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Oral Answers to Questions
(11 years ago)
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Alex Cunningham (Stockton North) (Lab)
1. What assessment he has made of the treatment of Palestinian child detainees in Israel.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
Before answering, may I briefly place on the record my appreciation of the work of my predecessor, my hon. Friend the Member for North East Bedfordshire (Alistair Burt)? He will be greatly missed by his many friends in the House and across the region.
Despite some progress, we retain serious concerns about Israel’s treatment of Palestinian child detainees. The British ambassador in Tel Aviv wrote again to the Israeli Justice Minister on 14 October to urge further action.
Alex Cunningham
I welcome the Minister to his new post. May I commend the Foreign Office report “Children in Military Custody” for exposing how the authorities in Israel arrest Palestinian children in the middle of the night, interrogate them without parents or lawyers present, bully them into signing confessions in a language they do not understand, and jail children as young as 12 years old? Will the Minister outline what action he is taking and tell the House how many of the 40 recommendations in the report have been carried out?
Hugh Robertson
I am due to make my first visit to the region next week, so will be addressing many of the concerns outlined in the hon. Gentleman’s question. As he knows, the Foreign Office funded the report carried out by Baroness Scotland. We continue to urge the Government of Israel to implement it in full. As I have said, I will be taking that up next week.
Mr James Clappison (Hertsmere) (Con)
I warmly welcome the Minister to his responsibilities—if I may say so, he brings a terrific track record.
Does the Minister agree that the question of detainees is inextricably linked to the overall security situation in the region and progress in peace talks? Does he share my concern that Hamas is resolutely and literally trying to undermine the peace process in the region by building a tunnel from Gaza into Israel, no doubt for the purposes of promoting terrorism? What can we do to remove that obstacle?
Mr Speaker
That was quite a cheeky attempt by the hon. Gentleman. I think the Minister should try to focus his remarks on the issue of child detainees. We are grateful to him for doing so.
Hugh Robertson
Thank you, Mr Speaker—it will, of course, be a great pleasure.
As I said in my answer to the previous question, I look forward to my initial visit to the region next week. The concerns that my hon. Friend raises will be a topic of much discussion. The encouraging thing is that, for the first time in many years, we are in a process. I encourage both sides to engage in that peace process for the greater good of the country and the region.
Mr Andy Slaughter (Hammersmith) (Lab)
When the Minister visits the region, will he raise with his Israeli counterparts why Israel is the only country in the world that systematically tries children in military courts, and why about a quarter of the children currently in custody are held in Israel, which is also contrary to international law?
Hugh Robertson
Yes, I will do so. As I have said, the Foreign Office helped to fund Baroness Scotland’s excellent report into many of the issues surrounding child detainees. We not only funded that report, but entirely support it. During my time as a Minister, I will do everything I can to ensure that its recommendations are properly and correctly implemented.
Mr David Burrowes (Enfield, Southgate) (Con)
I join hon. Members who have concerns about the treatment of detainees, but is it not important to focus on the source of the problem, which is Palestinian children being infected by the glorification of violence and hate education, which, sadly, are supported by the Palestinian Authority? Can the Minister assure me that taxpayer funding does not support such activities?
Hugh Robertson
Yes, on the basis of three weeks’ work, I can give my hon. Friend that assurance. In a sense, his question points to the importance of everybody concerned getting behind the peace process. If that comes successfully to fruition, many of those problems will be solved in its wake.
Mr Jim Cunningham (Coventry South) (Lab)
2. What representations he has made to the Russian authorities regarding the recent detention of six British nationals in that country.
The Minister for Europe (Mr David Lidington)
My right hon. Friend the Foreign Secretary raised the matter with the Russian Foreign Affairs Minister on 25 September and again on 6 October. Our ambassador in Moscow did the same with Deputy Minister of Foreign Affairs Titov of Russia on 22 October.
Mr Cunningham
I thank the right hon. Gentleman for that answer, but there are reports that some British nationals in Murmansk prison have not had access to medical attention, and that some are in solitary confinement. What representations have the Government made regarding the conditions of their pre-trial detention and their access to medical treatment? What response have the Government received?
Mr Lidington
Since the detentions were announced by the Russian authorities, we have sent a team of British officials each week to Murmansk to ensure that the detainees’ consular needs are being properly looked after. We have taken up with the prison authorities, or with other Russian authorities as appropriate, all the concerns that the detainees themselves have expressed to us about the conditions in which they are being held. At the moment, they are telling us that their conditions are “broadly acceptable”, but we stand ready to take up any further concerns that they may have.
Martin Horwood (Cheltenham) (LD)
Given the unjustifiable detention of British citizens, will Ministers follow the example of Councillor Wendy Flynn, mayor of Cheltenham, which is Sochi’s twin town, and refuse any offers of hospitality or visits in connection with Sochi’s winter Olympics in 2014?
Mr Lidington
I am afraid that the Government rules on accepting hospitality are already strict and limit what Ministers can do. The key point is that the Sochi winter Olympics will provide an opportunity for people from this country, including journalists and editors, to meet and engage with Russians of all backgrounds and to stand up for the values in which we believe.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
As these exchanges have reinforced, there is concern on both sides of the House about the continuing detention of the British Greenpeace activists and journalists. Given the growing fears about the conditions in which they are being held—conditions condemned by the European Court of Human Rights last year, I understand—and the length of time they are likely to be incarcerated, can I ask the Minister gently what exactly it will take for the Foreign Secretary to persuade the Prime Minister to intervene on their behalf?
Mr Lidington
First, may I welcome the hon. Gentleman to his new responsibilities? Of course this is a return to European activity from the days when Tony Blair appointed him as one of his champions of the single currency in the Labour party. Having served his time in quarantine, he is now being allowed out again.
The hon. Gentleman may not have been here yesterday, but my right hon. Friend the Prime Minister made it clear at the Dispatch Box that he stood ready to speak to President Putin whenever that would best help the welfare of those who are being detained and lead to a satisfactory outcome for them. The search for a satisfactory outcome to this case remains at the top of the Government’s priorities, and it determines how we handle individual representations.
Wayne David (Caerphilly) (Lab)
3. What recent assessment he has made of the human rights situation in Sri Lanka.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
We have serious concerns about the human rights situation in Sri Lanka, including freedom of expression and judicial independence. I will use my attendance at the Commonwealth Heads of Government meeting to see the situation on the ground and raise our concerns directly with the Sri Lankan Government.
Wayne David
I thank the Foreign Secretary for that reply. However, if he and the Prime Minister are to attend the Commonwealth Heads of Government meeting, what will their strategy be to ensure that the Sri Lankan authorities hear loudly and clearly the representations that are being made and, more importantly, take action?
Mr Hague
Of course we will take up these issues. Between the Prime Minister and I we will be visiting the north of Sri Lanka to see for ourselves what is happening. We will press the Sri Lankan Government to investigate all human rights abuses, including the shocking allegations of acts of sexual violence committed during and after the conflict. We will urge them to allow free expression and to stop intimidation of journalists, and call on them to bring about reconciliation and political reform. It is important that we give that message to them in person.
Sir Malcolm Rifkind (Kensington) (Con)
19. It is both unfortunate and disturbing that the Commonwealth Heads of Government meeting is being held in Sri Lanka at this time. While the intention of the Prime Minister to visit northern Sri Lanka, where the Tamils mainly live, is very much to be welcomed, will he and my right hon. Friend the Foreign Secretary raise at CHOGM the recommendations of the Commonwealth eminent persons group that were discussed at the last Commonwealth conference, in particular the recommendation of a commissioner for the rule of law, democracy and human rights? If such a commissioner had been appointed at the last CHOGM, we would have a much more objective assessment of the true circumstances in Sri Lanka at this moment.
Mr Hague
My right hon. and learned Friend played a distinguished role in the eminent persons group report. It is a pity that not every aspect of that report was adopted by the Commonwealth as we debated it over the last couple of years, although the charter for the Commonwealth was agreed, as was a more active role for the Commonwealth ministerial action group. We will continue to raise these issues in the Commonwealth.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
Just a moment or two ago, the Foreign Secretary said, in relation to human rights abuses in Sri Lanka, that he will be taking up these issues when he travels there. However, in answer to a written question in July, the Foreign Office stated that they “expect progress” in human rights and post-conflict reconciliation in the run-up to the summit in November. Despite writing to the Minister responsible to follow up on that answer, we have not yet received a reply. Will the Foreign Secretary set out now what specific progress on the two key benchmarks identified by the Government has been made since July?
Mr Hague
First, I must congratulate the right hon. Gentleman on being appointed Labour’s campaign co-ordinator for the next general election. As he ran its last general election campaign and David Miliband’s leadership election campaign, we on the Government Benches are delighted with the appointment, even if it makes him a slightly part-time shadow Foreign Secretary.
There have been some steps forward in Sri Lanka, which we have to recognise, including the northern provincial council elections that took place in September. They were generally peaceful and well-regarded, but all the issues I listed remain. While there have been some steps forward, many more are needed.
Mr Alexander
Does the Foreign Secretary accept that there is mounting evidence that Sri Lanka is heading in the wrong direction? It is not simply that these issues “remain”. This month, the Foreign Affairs Committee criticised the
“scant evidence of progress in political and human rights”.
In August, the UN human rights commissioner said that Sri Lanka was
“heading in an increasingly authoritarian direction”,
and even the Government’s own 2012 human rights report warned of “negative developments”. The Prime Minister’s announcement six months ahead of the summit has proved both a misjudgment and a missed opportunity. Will the Foreign Secretary, even at this late stage, urge the Prime Minister to reconsider his decision to confirm his attendance at the summit?
Mr Hague
No. There are many serious criticisms, including in our own reports, of the human rights record in Sri Lanka. Of course these are issues that we want to take up in Sri Lanka, but the right hon. Gentleman must recognise that the Commonwealth Heads of Government meeting will consider matters such as the future of the millennium development goals, expanding international trade and upholding human rights in other parts of the world. We need to be present at those discussions with a quarter of the globe. We also need to recognise that the consequences for the Commonwealth of the United Kingdom not attending a Commonwealth Heads of Government meeting would be very serious and could be long term. That is why it is important, and that is why we decided to be there at the table, as well as raising the concerns so well expressed in this House.
Steve Baker (Wycombe) (Con)
For British Tamils in Wycombe, the situation in Sri Lanka is a cause of profound and continuous concern. Does the Foreign Secretary agree that British people who hail from troubled territories overseas are entitled to the most robust representation from the British Government?
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
4. What recent assessment he has made of the situation in Kashmir.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
The UK is deeply concerned about recent violent incidents in Kashmir. These incidents have caused regrettable loss of life on both sides of the line of control. We welcome the call for dialogue from both sides in response to these incidents and the steps they are taking to prevent future hostilities.
Debbie Abrahams
The territorial dispute in Kashmir is the longest running in the world. It is a particular issue for many of my constituents, and the violence and human rights abuses have spanned decades. I have been disappointed with the Minister’s response. What specifically can he tell me about action being taken on conflict resolution programmes in this area?
Mr Swire
The first thing to put on the record is that we believe any solution should be between the two Governments of India and Pakistan. We welcome progress made in September during a meeting of both Prime Ministers in New York. The British Government do help, and we have had discussions on human rights as recently as last month. From our conflict pool, we support key work on projects to promote trade, development and capacity building in the area.
Bob Blackman (Harrow East) (Con)
Does my right hon. Friend agree that Jammu and Kashmir are part of India and that part of India they should stay until such time as India says otherwise? Will the Government take action to ensure that state-sponsored terrorism in this disputed territory is not allowed to continue?
Mr Swire
It is precisely for that last reason that we urge discussions between the two countries, and I am pleased to report that some progress has been made. Along with other positive measures, both countries have agreed to double bilateral trade by 2014 and India has lifted a ban on direct investment from Pakistan. As the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) said, however, this is a long-running conflict, and we stand by to help; but ultimately it can be resolved only by the two countries in question.
Sheila Gilmore (Edinburgh East) (Lab)
5. What recent discussions his Department has had with the Government of Pakistan regarding attacks on Christians in that country.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
We have publicly condemned the attacks on the Christian communities in Peshawar and raised the issue of religious minorities with the Pakistani Prime Minister and other Ministers, including during recent ministerial visits to Pakistan and at the UN General Assembly in September.
Sheila Gilmore
I share the Minister’s horror at the recent incident, as do many people in this country, particularly in the Christian community. We are accustomed to tolerance here. What practical steps are the Government taking to ensure that the Pakistani Government take steps to protect Christians in their country?
Hugh Robertson
That assistance effectively comes in two ways, not only through the help we provide to tackle counter-terrorism, such as the enhanced strategic dialogue and the joint working group on counter-terrorism, but through our aid programme to Pakistan, which I hope addresses—and I am sure does address—the root causes of extremism and tries to ensure that this does not happen again.
Andrew Bridgen (North West Leicestershire) (Con)
What steps is my right hon. Friend’s Department taking to protect freedom of religious expression not only in Pakistan, but across the world?
Hugh Robertson
That is a good one for my first Foreign Office questions. I will restrict my answer purely to Pakistan. The guarantees to which my hon. Friend alludes are established in the constitution of Pakistan, and we would urge everybody involved in the process to uphold those guarantees and ensure that these sorts of acts do not happen again.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
21. The recent bomb attack on All Saints’ church in Peshawar, which the Minister referred to, was felt deeply not just in Pakistan, but by many in Scotland of Pakistani origin and others, because it was the home church of a Church of Scotland minister, who lost his mother and two other relatives in that dreadful attack. Besides going through the United Nations, how can the Minister raise this issue within the international community? For example, can the EU not also be involved in raising these concerns with Pakistan?
Hugh Robertson
Yes, of course it can. Many other countries will have links to Pakistan in the same way that this country and the church the hon. Gentleman mentioned do, and I know that the EU will be raising the issue in the same way. There are very special relationships between this country and Pakistan, however, and the help that communities such as the one he represents and mentions can offer will be of enormous benefit at a time like this.
Mr John Spellar (Warley) (Lab)
Does the Minister agree that the treatment of Christians is the canary in the mine for the treatment of other minority faiths and ethnic groups—especially, in the case of Pakistan, the Hazaras and Ahmadis—and will he press the Pakistani authorities first to provide protection for Christians and their property, and secondly to take action against discrimination, whether by the state or by other groups?
Hugh Robertson
The answer has to be yes. It is a good question and a good point. Absolutely a key part of our intervention and conversations with the Pakistani Government is about ensuring that minority rights and religious freedoms, as enshrined in the constitution of Pakistan, are indeed protected.
Mr Philip Hollobone (Kettering) (Con)
6. What recent assessment he has made of how close Iran is to producing (a) sufficient weapons-grade nuclear materials to make a nuclear warhead and (b) a ballistic missile capable of delivering such a warhead to Tel Aviv or Riyadh.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Iran continues to enrich uranium to 20% and to expand its capacity for enrichment. This brings Iran much closer to having sufficient material for a nuclear device, should it decide to enrich further. Most large middle eastern cities and some major cities in Europe are within range of Iran’s several hundred medium-range ballistic missiles.
Mr Hollobone
Clearly, enriching uranium beyond the 3.5% required for civilian use sends a very dangerous signal. Is not Iran’s apparent enthusiasm for talks nothing but a protective smokescreen to dissuade the Israelis from undertaking military engagement and to allow Iran to cross the nuclear finishing line and develop a nuclear warhead?
Mr Hague
I believe we have to test to the full Iran’s willingness to negotiate and to come to an agreement with the international community on its nuclear programme. The programme continues: Iran claims that its 20% enriched uranium is fuel for its one small research reactor, but it already has enough enriched uranium to fuel that reactor for the next 10 years. That is why we argue that there is no plausible peaceful explanation for the continuation of enrichment and of many features of Iran’s programme. But we must test Iran’s willingness to negotiate, and we continue to do so.
Andrew Gwynne (Denton and Reddish) (Lab)
But is not one of the dangers of Iran pursuing this nuclear ambition that it could empower some of the terrorist organisations that Iran sponsors around the world, and particularly in the middle east? Does not that further undermine the process of peace in that region?
Mr Hague
Yes, it absolutely undermines the process of peace. The threat of nuclear proliferation in the middle east, which is what the Iranian nuclear programme presents to the world, is of course a major danger to the future of the middle east, just as we are trying to make progress in the middle east peace process and to bring together a peace conference on Syria. It is deeply unhelpful across the board.
Mr John Baron (Basildon and Billericay) (Con)
Given that reciprocity has been a sticking point in previous nuclear talks with Iran, with, perhaps, opportunities missed by both sides, what thought has been given by the west to making a gesture of good will as a first move, perhaps with a relief of sanctions—time-limited if necessary—given that such a move might reinforce the hand of the moderates within the country?
Mr Hague
Substantive changes in our policy on sanctions will require substantive changes in Iran’s nuclear programme, of course. Negotiations took place in Geneva on 15 and 16 October and a further round of such negotiations is now planned for 7 and 8 November, the end of next week. We welcome the improved tone and posture of Iran in those serious negotiations, but it will have to take serious and real steps for us to be able to reciprocate.
Simon Hughes (Bermondsey and Old Southwark) (LD)
7. What recent assessment he has made of the prospects for successful negotiations with Iran on its nuclear programme.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I welcome the more positive approach taken by the Iranian Government at the recent E3 plus 3 talks in Geneva. Foreign Minister Zarif presented a basis for negotiations and we have begun more substantive discussions on how to address the serious concerns about the nuclear programme. If Iran is willing to take the necessary first steps on its programme, we are ready to take proportionate steps in return.
Simon Hughes
I am grateful for the constructive reply from the Foreign Secretary. Given that Lakhdar Brahimi, the UN and Arab League peace envoy on Syria, has recently said that Iran’s participation in the Geneva talks would be fruitful, natural and necessary, will the Foreign Secretary consider an invitation to him to help in that process and in the negotiations with Iran on nuclear weapons?
Mr Hague
It will ultimately be up to the UN to decide who can be brought around the table in a Geneva peace conference. I have already discussed Iran’s approach to Syria with the Iranian Foreign Minister and have put it to him that it is time that Iran accepted—along with Russia and many other non-western countries—that last year’s Geneva communiqué is the basis for discussing the future of Syria and that we are out together to create a transitional Government and bring the conflict to an end. Iran has not yet indicated that; it would be very helpful were it to do so.
Mr Bob Ainsworth (Coventry North East) (Lab)
Notwithstanding the many problems that there have been between our two countries, there are people on both sides of the House who thought that the initial response from the Government to the change in tone from Iran was overly cautious. Surely this situation warrants a little risk. To what degree is the Foreign Secretary prepared to travel to try to solve, if at all possible, this ongoing situation?
Mr Hague
We are all prepared to go a long way to resolve this problem and have indicated that in the direct discussions with Iran. I have already had two meetings with the Iranian Foreign Minister and a telephone call with him earlier this month. As the right hon. Gentleman will know, we have agreed to appoint non-resident chargés as a step up in our bilateral relations. We are, as he can gather, busily engaged in these nuclear negotiations and our officials will meet bilaterally again in the margins of the negotiations. Of course we have to conduct ourselves cautiously on something of such immense importance as Iran’s nuclear programme, but there is no lack of readiness to engage with Iran and to open up our diplomacy to them.
Robert Halfon (Harlow) (Con)
15. My right hon. Friend might have seen the BBC “Newsnight” report last night showing that there has been strong Iranian intervention to support the Assad regime. If it is wrong for the west to intervene militarily to stop mass murder in Syria, would it not be right for the United Nations to condemn Iran for supporting the Assad Government?
Mr Hague
My hon. Friend is right to say that foreign intervention in Syria—directly so in the case of Iran—is helping to prop up a regime that is engaged in the brutal murder of huge numbers of its own people. That is now well known around the whole world. That policy will have to change if Iran is to play a constructive role in bringing peace to Syria.
Jeremy Corbyn (Islington North) (Lab)
In the discussions with Iran, has the issue of a nuclear weapons-free middle east been raised? When it came up at the nuclear non-proliferation review conference, Iran supported that principle. A conference that would include Israel has been envisaged. Does the Foreign Secretary have any plans for such a conference, and any news on when it might take place?
Mr Hague
We do have plans for that. The hon. Gentleman and I have discussed this matter before and, as he knows, the United Kingdom was instrumental in putting a commitment to such a conference into the nuclear non-proliferation review in 2010. A Finnish facilitator has been hard at work trying to assemble the conference. The atmosphere in the middle east has not exactly been conducive to doing so, but the United Kingdom will continue to press for that conference to be brought together.
Julie Elliott (Sunderland Central) (Lab)
8. What recent assessment he has made of the effects of the conflict in Syria on stability in the region.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The situation in Syria is worsening. There are now more than 2 million refugees putting severe strains on neighbouring countries. One third of the UK’s £500 million humanitarian funding for Syria will go to Lebanon, Jordan, Turkey and Iraq, and we are redoubling our efforts to find a political solution to the crisis.
Julie Elliott
What specific request for humanitarian assistance have the Government received from the Lebanese and Jordanian Governments?
Mr Hague
They have requested large-scale assistance to deal with the huge refugee population. Syrian refugees now make up roughly one fifth and one twelfth of the total populations of Lebanon and Jordan respectively. The total assistance that we give to Lebanon has gone past £70 million, and we also give tens of millions to Jordan, so a great deal of British assistance is going to those countries. We are the second biggest donor in the world to the Syrian humanitarian crisis.
Sir Peter Tapsell (Louth and Horncastle) (Con)
May I put it to my right hon. Friend that, despite his great personal effort—on which I warmly congratulate him—to try to bring about a successful Geneva II conference on Syria, it is unlikely to make much real progress unless all sides are involved: not only Iran but the Alawites? I ask him to reflect on the success of the Geneva conference of 1954, which against all expectations put an end to the Indochina war, in which enormous casualties were suffered by France. Anthony Eden insisted, despite the strong opposition of John Foster Dulles, that all sides should be present. Why cannot my right hon. Friend do the same?
Mr Speaker
It was around that time that the right hon. Gentleman was personal assistant to the said Sir Anthony Eden. It is modesty only that prevents him from pointing out that fact to the House, but I have done so in his stead.
Mr Hague
There are certainly lessons to be learned from 1954—and, indeed, from other successful peace negotiations—and the process does require all sides to be ready to make the necessary compromises for peace. We would base a Geneva peace conference on the outcome of our talks in Geneva last year, with the aim of creating a transitional Government with full executive authority, made up of figures from the regime and from the opposition in Syria, by mutual consent. Of course it is envisaged that Alawites would be represented in any regime delegation to such a conference, as my right hon. Friend has suggested.
Mr Nigel Dodds (Belfast North) (DUP)
The Foreign Secretary has referred to the large amounts of aid given by the UK and the US to help the humanitarian refugee crisis in the middle east, but in a recent meeting the Jordanian interior Minister contrasted the amount committed by the UK and the US to the amount actually delivered on the ground. Will the right hon. Gentleman comment and clarify whether the money to help with the refugee crisis is getting through?
Mr Hague
The UK has a very strong record of delivering our assistance, and I am not aware of any dissatisfaction on the part of Jordan, although I will discuss these matters with His Majesty the King of Jordan tomorrow, so I will check whether there is any further assistance or more rapid delivery of it that we can provide to Jordan over the coming weeks.
Ian Lucas (Wrexham) (Lab)
We all agree that progress at the Geneva II talks is vital to stability in the region, but when I spoke to the Syrian National Coalition last week it told me that it had not yet decided whether to attend the talks. Will the Foreign Secretary tell us what efforts he is making to ensure that it is in the room for the vital discussions that are needed?
Mr Hague
The reason the Syrian National Coalition was here in London last week and why the hon. Gentleman was able to meet it was that it had come to meet me and 10 other Foreign Ministers to discuss going to the Geneva talks. That was the whole purpose of the day! The hon. Gentleman is right to point out that the full body of the national coalition has not yet taken the decision on that. It has to convene a general assembly to do so, and the date for it keeps shifting; it is now most likely to be towards the end of next week, around 9 November. It did receive a clear message from me and from many other Foreign Ministers, including Secretary Kerry and Prince Saud, the Foreign Minister of Saudi Arabia, that it should be prepared to go to Geneva and to take part in a peace conference.
Guto Bebb (Aberconwy) (Con)
9. What progress his Department has made on increasing UK exports to established and emerging markets.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
Between 2009 and 2012, UK exports increased by 23% in the wake of the deepest recession in post-war history. This growth has primarily been driven by demand in emerging markets. In South Korea, exports have risen by 103%; in China, excluding Hong Kong, by 80%; in Russia by 76% and in Brazil by 64%. Exports to the US increased by more than 8% between 2010 and 2012, although UK exports to the EU were flat.
Guto Bebb
I thank the Minister for his response. During the past decade, the value of bilateral trade between the UK and Israel has increased by over 60% to about £3.8 billion. It gives me particular pleasure to note that the trade between Wales and Israel with respect to life sciences is doing extremely well. As a result of these facts, will the Minister join me in welcoming this growth in trade between the UK and Israel—a country that is forward looking in its economic performance.
Mr Swire
We greatly welcome the flourishing of UK-Israel trade, which is the result of concerted efforts by the Government, including, as my hon. Friend said, the creation of the UK-Israel tech hub, which celebrated its second anniversary this month, and our burgeoning co-operation with Israel in respect of life sciences, which was cemented in an memorandum of understanding on science co-operation, signed by my right hon. Friend the Foreign Secretary during his recent visit to Israel in May.
Anas Sarwar (Glasgow Central) (Lab)
Half of Scotland’s trade is with the rest of the UK, and half of the UK’s trade is with the rest of Europe. Will the Minister outline the benefits Scotland gets from the wider exports that the UK does with the world and the economic benefits that that brings for my constituents and others in Scotland?
Mr Swire
Yes, with both pleasure and conviction. Scotland benefits from being part of the UK in this renaissance of trade that the UK is undergoing. I must point to a recent fabulous article in Le Monde, which said we can now predict sustainable future growth—gone are fears of repeated recessions and new injections of liquidity. The jobs market and consumer confidence are both improving—improving for the United Kingdom and improving for Scotland, as well as for England, Wales and Northern Ireland.
Mr John Redwood (Wokingham) (Con)
What conclusions does the Minister draw from the fact that exports from some countries outside the EU to the EU are increasing more rapidly than our own?
Mr Swire
My right hon. Friend will be aware of my earlier comment that trade with the EU has been adversely affected by the downturn in the EU economy. I think what it shows is the flexibility of the British economy, not least because we did not join the euro and because this Government have a more determined approach to driving exports globally, both with our existing partners and in emerging markets.
John Healey (Wentworth and Dearne) (Lab)
The British embassy in Washington part-sponsored a state-by-state study of jobs in the United States that are linked to exports and the potential gains from a comprehensive EU-US trade and investment deal. No such study has been carried out in relation to the United Kingdom. Will the Government commission a similar area-by-area analysis of British jobs, output and exports?
Mr Swire
The hon. Gentleman raises an interesting point. I shall certainly look into it, and I should be happy to discuss it with him in more detail. British trade with the United States remains incredibly important. I will not rehearse the statistics again, but we have been vulnerable to the rather changeable circumstances in the domestic UK economy of late.
Duncan Hames (Chippenham) (LD)
10. What assessment he has made of opportunities for the UK arising from recent ministerial delegations to China.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Recent visits by my right hon. Friends the Chancellor of the Exchequer, the Secretary of State for Energy and Climate Change and the Secretary of State for Transport highlighted the huge potential of the UK-China relationship. Their visits achieved significant breakthroughs in relation to civil nuclear co-operation, low-carbon partnerships, financial services, transport and inward investment.
Duncan Hames
I welcome that news, and, in particular, the jobs that the investment will bring. Perhaps most significant is the fact that Britain will be the first country outside China to have its own renminbi investment quota, which will establish London as a leading centre for renminbi trading. Does the Foreign Secretary agree that this success is founded on our open society and our long record of promoting open economies, and demonstrates to our partners in China that Britain is most certainly open for business?
Mr Hague
My hon. Friend is absolutely right. Britain is very much open for business, and it is in China’s interest to invest in it. According to official Chinese statistics, the United Kingdom is now the most popular destination in Europe for Chinese investment, and the fourth most popular globally. Last year, our own exports to China hit £1 billion a month for the first time.
Keith Vaz (Leicester East) (Lab)
Some of the ministerial delegations included British business men so that the case could be made for British business. How many of them were of Chinese origin?
Mr Hague
I do not have that information at my fingertips, but I imagine that quite a few of them were. I will write to the right hon. Gentleman with the details. What I can say is that we have built a tremendous relationship—in both directions—with China, founded on the activities of Chinese business men and British business people of Chinese origin, and we will continue to do so.
Jenny Chapman (Darlington) (Lab)
11. What recent discussions he has had with the Russian Government regarding violence against lesbian, gay, bisexual and transgender people in Russia.
The Minister for Europe (Mr David Lidington)
My right hon. Friends the Prime Minister and the Foreign Secretary discussed our concern about those attacks when they met their Russian opposite numbers last month.
Jenny Chapman
As the Minister knows, there is significant and growing concern in this country about violence in particular but also about the banning of certain publications, and about threats to remove children from LGBT couples. Will he consider raising the issue with the Council of Europe?
Mr Lidington
We will certainly consider raising, at every possible opportunity, our concern both about Russian legislation on the matter and about what is, inevitably, anecdotal evidence of appalling attacks on individual LGBT Russian citizens and civil society organisations.
Mr Peter Bone (Wellingborough) (Con)
Does the Minister agree that, while these attacks are quite outrageous—as is the fact that the Russian Government seem to be legislating towards such behaviour—it is better to engage with Russia than to boycott events if we are to bring about change?
Mr Lidington
I agree with my hon. Friend both about the importance of making our views clear and about the importance of engagement. Our diplomats who are stationed in Russia make a point of attending meetings of civil society organisations, including LGBT organisations, to demonstrate that we are standing up for the values in which we believe.
John Howell (Henley) (Con)
12. What recent reports his Department has received on child executions in Iran.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
We receive regular reports on the human rights situation in Iran, including information about executions. Executions for crimes committed by people under the age of 18 are a breach of international law, and the UK opposes the use of the death penalty as a matter of principle.
John Howell
According to leading human rights groups, Iran has the shameful record of being the world’s largest executioner of juvenile offenders. What representations can the Government make to ensure that that barbaric practice ends, in accordance with the country’s obligations under the convention on the rights of the child?
Hugh Robertson
My hon. Friend is absolutely right. This country has, under the EU sanctions regime, helped designate over 80 human rights violators in Iran, and, of course, helped establish the UN special rapporteur on Iran’s human rights and lobbied for his mandate to be renewed at the March UN human rights council.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Is the Minister aware of growing concern about the human and civil rights of Baha’is in Iran and, in particular, about the UN special rapporteur’s report? What action does he intend to take?
Hugh Robertson
I thank the hon. Lady for raising that point. I am absolutely aware of that concern, which is a key concern of the UN special rapporteur. As I said in answer to the previous question, our country lobbied extremely hard to ensure that the mandate was extended for a further year and will do so again in the future precisely so that these concerns can be addressed.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
13. What recent discussions he has had with the Colombian Government regarding human rights and peace talks in that country.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
The Prime Minister, Foreign Secretary and I met President Santos during his visit to London in June and discussed a range of subjects, including the peace process and its potential to improve respect for human rights. Officials from our embassy in Colombia regularly make representations to the Colombian Government on human rights cases.
Jim Sheridan
The Minister of State recently told the House he would make representations to the Colombian Government regarding the arrest of leading trade unionist Huber Ballesteros. Will the Minister update us on what progress has been made, including a possible visit to Mr Ballesteros in prison, and what does he think the future holds for trade unionists and others in terms of human rights in Colombia?
Mr Swire
As the hon. Gentleman knows, we are aware of the detention of Mr Ballesteros. He was detained on 25 August. Our ambassador to Colombia wrote to the Colombian prosecutor-general on 28 August highlighting our interest in the case and requesting information on the charges. Staff at our embassy in Bogota are seeking permission to visit Mr Ballesteros in prison.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) does much to champion the cause of Colombian trade unions, but does the Minister agree that it is more important to protect British citizens from the flow of illegal drugs from Colombia, and will he therefore tell the House what discussions he has had with the Colombian narcotics team about how to stop this flow of illegal and damaging drugs?
Mr Speaker
Order. I think not, actually. That is a very important matter, but it does not directly relate to human rights or peace talks. The Minister of State requires no encouragement, and on this occasion I do not wish to offer him any.
Ann McKechin (Glasgow North) (Lab)
14. When he plans to issue guidance to UK businesses through the overseas business risk register on trade with illegal settlements.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
We will update our online guidance for citizens and businesses on overseas markets, including Israel and the Occupied Palestinian Territories, in the coming weeks, in line with the UK action plan on business and human rights.
Ann McKechin
I thank the Minister for his reply, but may I ask him urgently to review the documentation on the UK Trade & Investment website’s “Doing Business in Israel” section, which, according to Oxfam, encourages British businesses to invest in settlements in the Jordan valley by giving details of Israeli grants available for settlements business?
Hugh Robertson
Yes, I will certainly look at the guidance the hon. Lady mentions. The UK Government’s policy on this is very clear: settlements are illegal and they are an obstacle to peace, but we work in concert with our EU partners in producing guidelines that affect this issue.
Mr Speaker
May I remind Members to ask pithy questions and Ministers to provide pithy answers, because there is a lot of interest and I am keen to accommodate Members?
Stephen Gilbert (St Austell and Newquay) (LD)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Today I am hosting the World Islamic Economic Forum. This is the first time it has ever been held outside an Islamic country and Asia, reflecting London’s growing position as a major centre for Islamic finance.
Stephen Gilbert
Prageeth Eknaligoda is a Sri Lankan political cartoonist who has disappeared. Both I and pupils at St Austell’s Penrice community college will be interested to learn what my right hon. Friend knows about his whereabouts and whether he will raise this matter with the Sri Lankan authorities.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
We regret that Mr Eknaligoda’s whereabouts are still not known more than three years after his disappearance. We have made clear to the Government of Sri Lanka the need to take decisive action to guarantee press freedom, including by investigating attacks on the media and disappearances and ensuring those responsible are brought to justice. The forthcoming Commonwealth Heads of Government meeting in Colombo will be our opportunity to shine a spotlight on this and other matters.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
Last week, I had the great privilege of meeting Aung San Suu Kyi, following her discussions with Government Ministers. She impressed upon me the urgency of the international community seeking to put pressure on the Burmese Government to reform the constitution in Burma. I would be grateful if the Foreign Secretary would set out what steps the Government anticipate taking to achieve that goal.
Mr Hague
Aung San Suu Kyi was very clear about these things in all the meetings she had, including the one with EU Foreign Ministers in Luxembourg last Monday. These are issues that we have taken up for some time with the Government in Burma, including directly with President Thein Sein on his visit to the UK earlier this year. Of course, we are continuing to raise them, as there is an urgency about constitutional change ahead of elections in Burma in 2015. So we will continue to raise them over the coming weeks directly with Burmese Ministers.
Roger Williams (Brecon and Radnorshire) (LD)
T3. We have heard today about the strength of the trade relationship between this country and Israel. Will the Government use the influence that that relationship brings to make progress on peace, particularly in relation to the settlements?
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
Yes, of course, we will. As I said in answer to an earlier question, there is now a moment of hope—or perhaps I should say opportunity—that has not been there for some years. I am visiting the region for the first time next week and will certainly do what the hon. Gentleman urges.
Wayne David (Caerphilly) (Lab)
T2. Which competences will the Government seek to repatriate from the European Union?
The Minister for Europe (Mr David Lidington)
What the Government have already shown in their three and a half years in office is that they have been able to bring powers back to this country: through the reform of the fisheries policy, which has abolished the practice of discarding that the hon. Gentleman’s Government tried and failed to reform in their 13 years in office; in getting a cut on the budget for the European Union; and in getting us out of the bail-out mechanism to which his Government committed us. That is a fine track record on which to look forward with high hopes for the future.
Rehman Chishti (Gillingham and Rainham) (Con)
T5. The UN envoy, Mr Brahimi, is in Syria today and he has said that President Assad can play a constructive role in the transition in Syria. The Friends of Syria group has said that President Assad can play no role in the transition, so what is the UK’s position on whether he can play any such role?
Mr Hague
It was agreed in Geneva last year that a transitional Government in Syria would have full executive authority, and that it would be formed from regime and opposition “by mutual consent”. That phrase is very important; I do not think anyone can envisage circumstances in which opposition groups in Syria would give their consent to President Assad being part of that transitional Government.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
T4. Rocket attacks on Israel from Gaza have resumed, and Hamas threatens to restart suicide attacks. Will the Minister condemn the statement from the leader of Hamas that the Palestinians should withdraw from peace talks and launch a third intifada? Does he believe that the Palestinian Authority are sufficiently strong and well motivated to resist that call?
Mr Hague
I believe that the Palestinian Authority are certainly well motivated—that is a good way to put it. I believe that President Abbas is a courageous man of peace, and he has taken many risks and overcome much opposition in order to get back into the peace process and into negotiations with Israel. I absolutely condemn any encouragement to him to do anything other than that, and Hamas for saying that that should cease. We want to see those negotiations continue over the coming weeks and bring success.
David Mowat (Warrington South) (Con)
T6. Much of the instability in various parts of the world is caused by volatile and high food prices, a driver of which is the conversion of agricultural land into biodiesel, a practice described by the United Nations last year as a crime against humanity. What discussions have the Government had with the EU to encourage it to drop its 6% target on sources which could and should be food?
Mr Lidington
My hon. Friend is right to identify this as an important issue. Our colleagues in the Department of Energy and Climate Change have the lead on it, and I will make sure that their attention is drawn to his comments. I assure him that they take the issue particularly seriously.
Mr Jim Cunningham (Coventry South) (Lab)
T8. What discussions is the Foreign Secretary having with European Governments, particularly the Italian Government, about the tragedy unfolding in the Mediterranean as a result of refugees drowning?
Mr Hague
Yes, we have already had discussions with the Italian Government. The Italian Foreign Minister, Emma Bonino, was here on Friday and that, of course, was one of the subjects we discussed. In addition, the Prime Minister has discussed it with his counterparts in the European Council. It is important that European countries work effectively together on this matter and, in particular, that we work to help Libya, for instance, to secure its land borders. The insecurity of those borders is causing a lot of the problem for the maritime borders of EU states.
Caroline Dinenage (Gosport) (Con)
Many of my constituents are concerned about human rights abuses not just in the north of Sri Lanka but in the east. They are also concerned that the visit by the Commonwealth Heads will somehow legitimise that desperate reality. Will the Secretary of State undertake to leave the Sri Lankan authorities in absolutely no doubt that that is not the case?
Mr Hague
Yes, absolutely. My hon. Friend is quite right. The authorities are in no doubt about our position as things stand, as I explained to the House earlier. They will be left in no doubt by me, the Prime Minister and the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), on our visit to the Commonwealth Heads of Government meeting.
Graeme Morrice (Livingston) (Lab)
What assessment has the Secretary of State made of an independent Scotland’s place in Europe and the world compared with the advantage that Scotland derives from being part of a strong United Kingdom?
Mr Hague
Scotland derives enormous benefit, of course, from being part of the United Kingdom and the United Kingdom benefits enormously from Scotland’s being part of it. It is important to understand that if Scotland left the United Kingdom, it would also be leaving the organisations of which the United Kingdom is a member, including the European Union.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
T9. I thank the Minister for his answer to my earlier question. May I now encourage him to congratulate not just this House on issuing a yellow card to the Commission’s proposal for a European public prosecutor but the Parliaments of France, Hungary, Ireland, the Netherlands, the Czech Republic, Sweden, Romania, Slovenia and Cyprus? Does that not show the value of national Parliament’s power to tell the Commission to stop interfering and is there not a case to go—
Mr Speaker
Order. I think that the hon. Gentleman should seek an Adjournment debate—but it might take him some weeks to get it.
Mr Lidington
My hon. Friend is right to draw attention to the fact that the deployment of the yellow card as regards the European public prosecutor’s office is the second time that the number of national Parliaments submitting reasoned opinions has passed the threshold set by the treaty that forces the Commission to reconsider its original proposal. I wish all strength to the arm of national Parliaments in continuing to use those powers to the full.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
I am sure that this House has every confidence in the Foreign Secretary to represent the Government at CHOGM and the Prime Minister should clearly make a gesture and stay away. When he is making representations, will the Foreign Secretary seek the signature of the Sri Lankan Government to the declaration of commitment to end sexual violence in conflict?
Mr Hague
I seek that all over the world. It is my declaration, which I proposed at the margins of the UN General Assembly, and I am pleased that, by the middle of this month, 134 countries had signed it. Sri Lanka is exactly the sort of country we want to add its signature to it, so I will press the Government hard on that subject at the margins of CHOGM.
Mr David Heath (Somerton and Frome) (LD)
Is a judicial system that encompasses stoning for adultery, severance of limbs for theft and flogging for alcohol consumption compatible with membership of the Commonwealth and is it something that the Foreign Secretary intends to raise with the sultanate of Brunei at CHOGM?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Have Ministers considered using the large number of influential Russians who live in London in their efforts to persuade the Russian Government to take a more liberal line on human rights?
Mr Lidington
We are prepared to consider all appropriate opportunities to ensure that we influence the Russian authorities for the better on human rights. I would not rule out the hon. Gentleman’s suggestion, although it depends a little on which individual we are talking about.
Karen Lumley (Redditch) (Con)
Democratic elections in the Maldives were suspended nearly two months ago. What are the Government doing to make sure that these elections take place?
Mr Hague
It is very important that these elections are now allowed to take place. The legal actions that have been taken to try to stop the elections and to stop the second round going ahead after a successful and well-regarded first round of elections have increasingly looked just like attempts to disrupt the elections and to prevent the people of the Maldives from being able to have their democratic say. The strong statement that I issued on this on 19 October has, I think, been noticed in the Maldives. We hope the authorities there will now allow an election to go ahead that will be able to determine freely and democratically the presidency of the Maldives.
Valerie Vaz (Walsall South) (Lab)
What representations has the Foreign Secretary made to the Burmese Government on the recent violence in Kachin state, which makes constitutional reform that much more urgent?
Mr Hague
Again, this is one of the subjects that we discuss regularly with the Burmese Government and, indeed, that we discussed with Aung San Suu Kyi on her visit last week. Progress has been made, of course, in bringing ceasefires into effect in ethnic conflicts, but the conflict in Kachin state has been the most serious in recent times so it is always very high on the agenda for our discussions with Burmese Ministers.
Mark Pawsey (Rugby) (Con)
Small businesses produce the kind of niche products that are well received in export markets, but they often lack the expertise and confidence to sell abroad. What steps is the Department taking to assist and encourage smaller businesses in particular?
Mr Swire
I think I am right in saying that since the formation of this coalition Government, we have had a net gain of more than 400,000 small businesses, which is a tremendous success. My hon. Friend is correct. We need to do more to encourage small businesses to export. It is incumbent on all of us in the House to encourage our local businesses to raise their game. With respect to UK Trade & Investment, the reconfiguration of the British chambers of commerce initiative is designed to help small businesses, but each of us has a part to play in making sure that our small and medium-sized enterprises grow into large export businesses, which are so important for the economy.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Barclays bank made the decision to end banking facilities for money transfer companies such as Dahabshiil and that decision will devastate countries such as Somalia. Will the Foreign Secretary take this opportunity to speak up and explain what he will do to try to prevent the closure of this legitimate route of money transfer to a country that depends on it for its security and to achieve transformation there?
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
I am grateful for the hon. Lady’s question. She is right to make the point that remittances are extremely important, particularly as they relate to Somalia. But most Somali remittances are made through small scale businesses that operate in cash and do not have bank accounts. They will therefore be unaffected by a commercial decision by Barclays bank. However, the Government are taking the decision seriously. The Treasury, which is leading on this matter, the Department for International Development and the Foreign and Commonwealth Office are working to find a solution, and DFID is developing a pilot project to help secure international remittance channels.
Paul Maynard (Blackpool North and Cleveleys) (Con)
Everyone will have been appalled by the tragedy which occurred off Lampedusa recently. Many of those who died were Eritreans fleeing one of the most repressive states in Africa. What steps are the Government taking to try to improve governance in Eritrea to reduce the push factor?
Mark Simmonds
My hon. Friend is right to raise this important issue, but it is not solely an Eritrean problem, although he is right to point out that Eritrea continues to violate its international obligations and domestic law and has taken no steps to improve its human rights record. It also needs to be said that poor governance, corruption and a lack of economic development are fundamental drivers for the sort of migration that we saw and the terrible tragedies. I can assure my hon. Friend that we in the Foreign Office will continue to work to try to improve all those aspects to limit the necessity for migration.
Paul Goggins (Wythenshawe and Sale East) (Lab)
Will the Foreign Secretary update the House on the work of the chemical weapons inspectors in Syria, and will he say when he expects the destruction of precursor chemicals to begin?
Mr Hague
This work is going reasonably well so far. The Organisation for the Prohibition of Chemical Weapons staff have had access to 21 of 23 sites that have been identified. The actual destruction of munitions and of production equipment for chemical munitions has been taking place. Based on the submission made by the Syrian regime on 27 October—just a couple of days ago—decisions now need to be made about the resources needed and the timetable for the destruction of all chemical stocks, including precursors. That programme will be put together by the middle of November.
Licensed Hackney Carriages and Private Hire Vehicles (Closed Circuit Television)
Richard Fuller (Bedford) (Con)
I beg to move,
That leave be given to bring in a Bill to require the installation of closed circuit television in licensed hackney carriages and private hire vehicles; to establish a minimum standard for such installations; and for connected purposes.
Like many right hon. and hon. Members on both sides of the House, I am sceptical about the value of the pervasiveness of CCTV in our lives and in our communities, but I wish to explain to the House why I believe that its provision in private hire vehicles and taxis is warranted and justified. For too long our private hire and taxi drivers have been treated like second-class citizens. Indeed, they are an overlooked community when it comes to personal safety. Yet they are an essential part of our public transport system, for in many towns across the country, who is going to take people home in the evenings? It will be a private hire cab or a licensed taxi. However, the safety provided in those circumstances is below that provided in other forms of public transport. It is the most trusting of circumstances: one, two or three people in a single vehicle late at night, with nothing to provide any evidence if a crime is committed.
The types of crime that are committed run the gamut, from theft to racial abuse and assault. Many of our taxi drivers are drawn from ethnic minorities. Racial abuse, wherever it happens, is unacceptable. In Doncaster, taxi drivers requested that the local council bring in CCTV because they were concerned about the incidence of racial abuse. They noted a significant decline in racial abuse following the introduction of CCTV. Theft is almost thought of as a cost of doing business. We should consider what it must be like for a taxi driver when two or three people they have driven home simply refuse to pay. What evidence does the driver have that a crime has been committed? What power does he or she have to stop those people perpetrating that crime? There is little ability to stop the crime and little evidence that it has happened. The number of assaults that occur in disputes between drivers and passengers is horrifying, and occasionally they lead to murder.
Having CCTV in taxis is about providing safety not only for drivers but for passengers, because there are sometimes instances of passengers attacking each other in the back of taxis. In my conversations with the Metropolitan police, I was interested to hear that they regard the provision of CCTV in taxis and private hire vehicles as helpful in cases of sexual assault or rape that occur after people have been taken by taxi to a place of residence.
Those are some general examples, but I have been moved to seek to bring in this Bill by specific examples in my constituency. A year ago one of my constituents, Mehar Dhariwal, was murdered. His murder brought into sharp relief the dangers that men and women in our taxis can be under when they are put in situations of risk. I met his widow, Mrs Dhariwal, last weekend. Although her loss can never be made up for, her encouragement to me was to say, “Richard, it’s important that we bring in this measure so that other people do not have to go through the suffering that I and my family have gone through.”
The dangers faced by taxi drivers were also brought into sharp relief when a friend of mine who works for 24-7 Cars was held at knife point between Bedford and Luton. He managed to escape only because he was smart enough to realise that there was a police car parked at a petrol station he was approaching. He rolled out of the taxi, sustaining injuries, and the taxi came to a halt. The two perpetrators of the crime got out and were chased by two police officers. One of those idiots threw a knife at the police officers and the other turned a gun on them, but the officers bravely dodged the knife and one of them knocked the gun away. I am pleased to say that our chief constable was prepared to take all necessary measures to ensure that those criminals faced the full force of justice.
This Bill proposes to provide for secure and encrypted CCTV in taxi cabs. It is important from the point of view of privacy that the information is secure and encrypted. It should also be accessible by the police only in circumstances in which a crime is reported to have been committed. The system should be mandatory, because then the citizen would know that it was being used when they got into a taxi cab. If the take-up were voluntary rather than mandatory, people would not know exactly what type of safety provision was in use. Councils around the country have seen the value of introducing a mandatory system over a voluntary one.
There is a question about whether CCTV should provide just video coverage or audio coverage as well. This issue was subject to an Information Commissioner review involving Southampton council earlier this year. The consequence was not to ban audio recording outright, but to say that it could be provided only in a panic situation—a short burst of audio at the particular point when a driver felt a crime was being committed. I believe that that is the correct approach.
There are also issues with costs. The last thing I would wish as a result of this Bill is to place additional costs on drivers. We do not ask bus drivers to pay for the CCTV that protects them, and nor should we ask taxi drivers to pay for their own personal safety while they ply their trade. Southampton has built on its work with the Information Commissioner and has a very good approach to covering costs: the council covers the cost of the camera and the taxi drivers are responsible for the maintenance and installation of the system. That also allows the driver to recoup their costs through insurance reductions, because CCTV is able to look outside as well as inside the vehicle and can therefore be used as evidence in claims when crashes or whiplash are caused. In such circumstances, I believe that the costs that would fall on the drivers would be negligible at best.
This Bill seeks to provide a level of security for our taxi drivers that is long overdue. Workers in other high-risk transport situations already benefit from it and I believe it would have a significant impact. A US study recently compared the effect of measures such as CCTV and barriers between the driver and passengers. It found that only one method contributed to a significant reduction in crimes against drivers, and that was CCTV.
This Bill has many benefits, but to my mind the most important is that it will start to give respect to our taxi drivers and stop people treating them as second-class citizens.
Question put and agreed to.
Ordered,
That Richard Fuller, Meg Hillier, Mr Adam Holloway, Siobhain McDonagh, Stephen McPartland and Priti Patel present the Bill.
Richard Fuller accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 8 November, and to be printed (Bill 121).
Point of Order
Frank Dobson (Holborn and St Pancras) (Lab)
On a point of order, Mr Speaker. Has the Secretary of State for Transport indicated that he intends to make a statement to the House on the fourth revised version of the justification for High Speed 2? I heard him say on the television this morning that the £50 billion was perfectly justified and that he was producing a report for Parliament. However, as far as I can make out, there has been no report to Parliament.
Mr Speaker
I have received no indication that the Secretary of State intends to make a statement to the House on that matter. However, the House will be treating of these issues on Thursday. I expect that a significant number of Members will wish to contribute to that debate and I fancy that the right hon. Gentleman might be among them.
Mr Speaker
I am not sure that there is anything further, but the right hon. Gentleman is an immensely senior Member and I must give him the benefit of the doubt.
Frank Dobson
The proceedings on Report are likely to be fairly specific to the amendments that are tabled, whereas what needs to be discussed is the new financial justification for the scheme. I suspect that it will be rather difficult to discuss that and to remain in order on Thursday.
Mr Speaker
I note the point that the right hon. Gentleman makes. I am advised that there is a written ministerial statement, although I readily recognise that that will not satisfy him because it does not afford an opportunity for oral questioning. I have got the point that he wishes to hear a spoken justification from a Minister, however senior, and to have the opportunity to question them on the matter. If the right hon. Gentleman is in his place and seeks to catch my eye, he might find favour. I hope that that satisfies him for now.
Pensions Bill (Programme) (No. 2)
Ordered,
That the Order of 17 June 2013 (Pensions Bill (Programme)) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration shall be taken in the order shown in the first column of the following Table.
(3) The proceedings shall (so far as not previously concluded) be brought to a conclusion at today’s sitting at the times specified in the second column of the Table.
Table
Proceedings | Time for conclusion of proceedings |
New clauses and new Schedules relating to, and amendments to, Part 4. | 4.30 pm |
New clauses and new Schedules relating to state pension credit; New clauses and new Schedules relating to, and amendments to, Part 1; new clauses and new Schedules relating to, and amendments to, Part 2; new clauses and new Schedules relating to, and amendments to, Part 3; remaining proceedings on Consideration. | 6.00 pm |
Pensions Bill
(11 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
16:28 - The House having divided: - Ayes: 232 / Noes: 294 - Question accordingly negatived.
16:47 - The House divided: - Ayes: 218 / Noes: 305 - Question accordingly negatived.
18:00 - The House divided: - Ayes: 231 / Noes: 295 - Question accordingly negatived.
18:14 - The House divided: - Ayes: 230 / Noes: 290 - Question accordingly negatived.
The Minister of State, Department for Work and Pensions (Steve Webb)
I beg to move, That the clause be read a Second time.
Mr Speaker
With this it will be convenient to discuss the following:
Amendment (a) to Government new clause 1, line 6 at end add—
‘(2) In this section—
(a) “charges”; and
(b) “transaction costs”
shall be defined in regulations by the Secretary of State.
(3) Before making regulations under subsection (2), the Secretary of State must undertake a public consultation, which must include the views of—
(a) the Financial Conduct Authority; and
(b) the Pensions Regulator.
(4) With reference to paragraph (2)(a), any public consultation must consider the different elements which comprise charges and not just the annual management charge.
(5) Such charges, together with any transaction costs incurred by the funds in which qualifying schemes are invested, shall be declared on an annual basis to the Pensions Regulator, which shall maintain a public register thereof.
(6) The Secretary of State shall by regulations set the standards by which pension schemes must declare charges and transaction costs for the purposes of the register and for declaration to their members and their members’ employers.
(7) The standards set out in regulations under subsection (6) shall be reviewed every three years.
(8) The Secretary of State shall have power to make regulations ordering other disclosure arrangements on administration charges.
(9) Regulations under this section may not be made unless a draft has been laid before and approved by resolution of both Houses of Parliament.’.
New clause 7—Railways pension scheme—
‘(1) The Railways Act 1993 is amended as follows.
(2) In Schedule 11 (Pensions), after paragraph 11 there is inserted—
“Employers insolvency
11A (1) This paragraph applies if an insolvency event occurs in relation to the employer or former employer of a protected person.
(2) Where this paragraph applies the Secretary of State shall become liable to discharge any liabilities in respect of relevant pension rights, to the extent that they are not discharged by the trustees of a new scheme in which the employer was a participating employer.
(3) For the purposes of this paragraph—
(a) “insolvency event” has the meaning set out in section 121 of the Pensions Act 2004;
(b) “relevant pension rights” means the relevant pension rights referred to in paragraph 6(3) above.
11B The duty referred to in paragraph 11A also applies if an insolvency event has occurred in relation to the employer or former employer of a protected person on or after 1 October 1994.”.’.
New clause 9—Fiduciary duty of independent trustees—
‘(1) The Secretary of State may by regulations—
(a) require any pension scheme, which is not already overseen by independent trustees, to appoint a board of independent trustees; and
(b) set out the powers and duties of a board appointed under paragraph (1)(a).
(2) Regulations under this section—
(a) shall be made by statutory instrument; and
(b) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.
(3) The board of independent trustees shall have a fiduciary duty towards members of the scheme overseen by them.
(4) The fiduciary duty set out in subsection (3) shall take precedence over any duty to—
(a) the shareholders in, or
(b) other owners of,
the operators of the scheme.
(5) In relation to any matters of member interest, decisions of the board of independent trustees shall be binding on the board of directors or other analogous management board of any undertaking operating a pension scheme.’.
New clause 10—Promotion of good value in scheme size—
‘(1) The fiduciary duty of pension scheme trustees shall include a duty to consider whether the scheme has sufficient scale to deliver good value for members.
(2) Where trustees take the view that the scheme has insufficient scale, they must consider whether merger with another scheme would be in the members’ interests.
(3) The Pensions Regulator shall have power to direct merger of pensions schemes where it would be in the interests of the members of each of the relevant schemes for merger to take place.
(4) The Pensions Regulator shall exercise this power in accordance with a methodology on which it has publicly consulted and which has been agreed with the Secretary of State.
(5) The methodology set out in subsection (4) shall be kept under regular review and revised when necessary, subject to further consultation and agreement from the Secretary of State.’.
New clause 11—Decumulation—
‘(1) Any qualifying money purchase scheme must direct its savers to an independent annuity brokerage service or offer such a brokerage service itself.
(2) Pension schemes shall ensure that any brokerage service selected or provided meets best practice in terms of providing members with—
(a) an assisted path through the annuity process;
(b) ensuring access to most annuity providers; and
(c) minimising costs.
(3) The standards meeting best practice on decumulation shall be defined by the Pensions Regulator after public consultation.
(4) The standards set out in subsection (3) shall be reviewed every three years and, if required, updated.’.
New clause 12—Sustainability of private pensions: review of implications of climate change and natural resource constraints—
‘(1) The Secretary of State shall commission an independent review of the implications of climate change and natural resource constraints for the sustainability of private pensions.
(2) In particular, the review must consider the implications for long-term investment outcomes for members of work-based pension schemes of potential—
(a) systemic risks posed by high levels of exposure to fossil fuels and other carbon-intensive assets;
(b) economic and physical impacts of climate change under various climate mitigation scenarios; and
(c) constraints on the availability of non-renewable resources.
