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Oral Answers to Questions
(11 years ago)
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Ann McKechin (Glasgow North) (Lab)
1. What assessment he has made of the level of recruitment to the reserve forces in 2013 to date.
Ian Lavery (Wansbeck) (Lab)
13. What assessment he has made of the level of recruitment to the reserve forces in 2013 to date.
The Secretary of State for Defence (Mr Philip Hammond)
May I first welcome the hon. Member for Gedling (Vernon Coaker) to his new role and congratulate him on his appointment? I hope that, in the interests of Britain’s armed forces, we will be able to have a constructive relationship, as he quite properly holds me to account for the decisions of this Government, and I hold him to account for the decisions of the last one.
When the previous Administration took office in 1997, the Territorial Army was more than 50,000 strong. By the time they left office in 2010, that figure had halved. That pattern of decline has been arrested, and the strength has now been stabilised. Recruitment figures for the first three quarters of 2013 are due to be published by Defence Analytical Services and Advice on 14 November. This is a new data series, and quarterly figures will be published thereafter.
Ann McKechin
I declare an interest as a member of the Strathclyde area committee of the Lowland Reserve Forces and Cadets Association.
Most people would describe the current recruitment target as challenging and difficult to meet. There appears to be a lack of clear strategy on recruiting more women and more people from the black and minority ethnic population in order to achieve that target. Will the Secretary of State explain how he intends to disseminate best practice in those areas?
Mr Hammond
I am grateful to the hon. Lady for raising that important point. At the moment, the armed forces recruit about 8% of their strength from women, who make up about 50% of the target age group population, and just 3% of their strength from black and ethnic minority communities, which will make up about 24% of the target age group population by 2020. We have to do better in those areas, and one of the challenges that we have set for the armed forces, and for the Army in particular, is for them to work out how they can pitch an offer that is more attractive to female and black and ethnic minority recruits, and specifically how they can use female recruits more effectively within Future Force 2020.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
20. I recently joined more than 100 supporters of 2nd Battalion the Royal Regiment of Fusiliers as they marched on Parliament protesting against the Government’s decision to scrap it. Ministers believe that the battalion can be replaced by reservists, but the chairman of the Northumberland and North East Fusilier Association is concerned that it will be impossible to recruit the necessary numbers. Will the Secretary of State tell us to what extent the targets are being met?
Mr Hammond
The reconfiguration of the Army, including the changing role of reservists and the changing structure of the Army, are not simply about trying to recruit reservists to replace disbanded infantry battalions. Most of the reservists we recruit will be specialists, rather than having a light infantry role. The White Paper that I published earlier this year set out a plan to reverse the long-term decline of the Army Reserve, redefining its role and setting out details of improved equipment, training, terms and conditions. Under the plan, we will grow the Army Reserve to a trained strength of 30,000 by 2018. I can also tell the House that, although it is still early days, a snapshot of data for the recruiting campaign that started on 16 September is quite positive. We received 1,576 applications to join the Army Reserve during the first four weeks of the campaign, and 380 were received last week. It is very early days, but those early signs are quite promising.
Mr James Gray (North Wiltshire) (Con)
I congratulate the Secretary of State on the encouraging early signs in the recruiting campaign. There will come a time when it will become plain either that he will have achieved the Future Force 2020 ambition of replacing regular soldiers with reservists or that he has not done so and will have to change his plan. When will that date be?
Mr Hammond
The Army is in the final stages of setting out a properly thought-through recruiting target set, defining the number of recruits needed during each period of time in order to deliver the trained output required if we are to achieve our 2018 target. As soon as I have those data from the Army in final form, I will publish them. They will set our target curve, and I expect to be held to account if we go significantly off it.
Sir Menzies Campbell (North East Fife) (LD)
I hope that my right hon. and learned Friend will forgive me if I press him a little further on this topic. There is a lot of anecdotal evidence that the targets are proving difficult to achieve. Given that the target of 30,000 is fundamental to the success of the restructuring of the Army, what contingency plans are now in place, and what incentives are being offered to individuals—and their employers—to become part of the Army Reserve?
Mr Hammond
I am grateful to my right hon. and learned Friend. Unfortunately, I am not his “learned Friend”: I am used to being called an accountant, but not a lawyer. I can reassure him that a variety of measures are in place to incentivise recruitment to the reserves; in particular, a bonus to attract those leaving the regular Army into volunteer reserve service has proved very successful, with significant upturn in the translation rate over the past few months. There will be a range of further incentive measures that we can introduce as and when it is necessary in order to deliver the targets which I shall publish shortly.
Vernon Coaker (Gedling) (Lab)
I thank the Secretary of State for his kind remarks, which I greatly appreciate. We will, of course, work with him where appropriate. I welcome to her post my Nottinghamshire colleague, the Under-Secretary of State for Defence, the hon. Member for Broxtowe (Anna Soubry), who I understand is the first woman Defence Minister in the House of Commons, which is a great credit to her.
The Government need to explain to the House and the country today what is happening with their programme of reform to the armed forces. I declare an interest, as my soon-to-be son-in-law serves in the Territorial Army. A recent high-level memo from the Ministry of Defence states clearly that there are clear problems and worries over Army reform and that recruitment targets are likely to be missed. That has caused senior military figures, Members of the House and the armed forces community to raise serious concerns. Can the Secretary of State assure us that the nation’s security will not be compromised and that a reduction in the regular Army will take place only if adequate uplift in the reserves is achieved?
Mr Hammond
I am grateful for the hon. Gentleman’s question. The memo from which he quoted did not say what he claimed it said. It said that in the absence of any action to stimulate recruitment we would face a very difficult challenge. We are now taking precisely that action. The hon. Gentleman may have seen an article that came from an interview with the Chief of the Defence Staff, in which he made it clear that he was very confident that we will deliver these numbers. I share that confidence.
Vernon Coaker
We look forward to the Defence Secretary publishing that memo so that we can all see what it actually said. Is not the problem one of credibility? The Government cannot get their figures right. Just today, we learned that the cost of new aircraft carriers has increased by £800 million to £6.2 billion. That is after the £100 million wasted last year on reversing the decision on fighter jets. A few months ago, the Defence Secretary told us he had balanced the books at the MOD, and then just a few weeks ago we were told that there was an £1.8 billion underspend. How can the British public have confidence that the Government will meet their target for recruitment to the reserves when they have got so much else wrong? When will the Defence Secretary take some responsibility and stop blaming everyone else but himself?
Mr Hammond
With that last remark, the hon. Gentleman has probably pre-empted my response. If I were him, I would tread a little more carefully around the issue of the cost of the aircraft carriers—until he hears, in due course, what precisely we have done. A huge amount of work is going on across the Army around the reserves recruitment initiative. There are many different strands to this work. I have made a commitment in the past, which I will repeat today, to be as transparent as possible with Parliament as this campaign gets under way. I remind the hon. Gentleman, however, that we are just five weeks into a five-year campaign to halt and reverse the attrition in our reserves that the previous Government oversaw.
Patrick Mercer (Newark) (Ind)
In my experience, inquiries about recruiting by no means turn into enlistments. Everything we have heard suggests that the recruiting for the reserves will be difficult. Was it therefore correct for our regular forces redundancy programme to have gone ahead with the urgency that it did?
Mr Hammond
Perhaps my hon. Friend did not hear me earlier. I was not talking about inquiries; I was talking about 1,576 applications to join the Army Reserve in the first four weeks of the campaign. The simple fact is that if we are to live within our budgets and restructure the Army for its tasks in the future, the decisions we made about the size and shape of the regular Army must go forward, and the recruitment and training of 30,000 Army reserves must happen. We will make sure that they do so.
Mr Speaker
Progress on the first question was desperately slow; we really need to pick up.
Huw Irranca-Davies (Ogmore) (Lab)
2. What assessment he has made of the level of contracting by his Department with small and medium-sized enterprises; and if he will make a statement.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
As I have said in the House before, the Government understand the significance of SMEs to the United Kingdom’s economy. The Ministry of Defence is playing its part in increasing the number of opportunities for SMEs to contribute to defence, both as direct suppliers and as subcontractors on major programmes. We recently published details of the MOD spend for 2012-13. Some £1.1 billion was spent directly with 12,000 SMEs. During that year, 10% of all new contracts by value and 36% by number were placed with more than 1,000 SMEs.
Huw Irranca-Davies
Jobs in the supply chain are vital to constituencies such as Ogmore, but I understand that last year the MOD was fined £21,000 for making late payments to suppliers. The new contracts and direct payments that were promised by Ministers have not materialised. Can the Minister explain to SMEs in the supply chain in Ogmore and throughout the United Kingdom why the Government’s actions do not match their rhetoric?
Mr Dunne
I am very glad that the hon. Gentleman has chosen to light on the single late payment penalty that the MOD suffered in just one of the 4 million transactions that took place in 2012-13. It involved a company that was not based in Ogmore, not based in Wales, and not based anywhere else in the United Kingdom. It was for late payment for aviation fuel sent by a supplier to our base in Akrotiri in Cyprus, with an invoice from a Greek company in Corinth, over the Christmas holidays. The Ministry of Defence pays 92% of its bills within five days, and has a better record in that regard than any other Department.
Jeremy Lefroy (Stafford) (Con)
I greatly welcome the letting of the main contract for the expansion of MOD Stafford to enable it to receive two more Signals regiments. Will the main contractor be encouraged to work with local SMEs which offer value for taxpayers’ money?
Mr Dunne
I think that my hon. Friend is referring to facilities management contracts which are being placed on a regional basis. The contractors will of course undertake to use SMEs in their supply chain, but it will be up to them to decide where they place their contracts, so I cannot give my hon. Friend any specific reassurance relating to how many of the subcontracts will go to Staffordshire companies.
Alison Seabeck (Plymouth, Moor View) (Lab)
Although reassuring in many respects and full of detail, the Minister’s response will not give much comfort to SMEs that hold subcontracts with Serco and are awaiting the outcome of the Cabinet Office review, which I assume has been further delayed following this afternoon’s announcement by the Serious Fraud Office. This matter is of serious concern to, for instance, those involved in the consortiums that are bidding for the GoCo. When does the Minister expect a firm decision from his colleagues on whether the MOD can let further contracts to Serco?
Mr Dunne
As the hon. Lady said, there has been an announcement following the Serious Fraud Office inquiry into two contractors, which was first highlighted by the Ministry of Justice in its announcement of 26 September. I cannot give her any information about when the SFO will complete its inquiries, and she would not expect me to do so. Until that has happened, we shall not be in a position to make any comment on Serco itself.
Sheryll Murray (South East Cornwall) (Con)
A constituent of mine is considering installing on his farm an anaerobic digestion plant that could supply heat to HMS Raleigh. Will my hon. Friend agree to meet my constituent and me to discuss that?
Mr Dunne
I am grateful to the hon. Lady for mentioning her interest in encouraging the supply of renewable energy to Ministry of Defence bases throughout the country as well as in her constituency. The matter that she has raised is the responsibility of the Under-Secretary of State for Defence, my hon. Friend the Member for South West Wiltshire (Dr Murrison), but I am sure that one of us will be happy to meet her as soon as possible.
Mark Menzies (Fylde) (Con)
3. What discussions he has had with his counterparts in partner nations on improving the prospects of future Typhoon exports.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
Since the Government took office in 2010, they have reversed a decade of neglect in support for defence exports. Ministers from the Prime Minister down have taken a particularly proactive lead among our partners in encouraging Typhoon exports. Eurofighter Typhoon continues to attract global interest through active participation in a number of campaigns, which are likely to come to a head over the next couple of years. Last week, when I met counterparts from our three partner nations, we agreed to refocus our collaborative programme to improve Typhoon’s export prospects in those campaigns around the world.
Mark Menzies
Does the Minister believe that to keep the Typhoon production line running in the future, the Eurofighter consortium must be much more agile in its corporate governance in order to help export potential?
Mr Dunne
In our meeting last week I made very clear to both industry and our Eurofighter partners that we need an increased focus on responding to export requirements, which will play an increasingly important part in extending production lines for this aircraft, including in my hon. Friend’s constituency. We agreed that fundamental reforms are needed to speed up decision-making processes within the governance structure, which will make it more responsive both to the requirements of partner nations and to export customers.
Mr David Heath (Somerton and Frome) (LD)
4. What his plans are for the future use of RNAS Yeovilton and RNAS Merryfield; and if he will make a statement.
The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
I am pleased that my hon. Friend has asked about Yeovilton, where a number of our constituents work and where I have served. I am also pleased to assure him of our intention that Yeovilton will remain a royal naval air station with, additionally, 1 Regiment Army Air Corps based there as a lodger unit. Indeed, the Ministry of Defence is investing heavily in Yeovilton in order for it to be the main operating base for all Wildcat helicopters flown by the Royal Navy and the Army. Merryfield, as my hon. Friend will know, is a satellite airfield of Yeovilton and will continue to be used for training.
Mr Heath
I am most grateful; the deployment of the Army Air Corps at Yeovilton is very good news for both Yeovilton and the surrounding area, even if we will have to get used to different coloured uniforms around the place. Given that the AAC uses Salisbury plain predominantly for training purposes, will the role of Merryfield be changed in future and will the Minister let me know if that is to be the case?
Dr Murrison
The answer to the last question is yes, of course I will let my hon. Friend know, but Merryfield will continue as a satellite to Yeovilton. He is right to say that the colour, as it were, of many of those working in Yeovilton will change—it will become more khaki—and that means Salisbury plain training areas will be used rather more. I reassure my hon. Friend that that probably means that his constituents are unlikely to be disturbed by too much low flying, which I know is a concern from time to time to a number of us who have military aviation operating in our areas.
Steve Baker (Wycombe) (Con)
5. What recent assessment he has made of the future Royal Air Force requirement for intelligence, surveillance, target acquisition and reconnaissance systems; and if he will make a statement.
The Minister for the Armed Forces (Mr Mark Francois)
Joint Forces Command is leading an air intelligence, surveillance, target acquisition and reconnaissance—ISTAR—optimisation study looking at all Defence requirements, not just the RAF’s, and capabilities in air-based ISTAR.
Steve Baker
A system such as Sentinel R1 is surely absolutely crucial to the proportionate and precise use of armed force in the future, so can the Minister reassure me that he is working to ensure that the armed forces rise above their usual rivalry to enable these systems both to be taken forward and developed deeply in the interests of our country and our forces?
Mr Francois
I have heard it suggested that occasionally down through the centuries there has been a tad of friendly rivalry among the different armed services, and as my hon. Friend is a former RAF officer, he may well be aware of that. We are well aware of the capabilities that are provided by the Sentinel platform. We value those capabilities and we are examining how we might be able to use them further in the future.
Jim Dobbin (Heywood and Middleton) (Lab/Co-op)
How were the important RAF intelligence and surveillance services operating from RAF Gibraltar affected by the serious incident when a Guardia Civil vessel connected with an escorted royal naval vessel during which the vessels’ guns were pointed at each other?
Mr Francois
Last week’s actions by the Guardia Civil were completely unacceptable. They were both unlawful and irresponsible, placing themselves and others in unnecessary danger. I can tell the House that we have made a formal protest to the Spanish Government, and ministerial colleagues in the Foreign Office will be raising this matter with their Spanish counterparts at the first opportunity.
Mr James Arbuthnot (North East Hampshire) (Con)
Given that we are a maritime nation, does my right hon. Friend agree that in the next defence and security review a maritime patrol aircraft should receive high priority?
Mr Francois
That will, indeed, be one of the issues we look at in some detail in the context of the next SDSR. As my right hon. Friend is the Chairman of the Select Committee on Defence, he will be well aware that there were serious problems with the previous programme, because it was way over budget and, unfortunately, technically did not ultimately work. Perhaps I may remind the House who was in government for most of the time that that programme was running; it was not us.
Angus Robertson (Moray) (SNP)
To reinforce the point made by the Chairman of the Defence Committee, the UK’s armed forces are unique among those in northern Europe in having not a single fixed-wing maritime patrol aircraft. Given the time scale that the Minister has talked about for this review, what is the earliest date by which the UK may have maritime patrol aircraft?
Mr Francois
As I have explained to the House, we will be looking at this in the context of the next strategic defence and security review. The hon. Gentleman asks me for early dates, so perhaps he can share with the House the earliest date by which the Scottish nationalists will tell us how they will afford the defence programme that they envisage. We are all dead keen to know.
Sir Gerald Howarth (Aldershot) (Con)
May I support what was said by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Chairman of the Defence Committee, as the loss of the maritime patrol aircraft capability is the most serious loss we face at the moment? May I urge the Minister not just to push this out to the SDSR of 2015 but to reassure the House that work is being undertaken by the Ministry of Defence today to find ways to remedy that serious capability loss?
Mr Francois
As my hon. Friend—again, a former RAF officer—will be aware, we already work with allies in a number of ways to fill that gap, but I assure him that we will look at the issue seriously in the wider context of ISTAR and of the SDSR.
Duncan Hames (Chippenham) (LD)
6. What steps he is taking to improve the employment prospects of service leavers.
The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
We attach great importance to assisting service leavers in making a successful transition from service life into civilian employment. A recent defence statistics study shows that about 85% of the service leavers in 2011-12 who have a known employment outcome are employed within six months of leaving the armed forces. But we are not complacent, and we continue to review whether there are areas we should improve. Indeed, Lord Ashcroft, the Prime Minister’s special representative on veterans’ transition, is leading a review of the provisions that are in place.
Duncan Hames
I am very glad to hear that. Service leavers undoubtedly have much to offer employers. Wiltshire has more than 15,000 military personnel and the number is rising. Will the Minister look favourably on Swindon and Wiltshire local enterprise partnership’s city deal bid, which will help service leavers to gain the qualifications they need and ensure that they are not disadvantaged compared with the civilian population in seeking work?
Anna Soubry
Absolutely, and I am more than happy to congratulate my hon. Friend and all others who champion such schemes. This is another reason why we attach so much importance to the corporate covenant, of which I wish to give one quick example. National Express has signed up to the corporate covenant—we urge many other companies, of whatever size, to do so —and will guarantee anyone leaving our armed forces an automatic interview for any job vacancy. That is a good example of why the corporate covenant is to be welcomed.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister knows that these servicemen and women make very good teachers and very good professionals in almost any sector. What has happened to the scheme to get them into the classroom, and could we use them more in leading apprenticeship programmes?
Anna Soubry
I do not know of any problems in that regard. I am more than happy to make further inquiry and update the hon. Gentleman by way of a letter, but my understanding is that this goes from strength to strength.
Caroline Nokes (Romsey and Southampton North) (Con)
8. What funding his Department makes available to help armed forces families to get on the housing ladder.
Glyn Davies (Montgomeryshire) (Con)
9. What steps he is taking to help improve home ownership among members of the armed forces.
The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
The Secretary of State for Defence recently announced that £200 million has been allocated for the creation of the forces Help to Buy scheme. Launching on 1 April 2014, it will significantly improve the support available to members of the armed forces who wish to buy their own home. Forces Help to Buy will offer the men and women of our armed forces a deposit loan of 50% of their annual salary, up to a maximum of £25,000. The loans will be interest-free and repaid over an affordable 10-year period. As well as that additional funding, there will be tailored advice on financial and housing matters. Of course, service personnel are also afforded high priority and additional flexibility under the Chancellor’s main Help to Buy equity share scheme.
Caroline Nokes
I thank my hon. Friend for that response. What reassurance can she give my armed forces constituents, particularly those in the Army Air Corps at Middle Wallop, that they will be able to combine this new scheme with the schemes already put forward by the Department for Communities and Local Government, in an example of joined-up government?
Anna Soubry
There should not be any difficult in doing that at all. I should add that I am always more than willing to come to see some of the excellent accommodation that I know exists already at Middle Wallop, and I look forward to doing so.
Glyn Davies
Armed forces personnel inevitably experience more difficulty accessing home ownership because they often have to move to different parts of the country because of different postings. Has my hon. Friend considered reducing the frequency of such movements to enable greater take-up of home ownership among the armed forces?
Anna Soubry
I absolutely agree with my hon. Friend. That is why the new employment model that we are developing will deliver an offer to regular service personnel that supports domestic stability by reducing the frequency of moves and supports partners’ employment. We know that issues such as those two points often concern members of our armed forces and lead to a lot of dissatisfaction.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Often the problem is the availability of housing. Will the Minister update the House on what discussions have been had with local authorities in general and Birmingham city council in particular about the provision of extra housing?
Anna Soubry
I am not aware of any discussions. I do know, however, the great benefits that the community covenant has brought in and I have no doubt that Birmingham is fully signed up to it. If I need to, I am more than happy to make further inquiries and write to the hon. Lady.
Gemma Doyle (West Dunbartonshire) (Lab/Co-op)
I welcome the hon. Lady to her new role and thank her for her answer to my written question about low morale in the armed forces, in which she admitted that it has doubled over the past three years from 15% to 30%. She will be aware that the quality of and access to housing, along with pay and allowances, are key factors in forces’ morale and that of their families. Will she guarantee that it will not plummet further on her watch?
Anna Soubry
I wish I could guarantee that it will not plummet any further, but I strongly suspect that this has been a long-standing problem. I am pleased to say that the Government take it seriously, which is why we are doing the many things that we are doing precisely to address those issues.
Nigel Adams (Selby and Ainsty) (Con)
18. What estimate has the Minister made of the number of service personnel who could benefit from the new forces Help to Buy scheme?
Anna Soubry
I cannot give my hon. Friend a figure, but as the scheme is worth £200 million we can be confident that it will be many thousands.
Sir Tony Baldry (Banbury) (Con)
19. My hon. Friend the Minister has ably answered the question I was going to ask, Mr Speaker.
Mr Speaker
That is a remarkable self-denying ordinance. If the Minister wants to say something, we must not deny her the opportunity in her maiden performance in this portfolio.
Mr Jim Cunningham (Coventry South) (Lab)
10. What recent assessment the Government have made of how many reservists need to be recruited as part of the Army Reserve plan to replace regular troops from the disbanded units.
The Secretary of State for Defence (Mr Philip Hammond)
I should make it clear to the hon. Gentleman, as I have already this afternoon, that we are not recruiting reservists simply to replace regular troops from disbanded units. We are changing the structure and functions within the Army, creating a whole force of regulars, reservists, civilians and contractors that will make the best use of our resources and harness the talents across the whole of UK society. As I have already said, the Army is finalising a set of recruiting targets that will at different points over the next four years deliver the numbers into training that we need to achieve the challenging goal of 30,000 trained reservists by 2018.
Mr Cunningham
Given that the Secretary of State is constantly moving the goalposts and that we know that he will not recruit the number of reservists that he needs, why does he not reinstate the two battalions of the Royal Fusiliers? That will give him the manpower he needs, so why does he not retrain those people?
Mr Hammond
I do not know where the hon. Gentleman gets his information from, but as I said earlier we are five weeks into a five-year recruiting campaign, and I do not see anything about his track record that would lead me to give any particular credence to his prediction about how successful that campaign will be.
Mr Julian Brazier (Canterbury) (Con)
In supporting my right hon. Friend’s robust stance, may I urge him to look into the truly staggering level of delays and mistakes in the Army enlistment process? Will he urge the Army recruiting group to prove it is serious by at least getting Army recruiting offices open on evenings or at weekends?
Mr Hammond
I am grateful to my hon. Friend for that question and freely acknowledge that there have been teething problems with the IT support systems for the recruiting campaigns for the Regular Army and Army Reserve. I was in the Army recruiting centre myself last week with the Chief of the General Staff. This matter has the highest level of attention, both ministerial and military, and a number of initiatives will be implemented over the next few days and weeks that I expect to deliver a significant improvement in the areas that my hon. Friend highlights.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I suspect that we will experience regional variations in recruitment, with it being more difficult in some localities than in others. In answer to Question 1, the Secretary of State mentioned that he will produce certain data. Among those data, will there also be an indication of where there are difficulties and what extra efforts are being made at those locations?
Mr Hammond
The targets that we will publish will be national, but the hon. Gentleman is right that there will be different recruiting challenges in different parts of the country. The job for us is to ensure that the Army recruiting centre, the senior officers responsible for it and their recruitment partners, Capita, are agile enough to respond to the data coming in from the front line in the recruitment campaign and flex that campaign accordingly. The plan will not be implemented without change over five years; it will be highly responsive and we will monitor it regularly.
Sir Edward Leigh (Gainsborough) (Con)
As the Secretary of State has confirmed again today that failure to achieve the reservist recruitment numbers is not an option, surely there is now no difficulty in his repeating the pledge given by his predecessor that the Regular Army will not be cut until those reservists are recruited.
Mr Hammond
Any such pledge would be an unfunded spending commitment. We must live within the envelope of resources that we have available, and we have to restructure the armed forces to deliver the configuration we need for Future Force 2020. That means drawing down some regular units and providing support from reserve units, civilians and contractors for some tasks that were previously done within the Regular Army.
Julian Smith (Skipton and Ripon) (Con)
11. With reference to the Army basing review, what recent discussions he has had on the closure of Claro barracks in Ripon; and if he will make a statement.
The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
I am grateful to my hon. Friend for his question. He will be acutely aware of the close links between Ripon and the Army, particularly the Royal Engineers. A meeting was held on 4 October 2013 with officials from Harrogate borough council and Ripon city council to discuss the implications of the Army basing plan and the relocation of 21 Engineer Regiment, Royal Engineers. The Department will continue to maintain contact with stakeholders as plans mature. I understand that the next meeting will have taken place by the end of November.
Julian Smith
I thank the Minister for that answer. Ripon is coming to terms with the loss of the base, but we are still waiting for the Ministry of Defence’s decision on whether it ultimately wants to get out of Deverell barracks or Claro barracks. May I urge him to push forward that decision now, so that plans can be made for the future and Ripon is best placed to deal with a difficult time?
Dr Murrison
I fully understand my hon. Friend’s concerns. The announcement that has been made relates to the removal from Ripon of 21 Engineer Regiment, Royal Engineers, as we consolidate around Catterick. The separate but adjacent site, Deverell barracks, and the associated training area have not been subject to that announcement. A decision on them will be made separately, but I understand that the two sites are very much linked.
Nick Smith (Blaenau Gwent) (Lab)
12. What account his Department takes of the social and economic effects of its procurement decisions in the UK.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
Last year, we published the White Paper, “National Security Through Technology”, setting out the purpose of defence procurement—namely, to provide our armed forces with the best capabilities we can afford while obtaining the best possible value for money. The Ministry of Defence makes a significant contribution to the UK economy—approximately £20 billion of annual spend sustaining many highly skilled jobs in communities the length and breadth of Britain—but we also support the defence industry in the UK through active help in export campaigns and in supporting the defence growth partnership, where we share its vision to secure a thriving UK defence sector.
Nick Smith
It is good that the NATO summit will be held in Newport in Wales next year. Will the Minister please update me on the procurement of the Scout vehicle, which is important for jobs in the south Wales valleys?
Mr Dunne
I add my support to the hon. Gentleman’s efforts to ensure that the NATO summit in Newport is a great success next year. The Scout vehicle is proceeding in its demonstration phase and has passed a number of milestones. As he is aware, it is due to be delivered as part of Future Force 2020. I will not be able to give him an update on the next placing of contracts until such time as the main investment case has been made.
Peter Luff (Mid Worcestershire) (Con)
It will not surprise the Minister to learn that I entirely agree with his answer, but may I ask him, on the day when Professor John Perkins’ review of engineering skills has revealed a serious shortage of those skills in this country, what assessment he has made of the impact of that shortage on the defence industries in particular, and on the nation’s operational advantage and freedom of action?
Mr Dunne
I thank my hon. Friend for all his work in stimulating interest among our young people in taking up engineering careers, particularly so that they can take up the many hundreds of engineering jobs for which the Ministry of Defence and the armed forces seek to recruit every year. We are doing a lot of work, not least through the Bloodhound initiative—a project with which he was intimately involved—to raise awareness of engineering skills in the armed forces, and to encourage young people to consider maths, science and engineering as future careers.
Joan Walley (Stoke-on-Trent North) (Lab)
14. What contracts for recruitment of armed forces personnel have been outsourced to date; and what arrangements are in place to monitor such contracts.
The Secretary of State for Defence (Mr Philip Hammond)
The Ministry of Defence has not outsourced the recruitment of armed forces personnel, but the Army has entered into a recruiting partnership with Capita, and once the contract is fully operational, payment will be linked to the number of recruits required by the Army. I have already acknowledged that there have been teething problems with the IT support for the contract, but the issue has the attention of those at the highest levels in the Army and in the ministerial team.
Joan Walley
We have heard a lot this afternoon about recruitment and how critical it is to the White Paper, and how difficult it will be to meet the target that has been set. Given the real difficulties with recruitment on the ground—I am referring to unanswered e-mails, lack of communication between departments and lost forms—will the Secretary of State hold an urgent investigation into the way that Capita plays its part in the joint venture, with particular reference to candidate support managers?
Mr Hammond
Yes; we are already doing this. The initiatives that I mentioned to my hon. Friend the Member for Canterbury (Mr Brazier) are designed to deal with specific problems with the way in which the website interacts with mobile devices, and the way that we deal with medical records and with inducting candidates through the interview process. We will reintroduce, on a pilot basis, the idea of a face-to-face weekend process that deals with all the procedures in one hit. If that is successful, we will make it the default option for 2014.
Andrew Bridgen (North West Leicestershire) (Con)
What discussions has my right hon. Friend had with large public and private sector employers to see how they can better support our reservists to improve the recruitment and, equally importantly, retention of our volunteers?
Mr Hammond
That is absolutely the key to the programme. In the public sector, central Government have made a generous offer of an additional 10 days’ paid leave to reservists in the central Government service, so that they can take those days for training. Many major private companies have already signed up to the corporate covenant, and more are considering doing so. There are excellent examples of companies working with us to reach out to their employees, and to make a joint proposition to them, so that employees join the reserves in a way that is supported by their employer, not done behind the employer’s back.
Justin Tomlinson (North Swindon) (Con)
15. What new capabilities the armed forces are investing in to ensure the UK can properly defend itself from cyber-attacks.
The Minister for the Armed Forces (Mr Mark Francois)
In September, my right hon. Friend the Defence Secretary announced the creation of the joint forces cyber group and plans to develop a cyber counter-attack capability. That and other Ministry of Defence measures are part of the £650 million cross-Government investment in cyber that was announced in the strategic defence and security review in 2010.
Justin Tomlinson
Does the Minister agree that in addition to strengthening our cyber-defences, we need to deter attacks? What plans does he have to improve UK deterrence in the cyber-domain?
Mr Francois
In addition to the more than £600 million to which I referred, a £210 million investment to further bolster our cyber-defences was announced by the Chancellor in a statement to Parliament on 26 June this year. That is a clear indication that cyber will play a role in a national deterrent posture. It is critically important to the country, and that is why we are investing in it.
Yvonne Fovargue (Makerfield) (Lab)
It is reported that convicted hackers could be recruited to Britain’s cyber-defence force. What assurances can the Minister give that robust and sufficient measures will be in place to ensure that national security will not be compromised as a result?
Mr Francois
I can tell the hon. Lady, and indeed the House, that cyber-reserves will be subject to the same stringent vetting process as other members of the Ministry of Defence. Regarding criminal convictions, all applicants seeking to join the regulars or reserves are looked at individually, and a decision is made based on the type of conviction and sentence imposed. No one will be employed as a cyber-reserve if there is evidence that they represent a security risk which means that they cannot pass the vetting process.
Dr Julian Lewis (New Forest East) (Con)
17. What assessment he has made of the conclusions and utility of the Trident alternatives study.
The Secretary of State for Defence (Mr Philip Hammond)
I can tell my hon. Friend that the review demonstrated that no alternative system is as capable as a Trident-based deterrent, or as cost-effective. As to the utility, carrying out the review fulfilled a Government commitment but did not produce any unexpected conclusions.
Dr Lewis
Yes, well, it is good to know that the review came to such a predictable and predicted conclusion, but what does my right hon. Friend think of the fact that our coalition partners, the Liberal Democrats, have not adopted any of the options from the review but have decided instead to come off continuous at-sea deterrence and have only two Trident submarines? This was rejected as unworthy of consideration by the review, but now that even the Liberal Democrats want two submarines, should we take up the suggestion of the shadow armed forces Minister, the hon. Member for North Durham (Mr Jones), and try to sign a contract for them?
Mr Hammond
As my hon. Friend suggests, the reason a two-boat solution was not considered in the review is that it did not meet the hurdle test of providing a credible deterrent. I am actually rather more interested in the views of official Opposition Front Benchers on this matter than the views of our coalition partners. I welcome the fact—[Interruption.] Hang on a minute. I welcome the fact that the first visit in office by the hon. Member for Gedling (Vernon Coaker) was to Barrow-in-Furness, the home of Britain’s submarine fleet.
Mr Kevan Jones (North Durham) (Lab)
On the alternatives review, at Defence questions on 2 September the Secretary of State told my right hon. Friend the Member for Delyn (Mr Hanson), who had asked about costs:
“If he submits a written question to me, I will ask the Department to produce the best estimate”.—[Official Report, 2 September 2013; Vol. 567, c. 5.]
I have now tabled a number of parliamentary questions, but the Government seem to be refusing to produce a figure. May I gently ask the Secretary of State when he will produce the answer to my questions?
Mr Hammond
I am rather glad that the hon. Gentleman asked me that question. Let me tell him that the Cabinet Office has the lead on this matter because it was a Cabinet Office review. Any question that is phrased in general terms will be answered by the Cabinet Office; were a question to be phrased in very specific terms as to Ministry of Defence resources, then it would fall to me to answer it.
Mr David Heath (Somerton and Frome) (LD)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Defence (Mr Philip Hammond)
My first priority remains the success of operations in Afghanistan. Beyond that, my priorities are to deliver the sustainable transformation of the Ministry of Defence, to build confidence within the armed forces in the Future Force 2020 model, to reinforce the armed forces covenant, to maintain budgets in balance, and to deliver equipment programmes on time so that our armed forces can be confident of being properly equipped and trained.
Mr Heath
As we move towards a weekend when we honour the fallen, and also, I hope, bear in mind those who currently serve and veterans of our armed services, does the Secretary of State wish to congratulate the 80% of councils that have now signed up to the community covenant? Will he also follow up the one in five local authorities that have not done so? Surely that is the least they owe to those who serve in our armed forces.
Mr Hammond
I am grateful to my hon. Friend. The Under-Secretary of State, my hon. Friend the Member for Broxtowe (Anna Soubry), reminds me that 372 local authorities have signed up, and that is well over 80%. We anticipate that there will be a surge of further authorities signing in the run-up to the act of remembrance on 11 November. However, once that milestone is out of the way, I will be more than happy to answer a question listing the authorities that have not signed up, should any Member feel minded to ask me such a question.
Jeremy Corbyn (Islington North) (Lab)
T2. Will the Secretary of State tell the House how much money has so far been spent on preparations for the replacement of the Trident submarine system and, of course, the missile warheads that go with it, and what representations he has received within the higher echelons of the military not to go ahead with the replacement of Trident but to spend the money on something else?
Mr Hammond
As I have told the hon. Gentleman before, the figure is approximately £3 billion of commitments so far on design and early lead items. I am racking my brains, and I think I can say to him that since I have been in this post, which is just over two years, I have received no representation against the renewal of Trident from any senior officer in the armed forces.
Chris Heaton-Harris (Daventry) (Con)
T3. What progress has my right hon. Friend made with the renegotiation of the aircraft carrier contract?
Mr Hammond
Negotiations with the Aircraft Carrier Alliance are ongoing, but we believe they are close to reaching a conclusion. As soon as we have information to convey to the House, I will seek an early opportunity to make a statement.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
T6. The Coroners and Justice Act 2009 allows military families based in Scotland to request that an investigation into an operational death overseas be transferred to Scottish jurisdiction for a fatal accident inquiry. A written answer has revealed that, thus far, no families have made such a request. Could Ministers reassure the House that the information is being disseminated to families?
The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
I am grateful for that question. I am aware of the difficulty and that is also my understanding of the issue. I will make further inquiries. Of course, one of the problems we know we will face is when we have bereaved families both north and south of the border and what will occur in such circumstances. I would be more than happy to discuss the issue further with the hon. Gentleman.
Mr John Baron (Basildon and Billericay) (Con)
T4. Parliament sent a very clear message to the Government—the vote was 92 to nil—not to disband regular units until we were sure that the Army Reserve plan was both viable and cost-effective. What plans do the Government have to enact Parliament’s will?
Mr Hammond
As I have said in answer to an earlier question, it is just not possible, within the resource envelope available, to maintain the regular forces at their previous level while also recruiting and building the reserve. Neither would it allow us to restructure the force in the way necessary to deliver the outputs required from Future Force 2020.
Jenny Chapman (Darlington) (Lab)
Darlington is home to many forces families, probably because we are so close to Catterick garrison. What more are the Government going to do to support families moving between postings, particularly those who have children with additional needs?
The Minister for the Armed Forces (Mr Mark Francois)
As the Under-Secretary of State for Defence, my hon. Friend the Member for Broxtowe (Anna Soubry) has already indicated, we are looking at the range of accommodation we provide for service families. Under the new employment model, we also hope to be able to provide greater stability for armed forces personnel. We will still move them, in the interests of the service, but we hope, in many cases, to do so less frequently than we used to. I hope to visit Catterick garrison next week and perhaps this could be one of the things I look at while I am there.
Alun Cairns (Vale of Glamorgan) (Con)
T7. Cyber-defence is an important part of national security, as well as, obviously, economic regeneration. A number of nations are seeking to restructure the current form of internet governance. What action are Ministers taking to work with Cabinet colleagues to ensure a co-ordinated approach?
Mr Francois
The Foreign Secretary recently mooted some proposals and we discuss the matter frequently, both with other Government Departments and with international allies. This matter is in the interest of all our security and we take it very seriously.
Bill Esterson (Sefton Central) (Lab)
Small businesses in my constituency tell me that late payment threatens their survival and the jobs of their staff. Ministers can quote all the figures they like, but they have to accept that late payment by the MOD is a real problem for some small businesses.
The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)
If the hon. Gentleman was in the Chamber and listening to my earlier response to the Member for Ogmore (Huw Irranca-Davies), he will have heard that there was a single example of a penalty for late payment out of 4 million transactions last year. Where is the evidence to substantiate the allegation made by the hon. Member for Sefton Central (Bill Esterson)?
Nigel Adams (Selby and Ainsty) (Con)
T8. What discussions has the Secretary of State had with European Ministers on preparations for the European Council on defence?
The Parliamentary Under-Secretary of State for Defence (Dr Andrew Murrison)
Discussions have been extensive, as my hon. Friend would expect. The December Council summit is very important and I am pleased to say that we have been leading like-minded partner nations in the debate to set the agenda, which will be very much about capability and complementarity with NATO. It will most certainly not be about laying down more concrete, which is a prerogative of sovereign states, or, indeed, instituting more command wiring diagrams, which has absolutely nothing to do with our collective security and defence, and everything to do with the misguided political nostrum of ever-closer union.
Ian Lavery (Wansbeck) (Lab)
Seven Territorial Army centres in the north are set to close by 2016. How on earth will that assist the Government in recruiting up to 30,000 reservists before 2018?
Mr Philip Hammond
As we announced in our reserves basing plan, a small number of TA centres will close and consolidate. We have made a commitment that we will provide reservists with the latest equipment and training opportunities with their Regular Army counterparts. We can do that only by consolidating so that there are units of critical mass. In most cases, the consolidations are taking place within urban conurbations. We expect there to be few cases of people who are not within reasonable travelling distance of the next nearest reserve base.
Jack Lopresti (Filton and Bradley Stoke) (Con)
T9. Given that the MOD’s figures suggest that the present TA mobilisation rate is 40%, what research or evidence is there to justify the Secretary of State’s contention that that mobilisation will be doubled under the reserve forces plan?
Mr Hammond
I am not entirely sure that I understand my hon. Friend’s question. Under Future Force 2020, we would expect the reservist component of the deployed force on an enduring operation eventually to get to 40%. The construct that we are planning is designed to support that level. That level is still lower than what many of our English speaking allies routinely expect to use.
John Cryer (Leyton and Wanstead) (Lab)
Given the 20% cut in the Army, what representative structures exist so that the understandable concerns of servicemen and women can be heard in Whitehall and the upper echelons of the armed forces?
Mr Francois
Of course, we have something called the chain of command. We also have a number of other bodies such as the Army Families Federation, which represents service families very effectively in my experience. In the Ministry of Defence, we never lack advice, but we also do our best to provide solutions.
George Hollingbery (Meon Valley) (Con)
T10. The Meon Valley constituency is home to many who work in the defence sector for companies such as Northrop Grumman, Chemring, Cobham and many smaller defence-related businesses. Will the Secretary of State update the House on what efforts the Government are making to boost employment in this sector, which is so important to the prospects of many of my constituents?
Mr Dunne
The three companies to which my hon. Friend refers are important suppliers to the Ministry of Defence through both open competition and single-source capability. I encourage each of those companies to continue bidding for relevant MOD contracts when they are advertised through the portals that are well known to them. I have met representatives of each company at recent defence company exhibitions both in the UK at the Defence Security and Equipment International exhibition in September and overseas. Along with Ministers from other Departments, we actively support responsible defence exports by all quality British companies.
Nic Dakin (Scunthorpe) (Lab)
What is the MOD doing to improve its communication with local communities when bases, such as the one in Kirton in Lindsey, are being transferred out of MOD ownership?
Dr Murrison
We engage with all stakeholders. It is vital, as we restructure, that we take local authorities with us. Our record across the country has been very positive in that respect.
Sir Nick Harvey (North Devon) (LD)
I agreed with much of the Minister’s reply about the European Defence Council meeting in December. However, when do the Government expect to announce the review of Britain’s membership of the European Defence Agency? Given that we have rightly criticised other European nations for a lack of defence effort, would it not be perverse to turn our back on one of the few practical ways of doing something about it?
Dr Murrison
The European Defence Agency has its merits. We have been perfectly up front about that. However, it also has its problems. This country has been helpful in guiding the EDA as it evolves and we are keeping the matter under review. Our experience is that that approach has been effective in procuring the change that is needed in the way the EDA operates and in the efficiency with which it operates. We will continue in that light.
Huw Irranca-Davies (Ogmore) (Lab)
The Minister’s earlier response to me was shockingly complacent and refused, notably, to deal with new contracts and the failure to roll out direct payments, as the Government said they would. Will he respond to my constituents who run small and medium-sized enterprises that supply the MOD? They said:
“The MOD remains as inefficient as ever…Their commercial support is lacking and things take for ever to finalise…The MOD is in a mess in some areas we deal with.”
Mr Dunne
I am sorry that I disappointed the hon. Gentleman, who had clearly got his facts wrong when he stood up the first time. This Ministry pays 92% of bills within five days, and we make arrangements specifically for small and medium-sized companies to make part payments to assist them with their cash flow. I would be happy for the hon. Gentleman to write to me if he has any other specific evidence to substantiate his claim.
Bob Stewart (Beckenham) (Con)
May I ask my right hon. Friend what percentage of the £1.8 billion allocated to bolster reserve forces has been spent already?
Mr Philip Hammond
I cannot give my hon. Friend a precise answer because some of the money is committed to infrastructure, and some to equipment programmes that are in the process of being rolled out. Perhaps I can offer him a written answer that will provide some indication of where we are in this process.
Jim Dobbin (Heywood and Middleton) (Lab/Co-op)
In the recent dispute between Spain and Gibraltar, would it be appropriate to threaten the withdrawal of the British ambassador to Spain before somebody is injured?
Dr Murrison
I am grateful to the hon. Gentleman for his question, but that is, of course, a matter for the Foreign Secretary. As the Minister for the Armed Forces has already said, we utterly condemn the action taken by the Guardia Civil, which was distinctly unhelpful. Not only is it an invasion of sovereign territory, but it is also dangerous. The Guardia Civil cannot continue operating like that and expect that nobody will get hurt.
Mr Tobias Ellwood (Bournemouth East) (Con)
May I invite the Secretary of State to commit to operating both aircraft carriers? A single carrier can be operational for only two thirds of the year, whereas a second carrier would ensure that we have year-round capability and allow us to work up not only a carrier strike but expeditionary capability as well.
Mr Philip Hammond
I am grateful to my hon. Friend—nice try. As he knows, however, it will be decided in the 2015 strategic defence and security review whether or not to bring into operation the second carrier, HMS Prince of Wales.
Mr Philip Hollobone (Kettering) (Con)
Given the recent increase in its centrifuge capability, and that there is no plausible use for the amount of uranium it has enriched to 20% and beyond, how close does my right hon. Friend feel that Iran is to developing a nuclear warhead that is ballistically deliverable to either Tel Aviv or Riyadh?
Mr Philip Hammond
I do not want to speculate on how close Iran could be to developing any kind of warhead, but I reassure my hon. Friend that the Government support the process of engagement with the Iranian regime to test whether it is serious when it says that it wants to negotiate with the west.
Mark Pawsey (Rugby) (Con)
Given previous failures, the Government are rightfully changing the framework for defence procurement, which generates a £22 billion turnover. Will the Minister confirm that under the new arrangements there will be more opportunities for small businesses to get their fair share of that expenditure?
Mr Dunne
I pay tribute to my hon. Friend’s contribution in the Defence Reform Bill Committee. He has consistently championed the role of small businesses in defence procurement—something that the Government wish to take forward. Tomorrow, I will chair the SME forum at the Centre for Defence Enterprise in Harwell, and I will be picking up on those points.
Mr Speaker
Order. I am sorry to disappoint colleagues but as usual demand has outstripped supply.
Rural Fair Share Campaign
Madam Deputy Speaker (Mrs Eleanor Laing)
Before I call the 31 petitions to be presented, I must explain to the House how we will deal with their large number. Once the first petition relating to the rural fair share campaign has been read to the House, with its prayer, subsequent petitions on the same topic should not be read out in full. Members should give a brief description of the number and location of the petitioners and state that the petition is “in the same terms”. Members presenting more than one petition should present them together.
When a Member has presented a petition, he or she should proceed to the Table and hand it to the Clerk, who will read its title and then hand it back to the Member. He or she should then proceed directly to the petitions bag at the back of the Chair. I will call the next Member immediately after the Clerk has read the title. At the expiry of half an hour, no further petitions may be presented orally, but they may be placed in the petition bag and will be recorded as formally presented. If all Members speak and move swiftly, all 31 petitions should be able to be presented and no one will be left out.
I call Mr Graham Stuart to present his petition.
Mr Graham Stuart (Beverley and Holderness) (Con)
Thank you, Madam Deputy Speaker. I also thank Mr Speaker for allowing so many of us to present our petitions this evening. In fact, 119 petitions have been returned from constituencies around the country. Usually, at the close of business, the House empties, but instead, this evening, it has filled up with colleagues who have come to send a strong call from the countryside, a cry from the heart of England. I am delighted to see that the Secretary of State and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), are present to hear from us tonight.
Contrary to the myth, rural residents earn less on average than people in cities and pay council tax that is £76 a head higher, yet they see urban areas receive 50% more per head, despite the obvious higher cost of delivering many services in a rural area. We are calling on the Government to make a change; all we ask for is a rural fair share.
The petition states:
The Petition of the residents of Beverley and Holderness,
Declares that the Petitioners believe that the Local Government Finance Settlement is unfair to rural communities; notes that the Rural Penalty sees urban areas receive 50% more support per head than rural areas despite higher costs in rural service delivery; and opposes the planned freezing of this inequity in the 2013–14 settlement for six years until 2020.
The Petitioners therefore request that the House of Commons urges the Government to reduce the Rural Penalty in staged steps by at least 10% by 2020.
And the Petitioners remain, etc.
[P001238]
Sir Nick Harvey (North Devon) (LD)
I rise to present a petition in the same terms on behalf of 1,671 of my constituents, who are heartily sickened by this injustice and believe that a 10% improvement by 2020 is the very least that could be done.
The Petition of the residents of North Devon.
[P001236]
Mr John Whittingdale (Maldon) (Con)
I congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on launching this excellent campaign. I am handing in a petition in the same terms as his on behalf of my constituents from the village of St Lawrence. However, they speak on behalf of all the residents of the Maldon district.
The Petition of the residents of Maldon.
[P001235]
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I rise to support my hon. Friend the Member for Beverley and Holderness (Mr Stuart) and to hand in a petition in the same terms with 71 signatories from my constituency. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of Shrewsbury and Atcham.
[P001234]
Mr Brooks Newmark (Braintree) (Con)
I, too, am handing in a petition in the same terms for more than 200 signatories from my constituency. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of Braintree, Essex.
[P001233]
Sir Edward Garnier (Harborough) (Con)
I am also handing in a petition in the same terms as my hon. Friend the Member for Beverley and Holderness (Mr Stuart) from residents in my constituency.
The Petition of the residents of Harborough.
[P001239]
Roberta Blackman-Woods (City of Durham) (Lab)
I, too, am handing in a petition in the same terms for a number of signatories from my constituency. Although my constituency is the City of Durham, it has a large rural area and, critically, is part of Durham county council, a large rural authority that wants its rural fair share.
The Petition of the residents of City of Durham.
[P001240]
Sheryll Murray (South East Cornwall) (Con)
I present this petition on behalf of a very large number of my constituents in the same terms as my hon. Friend the Member for Beverley and Holderness (Mr Stuart).
The Petition of the residents of South East Cornwall.
[P001249]
Dr Liam Fox (North Somerset) (Con)
I am handing in a petition in the same terms for 435 signatories from my constituency and another petition also in the same terms on behalf of 812 signatories from the constituency of Weston-super-Mare in pursuit of natural justice for the rural parts of this kingdom.
The Petition of the residents of Weston-Super-Mare Constituency.
[P001247]
The Petition of the residents of North Somerset Constituency.
[P001248]
Stephen Phillips (Sleaford and North Hykeham) (Con)
I rise to hand in a petition in the same terms as that presented by my hon. Friend the Member for Beverley and Holderness (Mr Stuart) signed by 316 of my constituents and praying ever in the like terms.
The Petition of the residents of Sleaford and North Hykeham Parliamentary Constituency.
[P001246]
Jacob Rees-Mogg (North East Somerset) (Con)
The petitioners of North East Somerset echo Margaret Thatcher when she went to Europe and said, “We want our money back.” They want their rural fair share in the same terms as my hon. Friend the Member for Beverley and Holderness (Mr Stuart), and they present their petition with the greatest and humblest respects to the House.
The Petition of the residents of North East Somerset.
[P001244]
Andrea Leadsom (South Northamptonshire) (Con)
I am handing in a petition in the same terms as that of my hon. Friend the Member for Beverley and Holderness (Mr Stuart) for 551 signatories from my constituency, including representations from 29 villages.
The Petition of the residents of South Northamptonshire.
[P001243]
Damian Hinds (East Hampshire) (Con)
I, too, am handing in a petition in the same terms for a number of signatories from my constituency. The petitioners therefore request the House of Commons to urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the members of Liss Parish Council, Liss, Hampshire.
[P001242]
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
I am handing in a petition in the same terms from 1,953 petitioners in my constituency.
The Petition of the residents of the Bridgwater and West Somerset Constituency.
[P001250]
Annette Brooke (Mid Dorset and North Poole) (LD)
I am handing in a petition in the same terms from the Purbeck part of my constituency and other neighbouring Purbeck wards. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of Wareham, Dorset.
[P001251]
Miss Anne McIntosh (Thirsk and Malton) (Con)
It gives me great pleasure to petition the House on behalf of the residents of Thirsk and Malton. They believe that the local government finance settlement is unfair to rural communities, and note that the rural penalty sees urban areas receive 50% more support per head than rural areas, despite higher costs in rural service delivery. May it please the House to note that the Select Committee that I have the honour to chair has recently produced a report on this same issue, and that we have received a very disappointing Government response. I hope that we can link our report to these fair share petitions.
The Petition of the residents of Thirsk and Malton.
[P001252]
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I wish to present this important petition from my constituency, much of which comprises the most sparsely populated area of England. It suffers from being linked with a unitary authority and therefore has an even worse rural penalty in some of its rural areas. I draw these matters to the attention of the Secretary of State as I bring the petition to the attention of the House.
The Petition of the residents of Berwick-upon-Tweed constituency.
[P001255]
Dr Julian Lewis (New Forest East) (Con)
It is my pleasure to present a petition in the same terms as that presented by my hon. Friend the Member for Beverley and Holderness (Mr Stuart). It is signed by Mr Peter Osborne and other residents of the villages of Minstead, Lyndhurst, Bartley and Bramshaw in the New Forest East constituency, and it requests that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of New Forest East Constituency.
[P001254]
Harriett Baldwin (West Worcestershire) (Con)
I am handing in a petition in the same terms for 128 signatories from the beautiful town of Pershore and the villages around Bredon Hill in my constituency.
The Petition of the residents of West Worcestershire.
[P001268]
Dr Sarah Wollaston (Totnes) (Con)
I am presenting a petition in the same terms on behalf of people from Loddiswell and Dartmouth in my constituency, who speak for my entire constituency in recognising that the cost of providing services in rural areas is far higher and that the settlement should be based on age as well as deprivation.
The Petition of the residents of Loddiswell.
[P001258]
Neil Parish (Tiverton and Honiton) (Con)
I present this petition on behalf of the villages and towns of my constituency. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020. It is delightful to see that the Secretary of State and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) are here tonight to deal with the matter.
The Petition of the residents of Tiverton and Honiton.
[P001259]
Priti Patel (Witham) (Con)
I rise to present a petition in the same terms for a number of signatories from the wonderful village of Hatfield Peverel in my beautiful constituency.
The Petition of the residents of Witham, Hatfield Peverel Ward.
[P001261]
Mr Stephen O’Brien (Eddisbury) (Con)
I am presenting a petition in the same terms as that of my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on behalf of 490 residents of the Eddisbury constituency in Cheshire. I am totally confident that they represent the tens of thousands of rural and village residents in the Eddisbury parliamentary division.
The Petition of the residents of Eddisbury.
[P001263]
Sarah Newton (Truro and Falmouth) (Con)
I will be brief so that my remaining colleagues can present their petitions. I am handing in a petition, from a number of constituents in my very beautiful constituency of Truro and Falmouth, in the same terms as the one that has been so well presented by my colleagues.
The Petition of the residents of Truro and Falmouth.
[P001270]
Mr David Ruffley (Bury St Edmunds) (Con)
I am handing in this petition in the same terms for a considerable number of constituents from the great, historic constituency of Bury St Edmunds in the county of Suffolk. In particular, the signatories are from the villages around the two towns of Needham Market and Stowmarket. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020. May I add that I trust that Ministers will do a lot better than that?
The Petition of the residents of Bury St Edmunds.
[P001271]
Stephen Gilbert (St Austell and Newquay) (LD)
I am handing in a petition in the same terms as those of my hon. Friend the Member for Beverley and Holderness (Mr Stuart) and the 23 other right hon. and hon. Members who have presented their petitions tonight. My constituents, like those in the 119 constituencies that have had similar petitions submitted to the House, simply want a fair deal.
The Petition of the residents of St Austell and Newquay.
[P001266]
Mohammed Ahmed Mohamed
(11 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for the Home Department (Mrs Theresa May)
With permission, Mr Speaker, I would like to make a statement on the abscond of an individual subject to a terrorism prevention and investigation measure, or TPIM. The Metropolitan police believe that on Friday 1 November, TPIM subject Mohammed Ahmed Mohamed absconded from his controls. He was last seen at 3.15 pm inside a mosque in Acton. The police counter-terrorism command immediately launched an intensive covert operation to trace Mohamed, and inquiries continue. Ports and borders were notified with his photograph, and details were circulated nationally and internationally.
Acting on police advice, on Saturday I applied to the High Court for an order protecting Mohamed’s anonymity to be lifted, in order to assist the police with their investigation. Last night, the police appealed for the public’s help in tracing him. The police have urged anyone who sees Mohamed or knows of his whereabouts not to approach him but to call 999 or contact the anti-terrorist hotline.
The police and Security Service have confirmed that they do not believe Mohamed poses a direct threat to the public in the UK. The reason he was put on a TPIM in the first place was to prevent his travelling to support terrorism overseas.
I have spoken several times over the weekend to the director general of the Security Service, Andrew Parker, and to the Metropolitan police assistant commissioner for specialist operations, Cressida Dick. I received another briefing earlier today. They have told me that they believe they have all the resources and support they need to carry out the manhunt. However, I will not hesitate to provide them with any additional assistance they require.
The whole House will join me in thanking the police and the Security Service for their continued efforts to keep our country safe. Their focus is to locate and arrest Mr Mohamed. They are doing everything in their power to apprehend him as quickly as possible. The Government will provide them with all the support they need. I commend this statement to the House.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
Parliament will be deeply concerned about the Home Secretary’s statement. Obviously, all hon. Members want the police and the Security Service to have all possible help to apprehend Mohammed Ahmed Mohamed as soon as possible. The Home Secretary says that Mr Mohamed poses no direct threat, even though he is widely reported in the media to have attended terror training camps, procured weapons and planned attacks. He has walked away from a terror suspect order in a very simple disguise, and the Home Secretary has no idea where he is. He is the second man in 10 months who has absconded while subject to a TPIM. There were only 10 such men to begin with, and two have now gone: one in a black cab and one in a disguise. The Opposition called for controls to be tightened, for the legislation to be revisited and for lessons to be learned. None of that has happened. The Home Secretary has done nothing.
Since control orders were strengthened some years ago, no one absconded—since 2007. Lord Carlile, the former counter-terror reviewer, has said:
“nobody absconded while subject to a relocation order”.—[Official Report, House of Lords, 8 January 2013; Vol. 742, c. 20.]
However, since the Home Secretary got rid of relocation orders and control orders and introduced the weaker TPIMs, two terror suspects have vanished. Ibrahim Magag was previously relocated to the west country. The Home Secretary’s decision brought him back, and he disappeared. Mohammed Ahmed Mohamed was previously relocated outside London. The Home Secretary’s decision brought him back and he, too, has disappeared. Her policies brought those two terror suspects back into contact with their old networks and with people who could help them to disappear, and made it easier for them to run off.
Last time the Home Secretary said there was plenty of money for the added surveillance needed, so was Mr Mohamed under active surveillance when he entered the mosque, or was it just ordinary CCTV? His case was in court on Friday—he was accused of tampering with his tag—but why did the Government drop the case? Were the tags faulty? Were there other charges?
The Home Secretary said that Mr Mohamed was under a TPIM to stop him travelling overseas. What did she plan to do next year when his and all the other TPIMs ran out?
TPIMs apply to a very small number of difficult cases. Everyone recognises that there is no perfect answer and that there will always be challenges, but this Home Secretary has made it easier for serious terror suspects to disappear. That is irresponsible. She was warned about changing the law and weakening controls. She was warned that more people would abscond and they have done so—twice—but still she will not act. The question on everyone’s lips is: how many more warnings does the Home Secretary need?
Mrs May
This is a serious issue, but the right hon. Lady’s response was beneath somebody who is supposed to understand these matters.
The right hon. Lady referred to the money available for surveillance. I understand that she briefed Sky News this morning that she would tell the House of Commons that there have been cuts to the funding for monitoring and surveillance. I notice that she has dropped that from her argument, because the truth, as she well knows, is that as part of the TPIM package the Government introduced in 2011 we did not cut the surveillance budget for the police and Security Service but increased it—by tens of millions of pounds per year. We did not cut the budgets for counter-terrorism, policing and the security service; we protected them.
The right hon. Lady asked about the lessons learned from the Magag case. I can confirm that there was a review of that case, which was shared with David Anderson, the independent reviewer of terrorism legislation, who mentioned it in his annual review. All the recommendations of that review have been acted on. I can also confirm that a similar review will be conducted of this case.
The right hon. Lady referred to the changes in TPIMs. They are, of course, time-limited, but time limits have nothing to do with this case, as the subject was still bound by the terms of his TPIM. What she never tells the House when she makes this point is that 43 people who were subject to control orders have now exited those control orders. The truth is that even before time-limited TPIMs were introduced, the courts would not allow people to be left permanently on control orders. When the Metropolitan Police Commissioner was asked whether he had concerns about time limits, he said:
“I do not think so.”
Mrs May
I will come on to the relocations.
The right hon. Lady talked about tagging. GPS tags are used to provide information on the location of TPIM subjects and the tags that are used for TPIMs are significantly better than the ones they replaced, which had no ability to track subjects outside their homes. In this case, the police believe that the tag functioned exactly as it should have done, but it will be one of the aspects considered as part of the review of the case, and I should tell the House that I have been advised that this abscond does not raise any new operational issues with the tags.
The right hon. Lady also talked about relocation, but she knows that if someone is determined to break the terms of their TPIM or control order, there is little to stop them doing so in one place or another. David Anderson, the independent reviewer of terrorism legislation, says:
“The only sure way to prevent absconding is to lock people up in a high security prison.”
Unless the right hon. Lady is proposing the introduction of such draconian laws—and I thought she had conceded long ago that 90 days was too long—she should accept what David Anderson says. There will always be the risk of an abscond.
The shadow Home Secretary talked about the control order regime as though it never allowed any absconding by its subjects, but during the six years that control orders existed, there were seven absconds and only one of those seven people was ever found again. The idea that somehow control orders prevented absconds is not true. Even if we wanted to go back to the days of control orders, we would not be able to do so. The powers available under control orders were being steadily eroded by the courts, and the system was becoming unviable. Unlike control orders, TPIMs have been upheld consistently by the courts, so we now have a strong and sustainable legal framework to handle terror suspects.
The police and security service have always said that there has been no substantial increase in overall risk since the introduction of TPIMs, and despite the implication of what the right hon. Lady said, we have increased by tens of millions of pounds the annual budget for surveillance by the police and security service—and we have also given them new powers. In April this year, in a written statement, I explained how we would use the royal prerogative to remove passports from British nationals whom we want to prevent from travelling abroad to take part in extremist activity, terrorism training or other fighting. That power has already been used on several occasions since it was introduced. As for foreign nationals, the Immigration Bill will make it easier for us to get them out of the country, By the way, the Opposition failed to vote for that Bill on Second Reading.
The idea that under this Government the police and Security Service have fewer powers to keep us safe is just wrong. The idea that they have less money to keep us safe is wrong. The right hon. Lady should take her responsibilities seriously and support the police and Security Service in the important work that they do.
Angie Bray (Ealing Central and Acton) (Con)
Acton is a diverse community. It is also, overwhelmingly, a peaceful and law-abiding community. At its centre sits a mosque well known for being moderate, mainstream and popular. However, I am aware of concerns about potential radicalisation of younger members of the community. Will my right hon. Friend tell me whether her Department had previous concerns about the An-Noor Masjid and Community centre, from which this young man was able to escape?
Mrs May
This is an issue to which my hon. Friend has paid much attention in her constituency. I understand that the mosque authorities have been co-operating with the police and we welcome that co-operation. She refers to radicalisation. Within our counter-terrorism strategy we have the Prevent strand, which is precisely to ensure that young people and others do not find themselves being radicalised, and that we can exercise interventions, particularly through the Channel programme, to help to stop that radicalisation taking place. As I said in relation to the mosque where this individual was last sighted, I am pleased that the mosque authorities have been co-operating with the police.
Mr Jack Straw (Blackburn) (Lab)
In the light of no abscondings under control orders in the five years from 2007 after they were strengthened, but two abscondings in the past 10 months since TPIMs, which the Home Secretary introduced, greatly weakened the controls on these individuals, does she not think that a little contrition rather than bombast would be appropriate in these circumstances? Does she not recognise that the fundamental responsibility of any Home Secretary is to take proper measures to protect the safety and security of the British people? She has failed to do so by acting irresponsibly in weakening the powers available to control terrorists.
Mrs May
May I first say to the right hon. Gentleman that this is my first opportunity in the Chamber to note that he has announced his retirement from politics? He has given many years of service to this House, to his constituents and to the Government in various roles. I am sure there are many people who will be sorry to see him go from this Chamber.
National security is always the Government’s first priority. The right hon. Gentleman quoted some figures. I have to say to him that, yes, there have been two absconds in the two years that TPIMs have been in place, but there were seven absconds in six years under control orders. As I made clear in my response to the shadow Home Secretary, the control order regime was gradually being eroded by the courts. What we now have under TPIMs is a legally supported regime that puts measures in place to control and provide for those individuals whom we cannot prosecute, but who present a risk. The best place for any individual who is a terrorist is behind bars.
Sir Gerald Howarth (Aldershot) (Con)
May I commend my right hon. Friend’s approach and urge her to go further in her robustness and scrap the Labour-introduced Human Rights Act 1998? While she is at it, will she follow the advice of our right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and have the burqa banned in this country? It is alien to our culture and has enabled this man to abscond.
