House of Commons

Tuesday 7th January 2014 Commons Chamber

Tuesday 7 January 2014

The House met at half-past Eleven o’clock

Prayers

Tuesday 7th January 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 7th January 2014 Commons Chamber

The Deputy Prime Minister was asked—

[Nick Smith (Blaenau Gwent) (Lab)]

1. What measures are in place to prevent a fall in the number of people registered to vote after the introduction of individual voter registration.

[Paul Blomfield (Sheffield Central) (Lab)]

4. What measures are in place to prevent a fall in the number of people registered to vote after the introduction of individual voter registration.

[The Minister of State, Cabinet Office (Greg Clark)]

A happy new year to you, Mr Speaker, and to colleagues.

There are three ways in which the Government are ensuring that the electoral register under individual registration is complete and accurate: first, using data matching so that the majority of voters are automatically registered; secondly, phasing in the transition over two years so that people who are not individually registered can nevertheless vote in the 2015 general election; and, thirdly, providing additional resources above what is usually spent at a national and local level to fund activities to boost the completeness and accuracy of the register.

[Nick Smith]

I thank the Minister for that answer. What are the Government doing to ensure that when members of the public come into contact with Government agencies such as the Driver and Vehicle Licensing Agency or the UK Passport Service, that is used to promote electoral registration?

[Greg Clark]

The hon. Gentleman makes a good point. One of the features of the transition that we are putting in place is to use Government databases automatically to register those whose details are held. In the test of this, well over three quarters were automatically registered; in fact, in his constituency the figure was 84%. We are continuing to make use of those sources.

[Paul Blomfield]

Ministers will recognise the particular challenge of encouraging young people to engage in the electoral process, so what consideration has been given to having polling stations in sixth-form colleges, further education colleges and universities to encourage 18-year-olds to vote?

[Greg Clark]

The hon. Gentleman makes an interesting point. Of course, it is in all our interests to ensure that as many young people register as possible, especially in student cities such as his. It is for local authorities to determine polling places, as he knows, but I will take away his suggestion and raise it with the relevant authorities.

[David T. C. Davies (Monmouth) (Con)]

Does the Minister agree that increasing voter registration and voter participation is absolutely vital, but that we must not do so in any way that increases the incidence of voter fraud?

[Greg Clark]

My hon. Friend is absolutely right. The purpose of individual electoral registration is to make sure that those who vote are those who are entitled to vote, so the accuracy of the register is important as well. It is not just important, vital though it is, for voting, because identity fraud is often associated with a fraudulent entry on the electoral register. In fact, the Metropolitan police found that nearly half of fraudulent IDs corresponded with a fraudulent entry on the register. That is another good reason why this change is important.

[Mr Peter Bone (Wellingborough) (Con)]

Surely the way to stop a decline in individual registration is to make politics interesting. Is it not therefore essential that we continue with the leaders’ debates and that they should include the Prime Minister, the Deputy Prime Minister, the Leader of the Opposition and the leader of the UK Independence party? Does the Minister agree that afterwards it will not be a case of “I agree with Nick” but “I agree with Nige”?

[Greg Clark]

All I would say is that my hon. Friend is a personal example of someone who makes politics interesting, and there is a good case for his being included in those debates for that reason.

[Mr Clive Betts (Sheffield South East) (Lab)]

11. In a debate on a statutory instrument before Christmas, the Minister indicated that where local authorities needed extra resources to make proper efforts to maximise the number of people on the register, those resources would be available to them. How are they going to go about applying for them—what will the process be?

[Greg Clark]

The process is already under way. There has been an allocation based on the assessed requirement of the local authority, but it has been made very clear that if it produces evidence of why its need is higher, that need will be met. In the hon. Gentleman’s constituency, in Sheffield, £240,000 has been allocated on top of what is usually spent on electoral registration for this purpose. If there are any exceptional circumstances, they are being considered by my officials right now.

[Mr Philip Hollobone (Kettering) (Con)]

The hon. Member for Blaenau Gwent (Nick Smith) made an extremely good point. Will my right hon. Friend use his considerable influence across all Government Departments to ensure that whenever a member of the public comes into contact with one of those Departments, or a local authority, they are asked, “Are you on the local electoral register”, and if they are not, they are helped to fill out a voter registration form then and there?

[Greg Clark]

My hon. Friend makes a very good point. A public awareness campaign promoting electoral registration will be held during the summer and beyond. My hon. Friend makes a valuable contribution in suggesting that every Department that has contact with the public can play its role.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

At a statutory instrument Committee last month, the Minister said that the point of individual electoral registration

“is to drive up registration”.—[Official Report, Third Delegated Legislation Committee, 16 December 2013; c. 12.]

Frankly, most people expect the opposite. How many people would have to fall off the register for the Government to consider using their power to delay implementation of full IER?

[Greg Clark]

I am surprised by the hon. Gentleman’s question, given that this policy was originated by the Labour party. Everyone agrees that we should modernise our electoral system so that people vote individually. The hon. Gentleman did not oppose the passage of the legislation. We need to proceed with it. The Electoral Commission will monitor it and provide advice as we go.

[Ann McKechin (Glasgow North) (Lab)]

2. What his plans are for reform of the House of Lords.

[The Minister of State, Cabinet Office (Greg Clark)]

In the absence of wider reform—[Interruption.]

[Mr Speaker]

Order. There seems to be a problem with the microphone. We will try to have the problem solved, but in the meantime if the Minister speaks up we will all be able to hear him.

[Greg Clark]

In the absence of wider reform, the Government have said that they will support the private Member’s Bill promoted by my hon. Friend the Member for North Warwickshire (Dan Byles), which proposes changes to the rules governing the membership of the House of Lords, including removing peers who are convicted of a serious offence—bringing the rules into line with those of the House of Commons—and removing peers who do not attend.

[Ann McKechin]

I am obliged to the Minister for his response. According to the House of Commons Library, the additional costs of running the House of Lords have increased by £42 million since 2010. Will the Minister confirm how much his Government’s policy of stuffing the Lords until it bursts will cost the taxpayer between now and the general election?

[Greg Clark]

I will raise my voice to make the point that the hon. Lady has some nerve to lecture us on House of Lords reform when the Labour party blocked such reform. [Interruption.] The right hon. Member for Tooting (Sadiq Khan) is right to say that some of my colleagues voted against it, but they did so because they disagreed with it; Labour Members voted against it despite the fact that they said they agreed with it.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Why is the Deputy Prime Minister not answering this question?

[Greg Clark]

In the interests of the coalition, the Deputy Prime Minister occasionally allows his coalition partner to answer questions.

[Sadiq Khan (Tooting) (Lab)]

I am also surprised that the Deputy Prime Minister is not answering the question. [Interruption.] I have been called to stand up and speak, and I will do so.

Over the past three years, the size and cost of the House of Lords has gone up. Does the Minister realise that the more Tory and Lib Dem peers the Deputy Prime Minister and Prime Minister appoint, the less effective the House of Lords becomes, because they do as the Government Whips say? Does the Minister therefore agree that, over the past three years, the House of Lords has become bigger, more expensive and less effective?

[Greg Clark]

The right hon. Gentleman does not have a shred of credibility, because Labour voted against the proposals that would have blocked that. Of course, we all know that 408 peers were created under the previous Labour Government.

[Dr Julian Lewis (New Forest East) (Con)]

Does my right hon. Friend have any idea whether the Deputy Prime Minister has adopted a new year’s resolution to stop blocking the eminently sensible proposal of his own former party leader, Lord Steel, for modest but necessary House of Lords reform?

[Greg Clark]

I have a post-Christmas gift for my hon. Friend: the Government are indeed supporting—[Hon. Members: “Hurrah!”] Ah, we are back. The Government, including my right hon. Friend the Deputy Prime Minister, have announced that we will support the very sensible and modest, common-sense proposals in the Bill proposed by our hon. Friend the Member for North Warwickshire.

[Mr Speaker]

I call Chris Kelly. Not here.

[Damian Hinds (East Hampshire) (Con)]

5. What recent progress the Government have made on their social mobility strategy.

[The Deputy Prime Minister (Mr Nick Clegg)]

Improving social mobility—[Hon. Members: “He speaks.”] He does, indeed, speak. Improving social mobility is the principal goal of this Government’s social policy. Progress is being made in a range of areas, and we continue to increase investment. Next year, we will double our offer of early education for two-year-olds from lower-income families, and we will add a further £400 per child to the pupil premium. As announced in the autumn statement, we will soon invest about £10 million extra per year in Jobcentre Plus to help young people access apprenticeships.

[Damian Hinds]

Following recent media comment, some of it misinformed, about heritability, will my right hon. Friend confirm the Government’s belief that a huge part of long-standing social immobility in Britain has nothing to do with inherent ability? Will he reaffirm the Government’s core purpose to ensure, through school reform and every other lever available to Government, that everybody in our society can reach their full potential?

[The Deputy Prime Minister]

May I first pay tribute to my hon. Friend? I know that he has done a huge amount of work in this area, and I have read with great interest the reports that he and the all-party group on social mobility have published. He is absolutely right. It is a counsel of pessimism somehow to assume that people’s life chances are blighted at birth. That is why I am so proud that this coalition Government—across the coalition—have dedicated so much time and resources in rectifying the mistakes of the previous Labour Government: providing better child care and more opportunities for two-year-olds from the most disadvantaged backgrounds; providing a £2.5 million pupil premium for children from the most disadvantaged families; expanding apprenticeships on a scale never seen before; and ensuring we have a welfare and tax system with which people can get into work and keep more of the money that they earn.

[Sheila Gilmore (Edinburgh East) (Lab)]

Does the Deputy Prime Minister agree with the social mobility commission that the decision to abolish the education maintenance allowance was badly conceived, and what steps will he take to make up for that error?

[The Deputy Prime Minister]

The education maintenance allowance, as proven by study after study, was not targeted at the problem it was supposed to address. That is why it has been replaced by a fund, which is now used at the discretion of colleges to cover classroom costs and transport costs for those students at college who otherwise cannot access it. I hope that the hon. Lady will welcome the fact that we have recently announced—as well as free school meals for all children in the first years of primary school—that we will finally address the inequity of providing free school meals to youngsters from disadvantaged backgrounds at college as well.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Given that one of the key determinants of social mobility is the availability of affordable new housing, will the Deputy Prime Minister disassociate himself from words attributed to the Prime Minister over the holiday period about the Price Minister being opposed to the development of new garden cities to help meet that desperate need? Will my right hon. Friend support proposals to build in fresh places to make our economy stronger and our society fairer?

[The Deputy Prime Minister]

I have been a long-standing advocate of garden cities. If we are to avoid endless infill and endless controversy about developments that sprawl from already established urban or suburban places, we have to create communities where people want to live—not just with affordable housing, but with the amenities of schools and the infrastructure necessary. That is why I believe in garden cities and why, as a Government, we are committed to publishing a prospectus on them, which I very much hope we will do as soon as possible.

[Jenny Chapman (Darlington) (Lab)]

Another recommendation of the social mobility commission was a substantial increase in the minimum wage that would bring it up to about £7.45 outside London, which would seriously benefit constituents in Darlington. What is the Deputy Prime Minister going to do about that one?

[The Deputy Prime Minister]

My right hon. Friend the Secretary of State for Business, Innovation and Skills has asked the Low Pay Commission precisely the question about the merits and the economic knock-on effects of increasing the minimum wage by a higher rate than in the past. That is what the Low Pay Commission is about and why we have asked that question. We have asked that question; it was not asked by the Labour Government.

[John Howell (Henley) (Con)]

6. What recent discussions he has had with his ministerial colleagues on the role of decentralisation in the implementation of the Heseltine review.

[Nick de Bois (Enfield North) (Con)]

7. What progress he has made on implementing the recommendations of the Heseltine review.

[The Minister of State, Cabinet Office (Greg Clark)]

The Government published its response to Lord Heseltine’s report in March 2013. We accepted its proposition that more funding and powers, currently held centrally, should be available at local level. Some £2 billion a year has been taken from central Government Departments and is available for that purpose. I look forward to assessing proposals during the weeks ahead.

[John Howell]

Decentralisation, as outlined by my noble predecessor’s review, can help to promote private sector business. In this context, what progress is my right hon. Friend making with the Oxfordshire growth deal?

[Greg Clark]

I am delighted to say that there has been very good progress. A city deal for the city of Oxford and the surrounding area is being negotiated and we hope to complete it shortly. I will meet the representatives of Oxfordshire to go further than that by devolving more power and resources to the county to further private sector growth.

[Nick de Bois]

May I press the Minister to confirm that the Government will genuinely look at new ideas that are proposed by local authorities? More importantly, will he confirm that the onus will shift from Whitehall having to approve ideas to it having to disprove their viability?

[Greg Clark]

My hon. Friend is absolutely right. That is precisely the rubric that has been given to local authorities. It is up to Departments to demonstrate why an innovation should not proceed, rather than simply to say, “The computer says no.”

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

May I press the Minister further on this matter? There is a devolved Assembly or Parliament in Northern Ireland, Scotland and Wales, and there is a powerful Greater London axis under Boris Johnson that is enormously influential, but we in the regions have nothing—Yorkshire has nothing. We have no focus, no strategy, no leadership. The Heseltine review said that we should take this matter seriously. When will the Minister take it seriously?

[Greg Clark]

It is taken immensely seriously. The hon. Gentleman does a disservice to the leaders in Leeds and West Yorkshire, who have been extremely effective in producing a plan for a combined authority that puts their resources together. They have been very clear that progress has been made. More progress has been made in the last three years than was made in the 13 years when the Labour party was in power. Lord Heseltine will be travelling to Yorkshire with me to make it clear that the implementation of his report is as serious as the agreement of it.

[Lucy Powell (Manchester Central) (Lab/Co-op)]

The Minister will be aware that Manchester has made huge progress with its combined authority and that the Manchester city deal, which will devolve £1.2 billion to Manchester, was one of the first such deals to be announced by the Government nearly two years ago. Will he say when that deal will be signed, given the ongoing delay in his Department’s signing the deal?

[Greg Clark]

There is no such delay. The deal is agreed.

[Mr Speaker]

I call Paul Uppal. Not here.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

T2. If he will make a statement on his departmental responsibilities.

[The Deputy Prime Minister (Mr Nick Clegg)]

As Deputy Prime Minister, I support the Prime Minister on the full range of Government policies and initiatives. [Hon. Members: “Oh no you don’t!”] Oh yes I do. I say to Opposition Members that the pantomime season is over. I take special responsibility for the Government’s programme of political and constitutional reform.

[Debbie Abrahams]

A and E departments across the country are in crisis, despite the valiant efforts of NHS staff, including staff at Royal Oldham hospital in my area. The cuts to social care mean that there is often insufficient support in the community to allow patients to be discharged from hospital safely, and beds are blocked as a result. Why did the Deputy Prime Minister support his coalition partners in the £3 billion top-down reorganisation and the £1.8 million cuts to social care when these things were predicted?

[The Deputy Prime Minister]

I wish that the Labour party would stop talking down the NHS. The fact is that A and E is performing better than it did under Labour. We have 300 more A and E doctors than there were under Labour; 2,000 more patients are seen every day within the four-hour limit than when Labour was in control; 1.2 million more people are now using A and E; and there is a new £3.8 billion fund to promote the integration of social care and health care that the hon. Lady advocates. Is it not time to support, rather than denigrate, the NHS?

[Sir Bob Russell (Colchester) (LD)]

T3. I extend birthday greetings to the Deputy Prime Minister. Will he give a progress report on the triple lock for pensions—an ingredient in the coalition agreement that is 100% Liberal Democrat?

[The Deputy Prime Minister]

I thank my hon. Friend for the birthday greetings. On my birthday, I look forward to nothing more than coming to Deputy Prime Minister’s questions. He asks for a progress report on the triple lock. It is true that in the last election the triple lock was not in the Labour manifesto or the Conservative manifesto, but only in the Liberal Democrat manifesto. I am delighted that we have delivered it in coalition. It has led to the largest cash increase in the state pension ever. It is a great idea that has been delivered to the benefit of millions of pensioners across the country.

[Sadiq Khan (Tooting) (Lab)]

May I bring the Deputy Prime Minister back down to planet Earth? NHS England’s own figures show that almost 18,500 beds were unavailable over Christmas because patients spent the holidays in hospital, even though they were well enough to be discharged. Is the Deputy Prime Minister aware of that, and why does he think it was?

[The Deputy Prime Minister]

As I said earlier, given that we have more A and E doctors and thousands more patients being seen within a four-hour period than under the Labour Government, given that A and E NHS departments across the country are performing better than they did under Labour, and given that more than 1.2 million more people are using A and E departments, I think we should get behind the NHS, not constantly look for crises where they do not exist.

[Sadiq Khan]

It would be nice if the Deputy Prime Minister answered a question or two once in a while. The real reason that thousands of people were stuck in hospital over Christmas is that cuts to elderly care make it harder to discharge patients back home. Those cuts also have a knock-on impact on A and E. Official figures show that over Christmas, 13 patients had to wait at least 12 hours on trolleys before being found beds. What message does the Deputy Prime Minister send to those families and patients?

[The Deputy Prime Minister]

For a party that allowed the scandal at Stafford hospital to take place on its watch, it is pretty rich to start complaining about hospital conditions. The failure of social care and health care to work together effectively and address the problem, to which the right hon. Gentleman rightly alludes, went unaddressed for 13 years. We have offered £3.8 billion to local authorities across the country, in an unprecedented attempt to integrate social care and health care. That is what we are doing and what Labour failed to do when it was in office.

[Mr David Ward (Bradford East) (LD)]

T5. Irrespective of the outcome of the national debate on the level of net immigration, does the Deputy Prime Minister believe that sufficient support is given to those communities where there are disproportionately high levels of immigration, and in particular to the public services available in those areas?

[The Deputy Prime Minister]

That obviously touches on an issue of widespread public concern, and my hon. Friend will know that local public services are funded on a needs-based formula, which relates in large part to the number of people in a local area. The changes in population in a local area are reflected in the funding settlements for our schools and health system. To that extent, changes in local population are of course reflected in the funding provided to our local services. More generally, I think we all need to work together to ensure the public have confidence that we have a firm but fair immigration system that welcomes to this country people who want to contribute to the United Kingdom and play by the rules. We must, however, stamp out abuse and illegality, and ensure that in the European Union, for instance, the right to move to look for work is not synonymous—as it was in the past—with the right to claim benefits, no questions asked.

[Ian Lucas (Wrexham) (Lab)]

T6. Will the Deputy Prime Minister agree and support the placement of a limited number of the most vulnerable refugees from Syria in the UK?

[The Deputy Prime Minister]

We have already accepted a number of—[Interruption.] Yes we have. We have accepted, I think, about 1,500 asylum seekers—[Interruption.] Yes we have; that is a fact.

[Ian Lucas]

indicated dissent.

[The Deputy Prime Minister]

The hon. Gentleman keeps shaking his head, but it is a fact that we have accepted hundreds upon hundreds of individual asylum seekers from Syria, under our international asylum obligations. Of course we should do that.

[Ian Lucas]

Answer the question.

[The Deputy Prime Minister]

The hon. Gentleman asked about asylum seekers from Syria, and I am giving him a fact that he does not seem to want to recognise. We have accepted hundreds of asylum seekers who have sought and been provided with refuge in this country under our international obligations. At the same time, I think Members from across the House should be proud of the fact that we, and the generosity of the British people, have led to more British assistance—£500 million of assistance—going to Jordan and other front-line states, and to those communities in the region that are dealing with this terrible humanitarian crisis.

[Nick de Bois (Enfield North) (Con)]

T7. The Deputy Prime Minister and I agree that the integrity of voter registration is crucial, and he will know that I am interested in the issue. Will he change his mind and press for voter identification cards such as those used successfully in Northern Ireland?

[The Deputy Prime Minister]

I recognise that my hon. Friend has raised this issue on several occasions and he clearly feels strongly about it. We are confident that the measures being introduced through the individual voter registration system, originally planned by the Labour party and being delivered ahead of time by us, will stamp out the problems of fraud about which he is rightly so concerned.

[Kevin Barron (Rother Valley) (Lab)]

T8. In response to the Chancellor’s statement yesterday about further welfare benefit cuts in years to come, the Deputy Prime Minister said that those would be cuts for cuts’ sake and would be Conservative cuts. Can he explain to people who live on welfare benefits why he keeps the Conservatives in office?