(3) In subsection (2)(c), “non-renewable resources” includes food, water, land and energy resources.
(4) A report of the review’s findings, including recommendations to government, must be laid before Parliament no later than 30 October 2014.
(5) The government must lay before Parliament its response to the review’s recommendations no later than 30 January 2015.’.
Government new schedule 1—‘Work-based schemes: power to restrict charges or impose requirements.
Amendment 38, in clause 29, page 15, line 24, leave out from ‘scheme’ to end of line.
Government amendments 5 to 10.
Amendment 53, in clause 34, page 18, line 22, at end insert—
‘(5) Regulations under this section shall not exempt entire classes of business or businesses, such as small and medium-sized businesses, from automatic enrolment.’.
Government amendment 11.
Amendment 54, in clause 42, page 23, line 7, at end add—
‘“(czb) to promote, and to improve understanding of long-term and sustainable investment amongst work-based pension schemes,”.’.
Amendment 39, in schedule 16, page 84, line 37, leave out from ‘of’ to ‘transfer’ in line 1 on page 85, and insert
‘a transferable benefits scheme, the cash equivalent of the transferable benefits—
‘(a) is transferred to a nominated’.
Amendment 40, page 85, line 3, leave out ‘automatic transfer’ and insert ‘transferable benefits’.
Amendment 41, page 85, line 8, leave out from ‘an’ to end of line 9, and insert
‘a transferable benefits scheme, means a member of the scheme who is no longer having contributions made to their benefits.’.
Amendment 42, page 85, line 22, leave out sub-paragraph (5) and insert—
‘(5) In this Schedule “nominated transfer scheme” means—
(a) a work-based pension scheme which is registered under Chapter 2 of Part 4 of the Finance Act 2004 and is a money purchase scheme;
(b) a scheme in which the qualifying member is a member, or that has been nominated by the member or the transferable benefits scheme for the purposes of transferring pots;
(c) a pension scheme which meets quality standards as set out by the Secretary of State;
(d) a pension scheme that meets any other requirements set out in regulations.’.
Amendment 43, page 85, line 38, leave out from beginning to end of line 29 on page 87, and insert—
‘Transferable benefits scheme to transfer to nominated transfer scheme
2 (1) The regulations must require the trustees or managers of a transferable benefits scheme to establish an agreement with a nominated transfer scheme to make provision—
(a) for the transfer of qualifying members’ benefits to the nominated transfer scheme; and
(b) describing how and when steps are to be taken in order to effect the transfer.
(2) The regulations may make provision for a protocol through which a transferable benefits scheme may establish an agreement with a nominated transfer scheme.
(3) The regulations must ensure that where the duty to transfer qualifying members’ benefits to a nominated transfer scheme, has arisen, the member may opt out of the transfer or identify an alternative nominated transfer scheme to which the members’ benefits will be transferred.’.
Amendment 44, page 88, line 25, at end insert—
‘Nominated transfer schemes: quality requirements and administration charges
10A (1) The regulations may impose requirements that must be satisfied by any nominated transfer scheme.
(2) The requirements may in particular relate to—
(a) the governance of the scheme;
(b) the administration of the scheme; and
(c) the certification of the scheme by the Regulator.
(3) The regulations may make provision limiting or prohibiting any administration charge that may otherwise be imposed on a member of an automatic transfer scheme.
(4) Regulations made because of sub-paragraph (3)—
(a) may make provision for the manner of, and criteria for, determining whether an administration charge exceeds any limit or is prohibited; and
(b) may provide for the determination to be made in accordance with guidance issued from time to time by the Secretary of State.
(5) The requirements that may be imposed, and the charges that may be limited or prohibited, because of this paragraph need not relate to things done under the regulations.’.
Amendment 45, page 88, line 27, leave out paragraphs 11 and 12.
Government amendment 28.
Amendment 55, page 88, line 38, at end insert—
‘(c) the ability of the scheme to generate sustainable investment returns.’.
Amendment 46, page 89, line 39, leave out ‘an automatic’ and insert ‘a nominated’.
Amendment 47, page 90, line 1, leave out ‘current’.
Amendment 48, page 90, line 2, after ‘member’, insert ‘in a nominated transfer scheme’.
Amendment 49, page 90, line 3, leave out sub-paragraph (2).
Government amendment 29.
Amendment 50, page 91, leave out line 11.
Amendment 51, page 91, line 21, at end insert
‘“nominated transfer scheme” has the meaning given by sub-paragraph 1(5);’.
Amendment 52, page 91, leave out lines 36 and 37.
Government amendments 30, 31 and 12.
Steve Webb
This group of amendments contains a long list of disparate topics. To give the House a feel for what we are discussing, it includes an attempt to limit the scope of automatic enrolment, the transfer of small pension pots, short service refunds, the vexed issue of pension scheme charges, issues with governance and administration, the decumulation of pension pots, the specific issue of rail pensions and the pension protection fund compensation cap. I shall do my best to whizz through all those issues to minimise or obviate as far as is possible the need for me to return to the Dispatch Box on this group.
I should start on a note of consensus. This part of the Bill deals with private pensions and I think that the House would agree that the process of automatic enrolment into workplace pensions is going exceptionally well. The process started a year ago. British industry has automatically enrolled about 1.7 million employees into workplace pensions. The rate of not opting out, or of staying in, has been far better than anybody predicted. Our survey evidence suggests that of the order of nine in 10 workers have chosen to remain in their workplace pensions. That is something that we should all welcome.
The Bill is designed to improve that situation further and to deal with some unfinished business. Although the principle of automatic enrolment was legislated for in the previous Parliament, many issues were not dealt with. If those are not dealt with, it will undermine the success of automatic enrolment.
Amendment 53 relates to the scope of automatic enrolment. Clause 34 gives the Government the power to exclude some people from the employer duty for automatic enrolment. I will give the House a flavour of the sorts of people that we might be talking about. In automatic enrolment, we have sought to strike a balance between setting out the rules at the start and giving employers and the industry certainty, and learning and listening and then changing the rules when we have got something wrong or when something needs to be refined or streamlined. We could have changed the rules and constantly tweaked things, or we could have said at the start, “These are the rules for the next five or six years until everybody’s in. Go and deal with it”, but we tried to strike a balance.
As we have learned, the rules require employers to put a certain set of people into workplace pensions who may immediately opt out. For example, people with what is called enhanced or fixed tax protection status—high net wealth individuals—could face a tax surcharge if their pension pot exceeds the lifetime allowance. In general, such individuals will want to opt straight back out of the scheme, and their employers have said, “Why are you making us put these people into pension schemes? We all know they are going to opt out, and indeed they will be cross with us if they fail to opt out and later face a tax penalty.” At the moment, the Government do not have the power to enable firms not to enrol those people, so clause 34 provides the power to exempt them from enrolment.
The second example concerns those who have already given notice. Someone may have given a month’s notice, but in the middle of that period the Government require the employer to put them in a pension scheme. As Members will understand, that is silly, because that person will probably opt out immediately. In any case, asking firms to enrol people who have already given notice does not do much for our relations with the CBI. Those are examples of where we have given employers a comprehensive, rigid legal duty that creates perverse outcomes. Clause 34 therefore allows employers to exempt certain categories of workers, and I have mentioned the sorts of examples it would cover.
Amendment 53 says, “That’s all very well, but we don’t want you using the power to exempt categories of business such as small and medium-sized firms.” Leaving aside the fact that the amendment does not define an SME and it is not clear who would be covered, and that any amendment with “such as” suggests it is a bit vague to begin with, in responding to the spirit of the amendment I assure the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and the House that the Government have no intention of using the power to exclude small and medium-sixed firms. That is not what this is about.
Amendment 53 is otiose, because if we were the evil Government that the hon. Gentleman thinks we are and wanted to exclude small and medium-sized firms, we could do that anyway. The staging schedule is set in statutory instrument, subject to negative procedure. Therefore, if we wanted to exclude Britain’s small firms, we would have only to produce a statutory instrument that would say that small firms will be required to stage in 2099. That would not even be subject to a vote in the House. If the amendment seeks to stop the Government doing something that, in any case, we do not want to do, it would not work; we could still do it even if the amendment were successful. I hope I have reassured the House that amendment 53 is unnecessary, because we do not plan to do such a thing. Secondly, the amendment is not well drafted because it is not clear who it means. Thirdly, even if passed, it would not achieve the desired objective. An unnecessary, poorly drafted amendment that does not work should probably not be approved by the House.
Amendments 38 to 52 concern what happens to small pension pots—an issue that was not addressed when the original legislation for automatic enrolment was drawn up. People change jobs perhaps 10 or 11 times in their working life, and they leave behind small pension pots. From the Australian experience, we know that can mean lots of people losing track of their pension pots and not engaging with pension saving because they have large numbers of small, silly pension pots all over the place.
Australia is often mentioned as having one of the world’s best pension systems, and the Australians say that the one thing they wish they had addressed at the start was small dormant pension pots. The Australian Government have been going at this for longer than we have, and they estimate that they have 5 million lost pension accounts containing 20 billion Australian dollars. It is a serious issue. Clause 29 in schedule 16 sets out the Government’s response to the issue, which is what we call pot follows member. When someone moves from an auto-enrolment defined contribution pot to another one, their pot—as long as it is below a £10,000 threshold—automatically follows them unless they opt for that not to be the case.
Interestingly, Nick Sherry, former Australian superannuation Minister and highly regarded in the field, said of pot follows member:
“It’s the only practical way. It’s better off”—
because the money is in the worker’s last account—
“which is why I think it’s the only practical solution”.
We are delighted to have Nick Sherry’s support for our approach, as well as that of the Association of British Insurers. In the briefing sent to hon. Members the ABI welcomes the fact that the Bill includes provisions for the automatic transfer of small pension pots, which will lead to greater engagement and help people make savings decisions that are right for them and should lead to greater income in retirement. That is a welcome level of support for the proposition.
The Opposition amendments suggest a different route and would mean that when someone changes job, the dormant pension pot is automatically transferred to a third-party pension scheme called an aggregator. As I understand it, there would not be just one aggregator but multiple aggregators, and I have multiple concerns about that. First, such a policy would clearly lead to greater fragmentation of pension saving—it must do. Let us imagine the simplest example in which someone moves from firm A to firm B, and works only for two firms in their working life. In our model, the small dormant pension pot follows them from firm A to firm B—or scheme A to scheme B—and they end up with a single pension pot. In the model suggested by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, the dormant pension pot gets shunted off to some third-party provider with whom the employee has never engaged. They therefore have a pot with the current employer and with the third-party provider.
We are trying not just to hoover up small pension pots but to get people engaged in pension saving. The problem with someone shunting their money off to a third-party provider, perhaps one they did not choose—there is not much detail in the hon. Gentleman’s model, but I do not think it involves a person choosing a third-party provider, although perhaps it does—is that they get a letter from a pension company they have never heard of saying, “Guess what, we’ve got your dormant pension pot.” It is not exactly a ransom note, but it might be the first that someone knows about it, and that will not lead them to becoming engaged.
Under our model, someone’s pension savings are with their current employer. That is what they are interested in and where workplace pension engagement takes place. We therefore believe that our model provides better consolidation of pension saving and better engagement. Our model also saves on the cost of running pension schemes, compared with the model set out in the amendments. With a pot size limit of £10,000—obviously our published research relates to the £2,000 pot size limit on the aggregator model—which is the same across the two systems, we still estimate that the aggregate approach will achieve only half the cumulative administrative savings by 2050 of our pot follows member system. While aggregators are worth a look—we considered that option—it is clear that pot follows member is the best solution.
There is an issue of what happens if money is automatically transferred from a “good” scheme to a “bad” scheme, and I accept that point. That is why we are regulating for scheme quality. It should not just be a worry that someone’s small pension pot gets auto-transferred to a bad scheme; it should be a worry that an entire work force have been auto-enrolled into a bad scheme. We should not have bad schemes and must deal with that. That is why we are tackling pension scheme quality, which includes a range of issues such as governance, investment, costs and charges. In a few moments I will have news for my hon. Friends and the House about what action we are taking on charges. For those reasons, we are not convinced by the multiple aggregator model, as it is catchily known. We believe that the someone changing job and their money following them is a simple, attractive notion that I commend to the House. I therefore ask the House to reject amendments 38 to 52.
Amendments 5 to 10 are largely technical and deal with short service refunds. There is a category of money purchase pension schemes through which someone who has worked for a firm for under two years can have their money back when they leave. That is not in the spirit of what we are trying to achieve through our pension reforms. We want people, even those who put in relatively small amounts of pension savings, to accumulate that, build up what I call a big fat pot, and have a decent retirement. Short service refunds fly in the face of the view that even modest pension savings are worth having, and we therefore propose to eliminate them. The danger with the current legislation is that although someone joined to a pension scheme through a contract has 30 days to opt out, under the Bill they would be in the scheme on day one, and a day’s or month’s worth of pension contribution would be lodged. On purely pragmatic grounds we took that view that we ought to apply the same 30-day rule to short service refunds. Clause 32 abolishes short service refunds, and technical amendments 5 to 10 deliver a 30-day breathing space so that someone who is a member of a scheme for fewer than 30 days can receive a refund of what are essentially nominal contributions. I hope that amendments 5 to 10 will be welcomed across the House.
David Mowat (Warrington South) (Con)
I thank the Minister very much for the announcement that he will consider a 0.75% cap in the consultation. Will he ensure that, in the consultation, there is clarity about what the 0.75% includes? As he is aware, there are an awful lot of different interpretations of costs by different people. That is part of the problem.
Steve Webb
My hon. Friend is right. The consultation document discusses what should be included in the charge cap. My instinct is to prefer a comprehensive definition of charges. Clearly, we do not want to cap annual management charges and find out that the industry has cunningly managed to get its money back by some other route or a disguised charge. We therefore discuss what should be included.
My instinct is to go for a broad measure. There is an issue with transaction costs—we clearly want to know about them. Including transaction costs in the cap could lead to a slightly odd situation. Towards the end of the financial year, the fund and the trustees might believe that conducting a transaction is the right thing to do for the benefit of the pension fund. However, they might be unable to do that because the transaction costs would take them over the annual limit. We would be grateful for feedback on that and need to address those issues. One reason why we are having a consultation rather than laying down a definite answer is that we want insight on the fine detail, as my hon. Friend says. The basic principle is that we are looking at ensuring that 99p-plus of every £1 put into a pension goes into a pension. I am grateful for his comments.
I should add that there has been a suite of activity on charges. To remind the House, we announced a ban on consultancy charges earlier in the year. Government new schedule 1 and Government new clause 1 give us the power to put a set of powers to cap and regulate charges and quality all in one place. That includes automatic enrolment schemes, qualifying schemes and closed schemes. Lots of people have lots of money tied up in closed schemes. Without those measures, we would not necessarily have the powers we need to regulate the charges they pay. In some ways, the charges that people in closed schemes are paying—they are often old, high-charge schemes—are worrying, because people are often not engaged with their pension saving in a closed pension scheme.
Prompted by the OFT and working with the ABI, we are looking at legacy schemes—schemes introduced before 2001. The average charges in legacy schemes are 26% higher than charges in schemes sold after 2001. This is a full-frontal assault on pension scheme charges. We have banned consultancy charges; we are taking powers in the Bill to go further for auto-enrolment schemes; and we are looking at legacy schemes, charges and charge caps. We are taking effective action on issues that previous Governments have only dabbled with. That is why I urge my hon. Friends to support our new clause and our other proposals. They deliver, whereas the Opposition’s proposals mess about around the edges.
On governance and administration—in the context of new clauses 9, 10, 11 and 12, and amendments 54 and 55—quality in pension saving is not only about charges. How well schemes are governed and administered is important. Interesting issues are raised by the Opposition’s proposals—obviously, they are flawed, but I acknowledge that they raise important issues. New clause 9 would impose a trust-based structure for all pension schemes, with independent trustees across the board. But interestingly, the Office of Fair Trading’s project leader on the workplace pensions report that has just been published was recently quoted as saying that although trusts feel like an intuitively better way of looking after people’s pensions, that
“is largely dependent on the quality of the trustees.”
Given the many pension schemes we have at the moment, including many defined-benefit schemes, a requirement for every scheme to have a particular sort of trustee could be a real challenge, especially for smaller DB schemes.
Some of the Opposition’s suggestions may not be in the interests of members of schemes. I think the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East was at the recent conference of the National Association of Pension Funds, where he would have heard Fiona Reynolds, the chief of the Australian Institute of Superannuation Trustees—our friends the Australians again—commenting on his suggestion. She said:
“Looking at the Australian system, we conducted a lot of research into whether there should be more independent trustees but in actual fact we found there was a greater alignment of interest within trust based schemes, and these schemes outperformed other schemes where independent directors were present.”
In other words, these are interesting ideas, but they have been tried elsewhere and they are not a panacea or golden bullet.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)
If that is the case for Australia—and I looked very closely at Ms Reynolds’s comments—why are the Australian Government giving the regulator and trustees a duty to consider how to improve the Australian pension system in the future?
Steve Webb
I do not see any incompatibility. The specific finding in Australia that independent trustees are not a magic bullet is not inconsistent with requiring schemes to ensure they are doing a good job. We will require schemes to meet quality standards that we will set out shortly.
Our call for evidence earlier this year sought views on provider-level governance structures, and the OFT has announced that the Association of British Insurers will work on independent governance committees for the big insurance-based schemes. We welcome that development and will consider our own proposals in detail in our response to the call for evidence.
The second set of governance issues relates to fiduciary duty and sustainability, addressed in new clause 12, tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas) and amendments 54 and 55. By happy coincidence, I took part in a conference this morning organised by ShareAction. The hon. Lady was on the attendance list—perhaps she was sitting at the back heckling, but I did not see her there. The conference was to launch ShareAction’s green light project, which aims to get pension funds to take sustainability and climate change seriously. I was delighted to take part in that conference and I am very supportive of that agenda.
Clearly, the duty of trustees to their members is a cornerstone of trust-based governance, but we are looking at whether we have got the definition of fiduciary duty right. I welcome the fact that the Law Commission has consulted on this. Its interim conclusion is that fiduciaries should look at longer-term issues, and it is legitimate for them to look at environmental, social and governance—ESG—issues. The Government are therefore considering what the fiduciary duty on trustees means and how far we can deal with it through a better understanding of that work.
One of the issues that came out of the conference this morning—I shall try not to deviate too much from the new clauses, Mr Speaker—was that the trustee toolkit that the Pensions Regulator provides could be amended to take account of some of these concerns. One of the challenges is to try to ensure that the trustees do their job properly and have a broad understanding of what it entails. As I say, the Law Commission’s interim conclusion was that trustees should—note “should”, not just “may”—consider
“in general terms, whether their policy will be to take account of ESG factors in their decision-making”.
Caroline Lucas (Brighton, Pavilion) (Green)
I am grateful to the Minister for his positive comments. I take the point that the pension aspect is not the full picture, but it is a big part of it. If we want to make quicker progress on this issue, can he advise where we should best table our next amendments?
Steve Webb
In someone else’s legislation—[Laughter.] Just between ourselves, I encourage the hon. Lady to keep up the pressure across Government, including at Business, Innovation and Skills questions, Energy and Climate Change questions and Work and Pensions questions. To be frank, this issue is not always at the top of the pension agenda, so I welcome the amendments for that reason. I am reluctant, however, to amend the Bill in a piecemeal fashion, when I hope that we can have a more overarching framework affecting company law, business regulation and the duties of trustees not only in pensions but beyond. I am sympathetic to what she is trying to achieve, but we want to do it in a systematic, cross-Government way rather than dealing with just a bit of the issue. I look forward to hearing what she has to say, but I hope that she will withdraw new clause 12.
Scale is important. I do not think anyone doubts that, on average, bigger schemes produce better outcomes than smaller schemes, in the sense that, typically, bigger schemes have lower costs; they have the potential to diversify and pool risk; they have access to investment vehicles that smaller schemes perhaps do not; they have access to better quality investment advice; and they have more experienced trustees. We can see why, on average, a big scheme will probably do better than a small scheme. Just as the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East is searching for golden bullets on independent trustees—
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Silver bullets.
Steve Webb
Apparently he is searching for silver bullets. In any case, we are already seeing consolidation. To give the House a sense of scale, let us consider small and medium occupational defined-contribution schemes for between 12 and 1,000 members. The number of such schemes fell by more than a third in three years—a dramatic fall—from 3,300 to 2,110. The number of micro-schemes, with between two and 11 members, fell by a fifth over the same period, from some 45,000 to 36,000. In a sense, the Opposition amendments seek to force the pace on scale, but it is already happening quite quickly. That is a welcome development, and once we implement our measures on scheme quality—which, subject to consultation, may include tough action on charges—there will be a seismic effect on the pensions industry.
If a scheme cannot be used for auto-enrolment unless it delivers seriously low charges, many small, sub-scale schemes will fall by the wayside. The trends are already in that direction, and the measures we shall implement will substantively accelerate that. Rather than presume that scale is the right answer, we have to regulate the quality. If a small scheme can demonstrate that it is, for example, tailored to the characteristics of its membership and is delivering for them, great.
We do not want to kill good-quality small pension schemes, which is what the Opposition’s slightly bureaucratic amendment could do. Instead, we will say, “This is what we think good looks like. If you, as a big or small scheme, can deliver that, we will not tell you what to do. We will set parameters for what good looks like and you have to deliver.” Consolidation is already happening, and the quality requirements we are putting in place will deliver the outcomes that the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East wants.
Moving on—I apologise for the jargon—to decumulation, or “turning pension pots into retirement income,” as I think I am required to call it, new clause 11 suggests that it should be a requirement on schemes to feed in an annuity broker at the end. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East touches on an important issue, albeit again in an overly rigid way. Getting pension pots into a good profile of retirement income is crucial, which is why we at the Department for Work and Pensions are working with our colleagues at the Treasury on annuities and decumulation. Decumulation is about more than annuities. That is not a snappy soundbite, but in other words, turning a pension pot into a retirement income has to be about the whole process of retirement, not just a single event on a single day that fixes one’s retirement income for perhaps 30 years.
The danger with the rigidity of new clause 11 is that it presumes a backward-looking annuity model. Annuities in their current form were designed for a world where people lived for 10 years with pensions and then died. We now have a world where people might annuitise in their early 60s, or want to stop contributing to their pension pot in their early 60s, and live into their 90s. There are serious questions about the suitability of annuities for everybody. For example, people with big pension pots might want to look at a mixture of draw-down. They might want to look at alternatives, deferral or a range of options. It would be a backward step to hardwire into primary legislation that the only good thing that can be done with a pension is to annuitise through this particular model. We should give people new options at decumulation, not hardwire them into the annuity model. Of course, even an annuity broker may not necessarily guarantee that someone will get, for example, an impaired life annuity or enhanced annuity for disability or low life expectancy.
There is a lot that needs looking at in this section of the market. The initiatives that the industry has already taken—for example, the ABI code that came into practice earlier this year—are welcome, but we need to go further. We need a creative approach to turning pension pots into pension income, not a single product hardwired into a primary legislation model. I understand where the hon. Gentleman is coming from and I believe that the annuity market is in need of further reform, but hardwiring into primary legislation does not seem to us to be the way to go.
The House will be pleased to know that there are two final sections left, both of which are brief. The hon. Member for Hayes and Harlington (John McDonnell), who does not appear to be in his place, tabled new clause 7, on rail pensions. The new clause relates to whether the Government should underwrite the shortfalls in the pension funds of employees who worked for the nationalised rail industry, which was then privatised, and where some companies, such as Jarvis Facilities, Relayfast and Fastline, went to the wall. We sympathise with any worker whose firm goes to the wall, but I say to the hon. Gentleman in absentia that the notion of protected persons in this case was simply that the terms of the pension scheme of the private employer would be as good as in the public sector. It was never a guarantee against the insolvency of the sponsoring employer. All private sector employees are covered by the Pension Protection Fund, provided that their firm pays the PPF levy. That is how these workers will get all or most, depending on their circumstances, of the pensions they were expecting. It would be wrong to give special treatment to that group when many other people work for firms that went to the wall and will not get that treatment.
Katy Clark (North Ayrshire and Arran) (Lab)
Does the hon. Gentleman not accept that to enable privatisations to go ahead—we are not just talking about the railways; the electricity sector and the miners were affected in similar ways—promises were made that people’s pensions would not suffer any detriment as a result of privatisation? Our experience is that privatised companies go bust more often than others. Surely we are reneging on those promises.
Steve Webb
Just to be clear, new clause 7 makes a specific suggestion regarding a private sector employer going to the wall. The promise was never, “You’ll get absolutely everything, even if your firm goes bankrupt”; it was that the terms of the pension would be as good as in the public sector. Clearly, in this case people are working for a private sector firm and could, if they wish, transfer their pension rights to somewhere else. They chose to keep them with the sponsoring employer.
Bear in mind that the money to pay for any shortfall in those pensions will come from the general taxpayer. Somebody is paying for that shortfall and many general taxpayers have no pension provision at all. If a private company knows that the pension fund is completely insured by the Government, that may influence its behaviour in a way we would not want. If feels unfair to say, “If your private employer used to be nationalised not only do you still have access to a very good pension scheme, but it is absolutely protected, whereas if you worked for any other private firm you are not protected.” I can understand why the hon. Member for Hayes and Harlington, given his trade union links, supports the railway workers—that is fair enough—but it seems like special pleading for that industry and I think there are many others who might make the same argument.
David Mowat
I am sorry to take my hon. Friend back to annuities, but I have been reflecting on his remarks. I agree with the need for us to be more creative in that interface as annuities are taken out, and he is right to say that the annuity broker is overly prescriptive. However, it is also true, as I think he said, that there are market abuses in the annuity system. Is there any more we can do in the consultation to look at the transition from pension fund to annuity and ensure that, for example, the Association of British Insurers code of conduct is more rigorously applied than it has been? It has not been very successful up till now.
Steve Webb
Although the ABI code, for example, no longer requires the providers to send the application form with the wake-up letter, I gather the early evidence is that it has not substantially changed the proportion of people who shop around and then move to a new provider. I agree with my hon. Friend that there is a big agenda on decumulation—I apologise again for the word. It is not just about annuities. The new clause is too narrow and too prescriptive, but I assure my hon. Friend that we do not regard decumulation as a job done—on the contrary.
Katy Clark
I have been contacted by a number of constituents who are in difficulties because of the current regime. The Minister clearly accepts that there is a need for change. When will he come forward with proposals? He has been in post for a number of years and is clearly on top of his brief. We need the Government to act. When will they do so?
Steve Webb
My particular responsibility is automatic enrolment. We are about to put 10 million people into mainly defined-contribution pensions, the vast majority of whom, all things being equal, will then buy an annuity at the end. For understandable reasons, our focus in the past few years has been to get the infrastructure in place to get those 10 million people into pension saving and building up pension pots. Then, when they have a pension pot, we will ensure that they receive good value at the other end. There will be a set of people who will be auto-enrolled today and will retire tomorrow, but they are a minority. We need to get to grips with this issue. Annuity policy is led by our colleagues in the Treasury, which is why we are working closely with them. We hope to make further announcements soon.
Government amendment 31 relates to the Pension Protection Fund compensation cap. In Committee, we amended the Bill so that workers entering the PPF would have a more generous cap if they had been long-serving employees. The amendment applies the same provisions to people who are already in the PPF. We will not go back years and increase pensions retrospectively, but once the Bill and secondary legislation are passed we will increase their pensions going forward in line with the provisions we have already made for new employees going into the PPF.
Dame Anne Begg (Aberdeen South) (Lab)
Will the Minister explain what the position will be with regard to the cap for those who are in the financial assistance scheme and are not yet in the PPF?
Steve Webb
I am grateful to the Chair of the Select Committee. As she knows, the PPF scheme is funded by the PPF levy, and the financial assistance scheme is funded directly by the taxpayer. I think the FAS will be moving next year to the Department’s annually managed expenditure budget, so we will then have to find taxpayers’ money to make a parallel change to the FAS. We are continuing to reflect on whether we should do so. No final decision has been made, but I understand the case for some matching change.
To conclude, the change to the compensation cap will mean that relatively small numbers of people—who, having worked for their firm all their life, should have got a good pension, but on whom the cap was biting particularly harshly—will now get a fairer pension, which has been widely welcomed by those affected.
In summary, this section of the Bill deals with making automatic enrolment and private pensions work. Automatic enrolment has been a great success so far, but there have always been a lot more aspects to sort out, small pension pots being one in particular, scheme quality another. I am delighted to say, therefore, that this is the week we finally tackle the scourge of excessive pension charges, and I commend the Government amendments to the House.
Gregg McClymont
I have listened closely to the Minister. When one listens to him, particularly on pension charges, one has to listen very closely, because—how shall I put this politely?—there is a gap between the rhetoric and the reality. I will analyse the extent to which there remains a gap. In one sense, he has caught up with the questions that need to be asked about pension charges, but from the detail—or lack of detail—in his announcements, it seems we are still a long way from getting answers.
On other matters first, however, the Minister says that auto-enrolment is going “exceptionally well”. I think that that is accurate, but I am sure he would agree that we have to be cautious, given that it is very large employers that have enrolled and that the percentage of savers’ income going into the new pension schemes is very small—in many cases, it is hard to notice. We welcome the developments, however, and pay tribute to him for taking forward the previous Labour Government’s auto-enrolment scheme; there is consensus, I think, on both sides of the House that auto-enrolment has to work effectively. It is crucial that every single one of the 10 million people being auto-enrolled between 2012 and 2017 can be sure of getting value for money from that pension scheme. The necessity of value for money for all auto-enrolment schemes is what drives my amendments.
I wish to say a little about why that matters so much and how the Minister’s wind-up of the state pension interacts crucially with auto-enrolment. Essentially, he has gone for a hard and fast wind-up of the second state pension. No doubt, he will justify that move, and there are reasons to think it is sensible, but if we are to have a quick wind-up of the second state pension and a fast move to a flat-rate state pension, the biggest losers from that switch—this might be defensible, because there are always winners and losers—are likely to be lower-paid workers in the private sector who did well out of the redistribution accrual mechanism in the second state pension. If someone was low paid in the private sector, they accrued in a way that brought them closer to those on higher incomes. In many cases, therefore, the same people now being auto-enrolled will be the same people losing out from the hard and fast wind-up of the second state pension, or losing out in the longer term. That makes getting auto-enrolment right all the more important. The first thing he should have done when he took office—I know he will have an enormous in-tray—was work out how to ensure that every one of the 10 million people enrolled got value for money. That is the context of this debate.
The Minister says that the Bill will further improve the situation, so let me pursue some of his comments and then turn to Labour’s vision for private pensions. Amendments 5 to 10 to clause 32, on short service refunds, are more or less uncontroversial. On clause 34 and exemptions from auto-enrolment, he referred to our amendment 53 and said that I saw this as an “evil Government”.
Gregg McClymont
That is a lesson in not posing a rhetorical question. Whatever my hon. Friend believes, I do not see this as an evil Government—in particular, no one doubts the Minister’s good intentions—but our amendment must be understood in the context of the Beecroft report.
As you will remember, Mr Speaker, Adrian Beecroft is a Tory donor who has produced a report in the last 18 months arguing that red tape and bureaucracy on small businesses are far too heavy and that micro-employers should be removed from auto-enrolment. I know the Minister does not support that and said the Government had no intention of doing it—no one is suggesting he would do such an awful thing—but he will not be there for eternity. Given his recent comments about God being a liberal, perhaps he does intend to be around for eternity, but for those of us of a more sceptical temper, I think we can say he will not be around for ever, so it would be sensible to constrain a future Government, or even this Government—anything could happen—who might be under pressure from the Beecrofts of this world, in a way that is consonant with the best objectives of public policy.
The Minister said that amendment 53 did not even define a small and medium-sized enterprise, but he will know that the Companies Act 2006 clearly defines an SME as an enterprise with 50 or fewer employees. That is a common definition of an SME. The broader point, however, is exactly the one I have already expressed: we are trying to do him a favour by protecting him from those within the coalition Government who take a less enlightened view of the benefits of auto-enrolment. We tabled the amendment in that spirit.
On clause 29 and the debate around schedule 16, the Minister mentioned the Australian example. I was at the National Association of Pension Funds last week, and I have even watched him in the video—I was hoping he would entertain us with the song from “Les Misérables”, but I will come to that when I deal with costs and charges. He said that Australia is doing pot follows member—the inference is that I often point to the benefits of the Australian system—but that is not surprising, because Australia has several hundred schemes, whereas we have 200,000, and that is not including personal private pensions. To compare a system so scaled with our system is to let one’s a priori views of the world get in advance of the evidence, or to put it more simply: he is comparing apples and pears. Australia has several hundred pension schemes; we have 200,000, and that is a fundamental problem with comparing our system. Australia is in a much better place in terms of scale.
The Minister says that pot follows member will be simple and effective and that we will regulate for quality, by which he means there will be minimum standards—or at least he tells us there will be minimum standards, but, guess what, that is also currently part of a consultation. There is a broader theme to which I shall return; when the Minister feels under pressure from the Labour agenda on private pensions, he calls for consultation. He says that this and that will happen but when we study the detail, we see that what he has called for is a consultation. That is not the same as decisive action.
On pot follows member, the problem is that the UK has a fragmented pensions system; we have 200,000 pension schemes. We have—to put it in a simple fashion—great variations in quality. The Minister is being asked repeatedly by the pensions world how pot follows member will work in those circumstances. It is again worth listening closely to what he says, because he has not yet explained how it will work. He has set out his plan and objective to get to pot follows member but not how the mechanism will work. One of the reasons for that is that it is very difficult to do. To go back to the Australian point, pot follows member would be a sensible approach if we started from a very different place, but we do not. We start from a very fragmented private pensions system with a massive variation in quality.
On costs and charges, the Minister does not actually know what is going on in the pensions world. We had a very interesting conversation, or debate on this in Committee. In arguing a point with me, he pointed to DWP evidence. It turned out that the way in which he quoted that evidence was not appropriate, but my point is not to criticise him for making a mistake, which does happen; it is much broader. The DWP is forced to take surveys of employers to try to find out what pension providers are charging them. The Minister talks about evidence. Would not a much more effective way to approach things to have the costs and charges laid out for everyone to see in the first place? Why has he not got on with ensuring that costs and charges are disclosed? Instead, the DWP has to take surveys of employers who, in many cases—as his own survey evidenced—are not aware of what they are buying in terms of a pension scheme.
That brings us to the broader issue of who buys pensions. The Minister wants to move to pot follows member and says that there will be quality criteria; these will be minimum quality criteria. But, as things stand, he could not explain to the House all the costs and charges that exist in a pension scheme. Neither the Government nor the regulator gather that evidence. That is a fundamental point about the pensions market today.
Similarities are often drawn between energy and pensions. One way in which they are similar is that the vertical integration of pension providers—the same as with energy companies—means that it is very hard to crack where the costs and charges lie. I put that point on the table. The Minister wants to move to pot follows member but has not set out in detail the mechanism and the IT by which he would do this. More widely, he is not able to say at this stage what the costs and charges are in pension schemes. So how can he be sure that no one will move from a superior to an inferior scheme? He will say, and has said, that he will ensure that this happens. Again, I do not doubt his good intentions, but he has not so far delivered on costs and charges. More widely, if he does deliver—as I am sure he has every intention of doing—the amount of regulation that it will take to make a pot follows member pension automatic transfer system work is enormous. That is why so many stakeholders in pensions do not think it is a feasible way to proceed. The Minister said that the Association of British Insurers supports it. That is hardly surprising, because this is a system that will have the least detriment to the ABI’s members.
1.45pm
The Minister feels that he is now catching up with the pension charges debate; that is evident from his language and from the extent to which he talks about the Labour agenda, which is quite striking for the Report stage of a Bill. But he is still caught in the mindset of “If only I can get the industry round the table, it will deliver.” There is no evidence of delivery so far and no evidence therefore that that will happen. The reason that there is no evidence relates to a point made by my right hon. Friend the Leader of the Opposition in his powerful 2013 conference speech, which still reverberates around British politics. He asked, rightly, why one would expect an industry to take the decisions necessary to reform a market when it is not in its interests to do so. Why, indeed? I say to the Minister that, on pot follows member, he has to look beyond the ABI’s interests and look to the interests of the wider pensions community and of the most important people, savers.
The Minister mentioned the National Association of Pension Funds conference, where he mentioned pot follows member. I am sure that he got a very warm reception, because the national association is very clear not only that pot follows member is not the best way to proceed, but that there is a serious possibility of significant consumer detriment, which, in everyday language, means rip-offs. The national association, which the Minister so eloquently addressed the other week, is very clear on that. Not only is the association clear that we should have no truck with pot follows member, but it supports—the House will be surprised to learn—aggregators.
The Minister sets out my approach to aggregators as being, “Labour wants several aggregators, but how would they work?” He said that aggregators stop individuals engaging with their pension, or make that engagement impossible. He knows very well that the whole logic of auto-enrolment, which Labour began and which he has followed through, is that we have to use the power of inertia in pensions, because all the evidence is that many people will find it difficult to engage with pensions whatever the circumstances, given their complexity. Also, as he must be all too aware, auto-enrolment involves employers buying pensions, not the saver.
A criticism that I would make more widely of the Minister is that he approaches the pensions market as if it were a functioning market; functioning in the sense that we can and do have a consumer who is engaged, informed and sovereign, and a seller. The Minister knows that that is not the basis on which auto-enrolment proceeds because it is the employer who buys the pension. In other spheres, he has shown that he is fully aware that there is a big problem in the pensions market, which develops from the fact that the saver in many cases cannot be the sovereign—the person who makes the decisions—first, because the employer buys the pension and, secondly, because the pensions are so complex and their annual statements so opaque.
In those circumstances and with the Minister being aware of that, to claim that the aggregators should be excluded and rejected on the basis that they do not allow consumer engagement is a bit of a straw man. Let me say a little about why I think aggregators are so important. This relates to my other new clauses and I should iterate at this stage that these new clauses must, if we are to develop a serious policy to improve auto-enrolment outcomes, go together. For example, the Minister talked about trustees and said that the OFT says that the key is the quality of the trustees. He is of course right. My view, and that of the Labour party, is that trustees, in scaling up the pensions system, and aggregators go together to try to make a significant difference to the 10 million people being automatically enrolled in pensions.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
My hon. Friend is making an excellent speech. I recognise that the Minister is sincere in his intention to improve pensions but, in relation to costs and charges, does my hon. Friend think that the inertia might be a result of the Government not wanting to challenge the vested interests of the big pension providers in order to stand up for ordinary, hard-working people?
Gregg McClymont
I thank my hon. Friend for her shrewd intervention.
The Minister has been slow to understand the depth of the problems in the pensions market, and the House does not have to take my word for that. Earlier this week, I wrote to the Conservative MPs in the 40 most marginal Conservative seats, who have recently published a manifesto-cum-policy document. The language therein is—how shall I put this?—tougher on the private pensions market even than mine. The document, “40 Policy Ideas from the 40”, describes it as a failed market. It also states:
“Pension providers still refuse to clearly identify hidden charges such as churn and related fees…91% of retirees buy their pension annuity from their fund manager without checking other market options…the problem is that the private pensions market in the UK is a failed industry with higher charges than in any other country.”
That was not written by the Labour party. It was written by the Conservative MPs in the 40 most marginal constituencies. It seems a bit odd that they should take a tougher line on the pensions market than the Liberal Democrat Pensions Minister.
The way to explain that conundrum—I will not call it a paradox—is to say that anyone who believes in markets and thinks that they should work properly will support Labour’s proposals on reforming the private pensions industry. We want to reform it to ensure that the 10 million new savers going into automatically enrolled pensions get a fair deal. This pertains in particular to clause 29 and schedule 16, and the amendments thereto. It comes down to whether we believe that the pensions market is ready and able to proceed with pot follows member, given its fragmentation. The evidence shows that it clearly is not. Again, Members need not take my word for that. The National Association of Pension Funds has made it clear that we need to move to an aggregator system.
Given that the Minister was kind enough to spend a considerable period of time talking about the Labour amendments, I will do the same. I want to say a little about why aggregators are important. When the Minister addressed the NAPF, he gave a lucid, walk-around-the-stage performance that I enjoyed very much. He referred to two songs from “Les Misérables”. It would be unfair of me to sing either of those songs to him now. I have to confess that I am not a musicals man, although I suspect that the Minister might be a man for musicals—
Gregg McClymont
It seems that he is, and that is fair enough. I myself am not. Musicals are not my thing. He quoted from the innkeeper’s song, which I am certainly not going to sing. For one thing, I do not know the words. He used the song as a basis to talk about 2% here, 3% there and charges everywhere, and presented that as the problem in the UK pensions market. That is very different from what he was saying not long ago. It is just over a year since he accused Labour of scaremongering about pension charges, but he has moved a long way since then—rhetorically, if not perhaps substantially. He talked about that ditty and made it clear that there was a problem, but he still does not grasp the fact that pot follows member is impossible because of the fragmentation in the pensions market.
Labour’s new clauses would enable the restructuring of the UK pensions market so that savers’ interests would be appropriately represented. The Minister referred to our new clause 9, which deals with trustees, and he quoted the OFT’s view that the trustees would have to be good ones. He also quoted someone from Australia who is over here at the moment, who had said that in some cases trustees were not the answer.
Our proposals involve having trustees in every scheme, the scaling up of the UK pensions industry to reduce the fragmentation born of 200,000 different schemes—it is the most fragmented private pension system in the world—and the reform of the annuities market. Our amendment (a) to new clause 1 proposes that all costs and charges should be disclosed. Those measures need to be taken together as a package, as a Labour Government would do, and they would provide a starting point for tackling the fundamental problem in the UK pensions industry.
Our proposals would deal with the first problem, the system’s fragmentation. Secondly, they would deal with the problem that, as history tells us, pension savers are not the same engaged, informed consumers as those who buy tins of beans. The Minister seems to have undergone a damascene conversion on the merits and demerits of comparing the pensions market to the tin of beans market, and I will come back to that point. Savers are not informed and engaged in that way.
Buying a pension is not like buying a tin of beans. The consumer does not exert the same pressure. Someone buying a tin of beans might be given a choice of five different kinds. With pensions, such a choice would not be available to the saver anyway, because the employer buys the product. But let us use the Minister’s metaphor and compare the pensions market with the tin of beans market. First, if there were a pensions market in a supermarket, the saver would not choose the pension themselves; their employer would do so. That would be an odd arrangement in the tin of beans market. Secondly, the buyer of beans can taste the various kinds, from the cheaper ones to the more expensive, and come to a judgment based on taste relative to cost. It would be difficult for them to make a similar comparison with pensions; historically, it has never happened. Thirdly, I return to the point that it is the employer who makes the purchase of a pension.
The Minister has done something significant in the state pension sphere. He and I have been exchanging views across the Dispatch Box for almost two years now, and I say to him gently that he is still approaching the private pensions market on the basis that it has the ability to function like other markets, including the market for beans, even though, as he looks at it more closely, he can see that there are big problems. It cannot function like that. If we are to make it work properly, we have to ensure that the people acting in the pension saver’s interests are muscled, scaled and resourced.
That is what our new clauses would achieve. They would enable the scaling up of the pensions system, so that schemes would be able to get an effective deal from providers. Let us be clear: the providers in the pensions market have scale. In that sense, it is a bit like the energy market. They are large-scale, efficient organisations. It is the people saving into pensions who do not have scale, and that is because there are 200,000 pension schemes. They do not have the necessary representation because the smaller employers, in particular, who are auto-enrolling their employees are not pension experts. I know that the Minister is aware of those facts—we have discussed them a number of times—and I urge him to think about how all that relates to restructuring the private pensions system so that it takes cognisance of that reality. It is in that area that he is not taking on what the Opposition are saying.
We are clear that we need to move to an aggregator system, because otherwise pot follows member will not work and because if we enable the creation of aggregators, we have a chance to bring down charges in the auto-enrolment market. We know that there are millions of stranded pension pots, and the Minister rightly and repeatedly talks about them. How do we use the stranded pots issue to generate some change in the interests of pension savers, particularly the 10 million new savers automatically being enrolled in pensions for the first time? How do we do that? That is what our new clauses wink towards.
Steve Webb
The hon. Gentleman is making a thoughtful contribution, but what he seems to be saying is that if I have a small amount of money, I can have a 50 basis points pension fund, but his proposal for the charge cap for active members is 100 basis points or 1%. If I have a lot of money in pensions, I have to pay 1%, but if I go off to an aggregator, it is 0.5%. Why is that a good deal?
Gregg McClymont
I thank the Minister for that thoughtful intervention. I am coming on to the issue of the charge cap and the rate at which it will be set, so I shall take up the point when I discuss our amendment (a) to new clause 1. He refers to small pots, but that takes us into territory we have previously discussed about getting aggregators to take them on. Why does he believe that only small pots that are stranded should automatically be transferred? My view is that all stranded pots should be liable for automatic transfer. I am grateful for his intervention, because it reminds me of something I intended to say. The Government’s position on the pot follows member system appears to be supported only by the Government, the Minister and the ABI. First, the only pots liable for automatic transfer will be those for less than £10,000, and secondly no pots that are stranded before the date on which the legislation takes effect will count as stranded pots. [Interruption.] The Minister shakes his head. I will give way to him if I am wrong on that point. He does not want to intervene, so I shall continue on the basis that what I am saying is correct.
This is an important issue, because I am building a case that the Minister does not realise how substantial the problems in the private pensions market are. He continues to think it can be treated like better-functioning or well-functioning dynamic markets. Actually, the market is more like the one in energy. I say that because when, under the Minister’s leadership, the Department for Work and Pensions looked at how to consolidate pots, it gave as a reason against aggregators the fact that they would disrupt the current market structure.
The Minister talks about new clause 1 and the need to take very strong action. Implicit but also explicit in what he says is that there are really serious problems with this market. If that was not explicit in what he said today, it was certainly explicit in his “Les Misérables” ditty at the NAPF. He knows about these problems, and he knows that we need significant change. We are going to be in a position, however, whereby all currently stranded pots will continue to be stranded. The Minister is shaking his head again. Does he want to tell me that I am wrong? I am happy to accept it if I am wrong, but on the basis of our Committee debates, I do not think that I am. Am I wrong? The Minister will not stand up to say so, so I shall assume that I am not and that he wants to keep the currently stranded pots still stranded and will not take action to deal with the problem. He also sets a £10,000 limit. Why? The answer is that he continues to be unprepared to stand up to the vested interests in the pensions market.
The Minister said several times that the ABI is doing this, and the ABI is doing that. That is welcome; we like to see the industry engaged. However, a time must come—and it is now—when the Government must get on and make the changes necessary to reform the pensions system. I put that on the record, and if he wishes to correct me, he can. As I say, currently stranded pots will not be encompassed by clause 29 and schedule 16, and no pot above £10,000 will be considered to be a pot eligible for automatic transfer. I think that says something significant—that he does not understand the necessity for significant change in this market.
It is not just me referring to private pensions as a failed industry. As I said, the group of 40 Tory MPs in the most marginal constituencies have done so too. They do so because they understand that if 10 million people are to be automatically enrolled into the new workplace pensions, every scheme must provide value for money. The Minister needs to take the necessary action and accept that.
David Mowat
I have just come back into the Chamber, but since the hon. Gentleman mentions the 40 Tory Members, I want to put on record the fact that as one of those 40, I was extremely happy to hear what the Minister said about the consultation, the 0.75% cap and his cognisance of the issues surrounding it. I shall therefore support the Government in any Divisions on these new clauses and amendments. [Interruption.]
Gregg McClymont
My letter has not had the desired effect. I thought that Madam Deputy Speaker called me “Greg Mulholland” there. I was processing that, rather than being shocked at the fact that the Treasury Parliamentary Private Secretary is going to vote with the Government. Believe it or not, that did not come as much of a surprise to me.
Madam Deputy Speaker (Mrs Eleanor Laing)
I beg the hon. Gentleman’s pardon. That was my mistake. Perhaps the hon. Member for Leeds North West (Greg Mulholland) will speak later. I call Greg McClymont.
Gregg McClymont
Thank you, Madam Deputy Speaker. I was not sure whether I had misheard or whether the hon. Member for Leeds North West (Greg Mulholland) was trying to intervene.
I want to pay tribute to the hon. Member for Warrington South (David Mowat), one of the group of 40, as a doughty campaigner on behalf of those who wish to see radical reform of the pensions market. I do not know whether he had left his place when I quoted from the “40 Policy Ideas from the 40” and the description of the private pensions market as “failed”. I noted that the language used by those 40 MPs was stronger than anything I had used about the private pension market, and suggested that it is a little odd that Conservative MPs take a tougher line on the industry than the Liberal Democrat Minister. Perhaps it is not odd, however, because those who believe in free markets will want the pensions market to work effectively. [Interruption.] I did not catch what was said by the hon. Member for Gloucester (Richard Graham), but I invite him to intervene if he wishes to do so.
Mr Speaker—[Laughter]—I am sorry, Madam Deputy Speaker. You are not the only one who can make a verbal slip!
I was struck by what the Minister said about decumulation. It proved my point about his ability to talk but not necessarily to take any action, or enough action. New clause 11 calls for an independent brokerage service to guide those who annuitise on retirement through the process. Its aim is to deal with the lack of competition which, according to the NAPF and others, causes people to receive an average of 20% less in their annuities than they would have received had they shopped around. That returns me to a point with which I have been trying to persuade the Minister to engage. Buying an annuity involves a huge decision which a person will make only once in a lifetime, and which will affect the rest of that person’s life. However, the process is complicated, and because they find it hard to understand what they are being told, most people currently default to the annuities that they are being offered by their existing pension providers.
Katy Clark
I am glad that my hon. Friend is speaking up for savers. He is raising issues that have already been raised with me by a number of my constituents. When I told the Minister that we were waiting to hear proposals from the Government, he said that we would hear something very soon. Has my hon. Friend been given any indication of when that might happen?
Gregg McClymont
Thank you, Madam Deputy Speaker. That was beautifully pronounced, which is what I would expect from a Member from Kilmacolm. I look forward to your pronunciation of my constituency.
My hon. Friend made a very good point. I think she, and indeed everyone who listened to the Minister’s response to new clause 11, will be wondering what he proposes in lieu of the new clause. “Nothing” is an honest and fair assessment—or, at least, “Nothing concrete or substantive.” Referring to decumulation, the Minister said, “An awful lot needs to be looked at. We need to go further, but we need a creative approach rather than merely focusing on annuities.” I understand what he meant, because there is an ongoing debate about annuities as a product, but people out there, including our constituents, are annuitising every day. I do not think that saying to those people, “We are going to think about some creative solutions, we cannot tell you what they are, and because we are going to do something creative, we should not at this stage do something specific and concrete in order to improve outcomes,” stands the test. How long will it be before the Minister deals with this problem?
We know that annuities are a huge issue and that plenty of ideas are flying around, but ours is a concrete, practical proposal to improve annuity outcomes as things stand. I do not deny that the Minister has done something pretty significant in respect of state pensions, and I know that he must maintain a balance between pension schemes, but is it really good enough for him to respond to us by saying, “We need to do something—we need to go further—but we need a creative approach rather than your approach, which is focused on annuities”?
Annuities are the product that most people have to buy, and I think it unfair of the Minister to reject our new clause on the grounds that he prefers a more creative approach without explaining what that creative approach will be. I know that he has a great deal on his plate with state pension reform—winding up the state second pension as quickly as he intends to wind it up constitutes an incredibly big reform—but I ask him to reflect on whether it is good enough to say to people who have saved throughout their lives, and who are now receiving much less than they could have received had they shopped around, “We cannot support the Opposition’s new clause because although an awful lot needs to be done and we need to go further, we need a more creative approach.” I do not believe that anyone will be convinced by that.
Steve Webb
The hon. Gentleman’s central thesis seems to be that he should claim credit for Labour’s 2008 auto-enrolment legislation. He likes to say that auto-enrolment is a Labour thing. However, he has spent the last three quarters of an hour telling us how fatally flawed that legislation was. It contains no standards relating to quality or to annuities. I would have asked myself on day one, “How can we get value for money?” Why did Labour think that it was good enough to legislate for auto-enrolment without addressing any of those issues?
Gregg McClymont
The Minister took a similar approach when he talked about stakeholders. I shall say more about the stakeholder issue later, but let me first make it clear to him that I have never claimed that all the credit for auto-enrolment should go to Labour; in fact, I have said a number of times that the Minister and the Government deserve credit for taking it on. The Minister is simply wrong to say that that is my “thesis”, as he put it. My thesis is that the Minister has underestimated the scale of the problems in the private pension market, and that the Bill and his comments on our new clauses suggest that he continues to do so. He says that Labour should have done this and should have done that, but I assure him that had I been pensions Minister in 2010, the first task on which a Labour Government would have focused would have been making the changes to auto-enrolment that were necessary to ensure that every saver was given value for money. [Interruption.] The new Whip, the hon. Member for Croydon Central (Gavin Barwell), of whom I am extremely fond, has just said something that I could not hear because I was talking at the same time as he was mumbling, but I am sure that it was shrewd and thoughtful.
The Minister talks of views. This is the Opposition’s critique. He has announced, “I want to carry out a radical reform of the state pension. I want to move from a very slow merging of the state second pension and the flat rate state pension to a hard and fast wind-up.” That is a complicated process that will take up a great deal of time. Meanwhile, he has been focusing on another issue, that of “defined ambition”. He spoke about that to the NAPF as well.
My specific critique of the Minister’s approach is to do with sequencing. Given his intentions and actions in respect of the state second pension, he should have made sure that there is nothing in the auto-enrolment market that could end up with any of the 10 million savers who are going to be automatically enrolled getting less than value for money. At one level the Minister does not disagree with that, because he told the NAPF that we will look back at this period as either one when something happened that was for the long-term good or as one when the problems in the private pension market were not dealt with. The Minister has been too slow to get on to this and, based on what he has said today, he is still not taking the necessary action. He is saying he might take action, but his words, which I will examine shortly, reveal it is in fact the appearance of action without the reality of action.
Let me develop that argument with reference to new clause 1 and our amendment (a). The Minister announced that there will be a consultation on a possible charge cap. We all knew that was coming: the Minister trailed it extensively. What did the Minister say about this consultation? First, it is important to note that it is a consultation, which, of course, does not commit the Government to doing anything. A consultation is not the same as legislation. The Minister became more engaged as he was speaking, and he finished by saying that this is a full-frontal assault on pension charges. The problem is he also said, “We will look at how far we can get.” A whole range of activity on charges has been undertaken, but, when he lists them, it is clear that they are mostly consultations. I give him credit on consultancy charges. The Minister acted decisively on that, but he needs to take similarly decisive action on the wider pension charges problem.
The Minister’s language was instructive. He wanted to dress up a consultation as action, but it is not action. He floated the possibility that one consultation option will be a cap of 75 basis points, but he did not say what the other options would be. Given my knowledge over two years of the way the Minister proceeds, I doubt that this will be a consultation with only one option, so will he tell us what the various options for a charge cap will be? He is probably giving the House only partial information by noting there will be one option of 75 basis points.
So the Minister announces a consultation, cherry-picks, for the benefit of his statement this afternoon, some of the things that will be in it, but no one in the House has yet seen the consultation and been able to examine it. That suggests the Minister is under pressure to get going on reforming the private pensions market, specifically in terms of costs and charges. That was what one felt when listening to the Minister. Not only did he spend a lot of time rebutting Labour’s vision for private pensions, but he felt the need to oversell what the Government are doing. I would say he felt that need because he feels under pressure on this issue. [Interruption.] The Minister suggests I am psychoanalysing him. As a historian rather than a psychoanalyst by trade, I will now present some evidence to support this view of the Minister.
Just over a year ago, when Labour pointed out the problems with charges, the Minister said we were scaremongering. However—to take us back to the issue of the tin of beans, as I promised—the Minister said in his statement that the pensions market is not like a tin of beans and that is why we have to look at a charge cap, but he also said in January this year, “I’m not sure a charge cap’s the way to go because the pensions market is like a tin of beans.” First, that suggests an obsession with tins of beans, which one would never have expected of the Minister, but it also suggests a little confusion in the Minister’s mind about what kind of market the pensions market is.
The Minister now says categorically, “The pension market is not like a tin of beans, so a charge cap has to be consulted upon”, but in January 2014 the Minister is quoted by AOL Money UK as saying there is no case for a pension charges cap and
“he is not yet persuaded that the Government should cap pension charges.”
The Minister can say he has changed his mind. I have absolutely no problem with that. He says he was not persuaded and now he is persuaded. That is a perfectly defensible position, but it gives credence to the Opposition argument that the Minister has been slow to realise just how dysfunctional this market is. The Minister said in January:
“Why does the Government not set a price cap on a tin of baked beans? We do not need to because there is a vibrant market; people have lots of choice”.
Yet today the Minister used the baked beans example himself and said categorically that the market is not like a tin of beans. That suggests the Minister has moved on this issue, which we welcome, but it raises this question: if he did not get it nine months ago, does he get it now? The way to test that is to look at what he said about charges, disclosure and caps in respect of new clause 1.
The Minister made it clear that the consultation is happening and it is important, and he pointed back to stakeholder pensions and said, “The Labour Government brought in stakeholder pensions in 2001, but look at how high the charges were capped.” I think the Minister will agree that he and this Government, by taking on the Turner consensus developed by the last Government, are grappling with fundamental legacies of pension policy decisions made by previous Conservative Governments in particular. [Interruption.] The Minister says Labour ones, too, but let me develop this argument.
