minister met Derek Webb and what was discussed at those meetings?
The Deputy Prime Minister
I will happily write to the hon. Gentleman. I am afraid I cannot answer that question right now.
Mr David Hanson (Delyn) (Lab)
T11. What explanation does the Deputy Prime Minister give for the fact that since the Youth Contract was launched, 11,600 more young people have been unemployed for over 12 months than before?
The Deputy Prime Minister
As the right hon. Gentleman knows, headline figures for youth unemployment have, thankfully, come down. I have seen that in the city for which I am an MP, where youth unemployment has come down by 8%, but of course we need to do more. He also knows that, of the headline figures, around 300,000 or 400,000 are in education, but we need to do more. That is what the Youth Contract is about. I accept that there is a challenge to communicate with employers so that they take up the bit of the Youth Contract that will be of help to them.
Simon Hughes (Bermondsey and Old Southwark) (LD)
In the interest of victims of press intrusion and many others, will the Deputy Prime Minister confirm that the charter for press regulation agreed by this House and all parties will be put to the Privy Council at the earliest possible opportunity for agreement?
The Deputy Prime Minister
Of course I can confirm that we will do so at the earliest possible opportunity, but first we need to respect the processes of the Privy Council, as my right hon. Friend knows. Another, rival charter has been submitted for consideration at the Privy Council. We need to ensure that it is properly examined objectively and is not subject to undue interference. That process is now under way. He, like many people who voted on 18 March for the cross-party royal charter, is impatient to get on with it. I understand that. Our support for the royal charter voted for on 18 March remains, but we must also ensure that things are done objectively and reasonably in the Privy Council.
Chris Bryant (Rhondda) (Lab)
But Ministers tabled a motion on 18 March stating that the royal charter would go to the May Privy Council. Did they not know that they would be beaten to it by the press barons of this country? Why can it not go to the July meeting of the Privy Council? If not in July, why can the Deputy Prime Minister not have a special meeting in August or September, or whenever? The House decided. Why should others circumvent the will of this House?
The Deputy Prime Minister
I hear the hon. Gentleman’s frustration, but he will recall that on 18 March there was only one royal charter in play: the royal charter that we adopted on a cross-party basis—
The Deputy Prime Minister
Yes, with an overwhelming majority in this House. I certainly stand by my support for that, as I think everyone does across all sections in the House. However, another royal charter has since been put forward for consideration in the Privy Council. Whether the hon. Member for Rhondda (Chris Bryant) likes it or not, we must allow objective consideration of that additional royal charter.
Chris Heaton-Harris (Daventry) (Con)
When the Deputy Prime Minister last stood in for the Prime Minister at Prime Minister’s questions, he not only gave my hon. Friend the Member for Wellingborough (Mr Bone) the jitters but provided me with a helpful answer about the Special Olympic games being held in Bath in August and spreading the Olympic legacy. Alas, not too much has happened since. Will he look at that answer again and see what can be done?
The Deputy Prime Minister
I will look at the issue again and speak to my right hon. Friend the Secretary of State for Culture, Media and Sport to ensure that my hon. Friend gets a full answer.
Ian Lavery (Wansbeck) (Lab)
I am a proud trade unionist. I am proud of the fact that the trade union contributions to donations come from hard-working people up and down the country, who should not be smeared by Government Members. Will the Deputy Prime Minister consider legislation to ensure that the shareholders of big businesses that wish to donate to any party will be consulted and will have to agree to any such donation?
The Deputy Prime Minister
As I said before, I am up for a cross-party consensus to reform party funding across the piece. We had the opportunity to do that over the last two years, but the hon. Gentleman’s party singularly failed to step up to the mark in those cross-party discussions. Now that it has been revealed for the whole country to see that the Unite union is hand-picking parliamentary candidates, funding the Labour party to the tune of £11 million, suddenly the Labour party has belatedly discovered an enthusiasm for reform. We will make Government legislation available to make that happen.
Simon Wright (Norwich South) (LD)
May I urge my right hon. Friend to look into how a city deal for Norwich would help to create new jobs by capitalising on the economic growth of the world-class institutions at the Norwich research park?
The Deputy Prime Minister
My hon. Friend is getting active support from the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Norwich North (Miss Smith), who is sitting to my left. As he knows, Norwich is one of the 20 cities and towns that are in the process of securing a second wave of so-called city deals, following the first wave for the eight largest cities outside the south-east. I met representatives from Norwich and the other 19 places recently, and I am optimistic that we will be able to make an announcement in the autumn or winter.
Lindsay Roy (Glenrothes) (Lab)
According to a recent Hansard Society survey, only 12% of 18 to 24-year-olds are committed to voting in the next general election. Why does the Deputy Prime Minister think that is the case, and what steps does he intend to take to improve participation?
The Deputy Prime Minister
As the Parliamentary Secretary, Cabinet Office explained earlier, a number of steps are being taken to ensure that young voters understand how individual voter registration will work and that they take the opportunity to register themselves individually so that they can participate fully in future elections.
John Cryer (Leyton and Wanstead) (Lab)
Will the Deputy Prime Minister now answer the question put by my hon. Friend the Member for Wansbeck (Ian Lavery)? Does he or does he not think that shareholders should be consulted before donations are made to a political party?
The Deputy Prime Minister
There is a whole bunch of things we need to do to reform party funding, for the sake of all the political parties. It is a bit rich for Labour Members to assume this rather pious tone when it is their problems that are once again disfiguring the way in which money circulates in politics in this country.
Ian Lucas (Wrexham) (Lab)
On third-party donations, will the Deputy Prime Minister confirm that his party received a donation of £350,000 from the Joseph Rowntree Reform Trust before the last general election? Does he think that Joseph Rowntree would be pleased to see his money being used to prop up a Tory Government?
The Deputy Prime Minister
If the hon. Gentleman is concerned about being progressive, I do not know what is progressive about the sight of a major political party that is at the beck and call of a vested interest. I do not think that it is healthy for the trade unions, either. Over the past three years, his party has shown itself to be incapable of progressive political reform. It has blocked House of Lords reform, failed to campaign actively for the alternative vote and failed to deliver cross-party political funding reform. I think Joseph Rowntree would have been very disappointed by that.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I am sure that the Deputy Prime Minister will share my concern about young people not voting. If so, why, as a member of the coalition Government, is he standing by as citizenship training disappears from our schools up and down the country?
The Deputy Prime Minister
I hope that the hon. Gentleman has had time to look at the national curriculum, which was published yesterday by the Secretary of State for Education and the Prime Minister. It places laudable emphasis on ensuring that citizenship is properly taught in schools. We also have a programme of schools outreach, and we will be looking for organisations to deliver a set lesson framework, Rock Enrol, which is being developed and piloted by Bite the Ballot in a number of schools across England and Wales. Those are good initiatives.
Nick Smith (Blaenau Gwent) (Lab)
1. What recent assessment he has made of the performance of the Crown Prosecution Service in procuring and outsourcing services.
The Attorney-General (Mr Dominic Grieve)
The Crown Prosecution Service has a good record of procuring and outsourcing services. The Department utilises pan-government contracts for goods and services and has extensive arrangements for outsourcing services including advocacy, information technology and facilities management. These arrangements save many millions of pounds a year, protecting front-line jobs and front-line service delivery.
Nick Smith
The Crown Prosecution Service has a pilot contract for interpreters at four witness care units, but it has been dogged by delay. What is going to happen now at witness care units across the country?
The Attorney-General
The use that the CPS makes of those services is actually fairly limited. The information that I have does not suggest that the difficulties experienced by the service more generally have caused the CPS a problem.
Stella Creasy (Walthamstow) (Lab/Co-op)
2. What recent assessment he has made of the reliability and punctuality of the Crown Prosecution Service in court proceedings.
The Solicitor-General (Oliver Heald)
Conviction rates are high and punctuality is good.
Stella Creasy
I am surprised by the Minister’s answer because last year the CPS failed to comply with nearly half the court orders on time—at great expense to the public purse. Just what do Ministers intend to do about this so that justice delayed is not justice denied?
The Solicitor-General
The hon. Lady raises an interesting point. Hot off the press today, we have had the annual report of Her Majesty’s Crown Prosecution Service Inspectorate, which looked at this issue and concluded that compliance with court directions was improving, as was monitoring. Looking at the overall picture, which is what the hon. Lady’s question was about, there are 800,000 cases a year—
The Solicitor-General
I have answered the question, which is that there has been an improvement in compliance. I would like to point out, if I may, that conviction rates are at 86% and that with ineffective cases the Crown Prosecution Service is not ready only in 1.5% to 2% of cases.
Mr David Burrowes (Enfield, Southgate) (Con)
I declare an interest as a defence solicitor, but I mention the interest of taxpayers and justice, too. How can we hold the Crown Prosecution Service to account when it fails during a criminal justice case that is in process, particularly given the lack of wasted costs orders applying to legal aid cases?
The Solicitor-General
As my hon. Friend will know, there are measures in place, such as the right of review and complaints system, which allow complaints to be made. More generally, it is worth looking at the annual report of the HMCPSI, which concludes that against a background of reducing costs there has been an improvement in almost all areas.
Keith Vaz (Leicester East) (Lab)
It is not just a case of turning up to court on time; it is a case of processing cases quickly. I wrote to the Attorney-General yesterday about a young woman who was killed exactly a year ago—Elena Fanaru—and it took the CPS a year to bring the person responsible to court. The hon. and learned Gentleman cannot accept that that is a good deal for the victim, as it causes additional stress to victims’ families and others concerned in these cases.
The Solicitor-General
The right hon. Gentleman is absolutely right to take up the case with my right hon. and learned Friend and he knows that the matter will be looked at carefully. On a day such as today, however, when the HMCPSI annual report has just come out showing progress in all areas, it is worth reflecting on the fact that, although we often rightly talk about individual cases in this place, there are high levels of convictions and very good results on punctuality overall. We are also seeing overall decision making on charging improving, assessment of case work quality improving, compliance with Crown court directions improving and the processes of dealing with disclosure—an extremely difficult issue—improving. Hon. Members are right to take up these issues.
Mr Philip Hollobone (Kettering) (Con)
I think the Crown Prosecution Service does a good job, especially in Northamptonshire, but I was surprised to receive a written response from the Solicitor-General, saying that the CPS
“does not maintain a central record of the number of times an application to remand a defendant in prison has been refused.”—[Official Report, 8 July 2013; Vol. 566, c. 11W.]
I think the public would like to know that information and I think the CPS would find it useful; we could then see where the problem lies—with the CPS or with the courts.
The Solicitor-General
The CPS, of course, keeps quite a range of different management information, but that is not one of them. I am certainly happy to consider whether it would be possible, but against the background that we do not want to clog up the system with a lot of over-reporting and regulatory concerns at a time when we are reducing costs.
Emily Thornberry (Islington South and Finsbury) (Lab)
I am concerned about the Solicitor-General’s complacency on this issue, particularly in the light of what has happened in the last three weeks. Crown court judges across the country, from Bristol to Warwick and from Warwick to Croydon, have said publicly what all those working in the criminal justice system have been saying privately for some time—that the CPS is dogged by delays and disorganisation, that trials are being put at risk and that there is a danger that people charged with very serious offences such as murder and rape will walk away scot-free. I have written to the Director of Public Prosecutions about this, and I would ask the Solicitor-General to acknowledge these problems and tell us exactly what it is that he is going to do about them.
The Solicitor-General
The hon. Lady has written a letter to the Director of Public Prosecutions, citing three cases out of 800,000—and they are not what they seem. For example, in one case, the advocate for the prosecution fell ill at court; the judge was not aware of that and made some comments about the way in which the case was being conducted, but at the time—
The Solicitor-General
It was indeed a serious case, but when that advocate fell ill, he was replaced by another, and a conviction followed.
I do not think that picking three instances, all of which involve special circumstances, is the right way of dealing with this. The HMCPSI report examined 2,800 cases, reviewing the files in detail, and they presented a promising picture.
Mr Marcus Jones (Nuneaton) (Con)
3. What assessment he has made of the level of public understanding of the legal framework applicable to the internet.
The Attorney-General (Mr Dominic Grieve)
Since taking office, I have brought a number of successful proceedings involving contempts committed online. The Crown Prosecution Service has also prosecuted numerous offenders who have used the internet to commit criminal offences, and recently issued new guidelines to prosecutors on the handling of cases involving social media. Many of those cases have been widely reported in both national and local media, and I trust that they have increased public awareness of the fact that misconduct online has consequences.
The Attorney-General
I trust that it has. If we wish to preserve trial by jury, it is extremely important that judges’ directions to juries not to conduct research are properly observed. If they are not, trial by jury will not survive. I have brought a number of cases against jury members; they have been reported, and I hope that as a result of my bringing them, I shall have to bring far fewer in future.
Kerry McCarthy (Bristol East) (Lab)
When the footballer Ched Evans was convicted of rape last year, his victim was named more than 6,000 times on Twitter. She has been forced to accept a new identity and relocation package. I understand that only a handful of people have ever been held to account for naming her, and that they have merely been ordered to pay compensation. Should we not send a much stronger signal to people who indulge in such behaviour?
The Attorney-General
The hon. Lady has raised two separate points The first relates to the way in which the CPS has gone about prosecuting these cases. It has obviously been selective. Cases have to be brought to its attention, and it seeks to deal with those cases, particularly cases involving those who have initiated such comments. I think that that must be the right way of going about things. As for the hon. Lady’s point about penalties, she must understand that they are not a matter for the CPS. If Parliament wishes to make the penalties more severe, that is a matter for legitimate debate in the House of Commons.
Dr Julian Huppert (Cambridge) (LD)
The Attorney-General referred to the new guidelines from the Director of Public Prosecutions on social media. They are very welcome, but does he agree that in some cases the law is not clear, and is being brought into disrepute? I am thinking of, for example, the Twitter joke trial under section 127 of the Communications Act 2003.
The Attorney-General
The principle of the Malicious Communications Act 1988 places a higher threshold on prosecution than an ordinary abusive comment, but it must be shown that, in the circumstances, the comment was grossly offensive. I hope that the guidelines issued by the CPS—I am grateful to my hon. Friend for his appreciation of what they have done—will provide a framework that shows clearly what is and what is not acceptable, but there are bound to be areas that present some difficulty. The basic rule must be that the fact that someone is operating on social media does not give that person immunity from the criminal law.
Mr Gregory Campbell (East Londonderry) (DUP)
As one who, some time ago, was the subject of a specific death threat on a social media site—which, thankfully, resulted in a successful prosecution—may I ask the Attorney-General to reassure the public that people’s perception of their own anonymity on a keyboard will be dispelled, and that those who break the law on line will be rigorously pursued?
The Attorney-General
I agree with the hon. Gentleman. I think that some individuals have come in for a rude surprise when they have been prosecuted despite having believed that they enjoyed anonymity. While of course there may be circumstances in which prosecutions cannot be brought—there can clearly be no prosecution when material is placed on the internet from abroad—I am generally satisfied, on the basis of what I have observed, that both the police and the CPS have responded proactively. They take offences of this kind seriously, and are keen to convey the message that this is not an area in which people can behave with impunity.
Diana Johnson (Kingston upon Hull North) (Lab)
What discussions has the Attorney-General had with the Department for Education about ensuring that young people fully understand the legal framework of the internet, and, more important, know how to keep themselves safe on the internet?
The Attorney-General
The hon. Lady raises an interesting and important point. We have had no formal discussions about that, but I know it has been discussed informally because I have done so myself. She might wish to ask the Secretary of State for Education that question, as the way in which young people can be brought up to understand their rights and responsibilities is an important part of the new curriculum.
Kwasi Kwarteng (Spelthorne) (Con)
4. What benefits he expects will be achieved by the continued merger of departmental legal advisers into the Treasury Solicitor’s Department.
The Solicitor-General (Oliver Heald)
Sharing legal services brings considerable benefits, including greater flexibility and resilience, more efficient deployment of legal resources, more opportunities for savings and improved knowledge-sharing, which in turn supports consistency.
Kwasi Kwarteng
I am grateful to my hon. and learned Friend for his answer, but what steps is he taking to ensure that TSOL actually does provide value for money, and how will the Government’s legal bill be reduced as a consequence of this merger?
The Solicitor-General
This is part of the civil service reform plan, and bringing services together at TSOL has, for example, meant it has become a centre of excellence in employment law. TSOL also has a good record of reducing cost, with 40% efficiencies from its shared litigation service.
Valerie Vaz (Walsall South) (Lab)
Will the Solicitor-General assure the House that public money will not be wasted in transaction costs between Departments and that we will not end up with more finance officers chasing invoices than lawyers doing the work?
The Solicitor-General
It is true that clients in the Departments are billed by TSOL, but this is a lean process and fees are being kept down at a reasonable level.
Ian Mearns (Gateshead) (Lab)
5. Whether the Crown Prosecution Service is always informed when an undercover police officer has been involved in an investigation that leads to a prosecution.
The Attorney-General (Mr Dominic Grieve)
The CPS should always be informed. The CPS signed a memorandum of understanding in June 2012 with the Association of Chief Police Officers, the Serious Organised Crime Agency and Her Majesty’s Revenue and Customs, which ensures investigators and prosecutors work closely together when covert operations are embarked upon where there is clear potential for a prosecution.
Ian Mearns
The former police Minister said undercover police officers could have sex with suspects if abstaining would blow their cover. Does the Attorney-General agree with the Northumbria police and crime commissioner and former Solicitor-General, Vera Baird, that the sexual activities of some of these undercover officers when they enter into a relationship with protestors may fall within the definition of rape?
The Attorney-General
I think the hon. Gentleman is asking me for a legal opinion, which I do not think I am in a position to provide across the Floor of the House. That was the thrust of his question, but what I can say is that the CPS takes very seriously the fact that if there is covert police activity it must be informed about it, because it is highly relevant to the conduct of any prosecution.
Miss Anne McIntosh (Thirsk and Malton) (Con)
May I tempt my right hon. and learned Friend to state whether it will be appropriate for police officers in those circumstances to be prosecuted if they are deemed to have broken the law and overstepped the mark in their undercover operations?
The Attorney-General
Nobody is immune from the law, and if a police officer acting undercover breaks the criminal law of this country, they make themselves liable to prosecution.
Caroline Lucas (Brighton, Pavilion) (Green)
There seems to be complete chaos in understanding what the police are, and are not, allowed to do when undercover. Given that a number of legal cases have been dropped or put at risk because of the involvement of undercover police officers, is it not high time there was a proper judge-led public inquiry so we get to the bottom of this and make sure we know what the rules are in the future and what the judgments are for the past?
The Attorney-General
I certainly acknowledge that the hon. Lady is right, and the consequence of the Ratcliffe-on-Soar power station case was that a review was carried out by Sir Christopher Rose, and the CPS took the issues in that very seriously, but any question of a wider inquiry or review does not lie within the remit of my Department.
Grahame M. Morris (Easington) (Lab)
7. What recent discussions he has had with the Director of Public Prosecutions and the director of the Serious Fraud Office on the feasibility of introducing an offence of reckless management of a financial institution.
Grahame M. Morris
In view of the recent announcement on this, I wonder whether the Minister can give us any indication of which prosecuting agency would be responsible for enforcing the new offence of reckless mismanagement of a financial institution, and what steps are being taken to ensure that the agency has sufficient resources to tackle what are likely to be complex cases?
The Solicitor-General
As the hon. Gentleman will know, this Government set up the commission on banking which has come up with the recommendation that there should be such an offence. The Government have accepted that recommendation and the drafting process is in hand. I cannot go further than that, but he will see the draft when it is ready.
Greg Mulholland (Leeds North West) (LD)
In two constituency cases I have been told, “It is not in the Serious Fraud Office’s remit and the police will not look at the corporate fraud because they do not have the money.” So how do we get these corporate fraud cases properly looked at?
The Solicitor-General
The hon. Gentleman raises an important point about fraud. The National Crime Agency is setting up, as we speak, with an economic crime command that will have a focus on fraud. The aim is to tackle exactly the problems he mentions. In the meantime, Action Fraud is one good place to make a complaint to and, of course, the City police have a particular role to play in this area.
Julie Hilling (Bolton West) (Lab)
8. What recent representations he has received from the legal profession on the effect on the criminal justice system of the Government’s planned legal reforms.
The Attorney-General (Mr Dominic Grieve)
The Solicitor-General and I have attended meetings of and with the Bar Council and the Bar Standards Board at which the Government’s proposed legal aid reforms have been discussed. We have also seen responses to the Ministry of Justice’s consultation about these proposals from the Bar Council, the Law Society and others, and have corresponded with panel counsel about the proposal.
Julie Hilling
In 2004, the right hon. and learned Gentleman told the Law Society Gazette:
“There are ideas creeping into the system that treat legal aid as if it is just about the economic provision of a service. That approach will lead to problems with lowered standards.”
Now that his Government are slashing £220 million from the budget and making so many other changes, is he even more worried?
The Attorney-General
The key issues then were, as I dare say they are now, the maintenance of choice, achieving value for money and, above all, maintaining professional standards of representation in court. I note that the Lord Chancellor has already indicated that he is going to keep a choice of solicitors, and he is also keeping advocacy fees separate. Those things are in response to the current consultation, and I have no doubt that, building on that, there will be further possibilities to have a very important debate so that we can reach a conclusion where we have a viable system of criminal legal aid that can be maintained in the long term.
Nigel Mills (Amber Valley) (Con)
9. What recent assessment he has made of how effectively appeal cases have been handled by the Crown Prosecution Service.
The Solicitor-General (Oliver Heald)
The CPS is providing a first-class service to the senior appellate courts.
Nigel Mills
I am grateful for that answer. Will the Solicitor-General please explain to the House how he can satisfy himself that the CPS is indeed conducting those cases effectively? Does it compile and analyse any data on how it is performing?
The Solicitor-General
Yes, the detailed schedule of cases comes to the Attorney-General each month, and we have discovered that more cases are being dismissed without leave to appeal being granted, which suggests good CPS presentation; up to 57% of cases are now dismissed without leave.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
But what is happening on how the CPS and the Serious Fraud Office deal with highly complex financial scandals, where there is a great reliance on the accountancy profession, which has been shown to be very unreliable in the evidence it gives?
The Solicitor-General
The hon. Gentleman makes the point in his own way, but the advantage of the SFO is that it has in-house experts and can also draw on outside expertise to ensure that these cases are very well prepared. Although we have had some problems, as he knows, in many cases the SFO is able to do an exceptional job.
Tim Loughton (East Worthing and Shoreham) (Con)
10. What special measures he is considering to help vulnerable minors give evidence in child sexual exploitation cases.
The Attorney-General (Mr Dominic Grieve)
The Government have announced that they will pilot the video pre-recording of the cross-examination of witnesses, as outlined in the Ministry of Justice’s “A Strategy and Action Plan to Reform the Criminal Justice System”, published on 28 June. The strategy and action plan includes other important measures, including reviewing how we might reduce the distress caused to some victims by cross-examination, particularly where multiple defence barristers are involved. On 11 June, the CPS published, for consultation, its new interim guidelines on prosecuting cases of child sex abuse, which set out a new approach, including challenging myths and stereotypes, if raised in court, about how the victim behaves.
Tim Loughton
I congratulate my right hon. and learned Friend and the Director of Public Prosecutions on the way in which they have enacted the child sexual exploitation action plan to make it more sympathetic and sensitive to witnesses who are often vulnerable and traumatised. Does he agree that one of the most intimidating processes is where multiple barristers act for gang members, as we have seen recently, re-traumatising very vulnerable victims by getting them to go through all their processes over and over again? Will he tell us specifically how he thinks we can still make sure that justice is done, both to the victim and to the defendant?
The Attorney-General
My hon. Friend raises an important issue, which is very much a matter of two things: professional standards on the part of the advocates; and proper case management by the judge. Judges need to be proactive in these cases. In addition, The Advocate’s Gateway, which has been introduced, makes clear the responsibilities that lie on counsel in approaching cases of this kind. I am confident that we will make a lot of progress in this area, and I think the rules will be progressively tightened to achieve the impact and result he desires.
Mr Speaker
I am sorry to disappoint colleagues but we really must now move on.
Petition
Jeremy Lefroy (Stafford) (Con)
I have the great honour and privilege to present this petition to support services at Stafford hospital which, along with other petitions on similar terms, has been signed by 50,346 of my constituents and those of neighbouring colleagues. The petition expresses the deep concern of a community whose hospitals face the threat of a downgrade following the appointment of the trust special administrators and proposals by the contingency planning team to remove services from the hospitals. The petition has been collected by volunteers across the community.
The petition reads:
To the House of Commons.
The Petition of residents of Stafford and surrounding area,
Declares that the Petitioners believe that the Trust Special Administrators, Jeremy Hunt and any other individuals responsible for the future of Stafford Hospital should support the hospital and save its acute services.
The Petitioners therefore request that the House of Commons urges the Department of Health to ensure that Stafford Hospital retains a 24/7 A&E department, level 3 critical care and emergency service and full maternity services.
And the Petitioners remain, etc.
[P001194]
Treaty on the Functioning of the EU
(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Mrs Theresa May)
With permission, I would like to make a statement on the decision whether the UK should opt out of those EU police and criminal justice measures adopted before the Lisbon treaty came into force.
As hon. Members will be aware, this is a stand-alone decision that the Government are required to make under the terms of the Lisbon treaty by 31 May 2014, with that decision taking effect on 1 December of that year. It covers about 130 measures, some of which it is clearly in our national interest to remain part of, but if we wish to remain bound by only some of the measures, we must exercise our opt-out from them all en masse and seek to rejoin those that we judge to be in our national interest.
The Government have committed to a vote in this House and the other place before formally deciding on the matter. We shall honour that commitment in full. Next week, hon. Members will have the opportunity to debate and vote on this approach. Following our discussions in Europe, another vote will be held on the final list of measures that the UK will formally apply to rejoin.
Let me briefly set out the rationale by which the Government have approached the decision. We believe the UK should opt out of the measures in question for reasons of principle, policy and pragmatism and that we should seek to rejoin only those measures that help us co-operate with our European neighbours to combat cross-border crime and keep our country safe.
On principle, I am firmly of the belief that the UK’s international relations in policing and criminal justice are first and foremost a matter for Her Majesty’s Government. In policy terms, the UK has and will continue to have the ability to choose whether it should opt in to any new proposal in the field of justice and home affairs. It is therefore right that we take the opportunity to consider whether we wish to retain the measures that were joined by the previous Government and to decide on a case-by-case basis whether we are willing to allow the European Court of Justice to exercise jurisdiction over them in future.
Finally, the Government are being pragmatic. I have said before that we will not leave the UK open to the threat of infraction and fines which run into many millions of pounds by remaining bound by measures we simply cannot implement in time. That would be senseless. In a number of areas, the measures relate to minimum standards in substantive criminal law. Even before their adoption, the UK already met or exceeded the vast majority of these standards and will continue to do so whether or not we are bound by them.
As people have become more mobile in recent years, so too has crime. The Government have sought and listened carefully to the views of our law enforcement agencies which combat it. We understand that some of the measures covered by this decision are important tools that they need to protect the British public. The Government have identified 35 measures which we will seek to rejoin in the national interest.
That set of measures, on which we propose to begin our discussions with the European Commission and other member states, is laid out in Command Paper 8671, which is published today. I want to be clear: what must happen next is a process of negotiation with the European Commission and other member states, and those negotiations will determine the final list of measures we formally apply to rejoin. But we promised that we would set out these measures clearly and give hon. Members time to consider them before asking them to vote—and that is what we have done.
One of the measures we will seek to rejoin, and on which I know many hon. Members have strong views, is the European arrest warrant. I agree with our law enforcement agencies that the arrest warrant is a valuable tool in returning offenders to the UK. Its predecessor, the 1957 European convention on extradition, had serious drawbacks. The arrest warrant has helped us to secure and accelerate successful extradition procedures, as shown by the case of Osman Hussain, one of the failed London bombers of July 2005, who was extradited back to the UK from Italy in less than eight weeks. More recently, Jeremy Forrest, the teacher who was sentenced last month for absconding to France with one of his pupils, was extradited back to the UK less than three weeks after his arrest.
Since 2009 alone, the arrest warrant has been used to extradite from the UK 57 suspects for child sex offences, 86 for rape and 105 for murder. In the same period, 63 suspects for child sex offences, 27 for rape and 44 for murder were extradited back to Britain to face charges. A number of these suspects would probably have not been extradited back to Britain without the arrest warrant. We owe it to their victims, and to their loved ones, to bring these people to justice. However, the European arrest warrant has its problems, too, as hon. Members have eloquently explained in this House. The last Government had eight years to address these concerns, and did nothing; this Government have taken action. I am today proposing additional safeguards to rectify these problems and increase the protections offered to those wanted for extradition, particularly British citizens.
A number of hon. Members have explained how European arrest warrants have been issued disproportionately for very minor offences. I will address this by amending the Anti-social Behaviour, Crime and Policing Bill, which is in Committee, to ensure that an arrest warrant can be refused for minor crimes. This should stop cases such as that of Patrick Connor, who was extradited because he and two friends were found in possession of four counterfeit banknotes.
We will also work with other states to enforce their fines and ensure that in future, where possible, the European investigation order is used instead of the European arrest warrant. This would allow police forces and prosecutors to share evidence and information without requiring the extradition of a suspect at the investigative stage.
Other hon. Members have expressed concerns about lengthy and avoidable pre-trial detention. I will amend our Extradition Act 2003 to ensure that people in the UK can be extradited under the European arrest warrant only when the requesting state has already made a decision to charge and a decision to try, unless that person’s presence is required in that jurisdiction for those decisions to be made. Many Members, particularly my hon. Friend the Member for Enfield North (Nick de Bois), will recall the case of Andrew Symeou, who spent 10 months in pre-trial detention, and a further nine months on bail, in Greece, only to be acquitted. The change that I am introducing would have allowed Andrew Symeou to raise, in his extradition hearing, the issue of whether a decision to charge him and a decision to try him had been taken. It would likely have prevented his extradition at the stage he was surrendered—and, quite possibly, altogether. We will also implement the European supervision order to make it easier for people such as Mr Symeou to be bailed back to the UK.
Other hon. Members are concerned about people being extradited for conduct that is not criminal in British law. I will amend our law to make it clear that in cases where part of the conduct took place in the UK, and is not criminal here, the judge must refuse extradition for that conduct. I also intend to make better use of existing safeguards to provide further protections. I will ensure that people who consent to extradition do not lose their right not to be prosecuted for other offences, reducing costs and delays. We propose that the prisoner transfer framework decision be used to its fullest extent, so that UK citizens extradited and convicted can be returned to serve their sentence here.
Where a UK national has been convicted and sentenced abroad, for example in their absence, and is now the subject of a European arrest warrant, we will ask, with their permission, for the warrant to be withdrawn, and will use the prisoner transfer arrangements instead. This change could have prevented the extraditions of Michael Binnington and Luke Atkinson, who were sent to Cyprus only to be returned to the UK six months later.
To prevent other extraditions occurring at all, I intend either to allow the temporary transfer of a consenting person, so that they can be interviewed by the issuing state’s authorities, or to allow those authorities to do that through such means as video conferencing while the person is in the UK. Where people are innocent, this should lead to the extradition request being withdrawn. These are all changes that can be made in UK law, and that could have been made by the Opposition during their time in government. Co-operation on cross-border crime is vital, but we must also safeguard the rights of British citizens, and the changes that we propose will do that.
Before I conclude, I am conscious that hon. Members want to know our approach to the new Europol regulation. I fully recognise the excellent work of Europol and its British director, Rob Wainwright. Hon. Members may recall Operation Golf, a joint operation led by Europol and the Metropolitan police, which cracked down on a human trafficking gang operating in llford, and which led to the release of 28 trafficked children and the arrest of 126 suspects. It is for such reasons that we propose rejoining the existing Europol measure.
On the new proposal, the Government have today tabled a motion that will be the basis of a Lidington-style debate on the Floor of the House next week, following the debate and vote on the plan that I have outlined today. That motion states that we should opt in, post adoption, provided that Europol is not given the power to direct national law enforcement agencies to initiate investigations or share data that conflict with our national security.
For reasons of policy, principle and pragmatism, I believe that it is in the national interest to exercise the United Kingdom’s opt-out, and rejoin a much smaller set of measures that help us to co-operate with our European neighbours in the fight against serious and organised crime. I also believe that Her Majesty’s Government must strike the right balance between supporting law enforcement and protecting our traditional liberties. What I have outlined today will achieve both those goals, and I commend this statement to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
So, after three years of briefing and trying to brandish her anti-European credentials, the Home Secretary has been forced to admit the truth: Britain does need the European arrest warrant, it does need joint investigation teams, Europol, the exchange of criminal records and help to tackle online child abuse. Why, then, did she and Members of her party all vote against all those measures just four weeks ago? Why has it taken the Home Secretary three years to realise that we do not want to go back to the days of the costa del crime, when British criminals could flee to Spain or European criminals could find safe haven here?
Last year the Government briefed The Sun that they would opt out of the European arrest warrant, opt out of the European evidence warrant and opt out of action against counterfeiting. Now the right hon. Lady admits that she needs them and she is going to do the opposite. The Prime Minister described the European arrest warrant as “highly objectionable” and the Fresh Start group wanted to stay out of everything, but the Home Secretary has had to admit what we and the police have argued from the start—we need the European arrest warrant in the fight against crime. We agree with reforming the European arrest warrant to make it proportionate, but as she has just shown, she does not need to opt out of working with Europe in order to do that.
The Home Secretary said very little in her statement about what she wants to opt out of or why, so let us look at the detail. Some of those measures have been replaced already, some do not operate any more, some we have never used anyway and do not have to, and others are just agreements to co-operate and we will carry on co-operating anyway. She is opting out of a directory of specialist counter-terror officers, which no longer exists anyway; a temporary system of dealing with counterfeit documents, which has been replaced anyway; a load of rules applying specifically to Portugal, Spain and Croatia, which do not apply in the UK; and a directory of contacts of extradition experts in each country. This is hardly a triumph of repatriation.
The Home Secretary has tried to play Britannia, clothing herself in the Union Jack, parading powers that she is repatriating from Brussels, but where is the substance? The truth is that she is not wearing a flag; it is simply a fig leaf. As for next week’s vote, she told the House that this was
“an important decision, and not one that we should rush into lightly”—[Official Report, 12 June 2013; Vol. 564, c. 421.]
Yet she wants Parliament to vote on her proposals in six days’ time. She promised the European Scrutiny Committee and the Home Affairs Committee that they would be able to scrutinise the list and she has given them three working days to do so. She has been thinking about it for three years.
We will look at the right hon. Lady’s list and her motion for next week, but this is the wrong strategy—the wrong way to make serious policy on crime and justice. Where are the guarantees that we will be able to opt back into the serious measures we need, even the 35 measures that she supports? Where is the guarantee that we will be able to opt back into the European arrest warrant, the data sharing and the criminal records that she has now admitted we need? Presumably she has those guarantees. She told the House that she was starting negotiations with the Commission last October, so given how much is at stake in the fight against crime, I presume she has done a deal with the European Commissioner that we will definitely be able to opt back into those measures. Where is it?
Ministers have said that this will be a difficult negotiation, and we must not put those important powers at risk for the sake of opting out of a few contact lists. We must not make it easier for European criminals to hide here if we lose the European arrest warrant. We have just spent eight years trying to get rid of Abu Qatada. We do not want to make it easier for European criminals to stay here, so let the Home Secretary answer just two questions: will we be able to opt back into the European arrest warrant? Has she got a guarantee that we will be able to do so, and if we do not get that guarantee, will she ditch her whole opt-out plan? Without those guarantees this is a dangerous strategy that puts the fight against crime at risk.
The Home Secretary is putting politics before the fight against crime, but this is not a game. Crime does not stop at the channel. This is about whether we can stop dangerous criminals fleeing abroad and whether we can send foreign criminals back to face justice at home. This is about whether we can work with Europe on trafficking and child abuse, so where is the guarantee that this Home Secretary is not putting that serious fight against crime at risk?
Mrs May
Oh dear, oh dear. The right hon. Lady had an opportunity to come to the House and enter into a serious exchange about our ability to operate on a cross-border basis, catch criminals, and keep British citizens safe. She also had the opportunity to indicate whether the Opposition believe it right that we give greater safeguards and protections to British citizens in the operation of the European arrest warrant. Instead, we got a rant that did nothing other than expose the considerable confusion that lies at the heart of the Labour party on this issue.
The right hon. Lady asks whether we have guarantees for the negotiation, and complains about the negotiation process. Who negotiated this opt-out in the Lisbon treaty? It was not either of the coalition parties; the Labour party negotiated the opt-out, so any failings in how it operates are entirely down to the previous Labour Government—[Interruption.]
Mr Speaker
Order. Mr John Robertson, I do not know whether you consumed a high-energy breakfast or something, but you seem to be in hyperbolic mode. What we want is your statesmanlike pose. Calm yourself, man, and get a grip.
Mrs May
The right hon. Lady referred to a motion tabled by the Opposition in an Opposition day debate, and identified seven measures that she said it was necessary to rejoin. What about measures such as the European supervision order or those to do with removing criminals’ assets? Are those powers not important as well? They are on our list, but they were not on that of the right hon. Lady.
Finally, I failed to hear in the right hon. Lady’s comments whether those on the Labour party Front Bench support the decision to opt out—a decision available only because her Government negotiated it in the first place. We believe it is absolutely right to exercise that opt-out, and to negotiate and rejoin those measures that are important for cross-border operations and co-operation between our police forces. Labour Members may come to the House and the right hon. Lady may stand up, foam at the mouth and rant at the Government about these measures, but it is high time she put her position on the line and made clear what her party will do in the debate next week.
Mr William Cash (Stone) (Con)
My right hon. Friend’s statement simply aggravates concerns that the European Scrutiny Committee has expressed since her October statement. Why has the Committee been consistently denied the information and consultation that it, the Justice Committee and the Home Affairs Committee were promised? We have been given neither proper time nor opportunity to consider these matters. We shall be meeting tomorrow and considering those questions in line with Standing Orders, and we shall then decide what action to take.
Mrs May
We brought the proposals forward now because it is right that we have time to negotiate with the European Commission. As I indicated in my statement, there will be further opportunity for the House to consider the list of measures that we negotiate with the European Commission. I say to my hon. Friend and to other right hon. and hon. Members who chair the Committees to which he referred that the total list of measures has been available for those Committees to consider for some considerable time. The Government are indicating today which measures we wish to seek to rejoin. There will be a debate next week in the House and an opportunity to vote on that. As I have indicated, there will be further consideration and a vote at a later stage.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
To coin an immediate phrase, “Oh dear, oh dear”—a statement today. In view of the Home Secretary’s remarks about the criminal justice system being primarily for this House—I cannot disagree with that in the light of the judgment at Strasbourg today on a measure that I took to make life mean life—is it not appropriate, as has just been requested, to give Members more time to consider what she has said before holding the debate scheduled for next week? Or is this just a straight political ploy, rather than a statesmanlike approach to an important issue?
Mrs May
This House will have time to consider the opt-out and the measures we seek to rejoin. Not only will there be a debate next week, but there will be further opportunity to comment on and discuss in the House those measures we are negotiating to rejoin with the European Commission.
Dr Julian Huppert (Cambridge) (LD)
I congratulate the Home Secretary on her statement; it is good to hear her being so positive about the benefits of key measures such as Europol, Eurojust and the European arrest warrant, and she is right to opt back into those. I was also pleased to hear about the implementation of the European supervision order. Will she let the House know the timetable for that and say whether it can be introduced in the Anti-social Behaviour, Crime and Policing Bill?
Mrs May
The European supervision order is one measure we will seek to rejoin, but there must be a negotiation process with the European Commission and other member states before it is possible to ensure that we are able to rejoin the measures we wish to rejoin. I am afraid the Anti-social Behaviour, Crime and Policing Bill will not be a vehicle for the European supervision order.
Keith Vaz (Leicester East) (Lab)
Yesterday I joined others in elevating the Home Secretary to sainthood over the Abu Qatada decision, but I am afraid her halo has slipped a little. There is nothing wrong with a pick-and-mix Europe as far as the justice and home affairs agenda is concerned, but I agree wholeheartedly with the Chairman of the European Scrutiny Committee, the hon. Member for Stone (Mr Cash): I think it shows disrespect for the Committees of this House, and for Parliament when we do not have the opportunity to consider which measures the Government wish to opt in or out of.
It is not sufficient to say there will be a debate next Monday. We have been waiting for five months for this decision. Five Chairs of Select Committees wrote to the Home Secretary and the Minister for Europe and we received nothing until today. I urge her to delay the decision to hold a vote on Monday, and to allow the Committees to examine the issue carefully. She is due to appear before the Home Affairs Committee on Tuesday, so let us scrutinise this issue properly. I am sure she will get the result she wants because I am sure she will be able to make the arguments. Rushing this decision when she has more than eight or nine months in which to make it and inform the Commission is too hasty.
Mrs May
I recall the remarks made by the right hon. Gentleman yesterday when I made the statement about Abu Qatada’s deportation. I also recall that I said it was most unusual for the Home Office to receive such praise, and that I assumed normal service would be resumed quickly, as indeed it has been. Let me say to the right hon. Gentleman what I said to my hon. Friend the Member for Stone (Mr Cash), who chairs the European Scrutiny Committee. There will be an opportunity to debate this issue next week, and a further opportunity for the House to consider the measures we seek to rejoin. All Select Committees of this House have known the list of measures that the Government have been considering, and they have had the opportunity to look at them and give an opinion.
Mr Peter Bone (Wellingborough) (Con)
I thank the Home Secretary for coming to the House and making this statement, and for taking on board the views of the all-party group on human trafficking about the requirement to have joint investigation teams, and for highlighting Operation Golf in her statement. I am struggling with the rush to which the right hon. Member for Leicester East (Keith Vaz) just referred. Will we have a first bite of the cherry next week with a debate, and then consider individual measures later after the Select Committees have reported? If not, I am not entirely sure—it appears that the Executive are bouncing Parliament.
Mrs May
I apologise; I referred to this in my answer to my hon. Friend the Member for Stone. The reason for coming forward now is that we are able to start formal negotiation with the European Commission and other member states on those measures we seek to rejoin. Had we not been doing that, we would have significantly reduced our ability in time terms to hold those negotiations with the European Commission.
Nia Griffith (Llanelli) (Lab)
My constituents are particularly concerned about the 90% of prisoners repatriated from the UK under the European arrest warrant who are foreign nationals. Will the Secretary of State make a categorical assurance that under the arrangements she proposes there will be no delay in repatriating those foreign nationals from our prisons? We understand there have been considerable delays recently, and that numbers of those going have not been as good as they should have been.
Mrs May
The hon. Lady refers in general to the question of foreign national prisoners and their removal from the UK. Of course, that covers those who are EU citizens and those who are from outside the EU. With regard to EU citizens, the prisoner transfer framework decision gives us the opportunity to work with other member states on a bilateral basis to ensure that we can repatriate UK citizens to serve their sentences here and remove their nationals from the UK to serve their sentences abroad. That is what we intend to do.
Mr Christopher Chope (Christchurch) (Con)
The Home Secretary asserts that rejoining the 35 measures will be in our national interest. Where is the evidence for that? Is there a cost-benefit analysis? How does that fit in with the balance of competences review? Will we be asked next week to endorse that approach, rather than just receiving the information?
Mrs May
I have published today in the Command Paper the explanatory memorandum, which sets out the measures we are looking to rejoin—it refers to the others as well—and explains what each is about. The debate will be about the Government’s position of opting out and then seeking to rejoin the 35 measures. That will enable us to enter into proper negotiations with the European Commission and other member states. I believe that it is right that we seek to rejoin measures that enable us to co-operate on a cross-border basis in dealing with cross-border crime and keeping people safe.
Dr William McCrea (South Antrim) (DUP)
Is there strong support across the coalition Government for the Home Secretary’s proposal to opt out? If the decision to opt out is finally taken, will that apply to the whole United Kingdom, including Northern Ireland?
Mark Reckless (Rochester and Strood) (Con)
The Home Secretary hopes to change how the European arrest warrant operates by amending our domestic law, but will she confirm that under her policy it is ultimately the European Court of Justice that will decide?
Mrs May
My hon. Friend is right in that rejoining measures means that they will come under the jurisdiction of the European Court of Justice, which is why we have given such careful thought and consideration to the list of measures we are seeking to rejoin, but it is possible for this Parliament to make decisions in UK law that change the way the European arrest warrant operates and give us some of the safeguards that many Members of this House feel other EU member states have had, for example in relation to proportionality. As I said in my statement, I am only sorry that the previous Labour Government did not do that when they had the opportunity.
Mike Gapes (Ilford South) (Lab/Co-op)
The Home Secretary referred to Operation Golf and the human trafficking operation, which was carried out by some individuals in Ilford. Will she take this opportunity to make it absolutely clear that it is essential that we remain within Europol and that any move to take this country away from the European Union would damage that co-operation?
Mrs May
As I am sure the hon. Gentleman is aware, the European Commission has brought forward a proposal for a new regulation relating to Europol. We propose to opt back into the current Europol regulation. The new regulation would allow the possibility that Europol could in future direct police forces across Europe, and notably our police forces, in order to undertake investigations, so they could be mandated by Europol at the centre. We believe in operational independence for our police forces here in the UK and are not prepared to see Europol being able to mandate them.
John Howell (Henley) (Con)
The decision to which the Home Secretary referred today in her welcome statement was made under the terms of the Lisbon treaty. How do those relate to the wholesale renegotiation of our relationship with the EU that a Conservative Government are pursuing?
Mrs May
I am grateful to my hon. Friend, because he enables me to answer the earlier question from my hon. Friend the Member for Christchurch (Mr Chope) on the balance of competences work. We absolutely have the opportunity to take this decision on the pre-Lisbon justice and home affairs measures, but of course that is separate from the wider negotiation that the Conservative party is guaranteeing to undertake leading up to the in/out referendum, on which many Government Members voted after last Friday’s debate on the private Member’s Bill. A further negotiation will look at the wider issues, based on the balance of competences work currently being undertaken.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
I very much welcome the Government’s decision to opt out en masse and then decide item by item on whether to opt back in, which I see as a rejection of ever closer union, but how will we deal with the matters post negotiation? If there are 35 items that the Government propose to opt back into, will we vote item by item, because the Government might well succeed in their objectives in some of them but not in others? Rather than simply having a vote on a lump, would it not be much better to give us individual choices, and would that not also strengthen the Home Secretary’s position?
Mrs May
The decision on the form that any further vote will take in relation to these matters post negotiation is yet to be taken by the relevant House authorities and business managers. I welcome the hon. Gentleman’s opening remarks. Perhaps he might like to try to persuade his Front Benchers to be as clear in their position on the opt-out.
Jacob Rees-Mogg (North East Somerset) (Con)
I wonder whether my right hon. Friend has forgotten the coalition agreement, which states:
“We will ensure that there is no further transfer of sovereignty or powers over the course of the next Parliament.”
Anything that we opt back into comes under the European Court of Justice, the European Parliament and might be subject to qualified majority voting. All those three items are a surrender of sovereignty, and therefore her statement is disappointing to many people.
Pete Wishart (Perth and North Perthshire) (SNP)
The Secretary of State will know that there is great unhappiness in Scotland among the Scottish Government and Police Scotland about the opt-out. The Scottish Government have expressed their disappointment about the lack of consultation and raised concerns about the uncertainty and instability it will cause. Why should Scotland’s safety be compromised because of this Government’s Euro-obsession? Can the Scottish Government opt out of this Government’s moves to opt out of this European measure should they wish to do so?
Mrs May
As with Northern Ireland, my hon. Friend the Under-Secretary has been in touch with the Minister responsible for Justice in Scotland and is discussing with him the implications for Scotland. It would appear that the Scottish National party’s only answer to everything is to opt out, to be separate and different and not to be part of anything. In fact, as we know, the measures that we have decided to seek to rejoin are of benefit to the whole United Kingdom.
Nick Herbert (Arundel and South Downs) (Con)
I support my right hon. Friend’s stance in relation to the European arrest warrant, which is an important tool in fighting serious crime, although clearly, as the Government recognise, it needs amendment. If the test relates to the national interest and the stance on supranational institutions, does she share my concern about today’s decision by the European Court of Human Rights in relation to whole-life tariffs, which will take away from this House of Commons and our own courts the decision on the crucial matter of whether life should mean life?
Mrs May
My right hon. Friend is absolutely right. Not only Members of this House but the public will be dismayed at the decision that has come from the Grand Chamber of the European Court of Human Rights on whether it is possible for life genuinely to mean life. It is also a surprising decision, given that last year the Court decided in a number of extradition cases that it was possible to extradite on the basis of potential life sentences without parole—so today’s judgment is contrary to the decision it took last year.
Naomi Long (Belfast East) (Alliance)
Fighting organised crime and terrorism in Northern Ireland is important. Extradition from the Republic of Ireland is now entirely reliant on the European arrest warrant. I understand that Irish domestic legislation to allow extradition to the UK has been repealed. Can the Secretary of State confirm that the Justice Minister in Northern Ireland and, indeed, his counterpart in the Republic of Ireland are extremely concerned about the impact that this opt-out will have on the fight against crime and terrorism in Ireland in general?
Mrs May
As I have said, we have already started discussions on this issue with the Justice Minister in Northern Ireland, and I have had previous discussions with the Minister for Justice and Equality in the Republic of Ireland about the exercise of the opt-out. On the hon. Lady’s specific point about extraditions being subject to the European arrest warrant, we are proposing to opt back into that, albeit with safeguards for British citizens so that we can ensure that the problems that have arisen in the exercise of the EAW do not arise in future.
Martin Horwood (Cheltenham) (LD)
Surely everyone who is concerned about cross-border crime should welcome the Home Secretary’s announcement, including members of the Lords EU Committee, who, like the rest of us, have had plenty of time to consider these issues. Will she endorse the statement made by Rob Wainwright, the director of Europol, when he said to that Committee that
“It would increase the risk of serious crimes…going undetected…in the UK”
if the UK were not a member of Europol?
Mrs May
I have made our position clear on Europol. We value the work that it does. Rob Wainwright is a very good director of Europol. We will opt into Europol as it currently exists. However, we also value the operational independence of our police. I do not think it right that the new regulation could lead to a situation where Europol would be mandating British police officers to investigate certain matters and to share certain data that could compromise our national security. We will make it clear that we will opt in post-adoption of the Europol measure provided that those concerns have been dealt with.
Steve McCabe (Birmingham, Selly Oak) (Lab)
What happens, in practical terms, to requests for extradition, particularly for serious offences, during the period of the opt-out and the attempted opting back into the European arrest warrant?
Mrs May
Any change in the situation does not kick in until 1 December 2014, so in the interim there would be no change in the operation of the European arrest warrant. It will be necessary for us, as part of our discussions with the European Commission, to discuss the transitional arrangements. Of course we will want to ensure that, where we are opting back into a measure, the transition is as seamless as possible.
Richard Drax (South Dorset) (Con)
Would the safeguards that the Home Secretary has proposed concerning the European arrest warrant have protected my constituent, Michael Turner, who spent four months in a Hungarian jail without charge after his business closed owing £18,000—a case that in this country would have been handled in the small claims court?
Mrs May
I believe that the measures that I intend to put through in the amendments to the Anti-social Behaviour, Crime and Policing Bill would indeed have dealt with that situation, because we would have made it clear that where the requesting state had not taken the decision to charge and to try an individual, that individual would not be extradited unless their physical presence was necessary in order to charge and try them. In many of the cases that we have seen, individuals would not have needed to be extradited to the requesting country.
Alex Cunningham (Stockton North) (Lab)
May I give the Home Secretary another opportunity to answer the question from my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe)? If the European Commission says that we cannot opt back into the European arrest warrant in the way that she would like, will she ditch her blanket opt-out?
Mrs May
The hon. Gentleman and the hon. Member for Birmingham, Selly Oak (Steve McCabe) seem to be suggesting that we are putting conditions on to our opting back into the European arrest warrant. We will request that we can negotiate to opt into a number of measures, including the European arrest warrant. We can make the changes that we are making to the European arrest warrant in UK law, and that could have been done by the previous Labour Government had they chosen to do so.
Mr Dominic Raab (Esher and Walton) (Con)
This is a major strategic decision for Britain, and a lot of hard work has gone into it, which is very welcome. However, expecting Parliament to vote on it next week is unrealistic for hon. Members and Committees, given the need to look not only at individual measures such as the very important EAW safeguards that she proposes but at the package as a whole. May I urge her to allow consultation over the summer and to have Parliament debate and vote on it when we return in the autumn?
Mrs May
I recognise my hon. Friend’s interest in this issue and his expertise on these matters. It is right for us to be able to take a decision such that we can start the more formal negotiations with the European Commission and with other member states. I believe that it is in our interests to be able to rejoin a number of measures, and starting the negotiations now will enhance our ability to do so.
Mark Durkan (Foyle) (SDLP)
Some of us are trying to work out whether there might be an element more of figment than fig leaf about what we have just heard. Can the Secretary of State help us to understand the difference between the opt-out measures and the opt-in measures by explaining whether, when Northern Ireland citizens find themselves detained by Spanish police at an airport, only to be confronted by MI5 officers making nefarious propositions with menaces, those actions are covered under opt-in measures or under proposed opt-out measures?
Michael Ellis (Northampton North) (Con)
I congratulate the Home Secretary on the statement and on her decisions on this matter. Can she confirm two things? First, is not this the first time that 100 measures are being clawed back to the United Kingdom, rather than giving powers over to Europe, thanks to her decision and this Government’s decision? Secondly, is it not right that the European arrest warrant, which I have criticised in the past, is now able to be supported because her decision to make these fundamental changes will make it a totally different thing from what it is now, and people will not be able to be extradited for stealing a wheelbarrow? [Interruption.]
Mrs May
I thank my hon. Friend, who is absolutely right about the European arrest warrant. That is the whole point about bringing forward the amendments to the Anti-social Behaviour, Crime and Policing Bill. I hope that the Opposition will support those amendments. They have indicated that they would be willing to see reform to the European arrest warrant, but we wait to see what their position will actually be.
On my hon. Friend’s first point, yes, taking the decision on the opt-out from nearly 100 measures is important. It is part of the approach that this Government have taken. The Prime Minister exercised the veto for the first time. We have committed to work on the balance of competences, and of course as the Conservative party we are committed to a much wider renegotiation. [Interruption.]
Mr Speaker
Order. I fear that the hon. Member for Rhondda (Chris Bryant) suffers from CCD—compulsive chuntering disorder.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
The Home Secretary gave some good examples of how the European arrest warrant has worked very effectively in bringing people to justice in the UK, and that is what the public will be concerned about. However, I understand that the European Commission has said that there is a risk that her proposals will be
“complex, time-consuming, leave a lot of legal uncertainty and a lot of problems.”
What does she say in response to those criticisms? May I press her again on the balance of what is best for the UK? If her negotiations prove unsuccessful, will she drop her plans for the blanket opt-out?
Mrs May
The Government have made a very clear decision that we will opt out from these measures and seek to rejoin a number of them, the list of which is with the Command Paper that I have published today. Yes, we will have to go into negotiations with not only the European Commission but with other member states. I believe that other member states are keen to see the United Kingdom as a part of certain of the measures that we are proposing to rejoin, but we will be entering those negotiations over the coming months.
Henry Smith (Crawley) (Con)
May I seek assurances from my right hon. Friend that the United Kingdom will not opt into any Eurojust measures that would lead to a European public prosecutor having competence in this country?
Wayne David (Caerphilly) (Lab)
I am pleased that the Home Secretary has, at long last, recognised the importance of a European arrest warrant and, indeed, other measures. I am glad, too, that she has had the strength to stand up to her Eurosceptic Back Benchers. However, I take the point that we need to have a reasonable discussion in this House with a proper amount of time—a commitment given by the Minister for Europe some time ago.
Mr David Nuttall (Bury North) (Con)
I take the view that this House should be sovereign in all these matters, but on those measures that it is proposed we opt back into and be subject to EU control, does the Home Secretary agree with the evidence given last year to the Sub-Committee of the European Union Committee in the other place that the practical effect of the European Court of Justice gaining full jurisdiction in this area is that the European Court of Justice may interpret these measures expansively and beyond the scope originally intended?
Mrs May
The fact that measures will be subject to the European Court of Justice is one of the main issues that has led to our very careful consideration of which we propose to seek to rejoin. It is important that the Government’s position is to look practically at those matters that we believe to be in the national interest with regard to ensuring that we can continue to fight cross-border crime and keep people safe. It is on that basis that we propose to seek to rejoin some measures.
Lady Hermon (North Down) (Ind)
I am sure that the Home Secretary will be aware of the excellent working relationship between the Police Service of Northern Ireland and the Garda Siochana across the border in the Republic of Ireland, particularly in tackling serious criminal activity such as terrorism and fuel laundering. Is she able to give guarantees that that excellent working relationship will not be damaged in any way by the measures that she has announced?
Mrs May
The hon. Lady is absolutely right to refer to the excellent working relationship between the Garda and the PSNI, which has resulted in many benefits over recent months and years. There is absolutely no reason why the Government’s decision on the 2014 opt-out should do anything to damage that relationship. Indeed, I am sure that the decision that we wish to rejoin the European arrest warrant will be welcomed.
Chris Heaton-Harris (Daventry) (Con)
I welcome the Home Secretary’s statement. I have been lobbying very hard for the block opt-out to be enacted, but does she understand the concerns of some of us on the Back Benches about the activist nature of the European Court of Justice? We have only to consider the Metock case in Ireland, which led to that member state having to change its immigration rules domestically, to understand why there is such concern. I look forward to taking part in the debate.
Mrs May
I thank my hon. Friend, who is absolutely right, and I recognise the concerns that he and other Members have raised about the European Court of Justice. Of course, it is not just another member state that has to abide by the implications of the Metock judgment; we all have to abide by them. There has been an increase in sham marriages following that judgment—it related to the rights of those married to EU nationals—and we now have to deal with that issue. One of the reasons we have considered these measures very carefully is the question of the operation of the European Court of Justice. As I have said, however, the measures that we wish to rejoin are those that will be of benefit and I believe that they are in our national interest.
Jim Shannon (Strangford) (DUP)
I, too, thank the Home Secretary for her statement. The Abu Qatada situation is very much in the news and is a good reason why we cannot subscribe to European regulations. Does the Secretary of State share my concern and that of many other Members that opting into some of the EU crime measures may give scope for some people to play the system and for more European interference in national security, which cannot be tolerated?
Mrs May
We are absolutely clear that it is not in the competence of the European Commission or the European Union to interfere in matters of national security. Those are sovereign matters that remain with the member states. I think it is right, however, that on those measures where cross-border co-operation will help us in the fight against crime—as has been the case with some of them—we should seek to continue to be part of them.
Bob Stewart (Beckenham) (Con)
Would greater involvement in the European Court of Justice result in longer delays in the repatriation of European criminals under sentence in this country to their country of origin?
Mrs May
No, the jurisdiction of the European Court of Justice should not lead to that. The European arrest warrant in itself, of course, enables people to be extradited rather more quickly than under the previous arrangements. What is crucial with regard to the measures that I have outlined today, and those that I will outline in the amendments that will be tabled to the Anti-social Behaviour, Crime and Policing Bill, is that we should give British citizens the protections and safeguards that will enable the European arrest warrant to be operated in such a way that it overcomes the problems that Members have identified in the past.
Mr David Burrowes (Enfield, Southgate) (Con)
Will Ministers meet Andrew Symeou and his family—constituents of my hon. Friend the Member for Enfield North (Nick de Bois), who is away with the Justice Committee—and ensure that the EAW safeguards pass the Symeou test to ensure that UK citizens are not thrown into European jails for months on end on the basis of such flimsy evidence?
Mrs May
Yes, I would be happy to do that. Home Office officials have looked very carefully at the Andrew Symeou case to ensure that our proposals in the Anti-social Behaviour, Crime and Policing Bill meet the concerns resulting from it. I have discussed the measures with my hon. Friend the Member for Enfield North and, as I have told him and I am now happy to tell my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), we would be happy to meet the family to go through them.
Mr Philip Hollobone (Kettering) (Con)
The Home Secretary will know that there are almost 11,000 foreign national offenders in our prisons, many of whom come from EU countries. One of the very few really good things to come from the European Union was the EU-wide compulsory prisoner transfer agreement enabling us to send these people back to their country of origin. Sadly, only 14 of the 28 member states have signed up to it. Will the Home Secretary do all she can to encourage other countries to sign up, especially Romania and Bulgaria before the transitional controls are ended at the end of this year?
Mrs May
I can give my hon. Friend the assurance that I and my right hon. Friend the Justice Secretary are both very keen to be able to use the prisoner transfer agreement to the maximum possible extent. Indeed, as I have indicated with regard to some aspects of the European arrest warrant, I think it is right that we use the prisoner transfer agreement, for example, to bring UK citizens who have been sentenced elsewhere in the EU back to serve their sentence here. We will work to ensure that we can increase the number of agreements with other member states for the transfer of prisoners.
Business of the House
(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Leader of the House of Commons (Mr Andrew Lansley)
With permission, I would like to make a short business statement following the statement made by my right hon. Friend the Home Secretary.
The Home Secretary announced that the Government have committed to a vote in this House and the other place before formally deciding on the United Kingdom’s opt-out decision pursuant to article 10 of protocol 36 to the treaty of the functioning of the European Union.
It will assist the House to know that we intend to schedule that debate and vote to take place on Monday 15 July. As a consequence, the Second Reading of the Defence Reform Bill, provisionally announced at the most recent business questions to take place on that day, will now take place on Tuesday 16 July.
As announced in the earlier statement, the House will also have the opportunity to debate the new Europol proposal, as set out by the Home Secretary in her statement, on Monday 15 July, following the opt-out debate that I have just confirmed.
I will be pleased to answer any questions on the management of business when I make my usual weekly business statement on Thursday.
Angela Smith (Penistone and Stocksbridge) (Lab)
I thank the Leader of the House for giving me early sight of his statement.
It would be incredibly helpful if the Leader of the House told us when the motion for the debate will be published. The Government must have known for some time that they were going to schedule this business for next Monday, yet there is no clear indication of what the motion will look like. Will the Leader of the House commit to ensuring that the motion will be published before the close of today’s business, and will he confirm that it will be amendable?
Is the Leader of the House prepared to guarantee the time that will be available for debate on Monday? Yesterday we heard two major statements which, taken together, seriously curtailed the time available for debate on the main business of the House. Will he therefore guarantee the time that will be available for the debate on this important topic on Monday?
May I go one step further and ask why the debate on this topic has been scheduled so quickly, especially given that the Home Affairs Committee was promised that it would have the chance to scrutinise the proposals before a decision was taken? We will not have the benefit of the views of the Home Affairs Committee on the proposals before we debate and vote on them on Monday.
Will the Leader of the House confirm that he will guarantee the time available for the debate, and explain why there is such urgency and why the Home Affairs Committee has been denied the opportunity to scrutinise the proposals before the House debates them?
Mr Lansley
As I have just announced the business for Monday, the motion will be tabled in good time so that the House may consider it.
On the timing of the debate, the business on Monday will relate to the justice and home affairs opt-out and opt-in measures and the subsequent Europol measure. There is no other business, so there will be a full day’s debate on those related issues.
On the Select Committee issue, the hon. Lady will have heard what my right hon. Friend the Home Secretary said and I completely endorse that. The Home Secretary was very clear about the Government’s intentions in October. In today’s Command Paper, we have been very clear about the principle behind what the Government are setting out to do. The House will have an opportunity to debate that and to vote on a substantive motion on Monday, which gives rise to the opportunity for amendment. We have been very clear that that is required so that my right hon. Friends the Home Secretary and the Justice Secretary may lead negotiations with the Commission and other member states. That process will lead to another vote in 2010. I am absolutely clear that we are giving the House the opportunities to debate and vote on these matters as we have promised.
Mr Peter Bone (Wellingborough) (Con)
I am grateful to the Leader of the House for making an emergency business statement, but he has not explained why there is such urgency. I heard what the Home Secretary said, but I was not convinced that the matter needs to be rushed through now. I ask the Leader of the House to consider two options. Preferably, he will put the debate off until September. At the very least, he should put it in the last week before the recess.
Mr Lansley
I inadvertently spoke of a further vote in 2010. I meant 2014.
My hon. Friend the Member for Wellingborough (Mr Bone) should always trust in what the Home Secretary says, as I do. She is right about this matter. I know from our discussions that it is important that she has the backing of the House as her negotiations with the Commission and other member states accelerate and acquire substance. That must be available to her at the earliest possible time.
Chris Bryant (Rhondda) (Lab)
The very fact that this is an emergency business statement suggests that this is an inappropriate way of doing business on a matter that is of substantial national security interest. If the Leader of the House were honest, he would listen to the voices across the House that are suggesting that emergency business is not a wise policy to adopt for next Monday. He has not replied to the specific question of whether the motion on Monday will be amendable.
Mr Speaker
Order. I hope, for the avoidance of doubt, that the hon. Gentleman is not suggesting that the Leader of the House is other than honest.
Mr Lansley
I am grateful for that, Mr Speaker, because I might have imagined otherwise from what the hon. Gentleman said. I am always honest with the House. This is an emergency business statement because it is not a business statement in the normal course of events. The structure of the business will give the House the opportunity to debate and vote on these issues in the way that we had anticipated.
Mr Christopher Chope (Christchurch) (Con)
May I press my right hon. Friend on when the motion will be tabled, because if it is tabled tomorrow it will enable Members on both sides of the House who are concerned about this issue to see whether we can reach an agreement about an amendment?
Mr Lansley
When my hon. Friend looks at the Command Paper that is published today by my right hon. Friend the Home Secretary, he will see what will be the substance of the debate on Monday. That is what it will focus on. The motion will be published in good time. He can take it that the effect of the motion will be to support the Government’s proposals, as set out in the Command Paper.
Wayne David (Caerphilly) (Lab)
This is probably the most important European question that we will have to decide on in this Parliament. According to the treaty of Lisbon, a decision has to be taken before 2014. The Government have known from the time the treaty was signed that a debate would be needed with proper time, as the Minister for Europe promised, before the end of this year. Surely it would make sense to have a reasonable period of discussion on this extremely important issue. A number of Members have expressed concerns and reservations on which they want clarification. Let us have a proper debate.
It is particularly important that Select Committees have plenty of time to reach their conclusions. We have heard from the Chair of the European Scrutiny Committee that his Committee needs to give these matters proper deliberation.
I hope that the Leader of the House has second thoughts. I am sure that he would not want to give the impression that the Government want minimal debate because they do not want to expose divisions in the Conservative party. I am sure that that is not the reason.
Mr Lansley
That question was longer than my statement. I know that the hon. Gentleman was in his place last Friday, but he did not take part in the vote, unlike some of his hon. Friends. I am making an emergency business statement today because I thought it proper not to wait until Thursday once my right hon. Friend the Home Secretary had made it clear that a debate was in prospect. It is clearly not possible to debate the substance before the Government’s proposals have been fully set out.
Mr Speaker
I think that the hon. Member for Caerphilly (Wayne David) thought momentarily that he was speaking from the Front Bench rather than the Back Benches.
Mr Philip Hollobone (Kettering) (Con)
Trusting that the Leader of the House is an honest fellow who is sensitive to the mood of the House at all times and given the comments that have been made today, may I urge him to reconsider his decision and to hold the debate and vote in September? Given that most of Europe, and especially the European Commission, goes on holiday in July, August and early September, I am sure that a delay until our September sittings would do no harm at all to our renegotiation prospects.
Mr Lansley
I hope that my hon. Friend knows how sensitive I am to the views of the House. I have frequently amended what we have planned to do for that reason. In this instance, the case seems straightforward. When the Government have reached a policy decision and the basis of that decision has been published for the benefit of the House, it is very often in the best interests of the House to have a debate as soon as possible. That will provide a good basis on which Ministers can take forward the negotiations, as I have described. As a consequence of those negotiations, there will of course be a further vote in 2014.
Post Office - Horizon System
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
Yesterday evening, an interim report into alleged problems with the Post Office’s Horizon computer system was published. The report was commissioned by Post Office Ltd from external forensic accountants, Second Sight. The Horizon system records all transactions conducted at every post office counter across the country. The Government welcome the publication of the interim report and the Post Office’s statement in response.
Although Post Office Ltd is 100% owned by the Government, the company operates at arm’s length as an independent commercial business. The Government do not play any role in operational matters. It is important to note that the issues in the report have no impact on Royal Mail, which is an entirely separate business. It is also important to be clear that, contrary to misleading media reports, the review explicitly confirms that
“we have so far found no evidence of system-wide problems with the Horizon software”.
The very small number of sub-postmasters who have experienced issues with the Horizon system are a minute proportion of the tens of thousands of people who have been successfully using the system across the network of 11,500 branches on a daily basis since 1995. Out of 68,000 users, only 47 cases have been put forward to the review.
I want to emphasise that the interim report makes no comment on the safety or otherwise of any conviction of a sub-postmaster for fraud, theft or false accounting. Equally, even if it had, the Government cannot intervene in the legal process to review or appeal past convictions. These matters can properly be dealt with only by the relevant judicial authorities. The interim report published yesterday analysed four cases. It found that there was scope for the Post Office to improve aspects of its support and training for sub-postmasters, and it has already taken steps to do so. The Post Office has further proposed a number of measures to build on some of the points made in the Second Sight report on support and training for sub-postmasters. I welcome those initiatives as, I understand, does my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), who has played a key supporting role in identifying cases for examination in the review.
The Post Office statement issued yesterday welcomed the broad thrust of the report’s findings and outlined three initiatives to deal with the issues raised. First, it will set up a working party to complete the review of cases started by Second Sight, and will consider all 47 cases brought forward by the Justice for Subpostmasters Alliance—the JFSA—and MPs. The JFSA has been invited to join the working party. Secondly, an independent figure will chair a review to determine how best to adjudicate disputed cases in future. The JFSA and other stakeholders will also be invited to take part in this process. Finally, a new branch user forum will provide a channel for sub-postmasters and others to raise issues at the highest level on business processes, training and support. The company will take forward the proposals as an urgent priority. I commend this statement to the House.
Ian Murray (Edinburgh South) (Lab)
I thank the Minister for the advanced copy of the statement and for coming to the House.
This is a disturbing affair. At a time when sub-postmasters’ income is being squeezed, the last thing they need is to lose confidence in the system they use to operate their businesses. The people in the post office network are the lifeblood of our communities and must be supported in every way possible. A recent National Federation of SubPostmasters survey found that operating costs were rising while personal drawings were falling, and that one in four sub-postmasters take no salary from their businesses. Most sub-postmasters earn little or no income from either financial or Government services, the two areas that Ministers identify as having real growth potential for post offices. The NFSP removed its support for the Postal Services Bill on the basis of the abject failure of the Government to deliver the “front office for Government” services they promised at the previous election. That is what makes today’s revelations on the Horizon system all the more worrying.
I welcome the steps taken by Post Office Ltd to investigate the concerns raised by the Justice for Subpostmasters Alliance and the right hon. Member for North East Hampshire (Mr Arbuthnot). Its website has a case-by-case analysis of sub-postmasters who did nothing wrong, but for whom alleged defects in the system had resulted in problems with cash reconciliation and processing payments. Press reports this morning say that the Post Office has admitted to software defects in the Horizon system, but the Post Office press release would have us think that this is a mere training problem.
Second Sight, the independent company employed by the Post Office to investigate these issues, said that while there was no fundamental problem with the Horizon system, there were bugs in the system that resulted in it identifying defects resulting in a shortfall of up to £9000 at 76 branches. The Post Office has recognised, however, that the report raises questions about the training and support being offered to some sub-postmasters. This raises wider questions on the current network transformation programme. Training concerns have been consistently raised by Opposition Members, the Select Committee on Business, Innovation and Skills and Consumer Futures, but the move to a Locals model could result in fewer fully-trained staff in our post offices.
If post office services are merely being administered from the front counter of a newsagent or shop, can we guarantee that the servers will be fully trained to ensure that the issues with the Horizon system do not arise in the future? The Minister did not address that question in her statement, and the National Federation of SubPostmasters has raised this issue time and again. It responded today by welcoming the Post Office statement, but also said
“We are encouraged to see that Post Office Ltd (POL) concedes that there is scope for improvement in its training and support programmes—issues which the NFSP has raised repeatedly with POL.”
This is all at a time when Crown Post Office staff are in industrial action, the transformation programme is struggling to be delivered, sub-postmasters’ incomes are dropping, there is a dispute with Royal Mail on the segregation of mail payments, the future of the inter- business agreement is unclear due to Royal Mail privatisation, and Post Office senior management have awarded themselves bonuses of more than £15 million.
What processes will be put in place to compensate sub-postmasters and former sub-postmasters who have been disadvantaged, fined, lost their businesses, homes or even jailed, as a result of the problems with the Horizon system? The Minister said that the interim report makes no comment about any convictions, criminal or otherwise, but will those serious issues be dealt with? When did the Government know about this investigation and the problems with Horizon? How will she ensure that all staff are adequately trained in the transfer to a Locals model? Can she confirm or deny recent reports that there are ongoing talks to change the voluntary Locals network model to a compulsory model, due to the slow take-up of the transformation?
Jo Swinson
I thank the hon. Gentleman for his wide-ranging remarks and questions. He is right to say that it is important for people to have confidence in the post office network. In terms of tone, I understand that the remit of Opposition is to ask questions and to be challenging, but it is important that we do not talk the Post Office down. Members on both sides of the House recognise the vital role that post offices play in our communities, that they are doing an excellent job and that there can be a bright future for the Post Office. This Government have stopped the decline in the numbers in the post office network under the previous Government. The hon. Gentleman will be aware that the Post Office has won 10 out of 10 Government contracts recently. We want more income for Post Office Ltd to come through Government services. It has a good record of winning contracts.
The hon. Gentleman mentioned the bugs in the system that have been reported in the media. It is important for the House to have clarity on this, because there are two separate issues. The Post Office itself identified issues on two occasions: through a routine systems check and as a result of a query from a sub-postmaster. That led to a small number of transactions being queried across 76 branches. Post Office was proactive in identifying and rectifying those problems so that no sub-postmaster was out of pocket. That is a separate matter from the issues considered in the report, and which were raised by the JFSA and Second Sight. No system-wide software issues were found. There were issues relating to the interface for dealing with multiple computer systems. The training on offer, and the helpline that sub-postmasters can call if they have a problem, were identified as areas for improvement.
The hon. Gentleman asked specific questions on compensation. There is no new evidence of further problems. Where the Post Office has identified defects, sub-postmasters have already received compensation to right underpayment. On convictions, it is up to individuals to go through the usual judicial processes if they are concerned about the safety of a conviction, and that can be done through the Court of Appeal. Clearly, if any evidence were to come to light that had an impact on the safety of convictions—I stress that that has not happened as a result of this interim report—Post Office Ltd would have a duty to look further at those issues as a prosecuting authority to ensure that convictions remain safe.
The report was commissioned by Post Office Ltd, but the Government were aware of it and there have been meetings with MPs in the House at various points in the past couple of years. On the transfer to the Locals model, I confirm that proper training will be in place. Customer satisfaction in the branches that have already gone through network transformation is significantly higher, and the experience that customers have is important. We are looking to ensure that network transformation continues and is successful, but any discussion on its future will be done in conjunction with the National Federation of SubPostmasters to ensure that we move ahead with a plan in which everybody has confidence.
Mr James Arbuthnot (North East Hampshire) (Con)
I thank my hon. Friend for making this valuable statement to the House. Does she accept that the Post Office, which has acted highly commendably in commissioning this independent review, has a conflict of interest—or, rather, a conflict of duty—in both looking after its sub-postmasters and protecting public money, and that the review has shown that it has fallen too far on the asset recovery side of that conflict? Does she agree that it is essential that the work that needs to be done is not only independent, but seen to be independent of the Post Office? Does she also agree that some sub-postmasters would never have been prosecuted, sued or disciplined had the new procedures now in place or proposed been in effect earlier, and that we must look after them and try to provide them with redress, perhaps through the Criminal Cases Review Commission?
Jo Swinson
I sincerely thank my right hon. Friend not only for his question and comments, but for his work acting as a collecting point for some of the concerns. Importantly, it ensured that cases could be looked at anonymously and confidentially, meaning that nobody had to fear bringing them forward. That has played an essential role in this process.
Post Office Ltd is the guardian of large amounts of public money, and it is important that it is properly looked after, but that does not mean it cannot also support sub-postmasters in ensuring that their systems work properly and ensure that there is reconciliation and that things tally up. In fact, I would argue that those are complementary duties, because ensuring that sub-postmasters are well supported helps the Post Office with its role in looking after public money.
It is important that any further work is not only independent, but seen to be independent, and clearly the role of Second Sight in that is important, as is the role of the JFSA. I would not go as far as my right hon. Friend, however; there is no evidence to suggest that any convictions would have been different had these processes and training systems been in place, particularly given that in most of the prosecutions dealt with in the report—not all 47 cases in the report resulted in a prosecution—the sub-postmaster pleaded guilty in the first place. It is difficult to second guess when somebody has entered a guilty plea.
Mike Wood (Batley and Spen) (Lab)
I thank the Minister for her statement. She stresses the need for independence in the continuing process of looking at the outstanding queries and issues, and no doubt she is mindful that when the Post Office talks about Horizon, it does not just mean the software in the computer system; it means the wider issues, including the interface between that system and other systems; training staff how to use it, and so on. Given that she has made a commitment on the need for independence, will she assure the House that if we are to move to a working party to continue the process, Second Sight, which has done such good work up to now, will be part of it?
Jo Swinson
I shall happily give the hon. Gentleman that assurance. The continued input of Second Sight is incredibly important, given its familiarity with the case so far and the fact that it enjoys the confidence of many of those involved. It is also important to recognise, however, that to date this system has handled more than 45 billion transactions and that there have been issues with only a tiny, tiny number of them. As the report itself found, the vast majority of sub-postmasters in branches were at least reasonably happy with the Horizon system. I suspect that Members would say that, where IT systems are concerned, “reasonably happy” is probably as good as we are going to get. Generally, it is working well, but we need to ensure that the further work on cases where there are outstanding queries is independent.
Mr Jonathan Djanogly (Huntingdon) (Con)
Clearly, it has now been ascertained that the Horizon system has problems, even if, as the Minister says, they are not systemic. Does she not feel that that is unacceptable, however, given the delays from Post Office Ltd in working out what went wrong? This matter has meandered on for years, resulting in serious reputational damage risks to sub-postmasters. Will she give us her views on whether that is acceptable?
Jo Swinson
It is to the Post Office’s credit that it has commissioned this independent review, which has been transparent and accountable, as my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) also said. It is easy for organisations to say there is not a problem and to try to sweep these things under the carpet, but Post Office Ltd decided to be open about it and to ensure that the report was published. In fact, its newsletter to all branches contained an article encouraging anyone who had difficulties or queries they wanted to raise to ensure they were put into the Second Sight review.
The Post Office has taken significant steps to ensure that there is transparency and accountability and that people’s concerns are taken forward. Clearly, sometimes these issues take time, and of course there are lessons to be learned. Improvements will be made to ensure that when queries are raised, they can be investigated more thoroughly, but again I highlight the context: we are dealing with a system that processes billions of transactions, so it is very complicated and it cannot be expected that nothing will ever go wrong; what is important is how the organisation responds when things do go wrong.
Mr Kevan Jones (North Durham) (Lab)
Being a Minister allows the hon. Lady not only to ask questions but to right wrongs. To dismiss cases such as that affecting a constituent of mine, Mr Tom Brown, as minuscule does not change the fact that he has lost his livelihood, his wife has died, his name has been dragged through the local community and he is stilling awaiting an outcome from the Post Office. He was arrested by the police, but they did not take the case forward; the Post Office did. His good name is now being questioned, he has had to sell his house and is still waiting for the Post Office to produce the evidence. I am sorry, but the Minister’s statement has done none of the things she could have done to put right some of these wrongs.
Jo Swinson
I appreciate the situation that the hon. Gentleman’s constituent finds himself in—it is important that he is speaking up for him—and I understand that this has had a massive impact on those involved. When I referred to “minuscule”, I meant the number of transactions queried out of the overall number of 45 billion. I do not know the details of the individual case, so I hope he will appreciate that it is therefore difficult for me to comment. What is important is that we have an independent procedure to get the answers that people such as his constituent are looking for, and everyone involved must have confidence in that procedure. I know that there have been meetings of MPs and that the JFSA is involved; getting those answers is important, but it is also important to stress what the report shows, rather than to suggest that it contains things that it does not.
Mr Robin Walker (Worcester) (Con)
I welcome the Minister’s statement, particularly the commitment from the Post Office to improve aspects of its support and training for sub-postmasters. I recently visited St Johns post office in Worcester, which is an enthusiastic early adopter of the network transformation programme. Will she join me in celebrating the fact that the Government are investing in the post office network, rather than running a closure programme, as the last Government did?
Jo Swinson
I very much welcome my hon. Friend’s comments. He is quite right that the Government are investing £1.34 billion in the post office network, and I know from speaking to Members on both sides of the House that where these new models are open and working, they have had a really positive reaction from consumers. The Post Office has a bright future, but part of that is about ensuring that where issues arise, they are properly investigated. That is what this independent process has been doing, and that is why we are discussing it today.
Mr Mike Weir (Angus) (SNP)
The number of sub-postmasters affected might be small, but none the less it has led to terrible consequences for many of them. One reason many people pleaded guilty, paid back money or had money taken off them by the Post Office at source might have been the latter’s insistence that there was absolutely nothing wrong with the system. It has now been proved that there is doubt about at least part of the system, so is it not imperative that all these cases be dealt with speedily and that justice be done for these sub-postmasters?
Jo Swinson
The hon. Gentleman is right that it is imperative that these cases be looked at speedily, although I think he would also agree that that needs to be done comprehensively, and clearly when forensic accountancy work is going on, things can take time. We need to be clear about what the report says about the Horizon system. It did not find evidence of systemic failures; that is not to say there has never been a bug in the system, but I defy anyone to find an IT system that has never had a bug. What is important is that when bugs are found, they are dealt with and the problems are rectified. What has not been found, however, is any systemic problem leading to the issues faced by sub-postmasters, although there have been issues with the support and training provided alongside Horizon.
Jonathan Lord (Woking) (Con)
Like many colleagues, I have a constituent, Mrs Seema Misra, whose life and family life is in ruins after suffering reputational damage and receiving a custodial sentence. I see from the Minister’s statement that an independent figure will chair a review to determine how best to adjudicate disputed cases, but will she assure me that the working party set up to complete the review of current cases will also by chaired by an independent figure? That is important.
Jo Swinson
Yes, I am happy to give my hon. Friend an assurance that the working party will be independent. As I have already confirmed to the House, the continuing involvement of Second Sight, which is independent of the process, is crucial as part of that working group.
Mr Russell Brown (Dumfries and Galloway) (Lab)
The Minister has said that the network is working well. Will she share with the House the numbers of sub-post offices that are temporarily closed or have had to move to an alternative, temporary service delivery system?
Jo Swinson
I will certainly ensure that that information is sent to the hon. Gentleman in writing. As he, and I hope the House, will appreciate, these numbers change regularly by their very nature. To ensure accuracy, I will write to him and place a copy in the Library. What is important is that we have a commitment to maintain the network of post offices at 11,800. We are ensuring that we invest in the network, rather than embarking on closure programmes, which, as I know from my constituency and elsewhere, unfortunately had a negative impact on the post office network up and down the country.
Andrew Bridgen (North West Leicestershire) (Con)
Having been involved in this issue for some time and having initially been told by Post Office representatives that the Horizon software system was perfect and could not be infiltrated, I am pleased that the Post Office is co-operating with the independent investigation, whose interim report indicates that the system is clearly not perfect. I urge my hon. Friend to ensure that Second Sight continues with its investigations. Does she accept that if the system was perfect, the modifications would not be needed and many—or some—of the historic convictions may well be unsafe?
Jo Swinson
I certainly agree with my hon. Friend that no system is perfect; perhaps it is a bit of a hostage to fortune for anyone to proclaim a system as perfect. I would not agree with the second part of his question—that that therefore means that those convictions are obviously unsafe. The evidence is not there in today’s report, but if evidence emerges to suggest that, there are legal channels that can be followed to ensure that those issues are taken up.
Huw Irranca-Davies (Ogmore) (Lab)
It seems to me that two groups of sub-postmasters fall outside the remit of today’s statement. The 47 past cases brought forward by the Justice for Subpostmasters Alliance will be taken forward by the independent working party, but what about somebody—I have one such case in my patch—who for very good reasons does not feature in those 47 cases? Can that be looked at again? Secondly, what about live cases? The statement refers to “disputed cases in future”, but I have two live cases in my constituency that do not fall within anything that has been described today.
Jo Swinson
Clearly the procedures that the Post Office is putting in place to improve its training and support will, I hope, assist those cases that are live at the moment. On the hon. Gentleman’s first point, I can certainly give an assurance that if there are other cases that need to come forward, we would not want to deny those people the opportunity for that to happen.
David Mowat (Warrington South) (Con)
For the purposes of clarity, can the Minister confirm that all the issues we are talking about today are business, process and training-related, and not software-related? Is that what we are saying?
Jo Swinson
Yes. The report mentions a couple of bugs in the Horizon system, which the Post Office proactively found and rectified, but basically what it has found to be lacking in Horizon is not the software, but the support and other issues around the software.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
The Minister has given some full answers to the questions posed, but she was unable to give a direct answer to one of the questions put by my hon. Friend the Member for Edinburgh South (Ian Murray) from the Front Bench. Let me give her another opportunity to confirm whether the Government and Post Office Ltd are considering changing the Locals programme from a voluntary to a compulsory basis. A simple yes or no answer would be adequate.
Jo Swinson
I am always keen to be concise. I think I did answer the question earlier. I pointed out that the transformation programme is an important part of the Post Office’s future. We are making sure that we look at how it will be delivered with the new strategy for the Post Office that will published, and we are working closely with all the stakeholders to ensure we can do that. What is important is that whatever the future system looks like, there will be a choice for sub-postmasters, rather than forcing them down a particular route.
Mr Philip Hollobone (Kettering) (Con)
Being a sub-postmaster is a very worthy profession, at the heart of many local communities and helping highly vulnerable people. With respect, I think the Minister dismisses too lightly the devastating impact that the Horizon system has had on a small number of people. The very least that Post Office Ltd should be doing is setting up a legal fund to review each case, because many will have pleaded guilty to false accounting, given the situation with the system and the legal advice they received at the time.
Jo Swinson
I absolutely recognise that the impact on individuals has been intensive and considerable, and I think I have made that point to other Members who have raised this issue. Constituency MPs are absolutely representing their constituents in taking forward these proposals, but I think there is a distinction to be drawn before assuming that convictions are therefore unsafe. It is important that we draw that distinction and that we are careful about what we say, particularly when it comes to legal proceedings that have taken place outside this House—and rightly independently of this House—and where people have entered a particular plea.
If individuals are concerned about the quality of the legal advice they received at the time, there are routes for them to challenge that, such as the Legal Services Commission. If evidence comes to light that materially affects the conviction, that would also need to be looked at by Post Office Ltd as the prosecuting authority, as I have said. However, that is not where we are yet. We will of course remain open minded about that as the review process continues. So far, only four of the 47 cases have been looked at in detail. Therefore, we await to see what more will come out of the review.
David Simpson (Upper Bann) (DUP)
I thank the Minister for her statement. She will have heard a number of Members putting information before the House about the lives that have been ruined. Injustice has been done, and that needs to be corrected. Will she tell us the exact details of the training that Post Office Ltd intends to carry out?
Jo Swinson
Training is carried out as a matter of course when new postmasters join the network. That can vary between a little over two weeks to three weeks. The Post Office is now ensuring that it visits new sub-postmasters after one month, and again after three months for the new local and main operating models, to deal with any teething issues or further questions that have arisen from their working the process for a few weeks.
Improvements to the helpline are also important, so that it does what it says on the tin and is actually helpful to people who call it. One thing that has improved the helpline is making it available for extended hours. As other Members have mentioned, sub-postmasters work very hard for long hours, so assistance needs to be available to them when they happen to be doing their reconciliation at the end of the day. That is not likely to be within office hours, so the service needs to be available after branches have closed. Those are just some of the improvements that the Post Office has been making.
Mr Peter Bone (Wellingborough) (Con)
I thank the Minister for coming to the House and making today’s statement. She is an excellent Minister, but on this occasion she has got it wrong. Indeed, I think she got the mood of the House wrong. The House is concerned about a very small number of people who have had their lives ruined. It is no good saying, “Oh, they can appeal,” or that they can do this or that. We need proactive action from the Government. I suggest that she talk to the Attorney-General to see whether he can look into those cases and review them.
Jo Swinson
I thank my hon. Friend for that question and for his kind words. I accept that this is a serious issue for the individuals involved, and it is absolutely natural that their constituency MPs are putting their cases. However, we have to be careful about going from the understandable sympathy for individuals in a difficult position to an assumption that all these issues are therefore unsafe and the result of problems in a way that is not borne out by the evidence in the report. That is why it is important to have a continuing independent review process in which people can have confidence, but it is also important to go by the evidence found in the report.
John Woodcock (Barrow and Furness) (Lab/Co-op)
For how long are my constituent and many others going to have this appalling cloud hanging over them? Has the Minister put a time limit on the next stage of the review?
Jo Swinson
The review is independent of the Government and of the Post Office, so it would not be appropriate for me or for the Post Office to put an arbitrary time limit on it. That said, I absolutely understand the hon. Gentleman’s point that there is a need for speed and for the prompt resolution of these issues, but that has to be balanced against ensuring that they are looked at in a comprehensive way. The independent working group, which will include representation from the Justice for Subpostmasters Alliance, will help to ensure that that happens swiftly and without compromising the details that need to be gone into.
Mr Speaker
The hon. Member for Strangford (Jim Shannon) has bobbed up, as is his common practice, at the last minute. I should not want him to feel excluded.
Jim Shannon
I have bobbed up at the right time.
I thank the Minister for her statement. The Horizon system has been blamed by some sub-postmasters who have been accused of false accounting. Does the Minister agree that red tape makes it difficult to run rural sub-post offices, especially those in isolated locations? What steps is she taking to restore confidence in the system, especially in relation to rural post offices?
Jo Swinson
The hon. Gentleman is quite right to raise the issue of rural sub-postmasters. The communications systems depend on communications technology, which can be more of an issue in rural areas. Many post offices have a main phone line and also a back-up system, perhaps using a mobile telephone. Rural areas often have difficulties with broadband connectivity, which is why the Government are moving ahead with plans to ensure that rural broadband is much better spread out. The support for rural post offices is certainly significant, and we recognise that there are many branches that need subsidy from the Government to continue. That is why the Government are injecting £1.34 billion into the post office network. We also recognise that there will be a continuing need to ensure that rural post offices are supported in providing their excellent services. They might be the last remaining shop in a village, or the only post office serving a large, far-flung area.
Points of Order
Huw Irranca-Davies (Ogmore) (Lab)
On a point of order, Mr Speaker. I welcome the Minister’s statement, and I think I understood—it might have been my hearing—that she made an offer to look beyond the 47 cases raised by the Justice for Subpostmasters Alliance. I was not clear, however, to whom any further cases should be referred. Perhaps, while the Minister is still in the Chamber, you can guide us on how we might get that clarification.
Mr Speaker
The failure of the hon. Gentleman to hear what was said does not, in itself, constitute a point of order. However, as the Minister is still here and looks happy to come back to the Dispatch Box to clarify the matter, he might be released from his ignorance before very long.
Jo Swinson
I am sure that the hon. Member for Ogmore (Huw Irranca-Davies) would have had the ingenuity to ensure that any such cases received attention in any event, but for the benefit of the House, I should point out that one avenue for highlighting any further cases would be to bring them to the attention of the Justice for Subpostmasters Alliance, which will be part of the independent working group. I hesitate to suggest, although I am probably safe in doing so, that my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) would also be happy to continue in his role as a recipient for any such cases. He seems to be nodding. So those are two options for the hon. Member for Ogmore.
Mr Speaker
I trust that the hon. Gentleman is now satisfied. He does not have to suggest that his ear is somehow defective. I feel sure that it is not. He might simply not have been paying full attention; I do not know.
Mr Chope
On a point of order, Mr Speaker. Is it within your power to require the Government to provide time for the proper scrutiny of Government measures before they are subject to a vote? Command paper 8671, to which the Home Secretary referred in her statement, comprises 155 pages of pretty impenetrable prose, with hardly any explanation. The command paper has considerable policy implications, but there are many ifs and buts among the contents. I cannot see how the House can reasonably be expected to reach a substantive conclusion on whether signing up to the document is in the national interest unless we are given a lot more time for its scrutiny, not only by the House but by the Select Committees, which are appointed specifically to do the job of scrutiny.
Mr Speaker
The short answer is that I do not have the power to which the hon. Gentleman refers. I much appreciate his belief that the Chair ought to be invested with greater powers, and I do not for one moment dissent from that proposition. The reality is that he and others will have to use their best endeavours in the coming days—it is literally a matter of days—to ensure that they are furnished with adequate material, and understanding thereof, to enable them to participate to their satisfaction in the debate that the Government have apparently now scheduled. I can operate only within my powers, but I know that the hon. Gentleman is a persistent, indefatigable and skilful Member, and I am sure that he will make the very best fist of this, not only on his own but with others.
Planning Regulations (Removal of Provisions in Respect of Gypsies and Travellers)
Mr Philip Hollobone (Kettering) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision for the removal of provisions in planning regulations relating to Gypsies and Travellers.
It is a huge privilege for me to represent the people of the borough of Kettering in this place, and I would like to extend my thanks to the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) for showing my constituents the great courtesy of attending the Chamber today to listen to their concerns, which I will do my best to express. He has proved himself to be knowledgeable and sensitive when it comes to the enforcement of planning regulations in relation to Gypsies and Travellers.
The reason for my seeking to introduce the Bill today is that my constituents are undergoing a consultation on where in the borough up to 37 Gypsy and Traveller pitches should be sited by the year 2031. It is no exaggeration to say that many of my constituents have been brought to tears by some of the site proposals. I also have the privilege to be a member of Kettering borough council, which, as the local planning authority, is doing its best within the national planning guidelines to undertake the consultation in the most effective way possible. However, the council has to follow national planning regulations and, by law, it has to identify up to 37 pitches. It has no choice in the matter. It does have some choice about where in the borough they should be located, but it must find those sites, and some of the proposals have been completely outrageous.
The purpose of my Bill is to remove any special provision for Gypsies and Travellers from the national planning regulations. I wanted to call it the “Gypsies and Travellers (The Same Planning rules as Everyone Else) Bill”, because that is really what I am after, but I was told by the parliamentary authorities that that would not accord with parliamentary procedure. That is why the Bill has its present title, but the effect would be the same.
Why should one category of person be treated differently from anyone else under the planning regulations? If one of my constituents from the settled community wanted to establish a mobile home in the middle of a green field in the open countryside, they would not be allowed to do so. However, if a Gypsy, Traveller or travelling showperson—the other term used in the planning documentation—wanted to do so, that would be permissible under the current planning regulations. That is exactly what has happened in the borough of Kettering, causing huge distress to many thousands of my constituents.
Most of the relevant planning regulations are to be found in a document entitled “Planning policy for traveller sites”, which was revised in 2012—unfortunately by a Liberal Democrat member of Her Majesty’s Government. Had there been a Conservative Minister in charge of this aspect of policy at the time, I suspect that the guidance would have been far more robust. The document states:
“The Government’s overarching aim is to ensure fair and equal treatment for travellers”.
I agree with that, 100%. Everyone—regardless of their background, ethnicity, age or whatever—should be treated the same. That is fine. It then goes on to say, however,
“in a way that facilitates the traditional and nomadic way of life of travellers while respecting the interests of the settled community.”
I disagree with the last part of that sentence, because I do not see why one category of person should be treated differently from anyone else. The document that such policies
“reduce tensions between settled and traveller communities in plan-making and planning decisions”.
The Minister has kindly agreed to visit Kettering in the near future to listen to my constituents’ concerns about this issue. When he comes, he will be left in no doubt that the consultation exercise being conducted by Kettering borough council has hugely enhanced the tensions between settled and Traveller communities in planning decisions.
Local planning authorities, of which Kettering borough council is one, are obliged under the national guidance to
“set pitch targets for gypsies and travellers…and travelling showpeople which address the likely permanent and transit site accommodation needs of travellers in their area”.
Why should they be treated differently from everyone else? The document goes on to say:
“When assessing the suitability of sites in rural or semi-rural settings, local planning authorities should ensure that the scale of such sites does not dominate the nearest settled community.”
Tell that to my residents in the village of Braybrooke, one of 22 villages in the Kettering constituency where, by fair means and foul, Gypsies and Travellers have set up a very large number of pitches on sites near to the village—and this was allowed to build up under the previous Government in such a way that 100% of the children in Braybrooke primary school were Traveller children. Such was their dominance over the local community that the local settled community decided not to send their children to that school. How can the “ghettoisation” of our countryside have been allowed to take place under national planning regulations? There has to be a balance in this system. That situation has been allowed to develop because Gypsies and Travellers have effectively been given special provision. My belief, however, is that everyone should be treated the same.
Under the consultation exercise that Kettering borough council is undergoing, it has to identify 37 pitches by 2031. Some of the sites—they will be unfamiliar to Members of this House, but very familiar to my constituents—are completely inappropriate. One pitch could be sited in Crown street, Kettering, another in Beatrice road, while six or seven could be at the Scott road garages site in Scott road, and another six to seven in the old sewage works in Burton Latimer. Another two could be at the Springfields site, north west of the village of Braybrooke, with two more at the Harrington road in Rothwell.
Many of those sites are within highly built-up areas within my constituency, and some are in the heart of the town of Kettering itself, and residents are rightly concerned that their homes will be devalued by tens of thousands of pounds if permission is given for a Gypsy or Traveller site to be set up nearby. There are understandable concerns, too, about the behaviour of Gypsy and Traveller groups, and these include crime, rubbish and antisocial behaviour.
Members may not realise that local residents have told me, on the basis of police evidence, that many distraction burglaries are undertaken by members of the Gypsy and Traveller community. It is a speciality of theirs. Likewise, farmers and rural dwellers are, frankly, terrorised at the theft of, and damage to, farm equipment and rural properties. The idea that these sites could be set up near to long-established communities both within towns and villages is bringing a huge amount of distress to my local residents.
Kettering borough council goes out of its way to do its best to provide affordable homes for as many as possible and over the last nine or 10 years it has delivered a total of almost 1,300 social rent and intermediate homes. Kettering borough council cares about how its local community is housed. Having to put within its planning system, however, sites for Gypsies and Travellers above or at a higher priority than anyone else is asking the council to do too much.
I congratulate Her Majesty’s Government and my hon. Friend the Under-Secretary on rescinding 186 pages of the equality and diversity in planning guidance brought in by the last Government—186 pages of Whitehall guff that has done tremendous damage to local communities, including mine in the borough of Kettering.
Question put and agreed to.
Ordered,
That Mr Philip Hollobone, Priti Patel, Mr John Baron, Mr Peter Bone, Mr David Nuttall, Philip Davies, Mr Christopher Chope, Mark Pawsey, Robert Halfon, Mr Stewart Jackson and Andrew Bridgen present the Bill.
Mr Philip Hollobone accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 8 November, and to be printed (Bill 87).
Financial Services (Banking Reform) Bill
(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:16 - The House divided: - Ayes: 230 / Noes: 292 - Question accordingly negatived.
16:29 - The House divided: - Ayes: 228 / Noes: 292 - Question accordingly negatived.
Chris Leslie (Nottingham East) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 10—Sale of state-owned banking assets—
‘(1) Before the sale of banking assets in the ownership of HM Treasury, the Treasury shall lay before Parliament a report setting out—
(a) the manner in which the best interests of the taxpayer are to be protected in connection with such sale,
(b) the expected impact that any sale might have on competition for the provision of core services, customer choice and the rate of economic growth,
(c) an appraisal of the options for potential structural changes in the bank concerned including—
(i) the separation of the provision of core services from the provision of investment activities,
(ii) the retention of a class of assets in the ownership of HM Treasury,
(iii) the impact of any sale on the creation of a regional banking network.
(2) A copy of the report in subsection (1) shall be laid before Parliament and sufficient time shall be given for the appropriate committees of both Houses of Parliament to consider its findings before any sale decision.’.
Government amendment 5.
New clause 15—Local stakeholder banks—
‘(1) Within three months of Royal Assent of this Act the Secretary of State shall publish for consultation a report setting out proposals for the creation of networks of local stakeholder banks.
(2) This report shall contain an examination of stakeholder banking structures, defined as credit institutions that are not owned by private shareholders, with the with the aim of maximising shareholder returns. The examination should draw on experience in the UK and elsewhere and include—
(a) co-operative banks;
(b) credit unions;
(c) community development finance institutions (CDFIs);
(d) public-interest savings banks.
(3) The report shall examine potential impacts of the creation of networks of local stakeholder banks on—
(a) customer service and product range,
(b) accessibility to banking services for customer underserved by commercial banks,
(c) financial stability,
(d) accountability to local stakeholders.
(4) A copy of this report and the outcome of the full consultation shall be laid before Parliament and sufficient time shall be given for consideration of its findings by members of relevant committees of both Houses before any decisions are taken on the sale of state-owned banking assets.’.
New clause 12—Portable account numbers—
‘(1) Within six months of Royal Assent of this Act, the Treasury shall lay before Parliament a report considering—
(a) the adequacy of voluntary arrangements made by UK ring-fenced bodies to facilitate easier customer switching of bank account services; and
(b) legislative options for the introduction of portable account numbers and sort codes for retail bank accounts provided by UK ring-fenced bodies.
(2) The Chancellor of the Exchequer may, by affirmative order to be approved by both Houses of Parliament, confer powers upon the appropriate regulator to require UK ring-fenced bodies to comply with any specified scheme to establish the use of portable account numbers and sort codes.’.
New clause 14—Portable account numbers (No. 2)—
‘(1) Within 12 months of Royal Assent of this Act, the Treasury shall lay before Parliament a fully independent and comprehensive report detailing the options for introducing portable account numbers for bank accounts within the UK, including a full cost benefit analysis of the available options.
(2) The appropriate regulator may require banks and building societies to comply with any scheme to introduce and facilitate the use of portable account numbers, which is introduced in regulations made by the Treasury.
(3) No regulations may be made by the Treasury under this section unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.’.
Government new clause 1—Minor amendments.
Government new schedule 1—Minor Amendments.
Chris Leslie
Here we are again—a second bite at the Financial Services (Banking Reform) Bill. Today, we debate a series of amendments and new clauses that have been loosely grouped together under the title “Competition etc.” I shall speak in particular to new clauses 8, 10 and 12 in due course, but I shall start with new clause 8.
We felt it important to discuss the obstacles in the way of better competition in the banking sector. I am sure that it is not true of you, Madam Deputy Speaker, but many hon. Members have probably been with their retail bank since they were very young—not so long ago in your case, Madam Deputy Speaker. Although an aficionado of switching and looking at different services in banking, I must confess that I have been with the same bank since I was 14, and with no real logic other than the inertia that afflicts many customers: we tend to think that it is inconvenient to change bank accounts; we tend to think, “There is not much choice, so what is the difference or the point of shopping around?” It is this sense of a lack of competition and lack of choice that we want to remedy with the new clause, tabled with other amendments in the group.
There are significant obstacles to competition, particularly to new challenger banks coming into the system, breaking into the business and trying to do something to challenge the absolute dominance of the big five banks. The new clause would require the Treasury to publish a review considering the obstacles to those new challenger banks and ways of increasing the number of new banks coming into play.
Under the new clause,
“The Chancellor of the Exchequer shall instruct the Competition and Markets Authority to begin a full market study…into UK financial services institutions involved in the provision of core services”—
in other words, retail banking. The aim is to provide a structure to support better competition, dealing with obstacles in the way of allowing new institutions to break into the market and to consider what actions could be taken to facilitate the new institutions entering into general competition.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Does the Minister accept that help is needed not just for new entrants, but for unusual, smaller players in the present financial system? As a Labour and Co-operative Member of Parliament, I have an interest in the Co-operative bank. When HBOS and RBS got into difficulties, everyone rushed around throwing taxpayers’ money at them, but when the Co-op gets into serious difficulty because of its unique ownership basis and its lack of shareholders, it receives very little help from either the Treasury or the Department for Business, Innovation and Skills.