[The Deputy Prime Minister]

There is a really important debate emerging. We have to finish the job of fiscal consolidation, and there are at least two parties in the House which understand that—the two coalition parties. We understand that we have to fill the black hole in the public finances left by the Labour party, and that will require several further years of difficult choices. Then there is a debate about how we get to that objective and clearly there are differences there. In my party we feel that we should ask those with the broadest shoulders to continue to make an effort in the ongoing fiscal consolidation: my coalition partners do not. That is a legitimate debate, but what divides this side of the House from the other side is that at least we recognise that we have to clear up the mess left behind by the Labour Government.

[Mr Philip Hollobone (Kettering) (Con)]

T10. Does the Deputy Prime Minister believe that unrestricted immigration from the European Union is in Britain’s national interest?

[The Deputy Prime Minister]

Being part of the single market, on which more than 3 million jobs in this country depend, is absolutely necessary to our national self-interest. The CBI, no less, has said that it is worth about £3,000 per household in this country. Turning our back on the idea of the world’s largest borderless single market would be an act of monumental economic suicide and it is something that I would never support.

[Mr David Hanson (Delyn) (Lab)]

T9. Does the Deputy Prime Minister agree with the Business Secretary that the net migration target is not helpful and will not be met?

[The Deputy Prime Minister]

The Conservative party has a long-standing aspiration to reduce net immigration to tens of thousands rather than hundreds of thousands. The Business Secretary was entirely right to point out that the Government need to be open with the British people about those factors in the immigration system over which the Government have control and those over which they do not. He rightly pointed out that the number of British people leaving Britain to live elsewhere, or those Brits living elsewhere coming back, is something that no Government can necessarily control.

[Mr Speaker]

I call Peter Aldous. Not here.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will the Deputy Prime Minister inform the Secretary of State for Business, Innovation and Skills that there are no promises from the Government to cut the number of migrants coming into the UK from the European Union?

[The Deputy Prime Minister]

I may have misheard the question. We are clear as a Government, across the coalition, that what we are delivering is a reduction by a third in the levels of net immigration. I very much want to see this happen more quickly, with the reintroduction of the exit checks that have been removed in the past and, generally, a firm but fair approach towards immigration that says that those people who want to come here and play by the rules, pay their taxes and make a contribution to this country are welcome to do so.

[Kerry McCarthy (Bristol East) (Lab)]

T12. Last January I asked the Deputy Prime Minister if he was ashamed of the shocking rise in food banks under this Government. He has had a year to come up with a decent answer, because I did not get one back then. Does he agree that it is a scandal that more than half a million people are now using food banks and, more importantly, what does he intend to do about it?

[The Deputy Prime Minister]

The hon. Lady might have prefaced her question with the observation that food banks increased tenfold in the years in which Labour was in office, but—as with so much else—amnesia settles on the Opposition Benches and they entirely forget their responsibility for the problems we have and many of the errors that we are correcting in government. We should pay tribute to people who work in food banks and make sure that they help the most vulnerable in society, rather than constantly seeking to make opportunistic political points to their cost.

[Martin Vickers (Cleethorpes) (Con)]

T13. At a meeting held last week between the chairman of the Humber local enterprise partnership and local MPs, the chairman briefed us on the successful conclusion and signing off of the Humber city deal. The meeting recognised that if the area is to meet its full economic potential, a number of major infrastructure projects will need to be carried forward. Can the Deputy Prime Minister give an assurance that the Government will work across Departments to ensure that that happens?

[The Deputy Prime Minister]

While my hon. Friend did not say so, I assume he is referring to the much- anticipated agreement on the Siemens investment in the area and other infrastructure projects. I can certainly reassure him that on the back of the Humber city deal, which was confirmed by the Minister of State, Cabinet Office, my right hon. Friend the Member for Tunbridge Wells (Greg Clark) shortly before Christmas, we are working across all Departments to ensure that where there are steps that we can still take as a Government to ensure that these investment projects are finally given the go-ahead, that should be the case as quickly as possible.

[Andy McDonald (Middlesbrough) (Lab)]

T15. Given the geographical imbalance in the economy, does the Deputy Prime Minister share the analysis of the Business Secretary that the way forward for expansion of airport capacity is to make more use of provincial airports, such as Durham Tees Valley, rather than continuing to stretch capacity in the south-east?

[The Deputy Prime Minister]

I certainly agree with the hon. Gentleman—I am sure everyone will—that we all need to work together to try to ensure that the profound geographical imbalances that have existed in the British economy for a long time are overcome. That can be done in any number of ways. Proper infrastructure investment is clearly needed, which is why, in my view, High Speed 2 will play such a galvanising role in healing the north-south divide. We need to liberate local areas, such as with the Tees Valley city deal, so that they can make their own economic fortunes rather than constantly being at the beck and call of decisions made in Whitehall; and we need to celebrate the fact that, unlike previous recoveries, we are seeing a broadly based recovery, not least in manufacturing in the north, as well as in the service sector heavily located in the south.

[Jason McCartney (Colne Valley) (Con)]

T14. With regard to the Heseltine report, does the Deputy Prime Minister agree that local leaders are best placed to understand the opportunities and obstacles to growth in their communities, whether that be in my part of West Yorkshire, or in relation to the Leeds city region local enterprise partnership, the Huddersfield “The Place to Make it” campaign or even the Calderdale and Kirklees Manufacturing Alliance?

[The Deputy Prime Minister]

I strongly agree. I think the fundamental insight from Lord Heseltine was one that we have ignored at our peril as a country for far too long: we have relied on a culture of government that has always assumed that Whitehall knows best. Whitehall does not always know best—I have certainly learned that after four years in Whitehall. The more we can allow local business leaders and local politicians to come up with locally innovative solutions, the better for our country in the long run.

[Mr Dennis Skinner (Bolsover) (Lab)]

When the Deputy Prime Minister kicked off this session, he said he supported the Government’s policies. I have to tell him, looking around the Chamber, that I do not think the leading Members of the Tory party are supporting him. They have not turned up. Three Tories have not even asked their questions. The only one who has been here all the time, the Chief Whip, is not a proper member of the Cabinet. Why can the Deputy Prime Minister not read the signs? The Government are disintegrating before our eyes. Why does he not do the decent thing and pack it in and let us have an early election?

[The Deputy Prime Minister]

I might ask: where is the hon. Gentleman’s deputy leader? I ask him to stop insulting the Chief Whip, who I consider to be a fully fledged member—[Interruption.] Stop denigrating the Government Chief Whip—very unfair on him indeed. Far from this Government disintegrating, we have continued steadfastly to clear up the mess left by the party of the hon. Member for Bolsover (Mr Skinner), to fill the black hole in our public finances, to give tax cuts to millions of people on low and middle incomes, to introduce the pupil premium, to increase apprenticeships on a scale never seen before, and finally to put this country economically back on the straight and narrow.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Yesterday, Robert Chote, the director of the independent Office for Budget Responsibility, said:

“Not very much has actually come from a reduction in social security spending as a share of national income.”

In the light of that, would the Deputy Prime Minister care to apologise to the Chancellor of the Exchequer for criticising the Chancellor’s excellent speech on welfare yesterday?

[The Deputy Prime Minister]

No, I will not do that because there is a sincerely held difference of view. I believe that if we are to complete the job of further fiscal consolidation we need to do what pretty well every mainstream economist in the world advocates, which is a mix of, yes, public spending restraint, welfare savings and fair taxes on those with the broadest shoulders. If the Conservative party chooses to do it all through further sacrifices by the working-age poor who are dependent on welfare, that is its choice. It is not a choice that my party has signed up to.

[Mr David Winnick (Walsall North) (Lab)]

Given that this Government have been waging war on the poorest and most vulnerable in our society, how much more is the Deputy Prime Minister willing to put up with? Is it what he came into politics for?

[The Deputy Prime Minister]

For an hon. Member who has been here so long, the hon. Gentleman’s questions are truly infantile. The most regressive thing to do is to shrug one’s shoulders, like the Labour party does, and say, “We can’t be bothered to fill the black hole we have left in the public finances. We’ll let our children and grandchildren do it.” There is nothing more infantile than doing what the Labour party is doing—going around pointing at things that are expensive, but never actually spelling out how much its own policies would cost.

[Dr Julian Huppert (Cambridge) (LD)]

There is much in this country that is archaic and out of date. For example, section 3 of the Treason Felony Act 1848 makes it an offence even to imagine—[Interruption.]

[Mr Speaker]

Order. I want to hear from the hon. Gentleman about the 1848 Act.

[Dr Huppert]

The Act makes it an offence even to imagine this country being a republic or to “overawe” Parliament. Will my right hon. Friend have a look at whether such archaic legislation can be repealed?

[The Deputy Prime Minister]

I will, of course, look into these provisions, following my hon. Friend’s entreaty, but I do not want him to hold his breath, thinking that in the latter stage of this Parliament our absolute priority will be the reform of the 1848 Act.

[Helen Jones (Warrington North) (Lab)]

Was the Deputy Prime Minister consulted on, and did he approve of, the Prime Minister’s plan to create 117 new peers, at a cost of £18 million, and how does that square with the Government’s promise to cut the cost of politics? Was it only elected politics they had in mind?

[The Deputy Prime Minister]

The Labour party stuffed the House of Lords year after year. More than that, we debated hour after hour how we could take all party leaders out of the equation and bring the British public into it by introducing a smidgeon of democracy in the House of Lords, and what did the Labour party do? Having lectured people for decades about the need to reform the bastion of privilege and patronage, when it had the chance to reform the House of Lords, it voted against it.

[Guy Opperman (Hexham) (Con)]

Mr Speaker—[Interruption.]

[Mr Speaker]

Order. We must hear Mr Opperman. [Interruption.] Order. Hexham must be heard.

[Guy Opperman]

Returning from planet Bolsover, devolution has been one of the successes of the coalition Government, and the city deal for Newcastle and the north-east local enterprise partnership are two of the finest successes in the north-east, but will the Deputy Prime Minister go one step further and consider expanding the city deal to a rural deal so that the most sparsely populated counties, such as mine in Northumberland, get the same opportunities as cities?

[The Deputy Prime Minister]

I welcome my hon. Friend’s comments and I strongly agree with him. At the end of this Parliament, we will have left England in particular significantly more devolved in how money and powers are allocated than it has been for a very long time. For instance, the devolution of business rates, which is often unremarked upon, is probably the greatest act of fiscal devolution for a very long time. I strongly agree that devolution should be not just an urban phenomenon, and at the heart of the local growth deals lies exactly the promise that city deals in urban areas will be extended to rural areas too.

The Attorney-General was asked—

[Nick de Bois (Enfield North) (Con)]

1. On how many occasions in the last 12 months he has referred a criminal sentence to the Court of Appeal for review because it was felt to be unduly lenient.

[The Attorney-General (Mr Dominic Grieve)]

From 31 December 2012 to 1 January 2014, the sentences of 67 offenders were referred as unduly lenient and have either been heard or are due to be heard by the Court of Appeal.

[Nick de Bois]

The will of Parliament was that the use of a knife in an aggravated fashion would carry a mandatory six-month jail sentence, but according to the latest statistics, the courts have imposed such a sentence in only half of all cases. Does the Attorney-General agree that perhaps these should be considered for appeal, and does he back Parliament’s will?

[The Attorney-General]

My hon. Friend may be aware that such cases are not currently referable. It is for Parliament to decide whether it wishes to extend and make referable those sentences. If Parliament’s will is that they should be, it is my job to consider that. It is worth bearing in mind that the principle enunciated originally was that only a small number of cases in specified and very serious offences would ever be referred. But there needs to be finality in sentencing and, of course, if many more cases are referred, that will place burdens both on the Court of Appeal in considering them and on my office in making the assessment of around 450 cases per annum.

[Valerie Vaz (Walsall South) (Lab)]

rose—

[Keith Vaz (Leicester East) (Lab)]

rose—

[Mr Speaker]

Ah! The vying Vazs. What a delicious choice. I call Valerie Vaz.

[Valerie Vaz]

Thank you, Mr Speaker and happy new year. Does the Attorney-General agree that, at the end of the day, it is for the judges who hear the evidence in a case to decide what the sentence should be?

[The Attorney-General]

The hon. Lady is quite right. We must rely on judges’ judiciousness in deciding what sentences should be. Occasionally there will be examples that are unduly lenient and fall within the specified schedule where I can make a reference. The object of the reference is not only to correct the particular sentence that has been passed but to try to lay down a good precedent for the future. It is noteworthy that we have referred fewer cases overall in the last 12 months than the 12 months before. That may be an indication of the extent to which the Sentencing Council is working to ensure consistency.

[Sir Paul Beresford (Mole Valley) (Con)]

What proportion of the 67 cases were for child sex abuse or child sex pornography in some form or other? Is the Attorney-General prepared to review the sentencing of those sorts of cases in terms of the sentences that are available?

[The Attorney-General]

My hon. Friend can be reassured that most of those cases will be referable and, indeed, I have referred such cases to the Court of Appeal. I am afraid that I cannot give him the statistics at the Dispatch Box but I will write to him with the statistics for the last 12 months.

[Keith Vaz]

As the Attorney-General has said, there are a number of very serious cases that cannot be referred. He says that that is a matter for Parliament. But will he take the initiative and start a consultation, allowing Members to put forward their views as to which offences should be subject to these reviews?

[The Attorney-General]

As the right hon. Gentleman will be aware, other offences have been added to the specified offences. In August 2012, we added trafficking people for exploitation. In May 2006, various offences under the Sexual Offences Act 2003, to which we have just referred, were added. Of course that is possible but, as I said in my first answer, we need to balance the need for finality and the need not to end up with a system where the Court of Appeal becomes the sentencing court for almost all offences. But if the right hon. Gentleman has examples that he feels need to be considered, I strongly urge him to write either to me or to my right hon. Friend the Lord Chancellor and those can undoubtedly be considered.

[Julie Hilling (Bolton West) (Lab)]

3. What recent assessment he has made of the options available to victims of crime who wish to complain about the performance of public prosecutors.

[Andy McDonald (Middlesbrough) (Lab)]

8. What recent assessment he has made of the options available to victims of crime who wish to complain about the performance of public prosecutors.

[The Attorney-General (Mr Dominic Grieve)]

Since the Crown Prosecution Service launched its new victims’ right to review scheme on 5 June 2013, victims have the right to request a review of a CPS decision not to prosecute in qualifying cases. The CPS feedback and complaints policy has also been revised to reflect the appointment of the independent assessor of complaints for the CPS. The VRR scheme was the subject of a consultation, concluded on 5 September 2013, and the CPS is considering the responses to the consultation with a view as to how best to operate the VRR scheme in the future.

[Julie Hilling]

There have been 600 requests from victims of crime to review prosecutors’ decisions to drop their case since the victims’ right to review was introduced six months ago. Given that level of demand, will the Government consider looking at widening the right to review to include decisions to caution instead of charge and decisions to alter substantially the original charge?

[The Attorney-General]

It might be worth while seeing first how the current changes, which are significant, operate in practice. The hon. Lady referred to the figure, which is 662, of which the determination was that the original decision was incorrect in, I think, 18 cases. There have also been cases referred to the independent assessor, where six have been upheld and three partly upheld. I am utterly pragmatic about this; I wish to see victims’ rights at the heart of the criminal justice system, but there are significant changes and we need first to see how well the system is operating and, in particular, how it will operate once the CPS responds in February to its consultation.

[Andy McDonald]

The Crown Prosecution Service is prosecuting fewer and fewer cases each year, and has been referred fewer cases to charge by the police. This suggests that more cases are being dropped at a stage in the criminal justice system where no right to review exists. Is the Attorney-General concerned by that?

[The Attorney-General]

The hon. Gentleman may be right, but there may be other explanations, one of which is that the noticeable fall in crime is leading to fewer cases coming to the police in the first place. I am obviously not answerable for the actions of the police who, as the hon. Gentleman will be aware, are in fact independent in the way they operate. They can be subject to judicial review, but certainly not to ministerial command. If the hon. Gentleman or indeed any hon. Member has examples where they think that the police decision-making process is not working properly, I would be most grateful if they brought them to my attention or indeed to that of the Home Secretary.

[Philip Davies (Shipley) (Con)]

Many people, not just victims of crime, have concerns about the performance of public prosecutors in court. Will the Attorney-General set out what inspections are made of public prosecutors in court and how many unannounced visits are made in order to assess the performance of the CPS prosecutors?

[The Attorney-General]

The Crown prosecutors who appear in court as advocates are monitored. Indeed, it is a rather more rigorous monitoring process than the one available, for example, for the independent Bar that does their work. I would be happy to write to my hon. Friend with further details of how this monitoring is carried out. The previous Director of Public Prosecutions, Keir Starmer, made a very particular point in the first year that I was working with him in carrying out an extensive review of the performance of Crown prosecutors. This is monitored and it is also the subject of inspections by the Crown Prosecution Service inspectorate. There are published reports on the quality of the advocacy being delivered.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Now that wasted cost orders are no longer available in legally aided cases awarded against the Crown, how can accountability be enforced against Crown prosecutors who have plainly not only wasted the court’s time, but let down the criminal justice system, which includes victims?

[The Attorney-General]

First, if there is adverse publicity in respect of prosecutors not doing their jobs properly, that is a matter of very serious concern to me and should and would be a matter of serious concern to the Director of Public Prosecutions. That provides some sanction in itself, quite apart from the fact that I have to answer for the work of the Crown prosecutors once a month in this House.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The day after we saw barristers and solicitors withdrawing their labour in the teeth of the cuts to legal aid, what is the Attorney-General doing to try to improve the efficiency of the Crown Prosecution Service? When I was a witness just over a year ago, I saw at first hand the inefficiencies and time wasted—for victims, witnesses and prosecutors—in the system. With these stringent cuts, that should surely be an area in which to look for efficiencies.

[The Attorney-General]

The hon. Lady will be aware that we are seeking to introduce many efficiencies into the system, including digital working, early guilty plea systems and better warning of witnesses. Some of those are in the hands of the Crown Prosecution Service, but others, as she will appreciate, are not. They lie with my right hon. Friend the Lord Chancellor and the Court Service. There is a great drive for efficiency: efficiency delivers savings and in a time of austerity, there is no doubt that improving the efficiency of the Court Service and of the throughput of the criminal justice system is one of the highest priorities—both for me and, I know, for the Director of Public Prosecutions.

[Dr Julian Lewis (New Forest East) (Con)]

Can anything be done to rectify a perceived imbalance in criminal cases where the person on trial has direct access to the barrister who is representing him while the victim, as a witness, has no direct access to the prosecutor? Victims sometimes feel that their case is not as fully understood by the prosecutor as it should be. Can anything be done about that?

[The Attorney-General]

There are limits to what is feasible, although it is also right to say to my hon. Friend that the previous practice, whereby the prosecuting counsel could have no contact whatever with the witness, is now at an end. There is now an opportunity for an introduction and an explanation of how the court process is likely to develop, which I think is a great improvement. That said, there should be no suggestion that a witness is being coached, which my hon. Friend will appreciate could undermine a prosecution case. Those two things have to be balanced. A point that was always made to me when I prosecuted was the absolute necessity of informing witnesses, introducing oneself to them and keeping them informed within the bounds of propriety and the court process about what is actually going on, including talking to witnesses who turn up to find that they are not needed because the defendant has pleaded guilty. It is important to explain that to them.

[Julie Elliott (Sunderland Central) (Lab)]

4. If he will take steps to ensure that the causes of the recent decline in prosecutions for rape, child abuse and domestic violence are investigated.

[Susan Elan Jones (Clwyd South) (Lab)]

7. If he will take steps to ensure that the causes of the recent decline in prosecutions for rape, child abuse and domestic violence are investigated.

[The Solicitor-General (Oliver Heald)]

In September the former Director of Public Prosecutions, Sir Keir Starmer, chaired a meeting with the Home Office and national police leaders, the outcome of which was a six-point action plan to investigate and increase the number of rape and domestic violence cases that are referred by the police to the CPS for charging decisions.

[Julie Elliott]

What recent discussions has the Solicitor-General had with Home Office Ministers about the fall in the number of referrals of rape, domestic violence and child abuse cases to the CPS?