Mrs May
I thank my hon. Friend. He and I, as Conservative Members, both stood on a manifesto at the general election to scrap the Human Rights Act. I expect to stand on that manifesto at the next general election; it will be a Conservative commitment. He asks about the burqa. I will repeat my position, which is one that I have made clear on previous occasions. First, I believe it is the right of a woman to choose how she dresses. We should allow women to be free to make that choice for themselves. There will be circumstances when it is right to ask for a veil to be removed—for example, at border security or perhaps in courts—and individual institutions, like schools, will make their own policies on dress. However, I fundamentally believe it is the right of a woman to be free to decide how to dress.
Keith Vaz (Leicester East) (Lab)
I welcome what the Home Secretary has said about the burqa. This is not a case where the burqa is responsible. I urge her to look at the role of G4S and the tags that have been provided. As she knows, last week a number of cases were dropped after the police found out that there was a suggestion that tags had been tampered with; in fact, it was a question of wear and tear. Will she please investigate this again, rather than just accept that assurance? Was Mr Mohammed Ahmed Mohamed a British citizen? If he was, when did he acquire citizenship, bearing in mind the fact that he was a supporter of al-Shabaab, and does she have his passport?
Mrs May
On the last points, Mohammed Ahmed Mohamed is indeed a British citizen. I do not have his passport, but the police do. I know the right hon. Gentleman raised the same issue over the Magag case. On tags, as I said earlier, the police believe that, in this case, the tag functioned exactly as it should have done. He referred to the court case. The issue there was not about the effectiveness of the tags, but about reaching the evidence threshold for taking a criminal prosecution in relation to the operation of the tag.[Official Report, 6 November 2013, Vol. 570, c. 1MC.]
Dr Julian Huppert (Cambridge) (LD)
I agree completely with the Home Secretary that people who have committed terrorism offences should be convicted and in jail. Does she agree, however, that to have forcible relocation for people not convicted of any offence is not only a bad idea, but deeply un-British?
Mrs May
As my hon. Friend knows, the TPIM legislation did not contain relocation provisions. As I indicated in a couple of earlier responses, gradually, over time, the courts were reducing the ability to use various measures within the control orders, and they made it clear that they were not orders on which people should be left indefinitely.
Mr David Winnick (Walsall North) (Lab)
Can we work on the reasonable assumption that the Home Secretary’s spin doctors will not shortly be telling us that this happened because of that wicked man Edward Snowden or that somehow The Guardian was responsible for what occurred?
Mr David Ruffley (Bury St Edmunds) (Con)
My right hon. Friend has protected surveillance budgets since she came into office and was the first Home Secretary to deport Abu Qatada. In short, she is a commendably tough Home Secretary. Will she allow me to say that as a result of those things, Government Members can trust her to find out what went on in this case and that we have 100% confidence in how she is running the show?
Hazel Blears (Salford and Eccles) (Lab)
This year, 12 people previously convicted under terrorism legislation will be released and on our streets. Early next year, the orders of many of those still on TPIMs will come to an end. The independent reviewer of terrorism legislation, David Anderson, has said it is
“tempting, in the most serious cases, to wish for longer”
than the two years under TPIMs, and has described those whose orders will expire as at
“the highest end of seriousness”.
What steps is the Home Secretary taking to manage the undoubted increase in risk that will result from those on TPIMs who have completed their sentences under terrorism legislation being released and walking our streets?
Mrs May
The right hon. Lady started by referring to people being released, but these were people who had come to the end of their sentence. That is what happens—it happens in the normal course of events—but for individuals who pose a terrorist risk, or who are suspected of posing a terrorist risk, the law enforcement agencies take appropriate measures to ensure the security and safety of the public. As I said, national security is the Government’s first concern.
Mark Pritchard (The Wrekin) (Con)
I offer the Home Secretary my full support. As she will know, under existing legislation, she has the power to revoke the British citizenship of somebody who holds dual citizenship. May I encourage her to undertake a review of all those in custody and under TPIMs who hold dual citizenship and to consider revoking their British citizenship so that we can deport them more freely back to their home countries?
Mrs May
I note the point that my hon. Friend makes. I think I am right in saying that the majority of individuals who are under TPIMs are British nationals. He is right to say that it is possible to revoke the British citizenship of someone who is a dual national, but we would have to ensure that we did not render anyone stateless in so doing. There are a number of people who are subject to TPIMs who are British nationals.
Paul Goggins (Wythenshawe and Sale East) (Lab)
With two suspects on the run, no powers of relocation and a number of the current orders due to end early next year, is it now the Home Secretary’s policy to phase out the use of TPIMs?
Mrs May
TPIMs remain on the statute book as a tool that can be used when it is most appropriate to do so. I am sure the right hon. Gentleman and I agree that we would prefer to see anyone who is in any way involved in terrorism being prosecuted, convicted and sent to jail. As David Anderson has said, the only really secure place for someone who is a terrorist is behind bars. TPIMs remain on the statute book as a tool to be used when it is operationally appropriate to do so.
Mr James Clappison (Hertsmere) (Con)
I also offer my full support to my right hon. Friend. Does she agree that we would do well to remember the long saga of detentions, control orders and absconding under the previous Government, following hard on the heels of the introduction of the Human Rights Act 1998, which has made it so difficult to deal with dangerous people in our society? Can we now expect some humility, common sense and realism from those on the Opposition Benches regarding their responsibility for that?
Mr Pat McFadden (Wolverhampton South East) (Lab)
The Home Secretary has sought to blame the courts for chipping away at the previous regime, but she cannot escape the fact that it was a deliberate decision by her and her Government to increase the freedoms of these terror suspects by granting them access to technology and removing the relocation power. The former independent reviewer of terrorism legislation, Lord Carlile, said today that the lack of a relocation power was
“always going to be a vulnerability in the way TPIMs operate”.
In the wake of this latest absconsion, will she now reconsider the sunset clause in relation to the remaining TPIMs? If not, will she acknowledge that, as a result of a deliberate political decision by her Government, the rest of the suspects will be released on to the streets without supervision in a few months’ time?
Mrs May
I will make two comments in response to the right hon. Gentleman’s question. First, he knows full well that when TPIMs were introduced, this Government increased the funding available to the police and the Security Service for surveillance to the tune of tens of millions of pounds a year. I pointed this out in an earlier response to the shadow Home Secretary. Secondly, he referred to time limits but, as I have said, 43 people were on control orders and all of them have now exited those controls.
Michael Ellis (Northampton North) (Con)
Will my right hon. Friend confirm that, under her leadership of the Home Office, despite the difficult times of austerity that we inherited from the previous Government, the funding in this area has increased, not decreased, as was suggested in duff information given to the media earlier? Will she also confirm that in May 2007, the then Labour Home Secretary had to come to the Chamber to explain why three men had escaped while under the control orders regime of the previous failed Government?
Mrs May
My hon. Friend has got his facts absolutely correct about those who absconded while under control orders. We have protected the funding for counter-terrorism policing and increased the funding for surveillance and other measures as part of the package relating to the introduction of TPIMs. As I said, that involves tens of millions of pounds a year.
Jeremy Corbyn (Islington North) (Lab)
I should like to take the Secretary of State back to the answer she gave to the hon. Member for Cambridge (Dr Huppert). What convictions have been obtained against Mohammed Ahmed Mohamed? What prosecutions are planned? Does she not think that there is something deeply dangerous about using the royal prerogative to bypass Parliament in order to take away someone’s nationality or access to a passport? Should not an element of accountability be essential in any democratic liberal society such as ours?
Mrs May
For those who are under TPIMs, and others, we make every effort to ensure that prosecutions take place whenever possible. I commend the Security Service in this regard. A number of individuals were prosecuted earlier this year for terrorism-related offences relating to significant plots. This shows the very good work that the police and the Security Service do on a daily basis to keep the public safe. I believe that it is appropriate to have slightly changed the ruling in relation to the interpretation of the exercise of the royal prerogative. It is important to have that measure available; and, as the hon. Gentleman will see from the fact that I am here at the Dispatch Box answering his question, I am also accountable to this House.
Mr Ben Wallace (Wyre and Preston North) (Con)
Unlike the shadow Home Secretary, I have actually taken part in surveillance operations, and it is incredibly hard to watch someone 100% of the time. To come here and try to blame the Home Secretary for what is probably an operational front-line challenge is to play politics with our forces of law and order. Does the Home Secretary agree that one way to improve the capability of our Security Service and police force—to improve surveillance or to get more convictions—would be to introduce the communications data Bill which Labour opposes and our coalition partners block?
Mrs May
I commend my hon. Friend for bringing his personal experience to the debate; he has more experience of participating in surveillance operations than I do. He is absolutely right that we ask our Security Service and law enforcement agencies to undertake difficult tasks and that they do an excellent job for us on a day-by-day basis; they are not, I think, often enough praised for the work they do. My hon. Friend is also right about the importance of communications data. I have been clear on many occasions, including in this Chamber, that I believe we need to increase the ability of our law enforcement and security and intelligence agencies to access the data that will enable them to investigate—but, crucially, in many cases, also to prosecute —those involved in terrorism and organised crime.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Home Secretary told us at the time of Ibrahim Magag’s escape that the security and surveillance elements of the TPIMs were specific to each individual package and subject to regular review. Is she in a position to tell us when the arrangements covering this individual were last reviewed?
Mrs May
The money made available both to the police and the Security Service was made available around the TPIMs package, and obviously there are a number of ways in which that funding will have been used to enhance their capabilities. As to the individuals under TPIMs, there are regular reviews of the nature of the measures attached to them. As I said, those reviews take place regularly and for every subject of a TPIM.
Mr David Nuttall (Bury North) (Con)
I thank the Home Secretary for her statement. Will she explain what action will be taken against Mr Mohamed to protect the public if he is caught?
Kevin Brennan (Cardiff West) (Lab)
Would not the difficult job of keeping up surveillance on these nine individuals who are subject to TPIMs be made easier if relocation orders were made available? Does the Home Secretary not understand that the British people would expect her at least to review these procedures in the light of the fact that all it seems necessary to do to evade them is either to hail a black cab or to dress up in a burqa?
Mrs May
I have made it absolutely clear that all the measures relating to individuals under TPIMs are regularly reviewed to ensure that they continue to be appropriate. We have made more funding available to the police and to the Security Service when the TPIMs were introduced—and that funding continues to the tune of extra tens of millions of pounds a year—to enhance their capabilities for dealing with these subjects. I remind the hon. Gentleman, furthermore, that the police and security services have to deal with a number of individuals, not simply those involved in TPIMs, and we saw some good prosecutions earlier this year of those who were involved in plots to cause significant harm to British citizens.
Christopher Pincher (Tamworth) (Con)
My right hon. Friend is quite right to point out that Labour’s control orders were failing. Their powers were being eroded by the courts and there were seven absconsions in six years. Further to the question from my hon. Friend the Member for Bury North (Mr Nuttall), will she say what might happen to those who may be assisting Mr Mohamed at the moment?
Mrs May
When it is possible to take criminal action against people who have been involved in criminal offences, we will expect appropriate action to be taken through prosecutions. As I have said this afternoon and on a number of other occasions, I believe that the best place for those who are involved in terrorism is behind bars.
Angela Smith (Penistone and Stocksbridge) (Lab)
Can the Home Secretary confirm that Mr Mohamed was previously relocated outside London?
Graham Evans (Weaver Vale) (Con)
Labour is the party of ID cards, dodgy dossiers and 90 days of detention without trial. Why would anyone heed Labour Members’ advice on security and the rule of law?
Mrs May
I thank my hon. Friend for reminding us of those facts. I believe that the very first Bill introduced by the present Government was the Bill to abolish the ID card scheme that the previous Government had introduced, and I am pleased to say that it was this Government who reduced the period of pre-charge detention from 28 days to 14—although, as my hon. Friend has reminded us, the last Labour Government discussed increasing it to as much as 90 days.
Mr Speaker
Order. I listened patiently to the hon. Member for Weaver Vale (Graham Evans), but it was difficult to detect anything in his scripted question that appertained to the policy of the Government. I have exercised my natural tolerance on this occasion, but I trust that the hon. Gentleman will not push his luck in future. Questions must be about the policies of the Government, not those of the Opposition.
Nic Dakin (Scunthorpe) (Lab)
How many people under TPIMs does the Home Secretary need to lose before she reviews the policy of relocation?
Mrs May
The hon. Gentleman should bear in mind what I said earlier, which was a statement of fact: that over the years, the courts were beginning to erode the control orders that his party had introduced. We responded to that with a package of TPIMs legislation, and, crucially, by giving extra funding to our law enforcement and security services to help them do their job of keeping the public safe.
Bob Stewart (Beckenham) (Con)
The Human Rights Act seems to give succour to some terrorists. Is it not about time that we replaced it with a British Bill of Rights, which would probably protect our citizens much better?
Mrs May
As I have already made clear, I think that we should indeed consider replacing the Human Rights Act with a British Bill of Rights, and the Conservatives will take that policy to the next election. Meanwhile, I am taking the action that I can take to make it easier for us to deport foreign criminals in particular, and to ensure that certain aspects of the interpretation of the European convention on human rights reflect the will of this Parliament. As we know, this Parliament is on the people’s side, and that is where the law, and its interpretation, should be as well.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
When did the Home Secretary know that Mohammed Ahmed Mohamed had become a British citizen, and when did she become aware of his terrorist activities?
Mrs May
I looked at the issue of the individual’s terrorist activities when the TPIM was placed on him. I do not have the information about when he became a British citizen in my mind at this moment, but I shall be happy to write to the hon. Gentleman and the Chairman of the Select Committee.
Stephen Phillips (Sleaford and North Hykeham) (Con)
My right hon. Friend said that the case would be submitted to the independent reviewer. Can she give us some idea of how long she expects him to take to make recommendations? Consistent with the robust position that she always takes in protecting the people of this country, can she confirm that, if necessary, she will announce further measures to the House to ensure that terrorists who cannot be prosecuted are dealt with properly and the public are protected?
Mrs May
As I said earlier, national security and the protection of the public are always at the forefront of the Government’s mind when we are considering these issues.
I am grateful to my hon. and learned Friend for enabling me to clarify something that I said earlier, which his question suggests may have led to some misunderstanding. The review in the case of Ibrahim Magag was undertaken by the Home Office, but it was overseen by the independent reviewer of terrorism legislation. It is not in his remit actually to review, but he looked at the Home Office review and said that it was thorough, and I expect him to look at the review that will be undertaken in this case as well.
Chris Bryant (Rhondda) (Lab)
To be honest, it is not that easy to balance the conflicting interests of security and individual liberty and freedom, but what really worries me about the attitude the Home Secretary has presented today is that she seems to think that these two men came up with some phenomenally cunning plan. One of them jumped in a black cab and the other slipped on a burqa. Surely she understands that the others will probably be laughing in her face.
Mr Peter Bone (Wellingborough) (Con)
In August 2011 the Home Secretary told Parliament in an oral statement that she was going to change the law relating to face coverings. If that had happened—or, indeed, if the Bill of my hon. Friend the Member for Kettering (Mr Hollobone) banning face coverings in public had been introduced—she would not have had to come to the House today. Has she changed her mind on that policy?
Mrs May
We did indeed consult on the issue of face coverings, but that was about not the wearing of the burqa but the powers available to the police in circumstances such as mass demonstrations and riots where people are covering their faces, and whether the police needed any further powers. The police were clear that the powers available to them were sufficient for them to be able to deal with such circumstances in future, which is why we did not bring forward any legislation on that matter.
Huw Irranca-Davies (Ogmore) (Lab)
I commend the Home Secretary in at least one respect today: her generous words for my right hon. Friend the Member for Blackburn (Mr Straw) may cause him to pause and think that perhaps he will not depart this place, but will instead stand again. However, in the light of there having been two absconders within 10 months, should the Home Secretary not consider whether the measures she has put in place might be improved?
Mr Philip Hollobone (Kettering) (Con)
Given that the burqa is mediaeval, sexist and oppressive and given that, as we now know, it represents the easiest and most complete disguise for a Muslim terrorist suspect, will the Secretary of State reconsider her opposition to my Face Coverings (Prohibition) Bill? May I also say to her that this is not about telling women what to wear: first, because we now know that men wear burqas as well as women; and secondly, because this issue is about somebody concealing their identity, and such a law must cover both balaclavas and burqas?
Mrs May
Despite my hon. Friend’s best efforts, my position on this issue has not changed in the last half-hour. I continue to believe in relation to the burqa and niqab that it is for an individual woman to decide how she chooses to dress. Women should be free to make that choice for themselves. There will be circumstances in which it is appropriate to require somebody to remove a face covering: that could be in court, as we have seen in a number of instances; it could be at the border, for security purposes; and individual institutions such as schools should make their own policy in relation to dress that they consider appropriate in their institution. I continue to hold the view that it is not for the Government to tell women how to dress.
Mr Speaker
Order. None of us wishes unduly to embarrass the right hon. Member for Blackburn (Mr Straw), but following the Home Secretary’s most gracious tribute to him, may I say—on behalf, I think, of Members throughout the House—that the way in which, after 30 years of uninterrupted service on the Front Bench, the right hon. Gentleman has shown his continuing respect for Parliament and enjoyed something of a Back-Bench renaissance over the last three years is hugely respected in all parts of the Chamber?
Points of Order
Mr Jack Straw (Blackburn) (Lab)
On a point of order, Mr Speaker. May I thank the right hon. Lady, the Home Secretary, for her generous remarks, and you, Mr Speaker, and just say that I am not dead yet?
Mr Speaker
I think we are clear on that point now, even if we were not before.
Mr Peter Bone (Wellingborough) (Con)
On a point of order, Mr Speaker. When the right hon. Member for Blackburn (Mr Straw) was Justice Secretary, he had the kindness to ring me early one morning to say that he was making an oral statement about putting Wellingborough prison out to market testing. Unfortunately, under this Government the prison was closed and I learnt about it on a radio programme. I have today, Sir, learnt by letter that they are now selling it off. Would it not have been a courtesy to this House for them to have made a statement?
Mr Speaker
I am rather perturbed to learn what the hon. Gentleman has just said. As he knows, the decision on whether or not to make statements is in the hands of Ministers. Ordinarily, certain courtesies obtain in dealings between colleagues, including, most notably, between those who hold Executive power and Back- Bench Members in whose constituencies particular important decisions are contemplated or made. I do not think I can go further than that today, but knowing just what a thoroughly—I hate to use this word in the light of his surname—dogged individual he is, I feel sure that Mr Bone will raise the matter, either at his own behest or on the advice of Mrs Bone, before very long.
Alison McGovern (Wirral South) (Lab)
On a point of order, Mr Speaker. Last week, I received a very short answer to three detailed questions I had tabled about the access to elected office for disabled people fund, which exists to help improve the diversity of this place. Never mind answers, I barely received an acknowledgement that there were, in fact, questions tabled. May I seek your advice on how to get answers to these questions, especially as this is an important matter concerning the diversity and make-up of this House?
Mr Speaker
I am very grateful to the hon. Lady for her point of order. I am well aware of that £2.6 million fund, about which I was speaking in Edinburgh on Friday. If memory serves me correctly, the fund is a follow-through from the recommendations of the Speaker’s Conference which concluded in February 2010. The matter is indeed of the utmost importance, so I am disappointed if she has received less than substantive responses. The general principle here, as the Deputy Leader of the House, who is on the Treasury Bench, will know, is that ministerial replies to questions should be both timely and substantive. If they are heavily delayed, that is a discourtesy. If they are “insubstantive” or insubstantial, whether delayed or not, that is not serving the House. Members look for a response that is as comprehensive as possible and informative. If the hon. Lady has not achieved that so far, I hope that the Deputy Leader of the House may be willing, in Parliament’s interest, to assist her in her endeavours. If she has to go through the Table Office again to probe further, I do not think she will require any additional encouragement from me.
National Insurance Contributions Bill
(11 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (Mr David Gauke)
I beg to move, That the Bill be now read a Second time.
The Bill underlines this Government’s belief that pro-business policies help growth and job creation. For too long, our economy has been dependent on a booming financial services sector, on the one hand, and unsustainable levels of public spending, on the other. That made us particularly vulnerable to the crisis of 2007-08, the consequences of which continue to be felt today.
The challenge the Government faced in 2010 was how to begin the process of getting our public finances in order and to put in place the conditions for growth. Some believed that it was not possible to do both and some argued that measures to reduce the deficit would result in higher levels of unemployment. It was the Leader of the Opposition, no less, who said that the Government clearly had
“a programme that will lead to the disappearance of one million jobs”.
That was just over three years ago and there are now more people in work than ever before.
Since the coalition came to power, employment has increased by more than 1 million and there are 1.4 million private sector jobs, more than there were at the time of the last election. Employment in the three months until August 2013 was at its highest ever level, at 29.87 million. Those predicting disaster massively underestimated the capability of businesses up and down the country to adapt, innovate and expand, but they also failed to appreciate that we now had in place a Government on the side of businesses who were willing to put in place the conditions that help them to invest and expand, whether by addressing burdensome regulations or reforming our tax system.
In case we forget, such action included reversing the worst effects of the previous Government’s jobs tax. Yes, at a time when we needed businesses more than ever to take on more staff, Labour’s contribution to deficit reduction consisted of increasing the tax on jobs.
Mr John Redwood (Wokingham) (Con)
Does my hon. Friend think that it is possibly because they are embarrassed by that record that there are only two Labour Back Benchers in the whole Chamber and nobody from the other Opposition parties? How many extra jobs does he think his excellent Bill might help to create?
Mr Gauke
My right hon. Friend makes a very good observation. I can rarely remember so few Labour Members being present for the opening of a Second Reading debate. I was beginning to take it personally, but he has reassured me that this issue does not attract the interest of the Opposition. Labour is the party that intended to increase the jobs tax. Pretty much the only measure that they had for deficit reduction was to increase employers’ national insurance contributions, which was not a sensible approach at all.
We are not predicting how many jobs the Bill might create because a number of factors apply. It is interesting to note, however, that the Federation of Small Businesses believes that the measure is better than the one that it had advocated, which it anticipated would have created 45,000 new jobs. It has carried out a survey of its members and 28% of respondents believed that this measure would help them to increase the number of people they employ. That is a very encouraging step.
Guy Opperman (Hexham) (Con)
I accept entirely that the Minister cannot give specifics on the number of jobs the Bill will create, although quite evidently it will create jobs. Can he estimate how many employers he expects it to assist, particularly in the north-east?
Mr Gauke
That is a similar point, and, as I say, I am nervous about giving precise numbers. Of the FSB respondents, 28% believed that this would help them. We believe that we have to consider a range of measures, but clearly measures that reduce the cost of taking on staff must help in increasing employment. For example, the Bill would enable a business to take on four people on the national minimum wage and not pay any employers’ national insurance contributions at all. That will clearly help.
Margot James (Stourbridge) (Con)
My hon. Friend mentions the welcome for this Bill from the FSB. Is he aware that charities and social enterprises will also benefit from it? Alex Swallow, chief executive of the Small Charities Coalition, said:
“For a lot of the smallest charities, having one paid member of staff is a big step forward…having this allowance now helps them to do that, so it is a very positive thing.”
Mr Gauke
I am very grateful to my hon. Friend for that intervention. She makes an important point that applies to both businesses and charities. Taking on the first member of staff can be the most difficult step, as it is a big event for a business. If we are able to help and to reform our tax system to enable businesses or charities to take that member of staff on without paying the jobs tax—employer’s national insurance contributions—that will clearly encourage those businesses, which, I hope, will then take on further staff and expand.
Charlie Elphicke (Dover) (Con)
Will my hon. Friend confirm that the measure was the largest tax cut in the Budget? Does he therefore not think it is all the more surprising that there are no Labour Members here to scrutinise a major plank of that Budget?
Mr Gauke
Another observation one could make is that there are no Labour Members of Parliament here because they are—[Interruption.] I apologise. That remark is unfair and I withdraw it. There are the Labour Front Benchers and now three Back Benchers. Who knows? We might reach five or six by the end of the debate. Perhaps Labour Members have confidence in, and enthusiasm for, the Bill and can find nothing to criticise. However, we look forward to the speeches to come later. On that note, as the hon. Member for Bolton West (Julie Hilling) has waited so patiently, and as it is about time that we heard from a Labour Member, I give way to her.
Julie Hilling (Bolton West) (Lab)
I thank the Minister for giving way. Has he considered the fact that there are only a few Labour Members here because, to our relief, he has, in the end, listened to what we have been asking for and included a great deal of it in the Bill? I congratulate him on listening to us, and therefore on introducing the Bill.
Mr Gauke
That, too, is a theory, but I am not sure that it is necessarily persuasive. When we fought the previous general election, the Labour Government’s big policy for deficit reduction, among a pretty thin set of policies, was a big increase in national insurance contributions. We have already reversed the worst effects of that, and the Bill is a further measure that will help businesses up and down the country to create jobs.
The hon. Member for Bolton West is referring to one element of Labour’s five-point plan, which we do not hear much about any more, but there were serious problems with Labour’s proposal; this one is very different from that. It was a much more targeted scheme aimed at smaller employers taking on new employees, which raised all sorts of practical questions about how to define a new employee and how to prevent there being perverse incentives. I put it to the House that that scheme was neither workable nor likely to achieve its objectives. I suspect that we shall return to that issue.
Christopher Pincher (Tamworth) (Con)
While the Labour Whips hunt for a seventh dwarf—
Christopher Pincher
No, I am definitely Bashful. Cheeky is probably on the other side of the House.
Does my hon. Friend the Minister agree that the key component—the most important innovation in the proposal—is the fact that it encourages confidence among businesses, particularly small businesses? I held a jobs fair a couple of weeks ago and 500 jobs, part-time and full-time, were available. Many small businesses at the fair thought that cutting their tax through this measure was the right thing to do.
Mr Gauke
I am grateful to hear of the experience in Tamworth, and my hon. Friend is right to raise that point. Particularly for those small employers taking on their first person, the fact that they do not have to pay employer’s national insurance contributions at 13.8% will help them. In many cases, the Bill will have exactly that effect. I welcome what appears to be broad support for the measure.
Anne Marie Morris (Newton Abbot) (Con)
Following on from the earlier point about confidence, does the Minister agree that, although all the surveys indicate that confidence is at an all-time high, the challenge is investment? A Federation of Small Businesses survey has said that the measure will enable 28% of businesses to take on additional staff; that is what businesses want to do. Some 25% of those surveyed would invest in new machinery and equipment, and 21% in new staff training. That is exactly what we need; we need to turn confidence into a deliverable result.
Mr Gauke
My hon. Friend raises an important point. I pay tribute to the work that she does on the all-party parliamentary group on micro-businesses. She provides a very strong voice in the House for smaller businesses, and she is absolutely right to do so. She is right to draw the House’s attention to the FSB survey. We have already talked about the contribution that the measure will make to the taking on of more staff, but where more staff are not taken on, there will very often be investment in the business, which will clearly help it to expand.
The Bill cuts the jobs tax for 1.25 million employers and takes 450,000 of them out of employers’ national insurance contributions altogether, making it less expensive for businesses to take on new staff, so the Bill will help job creation. It contains four main measures. We have touched on the employment allowance. I will also say something this afternoon about the fact that the Bill gives effect to the general anti-abuse rule on national insurance contributions. It also amends the Social Security Contributions and Benefits Act 1992 to allow regulations to be made on the certification of non-UK employers of oil and gas workers, and makes changes in connection with two elements of the partnerships review carried out by Her Majesty’s Revenue and Customs. The Bill also makes a small number of technical corrections that I am happy to take the House through, should there be demand for that; if there is not, I am sure that we can cover them in some depth in Committee.
Returning to the employment allowance, as part of our efforts to remove barriers to growth for businesses and to equip the UK economy to compete in the global race, the Chancellor announced in this year’s Budget the creation of a new employment allowance, as my hon. Friend the Member for Dover (Charlie Elphicke) pointed out. It will take effect from 6 April next year. Businesses, charities and community amateur sports clubs in the UK will be entitled to a £2,000-a-year allowance towards their employer national insurance contribution liability.
The employment allowance builds on action that the Government have taken to make the tax system more competitive, and to encourage growth. That includes cutting corporation tax, increasing the rate of the research and development tax credit for small and medium-sized enterprises, increasing the annual investment allowance to £250,000, and giving a cash-flow benefit to those who invest in plant and machinery.
The objective of the employment allowance is to help businesses with the cost of employing their staff by reducing their employer class 1 national insurance contributions bill each year. It will support thousands of small businesses that aspire to grow, perhaps by hiring their first employee or expanding their work force, as well as those already employing others, or facing temporary cash-flow problems.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
In the emergency Budget that followed the last Westminster election, the Treasury said that it wanted to rebalance the economy geographically, but the only measure that we have seen to date is the reduction in employers’ national insurance contributions for companies outside London and the south-east. The employment allowance is a UK-wide measure. Does that indicate that the Treasury has given up on its ambitions geographically to rebalance the UK economy?
Mr Gauke
No, not at all. There is a whole host of measures, including the regional growth fund, and there is some really good news; exports are up significantly in the west midlands and the north-east in particular. We are taking steps to strengthen industries up and down the country. The hon. Gentleman touches on the regional employers’ NICs holiday; let me turn to that, because I suspect that the policy will feature heavily in the arguments that we hear from Opposition Front Benchers.
Mr Brooks Newmark (Braintree) (Con)
The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made a good point about rebalancing the country’s economy. Is my hon. Friend the Minister aware that we have had the biggest growth in construction in six years? The Chancellor and the Treasury should be congratulated on ensuring that the Government are rebalancing financial services and manufacturing in the economy.
Mr Gauke
The striking point about the most recent growth numbers is that they demonstrate growth in every sector, and that is very encouraging. I began by saying that the economy in the mid-2000s, say, was very dependent on financial services and on London and the south-east. Of course we want a successful financial services sector and we want London and the south-east to do well, but it is also important that growth is better balanced throughout the United Kingdom, and the Government continue that commitment.
Charlie Elphicke
While hesitating to introduce any controversy into the debate, does my hon. Friend agree that the hikes in the jobs tax under the previous Government destroyed jobs, and that this Government’s policy of reducing the jobs tax, particularly in this Bill, will enhance job creation and aid the recovery?
Mr Gauke
I do agree. Given that we want to increase employment, it would not have been sensible to undertake the increase in national insurance contributions that the previous Government intended. That was clearly a mistake. I am sure that my hon. Friend will be delighted to know that not only are he and I in agreement but Tony Blair said last week that he thought it was a mistake.
Sheila Gilmore
Can the Minister explain how a measure that was not actually implemented destroyed jobs, as the hon. Member for Dover (Charlie Elphicke) suggested?
Mr Gauke
To have implemented the policy we inherited would have destroyed jobs. It did not do businesses in the United Kingdom any good to have the prospect of an increase, sending the wrong message that we were going in the wrong direction. I am pleased to say that we have reversed that direction of travel by not implementing the previous Government’s policy in full. We have increased thresholds for national insurance contributions, which has clearly helped. Now, through this Bill, we are providing an employment allowance of £2,000.
Margot James
Does my hon. Friend agree that the reason the previous Government proposed the ridiculous increase in the jobs tax was testimony to the fact that they could not countenance cutting public expenditure? That was their downfall. They were content to continue to borrow £1 for every £4 this country was spending, and their proposal was evidence of a wholesale mismanagement of the economy.
Mr Gauke
My hon. Friend makes a valuable point that is well worth highlighting. When running a deficit of the size that we were running, we face some tough decisions. We have taken a range of measures to reduce the deficit, and it has reduced by a third.
Ultimately, though, whoever was in government was going to have to take these difficult decisions. If we are not prepared to take difficult decisions on spending—there is no evidence that Labour Members would do so—the answer is that we have to increase taxes. When we look around to see what taxes are available, it is clear that some very difficult decisions have to be made. Labour Members chose to go for employers’ national insurance contributions; perhaps they considered that that option was less visible to the general public than some of the others. However, the consequences would have been higher unemployment, and this Government were not prepared to face that.
Sir Edward Leigh (Gainsborough) (Con)
What business hates more than anything else is the complexity of the tax system. We still have one of the longest tax codes and one of the most complex tax systems in the world. Will the Minister explain how we are still setting about our long-term objective of simplifying the tax system and achieving a much flatter rate of tax for the sake of business?
Mr Gauke
The Bill will result in a big simplification for 450,000 businesses, because they will no longer have to pay any employers’ national insurance contributions. That is significant progress. We have established the Office of Tax Simplification, which has produced a number of reports. Anyone who has studied recent Finance Acts closely will have seen that a whole range of measures have been introduced as a consequence of the OTS’s recommendations. Of course, there is more work to be done and we as a Government remain committed to that, but there have been a whole range of measures. The OTS is looking at employee benefits at the moment, and that is significant.
Julian Smith (Skipton and Ripon) (Con)
One of the concerns that small businesses had about the national insurance holiday—which was an excellent policy, despite the Opposition’s comments—was about the forms that had to be filled in to qualify. Will the Minister clarify how easy it will be for businesses to take advantage of the new proposal?
Mr Gauke
My hon. Friend makes a good point. I want to turn to the employers’ national insurance contributions holiday, because I suspect it will feature in the speeches of Opposition Members. They will make the point that take-up was not as high as we had anticipated. [Interruption.] Let me give the numbers: 26,000 employers and 90,000 employees have benefited from it. Our expectation was that take-up would be much higher. [Hon. Members: “How much?”] Don’t worry; I am going to set it out.
We said that 400,000 businesses and 800,000 employees would benefit from the scheme. I think that the reason why that did not happen is closely aligned to what my hon. Friend has just pointed out: a scheme that was, essentially, quite targeted and required businesses to apply—even though we worked hard to try to make the application process as simple as possible—simply meant that fewer businesses applied for it than we had anticipated. Take-up was lower than expected and there are lessons to be learned from that. We should be open about that.
We need a system that is simple and that can be applied easily. Under the new proposal, no application process is needed as such. Businesses will receive the benefit of the employment allowance simply by using up-to-date payroll, and the introduction of real-time information makes that much easier to apply. We believe that this is a much-improved policy. It contrasts with the employers’ NICs holiday, because that was a targeted regime. It also contrasts both with the policy advocated by Labour in its five-point plan, which was even more targeted, and with the policy we heard about yesterday on the living wage. Complicated, temporary schemes requiring applications are likely to have disappointing levels of take-up, whereas permanent schemes automated through the payroll system will, we believe, apply much better.
Chris Leslie (Nottingham East) (Lab/Co-op)
Will the hon. Gentleman give way?
Chris Leslie
I am grateful to the Exchequer Secretary and I also welcome the new additions to the Government Front Bench. He will remember that we both sat on the National Insurance Contributions Bill Committee—I think it was one of his first Bills as a brand new Treasury Minister—and Labour said at the time that the proposal was very complicated. We said that he needed to be very careful with the convoluted regional design that he put in place and that the scheme would not get the anticipated take-up, which evidently it did not. It is sometimes invidious to say these things, but we told you so. Will the Exchequer Secretary go a little bit further, accept that we were right and he was wrong, and be big enough to say sorry?
Mr Gauke
If I remember correctly, that was in autumn 2010, when the next leader of the Labour party was saying that 1 million jobs would go missing. The hon. Gentleman says that the NICs holiday was too complicated. One of the lessons that can be learned from the NICs holiday is that the simpler the scheme, the better. Perhaps the Labour party has not been listening to him because since that debate, it has proposed two NICs schemes, both of which are more complicated than the one that we had in place. If he is making the case for keeping NICs schemes simple, perhaps he ought to have a word with his party leader.
Margot James
My hon. Friend is being exceedingly generous in giving way. Does he agree that the Opposition’s latest wheeze of giving a subsidy to employers who take on employees at the living wage will have a huge dead-weight cost, because 12 months before the appalling prospect of the return of a Labour Government, employers are likely to stop giving salary increases to workers who are on the minimum wage, mindful of the fact that if they give it another year, they might get it all rebated by the taxpayer?
Nick de Bois (Enfield North) (Con)
The Minister has talked about wages. Interestingly, the Federation of Small Businesses has said that about 29% of its members will use the employment allowance to give a pay rise to some of their employees, which they have been unable to do because of the economic circumstances. Does that not show that this policy is a way of delivering sustainable growth and sustainable wages, and not just a gimmick that will do more harm than good?
Julian Smith
Will the Minister confirm that he will take no lessons from the Labour party, because during the debates on the national insurance contributions holiday, it advocated more bureaucracy in the form of annual reports and the like?
Mr Gauke
My hon. Friend is right. The policy of providing a NICs break only for new employees raised all sorts of practical questions such as who constituted a new employee and what perverse incentives might have been created. That is not dissimilar to the point that my hon. Friend the Member for Stourbridge (Margot James) has made about Labour’s current policy.
I will turn to the other elements of the Bill. Clauses 9 and 10 relate to the general anti-abuse rule. The Government announced at last year’s Budget that they accepted the recommendation of the Aaronson report to introduce a GAAR targeted at abusive tax avoidance schemes. The GAAR was introduced in part 5 of the Finance Act 2013 and has been in force since July. This Bill will apply the GAAR to national insurance contributions.
Clause 11 relates to oil and gas workers. In this year’s Budget, the Chancellor announced that the Government would strengthen the legislation on offshore employment intermediaries. The Bill will address the non-payment of employer’s national insurance contributions in the oil and gas industry through the placement of the employer of oil and gas workers who are working on the UK continental shelf outside the UK. The measure has been subject to consultation. The consultation document, “Offshore employment intermediaries”, was published on 30 May 2013 and the consultation closed on 8 August 2013. The summary of responses was published in October.
The Government intend to address those offshore employment schemes largely by using existing powers contained in social security legislation. The Bill supplements those with a new certification provision for the oil and gas industry. That provision will apply where the national insurance obligations are fulfilled by someone on behalf of the person deemed to be the employer for national insurance purposes.
Clause 11 is part of a measure that, as a whole, is expected to bring in the region of £100 million per year to the Exchequer, without having a significant economic impact on the oil and gas industry. Staff costs for some businesses may increase if they had not previously been accounting properly for all tax and NICs. There will be little cost to the Government through additional administration, other than HMRC implementing the new certification system, and I hope hon. Members will agree that this is a straightforward and uncontroversial provision.
Finally, I wish to refer to provisions in the Bill concerning HMRC’s partnership review, which are contained in clauses 12 and 13. Following the Chancellor’s Budget announcement, HMRC carried out a consultation on two aspects of the partnership rules between May and August this year, and the Government are bringing forward measures in the Bill as a result of that review. The Government are proposing two sets of changes, the first of which was not part of the consultation proposals but resulted directly from information received during that consultation. It concerns a tax issue that can arise from the interaction of the alternative investment fund managers directive—AIFMD—and existing partnership tax rules. Only those alternative investment fund managers who operate as a partnership will be affected by the proposed changes in the Bill.
A provision in the Bill will allow regulations to be made to modify the class 4 NICS liability of partners whose profits will be deferred under AIFMD, which aims to improve investor protection and reduce risk. The regulations will be based on new tax legislation that will be included in the forthcoming finance Bill. Measures will be included in the NICs Bill, the forthcoming finance Bill and secondary legislation to reclassify certain limited liability partnership—or LLP—members as employed earners for tax and national insurance purposes, to tackle the disguising of employment relationships through LLPs.
The tax and NICs changes are expected to bring in approximately £125 million to the Exchequer in the first year, while the broader economic impact is expected to be negligible. There will be changes to the NICs liability for certain partnerships and individual partners in the alternative investment fund sector. The Bill will also result in some LLPs in certain industry sectors where disguised employment has been most prevalent paying increased amounts of NICs.
Richard Fuller (Bedford) (Con)
I greatly appreciate the Minister giving way. Before he sits down, will he or one of his colleagues respond on the financial costs of the employment allowance contained in the Treasury documents? What impact on the take-up of tax credits were included in the estimate of £1.25 billion impact on the Exchequer in 2014 through to £1.7 billion in 2017-18? I do not expect the Minister to have those numbers to hand, but if his colleagues could reply to that later, or send me a note, I would appreciate it.
Mr Gauke
I am grateful to my hon. Friend for that observation, and we will of course take a cautious estimate on the impact on tax credit take-up. Those numbers were signed off by the Office for Budget Responsibility, but I will ensure that my hon. Friend receives an answer on the detailed technical point before long.
This is an important and necessary Bill. Through the employment allowance it will allow us to support businesses with the cost of employing their staff, as well as small businesses that are aspiring to grow. The Bill also includes a package of measures aimed at activity that attempts to reduce the national insurance contributions payable to the Exchequer—an issue we are seeking to address.
This is another Bill that will help to create a system of low taxation that is properly enforced. It will continue to help businesses help our economic recovery, and it will help jobs and job creation. I commend the Bill wholeheartedly to the House.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I salute the Minister’s valiant effort to gloss over recent history and his record. I can tell Government Members that the reason their Minister was not making any predictions about the impact of the policy in the Bill was that he got all his previous ones wrong.
Nick de Bois
Given the Opposition’s dreadful predictions about how many jobs would be lost under the Government, does the hon. Lady agree that it would be wise for her to tread carefully on predictions?
Shabana Mahmood
That was a valiant effort to change the subject, but today we are talking about this Minister’s record and the regional national insurance holiday plan. I note that the Minister could not bring himself to admit that the Opposition were right and that he was wrong about that. Perhaps we can return to that point later.
The Minister sought to focus as much as he could on the employment allowance and desperately tried to forget its predecessor scheme that the Government introduced in their 2010 emergency Budget—the regional national insurance holiday, which was enacted in the National Insurance Contributions Act 2011. The national insurance holiday was an abject failure, so I am not surprised that he wants to pretend it never happened, but it did, and it failed utterly. He has wasted three years clinging to that policy rather than doing what Opposition Members told him to do, which was to rip it up and design a new scheme that took account of the criticisms made by us and others.
The Bill introduces the employment allowance, which we support, so perhaps we should give the Minister credit for getting there in the end, but it is somewhat difficult to do so, because it has taken him far too long to rectify the flaws of the previous scheme, which we warned him about from the beginning, as my hon. Friend the Member for Nottingham East (Chris Leslie) has reminded him. As a result, businesses desperate for help have struggled in the meantime.
Those businesses, particularly small and medium-sized enterprises, which are the engine of our economy, have continued to suffer. Bank lending to SMEs is still contracting, and analysis published by the Department for Business, Innovation and Skills shows that tightening credit has disproportionately affected low and average-risk SMEs. Last year, Project Merlin missed its target for lending to SMEs by more than £1 billion. In 2010, the Office for Budget Responsibility predicted that lending to businesses would have risen 34% by now, but in fact it has fallen by 10%.
Given this climate of the past three years, action has been necessary to support business, but, on national insurance, it has taken the Government too long to get there.
Richard Fuller
The hon. Lady is making some fair criticism of the national insurance holiday, but does she agree that one problem with the holiday was that it was a one-off, and that businesses are so smart in their planning that they ignore one-off schemes and go on previous predictions? Does she agree that a steady basis for policy is better than one-off, one-year schemes?
Shabana Mahmood
The hon. Gentleman makes a fair point, but there were many other problems with the national insurance holiday, which I shall return to later.
Ian Swales (Redcar) (LD)
As we are having a national insurance history lesson, what does the hon. Lady think the impact would have been of a 1% increase for employers and employees in April 2011?
Shabana Mahmood
I thank the hon. Gentleman for that intervention, but I prefer to look at the record. When the Government came to power, they inherited a growing economy. They choked off the recovery, resulting in three years of flatlining and stagnation, and the current cost-of-living crisis that affects businesses and people up and down the country.
David Rutley (Macclesfield) (Con)
The new version of events on the Government’s legacy is interesting. We received a dismal legacy. We had a huge deficit, but Opposition Members—deficit deniers—cannot recognise that. They should apologise for proposing the jobs tax. Will the hon. Lady apologise for putting that on their policy platform? It was a complete disaster.
Shabana Mahmood
I do not think that an economy that was growing was a bad legacy to leave. The legacy of three wasted years, caused by the Government pursuing a failed economic plan that has delivered a cost-of-living crisis for millions of people, is not one to write home about.
Jonathan Edwards
The key point about the national insurance measure in the emergency Budget was that it was a statement of intent that the UK Government wanted to rebalance the economy geographically. Under the last Labour Government, wealth polarised geographically at an incredible rate. If the hon. Lady is in the Treasury after the next election, what will she and her colleagues do to rebalance the UK economy geographically?
Shabana Mahmood
We have been speaking a great deal about rebalancing the economy and our proposals on regional banking, for example, are proof that we take the issue seriously. The hon. Gentleman described this Government’s policy as a statement of intent, but it was an absolute failure, and that is the subject of the debate today.
The national insurance holiday was a flagship policy of the Government’s first Budget, which is why they are so desperate to forget that it happened. They created a scheme that ran from 6 September 2010 until 5 September 2013 and applied to new businesses only. They were eligible only if they were created after 22 June 2010. Under that scheme, new businesses would not have to pay the first £5,000 in national insurance for each of their first 10 employees during the first year of the business. Greater London, the south-east and the eastern region were all excluded from the scheme. The Government said that 400,000 businesses and some 800,000 employees would benefit from the national insurance holiday, at a cost of £940 million over the three years of the scheme. In their impact assessment, the Government confidently predicted that the average benefit per business would be about £2,000, but by the end of the three years of the national insurance holiday in September this year, the scheme was shown to have been a comprehensive failure.
In the end, only 25,000 businesses received NICS relief—that is 375,000 fewer businesses being helped than the Government originally claimed. It was always highly unlikely to have ever been worth the maximum £50,000 to a new start-up business. To get the maximum relief available, the new businesses would have had to take on 10 people with salaries of up to £40,000, which does not exactly fit the pattern of how new start-ups behave and the sorts of choices that they make in their first year of business.
Of the £940 million set aside to pay for the scheme, only £60 million was ultimately paid out, a paltry 6% of the amount originally intended. To put that in context, the Government spent £12 million on the administration of the scheme. We repeatedly warned that the scheme was not working, that it was not helping businesses as intended and that the Government should reform it, expand it, review it or bring forward a new one, but they refused to listen.
It is not as though the Minister could not see the failure unfolding before his eyes. Take-up of the national insurance holiday was never anything other than dismal. In the first year of the scheme, there was not one month in which HMRC received more than 850 applications. In 2012, there was only one month when the total number of successful applications was more than 1,000—that was in May 2012, when there were 1,130 successful applications. For the Government’s scheme to succeed, they would have needed to hit that number every month for three years, and they got nowhere near that.
When the Treasury Committee conducted its inquiry into the June 2010 Budget, the Chair of the Committee said:
“For those of us who have been on the circuit a while it sounds like another case of the triumph of hope over experience.”
How right he was.
David Mowat (Warrington South) (Con)
A few moments ago, the shadow Minister was asked a question on regional focus. She has also said that one of the problems with the last scheme was that it did not include the south-east. Is it Labour’s position that the scheme should have applied in the south-east as well?
Shabana Mahmood
The hon. Gentleman is somewhat confused. As was pointed out earlier, we always said that one of the problems with the scheme was the regional element, and I am coming to that point.
During the passage of the National Insurance Contributions Act 2011, we told the Minister that he should drop the regional condition attached to the national insurance holiday and expand it to areas of the UK that had been excluded. Today, he brings to the House the employment allowance, which does exactly that. In fact, the Government’s analysis, published this morning, shows that more than 40% of the expected total number of employers who will not pay any NICs under the employment allowance are based in regions excluded from the previous scheme. At the time, the Minister said that extending the national insurance holiday across the UK would increase the cost by approximately £600 million to a total of £1.6 billion over three years. Today, his employment allowance is predicted to cost £1.3 billion in the first year, rising to £1.7 billion by 2017-18. We said that the national insurance holiday should be extended to cover all businesses, rather than simply new ones. Today, the Minister is introducing an employment allowance that covers all businesses, not just new businesses.
Richard Fuller
I am delighted to hear the hon. Lady talk about the virtues of expanding reductions in national insurance across the country and extending it in terms of time. Does she therefore think it was wrong for her, in the previous election, to stand on a manifesto that advocated an increase in national insurance?
Shabana Mahmood
I was proud to stand as a Labour candidate at the general election when the economy was starting to grow, but that recovery was choked off by the hon. Gentleman’s Government.
During the Committee stage of the National Insurance Contributions Act 2011, we tabled amendments to extend the national insurance holiday to charities. The employment allowance will do just that. This is effectively our policy, so we are of course delighted to support the Bill. Since the policy was announced in the Budget, we have been calling for it to be enacted immediately, rather than waiting until April 2014.
Mr Gauke
I note that the hon. Lady did not respond to the question from my hon. Friend the Member for Bedford (Richard Fuller) on whether she supported the Labour party’s policy of increasing employers’ national insurance contributions. Does she recognise that the Labour party’s policy has been to target the NICs scheme at small businesses—not all businesses, as she said—and only for new employees, not all employees? That substantially complicates the scheme, requires applications and shares many of the complexities of the NICs holiday.
Shabana Mahmood
I thank the Minister for that intervention. I am not surprised he wants to turn the attention away from his own U-turn. I remind him that our proposal was a refinement and an extension of his failed policy. We could see it was failing and, doing our job as a responsible Opposition, we were suggesting ways in which the Minister might be able to rescue his failed national insurance holiday. I must correct him: the scheme was not for small businesses only, but all existing businesses.
Julian Smith
This is a highly depressing speech. Should we not all be celebrating the fact that the economy is turning a corner and celebrating this policy, which will encourage the risk-takers, who are pushing the recovery on, to go further and faster and take on more people? This is a depressing speech. Let us get on with the opportunity that this policy brings.
Shabana Mahmood
I am sorry that the hon. Gentleman is so depressed that his Government’s policy has failed, but that is not a matter for me.
We will seek reassurance from the Government and test the Bill’s provisions to ensure that the new scheme does not suffer from the problems associated with the previous scheme. In particular, we will scrutinise its administration. The national insurance holiday was too complicated and the employment allowance should not suffer from the same problems. One problem affecting take-up of the previous scheme, in addition to its complexity, was the lack of publicity. Many businesses simply did not know what was available. This problem must not be repeated. This is particularly important when it comes to publicising the scheme to charities and amateur sports clubs, to which it now also applies. They are more likely to be unaware of what is available, and the Government should have a clear publicity strategy, subject to review, if take-up is, for whatever reason, lower than expected.
Clauses 9 and 10 apply the general anti-abuse rule to national insurance contributions, and enable the Treasury to ensure that the GAAR, as it applies to national insurance and to tax, is kept in line.
We support the application of the GAAR to national insurance, but we remain unconvinced that the current version is up to the job. It is the Government’s flagship policy for tackling tax avoidance, and their figures show that it will result in annual revenue of £60 million in 2014-15, which they expect to rise to £85 million by 2017-18, but that compares with a tax gap that was estimated, when the GAAR was introduced, to be £32.2 billion but which has now risen to £35 billion. Have the Government thought about reassessing their figures in the light of the slightly over-enthusiastic estimates made for the UK-Swiss tax agreement? Anyway, a dent of £85 million in a tax gap of £35 billion is nothing to write home about.
The House will recall that two months ago, a member of the GAAR independent advisory panel, which decides whether people have broken the rule, was forced to resign, shortly after the GAAR came into operation, having been caught advising people at a tax-planning conference how to keep their money
“out of the Chancellor’s grubby mitts”.
This was someone who was hand-picked to advise Ministers on the avoidance schemes the GAAR should catch. We remain concerned, therefore, that the GAAR is far too narrow, that there is no specific penalty regime, that no arrangements are in place to monitor its effectiveness and that, as a result, it has little credibility. We will continue to press these arguments when the Bill reaches Committee.
We welcome the introduction of a certification scheme for offshore employers of oil and gas workers. The extent of this problem is significant, with at least 100,000 individuals having been found to be employed through an intermediary company with no presence, residence or place of business in the UK. I note that this is the first of three measures aimed at tackling this issue. We await the introduction of the other two by way of secondary legislation and provisions to be included in the Finance Bill. We know from analysis published alongside the Bill that the changes, as a whole, are expected to result in Exchequer savings of £80 million to £100 million a year, and we will wish to review the effectiveness of these provisions as and when they come into force.
Julian Smith
Does the hon. Lady regret the Labour Government’s failure, over 13 years, to take the anti-tax avoidance measures that this Government are now putting in place?
Shabana Mahmood
I absolutely reject the hon. Gentleman’s point. We have a very good record on tackling tax avoidance, and as I said, at the moment I do not think that the GAAR is anything to write home about. We have significant issues with it, but we will return to those points in Committee.
Clauses 12 and 13 make provisions for partnership arrangements, which we support. We welcome the regulations that will prevent the misuse of partnerships for the purpose of tax avoidance by focusing specifically on two issues. The first concerns partnerships and the tax-motivated allocation of profits and losses relating to the alternative investment fund managers directive, and the second concerns limited liability partnerships and the nature of the relationship between partners and the LLP.
Focusing on the second issue, the current HMRC interpretation of the existing tax rules has meant that individuals who are members of an LLP are taxed as though they are partners in a partnership, meaning that low-paid workers taken on as LLP members have lost employment benefits and protections, while, at the other end of the scale, high-paid workers have benefited from a self-employed status and the resulting loss of employment taxes payable. It is time for the use of LLPs as a way to disguise employment status and avoid employment taxes to stop. We note that the Budget report estimated that the Exchequer gains would be £125 million in 2014-15, rising to £365 million in 2015-16, and we support action in this area.
In conclusion, key aspects of the Bill began life as Labour party policy, so I suppose I should thank the Exchequer Secretary for giving us the rare pleasure of enacting legislation from opposition. It is a first for me, but one that I hope will happen many more times. The national insurance holiday scheme was a complete failure, and it is vital that the employment allowance gives businesses the support they need, but it is unacceptable that they will have been waiting four years for this support. Three of those years were wasted while he and the Government clung to the national insurance holiday scheme, and almost another year has been wasted as they have failed to take immediate action, instead introducing the employment allowance only from next April. Even when forced to change course and do the right thing, they are still failing to go far enough and act quickly enough. Businesses up and down the country deserve better.
Ian Swales (Redcar) (LD)
I warmly welcome the proposals in the Bill. We have already heard the statistics on its impact, including that 90% of the money involved will go to companies with fewer than 50 employees. That represents real help for small businesses up and down the country. I also welcome the fact that it will be much simpler to apply for the allowance, and that businesses will no longer have the kind of issues they are experiencing with the present scheme.
It is certainly true that people and businesses respond to financial incentives, and it is no wonder that national insurance is sometimes called a jobs tax, because it can be a disincentive to employing people. It raises the bar to employing people and, given the importance of creating jobs in our economy, it is great to see that bar coming down. The Federation of Small Businesses has stated that the Bill will affect not only jobs; investment will also increase, as will the pay of the staff. I warmly welcome the FSB’s conclusion. Let us contrast these measures with the previous Government’s proposed 1% increase for employers and employees in April 2011. The independent Centre for Economics and Business Research said that that measure would have taken 57,000 jobs out of our economy—proving the point that national insurance can indeed be a big incentive either to employ people or fire them.
I welcome the proposals relating to offshore oil and gas employees. Quite a number of them live in my constituency, and many have had great difficulty with the intermediary companies that employ them. The confused nature of the national insurance arrangements can cause them personal issues when they start to claim pensions, for example, so I welcome the simplifying measures and look forward to the remaining measures required to give offshore oil and gas workers the right status in our economy.
The tax avoidance measures are also welcome. They are part of an ongoing campaign by the Government, who have already increased by 2,500 the number of staff employed to deal with tax avoidance and evasion. There is a lot more to be done, but we should all warmly welcome clauses 9 and 10, which will apply the general anti-abuse rule. This will prevent offshore payroll companies from avoiding national insurance.
Jonathan Edwards
How much of the annual tax gap does the hon. Gentleman think this measure will tackle?
Ian Swales
Very little. We heard from the hon. Member for Birmingham, Ladywood (Shabana Mahmood) that the measure will not bring in an enormous amount. It will, however, remove the loophole that has been used by many companies, including some of our merchant banks, to pay their staff offshore as a technique for avoiding national insurance. We have to welcome any measures that will improve that situation.
I want to ask the Minister for clarification following the 2011 Budget announcement that tax and national insurance would be simplified and that work would be done to bring them together. We have long since lost the hypothecation of national insurance, and I wonder whether we could simplify the arrangements a lot more than we are doing at the moment. I hope he will respond to that point.
The Bill is part of a big package aimed at supporting small and medium-sized businesses. Corporation tax is down from 28% to 23%, and it is heading for a rate of 20% by 2015. A new business bank has been proposed, along with other lending schemes. There has been a response to the Lib Dem campaign to increase capital allowances, which went up tenfold in the last Budget. That is particularly helping small manufacturing companies to increase their investment in equipment. The one in, two out policy on regulation is also a great help, as is the setting of small business rate relief at 100% for two and a half years. Those measures and more are driving the economy forward, and have now created 1.4 million jobs.
Last week, a shadow Minister described his party as the party of small businesses. The laughter that greeted his statement almost brought the house down. If we look at what could have been done in 13 years and what this Government have done in three short years, it is quite clear to see who is out there supporting small businesses.
The Opposition propose a business rate freeze, which would give small businesses about £450 over two years. These measures give businesses £4,000 over two years—almost 10 times as much. They are certainly a great help to small businesses. We have heard about the FSB supporting them, and about the Small Charities Coalition doing the same, while the CBI has also welcomed them. If there is a coalition of those organisations, we know we are doing something right.
This Government are continuing to sort out the mess left by the Opposition, and the Bill will help to create jobs in our economy, will strengthen it and will make the national insurance system fairer.
Sheila Gilmore (Edinburgh East) (Lab)
It is a pleasure to follow the hon. Member for Redcar (Ian Swales). As so often when members of his party speak in these debates, they talk about what was happening to the economy in the period before the general election and after it as if they were two completely different things. Many of the views the hon. Gentleman has just expressed were certainly not those on which he and his party leader stood, so far as the manifesto is concerned, in the period leading up to the election.
Anyone walking into this debate would think that it was yet another general debate on the economy—and, indeed, on the record of the last Government. Now that we are three and a half years into this Government, that seems somewhat strange. To me, it looks like diversionary tactics. Government Members are saying, “Let’s not talk about what we’ve done; let’s hark back yet again not just to the previous Government, but to proposals that never even came into effect”, suggesting that those proposals were somehow the cause of our economic difficulties. That clearly could not be the case.
Caroline Dinenage (Gosport) (Con)
I am grateful to the hon. Lady for giving way. I can understand why she would not want anybody to hark back to the 13 years of the Labour Government, when anyone who ran a business saw it become more and more uncompetitive, when our country slipped down the league for international and global competitiveness and when our businesses were shackled by endless amounts of red tape and bureaucracy. Has she had the chance to speak to any businesses at all about that record and how things have significantly improved over the last three years?
Sheila Gilmore
I thank the hon. Lady for her intervention, but I am certainly not going to say that many of my constituents did not benefit from the record of the last Government, and I am not going to accept her characterisation of that Government as not having helped the majority of people in this country. Yes, I have spoken to local businesses, and many of them have been struggling, particularly over the last three and a half years, to get loan finance to get their businesses functioning. Many have found it extremely difficult to operate in an economy that has been sent into decline by many of the measures that the incoming Government imposed. The picture presented by the hon. Lady is wrong.
As I was saying, the concentration on what happened during the last Labour Government is a reflection of the fact that this Government know that their previous proposals on national insurance contributions simply did not work. We have heard a lot about predictions, and some people have suggested that the Opposition’s predictions about the economy were wrong, so the Government’s predictions, presumably by extension, must be right.
However, what the Government told us in 2010 and 2011 was that they were going to eliminate, not just reduce, the deficit over the course of one Parliament. What we now hear over and over again is that the deficit has been reduced by one third, but it seems to have reached a plateau. That figure of one third has been invoked for a very long time now, which suggests that the Government’s original intentions and purposes have not been achieved. They have clearly accepted not only that they will not eliminate the deficit by 2015, but that everything has stalled and that deficit reduction has, as I say, reached a plateau. In 2010-11, it was predicted that we would see economic growth in 2010-12, not that we would be still waiting for it in 2013. Even now, the amount of growth we are seeing is very limited.
Ian Swales
Is the hon. Lady happy about the fact that she stood on a manifesto which included a national insurance policy that independent observers said would take 57,000 jobs out of our economy?
Sheila Gilmore
We do not know that that policy would have taken jobs out of the economy, because we did not have the opportunity to implement it.
Another issue that is subject to repeated predictions is jobs. The number of new private sector jobs is constantly being put at about 1.4 million, but, interestingly, in January 2011 the Government were already saying that 500,000 jobs had been created. It is clear to anyone that even if those figures are accurate, and even if factors such as the re-categorisation of jobs into different sectors are taken into account, the pace of job creation is not quite as dramatic or as effective as we might think.
We were told that the earlier proposal for a national insurance holiday was intended to create jobs. The fascinating aspect of that was the very low take-up. If all those new employers had set up new companies and provided new jobs, why did they not want to take advantage of it? Why did so few come forward? That surely casts doubt on the notion that numerous people were desperate to start up new businesses and to take on employees. In December 2012, there were only 20,365 applicants for the scheme. The Minister has told us that eventually there were 26,000, but the initial prediction was 400,000. There is a considerable difference between those figures.
It is not surprising that the Minister was reluctant to respond to interventions from his own Back Benchers and to say what he thought might be the outcome of his current proposals, because he knows how poor earlier predictions have been. It is not just in respect of the national insurance holiday that predictions have been wildly at odds with the reality. For example, the Youth Contract, which involved offering money to employers to take on people aged between 18 and 25, was apparently going to be one of the major answers to youth unemployment. It was designed, we were told, to help 53,000 young people per year. However, in the first year of its operation it helped only 4,690. That was another not very successful policy that we had been asked to believe would help people in an important way. In that context, I think it significant that only last week the Work and Pensions Committee heard from the CBI that it would have liked to see extra money for training, rather than cash incentives for employers to take on young people. Perhaps the Government should listen to what people think would help create jobs.
The Institute for Fiscal Studies has pointed out that the current proposals do not guarantee any additional jobs and that this is simply a tax cut. A tax cut may be beneficial and may bring about more jobs, but in itself it will not necessarily do so. Again, I would point to the previous record. The IFS says we do not know whether this proposal will have any effect on job creation as it will not be piloted and will be almost impossible to evaluate, and that we will therefore be unlikely to know whether it will be money well spent. We must bear in mind the previous history, which I have mentioned, of two schemes that both failed to help create employment, and we must ask the Government to monitor and evaluate this new proposal as much as they can if they are going to introduce it.
The Government must realise that the creation of jobs is extremely important for many parts of this country. Many Government members and Back Benchers have expressed pleasure at the reductions in unemployment in their own constituencies, which is all very well, but unemployment levels in many parts of the country are still extremely high. What is even more important for many people is the lack of quality jobs and the fact that they often cannot work the number of hours they want to. We currently have the highest recorded level of people working part time who want to work more hours. That means people have low incomes and are often dependent on top-ups from Government benefits.
The Government sometimes wonder why things like housing benefit keep going up rather than down, despite the reforms they put in place. The main reason is that people in part-time, low-income jobs on zero-hours contracts have no choice but to apply for such benefits, so even the jobs that are out there are often ones that leave people with a cost-of-living crisis. That causes real suffering, and there is no point in pretending otherwise.
I ask the Government to indicate the likely take-up of this scheme—reluctant though they are to do—and to accept that their previous measures in this field have not been successful. Three years on, their initiatives have simply not been successful, and we see the results in the state of our economy today. Of course it is good that growth is beginning to return, but such low-level growth after such a long time can hardly be hailed as a success. If we want to argue about whose predictions were right, perhaps, at best, we have to say that nobody’s were. The Government’s predictions on coming to power in 2010 were certainly not borne out, and people have been suffering the results of that in the past three years.
Margot James (Stourbridge) (Con)
Before I come to my main points about this Bill, which I support, I would just like to follow on from the speech of the hon. Member for Edinburgh East (Sheila Gilmore) and talk about the big picture for a few minutes. One can quibble about the benefits or otherwise of this scheme or that one, but the Government’s economic policies and interventions have contributed to Britain becoming the fastest-growing country in the western world. Survey after survey confirms the figures, which are extremely optimistic about this economy. I sometimes think the Treasury team is, with characteristic self-effacement, almost cautious in putting forward the record of this Government in full technicolour, so I would like to take up that role this afternoon.