Chris Leslie
I hope that the Co-operative bank, and all other institutions, will now be in a position to make secure and stable progress. However, I do not think that there is really a parallel between the Co-operative bank and institutions that would have disappeared had it not been for the intervention of the taxpayer in keeping the cash machines operating. We hear Government Members say that the public deficit was somehow created as a result of ministerial choices. It is sometimes forgotten that the state—the taxpayer—had to intervene to rescue the banks. Thank goodness that happened, but it left us with a phenomenal problem with which we are still struggling years later.
Mr Sheerman
Many of my constituents worked for the Halifax mutual building society, and we saw what really caused the ruination of two banks. Wicked, evil, unethical people took over a bank and ran it into the ground. That was not about the Government; it was about greed, and about particular people.
Chris Leslie
Absolutely. Those are the very issues that should be in the Bill, but it is a pretty thin measure. We are still waiting, apparently endlessly, for the Government to decide to populate it at some point with the recommendations of the hon. Member for Chichester (Mr Tyrie) and the Parliamentary Commission on Banking Standards.
We need support for mutuality and greater diversity in the banking sector, and that is why the new clause refers to competition. We do not just want more plcs to enter the market; we want institutions of many different types, including mutuals, to be given a chance to compete for business. My hon. Friend’s Co-op bank, for example, might wish to have that greater choice were it available. The new clause was largely inspired by the recommendations of the parliamentary commission, whose most recent publication made it very clear that the sector suffers from a lack of serious competition.
Which?—formerly the Consumers Association—reported recently that 55% of people had never switched their main personal current account, and that the larger banks had not earned their market share by dint of innovation or the provision of competitive services but simply through “first mover” advantage, because they had been there for such a long time. It also reported that, sadly, customer surveys had indicated that the big five high street banks—Lloyds, RBS, HSBC, Santander and Barclays—consistently gave less satisfaction than others. Those banks have a very large market share, which has increased over the last few years. They control 85% of the current account market as opposed to 71% before the financial crisis, 67% of mortgage gross lending as opposed to 38% before the crisis, and 61% of the savings account market compared with 47% before the crisis. The inertia of their customers enables those large banks to sit on a fairly stable customer base. It has often been said that people are more likely to divorce than switch current account, although I am sure that that does include those who are in the Chamber today. The lack of dynamism and choice in the market is a significant worry, and it is no wonder that it has been criticised by the Office of Fair Trading.
There are major barriers to entry for new banks, which need to establish an infrastructure to have a fair chance of competing more widely. Recent suggestions include the adoption of utility platform sharing, and an extension of the payments system machinery beyond the big banks. I think that such ideas should be given serious and detailed consideration, but they pose a challenge to institutions that own and control payments systems, and we must think carefully about how they can be tackled.
Some of the big banks were supposed to divest themselves of branches. RBS was supposed to float off a number of its branches to Santander, but that did not get very far. Similarly, as my hon. Friend the Member for Huddersfield (Mr Sheerman pointed out), Lloyds was supposed to divest itself of many of its branches to the Co-op, and we all know what happened in that instance. In all, 1,000 branches were supposed to be out there creating a proper challenger bank, or at least mixing it up a little by increasing the number of players in the system. That has not happened, and I have to say to the Minister that the Treasury has not exactly covered itself in glory. I am not claiming that it is entirely the Treasury’s fault, but I think that it had a hand in overseeing some of the divestment strategy. I hope that the Minister will update the House, because divestment is very relevant to the issue of proper competition.
John Fingleton, chief executive of the OFT, has said:
“More than a decade on from the Cruickshank report, we still have a banking sector where competition is manifestly not working well for consumers.”
The hon. Member for Chichester, the Chairman of the Parliamentary Commission on Banking Standards, who has left the Chamber—oh, there he is, next to the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso). I apologise to him. He is clearly negotiating away as we speak. He has said:
“The lack of competition in banking has been reinforced by a regulatory regime favouring large incumbents. Customers have lost out as a result. Moves to remove barriers to entry are essential.”
We all agree with that.
We constructed new clause 8 very much along the lines of the commission’s recommendation of
“a market study of the retail and SME banking sector, with a full public consultation on the extent of competition and its impact on consumers. We make this recommendation to ensure that the market study is completed on a timetable consistent with making a market investigation reference, should it so decide, before the end of 2015.”
The time scale is very important, because the issue has drifted on year after year.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
The hon. Gentleman has gone to the heart of one of our key recommendations, but what we had in mind was that the Government should just get on and do it. We did not envisage a need for legislation. Am I not right in thinking that, if properly instructed, the relevant authorities could undertake the work themselves?
Chris Leslie
I hoped that legislation would not be necessary, but I think it worth while for the House to express its view, particularly in response to the commission’s recommendation. Heaven knows, we have been here before. We have heard plenty of warm words from Ministers. They have said “We will certainly consider this, because there is a strong case in favour of it”. When it comes to the crunch, however, if the House of Commons is to do anything through this Bill—and we shall not be doing a lot, because so much is being left to the other place—I think that it is worth our trying to insert the new clause, just to keep the Minister’s feet to the fire. All that we are asking for is a market study in preparation for the proper market investigation reference before the end of 2015.
When the Vickers report was published in 2011, Labour Members felt that specifying 2013 would allow an appropriate time in which to assess the issue, and, two years on from Vickers, I do not think that anything has changed our minds in that regard. Getting that market study under way is the very least that should be done, and the Minister needs to commit to doing that. This is a critical point. When Members listen to what the Minister has to say, they must read between the lines. He will make all sorts of warm noises and say, “The OFT has started this process for SME customers”, but it has not done so for retail customers. That is the crucial difference; focusing merely on SMEs is not sufficient.
The Government have already claimed in their response to the commission’s recommendations that they will be fulfilling the commission’s proposal, but that is not the case. They are not putting in place that retail review, and I do not understand why they are so resistant to doing that. The Minister must explicitly set out why they are holding back from having a market study and investigation of the issues in respect of retail banking.
The Government response is full of warm words—they say they are in discussions and they are engaging with the problem—but it is not strong enough. It is too piecemeal and not sufficiently transparent, and they are not giving the commitment consumers, let alone commission members, would like. If the Government can at least acknowledge that they will not accept the commission’s recommendation, that will give us a clear choice when we come to consider what to do in respect of new clause 8.
The hon. Member for Brighton, Pavilion (Caroline Lucas) has tabled new clause 15, which focuses on local stakeholder banks and local banking. I agree that we should look at sub-national financial provision, particularly for customers, who can feel that they have very little choice at all. She will know that in new clause 10 we say that if state-owned banking assets are to be sold, options for a regional banking network ought to be fully considered. That is a very important proposal from the Opposition. There are some very plucky and hard-working institutions across the country—the credit unions, the community development financial institutions and other smaller building societies and mutuals—that do a lot of very worthwhile work at regional and local basis.
Mr Sheerman
Would my hon. Friend add to that list crowd funding and crowd sourcing, which many people think is the basis of a new, democratic capitalism in our country? It allows people to bypass the banks, which have so often failed us, and gives to our communities the power to regenerate businesses and communities.
Chris Leslie
As some have said in the past, the magic of the “interweb” will ensure that customers can avoid that intermediation—that middle-management step—and access finance. That may well develop very rapidly, although we need to make sure the regulators can keep an eye on how it develops.
Chris Leslie
Well, I think it is important that we make sure the foundations are put in place to allow those new forms of finance to come to fruition in a safe environment.
My hon. Friend makes that point well, and I also want to give a name-check to the Community Investment Coalition: a number of financial institutions at local and regional level have come together to campaign on some of these issues, and in particular to call for greater transparency in the provision of financial services from community to community on a postcode-level basis, although that is anonymised as we do not need to know which organisations have been lending to which individuals.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Does the shadow Minister therefore believe we should follow what the US has done? It has a community reinvestment Act, which ensures that the major banks are investing equitably on an area basis. The major problem in the UK is that investment is directed towards London, of course.
Chris Leslie
And not just towards London, as a lot of the major banks have had their appetites whetted to make big profits by focusing on overseas. That disconnect with locality has been part of the problem. One issue for debate—on another day, perhaps—is the idea of having a regional banking network. The German Sparkassen system has a geographic mandate that requires those banks to do business within a particular locality. That is a dynamic for making sure there is a direct relationship between the banker and the customer, particularly for small businesses, but on a retail basis as well. That is a very good idea whose time has probably come.
Caroline Lucas (Brighton, Pavilion) (Green)
May I interpret the hon. Gentleman’s warm words to mean that Labour would support my new clause 15 if there were a vote on it?
Chris Leslie
Well, personally I prefer our new clause 10, but that is a good try by the hon. Lady. She has raised this issue in the spirit of trying to generate consensus on it, but I hope that in the limited time available to us we focus on the principle of making sure we get those commitments from the Government, which we all want in order to help get this transparency about what is happening in localities, as well as making sure we look at the state-owned assets and think about how they might be applicable to a regional banking network.
Government amendment 5 looks at some issues to do with competition, although they are mostly to do with the nature of ring-fencing and changes that might happen to the ownership of ring-fencing. I want to ask the Minister a question about the tensions between some of the objectives in the Bill. Government amendment 5 inserts a new requirement to consider competition issues, which seems to be slightly in tension with the existing provision to make sure there is no significant adverse effect from changing the ring-fencing arrangements. Can he clarify that that tension is resolvable, and confirm that the duty to consider competition will take effect subject to clause 4(3)?
On Government new clause 1 and new schedule 1, can the Minister help us by talking about the practical implications of the amendment to the Companies Act 1985 omitting disclosures to the regulators, done for the purposes of helping them fulfil their functions under part VI of the Financial Services and Markets Act 2000? In particular, this appears to stop such disclosures being exempt from section 449 of the Companies Act, which criminalises disclosure of information obtained in certain circumstances. What is the reasoning behind that change? Also, paragraph 2 of new schedule 1 amends section 376 of FISMA, changing “PRA-authorised” bodies to “PRA-regulated” bodies. Is that a significant change? Are there any bodies that are classed as PRA-regulated but which are not PRA-authorised? If so, which are they?
Our new clause 12 addresses the portability of bank accounts. I know that the hon. Member for South Northamptonshire (Andrea Leadsom) has been very active on this, and that she has tabled similar amendments. She has been vocal in favour of some of these changes, and has tabled a sensible set of proposals. I hope she would agree that we are mirroring each other on this question.
Our new clause 12 would mandate the Chancellor to publish a report on the adequacy of the current account redirection service and on a possible change in the law to compel all ring-fenced banks to introduce a current account redirection service that might include portability. The banks themselves have made proposals for a seven-day switching arrangement from this September. The Minister claimed in the Government’s response that they had secured that commitment, but that might be a little bit of exaggeration and spin; I suspect that the banks were heading in that direction, but I will let him off on this occasion. This all comes down to whether that seven-day switching will radically transform the convenience for the customer. It is all very well saying that there will be a year or so when some transactions from the existing current account will automatically be made into the new account, but I do not understand why that provision has been time-limited. Some people will forget that that provision expires after a certain number of months.
Andrea Leadsom (South Northamptonshire) (Con)
Interestingly, when we get into the nitty-gritty of how the seven-day switching process will work, we find that it seems to be more string and Sellotape—on top of the string and Sellotape currently holding the legacy systems together—so it is hardly a 21st century technological solution.
Chris Leslie
That is the worry, and we want to see how it is going to work. It is all very well if direct debits and standing orders—the sums leaving someone’s bank account—may be switched in that way, without the aggro and hassle of having to fill in new forms and so forth, but one of my anxieties is about payments into an account. For example, even the little step of someone having to tell their employer that they have a new account number and sort code is an inconvenient step too far. Apparently the banks are saying that they might deal with that as well, but this does not feel adequate and sufficient.
Andrea Leadsom
Is the hon. Gentleman aware that he is more likely to get divorced than to change his bank account?
Chris Leslie
Funnily enough, divorce has already come up a couple of times in our proceedings, and I am sure that Mrs Leslie will be watching them.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The reality is that the seven-day switching service must be matched against increases in the level of switching of current accounts if we are to increase competition. All the evidence from countries like the Netherlands, where such a service has been introduced, shows that it has the trust of customers but does not increase switching levels, although that is the rationale for account portability.
Chris Leslie
Absolutely. Sir John Vickers pointed out in his report that a typical customer is likely to move current accounts every 26 years, on average, and it is estimated that about 6% of personal current accounts will be switched this year. All sorts of statistics prove that this is not a particularly active area, although there is a growing consensus among members of the commission, and even some of the banks, that portability might be an idea whose time has come.
Mr Sheerman
I switched a business account to HBOS, without knowing that anything was going to happen, because I thought that with KPMG as its auditors and with an auditor process in place my investment and my savings would be safe. What are we going to do to ensure that when people switch there is a guarantee that, at last, the accountants in this country and the auditors actually do their job?
Chris Leslie
That broadens things out into a whole new terrain, but suffice it to say, we should be able to trust our banks. We should be able to know that all these issues will be going on safely. To be fair to the banks—I do not say that often—some of their systems are able to cope, and complaints mechanisms are in place to deal with these things.
This is just about the customer being able to grasp and understand what is going on. The grey mist descends on many constituents—and, heaven knows, on many hon. Members, as we can see—at the mention of financial services, and that is without getting into pensions and some of those issues. Basic bank account services are incredibly important and we need the Government to say a little more than warm words in their response on this issue. I commend the hon. Member for South Northamptonshire on her campaign and we are very much behind the spirit of the changes she suggests, hence our new clause 12.
Finally, I wish to deal with new clause 10, which relates to the sale of state-owned bank assets. We feel that before a sale takes place of assets in the ownership of Her Majesty’s Treasury—we are very much focused on the Royal Bank of Scotland and Lloyds at the moment —the Treasury ought to set out clearly a report discussing the manner in which the best interests of the taxpayer will be protected in the sale, and the expected impact that any sale might have on competition for customers and on the rate of economic growth. That should be accompanied by a proper appraisal of the options for potential structural change in the banks concerned, including: whether there should be any changes to the division between retail banking and investment banking in those institutions; whether some asset classes need to be held back—this is sometimes characterised as a good bank/bad bank split; and, crucially, the impact of the sale on the creation of a regional banking network. We think that is essential.
Mr Pat McFadden (Wolverhampton South East) (Lab)
My hon. Friend will know that the banking commission recommended having a proper study of the good bank/bad bank option for RBS. Does he think that in advance of that study it might help if the Government exercised a little more care in their stewardship of RBS, given that their disastrous political meddling of the past month has resulted in a fall in the share price of some 20%, the bank losing a chief executive without a plan being put in place for replacing him, and confidence among investors being lost by the Government’s handling of the bank?
Chris Leslie
My right hon. Friend is completely correct about that. If the British public realised what has happened to the value of that taxpayer stake in RBS, they would be appalled. Today’s figures show that £2 billion-plus has been taken off the value of RBS since the botched handling of the departure of the chief executive, Stephen Hester. That mishandling forced the Chancellor to back down from a foolhardy dash towards a fire sale, which we know was part of the plan from the conversations that Sir Philip Hampton, the chairman of RBS, let slip in comments to journalists around that time. Labour Members, however, are absolutely focused on the need for the taxpayer to get good value for money, to get our money back. That is entirely possible. Stephen Hester revealed the flaw in the Chancellor’s strategy for a hasty sale driven by the electoral timetable when he gave an interview to the BBC last month. When asked whether taxpayers would get back their £45.6 billion, he answered:
“RBS is capable of being worth more than what the government paid for the shares”.
When asked again whether it is possible for us to get our money back, he said:
“RBS is capable of that and I would be disappointed if over the passage of time that that won’t be the case.”
Stewart Hosie (Dundee East) (SNP)
I am very supportive of new clause 10, particularly the notion that the Government describe how the taxpayer will get the money back. However, has the hon. Gentleman given any thought to the timing of such a report and what information may need to be omitted, particularly in relation to asset clauses the Government may continue to hold, because it might be market-sensitive in the run-up to the re-privatisation of the bank?
Chris Leslie
I would have thought that before the Government considered a sale they would decide what they want to sell and what they do not want to sell. I do not think that what the hon. Gentleman suggests should be a particular problem, particularly given the taxpayer interests involved, in terms of having that report before a sale. However, I accept that there could be circumstances in which commercial confidentiality might apply and a line might need to be considered. I would be happy to examine whether some aspects of that need to be built into this concept. There is an opacity about the Government’s strategy, and the fog engulfing the Treasury, perhaps hiding the chaos within, is extremely thick—a real pea-souper. I am amazed that once the Chancellor of the Exchequer had defenestrated the chief executive of RBS—let us be honest, that is essentially what happened, and although the Chancellor of the Exchequer might have protested, “It’s nothing to do with me, guv,” with his 82% shareholding he clearly had a hand in the decision —the Government were surprised when the markets reacted so adversely. It is amazing that they went down that route without thinking through who would replace Stephen Hester as chief executive of RBS, creating a massive amount of uncertainty about the future of the institution. We are glad that they changed their minds and were forced to back down from the rush to the fire sale, but what on earth are we left with and where is the situation going?
Andrea Leadsom
I am delighted to be able to speak about this Bill on banking reform, which is so crucial to the future success of the British economy. All that time ago, Adam Smith said in “The Wealth of Nations” that for free enterprise to exist one needed both free entry and free exit of market players. Over the past 20 years, we have had neither in banking. Failing banks have certainly not been allowed to exit the market, hence all the problems with “too big to fail” and the massive taxpayer bail-outs. New players have also not been able to enter the market, as there have been enormous barriers to entry, and my new clause is an attempt to establish a real game-changer once and for all for the fate of competition in our banking sector, to enable new entrants to come into the market.
I know that the Government have already done a huge amount of work to change the plight for would-be banks. For example, we already know that the new Prudential Regulation Authority and the Financial Conduct Authority have made it easier for new banks to apply for a banking licence. Previously, there were enormous regulatory hurdles to entering the market for new banks, but now it has become slightly easier because they can get a banking licence that is conditional on their being able to recruit the right people and so on. They do not have to spend millions of pounds up front to evidence the fact that they can be competent as a bank.
The regulatory barriers to entry are gradually coming down, but an incredibly significant point that has not been addressed until now concerns the competition barriers to entry for new players in the market. The Government have made great strides in that regard, not just through the Vickers commission and the recommendations on seven-day switching, which will be a game-changer in enabling individuals and businesses to switch between banks, creating the competition that has been so lacking, but through some of the structural reforms they have announced more recently and the amendments to this Bill.
When I was elected to Parliament in 2010, one of the first things that my colleagues on the Treasury Committee —who are almost all in the Chamber today—and I did was consider the proposal from the Payments Council to get rid of cheques. We discovered in our evidence sessions that the proposal came purely from the banks. It was convenient only for them and absolutely was not convenient for the millions of people in this country who rely on cheques to settle bills, to pay their window cleaner or newsagent or to pay the neighbour who picked up their shopping for them. Millions of people still needed cheques, but it was very clear that the Payments Council planned to get rid of them for the convenience of the banks that owned and ran it. For me, that was the road to Damascus moment; I realised that the banking sector is the last great closed shop. The Payments Council, owned and run by the banks, governs the payments system, the big banks are the clearing banks through which every new challenger bank must go, and the payments infrastructure, VocaLink, is also owned and governed by the big banks.
For decades, the Payments Council has been able to permit or deny innovation in the payments industry. The big banks have been able not to allow challenger banks direct access to the payments system and have required them to go through the clearers, charging them up to 10 times more for accessing the payments system than they have been paying themselves. The first significant decision on which I want to congratulate the Government is that to consult on a new independent payments regulator. That is key to breaking open the banking sector and enabling new competition and transparency. It will be interesting to see just what has changed after the new regulator’s first few months of operation; it will be fundamentally transforming.
Importantly—this is where my new clause comes in—and as the hon. Member for Nottingham East (Chris Leslie) has said, for decades there has been a key barrier to competition in the banking system: the inability to move bank accounts freely and easily. People might be sick and tired of their bank. The Treasury Committee took evidence on opinion polls that suggested that certain banks had negative values when it came to whether customers would recommend them to a friend. People would say, “No, whatever you do, don’t go to my bank.” It is unusual to have such utterly negative recommendation levels between friends for a supplier. Even the energy sector fails to achieve such low levels of recommendations between friends. Something is clearly desperately lacking in customer service.
The Committee also heard some pretty shocking statistics about the failure of certain key banks to respond to customer service inquiries, to manage their call centres properly and to deal with complaints when they happen. It has taken all these banking scandals—payment protection insurance mis-selling, the bank swaps mis-selling and various other scandals—before the weight of evidence became enough for regulators to take action. Clearly the banks have not been good at policing themselves, and clearly it has been extraordinarily difficult for individuals and businesses to vote with their feet and move.
The difficulty is not only the decision to move bank; the person making that decision also faces having to make arrangements as regards their online shopping, their contract with the milkman and newspaper man, and their standing orders for, say, their television licence or their car insurance. If they change bank account, they have to change all those things, because they change bank account number.
The issue is not just whether a person can be bothered to change and go through all that hassle; very often, because of the consolidation that has taken place over the past 20 years, banks will force that situation on a consumer. A colleague told me in the Lobby the other day that their bank had just notified them that they have to change their bank account number, credit cards, debit cards, and cheque-books—everything—regardless of the fact that they do not want to do that, because the bank decided, off its own bat, to send them to another brand name. Of course, there is no compensation, or any way to get the bank to help the person to make all the notifications that they need to make.
Many people, particularly the elderly, have a real concern that if they change bank account things might just not happen; their regular payments might not be made, and everything might go horribly wrong. That puts them in a very difficult position. Of course, there is plenty of evidence of things having gone wrong. Perhaps the seven-day switching process will solve the problem of switching simply going wrong.
It would be a far better solution if, when a person moved bank, they took all their bank details with them. A similar thing happens in the case of mobile telephones.
Jonathan Edwards
The hon. Lady alluded to the allegedly competitive market in the energy sector, where there is a right to switch, although it can be difficult to do so, as I found out. Switching in itself does not stop companies from acting as a cartel. How confident is she that switching in banking would lead to greater competition in the market?
Andrea Leadsom
I will come on to that, and that will become clearer in the course of my comments. Certainly, in terms of barriers to entry, the lack of competition and switching—in other words, people’s inertia—has meant that banks simply have not had to compete on customer service. They have not had to fight to keep their customers. As those of us who have been in business know, there are times when we have lain awake at night, wondering how to stop our customers from leaving us tomorrow; that is the big motivator, whereas in the past it was how to nick a tiny bit of market share from one of the big players. The fundamental point is: “How do I hang on to my customers?” Customer retention is always the biggest challenge for every business, where there is free and open competition. That is what bank account portability would ensure.
If a person was switching between banks, instead of having to change all their bank details and cards, and having to remember the new numbers and notify all their suppliers, they would simply take their bank details with them, just as a person who changes mobile telephone provider takes their telephone number with them. That is what the amendment proposes.
I am delighted that the Government have said the following, in a press release responding to the work of the Parliamentary Commission on Banking Standards:
“On top of introducing 7-day account switching from September this year the government will ask the new payments regulator, once established, to urgently examine account portability and whether the big banks should give up ownership of the payments systems.”
I take that as a warm move towards the idea of bank account number portability.
Bank account number portability is a game-changer, but it is no surprise that the big banks, when asked about this back in 2010, virtually told us that it would cost so much that the entire world would end. That comes as no surprise to us; they would say that. However, if we scratch beneath the surface and talk to the likes of VocaLink, which provides the payments infrastructure, we find that many of the technological requirements of bank number portability already exist.
At the moment, the big banks own a person’s sort code and account number, and give the payments instructions that they hold for that person to VocaLink, so that it can make that payment. Instead of having that two-step process, in which a person instructs their bank, the bank instructs VocaLink, and VocaLink makes the payment, with bank number portability the consumer’s bank account number, sort code and payment instructions would be held within VocaLink. Instead of a two-step process with the bank at the front end, there would be a one-step process, in which the consumer communicated with VocaLink, and the bank instead provided the customer service front end and the customer proposition. That would completely streamline the system.
Mr Love
Is not one of the problems—this was certainly highlighted in our investigations—the ownership of the infrastructure by the banks, and the difficulty in getting them to change? Is not a payments regulator the ideal way to twist their arm, so that they do the right thing?
Andrea Leadsom
Yes. The hon. Gentleman is absolutely right, and he has certainly been a keen supporter of bank number portability, as have many hon. Members in the Chamber today. The payments regulator that the Government are consulting on is the first step to achieving transparency. The next step is empowering that regulator to do something to enforce bank number portability when it finds, as I am sure that it will, that to date there has been a completely deliberate attempt to restrict competition in the banking system.
The big banks have said that bank account number portability would cost an absolute fortune, yet the technology already exists. Some people have asked whether it would not be an enormous risk to data integrity if the consumer’s bank account number, sort code and payments instructions were held by VocaLink, but in reality, all the consumer’s details are held by the bank, which passes them all on to VocaLink, so there are double risks to data integrity at the moment. Holding those account details in VocaLink would reduce, rather than increase, the risk.
People also say that other banks cannot access VocaLink’s payments infrastructure directly, because all the banks that clear direct have mutually to underwrite each other’s payments. The smaller challenger banks cannot possibly afford to underwrite the payments of the bigger banks. However, we could easily solve that; already, in various exchanges, banks pre-fund payments. If a bank’s balance were too low, and it was running short of cash with which to meet its outgoing payments, it would be called, intra-day, for more cash. That problem is easily solvable, and the reason why it has not been solved is that that is simply not in the big banks’ interests.
It has also been said that the proposal would surely be incredibly complicated from an IT point of view, but VocaLink has already set up bank accounts for the Department for Work and Pensions, because a lot of the Department’s benefits customers do not have bank accounts. VocaLink is already able to manage customer account details for DWP customers, so the technology already exists. I simply do not accept the idea that there would be eye-watering costs. Chief executives of big banks have literally said it would cost trillions—absolutely vast sums—but I challenge them to provide any scrap of evidence that shows that is the case, and that their refusal is not down to their desire to restrict access to new players.
The advantages of bank account number portability are, of course, the elimination of barriers to entry, and increased competition as a result. One of the big problems for new entrants is that it is so difficult to gain customer share, because people will not move bank accounts. With bank account number portability, if I, as a customer, was sick and tired of my bank, I could move tomorrow, the day after, and the day after that, if I was not getting good service, and it would not be any skin off my nose; it would be perfectly easy to do, and it would be the banks’ problem. That would be an enormous change in the competitive environment.
Likewise, there would be far greater consumer choice. Bank account number portability would encourage the likes of Tesco Bank and Marks & Spencer Financial Services—any big, multinational conglomerate—to go into the money business; it would become yet another product line. That in itself would eliminate some of the problems of “too big to fail”, because there would be many more smaller players, which would have many product lines, and therefore would not have all their eggs in one basket.
For small businesses the change would be revolutionary. At present one of the biggest problems for small businesses is that the big banks require that as well as their company accounts, small business people have their personal accounts and mortgage with the same big bank and do all their foreign exchange, overdraft, loans and other transactions through that bank. It is incredibly difficult for a small business to move accounts because of the complexity of all their suppliers and all the people they are trying to trade with. The barriers to entry for them are perhaps even greater than they are for us as individuals. Again, being able to take their bank account number with them would change the position dramatically.
Another huge advantage that is not often talked about is that since the 1990s, when I was running Barclays bank’s team, an enormous consolidation has taken place. There used to be 44 big banks in the UK; there are now about 22 banks of any size. The consolidation meant that during the 1990s many banks took over other banks, broker- dealers, small fund managers and so on, so they have an enormous number of legacy systems. They have managed to string them together over the years, but bank fraud in this country alone is huge. Changing the payment system would dramatically reduce the incidence of bank fraud. Intellect, the IT trade body, has said that the change could reduce the incidence of bank fraud by up to £30 billion a year.
Finally, another key advantage of bank account number portability is resolution. Andy Haldane, the Deputy Governor of the Bank of England, has gone on record as saying that it would be the solution when the day comes that a big bank fails again. We have, of course, put in as many steps as we can. Basel III will make great strides towards ensuring that banks cannot fail again. We have created our new regulators. We have ensured that banks have proper leverage and proper capital. All those measures are designed to ensure that banks cannot fail again, but we know that banks will always fail. That is the reality in a western developed market economy such as ours. We saw only too recently the problems with Northern Rock, when people were desperate to take their money out. The answer to resolution is for the Bank of England to be able to say, “You have failed. We are now taking all your accounts and putting them with survivor banks.”
There is a huge amount going for bank account number portability, above and beyond the seven-day switching process. My new clause calls for the Government to ensure, within 12 months of Royal Assent, a full cost-benefit analysis of bank account number portability. Should the findings be that this is a good idea, and should it produce the kind of benefits that I have just described, the regulator should be empowered to implement bank account number portability. I welcome the Government’s assurances that they will move in that direction. On that basis I will not press my new clause to a Division, but I urge the Government to keep up the momentum and ensure that before too long we have full account number portability.
Caroline Lucas
Thank you, Madam Deputy Speaker, for the opportunity to speak to my new clause 15. It is a modest proposal for a full Government consultation on the potential for local stakeholder banks to be carried out before we sell off RBS or any other taxpayer-owned banking assets.
I was interested to hear the Minister mention yesterday his trip to Germany and how he saw in the pages of the Handelsblatt a big headline saying, “City of shame”, referring to the City of London. I agree that this is a stark illustration of the impact of financial mismanagement and of our current banking system on people’s views of the City. However, although I also agree that this highlights the need for improved standards in banking, I think it highlights, too, the need for a radical reappraisal of ownership and accountability structures, if we want to have a banking system that we can be proud of, not ashamed of.
I hope that during the Minister’s trip to Germany he also found time to look at the savings banks, the Sparkassen, that we have spoken about this afternoon and which make up about one third of the German banking system. They are run commercially with dual financial and social objectives, to make a profit and to support the local economy. Professional bankers take responsibility for day-to-day running of the banks and if they make incompetent lending decisions, they are more likely to get sacked than their counterparts in giant commercial banks. Local stakeholders, including local politicians, business leaders, employees and customer representatives, sit on a supervisory board. That is just one example of the sort of local stakeholder bank that my new clause seeks to promote.
The New Economics Foundation analysed data from 65 countries where such alternatives thrive. They include co-operative banks, credit unions, community development finance institutions and public interest saving banks. The common characteristic is the goal of creating value for stakeholders, not just for shareholders, and some exciting and incredibly positive trends emerge. First, a greater focus on the needs of customers, including more competitive products, better service and longer-term lending; secondly, provision for customers who are currently under-served by regular banks; thirdly, a boost to local economic development through lending to small and medium-sized businesses, preventing capital drain from the regions and maintaining branch networks; and finally, a positive impact on financial stability through less volatile returns, high levels of capital, prudent balance sheets and expansion of credit provision after the financial crash.
Jonathan Edwards
To what extent has the hon. Lady been influenced by the system in the US, where there is a strong network of local credit unions, that provide an economic function for the local business community, not merely banking for the poor?
Caroline Lucas
The hon. Gentleman cites one of the few examples in the United States and its economic system that I would want to emulate. Credit unions set an interesting example that we could learn from.
Although I welcome the findings of the Parliamentary Commission on Banking Standards, I worry that the commission was somewhat seduced by the assumption that RBS should be returned to the private sector in one form or another, without a sufficiently full and proper examination of the merits of publicly-owned alternatives. It is important to underline that “publicly-owned” does not mean state-run. The German public saving banks are managed by bankers, not politicians, but they are run to serve the interests of the local economy and of citizens, rather than those of remote shareholders. Managers are held much more accountable for incompetent lending than are private sector managers who drove their businesses to bankruptcy while exploiting their customers with mis-sold products.
It is important to understand also that local stakeholder banks are not unprofessional. The banks studied by the New Economics Foundation make a solid profit to ensure their own viability, and their first priority is always to make sure that the loan is repaid. Because they are not trying to make 22% return on equity, which is RBS’s current profitability on UK retail business, they are quite happy with 8%, so they can afford to meet their social purpose. If the Government are serious about becoming a champion of SMEs and regional prosperity, at the very least they need to look into the pros and cons of a network of regional banks.
What if best value for the British taxpayer is the long-term ownership of a successful bank or banks that support the British economy? An obsession with privatisation on either side of the House should not blind us to that possibility. My amendment simply proposes a full examination of various forms of local stakeholder banks to ensure that we take decisions about the future shape of RBS and our banking sector more widely on the basis of practical economics and evidence, not just ideology.
I support new clause 10 that was tabled by the Labour Opposition. Sub-paragraph (iii) refers to
“the impact of any sale on the creation of a regional banking network.”
What I set out in new clause 15 is exactly the kind of positive impacts that we would want to see. Rather than simply guarding against negative impacts on any regional banking network, I would like to see us actively, explicitly and energetically promoting the alternative of greater local and regional banking. I hope very much that there might be some chance that the Minister will look favourably upon my new clause.
Mark Garnier (Wyre Forest) (Con)
I wish to speak substantially to new clause 14, which stands in the name of my hon. Friend the Member for South Northamptonshire (Andrea Leadsom). She has waged a Boadicea-like war to bring about account portability, and I have been happy to follow that banner—certainly over the past two years—when trying to increase competition. Between the two of us, my hon. Friend has led on account portability, while I have looked closely at barriers to entry and regulation.
I repeat my hon. Friend’s point about how the regulator has given way a bit on regulatory barriers to entry. Although I would not say it has moved substantially, it has made it easier for challenger banks to enter the marketplace. Two or three years ago, any potential challenger coming to the marketplace looked to spend between £300,000 and a potential £25 million just to get to the regulator’s front door and open a formal dialogue to get a banking licence. That is now changing, and the regulator has come up with a new process that makes it a great deal easier. None the less, smaller banks have certain problems due to ongoing expectations that give an advantage to the bigger banks. Those bigger banks have greater granularity with their account holders, and can therefore consider more sophisticated risk-weighting models for their assets. Smaller banks do not have those IT advantages and the cost of their asset book rises with greater capital requirements, which is still a problem.
Before I get to the substantial points, when considering effective competition within the marketplace we must remember the importance of a well-educated consumer. I am pleased that the Government have already responded on that—yesterday the Secretary of State for Education announced the new curriculum, which includes financial literacy, and I pay tribute to his wisdom in realising that that is one of the greatest engines of social mobility. In any sophisticated society such as ours, it is important that those we are educating can deal with the most basic measure of the economy we live in—looking after their own money. That has been achieved through the hard work of organisations such as the Personal Finance Education Group and the all-party group on financial education for young people, and it is a very good thing.
Financial education, understanding and literacy are core to driving competition. It is no good giving people a multiple choice of banks they can use if they do not understand the products being presented. When considering standards within banks, it is important that the marketplace, as well as the regulator, holds those banks’ feet to the fire to ensure they are performing well, providing a good service and delivering trust, which is crucial to restoring a properly functioning banking market in the UK.
On account number portability, in September this year seven-day switching will start. The banks have come to us proudly and said that they have spent £700 million implementing that system, but in essence it is less a switching service and more a redirection service that lasts a year—more of the chewing gum and Sellotape we heard about earlier. The measure of success for the seven-day switching service is expected to be how many people switch, but I do not think it will pass that test because I do not expect many people to switch their accounts. It comes down to the fundamental problem that there are still barriers to entry for new entrants, which leaves a small number of banks in the marketplace. Most people cannot see the difference between one bank and another, and even if they can, they do not necessarily understand what it is. In their mind, the risk of an uncertain future with a different bank far outweighs the benefits of finding a better service and challenging the bank to be more efficient.
The proposals for account number portability in new clause 14, which the Government have already agreed is a good thing, are important and will make it simple for new banks to enter the marketplace and steal market share from existing banks. The provision has the advantage of being pro-competition—we have already heard strong discussions about that—and there are number of other important issues alongside that. First, in this world where we would like a lot more transparency, the new Financial Policy Committee is considering the state of the financial system. That will help it understand what is going on in terms of transparency, and bring the visible part of the system within the auspices of VocaLink. As a result, the FPC will be able to head off any disasters if it sees anything going on.
We also heard that resolution of failing banks is incredibly important. Part of the Bill’s raison d’être, and indeed that of all the work done by Vickers and everyone who has worked on this since the crisis of 2007-08, is to try to ensure that people affected by failing banks do not lose their livelihood or face a financial crisis, so a simple resolution of a failing bank is incredibly important. Under the proposals, although an individual might see on television that there has been a run on their bank and that it is collapsing, the next morning they would simply wake up to discover that their bank account had automatically been transferred to another bank. The systems would continue to work, so their pay would be received on their behalf, their standing orders would still be paid and their house would not be repossessed because they had not paid their mortgage. More importantly, if they do not like the new bank they had been sent to, a couple of days later they could move to a better bank that they felt more comfortable with. Resolution is therefore incredibly important.
The other incredibly important point is that some banks have legacy IT systems that have been around for a huge number of years. Parts of these IT systems can date back to the punch cards of the 1950s and 1960s. In a recent conversation with someone who has done a certain amount of work in one of the larger state-owned banks, I happened to make a throwaway comment about the old IT systems. He responded, “Oh yeah, absolutely.” He explained that he had been looking at some of the software surrounding the small and medium-sized enterprise accounts and had noted that one of the software models had a converter sitting alongside it for converting pounds, shillings and pence into decimals. That must be at least 42 years old, as decimalisation was in 1971.
We know for a fact that there are a lot of old and incompatible systems being held together with string and chewing gum. Andy Haldane at the Bank of England has done a study and estimated that 80% of banks’ IT spend is on holding old systems together. If we take into account the fact that it is timely because at some point all the banks will need to update their systems, and if we consider resolution, transparency and competition, we will come up with a pretty convincing set of arguments that now is as good a time as any to introduce what will amount to fairly substantial IT investment, and there are a number of reasons that come together to make it worth while.
VocaLink, which runs a payments system, has already done a great deal of work on that. I have heard from a number of the larger banks that it could cost £10 billion, but they are dead against any sort of account number portability, so I suspect that it would be a lot cheaper. That is why it is incredibly important that the Government come forward as soon as possible to get the cost-benefit analysis on moving to full account number portability and, importantly, not be distracted by looking at the seven-day switching service in a year’s time.
Mr David Ruffley (Bury St Edmunds) (Con)
I congratulate my hon. Friend, and I congratulate my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) on introducing new clause 14, which I call the Leadsom clause. Before concluding will my hon. Friend share with us the work he has done in speaking over the past two years to potential new entrants, new challenger banks, that have said that they would consider entering the market if bank account number portability came to pass?
Mark Garnier
Yes, without a shadow of a doubt. A great many of the smaller banks that are looking to enter the marketplace have to use a piggyback system with the big clearers. For example, C. Hoare & Co., which has been around for 341 years and is still a private bank, uses RBS for its clearing. To that extent, the larger banks are providing a service, but ultimately it is causing a great problem for them. Over the past two years I have met about 20 potential challengers looking to enter the marketplace, and certainly it is largely the regulatory barriers to entry that have caused the problem.
Ultimately, the challenger banks are going to be running current accounts. Some of the larger ones, such as Metro Bank and Virgin Money, are 100% behind having full account number portability and recognise—I think that this is one tribute to them—not only that that will be an opportunity for them to attract accounts from existing banks, but that they will have to work incredibly hard to meet the challenge of a more sophisticated consumer in order to keep those accounts once they have them. That is crucial to one of the key points of the Parliamentary Commission’s report, which is the need to ensure that we drive better standards.
I return to the fundamental point that the best way to drive better standards is to have a very discerning and demanding consumer in order to ensure that those banks provide a service, and for that discerning consumer, once we have taught them how to do it, to hold the banks’ feet to the fire, so they need to be able to move their account very simply and overnight.
Mr McFadden
I want to make a few points about new clauses 10, 12 and 14.
New clause 10 deals with securing the best interests of the taxpayer as regards the state-owned banks and their future. If the best interests of the taxpayer were in the Government’s mind in recent weeks in their stewardship of RBS, that has been shown in a very peculiar way. This story does not begin with the departure of the chief executive. It begins before that with a briefing from the Minister’s Department about the share price in which it said that the previous Government had overpaid for the shares, and the briefing tried to set the scene for a pre-election fire sale of the bank that would have short-changed the taxpayer. I am glad to say that despite that briefing, the Government seem to be edging away from that strategy. If they were holding out hope that the banking commission would have given them comfort on that front, it did not turn out like that, and rightly so, because it would have been wrong to give a running commentary on the share price for an institution. An institution’s share price should be determined by the market, based on its future prospects.
After the briefing, we then had the unseemly departure of the chief executive at the Government’s hands. Most people saw him as doing a good job of reducing the risks on the bank’s grossly overblown balance sheet and trying to get it back into a healthier position, in the best interests of the taxpayer. Not only was he bundled out before he had completed that task, but this was done without any proper succession plan being put in place. Over the period of a month, we have had political briefing about the bank’s share price and the announced departure of the chief executive with no successor in place, and, as a result, a loss of investor confidence in the Government’s future strategy for the bank. That is no way to exercise stewardship of arguably one of the most important banks in the country. It has undermined the Government’s reputation as regards these state-owned assets and done harm and damage to the bank. I hope that in future the best interests of, and best value for, the taxpayer will be uppermost in the Minister’s mind rather than the politically motivated dabbling that we have seen in recent weeks.
On a happier and more bipartisan note, I turn to the new clause tabled by the hon. Member for South Northamptonshire (Andrea Leadsom) and the very similar new clause tabled by my hon. Friend the Member for Nottingham East (Chris Leslie). At the heart of this is how much banks care about reputational loss; the hon. Lady referred to that. If the banks were in a normal business environment and there were a big IT failure or another failure of conduct such as mis-selling or LIBOR interest rate fixing, they would care because they would worry that their customers would walk, but they are not in a normal business environment. Banks seem to be immune to, and careless about, reputational damage that would really matter in another business environment.
During the banking commission’s deliberations, a parallel was drawn with the car industry. When a fault appears in a model of one of the big-brand car makers, they will very quickly issue a recall notice to ask the customer to come in and have the fault fixed at no expense and at a time that is convenient to them. Car companies do that because they care about their reputation and want that customer to buy a car from them the next time they get one. The same logic does not apply in banking, because the same forces of easy departure do not apply. There are two sides to this story. It is not all about the easy transfer of accounts, although that is important; it is also about what one would be transferring to and from. There is little point in creating a perfect exit system if the choice is merely between three or four offers that are all much the same anyway. There is inertia on both sides. We need more competition among the banks as well as an easier system of transferring accounts.
The seven-day switching process that will come into play in September is an advance, and it should be given a chance to work; we should test it properly. At the same time, the new clauses tabled by the hon. Member for South Northamptonshire and by my hon. Friend the Member for Nottingham East call for proper reports to be produced on full account portability. The hon. Lady set out very well the reasons why we need a proper report, one of which is the issue of cost. The incumbents say, typically, that this will cost a fortune and that it will have to be passed on to the consumer, so let us explore the cost properly and get to the bottom of whether that argument is valid.
Andrea Leadsom
The right hon. Gentleman may recall a meeting we had with senior bankers in which they said that, although they were reluctant about bank account number portability, if it is going to happen let us make sure that we will be the first country in the world to do it and not wait until somebody else does it. That would give us first-mover advantage and it could provide a huge business opportunity for UK plc. What does the right hon. Gentleman think of that idea?
Mr McFadden
The hon. Lady may be right and that is another reason that we should have a proper report to drill into the issue.
On privacy, in addition to the cost argument I think that customers could also be discouraged by the argument that all their account details could be held in a single black box to which all the banks in the country have access.
Mark Garnier
The right hon. Gentleman raises an incredibly important point. I think that the vast majority of consumers would be very fearful of a central database holding their bank details. The beauty of the system proposed by VocaLink is that, although the payment system and the central infrastructure will hold the sort code and account number, the identity of the holder of the account number will be held by the bank. Therefore, the customer’s relationship will be with the bank, not with the payment system.
Mr McFadden
I thank the hon. Gentleman for making that important point. If consumers are going to have confidence in a system of speedy switching such as that being advocated by the hon. Members for South Northamptonshire and for Wyre Forest (Mark Garnier), these questions about privacy and security of information will have to be bottomed out to the public’s satisfaction. My view is that that will be a more important argument than the one about the cost to the banks of whatever IT changes will be necessary to put this system in place.
In conclusion, it is important that we give the seven-day switching service a chance to operate, but the report that the hon. Member for South Northamptonshire and my hon. Friend the Member for Nottingham East are asking for is also important, because it would bottom out theses issues and others that I have not mentioned. It is a shame that the hon. Lady does not intend to put her new clause to the vote. After all, it only asks for a report; it does not seek to mandate a change before we have done the work and got the proper evidence. I hope that the Minister will respond positively to her suggestion and that of my hon. Friend. It is really important that there is proper competition between providers in this sector to attract consumers and that the kinds of free choices that enable consumers to walk away and get another product from another provider are available in practice, not just in theory.
John Thurso
I also rise to support new clause 14 tabled by my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) and to which I have added my name.
The right hon. Member for Wolverhampton South East (Mr McFadden) chaired a panel of the banking commission and one of the first visits we undertook was to Birmingham, where we had a number of sessions, one of which was with representatives from small and medium-sized enterprises who were very vocal about the importance of securing a fair deal from the banks.
Which? organised an evening session that allowed us to visit different tables where individuals talked about their experiences. I had an interesting experience when I asked a table of people of a variety of ages, although mostly younger than me—not that that is difficult—about the ability to switch bank accounts. They were not really that keen and said, “It’s too much hassle. Why bother? It won’t be any different.” I said, “Suppose you could do it in the same way that you change your mobile phone, where you take your SIM card-equivalent and plug it into another machine.” At that point they all said, “Oh, that would be wonderful. What a good idea. Is it possible?” I said, “Not yet, but it is very likely to happen.” They said, “Actually, even that won’t work because it will just be the same old names that I will be going to.” I said, “How would you feel if the chap who has that nice transatlantic airline had a bank?” They said, “Oh yes, that would be jolly good.” That bunch of average customers had no idea that it might be possible to move accounts and no idea of the array of accounts that might be available as a result.
That experience drove home to me that the relationship between banks and their customers has been the reverse of what it should be. We go cap in hand and say, “Will you please take my account?” It ought to be the other way around. The banks should be coming cap in hand to us saying, “Please can I have your business?” New clause 14 goes to the heart of that dilemma. All right hon. and hon. Members who have spoken have made the point that the new clause is not a silver bullet and that many other measures are required, but it would be one of the key enablers of that change in the relationship, along with the payments regulator and other things that might be done. Ultimately, we need banks to be genuinely fearful of losing business—at the moment they are not, because they know that people cannot go anywhere else —and genuinely to want to win business. The commission has made progress on that and new clause 14 is very much a part of that.
I am sorry that my hon. Friend the Member for South Northamptonshire told us early on that she will not press her new clause to a vote. I always find that Ministers go a bit further if one waits until they have said nice things before telling them that. Clearly, she has had a tremendous impact on the Minister ahead of the debate. I look forward to hearing what he has to say.
John Thurso
I was going to say something about “A Tale of Two Cities”, but I will leave it at my hon. Friend’s great expectations.
John Thurso
Yes, something like that.
I am very tempted by new clauses 8 and 10, which were tabled by the Opposition. I will not vote against them, but I will not vote for them at this stage. There is an immense amount in them, but I will wait to hear what the Minister says. There is also a great deal of debate to come in the other place. I do not want to say that I am against the new clauses, but I am not sure that the wording is exactly what I would like to have seen. I ask for the forgiveness of the hon. Member for Nottingham East (Chris Leslie) on that.
On new clause 10, there was a lot of debate in the commission about the good bank/bad bank split. We ended up with a central point that we all agreed to, but a number of us wanted to go more in one direction. However, whether a good bank/bad bank split is a good idea is a completely different issue from what should be done afterwards. If one takes the view that a good bank/bad bank split is not needed, one can still consider all the points that have been put forward, including the many things the hon. Member for Brighton, Pavilion (Caroline Lucas) said could be done to enhance regional banking and credit unions. All those things are equally possible whether or not one decides that the bad bank is necessary.
To my mind the good bank/bad bank argument is separate to what one does with a bank going forward. I happen to be somebody who believes that a good bank/bad bank split is right for the simple reason that if we take the flakier assets out of the bank and put them in a run-off bank, therefore liberating the capital being used in the balance sheet to support it, capital is then available in the good bank to be lent to SMEs and individuals. It is a simple mechanism for getting more capital flowing through, but I would make the point that it is not inextricably linked.
Following on from the slightly more partisan comments from the right hon. Member for Wolverhampton South East, one thing that comes out of this process, and which I have observed right the way through it, is that United Kingdom Financial Investments Ltd has not been the most successful of bodies. We have seen that there are politics in such situations, and that trying to put a mechanism in between muddies the water. That is one of the reasons why the commission’s report made its suggestions on UKFI.
Finally, the commission very much supports new clause 8. As I said in my intervention, I do not think this matter needs legislation. What I would be looking for from the Minister is a commitment that does not require me to look carefully between the lines, but is, in fact, a further commitment.
Greg Clark
This has been an interesting debate so far, and it will be a tall order to live up to the great expectations of my hon. Friends the Members for South Northamptonshire (Andrea Leadsom) and for Caithness, Sutherland and Easter Ross (John Thurso).
This set of new clauses has the common denominator of measures that can improve competition in banking. The parliamentary commission has made it clear that competition can, and should, bring about higher standards in the banking sector. It concluded that
“effective market discipline, geared to the needs of consumers, can be a better mechanism for improving standards and preventing consumer detriment than regulation, which risks ever more detailed product prescription.”
The Government completely agree. The British banking industry, at least at the retail level, was too concentrated before the crisis. The forced mergers of the crisis have exacerbated a bad situation. It is imperative that the regulators do not regard themselves simply as regulating incumbents, but act to promote new entry into the industry.
The commission welcomed the prudential reforms contained in the then Financial Services Authority’s barriers to entry review and commented that
“the concerns of challenger banks in this area appear to have largely been addressed”.
We accept the need to go further. Accordingly, we will be adopting the commission’s recommendation that the Prudential Regulation Authority should be given a secondary competition objective, and we will table amendments to the Bill to that effect in the autumn.
Greg Clark
I am grateful for my hon. Friend’s contribution.
Government amendment 5 delivers on a commitment made in Committee to accept one of the commission’s earlier conclusions that when considering an exemption from ring-fencing the Government must have regard to any adverse effect ring-fencing provisions might have on competition in the market. The amendment ensures that ring-fencing should not be a barrier to greater competition in the market. To reassure the hon. Member for Nottingham East (Chris Leslie), it does require them to override any questions on whether the continuity objective should be breached. It is there to enable them to bear that in mind, not least for the reasons that we discussed—that competition can have systemic benefits that address some of the regulator’s objectives.
Another recommendation of the commission that we accept is the suggestion that there should be a rigorous study conducted on the benefits to consumers, and competition, of account portability. The House will know that from September the seven-day switching service operated by banks covering 99% of personal current accounts in the UK will come into operation. I do not whether hon. Members have noticed, but there is an excellent exhibition to promote the new changes to the service from September in the Upper Waiting Hall next to the Committee Corridor. It should make it easier, quicker and more secure to change bank account, helping competition, but, as my hon. Friends the Members for South Northamptonshire, for Wyre Forest (Mark Garnier) and for Caithness, Sutherland and Easter Ross said, that might not go far enough. In particular, I congratulate my hon. Friend the Member for South Northamptonshire on the consistent and forensic campaign she has waged on this issue through the Treasury Select Committee and beyond. We will therefore ask the new payments systems regulator to conduct a comprehensive review of account portability, including a cost-benefit analysis, as an immediate priority.
Mr Love
Given that the new payments regulator will take some time to set up, I hope that the Minister will keep a watching brief on seven-day portability, because there is still some controversy over the proportion of fees for the receiving bank as opposed to the bank losing the customer. This was brought to the commission’s attention; we commented on it, and I hope that he will keep it under review.
Greg Clark
I certainly will keep a close eye on that, as too, I am absolutely certain, will my hon. Friend the Member for South Northamptonshire. The arrangement is that the fees should be shared between the bank of departure and the bank of arrival, which I dare say reflects the different costs. However, we need to keep an eye on its effect on competition.
In response to the parliamentary commission’s report, the Office of Fair Trading has announced that it will bring forward its investigation into small and medium-sized enterprise banking as part of an ongoing programme of work to investigate concerns about competition in banking. The hon. Member for Nottingham East rightly wants this to go further. The OFT is engaged in a programme of work looking at all sections of the banking sector. As I think Members know, it has recently completed an investigation into the personal current account market, and on that narrow point has argued that there should not be an immediate referral pending some of the changes taking place or in the pipeline.
We have asked that that work considers the impact on the new challenger banks created by the divestments from Lloyds and RBS. The hon. Gentleman asked where they stand. My understanding is that in both cases the parent banks are looking to move forward with initial public offerings of the challenger banks and that they intend them to form part of the competitive environment. The OFT aims to conclude its programme of work next year. It will then decide whether a market referral to the Competition Commission is needed. I can tell my hon. Friend the Member for Caithness, Sutherland and Easter Ross that such a referral would not require legislation; the OFT could make one under its existing powers.
Given that commitment, which is more or less of the same time frame as that envisaged in new clause 8, and given the significant measures being implemented to enhance competition, I hope that hon. Members will agree that the new clause, which calls for such a referral in 2014, following Royal Assent, should not be adopted. It is important that the OFT completes its review in 2014, so that it can build up a file of evidence to be submitted to the Competition Commission. That would be consistent with what both the independent commission and the parliamentary commission called for: that the OFT be in a position to make a referral in 2015. The OFT’s work is absolutely in line with that.
Greg Clark
That is happening. The review that the OFT is carrying out is comprehensive—it will keep us informed in that process—and is about building up the evidence to make that judgment in accordance with exactly the time frame that my hon. Friend has set out.
New clause 15, standing in the name of the hon. Member for Brighton, Pavilion (Caroline Lucas), would require the Government to consult formally on the creation of a network of regional banks. I strongly agree that a revival of regional banking in this country is a very good thing. Yesterday in the Chamber my hon. Friend the Member for Hexham (Guy Opperman) reported on a meeting that he organised in Gateshead. I am pleased to tell the hon. Lady that a senior director of the Sparkassen, Dr Thomas Keidel, was at that meeting. He very much commended the Sparkassen model in Germany as something that could be emulated in this country. In fact, when one of the delegates objected that it was very much part of the German system and culture, which might be difficult to transplant to this country, Dr Keidel immediately pointed out that the German system was explicitly modelled on the UK system before it was abandoned in this country. I am therefore optimistic that what is proposed should be possible.
There was certainly great enthusiasm on Tyneside—indeed, momentum was being established—for launching a regional bank for the north-east. The hon. Lady might also be aware that the Cambridge and Counties bank—a joint venture between Cambridge county council and Trinity Hall, the Cambridge college—is already active and is providing lending to local small and medium-sized enterprises. The steps that the Prudential Regulation Authority has taken to license new entrants—
Mr Love
I apologise to the right hon. Gentleman for jumping in rather late, but before he leaves the issue of regional banks I want to mention one of the most promising areas, which is community development institutions. They are working at the regional and local level; however, their sources of funding could be enhanced immeasurably if community interest tax relief was set at a proper rate. I recognise that the Treasury has carried out a consultation. I am not asking the Minister to respond now, but perhaps he will at some stage inform Members of where the Treasury has got with that consultation and whether it will review the incidence of community interest tax relief.
Greg Clark
I do not know whether the hon. Gentleman will be reassured or alarmed to learn that I had not left the subject of regional banking just yet. Indeed, I want to come to the precise subject he has just raised.
The Prudential Regulation Authority’s changed procedures were referred to—by, I think, my hon. Friend the Member for Wyre Forest. It is now possible to license new entrants, who could require up to 80% less capital up front than previously. That means that the time is now ripe for new banks in the regions to be established. The hon. Member for Brighton, Pavilion, in her new clause 15, and the hon. Member for Edmonton (Mr Love) refer to CDFIs—community development finance institutions. Some £60 million of wholesale funding for CDFIs is available through the regional growth fund. Tax relief up to 25% is already available on investments made by individuals and companies into CDFIs. Of course I will talk to my hon. Friend the Exchequer Secretary and carry forward the hon. Gentleman’s representation for further changes, but a significant set of advantages is available. Similarly, the more flexible rules for credit unions that have been introduced and the £38 million of funding for this movement have also created greater opportunities.
Caroline Lucas
Does the Minister accept that constraints on the amounts that larger credit unions—such as the East Sussex Credit Union, which I know well—are allowed to accept in deposits or are allowed to lend are stopping them fulfilling their potential? Will he look at that again?
Greg Clark
I am happy to take that forward. The hon. Lady will be aware that we have liberalised the rules for credit unions, but if problems are being caused, not least in East Sussex, I would be happy if she dropped me a line or came to see me.
We have great enthusiasm for the proposals that the hon. Lady makes, but what is required is not a study, but action. I make this commitment to her, and to any hon. Member who is interested in helping to establish a new regional bank in their area, that I will help them to do so. I hope that they will allow me to do that.
New clause 10 would require the Government to lay a report before Parliament before selling any banking assets. All hon. Members are aware of what the Chancellor said in his Mansion House speech about the next steps for Lloyds and RBS. For Lloyds, the Government are actively considering the options for how its shareholding can be returned to the private sector. Value for money for the taxpayer will be the overriding consideration, and there is no pre-determined time scale. Indeed, the disposal process may involve multiple stages over time, rather than a single moment.
For RBS, share sales are some way off. In line with the recommendation of the Parliamentary Commission on Banking Standards, the Chancellor has announced a review, to conclude in the autumn, into whether a bad bank should be set up for risky assets from RBS. Following the criteria suggested in the commission’s report, the review will assess whether creating a bad bank would accelerate the path back to private ownership, deliver benefits for the wider economy and be in the interest of taxpayers.
As I have mentioned, the OFT is looking specifically at the impact that new challenger banks created by the Lloyds and RBS divestments will have on competition in small business banking. UK Financial Investments has a remit to provide value for money in executing its requirement to devise the means of selling the Government’s shareholdings in the banks, and, in doing so, to pay due regard to maintaining financial stability and to act in a way that promotes competition. In doing so, UKFI and the Treasury must follow the value-for-money principles set out in the Green Book, and they will be accountable, through the Accounting Officer, to the National Audit Office and the Public Accounts Committee, as well as to the House and the Treasury Select Committee.
Chris Leslie
The Minister is talking about the edifice of propriety, in relation to UKFI and so forth, but it is as plain as day that the Chancellor made the decision that he did not want that particular chief executive of RBS, so out went Stephen Hester. Will the Minister at least put on record what the plan is for settling the future leadership of RBS? When will the new chief executive be appointed?
Greg Clark
The hon. Gentleman knows full well that that is a matter for the board of RBS, not for the Government.
Returning to new clause 10, it is not clear that a new mandatory reporting requirement would add anything to the arrangements that are already in place. In the previous regulatory regime, promoting competition did not play a prominent enough role in ensuring that the banking industry operated in the interests of consumers. The strengthening of the role of competition through the reforms in the Bill will go a long way towards correcting that. The further recommendations of the PCBS underline the role of competition more prominently still, and I thank the commission for its contribution in that regard.
I should also mention new clause 1, which introduces a new schedule of amendments to correct a series of minor and technical points in connection with the Financial Services Act 2012. I was asked some questions about this earlier. It refers to the complaints scheme covering the Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England. The scope of the complaints scheme in relation to the PRA and the FCA was widened to cover all their functions under any legislation, and the current scope includes functions such as those relating to the Data Protection Act and the Freedom of Information Act, which already have their own complaints mechanisms. The new clause will correct that.
I hope that the House will accept that the Parliamentary Commission on Banking Standards and the Government are as one in their intention of promoting competition. We totally agree that placing a high value on competition in pursuing all our objectives for the banking sector in order to make it more competitive, more responsive to the needs of consumers and more resilient is very much in the interests of the country.
Chris Leslie
We have had a long, well-informed debate, and I pay tribute to Members on both sides of the House, particularly the members of the Parliamentary Commission on Banking Standards, for their contributions. I am disappointed, however, that the Government are still saying simply that they will think about these things and look into them. The Bill will leave this House in the same thin state in which it arrived. In protecting taxpayers’ best interests, it should not be viewed as asking for the moon on a stick to request a proper report and an options appraisal of what to do with state-owned assets. It is very important that, at the very least, we have a thorough appraisal.
“In subsection (2), for “PRA” substitute “Bank of England”.” |
Michael Fabricant (Lichfield) (Con)
On a point of order, Mr Deputy Speaker. In the light of the fact that the International Monetary Fund has upgraded the United Kingdom’s projection for growth, and that the European zone’s projection has been downgraded, I wonder whether you have been given any indication whether the Chancellor of the Exchequer will be making a statement, as I, for one, would like to congratulate him.
Mr Deputy Speaker (Mr Lindsay Hoyle)
On the last part of the hon. Gentleman’s question, I think that he has already achieved what he wants. The answer to the first part of his question is no.
Third Reading
Greg Clark
I beg to move, That the Bill be now read the Third time.
It is good to start the debate with good news. When one is considering a Bill, one is cut off from the outside world, so that is good to hear.
I said on Second Reading that this is a historic Bill that resets the banking system in this country, so that it can once again enjoy the reputation that it had, and its worldwide renown, not just for technical excellence but for high standards of confidence, built on probity.
The Bill is historic in another important respect. It reflects the extensive deliberations and contributions of not one but two bodies of eminent experts: the Independent Commission on Banking, chaired by Sir John Vickers, and the Parliamentary Commission on Banking Standards, chaired by my hon. Friend the Member for Chichester (Mr Tyrie). Both undertook extensive work, and I am grateful to their members, and to the staff who supported them in their work.
Sir John Vickers’s commission was established immediately after the general election, in June 2010. It took extensive evidence before publishing an issues paper in September 2010; an interim report, on which it consulted in April 2011; and a final report in September 2011. The Government gave, and consulted on, an initial response in December 2011, before issuing a White Paper for consultation in June 2012. In the light of that consultation, a draft Bill was published last October, and the Parliamentary Commission was asked to give it pre-legislative scrutiny, which it did, and it concluded its report on 21 December last year.
Following Second Reading, the Committee scrutinised the Bill for more than 40 hours. The process has been characterised by an unusually determined effort to build consensus. Having considered all the options, the Vickers commission made a compelling case for a ring fence separating the riskier investment banking side of banks from personal and business lending. Ring-fencing, an ICB argument, will better insulate retail banks against global shocks and make banks easier to resolve in a crisis. It will thus create a more stable banking system, protecting the economy and the taxpayer against future crisis.
The parliamentary commission, in its first report, recommended some changes to the Bill, which we have been able to make, such as emphasising the importance of competition, as we have just debated, in applying the ring-fencing rules. The commission noted that in putting the so-called Haldane principles on the face of the Bill, the Government went further than its own recommendations. The parliamentary commission, in its December report, also called for the power to be available to force the separation of a ring-fenced bank into its component parts if that bank attempted to game the system or to undermine the ring fence. The so-called electrification of the ring fence is designed to ensure that it is respected in practice.
We debated yesterday the Government’s amendment to implement this power. There was some discussion about whether the power to require separation was too cumbersome to be used effectively in practice. As I said yesterday, there is no difference between the Government’s intentions and those of the parliamentary commission. We agree with the specific reserve power and it has to be usable. We included a time limit by which full separation had to be executed. The PCBS did not specify this, but my hon. Friend the Member for Chichester said that it should be informed by the regulator. That seems right to me and I have no difficulty in expecting to be able to arrive at a formulation that meets all the Chairman’s objectives during the further scrutiny of the Bill in this place.
Mr Tyrie
I am very reassured by what I have heard from the Minister. It seems from what he said that it remains the Government’s firm intention to implement the spirit and the letter of electrification for individual banks. It also gives me some reassurance that the commitments that appear to have been made in the paper published yesterday on the recommendations in the fifth report will also be implemented. Can the Minister give some indication when he will produce amendments, so that we have enough time to think about them before they are examined in another place and so that their lordships also have enough time to consider them carefully?
Greg Clark
I am grateful to my hon. Friend for his remarks. He is right that we are of one mind on the need to implement faithfully the commitments that we have given. The amendments need to be drafted in a way that is legally watertight, which takes some time. They will be prepared during the summer—the summer holiday will be out of bounds for the officials on the Bill team, sad to say—and they will be introduced in the autumn in the House of Lords.
As well as pre-legislative scrutiny of the Bill, the parliamentary commission’s final report made a series of recommendations concerning standards and culture in banking. As I indicated on Second Reading, in Committee and yesterday, the Government will make use of the Bill and the amendments to give expression to many of the recommendations that require legislation. I gave a commitment to work with the usual channels to ensure that this House has ample opportunity to debate the amendments when they come back for further scrutiny by this House.
Greg Clark
My hon. Friend is nothing if not tenacious as well as ingenious, and his hearing is acute. He will have heard me say that I will work with the usual channels, so the time for consideration will depend on the outcome of those discussions.
The implementation of the commission’s recommendations on culture and standards represents the third pillar of the reforms being made to the banking system. The first pillar was the institutional changes brought about by the Financial Services Act 2012, which received Royal Assent last December. That Act scrapped the failed tripartite system of regulation which, in the words of the parliamentary commission,
“created a largely illusory impression of regulatory control”.
In its place, that Act restored the Bank of England to its rightful place by ensuring, through the Financial Policy Committee and the Prudential Regulation Authority, the stability of the financial system. It established new forward-looking, rather than box-ticking, conduct regulation in the Financial Conduct Authority.
The second pillar of reform is embodied in the ring-fencing provisions advanced by Sir John Vickers and his committee, which are the main focus of the Bill under consideration. The reforms by the Parliamentary Commission on Banking Standards that deal with culture and standards represent the third pillar, and will play a major part in the passage of the Bill.
Having thanked members and staff of the Independent Commission on Banking and the Parliamentary Commission on Banking Standards for their hard work and the exacting standards they set for themselves, I extend my thanks to all those who have participated in the drafting and scrutiny of the Bill so far. First, I thank my Parliamentary Private Secretary, my hon. Friend the Member for Warrington South (David Mowat). Not only has he been assiduous in his more mundane duties of passing notes to and fro, but he has been an invaluable source of wise advice, drawing on a successful career in business. I discovered that he has an ability to see quickly through complexity and get to the heart of the matter—something much needed in matters of financial regulation.
I thank my officials for their efforts and the long hours spent drafting the Bill and Government amendments, as well as briefings for the many clauses we have debated. I hope that the seriousness of this legislation will assuage the loss of weekends and evenings spent with their nearest and dearest, although I hope they were at least able to see Andy Murray play—and indeed win—on Sunday, notwithstanding the timetabling of Report and Third Reading.
I thank those in my private office for their patience and cheerfulness in marshalling the many demands on their skills and expertise, and I am grateful to members of the Bill Committee, and its Chair and Clerks, for the hours we spent in each other’s company during spring. At one point I worked out that I had spent more time that month with the hon. Member for Nottingham East (Chris Leslie) than with my wife, although I hope he will agree that it was not an altogether unpleasant experience.
We had a lively and unusual Bill Committee in which my hon. Friend the Member for Amber Valley (Nigel Mills) went further than the electrification proposed by the Parliamentary Commission on Banking Standards, and demanded the “electrocution” of miscreant bankers. My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), whom I am delighted to see in his place, was revealed to have a secret life on Twitter, which I hope continues to flourish. I was also able to concede an historic Opposition amendment, given the charming entreaties from the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson), even if it was only a single word. All that was done under the beady eye of the Treasury Whip, my hon. Friend the Member for Chelsea and Fulham (Greg Hands), who kept us rigorously to time—indeed, I think we finished a day earlier than was allowed for in the programme motion. Given that the Bill will return and we will have much to discuss, it is not so much goodbye to the Bill on Third Reading as au revoir—or, as I am sure my hon. Friend the Member for North East Somerset would put it, “Hasta la vista, baby.”
Ours is not the only country in which trust in banking collapsed during the financial crisis, but the fact that scandals and bail-outs happened elsewhere is of no comfort. In a world where trust is in retreat, this country must be a beacon of confidence, security and stability, but that will not happen unless we insist on higher standards than apply elsewhere. The overwhelming and urgent imperative is to rebuild that trust. The reforms enacted so far take us a long way, and further than our competitors. The Bill will take us further forward and make the reform necessary to restore the reputation—and with it the prosperity—of banking in the United Kingdom. I commend the Bill to the House.
Chris Leslie
After that tour of various languages, all of which I am sure were in order as Norman French is the only language to be used in the Chamber other than English, I join the Minister in paying tribute to the Independent Commission on Banking. Sir John Vickers and his team did a phenomenal job, which was only a prelude to the output of the Parliamentary Commission on Banking Standards, chaired by the hon. Member for Chichester (Mr Tyrie). Given that its final report was larger than a ream of A4 paper, which represented months or work, weeks of deliberations and many hours of hearings, I think that it is to its credit, and the hon. Gentleman’s in particular, that it managed to hold together a set of recommendations, which I hope at some point will find their way into the legislation.
After the global financial crisis, when we saw reckless banking require such a vast taxpayer bail-out, the public finances were adversely affected and the economy suffered. It is therefore essential that we do our best to ensure that that situation can never again be repeated. However, all we have in the legislation so far are the ring-fencing provisions. I hope that they will be an adequate protection, but they are only part of the change we need to see in banking.
We were forced to table a series of amendments in Committee and on Report because the Government stepped away from the radical changes needed to make banking reform a reality. We hope that the Minister’s warm words will be manifest in the Bill in the other place, where we will be watching what happens very closely. We will need adequate time to consider Lords amendments when the Bill returns to this House, because to provide for only a few hours for that would show disrespect to the rightful and democratic primacy of this House.
The Treasury’s response to the commission’s report was published only three or four hours before we started considering the Bill on Report. I must say that it left a great deal to be desired. It did not have the strength needed to carry on the work of the commission’s recommendations. If we needed any more evidence that the Government have been soft-pedalling on these issues, we need only look at how bank shares responded immediately after the response was published yesterday. They hardly gave the impression that the banks face strong challenges as a result of the reforms. Despite the Prime Minister’s promise to use the Bill to implement key aspects of the commission’s report, particularly with regard to criminal sanctions, so far nothing has materialised. We must hold our breath and hope that they will eventually find their way into the Bill in the other place.
It is a shame that the Government did not use this time in the House of Commons to take some proper steps forward, because ultimately if we are to have dialogue in Parliament it is necessary to start putting some flesh on the bones and including legislative provisions in the Bill, rather than leaving it to the Government as a matter of trust. That is the only way we ever really improve the quality and calibre of legislation.
There are a number of things that the Government have not agreed to do or have refused to act on so far. They have not risen to the challenge on the leverage ratio to drive the reforms that are needed from a UK perspective. Instead, they want to wait for international and European Union agreement to resolve the issue. They have fallen short of what is required for proper electrification of the ring fence separating retail and investment banking activities. That should have been backed up with a reserve power for full separation of the sector as a whole if ring-fencing proves ineffective. We hope that it will be effective, but the jury is out on that.
We think that the Government should have considered options, particularly in the sale of any state-owned assets in the main banks—RBS, in particular—to look not only at a split between good banks and bad banks, but at whether there is a case for changes in retail and investment banking or in relation to regional banking, but they rejected that. They have not gone for reform of the governance of the Bank of England to turn the court into a proper board, with the accountability needed to go alongside that when it comes to sounding the alarm on bank lobbying. We hope that the Minister will follow that up when the Bill comes before the House of Lords. There is not yet sufficient clarity on how the banking standards rules will relate to the codes of conduct or culture changes that we need in the sector. As we saw from an earlier Division, the Bill also falls short of the market study of competition in the sector, particularly as regards the retail banking activities that so many of our constituents feel frustrated about.
We tried our best to table as many amendments as we could. The Government should have listened and taken the opportunity to engage in that legislative process more effectively. We now have to find reforms to the banking system that not only focus on safety and the best interests of consumers and taxpayers but do the right thing for the economy. In our discussions on leverage and other aspects, we tried our best to make the case for a number of changes that might have got the banking sector serving the economy, going full steam ahead and giving credit support, particularly to small and medium-sized enterprises.
It is clear that this Bill is still in its infancy despite having completed half its parliamentary stages. It is acceptable as far as it goes, with its baby steps on reform, and we therefore do not seek to oppose its Third Reading. However, the Government now need to get serious. They must bolster the Bill to electrify the ring fence and ensure that it will work; stand up for consumers, with proper changes to promote choice and competition and protect those consumers from being ripped off; secure the best interests of the taxpayer; and ensure that we never again see such a level of damage inflicted on public finances and our economy. Far more is needed. The Government should be listening much more carefully to the parliamentary commission, in particular. They have to do far better than this.
Guy Opperman (Hexham) (Con)
After the global banking crash, my constituents in Northumberland wanted to see better banking, higher standards, fewer scandals, greater competition and a greater degree of choice and service. In the past three years, this Government have been on a slow but continual journey to reinvigorate British banking and clear up the mess that we inherited.
I believe that over the next couple of years smaller regional banks will spring up throughout this great country, and I want briefly to address the House on that matter. Paragraph 49 of the banking commission’s main summary gives an excellent summation of its views on competition in retail banking. I refer anybody interested in this to the grave and weighty paragraphs 313 to 343 of the larger volume, where they will see, in particular, the evidence of Anthony Thomson, the co-founder of Metro Bank, with whom I have worked at great length over the past two years to try to reinvigorate the regional banking market.
That culminated in a series of efforts that have been made with the various regulatory authorities, starting with meetings that my hon. Friend the Member for Chichester (Mr Tyrie) and I had in February 2012 with Mr Hector Sants, the then chief executive of the Financial Services Authority. Mr Sants followed that up by writing on 12 March 2012:
“We are conscious of the balance to be struck between ensuring high standards at the gateway, and the importance of allowing innovation and appropriate levels of access for new firms…there has been public debate about the potential advantages of new entrants in the area of small, regional banks focused on servicing the SME sector. In such cases we will be proportionate in our approach and would invite all firms with a viable business model and appropriate levels of resources to a pre-application meeting to help guide them through the application process”.
Those were wise words and a significant step by the then chief exec of the FSA.
Then came the Bill that became the Financial Services Act 2012, which, I am pleased to say, passed its Second Reading in this House on 23 April 2012. To my surprise, the Labour party voted against clause 5, which specifically emphasised
“the ease with which new entrants can enter the market, and…how far competition is encouraging innovation.”
Be that as it may, the banking commission and other parties hugely improved the approach to regional banking. I support the efforts of everyone involved and echo the words of the Minister and the shadow Minister.
Following a huge amount of effort outside this House to encourage regional banking, Mr Thomson and I held a conference in Gateshead on 7 June that was attended by 142 delegates, including the Minister. More important, however—this is of key relevance to the banking commission’s findings—Sam Woods, the director of the domestic UK banks division at the Prudential Regulation Authority, and Victoria Raffe, the director of authorisations at the Financial Conduct Authority, were also in attendance on that day. Those two people are in effect the gatekeepers of regional banking and of the authorisations and regulation that lie ahead. They were welcome and made the case that regional banks are the way ahead.
I for one expect at least three or four banks to spring up in the north-east over the next 12 to 18 months, ranging from asset-backed lenders such as Cambridge & Counties bank—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I know that the hon. Gentleman is going to draw his speech into the Third Reading, because this is the Third Reading debate. The two must come together and it would be helpful if that happened sooner rather than later.
Guy Opperman
I will totally draw it into Third Reading, Mr Deputy Speaker. Those particular persons are very much affected and are working hand in glove with the Bill, which I support wholeheartedly.
Mr McFadden
This is an unusual Bill, in that at the same time that it has sought to implement a reform recommended by the Vickers commission two years ago, it has run in parallel with the Parliamentary Commission on Banking Standards, which periodically has produced reports and asked the Government to use the Bill to implement their findings.
I place on record my thanks to colleagues who served on the commission and all its staff. It was an intense effort and I do not think we could have produced our reports without the able efforts of the many staff who worked for us, led by Colin Lee, who is a great servant of this House.
I want to draw the Minister’s attention back to yesterday’s official response from the Government to the commission’s report of a few weeks ago. We read in yesterday’s newspapers that the Government were going to accept the vast bulk of the recommendations and the Minister opened the debate by saying something very similar. However, I have looked through the Government document in detail and wonder whether the Minister could confirm that the position is not that simple.
Paragraphs 2.32 and 2.33 reject part of our recommendations on pay. Paragraph 4.5 makes no commitment to legislation on access to basic bank accounts. Paragraph 3.24 passes to the regulator only consideration of the changes that we recommended on the corporate governance responsibilities of executives and bank chairmen. Paragraphs 3.34 and 3.35 in effect reject our recommendation for gender reports on operations on the trading floor. Paragraph 5.11 rejects our recommendation to consider splitting RBS into regional banks as part of the Government’s study on RBS. Paragraph 5.28 rejects our recommendations on the governance of the Bank of England. Paragraph 5.31 rejects our recommendations on the chairmanship of the Prudential Regulation Authority.
As my hon. Friend the Member for Nottingham East (Chris Leslie) said, the Government have also rejected recommendations on leveraging and ring-fencing, in particular ring-fencing in respect of the sector as a whole. When it comes to the implementation of recommendations, the chairman of the parliamentary commission yesterday described the attempt to ring-fence one particular group as “virtually useless”.
I stress to the Minister that it is not accurate to say that the Government have accepted the vast majority of the parliamentary commission’s recommendations. The document that was published yesterday is full of excuses and sleights of hand that pass on to the regulator for consideration firm recommendations that we made. I stress to those in another place, who may have a greater opportunity to amend the Bill, that they should read the document that was published yesterday with a careful eye to see what has been accepted and what has not.
Greg Clark
The right hon. Gentleman is not giving the response a fair reading. First, not all of the recommendations were addressed to the Government. Some of them were addressed to the regulators. Secondly, some of the recommendations that were made to the Government have been taken forward through actions that can be taken by the regulators. When colleagues look at the response, they will see that it is a broad endorsement of what was an excellent report.
Mr McFadden
Perhaps the Minister and I have different interpretations of the word “broad”. He may be able to persuade the hon. Member for Chichester (Mr Tyrie), on the basis of some warm words, that these are great concessions, but I remain to be convinced.
The Government have a great deal more to do to convince Parliament—this House and the other House—that they endorse the vast majority of the recommendations. The more one reads the report that was published yesterday, the less one comes to that conclusion. I hope that those who are in a position to amend the Bill in future take heed of that and press with greater determination than Members of this House the amendments that would fully and faithfully implement the recommendations of the Parliamentary Commission on Banking Standards.
David Rutley (Macclesfield) (Con)
I was not able to participate in the Public Bill Committee or the parliamentary commission, but I have followed their work from a distance. We must recognise the important progress that has been made over recent weeks and months.
I praise my hon. Friend the Member for Chichester (Mr Tyrie), Chairman of the Treasury Committee and of the parliamentary commission. He has taught me a lot during my time in Parliament. Tim Knox, the director of the Centre for Policy Studies, has said of my hon. Friend that
“he’s quite prepared to argue half the night over whether a comma should be a semi-colon—which is reflective of the seriousness with which he takes his work.”
My hon. Friend is prepared to do a lot more than that. He is prepared to debate and work tirelessly for months on end with colleagues on both sides of the House and with Ministers to move matters forward.
The huge progress that has been made in recent months on this important subject is also a credit to the Minister and his colleagues on the Front Bench. The Government’s response, which was published yesterday, moved the debate forward. On page 22, it summarises the failure that took place at HBOS. I worked at HBOS from 2005 to 2007 and saw at first hand the problems with the federal structure at the bank. I hasten to add that I worked in the general insurance side of the business, which was performing particularly well. It was clear that there was a problem with managing risk across the entire business. It was also clear from my interactions with the Financial Services Authority that it did not have a grip on the regulation of the smaller parts of the business or the business as a whole. It was clear that my business friends in Yorkshire who worked outside the bank recognised that the bank was involved in very racy deals. They kept asking me how the bank could support them. The FSA clearly was not paying sufficient attention to what was going on.
The Bill is vital. It is critical to bringing about the individual accountability that many of us want to see across our financial services sector, with the tough senior persons regime, reversing the burden of proof and criminal sanctions for reckless misconduct. All those steps are vital, as is the ring fence and the attempts to electrify it. They will bring about a meaningful distinction between what goes on in retail banks, which are vital for individuals and small businesses, and more risky investment banking. In my interaction with other banks, such as HBOS and Barclays, it was clear that they had very different cultures and needed to be brought under control. The ring fence will help to do that.
It is important to bring about enhanced competition. I helped to launch Asda’s introduction to financial services, and other retail brands have moved into financial services too. As my hon. Friend the Member for Hexham (Guy Opperman) said, we need new entrants. That will encourage greater competition and help us in our task of building trust in our financial services sector. It is good to see, in recommendation 4.22, that the Government will be initiating an independent study into the feasibility of the costs and benefits of full account portability. Bold, radical steps are required to move things forward and build the trust we want to see in our financial services sector. I commend the work of the parliamentary commission and the Government in taking these steps forward.
John Mann (Bassetlaw) (Lab)
A vast amount of hard work has been diligently done for such a puny and inadequate set of proposals. Where does it leave us, if we look at the big picture? There is a debate about the Government’s failure to electrify the ring fence, although as I recall, the financial crisis started with Northern Rock and Lehman Brothers, where the ring fence would have made no difference whatever. What are we trying to address?
We have two banks in state ownership that are still in crisis. Clearly, the Government have no idea what to do with RBS, from who is running it and the Government’s cack-handed handling of Mr Hester’s departure, to what its role should be. Should RBS exist? Should it be broken up? How should it be broken up? Can it be broken up? How could competition emanate from breaking it up? We hear the word competition all the time. I was a signatory to the extremely modest bank account portability amendment that, rightly, was tabled. The structure of banking, however, remains pretty much as was. There is significantly less competition than there was 10 years ago. Building societies have been consolidated and about a third have vanished.
Where is the international level? This was not a British crisis, but today, as a consequence of the British LIBOR scandal, we have lost out to New York, which has played its political hand far more astutely than the Government and has grabbed business from this country. Frankfurt and Paris will be lining up to do the same. We are dealing with international banks, and the Government’s insular look at what should be done, presuming that British solutions will add to British competition, is a misnomer. We face problems with transparency in the UK dependencies, which, unlike any other country, we can influence. They remain totally opaque, specifically in relation to banking and subsidiaries—there is nothing there. On international banking agreements, the Government are hiding even from the modest proposals emanating from Brussels, of all places. This is not going to solve our problems. Competition has not moved forward, and there is no evidence that it will. The Government have an aspiration, but no strategy, for competition, so we remain with none. The problem of oligarchies running investment banking worldwide has not changed either; it remains as was—a fundamental weakness in the banking stranglehold over the rest of the economy—and totally unaddressed.
The fundamental issue that some posed at the beginning will remain the Achilles heel of all politicians and whoever is in government in this country from now on: if there is a further banking crisis and individuals—known as voters—are in a panic over their savings, there is no politician in any Government who would not bail out those accounts. No Government, whatever their colour, whatever the economic situation, would survive grabbing the electorate’s savings.
Most fundamentally, we have failed to create a concept of tiered risk for consumers to give them a choice. It has worked before. The classic example is a simple one, but a real one: the premium bond. When the premium bond was introduced, people knew that it was totally guaranteed; they knew it was not the best way of investing, but they bought them because they were absolutely guaranteed. We do not do that with our savings now. We have not created the options that would let our constituents say, “We’ll put X amount in here, knowing we’ll get a lower return than elsewhere, because the Government will give an absolute guarantee. And we can put Y amount in a middle-risk option, where there are some guarantees to certain levels, and we’ll put Z amount into something with great returns, but explicitly no Government guarantee.”
Our failure to create those options has created a fundamental weakness. I would not even describe that as radical; I would call it a rather conservative, with a small c, and moderate proposal, giving choice, creating markets and trusting people. We have not done that. At some stage, a future Government—not this one or the next one, I hope, or one in our lifetime—will face the dilemma again and will be forced to bail out a bank. There is the danger, however, that it might come more suddenly than that.
David Rutley
Does the hon. Gentleman not recognise that there are options for fully guaranteed savings with National Savings & Investment as well as the £85,000 protection? There are those opportunities for people.
John Mann
I sit on the Treasury Select Committee; the hon. Gentleman served on it, so we have a modicum more information on these matters, as do other hon. Members, than our constituents. Nothing has changed for them, however. Fundamentally, there has been no segmentation of the market, which is why the new challenger banks are getting no further. Only a tiny, tiny proportion of business is going to them. We have not restructured, even though in RBS and Lloyds TSB we have the perfect opportunity, owing to the crisis, to restructure. Across the world, we see vast numbers of people suffering and Governments of every political persuasion being voted out because of the financial crisis and the decisions they have made. This Government might face the same dilemma. I am not commenting on whether the decisions on the deficit and debt are right or wrong economically, politically or socially—that is a critical debate, but it is a different debate—but the fact that we are in this situation and we are not addressing it for the future in anything but the most micro-management way is part of that weakness.
The Government might want to give themselves plaudits and say, “Well, perhaps we’re doing a little better than the Government of Greece or Spain,” or whichever Government it is. The Americans can slap themselves on the back and say, “Unlike the Brits, we’ve got our act together. We’ve targeted their banks. We’ve portrayed them as the wrongdoers. We’ve managed to shift some of the powers to ourselves,” which is precisely what is going on among the political, banking and business classes in Washington and New York. They are winning that battle.
I will end on this point. This is a world crisis. My research document proves that every one of the top 50 banks in the world, without exception, have been involved in criminality in recent times. That is staggering for any industry. For us to hold that industry together with sticking tape, not even with the most damaged and shattered elements, including those that have had to be nationalised, such as Lloyds TSB—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Mr Mann, your time is up—that is the story of your life at the moment.
Northern Ireland (Miscellaneous Provisions) Bill
(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:26 - The Committee divided: - Ayes: 16 / Noes: 294 - Question accordingly negatived.
20:46 - The Committee divided: - Ayes: 4 / Noes: 213 - Question accordingly negatived.
Naomi Long (Belfast East) (Alliance)
I beg to move amendment 7, page 2, line 25, leave out ‘October’ and insert ‘January’.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Amendment 8, page 2, line 37, leave out ‘October’ and insert ‘January’.
Amendment 2, page 2, line 43, at end insert—
‘(2A) In section 71E of the Political Parties, Elections and Referendums Act 2000 (duty not to disclose contents of donation reports) after subsection (3) insert—
(3A) Such information may be disclosed where a donation received by a Northern Ireland recipient on or after 1 October 2014 exceeds £7,500.
(3B) Such information may be disclosed where the total donations received by a Northern Ireland recipient from a relevant person in a year exceeds £7,500, save that no information on donations received before 1 October 2014 may be published.”.’.
Amendment 6, page 2, line 43, at end insert—
‘(2A) Section 71B of the Political Parties, Elections and Referendums Act 2000 is repealed.’.
Clauses 1 and 2 stand part.
Naomi Long
My amendments 7 and 8 aim to ensure that all donations made to Northern Ireland political parties from January 2014 will eventually be subject to publication. That would not interfere with the Secretary of State’s right to make a decision to extend the period of secrecy and non-publication that currently applies to donations made to political parties. That would remain in the Secretary of State’s gift even if amendments 7 and 8 were accepted. However, they would make it clear to the general public that anything donated after January 2014 will eventually be made public, once the Secretary of State deems the security situation to be appropriate.
I believe that there is a lack of transparency in Northern Ireland politics, which causes significant public concern. That is reflected by the views of the Electoral Commission, which has commissioned a series of surveys on the matter. They show that a significant proportion of the public believe that this is a matter of concern to them. They want to know how their political parties are funded, and whether that funding has an impact on what the parties say and do in office. It is hugely important that we should move towards transparency as we try to normalise the situation in Northern Ireland.
Lady Hermon (North Down) (Ind)
Will the hon. Lady take this opportunity to confirm that the Electoral Commission for Northern Ireland, which is held in high esteem there, supports her amendments and does not believe that the deadline of 1 January 2014 gives sufficient notice either to political parties or to donors?
Naomi Long
The hon. Lady is correct to say that the Electoral Commission for Northern Ireland supports the amendments and believes that they would be practical in providing adequate support and advice to donors and political parties to make them fully aware of the change by January 2014. No substantive reasons have been given for this move not being able to proceed by 2014. Given all the issues surrounding transparency, and the public concern about the opaque nature of political funding in Northern Ireland, it is important to take this opportunity to make it clear that we want maximum transparency for the public there. We want the kind of transparency that the rest of the United Kingdom already enjoys, but which, for security reasons, we have been unable to enjoy until now.
For me, this is a matter not only of amendments 7 and 8, which I have tabled. I also want to refer to the other amendments in this group. Amendment 2 differs from those amendments, in that it seeks to set in stone the lifting of the veil of secrecy on party political donations in Northern Ireland by October 2014. It would not entirely remove the Government’s ability to extend the period further in an emergency. The Bill could, for example, include an order-making power to ensure that the Government could come back to the House in an emergency and reinstate the existing provisions, but they would need to have a substantive reason for doing so and they would have to bring their argument to the House and gain its support.
I put on record at Second Reading, and I want to do so again today, that this is not about being cavalier or dismissive about the security situation in Northern Ireland. Nor is it about dismissing the potential threat to those who donate to political parties. It is about accepting that that should not automatically, as of right, outweigh the public’s right to scrutinise donations to political parties. If we lift the bar and allow donations over £7,500 to be published, in line with the rest of the United Kingdom, people will factor in that decision when deciding whether to make such donations. Given that all the political parties have said that they get very few donations of that size, the proposal would not impede the normal democratic fundraising capacity of the Northern Ireland parties.
It is also important to confidence and trust that the public should believe that their elected representatives are not available for sale. The only way to convince people of that is to maximise transparency around these issues. No political party can defend itself against that charge while the secrecy continues to exist, because the information will not be in the public domain and available for scrutiny. My own party reveals such information voluntarily, and we encourage other parties to do so, but I believe that as of October 2014, we should be moving towards a more normalised situation for donations. The onus should be on donors to decide whether they wish to donate, knowing that their donation will be made public.
I shall listen carefully to what my colleagues in the Democratic Unionist party say about amendment 6. My understanding is that their intention is to remove entirely the possibility of donations to the Northern Ireland political parties from the Republic of Ireland. I cannot support that, and I want to explain why. Northern Ireland’s unique circumstances are reflected not only in our constitutional arrangements but in the fact that some parties operate on a Northern Ireland-only basis, some on a UK-wide basis and others on an all-Ireland basis. Taking that into account, I believe that it would be unfair completely to close the door to donations from the Republic of Ireland. A situation could be created in which parties that operate on an all-UK basis could receive donations from Dundee, Devon and Derby, while those that operate on a Northern Ireland-only basis would be unable to receive donations from Donegal or Dublin. I think that would be unfair.
I have a degree of sympathy, however, with the concerns expressed by the Democratic Unionist party on Second Reading about the potential for overseas donors to put money through the Republic of Ireland, essentially circumventing the rules on foreign donations. Indeed, I supported the Select Committee recommendation in paragraph 44 where we set out our concerns about that. Although we stopped short of recommending that all donations from the Republic of Ireland be stopped, we did recommend that the Secretary of State should seek to include provisions in the Bill that would close that particular loophole. I would be happy to support measures to do that, but I do not feel that it would be just or right to support measures that would simply put a bar on any donations from the Irish Republic, even if those people are resident and are donating to a party that operates on a Northern Ireland basis. That would not be fair or just.
I encourage all Members to consider amendments 7 and 8. Some might not agree with amendment 2, but I do not believe that the hands of the Secretary of State are in any way tied with respect to security judgments. I believe that amendments 7 and 8 will ensure clarity for donors, who will know that any money above £7,500 donated from January onwards will be subject to publication at whatever point in the future the Secretary of State decides that it is safe to declare the information. Clarity will be provided for members of the public who will know that we are moving in the direction of full transparency, in the same way as any other region of the UK. This draws the line under what has been a very tortured issue for a very long time. I hope that when the opportunity arises, Members will vote in favour of increasing transparency on these matters.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to see you in the Chair, Mr Hollobone. I rise to speak to amendment 2, which is in the name of the hon. Member for Belfast East (Naomi Long) and myself. It is a pleasure to follow the hon. Lady’s speech, and I am grateful to her for supporting the amendment that I proposed—one that is obviously consistent with the recommendations of the Select Committee on the matter of transparency for larger political donations. This recommendation was not disputed in the Committee and there was no vote or dissenting voice, as can be seen in the report. Looking back over the evidence given to the Committee by every Northern Ireland political party, it becomes clear that there is little evidence that the parties are receiving many donations above this specified amount, so it is not as if we are talking about a large number of people potentially at a security risk.
A fair number of the parties favoured transparency, and the hon. Member for Belfast East has pointed out that her party already publishes its donations, while the Green party and Sinn Fein said they were in favour in the evidence given to us. It is not quite so easy, however, to find on Sinn Fein’s website all of its donations. Some of us have tried and have asked, but the information does not quite seem to be there.
Stephen Pound (Ealing North) (Lab)
I am very impressed with the hon. Gentleman’s comments so far. Will he confirm for the record that the Conservative party, which organises in Northern Ireland, is now going to be fully transparent in respect of all the donations received by that august body?
Nigel Mills
If only that were not so far above my pay grade, I would be happy to answer the hon. Gentleman. It is a matter that he will have to put to party officials. I have never had the pleasure of campaigning for my party in Northern Ireland, so I have not been made aware of those rules. I think that transparency is the right thing and that such matters should be disclosed, but I have no problem saying that the hon. Gentleman would have to ask somebody else about how my party operates in Northern Ireland.
The issue before us today is how to find a balance between transparency and the security threat. It is right that the Committee should have a say on that today. We should be reflecting on the fact that it is 15 years since the Good Friday agreement, and on how much progress has been made. The G8 summit in Northern Ireland was held without a hitch; and we had the Queen’s jubilee tour last year. I had the pleasure of being there to see it, and it was amazing to see that Her Majesty did not need to go around with all the bullet-proof glass of the past. That shows all the progress we have made, yet we seem to be saying that 15 or 16 years on from the agreement, we still do not dare publish the largest donations made to political parties.
The amendment refers to donations of more than £7,500. I think all the parties agree that that is a rare event, but there must come a point at which the level of a donation is such that members of the public begin to suspect that it is buying some kind of influence. There should be a threshold beyond which the public are able to see what donations are being received, so that they can be sure that no influence is being bought.
I have no reason to doubt that all the parties in Northern Ireland are entirely fair, that they are not for sale, and that they do not change their policies to suit donations. I am not sure that all the people in Northern Ireland are quite as confident of that as I am, but it is for them to be cynical. Their view on the subject may not have been greatly enhanced by a BBC programme that was shown in Northern Ireland last Thursday evening, and which I believe has prompted some doubt about the entire propriety of what happens.
It is possible that those who wish to make small donations will not be able to risk the threat to their security, but those who choose to donate more than £7,500 should do so in the knowledge that the fact that they have done so will be published, on the basis that it may be suspected that they are buying some kind of influence. We want to ensure that it is absolutely clear that they are not doing that, that none of the parties would do that, and there is no suggestion of any wrongdoing.
If it is not robust enough now and will not be robust enough in October 2014, when does the Minister think that the security situation will be robust enough to allow the publication of information about larger donations? What must change between now and the point at which we shall be able to publish that information? What criteria will the Government use under their new power to bring about more transparency? I am not certain that anyone fully understands what the obstacles are now, and what improvements would be necessary for us to provide that increased transparency, which I think every party that gave evidence to the Select Committee agreed was, in theory, desirable.
David Simpson (Upper Bann) (DUP)
As the hon. Gentleman knows, the Select Committee has discussed this issue on many occasions. Our party, along with nearly all the others, wants transparency, but the hon. Gentleman must realise that in parts of Northern Ireland today, to be a Unionist is to be an outcast. Subscribing to a political party could still put someone’s life in danger.
Nigel Mills
I bow to the hon. Gentleman’s expertise, but surely he agrees that such people can choose whether to donate a large amount to a party. If my amendment were passed, they could still donate £7,499 every year without their names being published. Surely he agrees that a donation can reach such a level that the donor must accept that it should be subject to transparency, because of the amount of influence that that donor might be exerting. The amendment provides that, in just over 14 months’ time, any donation that exceeds £7,500 will be made public. That would give an individual 14 months in which to make any large donation to a party that he or she wished to make—without the information being published—which would presumably tide the party over.
Ms Margaret Ritchie (South Down) (SDLP)
This topic is very important to those of us who are involved in the political process in Northern Ireland. Does the hon. Gentleman agree that it is necessary to balance the security risk against the public good, and that in this instance the public want transparency and accountability in politics?
Nigel Mills
Yes. I made that point at the outset. The need for absolute security must be balanced against the need for transparency, and I decided that the level at which the balance tilted towards transparency was £7,500. The hon. Lady might choose a different figure, but there must be a point at which donations are seen to buy influence, and the details should therefore be published.
The leader of the hon. Lady’s party gave some of the most compelling evidence to the Select Committee. He said that his big fear was that if a small business man gave £1,000 to his, and her, party, another party might knock on the door and demand £2,000, because that business man was clearly willing to donate. I think that there is a risk at that level. That is why I did not table an amendment proposing that all donations should be made public, and I think that that is why the Select Committee recommended the £7,500 threshold as well.
Fifteen years after the Good Friday agreement, with all the progress that has been made, can we really justify maintaining the secrecy of all the large political donations to Northern Ireland parties when in the rest of the UK we have the publication of much smaller donations with no trouble? We accept that there is a unique situation in Northern Ireland. The security situation there is clearly different from what those of us representing seats in the mainland face, but for how many more years can we tolerate there not being this transparency in politics in the UK?
Naomi Long
Even if we judge that the risk now is high, the point is that there will never be a point at which we can say there is no risk. This provision is about transitioning and saying that the donor must now take some responsibility for judging whether to take that risk, and that that risk should not always outweigh the public interest.
Nigel Mills
Absolutely, and if this amendment were passed, a donor would still have 14 months in which to make any donations they wanted to make and have them not made public. I suspect that would get the political parties through the 2015 general election, and that if they planned things carefully, they could get enough funds to get through the 2016 Assembly elections, so there would be no detriment to party funding until perhaps the 2020 elections in terms of the need for very large donations. That would give everyone a large amount of time to adjust to these new transparency rules.
I therefore ask the Minister to set out why the Government are apparently reluctant to go down this route even for the largest donations. I note that in their response to the Select Committee they said they would carefully consider any restrictions on transparency after October 2014. It would be useful to understand what their criteria are for making that decision. I accept, however, that the Minister cannot, and should not, tell us the specific intelligence he has about security threats.
Northern Ireland Members obviously understand Northern Ireland politics better than I do, but it is my understanding that the details of anyone who nominates a candidate or who stands for a council are published. If we have not had any evidence that there is a real security threat to people participating in those aspects of Northern Ireland democracy, why do we have this threat in respect of donations? It is worth asking how credible it is to have those two opposing situations, whereby it is safe to nominate or stand but it is not safe to donate money. I am not sure whether there is a very convincing argument for that.
Lady Hermon
Like the hon. Gentleman, I have the privilege of sitting on the Northern Ireland Affairs Committee. When we took evidence on this issue, we took evidence privately and in public session, and we took it in written as well as oral form. Did we ever receive evidence from a donor to any political party or to any independent Member of the Parliament that they felt at risk of being targeted by terrorists or anyone else for donating?
Nigel Mills
No, of course we did not receive any such evidence. We do not know who the donors are, so we could not go and ask them. That question was raised with some of the parties; they were asked whether they had any evidence from their donors that could be put on an anonymous basis, and I do not recall any evidence along those lines being received.
Jim Shannon (Strangford) (DUP)
A few moments ago the hon. Gentleman drew comparisons between elected representatives and donors, but elected representatives chose to put their names forward—in the same way as some of us on this side of the House chose to wear the uniform of the Crown, and served in Northern Ireland. That is a choice we made. The donors do not necessarily make a choice to have their names and addresses and businesses all known. That is the difference. The difference is between those who make these choices and those who donate and do not want to make anybody else aware of that. Derbyshire is not like South Down. Amber Valley is not like Belfast. They are two different places—there are different situations and different circumstances—and, with the greatest respect, I am a wee bit unsure that the hon. Gentleman is aware of all the background in Northern Ireland.
Nigel Mills
I am grateful to the hon. Gentleman for that intervention. Clearly, people who make donations before October 2014 should not have their details published, as that would not be their understanding of what would happen. My argument is that if they choose to make a large donation after 1 October 2014, they would be doing so on the understanding that they will be named—they would be choosing to be in that situation. I have no desire to force someone into a position that is not what they understood it to be, as it would be entirely wrong to do so.
I do not doubt that my constituency is very different from that of the hon. Gentleman and I do not want to underestimate his understanding of those risks, as they are clearly far greater than those in my constituency will ever be. However, we are all asked, as Members of Parliament in the UK, to vote on this Bill and to make these choices. We need to be in a situation where there is sufficient normality in Northern Ireland to be able to publish details of these donations. I am not convinced that we have not reached that point now and that for large donations it would not be the right way in which to tip that delicate balance, especially when we are not getting credible evidence from anybody that there is a real threat or that any past incidents would give us real cause for concern. Perhaps that evidence exists and just cannot come into the public domain. I have no doubt that the Minister will have information that is far stronger than the Committee could get its hands on or perhaps should get its hands on.
On the current balance of the arguments, I think we should be publishing details of those larger donations. I accept that we are not in a position to do that in respect of smaller donations, but let us make that change. Let us say that we have progressed far enough, 15 or 16 years on from that historic agreement, to think that the situation in Northern Ireland is strong enough for us to be able to publish details of those large donations. Let us go for transparency for the whole political process, and let us show that it is clean and that people cannot be bought. Let us not continue any longer with this fear or misunderstanding that the process is corrupt. That is where we are, and the events of last week and that television programme have raised again fears that something is happening which should not be happening. We all sincerely hope that it is not.
Mr Nigel Dodds (Belfast North) (DUP)
I am pleased to be able to take part in this debate. First, I wish to discuss amendment 6, which stands in my name and that of my colleagues, and then I will comment on the other proposals in the group. The hon. Member for Amber Valley (Nigel Mills) put a legitimate point of view, one that had support in the Select Committee but has not found favour with the Government, so I look forward to hearing the Minister speak on it. It is also worth making the general comment in relation to all these matters that the Bill did go through pre-legislative scrutiny. That is not to say that it cannot be improved or that we cannot debate it and tease out the various issues—that is what we are here to do. The hon. Gentleman referred to recent programmes and, of course, we also have to bear in mind the recent “Panorama” programme and The Sunday Times exposure of issues relating to Back-Benchers here and members of the other place. All these issues are very pertinent and need to be examined, too.
Our amendment 6 would repeal section 71B of the Political Parties, Elections and Referendums Act 2000. Political parties in Northern Ireland currently follow different rules from parties in Great Britain. Many people in the UK—UK taxpayers and voters—might be slightly surprised that a different set of rules applies on donations to people who can be elected to the House of Commons to make laws for the whole of the United Kingdom if they are in political parties in one part of the UK. The 2000 Act was passed to prevent foreign influence through donations being made without transparency, openness and all the rest of it and to ensure that donations were made by legitimate donors—donors who reside in the United Kingdom or who have locus in the UK, because, after all, the political parties to which they are donating are making laws for the UK. By logic, therefore, the same rules should apply across the UK to all the political parties represented in this House. That is what the amendment seeks to achieve.
In Great Britain, donations are permissible only from individuals or bodies in the United Kingdom. Northern Ireland parties, exceptionally, are allowed also to receive donations and loans from the Irish Republic. The amendment would end that exemption and put Northern Ireland on the same footing as the rest of the United Kingdom. One argument that is made over and over by many people, quite validly and properly, is that Northern Ireland should be brought into line with the rest of the United Kingdom. Usually, that argument is applied to the question of transparency and the revelation of the identities of donors—I shall come to that in a short while—but it never seems to be raised in the context of this glaring loophole, which preserves a special position, effectively for the benefit of nationalist parties. Let us be frank: that is why it was brought in originally and why it was lobbied for.