The Thatcher Government did—I am sure for the best of intentions—a couple of things, one of which was breaking the link between earnings and the state pension, but we can come on to that when we talk about state pensions later. Specifically pertinent to the clauses and amendments currently under discussion, however, the Thatcher Government decided to encourage the taking out of personal private pensions and thereby encouraged—I will put it no stronger than that—5 million people to leave the state earnings-related pension scheme and/or occupational schemes. The Minister knows about pension pillars. The state pension is one pillar, and additional pension saving is another. What the Minister is trying to do in this Bill is reform the first pillar radically and make sure the additional pillar delivers effectively. That was the approach the Turner commission set out, and I am pleased to see the Minister nodding in agreement. The Turner commission reached that conclusion because it recognised that both pillars had to be rebuilt after the policy mistakes of the 1980s.
Andrew Griffiths (Burton) (Con)
The hon. Gentleman talks about policy mistakes of the Thatcher Government and about previous Governments. Will he admit that one of the most damaging things for our pension provision was the previous Prime Minister’s £100 billion raid on our pensions when he was Chancellor?
Gregg McClymont
I assume the hon. Gentleman is referring to the decision to remove the dividend—[Interruption.] I say to him, first, that I do not know where he gets that figure from. I have heard it from Conservative MPs, in particular, but I would be delighted if he explained where he got it from. I would be interested, because anyone who has looked at the matter closely would say that the figure had been plucked out of nowhere. Pensions are a long-term business, and I am not suggesting that the only Governments who ever made a mistake were previous Conservative Governments. However, the fundamental policy decisions that set the UK on a slippery slope regarding additional pension savings were the mistakes the Thatcher Government made through the enormous encouragement given to personal private pensions.
The hon. Gentleman might remember, or might have read about, the way in which an army of pension salesmen was unleashed to persuade people that they should leave high-quality occupational schemes or the high-quality second state pension—the state earnings-related pension scheme—and go into personal pensions. They were offered enormous lump sums, not realising that such sums, up front, actually came out of their pension savings. They were promised enormous returns, and they were promised that they could pay less into a pension and get a much better retirement income. Where did that lead? It led directly to the private pension mis-selling scandals, whose legacy of public mistrust of pensions we all live with today.
That relates back to my point about the Minister’s approach. He is trying to build back up and deliver, or try to deliver on, a consensus around the Turner proposals—that is the right thing to do. However, if he is going for a hard, fast wind-up of the second state pension, with the losers being low-paid private sector workers, he has to be clear and convinced that every auto-enrolment scheme—10 million people are going into these schemes—delivers value for money. That is where my view, and that of Opposition Members, that he has not moved fast enough comes from, and it is evident in his change in view that I have cited. His view on the private pensions market has evolved. We welcome his movement, but we say to him that he has to move faster, and that leads me to amendment (a).
We have to draw a distinction between costs and charges. Our amendment would, in particular, make possible the disclosure of all transaction costs. The Minister alluded to that, saying, rightly, that we cannot have transaction costs in the cap. I absolutely agree with that; I do not know anyone who would say that transaction costs could be included in the cap. However, we need to ensure that the transaction costs are disclosed to employees and employers. He suggested that it was odd that the Opposition would want there to be a statutory record of costs and charges, but that is not odd; it is central to reforming the private pensions market.
Steve Webb
A few minutes ago, the hon. Gentleman rebuked me for saying that engagement was important, because for most people this is all about inertia, but he is now saying that employees are going to go to the pensions regulator’s website to look at transaction cost charges on their pension. Those two things cannot both be right.
Gregg McClymont
That is not what I was saying, and I will explain why. I am not surprised by the Minister’s response, because it probably explains why he was reported as saying at the NAPF conference that transparency “gets you virtually nowhere”. I assume the basis for that view, which at first glance appears odd, is that he takes the point that I have been making throughout this debate that seeing the pensions market as one where the saver is always is in charge or can always be in charge is simply wrong. I just put that on the record, but now let me deal with his point directly.
First, I do not see any basis on which one can be against the full disclosure of everything that has an impact on pensions, including transaction costs. Secondly, if we had the disclosure of transaction costs, that would enable everyone with an interest in ensuring good pension outcomes, including the Government, to have the evidence at their fingertips to say to interested parties, stakeholders and, in particular, pension companies and fund managers, “That’s what you are charging? That’s not on.” How can the Minister not want to have all the evidence at his fingertips? He is taking a strange position. He says that he is carrying out a consultation on charges. We know that is a shift in his position, for the reasons I have set out and given his previous comments, but he is still behind the curve because he does not support the full disclosure of transaction costs—he certainly will not support our amendment (a), which will make such disclosure a reality.
Let us be clear about this: we simply do not know what happens on costs when pension moneys are put into the “investment chain”. That seems an obscure term, but I am talking about where someone saves into a pension, their pension provider passes the pension savings to fund managers—they are often in the same organisation, because, as with the energy sector, there is a lot of vertical integration—and then the savings are invested. There is no comprehensive disclosure of all the costs that accrue in that process, and that cannot stand for much longer in the 21st century.
The Minister was quoted as saying at the NAPF conference—if he has been quoted unfairly, I urge him to intervene to say so—not only that transparency “gets you virtually nowhere”, but that one had to strike a “balance” between the public’s right to know about transaction charges and the costs to fund managers of disclosure. We hear that argument a lot across political debate. It is not a foolish argument in some cases, but it is in this case, because fund management is such an opaque business and, according to the things we hear—without access to the facts we cannot know for sure—the costs can be significant. Hon. Members should not take my word for it. The Secretary of State for Business, Innovation and Skills commissioned the Kay report on equity markets and “long-termism”, and Professor Kay made it clear that all transaction costs should be disclosed.
Professor Kay was clear about that, on behalf of the Government—or, certainly, at the behest of the Minister’s Liberal Democrat colleague the Business Secretary—because of the evidence he had gathered that fund managers can over-churn pension fund savings. What do I mean by “over-churn”? The incentives lie in commissions for trading, and so rather than hold on to assets for the long-term—what one might call the “Warren Buffett” approach, which is a very successful long-term approach to investing and is consonant with the long-term nature of pensions—fund managers have a big interest in constantly trading, because that generates commissions. That might be the case, or it might not. We simply do not know, because those things are not disclosed. The Minister trumpets new clause 1, but it does not include any disclosure of transaction costs. If we want to move to an auto-enrolment system and have in mind the 10 million people who will be automatically enrolled, as a sine qua non of reform we must ensure that the transaction costs are disclosed.
I am not sure whether you are aware, Madam Deputy Speaker, but just over a year ago the Royal Society of Arts investigated what pension providers understand by “the costs and charges” of a pension. It contacted 25 big providers and the vast majority told it that the full costs and charges of a pension scheme were simply the annual management charges, not the total expenses ratio and not transaction costs. Our argument is that the Minister has been too slow to recognise how dysfunctional the private pension market remains. We welcome the fact that he is moving, but he is doing so far too slowly. As evidence of that, we cite the fact that he will not commit the Government today to the provision on the disclosure of transaction costs. Our amendment (a) to new clause 1 would ensure the disclosure of transaction costs.
Our other amendments, as they pertain to the scale and value of pension schemes, to trustees and to annuities, would make a significant difference in the market. They would start to make the changes that are necessary to ensure that everybody gets value for money.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Does my hon. Friend make a distinction between a scheme with trustees and one under which the member must look after their own interests as it has no provision for a set of trustees to oversee it?
Gregg McClymont
My hon. Friend makes a very good point. The logic of moving to a system in which every scheme has independent trustees flows from the fact that in the pensions market as it stands the consumer who is a member of a scheme without trustees cannot have their voice heard. What happens then? The interests of shareholders over-dominate. In a market that functions effectively, of course, the consumer can shop around, compare prices and if they buy something that they do not like they can even buy something else. None of that is true of the pensions market and that is why, in our view and given the options available, reaching a situation in which every scheme has trustees is the best way to try to ensure proper representation of saver interests. My hon. Friend is absolutely right.
David Mowat
I am listening to the hon. Gentleman’s argument, and it seems to me that all his points should be input into the consultation the Minister announced earlier. The Minister made it quite clear that one issue that would be consulted on was a cap of 0.75%, and that among the issues to be resolved was what factors would be included—for example, total expense ratios, annual management charges or any other kind of charge. Those are all legitimate topics for consultation. I welcome the discussion, as it is surely the right thing.
Gregg McClymont
I do not disagree with any of that, apart from the fact that the chance to take the necessary steps has today been laid in front of the Government and the Minister. We must concede that auto-enrolment is already well under way, but at what stage will we see the action that is necessary? We will be in 2017 before we know it, when everyone will be auto-enrolled, and if the Minister has continued to consult rather than act we will be no further forward. The Minister has taken action on consultancy charges—he can do it—and I give him credit for that. He is undertaking a significant reform of the state pension, which we will discuss later, and he has many things to deal with, but the Government must act faster on these issues.
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. I appreciate that the hon. Gentleman is addressing a great many issues in this group of clauses and amendments, but, having heard his arguments several times, I trust that he will soon be drawing his remarks to a conclusion.
Gregg McClymont
Thank you for that wise advice, Madam Deputy Speaker. I was somewhat sidetracked by the excellent intervention—[Interruption.] That is another intervention from the Parliamentary Private Secretary. If Members want to stand up and say something, I am happy to take an intervention. If they want to heckle from the back row, I will continue to respond to those heckles.
Where are we? The Minister wants to be seen to be taking decisive action on pension charges but today he has called for yet another consultation. He has moved on during the past year, as he had said that Labour was scaremongering and he could see no need for a cap. The consultation is a development, but we need action now. Our amendment (a) to new clause 1 would ensure full disclosure of all costs and charges and our other proposals would ensure a private pension system that would mean that everyone who was auto-enrolled would get value for money. The Minister is right that auto-enrolment started well, but he knows as well as I do that the key is the smaller employers. We are determined that everyone should get a good deal from auto-enrolment and I therefore commend our new clauses and amendments to the House.
Richard Graham (Gloucester) (Con)
This is the first time I have made a speech while you have been in the Chair, Madam Deputy Speaker, so let me add my warm congratulations to the many that you have already been given.
Our debate today has been a pretty specialist affair so far, in a different language from that which many of our constituents speak. It has no doubt been a struggle for many in the Public Gallery to remain awake throughout. As we dive into the detail, let us not forget the goal: the Bill’s aims are simplicity, clarity, a reduction in the flaws in means-testing and, above all, to ensure that it always pays to save. Some of that was rather lost in the 85 minutes for which the shadow Minister, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) spoke, so let me try to bring us swiftly back to the main points of detail.
Earlier we tackled auto-enrolment, small pots, aggregators, charges, scale and annuities. No doubt that would be enough to put many people off listening to any more, but let me add my thoughts briefly on each in turn. First, on auto-enrolment, the Minister outlined the success so far—1.7 million people already enrolled and 90% of them staying in. The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East said that he was cautious and that that percentage might not be sustainable as we started enrolling those in smaller firms across the country. He may well be right about that. The Minister will be acutely aware of that, which is why he is right to tackle some of the detail now, ahead of the smallest companies enrolling.
The important thing in the section on auto-enrolment was the changes outlined today—two opt-outs: one for those who have already given notice of leaving their employer and one for those who would suffer negative tax penalties because they had already accumulated more than the maximum allowed for tax-free savings. The Minister confirmed that there is absolutely no intention of excluding small and medium-sized enterprises, the lifeblood of every Member’s constituency. That is important, and he rightly summarised Labour’s amendment 53 as unnecessary, unclear and ineffectual.
The discussion of small pots, importantly, covered the differences between the pot follows member approach recommended by the coalition Government and the aggregator approach proposed by the Opposition. The precedent of Australia is relevant. Those 5 million lost accounts worth some 20 billion Australian dollars are not a small matter. Millions of our constituents are affected. Those of us who have accumulated small pots at different periods in our life know that it is extremely hard to keep track of them and to have any idea of what our savings really are. The whole business of pensions is ultimately about savings. It is about accumulating a pot of money which will see us safely through retirement, ensuring that we can live after retirement without having to fall back on savings.
Mr Donohoe
Does the hon. Gentleman also consider that a pension pot is a deferred income and should be treated as such? The problem is that not many people do so.
Richard Graham
The hon. Gentleman is right in the sense that all savings are ultimately deferred income. If he is trying to differentiate capital and income from investments, which I do not think he is, that is a separate issue. I accept his point that ultimately everything is deferred income, though I would prefer the word “savings”, as we will all need savings at some point. There is no significant difference between us on that.
The Opposition approach is towards an aggregator, which is an uncomfortable world where there is no choice and our savings pot is shunted off in a Thomas the tank engine-like way to God knows where. We will not get into alluding to the names of the engines in “Thomas the Tank Engine”. That would be unfortunate and arguably inappropriate. The important thing, as the Minister rightly said, is that we must not have small pots that follow the member into a bad scheme. We must focus on all schemes being good. That is why it is important to legislate for quality schemes, as the coalition Government are doing.
I welcome the amendment that the Minister mentioned whereby those who have been in a scheme for less than 30 days will get a refund, but it is important that the practice which has grown up over time of people being in schemes for less than two years and being bought out for a not very significant sum comes to an end. I welcome that, as will many people across the land.
After small pots and aggregators, we come to the rub of the issue—charges. The Minister rightly observed that 1% compounded over time amounts to a huge amount of money paid out in charges to fund managers and administrators, and that it is important to follow the recommendations of the Office of Fair Trading report, which noted that pension savings is one of the worst sectors for charges, that the demand side is weak and that there is the contradiction between the employer choosing the manager, but the member effectively paying for that choice.
I welcome, and many Members across the House and others outside this place should welcome, the opportunity to look objectively and constructively at the issue of charges through a consultation. The option of 0.7% is no doubt at the lower end of options out there. That gives this Government and Members a chance to see what might be the most practical options, bearing in mind always that we do not want to limit the management of those funds to a handful of very large providers—the equivalent of supermarkets in a world where sometimes a delicatessen tailoring their investment to what members need can be an attractive and practical option.
The process of a consultation on charges clearly needs to include a definition of those charges. I was disappointed to hear so little of substance from the shadow Minister on the subject of charges. He did not even mention the total expense ratio or any of the other aspects and acronyms that comprise charges, which are beloved of my hon. Friend the Member for Warrington South (David Mowat) and others of us who have previously worked in the sector. There was no detail at all from the Opposition spokesman and, at the end of his 85 minutes of speaking, I am none the wiser about the charge that the Opposition are recommending
On charges generally, I think I can summarise the shadow Minister’s speech for Members and especially for those in the Gallery, whose concentration may understandably have wandered during those 85 minutes. There were four messages that he wanted to get out: first, highlight the fact that the coalition will do nothing for living standards; secondly, accuse the Government of sticking up for big business, not small pensioners; thirdly, sound as if the Opposition are offering an energy price freeze; and fourthly, do not give a precise figure. The approach behind all that is not to let the facts get in the way of the narrative. That, in about 12 seconds, broadly covers what the shadow Minister said in 85 minutes on the issue of charges.
The approach of the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East to the Government’s recommendation of a consultation amounted to a simple slogan: consultation, not action. This, I thought, was a curious approach by the shadow Minister. He earlier intimated that he is very cautious about the implementation of auto-enrolment—the results might not be as good as they have started out to be and it was too early to celebrate. He gave the impression of being a very cautious driver, one who was unwilling to take unnecessary risks and who wanted the Minister to make sure that he keeps the car on the road.
Such analogies were built into the hon. Gentleman’s approach, but caution is precisely why, after 13 years of the previous Government, auto-enrolment had not been implemented. It is precisely why they did not pursue universal credit. As the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), admitted, it was too difficult. It is precisely why the previous Government were unable to make decisions—no nuclear power stations, no changes to the schools funding formula, no privatisation of Royal Mail, too little stimulus to apprenticeships, very little impact on manufacturing. It was all too difficult.
The approach of the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East today is to try to take credit for his party for the idea of auto-enrolment, and then to snipe at the detail offered by the Minister. The hon. Gentleman coupled that with something close to an apology for the previous Government not having done enough in the world of pensions, but it was a little like the policemen on Plebgate recently—it was not a wholehearted apology, but rather a nudge towards an apology. That was disappointing, because the central issue of charges is precisely what the debate is likely to focus on.
The shadow Minister alluded seven times, I think—I tried to keep count—to what he called the policy paper, “40 Policy Ideas from the 40”. He wrote me a charming letter about it:
‘Dear Richard… The policy paper entitled “40 ideas from the 40”, to which you were a contributor’—
I was not a contributor. I fear that he might not have read it in sufficient detail to understand who was and who was not a contributor. However, he was absolutely right that my hon. Friend the Member for Warrington South was a contributor and that he mentioned the lack of transparency in costs and charges in almost exactly the same language, as he confirmed today, as the Minister used when he called for the consultation on charges, which I think we all welcome and look forward to.
Gregg McClymont
There is a joke in that somewhere, but I will not go there. I was just struck that the hon. Gentleman—we have debated this in Committee—said that he was not a member of the Forty Group. I have in front of me a copy of “40 Policy Ideas from the 40”, which states that the group
“consists of the forty most marginal Conservative seats”,
and he is one of the Members listed.
Richard Graham
The shadow Minister must learn to be more precise in what he says. His letter referred to
‘“40 ideas from the 40”, to which you were a contributor’
but I did not contribute. When I have good ideas, which is rarely, I either keep them to myself or share them with colleagues verbally. I do not put them down on pieces of paper for him to read, or not read as the case may be. I hope that he will take on board that correction. I am a member of the Forty Group, but I was not a contributor, and there is a difference.
Gregg McClymont
This is all very curious, because the front cover of the document refers to “40 Policy Ideas from the 40”, and its states:
“The Forty Group consists of the forty most marginal Conservative seats”.
One of the MPs listed is the hon. Gentleman—
Madam Deputy Speaker (Mrs Laing)
Order. We are straying somewhat from the amendments and new clauses before us. If there is a difference of opinion, it will have to remain as such. I urge hon. Gentlemen on both sides of the Chamber please to stick to the points before us on private pensions.
Richard Graham
I welcome your advice, Madam Deputy Speaker.
Before the shadow Minister intervened, I had been referring to scale. I touched briefly on the fact that size is not everything when it comes to the management of pension funds, as with so much else in life, Madam Deputy Speaker. In order not to delay you further on that point, I will move swiftly on to annuities.
Annuities matter. We are in a new world, as the Minister said, because we are living longer and we need more options. There is more to annuities than simply a need for more competition, choice and help, although that is important and the code of conduct from the Association of British Insurers is a promising start. I agree with the Minister, though, that we should go further. At the heart of the matter is transferability—being able to trade annuities at different periods of life when different circumstances crop up and when there is different pricing in the marketplace. What we certainly do not want is a single product solution. I was lobbied heavily at the Conservative party conference by an annuity provider who was keen to impress on me the importance and relevance of their single product solution, but my instinct—I hope that the Minister is with me on this—is that such solutions are precisely what we do not need in the world of annuities.
Those were the six main points I wanted to cover—auto-enrolment, small pots, aggregators, charges, scale and annuities—and I have done so in about seven minutes. There is no need to go on for much longer, but I will try to bring my speech to some sort of rounded conclusion by asking the Minister to note three queries that constituents have raised with me.
The first query, which I think is important for Members across the House, relates to bereavement support payment. It is clearly an emotional issue, as all families who have had to deal with tragedy will understand, particularly when it comes to bereaved children. Winston’s Wish is a charity headquartered in the constituency of the hon. Member for Cheltenham (Martin Horwood), but it has a significant presence in mine. It has made a number of points, not all of which I agree with, but one is that the tax status of bereavement support payment is slightly unclear. I would be grateful if the Minister could say more about that and whether it will be tax-free, because that would be hugely appreciated. Given that the trend of his proposals on bereavement support payment is effectively to increase the amount of money but have it paid for a shorter time, having that payment tax-free would be hugely helpful for families affected. There is a second point from Winston’s Wish that I want to raise with the Minister. I understand that unmarried partners are currently ineligible for BSP, so perhaps he will confirm whether people in civil partnerships are eligible.
The second query from a constituent relates to changes to occupational schemes, which my constituent believes can be done under the Bill without agreement from either members or trustees; currently trustees would have to approve it. My instinct is that long-standing defined benefit schemes, such as that of the major nuclear power operator headquartered in Barnwood in my constituency—formerly British Energy but now EDF Energy—are most unlikely to close without any form of consultation or discussion with members or trustees, but I would be grateful if the Minister would comment on that.
Steve Webb
It might benefit the House to know that the measure in the Bill to which my hon. Friend refers is the statutory override, which simply allows employers to recoup the loss of national insurance rebate. The state pension changes imply a change to the national insurance regime, so his constituency employer would lose some money. The Bill simply allows them to recoup that cash and nothing else, for example by changing the accrual rates in the scheme. It is designed to help employers cushion the blow of the loss of the rebates.
Richard Graham
I am grateful to the Minister for that clarification. If I understand it correctly, the employer will recoup the cost of the national insurance but nothing else.
Katy Clark
Like the hon. Gentleman, I have nuclear power stations in my constituency—Hunterston A, which is being decommissioned, and Hunterston B. Has he, like me, been contacted by numerous employees who are incredibly concerned about the protections that will be taken away from them by this Bill?
Richard Graham
That is an interesting point. The answer is yes, but they are not in the hundreds. They come in two types. One type number those who are either still working there and are concerned about possible changes to the defined benefit scheme and exactly the issue I have just gone through with the Minister. I hope that that will be reassuring to the hon. Lady’s constituents as well as to mine.
The second type of person who has been in touch relates to the third constituency query I was going to raise: those members who are covered by the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990. I see the hon. Member for North Ayrshire and Arran (Katy Clark) nodding and suspect that she has been contacted by people in a similar situation. The issue is that their pensions might be affected by changes to their pension schemes to reflect these higher national insurance costs. I understand that the Government have still not responded to their own consultation on whether to exempt protected persons from these changes. The Minister might care to comment on that later. It might be something that the Treasury is involved in, alongside the Department for Work and Pensions, but I think that it would be right to express concern on behalf of some of the pensioners involved. However, I understand that there is an argument that both existing pensioners and current members of a pension scheme should be treated with consistency on that. I raise the issue so that the Minister can respond. Those were the three queries on bereavement, change of occupational schemes—which has been answered—and the protected persons scheme.
In conclusion, what the Government are proposing in the Pensions Bill is important and will make a difference. The changes will enable people to save and that saving will pay. The technical details, which the Minister covered earlier, are important for smoothing out some of the small but niggly details that will affect our constituents in due course.
At the risk of repeating myself, I am disappointed by the approach taken by the shadow Minister, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East. For him and his party to fall back on a slogan of “consultation not action” really was disappointing; after 86 minutes we would have hoped for a great deal more clarity on his precise proposals. What exactly does he intend to do on charges? In the absence of such clarity, I hope that he and Members from all parties will make substantive contributions to the consultation so that we can agree on the charges, make changes to the annuity details and say with pride to all our constituents that this Pensions Bill will make a difference to all our lives in retirement.
Caroline Lucas
I have tabled new clause 12 and amendments 54 and 55 to highlight the need for the Department for Work and Pensions to address the systemic risks posed by climate change and natural resource depletion to pension schemes as a whole, and to suggest some positive solutions.
The Minister has already mentioned the report launched today as part of the new green light campaign by ShareAction, in partnership with the trade unions and environmental groups, which highlights the urgent need for reforms to the pension industry to ensure that it takes greater account of climate and environmental risks. I am glad that the Minister was able to be present to launch it.
Obviously, pension funds use the money paid into them every month to make investments in shares of companies, bonds, properties and other assets, which makes them enormously powerful players in shaping the economy, especially as they have significant investments in fossil fuel companies. However, if we want to keep climate change below dangerous levels, we need pension funds to fund and support a low-carbon economy by, for example, investing in clean technologies and low-carbon infrastructure projects. Moreover, today’s report shows that the UK pension funds have £3 trillion at risk from so-called unusable fossil fuel investments—fossil fuels which, if we are serious about keeping to our climate change commitments, we simply cannot afford to burn. That is a huge threat to the incomes of future pensioners.
In the UK an increasing number of voices are speaking out about the need for pension funds and others to divest themselves of fossil fuel assets. Operation Noah has launched “Bright Now”, a church divestment campaign whose first success came early this month when Quakers in Britain announced that they will disinvest from companies engaged in extracting fossil fuels, which made them the first UK Christian denomination to do so.
UK university students are increasingly engaged in divestment campaigns, as evidenced by the work undertaken by People & Planet. To date, there are 19 active divestment campaigns across the UK, including universities with large endowments: Cambridge, Oxford and Edinburgh.
Looking further afield, 70 of the largest pension funds in the US and the world issued a statement last week setting out their view that major fossil fuel companies may not be as profitable in the future, precisely because of efforts to limit climate change. They are asking for details on how the firms will manage a long-term shift to cleaner energy sources.
Here at Westminster, the recent Business, Innovation and Skills Committee report on the Kay review of the UK equity market and long-term decision making, which was produced earlier this year, recommended that the stewardship code should do more to address environmental, social and governance factors and systemic financial risks, as well as calling for more robust reporting on conflicts of interest.
I agree with the Minister’s comments this morning about the need for a fiduciary duty to consider climate and environmental risks to our pension system and for this to be in the mainstream, first, because that is important to reduce the risks to pension holders themselves, and secondly, in order to harness the huge contribution that pension funds can make to the massive investment that we need in clean energy infrastructure. New clause 12 and amendments 54 and 55 make modest proposals of ways in which the Department could make that happen.
New clause 12 would require the Secretary of State to
“commission an independent review of the implications of climate change and natural resource constraints for the sustainability of private pensions.”
The review should
“consider the implications for long-term investment outcomes for members of work-based pension schemes of potential…systemic risks posed by high levels of exposure to fossil fuels and other carbon-intensive assets…economic and physical impacts of climate change under various climate mitigation scenarios; and…constraints on the availability of non-renewable resources”,
such as food, land and water resources.
That proposal builds on a landmark paper by the actuarial profession that modelled the implication of resource constraints for private pensions and found that, even in the best-case scenario, pension outcomes are likely to be worse than predicted because the industry is not factoring in risks associated with those constraints on food, water and land. In the worst-case scenario, savers in the model of a defined-contribution pension scheme were only half as well off, while the defined-benefit pension scheme became insolvent. The new clause also builds on work by Carbon Tracker on unburnable carbon, which shows that if the aim is to secure long-term returns, divesting from fossil fuel assets would be a pretty sensible thing to do.
Sheila Gilmore
I want to speak on Opposition new clause 11 on annuities. The scandal of annuities was widespread and is well known. It has caused many people to suffer a much-reduced income in retirement.
The Minister, with all due respect, engaged in diversionary tactics when dealing with the Opposition proposal. He talked about other things that people might do when they are reaching retirement age and planning for their retirement. He spoke about other draw-down opportunities that might be better for them and said that people should get as much advice as possible. He failed to deal with the specific proposal.
It is not good enough simply to say that it would be good for people to have many different opportunities and a lot of advice. It is important to ensure that when people are deciding whether to annuitise, which they will ultimately have to do, they know all the options. It is not necessary for everyone to annuitise as soon as they reach retirement age; that decision can be postponed. The question is who should advise people about this matter and how we can ensure that people know all the options. The variety in the kinds of annuity that are offered and the deals that people can get is considerable.
Annuities are an important element in creating a retirement income that is adequate for people to live on. I urge the Minister to change his view and to accept that the arrangements that the Opposition are proposing do not fly in the face of his desire to explain other options to people and to give people those options. Many of the people who fare the worst do not have such substantial pension pots that they have a wide range of options and they cannot necessarily afford to postpone annuitisation, because they do not have much other income.
As ever, it is the role of Parliament and of Government to protect those who are in the weakest position. We must always have those people in mind. Those who have lots of options probably receive good advice anyway or could afford to pay for good advice. For many people, the whole matter of pensions is entirely baffling. Those people tend to go with the easiest or most obvious option.
The 20 to 30 years over which people—even those on relatively low incomes—have increasingly been expected to source their own pension provision and to take up pension options, such as the many money purchase or defined-contribution schemes that have been offered, have resulted in many people having very poor pension outcomes. One reason for that has been the charges and costs, which greatly reduce the pension pot that people end up with.
As the Minister has said, transparency is not enough. Transparency goes a long way, but action needs to be taken beyond that. I acknowledge that it is a step forward that on Report, although not before, we have a provision on capping charges. It would be better to be more specific about that and not to wait too long for a consultation process that could have been started a considerable time ago.
I know that other hon. Members want to contribute to the debate, but I want to say a little about the view expressed by the hon. Member for Gloucester (Richard Graham), who did not accept my intervention, that the last Government did not do much for pensioners. The subtext seemed to be that all our views and proposals could therefore be discounted. Hundreds of thousands of pensioners saw a substantial increase in their income, and therefore in their well-being and health, because of provisions such as pension credit that were introduced by the last Government. That is not to say that there were not problems with those provisions, or that they would have been needed in an ideal world.
Much of the debate at that time focused on restoring the earnings link because, unlike now, earnings were outstripping prices. Everybody who was campaigning on the issue focused on that. However, restoring the earnings link and letting things move up gradually would not have helped the many pensioners who had a very quick increase in their income and well-being. Many of those people were women, because women often end up being the poorest in retirement. Those people would tell us very clearly how important that was for them. It is not fair—indeed, it is quite wrong—to rewrite history and suggest that it was not helpful.
As I have said in previous debates, the fact that that expenditure was in place made the job of introducing the single-tier pension easier for the Minister. We will discuss the single-tier pension in due course. That expenditure is one of the underpinnings that has allowed him to introduce the single-tier pension, apparently without increasing the overall expenditure on state pensions. Indeed, it is predicted that the overall expenditure will decrease in the long term. I hope that everyone will accept that the Labour Government did a great amount of thinking and work on pensions.
We must remember that many people were paying into pension schemes of various kinds long before auto-enrolment, perhaps with the assistance of an employer or perhaps because they chose to do so themselves. We must ensure that we protect those people; otherwise they will lose out. The same is true of how we carry forward small pots for different individuals. There are still serious concerns among people who are knowledgeable about the industry that the Minister’s pot follows member proposal may lead to some people having to transfer savings that they already have into a scheme that has higher charges and, therefore, a less good outcome for them than the scheme that the savings are currently in or a scheme that they would have chosen to transfer their pension into.
I must respond to the general comments made by the hon. Member for Gloucester, who is no longer in his place, about the previous Government wanting to introduce change or reform. He referred specifically to pension credit and, inadvertently perhaps, he misquoted my right hon. Friend the Member for Edinburgh South West (Mr Darling)—he is my parliamentary neighbour; our constituencies touch at one point within Edinburgh—who said not only that the previous Government looked at the possibility of a system like universal credit, but that the overwhelming advice was that it was too difficult and would be extremely expensive to implement. The cost-effectiveness of such a system, and its benefit to claimants, was therefore put in some doubt.
It ill befits anyone to suggest that the current Government have solved the problem of universal credit. As we are seeing at the moment, all the predictions made by those who have previous experience suggest that such a system is proving extremely difficult, extremely slow, and no doubt extremely expensive. Whether it will benefit people receiving benefits we have yet to see. One must therefore be cautious in suggesting that the previous Government were wrong in not going ahead with such a scheme. We will see what transpires over the next few years although experience to date has not been all that healthy. I urge the Minister to consider annuities in a great deal more detail, as they are crucial for people’s retirement income and well-being during those years of retirement.
Greg Mulholland (Leeds North West) (LD)
I will keep my remarks brief. Other Members wish to speak to amendments, so I will ensure I give them time to do so. I will start with a few introductory comments because I am aware that, with today’s short time scale, it is unlikely that I will be able to make them on Third Reading. I pay tribute to and praise the role played by my hon. Friend the Minister. He has done an incredible job in taking through this hugely important, historic and complex Bill on an issue that we all agree is of utmost importance to our constituents and society. We can agree across the House that there is no one more capable, knowledgeable or expert in taking through this Bill, and as a Liberal Democrat I am proud that he has played that role and that the Bill will receive its Third Reading today.
Equally, I pay tribute to the expert and intelligent contributions made by Members from across the House in Committee. This complicated matter requires particular scrutiny, which it has received, and contributions from right hon. and hon. Members have rightly reflected that. Having said that, there is a need to redress the balance. Although scrutiny is important, so far this section of today’s proceedings has missed the point that this is an incredibly positive Bill that will make a huge difference to people who are looking forward to retirement, and give them certainty about the level of income they can expect. The Bill builds on things that the Government have already established, including restoring the earnings link to the basic state pension and introducing the triple-lock guarantee. That guarantee has helped increase the state pension by £12.50 a week since 2010, and delivered the biggest increase in the state pension in 2010.
As a whole, this historic and important Bill will deliver the single-tier pension to give a clearer, fairer pension to all and, crucially, a better pension to women and the self-employed. In the context of the amendments, it is equally important, as I sure the Minister would be first to agree, to take forward the challenge of auto-enrolment and ensure that private and occupational pensions are built in alongside the historic and positive changes to the state pension.
I say gently that, after the earlier mix-up, I am sure that the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and I would agree that we want as many “Gregg Ms” in Parliament debating these issues as possible. To refer back to something he said, however, I think he has been one of “Les Misérables” today. He has not found a single thing to praise—certainly not with a smile on his face or any enthusiasm—while doing his job, as an Opposition spokesman, which I acknowledge he has to do, of scrutinising. The fact that the Bill is a huge improvement on what the previous Government, whom he served, introduced, has not come across. They introduced auto-enrolment, which was welcome, but the Bill is a huge step in taking it forward.
Greg Mulholland
I will of course allow the hon. Gentleman to intervene. Perhaps he will acknowledge that improvement with a smile on his face.
Gregg McClymont
The hon. Gentleman has referred to me as being among “Les Misérables”. Is he aware that I am Scottish?
Greg Mulholland
I had the great pleasure of living in Scotland for three years—two years in Glasgow. When I moved up there, I was more able to understand French than a broad Glaswegian accent, but I rectified that. He will be pleased that I know how to pronounce the name of his constituency in its entirety—[Interruption.] Gloaming—the word he utters from his seat on the Front Bench—is an excellent Scottish word.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I suggest we move on to new clause 1 at some point.
Greg Mulholland
Thank you, Mr Deputy Speaker. May I remind the House what the improvements to auto-enrolment will do, which has not come out in the debate? Let us look at the figures. Some 1.6 million people have signed up for auto-enrolment. Of course, the ability to opt out remains, but rather than the expected one in three opting out, the figure is only 10%. Many millions of people are not currently saving for their retirement, but auto-enrolment will lead to between 6 million and 9 million people saving for the first time by 2018. That is crucial.
It is important to remember—this, too, has not been mentioned in the debate—that, as well as employee contributions, there will be support from employers and the Government. People aged 22 or over who are earning more than £9,440 a year will be automatically put into the pension scheme. Individuals who choose to save 4% of their income will benefit from an employer contribution of 3% and tax relief of 1%. It is important to welcome and emphasise that—it should be welcomed and emphasised by all hon. Members.
The key debate is on charging. The Minister referred to the OFT report that raised concerns about standards, particularly in legacy schemes. The Government have rightly amended the Bill to take that into account. I warmly welcome amendment 30 and his announcement of the consultation. I believe the consultation should be welcomed and not criticised.
I should gently make one point to my namesake, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East. He gave the impression that he was critical of the Government’s approach on consultation, but in amendment (a), which he has tabled, proposed new subsection (3) to Government new clause 1 states:
“Before making regulations under subsection (2), the Secretary of State must undertake a public consultation”.
It is odd that he is critical of the Government’s approach while calling for the very same consultation in black and white.
The hon. Gentleman was slightly wrong, or he misplaced his emphasis, in his suggestion that the Government are consulting rather than taking action. He knows—his proposal shows this—that consultation is a necessary precursor to legislation. It is important in getting legislation right. Without daring to put words into the mouth of the Minister, I think it is important to say that the intention is clear—that there should be a charge cap and that one will be introduced. The point of the consultation is not whether to introduce one: it is to find out the best way to do so. We should be clear about the subject of the consultation.
I have one question for the Minister, which he may be able to answer. The announcement on the consultation is imminent, although it is not happening as part of the Bill, so will we see him back at the Dispatch Box soon to make it? He is clearly the right and proper person to make the announcement, given his involvement in the Bill. I hope that he will be back, perhaps even in the next 24 or 48 hours, to announce it, and I and others look forward to welcoming that and the details that I am sure he will wish to lay out.
Despite this being a complicated subject in terms of the figures, the construct of the Bill and the pension sector as a whole, we all know that in the end this is about people’s future incomes and ensuring that they have a reasonable standard of living in their retirement, as well as more certainty in their retirement. The figures that the Minister provided about the current impact of the 1.5% and 1% charges were startling in showing just how much money people lose over the course of saving for their pensions. That is why a cap is right.
I say gently to the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East that in his 78-minute speech—at least, I made it 78 minutes, not 86 minutes—[Interruption.] I am being generous: perhaps the hon. Member for Gloucester (Richard Graham) thought it felt like 86 minutes. In any case, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East showed his knowledge of his brief, and I commend him for that, but it is slightly strange to hear his many recommendations for auto-enrolment when the previous Government would not even countenance those suggestions at the time of introduction. Nor did he acknowledge the problems with the 1% and 1.5% charges.
This has been a long and challenging process. Hon. Members on both sides of the House have made contributions that have been listened to and addressed. I look forward to the consultation. All of us with an interest in this issue should watch it closely and take part in it. We should also encourage others to take part. I shall end by congratulating the Minister, his team and his colleagues on what they have done to get this important Bill to this stage. It will lead to more certainty and fairer retirement incomes for the people of this country.
Katy Clark
In the short time available to me, I wish to focus on the issue of protected persons, which was raised in the debate by the hon. Member for Gloucester (Richard Graham), who also has many constituents employed in the nuclear industry. The electricity sector will be affected, as well as many other sectors. My hon. Friend the Member for Hayes and Harlington (John McDonnell) has tabled new clause 7 to address those affected in the railway industry, who are protected persons as a result of a privatisation that happened 20 years ago. Other industries affected include energy, water and mining. It is believed that some 52,000 people in this position will probably be affected by the Bill.
Many of my constituents have been in touch with me on the issue. They tell me that the Government have still not responded to the consultation on whether to exempt protected persons from changes to their pension schemes to reflect higher employer national insurance costs from April 2016. I will focus not so much on the detail of new clause 7, which would help those in the railway industry, or new clause 37, which would help those in other sectors, but on the principle they both address.
John McDonnell (Hayes and Harlington) (Lab)
My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) has addressed the spirit of new clause 7, which stands in my name. It may well be that we are not able to discuss amendment 37, but she has addressed the core principle behind the new clause.
Parliament has a moral responsibility that is separate from government. When Governments give promises to people, Parliament has a role in ensuring that they are adhered to. That is what new clause 7 is all about. As my hon. Friend said, on privatisation, the principle should apply across the piece.
We have discussed the background to new clause 7 before in a wider debate about what happened to the Jarvis workers when Network Rail withdrew its contracts and the company collapsed. As many involved in that debate know, the Jarvis workers, many of whom were not transferred to successor companies, suffered greatly: they lost their jobs and could not find alternative employment, and some have become nomads, circling the country trying to pick up work to bring in at least some income. In addition, they lost their pension protection, and that is what the new clause deals with.
As my hon. Friend mentioned, section 134 of, and schedule 11 to, the Railways Act 1993 enabled the Secretary of State to create a new pension scheme for the railways industry, to transfer the assets and liabilities of the old British Rail pension scheme to the new scheme and, above all, to protect the rights of members of the scheme once they became members of the new scheme. The debate was extensive. Few Members now were in the House then, but as Hansard shows, there were extremely heated, but detailed debates about the principle and detail of the legislation, particularly the protections for individual workers.
Three orders were introduced. First, the Railways Pension Scheme Order 1994 created the railways pension scheme, set out its rules and designated it as the successor industry-wide scheme replacing the British Rail pension scheme. Secondly, the Railway Pensions (Transfer and Miscellaneous Provisions) Order 1994 transferred the assets and liabilities of the British Rail pension scheme to the new railways pension scheme. Thirdly, the Railway Pensions (Protection and Designation of Schemes) Order 1994 set out the protection to be afforded to members of the British Rail pension scheme who transferred involuntarily to the railways pension scheme.
After months of debate in the House and negotiations between the Government and the sector unions, members of the British Rail pension scheme who were already pensioners or deferred pensioners were transferred to a special pensions section and had their rights guaranteed by the Crown. Their rights have never been put at risk and are not at risk, but that is not true for members still employed in the industry who were contributing at the point of privatisation. Their accrued rights were transferred to the section of the railways pension scheme applicable to their new employer, and a matching share of the assets from the British Rail pension scheme was also transferred to the relevant section, but nothing was done in those debates and negotiations, and eventually the orders, to protect their transferred rights in the event of their new employer becoming insolvent.
The actively contributing members were also given the right to participate in the new railways pension scheme on a basis that entitled them to accrued rights for future service and which was no less favourable than the basis of the former British Rail pension scheme. They have to contribute to the scheme to accrue their rights, and so must their employer, in the normal way. Active members are also protected if they move involuntarily between railway employers. In law, they must be permitted to transfer their accrued rights to their new employer’s section of the railways pension scheme and be permitted to accrue future pension rights on the same basis as before.
That also applies to involuntary transfers. As one franchise moves between companies, so do the pensions and the pension rights and responsibilities. A member who moves employer of his or her own volition retains the right to be a member of the pension scheme, but the right to accrue future service rights on the same basis is lost. So those protections were thought to be relatively robust at the time; transferring from the old British Rail pension scheme into the new scheme, and then, as the franchises moved and new employers took over the staff, their rights would transfer as well.
When a railways employer enters administration, its undertaking—the franchise—is usually transferred to another employer and, again, what happens is that the employees working for that employer are generally protected. Even when a company becomes insolvent and employees are transferred to a new company, if there are sufficient assets those are transferred and the employees are protected again. The problem we now face as a result of the Jarvis incident is what happens when an employer becomes insolvent and there are insufficient assets. That is what happened with the Jarvis workers, who were transferred to Babcock Rail or Volker Rail. Because the Jarvis section of the railways pension scheme is not in a position to transfer the accrued rights on a fully funded basis—because Jarvis never had the assets—a pension transfer could not be made at all. Instead, what the Jarvis workers now have to rely on is the pension protection fund, which does not provide what they would have gained as members of the full pension scheme.
This group of workers accepted the assurance of the Government on privatisation that their pensions would be fully protected. They have entered employment with a new employer and have paid their contributions, and they expect the same pension as every other worker around them in the industry. They are now faced with a pension that is significantly less. I think that that is grotesquely unfair. It certainly flies in the face of the promises that were given on the Floor of the House to railway workers when privatisation was being advocated and when legislation was going through the House.
Steve Webb
The hon. Gentleman is obviously very knowledgeable about the history of the matter. Can he point to a specific assurance that was given about what would happen in the event of the insolvency of the private employer?
John McDonnell
Let me deal with that. Incidents such as insolvency are often not predicted by Government. So what happens when a policy is advocated that involves a very straightforward commitment given by Ministers? Let me, if I may, read out a statement made by the then Secretary of State for Transport John MacGregor in May 1993 at the time of the debates on the privatisation of British Rail in response to a specific discussion on the British Rail pension scheme and its future. The Secretary of State said:
“My objective remains to preserve the security of rights enjoyed by pensioners and members while adopting arrangements to suit the new structure of the privatised industry. The proposals I am announcing today meet this objective.
I have decided that there should be set up, under the powers granted in the Railways Bill, a joint industry pension scheme for the railways. This will be broadly on the basis set out in the consultation paper ‘Railway Pensions After Privatisation’ issued in January. The governance and administration of the joint industry scheme will continue to involve both the employers and employees in the industry. We shall be discussing the detailed arrangements with interested parties…Existing employees’ rights will be protected by statutory orders made under the Railways Bill. The benefits offered to employees must be no less favourable than those in the existing scheme. There will be no penalties for involuntary breaks in employment. The present schemes under which the employer matches additional voluntary contributions made by employees…will continue subject to the existing right of the employer to withdraw matching for new or increased contributions.
Employees should be reassured by the statutory protection of these benefits…It is both natural and right that pensioners, pension scheme members and trustees should express their concerns and seek reassurance about pension arrangements in the privatised railway. The consultation document gave them the opportunity to do so: these decisions address those concerns and provide that reassurance.”—[Official Report, 20 May 1993; Vol. 225, c. 236W.]
John MacGregor was an honourable man who believed that he was giving every possible assurance that the existing pensions arrangements would be protected. Are we now saying that, just because there is no specific reference to insolvency in that statement, no such assurance was given in relation to those rights? If we did that outside this place, we would be accused of mis-selling a scheme.
Steve Webb
I am grateful for the chance to respond to the debate. I hope the House will forgive me if I focus my response to the shadow Minister on only the first hour of his speech, as I believe everything that followed had already been covered.
The gist of the remarks by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) was: when I was appointed in 2010, I should have looked at my in-tray, cleared it out and said, “It is essential we ensure value for money in workplace pensions.” By implication, action was needed because the previous Government, after 13 years, had not put pension savers in a position in which they would get value for money in workplace saving. Indeed, the hon. Gentleman suggested in his narrative that all the evils of pensions happened in the preceding 18 years of the Conservative Government. Again, by implication, Labour comes to power in 1997 ready to put right the failures of the previous Government; they have 13 years to have a go at it, yet the first job of a new Liberal Democrat Minister appointed in 2010 is to sort out the mess in pensions. There is, I think, a bit of a logical flaw in that argument.
I enjoyed the hon. Gentleman’s psychoanalysis of me—it is cheaper than therapy, that is for sure. He said, “We do not want consultation; we want action”. That was powerful, emotional and gut-wrenching stuff, except when we look at his amendment (a) we realise that, as my hon. Friend the Member for Leeds North West (Greg Mulholland) pointed out, in the midst of a clarion-call for action, it provides that, before action, or
“Before making regulations under subsection (2), the Secretary of State must undertake a public consultation”.
When the Government do it, then, public consultation is a substitute for action, but when the Opposition call for it, it means dynamism and standing up for the consumer. I do not know whether the hon. Gentleman will be a Minister one day, but he will know that Governments are required to consult before they legislate. That is what we are doing, and he can be assured, as my hon. Friend the Member for Leeds North West said, that consultation is a precursor to action.
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East said that pot follows member was not a good idea here because whereas there are not many pension schemes in Australia this country has very large numbers of them. He massively understates, however, the extent of concentration and consolidation in the pensions markets. The Office of Fair Trading has said that the four largest providers hold the majority of schemes, assets and members. The four largest providers on their own have 68% of the assets, 76% of the schemes and 61% of the members. The hon. Gentleman believes that the vast number of schemes means that pot follows member cannot possibly work because everybody is in a small pension scheme; actually, the opposite is true. Most people are in big pension schemes, which is why pot follows member works perfectly well. Consolidation is already happening—I mentioned the fall of a third in the number of medium-sized pension schemes—and, moreover, when we implement measures on scheme quality, which will include action on charges, that will trigger substantially more consolidation. So the hon. Gentleman is, in a sense, being backward-looking in referring to the large number of tiny pension schemes.
Gregg McClymont
I thank the Minister for giving way to me again: he is being very generous with his time. Is he not conflating providers with schemes? Is he not really saying that there are big pension providers, rather than schemes, in the United Kingdom? Big pension providers may service 200,000 schemes, but there will be many different schemes within their overall provision .
Steve Webb
That was powerfully put, if I may say so. However, the hon. Gentleman is trying to portray a workplace pensions sector that is ludicrously fragmented and all over the place, and in which most people are in tiny schemes. In fact, most people are in big schemes. The number of medium-sized schemes is falling, and the quality standards that we are introducing will accelerate an existing trend. Pot follows member will be even more fitting as time goes by, because we are overseeing and hastening a process of consolidation in the pensions industry.
I will not say too much about baked beans, with which the hon. Gentleman seems to be even more obsessed than I am, but the point of the baked beans analogy is that the baked beans market works. As the hon. Gentleman said, in the pensions market the demand side is weak, and leaving everything to market forces is not the answer.
The model that the hon. Gentleman has embodied in his amendments and new clauses is a very confused one. He seems to be suggesting that small pension pots will go off to the new aggregator schemes, which are really good, so a silly little amount of money will automatically go to a really good scheme, whereas in the case of large amounts, the quality standard will be more relaxed. I understand that his party advocates a 1% charge cap, but he wants a 0.5% charge cap for the aggregator. That would bring about bizarre circumstances in which people with serious amounts of pensions money could pay 1% charges, but people with small amounts in a scheme that they never chose pay 0.5%. How is that coherent? I am happy to give way to the hon. Gentleman, but he cannot explain how it is coherent because it ain’t.
We need to ensure that high quality standards apply not just to small pension pots in an aggregator, but across the board, so that when people’s pots follow them from scheme to scheme, they move from a good-quality scheme to another good-quality scheme. The hon. Gentleman quoted the National Association of Pension Funds. The association is, of course, right. If we were simply going to allow money to be transferred automatically from a good scheme to a bad scheme, we would have a problem, but because we will regulate for quality, no bad pension schemes will be used for the purpose of automatic enrolment.
The hon. Gentleman said that nothing was happening about annuities. In fact, the Financial Conduct Authority is reviewing them. It has already surveyed the rates offered to existing customers and those offered to customers accessing rates through the open market option, and is trying to establish whether profits in the internal annuities market are too high because too few people are exercising that option. Action on annuities is not just about what my Department does; the FCA is considering the issue actively, and we are working with our colleagues in the Treasury.
New clause 11 requires savers people to consult an annuity broker. The hon. Member for Edinburgh East (Sheila Gilmore), who is no longer in the Chamber, said that that would mean that people were given advice, but annuity brokers do not give regulated advice; people must pay for that. The broker will no doubt charge a fee, and those who want advice will either have to consult someone else or pay again for the broker’s advice.
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East wants to require those in charge of auto-enrolment schemes to send people to brokers who may charge, so those people may have to go elsewhere for advice. He says that that must happen in order for a scheme to qualify as an auto-enrolment scheme. We consider his to be a backward-looking and restrictive model. Let me give an example. What about pension schemes that annuitise internally—which, in other words, provide the annuity themselves? They may provide a guaranteed annuity rate, but in the hon. Gentleman’s world people will still have to go off to an annuity broker and shop around, rather than taking advantage of the product that is in the scheme already. That is an example of where he is trying to be over-prescriptive. [Interruption.] He says it is all in my head; I am not quite sure what he is talking about. The point is that we are trying to provide forward-looking provision for decumulation. Annuities is one model, with deferring taking a pension, for example, or draw-down, or enabling people to swap their annuities around, as my hon. Friend the Member for Gloucester (Richard Graham) said. We need to be examining all these things, but the hon. Gentleman wants to hard-wire into primary legislation a single model for a single product, which is not the future of decumulation.
Steve Webb
I will certainly give way to the hon. Gentleman, but will he just clarify this? He mentioned in his speech a 0.5% cap for the aggregator and said, “There won’t be many of these. We can control them. We can guarantee quality. Quality equals 0.5%.” Then he says—he has said this publicly before—“The Labour party favours a 1% charge cap for schemes people are members of.” So why does he want to have half the charging level for people’s small amounts of money in an aggregator than for people’s active pension funds?
Gregg McClymont
I cannot respond at length as this is an intervention, but the Minister continues not to understand our proposal for aggregators. [Interruption.] He says, “It’s funny, that is”, but he just does not get it and I will discuss it with him further. We are very pleased the Minister takes Labour’s proposals so seriously that he is spending so much time and effort responding to them, but the aggregators would not only deal with the stranded pots. Pension providers can become aggregators if they meet governance, quality and charge standards, so it would not be deferred members from small pots alone who would be in these schemes as there would be larger schemes than that.
Steve Webb
I would love to say that clarified matters. Let me put this challenge to the hon. Gentleman. He says we do not understand his proposals, but I have not seen his proposals. He has not set out specifically his alternative proposals, and I am spending time on this is because no one is arguing about the Government amendments; it is the Opposition amendments that we are arguing about.
I challenge the hon. Gentleman to set down in some detail what exactly he is proposing and what kind of pensions market he envisages, because one of the confusing features of his vision—as it were—is that it is something like the energy market. He seems to envisage a small number of very large regulated providers who presumably get together with each other and maybe do not always have the consumer interest at heart. That is what the energy market that his party leader oversaw has delivered for consumers. I do not want to see the same thing in the pensions market.
Gregg McClymont
The Minister says he wants to take great action through a cap on charges, but after three years all he can do is introduce a consultation whose findings he will publish at some stage in the future. That is not a Government taking action, and he is doing that from the position of having all the powers of government at his disposal. I do not think we should take any lessons from a Government who are acting so sluggishly in sorting out the problems in the private pensions market.
Steve Webb
When the hon. Gentleman says we will publish that at some point in the future and he knows we are publishing tomorrow, we can understand why he feels vulnerable on this issue. I am simply suggesting that his reluctance to set out an alternative model shows the paucity of alternatives being offered to us.
On a specific point, the hon. Gentleman suggested we could deal with only small pots created after Royal Assent. That is not correct. We have the power to specify a prescribed date, and that date would in the first instance be likely to be the point at which auto-enrolment began. So in the first instance automatic enrolment pots from when this process began, rather than when we secured Royal Assent, would be within the scope of pot follows member. I just want to put him straight on that.
Gregg McClymont
Again, the Minister says he has a power but does not tell us how he is going to use it; that is common throughout the Bill. Will he categorically state that all pots stranded since auto-enrolment will be included within the Bill?
Steve Webb
I thought that was what I just said. Let me be clear: we want to get this thing going. The hon. Gentleman raised the issue of the £10,000 pot size limit. Clearly I would like to go further, and we look at a £20,000 pot size limit in our consultation document, but we have to get the thing going. May I tell hon. Members who were not here at the start of the debate that he said he had sat and watched a video of a speech of mine? I commend him for that, as watching videos of me speaking shows real devotion to the world of pensions. In my speech last week, I made it clear that we see this as the beginning of a process. The pot size limit could go up and the scope of pot follows member could be increased, but we envisage beginning with auto-enrolment pots. I am clear about that, and there is no ambiguity: we are beginning with auto-enrolment pots.
The hon. Member for Brighton, Pavilion (Caroline Lucas), who is not in her place, asked when further action would be taken on fiduciary duties. For the record, in case she should happen to read it later—or watch a video—I can confirm that the Law Commission’s final report on the issue will be published in June 2014. Obviously, further debate will take place at that point.
I wish to respond to the related issues raised by the hon. Members for Hayes and Harlington (John McDonnell) and for North Ayrshire and Arran (Katy Clark). The hon. Lady asked about the important issue of the position of protected persons, on which we have consulted and on which I hope we will shortly reach a conclusion. We think that slightly more workers are involved than she suggested, but certainly tens of thousands of workers are affected. One challenge we face is that this is not just a matter for our Department. For example, if we place a cost on the energy employers through the abolition of the national insurance rebate and if we exclude their employees because they are protected persons, that has the potential to feed its way into energy bills. Her party leader has a view on energy bills, as do we, but the knock-on effect of a decision we take on energy bills has to be thought through. The same applies in the transport sector, to which the hon. Member for Hayes and Harlington referred. If railway and other employers cannot pass on through the pension scheme the costs we are imposing on them through the ending of the rebate, that will find its way through into fare increases and to consumers. So we have to think through a wide range of consequences of these decisions. That is why this is taking a while, but I appreciate the need to get on with it.
The hon. Gentleman said that there was a special case for the railway industry. His new clause 7 does not provide any protection in respect of any of the other privatised utilities; there is no suggestion that if any of those employers went to the wall pension protection should apply—it would just apply to the rail industry. If he feels so strongly about the justice of this issue for rail workers, why does his new clause not say that any protected person should be protected if the sponsoring employer goes bankrupt? I know his affiliation, and I have spoken to him in his role as leader of the group on rail workers, but if Parliament were to accept his new clause, we would have to deal with the question about why we did not do this for everybody else, too.
John McDonnell
I have a lot of time for the hon. Gentleman, but I find that beneath him. He knows that I have been involved in this campaign for a number of years, since Jarvis went into administration as a result of the network intervention. We faced a specific issue that could be dealt with very speedily; it does not have to await further consultation with other industries. That does not mean that I do not concern myself about other industries and other workers, but this particular campaign is related to my constituents and to a specific industry in which I have taken an interest over time.
Steve Webb
I know that the hon. Gentleman has taken a particular interest over time in this industry. My point is that his argument about justice—his argument that pension protection should mean not just the same terms and conditions, which was what it did mean, but protection against insolvency—should apply equally across other industries, and should not just apply to the rail industry, if that is what he believes. When John MacGregor made the promises that the hon. Gentleman quoted, he was saying that the terms and conditions of the pension scheme would be the same with the privatised employer as they were with the state employer. Subsequently, a pension protection fund was created. Jarvis paid pension protection fund levies and that is why the employees are in the pension protection fund. The three privatised railway firms paid—
John McDonnell
On a point of order, Mr Deputy Speaker. There comes a time when accuracy is important in this House. John MacGregor, as Secretary of State, gave assurances that when British Rail was privatised pensions would be protected. He said not that they would have the same protections as private companies but that pensions would be protected. There is a point of accuracy, so that Ministers do not attempt to mislead this House.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I am sure that nobody would deliberately mislead this House—let us clear that one up. That is not a point of order but it has certainly been corrected for the record, which will be read tomorrow.