[The Solicitor-General]

I have not engaged in any specific bilateral discussions, but I am a member of a number of Government committees that discuss these matters, including the committee that deals with violence against women and girls. There are falls in the number of referrals, which the six-point action plan is addressing, but it is worth pointing out that the rates of convictions for domestic violence, rape and child sex abuse are at record highs.

[Susan Elan Jones]

What has been the impact of the closure, under the present Government, of 38 out of 39 joint police-CPS offices nationwide on the close co-operation between police and prosecutors that is so vital in relation to this very sensitive subject?

[The Solicitor-General]

I agree that close co-operation between the police and the Crown Prosecution Service is important. As the hon. Lady will know, there are rape and serious sexual offence units that are combined. However, there are advantages in a more efficient system and a cluster of excellence in the CPS, and the view is that, on balance, the way in which the system is currently developing is more efficient and effective.

[Tim Loughton (East Worthing and Shoreham) (Con)]

I congratulate my right hon. and learned Friend the Attorney-General on the progress that has been made in ensuring that the court process is less traumatising for victims, especially victims of child sexual exploitation. The greater profile that is now given to some of those cases is a sign of that success.. However, will my hon. and learned Friend tell me what work he is doing with, in particular, children’s charities and child protection professionals with the aim of communicating to some of the victims the information that the court process is now less traumatising and more user-friendly, so that more of them will be encouraged to take their cases all the way to court and appear as witnesses, rather than being scared off and allowing the perpetrators to get off?

[The Solicitor-General]

The inter-departmental committee on violence against women and girls, which I mentioned earlier, is involved with representatives of various organisations who attend its meetings, so there is that connection. The new guidelines on child sex abuse that were issued last October are intended to bring about a big change in the way in which such cases are dealt with. They recommend an holistic approach and consideration of the credibility of the allegation rather than just the credibility of the witness, and I think that that will help a great deal.

[Dr Julian Huppert (Cambridge) (LD)]

In July 2012, Canadian police closed a child abuse network. They released hundreds of children and passed 2,345 names of suspects to British police, who then did absolutely nothing for 16 months. What assessment has the Solicitor-General made of the effect that that has had on the number of successful prosecutions?

[The Solicitor-General]

The way in which the police investigate cases is independent. The hon. Gentleman could raise it with the Home Secretary, but it is not dealt with by the Crown Prosecution Service. The new CPS guidelines constitute a major step forward, as do the new national network of rape and child sex abuse prosecutors, which provides a source of expertise on such offences in each area. That will lead to more effective prosecutions.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

One of the reasons for the decline in the number of prosecutions for child abuse is that the police are not referring as many cases to the Crown Prosecution Service despite the fact that the numbers remain constant, but the other major factor is that local authorities are not co-operating with the Crown Prosecution Service. Was the Minister as shocked as I was to discover that in the past three years two thirds of councils have refused to disclose information to the police and to the CPS in child abuse cases? Does he think in future he should monitor this, rather than leave it to me, through the Freedom of Information Act, to discover that information, and will he consider making disclosure compulsory in future if this situation does not improve?

[The Solicitor-General]

In fact, the Attorney-General and I have been concerned about this issue and as a result Her Majesty’s inspectorate of the CPS has undertaken a report on disclosure, which was published recently. It is a matter that needs to be addressed. Having said that, the new protocol and the way in which the various authorities are coming together on this is encouraging. [Interruption.] The hon. Lady says something from a sedentary position which I cannot hear, but I assure her that all efforts are being made—

[Emily Thornberry]

I said they are not coming together.

[The Solicitor-General]

I do not want to get into pantomime mode and say, “Oh yes they are,” but the fact of the matter is that considerable progress is being made.

[Mr Marcus Jones (Nuneaton) (Con)]

5. What steps the Crown Prosecution Service is taking to increase the rate of successful prosecutions of cases of online stalking and harassment.

[The Solicitor-General (Oliver Heald)]

The CPS has published guidance for its prosecutors on stalking and harassment cases and on prosecuting cases involving communications sent via social media. In addition, all prosecutors must complete an online e-learning course on cyber-stalking, non-cyber stalking and harassment.

[Mr Jones]

Will my hon. and learned Friend help reassure victims of stalking and help prosecutors by setting out exactly what training and guidance is being brought in for the CPS following the Government’s implementation of the new tougher stalking offences?

[The Solicitor-General]

Yes, I am happy to do that. My hon. Friend will recall that just over a year ago the Protection from Harassment Act 1997 amendment provisions dealing with stalking and with stalking leading to fear of violence and alarm and distress were introduced. Since that time new guidance has been brought forward dealing with the way in which such offences are to be identified and with harassment, and also specifically how they should be dealt with if they involve the social media. Some 438 cases have been prosecuted so far under the new law. That figure is not necessarily too low given that we are at a very early stage, but it is important that this should be driven forward so a joint protocol is being produced by the CPS and the Association of Chief Police Officers. That is due in spring 2014 and it will set out in more detail how both sides of the criminal justice service should perform.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Those of us who campaigned for the new law are disappointed in as much as we now have evidence of under-charging by the CPS using the old 1997 Act as it was, and also, regrettably, many Crown prosecutors have not been sufficiently trained to implement the new law. Will the Minister please have a word with the Director of Public Prosecutions and ensure this is put right, because otherwise we will be failing many thousands of people?

[The Solicitor-General]

May I start by paying tribute to the right hon. Gentleman and his all-party group on their work in this area? These two new offences, which were introduced just over a year ago, are an important step forward. It is too early to say whether it is disappointing that the number of offences so far charged is 438 rather than a higher figure, because we want to see how this goes forward from here, but there is no lack of drive or push in trying to deal with these offences, which are horrific and require a very firm approach, and I think this joint protocol will certainly help. If the right hon. Gentleman wants to discuss it with me, I will be more than happy to do so.

[Robert Flello (Stoke-on-Trent South) (Lab)]

6. What steps he is taking to promote awareness of the laws on contempt of court among users of social media.

[The Attorney-General (Mr Dominic Grieve)]

The media and those who publish information on social media sites should always be alert to the requirements of the Contempt of Court Act 1981. In December I announced that in future, if appropriate to do so, advisory notices that I issue for specific cases will be published on the Government UK website and my office’s Twitter feed as well as being issued to mainstream media. These advisories will not take the form of general guidance, but there will also continue to be some information on contempt available on our gov.uk website and this has been updated today. Providing advisory notices to the wider public on a case-by-case basis will, I hope, ensure greater awareness of the law of contempt and its applicability to both the mainstream media and users of social media and help prevent people from inadvertently committing a contempt of court.

[Robert Flello]

I am grateful to the Attorney-General for that response. Do the Government plan to follow the Law Commission’s recent recommendations on contempt of court, which include the introduction of a new statutory offence for jurors who google extraneous information relating to their case?

[The Attorney-General]

I have read the Law Commission’s report and proposals with great interest, and I am taking them very seriously. They are an extremely important contribution to how we might be able to improve matters.

[Several hon. Members]

rose—

[Mr Speaker]

Order. We must move on.

European Council

Tuesday 7th January 2014 Commons Chamber

12:35

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

(Urgent Question): To ask the Prime Minister if he will make a statement on the European Council meeting of 19 and 20 December 2013.

[The Minister for Europe (Mr David Lidington)]

I have been asked to reply. The European Council focused on three things: defence; economic and monetary union; and EU enlargement and association agreements. On defence, the Prime Minister made it clear that NATO would remain the bedrock of our national defence. As a result of United Kingdom lobbying, NATO’s Secretary-General Rasmussen was invited to attend and address the Council as a symbol of the importance of the European Union’s efforts, which complement rather than duplicate the role of NATO in our collective security. It is right for European countries to co-operate on defence issues such as tackling piracy, and this country has consistently supported other European allies, including the French efforts in Mali. However, it is important that defence co-operation is driven by nations themselves, on a voluntary basis, according to their own priorities and needs, and not by the Brussels institutions.

My right hon. Friend the Prime Minister ensured that the conclusions excluded any ambiguous language or proposals that could lead to new bureaucracy, new EU institutions or increased EU competence on defence and security matters, including any ambitions to own dual-use capabilities such as remotely piloted air systems. The conclusions of the Council were clear that nations, not the EU institutions, were in the driving seat of defence policy and would remain there.

On economic and monetary union, the United Kingdom is not in the eurozone and will not be joining the euro, but we want our trading partners in Europe to have a strong and stable currency and we support their efforts to achieve that, provided that Britain’s interest are properly protected. My right hon. Friend ensured that there would be no financial liability for this country from banking union or from any future euro area mechanism of loans or guarantees for eurozone countries The conclusions also reiterate the importance of making the EU more competitive, including cutting red tape for business.

On enlargement and association agreements, the European Council welcomed the initialling of association agreements with Moldova and Georgia, and made it clear that the EU’s offer to Ukraine remained open. The United Kingdom has long supported enlargement because the prospect of EU membership has proved a huge driver for peace, prosperity and reform across our continent. My right hon. Friend made it clear that he continued to support enlargement and saw it as one of the European Union’s greatest strengths. At the same time, however, he argued that when new countries join the EU in future, we should look again at the transitional arrangements for the free movement of workers. He argued, too, that the free movement of workers was different from the free movement of people seeking the best benefit deal. Other member states share our concerns about this matter, and we look forward to continuing those discussions over the coming year.

[Ms Stuart]

Delightful as it is to see the Europe Minister here today, it is the Prime Minister who is meant to make statements following European Council meetings. Why is the Prime Minister not here today? If he has a good excuse for not being here today, why could he not have made a statement yesterday? Is it now Government policy not to make statements following European Council meetings, even though the House has observed that practice for many years? It would be particularly regrettable if that were the case, given that we no longer have pre-Council debates.

Does the Minister think, on reflection, when he reads the written ministerial statement, that even if the Prime Minister had to make such a statement, the one published in Hansard is not brief, but tawdry? It really is quite an insult, particularly when compared with the official Council conclusions. The written statement makes it clear that there will be no EU ownership, no EU headquarters, no reference to Europe’s armed forces, no European pooled acquisition mechanisms, no EU assets and fleets, no EU drones and no EU air-to-air refuelling tankers. Of course, that leaves one to wonder what there will be, given that this meeting was the first since the Lisbon treaty came into force where the Council had a themed debate focusing on defence.

How does the Government’s statement square with the Council conclusions, which say:

“The European Council remains committed to delivering key capabilities and addressing critical shortfalls through concrete projects by Member States, supported by the European Defence Agency.”?

Given that whole list of noes, including on the institutions, what is the role and function of the European Defence Agency? Similarly, given that there are meant to be no EU drones, what are we to make of the Council conclusion that we remain committed to a 2020 to 2025 time frame for the

“preparations for a programme of a next-generation European Medium Altitude Long Endurance RPAS; the establishment of an RPAS user community”

group and European Commission regulations on that?

The Council conclusions also state:

“The European Council welcomes the Commission communication ‘Towards a more competitive and efficient defence and security sector’. It notes the intention of the Commission to develop, in close cooperation with the High Representative and the European Defence Agency, a roadmap for implementation”

of a more co-ordinated defence industry. Will the Minister comment on the clear contradiction between the written ministerial statement and the conclusions?

I have two final points to make. First, how does the statement square with the French Prime Minister’s demand for the setting up of a permanent fund to finance operations such as France’s operation in the Central African Republic? Secondly, did the Prime Minister have any discussions with the new German Defence Minister, Ursula von der Leyen, who until that point had been personally very deeply committed to a united states of Europe?

[Mr Lidington]

First, I am grateful for the hon. Lady’s words of welcome. Let me respond to her first question by reminding her that since May 2010 my right hon. Friend the Prime Minister has made no fewer than 18 oral statements here following Councils that took place while Parliament was sitting—that is double the number of such oral statements given by his immediate predecessor. It has been the practice of successive Governments not to make an oral statement following Councils taking place during a recess, and my right hon. Friend therefore made a full written ministerial statement on Monday, which set out in detail the key outcomes from this Council.

On the hon. Lady’s important points about common security and defence policy, the key is to understand the distinction between ownership by the EU of defence capabilities, which we do not support and have resisted successfully, and co-operation by European countries in providing greater defence and security capabilities. What was good about the conclusions both of the December European Council and of the previous week’s Foreign Affairs Council on CSDP matters was that they made it very clear that the EU first had to work with, and not duplicate, the efforts of NATO and work alongside other partners in different parts of the world. Secondly, they made it clear that the EU would look for ways in which to encourage co-operation on capabilities, for example, on drones, which she mentioned. That is not some new EU-directed operation, but a facility that individual members of the EU can decide whether or not to take part in. There is no secret plan to direct some Euro drone out of the Berlaymont; it is very different. It is about co-operation between willing member states.

On the defence industry point, the conclusions made it clear that the European defence sector needed to become more competitive and efficient. The language that we successfully negotiated makes it clear that rather than there being any question of European national champions, the defence sector must comply with European law, which means that there must not be illegal state subsidies, except where subsidies are explicitly protected under the treaties. The language also makes it very clear that we, or indeed any other country, are not in any way constrained from continuing to work with the United States or other international partners on our defence industries. When the hon. Lady comes to look in more detail at the conclusions, I hope that she will agree that it was a good outcome for the United Kingdom and a successful negotiation.

[Mr William Cash (Stone) (Con)]

This morning, the European Scrutiny Committee cross-examined the Minister for Europe on these issues. I have written to the Prime Minister accordingly in relation to the fact that he is not here today, as he should be and as our Committee recommended in our recent European scrutiny report. The substantive matter is that, on the one hand, the Prime Minister did say in his press statement that defence must be driven by the nations and not by Brussels diktat, but, on the other, Mr Van Rompuy states that we must have credible European scrutiny and

“a strong, credible, common security and defence policy”.

He also suggests that there is a greater role for European defence. Does my right hon. Friend agree that it is impossible to compare and to reconcile those different approaches given that there is an ever-increasing competence towards European defence irrespective of what the Minister has just said?

[Mr Lidington]

On my hon. Friend’s first point, I am aware that he has written to the Prime Minister about the matter of oral statements. There is of course that recommendation in his Committee’s report. I am sure that my right hon. Friend will reply to the letter. For the record, I repeat the Government’s commitment to give their full detailed response to the European Scrutiny Committee’s report in due course, and I pledge to do that as soon as we are able.

On his point about CSDP matters, I do not agree with him. I, too, want to see a European arm of the Atlantic alliance that is more credible and effective than it is at the moment. That is certainly a message that I hear consistently from the other side of the Atlantic as well. But there is a difference between that and the European Union and its institutions owning and directing those policies. What we support and advocate is a system in which European countries take more seriously their obligations to deliver effective security and defence contributions to that trans-Atlantic alliance, and that is where the conclusions of the European Council represented a clear victory for our vision. It advocated an emphasis on capabilities and political commitment, not on new EU institutions and not on the EU ownership. Rather, it insisted on the EU complementing NATO and working with the grain of member state responsibility and competence over defence policy.

[Chris Bryant (Rhondda) (Lab)]

I rather agree with much of what the Minister has said and congratulate him on being a rather fine Minister for Europe in that he does not subscribe to some of the looney-tunes ideas proposed by some of the people sitting behind him. May I ask him about the European Council and whether there was any discussion about who will be the new British commissioner? The European Parliament will get to have a view, so should not this House get to have a view on who the next British commissioner should be?

[Mr Lidington]

The straight answer to the hon. Gentleman’s question is that there was no discussion by this country or any of the other member states of who their nominee might be later this year. That is a matter, as always, on which the Government will come to a view and we will nominate a man or woman in due course. I must advise the hon. Gentleman to be patient for a bit longer.

[Sir Nick Harvey (North Devon) (LD)]

I commend the Government on successfully resisting the idea of EU-owned military assets or capabilities and underline the support of the Liberal Democrats for European co-operation in defence to be based on nation states putting their forces into joint operations when appropriate, which works very well with the naval counter-piracy mission and various land operations in Africa. Given that the US is rebalancing its defence efforts to the Pacific and is taking 20% of its defence spend out of Europe, is it not more important than ever that the 28 member states of Europe should share their capabilities and expertise where possible to ensure the best possible return on limited investment?

[Mr Lidington]

I agree with my hon. Friend’s points. One thing that the habit of working together on security and defence matters through the EU does is enable us to bring in those countries that are members of the EU but are not, for historical and constitutional reasons, allies of ours in NATO. The very fact that Secretary-General Rasmussen not only spoke at the summit but warmly welcomed its conclusions as pointing the way towards a more effective European arm of defence that complemented and supported what NATO was doing should give us all confidence.

[Kerry McCarthy (Bristol East) (Lab)]

I thank my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) for securing the opportunity to discuss this issue in the Chamber today and I share her regret that the Prime Minister broke with precedent by not appearing in person to answer her question.

Let me first touch briefly on the banking union. We welcome the progress that has been made, but what discussions were had during the summit to ensure that the European Central Bank’s risk assessments, which are due to be conducted later this year, will be sufficiently rigorous?

On migration, I welcome the Prime Minister’s statement that there will be further discussions on the

“need to find a better approach to tackle free movement abuse”

at an EU level. As we in the Opposition have said before, we need to reform the way free movement works so it is not seen as a part of a race to the bottom in the world of work. This means looking again at the transitional controls, including extending them over longer periods so that when new countries move into the European Union we learn the lessons from the past. With the recent lifting of transitional controls on Romania and Bulgaria, will the Minister set out what steps the Government are taking to address practical problems around those who exploit migrant workers to undercut local businesses and staff? EU reform will be achieved through building alliances for change among other EU member states rather than escalating rhetoric and alienating allies, so can the Minister set out who will be leading the negotiations on any proposed EU reform agenda on behalf of the Government?

The summit should have been a vital opportunity to build coalitions to secure the changes that must be made in Europe for Britain yet, once again, it seems the Prime Minister viewed it as merely providing the opportunity for securing headlines rather than securing change.

[Mr Lidington]

The hon. Lady is being unusually churlish. If she looks again at the Council’s conclusions, she will see that we not only managed to secure important and positive British interests that take the development of the common security and defence policy in the direction that the UK has long advocated, but—and she omitted to mention this in her question—we secured key safeguards on the operation of the banking union to ensure that the taxpayers of this country are not liable for the consequences of any solvency decision made by our eurozone colleagues. The Opposition might have had the grace to pay tribute to what the Prime Minister achieved; otherwise people might come to think that the Opposition are somehow dismissive of the interests of British taxpayers and of safeguarding them against such liabilities.

The hon. Lady asked directly about the safeguards that the Government were putting in place for people who might be exploited if they came here from other parts of the EU or elsewhere in the world. I can reassure her that the Government are doubling the fine for people who employ illegal workers and quadrupling the fine for paying people below the statutory minimum wage. Under the previous Labour Government, the fine for paying somebody below the minimum wage was £5,000 per employer. Under this Government, the fine will be £20,000 per employee, not per employer. When it comes to the protection of exploited workers, the Opposition’s record does not give them anything of which to be proud.

[Sir Gerald Howarth (Aldershot) (Con)]

I warmly welcome the Prime Minister’s repeated assertion that NATO remains the cornerstone of the defence of the United Kingdom and, of course, of western Europe. However, may I put it to my right hon. Friend the Minister that the observations made by the hon. Member for Birmingham, Edgbaston (Ms Stuart) and my hon. Friend the Member for Stone (Mr Cash) illustrate that there is no reduction in the enthusiasm of some of our continental partners about creating an EU defence identity in conflict with NATO? Should not those countries be working within NATO to strengthen NATO’s capabilities as the United States inevitably reduces its interest in Europe in favour of the Pacific? I remind my right hon. Friend that we have a veto on defence matters in the EU and I hope that he will ensure that that is maintained.

[Mr Lidington]

Yes, we not only have a veto but we have legislated in the European Union Act 2011 to require a referendum were anybody to propose that that veto be lost and that we should move to a system of qualified majority voting instead. Those safeguards, thanks to this Government, are written into law. If my hon. Friend looks again at the detail of the language in the European Council and Foreign Affairs Council conclusions, he will see a welcome emphasis on the need for the EU to complement NATO and the importance of capabilities. The issue of an EU operational headquarters, which was the cause of a rancorous debate 12 months ago, was not even pursued this year. That is evidence that we are winning the argument on the direction in which the European CSDP should go.