I listened carefully to the hon. Member for Belfast East (Naomi Long) and I understand where she is coming from. I understand the argument she advanced and the way in which she advanced it. Her concern was more to do with the loophole whereby donations come not so much from citizens or organisations in the Republic but from individuals or companies who are used as a conduit for political donations to parties in Northern Ireland from outside the Irish Republic—from the United States, or wherever. That is the real problem. It was identified by the Select Committee, which recommended that the loophole be closed.
The purpose of our amendment is to highlight that glaring loophole. We cannot have an exception that allows donations to come in from abroad and thereby allows them to come in from even further afield than intended—from America, Australia, Canada, other parts of the European Union or wherever else. That issue must be addressed. It is entirely unacceptable, when we talk about transparency, openness and all the rest of it, that in Northern Ireland parties that are represented or may be represented in this House could be funded by bodies, individuals and organisations in other parts of the world yet we would never be able to find out because of this exception.
I appeal to the Minister to consider the issue, to consider very carefully not just what we have said but what the Select Committee has said and to take the matter away and see how the loophole can be closed. If we are trying to move forward and bring the law on donations gradually and cautiously into line, we must do it across the board, not just on the issue addressed by clause 1 and the other amendments but on the issue we are raising through amendment 6.
Lady Hermon
I am grateful to the right hon. Gentleman for giving way. I need some assistance in making up my mind about whether to support the amendment, so I would like him to explain precisely the remit of section 71B of the Political Parties, Elections and Referendums Act, as amended. Does his amendment affect only donations from Irish citizens outside the United Kingdom, or would it apply equally to those who believe themselves to be Irish citizens living in the UK, and who might even wish to donate to the Democratic Unionist party?
Mr Dodds
The hon. Lady asks for clarification; I think the position is pretty clear. The position of those who would see themselves as Irish, or who hold an Irish passport and live in the United Kingdom, would not be affected at all. The exception allowed for in the 2000 Act as amended allows people who do not reside in the United Kingdom, but who do reside and have a residence qualification in the Irish Republic, to donate to Northern Ireland parties. We are saying that that is a back door route; the donations may be from individuals, companies and organisations in the Irish Republic, but that money can come from wherever—there is no regulation whatsoever. That is why we have tabled the amendment.
Naomi Long
I concur with the right hon. Gentleman’s concerns about international donations, but does he not agree that closing down all donations from the Irish Republic for parties that operate on an all-Ireland basis would not be fair, when parties that operate on a Northern Ireland or UK-wide basis can still get donations from the whole of the UK? Is it not more important that the Minister of State goes away and looks at how we can deal with the international issue in collaboration with the Irish Government, who manage their rules?
Mr Dodds
I have asked the Minister to take the matter away and consider it, but the fundamental point is that we are talking about the United Kingdom. When it comes to laws on donations, the electoral system for this House, and the way in which Members of the House are treated, right across the board, I believe that we are a Parliament of the United Kingdom, and Members of the House should all be equal, regardless of where we come from.
As far as the political set-up in Northern Ireland is concerned, there is absolutely nothing to stop political parties getting donations from any part of the United Kingdom, although I have to say that it is not common for Northern Ireland parties—the hon. Lady can bear this out—to be inundated with donations from other parts of the United Kingdom. I think that parties on this side of the water have that market well and truly cornered, whatever the source of the donations. We certainly do not get donations from the unions in Northern Ireland, either.
This is a point of principle for us, I suppose. The hon. Lady may not agree with it, and she has a perfectly valid perspective, but our view is that we are part of the United Kingdom, and we should all abide equally by the rules of the United Kingdom. The fundamental point is that the situation is not only wrong in principle but wide open to abuse; a coach and horses could be driven through the provisions, in ways that run contrary to the reasons for introducing the measures in the 2000 Act. They were brought in to pander to Sinn Fein in particular. Whatever the reasons may have been for that, years ago, those reasons have long since ceased to apply, and everybody should be on a level playing field.
Nigel Mills
I have sympathy with what the right hon. Gentleman is saying. One of the concerns of the Northern Ireland Affairs Committee was that his amendment would effectively contravene the provisions of the Good Friday agreement—that freedoms allowed there effectively enable an all-Ireland party to operate, and what he is trying to do would stop that happening—and that is perhaps not the way Parliament ought to go.
Mr Dodds
Nothing in the amendment, or in our proposal, would prevent a party from operating in both Northern Ireland and the Irish Republic. Likewise, there is nothing to stop a party from operating on a UK-wide basis, if it wished to. All the provision does is put Northern Ireland parties in exactly the same position as those in the rest of the United Kingdom, so that we are subject to the same rules and scrutiny. That is a perfectly legitimate point of view, which the Minister needs to consider.
Amendment 2 in the name of the hon. Member for Amber Valley (Nigel Mills) means that after 1 October 2014 all protected information should be published in relation to all donations over £7,500. Protected information is anything that could identify the person or organisation that made a donation during the prescribed period of donor anonymity. The amendment would remove the protection after 1 October 2014 and would remove all discretion from the Secretary of State so that, as the hon. Gentleman said, after that date all donors and their details would be published.
We discussed the issue generally on Second Reading and the Government set out their position, which was opposed to that of the hon. Gentleman. Generally speaking, we welcomed the Government’s approach, which was one of caution but of cautious progress. We made it clear in the House that we want to see Northern Ireland on all fronts—not just, as some people have it, selectively—moving forward and coming into line with the rest of the United Kingdom. Right across all fronts we wish to see that.
We welcome the fact that amendments 7 and 8, as well as amendment 2, safeguard the anonymity of those who have donated up till now. Some have argued that that should not be accepted, but it is accepted by everybody and rightly so. The question is whether the Government should still have regard to the circumstances in October 2014, or whether we should make a decision now that as of that date, regardless of the situation or circumstances, the discretion is taken away.
Vernon Coaker (Gedling) (Lab)
Does the right hon. Gentleman share my concern about clause 1(3)? He said that people who had made a donation up till now have their anonymity guaranteed, yet clause 1(3) seems to suggest that there might be circumstances in which the anonymity of those who gave before the Bill is enacted might be breached.
Mr Dodds
The hon. Gentleman makes a good point. I flagged that up on Second Reading and the Minister may want to look at it. The Bill is a tidying-up exercise, and the matter will have to be addressed in another place or on Report. The question is whether the clause leaves open some kind of discretion. When the Select Committee considered the matter, it recommended that the clause should be tightened so that there was certainty that anonymity would be preserved. There should be no room for doubt.
The Minister of State, Northern Ireland Office (Mike Penning)
The right hon. Gentleman is right. The protection of people who have given donations to a political party in Northern Ireland cannot be lifted retrospectively unless they give permission. If they are happy for their data to be released, the Electoral Commission may wish to do so. That, I think, is what the right hon. Gentleman is referring to. I will look at the provision again, but there is absolutely no intent whatever to release data on anybody retrospectively unless they agree to that.
Mr Dodds
I very much welcome what the Minister has said. I think that is the intent of everybody. The slight concern is about the drafting and the need for the intention to be explicitly spelled out in those terms. Some commentators have pointed out that the current wording is somewhat loose with regard to the possibility of some discretion. Given the situation with regard to litigation on these matters, it is not beyond the bounds of possibility that somebody will test it in court. The provision needs to be tightened up.
Mike Penning
If there is that concern, the Government will table an amendment in the other House and close it.
Stephen Pound
This is an important aspect of the Bill that we must thoroughly ventilate. Does the right hon. Gentleman share my concern that although data may not be available for release, they do exist? If data are collated, stored and placed in a silo of information, there is always the fear and concern that they could be released. Examples at the moment from the other side of the Atlantic indicate that point. Does the right hon. Gentleman have any suggestions about how we could address that concern?
Mr Dodds
The hon. Gentleman makes an important point about data that are held and not meant for publication yet somehow find themselves in the public domain, and we can all cite many examples of that happening in recent years. There are, of course, criminal sanctions, but that does not necessarily guarantee anything. The fact of the matter is that it depends on the good will and good faith of those who safeguard such information, and on proper security to ensure that what Parliament intends and enacts is followed through. The hon. Gentleman raises an important point that rightly concerns people, and the Government may wish to comment on what steps they are taking to ensure that information does not enter the public domain when people have been guaranteed that it will not.
Returning to amendment 2, which would remove the discretion, we put on record our concerns that donors to political parties in the rest of the UK do not face the same problems as donors to parties in Northern Ireland. The hon. Member for Amber Valley (Nigel Mills) pointed out the tremendous progress that has been made, which we all recognise, value and celebrate, but there is still a serious threat in terms of terrorism and public safety. Not long ago there was the murder of a prison officer, David Black, and there have been other serious incidents, disruptions and bomb attacks. We operate in a different climate—it is much improved and better than it used to be—but most people accept that we are still in a situation in which caution must be exercised.
As we move forward to a more normalised society, we hope that the threat from dissidents and others will recede and continue to be dealt with. As we put the violent past behind us, it is right and proper that we move towards a system of donations and loans, as employed in the rest of the United Kingdom, and we support the normalisation process for political donations as outlined in the Bill.
Lady Hermon
I am extremely grateful to the right hon. Gentleman for taking so many interventions. Will he kindly reflect on a question that I asked on Second Reading? While we all accept and do not query the dreadful times that all of us of a certain age have lived through in Northern Ireland, we are now in more peaceful times. Will the right hon. Gentleman quantify in numbers—this will be helpful for people at home watching the debate—the threats to current donors to the Democratic Unionist party? Is it in half dozens or dozens, and can he quantify that in changed circumstances and—thank the Lord—quieter times in Northern Ireland?
Mr Dodds
A point was made earlier—I do not know whether it came from the hon. Lady or someone else—that the Northern Ireland Affairs Committee did not hear from a donor saying how afraid they would be if their identity was made public. It is not easy for people in that position, and there will not be lots of people coming forward and making their position clear. By necessity, some of these things will be done with the least publicity and information as possible from the donor’s point of view, because they want to protect their anonymity.
The Select Committee heard from the First Minister—I have already cited his evidence—from David McClarty, an independent MLA, and from representatives of my party, the Social Democratic and Labour party, the UK Independence party, which of course is becoming a major force in the rest of the United Kingdom, although not particularly in Northern Ireland, and the Ulster Unionist party. They all urged the Secretary of State to exercise caution when modifying the current confidentiality arrangements for political loans and donations in Northern Ireland. As the Committee’s report states:
“They argued that the security situation in Northern Ireland presented a barrier to implementing the same transparency regime as Great Britain because donors remained at risk of violence and intimidation”.
Mr Laurence Robertson (Tewkesbury) (Con)
The right hon. Gentleman is making a number of very important points. A number of the Committee’s witnesses where asked why donors would be at greater risk than candidates, for example, or those who support candidates in other ways, perhaps by delivering leaflets, displaying posters, canvassing or signing the nomination papers. Why does he think that donors would be at greater risk that those participants?
Mr Dodds
It could be argued that donors are at as great a risk as those who put themselves forward as political representatives and stand for political parties. I suppose that one reason why they might choose to be a donor, rather than a candidate, is that they do not want to attract the sort of public attention that being a full or part-time public representative brings in Northern Ireland. They want to be involved in the political process, to support it and to have their political interests advanced and their views reflected, but they do not necessarily want to get involved in politics directly. However, even being a donor can attract problems for those people. There is a difference between being a donor and standing for election as a political representative. Not everybody wants to be a political activist. I think that there is a significant difference in the level of public attention that people want to attract, and that is human nature.
Nigel Mills
I want to take the right hon. Gentleman back to the quotes he gave about the commercial risk of a boycott if someone is exposed as a political donor. The leader of the UUP and the First Minister both said that it was the security risk that justified the lack of transparency and that the commercial downsides of a boycott alone would not be a sufficient threshold. Does he agree that it is only the security risk that justifies the lack of transparency?
Mr Dodds
I do not accept the hon. Gentleman’s point. I refer him to paragraph 23 of the research paper on this matter produced by the House of Commons Library, which says:
“Mr Robinson, Mr Nesbitt and Mr Elliott all argued that security and commercial risk to donors were intrinsically intertwined”.
The responsibility for setting the timetable for removing anonymity must, in our view, remain with the Secretary of State, as is the current position under the Bill. We would urge caution as to when the decision is considered, as we noted on Second Reading, when the Secretary of State gave us an undertaking that there would be consultation not just with the Electoral Commission but with the security forces and political parties. That is absolutely right and proper.
For those reasons, we support the consensus behind the Bill and urge colleagues to consider carefully the importance and significance of our amendment 6.
Stephen Lloyd (Eastbourne) (LD)
It has been a pleasure to listen to the right hon. Member for Belfast North (Mr Dodds), my hon. Friend the Member for Amber Valley (Nigel Mills), and the hon. Member for Belfast East (Naomi Long). They made very thoughtful contributions, and I appreciate being able to listen to them.
I entirely appreciate, from my own family experience, the challenges as to why there had to be anonymity in Northern Ireland for so many years. I entirely support that, for the reasons that others have mentioned. I have a great deal of sympathy for amendment 2, tabled by my hon. Friend the Member for Amber Valley and the hon. Member for Belfast East, which refers to a £7,500 threshold and has a provision giving people 18 months or so to make whatever substantial donations they make. A lot of thought has gone into the amendment, and in many respects I instinctively understand and appreciate it. The right hon. Member for Belfast North argued for allowing the Secretary of State to have flexibility up until October, because, sadly, the reality in Northern Ireland is that even though there have been enormous advances, things can change on a sixpence. The arguments are therefore very finely tuned.
A key part of normalisation is to make everything as equitable as possible between Northern Ireland and the UK. I fully understand the reasons for the length of time that the process has been given. I think that we are being very sensible in drawing to a close on this. If the Government cannot accept amendment 2, will the Minister categorically assure me that come October 2014 they would be absolutely cognisant of the fact that if another inappropriate excuse for a delay were implemented, it would be a very sad day for this House and for Northern Ireland? I suppose that some eagle-eyed observers will recognise that I am struggling slightly with this and reading between the lines. I would welcome our having equalisation come October 2014. That transparency is vital, and it is the next and final stage. I urge the Minister to make it very clear that while we retain the discretion up until 2014, our default position is to move towards normalisation expeditiously.
Mark Durkan (Foyle) (SDLP)
On amendments 7 and 8, tabled by the hon. Member for Belfast East (Naomi Long), I sympathise with the argument that if we stick unquestioningly to the date of October 2014 there is a danger that the same excuse will be given that the security situation does not permit us to move to more transparent arrangements. It is as if the date has been picked almost as a gesture to pseudo-transparency and the hon. Lady is testing that by proposing that it be brought forward. I sympathise with that, but January 2014 would be cutting it a bit fine, given that I assume the Bill will only get to the Lords this autumn.
I believe, however, that there is a case for bringing the date forward from October 2014. Bills are often enacted at the beginning of the financial year and I see no reason why that should not also be the case with this Bill. Members might point out that there are elections due next year, but I would have thought that a starting date of the beginning of the financial year would adequately and competently address the problem. I certainly do not think that the starting date should be after next year’s two intended elections, because that would make it look as though we were legislating with them in mind and almost allowing last orders for donations.
If January were the only date available before October, I would support amendments 7 and 8. I ask the Minister to consider bringing the date forward, because it looks as though the date of October has been set with next year’s elections in mind. Many people are also concerned that, come October, the can will be kicked down the road yet again.
Amendment 2, tabled by the hon. Member for Amber Valley (Nigel Mills) and the hon. Member for Belfast East, seeks to ensure that the real commencement date for transparency is made absolutely clear and unambiguous. We heard on Second Reading, and the Minister has told us in an intervention today, that there is no intention retrospectively to reveal donations, even those made in recent years. A signal has to be sent, however, that there will be a date from which a record of all donations can be revealed when the circumstances allow it. That needs to be made clear and explicit. That is what amendment 2 calls for and I support it, because I do not think the public believe political parties when we tell them that transparency, definition and certainty are not possible and that we cannot give them an unambiguous commencement date for transparency. Amendment 2 goes someway to addressing that deficit in public credence.
As I indicated on Second Reading, I am sensitive to the many risks and threats that people may have experienced because of their involvement in Northern Ireland politics, whether as a candidate, the family member of a candidate, an activist, a member or a donor. However, there comes a point when the public feel that the arguments about security are overdone and are an excuse for secrecy. They are not sure whether secrecy is in the interests of the parties or whether it truly ensures the safety of the donors.
Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)
I thank the hon. Gentleman for giving way. On his point about the Environment Minister for Northern Ireland notifying officials when a potential SDLP donor is involved in a planning application, does he know whether that information, when lodged with officials, is subject to the Freedom of Information Act 2000, and is it available to a member of the public?
Mark Durkan
As I understand it, it is not, not least because it is not a compelling point. He informs his officials and the matter is handled in a particular way, but that does not put anybody at any risk. I do not believe that Alex Attwood is inadvertently trying to find a way around the provisions and the whole question of protecting things on a retrospective basis; it is about him as a Minister being honest with his officials and with the responsibility entrusted to him to exercise good, clear, honest and independent judgment. It is also about allowing his officials to do that as well, because many of the issues that have arisen in recent days involve concerns that Ministers are intruding into what officials are doing—that Ministers are being overactive in their Departments in relation to matters being handled at an official level. Questions arise about who meets Ministers and whether they record and declare those meetings fully, and whether they account for those meetings in response to questions in Committees. When those questions are being asked, we need to address transparency requirements.
It will not fall to this House and the Bill to provide all the answers to remedy the situation: the Executive and the Assembly will have to address tightening the ministerial code on ministerial meetings and donations. On Second Reading, I made the point that this issue does not just relate to planning decisions, and recent events relate to significant public contracts and public appointments. There have been a lot of questions on whether public appointments in Northern Ireland always follow the standard they are meant to follow. Many people would anecdotally suggest that there is too much coincidence and pattern in some public appointments.
Those are all reasons why we need more transparency. The fact that Northern Ireland is a small place is often used as a reason why we cannot have too much transparency. When I was a Minister, I would have made it known to a civil servant if a relative of mine was appointed to something. I would not have made the appointment, but it would have been for me to take official note of it. I wanted to disclose that, rather than have somebody else find out later on. Where relatives might have had a perceived interest in a particular project, or even a rival project, I would again have made a point of always declaring it. Of course, I was often told by civil servants, “Look, you can’t do that every time. Northern Ireland is too small a place. You can hardly walk down a street without bumping into people. You couldn’t throw a stone without hitting somebody that you know or are related to.” [Laughter.] That is not particularly good advice and is not the way I would usually want to make contact with people—even I might tweet first before doing that. The smallness of Northern Ireland can become an excuse for not having proper standards of transparency. That smallness is one of the reasons why it is necessary. The danger is that slippage in one area becomes an excuse for slipperiness in another. We should not allow that to happen. I have been definite about my support for making stronger moves on transparency, which is why I support amendment 2.
Vernon Coaker
On increasing transparency, does my hon. Friend think that the confidence of people in Northern Ireland would be increased if there was a statutory duty in the Bill to consult with the PSNI before arrangements were changed?
Mark Durkan
That could well be a pertinent point; the shadow Secretary of State makes a very good point. When it comes to security concerns, in many other instances, we treat the Chief Constable almost as an oracle. No doubt, the Minister will tell us that in any decision that he and the Secretary of State take, they reference information from the Chief Constable and other intelligence assessments, but it would be useful if that was in the Bill. Similarly, there is the role of the Electoral Commission; we know of its support for the amendments.
Amendment 6 would remove the right of anybody resident in the south of Ireland to make a donation to a party operating in the north of Ireland. I addressed this issue on Second Reading. I represent a border constituency in a regional city that serves both sides of the border in the north-west and which has strong links with neighbouring towns and areas. As such, the economic interest of the north-west is of cross-border economic interest. The same goes for the social fabric of the north-west: most families have a strong cross-border dimension, with many people living and working on a cross-border basis. Many people who work in the north live in the south, and vice versa, which is reflected in complicated—more so than they should be—arrangements for cross-border workers in respect of tax credits and other things.
When such cross-border life is part of the come-and-go flow of life, it extends to politics as well, because people have a strong interest in what happens in the region and want to offer political support, particularly if they are living temporarily in the south, but are from the north originally and might live there again or if they live in the south and have strong business interests in the north. It is natural. They do not regard themselves as being abroad when working or living in Donegal or Derry. They do not regard themselves as engaging in daily international travel.
Mr Gregory Campbell (East Londonderry) (DUP)
The Member is coming very, very close to asking Donegal to return to the United Kingdom.
Mark Durkan
No, I’m not. Donegal is well placed where it is, so close to Derry, and Derry is well placed and well favoured where it is, so close to the bounteous beauty of County Donegal.
At a wider level, there are parties in Northern Ireland that see us as being part of the body politic of the island as a whole—it is our natural body politic, just as the population of the UK as a whole is the natural body politic for those of a Unionist identity in Northern Ireland. The idea, therefore, that when it come to our politics—our political agenda, our political offer, our appeal for support—our natural broader political hinterland, our natural political family, should be precluded from giving political donations to us would be wrong and unequal. It would be absolutely wrong if Unionist parties were able to receive donations the length and breadth of the United Kingdom, including the whole of the island of Great Britain, to which they have such affinity, but nationalist parties in Northern Ireland could not receive contributions from people throughout the island of Ireland who want to support them.
Naomi Long
Just to clarify, will the hon. Gentleman confirm that he is not referring to my party’s website, where such information is easily found? I understand who he is alluding to, but it is not us.
Mark Durkan
I assure the hon. Lady and her party colleagues that I certainly did not want any stray fire to land on their reputation in that regard, so I am glad to affirm that point.
However, our opposition to amendment 6 is about putting things on a level playing field for all the parties in Northern Ireland, whether nationalist, Unionist or neither. As political realignment hopefully takes shape over the years to come, there will be all sorts of shifts in how parties present themselves, on either an all-Ireland or a wider-UK basis, and how far their nationalism or Unionism is emphasised. That is why donations should be available for parties from throughout the UK and from throughout the island of Ireland. That seems to me to be fair.
Mr Dodds
I am interested in what the hon. Gentleman is saying about both the donor and the recipient making a declaration. Currently, the rules mean that individuals or companies in the Irish Republic can provide funding to Northern Ireland parties, but that is not permissible when it comes to funding for parties in the Irish Republic, so the position is even worse. How does he think his suggestion can combat that problem?
Mark Durkan
The right hon. Gentleman raises a point that throws up the conundrum that, although we are trying to legislate for Northern Ireland in broad conformity with UK legislation as it is applied for parties here, because of the circumstances in Northern Ireland, the exception is to allow donations from the south. Then there is the discrepancy in the donations rules for people in the south, whereby they can donate under one set of rules to parties in the south and under another set to parties in the north. Perhaps there is a case for saying that we should try to arrive at some conformity on donations across the island of Ireland, or that donations from the south of Ireland should conform to the southern Irish rules as well. I do not have a problem with trying to finesse some of these issues so that we are not left with too many obvious conundrums. However, the answer to the question that the right hon. Member for Belfast North (Mr Dodds) has asked is not provided by amendment 6. It is not the answer to his very valid, pertinent and relevant question about the different standards for people from the south contributing donations.
I made the point on Second Reading that there were many people in the south who were originally from the north, or perhaps from this island, who had a valid and benevolent interest in the affairs of the north and who continued to make a contribution there, often through membership of public bodies. I also made the point that not all of them had been appointed to such bodies by nationalist Ministers. If such people are seen to have a valid role and to make a credible input in the best interests of Northern Ireland by way of a public appointment, I do not see why they should be precluded from doing so by way of donations to political parties.
Mr Laurence Robertson
It is a pleasure to follow all the right hon. and hon. Members who have spoken so far. I intend to make only a brief contribution to the debate, as many of the points have already been raised. I note that amendment 2, tabled by my hon. Friend the Member for Amber Valley (Nigel Mills), uses the word “may”, rather than “shall”, which is in keeping with the rest of the clause that he is seeking to amend. The Select Committee feels that we should move forward in this respect, and that we should try to normalise politics in Northern Ireland. I know that that was the ambition of the previous Secretary of State and the previous Minister, and it is fair to say that it is also the ambition of the current holders of those positions. It has been our guiding principle. Each and every political party that the Committee spoke to during the course of the inquiry approved of moving towards greater transparency.
Everyone on the Committee, myself included, recognises that there is a different security situation in Northern Ireland. The Committee has had a sufficient number of meetings, and paid a sufficient number of visits to Northern Ireland, to understand that fact. Further to my earlier intervention on the right hon. Member for Belfast North (Mr Dodds), a question that has frequently been asked is: why should the arrangements be different for donors and for those who participate in the elections? The right hon. Gentleman gave an explanation for why people might want to be donors but not candidates, and I understand that, but I am still not clear why a donor should be at greater risk or under a greater threat than someone who is standing for office for a political party. I would have thought that it was the other way round. People who support a candidate, largely by signing nomination papers, would surely expose themselves to the same risk.
It has been pointed out that if a business makes a donation, it could put them at a commercial disadvantage, but it is up to the business to make that decision. There is a Co-operative store close to my office in Tewkesbury. The Co-op has supported the Labour party for many years, and I have to make the decision whether to go and buy a carton of milk and a newspaper from that shop. It happens to be close to my office and very convenient, so I do that. I do not think that businesses should be able to hide behind the argument of a security risk in order to protect their business interests. If they make a donation to a particular party in Northern Ireland or elsewhere in Great Britain, they should take that commercial risk. That should be part of the normal run of politics.
I am somewhat intrigued by the substantive clause inasmuch as it allows the Secretary of State to increase transparency, but does not allow her to reduce it. Having looked very closely at the provisions, I am still slightly confused on this point. If the Secretary of State increases transparency, can she reduce it at some later date? In other words, she cannot reduce transparency from where it stands now, but can she reduce it if she has increased it in the future?
I make that point because if she cannot reduce it, where have we got to? What would be the difference from what my hon. Friend the Member for Amber Valley proposes? Let us say that the Secretary of State increases transparency, but in the year after that, the security situation—heaven forbid—got worse, so that she had to come back to introduce primary legislation to change that position. In those circumstances, I do not really see what would be any different from my hon. Friend’s proposal.
The Select Committee and I would certainly be against the publication of any information retrospectively when donors have made donations in the belief that that would not be the case. I am slightly concerned about the wording in clause 1, however, which it states:
“Such information may be disclosed if the Commission believe, on reasonable grounds, that…the relevant person has consented”.
We tried to strengthen that provision, saying that there had to be evidence that the person had consented. The Government response was that if they adopted our proposal, it would create an absolute offence and a mistake could be made. I am not completely persuaded by that argument. I think that the clause does need strengthening to ensure that a mistake cannot be made in this respect and that there has to be a clear indication from the person or organisation that made the donation that permission has been given for any such disclosure. I thus seek clarification from the Minister on those points.
Jim Shannon
I would like to say a few quick words on amendment 2, as proposed by the hon. Member for Amber Valley (Nigel Mills), and to put a different perspective on it. First, however, I wish to say that I have had a number of discussions with the hon. Gentleman and that we have served in the Finance Bill Committee together, as we have on Delegated Legislation Committees. I know that his interest is sincerely held and it is one that I respect. I was nevertheless struck as I read the briefing for this debate by its tone, and I would suggest that there is a reason for caution—anything further being an exaggeration.
My party, the Democratic Unionist party, is very much in favour of openness and transparency. We are also well aware of the security situation in Northern Ireland and of the fact that the dissidents are still very much on operations, which means that we cannot have one-size-fits-all legislation. It cannot happen; it is not like for like. Those who say that the people should stand up to intimidation show only the fact that they do not care or perhaps do not understand that people in Northern Ireland still live a life that carries a degree of anxiety—not just in historical cases, but in issues that are still ongoing today for communities across the whole of Northern Ireland. I accept that it is not to the same extent as in the past, but none the less there are still threats in my constituency and in others across Northern Ireland.
As someone who, like others, works within the community, I understand the real fear that people experience and I do not believe that it can be so easily dismissed as some people have suggested. Our security situation cannot be regulated to a date, as dissidents certainly do not respond to deadlines. Although I fully understand and agree with the necessity for transparency that has been put forward, this cannot be put before the security concerns of people and businesses, which are real and justified. To suggest otherwise would be to hope naively for the best, which is a good thing in principle, but not when people’s lives are at stake.
I have to say—I hate to say it, as well—that extortion of a sectarian nature is not a thing of the past when it comes to Northern Ireland. It still happens today; incidents are taking place. There is a very real possibility that if a business is seen to be donating to political parties, it might come under pressure to donate to other groups, perhaps those of an unsavoury nature. As my right hon. Friend the Member for Belfast North (Mr Dodds) said to the Committee, businesses can feel that they have been boycotted by customers whom they have had for years. There is a real issue for those people; it is not an exaggeration or a remote ideal. Is this what is intended by the legislation before us tonight? I do not believe so. I do not believe that the Bill is intended to scare off people who wish to contribute to a party. However, that will be a side-effect of it. People will fear that their homes, their businesses or, indeed, their families will be at risk, and that cannot be ignored by any Member in any part of the House.
The Temporary Chairman (Mr Philip Hollobone)
The hon. Lady has been very patient, and now her moment has arrived.
Ms Ritchie
Thank you, Mr Hollobone. I wish to speak to amendments 7 and 8 and amendment 6.
Given that we are living in a more normal society in Northern Ireland—although the degree of that normality varies, and we have seen it ebb and flow over the last few months—I believe that the anonymity relating to donations could now be lifted, not necessarily next October but perhaps at an earlier date, as suggested by the hon. Members for Belfast East (Naomi Long) and for Amber Valley (Nigel Mills).
I cannot disagree with what I understand to be the intended purpose of the amendments. It is important that, in trying to achieve a greater level of political maturity and in the practice of politics generally, we strive to achieve the highest standards of public life, whether we are serving our constituents or executing our parliamentary duties here at Westminster and in the Northern Ireland Assembly. The public ask us to serve them, and the duty to serve them is in our contract with them when we are elected as members of political parties. The electorate rightly demand from us the highest standards in public office in the execution of that contract, and it is important for the guiding principles of transparency, openness and accountability to constitute not just the pillars on which our fledgling democracy is built, but the rules that govern donations to political parties serving us in public life and wider civic society.
Like my hon. Friend the Member for Foyle (Mark Durkan), I acknowledge that there may be concern about security issues—concern that was expressed by the leader of our party when he gave evidence to the Northern Ireland Affairs Committee. There is a need to protect donors, because some of them—and some parties —fear that they may might be at risk from a terrorist or other threat. However, if we have learned anything over the last few months—and over the last few days, when television programmes have contained revelations about alleged political interference in certain bodies—it is the importance of giving some form of resilience and confidence to the public.
In that respect, I do not have any problem in supporting the amendments of the hon. Member for Belfast East, although it will not come as a surprise to learn that I do not support the amendment in the name of the right hon. Member for Belfast North (Mr Dodds) because like my party colleague, my hon. Friend the Member for Foyle (Mark Durkan), I believe we live in the island of Ireland. I believe that fervently as a democratic Irish nationalist, but notwithstanding that, I represent a border constituency, and many people at the southern end of it daily travel to places of employment in County Louth. They pay taxes sometimes in both the north of Ireland and the Republic of Ireland. They also have their children educated in the north, and they buy goods and services in the south and the north. There is that exchange of ideas and people. They view people in County Louth, albeit it is in the south of Ireland—in the Republic of Ireland, a different jurisdiction—as their neighbours and friends. In those circumstances, with that exchange of people and ideas, I cannot support this amendment. I am sure DUP Members will perfectly understand where the parliamentary party of the SDLP is coming from in that respect.
I also believe that we need to see progress on a whole range of matters, however. Mr Haass has been appointed today to chair the all-party talks on flags and emblems and reconciliation. It is important that we move towards that in the next phase of devolution so we can see the full implementation of the Good Friday agreement, including support from the British Government for a Bill of Rights that is dedicated to the needs and requirements of Northern Ireland.
Lady Hermon
May we clarify one little point of conflict between the hon. Lady and her colleague, the hon. Member for Foyle (Mark Durkan)? He supported the thrust of the amendments in the name of the hon. Member for Belfast East (Naomi Long), but he suggested that January was a bit too soon and perhaps the tax year would be better. However, the hon. Member for South Down (Ms Ritchie) has just said she supports the amendments of the hon. Member for Belfast East, so is it January, or is it March and the tax year, or has the hon. Member for South Down got further ideas?
Ms Ritchie
It was my very clear understanding that my hon. Friend the Member for Foyle said that if the hon. Member for Belfast East were to press her amendment to a Division, he, like me, would support her—although I think I might be a Teller in such a Division. We in the SDLP believe that there is a need to move towards greater transparency and accountability. That can be balanced against the political progress we are making in the interests of the public good and, above all, the wider needs of society in Northern Ireland, because the experience of the last few weeks tells us that the public want politics to move in that direction. They want us, while serving them, to exercise our job in the right and proper and accountable manner.
Stephen Pound
We have heard a great deal this evening about the threats and dangers that could possibly be attracted to party political donors. It is perhaps salutary to mention that if such threats exist to those who donate to political parties, credit should be given to those who have the courage to participate fully in the democratic process as candidates and elected representatives, and perhaps we in this House do not give enough credit to those who sit with us in this Chamber and who take the most extraordinary risks in conditions that are frequently beyond the imagining of us on this side of the water. Many right hon. and hon. Members sitting here tonight have had very close personal experiences in that regard, so when we talk about the threat to donors let us also salute the courage of those who participate fully in the democratic process.
May I, in these brief remarks, say that I thought that the right hon. Member for Belfast North (Mr Dodds) showed his fine—I was going to say almost Jesuitical subtlety but he probably would not thank me for that—analysis of the situation when he referred to the need to advance incrementally and organically? It is one thing to legislate, but we cannot legislate for human behaviour; we cannot demand that people’s behaviour and instincts change, and that society and culture change, because a piece of law has been approved in this House. A cultural change, an organic change, has to take place, and that is, of necessity, a slow process; it is an incremental process. None of us disagrees with the desirability of the destination; we all want to be in that place. It is the road map and the route we are talking about today. In the particular circumstances of politics in Northern Ireland, proceeding festina lente—I hope hon. Members will forgive me a spot of Latin—should be our watchword on this occasion. In recognition of that, the proceeding slowly and cautiously option is by far the best one. I look forward to hearing from the Minister, possibly also on the subject of transparency of the Conservative party in Northern Ireland.
Mike Penning
It is a pleasure to serve on this Committee of the whole House under your chairmanship, Mr Hollobone. As usual, we have had a wide-ranging debate on the provisions. I wish to make two personal comments. First, may I apologise on behalf of the Secretary of State, who would have been here but for the fact that, as Opposition Members know, it is right and proper that she is in the Province this evening as there are important matters to be dealt with there? It is right and proper that I acknowledge that she would have been here and she particularly wanted to deal with clauses 1 and 2. May I also say a personal thank you to right hon. and hon. friends in the House who have sent me notes and stopped me in the corridors following the tragic loss that my family have had in the past couple of days? The comradeship of this House has helped me through, especially as I was giving evidence to the Select Committee when my father-in-law passed away.
This debate has taken place with the perfect tone, and people watching this debate, particularly if they are doing so in Northern Ireland—I hope they are and I hope the BBC covers it properly—will be impressed. We probably all disagree about many of the issues; one of my colleagues came up to me saying, “Who agrees on what here?” We all agree that Northern Ireland has come a huge distance in the past 15 years but still has quite a long way to go. I would love to be able to stand here and say that I can agree with amendments 7, 8 and 2, but I cannot.
The office I hold means that I see things that I had hoped I would never see, and there are things I cannot repeat on the Floor of this House. May I pay tribute, as the shadow Minister did, to those who stand for office in Northern Ireland, whether in this House or any other elected body, because they stick their head about the parapet? As so many in this House, in the Assembly and in local government know, that very often puts them and their families under threat. We heard on Second Reading about the terrible atrocities of the past. Sadly, some of those threats remain today. Of course I add the caveat that we have come an awful long way but, as I said on Second Reading, I have to look daily at protection for people—close protection weapons, home protection and so on. Some of these people are elected but the vast majority are just going about their normal work to protect us. Sometimes they are not even in the public sector. I know we will never be in a perfect situation in which there is no threat to anybody, but while there is a threat I must be very careful to ensure that those who wish to donate and their loved ones are not put at risk by revealing their identities. Clauses 1 and 2 move us forward, slowly but surely, as we have for the past 15 years, and I thank the shadow Minister for supporting me in that regard. As I said, we would all love to be in a completely different position. I know that some hon. Members do not agree with me, and I completely respect them and their view, but the Bill moves us forward, although perhaps not at the speed that some would like.
Naomi Long
I acknowledge that the Bill moves us forward. That is welcome and I welcomed it on Second Reading. Will the Minister clarify exactly how my amendments 7 and 8 would pose any threat to security, given that all they would provide is that from January any donations made would be subject to publication once the Secretary of State deemed it was safe to publish?
Mike Penning
I completely understand where the hon. Lady is coming from. The whole Bill went through pre-legislative scrutiny, and we are not discussing semantics —it is much more serious than that. We are saying that the Secretary of State will take the powers and that, if we are in a secure position, we will move forward. As mentioned earlier—I think the Chairman of the Select Committee, my hon. Friend the Member for Tewkesbury (Mr Robertson), asked about this—the Secretary of State also has the statutory power to revoke.
Lady Hermon
I am extremely grateful to the Minister for taking a second intervention so soon after the first. I was very concerned when the Minister wound up on Second Reading and used an expression that struck me—and, I am sure, other right hon. and hon. Members —at the time:
“If one person is put at risk, that is not right.”—[Official Report, 24 June 2013; Vol. 565, c. 118.]
Although I cannot speak for others, I inferred that if one donor felt he or she was at risk the transparency measures would not be lifted by the Northern Ireland Office. Will the Minister take this opportunity to clarify when it will ever be the right time—when we have no risk at all?
Mike Penning
That is a good intervention. I read what I said the following day, as all good Ministers should—as all good Members should, to be honest—and I was speaking metaphorically. I was not speaking about an actual physical individual, because of course that would be a crazy situation. We would never, as hon. Members have said, get into a position where there was no threat to anybody. Let me clarify: I was speaking in general terms, rather than individually.
Let me touch on the threat. My job is not only to ensure, along with the Electoral Commission, that the electoral system in Northern Ireland runs properly but to ensure the national security of Northern Ireland. There might be concerns about individual businesses, and I think that this applies to businesses that give donations to any political party in the UK—we have talked about the Co-op—and they suffer any consequences, but that is completely separate from the intimidation and personal threats I see daily.
The shadow Secretary of State asked whether it should be on the face of the Bill that the PSNI should be a consultant. This subject is much more wide ranging than the PSNI; we could do that, but we do not need to. As the hon. Member for Foyle (Mark Durkan) said, it is more wide ranging and involves the other security services that are helping us and that helped us so brilliantly during the G8.
Amendment 6 stands in the name of the right hon. Member for Belfast North (Mr Dodds). I am told that I should not say this, but I have some sympathy with the argument, in that we need to move forward. I will not accept the amendment—he probably understands that—but if we are talking about normalisation, I accept that there need to be discussions between the Government in the south, us, and all the political parties on how we can get to a slightly better position. I very much take on board the point that the Good Friday agreement set out that there is a different situation in Northern Ireland when it comes to donations and political parties. Of course, there is a cross-Ireland political party that has had Members elected to this House, but it is not represented in the Chamber today.
I am committed to ongoing discussions, and to seeing how we can move the issue forward. I cannot accept amendment 6, but as that commitment is, I think, roughly what the right hon. Gentleman asked me to give, hopefully he is happy with that. I ask hon. Members to withdraw amendments 7, 8, 2 and 6, and commend clauses 1 and 2 to the Committee.
Naomi Long
I thank hon. Members for their contributions. When we discuss this issue, it is natural that we focus heavily on the threat to donors from terrorism. I do not dismiss that, and I do not dismiss the point that the threat level is severe. However, no compelling evidence was presented to the Select Committee during our inquiry to show that the threat specifically targeted donors. People remain willing to sign councillors’ nomination papers—people who do not want to lift their head above the parapet and be elected representatives, but who are willing to have that information published.
The Chairman of the Select Committee highlighted clearly that a boycott could happen in any part of the United Kingdom, and that that is not a compelling reason for the current arrangements, so we need to be cautious about conflating those two things. However, although we naturally focus heavily on the security threat, we must also focus heavily on the wider threat to the political process that the lack of transparency is becoming in Northern Ireland. The suspicion that politics operates for the benefit of those with the means to buy influence is utterly corrosive to the democratic process. It taints all of us as politicians, and it puts the institutions under threat, as the public disengage from politics as a result of that perception.
Confidence in Northern Ireland politics is at a low ebb, and only through increased transparency, and increased speed of delivery of transparency, can we meaningfully address that. I have listened carefully to what the Minister said, and while I understand and accept many of his points, I cannot accept that a coherent argument has been made to say that amendments 7 and 8 would pose any threat to the security of any individual.
Mike Penning
I know that the Select Committee took evidence, but a lot of the evidence that could perhaps have convinced the hon. Lady could not be given to the Select Committee. She cannot see the evidence that we see daily. Nobody in this House is more determined that there should be democracy than I am, but to push something forward without that knowledge is dangerous.
Naomi Long
The evidence that I am seeking is not evidence of the security threat. The evidence that I am referring to is evidence that amendments 7 and 8 would in any way compromise anyone’s security. The amendments leave it to the Secretary of State to decide when that information should be made public—she currently has that power—but make it clear that anyone making a donation after January 2014 will eventually have that fact made public when the Secretary of State and the Minister of State are confident that it is safe to do so, in the light of all the information that they see and we ordinary Members of Parliament do not. There is no compelling argument against amendments 7 and 8; they are supported by the Electoral Commission, and I would like to press them to a vote.
Mark Durkan
Does the hon. Lady recognise that the events of recent days mean that the concerns that lie behind her amendments are clear and present concerns of the public, and are felt profoundly? It is a bit much for the Minister or anybody else to conduct this debate as though those concerns were not there.
Naomi Long
I agree entirely. There is a serious risk if people no longer trust their politicians and no longer trust their institutions to act in the public interest. The only way we can overcome that is by clearing the matter up. No party can easily defend itself while this information remains secret. I am willing to accept the Secretary of State maintaining the discretion as to when the information will be published, but I see no risk to anyone from a decision being made now that makes donors and parties aware that anything donated after January will be made public, when the Minister of State and the Secretary of State are convinced that it is safe to do so.
Mr Dodds
To be absolutely clear, what the hon. Lady is talking about is bringing forward the date from October to January. That would not have any effect on any donations up to now or any donations before January next year, so in relation to the wider issues and the context in which we are speaking about this, the measure would take effect only from next year. Is that right?
Naomi Long
That is absolutely correct. I made it clear on Second Reading that I would be in favour of any measure that retrospectively exposed donors to publication. I believe that would be unjust while there is a legal question about whether they had the expectation that donations made in the prescribed period would not be made public. At a very personal level, they understood that to be the case. If we are to have honour and integrity in politics, that should extend to people’s understanding of agreements that have been made, so I would not favour retrospective exposure. Only donations made after January would be affected and that would come about only after the Secretary of State had ruled that it was safe to do so. I therefore wish to press the matter to a vote.
Question put, That the amendment be made.
Naomi Long
I beg to move amendment 10, page 4, line 5, after ‘Commons’, insert ‘or House of Lords’.
The Temporary Chair (Mr Philip Hollobone)
With this it will be convenient to discuss the following:
Amendment 11, page 4, line 7, after ‘Commons’, insert ‘or House of Lords’.
Amendment 12, page 4, line 11, at end insert—
‘(2) A person who becomes a Member of the House of Lords is not disqualified under section 1(1)(za) at any time during the period of 8 days beginning with the day the person becomes a Member of the House of Lords.’.
Amendment 13, page 4, line 30, leave out from ‘members)’ to end of line 31 and insert ‘leave out “either House of Parliament.”.’.
Clause stand part.
Amendment 14, page 4, line 36, after ‘Ireland)’, insert ‘or Seanad Éireann (the Senate of Ireland).’.
Amendment 20, page 4, line 36, at end insert ‘or Seanad Éireann (Senate of Ireland).
(dc) is a member of the House of Lords.’.
Amendment 15, page 4, line 38, after ‘Éireann’, insert ‘or Seanad Éireann’.
Amendment 3, page 4, line 41, at end add—
‘(3) In section 1(1) of the Northern Ireland Assembly Disqualification Act 1975 (disqualification of holders of certain offices and places) before paragraph (a) insert—
“(za) is a member of the European Parliament;”.
(4) After section 1B of that Act (as inserted by section 4(2)) insert—
“1C Members of the European Parliament
A person returned at an election as a member of the Northern Ireland Assembly is not disqualified under section 1(1)(za) at any time in the period of 8 days beginning with the day the person is so returned.”.’.
Clause 4 stand part.
Amendment 16, in clause 5, page 6, line 13, leave out from ‘MPs’ to end and insert
‘, members of the House of Lords or members of the Oireachtas).’.
Amendment 17, page 6, line 28, leave out from ‘MPs’ to end and insert
‘, members of the House of Lords or members of the Oireachtas); and’.
Naomi Long
I intend to keep my remarks on this group of amendments brief. I welcome the fact that the Government have acted on their promise to ensure that double-jobbing between MLAs and MPs will now be brought to an end. I also recognise that, as a result of discussions in the Northern Ireland Affairs Committee, the Government have moved to include within that provision Members of Dail Eireann so that TDs, too, will not be able to hold a seat in the Assembly. I think that it is right that they have done so and welcome that move. [Interruption.]
The Temporary Chair (Mr Philip Hollobone)
Order. I am trying to enjoy what the hon. Lady is saying, but unfortunately there is a lot of chatter coming from behind the Speaker’s Chair. I am sure that hon. Members would like to hear more clearly the very important points she is making.
Naomi Long
Thank you, Mr Hollobone.
As I was saying, I welcome the fact that the Government are dealing with and resolving the issue of MP-MLA double-jobbing. That is a huge improvement. As a result of the Select Committee’s discussions, the Government have also moved to resolve the issue of TDs, who could also sit as MLAs, and to equalise the situation. That is also important and I welcome it at the outset.
The Government did this for good reason, which is the challenge of being in two legislatures at the same time—
Mike Penning
On a point of order, Mr Hollobone. I am afraid that even from this position on the Treasury Bench I cannot hear a word that is going on, mostly because of conversations at the other end of the Chamber.
The Temporary Chairman (Mr Philip Hollobone)
That is indeed a point of order, for a change. May I ask hon. Members who are not staying to listen to the debate to leave or to remain quietly?
Naomi Long
Thank you very much, Mr Hollobone. It is unfortunate that the noise blotted out all the praise that I was heaping on the Government, because I am just about to stop and start to highlight areas where they have not been quite so generous. However, I do appreciate that these issues are being addressed. I very much support that, as did the Select Committee.
These provisions are being proposed for a very good reason. Serving in two legislatures involves the physical challenge of being in two places at once. The conflict in sitting times between the House of Commons and the Northern Ireland Assembly means that Members who wished to be here today for this business would have to be absent from the Assembly, where they could be questioning Ministers and holding them to account. There is significant evidence that that creates a democratic deficit either there or here.
The problem is not restricted purely to Members who sit in the House of Commons. I recognise that the House of Lords is not structured in the same way as the Commons. Its Members do not have an electoral mandate and therefore do not have the same demands on their time with regard to constituency business. However, as a revising Chamber with a primary focus on legislation and scrutiny, it is hugely important that its Members are free to dedicate themselves to that task without the interference of a constituency burden and the other legislature that they would have to deal with when they are at the Northern Ireland Assembly.
Nigel Mills
I agree with the hon. Lady. Does she accept that, as I propose in amendment 3, this must apply even more to the European Parliament, which is even further away and has some kind of elected legitimacy, at least while we are in still in the European Union and it is relevant to us? I cannot see how someone can serve in Brussels and in Belfast at the same time.
Naomi Long
I will come to the hon. Gentleman’s amendment shortly. I understand that European Parliament legislation precludes people from serving in the Assembly at the same time as in the European Parliament. Perhaps the right hon. Member for Belfast North (Mr Dodds) would be able to advise whether that is the case. If not, I would welcome the issue being resolved in the Bill and would support the hon. Gentleman’s amendment if it achieved that.
It is not only about distance but about simply having the time to commit to doing the job that one is supposed to be doing. The House of Lords plays an important role in acting as a revising Chamber for this House. Someone who is a peer and also an MLA will not be able to commit themselves fully to either body, and that is unfortunate. The situation is exacerbated by the direct conflict between the sitting times of the Assembly and the House of Lords, particularly on Mondays and Tuesdays but also extending into the rest of the week, when people would be on committee business in the Assembly. The Assembly committees are extremely powerful instruments, and it is therefore important that Members play a full and active role in them.
I also recognise that remuneration for the work of a peer is different, which reflects the fact that many peers have careers outside Parliament that may on occasion conflict with the sittings of the House of Lords. I made it clear on Second Reading that I was content for this matter to be resolved in the context of wider reform of the House of Lords, and it was initially indicated that that would be the case when we discussed this during and after the Bill’s consultation period. However, given that House of Lords reform has not progressed and looks unlikely to do so in, let us say, the short term, it is important that the Government revisit the possibility of taking action in this Bill in order to ensure that Members of the House of the Lords and those who are elevated to it do not continue to sit in the Northern Ireland Assembly. If membership of this House disqualifies people from serving in the Assembly, I believe that the same should be true of membership of other Parliaments.
Nigel Mills
It is a pleasure to follow the hon. Lady and I agree with most of what she said. Indeed, when the Northern Ireland Affairs Committee considered the Bill we welcomed the Government’s decision to legislate to abolish double-jobbing between this place and the Northern Ireland Assembly, and we suggested that if the Government were going to go down the route of legislating on one lot of double-jobbing, they should do so for all manner of double-jobbing in order to be consistent. It is welcome that the Government listened to the Committee on the issue of Members of the Irish Parliament. If it is right to block Members of this Parliament from being Members of the Assembly, it would have been iniquitous to not also block Members of the Irish Parliament. That is a welcome change.
We accept the need to legislate to end double-jobbing between the Parliament in London and the Assembly in Belfast, but I find it difficult to understand why the Government think there is no need to end it in the context of the European Parliament in Brussels. I see from the Government response to the Northern Ireland Affairs Committee report that they see no need for that because no concern has been raised.
The Government consider that if that was done, it should apply across the United Kingdom and not just in Northern Ireland. However, the same argument would apply to ending double-jobbing between this place and the Scottish Parliament and Welsh Assembly, but the Government are proposing legislation only for Northern Ireland. I believe that legislation is planned for Wales, but I am not sure of the position on Scotland.
It is therefore hard to see the logic of legislating to stop Members of Parliament sitting in the Assembly, but not to stop Members of the European Parliament sitting there. Surely if we think that that is wrong, we should legislate on it as a matter of principle and say that people can choose whether they sit in the Assembly or another Parliament, but they cannot do both. That is the simple logic behind amendment 3.
I see no reason to detain the Committee. The hon. Member for Belfast East set out all the good reasons for banning double-jobbing. The people of Northern Ireland think that that should happen and all the parties over there have voluntarily agreed that it will happen from the next general election. In my view, that should also apply to the next European Parliament election, which is due to take place in just under a year. I therefore commend amendment 3 to the Committee.
Mark Durkan
The intention of amendment 20, which appears in my name and that of my hon. Friend the Member for South Down (Ms Ritchie), is to achieve exactly the same effect as that outlined by the hon. Member for Belfast East (Naomi Long) in respect of her amendments. The Clerks said that amendment 20 would be the best way to achieve the principle of one Member, one Chamber. However, I am open to supporting the other versions that would get us to the same point, namely the amendments tabled by the hon. Member for Belfast East. I also note the extension of that principle in the amendment tabled by the hon. Member for Amber Valley (Nigel Mills), which refers to the European Parliament.
Oddly, the provisions on Members of Oireachtas Eireann being Members of the Assembly date back to a situation involving a prominent and senior member of my party, Seamus Mallon, who was deputy leader of the SDLP. In the 1980s, his membership of the Northern Ireland Assembly was challenged on the basis that he was also a Member of Seanad Eireann. Of course, when my party stood in the election to the Assembly in 1982, we made it clear that we would not take our seats and would not sign on for salaries, allowances or anything else. It is therefore not comparable to Members of Sinn Fein not taking their seats here, but taking allowances. When Seamus Mallon was subsequently appointed to the Seanad, a member of the Ulster Unionist party saw fit to make a legal challenge to force a by-election so that a Unionist could take the seat in an Assembly that had no real powers.
On the back of that controversy, Sinn Fein made the case in the early years of the peace process for a gratuitous piece of legislation that was put through this House, which provided that Members of either House of the Oireachtas could be MPs and/or Members of the Northern Ireland Assembly. Sinn Fein was the only party that sought that piece of legislation. That was because, in building the party and selling itself to its supporters, it wanted to use its heavy hitters as abstentionist MPs and as candidates for the Dail. It was entirely a confection to support Sinn Fein’s ambitions and pretentions in building the party and the movement. This House was convinced to legislate on that basis. Of course, Sinn Fein has not activated the change it sought, and rightly so. Whenever its more prominent elected representatives in the north decided to seek election in the south, they did so on the basis of giving up their seats in the north. They too seemed to accept the standard of one Member, one Chamber. We should therefore ensure that when there is an opportunity to legislate, we should take it.
The Government were right to move on the dual mandate between Westminster and the Assembly, not least because they had served notice that if the parties did not move to rectify the situation, they would move to legislate. They have done that and I support them. As I indicated on Second Reading, I took my own decision on the dual mandate and it is right that legislation sets a clear, common standard.
Dr William McCrea (South Antrim) (DUP)
Will the hon. Gentleman clarify how that view sits with his party leader, the hon. Member for Belfast South (Dr McDonnell), who sits both here and in the Assembly?
Mark Durkan
That is permitted under the legislation. In my view, legislation should clearly not allow that; a party leader should not be under pressure to say that, because they are in one and can be in the other, they should sit in both because the law allows it. There is pressure on people because being able to sit in both helps to protect a second Assembly seat in the constituency, but such tactical considerations should not enter into it. The best way to spare everybody from those sorts of considerations is to have one clear, uniform standard in law.
Of course, the hon. Gentleman’s party has Members who sit in both the Assembly and this Chamber. Indeed, they have one Member who sits in Westminster and the Assembly while serving as a Minister in the Executive. I have always argued—when I was a Minister and subsequently —that any Minister should solely be a Member of one Chamber and be fully accountable to that Chamber. I have consistently argued that one should not be a Minister in one Chamber and a Member of another.
Mark Durkan
No, that is not a fact. When I was a Minister in Northern Ireland I was not an MP. I became a suspended Minister—I was a suspendee, not a suspender —in October 2002, and I was not elected to this House until 2005. I subsequently made appointments when I was a Member of this House; I was the leader of my party and had the power to appoint Ministers. I made it very clear well in advance that I could not appoint myself as a Minister, no matter how many seats we had won and how many Ministers we might have had to appoint in the Assembly. I was an MP and could not be a Minister. That was our party rule, and the party standard has been consistent. Similarly, when my hon. Friend the Member for South Down, who was a very able Minister for Social Development in the Executive, was elected to this House, she resigned as a Minister. That was consistent with that principle: we have consistency and form on this issue.
Regardless of what justification Members or parties might be able to give for having coped with the dual mandate in the past, circumstances are different now. We have an absolutely settled process. It is important to give the public the confidence that we believe it is a settled process by moving on dual mandates. That would indicate that we do not believe that there is any uncertainty surrounding the institutions which might give an excuse for having a foot in two Chambers.
Lady Hermon
I am grateful to the hon. Gentleman for taking an intervention, but may I run one suggestion past him? I have never had a dual mandate and I do not particularly favour them. However, in the context of a devolved Administration in Northern Ireland that is sustainable and will continue, is there not an argument to be made for the Finance Minister in that devolved Administration to be present in this House, particularly for the Budget, financial statements and the comprehensive spending review, so that he or she can address the key issues across the Dispatch Box to the Chancellor of the Exchequer on that day and on those issues?
Mark Durkan
No, having been Minister for Finance and Personnel in Northern Ireland, I do not believe there is such a compelling reason. I would have regarded it as a distraction from my full-time day job if I had been operating in another Chamber as well. The limited opportunities we have here to ask questions on a statement or the Budget do not compare to the effective opportunities a Minister and his or her officials have via the other channels to the Treasury, such as joint ministerial committees that exist for engagement between Governments. Those are adequate for Scotland and Wales, so I do not think we should create an exception in Northern Ireland if someone happens to be the Minister for Finance and Personnel.
Mark Durkan
The hon. Gentleman has obviously missed my point. We want to legislate so that there are no special cases, no special pleading and no tactical pressure on anybody, be they a party leader or anybody else. That is why we should legislate to a standard, not on an ad hominem basis.
Mr Gregory Campbell
I thank the hon. Gentleman for giving way; he is being very generous with his time. He alluded earlier to a direction of travel and the destination we all want to reach: a single mandate for each Member. I think there is unanimity there, but would he agree that Scotland and Wales seem to have got there without the need for legislation?
Mark Durkan
Perhaps they did, but the fact is that notice was served to the parties in Northern Ireland that, if such a change did not happen, the Government would move to legislate, as they have now correctly done. It would have been wrong for the Government to give the signal, and then not to use the Bill to address the matter. We discussed this on previous Bills, because it came up whenever we considered the question of constituencies and voting systems, as well as House of Lords reform.
Paul Murphy (Torfaen) (Lab)
Further to the last intervention, my hon. Friend will be aware that the Bill, if passed, will apply to Northern Ireland. Similar legislation will be passed for Wales, but none will be passed for Scotland.
Mark Durkan
That would be a discrepancy as well. If the principle is one Member, one Chamber, it should apply all round. Perhaps the right hon. Gentleman is suggesting that those of us who tabled amendments should have included the Welsh Assembly and the Scottish Parliament, so that there was no question of somebody deciding to be in several Chambers.
Naomi Long
That was discussed at length in Select Committee. One reason we did not do it was that, this being the Northern Ireland (Miscellaneous Provisions) Bill, there would have been no argument for including it. I think the Secretary of State for Wales is intending to introduce legislation creating that bar, although whether the Secretary of State for Scotland chooses to do the same is a matter that perhaps he could clarify better than me. Either way, this matter should be resolved.
Mark Durkan
I fully take the hon. Lady’s point; it was a helpful intervention, but the point that the right hon. Member for Torfaen (Paul Murphy) made was also a good and valid one. If we were using the Bill, in the pedantic sense, to make it truly perfect and to cover all the options, we could have included the Welsh Assembly and the Scottish Parliament, but we did not, for the sorts of reasons she mentioned.
If we are moving, rightly, towards precluding dual mandates in this Chamber and the Northern Ireland Assembly, the same should apply to the other place as well. If it is to be one Member, one Chamber, it would be wrong if somebody could be in another Chamber in this Parliament—a Chamber which, because of the strange rules, procedures and fixations that people have here, seems at times to have more impact on legislation, by way of amendments, than this one.
The argument then arises about why somebody should be allowed to sit in another Chamber simply because they are not elected and have no mandate. The fact that they are there on an unelected basis does not make their dual membership of two different legislative Chambers any more acceptable than it would be for somebody who had been elected to both Chambers. Indeed, we have heard the Democratic Unionist party make the argument that there is more legitimacy if someone is elected to two Chambers, because the public, in electing that person, know that they are in two Chambers and knowingly give them that mandate. In many ways, the least defensible position is to say that someone can be an elected Member of one Chamber and an unelected Member of another at the same time.
The same thing has to apply to the Oireachtas. If people have rightly been precluded from being a Teachta Dala at the same time as being a Member of the Assembly, they should also be precluded from being a Member of the Seanad Eireann at the same time, whether as a Taoiseach’s appointee or as someone elected through the panels by the electoral college system that exists in the south for the Seanad. Again, if people are sitting in one legislative Chamber, that should be their sole place. That is the point of amendment 20 and the amendments tabled by the hon. Member for Belfast East.
I fully take the point made by the hon. Member for Amber Valley, who wants to extend that position to the European Parliament. Some of us had thought that that was already provided for, but I understand that it applies more specifically to membership of this House—to national Parliaments, as opposed to regional or other territorial Assemblies. In practice, when the parties in Northern Ireland have run Members of the Assembly as candidates for the European Parliament in recent times, they have usually done so on the basis of a full declaration that, if elected to the European Parliament, that candidate’s membership of the Assembly would cease. However, in taking a belt-and-braces approach, the hon. Gentleman makes a good point with amendment 3.
I repeat the point that if we want to have one Member, one Chamber, we should apply that to the second Chamber of Parliament and the Oireachtas, as well as to the first Chambers of both.
Mr Donaldson
We do not have an amendment in this group, but I want to speak to a number of the amendments that have been tabled.
I, along with others here, held a dual mandate for some time, being a Member of Parliament and subsequently being elected to the Northern Ireland Assembly. At times I think it pushes the boundaries a little to suggest that there is huge public opposition to the concept of dual mandates. When I was elected for two terms in the Assembly, I was a Member of Parliament, but I was elected—I do not share this for any reason other than to illustrate my point—with the highest number of first preference votes of any candidate in the Assembly elections on both occasions. No one voted for me on the basis that they did not know that I was already a Member of Parliament, yet they deemed it appropriate to elect me to a second Chamber. The idea that the public were always entirely opposed to dual mandates is therefore spurious, because the facts do not support it.
Because of the development of the peace process in Northern Ireland, we needed people in the Assembly who had the experience of serving as Members of Parliament. That was important. I recognise that we have now moved on and, on the basis of voluntary undertakings given by parties in Northern Ireland, we now have very few Members who hold a dual mandate between this House and the Northern Ireland Assembly, and by the next election there will be none. To say that there is a need for these changes is therefore stretching the point, to say the least. Indeed, this issue would be way down my list of priorities for inclusion in the Northern Ireland (Miscellaneous Provisions) Bill.
Mr Gregory Campbell
The hon. Member for Foyle (Mark Durkan) made the point that the Government said they would legislate on moving to a single-mandate position only if the parties did not move in that direction voluntarily. Is it not the case that the parties have so moved, yet the Government are still proceeding with the measure?
Mr Donaldson
My hon. Friend makes a valid point. The Government have already legislated—as, I think, the Assembly might have done—to ensure that a Member of this House who is also a Member of the Northern Ireland Assembly receives no pay for holding the office of Assembly Member and has a much reduced office costs allowance. There is already provision to deal with the issue. The reality is, however, that the proposal is also incorporated into this Bill.
I would like to say on behalf of the Democratic Unionist party that we oppose the amendment that would exclude Members of the House of Lords from the opportunity of serving in the Northern Ireland Assembly, and we have valid reasons for doing so. The House of Lords is an appointed second Chamber in the United Kingdom Parliament. In making appointments to it, there is a desire to achieve a degree of regional representation. I happen to think that it is to the benefit of devolution to have a connection between this Parliament and the devolved legislatures. I accept that it is not preferable for that to involve Members of this House, because we are elected and there is the question of the dual mandate and because certain issues can arise at constituency level.
Those matters do not pertain to Members of the House of Lords, however. Even in a reformed House of Lords, there would be value in making provision for some Members of the devolved legislatures also to be represented, if they so chose, in the House of Lords. That would help to bind the United Kingdom together, and to recognise the special position of the House of Lords. As a body, it is not necessarily representative in geographical terms, but it is widely representative of society. Why should we not have in the House of Lords legislators from the devolved regions of the United Kingdom? We do not accept the need to amend the Bill to exclude Members of the House of Lords from having that dual representation—if not a dual mandate—in the separate Chambers.
Lady Hermon
The House of Lords is a key part of the legislature of the United Kingdom and, as someone who is very keen on devolution, I believe that the Assembly is an essential part of the Government in Northern Ireland. Can the right hon. Gentleman honestly say, with his hand on his heart, that a person—or multiple people—sitting in the Assembly and in the House of Lords can do justice to both roles and sit in both places simultaneously?
Mr Donaldson
I can say, hand on heart, that I believe they can. When I was a Member of the Assembly and of the UK Parliament, my attendance record on Committees in the Assembly was far superior to those of single-mandate Members of the Assembly. When I chaired the Assembly and Executive Review Committee, I had a 100% attendance record—I was the best attendee on the Committee. We have to weigh these things up and strike a balance.
Naomi Long
I certainly do not dispute the fact that the right hon. Gentleman’s Assembly Committee attendance record was good, but we should look at the disparity between the average voting records of those in this House who do not have a dual mandate and those who do. According to “The Public Whip”, the average voting record of those of us who do not hold a dual mandate is 413 to 414, compared with 259 to 260 for those who do have a dual mandate. The Assembly might not suffer, but the attendance of those Members in this House seems to do so. I am not suggesting that that is the only metric we should take into account, but it is an important one.
Mr Donaldson
I come back again to the issue of mandate. If the people of East Londonderry decided that they wanted someone other than the current Member to be their MP, because the current Member also happens to be a Member of the Assembly, they will have made that choice. The reality is that the choice they made at the last election was to elect someone who was also a Member of the Assembly and who has, by the way, an excellent voting record in this Chamber and participates well in debates. In all those issues, we have to strike a balance. What we are recognising is that we accept the argument that in respect of Members of this House there is a greater weight of opinion that says that it is difficult to do both tasks. In respect of the House of Lords, however, I believe that having a small number of MLAs who also happen to be Members of the House of Lords is something of value to the Assembly and to the people of Northern Ireland.
Mr Gregory Campbell
I know this is probably academic, as I recognise that we are moving in the same direction. The hon. Member for Belfast East (Naomi Long) singled out voting records. That is one and only one element of performance. If we look at oral contributions, written questions and the tabling of motions, we see a very different picture. It is worth looking at theyworkforyou.com which can show us who is performing well and who is not.
Mr Donaldson
I would also say that a constituent, whether it be in Limavady or Lisburn, is well able to make a judgment about whether the person they elected to a particular chamber better serves the interests of the people by being here to vote on the Mersey Tunnels Bill, which is of no relevance whatever to the people of Limavady or Lisburn, or by dealing with an issue in the Northern Ireland Assembly that is of relevance to them.
We have moved on from the question of dual mandates between the House of Commons and the House of Lords or the House of Commons and the Northern Ireland Assembly, but I do not believe that the same arguments apply in respect of being a Member of the House of Lords and being a Member of the Northern Ireland Assembly. As I have said, I think there is real value to the Assembly in having a small number of Members who are also Members of the United Kingdom Parliament by virtue of their membership of the House of Lords. Equally, I would hope, the House of Lords can see the value of having that sort of representation, albeit on a small scale.
We nevertheless support the amendment tabled by the hon. Member for Amber Valley (Nigel Mills) because the European Parliament is an elected chamber, and we draw a distinction between an elected and an appointed chamber. If the argument is made that it is difficult to be in London and in Belfast, I would say that it is even more difficult to be in Brussels or Strasbourg and in Belfast. None of the Northern Ireland parties pursue the option of having their MPs as an MLA, but if the argument goes that we are legislating to prevent dual mandates for the House of Commons because we want to prevent it happening in the future, I suggest that the same principle should apply to Members of the European Parliament as well. It may not be the practice at the moment, just as I believe the practice of dual mandates in this House is coming to an end, but if preventive measures are called for, we have to be consistent and look at the position of the European Parliament.
We are minded to support amendment 3, tabled by the hon. Member for Amber Valley, but to oppose the amendments that include the House of Lords in the excluding provisions. We believe it is right to include the Irish Parliament within the exclusions, given that it is an elected body, and I think that the hon. Member for Foyle (Mark Durkan) is seeking to extend that to include the Irish Senate.
Mark Durkan
The right hon. Gentleman will recognise that the Irish Senate is not actually elected in a public sense. Indeed, some of the seats are appointed by the Taoiseach. Those of us who are backing these amendments are being consistent: whether or not a chamber is elected is not what matters; what matters is whether it is a legislative chamber.
Mr Donaldson
That is a fair point, but my party approaches the matter from a very different perspective. The Parliament of the Irish Republic is in a separate jurisdiction, outwith the United Kingdom, and we have always taken the principled view that a member of a Parliament that is outwith the United Kingdom’s jurisdiction should not be entitled to membership of a devolved legislature or of this Parliament.
Jim Shannon
My right hon. Friend is making a valid point. Surely it would be ludicrous for a member of the Northern Ireland Assembly also to be a member of Dail Eireann or of a Senate with a different constitution, a different aspiration, and a different way of looking at things from an Assembly that is in the United Kingdom.
Mr Donaldson
Indeed. I do not know what affirmation new members of the Irish Senate make, but it is surely a contradiction for people to come to either of the Houses of Parliament here and affirm their allegiance to the United Kingdom, and then to go to the legislature of another country and affirm their allegiance to that country. That is why, on principle, we cannot accept the concept that a Member of the Parliament of another country could also be a member of either a devolved legislature in the United Kingdom or, indeed, of this Parliament.
Ms Ritchie
The hon. Member for Belfast East (Naomi Long), my hon. Friend the Member for Foyle (Mark Durkan) and I firmly believe in one Member, one Chamber. I declare an interest as a former Member of, and Minister in, the Northern Ireland Executive and Assembly, and also as a former district councillor in Northern Ireland. As such, I know very well that Members must serve only one Chamber if they are to do the job properly and adequately.
The proposal to extend this legislation to the upper chambers, the House of Lords and the Seanad in the Irish Parliament, has my full support. I believe that there is a certain amount of hypocrisy in contending that dual mandates must end while ignoring the practice in respect of other legislative bodies. The current approach is inconsistent, and leaves us with an untidy arrangement.
There was a period during the early years of the Assembly—back in 1998—when dual mandates were an important part of the political system, but given the changes in our political system in Northern Ireland and its evolving maturity over the past 15 years, there is clearly a different political climate as well as a different expectation on the part of the body politic. While I am not convinced that this legislative route is the most appropriate, the direction of travel is clear, and my party supports it.
As we move towards the new system, however, we must ask why we are preserving the practice in some arenas but not in others. Why are we creating this imbalance? I accept that the House of Lords operates differently because it has no constituencies, but the important point—emphasised a few minutes ago by my hon. Friend the Member for Foyle—is that it is a legislative Chamber. If we are legislating to prevent people from being members of two different legislatures, that is exactly what we should do.
Naomi Long
Surely part of the rationale for the structure of the House of Lords is the fact that it can serve as a revising Chamber, and scrutinise legislation in a robust way, because its Members are not being lobbied by constituents as we in the House of Commons are when we are dealing with legislation. Could not an electoral mandate expose Members of the House of Lords to that kind of lobbying, and prevent them from acting as we expect a Lord to act?
Ms Ritchie
That was a useful intervention, because it illustrated the role of Members of the House of Lords. While they have clear legislative responsibilities, they also do very in-depth work. We can cast our minds back to the work done in respect of the Welfare Reform Bill, and its ping-pong nature, with the Bill going back and forth between us. Lords come from many varied backgrounds, but they do their work. The Lords may not be elected, but they do have legislative responsibilities, which naturally would clash with the responsibilities of an elected Chamber such as the Northern Ireland Assembly. That is the very problem that this measure is meant to address. I would not hold my breath about this House finally taking on the much-needed reform of the House of Lords, but if, and hopefully when, it does, would it be desirable that people can run for election and hold office, namely by having a dual mandate between the Assembly and an elected House of Lords?
It is important that this issue is sorted out now within the terms of the current Bill. I note that that position is supported by the Northern Ireland Affairs Committee. In so doing, we come to this issue with the premise of one Member, one Chamber. Having had the experience of serving in other Chambers, and knowing the extent and breadth and depth of work and investigative intelligence that is required of Members in all those Chambers, particularly in terms of legislation, we not only support our own amendment—amendment 20—but we also support those of the hon. Member for Belfast East.
Mr Dodds
On clause 3 and the ending of the dual mandate between Members of this House and Members of the Assembly, our party made it clear some time ago that we would be bringing this matter to the point that by 2015, as was recommended, dual mandates would be ended. We are working towards that, and it needs to be made very clear in this Committee tonight that this Bill does not end dual mandates; the parties in Northern Ireland are ending dual mandates, and they are doing so for the reasons that have been advanced, which are that we have now moved forward to a position where politics is much more stable, and the Assembly and the Executive are up and running. We are therefore in a very different position from the one we were in only a short time ago, when dual mandates were not only preferable, but essential, for the reasons laid out very clearly by my right hon. Friend the Member for Lagan Valley (Mr Donaldson) and because of the leading political figures in this House who were playing the important—the crucial—role of bringing about peace, stability and devolution in Northern Ireland. That would not have worked if there had not been that dual mandate at that time; that is absolutely the case.
There is a tendency sometimes to look at situations from the perspective of today, rather than looking at the context of the time. I want to pay tribute to all Members who held dual mandates at that time. I want to do so not because I was one of those Members who held a dual mandate, but because they put themselves and their families under enormous stress and strain in terms of the work load, but still carried out an immensely powerful job, as was recognised through the votes of the people, who consistently voted for them. Therefore it is only right and proper to pay tribute to those politicians who did that in very difficult circumstances, and who had their pay cut, we must remember—it was not as if they were doing it for two salaries. It was done for the reasons set out, and also because, to return to an earlier discussion, there were very real threats against politicians, and not too many people were prepared to come forward and put their head above the parapet. Every Member in our party, and Members of other parties as well, including the SDLP and the Alliance, suffered very severe threats at that time, and actual attacks on their person, their offices and on people close to them. That was the reality of the situation we lived in.
Naomi Long
That point was also made by the right hon. Gentleman’s colleagues on Second Reading, and it is important to put on the record that nobody is suggesting that people who served during that period did not have a justification for doing so. Those who seek fast reform make the point that that period is now at an end.
Mr Dodds
Yes, that is the point that I was making and it is important to put it on the record. We are talking about the difficulties of having a double mandate, but I recall that back in the late 1970s and during most of the 1980s the original three MEPs from Northern Ireland, Ian Paisley, John Hume and John Taylor, had three mandates. Nobody is going to say to me that they did not do a very good job for Northern Ireland in Europe. I know that there was a different context and a different set-up then, but they worked very well together. I had some experience of that through working with Ian Paisley in the European Parliament, and I know that the hon. Member for Foyle (Mark Durkan) will know about it from first-hand experience of working with John Hume. That arrangement was necessary and they did an immensely powerful job for Northern Ireland. Indeed, I recall one of those MEPs, not the one from my party, saying that on one occasion he managed to speak in Strasbourg in the morning, in the Belfast Assembly in the afternoon and in the House of Commons in the evening. I asked him whether he used the same speech, but it was not a single transferable speech. Those were different days and we accept that we have moved forward, but it is important to put on the record where we are coming from.
Let me deal with the issue of the House of Lords. The explanatory notes talk about “dual mandates” and people prevented from being a Member of both this House and the Assembly, as is right and proper. What mandate does a Member of the House of Lords have? They do not have any mandate. We have a mandate because we are elected, but a Member of the House of Lords has none because they are appointed. So this legislation does not apply to the House of Lords because it is in a different position. If the House of Lords were elected, there would be a strong argument for saying that we should be legislating to prevent dual membership there, but it is not elected and it is different. Indeed, that was one of the reasons why people opposed reforming the House of Lords, because to do so would put it on the same level as, or make it equivalent to, this House, and that would threaten the authority of this House. So this matter is summed up in the very phraseology used about ending “dual mandates”. It is right and proper to do that in respect of the House of Commons, but Members of the House of Lords do not have a mandate. They have a legislative role, but they do not have a mandate.
Mark Durkan
Is the right hon. Gentleman not trying to create a class of Members of the House of Lords who are Members of that House and sit there without a mandate, but who nevertheless have a mandate by virtue of sitting in another Assembly? He is trying to have it both ways; if he is making a virtue of their having no mandate, leave them without a mandate.
Mr Dodds
I think that when the hon. Gentleman reads that over again in Hansard, he will perhaps want to reflect on that contribution.
It is clear that we are legislating to end dual mandates. As Members of the House of Lords do not have any mandate, it does not apply to them. In any case, for the other reasons that have been set out by my right hon. Friend the Member for Lagan Valley, there is a difference. Interestingly, when the Secretary of State for Wales made his announcement in March, he did not include a bar on membership of the House of Lords and the Welsh Assembly; he confined it to the House of Commons. So for all those reasons, the Government are taking the right approach.
On the issue of membership of the Irish Parliament, we very much welcome the Government’s decision to follow the position of the Select Committee and to take on board the representations made on that matter. It is right and proper that that should be the case.
Finally, let me turn to the issue of non-representation—I raised this on Second Reading and return to it now—by people who have seats in this House but who do not take them and do not do the work of parliamentarians. The Minister will know that the issue has been raised and is being pursued. The Bill is not necessarily the vehicle or the means by which it should be pursued, but the Minister should rest assured that, as we talk about dual mandates and about representation and people being fit for jobs and about the jobs they are or are not doing, there remains the outstanding scandal of all—the Members of Parliament who are elected, who get money to run their parliamentary business and who get representative money for which they do not have to account in the way that we do as parliamentarians and that they can use for party political purposes. That is an issue that the House still must, and, I am sure, will, address.
Mike Penning
It is a pleasure, Ms Clark, to work under your chairmanship for the first time this evening. Yet again, we have had an interesting and wide-ranging debate—some of it within the scope of the Northern Ireland Office’s remit and some outside it. Perhaps I can address straight away one of the areas of debate we have had this evening because, although I fully respect the view, it falls outside the scope of the Bill and of my portfolio. The question of whether an MLA can sit in the European Parliament is a matter for the Cabinet Office and the UK Government as a whole. My hon. Friend the Member for Amber Valley (Nigel Mills) can take it up with the Cabinet Office, if he wishes, but I have been strongly advised that it falls within its remit and not mine and that I therefore cannot accept the amendment.
Mike Penning
If I may, I will make some progress. We have a lot to get through this evening and not a lot of time, even though it looks like we do. We have not made much progress down the list of amendments.
The Government listened to the Select Committee and changed our mind about whether someone could be an MLA and a Member of the lower House in the Republic. We listened carefully to the debate and accepted that suggestion.
I completely agree with the right hon. Member for Belfast North (Mr Dodds). My personal view, as well as that of the Government, is that there is a difference between a person elected to this House with a mandate—the words in the explanatory notes were put there for a reason—and a Member of the House of Lords. Members of the House of Lords do not have a mandate: they are not elected; they do not have a constituency; they do not have constituents. However, the Government’s view is not fixed and if, when the Bill passes to the other place, the House of Lords has a view on that, we will consider what comes back to us. At present, the reason behind the change is to do with mandates and not to do with whether Members are in another Chamber.
Lady Hermon
I want to draw the Minister’s attention to the fact that the explanatory notes, so beautifully quoted—selectively—by the right hon. Member for Belfast North (Mr Dodds), go on to quote the Committee on Standards in Public Life, which reported in 2009 after the horrendous scandal of MPs’ expenses. It states that
“the Committee questions whether it is possible to sit in two national legislatures simultaneously and do justice to both roles”.
It does not use the word mandate at all and uses the word “legislatures”, so will the Minister revisit that?
Mike Penning
It is very important that we consider what the electorate have decided to do. The electorate elect people to this House and to the Legislative Assembly. I pay tribute to those who had more than a dual mandate when there was a need for people to put their heads above the parapet and stand for office when things were enormously difficult in Northern Ireland. We have moved on. We accept that MLAs should not be able to stand for the lower House in the Republic, but we do think, at present, that they should be able to sit in the Lords. MEPs are a matter for another Department, on another day, and another Bill, in the Government’s opinion.
Mark Durkan
Will the Minister address the issue of membership of Seanad Eireann?
Mike Penning
Exactly the same applies: that situation will be addressed, should the issue of the Lords be addressed. At present, the Government are not addressing the issue of the Lords; we will oppose the amendments on that subject. The Government oppose amendments 10 to 17, and recommend that clauses 3, 4 and 5 stand part of the Bill.
Naomi Long
I think the argument regarding dual mandates in the House of Commons and the Assembly has been fought and, largely, won. People may well say that the public do not mind double-jobbing, but it was a live issue in the 2010 elections, which is why all parties made the commitment publicly in their manifestos, before those elections, that they would not maintain dual mandates. People were elected on the expectation that they would leave the Assembly during this term. Everyone has said that that is the point that we want to get to. I know why I feel the need for legislation, but I do not know why the Government do. Perhaps it is because every time we discuss the matter, even those who say that they are in favour of such legislation in principle continue to put up quite a spirited defence of double-jobbing—and are still here to do so, three years after the last Westminster election and two years after the last Assembly election. However, I would not want to speak for the Government on that point. It is important that the Government, having made a commitment to legislate on this subject, follow through on that.
On the other amendments that I have tabled, the issue for me is whether we are applying the rule consistently. The hon. Member for North Down (Lady Hermon) made a compelling point: the concern when the issue was raised was not simply about dual mandates, although that became a shorthand for it; it was about serving in two legislatures and the challenge that presents with regard to people being able to do both jobs properly. There is a further point, in that in the House of Lords, the expectation is that people are not fettered or influenced by constituency responsibility. However, if they have that responsibility because they have an elected mandate in another legislature, they are no longer free in that way. That distinguishes elected posts from other forms of employment outside the House of Lords in an important, fundamental way.
Mark Durkan
Does the hon. Lady recognise that in the context of Northern Ireland, there is a significant point to make about the House of Lords, in that no nationalist political representative takes a seat there? My party will not nominate to the House of Lords, precisely because its Members are not elected, and because of various other constitutional attributes it seems to have. Only Unionists or others who are not nationalists go to the House of Lords. If we make an exception for the House of Lords—an exception that I would not seek to make for Seanad Eireann—we end up with unequal legislation, because it ends up being only Unionist Members, and not nationalist Members, who are able to sit in two Chambers.
Naomi Long
I respect the hon. Gentleman’s right to advance that case, but it is not my case, or a case that I would choose to make, because if people are elevated to the House of Lords, they have the option of taking up that post. They are not barred from doing so because they have a nationalist perspective, or an Irish Republican perspective, for that matter.
Mr Donaldson
Will the hon. Lady accept from me that there is at least one Member of the House of Lords who would claim to come from a nationalist background and whose spouse, I believe, happens to be a member of the same party as the hon. Member for Foyle (Mark Durkan)?
Naomi Long
I understand the point that is being made. However, it is not my job as a member of the Alliance party to pigeonhole Members of the House of Lords and to count Unionists and nationalists, given that I do not want elections to be conducted by such distinctions.
Mark Durkan
Let us be clear. In my remarks I referred to a nationalist representative. Somebody who was appointed as a working peer because of the competence and skill they have and the clear independence and service to the whole community that they demonstrated against much grudging from other quarters is entirely able to defend themselves as being there not as a representative of my party or even with the designation that my party confers on itself in the Assembly.
The Temporary Chair (Katy Clark)
Order. I remind all hon. Members that this is a summing up at the end of a debate. We are not commencing the debate again and it is not a second speech, so I ask the hon. Lady to take that on board.
Naomi Long
Indeed. I was on my last sentence when I took the intervention.
I believe that the exclusion of Members of the House of Lords, the Seanad and the European Parliament from sitting in the Northern Ireland Assembly is an important point. Having listened to what the Minister said, I do not accept that there is a strong argument for maintaining the current position and I seek to press amendment 10.
Question put, That the amendment be made.
Mr Dodds
I beg to move amendment 4, page 6, line 37, at end add—
‘7B The alteration of the number of members of the Assembly required to express
their concern about a matter which is to be voted on by the Assembly, such
concern requiring that the vote on that matter shall require cross-community
support.
This paragraph does not include the alteration of that number to a number
exceeding 30.’.
The Temporary Chair (Katy Clark)
With this it will be convenient to discuss the following:
Amendment 5, page 6, line 37, at end insert—
7B The subject matter of Sections 16, 17, and 18 of this Act.
‘(2) In Schedule 2, paragraph (b) after “sections” insert “16, 17 and 18”.’.
Clause stand part.
Mr Dodds
The purpose of clause 6 is to move the decision on the reduction in the size of the Northern Ireland Assembly from the category of excepted matter to that of reserved matters, which I think has received reasonable assent in Northern Ireland. The purpose of amendments 4 and 5, which stand in my name and those of my right hon. and hon. Friends, is simply to move into the category of reserved matters, as opposed to excepted matters, decisions relating to the appointment of the Executive and the way it is formed. Given that the number of MLAs will be reduced, we propose that all matters pertaining to the appointment of the Executive, its composition and make-up and the way the First and Deputy First Ministers are elected, and matters pertaining to opposition in the Assembly, should also be reserved matters. We believe that this would allow any political agreement negotiated by parties in Northern Ireland to be legislated for in the Assembly. It would give the Assembly the tools not only to discuss these matters, which do need to be discussed by the parties in Northern Ireland, but to agree them, of course by cross-community vote and by the normal mechanisms that require that to happen in the Northern Ireland Assembly. That would act as a bit of an incentive to allow and promote greater debate in relation to these matters.
Paul Murphy
I am grateful for the opportunity to say a few words in Committee about this very important, if small, Bill. I feel a little in fear of being in splendid isolation on these Benches, although I am also surrounded by a phalanx of Northern Ireland politicians—something that I am not entirely unused to.
This has been an interesting debate. Perhaps, in referring to clause stand part, I could reminisce a little about why the Assembly has a membership that many believe is rather large, at 108. We could compare that with, for example, the Welsh Assembly. Wales has a population roughly double that of Northern Ireland but its Assembly has roughly half the number of Members of the Assembly in Belfast. There is a reason for that. It came about, as it so happened, on Maundy Thursday 1998 at 3 o’clock in the morning or thereabouts, when we struck an agreement with the parties—although of course at that stage the DUP was not involved; I think they were getting rather cold marching to Stormont in the snow.
As my hon. Friend the Member for Foyle (Mark Durkan) will recall, the initial belief was that there should be a membership of 95, but in fact it went up to 108. The final figure was reached quite quickly by the then Prime Minister, and we as Ministers, on the basis that although the idea of having five Members per constituency, making a total of 95, had some merit, increasing it to six would give smaller parties that had been involved in the talks on the peace process the opportunity to be represented in the Assembly—the Women’s Coalition, the Progressive Unionist Party and others. That was sensible. It related to the fact that we already had ready-made constituencies in Northern Ireland that could be used as the basis of the boundaries for the new Northern Ireland Assembly.
In the previous debate we heard interesting reference to how things have moved on. I believe that if we had not had people in the Northern Ireland peace process and political process who did not have a dual mandate, those processes would not have happened, because those people brought an invaluable wisdom and a richness of experience to the talks. Incidentally, I am not persuaded that we should be legislating about who should or should not be allowed to stand for the House of Commons or for the Assembly, but that is another issue, and we have just dealt with it. The point is that those decisions were made at the time to ensure that the process went on. I think that the 108 figure was right for the time, because it did what it had to do. Now that times have moved on, however, it seems to me that we should ask whether that figure is an encumbrance. Is it too big? Is it too expensive? Does it work? I think that this is a matter for the political parties in Northern Ireland to decide, as opposed to this place. It should be the Northern Ireland Assembly that decides whether it should be smaller.
Incidentally, when the Government tried a year or so ago to change the boundaries of our parliamentary constituencies they completely forgot about the knock-on effect it would have on Northern Ireland. Happily, that measure has disappeared, but it would have had a profound effect on the balance in Northern Ireland. The Government had not thought about that when they considered the parliamentary boundary review, but that is another issue.
It is for the parties in Northern Ireland to decide on the size of their Assembly and that is why I support clause 6, but I issue one caveat. I understand—had I read the Bill more thoroughly I would know whether this is the case—that the Secretary of State will have to endorse such an agreement. I think that is right, because the Good Friday agreement, the St Andrews agreements and the entire peace process were guaranteed by the Irish and British Governments and the Irish and British Parliaments, so that is another important factor. I will only be convinced, however, when the Secretary of State or the Minister, in response to this or any future debate, make it absolutely clear that no such changes should be made unless they achieve the consensus of all the parties in Northern Ireland as to what the figure should be.
I understand that the Assembly has a mechanism—the Assembly Commission, which is representative of all parties—that could initially consider any representations. Whatever happens, the decision should be reached by consensus, discussion, negotiation and agreement, and only then should the Secretary of State give her approval. Nevertheless, the principle is a wise one and I support it and hope it will be carried if it is put to the vote.
Mark Durkan
It is a pleasure to follow the right hon. Member for Torfaen (Paul Murphy), who chaired the strand 1 negotiations leading to the Good Friday agreement. The very important and patient role that he played throughout the negotiations is not often acknowledged.
Clause 6 deals with possible changes to the size of the Assembly and the right hon. Gentleman has explained why it ended up at its current size. He has corroborated many of the points that I made on Second Reading about how the figure of 108 was arrived at. The decision was made ultimately by the British Government. Some of us favoured a top-up scheme, but I remember the right hon. Gentleman and the then Prime Minister telling us during the night and early morning that the reason why they saw the option of six Members per constituency as offering the best chance of accommodating smaller parties was that if they went with the option of a top-up of 10 it would be too complicated for them to work out all the different permutations of top-ups. That was significant at that stage of the negotiations. We need to understand why that decision was taken. The right hon. Gentleman has rightly said that it can be revised and reviewed; indeed, the review mechanism of the agreement itself allows for that.
I do not think that there is any disagreement between the parties that the size of the Assembly needs to be addressed. The Assembly and Executive Review Committee has previously kicked it about, but we have still not seen any substantive moves. There are sensitivities involved in decisions about the size of the Assembly. A reduction to five seats per constituency would probably be broadly supported. A reduction to four seats per constituency would be much more sensitive, because it would make a serious difference to the capacity for proportional representation.
There is a question over the degree of gerrymandering that will be possible when the Assembly or the key parties therein have the power to settle the number of seats per constituency. The parties could abuse that power. That is why it is right that there should be a reserved power for the Secretary of State. However, some of us are not reassured that the Secretary of State would use that reserved power in an alert or effective way, because when Sinn Fein and the DUP come along, the attitude of the Northern Ireland Office seems to be, “Whatever you’re having yourselves.” That seems to account for sufficient consensus on such matters.
Naomi Long
In fairness to the current Secretary of State and the NIO as currently constituted, will the hon. Gentleman reflect the fact that what he describes has always been the case, even when his party and another party were in the position in which the DUP and Sinn Fein now find themselves?
Mark Durkan
I am not aware that we tried any such thing. I certainly never agreed to any such moves, not least when I was Deputy First Minister. When my fellow leader suggested that there were things that we could do to ensure better political patronage, I made it very clear that I was not for doing any such thing, regardless of what the NIO wanted to do. I used to spend much time in disagreement with NIO Ministers who had wheezes that they were working out with the First Minister. I did not go along with any of the Jonathan Powell, John Reid, David Trimble, Tony Blair wheezes on further ensconcing the position of the then leader of the Ulster Unionist party. It seemed to me that messing about with the institutions and playing those sorts of games was not the way to do things, either for that party or for the process and institutions that we had.
Mr Donaldson
It is just a minor point, but I am interested in how the hon. Gentleman regarded the wheeze that was introduced in the Assembly to unresign the former Deputy First Minister, who was then the deputy leader of the SDLP.
Mark Durkan
I think that privately I was the first to make the comparison with Bobby Ewing in the shower. I know that others said it publicly, but I think that the memoirs will show that I made that observation first because it was an obvious one to make. I did not agree with such wheezes. When it came to my election as Deputy First Minister alongside David Trimble as First Minister in the autumn of 2001, I did not agree with some of what the then Secretary of State said about the circumstances in which that election would take place. I made it very clear that, as far as I was concerned, if the Assembly fell and there was an election, that should be that.
Similarly, to correct a misrepresentation that was made on Second Reading, we did not agree to the wheeze of moving the date of the Assembly election. Under the agreement, the date of the second Assembly election was meant to be May 2003, because the first Assembly was to sit for five years to allow for bedding in. We did not agree with the date being postponed from May 2003. The right hon. Member for Torfaen, who was Secretary of State at the time, will remember that we said we were opposed to moving that election date. We have not agreed with any of the wheezes. When things are said, they should remain.
Mr Donaldson
Lest we rewrite the Second Reading debate, I wish to place it on the record that the point I made was merely that there is a precedent for extending the Assembly to five years. I am glad that the hon. Gentleman now accepts that the 1998 Assembly was extended to five years to, as he describes it, bed in. The point that I made on Second Reading and that I reiterate now is that there is a precedent for extending the life of the Assembly to five years.
The Temporary Chair (Katy Clark)
Order. I ask Mark Durkan to address the amendment that we are debating.
Mark Durkan
I will do that, Ms Clark.
On the number of Members in the Assembly, the parties seem to be agreed in principle that that can and should change. The agreement provided for a review, just as the agreement provided that the first Assembly would last for five years. The first Assembly was not extended. There was provision in the Northern Ireland Act 1998, and in the agreement, for the first Assembly to be five years, and four years thereafter. We did not agree with the date being changed.
Mike Penning
This part of the debate has been enhanced by the presence and knowledge of the former Secretary of State, the right hon. Member for Torfaen (Paul Murphy). He has saved me from going through half my speech to explain how we came to 108.
Clause 6 is a huge nudge to the Executive and the Assembly. As the hon. Member for Foyle (Mark Durkan) said, there is general agreement that trying to— [Interruption.] I am sorry if I promoted the hon. Gentleman in a way that perhaps he would not want to be promoted. I do apologise. There might be general agreement, but there is not consensus. Until we have consensus, this cannot be addressed, which is why, sadly, I will oppose both amendments. I am sure that the amendments were tabled with the right feel for what is going on, but we have to get the decisions made. The Secretary of State will have powers under the new reserved matters, but this is another stage forward, another movement on. If we want continued normalisation under the devolved Administration, it is important that the Government do everything we can, with the help of Her Majesty’s Opposition, to get consensus, rather than just general agreement.
Sammy Wilson (East Antrim) (DUP)
Does the Minister accept, however, that some of the smaller parties, if the veto rests with them, will always be tempted to veto any change, including this necessary change to the structures and numbers of people elected to the Northern Ireland Assembly? All that could be vetoed by small parties with a party political interest in ensuring that there is no change, and of course that prevents Government from becoming more efficient in Northern Ireland.
Mike Penning
I understand exactly where the hon. Gentleman is coming from, but at the end of the day, 108 seats were created to ensure that the smaller parties were represented. It is for the people of Northern Ireland to work out among themselves, in a mature democracy, what that number should be—for instance, whether it should be five per constituency, as the hon. Member for Foyle said. I have heard the concerns about going down to four, but that is not for us to dictate. At the end of the day, this has to be decided in Northern Ireland, which is why, sadly, I ask Members to oppose the two amendments and support clause 6.
Mr Dodds
I have listened carefully to the Minister. Clearly, the contribution from the right hon. Member for Torfaen (Paul Murphy) has been received warmly because we recognise the part he played as Secretary of State for Northern Ireland, and as Minister of State before that; he was widely praised for his efforts during his tenure, and we thank him.
There is a view across most of the parties in Northern Ireland, with the exception, I think, of Sinn Fein, that the Assembly is too big and should be reduced in size. Until we can get that cross-community support in the Assembly, we are where we are, but at least the Bill recognises movement, in that it makes this a reserve matter, rather than an excepted matter, and so puts it more within the Assembly’s bailiwick. Our view, in tabling the amendments, was that the more that was done, the better; it shows maturity and demonstrates that the Assembly is developing. It shows that issues such as the make-up of the Executive, how it is appointed and elected, the First Minister and Deputy First Minister should all be more within the remit of the Assembly.
I have heard what the Minister has said, and I also heard his earlier comments that he was listening carefully to the matters being raised and would reflect upon them. In that spirit, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 ordered to stand part of the Bill.
Clause 7
Extension of term of Assembly
Question proposed, That the clause stand part of the Bill.
Ms Ritchie
I approached clause 7 by way of a probing amendment that was not selected. I sought information on Second Reading about why the mandate of the current Assembly was being extended from a four-year term to a five-year term, given that the people of Northern Ireland voted for parties on the basis of four, not five years.
Many political representatives, including the current Secretary of State and the former Secretary of State, have stated that there is insufficient consensus on extending the term, while the Northern Ireland Affairs Committee compiled evidence that clearly suggested there was insufficient evidence and did not agree with extending the term to five years. I understand that three parties—at the centre, shall we say—supported extending the mandate: the Democratic Unionist party, Sinn Fein and the Alliance party. On the other hand, the Social Democratic and Labour party and the Ulster Unionist party did not.
I believe in democracy. Members were elected to the Northern Ireland Assembly on the basis of four, not five years. That is a very different position from that in Scotland and Wales. In November 2011, when people stood for election and sought mandates in Scotland and Wales, they did so on the basis that those terms would be five years. It was very different in Northern Ireland. I did not get that mystery unlocked on Second Reading, so I now ask the deputy Secretary of State if he will provide me with an explanation; I am sure he will be happy to do so.
Mr Dodds
I want briefly to put on record our view, which we also stated on Second Reading.
We believe that the argument for moving the date of the Assembly election is strong, not least because that is what is happening for Scotland and Wales. There is no logical, coherent reason at all to challenge the Government position—that we should also extend the mandate for the Northern Ireland Assembly by one year, to ensure that a Westminster election and an Assembly election are not held on the same day. That is important because they are probably the two most important elections that are held. Council elections are obviously significant, as are elections to the European Parliament, but when we are electing the legislature and the Executive for the Northern Ireland Assembly and also representatives in this House, it is inevitable that one of those elections would dominate the media and the political debate to the exclusion of the other, to a much greater extent than with other elections. For that reason, clause 7 is important.
Dr McCrea
Does my right hon. Friend accept that some issues that are relevant for the people of Northern Ireland can be dealt with only by the Northern Ireland Assembly—as opposed to international issues, for instance—and that a clear division between the two election dates would prevent muddying of the water?
Mr Dodds
Yes, I agree with that. The decision was taken for Scotland and Wales when we debated the Fixed-term Parliaments Act 2011, while the position in Northern Ireland was left open to allow for further consultation and discussion with the political parties there. That discussion was held. It was carried out in a very full way—indeed, in many respects there was more consultation and discussion about this issue than many others. A view was reached that is supported by a clear majority among the parties represented in the Assembly, and it is also a cross-community view. Of course, not every party agrees with it, but that is a significant development.
Naomi Long
Does the right hon. Gentleman agree that the Government’s proposal as it stands not only ensures that the next set of elections will not happen concurrently, but reduces the opportunity for that to happen in future, with the result that there will be less ad hoc-ery—for want of a better term—in setting election dates? The Government’s proposal will ensure that they no longer coincide, which is to be welcomed.
Mr Dodds
The hon. Lady anticipates the exact point I was going to conclude with. Clause 7 takes care of the problem for 2015, but by permanently fixing the Assembly term at five years—again, as in Wales and Scotland—it also takes care of any future problems with overlaps between Assembly and Westminster elections.
For those reasons—and also because the clause ensures that Northern Ireland is absolutely four-square in line with the other devolved legislatures, in Scotland and Wales, as part of this great United Kingdom—I am more than delighted to support the Government on clause 7.
Stephen Pound
I yield to no person in my admiration for the hon. Member for Belfast East (Naomi Long), for many reasons. One is because of the marvellous new expression we have heard this evening: “ad hoc-ery”. In the past we have had “what-aboutery”, but “ad hoc-ery” is absolutely marvellous—I thought he was a Taoiseach in Ireland many years ago, but that is neither here nor there.
The clause as it stands is supported by Her Majesty’s Opposition, principally because we think it is logical and sensible, and equalises the various devolved Assemblies. However, if anyone thinks that choosing a particular five-year period will ensure that no problems occur in future, they have another think coming, because there has never been a time in European political history when so many anniversaries have been queuing up to come down the road. We can therefore pretty much guarantee that whenever the Assembly votes, it will be the anniversary of something, and whenever the Assembly votes, there will be no guarantee whatever that it will be synchronous with this House. However, it would be sensible and far better—and, I think, rather more appreciated by the democratic community—if there were a fixed term in this particular case. A fixed term for this House we can discuss later, but for tonight, the position of Her Majesty’s loyal Opposition is that we support the Government’s proposal that there should be a five-year term, as there is in Wales and Scotland.
Mike Penning
We debated this matter extensively in the Second Reading debate, during which the hon. Member for South Down (Ms Ritchie) referred to me as the deputy Secretary of State almost all the way through her contribution. I should have corrected her then, but I shall do so now. I am the Minister of State in the Northern Ireland Office, and I am very proud of that. I have never heard of a deputy Secretary of State. It might well have been corrected by Hansard, but I thought I would mention it anyway. I also fully acknowledge that I am not going to convince the hon. Lady that no conspiracy took place that suddenly made us change our mind on this matter. In fact, 70% of the MLAs asked us to move the election by one year to 2016.
Mike Penning
I want to make a tiny bit of progress, if the hon. Lady does not mind.
As the hon. Member for Ealing North (Stephen Pound) suggested, we should never take anything for granted, but the provisions for the one-year extension and the five-year term should, in theory, keep the Assembly elections separate from the UK general elections. However, this is not set in stone, and nor is the five-year fixed term for this House. Parliament could dissolve and we could have an election here. That is a fact.
Mike Penning
I will give way to the hon. Lady. I am being very rude, and I apologise.
Ms Ritchie
I am grateful to the Minister of State for giving way. Will he consider this possible evidence? The report from the Northern Ireland Affairs Committee on the draft Bill states:
“Nevertheless, we did not hear any compelling evidence to support this proposition.”
That is, the proposition to extend the mandate from four to five years. The report also states:
“We are concerned that extending the current term to 2016 would be contrary to the expectations of the electorate at the last Assembly election in 2011 and recommend, therefore, that the current Assembly term should end, as planned, in 2015.”
I would be obliged if he could explain why the proposals are now in the Bill.
Mike Penning
On this question, we disagreed with the Select Committee. We agreed with it on some things, and changed the draft legislation accordingly, but we did not agree with it on this matter.
Mike Penning
I will not give way. I have finished speaking on clause 7, and I hope that the Committee will allow it to stand part of the Bill.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Appointment of Justice Minister
Mark Durkan
I beg to move amendment 18, in page 7, line 4, leave out from ‘is’ to end of line 41 and add—
‘repealed.
‘(2) Any provision by Act of the Northern Ireland Assembly which provides, by virtue of section 21A(3) or (3A) of the 1998 Act, for the method of appointment of a Minister in charge of devolved policing and justice functions, shall be repealed.
(3) Any Minister in charge of devolved policing and justice functions shall be appointed in the same way as other Northern Ireland Ministers.’.
The Temporary Chairman (Katy Clark)
With this it will be convenient to discuss the following:
Clauses 8 and 9 stand part.
Mark Durkan
Amendment 18 deals with the appointment of a Justice Minister. I shall not go through the history of the various bits of legislation that have gone through this House—many of them steered through by the right hon. Member for Neath (Mr Hain)—to provide for all sorts of permutations and models for appointing such a Minister. The main parties settled on a version that would allow the Minister to be elected by means of a cross-community vote in the Assembly. Of course, the party that gained that Ministry could then end up having a surplus of ministerial positions over and above its entitlement under d’Hondt.
The right hon. Member for Torfaen (Paul Murphy) will recall the tortuous negotiations that we had, and the fact that we were determined that there should be some sort of proportional system, be it d’Hondt or Sainte-Laguë. We went through the various permutations, and d’Hondt was the one that most people were familiar with, because of their experience with the European Parliament. It was deliberately chosen as an inclusive arrangement and to create a situation in which parties were not in a position to vet or veto each other’s ministerial appointments. We actually used that language in the discussions and the negotiations; the parties did not want to be in a position of being able to vet or veto other appointments.
Nevertheless, when it subsequently came to the arrangements for appointing a Minister of Justice in the context of the devolution of justice and policing, there was a departure from that principle—for all the various circumstantial and other reasons with which we are all familiar. I shall not take the Committee’s time in either rehearsing or rebutting them this evening.