Steve Webb
Further to that point of order, Mr Deputy Speaker. That was not a correction, because what I said was not incorrect.
Mr Deputy Speaker
I did not say that. I also said that the first point was not a point of order, and neither is the Minister’s.
Steve Webb
Let me reiterate: Jarvis and the other firms paid the pension protection fund levy.
Mr Deputy Speaker
Order. I understand that tensions are running high, but we will have an orderly debate.
Steve Webb
Jarvis, as an employer, was paying an insurance policy. It was paying into a fund so that if it became insolvent its employers would get the payout, and that is exactly what has happened.
The pension protection fund was created nearly a decade ago and every year Jarvis paid in on behalf of their employees so that in the event of insolvency those employees, and those of the other two former nationalised rail industry firms who were spun off, would get protection. That is exactly what has happened. In other words, to come along in 2013 and say, “Oh no, we did not expect this to happen. We should get special treatment and we should get 100% protection,” when other people who work for private firms do not get that when they pay the protection fund levy and get a payout—[Interruption.]
Steve Webb
Other people who work for private firms get a payout according to how the pension protection fund works.
The hon. Member for Edinburgh East, who is not in her place, talked about annuities. She seemed to think that requiring people to go to an annuity broker was the answer to the problems and I think she missed the point. We want to see a much wider range of options for people when they want to turn their pension pot into a pension income. Rather than putting into primary legislation a single model for a single product, we must ensure that people have choices so that they can choose an annuity, consider draw-down products or consider deferring and so that they can try to ensure that they get the best value for money. I certainly accept that the annuity market is not working as well as it should.
This debate has gone on for the best part of four hours and the recurrent theme has been that when the coalition Government took power in 2010, there was a huge amount of unfinished business on automatic enrolment. What happened with small pots, charge caps, decumulation and governance had not been dealt with. The Opposition have spent the past however many hours asking how we could possibly not have acted on all the issues they failed to address in 13 years, but we are addressing them. We have taken effective action and tomorrow we will take a further step when, for the first time, we consider capping the charges on automatic enrolment pension schemes. This Parliament will be seen to implement vital pension reform in the state and private sectors and to be doing the job properly and I commend our amendments to the House.
Question put and agreed to.
Clause read a Second time.
Amendment proposed to new clause 1: (a), at end add—
‘(2) In this section—
(a) “charges”; and
(b) “transaction costs”
shall be defined in regulations by the Secretary of State.
(3) Before making regulations under subsection (2), the Secretary of State must undertake a public consultation, which must include the views of—
(a) the Financial Conduct Authority; and
(b) the Pensions Regulator.
(4) With reference to paragraph (2)(a), any public consultation must consider the different elements which comprise charges and not just the annual management charge.
(5) Such charges, together with any transaction costs incurred by the funds in which qualifying schemes are invested, shall be declared on an annual basis to the Pensions Regulator, which shall maintain a public register thereof.
(6) The Secretary of State shall by regulations set the standards by which pension schemes must declare charges and transaction costs for the purposes of the register and for declaration to their members and their members’ employers.
(7) The standards set out in regulations under subsection (6) shall be reviewed every three years.
(8) The Secretary of State shall have power to make regulations ordering other disclosure arrangements on administration charges.
(9) Regulations under this section may not be made unless a draft has been laid before and approved by resolution of both Houses of Parliament.’.—(Gregg McClymont.)
Question put, That the amendment be made.
The House proceeded to a Division.
Mr Deputy Speaker (Mr Lindsay Hoyle)
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
Mr Speaker
With this we will debate the following:
Government new clause 4—Preserving indefinite status of certain existing assessed income periods.
Government amendment 13.
Steve Webb
Unlike the debate on the previous group, the debate on this short group need not detain us too long. It relates to a feature of the state pension credit system known as the assessed income period. The basic idea was to avoid the need for people on pension credit to keep reporting changes in their circumstance—the basis was that older pensioners in particular have less frequent changes of circumstance. The basic idea of the assessed income period was a perfectly reasonable one but, unfortunately, it has not worked in practice and has raised a lot of issues.
To give an example, if someone in retirement inherits substantial wealth from the generation above them, they can continue to get pension credit for five years or even indefinitely, despite having very substantial wealth. If someone retires, has an assessed income period and then starts to draw a new stream of pension income, they can go on getting pension credit despite the fact that their living standard is well above the level of pension credit. We have given this a good go, and it was a reasonable thing to try, but in practice it has created anomalies, with payments to people who, if they were assessed on their current circumstances, would not be entitled to benefit.
Mr Speaker
With this it will be convenient to discuss the following:
New clause 6—State pension entitlement for women born between 6 April 1951 and 5 April 1953
‘(1) Women born between 6 April 1951 and 5 April 1953 have the right to choose to receive their state pension and associated benefits under the new state pension system, set out in Part 1, from its introduction.
(2) The Government must ensure information about the full range of entitlements under the old state pension rules and the new state pension is available to allow women in subsection (1) to make a comparison of total weekly income.
(3) The responsibility for making a choice under subsection (1) lies fully with the individual.’.
New clause 8—Review in relation to women born on or after 6 April 1951
‘(1) The Secretary of State shall conduct a review to determine whether all women born on or after 6 April 1951 should be included within the scope of the new state pension arrangements established by this Act.
(2) The Secretary of State must prepare and publish a report on the review within six months of Royal Assent of this Act and must lay a copy of the report before Parliament.’.
New clause 13—Pensionable age: differential effect in England, Wales and Scotland
‘Part 2 of this Act shall not come into force until the Secretary of State has laid a report before both Houses of Parliament containing an assessment of the differential effect and impact of the pensionable age in England, Wales and Scotland due to varying levels of life expectancy and gross value added.’.
Amendment 1, page 10, line 1, leave out clause 20.
Amendment 35, page 11, line 34, clause 24, leave out ‘An’ and insert
‘With the consent of the trustees, an’.
Government amendments 2 and 3.
Amendment 37, page 11, line 40, clause 24, at end insert—
‘(c) a scheme in respect of any of its terms which relate to persons protected under the terms of—
(i) the Electricity (Protected Persons) (England and Wales) Pension Regulations 1990;
(ii) the Electricity (Protected Persons) (Scotland) Pension Regulations 1990;
(iii) the Electricity (Protected Persons) (Northern Ireland) Pension Regulations 1992;
(iv) the Railway Pensions (Protection and Designation of Schemes) Order 1984;
(v) the London Transport Pensions Arrangements Order 2000;
(vi) the Coal Industry (Protected Persons) Pensions Regulations 1994; or
(vii) the nuclear industry employees protected by Schedule 8 of the Energy Act 2004.’.
Government amendment 4.
Amendment 36, page 12, line 10, clause 24, at end insert—
‘“trustees or managers” has the meaning given in section 178 of the Pension Schemes Act 1993 and regulations made thereunder.’.
Government amendments 14 to 20.
Amendment 34, page 79, line 5, schedule 14, leave out paragraph 11.
Government amendments 21 to 24.
Sheila Gilmore
One of the issues that has come up in the course of all the debate about the single-tier pension is the decision that the Government have taken to bring to an abrupt end to the provisions that previously existed for women in particular—I shall talk primarily about women, although men could be in this position—to be able to derive a pension or years towards a pension from the contributions of their spouse. That dates back to a different world. When the state pension system was set up in the post-war period, there was an assumption that the standard pattern for married people was that one person, normally the man, would be the main breadwinner, and the woman would spend considerable periods out of the labour force, and perhaps not even work at all after marriage. Indeed, although they were about to go, there were still marriage bars on certain types of employment, so time out of employment was not just a question of choice; it was sometimes a question of necessity.
Things have changed and, although it can still be a necessity, for many women the amount of time out of employment can be very short. The arrangement in the original proposals was that a woman could receive a derived pension from her husband’s contributions—currently approximately 60% of the full state pension—or receive benefit if she was widowed or divorced. For someone widowed after retirement who was receiving only the 60% pension—sometimes referred to as the married couples pension when both bits are put together—it would be increased to a full single person’s pension, regardless of whether she had made contributions during her working life. For those who are divorced, there is currently provision in the system to inherit and carry over a spouse’s contribution record if it is better than one’s own. That can be beneficial to women, and some men, in building up a pension record.
Other changes that have taken place include crediting certain types of contribution that are not entirely financial. As well as the credits people receive during periods of unemployment when they are claiming benefit, successive Governments have introduced credits for periods of child care and for caring for other relatives, and that can make up some gaps. There are still some people—a decreasing number, without a doubt—who will end up in a position where they do not build up sufficient contributions in their own right. If the right to obtain these so-called derived benefits is taken away, there will be a group of people, primarily women, who, post-2016 when the new arrangements come in, will have less than they would have expected to get before that date. They will be in a worse position than they would have been previously, and that will have all sorts of consequences.
People have reasonable expectations of the rules. Age UK gave an example of someone who had specifically asked the Department for Work and Pensions for advice on whether she should start making contributions relatively late in her working life. She was told not to do so, because she would not be able to work to receive nearly as much as she would be getting in any event. That advice was given in good faith and at the time she accepted it in good faith, but it is now too late for her to make up the difference.
The Government estimate that there are 40,000 women in this position. I am not sure whether there is certainty about that figure, because I do not know whether a full survey has been carried out. However, 40,000 is not a huge number. New clause 5 asks for a full review to ascertain how many women are in this position and what the cost would be of allowing them to continue to benefit from derived rights for a transition period—it would not be for ever.
Mr John Redwood (Wokingham) (Con)
Does the hon. Lady have any idea how much money, on average, these ladies might be losing?
Sheila Gilmore
I do not know off the top of my head, which is why I am asking for a review. We might be talking about 40,000 women who clearly will not be getting a full pension, but certain of them will have made some contributions; it is not that they will have no contributions. The Work and Pensions Select Committee looked at this and recommended transitional arrangements for those within 15 years of the state pension age when the new arrangements came into force. It is not for ever, it would not go on and on, with a very long tail; but it would provide for those who quite reasonably made plans on the basis of particular expectations.
I have heard two arguments from the Government. The first was a generalisation about how the world had changed. Yes, of course it has changed, and we are not talking about most or all women doing this for ever. Just saying, “Well, the world’s changed”, is not a good enough answer to the fact that some women will suffer detriment if transitional arrangements are not put in place. The second argument was that apparently—I am not sure any figures have been offered up—an increasing number of these women were living abroad. It conjured up images of women much younger than their husbands and living abroad—I do not know whether the Minister had Filipino brides in mind. Nevertheless, it cannot be beyond the ingenuity of the DWP to ensure that people do not take undue advantage. Like I said, these arrangements would not last for ever.
There are a variety of reasons why somebody might not have contributed. They might have made a positive choice not to contribute or they might have been doing voluntary or care work before credits were allowed or without appreciating that they were allowed—we know that a lot of people are eligible for carer’s credits who have not claimed them. There are a variety of reasons. Others will have been in very low-paid or short-hours part-time work and earning below the level of contribution, and they might have concluded that it did not matter too much because of the derived right.
We debated this matter in Committee and I hope that the Government will this time be prepared to accept my new clause. Then, when we have carried out the review, a decision could be made about whether to proceed with transitional arrangements.
Sir Peter Bottomley (Worthing West) (Con)
I hope the hon. Member for Edinburgh East (Sheila Gilmore) will forgive me if I do not follow her line of debate, but we have less than 50 minutes left to deal with something that is complicated, important and a matter of justice.
I pay tribute to my right hon. Friend the Prime Minister for saying in the Commonwealth that the Commonwealth is about fairness and justice, and I am going to argue for a significant review of what we do with overseas pensioners. I hope the House will forgive me for reading out a paragraph from Lord Hoffmann in the Carson case concerning regulation 5 of the Social Security Benefit (Persons Abroad) Regulations 1975:
“The general rule, subject to limited exceptions, has always been that social security benefits are payable only to inhabitants of the United Kingdom. A person ‘absent from Great Britain’ is disqualified: section 113(1) of the Social Security Contributions and Benefits Act 1992. But there is a power to make exceptions by regulation. Regulation 4 of the Social Security Benefit (Persons Abroad) Regulations 1975 (SI 1975/563) (deemed to have been made under the 1992 Act) makes such an exception for retirement pensions. But regulation 5 makes an exception to the exception. In the absence of reciprocal treaty arrangements, persons ordinarily resident abroad continue to be disqualified from receiving the annual increases.”
The House might expect that pensioners abroad who do not get the increases are the exception; were the House to think that, it would be wrong. Some 650,000 overseas pensioners get the increase, and they include pensioners in countries such as the United States and Jamaica. More than 500,000—it could be 530,000 or 570,000—do not. They are predominantly in Australia, Canada, New Zealand, South Africa, India and Pakistan, with Yemen and Japan being two others in the top ten. No one can claim that there is rhyme or reason in that.
Mr Redwood
Does my hon. Friend know whether the requirement to uprate in the European Union countries is a European requirement that the Government can do nothing about or a Government choice?
Sir Peter Bottomley
The Government chose and Parliament endorsed that we would have free movement of people and of benefits in this sense, but the Secretary of State will no doubt be able to answer my right hon. Friend with greater certainty. The essential point is that as a country joins the EU—or even EFTA—the entitlement to increases in pensions comes with it.
When preparing my thoughts on this matter, I might have anticipated that the Prime Minister would say that he would give consideration to calls for a wider review of the issue. I might also have expected him to conclude that he was not minded to pursue such a review at this time. That is the gentlest form of saying no that I have come across.
I suspect that, as and when we extend voting rights to British nationals living overseas, either for a period of 15 years or for even longer, as many other countries do, our Members of Parliament who represent those overseas resident voters will start putting the pressure on, and that change will come. The Prime Minister might be anticipating that. He might see the sense and justice of such a change, but, given his position, he has to say no to a lot of popular causes. Perhaps the justice element for which is so rightly praised in the Commonwealth has not quite come to his mind yet.
In fact, I received a letter from the Prime Minister about half an hour ago confirming what I had anticipated. He has said that
“the case for not departing from the position of successive Governments is clear.”
I have already pointed out how the position has changed in respect of the reciprocal arrangements. His letter goes on:
“To do so would cost hundreds of millions of pounds at a time when the pressure on a welfare system is considerable and when we are asking many people who live in the UK to make sacrifices.”
That could be an argument for cutting off increases for all overseas pensioners, but that is not going to happen. The anomaly will continue. It has carried on from 1972 to 2013. If I am still here in 20 years’ time, will Ministers still be trotting out the same arguments that they used in 1972? I jolly well hope not.
I pay tribute to the leaders of the International Consortium of British Pensioners in Canada and Australia. They have had work done by Oxford Economics to make the case for the health care savings. We all know that the majority of costs to the national health service are incurred by people in the last years and weeks of their lives. Which of the people living overseas are the most likely to return to this country for their end-of-life health care? I suggest that it is those living in the United States, whose insurance might have run out and who cannot meet the costs, and people in Europe who might want to return to this country to be treated in a health service they know and in a language they are used to. I doubt that many people would come back from New Zealand, Australia, South Africa or Canada.
The health care question was what prompted us to call for the whole of Government review. I pay tribute to my hon. Friend the Member for North Thanet (Sir Roger Gale), who came with me last week when the Prime Minister very kindly gave us the opportunity to put some of these points to him.
Sir Roger Gale (North Thanet) (Con)
My hon. Friend has already paid tribute to the leaders of the campaign in Canada and Australia. Jim Tilley has told us of the case of an English lady in Australia who is living on £6 a week. The rest of the money that she has to live on is provided by the Australian Government, because our Government cannot give it to her. Does that make my hon. Friend feel proud?
Sir Peter Bottomley
I find that shaming.
One of the reasons to be active in public service is to identify injustice and to work against it. It might take months, years or decades, but this is a fight for which I would like to see more support from the Opposition and from those on my own side. My hon. Friend has mentioned Jim Tilley. I want to mention John Markham, the director of public affairs for the International Consortium of British Pensioners, who is based in Toronto, in Canada. He has pointed out:
“Approximately 10% of all pensioners live abroad, roughly 1 million people. Of that million, 50% receive annual increases to their state pension, and the other 50% do not, solely based on country of residence.”
That arbitrary, historical decision is unjustifiable.
I am not going to quote back to the Minister what he said about this before he became a Minister. Some people have to go through that embarrassment, but I do not want to subject him to it. I will say, however, as we approach Remembrance Sunday and Armistice day, that the countries in which we have shared war memorials are those most likely to be affected. They are the countries whose people served in the former British empire and Commonwealth armies, and those people are the ones who are not getting the increase.
John Markham goes on to say:
“The recent select Committee on the new single tier Pension Bill declared it to be an anomaly that should be fixed.”
I have mentioned the Oxford Economics report. The Department for Work and Pensions might say that that was just a small survey, and that the benefits would take years to accrue. Well, the sooner we start, the better. The argument for doing it is not that it will pay this country, but that it is right.
I could go through the other arguments used by Julian Ridsdale, but there is restricted time for the debate, and it would be interesting to hear what the Labour Front-Bench team has to say. I know, too, that others wish to speak on this issue and to other amendments in the group. Let me declare the best judgment at the end of this debate. We will say no to clause 20, but we will not force a walk-through Division. That is a way of illustrating what we feel, without unduly taking up the House’s time, when Third Reading is also ahead of us. I hope the House will understand that.
Caroline Lucas
I am pleased to follow the hon. Member for Worthing West (Sir Peter Bottomley), who has spoken passionately about the importance of fairness and justice. I believe that those very same principles underlie the issue I want to raise this afternoon. I want to speak to my new clause 6, while confirming my support for new clause 8. Those new clauses both relate to the group of women who will not qualify for the single-tier pension, whereas men with the same date of birth will.
One of my constituents, Catherine Kirby, has been a passionate and tireless champion for women in her position. Understandably, she feels that she and others in her situation are faced with a dual disadvantage of being subject to an increase in the state pension age under the 1995 Act, while being denied eligibility for the single-tier pension. Not all, but some of these women will be left with a lower weekly state pension compared with men of the same age. No wonder my constituent, like many others, believes this creates unnecessary and unjustifiable inequality and discrimination.
The Minister has said in the past that women in the position of my constituent should defer, but for those on low incomes who are unable to work and do not have a convenient pot of money, that is not an option. He has explained in the past that because the new system excludes additional benefits such as for bereavement, it is not possible for the Government to tell women what would be best for them. For some women, however, that is simply not relevant to their situation. They already know that they would be better off—by £15 a week, in Catherine’s case, which is significant.
The Minister has said that, over a lifetime, most of these women would get more than the average man with the same date of birth, but theoretical lifetime averages are simply irrelevant to the difficult financial situation faced by my constituents and others in the real world. It is their weekly pension income that matters, and I believe that that is what should occupy our attention as their representatives.
I will support Labour’s new clause 8, which calls for a review of whether all women born on or after 6 April 1951 should be included within the scope of the new pension arrangements. That is not my preferred option, however. Not all will definitely lose out, and I do not think we necessarily need a review to find a solution that works for the relatively small but important number of women who may lose out.
My new clause 6 simply gives these women the right to choose to receive their state pension and associated benefits under the new state pension system set out in part 1 from its introduction in April 2016, if they judge it to be in their best interest to do so. It would not require the Government to tell them what to do, merely to ensure that information about the full range of entitlements under the old state pension rules and the new state pension is available to allow women to make a comparison of total weekly income. The responsibility for making a choice would rest fully with the individual.
I believe this group of women deserve a much better deal, and if that means upgrading to the single tier, that should be permitted. If the Government do not do that, it will be an example of blatant discrimination. It would not be difficult to remedy the situation and it would make a huge difference to the women involved. This group of women certainly deserve better. They are the generation who campaigned for equality for women. They began their working lives being discriminated against; the Government can and should give them the right to be included in a new single-tier pension to ensure that they do not end their lives feeling discriminated against, as well.
Sir Roger Gale
Jim Tilley’s old friend, the British widow living in Australia on a frozen pension of less than £7 a week, is not a statistic. She is the difference between what is right and what is wrong. If this country cannot do what is right, I have to say that I feel a great sense of shame. The denial of the money to people who have in many cases served their country and fought for it—some of their friends and families have died for this country—and who have worked here and paid their taxes, is indefensible. Their case is morally right.
John McDonnell
I wholeheartedly support the amendment tabled by the hon. Members for Worthing West (Sir Peter Bottomley) and for Brighton, Pavilion (Caroline Lucas). I think that there are injustices in the Bill that need to be addressed, and my amendment 35 seeks to do that as well.
The amendment returns us to the issue of the commitments that were given to people on privatisation. The Minister seemed to use a “divide and rule” tactic when he asked why I was taking the issue up purely on behalf of railway workers, as opposed to workers overall. There is a railway estate in my constituency, and I have taken an interest in the industry for nearly 40 years. I know what a sense of grievance exists among railway workers. The promises that they were given on privatisation are now being torn up by the Government. I do not like that “divide and rule” tactic—I want the same protection for all workers—but we can deal with the issue of railway workers tonight if the Government are so willing.
This is what John MacGregor, the then Secretary of State, promised in 1993. He said:
“Existing employee rights will be protected by statutory orders made under the Railways Bill.”
He described those rights as “indefeasible”. He went on to say:
“There will in addition be specific safeguards, in franchise contracts, to cover the transfer of pension funds when a franchise changes hands…Orders for setting up new schemes, transferring funds and protection of existing employees will be subject to the affirmative resolution procedure in both Houses.
He gave that assurance to members of all parties in the House. He continued:
“Orders relating to schemes and funds will be the subject of statutory consultation with the trustees.”—[Official Report, 20 May 1993; Vol. 255, c. 235-6W.]
That commitment was given, in the House, to all Members of Parliament, to all members of the pension fund and to all workers in the industry, but clause 24 will tear it up. The clause will allow employers who sponsor the railway pension scheme and the Transport for London pension fund to amend the rules to increase member contributions, reduce member benefits or both, and those who will be affected are the people whom we have described as protected persons. Employers will be able to do that without the consent of trustees or scheme members, and without taking any cognisance of the views of the House. That is unacceptable.
A promise was given by Conservative Ministers to those workers and members of the pension fund, and to future members of the fund, and that promise was accepted throughout the House. It was understood that changes in circumstances might require changes to be made in pension schemes, but the promise of that added protection reassured people. John MacGregor was right to say that such additional protection was needed. He said that trustees would be consulted, that the House would then take a view and, through an affirmative resolution, would be able to reach a decision, and that the trustees’ views would be laid before the House. However, the clause enables employers to tear up schemes, increase contributions, and reduce benefits.
It is also significant that there are 106 different employers in this sector now. If one changes the scheme, what happens when franchises are taken over? What happens when employees seek to change their employment from one company to another? We are introducing immense complexity into the overall industry, which I think will undermine the pensions protections that this House gave assurances on in 1993. This is a matter of morality and honour. To introduce this measure flies in the face of every undertaking made to these workers. My amendment would at least ensure that the trustees are involved in any decisions about the future of pensions in their sector. To be frank, I do not think it is much to ask for this House to ensure, and enforce, that Governments abide by their promises.
Gregg McClymont
I want to speak in particular to our new clause 8 and amendment 37. We are now discussing the provisions in this Bill that relate specifically to state pensions rather than private pensions, and it might be of some significance that the issue of protected persons and protected pension schemes is emerging in this context.
We have listened to the very powerful case made by my hon. Friend the Member for Hayes and Harlington (John McDonnell), and one cannot but feel that there is a specific set of circumstances around the privatisation of nationalised industries. My hon. Friend has eloquently focused on the railways, but amendment 37 deals with the issue of former nationalised industries in the round, and there are also energy schemes and some coal schemes.
We are in a curious situation. The Minister is giving himself the power to keep the promise made to the members of those schemes, but he has not yet said whether he will use that power to honour that promise. This is a Pensions Bill and there are 50,000 or so remaining members of these pension schemes, so it is curious that he has not yet said what he intends to do. Will he do so in his reply?
Katy Clark
Does my hon. Friend agree that the difference is that these privatisations were hugely contentious and there was huge opposition to them, and the pension promises were made by politicians to try to ensure that these things happened? That puts those situations in a different category from many of the others we are talking about.
Gregg McClymont
I thank my hon. Friend for that intervention. I agree that there is a specific set of circumstances around these pension schemes. I am certainly not saying that accruals and the terms and conditions of a pension can never be changed in any circumstances, but there is a specific set of politically charged circumstances to do with the privatisation of these industries. Specific undertakings were given to the members of those schemes to encourage them to accept, if not actively support, the privatisation of the industries in which they worked. I urge the Minister to tell us this evening, if he can do so, whether he intends to use the power he is giving himself in the Bill to honour the promises made to the members of those schemes. If he will not do so, we will force a Division to test the opinion of this House on amendment 37, which would mean that the promises made to the 50,000 or so men and women in those protected schemes were met.
I am conscious of the time and allowing the Minister appropriate time to respond to the broader debate. I noted closely what the hon. Member for Brighton, Pavilion (Caroline Lucas) said about her new clause 6 and her belief that the 700,000 or so women in the group born between 1951 and 1953 will not get the new state pension, because they are the last pension cohort before the equalisation of the pension age, whereas men of precisely the same age will get it. Let me put it in simple terms: if there were twins, one male and one female, in that age cohort, the male twin would get the new state pension in 2016 but the female twin would not, having retired a little earlier. Such issues do emerge when we are involved in pension reform. The Minister and I have gone back and forth on the matter on a number of occasions, and I will not anticipate his arguments because we have gone through them some time before. However, we have to look at the issue in the context of a view that has grown up among many women that this Government’s attitude to their pension provision is not as generous as they believe it should be.
When considering the 2011 legislation, we had to deal with the issue of a significant number of women having very little time to prepare for retirement and short notice. They would have had to work for longer but some of them would have had only five years to prepare for that. They were five years from when they thought they would be retiring and then found out that they might have to work for seven more years. I am pleased that the Minister made a concession on that, although he did not go as far as we wanted. That group of women—a slightly different group from those we are dealing with here—who were also approaching retirement, felt that they were being unfairly treated. Not only did they feel, rightly, that they were being unfairly treated, but we have also had to deal with the Minister’s approach to auto-enrolment, which is excluding more than half a million women—and rising—from the benefits of auto-enrolment, because of the raising of the threshold for auto-enrolment in line with the personal allowance. A general sense has developed that this Government do not quite get it with women and pensions.
Steve Webb
The hon. Gentleman’s new clause 8 calls for a review. Obviously, having a review is not the same as having an opinion, so what does he actually think should be done?
Gregg McClymont
I certainly think the Minister should undertake a review.
The perception I am talking about has developed, so let me quote something that the Minister might be aware of. I cited it a couple of years ago, but he has probably forgotten.
Julie Hilling (Bolton West) (Lab)
Before my hon. Friend moves on, I wonder whether he would be interested to hear the Minister’s response to my constituent Maureen Davenport. The Minister said that the maximum state pension under the new system will be “significantly lower” than under the current system. He also said:
“In some ways the new system will be less generous for those who retire after April 2016”.
That is somewhat different from the fanfare and the Government saying that these new pensions would be wonderful for everybody.
Gregg McClymont
I thank my hon. Friend for that powerful intervention. There has been an issue of this Government, certainly in the early stages, overselling some of the things they are doing.
The Government would be doing themselves a favour by undertaking this review, given the sense among significant groups of women that the Government do not care enough about their pension provision. In 2005, in the days when the Conservative party was still trying to say that it had changed, the Prime Minister said:
“If you put eight Conservative men round a table and ask them to discuss what should be done about pensions, you’d get some good answers…but what you are less likely to get is a powerful insight into the massive unfairness relating to women’s pensions.”
It is in that context—the sense that the Government have so far had their eye a little off the ball in respect of treating women fairly on pensions—that I intend to test the House’s opinion on our call for a review by the Government of these provisions.
Dame Anne Begg
These amendments can all be categorised as trying to do something for those who have lost out as a result of the Bill. Many of the issues were picked up by the Select Committee on Work and Pensions during our pre-legislative scrutiny of the Bill and it is a little disappointing that the Government have not always taken our advice on how they might be able to sort out the outstanding problems. One such problem, which has already been mentioned by my hon. Friend the Member for Edinburgh East (Sheila Gilmore), is that of inherited rights, usually those of women who expected to get their part of their state pension through their husbands’ contributions. Those who are nearing retirement would have no opportunity to meet the de minimis rule of 10 years if they were to start to make contributions now. Our suggestion was that there should continue to be some transitional arrangements for those within 15 years of state pension age.
Although it does not fall within this group of amendments, there is also the issue of those people who fell below the national insurance contribution threshold, particularly those who have had two jobs that together would have added up to take them above the threshold but have not. Perhaps the Minister could give us some hint of what might happen to that group, who are again predominantly women and will continue to lose out. Of course, there is also new clause 6, which makes a request on behalf of the group of women born between 6 April 1951 and 1953. They obviously feel hard done by.
There is also the group who have so-called frozen pensions, who have been so eloquently described this afternoon. We did not recommend that the Government should roll back the clock for those who have frozen pensions, but we should not import into a brand-new system the anomaly that those in Canada have their pensions frozen whereas those in the United States do not. That did not seem fair to us as a Committee, and we hoped the Government would act.
Greg Mulholland
I thank the hon. Lady for giving way and for the contribution that her Committee continues to make. Let us face it, those of us who have been in this place for more than one Parliament have been hearing about frozen pensions for all that time—some of us for many years. Rather than our trying to solve it today through this Bill, is it not time that all the parties sat down together to discuss what commitment could be made for the next Parliament, regardless of who gets in, rather than the next Government being able to say “Well, the last Government didn’t do it, so we’re not going to either”?
Dame Anne Begg
I think that may have been the problem with this Government and with the previous Government. Any Government who come in do not want to do it. The Select Committee’s straightforward recommendation was that the new system should not contain the same anomaly as the old system. I still stand by that. I hope the Government are listening and will change their mind and I suspect that the House of Lords will have quite a lot to say on this subject.
Hywel Williams (Arfon) (PC)
Let me say first of all that I support amendment 1, which I was very glad to put my name to.
My new clause 13 delays introducing part 2 until the Secretary of State has reported an assessment of the differential effects and impacts of the pensionable age in England, Wales and Scotland. People are now living longer and the better-off live longer than the worse-off, who work more years and start working earlier. The latest evidence suggests that the gap is widening and that is certainly the case as regards the differences between England and Wales. Wales has the lowest gross value added of the UK nations and regions. Welsh workers in general are less able to save for their pensions, which means that many people in Wales are reliant on the state pension. Life expectancy in Wales is also lower than it is in England. In my constituency, life expectancy is 78.3 years for men whereas in Dorset it is 83 years. Wales also has the appalling legacy of large-scale de-industrialisation and subsequent long-term worklessness. That means that many people have broken employment records and a disproportionate number might not qualify for a pension because of their lack of contributions.
The Government have stated that they intend to review changes in life expectancy every five or six years, and I think Lord Turner suggested that they did so every seven years. I have proposed a new clause to encourage Ministers to ensure that the panel reviewing life expectancy looks further and also considers Britain’s human geography of low incomes, no incomes, long-term unemployment, sickness and disability. That broader inequality must be addressed, as it will certainly persist.
Steve Webb
In a short time we covered a wide range of issues, and in the 10 minutes or so remaining, I shall try to respond to as much as I can, although I apologise in advance to hon. Members whose amendments I do not reach. I shall deal with amendments in the order in which they were raised.
New clause 5 was dealt with by the hon. Member for Edinburgh East (Sheila Gilmore) and touched on by her colleague, the Chair of the Work and Pensions Committee, the hon. Member for Aberdeen South (Dame Anne Begg). It addresses the position of the derived rights of people who are shortly coming up to pension age and the fact that we are ending the ability to derive pensions from a spouse. The spirit of the new clause implies transitional protection, but we have included comprehensive transitional protections in the system.
In particular, those who paid the married woman’s stamp and as a result have a poor contribution record will, notwithstanding the fact that we are ending derived rights, continue to be able to receive a 60% spouse’s pension or a 100% widow’s pension, because that was the basis of the deal that they did with the state. They signed the married woman’s stamp, which said, “I’ll pay less NI, but I understand that when I reach state pension age I’ll be able to get a pension based on my husband’s contribution record.” We took the view that because that was the basis of the deal, we could not change the rules. We have made sure that the limited number of women in that position are protected.
The issue is whether we should go further. It is worth bearing in mind that to get a £66 pension, which is the derived pension for a married woman, because of the rate of the single tier pension, such a woman needs 16 or 17 years in the system. For someone who has spent their life in this country, it is very difficult not to have achieved that or thereabouts.
Sheila Gilmore
There is an acceptance that for most people it would be unusual for that circumstance to arise, but according to the Department’s own figures, some women are in that position.
Steve Webb
Indeed. The hon. Lady is right. Some women are in that position, but a significant proportion of them have had very limited contact with this country. This is the point that she touched on. Derived rights arise to people who have never even been to the country. They can get a 60% pension or a widow’s pension because their spouse is part of the UK pension system. She is asking us to keep, for another 15 years, an extraordinarily complex bit of the system rolling into the new system. We are trying to deliver a simple and effective new state pension system and we have already introduced transitional protection for the most obvious group, the married woman’s stamp pensioners, which we think needs to be protected. We could have kept the whole of the old system rolling on for another 15 years, but that would have created enormous complexity when we are trying to move to a simpler system.
Were we to follow new clause 5 and the Select Committee’s recommendation and choose 15 years as the cut-off, we could be as sure as anything that we would be under judicial review for someone who was 16 years shy of the line. In other words, if we have a cut-off date, we must have an objective basis for it, and we can find no objective basis for choosing 15 years. I take the point made by the hon. Member for Aberdeen South that because 10 years is the de minimis, 15 years is a bit more than 10. I get that, but so is 16 or 14.
The hon. Member for Edinburgh East said that someone some years ago was told not to buy missing years and now it is too late. I stress that the ability to buy missing years has been substantially relaxed by HMRC so people can buy back as far as 2005-06 on relatively favourable terms. Even by the end of the decade they will still be in a position to buy back missing years. If they have spent the money and they do not have it any more, they cannot do it, but that aside, the ability to buy back missing years still exists. Although buying 10 years costs a lot of money, very few people will be starting from zero. So to reach the 10-year de minimis would not necessarily involve a huge outlay. Many will be over that level already and for those who are not and who have been in this country, the chance to buy one or two missing years will be important.
What we are trying to do is, yes, recognise where we need transitional protection, but we want to avoid such great complexity that we recreate the complex old system for well over a decade in the new one. That is why we reject new clause 5.
Sir Peter Bottomley
Did not the Minister’s last point—that we do not want to continue the kind of discrimination that we had in the past—answer why he should accept amendment 1 and drop clause 20?
Steve Webb
My hon. Friend, as ever, is sharp on these matters. Amendment 1, which stands in his name and that of my hon. Friend the Member for North Thanet (Sir Roger Gale), would delete clause 20. As the Chair of the Select Committee pointed out, that would do nothing for any of the overseas pensioners who have contacted us as their MPs; it would only remove the freezing for single-tier pensioners. I am sure that my hon. Friend the Member for Worthing West (Sir Peter Bottomley) understands that point, but I just want to be clear that if we voted for the amendment, all we would be doing is creating a new anomaly.
In a sense, the Chair of the Select Committee urged us to create that new anomaly. She said that we cannot defend the old one and that we should at least not carry on with it, but by doing that we would create a new anomaly. It is not just about which side of the Niagara falls one happens to live on, because single-tier pensioners would get indexation but nobody else would. I think that we all know what would happen: we would end up back in court. My hon. Friend the Member for Worthing West referred, quite properly, to the extensive legal background to the issue, because it has been tried and tested by the International Consortium of British Pensioners in a range of courts, and all have found that in many cases what the Government are doing is implementing the law of the land as it has stood for decades.
My hon. Friends the Members for Worthing West and for North Thanet went to see the Prime Minister, and I am grateful to them for doing so. My hon. Friend the Member for Worthing West referred to the reply he received today from the Prime Minister—I am pleased that he replied in advance of the debate—who stated that, having reflected on their arguments, he did not feel that a further review was appropriate at this point. Obviously, the context he referred to is the £700 million cost of indexing those pensions. My hon. Friend the Member for North Thanet said that they were not asking for that to be backdated, but I speculate that as soon as we start indexing pensions and stepping them back up to where they would have been, the next court case will come when someone says, “Hang on a minute. Since you froze my pension I have missed out on X amount of money, so I expect that to be paid back as well.” These wedges have a knack of having thin ends. The cost of addressing this, at £700 million a year, is already substantial, but backdating would lead to far more substantial costs, which is difficult to justify at present.
Kate Hoey (Vauxhall) (Lab)
As another signatory to amendment 1, I am disappointed by the Prime Minister’s response. Will the Minister at least admit that he personally feels that this is a terrible injustice that will have to be addressed sooner or later, because the longer we leave it the more difficult it will be?
Steve Webb
I was asked about the issue when I appeared before the Select Committee, and I said that I sympathised with the pensioners we were talking about. I commented that my sympathy would butter no parsnips, meaning that it would not be worth a huge amount to the people involved, but I was vilified for using that phrase. I am not quite sure what to say, but I sympathise with the point that was made.
My hon. Friend the Member for Worthing West gave an example of someone on a pension of a few pounds a week being topped up by the Australian Government. I do not know about the individual case, but in general if all we did was increase that pension, we would not necessarily increase the pensioner’s standard of living, because all that would do is take money out of what they get from the Australian Government. If we are concerned about their standard of living, increasing their pension in a means-tested system would not necessarily help.
The hon. Member for Brighton, Pavilion (Caroline Lucas) asked about giving women between 51 and 53 a choice, and when the shadow Minister was asked for his opinion, he said that it was that we should have a review. Obviously that plays to the gallery and sounds sympathetic, but it is not actually suggesting a solution. The complexity that the hon. Lady and I have talked about is not so much that we could not give people all the information, because we could, although it is complicated to put across; the problem is that nobody knows what their future is. A woman could choose to take the single-tier pension on day one, which would look like the right thing to do because she would get more than she does under the current system, but if her husband died the next day she would not get a derived widow’s pension and she would have made herself worse off as a result.
Caroline Lucas
I take the Minister’s point, but my point is that it should be for that woman to decide. Yes, there is a risk, but she is better placed to make the judgment than he is. Many women would want that change, and he has not given a good reason why it should not happen.
Steve Webb
In addition to the issue of people who will subsequently be bereaved is that of people who will flow on to savings credit, and nobody can possibly know whether, at some point during the course of their retirement, they will move on to that. Although I understand the concerns that have been raised, that group of women have actually benefited from the triple lock that we have introduced. Far from doing them down, as the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) has suggested, we have improved their pension position. On his more general point about the position of women in the pension system, this whole Bill is about improving that position. That is why I urge the House to reject the amendments and to support the Bill.
Sir Peter Bottomley
On a point of order, Mr Deputy Speaker. Am I right in saying that, under the procedure of the House, amendment 1, which would remove clause 20, will not be called because of the guillotine?
Mr Deputy Speaker (Mr Lindsay Hoyle)
I am not calling it. Unfortunately, that is the procedure of the House, as the hon. Gentleman well knows.
Steve Webb
I beg to move, That the Bill be now read the Third time.
One of the problems on Report is that we get back into the weeds and the detail and lose track of the big picture. I think we can all be proud of producing a Bill that will be seen by history as a lasting and valuable reform to the pensions system, even if I say so myself.
To begin on a note of consensus, I thank the Select Committee on Work and Pensions and its Chair, the hon. Member for Aberdeen South (Dame Anne Begg), who is in her place, for its pre-legislative scrutiny of the draft Bill, or at least the parts relating to the single-tier pension. We are grateful for that input and made changes in the light of its recommendations, including putting the start date in the Bill and setting the maximum and minimum qualifying period at 10 qualifying years. We have discussed further some of the Committee’s recommendations as we have proceeded. We are grateful for its constructive and swift scrutiny of the Bill.
The reason for the Bill is that we have a state pension system still grounded in the models of the second world war, a system where men went out to work and women depended on men, and a system of mind-numbing complexity that made it impossible for people to plan rationally for their retirement. Each change by successive Governments has been made with the best of intentions, but, grafted on to the previous lot of changes, they left people with a system that nobody could hope to understand. That mattered in its own right, but it matters particularly in a world of automatic enrolment if we are to expect another 10 million people to save, in some cases, relatively small amounts for their retirement. They have to be able to do so confident that they will not see their hard-earned savings means-tested away. That is why the single-tier state pension, a single, simple decent state pension set above the level of the basic means test, is such a fundamental reform.
The Secretary of State for Work and Pensions has been supportive of this principle from day one. I am grateful to him and to my colleagues in the Department for the fact that the coalition has been able to introduce this reform, which is long overdue and will, I believe, stand the test of time. While we have had our differences with the Opposition, I am grateful to them for their support for the principle of the single-tier pension. We all want to see a pension system that is not constantly chopped and changed, but stands the test of time. I believe that the single-tier pension, subject to any further refinements their lordships might wish to make, will indeed stand the test of time and will provide a firm foundation for retirement saving.
The Bill does not only deal with the single-tier pension. Part 2 brings forward the increase in the state pension age to 67 and sets out a process for dealing with these things in a more rational and measured way. We envisage that as life expectancy increases, the majority of that time will be added to working life, but a period will be added also to retirement. It is a measured, balanced and systematic approach that will allow people to plan for their retirement in a way that all too often they cannot.
Part 3 reforms the bereavement support payment, which we have not been able to discuss today, and which is designed to focus support for bereaved families on that point immediately after bereavement and in the year thereafter, when bereaved families have told us they need the most support and cash. That is the purpose of the reform.
Martin Horwood (Cheltenham) (LD)
Like my hon. Friend, I welcome the Bill, which is an important, historic and long-overdue change in the pension system, but will he acknowledge that charities such as Winston’s Wish, based in my constituency, and the Childhood Bereavement Network have expressed concerns about the bereavement support arrangements in the Bill, particularly for parents who still need that support after one year—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. This is meant to be an intervention, not a speech. It is unfair on the other Members waiting to speak. In fairness, Mr Horwood, you ought to give a little more consideration and make shorter interventions.
Steve Webb
The charity in my hon. Friend’s constituency, Winston’s Wish, was referred to earlier by the hon. Member for Gloucester (Richard Graham), and we take its concerns seriously. I stress that what we have put in place is a structure of reform that will involve us actually spending slightly more over the coming years on support for bereaved families, but there is a debate to be had about how long the support should last. For various reasons, going beyond a year raises difficult issues. For example, a short-term benefit can be disregarded for universal credit, whereas a long-term income replacement benefit almost certainly would not be. By delivering the money in this way, therefore, the lump sum is tax free and the short-term payment is not counted against people’s universal credit, whereas a long-term payment would be, meaning that bereaved families might end up getting less support were we to extend the period. So there are trade-offs and reasons why these balances have been struck.
Lady Hermon (North Down) (Ind)
The Minister will know that as the Bill is drafted, and moving towards its final phase in the House, the bereavement support payment does not apply to Northern Ireland. Will he clarify whether, were it to be introduced by the Northern Ireland Assembly, it would be paid for centrally?
Steve Webb
I would be happy to provide the hon. Lady with the clarification she seeks, either while I am still at the Dispatch Box or subsequently, if that would be helpful.
Part 4 of the Bill, which occupied the majority of our time in the House, deals with automatic enrolment and one of the many issues not addressed until this coalition Government came to power—the issue of small stranded pension pots. We anticipate that there could be tens of millions of small stranded pension pots, which is not something any of us want. I think that the prospect of the pot-follows-member system, under which people change jobs and the small pension pots go with them and build into what I have called a big, fat pot, is a better model. It will engage people with pension saving and result in people knowing where their pensions are and getting better value for annuities. That will be of great value.
It would be fair to say that a Bill such as this does not just happen, but depends on the work of an army of officials with expertise in both state and private pensions, on parliamentary counsel and on the many stakeholders who have given us advice and encouragement and enabled us to refine the Bill. I put on the record my appreciation to all of them.
Julian Sturdy (York Outer) (Con)
Like the Minister, I support the Bill, but I have constituents concerned about the 35-year rule, as they fall a few years short of it. There is genuine concern for them. What reassurances can he give me on this issue?
Steve Webb
My hon. Friend raises an issue that has caused a little confusion, but I can reassure him that although the single-tier pension is based on a 35-year contribution, 35 years buys someone a £144 pension, so each year has been valued at a more generous rate than the 30 years for the £110 basic pension. Under the new system, nobody will lose out from the change because we compare someone’s entitlement under the current system with their entitlement under the new system, and their foundation amount going forward is the higher of those two amounts. If the move to 35 years prejudices any of my hon. Friend’s constituents, they will get the figure they would have got under the current system, and if it benefits them, which it will in many cases, they will get the higher figure. I hope that that offers him the reassurance he seeks but I am happy to respond to him in writing.
Julie Hilling
Is the Minister saying that those people who fall short of the 35-year rule will receive their £144 a week pension or that, for life, it will be less than that?
Steve Webb
To be clear, someone with 30 years and no SERPS under the current system gets 30/30ths of £110, a basic pension. Under our system, they get 30/35ths of £144, which is more. The fact they have not got 35 years does not matter. They get a bigger pension. It does depend on how much SERPS someone has, which is why I say that some will get more. But no one will get less because our starting point for the calculation is the better of the two numbers. The move to 35 years for people already in the system cannot give them less pension than they have already built up but does give them the opportunity to build up more.
The opportunity to talk about the Bill is enticing and I could go on at great length, but the key point is that notwithstanding the differences we have had about the detail, this is a Bill of which the House can be proud. It introduces—for the first time, essentially, in 50 years—a single, simple and decent state pension that provides a firm foundation for auto-enrolment. It rationalises the process of raising state pension ages. It reforms the bereavement support system. It gives us a private pension system that is fit for purpose for the world we are moving into and it is with considerable pride that I commend it to the House.
Gregg McClymont
When the Minister first came to the House in January with his statement on the Government’s plans for a flat rate state pension, I suggested that the devil would be in the detail and that there would be winners and losers from such a substantial reform. Inevitably, that has proven to be the case. I think we have to give the Minister credit for taking the Bill through its various stages. It is a complex Bill; certainly some of its consequences and implications are complex.
The Minister has decided—with some justification on his part—that he sees a hard and fast wind-up of the second state pension and the move to a flat rate state pension as the best way to proceed. At the same time, the Minister says that the Bill makes private pensions fit for purpose and gives a firm foundation for auto-enrolment. That would be a fair characterisation of the Minister’s comments at Third Reading.
If we reflect for a moment—usually Third Reading is a time to do that—the Minister deserves credit for taking forward the consensus created by the Turner commission, which, set up by the last Government, had three important aspects in particular: to start dealing with the issue of longevity; to start rebuilding the additional pensions savings pillar that decisions of previous Conservative Governments had damaged significantly; and to get a simpler state pension. That is the context in which the Minister has proceeded with his Bill and taking forward that consensus means that he deserves significant credit.
In any Bill such as this, there will inevitably be kinks and things that need to be sorted out, but there is a lack of balance in the Bill. The Minister has been very clear and put into statute everything that will happen in terms of the state pension. In terms of the other side of the equation—private pensions via automatic enrolment for the 10 million people who are currently going through that process—the Minister says he has to do a lot of things, but a lot of them remain to be done. The Minister is giving himself powers in various areas but without specifying what he intends to do with those powers. I suggest that while we can welcome the move to a flat rate state pension, there will be more work for the House to do in terms of keeping the Minister on the right track regarding how the private pension system interacts in a coherent and comprehensive fashion with the flat rate state pension.
The Minister rather generously suggested that Labour Members had a vision for the private pensions market. He went on to say that he did not agree with it, but it turns out that in one respect, he does. He seems to have come round to Labour’s view on the need to take tough action to cap pension charges. As I mentioned earlier today, it was just over a year ago that he said that the Leader of the Opposition was scaremongering when he drew attention to the problems in the pensions market, yet we have heard the Minister using tough language today on the need to sort out the market, and on having a consultation on a price cap. The details of the consultation will be produced tomorrow, and we await them with great interest. We welcome the Minister across to the side of right and justice on the issue of a pensions price cap.
The Bill has thrown up a number of questions on the two essential parts of the pension system—state pension reform and the pillar of additional pension saving—and many of them have been dealt with effectively. However, questions remain about the pensions market side of the equation and about additional pension savings. Let us not forget that the new flat rate state pension will not provide most people with the kind of income they will need and expect in retirement. The burden will therefore be on the new auto-enrolment pensions to deliver the necessary additional income. We believe that the Minister still needs to do a significant amount of work on this, either by using effectively the powers he has given himself or by bringing further proposals to the House.
In taking forward the Bill, the Minister has taken significant steps forward in the state pension sphere. There will be losers, however, and he has not said much about them. He has inevitably focused on the winners in the flat rate state pension reforms. However, we do not oppose the Bill. We believe that the principle of a flat rate state pension is sensible, but if the Minister really wants both parts of the pension system to interact cohesively and effectively, he will need to act fast to reform the dysfunctional private pensions market.
Julie Hilling
I am grateful for this opportunity to speak briefly in the debate. I want to speak up on behalf of Maureen Davenport and the many other women who have contacted me about what is happening to their pensions. Let me start by quoting Maureen Davenport, a retired head teacher. She says:
“I have worked all my life and paid taxes and other contributions, as required. I also have an occupational pension. I have just turned sixty years of age and I am fully aware of the Pensions Act 1995 which twice deferred the age at which I could access my state pension. What I am currently told is that I am now in the age bracket where I am not able to access the new flat rate higher pension as I was born between 5 April 1952 and July 1953. As is said by many in the media, I am one of many women facing a ‘State Pension Double Whammy’: deferred pension and a potential loss of nearly £40 per week for life. It would seem logical and fair to have grouped all women who have a deferred pension into the higher flat rate pension rather than penalise this age group. I feel very strongly that I have, once again, been penalised at a time when I cannot affect my retirement income and have very little voice and opportunity to affect change.”
Maureen is typical of the many women who have contacted me, and they are just a few of the 720,000 women who will be worse off as a result of the Government’s changes to the state pension.
Steve Webb
In the event that the record might suggest that the hon. Lady’s constituent will be worse off, I want to confirm that the only change we have made to her constituent’s pension is to introduce the triple lock, which will give her more generous indexation than she would have had. That is the only change that we have made to that lady’s pension.
Julie Hilling
My understanding is that that is not the only change: my constituent will not be able to access £144 a week because the second state pension has been done away with and she will not be entitled to that money. If I am wrong, perhaps the Minister will tell me that my constituent will receive the equivalent of £144 a week. No, she will not receive that, so she is being penalised by this action, because she will not be able to receive her second state pension. [Interruption.]
I will continue to make progress. Like me, these women are angry and upset because they have done the right things all their lives, yet will be disadvantaged in comparison with a man born on exactly the same day as they were.
This is not the only issue that hurts women. Raising the number of necessary years for national insurance contributions to 35 again disproportionately hits women. We know that women are the ones who normally take time off to look after children and, indeed, to look after ageing parents and ageing parents-in-law. This Government will undo the good work done by the last Labour Government to improve the lot of women’s pensions, with a further 100,000 fewer qualifying for a full pension. This is particularly unfair to those who are close to retirement age, who will not have the opportunity to make up the extra years—unless they work well into their 70s.
I wrote to the Minister about Maureen and my other constituents. The letter I received back was illuminating and, frankly, complacent. Let me quote some of it:
“It is important to note that we are not proposing simply to increase the pension from £110 per week for today’s pensioners to around £144 week for new pensioners…Future pensioners will simply build up towards a flat rate pension of around £144—there will be no additional State Pension on top of this figure, so the maximum State Pension attainable under the new system will be significantly lower than under the current system. I should also add that in some ways the new system will be less generous for those who retire after April 2016.”
The letter went on to say:
“While women born shortly after your constituent may receive a single-tier pension, they will have to wait several months longer than your constituent before they can start to draw a pension. Furthermore, the average entitlement for women reaching State Pension age shortly after the new system’s introduction is projected to be £131 per week and not the illustrative single-tier full rate of £144 per week. In comparison, women reaching State Pension age shortly before the new system is introduced will receive an average of £125 per week under the current system, made up from a combination of basic and additional State Pension.”
It seems clear to me that women born in that age bracket will be disadvantaged, yet the Government announced their proposed changes with a grand fanfare about how much better off all pensioners would be under the new system. They have failed to tell people, particularly women, that some of them would be worse off. I just wonder why everything this Government do seems to make things worse for women, who are hit by so many things—hit twice as hard, for example, by the Budget and three times as hard by other Government actions.
Martin Horwood
Will the hon. Lady explain why the triple lock made things worse for women?
Julie Hilling
Of course the triple lock affects everybody; it does not just affect women. Some of the changes, however, affect women only. That is my point. It is not that this Government are doing nothing—I applaud the triple lock—but I deplore the fact that whenever the Budget and other measures are taken, it is often women who suffer. Women are worse affected, as they are on this pensions issue.
I finish by asking why the Government are trying to turn the clock back to times when things were worse for women than for men. This Government continue to act in that way, which greatly disappoints me.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Eurojust and the European Public Prosecutor’s Office
(11 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
I beg to move,
That this House takes note of European Union Documents No. 12566/13, a draft Regulation on the European Union Agency for Criminal Justice Co-operation (Eurojust), and No. 12558/13 and Addenda 1 and 2, a draft Regulation on the establishment of a European Public Prosecutor’s Office (EPPO); agrees with the Government that the UK should not opt in to the draft Regulation on the Eurojust at this time and should conduct a thorough review of the final agreed text to inform active consideration of opting into the Eurojust Regulation, post adoption, in consultation with Parliament; and further agrees with the Government that the UK should not participate in the establishment of any European Public Prosecutor’s Office.
On 17 July, the European Commission formally proposed the establishment of a European public prosecutor’s office and reforms to the existing European Union body, Eurojust. This triggered the UK’s opt-in protocol. The Government have been clear that we will not participate in the EPPO. As is clear from the motion, the Government also recommend that we should not opt into the new Eurojust proposal at the start of negotiations, but should conduct a thorough review of the final agreed text to inform active consideration of opting in post-adoption.
As the coalition agreement makes plain, we will put the United Kingdom’s national interest at the heart of every decision that we make on whether to participate in new European Union crime and policing measures. Our law enforcement and prosecution agencies must work closely with their counterparts in other European countries to combat the threat of cross-border crime. That does not mean, however, that we should sign up to new EU legislation that is not in the UK’s national interest.
I am sure that the House is clear about our position on the European public prosecutor’s office. As was established during a thorough debate in the House only a week ago, the Commission’s EPPO proposal is fundamentally flawed on many levels, not least in failing to pass the subsidiarity test. I am pleased to say that there has now been a sufficient number of votes in member states’ national Parliaments—including the House of Commons last week and the other place last night—to result in the issue of what is termed a yellow card, which means that the Commission is now required to review its proposal.
Mr Nigel Dodds (Belfast North) (DUP)
I welcome what the Minister has just said about the number of votes that will ensure that a review will take place. Will he confirm that, if the Government were minded to proceed with the opt-in—which I am glad they are not—that would require the endorsement of the British people, given the provision that any extra powers going to Brussels requires their endorsement through a referendum?
James Brokenshire
That is absolutely correct. The proposal for the creation of a European public prosecutor was framed specifically in those terms, and it would therefore require the endorsement of the public. I think that that is because, owing to the significant impact that it would have on the criminal justice system, the change would be so significant and fundamental—for reasons that I shall explain shortly—that it would require the backing not just not of Parliament but of the public.
The flaws in the EPPO proposal frame the context in which we must also consider the Eurojust proposal. The reforms proposed to Eurojust would involve deep connections with the EPPO, because the legal base for the EPPO requires it to be created “from Eurojust”. The Commission has sought to reflect that by creating operational, management and administrative links between the two bodies. That includes the exchange of data, including personal data; automatic cross-checking of data held on each body’s IT system; and Eurojust’s treating any request for support from the EPPO as if it had been received from a national competent authority.
At a time when we do not know what the EPPO will look like—given that the Commission must now review its proposal following the yellow card—let alone how the relationship between it and Eurojust might ultimately be defined in either text, it would be irresponsible in the extreme for us to risk binding ourselves to the European public prosecutor through our participation in the new Eurojust proposal. That would be a needless risk, given that we can review our place in Eurojust on its adoption.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Does the Minister not think it particularly unfortunate that when the functions performed by Eurojust are so necessary and so valuable, our ability to co-operate in that mechanism should be impaired by its becoming interlocked with a proposal with which we disagree?
James Brokenshire
That is an important point. As my right hon. Friend will know, the Government believe that the existing structure for Eurojust works well, and provides for effective practical co-operation in dealing with cross-border criminality. I shall develop that point further during my speech.
We also need to consider what the coalition programme says about preserving the integrity of our criminal justice system when deciding whether to opt into a new justice and home affairs proposal. The new Eurojust proposal would create mandatory powers for national members—powers that would allow it to require coercive measures at a national level. This House will already be aware that we have expressed concerns about any such powers being granted to Europol, the EU police agency, and our concerns hold true in this regard too. The proposed text goes further in explicitly requiring that those based in The Hague would be able to insist that national authorities take investigative measures in certain circumstances. That could, for example, include requiring them to issue a search warrant in the UK. That would cut across the division of responsibilities and separation of powers between police and prosecutors in England and Wales and Northern Ireland. It also fails to take into account the role of the independent judiciary in ensuring that certain coercive measures are granted to police in appropriate circumstances. Moreover, the proposals would conflict with the role of the Lord Advocate in Scotland, who has the sole, ultimate responsibility for determining investigative action in Scotland. That would be undermined by the proposed powers.