[Angus Robertson (Moray) (SNP)]

On the question of European enlargement and immigration, I pay tribute to the overwhelming majority of citizens from elsewhere in the European Union who, in my constituency in Scotland and in the rest of the UK, work hard, pay their taxes and are a benefit to society. Will the Minister take the opportunity to confirm that more than 2 million UK citizens live elsewhere in the European Union, and that the Department for Work and Pensions is right in confirming that the percentage of benefit claimants in the UK is significantly lower among EU nationals than among UK citizens?

[Mr Lidington]

Statistically, as far as I am aware, the hon. Gentleman is right on that point, although of course it in part reflects the fact that the majority of people from elsewhere in the EU who are here are of working age and not retired and in receipt of pensions, so it is not an exact comparison. I very much agree that we should acknowledge that the great majority of people from other EU countries who come here do so to work, to pay taxes and to contribute to society, but that does not mean that we should dismiss the cases in which there is evidence that people have either tried to exploit our benefits system or have engaged in organised or perhaps low-level but still very antisocial crime. It is right that action is taken to tighten up access to benefits and free public services in the way that the Government are proposing. That is important in order to maintain public support and confidence for the principle of free movement of workers—and workers alone.

[Mr James Gray (North Wiltshire) (Con)]

I, too, welcome much of the language used by the Prime Minister at the time of the Council and by my right hon. Friend in the early part of his statement indicating our opposition to a move towards European stand-alone defence capabilities of any kind. However, I also very much share the scepticism voiced particularly by the hon. Member for Birmingham, Edgbaston (Ms Stuart) as to whether this is for real. Surely my right hon. Friend agrees that if defence and foreign affairs are the primary and exclusive role of nation states, now is the time to start moving towards abolishing the CSDP, not praising it as he has done.

[Mr Lidington]

No, I do not agree. I think we should look to the CSDP within the European Union as we look to our co-operative defence and security arrangements, bilaterally with other European countries and with countries elsewhere in the world, as mechanisms by which we can enhance and strengthen the United Kingdom’s security and defence and take forward our global security objectives. Provided that that is done in the right way without the accretion of new powers to EU institutions or the establishment of new EU institutions, then we can succeed in benefiting from sensible, pragmatic co-operation between willing European countries in a way that strengthens the transatlantic alliance as a whole and our national security.

[Kelvin Hopkins (Luton North) (Lab)]

The Minister made reference to economic and monetary union. It is clear that a number of countries have suffered terrible economic experiences as a result of membership of the eurozone. Eurozone membership is now having a deflationary impact in France, and its economy is definitely going in the wrong direction. Has there been any discussion about the likely longer-term implications of France suffering the same kind of experiences as other countries in southern Europe?

[Mr Lidington]

It is for French Ministers to defend French economic policy, including membership of the euro. I am very glad that the United Kingdom remains outside the euro and has no intention of joining it, and that this Government have introduced a statutory referendum lock against any future prospect of our doing so. However, in all my conversations with ministerial colleagues from those countries that have elected to join the single currency, their political commitment remains very strong, and we have to respect the sovereign decisions that they have taken.

[Andrea Leadsom (South Northamptonshire) (Con)]

Will my right hon. Friend confirm once and for all that, notwithstanding what Labour Members say about the value of immigrants to this country and the fact that they claim fewer benefits than the indigenous population, it is perfectly right and legitimate for British taxpayers to be concerned about the speed and rate of immigration, particularly under the previous Government, and that we are therefore right to be doing something not only about reducing immigration overall but specifically about the unintended consequences of free movement of labour? What is his assessment of Angela Merkel’s decision to hold an inquiry into the unintended consequences of free movement, and does he think that that will give us the opportunity to sort out a sensible solution that works for the British taxpayer?

[Mr Lidington]

We need to do two things. First, we need to make sure that our law and European rules distinguish clearly people who want to travel in order to work or who are genuinely able to support themselves, from those who are not able to do so—a principle of free movement to work that benefits a large number of United Kingdom citizens as well as people from other European Union countries. Secondly, when we come to look towards future enlargement of the European Union—we are some years away from any other country being ready to join the EU—we need to revisit the issue of transitional controls and ask ourselves whether simply having a specified, perhaps somewhat arbitrary, number of years after which all controls come off is the right way to address the issue. My right hon. Friend the Prime Minister alluded to that and started a debate on it in his article in the Financial Times just before Christmas. On that matter and on the relationship between freedom of movement and the benefits system, we are indeed looking forward to taking discussions forward over the next year, not only with our German colleagues but with other member states.

[Keith Vaz (Leicester East) (Lab)]

I have known the Minister for Europe since he was 20 years of age, and he has always been very cheerful and talented, but I am afraid he is not a substitute for the Prime Minister. I agree with the hon. Member for Stone (Mr Cash) and my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart): this is a European Council statement that ends the Lithuanian presidency and begins the Greek presidency, and it ought to have been given by the Prime Minister as soon as the House sat yesterday.

Is it now the policy of this Government to veto enlargement unless we have agreement on transitional arrangements? What exactly are we providing under presidency conclusion 41? Are we giving additional support to countries such as Greece?

[Mr Lidington]

I will have to advise my right hon. Friend the Prime Minister to divert his flight to Luton airport when he next comes back from a Council meeting so that he can be sure of seeing the right hon. Gentleman in person.

I refer the right hon. Gentleman to what I said earlier, which is that when Parliament has been in recess during a European Council, successive Governments have followed the practice of giving a full written ministerial statement rather than an oral statement. His strictures should therefore be as much directed against the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) as against my right hon. Friend the Prime Minister. In his time as Prime Minister, my right hon. Friend has given twice as many oral statements on EU summits as his immediate predecessor, so I do not think he has anything to apologise for.

[Jacob Rees-Mogg (North East Somerset) (Con)]

My right hon. Friend is very precise in his language—he is a model for a learned lexicographer. I wonder therefore how he might construe this phrase in the conclusions of the Council of Ministers on the CSDP that was endorsed by the European Council, which says that the EU is

“to engage in all domains—land, air, maritime, space and cyber.”

How does that equal his assurance that what will be done will be mainly intergovernmental?

[Mr Lidington]

I take my hon. Friend’s description of me as a compliment, though I recall that Dr Johnson described a lexicographer as “a harmless drudge”—if I remember the quote from his dictionary accurately.

The answer to my hon. Friend’s question is that we must again go back to the distinction between a policy that is directed by and owned by the EU collectively and its institutions, which we do not have, and a broad policy on security and defence that rests on free co-operation between willing national Governments working together so that their capabilities complement one another, and working in partnership particularly with NATO but with other partners around the world as well. There is nothing to fear from the latter version of the common security and defence policy, and that is the version embodied in the European Council conclusions.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

In advance of the summit, the Prime Minister made great play of new rules regarding access to benefits for EU migrant workers. What proportion of claimants for working-age benefits are made up of EU migrant workers?

[Mr Lidington]

As my right hon. Friend the Secretary of State for Work and Pensions has said in this House before, one of the difficulties we have had is that the previous Government chose not to collect statistics for social security benefits categorised by nationality of claimants. He and his team at the DWP are now changing that, and I am sure that they will produce those figures in due course, but they do not exist for the period of years that the right hon. Gentleman wants, because his Government did not bother to collect them.

[Mr John Baron (Basildon and Billericay) (Con)]

I suggest that the vast majority of immigrants come here for work and not for benefits. Nevertheless, as the Prime Minister suggested at his press conference after the Council meeting, if not during it, the issue of migration needs to be addressed. Will the Minister enlighten the House on how the Prime Minister proposes to move this issue forward in negotiations with his EU partners, given that this is a fundamental right and freedom which might require treaty change by all members?

[Mr Lidington]

We are at an early stage of those discussions. As my right hon. Friend the Prime Minister made clear when he wrote for the Financial Times just before Christmas, he wants to start a debate about how we should manage these matters better in the future. As my hon. Friend the Member for Basildon and Billericay (Mr Baron) knows, this subject causes concerns, particularly among Interior Ministers and Social Security Ministers in a number of different European countries. The conversations are being taken forward by my right hon. Friends the Home Secretary, the Secretary of State for Work and Pensions and, of course, the Prime Minister. We are at an early stage, but we will be taking the discussions forward over the next 12 months.

[Sammy Wilson (East Antrim) (DUP)]

Conclusion 36 indicates that the Council is calling for further discussions on tax evasion, aggressive tax planning, base erosion and so on. Does that include changes in EU regulations which currently permit workers posted to the UK for less than two years to avoid paying tax here and to opt to pay tax in their own country while still being eligible for benefits in the United Kingdom?

[Mr Lidington]

I think the appropriate Minister will have to write to the hon. Gentleman about the particular issue he mentions about posted workers. The key point about the conclusion on tax is that it is part of taking forward the G8 agenda on tax transparency that the Prime Minister led at the Enniskillen summit last year.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

If EU defence is really just harmless intergovernmentalism, why do we have directives that have the force of law in the field of defence? Why do these conclusions include invitation after invitation for the Commission, which is not an intergovernmental institution, to lead on initiatives? Why are we still in the European Defence Agency, which contains expensive provision for qualified majority voting on defence? Is not my right hon. Friend becoming somewhat blind to the fact that we are moving towards a federal defence policy and a European army? He is in denial.

[Mr Lidington]

My hon. Friend is mistaken in his analysis of the EDA. The Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne), who has responsibility for defence procurement, took a very hard line and successfully won a flat-cash settlement for the EDA this year. We held out and it required unanimity for that budget to be agreed. It is simply not the case that we can be overridden by a QMV vote.[Official Report, 15 January 2014, Vol. 573, c. 11MC.]

The Commission has a role under the treaties with regard to industrial policy and, of course, the operation of the single market. However, the single market as regards defence is qualified in the treaties by articles that make it clear that certain matters are reserved from normal single market arrangements because they are critical to national security. Embodied in the European Council conclusions is a very clear direction from all 28 Heads of State and Government that the Commission should stick to what is given under the treaties, that there should be no attempt at competence creep and that there should be no move towards national European champions or a circumvention of the freedom of member states to strike sensible defence partnerships with countries outside Europe, and instead that the Commission should work on ways to make Europe’s defence industries more competitive and its defence markets more open in a way that, incidentally, would provide great opportunities for the United Kingdom’s first-class defence suppliers. That move towards greater openness in areas of defence procurement is something that United Kingdom companies have been pressing Ministers to achieve.

[Wayne David (Caerphilly) (Lab)]

The conclusions of the European Council state:

“The European Council welcomes the signature this week of the biggest ever single EU humanitarian financial allocation”

to Syria. Why did the Prime Minister not make any reference to that in his written statement? Indeed, why has the Minister not mentioned it in his response this afternoon?

[Mr Lidington]

There is a lot in the European Council conclusions. I do not think it would serve a huge purpose if a written statement simply rehearsed every single item when there is a link in the statement on the Council conclusions to the full text itself. I am also somewhat constrained—quite properly—by the time permitted to respond to the urgent question asked by the hon. Member for Birmingham, Edgbaston (Ms Stuart).

The hon. Member for Caerphilly (Wayne David), however, is right: this was a very important breakthrough. There was a commitment by all 28 Heads of State and Government for European countries to do more to help people in Syria who have been displaced and are in need and those who have taken refuge in neighbouring countries who face huge problems. What is also needed—we have supported the efforts of other EU countries on this—is some declaration, if we cannot get a resolution, at the United Nations Security Council to provide safe passage for humanitarian organisations to reach people in Syria who are in desperate need and find it impossible to get access to the aid available.

[Mr James Clappison (Hertsmere) (Con)]

My right hon. Friend the Prime Minister has undoubtedly won some crucial victories in our national interest, in the face of the unremitting efforts of the Brussels institutions to fulfil ambitions that are set out in the treaties for all to see, including that of having a European army. Sadly, there are some new commitments in the conclusions, including one in paragraph 9 for

“an EU Maritime Security Strategy by June 2014, on the basis of a joint Communication from the Commission and the High Representative, taking into account the opinions of Member States”.

Is that not precisely a case of the Brussels institutions being in the driving seat and an open invitation for them to indulge in more competence creep?

[Mr Lidington]

The maritime security strategy is about trying to make the different efforts of the 28 European Governments over matters such as piracy and port security more cohesive and co-ordinated than they are at present. It does not involve any kind of direction. It is trying to establish a framework for effective partnership and working together so that we have fewer weak links in security—whether it be maritime or terrestrial—anywhere across the continent of Europe. Any weakness in security arrangements elsewhere in Europe can end up providing a point of entry for people who want to threaten our interests directly, so this sort of effective working together is very much in the interests of this country.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

What the Minister has told us about the European Council discussions is obviously welcome, but six days before the European Council an Amnesty International report said:

“European leaders should hang their heads in shame over the pitifully low numbers of refugees from Syria they are prepared to resettle”.

Is it not the fact that Europe as a whole, with the exception of Germany, has been failing in its humanitarian duty to support refugees from Syria? Should not this have been pursued more actively by our own Prime Minister at the European Council, and should not it be taken forward in other European forums as well?

[Mr Lidington]

It is a pity that the hon. Gentleman did not acknowledge the very significant sums of humanitarian relief that this country has provided through the Department for International Development. What we surely want to see in Syria is a ceasefire leading to a political settlement that enables Syrian people to return home, rather than to be dispersed into a diaspora community around the rest of the world.

[Mr David Nuttall (Bury North) (Con)]

Once again in its conclusions the Council has restated the need to cut EU-imposed red tape on businesses, but British companies want action now, not just words. Is my right hon. Friend able to indicate when any of the existing EU-imposed rules and regulations, such as those on the registration, evaluation and authorisation of chemicals, will actually be repealed?

[Mr Lidington]

In fairness, I think that what the industry has been calling for is modification of the registration, evaluation, authorisation and restriction of chemicals directive—REACH—and flexibility in its interpretation, rather than its outright repeal. I can point my hon. Friend to the agreement by all Governments to exempt micro-businesses from future EU regulations as the default position. I can also point him to the Commission’s refit package published earlier this year. Among other things, the Commission has announced that it will withdraw some proposals to impose extra regulations on professions such as hairdressing, and it will also take action about the over-prescriptive aspects of the soils directive. A lot more can and should be done. That is why we have pressed very hard for the recommendations of the Prime Minister’s business taskforce to be taken forward, and why we strongly welcome the fact that the taskforce report has had strong support from Government leaders representing all the main political families right across the European Union.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his response to the urgent question. I note that there was no discussion at the Council about a Spanish naval ship’s unlawful incursion into Gibraltar’s territorial waters. The EU is adamant that member states must respect each other’s sovereignty, but Spain is obviously ignoring that agreement. What steps will he take to address that issue?

[Mr Lidington]

We make it clear every time there is a Spanish incursion into British Gibraltar territorial waters that that is unacceptable through a formal protest of some kind to the Spanish Government, which, depending on the circumstances, has ranged from a note verbale to a public summoning of the Spanish ambassador. We continue to make representations to Spain at the highest level about the fact that this sort of behaviour is not tolerable, as well as the fact that Spain would be better off recognising that a large number of Spanish citizens benefit from the prosperity of Gibraltar—from being able to take work there and from the spending power it provides to the Andalusian economy—and that it would be in Spain’s interest to start trying to make friends with Gibraltar, instead of issuing threats.

[Dr Julian Lewis (New Forest East) (Con)]

A common defence policy for Europe would clearly undermine the crucial link between Europe and America that forms the basis of NATO. What assessment have our Government made of the number of our fellow EU member states that favour a common defence policy, and of their motivation for favouring such a dangerous step?

[Mr Lidington]

It all depends on what is meant by a common defence policy. There is widespread support, including in the United States and from the NATO Secretary-General, for European members of the transatlantic alliance to be more effective and cohesive in their contributions to our joint security arrangements. My hon. Friend is right that some people in Europe want to go a great deal further, particularly in some of the European institutions, such as the Parliament and the Commission.

For rather obvious reasons of parliamentary accountability and a consciousness of the importance of national sovereignty over defence and foreign policy, there is greater reluctance among national Governments. As a rule of thumb, smaller member states often see security advantages in closer European integration at defence level, and the significant defence players are generally the most conscious of the need to preserve national autonomy and to defend what the treaties lay down, which is that defence and security remain national competences and rights.

[Mr William Bain (Glasgow North East) (Lab)]

What further reassurances can the European Council provide to the people and the Government of Ukraine that signing the draft association agreement with the European Union remains in their long-term economic interests? When the Minister next speaks to his counterparts in Russia, will he remind them that the decision about whether to sign that agreement is one for Ukraine alone, not one that should be subject to pressure by Ukraine’s neighbours?

[Mr Lidington]

It is important that we do not just make statements at European Councils or the like about this issue, but that we try to reach out to ordinary Ukrainians. Our embassy in Kiev has been leading on that and encouraging embassies from other European countries to do so as well, particularly to get the message through to those in the Russian-speaking areas in the east and south of Ukraine that greater integration with the world’s biggest single trading market will, in the medium and long term, hugely benefit the prosperity of people of every ethnic background within Ukraine.

I agree with the hon. Gentleman in relation to Russia. I have certainly made such a point directly to my Russian opposite number. It is in Russia’s interests to have a Ukraine that is more prosperous and stable than it is today, so I hope that Russia will in time see that Ukraine’s association with the EU should not be perceived as a threat.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

On enlargement, there is a huge disparity between income per head in new member states and that in existing states, which results in many people abandoning their country for a richer one. Is it time for the EU to legislate against new entrants gaining access to other labour markets until their own economic fortunes are growing?

[Mr Lidington]

As the Prime Minister has said, we need to look at how transitional arrangements should operate in future. In his Financial Times article, my right hon. Friend suggested the idea of looking at a new entrant’s GDP in relation to average EU GDP. However, he made it clear that we are not necessarily wedded to that proposal, and are keen to hear ideas from others.

It is clear that simply relying on a somewhat arbitrary number of years and saying that all restrictions will fall away automatically at the end of that period will not restore public confidence in the enlargement process. I profoundly believe that enlargement has worked to the benefit of Europe as a whole, including the United Kingdom, so I want to see public confidence restored, and looking again at transitional controls is one important way to do that.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I am sure that if the Prime Minister were here—I wish he was—he would join me, as I hope the Minister will, in wishing the Chancellor of Germany, Angela Merkel, a speedy recovery from her serious skiing accident.

Will the Minister take it from me that I am a very strong pro-European—always have been—but even I am very concerned that this miserable little Council meeting seems, according to his statement, to have spent so little time on the real problems that the European economy still faces. I am talking not about the eurozone, but about the heath of our economy. Only two weeks ago, Angela Merkel made a very important speech about the rift between the rich or super-rich and average, ordinary people being a danger to democratic institutions.

My last point is that we seem to be sleepwalking towards enlargement with three other poor countries, which concerns my constituents and me.

[Mr Lidington]

On the hon. Gentleman’s last point, there is no question of sleepwalking. There is a very rigorous process of accession negotiations, each stage of which succeeds only if every EU member unanimously agrees that the relevant standards have been reached by the candidate country. Even on the most generous estimate, it will be a fair number of years before any of the current candidate countries are in a position to be ready to join the European Union.

I happily concur with what the hon. Gentleman said about Chancellor Merkel. She is a formidable leader of Germany, and a good friend of this country as well. I am sure that the whole House will wish her a very speedy recovery from her skiing injury.

On the hon. Gentleman’s point about debates on the economy, this Council had been designated for a long time as the occasion for the first discussion at Heads of Government level on defence and security policy for several years. There is a limit to the number of significant issues that can be pushed into a single summit meeting without doing injustice to their importance. There was a very good discussion of some broader economic issues at the October European Council, and I am absolutely confident that the Heads of Government will return to the economy in 2014.

[Mr Peter Bone (Wellingborough) (Con)]

The whole House will be disappointed that there was not an oral statement by the Prime Minister yesterday, and the Minister has not explained why the Prime Minister has not popped over from Downing street to spend an hour answering the urgent question that has been granted today.

On a specific matter, did the Prime Minister bring up the issue of Romanian and Bulgarian migration at the Council, and did he suggest that this country wanted to extend the limits? Talking about future transitional arrangements, which are years away, is rather like shutting the stable door after the horse has bolted.