If people went for that formula, straying outside the terms, principles and promise of the agreement, they did so on the basis that it was needed to get the devolution of justice started and it was a way of breaking the impasse ensuring that there were no more standoffs. The progress made overall and in the context of justice and policing, means that we have time to consider whether the exceptional arrangements made in and around the position of the Ministry of Justice should still continue.
This clause is designed to end the aberration in the sense of a party being over-represented—over and beyond the d’Hondt entitlement—but that does not simply correct the matter in itself. As I pointed out on Second Reading, it creates other anomalies and potentially some pressures on the parties.
Naomi Long
Does the hon. Member acknowledge that it deals with a second anomaly, too, which is that a Justice Minister could be removed from post by a cross-community vote? That could lead to a different aberration, whereby a party could end up with less than its d’Hondt entitlement to Ministries. Is not that issue relevant as well?
Mark Durkan
Yes, I recognise that. When these measures originally went through, I made a point about the unequal situation and said that the power in the hands of two particular parties in respect of the Justice Minister’s position was potentially abusable. That anomaly clearly needed remedying as well. We always believed that this should be done as part of d’Hondt, and we believed that the number of Departments could have been adjusted at the time—not to add to the number of Departments, but to keep to the 10 that had been approved, absorbing a Department of Justice. The parties chose to go this way and even to add an additional Department even though their stated position was that they wanted to reduce the number of Departments in Northern Ireland.
In our view, the future Justice Ministry—when the Northern Ireland Executive is next appointed—can be decided and allocated in the same way as other Ministries under d’Hondt. We already have a situation whereby there is more tick-tacking, contact and understanding between the parties in advance of d’Hondt being formally run in the Assembly than was originally envisaged or required at the time of the agreement. Some of the issues are about the sensitivities around who will take what post and what might be detonated by that. Those issues will have to be dealt with in the context of the negotiations.
We view d’Hondt as the mechanism for appointing a future Minister of Justice, as with all other Ministers, in full knowledge that that will create a number of difficulties and uncertainties at a number of levels—we have those problems with other ministerial appointments in any case. There are questions this week about existing Ministers, their appointments and the attitudes of parties towards the rules and the spirit of the pledge of office and so forth. It is not as though the issue of the Minister of Justice is the only sensitivity, as there is also sensitivity about the possibility of d’Hondt leading to the Minister of Justice post going to only one political party. There are clearly sensitivities in relation to other matters, which is why the position of the Policing Board and the whole Patten architecture is so important as well. There are various proofs related to the exercise of the powers and responsibilities of a Minister of Justice that have been well observed and honoured in respect of the current Minister, but they would be equally obligatory for any future Minister appointed under d’Hondt.
Naomi Long
As I said on Second Reading, I support clause 9. I acknowledged at that time the existence of the twin anomalies that because Justice Ministers were appointed outwith the d’Hondt process, they could end up with a Ministry more than they were entitled to under d’Hondt, and could also lose that Ministry on the whim of a cross-community vote—although I must add, in fairness to parties in the Executive who may feel fearful, that that has not been exercised, or been threatened or in any other way intimated, by any of them.
I am grateful for the way in which the Government have negotiated and listened to what has been said by my party and others, and I welcome the clause. I think it important that including the Justice Minister in the d’Hondt system will result in a fairer arrangement, whether we gain or lose in party-political terms.
Mr Dodds
The hon. Lady is right to say that there has been no threat or attempt to change the Justice Minister under the current arrangement, that the Northern Ireland Office has listened, and that by and large the parties in Northern Ireland have agreed with this provision. However, in the light of what was said by the hon. Member for Foyle (Mark Durkan), may I ask whether she agrees with me that no attempt is being made to change the current special arrangements relating to the role and functions of the Minister vis-à-vis the Executive?
Naomi Long
That is entirely consistent with what the Government are proposing. The issue relates simply to the Minister’s appointment and security of tenure. Concerns were raised by my own party and indeed by other parties, and the Government, having listened to other parties in the Executive, took those concerns on board and formulated proposals which addressed them. That was helpful.
I have to say that my view of how an Executive should be formed in future differs from that of the hon. Member for Foyle (Mark Durkan) and his party. We have been open and honest about the fact that we would much prefer the reforms of the Assembly to include a move away from d’Hondt and towards the election of all Ministers by means of a cross-community vote, because we believe that that would enhance collectiveness in the Executive. There would have to be agreement among the Northern Ireland parties for that to happen. I should add that I do not consider d’Hondt to be a normal way of appointing Ministers; I consider it to be a mechanism resulting from the Good Friday agreement which was required to manage an abnormal political situation. I hope that, when we seek to reform the Assembly more widely, that will be on the table for discussion along with everything else. However, I support what the Government are attempting to do, and oppose the attempt to change it.
Stephen Pound
I welcome what has just been said by the hon. Member for Belfast East (Naomi Long). I hope that the Committee will forgive me for observing that the entire debate, which began so many hours ago, has been conducted in a positive, mature, sensible and serious manner, which I think is to the credit of all Members.
Let me also say on behalf of Her Majesty’s Opposition, as a matter of formality but also as a matter of personal desire, that we entirely understand why the Secretary of State has been detained elsewhere. We understand how difficult things are at present, as we approach Friday, and we understand very well that the right hon. Lady’s first duty must be to ensure peace and good order in Northern Ireland. The Opposition make no criticisms whatsoever. In fact, we feel that the Minister of State has made a very good fist of it, as he often does.
It is a great pleasure for us to hear the frequent encomiums to my right hon. Friend the Member for Torfaen (Paul Murphy). We must never forget the part that he played in bringing us to where we are at present. I think it important to recognise the contribution made by many people, not just those who are in the Chamber tonight.
If there is one theme that could be said to have run consistently through the entire debate, it is the contrast between what we would like to do and what we think we can achieve. In the various statutory instruments discussions we have had, I have invoked St Augustine, and apparently I misquoted him when I said it was the great doctor of the Church who said “Make me pure, but not quite yet.” I received a letter in English from Canon Bernard Scholes telling me I had completely misunderstood the Augustinian theory on that, so I shall look to certain colleagues on this, probably the right hon. Member for Belfast North (Mr Dodds), to whom I always defer in matters of theological exactitude.
Mike Penning
May I repeat the thanks expressed on Second Reading to Her Majesty’s Opposition for the supportive way they have looked after me in my new role? I look forward to being with the shadow Minister tomorrow, up on the Committee Corridor once again, when we consider another piece of secondary legislation.
I genuinely wish I could support the amendment, but I cannot, as we are not yet in the right position to do so, as the shadow Minister suggested. This is a difficult situation, but I think everybody accepts and understands why the Justice Minister was first appointed in this way and then subsequently again in 2011. We have moved on from that, however. While what we propose in clauses 8 and 9 is not perfect, it does move us forward and address the anomaly in the position of the Justice Minister. We were formally approached by the First Minister and Deputy First Minister to look at putting in place a provision that addressed this anomaly. We have done so through clauses 8 and 9, which is why I hope they will be agreed to.
Mark Durkan
I thank the Minister for what was a very straight and straightforward reply. It was exactly as expected. I would not have expected the Government to be moving. I expected that the best we would get would be mutual engagement, but no mutual adjustment. We have had mutual engagement, and there has not been adjustment. I fully understand the points made by other Members as well.
The right hon. Member for Belfast North (Mr Dodds) said that there are provisions around the Minister of Justice in terms of the Executive locus. That is precisely what I was referring to when I talked about some of the standards that are there, which are well honoured by the current incumbent, and which apply equally to all other Ministers as well. The existing protections do not need just to apply to the means of appointment, and there are also obligations and standards in place. However, recent events show that we might have more to do either here or in the Northern Ireland Assembly in respect of increasing the robustness of some of the standards around ministerial probity and accountability.
On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 8 and 9 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Bill (Clauses 1 to 9) reported, without amendment (Standing Order No. 83D(6)), and ordered to lie on the Table.
Business without Debate
European Union Documents
Delegated Legislation
FINANCIAL ASSISTANCE TO INDUSTRY
Services for Stafford Hospital
Jeremy Lefroy (Stafford) (Con)
I have the great honour and privilege to present this petition to support services at Stafford hospital which, along with other petitions on similar terms, has been signed by 50,346 of my constituents and those of neighbouring colleagues. The petition expresses the deep concern of a community whose hospitals face the threat of a downgrade following the appointment of the trust special administrators and proposals by the contingency planning team to remove services from the hospitals. The petition has been collected by volunteers across the community.
The petition reads:
To the House of Commons.
The Petition of residents of Stafford and surrounding area,
Declares that the Petitioners believe that the Trust Special Administrators, Jeremy Hunt and any other individuals responsible for the future of Stafford Hospital should support the hospital and save its acute services.
The Petitioners therefore request that the House of Commons urges the Department of Health to ensure that Stafford Hospital retains a 24/7 A&E department, level 3 critical care and emergency service and full maternity services.
And the Petitioners remain, etc.
[P001194]
Dalgety Bay (Radiation)
(10 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Gordon Brown (Kirkcaldy and Cowdenbeath) (Lab)
I rise to raise an issue—radiation contamination in Dalgety Bay in my Fife constituency—that I have raised with the House on two previous occasions: in November 2011, when I first asked Ministers to take action; and in March this year, when I suggested that the time was now overdue for action. I regret having to come back to the House, but I am grateful to you, Mr Speaker, for allowing me to raise this issue, because we now have greater evidence of the scale of the contamination and of the risks inherent in it.
We are now faced with a choice, because in the next few months the Ministry of Defence will have to make a decision, as the Scottish Environment Protection Agency will be bound to designate this area as the only radiation-contaminated area in the United Kingdom if action is not taken by the MOD as soon as possible. It is an amazing fact that we have nuclear waste sites, we have nuclear submarines and we have weapons in different parts of the United Kingdom, but this small beach in the heart of my constituency, which is on a walkway, the coastal path of Fife, is liable to be named the first ever radiation-contaminated area in the UK. I want to do everything in my power this evening to persuade the Minister that it is within his power and the power of his Department to stop that.
Dalgety Bay is already the first area of the United Kingdom where a risk assessment study has had to be done to measure the extent of radiation contamination and where what is called an appropriate person report—a report under the legislation dealing with radiation contamination—has been produced and has concluded that the polluter of the area is indeed the Ministry of Defence. Today and tomorrow, the Committee on Medical Aspects of Radiation in the Environment is meeting in London to discuss the risk assessment report. In my view, it will reach the same conclusion as Health England: that the area is contaminated, that action must be taken as soon as possible and that the polluter should take responsibility for doing so.
Although I have raised the issue in the House for 18 months, it is only in the past few days that I have discovered the scale of the problem in the greatest detail, thanks to the risk assessment report and to the appropriate person report, of which the Minister will no doubt be aware. That makes it clear that the contamination of the beach area in Dalgety Bay arises from the fact that starting in 1946 and for 13 years, wartime fighter planes and other planes in the possession of the Royal Air Force were scrapped and incinerated before the ash, including radiated parts, was dumped in the area of Dalgety Bay. In 1946 alone, 800 planes were scrapped and their parts dumped in this area of my constituency. From 1946 to 1959, not a few planes—not tens, or twenties, or scores—but hundreds were broken up before their parts were incinerated and the ash, including radiated parts, was dumped in the area.
The Scottish Environment Protection Agency report, which has just been published, states:
“The total number of radioactive…particles… that have now been recovered since the beginning of our investigation in September 2011 is over 1,000. Of these sources, five had a radioactivity content of greater than 1 MBq of Radium-226…Four of these sources were located in the area which is currently cordoned off and the fifth on an area in front of the headland which is only accessible at low tide.”
There is no doubt in the view of SEPA that dumping of materials took place, that they have radioactive content, that because of coastal erosion the particles are being brought up to the surface and that action will now have to be taken.
Only a few days ago, I also discovered that there is a huge difference between what the Ministry of Defence admits privately and confidentially behind closed doors about what has happened and the public statements it has made. I very much regret having to bring this to the House, but on 14 December 1990, Her Majesty’s inspectorate of pollution sent a memo to Lord James Douglas-Hamilton, the Minister at the Scotland Office at the time. It is written by someone called Mr Wright and the copies went around a number of different people within Government. Mr Wright said:
“I attended a meeting with the MOD to discuss the possible origins of the contaminated material and to consider how best to proceed. MOD confirmed that some 800 aircraft were scrapped during 1946 at the nearby…HMS Merlin and that the aircraft would have contained instruments and equipment luminised with radium.
There is evidence that the debris from demolition work at the air station was used for infilling purposes between 1946 and 1959.
This information, together with the nature of the contained debris which has been found leaves little doubt as to the origins of the contaminated debris which has been found…and is likely that there is more material buried in the area inland from the beach.”
He went on to say:
“I am glad to report that”
the MOD
“seem willing to help both with further monitoring and with any remedial action which might be necessary.”
So there, in 1990, we have an admission that the Ministry of Defence is not prepared to make today—an admission that it refused to make when the responsible persons report, naming it as a polluter, was published. That is a memorandum from within the Government machine, from Her Majesty’s inspectorate of pollution, making it absolutely clear that the Ministry of Defence had not only admitted culpability, but was prepared to take the remedial action I have been demanding for some time.
In 1992, a similar report was done, in which the Ministry of Defence named Dalgety Bay as one of the polluted areas. Again, after 2000, it is absolutely clear from the report of Mr Fred Dawson, who was the head radiation protection officer dealing with the safety officer at the MOD, that the Ministry of Defence was advised by him, at that time, that it would be found liable, and that there was significant reputational damage involved in denying liability in this area.
When so many people and expert agencies have made it absolutely clear that the material is radioactive and was dumped by the Ministry of Defence, and that the infill has made possible the tip at the sailing club and at Dalgety Bay head, why does the Ministry of Defence still refuse to accept responsibility? It requested a lawyer’s report as well as an expert report by the Scottish Environment Protection Agency. Why, when it was published, a few days ago, did the Ministry of Defence say that it was not satisfied, that it doubted the veracity and accuracy of the report, and that it was not yet prepared to accept its culpability in this matter?
In the risk assessment report, which I have read in some detail, and the appropriate persons report, there is a year-by-year catalogue of the actions taken by the Ministry of Defence, through the Royal Air Force, which used the airfield for breaking up planes, incinerated the planes, prepared the ash for dumping, and removed the ash to the dump, which eventually became the ground on which part of Dalgety Bay—the new town—is built. At no point is it made clear by any witness that the Ministry of Defence is anything other than liable for this.
Why has the Ministry of Defence insisted on trying to pass the buck to other people in the area who have no responsibility for this contamination? The developers, the property owners, and the sailing club, which has had to change its constitution to protect itself from the fall-out from this, have all been suggested, by the Ministry of Defence, as being potentially to blame, when it is absolutely clear from every document we have that the Ministry of Defence is responsible. Unfortunately, it has to accept its role as a responsible polluter in the area.
This matter is made more difficult by the response of the Ministry of Defence to the risk assessment report by the Scottish Environment Protection Agency. In a Ministry of Defence letter of 28 June to SEPA, a copy of which I have been given—it is very short and rather dismissive, I am afraid—the Ministry cites four objections, three of which are entirely technical and, I believe, easily dealt with, but one of them simply beggars belief. Key issue No. 1 is what it calls
“‘theoretical’ object—it is not clear whether an object with the properties required”—
that is, with radiation inherent in it—
“has been found or whether there is simply the possibility that such an object might exist.”
However, these objects were admitted in 1990. The fact that these particles were there was admitted in 1992. The Ministry of Defence’s own contractor found hundreds of these particles; 3,000 have been found in the bay.
The Dalgety Bay and Hillend community council has done a study of the work done by the Ministry of Defence contractor, and I am grateful to Colin McPhail, the chairman of the community council. It covers 100 trial pits and six bore holes. Some 84% of the material comes from the tip, and in 47% of the articles, there is radium-226. In 75% of the articles discovered, there is debris from the airfield. There can be absolutely no doubt that these are not theoretical objects, but particles that have been discovered. After all this time, the debates that we have had in the House of Commons, the letters that have been exchanged, the protests of the community council, and the evidence that the Ministry of Defence has received, it really is beyond me that the Ministry of Defence can believe that it is dealing with a theoretical issue, not a practical issue; there are contaminated particles that have to be either removed or covered up if the safety of residents is to be guaranteed.
If the Ministry of Defence thinks, in theoretical terms, that all the objects have been discovered and no further objects are going to rise to the surface, it is wrong. These objects are being discovered at the rate of 1,000 a year, and because these materials, as I know, do not decompose or disappear of themselves, they are likely to continue to come to the surface as a result of coastal erosion. As the Scottish Environment Protection Agency has told me, there is a cache of contaminated ash and clinker in areas of made ground which form the current coast in the area of Dalgety Bay.
In the letter that the Ministry of Defence sent to SEPA, it refers to a review that it is doing, and I would be grateful to hear the details of that. It says that it will take into account the findings of Public Health England, but Public Health England has already stated on 28 June that is agrees
“that radium-226 contaminated objects recovered from Dalgety Bay include objects that could give rise to radiation doses that exceed the relevant criteria”
of the regulation.
We know that the objects under consideration are not theoretical, but real. We know that the finds of these items are likely to continue over the years. We know that Public Health England already considers this a health issue that must be dealt with. We know that the Committee on Medical Aspects of Radiation will make a disposition on the matter tomorrow.
For two years now, the area has been in limbo. The beach area has been fenced off. The sailing club has had to change its constitution, as I told the House. House prices may yet be affected. The Ministry of Defence is trying to persuade residents in the next town, Rosyth, that that should become the site for the decommissioning, dumping and breaking up of nuclear submarines, telling them that there is no health hazard involved. When the MOD engaged in a consultation on the issue, the residents of Rosyth, who have a history of working with the Ministry of Defence through the naval base and, still, the royal dockyard, the major objection that the residents of Rosyth raise to the decommissioning and dismantling of submarines at Rosyth is that if the Ministry of Defence cannot be trusted to deal with radiation contamination at Dalgety Bay, how can they trust it to deal fairly with them over the dismantling and breaking up of submarines at Rosyth?
The Minister who dealt with the matter in the past said that if contamination is proven, if risks remain, and if the Ministry of Defence is found to be responsible, it will voluntarily, without the need for a designation order, fund the clean-up operation to remove the blight that is in the area for years and decades to come if nothing is done.
With these two major reports we have moved from the world of ifs to the world of certainties. Contamination has been proven. Risks do remain. The Ministry of Defence is responsible, and it is no use the Minister coming to the House this evening and saying, “If contamination is proven, if risks remain or if the Ministry of Defence is responsible, it will act.” These three facts are established. They are not theoretical, but real. They are not what might be. but what is. We have moved from the world of conditional statements that could have been made two or three years ago to unconditional certainties.
The Scottish Environment Protection Agency was asked only to judge the balance of probability in these matters. It has actually shown that the problem is the responsibility of the Ministry of Defence beyond all reasonable doubt, in my view. It is now time for the Ministry of Defence to do the decent thing. It should own up, clean up the area, pick up the bill for that because it is the responsibility of the MOD, and it should hurry up, because the residents of Dalgety Bay should not have to undergo another winter when further coastal erosion causes more particles to appear, the health risks to be mentioned by residents, as they are now, and the damage to get worse. I urge the Minister, even at this late stage, to accept responsibility and to get on with the clean-up of Dalgety Bay.
The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
I start by warmly congratulating the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) on securing this debate. It is an important subject and he has expressed his views passionately, as I would expect. He has been, if I may say so, an assiduous Member of Parliament in his attention to this matter, securing Adjournment debates in November 2011 and in March this year. My right hon. Friend the Defence Secretary tells me that the right hon. Gentleman has also had a long conversation with him, when he covered much of the ground that he covered this evening and which I hope to cover in the time available to me tonight.
I well understand the right hon. Gentleman’s passion for this subject given his long association with the area and the local community he represents, and if he is agreeable to the notion, I look forward to visiting Dalgety Bay before too long. We have a duty to those we represent to present a balanced view that neither sensationalises nor causes unnecessary anxiety, and I know the right hon. Gentleman will want to do just that. Contrary to the impression he gave, however, the Ministry of Defence has never sought to abdicate its legal responsibilities, much less “pass the buck”. In fact, we have acknowledged that in all likelihood our historical activities introduced radium into what was Royal Naval Air Station Donibristle and HMS Merlin. Moreover, we have demonstrated a serious commitment to supporting the Scottish Environment Protection Agency, and expended £825,000 to date undertaking a site investigation, as well as a monitoring and recovery programme along the foreshore. The right hon. Gentleman will recall the work we have undertaken in a number of gardens belonging to his constituents where radium was discovered, at a cost of some £500,000.
On recent statements in the press concerning a memo allegedly from the MOD, the document we are aware of, dated December 1990, is from Her Majesty’s industrial pollution inspectorate to the Scottish Office—I think that is what the right hon. Gentleman referred to in his remarks. We have found no evidence to corroborate claims that 800 aircraft were destroyed in 1946 through burning, and the resultant waste material—including ash—deposited on the beach or within the headland prior to 1959. Interestingly, the memo mentions the disposal by burial of waste arising from the scrapping of aircraft at a location inland from the beach, which we understand may be a former quarry. The memo also appears to acknowledge the MOD’s willingness to assist the regulator, then Her Majesty’s industrial pollution inspectorate—a situation not dissimilar to today when the MOD is assisting SEPA with its statutory inspection of the beach and adjacent shoreline.
The question is whether there is significant risk of significant harm, and the extent to which the activities of those who controlled the land after the MOD impacted on the current situation. The right hon. Gentleman cannot dismiss the latter point because that is the statutory test.
Mr Gordon Brown
Has the Minister read the risk assessment and the appropriate persons report? If he has, will he acknowledge that the Scottish Environment Protection Agency has established beyond any reasonable doubt that none of the people whom the Ministry of Defence thought may have been responsible for adding to pollution in the area is deemed responsible? If the statutory agency responsible for reporting on these matters is not believed by the Ministry of Defence, what are we to believe?
Dr Murrison
It is not a question of not believing statutory agencies, but I must report to the right hon. Gentleman that SEPA has been less than helpful in this matter. That is why there is a need for a further meeting, which my officials have scheduled, at which I hope such issues will be fully worked through. I am sure he would agree that in matters such as this where there is controversy over the evidence, and particularly the risk assessment that is central to this—
Dr Murrison
If the right hon. Gentleman will allow me, I will get back to him when I can. It is essential in controversial matters such as this that we are absolutely clear about the science, and particularly the risk assessment. That lies at the heart of our difficulty with some of the work that SEPA has done. At the end of this month, however, officials will meet SEPA and—particularly in the light of evidence to which the right hon. Gentleman alluded that may be forthcoming in the next few days—I hope we will be able to plot a way forward.
Mr Brown
Will the Minister publish the advice that was given to the Ministry of Defence before it talked to Her Majesty’s inspectorate of pollution? Will he tell us, as a freedom of information issue—I have asked for this information to be provided—what Ministry of Defence officials said to those people who were in touch with the inspectorate when it prepared the report in 1990? As far as the advice on the risk assessment is concerned, the Ministry of Defence’s objections essentially come down to one major point: it suggests that it does not believe that these sources have been found at the level of radiation required. Yet the people who have actually been doing the excavation are contractors employed by the Ministry of Defence.
Dr Murrison
I am pleased that the right hon. Gentleman has submitted a freedom of information request, and of course we will, as far as we can, respond to it. I must say that we have already looked for some of the documents cited by SEPA but cannot find them. Naturally, we will comply with whatever he requests, and if we have the information, will certainly provide it to him.
I believe that considerations of the sort I have outlined in relation to risk and who is responsible for management of the land are germane to this discussion. Indeed, they are key to understanding whether designation is required and how the material has come to be within the foreshore. Ultimately, the presence of radium at Dalgety Bay must be viewed and addressed in the light of the statutory regime for contaminated land, rather than correspondence from the 1990s.
Lindsay Roy (Glenrothes) (Lab)
Does the Minister not agree with the former head of radiation protection at the MOD, Fred Dawson, who has warned that
“denial of liability could result in a long, drawn-out, expensive process at the end of which the MOD will be found liable and suffer significant reputational damage”?
Dr Murrison
Well, the aim of the Ministry of Defence is to do the right thing. We are bound by statute, but I hope that it will not come to statute because, as I have explained, our intention is to comply with statutory authorities voluntarily, but we need to explore the methodology that has gone into their assessment and take into account the views of Public Health England, which, despite its name, is of course the adviser to the Scottish Government on radiation matters—[Interruption.] The right hon. Member for Kirkcaldy and Cowdenbeath says from a sedentary position that it has given its view, but I think that he has given a partial account of it. If I can make some progress, perhaps I will be able to give a fuller account of what Public Health England has actually said.
My technical and legal experts have reviewed the two most recent reports by SEPA and identified issues relating to the adequacy and validity of both the risk assessments and the appropriate person report. Those concerns relate to the interpretation and use of fundamental scientific and legal principles. I do not know whether the right hon. Gentleman has had sight of the independent review by the Centre for Radiation, Chemical and Environmental Hazards, formally part of the Health Protection Agency, but I must say that it hardly gives a ringing endorsement of SEPA’s approach and shows that many of our concerns are well founded. Those concerns lie at the heart of what this is all about and what I think he is trying to characterise as our unwillingness to make progress on the matter, which I think is unfair. I hope that he will understand that, when faced with professional opinion—
Dr Murrison
If the right hon. Gentleman will allow me, I will continue, because I think that I have been reasonably generous in giving way. I have four minutes left and it is important to put forward the Government’s side on the matter.
I hope that the right hon. Gentleman will understand that when we are faced with evidence that is not entirely congruous in some important respects, it is essential that we take stock. A robust, evidence-based risk assessment is required that accords with accepted best practice and is scientifically rigorous. Without it, we simply cannot understand the level of risk posed to health and ensure that suitable and sufficient measures are in place to protect the public.
To that end, we have previously emphasised to SEPA the importance of a credible risk assessment and raised serious concerns with it about its approach, concerns that have been reinforced by the findings of the recent review undertaken by the Centre for Radiation, Chemical and Environmental Hazards, which concluded that the likelihood of a member of the public inadvertently ingesting an object contaminated with radium that could cause them significant harm is less than one in 10 million. I remind the right hon. Gentleman that radium is predominantly an alpha emitter, so ingestion is the key route by which harm can occur, notwithstanding the fact that radium and its decay products emit both beta and gamma radiation. SEPA confirmed at the last Dalgety Bay forum in May that the management measures currently in place remain sufficient to manage the risk to the public such that the risk remains very low, and arguably these measures exclude any area at Dalgety Bay from designation.
The right hon. Gentleman will recall that in his first Adjournment debate he openly acknowledged that up until October 2011, when two high-activity items were discovered, there had been no evidence to suggest that there was a potential threat of any significance to public health or, for that matter, the presence of extensive contamination. As early as 1998, the annual risk of contracting a fatal cancer through inadvertent inhalation or ingestion was found to be less than one in 1 million: in his words, a “negligible risk”. He also went on to draw comparison between—
Dr Murrison
No, I will not. I do not have time; I am very sorry.
The right hon. Gentleman also went on to draw comparison between Aberdeen and Dalgety Bay based on a 1995 study that found that the highest ambient external radiation dose rate found at Dalgety Bay was two thirds of that found naturally in the granite in Aberdeen.
The scoping risk assessment undertaken by the Centre for Radiation, Chemical and Environmental Hazards in 2012, which took account of the two high-activity objects found in late 2011 and the subsequent find in April 2012, together with the current management measures, concluded that the risk of attributable cancer was actually less than one in 100 million. In addition, the most recent cancer study published by the Committee on Medical Aspects of Radiation in the Environment in December 2012, to which the right hon. Gentleman referred, found no evidence of the occurrence of cancers in the local population that could be attributed to the presence of radium-226.
Dr Murrison
I have one minute left and I will not give way.
I have to say to the right hon. Gentleman, who was of course in high office for 13 years and did nothing on this subject, that he needs to be very careful indeed about raising fears in his local population. He knows full well that Government will comply with statute but, more than that, will do anything they can voluntarily to protect public health, but it has to be on the grounds of science and a proper risk assessment. To that end, my officials will be meeting SEPA later this month to discuss the methodological problems with the science and come to some sort of way ahead. I personally look forward to visiting Dalgety Bay in the very near future, and I look forward to further discussions with the right hon. Gentleman on this subject.
Question put and agreed to.
Ministerial Correction
(10 years, 10 months ago)
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Commission on Security and Cooperation in Europe
(10 years, 10 months ago)
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Mr Raab
To ask the Secretary of State for the Home Department if any of the 60 individuals named on the list published by the Commission on Security and Co-operation in Europe, individuals involved in the tax fraud against Hermitage and the torture and death of Sergei Magnitsky, published in June 2012 have visited the UK in the last year; and if she will disclose the details of any such visits.
[Official Report, 18 April 2013, Vol. 561, c. 499W.]
Letter of correction from Mark Harper:
An error has been identified in the written answer given to the hon. Member for Esher and Walton (Mr Raab) on 18 April 2013.
The full answer given was as follows:
Mr Harper
It is long-standing policy not to disclose details of records which may be held in relation to arrivals in the United Kingdom. The Home Office Special Cases Directorate is already aware of the individuals on the list and has taken the necessary measures to prevent them being issued visas for travel to the UK.
The correct answer should have been:
Mr Harper
It is long-standing policy not to disclose details of records which may be held in relation to arrivals in the United Kingdom. We do not make decisions on entry into the UK speculatively. We are aware that some individuals have been linked to the arrest, detention and death of Sergei Magnitsky. Any application for a visa to come to the UK will be considered on the individual merits of the case in line with our usual practice.
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Herbal Medicine (Regulation)
(10 years, 10 months ago)
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David Tredinnick (Bosworth) (Con)
I am extremely grateful to have the opportunity in this debate to raise the issue of herbal medicine with my hon. Friend the Minister. The issue has been on the agenda for many years, and I hope that by the end of the debate we can shed light on where we are going. I look forward to my hon. Friend’s remarks.
On Friday, I was at the Royal Society summer science exhibition. The Royal Society is our oldest and, some would say, most distinguished scientific society. Its fundamental purpose is to promote and support excellence in science and to encourage the development and use of science for the benefit of humanity. The Royal Society has played a part in some of the most fundamental, significant and life-changing discoveries in scientific history, and it continues to make outstanding contributions to science in many research areas. I will refer to what I saw at the exhibition and to what it has to say to us about herbal medicine generally.
If I may say in passing, Mr Speaker might like to visit the Royal Society because it has a wonderful gold mace that is the mirror image of the Mace that is carried into the Chamber. The mace was a present to the Royal Society from Charles II. Among the Royal Society’s former presidents are Sir Christopher Wren and Edmond Halley. The Royal Society has a wonderful line and body of knowledge, so I set great store by it. We must take note when the Royal Society seriously considers herbal medicine and related methods of delivery.
I was particularly struck by the Royal Society partnership grant project with Boroughbridge high school in Harrogate under the direction of Colin Inglis, the school’s biology tutor, and overseen by Professor Kerr, the consultant microbiologist at Harrogate and District NHS Foundation Trust. The project looked at several simple plants and herbs available in our gardens, from greengrocers and from garden centres to see what their impact could be on E. coli and other bugs—I will focus on E. coli. Working over not a very long period of time, the project found that E. coli growth is inhibited by the use of thyme, lavender and geranium set in essential oils. They said that they were able to identify the minimum inhibitory concentration of those oils derived from herbs and plants—the lowest concentration of essential oil that inhibits the growth of E. coli. When I discussed that with the directing staff, they said that the next step would be to determine the concentration that would kill E. coli—the minimum bactericidal concentration. That simple project in a school in Harrogate has huge ramifications, because it shows how easily-found common herbs and plants can be used in the furtherance of medicine.
In the evening at the Royal Society there was a panel discussion on “Nature’s Marvellous Medicine,” and those addressing the audience were not ill-informed: Professor Dianna Bowles, emeritus professor in the department of biology at York university; Professor Roderick Flower, professor of biochemical pharmacology at the William Harvey research institute; and Professor Monique Simmonds, director of the Kew innovation unit, where she studies the chemistry of plants and fungi—of course, Kew Gardens is currently classifying all British herbs. They are not ill-informed people, and they were speaking about what could be done with herbs and plants.
The chief medical officer, Dame Sally Davies, recently said that resistance to antibiotics risks health “catastrophe” that would rank with terrorism and climate change. She said that Britain’s health system could slip back by 200 years unless the “catastrophic threat” of antibiotic resistance was successfully tackled. The Select Committee on Science and Technology, of which I am a member, might address that in this Parliament. Dame Sally Davies said:
“This is a growing problem, and if we don’t get it right, we will find ourselves in a health system not dissimilar from the early 19th century.”
Although hospital infections from bugs such as MRSA are greatly reduced, they are being replaced by infections with other bacteria. Antibiotic use is rising, not least in agriculture, and resistance is steadily growing in fish and farm animals—I remember raising the matter in this House 20 years ago or more—and there are problems with farmers, particularly in the third world, feeding antibiotics to chickens. I said then that such use could have catastrophic consequences, and now we know that, in some parts of the world, cattle have been fed antibiotics as a prophylactic, so it is no wonder that the new chief medical officer is focusing on that.
It is perhaps also significant that Professor Christopher Thomas, the professor of molecular genetics at the university of Birmingham, added to Dame Sally’s remarks:
“We need new ways to kill resistant bacteria or reduce their carriage of resistance genes. Novel approaches that might have appeared unrealistic a few years ago need to be explored.”
I suggest that one of those areas that needs to be explored is better use of herbs and plants in medicine. In a sense, and this is not an original phrase, we need to go back to the future to find those solutions. If I have anything further to say about Dame Sally’s release, it is that it does not provide any solution other than to suggest that we need to go for more antibiotics. The problem is that some doctors are saying that no antibiotics will work in 20 years’ time. The Government have a catastrophe management team—that is not the official title—and I think that issue should be added to its list.
Today, we are not specifically debating common plants that are available as foods or in the garden. Such plants are covered by different regulations. What we are debating is the future of herbal medicine in this country. If I may, I will set out the stall on what has happened in recent years. We have to go back to the House of Lords Science and Technology Committee report of 2000 that considered herbal medicine and other medicines that are not currently used in mainstream health care. The written evidence from the Department of Health stated:
“There is scope for the larger professions to follow the osteopaths and chiropractors in gaining statutory self-regulation, and this would undoubtedly serve their professions well.”
I served in the Committee stages of the Osteopaths Act 1993 and the Chiropractors Act 1994, and the difference that statutory regulation has made to those professions in providing safe services for patients and giving assurance to doctors such as the Minister is extraordinary. They came in from the cold.
The Government then identified acupuncture and herbal medicine as specific therapies for which they wanted to achieve statutory regulation. I shall not dwell on acupuncture, as we must focus on herbal medicine. In her evidence to the Lords Science and Technology Committee inquiry, the then Under-Secretary of State for public health, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) said:
“I think we would support their moves towards statutory regulation…We would strongly encourage them to continue the process towards proper self-regulation and statutory regulation as well…We do think that in the area of acupuncture and herbal medicine it is perhaps more important than in other areas.”
In its report, the Committee said:
“It is our opinion that acupuncture and herbal medicine are the two therapies which are at a stage where it would be of benefit to them and their patients if the practitioners strive for statutory regulation under the Health Act 1999,”
which is an enabling Act that, if I remember correctly, provides for different disciplines to come in via statutory instrument,
“and we recommend that they should do so.”
Regulation was recommended because those herbal professionals met the agreed criteria for statutory regulation that the Lords had come up with. There was a risk to the public through poor practice, and they had a voluntary regulation system and a credible evidence base. Regulation would ensure that appropriate training was established, resulting in competent practitioners with an understanding of the evidence base for their therapy along with an appreciation of the limitations of the treatments that they could provide. Safe practitioners would understand when to refer. Effective regulation would therefore seek to safeguard the public from incompetent practitioners and identify practitioners suitably qualified to use a range of potent herbal remedies not appropriate for over-the-counter sale. There are some powerful remedies.
The next stage in the saga is the European Union’s intervention. However, I want to make one point at the outset before we consider European directives. The proposal for statutory legislation pre-dates all the arguments about European directives, such as the traditional herbal medicinal products directive and others. The policy had broad cross-party support, and the distinguished Lords Committee, which included members such as Lord Walton of Detchant and Lord Baldwin, had proposed it. Distinguished men came up with that proposal. We were going down that route anyway.
Then the European Union became involved, with directives. We must address the directives, but we are not dealing only with them; we are dealing with a policy that was already in train. The objective of proper regulation had been there before the European Union directive 2001/83/EC, amended by directive 2004/24/EC, which said:
“A Member State may, in accordance with legislation in force and to fulfil special needs, exclude from the provisions of this Directive medicinal products supplied in response to a bona fide unsolicited order, formulated in accordance with the specifications of an authorised health-care professional”—
a key phrase—
“and for use by an individual patient under his direct personal responsibility”.
That meant that herbal practitioners would have to be classed as authorised health care practitioners in order to be able to continue using their herbal products.
In January 2002, the Department of Health, along with the Prince’s Foundation for Integrated Health and the European Herbal and Traditional Medicine Practitioners Association established the herbal medicine regulatory working group—HMRWG. The group and subsequent groups were chaired by Professor Mike Pitillo, a well-respected man whom I knew and who devoted many years of his life to the issue. His efforts were and are still appreciated by all who knew him; sadly, Mike died in February 2010. God bless him; he put so much into the issue on behalf of the community. The working group’s remit was to make recommendations on the regulation of herbal medicine practitioners and the reform of section 12(1) of the Medicines Act 1968. In 2003, the group published its report, “Recommendations on the Regulation of Herbal Practitioners in the UK”.
In effect, the group’s work on the issue of possible reforms to the regime of unlicensed herbal medicines supplied under section 12 represented the first stage in the exploration process envisaged by the Government. It needed to be seen as distinct from but complementary to the wider European negotiations on the then proposed directive on traditional herbal medicinal products, which related to industrially produced traditional herbal remedies sold over the counter directly to the public.
Working in parallel to the group was the acupuncture regulatory working group, which I need not discuss. The HMRWG concluded that the two professions should be regulated together, thereby addressing the high practitioner costs of running two separate registers. The Department of Health ran a consultation on regulation of the two professions, published in 2004 as “Regulation of Herbal Medicine and Acupuncture: Proposals for Statutory Regulation”. The results of the consultation were published in February 2005 as “Statutory Regulation of Herbal Medicine and Acupuncture: Report on the Consultation”.
The Medicines and Healthcare products Regulatory Agency ran a simultaneous consultation on section 12(1) reform—MLX 299, “Proposals for the Reform of the Regulation of Unlicensed Herbal Remedies in the United Kingdom Made Up to Meet the Needs of Individual Patients”—and published its results in January 2005. In 2005, if colleagues recall, we had a general election. There were delays at the Department, unsurprisingly, and pending developments in health care regulation as part of the Foster review stalled further work for nearly a year.
However, in early 2006, the Government set up the steering group on the regulation of acupuncture, herbal medicine and traditional Chinese medicine in order to consider how to proceed with the regulation of those professions. That involved yet another consultation process. On 12 June 2008, the steering group’s report was presented to the then Minister, the right hon. Member for Exeter (Mr Bradshaw). On 16 June, the steering group, chaired by the late Professor Pitillo, held a press conference at the King’s Fund to report on the document.
All the reports and consultations found massively in favour of herbal medicines generally and statutory regulation in particular. After that tortuous process, they arrived at that conclusion.
Mr Philip Hollobone (Kettering) (Con)
I am enjoying my hon. Friend’s speech immensely. No one else in the House knows as much about herbal medicine as he does. He speaks for the nation. In its survey, the MHRA found that as many as 3 million people had consulted a practitioner of Chinese herbal medicine, and as many as 25 million had bought herbal medicines over the counter during the previous two years of its survey.
David Tredinnick
I am grateful to my hon. Friend, who is ever supportive. He has tabled questions and acted for his constituents on this issue, as he always does. He is right. Three quarters of the population of the United Kingdom have used traditional Chinese medicine, herbal medicine, phytotherapy or one of the other disciplines sometimes classed as complementary. There is a huge swell of people out there who want such medicines. Going back to Dame Sally’s remarks, people are now frightened of using antibiotics; they are worried about overuse and that, when they really want them, they might not be effective. We have a crisis not only of effectiveness but of confidence. People who tend to go down the herbal medicine route have a lot of confidence, however, because they are dealing with nature and natural products that have been used over the years. Properly administered, those products do not have side effects and they are not prone to becoming ineffective.
Kate Hoey (Vauxhall) (Lab)
I congratulate the hon. Gentleman, who is knowledgeable on the subject. Would it be helpful if he outlined what he feels might happen if the Government do not do what they said that they would do and what we all want to see happen on regulation?
David Tredinnick
I am grateful to the hon. Lady, with whom I discussed the debate earlier, and I will be coming on to the options available to the Minister. In fairness to him, I know that he has been focused on the matter, with his colleague in the Lords, the noble Earl Howe, a distinguished Minister. However, before I look at the solutions and some of the obstructions and problems—why we are not getting a solution—I will first go through where the Government are now.
On 16 February 2011, the then Secretary of State, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), made a written statement on the regulation of herbal medicine. Subject to parliamentary procedures, he aimed to have legislation in place by 2012—importantly, when the European law kicked in—and he stated:
“When the European Directive 2004/24/EC takes full effect in April 2011 it will no longer be legal for herbal practitioners in the UK to source unlicensed manufactured herbal medicines for their patients. This Government wish to ensure that the public can continue to have access to these products.
In order to achieve this, while at the same time complying with EU law, some form of statutory regulation will be necessary and I have therefore decided to ask the Health Professions Council”—
the strong regulatory body—
“to establish a statutory register for practitioners supplying unlicensed herbal medicines.”—[Official Report, 16 February 2011; Vol. 523, c. 84WS.]
Progress, however, has been slow.
Before I get to the solutions, as prompted by the hon. Member for Vauxhall (Kate Hoey), let me emphasise that, although a Health Minister is responding to the debate, we should not be under any illusion that only the Department of Health is affected. If we do not got things right, we will see a large number of small businesses folding, because the whole supply chain of herbal medicine will collapse. That is extremely unsatisfactory.
Furthermore—I will not stray into this territory for long, Mr Bone, in case you are thinking of calling me to order—when the Science and Technology Committee went to Harwell to look at the European Space Agency, at its work on satellites and at what we are doing with the global positioning system in Europe, we looked at the Catapult centre, which is an organisation backed with hard cash by the Government to drive science forward. That is fine, and I asked them whether it was picking winners, but while I was listening in the state-of-the-art space centre, I was thinking, “But what about the small businesses we already have?” What will we do about the people who are providing a service to the community in health care? What will we do with them if their livelihoods are under threat?
Mr Hollobone
My hon. Friend’s excellent speech has come to the nub of what could be a huge crisis. If statutory regulation fails to go ahead, a wide range of herbal medicines supplied by practitioners to their patients will be lost. The directive has already stopped practitioners prescribing herbal medicines made by manufacturers and herbal suppliers for prescriptions to individual patients. Potentially, thousands of small and medium-sized herbal enterprises could go out of business.
David Tredinnick
My hon. Friend illustrates the point. The European directive on traditional herbal medicinal products now prevents third-party manufactured herbal medicines being prescribed to patients by practitioners, as well as individualised herbal medicines prescribed by practitioners and manufactured by a third party. One of the communities in the herbal medicine diaspora most affected is that of traditional Chinese medical practitioners. The directive has already had a negative impact on the availability of Chinese herbal medicine in the UK and Europe. The problem lies in the fact that the directive stipulated that, to prove traditional usage, there must be a 30-year history of usage, of which 15 years must be in the European Union. That can be difficult, because many Chinese medicines have been used for thousands of years in China—Chinese medicine goes back 3,000 years at least—but not in the European Union or the UK.
The directive was also conceived before we had the vast opening up of trade with China. Probably, no one envisaged what was going to happen. I will touch on that, because I was speaking to the Foreign Secretary about it last week. We now have a situation in which, once stocks of some Chinese medicines run out, it will not be possible to buy many of the formulations currently available.
Kate Hoey
Is this another example of the European Union interfering in all sorts of areas about which our own country should be able to make up its mind? Is this not another opportunity to say that we need to get some powers back from the European Union or leave it altogether?
David Tredinnick
The hon. Lady is right. We all saw the headlines in the Sunday papers, and the coalition Government are intending to do just that. I hope that we can get some powers back. One of the solutions that I will propose—I know that you have an impartial role as Chair, Mr Bone, but I have heard mention of the European Union pass your lips in the past—may not even involve the European Union.
To finish with the Chinese problem, we are dealing with an international issue. We are trying to develop trade with China and have just opened a lot of trade missions there—the Department for Business, Innovation and Skills and the Foreign Secretary are backing such attempts—and we see it as a great area, but the Chinese are not happy about the idea that they have western medicine in their country, but we do not make full use of Chinese medicine over here. I have spoken to people about that. The idea that we will have a sweeping of the shelves of Chinese medicine will not play well in the international domain. We have had some controversial issues—the Government’s approach to the Dalai Lama was not overwhelmingly well received by some people in China, although many in this country support what has happened over there. If the Foreign Secretary has not yet been in touch with the Minister, he might well do so, because our international position with China is affected.
Recently, somehow, we have got to an impasse. I have had some helpful conversations, but there have been all sorts of suspicious signals and it is no secret that some practitioners have found it hard to get to the Department; some of the herbal medicine governing bodies have complained that they have not had easy access. Things do not feel quite normal, because the flow of information has not been what we might have expected. I have been told that the problem that stalled the process occurred in Poland.
In short, the European Court of Justice ruled that Poland was importing and selling unapproved drugs. It ruled against the Poles. Apparently, that has brought everything to a grinding halt in the UK. I sent the Minister a copy of the opinion that I received from the European Herbal and Traditional Medicine Practitioners Association, which was provided by David Reissner, a partner with Charles Russell lawyers and an acknowledged expert in pharmacy and health registration. There is no better person to give an opinion. In his letter he says:
“In my view the Poland case was primarily about whether financial considerations could be used as a justification for permitting the use of medicines that do not have a market authorisation. My conclusion is that the statutory regulation of herbal practitioners is still compatible with the ability by such practitioners to be authorised health-care professionals”—
that is a key phrase—
“who can order specials for individual patient use, relying on the exemption in Article 5.1 of EC Directive 2001/83.”
He continues:
“I also confirm that it is my opinion that statutory regulation is the only way to ensure that herbal practitioners are considered to be authorised health-care professionals within the meaning of Article 5.1 of the Directive.”
Mr Hollobone
To ensure that I understand, is my hon. Friend saying that Poland has effectively been caught out misusing the special needs provision in article 5.1, whereas the Department of Health proposed a perfectly legitimate scheme under the same article but has been put into a state of paralysis by the European Commission’s judgment?
David Tredinnick
That is pretty much right. The fact is that the Poles were trying to get round the system, were caught out and European law was applied effectively, but we are not in the same situation. I am sure the Minister has looked at the matter carefully, so will he please tell us his view? As far as I can see, there is absolutely no justification for using Poland and that view is widely held in the Community.
The key reason why the issue has got stuck has nothing to do with health care but is to do with the turf war and vested interests. I suspect that there are people in the medical establishment who do not want statutory regulation because they think it would interfere with the status of their own profession. When I talked to the Department for Business, Innovation and Skills about this, there seemed to be some confusion because it thinks that we might be going down a route of more regulation unnecessarily, but, sine qua non, there will be no herbal sector if we do not do something about it. Not doing something is not an option. We cannot just leave the matter as it is. I am pretty sure that vested interests in the medical establishment are trying to block this.
I said in the House recently that I had had a chance meeting with Lord Wilson of Tillyorn who was the last but one Governor of Hong Kong and introduced statutory regulation of herbal medicine there. I asked him what the objectives had been and whether he had problems with the medical establishment, and he said that he did. There are two issues: health care and vested interests. That is worrying because those vested interests may be very powerful. Returning to what Dame Sally, the chief medical officer, said and what I learned at the Royal Society last Friday, I ask those vested interests to back off because antibiotics are not working. We need to find something else and herbal medicine is one way forward. It has been suggested that there would be a legal challenge, presumably by people who are generally hostile to herbal medicine and increasingly misguided and misinformed. The Royal Society is the premier scientific body in this country, and the game is changing.
Mr Hollobone
Herbal medicine is extremely cost-effective and could help the country to tackle the ever-rising drugs bill in the national health service.
David Tredinnick
I have seen evidence in Europe that when doctors combine the two, the allopathic drugs bill can be reduced because herbs tend to be less expensive. That may worry manufacturers, and it has long been said that they are actively campaigning against this. They would be wise to accept that working with natural medicine is good for sales of conventional medicine.
Mr Peter Bone (in the Chair)
Order. I apologise that I forgot to say at the beginning that I intend to start the wind-ups no later than 10.40, and that two Members have written to me asking to participate in the debate.
David Tredinnick
You are ever courteous, Mr Bone, and I will not detain the Chamber much longer. I am acutely aware of not taking up other people’s time.
The Minister has three options. The Health Practitioners Council was the original idea. The Professional Standards Authority for Health and Social Care oversees the regulatory work of other organisations but is not as robust. A special licensing system for practitioner-prescribed products is a possibility, provided they are not traded between member states, and that may be a way out of the problem. We must find a solution, or there will be a disaster in the long term. I have used Chinese herbs and herbal medicine for many years, and I find them extremely safe and effective. I want people in this country to be able to use herbs. The key objective for the Minister is to ensure that the maximum number of products is available safely through regulated practitioners.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Bosworth (David Tredinnick) on bringing this matter to the Chamber for consideration. Many of us have herbal shops in our constituencies. We are aware of their good work, and that has been backed up in interventions today.
I have been contacted about the issue by a small local health food shop in the main town of my constituency, Newtownards, and by numerous patrons of that little shop who benefit from it. That is the point I want to make. The issue is clear: if EU interference continues, it will put businesses out of operation and people out of jobs, and it will result in more people searching the internet for remedies that may not be safe. That will not bring about any benefits. The EU lingers like a shadow over almost everything. Regulation is needed, but it is also necessary for common sense to prevail, and the balance may be difficult to achieve.
Mr Gregory Campbell (East Londonderry) (DUP)
My hon. Friend has touched on the crucial point of the debate. Balance is needed to try to avoid people accessing unauthorised, unprofessional and perhaps harmful products, but to enable them to access products made by professional herbalists that they believe and evidence shows improves their condition. We must ensure that we get the balance right between the pursuit and prosecution of those who engage in bad practice and the promotion of those who engage in good practice.
Jim Shannon
My hon. Friend has gone to the crux of the debate in those few words. It is about getting a balance between allowing people to continue to use their herbal medicines and ensuring that they do not indulge in anything outside that.
I beg your indulgence, Mr Bone, because I would like to take this opportunity to highlight the save our supplements campaign, which has been well publicised. We should all be aware of the goals of that campaign and the ramifications for today’s topic of regulation. The issue that is causing concern in health shops is maximum permitted levels. It has been suggested to me that interference by Brussels—the shadow of Europe is almost like the grim reaper who hangs over everything that we do in the House—will set low doses for dietary supplements, so removing choice from consumers and adversely impacting on high streets.
Mr Hollobone
It would not be a Westminster Hall debate without a contribution from the hon. Gentleman, and I am enjoying it hugely. I am all for bashing Brussels and agree that there is no need for the EU to interfere with the issue, but the EU has given this country a way to address the matter through the establishment of a statutory register, which the present Government undertook to do by the end of 2012. Surely, there is complicity in the Department of Health, and we need the Department to explain why it has not fulfilled that undertaking.
Jim Shannon
I thank the hon. Gentleman for his valuable intervention, which gets to the crux of the matter and makes a point that I will come to later. We have an opportunity to address the issue, and I hope that the Minister can put the record straight when he responds.
Some high street health food shops are struggling to compete with internet retailers, which often offer a cheaper price, even though, more often than not, the product is inferior. Again, that uncertainty must be addressed. We have been made aware of the facts through previous speeches and interventions on the subject. For example, in a statement on the regulation of herbal medicine and traditional Chinese medicine, the Secretary of State said that he aimed
“to have the legislation in place in 2012.”—[Official Report, 16 February 2011; Vol. 523, c. 77WS.]
We are very aware of that and are wondering why it has not been done. Will the Minister indicate what is going to happen?
I have not been in Westminster long—I am one of the new intake from 2010—but I realised early on that things do not happen in a flash. However, “subject to parliamentary procedure”, should, in my opinion, not involve such a delay. I share the concern of my constituents and of Members present that the issue has been hijacked by EU regulations. In conjunction with the hon. Member for Bosworth, I reiterate that that was never the intention. Let us get the legislation working in Westminster and ensure that it delivers for our constituents.
The idea of the legislation is to ensure that people are licensed to sell and offer advice and that the trade is as safe as can be. On the issue that my hon. Friend the Member for East Londonderry (Mr Campbell) referred to, the girls in my office, who are always trying to get me, as an MP, to slow down and take better care of myself—that is what they tell me anyway—told me that they went to the local health food shop and were amazed at the wealth of knowledge that the lady who helped them had. She clearly was tremendously knowledgeable, and someone could spend the afternoon discussing what the best herbal medicine for them is. It turned out that that lady had a degree in herbal medicine and was able to suggest many different things.
There is a very real fear that should the legislation not go through and should our health food shops continue to suffer from our inaction, or from the Government’s inaction, such closures will mean that more people will order online with no face-to-face interaction or advice. They will not be told that they should not take certain supplements if they are on other medications, or that two supplements may counteract each other. The problem will not only mean fewer jobs on high streets, but potentially more pressure on our GPs in surgeries, as they try to figure out symptoms that may have been caused merely by people taking the wrong combination of supplements. In other words, the expertise and knowledge of people in herbal medicine shops is critical.
Not many of us question the benefits of supplements, especially in the busy lives that we lead, which often mean that we cannot eat as healthily as we would otherwise like. However, who here knew that taking the blood thinner warfarin with a multivitamin containing vitamin K would put people’s health in jeopardy? The lady in the health food shop did, and she was able to advise people who came to her about it. What happens when there is no local shop? Will GP calls be taken up with queries from, for example, people suffering from nausea, dizziness and so on, who find out, after extensive and expensive tests, that when they read in their magazine that vitamin E encourages glossy, thick hair, they had not realised that the aforementioned symptoms could be caused by too much vitamin E. That did not appeal to me, but if I had thought that vitamin E would have given me glossy black hair, or even roots, I would have bought it by the gallon. However, unfortunately, that was not the case. When people are buying supplements in health food shops, they ask what they are taking and are given advice. I hope that the point I am trying to make can be seen; it is very clear.
It is my belief that regulation by those who are knowledgeable is essential, and that should not be diluted by trying to ensure that the latest round of EU tick-box regulations are checked. The issue merits Government attention and a full debate process, and we are glad to have this opportunity in Westminster Hall. I again congratulate the hon. Member for Bosworth on securing this critical debate. I will support him in continuing to bring the issue to the Government’s attention to see action in terms of health and safety, as well as job security. I apologise, Mr Bone—I have guests in the Gallery that I have to take round the Chamber in a very short time, but like the character says in the film, “I’ll be back.”
Kate Hoey (Vauxhall) (Lab)
It is a pleasure to follow the hon. Member for Strangford (Jim Shannon). I congratulate the hon. Member for Bosworth (David Tredinnick) on securing the debate, which is very timely, given that the House is about to rise for the summer recess, and we are seemingly still no nearer to getting what was promised some time ago—indeed, by the previous Government as well. It has been a long saga, as the hon. Gentleman outlined. I shall speak only briefly, because I want to give the Minister a long time to explain why we are in this position.
I start by reiterating my view that when people voted to join the common market back in 1975, they never would have dreamt that the EU would interfere in this kind of thing. However, it is absolutely crucial that if we are going to prevent the very well-established and effective herbal medicine products from disappearing, literally, from our shops and stop the consequent blow that that would mean for the retail sector, we need to get this regulation as quickly as possible.
I dislike regulation and want to see less of it. I believe that most people have common sense; they know what is good for them and want to do what they think is right. They do not need bureaucrats from the Department of Health telling them all the time what they should and should not be taking. We hear that all the time in so-called public health adverts, when most of what is said is either common sense or complete nonsense. I am a great believer in using not only herbal medicine, but natural products from our countryside. There are so many common-sense things that most of us grew up with—not necessarily only people brought up in the countryside but them in particular. If someone got stung by a nettle, they went immediately and looked for a docken leaf. We did all sorts of things naturally, and now, very few people seem to feel that that is what we should look to. I am afraid that vested interests are the reason for a lot of that. The pharmaceutical industry does not want to see it happening and would love to get rid of all health food shops.
Mr Gregory Campbell
Does the hon. Lady agree that as well as the vested interests that she alludes to, at times, in the medical establishment, there is almost a form of elitism that denigrates herbal medicine, suggesting that it only has a placebo effect and is not practically of benefit to people, even though many testify that it is?
Kate Hoey
The hon. Gentleman puts it very well. That is what happens, not only in the pharmaceutical industry, but with doctors, who have a very narrow view of what health is, in my opinion. That makes it all the more important that we ensure that alternative medicines are available. It is great that we have an heir to the throne who believes that some of this is really important. I wish that the Department would listen to His Royal Highness Prince Charles, because some of what he says on the matter is absolutely right.
The other issue that I want to raise is about the Health and Care Professions Council, which I think the Minister has overall responsibility for. It is based in my constituency and does a brilliant job. However, recently, it seems as though the Department’s general view on what it does and how it works has changed. We have been trying to get sports therapists registered for a very long time. Everyone agrees that that should happen. The HCPC, which is meant to be the body that gives advice, has gone and said, “This must be registered. We must do this.” Sport England wants it to happen, as does anybody involved in sport; yet somewhere in the Department, there is a block. I actually do not think that it is Ministers; I think that it is officials. Officials do not care who is in government; they do what they want to do; and they will continue to pull a line. It seems as though the Minister or the new Secretary of State could be dangerously close to heeding advice from officials to drop the whole thing. I worry very much about that.
David Tredinnick
When I was working on my speech for today, I looked at the lists of those who are regulated by the Professional Standards Authority for Health and Social Care and the Health and Care Professions Council and I could not for the life of me work out why some were on one list and some on the other. There is another debate to be had on that issue.
Kate Hoey
I hope that the Minister will give us some clarification on that.
Many campaign groups, including Consumers for Health Choice, are very clear that they want the Secretary of State and the other Ministers to ignore the siren call from officials and fulfil their promises. This is very simple. When the register was announced back in February 2011, it was warmly welcomed by virtually everyone. Consumers were pleased that the register allowed an exception for herbal practitioners from the traditional herbal medicinal products directive—an EU law that became fully applicable in April 2011 and would have meant the banning of all unregistered herbal medicinal products. People will remember the campaign that was held across the country. All MPs got many letters of protest from constituents and from herbal shops and health shops. At the time, the position was that virtually all herbal medicinal products would have been banned. A register would have allowed practitioners to access unlicensed products, thus preserving choice in relation to safe and effective products for thousands of consumers. We all want people to be safe, but that has to be within the broad band of common sense and experience, not because a particular official decides that they do not like a product.
The industry was very pleased. Obviously, the practitioners were delighted that they could still use products that they had used for many years and would not see their consumers drift away, disappointed by a restriction stopping them buying things. All the manufacturers and retailers were pleased for the same reason. It was a win-win situation, so where is the register? The reality is that, because campaigners were reassured by the Government’s words—perhaps people should have been more cynical about the promises of a Government of any sort; that is why there is such a disconnect between the public and politicians—we relaxed the pressure to introduce the register. Of course, the Government got distracted by the huge and messy Health and Social Care Bill and we lost the then Secretary of State. That is where we are now.
I am very concerned and I want to hear the Minister give us an assurance today that this proposal has not been dropped, that the officials are not getting their way and that the register will be introduced as quickly as possible, so that everyone can exercise choice about what they use—choice about their health and how they treat their body—in a way that is not dominated by directives from the European Union.
Mr Philip Hollobone (Kettering) (Con)
Natures abhors a vacuum, Mr Bone; it looks as though it falls to me to fill it, albeit briefly. I apologise that I cannot stay for the end of the debate, but I have been encouraged to speak by the excellent contributions that we have had so far, led nobly by my hon. Friend the Member for Bosworth (David Tredinnick), who has an unparalleled reputation for knowledge in this area. I am sure that we all commend him for that.
There is no reason at all why the European Union should interfere in this issue. Why should not the United Kingdom be able to decide for itself whether it wants to regulate herbal medicines? This is another area in which the European Union is unnecessarily interfering in our daily lives and, of course, affecting millions of people. We have already heard that more than 3 million people access Chinese herbal medicine in any two-year period and that 25 million of our citizens buy herbal products over the counter in any two years, so this is a matter of huge interest.
The problem is quite technical, but I think that we could easily overcome it, as indeed the Government said that they would. The European Union has given this country a way around the European Union regulations, and the Government took up the challenge. In February 2011, two months before European directive 2004/24/EC took effect, the then Secretary of State for Health said:
“This Government wish to ensure that the public can continue to have access”
to unlicensed manufactured herbal medicines. That was the clear will of Her Majesty’s Government. The Secretary of State continued:
“In order to achieve this, while at the same time complying with EU law, some form of statutory regulation will be necessary and I have therefore decided to ask the Health Professions Council to establish a statutory register for practitioners supplying unlicensed herbal medicines.”—[Official Report, 16 February 2011; Vol. 523, c. 84WS.]
As the hon. Member for Vauxhall (Kate Hoey) said, millions of people throughout the country—practitioners and users—took great comfort from those words and the clarity of direction laid out by Her Majesty’s Government.
Sadly, although the Government promised that the register would be introduced by the end of 2012, we are now well into 2013 and there is no sign of it. Presumably, the Secretary of State made his clear statement on the advice of officials in his Department. If it is the officials who are now telling the Government that they cannot have the statutory register, we need to hear from the Minister today that that is the case and the reasons for that about-turn, because millions of people in this country, including many of our constituents, took great comfort from those words in 2011.
As my hon. Friend the Member for Bosworth said, it appears that the Department has been thrown into a state of paralysis by the judgment on Poland. Poland was clearly caught out trying to break the rules and, under EU regulations, the Commission took Poland to the Luxembourg Court, which duly found against Poland. The Polish case is not a parallel to the United Kingdom situation. It may be a judgment on the same part of the EU legislation, but Poland was trying to abuse article 5.1; the United Kingdom Government said that they wanted to comply with article 5.1, by coming up with the statutory register. If Her Majesty’s Government believe that that judgment on Poland is the cause of their paralysis, the Minister needs to say so today and explain why that judgment is holding up the United Kingdom setting up a statutory register.
An EU directive has come in; that was in April 2011. The Government said that they would have a statutory register by the end of 2012, to ameliorate the worst effects of the directive, yet more than two years on, the herbal medicine industry, which Her Majesty’s Government said that they wanted to protect, remains exposed to that EU directive. That is simply an unacceptable situation. There will be, in all our constituencies, small and medium-sized herbal practitioners that are finding their livelihoods affected by an EU directive that the Government promised they would ameliorate—two years on, they have failed to do so. The Minister needs to explain to the House today why we are in this sorry state and what he will do to sort it out as quickly as possible.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to see you in the Chair, Mr Bone. I congratulate the hon. Member for Bosworth (David Tredinnick) on securing the debate. As someone who, over the past few days, has been suffering with quite bad hayfever, I would quite like a remedy, herbal or otherwise, for my suffering. I am pleased that we have had a chance in today’s debate to discuss some very important issues in relation to the regulation of herbal medicine. I know from the hon. Gentleman’s previous contributions in the House that he takes a very keen interest in and is a committed supporter of various forms of alternative medicine, including homeopathy and herbal medicine. He continues to raise these issues passionately in the House, most recently in the estimates day debate last week. I also congratulate the hon. Members for Strangford (Jim Shannon) and for Kettering (Mr Hollobone) and my hon. Friend the Member for Vauxhall (Kate Hoey) on echoing the many issues and problems. There are issues with the provision of non-manufactured herbal medicine due to the absence of regulation of herbal regulation practitioners. There have admittedly been delays in making progress on the regulations, which all relevant parties agree with, and all sides agree that the unexplained delays are frankly unacceptable. I will return to that later in my contribution.
As we know, the MHRA is responsible for medicines. It explains the licensing of manufactured herbal medicines as follows:
“The new European Traditional Herbal Medicinal Products Directive…came into effect on 30 April 2011. The Directive establishes a regulatory approval process for herbal medicines in the European Union...It requires each EU Member State to set up a traditional herbal registration scheme for manufactured traditional herbal medicines that are suitable for use without medical supervision. Companies are no longer able to sell manufactured unlicensed herbal medicines unless they have an appropriate product licence”.
The supply of non-manufactured medicines is permitted, but there remains a long-standing concern with the non-regulation of herbal medicine practitioners. Currently, anyone can set up as a practitioner. The guidance states:
“Regulation 3 of The Human Medicines Regulations 2012 (formally Section 12(1) of the Medicines Act 1968) is commonly referred to as the ‘herbalist exemption’ and permits unlicensed remedies to be made up and supplied by a practitioner to meet the needs of an individual patient following a one-to-one consultation. The existence of this regime is greatly valued by herbal practitioners and by many members of the public. However, there are widely acknowledged weaknesses in the public health protection given by the regime. Regulation 3 remedies are not subject to a regime of specific safety or quality requirements. There are no restrictions in terms of those who operate under the regime. Anyone—irrespective of qualifications or experience—can practise herbal medicine and, after making a diagnosis and forming a judgment about the treatment required, can make up and supply an unlicensed herbal medicine.”
As we heard in the debate, there was a great deal of discussion about regulation under the previous Government. They supported moves towards statutory regulation of herbal medicine practitioners, which was the subject of consultation in 2004. The consultation report stated:
“The majority of the responses indicated strong support for the introduction of statutory regulation, in order to ensure patient and public protection and enhance the status of the herbal medicine and acupuncture professions.”—
That point is important in its own right. In 2008, a report to Ministers from the Department of Health steering group on the statutory regulation of practitioners of acupuncture, herbal medicine, traditional Chinese medicine and other traditional medicine systems practised in the UK concluded:
“The Steering Group is strongly of the view that the decision to statutorily regulate professions practising herbal medicine and acupuncture is in the public interest.”
It also urged that there be no Government delay in introducing regulation, saying:
“The Steering Group is of the view that there is an urgent need to proceed without delay with the statutory regulation of practitioners of acupuncture, herbal medicine, traditional Chinese medicine and other traditional medicine systems. The Department of Health has been working with practitioners from these sectors, in some cases for over a decade, and a timeframe has been published that has not been adhered to.”
On 3 August 2009, the four Health Departments of the UK published a consultation paper on statutory regulation of practitioners of acupuncture, herbal medicine, traditional Chinese medicine and other traditional medicine systems practised in the UK. A clear majority of responses—85%—were in favour of statutory regulation, but, as we have heard, there has been little progress, despite the then Secretary of State for Health, the right hon. Member for South Cambridgeshire (Mr Lansley), pledging on 16 February 2011 to regulate herbal medicine practitioners, as the hon. Member for Bosworth pointed out. The Health and Care Professions Council was asked to establish a statutory register for practitioners supplying unlicensed herbal medicines, but there has been no further progress. When does the Minister expect that he will establish a statutory register for practitioners supplying unlicensed herbal medicines? The National Institute of Medical Herbalists is rightly critical of the lack of progress:
“In February 2011, the Secretary of State for Health announced that UK herbalists were to be statutorily regulated. He pledged that, subject to the usual procedures, the Department of Health (DH) would have this ready by 2012. Statutory Regulation (SR) is urgently needed to protect the public from untrained herbalists and also to allow trained herbalists to continue to practice within the constraints of EU Directives. Regulation will be via the Health and Care Professions Council (HCPC) which regulates dentists, dieticians and physiotherapists. Two years later the DH has failed to publish the draft legislation and there is no sign of progress. The fear is that with many other priorities the DH will let the issue drop. Failure to implement SR for herbal medicine practitioners is disastrous…In short, statutory regulation is clearly in the public interest!”
A recent MHRA survey showed that about a quarter of the population use over-the-counter herbal medicines. If that continues, as I suspect it will, surely the Government have a responsibility to ensure that arrangements are in place to make certain that such medicines are safe, as far as they can be, and that those who prescribe and dispense such medicines are appropriately qualified and regulated. It is therefore important that we get a clear view from the Government today on whether they will continue with the statutory registration proposals. It is also important that they give us some confidence that it will be done within a reasonable time frame, so that we can give that confidence back to the industry and those who use herbal medicines.
I commend the hon. Member for Bosworth for his persistence in this matter and for securing the debate today. I look forward to the Minister’s assurances that the Government still take regulation seriously—I hope— and are looking for practical ways to ensure that it can proceed swiftly.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
It is a pleasure to serve under your chairmanship, Mr Bone, for, I believe, the first time. I am sure that you were salivating, listening to the issues raised in the debate—
Mr Peter Bone (in the Chair)
Order. I want to make it clear to the Minister that when I sit in this Chair, I have no views on anything.
Dr Poulter
Indeed, Mr Bone, as you say, you have no views on anything when you are impartially chairing the debate, but I am sure you pay keen interest to the topics raised, in your position as Chair and otherwise.
I pay tribute to my hon. Friend the Member for Bosworth (David Tredinnick) for securing the debate, which I am sure is of interest to the consumers and practitioners who use herbal medicines, as well as to the many Members who attended the debate today. None of us disagree with the principles articulated here—we can all sign up to them—but good government is about working through the practicalities of proposals to ensure that they become good laws, as I will discuss later.
There have been many good and worthy contributions to the debate. The hon. Member for Strangford (Jim Shannon) showed his strong support for herbal practitioners in his constituency, and he was right to say that things in Government do not happen in a flash but have to be properly thought through. I want to reassure him that some of the products he mentioned—he talked about the benefits of vitamin E, for example—are freely available from herbal practitioners, and indeed from pharmacists and other places.
There were other strong contributions from my hon. Friend the Member for Kettering (Mr Hollobone), who is no longer in his seat, and the hon. Member for Vauxhall (Kate Hoey). The hon. Lady made her case eloquently, and I would be happy to meet with her at a later date to discuss sports therapists further, but I would not wish to intrude on Mr Bone’s patience by talking about the issue today and I hope she will forgive me for that.
I pay particular tribute to my hon. Friend the Member for Bosworth for his principled and long-standing support for herbal practitioners and his interest in alternative therapies, homeopathy and many other such issues. Today he has demonstrated his extensive knowledge of the topic under debate, and of alternative therapies in general. I am sure I am right in saying that he is the most informed Member of Parliament on many of these issues, and it is a great tribute to him that he has secured the debate today. I am sure that herbal practitioners and alternative therapists would wish to pay tribute to his great work and his advocacy on their behalf, and on behalf of his constituents.
My hon. Friend is right to highlight the chief medical officer’s challenge about the future of antibiotics, but we can make a clear distinction between those remarks and the subject of today’s debate. I am sure that the chief medical officer would not wish her remarks to be associated with a call for a greater use of herbal medicine—that was clearly not outlined in her paper. Although it is important that we always consider ways—via traditional medical routes or otherwise—of improving people’s health and providing the right therapies, the paper clearly laid out the long-standing challenges as being about antibiotic resistance, and it would be wrong, therefore, to allow the two issues to be confused.
By way of background, it is worth highlighting that although we support patient choice some herbal products have caused harm to consumers. There are a number of reasons why that might happen: the herb may be intrinsically toxic; the product may be accidentally or purposefully contaminated by harmful materials or heavy metals; people may choose herbal products for serious conditions when medicines with a solid evidence base would be more appropriate; and, if herbal products are taken together with conventional medicines, the interactions may be unpredictable. It is right, therefore, that we support the responsible use of medicines and have a licensing system.
Directive 2004/24/EC on traditional herbal medicinal products was introduced to harmonise the European Union internal market and remove barriers to free movement. The directive deals with products manufactured on an industrial scale, and makes all operators in the market comply with the same set of rules, facilitates free movement and ensures increased product safety, which, I am sure we agree, has a positive impact on patient safety and public health.
The question of whether herbalists and traditional Chinese medical practitioners should be statutorily regulated has been debated since the House of Lords Science and Technology Committee first reported on the matter in 2000. The hon. Member for Vauxhall and my hon. Friend the Member for Bosworth outlined in their remarks that there is a lot of background and history. The previous Government grappled with the issues, and the current Government are also considering how to address and fulfil the commitments made by the previous Health Secretary, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley). Hon. Members will be aware that on 16 February 2011 the Government announced their intention to take forward the regulation of herbal medicine practitioners and traditional Chinese medicine practitioners, specifically with regard to the use of third-party products in their practice.
Herbal products broadly fall into three categories. The first are the 310 herbal medicines that already have a marketing authorisation or a traditional herbal registration—in other words, a product licence. Those 310 medications are currently available for use and are effectively licensed. They are safe and widely used, and have undergone all relevant testing and checks. The second category, which is the one we are addressing today, covers products manufactured by a third party. Such products have been illegal since April 2011, following the implementation of the EU directive. The third category is products made up by a practitioner on their own premises following an individual consultation. Although such products are not affected by the directive, some of the herbal ingredients may be restricted by the Human Medicines Regulations 2012.
The previous Health Secretary’s concerns about the second category—products manufactured by a third party—prompted the decision to take forward statutory regulation of such products. The Government’s intention was to allow regulated herbal practitioners lawfully to source third-party manufactured herbal medicines, with appropriate safeguards in place to minimise the risks associated with the products, but since April 2011 the European directive has made it illegal for herbal practitioners in the UK to source such products for their patients.
Following the EU judgment in the case of the Commission v. Poland, which my hon. Friend the Member for Kettering mentioned, we have reassessed the risks. That case actually concerned unlicensed conventional medicines being used because they were cheaper, and although there is a clear distinction between those products and herbal remedies we had to look at what else the judgment said. It looked at the specials regime and, critically, it emphasised how strictly the regime must be applied. The judgment has a knock-on effect for what we propose for the use of herbal medicines manufactured by third parties without a licence, and it therefore needs careful consideration because there is a very high risk that we would be found to be in infraction of the European directive. We therefore need to consider further herbal products manufactured by a third party, and I will return to that point later.
The Government would, of course, like to find a way through the issue that supports responsible businesses and ensures public safety. Since the announcement in February 2011, the Department of Health has been working with officials in the devolved Administrations and with the Health and Care Professions Council to establish a statutory register for herbal practitioners. Alongside that, we have been considering a strengthened system for regulating medicinal products, to enable consumers to have access to a greater range of third-party manufactured herbal medicines. The process continues to be complex and lengthy, and it has been further complicated by the judgment in the European Union v. Poland case.
We acknowledge that there is strong support from some groups of herbal practitioners for the statutory regulation of the sector, but not all practitioners are in favour. I am sure, therefore, that hon. Members will appreciate that it would be irresponsible for the Government to undertake to alter the status of a group of workers without first ensuring that the policy and final decision offered an appropriate form of regulation and ensured that the proposals adequately addressed the risks posed to consumers of third-party manufactured herbal medicines.
As I stated earlier, complex issues are involved. We are discussing how to ensure that our proposals are fit for purpose and proportionate, and that they properly protect the public. I want to assure the hon. Member for Vauxhall that the matter has not been dropped. We absolutely support the principles outlined by my right hon. Friend the Member for South Cambridgeshire in his written ministerial statement to the House, and I fully appreciate that the delay is causing anxiety and concern to practitioners of herbal medicine and to consumers.
To ensure that we take forward the matter effectively, we want to bring together experts and interested parties from all sides of the debate to form a working group that will gather evidence and consider all the viable options in more detail, particularly because of the Polish case. I am aware of the concerns of my hon. Friend the Member for Bosworth about making timely progress, and I would therefore very much welcome his direct involvement in the working group to ensure that the interests of practitioners are properly looked after. We can meet when the House returns to work out how to take forward the proposal.
I hope that my commitment to setting up a working group will reassure my hon. Friend and all hon. Members that the Government are carefully considering this important issue. We recognise and agree with the principles, but the practicalities are such that we must have legislation that is fit for purpose—that does not trigger infraction proceedings from the European Union, but protects the public. That is vital in all health care matters, whether in relation to traditional medicines or to herbal medicines and alternative therapies. For that reason, we want to set up a working group and to work with my hon. Friend, and herbalists and others, to ensure that the legislation is fit for purpose. I look forward to discussing that with him in due course.
David Tredinnick
Before my hon. Friend sits down—I think that he was about to do so—may I thank him for his remarks? I am sure that knowing there is some progress is welcome, but I remind him that there have been many working groups in different guises over a long period, and the image that springs to mind is of the long grass. I am grateful to him for suggesting that I might be part of the process, but I want to be reassured that we are in the short grass. Lastly, is there general agreement with the devolved Administrations or is that a sticking point?
Dr Poulter
I reassure my hon. Friend that I am not aware of any points of disagreement with the devolved Administrations, but I will write to him and provide reassurance if there are any issues of which I am unaware. My understanding is that there is a unified position across all of the different health Departments.
Jim Shannon
On the devolved Administrations, I speak with some knowledge of the Northern Ireland Assembly, where my colleague Edwin Poots is the Minister of the Department of Health, Social Services and Public Safety. We and the Minister in the Northern Ireland Assembly are keen to have a focus of attention and a continuity of thought among all the regions of the United Kingdom to ensure that we can support the Under-Secretary of State for Health. The quicker he and the Government move that on, the gladder the regions—especially Northern Ireland—will be to jump in behind and support them.
Dr Poulter
The hon. Gentleman is absolutely right to highlight the strong working relationships, particularly with his colleague in Northern Ireland. We are grateful for that continuing strong working relationship on both this and other issues, and I look forward to working with him.
I reassure my hon. Friend the Member for Bosworth, who was concerned about the short and the long grass, that the intention behind his involvement in the working party is to keep it firm to its task. I am sure that he will want, as part of his involvement, to ensure that that happens. When we meet to discuss this further after the House returns in September, we can ensure that the proposals are proportionate and fit for purpose, and that they protect the public, including through giving people an informed choice about the use of herbal products.
Dr Poulter
We need to sit down together. I very much want to involve my hon. Friend the Member for Bosworth, and the hon. Lady would be very welcome to join that discussion when the House returns. The idea is to get a working party up and running in the early autumn to ensure that we progress matters. We obviously need to discuss issues raised today about statutory regulation and third-party manufactured products, and to look at such products in detail to see which might be classified as more akin to food additives or vitamin and mineral supplements and which as more akin to medications, because there is a spectrum. We need to work through such issues to make sure that we get to the right place.
It is important that any legislation not only passes the test of principle—we are all signed up to it—but is practical and fit for purpose. Particularly in light of the judgment in the case of the EU Commission v. Poland, we have other issues to consider that make the matter a little more complex. I reassure my hon. Friend the Member for Bosworth and the hon. Member for Vauxhall that we are committed to making timely progress, and when we meet on our return in September, we can progress things. I am sure that my hon. Friend’s involvement will keep the Government keen to their task.
Mr Peter Bone (in the Chair)
I thank hon. Members for taking the time for an absolutely splendid debate.
Gift Cards
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Penny Mordaunt (Portsmouth North) (Con)
It is always a pleasure, Mr Bone, to see you in the Chair. I know that many in the House are exercised by the stories we have heard in the wake of companies going into administration of people not being able to cash in their gift vouchers or losing their savings in schemes such as Farepak. It is terribly unjust and it is time that we did something about it.
My experience with Portsmouth FC has taught me that the victims of a company’s administration are not always obvious. In that case, rules that were not widely known meant that football creditors were at the head of the queue for repayment, despite the fact that the credit of others had been just as vital to the running of the club. Those at the head of these queues might receive only a tiny fraction of their investment, and those at the back nothing at all. It is devastating to be told that, through the mismanagement of others, one will not receive back a penny of one’s loan. How much worse is it to be told that money one has paid over, not as a loan but in exchange for goods, will be taken without redress?
Jessica Morden (Newport East) (Lab)
The hon. Lady is quite right to highlight the issue of unsecured creditors losing money when companies go under. As she said, the situation is reminiscent of what happened with Farepak, when thousands of people lost their Christmas savings. It is only now, seven years later, that we have come to a very unsatisfactory conclusion. Does she agree that we should redouble our efforts, because what might seem like quite small amounts of money to some people are very significant to those whom she mentions?
Penny Mordaunt
I am grateful to the hon. Lady for her intervention. She is absolutely right to say that this matter disproportionately affects those people on the lowest incomes. As she rightly said, the Farepak incident, which happened before I was elected to this House, has been going on for a number of years, so it is really time that the Government acted to stop such poor practice continuing.
Charlie Elphicke (Dover) (Con)
I congratulate my hon. Friend on securing this important debate. Is she aware that the matter affects failing retailers as well? A YouGov poll in March 2013 found that 86% of people believed that gift cards should be regulated to protect consumers against failing retailers? Does that not show the importance of taking action as soon as possible?
Penny Mordaunt
I agree with my hon. Friend and I am grateful to him for his expertise. As I share a corridor with him in Parliament, I know that he is a champion of consumers in Dover and Deal and I am grateful to him for his support on this issue.
It is a terribly unjust position in which the holders of gift cards find themselves when the shop that issued the card goes into administration. Such people should not be treated as ordinary creditors. A grandmother who buys her grandchildren the once-ubiquitous WHSmith voucher for Christmas does not regard herself as having lent Smith’s any money. On the contrary, she has made a purchase. Indeed, her circumstances are just the opposite of a creditor’s, who might expect to receive some interest on his loan, as her gift card is worth less and less as time passes, due to the effects of inflation. It is as illogical to deny gift card holders the right to redeem their vouchers as it would be to demand that people who had bought their goods return them to the shop to help pay off the creditors. It is from that essential point that we must proceed today. A gift card is not a bond certificate; the money has not been loaned to the company. Quite simply, the collection of the product has been deferred, which is, in any case, to the advantage of the company. That principle has already been recognised at an EU level in respect of e-money, which is money put on to pre-paid cards or gift cards bought through third parties. Those moneys must be kept in segregated accounts pending the use of the cards, so that the consumer is protected.
In Britain, that scheme is regulated by the Financial Conduct Authority, a successor to the Financial Services Authority. Individual retailers may opt in to the scheme, but, for perhaps obvious reasons, the temptation seems to have been uniformly resisted. Although there is no mandatory and regulated scheme for cards issued by companies independently for use in their own shops, there appears to be no impediment to its introduction. Already many retailers that issue their own unregulated cards accept the regulated cards issued by third parties, such as the One4all card, including Argos, Boots, B&Q, Currys, Debenhams, Topshop and the aforementioned WHSmith. In all, the Gift Voucher Shop, which is responsible for the One4all card, has more than 1,500 corporate clients. Surely that is a double standard that should not be allowed to continue. Two customers who intend to spend their vouchers at the same shop could thus be in the absurd situation that one can have a full refund and the other receives nothing. The matter is left entirely to the discretion of the administrator.
It is true that under the Consumer Credit Act 2006, those who bought vouchers with credit cards are protected, but only if they bought between £100 and £30,000 of vouchers. The problem here is twofold: people who buy vouchers as savings, perhaps against the expense of Christmas, are very unlikely to use credit cards; and those who buy vouchers as gifts to put towards say the purchase of white goods on a wedding list are unlikely to do so to the sum of £100. Chargeback offers some protection to consumers using certain debit cards, such as Visa, American Express and MasterCard. In all circumstances, there is a 120-day window in which to make a claim for a refund, and the claim must be made by the purchaser, not the holder of the voucher. Once again, that is contingent on a given card supplier operating the scheme, and, in all circumstances, those who bought vouchers with cash, which is a likely scenario when smaller sums are involved and if the people buying them are paid in cash, are entirely exposed.
What is hard to understand is why the administrator is allowed to appropriate the money held against vouchers for the purposes of winding up the business. As I said earlier, that is akin to telling anyone who has previously bought something from that shop to return it without a refund, or the practices of the most artless playground bully.
Some administrators are prepared to accept vouchers, such as those for Nicole Farhi and Blockbuster. Holders of Republic vouchers were not so fortunate, which meant that the administrator simply took £1.2 million in advance payments. That is £1.2 million with just one retailer. The evidence of total sales suggests that there is still a demand for gift vouchers. Last year, more than £4 billion was spent on their purchase and, as they are not exchangeable for cash, one can only assume that retailers like them, too. How many of the people who contributed to that £4 billion knew that they, or the vouchers’ intended recipients, were so vulnerable?
Currently, holders of gift cards are well down the order of priority for creditors. They are on a par with Her Majesty’s Revenue and Customs, suppliers and unsecured creditors, but behind secured creditors, the costs of insolvency, and debts due to preferential creditors and employees. I do not argue too much with the order of creditors other than to say that employees should never be an afterthought. My point is simply that gift card holders do not belong on a list of creditors at all. It is not possible to exchange gift vouchers for cash, which is further proof that they are not a form of credit as there is never any prospect of getting back one’s money. It would be bizarre if this were permitted when a company went into administration. Rather, it should be possible to redeem one’s vouchers. That would resolve some of the concerns of the Association of Business Recovery Professionals about the knock-on effects of promoting holders of vouchers up the list of preferred creditors. R3, as it is known, is anxious that were card holders prioritised, businesses and suppliers, which are currently with card holders in the fifth tranche of those to be paid by administrators, would be even worse off.
I mentioned my experience with Portsmouth FC’s administration, and I understand only too well the hardship that is borne by small businesses that must extend credit in order to get the trade they need to survive when they are left hanging on administrators’ decisions. The same goes for employees, who are placed in the invidious position of waiting in limbo to know whether they will have a job in the future or be paid for the work they have already done.
There is also a concern that preferred creditors—those who issue secured loans—would be more wary of extending cheap or reasonable credit in the future if the list of preferred creditors were to be expanded to include gift card holders. At a time when small businesses and retailers are still concerned that lending is not getting through to the degree that is needed, that concern must not be dismissed.
R3 has put forward three possible solutions—a requirement to purchase bonds against the value of issued gift cards; the ring-fencing of the money used to buy cards until they are redeemed; and the extension of the 2006 Act to include purchases under £100. However, each of these solutions has problems. In the case of the first two, they would handicap solvent businesses by restricting cash flow and they could make administration more likely. Equally, extending the 2006 Act would come into effect only if administration procedures began, but cash buyers would still be out in the cold.
If one takes all of these factors into account—the need to protect the viability of going concerns and to treat gift card holders equitably, without undermining lending or supplier confidence, or disadvantaging employees —the solution seems clear. If vouchers are allowed to be redeemed, the administrator does not need to surrender the money that it has on deposit through the sale of gift cards. Instead stock, which would be very likely to be sold off at a generous discount to raise money quickly, would be exchanged for the vouchers.
Jessica Morden
The hon. Member has made some really important points. Does she agree that, at the very least, some kind of warning should be put on gift cards or vouchers? That would be a start—telling people what risk they face if things go wrong. It would also be a good way forward.
Penny Mordaunt
I agree absolutely with the hon. Lady. I have already said that there are products out there that would do the same thing as some of these gift vouchers and that could be exchanged for goods at an enormous number of retailers. Clearly, if people were aware of those particular e-money products and of how exposed they make themselves by not buying them, they would go and buy them. So she is absolutely right to point out that raising awareness is half the solution to this problem.
If the gift voucher holders were allowed to redeem those vouchers in exchange for goods, that would be done at pre-insolvency prices, which is after all the basis on which the cards were bought. Therefore, the impact on the administrator would be more modest than otherwise. Furthermore, the goodwill of the card holders would be sustained. The fact that they hold vouchers for a specific shop suggests that they would like to buy its goods, and they are the very people on whom the administrator would rely during a post-insolvency sale. Indeed, treating gift card holders better could make the administrator’s life much easier.
I do not pretend that this problem is easily solved, but it would be helpful if the Department for Business, Innovation and Skills recognised that there was a problem and that a solution was required. I have raised this matter in the House and I have written a number of times to the Minister who is here in Westminster Hall today. In one of the replies that I received, it was even acknowledged that gift cards are considered to be pre-payments for specific goods and services, rather than cash or an extension of credit—quite. However, the Department is content to continue to allow gift card holders to be treated as creditors.
I appreciate what the Minister has said to me in the past, namely, that in administration proceedings there is only so much money to go round and that administrators have to act in the best interests of creditors as a whole. However, it is apparently accepted that voucher holders are not creditors, so setting aside stock for them would not be to prefer one creditor over another. Indeed, the process might even lead to the sale of other stock for ready money. Her Majesty’s Treasury has shown a willingness to engage on this matter, and I hope that BIS will now be prepared to do so too.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
As always, it is a pleasure to serve under your chairmanship, Mr Bone.
I thank my hon. Friend, the hon. Member for Portsmouth North (Penny Mordaunt), for securing this debate, because she raises an important issue. She has been a long-standing advocate for moving the holders of gift cards and vouchers up the order in which creditors are paid when there is an administration or an insolvency procedure. She has been that advocate for very sound reasons. We all understand the distress that is caused when a business—whether it is a major high street chain or a smaller local company—goes into administration. People are very disappointed if they are holding gift cards, which often have been actual gifts to them, but those cards end up being worthless. Clearly, that situation causes upset and I understand the need and the desire to address it.
Indeed, the Government are keen to try to ensure that those types of problems do not continue. A huge amount of work has been done with the hon. Member for Newport East (Jessica Morden) and others on the particular issue of Farepak, to try to get the best deal for those people who faced those appalling circumstances just before Christmas a few years ago. We have seen some positive moves by parts of industry that perhaps show the way for us to find some solutions to this issue; I will discuss them later. The specific solution of moving gift-card holders up the hierarchy is not necessarily the best solution; there may be other solutions and I hope to explore some of them in my remarks.
Let me address the particular issue of whether we should change the order in which creditors are paid. Both my right hon. Friend the Business Secretary and I have listened very carefully to a range of views on whether consumers with pre-payment cards and vouchers should be made preferential creditors. However, the problems of doing so—some of which my hon. Friend touched on in her speech—prove that this is not a solution that is especially desirable for vulnerable groups, such as employees or small and medium-sized enterprises that had supplied goods to the business in question. Much as I sympathise with all of the people in that situation, there are individuals for whom there is a real responsibility to try to get as much money back as possible. Just looking at one group in particular is perhaps not helpful; we need to look at all the individuals who are affected by an insolvency.
Unfortunately, as my hon. Friend said, after an insolvency, an administration or a company not doing as well as it would have wanted to, a limited amount of money is available. Ultimately, that business has not been successful, and that money must be spread out among the creditors. The question is how that pot of money should be divided up.
Among those seeking to be reimbursed from that limited pot of money are employees who may have worked but not been paid their full wages; business suppliers, many of which may be the SMEs that we all want to support in order to help the economy, particularly in our own constituencies, and we are well aware of the challenges that small businesses face; financial institutions; and Her Majesty’s Revenue and Customs. The difficulty is that, with that limited pot of money, if we were to change the preferential creditor status to improve the position of holders of gift cards, that would necessarily make the position of those other creditors worse. Therefore, it is a win-lose situation, not a win-win situation.
I am particularly concerned about two of those groups—employees and SMEs. Just like gift-card holders, business suppliers fall within the category of unsecured creditors. Therefore, they often receive only a fraction of what they are owed in these cases. That can have a particularly disproportionate impact on their finances, and we need to ensure that that is uppermost in our minds when we consider this issue. Making gift-card holders preferential creditors could, especially if large numbers of gift cards were issued, reduce the already scarce funds available to those supplier businesses, which are arguably in as much need—if not more so—of those funds to continue operating and continue employing people. We do not want to end up with a system where more businesses are suffering financial distress. So, the suggestion that we do something that could have a negative impact on the financial viability of small businesses must be treated with a great deal of caution.
With employees, there is a slightly different situation, because they are already in the pool of preferential creditors. However, if we add more people to that pool, of course the money that is available must go further. Employees could be in an even worse situation, in already difficult circumstances. Of course, we feel for gift-card holders when a high street chain goes bust, but we also feel for the employees, many of whom have huge uncertainty and do not know whether they are going to keep their job, whether the company will be bought out or whether some branches will remain open. If they do not even get paid for the work that they have already done—although some schemes enable them to reclaim some amount towards the payment they would have received—they end up out of pocket. That is a particular concern when considering such a change.
My hon. Friend also mentioned secured creditors, such as banks, which do not necessarily always elicit the most sympathy in this House or in the wider public. However, if lenders cannot rely with confidence on the security given by borrowers, they might become less inclined to lend in the first place or might factor that risk into increased costs of borrowing. As my hon. Friend said, there are already challenges in respect of bank lending to small businesses. Putting further hurdles in the way and burdens in place could limit access to working capital for a business that might already be under financial pressure and, ironically, could perhaps hasten the failure of such a business and even its insolvency. These issues and impacts mean that that solution is not necessarily the right way to address the matter. My hon. Friend will not necessarily be happy with that answer, but I hope that she understands why the Government take that view.
Penny Mordaunt
I think that I am on the same page as my hon. Friend the Minister. My argument is that we should not be treating these people as creditors at all. A number of solutions have been discussed this morning. For example, the hon. Member for Newport East mentioned awareness; we have e-money products; and I have suggested that such consumers should not be treated as creditors and that they could receive preferential treatment in exchanging the vouchers for goods, which is what they originally wanted to do. I am keen that the Minister does something. There is considerable evidence that companies are continuing to sell vouchers even though they know that they are going to go into administration and cannot honour them.
Jo Swinson
My hon. Friend raises a good point. I will come to the potential solutions that we think could alleviate some of the pressure for consumers. It is quite right to say that that is where we need focus.
Some issues that my hon. Friend raised are worth pursuing, particularly those relating to the 2006 Act. I am happy to take up some of the suggestions raised by R3 and get back to her. That would help in some cases, but where payments are made in cash, which is often the case for the small amounts on gift vouchers, that protection would not necessarily be extended. Various solutions may assist.
We have been trying to work with the industry, challenging it to do more to deal with these issues and support these consumers. On whether goods will be able to be bought in exchange for gift cards, of course, it is not always the case that they cannot be. As my hon. Friend mentioned, in many cases administrators allow vouchers to be redeemed, although there is often an initial period of uncertainty, as in the example of Nicole Farhi last week, as she said. This is done for sound business reasons, where the administrator wants to preserve the goodwill of a business if their objective is to sell it on as a going concern for the benefit of all creditors. That can have real business benefits.
One challenge for businesses that know they are going into administration is that they are trying to ensure that they are as viable as possible and are maximising their business assets, which can be one reason why gift cards and gift vouchers continue to be sold. But if some other solutions could be put in place by industry, that may not need to be a problem.
There are four ways in which industry could be encouraged to think about how it can further protect consumers. First, as has been mentioned, the Electronic Money Regulations 2011 provide protection for prepayments when made in card form. My hon. Friend mentioned the One4all card and there is also a system operated by O2, where a card loaded up with money is then usable at a wide range of outlets, through the card issuer systems. It is not restricted to a single retailer or a group of retailers. Such cards are treated differently; effectively, much more like currency—like cash. If more gift cards were delivered through those open loop systems, that would be one way that the industry could help to protect consumers.
Secondly, there is the good example of the Co-op, where payments made by consumers can be held in a separate trust-protected account. The Co-op Christmas savings has now moved to this model, which is an excellent initiative. It deserves huge credit for doing this and recognising that this gives their consumers extra benefit, and it is another reason for consumers who want to save for Christmas in that way, with an organisation or a shop such as the Co-op, to do so. It is also important that the Co-op managed to do this quickly, without incurring significant additional expense and within the existing constraints of its operating systems. I encourage others to follow such a model.
Thirdly—we need to challenge the industry on this—gift card and voucher issuers should consider adopting an industry code of practice, with specific commitments on the protection of customers’ prepayments. The Trading Standards Institute has a consumer codes approval scheme, with core principles on the protection of prepayments and deposits. The widespread adoption of those principles by the industry would be a clear message to administrators about the industry view on how consumers should expect their prepayments to be treated.
Fourthly, it is also worth exploring whether industry could introduce insurance-backed protection of prepayments. This already works well within the package travel sector. Such options may be part of the solution more widely within the retail sector and may be able to protect consumers.
The hon. Member for Newport East mentioned having a warning system on gift vouchers. This has merit, because one challenge is the lack of information. People assume sometimes that buying a gift voucher is like having cash, rather than, as the hon. Lady highlighted, making them a creditor to a business. Making it clearer to consumers up front that there is a risk, although generally that risk will be small, might mean that consumers would think twice about buying a gift card from a certain company, or set of companies, and might not leave it sitting in a drawer, gathering dust for months, instead deciding to spend their gift because there is no guarantee—it is not like having cash sitting in their purse—and there is a level of risk with this product. Given that there is currently a level of risk with this product, it is appropriate that consumers should be aware of that. Informed, empowered consumers are an important part of having a stronger economy, because we need them to have confidence to go out there and buy products and gifts. Any measures that can enhance that would help.
We hope that the consumer bill of rights will be introduced later this year. Hon. Members will be aware that the draft was published a few weeks ago. It is, rightly, going through pre-legislative scrutiny in this House. A range of protections is built into the Consumer Rights Bill and the associated consumer rights directive, which has come from Europe and will be introduced in the UK through secondary legislation. Those protections relate to how prominent, transparent and up-front the information that consumers need before making decisions needs to be. Hon. Members have mentioned warning labels, or similar information—a key point—which should perhaps be included for consumers.
I hope that legislation is not the answer and that the industry is able to get its act together and recognise the concerns expressed by hon. Members from all parties about this issue. I am sure that, if the industry does not act, hon. Members will wish to mention that during the progress of the Consumer Rights Bill. I hope that, by the time we get to debates on that Bill we will have some positive news to report on what industry has been able to do.
I thank my hon. Friend sincerely for raising these issues and for her campaigning and tireless work. I hope that our pursuit of a range of options, which we hope that industry will also take up, shows that there can be a positive way forward. I also hope that my hon. Friend and other hon. Members interested in this issue will continue to work with me and the Government to encourage the gift card and voucher industry to move swiftly to develop practical and reliable ways to restore consumer confidence and protect consumers’ money.
Zero-hours contracts
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Nadine Dorries (in the Chair)
Gentlemen, it is very warm outside and this is a one and a half hour debate, so if anyone wishes to remove their jacket, I am happy for them to do so. Also, because this is obviously a popular debate and we are assuming 15 minutes for the opening speech and 30 minutes for the wind-ups, I ask for speeches to be kept to 15 minutes as I suspect there will be a number of interventions.
Julie Elliott (Sunderland Central) (Lab)
It is a great pleasure to serve under your chairmanship, Ms Dorries. I am grateful to have secured this debate on an issue on which I and many other hon. Members have been working for some time.
Zero-hours contracts are contracts whereby a worker is guaranteed no minimum hours and no minimum pay. In this country, we essentially have a large pool of workers, and employers have no legal obligation to pay them when they are not needed.
Zero-hours contracts have a widespread and deeply damaging effect on workers, and I call them “workers” advisedly. People employed on zero-hours contracts are treated differently to employees, and as such they are second-class staff. People employed on zero-hours contracts earn 40% less than those in fixed-hours employment. A study by the Resolution Foundation shows that, before tax, people on zero-hours contracts earn an average wage of just £9 an hour, juxtaposed with £15 an hour for people with set contract hours. Among graduates, the difference is £10 an hour versus £20 an hour. Firms that use zero-hours contracts have a higher ratio of low-paid staff than firms that do not use such contracts. Zero-hours contracts have traditionally been employed in the hospitality and leisure sectors, but they are increasingly being used in the health, social care and further education sectors.
Nia Griffith (Llanelli) (Lab)
Does my hon. Friend agree that being undervalued not only has a cost to the individual? Not having pension contributions, for example, could lead to a much higher burden on the state in the long term than if those people were properly remunerated and were joining proper pension schemes.
Julie Elliott
I totally agree with my hon. Friend. In fact, there are other areas in which having such contracts costs the state money, and I will address that later.
According to the Government’s own estimates, nearly a quarter of major British employers use zero-hours contracts. The 2011 workplace employment relations study found that the number of firms with workers on zero-hours contracts increased from 11% in 2004 to 23% in 2011. The recession and the lack of recovery are hitting Britain’s lowest paid workers hardest.
Zero-hours contracts are not new, and they were not borne out of the financial crisis or the recession. The figure of 200,000 people employed on zero-hours contracts in 2012 is almost certainly an underestimate, as many people will not realise that they are on such contracts.
Jessica Morden (Newport East) (Lab)
Although I know from my constituency work that the use of zero-hours contracts is increasing, it is difficult to assess what the exact figure is for places such as Wales—I think Wales would be particularly hard to assess. That in itself is a problem, because it is difficult to assess the impact if we do not know the scale of the issue.
Julie Elliott
That is absolutely correct. In fact, a number of Departments have responded to parliamentary questions by saying, “We don’t know.”
Many people will not realise that they are on zero-hours contracts. If, as it seems, zero-hours contracts are part of the new labour market, and not simply a reaction to the recession, we need to show our willingness to combat their worst excesses. Zero-hours contracts affect only approximately 1% of the work force, but that is 1% of a very large number and cannot be ignored.
Although they are on the increase in the public sector, zero-hours contracts are still more prevalent in the private sector, which is responsible for 85% of all such contracts in the UK. It is clear why zero-hours contracts appeal to employers, as they reduce risk by conferring greater flexibility to enable them to weather fluctuating demand. We want to do what we can to make it easier and more attractive for employers to hire new people, but all too often zero-hours contracts are the answer. Staff who have worked for their employer for less than a year make up more than a third of all zero-hours contracts. Young workers, newer workers and women are shouldering the burden while employers enjoy the benefits.
Robert Flello (Stoke-on-Trent South) (Lab)
I congratulate my hon. Friend on securing this debate. Is not one of the fundamental issues that zero-hours contracts are about transferring the burden and the difficulty of dealing with a contract from the employer to the most vulnerable and the lowest paid? How can it be in any way fair to transfer that burden from the employer to someone right at the bottom of the pile?
Julie Elliott
It simply is not fair, and it simply is not acceptable in most cases.
Having a high number of employees on zero-hours contracts is also potentially damaging to employers as it can lead to inadequate staffing levels, the loss of training and skills development and an inability to attract and hold on to the highest quality staff. Too many people are living a life on call, and I hope this debate will move the conversation forward from discussing the existence of such contracts to evaluating solutions to the problem.
Zero-hours contracts can have a devastating impact on people’s lives. Workers employed on such contracts have little certainty of their expected weekly earnings and therefore cannot plan their family finances. People with employee status have several legal rights that workers do not, such as the right not to be unfairly dismissed, maternity rights and redundancy rights. The inherent variability of earnings throws into doubt an individual’s eligibility to claim various forms of benefits. The disruption to family life that results from frequent short-notice requirements to work makes so many things, from child care to the weekly shop, nearly impossible to plan.
Mrs Mary Glindon (North Tyneside) (Lab)
I also congratulate my hon. Friend on securing this debate. I worked for nearly two years on a zero-hours contract in retail. Will she confirm that it is often women who are in this situation? To add to what she said about people not knowing what they are going to earn from week to week, does she agree that it is also about their well-being and their sense of value in the workplace? People on such contracts do not necessarily feel that they belong to a company.
Julie Elliott
I totally agree. As I said earlier, people on zero-hours contracts are second-class employees—they are not employees but workers, which is a big difference.
People employed on such contracts cannot take advantage of the Government’s child care help, because they do not know when they will need child care. And they cannot take advantage of housing schemes, because without a regular income, they cannot get a mortgage. Without a guaranteed income, many cannot even enter the rental market. Some people on zero-hours contracts are having to rely on payday lenders because they have not received enough hours in a given week, which pushes them further into debt.
On average, people employed on zero-hours contracts tend to work 10 fewer hours a week than those on more conventional contracts—21 hours versus 31 hours. That is a significant factor in the level of underemployment in the UK. Some 18% of those on a zero-hours contract are seeking more hours or a different job, compared with 7% of those on a regular contract.
Mr David Anderson (Blaydon) (Lab)
I congratulate my hon. Friend on this worthy debate. What she has just said proves the fallacy of what we hear every day from the Government on the great job they are doing in increasing employment in this country. What they are really doing is taking people from secure, well-paid jobs, particularly in the public sector, and putting them into jobs where absolutely no respect is shown for their life or for anything else.