These are not matters of mere technicality. They are about fundamental aspects of our systems of law and would require wholesale and unjustified changes in order to be implemented. They would also conflict with the principle that operational decisions are best made as close to the operational level as possible, and would disrupt the operational independence of our law enforcement officials and prosecutors.
Lady Hermon (North Down) (Ind)
Has the Republic of Ireland agreed to sign up to Eurojust and the European public prosecutor’s office, in which case can the Minister assure the House that the UK’s reluctance to agree to either of them would have no negative impact on the very good working relationships between the Garda Siochana in the Republic of Ireland and the Police Service of Northern Ireland?
James Brokenshire
The hon. Lady makes an important point. The Republic of Ireland has said it will not be opting into the new Eurojust measure at this point in time because of concerns it has. That underlines that the UK is not in any way isolated on this matter. There are genuine and real concerns about the Eurojust measure, in large measure because of the interconnection with the EPPO. Various Parliaments around the EU do not support this measure, as shown by the yellow card having been issued in relation to the EPPO proposal.
Mr John Redwood (Wokingham) (Con)
I am grateful to the Minister for being so clear in identifying real problems with both proposals, and I urge him to dig in. We do not want these changes and I am glad he is standing up for us.
James Brokenshire
I am grateful to my right hon. Friend for the support he offers for the Government position. We have clearly set out genuine and real issues in relation to both these measures challenging some of the fundamental principles and aspects of our criminal justice system.
We also have concerns about the risks of reducing member states’ influence under the proposal’s revised governance arrangements. For example, the Commission has proposed the creation of an executive board with a very narrow composition, including the Commission itself, that would, among other things,
“prepare the decisions to be adopted by the College”—
the college being the body on which all member state national members of Eurojust sit. Moreover, the Commission has not proposed the creation of a management board along the lines of that which oversees Europol, which we think is better suited to effective governance of such agencies. In short, the proposal’s governance arrangements are unsound.
Fundamentally, we do not consider that the new Eurojust proposal is even needed at this time. The current legislation is still undergoing a peer evaluation which will not complete until next year, and the Commission has not put forward a convincing case as to why the new proposal is needed. There is not even a specific impact assessment from the Commission for its Eurojust proposal.
Pete Wishart (Perth and North Perthshire) (SNP)
The Minister mentioned the Lord Advocate of Scotland. What discussions has the Minister had with the Scottish Government and other devolved Administrations? What did they say to him about the Eurojust proposals?
James Brokenshire
Consultation has taken place with the Scottish Government and with the devolved Administration in Northern Ireland to keep them apprised of the examination of this measure and to highlight the significant issues at stake. From the outset, this Government have made clear their opposition to a European public prosecutor’s office, for the reasons I have enunciated this evening. I do not think that there is any surprise about the steps that have been taken or, because of the fundamental nature of the objections that I have highlighted, any fundamental objection to the proposals I am setting out and to our seeking the House’s authorisation in the manner we are tonight.
The only rationale for the Eurojust proposal seems to be that in order for an EPPO proposal to be brought forward the Commission had to take into account the treaty requirement for it to be established “from Eurojust”. Our law enforcement agencies and prosecutors already work closely with Eurojust as it currently operates; this House will be aware that we are part of the current agency. They value the support it provides, but they must retain discretion to make decisions at a national level. Indeed, the Government value the current Eurojust arrangements, which support judicial co-operation arrangements, helping to co-ordinate serious cross-border crime investigations and prosecutions. The case of the murders in Annecy in France in early September 2012 demonstrates the value of the current Eurojust arrangements. The UK and French national desks at Eurojust were instrumental in co-ordinating activity that led to a joint investigation team, and in clarifying the legal and procedural options in each country. That is why we are seeking to rejoin those arrangements as part of the 2014 opt-out decision.
We also take seriously our commitment to tackling fraud against the EU’s budget, but we believe that the most effective approach is prevention, not the creation of a new EU prosecutor. The UK has a zero-tolerance approach to all fraud, with robust management controls and payment systems in place that seek to prevent incidences of EU fraud. We have welcomed recently agreed changes to EU payment procedures and the reform of OLAF, the EU’s anti-fraud office, to improve the reporting systems and investigations. Once they are fully in place, they will support existing and future UK investigations and prosecutions.
The Commission’s approach with the proposals under consideration today is, therefore, unnecessary and, as I have set out, the content raises substantial concerns. That leads us to conclude that we should not participate in the new Eurojust proposal at the start of negotiations. We will instead undertake to play an active role in negotiations on both Eurojust and the EPPO, seeking amendments to the Eurojust regulation to meet our needs while engaging in discussions on the EPPO to protect against any attempt to bypass our non-participation through the back door of Eurojust. At the end of negotiations, we will thoroughly review the Eurojust final text and actively consider opting in—in consultation with Parliament—on the basis of that final assessment.
If the final text remained unacceptable and we were not able to participate in it, there would obviously be risks for our longer-term participation in Eurojust. Depending on what was finally agreed, an assessment would need to be made on whether we could remain within the old arrangements, subject to the outcome of the separate work on the 2014 decision, or whether the institutions would seek to eject us from Eurojust and we would need to seek alternate co-operation arrangements. Given that we do not expect to have sight of the final text much before the middle of 2015, it is hard to speculate on the final outcome, particularly in the light of the recent developments of the yellow card having been issued in relation to the measure for the EPPO. What I can reiterate is that we will work to get the text into a place where it is able to meet our significant concerns.
Sir Alan Beith
Over the considerable period in which the subject can be discussed, can we not seek allies among our fellow member states from those who recognise that different legal systems with different distributions of powers within them must be recognised by any EU-wide arrangement and that the text should therefore be changed?
James Brokenshire
I am grateful to my right hon. Friend for his contribution and I know that he was consistent on that point during our debate on subsidiarity last week. That view has been expressed by a large number of national Parliaments across the EU and it is now for the Commission to reflect on that message in the context of subsidiarity and on whether there are more appropriate ways, as we would argue, to deal with the issue of combating fraud in the EU.
As I have already said, Ireland has announced its intention not to exercise its opt-in to the new Eurojust proposal at the start of negotiations and, of course, Denmark cannot participate in post-Lisbon justice and home affairs measures such as this. All member states have a shared interest in ensuring that the final proposals work with all member states’ criminal justice systems, as my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) has said, rather than adopting the Commission’s unworkable one-size-fits-all approach.
Let me conclude by making clear our commitment to the current Eurojust arrangements and our intention to negotiate to protect those arrangements, and our view that as the proposal stands it poses too high a risk to our criminal justice systems to opt in at this stage. Today’s motion is in the national interest and I urge the House to support it.
Diana Johnson (Kingston upon Hull North) (Lab)
I thank the Minister for his characteristically thorough and detailed explanation of the motion.
Tonight the House is discussing the two issues of European co-operation on justice and home affairs: Eurojust and the European public prosecutor’s office. If anyone is feeling a sense of déjà-vu, that is because the House discussed the EPPO this time last week. Indeed, there was a rare moment of unity when those on both sides of the House agreed with the Government, the previous Government and the European Scrutiny Committee that the creation of the EPPO did not meet the test of subsidiarity and that the UK should therefore opt out. In government, Labour secured an opt-out from the EPPO and in opposition we support the Government in continuing to use that opt-out. We have also heard that the yellow card has now been issued.
Given the degree of unity in the House and as we debated it at length last week, I do not intend to dwell on the subject of the EPPO. I note what the Minister said about the links between the EPPO and Eurojust, but I think that we should particularly consider Eurojust.
To recap, Eurojust was established in 2002 and in 2001 the EU Commission conceived its role as
“facilitating cooperation between Member States and contributing to proper coordination of prosecutions in the area of serious, and organised, crime.”
Its concern is so-called “annex 1” crimes such as drug trafficking, human trafficking, terrorism and financial crimes. Those are serious crimes that constantly evolve and adapt. Increasingly, they cross borders and require co-operation between different jurisdictions. The importance of Eurojust to the UK is underlined by the fact that there have been 1,459 requests from EU member states for co-operation with Britain through Eurojust since 2003, with 190 requests made in 2012 alone. It is therefore a little disconcerting to see the Government playing the hokey cokey—we are in at the moment, but now we are opting out although, in principle, we might be back in again in the future.
The primary functions of Eurojust have been and will continue to be the facilitation of co-operation between member states. Eurojust is required to respond to any request from a member state and to facilitate co-operation. That role means that Eurojust must inform member states of investigations and prosecutions that are occurring in a different member state but affect the member state; assist the competent authorities of the member states in the co-ordination of investigations and prosecutions; provide assistance to improve co-operation between member states; co-operate and consult with the European judicial network in criminal matters; and provide operational, technical and financial support to member states’ cross-border operations and investigations, including joint investigation teams.
The key thing to remember is that Eurojust seeks to support member states in conducting investigations, unlike the EPPO, which seeks to undertake the prosecutions itself. The distinction is vital and the aim of the British Government should be to continue that element of Eurojust.
Mr Dominic Raab (Esher and Walton) (Con)
The hon. Lady talked about the hokey cokey of the Government’s position. Can she be clear whether the Opposition advocate that the UK opt in now, based on the draft regulation as it stands, with all the supra-national transfers of power entailed in it?
Diana Johnson
I shall come later in my remarks to what I think the Government should have been doing leading up to this point—making sure that the aspects that they were concerned about were discussed. I shall put a series of questions to the Minister about how many conversations and dialogues took place with the EU to try to get the regulation in a form that was more acceptable to the Government.
As Eurojust is based on co-operation, it places obligations on members to co-operate with joint investigations, and these obligations are set to increase. I shall come back to that. If the Government are serious about tackling human trafficking, terrorism or financial crime, for example, they need to be serious about working with European partners, but I am concerned that the Government seem to be sitting on the sidelines. Their current position appears to be that they would like the UK to stay in Eurojust as it is now, but they are content to let everyone else get on with a new Eurojust, which they are not part of, but which they hope they might get back into in the future. What we should do is work with our European partners to get a Eurojust system that works for us.
Mark Reckless (Rochester and Strood) (Con)
I find it difficult to take the hon. Lady’s point in respect of what the Government are doing. Is she implying that we should opt in now, without knowing what will be in the regulation, in order to seek to influence it?
Diana Johnson
I shall come on to some of the issues that the Government should have been considering in the lead-up to the motion today, but we will not oppose the motion. However, we have questions about how we got to this point and whether there could have been a proper negotiation with Eurojust that we might have supported. We have never supported the EPPO. That was very clear in the debate that we had last week.
Chris Heaton-Harris (Daventry) (Con)
Has the hon. Lady ever tried to have a conversation on these issues with Commissioner Reding? It is very much like talking to a brick wall which, if it is moving at all, is moving away from one’s own position. If she had ever had such a conversation, she would understand the difficulty that the Government might have on occasion.
Diana Johnson
Clearly, I am not in government, so I am not in a position to have such conversations, but it is important that the Opposition raise questions about what the Government have been talking to their EU partners about and whether they have been able to form any of the alliances that other hon. Members have mentioned to get the best possible way forward.
Mr Redwood
Do the hon. Lady and her party agree that we do not want more transfers of power over our criminal justice system to the EU and that we wish to protect our common law traditions?
Diana Johnson
As I just said, we are interested in trying to deal with crimes such as human trafficking, financial fraud and the serious organised crimes that go across borders, which are not about what is happening in the UK but are Europe-wide and global. We should make sure that we have procedures in place to ensure co-operation where it is useful.
The three main aims of the reforms are, as we understand it, to increase democratic accountability to member states’ legislatures; to increase efficiency through more streamlined management structures; and to improve EU member states’ effectiveness in the increasingly globalised fight against organised crime. All are laudable aims with which I am sure we all agree. Equally laudable is the aim of increasing our effectiveness in tackling cross-border crime. The Government’s current objections can be divided into those that need working through, which we recognise, and those that, I suggest, appear to be spurious.
The major change, and the one that we recognise poses the biggest challenge, is the appointment of the national member. Under the proposed reform, member states will second a national member—a prosecutor, judge or police officer—to work full time at Eurojust. Member states will grant national members the power to fulfil the task conferred on them by the Eurojust regulation. That means national members, once appointed, will bear responsibility for ensuring that their member states co-operate with Eurojust, including through legal assistance, information exchanges, liaising with international bodies and assisting in joint investigation teams. National members, working with other competent authorities from member states, will also:
“a) order investigative measures;
b) authorise and coordinate controlled deliveries in the Member State in accordance with national legislation.”
The Opposition accept that the appointment of national members represents a big step up for the role of Eurojust. We fully recognise that it is not acceptable for the national member to be in a position of oversight over the UK criminal justice system. I reiterate that we do not support any move to cede prosecuting powers to the EU, either to the EPPO or through some mechanism of Eurojust. However, we would like to see the Government attempt to reconcile those proposals with the current set-up in our criminal justice system.
The Government appear concerned that, as currently formulated, the proposals could allow Eurojust to order investigations, or even prosecutions, that duplicate efforts already under way in the UK. Prosecutions in the UK of course require the consent of the Director of Public Prosecutions, while investigation of most of the crimes listed in annex 1 are the responsibility of the newly formed National Crime Agency. Perhaps the Minister will explain what work is being done to look at the possibility of drawing the national member from one of those bodies and work on the basis of a memorandum of understanding to ensure that the UK retains sovereignty over our systems while improving cross-border co-operation. As has been mentioned, special arrangements will need to be put in place for Scotland.
Lady Hermon
Unfortunately, special arrangements will also have to be considered for Northern Ireland, because the National Crime Agency’s jurisdiction cannot be extended in full to Northern Ireland as a result of opposition from two parties, Sinn Fein and the Social Democratic and Labour party. It is most unfortunate indeed.
Diana Johnson
The hon. Lady is right that the National Crime Agency does not cover Northern Ireland. I am grateful to her for reminding me.
The Commission envisages a special relationship between the EPPO and Eurojust, as I mentioned at the beginning and as the Minister set out. Of course we need to ensure that countries that are not involved in the EPPO—it is clear that the UK will not be, and others have already declared that they will be opting out—can still enjoy the co-operation of Eurojust without being drawn into the EPPO, which we all agree is a bad idea.
The Opposition have less sympathy for some of the other concerns that the Minister put forward, particularly his concern about the European convention on human rights. It might be helpful if he explained that a little more. Our major concern remains that the Government seem prepared to allow the rest of Europe to go along with these matters without us being at the table.
Henry Smith (Crawley) (Con)
With respect, the hon. Lady has still not answered the question that my hon. Friend the Member for Rochester and Strood (Mark Reckless) asked: does she advocate opting in now, and therefore being locked in?
Diana Johnson
I think that I made it very clear to the hon. Gentleman that we will not be opposing the motion this evening, but we have questions on what the Government have been doing up to now to ensure that this is not the only avenue open to them, and whether we might have been able to get some agreement before we ended up where we are today. Our major concern remains that the Government seem to have been prepared to allow the rest of Europe to go along without us, and instead of working for reforms that protect the rights of the UK they are allowing the rest of the European Union to set up an agreement that works for it and then saying, “We’ll make a decision later.”
I have a few questions I would like the Minister to respond to, either in his winding-up speech or in writing. What work is being done to look at how a national member could be appointed for the UK? Is there any mileage in that proposal? Will the Minister confirm the timetable? According to the European Scrutiny Committee, the deadline is 21 November, but the Minister has suggested, both in written evidence to the Committee and in the House, that the Government will wait until at least 2014, possibly later. Does the deadline of 21 November still stand?
Will the Minister clearly confirm the Government’s position on the current Eurojust arrangements? It is a little disconcerting that the motion does not contain a commitment to maintain the current arrangements and agreements, even though the Home Secretary indicated to the Home Affairs Committee that that is the Government’s desired outcome. Is that correct?
James Brokenshire
I am happy to clarify that the existing Eurojust measure was on the list of 35 measures that we would seek to opt back into following the exercise of our block opt-out. Obviously, they are being analysed by the relevant Select Committees, so we will await their determination before taking further action.
Diana Johnson
I am grateful to the Minister for that clarification.
When did the Government actually get around to raising concerns about the structure of Eurojust and the EPPO at EU level? Those concerns are set out in a memorandum dated 7 August 2013, but surely the Government’s efforts to secure a better outcome began before that. The Government had various chances to discuss Eurojust’s future with the Commission, so did they raise those concerns?
For example, a strategic seminar entitled, “Eurojust and the Lisbon treaty: Toward more effective action”, was held in Bruges in September 2010. Did the Government raise then any of the concerns that they are raising now? There was another opportunity to discuss Eurojust’s future at an event marking its 10th anniversary at the European Council in February 2012. A Eurojust and Academy of European Law conference called “Ten years of Eurojust: Operational Achievements and Future Challenges” was held at The Hague in November 2012. Were the concerns raised then?
On 18 October 2012, the Commission consulted member state experts and others about a possible reform of Eurojust. According to the Commission:
“The meeting generally supported improving Eurojust’s governance structure and efficiency.”
What did the UK representatives say at that meeting? The Commission then instigated a consultation on the strengthening of Eurojust. What issues did the Government raise?
What improvements to Eurojust have the Government been pushing for? We all support more effective co-operation on cross-border action against serious crime and it would be helpful to know what work the UK Government have been doing to lead that agenda at European level. It would be good to see the UK setting the agenda, as was the case under the previous Government, rather than watching what happens and complaining when it does not reflect the specific interests of the UK.
Finally, on the justice and home affairs opt-out in general, the Government have found time tonight, as they did last week, for a debate on the Floor of the House, which is to be welcomed. On both occasions, the Government have raised the issue of the opt-out, which is widely supported with regard to the EPPO, but other, more controversial areas of it also warrant proper discussion. As the Minister has said, we are waiting for various Select Committees to publish reports. Will he reiterate the Government’s assurances that time will be made available for a full debate on those reports on the Floor of the House?
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I agree with the hon. Member for Kingston upon Hull North (Diana Johnson) on one point and disagree with her on another. I agree that there should be a debate on the Floor of the House when the three Select Committees publish their reports. They will provide important guidance to the Government in their negotiations. Where I disagree with her is that it is not sufficient for her to say, “Even if it were true, I would not have started from here.” The question still has to be asked whether the Labour party would, if it had had the opportunity, have opted in to the Eurojust proposal or not. She conspicuously failed to answer that question, except in a way that suggested that she had been given a narrow mandate by somebody in authority in the Labour party.
I start from the proposition that Eurojust is essential and that the European public prosecutor most certainly is not. For the one to get in the way of the other is harmful. Anyone who looked at the documentation for this debate and the excellent work of the European Scrutiny Committee would readily concede that there are many complexities to this matter. However, at its heart, there is a simple issue, which is that whereas cross-border crime requires an effective apparatus that takes advantage of our being in the European Union—we want to maintain those arrangements and it would be greatly contrary to Britain’s interests not to be part of them—the creation of the European public prosecutor is neither necessary nor, in the opinion of many of us, even desirable. That it should stand in the way of British participation and the participation of other countries in Eurojust is seriously harmful.
There are two ways in which the situation that we are confronted with creates difficulties for any British Government, of whatever party political composition. The first is that the proposals on the European public prosecutor and on Eurojust are interlocking. The draft directive on Eurojust incorporates the European public prosecutor so extensively that it makes the position of a state that wants one and not the other very difficult.
The second is that the mandatory powers that are given to national members of Eurojust fly in the face of arrangements in the United Kingdom. Of course, the arrangements throughout the United Kingdom are not uniform. The arrangements in England, Wales and Northern Ireland are quite different from those in Scotland. In Scotland, the Lord Advocate and the procurator fiscal can direct investigations. There is a clear separation between investigation and prosecution in England, Wales and Northern Ireland. Those differences need to be respected. If we can respect those differences in the United Kingdom, surely the European Union can respect the fact that the same objectives can be achieved by different legal systems.
Jim Shannon (Strangford) (DUP)
Does the right hon. Gentleman share the concern of many in this House, including the Minister, over the data that are collected by the Commission, which show that the conviction rate in the UK is 23%, when in reality it is about 75%? The data that the Commission collects centrally go against what we are trying to do.
Sir Alan Beith
There are many dangers in playing with those statistics. Not least, the objective of a 100% conviction rate seems to undervalue the ability of the court to determine that evidence is not sufficient to support conviction and punishment. We expect our courts to throw out cases that do not have a sound evidential basis. The whole statistical exercise is potentially dangerous and misleading.
I speak for the Liberal Democrats, rather than for the Justice Committee, because, oddly enough, this is a home affairs power rather than a justice power, and there is no doubt that we want to be in Eurojust. We do not want Eurojust to be complicated by the wholly different proposal for a European public prosecutor, and we do not want Britain’s participation to be impaired in any way.
The motion is carefully worded. It asserts that
“the UK should not opt in to the draft Regulation on the Eurojust at this time and should conduct a thorough review of the final agreed text to inform active consideration of opting into the Eurojust Regulation, post adoption”.
That wording is most ingeniously crafted. What I want it to mean is that we will make substantial efforts to ensure that we get a Eurojust regulation that meets our needs and those of a number of other member states that share our concerns and that can be allies in putting this matter right, so that there can be no doubt about our future co-operation in these arrangements, which greatly assist us in dealing with cross-border crime and catching up with fleeing criminals who dodge around the nations of Europe. That is of immense importance to us. I look forward to the Government’s active involvement in trying to get the Eurojust proposal right so that we can opt in to it in due course.
Mr Dominic Raab (Esher and Walton) (Con)
This motion must be considered in the context of the EU’s wider ambitions for a single policy on justice and home affairs. As mentioned earlier, the EU Justice Commissioner and vice-president, Viviane Reding, has a huge stake in this matter, and in a far-reaching speech last month she spoke about the considerable momentum towards developing a pan-European criminal code and institutions, replete with a European justice Minister—I dare say Ms Reding has a candidate in mind—and with detailed monitoring and sanctioning powers at Commission level. Those include new powers to uphold EU fundamental rights—a sort of triplication of the human rights legal framework, bearing in mind Strasbourg’s role in the Human Rights Act 1998 and UK jurisdiction, and an expanded role for the European Court of Justice. That is the clear ambition within the Commission and the broader EU. With that in mind, this is also a critical juncture for Britain. We remain poised to exercise our crime and policing opt-out under the Lisbon treaty. It is therefore the right moment—an important crossroads, perhaps—to think strategically about Britain’s criminal justice co-operation in the EU.
On the specifics of the motion, I fully support the Government’s intention not to be part of the European public prosecutor’s office. That initiative is obviously—transparently—a preliminary stepping stone towards a much more far-reaching EU prosecutor, and it must be nipped in the bud. Although it is limited, at least on the surface, to countering fraud against the EU, under current terms the EPPO would take powers away from Eurojust. It would have the power to compel UK police to hand over evidence, and to order UK prosecutors to take action. Through its relationship with Eurojust, it could place wider burdens of co-operation on member states. The scope of those obligations will, of course, be decided by the Commission, and ultimately by the European Court. As the Minister has said, we must stay out of such a measure. I welcome the Government’s decision and the Minister’s clarity of purpose and position.
We ought to emphasise the positive and we should preserve and retain our national criminal justice system. That system is steeped in a very different tradition from the civil, continental tradition, and in a different set of values. As hon. Members have already said, it is also steeped in a different functional division of law enforcement powers that enshrines a uniquely British conception of justice—one that is firm but fair.
The Eurojust regulation is a more finely balanced question. I worked in The Hague and with Eurojust, which has done important work in recent years serving as a college of co-operating national prosecutors. Personally, as the Minister has said, I would prefer it to have continued down that route and in its current form, but the new regulation gives the Commission a seat on a new executive board and places a duty on Eurojust to forge a special relationship with the EPPO. It also imposes additional stronger duties of information sharing on member states, including the UK if it signs up.
The EU Select Committee has highlighted the new powers given to representatives at Eurojust to bypass national authorities in order to process requests for sharing information or evidence, and I pay tribute to its excellent work. Again, all that would be interpreted and enforced by the Commission and the European Court, while increasing our contribution to the EU budget. I note that the Minister and the Government share those concerns and do not intend to opt in at this time. However, they leave open the prospect of “active consideration” of the case for opting in when the final text is agreed.
The Opposition position on this matter is totally hopeless. They recognise the defects in the regulation and accept the motion that the Government have put before the House. They know the Government are actively resisting the supranational elements and creeping supranational character that some seek to impose on Eurojust, yet they criticise the Government for not being in the negotiation now. Such negotiation would, of course, mean that we were irreversibly tied in to the new regime if it cannot be changed. That is utterly untenable and the kind of thing one hears only from the Opposition.
If hon. Members want to be churlish, they might question why the Government are rightly critical of the proposals, yet rather more enthusiastic about them for the future. I am not sure why that is, but I will limit myself to seeking confirmation from the Minister that the House will have an opportunity to debate and vote in advance of any later decision.
James Brokenshire
I am happy to assure my hon. Friend that, if there were a subsequent recommendation to opt back in on the final approved text, I would envisage the process we are going through tonight being replicated. I can confirm to him that we are keeping the option open to opt back in at that later stage precisely for the operational reasons to which he alludes—the benefits of Eurojust as it is currently constructed.
Mr Raab
I thank the Minister for setting out the Government’s position with admirable clarity.
Given that we are discussing the substance of Eurojust and its evolution, I want to take this opportunity to ask more broadly what strategic thinking has been done on our wider future justice and home affairs relationship. What consultations has the UK had with the Commission and other member states on renegotiating Britain’s wider relationship with the EU in that critical area? It is right to assess each regulation or measure case by case, on its individual merits and substance, in a sober and pragmatic way—the Minister has done that cogently this evening—but, at the same time, we need to look to the bigger picture and the longer-term horizon.
I worry that we will drift into a disjointed, albeit bespoke, relationship with Eurojust and the wider JHA framework almost by default, annoying our European partners without satisfying our national interest, risking the worst of all worlds. Would it not be better to grasp the nettle and spell out proactively, on the front foot, what strategic JHA relationship we want, and why that will serve the EU’s interest as well as the British national interest? In my view, that means a British commitment to be a good operational partner, with all the resources, know-how and expertise we bring to the game, but without sacrificing democratic control over such a sensitive area of national policy. It means saying to our European friends that our co-operation within Eurojust will improve operationally as trust and confidence develop, but that we cannot accept any further transfers of authority or control to the supranational level.
Mark Reckless
When my hon. Friend was a witness in the Home Affairs Committee, he recommended that, in respect of Europol, we might want to adopt the Frontex model. Does he believe that that could be an appropriate model for Eurojust?
Mr Raab
My hon. Friend is, as ever, spot on. Each area is fundamentally functionally different, but Frontex shows that countries do not have to be formal members that have signed up in a formal way to be active operational partners. We have heard that from the head of Frontex. It is at least a starting point for evolving our relationship with Eurojust and Europol. If, as I suspect, others within the Commission and member states want to go down the federalising route, that option should be clearly discussed now. We should be on the front foot, and not ashamed or beguiled from talking about it.
We need to make it clear that we cannot accept any further transfers of authority, or the salami-slicing of national democratic authority—that is what we are seeing in the attempts to upgrade Eurojust and Europol. Will there ever be a better moment to have that candid but constructive conversation with our EU partners? I doubt it. Government Members have a commitment to renegotiate our relationship with the EU and to put the renegotiated deal to the British people in a referendum. We know that the British people care. According to a ComRes poll for Open Europe last year, repatriating UK control over crime and policing ranks fourth on the public’s list of priorities for renegotiation. That is very high compared with the other priorities surveyed. We also know that there is significant scepticism among the wider public at large on whether any politicians keep their promises on Europe.
The Labour party is responsible for that haemorrhaging of trust. The Government have a genuine chance to rebuild public trust. That ought to start with the decisions we are taking now and over the next six months on crime and policing, underscored by a two-pronged strategic approach to our future JHA relationship with the EU—one that pledges the full operational co-operation of a strategic ally but defends the return of full democratic control, which the British people want and expect.
Chris Heaton-Harris (Daventry) (Con)
It is a pleasure to speak in this debate and to follow my hon. Friend the Member for Esher and Walton (Mr Raab). His arguments were well put and I completely agree with them. I will try not to copy him too much, but he nailed the point that this measure is completely tied to the European public prosecutor’s office. It is a building block of it, and a morphing of what Eurojust was originally set up to do, taking it much further than any of us in this House would like.
In last week’s debate, we did not get to the issue of what exactly the European public prosecutor’s office is, probably because the Minister asked us not to stray into that territory. According to the European Union, the European public prosecutor’s office will be a
“prosecution office of the European Union with exclusive competence for investigating, prosecuting and bringing to judgment crimes against the EU budget.”
Those last few words are the most important.
For the best part of two decades, the European Commission’s budget has not received a positive statement of assurance from the European Court of Auditors. A lot of money is wasted in maladministration, but a large sum also disappears through fraud, which has caused consternation in some circles for some time. People have, in the past, blown the whistle on areas where money has been filtered away illegally. The problem goes back to before 1999. Those of us who were involved in European affairs back then will remember that the Jacques Santer Commission fell in 1999 because of a scandal involving a failure to chase down fraud, and the ignoring of whistleblowers and internal fraud. When the Commission fell, there was marked panic in European circles and a committee of independent experts was set up. That reported in March 1999 and again in September 1999 after the European elections of that year.
Before 1999, there was an anti-fraud organisation in the European Commission called UCLAF, which after 1999 morphed into a similar anti-fraud organisation called OLAF. Its job was to chase down fraud, both internal and external, and to protect the financial interests of communities in and across the European Union. It was a simple transfer of powers from UCLAF to OLAF—alas, several members of staff also made the transfer—but OLAF did not really succeed in doing its job of chasing fraud for some time. Indeed, it tended to chase whistleblowers before it actually chased fraudsters who chose to defraud the European Union.
All the time, the fraud figures for the European Union kept climbing. Some say it was as high as €500 million, although some would say it was even more. The question for this debate is why the big leap from having an anti-fraud office, which already has the powers to do the job within the context of the existing treaties, to something that would take a huge amount of powers away from member states. Why the huge powergrab?
Alongside the proposal for a European public prosecutor’s office, the Commission has also published a communication on its ideas for OLAF in the future. It plans to table legislative proposals to alter the OLAF regulation in due course. As it happens, the Council and the European Parliament have only just agreed a revision to the 1999 OLAF regulation, which has been more than 10 years in the making. A key aim of that is to strengthen OLAF, the anti-fraud office of the European Union, and its investigative capabilities, and also to provide greater safeguards for those being investigated. The Commission’s proposals for the European public prosecutor’s office, however, would entail OLAF losing the powers to conduct investigations into fraud against the EU budget and being limited to investigations on other irregularities involving EU funds and misconduct or crimes committed by EU personnel that do not have a financial impact. It is gutting powers, which the European public prosecutor would use, from an existing body, because it wants an EPPO with more powers. It is the precursor to this area of criminal justice that my hon. Friend the Member for Esher and Walton talked about. The European Scrutiny Committee, of which I am a member, noted the proposal to amend OLAF regulation and concluded:
“We are disappointed to see that so soon after reform of OLAF’s regulatory framework has been agreed, the Commission, without waiting to see the impact of that reform, is suggesting further legislation including the creation of an EPPO. The Commission refers to this pre-emptive approach to policy-making and legislative reform somewhat euphemistically as ‘step-by-step’ when it seems more like leaps and bounds.”
This is a case of leaps and bounds. We would have to change a number of things that we hold dear in our common law system. We have no arrest without evidence. The European public prosecutor will operate under a system of corpus juris, so that one can be arrested without evidence. We do not hold suspects for more than a fixed and limited time unless charges are presented in open court. Under corpus juris, a person can be held indefinitely. In our system, we believe we have the right to face one’s accuser and see evidence. Under corpus juris, the accuser may be anonymous and no right for the accused to see the evidence exists. We like to be tried by lay magistrates in most cases, have the right to trial of a jury of one’s peers and have an adversarial model. That is not the case under corpus juris, where a person is tried by professional judges, there is no right to trial by jury and there is an inquisitorial model. We like an open court. It is a closed court under corpus juris. We like the presumption of innocence until proven guilty.
Sir Alan Beith
The phrase corpus juris is rather misleading—all it means is “body of law”. The hon. Gentleman is right to point out that our system is different and provides safeguards in a different way, but it would be foolish if we were to look at the rest of Europe and say that they do not have any rights because their system of enshrining them is different from ours.
Chris Heaton-Harris
I fully accept that fact. I am just trying to outline what this big change would mean when, according to the European Commission’s figures, it is just—it is a big sum—meant to protect €500 million-worth of fraud against the EU budget. Is this a proportionate change that we would like to see? I would argue that it is not.
Various people have come forward with individual cases regarding the difference between how the system operates now and how it would operate under a European public prosecutor. In one case, OLAF transferred information to the German and Bulgarian authorities relating to German and Bulgarian nationals who allegedly worked to defraud an EU agricultural and rural development fund scheme. Whereas the German proceedings led to a conviction, the proceedings in Bulgaria ended in acquittal—the current system led to different results in a cross-border case. The argument for a European public prosecutor is that it would have made a difference by ensuring consistency of investigation and prosecution in those countries, changing the nature of prosecution within a member state.
Another example relates to cigarette smuggling from the Czech Republic into Germany. The German criminal court used telephone tapping records obtained by the Czech police as evidence to convict the suspect. Although that evidence was obtained lawfully according to Czech law, the defence lawyer argued that without a court order authorising the telephone tapping, the evidence was inadmissible in the German court. It comes to a certain point when one wonders whether a supranational body such as the European public prosecutor could ask for the phone tapping of a British national on a matter that might not be deemed worthy of phone tapping in the UK.
This is a big step forward and we should note that it is all about a power grab from the European Commission, or a power grab from Viviane Reding, the European Commissioner for Justice. We should be very wary of where she goes from here. The hon. Member for Kingston upon Hull North (Diana Johnson) asked what discussions could be had, but having discussions with Viviane Reding can be very difficult, because she is completely focused on delivering an area of criminal justice for the EU. It is a ridiculous idea that cannot work, but were it to work, it would mean a complete change in how we do law in this country, and one that most of us in this place would fight to the death.
Jacob Rees-Mogg (North East Somerset) (Con)
It is a pleasure to follow my hon. Friends the Members for Daventry (Chris Heaton-Harris) and for Esher and Walton (Mr Raab), with whom I am in almost entire agreement.
As a brief aside, if the House will indulge me, I think one can take back the divergence between our legal system and that of the continent to the Fourth Lateran Council and Innocent III’s view that it was wrong for priests to stand and bless trial by combat. From that, our different systems developed.
On the substance of the documents in front of us, the key is that the Lisbon treaty provided that a European public prosecutor’s office should be developed from Eurojust, which article 86(1) stated could go ahead by enhanced co-operation. In coming forward with these proposals, therefore, the Commission is starting from a very good treaty base, from its point of view. Fortunately, however, we have an equally good treaty base for rejecting it—our ability to opt in or not. I raise the flag of concern about what this whole process is about, and I urge the Government, regardless of the negotiations, not to opt in at the end of them, because it is all about creating a single form of justice within the EU, as my hon. Friend the Member for Daventry said.
The degree of competence being created for Eurojust is extremely wide and is set out in annex 1 of the documents before us, which lists the forms of serious crime that Eurojust is competent to deal with in accordance with article 3(1). I will read the list out, as that has not yet been done, because it is important to understand how all-encompassing the list is: organised crime; terrorism; drug trafficking; money laundering; corruption; crime against the financial interests of the union; murder, grievous bodily injury, kidnapping, illegal restraint and hostage taking; sexual abuse and sexual exploitation of women and children, child pornography and solicitation of children for sexual purposes; racism and xenophobia; organised robbery; motor vehicle crime; swindling and fraud; racketeering and extortion; counterfeiting and product piracy; forgery of administrative documents and trafficking therein; forgery of money and means of payment; computer crime; insider dealing and financial market manipulation; illegal immigrant smuggling; trafficking in human beings; illicit trade in human organs and tissue; illicit trafficking in hormonal substances and other growth promoters; illicit trafficking in cultural goods, including antiquities and works of art; illicit trafficking in arms, ammunition and explosives; illicit trafficking in endangered animal species; illicit trafficking in endangered plant species and varieties; environmental crime; ship-source pollution; crime connected with nuclear and radioactive substances; and genocide, crimes against humanity and war crimes. While some of those are undoubtedly extremely serious and have cross-border connotations, others are essentially national crimes that are most unlikely to have any international connotations. Tiresome though it might be, if one’s car radio is stolen, it is hard to see how that motor crime would have a particular effect on the good people of Luxembourg.
The list goes on, because the proposed regulation coming from the EU allows Eurojust to cover related criminal offences, so it has the ability to go further than this already extensive list. I would argue that the Eurojust proposal contains a very wide set of competences and that Eurojust has significant power of its own. It can exercise its tasks at the request of the competent authorities of member states or, crucially, on its own initiative; it does not require a member state to intervene to set the wheels in motion that would lead to investigations taking place.
The Commission sets out in its document that competent national authorities shall respond without undue delay to Eurojust’s requests and opinions made under article 4, which sets out the basis on which they may make such requests. What is being proposed will give Eurojust a very wide set of competences and an ability to demand responses. I am well aware that the Government’s concern over the directive is that there may be orders coming from member states to direct investigations in the UK and that they believe that that would be unsatisfactory. Eurojust itself does not get that direct power, but it is not very far from it, because national authorities have to respond without undue delay. Although they can cite operational reasons of an unspecified kind as to why they will not provide co-operation, that will be justiciable by the Court of Justice of the European Union. That seems to me to be a very major extension of the competence of the European Union into the criminal justice field.
On the composition of Eurojust—I may have misunderstood this—it is surprising that it is not composed according to the ordinary rules of qualified majority voting, but by simple majority of the members of the college. The members of the college will be one representative of each member state, each of whom will have, according to article 10, a single vote. It would mean that the UK, if we were to opt in to this set of proposals, could be outvoted without even having the benefit of the extra weighting to our vote. The college is set up to maximise the power of the centre against the countries. The proposals give enormously wide control to Eurojust even if the Government’s queries on direct orders from other members and the relationship with the European public prosecutor’s office are answered. That is a fundamental step in reversing—you will be horrified to hear, Madam Deputy Speaker— the differences that developed in 1215 with the Fourth Lateran Council.
James Brokenshire
We have had a full and lively debate, characterised in customary fashion by the contribution of my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). He, like others, set out a number of the significant concerns that are held not only by the Government, but by Members across the House about the Commission’s proposals for a European public prosecutor’s office and the construction of Eurojust.
This country derives real benefits from its participation in the current Eurojust, which is about practical co-operation; from collaboration; and from the number of cases that have been assisted by the establishment of joint investigation teams. But that does not mean that we should now opt in to a new measure that is clearly so fundamentally flawed because of the intrinsic link to the European public prosecutor’s office. Some of these significant issues have been highlighted in the impact they would have on our criminal justice system.
The hon. Member for Kingston upon Hull North (Diana Johnson) was critical of the system of the block opt-out and of having to opt out and then opt in before dealing with new EU measures such as those we are debating this evening. This was precisely the structure that her Government negotiated. If she is unhappy with this system, she needs to look to herself and to her hon. Friends who were party to the construction of the mechanism.
The hon. Lady highlighted and questioned the date of 21 November. I can say very simply that that is the latest date on which the UK would be able to exercise its opt in. It is three months from the publication of the last language version of the relevant regulation, which is the time period referred to. She also highlighted some concerns about fundamental rights. I draw her attention to the explanatory memorandum, which was signed by the Minister for Immigration on 7 August and sets out the fundamental rights analysis. That will explain to her the issues she highlighted.
Questions have been raised about the national member. Indeed, the hon. Lady asked whether we should negotiate a better position for the national member, and whether the Government would express their concern in respect of Eurojust and the European public prosecutor’s office. She mentioned the 10th anniversary of Eurojust. I was there and made those very points at that time. Indeed, one of the first things that I said at the first Justice and Home Affairs Council I attended following the election of this Government was that we would not participate in the European public prosecutor’s office. I can therefore assure her that we have consistently made our views plain on the lack of a need for a European public prosecutor’s office. We believe that there are more practical ways of dealing with these issues.
The right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) talked about the separation of powers. That is intrinsic to the question. My hon. Friend the Member for Esher and Walton (Mr Raab) made a point about how supranational organisations cut across the fundamental building blocks in our criminal justice system. That is why it is right that, if the House approves the motion tonight, we will not be opting in to the measures.
We note that the various Committees will be publishing their reports on the block opt-out, and we look forward to receiving them. The Government have committed to holding a further debate in the House on the final proposals for opting back in, in respect of the 2014 block opt-out. Further work is taking place on the balance of competences, and it will continue. My hon. Friend the Member for Esher and Walton talked about where competence should lie, and that question is informed by the ongoing work. We are taking evidence to inform the broader debate, but that should be seen as distinct from the exercise of the Government’s treaty right in respect of the 2014 decision.
My hon. Friend the Member for Daventry (Chris Heaton-Harris) mentioned the position of OLAF, the European fraud office. It is unfortunate that we have only recently seen proposals on the practical use of that office, but we believe that certain practical steps should be pursued as a result of their recent publication. My hon. Friend the Member for North East Somerset mentioned issues of competence, and the need for us to look carefully at any final agreed text that emerges in relation to Eurojust.
Given the yellow card that has been issued in relation to the European public prosecutor’s office, and the strong message that has been sent by a number of member states’ Parliaments in respect of this proposal, the Commission will need to reflect on this matter very carefully. It will also need to think about the Eurojust proposal, because of the interrelationship between the two. We will keep the House and the Select Committees updated as this matter progresses, but I very much hope that, in the light of the clear message from hon. Members tonight, the House will support the motion.
Question put and agreed to.
Resolved,
That this House takes note of European Union Documents No. 12566/13, a draft Regulation on the European Union Agency for Criminal Justice Co-operation (Eurojust), and No. 12558/13 and Addenda 1 and 2, a draft Regulation on the establishment of a European Public Prosecutor’s Office (EPPO); agrees with the Government that the UK should not opt in to the draft Regulation on the Eurojust at this time and should conduct a thorough review of the final agreed text to inform active consideration of opting into the Eurojust Regulation, post adoption, in consultation with Parliament; and further agrees with the Government that the UK should not participate in the establishment of any European Public Prosecutor’s Office.
Citizenship (Armed Forces) Bill (Ways and Means)
Jim Shannon (Strangford) (DUP)
This is a straightforward proposal. Along with the residence requirements for naturalisation comes the process of charging fees. It is only right that everyone in the United Kingdom of Great Britain and Northern Ireland should have to pay those fees, and members of Her Majesty’s armed forces or the diplomatic service overseas should also have to pay them. This measure concludes the price issue, and forms the last piece of the Citizenship (Armed Forces) Bill.
Question put and agreed to.
Business without Debate
delegated legisation
business of the house
Crystal Palace Park
Jim Dowd (Lewisham West and Penge) (Lab)
I am most grateful for this opportunity, particularly today. Lewisham is only part of my constituency these days, but I know from my hon. Friend the Member for Lewisham East (Heidi Alexander) that the Secretary of State for Health has been found by the Court of Appeal to have acted entirely improperly and illegally in seeking to close Lewisham hospital. I add that in passing; it is obviously not the main substance of my remarks this evening, and I do not expect the Minister to respond, but I doubt whether we have heard the last of that.
This debate is about “the Crystal Palace”. One of the business papers mentioned “Crystal Palace”, and I was stopped by a constituent in Sainsbury’s in Sydenham who told me, “I see you have a debate on Crystal Palace next week; they are in terrible trouble, and I reckon they are going to get relegated.” This debate is not about Crystal Palace football club, although I am a long-time supporter and one-time season ticket holder. Neither is this debate about the original Crystal Palace club, which was one of the founder members of the Football Association, which celebrated its 150th anniversary just last Saturday. It is the oldest and original football association in the world. It was then an amateur club, which went out of business in 1861; it was based in what we now know as Crystal Palace.
This debate is about “the Crystal Palace”, and perhaps I should have started the “the” with a capital letter in my request for this debate. As everybody knows from a long way back, this is one of the prime sites and locations for sporting excellence—not just in London, but in this country. The first FA cup finals were held at Crystal Palace and the national sports stadium was built there. It got its name from the relocation of the original building at Hyde park in the Great Exhibition of 1851. The building that was placed on the Sydenham hill side of what was then called Penge common was larger than the original that Joseph Paxton—later Sir Joseph Paxton—designed for Hyde park. The pictures make that clear. The construction in Hyde park was rather mundane; it looked almost like an out-of-town shopping centre compared with the magnificent structure built on the Sydenham hill side of Penge common.
Sydenham hill is the highest point in Greater London, although when it was built and opened in 1854 by Queen Victoria, there was no such thing as Greater London. The fact that it is the highest point in the whole area explains why, when it burned down on 30 November 1936, the fire was alleged to have been seen—depending on which account one reads and from where one was looking—from either five, six, seven or eight counties.
It is undeniable that the relocation of the Crystal Palace to that part of south-east London was instrumental in the development of the whole area, including Forest Hill, Sydenham, Penge and Norwood South, Upper and West, most of which are in my constituency. However, not only did the Crystal Palace arrive, but two separate railway stations arrived with it to accommodate the number of visitors who were expected. I shall return to that point later if I have time, in order to illustrate the concerns of today’s population.
I suppose that the ultimate success of the presence of the Crystal Palace in that part of south-east London is represented by the fact that the area is now known as Crystal Palace. One of my constituents once remarked to me on how convenient it was that they had managed to move the Crystal Palace to a place called Crystal Palace. I had to explain that it was actually the other way round.
The Crystal Palace moved to the area in 1854, and since the fire in 1936 it has undergone a number of changes of identity. The motor-racing circuit was very well used and highly thought of until the High Court ruled that, even back then, it was too much for local people. The motor racing died out in the early 1960s, although, as one who grew up in the area, I remember it clearly. Most famously, there was the Concert Bowl. During my dissolute youth, I attempted to go there to see Pink Floyd, but I could not get a ticket. I had to stay outside in Crystal Palace Park road and listen to the concert there. On the strength of that experience, I went out and bought a copy of “Atom Heart Mother”—but that is rather by the by.
We then fast-forward to the days when the Greater London council had the stewardship of the park and the site. Not much happened then. I suppose that the most instrumental event of recent years took place in 1986, when the GLC was abolished and the site was handed to Bromley council. At the time, I was a member of the council of the London borough of Lewisham. Crystal Palace is often exemplified as an area of Greater London that has few parallels, in that five boroughs have boundaries there within a space of 200 yards: Lewisham, Southwark, Lambeth, Croydon and Bromley, which is where the Crystal Palace park is now.
As everyone will know, the abolition of the GLC was seen as a highly political issue by those on both sides of the argument. We suggested, along with our colleagues in Southwark, Lambeth and Croydon, that the park should be transferred to a trust encompassing all five boroughs. It is not just a local park; it has a much greater resonance and a much greater significance than that. However, our proposal was resisted, and the park was handed lock, stock and barrel to Bromley council.
In 1989, Bromley came up with a scheme for the building of a hotel, a restaurant, shops and a pub. That culminated in the passing by the House of Commons of the Bromley London Borough Council (Crystal Palace) Act 1990, which limits development on the site. It consists extensively of metropolitan open land, so development on it without specific legal approval would be extremely difficult, and that it why the current proposals present problems for a number of people.
In 1995, Bromley council established a working group to revitalise the sports centre. In the late 1990s there was a bid for funds from the single regeneration budget, principally involving a leisure facility, a multiplex cinema. The bid collapsed. The Government called the plan in, and then let it go. As some Members may recall, in 1999 Swampy and his pals climbed trees and went underground in an attempt to prevent the clearing of the site for the development, which was eventually dropped in 2000. The multiplex proposal was scrapped.
The London Development Agency then launched a formal consultation, and appointed master planners for the park and its environs. The master plan was submitted and went through various processes until 2008, when it was approved by Bromley council. It was called in by the then Secretary of State, and there was an inquiry which was eventually resolved in favour of the plan. Although it was challenged in the High Court in 2011, the challenge was dismissed in 2012 and all appeals were dismissed in April this year. In July this year, leaks or releases—we can call them what we like, but these things never happen accidentally—were made about a scheme involving the Mayor of London, the London borough of Bromley and the ZhongRong Group. I am sure not many people in Lewisham West and Penge or this House have heard of the group. It has come forward with proposals to rebuild—or replicate, perhaps—the original Crystal Palace and to restore the gardens to the original standard that Sir Joseph Paxton had in mind when he finished the relocation back in 1854. That is an exciting proposal but it runs up against the Bromley London Borough Council (Crystal Palace) Act 1990, which as things stand forbids any such development.
Mr Ni Zhaoxing—I have never met him, but he seems a perfectly reasonable chap; I will refer to him as Mr Ni—has an extravagant and vaulting ambition probably worthy of Sir Joseph Paxton himself and all the others who were involved, such as Isambard Kingdom Brunel, who designed the water towers at the original Crystal Palace at Sydenham hill. Mr Ni’s ambition may well reflect the ambitious, extravagant and visionary image of people at the height of British Victorian industrial power.
I went to the launch of the scheme earlier this month, and the Mayor of London, Boris Johnson, was there, playing his normal shy and retiring role, and saying he would be happy to help if he possibly could, but he must not be dragged too much into it. That is strange, because other boroughs in our part of south-east London actually wanted Crystal Palace park to remain the responsibility of what became the Greater London authority. That was resisted by the Government before 1997, but now we have the Mayor of London involving himself along with the London borough of Bromley.
I should add a brief word about the leader of the London borough of Bromley, Councillor Stephen Carr. He kindly invited me to the recent briefings—not the ones back in the summer—including the press launch on Thursday 3 October. An advisory board has been set up to steer the project forward, although these are very early days. The board will include Councillor Stephen Carr, Hank Dittmar, who is a special adviser to the Prince of Wales—I presume on environmental matters—Sir Tim Smit, deputy director of Eden Regeneration and co-founder of the Eden Project, which has a huge national reputation, and Sir John Sorrell CBE, chairman of the London design festival and UK Trade & Investment business ambassador. All are clearly worthy people, but what is missing from the group and the consultation is anybody local to Crystal Palace and the surrounding area. The $64,000 question—perhaps now the $1 million question—is this: is this good or is this bad? People need to know what is in the best interests of the area and the park, because this may be the one and only opportunity to take a major decision for the future.
Let me quote from the Bromley borough council executive meeting of 16 October. It is safe to do so as this quote is from the public part of the proceedings; I have the confidential part as well, but I will not be quoting from that. It states:
“Ever since the 1936 fire, the future of this park has been unclear, however the need for significant investment in this regionally important park has always been recognised.”
It continued:
“It has always been unclear, even with the proposed ‘housing’ funds”—
from the master plan, which, as I say, was approved—
“where this investment would come from. In the absence of a commercial scheme and significant private sector funding it is widely thought that the approved Master Plan is unlikely ever to be implemented in full.”
The report continues:
“The park would remain in the freehold ownership of the London Borough of Bromley, and would remain an open and free public space for all.”
So far, so good. It goes on to say:
“At the heart of this proposal is the aspiration for the local community to have a strong role in running, managing and maintaining Crystal Palace.”
We would all say amen to that. However, we then get to the fact that Arup Associates, which has been hired by ZhongRong to oversee this project—I have no doubt that Arup Associates’ credentials are impeccable and that the firm is well used to large-scale civil engineering projects—estimates that it will be possible to draw an additional 2 million visitors to the palace and park per annum. That is 6,000 visitors a day, if they are spread out evenly. As we all know, that is not likely to happen; on some days there may be only 2,000, whereas on others there may be 10,000 or 12,000.
Crystal Palace and that part of south-east London are already congested and overcrowded, and the public transport links are full to the gunnels. The roads have no more space to accommodate anybody. Even though the plan includes a 3,000-space underground car park to get people out of the park, which is fine, how on earth are we going to move that number of people in and out of the area at any given time?
The restored park would be a public space for all to enjoy, and approximately 100 new jobs would be created there—that must be a good thing. It would increase the number of visitors, the footfall in the town centres and the expenditure there—that is another good thing. Some 1,000 jobs would be associated with the construction, and a further 1,000 associated with the operation of the palace and the other activities to which ZhongRong is keen to ensure local people have access.
The picture is very mixed. I am not one to look a gift horse in the mouth, but it is entirely reasonable to check whether it has four legs and some teeth. Given all the impact that this huge change is likely to bring to our area, how do we assess whether it is in people’s best interests? When the original Crystal Palace turned up on Sydenham hill, it brought two new railway stations and railway connections with it. The high-level station has now gone, following the demise of the original Crystal Palace, and we are left with just Crystal Palace station. It has strong links to London Bridge, Victoria, East Croydon and all points south, and in recent years the East London line has been put in, adding capacity. But things have changed; one of the first things Mayor Johnson did on being elected in 2008, or whenever it was, was to cancel the Tramlink extension to Crystal Palace from Beckenham. We are now being told that everything possible will be done to improve transport links. This scheme cannot work without considerable transport improvements and considerable investment in transport in the area.
I am just sketching out the ground, as these are early days. People who are for the scheme have contacted me, as have those who are against. Some people are against things that they do not even know will come into existence. The timetable for the development is as follows: by spring next year the design competition should have concluded; by autumn next year, those involved should be in a position to submit a planning application to the London borough of Bromley; if that is on track, they should have approval by autumn 2015; work should start on site in spring 2016; and we should have completion in 2018—I am available for the opening if they get that far.
I am delighted to see the Minister in his place. I want to ask three key questions of the Government and I hope he can answer them. In view of the likely scale of this development—I know that the design competition is still to be decided—how can the London borough of Bromley decide on a planning application which will clearly be in breach of the 1990 Act? Surely the Act would need to be amended, abolished or repealed before the council would be able to consider such an application. It could not possibly give planning approval to something that clearly breaks the law. Will the Government underwrite a full consultation with all local groups, citizens and neighbouring local authorities to ensure that all voices are heard so that we can make the most informed decision about this once-in-a-lifetime opportunity? This is a major departure from any previous planning guidelines or outlines and from the master plan for the park, so can the Minister assure me that if it were to move through all its stages and be approved by the London borough of Bromley, the Government would call it in for further inquiry and deliberation?
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
I congratulate the hon. Member for Lewisham West and Penge (Jim Dowd) for securing this debate on an issue of such dramatic importance for his constituents. In the short time left for my speech I want to make sure that I answer his questions, but I must first say that he is right that the Crystal Palace was one of those few iconic buildings. Even those of us who were not alive while it stood know what it looked like and think that it would be rather marvellous if this city had such a thing again.
It is, of course, tremendously exciting that somebody in the world thinks it is possible, sensible and affordable to rebuild some version of the building, although obviously in modern form. Nevertheless, as the hon. Gentleman points out, the proposal is at a very early stage and raises a huge number of complex issues for the developer and, critically, for the community in which Crystal Palace sits.
The first point to make is the one on which the hon. Gentleman concluded, about the need for consultation. All planning applications are better off if there is intense consultation at the earliest stage possible. A planning application on the scale that this is likely to be can succeed only if there has been consultation at every stage from the start, binding in not only local elected officials but as many local people as possible in public meetings, through exhibitions and through every form of consultation. I know that that is well understood by the Mayor’s office and by the London borough of Bromley, but the hon. Gentleman is quite right to emphasise the need for consultation. The Government will be very clear that such a proposal will have little chance of getting anywhere without consultation from the start.
Secondly, the hon. Gentleman made a point about the effect on transport infrastructure. Government policy is very clear that developments of any kind must be sustainable and one of the ways in which this scheme must be sustainable is by ensuring that the transport infrastructure is able to support the level of activity and movement generated. A development on this scale will have a dramatic effect on the transport infrastructure and although of course the transport infrastructure in that part of London is enviably good compared with that in some other urban areas in the country, it nevertheless cannot cope with an unlimited amount of additional demand. That will be an incredibly important part of any planning application and of the consultation to which we have just referred.
Finally, the hon. Gentleman asked how a planning application and the process of granting permission could be reconciled with the legislative obstacles he has identified. We have made it very clear to the Mayor of London and the London borough of Bromley that we are happy to work with them to try to resolve those legislative issues through whatever means necessary, although we hope that what they require of this House will be minimal. We remain ready to do that. It is sometimes possible to give planning permission subject to conditions, but I agree that it is unusual and perhaps unprecedented to give planning permission when one of the conditions is a change in the law. I would imagine that he is probably right that any necessary changes to legislation would need to be made in parallel with consideration of the planning application. As he points out, however, these are early days. We have not even seen an outline planning application, so we do not necessarily need to know right now how we will jump that hurdle if we get that far.
The hon. Gentleman is right that this is a tremendously exciting project for his constituents, for London and for the country. It is right that the London borough of Bromley and the Mayor have decided to embrace it and to bring in very high-quality firms and individuals as advisers. It is incredibly important that this is not an elite project and that it is carried out by, for and with the support of the hon. Gentleman’s constituents and all those who live close to that dramatic landmark. We can all see the potential, but we can also see some risks if there is any sense in which the project is visited upon a community by others who think it is a grand idea but will not have to live or work next to it.