[Mr Lidington]

The Prime Minister and the Government have always made it clear that we will abide by the law in respect of Romania, Bulgaria and other accession countries. The treaty of accession, which was negotiated by the last Government and agreed by the House in the last Parliament, laid down that the transitional controls on migration from Romania and Bulgaria should continue for a maximum of seven years. We were right to put transitional controls in place for the full seven-year period. Unlike in the case of the 2004 accession states, we are lifting the transitional controls at the same time as every other country in the EU that has maintained such controls. The situation is therefore somewhat different.

The measures that we have announced and are implementing to make it more difficult for people who are not workers to access social security and public services ought to provide considerable public reassurance, as should the knowledge that under this Government about two thirds of new employment is being taken up by United Kingdom citizens, whereas under the last Government the figure was only 10%. That is the first sign that this Government’s reforms to welfare, education and training are having the beneficial effect of making more of our young people employable and willing to take the work that is available.

[Ian Murray (Edinburgh South) (Lab)]

I have asked this question of the Minister for Europe before. Now that another European Council meeting has concluded, is he able to tell the House whether he is any closer to determining what is the top policy priority for repatriation that would encourage the Government to campaign to stay in the European Union?

[Mr Lidington]

I have to confess to the hon. Gentleman that he is not the first person with whom I will share the secret. The Government have a clear policy on reform of the European Union to make it more competitive, democratic and flexible. In his party capacity, the Prime Minister has set out that at the next election he will advocate a programme of further European reform, including treaty change. The hon. Gentleman will have to contain himself and see what is in the Conservative manifestos this year and next. They will give him a bit more detail.

[Mr Philip Hollobone (Kettering) (Con)]

I suggest to my right hon. Friend that these defence discussions are a classic example of EU competence creep, or should I say incompetence creep? I put it to him that the United Kingdom should have nothing to do with establishing an EU-led so-called European arm of NATO, because if the EU gets anywhere near the NATO-led defence capabilities of European nations, including our own, it will wreck them, just as it has wrecked economic and monetary union.

[Mr Lidington]

I assure my hon. Friend that we are not doing that. Nothing in the European Council conclusions should give credence to the idea that there is such a threat. I say to him that it is a mistake always to see Europe as threatening and to think that we are unable to influence the way in which Europe works together. The record of this European summit again shows that when we put our minds and energies to it, we can influence, and to a considerable extent direct, the future shape of European policy in a way that serves our national interests, the interests of all our people and the interests of Europe as a whole.

[Chris Heaton-Harris (Daventry) (Con)]

Does my right hon. Friend know whether the Prime Minister had any conversations or open debates on protecting parliamentary sovereignty, given the growing crisis in subsidiarity in the European Union following the yellow card that was issued by 19 reasoned opinions across member states on the European public prosecutor’s office being blatantly ignored by the European Commission, which is ploughing forward on this matter?

[Mr Lidington]

That issue was not on the agenda for the European Council, but I made a point of raising it in strong terms at the General Affairs Council a few days before the summit. I was pleased to be supported strongly by my Dutch colleague and a number of other Ministers who were present.

[Guy Opperman (Hexham) (Con)]

Does my right hon. Friend agree that we should be stressing the fact that this coalition Government have given unprecedented aid support to the Syrian refugees and to individual aid agencies such as UNICEF and the neighbouring countries that are doing what they can to address this local humanitarian crisis?

[Mr Lidington]

I agree completely with my hon. Friend.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I very much welcome the statement that has been made by the Minister. On the issue of security, was there any discussion at the Council of Iran’s nuclear programme and the deal that has been reached, because there is concern among neighbouring Arab states, such as Saudi Arabia and other members of the Gulf Co-operation Council, not only about the deal but about the fact that it was reached without any representations from Arab countries at the table where the discussions took place? Does the Minister agree that a country from the GCC should be at the table when there are further discussions about Iran’s nuclear deal?

[Mr Lidington]

Iran was discussed at the Foreign Affairs Council. Of course, my right hon. Friend the Foreign Secretary talks regularly to his counterparts in Germany and to the other permanent members of the Security Council about this matter. We also talk to our friends in the Gulf Co-operation Council about our relationship with Iran and the progress towards an acceptable solution to the Iranian nuclear issue. It is in the interests of countries in the region, as well as countries in Europe and north America, that such a solution is found as quickly as possible.

[Jason McCartney (Colne Valley) (Con)]

I joined fellow members of the NATO Parliamentary Assembly for a very informative briefing at NATO maritime command in Northwood about Operation Ocean Shield, which is the NATO operation against piracy off the horn of Africa. After an hour, we were asked to sit through pretty much the same briefing, but delivered by an EU admiral, about Operation Atalanta, which is the EU operation against Somali piracy. Is not that the kind of duplication and confusion in command and control that we must reject, and should we not instead commit ourselves fully to NATO?

[Mr Lidington]

The two operations off Somalia involve two sets of countries, the membership of which is not identical. Having EU and NATO elements means that we are able to involve more nations than would otherwise be the case. In practice, the two operations work pretty seamlessly together. As I understand it, they apply common rules of engagement. The importance of the EU common defence and security policy complementing and not duplicating or being a substitute for NATO was reinforced by the presence of Secretary-General Rasmussen at the European summit in December. The fact that the Secretary-General, on behalf of NATO, felt able to welcome warmly the conclusions that had been reached ought to reassure all of us in the House who are champions of NATO that there is no threat to NATO’s role or primacy here.

Point of Order

Tuesday 7th January 2014 Commons Chamber

13:39

[John McDonnell (Hayes and Harlington) (Lab)]

On a point of order, Mr Speaker. At 5.15 pm on Sunday at Her Majesty’s prison Oakwood, which is managed by G4S, a group of prisoners refused to be locked down. That led to a 10-hour disturbance in which they allegedly barricaded the Cedar wing and smashed windows. According to the BBC, up to 50 prisoners were involved, and eventually officers in riot gear had to enter the prison. We now know from leaked reports today that there was another disturbance back in November. Staff in riot gear were again deployed to a disturbance involving 18 prisoners, most of whom were said to be drunk and armed with pool cues, and who threatened prison officers and lit small paper fires. The following week, there were five outbreaks of violence in which staff or prisoners were attacked. We are also aware that a prison inspector’s report on that prison demonstrated that it was easier to obtain drugs than a bar of soap, under the management of G4S.

When such an incident has occurred in the past, we have at least received a written ministerial statement, if not a full oral statement. Have you been notified at all, Mr Speaker, about whether there is to be any form of statement about the incident and how it will be addressed? If not, may I urge the Government, through you, to at least provide some form of written statement about how the issue is to be tackled?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. The short answer is no, I have received no such indication. The Leader of the House and other representatives on the Treasury Bench will have heard the concern that has been expressed. What follows, I know not, but the hon. Gentleman will keep his eyes and ears open. There are other ways he can pursue the matter through Adjournment debates or written and oral parliamentary questions if he so chooses, but he might want to wait to see the response to his point of order, and I thank him for it.

Community Hospitals

Tuesday 7th January 2014 Commons Chamber

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

13:41

[Charlie Elphicke (Dover) (Con)]

I beg to move,

That leave be given to bring in a Bill to make provision for community ownership of hospitals owned by NHS Property Services Ltd; to facilitate the integration of health and social care services provided in those hospitals; and for connected purposes.

Colleagues will know that there are more than 300 community hospitals in England. They are deeply rooted in their local communities and provide great support and personal services. They are well supported by leagues of friends who work tirelessly to raise funds and improve services and equipment in those hospitals still further. They provide treatment that is much closer to home than many other health facilities, and they have a personal, caring approach that is not always possible in large, busy, acute hospitals.

Community hospitals such as the one I represent in Deal in my constituency have a real role in the future of the NHS. They provide cheaper care beds than an acute hospital can provide; they are a good basing for community services and a potential engine for bringing together health and social care in our community. They relieve the bed-blocking pressure on busy acute hospitals where beds are often scarce. They do intermediate care—step up, step down, end-of-life care, palliative care—very well. It is better to have care that is local and more cost-effective, and such hospitals are well positioned to help with an ageing population.

Community hospitals up and down the land provide diverse services. Deal hospital serves a population of 36,000, and services include minor injuries, diagnostics such as X-rays, care beds, antenatal care, mental health support, community clinics for cardiac nurses, sexual health, baby clinics, eye tests, dietary advice, and even a dental suite. Out-patient clinics are also provided. Sadly, the local acute trust wants to withdraw those services, but my case is that where patients—particularly elderly patients—find it hard to travel, we must be more understanding with our out-patient services, and more careful to provide them locally. With an ageing population and people who find it hard to travel long distances, it is important that we can carry out more local services in our community hospitals.

With the transfer of many community hospitals to the NHS PropCo, many were worried—at least in Deal, and more widely—that the hospital would close. I ran a campaign to save the hospital that saw 2,500 local households—that is 20%—answer a survey, and more than 400 people pack into a public meeting. Those institutions are cared about deeply. People care about community hospitals; they want to save them and to know they have a secure future. They worry about their hospital being in the PropCo, and those concerns will not be reduced by today’s report in the Financial Times about the difficulties that PropCo has had.

I believe that communities should be able to own their hospitals if they wish. Many will ask, “How we can possibly allow that? How can people in local communities have responsibility for looking after a community hospital? Look at them—they have straw in their hair, green wellies, and they can barely speak English.” My answer is simple: many, possibly most, community hospitals were founded by public subscription in local community trusts. As people did it then, so they could again. I think we can trust our communities to run hospitals properly and competently, and history teaches us that they did it very well in the past.

Why should we not have community hospitals back in local ownership? Why cannot community trusts take back those hospitals and social enterprises? Whether it is the big society, localism, Labour’s co-operative movement—call it what we will—it amounts to the same concept, idea and ideal. Why cannot GPs take up the management and have right of admission, as they used to? This is not just an issue for Deal, which I represent, but a concern up and down the land. There are clever people up and down the land, as well as brilliant leagues of friends who do much good work. There are community hospitals such as that in Deal everywhere across this country.

That is my case. It goes far and wide and is supported by many colleagues present today, which I appreciate and thank them for. My case is supported across the House, and in addition to the official supporters—who I shall read out if the House is kind enough to give me leave to bring in the Bill—I want to place on record my thanks to many other colleagues who have kindly provided support. They include my hon. Friends the Members for Bracknell (Dr Lee), for Woking (Jonathan Lord), for North East Cambridgeshire (Stephen Barclay), for Mid Norfolk (George Freeman), for Penrith and The Border (Rory Stewart), for Congleton (Fiona Bruce), for Wellingborough (Mr Bone), for Harwich and North Essex (Mr Jenkin), for New Forest East (Dr Lewis), for St Ives (Andrew George), for Bristol North West (Charlotte Leslie), and for Altrincham and Sale West (Mr Brady).

Let communities own their own hospitals again and enable them to take responsibility. Let them feel that the future is something they are part of, rather than something that happens to them. Give them shared responsibility in the planning of local health care and coping with an ageing population. I believe that with ideas, innovation and ownership, communities will be able to help drive the changes that the NHS needs to succeed in the future.

Question put and agreed to.

Ordered,

That Charlie Elphicke, Dr Sarah Wollaston, Rosie Cooper, Mr Aidan Burley, Andrea Leadsom, Mr Robert Walter, Priti Patel, Christopher Pincher, Dr Thérèse Coffey, Peter Aldous, Tracey Crouch and Laura Sandys present the Bill.

Charlie Elphicke accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 28 February, and to be printed (Bill 151).

Mesothelioma Bill [Lords]

Tuesday 7th January 2014 Commons Chamber

Consideration of Bill, not amended in the Public Bill Committee

13:48

[The Minister of State, Department for Work and Pensions (Mike Penning)]

I thank you, Madam Deputy Speaker, and Mr Speaker, who is now back in the Chair, for permission to make some opening remarks at the start of Report. While I am enormously proud to bring this important and long-awaited Bill before the House, it is with a sad heart that I do so without the presence of the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who has campaigned for this Bill for many years. Although we may not have agreed fully on all parts of the Bill—we will come on to those parts later—he was enormously helpful to me, not only in the Bill Committee of which he was a member, but outside the House. When I first became a Minister he was very open, and discussed with me the sort of pressures and worries that I would be having. It is a real shame he is not here today, and our thoughts and prayers are with him and his family. We wish him a speedy recovery. I know that he is very poorly, but I know that the thoughts and prayers of both sides of the House go out to him today, and I hope that we will do him proud with the Bill today.

[Kate Green (Stretford and Urmston) (Lab)]

I thank the Minister for the remarks that he made about my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). He is a good friend and colleague to Members on both sides of the House. He is my parliamentary next-door neighbour and, as the Minister has said, for those who are new in this place or to a role, my right hon. Friend is a tremendous source of support, guidance, help and friendship. We miss him very much today.

I am delighted that some of the amendments that my right hon. Friend was able to table before he became unwell will be debated this afternoon, and I hope that the Minister and others will want to do all that they can to honour Paul’s intentions. I know from my right hon. Friend the Member for Leigh (Andy Burnham), who has been in touch with Paul’s family, that they are hugely appreciative that we have the opportunity to debate these amendments this afternoon, and that can be the best tribute to Paul to wish him a full recovery so that we have him back with us as soon as possible.

[Mr Speaker]

I thank the Minister and the shadow Minister for their words.

New Clause 2

Research supplement

‘(1) This section makes provision about the research supplement mentioned in section 13.

(2) The research supplement—

(a) must be expressed by regulations under section 13 as a percentage of the amount set for the purpose specified in section 13(1) in accordance with section 13(2) to (5); and

(b) may not exceed 1 per cent of that amount.

(3) Regulations under section 13 must include provision about the application of the research supplement; in particular, the regulations—

(a) must include provision for amounts raised by way of the research supplement to be applied by way of grants or other financial assistance for research into mesothelioma;

(b) must require the scheme administrator to make arrangements for the application of the research supplement;

(c) may allow the scheme administrator to arrange for a body which handles applications for research funding to administer the research supplement on the scheme administrator’s behalf;

(d) may allow receipts by way of research supplement in respect of one period to be held for allocation in a later period, and for investment of receipts pending allocation.

(4) Before making regulations in respect of the research supplement the Secretary of State must consult—

(a) insurers;

(b) medical charities and research foundations; and

(c) other persons or bodies who the Secretary of State thinks are likely to be interested.’.—(Tracey Crouch.)

Brought up, and read the First time.

[Tracey Crouch (Chatham and Aylesford) (Con)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

Amendment 11, in clause 1, page 1, line 6, at end insert

‘; and for funding research into mesothelioma (through the research supplement under section [Research supplement]).’.

Amendment 12, in clause 13, page 7, line 10, at end insert—

‘( ) The regulations mentioned in subsection (1) must provide for the levy to include a research supplement in accordance with section [Research supplement] (in addition to the amounts set for the purpose specified in subsection (1)).’.

Amendment 13, in clause 13, page 7, line 11, after ‘levy’, insert ‘(not including the research supplement)’.

Amendment 14, in clause 13, page 7, line 16, after ‘levy’, insert ‘(not including the research supplement)’.

Amendment 15, in clause 13, page 7, line 18, after ‘levy’, insert ‘(not including the research supplement)’.

[Tracey Crouch]

New clause 2 and the associated amendments were tabled by the right hon. Member for Wythenshawe and Sale East (Paul Goggins), and are supported by me and other hon. Members. It seems an appropriate moment to send my very best wishes to the right hon. Gentleman and his family, and I pray that he recovers soon from his severe illness. He is well respected on both sides of the House and has been a champion for fairer and quicker justice and compensation for victims of asbestos-related diseases. While we do not agree on all aspects of asbestos compensation, the one condition we do share a deep commitment to is that of mesothelioma, and we have worked hard together to find cross-party consensus on aspects of the Bill. Although it is somewhat humbling, it gives me great pleasure to move this new clause and the consequential amendments on the right hon. Gentleman’s behalf.

The right hon. Gentleman spoke on the issue of medical research at length in Committee, and I do not wish to repeat all that he said. However, it is important to remind the House of several key points. The first, and in my view one of the most important points, is that we must remember the sufferers of this dreadful condition in everything we debate today. Mesothelioma is a fatal disease caused only by exposure to asbestos and while its severity can be affected by other factors, it is effectively a disease contracted simply as a consequence of going to work. Doctors who treat meso victims will tell you that it is by far the worst type of lung cancer that anyone can contract, and unfortunately it is likely to cause not only a swift death but an incredibly painful one.

Mesothelioma is not an industrial working-class disease. Although it may be more prevalent among those who have lagged ships or worked in heavy industry, the truth is that anyone exposed to asbestos can become a victim of mesothelioma. We are seeing an increasing number of teachers suffering from this disease and of course there are those who contract it via secondary exposure, such as the wives who washed their husbands’ overalls.

Medical research to help ease the pain and suffering of those who contract mesothelioma is essential, but we must also try and find a cure, not least because we know that the peak of those to be diagnosed is yet to come. Nearly 2,500 people will die from meso this coming year and over the next 25 years some 60,000 might die from the disease, but research into this cancer is shamefully underfunded.

Before entering this House, I was proud to be part of the efforts made by my then employer, the insurance company Aviva, and three other global insurers—AXA, Zurich and RSA—to provide funding of more than £2.5 million to the British Lung Foundation to invest in research projects. It was good to meet many of my former colleagues at a reception held in the House last year to see progress on some of those projects, one of which has been the incredibly important development of a meso-bank. The meso-bank collects tissue and blood samples from sufferers and will provide an opportunity for fundamental and translational research, which will help not only those with the condition in the UK but those in developing countries where the export and use of asbestos has been less controlled—an issue that the right hon. Gentleman also raised in Committee.

Alongside the meso-bank there have been other projects including those being run at the Queen Alexandra hospital in Portsmouth, which is looking at whether specialist palliative care immediately after diagnosis could help relieve the symptoms of mesothelioma, and that at the university of Sheffield which is looking at different treatment packages to relieve pain from this awful disease. Those projects are excellent, top-quality research projects, which would not have been possible without the initial grant from the big four insurers, but unfortunately the funding comes to an end this year, which is somewhat disappointing given that we are about to start the upward trend in those being diagnosed with mesothelioma.

Sadly, meso research funding lags far behind that of other cancers with similar mortality rates. Myeloma and melanoma had £5 million and £5.5 million spent on research respectively, which is about 10 times more than on meso—the irony being that the UK has the highest death rate from mesothelioma in the world.

The amendments would kick-start a long-term secure funding stream for further medical research into mesothelioma by placing a hypothecated levy on all members of the industry, not just the big four. There is concern about whether that would create a precedent for such a levy, but that precedent already exists. We have seen levies placed on the gambling industry, under the Gambling Act 2005, to fund projects related to addiction, and on lotteries, for similar reasons. Levies have also been placed on utility companies. This could be done for the right reasons—to provide essential funding for research projects.

I have read Hansard for the previous discussion on this matter, so I know that the Minister pledged to raise the issue with the industry. My sources tell me that that has now happened, so it would be useful to have an update on the meeting. I believe it was agreed that further discussions with the Association of British Insurers and the British Lung Foundation were to be arranged but that this has yet to happen. I appreciate that with the severe weather over the Christmas period there may have been a delay, but it would be extremely helpful to the House if the Minister could update us on where he thinks this is now going. While I recognise the desire from the Minister for it to remain a voluntary agreement between the industry and research organisations, I would be keen to hear what he intends to do if there is no long-term stable funding agreement, and whether he would commit to introducing secondary legislation to this Bill if that is the case. It would also be helpful if the Minister could commit to the Government overseeing the facilitation of the voluntary scheme. By what date does he hope it will be in force, and can he say in terms how much he would hope the funding to be?

Mesothelioma is undeniably a dreadful condition and research into it is shamefully underfunded. We anticipate more people will be diagnosed over the coming years, from all occupational backgrounds, so it would be helpful to have a strong commitment from the Minister —albeit one recognising that this is not wholly his departmental responsibility—that there will be progress in trying to discover a cure and/or suitable treatment to relieve the horrible suffering from mesothelioma.

In moving the new clause, I hope that I have done justice to the right hon. Member for Wythenshawe and Sale East on the need for extra funding for research, and I look forward to the Minister’s reply.

[Hon. Members]

Hear, hear!