Julie Elliott
That is absolutely correct, and I will talk about it later.
The growing use of zero-hours contracts may go a long way towards explaining why such a weak economy has managed to maintain a relatively low unemployment rate. The Prime Minister often refers to the 1 million or so private sector jobs he seems to have personally created since 2010. Given the conveyor belt of awful numbers emanating from the Office for National Statistics since the election, one can hardly blame him, but it is imperative to delve deeper into that claim, because as we all know, not all jobs are created equal.
My hon. Friend the Member for Dumfries and Galloway (Mr Brown) asked some parliamentary questions on the kind of jobs that are being created, and the Government have been unable to provide clear answers.It is imperative to ascertain how many of those 1 million-plus jobs are minimum wage, how many are zero or small-hours contracts, how many are agency contracts and how many are outside London.
Katy Clark (North Ayrshire and Arran) (Lab)
Is my hon. Friend aware that as a result of the Postal Services Act 2011, it is now possible for other providers such as TNT to enter the mail delivery market? In London, TNT workers on zero-hours contracts now deliver our mail. Many are sent away every day because there is no work for them. Does she think that this is the direction that the Government have in mind for our economy?
Julie Elliott
At the moment, it seems to be where this Government are heading. Regulation is lacking where perhaps a little more regulation is needed.
Anas Sarwar (Glasgow Central) (Lab)
I congratulate my hon. Friend on securing this debate. This is a problem not just in the private but in the public sector. The Financial Times found that in the last two years, the number of zero-hours contracts increased by 24%. Does that not show that this Government have the wrong priorities?
Julie Elliott
Absolutely. I will move on to the public sector shortly, and particularly to some of the alarming figures on the health service that we have received through freedom of information requests.
After receiving an unsatisfactory answer from the Secretary of State for Health to my written question asking how many people in the national health service were employed on zero-hours contracts, I submitted a freedom of information request to each NHS trust in the country asking how many people had been employed by the trust on zero-hours contracts only over the past five years: that is, those without a substantive contract in addition to the zero-hours contract. I also asked for a breakdown of what positions those people held, including any bank staff. Of the 88 trusts for which I have data, 77 employed at least one person on a zero-hours contract and one third employed at least 500. Together, the top 10 trusts employed a staggering 10,800 people on zero-hours contracts. Perhaps more remarkably, thousands of NHS nurses and midwives were on zero-hours contracts.
It is imperative to point out that those figures are for workers on zero-hours contracts only. They do not include employees who hold a substantive post with their trust and choose to have a zero-hours contract in addition to their primary employment, which allows them to take advantage of extra shifts, such as nurses who work on the bank as well as doing their normal shifts. The figures reflect the number of people who hold only a zero-hours contract.
As I said, there are clearly some people for whom a zero-hours contract is an added bonus, but the majority are not in that position. For some people in some circumstances, zero-hours contracts provide the flexibility and extra work that they want, but they leave far too many people without financial security.
Zero-hours contracts in health care are by no means restricted to trusts and hospitals. The Centre for Employment Studies Research has produced a study touching on the use of zero-hours contracts in social care in five councils in south-west England. In 2011-12, more than half of all domiciliary care workers were employed on zero-hours contracts. Figures uncovered by the shadow health team have found that nationally, more than 300,000 social care workers are employed on such contracts.
Derek Twigg (Halton) (Lab)
I thank my hon. Friend and congratulate her on an excellent speech. The Department of Health wrote to me in an answer today that there were 4,200 adult social care workers on zero-hours contracts. Is she concerned about the impact on social care and the security of the people who work in that field?
Julie Elliott
Absolutely. People who work in social care work with vulnerable people, often on their own, and turnover and movement of staff in that field are not good. Stability and continuity are needed to give people the best possible care. I fail to see how calling people in—often with very little notice, so that different people attend the same person—is the best way to provide social care in this country. According to the figures that I have, 20% of all people working in social care are on zero-hours contracts, rising to 60% for domiciliary care.
Mr Anderson
This morning we met a Unison group and had discussions with home care workers who work in this city. Not only are they on zero-hours contracts, they do not get paid for time spent travelling between houses, they have no pension rights, their travel costs are not paid, they must pay for the phone calls when they ring in to say each client is okay and they must do training in their own time. Does that not show a huge lack of respect for some of the most valuable people in this country, who do tremendous work? Does it not show how the Government’s deregulation mania is driving such people into a serious position?
Julie Elliott
I could not agree more with my hon. Friend. I will come to this later, but I question whether the people working in that field on zero-hours contracts are actually being paid the minimum wage, after all the costs that they must pay themselves are deducted. If they were employed, they would not have to do so.
The numbers simply are not conducive to the world-class care that patients deserve. Reflecting on the corrosive nature of zero-hours contracts, one care worker interviewed for the CESR’s study said:
“I can’t plan my life, not knowing when exactly I am going to be working, I can’t plan things…I have gappy rotas, periods when I am not working, odd half-hours. I take a book with me. I know that I am not getting paid, sometimes it’s really depressing. One of my colleagues said she was going out from 3 pm to about 7 pm, and actually there was only two payable hours in that whole period”.
That confirms what my hon. Friend just said.
How can we expect care workers or NHS nurses to have total commitment to an organisation or company that has none toward them and puts them on zero-hours contracts? They leave nurses and carers worried and looking for other jobs instead of focusing on patient care, leading to worse care for patients.
Not incidentally, we must also look at ourselves—at the House of Commons. We should be setting an example of good employer practice. According to the House of Commons Commission, as of 31 January 2013, nearly 9% of House of Commons staff are employed on a zero-hours contract.
In their responses to my FOI request, many trusts were at pains to explain that workers on zero-hours contracts were not obliged to accept any work offered. That is absolutely right; such an obligation would be illegal. It would be servitude. That is not much of a defence. There is also growing evidence to suggest that the choice to turn down work is illusory. Often, employers will cut the hours of any worker who turns down work, a practice known as zeroing down. The Resolution Foundation interviewed a domiciliary care worker in Newcastle who said:
“When I started out at my current job, I did nine weeks without a single day off and I was regularly working anything up to 55-60 hours a week. Since putting my foot down and refusing to work every other weekend…my hours have dried up.”
For many workers, the flexibility of zero-hours contracts is a one-way street that benefits only the employer. There is even evidence that some employers zero down workers’ hours simply to avoid the costs of redundancy or as punishment for reporting unfair treatment.
What needs to be done? We need to discuss concrete solutions to the zero-hours contracts crisis. Suggestions include regulations that state that if a worker’s average normal working hours are in excess of their contracted hours, they have the right to have their real-world hours written into their contract. We also need to raise awareness of zero-hours contracts first and foremost among people employed on them. Job adverts offering positions on zero-hours contracts should say so explicitly.
My right hon. Friend the Leader of the Opposition has proposed living wage zones and tax breaks to persuade companies to pay their employees a living wage, in order to boost productivity and cut the welfare bill.
Fiona O'Donnell (East Lothian) (Lab)
I am grateful to my hon. Friend for securing this debate and giving me the opportunity to contribute. Does she agree that it is essential that any training that staff require should be paid by the employer?
Julie Elliott
Of course it should. Not paying is a complete lack of obligation by employers to the people who work for them, whether they are workers or employees. Their businesses prosper because those people work for them, and people should be looked after properly.
Paying employees a living wage would boost productivity and the welfare bill. The Institute for Fiscal Studies has calculated that for every £1 spent paying a living wage, the Treasury saves 50p on tax credits and benefits. The Resolution Foundation has calculated that if everyone now receiving the minimum wage received the living wage, there would be a £2.2 billion net saving, comprised of higher income tax and national insurance receipts. There is growing evidence that living wages boost productivity, motivation and performance, and reduce leaver and absentee rates, thereby offsetting the cost of the higher wage. The people who reject that analysis are the same people who said that the national minimum wage would lead to vastly higher levels of unemployment. They were wrong; it simply led to higher wages.
Progress has been made in the past two decades to protect those on zero-hours contracts and agency workers, who are often the same people. The working time regulations, the national minimum wage and the agency workers regulations have done much to improve the rights of such workers, but zero-hours contracts have reached a tipping point where further regulation is now required, because more needs to be done to tackle the inequalities and unfair treatment inherent in such contracts of employment. We must strengthen efforts to ensure that employers who abuse zero-hours contracts are brought to order. The tax and benefits system should be updated to reflect the changes in the labour market and to support people on zero or small-hours contracts. The contracts are merely the latest in a long line of ingenious tactics by the less scrupulous employers to keep costs down at all costs, all to the cost of their employees. Once we have addressed some of the worst excesses of zero-hours contracts, I do not want to see equivalents pop up and for us to take years to respond to those as well, with the lowest paid suffering all the while at the sharp end of the employment market.
When I asked the Minister present what the Government were going to do about zero-hours contracts, she stated that they would crack down on any abuse of such contracts. I am pleased that the Secretary of State for Business, Innovation and Skills announced last month that he was undertaking a fact-finding review of zero-hours contracts. He says that only anecdotal evidence of abuse is available, but I think that we are well past the stage of anecdotal evidence.
Many people on zero-hours contracts work fairly regular and often long hours. In such cases, zero-hours contracts are not about flexibility for the employer but about control over the employee. We could call it exploitation. Many workers start early in the morning and are expected to stay at work until late in the evening, with multiple unpaid breaks in between. That is a life lived on call. I welcome contributions from colleagues and the response from the Minister. People on zero-hours contracts, whether they treat our sick, look after our elderly or serve our food, need a commitment from the Government. I look forward to hearing it.
Lisa Nandy (Wigan) (Lab)
I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on securing this important debate. We can see how important it is, because there are literally no seats left on the Opposition Back Benches, although I am sorry to see that concern does not seem to be the same among Government Members.
I am grateful, nevertheless, to the Minister for taking the time to be in the Chamber, because I want to talk a little about the astonishing rise of zero-hours contracts in my constituency, reflecting the national picture mentioned by my hon. Friend the Member for Sunderland Central. The number of such contracts has more than doubled since 2005, and the level of human misery that they are causing has become more and more apparent to me over the past three years. I want to give the Minister the human flavour of what that means. I have real concern about what zero-hours contracts are doing to young people, who are desperate to get into the labour market at the moment, but are seeing their opportunities closed off at every turn.
A young man in my constituency works on a zero-hours contract as a security officer. This young man, as well as being incredibly ambitious for himself and his life, has a difficult background; he came out of the care system, and he needs a level of stability that his job and his employer simply do not provide, which is a concern. Zero-hours contracts are a problem for many of the people on them, but for this young man, working in a difficult job and not knowing when or how he will be called or what his income will be from one week to the next, the contract is a particular problem.
When I was preparing for the debate, I looked quickly on the internet at a few of the jobs advertised in Wigan. Similar jobs were advertised: a security officer at Robin retail park, at £6.50 per hour. The advert stated that the job was on a zero-hours contract and that the employee must work as and when required. At least the advert specified that the job was on a zero-hours contract. Many people in my constituency over the past few years simply did not know that they were signing up to a zero-hours or small-hours contract; they were astonished to learn that not only had they got themselves into such a situation, but they could not get out. As my hon. Friend the Member for Sunderland Central said, they were suddenly not eligible for any of the other forms of support available. People feel trapped, and they are desperately in need of a Government who will do something to help them.
Nia Griffith
Has my hon. Friend been approached by constituents who have been forcibly moved from one type of contract to another type? They find that, on the new contracts, all their rights seem to have evaporated. Basically, they have been forced to sign up, perhaps because of some small issue such as wanting flexible hours or some slight change, or because the whole work force is being shifted, and that move is really damaging.
Lisa Nandy
My hon. Friend is absolutely right. I was about to talk about the situation of some care home workers in my constituency, and that is certainly one of the things that happened to them. Furthermore—the point that I want to impress on the Minister—employers who abuse zero-hours contracts are likely to be poor employers; their employment practices on a whole host of issues affect the entire work force. I welcome my hon. Friend’s intervention.
Unison recently produced research which showed that around 40% of people working in care homes or providing social care are on zero-hours contracts. We should all be deeply concerned about the rise of the practice, even if uninterested in the employment rights of the people affected or their families, because the truth is that it must be having an impact on the level of care that we afford to the old, the sick and the vulnerable in our society.
A group of care home workers, all women, recently came to see me. They had been under contract with the council, and they moved from one firm to another as the council changed the contract. They came to see me about a whole range of problems, including zero-hours contracts for some and small-hours contracts for others. They were given extremely short notice of the hours that they were supposed to work, so—as my hon. Friend the Member for Sunderland Central said—they had no opportunity to plan, which was a real problem for those with child care responsibilities, or with other caring responsibilities for elderly relatives or friends.
One woman told me an absolutely astonishing story about a co-worker, who had been told that if she did not take a series of jobs put on to the rota at short notice, she would not be offered hours next time. She had two children, so she had to take them with her on a series of shifts lasting for more than eight hours. The young children had to sit locked in the car for most of that time. The firm did not even factor in a lunch break for the worker, which apparently is standard practice. On top of that, she had the children with her, although they were unable to go outside and play; they did not eat and were locked into the car for several hours, which she was absolutely distraught about, but she was left between a rock and a hard place—she has to feed her children somehow, and that was the job she had been offered.
Robert Flello
I am enjoying my hon. Friend’s speech, because it is a good speech, but the things that she is saying are absolutely horrifying. Local authorities up and down the country are in a dire financial situation, but does she agree that they simply should not be touching such companies even with the longest of bargepoles?
Lisa Nandy
I completely agree, and I was about to say that I have been astonished by the slow response of my own local authority. I have tried and tried to get it to take the issue seriously, but the response has simply not been good enough. We should not be spending public money on enabling such employment practices to continue, whether nationally or locally. We all have a responsibility to stop them.
The women also told me about the serious problems that they are having budgeting. They work for the minimum wage, so they do not earn a lot to start with; we all know that the minimum wage is not enough to meet essential needs, so they are already earning poverty pay. On top of that, they do not know what they will be bringing in from one week to the next. As my hon. Friend the Member for Sunderland Central said, that is pushing people into the hands of legal loan sharks. Payday lenders have sprung up throughout Wigan—walking down the high street now, more payday lenders can be seen than practically any other sort of shop. We are collectively colluding in pushing people into the hands of those appalling lenders who cause such misery in people’s lives.
As well as zero-hours contracts, I have come across women with small-hours contracts. They are supposed to be guaranteed a certain amount of work but are not given that work, even though that is specified in their contracts. I have seen several examples of contracts not being upheld at all.
The point I want to impress on the Minister is that when employers treat people on zero-hours contracts in that way and where their use is widespread, it is likely that they are poor employers across the board. One firm in my constituency, Cherish, provides care to elderly people in their own homes. It breaches the minimum wage requirements because its employees are not paid for travel time, which is often hugely variable in my large constituency. Most of those women do not have transport because they cannot afford it as they are not paid enough, so they must travel long distances on several bus routes, which takes a long time, but they are not paid a penny for that. Lunch is not factored in and their payslips are confusing and incomplete. A whole host of problems have been brought to me about Cherish, and when I wrote to the firm I received what can only be described as a sarcastic letter thanking me for my interest in the company. I was astonished at the lack of response from the CQC and the local authority.
I echo what my hon. Friend the Member for Sunderland Central said. It cannot be beyond our wit to devise a statutory framework to crack down on those unscrupulous employers, but that must go with a culture of valuing our workers. I have been dismayed by the coalition Government’s attack on the trade union movement in the last few days, which can only hinder the situation of those women and not help it.
Nadine Dorries (in the Chair)
Mr Sawford, may I remind you that the time limit on speeches is six minutes?
Andy Sawford (Corby) (Lab/Co-op)
Thank you, Ms Dorries. It is a pleasure to serve under your chairmanship and to follow my hon. Friends. I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on securing this debate. She feels strongly about these issues and is a real champion for people in her constituency and throughout the country who are being exploited by zero-hours contracts. I will echo some of the points that my hon. Friend the Member for Wigan (Lisa Nandy) made and relate them to the experience of my constituents in Corby and east Northamptonshire.
In this Session, I have presented two private Members’ Bills to offer greater protection to the lowest paid and most vulnerable workers in Britain. The Gangmasters Licensing Authority (Extension of Powers) Bill will extend the powers of the Gangmasters Licensing Authority to enable it to regulate employment agencies in all sectors of the economy. That is combined with my Zero Hours Contracts Bill, which will prohibit the use of zero-hours employment contracts and end the scandal of employers requiring workers to be available for work when there is no guarantee of available work. I will go further than other contributors to this debate and say that zero-hours contracts should be banned. A contract of employment clearly implies that there is some employment. All too often the problem with zero-hours contracts is that people are not given any employment, yet they are required to attend for work.
I hope the Bill will become law, but whether that is now or later depends on Parliament. I want to generate a debate about how we can better protect the lowest paid and most vulnerable workers from being kept in a permanently fragile and uncertain state of zero-hours employment. That is why I am pleased to contribute to the debate today.
The Office for National Statistics estimates that at least 200,000 people are employed on zero-hours contracts in the UK, of which 75,000 are aged 16 to 24. We know that that figure is a huge underestimate, and I have begun to challenge it to reveal the true situation. Just last week, a written answer from the Minister of State, Department of Health, who is responsible for care and support, revealed that 307,000 people work in social care alone on zero-hours contracts. If the labour force survey claims that 20% of people on zero-hours contracts are working in the care sector, I am confident in saying that the true number of people in this country on zero-hours contracts could be approaching 1 million.
Mr Gregory Campbell (East Londonderry) (DUP)
Does the hon. Gentleman agree that what should flow from the review by the Secretary of State for Business, Innovation and Skills is exactly what he is homing in on: a much more accurate estimate of how many people are affected? When we try to determine what needs to be done to help those people, we need to know how many are affected.
Andy Sawford
The hon. Gentleman is absolutely right and, if he will forgive me, I will come to that shortly.
It is well known that zero-hours contracts started in specific sectors of the economy, but are now widespread in all sectors, including in my constituency. Hundreds of constituents have contacted me about them. People tell me about waiting for a call or turning up at the workplace day after day, only to find that there is no work, yet their contracts make it difficult to find alternative employment or to claim jobseeker’s allowance. Like my hon. Friend the Member for Wigan, I have heard examples of people making child care arrangements or paying for transport to work and then waiting hours before being told they are not needed. Others have told me that because of zero-hours contracts they are unable to get a bank overdraft, a mortgage or car finance.
Of those on zero-hours contracts, 70% are for permanent jobs. How can it be right that someone in a permanent job is not given a permanent and proper contract of employment? More than 80% of people on zero-hours contracts are not looking for another job. They want to remain in employment, but they want that employment to be fair and secure.
A few weeks ago, the Resolution Foundation published an excellent report stating that those employed on zero-hours contracts receive lower gross weekly pay, and that workplaces utilising zero-hours contracts have a higher proportion of staff on low pay. In my constituency, zero-hours contracts and agency workers create a two-tier work force with permanent employees being paid better and having security of employment, but many others are paid incredibly low wages and are exploited from week to week.
The argument is that zero-hours contracts offer flexibility, but I would argue that if those contracts are justifiable, that flexibility should be beneficial to both employers and employees. In most cases, that is simply not so, particularly in low-wage sectors. Workers on those contracts have no control over the hours they work, the amount of money they earn each week or even the breaks they take. Reports show that care workers on zero-hours contracts are not paid for travel time or gaps between appointments. Unison published some excellent research on the impact on social care. I have a personal concern about that and I urge the Minister to look at it in detail. I would have said more about it if I had had more time.
Zero-hours contracts are just the tip of the iceberg. My hon. Friends have called for a review of the whole culture of work in this country, particularly as it has developed during the recession and in recent years as our economy has flatlined. Under-employment is generally too high in all its forms. Self-employment has been rising and bogus self-employment is a big issue. We have particular issues with Swedish derogation contracts that guarantee minimum hours of pay between agency assignments to exempt people from minimum pay.
I am pleased that the Minister met me and a delegation from Corby earlier this year to look at these issues. I am also pleased—I thank her for this—that she supported an initiative by the Employment Agency Standards inspectorate and Her Majesty’s Revenue and Customs to look at the issues in detail in Corby. The initiative was taken in my area, and I was not surprised to see the level of exploitation. When visiting agencies, they found more than 70 breaches of employment law, and HMRC put a figure of £100,000 on the money owed to local workers in my constituency. I urge the Minister to provide proper resources to HMRC’s minimum wage department and to support the vital role of the Employment Agency Standards inspectorate. It protects the most vulnerable people in my constituency and around the country. It should be better resourced, it should do more, and we should support it.
What do I want? I want more than an informal review. I want a proper formal review by the Government to look at the scale of zero-hours contracts, and a jobs market that identifies good practice. I want to explore the possibility of a ban. Zero-hours contracts have been banned in Luxembourg, Belgium and Lithuania. There are opportunities to develop new forms of flexible employment contracts and I urge the Minister to look at the work of the Union of Shop, Distributive and Allied Workers in this area.
Mr Iain McKenzie (Inverclyde) (Lab)
It is a pleasure, Ms Dorries, to serve under your chairmanship this afternoon. I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on securing this important debate. It seems that austerity has sparked some employers to introduce zero-hours contracts, which they see as the ultimate flexible employment option.
Zero-hours contracts offer no guaranteed work. They form part of the general disregard for decent terms and conditions. Unfortunately, employers have increasingly turned to such contracts. Typically, as we have heard, an individual undertakes to be available for work, but the employer does not undertake to provide any guaranteed hours and pays only for the hours worked.
Zero-hours contracts have been widely used in various employment sectors, and a survey by the Industrial Relations Service suggests that 23% of employers now include zero-hours contracts as one of their employment options. The Office for National Statistics found a major surge in zero-hours contracts in 2012, with the number of people on such contracts peaking at 200,000. As we have heard, the private care sector has been particularly vulnerable to this practice, and a recent survey of home care workers found that more than 40% were on zero-hours contracts.
Zero-hours contracts undermine employment rights and hit young workers and women hardest. For staff, they entail huge drawbacks by comparison with permanent, regular work. There are no guaranteed, regular earnings to provide certainty over meeting bills or planning for the future. The variability of earnings also throws into doubt individuals’ eligibility for various benefits, creating even greater uncertainty over income.
Zero-hours contracts have shown themselves to be more open to abuse than regular permanent contracts. For example, some scheduling of work hours in the home care sector allowed no time for travel between home visits, leading to staff working considerably beyond their paid hours in some cases.
What will be crucial for workers is whether zero-hours contracts constitute an employment relationship. If there is an employment relationship, an employee on a zero-hours contract will acquire the same comparative rights as other employees. If there is a pattern of regular work that is regularly accepted, it should be deemed that the contract is one of employment.
Employers should take heed because zero-hours contracts can work against them. They damage the employer’s ability to attract and hold on to high-quality staff. They also damage their ability to provide continuity and quality of services. Zero-hours contracts are simply not compatible with developing a professional work force and delivering quality services.
Let me give a few examples. The G4S security fiasco just before the start of the London 2012 Olympics, when the firm was unable to meet its contracted staffing requirements, is an example of how zero-hours contracts can be a disaster. In my constituency, Amazon outsources hiring at peak times of the business year to private employment agencies that offer zero-hours contracts. The result is that many subcontracted employers end up in employment disputes that hit the headlines and ultimately reflect on Amazon and its business. I call on Amazon to distance itself from such contracts, even if it is associated with them only at arm’s length, and to give clear direction to its subcontractors. Amazon does not want zero-hours contracts offered to its temporary staff.
It would be far less damaging for employees and employers if permanent contracts were offered specifying a minimum number of hours per week. For thousands of workers across Scotland and the rest of the UK, life on a zero-hours contract means they are living their life permanently on call, uncertain whether they can secure enough working hours each week to pay the bills.
The forward march of zero-hours contracts is likely to have profound implications for the UK economy, as well as for the individuals on those contracts and for the services that those people provide.
Nia Griffith
Does my hon. Friend think there is scope for using procurement to force those who supply public sector—Government and local authority—projects to ensure that the workers they employ are not on zero-hours contracts?
Mr McKenzie
Absolutely. My hon. Friend makes an important point: procurement can be used to stipulate terms and conditions. We should stipulate that zero-hours contracts are not welcome in any procurement contract.
As I said, the erratic income stream that often comes with zero-hours contracts can make it difficult to manage household budgets, to juggle family and caring commitments and to access tax credits and other benefits. It is clear that the supposed flexibility that these contracts provide comes at far too high a price for the overwhelming majority of those who are employed on them.
Robert Flello
As well as the damage and exploitation experienced by the individuals concerned, is not the taxpayer, through working tax credit and the like, effectively subsidising the profits of these private companies?
Mr McKenzie
Absolutely. My hon. Friend makes a good point: the taxpayer is subsidising these companies. Increasingly, there is a race to the bottom in terms and conditions in services.
I am led to believe that the Government have acknowledged the need for reform, and a review will report in the autumn. However, I fear that it is unlikely to lead to an outright ban on zero-hours contracts and that it will not be the precursor of a much-needed agenda for promoting fair and full employment. None the less, thousands of people across the UK hope that the Government will, at a minimum, recognise the indisputable case for introducing more stringent safeguards to provide greater certainty and security for the growing numbers who work on these contracts. It is almost as though we have gone back in time to a scene from “On the Waterfront”. I have witnessed people turning up at factory gates and being chosen for a shift, while others are turned away and told to come back the next day. Those are simply not the employment contracts or practices that we need for the 21st century.
Ian Lavery (Wansbeck) (Lab)
It is a pleasure, as always, to serve under your chairmanship, Ms Dorries. I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on bringing this subject to the Chamber. It is essential that such debates take place, because many of the people we are discussing do not have a voice in society.
I am overwhelmed by the absence of Government Members. I am really disappointed, to say the least, that not even one Conservative MP is in the Chamber to listen to some of biggest concerns that affect some of the least well-off people in society. The zero-hours contract is the scourge of the working poor. It has trapped many people in an employers’ paradise; it is a charter for legal abuse, as we have heard in many fine contributions today; and it needs to be stamped out.
Some 8% of workplaces now use zero-hours contracts. Interestingly, 85% of the people employed on those contracts work in the private sector. The Government tell us almost hourly, “We’ve disposed of many jobs in the public sector, but look how many we’ve created in the private sector.” Well, if this is the type of job they are proud of, they really need to look at this, because these are not jobs in reality. What is happening to many people on zero-hours contracts is an absolute scandal.
People on zero-hours contracts receive lower gross weekly wages—an average of £236 a week, compared with £482 for those who are not on zero-hours contracts. On average, therefore, those who are on zero-hours contracts receive less than half the pay of those who are not. Workplaces that utilise zero-hours contracts have a higher proportion of staff on low pay—between the national minimum wage and £7.50 an hour—than those that do not. Those employed on zero-hours contracts also work fewer hours—an average of 21 hours per week—than those who are not, who work an average of 31 hours per week.
Frances O’Grady, the general secretary of the TUC has said:
“Employers know they can get away with advertising zero hours jobs because there are so many jobseekers hunting too few vacancies.
With the tough times set to continue, now is the perfect time for the government to be reviewing— and hopefully regulating—the increasing use of these exploitative contracts.”
In my constituency, 26 people are applying for every job at the jobcentre. That is an absolute outrage. A lot of those jobs involve zero-hours contracts. People are really excited if they get the opportunity to work one or two hours a week, yet in the statistics that is counted as employment. That is outrageous.
Lord Oakeshott, the Liberal Democrat peer, said:
“A zero hours Britain is a zero-rights Britain in the workplace—Beecroft by the back door. Being at the boss’s beck and call is no way to build a skilled, committed, loyal labour force.”
I do not agree with the Liberal Democrats that much—hardly ever—but I agree with that comment. It spells out neatly and concisely exactly what zero-hours contracts are all about. As my hon. Friends have said, they give no guarantee of regular earnings, which leads to huge problems in meeting energy, food and clothing bills, and people have no way to plan their future. The need to respond to calls, frequently at short notice, to obtain work absolutely disrupts any type of social or family life. It causes problems with the kids and with everyone involved, because people on those contracts cannot plan anything at any time, yet they are paid nothing for the privilege. We need to look at that situation.
There is much more that I would like to say. Just before I came in I met someone from Nacro, who explained that there are probation officers who work on a proper, 37-hour contract, and who at night time are given zero-hours contracts. They work two separate contracts, which is causing chaos, but the probation service does not need to pay overtime and extra payments. That practice will spread through society, and it is unacceptable.
I agree with my hon. Friends who have said that the practice of giving zero-hours contracts should be outlawed. Okay, there is a review, but it must outlaw them. Let us be fair to people, respect people, look at how they want to work and give them working opportunities that they can be proud of and plan their lives around, so that they can secure their future. Zero-hours contracts are the sort of thing that should not be allowed in civil society; but perhaps we do not live in a civil society.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate my fellow north-east England MP, my hon. Friend the Member for Sunderland Central (Julie Elliott), on securing this long overdue debate.
At a time when unemployment is persistently high—and nowhere more so than in north-east England—the Government still refuse to listen to Opposition calls for a compulsory jobs guarantee. The same Government are content to massage the unemployment and employment figures in whatever way possible, to give a very different impression of the challenges facing countless people. It is therefore all the more fitting that we are here today to discuss contracts that must be contributing in a substantial way to in-work poverty.
We all know that the bulk of jobs created under the Tory-Lib Dem Government are part-time and low paid, leaving families and individuals struggling to cope, while the Prime Minister boasts of the opportunities he has created for them. I am not too surprised that there is not a Conservative in the Chamber, and that the Conservatives have left a Liberal Democrat Minister and Parliamentary Private Secretary to answer today. However, the Prime Minister cannot throw a veil over the reality of worklessness and minimal or zero-hours contracts, whose numbers are growing daily, and which are often used as a mechanism to screw down wages, screw down people and screw down our country.
We need to take action to make sure that unscrupulous employers cannot take advantage of workers in what is already a tough jobs market, and to ensure fairness in the workplace and promote real job creation—of jobs that pay well while assuring security in the workplace and shared prosperity. There is no doubt that employers seek increasingly flexible staffing structures and many are adopting zero-hours contract arrangements to avoid agency fees and to sidestep the Agency Workers Regulations 2010.
The use of zero-hours contracts is, as many hon. Members have said, widespread across both public and private sectors. A survey by the Industrial Relations Service suggests that 23% of employers now include zero hours as an employment option. In public services, the care sector has been particularly vulnerable, with more and more such contracts. The situation is likely to worsen further under the NHS’s new commissioning arrangements, which do not guarantee providers with work, so that they in turn do not guarantee work to staff. That alarming trend has even spread into areas such as cardiac services and psychiatric therapy.
Some may say the employers cannot be blamed, but I do not care who is blamed: no one should have to suffer the indignity of a contract under which it is possible for no work at all to be provided. In figures from the national minimum dataset for social care, it is estimated that 150,000 domiciliary care workers alone are employed on zero-hours contracts. Statistics released last week by the Minister of State, Department of Health, the hon. Member for North Norfolk (Norman Lamb) suggest that 307,000 people in the social care sector, or 20% of the work force, are employed in that way. Within the North Tees and Hartlepool NHS foundation trust alone—that is the one that serves my area—there were 786 zero- hours or casual contracts in operation in April 2013, 682 of which were for clinical positions. I acknowledge that some of those may cover people with other roles, elsewhere and within the trust, but I still think it is a scandal that we are trying to provide care on that basis—even if it does afford the employer flexibility to fill gaps.
Elsewhere, in the worst scenarios, zero-hours contracts can result in some of the most vulnerable people—who care for other vulnerable people—being unfairly treated owing to a lack of proper protections. Recent work by the Resolution Foundation indicates that those who are employed on zero-hours contracts work fewer hours than those who are not, averaging 21 hours per week compared to 32 hours per week; and there is a gap of about £6 an hour, on average, between those who are on zero-hours contracts and those who are not. Not only does that put employees completely at the mercy of employers, presenting the opportunity for rogue employers to exploit workers; it also removes any semblance of the stability and certainty that must be central to rebuilding our economy and people’s lives.
Robert Flello
I want to pick my hon. Friend up on a fact. He mentioned the difference in the number of hours, but I suggest there is not a difference. It is just that the people who are not on zero hours are getting those hours paid.
Alex Cunningham
Indeed. That is very much the case. It just worries me that although the average working week for people on those contracts may be 21 hours, for many people they mean zero.
Power imbalances operate in many workplaces, and workers who need a minimum number of hours a week to remain financially secure often find the uncertainty of working fluctuating numbers of hours tremendously tough. Similarly, some find their contractual situation becomes a device through which loyalty is used to determine future work load. In essence, the allocation of a favourable number of hours becomes reliant on such factors as previous flexibility and a willingness to accept all hours offered, as well as fickle aspects such as cordial relationships with line managers. Regardless of how good a worker someone is, if their face does not fit, their zero-based contract may mean just that—zero. The repercussions that are used to sanction employees who are deemed to have stepped out of line should be better regulated to ensure fairness in the workplace. It is time that safeguards against exploitation were re-examined and bolstered to achieve a balance of power.
Before the Working Time Regulations 1998 and the National Minimum Wage Regulations 1999, zero-hours contracts were often exploited to clock off workers during quiet periods, while retaining them on site to allow for a rapid return to work. That down time was largely unpaid, and was grossly unfair to employees. Under the previous Labour Government, action was taken to protect the interests of workers and stop that abuse. We cannot and must not go backwards on these issues. We need a Government who will take more action now. If we must have such things as zero-hours contracts, we need to ensure that they are properly regulated to maintain an individual’s freedom to contract on favourable terms, with some form of guarantee that they have a job worthy of the name.
Emma Reynolds (Wolverhampton North East) (Lab)
It is a pleasure to serve under your chairmanship, Ms Dorries, for the first time but not, I am sure, the last. I congratulate my hon. Friend the Member for Sunderland Central (Julie Elliott) on securing the debate, and on her excellent opening speech. I should like to say that we are having a debate this afternoon, but it seems only the Labour party really cares about the issue. There is not a single Conservative MP in Westminster Hall this afternoon. I am glad to see the Minister, and am also happy that the Government will undertake a review of the worrying rise in zero-hours contracts.
I wish to associate myself with many points that have already been made—it is always difficult going last in such debates—but I want, in particular, to agree with the comments made by my hon. Friend the Member for Sunderland Central about the flexibility of such contracts being a one-way street. The flexibility is all to the advantage of the employer and to the detriment of the employee. The worker is left waiting for a call and is on call, not knowing from one day to the next, or from one week to the next, whether they will get any hours at all. These contracts do not even provide a guarantee of any hours, and therefore, they have been named zero-hours contracts. In many cases, workers are desperate to increase the number of hours they work, and many of them are on very low incomes. These contracts seem extremely exploitative and make the lives of some of the poorest in society even harder.
I am particularly concerned about three groups of workers who the contracts seem increasingly to affect: the first is young people; the second is care workers, as some of my colleagues have discussed; and the third is public sector workers, which is worrying, because even though the majority of such workers are in the private sector, the use in the public sector seems to be increasing. It must be in the Government’s power to do something about that.
Research suggests that one in three people employed on zero-hours contracts is aged between 16 and 24. It is absolutely devastating to be unemployed at such a young age and to be only able to get a contract of work that does not guarantee any hours at all. The fact that this exploitative arrangement is the first experience that a young person could have of work seems totally unacceptable and unfair.
Andy Sawford
My hon. Friend makes a really important point about the particular impact on young people. I hear from young people who feel that they have had no training and no investment from their employer, because there is no incentive to do so when they are in such fragile, short-term employment.
Emma Reynolds
The Government need to look at the issue even more closely and consider whether the practice should be banned, for young people, in particular, but for all workers.
I turn to the issue of care workers. As has been mentioned, a report by Unison found that 40% of home care workers are employed on zero-hours contracts, and that number is thought to be on the rise. Home care workers play an incredibly important role in our society, especially given that we have an ever-increasing ageing population. They are saving the state money by ensuring that elderly people can stay in their homes and live there, rather than in a care home, and they are ensuring that elderly people are not in hospital. I am particularly concerned about reports suggesting that those workers are not being paid for travel time between visits. It seems that that must be, in some way, illegal—how can it be legal? In winding up, if the Minister has time, I would like her to comment on that point. If they have not been guaranteed a minimum wage for the real hours that they are working, have their minimum wage rights been breached? Is the employer, in such cases, in breach of the European working time directive?
Finally, let me say something about the public sector, because the contract is not unique to carers. We are seeing the increasing use of such contracts in all parts of the public sector, whether in the health service or elsewhere. In the health service alone, workplaces using zero-hours contracts rose from 7% in 2004 to 13% in 2011. Central Government have also been found to be using zero-hours contracts. As has been suggested, local government contracts seem to be driving the rise of these exploitative contracts. My hon. Friend the Member for Sunderland Central suggested that it is going on here in the House of Commons, too, and I would like the Minister to address that issue specifically.
Will the Minister reassure Labour Members, who are concerned about this injustice, that the review that the Government are conducting will look at exploitative practices by employers? Will the review consider how many of the workers who have had those contracts are low paid, and will it consider banning the contracts? Will she say whether central Government will take a leading role in getting rid of the contracts from their own payroll and do something to discourage, dissuade or even sanction local government if, when contracts are issued, conditions are not in place in the contracts to stop this kind of exploitative practice?
Our debate is timely, because the use of zero-hours contracts can be seen in a wider context of rising inequalities. Regrettably, inequalities in income are increasing, and the gap between rich and poor is widening. The Government are only exacerbating that. Living standards have been frozen, or in some cases, have declined for many lower and middle-income workers. The mean family income in 2015 will have the same worth as in 2002. For the first time in generations, parents are concerned and expect that their children will be worse off than them. The increasing use of zero-hours contracts in the private and public sectors is only exacerbating those inequalities, and I would like the Government to do something about it.
Ian Murray (Edinburgh South) (Lab)
It is a great pleasure to serve under your chairmanship for the first time, Ms Dorries—no doubt there will be many more times to come. I pass on my congratulations to my hon. Friend the Member for Sunderland Central (Julie Elliott), whose speech was fantastic. Not only today, but every day that she has been in Parliament she has been championing the rights of people on zero-hours contracts, and it is important for her to have led today’s debate.
Although a small number of people use and like the contracts, we have heard, from all Opposition Members, about people who have gone to their constituency surgeries with examples of where the contracts are not appropriate. It is a shame that we cannot take a vote today, because we might win it, given who is here this afternoon. Of course, the aim of a zero-hours contract is to deflect from giving anyone pay; it is not just about hours. When an employer is looking at putting together a zero-hours contract, it cannot only be about the work available. It must be about reducing the wage bill and ensuring that there is no pay.
Nia Griffith
Does my hon. Friend agree that there is sometimes an irony in the use of agency workers, whereby the workers get paid very little and are second-class citizens, compared with the permanent employees, but, in fact, the firm gets ripped off because of the agency fees?
Ian Murray
That is a good point. We should have another Westminster Hall debate on the agency issue, in terms of how that all fits together. It is not only about zero-hours contracts, as there is a tapestry of problems in the employment industry that are worth looking at.
Many hon. Members—including my hon. Friend the Member for Wansbeck (Ian Lavery), who always speaks very passionately about such issues—have said that people get no pay and no hours. People sometimes go to great expense to turn up at work. They arrange child care and sometimes they do not even get a call to say they have got hours—actually, sometimes they do not even get a call. I have a screen grab here from someone’s iPhone, where a message says, “You’re not needed today.” That is all it says. It was sent at 12.40 in the afternoon, so they sometimes do not even get a call from their employer to say they are not required.
Many Members have spoken about the increasing numbers of contracts, so I will not run over that again. However, I would like to concentrate on the law behind the issue. A body of law sets out what someone is classified as when they are at work. They are either an employee, a worker, or self-employed. We shall set aside the fourth, new category of someone who is an employee shareholder, as that is a different debate altogether. If we look at those three categories, it is clear what someone who is self-employed is. There is a whole body of case law about what the definitions of an employee and a worker are. Many would argue that someone on a zero-hours contract is, in fact, a worker, but that worker needs to have some kind of mutuality of obligation, and there cannot be a mutuality of obligation if the worker has to turn up for work at their expense, but the employer has no need to give them any hours. That does not seem to me to be any sort of mutuality.
Andy Sawford
I agree that the important point about an employment contract is that there must be a mutuality of obligation, but the contract also must impose an obligation on a person to provide work. Therefore, I cannot understand why it is not unlawful as it stands, in the current body of law.
Ian Murray
There is an argument about whether zero-hours contracts are currently unlawful, but mutuality of obligation is case-law terminology and is therefore not written in statute. That is how, over many years, the case law has built up about the definition of employment tribunals, in terms of whether someone is in work or, indeed, whether they are a worker, an employee or self-employed. So there is a definition. My hon. Friend the Member for Wansbeck has said that what we are talking about is not a job. It perhaps is not a job. It cannot be right for people to be in this situation and not end up with any hours.
Let us consider some of the damaging effects. For staff, zero-hours contracts have huge drawbacks compared with permanent regular work. There is no guaranteed level of regular earnings that provides any certainty with regard to meeting bills, meeting rent or planning for the future. The need to respond to calls to attend work, frequently at short notice, disrupts life outside work and places a particular strain on families in terms of arranging care for dependants. The Government have put a heavy emphasis on being family-friendly, but we have yet to see any evidence of that. Zero-hours contracts fly in the face of the flexible working legislation that the Minister, to be fair to her, has pushed through and championed in government. They slightly contradict that aspect of employment.
There is a detriment to business as well. That is why I cannot see why business wants to use zero-hours contracts, particularly in some of the areas that have been spoken about. There must be reputational damage to employers who use these contracts. There must be an inability to attract and to retain high-quality staff. There is undoubtedly a direct correlation between continuity and the quality of the services involved. Some hon. Members have spoken clearly about health and social care and how continuity and quality of services are significantly affected. A loss of training and skills development tends to accompany zero-hours contracts, particularly if people have to pay for their own training, which is a huge issue with these contracts.
There is an overarching ethos and ideology. The Government have a one-track mind on this issue. They look at regulation and employment law as a burden on business. We have seen that with the Beecroft report. I am delighted that my hon. Friend the Member for Wansbeck used the phrase “Beecroft by the back door”—we have copyrighted that now. This is Beecroft by the back door. There are all these ideological moves, in terms of the legislative programme that the Government are pushing through at the moment, that are simply an attack on workers’ rights and the ability of people to earn a living. Their central argument about removing workers’ rights in order to encourage businesses to grow surely cannot be right. It flies in the face of the evidence. Let us say that we accept that the Government have created 750,000 private sector jobs in the past two years as a fact, whether it is challengeable or not. Those jobs have been created under the current framework of employment rights, so that flies in the face of what they are saying.
Alison McGovern (Wirral South) (Lab)
I apologise to fellow hon. Members for not being able to be here at the start of the debate. Does my hon. Friend agree that good regulation could protect employers who do not want to see this sort of practice? It could prevent a race to the bottom, which is what I think we are seeing in the care sector.
Ian Murray
That is a valuable intervention because that is what many employers are telling us and what many business organisations are saying: when we undermine workers’ rights, we are undermining as well the businesses that are looking after their staff. I ran my own business before coming into this place. Any business person—any person running a good business—gets up every morning of every day and wants to look after their staff; they know that their staff are their greatest asset. There is a danger here for the Government, and the hon. Member for North Norfolk (Norman Lamb), the Minister’s predecessor, said this quite clearly in a newspaper. Admittedly, it was six weeks before he got the job as the Minister responsible for employee relations, but he said that there was a real danger of undermining job security, which undermines consumer confidence, which sets us up in a spiral of economic decline.
Let me pick up some of the issues that my hon. Friend the Member for Sunderland Central raised. She referred to the disproportionate effect on women. Clearly, we have to look at that. The explosion in the number of zero-hours contracts has had a disproportionate effect on women, and that is probably because of some of the sectors in which we have seen this, such as the care sector and the hospitality sector. These are industries with high percentages of female employees. It is difficult to know whether it is a response to demand for flexible hours, better enabling female professionals to return to work after maternity leave, but it cannot be viewed as a positive trend at a time when equality in the work force is becoming more vital than ever. The Government have to consider whether what is happening is consistent with some of the other policies that I have mentioned in relation to flexible working.
There is also the issue of tax credits. The Government have been very clear about resolving some of the issues in relation to welfare. Their view was that the tax credits bill was too high, but the tax credits system was put in place to ensure that work paid, so again the reality flies in the face of some of the rhetoric and ideology. How exactly does the working tax credit issue interact with some of these zero-hours contracts? How often should HMRC update its system for someone who is on a zero-hours contract? Must they be on a zero-hours contract for a certain number of months? What happens when they get an injection of hours at the last minute? How is all that put together? There are also issues in relation to Jobcentre Plus. If someone is on a zero-hours contract and by law they are neither an employee nor a worker, are they actually in employment; can they claim jobseeker’s allowance? All those issues must be dealt with.
We have heard about the number of staff in this place who are on zero-hours contracts. A press release was issued this morning by my hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan). He said that 155 staff in this place were on zero-hours contracts. There are a number of case studies. This issue does not just involve the hospitality or care sectors. Edinburgh university, in my own constituency, has recently done an analysis that shows that 47% of lecturers in the college of humanities and social science are on zero-hours contracts, so there is a real problem there. I know that the University and College Union is taking it up with the university of Edinburgh.
Many hon. Members have spoken about the NHS, so I will not cause delay by making further comments on that, but may I turn to the Government’s recently announced review of zero-hours contracts? The announcement that the Secretary of State and the Minister were to look at this issue was very much welcomed. We must congratulate the Minister on at least going that far, but we need to know whether the Government will issue a call for evidence. Many trade unions have done so much work on this issue. My hon. Friend the Member for Corby (Andy Sawford) mentioned USDAW. It has done a tremendous amount of work on pushing this issue forward. The Government really have to issue a call for evidence. I believe that their review involves only three officials in the Department for Business, Innovation and Skills, so it would be good to issue a call for evidence.
Will the review consider the issues in relation to tax credits? Will it consider specifically the interaction of zero-hours contracts with young people and women in particular? The Minister may not be aware, but there was unanimous agreement from panellists at the Work Foundation’s recent conference on this topic that the review, in its current form, was too lightweight and would not provide the Government with the hard data that they needed to reform the system. I would be interested to hear the Minister’s response.
You have heard from Labour Members, Ms Dorries, the real concerns about zero-hours contracts and the impacts that they have on family life, on income and on people’s ability to plan their daily lives. This is simply an issue of fairness. It cannot be right to demand that someone travels to their place of work and then tell them that they do not have any work. I will be very interested to see whether the Minister will put together a body of work that looks at the mutuality of obligation and whether this is a case in which someone is not an employee, a worker or self-employed and therefore is deemed to be unemployed.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
It is a pleasure to serve under your chairmanship, Ms Dorries, and to respond to what has been a lively and good debate. I congratulate the hon. Member for Sunderland Central (Julie Elliott) not only on securing it, but on putting the arguments in a straightforward but well researched way. Over a period certainly of months and quite possibly longer, she has been a real campaigner for and champion of these issues. It is a credit to her that she has persevered in raising them. I very much welcome the time and effort that she has already put into this issue and her bringing it to the House today to give us all the opportunity to discuss it and highlight some of the problems.
The turnout reflects the concern that many people feel about this issue. I will discuss later how the Government are looking at it, but such a debate can be incredibly helpful to bring forward Members’ contributions, which of course can feed into that information that the Government are collecting from other sources.
In basic terms, of course we understand that zero-hours contracts can work well for some people, giving them flexibility in the hours that they work. Equally, we are well aware that they do not provide the certainty that many people feel that they need. Those people need to know what they are going to earn, so that they can manage their finances and, indeed, their lives. Hon. Members have given many examples this afternoon, and the Department has received a number of letters that reflect some of the concerns. Hon. Members will also be aware of the media commentary and stories, some of which have been quoted today as well.
It is important to be clear: zero-hours contracts will suit some individuals, but not everyone. A range of problems has been raised today, such as people accepting a job under such a contract when it did not suit them because they felt that they did not have a choice.
Jo Swinson
I will give way, but I am keen to make progress, so that I can respond to the points raised in the debate; I hope that hon. Members will let me.
Andy Sawford
I thank the hon. Lady for being generous in giving way. Zero-hours contracts are welcomed by some only because they afford flexibility; it is the flexibility they want, not the zero-hours contract. We ought to make that distinction.
Jo Swinson
I take the hon. Gentleman’s point, but for some people that flexibility is very much tied to the zero-hours contract, because they can work a significant number of hours some weeks and perhaps not at all other weeks. I shall give examples of people who that arrangement might suit. I appreciate that there are different ways to achieve flexibility, but zero-hours contracts are one such way, and if used properly, they do not need to be a problem. The hon. Member for Sunderland Central mentioned flexibility being a one-way street, which is a good way to put it. If there is only a one-way street, that suggests that the contract is not equal on both sides. Genuine two-way flexibility can work very well for employees and employers.
I was touching on some of the problems and areas where zero-hours contracts do not work well. Perhaps an individual took on such a contract but, because they had other work commitments, such as a part-time job or other responsibilities, had to turn down work fairly regularly, which leads to them not being offered work because they were seen as inflexible. That situation is a two-way street not working as a two-way street, which is not right. The hon. Member for Wigan (Lisa Nandy) raised the case of a lady who had been told that if she did not work a particular set of hours, she would not get work in future. The hon. Lady mentioned the rather horrendous suggestion that the lady had to leave her children in a car park, and my heart goes out to someone in that situation. That scenario—an implied threat hanging over someone, if they do not take on particular work—is not right. On a zero-hours contract, the employee should be genuinely free to turn down work.
As has been mentioned, people rely on income to prove that they can take out a mortgage, for example, or to prove that they are able to make regular rental payments to rent a flat, so zero-hours contracts can be problematic, if people cannot prove that regular income. For those reasons, officials in the Department for Business, Innovation and Skills are looking into such contracts, to gather further information over the summer to better understand how they work and the issues involved. It is important that we establish what the problems are before we change policy.
Lots of figures have been mentioned today, particularly on the recent sharp increase in zero-hours contracts since 2004. Those figures are accurate, but it is important for context to point out that zero-hours contracts are not new. Hon. Members have talked about them today as if they are an evil invention of the current Government, but they have been around for many years. According to the graphs from the 2000 labour force survey, the overall number of people and the percentage of the work force using such contracts was slightly higher in 2000 than for the same quarter in 2012. I know Hansard does not allow graphs, but the graph shows that the use of zero-hours contracts was high in 2000, gradually reduced towards 2004 and has risen since then, with a couple of blips along the way where the graph is slightly spiky. That is the pattern, so, although the recent increase has brought some problems into sharp relief, these contracts are not a recent issue.
The Labour Government looked at zero-hours contracts. Their White Paper said:
“The Government wishes to retain the flexibility these contracts offer business and believes that the National Minimum Wage and Working Time Directive will provide important basic protections against some of the potential abuses.”
Some of those abuses have been outlined today, and I will shortly come to the points raised, but it is important to challenge the assumption that such contracts are always a bad thing. They can be helpful if an individual and an employer genuinely want to come to an agreement about a contract. For students, who might not be able to commit to a fixed work pattern due to their timetables, zero-hours contracts may be helpful in giving them good work experience. They can also be useful for semi-retired people who want to work occasionally, but not on a fixed weekly basis. Zero-hours contracts are useful in some situations, but it is important that they are not abused.
The Government want to ensure that people on jobseeker’s allowance are in no way forced to apply for zero-hours contracts. I want to stress that that is not happening. It is not the case. There is no sanctioning of benefit if people do not apply for such jobs, because decision officers at the Department for Work and Pensions cannot mandate claimants to apply for them. If jobseekers wish to take one, they are free to apply, but the decision-maker guidance sets out clearly that
“if a claimant refuses or fails to apply for or accept employment that is for less than 24 hours a week, the claimant will have good cause”,
if that is the reason for not applying.
I shall turn to some specific points that Members raised. We will obviously work alongside the DWP in the Government review, to address the eligibility for support issues. Universal credit should make it easier for people to get Government support based on the number of hours they work, without, for example, the cliff edge of 16 hours, but we need to work closely with other Departments on that. The hon. Members for North Tyneside (Mrs Glindon) and for Sunderland Central and for Edinburgh South (Ian Murray) raised the impact of zero-hours contracts on women. Resolution Foundation research shows that the use of such contracts is fairly evenly distributed between men and women: women have about 53% of the contracts and men have 47%, so the figures are perhaps not quite as skewed as suggested.
Jo Swinson
I am sorry, but I want to respond to the points raised.
The hon. Member for Sunderland Central mentioned living life on call. If an employee is on call at their place of work, they should be paid; the legislation is clear. Some of the cases raised today are breaches of legislation. I will come on to the pay and work rights helpline. The provisions in the working time regulations on breaks proportionate to the time spent working give some protection to workers. Although lunch breaks are not paid in zero-hours contracts, that does not mean that people should not get time to take a break at work, and the working time regulations set that out clearly.
Care workers not being paid for the time spent travelling between houses was raised. If care workers have wages deducted for that time or have to pay for photographs, uniforms and so on, they might be working for less than the minimum wage, particularly if they are not on a high wage. It obviously depends on the case. Employers of people who are very well paid may not be in breach of national minimum wage guidance and legislation, but where employers are in breach, I urge people to contact the pay and work rights helpline on 0800 917 2368 or search for “pay and work rights helpline” online. HMRC can enforce the legislation, and it takes breaches of national minimum wage guidance and legislation seriously. It is important that such cases are reported, because employers need to be taken to task if they are exploiting workers.
Four out of five people on zero-hours contracts are not looking for another job, which suggests that not everyone on such contracts is unhappy. There are clearly cases where that is the case, but the figures suggest that it is not true that people are trapped on the contracts. They can terminate the contract in the usual way. I agree with the hon. Member for Wigan that employers who abuse zero-hours contracts are likely to be poor employers, but “employers who abuse” is not the same as employers who use zero-hours contracts. There is a difference.
Various hon. Members mentioned a ban on zero-hours contracts. Although we need to look at the evidence, there are immediate challenges to that proposal. The hon. Member for Wigan mentioned small-hours contracts. If we ban zero-hours contracts, what would be the minimum—one hour, two hours, four hours, eight hours? If someone genuinely wanted to work for a small number of hours, should we stop them from being able to do so? When we look at the suggestion, it begins to unravel. It is useful to look at international examples, and the hon. Member for Corby (Andy Sawford) cited some.
Business, Innovation and Skills officials are speaking to a variety of stakeholders, including industry bodies that represent sectors where such contracts are used and trade unions, which, as was mentioned, have a lot of information, to examine the extent of the use and the abuse of zero-hours contracts. We will work with other Departments. There is no call for evidence at this stage, but we do not rule it out for the future. Research shows that doing our homework before issuing a call for evidence is useful. I welcome the interest the debate has sparked, and I am sure that we will return to the topic when we have the further information from the BIS fact-finding review.
HMS Concord (Yangtze River Incident)
(10 years, 10 months ago)
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Graeme Morrice (Livingston) (Lab)
It is a pleasure, as always, to serve under your chairmanship, Ms Dorries. I am delighted to have secured this debate on what is an important topic to many people, and I hope that during the short time available we can provide some insight into the truth that the past 64 years have failed to reveal.
I would like to take right hon. and hon. Members back in time to 1949, to the Yangtze river of China during the Chinese civil war, and an historic event that has taken on the name “the Yangtze incident.” The event happened at a time when Great Britain was at peace, but it took us to the brink of a third world war. Much has been written about the incident, including a book that was made into a film, with Richard Todd in the starring role. Neither the book nor the film, however, comes anywhere near the truth of the story that is yet to be told.
This is not a story about one ship, the Royal Navy frigate HMS Amethyst, and her daring escape after three months’ incarceration by communist forces on the Yangtze river. It is the untold story of HMS Concord, a C-class destroyer that Commander-in-Chief, Far East Station, Admiral Sir E. J. Patrick Brind deployed into China’s Yangtze river as part of his endeavour to bring about the escape of HMS Amethyst.
I will first explain the position with regard to the civil war in China. Government policy at the time was governed by the Moscow declaration of December 1945, in which the United Kingdom, the United States and the Soviet Union declared a policy of non-intervention in China’s internal affairs. The known facts are that China was split into two warring parties, the Communist People’s Liberation Army, led by Mao Tse-tung, and the nationalist army, under the Kuomintang. As the Chinese civil war raged on, the communists began to make headway on the shores of the Yangtze river near the city of Nanking, and warned that any foreign ships in the river would be attacked. Right hon. and hon. Members might wonder what the importance of that is, and the answer is simple: it endorses the fact that the Yangtze river was a known war zone.
I said at the outset that I would like to take us back in time. The date was 20 April 1949. A British warship, HMS Concord, was stationed at Nanking, to act as guard ship to the British embassy and to evacuate staff and other British nationals if necessary. She had been there for some time, and her relief was long overdue and her stores depleted. The relief ship was His Majesty’s Australian Ship, Shoalhaven, which was at Shanghai and should have relieved HMS Concord on 16 April. The relief did not take place; the Shoalhaven was stood down.
HMS Amethyst, en route to Nanking up the river Yangtze to relieve the guard ship HMS Concord, came under heavy fire from the north bank. At nearby Rose island she ran aground, was severely damaged and suffered heavy casualties, with more than 50 members of the crew killed, dying or seriously injured. The captain was mortally wounded and the first lieutenant, though wounded, took command. The communists continued to fire at Amethyst and, to save further loss of life, about 60 lightly wounded and uninjured crew members were evacuated ashore, but further evacuation stopped when those in the water came under fire. Those put ashore eventually arrived in Shanghai and were treated in hospital.
At this juncture, it should also be remembered that before all of that two other ships, the frigate HMS Black Swan and the cruiser HMS London, were involved, along with HMS Concord, in an attempt to assist Amethyst’s escape. Due to the narrowness of the Yangtze river, none of the ships was able to manoeuvre and they were, in effect, sitting ducks for the communist field guns. All three ships suffered heavy damage and casualties in the attempts, and it was decided that to proceed further would be disastrous for them and their crews. The order was given to return to Shanghai.
On 21 April, HMS Amethyst was refloated, and on 22 April Lieutenant Commander Kerans arrived on board from Nanking, where he was assistant naval attaché, and took command. Amethyst remained incarcerated for 100 days, and the fact that HMS Concord entered the Yangtze to aid Amethyst in the aftermath of her escape has been denied. The involvement of HMS Concord was hidden or deleted from any public or official record.
Caroline Dinenage (Gosport) (Con)
I thank the hon. Gentleman for securing this important debate. One of my constituents is a veteran sailor from HMS Concord, and his concern has always been that the Ministry of Defence denied that the ship was ever in the Yangtze. Does the hon. Gentleman agree that Sir John Holmes’s medal review, which acknowledges that the presence of HMS Concord is now no longer in doubt, goes some way towards proving that my constituent and other such gentlemen have, for many years, been right?
Graeme Morrice
Yes, indeed. I accept that point, and I am grateful to the hon. Lady for her intervention. I know that she has a personal interest in the matter, particularly regarding the award of medals, and I will touch later on the Sir John Holmes review.
Concord’s logbook was removed, and without evidence to the contrary nothing could be proven, until now. Despite efforts to prevent the truth from emerging, personal accounts of HMS Concord’s part in the events, given by my constituent Mr William Leitch of Livingston and members of the HMS Concord Association, provide an overwhelming insight into the risks that Concord was subjected to when ordered into the Yangtze river. Mr Leitch has been in touch with me on the issue over the three years since I was elected to Parliament, and he is delighted that I am able to have this Adjournment debate. He will no doubt be watching live on the internet.
What follows has always been denied by the Government, the Foreign Office and the Admiralty. When it was obvious that negotiations for a safe passage downriver were leading nowhere, Lieutenant Commander Kerans informed Admiral Brind in a coded signal that he planned to break out that evening. Admiral Brind, without reference to the Admiralty or the Foreign Office, signalled to HMS Concord, which was patrolling in the South China sea, to proceed upriver to meet Amethyst and, should the Woosung forts open fire, Concord was to return fire in support of Amethyst. When Amethyst made her escape on the night of 30 July 1949, one other ship, the destroyer HMS Concord, entered the Chinese territorial waters of the Yangtze to escort and cover the ship past the massive guns of the Woosung forts, which were the last obstacle before reaching the open South China sea.
The duty quartermaster was ordered to go around the ship and tell everyone, by word of mouth—not piping it over the tannoy as the sound would carry over the water and could alert the enemy—that the ship would up anchor and proceed upriver. The Concord was challenged by a nationalist gunboat and ordered not to travel any further. Stopping until the nationalist ship had left the vicinity, the Concord then sailed past the heavily armed Woosung forts to meet Amethyst. At the forts, Concord, on sighting Amethyst, sent the signal, “Fancy meeting you here”, to which Amethyst replied,
“Never, repeat never, has a ship been more welcome.”
Lieutenant Commander Kerans then signalled Admiral Brind, with a copy to the Admiralty:
“South of Woosung… Have rejoined the fleet… No damage or casualties… God save the King.”
Having passed the Woosung forts without their opening fire, the Concord, still in the Yangtze river, transferred supplies and 147 tons of fuel to the Amethyst, which had only 7 tons left. Both ships made it into the neutral waters of the South China sea and set course for the British province of Hong Kong.
The Concord was soon met by HMS Cossack, whose captain boarded the ship, removed its log book and took with him any evidence of the Concord’s involvement. The move to expunge any mention of its involvement with Amethyst was in motion. Admiral Brind went public and informed the news media that he had decided to authorise and endeavour, despite the risk, to bring about HMS Amethyst’s escape from China’s Yangtze river.
Hon. Members may wonder why there was so much concern to hide the fact that Concord had dashed up the Yangtze to assist Amethyst. The answer is simple: to prevent an international incident when cold war tensions were high. Had the Communists been aware that Concord had gone to the aid of Amethyst and entered Chinese territorial waters, the political consequences might have been catastrophic. Admiral Brind going public on what amounted to a covert mission that he had authorised would obviously upset the diplomatic apple cart.
After Concord and Amethyst had cleared the Yangtze river into the open sea, Sir Ralph Stevenson, the British ambassador in Nanking, sent a telegram to the Foreign Office, with copies to the commander-in-chief Far East station and the Singapore, Hong Kong, Shanghai and Canton embassies. He stated:
“No repeat no publicity should be given to the fact that H. M. Ship Concord entered Chinese territorial waters… It might help to lessen the possible repercussions upon British communities in Communist occupied territory if public statements could stress that the escape of H. M. Ship Amethyst was due to the initiative of the officer in command in accordance with the best traditions of a sailor responsible for the safety of his ship and the welfare of the ship’s company and that his intention to do so was not revealed to any of us out here.”
In other words, “If the balloon goes up and politically everything goes pear-shaped, we blame Lieutenant Commander Kerans and hang him out to dry.”
That telegram removed any official mention of the Concord’s involvement in the Yangtze incident. The move to expunge any mention of Concord’s involvement with Amethyst was going full speed ahead. Although Admiral Brind had ordered Concord to enter the Yangtze and escort Amethyst past the Woosung forts, he had no alternative but to comply with Ambassador Stevenson’s instructions. Consequently, a press release was issued and this report appeared in the Evening News on Saturday 6 August 1949:
“A Navy spokesman stated that the destroyer Concord had been waiting at the mouth of the Yangtze and was prepared to go up river to the aid of the Amethyst if needed”.
It is clear from the evidence that on the date and at the time that Admiral Brind gave the order, he committed HMS Concord and the ship’s company to a situation in which the risk to life and limb exerted by enemy forces was significantly above what UK armed services personnel might routinely be expected to tolerate. In recognition of the action, the officers and ship’s company of HMS Amethyst, together with those who served on three other Royal Navy ships that took part in the early stages of the incident, were awarded the Yangtze 1949 clasp to the Naval General Service Medal 1915.
I am concerned that that aspect of the incident is being sidelined. The committee responsible for compiling the 1949 Yangtze campaign awards scheme—the Sir John Holmes review—was not invited to look into HMS Concord’s role in the incident covering the dates from 28 to 31 July 1949. In other words, officially Concord was not there. I hope that hon. Members will appreciate how frustrating that is. The Minister should understand the strength of feeling behind the Concord veterans’ claim that they should be eligible for the NGSM Yangtze 1949 clasp.
The unrecognised heroes of the Yangtze incident—victims of Government skulduggery—are not claiming heroism or bravery; they simply believe that some official recognition should be instituted. Today, a large question mark hangs over the Yangtze incident. I fear that it appears to have been a cover-up that may be ongoing to this day. Indeed, this debate may already have some people cringing in high office within the Government and the Admiralty.
To sum up, for 64 years the true story of HMS Amethyst’s dramatic escape from China’s Yangtze river has been suppressed. The House may now wish to have a full account of the circumstances in which His Majesty’s ships were fired on in the Yangtze river with grievous casualties and damage. I urge the Government to abandon diplomatic caution and investigate the circumstances in the process of awarding medals to those involved in the Yangtze campaign and, in particular, investigate whether the process was corrupted by the exclusion of relevant and important documents relating to the role of HMS Concord in the Yangtze campaign on 30 and 31 July 1949.
I look forward to hearing what the Minister has to offer and, perhaps more importantly, to whether he can confirm that the Government will conduct a review with due diligence and propriety. The House deserves to be told the truth and given an accurate account of HMS Concord’s role in the 1949 Yangtze incident.
The Minister of State, Ministry of Defence (Mr Mark Francois)
It is a pleasure to serve under your chairmanship this afternoon, Ms Dorries.
I congratulate the hon. Member for Livingston (Graeme Morrice) on securing this Adjournment debate, and I thank him for providing me with an opportunity to speak on this matter. I will try to make the Government’s position clear.
I will begin by speaking briefly about the Yangtze incident, drawing on the official accounts from the time. On 20 April 1949, HMS Amethyst was sailing up the river Yangtze to relieve HMS Consort, which was stationed at Nanking as the guard ship for the British embassy during the Chinese civil war. While en route, HMS Amethyst came under fire from a communist gun battery. Amethyst returned fire, but shells hit the wheelhouse and the bridge, killing or injuring everyone except the Yeoman of Signals. The commanding officer, Lieutenant Commander Skinner, was mortally wounded and later died ashore. The damage to the wheelhouse had jammed the steering gear and the ship ran aground. Unfortunately, the doctor and a sick berth attendant were also killed when the quarterdeck was hit. HMS Amethyst continued to return fire with the only one of her three twin-mounted guns that could be brought to bear on the battery.
On receipt of Amethyst’s signal that she was aground and under fire, HMS Consort sailed from Nanking and reached the Amethyst at 1500 hours. Consort also came under fire and sustained casualties. Consort’s captain decided that it would be impossible to take Amethyst in tow, and Consort continued down the Yangtze.
On 21 April, HMS London and HMS Black Swan were ordered up the Yangtze to aid Amethyst. Both ships came under fire at point blank range: London was repeatedly hit and holed in her superstructure and bridge. The Chinese pilot was killed, the navigating officer mortally wounded, bridge communications were cut, five fires were started and numerous casualties were sustained. The ships were ordered back down the river. On her way down, London’s fire on the Communists was effective but she was fired at again and suffered more casualties.
On the evening of 21 April, a Royal Air Force Sunderland flying boat alighted near the Amethyst and succeeded in transferring an RAF medical officer and medical supplies, before being forced by gunfire to take off again. Around the same time, the British naval attaché, Lieutenant Commander Kerans, took command of the Amethyst and started negotiations with the Communist authorities.
During these initial two days, the Royal Navy suffered three officers and 42 ratings killed, and seven officers and 104 ratings wounded. Amethyst remained under the guns of the People’s Liberation Army for 10 weeks, with vital supplies being withheld from the ship.
In late July, Lieutenant Commander Kerans decided to break Amethyst out of the location where she had been since 20 April and to regain the open sea. On the evening of 30/31 July, taking the opportunity of a dark night and a favourable tide, the ship slipped anchor and, following the passenger ship Kiang Ling Liberation, sailed down river. The shore batteries opened fire once again. HMS Concord was ordered up the river to provide assistance and, if necessary, fire support.
Concord’s ship’s log for July 1949, which is available at the National Archives at Kew—I have a copy with me this afternoon—shows that on the evening of 30 July she was at 10 minutes’ notice for steam, later reduced to two hours’ notice. At 0145 hours on the morning of 31 July, she moved to a position ready to proceed up the river and at 0345 hours she weighed anchor and proceeded into the river. After sailing 57 nautical miles, she sighted Amethyst at 0525 hours. Concord turned round and provided escort as the two ships passed down river. This manoeuvre was successful and from the time Concord sighted Amethyst there was no enemy action and both ships returned safely. As her log records show, Concord stood down from action stations at 0715 hours, and at just after midday the main engines were switched off. As the hon. Gentleman rightly reminded us, at the mouth of the river, Lieutenant Commander Kerans sent the following signal from Amethyst:
“Have rejoined the fleet south of Woosung, no damage or casualties. God Save The King.”
A number of veterans of the Yangtze incident have been campaigning for several years for an independent review of the policy and for the award of the Naval General Service Medal with clasp Yangtze 1949 to HMS Concord’s ship’s company. The hon. Gentleman is a strong and vocal supporter of those veterans, as demonstrated by today’s proceedings, and a while ago he wrote to my predecessor about this subject on behalf of one of his constituents.
For many years, the policy of successive Administrations was that no consideration would be given to reviewing the qualifying criteria for existing medals more than five years after the events these awards were instituted to recognise. That general policy remains in place, but given the strong feelings of veterans from a number of campaigns regarding several medallic issues, the Prime Minister asked Sir John Holmes, a retired and respected senior diplomat, to conduct an independent, comprehensive military medals review. He was supported in this by Brigadier Brian Parritt CBE, retired. One element of Sir John’s work was a specific review of the eligibility of HMS Concord’s ship’s company for the Yangtze clasp, and what I say now draws heavily on his conclusions.
It is clear from contemporary documents that the Naval General Service Medal with Yangtze clasp was awarded for
“specified service and the exceptionally trying and dangerous conditions in which their duty was carried out by the Amethyst, Consort, London and Black Swan and those members of the Army and Royal Air Force who were involved in the short period 20 April to 22 April 1949”.
In considering this matter, the Holmes review accepted that HMS Concord did enter the Yangtze on 31 July 1949, as my hon. Friend the Member for Gosport (Caroline Dinenage) and the hon. Gentleman said. For the avoidance of all doubt, I am happy to place that on the record this afternoon. While there, Concord met HMS Amethyst and escorted her out of the estuary. It is, of course, recognised that there was a degree of risk involved in this, given the shore batteries in particular. However, the ship’s log makes it clear that HMS Concord was not fired upon at any point.
Graeme Morrice
Is it not officially recorded that the river was also mined and therefore that there was substantial risk to all vessels on the river?
Mr Francois
I am not denying that there was an element of risk involved in this, but it is nevertheless a matter of record that the other ships involved in the action were fired on by the Chinese shore batteries, and also a matter of record that Concord was not.
The independent Holmes review concluded that those making the decision in 1949 regarding eligibility for the medal would have been aware of Concord’s actions, but did not consider these sufficient in themselves to justify a recommendation of an award of the clasp to the ship’s company. If there was a wish to include Concord in the specified list, there was ample time to do so in August, October and November 1949, when the Committee on the Grant of Honours, Decorations and Medals reviewed the qualifying criteria for the medal.
The Holmes review considered the award of the clasp to HMS Concord’s ship’s company thoroughly and concluded that there was insufficient evidence to show that the omission of the ship as a qualifying unit for the clasp was wrong or unreasonable, and that there was no new reason to overturn the original decision. Consequently, the review upheld the original position taken at the time. The review also concluded that there was no evidence to support claims that the ship’s company was overlooked deliberately, for diplomatic or political reasons. The findings have since been endorsed by the Honours and Decorations Committee, in late 2012, and Sir John wrote to Mr Peter Lee-Hale, the chairman of the HMS Concord Association, in January this year, setting out the reasons for his conclusions.
I am advised that for many years the men of HMS Concord wanted this position reviewed again by an independent authority—someone independent of the Ministry of Defence. The Holmes review has now taken place. It was an independent review that went back to the original documents at the time. As a result, I am reassured that this matter has now been subject to a comprehensive and thorough review by impartial authorities and, although I recognise the depth of feeling about this matter, well expressed by the hon. Gentleman, and fully acknowledge the efforts of the ship’s company, I can only reiterate that there are no plans, I am afraid, to reconsider the qualifying criteria for this medal.
I entirely accept that the hon. Gentleman is acting in good conscience, as are all those who advocate a change. I therefore recognise that the Government’s position, which I have re-stated today, will no doubt be disappointing for the veterans of HMS Concord and their families. However, the actions of Concord’s crew in 1949 have been brought to the public’s attention through the coverage of their long campaign for additional recognition. This debate will place another entry in the parliamentary record.
In conclusion, I wish to take this opportunity to once again pay tribute to HMS Concord’s contribution to the defence of our nation and to her crew, whose actions were fully in line with the proud traditions of the Royal Navy.
Complex Regional Pain Syndrome
(10 years, 10 months ago)
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Iain Stewart (Milton Keynes South) (Con)
It is always a pleasure to serve under your chairmanship, Ms Dorries. I am grateful for the opportunity to highlight how regional sympathetic dystrophy, now known as complex regional pain syndrome, affects those who suffer from it and to press for more research into the condition, so that a greater number of people may be properly diagnosed and treated. If Members forgive me, I will use the acronym CRPS throughout the debate for brevity and ease of description.
The earliest descriptions of CRPS apparently date back to the American civil war, but I became aware of it only through my constituent, Kevin Scardifield, who suffers from the condition. He contacted me because his experience of CRPS and the quality of care that he received led him to believe that there is neither an adequate understanding of the condition by NHS clinicians, nor good-quality care for sufferers such as him on the NHS.
Before I proceed, it might be helpful if I explain CRPS and its symptoms. The NHS Choices website describes CRPS as
“a poorly understood condition in which a person develops a persistent (chronic) burning pain in one of their limbs.”
It continues:
“The pain usually develops after an injury—which in most cases is a minor injury—but the pain experienced is out of all proportion to what you would normally expect.”
It is through an injury that my constituent developed the condition in 2009. He was undergoing carpal tunnel release surgery when the local anaesthetic failed to work and he broke his hand against the clamp when he jerked so hard because of the pain.
To give a full account of the symptoms experienced by sufferers of CRPS, I will quote directly from a letter that Mr Scardifield sent to me:
“The pain of this condition is so great that there are recorded cases of sufferers self-amputating in a desperate attempt to escape the excruciating agony. Others have had their circulation so badly damaged that they have developed gangrene and have had to have amputations to save their lives. In either case it has caused the condition to spread further into their bodies.
According to the…McGill Pain Index, it is the world’s most painful incurable condition; it is almost impossible for us to understand exactly how painful that is. Try and imagine a 3 bar electric fire with a metal grill—how long do you think you could hold your hand against the grill with one bar on? Now try and imagine that fire is inside your hand, one bar is a good day for a sufferer, three bars is a bad day and there is no off switch.
Try and imagine a pain so great and a grip so weak that you cannot pull open a packet of crisps yourself, a sneeze that turns into a scream of agony. Knowing that you will never be able to pick up and hold or play with your newly born child or grandchild because one hand is useless and they could cause your condition to spread or start somewhere new.”
My constituent recounts that his injury was missed, not only by the surgeon in subsequent visits but by the hand therapists in approximately 50 visits. Eventually, he was diagnosed as having CRPS following a referral to the hand therapy unit of Milton Keynes hospital.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing this matter to the House for consideration. I have a great many constituents who have the problem, which concerns me. Does he believe there is now a greater need for doctors to be trained to tell the difference between fibromyalgia, which some people think CRPS is, and the actual disease itself? If so, does he think the NHS should initiate training among doctors and surgeons to ensure that that happens? Should there be more research on how the pain starts and where it comes from?
Iain Stewart
I have much sympathy with what the hon. Gentleman says, and if he bears with me, I will address training and research funding a little later.
The NHS Choices website sets out the quality of care and treatment that CRPS sufferers should receive due to the complex nature of the condition. My constituent should have been provided with a care team comprising a physiotherapist, an occupational therapist, a neurologist, a psychologist, a social worker and a pain relief specialist. He informed me that he has not received such care, as most health professionals whom he has encountered do not even know the condition’s acronym.
That leads me to my principal argument. If NHS clinicians do not sufficiently understand the condition, how will they be able to diagnose it properly and ensure that patients are adequately treated and cared for? The NHS Choices website says that it is hard to estimate exactly how common CRPS is because many cases go undiagnosed or misdiagnosed. I think the hon. Gentleman was referring to that point.
My constituent contends that possibly 250,000 people in England have not been properly diagnosed. He is understandably impassioned about the issue and has been carrying out his own research using American sources—it appears more research is being conducted into the condition in America.
From my own research, I learned from one study that as many as one in 3,800 people in England may be affected by CRPS. Therefore, going by the 2011 census estimates, 14,000 people could either have been misdiagnosed or remain undiagnosed. Although that might appear to be a small number by comparison with my constituent’s estimate, it does not diminish the issue’s importance.
The core principles of the NHS state that good health care should meet the needs of everyone and should be based on clinical need. Kevin Scardifield is unable to do the everyday things that other people take for granted. He was a police officer before the onset of the condition—a profession he greatly loved but had to give up. So debilitating is the condition that, by the middle of last year, he had been able to leave the house only six times, which was just for a few yards to the GP.
I am sure that Members can appreciate why this is such an important issue and why Kevin Scardifield has been campaigning hard for proper diagnosis and treatment. Since he made me aware of the condition, I have made a number of representations to the Department of Health, the local hospital, the primary care trust—now the clinical commissioning groups—and even the Department for Work and Pensions.
I am grateful to the Minister and his predecessor, the right hon. Member for Sutton and Cheam (Paul Burstow), for their replies to my constituent’s concerns when I brought them to their attention. Had my constituent felt that his concerns had been fully addressed, however, we would not be having this debate, so if the Minister will forgive me, I will raise a number of specific issues. First, as I have mentioned, people are either being misdiagnosed or remain undiagnosed because NHS clinicians do not appear to have sufficient awareness of the condition.
Stuart Andrew (Pudsey) (Con)
I congratulate my hon. Friend on raising the issue. Although I take an interest in health issues, CRPS is new to my attention. Only today, I was contacted by a lady from Leeds who is a sufferer, and listening to her story was very harrowing. Is my hon. Friend surprised, as I am, that there is only one specialist centre in the UK? That centre is in Bath, which is a long way from many places. If CRPS is diagnosed early, there is a high chance of it going into remission, which would be great for the NHS and, more importantly, for the patients involved.
Iain Stewart
My hon. Friend makes an important point, and I suspect that if we spoke to all our colleagues we would find that they, too, have been contacted by constituents with this condition. One of the points that I will make in a few moments is on the need for greater research and specialist services, so that the types of benefit that he rightly describes can be identified and delivered.
Secondly, the number of people diagnosed with the condition is unknown. Indeed, the Department of Health has informed me that it does not hold such records. My constituent informs me that, in 2010, he was told by NHS Direct that just over 11,000 people had been diagnosed in the United Kingdom. In 2012, he came across some information in the CRPS guidelines prepared by the Royal College of Physicians that quoted research suggesting a higher incidence of CRPS in Europe. On the back of that, he again contacted NHS Direct, and this time he was informed that it had been ordered to stop keeping records and to delete existing ones, as that responsibility would be undertaken by the Office for National Statistics. The ONS, however, replied that no such responsibility had been passed to it. Will the Minister clarify that issue and assure me that there is a strategy in place adequately to capture the number of people being diagnosed with CRPS? Will he also look into claims that specialists are failing to highlight the seriousness of the condition, particularly its potentially degenerative nature?
Thirdly, there does not seem to be an agreed pathway within the NHS for the treatment and care of those diagnosed with the condition. If there is, it was not reflected in the care that my constituent received. Will the Minister ensure that all NHS trusts and clinical commissioning groups follow the guidelines?
Fourthly, compared with the United States and other European countries, we are not doing enough to research the condition with a view to finding a cure and ensuring an improved quality of life for CRPS sufferers. While preparing for this debate, I observed that there was more information on the condition on US-based websites than on UK-based ones. I have also been unable to find UK charities or support groups for CRPS. Everyone can be proud of the fact that since the start of modern clinical trials, 39,179 trials have been made or are in progress to find a cure for cancer. The UK has carried out about 2,299 of them. The UK Charity Commission has 976 cancer charities on record, and the NHS spent more than £375 million between 2008 and 2012 on researching a cure for cancer. Clearly, that is a wonderful amount of research, but during the same period, only 76 trials on CRPS have been conducted worldwide. Holland, with a population of just over 16.5 million, has carried out three trials, and Switzerland, with a population of 8 million, has carried out two. The UK has a population of more than 60 million, yet I have been unable to locate a record of our carrying out any trials.
In addition, the NHS does not appear to have invested much in researching CRPS. I understand that one project was carried out last year in Bath, to which my hon. Friend the Member for Pudsey (Stuart Andrew) referred, but it was not aimed specifically at finding a cure, and it was funded by an American charity. Will the Minister look into funding for more UK research into the condition? Specifically, will he consider my constituent’s suggestion that a post be created within the Department of Health for a CRPS officer to liaise with specialist clinics around the world to collect, collate and disseminate papers and studies on the condition? My constituent explains that it would prove useful, as it was not until 19 years after the US first stated that guanethidine blocks were ineffective on RSD sufferers that our own specialists came to the same conclusion.
I hope that the Minister will address those matters when he replies, and I hope that this debate will help draw attention to this important issue, so that more people are properly diagnosed and adequately treated. I also hope that I have been able to do justice to the needs of sufferers such as my constituent. May I suggest that the Minister find time at some point in future to meet them, so that he can properly understand the sheer pain and agony that they face?
The Minister of State, Department of Health (Norman Lamb)
I congratulate my hon. Friend the Member for Milton Keynes South (Iain Stewart) on securing this debate on an issue of intense importance to people who suffer from complex regional pain syndrome. The condition can be debilitating, with a devastating effect on sufferers and their families. I know that there are those, including my hon. Friend’s constituent, who campaign tirelessly to raise awareness of the condition. The description that he gave of what people go through—attempts at self-amputation, for example—are unimaginable.
I pay tribute to Mr Scardifield for his persistent campaigning to raise awareness. It is highly laudable that he has chosen to campaign and maintain the pressure for increased understanding. The experience that my hon. Friend described—the diagnosis was missed by several clinicians, and there was no proper care team or personal care plan—is of concern. I am grateful to him for alerting me to the extent of the challenge faced by his constituent. One great benefit of Adjournment debates such as this is that they ensure that Ministers and officials focus on a particular condition that might not otherwise get the attention it needs. I am grateful for this opportunity. I hope that this debate will prove informative for those here who wish to learn more about the condition and be helpful to those affected, as I say more about the help and support that ought to be available for CRPS sufferers and the research into the condition that is currently under way.
Although it has been recognised as a medical condition for more than 100 years, diagnosing CRPS at its earliest stages remains a problem, as my hon. Friend rightly said, because it is often misdiagnosed or completely undiagnosed. The explanation is threefold. First, CRPS is relatively uncommon and patients do not routinely present to GPs with it. When the Department looked at the representations that we have received on the subject over the last few years, the number of individuals who have approached us is small. The fact that the condition is relatively uncommon and that GPs do not come across it that often creates a problem in terms of their capacity to diagnose it accurately.
Secondly, the range of symptoms associated with CRPS are shared with a number of other, more common conditions, so that when patients do present, they may not be correctly diagnosed in the first instance. Thirdly, there is no single diagnostic test that accurately identifies the condition; a diagnosis is made primarily by excluding other conditions with shared symptoms that can be accurately diagnosed. Those difficulties also mean that there are no reliable figures for the number of people living with the condition, and estimates produced by researchers and clinicians vary considerably, as my hon. Friend said in his speech.
I understand his concerns about having a clear picture of the number of people affected by CRPS. I will approach NHS England to ask whether there is any scope to improve our understanding of how many people are diagnosed with the condition. Ultimately, I think that we can all agree that a better understanding of the extent of the condition and the numbers affected would be a considerable advantage. Let us explore whether it is possible to achieve greater accuracy.
As my hon. Friend may be aware, since 1 April 2013, NHS England has been responsible for delivering improved outcomes for people with long-term conditions such as CRPS.
Jim Shannon
On the subject of statistics and information, does the Minister intend to make contact with the regional Administrations, whether in the Northern Ireland Assembly, the Scottish Parliament or the Welsh Assembly, to ensure that all the information comes together so we can galvanise action and respond better?
Norman Lamb
I will certainly explore the possibility of understanding how much information is available to the devolved Administrations to increase our understanding of the prevalence of the condition. They may be in exactly the same position as England, where our understanding of the prevalence is ultimately still limited, but let us explore that further.
NHS England draws on a wide range of clinical advice when developing commissioning policies and statements. It has a specialised pain clinical reference group to provide expert clinical advice on pain issues. I will therefore put forward my hon. Friend’s concerns about the need for CRPS expertise.
Turning to the identification of CRPS, an increasing range of guidance is available to improve awareness of it among members of the public and health professionals to support early diagnosis. NHS Choices, to which my hon. Friend referred, provides comprehensive advice on the causes, symptoms and treatment of the disease. More detailed clinical guidance is provided via the NHS Evidence website.
In May last year, the Royal College of Physicians published a guideline for clinicians on CRPS, setting out best practice on the identification and management of the disease. The guidance was developed with the involvement and endorsement of 21 key organisations involved in the care of people with CRPS, including the Royal College of General Practitioners, the British Orthopaedic Association, the British Pain Society, the British Society of Rehabilitation Medicine and the British Society for Rheumatology, to name but a few. I am confident that that collaborative guidance will prove useful in supporting clinicians to identify and treat patients with CRPS more effectively. When such guidance, produced by clinicians, is developed, one does not achieve a sea change in understanding overnight. It takes time to get the message across, in particular throughout the whole of primary care. The production of the guidance, however, is the starting point, and it will aid clinicians in diagnosing and treating appropriately.
Once a patient has been diagnosed with CRPS, a range of treatment options is available. Unfortunately, there is no cure for the condition, but many patients with pain disorders can be managed through routine primary and secondary care once they are appropriately diagnosed. For patients with CRPS, treatment can involve: physiotherapy; occupational therapy; a neurologist to examine the effect on the nervous system; sometimes a psychologist, who may be appropriate, because of the psychological problems caused by living with CRPS, as well as with a host of physical health conditions; a social worker for advice about what extra help and services are available; and a doctor or other health care professional trained in pain relief, which is critical.
NHS England is aware that more needs to be done to identify those patients with the most severe and complex chronic pain who need access to nationally commissioned specialised services. NHS England’s specialised pain clinical reference group is working with the royal colleges and the British Pain Society’s guidelines to ensure that the needs of those patients are appropriately met.
I am aware that the absence of clinical guidance from the National Institute for Health and Care Excellence is a real concern of patients with CRPS. I am advised, however, that NICE is consulting on a short clinical guideline on the pharmacological management of neuropathic pain, including CRPS. The draft guidance, setting out recommendations for further research, highlights the need for more research into CRPS. Final guidance is expected for publication shortly, in October of this year. In addition, a quality standard topic on pain management in young people and adults has also been referred to NICE for development. Quality standards are a concise set of statements designed to drive and measure priority quality improvements within a particular area of care; they support commissioners to be confident that the services they are purchasing are high quality, cost-effective and focused on driving up quality.
My hon. Friend specifically raised research into CRPS. The Government are supporting a range of research projects into the condition, including a major trial of low-dose intravenous immunoglobulin treatment, funded via the Medical Research Council and costing more than £650,000. The investigators involved have previously treated patients with IVIG and reported encouraging results on pain relief in a pilot trial. IVIG may provide pain relief for patients for whom classical treatments are not satisfactorily effective. If IVIG treatment is proved effective, the trial may also stimulate research on the efficacy of IVIG in treating other chronic pain syndromes.
The National Institute for Health Research clinical research network is also supporting a multi-centre international study to define recovery and the priorities for recovery from the perspective of patients with CRPS. The NIHR welcomes high-quality funding applications for research into any aspect of human health, including CRPS, and judges them on an objective basis.
More generally, I reassure my hon. Friend of the Government’s commitment to improve outcomes for the 15 million-plus people in England who are living with a long-term condition, including those with CRPS. Through the mandate—the set of Government priorities for NHS England—we have asked NHS England to make measurable progress towards making the health service among the best in Europe at supporting people with ongoing health problems to live healthily and independently, with much better control over the care that they receive.
Through the NHS outcomes framework, we will monitor the performance of the NHS in supporting people with long-term conditions, such as CRPS, to live as normal a life as possible and to improve their quality of life. Improvements will be measured in three main areas: how well the NHS is performing in supporting people to look after themselves; how well a person is able to live as normal a life as possible; and how successfully the NHS manages long-term conditions by looking at unnecessary hospital admissions and excessive lengths of stay in hospital. The improvement areas are mirrored in the clinical commissioning group outcomes indicator set—apologies for the jargon—which will be used to hold CCGs to account for and to provide information for the public on both the quality of services and the health outcomes achieved through commissioning.
At service level, the new NHS improvement body, NHS Improving Quality, has made the development of evidence-based tools for the management of long-term conditions a key improvement programme for 2013-14. Interventions will involve care plans, care co-ordination, use of technology, risk stratification, self-care and, crucially, the role of carers. That work will be evaluated and best practice identified to help drive improvement in the management of long-term conditions such as CRPS in every local area.
I thank my hon. Friend once more for securing today’s debate. I very much hope that our discussion has been helpful to him and to his constituent. I am more than happy to discuss further how we can improve outcomes for people suffering from such a pernicious condition.
Question put and agreed to.
Written Statements
(10 years, 10 months ago)
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Scientific Advisory Council
(10 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
In accordance with Cabinet Office guidance on public bodies, I have launched a review of the Defence Scientific Advisory Council. This review will examine the Council’s form and function as well as its corporate governance procedures. The review is due to be completed later this year and I shall inform the House of its outcome.
Parliamentary Written Answer (Correction)
(10 years, 10 months ago)
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The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I would like to inform the House that a written answer I gave on 18 March 2013, Official Report, column 372W to the hon. Member for Witham was incorrect. The hon. Member asked the Secretary of State how much was paid to officials in (a) his Department and (b) its non-departmental public bodies in bonuses and other payments in addition to salary in each of the last five years; how many officials received such payments; and what the monetary value was of the 20 largest payments made in each year.
The data in the first table in the response was partially incorrect and reported a figure for departmental spend that was too high, due to an administration error with the datasets. The error has now been identified and corrected. The departmental spend was significantly lower on bonus and other payments than previously stated. The original and corrected tables are shown below. All other data provided in the response is correct.
Question
To ask the Secretary of State for Energy and Climate Change, how much was paid to officials in (a) his Department and (b) its non-departmental public bodies in bonuses and other payments in addition to salary in each of the last five years; how many officials received such payments; and what the monetary value was of the 20 largest payments made in each year. [148024].
Original response
The details of bonus and other payments made in addition to salary by the Department of Energy and Climate Change for 2011-12 are shown in the following table:
Description | 2011-12 |
Total of bonus and other payments (£) | 9,072,483 |
Number of people receiving payments | 1,062 |
Total of top 20 payments (£) | 12,000 x 1 |
10,000 x 5 | |
7,500 x 14 |
Correct response
The details of bonus and other payments made in addition to salary by the Department of Energy and Climate Change for 2011-12 are shown in the following table:
Description | 2011-12 |
Total of bonus and other payments (£) | 4,601,261 |
Number of people receiving payments | 1,090 |
Total of top 20 payments (£) | 12,000 x 1 |
10,000 x 5 | |
7,500 x 14 |
Managing Radioactive Waste Safely
(10 years, 10 months ago)
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The Minister of State, Department of Energy and Climate Change (Michael Fallon)
I am pleased to announce today the publication of the third annual report of the Government’s managing radioactive waste safely (MRWS) programme. The programme is focused on implementing the geological disposal of higher activity radioactive waste.
The Government remain firmly committed to geological disposal as the right policy for the long term safe and secure management of higher activity radioactive waste, and continues to hold the view that the best means of selecting a site for a geological disposal facility is an approach based on voluntarism and partnership.
In line with Secretary of State’s written ministerial statement of 31 January 2013, Official Report, col. 54WS, the Government have been considering what lessons can be learned from the experiences of the MRWS programme in west Cumbria and elsewhere. We have invited views on the site-selection aspects of the ongoing MRWS programme, and the responses to this “call for evidence” will inform a consultation later in the year.
The third annual report can be found at:
https://www.gov.uk/government/publications/managing-radioactive-waste-safely-implementing-geological-disposal-annual-report. I have also written to the chairs of the Energy and Climate Change Select Committee and the House of Lords Science and Technology Committee, and I have made available copies in the Libraries of both Houses.
Fuel Poverty
(10 years, 10 months ago)
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The Secretary of State for Energy and Climate Change (Mr Edward Davey)
Today we published “Fuel Poverty: a framework for future action”, which sets out the Government’s intention to adopt a new, more accurate definition of fuel poverty. This follows the publication, in March 2012, of the final report of the independent Hills review. We have also tabled amendments to the Energy Bill to put action to address fuel poverty on a more sustainable footing.
The review, conducted by Professor Sir John Hills, provided us with a new understanding of the problem of fuel poverty. Professor Hills’s work demonstrates that fuel poverty is a long-term and structural problem requiring an ongoing effort to mitigate it. We believe it is right to reflect this by adopting the new measurement approach proposed by Professor Hills, which will support a renewed focus on those with the lowest incomes living in the worst homes. This new approach aligns fully with the Government’s wider objectives of saving energy, promoting growth and decarbonising the housing sector.
At the same time, we are proposing amending the statutory framework underpinning fuel poverty. The existing fuel poverty target, contained in the Warm Homes and Energy Conservation Act 2000, has the eradication of fuel poverty as its end goal. This is the wrong type of target to focus on given the nature of the problem. Nor is such an approach compatible with the definition we are adopting. We are therefore proposing a new target that focuses on improving the energy efficiency of the homes of the fuel poor.
I believe there is real merit in giving a strong degree of statutory backing to a fuel poverty target and our proposals reflect this. On balance we believe the best way to do this is through secondary legislation. This is reflected in amendments the Government have tabled to the Energy Bill currently before Parliament.
It is also clear that we cannot achieve meaningful progress under this new framework against a target date of 2016. We will put forward our proposals on the date, level and precise form of this new target in due course, should our amendments be approved by Parliament. Our proposals for that target will themselves be subject to debate in both Houses of Parliament.
Overall, these proposals will ensure that as we continue to roll out groundbreaking policies to drive improvements to the energy efficiency of the housing stock and to ensure the fuel poor are not left behind.
We will of course continue to deliver the policies which we know are making a difference to tackling fuel poverty. The energy company obligation, which runs alongside the green deal, ensures that help goes to low-income and vulnerable households to enable them to heat their homes more affordably on a long-term basis. The affordable warmth and carbon saving communities policies together should generate expenditure in home thermal efficiency improvements worth around £540 million per year, supporting around 230,000 low-income households annually.
The warm home discount scheme, worth over £1.1 billion over four years, requires energy companies with over 250,000 domestic customers to give a discount on energy bills to their vulnerable customers and those on the lowest incomes. As part of the scheme, this winter over 1 million of the poorest pensioners automatically received a discount on their electricity bill of £130 before 31 December 2012. The Government’s spending review announcement of an increased budget of £320 million for the warm home discount for 2015-16 shows our commitment to continuing action to tackle fuel poverty.
We believe this strong package of measures will help protect the most vulnerable in society against the effects of fuel poverty.
Libya (Bilateral Support)
(10 years, 10 months ago)
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The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
On 19 June, my right hon. Friend, the Prime Minister, informed the House that at the G8 summit in Lough Erne, the United Kingdom, with other G8 nations, offered to train more than 7,000 troops to help the Libyan Government disarm and integrate militias and improve security and stability of the country. I wish to inform the House that as part of this, the UK has offered to train up to 2,000 Libyan armed forces personnel in basic infantry skills.
The Government firmly believe that a stable, open and democratic Libya contributing to wider regional stability and security is in the UK’s interest. That is why we are working closely with the US and other European countries, to lead the broader international effort, co-ordinated by the UN support mission in Libya (UNSMIL), to support Libya’s democratic transition and the Libyan authorities’ efforts to make visible improvements in public security in Libya.
The training of 2,000 Libyan armed forces personnel is part of a broader package of defence and security assistance that we have developed with the US, France and Italy to support the Libyan Government’s efforts to increase the effectiveness and capacity of its security and justice sector institutions; and to ensure the state’s monopoly on security. Other aspects include increased training for the Libyan police and further support to improve Libya’s border security through the EU border mission. The Libyan Government specifically requested the UK to provide this training for the armed forces because of the UK’s vast expertise and reputation in this field. The Libyan Government have agreed to pay for this training.
This further assistance builds on the UK’s existing and planned support to Libya on such areas as security; building accountable and human rights compliant security and justice structures; creating transparent and effective financial management, strengthening private sector development and economic governance systems in Libya.
Under current plans prepared by the Ministry of Defence, up to 2,000 Libyan armed forces personnel will be brought to the UK. They will visit in a series of smaller groups and will be trained by British Army personnel in basic infantry skills and junior leadership training at the Bassingbourn barracks in Cambridgeshire. We estimate that each course will be for a minimum of 10 weeks. The vetting of trainees will be a key component of this plan. We have requested the Libyan authorities to screen fully all trainees for medical, physical and behavioural suitability. We have sought guarantees from the Libyan authorities that all those successfully trained will return to Libya to be reintegrated into the Libyan armed forces.
The Foreign and Commonwealth Office is working with the Home Office and Ministry of Defence to ensure that security and immigration controls will be maintained on those who arrive to undertake the training. Trainees who do not pass the vetting or immigration assurance processes will not be allowed to travel to the UK.
Detailed planning is under way and we continue to work on the specific terms of our assistance with the Libyan Government. We will also be engaging closely with the local authorities and community. I will update Parliament further as these plans develop.
Civil Penalty Scheme
(10 years, 10 months ago)
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The Minister for Immigration (Mr Mark Harper)
Last week we published proposals to regulate migrant access to health services and prevent access by illegal migrants to privately rented accommodation, with measures to be taken forward in the Immigration Bill. Today we are launching a consultation on proposals to strengthen and simplify the civil penalty scheme to prevent illegal working. The consultation will run for six weeks. A copy will be available in the House Library and on the Home Office website at: http://www.ukba.homeoffice. gov.uk/policyandlaw/consultations/.
Illegal working encourages illegal immigration. It also undercuts legitimate businesses through illegal cost-cutting activity by rogue employers, and is often associated with other forms of exploitative behaviour—including harmful working conditions for employees and tax evasion. The Government are committed to taking action to effectively tackle illegal working. The Prime Minister and the Deputy Prime Minister have recently proposed that the civil penalty against employers who exploit illegal labour should be doubled.
Employers already have a responsibility to check that their employees have the right to work in the UK and, since 2008, this has been underpinned by a civil penalty scheme. This has been successful in requiring employers to make right to work checks and imposing a sanction on those who do not. We are proposing to further refine these requirements to get tougher on employers who continue to exploit illegal labour and increase the sanction to reflect the harm they cause. We are also conscious of the burdens on legitimate business, so we are also proposing a number of measures to significantly reduce the administrative costs of complying with the requirement to make right to work checks. Legitimate businesses will benefit in two ways: from tougher sanctions against rogue employers and from our intention to make it easier for compliant businesses to fulfil their duties.
The Immigration Bill will make it more difficult for illegal migrants to live and work in the UK. We want to ensure that people come to the UK for the right reasons. As we extend a warm welcome to the many migrants who make such an important contribution to life in the UK, we want to see tough action against those who have no right to be here, and also against the unscrupulous employers who exploit them.
Crossrail
(10 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)
The Crossrail project has made significant progress over the last year and has now moved firmly into its main construction phase. There are currently around 8,000 people working at over 40 construction sites across London and six tunnel- boring machines are active underground, with the final two due to launch soon. As of 3 July over 14 km of tunnelling had been completed—representing around 33% of the final total. The project is now over 40% complete. Many significant milestones have been reached including two successful tunnel breakthroughs at Canary Wharf station. The project is well on the way to achieving the target of completing the first tunnels by the end of this year.
While we remain focused on the delivery of the infrastructure, work is now also well underway on planning for and delivering an operational railway. In March a change was announced to the funding of the procurement of the rolling stock and depot contract from one which involved a significant element of private finance to one that is fully publicly funded. This step was taken to ensure that the trains are ready for the opening of the new railway. The overall schedule for the award of the Crossrail rolling stock and depot contract remains unchanged, with a targeted contract award date of mid-2014.
Transport for London (TfL) will be responsible for the operation of the Crossrail services and is leading the procurement of the Crossrail train operator (CTOC). The procurement process has already begun with the pre-qualified bidders having been announced in June. The next step will be the publication of the invitation to tender in September this year, with the aim of awarding the concession in September 2014 and the start of operations between Liverpool Street (high-level) and Shenfield in May 2015. The Department is also working closely with TfL to ensure that the requirements of CTOC are reflected in the new or extended franchises which will operate on the Great Western and Greater Anglia routes.
Crossrail services via the central tunnel are on schedule to be operational from December 2018 with full services operating from late 2019.
The Crossrail board continues to forecast that the costs of constructing Crossrail will be within the agreed funding limits. We expect Crossrail to cost no more than £14.5 billion, excluding rolling stock costs.
All major contracts (excluding the rolling stock and depot contract) have now been awarded. To date, Crossrail Ltd has awarded direct contracts with a value of approximately £6 billion. UK businesses have benefited from the award of 97% of the contracts in the Crossrail supply chain, with 58% of contracts awarded to small and medium-sized enterprises and 43% awarded beyond London and the south-east.
During the passage of the Crossrail Bill through Parliament, a commitment was given that a statement would be published at least every 12 months until the completion of the construction of Crossrail, setting out information about the project’s funding and finances.
In line with this commitment, this statement comes within 12 months of the last one which was published on 10 July 2012, Official Report, column 22WS. The relevant information is as follows:
Total funding amounts provided to Crossrail Ltd by the Department for Transport and Transport for London in relation to the construction of Crossrail to the end of the period (22 July 2008 to 29 May 2013) | £4,258,541,4821 |
Expenditure incurred (including committed land and property spend not yet paid out) by Crossrail Ltd in relation to the construction of Crossrail in the period (30 May 2012 to 29 May 2013) (excluding recoverable VAT on land and property purchases) | £1,506,347,000 |
Total expenditure incurred (including committed land and property spend not yet paid out) by Crossrail Ltd in relation to the construction of Crossrail to the end of the period (22 July 2008 to 29 May 2013) (excluding recoverable VAT on land and property purchases) | £4,434,895,000 |
The amounts realised by the disposal of any land or property for the purposes of the construction of Crossrail by the Secretary of State, TfL or Crossrail Ltd in the period covered by the statement | Nil |
1 The total funding amounts provided to CRL by the Department of Transport and Transport for London refers to the expenditure drawn down from the sponsor funding account in the period 22 July 2008 and 29 May 2013. Included within the amount of £4,258,541,482 that was drawn down from the sponsor funding account is £278,023,076 of interim funding that has been provided to Network Rail to finance their delivery of the on-network works between 1 April 2009 and 29 May 2013. |
The numbers above are drawn from Crossrail Ltd’s books of account and have been prepared on a consistent basis with the update provided last year. The figure for expenditure incurred includes moneys already paid out in relevant periods, including committed land and property expenditure where this has not yet been paid. It does not include future expenditure on construction contracts that have been awarded.
I also wish to inform the House that we have completed a review of Crossrail Act 2008 as required by the process detailed in the document “Post Legislative Assessment—The Government’s approach”. This assessment, five years after the Bill received Royal Assent, evaluates how fit for purpose the Crossrail Act has proved to be to this point in the construction process. I will publish the review before the House rises for summer recess.
Drug Driving
(10 years, 10 months ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
In May 2012 the Government introduced primary legislation to Parliament that would create a new offence of driving with a specified controlled drug in the body above the specified limit for that drug. The Crime and Courts Act 2013 sets out the framework for the new offence.