The hon. Gentleman is quite right to stand up for his constituents and to continue to do so. I know that my Department will be happy to work with him in ensuring that that consultation takes place, that the transport infrastructure is adequate and that the planning process fully takes into account the opinions of his constituents.
Question put and agreed to.
Westminster Hall
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Hepatitis C (Haemophiliacs)
(11 years ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Paul Goggins (Wythenshawe and Sale East) (Lab)
I am grateful to have the opportunity once again to draw the attention of the House and of Ministers to the injustice that still faces those who in the 1970s and 1980s became infected as a result of treatment with contaminated blood products.
Let me say at the outset that, although I seek in this debate to highlight the particular issues and concerns of those with haemophilia who were infected with hepatitis C, I recognise, of course, that the issues affect others beyond that group. Many haemophiliacs received other infections, HIV in particular, and some were dual-infected with HIV and hepatitis C. Others were multi-infected by the range of other viruses to which they were exposed. Some haemophiliacs were treated with blood taken from donors who later died from CJD. Others did not have haemophilia, but were none the less infected as a result of their NHS treatment. I am sure that some who contribute to the debate later will refer to the experience of those who have been affected in those other ways, and a number of points I will make will have a broader relevance to those people’s situations.
The reason that I selected financial support for people with haemophilia infected with hepatitis C as a topic for debate is simple: it reflects the specific concerns of three of my constituents with whom I have been campaigning on the issue for 16 years. They are Peter Mossman, Fred Bates and Eleanor Bates, who is Fred’s wife. I pay tribute to their determination and the single-minded way in which they have worked with other members of the haemophilia community in pursuit of justice and truth.
I am delighted that you, Mr Dobbin, will oversee our proceedings this morning, although given your keen interest in the topic, I suspect that a bit of you would like to participate.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate my right hon. Friend on securing the debate, which is one of many over the years. Does he, like me, think and hope that the Minister will give positive answers this morning, given the many debates in the past, so that the people affected can experience justice?
Paul Goggins
I am grateful to my hon. Friend for that intervention. He makes precisely the point I was moving on to. I welcome the new Minister, the hon. Member for Battersea (Jane Ellison), to the debate and to her new responsibilities. Whatever else she achieves in her time as a Minister—and I hope she achieves a great deal—nothing would be more important than bringing a measure of justice to those who have suffered from such injustice over so many years. Lord Winston described it as the worst treatment disaster in the history of the NHS.
I am delighted that we are joined this morning by so many hon. Members from both sides of the House—particularly the hon. Member for North East Bedfordshire (Alistair Burt), who raised the issue again with the Prime Minister in a clear and determined way a few days ago. I am also pleased that my right hon. Friend the Member for Leigh (Andy Burnham) is in attendance for the start of the debate. It is unusual for a Secretary of State, or shadow Secretary of State, to attend an Adjournment debate in Westminster Hall. His attendance is appreciated; he is keeping a promise made earlier this year. My constituents have asked me to thank him this morning for his willingness to listen—not only now in opposition, but when he was the Secretary of State.
Andy Burnham (Leigh) (Lab)
I apologise, Mr Dobbin, for the fact that I cannot stay for the whole debate. I am here to show solidarity with my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), who has represented his constituents outstandingly, and with Peter Mossman and Fred and Eleanor Bates, whom I met in my office with my right hon. Friend when I was Health Secretary.
I want my right hon. Friend and his constituents to understand that the commitment I gave to them was not a one-off, convenient commitment, but a permanent one. If I were to find myself back in government, that commitment would remain. Does my right hon. Friend agree that there needs to be a further process of truth and reconciliation, so that those concerned have all the answers for which they are still looking?
Paul Goggins
I am grateful to my right hon. Friend and I agree with him entirely. There needs to be not only a review of the current financial arrangements, but a deeper search for the truth, to bring justice, an explanation and a profound apology to those who have suffered. I will make some remarks about that later.
I will not dwell this morning on the long history of the injustice, other than to remind the House that of the 4,670 people with haemophilia who were infected with hepatitis C or HIV, at least 1,757 have died from the effects of the viruses; I say “at least” because the number is almost certainly higher than that. Although it was recognised at the time that the use of imported blood products carried a very high risk, treatment continued and patients were simply kept in the dark. As people tried to get to the truth, they were met with a lack of honesty and deep disrespect. Their dogged persistence is remarkable.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
I congratulate my right hon. Friend on his excellent speech, the work he has been doing and obtaining the debate. I know that the debate and the figures he gave relate mainly to England. His late friend and mine—his predecessor, Alf Morris—would be proud of the work he is doing.
Would my right hon. Friend allow me to introduce one Scottish aspect to the discussion? In Scotland, the Penrose inquiry is taking evidence on a wider range of issues than has so far been possible in this House, including about what steps were taken to protect the public, given the clinical knowledge available at the time. Without delaying the action for which he urgently calls, would he take that on board and would the Minister reflect those views?
Paul Goggins
I am grateful for my right hon. Friend’s intervention. He is a fine campaigner on a range of issues, but on none more so than this. He did great work with my predecessor, the late Alf Morris. I referred to my 16 years of campaigning with Fred, Eleanor and Peter, but I was, of course, only picking up the baton; Alf had worked with them tirelessly for many years.
My right hon. Friend raises a pertinent point about Penrose, because when he reports no Government will be able sit back and do nothing. Profound questions will be posed by that report and they will apply every bit as much here as they do in Scotland. I am grateful to my right hon. Friend for his timely reminder.
In January 2011, two years after the independent inquiry led by Lord Archer of Sandwell, the Government concluded a review of the support available to those who had been infected with hepatitis C and HIV. Along with others, at the time I welcomed the additional lump sum and annual payments to those infected with hepatitis C who had reached the so-called stage 2—essentially, where cirrhosis has been diagnosed. Other improvements were made, but it was clear to many of us from the outset that for the vast majority nothing would change; they would continue to suffer without the help they needed and were owed. That suffering is deepened by the confusing arrangement of the funds that are meant to help them.
In April, the Minister’s predecessor attended a meeting of the all-party group on haemophilia and contaminated blood. I see a number of right hon. and hon. Members here who were present at that meeting; they will remember that it was fairly stormy and that a range of views were expressed about the funds. Those present will remember what was said. I made a note of some of the comments: “It is utterly bizarre....so many funds”; “a nightmare of bureaucracy”; “something is badly wrong”; and “it is not acceptable to have to go cap in hand”. Those comments were all made by the Minister’s predecessor, leaving those who attended wondering why she had not come to the meeting with solutions rather than joining in the chorus of criticism.
My constituents want one fund for haemophiliacs with hepatitis C, essentially bringing together those parts of the Skipton Fund and the Caxton Foundation that currently administer the limited financial support available. They believe that that would reduce bureaucracy and, more importantly, enable those who manage the funds to increase focus on their specific needs. Although they acknowledge others’ needs, they want and are entitled to a better response than they currently receive.
Within the new fund, the immediate priority should be a complete overhaul of the stage 2 assessment. Currently, the lump sum and annual payments start only after hepatitis C has caused cirrhosis. Three out of four people registered at stage 1 do not progress to stage 2, even though they, too, experience extreme and severe symptoms, including great fatigue and often painful bleeds.
The discrimination between those at stage 1 and stage 2 has been brought home to me through my constituents’ experience. Over the many years I have known Peter Mossman and Fred Bates, I have seen them on good days and bad. I have seen them in pain and distress, but I am aware that their most painful moments have been at times when I have not seen them, because they have not been able to get out of bed and out of the house. They suffer similarly, but one of them is at stage 1 and one is at stage 2.
The discrimination is as incomprehensible as it is unjust, and it has enormous consequences. Those at stage 1 receive a one-off payment of £20,000; those at stage 2 receive an additional £50,000 lump sum plus an annual payment, which is currently £14,191. The Minister should scrap this crude distinction and urgently consider implementing a wider assessment of the health and well-being of each individual. The payments are intended to help people cope with the difficulties that they face, and more should benefit from them.
David Simpson (Upper Bann) (DUP)
Like others, I congratulate the right hon. Gentleman on securing this important debate. This issue started in the 1970s, so the problem has now been with us for 43 years. More than 80% of the individuals with a bleeding disorder did not benefit from any ongoing payments for a long time. That must be rectified. The Government must review immediately how the issue is handled.
Paul Goggins
I am grateful for the hon. Gentleman’s support for that argument. Differentiating between stage 1 and stage 2 creates a false and discriminatory division. It is not acceptable, and it does not help the many people registered at stage 1 who are not at stage 2 because they have not been diagnosed with cirrhosis, but who still often live in great pain and distress. It is vital that they get the financial and other help that they absolutely need.
Currently, the Caxton Foundation must try through discretionary payments to address the urgent needs of those at both stage 1 and stage 2. The fund simply does not have enough money, and as decisions are made about whose need is greater, recipients feel as though they must beg even for essentials. Ministers will need to obtain and share more accurate data, particularly to assess how many of those registered at stage 1 have died and what the likely financial costs would be of a revised arrangement between stages 1 and 2. That information is vital, but one fund with the resources to make lump-sum and annual payments to all those who need them is an essential first step.
Other issues must also be addressed. People with or without haemophilia who have been infected with hepatitis C should be exempt from the employment and support allowance work capability assessment and placed automatically in the support group. It heaps indignity on injustice to put them through the Atos back-to-work test when work is simply impossible for the vast majority of them. Will the Minister hold urgent discussions with the Secretary of State for Work and Pensions with a view to creating that exemption? It would be compassionate, relatively inexpensive and a clear indication that she means business.
I also ask the Minister to consider the specific needs of those, such as my constituent Eleanor Bates, who care for their loved ones. The Caxton Foundation is meant to help them, but they frequently feel that they are last in the queue. Their lives have also been affected deeply by their partners’ infection, and their needs as carers must be addressed.
Reforming the funds and providing a fairer, more effective system of financial support would be an important step in the right direction, but no debate about the issue should omit the need for a proper acknowledgement of what took place and why, and a profound and sincere apology for the suffering created by the disaster. Campaigners still want a public inquiry, and I support fully their calls for transparency and accountability.
If the Government continue to set their face against a formal public inquiry, they should, in my view, consider other mechanisms established in the recent past to get at the truth of an historic wrong. Two years ago, the Prime Minister commissioned the highly respected lawyer Sir Desmond de Silva to undertake a full investigation into the circumstances surrounding the death of the Northern Ireland solicitor Pat Finucane in 1989. Although this approach was not welcomed by Mr Finucane’s family, Sir Desmond had access to all the intelligence files, Cabinet papers and earlier reports, and concluded that there had been what the Prime Minister described last December as “shocking” levels of state collusion.
In relation to another tragedy that took place in 1989—I am pleased that my right hon. Friend the Member for Leigh is still here—the Hillsborough independent panel, which was welcomed by the families of the 96 people who died at the FA cup semi-final, also demonstrated a determination to get to the truth. As a result of the report, inquests have now been reopened.
Whatever Ministers decide to do in this case must, of course, be discussed with those whose lives have been directly affected. Continuing to do nothing is simply not acceptable. A serious Government-backed inquiry must be held, with access to all the remaining records and the power finally to get to the truth of what happened and why. In addition to fair financial support, those who have suffered so much are still owed a full explanation and a sincere, profound apology.
Jim Shannon (Strangford) (DUP)
I congratulate the right hon. Member for Wythenshawe and Sale East (Paul Goggins) on bringing this important matter to the House’s consideration. I will speak specifically on behalf of my constituents, as I think will everyone who speaks today, from a heartfelt understanding of the problems that those constituents have faced for a number of years. My hon. Friend the Member for Upper Bann (David Simpson) illustrated the time scale. If ever there were a powerful case for the Minister to answer, this is one. Many of the speeches made today will be impassioned. I welcome the Under-Secretary of State for Health, the hon. Member for Battersea (Jane Ellison) to her position, and I look forward to working together on many issues in future.
The background to the case is clear. I have spoken to constituents of mine who are victims. Some of my constituents live daily with these illnesses through no fault of their own but rather as a result of the Government’s inaction at a time when action was important. My constituents have sent me a briefing, and I have relied on them for information as well as for the personal details that they have given me, although I do not intend to mention any names out of respect for confidentiality and personal issues.
The Archer inquiry investigated the fact that between the 1970s and late 1980s, 4,670 people with haemophilia were infected with hepatitis C through treatment by the NHS that they loved and respected, which ultimately, unfortunately, let them down. Of those, 1,243 people with haemophilia were also exposed to HIV, as the right hon. Gentleman said. Almost half of those infected with hepatitis C and almost three quarters of those co-infected with HIV have since died and many have tragically left families behind. When looking at the impact on the individuals, we can never forget about the effect on their families; many individuals have experienced poverty and discrimination as a result of their infections. People, either through mistrust or lack of knowledge, sometimes unfairly discriminate against those with infections. The provisions recommended by the Archer inquiry would offer appropriate support and compensation to those affected and would ensure that steps were taken to improve blood safety.
The previous Government argued that the reason why financial support was not made available at comparable levels to those in the Republic of Ireland, for example, was that the disaster affected the two countries differently. I am unsure how that was worked out. Perhaps the disaster was measured in numbers, but the disaster is the same to each individual and each family. No-fault Government payment schemes were established to provide support to those affected. The Archer inquiry, which was non-statutory and funded from private donations, reported in February 2009 on the Government’s response. Among its recommendations was a call for reform of support for those affected in line with the scheme used in the Republic of Ireland. If we had had in Northern Ireland and the rest of the United Kingdom a scheme similar to that of the Republic of Ireland, our constituents would have been much more satisfied. What does the Minister think about the Republic of Ireland’s scheme? Is it possible that we can try to match it?
Despite the Government’s announcing on 10 January 2011 an increase in payments to some of those infected with hepatitis C, what has been put in place is not adequate to support people through their illnesses. The Government’s scheme now has two stages, as outlined by the right hon. Member for Wythenshawe and Sale East. A first stage payment of £20,000 is available to eligible people. Following that, successful recipients of the first stage payment whose hepatitis C infection has led to advanced liver disease can receive a second stage payment of £50,000. Those who have received the second stage payment are also entitled to additional annual payments of £14,000, paid monthly or quarterly. The money may look good and it sounds like a lot of support, but, as always, there is more than meets the eye to the press release. As the saying goes, the devil is in the detail, and that is clearly the case here. The Hepatitis C Trust supplied an interesting briefing and is calling for a rethink of the strategy and policy. The trust, with which I certainly agree, asks that the first and second stage categories be removed. As a constituent of mine said, the payment can never compensate for what has happened, but it can offer support and help people to adjust to and live a life affected by it.
People infected with hepatitis C can experience severe symptoms, including extreme fatigue, depression, aching limbs, headaches and abdominal pains, which may mean that they are unable to work for long periods of time. The right hon. Member for Wythenshawe and Sale East referred to Atos in his speech—I think it was also mentioned in an intervention. The situation of people who are unable to work for long periods of time needs to be understood. Symptoms can lead to difficulties in holding down a job and receiving an income. Sufferers rely on help from family and sometimes from other carers, and the fact that the annual sum starts only when a person’s hepatitis C has caused cirrhosis does not take any of that into account. Understanding the problem is the crux of the issue. The briefing I received from the Hepatitis C Trust put it succinctly:
“Some patients without cirrhosis are far more symptomatic than some who have reached that stage. Indeed, some patients die whilst still in stage 1. Therefore there should be no distinction between stage 1 and stage 2 payments for people who have been infected with hepatitis C through contaminated blood. They should be entitled to the full and on-going support immediately.”
The second point raised in the briefing is that there has been no Government apology to date. The right hon. Member for Wythenshawe and Sale East referred to the Pat Finucane case and the apology that the Prime Minister made, so I urge the Minister to consider an apology for those infected, who have suffered many years of illness as a result. Having listened to some of the apologies, which should never have been uttered, that have rolled off Government Ministers’ tongues to pacify and placate people for political gain, I find it difficult to believe that there has been no Government apology. I have sometimes heard Members of this House and the Prime Minister apologising on my behalf when no apology was needed and yet here, when there clearly was a fault and when innocent people lost their lives following treatment by the NHS, mouths seem to be suddenly closed. I cannot understand that mindset. A mistake was made that has cost lives and has cost other people the price of living with horrific diseases, and if that does not deserve a heartfelt apology then I am at a loss to think what does.
Mr Gregory Campbell (East Londonderry) (DUP)
Does my hon. Friend agree that what sufferers and their families need are empathy, an apology, to which he has alluded, and a commitment to ongoing support for the remainder of their days? If they saw that coming from the heart of Government, we would have accomplished a significant amount of what the right hon. Member for Wythenshawe and Sale East (Paul Goggins) and his predecessor have sought to achieve.
Jim Shannon
I thank my hon. Friend for that contribution, which refers to something that we would all want to see. I am reminded of what my mother told me as a child: “Compassion is your pain in my heart.” She was referring to an understanding of the problems facing other people, which, in a way, is why we are here. We are here not just because we want to be MPs, but because we are privileged to be elected by our constituents. We see their problems and we must illustrate and expand those problems in this great House, of which we are privileged to be a part.
Grahame M. Morris (Easington) (Lab)
I congratulate the right hon. Member for Wythenshawe and Sale East (Paul Goggins) on securing a debate on this important issue.
What are the thoughts of the hon. Member for Strangford (Jim Shannon) on the role of specialist hepatitis C nurses in providing support to sufferers who are haemophiliacs and more generally? The NICE guidelines suggest a minimum of one specialist hepatitis C nurse for every 40 patients in the community and one such nurse for every 20 patients in a hospital setting. Does the hon. Gentleman think that the Government’s plans to transfer resources through the clinical commissioning group allocations will help or hinder the improvement of support for hepatitis C sufferers?
Jim Shannon
I thank the hon. Gentleman for helpfully highlighting the role of specialist nurses. I hope that the Minister will be able to give us an indication of the importance of the role of nurses and therefore the importance of retaining them and ensuring that the numbers are correct.
Just a few minutes spent reading the stories of victims and their families on the taintedblood.info website brings a lump to the throat. In this House, where we have the privilege to represent our constituents, we cannot continue to leave the families behind. I wholeheartedly support the removal of the two-tier system, which would entitle people to an annual sum to help them to cope with the side effects of this terrible disease and would take a little pressure off the families who are faced with watching their loved one fade away before their eyes. It is well past time that we do the right thing by those affected, and that will not be done by separating and segregating those infected by the same disease. I urge the Minister to take on board what is said today by the right hon. Member for Wythenshawe and Sale East and others and to do the obvious and right thing by providing the apology and response that we need.
Several hon. Members rose—
Jim Dobbin (in the Chair)
Order. I intend to call the shadow Minister at 20 minutes to 11 and five or six hon. Members want to speak, so I ask them to watch the length of their speeches before I have to impose limits.
Alistair Burt (North East Bedfordshire) (Con)
I congratulate the right hon. Member for Wythenshawe and Sale East (Paul Goggins) on securing this debate. My hon. Friend the Member for Cardiff North (Jonathan Evans) and I think that this is the first debate on this subject since the death of Lord Morris of Manchester. It is therefore highly appropriate that the first debate since Alf’s death was proposed by the right hon. Member for Wythenshawe and Sale East. I welcome my hon. Friend the Member for Battersea (Jane Ellison) to her new position as Under-Secretary of State for Health. Those of us who have followed her career for some time know that that is richly deserved. Perhaps the honour to set the seal on something that has been going on just that bit too long will fall to her.
Jonathan Evans (Cardiff North) (Con)
My hon. Friend and I had the honour of being in government more than 20 years ago. Looking back over those years, does he share my view—from our ministerial experience, although it was not in the Department of Health—that the outcome in this area has been less than satisfactory and that the issue should have been resolved a long time ago?
Alistair Burt
My hon. Friend is right. Hanging over the issue, particularly for those of us who were Ministers in successive Governments, is a sense that not enough has been done. No blame can be laid at the door of Back Benchers who have campaigned and done so much, and in their respective ways, Governments have sought over time to do something about the issue, but we are still here because of the overwhelming sense that whatever has been attempted has just not been enough.
One reason I raised the matter on the Floor of the House with the Prime Minister the other day was to capture that sense. Let me say more about that, but I shall try to be brief. I had a meeting with the then Minister with responsibility for public health, my hon. Friend the Member for Broxtowe (Anna Soubry), a few months ago. All of us have had meetings with the successive holders of that ministerial role over time. The history is familiar to us, but there is an overall sense that whatever has been tried—whatever honest attempts Governments have made—has just not been enough.
I supported the inquiry by Lord Archer of Sandwell, and in 2010, I seconded the early-day motion that called for the passage of the Bill that Alf Morris had introduced in the Lords to put into effect the recommendations of that inquiry. I was disappointed that those provisions were not put fully into effect, although the incoming Government made the changes mentioned by the right hon. Member for Wythenshawe and Sale East. We all welcomed that at the time, while recognising that it was still not enough.
Why are we making another attempt now? As has been made clear by the presence here of the right hon. Member for Leigh (Andy Burnham), there is now a different attitude towards uncovering past wrongs. The reason why I put the case so clearly to the Prime Minister is that his record in dealing both with the aftermath of the Hillsborough panel and with Bloody Sunday has demonstrated that he is a Prime Minister who is using his position and authority to right the wrongs of the past. Bearing in mind that he has a constituent affected by the issue, we know that he has a personal interest. That combination of circumstances perhaps means that the person in place has the determination to right the wrongs of the past. If information can be put together properly, something might therefore be done.
The sense of closure that must be achieved is palpable to all of us with affected constituents. I am here because of my relationship with a good—double-infected— friend, who has informed me about such matters over the years and for whom I desperately want to achieve something.
What has got wrong and what can we put right? The first point is that the process has taken too long: since the circumstances originated, it has all taken too long.
The second point relates to accepting that something has gone wrong. Undoubtedly, Ministers have said so and made that clear, but the Government’s acceptance of something having gone wrong has not been accompanied by the fullest disclosure of their full part. Even when the previous Government responded to the Archer inquiry— they published their response on 20 May 2009—they still, in relation to the release of documents on their website, stated:
“Further papers have been identified, which are being released today.”
In 2009, relevant papers were still being found and put in the public domain. The Government added the claim:
“We do not believe they add to our knowledge”.
Well, that is for other people to judge. All this is governed by a very real sense that not enough has been disclosed. The current Penrose inquiry, which has been mentioned, may provide an opportunity to revisit that matter.
The third point is that the process has been too divisive. Sufferers have been inadvertently set against other, being asked, “What have you got—hep C, or hep C and HIV, or some other variant?” It should not be like that. Everyone has suffered because they were all infected by the same process at the same time, and efforts should not be made to divide people.
The fourth point is that the premise has been wrong: it just does not work to use charity law to deliver support that ought to be the Government’s responsibility. Efforts made over the years to put matters right and make changes have not done the job. The premise needs to be scrapped—it should not be there—and colleagues have mentioned that the difficulties of separating stages 1 and 2 from hepatitis C only create new barriers and yet more unhappiness and anguish.
The problem about the Macfarlane Trust, which deals with double-infected patients, is that there is a conflict between whether it should act on behalf of the Government in disbursing funds or—as it should do—on behalf of the beneficiaries: arguing for as much support as possible and banging the drum for them. I sense that there is a conflict, because the trust is not doing that, so it is not doing its job.
Following up the Prime Minister’s response to my question, I will have an opportunity to meet him in a couple of weeks’ time, when I will be accompanied by my constituent. I hope to meet colleagues from all parties before that, just to get our lines straight, so that we can have a good go at this.
I say to those—the Minister and her officials—who will brief the Prime Minister, “Go for it this time. Don’t miss this opportunity.” There will be all the stuff in the Department about the difficulties and the things that cannot be done. They should not look at what cannot be done, but at what can be done. This is her and her Department’s chance, on behalf of those who did not get a chance in the first place, so let us go for it.
We need a proper apology and acknowledgment by the person from whom it will mean most, as well as some form of inquiry. I liked what the right hon. Member for Wythenshawe and Sale East said about doing that differently. The Government have got to take part in it, and questions must finally be answered. There should be an acknowledgment that the compensation system and the various trusts are just not working and that there must be a new system.
It is not for me to say what the figures for compensation should be, but in recent years, we have learned that we live in an entitlement culture: if someone walks away from a major job in a big corporation, their wallet is well padded; if someone walks away from a public sector job in the BBC, or even in some local authorities and public bodies, their wallet is well padded. What has happened to those who were wronged by the state?
To conclude, the cost of caring for the needs of those affected by the worst treatment disaster in the NHS are quantifiable; the laying to rest of a tragic incident and the righting of a wrong are priceless.
Diana Johnson (Kingston upon Hull North) (Lab)
It is a pleasure to serve under your chairmanship today, Mr Dobbin. I congratulate my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) on securing the debate on this very important issue. As he said, he has campaigned for 16 years to bring justice to this community. He set out clearly the key points about the history of what has happened and the issues that are still outstanding.
As the co-chair of the all-party group on haemophilia and contaminated blood, I am delighted to see so many right hon. and hon. Members in Westminster Hall. I particularly welcome the Minister to her role. I am sure that, like her two predecessors as Minister with responsibility for public health, she will develop a keen interest in the issue and get to grips with the points that the community still want addressed.
Although health is a devolved matter, I hope that the Government will look at what is happening north of the border and the recommendations of the Penrose inquiry that are expected in the spring of 2014 and carefully consider the Scottish Government’s response to those recommendations and the lessons that we can learn in the rest of the United Kingdom.
I want to talk about four key issues that my constituent Glenn Wilkinson, the chair of the Contaminated Blood Campaign, has asked me to raise in this debate and that relate to the financial support given to this community. I want to pay tribute to his passionate commitment to seeing that justice is done. I agree with other hon. Members about the need for a much broader and deeper review of what has happened, including a public inquiry into the whole disaster.
The first of the main issues about financial support is the Caxton Foundation application process. There is general dissatisfaction with that organisation, which has been given responsibility for grants to people with hepatitis C who have received stage 1 payments from the Skipton Fund. The Caxton Foundation has given a number of assurances that the application process will become less complex, less stressful and quicker, but when we talk to the community, it says that the grant application is not improving and that, in some cases, it is becoming worse. I fully understand why many people feel that a grant-based body is not what this community deserves, but until we have a different approach, we must make the system work better for those for whom it was set up.
I have some suggestions for the Minister to consider. First, we need a clear list of what grants will be given for published on the website. The lack of clear criteria means that people feel that they are often begging. Secondly, we need a simpler application process. At present, people tell me that they believe they have applied for something only later to find that they have to fill in further forms. That feels like moving the goalposts mid-way through an application process, and it is not fair.
Thirdly, I want to see a clear statement on means-testing. At present, it is my understanding that the Caxton Foundation is not having to means-test most applications, and some payments, such as the winter fuel payment, are paid to everyone. Why is the foundation asking applicants to complete intrusive census forms, which ask for incredibly detailed information about the circumstances of an individual or a family?
Fourthly, we need decisions about applications to be reached in a timely fashion, and a clear target should be set. Possible further measures could improve the efficiency and functioning of all the funds. Will the Minister consider the staffing levels in the schemes, because there is a restriction in place? There is also a need to look again at the availability of financial resources. The Department could introduce some support in kind. It could offer to second a public health doctor to the funds, to complete an assessment of beneficiaries’ needs. That has never been done, and it would be helpful. The Department might also bring to bear its experience of procuring computer and telephone systems. The previous Minister with responsibility for public health, the hon. Member for Broxtowe (Anna Soubry), agreed to review the grant-based system because she recognised that it was demeaning. Will the Minister comment on the progress of such a review?
Hon. Members have already mentioned the unfairness of the two-stage process. I wrote to the previous Minister, asking her to set out the evidence for separating people into the two stages. In particular, I wanted to understand
“whether the rationale for awarding payments to Stage 2 sufferers is based on a desire to support these with the increased costs incurred because of the disease or to compensate them for the increased risk of dying.”
In her letter back to me, she argued that the decision was based on an
“expert review of the evidence”
and that
“the decision was made not to introduce recurrent payments for all as there is a wide spectrum of illness associated with chronic hepatitis C infection.”
Let me put to the Minister three reasons why that argument does not hold up. First, the distinction is not a clear one; there is no blood test. It is a matter of progression, which is not easily determined. That issue is exaggerated by the fact that it requires a liver biopsy to ascertain the level of liver damage, and that, in itself, is potentially life threatening.
Secondly, there is increased evidence that hepatitis C is more than a liver disease. Other Members have already said that a range of symptoms have been identified including fatigue, joint problems and mental health issues. Thirdly, the fact that mortality rates are higher among stage 1 sufferers than stage 2 sufferers seems to be a compelling argument why such an artificial distinction should not hold.
The Contaminated Blood Campaign has committed many hours of research to get to the bottom of the expert evidence. When Professor Brian Gazzard, who is chair of the expert panel, was asked about the matter, he said that they had never discussed the two-stage system; in fact, the experts were expressly asked by the Department of Health not to discuss it. Charles Gore, the chief executive of the Hepatitis C Trust, who was also one of the experts used by the Department of Health, has stated that the two-stage approach is an arbitrary system and that he knows of people who suffer more in stage 1 than others do in stage 2. Will the Minister set out—if she cannot do it now, perhaps she could write to me—what the expert evidence is, so that we are clear about how the decision was reached?
I have two other matters to discuss briefly. On the number of people who are affected, my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) asked a parliamentary question about the number of Skipton stage 1 beneficiaries, which is unknown. Will the Department of Health take the necessary steps to identify how many state 1 sufferers are still living? That could be done through contact information that is still held by the Skipton Fund and/or through information now held on census forms by the Caxton Foundation.
On hepatitis C and HIV, I absolutely agree with what the hon. Member for North East Bedfordshire (Alistair Burt) said about how we set different parts of the community against one another. The list of anomalies between those infected with hepatitis C and those with HIV and their family members continues to grow. The imbalance of the system now operated by the schemes is such that some family members will get assistances and others will not. That area needs to be considered, especially because HIV and its treatment have changed considerably over the past 20 years. That needs to be recognised.
Finally, I would be delighted if the Minister accepted an invitation to come to a meeting of the APPG on haemophilia and contaminated blood.
Sir Nick Harvey (North Devon) (LD)
It is good, Mr Dobbin, to have the opportunity to contribute to this debate, and I applaud the right hon. Member for Wythenshawe and Sale East (Paul Goggins) for initiating it. It is also good to see the breadth of support from across the Chamber.
I represent my constituent, Sue Threakall, who has campaigned for many years with the Tainted Blood campaign and is currently the chair of that campaign. It has taken an awfully long time to get even as far as we have today. I very much support the comments that other Members have made about how unsatisfactory the situation is, even now.
I commend the right hon. Gentleman on a powerful but well measured and well judged speech. Health Ministers in Governments of each colour have, on many occasions, acknowledged that haemophiliacs are an exceptional and specific group of people affected by the contaminated blood scandal and that they merit special treatment in light of their tragic circumstances. As we know, with the passing of the years, those tragic circumstances mean that such sufferers are becoming fewer and fewer in number, and they deserve justice following a 30-year campaign, which has yet to achieve a full acknowledgement —let alone an apology—from the Government for what happened.
Today’s debate focuses on the haemophiliacs who were infected with hepatitis C—indeed, all but a tiny number of haemophiliacs receiving those blood products were infected with the virus. However, few, if any, haemophiliacs escaped with a single infection; most were exposed multiple times to multiple genotypes of hepatitis viruses, along with many other types of pathogens—hepatitis A, G, D and B for example. Many are super-infected.
It has been proved that infection with both HIV and hepatitis C exacerbates the progression of each virus. It is time now to look at the wider pictures. Haemophiliacs, many of whom have been infected by multiple viruses, desperately need additional support and proper needs assessments. As a community, they were, over time, knowingly exposed to such viruses, despite the growing warnings.
When we look back at what happened, it is worth remembering that the first warnings were given to the Department of Health in 1958 and yet, as late as 1984, we were still importing blood from America that we knew had been collected in American prisons. Even another five years after that, we were still importing blood supplies about which we knew very little. It is incredible that all these years later, in 2013, we are still having debates in Westminster Hall to try to bring about justice for this group of patients who were scandalously let down by our national health service.
The right hon. Member for Wythenshawe and Sale East made a good point in saying that there has been clear resistance for a long time to having a full-blown public inquiry. He also made good points about the opportunity to go about having one in a slightly different way, with an inquiry of some sort being given full access to all the relevant facts. Such an inquiry would stand a very good chance of getting to the truth of why the warnings were ignored for all this time.
Grahame M. Morris
The hon. Gentleman is making some very important points, many of which I agree with. However, I seek his views on the privatisation of Plasma Resources UK, the UK’s plasma laboratory service. One of the reasons why that was acquired by the last Government was to ensure safe supplies of, among other things, factor 8. Does he think that there is a risk involved in that privatisation, particularly in light of the evidence of what has happened—tragically—to haemophiliacs?
Sir Nick Harvey
The hon. Gentleman makes an interesting point, and there will be anxiety on that front in many quarters. We have to hope desperately that what he is suggesting does not come to pass, because we are going to have to learn the lessons of the past. It is essential that we have proper controls over this sector for the future.
A number of hon. Members have referred to the means by which support is given to the sufferers and their families, and some good points have been made about the two-stage process effectively being a two-tier system. There were also some very sensible suggestions about Atos and the all-work test, because the fact of the matter is that the current system of financial support is patchy and insufficient. The Government need to revisit the issue urgently.
The challenge is partly for the new Health Minister, my hon. Friend the Member for Battersea (Jane Ellison), whom I welcome to her post, but it is also a matter for the Department for Work and Pensions. It must recognise the unique circumstances of this community as a whole and come up with a comprehensive settlement once and for all, so that the victims, the widows and the families affected by the tragedy can get on with the rest of their lives.
I agree very much with those who have paid tribute to the current Prime Minister for having been willing to go into events of the past. He has not always been universally praised for doing so, but he has gone and tangled with some tricky issues from the past. This is another such case and he would be well advised to do the same with it. We have to learn lessons from these tragic events, put things right now and ensure that nothing similar can happen again.
Jim Dobbin (in the Chair)
We have two speakers left and approximately 15 minutes for them both.
Mr Andy Slaughter (Hammersmith) (Lab)
Thank you, Mr Dobbin, for calling me to speak. It is a pleasure to be here in Westminster Hall under your chairmanship.
I, too, thank my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) for securing this debate and for his speech. I welcome the Minister, the hon. Member for Battersea (Jane Ellison), to her post. This is the second Westminster Hall debate in two weeks that I have taken part in and she has responded to, so she has a very full in-tray. Nevertheless, I urge her to study her brief on this issue and, as my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) said, to meet the victims of the contaminated blood scandal and their MPs.
Most importantly, the Minister should come up with a proposal for resolving the remaining injustices on this issue. I am sure that she will; she has a reputation for being thoughtful and open-minded on such subjects, but she will have heard from right hon. and hon. Members today that this problem becomes more pressing with every year that passes.
I am afraid that, as my hon. Friend the Member for Kingston upon Hull North said, the cause was somewhat set back by the meeting that the previous Minister, the hon. Member for Broxtowe (Anna Soubry), had with the all-party group on haemophilia and contaminated blood earlier this year. It is no exaggeration to say that it is the worst meeting I can remember in eight years of going to such meetings. The previous Minister was completely unprepared in her brief; she shared the all-party group’s concerns but had no solutions whatever to address them. That meeting was attended by 20 MPs and peers, with 20 others giving their apologies. The number of Members who take part in the frequent debates on this issue shows the level of concern among all parties about it.
This is a great injustice, which successive Governments have failed to address; in so far as they have attempted to address it, they have done so in a miserly and bureaucratic way. An inquiry has been refused, and responsibility has been refused, by Government, and those things are to be deplored.
In the very few minutes that I have to speak, I wish to introduce one additional topic. My right hon. Friend the Member for Wythenshawe and Sale East has rightly framed this debate in terms of contaminated blood and hepatitis C; understandably, the good briefing from the Haemophilia Society has done the same. However, the briefing also refers to co-infection with HIV.
When the Minister looks at these issues, I urge her not to forget those who have been infected, or co-infected, with HIV as a consequence of contaminated blood products. Of the 1,252 people who have been infected with HIV in this way, 932 have died so far. Among the 322 of those people who are still living, one of them is my constituent, Andrew March, who was contaminated at the age of nine. He is now 39, so his entire life has effectively been ruined. He has been a staunch campaigner. He was the applicant in the judicial review proceedings on this matter, and yet after 30 years he is still waiting for any proper redress.
I feel strongly that this issue is the responsibility of Government, and the hon. Member for North Devon (Sir Nick Harvey) was also clear on that. To some extent, the admission of liability is not the central question. The previous Minister wrongly said that the reason why proper payments were made in the Republic of Ireland was that there was an admission of liability. In fact, payments were being made there before the admission was made, as the hon. Member for Foyle (Mark Durkan) pointed out very clearly, having a clear knowledge of what happened; the hon. Gentleman is not here today, but he has done a lot of work on this issue.
We do not need to get tied up in those matters of liability, but personally I would like an admission of responsibility from the Government, because, for some of the reasons that have already been given, much more could have been done. In the 1970s and 1980s, there was a delay because of a failure to see what medical knowledge was showing about contamination. Even when that contamination was known, there was a failure to treat products so that they were no longer harmful.
My final point is about funding. Reference has already been made to the Skipton Fund in relation to hepatitis C, but there are similar problems with the Macfarlane Trust. I have been told that it is effectively falling apart; that the review of its probity, of its success, has been ignored; that there is very poor communication between it and sufferers; and that it is underfunded.
The result of all that is that people die. People die because they are not getting sufficient treatment or sufficient medication that they need to deal with their conditions. HIV is a treatable condition, but for those who have serious health problems it can still be fatal and that issue is not being addressed. In the short term, I ask the Minister to look at both the lump sum and ongoing support payments, but in the longer term what we need is a full and final settlement.
I suspect that many Ministers, particularly junior Ministers, wonder how much difference they have made on a lot of issues when they finally leave their posts. However, I also suspect that this is one discrete area, with a defined number of victims, where the Minister could make a difference if she chooses to put her mind to it, in a way that some of her predecessors have not.
Jessica Morden (Newport East) (Lab)
A Welsh member of the all-party group on haemophilia and contaminated blood recently told me that every meeting and correspondence that it has with the Government ends with the words, “The Minister will look into this.” Does my hon. Friend agree that a promise really to get to grips with this issue now would be incredibly important, not least for Colin—aged seven, from Newport—who died in my constituency from having contaminated blood? We must also remember the very young victims whom we are campaigning for.
Mr Slaughter
I am grateful to my hon. Friend. I know that those views are shared by many Members on both sides of the House.
We are probably not looking for answers today, although we will listen to what the Minister has to say. She has heard clearly that we can do more than just look into the issue: we can achieve results for the remaining victims of these terrible diseases and their families.
Nadhim Zahawi (Stratford-on-Avon) (Con)
I am grateful for this opportunity, and I congratulate the right hon. Member for Wythenshawe and Sale East (Paul Goggins) on securing this important debate. I know that many colleagues feel passionately about the issue. Indeed, one can feel little else when one realises what a long and painful shadow has been cast on the haemophiliac community. They are people who put their faith in a system that has let them down.
I welcome the points raised by other right hon. and hon. Members on the anomalies in financial support for those who contracted hepatitis C. Indeed, those issues have affected one of my own constituents, Mr Dennis, who was infected with hepatitis C in the 1980s and has since been diagnosed with polyarthritis and, most recently, with liver cancer. He has raised with me on a number of occasions the lack of additional support for those with tertiary conditions such as polyarthritis, as well as his difficulty in obtaining disability benefits, for which previous assessments have been based on his mobility rather than his ability to care for himself and to undertake everyday tasks. Although polyarthritis affects only some 4% of chronic hepatitis C sufferers, it has had a huge impact on Mr Dennis’s quality of life.
There is another group that warrants significant attention, however: those who contracted HIV through their NHS treatment. When we talk about financial support mechanisms, we should learn from their experience of the Macfarlane Trust, which sadly, is not a tale of best practice. One person said that the trust
“neither cares nor understands what we have been, or are, going through”.
Another said that the trust is:
“No longer fit for purpose”.
A third person said that the trust is:
“An embarrassment to the government that funds it”.
Those are just a selection of the damning descriptions of the Macfarlane Trust that I have received from both beneficiaries and, significantly, trustees. I know that Health Ministers have tried hard to regain the trust of the haemophilia community, but the sad fact is that their efforts are constantly undermined by the failings of the Macfarlane Trust.
We cannot turn the clock back and undo the damage done, nor can we pretend that we can wholly make up for the years of distress. However, we can, and must, ensure that the support provided by the Government is not administered in a way that serves as a further source of anger, upset and frustration. Yet I hear time and time again that that is the daily frustrating experience of many beneficiaries. The experience is that policies are created ad hoc with little continuity or clarity, that intrusive and personal details are demanded in response to the simplest of requests and that the attitude towards beneficiaries is one of arrogance. Beneficiaries feel at best confused, and at worst bullied, by the very organisation created to support them.
In preparing for this debate, I have spoken to two previous trustees, who both suggested that the management of the trust was completely out of tune with the needs of beneficiaries. They described an organisation that was completely unwilling to make the case for further funding from the Department of Health and that dismissed complaints without due care and attention. Although I recognise that the trust is independent of the Department, the Minister must recognise the harm that is being done and, in turn, how that reflects on her Government.
I know many of those concerns were raised with the Minister’s predecessor, my hon. Friend the Member for Broxtowe (Anna Soubry), during the recent AGM of the all-party group on haemophilia and contaminated blood, and I therefore hope that the Minister will continue with the internal review that I understand was subsequently initiated, and that she will agree to meet with representatives from across the community. The community do not want to be perceived as victims forced to go “cap in hand” to beg for support.
Clare Walton, another of my constituents, says:
“I want to be empowered, and have autonomy over my own life, rather than continue with this victim culture through charity.”
The sobering reality is that the Government cannot afford to wait another 20 years. The people who need support are dying in ever increasing numbers.
As my hon. Friend the Member for North East Bedfordshire (Alistair Burt) rightly commented, the Prime Minister has an outstanding record of seeking to address historical wrongs. Personally, I cannot think of a better time to address
“the worst treatment disaster in the history of the NHS.”
Jim Dobbin (in the Chair)
I thank all hon. Members who have taken part for their time discipline in this extremely important debate.
Andrew Gwynne (Denton and Reddish) (Lab)
As always, it is a pleasure to serve under your chairmanship, Mr Dobbin. I apologise on behalf of my hon. Friend the Member for Copeland (Mr Reed), who was scheduled to respond for the Opposition. Sadly, St Jude’s storm meant that he was stuck in the wilds of Cumbria yesterday and was unable to travel down in time for this morning’s debate.
I echo the thanks given to my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) for securing this debate on an extremely sobering and important issue that has affected many people across the country. I also welcome the new public health Minister to her post, and I wish her the best of luck.
This has been a powerful debate, with many moving contributions from Members on both sides of the House. I thank right hon. and hon. Members for contributing, including my right hon. Friend the Member for Wythenshawe and Sale East, my hon. Friends the Members for Kingston upon Hull North (Diana Johnson) and for Hammersmith (Mr Slaughter), and the hon. Members for Strangford (Jim Shannon), for North East Bedfordshire (Alistair Burt), for North Devon (Sir Nick Harvey) and for Stratford-on-Avon (Nadhim Zahawi).
We must remember that 4,500 patients contracted HIV or hepatitis C due to one of the gravest failures in modern medicine. That failure hit innocent and trusting people, and, to date, it has claimed thousands of lives. Members from both sides of the House will be well aware of how the rowdier moments in the House of Commons are perceived by our constituents, but I believe that debates such as this, conducted with great dignity while addressing serious failures and harrowing accounts, are a credit to the institution of Parliament, and I look forward to working with the Minister to help reach a speedy and satisfactory outcome for those who are campaigning for support to maintain a good quality of life.
The failures in our health system in the 1970s and 1980s, and the struggle for help and support fought by those affected, are a stark reminder of our responsibilities in this place. As we have heard today, progress has been painfully slow—that point was eloquently and powerfully put by the hon. Member for North East Bedfordshire. The previous Government and the devolved Administrations established the Skipton Fund in 2004 to make ex gratia payments to those who were infected.
In May 2009, Lord Archer published a report on NHS-supplied contaminated blood and blood products. We implemented many of his recommendations, including giving the Haemophilia Society £100,000 for haemophilia doctors and committing to phasing out prescription charges for patients with long-term conditions.
In April 2010, the then public health Minister, Gillian Merron, decided to bring forward a review of the Skipton Fund—we had previously committed to reviewing the fund in 2014. Announcing that decision, she said:
“We have listened carefully to the views of those infected, their families, carers and many in this House, who have told us that our intended review date of 2014 will be too late for many of those affected.”—[Official Report, 6 April 2010; Vol. 508, c. 133-134WS.]
I welcome this Government’s work in continuing to build on the foundations laid by the previous Government. The issue must transcend party politics. Our focus from now on must be on what we can do to support those who bear financial burdens as a result of contracting hepatitis C or HIV.
I hope that the Minister is able to give us a comprehensive account of what the Government are doing to build on the actions set out by the Leader of the House when he was Secretary of State for Health in his statement to the House on 10 January 2011. He announced changes to the financial support schemes for those infected with HIV and hepatitis C, including the introduction of an annual payment of £12,800 for those with the most serious hepatitis C-related disease as a result of NHS blood transfusions and blood products, in line with payments received by people infected with HIV. Those groups need Government support more than ever, and I want the Minister to give assurances that work on this issue will not be undermined by budget reductions.
I cannot even begin to imagine the pain and suffering inflicted on the victims who received infected blood. To those who relied on receiving blood regularly as part of their treatment for haemophilia, only to have a life-changing diagnosis thrust on them; to those still facing daily challenges; and to the dependents of those who are, sadly, no longer with us, we owe help, support and justice.
I pay tribute to the work done by the many campaigners and organisations across the country, which is a credit to the tireless efforts of those affected and their families. Their efforts could have been no better espoused than by my right hon. Friend, who set out the experiences of his constituents. It is right that such people are exempt from the Atos processes, and my right hon. Friend’s points about the financial burdens that such things put on families were extremely timely. Changes to qualifying criteria for a range of illness-related benefits will unnerve those who depend on such income to make ends meet. I am sure that the Minister will welcome this opportunity categorically to state that the Government will protect payments to those who have been affected. Leaving aside the health issues caused by the transmission of infections, the stress brought on by worrying about bills and security can have an extremely damaging impact on the lives of those concerned.
On top of dealing with financial concerns, we must provide a health care system that makes it as easy as possible for people with hepatitis C to use the services they need to maintain a good quality of life. I therefore hope that the Minister can give us an indication of the reforms that are being made to support patients.
My right hon. Friend’s proposal to unite stage 1 and stage 2 under one fund warrants serious consideration, and I would welcome a pledge from the Minister seriously to look at it and to try to bring it about. My right hon. Friend was also right when he said that the Government must take any action in conjunction with those who have been affected.
As I said, this is not a debate for political point scoring, and I assure the Minister that the Opposition want to see swift action to ensure a good outcome for those affected—something eloquently pledged by my right hon. Friend the Member for Leigh (Andy Burnham), the shadow Secretary of State for Health, in an intervention earlier. We will therefore be happy to work with the Government to introduce proposals finally to achieve a good and proper conclusion for those affected and their families and, I hope, to draw a line under one of the darkest failings seen in our country.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
It is a pleasure to serve under your chairmanship, Mr Dobbin. I thank all hon. Members who have contributed. This is not the first such debate I have sat through; as a member of the Backbench Business Committee, I helped to allocate the Back-Bench debate in 2010. I sat through that whole debate, so I came to this post at least familiar with the strength of feeling on this issue and with the way in which so many hon. Members have worked so hard over many years to represent their affected constituents.
Inevitably, at the beginning of week four of my time in office, I must, I fear, disappoint those hoping for new policy announcements. The debate has perhaps been more useful for me, listening to Members’ contributions, than it will be for those listening to me. It has been incredibly helpful to hear the many comments that have been made, and I will try to answer as many as I can. If I do not have the knowledge or time to answer any points, I undertake to write to hon. Members about them. Let me also say straight away that I am more than happy to have the meetings that have been asked for. I have some thoughts about how we can get the most out of them and make sure they give us a platform on which to move forward.
I thank all those who have contributed to the debate. I congratulate the right hon. Member for Wythenshawe and Sale East (Paul Goggins) on securing it on behalf of those with haemophilia who were, sadly, infected with hepatitis C as a result of treatment with blood products before 1985. Many Members have talked about the impact on constituents, and that has come home very forcefully to me.
Members have given me much to reflect on, but I would like to take some time to lay out the current position. Everyone who has spoken has said they would prefer us to be somewhere different, but it is relevant to lay out the practical support that has been offered to date and where successive Governments have got to. Indeed, the presence of a former Secretary of State at the beginning of the debate rather underlined the fact that successive Governments have struggled to achieve a final resolution. I very much welcome the cross-party tone of the debate and the shadow Minister’s commitment to work with the Government.
The Government are fully committed to supporting affected haemophilia patients, by ensuring that haemophilia and hepatology services in the NHS are as good as possible and by providing direct financial assistance. There is the prospect of some good new treatments for hepatitis C, with fewer side effects than the current treatment and less of an impact on day-to-day life. We all welcome that, but I recognise that although these new therapies may treat the infection, they may not alleviate all the associated health effects. For many of those affected by hepatitis C, there is a continuing need for support.
In January 2011, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley), then the Secretary of State for Health, informed the House that we would provide additional support for those affected. It is important to remember that that support was available to not just haemophilia patients, but any patient infected with HIV or hepatitis C by an NHS-supplied blood transfusion before 1991.
Although many who have spoken this morning are seeking a longer-term resolution, let me quickly go through the additional practical support that the Government have put in place. We linked the annual payment for HIV awarded by the previous Government to inflation, so it does not lessen in value. We introduced a similar payment for those most seriously affected by hepatitis C, and we increased the value of the lump sum for that group to £50,000. I very much hear the concerns some Members expressed about the divisiveness of separating different groups, but the lump sum for that group was nevertheless increased substantially.
A discretionary payment mechanism was also introduced to meet specific financial needs for all those infected with, or affected by, hepatitis C. None of those affected now have to pay for their prescriptions. In addition, £300,000 has been made available over a three-year period to provide counselling services to those affected by hepatitis C. All those payments are tax-free and are disregarded for the purposes of benefits and determining eligibility for social care services.
To pick up the point about the exemption regarding employment and support allowance, one of my predecessors made representations in that regard. The issue is not in my remit, and the decision is obviously for the Department for Work and Pensions, but I certainly undertake to raise the issue as a result of the debate and to revisit it with the appropriate DWP Minister.
A combination of fixed and discretionary payments was previously decided on as the best way of ensuring greater financial certainty for people facing the most severe consequences from infection. The idea was that it would retain a degree of flexibility so that assistance could be tailored to an individual’s personal situation, and the debate has clearly shown how different the situations of hon. Members’ constituents are.
The set-up put in place could also complement the other support people might receive, such as through the benefits system. The flexibility that gave was thought to be important, because an individual’s needs vary significantly. However, I know there is concern among haemophilia patients and others infected with hepatitis C that there is insufficient support—this has been the focus of much of the comment today—for those who have developed chronic infection, particularly Skipton Fund stage 1 beneficiaries, on whose behalf many Members have eloquently spoken.
The scientific and clinical advice that the Department received during the review did not support the case for making regular annual payments to all those infected with hepatitis C. I am advised that some people with chronic hepatitis C infection clear the virus, and that those numbers could increase with the new therapies that are emerging. Decisions on financial support have been informed by the evidence, where that is available.
The spectrum of possible consequences of hepatitis C infection appears to be wide-ranging, and, in many cases, causal association has not been established. That has been a problem in the past. Ministers were grateful for the advice of experts on that area—a complex one, obviously—ahead of the 2010 review. Following the review, the then Minister with responsibility for public health, my hon. Friend the Member for Guildford (Anne Milton), promised that new evidence would be assessed regularly. That challenge was put to me several times in the debate. Those assessments will help with future decisions whether to make changes to the payments system.
The advisory group on hepatitis recently completed its first assessment of the clinical and scientific evidence published since the 2010 review, and the Department has sought further detail from the group on some of the information in the report. Some people affected by hepatitis C dispute the expert interpretation of the evidence, so Department of Health officials have commissioned a systematic review of the scientific and clinical evidence on the natural history of hepatitis C. That will report in autumn 2014. I shall raise with officials the question whether that could be brought forward. An earlier report could be useful in the light of other events.
We hope that, in addition to providing a definitive analysis of the available evidence, the systematic review will be of value for service planning in the NHS. Several hon. Members have referred to other parts of the NHS and the provision made for continuing care, so I think that the exercise has additional value. The hon. Member for Kingston upon Hull North (Diana Johnson) made the case, and although I cannot respond to her detailed points and questions about some distinctions that are made, we are aware of the dispute. I undertake to write to her if I can respond in more detail.
Several trusts have been mentioned this morning, but I understand that beneficiaries of the Caxton Foundation have not always found it responsive to their needs. This morning, hon. Members have expressed concerns about how it has operated since it was established in 2011. I have seen recent correspondence between campaigners and Caxton Foundation trustees, so I am aware of some of the unhappiness.
I want to give reassurance on one point: the foundation has £2 million for payments in England and has not yet spent all the money available to it. If it needs more money, it can make a business case to the Department. I understand that it will be doing so this year, and we shall consider that on its merits. It has been working hard to improve its services in the past year and has already established some processes to: reduce the time between application for and payment of straightforward grants, an issue mentioned by several hon. Members in the debate; make payments in the form preferred by the beneficiary; and continue to review where it can improve further.
The hon. Member for Kingston upon Hull North made points about published criteria for the application process, means-testing and specialist doctors. Those are all detailed points that I shall consider, and on which I shall respond to her, but I shall need to make contact with the foundation, because all decisions about payments are made by the trustees. I do not have the power to direct them on how to make decisions, but after the debate I intend to write to remind them that the trust deed enables them to meet any charitable need and not just those that arise directly from an individual’s hepatitis C infection. If hon. Members have other points that they want to raise with me, I shall be happy to put them to the foundation. Clearly, some of those that have been raised this morning are matters for concern.
Several right hon. and hon. Members have talked about public inquiries, or a process of truth and reconciliation. The right hon. Member for Wythenshawe and Sale East made interesting points about different approaches in recent years. I shall reflect carefully on what he said, which I think other right hon. and hon. Members supported, about considering different approaches.
The Department of Health has put relevant facts for the period in question—1970 to 1985—in the public domain, on its website; however, colleagues have called for more material to be put in the public domain, and I shall reflect on that, as well as on what has been said this morning about the different models of truth and reconciliation processes. It was interesting, and it is something for me to reflect on.
Alistair Burt
I thank the Minister for what she has said about her openness with respect to the inquiry. I recognise that she is new to her post, but if there is one subject that the Department knows all about, it is the one we are debating. It has all the information it needs.
I do not expect the Prime Minister to come to a definitive decision at the meeting in a couple of weeks about what he or the Department can do, but I hope that the Department will give a briefing of the right tone, saying that there is an opportunity to settle the matter. Somewhere among the options—either the first or the last—is the one that settles things. It has existed for some time. I ask my hon. Friend to do all she can, using the same spirit as is in her response on opening things up through an inquiry, to point the Prime Minister in that direction, so that as he deliberates on the question and she finds her feet in dealing with it, we can, as the debate has urged, move towards finding a way to close the matter.
Jane Ellison
My hon. Friend makes fair points. I spent much of the past three years chasing him in his previous role to put right a continuing historical wrong, and he is right to push me in the same vein. I take his remarks, as I have always taken his advice and thoughts, extremely seriously, and will reflect on them.
I want quickly to mention the Penrose inquiry, of which I am very aware. As the hon. Member for Kingston upon Hull North said, it will report in the spring. Right hon. and hon. Members may be interested to know that the Department of Health has provided all reasonable assistance to Lord Penrose, explaining what documents are held in the Department.
Jane Ellison
May I continue, as I fear I will not get through the remaining points? I will be happy to speak to the right hon. Gentleman straight after the debate.
We have made available to Lord Penrose any additional documents that he has felt are necessary to his inquiry. While it is continuing, I shall not comment on the inquiry or evidence given to it, but I shall consider whether the Department will make a response. Given that Lord Penrose is considering pre-devolution matters, it is hard to imagine that there will not be implications to which I and the Department shall need to respond. We do not know the exact shape of things, but the inquiry is on my radar, and we shall be considering it.
The hon. Member for Easington (Grahame M. Morris) made a point about specialist hepatitis C nurses. That is the responsibility of NHS England, and I undertake to write to that body to draw its attention to his comments.
I think that I have now covered most of the specific points that I can answer today; unfortunately, I cannot respond to some of the detailed points. There was a challenge about the number of Skipton Fund stage 1 beneficiaries; there are difficulties in identifying the numbers, but we will examine that issue and see whether we can respond in more detail to the challenge given by the hon. Member for Kingston upon Hull North.
Inevitably the debate has been, for me, an invaluable opportunity more to hear some of the arguments than to give specific answers on the important points that colleagues have raised so well on their constituents’ behalf. I am happy to have the meetings that have been suggested.
Jane Ellison
If my hon. Friend will forgive me, I need to conclude.