[Steve Rotheram (Liverpool, Walton) (Lab)]

New clause 2 on the importance of research was tabled by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), who sadly cannot be with us today to speak to it. I am sure that the very best wishes of the whole House for a speedy and full recovery will be relayed to his family by my right hon. Friend the Member for Leigh (Andy Burnham). I thank the hon. Member for Chatham and Aylesford (Tracey Crouch) for her contribution today and the work she has done through the all-party group with my right hon. Friend the Member for Wythenshawe and Sale East. We wanted to ensure that my right hon. Friend’s amendments were debated in the House and taken forward due to the importance of this issue. He worked tirelessly on behalf of his and all our constituents on this important issue, which still blights the lives of thousands of people. There remains no cure for mesothelioma, but it is vital that research continues to offer hope to those still suffering from asbestos-related diseases. It is also essential that sufferers receive the maximum possible compensation, and that it is not reduced by having to pay legal fees. My right hon. Friend sought to improve this proposal and I intend to press it to a vote.

14:00

New clause 2 seeks to ensure that a small part of the levy imposed on the insurance industry—no more than 1% of the total claim bill—is used to fund additional research into mesothelioma. Some 2,400 people a year die from the disease, and it is estimated that approximately 56,000 to 60,000 people, as the hon. Lady said, will die from this terrible disease in the next 30 years unless a cure is found. In the other place, the Government continually suggested that they were sympathetic, but they did not provide a guarantee to support and implement a scheme to fund mesothelioma research on a sustainable basis. That is why my right hon. Friend is so determined to see a small proportion of the levy used for research purposes. As I said at the beginning, my right hon. Friend is a tireless campaigner for mesothelioma victims. I hope this House will feel able to support these important amendments in his name.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

I also add my best wishes to my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), who is an avid campaigner on this issue. I will make a brief contribution.

Mesothelioma has long been neglected in terms of research funding. Lord Alton highlighted that while mesothelioma received £1.4 million in voluntary and private sector funding, £22 million is spent on bowel cancer, £41 million on breast cancer, £11.5 million on lung cancer and £32 million on leukaemia. Those are all terrible diseases in desperate need of research, but so is mesothelioma.

The amendments have the potential to save tens of thousands of lives. If a cure is found it could reduce the number of compensation payments required. It is money well spent. Not only will it save lives, it will save the insurance industry money in the long run. It is for this reason that I fail to understand why it is not on board.

I want to expose the myth that mesothelioma is related only to industrial diseases. The hon. Member for Chatham and Aylesford (Tracey Crouch) mentioned the impact on teachers, but it also affects children, ancillary workers, janitors and all kinds of people who are now employed by, or attend, schools. I ask the Minister to take the time to look at the excellent TUC and National Union of Teachers report on asbestos in schools and future compensation payments. There is evidence that some 75% of state schools have asbestos in their buildings. That is a time bomb waiting to explode. It is important to get that message out there.

Equally, it is important to let potential governors of private fee-paying schools and academies know that they could be liable to pay compensation, should they take on that responsibility, if future pupils are cursed with mesothelioma. It is important for the Government to make people aware that, when they take on governorships or other voluntary jobs in schools, they could be made liable for insurance claims.

[Jim Shannon (Strangford) (DUP)]

I would like to associate myself with the thoughts and best wishes to the right hon. Member for Wythenshawe and Sale East (Paul Goggins). He is a good friend. He has been a good friend to the people of Northern Ireland, both as a Minister and outside of that role. We respect him greatly and hope he will return to health and strength in a short period of time.

I support new clause 2, which, in the absence of the right hon. Gentleman, was moved by the hon. Member for Chatham and Aylesford (Tracey Crouch) and is supported by the other hon. Members who have spoken. It is clear that investment in research into mesothelioma is desperately needed. The UK has the highest rate of the disease in the world. That is not a No. 1 spot that we should be proud of, but one we should be working to change. The British Lung Foundation, which I will refer to throughout my small contribution, estimates that 2,400 people will die of the disease this year and that in the next 30 years more than 50,000 people will die of mesothelioma unless new treatments are found.

Relatively little is spent on mesothelioma research in the UK, compared with other cancers with comparable mortality rates. In 2011, the National Cancer Research Institute reported that £400,000 was invested in mesothelioma research by its partners. That compares with approximately £5 million and £5.5 million spent on myeloma and melanoma respectively, two cancers that kill a similar number of people each year. I have been informed that the research amendments would charge a small additional annual administration or membership fee to participating insurance firms. Those small payments would make a huge difference to the future of mesothelioma research in the UK and could lead to a cure that would save tens of thousands of lives. It is estimated that 150 insurance firms are active in the employers' liability insurance market. This measure could raise a vital £1.5 million each year for mesothelioma research.

I am also informed that during debates in the House of Lords, the Government suggested that the lack of mesothelioma research is due to the poor quality of research proposals, not the funding available, and that therefore a fund for mesothelioma research would not represent value for money. That was the spirit of the Government’s reply to the debate in the House of Lords. The British Lung Foundation, however, put it to me that that argument does not take into account the opinions of many eminent medical and research experts. Advances have already been made through research by the BLF and others. More funding will attract more and better quality researchers and research proposals to an area of research that is still playing catch-up, having been neglected for so long. Members have talked about other cancer charities that are better funded. The BLF, as an individual organisation, has awarded more than £2.5 million to mesothelioma research in the past three years. The Government, with great respect, have fallen short. The BLF uses a robust international peer review process to ensure world-class quality that is respected the world over, and its research and advice is sought by other countries. The experience does not identify any shortage in quality whatever.

In conclusion, it is clear that something more must be done, so I support the new clause.

[Dr Sarah Wollaston (Totnes) (Con)]

I rise first to pay tribute to the right hon. Member for Wythenshawe and Sale East (Paul Goggins) and his work in this area. I wish him well, as all hon. Members have done, and hope for a speedy recovery. I support the amendment in his name, which was moved so ably by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch).

We must not miss the opportunity to fund research into preventing the disease. One important aspect of prevention mentioned is the risk to children in schools. More than 70% of schools still contain significant amounts of asbestos. There is emerging technology for real-time testing of asbestos fibres in schools. We must continue to have a strong research base not just to relieve those who are suffering the terrible symptoms of the disease, but to research treatments and, most importantly, to look at how we prevent and protect in the workplace, so we can prevent exposure to asbestos. As all Members will know, this disease is caused entirely by exposure to asbestos, and it will be a real wasted opportunity if we do not make this funding available to advance research.

[John McDonnell (Hayes and Harlington) (Lab)]

Obviously, I pay tribute to the work of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). One reason he tabled the new clause and amendments was that, although we commend the insurance companies that came together voluntarily to contribute £2.5 million, there are, as has been said, 140 to 150 insurance companies, and one of his concerns was the virtual impossibility of securing an agreement across them all. I hoped his claim would be put to the test before now. Had we secured a voluntary agreement by now, we would not have required the new clause and amendments, but it has not been possible, and I doubt the feasibility of bringing all those companies to the table and securing a voluntary agreement to raise sufficient funds.

I worked in factories in the north-east when I was a youngster, and I can remember the Hebden Bridge experience and the asbestos factory there. For limited periods—tragically—I have known many mesothelioma sufferers, and the two things they want are, first, speedy compensation so that they and their families can get some compensation while they are still alive, if possible, and secondly, that no one else should go through this absolutely appalling suffering. That is why the emphasis has been placed upon seeking prevention. I agree with the hon. Member for Chatham and Aylesford (Tracey Crouch) that education is critical, and that is why some of the original funding—a limited amount, admittedly, but at least some—from the insurance companies was put towards education and, more importantly, finding treatment practices and palliative measures that would reduce the suffering and, in the short term, not the long term, finding a cure.

For those reasons, the new clause and amendments are key to the Bill. Without them, the Bill will not be as welcomed as many of us would have thought. I therefore urge Members and the Government to recognise this as a matter of urgency. We cannot wait for voluntary agreements any longer; we need legislation in place that can generate the income for prevention activities and research. Like other hon. Members, I hope that my right hon. Friend comes back healthy and spritely to engage with this matter and that this will be a tribute to all his hard work, but what better message to send to his family than to encapsulate at least some of his work in the Bill today?

[Mr Mike Hancock (Portsmouth South) (Ind)]

I apologise for not being in the Chamber at the start of the debate; I was tied up in another meeting. I also pass on my good wishes to the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who is not with us today. I hope to see him back here as quickly as possible.

In my constituency, hardly a week goes by when a local newspaper does not report on the inquest of someone who has died from an asbestos-related illness, having worked either in the dockyard in Portsmouth or in one of the many industries that have served the defence industry over the past 50 or so years. Interestingly, time and time again, coroners’ reports request—virtually demand—that more action be taken to research and develop better techniques for helping sufferers of this godforsaken illness, which besets and destroys their lives and those of their families. I am therefore fully behind Members advocating that we do more.

The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) spoke very well about the problems in our schools. I have a caseload of about two dozen people affected by this disease and fighting various stages of the illness, and that includes an ex-school teacher exposed to asbestos. The only place it could have happened was in a school classroom, and it is sad to see the burden she now carries. Even though she has retired from education on health grounds and despite the effects of this appalling illness, she is working hard to keep her family together.

The British Lung Foundation says that even a small contribution from these various organisations would lead to great improvements in research and development and help all sufferers—those in the last stages of the disease and those yet to reach that point—so I urge all Members to support the new clause. I hope that the Government will see sense and recognise that it tries to do what most people in the Chamber and the country who know anybody affected by this disease want to see happen. I hope that will be the case when we vote on it later.

14:15

[Kate Green]

I thank all hon. Members who have contributed to this debate, particularly the hon. Member for Chatham and Aylesford (Tracey Crouch), who moved the new clause on behalf of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). We support the new clause and the amendments and are pleased to have heard so many endorsements of them from hon. Members across the House.

As has been said, about 2,400 people a year die from mesothelioma and about 56,000 are expected to die from it in the next 30 years, unless a cure is found, yet, as has been shown, very little funding in the UK is being directed to research into mesothelioma. Tragically, the UK leads the world in the incidence of mesothelioma, so one might have expected us to want to lead the world in investment in research to find a cure and treatment.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

I apologise for interrupting my hon. Friend’s flow; she was building on the comments from around the Chamber. On research in the UK, does she share my concern that my constituent, Debbie Brewer, who contracted diffuse mesothelioma from her father who had worked in the dockyard and who died last year, was forced to travel to Germany for treatment because not enough research had been done in the UK to support treatment here? That should not be happening.

[Kate Green]

I am shocked to hear of the case that my hon. Friend reports. For anyone suffering terribly from a disease they know will be fatal and cruel in its passage, one of the most important things is being as close as possible to home, to their family and friends, and naturally we want to do all we can to invest in good-quality, well-researched treatment so that every mesothelioma sufferer can access care as close as possible to home.

Members across the House have pointed out the differential in the level of funding afforded to mesothelioma research relative to that directed to other medical conditions and other cancers. In fact, mesothelioma research receives no state funding at all, yet as more people access pay-outs from the scheme introduced in the Bill, the Government should begin to enjoy financial savings as a result of reduced statutory pay-outs. It is not one of the amendments proposed today, but the Minister might like to consider whether the savings that the Government can look forward to enjoying might also, to a degree, be directed towards funding further research into a treatment and cure for this terrible disease.

Today, mesothelioma research receives £1.4 million of entirely voluntary and private sector funding, and I pay tribute to the voluntary and private sector funders, including the insurance funders, that have made those research funds available. Some £1.4 million is available to mesothelioma each year, compared with, for example, £22 million for bowel cancer, £41 million for breast cancer, £11.5 million for lung cancer and £32 million for leukaemia. Clearly we are not anxious to be in some form of league table for which form of cancer is the most deserving of funding for research—all are terrible for those hit by them and for those close to them—but it is clear that mesothelioma is a poor relation in the funding that is available for research, and there is a real will across the House and, as we know, in the other place to address that matter during the passage of the Bill.

This issue was debated extensively in the House of Lords as a result of an amendment tabled by Lord Alton. At that time, a number of useful and welcome pledges were secured from the Health Minister, Earl Howe, including the announcement of a joint strategy between the DWP and the Department of Health on how to encourage proposals for high-quality research into mesothelioma. Since Earl Howe’s statement in the House of Lords, we have heard that a meeting has been hosted with potential researchers and funders to begin to take forward the implementation of that strategy. We are pleased to hear that.

As the Minister will recall, when we debated the matter in Committee my right hon. Friend the Member for Wythenshawe and Sale East absolutely rejected any suggestions that it was a lack of suitable research proposals, rather than a lack of adequate research funding, that was leading to the dearth of activity in mesothelioma research. The proposal in the new clause, which was made at every stage in Committee and in the other place, is very modest in the context of the overall scheme that we are discussing. It proposes a supplement of 1% to go towards research funding on the levy on insurers. That is not 1% of gross written premium, but 1% of 3% of gross written premium—a very modest sum for a multibillion pound insurance industry to afford, but a sum that could make an exponential difference to the scale of research that is possible into the disease. I hope that the Minister is listening carefully to the pleas that we should secure that.

In Committee, my right hon. Friend the Member for Wythenshawe and Sale East listed a series of research programmes that are already under way; the hon. Member for Chatham and Aylesford also referred to those programmes. We would like to take the opportunity to secure funding to extend, expand and continue those research programmes, and to open the opportunity for further new areas of research—as I say, there is no shortage of good research ideas.

It is important to note that such research would of course be of benefit to mesothelioma sufferers in this country. We have the highest incidence of mesothelioma anywhere in the world and, as hon. Members have pointed out, the reach of mesothelioma is extending; not just to those who worked in our traditional industrial sectors but across other sectors. Schools have been particularly highlighted, as have family members who may have been exposed to secondary contamination when workers brought home asbestos fibres on clothes and work equipment.

Not just sufferers and their families here in the UK but sufferers right across the world will benefit from investment in research. That is an important point, and one that my right hon. Friend the Member for Wythenshawe and Sale East would have wanted us to consider this afternoon. In the UK, we think that we are shortly to pass the spike in mesothelioma. The history of asbestos exposure and of health and safety action and legislation to prevent people from being continually exposed to that risk means that the spike in the number of sufferers will come within the next few years. That is to be welcomed tremendously here in the UK, but it is absolutely not the case around the world, particularly in developing economies—especially developing economies where health and safety standards may be much less rigorous than we are used to in this country and where economies may be expanding very rapidly—where hundreds of thousands, if not millions, of workers may even now be exposed to the risk of mesothelioma despite all the collective knowledge and wisdom that we have of the damage that exposure to asbestos will cause.

It is also important to note that in many of those developing economies, UK companies and businesses will have business interests and investments. In some cases they may be drawing profits from industries that are continuing to expose workers worldwide to that risk. The moral obligation on us here in the UK to lead the world in research funding arises first because of our early experience of asbestos exposure and mesothelioma and secondly because we continue indirectly to be complicit in the exposure of workers in developing economies around the world.

It has been powerfully conveyed this afternoon how strongly the House feels not just about making sure that the funding proposals come forward, but that funding to support and encourage future proposals is guaranteed and secured. I know that the insurance industry feels as concerned as any of us to address the horrors of this disease and to seek to turn a corner in dealing with the risks to which we have exposed too many generations. I hope that it too will consider this very modest proposal, which merely builds on the voluntary contribution that many of them are already making. I hope that the industry will not feel that this is a step too far for it to contemplate. Even if it does feel that, it is the responsibility of those of us in this House first and foremost to speak up for victims—today’s victims and victims in the future. That is why I hope that the Minister will at last feel able to accept the amendments that have been moved on behalf of my right hon. Friend. I very much look forward to a positive response.

[Mike Penning]

I paid tribute to the right hon. Member for Wythenshawe and Sale East (Paul Goggins) earlier. When I heard the news, I e-mailed his office, as that was the only way I could contact his family. I hope that the message got through. It is not just in my current post that the right hon. Gentleman has been supportive; he was also supportive when I was a Northern Ireland Minister. He was an excellent Minister there as well. I pay tribute to the measured response from Her Majesty’s Opposition so far today and I am sure that that will continue. I particularly pay tribute to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on what must have been a difficult speech to make. The right hon. Gentleman, who is very poorly, is a close friend; we are friends across the House. It is a tribute to my hon. Friend that she was able to move the amendments today.

During the Committee stage, I gave undertakings to the right hon. Member for Wythenshawe and Sale East—inside and outside the Committee—and discussed the restraints I was under, which he fully understood, given the deal that we struck with the insurance industry to get the Bill to where it is today. As promised, I met the ABI, to which my hon. Friend the Member for Chatham and Aylesford Urmston (Kate Green) alluded, and the ABI has gone to the industry and will come back to me and to my noble friend Lord Howe as part of the joint approach that we have with the Department of Health on future research.

I have also spoken to Lord Howe, as I committed to do in Committee. As has been said, we have had the first meeting. One of the things I touched on with him was the issue of quality of research. That matter has been taken out of context slightly, although there was no intention to do so. It is like when anyone bids for anything; they have to tick the right boxes. When people go for a loan at the bank, they need to make sure that they have ticked the right boxes. It is not a question of the quality of research; in many cases, it is how that research has been bid for by the establishments.

It is true that the National Institute for Health Research provided £2.2 million in 2012-13 on top of the £1.4 million from the private sector. There has been money and we expect more money to come as bids come forward that match the way in which the research funding is allocated. I completely agree with the shadow Minister that we need to look at research not just in this country, as a developed nation, but for developing countries. A lot of the industries that developed products with asbestos in them have been selling them to the third world for many years. Thank goodness, many of the nations that we traditionally thought of as third-world nations are now developing nations, and it is important to force this issue forward.

14:30

I fully understand the context, tone and feelings in the House today in support of the new clause, as supported by my hon. Friend the Member for Chatham and Aylesford, but I honestly cannot break the deal, which is what would happen. We have a 3% provision based on a 75% basis, to which we will return later. Although I truly understand the feeling to press the new clause to a vote on behalf of the right hon. Member for Wythenshawe and Sale East—I would have done so myself if I were in opposition—we do not know whether he would have accepted the work I have done with Ministers in other Departments.

I have done everything I was asked to do and had committed to doing in Committee. Much more work is to be done, but I cannot break the deal that has been agreed. I am afraid that this is going to be a repetitive comment from me, as it was in Committee. I see the right hon. Member for Newcastle upon Tyne East (Mr Brown) nodding, because he knows of the constraints I am under, just as the right hon. Member for Wythenshawe and Sale East always knew. We need the deal to go through, so that we can get the compensation going out as soon as possible. With that, I respectfully ask for the new clause to be withdrawn, although I would fully understand it if we proceeded to a vote.

[Tracey Crouch]

This has been an incredibly hard debate for me to participate in. I do not think I have ever contributed to a debate on mesothelioma in this place without opposite me the right hon. Member for Wythenshawe and Sale East (Paul Goggins) discussing the surrounding issues. He is a decent man and he would have heard what the Minister said; he would have understood the lengths to which the Minister has gone to make some progress on the issue. As the Minister says, none of us probably knows for certain what the right hon. Gentleman would have done on this issue right now. Given that I moved the new clause on his behalf, however, it is incumbent on me to say that I think he would have liked to see a more concrete response, although I say that without any disrespect to the progress that the Minister has made. I would therefore like to press new clause 2 to the vote.

Question put, That the clause be read a Second time.

14:32

Division 168

Ayes: 226

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Labour: 205
Conservative: 7
Scottish National Party: 5
Democratic Unionist Party: 3
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Alliance: 1
Green Party: 1

Noes: 266

---

Conservative: 224
Liberal Democrat: 40
Independent: 1

Clause 2

Eligible people with diffuse mesothelioma

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

I beg to move amendment 5, page 1, line 15, leave out ‘25 July 2012’ and insert ‘10 February 2010’.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

With this it will be convenient to discuss the following:

Amendment 6, in clause 3, page 2, line 44, leave out ‘25 July 2012’ and insert ‘10 February 2010’.

Amendment 4, in clause 4, page 3, line 4, at end insert

‘but shall not be less than 100 per cent. of the average damages recovered in civil mesothelioma cases.’.

Amendment 1, page 3, line 5, at end insert

‘but shall not be less than 80 per cent of the average civil compensation recovered by mesothelioma claimants.’.