Regulations now need to be made to specify the drugs to be included in the legislation and the limits to be specified. I have today published a consultation seeking views on these regulations. The proposals follow a report published in March this year by a panel of medical and scientific experts which provided specialist advice to the Government on the effects of specific drugs on drivers’ ability.
The introduction of the new offence will reduce the amount of time, expense and effort involved for the police and the courts when prosecutions fail because of the difficulty of proving that a driver is impaired by a particular drug.
In the consultation we have proposed a zero-tolerance approach to deal with those who drive under the influence of illegal drugs as this sends the strongest possible message that you cannot take drugs and drive.
In taking a zero-tolerance approach to these drugs, the Government propose to set the limits at a level that does not catch someone who has consumed a very small amount of an illegal drug inadvertently. In considering what approach to propose for each illegal drug and what limit to set, the Government have weighed up a number of factors including the evidence about the use of the drug when driving, wider drugs policy, and the findings and recommendations from the expert panel.
After considering all of the above we propose to take a zero-tolerance approach to the following eight controlled drugs which are known to impair driving: cannabis, MDMA (ecstasy), cocaine, ketamine, benzoylecgonine (primary metabolite of cocaine), methamphetamine, lysergic acid diethylamide (LSD), 6-monoacetylmorphine (6-MAM—heroin and diamorphine).
We have also put forward our approach for dealing with drivers who use drugs which have recognised and widespread medical uses but which can also affect a patient’s ability to drive and are sometimes misused. We know that the vast majority of people who use these drugs are doing so responsibly and safely and that is why our approach does not unduly penalise drivers who have taken properly prescribed medicines. The limits we propose to set follow the recommendations of the expert panel, which in the vast majority of cases will avoid the new offence catching out drivers who have taken properly prescribed or supplied drugs in accordance with the directions of a healthcare professional or the drug manufacturer. This will avoid inconveniencing the public and taking up police time.
Taken together these proposals will make our roads safer for everyone by making it easier for the police to tackle those who drive after taking illegal drugs and clarifying the position for those who take medication.
The consultation starts today and closes on 17 September 2013 and copies will be laid in the Libraries of both Houses.
HS2
(10 years, 10 months ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
I can announce to the House today my decisions regarding safeguarding phase one of HS2—the route between London and Birmingham. Safeguarding directions protect the route of HS2 from conflicting development, and also give many of those who own property in the safeguarded area the right to serve a blight notice and request that the Government purchase their property under the terms of the compensation code.
Between October 2012 and January 2013 my Department consulted on issuing safeguarding directions for phase one of HS2. In total, 3,761 responses were submitted during the consultation period. Following careful consideration of those responses, I have today issued, under the Town and Country Planning (Development Management Procedure) (England) Order 2010, safeguarding directions to local planning authorities (LPAs) along most of the route of phase one of HS2.
LPAs to whom safeguarding directions apply are required to consult the named authority—in this case High Speed Two (HS2) Limited—on undetermined planning applications in respect of land that is within the safeguarded area. If a LPA is minded to grant planning permission otherwise than to give effect to HS2 Ltd’s comments then the planning application is referred to the Secretary of State for Transport who is able to direct a final decision on the planning application. The purpose of safeguarding is not to prevent development along the route of HS2, but to ensure that any development that does take place is consistent with our plans for the railway.
Safeguarding is also a trigger for statutory blight procedures under the Town and Country Planning Act 1990. Owner-occupiers of properties within the safeguarded area who want to move may now apply to sell their property to the Government by serving a blight notice. If they meet the relevant criteria they can expect to receive the unblighted open market value of their home, a home loss payment of 10% of the value of their home—up to £47,000—and reasonable moving costs. We do not expect that all properties within the safeguarded area will be required for the railway. Compulsory purchase powers to acquire properties needed for the railway will be set out in the hybrid Bill and can not be exercised until that Bill has Royal Assent.
Information on compensation specifically aimed at those who own property within areas safeguarded for HS2, including application forms, is available at, http://www.hs2.org.uk/ or by phoning the HS2 Ltd enquiries line on 020 7944 4908.
I have placed a summary of the responses to the safeguarding consultation in the Libraries of both Houses, and am publishing a command paper detailing the Government response to the consultation on safeguarding HS2. Both are available at http://www.hs2.org.uk/ safeguarding.
It should be noted that sections of the HS2 route in both Bromford and Ealing have not yet been safeguarded, pending a decision on whether there should be bored tunnels in these locations. These proposed design changes are the subject of a consultation launched in May 2013. I expect to announce my final decisions later this year.
Without HS2, key rail routes connecting London, the midlands and the north will soon be overwhelmed. HS2 will link eight of Britain’s 10 largest cities, serving one in five of the UK population. But the Government have always recognised the impact of HS2 on those living along the line of route. Issuing safeguarding directions brings certainty to many owner-occupiers living in the safeguarded area who can now apply to have their homes bought. I can assure the House that we will seek to process blight notices swiftly so that those who qualify can move as quickly as possible.
Workplace Pension Reform
(10 years, 10 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
I am pleased to announce that later today the Government will publish their response to the call for evidence on the impact of the annual contribution limit and transfer restrictions on the National Employment Savings Trust (NEST).
Automatic enrolment into workplace pensions represents a step change in the pensions landscape. A crucial part of the automatic enrolment landscape is NEST which was set up by Government to ensure all employers have access to a high-quality, low-cost option for workplace pension provision. While the market has always provided for larger firms and higher earners, NEST was created specifically to ensure that smaller firms and low to moderate earners also have access to quality pension provision.
To ensure that NEST focused on this “target market” the previous Government legislated to constrain NEST in two particular ways—an annual contribution limit, currently £4,500 a year, and restrictions on transfers in and out of NEST, which prevents bulk transfers of existing schemes and limits transfers by individual scheme members.
In summer 2010 the Department for Work and Pensions commissioned an independent review—“Making automatic enrolment work”—to consider whether the framework for automatic enrolment was fit for purpose. The review concluded that the basic architecture, including NEST, was appropriate, but that the constraints on NEST should be lifted in 2017.
More recently the Work and Pensions Select Committee recommended in 2012 that the constraints should be lifted at once, expressing concern that some firms might not be able to use NEST, resulting in consumer detriment. Government responded in late 2012 with their call for evidence to seek views on the future of the NEST constraints.
Requiring NEST to focus on this target market has been very successful. As a large number of medium and smaller firms will start enrolling their workers in the next few years, now is the time to focus on helping these firms get ready. With its special focus on those workers with lower earnings, NEST will be a key part of the solution as it has thought hard about its design; it has aimed its research, communications, use of language, investment and decumulation strategies at its target market. It is working, and we need this to continue. Therefore, to make sure we achieve our aim of getting people saving, we have decided that NEST must continue to focus on its target group without any distractions.
The responses to the call for evidence revealed a perception that the restrictions placed on NEST prevent it from serving the low to moderate earners and smaller employers it was intended for. The reality is quite the opposite. With mandatory contributions of just 2% on a band of earnings, with at least 1% from firms, no employer contributing at this level or the full 8% will exceed the annual contribution limit.
However, we need to look to the future and ensure NEST remains influential in the marketplace, by continuing to help drive up standards and best practice. The minimum contribution will rise to a combined contribution of 5% from October 2017 and 8% from October 2018. Therefore, in line with the recommendations of the independent “Making automatic enrolment work” review, I intend to legislate as soon as parliamentary time allows to lift the contribution limit from 2017. This will give employers the certainty they need that NEST will continue to be an appropriate scheme for them and their workers when minimum contributions rise, or should they choose to contribute more.
With regard to individual transfers, we agree that NEST should be part of the automatic transfer solution for which we are currently legislating. Therefore we intend to lift the restrictions on individual transfers in and out of NEST to coincide with the start of the “pot-follows-member” regime. The ban on bulk transfers will remain in place until the end of the main roll out period for automatic enrolment in April 2017, when it will then be lifted.
We believe that the creation of NEST has played a crucial role in the early success of automatic enrolment. NEST has focused on its target market and has innovated to serve the needs of those in that market. As automatic enrolment moves on to cover medium and smaller firms we want NEST to continue its excellent work, while signalling now that beyond 2017 NEST will be put on a similar footing to other providers in the wider pensions market.
The Government response document will be available on the gov.uk website later today (https://www.gov.uk/government/publications), and I shall place copies in the Libraries of both Houses.
Grand Committee
Energy Bill
(10 years, 10 months ago)
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The Deputy Chairman of Committees (Lord Geddes)
My Lords, it is now half-past three. As is usual on these occasions, I have to advise the Grand Committee that if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Viscount Hanworth
Clause 113, which makes provision for the sale of the Government’s pipeline and storage system, is the central clause of an extraneous part of the Bill, which should not exist and which the amendment seeks to remove. The provisions in Part 4 are enabling clauses designed to ensure that the future sale of the asset, were it to occur, would not be subject to any further parliamentary scrutiny but would be entirely at the discretion of the Secretary of State. As such, it is an affront to the rest of us.
We are told that the purpose of the sale would be to raise cash and to avoid the burden on the state of the costs of maintaining and investing in the pipeline system. Parenthetically, this declared intention of burdening the purchaser with the costs is liable to make the asset virtually unsaleable except at a knockdown price unless, of course, the purchaser can expect to extract exorbitant monopoly profits.
I should say briefly what the government pipeline and storage system—the GPSS—consists of. It is a pipeline system run by the Oil and Pipelines Agency in the Ministry of Defence. The network consists of 2,500 kilometres of pipeline and some 46 other facilities and is interconnected with several private networks. The pipeline was originally built before World War 2 and was used to supply oil for the Normandy invasion via Pluto, the pipeline under the ocean. Nowadays, in addition to supplying fuel required for defence purposes, it supplies fuel for civil aviation, which takes as much as 40% of the supplies.
The GPSS is what economists describe as a natural monopoly. It might be helpful if I were to supply a definition of a natural monopoly and provide further examples. A monopoly is a situation in which the majority of sales in a market are attributable to a single firm. A natural monopoly is a circumstance in which the technology of an industry and its associated costs imply that the most efficient form of production is to concentrate it in a single firm or organisation. Examples include the road and rail networks, the postal system, the provision of gas, water and electricity, the nation’s ports and much else besides. It is commonly agreed that in order to ensure the integrity of a natural monopoly and to ensure that it does not generate exorbitant profits, the state should play a leading role either by owning the monopoly or, at the very least, by regulating it closely.
The ideology of free market enterprise and the programme of denationalisation have come into conflict with the realities of the structure of industries, and there have been some absurd outcomes. Through the programme of denationalisation, which began under the Thatcher Administrations and which was intended to engender free market competition, the Government have succeeded, in the main, in creating collusive oligopolies. The electricity industry, for example, which is dominated by six large firms, is nowadays best described as an oligopolistic market. In the most misguided instances of denationalisation, the Government have created monopolies that are in the hands of foreign state-owned enterprises. A case in point is the British nuclear industry, which is in the hands of a French state-owned monopoly.
One of the motives of denationalisation, which I have already touched on, is the desire to remove the capital costs of state-owned industries from the Government’s net borrowing requirement. In Britain, we have been exceedingly inept at what should be a simple exercise of corporate structuring and accountancy. A previous Labour Government proposed to overcome the restrictions on the borrowing requirement by encouraging the formation of public-private partnerships. The outcome has been that in return for providing a share of the investment capital, the private sector partners have reaped exorbitant returns and, in doing so, run rings around public servants.
The successor Government should have endeavoured to find better ways of achieving the desired ends. Instead, they have reverted to an atavistic ideology that impels them eagerly to sell anything that amounts to public property. Governments in other countries have been far more adept than ours in the business of separating the finances of their state-owned industries from the finances of central government. A relevant example in the context of the Energy Bill is provided by the French state-owned electricity industry. The principal electricity companies of France, EDF and AREVA, work in close collaboration. They also work with central government to fulfil their strategic policies, but they have considerable commercial freedom. This freedom is exemplified by the fact that our Government have been relying on EDF to raise the capital from the financial markets for the construction of a new nuclear power plant at Hinkley Point.
I return now to the prospective sale of the GPSS. This should never be allowed to happen. One ought to consider the hazards that could arise from putting the network into private hands. The Bill would do nothing to constrain a private owner from abusing the monopoly position by reaping exorbitant profits, nor does it compel the private owner to undertake the necessary maintenance and investment. The consequences of the system falling into disrepair are obvious. Let us leave aside for the moment the consequences for our national defences to consider how this would affect the civil aviation industry. It would mean that aviation fuels that are presently pumped through the system would have to travel on our roads in tankers, which surely implies a major hazard.
Let us consider the possible private owners of the system. Who would they be? I am sure that we agree that we would not wish the owners to be venture capitalists intent on reaping major short-term rewards. We might prefer them to be enterprises that already have commitments to and experience of such aspects of fuel supply. In that case, the likelihood is that the owner would be a major oil or gas supplier or producer and, most probably, given the state of the ownership of the UK industry, it would be a foreign-owned enterprise. It could be Qatar Petroleum, for example, or the giant Russian Gazprom company. If it were the latter, we can imagine a fanciful scenario: there is a conflict in the eastern Mediterranean or the Middle East and various NATO allies have decided that the only viable intervention is to create a no-fly zone in the area. If we were to participate in this, the GPSS would be called upon to provide large quantities of aviation fuel to our Air Force, which would be a contingent of the international force. The owners of the erstwhile GPSS could then threaten a major embarrassment if we were to proceed with this interventionist military policy. They could threaten to bring our civil aviation to a halt unless we relented.
Such a scenario is not beyond the bounds of possibility and surely we would not wish to expose ourselves to such hazards. Were these hazards to be recognised and understood by the usual electorate of the Conservative Party, I am sure that there would be outrage. For this reason, I would expect that the proposal to sell the GPSS will go into abeyance.
I see the proposal as a throwback to a discredited programme of denationalisation that has been motivated by a combination of opportunism and ideology. On closer examination it seems to make no sense, and I beg to move that Clause 113 should not stand part of the Bill.
Lord O'Neill of Clackmannan
I would not perhaps go quite so far as my noble friend on these matters but it is important that we get from the Minister an indication of the regime under which a privatised gas storage and pipeline system would operate. Given that this will be a natural monopoly, as has been clearly explained, it ought to be under the regulatory scrutiny of Ofgem. If it is to be a natural monopoly, it should be regulated. At the moment, who owns it and for what purposes we leave other people to worry about. However, those of us who attended the talk last week by Peter Atherton might find it difficult to identify a potential purchaser of this system because it seems that it is a kind of secondary purchase, given the dire nature of a number of the obvious potential purchasers. They have far greater strains on their balance sheets than acquiring an asset like this, no matter how profitable it might be.
We may be worrying needlessly that this power will be granted as the Government may not do anything about it. However, were they to do so, it is important that an asset of this nature should not fall into monopoly hands of an unregulated character. Therefore, I certainly want to be given a clear indication from the Minister this afternoon that if this asset is to be privatised it will come under the scrutiny and regulation of Ofgem. I am not certain that such a move would raise sufficient money. It may be just another burden that DECC has to carry at present, and it feels that it would be simpler to transfer it. However, that is not the issue in question here: it is whether the people who buy the asset have unlimited powers to do whatever they wish with it or whether it should be subject to some kind of regulation. It need not necessarily be draconian but, rather, light-touch regulation—the kind which, in some respects, the regulator applies to National Grid and the wires and the pipes it owns and operates.
Lord Howell of Guildford
I am looking forward to the Minister’s reply. I am sure that he will have that sort of balance in mind. I reassure the noble Viscount, Lord Hanworth, that at the time of the fall of the Soviet Union I was approached by a Russian general who asked whether I or anyone I knew would like to purchase a fully integrated Russian military pipeline system throughout the Russian Federation, which he thought would become available and would be sold by the Soviet army. Therefore, the noble Viscount can be reassured that these ideas are not original and that similar ideas have been suggested in the past.
As the noble Viscount would expect, I wish to comment on his points about denationalisation, which is subtly different from privatisation, which was aimed at widening the ownership of the assets and taking them away from the giant nationalised corporations which were killing innovation and screwing the customer. That was the plan. To say that it is discredited seems odd when this plan has been adopted round the world including in China, Russia, the United States and every major economy throughout Europe. A more balanced approach than the one he adopted would help his case.
Lord Jenkin of Roding
My Lords, I would like to add a few words to what my noble friend Lord Howell has said. I congratulate the noble Viscount, Lord Hanworth, on his imagination which allowed him to stray into paths that upset even so stalwart a Labour supporter as his noble friend. The privatisation programme was hugely successful. I was responsible for launching the first one—the privatisation of British Telecom. If you talk to the people who use that company and work for it, they will tell you that the whole picture has been utterly transformed. There have been a number of others, so I do not agree with his general strictures on privatisation.
The other important thing that it is necessary to bear in mind is that a great many industries and bodies have been transferred from the public to the private sector. I cannot think of a single transfer that was at the time supported by the Labour Party or a single one that has been reversed by the Labour Party when in government—not one. Having opposed those transfers, Labour accepted every single one. I suspect that this will not be any different.
There is an interesting note in the House of Lords briefing pack. Incidentally, it is interesting that it still uses the previous numbers of the clauses and has not caught up with the Bill as published in this House. Its report on reactions to the proposed sale, which may well have influenced the wider remarks of the noble Lord, Lord O’Neill, noted that Scotland on Sunday,
“did not perceive this to be especially controversial”.
The pack describes, as the noble Viscount did, what the GPSS originally was; it continues:
“The GPSS has been expanded and restructured over several decades and today includes some 2,500km of cross-country pipelines, storage depots, pumping stations and other facilities”.
It then quotes an energy specialist, Murdo MacLean at Pinsent Masons:
“These measures will be of particular interest to utilities or other investors”.
I agree very strongly with the noble Lord, Lord O’Neill. Of course, it would have to be properly regulated. I have no doubt that Ofgem would be the appropriate regulator, but we are not at that stage yet. If we accept this clause, we simply give the Government the power to go down that path.
In another report—and this may be what stimulated the noble Viscount—the RMT union opposed the sale, saying:
“Bob Crow of the RMT said that plans to increase the capacity of oil storage at Portishead were a ‘classic fattening up exercise’ in advance”.
I do not accuse the noble Viscount of having had a brief from Bob Crow but he certainly reflected what Bob Crow might have said about this clause. We need to take that all with a considerable pinch of salt.
My view is that this is a sensible clause. There is no particular reason why the Government should own this network if it can be sold, if the capital can be raised, and if it is properly regulated. I repeat that I totally agree with the noble Lord, Lord O’Neill, on that. It seems an entirely proper and appropriate thing for the Government to do, and I hope that the clause will stand part of the Bill.
Lord Grantchester
I am grateful to my noble friend Lord Hanworth for probing the case for Clause 113 and the supplementary thoughts of my noble friend Lord O’Neill. The Bill’s Explanatory Notes are not helpful in this regard, merely pointing out that the Secretary of State is being provided with the power to sell, lease or transfer the GPSS,
“or any part of it and transfer any right or liability relating to the system or any part of it, subject to such conditions, if any, as he considers appropriate”.
What more could he ask for? This brings to mind the film “The Firm”, which noble Lords may remember concerned a young lawyer—Tom Cruise—discovering the dark side of providing legal services to clients. At one point, the firm’s team is considering whether there is something suspicious going on. The firm’s adviser replies,
“I get paid to be suspicious when I’ve got nothing to be suspicious about”.
The Opposition are not paid to be suspicious but we are tasked with trying to unlock what there is to worry about when the Government decide to take, upfront, all sorts of powers to transfer assets and to be able to do so however they wish.
This clause was also brought up in Committee in another place, yet the Government have not thought it appropriate to bring forward any constraining amendments to relieve any suspicions, clarify any conditionality on any transfer or explain under what possible scenarios they might wish to undertake any change to the status quo. Furthermore, the Government are not providing any further information, other than that further work is under way.
The Deputy Chairman of Committees (Lord Geddes)
The noble Lord, Lord Grantchester, was in full flow, and perhaps he would now like to resume.
Lord Grantchester
The Government are not providing any further information other than that further work is under way to update the initial value-for-money analysis undertaken last year and that Defence Ministers will be asked to decide whether to invite bids for the GPSS on the basis of that work. I welcome the presence of the Defence Minister to provide clarity to the Committee.
Given that this Bill will have completed its passage through Parliament by that stage, will the Minister tell the Committee today by what means Parliament will be able to assess the analysis and ask for certainties beyond the bland assurances already provided by the Minister of State in the other place, Mr Greg Barker, to my honourable friend Luciana Berger? It is recognised that a sale contract would be a private matter and not wholly for Parliament. No doubt the Public Accounts Committee may also scrutinise any sale. However, nothing in the clause deals with the contractual nature or goes beyond any theoretical possibility. Will the Government explain why they want to sell and whether they may limit the sale or lease to the use of the pipeline and retain the fabric or even vice versa? Any transfer would want to pass over as many liabilities as possible while retaining as many benefits. Is there any comfort in Clause 113 providing that it must be for valuable consideration? I presume that the Minister can qualify this as positive valuable consideration and will exclude negative valuable consideration—that is, someone is paid to take it away or it is part of a larger transaction as an uncosted supplement. Will the Minister also clarify what conditions the Government consider appropriate when asking this Committee to acquiesce to this power?
Finally, the Minister might be tempted to say that the Government do not yet know all the appropriate conditionality pertaining to any transfer. Will the noble Lord look at the suggestion by my noble friend Lord O’Neill and come forward with an amendment to bring regulation to the situation or to introduce any sale or transfer to Parliament when there is clarity around the circumstances which the Minister is happy to explain and promote when the time comes?
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, to date the clauses that are included within this Bill to enable the sale of the Government pipeline and storage system have received relatively little attention. Indeed, they were barely mentioned on Second Reading. This is why I welcome the clause stand part debate tabled by the noble Viscount, Lord Hanworth, as it provides an opportunity for us properly to scrutinise the proposals.
Clause 113 is crucial because it allows for the sale or lease of the GPSS or a part of it. At the current time, the rights to operate and maintain the GPSS and to access land for this purpose are personal to the Secretary of State for Defence. This clause allows the Secretary of State for Defence to transfer these rights, thereby enabling the system to be sold or leased. A decision on sale or lease will be made once further analysis has been undertaken and we have engaged with the market. The clause also allows the transfer of liabilities.
Having explained the intent of this clause, I would like to address a number of concerns that were raised in the other place relating to the sale of the GPSS so that I may demonstrate what progress has been made in these matters.
First, the strategic importance of the GPSS was raised, including the need for it to provide assured fuel supply to certain sites. Through the work conducted to date, we are confident that we will be able to put a contract in place to meet the continuing requirements of the Ministry of Defence and the United States visiting forces, which will offer the appropriate level of protection, including priority access when necessary. Similarly, the potential impact of sale on commercial customers has been raised. The Department of Energy and Climate Change and the Department for Transport have jointly reviewed the implications of a sale of the GPSS on the market, including access and charging, and concluded that while it transports a significant proportion of fuel to the major airports, existing regulatory provisions, particularly the Pipe-Lines Act 1962, are sufficient and no further regulation is required.
On physical security, I reassure noble Lords that we do not believe that the sale will make the GPSS any more vulnerable to terrorist attack than other equivalent infrastructure operated by the private sector, such as the electricity and gas distribution networks, particularly since the pipeline and storage tanks are predominantly built underground to make the system less vulnerable. Officials at the Oil and Pipelines Agency regularly discuss, with appropriate external organisations, measures to best protect the GPSS, including from the risk of cyberattack. We would expect a purchaser to continue these measures post-sale.
Questions were also raised regarding the impact on safety and the environment following the sale of the GPSS. Any owner has an inherent interest in running the system in a safe manner and would need to comply with the same legislation and regulations as the Oil and Pipelines Agency does at present, such as the regulations under the Environmental Protection Act 1990 and the Pipelines Safety Regulations 1996. Therefore, it is not believed that a sale would have any adverse impact in these areas.
Lastly, and quite rightly, the value for money of a sale has been raised. A final decision on sale is dependent on being able to strike the right deal with the private sector, and value for money is a key consideration. Work is ongoing to update the initial value-for-money analysis that was undertaken in 2011 and which underpinned the impact assessment published alongside these clauses. To refine these financial figures, we have appointed external advisers to undertake a forensic examination of the GPSS costs and revenues, including any potential liabilities associated with the ongoing operation of the system. This work will inform a final decision on sale, which we aim to make by the end of this year.
I shall do my best to answer any concerns or questions that were asked. The noble Viscount, Lord Hanworth, and the noble Lord, Lord O’Neill, were concerned that the GPSS would be seen as a monopoly. The GPSS does not supply Heathrow, Gatwick and Manchester directly—this is done via third-party pipelines. The GPSS provides direct to Stansted, and the DECC and DfT have looked at regulation and concluded that none is required. The GPSS has to compete with other privately owned pipelines.
The noble Viscount was concerned at the foreign ownership issue. Any buyer would need to be deemed competent to operate the GPSS in a safe manner and to be a UK-registered company. We are considering what other criteria any purchaser would need to meet, including restrictions on foreign ownership, and the options for posing these restrictions before any onward sale.
The noble Viscount and the noble Lord, Lord O’Neill, asked whether there would be any regulation of the GPSS post-sale to protect customers. The DECC and DfT have reviewed the implications of the GPSS sale on the market, including access and charging, and concluded that, while it transports a significant proportion of fuel to major airports, existing regulatory provisions, particular under the Pipe-Lines Act 1962, are sufficient and no further regulation is required.
The noble Lord, Lord O’Neill, was concerned that the sale might adversely impact on safety and the environment. Any owner has an inherent interest in running the system safely and there is no reason to believe that the sale will adversely impact on safety. Indeed, the OPA already has to comply with a number of safety regimes such as the Health and Safety at Work Act 1974, the Control of Major Accident Hazards Regulations 1999, regulations under the Environmental Protection Act 1990 and the Pipelines Safety Regulations 1996, which are overseen by the Health and Safety Executive and the Environment Agency. This will not change.
Lord O'Neill of Clackmannan
The Minister referred to a number of regulatory bodies on health, safety, the environment and so on. I was actually asking primarily about economic regulation. Can he flesh out rather more the information he has given us on the nature of the other competitors that the pipeline would be matched against to supply the relevant airports? Can he say whether these pipelines are subject to any kind of economic regulation, probably by Ofgem?
Lord Astor of Hever
My Lords, I hope to come back with a suitable answer quickly. In fact, I will write to the noble Lord on this issue.
The noble Lord, Lord Grantchester, was concerned that there are no additional clauses on conditionality. Clause 114 makes provision to modify the application of certain provisions of the Pipe-Lines Act 1962 to the GPSS, so that the GPSS, as far as possible, is treated post-sale as if it were a pipeline to which that Act applied. This is to ensure that it has neither a competitive advantage nor disadvantage to other such pipelines. Any conditions on sale will be contractual.
Finally, the noble Lord, Lord Grantchester, was concerned that there might be a conflict on the value consideration. We expect value to be positive.
I hope that apart from the one issue on which I will write to the noble Lord, Lord O’Neill, I have answered all noble Lords’ questions and concerns. I thank my noble friends Lord Howell and Lord Jenkin for their support.
“( ) Before designating a statement for the purposes of this Part, the Secretary of State must carry out an appraisal of the sustainability of the policy set out in the statement.”
Lord Judd
My Lords, most of us are agreed that the UK simply has to make a significant contribution to addressing climate change. However, most of us are agreed that in the drive to reduce greenhouse emissions by increasing the amount of electricity generated from renewable resources we must avoid an irresponsible and tragic situation whereby we are irreparably damaging the environment by siting infrastructure inappropriately in vulnerable landscapes. I should at this point make it clear that I am honorary president of the Campaign for National Parks and a patron of Friends of the Lake District. As I am sure is the case with many noble Lords, I have frequent correspondence and discussions with organisations such as the CPRE, the WWF and the rest. It is interesting to find the strength of concern about the implications of the Bill.
In preparing for this debate, I have found one brief in particular to be extremely helpful and I hope that other noble Lords have had an opportunity to see it. It was produced by the John Muir Trust and I find it very telling.
Lord Greaves
My Lords, I thank the noble Lord, Lord Judd, for tabling these amendments, which are important and relevant at this stage of the Bill and I was pleased to add my name to them. I approach this part of the Bill with memories of the discussions that we have had in various planning Bills in recent times, particularly the Planning Act 2008. This Bill is clearly mainly about the promotion and regulation of energy, whereas from the planning perspective it was about the relationship of the town and country planning system to energy production. It is right, particularly when we are talking about high-level policy statements, that we should come to how the two systems interact, and I am grateful to the noble Lord for introducing these amendments that allow us to do so.
The strategy and policy statement proposed in this part of the Bill is about the strategic priorities in UK energy policy, the intended policy outcomes and the roles and responsibilities of the people involved in implementing them. There has been a lot of discussion already on the Bill about environmental objectives, and the Bill is crucial, but the main debate is about the high-level environmental objectives of tackling climate change. Indeed, some noble Lords have suggested that the Government’s policy on this is unnecessary, wrong or over the top. The question that the noble Lord’s amendments raise is an important one: how far these high-level climate change environmental objectives should be at the expense of the local environment. This is a tension, it is a clash, and there is no point in running away from it. There will have to be balance and compromise, as there always has been, and it is right to discuss it now.
It is surely nonsense to sacrifice a considerable amount of local ecology and biodiversity in the interests of the global environment, but the further question that the noble Lord raised is how far we have to sacrifice the amenity aspects of the environment, as they might be called, which are far more subjective but, as I think the noble Lord said at the beginning of his speech, vital for people’s well-being—their spiritual health, I think he called it.
We are talking about landscape quality in particular and the value of that quality for scenery, recreation, ecosystems and biodiversity. We are talking specifically, though not entirely, about wild places—what might be called “wilderness”. The degree to which we have any wilderness in this country that compares with other parts of Europe or continents such as North America or Africa is arguable, but we still have places that, when you are there, certainly feel very wild indeed.
I remind the Committee of my registered interests in the British Mountaineering Council, the Friends of the Lake District, the Open Spaces Society and as a member of the John Muir Trust, to which the noble Lord referred.
These amendments raise important questions, including how far these issues of policy on what might be called the local environment—although “local” might encompass large areas—should be entrenched at the highest levels of policy-making, particularly in the strategy and policy statement, the SPS. The noble Lord went through his amendments in detail and I will not repeat what he said. However, I want specifically to refer to Amendment 49, which states that in addition to the statement and the report on the responses to consultation, which the Bill already states must be laid before Parliament, the Government must lay before Parliament,
“a statement setting out how the strategy and policy statement relates to other statements of government policy on energy, such as national policy statements and other strategic national policies including, for example, on transport and communications”.
I refer specifically to national policy statements under the Planning Act 2008, as amended by the Localism Act 2011. Six statements on energy have been approved by both Houses of Parliament. The first, EN-1, is the Overarching National Policy Statement for Energy. That alone is 115 pages long. The five further documents are on fossil fuel electricity generation, renewable energy infrastructure, gas supply infrastructure, including gas and oil pipelines, electricity networks infrastructure and a two-volume, hefty document on nuclear power. My question is: what is the relationship between these national policy statements and the new strategy and policy statement, which will all be agreed by Parliament?
The SPS is clearly intended to bring regulation of the gas and electricity market by Ofgem more closely into line with government energy policy. In November last year, we were provided by the Government with an excellent and extremely useful background note, the Energy Bill Provisions for Ofgem Strategy and Policy Statement. It states that,
“the SPS must contain: the strategic priorities and other main considerations of Government in formulating energy policy; policy outcomes to be achieved … a description of the respective roles and responsibilities of the Authority and the Government (and potentially others)”.
However, the Bill, at Clause 126(1), repeals the existing provisions concerning social and environmental guidance to which Ofgem must have regard when carrying out regulatory functions. The Ofgem review found that this provision was ineffective and we are told that it will be superseded by the SPS. The November 2012 paper states:
“The Statement replaces the previous Social and Environmental Guidance”.
That is okay, as far as it goes. The priorities and outcomes to be included in the SPS, according to the paper on the Energy Bill’s provisions, are to be,
“security of supply, affordability and low carbon”.
No one is arguing with that. It is fairly obvious that they are the basic three. The paper continues:
“As part of this, the Government will need to consider the guidance in the Social and Environmental Guidance that will be repealed by this legislation”.
I do not understand what that means. It is pretty vacuous and confusing. At the very least, a clear statement of what the Government intend as regards social and environmental guidance in the SPS is required before we allow the Bill to leave this House.
On a slightly peripheral issue, I am interested in whether the SPS might be a material consideration in planning applications, alongside all the planning guidance that is issued: the National Planning Policy Framework and the national planning statements on energy. Is it intended that the SPS will have any purchase at all on any other part of policy-making or decision-making apart from the regulatory system through Ofgem? If the answer is no, I would have to take that with a pinch of salt. If documents exist, people will use them and over a period of time they may well come to be found by a planning inquiry, for example, to have some value.
Does it also have any importance as far as licensing procedures and decisions are concerned for the approval of, for example, oil and gas exploration? Will the SPS be of any importance at all in, for example, licences for fracking for shale gas or anything else? I am trying to get at whether it is a very narrow document that is only about regulation through Ofgem, or will the Government accept that it will almost certainly be used in other areas?
Finally, I want to comment briefly on the role of the Secretary of State. I have huge admiration for the present Secretary of State for Energy, who seems to be a man of great competence and energy—if I can use that word—and is somebody I might follow into the jungle. But, the powers to be given to the Secretary of State—whoever that is—under the new system seem rather large. He will be responsible for compiling the statement of policy and strategy. He is already responsible for compiling the planning policy statements. Okay, those come through Parliament but he is still responsible for them. He is responsible for determining applications for development consent for all but the smallest energy-related planning proposals. It seems that he is the legislator, prosecutor, judge and jury, and no doubt when proposals are agreed he will be there urging them on as, I assume, not quite a clerk of works—but who knows?—and chief cook and bottle-washer. That really seems, in planning terms at least, an astonishing concentration of decision-making within one department and one Secretary of State. The checks and balances of good planning, and of good investment decisions, may be there if it all goes okay. If it does not go okay, then there may be problems to come.
Local environmental considerations are already firmly embedded in the national policy statements in the planning system. We may or may not agree with the details but they are firmly embedded there. Surely producers will make decisions—short and longer- term ones—based on regulatory regimes that they are subject to, themselves based on the SPS. Surely these environmental considerations should be embedded in the SPS as well.
Baroness Worthington
My Lords, I thank my noble friend Lord Judd and the noble Lord, Lord Greaves, for tabling these amendments. In terms of their underlying principle and the issues that have been raised, I have a great deal of sympathy with them. I was involved in the campaign to secure the Countryside and Rights of Way Act. I am a strong believer in the need to preserve our biodiversity and natural environment and the amenity of our unique landscapes. Both noble Lords were very eloquent in defending those unique and priceless assets, as they have been described, and raised interesting questions. I look forward to hearing the response from the Minister.
The noble Lord, Lord Greaves, highlighted the fact that we have considerable amounts of information in the public domain which guide where energy projects are located. Those are the national policy statements on planning, which are, as the noble Lord mentioned, considerable in their breadth and depth.
Lord Gardiner of Kimble
My Lords, from the outset I acknowledge the long-standing interest that the noble Lord, Lord Judd, has in the countryside and the impact of energy infrastructure on the landscape. The noble Lord referred to this matter at Second Reading. I know that my noble friend Lord Greaves also has a lasting interest in wild places.
As a countryman who cares about all these things very strongly, I understand where noble Lords are coming from. This is an important issue, and one that the Government recognise, which is why we have already put in place various safeguards within the planning and regulatory system to ensure that visual amenity and other sustainability issues are taken into account before decisions on infrastructure are made. Ofgem has a clear duty to contribute to the achievement of sustainable development; it must have regard to the effect on the environment of activities connected with the conveyance of gas through pipes and the generation, transmission, distribution and supply of electricity. It is also required to carry out impact assessments for important decisions, which would include consideration of sustainability implications, including local environmental impacts.
Amendments 41 and 46 would require the Government to undertake sustainability assessments of the policy set out in the strategy and policy statement before it is either designated or amended. Of course, it is important that the impact of regulatory decisions is assessed, but the intention of the strategy and policy statement is to reflect existing policy; it will not be a vehicle for the introduction of new policy or duties, nor will it contain any regulatory or planning decisions. The more appropriate time for consideration of the potential environmental impact of energy policy proposals is when they are being considered by the planning authorities—and I entirely understand what my noble friend Lord Greaves says about balance. Existing legislation, including in relation to the energy national policy statements, already provides the framework to ensure that this is done.
Amendments 42 and 50 would require Ofgem to show how it has complied with its general environmental duties to some extent in its forward programme work. Of course, I understand the noble Lord’s concern that Ofgem should take full and proper account of all its duties in drawing up its work plans.
The strategy and policy statement does not override Ofgem’s existing duties to contribute to sustainable development and, because of the requirement for Ofgem to set out its strategy for implementing the strategy and policy statement in its forward work programme, we believe that it will increase the accountability of the regulator. That is also reflected in the requirement to report annually on its contribution to meeting the strategy and policy statement’s policy outcomes. Indeed, the noble Lord, Lord Judd, referred to the question of the requirement to demonstrate compliance with Ofgem’s environmental duties. Ofgem will be required to report on how it contributes to meeting the policy outcomes in the statement. Existing duties will still apply and we would expect Ofgem’s report to take account of those and how they impact on relevant regulatory actions. I would also expect both the work plan and the annual report to cover the relationship between the strategy and policy statement, as well as Ofgem’s remit.
Amendment 42A would require Ofgem to have regard to the effect on the environment of activities connected with the conveyance of gas through pipes and with the generation, transmission, distribution and supply of electricity. Under the existing regulatory framework, Ofgem already has duties that require it to have such regard. Again, I refer to the point that the noble Lord, Lord Judd, made. That duty is imposed by the Gas Act and the Electricity Act and will still apply even if the guidance were to be repealed. As I have pointed out, nothing in the strategy and policy statement overrides those duties, which would continue to apply. Indeed, it is a reasonable expectation that the SPS will pick up on important parts of the guidance. In my view, Amendment 42A would therefore not be necessary.
The noble Lord, Lord Greaves, asked whether the statement covers oil and gas exploration. No, it would not. It applies only to Ofgem’s existing regulatory duties. Ofgem does not regulate oil and gas exploration and no changes to that are proposed.
Amendments 43, 44, 45, 47 and 48 would introduce formal requirements for the Government to consult specified interest groups in relation to the SPS. As has been referred to, the Bill already makes provision for wide public consultation as we develop the contents of the SPS. I reassure the noble Lord that we intend to engage fully with all relevant stakeholders, including, where relevant, those who represent an environmental perspective. Furthermore, Ofgem will consult on its forward work plan, which will include its strategy for meeting the SPS policy outcomes. That will provide another opportunity for stakeholders to express their views. In the light of that, we do not consider it necessary to name particular interest groups in the legislation.
Amendment 49 would require that, when the strategy and policy statement is laid before Parliament, it is accompanied by a statement explaining how it relates to other government statements on energy policy. The legislation already requires that the strategy and policy statement sets out the Government’s strategic priorities and other main considerations of its energy policy. It will therefore have to reflect existing policy and explain the context in which it is made.
To refer to a point that my noble friend Lord Greaves made about how the strategy and policy statement relates to national policy statements for energy, the SPS will set out the Government’s strategic priorities and policy statements in relation to issues where the Government consider that Ofgem regulation has a significant role, whereas the national policy statements deal with the development of nationally significant infrastructure in particular sectors—for example, energy and transport. They are the framework for decisions by the Secretary of State on applications for development consent orders for nationally significant infrastructure projects and may be a material consideration for local planning authorities when determining other infrastructure proposals. It is for these reasons that this amendment is unnecessary.
I hope that the reasons I have outlined have reassured noble Lords about why the Government do not think that this amendment, the intention of which is entirely laudable, is necessary. I hope that I have been sufficiently reassuring for the noble Lord to feel able to withdraw his amendment.
Lord Greaves
The noble Lord, Lord Judd, other noble Lords and I will read the Minister’s speech very carefully. There was some helpful stuff in it. I have two questions. First, given that we will have the whole summer before we return for Report, might it be possible to firm up the kind of thing that might be in the SPS referring specifically to social and environmental issues as the replacement, which it says that it is going to be, for the stuff repealed by Clause 126? Secondly, does the Minister accept that, despite the fact that the NPS and SPS have different roles and therefore different purposes, if they were in conflict in any way, even in quite detailed ways, that might cause problems because people would pick up one and quote it against the other? If the SPS is to reflect existing policy, in those areas where it covers the same areas as the NPS on energy—and it clearly will in some areas—does it mean that it will follow the NPS, that the NPS will be the superior document and that the SPS will simply reflect the NPS or is it more complex than that? If it is more complex than that, we might want to come back on this.
Lord Judd
First, I thank the Minister for his very courteous reply. It is very characteristic of him. Secondly, I thank the noble Lord, Lord Greaves, for his support, and I thank my Front Bench for the general good will in this respect. I hope this is not regarded as a point that is to be dismissed because it is seen as partisan. I was formed in the war and immediately afterwards, and I have always been very glad that the post-war Labour Government, whom I hold in high esteem, were pioneers in fighting for a lot of what I have been talking about today: the importance of countryside to people and the well-being of the nation. That flag was immediately and without controversy picked up and warmly endorsed by many in all parts of British politics, and that is Britain at its best. We must be very careful that we do not inadvertently let it erode to the point that what we leave to our grandchildren is not what it could have been.
I listened carefully to the Minister. As is always said, the devil is in the detail, but my concern is the whole thrust. I take second place to nobody in advocating the vital importance of taking on board the issues of climate change. They should be central to all parts of government. From that standpoint, if from no other, I am tired of aspirational politics about doing things and I want to see effective arrangements for achieving results. That is why I strongly associate myself with what was argued from this side of the Committee earlier about the need for targets and all the rest because we need to make effective progress. If we are successful in that, there will be tremendous drive from industry and others to get in on the act and play their part, and all credit to them for that as it is essential. That is terrific.
The Minister said that these things are more appropriately handled at the inquiry stage and at local level. I want to see the evidence that these other balancing factors are strategic to the Government’s position and thinking, and that nobody is in any doubt about where the Government stand on the vital wider issues that I have raised. That is where I have anxieties. This is not a partisan view because I had the same anxieties under the previous Administration. I want to see this issue become a driving force alongside the rest. People in specialist organisations take these issues seriously. I mentioned the John Muir Trust. I hope that noble Lords will get hold of its briefing, which I have used extensively, read it for themselves and meet people such as the personnel and staff of the John Muir Trust and others who argue their case well. Genuine officials and deeply committed public servants are putting their point of view from one angle and highly qualified deeply committed people in other parts of national life are as concerned about this issue as anybody else. I do not think that we take their concerns seriously enough when formulating policy. As an older politician in the House of Lords, I see it as my responsibility to make sure that those concerns are put in front of committees and legislators.
I will think very carefully indeed about what the Minister has said and will, of course—
Lord Greaves
Before the noble Lord withdraws the amendment, will the Minister comment briefly on the two supplementary questions I asked him?
Lord Gardiner of Kimble
My Lords, if the guidance is repealed, an environmental duty in the electricity Acts and the SPS will cover the same ground as is currently the case. However, I will reflect on what the noble Lord has said and will write to him if there is anything more constructive on which I can report.
Lord Judd
My Lords, as I say, I take very seriously indeed what the Minister has said and will consider it carefully before Report and think how to respond appropriately then. At this stage, in the way that we do these things in Committee—what alternative is there?—I beg leave to withdraw the amendment.
Baroness Worthington
“Role of the Authority
(1) The Secretary of State must publish a report on the regulation of the entire energy sector by an independent authority.
(2) A report under this section must be laid before both Houses of Parliament no later than one year following enactment.”
Baroness Worthington
My Lords, this amendment speaks to the setting of the strategy and policy statement required by the Bill. Part 5 is an interesting aspect of the Bill because it moves away from purely electricity and considers all energy matters. It requires that a strategy and policy statement be maintained and formulated for Great Britain’s strategic priorities in relation to energy policy. I stress that because, as we all know, energy policy is far more than simply electricity or gas but encompasses all the primary energy used to supply energy to businesses and consumers for heat, electricity and transportation needs. This may seem academic but it is important to stress this because time and again Governments have been tempted to equate energy with electricity. They often extend that to include gas but it is rare for there to be a holistic view of all energy. The establishment of the Department of Energy and Climate Change created a structure in which I had hoped that a more holistic view of energy could be developed.
However, there are still departments of government with responsibility for energy that sit outside the DECC framework, most notably the Department for Transport, and it is not quite clear how the Department of Energy and Climate Change relates to other departments that have an impact on energy policy. That is true at a departmental level.
At the regulatory level—this part of the Bill also deals with the independent regulator Ofgem and its duties—there is clearly a gap. I am encouraged that the setting of a strategic policy statement will, I hope, create a much clearer framework of who is doing what and who has responsibility for what. We have a regulator for electricity and gas, but it is not an energy regulator. The powers do not extend to the many consumers who are off the gas grid network and rely on unregulated sources of energy. Periodically there are concerns, which often reach the media, about people who have been forced to purchase from other suppliers and be completely dependent on that fuel in the winter months. There is no price regulation there.
Colleagues in another place have raised concerns over how non-domestic consumers are represented by our regulator. We tend to equate the regulation as being on behalf of consumers but that is a broad definition and there is a subset of consumers, the small and medium-sized enterprises, which are facing considerable issues. I hope that Ofgem’s remit will cover them and that we hear more about how they can be protected.
I have tabled my amendment to force the Government to consider the gaps in current regulation. That will become increasingly important, not least because, as we move forward with a low-carbon agenda, the three major energy markets—electricity, heat and transport—are starting to merge and cross over. The noble Lord, Lord Flight, last week tabled an amendment on the interplay between biofuels being used in the heat market and transport markets. These issues are becoming increasingly apparent. It is not just that fuels can be diverted into different markets but a process of electrification of transport and heat is underway. I do not know what all the issues will be as we go down this path but we should certainly have a regulator capable of looking across all the energy markets.
Another aspect to this that we hope the SPS will address is the creeping lack of clarity about the relative roles of the department and the regulator. I give just two examples. At the moment, there is a tendency for Ofgem to be involved in policy. Perhaps the most notable example of that is Project Discovery, Ofgem’s foray into the murky world of security of supply, which takes it well beyond the role of a price and market regulator into a policy arena in which the department should operate. On the other hand, the department is starting to act like a price regulator, with the Prime Minister starting to make policy on tariffs. We are shortly to hear a lot more about those proposals but it is clear that there is an increasing crossover and complete lack of clarity here. I hope that this SPS will help to address that.
My next point relates to how the commodity markets are regulated. This is an important issue because, as we have seen in the press in a number of cases, where there is potential for market abuse there needs to be a clear regulatory framework. In the commodity fuel markets, there is a lack of clarity on the distinction between where the FCA is involved in regulating markets and where Ofgem’s role starts. This will become a very important issue, not least because we are now considering a Bill in which we are placing quite a high degree of emphasis on reference prices against which we will be comparing strike prices. I have raised this in the very helpful briefings we have had in the run-up to the Bill. I was referred to the implementation of REMIT, a Europe-wide move to prevent abuses in the wholesale energy market, but I am not fully reassured by that. I have a number of questions in relation to it. Has it been implemented in the UK? When will it be implemented? The deadline for the introduction of penalties for abuse was 29 June. Have we implemented the penalties? Are we compliant with that European requirement?
REMIT goes only so far. When we are looking at a system that is highly dependent on market-based prices, I am concerned about who is going to ensure that the data that go into that process are comprehensive, holistic and not subject to abuse. In the oil market, we have heard of abuses by oil companies and about rating agencies colluding to provide only a small part of the information, not the full picture. If that is possible, do we not need to look at statutory underpinning for this information? How can we develop robust reference prices if the information provided to rating agencies is done on a voluntary basis and has no statutory underpinning? What are we doing to ensure that we have full and complete transparency in the data that are provided to develop these reference prices?
It will come as no surprise that our party is very critical of Ofgem. I have said that I do not think that the role of Ofgem is broad enough and have talked about the lack of clarity and the confusion about where the FCA’s role starts and where Ofgem’s role starts. The most worrying criticism of the regulator is that it is failing in its current remit. It is not acting to enforce fairness. Its process of reform started in 2008 and was evaluated in 2011. Of the 16 benchmarks set to compare progress against, 12 showed no improvement. That is simply not good enough. From 2008 to 2011 is a long period, and there was no improvement in 12 of those benchmarks. Ofgem is clearly failing in its stated purpose of enforcing fairness in the market.
Ofgem has failed to live up to expectations about transparency in the market. I know that this will come up in later parts of the Bill as we talk about access to markets and liquidity. In 2011, the accountants BDO issued a report, I think at the behest of the Government, looking at what could be done to improve transparency in the market. Eight recommendations were made. Of them, six were quietly dropped; only two were pursued, and they were varied from the original advice. This is a serious issue, and this is the part of the Bill where we talk about the authority and the role of regulation. We have very serious concerns about Ofgem’s remit and its ability to deliver on its current functions. Our policy would be to replace this regulator with a regulator fit for purpose to deliver proper regulation and to protect consumers now and in the future across the whole energy market.
Lord Gardiner of Kimble
My Lords, I am grateful to the noble Baroness for providing the opportunity for us to consider these matters further. My understanding is that Amendment 41A is intended to require the Government to publish a report on the case for introducing new regulatory arrangements for the wider energy sector as well as for gas and electricity within a year of the Bill coming into force.
It is true that matters such as the supply of heating oil or liquid petroleum gas do not fall within the energy regulator’s remit, but there are good reasons for this. A chief component of Ofgem’s remit is to regulate the monopoly companies that run the electricity and gas networks. No equivalent natural or structural monopolies for distribution or supply exist in other energy sectors, so the Government do not consider that there is currently a case for them to be regulated by Ofgem or a new energy regulator. We need to bear in mind that increased regulation would be likely to increase the costs for businesses operating in these sectors, which would probably be passed on to their customers. This of course would be a concern to domestic and non-domestic customers. I entirely agree with the noble Baroness; we must think of non-domestic customers and small and medium-sized businesses, which are so much part of the economic recovery.
Baroness Worthington
Can the Minister just say whether or not we have met the deadline of 29 June?
Lord Gardiner of Kimble
My instructions are that I will need to write to the noble Baroness. I am sorry about that but I have my riding instructions, as the noble Baroness can imagine. The noble Baroness also asked about the regulation of business consumers. Ofgem is taking action on issues affecting business consumers as part of the retail market review—for example, rollover contracts.
For the reasons that I hope I have articulated, I do not believe that it would be in the public interest for us to be undertaking the sort of work that the noble Baroness has suggested. I am well aware of her party’s views on Ofgem and the desire for a different arrangement but that is not the policy of the current Government. For the moment, while I am most grateful for the opportunity provided by the noble Baroness to debate these matters further, I hope that she might feel able to withdraw her amendment at this time.
Baroness Worthington
My Lords, I thank the Minister for his answers and for his offer to write on the specific details in relation to REMIT and the setting of the reference prices, which I believe are central to the Bill and may come up in subsequent debates.
It is rather amusing and ironic for the Minister to be praying in aid uncertainty as a reason for not moving forward on this; we have already had debates about the degree of certainty in the Bill, and this side of the Committee clearly believes that the Bill does not provide anything like enough certainty, which is exactly why we have the current hiatus in investment. I do not believe that sorting out proper regulation would cast a shadow over the markets; most people in the market accept that things need to be changed and fixed. If we have a regulator that has gone native, that is in no one’s interests—certainly not the consumer’s. I do not accept that argument.
On the question of extra cost, obviously all regulation has a trade-off between proper regulation and uncovering cost savings for consumers, against the additional burden of the reporting requirements on industry.
I urge the Government to look closely at the policy on transport fuels. One can dismiss it and say that there is no monopoly, but everyone who knows how that industry works knows that it is an oligopoly and that there is very little variance in pricing. There is also a severe problem of vertical integration in all these large energy companies, going up the chain to exploration and down to retail and the pump.
That is not to say that there is nothing to be looked at here. The opposite is the case. The issue has been overlooked for many decades and the time has come for the energy sector to be under the same degree of scrutiny in order to provide value for money for consumers. I do not buy the argument that this would lead to a net cost. You just have to look at the profits in some of these sectors to see that there is plenty of scope for prices to be brought down, with proper competition. That is what regulation should be about. I urge the Government not to be complacent and sweep this issue aside but to do some further work on it. I am happy to beg leave to withdraw the amendment.
Baroness Worthington
“Annual Energy Statement
(1) The Secretary of State shall publish a statement annually (“the Annual Energy Statement”) setting out inter alia—
(a) progress made on the delivery of the strategic priorities and policy outcomes under the strategy and policy statement;(b) future actions for the delivery of the strategy and policy statement;(c) implementation of other provisions within this Act.(2) The Secretary of State must report to both Houses of Parliament on the contents of that statement.”
Baroness Worthington
I have spoken on this theme before so what I say will come as no surprise. I consider this Bill to have wide enabling powers, with potentially dramatic consequences for the electricity market, but it is not matched with sufficient responsibilities on government to keep us informed of progress. This amendment would require that the reporting of the current annual energy statement, issued as part of a coalition agreement, become a legal requirement. If I am wrong and this Bill has some tough provisions for the Government to report on progress, I apologise and look forward to hearing that reassurance. However, in my reading of it, there are a lot of provisions to set strategy and forward plans, but little in the way of coming back to Parliament and reporting on progress.
The annual energy statement was a welcome document. It is not simply an electricity or gas report, but seeks to cover all energy including infrastructure and fuels, as we have just discussed. I do not see why the producing of such a statement should not be a requirement on government. It is not a lengthy document and I hope that it will not cost us too much argument. It is very important, we take this Bill forward with all the powers that it contains, that there is proper accountability to Parliament and the wider public. An annual energy statement, like the one that we have now had produced, is the bare minimum that we would expect to see in terms of reporting back on progress against the objectives set out in the Bill. I beg to move.
Earl Cathcart
My Lords, I want to say something about policy here. At Second Reading, I had three points. One was on the 4.5 million households in fuel poverty. The Minister has written to us today, saying that the Government will now amend this definition of fuel poverty; instead of having 4.5 million in fuel poverty, we have only 2.5 million, so that is all right then. The second thing was the price of fuel having doubled in the past seven or eight years and the prospects of it doubling again in the near future. The third thing was whether there was going to be a sufficient supply of power and what the Government’s current policy was to ensure that there would be.
Sorry, before I start, I was going to say this to the amendment of the noble Lord, Lord Judd, but I did not want to steal his thunder. I apologise to the noble Baroness, Lady Worthington, for coming in during her amendment.
The Government’s current policy is nuclear and wind, with imported gas as backup. However, why are we importing gas when we have our own shale gas, which we seem reluctant to exploit? Surely this is a gift horse that we must exploit. And why are we persisting with wind power when it is inadequate, intermittent and becoming increasingly expensive as we have to go more and more offshore into more expensive sites to build on them?
On the question of nuclear, we have yet to do a deal with EDF, which is, worryingly, the only player at the table. Even if we do a deal, any plant will take 10 years to build. We are told that energy supplies for Britain will be tight in the year 2016—there are scare stories of rationing and the lights going out. One would think that the Government’s policy would want us to generate ample power until the replacement sources were in place to ensure that rationing did not have to take place. However, what are the Government doing? They are closing down and taxing our coal-fired power stations just when coal is relatively cheap, just when Germany is proposing to build 20 more coal-fired power stations—are the Germans going to tax those out of existence? No—and just when China and India are about to built 800 more coal-fired power stations.
This seems to be a policy of closing down power stations before you have anything nuclear in place or any contract at the table. It is just like being in a job that one hates and wanting to move to another job: you do not give notice to your existing job until you have secured the new one. However, that is exactly what we are doing in Britain; we have given notice to coal before we have any nuclear in place. I just do not see the logic of that, and I hope that the Minister can explain finally what the Government’s logic here is.
Lord Oxburgh
Returning to the amendment, the message here for the Government is that with this Bill they are taking quite extraordinary powers, and those powers are going to have to be exercised to a degree that was probably not anticipated when the Bill was originally drafted, simply because we have run out of time to do things in a more orderly way. Whether or not we need annual reports, the important message for the Government to get is that, given that these extraordinary powers are there and will be required, that also imposes on the Government a requirement for an extraordinary and conscientious degree of reporting over that period.
Lord Roper
My Lords, like the noble Lord, Lord Oxburgh, and indeed the noble Baroness, Lady Worthington, in moving her amendment, it seems to me that, given that we have an annual energy statement, which is a useful document, it is not as if we are inventing a demand for a new document. The argument is always made that there would be costs involved, but on this occasion what is being asked is merely that something which already appears should become a statutory document. I therefore await with interest what the Minister has to say.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, I am extremely grateful to the noble Baroness, Lady Worthington, and to all noble Lords who have contributed to this debate. Before I turn to the amendment, I should say to my noble friend Lord Cathcart that while his comments were not related directly to the amendment, I take note of his concerns and hope to respond at relevant junctures in the Bill. I am sure that the noble Earl will be satisfied that I have not sidetracked his concerns but will respond to them as the Bill progresses.
The Government agree that it is of great importance that Parliament is provided with updates on energy and climate change. This is particularly important, given the significant changes that we are making to replace closing infrastructure and to decarbonise the economy affordably. That is why we committed in the coalition agreement to giving an annual energy statement to Parliament to set strategic energy policy and guide investment. We have met this commitment every year since 2010 and we will be making this year’s statement to Parliament in the autumn.
I am not totally convinced that there is currently a great need to create more legislation for such an issue when we are already delivering on our commitment to update Parliament. In addition to this, DECC also reports to Parliament specifically on security with the Statutory Security of Supply Report. Furthermore, on Report in the other place, we introduced a statutory annual update on EMR. Finally, we also report on climate change via the government response to the Committee on Climate Change’s annual report, and on fuel poverty via the annual fuel poverty statistics. It is the annual energy statement that brings all these strands together.
I understand that the commitment made by this coalition Government is not guaranteed to be upheld by any future Government, and I therefore see some merit in ensuring that future Governments make a regular statement for Parliament and investors alike. It will therefore be wise for me to undertake to consider this further, ahead of Report. As part of this year’s annual energy statement we will of course be updating Parliament on the progress that we have made across the entire energy spectrum, including on the Green Deal, smart meters and climate change, as well as on the matters in the Bill. It will therefore include EMR and the strategy and policy statement, to which the noble Baroness has referred.
Ofgem will be required to report to Parliament annually on the extent to which it has contributed towards meeting the policy outcomes set out in the strategy and policy statement. The Bill requires this information to be included in the annual report and it is already a requirement that the report is laid before Parliament. This requirement already provides sufficient accountability and transparency in respect of the strategy and policy statement. I hope that the noble Baroness has found my reassurances and explanation useful and will withdraw her amendment.
Baroness Worthington
I thank the noble Baroness for her response. I am encouraged that that there are reporting requirements of which I was perhaps unaware, particularly the statutory requirement to update on the EMR. I should be grateful for further details on that. The statutory requirement on Ofgem to report does not do what the annual policy statement on energy strategy does because, as we have just discussed, Ofgem merely looks after a subset of the entire energy policy and it is just the department that is across all the issues. In the Annual Energy Statement, you will notice paragraphs on transport fuels, transport infrastructure, electrification, biofuels and the like, over which Ofgem has no oversight. I am encouraged that Ofgem will be reporting—that is great—but it does not do what the amendment does. However, I am happy to withdraw the amendment and look forward to hearing a little more about the EMR report. I am encouraged to hear that the noble Baroness is prepared to consider this amendment, or something like it. I beg leave to withdraw the amendment.
Lord Whitty
“(f) provision for requiring or allowing a licence holder to offer a particular form of tariff designed to—(i) reduce the incidence of fuel poverty;(ii) reduce total energy consumption or increase conservation;(iii) change the time profile of energy consumption.”
Lord Whitty
My Lords, I will also speak to the other amendments in this group. We now come to what is probably, in the outside world, the most important part of the Bill. We had a huge discussion on nuclear regulation and a very substantial discussion on issues relating to carbon targets but the millions of people out there are concerned about—I agree with the early part of the noble Earl’s remarks just now—the very rapid doubling of prices for fuel and the more than doubling, on the old measure at any rate, of the level of fuel poverty. That is what the consumer dimension and the consumer objectives of energy policy, among all the others, need to address.
The original Bill did not include Clause 127. It is a fairly hefty clause, with three clauses after that following it through, but it is nevertheless a pretty thin part of the totality of the approach to energy policy represented by the Bill. It owes its genesis almost entirely to a remark by the Prime Minister in October last year when he effectively promised that everybody would be on the lowest possible tariff. There was some consternation at the time in the noble Baroness’s department and Ofgem about what the Prime Minister actually meant by that. Ofgem rapidly engaged in some internal work, some of which was very welcome. It is now engaged in two consultations on how to put that into effect. Clause 127 gives effect to some of the issues covered and recommended in the Ofgem consultation.
However, the clause does not really deliver the Prime Minister’s objective. It probably delivers some greater transparency and certainly delivers a very welcome requirement on reducing the extraordinarily confusing number of tariffs that consumers face at the moment. But underlying it, it betrays—as my noble friend implied just now—a huge lack of trust in Ofgem to deliver this. Clause 127—probably correctly given Ofgem’s present state and record—is full of subsections allowing the Secretary of State effectively to intervene and tell Ofgem what to do.
There are delicate issues of independent regulation here. There are important issues as to where policy lies in terms of the department as against the regulator and where legislation lies as against secondary legislation and Ofgem’s own rules. It is an odd approach in many ways. However, given the deficiencies of regulation in terms of consumer benefit, it is not one I entirely reject, but if we are to go down that road we need to be clear why we are giving the Secretary of State such powers of intervention. In another context, and in relation to, for example, the statement of policy, the Government wish to step back and give the regulator, in this sector as in others, a general framework to act on for five years. This clause gives the Secretary of State the ability to intervene at all sorts of points on all sorts of issues in all sorts of ways, but does not really explain for what purpose. Subsections (5) and (6) of Clause 127 lay down the way in which the Secretary of State could intervene, but no part of Clause 127 explains for what purpose.
My amendments today are to try to establish that purpose and thereby to achieve what I think was behind the Prime Minister’s intervention, which is that every household should, as far as practicable, know the most appropriate tariff for their circumstances or that there should be an obligation on their supplier to ensure that they know it. Whether that is always the cheapest tariff depends a bit, but it is certainly not delivered by Clause 127 as it stands or by current Ofgem practice.
In a sense, I am taking the Prime Minister’s text and trying to give the Secretary of State basic objectives for intervention which would help to achieve the objectives we seek, in particular, the ability to intervene in order to ensure more economic use of energy in terms of energy conservation, energy efficiency and decarbonisation and to ensure that tariffs are more affordable, at least for domestic consumers—there are also industrial consumers who do not really feature here, even microbusinesses, which also need to be addressed—in terms of affordability in general and fuel poverty in particular.
Obviously, I have not had time to absorb the full impact of the Secretary of State’s intervention on fuel poverty strategy today. As the noble Earl said, redefining a problem does not make it go away. However you redefine fuel poverty, it is always a very big number. At the moment, it is going up seriously. While some of the changes in definition that underlie John Hill’s recommendations, which the Government seem to have adopted, are quite sensible—there is a total income gateway to being defined as fuel poor whereas on the previous formula some very rich people could have been so defined—that is a relatively minor point. The problem about the redefinition, which the Government, Ofgem and all of us who care about fuel poverty will have to address, is that whereas the previous formula was arguably far too sensitive to price movements, the present formula is very insensitive to price movements, yet price movements are what define whether you fall in or out of fuel poverty. With insensitivity to price, it is going to be quite difficult to shift that new total so the aim of reducing fuel poverty will prove more difficult.
I am trying to help the Secretary of State here, at least to have some clarity about what powers of intervention he has on fuel poverty and other issues. Clause 50A allows the Secretary of State to require Ofgem to put a requirement on a supplier licence to require tariffs aimed at reducing fuel poverty, for example, tariffs aimed at low-income households or associated with energy-efficiency measures to reduce the totality of the bill, probably funded via the ECO. My amendment also allows for tariffs aimed at low users or at low-income, high-use households. These tariffs would be options. They would not be mandatory over the whole range of tariffs and therefore they would allow Ofgem to require and the supplier to allocate people to the most appropriate tariff for their circumstances, which must be the aim of this policy.
There are all sorts of ways in which you could require a tariff which encouraged energy efficiency, in aggregate or in timing of energy use. For example, you could have a different range of tariffs where the marginal cost of the next unit of electricity was higher than the average cost. In almost all tariffs now the opposite is true. You could, as the Select Committee on which I sit heard from the Belgian authorities a few months ago, make it so that the opening tranche of initial units was free until you hit a certain minimum usage, and then there would be very high disincentive if you went beyond that level. You could have the whole structure of rising block tariffs, which is one way of doing it. All those methods would encourage behaviour and energy usage that reduced total energy usage and bills.
The Deputy Chairman of Committees (Lord Haskel)
I have to inform your Lordships that in Amendment 50H, which is part of this group, there is a misprint. It should read:
“Page 99, line 41”,
not “line 40”.
Baroness Maddock
My Lords, I am very grateful to the noble Lord, Lord Whitty, for tabling these amendments and have a great deal of sympathy with the points that he made. One of his opening questions was on why we are having to change the system and give the Government more powers, and perhaps change the role of Ofgem. The answer is because competition has not worked in the interests of consumers. That is what we are trying to grapple with to see whether we can do something better. Let us hope that we can.
I am also grateful to the noble Lord because, when these amendments were introduced in the Commons, they were accepted with little or no debate. Therefore, it is important that the Minister here is given more opportunity to tell us how they will work. I wish to ask one or two questions. Interestingly, some of them, and the points that I shall make, arise because I was speaking in Newcastle last Friday morning at a conference of CAN, the Carbon Action Network, which grew out of the HECA organisation that came from the Act of Parliament that I got through.
Some interesting points were raised at the conference. One of them, made by a lady, was that people think that we are asking energy suppliers to offer the cheapest variable rate; but she also made the compelling point that some customers would like the cheapest fixed rate. This lady works with clients trying to help people get a better deal. She said that since last winter, which went on for ever and during which we all burnt more fuel, older people in particular have become even more concerned than before about their bills. She thought that we should have a measure on this point in the Bill. I am not a lawyer and cannot always understand the jargon in the Bill so I am not clear whether it enables that to happen. I hope that the Minister will explain whether it does.
The lady tackling me on these issues on Friday is the energy and affordable warmth officer in Redcar and Cleveland. The other interesting point that she raised was how the change in demand for certain types of tariff will work, particularly the warm homes discount. She spends a lot of time working with clients, many of them in fuel poverty, trying to help them get a better deal. She said that this year there were huge differences in the criteria that the energy suppliers were using to decide whether people would get the warm homes discount. She has found that the big six have all changed their criteria. Some cover low income and others means-tested benefits only, such as income support, jobseeker’s allowance and employment and support allowance. Some look at non-means-tested disability benefits or personal independence payments while others look at things such as eligibility for school meals and maternity and medical exemptions. Again, I would be interested to know how the Minister sees these proposals working with other things that the Government have proposed such as the warm homes allowances under ECO. At the conference there was somebody from E.ON who tried to explain how this worked. I am hoping that either today or at another point the Minister will be able to help us understand exactly how these proposals work with other things.
From what I have managed to look at in the fuel poverty booklet that I picked up today, it may be appropriate to discuss some of these issues when we come to discuss the fuel poverty amendments because some of those issues are mentioned in the booklet. One of the things that the Secretary of State is looking at in proposing to take fuel poverty more seriously is the way that everything interacts together. I did not know before we had this debate today, or in what happened on Friday, that today we would have a whole booklet about fuel poverty so I am quite happy if the Minister does not answer all the points now because there will be an opportunity when we get to the fuel poverty amendments.
Earl Cathcart
My Lords, I think that my noble friend Lord Whitty and I have spoken about fuel poverty on all three Energy Bills produced by this Government. We both feel the same: the Government need to do something to address this. Unfortunately, the Government just put it in the “too difficult” file and nothing has been done about it up to now. If fuel poverty has doubled over the past seven or eight years and the prospect is that it will double again over the next few years, it really is time that we did something to address it. We cannot just leave the increasing number of people in fuel poverty to stew in their own juice. I see that there are amendments on fuel poverty later. I hope that they will help address the situation. Unfortunately, I do not think I will be here for that debate but I will certainly read it with great interest.
Lord O'Neill of Clackmannan
My Lords, I congratulate my noble friend on taking us through this tortuous issue with great clarity. I declare an interest as one of the vice-presidents of National Energy Action, as is, I think, the noble Baroness.
Lord O'Neill of Clackmannan
Given the large sums involved and our positions as members of that body, we must do that. There are various elements involved in fuel poverty: the condition of the house, the circumstances of the individual householder and the nature and size of the energy tariffs that the individual has to pay. Very often, people in fuel poverty are in comprehensively complicated social circumstances and the complexity of the tariff system just adds to their confusion. Quite often, they do not know what they are paying for. Quite often, they do not understand the bills. Invariably, they are unable to make full payment. If they are on the payment meter system—as has already been said—they pay rather more for the privilege of paying as they go but that normally enables them to self-disconnect, in the sense that if they cannot afford to pay they do not use electricity.
One of the statistics that is never given proper examination in arguments about privatisation is that we say there are not the disconnections that there were under public ownership. That is because nowadays people self-disconnect. There was a time when, certainly as a young Member of Parliament, I had a succession of cases where I would intervene with the nationalised industry, the utility, to ensure that the gas or electricity was restored and some kind of proper payment system introduced. In some respects, you might say that for a Member of Parliament that is a chore they no longer need to carry out but it was certainly one that enabled people to come to terms, at least for a period, with the straitened circumstances of fuel poverty. What we have to do here, regardless of the off-the-cuff remark from the Prime Minister, which I am sure he regrets having made—not because he did not believe in it but because of the complexity of the issue; this is a classic case of unintended consequences—is to take advantage of the legislation to make the tariff system for electricity intelligible, simple and, I hope, more affordable. My noble friend has addressed a number of the challenges that that remark presents to us.
We know that in some respects there has been a major shift. There has been the publication of a report, which I confess I have yet to read, and amendments, in which we will all take great interest. It is fair to say that the Hills report was a wee bit of a curate’s egg, but there are always problems with the oversimplistic definition of the 10% rule. Perhaps we can get a change in the definition that enables us to target and prioritise. I know that those are the kind of words that people like to use in these circumstances. In the previous debate, we discussed having an annual report on energy. We will be looking very carefully, maybe not next year but the year after next, when a number of these amendments will have kicked in.
It is important that we have a debate like this and that we get from the Minister a clear picture of the Government’s thinking in relation to tariffs. The remedies for fuel poverty in a broader sense will be debated later, but people know well enough that serious near-criminal activities have been undertaken by the oligopolies. People say that the market works, but it has not worked; it has been abused consistently and methodically by cynical people who at the end of the day pay the fines in the certain knowledge that we as consumers then have to make our contribution to the compensation of the poor shareholders, who have been happy to have these chancers running these businesses. That is where we are coming from on this; a group of cynical manipulators of the tariff system have made the plight of disadvantaged people even more disagreeable. The rest of us can probably say, “It serves us right—we should be looking after ourselves”. However, a lot of vulnerable people have not been given any protection by the market, and we are now looking to the Minister and her response to this debate to tell us how we are going to get tariffs that people can understand and perhaps pay a little more easily than they have been able to in the past.
Baroness Verma
My Lords, I thank the noble Lord, Lord Whitty, for his amendments relating to this very important area in the Bill. Like him and all noble Lords, I share huge concerns that the most vulnerable tend to be the ones who do not benefit from what should be a system in which they are able to easily access information. That is why I am going to start my remarks by responding to the noble Lords, Lord O’Neill and Lord Whitty.
When the noble Lord, Lord Whitty, opened his remarks he said that the Prime Minister threw this upon us. The Prime Minister, this Government and this department are all at one in making sure that we put into place a system that enables consumers to have choice, to be able to make decisions and to understand what they are paying for. The noble Lord cannot have it both ways; we want to have a stronger regulator and the Secretary of State therefore has to have a duty to ensure that the regulator has the powers to enforce. Of course, it is necessary to let the regulator be independent and do the job that it should be doing, but the real issue is that this is not a new issue; it is one that has blighted Administration after Administration. My noble friend Lord Cathcart said that time and time again we have failed. We bring in Energy Bill after Energy Bill or some form of Bill to try to address these issues, and we do not seem to be able to do it.
I hope that through this Bill, the powers that we are taking, the powers that we are giving to the regulator and the legislative framework that we are introducing to redefine fuel poverty, we can start to address some of the root causes of why we cannot get on top of something that I know every noble Lord in this Room is passionate about. Providing statistical backing to the Energy Bill has served to focus minds on avoiding delay in the implementation of the retail market reforms that Ofgem is introducing. Ofgem has committed to reviewing the RMR package of measures by 2017 to ensure that it is working efficiently. In addition, we will be able to check.
I shall speak to the noble Lord’s amendments as they came up, and then I shall answer some of the questions that the noble Lord raised. Amendment 50A would give the Secretary of State power to require licence holders to offer particular tariffs that are designed to reduce fuel poverty and energy consumption and to encourage consumers to use energy at off-peak times. We have a competitive energy market and we are looking to increase competitive pressure through these reforms. I understand the noble Lord’s desire to see the issues set out in Amendment 50A addressed, but I assure him that the Government are doing so, though through means other than mandating suppliers to provide particular tariffs. I shall quickly run through them. We are increasing energy efficiency and conservation though ECO and the Green Deal. We are facilitating consumers to change the time profile of their consumption through the rollout of smart meters. We are already addressing fuel poverty by reducing the bills of vulnerable customers with the warm home discount, and I shall touch on that a little later.
I hope that noble Lords will also welcome the amendments to this Energy Bill that the Government have brought forward specifically to address fuel poverty. We will come to them later in our Committee’s consideration. These are all important areas, and we are addressing all the concerns that noble Lords have raised with me in the Room and outside it. We do not think that mandating particular tariffs in a competitive market is the way to do it because ultimately the market has failed to provide that, as the noble Lord, Lord O’Neill, said. We need to make sure that we place a duty upon suppliers to ensure that consumers are able to generate the competition that suppliers need to be working towards to be able to give consumers the option to switch to a different supplier if they are not being served properly.
Amendment 50B seeks to require that tariffs offered do not discriminate between different methods of payment except where there is a clear reflection of differing costs or differing debt levels. We should guard against suppliers discriminating between customers using different payment methods. That is why standard supply licence condition 27.2A states:
“Any difference in terms and conditions as between payment methods for paying Charges for the Supply of Electricity shall reflect the costs to the supplier of the different payment methods”.
Ofgem’s proposed licence condition changes for the retail market review do not remove or alter this licence condition. We would not intend to alter it were we to use these powers to implement the proposals. The noble Baroness, Lady Maddock, asked whether consumers can be put on the cheapest fixed rate. Yes, they can if they chose to. It would be the cheapest tariff in line with the preferences that they decided on.
Amendment 50D would have the effect of requiring suppliers to include a signpost to the unit cost of each tariff on bills alongside the cheapest tariff message. I fully support the principle behind the noble Lord’s amendment. Improved transparency and information provision are key to helping consumers engage with the market, and that includes providing information about unit costs. However, the improvements that Ofgem is delivering through its retail market review will ensure that consumers have all the information to make those decisions. We are giving legislative backing to these proposals, which require suppliers to summarise these costs in a single figure in order to aid comparison. That figure will appear on bills and other regular supplier communications.
The noble Lord, Lord Whitty, mentioned the TCR, the tariff comparison rate. We think that the TCR is a useful prompt to encourage consumers to engage. Ofgem’s proposals are clear that the TCR will be indicative and based on typical energy consumption. It is intended as a prompt, a call to action. During the course of any sale, suppliers will also be required to give all consumers a personalised quote based on their consumption, which will tell them how much they will actually pay.
The Earl of Caithness
My Lords, my noble friend has given a comprehensive reply, for which we are all grateful. This is an issue that is hugely emotional, among other things, because it affects the poorest in our society. When we talk about all the things that the Government are doing, such as the tariffs and the Green Deal, I hope that the Minister will bear in mind the need for simplicity. I have just received my latest electricity bill—that is all I receive in the north of Scotland; there is no mains gas or anything like that—and it runs to about five pages, which is enough to put anyone off. Luckily I can print it off but, if I were among the poorest, on getting a bill of five pages of complicated jargon, whatever you made the lowest tariff or whichever options the noble Lord, Lord Whitty, wants, with the variations that there could then be on the bill, I would be terrified by that. I hope that my noble friend will realise that what we want is simplicity and clarity so that the bill is not a terrifying bit of paper for people.
Baroness Verma
I am extremely grateful to my noble friend for that intervention. I agree that we have to make this accessible and consumer-friendly, and part of that will be ensuring that suppliers make the information as easily accessible and simple to understand as possible.
Lord Whitty
My Lords, I am grateful to noble Lords who have taken part in this debate, and particularly for the interventions by the noble Baroness, Lady Maddock, my noble friend Lord O’Neill and the noble Earl, Lord Cathcart. I think we all recognise that this is a difficult area. The proposals today, which I have not yet read and which we will no doubt be able to look at on Thursday when we come to the Government’s fuel poverty amendments, have a significant bearing on this area.
This is not just about fuel poverty, although that is an important dimension. It is about consumer confidence and understanding and making what ought to be a competitive market, even though it is run by oligopolies, actually work for consumers—for the average bill as well as the bill of the poorest families. The fact is that neither actually gets the best deal at the moment. The objective of trying to ensure that every household, whatever its income, status or pattern of energy use, can relatively easily understand what the best tariff is for it and that there is an obligation on the supplier to ensure that they do so is an objective that we all share, but it is not an objective that is operating in the market at the moment. That is not an outcome of years of regulation, nor of the I do not know how many energy Bills I have sat through from various Governments, nor of how the supplier companies are actually behaving.
This is a very important clause. It must be a very important part of the Government’s armoury in explaining energy policy to consumers, and we have to get it right. The Minister explained that we do not need the three-year limitation on Secretary of State interventions because this is all going to finish by 2018, by which time we will somehow reach Nirvana whereby the regulator is working and the outcomes that we all wish to see are being delivered. I have to be a bit sceptical and go back to what my noble friend said on an earlier amendment: the record of Ofgem in this area and the relationship between Ofgem and the successive departments has not been good. A radical change is probably needed here that goes beyond this clause, but this clause, if properly interpreted and amended, could take it a little further in the course of this Bill. I do not think we are quite at that point yet.
We need to be clear that some of the interventions that the Secretary of State is going to have to take, at least in the short term, are along the lines of the amendments that I have proposed—for example, an intervention on grounds of encouraging energy efficiency. It is true that there are other measures in the Government’s armoury to deal with energy efficiency. I know that the Minister and I do not entirely agree, but as yet the ECO and Green Deal are not effective. They may be in three year’s time, but they are not effective now. The warm home discount, although highly helpful to lots of fuel-poor families, is effectively an override on bills and tariff structures that are not appropriate for fuel-poor families. That is not necessary in the long term. I hope we keep it for the next two or three years, but in the long term, it is not the most appropriate way of dealing with fuel-poor families. You need different overrides.
On transparency and unit costs, I would have thought that the noble Earl, Lord Caithness, was a fairly canny consumer, but the fact that he finds himself totally incapable of understanding even page 1 of his five-page bill indicates the kinds of problems that most consumers have, middling consumers as well as fuel-poor ones. Something closer to the unit price requirement is important. The Minister needs to look at what the consumer is saying here and to come up with a scheme that is useable by the bulk of consumers, including not only the noble Earl but also those who suffer seriously from fuel poverty but who have the nous to try to make some choices of their own.
It is also important that a bill is accurate. Although there have been some improvements, at the moment most bills are estimated, which means that they are wrong. If you complain about them, it is very difficult to get satisfaction. In the long run, smart meters and everything else may solve this problem, but at the moment, there is serious consumer detriment as a result of the way in which bills are presented and enforced. It is very difficult to argue with the company supplying your electricity. It is therefore important that we can intervene to make everything a lot clearer.
I am not suggesting that the Minister should accept every word of my amendments, but she and the Government should accept that there is a need for more sharpness in the interventions that we are now proposing in order to deliver the objectives of energy policy which, by and large, we all broadly agree. Consumer affordability and tackling fuel poverty are part of that, but so are energy efficiency, energy security and ensuring that all energy users are treated fairly without discrimination. All those things need to be part of a proper regulator’s normal method of operation. They have not been. The market has not delivered them and the regulator has not delivered them. A new start for the regulator and a new context in which it is working perhaps might. Clause 127 needs at least to be strengthened in order to increase the possibility and the probably of that outcome. In the mean time, I commend my amendments to the Minister and beg leave to withdraw Amendment 50A.
Baroness Maddock
Baroness Maddock
My Lords, my amendment uses nice, simple words. As I said earlier, I am not a lawyer and not very good at this. I discovered that in Schedule 14, page 200, line 43, there is a rather more flowery way of putting it:
“publishing the statement in such manner as the Authority considers appropriate for the purpose of bringing the statement to the attention of those consumers”.
I found that after I had made up my simple amendment, which, luckily, was accepted. It is quite interesting that my noble friend Lord Caithness made exactly this point in his intervention in the previous series of amendments.
Like my noble friend, I am interested here simply because of the bills that I, my friends and my 94 year-old mother have had. You look at them. We have sometimes changed our supplier, and when we got a condensing boiler for the first time—we are on to our second as the first one burnt out—I tried to work out how much gas we were saving. That was difficult. I am an A-level mathematician and I still could not work out with ease whether we had saved. I worked it out in the end but it was very complicated. Gas is the most complicated because they use therms and things that make it much more difficult.
It is from that standpoint that I am concerned. If we really want people to get the best tariff, to understand what they are doing and how much energy they are using and to use less energy, we need better bills and better formats. As the noble Earl said, bills can run to five pages. Sometimes I have had four pages. You also sometimes find that you have something on the first page and then on the third page it is something quite different.
The other thing that concerns me is something that I mentioned at Second Reading. As someone who has produced political leaflets for years, I was told by people who had carried out research what to do if you want to get your message across: where it is on the page, what sort of type you use and the colours that do not work. If there is yellow print on top of something, older people cannot read it at all. There are all sorts of things that surprise me about the way in which companies, the big six particularly, produce their bills. I remember British Gas coming to me and showing me a bill saying, “Isn’t this good?”. I said, “Well, actually, no. The thing you want is not in the place where people look first on a page”. This is quite important. It is difficult to prescribe—you cannot prescribe in that much detail to the energy companies—but it is important that we try to ensure that it is simple so that people can understand it and really compare. They, particularly elderly people, must be able to read it.
Quite a lot of us are older now. We cannot read tiny print in the wrong colour. That is why I put down the amendment. It may not be appropriate at this point in the Bill, I do not know, but it seemed to fit in with what was going on. These might not be the right words but I think that everyone will understand the sentiments. It is quite clear that other noble Lords share those sentiments. I hope that the Minister can give a reasonably positive reply to my amendment. I beg to move.
The Lord Bishop of Chester
My Lords, if I may make a brief contribution here, I get electricity to my home, which is also in Scotland but in the southern part, from a Scottish company. I have tracked the way in which the bills have developed over the years, and it is a sad fact of the modern age that the more information you can provide, the less informative the document often is. This is partly a feature of the digital age in which we live; the more e-mails we get, the less we understand about the world around us, and so on.
There is one particular matter on which I would like the Minister to offer some reassurance: the various government obligations that arise out of climate change policies. We may have different views about the importance of those policies, but there really should be clarity in bills about just what the government obligation element is. There is the 5% VAT but there is also another percentage that is going up quite steadily and rapidly, and I think that should be listed.
The company I have mentioned, which I shall not name, used to do that. The bills were shorter but they said, quite simply, “Government obligations”, and gave an amount. Now, for some reason and I do not understand why, the company has hidden that information. You can find it if you dig around, but I hope that these bills, in addition to the unit cost—the actual cost of the energy—and the VAT, list as a discrete amount what we consumers are asked to pay to subsidise wind farms or whatever, in the interests of transparency. As I say, I have seen a particular company, for whatever reason, perhaps inadvertently, move backwards on this issue. I hope that this can be taken on board in the interests of clarity and transparency.
Lord Jenkin of Roding
Is the right reverend Prelate asking that this should be a separate figure in pounds and pence on each consumer’s bill? At the moment, on my bills those figures are all given as percentages of the whole bill. Government environmental obligations come out at 11% of whatever the amount is, and one is able to work out what that is in relation to the bill. I would like to know what he is actually asking for.
The Lord Bishop of Chester
I am all in favour of both. You should be able to put the percentage and say what that percentage is. That is just two parts of one line, isn’t it? The noble Lord has mentioned 11% but the figure that I had in my mind was 7% or 8%. However, I think it will be going up to 15% before long on the track that we have. If we are worried about fuel poverty, and we all are, I would be quite interested to know how many people are put into fuel poverty by these precepts on the energy bills. That is a factor that we have not considered. Still, that is by the by. I just think we need clarity and transparency in an easily understandable way.
Baroness Maddock
On the point about percentages, we need to be careful. Surveys have been done, and the noble Lord, Lord Whitty, probably knows this, which show that the understanding of percentages in the vast majority of the population is not very good. They would probably understand better how much of their bill they were paying rather than a percentage.
Lord Jenkin of Roding
When I first went to the Treasury in 1970, one of the things they said was, “You’ve got to realise that 50% of the population does not understand what 50% means”.
Lord Teverson
Do we know which 50%? That is the question.
My noble friend Lady Maddock is being too modest. When we went through the Green Energy Bill we encountered some really strange language. We asked why it was written in that way, and it turned out it was supposed to be written in plain English—in a way that people would understand. Actually, this amendment is perfect for what it should be. The draftsman has written it in a clear and easily understood format. That is exactly what it should say, and I hope that the Secretary of State, the Minister and the Government will see a way to bring it in.
Lord Whitty
My Lords, I have two issues. First, I support the clarity referred to by the noble Lord, Lord Teverson, that is promoted by the amendment proposed by the noble Baroness, Lady Maddock. Secondly, there are issues relating to the cost of carbon, and so forth, which need to be reflected in energy bills, but I am not sure that I would agree with what the right reverend Prelate says in how we present that. There is a cost to all of us of carbon and to isolate it separately in a crude way would not necessarily improve understanding. The Government would have difficulties in that respect.
On the consumer issue, I would just mention the survey about unit pricing that I referred to under the earlier group of amendments. On the question of percentages, the public do not understand APRs when they take out loans, so they will not understand TCRs in relation to this operation. The Which? survey shows that three out of 10 people using the tariff comparison rate found the cheapest rate whereas more than 80% found the best comparison when they were demonstrated by unit prices. So the use of clear figures but not necessarily percentages will help in that regard, and I support the noble Baroness, Lady Maddock.
The Lord Bishop of Chester
Can I just come back on this point? What I wanted was for the government obligations to be listed. One justification for these green taxes is that it saves money in the long run because of this, that or other theory. However, when the Government themselves impose a financial tax or precept, or whatever you want to call it, we should all surely want a degree of transparency about it. Then there is an argument about whether it is justified because of other long-term savings. The danger is that if you hide these things away you cause the lack of confidence in consumers that the amendments that we have discussed are precisely about.
Baroness Verma
My Lords, noble Lords must forgive me for trying to step in before the noble Lord, Lord Whitty. I am extremely grateful to my noble friends Lady Maddock and Lord Roper for their amendment. This is a follow-on from our previous discussion. My noble friend Lord Caithness rightly then ensured—and continues to ensure—that this debate around simplification and clarity is high on the agenda. The amendment proposed by the noble Baroness tries to lay that out in simple terms, saying that the information provided as part of a message on bills, annual statements and other communications detailing the suppliers’ cheapest tariff must be provided in a clear and easily understandable format.
Ensuring that consumers are provided with clear and simple information regarding their existing tariff and others available to them is one of the key aims of the powers in question and Ofgem’s retail market review. A power to require suppliers to provide consumers with personalised details of the expected cost of a given tariff and information on the supplier’s cheapest tariff for them is one of the means by which this will be achieved. That consumers should receive information about tariffs in a clear and understandable way is something that we have made plain to suppliers as being central to our proposals. Should it become necessary to use these powers, we expect to set this out explicitly within the actual amendments to suppliers’ licence conditions. Indeed, Ofgem’s proposed changes to suppliers’ licence conditions to implement the RMR already include such provisions. Standard licence condition 31E, once amended, will set out specific plain and intelligible language and presentation requirements for information provided to customers. We have always been clear that we expect suppliers to provide information to consumers that is clear and understandable. However, if noble Lords feel that we have not been clear enough then we are happy to consider this matter further and return to it on Report.
In response to the concerns of the right reverend Prelate the Bishop of Chester, I sincerely understand his desire to see clarity on bills, but that is up to suppliers to do. Ofgem can direct, but it is actually for suppliers to do it. Somewhere I have a note on this that I have now conveniently lost. Ofgem is producing factsheets that provide a breakdown of the costs that make up a typical energy bill. We are aware that some suppliers are already providing this, and the right reverend Prelate mentioned that there may be one that he would not mention by name. We do not hold comprehensive data on each individual supplier’s approach. Maybe that is something that Ofgem needs to look at. Given that I am taking this matter away to consider it further, perhaps this is something else that I may reflect on. I hope that my noble friends will find my explanation reassuring and withdraw the amendment.
The Lord Bishop of Chester
May I probe the Minister’s position in this way? Can she give the Committee any reason why there should not be a requirement on energy companies to provide a line that simply says what the Government’s tax or obligations are? I cannot see a reason why that should not be done. As she says, some suppliers do it but some seem to change their policies. Given that the amounts are already significant and will be even more significant before long, the bottom line, as the noble Lord, Lord Whitty, began his speech by saying, is that the most important thing to people outside this Room is how much this costs.
Baroness Verma
As I have said to the right reverend Prelate and to the Committee, suppliers are not obliged. Still, I will take this away and reflect on how we can make bills easier and simpler for consumers to understand.
Lord O'Neill of Clackmannan
Before the Minister sits down, when she says that the companies are “not obliged”, I find it difficult to understand her choice of language. It is as if we are asking them to do something difficult. At best, we could say that we will just aim at the top six, or top seven if we included First Utility. The other side of this is that, such is the stickiness in this market, most people do not switch, so that 60%-odd are receiving their bills from the same company year after year. We have been far too easy on these companies, and the Minister gives me no comfort whatever by using phrases such as “not obliged”. We should dashed well make them do it; we have the powers to do so. The regulator can do these things. It might be uncomfortable for the regulator but the consumer is entitled to know. I hope that she goes away and reflects on whether or not we should make the obligation rather more forceful than it currently is.
Baroness Verma
My Lords, as I said earlier, I am taking the amendment away and shall reflect on what the right reverend Prelate the Bishop of Chester has raised. Like noble Lords, I am very keen that information is available, simple and understandable, but I am also keen to ensure that I can deliver what I am able to. Part of that is by taking this away and giving it further consideration.
Baroness Maddock
I am grateful to the Minister for her explanation. I have to say that the proposal is fairly simple and I cannot see that it would damage the Bill tremendously if it were in there, but I suppose that it is too much to hope for. When I was in the Commons, I once got a Minister to accept an amendment in its entirety and I practically fell off my chair as he said it. At that time I was the only Lib Dem on the Committee. I had a whole raft of amendments and was busy looking at my notes for the next amendment when I suddenly heard what he said. I am disappointed that the Minister today was not able to do that, but never mind.
I thank her for taking this issue seriously, because we all think that it is important. The amendment goes to the heart of what we are trying to do about getting better information about tariffs to enable people to make decisions. It is clear to me, as I commented in the previous amendments, that people working with those who could do with better tariffs are finding it very difficult to do so because it is so complicated. The simpler that we can make things, the more chance we have of achieving the aims that we all have in the section that deals with tariffs. I am pleased and disappointed all at the same time, but I recognise that we are where we are and beg leave to withdraw the amendment.
Lord Roper
“( ) An order under subsection (1) or (10) is subject to annulment in pursuance of a resolution of either House of Parliament.”
Lord Roper
My Lords, Amendment 50G is tabled in my name and that of my noble friend Lord Teverson. This amendment is parallel to some discussions that we had during our previous day in Committee when we were considering a nuclear regulatory organisation and taking up references in the report of your Lordships’ Delegated Powers and Regulatory Reform Committee. Two paragraphs of the report discussed the possibilities of modifying licences under Clause 127(1) and orders about domestic supply contracts in Clause 127(10).
As the noble Lord, Lord Whitty, has made clear, this gives power to the Secretary of State to intervene in an area that until now has been the responsibility of the regulator. The argument put forward by the department in the memorandum that it sent to the Delegated Powers Committee was that there was no need for any form of parliamentary scrutiny because all that we are giving the Secretary of State power to do is something that could already be done by Ofgem. That needs to be examined rather more carefully, which was also the view of the Delegated Powers Committee. This is the single instance in the Bill when the Secretary of State is given power to modify the licences without parliamentary scrutiny; in each of the other six cases, the negative procedure is indicated. We have already seen the discussions. This is an area of considerable public and political interest. Therefore, if the Secretary of State is to intervene and in some sense override the position of the regulator, it appears to the Delegated Powers Committee that he ought to be answerable to Parliament and that, as in other cases under powers conferred elsewhere in the Bill, it should require the draft negative procedure. As on the previous occasion, we have not seen the reply from the department to the Delegated Powers Committee so we would like an assurance from the Minister about how she is going to reply to the report.
Clause 127(10) is a very complicated power to make orders about domestic supply contracts. Similarly, it seems surprising that this order-making power is subject to no parliamentary control. Although paragraph 358 of the memorandum that the department submitted to the Delegated Powers Committee explained why the definitions could not appropriately be included in the Bill, it did not really explain why there is no provision for parliamentary scrutiny. This amendment is put forward by my noble friend and me in order to give the Minister an opportunity to explain what the reaction of the department to the report of the Delegated Powers Committee is likely to be.
I tabled a request for a debate on clause stand part before I had had a chance to see the amendments tabled by the noble Lord, Lord Whitty. In view of the long discussions that we have had on them and on the amendments tabled by my noble friend Lady Maddock and me, I have no intention of pursuing that debate. I beg to move.
Lord Grantchester
My Lords, Amendment 50G would require the Secretary of State to present proposals to Parliament before making any changes to the terms of licence conditions under powers in Clause 127. However, while the Secretary of State is obliged to consult suppliers and Ofgem as well as any other person he thinks relevant, he is not obliged to present the proposals to Parliament for scrutiny. The Delegated Powers and Regulatory Reform Committee questioned the appropriateness of this in its report on the Bill, and drew attention to Clause 127(10). It stated:
“As is candidly acknowledged in paragraph 358 of the memorandum, the distinction between discretionary and principal terms ‘is central to the function of the clause’. It therefore seems to us surprising that the order-making power is subject to no Parliamentary control, and that paragraph 358 -while explaining why full definitions could not appropriately be included in the Bill - does not explain why there is no provision for Parliamentary scrutiny”.
Why do the Government deem it necessary to consult the industry and Ofgem but not Parliament or consumers?
Throughout the Committee’s scrutiny of the Bill, several noble Lords have highlighted the extensive enabling powers given to the Secretary of State. This fifth report of the Delegated Powers and Regulatory Reform Committee is also highly critical, rather uniquely for that committee, in stating that there is little provision in many chapters in the Bill,
“that does not involve the delegation of legislative powers”.
We offer our support to this amendment in order to ensure that any such order is given appropriate scrutiny by Parliament by the negative resolution procedure, as recommended by your Lordships’ Delegated Powers and Regulatory Reform Committee.
Baroness Verma
My Lords, I am extremely grateful to my noble friend Lord Roper for raising the issue in Amendment 50G that would make the use of powers set out in this clause subject to annulment resulting from a resolution of either House. Noble Lords will be aware that the Delegated Powers and Regulatory Reform Committee has recommended that the power of modification conferred by Clause 127(1) and the order-making powers in Clause 127(10) should require the draft negative procedure. We are looking at these recommendations, along with the others made by the committee, and will respond to it in due course. I therefore hope that my noble friend will withdraw the amendment.
Lord Roper
My Lords, I am grateful to the Minister for that reply. We await with interest the full response from the department to the Delegated Powers and Regulatory Reform Committee. I understand that it has already received a substantial response from the department that it will consider at its meeting tomorrow, and that it is possible that when we meet on Thursday we will have the results of its report and the department’s response, which will perhaps be of value to us. I shall withdraw the amendment at this stage, but if we do not have a satisfactory response on Report then it will be necessary to return to it. I beg leave to withdraw the amendment.
House of Lords
Council Tax
Lord Woolmer of Leeds
To ask Her Majesty’s Government what assessment they have made of the impact on council tax arrears of the reduction in council tax benefit and the localisation of support for those in need.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, the design of local schemes and the assessment of their impact is the responsibility of local authorities. It is for authorities to design local council tax support schemes that will minimise the possibility of anyone falling into arrears on their council tax. Localisation gives local authorities the freedom to choose how to manage the funding reduction and they are best placed to understand their local priorities and the needs of their vulnerable residents. This reform enables them to take these local factors into account when deciding on levels of support.
Lord Woolmer of Leeds
I thank the Minister for that reply. Does she recognise the additional costs being borne by local authorities in seeking to collect council taxes from some of the lowest income and poorest communities in their areas for the very first time? These costs include setting the support scheme, counselling and advising, seeking to collect and even, in extremis, taking people to court. Would the Minister be willing to review, with the local authorities, what those costs actually are in the coming months so that there is agreement on the costs being borne by them in seeking to introduce that policy in their communities?
Baroness Hanham
My Lords, local authorities were well aware of what the council tax support was going to be. They were also well aware that their schemes should take into account any additional costs which came about as a result of the council tax support scheme. As with everything else to do with local authorities, we will keep this under review but it would not qualify for any consideration under new burdens because council tax is always something that the council has had to deal with.
Lord Shipley
My Lords, does the Minister agree that one way of helping those on low incomes would be to increase the number of council tax bands at the top end, so that those who are wealthier pay more?
Baroness Hanham
My Lords, my department and the Government have made it clear that they have no intention of rebanding council tax.
Baroness Hollis of Heigham
My Lords, because the Government have cut the funding for council tax benefit for local authorities by 10%, local authorities are having to charge people on benefit who have never paid council tax before. As a result, chief executives are estimating that up to 75% of those new payers will not pay. As it costs £10 to collect £2.50 a week, we are going to create a culture of non-compliance just like there was with the poll tax. Will the Minister please think again? It is a very foolish policy indeed.
Baroness Hanham
My Lords, the matter is implemented now and the noble Baroness will be as aware as I am that the councils were all offered a transitional grant at the outset if they set a council tax support scheme which was not more than 8.5% from zero. A number of local authorities have done that. Nearly 200 took advantage of that transitional grant and if others had they would not be in the position which I think the noble Baroness is trying to describe.
Lord Brooke of Alverthorpe
My Lords, is the noble Baroness saying that the Government do not know whether or not council tax arrears have gone up? If she does know, will she tell the House, and if they have gone up, will she say what steps the Government will take to ensure that councils can get them down?
Baroness Hanham
My Lords, council tax arrears for 2012-13 have gone down. The new support scheme that started in April 2013 has barely had an opportunity to get off the ground but clearly this is something that will be kept under review. However, as I said, if local authorities had done what we gave them the opportunity to do and taken the grant, they would not have to ask people to pay council tax that they could not perhaps afford.
Baroness Gardner of Parkes
What is the position if you are in arrears but have a spare room? What is being done by councils to encourage such people to let their spare room? Our council is setting up a way for anyone to discover where those rooms are. I keep meeting people who are being put out of where they are and are dying to rent a room but cannot find any of these council people with a spare room which I would have thought would suit both parties to agree that they can occupy.
Baroness Hanham
My Lords, if the noble Baroness is referring to the extra rooms associated with the welfare reforms, I am sure there will be opportunities for local people who are affected by those to see whether they can take on a lodger as long as their subletting arrangements are sufficient for the local council.
Lord Beecham
My Lords, in light of the fact that 50% of councils have not taken up the transitional grant, will the Government apply the unallocated fund that they originally created to extend the transitional period to perhaps two years for those authorities which have taken up the offer? In that way, they could mitigate the problems that have been referred to by other noble Lords today.
Baroness Hanham
My Lords, it was made clear from the outset that the transitional grant would be for one year and one year only. Therefore, I do not anticipate that the question asked by the noble Lord will be answered in a way that he would like.
Lord Campbell-Savours
Is the Minister aware of the culture of non-compliance referred to by my noble friend Lady Hollis?
Baroness Hanham
My Lords, people are required to pay their council tax and I am sure that local authorities will make certain that they collect any arrears that are owed to them as necessary.
Baroness Farrington of Ribbleton
My Lords, would the Minister care to comment on the complaint from local authorities that the reductions are disproportionately heavy in areas such as the north of England and that it was therefore much harder for them to qualify for the transitional grant? Why do the Government keep favouring the south?
Baroness Hanham
My Lords, that is not evident. Of course, local authorities in the north sometimes have more to deal with than those in the south but I do not think that there is any evidence that there is an overweighting. Local authorities, irrespective of where they are in the country, were perfectly able to adjust their schemes for council tax support to take account of the transitional relief had they wished to do so.
Defence: Trident Review
(10 years, 10 months ago)
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Lord Lea of Crondall
To ask Her Majesty’s Government whether their review of Trident will include the issue of non-proliferation.
Lord Wallace of Saltaire
My Lords, the starting point for the review of alternatives to a like-for-like replacement of Trident was that the UK will continue to comply with its international obligations, in particular with the Nuclear Non-Proliferation Treaty.
Lord Lea of Crondall
My Lords, we know that the alternatives review will address the issue of options for replacing the Vanguard submarines. Will it also consider whether, relatively soon in a submarine’s lifetime, its missiles will need a new warhead? The Government plan to consider that question in the next Parliament, deferring the timetable for consideration in this Parliament given in the 2006 White Paper. Secondly, is it possible to develop a new warhead without testing it and therefore without rescinding our moratorium on testing and indeed contravening the provisions of the Comprehensive Nuclear Test-Ban Treaty? If it is not tested, how can we be assured that any new warhead would be effective?
Lord Wallace of Saltaire
My Lords, the British Government, under both the previous and the current Administrations, have been strong supporters of the Comprehensive Nuclear Test-Ban Treaty. We have developed sophisticated means of simulating the testing and checking of warheads. This is one area in which we are now co-operating with the French: on the sophisticated facilities available for examining current nuclear warheads and considering further developments in design.
Baroness Miller of Chilthorne Domer
My Lords, surely, whatever the outcome of the decision on Trident, it is important that this country continues to play its full role in diplomatic efforts towards non-proliferation and disarmament. Why did the UK ambassador not attend the UN open-ended working group intended to kick-start efforts in this area?
Lord Wallace of Saltaire
My Lords, the United Kingdom remains strongly committed to nuclear disarmament, and we are working in a range of different international contexts to achieve this. As noble Lords will know, the next Review Conference on the Nuclear Non-Proliferation Treaty will meet in 2015, and the preparatory committee met earlier this year.
Lord Browne of Ladyton
My Lords, the Minister will be aware of recent credible research which, using modern climate change models, found that even a regional war using nuclear weapons between emerging nuclear-armed states with relatively primitive weapons would quickly lead to significant global climate change, reduce temperatures, reduce growing seasons, have significant adverse agricultural effects and then quite devastating effects for all the world’s populations. Why, then, did the coalition Government not attend the Oslo conference on the humanitarian effects of nuclear weapons? Why did they boycott it? Do we have nothing to say to the rest of the world about these issues? Will we go to the follow-on conference in Mexico in 2014?