The Bill is a straightforward and simple measure, top-slicing £2,000 off every company’s employer national insurance bill. As such, it will provide significant help to small businesses. I have 5,200 small and medium-sized enterprises in my constituency, and I welcome this measure on behalf of them all. We have heard the quotes from various organisations representing small businesses, social enterprises and so on welcoming the measure. The fact that it has such independent support ought to speak for itself.
I also wish to draw attention to the ambitious sole trader. The SMEs will have their employer insurance bills cut, but we also need to consider the small sole trader who is ambitious and wants one day to grow his or her business, just as I did. When I started my business in the 1980s, it consisted just of my business partner and me—everyone else who helped was begged, stolen or borrowed. I well remember the agony of the decision to appoint the first paid member of staff. One knows that one has to do it at some point if one wants to grow the business, but the responsibility that comes from knowing that someone walking through the door is then dependent for their livelihood on the success of one’s business really makes one stop and think. Anything that makes that decision easier, as this Bill does, has to be welcomed.
I wish to talk about a young woman in my constituency, Amy Fairley, who has a passion for flowers. She worked in a florist’s shop until about six month ago, when she was made redundant. She decided to follow her passion and dream by setting up her own florist’s shop. She did that with help from the new enterprise allowance scheme—another good scheme—and a Prince’s Trust grant and the mentorship that the Prince’s Trust also provides. I helped her to open her wonderful florist’s shop on Coventry street in Stourbridge three weeks ago. As a Prince’s Trust mentor for four years before I was elected, I have had similar experience and I was always reluctant to advise on taking on that first member of staff, because of the cost and the risk. One wonders whether the member of staff will be needed all the time, although, of course, they could be taken on part-time. The Bill will mitigate that caution.
I also wish to make the point that the Bill is part of a package of measures designed to help employment and small businesses. The reforms to employment law are also crucial, because this is not just about the cost of taking someone on; it is also about the fear that if the wrong person is appointed, the business is in for a huge headache. The Government’s doubling of the qualifying period before people can make unfair dismissal claims to two years is a huge advantage, as is the fact that they are making settlement agreements easier, obviating the need for employment tribunals, which are expensive in many cases. I know from my work as a Parliamentary Private Secretary to Lord Green that the Government have invested hugely in UK Trade & Investment and UK Export Finance, again for the development of specific programmes to support small businesses with their exports.
Julian Smith
May I pay tribute to my hon. Friend for the work she has done to promote UKTI’s merits to MPs across the House and for doing that with a passion that I suspect has never been seen in this House before?
Margot James
I thank my hon. Friend for his kind contribution and for his wholehearted support of that work on trade—both are much appreciated.
Ian Swales
May I add my tribute to my hon. Friend for playing a role in this exercise? My constituency office is in a business centre and it was fantastic to see UKTI officials advising small businesses recently on exporting to China—I never expected to see that.
Margot James
I thank my hon. Friend for that intervention. Indeed, what he has observed might explain why British exports to China have risen at a record rate in the past 12 months.
Another aspect of Government support for the small businesses that are crucial to employment and many of the new jobs that have been created has been the reduction in the small companies tax rate to 20%. The small business rate relief scheme was doubled until 14 April and we have also had the start-up loans scheme and the new enterprise allowance, which I have already mentioned. All those measures were designed to have, and have had, a positive effect on the livelihood of our small businesses.
Of course, not just employers have benefited from such measures. Employees have benefited too. In my constituency, 3,794 people have been removed from income tax altogether. A vast number of people in my constituency—33,000—are now paying less tax and that is an important development, freeing people to spend more money on the high street, which is where the economy is starting to grow again.
It is instructive to recall the Opposition’s record. The shadow Business Secretary makes the laughable claim that Labour is now the party of small business, but I think that small business people judge Governments, Oppositions and former Governments on their actions, not their words. The Opposition have a long way to go before they can put themselves up as people who understand the needs of businesses. As I said earlier, I think that it was indicative of their deeply flawed management of our economy that they felt in 2011 that they needed to put up taxes by putting up national insurance, rather than cutting public spending, which, of course, is what—only the other day—Tony Blair said they should have done. We all know how the economy ended up.
Sheila Gilmore
Is it not in fact the case that the incoming Government put taxes up? In particular, they put up VAT and that was the choice that they made. To say that no taxes went up would not be true.
Margot James
I would apologise if I felt that I had said that no taxes had gone up. Let me clarify in response to that intervention. I was making the point that the previous Government proposed to increase national insurance, presumably because they could not face the public expenditure cuts that this country really needed. The hon. Lady is quite right that the Government were driven to put up VAT, but the important point is that in getting a grip on the public finances we had a rough ratio. Spending cuts delivered approximately two thirds of what was required and the tax increases, regrettable though they were, were necessary and delivered the other third. I fear I digress somewhat, Madam Deputy Speaker, and I feel your watchful gaze so I shall return to the subject of the Bill.
I congratulate the Government on introducing this important measure. I would have benefited hugely from it when I was in business and I welcome it on behalf of the many small businesses and sole traders in my constituency.
Richard Fuller (Bedford) (Con)
It is truly a great pleasure to follow my hon. Friend the Member for Stourbridge (Margot James), who is a mighty champion for our small businesses that are trying to access international markets. It is no wonder that her region leads the country in increasing exports to developing and developed nations around the world. She spoke most eloquently about the benefits for small businesses and echoed some of the points made by my hon. Friend the Minister about the impact of the Bill on the willingness of employers to add to their labour force.
I want to focus on the Bill’s impact not on the quantity of people who will be employed but on the price of labour, and on how the Bill might be used to implement some of the efforts to create a living wage across the United Kingdom. The Treasury team have come across a useful tool in implementing that change, and it is up to them to see how much courage they might have to move forward with this initiative to achieve it. That marks the difference between those on the Opposition Benches, who wish to posture over changes in the economy on employment and wages, and Government Members, who are interested in taking action to achieve change.
If I may, I shall consider the record of the previous Labour Government. As we have heard often today, the Labour Government were interested in increasing the tax on employment, and indeed went into the general election calling for increases in the jobs tax. Despite the words we have heard today, we have not heard one word of apology from the Labour party for saying at the last election that the right way to increase employment was to increase the tax on jobs. Still no apology on that, but it was part of a pattern that impacted negatively on the price of employment.
Labour abolished the 10p tax rate. It created a tax credits system that was an incredibly complex way to give people a post-tax income on which they could live. Any of us with constituents who have been caught up with tax credits when they went wrong knows how hard it is for families when the tax credits office claws those tax credits back and savings have to be found. Why on earth was that system a good system? Underpinning it—
Richard Fuller
I will give way in a second; I would love to hear from the hon. Lady.
Underpinning that system was Labour’s creation of a benefits system that discouraged work. We had hundreds of thousands of workers in our country going out to work on the minimum wage or a little more and seeing people living on benefits when they could have worked and ending up with a lifestyle that those people in work could not afford. Labour has not apologised for that policy and has opposed even the benefits cap.
Sheila Gilmore
Does the hon. Gentleman accept that the intention behind tax credits was indeed to encourage people to enter employment and that 350,000 single parents entered employment as a direct result of the introduction of the tax credits system?
Richard Fuller
The hon. Lady makes a point, but not a particularly good one. If the economy was borrowing so much money to stimulate employment, it was not a particularly outstanding outcome to achieve an increase in one part of the labour force of 350,000, especially when we consider the fact that every Labour Government have left office with unemployment higher than when they came to office.
Richard Fuller
That is the bigger picture to which I guess the hon. Lady wishes to return, as she is one of, I think, just two Labour Back Benchers in the Chamber.
Sheila Gilmore
I thank the hon. Gentleman for giving way again and being so generous with his time. That myth about every Labour Government leaving office with unemployment higher than when it came to office is not entirely accurate. For example, unemployment was extremely low at the end of the period in office of the 1945-51 Labour Government. Under the Tory Governments of 1979 to 1997, unemployment was more than 10% in the majority of those years.
Richard Fuller
The hon. Lady is digressing significantly from the Bill to talk about 1945, but in any debate I am more than happy— [Interruption.] Labour Front Benchers want to make an argument about how good the Labour party is in office at reducing unemployment. The facts are the facts: Labour comes to office and when it leaves, unemployment is higher.
To return to the impact of the Bill on improving wage rates, let us consider the record of the coalition in government. We are in the process of raising the personal allowance to £10,000. I shall return to that point. We are targeting and simplifying tax credits and other benefits. We have introduced a benefit cap, making work pay. With this Bill, we are introducing an employment allowance, which will provide greater opportunity for us to improve wage rates. The living wage is a crucial issue that Members on both sides of the House should embrace. We should all endeavour to find ways to improve wages for those who are unskilled or on low pay. For many decades, real wages for people who are unskilled have been stagnant, or rising at a very low rate. One benefit of the introduction of higher wages is the potential that many businesses will see for higher productivity. Most importantly, if very small businesses are able to pay higher wages, there is reduced staff turnover. That is particularly important where there is low pay across a profession.
I looked at the Bill with great interest to see how it could provide a solid basis for an answer to the question, “How do we implement the living wage in practice?”. Tomorrow, we will hear from the Leader of the Opposition about his approach. It was interesting that the shadow Minister, the hon. Member for Birmingham, Ladywood (Shabana Mahmood), said that one-off policies were a bad idea when it came to persuading businesses to take up a new Government scheme, but a one-off policy is precisely what the Leader of the Opposition will propose tomorrow as his approach to the living wage. If it does not work for national insurance contributions, how on earth will it work for substantial wage changes by employers? The problem with the Leader of the Opposition is that he just does not understand business.
Madam Deputy Speaker (Dawn Primarolo)
Order. I have allowed the hon. Gentleman to range quite widely, but his comments must relate not to what might happen tomorrow, but to the Bill and its contribution or otherwise to the living wage; I think that was the point that he wanted to develop. I would be grateful if he stuck to that.
Richard Fuller
You read my mind, Madam Deputy Speaker. I shall return directly to the implications of the measure for the living wage and wage rates. Let me give some numbers showing the impact of a change from the minimum wage to the living wage, and say how the Bill can help to achieve that change for the long term.
Let us consider what happens when a married person who works 40 hours a week, has two teenage children, and earns the minimum wage, which is £6.31, moves to the living wage, which today went up to £7.65. I am using the numbers for outside London, because I represent Bedford, which is outside London. The employee’s gross pay would increase from £13,125 to £15,912—an increase of 21%. After the changes to their tax, national insurance and tax credits, their net take-home pay, which is what matters to them, increases from £15,067 to £16,483—a welcome increase, but an increase of only 9%. That is the impact on the family of the change from the minimum wage to the living wage.
Looking at the cost to the employer, there is an increase in salary of £2,787, and an increase in the employer’s national insurance contributions of £385; that is essentially a 23% increase in the cost of employing that person. Then there is the impact on the Exchequer. It benefits from an increase in income tax of £557, and an increase in the employee national insurance contribution of £335. The reduction in the payment of tax credits benefits the Exchequer by £479, and the increase in employer national insurance benefits it by £385. The Exchequer ends up increasing its tax take by 32%. The change from the minimum wage to the living wage means a modest but welcome increase for the employee, has a high cost for the employer, and brings a substantial benefit, on my calculations, for the Exchequer.
In that context, let me say this about the Government’s use of the employment allowance to give something back to our hard-pressed employers and small businesses: £2,000 is a start, but we have found a tool here, if we have the courage to use it, that we can use to encourage—not compel—our private sector employers to accept a living wage. Her Majesty’s Revenue and Customs could act as a compliance officer for those who seek to pay the living wage, as it does for the minimum wage. We could pay back some of the significant gain to the Exchequer that my simple calculation has brought up, though I am sure that there are more complicated numbers out there. There is a useful tool here, and this is a small start. Let us have the courage to see how we can improve living conditions and wages for our low-paid workers, and use the Bill as the start of a better future for all of us.
Caroline Dinenage (Gosport) (Con)
I am grateful for the opportunity to speak in this important debate, and to follow such an array of wide-ranging, informative, quality contributions from my hon. Friends and colleagues. The Bill is a key part of a wider programme that the Government have undertaken to support aspiration, encourage job creation, and boost growth. As a small business owner, I am proud to speak in support of a policy that will help firms around the country to expand, innovate and, crucially, create jobs. To put it simply, the Bill is great for small businesses, great for charities, and great for Britain.
As we have heard, the key part of the Bill will save all businesses in the country up to £2,000 in class 1 national insurance contributions. Taking a tax off jobs will make it much easier for millions of people who have set up firms to take on new employees. Do not take my word for it; Anne Redston, professor of law at King’s College London, says:
“At a stroke, this new relief…removes the ‘jobs tax’ on millions of small businesses, and is likely to encourage one-man businesses to take on their first employee.”
What is more, 98% of the benefits of the change will go to small and medium-sized enterprises. As we have heard, 450,000 small businesses—one third of all the employers in the country—will pay no jobs tax at all.
Julian Smith
Does my hon. Friend agree that not only is this an exciting proposal overall, but the fact that social enterprises and charities—many of which, in her constituency and mine, are highly innovative and create jobs—are included is a really good thing?
Caroline Dinenage
My hon. Friend makes a key point. The fact that the measure is open to charities and social enterprises, as well as businesses, is really important. That is another step in the right direction by the Government to make it easier for small firms and charities to take on new employees. This is not just about business; the head of policy and research at the National Council for Voluntary Organisations, Karl Wilding, says that the idea is
“a very positive thing…To a small organisation, £2,000 is a lot of money.”
He is absolutely right. When I set up my business at the age of 19, £2,000 would have been a massive incentive to take the big step of hiring my first member of staff.
My hon. Friend the Member for Stourbridge (Margot James) spoke powerfully about her experiences of starting up a business. As she said, taking on that first member of staff is a really big moment—a huge decision. It is a massive responsibility; the person hiring becomes responsible for someone’s income, livelihood and wages.
Caroline Dinenage
And their family. I am pleased that the Bill makes that moment so much more likely. There are many statistics that show how great an impact the change will have. We have heard some amazingly powerful statistics this afternoon; for example, over a year, employers with fewer than 10 employees will have their national insurance contribution bill cut by 80%. However, it is easy to get bogged down in figures. What does the Bill mean for charities and small businesses up and down the country? It means that the small-time cupcake seller who works out of their kitchen and wants to expand, but is not sure that they can afford to, is now £2,000 more likely to give a young person their first foot on the jobs ladder. It means that the mechanic who needs another pair of hands to deal with a recent increase in demand can take someone on and pay them up to £22,000 without having to pay any jobs tax. It means that the Government are continuing to deliver exactly the kind of policies that have, so far, created 1.4 million private sector jobs and put the country on the path to prosperity.
There are so many ways in which the Government have helped small businesses to flourish. Locally, I have been involved in a really successful regional growth fund bid—a partnership between The News, which is our local newspaper, and the Solent local enterprise partnership. The Bridging the Gap scheme is a pot of money that new start-ups and small firms can bid for to help grow their business and create jobs. I recently visited three of the Bridging the Gap success stories in my constituency, including Kev Jones and Son, an independent convenience store at the heart of the community, which is, you will be interested to hear, Madam Deputy Speaker, the go-to shop for your Christmas meat hamper. The people there had very ambitious plans to expand. With a little bit of extra money, they were able to bring those plans forward, and they have now doubled their floor space and created some of the new jobs the area so desperately needs. These are exactly the kinds of businesses that we will be supporting through this Bill. That is absolutely the right thing to do, because they are not just the backbone of our economy but the lifeblood of our communities. The Bill is a key part of the wider programme to make Britain the most small-business-friendly environment in Europe.
By cutting Labour’s deficit, the Government have secured record low interest rates for hard-working families and small businesses across the country. From April 2015, corporation tax will be cut to 20%—the lowest in the G20. As a result of the Government’s policies, the UK recently topped KPMG’s list of the most competitive countries in which to do business, beating Switzerland, the USA and France for the first time ever. This hard work is getting results. The latest figures from the Office for National Statistics showed strong growth of 0.8% for the third quarter of 2013. That proves that the only way to create real prosperity and to raise living standards is not through quick-fix gimmicks but through straightforward solutions: backing businesses to create growth, cutting taxes to boost growth, and supporting hard-working people.
Labour Members have presented this as being somehow their idea. That appears to show brass neck of almost biblical proportions. Anyone who ran a business under the previous Labour Government, as I did for 13 years, will know that we were shackled by endless amounts of bureaucracy as the country fell deeper into debt and slipped down the international competitive league tables. We cannot escape the fact that they got it very badly wrong on the economy as well. They said we would lose 1 million jobs. Instead, we have seen the creation of 1 million net jobs—three in the private sector for every one lost in the public sector. Because this Government have cut taxes, slashed red tape and unleashed innovation, we have seen record levels of small business creation and employment. I am confident that the Government will continue to deliver the right policies.
Sheila Gilmore
Does the hon. Lady accept that the rate of employment has not yet reached the level it had reached prior to the recession, even if some numbers, many relating to part-time work, have gone up?
Caroline Dinenage
The hon. Lady can throw facts and figures around as much as she likes, but unemployment was so high when we came into government purely as a result of the Labour party’s economic policies over 13 years. Everything we have done until now has been to try to put the brakes on and reverse that, bringing employment back to households that may not have had it for over a decade.
I am confident that the Government will continue to deliver jobs and deliver the right policies, such as this Bill, backing small businesses to create the jobs we need and keeping us on the path to prosperity.
Julian Smith (Skipton and Ripon) (Con)
Because I lost a contact lens on the tube, Madam Deputy Speaker, I can see you but unfortunately cannot see the Minister. I apologise in advance for the fact that my myopia means that I will be slightly less coherent than usual.
This Bill is a fantastic boost to all British business. In a constituency such as Skipton and Ripon, it is a particularly good shot in the arm for an area of Britain where employment is on the up and unemployment is going down. In my constituency, unemployment is down by about 30% and youth unemployment is down by about 35%, and more new businesses are being created. This is a big opportunity to give those entrepreneurs the backing they require to take on more jobs. The businesses in my constituency are largely based around tourism, agriculture, farming and small manufacturing. Many of the businesses in the 900 square miles that I represent are working under tough conditions, isolated and very vulnerable to the weather, and every bit of help they can get is a major boost.
We are very excited in the Yorkshire dales and in all parts of my constituency because in less than a year the Government-backed Tour de France will be on its way. I hope that the Minister may come and participate; I know that she is very into her sport. That event, which this Westminster-based, Conservative-led Government have backed, will be a major boost for Yorkshire—one of the most rural parts of our country. This policy will help businesses to try to make sure that they are taking advantage of this great sporting event.
We have talked about how this policy contrasts with the policies of the Labour party. Most of my colleagues in the Chamber have set up and run businesses, and we probably all agree that at the start of the previous Government’s time in office the messages were quite good. There were things such as taper relief to encourage entrepreneurs and talk of deregulation tsars, and it all looked as though it was moving in the right direction, but it tailed off pretty quickly. As well as pledging at the last election to raise the jobs tax, which the Federation of Small Businesses said would cost about 57,000 jobs in the UK, they raised the 50p tax rate—one of the so-called elephant traps set by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) to try to trap the next Government. Six regulations were added to the statute book per week. There were regular, astronomical rises in fuel duty, which in a constituency such as Skipton and Ripon had a major impact on businesses and families. Somebody may correct me, but I understand that not one debate about exports took place in this House under the previous Labour Government.
David Rutley
My hon. Friend is making a characteristically impassioned speech on behalf of small businesses and enterprises, which will thrive on the back of this Bill not only in North Yorkshire but in Cheshire and across the country. Will he remind the House of what steps the previous Government took to tackle the amount of regulation that was coming in from the EU at the time? I cannot remember them doing too much in that direction either.
Julian Smith
My hon. Friend makes a characteristically good point. I seem to remember that they signed up to more treaties and more red tape from Brussels. Only now have the Prime Minister and members of the current Government set up a deregulation unit to look at EU regulation, and I hope that we will all encourage them to do more. Any claim that Labour is the party of small business is a very hollow one.
The reason for my excitement about this policy is that it is one of a very large number of policies to back the risk-taker and the entrepreneur—the person who is ready to spend all night worrying about the new employee and ready to risk their capital. A few weeks ago, I went to Downing street with a number of right hon. and hon. Friends, and I met the most inspiring young people who were beneficiaries of the start-up loan scheme and the new enterprise allowance scheme. Downing street was packed with budding entrepreneurs who were benefiting from this Government’s policy. That policy is one of many, including taking out two regulations before one regulation is brought in; ensuring that 25% of all procurement goes to small businesses; taking away pre-qualification questionnaires; increasing the annual investment allowance from £25,000 to £250,000; cutting corporation tax; investing in apprenticeships; creating 27,000 business mentors; and introducing the regional growth fund and the local enterprise partnerships. There is an endless list of policies that this Government have put in place to back the entrepreneur.
That is not to say that we are perfect. The Government have a very strong record, but I would pose them a few questions. We are doing so many good things that we often fail to communicate them in as coherent and focused a way as possible and in a way that is easiest for small businesses. I encourage the Minister, who is coming turbo-charged into her new job, to consider the role of HMRC. The Government communicate more through HMRC than any other arm of Government. How can we use it better to signpost, particularly to small businesses and micro-businesses, the good things that this Government are doing?
How can we cut bureaucracy? We have heard about the bureaucracy involved in the national insurance holiday. How can we make sure that any red tape involved in this new policy is reduced as much as possible?
I urge the Government and my party to start differentiating ourselves not just from the Labour party, but from our coalition partners, with a small business Bill to show that we need to do even more to take small businesses out of the regulation quagmire they find themselves in. I remember sitting through the debate on the Government’s employment changes—colleagues have already discussed them—which were very simple and straightforward. Employers will have two years before they have to decide whether they want to keep an employee. Settlement agreements will at least allow an employer to offer an employee a deal when things are not working out. There will also be tribunal charges, not for people who cannot afford it—before Opposition Members intervene—but for most employees, who will have to pay a fee before taking an employer to tribunal. All of those really good changes—every single one of them—were opposed by the Labour party. It is heartening that, despite Labour’s rhetoric, it looks as though its Members are going to back this Bill, not by voting in favour of it, but by not opposing it.
I pay tribute to the Treasury, the Exchequer Secretary, who started this debate, the Chancellor and the Conservative Ministers at the Department for Business, Innovation and Skills, who are pushing ahead with enterprise reform. This Bill is a major step towards sealing the Conservative party’s record on backing those people in our society who want to take a risk and run a business.
David Rutley (Macclesfield) (Con)
It is an honour and a privilege to follow the impassioned speech of my hon. Friend the Member for Skipton and Ripon (Julian Smith).
I was fortunate enough to secure an Adjournment debate last week. The good news was that it was on the subject of supporting first-time employers, but the bad news was that I secured the 2.30 pm on a Friday afternoon slot, which is not always prime time in Parliament. I am therefore pleased to be able to return to the subject and debate it further in the presence of a few other colleagues.
The good news is that over the past decade the number of people who work for themselves has increased to 4.2 million, or 14% of all those in employment—up from 12% at the start of the century. They are taking the chance to be their own boss and often embracing new technologies to enable that. Record numbers of people are working for themselves. As I have said, that is good news, but it would be even better if more of the self-employed, one-person businesses and sole traders took the step from being first-time entrepreneurs to being first-time employers. That is why I support the new employment allowance: it is a huge step forward.
Entrepreneurialism is a culture that spreads. Once a person is in it, they live it. They go native, as they say, and embrace risk-taking. Significantly, entrepreneurs are more likely than established businesses to take on workers from the ranks of the unemployed or the non-active, who often find the formalised application processes, let alone the working practices, of large firms restrictive. Established companies may tend to value the ability to adhere to existing processes and systems above the creativity, dynamism and individual flair that smaller businesses help to stimulate. Doing more to encourage the smallest firms to take on staff, particularly a first member of staff, has to be a step in the right direction.
Despite siren warnings from the unions and others that self-employed jobs are not proper jobs, there is clear evidence that the self-employed and those employed by them in the smallest companies enjoy better industrial relations. Data from the most recent workplace employment relations survey suggest that 67% of employees in the small and medium-sized enterprise sector strongly agree that managers treat them fairly, compared with 53% of those who work in large firms.
Furthermore, a survey by the TUC, no less, and YouGov has shown that a greater proportion of employees in small firms report the highest levels of job satisfaction, compared with employees in larger firms. However, as my hon. Friend the Member for Skipton and Ripon has said, there is still a tendency in Whitehall to prefer to deal with larger companies and to underestimate the burdens on the smallest businesses when introducing uniform regulations. The new employment allowance, however, shows that this Government understand the importance of measures that, though uniform, are of greatest benefit to the smallest operators, and that is why they should be commended.
Bob Stewart
I endorse my hon. Friend’s last point. It is clear that if the boss of a business works closely with his first employee, industrial relations should be excellent and there should be no problems. That is the reason for the 67% satisfaction rate.
David Rutley
My hon. Friend makes an important point. That is absolutely the case. This is about how we build good working relationships and a strong economic base through SMEs. That is far more sustainable than the approach adopted by the previous Government, which seemed to be underpinned by more and more public spending. That is completely unsustainable.
What a boost it will be for more of the growing army of the self-employed to become small employers. Indeed, if they all, or a vast proportion of them, took on one employee, that would make a huge dent—even bigger than the current one—in the unemployment figures. The number of self-employed people with no employees has increased, but the number of self-employed people with a small number of employees has not kept pace, and that is what the Bill seeks to address. In the past, the focus has been more on encouraging people to start up a business and less on taking the next step to becoming micro-employers. The Bill is an opportunity to further liberate the self-employed from barriers to growth and to nudge first-time entrepreneurs into becoming first-time employers. The prize is stronger, more sustainable economic growth.
Micro-businesses play an important role in Macclesfield, working in forums like Make it Macclesfield and the Poynton business forum. They make a huge contribution to strengthening the community and, at the same time, moving our economy forward by creating jobs.
Surveys and statistics abound to show that small businesses can be, and often are, job-creation machines. They also show that small businesses are more likely to employ the longer-term unemployed and those who may struggle to enter the job market as a result of a lack of formal qualifications or, indeed, their ethnic background. This is what the Federation of Small Businesses calls the “entrepreneurial pipeline” to what Professor Mark Hart calls “growth gazelles”. We need to encourage more growth gazelles. Essentially, this is about everyday entrepreneurs, street-level small businesses and office-share operators giving people a chance to work. Analysis by the FSB suggests that 74% of those who become self-employed and who have employees come from the self-employed who had no employee, and that a further 13% come from employees who had been working in micro-businesses. Clearly, there will be a multiplier effect once we get this right and start moving in the right direction.
The Government are absolutely right to introduce the new employment allowance. Slashing the cost of national insurance and taking many employees out of it completely will encourage more of the self-employed to become employers. However, this is not—and nor should it be—the only measure to increase the number of first-time employers. The Bill must be viewed in concert with the new enterprise allowance—for which Levi Roots is an ambassador for the Government—which seeks to encourage the longer-term unemployed into self-employment. The three-year moratorium on new regulations for small businesses is another important step in the right direction. I encourage Ministers at the Department for Business, Innovation and Skills to view it as a rolling moratorium.
Julian Smith
I thank my hon. Friend for giving way in his excellent speech. Does he agree that one of the most depressing things about the lack of Labour Members present is that, to make those schemes truly work, we all need to push them, whatever our political viewpoint, in order to ensure that those who are taking the risks hear about them and understand them?
David Rutley
Absolutely; there is a responsibility on all Members to do that. It is disappointing how few Opposition Members are present, and what they have said has been negative, rather than focused on the opportunities that are available.
As Lord Young of Graffham has rightly argued, there are regulatory issues that we must deal with. The employment allowance will simplify the system for small businesses. We must also tackle the problems with culture and communication. Through careers advice in schools, we must help young people to realise that there are huge opportunities in small businesses. If people are familiar with SMEs and particularly micro-businesses early in their careers, they are more likely to stick with them and to take the step of setting up small businesses themselves.
There is certainly no lack of ambition. The Prince’s Trust has found that up to 30% of young people expect to be self-employed, and a YouGov poll has found that 43% of young people have made money through entrepreneurial activities, like selling their own products or working on a freelance basis. We must help them to achieve their ambitions. The Bill means that their aspirations will not just be pipe dreams. It is a can-do Bill for a can-do generation and it deserves our support.
Those who seek to regulate businesses or to complicate the tax system should recognise the consequences of doing so. Whitehall communications must take notice of business-to-business communications so that those communications can be strengthened. My hon. Friend the Member for Skipton and Ripon highlighted the importance of the work of HMRC on communicating more effectively. I would add to that the work of Directgov.
As Lord Young says, it is vital that the psychological barriers are broken down so that they do not stifle the ambition that is latent in the marketplace. If we are to create an aspiration nation, the road to running one’s own business must be a clearly signposted fast lane, not the last Labour Government’s minefield of forms, box ticking and regulations. Their approach reminded me of a sign that I saw once to a business park, which said, “Enterprise Way—Cul-de-sac”. We have to have a different perspective and that is what this Government are seeking to achieve.
In small firms, there is often less formality, more fluidity and greater flexibility. What we need, and what we now have, is a simple tax allowance that everybody can understand. That will create more jobs and more first-time employers. It is vital that the Government communicate the scheme creatively. I also say to the Minister that we must not listen to what is said by the Opposition. The idea that we have listened to them in designing the scheme is fanciful. After the deficit and flawed forecasts that they gave us, the chances of our listening to them are somewhere between no hope and Bob Hope. Their jobs tax, on top of the record deficit, would have been devastating for the economy.
In conclusion, I am delighted that the Government are champions of first-time entrepreneurs. I believe that the Bill will help us to encourage more of them to become first-time employers. I give the Bill my full support.
Damian Collins (Folkestone and Hythe) (Con)
I will say a few words in support of the Bill. Like all Government Members, I believe that this is an excellent measure that recognises that it is businesses of all sizes that create jobs in this country. People are now finding jobs in growing numbers. By reducing taxes on employment, we will make it more likely that businesses will employ more people. The strength of the recovery in the private sector underlines the growth in the economy as a whole. The Labour party predicted that growth would not come and that jobs would not be created. By reducing the cost of national insurance to employers, the Government are in this Bill taking another excellent step in the right direction.
I agree with the Exchequer Secretary that we should look at the Bill as one of a range of important measures that the Government are introducing to support the business community, and all those measures support each other. My hon. Friend the Member for Skipton and Ripon (Julian Smith) spoke of meeting young people under the age of 30 who had received StartUp loans from the Government to invest in starting their own businesses, which have had a great deal of success. The Bill will help businesses like those to get to the next stage on the path to growth and to go from being a start-up to employing a small number of people. There is an enormous appetite among people in this country to have a go at starting their own business. That is one of the most positive things to come out of the recession. We need policies that work with the grain of people’s entrepreneurial instincts and back them as they back themselves.
Bob Stewart
I have listened carefully to this debate. I have never run a small business; I have run a medium-sized business, but it was not my own. Would it not be a tremendous fillip to small businesses if HMRC was slightly more proactive when it saw a business making a clear mistake, and wrote to it saying, “It would be better if you did it this way”?
Damian Collins
My hon. Friend makes an important point. The quality of the advice to businesses from all quarters is important. That echoes a point made by my hon. Friend the Member for Skipton and Ripon, who said that we all need to advocate the Government’s policies to ensure that businesses benefit from them.
Julian Smith
I pay tribute to the work that my hon. Friend has done within our party for a number of years to encourage entrepreneurs. It has been a most successful scheme. May I ask him for his reflections on that scheme? We have talked about the StartUp loans scheme and the new enterprise allowance, but he probably has the most experience of any Conservative Member of the competitive encouragement of small businesses.
Damian Collins
It is very kind of my hon. Friend to make those remarks. The start-up hub competition at the Conservative party conference has given small businesses an opportunity. That has been a good way to ensure that those businesses are plugged into the decision makers and people with influence in their local communities, and to ensure that they are benefiting from the breadth of schemes that the Government have to offer. We have run the competition for three years.
At this year’s party conference, I was pleased to meet Neill Ricketts of Versarien, which employs groundbreaking technology to improve the cooling systems that are used in the mainframes of computers and data storage systems. That business, which started within the lifetime of this Parliament, is going from strength to strength. It was floated on the alternative investment market this year, employs a large number of people and is growing fast.
There is a business in my constituency that was started by a group of young men. The managing director is only just 30 years old. The business specialises in search engine optimisation and social marketing campaigns. It employs more than 20 people and is growing rapidly. It has developed a way of specialising its techniques for small local businesses so that it can design social media and search engine optimisation campaigns to help businesses on the high street to grow.
People are using their knowledge and expertise to develop innovative businesses and to demonstrate that there is a market for them that has not been realised. People are developing cutting-edge technologies and products that will be exportable and that will help businesses to develop and grow.
One business that succeeded through the start-up hub competition was started by Julian Hakes, who redesigned the high-heeled shoe. He is an architect and he applied the principles of architecture to a fashion item. This year, his product was given the accessory of the year award by Vogue. It went viral on the internet and he has export orders from around the world. That was all based on a good idea that he was able to take to market. Credit is also due to two good trade bodies, the British Fashion Council and the UK Fashion and Textile Association, which supported him in the development of his business.
There are some brilliant people who are doing great things. We need to get behind them and support them. We have good schemes that can do that. My hon. Friend the Member for Skipton and Ripon made a good point about our advocating those schemes and ensuring that people are aware of them. At Tech City in east London, one hears people talking enthusiastically about the enterprise investment schemes that are available. When we meet politicians from Germany, as my hon. Friend has done, we find that they are interested in the way that we use enterprise investment schemes to encourage private investors to invest in start-up businesses. However, I wonder whether our own chambers of commerce and people around the country know enough about the schemes that are available and that they could benefit from. We all have an important role to play in advocating the Government schemes that are there to help people get their businesses to the next stage.
That support sits alongside a strong regional growth policy that is being delivered through the regional growth fund. In east Kent in my constituency, the regional growth fund has granted a third of the money that has been awarded. Tens of millions of pounds are being spent and invested by businesses. People are being employed on the back of that investment.
H. V. Wooding in Hythe, which was visited by the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), is investing in a new plant and machinery to expand its production capabilities. It is a precision engineering company that makes parts for the Hadron Collider at CERN, and it makes busbars that are used across a wide range of industry and machine parts for Formula 1 engines. It is bidding for contracts that have gone overseas in the past decade, to bring them back to this country because it can compete in that sector. It is benefiting from regional growth fund money, which is helping it take its business to the next level, and it is employing people now.
One reason why unemployment is falling much faster than predicted is that the schemes to benefit smaller businesses are helping them grow and employ more people, and we are seeing the knock-on effect. It is not only bigger businesses that are doing well and competing, but smaller ones too. The challenge we should set ourselves is: “Do we have a strong and robust investment culture? Is this a country that people around the world want to invest in?” Increasingly, we are seeing that it is. People are investing in this country because of low levels of corporation tax compared with our competitors in Europe and America. That is why people are bringing investment from all over the world to this country.
Not only are smaller businesses investing in themselves, but the investment community is investing in them through crowdsource funding and companies like Funding Circle. People can match fund some of the Government schemes to help businesses get the finance they need, and that is an important part of the growth of our economy. In the ’80s, thanks to privatisation we were seen as a nation of shareholders. In the next decade, could we be a nation of shareholder and start-up businesses where people take advantage of available schemes to invest in start-up and smaller businesses in their areas? We should set ourselves that challenge.
Finally, we should not lose sight of the big projects that the Government must back, including those that will not benefit us directly in this Parliament but are important for the next 10 to 20 years—major infrastructure projects like high-speed rail or investment in electricity power generation. Such projects are vital for our future competitiveness. We have sometimes looked at other countries and seen how their infrastructure has helped them to compete. We have the tax and investment policies, ideas and people to compete, but we must ensure that we invest now in the big infrastructure projects we need to help those people grow in future. I commend those projects that I have touched on in my remarks, as well as the Bill which, as my hon. Friend the Exchequer Secretary said, is an important part of the range of measures that the Government have put in place to support entrepreneurship in this country.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I believe this is my first opportunity to congratulate you, Madam Deputy Speaker, on your new role. We have had a good and wide-ranging Second Reading debate on the Bill, and my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood), my new colleague in the shadow Treasury team, made an excellent opening contribution from the Opposition Front Bench. I extend my welcome to the Minister. We have already exchanged pleasantries in a Committee, but I reiterate them now in the Chamber.
Julian Smith
As well as exchanging pleasantries and niceties, will the hon. Lady commit now to backing the Government’s policies and give actual support?
Catherine McKinnell
It is interesting that the hon. Gentleman raises that point, because the Opposition will set out clearly that we very much support and welcome this measure. It is something we have been proposing for the past three years, so we greatly welcome its introduction through the Bill.
We have had a wide-ranging debate. We have touched on the living wage, the economy, employment, unemployment, self-employment—many forms of employment. We have strayed far from the core subject and, I think, strained the patience of the Deputy Speakers in the Chair today. At times, we have been on a magical history tour in which the history of this country and its economy has not only been airbrushed, but at times rewritten. In my concluding remarks, I hope to bring back a bit of realism to the discussion. I know that the hon. Member for Skipton and Ripon (Julian Smith) finds that somewhat depressing, but I am going to do it anyway.
I am disappointed that the Exchequer Secretary is not in his place for the winding-up speeches, as it is important to take a little step back in time and recall how the Bill was introduced. Until recently he was my opposite number, and it would have been good to have him in his usual place. The hon. Gentleman has the dubious privilege of being one of an ever-diminishing number of junior coalition Ministers who have been in the same job since 2010. He therefore finds himself in an unfortunate position because we can measure the ambitions that he set out for supporting small businesses and job creation against his actual record of delivery in government.
As we have heard, although this was not included in the draft Bill published on 16 July, the main purpose of the National Insurance Contributions Bill is to implement the employment allowance announced by the Chancellor in the Budget 2013. Given the apparent importance of the policy—which accounts for clauses 1 to 8 of this short Bill—perhaps when she concludes the Minister will say why the employment allowance was not mentioned in the draft legislation. It would be useful to clarify that.
As my hon. Friend the Member for Birmingham, Ladywood made clear in her excellent opening speech, the Opposition support the introduction of this measure and this Bill. It might be painful for the Exchequer Secretary—although he is not here to pained—but it could be helpful to cast our minds back to why we support this Bill. Let us think back to 2011 and the similarly entitled National Insurance Contributions Bill of that year.
Richard Fuller
Before the hon. Lady casts our minds back to 2011, may I ask her the question I asked her hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood)? In 2010 she stood on a manifesto that planned to increase the jobs tax. People want politicians who are honest, so will the hon. Lady say that that was a mistake?
Catherine McKinnell
I will repeat the words of my hon. Friend, who said that she was proud to stand in 2010 on a manifesto for a Labour Government who were committed to reducing the deficit but had an economy that was growing. Since then we have seen three years of stagnating growth, wages rising slower than prices, and borrowing not coming down anywhere near the amount the Government promised. I would caution Government Members against trying to rewrite in this Chamber the history of what they have achieved over the past three years.
On that point, let us return to 2011. The Bill taken through this House by the Exchequer Secretary—I welcome him back to his seat—included the introduction of the three-year national insurance holiday, worth £5,000 for employers. The scheme, which was originally announced at the Chancellor’s first Budget in June 2010, was not aimed at supporting just any employers, however, because it was restricted. It did not apply to businesses in London and the south-east or east of England, as we mentioned earlier, and it extended only to new business start-ups, and then only to the first 10 employees of those firms—but, of course, only to those first 10 employees who had been hired in the first year of that business. I hope hon. Members are still with me. [Interruption.] I am sure the Minister is still with me as he designed the dubious policy.
Indeed, serious concerns about the scheme’s complexity were raised at the time by Robert Chote—then at the Institute for Fiscal Studies; now at the Office for Budget Responsibility—who told the Treasury Committee that the policy
“might be a little too complicated to offer best value for money.”
Julian Smith
Was the context at the time that the Labour party had left the nation’s finances in the most appalling mess, and that for any incoming Government not to target a policy carefully would have been crazy? According to the Government auditor, three Government Departments had lost complete control of their finances.
Catherine McKinnell
Once again, Government Members want to airbrush the past three years of stagnation, lack of economic growth and the failure of the Government’s implementation of that policy. They failed to address the issue quickly enough, so only today are we finally introducing a policy that will help and that will give that support to small businesses. Unfortunately, it is a little too late in the day for some businesses, which have suffered over the last three years, and for the people who have lost their jobs as a result.
David Rutley
In the spirit of not wanting to airbrush, will the hon. Lady tell the House how she thinks the jobs tax would have helped her much-cherished goal of encouraging economic growth?
Catherine McKinnell
Coalition Back Benchers want to forget what the Government have done and the past three years of the policy we are debating. They want to debate a policy that never came into play.
None the less, despite the restrictive and complex nature of the previous scheme, the Exchequer Secretary and his Treasury colleagues had bold ambitions for it. He acknowledged from the Dispatch Box that some 400,000 new businesses would benefit from the scheme, with each successful applicant creating an average of two jobs. At that rate, the scheme would have created 800,000 new jobs, with a total cost to the Exchequer of £940 million over its three-year lifespan.
Given that the scheme, which was one of the Chancellor’s flagship policies, drew to a close in September, one might have assumed that the Exchequer Secretary would want to promote the outcome. Sadly, he cannot do so—sadly for the businesses that failed to benefit. Only through a written answer obtained by my hon. Friend the Member for Nottingham East (Chris Leslie), the shadow Chief Secretary to the Treasury, did we learn that a grand total of some 25,400 businesses successfully applied for the scheme over the three-year period. That is undeniably a sizeable number, and the creation of any new jobs in the past three years, during a period of economic stagnation, is welcome; but with only 6% of the target reached, the Exchequer Secretary has had to acknowledge that, as flagship policies for economic growth go, that one has been a bit of a flop.
When the previous scheme was introduced, the Opposition called for there to be no regional restrictions on it, for it to be extended to charities, and for a review of its effectiveness after six months. Those proposals were rejected. The Government ploughed on with a scheme that obviously was not delivering the goods throughout its operation. That was why, as long ago as September 2011, my right hon. Friend the Member for Morley and Outwood (Ed Balls), the shadow Chancellor, called for a one-year national insurance break for every small firm that took on extra workers, using the money left over from that failing Government policy—it was clear that it was failing even in September 2011.
The Government are now introducing the employment allowance. It is not regionally restricted and will apply to charities as well as businesses, and it will apply whether or not they are start-ups. It should be easier for firms to access it because it will be delivered by the standard payroll software and Her Majesty’s Revenue and Customs real-time information system, as the Exchequer Secretary said in his opening comments. The question is this: why did it take so long? Given that the scheme will not be available until April 2014, we have had nearly four wasted years when the Chancellor could have helped the thousands of small businesses about which Government Members have spoken so passionately to expand and create jobs.
Margot James
This might be a foreign notion to Labour Members, but one reason why it has taken three years to propose the Bill is that the Government have waited until the country can afford it and put the finances right in the meantime.
Catherine McKinnell
The budget for the policy in the Bill was there, but the Government introduced a failing policy that was badly delivered, badly thought through and not revised in the appropriate time frame. Given the Government’s record on delivering the previous national insurance contributions initiative, what reassurances can the Minister provide that they are on top of delivering this one?
Julian Smith
Will the hon. Lady confirm that, having supported the Bill, she will call on all Labour MPs to promote the Bill vigorously and dynamically in their constituencies? Will she make that commitment?
Catherine McKinnell
The Opposition support the legislation and it will pass unopposed this evening. It is rightly up to the Government to promote their support for small businesses. As Government Members have said, HMRC should take a proactive role in ensuring that businesses are aware of schemes that are available to support them.
Clauses 11 to 20 relate to the certification scheme for oil and gas workers on the continental shelf, limited liability partnerships and several miscellaneous measures, but I want to focus briefly on clauses 9 and 10, which seek to extend the application of the general anti-abuse rule to national insurance contributions. The GAAR, which came into force on Royal Assent of the Finance Act 2013, incorporates income tax, corporation tax, capital gains tax, inheritance tax, petroleum revenue tax, stamp duty, land tax and the new annual tax on enveloped dwellings.
A number of Opposition Members raised the concern that the GAAR is intended to prevent only “highly contrived tax avoidance” that has “abnormal features”. The man who designed the GAAR, Graham Aaronson QC, believes that it is
“clearly intended to apply only to egregious, or very aggressive, tax avoidance schemes”.
What deterrent effect is such a narrowly drafted GAAR expected to have? As the Government’s flagship policy for tackling tax avoidance, what dent will the GAAR make on the tax gap, which HMRC says is £32.2 billion a year?
During the debate on the 2013 Act, I pointed out that the GAAR is expected to yield £60 million in 2014-15, rising to £85 million by 2017-18. I am more than willing to acknowledge that those are sizeable sums, but the point made in the House back in April was that it represented a drop in the ocean compared with the then tax gap of £32.2 billion.
What has changed since? HMRC’s latest tax gap estimate, of the difference between what is collected and what would be collected if everyone complied with the letter and spirit of the law, concluded that it has increased to £35 billion, a staggering 8.7% increase in the space of 12 months. I accept that many dispute the figure and say it is too low—that it does not include much of what could be incorporated in the figure for tax avoided.
The latest HMRC estimate, which covers 2011-12, indicates that some £15.3 billion of the gap can be accounted for by unpaid income tax, capital gains tax and NICs combined. HMRC suggests that approximately £4 billion of the gap arises out of avoidance “behaviour”. Will the Minister therefore clarify exactly how much of the £35 billion tax gap is thought to be made up of NICs that are unpaid through avoidance? Given that the Bill deals with only the most aggressive or egregious avoidance activity, how much will extending the GAAR to NICs yield for the Exchequer in additional revenue?
The Opposition have raised many other concerns about the GAAR—my hon. Friend the Member for Birmingham, Ladywood mentioned the Swiss deal and the number of holes in that arrangement, which leave a hole in the Government’s estimates. However, there is also the highly subjective double reasonableness test, which can be used to determine whether a means of avoiding a tax can
“reasonably be regarded as a reasonable course of action”.
That subjectivity is helpfully explained in the GAAR guidance, which states:
“The words ‘contrived’ and ‘abnormal’ are not defined, and therefore will be applied in their normal sense”.
We have long argued that that is a fig leaf, or could be used as a fig leaf, for tacitly legitimising tax avoidance that does not fall within those definitions. We tabled amendments to ensure that the GAAR would be reviewed, and to assess its effectiveness.
Most critically, we have questioned the independence of the advisory panel established by the Treasury to oversee the GAAR. At the time, I said:
“What a tax expert considers to be reasonable might be regarded differently in the eyes of a member of the public. Indeed, many tax experts will differ on what they believe to be reasonable tax planning, as opposed to something egregious that would fall under the GAAR.”—[Official Report, 17 April 2013; Vol. 561, c. 425-426.]
What has changed since April? A matter of weeks after being hand-picked to deliberate on the Government’s flagship anti-avoidance policy, one panel member was caught on camera at a tax planning conference offering tips to people on how to keep their money
“out of the Chancellor’s grubby mitts”.
HMRC’s website simply tells us:
“David Heaton resigned from the Advisory Panel on 13 September 2013. Arrangements are being put in place to appoint a successor.”
It would be helpful to hear from the Minister exactly what those arrangements are, when she expects the appointment to be made and, most importantly, how she and her ministerial colleagues will ensure that this never happens again. If the GAAR is to retain or, indeed, regain any shred of credibility, what are the Government going to do about that?
As we have said, we back the Bill, especially the main provision—the employment allowance. We repeatedly called for changes to the previous national insurance holiday scheme and we consistently warned that it would be a flop. Many of the changes we called for will be introduced in the employment allowance, but it is disappointing that for hundreds of thousands of small businesses it has taken almost four years to deliver the policy that they need. They deserve better, but the Bill is a small step in the right direction today.
The Economic Secretary to the Treasury (Nicky Morgan)
This has been a wide-ranging debate and I am grateful to have heard all the thoughtful contributions that have been made. It is noticeable that we heard seven contributions from this side, but only one from Opposition Back Benchers—[Interruption.] I welcome the Opposition’s support for the Bill, but as the shadow Minister said, the Bill is wide ranging, and Opposition Members could have talked about businesses, employment and the living wage. They have not taken the opportunity to do so and clearly had nothing to say about the Bill.
Before I respond to the points raised by hon. Members, it is worth reiterating the four key points of the Bill. First, from next April, all businesses, charities and community amateur sports clubs will benefit. They will receive a £2,000 employment allowance every year to set against their employer national insurance contributions liability. This is a measure specifically set out to support jobs. If I run a small firm employing four members of staff on the average private sector wage, I would see my national insurance contributions bill cut by more than a fifth. If I start a brand-new business and want to give up to 10 18 to 20-year-olds their first chance of full-time employment, paying the minimum wage, I would pay no national insurance contributions at all.
We have previously had time-limited allowances targeted at some businesses, but this is a universal allowance that will help all businesses. It is easy to understand and administer and, most importantly, it will make it easier for businesses in all our constituencies to create jobs. I am sure that that is something that all hon. Members want to see.
Secondly, as well as making it easier for employers to take on staff, the Bill will make it harder for companies to avoid taxes. It will give effect to the general anti-abuse rule, or GAAR, for NICs. As such, it is indicative of the Government’s intention to take a robust line in tackling all forms of tax avoidance. Thirdly, it will allow the Treasury to make regulations to bring in a certification scheme for the oil and gas industry when someone other than the deemed employer for national insurance is undertaking those duties on their behalf. This is part of the Government’s wider measure to address schemes involving employers setting up outside the UK and providing workers to the UK in order to avoid paying employment taxes.
Finally, the Bill will make changes to tackle disguised employment and to address the tax issue arising from the UK implementation of the alternative investment fund managers directive, which the Exchequer Secretary described in some detail earlier. The importance of those last three measures should not be underestimated. With the associated tax changes they will contribute towards raising £265 million for the Exchequer in the 2014-15 tax year.
As I have said, we heard some excellent contributions to the debate. I am sorry to say that the Labour contributions did not extend to any great insight into the Labour party policy on support for businesses. First, Opposition Members tried to take credit for this Bill, if hon. Members can imagine such a thing. The shadow Chief Secretary said that we should say sorry. If sorry is the hardest word, we have never heard it from the Labour party, which left us—as my hon. Friend the Member for Macclesfield (David Rutley) said—with the legacy of a huge deficit and enormous debt that we are having to pay off. This Government are having to make the tough choices.
The hon. Member for Birmingham, Ladywood (Shabana Mahmood) was wrong about the Labour party’s national insurance contributions scheme, because it would have applied only to small businesses. Our scheme will apply to all businesses. She also said that administration of the previous scheme cost £12 million. In fact, the estimated administration costs from the start of the national insurance contributions scheme that finished in September were £770,000—nowhere near millions of pounds. There was tight control on its administration.
We will not take a history lesson from the Opposition about the regional national insurance contributions holiday. My hon. Friend the Exchequer Secretary made it clear at the start of the debate that this was a temporary, targeted measure that helped 26,000 businesses and created 90,000 jobs. That is 90,000 people who have employment as a result of that scheme. That is something that we should be proud of, while recognising that there is scope for a new scheme, and that is what the Bill will introduce.
On the GAAR, the Opposition had 13 years to introduce it, but they failed to do so. They can pick holes in the scheme as much as they want, but the point is that this Government have taken the tough decisions. The rule will act as a deterrent to those tempted to engage in abusive avoidance schemes. It will take time to bed in, and we will keep it under review.
In answer to the specific questions asked by the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), the GAAR is expected to raise some £235 million over the next five years and it will also protect revenue that would otherwise be lost. We are confident that the GAAR will change the avoidance landscape as its impact starts to be recognised. The hon. Lady also asked about the Bill not being published in draft, but she then said that we had taken a long time to get round to making the Bill happen. She cannot have it both ways, although that is a position the Labour party always likes to be in.
The employment allowance will be introduced from 6 April next year. If we had had time for formal consultation, it would have delayed the implementation date, which is something that none of us wants to see. However, I can tell the hon. Lady that HMRC has held discussions with various stakeholders over the summer on the detailed implementation of the employment allowance, and those discussions have helped to inform the design of the new system.
Catherine McKinnell
I thank the Minister for responding to some of the questions that I raised. She seems to be moving away from the subject of the GAAR, but I wonder if she could address the questions relating to the advisory panel and the member who was dismissed from it in disgrace. What will the Government do to ensure that that does not happen again and that the credibility of the GAAR advisory panel, which was dented by those events, is restored?
Nicky Morgan
Perhaps I should repeat my comments. This Government should get enormous credit for introducing a GAAR in the first place. The last Government had 13 years to introduce one and failed to do so. The important point about the panel is that it is independent. It was recommended by Graham Aaronson, and its members are independent from the Government. The gentleman in question has resigned. It is an important safeguard in the operation of the system that the panel’s independence is maintained.
I turn now to the excellent contributions from Back Benchers, especially on this side of the House. My hon. Friend the Member for Stourbridge (Margot James) talked about charities benefiting from the Bill. It is very welcome that they will benefit as they employ 800,000 people. She also talked about the huge step of taking on the responsibility for that first employee. She is absolutely right about that and I am sure that all hon. Members will wish the very best to the lady who is opening the new floristry business in my hon. Friend’s constituency.
My hon. Friend the Member for Redcar (Ian Swales) was right to say the Bill offers real help to small businesses, and that taking on the first employee and worrying about how to pay their national insurance puts firms off growing. This is an important measure to support the next step on the employment journey.
The hon. Member for Edinburgh East (Sheila Gilmore) found it strange that we were looking at the Labour party’s national insurance policy. First, her party wants to be the next Government, so it should not be a surprise that we scrutinise its policies. Secondly, we are still having to deal with the legacy of the previous Government. All the tough decisions we take are framed by having to deal with that legacy. I should, however, congratulate her on being the only Labour Back Bencher to speak in the debate. She asked whether the employment allowance would create jobs. The Federation of Small Businesses expects 29% of small businesses to use it to boost staff wages, 28% to use it to employ additional staff and 24% to use it to invest in resources—it is welcomed by business organisations. It is estimated that 90% of businesses that employ people will take up the employment allowance. I am sure the hon. Lady will welcome businesses in her constituency taking up the employment allowance.
My hon. Friend the Member for Bedford (Richard Fuller) asked whether tax credits had been factored into the system. We do not believe that tax credits have been factored into this calculation, but the Office for Budget Responsibility considers the net impact of all Government policies on the economy. This policy has been subject to that scrutiny and I am sure we can discuss any further questions he has. He made a thoughtful contribution on the price of labour and the affordability of the living wage. I am sure that that is something we want to consider further. He is right to say that the employment allowance is a small but important start along the road of getting more people into employment. He was right about the encouragement of welfare dependency by the previous Government. By 2010, nine out of 10 families with children were reliant on the state. We want to make work pay. For example, our policy of raising the income tax threshold is all about ensuring that work pays and that people keep more of their earnings so they can spend them in a way that is right for them and their families.
Sheila Gilmore
Will the Minister reflect on the fact that many households are worse off as a result of the Government’s policies on tax and tax credits? Many families are not seeing any benefit—quite the reverse.
Nicky Morgan
Of course the Government recognise that living standards are under pressure and that household budgets are being squeezed, but it is interesting that the Labour party’s calculations on household income and wages and earnings never factor in tax cuts. We are factoring in tax cuts and ensuring that people keep more of their own money.
My hon. Friend the Member for Gosport (Caroline Dinenage) made a characteristically excellent speech. She talked about the support the Bill will give by extending the employment allowance to small businesses and charities, and mentioned that she had been a small business owner herself. It is noticeable that many Government Members have run their own businesses. She rightly said that we want to make Britain business-friendly.
My hon. Friend the Member for Skipton and Ripon (Julian Smith), who also ran his own business before entering this House, did a sterling job in delivering his speech despite having lost a contact lens—none of us noticed. He made an important point about communicating with small businesses via Her Majesty’s Revenue and Customs, something I am sure Ministers will bear in mind. He also talked about making the employment allowance simple to administer. As my hon. Friend the Exchequer Secretary said in his opening remarks, the employment allowance will be delivered through employers’ standard payroll software and HMRC’s real-time information system. There will be no need for a separate application form or an annual return to report deductions. There will, I hope, be no extra forms, which is good news for small businesses.
Ian Swales
I warmly welcome that simplicity. Does the Minister regret, as I do, the previous Government’s practice of announcing measures that were so complicated that they then asked the Treasury to calculate the savings that would accrue from non-take-up?
Nicky Morgan
My hon. Friend’s intervention says it all. Government Members have run small businesses and know that we need to keep paperwork, in all its forms, as simple as possible. People who run businesses do not want to spend their evenings and weekends filling in forms. They want to spend that time growing their businesses and taking on their next employee.
Catherine McKinnell
The Minister is making a powerful argument, but it leads to the question: why did the Government introduce a national insurance holiday scheme in 2011 that was so complicated they could reach only 6% of the businesses it was targeted at?
Nicky Morgan
We heard earlier on that that was a time for a temporary target. We were dealing with the deficit and coping with the legacy left to us by the previous Government. We now have the opportunity to introduce a wider employment allowance. The hon. Lady should not try to teach us lessons about schemes, given the complexity of their scheme, which thankfully, they did not have the opportunity to introduce. How can the fact that 26,000 businesses have benefited and 90,000 jobs have been created be a failure?
Andrea Leadsom (South Northamptonshire) (Con)
Does my hon. Friend find it as amazing as I do that Opposition Members can only snipe at schemes that are clearly designed to appeal to existing small businesses and will incentivise the starting up of new small businesses, which is what our economy desperately needs?
Nicky Morgan
My hon. Friend is right: that is exactly what our economy needs. I have been at the Dispatch Box only a few times, but, sadly, I am not surprised to see the Opposition sniping. That is exactly what we expect. The parties on the Government Benches are about action and putting in place measures to help businesses to take on their next employee.
My hon. Friend the Member for Macclesfield talked about a culture of entrepreneurialism. I am glad that he had a slightly larger audience than the one he had on Friday, but his remarks have been heard and noted—he should have no fear on that score.
My hon. Friend the Member for Folkestone and Hythe (Damian Collins) made a thoughtful contribution, in which he spoke of the Government having put in place a package of measures to support businesses. He mentioned the regional growth fund, which is making a difference in our constituencies to businesses large and small, and the investment culture. Hon. Members rightly paid tribute to his work to support start-up businesses through all manner of schemes.
I am grateful to have had the opportunity to respond to most of the issues raised. The Bill will help to continue to support a stronger economy in the United Kingdom. It will make avoiding tax harder and make creating jobs easier. I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
NATIONAL INSURANCE CONTRIBUTIONS BILL (PROGRAMME)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the National Insurance Contributions Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 28 November 2013.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Anne Milton.)
Question agreed to.
NATIONAL INSURANCE CONTRIBUTIONS BILL (WAYS AND MEANS)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the National Insurance Contributions Bill, it is expedient to authorise—
(1) provision for, and in connection with, the application of the general anti-abuse rule in relation to national insurance contributions;
(2) the payment into the Consolidated Fund of any increase attributable to the Act in the sums payable into that Fund under any other Act.—(Anne Milton.)
Question agreed to.
Business without Debate
committees
Madam Deputy Speaker (Mrs Eleanor Laing)
With the leave of the House, we will take motions 5 to 17 together.
Ordered,
Backbench Business
That Jane Ellison be discharged from the Backbench Business Committee and Mr Mark Spencer be added.
Business, Innovation and Skills
That Julie Elliott be discharged from the Business, Innovation and Skills Committee and Mr William Bain be added.
Communities and Local Government
That Andy Sawford be discharged from the Communities and Local Government Committee and Chris Williamson be added.
Defence
That Penny Mordaunt be discharged from the Defence Committee and Mr James Gray be added.
Education
That Charlotte Leslie be discharged from the Education Committee and Mr Dominic Raab be added.
Energy and Climate Change
That Barry Gardiner be discharged from the Energy and Climate Change Committee and Graham Stringer be added.
Environment, Food and Rural Affairs
That George Eustice and Barry Gardiner be discharged from the Environment, Food and Rural Affairs Committee and Jim Fitzpatrick and Mr Mark Spencer be added.
Home Affairs
That Steve McCabe, Bridget Phillipson and Chris Ruane be discharged from the Home Affairs Committee and Ian Austin, Paul Flynn and Yasmin Qureshi be added.
International Development
That Richard Burden and Mark Pritchard be discharged from the International Development Committee and Sir Tony Cunningham be added.
Justice
That Mike Weatherley be discharged from the Justice Committee and Mr Christopher Chope be added.
Public Administration
That Charlie Elphicke be discharged from the Public Administration Committee and Mr Andrew Turner be added.
Transport
That Lucy Powell and Iain Stewart be discharged from the Transport Committee and Jim Fitzpatrick and Miss Chloe Smith be added.
Work and Pensions
That Jane Ellison and Mike Freer be discharged from the Work and Pensions Committee and Kwasi Kwarteng and Dame Angela Watkinson be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)
Petitions
Madam Deputy Speaker (Mrs Eleanor Laing)
Before I call the 31 petitions to be presented, I must explain to the House how we will deal with their large number. Once the first petition relating to the rural fair share campaign has been read to the House, with its prayer, subsequent petitions on the same topic should not be read out in full. Members should give a brief description of the number and location of the petitioners and state that the petition is “in the same terms”. Members presenting more than one petition should present them together.
When a Member has presented a petition, he or she should proceed to the Table and hand it to the Clerk, who will read its title and then hand it back to the Member. He or she should then proceed directly to the petitions bag at the back of the Chair. I will call the next Member immediately after the Clerk has read the title. At the expiry of half an hour, no further petitions may be presented orally, but they may be placed in the petition bag and will be recorded as formally presented. If all Members speak and move swiftly, all 31 petitions should be able to be presented and no one will be left out.
I call Mr Graham Stuart to present his petition.
Mr Graham Stuart (Beverley and Holderness) (Con)
Thank you, Madam Deputy Speaker. I also thank Mr Speaker for allowing so many of us to present our petitions this evening. In fact, 119 petitions have been returned from constituencies around the country. Usually, at the close of business, the House empties, but instead, this evening, it has filled up with colleagues who have come to send a strong call from the countryside, a cry from the heart of England. I am delighted to see that the Secretary of State and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), are present to hear from us tonight.
Contrary to the myth, rural residents earn less on average than people in cities and pay council tax that is £76 a head higher, yet they see urban areas receive 50% more per head, despite the obvious higher cost of delivering many services in a rural area. We are calling on the Government to make a change; all we ask for is a rural fair share.
The petition states:
The Petition of the residents of Beverley and Holderness,
Declares that the Petitioners believe that the Local Government Finance Settlement is unfair to rural communities; notes that the Rural Penalty sees urban areas receive 50% more support per head than rural areas despite higher costs in rural service delivery; and opposes the planned freezing of this inequity in the 2013–14 settlement for six years until 2020.
The Petitioners therefore request that the House of Commons urges the Government to reduce the Rural Penalty in staged steps by at least 10% by 2020.
And the Petitioners remain, etc.
[P001238]
Sir Nick Harvey (North Devon) (LD)
I rise to present a petition in the same terms on behalf of 1,671 of my constituents, who are heartily sickened by this injustice and believe that a 10% improvement by 2020 is the very least that could be done.
The Petition of the residents of North Devon.
[P001236]
Mr John Whittingdale (Maldon) (Con)
I congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on launching this excellent campaign. I am handing in a petition in the same terms as his on behalf of my constituents from the village of St Lawrence. However, they speak on behalf of all the residents of the Maldon district.
The Petition of the residents of Maldon.
[P001235]
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
I rise to support my hon. Friend the Member for Beverley and Holderness (Mr Stuart) and to hand in a petition in the same terms with 71 signatories from my constituency. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of Shrewsbury and Atcham.
[P001234]
Mr Brooks Newmark (Braintree) (Con)
I, too, am handing in a petition in the same terms for more than 200 signatories from my constituency. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of Braintree, Essex.
[P001233]
Sir Edward Garnier (Harborough) (Con)
I am also handing in a petition in the same terms as my hon. Friend the Member for Beverley and Holderness (Mr Stuart) from residents in my constituency.
The Petition of the residents of Harborough.
[P001239]
Roberta Blackman-Woods (City of Durham) (Lab)
I, too, am handing in a petition in the same terms for a number of signatories from my constituency. Although my constituency is the City of Durham, it has a large rural area and, critically, is part of Durham county council, a large rural authority that wants its rural fair share.
The Petition of the residents of City of Durham.
[P001240]
Sheryll Murray (South East Cornwall) (Con)
I present this petition on behalf of a very large number of my constituents in the same terms as my hon. Friend the Member for Beverley and Holderness (Mr Stuart).