I have heard the big challenge that I have been set this morning. It is one that many of my distinguished predecessors have been set, and I do not underestimate its nature or scale. There is, and has been for a long time, great unhappiness about this topic; many people have wrestled with it. I assure right hon. and hon. Members that I will do my best to rise to the challenge.
Post Offices (Islington)
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Jeremy Corbyn (Islington North) (Lab)
I am pleased to have this half-hour debate on post offices in Islington. With the agreement of the Minister, my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) will also contribute, so we will divide the time up between us.
My borough, to describe it briefly, is one of fast-rising population, with a combination of employment patterns. Most people commute out of the borough to work in central London, or elsewhere; many work for the local authority or for education and health employers locally; and a very large number work in very small businesses, or work at home, and are therefore the kind of people who make a big usage of our local post office facilities. If people went from the debate to visit any of our Crown post offices, they would find large queues of people accessing a large variety of services, not necessarily postal-related, but some financial and other such services.
We value our post offices greatly. The local authority, my hon. Friend and I, the local representatives from the Communication Workers Union and Post Office management have had a number of meetings—round-table discussions—convened by the leader of Islington council, formerly Councillor Catherine West, now Councillor Richard Watts. There was also a public scrutiny committee on the issue, which is obviously a live one and heavily debated locally. It is of great importance to us.
I have a photocopy of a document, “Modernising the Post Office”, in which the Post Office discusses investment in, support for and the modernising of branches, to secure post offices and communities throughout the UK. The document also points out that the Post Office is the fastest growing financial services company in the UK, the No. 1 travel money provider and the sixth largest telephony provider, with almost 0.5 million customers, and talks about a sustainable Crown post office network. That all sounds fine until we get to the reality of the situation of local post offices in any one area.
We have Crown post offices on Upper street, Highbury corner and Holloway road, and in Archway. My hon. Friend will talk mainly about the ones on Upper street and Highbury corner, and I will talk about the others. The local authority has tried its damndest at every turn to co-operate with the Post Office to improve the services and to provide a better quality of post office buildings, to the extent of offering a site across the road from the existing Highbury corner post office, which is in an unsatisfactory temporary building—temporary for as long as I can remember, which is more than 35 years. That site is still available for development into a new post office, but the Post Office seems unable to take up what is an amazingly generous offer by the local council to ensure that there is a good-quality service.
I hope that the Minister, when she replies, will bear in mind what my hon. Friend and I have to say on such initiatives. Furthermore, the leader of Islington council, Councillor Watts, has written a letter to the Post Office—I will quote from the last part, although my hon. Friend may quote more—in which he stated:
“In addition, we are willing to work with Post Office Limited to find a home for the post office branch within one of the nearby council buildings on Upper Street.”
The local authority is as co-operative as possible, so tribute should be paid to it for that.
One problem is some dispute about the figures for losses or profits made by local branches. The Holloway branch, which is in my constituency, opposite the Odeon on Holloway road, at the end of Tufnell Park road—sometimes known as Tufnell Park post office—is a very busy building, and queues frequently come out of the door on to the street. Bizarrely, the Post Office claims that that branch loses money, which is hard to see when the building is completely full the whole time. The Post Office also claimed that the only way in which a post office could be retained on Holloway road—the Holloway post office—is if it is franchised out to someone else. In other words, it would become the rear counter of a supermarket, a WH Smith or someone else. There are, however, no WH Smith branches anywhere in the whole borough, so it is hard to see how it might want to be involved. Inevitably, that would mean fewer postal facilities, fewer staff available, even longer queues and much more business lost by the Post Office.
I have a constant frustration on meeting with the Post Office: a lack of imagination and ambition for the development of the post office network. It seems to have an agenda of closing down branches and diminishing the network, and there is the looming threat—in five year’s time—of what happens if the contract with Royal Mail is not renewed. I hope that the Minister, despite the Government’s default position that the Post Office is nothing to do with them—that it is someone else’s responsibility—will say that she or the Secretary of State is prepared to intervene.
To take the example of Holloway post office, as I said, it is a popular, successful and busy local branch. At the moment, it has seven full-time and seven part-time people working there, alongside two managers. They are paid according to the terms and conditions agreed nationally between the CWU and the Post Office. The local staff do a good job—they are very knowledgeable and popular with the local community. When we have had demonstrations outside the post office, the number of customers who come up to say thank you to the demonstrators for supporting their local post office is impressive.
What happens to the staff during the franchising process? They lose their jobs, or they get moved somewhere else. The Post Office keeps telling us that everything is okay and that all the staff have been moved to another, remaining Crown post office somewhere else. That seems to me to be a circle to nowhere, a descent from one Crown office to another, until there is none left and the staff have no choice but to go and work for a franchisee. The franchisees, however, pay staff much less than the Post Office. I have reports of some cases in which they are paying the minimum wage, or slightly above, for what is extremely skilled work at handling a variety of different transactions that the Post Office staff already do well. One can only form the impression that what is really happening is a race to the bottom—losing jobs, losing facilities and ending up with a post office counter at the back of a supermarket.
I will quote from a document given to me by the CWU:
“At the Communities Committee meeting”—
of the council—
“Simon Burman was asked about, but refused to confirm, property costs for Holloway Road. In 2011/12 the branch reported a ‘loss’ of £315,500…£215,000 of this came from property costs; we think these are excessive… To put these in context, property costs for London Bridge were £109,000, for Finsbury Park they were £107,000, for Highbury they were £68,000 and for Islington they were £40,000.”
It is strange to have that inflated loss figure being offered for the post office on Holloway road, with much different figures for other branches. Will the Minister look at the detail of the figures that we have been given?
Before I hand over to my hon. Friend, I want to draw attention to two other post offices and ask the Minister for confirmation about them. First, the Crown post office at Archway—as far as I am aware, the freehold of the land is in the hands of the Post Office, although that remains to be confirmed—is a popular, effective and good local post office. It does not seem to be in a radically different position from the other three Crown post offices in the borough. We have had confirmation that that post office is secure in the immediate future. I should be grateful if the Minister confirmed that and that there is no threat whatever to the Archway post office.
Secondly, the Finsbury Park post office, which is about 100 metres outside the Islington boundary in the borough of Hackney but clearly affects many people living in Islington, is incredibly busy, and we are all worried that it could be at risk in the closure and franchising programme. In short, we are speaking on behalf of the people of Islington who want to use, enjoy and support Crown post offices. I wish the Post Office would show the same determination by providing good-quality local services with dedicated staff who are paid at the proper rate to deliver those services, instead of reducing us to a counter at the back of a supermarket, which seems to be its current overall agenda.
Emily Thornberry (Islington South and Finsbury) (Lab)
I thank my hon. Friend the Member for Islington North (Jeremy Corbyn) for securing this debate, which is important for Islington. I am delighted, Mr Dobbin, to serve under your chairmanship today.
What has been happening to our post offices in Islington is a sorry story, and I shall start with the Almeida street site. It is a large site in the heart of my constituency. It is bounded on one side by Upper street, and surrounded by Moon street, Milner place and Gibson square. It is a very large development area. The Post Office somehow managed to sell the site without securing a proper site for another post office. It kept the post office on Upper street, but is only renting it back. The post office does not have disabled access and its remaining time on that site is limited. It is a Victorian building; it has been there for ever; it is in the heart of my patch; and it seems that it will just go. That is the first problem.
The post office on the Upper street site needs to move. We accept and understand that, but the question is, where will it move to? The other big Crown post office in my constituency, which borders my hon. Friend’s constituency, is the Highbury Corner site. As hon. Members have heard, it is only temporary, so the council offered £2 million and a site for a Crown post office across the road. In its wisdom, Post Office turned that offer down. Having sold off one site and not secured another, and having turned down £2 million that the council had offered, it is telling us that it does not know where to move to or what it can do.
We are told that the post office can move to a site opposite the garage on Upper street by the town hall. I have said several times that one reason why it needs to move is the lack of disabled access at the Upper street site. Yet, I understand that on the site that it is moving to the door is of limited size because it is in a conservation area. It will not be able to have double doors that open electronically, which is the ideal for any new site, particularly when it serves a large disabled and elderly population, as it does. Thankfully, people today do not have ordinary wheelchairs; they have electronic wheelchairs and can get about. I have grave doubts about disabled access at the new site, which the post office is moving to, not least because of the lack of disabled access now, and I wonder whether there will be disabled access for everyone or only some people. If the Post Office expects someone in an electronic wheelchair to push open a door, it is on another planet; it will not work.
There has been one bad decision on the Almeida site and another on the Highbury Corner one. In addition, the council has not given up. It is saying, “Okay, you have refused our £2 million; we are now in a time of austerity and the £2 million has been spent elsewhere. But guess what? We are prepared to give you £750,000 for another site at Highbury Corner.” The gauntlet is down, but the Post Office will not accept that offer either. The council has also said. “In the meantime, if you are trying to build another post office, we can provide you with accommodation.” The council has offered accommodation near empty council buildings on Upper street, but the Post Office does not seem to want to move there either. How much more can it try to destroy its business than it has done over the past five or 10 years in Islington? If I sound fed up, Mr Dobbin, you should hear what my constituents have to say.
The situation is not hopeless. Some post offices work perfectly well. I fought hard to save Essex road post office, as some of the Minister’s officials know, and we secured its future. It has been refurbished and has just reopened with extended hours, five counters and disabled access. It will do very well and it is exactly the sort of post office we want. If that can be done in one corner of my constituency, why can it not be done in its backbone, where we need a Crown post office that will function properly.
My last complaint—I have more, but I am being selective—is that even if a new Crown post office is opened opposite the garage, whether it has disabled access is a moot point, and there will be only seven counters. There are seven counters at the current post office in Upper street and at Highbury Corner. The Post Office intends to try to put a quart into a pint pot with the same number of counters at Upper street. People already queue outside in the rain at both Highbury Corner and Upper street post offices. People do not go to the post office because they do not have 45 minutes to queue. The Post Office is cutting off its nose to spite our face. It must get a grip and show some leadership and vision. It must move on and build a proper Crown post office on Upper street that is worthy of the people of Islington.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
I welcome the opportunity to discuss post offices in Islington with the hon. Members for Islington North (Jeremy Corbyn) and for Islington South and Finsbury (Emily Thornberry), and I congratulate the hon. Member for Islington North on securing this debate on proposals to change the Crown post office network and the impact on branches in Islington in both constituencies.
The hon. Gentleman eloquently set out his concerns and all MPs understand the real issues and worries that constituents feel when changes are proposed to the post office network because it is such a vital part of our local community infrastructure. That is why we want to ensure that it is preserved and looked after so that it has a positive and sustainable future. We all know that there is heightened local concern following the previous closure programmes in 2003 and 2008. That certainly affected my constituency, and those of both hon. Members, where four and seven branches respectively closed in Islington North and Islington South and Finsbury. That is why it is important to take a different approach and protect the post office network.
We have announced investment of £1.34 billion over the current Parliament to maintain the post office network at a level of at least 11,500 branches and to modernise up to 6,000 existing branches by 2015, ensuring that we improve the service that we offer to customers by addressing some of the issues that both hon. Members have raised, such as the size of queues and the time people must spend in them. As the hon. Lady rightly said, people do not have 45 minutes to stand in a queue at a post office. That is why some of the changes we are making, including longer opening hours, should help to put the Post Office on a much firmer and more sustainable footing. That will enable people to go to the post office at a time that suits them, and spreading the points at which people may go to the post office will have an impact on queuing times.
Jeremy Corbyn
Will the Minister confirm that there is no reason on earth why existing Crown post offices cannot open for longer hours and that the Communication Workers Union is happy to negotiate terms and conditions to accommodate that?
Jo Swinson
Obviously, all operational matters are for discussion between Post Office Ltd and the relevant unions, but longer opening hours are welcome and could be implemented in the existing Crown post office network. With the post office local and the post office main models, longer opening hours are being rolled out in the rest—and, by far, the bulk—of the network. The investment that is being put into those branches is being used to secure longer opening hours as part of an overall new negotiation and deal with those sub-postmasters. They will receive investment and a new way of working with their branch, but the quid pro quo for that has to be that the opening hours are enhanced, which has an additional customer benefit.
We know that customer satisfaction statistics for the new post offices that have been opened show that customer satisfaction is significantly increased. The hon. Lady mentioned the newly refurbished post office in Essex road, which she opened just last Friday. I am sure that she found—as I have, when I have opened post offices in my constituency and have been to others around the country—that the feedback from customers shows that they are incredibly welcome. What often happens is that a post office, which perhaps was dark, cramped-looking and not fit for the 21st century, is taken and turned into something that is much more akin to modern shopping and retail environments, and it will therefore attract more customers and be more successful.
Emily Thornberry
The Minister is right, and may I plug Essex road post office? It is a fantastic post office and well saved. However, why is the Essex road part of my constituency fit for a proper office, yet we cannot get one on the A1, which is the main street that goes through my patch?
Jo Swinson
Obviously, the post office network is complex, with a wide range of outlets across the country. In working out the best locations for all those post offices, Post Office Ltd has to take into account a wide range of factors. The post office that the hon. Lady recently opened in Essex road is under a different kind of model of ownership from those at Highbury and on Upper street, which are part of the Crown network. The Essex road post office, which has become a main office, is obviously not part of the Crown network.
Most customers would be blissfully unaware of the different structures of different parts of the network. However, of the some 11,800 branches that exist now, about 370 are part of the Crown post office network and therefore directly operated by the Post Office. The vast majority of post offices are run as sub-post offices either through franchise agreements, such as through multiple chains—WH Smith has been mentioned, but there are many convenience store multiples—and also by many individual, independent sub-postmasters who run their own post offices in their communities, effectively, as their small businesses. Trying to manage such a diverse network brings its own challenges.
In particular, I want to turn to some challenges facing the Crown part of the network. Numerically, about 370 post offices out of 11,800 is a small part of the network, but none the less, it has been responsible for a significant proportion of the network’s losses in recent years. Of the post offices that we are discussing today, those on Holloway road, Highbury corner and further down Upper street are in the Crown network. In the last full financial year, that part of the network sustained losses of £37 million, which is a third of the overall losses for the whole network. Those 370 branches are, by and large, in busy town and city centre locations, and that situation is unfortunately not sustainable. Ultimately, any retailer that was losing significant money on branches in such prime locations would be looking seriously at how to cut costs to ensure that that part of its network and operations were, at the very least, breaking even.
Emily Thornberry
The Minister is being generous in allowing me to intervene again. Is she able to inform us how much money the Post Office made when it sold off the Almeida site? Surely, that could subsidise post offices in Islington until the next century.
Jo Swinson
As I am sure the hon. Lady will understand, I do not have that figure in front of me, but I will endeavour to find that information out from Post Office Ltd and ensure that it is forthcoming to her, if that is possible within the bounds of commercial confidentiality. However, the overall picture for the Post Office in terms of revenue is that it is not possible to continue operating a Crown network that has the kind of losses that have been sustained over many years. That is why we are transforming the Crown part of the network with £1.34 billion of Government investment until 2015. We also want to ensure that we put the Post Office on a firm footing and eliminate the losses in the Crown network by 2015. That is only fair to the taxpayer, who is also providing significant subsidy, and it is also about good commercial practice.
The franchise plans are part of the overall plan to get the Crown network to break even. We have chosen 70 individual locations that Post Office Ltd thinks are less likely to be able to become commercially viable without franchising. Those proposals have been put out for franchise opportunities. The hon. Member for Islington North mentioned Archway, which is not in the list of 70, so there are no plans to franchise that at the moment. He also mentioned Finsbury park—I am not certain whether that is a Crown office or a different model.
Jo Swinson
In that case, it is also not on the list of 70, so, again, there are no plans to franchise Finsbury park post office either. I hope that that reassures the hon. Gentleman. On the point about Holloway road, he mentioned that nearby there are no WH Smiths, which is not the only possible franchise partner, but any franchise-specific proposal that will be undertaken in relation to the local situation will also be subject to a further six-week consultation period when a proposal is brought forward. The hon. Gentleman and his constituents will have the opportunity to contribute to that. If the proposal is not sensible for that location, Post Office Ltd should take that into account.
Jeremy Corbyn
I thank the Minister for giving way; she is being generous with her time. In the event that no franchisee comes forward for Holloway post office—I understand that none has come forward so far—will she guarantee that the post office will remain open and that the staff will retain their jobs at that post office?
Jo Swinson
I am not certain whether no franchisee has come forward—my understanding was that there had been interest in all the individual branches—but there will not be a sudden withdrawal of the service if a suitable franchise is not found. The Post Office has a responsibility to ensure that it continues providing the service where it exists, so it is looking for franchise partners to see whether something suitable can be found. However, if no suitable partner is forthcoming, the Post Office will not be able just to get rid of the existing post office. It would not be possible for it to do that. I hope that that reassures the hon. Gentleman.
I turn briefly to the merger of the two Crown post offices at the Highbury and Upper street sites. I have seen photographs of them, and hon. Members have pointed out that the temporary portakabin nature of the Highbury site is not ideal. The hon. Member for Islington South and Finsbury talked about disabled access issues for the existing—and very beautiful—old Victorian building in Upper street. Looking to merge those Crown services into a new, much more purpose-built facility elsewhere on Upper street and between the two—about 420 metres from one post office and 150 metres from the other—should provide much better customer service.
I highlight, however, that that is currently subject to a 12-week consultation, which opened earlier this month and closes on 27 December. I urge any relevant constituents or people who are interested to respond to the consultation. The fact that the lease for the building on Upper street runs out in March 2014 is relevant, because clearly, we want to ensure continuity of service provision. I understand that the council has made offers, but there is an issue about when some of those offers have been forthcoming. The information that I have shows that that has happened incredibly recently, and clearly, plans need to be put in place to ensure that the provision is ongoing.
I hope that people respond to the consultation and that customers in Islington have a new opportunity for better services from the Crown network, as well as from the other modernised part of it, such as in Essex road, where the change has clearly been shown to be very positive—actually, I think that I visited Essex road post office some years ago. I hope that my comments have been helpful to both hon. Members here today.
Nuclear Test Veterans
(11 years ago)
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Mr John Baron (Basildon and Billericay) (Con)
We are very proud of and grateful to the Royal Navy and to our Vanguard-class submariners, who are on patrol as we speak, for their service to our country. It is right to recognise that service, but there is a legacy from the dawn of our nuclear deterrent that has yet to be fully recognised and a debt of gratitude that has yet to be fully acknowledged—that is to our British nuclear test veterans.
The deterrent that this country now has would not have been possible without the efforts of 20,000 servicemen during the 1950s and 1960s at nuclear tests in the south Pacific and Australia. The science at the time was not well understood. Precautions, therefore, were primitive and inadequate, and they often failed to protect individuals from the effects of blast, heat and ionising radiation. Many test veterans believe that their health was adversely affected by their service. That view has been substantiated by scientific research undertaken relatively recently by Professor Rowland in New Zealand. That work was peer-reviewed and accepted by the then New Zealand Government.
Some years ago, I was contacted by a constituent about those issues. That initial contact spawned an association with the British Nuclear Test Veterans Association, which is the largest organisation by far that represents both veterans and their descendents. I am pleased to say that I am its patron, and I take this opportunity to commend all those who work for the BNTVA, its membership and especially the chairman, Nige Heaps, and the vice-chairman, Jeff Liddiatt.
After a long campaign, the BNTVA, I and others in the House persuaded the Ministry of Defence, with the help of the hon. Member for North Durham (Mr Jones), to undertake a health needs analysis of surviving veterans. Many helpful and practical measures are being introduced as a result, particularly in relation to a veterans pathway through the NHS. Our first priority was to focus on health, given the age profile of the veterans.
Following the success of the health needs analysis, over the summer, the BNTVA, I and others in this place launched the second and final part of our campaign, which essentially involves two main objectives. The first is official recognition from the Prime Minister—preferably orally, but in writing, if not—for the veterans’ unique service. The second part of that campaign, which we are presently in, involves the establishment of a £25 million benevolent fund administered by a board of trustees that would be distributed on the basis of need, not entitlement.
Heather Wheeler (South Derbyshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Streeter—I apologise, but I will be leaving before the end of the debate, as I have other duties. I congratulate my hon. Friend on securing this important debate. I have at least five survivors and families of survivors from that time in my constituency, and I would be very interested to hear him flesh out more details about the potential funding pot. We have had numerous letters in and out of the MOD since I became an MP in 2010, and I am looking for a glimmer of hope that there will be practical measures as well as support, verbal apologies and congratulations to the servicemen involved at the time.
Mr Baron
The benevolent fund that we are discussing would be distributed on the basis of need and not entitlement, which is terribly important to understand. That is what differentiates this fund from other recognition or compensation elsewhere. There is often an automatic entitlement to compensation in other nuclear test countries if veterans can prove that they were there at the tests and have suffered ill health. The US is an example, as is Canada, and even the Isle of Man. I shall come on to the point in a minute that we are near the bottom of what I would call the international table of decency, in terms of how we treat veterans, compared with other countries.
Mr Jim Cunningham (Coventry South) (Lab)
I congratulate the hon. Gentleman on securing the debate. He does a lot of good work for veterans, in relation not only to nuclear tests, but to reductions in defence forces in general. I welcome the proposal for the £25 million benevolent fund; I think that the suggestion is a practical one on the basis of need. These veterans made a major contribution to understanding the effects of nuclear war. That is very important, and to do that they often sacrificed their health, and they are still suffering for it today. I find it very strange that, in this country, we always have continual battles to get recognition for veterans. Some years ago, it was about getting recognition for the merchant navy during the war. I do not know what it is about this country, but we seem to be falling behind everybody else in recognising the contribution that people have made on our behalf. I hope that we do not make the same mistakes with the veterans of Afghanistan in future.
Mr Baron
Having served myself, I sympathise with what the hon. Gentleman says and I understand the campaigns that he mentions. This is one of the key points that we wish to make about the benevolent fund: if we look at other countries—I shall come on to this very briefly—and compare how they treat their test veterans, we rank very near the bottom. However, I suggest to the Minister—this is where there has been confusion in the MOD before—that the payment should be ex gratia; in other words, there would be no admission of liability. There has been some confusion within the MOD that the BNTVA, as an organisation, has been involved in litigation through the courts, when that has not been the case. If we look at other countries that have made ex gratia payments, we see that the case being made very much stacks up. There would be no admission of guilt or liability, but it would put right an injustice.
It is important to reinforce that point. The campaign organised by the BNTVA, other hon. Members and I has been very much focused on Parliament and not on taking this issue through the courts. Perhaps I should also add that the BNTVA has put in a submission to the medal review led by Sir John Holmes, and it is waiting for the outcome of Sir John’s deliberations. However, that is separate from the campaign that we are discussing today.
I return to both interventions, in a way, and to the point about how other countries treat their test veterans. It is clear, when looking at the comparisons, that we rank towards the bottom of what I would call the international table of decency. Let us take the US for example. Our campaign is about recognition, and all that people have to prove for compensation there is that they were present at a nuclear test—one is sufficient—and there they have a list of more than 100 illnesses. They do not have to provide a causal link between the two. Providing that someone can prove those two things, they will automatically get compensation—£47,000 for the first illness and £47,000 for any secondary attributable illness as a bonus. No causal link between service and illness is required; payment is simply automatic. That is in addition to the fact that veterans in the US have access to free health care.
Commonwealth countries played a great part in our nuclear tests. Canadians were there in large numbers, and Canada pays some £15,000 to each veteran, in addition to war pensions, and enjoys a health care system like the NHS—free at the point of use. Closer to home, the Isle of Man, which has been supportive of our campaign, makes an ex gratia payment of £8,000 to any resident test veteran, and 17 such payments have been made to date.
I stress that our proposals are different from the comparisons that I have just listed, because the £25 million would be distributed on the basis of need, not entitlement. That is why it is important to stress the ex gratia nature of the payment. There is no admission of liability; no admission of guilt. The benevolent fund would be there to help veterans and their descendants who need help with their care and treatment. The fact that someone is a veteran does not necessarily mean that they would gain access to the fund in question.
I urge the Minister, when considering the proposals, to look further afield again. I remind her that in the 1990s this country made an ex gratia payment to Australia that just so happened to be for the exact sum of £25 million, and that payment was made in compensation for having undertaken tests in Australia. It was the equivalent sum of money, and if it is good enough for Australia, I do not see why it is not good enough for our own test veterans. I remind the Minister that Australia already offers a generous pension to its test veterans.
Sir Andrew Stunell (Hazel Grove) (LD)
I very much appreciate the work that my hon. Friend has put into this. Does he agree that the test veterans, by far and away, will be better supported by the £25 million fund that he has talked about than the Australian Government? In other words, their need is greater than that Government’s ever was. Does he also agree that, with ex gratia payments, far less administrative time, effort and money would have to be put in by the Ministry of Defence and other state bodies in disbursing that money than if compensation was based on a careful assessment of all the criteria implied by a strict compensation scheme?
Mr Baron
I agree completely. The benevolent fund would be administered by a board of trustees; it would be an established charity. It would be up to them to distribute the funds, as I said, on the basis of need, not entitlement, and the payments would be ex gratia. Therefore, there would be no admission of liability or guilt.
Perhaps we need to focus on progress with the Government to date, during the second phase of the campaign, which was launched only on 11 June here in Parliament. We also had a superb art exhibition on the theme of the veterans’ experiences during the tests. Some of the pieces were created by the descendants themselves. Progress since 11 June has been somewhat slow. I had a meeting with my right hon. Friend the Minister of State, who was then responsible for veterans. I had a brief meeting with my right hon. Friend the Prime Minister. I wrote to the Prime Minister. I have now received a response, and there are warm words about the role of the nuclear test veterans, but there is no sympathy for the idea of a benevolent fund at all.
What the Prime Minister did mention was the war pensions scheme, and no doubt the Minister will address at length the generosity of that scheme when it comes to our veterans generally, but many test veterans—I must say this to her—have found the system not sympathetic to their cause. War pensions are fine on paper, but time and again, veterans find that the system is stacked against them. A recent questionnaire of BNTVA members revealed that 90% had seen their application for a war pension declined. For one thing, with claims made seven years after leaving service, the burden of proof is on the claimant to show that the illness or injury was caused by service; for another, the system is time consuming and complicated for these elderly veterans, even when successful. The perception is that they are still having to take on the system. As if to illustrate the point, a British lady received payment from the US for the role that her British husband played, while flying for the RAF, during one of the American nuclear tests. She had been repeatedly refused a war widow’s pension in this country, but managed to get a payment from the US authorities.
The Government, including the Minister, should be in no doubt that we will not walk away from this campaign. On 27 November, veterans and their descendants will march on Parliament to draw attention to the cause. We are determined to see this through. In welcoming the Minister to her new post, may I urge her to reconsider our campaign? After all, the Government have a very good record of recognising just causes and righting past wrongs—mesothelioma and thalidomide victims are just two examples. The nuclear test veterans fit into both categories. I suggest that we do owe our veterans a debt of gratitude for helping to ensure our safety. Many people would argue that they were instrumental in helping us to win the cold war.
Martin Vickers (Cleethorpes) (Con)
I congratulate my hon. Friend on his leadership of this campaign. While we are talking about the calibre of the individuals, I want to mention one gentleman in my constituency, who I suspect would prefer not to be named. When I went to see him, he outlined his service during the nuclear tests. He was obviously unaware of the dangers at the time, but he told me—this shows the calibre of individual we are talking about—that had he known the dangers, he would still have done it for the good of his country, because he thought that it was essential. That shows the calibre of these people. We can show that we have a debt of gratitude without, as my hon. Friend correctly said, needing to show a causal link.
Mr Baron
I completely agree. What has been striking in discussing this issue with test veterans has been their dedication to duty for their country, but also the fact that they have less concern about their own well-being and more concern about their descendants. That is an important point for the Minister to take on board.
We should never forget, either, that it was a unique service by these veterans in many respects. The science was unknown and the risks were unquantifiable, but the cost to the veterans and their descendants was very severe indeed. Official recognition—I stress that we are talking about recognition, not compensation, as I hope that I have made clear in relation to the second phase of our campaign—of this unique service and contribution to our defence is therefore only right. If the Government continue to fail to recognise that, they fail not only our veterans but their descendents, and they fail to lift the veil of shame that almost uniquely hangs over this country. The time for action is now. Warm words are no longer enough.
Nic Dakin (Scunthorpe) (Lab)
It is a pleasure to serve with you in the Chair, Mr Streeter. I congratulate the hon. Member for Basildon and Billericay (Mr Baron) on securing the debate and on the way in which he has mobilised support both inside and outside Parliament for a very important cause: recognising the contribution of these professionals to this country’s safety—a safety that we continue to benefit from today.
At one of the first surgeries that I held when I became a Member of Parliament, two gentlemen who were nuclear veterans, David McIntyre and Peter Barnard, came to see me. They were concerned to press their case in the most modest way. They want no recognition in the sense of what we normally think of as recognition. They just want things to be put right and to be treated like anyone else who has served their country in the right way.
Mr Barnard described what it was like on Christmas Island observing the explosion and the scene. As the hon. Member for Basildon and Billericay described in answer to the hon. Member for Cleethorpes (Martin Vickers), those men and women, service personnel at the time, did not realise the danger that they were in and it was not clear. It has become clear only later, as events unfurled.
What is being asked for as part of the campaign for recognition is only proper and correct. It would be a good statement if all parties in the House recognised the service that those men and women performed. Treating people who have served their country properly would begin to bring us into line with other nations that have tackled the same issue. It is merely a question of stepping up to the plate. I recognise and pay tribute to the leadership that has been shown, and I hope that Government and Opposition respond to the challenge.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
It is a pleasure to serve under your chairmanship today, Mr Streeter. I congratulate the hon. Member for Basildon and Billericay (Mr Baron) not only on securing today’s debate, but on all the work that he has done in recent years on this important issue.
I recognise the vital job that all our armed forces do and that all our veterans have done for us and the country, including the nuclear test veterans. I recognise the unique nature of their service. I regret the worry and uncertainty that they have experienced in the years since their service. Whatever the facts, it is highly regrettable that we have ended up in the situation that we are in today. It is clear from the comments made that there is a lot of good will and a desire to see an outcome, but there is also frustration that it has not been achieved. I shall refer to that point in a few moments.
I was delighted to meet representatives from the British Nuclear Test Veterans Association earlier this year in Brighton. I am grateful to those from the group who took the time to host a reception and exhibition there. The art exhibition “Shadow of the Bomb” is extremely powerful and helps to convey the spectrum of emotion and feelings with which the test veterans and, indeed, their families live. It helped me to understand that the fear of what might happen, what might have happened and the fear of the unknown can, in a different way, have debilitating effects on some veterans, almost as great as a physical illness. That is also true for their children and grandchildren. We can all appreciate that those are horrible doubts and fears to have to carry around. We have to spend only a short time speaking to the veterans to get a sense of deep uneasiness about their experiences. One image that stuck in my mind was of those carrying out the tests being covered from head to foot in protective clothing, while the serving personnel, as the veterans were then, went about their work just in shorts.
The events took place in the 1950s, and just as they do now, service personnel signed up and did what was asked of them, without question and with 100% commitment. They did so alongside individuals carrying out their national service, who had not volunteered to be there, but they did what was asked of them with just as much commitment. Another difference between then and today is that there is far more scrutiny today of what we ask our service personnel to do and how they are treated, as shown by the recent discussions on whether human rights laws and the concept of negligence should apply to service personnel on operations and in what circumstances.
Times have changed markedly since the 1950s, when there was far less external scrutiny of the treatment of our forces and probably less awareness on the part of the serving personnel themselves about whether what they were being asked to do was unreasonable. We would now, rightly, find troubling the prospect of the deliberate testing of radiation on people who had signed up to protect and defend their country, who did not have full knowledge of the implications or the option to say no or ask questions.
As the hon. Member for Basildon and Billericay outlined, the BNTVA is looking for two things: recognition of what happened and their service; and the possibility of some sort of financial settlement. I hope that the debate today goes some way towards providing the recognition sought, but I appreciate that that desire is for recognition to come from a more high-profile source.
The proposed financial settlement is in the form of a benevolent fund. Members may be aware that the hon. Member for North Durham (Mr Jones), the former veterans’ Minister, authorised a financial settlement proposal. The nuclear test veterans involved in the case at the time were not made aware of the offer, and disappointingly, it appears that the lawyers acting on behalf of the veterans rejected the offer without putting it to them.
Mr Baron
I am pleased that the hon. Lady made that point about the lawyers. As I am sure that she is aware, she is referring to the legal proceedings outside this place, in which the BTNVA has never participated. It has been criticised for not participating by those outside. It is important to make the distinction.
Gemma Doyle
I am grateful to the hon. Gentleman for putting that on the record. It is important that we look at the issue, rather than at particular groups representing people. I appreciate the distinction, which is why earlier in my remarks I said that the situation is regrettable because we could by now have come to some sort of settlement or agreement. I fear that lawyers have prevented that from happening. If an agreement had been reached then, an agreement about the wider issues would also have been possible. I understand that the legal route has now been exhausted and no avenues to pursue remain.
I appreciate that the reins on the public purse are tightly held at the moment, but could the Minister look at whether it is possible to allocate money from the LIBOR fund, because that money is already set aside, to kick-start a benevolent fund? There are many demands on the fund and applications to it have been made, but it would be an obvious source of money that could be released quickly and easily. Nothing will ever take away the worry and uncertainty about the impact of the tests, but if something can be done to help to draw a line and help the veterans move forward, we should certainly consider it.
The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
It is a pleasure to serve under your chairmanship this afternoon, Mr Streeter. I congratulate my hon. Friend the Member for Basildon and Billericay (Mr Baron) on securing the debate. I pay tribute to all those who have contributed: the hon. Members for Scunthorpe (Nic Dakin) and for Coventry South (Mr Cunningham), and my hon. Friends the Members for South Derbyshire (Heather Wheeler) and for Cleethorpes (Martin Vickers) and my right hon. Friend the Member for Hazel Grove (Sir Andrew Stunell).
This subject evokes considerable passion among some, perhaps even many, people. We have heard the veterans’ cause argued with that passion yet again by my hon. Friend the Member for Basildon and Billericay, and he is right to do so. Members should bring issues that are dear to their hearts to this place, so that we can debate them and causes and ideas can be advanced, only for Ministers then to say too often, unfortunately, “Well, it all sounds very good, but I am afraid I don’t agree with you, and I’m afraid that at the moment this proposal will not advance particularly far within Government. We’ve made our position clear.”
Before I explain why that is, I want to make something absolutely clear. It seemed to be suggested that the Government have not acknowledged the significant role played by the men and women who participated in the nuclear test programme. My hon. Friend quite properly mentioned a letter written to him by the Prime Minister. I repeat some of the Prime Minister’s words, because I cannot put it as eloquently as he did:
“This Government continues to recognise the servicemen who participated in the British nuclear testing programme. Their contribution ensured that the UK was equipped with an appropriate nuclear deterrent during the cold war, which thankfully we never needed to use.”
To be absolutely clear, I do not hesitate to acknowledge the hugely significant role played by all those veterans, and I pay tribute to all who participated in the programme. We owe them a huge debt of gratitude.
Mr Baron
I do not doubt the Minister’s genuineness on this issue, or indeed the Prime Minister’s. The letter that the Minister read out was a response to me. All test veterans would welcome a statement from the Prime Minister addressed to them, officially recognising their role and our debt of gratitude to them. We would prefer it to be given orally—perhaps in a statement in the House—but if not, a written statement would go a long way towards ticking that box, rather than just giving part of a response to me about a wider issue in the campaign.
Anna Soubry
It is not for me to say what the Prime Minister should or should not do, but he has written in clear terms to my hon. Friend, who I assume shared the letter with all those in the association. However, I understand—he will correct me if I am wrong—that not all those who participated in the test programme necessarily belong to the association. I am now putting it on record, in Hansard, for all to see and to broadcast to all veterans the Prime Minister’s clear acknowledgement and tribute to those veterans, as well as his acknowledgement of the great service that they did our country.
Mr Baron
That is very much my point. The Prime Minister’s response was to me. Not every test veteran is a member of the British Nuclear Test Veterans Association. Although I welcome the Minister’s warm words of acknowledgement and gratitude and I do not doubt her genuine intent, a statement to all test veterans from the Prime Minister, preferably orally but if necessary in writing, would cost nothing and would tick that box, and it would be gratefully received by all concerned.
Anna Soubry
I will ensure that the Prime Minister hears my hon. Friend’s words. He will then decide how he may or may not be able to advance the matter. However, I think that my having read out the letter so that it can be publicly recorded in Hansard goes a considerable way towards making it absolutely clear that the Prime Minister acknowledges the great work done and why it was so important.
As we know, for many years, veterans of the nuclear tests have claimed that their health has been damaged by exposure to ionising radiation. The Ministry of Defence has consistently rejected those claims on the basis of the findings of three comprehensive studies on cancer incidence and mortality among nuclear test participants carried out by the independent National Radiological Protection Board. The three studies were conducted and published over a 20-year period, beginning in 1983 and finishing in 2003. Overall levels of cancer incidence and mortality were similar to those in matched service controls, and death rates from all causes were lower than expected from national rates.
On specific cancers, there was some evidence of a raised risk of certain leukaemias, but the researchers concluded that it was due to chance rather than radiation exposure. The Government has every confidence in those independent studies. Accordingly, we believe that there are no grounds for paying compensation to British nuclear test veterans as a group.
In 2010, the MOD commissioned a health needs audit of all BNTVA veteran members resident in the UK. The survey, which had a return rate of 71%, asked respondents to self-report on serious illnesses and long-term conditions diagnosed by a doctor since their participation in the nuclear tests. Overall, the range and severity of problems reported was typical of older people in the UK in general. Whatever their health experience, most respondents indicated that, in general, they felt that their health care needs were being met very well by the NHS; primary care services were particularly well regarded.
My hon. Friend referred to the Rowland report. I am reliably informed that the report, published in a specialist genetics journal, concerned a laboratory-based study of peripheral blood lymphocytes—I apologise for my pronunciation, which may not be great—that were taken in the mid-1990s from 50 New Zealand naval veterans who had been on weather ships 50 to 100 km from the detonation centre of Operation Grapple in 1957-58. Dr Rowland reported the findings of three cytogenetic tests. Two showed no difference between the veterans and matched control groups. The third showed an elevated translocation frequency in the peripheral blood lymphocytes—I am more than happy to share that in plain English with my hon. Friend—of the veterans compared with the control group.
The sample size was acknowledged to be small, and there has been some doubt about the suitability of the control group. Known possible causes of increased translocation include ageing and cigarette smoke as well as ionising radiation. The report emphasises that the study makes no comment on the health status of the veterans. At this time, such cytogenetic tests are not in routine clinical use, because no relationship has been shown between any genetic abnormality and health effects or clinical state.
Mr Baron
May I return to the health needs analysis? I am pleased that the hon. Member for North Durham (Mr Jones) has now taken his seat, as I paid him a compliment earlier by suggesting that he was instrumental in helping us get the health needs analysis, which was our campaign’s first objective. The veterans of the BNTVA have found it helpful as a pathway to guide them through the NHS.
To return to the science briefly, we can argue about it. Professor Rowland’s report was peer-reviewed and was accepted by the New Zealand Government of the time; the Minister should not skirt over that too lightly. The point that I am suggesting to her is that, compared with other countries that have test veterans, we are near the bottom of the table in terms of how we treat them. Surely, there is a moral obligation to consider where Britain fits in. In many other countries, veterans do not have to establish a causal link between being at the tests and ill health. Compensation comes automatically, although I stress once again that I am not arguing for compensation in this case; I am asking for recognition, as highlighted.
Anna Soubry
I am interested by that intervention. My hon. Friend now seems to be saying that we should put the science to one side, because it perhaps does not suit his argument, but the science is absolutely clear. However, I am more than happy to turn now to the comparison of international provisions for nuclear test veterans.
Anna Soubry
I will deal with this first, and then I will be more than happy to give way. I hope that I can set the record absolutely straight.
Comparisons of provisions in the United Kingdom and other countries can be very misleading. We are not at the bottom, and I do not want these good people, who have served our country so well, to feel that they are in some way being short-changed and that an advantage is being given to test veterans from other countries. I will go through some of the other schemes.
Let us talk about America. The compensation scheme offered by the United States Department of Veterans Affairs must be seen in the context of the United States health care system, which, as we know, is not free. Access to veterans’ health care is for those with service-connected disability of a certain level, and it is means-tested for all veterans, including atomic veterans. I would therefore argue that is not as good as the scheme in our country.
Anna Soubry
No. I am so sorry. I will be happy to give way at the end, but I want to go through all these other countries to put the record straight.
Let us look at the compensation scheme run by the Canadian Government. It was run for just one year—from 2008 until 2009—and it was principally designed for approximately 900 personnel involved in the clean-up of the Chalk River radiation leak, without reference to any illness or injury. If I may say so, therefore, its relevance to our nuclear test veterans is, at best, peripheral.
In France, nuclear test veterans have been eligible for compensation only since 2009, and they were not consulted on the design of the scheme now in existence. As a result, although it may appear more generous than the UK’s war pensions scheme, which I will describe later, the scheme in France demands a greater burden of proof of a link to service. If I may say so, it would do, because it was introduced only in 2009. As a result, we believe only one award has been made in France, which speaks volumes about that scheme.
It is a similar story in Australia, where the compensation scheme operates in part on the basis of a reasonable hypothesis. Again, that may appear, at first blush, to be more generous than the terms of our war pensions scheme, which demands only that a reasonable doubt of a link to service is raised on the basis of reliable evidence. However, in fact, nuclear test veterans in Australia face a tougher test, which is set out in the legislation. For example, for cancer of the bladder, veterans must have received a cumulative dose of at least 100 mSv of ionising radiation a number of years before clinical onset, while there is no such requirement in the UK scheme.
My hon. Friend mentioned the Isle of Man scheme. The Isle of Man decided to award £8,000 to nuclear test veterans, with no proof of medical causation required. That is, of course, a matter for the Manx Parliament. The UK Government rightly have an evidence-based policy. They also strive to provide value for money for the taxpayer, which the Isle of Man has less need to be concerned with, because it has made only two payments.
Mr Baron
Our central argument is not to put the science to one side, as the Minister suggested. We can argue about the science, and both sides will be able to draw justification for their particular line. The Rowland report was certainly peer reviewed and accepted by the New Zealand Government of the day, so it cannot be easily discarded by the Minister.
Let me return, however, to what I call the international table of decency. The Minister needs to check what happens with regard to US veterans, because those who turn up at a veterans’ hospital have access to free health care. In addition, there does not have to be a causal link between being at the tests and one of a series of illnesses—mostly cancer, but other illnesses, too.
The Minister also mentioned Canada; again, no causal link is required, but it is clear that the payment is there to be made. Likewise, the Minister is slightly incorrect, or disingenuous at least, to suggest that we can simply discard the example of the Isle of Man. She says that only two payments have been made, but she also needs to check that figure, because my evidence suggests that 17 have been made to date.
Mr Gary Streeter (in the Chair)
Order. Before I call the Minister, may I repeat the obvious point that interventions should be brief?
Anna Soubry
That is what I am told. If my hon. Friend is saying that it is not true, we will get it sorted out and we will find out. My information is that there have been two payments. He misses the point about the American system, which is that it is means-tested, while ours is not. I have made my point about Canada, where the scheme applied to 900 personnel involved in a clean-up after a radiation leak. I would therefore suggest that there is no comparison to be made in relation to nuclear test veterans.
On the science, my hon. Friend relies on one report, and I have made my comments about it. I rely on three reports, which have been done over many years, and I know of no one who challenges their findings.
Mr Kevan Jones (North Durham) (Lab)
I apologise for not being here earlier, but I was in another meeting. Does the Minister agree that the issue with the Rowland study, which I have read on several occasions, is that although it found radiation could, in some cases, cause chromosome abnormality, it did not—this is the important next step—show that those chromosomal changes led to cancer?
Anna Soubry
I am grateful to the hon. Gentleman for providing that information. That is another compelling argument in relation to the science.
I want to make it absolutely clear that it gives no one any pleasure to stand up and to have to talk about these things, because it sounds as if no one cares. On the contrary, those of us who do not agree with my hon. Friend and the £25 million fund that he advances do so not because we do not care, but because we know what the science says and because—I certainly take this view—we have to set this issue in the context of all our veterans, so that we do justice by everyone. We must always be careful not to be seen in any way to single out one group and put it above another.
I really take issue with the idea that we are somehow being shameful, or that we are in any way wrong, in our attitude to our nuclear test veterans. That is not the case. The existing scheme is good, fair and, arguably, generous, and it is one we should be proud of. Of course one could always argue that anyone in receipt of any form of compensation or benefit should have more, but what we have at the moment is fair and generous.
Let me come on to our scheme, because it is important to put on the record that any veteran who believes they have suffered ill health due to service has the right to apply for no-fault compensation. We therefore have a no-fault compensation scheme under the war pensions scheme. Where there is reliable evidence that disablement is due to service, a war pension is awarded, with the benefit of reasonable doubt always given to the claimant. Nuclear test veterans are no different, and war pensions are paid to claimants for disorders accepted in principle as being caused by radiation, where the evidence raises a reasonable doubt of service-related radiation exposure. In addition, awards are made automatically to nuclear test veterans who developed certain leukaemias within 25 years of participating in the tests. For some, therefore, there is an automatic entitlement, which is absolutely right. Again, that begins to move us up that so-called league table, if, as some would argue, such a table exists.
It should be noted, however, that in May this year the first-tier tribunal, the war pensions and armed forces compensation chamber, delivered a decision in a group action of 14 nuclear test veterans’ war pension appeals. The majority of the appeals were rejected. The tribunal found material exposure where appellants undertook work in forward areas or otherwise came into contact with radiation, but not in relation to the majority of the bystander appellants. The decisions of the tribunal support the MOD’s current policy relating to claims for a war pension made by nuclear test veterans.
Mr Baron
The veterans have made it clear that they find the war pensions process time-consuming and arduous, even when they are successful. We talk about success rates, but 90% of the veterans membership have failed to get a war pension.
As for the international table, the compensation payments in the USA, Canada and so on—although I am focusing on recognition, not compensation—are made in addition to war pensions that are already given to veterans. We should not paint this country’s war pensions as doing anything special, when those are very much automatic in other countries, and there is compensation on top of that.
Anna Soubry
I have made my comments about the so-called league table, and have relied on the information I have been supplied with, but I do not believe that our nuclear test veterans are at the bottom of any league table. I certainly do not believe that our record is shameful.
The Government’s second reason for remaining unable to support a benevolent fund concerns the comparison that my hon. Friend has made with compensation packages provided abroad. I hope that I have dealt with all that. My hon. Friend mentioned the sum—it is actually £20 million—given by the UK Government as compensation to the Australian Government in the 1990s. We should be clear about why that money was made over. The £20 million was ex gratia and was given to the Australian Government to contribute to the total cost of rehabilitating the test sites in Australia. Payments were made in instalments, the last being made in 1998. I do not want it to be suggested that the Government somehow advantaged veterans or other people who served in the forces in Australia.
The Government hold the view that to create a benevolent fund would be tacitly to accept liability for which no legal grounds exist. That was demonstrated in the atomic veterans group litigation for damages against the MOD in 2006. In 2009, 10 lead cases were allowed to proceed to a full trial on causation, at the judge’s discretion, under the Limitation Act 1980; normally, there is a three-year statute of limitations on personal injury claims. The MOD appealed, and in 2010 the Court of Appeal overturned the High Court ruling in all respects, except for one case. In arriving at its judgment, the court also considered the merits of the claims in terms of causation and concluded that their general merits were extremely weak.
Mr Baron
The Minister has been generous in giving way, which is appreciated in a debate of this sort. Payment to a benevolent fund would not necessarily be an admission of liability. An ex gratia payment makes no admission of liability or guilt. We need to make that clear. The Government have made ex gratia payments to other countries, as the Minister readily admits.
Anna Soubry
I must throw that back to my hon. Friend and ask him for what purpose he wants a benevolent fund. Is he saying that the nuclear test veterans’ need is greater than that of other groups of veterans? What would the payment redress?
Mr Baron
I am pleased that we are clarifying this. To repeat what I said earlier, the payments would be dispensed on the basis of need, to help with care and treatment, not on the basis of entitlement. Not all veterans would receive it, but it would be recognition of the fact that their service was in many respects unique, that the science was at the time unknown and that the risk was unquantifiable. Let us not forget that those servicemen were doing national service; that is an important factor. In many respects their service was unique, and we should recognise that.
Anna Soubry
I do not think that that is the strongest of cases. We know what the science tells us. If the view is advanced that the group of veterans in question—and I pay tribute to their service—should have the money just because they did that work on the country’s behalf, I can hear that being advanced by all manner of other veterans groups with equal force.
Mr Kevan Jones
When I was a Minister, I authorised a settlement proposal, because in my opinion large amounts of public money should not be wasted on lawyers when the case could be settled without the question of liability. Unfortunately, the settlement that I authorised was rejected by the lawyers involved. I am sorry, but I think that it was the individual veterans’ best chance of getting a large amount of compensation. The figure stretched to several million pounds.
Anna Soubry
I am very grateful to my hon. Friend—there is no harm in my calling him that—who raises an important point, which has already been explored, quite properly. I was shocked by it. I do not know the details, but I have experience as a criminal barrister and know that every lawyer is under a duty to consult the client first. No lawyer ever makes the decision—although, apparently, in the case in question, very unusually, that was what happened. The client provides the instructions and makes the decision. Perhaps the hon. Gentleman and I should talk about those events after the debate. I should like to know more.
I was talking about a case that went to the Court of Appeal, where the general merits of the claims were found to be extremely weak. On appeal, the Supreme Court ruled in March 2012, on a majority decision, in favour of the MOD. Significantly, all the justices, even those dissenting, recognised that the veterans would face extreme difficulties proving causation. That brings us back to the science.
The MOD continues to recognise the concerns of nuclear test veterans—I am always prepared to listen and like to think that I have an open mind, although I have spoken frankly this afternoon. However, there is no medical or legal evidence to support calls for compensation of the veterans as a group—and I hear what my hon. Friend the Member for Basildon and Billericay says about seeking a benevolent fund, not a compensation fund. Any veteran who believes that service has had an impact on their health can submit a war pension claim. Where the evidence supports their claim, we will provide financial compensation. However, recent legal cases have shown that the incidence of that is far lower than many veterans organisations claim.
The argument for a £25 million benevolent fund to compensate veterans and family members affected by ionising radiation is flawed. The UK’s existing health, social and welfare support for its citizens and the specific support for all veterans make it unnecessary. Indeed, when we consider the public investment in the NHS and in the social and welfare fields, it can be argued that the financial value of that support far exceeds the monetary value of any compensation payment that the Government would pay.
Flood Defences (Thurnham, Lancashire)
(11 years ago)
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Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
It is a pleasure, Mr Streeter, to serve under your chairmanship and to welcome the Minister to his post. I congratulate him on his appointment; I am sure his response at the end of this debate will show him to be a wise and listening Minister.
Thurnham is a small part of the parish of Glasson Dock, on the edge of Morecambe bay. The sea defences are situated in the Cockerham and Thurnham areas of north-west Lancashire, running approximately 7.7 km from Cocker Bridge on the A558 in the south to Janson Pool in the north, south-west of the port of Glasson. They form an integral part of the west Lancashire coastal defences, providing protection against tidal inundation from what is essentially the estuary of the river Lune as it goes into Morecambe bay.
The area has been subject to flooding damage through overtopping and breaching of the existing defences in the past. The most recent floods occurred in 1977, when approximately 540 hectares of land were affected, and in 1983 and 1990, when approximately 50 hectares were flooded. As one can tell from the description, it is mainly a lowland mixed farming area, with sheep and some dairy. There are also important tourist facilities in the form of caravan parks, scattered residential housing and one listed monument in the remains of Cockersands abbey.
In 1999, Jacobs Engineering completed a business case for Cockersands sea defences, which proposed a “hold the line” option. In January 2004, a reappraisal of the economic business case to refurbish the existing defences was undertaken by Jacobs. It concluded that no capital scheme could be promoted, although it recommended that further options, including managed realignment or continued maintenance, could provide a better business case.
In November 2004, a further study was undertaken to consider the recommendations of the economic reappraisal, and that determined that a managed retreat scheme could be the right economic method, even when all the land and buildings were written off from tidal inundation and purchased at their market value. In arriving at the conclusions, Jacobs recommended that a physically based model to simulate onshore tidal inundation and onshore wave inundation for different return periods was undertaken as its conclusions were limited by the quality of the available flood spread information.
Consequently, maintenance activities continued, in line with the original recommendations from the shoreline management plan. In January 2008, Jacobs completed a technical report, investigating the effects of tidal flooding should the existing defences be removed, as well as the several managed realignment options identified in the 2004 studies. In 2009-10, the shoreline management plan was updated by Halcrow and recommended that a “hold the line” policy should be adopted for years nought to 20, followed by managed realignment for years 20 to 100. The shoreline management plan updated the economic appraisal in line with the latest guidance.
I have raised this debate because I am trying to establish something. Since 2010, there has been a series of meetings between Environment Agency officers on the ground and the Cockersands Forum steering group, which was established by the parish council. All those meetings have been open and transparent, and shared information has gone backwards and forwards, but we are now getting to the point where certain fundamental policy decisions need to be made by Ministers if we are to make any kind of progress.
The Cockersands Forum steering group, which is formed of residents, considered that the flood defence rebuild costs that were put in by the Environment Agency were inflated, and that the reports of the overtopping events from past flooding were inconsistent with their own knowledge of the history of what had happened. Interestingly, I understand that in the middle of the discussions between the agency and the local residents, through the forum, when the sea defences were looked at properly and people walked them, the agency was prepared to admit that the defences were in a better state of repair than was perhaps first apparent.
The discussions have got to the point where the Environment Agency has been prepared to say that it will hold the line for 30 years. That was something better. Clearly, however, the fact that the defences will be maintained for only that amount of time will have a significant impact on the value of residential homes and businesses. How can people in this area now sell or invest for the future, knowing that there is possibly a 30-year time limit, after which the defences will not be manned? The issue for them is this: how can any Government simply let good farming land, good housing and good businesses be slowly ruined, based on assumptions about possible sea levels in 30 years’ time?
It seems ridiculous that lives can be ruined on such speculation when there is no exact science, yet the plans in place already mean that there is blight in the specific area and particular residents are unable to sell their properties, despite wanting to move on because of age or family circumstances. In a sense, it is a death knell to Thurnham and the surrounding area that there can be no movement in and no movement out.
The residents are practical people; as you and the Minister well know, Mr Streeter, we are all practical people in Lancashire. So the residents took the matter further and looked at all the past evidence they had, in the form of photographs and written evidence, about the 1977 flood. They came up with an extremely sophisticated diagram of what had happened in that year. What they proved to the Environment Agency—to be fair, the agency accepted it—was that it was possible to see in some of the historical detail that the flooding covered a much wider area than was set out in the original Environment Agency plan. That, at least, is my understanding.
Now we are in a strange position. My understanding is that the Environment Agency has accepted that local residents, through their knowledge of history and what they have produced, have demonstrated that if the defences go down, a much wider area will be flooded than was set out in its original statement. However, strangely enough, that does not affect any of the agency’s cost-benefit analysis between its original assumptions and its present-day assumptions. It still wishes to stick to a policy of “hold the line” for 30 years and after that to manage retreat, leaving the area, as I have said, to the depredations of the sea and whatever we can predict about the sea and rivers in 30 years’ time. So the strange position is that although residents, to my knowledge and that of the Environment Agency, have demonstrated that a bigger area will be flooded in the future, that will not affect the cost-benefit analysis.
One of the key determinants appears to be the cost-benefit figure that the Treasury established in respect of losing farming land in particular. I understand that this is a long-established Treasury figure, which takes no account of rising population, both here and across the world, or of the increased concern that we all have—in whatever country we live—about food security.
I wish to ask a particular question of the Minister. If my assumptions are correct about this cost-benefit analysis, are his Department or the Treasury, or both, doing any work to look again at revising the old cost-benefit of farming land, given the national situation in terms of population growth and the political concerns among all parties about food security?
Secondly, let us take the boundaries of my constituency and that particular part of the west coast of Lancashire. At the end of my constituency is the town of Fleetwood, where the Government have just agreed—I am grateful for it—that £65 million is to be used to improve flood defences. The Rossall sea wall needs to be demolished so that a new wall can be put in. It will protect 12,000 homes.
However, from the outside it looks as if the Lancashire coast is being dealt with in separate sections. Fleetwood, quite rightly, gets £65 million; the sea wall there needs attending to. If anyone sees that sea wall, they will know that it is like the Berlin wall. The poor residents need something that might look better and might do a better job. However, just along the coast, there is another village called Pilling, where I have regular meetings. Again, that is a lowland area, next to Thurnham, where there are also concerns about flooding and land drainage. Yet at the Pilling meetings, there is no mention of what is happening next door in Thurnham. That might be because Thurnham comes under Lancaster district council and Pilling comes under Wyre district council. Nevertheless, it seems a bit odd, because my understanding of water is that when it comes through the dykes or over or through the sea defences, it does not worry whether it is flooding Pilling or Thurnham, which are next to each other.
One question that I have for the Minister has already been asked by people in local parishes—what happened to the old land drainage boards, which used to cover wider areas? Also, is there a bureaucratic impasse because of different council boundaries? Do we need to consider a better structure in the long term? That might not be the land drainage structure of the old days, which I understand was somewhat bureaucratic—but at least it involved local landowners, on a wider scale, in the nature of drainage and flooding of their areas.