Amendment 9, page 3, line 5, at end insert

‘and shall be met by a levy on insurers of not less than 3 per cent of gross written premium during any given period.’.

[Mr Brown]

Before I explain the purpose of the three amendments that stand in my name, I want to make two more general points.

First, let me identify myself and my constituents with the tributes that have been paid to my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). My right hon. Friend has been a champion of my constituents as well as his own in all his work on issues relating to mesothelioma. Like many other Members whose constituencies are hot spots for the condition, I greatly appreciate the work that he has done over the years in trying to help those who suffer from it, and, indeed, his work more generally as a widely respected parliamentarian. I know that the whole House wishes him a speedy recovery.

Secondly, let me pay tribute to the Minister for managing to take the Bill so far forward—further forward than I managed to take the measure that I attempted to introduce when I was a Minister in the Department, which was slightly more wide ranging and was certainly brought to a halt more effectively. It is with some admiration that I pay my small tribute to the Minister—or, rather, my large tribute, for why should quantum be an issue? Actually, it is the issue in this part of the Bill, but we shall come to that shortly. I know of the pressures that the Minister has faced externally and within the broader Government over this issue, and I think he has done extremely well to get us to where we are now.

Having said that, I should explain why I tabled my three amendments. There is no position that cannot be improved with a little bit of thought, and in any event it is right to test the arguments. The amendments seek to increase the share of the amount that the arbitrator gives the victim that actually reaches the victim, and to give the legislation an earlier start date—2010 rather than 2012.

Let me address the compensation issues first. My amendment says compensation should be 100% of what is due. Nobody in the discussions we had on Second Reading and in Committee has made a moral case against giving somebody 100% of what they are entitled to. In fact, some very powerful speeches were made in this place on Second Reading on precisely this point, and I think it was my hon. Friend the Member for Blaydon (Mr Anderson) who pointed out that within a few months the victims are going to be 100% dead, so 100% compensation does not seem unreasonable. After all, the employers paid 100% of the premiums and they thought they enjoyed 100% of the cover. Had there been recourse in law, they would have got 100% of the damages. In not one of these cases has the defence argued that to some extent the victim contributed to his or her own misfortune, and, when we think about it, what contribution could they have made that led to their own misfortune—breathing? It is a ridiculous contention. The victims are not to blame and therefore they should not have their compensation cut.

[Hywel Williams (Arfon) (PC)]

Does the right hon. Gentleman agree that it is significant that a similar scheme under the 1979 Act provides for 100% compensation for slate workers in my constituency who cannot identify the insurers of their previous employers?

[Mr Brown]

The hon. Gentleman is correct, but the issue before us today is the rules for a very specific scheme that evolved through a voluntary negotiation with the industry. As we know, the Minister will say that there are financial parameters to the scheme that he cannot break.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does my right hon. Friend agree that there have been so many injustices in this area? My brother, Bob, died of this condition. He worked for BP all his life. When it was proven he had this condition, BP worked as hard as it could to give him as little as possible. The company put all that money into addressing the oil spill in America, yet that is how it treats its own employees. I feel very strongly about this, therefore, and support my right hon. Friend’s amendments absolutely, and I do so, too, because many people in the asbestos industry worked in west Yorkshire.

[Mr Brown]

I care about this issue and I know my hon. Friend cares about it, too, and it is true that many Members of Parliament on both sides of the House, but especially those who represent communities that suffer disproportionately from this, know that their constituents face a desperate injustice. The burden of this condition is not shared evenly across the country. It affects our population by class; working-class constituents are far more likely to suffer from it than middle or upper-class ones. It affects our constituencies by region, too; there are regional hot spots, historically found in areas of heavy industry where people were very likely to be exposed to the dust, whether because they sprayed it on railway carriages or worked with it in the shipyards or as thermal insulation engineers and were not properly protected.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

rose—

[Mr Brown]

I give way to my hon. Friend who represents a similar constituency to mine with a similar history.

[John Woodcock]

My right hon. Friend is absolutely right in what he says. I, too, want briefly to add my tribute to our right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). I know many other Members have done so, but this is a fitting time to do so.

Does my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) agree that the people we are discussing served their country for many years? Barrow and Furness has the highest incidence of mesothelioma in this country. They served their country in making what they did and they deserve justice now, and this is our opportunity to give it to them.

[Mr Brown]

I wholly agree with my hon. Friend. We as a House should find a way of doing more. If we cannot do it within the parameters of the scheme, we should find a way of doing more outside the parameters of the scheme.

[Mr Mike Hancock]

If the right hon. Gentleman presses his amendment to a Division he will have my support, but what does he say in response to the argument that if his amendment is carried it will delay the scheme and lead to a legal challenge, which, once again, will mean many people will die before the scheme can be implemented? What is the rebuttal to that, because it is important that we have one?

[Mr Brown]

I hope to make my position clear as I develop my arguments, but I want to do the best I can for the victims of this terrible condition and that will, at the end of the day, involve compromise. We are about to debate among ourselves how far we have to compromise, but I am not going to hold to some theoretically correct position if the arguments march in the opposite direction. We all have a responsibility to do what is right for the victims and if we recognise—I think as the debate progresses the majority of those taking part in it will do so—that there are injustices left unaddressed, then maybe we should return to those issues and find a way of addressing them comparable with agreements that have been made with the industry.

[Sammy Wilson (East Antrim) (DUP)]

Will the right hon. Gentleman accept that of course the insurance industry is going to come in with a heavy hand, arguing that it will take this to court and make legal challenges and that will delay things? We had the same experience with pleural plaques legislation in Northern Ireland. The industry backed down when the legislation went through. Given that the insurance companies have reaped the benefit of these premiums over the years, is it not up to this House to make sure they pay out proper sums to the victims?

[Mr Brown]

The answer to that is that they did take the premiums and prior to 2007 there was an assumption that pleural plaques cases could go against the insurers. It was only the High Court 2007 judgment that put a stop to all that. The premiums did not have to be refunded; they were just kept. The figure I have for that is over £1.4 billion held by the insurers. If companies have taken premiums for something they are never going to have to pay out for, that seems to me to be a pretty good business.

[Toby Perkins (Chesterfield) (Lab)]

I also want to echo the comments of colleagues who have paid tribute to the work of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), and to pay tribute to the work done by Derbyshire asbestos support trust. It has done tremendous work in supporting asbestos victims. It had 14 new victims in the last year and they continue to come forward. I am very pleased with what my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) has said about the moral case being made for these people, and I also entirely agree that we need to work these arguments out, make the moral case for these people and make sure they get justice as quickly as possible.

[Mr Brown]

My hon. Friend will have his share of constituency cases, just as I do, and for the same reason: the industrial heritage of his constituency. We know that the profile of the victims is forecast to be different from the historical legacy, but it depends on the effectiveness of the protection measures we as a House have put in place. That was done with all-party consent—in fact, I think I was the Minister who moved the last set of regulations covering asbestos. We do not yet know how effective they are, however. As has been said from the Opposition Front Bench, we expect the number of cases to peak about now—in a year or so—but we do not know that that will be the case. I hope it will be, but we need to maintain our vigilance. The new cases will come from building contractors, people dismantling, rather than erecting, structures, and people who have come into contact through, perhaps, thinking they were dealing with a solid piece of material and who then hammered a nail into it or scratched it and breathed in the dust.

Exposure once is enough to cause mesothelioma and the consequences are fatal, so it is important that we take this issue seriously. I know the Minister is doing so and that the House is attempting to do so as well, but I think we should have it in the forefront of our minds that we may be returning to this issue in future.

The scheme before us today is targeted on people in a very particular position: they cannot find an insurer or they cannot trace an employer.

[Mike Penning]

It is important to remember that this is about employee liability in cases where the insurer cannot be found. A great deal has been said about public liability, but this scheme would not cover that. The right hon. Gentleman is right to say that we will see more and more examples of schools in which pupils will have been affected, but that will be covered by public liability insurance. Schools and similar institutions are public places, so it will be a lot easier to find the insurer involved.

15:00

[Mr Brown]

I agree wholeheartedly with the Minister on that point. My thoughts are with the young children in Leeds who found an abandoned pile of what turned out to be asbestos dust that had not yet been mixed with water and used for its purpose. The children, being children, formed it into “snowballs” and threw them at each other and breathed in the dust. Some 40 or 50 years later, their cases are now turning up as mesothelioma cases, but who is the insurer or the employer? It is difficult to say who is the responsible party. No one could possibly argue that those young children contributed to the ill health that they are suffering later in life. The Minister rightly says that we must deal effectively with such public liability cases, and I wholeheartedly support him in trying to find a way of addressing the matter.

There are two arguments against my proposal for 100% compensation. The first—and, incidentally, the weakest—is that it would incentivise the victim to see whether there was an insurer or employer against whom a case could be taken. It is argued that the prospect of getting 100% compensation, compared with 70% under the proposed scheme of last resort, would incentivise someone—whose life expectancy was now a matter of months rather than years—to go out and hunt for the insurer or employer, using whatever resources were available to them.

Let us pause and think about that. How on earth would an ordinary citizen go about tracking down those missing people? A good argument that was made in the other place was that the incentivisation should surely work the other way round. If there is to be incentivisation through paying less compensation, surely we should make the compensation not 100% but 110%, so that the administrators of the scheme, who had access to the former insurance companies’ records, would have to go hunting to determine whether it was possible to launch a case. They should be the ones to be incentivised. I am not arguing for more than 100% compensation, by the way, although I did table a proposal to that effect in Committee.

I believe that any incentivisation should work in that way, rather than suggesting that some poor old victim whose days are numbered should turn themselves into a modern-day Perry Mason and hunt down an employer that probably no longer exists—particularly in the case of a contractor—or an insurance company that has gone into receivership or will not acknowledge its liabilities. I think that the argument about incentivisation is pretty disgusting, and I do not support it.

[Sammy Wilson]

Does the right hon. Gentleman also accept that the very people towards whom the incentive might be directed are least able to track down those organisations? The situation would be doubly unfair, because their health is not great and they do not have the resources to do the tracking.

[Mr Brown]

I agree 100% with the hon. Gentleman, who represents a community in Northern Ireland with exactly the same history as that of the former Swan Hunter shipyard workers and others whom I represent. We have a common cause in this regard. A lot of help is given by the trade unions in the shipyards—the cases involving Short’s and Harland and Wolff are exactly the same as those involving Swan Hunter—but even with that help, the balance of advantage remains with those who know the insurance industry. Those with links to the relevant trade associations have the resources to find out whether the insurers still exist, and can find that information pretty quickly these days. Some work has been done to try to improve that process, and I am grateful for the efforts made by our Government and the present one to ensure that that continues.

The principal objection to the payment of 100% compensation is that it would break the agreement that the Minister has made with the industry. I know that he does not take offence when people like me say that a lot of premiums have been taken to insure against things that the industry is now not going to have to pay out on. It would pay out if I had my way, but the law established in 2007 says that it need not do so. The pleural plaques judgment has meant that the industry is the beneficiary of the premiums that it has taken in relation to pleural plaques, although not to mesothelioma, because the cause of action has been struck down. I think I am right in saying that that does not apply in Scotland or Northern Ireland, although it certainly does in England.

[Mike Penning]

I apologise for not intervening on the right hon. Gentleman earlier before he moved on to this point. I completely agree that it is spurious to argue that 100% compensation would act as an incentive. That suggestion has come from other parties, but certainly not from the Government. I want to place on record that that is not the Government’s position.

[Mr Brown]

I am grateful to the Minister for that intervention, and for its tone. The incentivisation argument is a distasteful one, and I am glad that the Government are not associating themselves with it. That makes it clear that the argument is about affordability within the parameters of the scheme.

I accept that the case for 100% compensation cannot convincingly be made, even by me, if the test is affordability within the parameters of the scheme. Amendment 1 proposes a figure of 80%, and whether that would be affordable within the parameters of the scheme is a finer point. I am not giving in, however. I believe that the victims deserve 100% compensation, but I understand that, if the Government are saying that the test should be the parameters of the negotiated scheme, we will have to maximise the money available to the victims within those parameters. We have all used the useful chart produced by the Minister’s Department as the factual background to the debate. The outcome will depend on whether we factor the percentages over four years or whether we take a longer, 10-year view. The Minister will not be surprised to hear that I take the longer view because I want the victims to have more money.

In determining whether the proposals are affordable within the parameters of the scheme, the Minister needs to explain two points. First, he must explain why 80% compensation would not be affordable, on his own figures. My submission is that it would be if it were spread over a longer time period and therefore cost less per year. The second point involves the cost of lawyers. This is set out in regulations, and the Minister is right to say that it should not be in the Bill itself, but the legal costs are going to have to be met. The estimate was £2,000 per case, but the figure then rose to £7,000. It is not clear which is the right figure. I do not want to mislead anyone; the cost will not come out of the money awarded to the victim, but it will come out of the overall cost of the scheme. The question of whether the cost is £2,000 or £7,000, or somewhere in between, will therefore make a difference. Will the Minister tell us what the correct figure is?

[Mike Penning]

The figure is £7,000, and the right hon. Gentleman is right to say that the figure comes out of the overall cost of the scheme—out of the 3%. If the claimant pays less than that figure, they keep the difference—thus, it becomes part of their compensation. We discussed the reason why the figure moved in Committee and in the Lords: it was felt that £2,000 was too low and so people would not get the sort of legal advice they needed. We desperately did not want the situation that had happened with other schemes whereby the legal teams got more money out of the compensation than that—that is why the figure is £7,000. In the negotiations I have been having, the feeling has been that the actual amount will be less, so the recipients or their loved ones will get the difference.

[Mr Brown]

I understand what the Minister is saying, and we all travel in hope—I certainly travel with him in hope. I hope this does not sound unduly cynical, but once the legal profession knows that a maximum of £7,000 is available for the cost of administering this, the work done and the effort put in by the individual law firms is likely to rise up towards the £7,000 ceiling. The Minister’s hope that simpler and more straightforward cases will confine themselves to a lower fee is correct, and I am with him on it, but I have the feeling that things will not work out that way. If they do not, there will be a cost on the scheme and so it will become harder to say, “We will put up the money for the victims” because the 3% ceiling will have been approached.

The second issue in this group of amendments is when the scheme should start. The Government’s proposal is to start it in 2012—backdating to the commencement of the Bill’s proceedings. My argument is that it should be backdated to the date of the consultation that led to the Bill. The consultation started under the previous Labour Government and was designed to meet exactly the same problem that the Government have identified. That consultation was on a slightly more generous scheme than this one, but of course the fruits of that consultation have not been heard and the discussions were only in their infancy when the general election interrupted proceedings.

It would be possible to make a case for a much earlier start date for a scheme of this nature. We could go back to the date of guilty knowledge for the industry as a whole, which would take us back before the second world war—if we were being really rigorous. There are certainly milestones in how our thinking has developed on these issues which go back a lot earlier than 2010. However, the Opposition Front-Bench team and I have put forward the most modest proposition that it would be possible to conceive of. We are saying that the start of consultation was the start of legitimate expectations in the minds of the victims who were being consulted and it put the industry on notice that there was to be a statutory scheme or that at least the then Government were contemplating such a scheme. This could not have come as a complete surprise to the industry.

[Alison Seabeck]

I entirely agree with the point my right hon. Friend is making. When the consultation was taking place under the previous Labour Government, my constituents did become enthused. There is not too much to enthuse someone suffering from mesothelioma, but they were enthused because they felt there was some light at the end of the tunnel. It is, therefore, entirely appropriate that we do look back in this regard. I have no doubt that the insurance companies, which understand risk better than anybody, would already have started planning at that stage to deal with a start date going back to 2010.

[Mr Brown]

My hon. Friend, who represents a community that faces exactly the same issues as mine for exactly the same reasons—wrongful exposure to asbestos dust—will have constituents raising exactly the same issues with her. She says that the industry ought to be experts in assessing risk. That is certainly true, but it did not half get it wrong over asbestos. We can all remember the crisis over asbestos liabilities that the industry went through. What relieved the burden more than any other single thing was the 2007 judgment on pleural plaques, which meant that that much larger swathe of cases was taken off the shoulders of the insurers, so the remaining insurers were better able to deal with the mesothelioma cases. We also saw some unhappy episodes relating to the work of Lloyd’s. We will perhaps not go over those again, but they did not reflect well on the industry, which is why we should be a little careful before taking everything it says to us absolutely at face value.

15:15

The other point to make for the earlier start date relates to the short life span of the victims. New drugs such as Alimta, however, are offering a few months’ extra life to the people for whom they actually work—responses to these drugs are different depending on the individual. We are talking about an early but very promising development, and I am proud of the work that Newcastle university has helped to do in the development of this intervention. This underpins the points made in our earlier debate about the need for more research. If we bring the start date back, living people could possibly just come into the scope of the scheme. In any event, their families will fall under the scheme and it is for the dependants and the families that we should make this modest decision and use the start date of the consultation, when the then Government’s intentions were clear and the industry was put on notice, rather than do the meanest thing possible and make the start date 2012. I understand that it is anticipated that an extra 600 cases, or something of that order, would be affected by such a move, but the Minister will have a better figure.

[Mike Penning]

The right hon. Gentleman has alluded to the fact that I am trapped within the funding parameters of the scheme. It will be 80 million extra if we took the start date back to 2010 and that would take us outside the scheme—

[Mr Brown]

I take it that when we are talking about “80 million” we are talking about money rather than about people—I know that there is a separate debate about immigration and so on.

[Mike Penning]

I apologise if I have misled anyone; I was talking about the funding parameters I am restricted by. The cost of taking the date back to when the consultation started would be £80 million. One other issue that we discussed in Committee was that although the consultation rightly contained an option that the then Government were looking at taking forward, there was also an option to do nothing. That is obviously an issue, but the big issue is the money.

[Mr Brown]

On that last point, I am more aware than anyone else in this place could be of the forces that would be in favour of the option to do nothing, and I have paid my tribute to the Minister for doing something rather than nothing. He should take pride in the job he has done, and I pay him all credit for it. That £80 million will be the top figure—it will be the highest possible figure that the officials believe they can give the Minister so that he can use it to dissuade the House. I am not entirely convinced by it. He cannot possibly know the real figure, because we will not know that until the cases come forward—it could well be a lot less. I would be willing to take a chance on it and to do justice to the victims. Let us stand the Minister’s argument on its head. He is inviting us to do the victims of this horrible disease—or, more likely, their families and dependants—out of £80 million. I do not want to do that, so I will want to put the proposition to the vote.

[Tracey Crouch]

It is a pleasure to follow the right hon. Member for Newcastle upon Tyne East (Mr Brown), to whose contribution I listened with interest. I rise to speak to amendment 1, which stands in my name and that of other hon. Members from all parts of the House. It is an amendment on a variation of the theme: there is not a consensus, particularly among campaigners for fairer compensation for mesothelioma victims, that the current 75% figure is acceptable. Despite the excellent efforts of Lord Freud and the Minister to bring this Bill before the House, I am afraid that there is still some disappointment that the level of compensation does not go far enough. My amendment seeks to increase the level of compensation from 75% to 80%, and not to the higher percentages proposed by others. Although I recognise that 100% would be the most perfect outcome for victims, the truth is that the Bill would probably not be in front of the House today if that were the case and if that were the only option under consideration.

Although an extra 5% compensation does not sound very much, it is the equivalent of an average extra £6,000 to the victim, which is no small sum to someone trying to finalise their financial arrangements before they pass away. To those of us who seek justice on their behalf, that seems a much fairer figure, not least because they will be asked to give back 100% of the industrial disease and social security benefits that they have received as a consequence of getting mesothelioma, and that is estimated to be around £20,000 on average.

Much has already been said on that issue during previous stages of this Bill in both Houses. I will repeat what I said on Second Reading, which is that Lord Freud deserves praise for negotiating with the insurance industry and for raising the original figure for compensation from 70% to 75%. However, sources in the insurance industry told me that Lord Freud himself wanted 80%, and therefore by moving this amendment today, I am merely reiterating the Minister’s previous desire for a better outcome. Then, with the support from colleagues today, he could have a parliamentary mandate to go back to the industry to start renegotiating compensation levels.