The Petition of the residents of South East Cornwall.
[P001249]
Dr Liam Fox (North Somerset) (Con)
I am handing in a petition in the same terms for 435 signatories from my constituency and another petition also in the same terms on behalf of 812 signatories from the constituency of Weston-super-Mare in pursuit of natural justice for the rural parts of this kingdom.
The Petition of the residents of Weston-Super-Mare Constituency.
[P001247]
The Petition of the residents of North Somerset Constituency.
[P001248]
Stephen Phillips (Sleaford and North Hykeham) (Con)
I rise to hand in a petition in the same terms as that presented by my hon. Friend the Member for Beverley and Holderness (Mr Stuart) signed by 316 of my constituents and praying ever in the like terms.
The Petition of the residents of Sleaford and North Hykeham Parliamentary Constituency.
[P001246]
Jacob Rees-Mogg (North East Somerset) (Con)
The petitioners of North East Somerset echo Margaret Thatcher when she went to Europe and said, “We want our money back.” They want their rural fair share in the same terms as my hon. Friend the Member for Beverley and Holderness (Mr Stuart), and they present their petition with the greatest and humblest respects to the House.
The Petition of the residents of North East Somerset.
[P001244]
Andrea Leadsom (South Northamptonshire) (Con)
I am handing in a petition in the same terms as that of my hon. Friend the Member for Beverley and Holderness (Mr Stuart) for 551 signatories from my constituency, including representations from 29 villages.
The Petition of the residents of South Northamptonshire.
[P001243]
Damian Hinds (East Hampshire) (Con)
I, too, am handing in a petition in the same terms for a number of signatories from my constituency. The petitioners therefore request the House of Commons to urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the members of Liss Parish Council, Liss, Hampshire.
[P001242]
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
I am handing in a petition in the same terms from 1,953 petitioners in my constituency.
The Petition of the residents of the Bridgwater and West Somerset Constituency.
[P001250]
Annette Brooke (Mid Dorset and North Poole) (LD)
I am handing in a petition in the same terms from the Purbeck part of my constituency and other neighbouring Purbeck wards. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of Wareham, Dorset.
[P001251]
Miss Anne McIntosh (Thirsk and Malton) (Con)
It gives me great pleasure to petition the House on behalf of the residents of Thirsk and Malton. They believe that the local government finance settlement is unfair to rural communities, and note that the rural penalty sees urban areas receive 50% more support per head than rural areas, despite higher costs in rural service delivery. May it please the House to note that the Select Committee that I have the honour to chair has recently produced a report on this same issue, and that we have received a very disappointing Government response. I hope that we can link our report to these fair share petitions.
The Petition of the residents of Thirsk and Malton.
[P001252]
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I wish to present this important petition from my constituency, much of which comprises the most sparsely populated area of England. It suffers from being linked with a unitary authority and therefore has an even worse rural penalty in some of its rural areas. I draw these matters to the attention of the Secretary of State as I bring the petition to the attention of the House.
The Petition of the residents of Berwick-upon-Tweed constituency.
[P001255]
Dr Julian Lewis (New Forest East) (Con)
It is my pleasure to present a petition in the same terms as that presented by my hon. Friend the Member for Beverley and Holderness (Mr Stuart). It is signed by Mr Peter Osborne and other residents of the villages of Minstead, Lyndhurst, Bartley and Bramshaw in the New Forest East constituency, and it requests that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020.
The Petition of the residents of New Forest East Constituency.
[P001254]
Harriett Baldwin (West Worcestershire) (Con)
I am handing in a petition in the same terms for 128 signatories from the beautiful town of Pershore and the villages around Bredon Hill in my constituency.
The Petition of the residents of West Worcestershire.
[P001268]
Dr Sarah Wollaston (Totnes) (Con)
I am presenting a petition in the same terms on behalf of people from Loddiswell and Dartmouth in my constituency, who speak for my entire constituency in recognising that the cost of providing services in rural areas is far higher and that the settlement should be based on age as well as deprivation.
The Petition of the residents of Loddiswell.
[P001258]
Neil Parish (Tiverton and Honiton) (Con)
I present this petition on behalf of the villages and towns of my constituency. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020. It is delightful to see that the Secretary of State and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis) are here tonight to deal with the matter.
The Petition of the residents of Tiverton and Honiton.
[P001259]
Priti Patel (Witham) (Con)
I rise to present a petition in the same terms for a number of signatories from the wonderful village of Hatfield Peverel in my beautiful constituency.
The Petition of the residents of Witham, Hatfield Peverel Ward.
[P001261]
Mr Stephen O’Brien (Eddisbury) (Con)
I am presenting a petition in the same terms as that of my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on behalf of 490 residents of the Eddisbury constituency in Cheshire. I am totally confident that they represent the tens of thousands of rural and village residents in the Eddisbury parliamentary division.
The Petition of the residents of Eddisbury.
[P001263]
Sarah Newton (Truro and Falmouth) (Con)
I will be brief so that my remaining colleagues can present their petitions. I am handing in a petition, from a number of constituents in my very beautiful constituency of Truro and Falmouth, in the same terms as the one that has been so well presented by my colleagues.
The Petition of the residents of Truro and Falmouth.
[P001270]
Mr David Ruffley (Bury St Edmunds) (Con)
I am handing in this petition in the same terms for a considerable number of constituents from the great, historic constituency of Bury St Edmunds in the county of Suffolk. In particular, the signatories are from the villages around the two towns of Needham Market and Stowmarket. The petitioners therefore request that the House of Commons urge the Government to reduce the rural penalty in staged steps by at least 10% by 2020. May I add that I trust that Ministers will do a lot better than that?
The Petition of the residents of Bury St Edmunds.
[P001271]
Stephen Gilbert (St Austell and Newquay) (LD)
I am handing in a petition in the same terms as those of my hon. Friend the Member for Beverley and Holderness (Mr Stuart) and the 23 other right hon. and hon. Members who have presented their petitions tonight. My constituents, like those in the 119 constituencies that have had similar petitions submitted to the House, simply want a fair deal.
The Petition of the residents of St Austell and Newquay.
[P001266]
Patient Diagnostic Services
(11 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Barry Gardiner (Brent North) (Lab)
As it is the first time I have had the pleasure of speaking in the House since your election to the Chair, Madam Deputy Speaker, may I congratulate you and say how pleased I am to be speaking this evening under your guidance?
The doctors and consultants in Brent, like those in the rest of the country, are highly respected members of our community. Their work is part of the glue that keeps our society together and enables people to function and get on with their daily lives. Doctors, though, would be the first to admit that they are not omniscient—well, some of them would. Their work depends upon the work of many others in the health care sector—in particular, the work of laboratory and radiography technicians who provide the evidential base for diagnosis and treatment. The quality of patient outcomes will always depend on the quality of diagnostic services because a diagnosis delayed is a treatment delayed, and an incorrect diagnosis is potentially fatal.
This evening, I wish to detain the House and suggest to the Minister that the structural changes that his Government have introduced in the national health service have had a seriously adverse and dangerous impact on patient care.
In May 2012, the decision was made to outsource pathology services in Brent and Harrow. Previously, it had been provided by the NHS at a facility at Northwick Park hospital. The decision was taken because the hospital wanted to invest in improvements to the system. Rather than incur those financial costs, it was considered more efficient to outsource the contract to TDL Ltd—otherwise known as The Doctors Laboratory. That was a mistake.
The first indication that there was a problem came when a GP identified a serious technical flaw in the way patient test results were presented through the computerised system. The GP had received a list of multiple test results in respect of a patient. When looking at one set of results on the list and closing it or archiving it to the patient file, the GP realised that it was possible inadvertently to apply that same action to all the other test results returned on that list. Pathology results that required urgent action could be accidentally archived owing to an error in the TDL reporting system. Critical patient test results could be missed altogether or inappropriately actioned.
The GP reported that as a serious incident and immediately flagged up the issue to the North West London Hospitals NHS Trust, on the assumption that pathology services were still being carried out there. In fact, the service has been provided by TDL since May 2012. The hospital trust passed the concerns on to the Brent and Harrow clinical commissioning group, which was now responsible for managing the contract with TDL. At that time, the matter was not thoroughly investigated and was deemed to be a single incident and not a cause for concern.
However, GPs began to talk to each other about their concerns and realised very quickly that they were not alone in seeing a sudden change in the quality of results they were receiving from the service that had, up until 2012, been carried out adequately at Northwick Park hospital. At an emergency meeting with representatives of NHS Brent and Brent CCG, the GPs were led to believe that steps were being taken to resolve the matter.
The problem got worse. GPs across the borough were receiving many more abnormal results than they would ordinarily expect: test requests were ignored or the results were never reported back to them; other tests were being returned incomplete with only partial results and data omitted; and some samples were being incorrectly marked as complete and being discarded without being tested.
This alarming downward trend in the quality of the results finally prompted NHS Brent and NHS Harrow to launch a proper investigation, which commenced on 20 December 2012. Let me quote this root cause analysis investigation report, which finally reported in March of this year and found
“spurious results, missing results and samples not processed...reference ranges had changed and...the presentation of the results into groupings that did not make sense”.
One GP wrote to me to say:
“In the new year the scale of serious anomalies and problems had become so great that individual practices started to send out e-mails to each other to see if the problems were as isolated as we were being led to believe…The response was shocking. Our patients are at serious risk. Unless we have these basic services reliably we cannot diagnose and treat our patients.”
Keith Vaz (Leicester East) (Lab)
The situation in north London is clearly shocking. Does my hon. Friend know whether any of the tests that were outsourced relate specifically to diabetes, which is a huge problem for people who live in Brent? About 10% of the population is thought to suffer from diabetes.
Barry Gardiner
I am grateful to my right hon. Friend for his intervention, and he is absolutely right that diabetes is a major problem in the Brent area. Given that many of the tests related to phlebotomy, I would assume that some of them might have related to diabetes, but I do not have that specific information to hand.
I was explaining that GPs across the borough were receiving many more abnormal results than they would ordinarily expect, that the downward trend in the quality of the results had prompted an investigation and that the GPs had expressed their own concerns by exchanging information among themselves to ascertain the extent of the problem.
The interim deputy director of quality and safety for Brent, Ealing, Harrow and Hillingdon CCGs reported
“many incidents of patients attending for repeat blood tests at both the practice and within the hospital and some patients…referred to A&E Department because of high potassium levels.”
Many consultants began to experience similar problems with the service and were also having to carry out further unnecessary tests. One consultant, when pressed, scribbled a note setting out a variety of issues:
“Immunology—assay results; Calcium results—change in calculations; Change in reference ranges; Potassium—delays in transfer and refrigeration”.
I am sure the Minister will agree that such failings in service are wholly unacceptable.
The question then arises how any competent company of qualified health professionals could come to make such errors. After all, its website states that it is
“providing quality accredited pathology services to the UK and worldwide”.
I trust the Minister will be as surprised and as disappointed as I was to learn that, at the time the service was outsourced, TDL was
“not currently registered with Clinical Pathology Accreditation (UK) but is working towards this”.
The words “working towards this” should be accompanied by some degree of scepticism, given that the final report on the root causes of the problem identified that TDL was so incompetent that
“There was an operational issue with the new robotic sorter which resulted in a number of samples being filed incorrectly as ‘analysis complete’ and subsequently discarded. There was also a problem with one of the lines in the calcium analyser as a result of which samples were transferred to another laboratory, and a number of issues were attributed to human error.”
Compounding the confusion, when the service was transferred, TDL used different reference value ranges to assess and analyse results in order to fit in with its own IT systems. Unfortunately, it failed to communicate this change to the GPs or consultants who were now expected to interpret results that they did not understand, based on reference ranges with which they were not familiar. TDL was found to have not followed its own procedures, which required it to flag up to its service users when systems were changing. Owing to this transition, GPs and consultants were effectively left blind about the difficulties they might experience with pathology reports.
Of course, the quality of any test results will always depend on the quality of the samples received. Just as in the world of computing, “garbage in leads to garbage out”. One would imagine that when the decision was taken to outsource the pathology courier service that delivers samples to the pathology laboratory, clear and appropriate clinical advice was sought about precisely how this contract should be specified—and it was. In fact, GPs suggested that a courier service carrying samples for potassium tests must be refrigerated in order to avoid the impact of temperature change on the quality of the sample. However, the terms of the contract failed to specify that, and the eventual service that was commissioned did not provide for temperature control.
I have also received complaints about delays in delivery, as well as allegations that damage to samples in transit has made it difficult to record and analyse them properly. Indeed, the NHS Brent CCG noted in a report to the Brent health overview and scrutiny committee that issues of transportation quality and service delays on the part of the courier service, Revisecatch Ltd —trading as Courier Systems—
“appear to play a seasonal role in the variation of potassium levels; in that they add to the instability of the samples due to fluctuation in temperature during storage at the GP practice and/or during transportation to the laboratory in both summer and winter”.
Another privatised diagnostic service, the London NHS Diagnostic Service, is provided by InHealth. It is designed to enable London GPs to make direct referrals for their patients so that they have already had tests before being referred to specialist consultants. The tests might include ultrasound, echocardiography, audiology, cardiac physiology, magnetic resonance imaging, X-ray, endoscopy or phlebotomy scans. The intention was to reduce the CCG’s consultant costs by referring only patients who really needed their attention. In other words, GPs would filter patients to avoid unnecessary and costly referrals.
GPs have objected that that practice has simply introduced a middleman to the process, and that delaying a diagnosis from a specialist consultant may put patients in danger. I am told that the problem is compounded because the scans received from InHealth are often themselves delayed, and are frequently found to be of such poor quality that the patient must be referred to a specialist consultant in any event. My office has also been given anecdotal evidence that staff at diagnostic centres do not possess the necessary skills or understanding to handle complex diagnostic services.
General practitioners are not specialists. They are not consultants, and they are seeing scans which they cannot decipher or which are in a format that they cannot use. The patients are sent for another scan, or often are simply referred to the consultant whom they would have seen under the old system, who then usually orders a further scan at his or her own site. What started off as a way of saving money and freeing consultants to focus on clear cases of need becomes a bureaucratic process that puts patient outcomes at risk and costs more money as a result of duplication and delay. I should like to know from the Minister whether it is still the case that a patient has a statutory right to see a consultant, and whether a patient can insist on a direct referral from his or her GP without the interposition of additional diagnostic tests.
However, it is not just those diagnostic support services that are being privatised; front-line diagnostic services are being outsourced as well. I am, of course, referring to the NHS 111 service. The service was designed to ease pressures on accident and emergency departments by providing telephone-based triage, but many criticisms have already been made of it. Reference has been made to patients’ calls being answered by medically illiterate staff and to failure to meet targets to transfer calls to a clinician or nurse within 60 seconds or return them within 10 minutes, and there have been stories of patients simply being referred to A and E departments because call centre staff do not know what alternative facilities are available.
I do not wish simply to add to that catalogue of failings. My concern is more specific. In Brent and Harrow, we have an NHS 111 service that was awarded to Harmoni. That in itself was cause for some concern, as the company’s shareholders included the majority of the Harrow clinical commissioning group board that had decided to award it the contract. However, that is not the potential conflict of interest on which I wish to focus.
The urgent care centre at Central Middlesex hospital happens to be owned by Care UK, the company that also now owns Harmoni. Let me make clear that I am not accusing Care UK of encouraging its NHS 111 staff to make referrals to Central Middlesex in the knowledge that they will benefit from the treatment of any patients at the urgent treatment centre there, because I have no information to suggest that that is the case. Nevertheless, it is clear that there is a serious conflict of interest that any contract must monitor and guard against.
The interests of Care UK are clear, but its performance is not. I wrote to the Secretary of State for Health asking how the service in Brent had performed relative to the service specification. I asked,
“how many calls have not been (a) answered, (b) referred to a clinician or trained nurse within the appropriate timescale or (c) in receipt of a call-back from an appropriate clinician within 10 minutes”.
I received the following response:
“Local commissioners are responsible for performance management of NHS 111 services, and set their own performance targets for services…Data…is not available in the format requested.”—[Official Report, 23 October 2013; Vol. 569, c. 213-4W.]
In other words, the only people responsible for policing such conflicts of interest are the very people who have stood to gain from them.
The final issue I wish to raise with the Minister is that of the National Clinical Assessment Service. In many respects, this could merit an Adjournment debate all of its own. NCAS was established to undertake performance assessments of GPs and clinicians when primary care or hospital trusts had expressed concern that their clinical results or statistics appeared to have been outside normal parameters. There are more than 1,000 referrals a year, and in the vast majority of cases NCAS will assist simply by advising the trust in order to return the clinicians to safe and effective practice. However, in 50 or 60 cases each year an extraordinarily detailed and intensive process of assessment and remediation is required. Only about 60% of those who undergo that process make it back into safe and effective practice, while 40% never return to work in the NHS. NCAS is therefore one of the key guardians of patient safety.
In 2010, it became clear that NCAS would be restructured as part of the reconfiguration of the NHS. Its budget was cut by 20%, and it was told that it would have to become self-funding by 2013. In 2012, Deloitte was asked to conduct a review of the service, but it is due to publish its report only on 14 November, 10 days from now. In April this year, NCAS was joined to the NHS Litigation Authority, which has since consulted on a new structure prior to publication of the Deloitte report.
I understand that senior clinicians in NCAS are deeply worried that the head of the NHSLA has simply dismissed the very serious concerns that senior and experienced practitioners fed into the consultation about the proposals and the impact they might have on patient safety. NCAS is now haemorrhaging junior staff, whom it is allowed to replace only with agency people. The advertisement for a replacement for the senior assessment adviser specifies that the person concerned must be someone on secondment, and for one year only. The restructuring proposals dispense with the post of the director responsible for the “back on track” service, but no one else in the service has the clinical capacity to perform the role.
For some 50% of those who come for assessment, previously unidentified patient safety issues are revealed, often involving the cognitive impairment of the clinician himself or herself. I believe that before the proposed changes are allowed to proceed, the Minister must provide satisfactory answers to two questions. First, how will those patient safety concerns be discovered under the new model? Secondly, how will doctors who present a risk to the public be remediated and returned to safe and effective practice, given that the proposal specifically does not replace the key post with the clinical capacity to carry that out?
The problems and failings I have outlined this evening are not a series of unfortunate but unrelated events, but the logical consequence of a restructured NHS that has put competition and cost, rather than patient care and patient safety, at the heart of the health service. There has been a failure to ensure quality commissioning of the services being provided. In fact, one GP has written to me noting:
“It perhaps raises an interesting learning point for the future; that being if GPs are going to commission services and deal with private providers, what mechanisms are in place to stop patients being harmed by”
our
“negotiating a less than water tight contract? We are GPs not lawyers.”
Certainly with respect to the takeover of the pathology laboratory by TDL, no risk assessment was carried out to predict the potential problems that might arise from a change in both system and process, and no suitable performance measures were implemented, nor was a structure of monitoring put in place to ensure that a good quality of service was maintained. The Health Secretary has been keen to argue that privatising these services is on the basis of improvements to patient welfare and sound clinical evidence. It is not.
The awarding of the contract to Revisecatch Ltd shows that the clinical advice was ignored on the basis of cost, despite the clear implications for patient safety. The irony is that the subsequent change in contract specification almost always results in much higher costs, to the benefit of the private provider.
Patient care and patient safety can only be prioritised in a system where transparency thrives. Only in such a system can mistakes be learned from and become the basis of better future practice, but it is not in the interest of private companies to disclose any aspect of failing service. The root cause analysis report notes:
“The report provided by TDL on 08 March, was light on detail in parts and so it was difficult to identify lessons learned. TDL enjoy a good reputation and it is understandable that they would wish to protect this. However, in light of the requirements to put patients first and the duty of openness, transparency and candour, as recommended by Francis, it is felt that all involved could have been more open throughout the process.”
This issue of transparency and openness will remain a serious challenge for as long as private companies compete for contracts on the basis of cost.
Too many medical professionals are having to discover to the detriment of their patients that, for all their clinical expertise, they were never trained in the dark arts of commercial contract law, contract specification, negotiation and monitoring. It is the dogma of this Government that has put competition at the heart of our national health service, where patients should rightly be.
The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)
It is a great pleasure to be speaking in the Chamber under your chairmanship for the first time, Madam Deputy Speaker. I congratulate you on your success in being appointed.
I congratulate the hon. Member for Brent North (Barry Gardiner) on securing this debate. Before I correct some of the assertions he has made, I want to highlight the fact that the diagnostic services in England, and especially in Brent, are in rather robust health under this Government. Average waiting times for a diagnostic test remain low and stable, despite the NHS carrying out over 2 million more key tests a year since May 2010. The percentage of patients waiting six weeks or more at the end of June and July 2013 was 0.9% of the total number of waits. We can therefore see that the number of diagnostic tests is increasing, the availability of diagnostic services to patients has improved under this Government, and very few patients are waiting in excess of six weeks for the services provided.
Latest provisional data from the diagnostic imaging dataset show that almost 32 million imaging tests were reported in England in the 12 months from June 2012 to May 2013. Diagnostics have a key part to play in reducing premature mortality, particularly as NHS England estimates that over 1 billion diagnostics tests are carried out within the NHS every year. Access to safe and high-quality diagnostic services, such as endoscopy, genetics, and imaging, is critical to all clinical pathways. They underpin over 80% of clinical decisions and they contribute to the holistic care of patients, not just single episodes of care.
It is worth reminding the hon. Gentleman that the previous Government introduced, and championed the role of, the private sector. I believe we are all Blairites in this Chamber, in that we all believe in respect of publicly funded care that where the provider—be it the NHS, a private provider or a local charity or voluntary sector organisation—gives high-quality patient care, that has to be a good thing because it improves the quality of care. It is also important to highlight that the previous Government introduced private sector providers into the NHS to reduce waiting times for operations, which were unacceptably high at that time. I think we would all agree that it was a good thing that waiting times were reduced so patients no longer had to wait unacceptably long times for treatment they so desperately needed.
The first independent sector treatment centres were opened in October 2003, under the previous Government, and they gave £250 million to private providers of independent sector treatments. To their shame, they paid the independent sector on average 11% more than the NHS price for the same treatment.
Our intention in the reforms we introduced was to look at the mistakes the previous Government made in commissioning private sector services, to make sure there was a level playing field. There is no competition on price, as the hon. Gentleman asserted; there is only competition on quality in NHS services. It is important that any provider of NHS services and care to patients does so in an integrated way that delivers joined-up and integrated care based primarily in the community. Providing early diagnosis and early treatment and improving diagnostic services is a key part of that.
The big challenge that faces the whole of the NHS and the health and care sector is the fact that many people are living longer, and often with multiple medical conditions like diabetes, dementia and heart disease. The challenge is to make sure that we treat them with dignity and respect. We must also make sure that when we can diagnose a problem or illness early, we do so. That is why we are very proud to have increased the amount of early diagnosis and the number of diagnostic tests available in our NHS. The remaining challenge is to make sure we continue improving early diagnosis in Brent, London and throughout the country.
We know that when disease is diagnosed early, patients have a better chance of a good outcome. One-year survival for kidney and bladder cancers is as high as between 92% and 97%. At a late stage, however, it drops to between just 25% and 34%. The clinical case for early diagnosis and the investment we are making in diagnostic services is very clear, therefore.
Of course, apart from the clinical benefits of early diagnosis, there are other benefits. When people are ill, they want to know as soon as possible what might, or might not, be the cause of their illness. Having to wait a long time for diagnostic tests can be hugely stressful for patients.
Let me deal with the issues the hon. Gentleman raised about the commissioning of services. Since the beginning of April 2013, clinical commissioning groups have been responsible for commissioning many health care services to meet the requirements of their population. In doing so, CCGs need to ensure that diagnostic services are considered fit for purpose and reflect the needs of the local people as part of their process for commissioning clinical pathways. Local clinicians are best placed to understand the needs of their local population and commission the diagnostic services they need.
Local clinicians are commissioning in a way that is increasingly effective in diagnostics and elsewhere, so more choice in diagnostic services is essential. Many patients who require diagnosis—perhaps an ultrasound scan—will be working, and traditionally some of the NHS diagnostic models have not embraced seven-day working. We know that it is much easier for working people to access NHS services in the evening or at weekends. Therefore, bringing providers that supply greater choice for patients into the NHS makes it much more likely that patients will receive appropriate services at the right time and in a convenient way. It also increases patient compliance, not only with treatments, but with making sure they have their scans and diagnostics in a timely manner.
Barry Gardiner
The Minister rightly says that clinicians are best placed to make clinical judgments about their patients’ needs, and there is no dispute between us on that. My concern is that in a case such as that of TDL the clinicians understood the clinical need but clearly did not have the expertise to ensure that the contract was properly engaged in; that it was risk-assessed in the first place; that it was properly monitored; and that it was executed in a manner that was going to ensure the proper relationship between the practitioner and the tests that were being done. Similarly, on the courier service, they had the clinical evidence right, saying that refrigeration was needed, but when it came to putting the contract in place there was no such refrigeration.
Dr Poulter
I hope that the hon. Gentleman will forgive me for saying that many of the contracts to which he is alluding were put in place under the old arrangements, before this Government’s reforms, which have delivered clinical leadership. Many of these contracts were negotiated under the powers put in place under the previous Government, whereby people without clinical experience often negotiated the contracts and so did not always understand what the important clinical factors were. He rightly raised the point about potassium and the refrigeration of biochemical samples. It is important that we preserve the integrity of all samples collected. Of course, a clinician, a biochemist or someone with clinical experience would understand that, whereas someone who is commissioning services without that background might not. We saw that happen far too often with primary care trusts. The clinical input under the new arrangements will put us in a much better place to commission services in the future. Many clinical commissioning groups have been saddled with those old arrangements and so are having to enforce arrangements and contracts that they did not directly negotiate. We hope that when the contracts come up for renegotiation that problem will be put right, thanks to the reforms that we have introduced. They will lead to clinical leadership at CCGs, so that doctors and nurses are in charge of negotiations, rather than people who have not necessarily had the relevant clinical experience and do not have the knowledge to understand what the contract they are commissioning is about. National frameworks are being developed for some commissioning contracts by NHS England. So if concerns arise locally on the part of a CCG about the commissioning of contracts, NHS England is always available to provide advice.
I wish to reassure the hon. Gentleman that not just any old health care provider can deliver diagnostic services. By law, health care providers must register with the Care Quality Commission to carry out diagnostic services. That helps to ensure that patients receive only high-quality care, because the CQC, to which the Government are granting greater independence and strengthened powers to intervene where there are quality of care concerns, is the organisation that will be able to intercede if there are concerns about the quality of any health care service which may affect patient care. Service providers must be registered with the CQC and they must prove that they can meet strict quality criteria. That regulated activity includes a wide range of procedures related to diagnostics, screening and physiological measurement, including all diagnostic procedures involving the use of any form of radiation, including X-ray, ultrasound or magnetic resonance imaging. Regulated activities are listed in schedule 1 of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2010.
Barry Gardiner
The Minister will have been aware of the report on TDL in north-west London and in no sense could it have been said that a satisfactory service was being delivered. So why did the CQC not intervene in a timely fashion? Why, when the initial report by the GP was made about a serious incident, was it not taken seriously? Why did it take so long to make sure that these services were being provided properly and that my constituents were being kept safe?
Dr Poulter
Clearly, the events that the hon. Gentleman has raised were distressing and appear to have caused difficulties for patients, and I know that local commissioners found that regrettable. I do not know whether the case was reported to the CQC. He will also be aware that the CQC has come on a considerable journey, from being an organisation that was not fit for purpose a few years ago to being an organisation, with new chief inspectors in place, that is in a much more robust state of health now. The Secretary of State has put in place a number of measures to beef up and improve the inspection regimes in all care settings. We now have a chief inspector of care, a chief inspector of hospitals and a chief inspector of general practice. Following the Francis inquiry, there is now much more transparency, openness and passing of information between health care commissioners at a local level and the CQC. That did not happen as effectively as it should have done in the past, and that was to the detriment of those in Brent.
Dr Poulter
Indeed, and the Francis inquiry took place this year and a lot of action has been put in place by the Secretary of State to recognise where there have been failings in the health system in the past. We know that the majority of the health service, however it is commissioned, be it through a provider of NHS services, through the voluntary sector or through private providers, provides fantastic care on a day-to-day basis. We are proud that we have a publicly funded health service that has many fantastic front-line staff—I count myself still to be one—who do a very good job of looking after patients.
We know that things sometimes go wrong: the hon. Gentleman has highlighted what went wrong in his constituency and in the wider NHS things went wrong, very tragically, at Mid Staffordshire. We need to learn from those mistakes and ensure that they are put right in future, whether they are in the commissioning process—clinically led commissioning should put us in a much better place in that regard—or in the care that is provided to patients. We need to ensure that all hospitals, as well as other health care providers and care sector providers, step up to the plate, recognise that patient safety must always be paramount and ensure that the lessons that need to be learned from the Francis report are learned. My right hon. Friend the Secretary of State will report back to the House in due course—later this month, I believe—with further recommendations that will, I hope, reassure the hon. Gentleman.
In conclusion, let me turn specifically to diagnostic services in Brent. I am aware that the hon. Gentleman has recently asked questions about referral processes for diagnostic services provided in his constituency. As he knows, the contracts for those services were originally let by the then PCT under arrangements encouraged by the policies of the previous Government and are managed by the North and East London commissioning support unit on behalf of the CCGs. The London NHS Diagnostic Service, provided by InHealth, offers GPs and other health care professionals direct access to high-quality diagnostic and imaging scans and tests throughout London delivered from a range of sites, including mobile, fixed and community-based facilities.
I hope that it reassures the hon. Gentleman to hear that between September 2010 and August 2011, 2,397,018 diagnostic tests were carried out in London but more recently, between September 2012 and August 2013, there was an increase of about 300,000 to 2,651,560. That shows that the service in London is in robust health and is being used to facilitate scans and other procedures to diagnose many more patients today than two to three years ago.
I understand that the hon. Gentleman has been in communication with local commissioners and that the relevant NHS England area team has advised him that GP practices do not receive any referral payment when patients are referred to the London NHS Diagnostic Service provided by InHealth. I know that that is an area of concern to him and he was possibly suggesting that there might be some cosy internal relationship among local health care services to the detriment of patients. I can reassure him that that is certainly not the case. GPs make clinical decisions on the basis not of financial bribes, but of what is best for their patients. I hope that he will be reassured by the answer he has received from the commissioners and I do not think that it is in any way likely that GPs or other health care professionals will act in a way that is outside the best interests of their patients. It has always been my experience that front-line health care professionals, with very few exceptions, act with openness and integrity and always advocate for their patients’ needs. I hope he will be reassured by that.
I hope that the hon. Gentleman is reassured that diagnostic services are in robust health under this Government nationally, and in Brent.
Question put and agreed to.
Rural Fair Share Campaign
Train services serving Brighton and Hove
Written Statements
Recruitment Sector Regulations (Reform)
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)
On 12 July 2013, following a public consultation, the Government announced their intention to reform the regulatory framework for the recruitment sector. We intend to replace the Employment Agencies Act 1973 and the conduct of employment agencies and employment businesses regulations 2003 with a simplified regulatory framework which will continue to protect people who are looking for work but which will remove some of the burden from business.
As part of the Government’s ongoing commitment to review regularly the enforcement of the national minimum wage, we also announced a more targeted enforcement strategy for the recruitment sector, focusing on protecting the most vulnerable, low-paid workers. We are now announcing that, from today, resources from the Employment Agency Standards Inspectorate (EAS) which is currently situated within BIS, will move to HM Revenue and Customs’ national minimum wage (NMW) team. They will form a new HMRC team and will focus mainly on enforcing non-payment of national minimum wage in the recruitment sector. By increasing HMRC’s NMW team we will ensure that the most vulnerable workers are protected and we will create a level playing field for the vast majority of agencies who play by the rules.
A small team will remain in BIS to enforce the recruitment sector regulations. Complaints will continue to be prioritised using a risk-based approach and the level of resourcing will be kept under review. The pay and work rights helpline will continue to be the first point of contact for individuals seeking help and advice.
Primary Authority Partnerships
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
Government have committed to ending the culture of tick-box regulation and creating an environment that gives business confidence and certainty to grow.
Primary authority promotes business confidence through the provision of robust, reliable and consistent advice on compliance issues. It also generates efficiency savings for local authorities, enabling them to target their resources more effectively. In short, it enables better enforcement.
Since their introduction primary authority partnerships have delivered proven benefits to businesses and regulators. The Enterprise and Regulatory Reform Act 2013 demonstrates Government’s commitment to primary authority by strengthening the scheme and extending the scope.
In response to the consultation “Transforming Regulatory Enforcement”, the Government committed to pilot the extension of primary authority to fire safety. In autumn 2012 two pilots were set up to examine how partnership working could help improve the delivery of fire safety regulation. One of the pilots looked at how primary authority would work for fire safety, and a second pilot looked at a scheme which was not backed by statute.
The pilots ended in July 2013 and an independent evaluation concluded that partnership working delivered benefits to both businesses and fire and rescue authorities. Although there were positive elements to both schemes, the statutory primary authority scheme represented “the most sensible way forward”.
We are pleased to announce that Government intend to proceed with the extension of primary authority to fire safety with effect from 6 April 2014.
In order to effect this change and bring the Regulatory Reform (Fire Safety) Order 2005 within the scope of primary authority, we will amend the Co-ordination of Regulatory Enforcement (Enforcement Actions) Order 2009, by means of a statutory instrument, subject to a negative resolution process. We anticipate this happening in the new year.
I am sure that the House will welcome with me the extension of primary authority to include fire safety and the benefits and efficiency savings that this will bring to both businesses and fire safety authorities.
British Gibraltar Territorial Waters
(11 years ago)
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The Minister for Europe (Mr David Lidington)
On Wednesday 30 October an incident occurred in British Gibraltar territorial waters (BGTW) involving dangerous manoeuvring by a Spanish guardia civil boat. Following media reporting of the incident, this statement sets out the facts and the Government’s response.
During a routine transfer of personnel between Royal Navy vessels in BGTW, a guardia civil vessel was observed approaching at speed. As the Spanish vessel approached, the Royal Navy and defence police vessels at the scene followed operational procedures, including forming a protective barrier. On arriving in the vicinity, the guardia civil vessel conducted several dangerous manoeuvres near the British vessels. At one point a minor collision occurred between the guardia civil vessel and one of the defence police boats. There was no damage to either vessel, no shots were fired and there were no injuries.
The UK’s defence attaché in Madrid raised our concerns about the incident with the Spanish Navy on Thursday 31 October. We have also raised this at a high level with the Spanish Ministry of Foreign Affairs, making it clear that the actions of the guardia civil were unacceptable and dangerous, with the potential to cause serious injury or damage. Once the full facts of the incident had been established, a formal written protest was also issued to the Spanish Government in Madrid.
Terrorism Legislation (Independent Reviewer Report)
(11 years ago)
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The Secretary of State for the Home Department (Mrs Theresa May)
The Government’s response to the report of Mr David Anderson QC on the operation in 2012 of the Terrorism Act 2000 and part 1 of the Terrorism Act 2006 is being published today.
I thank David Anderson QC for his report and have carefully considered the detailed commentary and observations made.
The Government’s response is available in the Vote Office and online.
Civil Service Council/Family Justice Council (Triennial Reviews)
(11 years ago)
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The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
My right hon. and noble Friend the Minister of State, Ministry of Justice, Lord McNally, has made the following written ministerial statement:
In March 2011 the Government responded to the Public Accounts Select Committee report “Smaller Government: Shrinking the Quango state” setting out the coalition’s plans for reforming the public bodies sector. It included the requirement to undertake triennial reviews of Executive and advisory non-departmental public bodies (NDPBs).
The Civil Justice Council (FJC) was established under the Civil Procedure Act 1997. It is responsible for overseeing and co-ordinating the modernisation of the civil justice system and for providing advice to the Lord Chancellor and others on the effectiveness of aspects of the civil justice system. It also makes recommendations to test, review or conduct research into specific areas.
The primary role of the Family Justice Council is to promote an interdisciplinary approach to family justice and it is an advisory body to the Family Justice Board. The Council also monitors how effectively the family justice system delivers the service the Government and the public need, providing advice to the Family Justice Board. The FJC was not established under statute.
To deliver the coalition Government’s commitment to transparency and accountability across our public bodies, the Civil Justice Council and the Family Justice Council will each be subject to a triennial review. The Judicial Office, which is undertaking the triennial reviews, has today launched a consultation which will last until 25 November 2013 inviting views. In line with Cabinet Office guidance, the reviews will consider the following:
the continuing need for the Civil Justice and Family Justice Councils—both their functions and their form; and
where it is agreed that the bodies should remain, to review the control and governance arrangements in place to ensure that these public bodies are complying with recognised principles of good corporate governance.
In conducting the triennial review, officials will be engaging with a broad range of stakeholders and users of the Civil Justice Council and the Family Justice Council. The review will be aligned with guidance published by the Cabinet Office: “Guidance on Reviews of Non-Departmental Public Bodies”. The final report and findings will be laid in this House
Grand Committee
Children and Families Bill
(11 years ago)
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The Deputy Chairman of Committees (Baroness Harris of Richmond) (LD)
My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and will resume after 10 minutes.
Clause 36: Assessment of education, health and care needs
Amendment 128A
Lord Patel
Lord Patel (CB)
My Lords, it is a pleasure to kick off today’s procedure rather than waiting all day and your turn not coming. It gives me an opportunity to begin and I will try not to be long. Perhaps I may put my amendment in the context of the debate that we have had. First, many times in Committee we have heard that this Bill is all about improving education for all children. I am encouraged by and I thank the noble Lord, Lord Nash, and the Government, for their amendment related to the education of children with cancers and other long-term diseases.
I also thank him for his response to the amendment in the names of my noble friend Lord Kennedy and myself about children with cancers, their education and alternative provision. Putting that into context with this amendment makes this amendment crucial to complete the circle. I say that because my amendment provides a simple insertion to Clause 36. It would ensure that “providers of alternative provision”, including hospital schools and medical pupil referral units, would be able to request an education, health and care—the so-called EHC—needs assessment for pupils who need it. It is necessary because the Bill states that the request for,
“an EHC needs assessment for a child or young person may be made to the authority by the child’s parent, the young person or a person acting on behalf of a school or post-16 institution”.
I believe that what is lacking is that the providers of alternative provision should also be able to request an assessment.
Research carried out by charities such as CLIC Sargent has found that many parents did not think that their child’s educational needs were adequately assessed after their child’s initial diagnosis of their condition, including cancer. That adversely affected the education of the child. Alternative providers are well placed to request and feed into the needs assessment, as they have better knowledge of the child’s needs and have been involved in the child’s education over a period of time. Importantly, the limitations that, for example, the child with cancer still undergoing treatment might have can last several years.
Although some children with cancer go through treatment with minor disruption to their education, some find that they are disadvantaged for years as a result of aggressive and debilitating treatment and have huge gaps in their education. Their needs are very different. Some would be able to return to school with minimal extra provision, while others may require significant additional support. In some cases, that may be during their whole school career to enable them to catch up with their peers and to achieve their potential.
Often, awareness on the part of the school is key, which is not surprising considering that such children and young people are few in number. About 3,500 new cases of child cancers are diagnosed every year and a similar number of other children have other long-term diseases. Because of the variety of conditions, each school will not have the necessary experience. The issue is further exacerbated by the fact the child’s needs will often not be immediately apparent, but learning can still be affected in the longer term as a result of chronic fatigue, attention and concentration difficulties and even psychological and emotional problems. These issues can all directly impact on a child’s ability to learn.
There are, therefore, other benefits in involving hospital school staff and other professionals such as clinical nurse specialists in the process, as they are much more likely to have specialist knowledge about the impact of the child’s cancer and the support required. The amendment has the support of the National Association of Hospital and Home Teaching, a professional association for teachers and staff in the UK who work with children and young people whose medical needs prevent them from attending school.
The Minister has been very considerate in the amendments we debated before, but this amendment is the one missing notch that will help the education of children not just with cancers but with other long-term diseases. It would recognise the important role of alternative providers of education, working in a co-operative way with schools, parents and local authorities. Furthermore, including them in the EHC planning of these children values them as teachers. I hope the noble Lord, Lord Nash, will be sympathetic to the amendment. I am not seeking for this to be in the Bill—although I do not see why not—but I would be content if the guidance could be strengthened. I beg to move.
Baroness Jones of Whitchurch (Lab)
My Lords, I wish to speak to Amendments 129, 131, 133, 136, 139, 140, 141 and 142 standing in my name. These amendments focus on the mechanics of the process for determining education, health and care needs, the rights of appeal and the support for families which need to be factored in during the assessment process.
First, Amendment 131 specifies that, when making a decision as to whether special educational provision should be made for a child or young person, the local authority should have,
“regard to the competencies and needs of the child or young person’s parents and immediate family”.
This whole-family approach is an essential feature of the Bill. It should place the child’s or young person’s family at the heart of the assessment process. This is important in informing the provision to be specified in an EHC plan and would provide a much more rounded and personalised programme of support. This is consistent with our approach to previous parts of the Bill which sought to involve families more in the process. I know, from discussions we have had about young carers, that the Minister is sympathetic to this approach.
It is important that family life and home life are considered as part of a support package. Families are key to the well-being of children and young people with special educational needs and disabilities and to ensuring that they have every help to achieve their potential. The draft code of practice is very light on the scope to include families in assessments. The emphasis is on parental involvement in discussions and decisions, which is fine, but we are making a different point: families do not just need to be consulted; their own needs for help and support also need to be assessed. This whole-family approach is a fundamental principle which should thread through the clauses and be spelled out in the Bill. I hope noble Lords will support this amendment.
Amendments 129, 140, 141 and 142 deal with timescales in decision-making. Clause 36 specifies that parents, young people or educational establishments can request an EHC assessment. Our amendments would add a six-week time limit for responding to such requests. We feel that this is a reasonable timeframe, given that such requests would not be made unless there was a view that a child’s education was suffering in some way, so early intervention and action for the sake of the child are obviously important at that point.
We are aware that this requirement is included in the draft code of practice, but we feel that these rights are so fundamental that they should be spelt out clearly in the Bill. We feel that clear timescales would give added reassurance to parents and children alike, and would ensure that local authorities had clear and responsive processes in place to comply with the Act from its commencement, which would make these timescales a reality.
Amendments 133 and 136 deal with the right of appeal. As it stands, Clause 36(5) states that where a decision is taken by a local authority that no special education provision will be made, the local authority must notify the child’s parent or the young person of the reasons for that decision. So far so good, but our amendment would go one step further and ensure that parents are informed of their right to take the decision to appeal as a matter of course. This matter is covered in the code of practice, but we feel that it is better placed as an absolute right in the Bill.
We would go one stage further and argue that all appeal rights should be brought together as one single seamless set of rights spelt out in the Bill. We have separate amendments in a later group that address that point. We believe that a robust appeals process will ultimately be a guarantor of quality and will help to make the EHC system a success. I hope noble Lords will listen carefully to the points that I have made and will feel able to support the amendments.
Lord Lingfield (Con)
My Lords, I, too, have amendments in this group, to which I will speak briefly. In a similar way to the amendment of the noble Baroness, Lady Jones, to which she has just spoken, my first amendment, which is to Clause 36(5), seeks to place in the Bill a specified time limit for a local authority to act. In this case, it is to notify a parent or young person that the authority has determined that special education provision is not necessary.
Although the Bill does provide in Clause 36(11)(c) the regulations to be made concerning the giving of notice, for reasons of transparency it is important that this should be placed here in primary legislation. It is important to realise that the suggested time limit of 15 days reflects the current practice under existing legislation. Such transparency of time limits is important for parents and ought to be in the Bill, in order that they are informed promptly if a local authority determines that special education provision is not necessary, so that parents can, without delay, decide on any processes of appeal that they may wish to follow.
My second amendment, to Clause 36(11), strengthens the wording from “the regulations may make” to “regulations shall make”, so that we can be absolutely clear that regulations will be produced to this end.
The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)
My Lords, I speak to this group of amendments on assessment tabled by the noble Baronesses, Lady Hughes and Lady Jones, the noble Lord, Lord Patel, and my noble friend Lord Lingfield. Before I do so, I should say that my noble friend Lady Northover has had a bereavement and my noble friend Lord Attlee will be standing in for her at very short notice on a couple of the groups this afternoon.
The overarching theme of this group is clarity and timeliness in communications. Getting this right is absolutely vital in creating a system where children, families and young people feel that they are being treated fairly. I thank noble Lords for the opportunity to discuss this matter.
On Amendment 128A, tabled by the noble Lord, Lord Patel, it is a key part of the reforms that anybody working with a child or young person who thinks that they may need an EHC plan can refer them to the local authority. This includes providers of alternative provision, so that a child or young person’s needs can be met. I reassure the noble Lord that Clause 23 will enable providers of alternative provision, and anyone else working with children and young people, to make a referral. The local authority must then determine whether an EHC assessment is necessary, as it would following a request under Clause 36.
Baroness Jones of Whitchurch
I am very grateful to the Minister for accepting one of our amendments. That is progress. However, I want to press the Minister on Amendment 131. I think I heard the Minister saying that, yes, of course the needs of families would be considered, but only if it was a social care issue. He referred to another piece of legislation. I have two points about that.
First, I would have thought that it made sense to bring everything into this one piece of legislation, rather than to refer people to other outstanding legislation that might apply, and I thought this was what we were aiming to do. Furthermore, I question whether saying that the needs of the family should be considered only when it is a social care issue is the right way to go about this. I thought that the idea of the Bill was to look at education, health and social care in the round, and I would have thought that the families’ needs and capabilities should be looked at in all three aspects of that, to reflect the way that they are going to impinge on the facilities provided for the child. I query whether this should be limited to social care.
Lord Patel
My Lords, I thank the noble Lord for his comments on my amendment. I did not think that the earlier provisions he referred to made it clear that alternative providers of education could initiate an EHC plan, but if his reassurances confirm that, then I am content. I will, however, read exactly what he said and look at the clauses again. I felt the earlier clauses did not clarify that, which is why I tabled the amendment.
Lord Touhig)
Lord Touhig (Lab)
My Lords, Amendment 137 is tabled in my name and those of my noble friends Lady Hughes of Stretford and Lady Jones of Whitchurch, and the noble Lord, Lord Low of Dalston. I shall speak also to Amendments 145, 165, 173 and 175 in this group. Amendments 137, 145, 165 and 173 seek to amend various clauses, including Clause 36, “Assessment of education, health and care needs”; Clause 37, “Education, health and care plans”; Clause 44, “Reviews and Re-assessments”; and Clause 45, “Ceasing to maintain an EHC plan”. All these clauses refer to a local authority “having regard” to a young person’s age when making a determination. Examples include the review of a plan or the decision to cease to support a plan. Similar amendments to these were tabled in the other place seeking to replace the reference to age with a reference to having regard to “educational outcomes”, but these amendments go further and would simply remove the references to age altogether. This is something that I am sure colleagues in the Committee know that the sector is much exercised about. These amendments seek to ensure that children or young people with education, health and care plans are supported to achieve qualifications similar to other children and young people regardless of their age, so long as they are under 25.
The provisions as currently outlined are restrictive and there is a lot more that should be taken into account by local authorities when deciding whether a young person needs a plan or remains in need of one. Many young people have specific circumstances such as spending periods of time not in education or training, the reasons already discussed in relation to previous amendments, or they may lag behind because of their specific learning difficulties. It is therefore essential that decisions should be based primarily on educational outcomes rather than a young person’s age.
These are probing amendments, and removing the reference to age is not an argument for support to go on indefinitely. Indeed, I think that the age of 25 is a sensible and proper target, but it is also wrong that age should be the overriding factor that is considered by local authorities, as the clauses currently suggest. The Minister in the other place agreed that age should not be the only factor considered when determinations are made, but he did say that the Government,
“want the clause to prompt local authorities, once a young person is aged over 18 … to take a thorough look at whether outcomes have been achieved and the young person has made a successful transition to adulthood”,
and went on to say that:
“The relevant regulation in the draft plan assessment regulations sets out that, when undertaking reviews, local authorities must consider the child or young person’s progress towards achieving the outcomes specified in the EHC plan”.—[Official Report, Commons, Children and Families Public Bill Committee, 16/4/13; col. 562.]
However, Clause 45(3) already requires a local authority,
“to have regard to whether the educational outcomes specified in the plan have been achieved”,
when it is considering whether to cease maintaining a plan. I therefore argue that the emphasis currently placed on age in the legislation is a complicating factor, causing entirely unnecessary ambiguity and potentially undermining the attainment of young people.
For 20 years I served as a councillor in a local authority and I know that colleagues on all sides of the Committee have also served at different times. I can tell the Minister that, from that experience and knowledge, the legislation as drafted will allow cash-strapped councils to drive a coach and horses through it—and they will certainly do so. It is a local council’s great escape and this will rival the film “The Great Escape” if we are not careful. Surely we do not want that to happen. I fear that the emphasis on age will work against what we are seeking to do in the Bill as a whole.
I turn to Amendment 175 tabled in the name of my noble friends Lady Hughes of Stretford and Lady Jones of Whitchurch. Clause 46 states that:
“A local authority may continue to maintain an EHC plan for a young person until the end of the academic year during which the young person attains the age of 25”.
As with previous clauses and amendments that we have already discussed, there is a concern that too much emphasis is again being placed on age as opposed to the educational outcomes of a young person. There is serious concern that such references to age could lead to local authorities cutting support part way through apprenticeships or other training courses. As I have stated previously, while support cannot continue indefinitely and 25 is a good cut-off point, we have to be careful about using age as a determining factor.
I welcome the fact that apprenticeships are now included in the Bill, and we are all grateful to the Government for listening to the representations made by noble Lords on all sides. However, age or the academic year should not be the only factor. The overwhelming factor should be the educational outcome for the young person. I am pleased that the Government, following an undertaking given by the Minister in the other place, have looked at this and have included the objectives of this amendment in the regulations. I thank the Government for listening because it leads to good and sensible dialogue and we then make better law than would otherwise be the case. In those circumstances, I beg to move.
The Deputy Chairman of Committees
My Lords, if Amendment 137 is agreed, I cannot call Amendment 138 by reason of pre-emption.
Baroness Sharp of Guildford (LD)
My Lords, I shall speak to Amendments 138, 146, 166, 174, 205AA and 205AB, which are all in my name and in this group.
Amendments 138, 146, 166 and 174 pick up the issue spoken about by the noble Lord, Lord Touhig; namely, they are about age and the wording that one sees in, for example, Clause 36(10). Rather than eliminating Clause 36(10), we seek to replace,
“have regard to his or her age”,
with,
“ensure that he or she will have sufficient time and support in education to make a successful transition to adulthood”.
There is in fact a slight mistake in the Marshalled List, which reads “transfer” rather than “transition”. The amendments have the support of the Association of Colleges, Ambitious about Autism and the Association of National Specialist Colleges, Natspec.
The view of those organisations, and my view, is that the Bill genuinely wants to ensure that young people with special educational needs have all the opportunities that they need to get the best out of education. The publicity around it has made much of the nought-to-25 system that is being introduced. It has also made much of the need for personalisation, which the amendments reflect. The aim of the amendments is therefore to ensure that the individual needs of the young person are recognised through the planning process, and that decisions about continuing their learning are made on the basis of need rather than an artificial link to their age.
One of the points mentioned by the noble Lord, Lord Touhig, is that there has been something of a tendency to think that, because the ages 18 and 25 are mentioned, these are the appropriate points rather than anywhere between those two ages. We are concerned that parents will feel that they have to battle to get a place beyond 18 in order that their son or daughter may stay until they are 25, setting up perhaps inappropriate expectations that they will continue through to 25 when it might be more appropriate for them to move into looking after themselves at an earlier age.
There are many reasons why a young person with special educational needs might need to be in education beyond the age of 18. Their learning difficulty may mean that they take longer to learn, practise and consolidate their skills. They may need additional time to become more autonomous learners, moving away from a situation where support is very hands-on to support that promotes their independence. They may need to learn how to use technology that can support this autonomy. Young people with special educational needs often mature later than their peers, and it is not until they move into a more adult environment that they really make a step towards more effective learning and taking on greater responsibility.
They may acquire the information and understanding to make informed choices about their future only once they have moved beyond school. Take, for example, the case of Chris, who has Asperger’s syndrome and major communication issues. He switched to college at the age of 16. In supported learning at college, Chris gained the confidence and skills required to progress into mainstream education. He has completed the bronze Duke of Edinburgh award, which he started when he first joined the college. He also started, in supported learning, on a next steps course for two years, progressed to a level 1 foundation course in IT, has steadily worked his way through level 2 and level 3 and is now completing his UCAS statement, with the aim of going to university next September.
Time spent to ensure that young people are well prepared to move into adult life pays dividends for them, their families and, ultimately, for the public purse. The National Audit Office report, Oversight of Special Education for Young People Aged 16-25, which was published in November 2011, stated:
“Equipping a young person with the skills to live in semi-independent rather than fully supported housing could, in addition to quality-of-life improvements, reduce these lifetime support costs by around £1 million. Supporting one person with a learning disability into employment could, in addition to improving their independence and self-esteem, reduce lifetime costs to the public purse by around £170,000 and increase the person’s income by between 55 and 95 per cent. If properly focused and effective, therefore, investment in special education should provide long-term returns”.
I cite the example of Shaun. Shaun first studied on an ACE course, which is a transition programme, at college. He had very low self-confidence and complained about being bullied. Although matters were resolved, Shaun requested a move to another college. Shaun started off very quietly at the new college, but gradually built up his confidence and became more sociable and responsible through the year. After completing his year on the ACE course, he was confident enough to join a mainstream course. He then completed an entry award in motor vehicles, went straight into full-time employment in motor vehicles and is now self-supporting.
This set of amendments ensures that local authorities and others taking, or helping to take, decisions on behalf of those young people will focus on outcomes that support the transition to adulthood—the point made by the noble Lord, Lord Touhig. There is much evidence to show that a successful outcome is linked to an effective learning programme geared to the needs of the young person, not artificially linked to age. I believe that that is the basic intention behind the Bill and, in that respect, this set of amendments is wholly in line with it. I very much hope that the Minister will be sympathetic to them.
Amendments 205AA and 205AB relate to Clause 66, which enables the Secretary of State to collect and publish information on children and young people with special educational needs who are under the age of 19. The amendments would extend that provision to the age of 25. Once again, it is a question of recognising that many young people with special educational needs need help and support through to 25. If the Government are genuine in their intention to create a comprehensive nought-to-25 system, it must include arrangements to monitor the outcomes for 19 to 25 year-olds. Indeed, the success or otherwise of the Government’s policies in this area will ultimately be accurately and appropriately measured only in the education, employment and independent living achieved by young people in that age group.
Officials have suggested that the reluctance to include 19 to 25 year-olds is driven by a desire not to increase administrative burdens on colleges, which is a particular policy concern of the Department for Business, Innovation and Skills. However, the Association of Colleges, which has asked me to table the amendments, has stated its willingness for the age range to be extended. It is not clear that the extension would necessitate any new data collection, as it asks only that colleges report on existing data collected under the individualised learning record.
Baroness Cumberlege (Con)
My Lords, I have three amendments in this group. As this is the first time that I have taken part in Committee, although I took part on Second Reading, I have been told that I should declare my interests, which are in the Lords register. In particular, this afternoon, I should like to declare my non-pecuniary interest as the chairman of the trustees of the Chailey Heritage Foundation. The foundation is a non-maintained special independent school with a registered children’s home. It works in partnership with a clinical facility, run by the NHS on the same site, and it has just launched a transition service for 19 to 25 year-olds. Some of these young people will continue from Chailey and others will come from a much wider area. This is the group to which my amendment refers.
Seeing is worth a thousand words, so I am particularly grateful to my noble friend who, during the very precious Recess, came to meet the children, young people and staff at the foundation. His visit had a profound effect on those he met, and I think it is fair to say—I hope the Minister will agree—that the occasion was of mutual benefit. My noble friend met some very severely disabled young people. I was interested in the examples given by the noble Baroness, Lady Sharp. The young people at Chailey are not of that sort at all: they are much more severely disabled. However, they do well at school, within the limits of their disabilities; some have 15 or more medications a day and none of them can walk or power their wheelchair unaided. Our ambition for these young people is that, having had a very worthwhile, stimulating education, which Ofsted says is outstanding—something that we are very pleased about—they should then benefit from this education.
They have some understanding but very limited, or no, speech and have learnt to communicate through different means, often using sophisticated modern technology. They have acquired some knowledge of how to operate in society. We believe that they should participate in their own lives and not be consigned to a wasted life in a nursing or residential home. Despite their very complex needs, we have plans for four of our young people to move into assisted living and we are seeking some sort of employment for them, although we realise that it will be very limited. The noble Baroness, Lady Sharp, mentioned the National Audit Office review. I agree that saving money in the long term depends on the initial education of these young people. Semi-independent, rather than fully supported, housing can save considerable money in the long term.
I am grateful to the noble Lords, Lord Patel and Lord Low, and noble Baronesses, Lady Jones and Lady Hughes, for supporting Amendments 170, 171 and 173. I was hoping to see the name of the noble Lord, Lord Nash, on these amendments when we looked at today’s Marshalled List, but that may come in time. The amendments are very similar to others on the Marshalled List this afternoon. We all wish to see education, health and care plans continue, where appropriate, to the age of 25. I was encouraged by the follow-up letter, written by my noble friend after Second Reading, in which he recognised that some people with special educational needs require more time to complete their education beyond the age of 18: as we all know, they generally learn more slowly than other young people. Having been a Minister, I appreciate the Government’s concern about legislating.
We understand that there could be an expectation that every young person with SEN would have an entitlement to education up to the age of 25, regardless of whether they were ready to make or had already made a successful transition into adult life. Those of us who have brought up children, or worked with children and young people, know that our task is not complete by 19. The years between 19 and 25 are also very formative; it is a time of experimentation, finding limits and testing boundaries. We do not expect a 19 year-old to settle down into adult life or decide where they are going to live for the rest of their life. Young adults with complex needs are different, in that they require very intensive support. They have to make this transition and develop a sense of themselves as adults and what it means to be an adult. Creating the right environment to achieve an understanding of adult life is an important part of supporting development, and we believe that it is “educational” for those with complex needs.
Lord Northbourne (CB)
My Lords, I support Amendment 146, tabled by the noble Baroness, Lady Sharp of Guildford. For many years, I had the privilege to be a member of the governing body of the Caldecott Community, where we looked after very damaged children. Reintegration into adult life was always the problem. The noble Baroness is absolutely right that the potential to make a successful transfer into adulthood must be the ultimate criterion. It is obviously true that educational achievement and, indeed, age may be factors in the judgment, but what about the ability to succeed? It is important that that context should be established, because institutions must have as their objective not necessarily educational attainment but enabling their pupils to develop to a point where they can live independently.
Baroness Howe of Idlicote (CB)
My Lords, I also say what an absolutely splendid debate we have had so far, particularly the input from the noble Baroness, Lady Sharp, with which I agree entirely. Also, the noble Baroness, Lady Cumberlege, has given quite a new dimension to our thinking.
I have tabled a small and modest amendment in the group, Amendment 172. It is based on the fact that Clause 45 allows a local authority to cease an education, health and care plan if the outcomes set within it have been achieved. The amendment would require a local authority to continue the plan if ongoing support were needed to maintain those outcomes, so it is pretty similar to others. In effect, my amendment seeks to prevent the Bill from giving local authorities a green light to end plans prematurely, when children may still need specialist support. That issue greatly concerns the National Deaf Children’s Society, RNIB and Sense.
We must recognise that sensory impairment in itself is not a learning disability. There is no reason why most children with a sensory impairment cannot achieve as well as other children, providing that they receive the right support. What concerns me is that, without this amendment, the Bill seems to allow local authorities to remove that support just as a child is starting to make progress. It would also seemingly allow local authorities to remove that support, even if ongoing support is needed to maintain and consolidate the progress that the child has already made.
Parents have told the National Deaf Children’s Society of their frustration that their child often had to fall behind before they could get the support they needed. One parent told the NDCS that:
“Although our son made extremely good progress in his first year in his new school, this seemed to be a trigger to reduce the levels of assistance from all other departments. His speech and language therapy stopped, everything stopped. It was as if he no longer needed it and he just dropped, his development went completely backwards”.
It is that kind of scenario that the amendment is intended to prevent. Although it echoes much of what has been said already, I hope that the Minister, when he replies, can give the assurance needed for all those children.
Baroness Howarth of Breckland (CB)
My Lords, I shall briefly support the noble Baronesses, Lady Cumberlege and Lady Sharp, and the noble Lord, Lord Touhig. I will not repeat the excellent arguments they made. I have already declared the interest which takes me into this: that I am president of Livability. We have two colleges, Nash College and Hinwick Hall College, where we have young people with very profound needs indeed, and where the education, health and care plan will really make a difference if it is seen in the round. I know that we are going to come to that on another set of amendments, so I just flag that up.
I wanted to ask the Minister very directly if he would tell us why the age issue was in the legislation at all at that level. I have worked for many years in local authorities; I have been a chief officer and linked to local authorities in other ways, and I know that when you are short of money you scour through legislation to find exactly where you can draw the line. That is a proper thing for local authorities to do. I am a vice-president of the Local Government Association and I understand that there may well have been representations in relation to the funding for this Bill. However, that is a pity because there is so much that is excellent.
I shall refer by way of example to Clause 44 on “Reviews and Re-assessments”, where all the things we are asking for in terms of parental involvement and that of young people themselves, and making sure that the authority takes that forward appropriately, are in place. Even so, there is still a strange phrase in the middle on having regard to age. We are all worried about the long-term plans in the three areas that we hope, through other amendments, to try to bring together. I know that the Government are keen to amalgamate some of this thinking and they have done well for young carers; we have heard about what good work is going to be done in that area. I am keen to understand from the Minister what the thinking is behind the phrase.
Lord Low of Dalston (CB)
My Lords, I have added my name to Amendments 137, 145, 165 and 173, but I do not propose to speak to them in any detail because we have been on this debate for a good long time. We have heard a number of full and eloquent speeches and I do not wish to go over what noble Lords have said. However, I should like to add a couple of points.
The Government are presumably worried that parents and young people will assume that they have an automatic right to an education, health and care plan up to the age of 25, but that is not something that the Government need to be too worried about. Most young people will not want to stay in education until they are 25. As the noble Lord, Lord Touhig, said, these amendments do not seek a blank cheque for continuing education for all young people to the age of 25 regardless of the type and purpose of the course they are pursuing; rather, they envisage local authorities supporting young people to achieve their agreed education, health and care plan outcomes, allowing them to progress to a job, develop their independent living skills, make an economic contribution to their community and avoid swelling the ranks of those who are not in education, employment or training.
I do not think that age needs to be mentioned at all, as the noble Baroness, Lady Howarth, just said. Most young people will achieve their education, health and care plan outcomes well before the age of 25, as they do now. Young people must have the opportunity to continue their educational programmes to achieve their agreed outcomes in age-appropriate settings in order to make the transition to adulthood, including work and independent living. These amendments will ensure that the existing protections for 16 to 25 year-olds are not lost.
In that connection, Ministers have stated that no one should be worse off as a result of the Bill. Currently, the learning difficulty assessment statutory guidance requires local authorities to maintain learning difficulty assessment and support to allow the young person to achieve their potential in employment and independent living up to the age of 25. That is in part a recognition of the fact that some disabled people may take longer to reach their potential.
The Bill should therefore not derogate from what is provided for in the current learning difficulty assessment guidance. As the noble Baroness, Lady Cumberlege, told us, independent specialist providers support many students who need a longer period to complete their studies or training. Many such providers also have significant numbers of students who become disabled for the first time as they approach adulthood, which obviously delays their educational progress. Decisions about whether to maintain a young person’s education, health and care plan beyond the age of 19 should be based solely on the young person’s progress in relation to their planned outcomes. Their age up to 25 is not the most significant factor. Focusing disproportionately on age will divert attention from supporting the young person to achieve the agreed outcomes in their education, health and care plan, which should be the prime consideration throughout.
Baroness Wilkins (Lab)
My Lords, I support Amendment 172 tabled by the noble Baroness, Lady Howe. I will not extend much further this excellent debate. It is very important that the Bill and the accompanying guidance is clear on the need to maintain specialist support when this is needed. It should not simply be cut when a child starts to do well. On this point, it seems that there is an inherent tension in the draft code of practice that needs to be resolved. I would be grateful if the Minister would look into this.