Will the Minister consider looking at a different vehicle, which could involve, yes, the parishes, villages and local residents in some form or fashion and enable them to cut across the district councils and look at land drainage areas as they are—that is, as geographical drainage areas that do not respect council boundaries? Perhaps we could deal with some kind of operation in those terms.
My understanding is that there has been some discussion on the east coast of this country about such schemes, and that there are still some leftover remnants of the old land drainage boards around the place. They might give us some pilot schemes to see whether the boards could be revamped in the ways I have outlined.
What the people of my constituency, in my part of Lancashire, are looking for is a wider look at what the Government’s plans are for the future. How can a Government spend so much money—quite rightly, in the case of Fleetwood—to protect one part of the coast, and then leave another part to the vagaries of what the science presumes will happen in 30 years’ time: sea levels will be somewhat higher and farming land will not be as valuable as it could be? Farming land is not as valuable as people’s lives, of course; I accept that. Somehow we do not seem to see what the wider plan for the area is. If my residents were able to see and understand that wider plan, they might have a better way of grasping what the Environment Agency’s and the Government’s policies are.
I am particularly interested in learning what the new Minister—the new broom, as they say—might want to do to offer some succour to people across my constituency, whatever district council they belong to. Some have suggested that there is a deliberate attempt to carve off one village against another. I would never support such conspiracy theories; I simply think that it is good old bureaucracy again.
The third thing that I want to raise is a little blue-sky thinking; although we are practical in Lancashire, we can think outside the box. If the Environment Agency is going to hold the line and if the Government are going to supply the money to keep the sea defences going for 30 years and then make a decision—we have not discussed this with the parish council, although it has been talked about in the area generally—could there be a special levy in the area as part of the parish rate, which could go into a fund to be invested for 30 years? We wanted to describe it as a sinking fund, but since we are talking about flooding, let us talk about a floating fund.
If the levy was £25 a year, let us say, with 500 residents paying it, in 30 years there would be more than £300,000 before interest. Any parish or group of residents would be in a very strong position, whoever the Government were in 30 years’ time. If they had a body of money to contribute, it would make it much more difficult for the Government of the time to say, “We are still going to abandon the defences.”
I have discussed the levy with the district council. If there were such a charge, and if somebody wanted to buy a property, would it appear in the land charges office? If it did appear, would the fact that it was offering another stage of protection help to maintain the values? This is anecdotal evidence, but various estate agents in Lancaster feel that it would help to maintain values and keep that exchange of property and businesses going on, because there would be further protection building up over time.
Interestingly, the council said there was nothing in law that would allow it to specify such a measure on a land charge. However, that might not be needed. It might simply need a parish rate and a parish flood defence rate. I do not know. I assume that when searches are made, the council charge and parish charge come up, so perhaps we could come up with a flood defence charge.
As I said, this is blue-sky thinking. The residents have jobs to do, and we are all trying to find a practical way to assist Government and the Environment Agency. It would be really helpful if some of the experts, who I know exist in the Department, could look at the idea. It might mean talking to the Department for Communities and Local Government.
The residents of Thurnham are trying to find a way in which they can be seen to be helping themselves, but, for 30 years—perhaps even longer—they need Government support to protect the land that they have bought, where they have built their businesses, or have retired to, or where they run their farms.
I did not secure this debate because of any angst with the Environment Agency. I can see an officer here from the Environment Agency; we have met on several occasions. The agency has dealt with the matter absolutely transparently in an up-front way and with a great deal of sensitivity and understanding. We are talking about people’s lives, businesses and properties, and I pay due credit to it. However, we have now hit an impasse and we need Ministers to start looking at the policy implications.
If the problem exists in Thurnham, which is a small part of Lancashire—obviously dear to me as part of my constituency, and even more dear to the people who have built their lives and businesses there—it must exist across the piece. It cannot be right for any Government to take a 30 or 50-year view that somehow, because it is mainly agricultural land, it will be worth less than it is today. If people are willing to try to find a vehicle to help themselves and to join with the Government in maintaining the sea defences, it cannot be impossible to find the time, effort and brains to provide them with a little extra help.
I will be delighted to hear the Minister’s comments about those three points. I understand that he cannot say yes, but if he could stand up and say that Thurnham will be protected for the next 100 years, I would be more than grateful. I understand his position. He might need to take the issues away, but Thurnham in Lancashire is willing to help and to offer ideas. It desperately wants to keep the livelihoods of people who have farmed there for generations. Generations of family life have gone into that particular area, and they simply want a future for themselves, their children and the people of Lancashire, and to keep a beautiful part of Lancashire safe from the sea.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)
It is a pleasure to serve under your chairmanship, Mr Streeter. I want to thank the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) for giving us the opportunity to explore the issues. I also thank him for the way in which he has approached the subject. It would be too easy for a constituency MP to come here and say, “There’s a problem. What are you doing about it, Government?” He is doing that to a certain extent, but he is also saying that the people in the communities that he represents are very open to being a part of the solution and to working in partnership with the Government and the Environment Agency to achieve that. I welcome the role that he has played in bringing the sides together and ensuring that we have a helpful way forward, and I really mean that.
As a Member of Parliament representing a coastal constituency, I know exactly what the hon. Gentleman is talking about in terms of discussions on managing the coastline for the future. I represent, among many other communities, the village of Boscastle, where, as the hon. Gentleman might remember, there was a horrendous flood in 2004, which also affected communities in Crackington Haven and Canworthy Water. The issues of flooding are foremost in my mind both as a constituency MP and as a Minister with new responsibilities, which I am trying to carry out to the best of my ability.
The hon. Gentleman will be aware—in fact, he pointed to this—of the national scale of the challenge that we face on flood management. In England, one in six properties is at risk of flooding. By area, 11% of the country benefits from flood defences, including some of our most important commercial and economic centres. This includes 1.3 million hectares of agricultural land—a point that the hon. Gentleman made. The majority of the most versatile and productive farmland in England is in flood risk areas. The soil is often productive because it is in a river catchment, and it is very fertile, but it is intrinsically vulnerable to flooding.
Flood management supports the Government’s primary objective to deliver economic growth and build a stronger economy, and it remains a top priority for the Department. The Secretary of State and my predecessor have both been very clear about that commitment. Proof of our commitment to flood management can be seen in the announcement this summer on long-term capital settlement to improve flood management infrastructure. This announcement set out a record level of capital investment of more than £2.3 billion in the six years to 2021.
However, we are not only increasing capital expenditure; we are providing an above-inflation increase of £5 million for the Environment Agency’s flood maintenance work in 2015-16. That is very important for schemes such as the hon. Gentleman’s, which have been there for some time, and we need to maintain them for the next few decades. As he has outlined, there is a potential plan, but we cannot guarantee that beyond 30 years. That is not to say that we will walk away after 30 years, but we will come back to such issues as I continue my speech. Although we have made significant commitments, I know that the hon. Gentleman is aware of the need to contain public expenditure. Central Government funding is simply not sufficient to pay for everything that would be worth while to some degree in flood management. As a result, there will continue to be stiff competition for Government funding, and we must ensure that we get the best value for money for the taxpayers’ investment.
The Environment Agency’s capital programme currently provides an average of at least £8 of benefits in damages avoided for every pound invested in construction of defences. However, the benefits realised are in fact even greater. Once the capital has been spent on construction, the routine maintenance of those defences can provide an even higher rate of return. The agency estimates an average benefit-cost ratio of 14 to 1 for its asset maintenance programme.
It is no longer the case that the Government fund only the cream of projects with the very best benefit-cost ratios, while leaving other worthwhile projects with nothing. In 2011, we introduced partnership funding to ensure that a fair portion of DEFRA funding can be made available for any worthwhile improvement scheme. That inevitably means that not all Government-funded schemes are fully funded. The new approach ensures that investment in flood management is not constrained by what the Government alone can afford, thereby increasing certainty and transparency on the level of DEFRA funding for projects, leveraging further investment towards worthwhile projects, allowing greater local ownership and choice, and encouraging more cost-effective solutions. That is just the approach that the hon. Gentleman’s constituents are keen to see.
So far, partnership funding has brought forward up to £148 million in external funding over the four years to 2015, compared with £13 million during the previous three years. That huge increase in match funding is helping those projects, which were perhaps slightly less attractive initially, into development.
Early indications suggest that up to 25% more schemes will go ahead in the coming years than if project costs were met by central Government alone. That is relevant to the hon. Gentleman’s case because a partnership approach is clearly needed to manage the flood risk in such areas. The work of the Environment Agency and other risk-management authorities in the shoreline management plan has highlighted that issue. Further hydraulic modelling and more detailed economic appraisal commissioned by the agency has clarified the fact that the most effective option is not managed realignment but maintaining the existing line of defences for as long as it is feasible to do so. We are then back to the cost of doing that beyond the 30-year period.
The defences will eventually need to be rebuilt. They can be patched for only so long, and it seems unlikely that central Government funding will be able to meet the full cost of those projects. The Environment Agency has told me that it estimates that the defences will need to be rebuilt at the end of that period. In the meantime, I understand that the agency’s recommended policy is to continue to maintain the defences, subject to the availability of funding.
I have already explained the priority the Government place on flood management and the resources they have secured to demonstrate that commitment. However, I cannot tell the hon. Gentleman what the funding situation will be in 30 years’ time. I have highlighted the competition that already exists for that funding. The geography of the area means that, although the maintenance and renewal of the defences is economic, the case for investment to improve the defences may not be so great as in some other areas, including areas elsewhere in his constituency that, as he points out, are about to receive significant investment. In such situations, the community cannot assume that the taxpayer will guarantee the full cost of maintaining and improving the defences, so there will need to be a partnership. Any local arrangements that reduce the cost of maintaining and improving the defences, or raise contributions from other sources, will help to deliver that.
The Environment Agency is undertaking local discussions on how best to manage flood risk, including the residual risks if flooding does occur. I ask only that the hon. Gentleman encourages all interests to work together, as he is clearly doing.
The hon. Gentleman has highlighted a number of solutions suggested by the community. His first question was on why areas are considered separately. Bluntly, it is because there are different risks in different areas. Some flood risks are linked to river catchments, and some are connected to topography and its interaction with the sea, so there are a number of solutions for different areas. Cost-benefit ratios have to be considered in relation to the number of families and homes at risk. All of those things are considered alongside each other, so they are not held entirely in isolation. We have to consider individual schemes. In Thurnham, of course, there is an existing defence, which highlights the fact that we are looking at a particular catchment in relative isolation.
There are still many internal drainage boards doing great work across the country. They are established and have set procedures and set ways of bringing in the revenue they need to carry out the work that they want to do. We are very supportive of projects and innovation, so we have allowed seven pilots to proceed in which the maintenance of watercourses will be considered. The internal drainage boards and farmers are keen on that, and we will look at how those pilots go.
The hon. Gentleman’s constituency has a coastal situation. There may be a solution that we can move towards, although we will have to consider how that model might work in his case. The Secretary of State for Environment, Food and Rural Affairs has previously said that he is happy for there to be new internal drainage boards if needed, so long as we are sure that they fit the circumstances that the hon. Gentleman describes.
On the “floating fund” that the hon. Gentleman excellently outlines, it would be positive to see the community taking steps to prepare for what might happen in 30 years’ time. He has asked me to contact colleagues in the Department for Communities and Local Government to consider what might be the best mechanism to achieve that, and I am happy to do so because we want to overcome any barriers to the local community starting that fund so that the contributions can begin to be built up ready for such an eventuality.
I will continue to ensure that flood management remains a priority and that Government resources are used to the best possible effect. We will continue to bear down on costs and to press the Environment Agency and other risk management authorities to look for better ways of working within available budgets. That will, however, need to be in partnership with local communities, such as those that the hon. Gentleman so ably represents today.
DEFRA is working to remove unnecessary burdens that might discourage farmers and landowners who want to undertake their own maintenance, and there may well be other approaches, too. On 14 October we launched seven watercourse maintenance pilots, and we will consider whether they achieve the outcomes hoped for by the IDBs in those areas. One of those pilots is in the Alt Crossens area of Lancashire, which is particularly relevant to the hon. Gentleman. He may wish to look at what is happening there.
Nationally, the Environment Agency is working with the National Farmers Union and other partners to improve communications and guidance for farmers who wish to undertake their own maintenance. Although I am focusing on those challenges, I do not underplay what is being achieved now and what could be achieved in future both in rural and urban areas. The agency is currently maintaining more than 97% of flood defence assets in high-risk areas in the required condition. Those defences help to protect more than 1.6 million properties and the vast majority of the most productive and versatile agricultural land.
Capital projects in the DEFRA-funded national programme completed in the past two years have provided improved flood protection to more than 150,000 hectares of farmland, as well as improving protection for more than 100,000 households. Protecting households and farmland from the risk of flooding underpins the Government’s priorities of delivering economic growth and building a stronger economy, and I am happy to work with the hon. Gentleman to deliver that.
North Liverpool Community Justice Centre
(11 years ago)
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Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Streeter.
When the North Liverpool community justice centre was opened in 2005, it was designed to be an innovative court and community resource, learning from the Red Hook community justice centre in New York. The centre serves the deprived area of north Liverpool, including Kirkdale, Anfield, Everton and County. The area has strong communities that face severe challenges, and there are many vulnerable people. Half the children in Kirkdale live in poverty. Male life expectancy is 72, which is 13 years less than in Kensington and Chelsea; women’s life expectancy is 76, which is 14 years less than in Kensington and Chelsea.
North Liverpool community justice centre has pioneered new approaches to offending. Restorative justice, conditional cautions and judicial oversight are distinguishing features of the centre’s work. They enable the court to consider individual circumstances, to relate crimes to those who have suffered from them and to consider the impact on the community. Key criminal justice agencies, including the police, probation, Crown Prosecution Service and youth offending teams, are co-located in the centre.
Mr Gary Streeter (in the Chair)
We will gently get under way again. We were very much enjoying Mrs Louise Ellman’s speech.
Mrs Ellman
Thank you, Mr Streeter. The co-location of key criminal justice agencies in the centre—the police, probation, Crown Prosecution Service and youth offending teams—is an important part of its approach, but there is more. Crucial support services—dealing with, for example, drugs, debt, financial problems generally, victim and witness support and antisocial behaviour—all working together are critical, as is vital family support. It is a uniquely holistic service.
The centre has been privileged to be served by two outstanding judges with their colleagues—his honour Judge Fletcher, and from December 2012, Judge Clancy. The writing has been on the wall for some time, before the Government’s hasty consultation on closure, which took place in six rushed weeks over the summer recess. The answer to my parliamentary question about the issue on 9 September showed that the centre’s fate was sealed, and the Government have now announced that it is to close.
The reasoning on which the closure is based fails in two fundamental respects. The Government’s key argument is that the cost of the centre does not justify its continuation. First, the Government’s claim that it has failed to address crime successfully is deeply flawed. Crime rates in north Liverpool, which is the area covered by the centre, fell by 7.2% between 2005 and 2010—much more than elsewhere in Liverpool, and much more than elsewhere across the country. It must be remembered that the centre hears a high proportion of serious crimes. Some 88.1% of cases involve violence against the person, while the national average for cases of that sort is 47.8%. That makes its success even more notable. Its important work in addressing antisocial behaviour—a demand of the local community to address that—is simply ignored in the assessment. That work is vital to the community, yet it does not feature in the judgment on the centre’s future.
Secondly, and inexplicably, there has been no assessment of the centre’s key aim of conducting preventive work and supporting the community through its inter-agency approach. That failure is incomprehensible, as prevention of crime and supporting the community was a major objective of the centre from the very beginning. Its outstanding work on victim and witness support has resulted in, for example, a 90% to 100% successful conviction rate in cases of domestic violence. However, that outstanding work has been ignored, and I understand that with the centre’s closure, the person who has been doing that work—someone who has received national awards for their success—will cease doing it.
Steve Rotheram (Liverpool, Walton) (Lab)
As we would normally expect, my hon. Friend is making a very powerful argument on her constituents’ behalf. However, the justice centre also serves constituents in my constituency, and the closure proves the point that the Government understand the cost of everything, but the value of nothing. The Merseyside police and crime commissioner, Jane Kennedy, has described the proposals as “unnecessary vandalism”, and she has suggested that such a cut would make the job of our police force
“more difficult as the reforming work with prolific offenders will lose its focus”.
Does my hon. Friend agree that we will see reoffending rates rising because of the decision?
Mrs Ellman
I agree with my hon. Friend. He makes very important points, and his comments have also been made by the mayor of Liverpool, Joe Anderson.
The centre conducts excellent work with young people in schools—it has been involved with 18 schools in the local area—and it works with colleges such as Rotunda college, helping to build the confidence of young people, yet that work is disregarded. Innovative links with mental health services make it a specialist centre, yet that work is simply cast aside. Many offenders suffer mental health problems that need to be addressed. The centre has been doing valuable work in that regard, yet even that is not worthy of assessment. Excellent rehabilitation projects such as the Turnaround project, supporting women, are considered to be unimportant. When I visited that project, I realised how important it was and how much those participating in the project valued it.
The crucial work of the citizens advice bureau, giving vital practical support to vulnerable adults and the community as a whole, is not considered worthy of consideration. The CAB is situated in the centre, and I understand that it will close when the work of the centre comes to an end. That will be a grave loss for the whole community; yet again, it has not been considered.
The failure to assess a key part of the centre’s remit is unacceptable. The Government even have the gall to criticise the centre for reducing its community involvement. That is hardly surprising when the Government themselves have cut funding so much that the community engagement team have been disbanded. The manager left last year and has not been replaced; the deputy is on long-term sick leave; and in the past three months the centre manager and district manager have gone.
What is to happen to these vital services? What assurance can the Minister give me? The North Liverpool community justice centre provides an important facility for the people of north Liverpool. It has a dedicated staff, committed to the local community. Its budget was cut dramatically, from £1.8 million a year in 2005 to £1.3 million a year in 2012, and a further £300,000 reduction was planned.
According to the people I represent, the centre has made a real difference to their lives. Yes, the centre is primarily about the court and reducing offending and it has achieved that, but it is also about working with the local community in this very deprived area, building links and developing community strengths, and people in the community value that. However, the assessment on which the decision to close is based ignores that vital preventive community work and dismisses the significant reduction in crime in the area.
Steve Rotheram
Once again, my hon. Friend hits the nail on the head, and she is very generous about giving way. Does she agree with me that the decision to make the announcement on the cusp of the parliamentary recess has meant that the ability to scrutinise the decision fully has not been afforded to local agencies and people who want to keep the centre open?
Mrs Ellman
I fully agree with my hon. Friend’s comments. The consultation was carried out during the parliamentary recess. It was rushed. Many people did not have the opportunity to make a response, and many people did not realise that it was in fact taking place. It seems a very curious time in which to carry out a consultation on something as serious as this.
I am convinced that the decision is based on financial considerations, taking advantage of the break in the centre’s lease. We are told that the work will transfer to another court. Will that indeed be the case? What will fill the gap in terms of reducing crime, undertaking vital preventive work and supporting this resilient but deprived community? I hope that the Minister today can provide the answers.
Mr Gary Streeter (in the Chair)
Before the Minister responds, it might be helpful to know that the sitting must end by 5.27 pm.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
It is a pleasure that for my first speech in the Palace of Westminster as a newly appointed Justice Minister, I am serving under your chairmanship, Mr Streeter. I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman) on securing this very important debate on the North Liverpool community justice centre. In her speech, she made a number of comments, and I hope that by the time I have finished my speech, I will have allayed some of the concerns that she and the hon. Member for Liverpool, Walton (Steve Rotheram) have expressed.
The decision to close the centre was an important one, based on the hard truth that the local drop in work load and the high cost of running what is a single courtroom centre have made it untenable. Following the public consultation on the centre’s future, I announced in a written ministerial statement last week the decision to close the centre. Currently, it is planned that the last sitting day will be Friday 28 March 2014. To keep the centre running would cost almost £1 million a year, and there is no evidence that that would be money well spent in terms of the results that it achieves compared with other courts.
My right hon. Friend the Secretary of State did not take the decision to close the centre lightly. He did so after a detailed analysis of the centre’s work and of all the points raised in the consultation responses. The consultation did not identify any single operational or efficiency reason why the centre should not close.
I stress that we are committed to continuing to provide court users in north Liverpool with effective access to justice, while seeking ways to do so at a lower cost and alongside our efforts to improve the efficiency of the justice system as a whole. In transferring the majority of the centre’s work load to Sefton magistrates court, we have been clear that the principles of the centre will be maintained and at a court that has modern facilities and a reputation for innovation.
The North Liverpool community justice centre was established in 2005 as a court and community resource, with criminal justice agencies co-located with other third sector services in a dedicated building. The centre serves an area with a population of about 60,000 people in the north end of the city of Liverpool. The original intention was to provide an intensive approach to the crimes affecting the community at a very local level for both adult and youth cases. When it was launched in 2005, the centre’s objectives included the provision of community justice in a deprived area of Merseyside and, through that, a material reduction in reoffending levels through the adoption of innovative approaches to the handling of offenders and very close cross-agency working with both public and third sector organisations.
There is no doubt that the centre rapidly built a good reputation, both locally and internationally, for developing a new approach to court-based problem solving for offenders. However, following an evaluation published in 2012, it is equally clear that the success of the centre in terms of results was at best mixed. There was no empirical evidence to show that the centre was any more successful at reducing reoffending levels than a mainstream magistrates court.
As a result, and given the financial climate, the then ministerial team questioned the value for taxpayers’ money that the centre provided and concluded that it should continue as a court for up to two years, but with a view to increasing its work load and remit. That was vital when the centre’s own catchment area work load was falling significantly, in line with that of other magistrates courts. The increase in work load has been achieved only to a limited extent, with the transfer of mental health cases from a wider catchment area to the centre. As a result, the number of cases heard at the centre has increased during the past six months. For the 12-month period to March of this year, the centre’s courtroom utilisation rate stood at 55%. Between April and July of this year, that increased to an average of 71% through the hearing of mental health cases. However, despite that increase, the actual work load in volume terms remains relatively low.
Steve Rotheram
According to “Doing justice locally: the North Liverpool Community Justice Centre”, a report published by the Centre for Crime and Justice Studies, on page 97:
“As a result of these innovations”—
of the centre—
“our assessment is that criminal justice is speedier, fairer, more efficient, more community oriented, more holistic than the traditional court model”.
Does the Minister agree?
Mr Vara
As I shall come on to say, Sefton magistrates court offers a number of the services that are provided at the centre. The hon. Member for Liverpool, Riverside referred to various co-located agencies, and I assure her that Sefton magistrates court has probation services, a citizens advice bureau and victim and witness support services, among others. The services that are being provided are to be relocated 1.8 miles away to another centre, which will provide the same level of service. I will refer later to the extent that any difference is required.
As I was saying, despite the increase in utilisation, the work load in volume terms remains relatively low and would continue to be so as a single courtroom site. For example, since April the centre has dealt with an average of 168 cases a month, which compares unfavourably with Sefton magistrates court, where the majority of cases will go. Over the same period, Sefton dealt with 467 cases a month. Due to the limited cell capacity at the centre, it is not feasible to transfer in any more custody work to increase utilisation.
A key driver in the decision to close the centre was the fact that there are real limitations to the volume of cases it can deal with as a single courtroom site, and it is three times more expensive than other courts. Furthermore, it is not more successful at reducing reoffending than cheaper courts, so it simply cannot be seen to represent good value for money.
Steve Rotheram
The Minister claims that the centre is not more successful, but that is not the information that has been provided to us—I will get the report and dig the relevant section out. The Deputy Prime Minister, who talked about prisons being “colleges of crime”, and the Prime Minister, who talked about a “rehabilitation revolution”, should have been looking at the centre as a model to take to other areas. What will it cost the Exchequer to send the prolific reoffenders that the centre deals with properly back to prison, because they will no longer be benefiting from the innovative approaches of the North Liverpool justice centre?
Mr Vara
The hon. Gentleman wants hypothetical answers for the future, but I am not delving into the realms of the future. I will, however, look at the facts as they are—as we have them—and if he disagrees with them, I am happy to give him the sources of my information. I repeat that the services provided at the centre will not be affected in any way—they will only be at a different location, some two miles away, nothing more.
Mr Vara
I would like to make a little progress, but I am happy to give way to the hon. Lady a little later.
The outcome of the consultation is to proceed with plans for closure of the centre, but the consultation response identified two areas in which the original proposals should be revised: youth and educational welfare cases. We have listened to those views and revised the proposal accordingly. Youth and education welfare cases will now be dealt with by the Liverpool youth court and the Liverpool and Knowsley magistrates court, respectively. Again, they are around two miles away—no more.
The points about work load and courtroom utilisation, plus the high running costs of the centre, were set out in the initial consultation document and in the consultation response document published last week. Moreover, the criminal justice agencies have reduced the number of people based at the centre, in line with the decrease in work and to meet their changing operational needs. For example, the Crown Prosecution Service has reduced its presence significantly and is now supporting the centre’s cases in the same way as it would in a mainstream court, as opposed to providing dedicated prosecutors and service levels, as it did previously.
As announced last week, the proposal to transfer the work from the centre to the nearby Sefton magistrates court will now proceed. Sefton has excellent modern facilities and good transport links. It has earned its own reputation for innovation, including a dedicated problem-solving court, and because of its efficient processes it was the first model court—subsequently, beacon office—in what was then known as Her Majesty’s Courts Service. Indeed, Sefton magistrates court’s problem-solving approach is built on the principles of the North Liverpool community justice centre, but is achieved at much lower cost. The principles and ethos of the centre will not be lost; they will be carried on at Sefton.
We have much for which to thank the centre. It pioneered a scheme to improve case management—to the centre’s credit, that scheme is now in place in all magistrates courts in England and Wales, reducing waiting times considerably, with the majority of cases completed within four weeks. The spirit of the North Liverpool community justice centre will move to Sefton, while allowing us to deliver cost savings of £630,000 per year.
Mr Andy Slaughter (Hammersmith) (Lab)
The Minister is being generous with his first speech here; I wish it were on a happier subject. Four weeks is an impressive turnaround time. What assurances will he give that it will be maintained when those cases are transferred to a much larger court?
Mr Vara
There is plenty of capacity at Sefton. It has five courts at the moment, and on any given day, two or three are being used. To the extent that more staff and the like are needed, provision for that has been taken on board. I am confident that the rate of processing cases will continue.
The Government published our consultation response on 22 October 2013. There were 18 responses. Five supported the proposal fully, three were neutral and 10 were opposed in some way to the closure of the centre, the choice of Sefton as the court to receive the centre’s work, or both.
The main issues recognised in support of closure were the financial benefit and the fact that the centre had moved away from its original community-focused role. Those opposed to closure focused on what they perceived as an adverse impact on the provision of justice within the north Liverpool community and raised concerns about youth and mental health cases at Sefton magistrates court. As I have said, we listened to those concerns and have acted accordingly.
Closure of the North Liverpool community justice centre will result in savings of £630,000 a year, whereas maintaining its operation would mean a continuation of costs of £930,000 a year, based on this year’s budget. The proposed savings outweigh any perceived benefits from continuing to operate the centre. That is particularly so given that I have been assured that the ethos and principles developed at the centre will live on at Sefton magistrates court, which itself has a reputation for innovative work, but will provide far greater value for money.
Mrs Ellman
Can the Minister give me an absolute assurance that the level of community support, particularly witness and victim support and the critical advice offered by the citizens advice bureau, and the centre’s holistic inter-agency approach will be continued in precisely the same way in those specific areas of north Liverpool?
Mr Vara
The hon. Lady asks a good question, but she must be mindful of the fact that even at the north Liverpool centre, some of the other agencies were decreasing the support that they were giving. That is not to say that that may continue at Sefton, but I assure her that as we speak, other co-located agencies are present there, which I hope will continue to deliver services. However, it would be wrong for me to give a promise based on the declining number of people at the original centre.
As set out fully in the consultation response document published last week, it seems clear to me that the case for change is made and the decision taken is the right one. In conclusion—
Mr Vara
No, I have concluded. I am aware that the hon. Member for Liverpool, Riverside has visited Sefton magistrates court, but I understand it was not recently. I suggest that she and her colleagues visit as soon as possible. I like to think that the concerns that they have expressed today will be eased when they see what is actually on offer.
Question put and agreed to.
Written Statements
Planning Administration
The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles)
We have already taken decisive action to cut unnecessary planning red tape, and to make the planning system operate more efficiently and effectively for applicants, local communities and councils. The national planning policy framework together with the new planning practice guidance website, once it is finalised, will have swept away 8,000 pages of previously impenetrable policy and guidance documents. We have also put in place new permitted development rights to make it easier to get empty and underused buildings back into public use.
In January 2013, my Department launched the planning administration theme on the red tape challenge website. We sought views on how to make the mechanics of the planning system more efficient and accessible, ensuring it is simple, clear and easy for people to use.
As I explained in my written ministerial statement of 31 January 2013, Official Report, column 52WS, this review did not involve considering any changes to planning policy. Moreover, the Government are committed to ensuring that countryside and environmental protections continue to be safeguarded and to decentralising power over planning to local councils, neighbourhoods and local residents.
I would like to inform the House that the Government are today announcing the outcome of the planning administration red tape challenge.
We received around 150 comments in response to our consultation, which we have carefully considered in developing our proposals. Of the 182 regulations on which we consulted and following a rigorous challenge process, we propose, through a prioritised and phased programme, to reduce the overall number of planning regulations to 78—a reduction of 57%.
The principal changes we propose to make to the regulations will:
consolidate the rules on development that does not require a planning application. The current permitted development regulations have been amended 17 times, and need an overhaul to make the arrangements accessible and easy to use for all;
bring together recent amendments to the regulations for the planning application process, and use this opportunity to tackle unnecessary or overly burdensome requirements in the application process;
merge a number of regulations in relation to major infrastructure projects and hazardous substances to simplify and clarify those consent processes; and
scrap 38 redundant regulations that are no longer needed.
Alongside this programme of further simplification, we will also develop and bring forward later this year additional measures to streamline and improve the end-to-end planning process to address other issues raised through the consultation, including reducing delays in getting development underway on sites caused by planning conditions.
Implementing the Growth and Infrastructure Act
I will also be publishing shortly draft secondary legislation on the types of business and commercial projects that can use the nationally significant infrastructure regime. The Planning Act 2008 provides for a streamlined authorisation process for nationally significant infrastructure projects. Changes brought forward under the Growth and Infrastructure Act 2013 enabled the Secretary of State to provide developers of the most significant business and commercial projects in England with the option of having their projects considered through that process.
Under the draft regulations, any developer who wishes their project to be dealt with under the 2008 Act will need first to ask the Secretary of State for a direction. The Secretary of State must be satisfied that the project falls within one of the prescribed types of project and is nationally significant. A policy statement has been placed in the Library of the House setting out the factors that the Secretary of State will take into account when considering whether a direction should be given and how developers can apply for a direction.
European Union (Referendum) Bill
Mr Gary Streeter (South West Devon) (Representing the Speaker’s Committee on the Electoral Commission)
The Electoral Commission has today published its statutory assessment of the referendum question contained in the European Union (Referendum) Bill ('the Bill'), which was introduced to the House of Commons as a Private Members Bill by the hon. Member for Stockton South (James Wharton) on 19 June 2013.
The Commission has a statutory obligation under section 104 of the Political Parties, Elections and Referendum Act (PPERA) 2000 to consider the wording of the question in any referendum Bill that is introduced to the UK Parliament and to publish a statement on its views on the intelligibility of that question. The question currently contained in the Bill is: 'Do you think that the United Kingdom should be a member of the European Union?'
When assessing a referendum question, the Commission's assessment guidelines say that the question should be clear and simple. It should be easy to understand, to the point and not ambiguous. The Commission has a well-established process for making this assessment, which includes undertaking public opinion research through focus groups and one-to-one interviews, writing to interested individuals and groups to ask their views and seeking advice from experts on plain language and accessibility.
Having completed this process, the Commission has concluded that the wording of the proposed question itself is brief, uses straightforward language, and is easy to understand and answer. However they also found it could be improved, in particular to reduce the risk of misunderstanding or ambiguity about the current membership status of the UK within the EU. It therefore recommends that the question should be amended to make it more direct and to the point, and to improve clarity and understanding.
The Commission's consultation, analysis and research with the public has not, however, identified a single preferred wording for the question. Because of the complexity of the issues covered by this referendum question, its research suggests that currently, in the context of a referendum on the UK's membership of the EU, a question using 'Yes' and' No' as response options would not be able to fully resolve those issues. The Commission's recommendations therefore highlight an important decision for Parliament, as to whether to retain or move away from the UK’s recent experience of referendum questions using 'Yes' and 'No' responses.
If Parliament wishes to retain the use of 'Yes' and 'No' as response options, then the Commission recommends that the referendum question should be amended to: 'Should the United Kingdom remain a member of the European Union?'
However, the Commission's research suggests that some people will perceive either positive or negative associations with the phrase 'remain a member of the European Union', although there was no evidence that this wording resulted in research participants changing their voting preference in any way. If Parliament decides not to retain a referendum question which uses 'Yes' and 'No' as response options, having taken into account the risk of a perception of bias which might be associated with that approach, then the Commission recommends amending the question to: 'Should the United Kingdom remain a member of the European Union or leave the European Union?' with 'Remain a member of the European Union' and 'Leave the European Union' as response options.
This alternative version of the referendum question wording was also tested in its research with the public and was considered the most neutral of the questions tested. However, the Commission did not explore the impact of variations to the specific wording of the question and responses, nor did it receive views from would-be referendum campaign organisations about this approach. If Parliament amended the Bill in this way, the Commission would therefore need to undertake a further assessment of the intelligibility of the proposed wording, which it would do as quickly as possible.
The Bill also makes provision for a Welsh version of the referendum question to be included on the ballot paper, although a Welsh translation of the question was not included in the Bill as introduced. Following a request from the hon. Member for Stockton South, and in line with its Welsh Language Scheme, the Commission has also tested as part of its assessment process a translation of the question included in the Bill in Welsh. It is recommending that if the version of the question included on the ballot paper in Welsh is the amended yes/no question, it should be: 'A ddylai'r Deyrnas Unedig ddal i fod yn aelod o'r Undeb Ewropeaidd?' If Parliament decides not to retain the 'Yes' and 'No' question and the question included in the ballot paper in Welsh is the alternative question recommended, then it should be: “A ddylai'r Deyrnas Unedig bara i fod yn aelod o'r Undeb Ewropeaidd neu adael yr Undeb Ewropeaidd? Should the United Kingdom remain a member of the European Union or leave the European Union?”
Copies of both the full question assessment and the accompanying research report, which sets out in detail the Commission's analysis and the rationale for the recommended changes to the question included in the Bill, can be found on the Commission's website at: www.electoralcommission.org.uk.
Dog Attacks (Maximum Penalties)
(11 years ago)
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The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)
My Department consulted this summer in England, and in Wales on behalf of the Welsh Government, on possible increases to the maximum penalties for aggravated offences under section 3 of the Dangerous Dogs Act 1991. These relate to a dog being dangerously out of control and a dog killing or injuring a person or an assistance dog.
We undertook a short, online survey of people’s views on options for an increase in maximum penalties which currently stand at two years’ imprisonment and/or an unlimited fine for aggravated offences.
A total of 3,180 people and organisations completed the online survey and a number of organisations sent written representations. In summary, some 91% of respondents considered that maximum penalties should be increased. 83% thought there should be an increase for injury to an assistance dog or a person, 69% for the death of an assistance dog, and 76% for the death of a person.
In coming to a decision on new maximum penalties for dog attacks, we have taken into account the responses to the consultation and the need for maximum penalties to be proportionate to the offence. We have also compared the current maximum penalty with the maximum penalties for other offences. The maximum penalty of causing death by dangerous driving is 14 years’ imprisonment and the maximum penalty for causing actual bodily harm is 5 years’ imprisonment. Anyone who deliberately sets their dog on a person and kills them—in effect using their dog as a weapon—could be charged with murder or manslaughter, which carries a maximum penalty of life imprisonment. The Government propose, therefore, to increase the maximum penalties for aggravated offences under section 3 of the 1991 Act in England and Wales to:
14 years’ imprisonment if a person dies as a result of a dog attack
5 years’ imprisonment if a person is injured by a dog attack, and
3 years’ imprisonment if an assistance dog either dies or is injured by a dog attack.
The increase in maximum penalty for a dog attack on an assistance dog, such as a guide dog for the blind, reflects the devastating effect such an attack has on the assisted person. As now, each of these offences could also be punishable by an unlimited fine instead of, or in addition to, imprisonment. An amendment to the 1991 Act to effect these changes will be tabled for consideration during Lords Committee Stage of the Anti-social Behaviour, Crime and Policing Bill.
Responsible dog ownership
Increasing the maximum penalties for dog attacks is only one aspect of the Government’s overall approach to tackling irresponsible dog ownership. Government consulted on a range of possible measures to encourage responsible dog ownership in 2012 and published a summary of results and the way forward on 6 February 2013.
As a result of that consultation, the Anti-social Behaviour, Crime and Policing Bill—clauses 98 and 99—includes amendments extending the Dangerous Dogs Act 1991 to private property and provisions that extend the offence of allowing a dog to be dangerously out of control to all places, including people’s homes. This will give protection to family members, friends and visitors including postal workers, nurses, utility workers and other professionals who visit homes as part of their job. At the same time, there will be an exemption from prosecution for householders whose dogs attack trespassers in or entering the home. There will also be a specific offence of allowing a dog to attack an assistance dog.
In addition, the Bill includes new measures for local authorities and the police to take action before a dog attack occurs. These measures can require dog owners to take any reasonable steps to address their own or their dog’s behaviour, including, but not limited to: attending dog training classes, requiring the dog to be on a lead in public, repairing fencing to their property to prevent the dog escaping, and even requiring the dog to be neutered. These measures supplement the non-statutory tools such as acceptable behaviour contracts that are already used by many local authorities to address antisocial behaviour including that involving dogs.
A comprehensive practitioner’s manual has been drafted in liaison with the Welsh Government, police and local authorities to ensure that these new measures tackle irresponsible dog ownership without compromising dog welfare.
The UK Government and Welsh Government have both announced measures to require the microchipping of all dogs by April 2016 in England and by March 2015 in Wales. This will allow lost and stray dogs to be reunited quickly with their owners, minimising stress for both dog and owner, and saving considerable time and resource for hard-pressed local authority dog wardens and animal welfare charities. Separate regulations on dog microchipping will be published in 2014.
Way forward
Parliament will consider the Government proposals for increased maximum penalties for dog attacks and, if agreed, they should come into force in 2014 following Royal Assent of the Anti-social Behaviour, Crime and Policing Bill.
Foreign Affairs and General Affairs Councils (21-22 October)
(11 years ago)
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The Minister for Europe (Mr David Lidington)
My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs attended the Foreign Affairs Council (FAC) on 21 October and I attended the General Affairs Council (GAC) on 22 October. The Foreign Affairs Council was chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Baroness Ashton of Upholland, and the General Affairs Council by the Lithuanian Presidency. The meetings were held in Luxembourg.
Commissioners Füle (Enlargement and European Neighbourhood Policy) and Piebalgs (Development) were in attendance for some of the discussions at the FAC.
Commissioner Šefcovic (Inter-Institutional Relations and Administration) was in attendance for some of the discussions at the GAC.
Foreign Affairs Council
A provisional report of the meeting and Conclusions adopted can be found at:
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/139093.pdf
Introduction- Iran
Baroness Ashton updated Ministers on the E3+3/Iran talks in Geneva, and the issuing of the first joint statement. The next meeting would be on 7-8 November in Geneva with experts discussions in advance.
Introduction- Serbia/Kosovo
Baroness Ashton briefed on the 17th round of the Serbia/Kosovo facilitated dialogue, the elections preparations, and noted that the EU's Election Observation Mission had begun its work.
Introduction- Bosnia and Herzegovina
Baroness Ashton highlighted the Conclusions agreed on Bosnia and Herzegovina, which emphasise the importance of implementing the European Court of Human Rights ruling on the Sejdic-Finci constitutional issue, and commit to a broader discussion on Bosnia and Herzegovina at the November Foreign Affairs Council. They also signal the EU's readiness to renew the executive mandate of Operation EUFOR Althea for another year.
Introduction- Maldives
Baroness Ashton expressed her concern that the Presidential election in the Maldives had again not proceeded, and stated that the EU needed to monitor the situation closely.
Eastern Partnership
Baroness Ashton looked forward to a successful Summit at Vilnius in November, noting the backdrop of increased Russian activism. Ministers exchanged views on Ukraine's progress in implementing the conditions for the possible signature of the EU-Ukraine Association Agreement. The Foreign Secretary stated that the EU needed to keep the focus on Ukraine's reform progress, until the Vilnius Summit and beyond. The Foreign Secretary also underlined that closer economic ties between the EU and Eastern Partners would have significant economic benefits for the wider region including Russia.
Southern Neighbourhood
On Egypt, Baroness Ashton briefed Ministers following her most recent visit to Cairo. Ministers expressed strong support for her efforts. The Foreign Secretary argued that the EU should address the issue of political detainees, and supported electoral observation by the EU of the constitutional referendum.
On Syria, Ministers emphasised that progress towards Geneva II and a political solution remained the priority; underlined the importance of the UN Security Council Resolution 2118 (2013) on Syrian chemical weapons; and stressed that the humanitarian situation remained dire. Ministers agreed Conclusions which, in particular, reiterated that the objective of Geneva II would be swift establishment, by mutual consent, of a transitional governing body with full executive powers and control of all governmental and all security institutions, and underlined that there should be no impunity for human rights abuses, including those committed with conventional weapons.
On Libya, Ministers agreed that EU support would be important in helping Libya to address the migratory situation. The Foreign Secretary emphasised the need to focus on practical support following recent tragic events, with the UK offering support to the Libyan security sector. He stated that the EU should focus on ensuring that the EU Border Assistance Mission in Libya delivered training as quickly as possible.
Burma
Before lunch with Aung San Suu Kyi, Baroness Ashton gave an overview of Burma's continuing reform process, highlighting progress made and the remaining challenges. In November she will lead a taskforce to Burma, the first outside Europe's neighbourhood, aimed at bringing EU representatives and businesses to Burma to offer comprehensive EU support for the transition to democracy.
Over lunch, Aung San Suu Kyi highlighted the central importance of amending the Burmese constitution in order to allow for credible presidential elections. The Foreign Secretary underlined his support for constitutional change, and the role the EU could play, including in supporting and monitoring the 2015 elections. He also raised the plight of the Rohingya and other ethnic and religious tensions.
AOB- Central African Republic
The Foreign Minister of France, Laurent Fabius, debriefed on his recent joint visit with Commissioner Georgieva (International Co-operation, Humanitarian Aid and Crisis Response), outlining three central concerns: the security situation; the humanitarian crisis; and the political process. Conclusions were agreed.
Other business
Ministers agreed without discussion a number of other measures:
The Council adopted the EU position for the EU-Serbia Stabilisation and Association Council.
The Council adopted conclusions on Yemen.
The Council adopted conclusions on the special report No 4/2013 of the Court of Auditors concerning EU cooperation with Egypt in the field of governance.
The Council extended the EU restrictive measures against the Republic of Guinea, consisting of restrictions on admission to the EU and asset freezes, until 27 October 2014.
The Council allocated €8.05 million from the EU budget to support the activities of the International Atomic Energy Agency (IAEA) on nuclear security and verification.
The Council adopted conclusions on the new challenges presented by the proliferation of weapons of mass destruction (WMD) and their delivery systems.
The Council adopted the second part (country reports) of the EU annual report on human rights and democracy. The first part (thematic reports) was adopted on 6 June 2013.
General Affairs Council
The 22 October GAC focused on: the preparation for the October European Council, which the Prime Minister attended on 24-25 October; the next stage of the European semester; macro-regional strategies; and enlargement.
A provisional report of the meeting and Conclusions adopted can be found at:
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/genaff/139118.pdf
Preparation of the 24-25 October European Council
The GAC discussed the 24-25 October European Council, both in the plenary session of the General Affairs Council and over lunch with the President of the European Council, Herman van Rompuy. This European Council had an extensive agenda covering: the digital economy, innovation and services; growth, competitiveness and jobs; Economic and Monetary Union; the Eastern Partnership summit; and migration issues, following the tragedy in Lampedusa.
I signalled our strong support for the digital agenda, emphasising the importance of the Digital Single Market in promoting growth but reminding my counterparts of the need to avoid setting unrealistic timelines, including on data protection. I also stressed the need for further progress in the services agenda and reducing regulation.
The Commission had recently produced a welcome report on reducing regulation titled REFIT. This looked at how to improve regulation across the board. The Prime Minister has consistently championed this work and has separately challenged businesses to identify the most burdensome regulations. The Business Taskforce which responded to this challenge, presented its report drawn from the views of over 100 businesses from across Europe. The Taskforce report put forward 30 clear recommendations to remove or improve the EU rules that are the most burdensome to businesses.
European Semester
The Lithuanian Presidency presented their 'synthesis report' on lessons learned in this year's European Semester. The European Semester gives macro-economic and fiscal guidance to Member States, assessing the implementation of the Compact for Growth and Jobs agreed by the June 2012 European Council. The discussion that followed the presentation raised the importance of ensuring that the timing of recommendations is right.
Enlargement (Turkey)
The Council agreed to confirm the EU common position for the opening of chapter 22 dialogue on regional policy and co-ordination of structural instruments with Turkey, and to convene an Accession Conference at Ministerial level on 5 November in Brussels to do so. This will be the first chapter opened with Turkey for three years. There will be a more general debate on enlargement at the GAC on 17 December.
Macro-Regional Strategies
Following a presentation by the Commission, the GAC endorsed conclusions on macro-regional strategies and exchanged views on the added value of the existing strategies. The draft conclusions on macro-regional strategies reiterated that they should require no new money (though structural and cohesion funds already allocated to those regions could be channelled towards projects complementing the macro-regional strategies); no new institutions and no new legislation. The conclusions set out preconditions that would help make any new strategies effective. France also presented its plans for a new macro-regional strategy; the Alpine Region Strategy.
Scotland Analysis: Security
(11 years ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
The UK Government have today published the seventh paper in their Scotland analysis programme, “Scotland analysis: security”. This series of publications is designed to inform the debate on Scotland’s future within the United Kingdom ahead of next year’s referendum.
The “Scotland analysis: security” paper analyses the UK’s approach to security and the potential consequences of Scottish independence. Scotland and its people are an integral part of the UK’s national security, and the UK Government believe both that Scotland is better off as part of the UK, and that the UK is stronger, safer and more secure with Scotland as part of it.
The first duty of any state is the defence of its territory and institutions, and the protection of its citizens and property from both internal and external sources of threat or harm. As a part of the Union, Scotland benefits from the full spectrum of capabilities available to the UK’s security, intelligence and law enforcement agencies.
There is greater security through integrated UK-wide security and intelligence agencies with global reach. The UK’s security and intelligence agencies protect against terrorism and espionage, enable the collection of secret foreign intelligence, and make possible intelligence gathering through the monitoring of communications. An independent Scottish state would lose automatic access to UK intelligence, impacting on its ability to counter espionage and hostile foreign intelligence activity as well as terrorism.
We are better protected through enhanced justice and policing capabilities and international partnerships to tackle serious and organised crime. Long-established UK-wide laws facilitate the cross-border pursuit of justice despite different legal systems and police jurisdictions. This works with the minimum of bureaucracy and more quickly and efficiently than is possible between EU states. Independence would see the existing powers lapse, impacting negatively on an independent Scotland’s ability to pursue justice across borders.
There is greater resilience through UK-wide cyber security, chemical, biological, radiological and nuclear (CBRN) response and border protection arrangements. The UK’s £860 million cyber security programme delivers enhanced cyber security for the benefit of the whole of the UK, which leads other G20 countries in its ability to withstand cyber attacks.
The UK Government also maintain a number of capabilities to deal with CBRN devices as well as explosive materials.
Scotland also benefits from a nationally run scheme to prevent both specified foreign national passengers travelling to the UK and British nationals boarding flights when assessed to pose a threat to that aircraft. An independent Scottish state would be responsible for its own border security.
More broadly, and in support of many of the security capabilities I have outlined here and which are detailed in the paper itself, Scottish security and resilience companies currently stand to benefit from HMG’s efforts to increase global UK security exports. The security and resilience industry in Scotland is estimated to generate over £200 million per annum and employ over 2,000 people. UK Government efforts to promote Scottish security firms overseas would cease in the event of independence; a significant potential loss to this important element of the Scottish economy.
In the event of a vote in favour of leaving the UK, Scotland would become an entirely new state and would have to establish its own security arrangements. The start-up costs and complexity of establishing separate intelligence, border and CBRN capabilities would be very significant. It would cease to enjoy the influence that derives from the UK’s established status as a key player within the international system and the opportunities this offers to advance the security and prosperity objectives of the UK including Scotland.
Future papers from the Scotland analysis programme will be published over the course of 2013 and 2014 to ensure that people in Scotland have access to the facts and information ahead of the referendum.
Victims of Crime
(11 years ago)
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The Minister for Policing, Criminal Justice and Victims (Damian Green)
Today the Government have published a new Code of Practice for Victims of Crime (the Victims' Code).
The Victims' Code applies to all victims of criminal offences under the National Crime Recording Standard (NCRS) and sets out the services to be provided to victims of crime in England and Wales by criminal justice agencies.
The old code, written in 2006 was in need of revision as it was out of date and did not meet victims' needs - that is why the Government committed to review the code in the response to the 'Getting It Right For Victims and Witnesses' consultation in July 2012.
From 29 March to 10 May this year the Government held a public consultation on “Improving the Code of Practice for Victims of Crime”, seeking views on a draft code. The 197 responses received helped to inform the drafting of the new Victims' Code published today.
The new Victims' Code is written in plain English with victims of crime as the target audience. It meets the Government's commitment to deliver an accessible code that works for victims. It is structured around the journey victims of crime face when they come into contact with the criminal justice system and sets out the information, services and support they can expect to receive at every stage of the process. This includes enhanced entitlements for victims who are most in need, namely:
victims of the most serious crime;
persistently targeted victims; and
vulnerable or intimidated victims.
Key improvements to the new Victims' Code include:
Strengthening the voice of the victim by putting the Victim Personal Statement under a statutory code for the first time and giving an entitlement to victims to choose whether they would like to read their statement aloud in court or to have it read aloud on their behalf if the defendant is found guilty.
A separate chapter for businesses and an opportunity for businesses of all sizes to make an impact statement so that their voice is fully heard.
Information on restorative justice for victims of adult offenders for the first time. This includes a duty on criminal justice agencies to meet existing quality standards and put in place robust safeguards to ensure repeat victimisation does not occur.
An improved complaints process so that victims are better able to hold criminal justice agencies to account if things go wrong.
A new dedicated section for victims under 18 and their parents and guardians written in an accessible way.
An automatic referral of all victims to support services has been retained in the final version of the code. This change to the consultation version of the code will ensure consistent and immediate access to support services is provided to all victims.
It is crucial to the success of the new Victims' Code that victims, criminal justice practitioners and victims' organisations are fully aware of the services and support that victims of crime are entitled to receive. The Government are developing a wide-ranging communications package to raise awareness of the code, including leaflets on the code in various formats including EasyRead; a YouTube video and educational materials for use by schools, local government and voluntary organisations. This will help to make sure victims know what they are entitled to and that criminal justice agencies fulfil then obligations under the code.
A Statutory instrument will be laid in November, which will bring the code into force in December.
Copies of the new Victims' Code are available in the Vote Office and the Printed Paper Office. The Government Response to the consultation has been deposited in the libraries of both Houses. More information on the code and relevant consultation documents can be found on the Ministry of Justice website at: https://consult.justice. gov.uk/digital-communications/code-victims-crime.
HS2
(11 years ago)
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The Secretary of State for Transport (Mr Patrick McLoughlin)
The Government have today published “The Strategic Case for HS2”, an updated economic case and other supporting documents, including a technical report into possible alternatives to HS2 by Atkins and Network Rail
I regard the publication of these documents as an important step in my preparations for laying the hybrid Bill before Parliament later this year and I consider this to be an opportune time to explain the benefits of HS2 clearly and comprehensively.
Good quality transport is at the heart of our economic success and the decisions we take now about transport investment will determine our country’s economic future.
The case for the new line rests on the step change in capacity and connectivity it will provide.
The new north-south railway is a long-term solution to a long-term problem. Without HS2, the west coast, east coast and midland main lines are likely to be overwhelmed. With it, we will transform intercity travel. There will also be benefits for regional and commuter services. It will increase the amount of freight that can be carried by rail.
HS2 will provide a very significant increase in capacity on the rail network. It will deliver a 14 trains per hour capability in phase 1, rising to 18 trains an hour in phase 2— transforming intercity rail services.
Significant journey time improvements will be possible, such as reducing the journey time between London and Manchester from two hours eight minutes to one hour eight minutes. HS2 will connect eight of our 10 largest cities and bring two thirds of the population within two hours of London.
And HS2 could provide space for at least an extra 20 west coast main line freight paths, with each extra freight train typically taking 40 lorries off our roads; easing congestion and reducing carbon emissions.
These transport improvements will help support economic growth and make a major contribution towards rebalancing the economy.
Subject to parliamentary approval, the new railway will be built in two phases. It will be fully integrated with the rest of the railway network. It will bring benefits to places with stations on the new railway including Leeds, Manchester, Birmingham and London; to stations on the classic network like Liverpool, Darlington and Newcastle which will receive high-speed services; and to other places on the existing mainlines like Milton Keynes, Rugby and Peterborough, which will have better services from released capacity on the existing main lines.
Analysis by Atkins and Network Rail has considered whether we could meet the capacity challenge in other ways—for example through upgrades to the current railway. But HS2 emerges as the only option that provides not only the capacity and the connectivity this country needs, but is also deliverable, minimises disruption to existing rail services and allows us to leap ahead of demand and reshape the economic geography of the country.
The updated economic case scrutinises again the costs and benefits of HS2. The new analysis shows that the Y network delivers a good return on investment, with a standard cost benefit ratio of 2.3.
HS2 has been allocated a funding envelope of £42.6 billion in the 2015 spending review and will not exceed that allocation. It includes £14.4 billion of contingency, which I am determined to bear down on and I have put in place rigorous controls, including a target price for HS2.
We are continuing to work with the construction and supply industry and with local communities to ensure that this unprecedented investment in a new north-south line will deliver the best possible return to the British economy, and be built at the lowest possible cost and with the lowest possible environmental impact.
I am laying copies of these documents in the Libraries of both Houses.
Highways Agency
(11 years ago)
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The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
Today I am beginning a period of public consultation on the Government's proposals for transforming the Highways Agency into a government-owned company.
At the spending round in June, the Government announced a transformational investment in our strategic road network worth £28bn by 2022 and up to £50bn over the next generation. To ensure efficient and effective delivery of this, the Government also set out plans for reforming the way our strategic roads are managed and run in Action for Roads.
We promised to consult later in 2013 on the details of transforming the Highways Agency into a government-owned company, with a long-term framework for roads investment and creating an independent watchdog to ensure that the interests of road users are represented and the company's performance is subject to effective scrutiny and challenge.
The consultation sets out the Government's detailed proposals for:
Setting up the Highways Agency as a government-owned company, with a licence regime and comprehensive governance framework to ensure the company is properly held to account. This company will remain in public ownership and we will seek to guarantee this through legislation.
The process through which we expect to set the Roads Investment Strategy (RIS), which will contain a clear performance specification, a guaranteed statement of available funding and a defined funding and investment programme. This will make the company more transparent, and let road users and the public hold it to account for what it has promised to deliver. It will also give confidence to suppliers over investment plans and future funding levels, enabling them to plan ahead, drive down costs and recruit and train the workers needed to deliver the increase in road projects over the coming years.
Establishing a road user watchdog and efficiency monitor, using existing organisations such as Passenger Focus and the Office of Rail Regulation to make use of existing experience and avoid creating unnecessary new bodies. Together, these functions will ensure that the interests of road users are well-represented and given a strong voice in influencing what the company delivers, and that the company's performance is subject to effective independent scrutiny and challenge.
Transferring the necessary powers and duties to the company in order for it to effectively operate, manage and improve the strategic road network with day-to-day operational freedom and flexibility, by designating the company as the statutory "highways authority" and adjusting other legislation where necessary. This includes ensuring that the company will continue to work in partnership with local authorities, emergency services and others bodies, and safeguarding current protections regarding environmental and safety standards.
The consultation also explains how the terms and conditions of staff will be protected during the transfer. Separately to this, the Highways Agency will continue to work with representatives to keep staff fully informed.
The outcome of this consultation will inform the final model of the new company, and shape the legislation needed to empower the new company, which we plan to introduce in 2014.
The Government believe that the proposals set out in this consultation provide the freedom and flexibility for the roads operator to deliver efficiently and effectively without day-to-day interference from central Government. At the same time, they put in place sufficient accountability and safeguards to ensure that the roads are run responsibly and in the public interest. It is expected that these reforms will enable cost savings for the taxpayer of at least £2.6 billion over 10 years.
A copy of the consultation document will be placed in the Libraries of both Houses. The document is available at:
https://www.gov.uk/government/consultations/transforming-the-highways-agency-into-a-government-owned-company
Related to this consultation, I am today also publishing an impact assessment containing analysis of the impacts of these proposed changes.