Lord Wallace of Saltaire
My Lords, I pay tribute to the noble Lord’s work within the context of the European Leadership Network and the Nuclear Threat Initiative, which is highly desirable, multilateral work involving the Russians and many others. It is exactly the sort of work that needs to be done and published to inform the debate on the future of nuclear weapons. Her Majesty’s Government decided, in the context of preparations for the Oslo conference, that we should be pursuing this, as far as possible, through the conference on nuclear disarmament; the priority was to unblock that conference. As for attendance at the follow-on conference in Mexico, British diplomats in Mexico met Mexican officials some weeks ago to discuss the question.
Lord Hylton
My Lords, is there not a contradiction between, on the one hand, the statements of successive British Governments about the weapons of mass destruction of others and the risk, therefore, of killing non-combatant civilians and, on the other hand, their own possession of nuclear missiles?
Lord Wallace of Saltaire
My Lords, I have no doubt that when the Trident alternatives review is published, it will stimulate a good deal of, I hope, informed and rational debate about the future of our nuclear weapons programme and of nuclear weapons as a whole. That was part of the intention of commissioning this review.
Lord West of Spithead
My Lords, unsurprisingly, the alternatives review that the Minister refers to seems to show that are no real alternatives to replacing the Vanguard class submarines if we wish to maintain our best-value and most capable deterrent. The only thing that will be looked at further is continuous sea deterrent and, even in that, the worst probability is that we will have to order two Vanguard replacements. With that in mind, will the Minister not agree that we should order those two replacements now, to remove the uncertainty hanging over many hundreds—indeed, over 1,000—skilled workers and their families about their future, and to save £300 million?
Lord Wallace of Saltaire
My Lords, I am not sure that major defence decisions should be driven either by the need to employ a large number of people to build aircraft carriers in Scotland or by the need to maintain employment in Barrow-in-Furness. There are larger issues at stake.
Lord Palmer of Childs Hill
My Lords, will my noble friend confirm that the purpose of that review, which is yet to be fully announced, is to reduce the number of nuclear weapons at sea and on land and that that is part of the non-proliferation effort that we are all engaged in? That is the purpose of the review, and I look forward to its outcome.
Lord Wallace of Saltaire
My Lords, of the declared nuclear states, Britain already has the fewest nuclear weapons. Under current plans we will further reduce the number of nuclear weapons deployed in recent years. We are therefore very much already at a minimum nuclear deterrent. The purpose of the Trident alternatives review, like the EU balance of competences review, which will also be published shortly, is to provide for an informed public debate. That is highly desirable on both major topics.
Lord Foulkes of Cumnock
My Lords, while the Minister and I will be campaigning side by side to keep Scotland within the United Kingdom, there is an outside chance that we might lose in that referendum. Why, therefore, is the Ministry of Defence not undertaking contingency plans to work out what will happen to the independent deterrent in that event?
Lord Wallace of Saltaire
My Lords, we shall be campaigning side by side. I hope that my son will have a vote in that election, since he may be about to move to Edinburgh. The question of whether Scots living outside Scotland should be allowed to vote is, as the noble Lord knows, a very active one. I would rather leave to another day hypothetical questions as to what would happen if Scotland were to become independent.
Sudan: War Crimes
(10 years, 10 months ago)
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Lord Alton of Liverpool
To ask Her Majesty’s Government what assessment they have made of the report by Amnesty International, We had no time to bury him: War crimes in Sudan’s Blue Nile State.
Lord Wallace of Saltaire
My Lords, we are deeply concerned about the suffering caused by the conflict in Blue Nile state. Accounts presented in Amnesty’s report underline our serious concern about the impact on civilians of the military tactics used. Our priority is a cessation of hostilities and full access to the area for life-saving humanitarian assistance. We continue to press both the Government of Sudan and the Sudan People’s Liberation Movement-North—the SPLM-N—to enter into talks to achieve this.
Lord Alton of Liverpool
My Lords, is the Minister aware that, in addition to this shocking report, new satellite imagery compiled by Amnesty International shows the sheer extent of the purging of the Nuba people from these areas of South Kordofan and Blue Nile, as well as the scorched-earth policies being pursued by the Sudanese military—unabated, uncondemned and unobstructed by the West? Can the Minister tell us when this situation was last raised in the United Nations Security Council and whether we support the extension of the current arms embargo on Darfur to the rest of Sudan? Rather than locking out refugees from camps such as Yida, why are we still not collecting first-hand accounts from witnesses that detail the genocide and war crimes against humanity which are carried out on a day-by-day basis?
Lord Wallace of Saltaire
My Lords, the noble Lord asked about six questions, and I am not sure that I can answer all of them. The UN is extremely heavily engaged both in Sudan and in South Sudan, with three UN missions and a number of other UN operations. We and other Governments make entirely clear to the Government of Sudan our horror at what is taking place. However, as the noble Lord knows, access to the areas of conflict is extremely difficult for diplomats at present.
Lord Chidgey
My Lords, more than 18 months ago, Matthew LeRiche found that civilians in the Blue Nile State were living in constant fear because of indiscriminate terror campaigns aimed at rendering the population unable to provide even the basics of daily life. Those perpetuating these crimes with impunity had the backing of President al-Bashir and six other ICC indictees. Does my noble friend agree that unless the ICC arrest warrants are implemented, there is little or no deterrence for the present crimes? Will the Government therefore press this case with the international community with absolute vigour to see a result?
Lord Wallace of Saltaire
The question of what is the international community for these purposes is very delicate. Arresting an active head of state in his own capital is not the easiest thing to do without going to war. We are deeply concerned about the current situation, but I should stress that the fighting which broke out in South Kordofan and Blue Nile two years ago was in fact sparked by the SPLM-N and it is the Government of Sudan who have responded in a particularly brutal and indiscriminate fashion.
Baroness Kinnock of Holyhead
My Lords, in an appalling repetition of history, the Government of Sudan have spent the last two years deploying the same brutality that they used in Darfur to crush the rebellions that have been mentioned in South Kordofan and Blue Nile. Does the Minister agree that the lessons of Darfur have not been learnt and that the United Nations Security Council is again failing to respond to the suffering of the Sudanese people, who are being bombarded by their own Governments?
Lord Wallace of Saltaire
My Lords, we have to be careful not to assume that the United Nations can do too much. The UN has been actively engaged in this extremely complex series of wars. Let us be quite clear: there are not just two sides on this, as the noble Baroness herself well knows. There is conflict within South Sudan; there is conflict within Sudan itself; there is conflict between groups which are claimed to be supported from across the border. It is now 10 years since the Darfur conflict started. Things are a little better than they were. I speak with some direct experience, having a close friend who has worked both in Darfur and in Abyei in the past three years. Sadly, there are limits to what the international community can achieve, but I assure the noble Baroness that the British Government and others are working extremely hard and providing as much humanitarian assistance as they can in this dreadful situation.
Baroness Cox
My Lords, is the Minister aware that I visited South Kordofan and Blue Nile states earlier this year and witnessed at first hand the constant aerial bombardment of civilians, which deliberately targeted schools and clinics, forcing civilians to hide in caves with deadly snakes and in banks carved out from rivers, and preventing them harvesting crops, with many dying of starvation? Does the noble Lord agree that this aerial bombardment of civilians is being undertaken only by the Government of Khartoum and that, therefore, there is no moral equivalence between the policies of Sudan and South Sudan? What are Her Majesty’s Government doing to call the Government of Khartoum to account for this aerial bombardment, which has been carried out so far with complete impunity?
Lord Wallace of Saltaire
My Lords, we are not the only external actor influencing Sudan. We have to work with the Chinese, who are major actors in terms of external influence on Sudan, the Arab League countries and others. As the noble Baroness will know, there is a tripartite body consisting of the United Nations, the African Union and the Arab League which is attempting to mediate on what is happening in Blue Nile and South Kordofan. I do not in any sense underestimate the horrors of what is happening there.
I am very grateful to the noble Baroness for sending me some material on what she witnessed in her recent visit. It is the most appalling—I emphasise—series of interconnected conflicts from Darfur all the way across to Jonglei and Blue Nile. Part of the problem is that Governments in both South Sudan and Sudan are weak and do not control the whole of their territories.
Lord Triesman
My Lords, the Minister made the point that President al-Bashir would be hard to capture in his own capital. That is of course entirely true, but he must be one of the most widely travelled Presidents of almost any country in Africa. He is at meetings and conferences throughout Africa, throughout the Middle East and occasionally completely out of the hemisphere. What influence are we trying to bring to bear on those other countries that he routinely visits and which do not necessarily have an adverse view of bringing a war criminal to justice?
Lord Wallace of Saltaire
My Lords, the noble Lord will be well aware from his own experience as a Minister how complex these issues are. It is not just a question of Sudan and the ICC. There are delicate questions of Kenya and the ICC at the moment as well. Her Majesty’s Government do of course make representations to other Governments whose territories ICC-designated people visit. Unfortunately, Britain does not command as much influence as we might like in a number of countries in the third world.
Lord Hussain
My Lords, I have had the opportunity of visiting South Sudan and Sudan in the past year or so. Does the Minister agree that, according to the comprehensive peace agreement, the Government of Sudan were required to withdraw all their military forces from South Sudan, which they have done, and that the SPLA was required to withdraw its military people and armed forces from north Sudan but has so far failed to comply?
Lord Wallace of Saltaire
My Lords, the border drawn between Sudan and South Sudan has not been entirely settled. Questions remain about who belongs where, because a number of tribes are pastoral and move across the border. Many issues are not entirely clear or settled. That is very much a problem that we face after the prolonged civil war from which the two countries emerged.
Bank of England: Monetary Policy Committee
(10 years, 10 months ago)
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Lord Barnett
To ask Her Majesty’s Government what is the Chancellor of the Exchequer’s assessment of the latest statement by the Monetary Policy Committee of the Bank of England.
Lord Newby
My Lords, the Bank of England Act 1998 gives powers of operational responsibility for monetary policy to the independent Monetary Policy Committee of the Bank of England. The updated MPC remit set at Budget 2013 by the Chancellor requests the MPC to provide an assessment of the merits of using intermediate thresholds in monetary policy in its August 2013 inflation report, which will be published on 7 August.
Lord Barnett
My Lords, in the House last week, in answer to me, the Minister quoted the Prime Minister as saying at the G8 that the UK Government were “supporting … [an] active monetary policy”. How can he say that when it is not their responsibility? Is it because the new governor is virtually unsackable at the moment? Or is it that the Government are simply not interested at all in monetary policy? The new governor took his first meeting, to which the Minister referred. During the meeting, unusually for a governor, he gave some guidance and said that interest rates would be low for a long time, and could even go a little lower. In those circumstances, the pound dropped substantially. Some people are very happy with that. Is the Chancellor?
Lord Newby
My Lords, on the first point, the Government updated the remit of the Monetary Policy Committee at Budget 2013 to give it greater powers to clarify the trade-offs that are involved in setting monetary policy to meet a forward-looking inflation target. That is what the governor and the Monetary Policy Committee will do over the coming months. On exchange rate policy, as the noble Lord knows, the previous Government did not have a policy for an exchange rate, and this Government do not have one, either.
Lord Lamont of Lerwick
My Lords, perhaps the Minister will comment on one aspect of the asset purchase scheme—quantitative easing—about which there has been some argument. When the original document setting up the asset purchase scheme was signed, and it was made consistent with the Bank of England Act 1998, was it set down that increases in the scale of the asset purchase scheme required the agreement of the Government, and that while day-to-day monetary policy may be the responsibility of the Bank of England, an increase in the scale of quantitative easing would require endorsement by the Government? Is that correct?
Lord Newby
My Lords, my understanding is that it is for the MPC to decide on the scale of quantitative easing. As my noble friend will know, there is a Treasury representative at all meetings of the MPC. That representative is allowed to speak but does not have a vote.
Lord Sharkey
My Lords, last week the New Economics Foundation suggested a new approach to quantitative easing. It suggested channelling investment directly into housing infrastructure and SME lending. Does the Minister agree with that suggestion?
Lord Newby
My Lords, the Government are looking at a number of ways of increasing investment in all those areas of infrastructure. We set out in the spending review our plans for doing that in 2015-16 and subsequently. Plans or programmes already in place, such as the finance for lending scheme, are already having a significant impact on new housing construction.
Lord Davies of Oldham
My Lords, would not a word of caution be apposite at this time? Is not the American experience—where it has been difficult for the Federal Reserve to press on the monetary brake without destabilising the markets, as we have seen—a lesson that we need to learn for the British economy, particularly if there is any pick-up at all and the possibility of rising inflation?
Lord Newby
My Lords, the American experience demonstrates how tricky it is for central banks to give forward-looking guidance without it having an effect on the market. However, as the MPC said at its meeting just last week, it viewed the implied rise in the expected future bank rate as not warranted by recent developments in the domestic economy. It is trying to be cautious and reduce any potential volatility.
Lord Vinson
My Lords, the world’s biggest gilt brokers, PIMCO, wrote about four weeks ago, as reported in the Financial Times, that the new Governor of the Bank of England would have only one shot in his locker, and that is to let the pound depreciate. Is it such a bad thing if, after 30 years, a trading nation begins to consider the rate at which it trades with the rest of the world? Is not our failure to look at the rate of our exchange in the past one of the reasons why we have such a high imbalance of trade?
Lord Newby
My Lords, the pound has fallen in value against other international currencies by about 20% in recent years and that has not automatically had a vast impact on the balance of payments. There are considerable signs of optimism about that. For example, exports in goods to the EU increased by almost 7% last month. However, I think that recent experience has shown that devaluation on its own does not cut the mustard—we also need to have a whole raft of supply-side measures in place. That is why things ranging from the additional resources to UKTI, at one end, to bringing more money into science and apprenticeships, at the other, are necessary if we are to have a significant improvement in the balance of payments.
Local Audit and Accountability Bill [HL]
Baroness Hanham
That the amendments for the Report stage be marshalled and considered in the following order:
Clause 1, Schedule 1, Clause 2, Schedule 2, Clauses 3 to 7, Schedule 3, Clauses 8 and 9, Schedule 4, Clauses 10 to 17, Schedule 5, Clause 18, Schedule 6, Clauses 19 to 23, Schedule 7, Clauses 24 to 28, Schedule 8, Clauses 29 to 32, Schedule 9, Clause 33, Schedule 10, Clauses 34 and 35, Schedule 11, Clauses 36 to 42, Schedule 12, Clauses 43 and 44, Schedule 13, Clauses 45 to 47.
Offender Rehabilitation Bill [HL]
(10 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:49 - Division on Amendment 2 - Ayes: 186 / Noes: 205 - Amendment 2 disagreed.
Lord McNally
“Arrangements for supervision and rehabilitation: female offenders
In section 3 of the Offender Management Act 2007 (power to make arrangements for the provision of probation services), after subsection (6) insert—“(6A) The Secretary of State must ensure that arrangements under subsection (2) or (5) for the supervision or rehabilitation of persons convicted of offences—
(a) state that the Secretary of State has, in making the arrangements, complied with the duty under section 149 of the Equality Act 2010 (public sector equality duty) as it relates to female offenders, and(b) identify anything in the arrangements that is intended to meet the particular needs of female offenders.””
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, I am pleased to move Amendment 1 which seeks to recognise the needs of female offenders and put them firmly in the Bill. It requires the Secretary of State to ensure that arrangements for the supervision and rehabilitation of offenders state that, in making those arrangements, he has complied with the public sector duty under Section 149 of the Equality Act 2010 as it relates to female offenders. The arrangements must also identify any provision that is intended to meet the particular needs of female offenders. It applies both to the contract with private providers and services provided by the public sector probation service.
I pay tribute to those noble Lords who have argued for such statutory safeguards for female offenders. I am particularly grateful to the noble and learned Lord, Lord Woolf, for his earlier amendments and for his constructive discussions with me about this amendment. I am delighted that he has agreed to put his name to the amendment today. I likewise thank my noble friend Lord Marks and the noble Lord, Lord Beecham, for adding their names.
The amendment inserts a new subsection in Section 3 of the Offender Management Act 2007, which relates to making arrangements for the provision of probation services. Under the first part of the amendment, arrangements for the provision of supervision or rehabilitation services must state that the Secretary of State has complied with the public sector equality duty at Section 149 of the Equality Act 2010. This means that the Secretary of State must consider evidence on the particular needs of female offenders where they differ from those of men, and consider whether any adjustments or special provision for female offenders is necessary to address these needs. Where a particular need is identified, this will be reflected in the contractual or other arrangements, which will include outputs specific to female offenders.
In order to win contracts, service providers will be required to demonstrate that they understand and will respond to the particular needs of female offenders where these differ from those of men. This will include, for example, taking account of women’s family and caring responsibilities. We will be looking for providers to come up with innovative ways to deliver gender-specific services that are responsive to local needs, and we will expect them to make links with partner agencies to provide a holistic service at a local level.
As I have mentioned to the House on previous occasions, service providers will be supported by guidance on working with female offenders and the sorts of provision that are known to be effective, which is being prepared in collaboration with members of the new advisory board on female offenders. Once bids have been through a robust evaluation process to ensure that potential providers are offering innovative and effective services to female offenders, the second part of the amendment requires contracts and other arrangements to identify anything in the arrangement that is intended to meet the particular needs of female offenders. Noble Lords will also be pleased to hear that, in the spirit of transparency, details of contracts and service level agreements will be published. This will mean that people can see what provision is being made to meet the needs of female offenders and hold us to account. Contract managers within the Ministry of Justice will also monitor service delivery to ensure that key outputs for female offenders are being delivered.
I hope that noble Lords will welcome and support Amendment 1, which I firmly believe will provide the recognition and safeguards for female offenders that the House has been seeking. I beg to move.
Lord Woolf
My Lords, I should remind the House, particularly in view of the generous way in which the Minister introduced the amendment, and his references to myself, that I am the chairman of the Prison Reform Trust, and received considerable help in putting forward the matter from that trust in that capacity.
This is a considerable step forward in the way in which we treat criminal offenders who are female. It has been well recognised that their needs are different, and it is certainly time that those who are responsible for meeting those needs should have responsibility clearly set out in statute. I am particularly grateful that the Minister and his advisers found ways in which that could be done in the shape of this Bill. The amendment is not as clear as I would have liked but it has to be recognised that what we are achieving is being done by using three pieces of legislation, which is not the ideal way to legislate, but it achieves a purpose. I am very conscious that we are told that we must not look a gift horse in the mouth when it is offered, but I have to confess that this gift horse, if that is an appropriate description, was examined most carefully.
I am particularly grateful for the way in which the Minister introduced this amendment. He stressed the importance of clarity and transparency with regard to various connected matters, so that it achieves the purpose he identified. During debates at the earlier stages of the Bill, the Minister indicated that there would be an annual statement of progress so we can all see that it is moving forward as we would hope. Does he not agree that this is one matter that can be dealt with that way?
It is possible that, when three pieces of legislation are involved—as in this case—the time will come when they are initially disconnected. If this does occur, I believe—and I am sure the Minister will confirm this—that the department will ensure that no prejudice is caused to female offenders as a result of any gap in time. I repeat my gratitude for this amendment and would strongly recommend it to the House.
Lord Marks of Henley-on-Thames
My Lords, in supporting this amendment, I would associate these Benches with everything that the noble and learned Lord, Lord Woolf, has said in welcoming it and in thanking the Government and congratulating them on the way in which they have considered and recognised the particular needs of women in the system. In Committee, we moved certain amendments which would have required the recognition of those needs at various points in the system and we are content that this all-embracing amendment meets them.
I would also associate myself with what the Minister said in tribute to the noble and learned Lord, Lord Woolf, who has campaigned so hard for recognition of the needs of women in this area. As a spokesman on these matters for one of the coalition parties, it gives me particular pleasure to note that we have made a great deal of progress on two of the significant issues for which he has campaigned—restorative justice and women offenders.
I particularly welcome the commitment in this amendment to transparency because, as has been pointed out during the passage of this Bill, we are entering a new era for the probation services. The ability to monitor what is being done after this legislation is passed is of considerable importance.
Lord Beecham
My Lords, I join the Minister and the noble Lord, Lord Marks, in congratulating the noble and learned Lord, Lord Woolf, and thanking him for bringing this matter to the fore in the debates on the Bill. I am happy to break the habits of a brief parliamentary lifetime and congratulate the Minister on his constructive response. I hope he finds this habit catching, in which case I promise to reciprocate.
Like other noble Lords, I have received a briefing from the Prison Reform Trust. While welcoming the amendment, there are a couple of matters on which they seek some assurance—and I would echo their request. First, that the Government should require the contractors to specify—within the contract specifications —what particular services would be provided for women, and that the tender criteria, in turn, as part of the contract, would give sufficient weighting to that element. I imagine that should not present any difficulties but it would be good if the Minister could confirm it. Equally, the commissioning bodies will be given guidance along those lines.
Perhaps I may raise a point related to women prisoners that is not specifically covered by this amendment but which has been referred to in the course of our debates—that is, resettlement prisons. It is a welcome concept and certainly should help to reduce reoffending by ensuring that women serve their prison sentences, or at least the latter part of the sentence, closer to where they are likely to return on release. I raised a question in earlier debates about the specific position of women in this respect because, as I understand it, there are only 13 women’s prisons in the country and they are not necessarily geographically distributed in such a way as to facilitate the Government’s intentions. I am not asking the Minister to confirm specifically today, but it would be good to know that that is being considered and that it is an objective which it is hoped the Government will seek to achieve. It would largely complete the work raised by the concerns now embodied in the amendment, which these Benches certainly fully support.
Lord Ramsbotham
My Lords, I support the amendment and I am extremely glad to see that it has been introduced by the Government. For many years people have been hoping that there would be an improvement, and therefore it is to be warmly welcomed. The amendment refers to arrangements for supervision. I would like to raise one point in connection with that because the supervision, of course, involves the probation service.
As noble Lords will know, each of the 35 trusts has a volunteer probation board which is the employer of all the probation staff working in a trust. Apparently, there is an expectation that board members do not criticise the wishes of the Government because although they are volunteers, they are not civil servants. They have been reminded by the head of Transforming Rehabilitation that they should have regard to the constraints imposed on civil servants. I have had representations from board members about the vote which was passed in this House on Report about the requirement for the Secretary of State to allow us to discuss changes to be made to the probation service. Apparently, the board says that planning is going ahead on the timetable which I outlined on Report regardless of the vote in this House. Probation staff around the country are, as he described it, lost for words because it was expected that at the very least the Government would respect the vote of this House and reconsider their proposals, or at least appear to do so. As it seems that that is not happening, and this amendment is all about the supervision of women offenders, I should be grateful if the Minister could tell the House exactly what is happening following the vote on Report.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, perhaps I may deal with that matter first. The Bill is now in this House. It will then go to the other place, which will also have views about an amendment which the noble Lord was told at the time was defective and which remains defective. I do not think I can go any further than that. We will see what the other House thinks about the amendment and in due course it will come back to this House to be dealt with.
I thank the noble Lord, Lord Beecham, for his kind remarks. He will find that that gives him a warm glow and so I recommend that he continues to make a habit of it. As my noble friend Lord Marks has said, the noble and learned Lord, Lord Woolf, has a good strike record on these Bills and I very much enjoy working with him and benefiting from his wisdom. On the question of the report on progress in dealing with women in the criminal justice system, we will be reporting to Parliament and we will be able to see the progress not only of these measures, but of others that we are taking.
With regard to the prison estate, the noble Lord, Lord Beecham, has drawn attention to an issue that we are currently looking at. We have a number of thoughts on this matter and a study is being undertaken of the prison estate. We will come forward with specific ideas about how released prisoners and the specific issue of women offenders will be dealt with.
On contracts, the contract specifications will set out the services that contracts are obliged to provide. The contract will contain specific outputs designed to meet the needs of female offenders. In order to comply with this new duty, the contract will state that the Secretary of State has,
“complied with the duty under section 149 of the Equality Act”,
and will also draw attention to the specific outputs. As my noble friend Lord Marks pointed out, we will publish these contracts and they will be brought forward with all possible transparency. I hope that this will give confidence and that the House will adopt the amendment.
Lord Beecham
“Provision for veterans’ treatment courts
(1) Within one year of the passing of this Act, the Secretary of State shall report to both Houses of Parliament on the case for establishing veterans’ treatment courts for dealing with ex-service personnel convicted of offences for which non-custodial sentences could be imposed by the trial court (“relevant ex-service personnel”).
(2) The report under subsection (1) shall cover but not be limited to the following—
(a) the statutory basis of veterans’ treatment courts;(b) the composition and functions of veterans’ treatment courts; (c) whether veterans’ treatment courts would be of most effect in diverting, where possible, ex-service personnel from the criminal courts or in overseeing the rehabilitation of ex-service personnel offenders sentenced by the criminal courts;(d) an estimate of the impact of veterans’ treatment courts on the rehabilitation of, and in reducing re-offending by, relevant ex-service personnel;(e) an analysis of relevant international comparators; and(f) an account of consultation which shall be undertaken with all relevant parties including magistrates.(3) Within six months of the laying of the report under subsection (1), the Secretary of State may by statutory instrument make provision for one or more pilot schemes for veterans’ treatment courts, to extend for two years.
(4) A pilot scheme under subsection (3) shall, within six months of its conclusion, be independently evaluated, and a report of that evaluation laid before Parliament.
(5) Within six months of the laying of the report under subsection (4), the Secretary of State may by statutory instrument make provision for a permanent scheme for veterans’ treatment courts.
(6) A statutory instrument made under subsection (3) or (5) shall be laid before, and be subject to approval by resolution of, both Houses of Parliament.”
Lord Beecham
My Lords, this is the fourth iteration of the concept I floated at Second Reading and which we have debated in Committee and on Report. I can claim no credit for the idea. It was conceived in the United States in 2008 where it has been applied with remarkable success in terms of the reduction in reoffending by ex-service men and women and in promoting their welfare, with courts now established in every state. It is now seen as embedded in the justice system and is an integral part of what we in this country call the military covenant, under which we recognise the special responsibility we have as a society for those who have served their country, often in difficult and dangerous circumstances.
The veterans’ treatment courts do not adjudicate on guilt or innocence. Nor do they deal with those who are convicted of, or plead guilty to, crimes for which only a custodial sentence would be appropriate. Their purpose is to promote the rehabilitation and prevent the reoffending of men and women who often find it hard to readjust to civilian life, which is so different from the collective existence—perhaps better described as the regimented existence—that, of necessity, military service often involves. Some will have suffered, and may continue to suffer, combat stress or post-traumatic stress disorders and a number will fall foul of the law, with crimes of a violent or sexual nature being particularly common.
The courts in America are presided over by the relevant judge. A veteran mentor is assigned to each offender, who has to attend monthly court sessions and is helped in a variety of ways to adjust to life in the wider community, receiving practical, psychological and, where necessary, clinical support. Failure to co-operate with the treatment court leads to a return to the sentencing court and the risk of a prison sentence.
It must be said that there is no certainty about the numbers that might be involved in this country were we to adopt the system, even for those serving prison sentences. The MoD estimates that some 3.5% of prisoners at any one time are ex-service personnel. However, other estimates rise as high as double figures. A survey by Mr Colin Back of the Regular Forces Employment Association, who has worked extensively with this group and who attended a recent helpful meeting with the Prisons Minister, Mr Damian Green, has produced an estimate of those claiming and proven to have served in the Armed Forces to be an average of 6% of the inmates in a wide range of establishments, with a lowest figure of 3% and a highest figure of 11%. It is likely, however, that these figures are understated because some of those in prison do not wish to disclose their status to other prisoners or to those who, like Mr Back, are inquiring as to their position, because of concerns about how other prisoners will react or fear of loss of pensions and the like.
Be that as it may, it is clear that the number of ex-service men and women who come before the courts will substantially exceed the number who end up in prison. Even 3.5% of those who receive non-custodial sentences such as probation or community sentences will amount to several times the lowest estimate of those in custody, which is around 2,500. I do not find the number quoted by the Minister on Report for this group of non-custodial offenders of some 5,800 to be particularly credible, except perhaps as an annual figure. Therefore, over time the offending group will be quite substantial and the cumulative total must be considerably higher. We must remember that the figures are but a snapshot at any one time so the total who will have been in the system over time, whether in prison or—particularly relevant here—on non-custodial sentences, will be correspondingly greater. Moreover, at current reoffending rates, the figure would be further inflated. Obviously, addressing the general reoffending rate is the whole point of this Bill. Finally, those who have served in Bosnia, Iraq and Afghanistan are due to return and 20,000 will leave the forces, so the potential for an upward spike in numbers is all too apparent.
Lord Ramsbotham
My Lords, I support this amendment, to which I have added my name. We have spoken about this issue many times before. Several advantages come with this amendment in the context of the Armed Forces covenant, for which the Government are very much to be commended, not least because it requires an annual report to both Houses of Parliament by the Secretary of State.
What has been most encouraging since the announcement of the covenant is the number of local covenants that have been commissioned around the country. There is a huge support network for a particular focus on the multifarious needs of the Armed Forces. Mention has already been made by the noble Lord, Lord Beecham, of the large voluntary sector which supports the military and their families. Those organisations are very capable of carrying out many of the functions that are needed. In addition to that, a growing support network is being developed for those suffering from mental health problems—the Minister has mentioned post-traumatic stress disorder and other kinds of fatigue—not least a number of official recovery centres based around the country which are linked into the military command structure. This is a diversion scheme, very much on the lines of the scheme developed by the noble Lord, Lord Bradley, which the Government have supported. It is poised to go, supporting an element of the community to which the Government have said that they wish to pay particular attention.
I was present at the very encouraging meeting with the Minister, Damian Green, and was glad that he took all these points on board. Therefore, I hope that the Minister will be able to respond positively to the amendment and give the House an indication of the sort of timing that we might expect in terms of a government response.
Lord Lloyd of Berwick
Before the noble Lord sits down, perhaps I may ask him one question for my elucidation. I am interested in the use of the word “treatment” in connection with the word “courts”. Is it the intention that these courts should be available only to those who are shown to be suffering from either post-traumatic stress disorder or, let us say, Gulf War syndrome, or are they to be open to all, whether or not they need “treatment” in that sense?
Lord Ramsbotham
I think that I should defer to the noble Lord, Lord Beecham, who is responsible for the wording of the amendment.
Lord Lloyd of Berwick
I am very sorry. I had hoped to ask the question of the noble Lord, Lord Beecham, before he sat down, but it was by then too late. Somebody, I hope, will give me the answer.
Lord West of Spithead
My Lords, I support the amendment, to which I have added my name. The amendment is the least that we can do for the men and women who have put their lives on the line for our nation’s security.
Viscount Slim
My Lords, the Minister will be aware through conversations and debate in the Chamber that I strongly support this amendment. I know that he has been working on a plan along the lines that we asked for. Here it is. It is a good one; it should be trialled. Like the noble Lord, I hope that the Minister will see the sense in it and give his blessing to it. If not, I hope that the House will take the necessary steps.
Lord Hylton
My Lords, my noble friend Lord Ramsbotham referred to existing support systems for ex-servicemen. I imagine that he has in mind the British Legion, Help for Heroes and other voluntary organisations, together with local authorities. However, the sad fact remains that a significant number of ex-servicemen find themselves homeless and sleeping rough, many of them in London. Could this factor also be borne in mind in whatever preventive work is done?
Lord Ahmad of Wimbledon
My Lords, I thank all noble Lords who have participated in this debate. The noble Lord, Lord Beecham, has once again returned to the very important issue of providing support for ex-service personnel impacted in this way who find themselves involved with the criminal justice system.
However, we should not lose sight of the fact that the vast majority of men and women who serve in our Armed Forces go on to lead successful, law-abiding lives. Ex-service personnel are an important asset to the economy of this country and any employer should welcome the skills that they bring to any job. I also pay tribute to all the brave men and women who serve in our Armed Forces and continue to do so with great distinction and honour. We pray for them, particularly those who find themselves on the front line as we speak today.
The noble Lord, Lord Beecham, has already mentioned the meeting he had with my right honourable friend Damian Green, the Minister who sits appropriately in both the Home Office and the Ministry of Justice and who is ideally placed to consider the issue of ex-service personnel who find themselves in the criminal justice system. That meeting was attended by not only the noble Lord, Lord Beecham—as he has acknowledged—the noble Lord, Lord Ramsbotham, David Anderson, the MP for Blaydon, and my honourable friend Oliver Colville, the MP for Plymouth Sutton and Devonport, were also present. Therefore, it is fair to say that there is support for looking at this important issue both here and in the other place, throughout the country and across the political spectrum.
Also at that meeting were a number of representatives of veterans’ groups, such as Tony Wright of Forward Assist. I know that my right honourable friend Damian Green particularly welcomed their input and the information that they supplied about the experiences of ex-service personnel. One of the key things that emerged from that meeting is that the focus is not necessarily on ex-service personnel who are in prison. It is of course important that we continue to develop services for those who are in custody, such as the veterans in custody support officers, and expand the specific guidance that is produced in collaboration with interested government departments and the important voluntary sector.
As I said in Committee, it will be important to have tailored supervision for ex-service personnel on release, including, for example, mentoring from those with service backgrounds—a subject that we have talked about previously. So while we continue to work with ex-service personnel in custody, we also need to focus on those who receive non-custodial sentences or those who can be diverted from the criminal courts altogether. We believe that there are a number of ways to address offending by veterans at that level. For example, we could look at the programmes that are available as part of conditional cautions, which are administered by the police.
The noble Lord, Lord Beecham, also mentioned the US experiences. That is something that the Government are also looking at. For those receiving community orders or suspended sentence orders, there are powers available to the courts to review sentences, essentially to monitor progress of that particular order. We suspect that these approaches might benefit some ex-service personnel. However, we need to know more about the problem of offending at this level in order to decide what the best solution is.
One of the most striking things raised by veterans’ groups is the lack of detailed information about the scope and nature of offending by ex-service personnel. That point was well made by the noble Lord, Lord Beecham. Even in prisons there are significant differences in the estimates, ranging from 3% of the population to 11%. For those involved in less serious offending, the information is even less clear. That is why we want to work with the veterans’ groups to try to establish a better understanding of the nature and extent of offending. If we have that information, we believe we can focus better on a response.
The Government are already taking forward work to look at the data that are available. I am also happy to make a commitment that the Government will produce an assessment of the issues identified, as raised in this amendment, including a veterans’ court and other mechanisms to provide support. We will share that assessment with noble Lords. I am also confident that we will be looking to complete this particular assessment and share the findings with noble Lords within the coming year.
Likewise, I reassure noble Lords that we will continue to consult relevant groups. We want to discuss the issue with other key government departments, such as the Ministry of Defence, as well as the Department of Health and the Department for Work and Pensions. We will also need to talk to the judiciary about its experience of dealing with ex-service personnel.
Lord Beecham
My Lords, I am grateful to the noble Lords who have participated in this short but important debate. The noble and learned Lord, Lord Lloyd, asked about the term “treatment”. It is not designed to refer to clinical treatment. It is a phrase used in the American system, and treatment can take a variety of forms, including advice and support of all kinds. As I said, it does not necessarily have a medical or clinical connotation.
The noble Lord, Lord Hylton, referred to homelessness as a particular problem, and that of course is true. Indeed, it is the function of the mentor and others in American veterans’ courts to assist precisely with that kind of problem. To a certain extent and as the noble Lord, Lord Ramsbotham, pointed out, it is something that is now increasingly carried on across a number of local authorities, especially those in my home region of the north-east.
Nothing in what the Minister said is excluded from the range of the amendment. The amendment is not at all incompatible with what he said. It sets out a process and one would hope to end up with the option of a system clearly rooted in the experience abroad. It would also have to be tested here, as we are suggesting.
I welcome the warmer response given by the Minister today compared with that given previously. I understand that parts of the Government are addicted to something called the “nudge theory”, in which people can be encouraged by a nudging process to change their ways. I think that it would be appropriate to seek to nudge the Government in the right direction by having a clear expression of opinion on the amendment. Accordingly, I wish to test the opinion of the House. I hope that we can give a clear message that we want the Government to build on their growing warmth and accept the principles set out in the amendment. One hopes that they will move in due course, on the basis of piloting, to making a systemic change in the way that we deal with offenders.
Care Bill [HL]
(10 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
“( ) the importance of identifying housing options required to exercise that duty”
Lord Best
My Lords, we come now to a group of amendments, five of which are in my name and the names of my noble friends Lady Wilkins and Lady Tyler. These five amendments have the same underlying purpose—namely to give greater prominence to the crucial role that housing can play in preventing and reducing the need for health and social care services. The amendments have been prepared by the Care and Support Alliance, which is composed of more than 70 organisations that support and represent older and disabled people. I am particularly grateful to the National Housing Federation, which has helped bring these amendments together and given excellent briefings to interested Members of your Lordships’ House.
The Bill has been welcomed by those organisations, and they note with approval that the definition of “well-being” in Clause 1 covers “suitability of living accommodation”. Also, in relation to the duty on local authorities to meet needs for care and support, Clause 8 includes reference to such assistance being provided “at home”. However, these passing references to the place where many elderly and disabled people spend almost all their time do not do justice to the significance of housing to enabling people to live independently.
The Bill takes highly significant steps to integrating health and social care services, but downplaying the housing element—the third leg of the stool—will undermine the legislation’s good intentions. The Age UK report, Stop Falling: Start Saving Lives and Money, notes that falls cost the NHS around £4.6 million every day and that around half of the people over the age of 80 suffer a fall each year. It makes clear that it is accidents in the home, or on the icy step outside, that so often lead to hospitalisation. Cold and damp premises are equally likely to be the cause of a deterioration in health. Once in hospital, if the home to which the patient should return is totally unsatisfactory, their discharge will be delayed and/or there will be a swift readmission to hospital when the home fails them. Informal family carers cannot cope with someone’s care needs if they are battling with the inadequacies of a home that has unmanageable stairs or cannot accommodate a wheelchair.
The case has been made for the financial benefits of getting the housing service right. The National Housing Federation’s new report, Providing an Alternative Pathway, for example, shows that housing for someone with dementia in a self-contained flat in an extra-care scheme provided by a housing association can cut the cost of their care by up to 50%, allowing them to live more independently with care and support on-site, rather than in a costly residential care home. Currently, the UK is spending £9.43 billion on housing those with dementia in care homes, so housing alternatives can have a huge impact on health budgets.
Often the ideal housing solution for so many of us as we grow older is a move to a more manageable home with very low heating bills, no stairs or steps, but with high standards, space, light and ventilation. As a wonderful bonus, when an older person downsizes, a much needed family home, probably with a garden, comes on to the market for the next generation. I declare my interest as chair of Hanover Housing Association, which endeavours to build accommodation of this kind, which is in turn likely to be the best place for care and support services to be delivered. The housing provider can supply the back-up, not only through emergency call systems—now much enhanced by new technology—but in personal terms in acting as helper and ally in securing care services. Age-friendly housing developments for older people also protect against loneliness and isolation for the resident through ensuring a sociable, companionable environment.
However, the great majority of people will stay put in their family home. A joined-up care and housing service can make this possible. Sometimes very minor adaptations are all that are needed to extend people’s independence and autonomy. Handrails that are discreetly and strategically placed can prevent falls in the home. Long-armed “D” taps for people with arthritic hands can reduce the occupier’s need for costly help. Introduction to a “handy person” service can get these things fixed. Arrangements to pay for a defunct central heating boiler to be revived can end the misery of choosing between being freezing cold and spending a fortune on an electric bar heater which may well be unsafe. This investment in the home can keep people well.
Home improvement agencies, often called “care and repair” services, can organise access to disabled facilities grants for items like stair lifts or the installation of walk-in showers, making life so much easier for family carers as well as for the person themselves. It is good to note, in the spending review, the transfer of resources from the Department of Health to fund a planned 20% increase in the budgets of disabled facilities grants.
All these measures that prevent the need for more costly care services achieve very rapid payback as well as transforming people’s lives. If a patient cannot be discharged from hospital for a couple of weeks because their home cannot take them back, the NHS will incur costs of well over £5,000—money that could have been so much better spent fixing the home and preventing a series of unnecessary and unwanted hospital stays. Avoiding a move into residential care for a couple of years will save tens of thousands of pounds.
Each of these amendments covers a different clause in the Bill and inserts a housing dimension to the very welcome measures already therein. First, Amendment 80 addresses Clause 2, which focuses on preventing or delaying a person’s need for care. It seeks recognition that housing is a crucial part of a preventive care service.
Secondly, Amendment 81 is particularly significant. It adds housing to Clause 3, covering promotion of integration of care and support with health services. It is interesting to note, in this context, that in Scotland this holistic view of integration is now taken. The relevant Scottish guidance says:
“It will be important that, in bringing … health and social care closer together, partners ensure that housing services (including those provided by housing associations and the third sector, as well as by local authorities) are fully included in the integrated approach to service planning and provision, and that health and social care planning and local housing strategies are mutually supportive”.
So says the Scottish guidance. Sadly, our Health and Social Care Act 2012 does not explicitly reference housing, and a framework for engagement was neglected in that Act’s guidance. This has led to a very patchy involvement with housing by the new health and well-being boards. Some are examplars of engagement with housing providers in a three-way partnership, while others seem blind to the significance of this element in the equation.
Thirdly, Amendment 86 covers Clause 4 and relates to information and advice. Again, this is a very important amendment. The Joint Committee that looked at the Bill strongly recommended that local authorities provide information and advice on the housing options available in their area. However, although the Government have incorporated the need for independent financial advice, the recommendation from the committee to include housing has not been taken up. This amendment, by including housing options in the Bill, should ensure that local authorities provide the requisite information on specialist and adapted housing in their area, on ways for people to get their home adapted, and on the ways in which people can cover the costs of home improvements.
Fourthly, Amendment 87 seeks to improve Clause 5, which is concerned with the diversity and quality of local services. It extends the definition of care and support services to ensure that local authorities include specialist housing, accessible housing and housing-related support in their mix of services.
Finally, Amendment 88 addresses Clause 9, which relates to the assessment of an adult’s needs for care and support. It is intended to make sure that local authorities pick up on whether adaptations to a home are needed or whether a move to more specialist housing would be best. Assessing the housing requirements of the individual is a vital part of the process of seeing what is best for that person and how their lives can be improved. The amendment seeks to make sure that this ingredient in the process is covered as a matter of course.
I hope that the Minister will feel able to take on board the kind of changes to the Bill which these amendments advocate. The report last year from the All-Party Parliamentary Group on Housing and Care for Older People, Living Well at Home, spelt out the case for the three-way integration of health, social care and housing. The White Paper published prior to the Bill promoted the theme of including housing more centrally in the future of social care. The House of Lords Select Committee report, Ready for Ageing?, highlights the housing requirements of older people. The pre-legislative scrutiny committee, so ably chaired by Paul Burstow MP, took this forward with strong recommendations for a higher profile in this Bill for the housing dimension. The 70 organisations in the Care and Support Alliance, which have a real understanding of the needs of older and disabled people, believe passionately that these changes would greatly improve the Bill. I beg to move.
Baroness Wilkins
My Lords, I strongly support the amendments which have been so expertly described by the noble Lord, Lord Best, and to which I have added my name, as well as Amendment 87ZC in the name of my noble friend Lord Hunt of Kings Heath.
This is an important group of amendments. In combination, they will help to ensure that housing is at the forefront of decision-makers’ minds when providing for an individual’s care and support needs. The person will be supported in a way which makes them the least dependent on health and social services only if housing solutions are properly taken into account. However, that element is all too often ignored, and dependency is ensured.
I well remember a dispirited social worker who described the effects of a two-year delay in providing an arthritic lady with lever taps. In the mean time, she had to have considerable support to wash and cook and objected strongly when that support was taken away because she was now able to turn on the taps. However, it helped to convince the council to clear their backlog of occupational therapy cases.
It is so often the case that the housing element ensures that a person can maintain their greatest independence and be enabled to live their life to the fullest extent they can. Housing solutions have to focus on the individual—ensuring that the person is at the centre of the services and not the system. There are numerous examples of how, when housing, health and social service professionals work well together, people are able to regain a control over their lives which can all too easily be lost when social or health care are seen as the only options.
Lord Rix
My Lords, having heard the words about Mencap spoken by the noble Baroness, Lady Wilkins, I, as president, must of course support this amendment. I say “must”, but I am surprised that these amendments have to be tabled at all. I would have thought that any Bill dealing with care must deal absolutely explicitly with housing. After all, noble Lords will remember when the long-stay, sub-normality hospitals were closed in the late 1970s, the 1980s and the early 1990s, the very thing that was required was housing. Mencap did provide the housing in those days, as best it could, with the Mencap Homes Foundation. It has progressed now to Golden Lane Housing, which allows people with a learning disability actually to own their own housing with the appropriate support. These provisions are necessary, and I am amazed that these amendments were necessary in the first place.
Baroness Jolly
My Lords, I support this suite of amendments—this flight of amendments—on housing. As noble Lords have eloquently said, housing is the third side of the care triangle. Those of us who sat on the scrutiny committee were absolutely clear on that. We thought that it had been extended to our report, but clearly it has not been reflected totally in the Bill. There was mention of it in Clause 1, the well- being clause, in Clause 6 on co-operation, and also in Clause 8 on how to meet needs. The noble Lord, Lord Best, has filled in the gaps, with Clause 2 on prevention, Clause 3 on integration, Clause 4 on the provision of information and advice, Clause 5 on market shaping and Clause 9 on the assessment of needs. In each of these elements of the Bill, housing is imperative. The anxiety that many of us share is that if housing is not in these clauses, it will not be dealt with when an individual is assessed, or when there are issues around integration.
In the Select Committee, the most compelling witnesses were from the housing sector. They understood the impact that appropriate housing, and any adaptations to houses, would have on the lives of the people living there—on the health and well-being of the individual. The amendments in this group put housing where it should be. It is core to assessment and core to integration of care. It is a preventive measure, and it is also core to the provision of information. There is no point in having a conversation as a result of your assessment and as part of the information process if you are not aware of what your housing needs are, because without housing, the conversation makes no sense.
Local authorities need clear direction from the Government. The noble Lord, Lord Best, articulated this clearly when he introduced his amendments. Some health and well-being boards have got it and some have not. Those that have not should have it spelled out, so the amendments in this group are absolutely appropriate. I hope that my noble friend, when he sums up, will reassure the House in this regard.
Baroness Emerton
My Lords, I support the amendments of the noble Lord, Lord Best. I also support what my noble friend Lord Rix said about closing the large institutions and providing the necessary housing. The reason the necessary housing could be found, either through charities or local authorities, was that it was clearly spelled out in government policy. I therefore strongly support the need for this provision to be in the Bill. Without that background, I would have found the job of closing two large institutions extremely difficult, because there was resistance from local authorities and local communities to providing suitable accommodation. However, as it was government policy, we were able to persuade and influence the local authorities to do it. Therefore, I support the amendments in this group.
Lord Campbell-Savours
My Lords, I will speak primarily to Amendment 88, in the wider context of Clause 9, and put an idea to the Minister that dawned on me during conversations with local authorities that are faced with problems in this area. Clause 9 deals with the assessment of an adult’s needs for care and support. It states:
“Where it appears to a local authority that an adult may have needs for care and support, the authority must,”
carry out an assessment. The clause goes on to list what the assessment must include. Amendment 88 would add,
“housing options to contribute to the achievement of those outcomes”.
What struck me as an outsider looking into these matters is that, irrespective of the changes to which the noble Lord, Lord Rix, referred, problems still arise where elderly people—perhaps in their 80s, 90s or whatever—have to transfer out of their homes, which they may well own, or from hospital into some kind of care environment, perhaps a nursing home. I wonder whether it would be possible for that process to be made more seamless in circumstances where a local authority took on the responsibility of marketing—I shall come on to what I mean by “marketing”—the home for sale, clearing the home and making all the arrangements for the transfer of that resident, be it from their home or from hospital, into a care environment.
It may be that a local authority could offer a package. At the moment, that package, in part, is offered by some of the charities. I have spoken to charities, such as Age Concern, which carry out various components in this process of transfer but I wonder whether money could be raised by local authorities through taking a proportion of the commission on the sale of properties by estate agents. In other words, a local authority would advertise within its area and estate agents could tender for the right to handle the properties for which the local authority took responsibility in this process of seamlessly transferring people from their homes to a caring environment.
As estate agents would not necessarily know whether they would get that business if it was organised in the wider market, if they knew they were going to get all the business provided by the local authority—in other words, that they would be the estate agent responsible for carrying out the process of transfer in a particular district—they might be prepared to share their commissions with the local authority because they had access to business which they might not otherwise have had. It would provide a revenue stream.
As we introduce amendment after amendment to the Bill, I keep thinking, “Where is the money coming from?”. It has to come from somewhere. It is all right Parliament passing legislation placing all these new responsibilities on authorities but, at the end of the day, the local authority has to find a way of raising the revenue. If local authorities could somehow attach themselves to the revenue from the sale of houses, it might well provide an income stream—and what better way to do so than to provide a package for the seamless transfer of the elderly into a more caring environment? I put it simply as a proposition that the Minister might wish to consider over time.
Lord Martin of Springburn
My Lords, everyone supports these amendments. I do not wish to detain the House but I would like to add my voice to that support.
When I became a councillor in 1973, it was my duty to concern myself with the housing problems of constituents who lived in my ward. After seven years, when I became a Member of Parliament, I thought the housing problems would go to the councillor who took my place. That was not the case. Right up to my last week of being a Member of Parliament, I was still receiving housing complaints and problems. I recall in another life, when I was a member of the Labour Party, some of my friends saying, “Education, education, education”—that was the motto—but I said there should be something else: “Housing, housing, housing”.
If people do not live in decent homes, they will not be able to do anything. If dampness is coming down the walls, the brightest child will never be able to study properly and get the best out of his or her education. So I say to the Minister that sometimes it is the simple things that matter in housing, not the expensive things that the noble Lord, Lord Campbell-Savours, has referred to.
I have mentioned dampness. There used to be a great deal of dampness in some of the houses in my area of Glasgow. A scheme was introduced—all credit to the Government, as it was not just the local authority —to bring in central heating. What a difference it made to the health of the young and old who lived in those houses. They could get up in the morning to a warm house and go to bed in the evening in a warm house. It meant that bronchitis, emphysema and all the other problems were greatly reduced.
Baroness Howarth of Breckland
I want to bring us back briefly to the amendments that we were discussing. Broadly, housing obviously has a tremendous impact on people’s lives, but we are talking about inserting the word “housing” in a number of clauses that will enable co-ordination between health, social care and housing.
Many local authorities and well-being boards, as the noble Baroness, Lady Jolly, mentioned, already have it—that is, if you achieve this co-ordination, you will make savings and produce better outcomes for the individuals being helped. Having it on the face of the Bill will ensure that the leadership of all these authorities has to pay attention to it, and I think that is important. At the moment we have a postcode lottery. If you are fortunate enough to live in an authority that has got it together, your adaptations will arrive; you will have all your other housing issues sorted out, along with your care package, and, if you are an old person in hospital, you will be out in a very short time. If you are a person with a disability, as that disability increases, or if you have a sudden disability, your adaptations will appear because there will be that co-ordination.
In many local authorities, however, the housing department can opt out and not play its part, which causes huge delays—I speak as someone who works in a number of charities and with people with disabilities. I want to support the amendment’s inclusion in the Bill so that the leaderships of authorities have to take it to heart and so that we do not have a postcode lottery and this is all part of strategic planning for the authority.
Baroness Wheeler
My Lords, the Joint Committee on the Bill acknowledged that it had been widely welcomed, but asserted that this did not mean that it could not be improved—there are gaps and risks and unintended consequences. The failure of the Bill adequately to underline the importance of housing not just to well-being but to integrated care, to prevention and to being included in the provision of advice and information on quality of care and assessment is what these amendments seek to address. The interplay between housing and well-being—the standard of someone’s living circumstances and their health condition, the appropriateness of their house or flat and the likelihood of their being able to remain in it and care for themselves—is long established. However, as noble Lords have shown, it is overlooked in key clauses of the Bill.
Our Amendment 87ZC takes forward the vision of specialist houses fully integrated into the health and social care system which was so comprehensively set out by stakeholders from across the housing sector in their evidence to the Select Committee. The quality of that evidence was commented on by the noble Baroness, Lady Jolly. There are numerous examples of inspiring best practice where housing is an integral part of care and support and service delivery. The Bill needs to provide the momentum for good practice to become embedded across all local authorities and health providers.
The evidence to the Select Committee from organisations across the housing sector cites inspiring examples of where housing, health and social care provision and support join up to provide integrated person-centred care. However, alongside this, there is huge frustration that progress across the country has been so slow and patchy. This is especially so when what stakeholders refer to as low-level interventions, which really make a difference, are often the services earliest to be cut back and dispensed with. The Anchor Trust, for example, described the determination to keep its service-level manager on site at one of its sheltered housing schemes because it made all the difference. The noble Lord, Lord Martin, made this point, too. Anchor said that, in its view, once the manager left, the next steps for elderly and frail people were usually into residential care. This was one of the many examples given of the consequences of not having housing-related support regarded as a key social determinant of health. I look forward to the Minister’s explanation as to why the Government have not ensured that this is fully reflected in the Bill.
Earlier, we heard the case from the noble Lord, Lord Best, and my noble friend Lady Wilkins for Amendment 81, supported forcefully by the noble Lord, Lord Rix, on the importance of including the promotion of housing provision in the duties of local authorities under Clause 3 to provide integrated services, and of ensuring that there are similar duties placed on the health service. Our amendment to Clause 6 complements this by reinforcing integrated joined-up working with registered housing providers, including housing associations and registered social landlords, and recognising these as key, relevant partners under the Bill.
The need to recognise housing as a preventive service cannot be overestimated or overemphasised. Schemes such as Midland Heart’s reablement service for the elderly or frail combine social care and housing association support to enable people to be discharged from hospital back to their homes quickly and help independence to be regained. They delay or prevent the need for more intensive care, reduce the likelihood of repeated hospital stays and can prevent avoidable accidents. Commissioners need to be encouraged to consider specialist housing, home-from-hospital services, housekeeping-related support and adaptations when designing preventive services. Housing is a crucial preventive service and Amendment 80 is important for ensuring that this is recognised in the Bill.
Amendment 88 is also important for ensuring that needs assessments include an assessment of housing options, as is Amendment 86, which underlines the importance of ensuring that local authorities provide information and advice for adults and carers on available housing options and the choice of providers available in the authority’s area. While in Amendment 87 we fully recognise the need for more specialist housing to be built to meet the needs of care and support, we would be cautious at the present time of putting this extra burden on local government when it does not have the resources or the means to deliver. It is the responsibility of national government to provide the £10 billion extra investment in infrastructure that the International Monetary Fund has called for to get the economy moving and make shovel-ready projects such as housing happen.
I am grateful to the National Housing Federation for its excellent briefing, and I refer to an example of integrated care and support it gives that was provided by one of its members, the housing association Look Ahead, for a psychiatric patient. It shows what can be achieved. Following a six-month stay in hospital, it had initially been intended that he should move to a residential care placement, but instead he was referred to Look Ahead’s rehabilitation service. The support that he received helped him with basic life skills, diet management and managing his condition. After 18 months, he had successfully moved to his own flat, had been able to reduce his psychiatric medication and had started a nursing diploma. This service, taking him from hospital to independence in his own flat in 18 months, was provided by successful joint working between the housing association, the local authority and the NHS trust, with an estimated saving of nearly £250,000 across the three services.
We heard, too, at our latest stakeholder group meeting yesterday about a successful jointly procured and delivered reablement centre in Liverpool that is funded by the local authority and the clinical commissioning group in respect of hospital discharge. The scheme provides two to three weeks of intensive occupational therapy and other key services, which doubled from 40% to 80% the percentage of patients who did not require a continuing care package after this initial support. However, we understand that in some parts of the country CCGs are expressing reluctance to enter into joint funding schemes with local authorities in case the health funding element is leaked into other council services, given their budget situations—literally, I suppose, into filling potholes or such like. Can the Minister tell us what steps are being taken to reassure CCGs about this potential barrier to providing integrated services?
As part of its oral evidence, Jake Eliot from the NHF said:
“Too often, the integration that occurs happens because service users, carers, providers and commissioners are working skilfully in spite of the system rather than because of it”.
This is something that the Bill can change effectively. I hope that the Minister takes these words to heart and accepts the amendment. It would ensure that the Bill recognises the importance of housing. It is important not just for well-being but for prevention, for the provision of advice and information in the assessment process and for ensuring that the overall quality of care is fully recognised.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, in tabling these amendments, the noble Lord, Lord Best, brings to the attention of the Committee the important role that housing plays in both care and support, and as a determinant of well-being. I have listened with care to the powerful contributions in support of them. Having done so, I begin with an observation that I hope is incontrovertible, which is that simply having a roof over your head will have a profound impact on your well-being. Having access to suitable housing for those with care and support needs plays a vital role in promoting not only their well-being, but their independence. The noble Lord, Lord Best, brought this point home very well. Properly taking into account the suitability of someone’s living accommodation could, for example, help to prevent a frail older person from falling and thus suffering the pain and trauma of broken bones and an unnecessary stay in hospital, the need for a greater level of care and support following discharge, and the costs of this to the public purse. It is vital that the system actively works to promote independence rather than waiting for people to reach a crisis point.
To reflect the importance of housing as a determinant of well-being, we have explicitly included the “suitability of living accommodation” in Clause 1(2), which sets out a list of things to which well-being relates and that the local authority is required to promote in performing its care and support functions. Furthermore,
“accommodation in a care home or in premises of some other type”,
is set out in the high-level list of examples of how to meet needs in Clause 8. Together, this means that the Bill ensures that housing is an integral part of care and support, where it is not general housing as excluded by Clause 23.
Lord Best
My Lords, I am deeply grateful to all those who have participated in this debate, particularly the noble Baroness, Lady Wilkins, for coming in so supportively and giving us those really practical examples. It is astonishing that, in the case she mentioned, £50,000 a year was being saved, giving a much better life to Bruce, the tetraplegic she talked about. Big money is being saved in improving people’s lives, absolutely underlining the essence of what we are trying to do here. I am grateful to the noble Lord, Lord Rix, for bringing in the Mencap dimension so fully and reminding us of those old mental institutions, which the noble Baroness, Lady Emerton, was so instrumental in closing, and how housing was seen as the link that really mattered.
I am grateful to the noble Baroness, Lady Jolly, for pointing out how important the Joint Committee thought this to be. I know that members of that committee have not been happy that housing has not appeared in the Bill in the way that they had hoped when they produced their report.
The noble Lord, Lord Campbell-Savours, recognised that we have to find the money from somewhere. Sharing estate agents’ fees is a clever idea. The more likely one, I guess, is the transfer of resources from the NHS, because it is there that the savings are found and the two tie together so well.
The noble Lord, Lord Martin, emphasised the role of housing. He touched on central heating making such a difference to people’s homes, preventing bronchitis and emphysema and so on. When I visited the Care & Repair scheme in Leeds recently, staff told me that one of the most frequent causes of people having to go into hospital and of their homes being found totally inadequate was the fact that a central heating system that was 15 or 20 years old had fallen apart, and they did not have the wherewithal or the knowledge to replace it with a new boiler because that would involve a few thousand pounds. That one adaptation to the home alone would have made a huge difference to their health and well-being.
I am grateful to the noble Baroness, Lady Howarth, for emphasising that putting things in the Bill attracts the attention of the leadership of local authorities to their priority and importance. I am grateful also to the noble Baroness, Lady Wheeler, who emphasised what the Joint Committee on the Bill had said and how, since the previous legislation had gone through, we had seen very patchy take-up, with health and well-being boards and the rest, in recognising across the piece that housing is so important.
The Minister hoped that I would be comforted by the very full exposition that he gave of how there is the implication in so many places in the Bill that housing should be taken on board. I am sure that it is the intent of government that housing should be there; it is just a shame that it is so well hidden from so many of us. Although using the spending review’s £3.8 billion as a ring-fenced sum will require people to be more joined-up, including in relation to disabled facilities grants, and although the legal basis is no doubt in the Bill, it would be helpful if that was more overt and the Bill could make it a little clearer. We may want to return to this matter when we have heard about the compact that the Department of Health is working on, which would be very important if it emphasised housing in a fundamental way. For the moment, I beg leave to withdraw the amendment.
Baroness Wheeler
“( ) In exercising its duties under this section, a local authority must have regard to the relevant joint strategic needs assessments and joint health and wellbeing strategies required under sections 116 and 116A of the Local Government and Public Involvement in Health Act 2007.”
Baroness Wheeler
My Lords, the amendment is supported by my noble friends Lord Hunt and Lord Beecham. I shall speak also to our Amendments 81C and 87ZZA, as well as to other amendments in the group.
As my noble friend Lady Pitkeathley showed last week, we on these Benches will never tire of banging the drum for the importance of integration of health and social care—and housing—from the point of view of patients, service users and their carers. Our amendments would include in Clauses 3 and 6 specific reference to the body that stands the best chance locally of making this happen: the health and well-being board. These clauses deal with integration and the duty of local authorities to co-operate with relevant partners. We also stress in respect of these clauses, and Clause 2 under our amendment in an earlier grouping, the importance of the Bill emphasising a joint responsibility for co-operation and collaboration between local authorities and relevant partners, such as NHS bodies in their area.
Baroness Greengross
My Lords, I rise to speak to my Amendments 87ZA and 104A. I thank the noble Baroness, Lady Wheeler, for what she said and I heartily agree with her.
We read far too often about frail older people blocking beds in hospital wards and, apparently unintentionally, making the health service very difficult to function properly. However, they are there due to inadequate planning. These two amendments are intended to try to ensure that the discharge process is started when somebody goes into hospital—that is, right at the beginning of their stay in hospital.
We all have experience of very poor practice. My personal experience is of a 94 year-old who was admitted to a London hospital as an emergency and therefore arrived in pyjamas and with bare feet. He was returned home in pyjamas and with bare feet in the late evening in winter. He had to cross a grassy patch, go into his block of flats and up a flight of stairs in that condition in order to reach his home. There was no planned process to look after him. That sort of thing is totally unacceptable. The aim of this Bill is to stop that sort of practice and to make sure that it does not happen in the future. I think that all your Lordships feel the same about this: we have to get it right. As I said, I feel that the discharge plan should be initiated when someone is admitted to hospital and it should be used as the template for the discharge, when it occurs.
I declare an interest as chairing the All-Party Parliamentary Group on Dementia. We know from one of the inquiries that we have carried out that most frail older people who go into hospital have comorbidity—that is, they have more than one condition. If they have gone into hospital for a fractured femur to be fixed or for some other physical condition to be dealt with, they will stay in hospital for much longer if they also have, for example, dementia. They stay in hospital longer partly for the same reason: that no plan has emerged to look after them when they come out. It is very bad for them to be in hospital and it is bad for all the other patients as well, for obvious reasons. We need to ensure that the local authority and relevant partners know about the special conditions of a patient to get the planning right. We need to ensure that special care and support needs are taken into account long before they leave hospital. That is the reason for those two amendments, which I very much hope that the noble Earl will accept as part of good practice.
Lord Rix
My Lords, I wish to speak to Amendment 87ZB, so wholeheartedly supported by the noble Baroness, Lady Wheeler. It would add providers of relevant services to the list of relevant partners of the local authority. The amendment lays the foundation for a number of amendments which I have tabled in the safeguarding section of the Bill, which will be taken later. There has been widespread concern that the mechanisms and procedures in place to safeguard adults at risk of abuse or neglect are totally inadequate.
Time after time, we have witnessed how processes have failed or safeguarding has not been taken seriously, which has led to serious consequences for people with a learning disability. For example, there is the death of Francesca Hardwick and her mother Fiona Pilkington, the murder of Steven Hoskin, and more recently, the abuse scandal at Winterbourne View. There have been a number of prominent cases where the provider has failed to co-operate in providing information on adults at risk or where cases have occurred such as that reported in the aftermath of Winterbourne, where the provider declined to share information for the serious case review and there was no requirement on it to do so.
The amendment is therefore intended to add providers as relevant partners, so that they are in the frame for further amendments to the safeguarding part of the Bill in Clauses 41 to 46. When we talk about providers, I am referring to those who are providing a service which has been commissioned from a person's care plan, such as care and support or education services. Although I appreciate that regulations will set out other relevant partners, we feel that providers should be named explicitly in the Bill. This will emphasise the importance of the provider of services being subject to the duty to co-operate and will bolster the safeguarding process accordingly. I look forward to hearing the Minister’s thoughts on the matter.
Lord Sutherland of Houndwood
My Lords, I give particular support to the amendment proposed by the noble Baroness, Lady Greengross, for two reasons. First, we all know from a passing acquaintance with hospitals either in our own or relatives’ cases that they are large and complex organisations. Unless a proper assessment is made early on after someone’s entry to hospital needing care, the entry will not be recorded. If it is not recorded, you can be sure that those responsible for the discharge of the individual will not have been present when the assessment was made.
The complexity of the system is such that that is how it is—would that it were better and, doubtless, it can be better, but the reality is that unless a proper assessment is made and recorded, those discharging someone from hospital will not be able to specify adequate provision. In education, we all talk about added value. That concept has a place in hospitals. What will be the added value that will allow a proper discharge and will, in that process of discharge, ensure that the patient in question will not return early to hospital? That is the second reason for supporting the amendment of the noble Baroness, Lady Greengross. The research that I have seen indicates that where inadequate care is provided—that includes care plans not made at the point of discharge—the individual is many times more likely to find themselves back in hospital within the month. It so happens that I have seen research related to intensive care units, where you might expect that to be even more prevalent, but it applies across the board. To be sure that the care is right is to be sure that the care plan is right. My argument in supporting these amendments is that that has to include an assessment at the beginning. It helps, too, when a patient is moved to another more specialised hospital. That happens quite often as the investigations take place, so there is a great need for this.
Baroness Barker
My Lords, I wish to speak to Amendment 82A, which is in my name in this group, and to support the amendments in the name of the noble Baroness, Lady Greengross. For well over a decade, we have had evidence that the recovery rates for people being discharged from hospital during the week, through to people being discharged on Friday, vary enormously. There has been evidence in abundance for the past decade that the failure to integrate care plans for people leaving hospital with community services leads to their readmission into hospital as an emergency—and in some cases, to their death. All the factors that contribute to that should not be news to anyone who has ever read about delayed discharge.
At the heart of our failure to really look after older people who go in and out of hospital is not just the failure to carry out assessments at the proper time but the failure to share that information with all the relevant people along a care pathway. It has been interesting, particularly over the past year, to begin seeing something of a change taking place both in health and social care. One of the driving factors behind that are the shared outcomes frameworks to which health, adult social care and mental health now have to work. The fact that we have the five overarching domains and that each of them is working to performance indicators below them is beginning to have a real influence, not just on high-level strategic planning but on front-line work.
We have always known that there have been excellent examples of integrated care. Where care works well, it works fantastically well and where it does not, it is just a disaster. The trouble is that we can never really pinpoint and identify where that will happen, other than that the systems that work well are always those which have the patients at their heart, involved in the planning process as well as being recipients of care.
My Amendment 82A is prompted, as I think noble Lords will know from last week, by the Christian Scientists—the people who, as part of their belief system, wish it to be known that their care should not involve medical treatment because that is incompatible with their beliefs. Beyond that small group of people, whose beliefs I do not share, it is important to register in all this that when we are building systems that assess the needs of older people there has to be within them a point at which older people can dissent, particularly if quite forceful medical decisions are being made about their care. Sometimes we get incredibly enthusiastic in our support of doctors and manage to let that take things over completely.
The noble Baroness, Lady Greengross, has highlighted the key points that we need to focus on because, at the end of the day, integration depends entirely on all the different care providers in the pathway working to common information. If we cannot start now to develop those systems, we will not achieve what has proved for so long to be that elusive solution to integrated care.
Baroness Wall of New Barnet
My Lords, I also support all these amendments, particularly in relation to the previous discussion of getting older people out of beds that they are blocking, as I think the noble Baroness, Lady Greengross, put it. That is perhaps an inappropriate word but, in reality, those are the facts. The care plan that everybody has talked about is important, and hugely effective when it works. I have to admit that in my own hospital—I declare my interest as chair of Barnet and Chase Farm Hospitals Trust—it does not always work. Very often, the breakdown with the local authority can come from the start of the agreement on a care plan—what will happen to the individual, how many X-rays they will have, where they will go at the end and so on.
One of the good things in the new system—there are several—is the CCGs. The relationship between clinical commissioning groups and local authorities is proving, in the very short time that it has been working in my area, effective. The more pressure on commissioners in terms of getting hospitals running better, the more interest they have in making sure that local authorities are doing their bit as well. That partnership, in my view and my experience of the past months, has been working much better, which, for us, is a very good thing.
Baroness Gale
My Lords, I will speak to Amendments 92ZZEA and 92ZZEB. Clause 22 is titled:
“Exception for provision of health services”.
Subsection (1) is crucial, as it sets out the legal test for when NHS continuing care or registered nursing care should be provided and when the means-tested social care system may lawfully provide for nursing care.
Recently, I have been listening to people give evidence to the APPG on Parkinson’s, which I chair and which has been conducting an inquiry into NHS continuing care. Listening to the witnesses, it has become very clear that there are often lots of problems with the health service and social care services arguing over funding. People are having difficulty accessing continuing care under the NHS and have to get over lots of barriers. It is quite heartbreaking to hear the problems that people are having.
The wording of Clause 22 still carries a potential risk for those who self-fund their care. There are various provisions in the clause that allow local authorities to arrange for health services that should be provided by the NHS. Once councils start delivering healthcare, when they traditionally used to deliver means-tested and chargeable social care, there is a risk that someone—somewhere in the system—will mistakenly conclude that the council can charge for those services. There is a need to ensure that self-funders are not exposed if they are found to be eligible for NHS continuing care, or registered nursing care, and the package of delivery is with the local authority. These matters were raised by the Joint Committee scrutinising this Bill but have not yet been addressed.
In legal terms, local authorities are prohibited from providing anything authorised or required to be provided under the NHS Acts. This means that social services cannot provide care home accommodation if a power or a duty to provide the accommodation exists under any of the NHS Acts. Clause 22 has narrowed this down to just “required”, for example by omitting the “power” or authorisation provision. That leaves local authorities able to provide accommodation that the NHS has a power to provide. I believe that disputes and confusion have occurred between councils and the NHS over continuing care, and this seems to be a recipe for more. The Bill should be amended to prohibit local authorities providing a service or facility that is authorised or required to be provided under the NHS Act 2006.
My amendment would mean that local authorities would be prohibited from providing health services that are authorised or required to be provided under NHS Acts. My aim is to make it clear who can deliver what, so as to avoid self-funders being at risk, however small that risk might be, of having to pay for care that they should be getting free.
Clause 22(4)(a) also states that a local authority may, despite the prohibitions, arrange for care home accommodation with nursing care if it has consent to do so from the clinical commissioning group. This may also put self-funders at risk of being charged for services that should be free.
These amendments would introduce an explicit clause that sets out that, where a local authority provides services on behalf of a clinical commissioning group, the authority may not recover the cost from the individual whose needs are being met. I trust I have set out clearly why these amendments are needed and I hope that the Minister will agree with me.
Earl Howe
My Lords, it is vital that care and support, health and other services are joined up, as this offers the potential to make measurable improvements in individuals’ outcomes and experiences of care and support. Clause 3 places a duty on local authorities to carry out their care and support functions with the aim of integrating services with those provided by the NHS or other health-related services such as housing. Amendment 81C, tabled by the noble Baroness, Lady Wheeler, raises the issue of co-operation duties on the NHS; I have no issue with that sentiment. Clause 3 is intended to reflect the similar integration duties placed on NHS England by Section 13N, and on clinical commissioning groups by Section 14Z1 of the National Health Service Act 2006, in the context of this Bill.
Clause 6 imposes a general duty to co-operate between the local authority and other relevant authorities that have functions relevant to care and support. Clause 7 supplements this by creating a specific duty to co-operate in individual cases.
Clause 22 sets out the limits on what a local authority may provide by way of healthcare and so, in effect, sets the boundary between the responsibilities of local authorities for the provision of care and support, and those of the health service for the provision of healthcare. Our intention is to replicate the effect of the current prohibitions on what a local authority may provide by way of healthcare, which are imposed under Sections 21 and 29 of the National Assistance Act 1948 and Section 49 of the Health and Social Care Act 2001. This is a matter eloquently raised by the noble Baroness, Lady Gale, in tabling Amendments 92ZZEA and 92ZZEB.
The word “authorised” in Section 21 of the 1948 Act has resulted in much confusion and case law. The intention behind Clause 22 is therefore to simplify the language and to make the boundary clearer without moving it. Make no mistake: where nursing care is being funded by the health service, it will continue to be unlawful for a local authority to recover the cost of this from the individual. It is the relevant clinical commissioning group that would be responsible for this cost.
On Amendment 82A, I wholeheartedly agree with my noble friend Lady Barker that no one should be given medical treatment or be medically assessed against their wishes where they have capacity to make such a decision. I hope that my noble friend will be reassured that the existing legal position and clinical practice is clear on that point.
Amendments 87ZZA and 81B were, again, spoken to by the noble Baroness, Lady Wheeler. The prominence of health and wellbeing boards will be strengthened through their role in signing off the joint plans that are required as part of the £3.8 billion pooled fund between local authorities and the NHS to support joined-up and integrated working. The need for local commissioners to engage with their health and wellbeing boards is made clear through their composition, which includes the director of adult social services, the director of children’s services, the director of public health and a representative of each relevant clinical commissioning group. The duty to co-operate already applies to these health and wellbeing board members.
Baroness Wheeler
My Lords, I thank the Minister for his comprehensive response. We need to reflect very carefully on the issue raised by my noble friend Lady Gale in respect of NHS continuing care and the social care boundary and its impact on self-funders. I will discuss with her whether we need to return to this issue on Report. She is right to mention the Joint Committee, which is particularly concerned. We need to be absolutely reassured that the Bill takes these issues forward.
I will study the Minister’s comments on health and well-being boards. He more or less agreed with me but did not want reference to them in the Bill. However, he accepted my Amendment 81C—which is a first for me—so I am grateful for that. With those comments I thank noble Lords for a very important debate, particularly on hospital discharge, and I beg leave to withdraw my amendment.
Baroness Meacher
Baroness Meacher
My Lords, Amendment 82B has the effect of requiring local authorities not only to provide information about the system of care and support, how to access it and so forth, but also to take action to facilitate access to that information; that is, to try to make sure that people know it is available. My remarks also apply to Amendment 86C, to which I have added my name, which requires that the local authority must produce or arrange for the production of packs of information relevant to the needs of individuals with specific medical conditions and ensure that these packs are provided to individuals following the diagnosis of a specific condition—not waiting until much later on, when they probably need social care or other intervention.
First, I apologise to the Minister and to your Lordships that I was unable to be here for earlier sittings of the Committee. I have been out of the country a lot on other Lords’ business and just have not been able to participate. I also must thank the Alzheimer’s Society for its help with these amendments.
I join other noble Lords who have welcomed the Bill, which has an emphasis on the provision of care and support for people who need it. I was impressed by the quote at the top of the Department of Health Factsheet No. 1, which states:
“Information, information, information; without it, how can people be truly at the heart of decisions? Information should be available to all regardless of how their care is paid for. There are some things that should be universal; information is one”.
That is from a Department of Health document; perhaps other noble Lords have quoted it before me, in which case I apologise. The point is that if people are unaware that information and advice are available, they are unlikely to look for them. We can assume that if these amendments are not accepted by the Government, there will be considerable underuse of information services and, of course, that the people who will lose out will, as always, be the most vulnerable—those who most need that information.
The Alzheimer’s Society tells me that it frequently hears of the difficulties people face when struggling through the complexities of the health and social care system for the very first time. Too often, people with dementia and their carers report that they did not have access to the information and advice they needed because they simply did not know it was available. We all know that feeling: if only we had known that it was available, we would have looked for it, whatever it was. Sadly, people often come across services by chance and far too late.
If a person in the early stages of Alzheimer’s is aware of a memory clinic, for example, which can either provide help itself or refer the client on to organisations such as the Alzheimer’s Society well before they need social care, the client can make adjustments to help them continue living as normally as possible and for as long as possible in their own homes. These are simple things like putting a note on the front door that says, “Are your keys in your pocket?”, and suchlike. With guidance, carers can gradually increase the home adjustments as they notice the need for them and thus defer the need for the involvement of social services and ultimately residential care.
Noble Lords will know the point that I am coming to. We all know that resources are incredibly tight. The point is that timely information and making people aware that it exists is very cost-effective. If you manage to keep people in their homes much longer, and if you manage to help them avoid social services intervention, all this will save taxpayers’ money. We can expect that a small spend on a proactive approach to information provision will save the taxpayers a great deal of money over time. I beg to move.
Baroness Greengross
My Lords, I support Amendment 82B in the name of the noble Baroness, Lady Meacher, to which my name is also listed. At the same time I speak to Amendments 83, 83A, 84, and 85. I think that Amendment 86C is in the next grouping; I hope that I am right.
On Amendment 82B, we know that many people, as well as their carers, say that they did not have access to the necessary information and advice—and that they did not even know that it was available. They have had to seek out the information themselves. We are talking about people who are vulnerable and often at crisis point. It is the worst time for either frail people or their carers to have to find out where to go and how to find the advice they need. I would add that, in my long time working in this field with older people, I once had a telephone call from a Minister in the department whose mother needed care and who was asking me to help because this Minister had no idea where to go to get the information and advice. It is not just people who do not know their way round the right office—it is all of us at certain times. We just do not have the knowledge of where to go.
If we require local authorities to adopt a proactive approach to information provision, perhaps it will ensure not only that people have the right information at the right time but that the information is in a format that is accessible. This will help people to get the right care and support in place and give them the confidence they need in very difficult situations.
On Amendments 83, 83A, 84 and 85, I was very pleased to see that, in Clause 4, the Government have incorporated a key element of the Joint Committee’s report into the Bill, namely that it is part of a local authority’s duty to establish and maintain the service for providing people in its area with information and advice. We must make sure that advice relating to care and support includes information about access to regulated independent financial advice.
The Bill will also oblige local authorities to offer deferred payment agreements which will involve local authorities in taking an interest-bearing charge on the property of an individual against the cost of care fees which, as we know, will be repaid after the individual’s death. As has been said, however, individuals offered these products may be highly vulnerable. They expect the same authority to assess fairly both their eligibility for care and their ability to fund it, as well as providing appropriate advice and information about a financial product which the local authority itself is offering to pay for that care.
In a way this is in competition to FCA-regulated financial products, so, obviously, there is a potential conflict of interest here. This conflict is exacerbated if the care for which the loan is made is directly provided by the local authority and if the level of charges and interest are also determined by the local authority. It is therefore very important that people are directed towards regulated financial advice as part of the decision-making process. This amendment seeks to do that through regulated, accredited financial advisers such as the people who are members of SOLLA, the Society of Later Life Advisers. Only in that way can the development of safe and secure financial products be facilitated.
Baroness Browning
My Lords, I will speak to two amendments standing in my name in this grouping. The first is Amendment 86H, to which the noble Baroness, Lady Pitkeathley, has put her name. This deals specifically with proportionality and early identification in providing information and advice.
In its report on adult social care, the Law Commission argued that it was essential that the issue of proportionality be addressed in the regulations setting out the assessment process. The Law Commission stated that where a person has complex or multiple needs, a proportionate assessment would require an in-depth and comprehensive exploration of those needs—something which we have already heard about this afternoon. Defining complex needs can be difficult, with the full extent of needs not always immediately identifiable. For instance, older people in particular do not always present their needs accurately on first or subsequent contacts.
Deploying qualified social work staff across all areas of service provision, including the information and advice stage, would help—as this amendment seeks to do—to ensure that the potential for complexity is recognised early on and the individual receives signposting to non-statutory services and/or initial statutory sector support proportionate to their needs.
Looking round the Chamber, I see several people who I meet on a weekly basis as we are currently carrying out post-legislative scrutiny of the Mental Capacity Act. The assessments of capacity across a range of people—not just the elderly, who are very important, but even much younger people—are extremely important. It is extremely important that there are qualified social workers who are involved in this exercise.
To have the social worker available at the pre-assessment stage, as part of an information and advice team, would allow unqualified staff the benefit of accessible professional support. I am aware that the College of Social Work supports this measure and the duty on local authorities to ensure that in providing advice and information, qualified staff are deployed in sufficient numbers to ensure that all aspects of need are taken into account. This would ensure that people are put in touch with the most appropriate services for them from the earliest opportunity.
I am aware of the letter that my noble friend sent to the noble Lord, Lord Hunt, dated 27 June, in which he covered in the first paragraph the query by the noble Lord, Lord Warner, about ensuring that there are sufficient skilled workers. When he responds, would he cover this question of sufficient qualified social workers? His reply to the noble Lord dealt mainly with staff employed in the health service as opposed to social services. We have heard a lot in these debates about the need for multidisciplinary teams in decision-making, so I would be grateful if he would address the question of the number of skilled social workers who might be deployed, particularly at the initial information and advice stage when early assessments are carried out.
My second amendment in this group is also in the name of my noble friend Lady Barker. It addresses the question of independent advocacy and proposes a new clause. Of course, I am aware of the role of, and the statutory requirement for, IMCAs in the Mental Capacity Act. I will not pre-empt the findings of the post-legislative scrutiny committee on the Act, but I will explain why I felt it necessary to propose a new clause in the area of independent advocacy. I refer the Committee to my interest in the register, and in particular my ongoing interest in autism, mental illness and people with learning disabilities.
The right to advocacy is essential to enable the people who find it hardest to communicate to exercise their rights, represent their interests and obtain the services they need. Clearly, if somebody is deemed not to have capacity, there is already statutory provision for an IMCA to assist them with decision-making. However, it is also vital that those who experience substantial difficulty in understanding, retaining, using or weighing information relevant to an assessment, and then expressing and communicating their views, should also have access to an advocate. I referred just now to autism. People on the autistic spectrum might be deemed to have capacity but their disability might mean that they would have difficulty on their own, without the help of an advocate to explain and help them work through the decision-making process. That group is not adequately covered by the provisions of the Mental Capacity Act.
Advocacy is separate from information and advice. It provides support to some of those who are most vulnerable and most in need of services, including those with autism. There was a recent commission on autism and ageing chaired by the noble Baroness, Lady Greengross. Both she and I have had to forfeit the presentation of that report to be here in the Chamber. The report found that the families of people with autism frequently act as their advocates. Ninety-six per cent of parents with a son or daughter with autism recently told a National Autistic Society survey that they were concerned about what would happen when they passed away or were unable to support their children. This fear is common to parents of people with many different lifelong disabilities, not just autism. Families frequently say how worried they are about what will happen when they can no longer perform an advocacy role, and that independent advocates must therefore be available.
If the Bill is to help ensure people access the support they need—including people who are currently missing out—advocacy will play a vital role. I ask my noble friend to consider this large group of people who are not covered by existing statutory provision, for whom the new clause would provide a safety net to enable their services and package of care to go forward, thereby ensuring that they have equal opportunity to access the services that we are discussing in relation to the Bill.
Lord Lipsey
My Lords, perhaps I may remind the Committee that I am the honorary president of the Society of Later Life Advisers. SOLLA accredits the gold-standard financial advisers who will be so important to the working of the Bill.
My six amendments in this group are Amendments 83B, 83C, 86B, 86D, 86F and 86G. Before I turn to them, I will say a few words more generally about advice and the Bill. If the Bill is to do the job we all hope and expect it will do, information and advice should be not just an add-on but a central requirement, without which the Government’s plans, however well meaning, will collapse, and old people and their families will end up frustrated and angry. This is for several reasons. First, there is a widespread reluctance among old people and their families to face up to the problems of care in old age: how to get it, whether to be cared for at home or in a home, and how to pay for it. It is marvellous that people are living ever longer, but that does not mean that the very last years of their life are easy. Not surprisingly, people do not like to contemplate the years before their demise until they feel they absolutely have to.
Secondly, there is an extraordinary ignorance among older people and their families about social care. More than one person in two still thinks that the state will pay in full for the care that they will require. Thirdly—it is early days, I know—there is even less understanding of Andrew Dilnot’s solution. For example, many people—I have even come across a few in this House—think that once you have spent £72,000 on care, you will be looked after for free. This is not so. You will have to fund hotel costs of £12,000 a year. More importantly, you will have to fund the excess care costs over what a local authority would pay to look after you. That could cost a further £25,000 a year. If my arithmetic still works, that means many people will have to pay £37,000 a year after the cap has been reached, so they should plan for that.
Different people in different situations need different advice. Somebody whose care costs are paid in full needs different advice from somebody on the means test. Whatever their circumstances, very few people are capable of navigating these waters without a trusted pilot or pilots. Local authorities are experienced in conducting assessments of people and in helping them. The noble Baroness, Lady Greengross, made this point well. They have interests that may be different from, or even conflict with, those of the people they are advising. For example, under the existing deferred payment scheme you do not have to sell your house but can take out an interest-free loan. It is evident from the figures that many local authorities try like mad to persuade people not to go down that road because it costs the authority a lot of money if they do. Even if it would be beneficial to the individual, they steer them away. It is human nature. That is why it is vital that when advice is needed on this kind of subject, it should be independent of the local authority.
Baroness Browning
I agree with what the noble Lord said. Something that is rarely mentioned but is often a solution for many elderly people when they go into care is not that their house is sold but that it is rented out. That can be a very viable, practical and suitable solution. Local authorities never mention that, and nor do they have the means to provide such a service.
Lord Lipsey
I quite agree with the noble Baroness. That is exactly why independent financial advisers can be so helpful. Often, the rent on the house will pay for the whole of care, and still leave the home to be handed on to the children if that is what the old person wishes.
All this underlines the fact that it is crucial that the advice comes from people who are qualified to give it—not necessarily local authority social workers, CAB advisers, regulated independent financial advisers and so on. Nor is it any good the local authority just handing out a list of people and saying, “You can go and see them and ask their advice”. For one thing, frequently there are issues of mental capacity, and the stress on an old person at this time is likely to be severe, particularly if they are thinking of going into a care home. For another, there is the general reluctance problem, and people are also often frightened by the cost of the independent financial advice that they may be seeking.
Some local authorities in these circumstances are performing heroically. I recently opened a centre in West Sussex which combines the resources of voluntary organisations, the local authority and independent financial advisers to offer a comprehensive service. It has recently relaunched its service and a local radio station, Spirit FM 96.6, has featured it in its drive time programme every weekday, which is tremendous. Incidentally, in doing this, the local authority is not acting wholly selflessly. Many people in West Sussex who have moved out of London to retire have quite a bit of resources but do not have infinite resources. If they are not well advised on how to use their resources they will run out of money and fall back on the council and its means-tested benefits to pay for their care. However, if they are properly supported, learn to use their money well and are advised of the products that are available to help them, they will not fall back on the local authority. So this, again, is a case where appropriate advice, properly structured, can save public money, not cost it.
Lord Sharkey
My Lords, I support the amendments in this group in the name of the noble Baroness, Lady Greengross, and I shall speak to my Amendment 86E. The noble Baroness has already spoken eloquently to her amendments and I simply wish to say that not only are they compelling but it is critically important that they become part of this Bill.
The decisions that most people make under the terms of the Bill will be some of the most important that they will ever make and it is obviously critical that people are able to make them on the basis of proper and impartial information. Many of these decisions will involve taking a view about the merits of various financial products. Many people—perhaps the overwhelming majority—will have had no experience of doing this.
There will inevitably be a high degree of uncertainty about how to choose and about the detailed implications of those choices. People will need guidance in deciding which, probably complicated, financial product to buy. This is no less true for these products than for any complex financial product, with the added emphasis that a wrong or inappropriate choice could have pretty unattractive consequences. That is why I strongly support the proposal to introduce regulated financial advice into the process, as the amendments of the noble Baroness, Lady Greengross, seek to do. Only with this kind of advice can people have some comfort that they are making the correct choices in a complex and difficult area.
My amendment in this group, Amendment 86E, also deals with the information and advice that a local authority must provide. As the Bill stands, Clause 4(3) simply says:
“In providing information and advice under this section, a local authority must in particular seek to ensure that what it provides is sufficient to enable adults”,
and so on. There are two problems here. The first is the phrase “seek to ensure” and the second is the unqualified notion of “sufficient”.
I raised the issue of sufficiency at Second Reading, when I said that there appeared to be no test for it. There is no provision in the Bill for local authorities to have a mechanism for measuring and reporting the success of their efforts in providing information or on the success of that information in achieving its objectives. My amendment is intended to address those concerns. In particular, it would remove the phrase “seek to”, so that instead of local authorities having to seek to ensure that the information they provide is sufficient, they simply must ensure that it is sufficient. The phrase “seek to” seems to me to weaken the obligation placed on local authorities quite unnecessarily. It is quite possible that any local authority could demonstrate that it was seeking to do something without actually doing very much at all. Arguably, for example, the slow and gradual implementation of a plan to provide information would fulfil the local authority’s obligation.
I am sure that that is not what the Government had in mind or what local authorities would really want to do. In that case, I see no merit in having local authorities’ obligations significantly weakened by the use of the phrase “seek to”. My amendment would remove this phrase and give the local authorities a clear, simple, plain-English duty to ensure that the specified information is sufficient for the purposes set out in the Bill. If it is possible to have a measure of sufficiency, as I believe it is, it is surely possible to ensure sufficiency rather than just seeking to ensure it. Again, in plain English—or in fairly plain English—the situation is this: we want local authorities to make the information that they must provide by virtue of subsections (1) and (2) of Clause 4 sufficient for the purposes set out in Clause 4(3)(a) and (b). We want them actually to do this, not just seek to do it.
That brings me to the notion of what “sufficient” may mean and what tests might apply. My amendment would qualify “sufficient” by inserting the word “demonstrably” before it. I can probably guess what my noble friend the Minister will say about the use of the word “demonstrably”. He will probably ask, “Demonstrable to whom?” and, “Demonstrable according to what criteria?”. The phrase “demonstrably sufficient” has a clear meaning in the context of Clause 4(3)(a) and (b). It means simply that local authorities will have to be able to show evidence that the information they provide actually does enable adults to identify matters that are or might be relevant to their personal financial position that could be affected by the system provided for in Part 1. It also means that local authorities will have to be able to show that the information they provide does enable adults to make plans for meeting needs for care and support that might arise.
Commercial organisations routinely apply this kind of test to the information they put out. It is not difficult, time-consuming or expensive to do. Doing it would have the merit of providing a real test of the meaning of sufficiency and a mechanism for reporting success in delivering it. I believe that this is what the Government and local authorities want. Using the phrase “demonstrably sufficient” provides for that.
Baroness Pitkeathley
My Lords, I support almost all the amendments in this group because I acknowledge their importance, particularly from the point of view of the Joint Committee, which similarly placed a great deal of store on the provision of information and advice. Indeed, it suggested that there should at the very least be a national campaign to promote the new arrangements to those who might use them.
I rise to speak briefly to Amendment 86H, to which I have put my name, along with the noble Baroness, Lady Browning. Social workers on the whole do not get a good press. They are heard of only when things go wrong. Most of the time the vast amounts of quiet, patient work that is carried out by social workers in local authorities, the NHS and the voluntary sector is ignored. We should give their skills and the vital contribution that they make to help people find their way around complex systems more recognition. The noble Baroness made it clear that she is suggesting that a social worker needs to be involved not in all cases, but just when present and foreseeable needs are classed as complex. In those cases we must take into account that people’s ability to take in information is tremendously variable, depending on their situation and state of mind at the time. I have lost count of the number of conversations I have had with service users and carers who are totally bemused by the information they are given or the access that they have even when they manage to get hold of some information.
I will never forget the carer who gave me a wonderful illustration some years ago. She said, “I feel as though somewhere out there is a great mushroom of information. If I could just find my way up the stem, I’d find out where all this information is, and it would help me. But I don’t even know where the stem begins, and nobody seems to be able to help me”. Information in its raw state is often very difficult to interpret. It is the skill of the social worker in assessing what information is needed, when and in what form it is needed in complex cases, and signposting the information and advice that is required in every case. Those particularly complex cases need social worker involvement. Such cases are not being met and will be even less well met in the future with the new system and range of information that will be available.
Baroness Gale
My Lords, I rise to speak to Amendments 83ZA and 86A, tabled in my name. For individuals entering the world of care and support for the first time, it can be a confusing, complex and protracted process. The introduction of information and advice services for those individuals will be very welcome.
I mentioned earlier that I chair the APPG on Parkinson’s and that we are currently conducting an inquiry into NHS continuing care. Continuing care is a package of care that is arranged and funded by the NHS and is free of charge to the person receiving it. The decision for eligibility rests not on a person’s condition but on whether the need for care is primarily due to health needs. While there are just over 57,000 people in receipt of NHS continuing care in England, it is unknown how many people may actually be eligible in law and have not even applied for it, or who have failed in their attempts to be assessed properly for it. As part of the inquiry into NHS continuing care, I have been hearing from people about their real problems in accessing NHS continuing care. We found during our inquiry that people with Parkinson’s and other long-term conditions are not given information about NHS continuing care. The impression that I have been given is that, because it will cost the NHS considerably, people are not encouraged to apply for it. This leaves people with no option but to go to the means-tested social care system to have their health needs met. That situation is entirely unacceptable.
As Clause 4 introduces a duty on local authorities to establish and maintain an information and advice service, it is important that all the appropriate information and advice are provided. With the further integration of health and social care, it is essential that individuals are in full possession of the facts about all aspects of the support to which they are entitled. While the list currently provides some crucial aspects for people receiving care and support, I believe that NHS continuing care is a glaring omission. We hear of the two services arguing the differences between what is a health need, which is free at the point of use, and what is a social need, which is currently charged to the individual. This can often lead to the individual either being forced unnecessarily to pay for their own care while the debate goes on or being left trapped in their hospital bed. Although NHS continuing care is part of the health system, it must be included in the list provided by the local authorities as set out in Clause 4. People who may be eligible for NHS continuing care are also likely to have such needs that they could be in receipt of support provided by their local authority. If their needs change so as to render them eligible for NHS continuing care, there should be a seamless transition to that system that does not affect the standard of support they receive.
A strong information and advice service must include information about an assessment for health provision, so that individuals can go to this service confident that they will find out everything they need about care and support. The Care Bill offers an unprecedented opportunity to address these defects within the NHS continuing care system. Including it in the list of matters about which people should be given information and advice would promote awareness of its existence and prompt councils to refer people for assessment where they appear to be eligible for NHS continuing care. I trust that the Minister will take note of the points that I have made and that he will be able to accept these amendments.
Baroness Barker
My Lords, I declare an interest in that I work with a number of charities involved in the provision of information and advice about health and social care.
When I read this policy, it seemed to me that it reflected the practice of giving information and advice as it has been done for the past 20 years. I am not sure that that model of information and advice-giving is sustainable. It has depended largely on local bodies, many of which are in the voluntary sector and extremely professional in their services, but which provide a lot of generic, low-level advice. I do not think that that is sustainable—I was going to say in the longer term but, given the way that local authority budgets are going to have to decrease by a third by 2015, I do not think that this is sustainable in the short term either.
In future, there will increasingly be a move towards providing information digitally. New organisations and new social enterprises, such as IncomeMAX, are already heading down that path, and a number of local authorities are increasingly turning much of their provision over to that way of doing things. That is fine for people who are very well informed and who can access information in that format. What I cannot see is a sustainable funding model for the sort of high-level, complex financial advice that the noble Lord, Lord Lipsey, was talking about. This is necessary when people need to be enabled to go through the process of making decisions about, let us face it, the biggest asset that they have, which is their home. We are talking about something on an altogether different level.
We should also note that the system that we have had until now in terms of the provision of advice about social care was predicated on there being different eligibility criteria throughout the country. That is not going to be the case in future.
Like many noble Lords, over the past three or four years since Andrew Dilnot first appeared on our horizons, I have attended many seminars and lectures where people have tried to work their way around this problem. Two things strike me as being important. First, we cannot lay all the obligations on local authorities alone. At least in part, the NHS has to realise that it has to fund information and advice as part of the overall health and well-being package. I freely admit that I have yet to come across people in the NHS who truly understand the basic importance to health of information and advice. One of the first things that the department and the Government could do is to work on how we explain to commissioners in the health service why the outputs of information and advice services are important to them.
Secondly, we already know—the noble Baroness, Lady Greengross, and I know very well—that if you ask a group of older people who have assets what is the number one thing that they want, they say that they want independent financial advice. They do not believe that the people who sell them products are independent. They are right not to do so. That is a problem for the providers of those products. The only way of getting around this that might work is if, in future, some of those products have an element of money within them that is somehow passed into a pooled fund of money that comes from the private and statutory sectors and which can be put towards the provision of independent advice. That is not a worked-out idea, but it contains within it something of the ideas that the noble Baroness, Lady Greengross, mentioned, which are the key points in all of this. She is right that there is a need for regulated advice. I am not quite sure at which point a person needs that. Is that regulated advice something that they need before they come to a decision about which financial product to choose? The law that governs the regulations that exist at the moment usually comes into play when somebody decides to buy a particular product, so there is a real problem about when people have access to the right type of advice. The noble Baroness is on absolutely the right track. Somehow, in all of this, we need to arrive at a point at which resources are spent by people with the right knowledge and the right degree of independence to enable them to come to the right decisions.
Lord Touhig
My Lords, I rise to support Amendment 88G in the name of the noble Baronesses, Lady Browning and Lady Barker, and myself. It introduces a new clause which would ensure that there is a duty to provide independent advocacy.
The right to advocacy is essential to enable people who find it hardest to communicate to exercise their rights; who find it difficult sometimes to represent their interests, and therefore obtain the services that they need. I spent just over 15 years serving in the other place and, throughout that time, I remember many people coming to my surgery who wanted advice and help. In many instances, they also wanted an advocate—someone who would put their case strongly and make sure that their voice was heard.
Reference has already been made to the Autism and Ageing Commission whose report was published today. It was chaired by the noble Baroness, Lady Greengross. I sat on that commission and it brought home to me again the importance of advocacy. I recall a lady called Clare Beswick, whose brother is autistic and has learning difficulties. She said:
“A best interest decision was made that Paul should live closer to me in the south east … I had to go to extraordinary lengths to enable Paul’s needs to be met … without my support, advocacy and intervention, I believe Paul would never have had the opportunity to be moved to be near us”.
That is the importance of an advocate.
I declare an interest as a vice-president of the National Autistic Society. The society’s survey in 2012 found that 66% of respondents over the age of 50 had not had their needs assessed since they were 18. Independent advocacy could make a real difference to these people by helping them to access an assessment and ensure that it is fair and accurate in relation to their needs. Of course, from the point of view of autism, advocates must have training in the condition so that they can interpret questions effectively and help individuals who have difficulties communicating.
People with autism do not self-present. Autism is about a lack of the communication skills that we in this Chamber take for granted. If the Government were to take on board this new clause, I can simply say to the noble Earl that it would represent a major leap forward for people who need strong advocate support.
Baroness Hollins
My Lords, I want to speak briefly in support of Amendment 82B, tabled my noble friend Lady Meacher, which emphasises the need to facilitate access to information and advice services relating to care and support. This is particularly the case for vulnerable adults such as people with learning disabilities. They may benefit from specialist facilitation to access such information. I should say that I chair a social enterprise which makes information on health and social care issues easier to understand for people who find written information too difficult. I am also the carer for an adult who currently receives care funded by the local authority, and who himself needs easy information.
I hope that the Minister will agree that my noble friend’s emphasis on facilitation will add necessary strength to Clause 4(4), which states that information,
“must be accessible to, and proportionate to the needs of, those for whom it is being provided”.
Without appropriate facilitation, the information may not achieve its objectives for those for whom it is provided unless it is done in the right way and in a timely fashion. Certainly, my own experience as a carer is that at the moment far too much information of the wrong kind is often provided, which is confusing. Facilitation is also about helping to choose the right information at the right time so that people can make good use of it.
Lord Rix
My Lords, as we are approaching Statement time, I will be brief. I want to support the noble Baroness, Lady Browning, in her Amendment 88G, which advocates the need for advocacy. In the world of learning disability, advocacy is often totally essential. Information and advice which is not proportionate, frankly, can be quite useless. Advocacy may well come from parents and carers, but sometimes it can be the wrong advocacy. An independent advocate is essential to many people with a learning disability, so I wholly support this amendment.
Lord Mackay of Clashfern
My Lords, I have spent most of my life as an advocate, so I have to say how important advocacy is. I want to say a few words in relation to the point made by the noble Baroness, Lady Gale, about continuing NHS care. The point is important in that Clause 22, as the boundary between health and social care, is vital.
I would have thought—I may be wrong and obviously the noble Baroness will correct me—that it ought to be the general practitioner who advises a patient as to whether they need continuing NHS care. During our deliberations in the Joint Committee there was quite a lot of discussion about the question of continuing NHS care, and it is obvious that there is some conflict of interest. The local authority providing the care may wish to have it provided by the NHS since that would be free and not its responsibility, so the boundary between the NHS and local authorities is particularly relevant in this connection.
At the moment, I do not see how it can be for the patient to claim continuing NHS care. The GP should be able to say to the patient that they need it and that should be sufficient for it to be provided. The likelihood is that a patient would have great difficulty in assessing for himself or herself whether continuing healthcare was needed, so it must be a matter for professional advice. I think that the advice that we are talking about in this context is advice about local authority services, not about the services that the NHS can provide. However, as I say, the boundary between the two is vitally important. I hope that the point made so eloquently by the noble Baroness, Lady Gale, arising from her own inquiry, will be looked at with a considerable degree of care.
Baroness Greengross
My Lords, I hope that noble Lords will forgive me, but I forgot to speak to one of the amendments that is relevant to this group; that is, Amendment 86C. It is about people with dementia who have had a diagnosis. I know that the noble Earl will share the Prime Minister’s view and those of all of us who have looked at the number of people who receive a diagnosis of dementia. We now want to ensure that many more are diagnosed, and diagnosed early.
However, there are many reports that people diagnosed with dementia and their carers feel terribly abandoned after they have had the diagnosis. The Bill’s emphasis on access to prevention services and information and advice for people, particularly if their needs have not yet reached the threshold of eligibility for social care, is welcome. But there are no specific prompts to ensure that people receive the information they need at the time when it is most useful. The risk is that, although local authorities have set up information and advice services, the information does not reach people at the right time. A post-diagnosis information pack tailored to specific long-term conditions should be given to every individual who is diagnosed with one of those conditions. It would provide access to tailored information about the support that is available to them, and it would enable them to cope with the challenges of living with a long-term condition. The pack would provide information on the likely impacts of dementia and contain core information on national and local services. I think that this would be an important aspect of providing the right information and advice at the right time.
Lord Beecham
My Lords, this Bill has the potential to do for social care what Beveridge did for the welfare state and Bevan did for the health service. It is potentially the most significant development in, for example, residential care since the workhouses were replaced by a more civilised form of residential accommodation.
The noble Baroness, Lady Barker, anticipated precisely the point I was going to make, which is that this is not just a matter for local authorities. My principal reservation about these amendments, if I have one, is that it looks as though the entire burden of information and advice is to be placed on local authorities whereas of course, as the noble Baroness rightly said, there are other potential partners who clearly need to be involved. I scribbled on the grid that is helpfully provided by those who support the Front Bench on this side the words “in collaboration with”, and then I thought of a number of potential partners. Of course the health service is one of them, but in addition I would suggest that the Court of Protection needs to be involved. It has a supervisory and supportive responsibility for a particular group of people and, with the development of lasting powers of attorney and so on, their deputies as well. I have to say—I have said it before and I will say it again—that I am not convinced that the Court of Protection is doing a terrific job in this area, but that is another reason why it should be looked at as a potential partner.
There may be other partners. For example, in the case of younger people perhaps with a learning or other disability, there are roles for those involved in further education, the Department for Work and Pensions and the Department for Business, Innovation and Skills. Those bodies might look at their role in terms of what is available by way of education, training and so on. It seems to me that a range of organisations should be involved, certainly as a whole, but more particularly in the provision of information and advice.
On these Benches we support most of the amendments that have been moved and spoken to this afternoon, with the qualification that, where relevant and necessary, a reference to collaboration should be included. For example, in Amendment 82B, the first amendment moved by the noble Baroness, Lady Greengross, one would want to see “in collaboration with” appropriate partners.