On the one hand, the definition of special educational needs includes children or young people who have a disability which prevents or hinders them from making use of the educational facilities of a kind generally provided for others of the same age. There are some groups of children, such as those who are deaf, to which this particularly applies. The implication is that these children have a special educational need by virtue of the fact that they are in need of specialist support to enable them to access those same educational facilities. However, there are times in the code of practice, from the tone of what is being said, when the reader can be forgiven for thinking that only children who are not making progress should be regarded as having a special educational need. For example, on page 75, it is suggested that SEN specialists should be involved when it becomes apparent that the child is making little or no progress. Many believe that this reflects a tension between the special educational needs framework of supporting children who fall behind and the disability equality framework of taking proactive steps to support disabled children.
Will the Minister look again at this to make sure that it is crystal clear that no local authority should cut support for a child because they are making good progress when it is only because they are receiving that support that they are able to make that good progress? I would also welcome his clarification for the record that children who need specialist support, such as deaf children, should be regarded as having a special educational need regardless of whether they are falling behind or making good progress.
Lord Nash
My Lords, I am grateful to all who have spoken in this important debate. I know that we all share the same concern to ensure that young people who need educational provision up to the age of 25 will receive it. I hope that I can offer some reassurance and will be delighted to discuss the matter further with my noble friends Lady Cumberlege and Lady Sharp, the noble Baronesses, Lady Howe and Lady Howarth, and others if that is not the case. I will first respond to those amendments regarding the genuine worry that the various clauses which require local authorities to “have regard” to a young person’s age when they are over 18 will give local authorities the ability to refuse to assess a young person or to cease their plan based solely on age.
From the outset, I would like to state categorically that this concern is unfounded. Local authorities cannot make decisions based on a young person’s age alone. The legislation requires local authorities to maintain EHC plans while it is necessary for special educational provision to be made for the young person in accordance with a plan. The draft code of practice makes this completely clear, stating in Chapter 7 that local authorities must not make decisions based only on the fact that a young person has turned 18.
Let me be clearer still: our vision is for a system that is ambitious for children and young people with special educational needs. There is no hidden agenda to cut costs or to reduce the number of families we want to help. Instead, we want a system that raises the aspirations not only of children, young people and their parents, but of those professionals working with them, and that has high expectations about what children and young people with SEN can achieve. Our ambition is that with the right support and opportunities, many more of these young people will have completed their education and made a successful transition to adulthood at the age of 18, along with their peers. Our vision is that where young people need longer to complete or consolidate their learning, they are able to remain in education and continue to receive co-ordinated help and support through their EHC plan—until the age of 25 if necessary.
What we must not do is create an expectation in law that all young people with SEN will simply stay in formal education until age 25. Creating an automatic right for all young people with EHC plans to remain in education for that long would dilute the focus on outcomes that we want throughout the new system and particularly from year 9 onwards. Local authorities could delay proper consideration of outcomes until after age 18, by which time it is likely to be too late, and many young people will simply drop out of the system at that point, as happens now. Worse, it could create a cliff-edge at age 25, when support would have to end for all those with EHC plans regardless of whether outcomes had been met. Surely the focus must instead be on supporting them to achieve outcomes and make a successful transition to adulthood, wherever possible, along with their peers. We need to end the presumption of failure attached to special educational needs and make sure that local authorities are doing all that they can to help many more children and young people with SEN achieve positive outcomes by age 18.
Turning to the point made by my noble friend Lady Cumberlege about the word “must”, we think that adding it to Clause 45 would serve to create an expectation that all young people with EHC plans should remain in education until after 25. On the question of why we refer to 18, and not 19, a young person aged over 18 has the legal meaning of a person who is aged 19 to 25, and it is our intention for the clause to apply to 19 to 25 year-olds. I hope that that provides some clarification.
The noble Baroness, Lady Howarth, asked why we use the phrase “have regard to age” at all. Following pre-legislative scrutiny, the Education Select Committee stated that there was confusion about whether the Bill created an entitlement for young people with EHC plans to remain in education until 25. It recommended that we make that clear in the Bill. Including the phrase “have regard to age” is our best solution to address that recommendation. It simply requires local authorities to take a young person’s age into account as part of a range of things that they must consider when making decisions. All other suggestions that we have had err on the side of creating a presumption that young people should remain in education until 25 unless certain conditions are met.
Young people with SEN over the age of 18 must be supported to remain in formal education where this will enable them to complete or consolidate their learning, achieve outcomes and make a successful transition to adulthood. Local authorities must, in consultation with young people, consider whether that has already been achieved by the time compulsory participation ends at age 18 or whether the young person needs, and indeed wants, further support through an EHC plan. We have made it clear in the draft assessment and plan regulations and code of practice that the EHC plan process should prepare and support young people for adulthood, facilitating a successful handover to new opportunities and support in the adult world. That transition planning must start from year 9 of a child’s schooling and continue until they have left formal education and made a successful transition to adulthood. This includes enabling young people to access learning opportunities, such as those offered by the Chailey Heritage Foundation, which prepare young people to live more independently. Such opportunities are a vital part of what is needed and I am grateful to my noble friend Lady Cumberlege for enabling me to see at first hand, in an extremely impressive and moving visit to Chailey, what a difference such approaches can make to the lives of those with complex needs.
Not only do our reforms protect the current position for those aged 19 to 25, they go further by creating a legislative requirement for local authorities to focus on outcomes and prepare young people for adulthood. In addition, where young people disagree with decisions made by local authorities, they now have—for the first time—the right to appeal to the tribunal.
It is right that once these educational outcomes have been achieved, local authorities should no longer be required to maintain EHC plans. Young people with ongoing health and social care needs will continue to receive those from the relevant services; that will not stop simply because they no longer have an EHC plan. Young people who have made a successful transition to adulthood and are now in employment, higher education, adult learning and so on will continue to receive support in those settings to enable them to maintain and build on the outcomes achieved while in formal education. For example, Access to Work is available for those in employment, Disabled Students’ Allowances for those in higher education and so on.
Baroness Sharp of Guildford
My Lords, I am not totally happy with what the Minister has said. The funny phrase,
“must have regard to age”,
is used in quite a number of clauses. He seems to be saying, “We do not want to look at age, we want to look at a successful transition into adulthood”. I do not understand why the Minister prefers his wording to actually saying that we want a successful transition to adulthood. The Minister has made the point that it is not a question of going through to 25, it is a question of when, between the age of 18 and their 25th birthday, it is appropriate for them to move into independence. I therefore do not understand why he is rejecting an alternative form of wording.
On Amendments 205AA and 205AB, I need to go back and have a look at this more carefully. My understanding is that at the moment it is not proposed to collect the data, so I was interested to hear the Minister say that they will be collecting data. I thought that they were making a distinction between schools and colleges and that they were not proposing to collect the data from colleges.
Finally, in relation to the code of practice mentioned by the noble Baroness, Lady Wilkins, my understanding is that it is not very helpful. If the Minister could have another look at it, I would be grateful. I thank him for his reply and hope perhaps that he can reassure me that he might look again at the wording.
Baroness Cumberlege
My Lords, I echo what the noble Baroness, Lady Sharp, has just said. Try as I might, I am afraid that I am not totally reassured, but I am extremely grateful that the Minister has agreed to meet with those of us who have these concerns. I am sure my noble friend will appreciate that there is a very strong coalition across the Committee—I do not mean in government terms, but across the parties—and that he gets the feeling that we need to go a bit further on this. I look forward to meeting him in due course.
Lord Touhig
My Lords, the Secretary of State, Mr Gove, said in a speech at what may have been his party conference:
“I’m really lucky to have as the Minister for Children and Families Edward Timpson. In the last year, Edward has transformed the education of children with special needs in order to ensure that all young children living with a disability at last have the support they need all the way up to the age of 25”.
I repeat: all the way up to the age of 25. In the debate in the other place the Minister said, as I said in my opening remarks, that age should not be the only factor considered when determinations are made. In response to this debate the Minister has said that our concerns on the age question are unfounded. If he can assuage our concerns and take out the reference to age altogether, we will all be happy bunnies. It is as simple as that.
The noble Baroness, Lady Sharp, said rightly that age was an artificial link. So far as my Amendments 137, 145, 165 and 173, as well as colleagues’ amendments are concerned, it is important to bear in mind that the Bill says that local authorities should “have regard to” a young person’s age when making a determination, for example, to review or cease a plan. I do not know how this is going to turn out, but we may well come back to it. Recently I spoke to someone I have known for years. He worked with me when I was a councillor and he was a local government official. We discussed this and he said, “Give me half an hour and I will give you three papers in which you as a councillor will be able to say, ‘We do not have to continue this support because of the age question’”. The noble Baroness, Lady Howarth of Breckland, made the important point that councils do not want to do anything bad or wrong in terms of this Bill or what they want for young children with disabilities or learning difficulties, but because of financial difficulties and other reasons they will look at the legislation to see if there is a way to avoid doing a particular thing.
I think we share an ambition to try to resolve this. The Minister cannot fail to have been impressed by the quality of the comments and the expertise of this Committee, and I am sure that every Member will happily volunteer to join his Bill team. We will find the time in our busy lives to help him redraft some of these amendments so that he will not have this problem. I do not think that it is going to go away. We will come back to it on Report. In the mean time, I beg to leave to withdraw the amendment.
Lord Low of Dalston
“RegisterMaintaining a register of sight impaired and severely sight impaired children and young people
A local authority in England must establish and maintain a register of sight impaired and severely sight impaired children and young people who are ordinarily resident in its area.”
Lord Low of Dalston
My Lords, the amendment would introduce a new clause after Clause 36, requiring local authorities in England to establish and maintain a register of sight-impaired and severely sight-impaired children and young people ordinarily resident in their area. Perhaps I should declare my interest, which is in the register, as a vice-president of the Royal National Institute of Blind People.
Local authorities have been required to maintain registers of blind and partially sighted people since the introduction of the National Assistance Act 1948. That obligation applied to both adults and children. Following a recommendation in the Law Commission’s report on adult social care in 2011, the Care Bill currently going through Parliament lays a duty on local authorities in Clause 73 to establish and maintain registers of sight-impaired and severely sight-impaired adults ordinarily resident in the area. However, under this Bill, no such obligation exists in relation to sight-impaired and severely sight-impaired children.
The registers, which have been maintained for some 65 years now, play a critical role in enabling local authorities to assess population level need for specialist visual impairment services and support. Evidence indicates that young children and parents greatly benefit from receiving integrated support from an early stage, following identification of a child’s sight condition. Early referral, aided by a robust system of registration, is fundamental to achieving that.
Registers serve three main purposes. First, they provide a local resource to support the local authority and partner agencies with the strategic planning of services. Secondly, they indicate a person’s eligibility for certain benefits. As a matter of fact, under universal credit, children who are registered blind will be entitled to receive the severe disability addition in recognition of the household’s need for greater support. Thirdly, in the case of children and young people, the process of being registered with the local authority assists with early referral to specialist services and support, including help from voluntary groups. The requirement to maintain a register for adults assists local authorities in planning services and meeting individuals’ needs. If the same duty is not placed on local authorities with regard to children, it seems inevitable that the service planning and arrangements to meet the needs of a specific group of children and young people will be less effective.
Existing legal provisions on the maintenance of a register of disabled children are inadequate. The Children Act 1989 states that local authorities “shall open and maintain” registers for “disabled children”, but those general registers are scarcely used and do not meet sensory services requirements. The certification and registration process in relation to those with a visual handicap is unique in its potential to bring health and social care together. The situation for children is even more complicated, because social care and education both need to be involved. For example, early access to mobility training arranged through social care has a profound impact on blind and partially sighted children’s development and ability to benefit from education.
The greatest fear is that, without a statutory basis, registers of visually impaired children could fall into disuse.
On 7 September last year, in response to a Parliamentary Question from Stephen Gilbert MP, the Minister in another place said that:
“A local authority is required to keep a register of disabled children within its area and this will include children who are sight impaired and severely sight impaired”,—[Official Report, Commons, 13/9/12; col. 384W.]
but there, as your Lordships will appreciate, he was referring to the general registers. These registers for all disabled children are scarcely used and many practitioners regard them as obsolete.
Earl Attlee (Con)
My Lords, I am grateful to the noble Lord, Lord Low, for moving Amendment 142A.
The new clause seeks to replicate Clause 76 in the Care Bill, which would establish registers for visually impaired adults. The RNIB has, understandably, raised concerns that such measures for those under 18 are missing from this Bill. I agree with the noble Lord about the critical role of the register in planning services. However, local authorities are already under a duty to maintain a register of disabled children and young people under Section 17 of the Children Act 1989: the noble Lord, Lord Low, referred to the 1948 Act. This register includes blind children and young people; changes proposed through the Care Bill will not remove this duty. The RNIB, and the noble Lord, report that local authorities sometimes neglect their duty to maintain such registers. However, the same risk and difficulty would apply with the proposed new clause. It provides no greater statutory guarantee than that already provided by the Children Act.
We want to ensure that local authorities are effectively meeting the needs of blind or partially sighted children. There are a number of requirements in the Bill that should achieve this. Clause 22 requires local authorities to identify,
“children and young people in its area who have or may have special educational needs”.
Clause 26 requires local authorities to make joint commissioning arrangements that include consideration of the education, health and care provision reasonably required by local children and young people with SEN. Clause 27 requires them to review the special education and care provision that is available locally.
Together, these provide a clear framework that requires local authorities to plan for and meet the needs of children with SEN, including blind or visually impaired children and young people. Following discussion of this issue in another place, the Minister for Children and Families committed to give further consideration to these issues. Officials from the Department for Education met with the RNIB to agree a way forward. As a result, page 36 of the draft SEN code of practice highlights the importance of using the registers to plan services. The code states:
“Local authorities are required under schedule 2 of the Children Act 1989 to maintain a register of disabled children in their area. These registers are particularly helpful for providing data on low-incidence needs that can be difficult to predict from national data sets.”
The noble Lord, Lord Low, referred to low-incidence needs.
I hope this removes any doubt or misinformation that registers of disabled children are somehow no longer required. I hope that the duties in the Bill, along with the additional guidance added to the SEN code of practice, provide sufficient reassurance that we expect, and require, local authorities to identify and meet the needs of children and young people with a visual impairment. I therefore hope that the noble Lord, Lord Low, will feel able to withdraw his amendment in due course.
Lord Low of Dalston
I am grateful to the noble Earl for his response, which I shall want to read with care. At first blush, it does not really persuade me that the case I made when I moved my amendment has been answered. The noble Earl referred to the Care Bill and its provisions but those apply only to adults, not to children. He also referred to the general registers of disabled children which are maintained under the Children Act. However, as I have indicated, these do not seem to work very well and are certainly not visual-impairment specific. They do not, in any way, reproduce the visual-impairment specific registers which we have been used to using ever since the National Assistance Act. There has been long-standing provision for visual impairment registers and I cannot understand the reason for removing it from statutory provision.
The Minister referred to the code of practice and I will certainly want to look at that. Indeed, I will look carefully at the full text of what the Minister has said. However, at first blush, it does not seem to me that a reference to the Care Bill, the general registers maintained under the Children Act or the code of practice really amounts to the same sort of provision as visually impaired people and their organisations have been used to enjoying since the registers were introduced under the National Assistance Act. I do not really understand the reason for removing that provision.
All sorts of discussions have taken place between the RNIB and officials. I have not been involved in them and I would be very grateful if the Minister would agree to meet me to talk this through before Report in the hope that we can get a resolution of this matter. That would avoid the necessity to bring back further amendments which might be of a divisive nature on Report.
Earl Attlee
My Lords, I, or my noble friend Lady Northover, would be delighted to have any meeting as suggested by the noble Lord.
Lord Low of Dalston
I am very grateful to the Minister for that. I have experience of his courtesy and willingness to spend time discussing matters of mutual concern. I should be very glad to take him up on that offer. As I say, I hope that in that way we will be able to reach a resolution that will avoid me having to bring the matter back on Report. For now, I beg leave to withdraw the amendment.
Lord Low of Dalston
“( ) any social care provision which the local authority considers to be necessary in order to meet the needs of the disabled person under section 2 of the Chronically Sick and Disabled Persons Act 1970.”
Lord Low of Dalston
My Lords, Amendment 143 concerns the type of social care provision that should be included in education, health and care plans. Under Clause 36(2), the assessment process for an education, health and care plan should include,
“an assessment of the … social care needs of a child or young person”.
That assessment applies to social care provision from either children’s or adult services, depending on the age of the child or young person with an education, health and care plan. There is no disagreement with the Government in principle. Everyone agrees that an education, health and care assessment should include an assessment of a child’s or young person’s social care needs.
The disagreement concerns which social care needs should be assessed and then included in education, health and care plans. As drafted, the Bill states that following the assessment of social care needs a child’s or a young person’s education, health and care plan—EHC plan—must include the social care provision,
“reasonably required by the learning difficulties and disabilities which result in him or her having special educational needs”.
That is set out in Clause 37(2)(d).
The problem I apprehend with the language in Clause 37(2)(d) is that it is language that cannot be found in any existing children’s or adult social care legislation. I cannot understand why we would want to create a whole new terminology in this Bill when we already have clear definitions in social care law. Amendment 143 is an attempt to address that disparity between existing social care law and the Children and Families Bill. The way in which the Bill is drafted appears to add a new definition of social care on top of the existing duties in social care legislation. That can only cause confusion and uncertainty for council officers and the children, young people and their families who use their services.
Baroness Gardner of Parkes (Con)
My Lords, I support the noble Lord, Lord Low, on this amendment. I have not taken part in this Bill so far because I do not consider myself to be an expert on education and know little about it, but my concern is that, with the timing of the Care Bill being taken in the main Chamber along with this Bill in here, the whole thing might fall between two stools. In responding to the last amendment, my noble friend Lord Attlee said that there might be some duplication. I should say that I would rather see duplication than a hole. It is terribly important that this is taken into consideration. Even for those most in need of special educational support, there seems to come a time when education comes to an end. However, care needs continue in terms of the social behaviour of the person as much as anything else, and that can be quite a worry if someone falls into bad company. It is important that their social condition as much as their mental and physical condition is watched.
The noble Lord, Lord Low, has made the extremely valuable point that this goes right across these different services. For years, I have been involved in health issues, and there is always an argument about whether health or social care should deal with certain problems. Every time, each sector wants to push them on to the other one. If this provision reached over all of the services, as the noble Lord proposes, it would do away with trying to work out how the other fellow should pay for something rather than you. It would be very valuable if we could simplify this area and I therefore support the amendment.
Baroness Hollins (CB)
My Lords, I speak in support of this group of amendments. They aim to achieve equal standing for social care provision in the new education, health and care plans, and they have been ably introduced by my noble friend Lord Low. I pass on the apologies of my noble friend Lord Rix, who had hoped to be able to support these amendments.
Statements of special educational needs specify the special education provision that must be provided by the local authority. The Government have now recognised that health should also be an enforceable part of the new EHC plans, and the Bill has been amended accordingly. But if education, health and care plans are to live up to their name, we need to decide how to put the final piece of this jigsaw in place, which is the duty to provide the social care services that are set out in the plans. This is critical to children and young people with learning disabilities, a significant number of whom need care to help them to achieve their educational and personal aspirations. Let us imagine the position of a parent. They receive an education, health and care plan for their child which sets out all the education, health and social care provision that their child needs. Their child has a legal right to receive the education and health components of the plan, and the parent can hold those agencies to account if the services are not delivered.
However, the social care element seems not to be as enforceable. If the social care services identified in the plan are not delivered, there is nothing that they can do about it. We know that there can be problems with the way in which social care is currently delivered. Ofsted’s thematic inspection of social care for disabled children in 2012 found that social care was not always well co-ordinated and that many social care plans were not detailed enough or focused on outcomes. In a small number of cases, children had no plans or reviews were not held. Surely, those are precisely the types of problems that EHC plans are meant to solve.
We know that similar amendments were tabled in the House of Commons. The Minister in the other place said that he saw the rationale for placing the same duty on the provision of social care as for health and education. Therefore, what is the Government’s objection to these amendments? In many ways, they have already done the hard bit. Placing a specific duty on health to deliver the services set out in EHC plans is a major step forward and should be commended. That is why it is hard to understand a reluctance to consider the duty to deliver the social care part of an EHC plan.
As my noble friend Lord Low has helpfully set out, there are existing duties to deliver social care. This seems to be a matter of aligning existing legislation rather than creating a whole new set of duties. Parents’ expectations have been raised. This Bill will create education, health and care plans, and people will expect the plans to be delivered. At the moment, we are only two-thirds of the way there. I urge the Minister to consider taking the final step to create the truly joined-up plans that everyone is hoping for.
Baroness Hughes of Stretford (Lab)
My Lords, I also support this group of amendments and will speak to Amendments 162 and 163 in my name. Although Amendments 143 and 144A, which relate to Clause 37, are about the assessment process, they return to the heart of one of the most important debates that we had earlier in our deliberations; namely, the need to include all the needs of all disabled children. We will turn to the failure of the Bill to be sufficiently comprehensive on Report.
Turning to Amendments 162, 163 and 164, Amendment 164 essentially does the same as Amendment 163. The noble Lord, Lord Low, and the noble Baronesses, Lady Gardner and Lady Hollins, clearly have made the case as to why, in a new system that the Government are proposing in which all three elements of a child’s need—education, health and social care—are being brought together in an integrated system, it is very important that all three elements have the same status in terms of accountability. As the legislation is drafted, ECH plans would offer no more legal entitlement to support from social care services than do statements at the moment. We know that there is a great deal of variability in the extent to which children receive the social care provision that they need, as the noble Lord, Lord Low, has said.
In anticipation of what the Minister might say, he has already said in a letter to Peers that, first, the Government want, if you like, to square off the health provision because the health service is changing dramatically and he wants to make sure that health has a duty alongside the local authority to provide special educational need. That is why the Bill was amended from its first form to include health. I agree with the noble Baroness, Lady Hollins, that that is very welcome. He went to say:
“However for those with social care needs, the section 17 duties”—
in the Children Act—
“are a long-standing means to protect vulnerable children, including those with SEN and disabilities. Social care for vulnerable children under section 17 of the Children Act encompasses a wide range of needs and disabilities to emotional and family problems. It would not be right to prioritise as a matter of course the needs of those children with ECH Plans over all other children in need, for example young carers, asylum seeking children, or children suffering neglect”.
In saying that, the Government are admitting to what we fear, which is that there will not be an entitlement to provision for their social care needs in the way that there will be, under Clause 42, for their healthcare and special educational needs provision.
Are the Government really happy with that? They are proposing an excellent tripartite system. My noble friend Lord Touhig has drawn an analogy in discussions between us on this side of the Committee with a three-legged stool. The problem is that the three-legged stool will have one leg shorter than the other two, so for many families it will topple over because the social care elements—the needs and provisions specified in the plans—will not be enforceable. That is a real problem. It is very important that the three elements are equally visible and accountable and are seen as complementary. The absence of social care from the clause, although possibly technically and legalistically workable, sends entirely the wrong signal to service providers and, in particular, to parents and children. As the noble Lord, Lord Low, said, there needs to be clarity about the parity between those three elements of the service.
Baroness Howarth of Breckland
My Lords, I understand exactly what the Minister means about Section 17, but I cannot understand how that relates to this piece of the Bill. When we were discussing education with the previous Government, I remember being very forceful in saying to them, “You’re saying, ‘education, education, education’, but without ‘welfare, welfare, welfare’, children will not learn”. Unless we attend to the social care needs of children, particularly those children with disabilities, we know that they will not have the facility to learn. We know that unless there is help from specialists or social workers, if you have a child with serious behavioural problems at home, they will never get into ordinary school or even be able to survive properly in remedial school, and will end up in specialist residential care. That whole range of services will be needed as part of the social care package for those children.
As the noble Baroness, Lady Hughes, said, we are encouraging the Government to look at the whole, to get the thing together, to look at welfare alongside education and to look at how the two things interrelate. Those children will all have healthcare needs as well; very few children with those sorts of disabilities will not have healthcare needs. I thought that the Government wanted to pool all those services together in the interests of those young people.
Under Section 17, one would certainly not want children needing protection or suffering from neglect falling into a different priority; the local authority must look at them across the piece. I think that the word “must” helps them to do that, but having something in the Bill for those young people at least encourages local authorities to look at the whole.
Baroness Sharp of Guildford
My Lords, I have added my name to Amendment 164 and I endorse what has been said on this issue by the noble Baronesses, Lady Hollins, Lady Hughes and Lady Howarth. The aim of the Bill is to create not just a special educational needs statement but something that embraces health and social care as well. It is absolutely right that we should put social care on a par with health. Clause 42(3) states:
“If a plan specifies health care provision, the responsible commissioning body must arrange the specified health care provision for the child or young person”.
The other place insisted that this subsection should be included, so it seems right that social care should be put on a par with healthcare and education in the Bill.
Lord Nash
My Lords, I would like to respond to this group of amendments regarding the placing of a legal requirement on local authorities to secure the social care provision specified in EHC plans. I welcome the opportunity to debate this important issue and I understand the desire to ensure that our most vulnerable children and young people receive the support that they need and are able to seek redress where necessary. I thank the noble Lord, Lord Low, my noble friends Lady Gardner and Lady Sharp and the noble Baronesses, Lady Hollins, Lady Hughes and Lady Howarth, for speaking on this matter. However, as my honourable friend the Minister for Children and Families noted in the other place, there are already important protections for children and young people aged under 18 in the existing legislative framework for social care support. That is provided in Section 17 of the Children Act 1989, and for disabled children under Section 2 of the Chronically Sick and Disabled Persons Act 1970. Both these Acts will still apply alongside the measures being introduced in the Bill.
Lord Nash
The duty under Section 17 of the Children Act 1989 to meet the needs of all children in need is a general duty in recognition of the fact that social care needs are potentially limitless and that local authorities have to be free to decide how to prioritise spending on them, depending on resources. There is individually a duty under Section 2 of the Chronically Sick and Disabled Persons Act 1970, but that too is subject to resources.
Baroness Howarth of Breckland
I apologise for intervening. Having been a director of social services and having had to set those priorities, I understand completely what the Minister has said, but what I do not understand here is that if all these things are already set out in statute and are “may” duties, not “must” duties, as the noble Baroness, Lady Hughes, pointed out, why can we not pull them all together in this Bill? It would make it a fine Bill rather than a good Bill. Nothing is being added if the Minister is saying that the Chronically Sick and Disabled Persons Act and the children legislation already have these things. Are the local authorities not going to have to set their priorities anyway?
The other point I want to make is that we will have education and health but not social care; social care will again be relegated as the poor relation. I have not seen how the pathfinders have looked at this, but if they have considered them all as one, that would be a good indicator of the way forward.
Baroness Hughes of Stretford
Before the Minister responds, perhaps I may also give him the opportunity to deal with a point. He seems to be making a distinction between social care, special educational needs and healthcare. He said that there is a general duty in the Chronically Sick and Disabled Persons Act because social care needs, and therefore duties, are essentially limitless. That is why local authorities must be protected so that they can decide their priorities in the context of their resources. However, surely the same argument could be made about healthcare. Health needs and their care are essentially limitless, so the health service has to decide on its priorities in relation to its resources. Yet here the health service “must” provide the services set out in the plan while the same does not apply to social care. I do not see the distinction, certainly not between social care and healthcare in regard to the point about being essentially limitless.
Lord Nash
I am grateful to both noble Baronesses for their interruptions. As I said in my letter—and will now elaborate on a little—the reason is that we do not wish to imbalance the system so that giving children EHC plans results in deprioritising other children, given a climate of limited resources, which we all know —I hope—that we live in.
It is expected that any social care service specified in the EHC plan will be provided. We do not want to create a situation where local authorities specify only a bare minimum of services, because they cannot know the precise resource constraints that may apply in the future.
Noble Lords will be aware that the Bill places a duty on health commissioners—taking the point of the noble Baroness, Lady Howarth—to deliver the health elements of an EHC plan. As part of the SEN reforms, the Government have agreed to take specific action to protect children and young people with EHC plans within the newly reformed NHS. The education and health services are universal and it makes sense that there should be equivalent duties to provide the services in EHC plans. On the other hand, social care support for children in need is targeted only at those with greater needs, of whom disabled children form a significant proportion. As I said in my letter, to which the noble Baroness, Lady Hughes, referred:
“There is a greater risk that an individually owned social care duty for children with EHC plans will adversely affect other vulnerable children whose needs could be deprioritised, such as those needing child protection services or young carers”.
Social workers must be free to consider family, educational, social and environmental circumstances and local eligibility criteria when determining which services to provide. Local authorities with finite resources must be able to prioritise appropriately those children and young people with the greatest needs, whether or not they are disabled or have SEN.
Baroness Sharp of Guildford
I apologise for interrupting the Minister again. The amendments concerned say that it is where the plan specifies social care; it is not an open sesame to any sort of social care. If what is specified can be overruled anyhow, what is the point of having a plan that specifies it?
Lord Nash
As I have said, there are very significant duties around disabled children. The plan is not intended to affect that. Amendments 162, 163 and 164 would prevent such local decision-making, to which I have just referred, creating an individually owed duty prioritising the social care needs of children with SEN over the social care needs of other children in need.
Similarly, Amendments 143 and 144A should not stand. Social care provision is defined deliberately broadly in the Bill. Clause 21(4) includes any provision required under the Children Act 1989 or the Chronically Sick and Disabled Persons Act 1970 and therefore will be included in the design of the local offer. It is only where that provision is reasonably required by the learning difficulty or disability of a child or young person that it will have to be included in the EHC plan.
Amendments 143 and 144A would require any services provided under the 1970 Act to be included in the EHC plan. However, the vast majority of services for disabled children that are provided under the 1970 Act will be reasonably required by the learning difficulty or disability of the child and therefore must be included in the EHC plan anyway.
On Amendment 143, moved by the noble Lord, Lord Low, we are not convinced that there should be a requirement that all services provided under Section 2 of the 1970 Act must be included in EHC plans regardless of individual circumstances. EHC plans are for children and young people with learning difficulties or a disability that gives rise to special educational needs. Where this also gives rise to health and care needs, that must be included in plans so that a co-ordinated approach can be taken across services. Where there are unrelated health or social care needs, it may or may not be appropriate to also include them in an EHC plan, for example, depending on whether the child or young person would benefit from a co-ordinated service response. I believe that those decisions should be left to local professionals, in full consultation with children, their parents and young people.
At the same time, Amendment 144A would remove the important discretion the Bill gives to the local authority to decide whether provision made under Section 17 of the Children Act should be included in the plan, where it is unrelated to the child or young person’s learning difficulty or disability. This discretion is essential as there may be circumstances where the children’s interests that we are trying to meet require that we do not bind the hands of local services in this respect—for example, where there is provision related to child protection, which is highly sensitive and is not always appropriate to include in an EHC plan. Whether or not social care provision is linked to the learning difficulty or disability of the child or young person, it will continue to be provided in accordance with existing legislation.
Concerning my noble friend Lady Gardner’s point about there being a possible gap between adult and children’s social care, I reassure her that young people aged 18 and over who are eligible for adult social care will, under provisions set out in the Care Bill, have a statutory care plan. For young people with SEN, our intention is that this should form the care element of the EHC plan. Both Bills contain provisions that will significantly improve the transition between children’s and adult social care. In view of what I have said, I urge the noble Lord to withdraw his amendment.
Lord Low of Dalston
My Lords, we have had an extremely good debate with some very cogent contributions from everyone who spoke in support of the concept enshrined in this group of amendments: that there is not a lot of point in specifying provision if there is no possibility of enforcing it. As I see it, my amendments were seeking only to give effect to the integrated approach between education, health and social care that has been the Government’s vision ever since they published the Support and Aspiration Green Paper.
Initially, the Bill simply contained provision for education but the department was badgered about putting in an integrated approach, so it badgered the Department of Health and, in due course, got it to cave in. A health provision was put in but, for some reason, we do not seem to have had the social care provision inserted at the point of provision. That seems extremely odd since, as has emerged in the debate, there are already provisions in the Chronically Sick and Disabled Persons Act for ensuring the provision of social care services anyway. I am not quite sure what the difficulty is in delivering social care, when there are already those statutory obligations in that Act to lock this legislation on to. It seems clear that there should be no difficulty in bringing in the social care provision, using the Chronically Sick and Disabled Persons Act as the vehicle.
The fact that needs are limitless and that it is wrong to privilege some children over others has been advanced by the Minister as a reason for not unifying the legislation. However, it seems to me that that splits off the enforceable obligations relating to social care at the wrong point. As the noble Baroness, Lady Sharp, said, if social care provision is specified in the plan then it should be provided. Otherwise, what is the point of the plan? If the authority thinks that it cannot provide certain services or cannot make certain kinds of provision, it should not put them into the plan. Providing for things to be specified in the plan without providing the legislative framework for securing the provision seems to be a mistake, and that view has prevailed throughout the debate.
There has been a strong head of steam in the debate about the need to provide an integrated legislative framework for enabling the enforcement of the social care provision specified in plans. The Committee has spoken strongly and pretty much with one voice on this, so we will need to return to it on Report. For now, I beg leave to withdraw the amendment.
Lord Touhig
“( ) any provision deemed necessary to be made available to the family of the child or young person which may assist in the promotion of the wellbeing of the child or young person concerned.”
Lord Touhig
My Lords, Amendments 144 and 146 are tabled in my name and that of my noble friends Lady Hughes and Lady Jones and Amendment 175A in my name only.
Clause 37 deals with EHC plans and subsection (2) specifies what should be in the plan. Amendment 144 states that the plan should specify any provision necessary to the family of the child or young person. As with a number of other amendments, it seeks to place the capabilities of the child or young person’s family at the heart of any assessment process, which is important in properly informing the provision that they may need to have specified in an EHC plan.
It is prudent that family life and home life are considered when the provision is made. Families are key to the well-being of children and young people with special educational needs and disabilities and to ensuring that they reach their full potential. They are a crucial resource in improving the outcomes of those children and young people and we should not overlook them. In the other place, the Minister said that EHC plans should describe the range of services that are needed to meet the needs of a child or young person and that the focus of plans must be the child or young person. He cited other things that would benefit parents and families, such as short breaks or the provision of transport. He said that the Government did not think it necessary to add anything specific to the legislation but would continue to develop the code of practice. I am not sure that he is right in that respect, but I am encouraged that the Minister said that he will look again and reflect on Amendment 131, tabled and spoken to by my noble friend Lady Jones. As that is very similar to Amendment 144, he might care to reflect on Amendment 144 at the same time and give us some good news afterwards.
Amendment 169 is tabled in response to the report of the Delegated Powers and Regulatory Reform Committee on this Bill. The Government have not tabled any amendments in response to the report, so I hope that the Minister will take this opportunity to explain how the powers will be used.
I turn to Amendment 175A. All too often, we hear of the adversarial struggle that parents face to obtain the right support for their children. If anybody has any doubt about that, I suggest a five-minute conversation with the noble Baroness, Lady Browning, who will enlighten them about the way parents often have to struggle on behalf of their children. The stated intention of the Bill is that it will make it easier for families to get the support they need. That is a noble intention.
However, an oversight in the Bill about what happens when a family moves is causing great uncertainty and anxiety to a great number of families and support organisations. We all know the terrible struggle that families with children and young people with special educational needs and disability too often have to go through to access vital services. Seven out of 10 parents of children with autism, for example, say that it has not been easy to get the educational support that their child needs.
Without Amendment 175A, such families will continue to have to struggle to access the services that they desperately require. The Bill currently perpetuates the status quo, whereby when families move from one local authority area to another, they do so without any clear idea as to what support their child might receive. They can also face the prospect of costly legal battles, with the appalling result that children and young people end up missing out on education while such battles are fought.
In many cases, parents feel trapped. A parent told the National Autistic Society—here I declare an interest as a vice-president of the National Autistic Society—that they feared moving because,
“we would have to start the assessment process from scratch, even though Mohammed has very complex needs. The stress of doing that all over again, along with the risk that we might lose his place at his current school is terrifying for us”.
It cannot be right that, should the family move, they might have to restart the assessment process, potentially disrupting the education and healthcare of children and young people.
The amendment is intended to echo existing clauses in the draft Care and Support Bill, which set out a local authority’s responsibility both when someone moves into the area and when someone moves out. It is impracticable to expect local authorities to replicate exactly the provision agreed by a different authority. However, it should be expected that provision is based on the previous assessment and agreed outcomes rather than starting from scratch. The positives of such streamlining are manifest: withdrawing the shadow of fear for families that they may have to undergo complex assessments for a second time; and ensuring crucial continuity of provision of services for children and young people.
Regulation 3, paragraph 15, entitled “Transfer of EHC plans”, sets out in detail what should happen when a child or young person with an EHC plan moves to another local authority area. Unfortunately, it makes no mention of continuity provision. I wonder whether the Minister will be prepared to review that. Alternatively, will he commit to, at a minimum, strengthening the regulations that will dictate the portability of education, health and care plans to ensure that there is clear guidance for local authorities and coherence between this Bill and the Care Bill?
As a brief aside, when I served as a Defence Minister, I constantly found that servicemen were reluctant to move, sometimes even when it involved a promotion, if they had children with special educational needs and their children were statemented, because they had to go through the whole process again. We were working on a plan for a statement passport. Unfortunately, I had a phone call from No. 10 and Mr Blair awarded me the DCM—don’t come Monday—so I was no longer a Minister and was unable to take that forward. However, there is merit in having such a passport. By ensuring that education, health and care plans are portable across local authorities, we will ensure continuity of service. I think that we all want that, and, therefore, I beg to move.
Baroness Howe of Idlicote
My Lords, I have tabled two amendments in this group. Before I speak to them, I want to say how impressed I was by what the noble Lord, Lord Touhig, had to say about his amendment, which I certainly fully support. It is important that movements by families of this kind should be facilitated and that they receive the same care as they would have, had they stayed where they were.
Amendment 147 would insert a new subsection after Clause 37(4) stating that:
“In making a decision for the purposes of this section in relation to a young person aged over 18, a local authority must seek psychological advice from an educational psychologist”.
I have tabled the amendment to explore two specific concerns about this clause. The first is about the support available to young people with special educational needs aged between 19 and 25. Although educational psychologists principally work with children and young people aged from nought to 19, the profession is increasingly supporting young people over the age of 19 in a number of settings, including the further education sector. Currently, educational psychologists across the country are playing an important role in supporting these young people. However, under the provisions of this clause, it is not clear what role educational psychologists will continue to play in post-19 settings, and how this will be promoted. The proposed age extension to 25 years has been welcomed for the assessment process, but that will need careful workforce development planning to ensure that young people aged 19 to 25 years are well supported by a sufficient number of educational psychologists in future.
It would certainly be helpful if the Minister, when he replies, could set out clearly how he envisages the new proposals helping educational psychologists to contribute to supporting young people. It would also be useful if he could explain the impact of the changes on future workforce development. The Government clearly need to ensure that enough educational psychologists are being trained to meet future demand. I would also like some clarification on the role of educational psychologists in the assessment of children and young people who come in from outside the system; that is, if they have moved to the UK from abroad. Under the current proposals, it is unclear how these children and young people will be supported. I hope that the Minister will be able to provide us with adequate reassurance on this important issue.
I turn now to my second amendment, Amendment 168, which would amend Clause 44, headed “Reviews and re-assessments” by inserting a new subsection:
“Following a review of re-assessment, a local authority has to seek psychological advice from an educational psychologist”.
One of the reasons that this whole area is coming to the forefront of our discussion is the increasing emphasis being placed on mental health problems. I hope that this issue is being taken more seriously than perhaps it was in the past.
I am encouraged that the Bill will retain the existing protections for parents, including an explicit right for them and for the school to request education, health and care plans. I know that during scrutiny of these clauses in the other place, the Minister for Children confirmed that under the proposals, there will be access for all children and families to specialist services such as educational psychology on an equitable basis. Currently, under statute, a reassessment of SEN follows essentially the same process as the initial assessment. If a child or young person’s needs change, a further assessment can be requested and, if carried out, the local authority must comply with all the statutory requirements, including meeting time limits and consulting with professionals as specified in the regulations; that is, educational professionals, educational psychologists, social services and health services.
However, under the Bill, a new concept of reassessment is now being introduced which allows a local authority to determine the format of the reassessment. Local authorities will no longer have the same duty to consult and obtain evidence from designated professionals and can choose to review only a specified aspect of the EHC plan. Although the code of practice states that reassessment must follow the same process as an initial assessment, I know that there are concerns that under the Bill, there is no guarantee that EPs will be consulted when a reassessment takes place. The fact that children and young people undergo a reassessment because there is a significant change in their needs makes it more important that educational psychologists are involved, to ensure that the child’s voice is considered. Educational psychologists will also work with parents and schools to ensure that the right support is found for the child.
Lord Lingfield
My Lords, I have one amendment in this group, which is to Clause 37(5). It is to provide a standard form of education, health and care plan rather than use the more discretionary wording of the Bill. At the moment—and this touches on the point made by the noble Lord, Lord Touhig, concerning passports for special educational needs—statements are in a standard form. If there is no similar standard form for education, health and care plans they will surely be subject to each local authority’s drafting preferences. As a result, EHC plans may not be in a consistent format and may vary widely in their level of detail. This could cause confusion and difficulty for parents and young people, especially if they move from one local authority to another. Relocation of this kind, under current economic circumstances, is becoming extremely common.
Your Lordships will have noticed, in relation to Clause 30, and the local offer, that there are strong arguments for a consistent national framework for the key tenets of the new system of assessment and provision brought in by the Bill. In addition—as the Minister reminded us when we debated Amendment 71—in his appearance before the Education Select Committee on 6 November last year my honourable friend the Parliamentary Under-Secretary of State for Children, Schools and Families stated:
“The first thing I want to be absolutely clear about is that the current protections that parents and young people have in the current statementing system are intended to be carried forward into the new system”.
In the spirit of this, and as I sought to express in this amendment, I believe that these key duties relating to statements should remain the same for EHC plans, and that, in particular, the requirement for a standard form, and the duty to be specific about provision, should remain. I hope that the Minister will be sympathetic to this.
Baroness Sharp of Guildford
My Lords, my name is added to that of the noble Baroness, Lady Howe, for Amendment 147 and I endorse what she has said on this issue. Statements for special educational needs require an educational psychologist to endorse them and it is obviously sensible and important that this should be extended to the post-18 age group. I probably also should have put my name to Amendment 168 because the argument there is just as cogent and important.
While I am on my feet, I should say that I have a lot of sympathy with the amendment in the name of the noble Lord, Lord Lingfield. As he said, as we have a set format for statements of special educational needs, it would seem sensible for it to be carried forward in relation to the EHC plans.
Lord Addington (LD)
My Lords, perhaps I may very briefly add a few words of support, particularly to the last amendment in this group. Good transference of these provisions around the country would be an opportunity for the Government to deal with a fairly ancient wrong. It has always been difficult and has always been seen as too difficult, but if we can embrace it now we will go forward and take on board something which runs through a lot of this legislation; namely, that it has genuine cross-party awareness and support at heart. Even if this amendment is not perfect—even the noble Lord can make an error in drafting—I hope that we can say something positive in this regard. If we can go forward and see how it can be addressed in the future, that would help everyone and would probably make people’s lives a little bit easier.
Baroness Whitaker (Lab)
I speak in support of Amendment 175A in the name of my noble friend Lord Touhig. I have in mind a particular group of children with disabilities who move and I am not sure whether this amendment exactly covers them. If the Minister is going to say that Clause 47 covers the concerns of the noble Lord, Lord Touhig, will he clarify whether Clause 47, or the new clause proposed by Amendment 175A, would cover the situation of travelling children? This might be the child with disabilities of a showman who is based in one area, say, for three or four months over the winter, and then moves every few weeks to wherever the parents’ have work. The care plan needs to be transferred to each local authority. I had thought that Clause 47 might cover that, so my first question for the Minister is: is that covered? My second question is: if he entertains my noble friend’s amendment about children who move residence, as opposed to moving where they live from time to time, would that cover the situation of travelling children who return to a base but only once a year?
Earl Attlee
My Lords, I am grateful to the noble Lord, Lord Touhig, and other noble Lords who have either moved or spoken to amendments concerning education, health and care plans. I welcome the opportunity that these amendments give to discuss the EHC plan, as it is a vital part of our reforms. For the first time, it will provide a single plan across the whole nought-to-25 age range, and will be focused on how education, health and care services will work together with families and young people to secure improved outcomes for children and young people.
Turning first to Amendment 144, I share the concern of the noble Lord, Lord Touhig, to ensure that family support is included in an EHC plan. The EHC assessment process will consider the needs of the child or young person across education, health and care, including the circumstances of the family where there are social care needs for someone under the age of 18. For example, if, based on family circumstances, social care provision is required under Section 17 of the Children Act 1989 to meet the child’s special educational needs, it must be specified in the plan.
The existing duties will continue to mean that children and young people receive the assessment they require for their needs, supported by the new duties, in Clauses 25 and 26, for local authorities and the health service to integrate and jointly commission services for children and young people with SEN, and by chapters 4 and 7 of the draft code of practice, which focus on multi-agency working to produce a joined-up EHC plan.
I turn to Amendment 147. The noble Baroness, Lady Howe, is right to want to ensure that educational psychologists are involved in decisions about EHC plans for young people aged over 18. Doing so will assist local authorities in making evidence-based decisions on whether remaining in education will be the best option for individual young people and whether they continue to need special educational provision.
This is why we have already made it clear in Regulation 6(1) of the draft assessment and plan regulations that educational psychologists, along with other relevant professionals, must be consulted when local authorities are carrying out an assessment for an education, health and care plan for any child or young person, including for young people aged over 18. Further detail on that is set out in section 7.7 of the code of practice. The noble Baroness raised quite a few detailed points, and I think that it would be better if my noble friend Lady Northover wrote to her on those. She asked about the training of educational psychologists. The Government carried out a review of training in 2011 and, as a result, has put the arrangements for their training on to a secure basis, including central funding for the National College for Teaching and Leadership.
I fully understand the intention of my noble friend Lord Lingfield through Amendment 147B. It is vital that EHC plans provide consistent, clear and specific information on outcomes and provision. Draft assessment and plan Regulations 11 and 12 and chapter 7 of the draft code of practice set out detailed requirements and expectations about the preparation and content of EHC plans to ensure consistency, including that provision should be specific, detailed and quantified. In addition, Section 3.3 of the code provides details on the information, advice and support that must be provided, including trained independent supporters where appropriate.
My noble friend commented on the format of the plans. I repeat the commitment of the Minister for Children and Families to protect existing rights and protections. That certainly includes being specific about the provision to be made. However, I am not convinced that a standard format is itself a right or protection. It is better to leave flexibility to design plans around the needs of parents, children and young people.
I do not believe that it is helpful to have prescription in the form of a standard template. We have left flexibility for local areas to design EHC plans best to meet local needs. To ensure consistency, we have included in section 7.9 of the draft code of practice a list of the key information that every EHC plan must include in distinct sections, including arrangements for monitoring progress. Having skimmed it a few hours ago, I have to say that it is comprehensive. We have also been working closely with pathfinders to develop and publish example EHC plans.
The Countess of Mar (CB)
My Lords, the Minister said that he was against having a statutory form to satisfy local needs. I thought that we were talking about children’s needs.
Earl Attlee
We are talking about children’s needs, and local authorities will need to ensure that their template and the way that they do it suits the needs of their children. What we do not need is central government dictating exactly what the template will look like.
Government Amendments 148 and 149 enable regulations to make provision about amending and disclosing education, health and care plans. Equivalent provisions currently exist in paragraphs 2A(5) and 7 of Schedule 27 to the Education Act 1996. The amendments also require that any amendment to the plan applies to Clause 33, which requires that children and young people with a plan be educated in mainstream provision other than in specified circumstances.
Having the ability to make amendments to plans will ensure that local authorities will retain the flexibility to make minor amendments to keep plans up to date without the need for a full review or reassessment—for example, when a particular outcome in a plan has been achieved. Assessment and plan draft Regulations 26 and 27 set out how we would propose to use the powers on amendment, including requiring that local authorities consult fully with the parent or young person.
Regarding the regulation-making power and disclosing EHC plans, our proposed new regulations are in assessment and plan draft Regulation 17, which will be laid following consultation, subject to noble Lords’ approval of these amendments. The regulations ensure that sensitive information in EHC plans must be protected and can be disclosed only with the child’s or parent’s or young person’s consent except in specific circumstances, such as to share with schools and colleges.
Lord Touhig
My Lords, we have had quite a wide-ranging debate and the Minister has had to cover a huge number of issues in his response. I am sure that all noble Lords will want to read Hansard and reflect on his comments to decide whether there is any purpose in taking these matters further. As regards the amendments to which I directly spoke, the Minister’s answer on Amendment 144 was not quite what I had expected, but I will look carefully at what he said in Hansard. On Amendment 169, the Delegated Powers and Regulatory Reform Committee report on the Bill said:
“We invite the House to ask the Minister better to justify the scope of the powers conferred by clause 44(7)(b) which to us, in the absence of an explanation, appears to be inappropriately wide”.
Again, I am sure that I will not be alone in studying the Minister’s reply to see if he has satisfied any concerns. Amendment 175A seeks to ensure portability. I was encouraged because the Minister was nodding vigorously while I was speaking, so I had much hope that we would be going in the direction that I want. Again, I will look carefully at his remarks in Hansard to see whether there is any need to pursue this matter further on Report. I am grateful to all noble Lords who have taken part. We have had a very good debate and I beg leave to withdraw the amendment.
“(6) Regulations under subsection (5) about amendments of EHC plans must include provision applying section 33 (mainstream education for children and young people with EHC plans) to a case where an EHC plan is to be amended under those regulations.”
Lord Lexden
“(f) an independent school”
Lord Lexden (Con)
My Lords, in moving Amendment 153 I shall speak also to Amendments 157 and 159. In doing so, I declare my interest as president of the Independent Schools Association, a body representing the heads of some 300 smaller and less well known independent schools that form part of the Independent Schools Council, of which I was once the general secretary. The amendments are short and straightforward, and I do not need to detain the Committee long in outlining them.
The purpose of Amendment 153 is to remove all doubt and achieve absolute clarity on a crucial point that seems to be generally agreed in actual practice; namely, that parents and young people will be able to make representations for any independent school to be named in an EHC plan, not just those on the list approved by the Secretary of State under Clause 41. The Explanatory Notes to the Bill expressly state at paragraph 216 that:
“Parents and young people will … be able make representations for an independent school or post-16 independent specialist provider not included in this list as is the case under the current legislative framework”.
My noble friend Lord Nash, in a letter to Mr Barnaby Lenon, the current chairman of the Independent Schools Council, also stated:
“I can assure you that parents and young people will still be able to make representations for independent schools that are not on the list approved under clause 41 of the Bill, and the local authority will … need to consider those representations”.
Finally, I shall quote from the recently published draft SEN code of practice, to which much reference has been made in these debates:
“Parents and young people may also make representations for places in non-maintained early years provision or at independent schools or Independent Specialist Providers … that are not on the list mentioned in (f) above and the local authority must consider their request”.
All that seems clear enough; indeed, complete unanimity could hardly be more clearly expressed, and yet Clause 38(3)(f) provides that the right of parents and young people to make representations for an independent school can be exercised only in respect of,
“an institution approved by the Secretary of State under section 41 (independent special schools and special post-16 institutions: approval)”.
That list, of course, does not include all independent schools so the unanimity so clearly expressed in the Explanatory Notes, in my noble friend’s letter and in the draft SEN code of practice is not reflected in the Bill itself. That is the point.
Lord Touhig
My Lords, I will speak to Amendment 158 in my name and in the names of my noble friends Lady Hughes of Stretford and Lady Jones of Whitchurch, and to Amendment 161 in my name.
Clause 39 deals with requests for particular schools or institutions in EHC plans. As drafted, the clause sets out that if the school requested is unsuitable for the child, or incompatible with either the provision of efficient education for others or the efficient use of resources, the local authority will ensure that the plan names a school or specifies the type of institution which could be appropriate. This amendment would ensure that parents agreed with the school chosen by the local authority when their first choice did not work out, before the local authority is able to name the second choice school in the EHC plan. This issue has already been discussed in relation to a previous clause.
It is, shamefully, already the case that some schools unfairly reject children with special educational needs; the Bill would continue to allow them to do so. I have been taking part in the Lord Speaker’s outreach programme and not so long ago I visited a school. I looked through the school’s prospectus, which said, “We welcome children with disabilities and special educational needs”. The next sentence started, “However”. That is, I fear, too often the case. Concerns have already been expressed about this issue by other noble Lords—notably, at Second Reading, by the noble Baroness, Lady Grey-Thompson. This amendment would ensure that, where parents try to name a school and a local authority relies on an exception under subsection (4) in order to refuse to name that school and then puts forward another school, the second choice school can only be named on a plan if the young person or parents agree.
I turn to Amendment 161. Clause 41 enables the Secretary of State to approve certain institutions, such as independent schools, for the purpose of enabling the institution to be the subject of a request to be named in an EHC plan. Subsection (5) gives the Secretary of State power to make regulations about giving and withdrawing approvals. This amendment would require the regulations to also set out the rights of appeal, the timetable for that and what the relationship with the local offer will be in such circumstances.
A similar amendment was tabled by Robert Buckland MP in the House of Commons. Robert Buckland was my Conservative opponent when I was first elected to Parliament. He is now chairman of the All-Party Group on Autism and is a doughty champion of people with special educational needs. He has done a tremendous amount of work and many of his arguments are well worth listening to. When he argued this in the other place, the Minister said that:
“The indicative regulations set out the procedures and timetable for the Secretary of State to follow on approving institutions … Regulations 5 and 6 set out the procedures for the Secretary of State to follow in withdrawing approval.”
However:
“The regulations do not set out procedures on how to appeal or review the Secretary of State’s decision”.—[Official Report, Commons, Children and Families Bill Committee, 16/4/13; col. 508.]
The Government appear to believe that such regulations are unnecessary. Consequently, without this amendment, families and young people are left without a route of appeal in such circumstances. That is a serious omission from the legislation which serves to undermine the power of children, young people and their families to get the best for their youngsters’ needs. The Minister’s colleague did not see the merits of that argument when it was advanced by Robert Buckland in the other place: I hope he will be convinced by it in this place.
Baroness Perry of Southwark (Con)
My Lords, I very much support the amendment in the name of my noble friend Lord Lexden. I recently spent a day at Gretton School in Cambridge: an independent school entirely for children across the whole range of autism. Some of the most severely autistic young people are in classes of four and five. At the end of my visit, I took my hat off to the patience and skill of the school’s teachers. As I said, it is an independent school; it also offers boarding. It takes children from a wide range of local authorities from the eastern and East Anglia regions. Most of them come with statements from their local authorities and are supported by them, but many parents have to pay additional fees for boarding. Gretton School and others such as those my noble friend described have an important part to play in the range of offerings for disabled children. It is important that they are named in the Bill, as otherwise local authorities may simply assume that they cannot be included in EHC statements. I very much hope that the Minister will look sympathetically at these arguments.
Lord Addington
My Lords, perhaps I may briefly add something. It has been a tradition that the independent sector has periodically supported the state system in specialist areas. If we are to use specialist support and help here, then making sure that it is stated up-front that that is possible will probably be more helpful than otherwise.
Lord Nash
My Lords, this group of amendments concerns independent specialist provision. I thank all noble Lords who have spoken in this debate. I particularly thank my noble friend Lord Lexden for his Amendments 153, 157 and 159, which seek to ensure that independent schools, including those specially organised to cater for children with special educational needs, continue to play an important part in SEN provision.
Currently, parents can request that a maintained school is named in a statement of special educational needs. The local authority is then under a qualified duty to name that school and, if so named, the school has to admit the child. The Bill extends to young people the right to ask for a particular institution to be named in an EHC plan and the coverage is extended to a wider range of institutions. Parents or young people will also be able to ask for an academy, including a free school, a further education or sixth-form college, a non-maintained special school or an independent institution approved under Clause 41 to be named in an EHC plan. The local authority will then be under the same qualified duty to name the institution and the institution will be under the same duty to admit the child or young person. For this change to be of real benefit to parents and young people, it is important that, when a parent or young person requests one of these institutions, the local authority is under a qualified duty to name that institution in the EHC plan and that the institution is under a duty to admit the child or young person.
Turning to Amendment 153, I understand my noble friend’s desire to ensure that parents and young people can ask for any independent school to be named on an EHC plan and not just those on the list under Clause 41. I reassure my noble friend that parents and young people will be able to make representations for any independent school, and the local authority must consider their request. In doing so, it must have regard to the general principle in Section 9 of the Education Act 1996 that children should be educated in accordance with their parents’ wishes, so long as this is compatible with the provision of efficient instruction and training and does not mean unreasonable public expenditure. Paragraph 7.11 on page 111 of the draft SEN code of practice makes this clear. Of course, the local authority would not be under the same conditional duty to name the school in the EHC plan as it would in the case of an institution approved under Clause 41, and the school would not be under a duty to admit the child or young person.
My noble friend’s amendment would place local authorities under a duty to name an independent school in an EHC plan with no guarantee that the independent school would admit the child or young person, leaving the local authority unable to fulfil its statutory duty to secure the special educational provision in the plan. As we have heard many times from noble Lords in this debate, it is important that children, parents and young people are clear about what they are entitled to. This is key to their confidence in the new system.
Turning to Amendments 157 and 159, I reassure my noble friend that Clauses 39 and 40 require the local authority to consult the institution which might be named in an EHC plan, including an independent special school or independent specialist provider approved under Clause 41. This will allow meaningful discussions, especially if a school or college feels that it cannot make appropriate provision to meet the pupil’s needs. After this consultation, the authority will name the institution that it feels is appropriate. If it is decided that an institution approved under Section 41 is appropriate and that institution is named in the EHC plan, the institution is under a duty to admit the child or young person. It is important to remember that only those institutions that have chosen to apply to be approved under Clause 41 and are subsequently approved will be under such a duty.
Amendment 158, tabled by the noble Baronesses, Lady Hughes and Lady Jones, and the noble Lord, Lord Touhig, seeks to protect the right of children, young people and their parents to choose the school or institution named in their EHC plan. I agree with the intention behind the amendment—the importance of a person-centred system is at the heart of our reforms. The Bill places specific duties on local authorities to consult a child’s parents or a young person while drawing up an EHC plan. Clause 38 requires the local authority to send the draft plan to the parents or young person and to make clear their right to make representations about its contents, including the right to request a particular school or institution. In the event that a parent or young person is not satisfied with the school or institution named in their EHC plan, they have recourse to mediation and an independent tribunal.
Lord Lexden
My Lords, I thank all who have taken part in this brief debate, and particularly my noble friends Lady Perry and Lord Addington for making clear their strong support for the great work that is done in independent schools, particularly those of a specialist character dealing with special educational needs. I listened carefully to my noble friend’s reply, and I thank him for dealing with the points so fully. He will understand that in listening to him I did not extract complete assurance and total satisfaction. I shall read the comments in Hansard in full and consider what further action might be appropriate, as many other noble Lords will be doing. For the time being, I beg leave to withdraw the amendment.
Baroness Sharp of Guildford
My Lords, I shall speak also to Amendments 177 and 179 in my name. In Clause 49, we move to the issue of personal budgets and direct payments. The purpose of these amendments is to probe issues concerning direct payments and personal budgets. The Bill provides an entitlement for schools or colleges to make representations to the local authority when it is considering making a direct payment to a child or a parent. The amendment provides an alarm for local authorities to be able to exercise a judgment about whether to make an individual payment.
Clause 49 gives the parent a statutory right to require the local authority to prepare a personal budget and to meet direct payments, even in circumstances where the school or college does not think that this would be sensible or justified in terms of efficiency or economy. This is not to disparage the vital contribution that parents make, but to suggest that there will be occasions when their wishes would not necessarily be in the best interests of their children or reasonable in the context of an efficient and cost-effective system.
The case has not been made in the pathfinders that the introduction of direct payments to parents will help children with special educational needs. The evaluation of the pathfinders shows that the demand for direct SEN payments to parents has been extremely low. The evaluation states that many commentators are apprehensive about the extent to which this testing should be rolled out to a wider population. Of the 290 direct payments across the 14 case study sites in the pathfinders, 270 out of 290 dealt only with school personal transport. That means that there has been no investigation of the feasibility or desirability of making direct payments to parents for educational elements of the provision, such as the deployment of a special teaching assistant.
The pathfinder information pack acknowledges that personal budgets are more established in social care and health settings than in educational settings. The pathfinders themselves found that schools, colleges and parents were often confused about which elements of funding, in an educational context, could be used as a personal budget to give families more choice and control. The reasons cited for poor take-up are the challenges and complexities in the direct payments offer. Personal transport budgets were in fact by far the easiest to disaggregate. The pathfinder information pack acknowledges that it is essential to have a good market development strategy in place.
A remaining concern for teachers is that the fragmentation of budgets will have a detrimental effect on the viability and quality of services which pupils need to access, and will lead to a lottery of appropriate SEN provision. Teachers are also concerned about the loss of the quality assurance role carried out by local authorities and do not believe that giving individual packets of money to individual parents is the most cost-effective way to deliver the provision to meet needs. The case for direct payments, they feel, has not been proven by the pathfinders.
The warning in the evaluation report that there are reservations about the extent to which testing can be rolled out to a wider population needs to be carefully heeded. Teachers continue to have significant concerns. In a recent survey, 65% of SENCOs—the special educational needs co-ordinators in schools—were concerned about allowing parents to control funding for SEN provision. That is not because teachers fail to recognise the essential role of parents, or their unparalleled knowledge of their child’s individual needs and aptitudes; it is because teachers also recognise that teachers, schools and parents must work as equal partners, with the professional judgments and expertise of teachers respected and valued alongside the contribution from families.
The pathfinders have not, it seems, proven that to be an option that parents are demanding or which teachers have confidence can work, or will benefit the children with special educational needs whom they teach. Demand for direct SEN payments has been low, and many children’s charities believe that the introduction of individual payments will further accelerate the disintegration of specialist services, such as the support services for deaf children, which the Council for Disabled Children is campaigning to save in different local authorities. The case that direct payments will support the SEN reforms in a meaningful way has not yet been proven. I beg to move.
Baroness Jones of Whitchurch
My Lords, we have Amendments 180, 271 and 273 in this group, which I shall address. We have touched on personal budgets in a previous debate. At that time, the noble Baroness, Lady Howarth, spoke movingly about some of the problems experienced by those in adult social care in managing employment challenges when they had to employ staff and the financial complexities of the budgets that they were expected to manage. We understand the concerns that have been expressed and share a number of those that were raised by the noble Baroness, Lady Sharp. We have taken a slightly different approach to the issue. In principle, we support the concept of personal budgets and direct payments, which give parents more flexibility and say over the support that their children get. It is a principle that we have supported for other forms of care in the past.
This is a new area of social policy. We feel strongly that these reforms are based on evidence and are not rushed through. As we know, the pathfinder pilots have been extended and now will not finish before the autumn of 2014. We very much appreciated the chance to meet with some of the pathfinder champions a couple of weeks ago when there were some very good examples of the improved quality of life that personal budgets could bring, as well as some of the difficulties and challenges that they presented.
It seems that the rollout of personal budgets is the least well researched and analysed, not only the impact on the individuals concerned but also on the institutions from which the services will be procured. Our Amendment 180 would build in essential time to reflect and learn from the pilots by requiring regulations to be made by affirmative resolution and a report to be published after the pathfinders have concluded, setting out the evidence and guaranteeing proper scrutiny by Parliament.
It very much feels as though we are legislating on this issue prematurely. Given that we are considering the Bill now, it is not clear how the Government plan to take account of the findings of the pathfinders. There are many things on which we remain unclear—for example, how devolving budgets will work on a practical level; how they will impact on the quality of provision and on costs; and how we can ensure that providers are reliable and accountable. It is also unclear how institutions with devolved budgets—for example, academies—can be required to make a contribution to personal budgets from their own funds. These are some of the issues that we feel need to be debated further.
As we know, interim findings from the pathfinders were published in June. In a subsequent letter, the Minister stated that they show,
“a clear appetite for parents to be involved in the decision making process and to have choice and control”.
However, he also referred to the challenges that the pathfinders faced in implementing personal budgets, particularly direct payments. He stated that the department has established an “accelerated testing group” to make progress in this area. I would be very grateful if he could update us on that work and explain how the conclusions from this group will impact on the provisions in the Bill.
The findings also made clear that there were complexities about resources being calculated and allocated. Such concerns are exactly why we think that these reforms should not be rushed through. We should take time properly to consider the evidence, and we believe that our amendment provides the mechanism to do that.
Our Amendments 271 and 273 reflect some of the concerns flagged up by the Delegated Powers Committee. It stated:
“We take the view that, because these are novel proposals and the whole system of personal budgets will be set out in the regulations, the regulations should be subject to the affirmative procedure at least in relation to their first exercise”.
We agree that these changes are too big and too significant to be dealt with by negative resolution. Our amendments would guarantee a positive decision of both Houses as these regulations go forward.
We are grateful that, belatedly, the Government have agreed with this view and have gone some way to meeting our concerns. However, we feel that our amendments are more comprehensive than those tabled by the Government. I hope that I have persuaded noble Lords that we should delay a decision on the regulations on personal budgets until the pathfinders have concluded and that noble Lords will agree to support our amendments.
Baroness Howarth of Breckland
My Lords, I spoke at more length than is usual for me on this when I raised it, under Clause 30, in relation to the arrangements to assist young people and parents managing a personal budget, should they choose one. I therefore wish to support the noble Baronesses, Lady Hughes and Lady Jones, on Amendment 180. It is clear that some families find that personal budgets bring them freedom, and freedom of choice, but only if they have help in understanding how to manage that budget. I agree with the noble Baronesses that this is little researched, yet we have more information from the adult services which could be looked at. Some of the problems for these young people and for the families of these children will be the same as those experienced by adults who have disabilities. There is no reason why we should not be able to gather that information together and extrapolate from it into some of these areas.
I certainly have grave anxieties about this moving forward quickly, and not only on behalf of the parents and young people. If it is not thought through, in terms of funding, there is a grave danger that educational institutions that depend on payments could find themselves unable to plan; if families have personal budgets with which to pay for the educational element, it could cause serious difficulties. I therefore support the amendment, which moves forward on personal budgets to give families freedom—where there is proper research—but takes it steady so that we do not cause even more difficulties than we already have in the adult field.
Lord Nash
My Lords, I would like to speak to this group of amendments concerning personal budgets and the recommendations of the Delegated Powers and Regulatory Reform Committee on personal budgets and Clauses 54 and 55, on appeals and claims by children.
I first turn to Amendments 180, 271 and 273 and government Amendment 269, which respond to recommendations from the Delegated Powers and Regulatory Reform Committee.
I hope that the noble Baronesses, Lady Hughes and Lady Jones, will be pleased to note that government Amendment 269 to Clause 107 takes forward the advice of the DPRRC, as sought by Amendments 271 and 273. Amendment 269 will require affirmative resolution by both Houses of Parliament for the first order to be made under Clause 49(3) and for affirmative resolution in both Houses, in relation to Clause 54(2), on pilot schemes for appeals by children.
With Amendment 180, the noble Baronesses, Lady Jones and Lady Hughes, also seek assurance that the pilot scheme for direct payments for special educational provision will be evaluated. I am pleased to be able to reassure noble Lords that we are meeting the commitments, given when the pilot scheme was established, to evaluate the scheme. For example, the Process and Implementation Research Report on the pathfinder programme, published by the department in June, includes a standalone chapter on the testing up to March this year.
However, we recognise that there is more to learn. That is why, as the noble Baroness, Lady Jones, mentioned, we established our accelerated testing group of pathfinders, whose work has been fundamental in developing the draft regulations made under Clause 49 and section 7.13 of the draft code. It is also why we have asked the evaluators of the pathfinder programme to deliver a standalone thematic report on this subject in 2014.
The specification for the report has yet to be finalised, but it will involve in-depth work with a small cohort of pathfinders and include further research on how direct payments for special educational provision have operated. In addition to the thematic research, I should stress that this is not the only source of evidence to support this policy. A quick comparison of the indicative code, published to aid consideration of this Bill in the other place, against the consultation draft, shows how far our knowledge and understanding have developed this year. This knowledge continues to grow. Pathfinders are increasingly offering personal budgets to all new EHC plan-holders with a resultant increase in numbers. We have also recently supported the development and publication of an implementation framework, for personal budgets for children and young people, by In Control and SQW, the pathfinder evaluators that are widely acknowledged to be the experts in this field.
We are therefore confident that we will have the knowledge and understanding to make the regulations ahead of the initial implementation of our reforms in September 2014, while accepting through my Amendment 271 that the House must have the opportunity to debate this issue further before we do so.
I turn to Amendments 176, 177 and 179. I completely agree with my noble friend Lady Sharp that schools, colleges and other institutions need to retain control where provision is delivered on their premises. I hope that Regulation 11 in the draft regulations to be made under Clause 49 reassures my noble friend, as it states:
“A local authority may not make a direct payment in respect of agreed provision which will be used or provided in a school or post-16 institution unless the head teacher, principal or the person occupying an equivalent position at the school or that institution agrees”.
Amendment 179 brings the issue of transparency to our attention. I agree that this is extremely important and is a key point of learning from the pathfinder programme, in relation to personal budgets. I hope that I can reassure my noble friend that we have made comprehensive provision in draft regulations and the draft code of practice.
Regulations to be made under Clause 30 will require that the local offer provides information about how to request an assessment for an EHC plan. The draft code of practice builds on this requirement and explains in section 5.2, on page 34, that this should include information about eligibility for personal budgets.
Draft regulations relating to Clause 49 set out the right of parents to request a review and require the local authority to provide in writing the reason for any decision to decline a request for a direct payment. Again, the draft code builds on this requirement. Section 7.12 states:
“The decision making process to establish and agree a budget should be clear and must be open to challenge, with parents able to request a review of decisions in relation to direct payments”.
With these reassurances, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Jones of Whitchurch
Can I just ask for a point of clarification? I thought that the Minister was beginning to say that he agreed with our Amendment 180. That would be lovely, but I just want to clarify the timescale on this. As I understand it, the pathfinders are due to finish in June next year. The Minister then said, I think, that a report would be written by September 2014. Is the idea that when the Houses reconvene in October 2014 they will have before them a report that we would then agree through an affirmative process before the personal budget regulations have gone ahead? That is my question; it is quite simple.
Baroness Sharp of Guildford
I am very grateful to the Minister for his reassurances, about the role that school or college principals might play when direct payments are proposed and it is not necessarily in the interests of either the child or economy and efficiency to proceed along that route, and that the process of decision-making will be an explicit one.
I am also glad to have the assurance that, when decisions are made, they will take account of the pathfinders and that the process will not be put into effect until the full evaluation has been made. I welcome government Amendment 269 implementing the recommendations of the Delegated Powers Committee relating to the positive agreement of the House that we should go forward with this. In the light of this, I beg leave to withdraw the amendment.
Earl Attlee
My Lords, I think that this may be a convenient moment for the Committee to adjourn.
The Deputy Chairman of Committees (Baroness Andrews) (Lab)
The Committee stands adjourned.
House of Lords
Introduction: The Lord Bishop of St Albans
Introduction: Baroness Kennedy of Cradley
Culture: Art House Cinemas
The Earl of Clancarty
To ask Her Majesty’s Government what assessment they have made of the cultural value to the United Kingdom of art house cinemas; and whether they are taking any steps to preserve or promote such cinemas.
Lord Gardiner of Kimble (Con)
The Government see this sector as a key element of the film industry. It attracts substantial audiences and is an important part of cultural cinema-going. That is why the British Film Institute—BFI—which is funded by the taxpayer and the National Lottery, has three strategic priorities: to connect the widest possible range of audiences with the broadest range of films; to support film; and to preserve film heritage.
The Earl of Clancarty (CB)
My Lords, I thank the Minister for that Reply. Does he agree that the Competition Commission’s ruling following the Cineworld-City Screen partnership—that Cineworld should sell one each of its cinemas in Cambridge, Bury St Edmunds and Aberdeen—is misguided and culturally insensitive since it puts at risk the picture houses, including the Cambridge Arts Picturehouse, which hosts the Cambridge Film Festival, and which the BFI calls,
“an exemplary regional ‘arthouse’ cinema”?
Will the DCMS use all its influence to intervene to have this ruling overturned?
Lord Gardiner of Kimble
My Lords, I entirely understand and, indeed, sympathise with the noble Earl’s concerns, but responsibility for regulating mergers falls to the independent competition authority. The Competition Commission has decided that Cineworld, having bought the Picturehouse chain, should sell one of its cinemas in a number of towns. I know that the BFI has already communicated its concerns to the commission, and it is open to concerned parties to apply for a review of the decision to the commission appeal tribunal.
Lord Stevenson of Balmacara (Lab)
The question actually asked was whether the Government will take up this case because it is a grievous and terrible thing to contemplate the loss of three such picture houses. Will the Minister answer the question: will the Government take up with the Competition Commission their concerns, as so adequately expressed by the Minister?
Lord Gardiner of Kimble
I have to repeat to the noble Lord that the Competition Commission is an independent body. The Office of Fair Trading has asked the Competition Commission to look into the matter. Although there is concern and sympathy from many in government, this is now a matter for the Competition Commission, having been instructed by the Office of Fair Trading.
Lord Brooke of Sutton Mandeville (Con)
How many art-house cinemas are there in the United Kingdom?
Lord Gardiner of Kimble
My Lords, my noble friend has hit upon a problem, which is the precise definition of art picture house. There are independent cinemas as well as the mainstream ones. The problem is that a lot of art-house cinemas show mainstream films as well as the more cultural films. However, I think that we are talking about 300 independent cinemas.
Baroness Kidron (CB)
My Lords, I declare an interest as a filmmaker and a recent governor of the BFI. A report last week, Rebalancing Our Cultural Capital, documented the way in which arts funding has shifted towards the capital over several decades. The benefit to a Londoner is now three times that of someone living elsewhere in England, and I think that it is in this context that my noble friend asks the Question. Does the Minister agree that if we are to address this cultural imbalance, we must build on the success of existing art venues, such as the excellent art-house cinema in Cambridge that does so much more than show films? Could the DCMS, through its relationship with the BFI, perhaps find a way of distinguishing between commercial screens and the added cultural value that art-house cinema provides?
Lord Gardiner of Kimble
First, I think that the British Film Institute is doing a great deal of important work, with many programmes. The one that I will mention to the noble Baroness is the BFI Neighbourhood programme, which is part of a programme to help establish and develop up to 1,000 community venues for films across the UK. That is an important feature of what the British Film Institute is seeking to do. In addition, there are of course many other initiatives that the BFI is particularly concerned about, to ensure that there is the broadest range of opportunities for people to see films.
The Earl of Glasgow (LD)
My Lords, these so-called art-house cinemas are very important to the health of the British film industry. They are sometimes the only place where our films ever get shown. Does the Minister fully appreciate the importance of their survival, particularly outside London and the major cities?
Lord Gardiner of Kimble
My Lords, my noble friend is absolutely right. The picture houses are very important, particularly outside London; in particular in Cambridge, which of course is the venue for the Cambridge Film Festival. There are many reasons why these establishments are particularly important. They are part of our global reach, and all film industry is very important for the British economy. That, of course, is why the film industry has the tax relief it does, which is an indication of the Government’s support for it.
Baroness McIntosh of Hudnall (Lab)
My Lords, I declare an interest as a regular patron of the Cambridge Arts Picturehouse. Will the noble Lord consider that perhaps the Government have more of an interest in this issue than he has yet indicated? These picture houses often show live performances of work—for example, from the National Theatre—which is a way in which the public funding that goes into our major theatres is made to work much harder than it would if it depended simply upon people coming into the theatres to see the shows. There is a serious interest here for the Government to consider, which is why it would be a good idea for them to put some pressure on whoever needs to have pressure put upon them to make this happen.
Lord Gardiner of Kimble
The noble Baroness is a champion of Cambridge; I know that Bury St Edmunds in particular also has this feed-in from opera and theatre. I am well aware of the importance of that to many parts of the regions, where it is vital. I have to repeat that there is a procedure that has to be undertaken. Concerns have been raised and, as I said, it is open to interested parties to appeal on this matter. However, the problem is that when we have independence, we must mean independence.
Lord Howarth of Newport (Lab)
My Lords, I welcome the Minister’s restatement of the mission of the BFI. Nevertheless, has he noticed that it remains the case that across town the multiplex cinemas all show the same few films, whereas other films that have had excellent reviews are nowhere to be seen? What more can the Government do to support the better distribution and availability of high-quality films that are not expected to be money-spinners?
Lord Gardiner of Kimble
That is where the BFI very much comes into the equation and precisely where the experts, as I call them, are leading on this particular point—to ensure that the broadest range of films is available to the public. That is one of the key priorities of the BFI, and I hope that it is successful in that quest.
Wales: Financial Powers
(11 years ago)
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Lord Wigley
To ask Her Majesty’s Government what plans they have to give additional financial powers to the National Assembly for Wales.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)
My Lords, the Government announced on Friday that they will implement the key recommendations made by the Silk commission in its first report and will enable the Welsh Government to use their existing limited borrowing powers to improve the M4 motorway as soon as possible. I will issue a Written Statement on this to your Lordships’ House this afternoon.
Lord Wigley (PC)
My Lords, I hope that this Question standing on the Order Paper helped to expedite the long-awaited response from the Prime Minister, which I welcome as far as it goes. Will the Minister confirm that she and the Government accept that the Silk report presented a balanced package, and that cherry picking that package would unravel it? Will she therefore state by when the other 20 or so recommendations that were not covered on Friday will be announced? Will they be in the Statement that she will make this afternoon? In particular, will she give an assurance that the legislation necessary to enact all the commitments that were made on Friday will be on the statute book before the next general election?
Baroness Randerson
I thank the noble Lord for his Question. Undoubtedly the continued interest in this issue from all sides of the House and well beyond it will have had an influence on ensuring that we had a positive response to the Silk commission’s first report. The Silk commission made 33 recommendations but the announcement on Friday did not go into detail on many of those. A full response to the Silk report will be issued in the next couple of months so that we will be able to deal with this by the end of the year. The intention is that a draft Wales Bill will incorporate Silk recommendations that the Government have accepted, where legislation is necessary. The Government intend to pursue that, if possible, in the fourth Session of this Parliament.
Lord Morris of Aberavon (Lab)
My Lords, I was glad to hear the Prime Minister say on Friday that he believed in devolution. I was hoping for the Welsh Secretary to say something on his visit too. Does he also believe in devolution? In the absence of a more equitable allocation of financial resources by Westminster to Wales, do the Prime Minister’s proposals mean that to fund matters such as a Newport road development, Wales will be expected to pay for them out of new Welsh taxes?
Baroness Randerson
The noble Lord has asked two essential questions. My colleague the Secretary of State for Wales has worked extremely hard to ensure that this report has had a positive response from the UK Government. I remind the noble Lord that there was an agreement in October 2012 between the Welsh Government and the UK Government on the future of the Barnett formula. The agreement was that there would be a review process at each spending review, and that if there was future convergence—if that started again—then it would be dealt with by the two Governments working together.
Lord Roberts of Llandudno
My Lords, can the Minister tell me whether the question for a referendum will be devised by the Westminster Parliament or by the Welsh Assembly in Cardiff? Secondly, does she have any idea of a timetable for the referendum and the implementation of whatever it might decide?
Baroness Randerson
I thank my noble friend for those questions. We will provide for the referendum by primary legislation here in Parliament but it will be the responsibility of the Assembly to trigger the referendum, and it is right that the timing should lie in their hands. In relation to the actual question, there will be discussions between the UK Government and the Welsh Government but it will be for the Electoral Commission to study any suggested question and to provide advice, in the way that occurred at the previous referendum in Wales.
Baroness Morgan of Ely
I thank the Government for eventually responding last week in such a positive way to the recommendations of the Silk commission. Will the Minister explain, however, why they failed to grant permission specifically for long-haul air passenger duty and the aggregates levy to be devolved, as recommended by the commission?
Baroness Randerson
I thank the noble Baroness for her question. Regarding the aggregates levy, the noble Baroness will recall that the Silk commission referred to issues associated with that in relation to the European Union and permission for that. Therefore, until that is resolved, it is not appropriate that that goes forward. On long-haul air passenger duty, the Government are not yet persuaded of the case, but I urge noble Lords in general to await the full response in relation to the reasoning behind these recommendations to ensure that there is a full picture, which will come in the forthcoming weeks.
Lord Elystan-Morgan (CB)
My Lords, I would like to ask a general question with regard to the transfer of powers to Scotland, Northern Ireland and Wales. As the Minister will know, in relation to Scotland and Northern Ireland, transfer was on an all-embracing basis subject to a few specific clear exceptions. With Wales, the situation is very different. It is all piecemeal, sometimes involving hundreds of minor transfers over the years. Will the Government look kindly, therefore, upon a proposal that the situation in Wales should equate to that of Scotland and Northern Ireland, thereby bringing cohesion and simplicity and saving a whole generation of Welsh lawyers from constitutional neurosis?
Baroness Randerson
I am aware of the noble Lord’s continued interest in this issue. I am aware, too, that this point has been raised by a number of people. But I remind noble Lords that this is an issue for part two of the Silk commission, and something on which it is already working. I remind noble Lords that the remit of the commission was to look at modifications to the devolution settlement.
European Commission: Staffing
(11 years ago)
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Lord Anderson of Swansea
To ask Her Majesty’s Government what assessment they have made of the number of United Kingdom nationals on the staff of the European Commission.
Lord Wallace of Saltaire (LD)
My Lords, the Government recognise that there is a problem with the level of UK representation among staff working in the European institutions. The UK represents 12% of the EU’s population but makes up only 5% of EU staff, half of whom are expected to retire over the next 10 years. The Government are committed to reversing this downward trend. In the short term, we are increasing the number of civil servants whom we send on secondment to the institutions and, for the long term, we are providing additional support to candidates who are preparing for the concours.
Lord Anderson of Swansea (Lab)
I am sure that the Minister will agree that it is against our national interest that there has been such a dramatic decline in the number of British civil servants in Brussels and that, further, we have not succeeded with one British national in the concours since 2010. Does he not agree that part of the reason must be that able British civil servants are deterred by the constant sniping at Europe on the part of this Government—although not, I may say, on the part of the party that he represents? Could not that be in part allayed by giving a guarantee to any civil servant from the UK who goes to Brussels that they will be able to return if they so choose? That was something that was available when we first joined the European Community, as it was.
Lord Wallace of Saltaire
My Lords, the decline in applicants for the European Commission started before the current Government came into office. It is partly a question of language inadequacy; you have to take the competition partly in your second language. Applicants from most other countries take it in English as their second language, in which they are very often highly fluent; we lack sufficient English, or British, students, who are fluent in French or German, the other two languages. If I may say so, there is no evidence that there has been a decline because of uncertainty about Britain’s future relations with the European Union. May I also say that the noble Lord is misinformed, and that some 20 British candidates have succeeded in the concours since 2010? He may have read an article that said that no British civil servant has succeeded in the concours since that date.
Baroness Falkner of Margravine (LD)
My Lords, would my noble friend agree that a postgraduate degree qualification from the College of Europe greatly facilitates employment in the European institutions? Could he tell the House whether the scholarships to the College of Europe, suspended by the previous Government in 2010, have been reinstated—and, if so, at what level?
Lord Wallace of Saltaire
My Lords, it is widely accepted that a year studying in both French and English in the College of Europe, in Warsaw or in Bruges, is very helpful in getting students accustomed to the ways of Brussels and what is required in the concours. The last Government cancelled the 24 British scholarships for the College of Europe in 2009. They have been partly reinstituted, with five from BIS for British officials next year, and a number of others from the devolved institutions. In addition, a small group of people, which I think includes several Members of this House, have contributed to a private scholarship scheme, which will fund three scholarships this year. So we are working at it and the number of candidates is now rising again.
Lord Wright of Richmond (CB)
My Lords, does the Minister not accept, in spite of what he has said, that many members of the UK public service may have been discouraged from applying for jobs in the Community institutions by the fact that they no longer have an assurance of a return ticket to the UK public service—quite apart from the career difficulties presented by the prospect of a referendum on whether or not we should remain in the European Union?
Lord Wallace of Saltaire
All I can say on that is that the evidence is not there. In terms of the secondment of national experts into the European External Action Service, the British are second after the French in the number of those who have succeeded in gaining places; so there is some considerable evidence there. The members of the Diplomatic Service have also been going round to graduate recruitment fairs over the past two years and that has helped to double the number of British applicants for the concours this year.
Lord Foulkes of Cumnock (Lab)
My Lords, surely as a Liberal Democrat Euro-enthusiast—
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)
My Lords, we are wasting time. It is the turn of the Labour Party.
Lord Foulkes of Cumnock
Surely the noble Lord—as a Liberal Democrat Euro-enthusiast; and I am also a Euro-enthusiast—would agree that the problem has been exacerbated by the uncertainty over our future position within Europe. Would he, if he were 20 or 30 years younger, really apply for such a risky position?
Lord Wallace of Saltaire
My Lords, the Prime Minister made it clear in his speech in January that it is in Britain’s long-term interest to stay within the European Union. The Deputy Prime Minister made an extremely strong speech about the position that we will be taking on future membership. I look forward to a speech from the leader of the Labour Party—I think that Europe was not mentioned once in this year’s Labour Party conference—which will ensure that all three parties hold a similar position.
Lord Elton (Con)
My Lords, after reminding the noble Lord, Lord Foulkes, that he does not represent anybody any more than the rest of us do—we represent ourselves—could my noble friend tell us what steps Her Majesty’s Government are taking to ensure that the, we hope, increasing number of representatives of this country on the staff of the European Commission are aware of the detail of what the national interest actually is, and that they are kept aware also of the effects of European legislation and regulation on the economy, the community and the functioning of the law of this country?
Lord Wallace of Saltaire
My Lords, many of these things are very informal. When I go to Brussels I talk to British officials, as do many of my colleagues. There is a British-Brussels network. The last time I was in Brussels I addressed the alumni of an Oxford college that I used to teach in. There are informal contacts and they keep in touch. However, one does not wish to instruct officials of the Commission, who are there to do a good job and to network between the national and the European.
Schools: Unqualified Staff
(11 years ago)
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Baroness McIntosh of Hudnall
To ask Her Majesty’s Government what are their reasons for encouraging the employment of unqualified classroom teachers in state-funded schools.
The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)
My Lords, we do not seek to encourage teachers without QTS. Indeed, under this Government, the number of teachers without QTS has gone down by 20% from the level of 18,600 it reached under the previous Government. By the Labour Party’s sole measure for this, we are therefore doing rather well. We merely seek to ensure that our children are taught by the best teachers, not just those with a particular qualification. Under a Labour Government, a teacher who had been teaching brilliantly for 30 years and who had a PhD in his subject but did not have that particular qualification would either have to get it or face the sack. How daft is that?
Baroness McIntosh of Hudnall (Lab)
My Lords, I congratulate the noble Lord on somewhat sidestepping the Question that I put to him. In passing, I also note that he did not refer to the fact that his right honourable friend the Deputy Prime Minister takes a different view from him on this matter, but perhaps I should not intrude on private grief. The point is that knowledge, enthusiasm and, indeed, natural gifts may be necessary but they are not sufficient in developing professional competence. Does he not accept that, somewhat against the tone that he took in responding to my noble friend Lady Blackstone a couple of weeks ago, to make this point is not to be dogmatic? I do not think that he would disagree with me if we were talking about train drivers or brain surgeons. Will he explain why teachers are an exception?
Lord Nash
My Lords, a number of studies, including a notable one in 2007 by McKinsey, have revealed that a more effective system of selecting teachers is based on things such as their level of literacy and numeracy, interpersonal skills, commitment, willingness to learn and passion for their subject. There is no evidence that teachers with QTS teach better than those without it.
Lord Quirk (CB)
My Lords, I am no great fan of the current teacher training in this country, but rather than go on allowing people to teach in the classroom with no such training at all—Mr Gove confessed last week that we still have 15,000 of them—why do the Government not insist on bringing our standards of teacher training up to those of the best high-performing jurisdictions in Europe and the world, which they rightly seek to emulate, thus giving those in our great teaching profession the qualifications which are truly worthy of them?
Lord Nash
My Lords, we are seeking to improve the quality of teacher training by bringing more of it into schools. We now have 357 teaching schools and more teachers being taught under SCITT programmes. Ofsted reports that 31% of SCITT courses are good or outstanding as opposed to only 13% for higher education establishments.
Lord Storey (LD)
My noble friend the Minister is right to remind us that the number of unqualified teachers in our schools was higher under the Labour Government than it is now. That Government also allowed teaching assistants to teach classes. How does the Minister think we can ensure that qualified teachers get sufficient training to become the school leaders of the future?
Lord Nash
I agree entirely with my noble friend that this is very important and that we have to bring more young teachers into leadership. We trust head teachers to develop teachers in their schools through CPD. Many good schools and good academy chains have a very strong focus on doing this.
Baroness Jones of Whitchurch (Lab)
My Lords, the noble Lord may not have been around in 2001 during the passage of the Education Act 2002, and may be surprised to hear that not only his own party but the Liberal Democrats all voted against us when we said that all state schools should have qualified teachers, so I do not think we need any lectures from him on that. I think that most parents were shocked to hear that the Government have removed the requirement for teachers in all state schools to be qualified. Will the noble Lord explain why a Government who started off demanding higher qualifications have now gone completely into reverse gear and want the profession deskilled?
Lord Nash
My Lords, we have just been told by the OECD that our school leavers—Labour’s children—are among the most illiterate in the developed world. Indeed, we are the only country in the developed world where our school leavers’ grandparents were better educated than our school leavers were. We have also recently been told by Alan Milburn that we are the most socially immobile country in Europe. That is why we need to bring teachers from whatever field we can into our school system to improve it, rather than to be dictated to by dogma.
Lord Cormack (Con)
My Lords, in spite of what the noble Baroness, Lady McIntosh, said, is it not crucial that truly qualified teachers are those who have a deep knowledge of their subject, a love of it and the ability to transmit that love enthusiastically to others?
Lord Nash
I entirely agree with my noble friend. This is absolutely true and there are many such excellent teachers in the independent sector, many of whom work in partnerships with the state sector. I know that the Labour Party does not like to hear about the independent sector, because it is truly world class—
Lord Nash
It is not, actually; we have just been told that it has fallen well down the international league tables. Many of these independent schools quite voluntarily go into state schools and give lessons. Some of these teachers are unqualified; under Labour that will not be able to continue.
Political Parties, Elections and Referendums (Civil Sanctions) (Amendment) Order 2013
(11 years ago)
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Lord Wallace of Saltaire
That the draft order and draft regulations laid before the House on 16 July be approved.
Relevant documents: 9th Report from the Joint Committee on Statutory Instruments, 11th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 29 October.
European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 2013
(11 years ago)
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Baroness Randerson
That the draft regulations laid before the House on 18 July be approved.
Relevant document: 9th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 29 October.
Enterprise and Regulatory Reform (Designation of the UK Green Investment Bank) Order 2013
Viscount Younger of Leckie
That the draft order laid before the House on 17 July be approved.
Relevant document: 9th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 29 October.
Personal Service Companies Committee
(11 years ago)
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Lord Hill of Oareford
That it is desirable that a Select Committee be appointed to consider the consequences of the use of personal service companies for tax collection, and to make recommendations, and that the Committee do report by 31 March 2014.
Energy Bill
17:36 - Division on Amendment 74 - Ayes: 237 / Noes: 193 - Amendment 74 agreed.
Lord Berkeley
Baroness Anelay of St Johns
My Lords, I invite colleagues to leave the Chamber quietly so that we may at least hear the mover of the amendment.
Lord Berkeley (Lab)
My Lords, the purpose of this amendment, in my name and that of my noble friend Lord Hanworth, is to require the Secretary of State, in dealing with the modifications to the licence conditions, to include in Clause 43(3)(b),
“provision imposing restrictions on the sale or purchase of electricity to or from group undertakings”.
This is an attempt to persuade the Minister, when she responds, to go a little further than she did in Committee last Monday when she said:
“There is no clear evidence that the divestment of retail businesses will increase competition or lower consumer prices”.—[Official Report, 28/10/13; col. 1386.]
I think that there is probably quite a lot of evidence, but we now have the opportunity to test this because, among many statements by the Prime Minister and the Secretary of State for Energy last week, Ed Davey said that they would introduce annual reviews of the state of competition in the energy markets and that the first of these new competition assessments will be delivered by spring of next year. He went on to say:
“The assessment will be undertaken by Ofgem, working closely with the Office of Fair Trading and the Competition and Markets Authority, when it comes into being”.—[Official Report, Commons, 31/10/13; cols. 1095-96.]
Those organisations, separately and together, are probably some of the best experts on competition issues we have in this country. It would be logical and right for them to include within certainly the first annual review a comment about separation. There has been an awful lot of talk about competition, which appears rightly to boil down to considering whether there is competition among those from whom you buy your electricity. However, the issue of competition at the other end and separating the generators from the retail end is just as important. I therefore wish to persuade the Minister to agree that the issue of separation within the assessment of competition that has been announced—and is very much to be welcomed—should be included. I beg to move.
Viscount Hanworth (Lab)
My Lords, I wish to speak to Amendment 61A in my name and that of my esteemed colleague, my noble friend Lord Berkeley. According to common testimony, the Bill is an extremely complex affair. It seems to have been designed by lawyers and parliamentary draftsmen to render politicians incompetent to assess its intentions and to predict its likely effects. There is a suspicion that the Government are not fully in control of this juggernaut.
Our anxieties in this respect are particularly acute in connection with the provision of a so-called route to market. Such a route should enable the independent generators to survive what seems to be the clear intention of the big six energy companies to squeeze them out of the market. The independent generators are important because they represent the germ from which a genuinely competitive energy market could develop. They are also important because they could be expected in ideal circumstances to provide a large proportion of the investment in renewable energy generation. Some of the Government’s documents recognise this potential. They imagine the proportion of new investment in renewables attributable to independent generators being between 30% and 50% of the total.
Amendment 61A reflects our knowledge that small generators are presently constrained to sell their output to the oligopolistic suppliers at a very heavy discount. A long-term power purchasing agreement costs the independent generators approximately between 10% and 17% of their net revenue, whereas in Nord Pool, which is the multinational Scandinavian exchange for trading energy, the equivalent cost is between 2% and 6%.
There has been recent evidence that some in the Government are becoming aware of the dysfunction in the energy market and the fact that, notwithstanding their ideological presuppositions, a free-market environment cannot be relied upon to engender competition. Indeed, the Secretary of State for Energy and Climate Change, Ed Davey, said last week in a Statement made to both Houses that he intended to,
“consult on the introduction of criminal sanctions for anyone found manipulating energy markets and harming the consumer interest”.—[Official Report, Commons, 31/10/13; col. 1096.]
One doubts whether this sound and fury has any practical significance. The Government seem to lack the leverage and will to intervene effectively in the markets.
The Labour Party takes a more positive approach. It promises to break the vertical integration of the energy oligopolists by separating the generators from the suppliers. The intention is to require energy companies to conduct all trades in a competitive manner on an open exchange. My proposal has been for a state-sponsored electricity and marketing board that would purchase its supplies from independent generators. It would aggregate them and sell them in competition with the supplies of the big six energy companies. In my opinion, the participation of the state would be the most effective way of introducing genuine competition into the energy market.
Lord O'Neill of Clackmannan (Lab)
My Lords, when an amendment of this character came up in Committee, I pointed out that we were talking about an amendment that would take us back to some of the original ideas that were circulating at the time of energy privatisation—you might say at the time just before liberalisation, because the two did not happen with quite the speed that one would have wished. I do not think much attention was paid to that point, but initially, we had a system in the UK where we had massive generators responsible for nuclear and the Central Electricity Generating Board. We also had regional electricity companies which could generate no more than 15% of their requirements.
Due to the attractiveness of the liberalisation process to some foreign energy companies, many of them in North America, we saw the acquisition of a number of the regional electricity companies by American companies. Thereafter, we began to see the merging of some of these regional electricity companies, and we boiled it down to what you might call the “big four”. Two of the companies had always been vertically integrated—that is to say, the two Scottish companies which at that time were Scottish Hydro and ScottishPower. By a process of merger acquisition, we had the vertical integration of the companies.
This was not what was intended by some of the ideologues who were the original authors of the liberalisation and privatisation programme. They wanted a system which would be akin, in generating terms, to something along the constitutional arrangements of pre-Cavour Italy. It would have had a catastrophic effect if it had been allowed to happen; a number of city states generating electricity in bits and pieces over the country, much as we had with gas and electricity prior to the Labour nationalisation in the 1940s.
It is fortunate that we did not have that, but what concerns me is that if we are going to have generators of a relatively small kind coming in—windmills attached to the national grid and water mills here and there—they are not going to change the character of the market to any great extent. We could have a situation similar to that in North America, where there are companies still considering the construction of nuclear power stations. In some instances, those stations cost twice the capitalised value of the companies that want to build them, so they have to look for partners across the world.
While these two amendments are well intentioned, I do not think that they will do very much in terms of promoting competition. My feeling is that if we are going to have the promotion of competition and the protection of the consumer from oligopolistic malpractice, we have to have a system of regulation which is capable of addressing that. These amendments go no real way to doing that. Quite frankly, I think they are something for another Bill. That is one of the reasons why I am supporting my party’s proposition that we spend 20 months after the next Labour victory putting through effective legislation which will change the regulatory framework, and may well result in a degree of reduction in the vertical integration process.
It is a problem; I do not deny that. However, we have to recognise that if we simply try to create opportunities for small players to become involved, we are not necessarily going to challenge the oligopolistic power of the big players. To challenge the purchasing power of the big four, big six or big seven if you were to include First Utility which, as I understand it, do not presently do any generating, we need far more in the way of regulatory conditions that would work. At the moment, I am not confident that these amendments can do that.
It is useful that, even at this late stage, we have probing amendments, but I find it very difficult and rather embarrassing that colleagues on my side of the House are supporting some of the random writings of the Austrian school of discredited economics that landed us with a great many of the problems that we are now confronting. I would like to think that my noble friend will withdraw his amendment. At the same time, something needs to be done but I do not think that the terms of the Bill and what we are trying to do at present makes the amendment appropriate. It is one thing for us to try to change the electricity market; it is quite another, at this stage, to try to change the structure of electricity generating and the integrated nature of our electricity industry.
Therefore, this is not the time for an amendment of this character. It needs to be better thought out and a lot more care and attention needs to be paid to the significant point which was the undoing of the Austrians in the recent past—that through a process of merger and acquisition you can easily change the nature of the industry. It could be argued that the Major and early Blair Governments did nothing about that process of acquisition and merging. However, unless we had changes on that side of the legislation as well, we could simply encourage the end of vertical integration and then see a process of merger and acquisition. That would take us back to where we are at present, which I do not think anyone would find a particularly satisfactory situation.
Baroness Worthington (Lab)
My Lords, I am grateful to my noble friend for tabling these amendments but, although we are sympathetic to their intent, it is fair to say that we would take a different approach.
This part of the Bill, which introduces measures to try to protect independent generators, is a clear indication that there is something very wrong with our electricity market. It is another layer of complexity that the Bill introduces to the market, and it is needed because we have probably all had considerable representation from independent generators saying that they are simply not able to gain access to the market on fair terms. That is very regrettable and a clear sign that something major needs to take place in the shake-up of the electricity market. Unfortunately, the Bill does not do that and was never intended to, and I am inclined to agree with my noble friend Lord O’Neill that another Bill would be needed to sort this out.
As I said, this is an extra complexity, and my general rule of thumb is that increased complexity equals decreased efficiency. I am sorry that we have had to enter into this market with new provisions to enable independent generators to gain access. All electricity ought to be sold into an open and transparent pool or market so that everyone has a fair crack at the whip and ultimately everybody can gain fair access to customers through supply companies. I fear that these amendments, although welcome, are something of a sticking plaster and would not really get to the root of the problem.
The Labour Party has made it very clear that our solution to this is to split up the vertical integration of the big six and to introduce a new regulator with real teeth, focusing squarely on the consumer and delivering better competition in all aspects of the electricity market. The amendments go some way towards achieving that but I do not think that they do enough, so I am afraid that, although we are sympathetic, we are not able to support them.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, I thank noble Lords for the debate on the amendments and I shall speak to them after I have spoken to my own amendments in this group. The amendments standing in my name pertain to powers that enable the establishment of a power purchase agreement scheme, which could provide generators with access to an offtaker of last resort. The offtaker of last resort mechanism will benefit both independent renewable generators and investors by providing a guaranteed backstop route to market through which generators can sell their power. This will enable generators to use new and different routes to market, ending their dependency on established players and stimulating new entry and innovation in the PPA market.
The amendments I am speaking to today address specific concerns raised in Committee that the price at which electricity is purchased in PPAs under the scheme should be determined by reference to the current market price. Amendment 61 clarifies that a PPA under the scheme is an arrangement under which a supplier agrees to purchase electricity,
“at a discount to a prevailing market price”.
This amendment confirms our policy intent that the offtaker of last resort mechanism is exactly that: a last resort. Electricity purchased through the PPAs under the scheme must be purchased at a discount to a market price. This will give confidence to suppliers that they will not be required to purchase electricity at above-market prices. I assure the House that it is the Government’s intention that the level of discount should also represent a sufficient level of revenue to enable generators to raise finance. The discount level will form a key part of our consultation in early 2014.
Amendment 63 enables the Secretary of State to make provision in licence or code modifications to determine the appropriate discount and market price for PPAs under the scheme. I believe that these amendments clarify our policy intentions.
Amendment 61A, tabled by the noble Lord, Lord Berkeley, and the noble Viscount, Lord Hanworth, would mean that a PPA under the scheme is an arrangement under which a supplier agrees to purchase electricity at a discount to the market price and that the discount is no more than 5%. It is important that the discount is large enough to ensure that PPAs under the scheme are a last resort. The requirement for the discount to be no larger than 5% is not compatible with that; given that open-market PPAs typically have larger discounts, the scheme would quickly become a first, rather than last, resort. This would undermine new entrants to the PPA market and mean that anticipated benefits of the scheme in terms of facilitating a more dynamic and competitive PPA market would not materialise.
On Amendment 59A, I begin by stating my strong, and, I believe, shared desire to see ambitious action to improve wholesale market liquidity, which is crucial to allow independent generators and suppliers to compete without restriction. That is what Ofgem is doing through its ambitious package of reforms to address low levels of liquidity in the market, and what this Government will do should Ofgem’s reforms be delayed or frustrated. If it proves necessary for the Government to act, they should consider all options to achieve their objectives, including those listed in Clause 43. However, it would not be prudent to tie our hands to a particular course of action at this stage.
I hope that noble Lords have found my explanations reassuring and that the noble Lord will agree to withdraw his amendment.
Lord Berkeley
My Lords, I am grateful to all noble Lords who have spoken—some in support, some less so. We have had a very good debate. I think we all agree that this issue is not going to go away. We probably will need to see whether there is new legislation after the Labour Party wins the next election, or whether the annual review from the competition people will result in a recommendation. I beg leave to withdraw the amendment.
Lord Roper (LD)
Lord Roper (LD)
My Lords, in moving this amendment in my name and that of my noble friend Lord Jenkin of Roding, I will speak also to Amendment 62, which is in my name and that of the noble Baroness, Lady Liddell, and to Amendment 64, which is in my name and that of the noble Lords, Lord Jenkin of Roding and Lord Cameron, and the noble Baroness, Lady Liddell.
Lord Jenkin of Roding (Con)
My noble friend Lord Roper has spelt out very clearly the purpose that lies behind this group of amendments. The Government have allowed themselves to get into some difficulty on this. A very good point that may have been made during the discussion of the previous group of amendments concerns a feeling on the part of the independent generators that, although they welcome the addition of four clauses to provide for these power purchase agreements that represent the offtake of last resort, there is considerable scepticism within the industry as to whether they are actually going to be operated. As I mentioned at some length a week ago when I moved the amendment about more competition in the industry, there is a feeling that the oligopoly of the big six larger operators—they account for 92% of the electricity supply to domestic and commercial users in this country—is not going to allow this to work.
Some of the reactions from Ministers have to some extent been contradictory. This is what creates the uncertainty, and in some quarters a degree of scepticism, about whether this is in fact intended. In private, my noble friend’s ministerial colleague, my right honourable friend the Minister for Energy Michael Fallon, was reported as saying:
“I confirm that we intend to have the OLR mechanism in place around the time that the first CfDs are allocated, and Baroness Verma will also confirm this at an appropriate opportunity during the Energy Bill’s passage”.
We have not had that yet. These matters were discussed briefly at Second Reading. More importantly, there were some considerable debates in Grand Committee. Any statement of that kind was conspicuous by its absence. As my noble friend Lord Roper said a few moments ago, before the Bill leaves this House we must have a clear statement from my noble friend that that will happen. As he said in the previous debate, this is not just something to be enabled as a last resort; it has to be seen as an integral part of the new system. That is how it was presented but not how it has actually been drafted. The reluctance of Ministers to say on the Floor of the House what they have said privately to the industry is, quite frankly, disturbing.
It is not the first time we have seen that. Last Monday, I moved an amendment about competition in the capacity mechanism system that is being introduced, which my noble friend was quite firm in resisting. She has since written a letter saying that she is prepared to go on negotiating with the independent generators concerned, which is very welcome, but that was quite different from what Michael Fallon said before the Bill reached this House. He made it clear that he was expecting amendments seeking to promote more competition and to make it a very clear duty on the Government, and that he would not quarrel with that. I know that my noble friend was under some pressure last Monday because the Leader of the House was waiting to make a Statement on the European Council, but none the less she refused to do that. I felt it right to withdraw the amendment rather than spend more time dividing the House, and it was not at all clear that there were enough noble Lords in the House at that stage who would have supported it. Still, the fact of the matter is that we were faced with a contradiction between what the Minister for Energy said and what my noble friend has so far been able to say, no doubt under legal advice from her department.
With the greatest of respect to her, that is not good enough. If this offtaker of last resort is to mean anything at all, it must be perfectly clear that it will be able to operate where necessary and on the terms that my noble friend Lord Roper has already indicated. If my noble friend is unable to give that undertaking today, I ask that she goes back to her department and discusses the issue with her colleague, perhaps when he has returned from the Middle East, where he is at the moment. We should get a very clear statement on this when we reach Third Reading on 19 November.
I cannot stress too strongly the degree of unhappiness that exists in substantial sections of the independent industry, which feel that they are being messed about. One reads in the article in the Telegraph today about the difficulty in getting the investment going—as the Telegraph says, a large amount is simply waiting on the drawing board. To a large extent, that is due to a sense of uncertainty about the intention of this legislation. It is open to my noble friend, now or at Third Reading, to clear up some of these uncertainties, particularly those relating to hire-purchase agreements and the offtaker of last resort, on the lines of the amendments to which my noble friend has spoken, so that the companies and the funds that will be providing finance for them will know where they stand and can go ahead. At the moment, they do not feel that; I really must stress that very hard indeed.
Baroness Liddell of Coatdyke (Lab)
My Lords, in supporting Amendments 62, 64 and 65, I draw attention to my entry in the register of Members’ interests. I will be very brief because the noble Lord, Lord Jenkin, has very much encapsulated the nature of the debate around the offtaker of last resort and the issue of certainty.
I would perhaps be kinder than the noble Baroness’s noble friend as I think that the noble Baroness probably does get the issue that we are seeking to articulate here. It is about giving a degree of certainty to companies that are of necessity much smaller than the big six and have difficulty raising finance because in many cases they are involved in infant industries. In the front of my mind is the generation of renewable energy in the islands of Scotland; for example, in the Western Isles, Orkney and Shetland. I know there is to be a consultation on that, but there are opportunities throughout the United Kingdom to access the various kinds of renewable energy that will be available through the activities and investments of independent generators. However, independent generators need to go to the market to raise their funds and if there is not certainty that the Government are really committed to the offtaker of last resort—that it is not a programme for a situation that exists in extremis but is integral to the operation of the market for that 8% or perhaps even less that exists—not only will the market become unbalanced but we will fail to give support to industries and generating capacity that already have the potential to be world leaders.
The noble Baroness’s words at the Dispatch Box will be looked at very carefully by the industry and the funders. Those who have deep pockets and will be prepared to invest in the sector and allow it to move on to a harmonious future need certainty. I will not delay the House any longer but I urge the noble Baroness to think very carefully about what she says. The noble Lord, Lord Jenkin, is right. I suspect that the lawyers have had a lot to do with what her right honourable friend Michael Fallon has being saying and what she has been able to say. I have no doubt that she understands from her own business background that the issue of certainty for investors is what lies behind these amendments, which I support.
Lord Deben (Con)
My Lords, perhaps I might help my noble friend on this issue. There is a win-win solution, which is to recognise what has happened very recently in Germany. The big generators always start off being unhappy about the competition. However, RWE in Germany is expected to announce, after decisions made very recently, that it has concluded that it is no longer possible to take that attitude towards other generators in the German market. The Germans have been so tough about the provision for smaller generators. As I have said before in this House, it is remarkable that 50% of the very significant amount of renewable generation in Germany is done by municipalities, co-operatives and individuals.
Until recently, the big generators have fought that because they felt that their own business model was being undermined. It is quite clear from the latest evidence that RWE will take a different view, that it ought to become much more a facilitator of this rather than an opponent of it. If we get the way this is phrased in this Bill right, we will be able not only to help the independent generators but to help the bigger ones to move rather faster in understanding that this is going to be a multiple market in the future.
Therefore, I hope that the Minister will be able to discuss this again with her colleagues because it is a very fast-moving situation. This is not something that is the same today—literally—as a fortnight ago because we did not know the RWE movement then so we did not see, although we hoped, that that was what was going to happen elsewhere. If we can take advantage of learning from other people rapidly, this excellent Bill can be made that much better. I hope that she will find it possible to be a little stronger in what she says now and will take this away and discuss it with her colleagues, as my noble friend Lord Jenkin suggested, because there is now a new circumstance in which she will be able to be stronger in her support.
Lord Cameron of Dillington (CB)
My Lords, I support all the amendments in this group, as well as the amendments to which I have put my name. Last week we had our debate on the need to open up all sectors of the electricity industry to more competition. We on our side of the amendment were surprised at the reluctance of the Government to acquiesce enthusiastically to what we were proposing. We were even more surprised when later in the week the Secretary of State for Energy and Climate Change went on the “Today” programme and also spoke in the other place about how greater competition was at the heart of the Government’s electricity market reform. I have to admit I had the surreal feeling that there seemed to be one Government at that end promoting competition and talking about its importance and a completely different Government at this end seemingly trying to ward off competition. I hope that this week we have one pro-competition Government in both Houses.
In my short remarks in the debate last week, I linked the need for competition with the need for investment and spoke about how the two are closely intertwined. The UK’s aging energy infrastructure needs some £75 billion invested in new, largely renewable, generation facilities by 2020, and the Government are relying on independent generators, or at least their investors and financial backers, to produce some 35% to 50% of this—that is, £27 billion to £38 billion—before 2020, so this is not a marginal problem. Only by solving it will we ensure that we get the investment we need along with the much needed competition.
Of course, there is a problem. In an ideal world, an independent generator would want a backer for 15 years, because that is the normal length of any form of mortgage agreement for such a scheme, but no supplier is going to gamble on a 15-year PPA because the demand for electricity could reduce over 15 years and a supplier could find itself having bought more power than it could sell. Indeed, already four out of the big six suppliers are not buying power at all from independent generators, while the other two are charging up to 15% or 20% commission on even short-term contracts, which for the independent generator makes for an unviable PPA.
As has already been explained, this situation scares the independent generators and, above all, their investors, so no truly independent generator is going to invest without some form of compromise in the long-term marketplace. Equally, no aggregator is going to enter the fray with the big six oligopoly holding all the cards. We desperately need these independent generators to invest and, as the Government—well, the Government at the other end—keep telling us, it is only by encouraging more competition that we will achieve that investment.
The department has gone for an offtake of last resort—an OLR—to solve this problem, which is fine, but as it stands, the solution in the Bill is completely useless, as Clause 44 is so hedged about with “may”s rather than “must”s that no self-respecting financier would put any trust in it at all. The Minister’s letter of 26 July, I think it was, does not give them any encouragement either. It is a political cop-out rather than a financial foundation on which to build a competitive electricity industry. The words “political cop-out” may be a bit harsh, but the clause is clearly written from a political perspective, rather than the drafters putting themselves in the minds of an investor or a mortgage company and thinking, “What can I put in this Bill that will really reassure these much needed investors that we the Government say we desperately want?”. They just have not done that.
I hope we all agree that this is not a marginal issue. That is why it is vital that these amendments are adopted. It is vital that OLRs are available from day 1 of CFDs. It is vital that they are operational the moment—well, within seven days—of a generator finding itself squeezed out of the marketplace without a commercial PPA. It is vital that the price on offer is evidently—I stress that word “evidently”—going to be enough to reassure a financial backer that lending money in this new and uncertain marketplace is not going to be a wasted investment. There is an enormous amount hanging on getting this right, so I hope that the Minister will be able to reassure us.
Lord O'Neill of Clackmannan
My Lords, my previous remarks might have been interpreted as being antagonistic to small generators but I am not. What we are talking about here is a reform of the market that will encourage investment, but investment can only be encouraged if there is the prospect of stability. We are yet to receive from the Government a clear indication that there will be stability in this area.
I am not certain that praying in aid the German experience is necessarily that relevant seeing as Germany is having to accommodate the withdrawal from nuclear generation on a considerable scale and will be happy to get generating supplements or replacements from any source that it can. To a certain extent, that might be the same for the United Kingdom if coal is to be exited from our energy mix in a significant way. If that is the intention, and I believe that it is, we must have facilities available to mop up, or fill in the gaps, of what remains.
These amendments provide a clear and explicit set of measures. But they are only amendments and were the Minister able today to give us the degree of certainty required, I imagine that they would be withdrawn. However, what Mr Fallon said elsewhere probably was based on the optimism that has existed throughout the activities of the Department of Energy and Climate Change these many months—that every deal is just days away. Yet the days become weeks and the weeks become months. We do not have much more time. Therefore, it is essential that the Minister gives us a far more positive assurance than she was able to give last week. If she can do that, these amendments will melt like snow off a dyke, as we say in Scotland. However, if they do not, they will come back to haunt the Minister, because there will be a clear indication of what could have happened had there been a greater sense of urgency in the Department of Energy and Climate Change than had been anticipated by Michael Fallon before he went eastward.
The Earl of Caithness (Con)
My Lords, there can be no doubt that there is a unanimous view within the Chamber that we want independent operators and more competition. Of course, the difficulty for the Government is getting the balance right. We talked about the trilemma last week: finding the right balance of affordability, supply and decarbonisation of energy that we all want.
However, I disagree with the noble Lord, Lord Cameron of Dillington, when he spoke of Clause 44 being hedged around with “may”s and not “must”s. It always amuses me that when one is in opposition “may” should always be “must”, but the moment that one gets into government, one is advised that “must” should always be “may”. Therefore, I do not think that having “may” in Clause 44 will put off investors or financiers in any way.
My noble friend Lord Deben said that if we get this right, it will be a win-win situation. I think that my noble friend on the Front Bench is aware that it will be a win-win situation, but I do not think that the amendments actually help. They tilt the balance too far. In Amendment 62, the idea is to allow a party to a CFD to be able,
“to borrow money commercially for its business purposes at adequate levels, reasonable cost and over a reasonable period”.
As a businessman, I would love the Government to give me that guarantee for my business. It would be exactly what I wanted, because if I were not happy I could go to judicial review against the Government for not forcing financiers and investment people to give me the terms that I considered right.
That is a point of detail on the amendment, but my general point is that we are all agreed that we want competition, and I think that the Government have just about got it right in the Bill. However, I would like a firmer commitment from my noble friend the Minister that this will actually work in practice.
Baroness Worthington
My Lords, I support Amendment 60. I am grateful to all noble Lords for their contributions to this debate. I will not reiterate my earlier comments, which are that I consider this whole section of the Bill to be a sad necessity that need not have been there had the Government grasped the bigger picture of properly introducing competition during their energy market reforms. However, Amendment 60 seems to be eminently sensible. It is clear, from all the contributions we have heard today, that there is insufficient confidence among independent generators that the Government are serious about introducing something to assist them at this time. It is also quite clear that the clauses we are now debating are a last-minute addition to the Bill.
When the Government started out on this process they maintained that there was no problem and nothing to be worried about; I suspect that this was because they paid far too much attention to what the big six were telling them and insufficient attention to what the independent generators were saying. We therefore have these four clauses, which do not go far enough in providing the detail or the certainty that investors require. Ministers should at the very least be able to concede that these arrangements will be in place in time for the awarding of the first CFDs; that would be the absolute minimum.
On the other amendments, which are slightly more detailed—I agree with the noble Earl, Lord Caithness, that they may be too prescriptive for primary legislation—the regulations that flow from these clauses must be published before the Bill leaves this House, as we need to see the detail. I apologise if the draft regulations have in fact already been published; they may have been lost in the huge number of documents, for which we are grateful, that have been issued to us. However, if they have not been published, can the Minister tell us when they will be so that we can see how this policy will work and appreciate the detail? I hope that that will go some way to reassure the noble Lords who have spoken in this debate this afternoon.
Baroness Verma
My Lords, I thank my noble friends Lord Roper and Lord Jenkin, and the noble Baroness, Lady Liddell, for their amendments on the issue of route to market for independent renewable generators. Taken together, these amendments would place the Secretary of State under a duty to ensure that: a PPA scheme is in place by the time the first contracts for difference are allocated; the terms of PPAs under the scheme are demonstrably viable for eligible electricity generators and will enable them to borrow money on reasonable terms; eligible generators can obtain a PPA under the scheme within seven days; and that all generators eligible for a CFD are eligible for a PPA under the scheme.
I am grateful to noble Lords for the opportunity to clarify the Government’s intentions, which are very much in keeping with the spirit of these amendments. I assure the House that, as my right honourable friend Michael Fallon has said, the Government are committed to consulting on the introduction of an offtaker of last resort mechanism, and that they intend, subject to consultation, a scheme to be in place by the time the first CFDs are signed. That will give generators and investors the certainty that they need to make investment decisions. However, it would not be appropriate to place the Secretary of State under a duty to establish a scheme by a particular date before the final policy design has been completed and consulted upon.
The Government are also committed to ensuring that the mechanism is viable for eligible independent generators, which should enable generators to borrow money on reasonable terms. However, the Government cannot guarantee that, since access to finance and the viability of the scheme for individual generators are affected by a variety of factors that are out of our control. We also fully intend that those generators which need to access a PPA under the scheme will be able to do so quickly and simply via a transparent and fair process.
It is important that the scheme is targeted at those generators which genuinely need to access it. The scheme may not be suitable or necessary for all CFD-holding technologies, so we do not judge that it is appropriate for this to be required in primary legislation. I also assure the House that the Government intend to grandfather the terms of PPAs under the scheme, including the level of discount, from the date a generator signs its CFD.
I met with the Independent Renewable Energy Generators Group last week to reassure it on these points. It confirmed that it believes that the offtaker of last resort is a viable solution to its concerns, subject to the final decision—sorry; subject to the final design. The details of the offtaker of last resort mechanism will be specified in secondary legislation following consultation early next year, so it is not appropriate at this stage to set them out in the Bill. I reassure noble Lords that we aim to have secondary legislation in force by the time the first CFDs are signed. This is a challenging timetable. It is subject to consultation and parliamentary process. However, this should not have a material impact on generators since they will not need access to backstop PPAs until after projects have been commissioned, which is likely to be several months after signing the first CFD.
Noble Lords also asked when the first CFD allocations will become available. We have already signalled that we intend to consult, possibly in the early new year, and aim to have secondary legislation in force by the time of the first CFD. I hope that I have reassured noble Lords that the Government’s intention is to ensure certainty for smaller generators. We want to see greater competition. We believe that the measures we are taking and the mechanisms we are using are the right ones. I hope that the noble Lord will find my explanations reassuring and will therefore agree to withdraw his amendment.
Lord Roper
I am grateful for the support my amendment has had from all parts of the House. I am also grateful that the Minister has listened to what has been said and, indeed, made some reassuring comments. I am certainly reassured to a significant extent. She said that she wished to act in keeping with the spirit of the amendment and I am happy about that. I also understand the constraints imposed upon her by the consultation. However, I return to one of the points I made in introducing the amendment and that comes back to a phrase she used, which I hope I understood. She said initially the final “decision” and then moved on to say the final “design”. I believe that she meant the final design; that is, not whether or not there will be an offtaker of last resort but how it will work—the design for such an offtaker.
Lord Roper
My Lords, that is indeed a very reassuring statement. It suggests that the Government are moving in the direction that we wish. I suspect it means we will not need to return to this at Third Reading. We have had some useful assurances today and, on the basis of that, I beg leave to withdraw the amendment.
Baroness Verma
Baroness Verma (Con)
Baroness Verma
“Closure of support under the renewables obligation
(1) After section 32L of EA 1989 insert—
“32LA Renewables obligation closure order
(1) The Secretary of State may make a renewables obligation closure order.
(2) A renewables obligation closure order is an order which provides that no renewables obligation certificates are to be issued under a renewables obligation order in respect of electricity generated after a specified date.
(3) Provision made under subsection (2) may specify different dates in relation to different cases or circumstances.
(4) The cases or circumstances mentioned in subsection (2) may in particular be described by reference to—
(a) accreditation of a generating station, or(b) the addition of generating capacity to a generating station.(5) A renewables obligation closure order may include provision about—
(a) the meaning of “accreditation” and “generating capacity” in subsection (4);(b) when generating capacity is to be treated as added to a generating station for the purposes of that subsection.(6) References in this section to a renewables obligation order are references to any renewables obligation order made under section 32 (whenever made, and whether or not made by the Secretary of State).
(7) Power to make provision in a renewables obligation order (and any provision contained in such an order) is subject to provision contained in a renewables obligation closure order; but this section is not otherwise to be taken as affecting power to make provision in a renewables obligation order of the kind mentioned in subsection (2).
(8) Section 32K applies in relation to a renewables obligation closure order as it applies in relation to a renewables obligation order (and subsection (3) above is not to be taken as limiting the application of that section).
“32LB Renewables obligation closure orders: procedure
(1) Before making a renewables obligation closure order, the Secretary of State must consult—
(a) the Authority,(b) the Council,(c) such generators of electricity from renewable sources as the Secretary of State considers appropriate, and(d) such other persons, if any, as the Secretary of State considers appropriate.(2) The requirement to consult may be satisfied by consultation before, as well as consultation after, the passing of the Energy Act 2013.
(3) A renewables obligation closure order is not to be made unless a draft of the instrument containing it has been laid before and approved by a resolution of each House of Parliament.”
(2) In section 32M(1) of EA 1989 (interpretation of sections 32 to 32M)—
(a) for “32L” substitute “32LB”;(b) after the definition of “renewables obligation order” insert—““renewables obligation closure order” is to be construed in accordance with section 32LA;”;
(c) in the definition of “specified”, after “renewables obligation order” insert “or a renewables obligation closure order”.(3) In section 106 of EA 1989 (regulations and orders), in subsection (2)(b) after “32,” insert “32LA,”.
(4) In Article 56(1) of the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6)) (power to amend Part 7 of that Order to take account of amendments of corresponding Great Britain provisions), the reference to amendments made to sections 32 to 32C of EA 1989 includes a reference to subsections (1) and (2) of this section.”
Baroness Verma
My Lords, Amendment 66 provides the Government with the power to close the renewables obligation to new capacity. As noble Lords know, this closure is planned for 31 March 2017 as part of the transition to contracts for difference. We had previously considered that the renewables obligation could be closed using existing powers within the Electricity Act 1989. However, we have now concluded that a specific power in this Bill will put the closure arrangements on a more reliable and transparent legislative basis.
To ensure that consumers and industry have confidence that closure will take place consistently across the UK, the amendment provides the power for the Secretary of State to close the RO in England, Scotland and Wales. It enables the Northern Ireland Executive to make similar provision for the Northern Ireland renewables obligation. To give industry early certainty on the way in which the Government propose to use this power, we intend to publish this week detailed proposals on RO grace periods for those projects that are delayed due to circumstances beyond their control. These proposals will include a 12-month grace period for projects subject to current investment decisions, giving developers making such decisions this winter substantial reassurance that their investments are not at undue risk from the RO closure date.
Amendments 70 and 107 to 109 support Amendment 66 by making consequential drafting changes. Amendment 110 ensures that the power on RO closure will come into force immediately upon Royal Assent. This allows the secondary legislation for the RO closure to be brought forward quickly, which is important for investor certainty.
In response to the very helpful points made in Committee by my noble friend Lord Stephen and by the noble Baroness, Lady Worthington, the Government have brought forward Amendments 67 to 69 to clarify the scope of the powers for the fixed-price certificate scheme. Amendment 67 removes the power for regular reviews of support levels under the fixed-price scheme. The Government have no plans to change these support levels as, in a closed and grandfathered scheme, we are unlikely to need to do so. It is therefore appropriate to remove the provision for regular reviews, which implied that we expected to make such changes. However, it is also appropriate to retain a mechanism to change support rates if unexpected developments were to make that essential. I assure noble Lords that the conditions that must be satisfied for a review to take place will be specified in secondary legislation, and subject to statutory consultation and affirmative resolution by Parliament.
Amendment 68 places a requirement on the Secretary of State to exercise certain powers under the fixed-price certificate scheme in a manner which replicates the renewables obligation. This requirement confirms the existing purpose of the clause, in response to concerns raised by the renewables industry and by my noble friend in Committee. The fixed-price scheme will respect our grandfathering policy and will reflect the RO, which has always been our intention. Amendment 69 ensures that the duties on the Secretary of State in relation to the strategy and policy statement do not apply to the fixed-price certificate scheme in Northern Ireland. I hope that noble Lords have found this a helpful explanation of the amendments, and I beg to move.
Baroness Worthington
My Lords, I am grateful to the Minister for explaining the amendments that she has tabled and spoken to today. I am particularly grateful for new Clause 66, which was something that we debated in Committee.
The issue that was under discussion was that we are, in this Bill, removing the renewables obligation—the policy that has supported renewables and has led to a significant increase in renewable energy and different forms of renewable electricity. The removal of the renewables obligation is significant because it contained an inbuilt incentive on the big six to keep investing in new clean technology. We are now removing that through this Bill. Unfortunately we have not been able to convince the Government to replace any form of obligation into this Bill on either the Government or the suppliers. We are now entering a period where we have to entice investors rather than oblige them. That is an issue that may come back to haunt us—a phrase that has been used before today.
I seek words of reassurance that, in the detailed arrangements that are set out in the regulations that close the RO, the Government will not prescribe a date until they are absolutely certain when the CFDs can come into operation. The issue here is that this Bill is going to be subject to state aid clearance; we need to be absolutely confident that we do not wind down the existing support mechanism before we are completely sure that we have a new support mechanism in its place.
There has been mention of the year 2017 in numerous government consultation documents and documents on this topic. At this stage we cannot be sure that 2017 is the right year. I urge the Minister to make sure that draft regulations are not overly prescriptive and that they give us the flexibility we need to ensure that there is a very good transition from one successful policy to a new untested policy which we hope will deliver but, as has been mentioned on a number of occasions, we still have concerns that it will not—especially for independent generators.
Baroness Verma
My Lords, I thank the noble Baroness and reassure her that we are of course mindful of all the concerns that she has raised. The RO closure date of 31 March 2017 was chosen in order to allow for that period of parallel running between the RO and the CFD. If we were to extend the RO, we might need to hold a further banding review for the post-2017 banding levels, and generators would not know the post-2017 banding levels until 2015-2016.
Any accreditation after 2017 would receive less than 20 years of RO support. The RO is subject to a 2037 end date. It would be wrong to extend this given that the CFDs are being put into place to provide better value for generators.
Baroness Worthington
I merely point out that these amendments remove the need for banding reviews, so I do not think it is true to say that we cannot have more flexibility over the end date because of banding reviews as these amendments remove the requirement on government to review the banding. I urge the Minister to reconsider that.
Baroness Verma
“32XA Certificate purchase orders: corresponding provision
(1) This section applies where the Secretary of State exercises a listed power in the making of a certificate purchase order.
(2) The Secretary of State must—
(a) so far as the order is made for a GB purpose, exercise the listed power in the way that the Secretary of State considers will replicate the effect of provision contained in a renewables obligation order (whenever made, and whether or not made by the Secretary of State) by virtue of the equivalent GB power;(b) so far as the order is made for a NI purpose, exercise the listed power in the way that the Secretary of State considers will replicate the effect of provision contained in an order under Article 52 of the 2003 NI Order (whenever made) by virtue of the equivalent NI power.(3) The duty in subsection (2) to exercise any listed power in the way mentioned in that subsection applies only to the extent that it appears to the Secretary of State that—
(a) it is reasonably practicable to exercise the listed power in that way, and(b) exercising the power in that way is not inconsistent with other duties or requirements of the Secretary of State (whether arising under this Act or another enactment, by virtue of any EU obligation or otherwise). (4) In the Table—
(a) a “listed power” is any power specified in the first column;(b) the “equivalent GB power”, in relation to a listed power, is the power specified in the corresponding entry in the second column;(c) the “equivalent NI power”, in relation to a listed power, is the power specified in the corresponding entry in the third column, and in that column references to an Article are to an Article of the 2003 NI Order.