We support the amendments, notably moved by my noble friend Lord Lipsey, around the provision of independent financial advice. That seems very important. I have a slight reservation about Amendment 86D, which is about payment of,
“the reasonable costs of a first consultation with an independent financial adviser”,
to be paid for “by the local authority”. If I am ever in need of this kind of advice, I would be able to afford that relatively easily. Given the pressure on budgets, is a universal application of that principle necessary or desirable? That, however, is a detail, that might be looked at later. Given the scale of the potential involvement and the potential conflict of interest referred to by several noble Lords, the independence and proper status of such financial advice are important considerations.
With regard to the amendment in the name of the noble Lord, Lord Sharkey, I will perhaps anticipate the Minister by quibbling over the word “demonstrably”. Frankly, I am not sure that that takes us very far. As the noble Lord admitted, what is demonstrable to some is not necessarily demonstrable to others. I do not think that that part of his amendment is particularly cogent, although I agree with the rest of it.
I have more serious doubt about the amendment of the noble Baroness, Lady Browning. Amendment 86H requires that the information and advice be provided by “social work-qualified staff”. It could be, but I am not sure that it should be a requirement that it should be, given the pressure on the service in dealing with casework as it is. I do not think that the skills of social workers are always consistent with the role of giving information and advice in the sense that is intended by the amendment.
Baroness Browning
It is important that qualified social workers are present for the initial assessment. One of the things that might come out of our scrutiny of the existing Mental Capacity Act is the fact that the assessment of capacity requires professionals. Social workers clearly have a part to play in that. Whether the person has capacity, partial capacity or no capacity at all, at that point some advice is given and direction is needed. It seems to me that that is not the role of an amateur.
Lord Beecham
That is absolutely true. Neither is the provision of information and advice. However, it is not necessarily the role of a professionally qualified social worker or a professionally qualified health visitor or other person. I agree—it is a point that the noble Baroness, Lady Barker, and I both made—that both sides, health and social work, must collaborate on this. It is perhaps the wording of the amendment, rather than the intention, that might be looked at.
There is a question about how best to proceed with the publicity that should follow the enactment of this legislation. The Joint Committee advised that the Government should work with all interested providers to launch a campaign to raise awareness of and support for the change. I hope that the noble Earl will confirm that that is the Government’s intention and bring us up to date on where the Government stands.
In the context of such a radical change, it might be desirable for there to be some pilots on the ground about this issue of information and advice, working in collaboration with the Local Government Association, the NHS Confederation and other major national partners, to look at how these matters can best be explained. There could also be, at a fairly early stage, some examination of good practice. I am not suggesting that the whole scheme be piloted but that in a few areas, after a relatively short period, there might be a process of peer review and an examination of how it is working on the ground. Given that local authorities retain their scrutiny role for health and social care, it would be worth while developing with the Centre for Public Scrutiny, the LGA and relevant health service bodies, a way for the new system to be subjected to useful scrutiny at local level, and for lessons learnt to be disseminated across the country.
There are questions about the advocacy role. There is clearly a case for advocacy being included. One notes that there is a glancing reference in Clause 8, which is the reason for the stand part debate. It looks a little odd situated between Clause 4 and Clauses 18 and 20, as it does not seem to relate specifically to either. It has been mischievously suggested that there might have been references to advocacy in other parts of the Bill at an earlier stage that were removed and this was left behind. Can the noble Earl indicate the Government’s intention in referring to advocacy in that particular clause? We are not intending to move that the clause should not remain in the Bill; this is purely a probe.
We see most of these amendments as contributing to a refinement of the Bill’s proposals and we welcome that. However, it is necessary to reiterate the need for caution about the role of local authorities, particularly in the context of the financial situation that they are facing, which will get worse under a very tight regime. The Government are making provision for this, but we must be careful that the sum is not divvied up across a range of things without seeing the whole picture. If we are to give priority to this issue of information and advice, it would be helpful if the relevant departments, together with the Local Government Association, could look at the real cost of this and ensure that it is identified and included within the total package. It is easy to add desirable things against a budget. We do not know the extent to which these matters have been costed, for example, in the sum that the Government have allocated. We know that the demand is constantly rising, partly as a result of demographic change, and that the costs are also inexorably rising. This will be a cost. It is a justifiable cost, but it needs to be identified, provided for and kept under review.
Having said that, we are very much in sympathy with the thrust of these amendments and we look forward to the Minister’s reply and to working with others of your Lordships’ House in ensuring that the Bill is capable of delivering what it sets out to deliver and that all relevant players are engaged and financed adequately, so that we can afford the best possible level of care to those—of any age and with any condition —who need it.
Earl Howe
My Lords, I am very grateful to noble Lords for tabling these amendments, which highlight the importance of access to good information and advice, including independent financial advice and independent advocacy, for those who have care and support needs or are planning how to meet future care and support needs.
First, I will address Amendment 82B, in the name of the noble Baroness, Lady Meacher, Amendment 86E, in the name of my noble friend Lord Sharkey, and Amendment 86F, in the name of the noble Lord, Lord Lipsey. Clause 4 introduces a general duty to make a universal information and advice service available to everyone in the local community. I say to my noble friend Lord Sharkey in particular that we are clear that the information and advice service must be accessible to all, whether they fund their own care or get some care and support paid for by the local authority, and in order to fulfil its duty the local authority will need to facilitate access. The noble Baroness, Lady Meacher, raised the issue of early information and advice about Alzheimer’s in particular; this will be one of the vital areas that the services should cover.
The clause deals broadly with what the information and advice service must cover. Subsection (2) sets out the essential requirements for the service but— intentionally—this is not a definitive list. With regard to Amendments 86B and 86H, subject to specific qualifications, it will be for local authorities to determine the precise scope and manner of the information and advice that they offer. We expect many authorities to offer access to independent sources of information and advice, working together locally with the voluntary, not-for-profit and private sectors. We set out our expectations and additional funding for local authorities, which rises to £50 million a year by 2017-18, in the Caring for Our Future White Paper.
I would say to my noble friend Lady Browning that some authorities have also used qualified social care staff as the first point of contact and have found that this can be effective, efficient and timely, helping people to the care and support that will help them most. Others have provided a first point of access to information through more general services, which connect information and advice on a wider range of local authority responsibilities as well as local NHS provision.
I emphasise that statutory guidance will cover how information and advice can be provided in an accessible way and be proportionate to the needs of those for whom it is provided. My noble friend Lord Sharkey expressed doubts about the phrase “seek to” and suggested that it was rather too weak. Statutory guidance will set out the clear expectations of what the local authority’s service should cover or what it should seek to do in order to ensure that the information and advice is sufficient.
My noble friend Lady Browning asked about the number of social workers. More than 1.6 million people are employed in the social care sector, including 200,000 social workers. We do not set out any national targets but we recognise the need to improve skills, capacity and retention. We are working with stakeholders, including the National Skills Academy for Social Care and Skills for Care, to produce new national minimum training standards, which will further raise standards and encourage new people to enter the sector. My noble friend referred to my letter of 27 June. I confirm that this referred to Health Education England. Health Education England’s remit does not extend to social care; it covers health and public health.
Amendments 83ZA and 86A, in the name of the noble Baroness, Lady Gale, cover information and advice on health-related areas and information to people with specific medical conditions. As for many services, there will be a need for the local authorities to work with NHS organisations and more widely to provide focused information and advice to those who would benefit from it. There are already good examples of how information and advice services from a range of organisations can work together with the health and well-being of the individual at heart. Many use the national information provided by NHS Choices as a base. A lot of local authorities are providing information and advice directly to those who may have an entitlement to NHS continuing care. In addition, regulations under the Bill will specify the circumstances in which the local authority must refer the adult for an assessment for NHS continuing care. We will of course work with interested organisations to include such examples in statutory guidance.
Turning to the amendments addressing access to regulated financial advice, the noble Baroness, Lady Greengross, and the noble Lord, Lord Lipsey, make some excellent points about the importance of appropriate financial advice for those who have or are planning for care and support needs. This kind of advice may be particularly relevant to people who are funding their own care and may include a financial adviser who is regulated by the Financial Conduct Authority, but there is no need for the Bill to set this out specifically. There are other kinds of advice that may be relevant to such people and, as I have mentioned, we think it is important to maintain the general terms of Clause 4.
I take on board the concern about the use of the term “independent financial advice”—that this may cause some confusion with the term’s general meaning within the financial industry and the Financial Services and Markets Act 2000. We are happy to consider this aspect in more detail to ensure that no confusion exists. However, we do not believe that taking independent regulated advice should be compulsory. Whether a person takes advantage of independent advice is a matter of personal choice. This is particularly important because some financial advice may be subject to a charge.
There will be individual circumstances in which it will be appropriate to recommend independent advice from a regulated financial adviser, such as when people are planning to meet future care needs or when people go into residential care and are weighing up financial options such as selling the home. The fact that an organisation or individual is regulated is in itself no guarantee that the person has knowledge or experience of wider care and support issues; for example, housing or other care-related options. All this makes the adult’s choice of an adviser a vital aspect. The local authority should advise about the importance of independent regulated advice and signpost the adult to offer a choice of where they can obtain the best and most relevant advice. Again, we intend to cover such issues in statutory guidance.
We will also shortly be consulting on the design and technical implementation of the funding reforms, including deferred payments. This will include how the new duties to signpost independent financial advice will work. The noble Lord, Lord Beecham, asked about an awareness campaign about the funding reforms themselves. We are scheduled to discuss amendments on that very issue in a later group and I hope that the noble Lord will be content for me to cover the issue at that point.
Baroness Meacher
I welcome the Minister’s assurance that Alzheimer’s patients will be a priority when it comes to the provision of information and advice— I shall have to clarify what that means in due course. I thank the Minister for his usual courteous and sensitive response to the many amendments that have been debated this evening. I am sure that many noble Lords will want to come back to those issues on Report—in particular, I hope that the noble Baroness, Lady Browning, will come back to her point about social workers being a suitable vehicle for providing information in their care planning work. It could save a lot of resource and waste of time. I beg leave to withdraw the amendment.
Schools: National Curriculum
(10 years, 10 months ago)
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The Parliamentary Under-Secretary of State for Schools (Lord Nash)
My Lords, with the leave of the House, I shall now repeat a Statement made in another place yesterday by my right honourable friend the Secretary of State for Education on the national curriculum. The Statement is as follows.
“With permission, Mr Speaker, I should like to make a Statement on the future of the national curriculum.
Our children are growing up in a world where the pace of change—economic, social and technological—is constantly accelerating. These changes promise wonderful new opportunities for future generations, but they also create immense challenges.
We are learning more every day about how our world works and how our minds work, how we can develop our civilisation and extend opportunity, and how we can improve learning and extend knowledge.
At the same time, however, we are also discovering just how competitive this new world is. As other nations modernise their economies and education systems, we cannot afford to be left behind in the global race.
That is why, when the coalition Government were formed, we asked officials in the Department for Education to analyse the best performing education systems in the world. They examined the curricula used in the world’s most successful school systems, such as those of Hong Kong, Massachusetts, Singapore and Finland.
Informed by that work and in consultation with subject experts and teachers, the department produced a draft revised national curriculum which we put out for public consultation five months ago. We received more than 17,000 submissions to our consultation and we have given them careful consideration.
Today, we are publishing a summary of the comments received and the Government’s response. The publication of our proposals has provoked a valuable national debate on what is, and what should be, taught in our schools. I have very much enjoyed this debate and the passionate engagement of so many great teachers and concerned parents.
It is absolutely right that every member of society should care about the national curriculum. It defines the ambitions that we set for our young people, and I, like the overwhelming majority of parents, want us to be more ambitious than ever before.
That is why we are demanding that children be taught how to write computer code, how to use 3D printers, how to handle more complex mathematical processes, how to appreciate a wider-than-ever range of literature and how to speak, read and write in more than one language.
The updated national curriculum framework that we are publishing today features a number of revisions to the drafts published in February. The revisions have been made on the basis of evidence and arguments presented to us during the consultation period.
In particular, we have revised the draft programmes of study for design and technology and for history. We have included more detail on modern design processes and more coverage of world history.
Among other significant changes are the inclusion of a stronger emphasis on vocabulary development in the programmes of study for English and greater flexibility in the choice of foreign languages which primary schools will now be required to teach.
Perhaps the most significant change of all is the replacement of ICT with computing. Instead of just learning to use programs created by others, it is vital that children learn to create their own programs. By demanding that children learn computational thinking and Boolean logic, we are determinedly raising the bar, but by equipping our children with the tools to build their own algorithms and applications, we are also helping to foster a new level of creativity in our schools.
It is my hope that these changes will reinforce our drive to raise standards in all our schools. I hope that they will ensure that the new national curriculum provides a rigorous basis for teaching and a benchmark for all schools to improve their performance, and I know that it gives children and parents a better guarantee that every student will acquire the knowledge to succeed in the modem world. That is why I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Jones of Whitchurch
My Lords, I thank the Minister very much for setting out the Government’s revised approach to curriculum reform. I am glad to hear that a number of the representations that we have been making from the beginning have finally been adopted by the Government. However, it has to said that it has been a very bumpy ride. The consultation has contained all the characteristics for which the Secretary of State has now become famous: first set out an ideological master plan full of reforming zeal; then rubbish anyone who raises concerns and questions, including educational academics, teachers and parents; and, finally, carry out a series of U-turns and admit that your critics might have been right all along. It is, quite frankly, exhausting and a long way from the thoughtful, grown-up national debate which should have been conducted from the outset, with the shared intent of improving young people’s life chances.
Nevertheless, we have some areas of agreement. We always said that it was a mistake to sideline speaking and listening skills in the teaching of English. This point was echoed by many employers and so we are pleased to see that this issue has now been addressed. We warned that the ICT curriculum was not addressing the technology needs of employers. Again, we are pleased that this has been updated. We welcomed the requirement for foreign language education in primary schools, but warned that it was unfair and divisive to limit the range of languages that could be taught. We are relieved that the Government have finally seen the error of their ways in this regard.
We argued strongly for citizenship to be included in the national curriculum; for young people to understand the contribution that they could make to the UK and as citizens of the world. We therefore welcome the Government’s belated conversion to the importance of citizenship education and the inclusion of human rights and international law at key stage 4. We criticised the removal of climate change in the geography curriculum, as we believe it is essential for an understanding of physical, social and economic geography. We are pleased that this has now been reinstated. Along with many eminent historians, we raised concerns that the history curriculum was too UK focused and lacked a world view. We are pleased that the programme has now been rebalanced.
However, in this notable and welcome list of U-turns, a festering anomaly remains, where the Government continue to ignore the best advice of those dealing on the front line with child health, sex and relationship issues. All the reasons why the teaching of other subjects should be spelt out in the national curriculum apply equally to PSHE, yet the Government seem determined to run away from their responsibilities on this issue. I hope the noble Lord, even at this late stage, will commit to reflecting further on this issue before a final decision is made.
Despite these welcome improvements, we still have a number of concerns about the proposals. First and fundamentally, the Government have underpinned all their proposals with a belief that education should be based on rote learning at the expense of developing young people who can problem-solve, think for themselves, be creative and work collaboratively. Young people need knowledge, skills and resilience. Can the Minister clarify whether he agrees that we need to reject the false choices that pitch knowledge versus skills and that we need to foster a more holistic approach in education?
Secondly, the new curriculum will apply to fewer than half of the secondary schools. If academies have the freedom to innovate, does that freedom not make sense for maintained schools as well? Does the Minister have a plan for addressing these contradictions?
Thirdly, the timing of the proposals and the implementation date of September 2014 put schools under enormous pressure to be ready for the changes, including having to provide the old and new curriculum in tandem for some age groups. Does the Minister recognise that many teachers felt ignored and ridiculed by the consultation process and morale is at an all-time low? Can he explain what professional development and resources will be made available to teachers to help them manage this transition? Does he accept that the presence of unqualified teachers in the classroom is a particular cause for concern when high-quality skills and experience will be required to meet this challenge?
Finally, does the Minister agree that particular support needs to be provided to children with SEN from a very early age, so that they are able to participate fully in the curriculum? Can he point me to where this support and flexibility are spelt out in the curriculum? How will parents be able to judge the progress of their children against their peers, particularly at primary school level, if the assessment levels and level descriptors are removed? Can we be sure that what replaces them will have the confidence of teachers and parents alike?
It feels as if this process of curriculum consultation has been unnecessarily rancorous. The Secretary of State has shown little skill or interest in managing the debate to achieve a consensual outcome. While we welcome the numerous U-turns, we remain concerned that the fundamental educational philosophy of this Government is backward looking, focused towards an outdated and divisive exam system and destined to do a disservice to the next generation of school leavers, who had a right to expect better. I hope the Minister will address these concerns and I look forward to hearing his response.
Lord Nash
My Lords, I thank the noble Baroness, Lady Jones, for her support for where we have arrived as a result of our consultation, if not for her comments on the journey we have taken to arrive at that point. As far as citizenship is concerned, we confirmed in February that citizenship would remain, along with other current national curriculum subjects.
The Government have reviewed the national curriculum in England since January 2011. In February this year, we published proposals that embodied a vision for a national curriculum that is slimmer, focused on essential subject knowledge and which—especially in the core subjects of English, maths and science—compares favourably with the curriculum taught in the most successful education jurisdictions in the world. Since then, there has been a vigorous national debate on the content and purpose of the national curriculum, which we have welcomed. It is right that every member of society should care about this. Our formal public consultation closed in April; we received 17,000 submissions; and we have published a summary of the consultation findings, as I said earlier. We intend to finalise the new national curriculum this autumn, so that schools have a year to prepare to teach it from September 2014.
The new national curriculum will retain the best elements of the drafts we published in February. We have, however, reflected carefully on the arguments we heard during the consultation period. That has led to some changes. In history, while we are pleased that many eminent historians welcomed the ambition of the draft, we also heard the concerns of history teachers that it was too prescriptive. We also acknowledged concerns that the curriculum was not sufficiently explicit that pupils should be taught about world history. In response, we have revised those proposals. They still set out that pupils should be taught a rich diet of British history within a clear chronological framework. However, the revised version also makes it clear that teachers will have the flexibility to design lessons that fire their pupils’ enthusiasm for history and teach the history of other societies around the world. The response has been very positive, even from those, such as the Historical Association and Professor Richard Evans, who had originally been critical of our plans. Similarly, we have revised the design and technology curriculum to ensure that it properly reflects our ambitions for teaching in this subject. The consequence of this revision will be that children are set on a path to be the next generation of designers and engineers.
We have made other changes, such as, as the noble Baroness mentioned, the inclusion of a stronger emphasis on vocabulary development in the programmes of study for English. We believe that these revisions will only serve to strengthen the national curriculum and ensure that all pupils get the education they deserve.
The noble Baroness, Lady Jones, mentioned SEN. The inclusion statement in the national curriculum framework document emphasises that teachers should set high expectations for every pupil and that lessons should be planned so that there are no barriers to every pupil achieving, including those with special educational needs. Organisations representing pupils with SEN have largely welcomed this statement.
We have discussed PSHE in this House on many occasions recently. The Government launched an internal review of PSHE in 2011 and the outcomes of the review were announced in March this year. After careful consideration, we have concluded that PSHE should remain a non-statutory subject without the addition of new statutory elements, although, as noble Lords know, I recognise that it is a very important subject and should be taught in all schools. We are exhorting all schools to teach PSHE and careers development at every turn.
On the advice of the expert panel set up to advise the national curriculum review, we have decided that levels and level descriptors should be removed. We have also borne in mind the feedback that we heard from many teachers that levels are unhelpful in that they distract teachers from ensuring that pupils master essential subject skills and knowledge and instead require assessments of progress to be made against vague, best-fit judgments. They are subjective and open to manipulation.
Our new national curriculum is designed to give schools genuine opportunities to take ownership of the curriculum. The new programmes of study set out what pupils should know and be able to do at the end of each key stage. This is particularly true at primary level for English, maths and science, and therefore assessments can be directly based on that rather than on vague level descriptors. Levels were designed as an assessment tool to summarise progress at the end of an entire key stage; they were never intended to be broken down into sub-levels and used to grade each piece of work.
I agree with the noble Baroness that it is time that we ended the circular debate about knowledge versus skills. We accept that it is essential that our pupils learn both these things. Our national curriculum is based on the latest cognitive thinking and practice around the world, including the work of Dan Willingham, whose book, Why Don’t Students Like School?, I recommend to anybody interested in this matter. It is also based on the experience in jurisdictions such as Massachusetts, where a knowledge-skills-based curriculum —although it is more knowledge-based—is followed. In recent years, this has led to what has become widely known as the “Massachusetts miracle” in terms of the turnaround in schools’ performance.
So far as the timetable is concerned, this Government are ambitious for our children and young people. However, international surveys show that in key subjects we are standing still while other countries and jurisdictions overtake us. To allow that situation to continue would be to neglect our duty and to sanction relative decline. We want pupils to start benefiting from the new curriculum as soon as possible. However, it is also the case that the timetable we are working to means that schools have over a year to prepare for its introduction. We are confident that they will use that time to prepare effectively.
We will of course be prepared to offer targeted support to schools when we think that that will be beneficial. We are working with the National College for Teaching and Leadership to identify what help might be required. However, our general approach, as noble Lords will know, is informed by the principle that schools know better than government what support they will need to teach the new curriculum in accordance with their own circumstances—hence our teaching schools and teaching school alliance programmes. Rather than top-down spoon-feeding, we will encourage schools to work with publishers, education suppliers, subject associations and each other to develop materials that respond to genuine need.
We are also providing £2 million in additional funding to teaching schools to build on the excellent work that they are doing. The National Centre for Excellence in the Teaching of Mathematics will be funded to provide improved maths teaching, and our national support schools have also received additional funding to ensure the required CPD. The National College for Teaching and Leadership has established expert groups to support institutions delivering ITT in preparing trainees to teach the new curriculum.
We understand that we are asking a great deal of teachers and head teachers as we seek to make our education system truly world class. However, we also know that we are fortunate to have the best generation of teachers ever and we are sure that, supported by a national curriculum that is stretching and focused on teaching essential knowledge, they will rise to the challenge. We want schools to see the full picture of GCSE reform, A-levels, curriculum and the accountability framework at one time. It means an intensive programme of reform but we have slipped so far down the international league tables that we cannot afford to wait. Each year that we wait leads to more children being insufficiently challenged and educated. We believe that this curriculum will equip our children and young people with the knowledge and skills they need to compete in the world and enable them to have the education they deserve.
Lord Quirk
My Lords, I am grateful to the noble Lord for repeating the Statement that was made in the House of Commons yesterday. As one who studied the February draft in excruciating detail, I am happy to congratulate all concerned at the DfE on the quite striking improvements to be seen in this new version of the national curriculum, especially in the very lengthy English section. For example, in that section there is a far greater emphasis on spoken English and a far deeper recognition that continuous vocabulary development is central to the whole of education.
However, I have a couple of questions for the Minister. Can he assure us that teachers, confronted now with a good deal of extra excellent material and ideas to bring to life in the classroom, will, wherever necessary, be brought fully up to speed so that they can deliver on the new demands required of them? It is a big task and the curriculum will come to life only in the classroom.
Secondly, the importance of English and maths is obvious in their needing more space in the voluminous curriculum document than all the other 10 subjects put together—rightly so, since English and maths not only possess the precious content which is peculiar to them but also comprise the tools, as the Minister has just said, for shaping all else in education. Therefore, can the Minister assure us that English and maths will remain the sine qua non throughout school life from the ages of five to 18?
Lord Nash
I am grateful to the noble Lord for his comments, particularly about English. We are focusing heavily on ensuring that teachers have the resources to deliver this new curriculum, largely in the way that I outlined earlier. English and maths will be essential right the way through the curriculum until the age of 16, and grammar, punctuation and spelling will feature much more across the curriculum than they have done in the past. They will not be essential beyond the age of 18, although we have said that all pupils who have not achieved grade C in English or maths will go on studying English and maths until they are 18 and have reached that standard.
Lord Storey
My Lords, first, I welcome my noble friend’s Statement on the curriculum. These Benches have argued for a long time that we should have a shorter and more focused curriculum that prioritises essentials. It is interesting to note that the national curriculum has been reduced from 468 pages to 281. I do not see it as a U-turn; I see it as a reflection of the consultation process, particularly on the issue of speaking and listening and on climate change.
I have a number of questions. One of them resonates with the comments of the noble Baroness, Lady Jones, and concerns continuing professional development. How do we make sure that schools are fully equipped? In some areas, for example, there are no training schools. Are we going to see resources go directly to those schools? What is the position on equipping non-teachers? As we know, in free schools and some academies non-teachers are taking classes. We also know that in all schools teaching assistants are covering PPA time and taking lessons. Therefore, what continuing professional development will be provided for those staff?
There is one area of great concern. I am delighted that a modern foreign language will be taught, but in primary schools there is often no one on the staff with that ability. What resources will be given to primary schools?
Lord Nash
I am grateful for my noble friend’s comments; I know that they are well based on his 25 years experience of primary education in Liverpool.
On CPD, we believe that we now have about an 89% coverage of the country on teaching schools and the teaching school alliance, but, as I said, our belief is that teachers are best placed to develop best teaching practice through teaching in schools and school support by modelling good practice. An increasing number of products are emerging on the marketplace to help teachers, including MyMaths and Ruth Miskin’s phonics materials. Those are particularly suitable for primary schools.
Baroness Massey of Darwen
My Lords, I thank the Minister for repeating the Statement. The document is sprinkled with references back to the Education Act 2002, with its emphasis on promoting spiritual, moral, intellectual and cultural development of pupils and developing a balanced and broadly based wider curriculum. I agree with that, but I am not sure that the document fulfils it. I agree with my noble friend Lady Jones that ICT—computing—spoken skills in English and the subject of climate change are welcome. As a former foreign language teacher, of course I would say that foreign languages are welcome. I will come to PSHE later, but I hope that the Minister realises that some pupils need a basis of interpersonal skills and self-confidence to be able to learn anything. They cannot simply be filled with facts and knowledge.
I am pleased that there was consultation on the original document. I know that some concerns were expressed there. For example, 36% said that the curriculum was then too focused on knowledge and that there should be greater recognition of the value of skills. I reflect on last Thursday’s debate in this House, instigated by the noble Baroness, Lady Shephard, to which the Minister responded, in which across the House we expressed concern about careers education and the development of soft skills such as teamwork, communication and so on. I am not sure that that is sufficiently covered in this document. I am also concerned about the space for creativity and the prescription and progression between stages.
It does not seem to be recognised that citizenship and personal education are taught in a cross-curricular way, with certain formal inputs. I note that in the document there are 20 lines on citizenship but nothing on PSHE; there is reference only to sex and relationship education. Sex and relationship education is part of PSHE; it should not be given overemphasis. Things such as obesity, alcohol, drugs and smoking are equally important.
Is the Minister confident that this curriculum will deliver skills of communication and encourage self-confidence in pupils? Is he confident that culture, arts and sports are given sufficient emphasis? Is he confident that personal, social and health education and citizenship education are given sufficient reference in the document? Perhaps he can briefly respond.
Lord Nash
I know that the noble Baroness shares my concern about PSHE being an essential part of any school, particularly interpersonal skills and self-confidence. I do not think that we are apart at all on the necessity for all schools to teach that. Indeed, that is what good schools do; it is all part of a good education. The difference between us is that we do not feel that we should legislate for every ingredient of such education to be statutory.
For instance, on career education, I was in Norfolk today, where we were whipping up support for schools in Norfolk, which have consistently been below national standards. One of our meetings was with business leaders. There is no shortage of enthusiasm from the business community to engage with schools to help them with careers advice, work placements and so on. I then visited Wymondham College, one of our top state boarding schools, where we got into a conversation about careers. I said that I was constantly being asked whether careers advice should be more consultancy-based in schools and whether that was sensible for schools. It was absolutely clear. Everybody in the room—the top eight teachers in the school—said that a careers session of 50 minutes at the end of your school life was a very poor substitute for a good education and that they engaged widely with businesses for careers advice. They already practise the suggestion from my noble friend Lord Cormack of career panels.
That is the best practice, which we should encourage all schools to do, so that all schools fulfil the ambitions of the noble Baroness. As I said, however, what is between us is that we think that to legislate for it in a box-ticking way would lower expectations rather than encourage all schools to aim for the highest.
Lord Phillips of Sudbury
My Lords, I should declare an interest as the founder and president of the Citizenship Foundation. I, too, would like to congratulate the Government on the outcome of their consultation and a lot of hard work all round. To have 17,000 people respond to a consultation must be a high response compared to some that we have had recently and it reflects the intense concern of people across the social spectrum—of course, including teachers and parents. I also recognise the dilemmas that the Government have in arriving at a curriculum, because so many subjects today call for inclusion, and there has to be some point at which you say, “Sorry, no more space”.
I particularly congratulate Michael Gove on resisting the advice from his expert panel and keeping citizenship education in the core curriculum at key stages 3 and 4. It has always seemed to me—and, probably, everybody in the Chamber—that the democratic world of today is unbearably complex. The work of this House is often beyond the ability of its Members to grapple with. It is irresponsible of us to the point of being hypocritical not to give our school leavers the chance, through a minimum level of competence, to take their part in this hyper-complex society—in particular, their democratic part. I fully endorse the conclusions reached that citizenship is part of the essential knowledge that we have to give our citizens, no less than teaching them the Highway Code before they get into a motor car.
I should like to ask my noble friend four questions. The framework document issued this week starts by saying, of citizenship, that the purpose of study is a high-quality citizenship education. I would be grateful if my noble friend would consider the extent to which we need rather badly to have a much greater quantity and quality of teacher education for that difficult subject. Secondly, I agree with my noble friend Lord Storey that this is a subject where you could bring in people from outside the world of formal teacher qualification. Very quickly, I think—
Baroness Garden of Frognal
My Lords, perhaps I may remind my noble friend that this debate is for brief questions to the Minister.
Lord Phillips of Sudbury
I would be grateful if my noble friend would consider extending the Ofsted inspection to cover citizenship education. If it is not within the compulsory Ofsted inspection, that lowers its status. That is certainly not needed. Finally, I do not see why this subject should not be as necessary, compulsory and essential for non-maintained schools as for maintained schools.
Lord Nash
I am grateful to my noble friend Lord Phillips for his comments. I believe that we have greatly improved the citizenship curriculum, not least with the helpful advice from noble Lords such as him that it should be a much less issues-based curriculum, with greater focus on the political systems in this country. So far as Ofsted is concerned, I will look at that point in the context of what Ofsted already inspects for in terms of a rounded conversation and whether we can do anything further on that. As far as the core subject is concerned, I rather refer back to my earlier point that some independent schools teach citizenship very effectively in a much wider way. As far as teaching quality is concerned, we are doing all that we can to improve the quality of teachers. I may want to discuss with my noble friend further his specific points about citizenship teachers to see whether we cannot do more in this regard.
EU: Police and Criminal Justice Measures
(10 years, 10 months ago)
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The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the following Statement was made by my right honourable friend the Home Secretary in the other place earlier today.
“With permission, Mr Speaker, I would like to make a Statement on the decision on whether the UK should opt out of those EU police and criminal justice measures adopted before the Lisbon treaty came into force.
As honourable Members will be aware, this is a stand-alone decision which the Government are required to make under the terms of the Lisbon treaty by 31 May 2014, with that decision taking effect on 1 December of that year. It covers around 130 measures, some of which it is clearly in our national interest to remain part of. But if we wish to remain bound by only some of the measures, we must exercise our opt-out from them all, en masse, and seek to rejoin those that we judge to be in our national interest.
The Government have committed to a vote in this House and the other place before formally deciding on this matter. We shall honour that commitment in full. Next week, honourable Members will have the opportunity to debate and vote on this approach. Following our discussions in Europe, another vote will be held on the final list of measures that the UK will formally apply to rejoin.
Let me briefly set out the rationale by which the Government have approached this decision. We believe that the UK should opt out of the measures in question for reasons of principle, policy and pragmatism and that we should seek to rejoin only those measures that help us to co-operate with our European neighbours to combat cross-border crime and keep our country safe.
On principle, I am firmly of the belief that the UK’s international relations in policing and criminal justice are first and foremost a matter for Her Majesty’s Government. In policy terms, the UK has—and will continue to have—the ability to choose whether it should opt in to any new proposal in the field of justice and home affairs. It is therefore right that we take the opportunity to consider whether we wish to retain measures that were joined by the previous Government and to decide on a case-by-case basis whether we are willing to allow the European Court of Justice to exercise jurisdiction over them in the future. Finally, the Government are being pragmatic. I have said before that we will not leave the UK open to the threat of infraction, and fines which run into many millions of pounds, by remaining bound by measures we simply cannot implement in time. That would be senseless.
In a number of areas, the measures relate to minimum standards in substantive criminal law. Even before their adoption, the UK already met or exceeded the vast majority of these standards and will continue to do so, whether or not we are bound by them. As people have become more mobile in recent years, so too has crime. The Government have sought and listened carefully to the views of our law enforcement agencies that combat it. We understand that some of the measures covered by this decision are important tools which they need to protect the British public. The Government have identified 35 measures which we will be seeking to rejoin in the national interest.
That set of measures, on which we propose to begin our discussions with the European Commission and other member states, is laid out in Command Paper 8671, which is published today. I want to be clear: what must happen next is a process of negotiation with the European Commission and other member states. These negotiations will determine the final list of measures we formally apply to rejoin, but we promised that we would set out these measures clearly and give honourable members time to consider them before asking them to vote, and this is what we have done.
One of the measures that we will seek to rejoin, and on which I know many honourable Members have strong views, is the European arrest warrant. I agree with our law enforcement agencies that the arrest warrant is a valuable tool in returning offenders to the UK. Its predecessor, the 1957 European Convention on Extradition, had serious drawbacks. The arrest warrant has helped us to secure and accelerate successful extradition procedures—as shown by the case of Osman Hussain, one of the failed London bombers of July 2005, who was extradited back to the UK from Italy in less than eight weeks. More recently Jeremy Forrest, the teacher who was sentenced last month for absconding to France with one of his pupils, was extradited back to the UK less than three weeks after his arrest. Since 2009 alone, the arrest warrant has been used to extradite from the UK 57 suspects for child sex offences, 86 suspects for rape and 105 for murder. In the same period 63 suspects for child sex offences, 27 suspects for rape and 44 for murder were extradited back to Britain to face charges. A number of these suspects would probably have not been extradited back to Britain without the arrest warrant. We owe it to their victims, and their loved ones, to bring these people to justice.
However, the European arrest warrant has its problems too, as honourable Members have eloquently explained in this House. The previous Government had eight years to address these concerns and did nothing. This Government have taken action and today I am proposing additional safeguards to rectify these problems and increase the protection offered to those wanted for extradition, particularly British citizens. A number of honourable Members have explained how European arrest warrants have been issued disproportionately for very minor offences. I will address this by amending the Anti-social Behaviour, Crime and Policing Bill, which is currently in Committee, to ensure that an arrest warrant can be refused for minor crimes. This should stop cases like that of Patrick Connor, who was extradited because he and two friends were found in possession of four counterfeit banknotes.
We will also work with other states to enforce their fines and ensure that in future, where possible, a European investigation order is used instead of a European arrest warrant. This would mean police forces and prosecutors sharing evidence and information without requiring the extradition of a suspect at the investigative stage.
Other honourable Members have expressed concern about lengthy and avoidable pre-trial detention. I will amend our own Extradition Act to ensure that people in the UK can be extradited under the European arrest warrant only when the requesting state has already made a decision to charge and a decision to try, unless that person’s presence is required in that jurisdiction for those decisions to be made.
Many Members, in particular my honourable friend the Member for Enfield North, will recall the case of Andrew Symeou, who spent 10 months in pre-trial detention and a further nine months on bail in Greece, only to be acquitted. The change that I am introducing would have allowed Andrew Symeou to raise, in his extradition hearing, the issue of whether a decision to charge him and a decision to try him had been taken. It would likely have prevented his extradition at the stage he was surrendered and, quite possibly, altogether. We will also implement the European supervision order to make it easier for people like Mr Symeou to be bailed back to the UK.
Other honourable Members are concerned about people being extradited for conduct which is not criminal in British law. I will amend our law to make it clear that in cases where part of the conduct took place in the UK, and is not criminal here, the judge must refuse extradition for that conduct.
I also intend to make better use of existing safeguards to provide further protections, so I will ensure that people who consent to extradition do not lose their right not to be prosecuted for other offences, reducing costs and delays. We propose that the prisoner transfer framework decision should be used to its fullest extent so that UK citizens extradited and convicted can be returned to serve their sentence here. Where a UK national has been convicted and sentenced abroad, for example in their absence, and is now the subject of a European arrest warrant, we will ask, with their permission, for the warrant to be withdrawn and will use the prisoner transfer arrangements instead. This change could have prevented the extraditions of Michael Binnington and Luke Atkinson—sent to Cyprus, only to be returned to the UK six months later.
To prevent other extraditions from occurring at all, I intend either to allow the temporary transfer of a consenting person so that they can be interviewed by the issuing state’s authorities or to allow them to do this through means such as video-conferencing while in the UK. Where people are innocent, this should lead to the extradition request being withdrawn.
These are all changes which can be made in UK law—and which could have been made by the party opposite during their time in government. Co-operation on cross-border crime is vital, but we must also safeguard the rights of British citizens. The changes that we propose will do that.
Before I conclude, I am conscious that honourable Members want to know our approach to the new Europol regulation. Let me say that I fully recognise the excellent work of Europol and its British director, Rob Wainwright. Honourable Members will recall Operation Golf, a joint operation led by Europol and the Metropolitan Police, which cracked down on a human-trafficking gang operating in Ilford and led to the release of 28 trafficked children and the arrest of 126 suspects. It is for reasons such as this that we are proposing to rejoin the existing Europol measure.
On the new proposal, the Government have today tabled a Motion as the basis for a ‘Lidington-style’ debate on the floor of the House next week, following the debate and vote on the plan that I have outlined today. That Motion states that we should opt in post-adoption, provided that Europol is not given the power to direct national law enforcement agencies to initiate investigations or share data that conflict with our national security.
For reasons of policy, principle and pragmatism, I believe that it is in the national interest to exercise the United Kingdom’s opt-out and rejoin a much smaller set of measures that help us to co-operate with our European neighbours in the fight against serious and organised crime. I also believe that Her Majesty’s Government must strike the right balance between supporting law enforcement and protecting our traditional liberties. What I have outlined today will achieve both those goals. I commend this Statement to the House”.
Baroness Smith of Basildon
My Lords, I have to say that I wonder if this is the Statement that the Home Secretary really wanted to make to the other place today. When we think of the rhetoric that we have heard on this issue, it is something of a surprise to hear today’s Statement, because the Home Secretary’s and the Government’s anti-European credentials have taken a bit of a battering. The rhetoric is still there, but common sense has appeared to force some moderation in action.
Last October, the Home Secretary confirmed that the Government’s “current thinking” was that the UK should opt out of all pre-Lisbon measures and rejoin them where it was considered in our national interest to do so. An example often used by the Government to explain this position is the European arrest warrant, as we have heard from the noble Lord this evening. The Sun newspaper was briefed on why the UK should reject it, the Prime Minister said it was “highly objectionable” and, just recently, the Government’s MPs voted, on a three-line Whip, against the Labour Motion that would have retained it. However, the Government now have to admit that it is effective and that, without it, criminals can evade justice. They could seek to evade British justice abroad and would be able to hide in the UK to evade the justice of other countries. I welcome the Government’s U-turn on this issue but there are still questions to be answered before we will be satisfied that public safety is not at risk.
I listened carefully to the Statement and have looked at the other documents but am not 100% clear what we are opting out of and why, and what impact that will have. I have not had the opportunity yet to read the 159 pages of the Command Paper but I am confident that the Minister has—I hope he has—and wanted to ask him a very specific question about the exact number of practical, workable and working measures that the Government are seeking permanently to opt out of. Of the 133 crime, law and order, and policing measures, the Government want to opt back in to 35. An additional seven have already been replaced and the Government have opted in. However, of the measures that the Government are seeking to opt out of: some are out of date and no longer in operation; some we have never used so we do not have to; others are agreements to co-operate, and my understanding is that the Government intend that co-operation to continue; and the Statement itself refers to measures that relate to minimum standards that we have already met or exceeded. With all of those, there is no impact or effect.
Other opt-outs include: a directory of counterterror officers that no longer exists; a temporary system for dealing with counterfeit documents that has already been replaced; a bundle of measures applying to Portugal, Spain and Croatia that do not even apply to the UK; and a number of measures relating to extinct manuals, specialist handbooks et cetera. In some ways, dealing with these is a useful tidying-up measure, but it is hardly an impressive list of repatriation of powers. I have a very specific question for the Minister, knowing that he has read the document: how many of the measures that the Government want to opt out of permanently are relevant to the UK and currently being used, and what impact will their removal have? I look forward to the answers from the noble Lord as, having heard the Statement, I really have no idea.
The Government now accept that the 35 measures that they want to opt back into are essential. If there is an opt-out, there must be a quick opt-back-in. Can the noble Lord confirm that the Government have secured a guarantee that we can opt back in to these important measures? If not, will the Government still opt out without such a guarantee? What timescale does the noble Lord envisage from the opt-out until the process of opting back in is completed? Are the Government seeking to amend any of the 33 measures, other than the European arrest warrant, and what are the implications and consequences if we fail to opt back into any of the measures, including financial consequences? Does the Minister really believe that the only way of making changes is to opt out and then opt back in? I find that strange when the Government refused to implement the European supervision order relating to the European arrest warrant, which they could have done long before now.
If any opt-back-in is not immediate, it is essential that there are transition measures. For example, the European arrest warrant is a legal framework that allows countries to extradite. Transition measures would have to be legally robust to ensure the satisfaction of the courts and lawyers dealing with any extradition. Given that pre-European arrest warrant transition arrangements have expired, will there be separate transition measures for all countries currently covered by the European arrest warrant? How long will negotiations take and are we at risk of a time gap during which criminals will be able to hide from UK justice and hide in the UK from justice in other countries? What will happen to the existing European arrest warrants where a person has not yet been arrested but there is a warrant out for their arrest? Will the warrants just lapse with the opt-out, allowing wanted criminals to evade justice from the UK overseas or leaving foreign criminals in the UK without the powers to remove them? The Statement also says that the Home Secretary,
“will amend our own Extradition Act to ensure that people in the UK can be extradited under the European arrest warrant only when the requesting state has already made a decision to charge and a decision to try”.
Can the noble Lord confirm whether this will apply to foreign citizens in the UK as well as to British citizens? Is it likely to make it harder to extradite those wanted for questioning for crimes in their own country?
There remain so many questions on the impact and the detail that I will not detain the House with another list which I could easily provide this evening. Genuine scrutiny, at which your Lordships’ House excels, will be so important in this debate. I hope that the Minister does not say this evening that these issues are for further discussion, because we are running out of time; he smiles at me, so perhaps that is the note that he has been passed. A vote will take place in the other place in less than a week, and the matter will then be brought to your Lordships’ House. The Government must have worked out the detail by now. We need that detail to inform our decision-making in your Lordships’ House. I hope that the Minister is able to respond to the points that I have raised, and I greatly look forward to his doing so.
Lord McNally
I am grateful for the noble Baroness’s response to the Statement. I noted that she thought that it had common sense and moderation. Indeed, there were times during her response to the Statement where there was a suggestion that we had shot her fox, in that all the disasters to which she was hoping to point—about not taking note of national security and effective policing—are not there. The Statement of my right honourable friend the Home Secretary puts those matters right to the fore, as is demonstrated in the list that we have put before the House today.
There was hardly a hint that this little problem was left by the Labour Party’s negotiators for the Lisbon treaty. As the Home Secretary mentioned in her own remarks, the then Government did precious little to address these issues while in office. We therefore make no apologies for having used our time in office to look at these matters in detail. My point when we were discussing this at Questions the other day was that they are serious issues that deserve proper and serious consideration. The document published today, Command Paper 8671, is a sign of the candour and transparency with which the Government intend to approach this matter. The document contains not only the full list of the measures with an explanation of the protocol under which they have been produced, but also six Explanatory Memoranda from various concerned departments, which we hope will be of help to both Houses in the debates to come.
I make no apologies for our now embarking on some interesting negotiations. We have taken the matter seriously and have produced a list which anybody objectively looking at the exercise will see goes to the core of the issues left by Protocol 36.
I have just been told that we published five Explanatory Memoranda, not six—stop press.
Baroness Smith of Basildon
I hoped that the noble Lord had been passed answers to the questions I had asked him.
Lord McNally
I am answering the questions. For example, the noble Baroness asked whether foreign citizens charged in the UK would be safeguarded. Yes, the safeguards will apply to all those subject to the European arrest warrant. The noble Baroness asked on what basis the decisions would be taken. The Government believe that we should exercise the opt-out and then seek to rejoin the measure where it is in the national interest to do so. The Government have considered the impact of each measure on public safety and security, whether practical co-operation is underpinned by the measure and whether there would be a detrimental impact on co-operation if we pursued it by other mechanisms. The impact of the measures on civil rights and liberties has also been considered.
The noble Baroness asked me if I had done a word count on the various issues. We have said that we intend to opt in to 35. As she says, a number—we think abut 14—of the original list have been repealed and replaced. There are about another 20 measures that retain the minimum European standards. However, the noble Baroness’s kind of quizzing approach really misses the point of what this exercise is about. Through today’s Statement, the Government have sent a clear message that we have addressed the problem left by Protocol 36—which would have been faced by any British Government and which the previous Government showed little enthusiasm for addressing—in a very practical way that will give both Houses of Parliament the time and the opportunity for input into negotiations which the Government will pursue with due seriousness and the intent of success.
Lord Taverne
My Lords, I am glad that the negotiations between the Conservatives and the Liberals inside the coalition have come to a sensible conclusion. In passing, one wonders what has been achieved in exercising the block opt-out; what we are left with having opted out of is not of any great significance.
The Conservatives have sensibly given way, contrary to their original stance, on the major measures for police and crime co-operation in the European Union. There is nothing more difficult in politics than changing your mind in the light of the evidence. It appears as if that is what the Conservatives in the Government have done, and I applaud them for that.
It is also fair to say that this has been a major victory for the Liberal Democrats in the coalition, and for this House, particularly the important work and results communicated in the Bowness and Hannay committees. It is also of very great importance that it has been a signal defeat for the UKIP-and-Tea-Party tendency inside the Conservative Party.
I ask two questions of the Minister. Is there any indication of the present attitude of the Commission to the opt-out proposals and what sort of timetable is envisaged? Secondly, will the Conservative leadership in the Government, including the Lord Chancellor and the Home Secretary, now join with Labour and the Liberal Democrats in exposing UKIP as the party which is soft on crime?
I am sure the Minister will agree that since UKIP rejects any legislation for co-operating on crime in the European Union, its policies can only benefit people-traffickers, porn-merchants, paedophile rings, money-launderers and other criminals who operate across borders, as they increasingly do.
Lord McNally
My Lords, on these specific questions, I have seen only the initial response from the Commission that was carried on the news-tapes; as far as I could see, that response was constructive in terms of welcoming this approach from the British Government. Of course we have had to get to this point before going into more formal discussions, but officials have had technical discussions with the Commission and the Council, focusing on the legal framework under which the decision will be made, to ensure a shared understanding of the legal processes around the 2014 decision. I know that my right honourable friends the Justice Secretary and the Home Secretary spoke today to Commissioner Reding and Commissioner Malmström respectively. There is no doubt that the Commission has responded in a way that we find constructive. I will cover another point made by the noble Baroness, about whether there would be gaps and lacunas in this. That would not be in the interests of any of us; we will negotiate with both sides to make sure that the move from one jurisdiction to another is a smooth one.
On the question of UKIP and how our respective parties respond to it, that is a matter for the political campaigners. However, in this Statement my right honourable friend the Home Secretary has demonstrated what we would expect of her, given her high office. She has taken account of the national security and policing needs in coming to these decisions, and she should be congratulated on that.
Lord Hannay of Chiswick
My Lords, I apologise for remaining on my feet, but as the noble Lord, Lord Richard, said, I chaired the committee that wrote the report to which the Government have not found it in their wisdom to refer in this Statement.
One consequence of the Statement, which I thank the Minister for repeating, is that the committees which have worked together on this issue will now reopen the inquiry and provide the House with a second report before any final vote is taken. Does the Minister agree that this Statement makes, frankly, a pretty good mockery of the Government’s undertaking to engage with Parliament on this issue? The original decision was announced in Rio de Janeiro, rather further away than the studios of the “Today” programme, which is the normal distance from Westminster at which such things are said. That was followed up by a Statement in the House which preceded any consultation with this House, with the other place, with the devolved parliaments and with the professions.
Now we have a Statement that simply ignores the views of your Lordships’ EU Select Committee, which was supported by members of all three parties and of none and which came to the conclusion that the Government had not at all made a convincing case for triggering the block opt-out. That they do not even find room in the Statement to refer to that report is perhaps to be explained by the fact that the Government’s response to it is now two weeks overdue, and we have not yet seen it.
Can the Minister confirm that a second vote will be taken in this House, as in the other place, before any final decisions are reached, and that that debate and the vote will be taken in the light of the Government’s success in negotiating with the Commission and the Council on the measures that they wish to rejoin? Will the Government provide both Houses with a report on those negotiations well in advance of the second vote? Frankly, it is pretty odd to ask both Houses to vote on a 159-page White Paper within about a week.
Lord McNally
My Lords, on the point about the committee’s report, we will respond to that in due course. I hope that as we move forward we do not get bogged down in the niceties of protocol. The report from the noble Lord’s committee was influential in the discussions that have taken place. This is a little bit like a game of three-dimensional chess. In reaching decisions, the Government are trying to keep both Houses informed and to keep relations and channels open to the Commission and to member states. I hope Members of the House will understand that the issues covered by the 2014 decision are numerous and complex. We have been conscious of the need to ensure that any information we provide is as accurate and as informative as it can be.
Members of the House will be aware that the document today with its five explanatory memorandums is a measure of that commitment to put the information before the House as quickly and as fully as possible. Of course, I think it is implicit in everything that has been said that a second vote will be taken when the outcome of these negotiations are known. Common sense dictates that this will not be finessed through or carried through with smoke and mirrors. Both Houses, with all their experience and expertise, will demand the full facts on which they will base that second decision.
Lord Davies of Stamford
My Lords, is there not something very odd and illogical—weird, bizarre, even—about this Statement? It goes at some length into the merits of the proposals, or measures, that the Government intend to opt back into, so why opt out of them in the first place? It does not say anything at all about the de-merits of the measures that the Government want to abandon definitively. It is not surprising that the House seems to have come to a consensus this evening that what the Government have been conducting is essentially a charade. Will the noble Lord accept that this is a charade not entirely without cost? There will be the cost of an unnecessary negotiation. There will be the exasperation caused to our partners by the fact that we treat them in this particular way. There is, of course, the risk that we will not be able to renegotiate in exactly the fashion we want our resumption of the measures to which we wish to adhere in future—unless of course the Government have already received assurances in advance about that, in which case I hope the noble Lord will be frank and tell the House. Is it not also true that the Government embarked on this quite unnecessary, gratuitous and risky course simply for reasons of the most squalid party-political nature—designed simply to buy off their own Eurosceptics and to keep UKIP from making inroads into the Tory Party vote?
Lord McNally
That intervention would have a scintilla of credibility if it did not come from the Benches that negotiated the specific option with which we are now dealing. The noble Lord cannot get away from that fact. For heaven’s sake, why was Protocol 36 negotiated in the first place if it was not for the opportunity that the House is now taking? The noble Lord can score all the party-political points that he wants, but this was the legacy of the Benches opposite; the Government are dealing with it—like many other things. We are dealing with this, as my right honourable friend has emphasised, with a clear focus on the best assistance we can give to our policing and the best protection we can give to our national security. I am very happy that the Government are able to bring forward such a coherent programme, which is now open to both Houses to study and for a negotiation to progress.
Lord Lloyd of Berwick
My Lords, I will be very brief. I rejoice that the Government have decided that, after all, we need the European arrest warrant, together with Eurojust and Europol and the cross-border police co-operation. These are on any view the most important of the 35 measures which are due for retention—if, of course, we are able to opt back in.
Given the uncertainty surrounding the opt-in process, and given the fact that we are already subject to the jurisdiction of the Court of Justice of the European Union in respect of all the many police and justice measures that we have opted into since 2009, are we not taking an unjustifiable risk in opting out of what is good, including the 35 measures which are agreed to be in the national interest, in order to get rid of the other 95 pre-Lisbon measures, which are of no real importance to us, nor even of great relevance to us, one way or the other? It seems to be an unjustifiable risk we are taking for no apparent reason.
Lord McNally
I concede a lot of logic in what the noble and learned Lord has said. The fact is, however, that we had the Protocol 36 exercise to carry through; we have discussed it inside Government and with Parliament on a regular basis; and we have listened to the views of the committee of the noble Lord, Lord Hannay, and others. We have suggested a way forward. Is it a way forward with risk? Yes it is. All such enterprises have an element of risk. However, we can move forward with a degree of confidence once we get past some of the nitpicking about who did what, where and when, and get down to the central issue of whether we can successfully negotiate with our European colleagues on matters of our national interest and, I respectfully suggest, of Europe’s interest. What has encouraged us is that the soft soundings that we have taken have led us to believe that we can carry out meaningful, fruitful discussions and negotiations that recognise the risks that the noble and learned Lord mentioned, but, because we will do this with good will and an intention to succeed, and with colleagues who have similar good will and want us to succeed, will minimise those risks.
Lord Bowness
My Lords, I thank my noble friend for repeating the Statement. He will not be surprised to know that, as the former chairman of one of the sub-committees that prepared the report, I associate myself with the regret expressed by the noble Lord, Lord Hannay, that we have not had a response within the normal and required time, although there appears to have been time to produce the 159 pages of White Paper.
The noble and learned Lord who spoke just now referred to risk. At the seminar on this issue held by the European Union Select Committee, a distinguished participant said, vis-à-vis risk and the difficulties of renegotiating re-entry, that the game was not worth the candle. I endorse that 100%.
I turn to specifics. The Statement says that the Government wish to rejoin the existing Europol measure. It also says that they do not intend at this stage to opt into the new measure. I regret that because it means that we will not have a vote in the negotiations, and a future opt-in to the new Europol provision will depend on certain matters being dropped from the current draft.
In preparing a list of the 35 measures, did the Government take account of the report to your Lordships’ House on the UK opt-in to the new Europol regulation that I believe was debated last week, which makes it absolutely clear that there are four other Council decisions that may not be repealed and replaced by the current Europol proposal, and which Europol advised were directly connected—that is, the existing Europol and a possible new Europol? It follows that whatever happens with the new Europol, if we wish to stay in the old Europol and are successful in renegotiating that, we will need the four separate Council decisions that are listed in footnote 39 on page 10 of the report. As far as I can see, none of them is included in the 35 circulated today. Am I correct? Is it an omission? If it is an omission, will it be put right? If it is an intentional omission, what is the thinking behind it?
Perhaps I may ask my noble friend, in all sincerity, whether we may have a very close examination of all the other measures before we go to Brussels to renegotiate, in order to make sure that there are no others that we should have opted into.
Lord McNally
I regret that we have reached 20 minutes. I say to unlucky Members who did not get in—I made a mess of this last time—that this is just the beginning. We have a long way to go and there will be lots of opportunities to examine both Europol and other matters.
I make it clear that we support Europol as it currently exists. This is why we wish to rejoin the existing Council decision on Europol. The new regulation proposes additional obligations that could put at risk the independence of our law-enforcement agencies. We do not support it and have indicated that we will seek to opt into the new regulation, post adoption, provided that Europol is not given the power to direct national law-enforcement agencies to initiate investigations or share data that conflict with national security.
There is no contradiction here. Our recommendation on the Europol regulation is about participation in a future measure governing Europol. It has no impact on our current participation in Europol. The Government continue to value Europol, but we feel that the Commission’s proposals go too far in an area that we consider poses a risk to the independence of our law-enforcement authorities. Our message is clear. We should get the required changes and we will seek to opt into the new regulation, post adoption, provided that Europol is not given the power to direct national law-enforcement agencies to initiate investigations or share data that conflicts with national security.
I shall read Hansard carefully and if I have not covered the points made by the noble Lord I shall do so in a letter. However, I am already overrunning my time and we shall return to this matter.
Care Bill [HL]
(10 years, 10 months ago)
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Baroness Emerton
Baroness Emerton
My Lords, in moving this amendment I shall also speak to Amendment 86PA.
Clause 5 emphasises quality, which is to be welcomed, and places promoting diversity and quality in the provision of services in the Bill. However, on behalf of nurses, the Royal College of Nursing thinks that it is not enough merely to quote “quality”. Local authorities are responsible for commissioning services from providers and have a duty to ensure that these providers and services are effective to meet the needs of the individual. It does not believe that at the moment local authorities are fulfilling these duties and responsibilities if they commission providers who fail to deliver high-quality care and, worse, provide care that detrimentally impacts on the health and well-being of individuals, as has been demonstrated in some recent high-profile cases.
As commissioners, local authorities must be part of a system-wide approach to safeguarding vulnerable groups. They are therefore falling negligent in their role if they commission providers and services that are not sustainable and fail both financially and clinically.
The potential impact of this was demonstrated recently with Southern Cross, where the health and well-being—and, indeed, lives—of care home residents were put at risk following the failure of its business model. For this reason, I believe that local authorities have a responsibility for ensuring that services that are commissioned by them are of high quality and sustainable. The two amendments are to that effect. Amendment 86HA seeks to insert the word “sustainable” and Amendment 86PA seeks to insert the words,
“the importance of ensuring the sustainability and high quality of the providers it commissions”.
I beg to move.
Lord Hunt of Kings Heath
My Lords, as this is my first intervention, I refer noble Lords to my interests as president elect of GSI, chair of an NHS foundation trust and a consultant and trainer with Cumberlege Connections.
I have three amendments in this group. Amendment 86J seeks to delete “high quality services” and instead insert,
““services appropriate to their needs as identified in the needs assessment and carer’s assessment”.
The problem with the draft as it currently stands is that it is very vague and entirely subjective depending on who is defining “high quality services”. Perhaps the noble Earl can clarify how the Government think it ought to be defined. Otherwise, there is a risk of uncertainty and inconsistency which, certainly when it comes to eligibility criteria, the Bill is designed to eradicate.
My second Amendment 86K would ensure that those in receipt of care and those involved in providing care are involved in shaping the market, as required under Clause 5. I have received a number of submissions about the market-making role of local authorities, and I was concerned to receive a submission from the Association of Directors of Adult Social Services, which said that while the intention of Clause 5 in promoting quality and diversity within the market is laudable, ADASS was of the view that the proposed duty placed on local authorities is wholly unrealistic. It points to a large number of providers that have no relationship or contact with local authorities, and says that combined with increased personalisation and limited leverage through the regulation framework, the ability of local authorities alone to influence diversity and quality of service is restricted.
I was very disappointed with that response, and rather taken aback by it. I hope that the noble Earl will share my view that in fact local authorities ought to be able to influence not only the market but the quality of care provided by private providers to a very great extent. Would the Minister accept that, to be effective, local authorities need to have a strong engagement both with users of services and carers, and with those who are providing services, too? That is why I tabled the amendment.
I listened with great interest to the noble Baroness, Lady Emerton, and I very much agree with her about the need to ensure quality in provision of service. That brings me to my own substantive Amendment 86P, which is very much concerned with the conditions under which care workers are employed in the main by the private sector. This is a hugely important issue. Clearly, we have a growing number of disabled and older people who need care and support. The people working in the care sector are vital. We need quality people who are highly trained and who can give the right commitment to the vulnerable people they are asked to care for. Clause 5 is important because what we see is a very fragmented industry delivering care that in many cases is of questionable quality and employing insecure, low paid, unregulated staff. Amendment 86P is concerned with the importance of fostering a sustainable workforce to encourage the acquisition of skills and decent working conditions that support the continuity and quality of care.
I was shocked to see a parliamentary Answer from the Minister’s honourable friend Mr Lamb recently, showing that more than 300,000 people working in the care sector are employed on zero-hours contracts. The point that I wish to make is this: how can people who do not have the security of knowing what they will earn pass on a sense of security to the people whom they care for? The rise in zero-hours contracts is bad for service users, many of whom are, of course, extremely vulnerable. There is another issue. People who are being cared for want to see the same person to have a continuity of care relationship. We know that that is severely hindered by those wretched zero-hours contracts. I believe that secure employment would allow staff to concentrate on caring rather than worrying about whether they are earning enough money for themselves and their families to live on.
I ought to declare an interest as a member of UNISON, which produced an excellent report, Time to Care, which undertook a survey in 2012 of care home workers. It showed that 80% of those who responded had to rush work or leave a client early to go to another call on what is called call cramming— in other words, too many calls for a care worker to undertake—and 56% received between the national minimum wage and £8 an hour. The majority did not receive set wages. Not surprisingly, turnover is high, while wages and conditions are poor.
Here is a shocking statistic. Nearly 57.8% are not paid for travelling time between visits. This morning I met a carer in Southwark who works roughly 20 hours on a zero-hours contract. She reckons that, because of the travelling time, she actually works for 27 hours, but is paid for only 20. The problem is that there is a race to the bottom because local authorities are, in my view, neglecting their responsibilities for ensuring that, when they place contracts, they are with good quality organisations. The companies who are exploiting their workers in this way are winning contracts at the expense of companies who treat their employees wisely. No wonder, therefore, that 36.7% of respondents are often allocated different clients on a daily basis, so that there is no chance of any relationship being developed.
There are many other statistics. The scandal of the 15-minute visit is well known. Indeed, the UK Homecare Association survey shows that three-quarters of all trips to old people have to be completed in less than half an hour and one in 10 is limited to no more than 15 minutes.
In Committee last week, I discussed with the Minister whether the CQC could be persuaded—or indeed, I hope, instructed—by your Lordships, to prioritise the regulation and inspection of local authorities in their commissioning duties. We have heard a lot about the CQC’s past failures and future hopes. It is clear that the focus is going to be on the NHS. I do not disagree with that, but when you think of the thousands of vulnerable people dependent on care workers, I wonder if the priority is right. If I were in the CQC’s shoes, I would focus on the care sector and particularly on local authorities and their own responsibilities. That is probably the best way to get into this issue.
We could have a debate about the regulation of social care workers. We could debate mandatory training and the noble Baroness, Lady Emerton, has tabled an amendment which would very much focus on that. I hope the Minister will recognise that we have a problem here. If we are to see this legislation enacted in the way that we all hope it will be, I am convinced that we have to look at the way that workers in the care sector are employed and do everything we can to prevent the abuse that we are seeing with these zero-hours contracts.
Baroness Greengross
My Lords, I rise to speak to the amendments in my name—Amendments 86L, 86M, 86N and 86Q. These amendments are all about quality of care. We know what happens at the moment. There is the opposite of a monopoly in that there are lots of sellers, but largely one buyer of care. Many care homes know this. The local authority is in a very strong position and will tell the care home managers—in the private or voluntary sectors—that they will take 20 beds and negotiate a price which is very low. That means that the care home cannot provide a decent quality of care at that unrealistic price. This has been talked about and written about by Laing and Buisson and various other bodies. It is a known fact among those who follow very closely what goes on, but at the moment it is not really known to the public.
Lord Lipsey
My Lords, I rise to support the amendments of my noble friend Lord Hunt and the remarks just made by the noble Baroness, Lady Greengross.
There have been a number of scandals, both about care at home and care in care homes, over the past year. I am astonished that the situation is not much worse than it is. When you see the pay and conditions imposed, and the people working under absurd and exploitative conditions in this sector—I use that old-fashioned word, exploitative, because it is the only one that applies—it is quite remarkable how many of them still care and still work their heads off for the people for whom they care We should pay due tribute to all those people.
Approaching this objectively, and it has been this way for some time, we have a situation that would be solved readily in a free market. The supply of people providing care is going down, and it will continue to go down, largely because of the Government’s crackdown on immigration; many of the workers in this sector are immigrants, as can be seen when visiting nearly any care home. The demand is going up year after year, if only for demographic reasons. What you would expect to happen would be for pay to go up, attracting more and better workers to the sector, thus resolving the situation. However, that is not happening.
Why? Because, in effect, there is a monopoly purchaser: the local authority. However, the local authority can only buy with the money it is allowed by the Government. As we know, the amount available for care, which should have been going up, has been going down. You can call on the CQC or local authorities to pay more but they are in an impossible position. If they do not connive in the appalling conditions inflicted on these workers, they will not be able to provide the services at all. So they try to get through another year and accept a lower tender or another company, even though they know that their standards are appalling. This is not the fault of the local authority. It is the fault of our national failing to put money into care while we have continued to ring-fence money for health and education.
I was once asked by a Care Minister, if I had money to spend in the care sector—having studied it quite a bit on the royal commission—how I would spend it. I said that I would give them all £1 an hour more and improve the standards of their training. I would say exactly the same thing today. I am supportive of the Dilnot proposals; I think that it is wonderful that we are spending more than £1 billion to help richer people not to be wiped out by their care costs. It is a great thing. However, it is not as great a thing as it would be if, at the same time, we were providing the money to allow local authorities properly to look after and provide basic services to people who need them, and to provide the money that would enable those providing those services to live decently and with pride in the wonderful job that they have been given to do.
Lord Low of Dalston
My Lords, I support Amendments 86N and 86Q tabled by my noble friend Lady Greengross, to which I have added my name.
This is a very important debate. As has been said, these amendments are all about quality and speak to many of the concerns to which the noble Lord, Lord Hunt, has just given powerful expression. The Care Bill introduces a number of important new duties and responsibilities to help place the right values at the heart of our care system. The well-being clause, for example, provides a foundation stone for the principles that should inform the whole of social care. However, our social care system is only as strong as the services that are actually commissioned. With budgets getting tighter and tighter, and demand getting ever greater, local authorities all too often commission care and support services based solely on finding the cheapest possible option. Unless we can ensure that the way in which services are commissioned drives the quality outcomes that we all want to see, important changes such as the well-being principle will remain simply a pious aspiration.
Amendment 86N would oblige local authorities to adhere to minimum standards in the way that they commission services and would give the Government power to make regulations for appropriate minimum standards. Amendment 86Q would provide for regulations to ensure that care visits lasted long enough to deliver the support needed. This would exert an important influence on the quality of services for disabled and older people. Focusing too much on cost creates an unacceptably high risk that care will be of the poor quality that we have heard too much about of late, which does not meet the basic needs of vulnerable people for support to enable them to live with dignity.
There are some fantastic examples of high-quality services across the country, despite severe budgetary constraints, and much can be learnt from how some local authorities have been able to build quality into what they do. However, there are also too many examples of people suffering as a result of poor-quality commissioning and receiving totally insufficient support, which consists simply of fleeting visits from carers who barely have time to say hello, let alone get to know and understand the needs of the person they are supporting.
I have heard of many cases of care workers rushing in to deliver care in visits of 15 minutes or even less. Fifteen minutes is not long enough to help people wash, get dressed, prepare a meal and use the bathroom. It is hardly long enough to take your coat off. It certainly is not long enough to promote people’s well-being. Care visits can be the only contact that socially excluded and vulnerable people have in a day. It is sobering that Leonard Cheshire Disability has recently announced that it will not accept contracts that provide for visits of 15 minutes or less.
A recent survey of local authorities found that 90% still pay providers according to the time they spend with the service user rather than the outcomes they achieve. This simply encourages a race to the bottom. The Bill needs to contain provisions that will help to ensure that quality of service is a key consideration in commissioning decisions. There must be checks and balances in the commissioning process and quality must be part of the equation. If we want a society that provides care based on need and not merely that which can be provided at the lowest cost, we need to support these amendments.
Ministers in the Department of Health have made a number of positive statements about improving quality in care. I hope that the Minister might be willing to accept these or similar amendments, but I ask him at the very least to clarify what the Government intend to do to make the positive rhetoric on quality a reality when it comes to commissioning services.
Baroness Jolly
My Lords, I will speak briefly to Amendment 86N, in the name of the noble Baroness, Lady Greengross. We have had an interesting debate, with quality at the heart of it. That is absolutely right because the whole principle of shaping markets has to be around providing quality and safe services for vulnerable people.
I was interested in the response to this that the noble Lord, Lord Hunt, had from ADASS. Certainly, I do not recollect from when it came to give evidence that that was its reaction, but I will look that up.
The other thing that I want to reflect on is this business of changing people for domiciliary care. That is not what people want. What people want is to be cared for by people they know; they do not want different people coming in day after day. My mother has a team of eight or nine people who call on her but she knows them all. That gives flexibility to the agency that sends them her way. It is not impossible. People need to know their care staff. My mother knows a week in advance who is coming, on what day and at what time, which is hugely reassuring.
I also have huge sympathy with those who have pointed to the scandal of zero-hours contracts. Whatever can be done to try to stop that practice must be looked at with some urgency. This is all about quality.
The amendment would ensure that services commissioned from providers are of high quality and provide a high level of safety for patients or those being cared for. The scrutiny committee recommended linking quality and safety with the NICE quality standards. That is really very straightforward: the NICE care quality standards exist, so why should services not be commissioned based on them?
Will my noble friend explain how quality will be assured and what the rationale is behind abandoning, or not taking up, the NICE link? Is he able to offer assurance by putting into regulations the link with those NICE standards?
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, in tabling these amendments, the noble Lords, Lord Hunt of Kings Heath and Lord Beecham, and the noble Baronesses, Lady Greengross and Lady Emerton, bring to the attention of the Committee the important role that local authorities have to play in fostering a market that offers people genuine choice between a range of high-quality care and support services.
To support choice and control for individuals, and to improve quality of care, it is critical that a range of types of care and support is available locally, and that the market in services is able to grow and adapt over time to meet people’s needs.
The Care Bill marks the first time that local authorities’ responsibilities to promote the market in local care and support services has been captured in law. This recognises the importance of ensuring the availability of a variety of high-quality services to meet the needs and preferences of all local people, not just those whose care is arranged by the local authority.
The duty is about ensuring that the market meets the needs of local people with a choice of quality services; it is not simply about promoting a market for its own sake. This focus on quality should be understood in a broad sense. High-quality services will be fit for purpose and appropriate to an individual’s needs. Consequently, the important issue raised by Amendment 86J, of ensuring that local authorities shape markets that offer people a choice between appropriate services, is already covered by the clause: propriety is an important component of quality. I say to the noble Baroness, Lady Greengross, that Clause 5 requires local authorities to shape diverse markets in care and support services. I do so in the light of her concern that low-paying local authority contracts might preclude smaller, voluntary sector organisations from playing a part in the market. The provision will include ensuring that people are able to choose from a range of providers, including small and micro providers.
In fulfilling the duty, it is vital that local authorities engage with adults using services, their carers and providers, as Amendment 86K emphasises. The Bill therefore requires local authorities to consider how providers can meet current and future demand for services, and the importance of fostering innovation and improvement in their local area. Consequently, I reassure noble Lords that it would not be possible to fulfil the duty as it stands without engaging providers, adults who are using care and support services, and carers.
A number of the amendments relate to one of the most important ways in which local authorities can shape local markets: their commissioning decisions. Local authorities are required by Clause 5 to consider the importance of ensuring sustainability. This requires a strategic perspective on the strengths and demands placed on care and support providers now and in the future. It means that local authorities must consider how their actions may impact on the stability of their local market. They should not act in a way which might risk the sustainability of the market. Looking especially at Amendment 86L, local authorities that set unreasonable or undeliverable prices which undercut the financial sustainability of the provider market would therefore not be fulfilling this duty. However, it is important to emphasise that the normal and effective operation of any market includes some providers entering and exiting the market. The Government do not wish to prevent exit, or require local authorities to prevent exit. It would not, therefore, be appropriate for local authorities to promote the sustainability of individual providers rather than the market in general. For that reason, I cannot support the amendments proposed by the noble Baroness, Lady Emerton, although, of course, I sympathise with her concerns.
The noble Baroness, Lady Greengross, expressed the worry that low-paying local authority contracts might lead to the subsidy of providers by self-funders. The introduction of the cap on care costs will mean that a person who chooses to meet their own needs will be able to compare what they might pay to meet their needs with what the local authority pays. If a person wants to, they will be able to ask the local authority to arrange to meet their eligible care needs so that what they pay to the local authority to meet their needs would be the same as the figure that counts towards the cap. I hope that is helpful.
Lord Campbell-Savours
Does that mean that a self-funder in a home would therefore know what the local authority rate was going to be? That is what I understand the noble Lord to have just said. The information would flow through, would it not?
Lord Campbell-Savours
I am sorry to press the noble Earl. As I understand it, in many homes, self-funders are completely unaware of what the local authorities pay.
Earl Howe
Under the cap arrangement, there will be for all to see a notional rate that the local authority will pay for care. That is the rate at which the progress against the cap will be measured for a particular individual in a particular area. We are moving to a different system.
Lord Hunt of Kings Heath
We are almost anticipating a later debate when it comes to the Dilnot cap. This is an important issue. It is well-known, is it not, that self-funders essentially subsidise those people funded by local authorities. We know that some homes simply would not be viable if they existed only on local authority rates. In a transparent era, will self-funders put up with that? The cap relates only to local authority rates, so self-funders, in many cases, will have to pay much more than £72,000 before they can look to the local authority for support. If they now know that in addition to having to pay well above the £72,000 they have actually been subsidising people who have been supported by local authorities, I think it is going to lead to some severe problems.
I do not expect the noble Earl to be able to respond in detail, and perhaps this is in anticipation of the debate that we will have in our next session, but I am not sure whether the issue of fairness has been factored in to an understanding of how this is going to work in practice.
Earl Howe
Local authorities and individuals can pay different prices for care. That can be because individuals have consciously chosen premium facilities or because the local authority has negotiated a lower price in exchange for buying care for a larger number of people, which can often happen as well. As is the case now, local authorities and providers will continue to negotiate arrangements and fees for providing care and support. This process should ensure that contracts reflect the market price for providing care. Local authorities that fail to negotiate properly with providers and do not have regard to the actual cost risk legal challenges to the care fees that they set. However, in response to the noble Lord, Lord Campbell-Savours, I would say that in future the independent personal budget will set out the cost to the local authority. That is the transparency point that I was trying to get at earlier.
Lord Campbell-Savours
I am very sorry but the point is being missed and I think that my noble friend on the Front Bench tried to qualify it. Up to £75,000, the self-funder is paying the full whack. As I understand it, what is being said is that in the same home the local authority rate either will be or will not be available to the self-funder who is paying that full rate. All I want to know is: if they are paying under the £75,000 cap, will they know what the local authority rate is? That is what I am trying to find out.
Baroness Greengross
My Lords, I have mentioned to the noble Earl another aspect of this which I think needs to be taken into account. Not only will this funding by some people of other people—or the “secret tax”, as I call it—become better known but there will be a strong incentive for self-funders to dispose of their assets so that the local authority pays the local authority rate for them, even if they pay in more on top of that. Therefore, I think that the Government need to take into account the huge extra cost on local authorities which we have not thought about so far. If self-funders were to go to a financial adviser and ask for advice, I imagine that many financial advisers would say, “Dispose of some of your assets and at least the local authority will pay that rate for you”.
Earl Howe
But for somebody with assets who is looking to be taken care of in a residential home the incentive to dispose of their personal assets is surely going to be a great deal less than it is at the moment. I would have thought that that incentive was much greater now than it will be in the future, when we hope that there will be financial products on the market to enable people to insure up to the level of the cap. Therefore, I am not sure that I completely understand the force of the point that the noble Baroness is making. Obviously there will be some incentive for people to dispose of their assets but I suggest that it will be less than she has stated.
To move on to the noble Baroness’s Amendment 86M, there will be a dispute between a local authority and a provider as to the prices proposed or other matters. Occasionally, disputes may become intractable. Therefore, I completely understand why the noble Baroness proposes through her amendment to, in effect, require a new independent adjudicator to arbitrate in any unresolvable disputes. However, it is our view that any disputes arising as part of a contractual negotiation must be resolved through that process. Appointing or establishing a new independent adjudicator would be likely to add unnecessary cost and bureaucracy to the process of commissioning. We also believe that it will be likely to increase disputes by providing a means of challenge which would soon become a standard process.
Baroness Emerton
My Lords, I thank noble Lords who have contributed to this debate, which has been extremely wide and meaningful when, as the Minister said, it is the first time that legislation has tackled the issue of going to the market place for care. Enough has been said by noble Lords to express the great concern that there is for the standards of care and its sustainability. I thank the noble Earl for his responses, but we would like to take this away to think more about some of the issues raised tonight.
It has been helpful to have the debate and to bring out the issues. Perhaps we can now be slightly more constructive in looking at the way forward. I beg to leave to withdraw the amendment on the basis of reflecting on the issues raised.
“( ) “Carer of a child” means a person who is a carer for the purposes of section 57.
“( ) “Young carer” has the same meaning as in section 60.”
Lord Low of Dalston
“( ) whether, and if so to what extent, the provision of a structured programme of care provided for a limited period to help a person maintain or regain the ability to live at home could contribute to the achievement of those outcomes,”
Lord Low of Dalston
My Lords, I shall also speak as briefly as I can to Amendments 88PA, 88PB and 88PC, on which my name also appears.
The purpose of Amendment 87H is to ensure that intermediate care and reablement needs are considered as part of the assessment process so that a holistic approach to meeting care and support needs is taken. In the White Paper of July last year, the Government promised that the new system would,
“promote wellbeing and independence at all stages to reduce the risk of people reaching a crisis point, and so improve their lives”.
As part of their vision for care and support, the Government accepted that they needed to move away from an approach that saw people as having to wait for a crisis before they could access care and support. The White Paper included a number of references to reablement, which the Government saw as helping people regain their independence at home.
The Bill, however, needs to be strengthened to take this perspective more fully on board and so that local authorities are clear about the steps they need to take to adopt a genuinely preventive approach to meeting needs for care and support, particularly as regards providing or arranging for reablement. At present reablement, for all the many promising words in the Caring for Our Future White Paper, remains conspicuously absent from the Bill. Whether it is enabling someone who has recently had a stroke to regain through their rehabilitation the skills they need for independent living, easing a person’s discharge from hospital, helping people when difficulties start to arise following a bereavement or after a fall, or providing aids and adaptations following the onset of sensory loss, reablement can be crucial in determining whether someone experiencing acute health problems goes on to develop long-term care needs or, on the contrary, feels confident enough to go on living independently.
There are a number of definitions of reablement, but broadly it refers to the relearning of self-care skills following a stay in hospital or the onset of an illness or disability. The aim is always to reduce the need for longer-term support. The social policy research unit and the personal social services research unit at the University of Kent and the LSE have analysed home care reablement services and found that reablement is associated with a significant decrease in subsequent use of social care services. The cost of the services they examined, used by a reablement group over 12 months, excluding the cost of reablement itself, was 60% less than the cost of the services used by those in a conventional home care group who did not receive reablement. To ensure that needs assessments properly factor in the potential health and well-being gains associated with a structured programme of reablement, Clause 9 needs amending to ensure that authorities assess the extent to which reablement or intermediate care would help people achieve the outcomes specified as a consequence of Clause 9(4)(d).
Amendment 88PB is the parallel amendment in relation to Clause 13, on eligibility. Its purpose is to avoid people who are judged ineligible for care packages also being denied intermediate care and reablement services or enduring unnecessary delays, by ensuring that the benefits of providing this help are considered when a local authority makes a determination on a person’s eligibility for care. Too many people do not get offered this preventive support, with the result that many of them are left to struggle on their own. This merely delays the moment when their needs worsen and they require more expensive support.
A lot has been written about reablement over the past five years or so in Green Papers and White Papers, but not yet in statute. What intermediate care and reablement have in common is that they are time-limited interventions that can be provided to a person independently of their eligibility for longer-term care and support. Crucially, as we have seen, they are also cost-effective. Curiously, the Bill does not mention reablement by name, although Clause 2(4)(d) paves the way for it when it speaks of regulations making provision for,
“services, facilities or resources which … are provided for a specified period only”.
Reablement or intermediate care can make all the difference between a person going under and remaining independent. A report produced by Deloitte for Sense and four other charities estimated a net return of 52% to a local authority that invested in a communicator guide and a rehabilitation service for deafblind adults who need help gaining news communication skills. It is essential that local authorities consider whether, and if so to what extent, a person would benefit from the provision of these time-limited but effective services. This does not place them under a duty to provide intermediate care and reablement services but, at a minimum, it ensures that they consider the value of putting in place those services where this would help maximise independence and also save the council money in the long run.
Such a battery of heavyweights have their names on Amendment 88PA that I hardly need to say anything about it—they will make the case better than I ever could. The amendment slightly expands the duty on local authorities to consider preventive support following a determination on eligibility. It provides that local authorities must consider not only whether service users would definitely benefit from the provision of preventive services under Clause 2, or information and advice under Clause 4, but whether they “would be likely to” benefit from such services. We have to be wary of placing burdens on local authorities that they cannot meet but this amendment is careful not to do that. It just opens the gateway to preventive services a little wider and makes it more difficult for local authorities to use unreasonable justifications for refusing to provide preventive support.
Baroness Browning
My Lords, I speak to Amendments 88B and 88N in this group. The noble Lord, Lord Touhig, has added his name to Amendment 88B, which is about the need to co-ordinate between two pieces of legislation: this Bill and the Children and Families Bill, which is also going through the House. It focuses on assessment, particularly at the time of transition from children’s to adult services. That is a very sensitive time, and the Minister will not need reminding that it was the weakness in the system of transition that prompted the initiative for the introduction of the Autism Act. There is much well documented casework about young people on the autistic spectrum who move from children’s to adult services that gives us a great deal of cause for concern. As the noble Lord, Lord Low, has just pointed out, if people do not get their correct assessment and services at the right time, they simply move on to more serious deterioration in their condition. Just looking at the bottom line, it is usually a crisis management situation, which is not good for the individual and certainly costs the statutory services a lot more money than it would have done if the transition had been smooth and matters had been dealt with properly.
Amendment 88B therefore calls on the Government to consider how this new system of SEN reforms in the Children and Families Bill will fit with the changes that are proposed in this Bill. Appropriate planning and support in the move to adult services is very important, and it is important that these two areas are co-ordinated. There is a danger that they could be done quite separately from each other, which would not be in the interest of the individual concerned. Under the Children and Families Bill, some young people—for example, those with autism—will be able to access an assessment for the new education, health and care plans, which of course will replace what we used to refer to as statements, up to the age of 25. This creates a clear overlap with care assessments under the Care Bill, which the same young people with autism may be eligible for from the age of 18. It is very important that the two systems of assessments and plans talk to each other.
In particular, that means that when a local authority carries out a needs assessment, as in Clause 9 of the Care Bill, it must ensure that it is co-ordinated with any assessment for an education, health and care plan that may also be under way under a separate piece of legislation. I have mentioned autism—I am sure that will not surprise my noble friend—but of course it will apply to young people with other conditions as well. However, this is particularly important for the autistic community because we know that it is during that move from the structure of full-time education in school into adolescent and adult services that you start to see a great deal of change in the individual, as the structured routine of the day starts to move to more adult choices and ways of doing things, including education.
I therefore hope that my noble friend can reassure me tonight that these two pieces of legislation will be compatible, that discussions have taken place between the two departments to make sure that there is no overlap, and that that famous word “seamless”, which I have heard so many times related to transition from children’s to adult services, will genuinely mean “seamless”. I spent 18 years as a Member of Parliament but did not see much that I would recognise as seamless. We have the opportunity to make this seamless. I hope that my noble friend will assure me that that will happen tonight.
I will speak very quickly to Amendment 88N. I tried with an earlier amendment to get my noble friend to agree that social work-qualified staff played a greater role in providing information. I will now have another go, as when he replied earlier I got the hint that he did not seem to accept my argument. I will try again in terms of their role of assessment, which is much more narrowly defined in Amendment 88N. That amendment ensures that information and advice are not only proportionate, but that the local authority must employ social work-qualified staff to provide the information and advice in cases where present or foreseeable needs are classified as complex. Of course, this goes into regulation, which is what this part of the Bill requires.
I hope that my noble friend will look more kindly on this particular recommendation because these are complex needs or—and this is important—foreseeable complex needs, so you are dealing with some of the most difficult cases. You are almost certainly looking at cases where there is some lack of capacity for a start, as well as people with multiple diagnoses and those with very complex situations. It is important that social workers are there. I am asking a Minister with responsibility for health to recognise that unless we in this House bring social work and healthcare together in statute, whatever our best intentions, it will not happen. Again, from all that casework I dealt with—I raised this at Second Reading—as a Member of Parliament, when somebody sat in my surgery and said, “What you need is to get all these people together round a table”, I, the MP, could never work out why nobody ever took responsibility for it. By bringing into regulation the role of the social worker, you make some progress in ensuring that in these very complex cases things are not only speeded up but that there is a much better outcome.
Baroness Wilkins
My Lords, I will speak to Amendment 88A. This amendment relates to Clause 9, which requires a local authority to carry out an assessment where an adult may have needs for care and support. The clause sets out things that the local authority must consider, for example the outcomes the person wants to achieve in their day-to-day life. There are similar provisions in Clause 10 in relation to a carer’s need for support. There is, however, an anomaly between Clauses 9 and 10. Under Clause 10(6), the local authority also has to take account of whether the carer works or wants to work, and whether the carer is taking part—or wants to take part—in education, training or recreation. That provision is missing from Clause 9, while in other respects the two clauses closely mirror one another. Surely the same provision as Clause 10 proposes in relation to carers should apply to people in need of care and support? While many of those with a need for care and support may be elderly, or may not be able to—or want to—work, others will want to. Many will be interested in education, training or recreation. This is an important gap that sends an unfortunate message about the ability or desire to work of those with needs for care and support.
Of course, it may be that the Government will argue that this is covered by Clause 1(2)(d), which includes in the concept of well-being,
“participation in work, education, training or recreation”.
If that were so, however, presumably the separate provision for carers in Clause 10(6) would not be needed.
I understand that overwhelming evidence exists that carers are often forced to withdraw from education or employment. That may well be why the Government felt they should include the emphasis on these things in relation to the assessment of carers’ needs. Possibly there is not as much evidence in relation to disabled people, and, as I have said, many social care users are older people. That does not mean that they will not be interested in education, training, recreation or even work. One in three people who use social care services are disabled people of working age.
In the recent report The Other Care Crisis by five disability organisations, the researchers found that time and again disabled people told them that the right care and support was critical in finding and sustaining work, studying and keeping fit or enjoying the arts. How can you hold down a job if the hours and type of support you are provided with take no account of a course you may be studying or of a job? What if the job starts at 9.30 am but your carers do not come to get you up until 9 am, or they turn up at different times each morning because of short-staffing?
Carers UK and others have rightly worked very hard to show the impact of caring on employment chances. As I say, this may well be the reason why the Government has included Clause 10(6). The Government may simply not have realised, however, how this would come across to users of social care services who wish to work. I hope the Government will want to rectify this anomaly.
Baroness Meacher
My Lords, I shall speak to Amendments 88SA, 88SB and 92ZZCZA, all of which are designed to ensure that parents who have care and support needs receive sufficient services to ensure that the caring burden on their child is not such as to impede their education and well-being.
Young carers are, of course, children and young people under 18 who provide regular and ongoing care and emotional support to a family member who is physically or mentally ill, disabled or misuses substances. The 2011 census identified 178,000 young carers in England and Wales; an 83% increase in the number of young carers aged five to seven years old; and a 55% increase in the number of eight and nine year-old children caring. I find these numbers staggering. We are talking about a lot of children of a very young age caring for a very considerable number of hours each week.
Why are the amendments important? Apart from a concern for the well-being of children, the issue is important for taxpayers. Young carers whose parents do not receive the support they need have poor educational and employment outcomes and suffer from negative health, with obvious cost implications for the Treasury. These amendments and the resulting early intervention could alleviate those problems and avoid crises, family breakdown and child protection issues, which, again, are a tragedy not only for the family but for the taxpayer and society.
Lord Touhig
My Lords, I will be very brief in speaking in support of Amendment 88B. Certainly, I very much welcome the opportunity to improve access to the right support for young people with autism. I have met many young people with autism who have found that times of change, such as the transition from school to adulthood, are very challenging. It is the time when families need the appropriate planning and support to move from children’s services to adult services. In recent times I have talked to quite a few young people and their families who tell me that life at the time of transition, as they move from young people’s services to adult services, is like standing on a cliff edge.
The noble Baroness, Lady Browning, made a very powerful case that she articulated very well when she said that there would be considerable overlaps between this Bill and the Children and Families Bill. It is important that these two systems talk to each other. They must not operate in silos or we will never, as the noble Baroness, Lady Browning, said, ever get round the table and sort these things out. That makes common sense and I hope the Minister will recognise that—although, when I was growing up my mother used to say to me, “Son, in life, you will find that sense is not that common”. However, I hope that in this case it will prove to be and that the Government will see the reasonableness of these proposals.
Baroness Tyler of Enfield
My Lords, I add my support to Amendment 88B and point out that, while it is in the name of the noble Lord, Lord Tyler, on the Marshalled List, it should have my name attached to it.
Both my noble friend Lady Browning and the noble Lord, Lord Touhig, have presented a cogent case. I am not going to say anything other than it is important that we have properly co-ordinated arrangements for the transition process and the assessment as young people move between children’s and adult services. Certainly, like my noble friend Lady Browning, my experience is that far too often, in far too many cases, it is far from seamless.
I also support the three amendments to which the noble Baroness, Lady Meacher, has just spoken on young carers. The separation of adult and children services proves a real structural barrier, in my experience, to supporting young carers. Simply improving guidance and the other methods that have been tried before will not ensure the clear accountability that is needed for supporting the whole family. I know that the Minister has spoken before in Committee about the importance that the Government attach to the family approach—a view that I share—but a recent evaluation carried out by the Children’s Society found that the professionals involved believe that the law must be changed so that there are clearer levers for the provision of care and support in a way that sustains the whole family, and clearer lines of responsibility and accountability for both adult and children services.
We have discussed this both at Second Reading and in Committee. It needs a fully joined-up response and, while I understand and accept the Minister’s argument that most of the heavy lifting, if you like, in this area will be done in the Children and Families Bill, these amendments are needed in the Care Bill to ensure that adults’ needs are met sufficiently so that children and young people are protected from inappropriate caring, and that we have proper joining-up and co-ordination, not simply between services on the ground but between these two important pieces of legislation.
Baroness Wheeler
My Lords, the issue of assessment is an important part of the Bill and key issues have been raised which need to be carefully considered by the Government to ensure that the Bill gets these provisions right.
As we know, the Bill extends the right to be assessed for care and support to self-funders and their carers which, in the estimation of major social care charities, will involve nearly 500,000 additional assessments being undertaken by local authorities on top of those for people whose care is provided by them.
We support the extension of entitlement to assessment to self-funders and their carers but we join with noble Lords who are concerned about whether local authorities can possibly carry out this major undertaking in the realities of the current funding crisis and the other duties being placed on them. It is vital that we hear from the Government whether they consider extra resources will need to be made available to support these new duties and whether the noble Earl is confident that the current funding settlement will enable the duties to be performed effectively.
Our Amendments 87J and 88D address the concern that noble Lords and care and support organisations have raised over including in the Bill the requirement—as part of the assessment—to consider whether and to what extent the adult’s or carer’s own capabilities, or any support available from family and friends, could contribute to achieving the outcomes identified in the care plan. It is a very important issue.
Clauses 9(4)(d) and 10(5)(f) were not part of the consultation on the draft Bill, which followed the Law Commission’s advice on making a clear distinction between consideration of care and support needs and how these needs should be met. Support from families and carers should be considered as a way of meeting needs rather than as a reason for deciding the person does not have needs.
The approach in the Bill runs a huge risk of the assessment not recognising the vital contributions of carers and the extent of needs if the carer is unable to provide care. The clauses, as they stand, blur the distinction between an assessment being about what the needs are and the ways of meeting them because they look at how needs can be met other than through the provision of services before any decision about eligibility has been made. They also raise concerns that a carer might be pressured into providing care that they do not feel able to provide—or even that the adult may be pressured into receiving care from a family member. I hope that the Minister will recognise the importance of these two paragraphs being deleted.
Instead our Amendments 92ZZF and 92ZZL propose putting the issue in other parts of the Bill where the vital distinction we are making will be clear. We are seeking to insert new subsections into Clauses 24 and 25 to retain the aim of a capability-based approach being properly considered—in other words one that draws on a person’s own abilities and available social networks. Our amendments would require this process to take place after needs have been defined and not before.
The proposed new subsection refers to the local authority duty to provide information and advice to people not eligible for care and support. It adds to the advice and information requirement to discuss with the person who has been assessed whether they have the individual capabilities or social or community resources that can help them achieve the outcomes they want. Clause 25 deals with the care and support or support plan for people eligible for support, and our amendment again would ensure that the individual’s capabilities and social or community resources are considered at this stage after assessment. This is vital to ensure at least some protection against either the carer or adult needing care being pressured into a caring relationship they do not want, or is inappropriate.
Our Amendments 88P and 88PA deal with the concerns raised under this and in a later group to ensure that assessments are undertaken by persons with expertise, in line with current guidance and practice. Amendment 88P provides for the local authority to be satisfied that the assessment of needs of the adult and carer have been appropriately and proportionately considered by an appropriately skilled or qualified assessor. The intention of Amendment 88PA is to tighten the duty on local authorities to consider preventive support following the determination of eligibility. We want to ensure that local authorities do not use unreasonable justification for refusing to provide or arrange for preventive support and consider what preventive services would or would be likely to benefit an adult.
The current guidance recognises the need for flexibility in certain circumstances on who undertakes the assessment, and this needs to be retained. For example, my local authority is in the last processes of undertaking effectively new assessments of existing clients under the transfer to self-directed support and personal budgets. As noble Lords will know, I am a carer and my partner has long-term health and care needs after suffering a major stroke. Our recent assessment was undertaken by a very competent member of the personalisation team who is not a qualified social worker but a former care assistant, so she fully understood home care support. However, she had access to a qualified social worker care manager for advice to whom we could also refer if we needed. I stress that this was an assessment of a care plan in operation for six years, and under a process that was not originating the plan but viewing it from the personalisation perspective. We both found the new, but demanding process— 44 page forms, as I might have mentioned before—very helpful in giving new perspectives on issues, such as risk when I am not at home or contingency arrangements if I am hospitalised, or fall under the proverbial bus. Most carers just cross their fingers and hope that it would never happen for their own and the cared-for person’s sake, but the assessment experience was a positive opportunity to take stock and a worthwhile experience, which I hope we are still feeling good about when the personal budget allocation comes.
Nevertheless, my point is that the original assessment was conducted by a qualified social worker with full understanding of care requirements for major stroke recoverers, and that assessment has stood the test of time six years on. Had this assessment been a first time assessment, however, it would have been vital to have had a qualified social worker, plus any specialist advice on stroke, if needed. Amendments 88A and 88DA tabled by the noble Baroness, Lady Emerton, require the local authority to involve the relevant health practitioner in the needs assessment for adults and carers under Clauses 9 and 10. We agree that they should be involved where their specialist skills are needed and that this will help ensure better integration of health and social care, and overall better patient care.
I also support Amendment 88 from my noble friend Lady Wilkins, which provides for the local authority to have the same duty under Clause 9 for adult assessments as is given in Clause 10 for carers’ assessments. This is a logical amendment and I hope the Minister will recognise that.
We have also had three important amendments tabled by the noble Baroness, Lady Meacher, which have been added to this group and which we support. These reinforce our messages in the debate in Committee last week on young carers—namely that adult assessments need to meet the needs of the adult, so that children are protected from inappropriate caring. The noble Baroness has stressed how important this is and I look forward to the Minister updating us on the developments over the interface between the Care Bill and the Children and Families Bill in respect of young carers and parent carers.
Finally, I would stress how important the assessment process is. The Government’s discussion document on eligibility recognises that they are an integral part of the system. As we have seen, there are many separate aspects related to assessments, and it is a pity that, in this instance, we have had to lump them all into one big debate. I would therefore urge the Minister, even if he does not agree with the very strong case presented by noble Lords for including these matters in the Bill, to undertake to take the issues of concern away and review this part of the Bill so that there can be full confidence in the legislation underpinning this important issue.
Earl Howe
My Lords, I thank all those who have contributed to an informed and very interesting debate. The amendments mostly focus on the assessment process, but some also refer to Clause 13 on the eligibility criteria which we will consider later.
The noble Baroness, Lady Wheeler, is quite right that assessments will remain an integral part of the reformed care and support system. However, rather than acting primarily as a gateway to the adult receiving care and support, the future system will place more emphasis on supporting people to identify their needs; understand the options available to them; plan for meeting care and support needs, and reduce or delay needs where that is possible.
The amendments tabled by the noble Lord, Lord Low, Amendments 87H and 88PB, rightly point out that intermediate care services, such as reablement, can play a vital role in helping people regain their independence and in preventing avoidable re-admissions. Under this Bill, local authorities would be expected to consider how the provision of reablement and other types of care and support could contribute to the achievement of an individual’s desired outcomes as part of the assessment process. Clause 13(2)(b) makes it clear that, in determining eligibility, local authorities must consider if the person would benefit from preventive services—whether or not they have eligible needs. This would include reablement services.
Amendments 88PA and 88PC, tabled by the noble Lord, Lord Low, look to build on the measures in Clause 13(2) about prevention. Amendment 88PC raises the issue of individual entitlements to preventive services, facilities and resources. I hope he would agree that Clause 2 is an important step forward in itself, capturing prevention in primary legislation for the first time. It will require local authorities to provide or arrange prevention services and actively to consider the steps that they should take. The Bill makes clear that prevention is a core part of care and support provision, not an optional extra. This duty is only one part of a broader approach throughout the Bill to preventing, delaying and reducing needs.
One of the aims of the pooled budget, to which the noble Lord, Lord Low, referred, is that local authorities and CCGs should spend it on preventive services. However, individual entitlements should be built around people with ongoing needs for care and support—as they are now. We do not think it is necessary, or would make sense, for there also to be individually enforceable rights to preventive services which would be too broad, and therefore carry a very significant cost burden for local authorities. I took note of the comments of the noble Lord, Lord Low, on that point but, despite these, our view is that any enforceable right in this area would almost unavoidably lead to very high budgetary pressures.
I turn now to Amendments 87J, 88D, 92ZZF and 92ZZL tabled by the noble Baroness, Lady Wheeler. We heard during consultation that assessment processes should look at what an individual wants to achieve and what they can do, not just at their “deficits” or what they cannot do. Assessments should help the person to identify their needs, strengths, goals and aspirations, and consider what type of proportionate intervention might support them. The purpose of Clause 9(4)(d) is not to suggest that such matters should replace more formal types of care and support. The clear purpose of the duty is to assess an adult’s need for care and support. However, it recognises that in order to make the connections to the variety of support available in the community, the local authority should consider how these matters, along with more formal care and support provision, could be of benefit in achieving the adult’s outcomes.
Amendment 88A, to which the noble Baroness, Lady Wilkins, spoke so powerfully, raises the question of employment, education and training, and in doing so repeats Clause 10(6). This re-enacts specific existing provision for carers in relation to such issues, which the Law Commission recommended should remain. We recognise that these areas are of equal importance to adults receiving care and support. However, it is not necessary to recreate this provision as local authorities must already consider during the assessment process the adult’s aspirations in relation to work, education, training or recreation when considering the outcomes they wish to achieve.
On Amendment 88B, I agree with the principle of joining up assessments when it is sensible to do so. The provisions in the Care Bill are compatible with those in the Children and Families Bill, and both Bills allow for joint assessment. I am satisfied that the Care Bill includes the legal framework to enable a co-ordinated approach. My noble friend Lady Browning asked how the Children and Families Bill will fit with this Bill in relation to care planning, and particularly in relation to those with autism. The Children and Families Bill will improve co-operation between all the services that support children with special educational needs and their families. This will require local authorities to involve children, young people and parents in reviewing and developing care for those with special educational needs. Local authorities will also need to publish information about what relevant support can be offered locally. The Care Bill and the special educational needs provisions in the Children and Families Bill require that there is co-operation within and between local authorities to ensure that the necessary people co-operate, that the right information and advice are available, and that assessments can be carried out jointly. We are in discussion with the Department for Education about the links between both Bills.
The noble Baroness, Lady Emerton, proposes in her two amendments that assessments must involve health professionals. In our view, this would not be proportionate because not everyone would have health needs or need to involve a health practitioner. The Bill already allows the individual to decide if they wish to involve a health professional, and Clause 12 includes a power to allow authorities to carry out a joint assessment with other bodies such as the NHS.
My noble friend Lady Browning and the noble Baroness, Lady Wheeler, made important points about the appropriate training and skills of assessors. Stakeholders have told us of the importance of having appropriately trained assessors. We have therefore extended the powers in Clause 12 and I can reassure both noble Lords that we will make regulations to require local authorities to ensure that assessors are properly trained.
My noble friend Lady Browning asked why we have not specified that a qualified social worker should carry out assessments on people with complex needs. The social care workforce, as she well knows, is a mixture of qualified social workers and care managers who have been trained to carry out tasks such as assessments. It is, we believe, for local authorities to determine the mix of their workforces. Local authorities should also make a professional judgment on who has the appropriate skills and training to carry out assessments, and I really do not think it would be appropriate to do this from the centre.
The noble Baroness, Lady Meacher, raises an important point through Amendments 88SA and 88SB about the eligibility criteria for adults with care and support needs helping to prevent young carers from taking on inappropriate or excessive caring responsibilities that can impact adversely on their lives. The draft regulations make clear that an adult’s needs for care and support will be eligible if, because of mental or physical impairment or illness, they are unable to carry out fully any caring responsibilities for a child, or need support to maintain family relationships. Our policy intention is to encourage local authorities to take a whole-family approach, both in assessing and supporting an adult needing care and support, meaning that an individual adult is not seen in isolation from their family circumstances. That would include having to identify the child.
The noble Baroness made the point that better support for young carers will save money for the taxpayer. We agree that better supporting young carers will improve both their well-being and that of the person they care for and that it is also likely to benefit the public purse. That is why we are working with the Department for Education to ensure that a whole-family approach is taken.
Amendment 92ZZCZA follows the same principle, but seeks to add to the duty to meet eligible needs. As I have set out, we see the appropriate way of dealing with the issue of avoiding inappropriate young caring roles to be through the eligibility criteria. We would not wish to create a new stand-alone duty in this regard, which may have a distorting effect on the duty in Clause 18, but rather to ensure that such matters are reflected in the determination of eligible needs. However, as I indicated in debate last week, we need to ensure that the developmental and educational needs of young people are appropriately considered in the context of children’s legislation and services. We will work with stakeholders, including the National Young Carers Coalition, to ensure that, for their part, adult care and support services make appropriate provision in supporting an adult’s needs for care and support to prevent inappropriate or excessive caring by a child. However, we also need to keep in view what should be provided through children’s services and that is what the Minister for Children and Families has committed to do.
The noble Baroness, Lady Wheeler, raised an important point about the impact of the funding reforms. We recognise that people will want to have their care costs counting towards the cap as soon as possible. If this Bill is enacted, people cannot begin accruing costs towards the cap until 1 April 2016. That does not mean that preparation cannot be made locally before that time. We believe that it is appropriate for local authorities to begin assessing people ahead of 1 April 2016. To ensure that local authorities can take advantage of this opportunity, we have provided £335 million to fund the implementation of our reforms. This should enable local authorities to begin assessing people’s needs for care and support around six months before April 2016, if they choose to do so.
I hope that I have reassured the Committee that we are putting in place the support to allow local authorities to manage the implementation of our reforms. We have had a very good debate on assessment and eligibility. I hope that I have reassured all noble Lords who have spoken that the Bill already addresses the concerns that have been raised and that the noble Baroness, Lady Meacher, will feel able to withdraw the amendment. I am sorry—it was the noble Lord, Lord Low.
Lord Low of Dalston
Yes, I was going to say that I think it probably falls to me to consider whether I withdraw the amendment. Before I do so I just want to thank the noble Earl for his full and careful response, and also all those who have spoken in a debate that has ranged quite widely. I have found the noble Earl’s response to the points that I raised very helpful and will consider whether I continue to feel that the Bill needs strengthening in the area of assessment and eligibility in the light of his comments. I listened carefully to what he had to say and feel it will be very helpful in considering how to deal with these issues during later stages of the Bill.