Listed power | Equivalent GB power | Equivalent NI power |
|---|---|---|
Section 32O(2)(a) | Sections 32A(2)(a) and 32G(2)(a) | Articles 53(2)(a) and 55(2)(a) |
Section 32O(2)(b) | Sections 32A(2)(b) and 32G(2)(c) | Articles 53(2)(b) and 55(2)(c) |
Section 32O(2)(c) | Section 32G(2)(e) | Article 55(2)(e) |
Section 32O(2)(f) | Section 32A(2)(c) | Article 53(2)(c) |
Section 32S | Section 32B | --- |
Section 32T | --- | Article 54 |
Section 32U(5) and (6) | Section 32C(5) and (6) | Article 54A(5) and (6) |
Section 32V(1) | Section 32D(1) | Article 54B(1) |
Section 32W(5) to (8) | Section 32E(4) to (6) and (8) | Article 54C(4) to (7) |
Section 32X | Section 32J | Article 55C |
Section 32Z1(2) (so far as relating to definition of “renewable sources”) and (3) | Section 32M (so far as relating to that definition) and (2) | Article 55F(1) (so far as relating to that definition) and (2) |
Section 32Z1(9) | Section 32M(7) | Article 55F(3) |
(6) The relevant part of Great Britain to which a renewables obligation order relates may be ignored for the purposes of subsection (2)(a).
(7) It does not matter for the purposes of subsection (2) whether or not a renewables obligation order, or an order made under Article 52 of the 2003 NI Order, is in force at the time when the listed powers in question are being exercised.
(8) In this section—
“2003 NI Order” means the Energy (Northern Ireland) Order 2003 (S.I. 2003/419 (N.I. 6));
“GB purpose” means the purpose of imposing the certificate purchase obligation on the purchasing body of GB certificates;
“NI purpose” means the purpose of imposing the certificate purchase obligation on the purchasing body of NI certificates.”
Lord Teverson
Lord Teverson (LD)
My Lords, in moving Amendment 71, I will speak to my Amendments 73 and 74 as well. I understand that people who know better than I have described my Amendments 71 and 73 as clunky and I immediately put up my hand. I am trying to do the very simple thing of turning something that the Government described as a grandfathering clause into something that really is a grandfathering clause. It came as some surprise to us in Committee, when we perhaps read the Bill with greater care than we had done previously, that in terms of emissions performance standards, the Bill effectively fixes an EPS right up until the beginning of 2045. I refer not just to plants that already exist but to those that will be built well into the future. The emissions performance standard in this section of the Bill applies to plants built right up to 2044.
I seek to improve this position. I hope that I am offering greater investor certainty in terms of grandfather rights to those who might invest in new gas plant or plant in other power sectors covered by the EPS. Certain vehicles, for example, are approved when they are manufactured and first go on the road and keep the relevant grandfather rights until the end of their working life. That is what I propose in this amendment. As I say, it would provide investor certainty in terms of grandfather rights but, just as importantly, it would ensure that a regular review takes place.
Section 5 of the 2010 Act refers to three-yearly reviews, but those are non-statutory. I have been reminded that Clause 58, on page 56 of this Bill, contains a statutory mechanism to look at these things every five years. I suggest that this should be done every three years and that there should not be a need to change primary legislation—that is the difference—in order to change the EPS. It seems to me a very strong lock if the EPS is defined specifically in the Bill. I understand that the existing provision in the Bill seeks to provide investor certainty but I seek to give greater investor certainty by saying that once a plant is consented it keeps that EPS right the way through, at least until it has to be reconsented. I hope that the Government will think that that is an improvement.
Amendment 74 deals with a very important area. Coal plants are effectively excluded from the EPS under this legislation. However, unabated coal plants are one of the main sources of our nation’s overall emissions of CO2. This is a major challenge in terms of our climate change targets and our desire to bring down carbon emissions in the United Kingdom. The amendment seeks to do a number of very positive things. It would help fulfil the Government’s intentions around carbon emissions and their energy policy. The Government have rightly made provision in the Bill that if certain major modifications are made to fossil fuel generating stations they have to be reconsented and the EPS becomes applicable, thereby making it impossible to run an unabated coal station. I seek to extend that provision to all major changes, including those plants attempting to reinvest to comply with the industrial emissions directive—the successor to the large combustion plant directive. We seek to do this because the Government’s trajectory for their carbon plan has always assumed that fossil fuel unabated coal stations will come out of UK generating capacity in an ordered manner after 2016. All that this amendment intends is to make sure that that actually happens.
Why is there a question mark now? It is because coal, primarily because of shale gas in the United States, has now become incredibly cheap. One of the outcomes has been that last year coal accounted for around 40% of total electricity generation and overtook gas which is now only about 28% of electricity generation—hence the UK’s carbon emissions went up last year quite significantly. The amendment would ensure that, although investment to prevent the output of mainly nitrous pollutants and thereby comply with the IED might now become economic and allow coal stations to carry on with this exemption from the EPS for many decades to come, the Government will actually keep to their trajectory in terms of taking carbon out of the system.
Let me first stress, perhaps paradoxically, what the amendment would not do. It would not take out coal immediately. As I said, it complies with the carbon plan which the Government have already published. Coal can continue to operate beyond 2016 under derogations and, in fact, can operate for some 17,500 hours, limited, right up to 2023. The importance of that is that coal-fired power stations can still operate during peak times and therefore make sure that we do not have blackouts. So the amendment does not get in the way of security of supply.
The other thing the amendment would not do is put up electricity prices. As we well know, electricity prices are primarily driven by the wholesale gas price and although coal prices have come down quite significantly, unfortunately, as we know, wholesale gas prices have not and so electricity prices have not either. It sometimes makes me ask what the generating companies have done with the extra margin from the coal production, but we will leave that argument for another day.
The amendment would ensure that there is no longer a baseload coal generation into and beyond the next decade. That is crucial for climate change and the Government’s wish to bring down carbon emissions. It would also meet those Government predictions. There are two other things that the amendment will make sure of: one is that there is a continued incentive for carbon capture and storage. Clearly and quite obviously, if unabated coal can continue exempt from the emissions performance standards, then CCS will go absolutely nowhere.
Crucially, the amendment would make sure that new gas investment can actually take place. It was interesting to read this morning in the Daily Telegraph, which has a great interest in energy, about a report that was, I think, released today by an organisation called EY. The article is headed:
“Gas and nuclear plants that could power all UK homes ‘on hold’”.
It goes on to say:
“Gas and nuclear power plant projects with sufficient capacity to supply electricity to every UK household are on hold … some 23GW of new gas plant has received planning permission but just 4pc is being built, with the rest suspended or on hold ‘with owners waiting to see if the economic and policy environment become more favourable’”.
One of the reasons it gives for that is the cheap coal influx from America which has made the situation worse.
As I often do, I endorse exactly what the Daily Telegraph says; this is a really important issue. We need new gas generation; the planning permissions are there and cheap coal is one of the reasons that investment is being held back. We need to move forward with it and the amendment is important because it helps fulfil the Government’s carbon plan and policy and makes sure that the investment that we need in new gas is actually able to move forward. I beg to move.
The Chairman of Committees (Lord Sewel)
I have to inform your Lordships that if Amendment 71 is agreed I cannot call Amendment 72, by reason of pre-emption.
Lord Jenkin of Roding
My Lords, if no one else wants to stand up at this stage, perhaps I may just say a few words. I have found this a very difficult question. I have received a good deal of representations in favour of my noble friend’s amendment, and others sounding a warning note. I have said to them all that I will want to listen to the full debate, particularly to what my noble friend on the Front Bench has to say.
As I see it—I may be wrong, and I am open to be corrected—the Government face something of a dilemma. The noble Lord, Lord Teverson, quoted the figures on the existing volume of coal-fired electricity generation in this country. I think he said that it is now about 44%, despite the significant closures of some of our biggest coal-fired power stations which have taken place in the past 12 months. The Government clearly recognise that there must be no power cuts and that the impact of such cuts on the country’s business and, indeed, on the Government’s reputation would be quite devastating. Therefore, as the Prime Minister said to me and a number of my noble friends back in July, there must be no power cuts and we will have to do whatever we have to do to make sure that we keep the lights on. As the Minister who presided over the three-day week back in 1974 I have every sympathy with that, because it is not a comfortable position for any Government or Minister to be in. That is the first priority of which the Government have to take account.
On the other hand, if the Government want to make it possible for coal-fired power stations to continue, there will be a severe impact on the incentive to build new power stations. The gas-fired power stations have much lower emissions; a modern station may have as little as one-third the emissions of a coal-fired station. Given that we have spent a lot of time during our consideration of the Bill discussing the need for a proper financial structure for the new generators, many of which would want to build gas-fired stations, one can see the Government’s dilemma. I am not entirely sure that I can see the matter as clearly as my noble friend Lord Teverson has, and I will want to hear the argument.
I, too, have a copy of the Daily Telegraph article. My noble friend left out rather a significant sentence and was very kind to my noble friend on the Front Bench. The article said that the problem was due to the Government’s “dithering”. We have heard a certain amount about that—it is what the Telegraph said and what my noble friend left out. As has been said many times, there is no doubt that there is a considerable hiatus in the investment in new generating capacity, a consequence of which has been the oft-repeated and increasingly serious Ofgem warnings about the narrowing of the margin between capacity and demand. The Government, therefore, simply cannot go on risking that hiatus. So what is to be done?
I have read an interesting report in a paper that was prepared for the European Climate Foundation by Simon Skillings of Trilemma UK. I found it a helpful analysis of the whole problem. One of the things that Mr Skillings said—and I am following some of the argument of my noble friend—is that:
“Perversely, the decision of large amounts of coal-fired generation to opt-in to the IED”—
the European directive—
“presents a greater threat to security of supply. This is because opted-in coal plant would be able to operate at higher load factors, presenting a significant risk to investors in new gas-fired plant and owners of existing gas-fired plant that may currently be mothballed”.
I have drawn attention, both on Second Reading and subsequently in Committee, to the substantial amount of gas-fired plant which is currently being mothballed, and which would take varying lengths of time to bring back into production. Mr Skillings continues:
“New plant is, therefore, less likely to be built, and mothballed plant is more likely to be closed, under these circumstances”.
That seems a considerable dilemma. I have to confess, having studied both sides of the argument and tried to understand all the evidence, that I am still unclear as to what is the right course.
As I said at the beginning of my speech, I have been replying to those who have been making representations to me about this group of amendments by saying, “I will want to listen to both sides of the argument before finally making up my mind”. I do not know whether my noble friend will want to press the amendment to a Division; we shall have to wait and see. Other noble Lords who have signed other amendments in this group may wish to come in and I will listen to them with equal attention. However, I find this a difficult dilemma. We have got existing coal power stations, they are producing energy and they are helping to close the gap between demand and capacity. Therefore, to countenance a significant reduction from that source and assume that it will be made up with generating capacity by new investment seems to be taking a considerable risk.
My noble friend has advisers who follow this a great deal more closely than I can, and I shall be interested to hear what she has to say. I have to confess that, for me, it is a difficult issue.
Lord Stern of Brentford (CB)
Coal is the dirtiest of fuels: it emits around twice as much carbon dioxide per kilowatt hour as gas; it is responsible for more than 40% of world energy greenhouse gas emissions, and for more than 25% of UK greenhouse gas emissions. Amendment 74 will encourage the switch from coal to gas; delaying that switch could substantially increase the cost of meeting our climate change targets. Gas itself has emissions which, if unabated, are far too high for the medium or longer term but may provide a useful bridge in the shorter to medium term—that is, until around 2030 or so. After that, gas or coal would have to be abated or replaced with renewables or nuclear if we are to meet our targets. Unless the world acts to phase out or abate via carbon capture and storage, in the next few decades coal will be very likely to take the world into very dangerous levels of greenhouse gas concentrations.
If we could be confident of a strong carbon price then Amendment 74 might not be necessary. That would be a clear way of addressing the colossal market failure associated with greenhouse gas emissions. Such a strong carbon price would likely make renewables and nuclear more than competitive with gas and coal in the next one or two decades. However, with apparent quarrelling within the Government, and possible backtracking and “reviewing” constantly in the air, who could be confident about such a strong carbon price?
Work as an academic economist, as chief economist of the EBRD, as chief economist of the World Bank and as head of the Government Economic Service in the UK has made it clear to me that government-induced policy risk is a major deterrent—perhaps the major deterrent—to investment around the world. That is indeed why energy investment in the UK has been so inhibited and it is why we need the clarity that this amendment brings. Clarity can unleash investment; confusion, on the other hand, risks both the lights going out and a world of dangerous climate change.
The Government have been working towards a clearer strategy in the Bill, and many, including me, welcome that, but they have allowed uncertainty and vacillation to creep back in. This amendment would go far to overcome the doubts on policy that the Government themselves have created. It would essentially drive out unabated coal from the UK by 2030 other than in a back-up role. That is exactly what we have to do to achieve our targets and to make our contribution. How can we ask others to stop treating the atmosphere as a dump if we are not prepared to move strongly to do so ourselves?
China, where I have been working for 25 years, India, where I have been working for 40 years, and many other countries look to Europe and the US for leadership. If we do not show that leadership, they will conclude that the rich world is not serious on this subject. Let us recognise that China—the largest economy in the developing world and the biggest emitter in the world—is changing. Targets in the 12th five-year plan were strong. A peak in emissions in 2025 is now being discussed in relation to the 13th five-year plan. I have been involved in a number of those discussions and, before now, dates earlier than 2030 have not been mentioned. In addition, a peak in coal consumption in China within a decade is under open discussion. However, China is looking at others, including us. We should not delude ourselves that because we are small our example does not count.
By accepting the amendment, we can provide the clarity that will unleash investment, reduce our emissions, manage effectively the costs of so doing and have a real influence on others. That is why I support Amendment 74 in the name of the noble Lord, Lord Teverson.
The Earl of Caithness
My Lords, when we discuss a group of amendments, the majority of which are government ones, one of the difficulties at Report is that we will not have heard the Minister talk to those government amendments. However, I expect that my noble friend will talk to them and I should like to ask her to take a little time to explain why we have the date 31 December 2027 in Amendment 73B.
Carbon capture and storage was one of the areas highlighted in the report of Sub-Committee D, which I referred to last week. I think we were all saddened that so little progress had been made on it. Therefore, I should also like my noble friend to say how she anticipates an increase in the use, and perhaps even the commercialisation, of carbon capture and storage, particularly when Germany has turned its back on it and apparently does not want to take any active part in it.
Turning to Amendment 73 in the name of the noble Lord, Lord Teverson, I understood that in any case the Government were going to review the EPS on a three-yearly basis. The Bill states that it will be statutorily reviewed every fifth year in accordance with the 2010 Act, but I understood that they were going to do so on a three-yearly basis as well. I wonder whether my noble friend could confirm that.
With regard to Amendment 74, which is obviously the key amendment here, I, like my noble friend Lord Jenkin of Roding, am torn. I have certainly received representations from people saying that this would be a disastrous way to go. The noble Lord, Lord Stern, made a very powerful case, as would be expected, but that is only one side of the argument. There is, of course, the trilemma, which we are all very much aware of: it is not just a question of decarbonisation and the removal of bad pollutants; there is also affordability of supply and continuity of supply. Like my noble friend Lord Jenkin, I have received representations that Amendment 74 would, if passed, jeopardise our security of supply.
I believe, too, that it puts us out of kilter with the rest of Europe. There is only a limited amount that we can do as an individual country. I was grateful that the noble Lord, Lord Stern, said that our voice is still heard; but we live in a nasty, tough, commercial world. If others can import cheap American coal and keep their energy prices lower as a result, and we prohibit ourselves from doing so, we put our businesses at risk. We make it more difficult to get the growth that this country so badly needs; and it is through that growth that we will be able to implement the reduction in carbonisation that we all want.
I am therefore unable to support my noble friend Lord Teverson on this—it takes us too far. It tilts the trilemma too much towards the green agenda and does not take enough account of the other important issues.
Lord Lester of Herne Hill (LD)
My Lords, I was in China the week before last, in Xi’an and Beijing. I will say just this. Having witnessed the smog that inhabits the whole of Xi’an and Beijing, and from my conversations with Chinese opinion-formers—who made it clear that they look to this country and recognise their own failings in not having tackled these problems earlier—I can confirm everything that the noble Lord, Lord Stern, has said about China. For those and other reasons, I support the amendment.
Lord Oxburgh (CB)
My Lords, I, too, support these amendments. We have to recognise that the Bill has been a long time in gestation. What has changed since the Bill was originally conceived is that the bottom has dropped out of the coal price. It is very important to point out to the noble Earl, Lord Caithness, that in fact cheap coal does not mean cheap power: it means big profits for the owners of coal-fired power stations. As the noble Lord, Lord Teverson, pointed out, the electricity price is effectively tied to the gas price because of the operation of the mechanisms. As things are at present, it is effectively the low coal price that is driving the operation of coal-fired power stations and giving very substantial profits to those companies that have them. Indeed, roughly half that capacity is owned and operated by the big six.
I will not draw on your patience longer, but simply say that I understand the point made by the noble Lord, Lord Jenkin. There is effectively a chicken-and-egg situation here. Unless we give the market the certainty that these amendments would give, we shall not see the investment in gas that is needed to maintain the attainability of our longer-term targets.
Lord Deben
My Lords, the noble Lord, Lord Jenkin has rightly pointed to the crucial problem, which is: how do we deal with that period in which there is fear that the lights will not stay on? That is a proper fear to have and should be the first fear of any Government, because there is a responsibility to keep the lights on. There ought to be a second fear, too: namely, that we keep the lights on in such a way that the next generation has an even worse position, because we have polluted the atmosphere further and made the fact of dangerous climate change even greater. We naturally have to look at this very carefully.
However, on this occasion it seems that those who are most concerned with keeping the lights on, and I certainly put myself in that category, and those who are also concerned with climate change, and I put myself in that category, too, are in fact pushing at the same door. If we do not have a mechanism whereby it is sensible to invest in gas, that bit of the transition will not take place. That would seem to most of us to make it more difficult to provide affordably for the energy that we need.
The noble Lord, Lord Oxburgh, as so often, put his finger on one of the other problems. When we talk about these things, let us not confuse the cost of production with the price at which it is sold. Those of us who, like me, have represented constituencies, know how many people are close to the edge when it comes to warming their homes. The whole question of affordability is utterly crucial. However, the idea that if we burnt coal we would get cheap power is not so. We need to have a mixture—a portfolio of means of generation—in which gas will play its part.
We have heard a lot recently about the opportunities that shale gas will give us. I find both extremes unacceptable—from those who think it means the end of the world at one end to those at the other who feel that it will be a game-changing matter. They are both wrong, but there is a place for gas. If that gas were produced at home, that would contribute considerably, not to a lowering in cost because it would have little to do with that, but to greater energy sovereignty, which is worth while.
The question is how we move from a situation which we hardly imagined, because the bottom had not fallen out of the coal market, in which we have to provide for the transition from coal to gas to one in which we do provide for that transition. The difficulty is that I suspect both those who tabled the amendments and the Government are on the same side—both groups want to achieve this. The real question is that there is a kind of fear of letting go of nurse’s hand—that is, the coal—in case we do not get the gas. I would like to turn it around the other way: if we do not do this, I am not at all sure that we will get the gas. That is crucial. I hope very much that the Government will enable us to have a situation in which we provide for that transition.
I have been trying very hard during these debates to remain entirely independent because all I have spoken are the words that the Committee on Climate Change, which I chair, has put forward. The committee has made it clear that it feels that this kind of transition needs to be facilitated in this way. I do not want to make this a great division because I do not think it is one; it is a question of how we do this safely in the new circumstances to which the noble Lord, Lord Oxburgh, referred.
I very much hope that my noble friend will be able to give us confidence in the Government’s answering of this question if she is unable to accept the amendments that are put before her. If we do not do one or other, we will find ourselves unable to guarantee reasonable prices or the continuance of the lights being on because we have not made the transference that is essential in any case and which I thought everyone supported.
Baroness Worthington
My Lords, I was pleased to add my name to Amendment 74, and I support the other amendments in the group. At the start of this process way back in 2010, the Government said in a consultation document:
“The objective of the EPS is to ensure that while coal continues to make an important contribution to security of supply, it does so in a manner consistent with the UK’s decarbonisation objectives”.
The way that the EPS is drafted does not achieve that aim. The EPS was a response to the Kingsnorth protests against the building of a new, unabated coal plant. It was borrowed, but not fully, from similar regulations in California. The Minister, Greg Barker MP, can take credit for introducing this policy. However, in California they are clear that the limits that are placed on coal stations apply in the event of a coal station seeking a life extension. That is what this amendment is designed to do: to complete this process by adding that important missing element.
New coal was never the most carbon-intensive source of electricity; old coal is. The world has moved on since Kingsnorth. Low coal prices and high gas prices have caused higher operating levels at coal stations now than ever before. As a result, as the noble Lord, Lord Teverson, mentioned, we have seen UK emissions going up, not down, and our carbon intensity increasing last year, not decreasing. How are we going to hit decarbonisation targets if we do not have a tool in our armoury to do something about this issue? We could have a policy of carbon pricing, as the noble Lord, Lord Stern, has mentioned. However, carbon pricing policy has not addressed this issue, and will not. We need regulation.
Turning to the security of supply, 8 gigawatts of old coal capacity has recently shut. This has brought down our historically high overcapacity to a more modest level, yet our carbon intensity is stubbornly high, at around 500 grams per kilowatt hour. This is because the 12 coal stations that are still operating, representing 15 gigawatts of power, are base-loading. They are no longer providing back-up power in the winter peaks but are operating throughout the year and making their owners a considerable amount of money. The Committee on Climate Change has been clear that were we to get the merit order of existing plants right, we could shave almost 200 grams off that figure overnight without having to build a single brick or power station.
The 12 stations that I have mentioned have tightening air quality regulations in front of them, which will affect their operating post-2016. However, they have a range of options for what to do in the face of those tightening regulations. One is not to refurbish; they will then be required to close by 2023. Another option is to convert to biomass. The final option is to fit the filters that would enable them to comply with the air quality standards. They could then remain open indefinitely. In that situation, they would certainly wish to continue base-loading, since they would have made new capital investment on which they would want to seek a return.
The new air quality standards start in 2016. I am sad to say that Defra, the lead department, is in danger of not complying with those regulations because it is failing to provide enough detailed information about what these power stations are planning to do. This can be only because it is intent on giving the maximum flexibility while the details of the Bill are worked out, because the Bill contains another very important element that changes the fortunes of coal: the capacity mechanism payments. The capacity mechanism will give existing coal plants an up-front cash injection just at the time they need it to make those refurbishment decisions. Plants will be eligible for three-year contracts. We cannot be certain how much those contracts will be worth, but it will certainly be in the range of £80 million to £100 million or more over the three years. The cost of fitting the filters is a surprisingly similar number of around £100 million for a 1 gigawatt plant.
If they decide to make these capital investments and tip into this compliant state, this will reduce their thermal efficiency even further. Are the department and the Minister aware of how inefficient these stations are and quite how much of the heat is escaping as lost energy into the atmosphere? That is quite apart from the carbon load that is also being added. Fitting these filters would also increase the operating costs of these plants. The chemical plants necessary do not operate for free.
The Government’s policy is not to support the application of an EPS to coal seeking life extensions, and no doubt we shall hear some of the reasons from the Minister. Other noble Lords have touched on the security of supply issue. As long as this question over 15 gigawatts of coal is allowed to remain unanswered, how can any investor in replacement capacity move forward? If you are not sure how many plants will be operating and whether they will be base-loading, you will find it very difficult indeed to make the case for investment in new capacity and to bring mothballed capacity back on. I will not go into too much detail on this but we have all had representations from gas investors saying that they support this amendment. We should just remember that, in a carbon-constrained world and under a carbon-budgeting system, every coal station that remains on the system displaces two gas stations because gas can operate with half the emissions of coal
Baroness Verma
My Lords, I will speak to the amendments in my name. I am grateful to my noble friend Lord Teverson and the noble Lord, Lord Whitty, for their amendments and to all those who have contributed to this debate. I remind the House of the policy intent behind the EPS. It is to ensure that no new coal-fired power station is built without CCS, and that it is done in a way that does not undermine the investment we will need in gas generation to keep the lights on at a reasonable cost to consumers.
Amendment 72 seeks to shorten the grandfathering period of the EPS from the end of 2044 to 2029. This shortening by some 15 years will increase uncertainty for gas investors. Without this certainty, we risk deterring or increasing the cost of new gas investments, with the obvious potential consequences for security of supply and costs to consumers. I recognise that 2044 is a long way off but this date is derived from what investors tell us is required. Under the current provisions, new gas plants consented in the later part of this decade and built in the early 2020s would have a little over 20 years of certainty in respect of how the EPS will apply to those assets. That is the amount of time that investors tell us is required to pay back all debt and see a return on equity in the project. In other words, with grandfathering, the EPS is not a barrier to financing new gas generation plants.
Noble Lords may be concerned that we may be locking in high levels of unabated gas generation well into the future that could risk achieving our legally binding 2050 carbon emissions target. I reassure noble Lords that the other measures under our market reforms will ensure that this is not the case and, therefore, that the EPS is consistent with our 2050 decarbonisation target. This is because unabated gas generation will be increasingly displaced by low-carbon generation over time. The Government set out clearly in our gas generation strategy how we expect gas plants’ load factors to decline as low carbon comes on to the system, and how in the very long term we expect it to be economically attractive for gas plants to retrofit carbon capture and storage equipment. Grandfathering the EPS until 2044 will not prevent this from happening. Grandfathering to just 2029 would risk deterring or increasing the cost of the investment in the new gas plants that we need to be built up to 2030.
I turn to Amendments 71 and 73. The approach proposed by my noble friend is very close to the one that we have already adopted. The Government have already committed to a regular three-yearly review of the EPS. The EPS will also be reviewed as part of the statutory review of EMR under Clause 58 of the Bill. The amendments would enable the statutory rate of emissions and the period for which it will apply to be revised very quickly following a review by way of an order. This is an approach that the Government have considered but have concerns about. The ability to revise the EPS very quickly could result in a specific investment hiatus in the run up to a review, due to the uncertainty that the review process introduces. Pre-development costs for power projects can run into tens of millions of pounds, so investors will be very aware of the risk that a quickly implemented decision to revise the EPS could render a project economically unviable, with the financial loss that could result.
That is why we have taken the approach that any future changes to the EPS should be by way of primary legislation. Combined with the three-year period between reviews, this will help to ensure that projects that are already in the planning system—by that stage having already had significant financial commitment—are able to complete that process before any changes to the EPS that would affect their project come into force. However, I recognise the spirit in which my noble friend has brought this amendment and the helpful intent to bring greater certainty to the review process and the process for making any future changes to the EPS. I will reflect on his suggestions with a view to how we might underpin his concerns without creating any unnecessary investment hiatus.
Turning to Amendment 74, the Government’s goal is an orderly transition away from coal to lower-carbon fuels over time in a way which does not create unnecessary costs for consumers. While we do not expect large numbers of coal plants to invest in clean-up equipment, a very small number of our more efficient plant may wish to do so. This amendment is very likely to deter that investment. In this scenario, more coal stations would have their operation constrained, and there could be more stations closing around the end of the decade than might otherwise be the case. This could require more gas plant to be built earlier to fill the gap at greater cost—ultimately, to consumers. Why should we close down our options in this way now when it could put our security of supply at risk and significantly increase costs to consumers? A small number of cleaned-up coal plants could provide greater diversity and bring additional resilience to the electricity system in the coming years, helping to ride any bumps in the road, given the significant investment challenge that we face.
I have also considered carefully the argument that by taking action to drive the closure of all of our coal power stations, we would be giving certainty to investors in new gas generation. While this may be conceptually true, it could also be true to say that you would give certainty to investors in electric cars if you banned all petrol vehicles, but that does not mean it would be a prudent or cost-effective thing to do.
Baroness Worthington
Is the Minister aware that the setting of the EPS on these refurbished plants would not cause them to close but would simply prevent them baseloading? They would still be available for the rest of the decade and the decade beyond to act as backup plant.
Baroness Verma
If the noble Baroness will allow me to continue, I may be able to illustrate further and more clearly the Government’s intentions.
The Bill is about creating the conditions for investment. Intervening in this way and targeting the EPS on a particular set of generators and their assets risks damaging the confidence of investors in the UK as a place to invest in the energy sector. This is precisely the opposite of what the Bill is designed to achieve.
The amendment would also create a direct interplay between the EPS and what is a complex European directive, and I question whether the proposed amendment would be compliant with the UK’s European obligations, especially those under the industrial emissions directive. The way in which European law interacts with our domestic law in this area is complex, and the Government are not in a position to reassure the House today that the amendment would be compliant.
In summary, to accept this amendment would not be consistent with the purpose of the EPS. It is unnecessary and could potentially have negative impacts. Our position is supported by the CBI which said in its Report stage briefing,
“the current EPS proposal should remain unchanged”.
Do not be mistaken, the Government do not want old coal hanging around for ever. We want, through the combined effect of all the measures in this Bill, to create the conditions for an orderly, cost-effective transition away from high-carbon coal through investment in lower carbon alternatives. We want this to be achieved in the way that best protects the consumer.
I turn now to the amendments that stand in my name. They seek to assist the development and commercialisation of carbon capture and storage by providing that a time-limited exemption to the emissions performance standard will apply to carbon capture and storage projects during their commissioning phase. While this has always been the Government’s policy intention, these amendments seek to provide certainty in the Bill. Amendment 73B provides for a three-year exemption period for fossil fuel plant that use a complete CCS system. It also provides that the exemption period may only begin once the complete CCS system is ready for use and is physically in place. The exemption is time-limited and available until the end of 2027. This reflects our view that the exemption is a temporary measure designed to assist the development of CCS and we expect learning from the first projects and those expected quickly to follow to remove the need for an enduring exemption.
Lord Teverson
My Lords, I thank the Minister for going through that so comprehensively. She is right that this is a very green Bill. My noble friend Lord Lawson was quite right to accuse it of being a decarbonisation Bill. That is exactly what it is.
I very much welcome my noble friend’s comments about Amendment 71 and my amendments around grandfathering clauses. I do not think that I got the phrasing absolutely right and I look forward to her looking at that.
On Amendment 74, I want to come back to something said by my noble friend Lord Caithness. He said that we need to be practical and down to earth and to get involved in the reality of energy. This amendment was precisely about that. We have to remember that, as this provision stands, it does not guarantee that coal capacity will be there; it is left entirely to the whims of investment committees of the big six as to whether they decide to invest. We give up control at that point—we do not know. The future is indeterminate. If we passed this amendment and it became part of the Bill, we would then know what would happen. To me, that is better than knowing what might or might not happen.
As the Minister said, we are looking for investor certainty here. The only way that new gas will be invested in as an intermediate technology is through that certainty. At the moment, that investment is not taking place, despite the clear ambitions that it should. However, I understand the position of the Minister that if it were not for this Bill we would not have an emissions performance standard. I advocated it several times to the party opposite pre-2010 and it was never accepted, so this is a major step forward. I beg leave to withdraw Amendment 71.
Baroness Verma
“(a) section (Introduction of carbon capture and storage: exemption from emissions limit), and(b) ”
“Introduction of carbon capture and storage: exemption from emissions limit
(1) The emissions limit duty does not apply during the exemption period in relation to fossil fuel plant for which there is a complete CCS system.
(2) For this purpose, a complete CCS system, in relation to fossil fuel plant, is a system of plant and facilities for—
(a) capturing some or all of the carbon dioxide (or any substance consisting primarily of carbon dioxide) that is produced by, or in connection with, generation of electricity by the generating station comprised in the fossil fuel plant,(b) transporting the carbon dioxide (or substance) captured, and(c) disposing of it by way of permanent storage.(3) The exemption period for any fossil fuel plant is the period—
(a) beginning with the first day on which the fossil fuel plant and its complete CCS system are ready for use, and(b) ending with—(i) the expiry of 3 years beginning with that day, or(ii) 31 December 2027,whichever is earlier.(4) In subsection (3), “use” includes testing in connection with the generation of electricity on a commercial scale.
(5) Subsection (1) is subject to any provision made by regulations under section 50(6)(b).”
Baroness Worthington
“(iii) substantial pollution abatement equipment dealing with oxides of sulphur, oxides of nitrogen, heavy metal emissions or particles is fitted to the generating station.”
Baroness Verma
“Modifications where carbon capture and storage process used in relation to part of generating station3A (1) Regulations under section 50(6)(b) may provide for the exemption in section (Introduction of carbon capture and storage: exemption from emissions limit) to apply with modifications in cases where the complete CCS system for the fossil fuel plant relates to only part of the generating station.
(2) For this purpose—
(a) a complete CCS system relates to part of a generating station if it is a system for capturing some or all of the carbon dioxide (or any substance consisting primarily of carbon dioxide) that is produced by, or in connection with, generation of electricity by that part of the generating station, and(b) “complete CCS system” has the same meaning as in section (Introduction of carbon capture and storage: exemption from emissions limit).”
(a) the generating station is used for the first time, or permanently ceases to be used, for the generation of electricity,(b) any period during which the emissions limit duty does not apply in relation to the plant by virtue of section (Introduction of carbon capture and storage: exemption from emissions limit) begins or ends, or(c) the generating station, or any CCS plant comprised in the fossil fuel plant, is altered.”
Baroness Verma
“Reduction of landfilling of organic waste
The Secretary of State must, as soon as reasonably practicable, set out a plan and timeframe for the reduction and eventual elimination of landfilling of organic waste in order to make it available for 100% renewable energy generation and other appropriate uses consistent with the waste hierarchy as defined in The Waste (England and Wales) Regulations 2011.”
Lord Judd (Lab)
My Lords, Amendment 76 would insert a brief new clause after Clause 58. I declare an interest in that I am a member, supporter and honorary officer of a number of environmental and related NGOs working in this sphere. There is a considerable and significant consensus among a growing number of organisations that the approach put forward in the amendment is overdue. Prominent among those organisations is the Green Alliance—which really has done a great deal of important research—to which I personally am very grateful. I thank it for having very much prompted me to put forward the amendment. However, it is not just the Green Alliance. For example, the Committee on Climate Change noted in its recent report of 26 June that,
“further consideration should be given to banning specific types of biodegradable wastes, such as food waste, from landfill”.
I am glad to see that the noble Lord, Lord Deben, is in his place because nobody knows more about these things than he does. I was interested to be reminded that on 12 February this year he asked in this House whether it was not time that we banned this material—food waste—from landfill. As I recall, he argued that it was seriously dangerous to create methane. Banning it would enable us to insist upon wider recycling of what is wasted. Commenting on WRAP research into the feasibility of landfill bans, Liz Goodwin, chief executive officer, said:
“This piece of research shows that we could make some significant financial and environmental savings if we stopped sending certain types of rubbish to landfill”.
Tamar Energy and the PDM Group, both large AD investors, have called for food waste landfill bans. The Renewable Energy Association has also produced highly relevant supporting arguments.
During the first day on Report last Monday, proponents of the decarbonisation target amendment, backed by an impressive coalition of businesses, investors and civil society groups, powerfully argued that such a target would provide businesses with the certainty that they needed to invest. The target in their view would have lowered the cost of borrowing, the benefits of which would have filtered to consumers in the form of lower energy bills. A speedier move from a carbon-based energy system, which is becoming progressively more expensive, to a low-carbon system with high investment in energy efficiency would have guaranteed comparatively lower energy prices in the long term. In addition, the certainty of a target would have encouraged development of low-carbon supply chains and associated jobs in the UK.
Like the decarbonisation target amendment, this amendment would provide investors with greater certainty so that we can end the dumping of a substantial renewable energy source in the form of organic waste into landfill. This will benefit business and consumers, and help the UK to meet carbon and renewable energy targets. There are four key benefits. First, it will help the UK meet its renewable energy and climate change targets. Waste emissions, mostly from organic waste in landfill, represent about 3% of total UK emissions. Secondly, it would reduce the amount of waste going to landfill. As recently as 2009, the UK was still land-filling nearly 21 million tonnes of organic waste. Thirdly, the diversion of food waste from landfill would drive at least £693 million of feedstock to anaerobic digestion each year. Diverting this food waste from landfill would also save over £500 million in disposal costs. This is well demonstrated in valuable research by the Green Alliance. Fourthly, it would reduce risk. AD plants are not being built because of concerns about feedstock. Of Tamar Energy’s 40 proposed AD plants, 25 are at risk due to difficulties in sourcing food waste. Investment in these plants, which is already secured, represents the single largest clean-tech capital deal of 2013.
It was claimed in Committee that AD does not require targets because these would risk the creation of new compliance burdens for business and local authorities. However, the amendment would offer certainty to business. For example, as I have just outlined, Tamar Energy recently called for a ban on food waste to landfill. Feedstock risk is currently a major contributor to financing problems for the AD industry: banks are simply not lending to incineration plants without guaranteed feedstock arrangements with local authorities. It was recently reported that 25 of Tamar Energy’s 40 proposed AD plants are at risk due to difficulties in sourcing food waste, and that a landfill ban and separate food waste collections would address this problem. Indeed, PDM Group also supports a landfill ban for food waste as this would underpin investment in AD plants.
What is more, it is worth noting that the lack of concern in official quarters about feedstock risk for anaerobic digestion contrasts poorly with the strong concern about feedstock risk for conventional gas generation. In July 2012, the Chancellor announced £500 million in tax breaks for new oil and gas field development to give,
“investors the long-term certainty needed to make decisions on investment in … gas”.
In 2013, he halved the tax rate for onshore gas production. This contrast surely needs to be addressed. If the amendment does nothing else, it enables us to address it.
The Earl of Erroll (CB)
My Lords, I am flailing around slightly but I want to make a different point. The noble Lord’s point is well taken: there is no point in food waste unnecessarily going to landfill. It can also be composted in the right mixture with other green waste, and so on. That is an alternative, because it then makes a very good soil improver. The only problem is that the regulations around the mobile plant SR2010 No. 4 permits that you have to get can hold things up. They can be quite difficult to get and there is sometimes quite a backlog. The other thing is that you do not really know how much they are going to allow you to put on. Instead of trusting your agronomist to get your fertiliser recommendations right, the Environment Agency insists on trying to do it some time ahead. I am not quite sure why.
The Environment Agency seems to think that farmers are trying to poison their soil. A sensible farmer is not trying to poison their soil. They will have a proper agronomist giving recommendations. That would be much easier to manage, because you have to start putting the waste onto heaps during the year. You cannot suddenly get, in our case, 12,000 tonnes out of a composting operation in one month. You can only put it on in that gap when you are harvesting, before you cultivate the next year. You are expected to incorporate it within a day, because if anyone complains about the smell they come down on you like a ton of bricks—even though there can be other farmers spreading slurry and all sorts of manures around the place, so the smell could easily be coming from them.
At the moment, those who are trying to avoid food waste going to landfill are sometimes having a difficult time. It might be nice if the Environment Agency looked slightly more kindly on it at times. So far we have not had any real problem, but I can see it building up. Last year we suddenly had the amount that we could put on reduced, which caused a certain amount of chaos to our planning because we buy fertiliser a long time in advance, and so need predictability. It would be far better to leave it to our agronomist.
Lord Grantchester (Lab)
My Lords, this is the amendment that we discussed in Committee in July. On this side of the House, we have considerable sympathy and agreement with my noble friend’s amendment and the sentiments behind it. In Committee, the debate highlighted the achievements made by the previous Labour Government in initiating waste reduction plans; the progress made since the last election, with the setting up of the Courtauld agreement; and the developments made at EU level with the landfill directive, setting up targets to reduce the amount of biodegradable municipal waste entering landfill in 2020 to 35% of 1995 levels. The UK is on course to meet that target; there is an EU-wide review which should reveal that next year.
Over the past couple of years, the number of plants set up to produce energy from anaerobic digestion of waste has doubled to 110. The Minister spoke of encouraging this through feed-in tariffs and the renewable heat incentive, as well as the Green Investment Bank’s initiative, in her reply in July. My noble friend’s amendment is pushing at an open door; it is happening already, but as part of an industry and the EU-wide process rather than through adding it to the Bill.
In my response in July, I said that recycling organic waste for renewable energy generation is no substitute for eliminating the volume of food waste produced in the first place. Ten days ago, Tesco revealed that in the first six months of 2013 it generated 30,000 tonnes of food waste. Obviously, this figure revealed widespread differences between different foodstuffs. To reduce waste, it is important first to discover where that waste is taking place, so that action can be made more effective. Tesco added that, where possible, any food which could not be sold could also be donated to the charity sector, Foodshare and other food banks, or diverted to animal feed for livestock. This is also part of an effective answer.
While the Minister will be resistant to the amendment, it gives me the opportunity to ask her to commit the Government to certain helpful activities. Would she promise to report back to the House at regular intervals—I suggest twice annually—on actions that the Government are taking with the aim of reducing organic landfill waste, as well as undertaking to report back to Parliament immediately after the 2014 EU review is published, offering an updated strategy for reducing landfill of organic waste?
Lord Teverson
My Lords, I shall speak slightly out of order here, for which I apologise. I tabled a similar amendment in Committee, and I am very pleased that the noble Lord, Lord Judd, has brought this matter forward again.
This is not my noble friend the Minister’s area, or her department’s; it is very much a Defra area. Although I suspect that this Bill is not the best place to do this, I very much hope that Defra will take this area increasingly seriously and that the Government will find a way in which to move the agenda forward.
Baroness Verma
My Lords, I am grateful to the noble Lord, Lord Judd, for prompting further debate on the setting of targets for the landfilling of waste. Amendment 76 is designed to require the Secretary of State to set out a plan and timeframe, as soon as is practicable, for reducing and eventually eliminating the landfilling of organic waste. It would make it available for renewable energy generation and other appropriate uses, consistent with the waste hierarchy as defined in the Waste (England and Wales) Regulations 2011.
The Government support the minimisation of organic waste going into landfill and are sympathetic to the aims of this amendment. When we debated this matter in Committee, I outlined the considerable progress made in minimising organic waste entering landfill by the reduction of food waste and the increase in the number of anaerobic digesters generating energy from food waste. We very much agree with the points that the noble Lord made during that debate about the value of avoiding emissions of greenhouse gases from landfill. Preventing food waste is the most effective approach in carbon-saving terms: compared to landfilling, each tonne of food waste prevented means 4.2 tonnes of CO2-equivalent emissions are avoided.
We have worked very successfully with industry to reduce supply chain food and packaging waste by nearly 10% over the past three years, while the Waste and Resources Action Programme’s “Love Food Hate Waste” campaign helps consumers to make informed choices on reducing food waste. Household food waste is down by 13% since 2006, and we expect a 20% reduction to be achieved during the three phases of the Courtauld commitment that all the major supermarkets have signed up to. These results show that the voluntary approach can deliver real reductions in waste while allowing businesses to be more efficient and competitive. We want to build on this work with businesses rather than impose targets or restrictions. When food waste cannot be avoided, anaerobic digestion is currently the best option that we have, because it produces renewable energy and a valuable fertiliser. Over the years, we have provided a range of support through WRAP for anaerobic digestion, including £11 million in grant funding.
The substantial increase in the number of anaerobic digesters generating energy from waste continues. We now have more than 100 megawatts of capacity for waste and, together with the long-standing use of anaerobic digestion in the sewage treatment sector, this gives us capacity to generate 1.5 terawatt hours annually. In the Government’s anaerobic digestion strategy to tackle barriers to anaerobic digestion, we estimated that there was a potential to generate 3 terawatt hours to 5 terawatt hours of electricity by 2020. With another 300 megawatts of capacity consented or being built, the industry is well on its way to delivering that potential.
Most of the actions in our anaerobic digestion strategy are now complete. The Government published a second progress report in August and it is now for industry to use the outputs to ensure that the barriers they identified are removed. I hope the noble Lord will be reassured that we can continue to reduce organic waste entering landfill by encouraging food waste prevention and supporting a growing anaerobic digestion industry without introducing further targets to those set out in the EU landfill directive. I also add that current evidence suggests that further statutory targets would have an impact on businesses and local authorities in compliance and monitoring, risking additional cost burdens on business. It is likely that these additional cost burdens faced by industry and local authorities would be passed on to the consumer, which means that consumers could risk facing higher costs if additional statutory landfill bans were introduced.
The noble Lord, Lord Grantchester, asked about reporting on a reduction of landfill. Landfill tax is the main form of reducing organic waste from landfill. Defra is encouraging food waste prevention and encouraging the use of anaerobic digestion; the Environment Agency monitors emissions under the industrial emissions directive. Under the permitting regulations, the Environment Agency also monitors the air quality.
We are mindful of the concerns expressed by the noble Lord, Lord Judd, around this sector, but I hope that I have been able to satisfy the noble Lord that the actions that we are taking and our encouragement of industries such as anaerobic digestive generators to make use of waste will help him to decide to withdraw his amendment.
Lord Judd
I thank those who have participated in this short debate. I particularly thank my noble friend on the Front Bench for his rather double-edged intervention. I do not doubt his good will, but I have anxieties about his complacency—and I hope that he forgives me for putting it so bluntly. I am afraid that goes for the Minister as well.
What we have not heard from either Front Bench is any kind of response to what is already in evidence: that those who are responsible for developing the industry in this sphere are already running into difficulty. It is all right coming here and telling us, “We have got a trend and it is going well”; the warning signals are there: they are not attracting the money they should be attracting for investment. The reason for this is uncertainty over key supplies. Surely we do not wait until the whole thing collapses. That is not a very sensible approach to political management. If the warning signs are there, this is the time to take action. I sometimes find it quite extraordinary. In quite a number of countries in Europe it is absolutely taken for granted that this is the way to approach it; for example, Flanders, the Netherlands, Germany, Austria and Sweden all have compulsory arrangements in this area.
We say that we want to ensure that this change takes place and that we are very glad that it has proved itself as something that can develop. We do not, however, want it to dry up. I ask the Minister to go away from this brief exchange—perhaps I might very gently suggest that my Front Bench does the same—and look at what is actually happening now; not the trends in the past, but what is happening now. It is because of that that action is necessary.
I shall, of course, at this stage withdraw the amendment, but I hope that it is not just a matter of the Minister coming and reporting to my noble friend, “Ah, I’m afraid it has all dried up; it is not happening”. It is a matter of looking at it, saying what the warning signs are and taking action. I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty (Lab)
My Lords, in moving Amendment 76A, I shall speak also to Amendment 76B which is grouped with it.
We now come to the central part of this Bill which takes up 60 pages of the main Bill; it comes to something like 60 clauses and a large chunk—two-thirds—of the schedules. It has received relatively little attention in the course of the Bill’s proceedings, and virtually none in another place. We gave it reasonable consideration in Committee and we reached a degree of consensus. There are some things I still have queries about, but I am grateful to the Minister for explaining aspects of that and also to her officials who explained some of the aspects even further.
It still remains, however, that this is part of the Bill which has received very little public and wider attention. Yet it is one of the most important parts of the Bill because it regulates the nuclear industry. The policy of the Government, and to a large extent the policy of all parties now, is that of a significant shift towards nuclear power within our energy mix. We know the history of nuclear power is controversial, not only in the past here, but also worldwide. It is therefore essential that we get the system of regulation in this area right and the balance right. The Government have, to a large extent, done that. It has been quite a long gestation period taking what will be the ONR out of the Health and Safety Executive, giving it certain additional powers and clarifying in one piece of statute what its role is. I commend that. While it makes for a rather lopsided Bill, it is an important achievement. My amendments, therefore, are not attempting to upset the main thrust of the provisions within these sections, but they are trying to clarify some aspects of it. I hope that the Minister can give me some satisfaction on that.
One of the main roles of the ONR, and one of the most important public roles, will be the approval of designs for new reactors and the construction process that goes with it. Yet in all those pages there is very little mention of that role. It is mentioned here in Clause 60 and it is mentioned specifically under nuclear safety. The reason that it is so important is that both those who argue strongly in favour of nuclear power and those who argue strongly against it are concerned about the nature of the design of the reactor. It has been an issue in relation to the Hinkley Point approval that this reactor may not be the most appropriate reactor for the future—it may not be the most cost-effective and it may not be the best in terms of the contribution to the environment. Whether those criticisms are true or not, the Government rightly had a very heavy assessment, verification and approval process before they gave the go-ahead to the Hinkley Point project. The ONR in its shadow form and the Environment Agency both had a role in looking at that design. They looked at the design itself, its engineering, its safety requirements, its operational requirements, its effect on the ecology and the environment and of course they looked at its economics. They gave approval following a pretty long process and managed to rationalise the number of planning and other approvals that were needed.
I declare an interest in that until the end of last year I was a member of the board of the Environment Agency and I took a particular interest in the nuclear dimension of its activities. Both on the ONR/HSE side and on the Environment Agency side that was a very effective process. It was, however, an ad hoc process. It was a process that the Government invented when we were talking about several different designs that were possible and several different sites a couple of years earlier. It is still true that there has been some criticism of the choice of design being what some people refer to as an old design for what is a 35-year project. I do not want to enter into an argument about the merits of those criticisms myself, but it is important that the Government and the regulatory system have a robust system of ensuring that the design has been through the most rigorous appraisal system.
There are of course other designs that will be coming along. We have other sites that are capable and have been already designated by the Government as potential nuclear sites. There are other designs out there which are already operational or nearly operational: the CANDU system, a boiling water system, a PRISM system and there are companies and consortia that are promoting those here and elsewhere in the world. It is therefore highly possible that a different consortium from the one that is operating at Hinkley Point will come up with a different design which will need to be subject to an equally rigorous process. In that process it is vital that part of the responsibility of the ONR is to be at the cutting edge of nuclear technology and all the sub-technologies that go to make up the design. It is also important that it is cost-efficient.
The other criticism of the Hinkley Point deal is that we are paying too much for it. I again make no point on that at this stage. It is clearly right, however, that it is done on the most cost-effective basis, both for public acceptability and for the importance to the economy of moving to a greater share of nuclear power through the 2020s. It is also important that maximum safety is built in and, more generally, the protection of the environment.
Reading these sections of the Bill, one would not immediately deduce that this is, in a sense, the central role of the ONR. The approval of new systems, the new reactor designs and the appropriateness in the timescale is an important part of our ability to meet our carbon targets and to ensure that there is no detrimental effect either to the economy or to the environment. It deserves at least underlining—which is all my amendment does—that the role of the ONR in this respect is crucial and comprehensive, and that it is not only to do with safety but all these other matters as well.
Amendment 76A makes it clear that it is not only the safety of persons that is relevant but the safety of, and impact on, the environment. For that reason it is also important that there is specific reference in the Bill to the role of the Environment Agency. That agency played an equal role in the Hinkley Point case. The Environment Agency clearly has powers under the environment Acts but what we discussing is a joint responsibility. The ONR is not taking over that responsibility from the Environment Agency, which presumably could have been an option when the ONR concept was delivered.
Amendment 78B underlines what I have been talking about and makes it clear that in approving a design, and the construction plans that go with it, there is an absolute obligation on the ONR to ensure that they are of the very highest quality. The amendment also covers issues of cost-effectiveness, safety and security. This is central to the task of the ONR, as I have argued. The safety dimension is central to the safety of the population and of the environment. It is also important in a political sense. The public’s acceptance of the shift to nuclear power is fragile. It is significant but fragile, as we saw in Germany and other countries following the events at Fukushima. Therefore, it is important that the regulator we put in control of this system is seen as having a comprehensive and robust responsibility to deliver on all those elements when approving a major new reactor design. On every occasion we need to go through a very detailed process. It is important that it is written in large letters that this is one of the ONR’s central functions.
The Minister may say that this amendment is superfluous but in terms of reassuring the public it is important. The Government’s policy on this issue may be sufficient but the issue of the certification and approval of design must be an important part of the Bill. I hope that my few words on these two amendments will take it some way in that direction. I beg to move.
Lord Jenkin of Roding
My Lords, the House is very much indebted to the noble Lord, Lord Whitty, for the amount of time and the expertise that he has brought to bear on this important part of the Bill, as he rightly said. It has been a very long time in gestation. It was recognised two, even three, years ago that the difficulties which the ONR—it was then the nuclear inspectorate—faced in recruiting people to do the very specific task that is required when approving nuclear designs meant that they had to be sui generis so far as the terms of the employment were concerned. They could not be subject to the normal standard Civil Service rules. That is the primary aim of this part of the Bill: namely, to take the ONR out of the standard Civil Service terms of contract for the people it employs. It takes anything up to 20 years before an inspector becomes fully qualified to carry out the extremely expert work that is necessary to approve the designs of nuclear power stations and they are difficult people to come by. One needs to be competitive in this regard. The Select Committee on Science and Technology heard evidence from the former chief inspector, Dr Mike Weightman, who was very clear about this and, indeed, was glad that the issue was at last coming forward in this Bill. He made it clear that he had had to wait rather a long time for this to be done. The Government are very much to be congratulated on including the issue in the Bill.
Amendment 76A, in the name of the noble Lord, Lord Whitty, and others, seeks to add the words “and the environment”. As a former board member of the Environment Agency, the noble Lord has had much more experience of this issue than I have. As he rightly said, the regulation of this area is done by both bodies—the inspectorate, now the Office for Nuclear Regulation, and the Environment Agency. Their roles may overlap but they are most emphatically not the same. Nuclear science and technology is essentially the area of expertise of the ONR whereas the Environment Agency has the broader role of looking at the impact of a nuclear plant on the surrounding environment and at atmospheric pollution and so on. These roles are not the same. I will be interested to hear what my noble friend has to say on this. However, if I may say so, to add “and the environment” would confuse the issue. This part of the Bill does not deal with the Environment Agency, which continues to do exactly what it did when the noble Lord was a member of its board. I would be interested to know the reaction of the Environment Agency to the amendment. I think it would say, “It is not for them, it is for us”, meaning the agency. As I say, I shall be interested to hear what my noble friend has to say but it raises a question.
As regards Amendment 78B, we need to pay greater attention to cost-effectiveness. I do not know how many noble Lords have read the very interesting article by my noble friend Lord Ridley published a few weeks ago in which he talked about the cost pressures of the nuclear inspectorate on the price of a nuclear power station. I do not have the article in front of me but I remember he said that the inspectorate is taking a very, very safe system and insisting that it will be a very, very, very safe system. The question is: what will that cost? I would be interested to know to what extent it is the inspectorate’s role to consider the cost of the additional requirements that it may impose on the design of a plant.
I am absolutely satisfied that the public will expect the inspectorate to have very high standards. Indeed, I spent some years as the honorary president of the Energy Industries Council, which represents some 650 companies in the supply chain for all the energy industries. One of the things I find myself saying over and over again is that if firms are going to sell to the nuclear industry they must get used to nuclear standards which, for the most part, are considerably higher than general engineering standards, and rightly so. However, is it the role of the ONR to look to the question of cost? It has to consider the design of the plant that is put before it. As the noble Lord rightly said, there will be several. It is already looking at the advanced boiling water reactor put forward by Horizon Nuclear Power, which is now owned by Hitachi. It is not yet looking at either CANDU or PRISM—the other two items the noble Lord mentioned—which are still being examined by the Nuclear Decommissioning Authority and the department. However, if a design is put forward for either of those two items, the inspectorate will have to look at those as well. Should it be concerned about the cost? The only cost with which it ought to be concerned is whether we are expecting too high a standard at too great a cost, and whether this is absolutely essential. I suspect there is a temptation to say that anything which makes an installation safe—even if it has to be very, very, very safe—should be done even if it costs a lot. I do not agree with that. There must be a role here for looking at the particular cost for the particular requirement that the inspectorate is asked to look at.
As I say, I shall be interested to hear what my noble friend says about that but I think there may be greater merit in this amendment than in Amendment 76A.
Lord Wigley (PC)
My Lords, I apologise that I was unable to play much of a role in Committee on this important Bill because of a clash with other work here. When one is in a party of one, or one and a quarter at best, it is difficult to spread oneself around. I have a considerable interest in the question of nuclear energy and I am not in the mainstream of my party’s opinion. My party has tended to be anti-nuclear on the basis of fearing consequences if accidents of the sort we have seen in Japan and elsewhere were to happen. I did a degree in physics at Manchester University which contained a large element of nuclear physics; I worked for a time building the Trawsfynydd nuclear power station; and the Wylfa nuclear power station is also within the old county of Gwynedd, my home area. Therefore, I was most grateful to the noble Lord, Lord Whitty, for introducing the amendment in a broad context, bringing in the environment, because the environmental consequence of nuclear decisions is central to the public perception.
We are expecting the go-ahead, in Anglesey, for the Wylfa B station, something that I am very much in support of, as is a majority of opinion within the county of Anglesey. There are, however, many people who have worries about safety. As the noble Lord, Lord Whitty, mentioned, those worries have to be taken on board and have to be central to the thinking of the structures we are dealing with here. I listened to the noble Lord, Lord Jenkin, a moment ago, saying that there is sometimes the danger of going for the extra step of safety at a disproportionate cost. Obviously, there is a risk that has to be taken at some point, but the communities are only happy to support the nuclear industry when they think that that risk is very small indeed, that all steps can be taken to minimise those risks and that structures are being put in place to do that.
In the context of this part of the Bill and this amendment, one aspect of the environmental impact that arises from nuclear energy is the environmental impact associated with decommissioning. The Minister may recall that I raised this question at Question Time not so long ago: it is a matter of some concern. The new generation of nuclear power stations have easier and faster decommissioning built into them—one is very much aware of that. It is not the same decommissioning process as was necessary for the previous generations. One thinks of the Trawsfynydd nuclear power station which stopped generating electricity 20 years ago and is still being decommissioned, with 700 people still working on site on the decommissioning and another three years at least of work for those 700. That is an enormous cost. One accepts that, with luck, the costs of decommissioning will be less when the technological needs of decommissioning have been more appropriately designed into the original design of the nuclear power station, but there are always uncertainties.
The question that I put to the Minister on the back of the amendment, which deals with the environment—and it is an environmental consequence—is what if those who are involved in the construction and running of nuclear power stations and who are charged with the internalising of the costs of decommissioning into the overall cost package were to go bankrupt? What if that company goes to the wall? What happens to the steps needed to ensure safe decommissioning with regard to the impact on the environment if it is not properly handled?
I understand that at the point of negotiating contracts with companies such as Hitachi and the others, the Government clearly want to make sure that the companies that may make profit out of this pay the costs that are consequential on the work they are undertaking. Of course, it is right that this should be so, but there still needs to be some guarantee, at the end of the road, that the communities that are hosting this new generation of nuclear power stations cannot, under any circumstances, be left with a nuclear hulk the cost of decommissioning of which nobody is willing to take on. I believe that assurances along these lines are needed in order to make it easier for those, such as myself, who are in favour of nuclear power, to be able to argue the case. It is a worry and I have not heard how it will be addressed in those unfortunate, unlikely but still possible circumstances that could arise at some date in the future.
Lord Judd
My Lords, after the slight wobble with my Front Bench a moment ago, I am very glad to find myself 300% on board with them. I think that the amendments are absolutely right; I hope that they press them hard and that the Minister will find the opportunity to respond positively.
I always get a bit worried about what is happening with climate change in the sense that I am never quite sure that the principles with which I grew up still apply, but if the prevailing wind in Britain is still south-westerly, I live 12 miles north-east of Sellafield so I obviously take these arguments very seriously indeed. I am in favour of the next generation of nuclear energy: there is no argument about that, and obviously we in Cumbria will play our part in one way or another. That is given, but this is highly dangerous, lethal engineering of which we are speaking and it seems to me that we cannot have anything but the highest standards. I was very glad to find myself sympathising with a great deal of what the noble Lord, Lord Jenkin, was saying, but I could not quite buy his total argument that very, very, very safe was perhaps too much. I think that the developments have to be as safe as they can be.
As we go into this new generation of construction we have heard quite explicitly from the Government—it has been repeated tonight—that we have not got the necessary expertise. This is a very hazardous development. I think that we need some very specific, concrete plans from the Government for bringing the preparation of our own engineering capacity up to date and I urge my own colleagues in opposition to take this seriously too. I do not like the prospect of our being dependent upon foreign expertise in the area of safety: I do not think that it is in any way an ideal situation.
The noble Lord, Lord Wigley, made the point about, “What if?”. I do not think that one can ask too many such questions when we are going into this very important new development. The basic issue is that we have an engineering deficit in terms of our own capabilities and we are putting ourselves into the hands of foreign engineers. Everyone will know that I am an internationalist second to none, but it seems to me that we need to be very clear about how we are going to generate the expertise in this country and very fast indeed.
The Earl of Caithness
My Lords, I am slightly wary of the amendment including the environment in the duties of the ONR. The only reason for that is that I think that it confuses the issue. My noble friend Lord Jenkin was absolutely right: the environment should be with the Environment Agency and design should be with the ONR. If we give the ONR the environment as well, I think that there will be more confusion than light and that would be an unhappy situation.
The noble Lord, Lord Judd, talked about the importance of having our own people on the safety and security standards. Have we not blown it, from being world leaders to having to rely on overseas firms? Not that I am against that, but to have lost the world lead that we had is one of the great tragedies of the past 50 years. I am particularly sad that the fast breeder reactor at Dounreay, just down the road from my home, is not flourishing but is being decommissioned.
One of the reasons why we lost our world lead is that we did not take public opinion with us. This is a crucial issue and Amendment 78A in the name of the noble Lord, Lord Whitty, is perhaps more relevant in that regard. When the ONR and the Environment Agency look at these plans they have to be able to say that this has the seal of approval under the highest standards and quality that are right for Britain. If that does not happen, we will lose the support of public opinion again. It will be back to not just square one but minus five on the scale. That would be a sadness.
The noble Lord, Lord Whitty, reminded us that there are different designs. That is a concern and I wish that we would stick to one design in the competition. If you can replicate that design, you are going to lower costs. My noble friend Lord Jenkin referred to my noble friend Lord Ridley’s article of not so long ago in the Times. One of his arguments was that we should have a number of smaller nuclear plants, all identical. You could then set the safety standards right at the beginning, replicate the plants and have in-house expertise. Although I am a great proponent of and believer in competition, there is an argument here for saying that, having reached this stage, we ought to stick with one design and replicate it because that will help lower costs and help us get the relevant expertise into this area. If you have to have one set of expertise for what you are building at Hinckley, another for Anglesey and another for elsewhere, that might stretch us too far. I would therefore welcome anything that my noble friend can say on that.
Lord Mackay of Clashfern (Con)
My Lords, as I read subsection (1) of Amendment 78B, it seems to distinguish between design and construction; and in subsection (2), cost-effectiveness seems to be required only in relation to construction and does not seem to apply directly to the design. That may be deliberate—I am not sure—but that needs some explanation.
The Duke of Montrose (Con)
My Lords, I should like to express my opinion and interest in Amendment 76A. It is clear from what it says that the ONR will have responsibility for protecting “persons” against risk of harm from ionising radiation. In fact, pretty well all the risks that one can think of are those that affect persons. Perhaps in slight contrast to my noble friend Lord Caithness, my worry would be that the Environment Agency will have a big role in the approval, design and putting in place of a nuclear power station but it is more likely that the Office for Nuclear Regulation will be the body that is watching what happens day by day as the plant is running. While one can state that someone has responsibility for the environment—which is a nice, all-embracing term that we might think would take care of everything—we need to consider what the threat to the environment might be. We do not expect nuclear power stations to blow up but a whole lot of my sheep were prevented from going to market because of the nuclear explosion at Chernobyl, and various neighbours of mine were required to put all their sheep through a nuclear scanner. One man actually tried to put his dog through it in order to show the possible dangers from radiation. However, there is the possibility of food supplies being affected. At Fukushima, the issue was marine pollution. I want to be sure that the Office for Nuclear Regulation will be aware of the ongoing operation of plants in order to protect those elements.
Baroness Verma
My Lords, I thank the noble Lords, Lord Whitty and Lord Grantchester, and the noble Baroness, Lady Worthington, for their amendments. I also thank all noble Lords who have taken part in this important debate on the nuclear regulation clauses in the Bill. My noble friends Lord Jenkin and Lord Caithness, who have a great deal of experience and knowledge in these matters, are right to point out that there could be some confusion if we were to take these amendments as they are laid out.
Amendment 76A seeks to expand the ONR’s nuclear safety purposes to include responsibility for the environment. As my noble friend Lord Jenkin pointed out, a regulatory framework is already in place to protect the environment and the relevant agencies—the Environment Agency, the Scottish Environment Protection Agency and Natural Resources Wales—are well placed to carry out this role. The interim ONR has a strong working relationship with these regulators, which will continue once the ONR becomes a statutory body.
I understand noble Lords’ interest in the regulation of the environment but it would not be appropriate to expand the ONR’s purposes to overlap with those of established regulators. This would create conflict between two different regulators in the same field and place additional regulatory burdens upon members of the regulated community. As I said earlier, it would create confusion.
Amendment 78B seeks to include a new clause in the Bill concerning the design and construction of nuclear installations. It places a responsibility on the ONR, in conjunction with the Environment Agency, to regulate the design and construction of installations. The amendment also requires that the ONR alone is responsible for ensuring not only the highest technological and safety standards but that the most cost-effective measures are taken.
First, I reassure noble Lords that the regulation of the design and construction of nuclear installations is firmly within the ONR’s purposes and that the organisation, through well established legislation such as the Nuclear Installations Act 1965 and the Health and Safety at Work etc. Act 1974 will continue to do this. Secondly, the ONR has a strong working relationship with the Environment Agency in its generic design programme, and this will continue to be in place. To place such a duty in the Bill is therefore unnecessary. It would also be inappropriate to place the ONR under a duty to require the industry to use the most advanced technology available. The role of the ONR is to ensure that the design and construction of nuclear installations meet safety standards. This may involve the use of new or advanced technology. However, the focus is rightly on achieving the highest possible safety standards.
I reassure noble Lords that in undertaking its function with respect to the design and construction of nuclear installations, the ONR will work to ensure that these plants are designed and built not only to be safe but to make use of appropriately advanced and proven technology. It would be grossly inappropriate to place a duty on the safety regulator to regulate the cost efficiency of the construction of these installations. Such a requirement risks diverting the ONR’s attention away from its crucial safety role and placing potentially conflicting requirements on its regulators.
I agree with the sentiment that nuclear installations must be designed, built and operated to deliver value for money. However, I do not believe that this should or can be achieved by placing the safety regulator in the position where it must ensure that this is the case. It is for companies such as EDF to build and operate new nuclear power stations and make decisions about which reactors they use. It is important that any reactor used is safe and effective in its design, and the UK has a strong regulatory regime in place to ensure that that is the case. I understand that we need to have value for consumers, but it is not the role of the ONR to involve itself in the cost of design. The central role for the ONR is to ensure that we have the highest standards of safety in place.
My noble friend Lord Jenkin asked whether the ONR was expecting too much in terms of safety. The ONR expects nuclear installations to reduce risk as far as is reasonably practical. That is an established tenet of health and safety law and the nuclear industry is comfortable working within this regulatory framework.
The noble Lord, Lord Wigley, asked what would happen to the decommissioning costs if an operator became bankrupt. Under the funded decommissioning programme, operators of new nuclear power stations will be required to meet agreements from the Secretary of State to ensure that costs of waste management and decommissioning are met from day one for operators. These arrangements will need to be independent of the operator and will therefore take account of the operator going bankrupt.
Lord Wigley
I am very grateful to the Minister. I have no doubt that there will be a funding process that ensures that there is a pool of money to meet what is foreseen as the decommissioning costs. However, what happens if the standards, as they develop over a lifetime or 20 or 30 years, change in a way that leads to additional costs, or if the economic circumstances of the company disintegrate, for whatever reason, and it is not able to top up that pool as it goes along? What, then, is the safeguard that she and the Government can give to communities that there will be somebody who will step in and not leave them with a nuclear hulk, with all the implications that that could have? Those assurances are needed by the communities that are going to be welcoming these nuclear installations.
Baroness Verma
My Lords, I take the noble Lord’s concerns very seriously. It may be helpful if he would allow me to write to him in further detail about the decommissioning plans that we have in place. I will try to reassure him that the independents with these funds in place are away from the operators, and we are keen to make sure that the funds are met. However, since I have not reassured him enough, I think it may be helpful to write to him.
My noble friend the Duke of Montrose asked if the ONR will regulate ongoing operations of power stations. The ONR will continue to regulate and monitor installations as they are operating and beyond. It will continue to work closely with the Environment Agency and, of course, the other, separate agencies of the devolved powers to ensure that the effects of nuclear power generation on the environment are monitored and action taken where necessary.
My noble friend Lord Caithness said that we should have a single design for reactors. The Government’s position has always been clear in that we encourage diversity in reactor design but of course, as with all things, they have to meet the highest standards that we expect of them.
Lord Judd
Frankly, I am a little confused, and I wonder whether the Minister could put me right. She said earlier in her response that of course these things were up to the company to perform as required. Of course, this is all happening as a result of a tough political decision by the Government. We cannot walk away, as a nation or a Government, from our ultimate responsibility. What some of us are concerned about is having systems in place that ensure that companies are indeed performing as expected. In this context, we come back to what we were discussing earlier, that we cannot be certain that everything is being done as it should be because we ourselves say that we have not got that expertise. Can the Minister address these issues? There really is a credibility gap.
Baroness Verma
My Lords, I recognise that the noble Lord, Lord Judd, talks about the resources and the capabilities that we require going forward. We are mindful of that, and so is the ONR. There are a range of measures that the ONR is already engaged in to replace a depleted number of experts. I reassure the noble Lord that in saying that it is for companies to build and operate does not detract from the ONR’s main business, which is to ensure that reactors meet the highest standards of safety. We are measuring two things together, including the fact we have got the resources and capabilities in place, which the ONR is very aware of, as are the Government.
This is a historical vacuum that we are filling—the ONR is well aware of it—but there are a great deal of measures that the ONR is taking to ensure that we have those ongoing capabilities coming forward. We know, and take seriously, what the noble Lord is asking.
Lord Judd
I really am grateful to the Minister because she is trying very hard to reassure me and I always find myself being seduced when she is at the Dispatch Box with her arguments. However, I hope that she will agree with me that it is an aspiration on our part; as a nation, we have not got the means to be certain that what we are aspiring to, and exhorting people to do, is in fact being done. That is why it is so incredibly urgent to close this engineering expertise gap and to make sure that the credibility is foolproof.
Baroness Verma
I shall try to seduce the noble Lord better next time, but in the mean time I hope that the noble Lord, Lord Whitty, withdraws his amendment.
Lord Whitty
My Lords, I thank the Minister and everybody who has taken part in this debate, and I will answer some of their points. The noble Lord, Lord Jenkin, is clearly right that the trigger for setting up the ONR under a new statutory basis was to take it out of the Civil Service, and a large part of the reason behind that was the need to ensure that we have adequate expertise in this field. It is a field that has been allowed to run down; we are probably not without expertise at this point, but they are ageing. Some of them are tempted elsewhere and it is a global market, and therefore it was important for us to ensure that this happened.
Although that may have been the trigger, we have a wider prospect here of a largely comprehensive regulator having its duties set out in a fair amount of detail in this Bill. It would be wrong to say that it is entirely a reflection of the fact that we potentially face a scarcity of resources. Having said that, it is of course important, as the noble Lord, Lord Jenkin, and my noble friend Lord Judd have said, that we address that issue in terms of training provision, investment and our ability to compete for global talent. However, there are wider issues involved here as well.
Objection was made to the reference in the first of these amendments to putting “and environment” in the responsibilities of the ONR. I have no desire—and my previous colleagues at the Environment Agency would no doubt shoot me if I had—to change the boundaries of responsibility between the EA and the ONR. It is important that they are both operating in this area and operating to their own expertise. However, it is also true, if you look at nuclear processes, and some other processes as well, that the hazard involved, the potential risk and the need for minimising that risk is not only to the personnel in the immediate area and those who may be visiting in the immediate population, but also to the environment. If my noble friend Lord Judd lives 12 miles from Sellafield, he will know what I am talking about. If anything were to happen at Sellafield, not only would he and the population in his village be at risk but the totality of the environment of West Cumbria would be at risk as well. It is therefore important that, in approving a particular process or way of dealing with that process, the ONR at least takes cognisance of the fact that there is an environmental dimension. The expertise and regulatory authority may rest with the Environment Agency but the ONR will also have to take that into account. I do not find that confusing; it rounds off what the responsibilities are but does not change the regulatory boundaries.
Baroness Verma
Baroness Verma
My Lords, the amendments in this group respond to a number of issues, the majority of which were raised in Committee or by the Delegated Powers and Regulatory Reform Committee. They are intended to add further clarity to the Bill.
Amendments 77 and 78 have been tabled in response to the suggestion of the noble Lord, Lord Whitty, that we define “associated sites” within this part of the Bill. I thank him for his contributions to the debate and hope that he finds that the proposed definition adds clarity to Part 3.
Amendments 79 to 82 are made in response to the DPRRC’s recommendations that a parliamentary procedure be applied to the production of approved codes of practice. A procedure akin to the negative procedure will now apply to any issuance or amendment of an ONR code, and the Secretary of State’s approval must be granted for the withdrawal of such a code.
Amendment 83 has been tabled to ensure that the provisions on disclosure of “protected information” in Schedule 9 apply to information shared by HMRC under Clause 89 and an inspector appointed by the ONR under the Health and Safety at Work etc. Act 1974.
Amendment 84 aligns the definition of “relevant provision” in Schedule 10 with the definition in Clause 73.
Amendments 85 to 87 apply the affirmative resolution procedure to the first set of nuclear regulations that the ONR makes under the Bill, any nuclear regulations which amend the Nuclear Installations Act 1965 or the Nuclear Safeguards Act 2000, and any such regulations that create new offences. This is in response to the recommendations made by the DPRRC, for which the Government are very grateful.
Amendments 88 to 90 will allow the Secretary of State to make transitional provision for the ONR to continue to apply certain regulations under the current regulatory regime until specific regulations are made for the ONR. This includes provision for the conduct of inquiries and the current health and safety fees regime for the nuclear industry. These small amendments will allow us to make a smooth transition to the statutory ONR and will also ensure that the ONR is not significantly reliant on grant in aid for the first few years of its existence.
Amendment 91 clarifies that compensation can be paid by the Secretary of State only in respect of property transfers and not in respect of staff transfer schemes.
Finally, Amendment 92 has been added to allow for regulations to be made jointly under the Energy Bill and the Health and Safety at Work etc. Act 1974 where the Energy Bill requires an affirmative resolution procedure to be followed. Where this is the case, we have chosen that the route followed by such regulations should be subject to the subordinate legislation provisions in Clause 104.
I hope that noble Lords are satisfied with my explanation of these amendments and can agree to their inclusion in Part 3 of the Bill. I beg to move.
Lord Whitty
My Lords, I very much welcome these amendments. Obviously, I particularly welcome the ones that relate to my suggestions for the definition of sites. I think that they make a significant improvement and add clarity.
I am sure that were the noble Lord, Lord Roper, here, he would very much appreciate the move in the direction of the Delegated Powers Committee that the Government have taken in introducing a number of these other amendments. It is always right that any Government should not only take note but follow the advice of the Delegated Powers Committee’s recommendations, otherwise they would find themselves in serious trouble. The Minister has managed to avoid that, at least in this part of the Bill.
The transitional provisions in Amendments 88 to 90 also seem sensible. I welcome the amendments and hope that the House will accept them.
Baroness Verma
Lord Whitty
“(3) At least one non-executive member must have experience of, or expertise in—
(a) matters relevant to nuclear safety management;(b) representation of employees in health and safety;(c) matters relevant to the ONR’s nuclear security purposes.”
Lord Whitty
Amendment 78A deals with the governance of the ONR. There is relatively little in all these pages about that governance; the amendment attempts to beef it up, in terms of who should be the independent members, or non-executive members or whatever you like to call them. It relates to two issues, which are separate and can be dealt with separately if the Government so wish, although they need to take both of them on board.
The first relates to the expertise of the members of the governing body, on nuclear safety and nuclear operations in particular. That point has been raised with us by the potential operating companies of nuclear installations. The second relates to expertise in the area of worker representation and attempts to carry over the provision that has always been there under the Health and Safety Executive and the shadow ONR.
The only reference to expertise in this section of Schedule 7 is to a non-executive member who has expertise in,
“matters relevant to the ONR’s nuclear security purposes”.
That is important; some would argue that it is very important. We know that it is different, and has different connotations, from somebody having expertise in the area of nuclear safety and operating systems for nuclear safety. We would be looking out for somebody who has industrial expertise in managing such systems and who was not a member of the ONR staff. That is, the post could not be filled by appointing the chief inspector, who would be, in any case, a member of the governing body. If I were to second-guess—although “second-guess” is probably the wrong expression—we would be looking for somebody who can bring expertise to bear from a different perspective from that of somebody directly employed by the ONR.
The Government must have received representations—if I can put this in a subtle way—from those who very soon might be operating such a system. They want to see that those overseeing the ONR have expertise in the operation of the safety system and the general management of such sites, or at least that one of them does so.
Secondly, we have seen that the ONR is, essentially, a spin-off from the Health and Safety Executive. Since 1974, the Health and Safety Executive has operated on a tripartite basis. That has been reflected in its superstructure and, in a slightly informal way, in the oversight structure of the shadow ONR that operates under the HSE’s purposes. It has helped the engagement and co-operation of the workforce and has ensured that the worker side of operating complex plants and sites is fully taken into account. It is my contention that that needs to be reflected explicitly in the new structure. If it is not, a valuable part of the whole HSE experience will be lost; and it is unnecessary to lose it in a structure in which the ONR is responsible not only for nuclear safety but for health and safety generally on nuclear sites. It is important that we retain that structure and oversight.
Lord Jenkin of Roding
My Lords, the noble Lord’s amendments go too far. We are talking about only five non-executive members who are going to be appointed by the Secretary of State. One must have regard to the main purpose of non-executive directors of a board, which is, broadly, to hold the executive to account. I have been a chairman of a board, although only part-time, in a totally different environment, and found the non-executive members of that board extremely useful. They assisted me in holding the executive members of the board to account—not because of their expertise in a particular area in which an executive director would be operating, but because they had wider experience and could look at the activity of the executive in a wider context.
That is obvious in the provision in the Bill for at least one non-executive member to have responsibility for the security aspects of the ONR’s job. I do not know whether this is the Government’s intention but it seems to me that what is wanted is not somebody who is expert in nuclear security, but who has wider experience of the whole of the national security position and can bring that background knowledge and perspective to the particular issues that arise in the nuclear field.
If that is right, it is entirely understandable that the Government should want to see that in the schedule. On the question of safety, however, I do not understand what, exactly, a non-executive member’s role would be. This is essentially a management matter. A non-executive director would want to be sure that the right procedures were being followed, particularly when it is a question of appointing someone who will have some executive responsibility in this. You want somebody with the experience of being able to do it, but to have a specific safety non-executive person would be very difficult. I am not sure where it leaves the professional management. Is it constantly being second-guessed? That is not what you want from a non-executive board. It should not second-guess the management but satisfy itself that the management is approaching the problem in the right way and has made sensible decisions.
To some extent, that is equally true of labour, staff relations and so forth. I would not expect a non-executive director who had come straight from a human resources job to say, “I’m going to tell the human resources director exactly how to do his job”. That is not the way in which non-executive members of the board should be expected to operate.
The amendments mistake the purpose of having non-executive directors. The Bill has the right approach because having someone with a wider experience of national security could be extremely useful, and nuclear security could be looked at in that context. However, I would not want to take it further and I would be very much opposed to the amendments proposed by the noble Lord.
Lord Judd
My Lords, with great respect, I do not follow the arguments of the noble Lord, Lord Jenkin. We are not talking about a chocolate factory or even a motorcar manufacturer: we are talking about highly sophisticated, advanced, cutting-edge science. It has the potential to adversely affect staff and the wider public acutely. It is not either/or; it is a matter of having people with wider experience. The noble Lord is right: that is the purpose of a non-executive director. However, there must be people on the board who know what they are talking about, if they talk about it, when we come to the specific issues of this special, advanced and potentially very dangerous new form of energy generation.
This is not, incidentally, just limited to the nuclear sphere. I remember very vividly many hours toiling home to the north-west finding myself isolated on Preston station in the small hours. Railtrack had built up a great record of property development and all the rest, but it was suddenly realised after Hatfield that it had neglected the very special knowledge about how to run the railways and what that is about. It is not just any industry: it is about having the knowledge and background to ask whether management is taking this or that into account. It is not an either/or.
In the case of the railways, with that awful Hatfield incident, we had reached a stage where virtually nobody knew where the danger spots were on the track across the country. If we take those experiences seriously, it is a matter of getting the right combination of knowledge and expertise. I realise that when you use the word “expertise” you are beginning to go down a questionable road, but there has to be enough real knowledge of the special tasks and hazards, together with the wider experience to which the noble Lord rightly referred.
Lord Stoddart of Swindon (Ind Lab)
My Lords, I support the amendment, especially subsection (3)(b) dealing with,
“representation of employees in health and safety”.
That is so important. I worked at a power station myself. It was not a nuclear power station, but it was a power station. I was also secretary of the local advisory committee. I therefore have some experience of how essential it is that working people are taken into account regarding management of a plant.
Those advisory committees, incidentally, both at national and local level, were set up under the electricity and gas Acts of, I think, 1949 and 1950. There was a statutory duty to provide opportunities for employees to be consulted, at least, not only on matters of health and safety but on the broader workings of power stations and other installations. Indeed, it is necessary for employees to have those powers because it is helpful to management to ensure that working at ground level is safe. Managers cannot know everything that goes on, but most of the employees do. I support the amendment simply and solely because the question of employee consultation should appear somewhere in the Bill.
Baroness Verma
My Lords, I thank the noble Lord, Lord Whitty, for this amendment to Part 3 of the Bill, and my noble friend Lord Jenkin for his sensible and measured intervention. Noble Lords will recall that we debated the matter of the make-up of the ONR board in Committee. Amendment 78A would introduce a requirement for the ONR board to have at least one member with experience of, or expertise in, nuclear safety management and one member with experience of, or expertise in, employee health and safety representation.
As currently drafted, the legislation allows the Secretary of State to appoint non-executives with skills and experience that best meet the needs of the ONR. This may include experience or expertise in nuclear safety, which I think is what the phrase “nuclear safety management” means, although this is already provided by the chief nuclear inspector, who is an executive member of the board. This experience or expertise may include that of employee health and safety representation. However, that should be a matter for the Secretary of State to determine over time and, while the matters identified in the amendment are no doubt of great importance, it should be left to the Secretary of State to determine whether that experience would benefit the ONR.
The ONR also requires flexibility to change its skills-mix over time as it develops as an organisation and as the industry it regulates changes. The amendment significantly restricts the flexibility available to the Secretary of State in setting those appointments to only two non-executives. It would be unwise to restrict the ONR’s flexibility in this way. However, the legislation does make provision for a non-executive with security expertise. This role is required to ensure that the ONR’s security interests are carried out in the context of wider national security policies. It is required to prevent nuclear security matters being developed in isolation from the wider, national security agenda. The current security non-executive, for instance, does not have specific nuclear security experience.
Turning to employee representation on the board, as I have explained, the intention is to have a skills-based board, not one made up of representatives. Therefore, just as it would be inappropriate for the board to include a representative of the nuclear industry, it is also inappropriate to mandate a representative of workers.
It is important to remind noble Lords that the Health and Safety Executive, which will retain overall policy responsibility for wider health and safety in Great Britain, including health and safety on nuclear sites, will have a trades union representative on its board. Thus the interests of employees will continue to be represented in the ONR’s wider work on health and safety on nuclear sites. In addition to this, Schedule 7 makes provision for the Health and Safety Executive to appoint one of its members to the ONR board, should it wish to do so, and for the arrangement to be reciprocal. This will also provide for employee interests to be represented on the ONR board. I hope that noble Lords find my explanation reassuring and I hope the noble Lord will withdraw his amendment.
Lord Whitty
My Lords, on this occasion I cannot say that I am happy with the Minister’s response. The nature of the board, together with the expertise of the personnel of the ONR, will determine the degree of confidence there is in the ONR. On the issue not of worker representation in the sense of somebody who represents the workers of the nuclear industry on the board but of someone who has knowledge of working concerns, which in HSE terms has normally been a trade union representative, the fact is that the Government are taking out of the HSE an important, high-profile and, in industrial relations and personnel terms, quite a delicate part of its responsibilities. They are abandoning what was the great strength of the HSE, that at the highest level it had tripartite representation which had the confidence of all sides of industry and the Government. Most of the other provisions of these clauses of the Bill reflect procedures and responsibilities which have been directly or indirectly under the aegis of the HSE. It is odd that the one thing removed is the HSE’s governance, which has proved its worth for over 40 years. That is a serious mistake.
Expertise in nuclear safety management affects the confidence that the management of the industry has in the ONR. One hopes management will have confidence in the inspectorate and the chief inspector, but it has been put to me and I expect it has been put to the Government that the operators of nuclear installations want to think that there is somebody who knows their side of the story in the governance structure. They are worried that that is not prescribed in the Bill. The Minister says the Secretary of State will make a judgment and it is quite possible that he will appoint people with these qualifications or background, but the Government do not want to stipulate that in the Bill. However, sometimes it is the Bill which gives the confidence and the particular appointments are what give confidence. At the moment we are potentially reducing the confidence that workers in the nuclear industry might have in the governance and therefore the direction of the ONR—unnecessarily threatening it, because the rest of the provisions, I think, look after their interests well. We are also threatening the confidence of management of nuclear sites in the overall governance of the ONR.
These may not be big issues in practice but in certain circumstances they could become big issues. It is therefore important that the Government take on board the argument so that, if we cannot stipulate it in the Bill, the Secretary of State will have regard to these two dimensions to make sure that the ONR operates not only in the best traditions of the HSE but in a way that inspires confidence in the industry and the workforce. I fear that, by not accepting this amendment, the Minister may be jeopardising both. It would not be a big thing for either proposal to be included, maybe not in the terms that I have them here but in terms of how the Secretary of State should look at appointments to the governing body.
I am disappointed. I thank my noble friend Lord Stoddart—who I think I can call my noble friend on this occasion—and my noble friend Lord Judd for their support for my position. I regret that the Minister has not been positive. I am slightly surprised that the noble Lord, Lord Jenkin, was not more supportive at least on the first of the propositions, but I understand his position. However I do not fully understand the Government’s position and I hope that they will think again. For the moment, I beg leave to withdraw the amendment.
Baroness Verma
(a) ”
“(b) ”
Baroness Verma
“Procedure for issue, revision or withdrawal of codes of practice
(1) The ONR may—
(a) issue or revise a code of practice under section 71 only in accordance with subsection (8);(b) withdraw a code of practice under that section only in accordance with subsection (11).(2) Before issuing, or revising or withdrawing, a code of practice, the ONR must submit a proposal to the Secretary of State.
(3) Before submitting a proposal to the Secretary of State the ONR must consult—
(a) any government department or other person that the Secretary of State has directed the ONR to consult, and(b) any other government department or other person that the ONR considers it appropriate to consult,about the proposal.(4) A direction under subsection (3)(a) may be general or may relate to a particular code, or codes of a particular kind.
(5) A proposal for issuing or revising a code of practice must include a draft code of practice or, as the case may be, proposed revisions of a code of practice.
(6) Where the ONR submits a proposal for issuing or revising a code of practice to the Secretary of State, the Secretary of State may approve the draft code of practice, or proposed revisions, as the case may be—
(a) without modification, or(b) with the consent of the ONR, with modifications.(7) If the Secretary of State approves the draft code or proposed revisions, the Secretary of State must lay before Parliament the draft code or proposed revisions in the form approved.
(8) Where—
(a) the Secretary of State has laid a draft code or proposed revisions of a code before Parliament, and(b) no negative resolution is made within the 40-day period,the ONR may issue the code in the form of the draft laid before Parliament or, as the case may be, make the proposed revisions in the form so laid.(9) For the purpose of subsection (8)—
(a) a “negative resolution”, in relation to a draft code or proposed revisions, means a resolution of either House of Parliament not to approve the draft code or proposed revisions;(b) the “40-day period”, in relation to a draft of a code or proposed revisions, means the period of 40 days beginning with the day on which the draft is laid before Parliament (or, if it is not laid before each House of Parliament on the same day, the later of the 2 days on which it is laid).(10) For the purposes of calculating the 40-day period, no account is to be taken of any period during which—
(a) Parliament is dissolved or prorogued, or(b) both Houses are adjourned for more than 4 days.(11) Where—
(a) the ONR submits to the Secretary of State a proposal for the withdrawal of a code of practice, and(b) the Secretary of State approves the proposal,it may withdraw the code.(12) The ONR must—
(a) publish any code of practice issued under section 71; (b) when it revises such a code, publish—(i) a notice to that effect, and(ii) a copy of the revised code;(c) when it withdraws such a code, publish a notice to that effect.”
Baroness Verma
Baroness Verma
Baroness Verma
“(2A) Nuclear regulations fall within this subsection if—
(a) they are the first nuclear regulations to be made,(b) they include provision amending or repealing any provision of—(i) the Nuclear Installations Act 1965, or(ii) the Nuclear Safeguards Act 2000, or(c) they include provision creating a new offence by virtue of section 67;and for this purpose nuclear regulations which revoke and re-enact an offence are not to be regarded as creating a new offence.”
Baroness Verma
(i) ”
“(ii) regulations under section 76, or(iii) regulations under section 92.”
(ba) section 15 of that”
Baroness Verma
Baroness Verma
“(1) Section 82 (general provisions as to interpretation and regulations) is amended as follows.
(2) In subsection (3)(b), after “subsection” insert “(3A) or”.
(3) After subsection (3) insert—
“(3A) In the case of a statutory instrument which also contains regulations under section 66 of the Energy Act 2013 (nuclear regulations), subsection (3) is subject to section 104 of that Act (subordinate legislation).””
EU: Eurojust (EUC Report)
(11 years ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Corston
That this House agrees to the recommendation of the European Union Committee that Her Majesty’s Government should exercise their right, in accordance with the Protocol on the position of the United Kingdom and Ireland in respect of the Area of Freedom, Security and Justice, to take part in the adoption and application of the Proposal for a Regulation on the European Union Agency for Criminal Justice Cooperation (Eurojust) (document 12566/13) (4th Report, HL Paper 66).
Baroness Corston (Lab)
My Lords, I move the Motion in my capacity as chair of the European Union Committee’s Sub-Committee E on Justice, Institutions and Consumer Protection, which prepared the report now before the House for endorsement. The Motion invites the House to agree with the committee’s recommendation that the Government should opt in to the negotiation of the proposed regulation reforming the European Union Agency for Criminal Justice Co-operation—the agency which is more commonly known as Eurojust. The proposal falls within the area of justice and home affairs which will apply to the United Kingdom only if the Government exercise their right under EU treaties to participate in its negotiation, adoption and implementation or, in other words, to opt in to this. The Government have to do this within three months of the proposal being presented to the Council, which in this case means before 21 November.
On the same day in July as the Commission brought forward the Eurojust regulation, it also published an accompanying proposal creating the European Public Prosecutor’s Office, the EPPO. The Government have already made clear in the coalition agreement their intention not to participate in the proposed EPPO and on Monday last week this House approved a reasoned opinion challenging the EPPO on subsidiarity grounds. The reasoned opinion was also prepared by the EU sub-committee that I chair.
Unfortunately, as the proposed Eurojust regulation was published just before the House rose for the Summer Recess, it was not possible to publish this report and schedule a debate in the House within the usual eight-week window that would have been afforded to the committee. However, there is fortunately sufficient time for a report from the EU sub-committee considering the opt-in and for this debate to be held in the House today before the Government’s deadline to decide expires.
The Government have already given a clue as to their intentions regarding the opt-in, in a letter dated 21 October from the Security Minister, James Brokenshire MP, a copy of which appears in the appendix to the report. In it, he says that:
“Pending the views of Parliament”,
the Government will not be opting in to the negotiations for the proposed regulation. For reasons that I will turn to in a moment, the Government have concluded that the regulation,
“would have significant implications for the UK’s systems of law”.
The letter also makes clear the Government’s intention to revisit their decision once an agreed text emerges from the negotiations.
I fear that this decision by the Government not to opt in to these negotiations from the outset could be construed by our fellow member states in the EU as representing a lack of commitment by the UK to a very important crime-fighting agency. The UK is one of the agency’s main users and, after the terrorist attacks in the US in September 2001, has played a key role in the agency. For example, for seven years of its 11-year history, the elected president of Eurojust has been the UK member. I note that the Minister says that the Government’s decision not to opt in has been taken pending Parliament’s view, but it seems that their intention is clear: the UK will not be opting in. In this context, it is difficult to foresee the position of president of Eurojust being bestowed on the current UK member. Although the committee acknowledges the validity of the Government’s concerns for the UK’s criminal justice system, the Government must also accept that the simple example of the Eurojust presidency illustrates that there is a price to be paid, perhaps in relation to our influence, when the UK chooses not to opt in to EU legislation.
Essentially, the regulation retains Eurojust’s core functions but includes new provisions reforming the agency’s governance and management structure. Notably, this includes Eurojust’s interaction with the proposed EPPO, the UK’s participation with which has been ruled out by the coalition agreement. The proposed regulation also includes provisions augmenting the existing powers of Eurojust’s members and new arrangements governing Eurojust’s accountability to the European Parliament and to national parliaments.
The Government have some concerns. In their Explanatory Memorandum, the Government praised the current legislation governing Eurojust and, in the context of the Government’s 2014 block opt-out decision—into which my committee has undertaken two recent inquiries, along with Sub-Committee F, chaired by the noble Lord, Lord Hannay of Chiswick—communicated their intention to opt back in to the current legislation. On the other hand, the Government also raised a number of concerns with the proposed regulation on Eurojust, including its potential ramifications for fundamental rights. However, in light of the Minister’s letter of 21 October, it now appears that there are two key concerns which have convinced the Government that it is not in the UK’s interests to opt in to this proposal. Both concerns are discussed in our report.
The first of those concerns relates to the aspects of the proposal which change Eurojust’s governance and management structure, including in respect of Eurojust’s interaction with the proposed EPPO. Once the Commission followed the treaty requirement that the EPPO be created out of Eurojust, it was inevitable, given the Government’s clear policy of non-participation, that this issue was always going to be difficult for the Government. However, the report argues that the issue is not enough to rule out the Government’s participation in the negotiations about the Eurojust regulation. Indeed, the committee believes it strengthens the arguments in favour of opting in.
The second of the Government’s key concerns relates to the requirement in the proposed regulation that the powers conferred on members of Eurojust by their member states are mandatory rather than discretionary, as is the case under the current legislation. The Minister says in his letter that mandatory powers of the type envisaged by the proposal,
“would cut across the separation of powers between police and prosecutors in England, Wales and Northern Ireland”.
The Minister also warns of the potential ramifications of mandatory powers for the role of the Lord Advocate in Scotland. I note the Government’s concern in this regard and take the opportunity to ask the Minister about the extent of the Government’s consultation with the devolved Administrations before deciding whether or not to opt in to this proposal, particularly in light of the clear evidence given to my committee by the Lord Advocate during the recent Protocol 36 inquiry of the benefits of Eurojust to the Scottish Government and his concern that the UK should not leave the agency. That may well be a message for both Front Benches.
The report itself suggests that the Government opt in to the Eurojust regulation, drawing on much of the evidence given to the two recent inquires on Protocol 36 and Sub-Committee E’s own recent inquiry focusing on fraud in the EU’s budget. The overwhelming weight of the evidence taken during these inquiries, which is reproduced in the report, highlights the importance of Eurojust’s work to member states. The report argues that the Government’s participation in these negotiations is all the more important given, first, the provisions in this proposal introducing significant interweaving of Eurojust with the proposed EPPO and, secondly, the Government’s clear stance of non-participation with the EPPO. It is my committee’s view that the UK Government will not be alone in their opposition to the EPPO—indeed the treaty anticipates this eventuality by including specific enhanced co-operation provisions for agreement. Furthermore, last week saw sufficient reasoned opinions issued by national parliaments, including one from this House and one from the other place, to force the Commission to review the proposed EPPO.
Our report therefore suggests that the UK ought to be a full participant at the table for the important discussions addressing the position of those states that wish to work together in Eurojust but do not want to participate in the proposed EPPO. These negotiations will shape Eurojust’s future and, although the committee acknowledges the validity of the Government’s concerns, the committee would not want to see the Government pursue a course of action which would diminish our influence on these important negotiations.
Finally, although the Government have decided, under the Protocol 36 decision, to opt back into the current legislation governing Eurojust, my committee cannot foresee a situation whereby the UK would be allowed to remain a full participating member of Eurojust under legislation superseded by this proposal. In this context, we fear that there is a clear danger that in deciding to opt out of these negotiations the Government could be taking the first step on the road to the UK’s non-participation in Eurojust, which we would all come to regret. My committee would strongly caution against such a course of action.
Lord Hodgson of Astley Abbotts (Con)
My Lords, I am a member of Sub-Committee E and support the proposal ably moved by our chairman, the noble Baroness, Lady Corston. We return tonight to the issue of European co-operation in judicial and criminal investigative matters. The topic is of course a veritable Rubik’s cube of interwoven advantages and disadvantages, and trying to establish the pattern that will best suit this country is very difficult, especially for a non-lawyer such as myself.
As the noble Baroness has pointed out, the pattern of the Rubik’s cube has changed in the past week with the decision of this House and the other place to issue a reasoned opinion on the grounds of subsidiarity against participation in the European Public Prosecutor’s Office. I spoke in the debate in favour of that decision on theoretical, legal and operational grounds. We heard in that debate from the noble Lord, Lord Rowlands, who introduced the subject, of growing concern among other states about the proposal. As I understand it, from what the noble Baroness has said and from what the noble Lord, Lord Rowlands, told us in our committee meeting earlier this week, since then concerns have been found to be even more widespread and substantial than was originally thought—indeed, so substantial that it appears that the EPPO proposal in its present form is now effectively dead in the water. The Minister might like to confirm whether this is the case and the Government so assess it when he comes to wind up.
If so, this removes one of the Government’s major objections to the Eurojust proposal—that it implicitly provides a stalking horse for the development of the EPPO, the interweaving of the organisation which we describe in paragraph 40 of our report. We say:
“As we have noted, the proposed Eurojust Regulation includes significant provisions which interweave the two institutions both corporately and operationally. Viewed in the context of the Government's policy of non-participation, this might point towards the UK electing not to participate in the negotiation of the Eurojust Regulation”
The next question really is whether the Government have some other principled objection to Eurojust in any form. It would appear that they cannot and do not. First, because this country has been part of the Eurojust set up ab initio, as the noble Baroness pointed out, and secondly, because although the Eurojust regulations fell within the subjects covered by the opt-out afforded to us by the treaty of Lisbon, having exercised that opt-out, the Government have already announced that they propose to opt back in to those parts that cover Eurojust.
As to the operational need for a co-ordinating mechanism such as Eurojust, one only has to reflect on the increasingly global nature of crime and, in particular, what one might call the new crimes such as cybercrime which flit from country to country, indeed from continent to continent, and require a very highly co-ordinated international response.
I have had the honour to serve on one or more of the EU Sub-Committees of your Lordships’ House for several years. An abiding feature of inquiries focused on activities to combat EU cross-border crime has been the value ascribed to what they call joint investigation teams or JITs which are, of course, established under and by Eurojust. It would be a shame for this country not to be in a position to aid their further development by not participating in the negotiations on these future regulations.
That leaves two final issues which could underpin the Government’s apparent plan not to opt in to this proposal. First, there is the proposed change to the structure and governance of Eurojust. I find it hard to believe that this country should not opt in to a body on the sole grounds that an executive board should replace a management board with a director. It seems to me to be arguing about a distinction without a difference. Secondly, there is the different nature of our legal system compared with those of most of our fellow EU members—in short, the adversarial as opposed to the investigative approach. I recognise this challenge and I see why the Government have drawn our attention to it in their explanatory memorandum. However, since the UK has been involved in Eurojust for some 10 or so years, these do not appear to have been insuperable problems in the past and I see no reason why they should be so in the future.
I am forced to conclude that Eurojust is an organisation which has proved its value in the past, evidenced by the Government’s decision to opt in again to the existing regulations. The major threat implicit in the regulation we are discussing tonight was the introduction of the EPPO, but that is not now going to happen. In my view the Government ought to take advantage of this changed mood among our fellow EU members to opt in and to ensure that this regulation is fashioned to the advantage of this country. Otherwise, having avoided participating in the negotiations, we may find ourselves having to accept a directive that has not been fashioned in the manner most advantageous to this country. It is also hard to understand how we are going to be able to opt in to old Eurojust—that is, the existing regulations—and not participate in the new Eurojust that will result from the proposals now under consideration.
When John Maynard Keynes was once asked about why he changed his mind, he famously said when circumstances change I change my mind, what do you do? Circumstances here have changed dramatically with the EPPO and since the Government reached their preliminary conclusion, I hope that my noble friend will persuade Mr James Brokenshire that this was a mistaken approach and we ought now to participate and ensure that these regulations are taken forward to the best advantage of this country.
Baroness O'Loan (CB)
My Lords, I support the noble Baroness, Lady Corston. I have the privilege to serve on the European Union Sub-Committee on Justice, Institutions and Consumer Protection, which is chaired excellently by the noble Baroness.
The Government have made it quite clear that the current legislation on Eurojust represents a,
“positive model of cross-border co-operation”.
The Government have stated that it is their intention to seek to opt back in to the existing legislation on Eurojust following the decision to exercise the 2014 opt-out of 130 EU police and criminal justice measures adopted before the treaty of Lisbon entered into force in 2009.
When the sub-committees were considering the general issue of the opt-out, Eurojust was one of the measures on which there was a high level of consensus in favour. Eurojust provides judicial co-ordination meetings, judicial co-operation agreements with third countries, office facilities, the facilitation of mutual legal assistance agreements, the acceleration and execution of European arrest warrants and the funding of joint investigation teams with the accompanying translation costs. As the Government have recognised, all of these are of considerable value to the United Kingdom. In these circumstances it is very clear why the Government wish to opt back in to the existing arrangements.
The DPP, in evidence, to the committee said that Eurojust costs the UK just £360,000 per annum and costs would be much greater were these arrangements to be the subject of individual bilateral liaison between magistrates in each country. Those of us who were involved in the process of criminal investigation prior to 2002 are aware of how very much longer all these things took prior to the establishment of Eurojust. We know that sometimes things took so long and became so complex that criminals were able to avoid justice. We must also bear it in mind that even if criminals are ultimately apprehended, the ancient maxim that justice delayed is justice denied still applies.
The committee in its 23rd report of the 2003-04 Session, stated that Eurojust was,
“a model of how to make progress in an area where the differences between national jurisdictions are so great that it would be unrealistic to aim for harmonisation. It is also an example of the sort of effective practical co-operation that an EU agency can provide”.
The Government’s concerns have been articulated very clearly by the noble Baroness, Lady Corston. They are threefold: ramifications for fundamental rights; concerns in relation to the governance and management structures of Eurojust; and the nature of the extended powers to be given to national members. The decision is imminent and the sub-committee to which I belong has recommended that we should opt in. The real problem with Eurojust is well recognised. It is the extent to which the new proposal interacts the European Public Prosecutors Office proposal with Eurojust. I understand the reservations in relation to the EPPO. They are shared by a significant number of other states. As we say in our report, the UK will not be alone in opposing the EPPO.
The UK needs to be at the table to participate in these fundamentally important negotiations in the Council. We need to ensure that our voice is heard in these debates, particularly in support of those other members who wish to support less radical change to Eurojust, as the UK does. These will be complex and important arrangements. Ultimately it is likely that the current Eurojust arrangements will change. If we are not part of the negotiations, we will not be able to influence the outcome as effectively as if we were at the table. It is not impossible, as we say in the report, that if the UK fails to take its place at these negotiations, they will proceed. Eurojust will change, and the UK will find itself unable to opt back in to the existing arrangements, leaving us at a significant disadvantage in the fight against crime. The existing Eurojust will disappear, and we will not have brought to bear our very considerable influence on the creation of the new Eurojust. This can only leave the UK at a disadvantage.
As we contemplate the fight against crime and terrorism across borders, we have good cause to ensure that co-operative arrangements are as comprehensive as possible, while still retaining and maintaining our national independence. In Ireland last night, a massive bomb was intercepted by the Irish police. It was destined for the north. It would have caused carnage. We have increasing levels of evidence of more militant views in many communities, with the creation of many murals glorifying what they called the armed struggle. We have to consider the concerns we know exist in Northern Ireland about the possible effects of the current opt-out proposals on the protection of security in these islands. We have also to consider the ramifications of the interdependence between organised crime and terrorism in the context of this proposal. For example, we have two individuals who are subject to TPIMs currently on the run. They are subject to TPIMs because they were regarded by a judge as a threat to national security.
We cannot revert to the times when we were dependent on bilateral arrangements and individual processes took months, if not years. If we opt out of Eurojust under the protocol 36 arrangements and find ourselves unable to opt back in because things have moved on, that may well threaten the coherence of the whole package which the United Kingdom will present to the Commission when it seeks to opt back in to the various measures. European arrest warrants, the other 34 measures and, indeed, the other measures which have been recommended for inclusion in the package are interdependent. The Government stated in their response to the 13th report:
“Europol currently provides support in over 280 operations involving UK law enforcement”.
If we opt in, we can negotiate so as to secure the removal of the powers to direct national law enforcement agencies to initiate investigations or share data. We can influence other states to achieve an outcome acceptable to the UK. We will definitely do so more effectively if we are sitting at the table than if we are on the sidelines watching, seeking ultimately to rejoin a Eurojust on terms for which we have not argued and which ultimately we may even be unable to accept.
We put our whole protocol 36 situation at risk if we do not opt in. Eurojust represents great value to us. We must ensure that we have a voice in the ongoing debates, and I ask the Minister to consider again the decision the Government have made.
Lord Rowlands (Lab)
My Lords, if only I could improve upon the powerful and compelling case that the noble Baronesses, Lady O’Loan and Lady Corston, and the noble Lord, Lord Hodgson, have made on our committee’s report. This time last week, we had a consensus on our report on the EPPO. As I understand it, we have a consensus of a rather different kind tonight: a consensus of two Front Benches opposing our report. I find that all the more puzzling given the events of the past week or two.
As the noble Lord, Lord Hodgson, said, since we wrote this report, the context has changed. We have seen a very significant and “important”—in inverted commas—rebellion across a number of European Parliaments to the draft proposal on the EPPO. It was our case that if the Government joined in the debate and discussion on Eurojust, they would find enough allies to change and alter that report effectively. Surely the evidence of the past week or two has been that there are such allies and that if one engaged in an active and proactive way on this measure, one would find enough allies to change or transform the report itself. Our case has been strengthened by the events of the past week or two, and therefore I am puzzled if both Front Benches for some reason oppose the conclusions of our report.
We all accept the value of Eurojust. The Government accept the value of Eurojust. They want to opt back in to Eurojust under the opt-in proposals. We all support that opt-in to the system. I certainly share the Government’s concerns about the existing draft proposal. Almost all those concerns are about the interrelationship between it and the proposed draft for the EPPO. If those fall—if, in fact, the Commission is going to have to withdraw or revise its proposal—surely there will be a consequential fallout in the draft Eurojust proposal. Will the Minister bring us up to date on what has happened since last Monday, when there were enough reasoned opinions across Europe to mean that the Commission will have to review it? What has the Commission intimated? It has suggested that it is going to do so, and it accepts and understands the voices of concern. If it does that, does it not also have to review and almost withdraw this proposal because they are totally interlinked? A portion of the Eurojust draft is related to the proposed public prosecutor’s office. Will the Minister tell us whether, if the Commission has to review the EPPO, it will also probably have to undertake some kind of review of this draft?
In this case, we have a compelling case for joining in the negotiation because we now have a good clear view that we could affect those negotiations in a very positive way. As other members of the committee have said, one of the things that swung me in favour of our report—and I was sceptical at the beginning because I understood and appreciated the Government’s concerns—was that we could influence this because we sensed there would be a lot of other supporters. The other reason why I supported it was that I looked down the road and thought that a bizarre situation could happen in which the Government opt in to the existing measure and then find that this measure has been revised and it belongs to an existing measure which down the road may well be of a different kind, and they have opted out of that. I think that would cause a very puzzling and bizarre situation in the relationship between the United Kingdom and the Eurojust system.
There is one thing on which we surely have consensus: we are in favour of Eurojust and we are in favour of the United Kingdom’s participation in it. Therefore, I beg the Minister to tell us what has happened since last Monday and whether the impact of what happened in the past week or two means that the Government should rethink their position on this issue and should at least keep an open mind on the question of opting in, negotiating and influencing what I think is a very important organisation.
Lord Elystan-Morgan (CB)
My Lords, the matter before the House concerns only Eurojust, but it is clear that Eurojust and the EPPO have a very close nexus one to another. There are two ways of looking at that nexus: one is positive and the other is negative. It seems to me that the Government, and the Opposition for that matter—one is in the luxurious position on the Cross Benches of being able to say, “A mild plague on both your houses”—are approaching the matter from an utterly negative point of view. The Government have asked the question: is Eurojust in any way tainted by association with the EPPO? They answered yes; ergo, it must be rejected.
I argue that there is a forceful and utterly convincing case to the contrary. I am proud to say that I, too, am a member of Sub-Committee E. We have heard a great deal of evidence over the months with regard to European fraud. The official figure for fraud was €440 million or something of that nature. I do not think that anybody applied their minds to it properly, as the evidence was very different, appearing to range somewhere between €3 billion and €5 billion, possibly even in excess of that latter figure. Nobody was charged with overarching responsibility. That is where the case for the EPPO comes in. There is a saying in Welsh: “Everybody’s concern is nobody’s responsibility”. That is the situation here. Unless there is a body that is charged with the particular commission of looking at European fraud in a serious way, as has never happened before, I think that the whole system will be jeopardised to its very roots.
If one accepts that there should be an EPPO—and the noble Lord, Lord Hodgson, has pointed out that the objections are sere thin, casuistic and have no merit whatever—it seems to be the case that the Eurojust situation very much fits into that picture. It seems to me that the whole situation is tainted by the prejudices that have become so prevalent in the last few months in relation to Third Pillar matters. We have heard abundant evidence to show that it does not matter a row of beans what we do about 90 to 95 of those 130 measures, as most of them have virtually no effect upon our situation. One or two are of peripheral significance. Yet somehow or other the Government have managed to taint the whole situation by pretending that this is a massive battle for British sovereignty. In doing so, they are jeopardising something like 30 to 35 matters that are of crucial significance in so many different fields, and doing so cynically in order to pretend that we are somehow winning a great victory in relation to the 95 matters that never mattered at all.
I therefore very respectfully ask the Minister, whom I believe to be one of the most reasonable Ministers in government, to consider yet again whether he may be wrong in this particular matter.
Lord Hope of Craighead (CB)
My Lords, perhaps it is appropriate that someone who was not a member of this sub-committee should say a word or two about this issue. I come to this against the background of having been chairman of Sub-Committee E more than a decade ago, when Eurojust was just appearing on the horizon.
It is fair to say that initially there was a certain amount of suspicion as to whether it would be right for the United Kingdom to have any part to play at all, for reasons that are easy to understand: we have our own system for the administration of justice, our own prosecutors and prosecution system, which is so very different from that in the countries on the continent. However, I have kept an eye on this from a distance, and everything that has happened since then has supported the points that have just been made: Eurojust is beneficial and indeed essential to the battle against cross-border crime that we all must face up to. The only way to deal effectively with cross-border crime is cross-border co-ordination. The report says that pan-European co-ordination is required. Indeed, it is global co-ordination that is required.
From my position, based in Scotland, I would attach considerable importance to the evidence that was given by the Lord Advocate. I know that the Lord Advocate and his team have been closely involved in matters that lie at the heart of the Eurojust project. I will not mention names, but various issues have arisen where they have been hands-on in dealing with cross-border matters and the co-operation that is available through Eurojust has been absolutely crucial to the way in which they have been able to carry out their work. I do not think that anyone in the justice system in this country would have any doubt that Eurojust is beneficial and something that we should continue to support and be part of.
Lord Stoneham of Droxford (LD)
As a member of the sub-committee that produced this report, I support what has been said tonight, the report itself and the words of the noble Baroness, Lady Corston.
A lot of the arguments have already been made so I will not repeat them. However, I will say three things that I believe are important. Everyone knows that Eurojust aims to,
“improve the coordination of investigations and prosecutions among the competent judicial authorities of the European Union Member States”.
That is its purpose. It is inevitable, in a competitive single market, that just as capital, labour and goods will move between borders, criminals recognise no borders either. They will use whatever weaknesses there are in domestic legal and police systems to ply their trade and to seek protection. It makes no sense, as the Government have recognised, that we should pull out of Europol, Eurojust or the European arrest warrant. They all complement each other. The Government have agreed this, and last week we also agreed that the further proposal for a linked European prosecutor was a step too far, and the coalition is opposed to that.
However, now we have proposals for a new regulation for Eurojust which will look at its structure, its new provisions for governance and management structure, new provisions for its accountability to the European and national Parliaments—including the fact that the Eurojust president will have to appear before Parliament—the setting up of an executive board, and the removal of individual member states’ discretion.
The Government have concerns about all of those and have pointed them out. They are concerned about the ramifications for fundamental rights, the change to Eurojust’s existing governance and management and the whole nature of the extended powers given to national members. However, as we have heard, it makes no sense at all and it is silly that we are not prepared to get involved in the negotiation of these new proposals, and will mean that in Europe we will be seen as petulant and awkward.
Surely the great danger to us is that if we opt out of these negotiations things will emerge that we are not happy with. We know that there are many countries in Europe that agree with us on the whole issue of whether or not to have a European prosecutor and on getting further accountability of Eurojust. It is too important a body to us for us to ignore the process of reforming it. Finally, on this question we should send in the openers to bat, not rely on the tail end to pick up the pieces.
Baroness Hamwee (LD)
My Lords, my point is a general one. I apologise to your Lordships if it is trite—it probably is—but to me it is blindingly obvious that you cannot play the ball if you have taken your bat home. Every noble Lord will have had experiences of negotiation in some context, if only the domestic, and we know that if you choose to walk away you have to pick your moment. You have to be clear what the deal breaker is and know what your own compromise would be. However, until then you have to remain part of the story, not least because you risk losing respect if you are not prepared to get stuck in and stay stuck in to the project. You certainly risk losing influence. My noble friend’s phrase that you are “looked on as petulant” was absolutely spot on. You risk not being regarded as a serious player if and when negotiations resume. Indeed, you risk being thought of as having disqualified yourself from further negotiations in a serious way if you have distanced yourself.
Lord Rosser (Lab)
My Lords, I thank my noble friend Lady Corston for her introduction to the report from her committee and for the clarity of the committee’s case made in its report for the recommendation that the UK opt in to the negotiations on the proposed Eurojust regulation.
As has already been said, the European Union Agency for Criminal Justice Co-operation—Eurojust—was established just over 10 years ago. Provisions in the 2009 Lisbon treaty agreed by the member states included provisions that required the EU’s institutions to pass legislation in the form of regulations to determine Eurojust’s structure, operation, field of action and tasks. The proposed Eurojust regulation seeks to fulfil the member states’ aims.
Eurojust is involved in major crimes such as drug trafficking, human trafficking, terrorism and financial crimes, which cross borders and require co-operation between different jurisdictions if they are to be successfully investigated and prosecuted. Since 2003 there have been just under 1,500 requests from EU member states for co-operation with Britain through Eurojust. The objective of Eurojust is to support member states in conducting investigations, and we are very supportive of the value of the work that it undertakes.
As has already been said, the proposed Eurojust regulation will apply to the United Kingdom only if the Government indicate a decision to opt in by 21 November. The Government’s position in the House of Commons when it was debated there, I think last week, was that we should not opt in to the new Eurojust proposals at the outset of negotiations but should conduct a thorough review of the final agreed text to inform active consideration of opting in to the Eurojust regulation post-adoption, in consultation with Parliament. If the Government decide to opt in to the negotiation of the proposed Eurojust regulation, which seeks to replace two existing Council decisions, the legislation currently governing Eurojust will no longer fall within the scope of the Government’s 2014 opt-out decision, under which the Government are seeking to rejoin the current Eurojust arrangements as part of their 2014 opt-out decision.
In the House of Commons debate last week, the Minister referred to government concerns about the proposed connections between Eurojust and the proposed and strongly opposed European Public Prosecutor’s Office. The Minister also expressed government concern about the proposed new Eurojust regulation creating mandatory powers for national members. These powers, said the Minister, would allow a requirement for coercive measures at a national level with the ability to insist that national authorities take investigative measures in some circumstances, which could cut across the division of responsibilities and separation of powers between police and prosecutors in England, Wales and Northern Ireland, and the sole ultimate responsibility of the Lord Advocate in Scotland for determining investigative action in Scotland.
Unusually for this Government in regard to a European Union agency, they publicly rather value Eurojust. Their stance indicates they would prefer to stay in rather than find themselves outside because they do not like the look of the new regulation once it has been adopted following the deliberations of all those member states participating in the negotiations. In this regard it would at least clarify the Government’s position if the Minister could indicate whether, if the European Public Prosecutor’s Office proposal does not proceed, and with it the references to the link up with Eurojust, the Government will still not opt in to the proposed Eurojust regulation unless other significant changes are made to the proposed regulation. In other words, is it the connection with the EPPO proposal that is the showstopper for the Government or are there other aspects of the proposed Eurojust regulation that the Government also regard as a showstopper as far as opting in to the regulation is concerned?
The Government should be able to answer that question in general terms since they are not disclosing their negotiating position on what significant changes would be required as, under their stance in the House of Commons, they do not intend to opt in to negotiations anyway on the proposed Eurojust regulation. What the question does—if the Minister will give a straight answer—is indicate whether the Government’s relative enthusiasm for Eurojust is greater than their dislike of the proposed new regulation as it stands minus any interweave between Eurojust and the EPPO, or whether the Government’s dislike of the proposed new Eurojust regulations minus the interaction with the European Public Prosecutor’s Office is still such that if there is no significant change in the regulation in line with their position, they are prepared to accept no longer being a full participating member of Eurojust.
The view of your Lordships’ European Union Committee is that were it not for the provisions governing Eurojust’s interaction with the EPPO, the argument in favour of the UK opting into the negotiations would be clear and the committee would have no hesitation in recommending that the UK opt in. The committee’s view is that the Government’s key issues with the text could be dealt with during the proposal’s negotiation, but they recognise that the Eurojust proposal has not been brought forward in a vacuum but is closely associated with the Government’s policy towards the EPPO proposal. However, as has already been said, there will be changes in relation to the EPPO proposals since those proposals have been given what I think is known as a yellow card as a result of decisions by a not inconsiderable number of member states’ national Parliaments, which means that the Commission is now required to review its position.
The European Union Committee considers that the non-participation in the EPPO by other member states in addition to the UK, will inevitably mean that the contentious aspects of the proposal dealing with the reform of Eurojust will be subject to negotiations in the Council, and that the United Kingdom ought not to miss out on such negotiations. The committee takes the view that if the UK Government decide not to opt in to this regulation they will not be at the table for the important discussions addressing the position of those states wishing to co-operate within Eurojust but who choose not to participate in the EPPO. The committee says that it could not advocate such a course of action.
Referring to the Government’s position that they value the work of Eurojust, the committee says that it cannot foresee a situation whereby in practical terms the UK would be allowed to remain a full participating member of Eurojust operating under defunct or superseded legislation that they have decided to opt back in to, while the other participating member states co-operate under the new proposal once it is agreed. The European Union Committee has therefore recommended that the UK opt in to the negotiations on the proposed Eurojust regulations. Its report points out that the Director of Public Prosecutions said that the UK’s involvement in Eurojust provides many benefits and in his view represents good value for money, and that the Lord Advocate said that he would be concerned if the UK left Eurojust.
In his letter to the chairman of the European Union Committee, the Minister in the other place said that the Government would take an active part in the negotiations to protect the national interest, and also on the EPPO. The Government, he said, would also continue to challenge the Commission’s evidence base and justification for bringing forward the Eurojust proposals at this time. In addition, the Minister said that the Government would oppose any changes that would reduce the influence of member state representatives over the functioning of Eurojust, and seek confirmation that the opinions of Eurojust acting as a college are non-binding on member states.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, I thank the noble Baroness, Lady Corston, and the European Union Committee, many of whose members have spoken in this debate, for bringing forward this Motion and for their work on this report. As noble Lords have said, we were here a week ago to debate the issue of the European Public Prosecutor’s Office when the House concluded that it should issue a reasoned opinion against that proposal as it breached the principle of subsidiarity. Today, we have turned to the related matter of the opt-in decision triggered by the European Commission’s parallel proposal for a Eurojust regulation. We have had a full debate and I have listened to it with great interest.
The Government’s view is that the UK should not opt in to the draft regulation on Eurojust at this time and we should conduct a thorough review of the final agreed text to inform active consideration of opting in to it, post adoption, in consultation with Parliament. I am pleased to say that a Motion to that effect was agreed in the other place last week. It has been very good to have the support of the noble Lord, Lord Rosser, expressing the Opposition’s view that this presented the right approach in the interests of Parliament and of Government.
The Government have said clearly that we value the current Eurojust arrangements, which is why we are seeking to rejoin them as part of the 2014 opt-out decision. I can only agree with the noble and learned Lord, Lord Hope of Craighead, and all other noble Lords who have pointed out the merits of the current Eurojust arrangements. Moreover, prior to the publication of the new Eurojust proposal, we said consistently that there was no need to reform Eurojust at this time; indeed, the Security Minister in the other place, James Brokenshire, made that case clearly at the 10th anniversary of Eurojust last year.
Current legislation is still undergoing a peer evaluation, which will not be complete until next year, and the Commission has not put forward a convincing case as to why the new proposal is needed. However, regrettably, it has come forward with a new Eurojust proposal that contains a number of substantial concerns. In particular, as the European Union Committee’s report elegantly describes, the Eurojust proposal is interwoven with the EPPO proposal. The reforms proposed to Eurojust would see deep connections made to the EPPO with operational, management and administrative links between the two bodies. At this time we cannot be certain either about the shape of the EPPO proposal itself—not least given the subsidiarity yellow card that has been issued, as we know, as a result of our debate and debates in other parliaments—or how the relationship between the EPPO and Eurojust might ultimately be defined.
I say to the noble Lord, Lord Elystan-Morgan, that our concerns articulated in this House last week have not gone away. To update the noble Lord, Lord Rowlands, who asked where we were now as a result of last Monday, the number of votes from national parliaments on the EPPO means that the Commission must now review its proposal. Officials speaking on behalf of Commissioner Reding, however, have interpreted this as being the majority of national parliaments not opposing the proposal. It would be a huge mistake no longer to consider the EPPO presenting a risk for the new Eurojust proposal. That is our view of the situation at the present time. The Government therefore believe that it would be extremely and unnecessarily risky to bind ourselves to the European Public Prosecutor’s Office through our participation in the new Eurojust proposal at the start of negotiations. This would be a needless risk when we can review our place in Eurojust upon its adoption.
The new Eurojust measure also proposes to create new mandatory powers for Eurojust national members—powers which would enable them to require coercive measures at a national level. The current Eurojust measure works well and it does not force member states to give their national members such extensive powers. The new proposal unnecessarily removes this discretion. These proposals would cut across the division of responsibilities and separation of powers between police and prosecutors in England, Wales and Northern Ireland. It is quite clear that these proposals would conflict with the role of the Lord Advocate in Scotland, who has been at the apex of the Scottish criminal justice system since at least the time of the first recorded holder of that office, Sir John Ross of Montgreenan, in 1483. Before this debate I had no idea that the office so ably held by my noble and learned friend Lord Wallace of Tankerness had such ancient roots.
The evidence that the Lord Advocate gave to the committee was on the existing Eurojust measure about which there is no dispute among us—it is a valuable measure—not the new proposal. That evidence is therefore not relevant: the new proposal might actually undermine the role of the Lord Advocate. It was following consultation with the Scottish Government that we came to our view. On consultation, we have consulted the devolved Administrations in Scotland and Northern Ireland. They have told us that they understand our reasoning and they would not seek to demur from our proposed approach. The concern in relation to the Lord Advocate’s role follows consultation with the Scottish Government. Our clear view is that we should not opt in to the new Eurojust proposal at the start of negotiations because the risks it presents are unacceptably high for our criminal justice system arrangements.
I hope that I can also allay some of the concerns expressed in the European Union Committee’s report that we might “miss out” on these negotiations. Indeed, in introducing the debate, the noble Baroness, Lady Corston, made such remarks and they have been reinforced by the speeches of the noble Baroness, Lady O’Loan and my noble friends Lord Hodgson of Astley Abbotts, Lord Stoneham of Droxford and Lady Hamwee. All have talked in terms of our missing out or not being involved in the negotiations. I assure noble Lords that where we do not opt in at the start of negotiations we will nevertheless be actively involved. Not only will we be present in the negotiating room at all levels, we will be able to intervene as and when we wish. If we do not opt in to this measure now, we will nevertheless be at the negotiating table energetically representing our interests, and we will be able actively to consider opting in post-adoption based on the final text and the further views of Parliament. I hope that reassures noble Lords that this may be an opt-out or a non-opt-in to the revised proposal but it is not an opting-out of our responsibility to negotiate and make a success of Eurojust, which it has been for all participating countries in the past. I assure noble Lords that we will vigorously represent our views on both the Eurojust and EPPO measures.
Moreover, as your Lordships may be aware, Ireland has also said that it will not opt in to the Eurojust proposal at the start and, of course, Denmark cannot participate in post-Lisbon justice and home affairs measures, so we are not isolated or alone in our position. I reassure the noble Lord, Lord Rosser, regarding the other issues we are concerned about. The coalition agreement is clear that the Government will consider the impact of any of these measures on the UK criminal justice system when considering an opt-in to any measure. We have set out our concerns on that point very clearly and it is an area that we want improved.
I conclude by making clear our commitment to the current Eurojust arrangements—
Lord Hodgson of Astley Abbotts
I am extremely grateful to the noble Lord and I am sure that I speak for a lot of noble Lords when I say that I am reassured by the energetic negotiations that will take place around the edge of the formal negotiations, and I hope that they are successful. However, the question we are left with is what happens if the final negotiations are not to our satisfaction. What happens to our membership of Eurojust in its present form? It is hard to believe that our fellow members will allow us to remain a member of Eurojust on the old terms and not accept the new terms which we will have no part—at least, no direct part—in negotiating.
Lord Taylor of Holbeach
My noble friend and I have been involved in negotiations and I do not think that we ever went into them contemplating that approach to the issues. We went in there to achieve our objectives and that is exactly what the Government will be doing. We are not alone in taking this stance; we have the support of others. Eurojust has been an asset and we want to make sure that the new proposals complement the work that has already been achieved by it and do not get in its way.
I make no apology for not going into detail about our negotiating position but reinforce the fact that we are not in some sort of annexe. We are not down the corridor to be occasionally brought in to be involved in these negotiations. We are at the table negotiating on behalf of our interests and that is what our colleagues in Europe expect us to do. I do not share the view of my noble friend Lady Hamwee that we are not fully committed to negotiations. We are committed to negotiations. I have always believed that if you go into negotiations you do the best service to your colleagues and the issue under consideration by stating your position clearly and arguing for it. That is exactly what this Government will be doing.
I was in the middle of my peroration when my noble friend interrupted me. Our intention is to negotiate to protect the Eurojust arrangements, but our view currently is that as the new proposal stands it presents too high a risk to our criminal justice system to opt in at this stage. I hope, therefore, that noble Lords will understand why the Government cannot support the Motion.
Baroness Corston
My Lords, I thank those noble Lords who have contributed to this debate this evening. It was particularly gratifying to have the support of five members of Sub-Committee E and that of an illustrious past chair of Sub-Committee E, the noble and learned Lord, Lord Hope of Craighead, who was entirely right when he pointed out how important it is for the Government to be at the table at the outset of these negotiations. This report does not tie the Government’s hands. There would be no difficulty if the Motion was agreed to. The Minister listened to the debate and can take the views expressed and the report into account. The House usually supports the committees that it appoints to perform its scrutiny functions. This issue was very carefully considered by Sub-Committee E and was endorsed by the full EU Select Committee so ably chaired by the noble Lord, Lord Boswell, who I am pleased to say is in his place this evening.
However, I am mindful of the old adage that when you are in a hole you should stop digging, and since neither Front Bench supports the Motion and it is not going to be agreed to, I am willing to withdraw it.