The negotiations and their subsequent outcome were based around another figure—that of the cost of the scheme to the insurance industry being no more than 3% of gross written premium. The argument for introducing the arbitrary figure of 3% was to ensure that the insurance industry would not pass on to its own customers the cost of running the scheme. In its more recent impact assessment, the Government surprisingly stated:

“It is possible that insurers will pass the cost of the scheme onto customers via increased premiums. If it did happen the impact on customers would be relatively low, estimated at 2.46% on average per year on EL insurance premiums.”

Given that inflation is currently running higher than the estimated potential increase in employers’ liability premiums as outlined in the impact assessment, I am pretty certain that the premiums will go up regardless of this scheme. That means that the insurance industry will incur no net loss as a consequence, especially as it will still receive the same Government funding incentive to smooth the first four years of the running of the scheme. The argument being put forward about the EL insurance premium rise is a bit of a red herring. The real debate is around the assumptions of the scheme. Under previous assumptions of legal costs, the scheme could have been extended to provide compensation of 80%. We have had that debate before. We had it on Second Reading and throughout the Committee stage, and the right hon. Member for Newcastle upon Tyne East has mentioned it again. Revised figures of costs—assumptions provided to the Department by insurance and personal injury lawyers—mean that 80% compensation would push the levy over a four-year period above the 3% figure, albeit marginally. However, over a 10-year period—the period I too prefer to look at given the longevity of the mesothelioma disease and when it is likely to occur—80% compensation is well below the threshold at 2.61%. Arguments over the precise nature of legal costs aside, albeit ones that were superbly made in Committee by my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips), it seems incredibly unfair that two days before Second Reading in this House, assumptions were changed, and that was wholly for the convenience of the insurance industry. Unfortunately, that means that the victims of the disease will not get the extra compensation they deserve.

I have been warned that if my amendment were to be agreed, the insurance industry would walk away from providing the scheme. I am afraid to say that that is bunkum, and it would be incredibly foolish of the industry to do such a thing. It has highly paid public affairs advisers—I should know as I was one before I entered this House—who will be telling their bosses to read the mood music from the contributions to debates on this Bill in both Houses. There have been calls for the scheme to pay out compensation of 110%, 100% and 90%. There have been calls for the legislation to extend to other asbestos diseases such as pleural plaques and to include those suffering from mesothelioma from secondary sources. There have been references to the profits made by the UK’s £40 billion insurance industry and there have been expressions of disappointment in the long-term failure of the industry to deal with this matter prior to statutory intervention via this Bill.

Do I think the insurance industry will walk away from this Bill leaving tens of thousands of mesothelioma victims without compensation? We are talking about victims who contracted a fatal disease because they did the honourable thing and went to work to provide for their family and who need this scheme because of poor record keeping by the insurance industry and/or their employers. No, I do not think that will happen.

[Mr David Anderson (Blaydon) (Lab)]

I congratulate the hon. Lady on what she has done and on what she is saying so far today. I hope that she is right, but does she not understand the track record of these insurance companies? They have challenged mesothelioma victims for decades, and I hope that we can stop them today because people are getting fed up with the way they behave.

[Tracey Crouch]

I am grateful to the hon. Gentleman for his intervention. Decades ago, the insurance industry would have held up its hands and said that, in hindsight, it had treated victims very badly. To be fair to the bigger players in the insurance industry, they have certainly tried, over the past five to 10 years, to improve the system of compensation for victims. They have set up the Employers' Liability Tracing Office and provided funding for research. Some of those bigger insurers have started to play catch-up for the mesothelioma victims. However, I recognise the concerns expressed by the Opposition over pleural plaques. As it happens, I was part of the insurance team that ensured that pleural plaques did not become a legislative issue in this House, and I stand by that decision today. That will remain a difference of opinion that we have on a specific asbestos-related disease. Where we do need consensus is over mesothelioma. It is a fatal condition and one that will kill somebody incredibly quickly and very painfully. I want to make sure that those victims who cannot trace their insurer or employer have access to the scheme and get the highest amount of compensation possible.

[Andrew Percy (Brigg and Goole) (Con)]

My hon. Friend is making an excellent speech. She said that people will be looking at this debate and, with that in mind, I hope that she understands that I also want to support her amendment this afternoon. However, the impact of the £6,000 she mentioned—the additional 5%—on the people in my constituency who have been affected, or know someone who has been affected, by this, cannot be underestimated. I entirely concur with what she said on the figure, and I hope that the Minister will listen and consider how the £6,000 will impact on the people in our areas.

[Tracey Crouch]

I am very grateful to my hon. Friend for raising that issue. The people we represent share a similar profile and we both have former dockers in our constituencies who will contract mesothelioma in the future, so I am very grateful for his support. I know that the current and future victims will be grateful to him.

[Mr Sheerman]

I know that the point about traditional employment and so on has been reiterated many times, but my dear brother, Robert—Rob—who died of this disease, worked in the research centre at Sunbury-on-Thames for British Petroleum, one of the leading science and technology companies in the country. As my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) said, those people knew about the disease very early on. Does the hon. Lady agree that the insurance industry too often hides behind the trade association, the Association of British Insurers? We cannot get through to the real insurers as that very combative trade association gives them cover.

[Tracey Crouch]

I am interested in the hon. Gentleman’s first point about occupations. We must be very clear that this situation is not confined to the traditional working class, although it is more likely to be prominent as they were more exposed to asbestos than anybody else. Anyone who has been exposed to asbestos is in danger of contracting mesothelioma.

On the hon. Gentleman’s second point, he must recognise that there are 150 players in the insurance industry and it is only fair that they should have a trade association that represents them. When I recently looked through the ministerial meeting list, I noticed that although the ABI was meeting Ministers, it did so with the top four insurers by its side. There are representatives in such meetings of the individual insurers as well as the trade association.

15:30

Let me go back to the question of whether the insurance industry will walk away from the Bill. I do not think that it will. It needs to be reminded that it will receive a £17 million taxpayer-funded gift to help smooth the running of the scheme for the first four years, followed by a £30 million loan. I think that that is rather ironic, given the fact that it will be part paid for by the victims through the recovery of benefits. The industry needs to be firmly reminded of that, not least because many people in this place could say what £47 million could be better spent on. We want to ensure that the mesothelioma victims get fair levels of compensation, but they will do so through Government-funded assistance to the insurance industry, which has been strongly criticised in the past for not doing enough.

Before the industry starts to cite pressures on finances because of flooding or economic circumstances—we can be sympathetic about some of the initial costs of the recent severe weather—it is important to remind it that the scheme has been long in the making. Risk analysis was done long before the Bill was introduced and reserves were allocated accordingly, which was a point made by the hon. Member for Stretford and Urmston (Kate Green). That is what good companies do: they manage risk for others and for themselves.

Let me, if I may, make a party political point. We should remind the industry that since the coalition was formed it has had its corporate tax rate cut and its employee costs reduced, that steady growth in the economy has created stability, particularly for those on the FTSE, that share prices have increased and that thousands of small businesses have been created, all of which will require some form of employers’ liability insurance. Business is good for the insurance industry at the moment.

I will defend the industry for many things, but, at a time when business is growing and returns on investments are being maximised, to threaten to walk away from a scheme providing victims with compensation that they should have been able to receive through the civil procedures but cannot, through no fault of their own—a scheme that will be funded through £47 million of Government money—is utterly outrageous. I am absolutely certain that that decision would come back to haunt them later and, based on other Members’ contributions today and in the Bill’s earlier stages, would have far more punishing consequences than that proposed in the amendment.

I will press my amendment to a vote this afternoon. I had hoped that I would receive the backing of the Government but, regardless of the outcome, I urge the Minister in this House and Lord Freud to return to the issue of increasing compensation for victims. If it remains at 75%, the question will not be over and could be returned to in the future. However, with cross-party consensus on 80%, not only would it be harder to increase compensation levels down the road and in the future, but it would be a welcome and worthwhile compromise for politicians, support groups and those most affected by this dreadful disease, the mesothelioma victims themselves.

[Jim Sheridan]

I speak as a former ship worker on the Clyde. I have seen at first hand the pressure that was brought to bear on employees who worked in and around asbestos and whose jobs were threatened if they refused to work with it. It was only with the support of the trade unions and the health and safety part of those unions that we managed to get that pressure taken off the employees and to give them the protective clothing they had so long deserved.

I do not think that I am the only person in this House who has had a visit from someone who has been diagnosed with mesothelioma. We can see the desperation in their eyes when they know that they do not have long to live and the only thing that keeps them going is the fact that they can get some compensation, not for them but for their families. That is the important thing. The most graphic description of mesothelioma I have heard was from a victim who told me that it was like a tree growing inside you which eventually chokes you to death. That is the kind of death we are seeing, and it is somewhat disappointing.

My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) talked about Scotland and pleural plaques. The Scottish Government took a different road and were successful in the courts in pursuing compensation for those with pleural plaques, but just for the record, no one in Scotland has received a single penny of that compensation because the insurance industry has now taken the matter through the European Court of Human Rights.

People will have different views of the insurance industry, but I personally have a very toxic view. That is based on my own experience some years ago in Scotland, where there is a different legal system. Then, when people were diagnosed with any asbestos-related disease, their claim died with them. The insurance companies would go to court and have sitting beside them a doctor who would, from a distance, try to gauge how long the person had to live, and the companies would then find some sort of technical reason to get their case put back or delayed in the hope that they would die and their claim would die with them. That is the reason for my toxic view of the insurance industry.

I spoke about the cut-off date on Second Reading, and my opinion has in no way changed. The consultation in 2010 was extremely clear in its intention, and the industry’s very competent public relations people—perhaps the hon. Member for Chatham and Aylesford (Tracey Crouch) might have been one of them—picked up on this issue immediately. There is no doubt that the companies have been preparing for the scheme since the day the consultation was launched, and there is no reason why we should be letting them set the agenda in this way. The rights of victims are being completely ignored by the arbitrary setting of a cut-off date in 2012. The argument that basing the legislation in 2010 is

“unlawful interference with insurers’ property rights”

does not give due importance to the rights of the victims. Having more money should not buy someone more rights, though under this Government that seems to be exactly the case. Nor do I believe the argument about the initial spike in payments. Insurance companies would have put money aside to alleviate the risk of making those payments, and even if they did not, the payments would be a drop in the ocean for this multi-billion-pound industry, which can easily afford to make them.

Between February 2010 and 25 July 2012, an extra 700 people will have died as a result of mesothelioma, and they should not have had to suffer due to the insurance industry dragging its feet. This proposal is affordable within the Government’s figures and, more importantly, it is fair.

[Mr Iain McKenzie (Inverclyde) (Lab)]

My hon. Friend and I come from the same area of the Clyde, which has had a long tradition of shipbuilding, and we know that victims of asbestos-related illnesses are still being identified. Does he agree that perhaps the insurance industry is looking ahead and estimating that what we had hoped would be the peak in the number of these victims is not the peak? In fact, still to this day, GPs on the Clyde actively ask people who go to see them with chest complaints, “Where did you work? Did you work near asbestos?” Is not that why the insurance companies are so reluctant?

[Jim Sheridan]

My hon. Friend and neighbour is absolutely right. He, like me and many people who worked in the industrial sector, whether it be in the shipyards, in the mines or wherever, live with the constant fear that a cough could develop into something more worrying like mesothelioma. In the industrial sector, regardless of the part of the country we come from, that is something we have to live with on a daily basis.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

In my constituency the kinds of activities that tended to provoke this condition, such as dock-related activities, declined some time ago. That was not, however, many decades ago, so this is still an issue for people in my constituency. Does my hon. Friend agree that months, let alone two years—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Unfortunately, interventions have to be very short, because others want to speak. If interventions could be shortened, that would help.

[Jim Sheridan]

My hon. Friend is absolutely right. The docks are another area where mesothelioma was a constant threat and problem, particularly in places such as Leith, which is a big dock area.

On compensation, as I have said, I think the numbers are still to peak. There is a mesothelioma problem in schools and I think the problem will only get worse. It will be interesting to hear what the insurance companies have to say about teachers and others in schools who will suffer from this horrible disease.

On the levels of payment, it is totally unjust and unfair that victims of mesothelioma whose documents were either lost or destroyed will receive less than 100% of the average compensation. In an earlier debate we argued that the level should be set at 90% of the average. A precedent has already been set in the Financial Services Compensation Scheme, which covers the liabilities of insolvent insurers in circumstances involving compulsory insurance.

We support the cross-party amendment 1, which would set a lower level of 80%, although it is not ideal. I think that amendment 4, which would set the level at 100%, is the fairest solution and perhaps that is what we would seek in a different and better political environment. I think that the insurance companies, as opposed to the victims, could agree to set the level at 80%. The 90% level was already affordable, as it was still within the 3% levy on gross written premiums with which not only the Government, but the industry, are happy. If we set the level at 80%, I am sure the insurance industry would not only be happy, but feel as though it had got a good deal. At least it would put an extra £6,200 in the pockets of victims. Morally, 80% is the absolute bare minimum the Government should be aiming for.

[Andy McDonald (Middlesbrough) (Lab)]

My hon. Friend is making a good point about the moral limit, but does he agree that the whole concept of contributory negligence and the apportionment of damages suggests that the victim is in some way responsible for the damage caused? That is anathema in these circumstances: these people are totally and utterly innocent, but they will walk away with less than what they truly deserve.

[Jim Sheridan]

My hon. Friend is absolutely right. We now live in a society in which some of this country’s most vulnerable people are being asked to pay the price with regard to not only mesothelioma, but other areas relating to quality of life.

[Grahame M. Morris (Easington) (Lab)]

My hon. Friend is making some excellent points. The clawback provisions mean that victims will have to pay back 100% of previously paid benefits. Is there not an inconsistency in the fact that the state seems to have a greater demand of 100% clawback, whereas the victims will get only 75% of the compensation due to them?

[Jim Sheridan]

My hon. Friend is absolutely right. Do we really aspire to live in the kind of society that does that to people? They needed those benefits for various reasons, but now 100% of them will be clawed back.

[Sammy Wilson]

Is it not even more disgusting that the money clawed back is then given in compensation to the insurance companies to reduce their costs?

15:45

[Jim Sheridan]

As they say in the best pantomimes, the hon. Gentleman is absolutely right—you could not make it up. It is incredible that the clawed-back money goes to the insurance company.

To move on to ring-fencing and the 3% levy, insurance companies will get a good deal from the Bill, as I have said. Even if they keep paying a 3% levy until no more mesothelioma cases exist, it will be a good deal. It is therefore completely right that the 3% should be ring-fenced. Colleagues have already mentioned many ways in which the Bill falls short, but the extra money that ring-fencing the levy gives could pay for some of those shortfalls: to compensate victims of other asbestos-related diseases, to research a cure or, indeed, to increase the fund payments to a much fairer 100% of the average compensation. The insurance industry well and truly expects to pay 3%, and is financially prepared to do so. There is no reason to let it get away with paying less.

I well understand that the Minister, who is a decent man, claims to have done his best on the issue, but I still think that there is room for improvement. I encourage him to continue to pursue insurance companies for a better deal for those who deserve it—the victims and their families.

[Andrew Bingham (High Peak) (Con)]

I do not intend to delay the House for too long. Many of the points I wanted to make have already been very eloquently made by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch). I pay tribute to the Minister and the Government for introducing the Bill, which I support.

As has been mentioned, mesothelioma is an industrial disease, but I assure the House that in my constituency—constituencies do not get more rural than the rolling hills of north Derbyshire—the incidence level of mesothelioma is higher than the national level owing to some of the industries operating there. As all of us in the Chamber and more widely know, through casework and from friends and relations, mesothelioma is a truly dreadful condition that causes great pain and is incurable.

I added my name to amendment 1, which I am now speaking to, because I think that 70% to 75% represents progress. In an ideal world, 100% would be the ultimate progress that we would want. However, the 80% figure is a good compromise: it is viable, doable and, as other hon. Members have highlighted, achievable. I do not think that insurance companies will walk away. In the world we live in today, more companies are concerned about their reputation, and given the cross-party strength of feeling in the House about compensation for mesothelioma, it would be reputational suicide for insurance companies to walk away now. I think that we can squeeze that extra 5% out of them, which would be better in the pockets of the victims of this dreadful condition than anywhere else.

I am proud that the Government have gripped the issue, but if we agreed to amendment 1, they could grip it just a little harder. That extra grip would make the mesothelioma sufferers’ prognosis that little bit better and I for one, as a Member representing a constituency affected by this dreadful condition, would be that little bit prouder and stand that little bit taller after what I had done here today.

[Simon Danczuk (Rochdale) (Lab)]

Like other hon. Members, I start by mentioning my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), who has done much on this subject. He organises an annual memorial event in Greater Manchester, in the city centre, and as a Greater Manchester Member of Parliament I have always been pleased to attend, so I thank him for his work in that regard. I pass on my best wishes to his family, and I hope he will be well again soon.

Hon. Members will be aware that Rochdale was home to the world’s biggest asbestos factory—Turner and Newall dominated the town for many years—and it is fair to say that the legacy of asbestos still haunts our town and its people. Walking around my constituency, it is hard to find anyone who has not been affected in some way by asbestos, whether through family members, friends or colleagues, many of whom have been affected by asbestos-related diseases. Asbestos destroys lives and breaks families. In Rochdale, it has left a community legacy in the form of a massive derelict factory site that nobody is prepared to remediate effectively.

The lack of justice and compensation for many of the victims of asbestos is a scandal that has lasted for far too long. I am pleased that the Bill is before us, but we must go further than what is proposed. I believe that the Bill falls woefully short of providing adequate compensation for the victims.

The Bill contains a number of arbitrary decisions that I think are designed purely to appease the insurance industry. First and foremost among those is the cut-off date for diagnosis, 25 July 2012, which my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) mentioned. I have heard no credible argument for why it cannot be put back to 10 February 2010, when the original consultation started, as my right hon. Friend suggested. I understand that that would assist an additional 700 people. The argument must not just be about cost. However, it is my understanding that with that change, it would fit within the 3% levy if it was taken over the 10-year period.

Secondly, the Bill is very limited in terms of who it supports and helps. It is being spun as a victory for asbestos sufferers, but it is limited to covering just mesothelioma victims and it will not affect people who have come into contact with asbestos domestically. That is a cause for concern.

My final point is about the level of compensation. Frankly, 75% is insulting. We must remember that the Government were proposing a 70% limit. My opinion is that a fair level of compensation would be 100%, as my right hon. Friend the Member for Newcastle upon Tyne East suggested. I am prepared to support an 80% level. That modest increase would at least give some comfort to the victims.

All those arbitrary decisions raise serious questions about the Bill. I get the impression that the Government are good at standing up for the strong insurance industry, but weak when it comes to standing up for the victims of asbestos.

I will finish by referring to the case of a lady called Mrs Nellie Kershaw. She started work as an asbestos spinner at the age of 12 in the Turner and Newall factory in Rochdale. In 1922, she became too sick to work and was diagnosed by a local doctor as suffering from asbestos poisoning. As it was an occupational illness, she was ineligible for sickness benefit from a local scheme to which she had contributed. Her husband, Frank, who was having to look after the couple’s two children, pleaded with her employers for assistance. They refused to offer any help and she died in poverty on 24 March 1924. To this day, she lies in an unmarked pauper’s grave in Rochdale cemetery. She was 33 years old when she passed away.

Nellie Kershaw was the first person in this country to be diagnosed with asbestosis. She and her family were left with absolutely nothing. Fast-forward 90 years and we are here today quibbling over who should and who should not receive compensation and over how much the compensation should be. As it stands, the Bill does the minimum possible to support asbestos victims.

[Mike Penning]

I am listening intently to the hon. Gentleman’s comments, but I am really disappointed by some of them. I understand him wanting to get more compensation, but the Bill would not be here today without Lord Freud fighting to get time, and this Government getting it on the statute book, which, as the right hon. Member for Newcastle upon Tyne East (Mr Brown) said, is difficult and had not been done previously. Most people who know me know I do not do party politics, but I cannot sit back and say that we have not done our bit because we are doing our bit—that is why we are here today.

[Simon Danczuk]

I accept the Minister’s intervention and I am not trying to be overly party political about the issue. As I said earlier, I accept that progress has been made, which I welcome, but I am pushing for more intervention from the Government, and for a better compensation scheme for my constituents and those across the country who deserve more from this Bill. I hope we can achieve that today.

[Ian Lavery (Wansbeck) (Lab)]

It has been a decent debate this afternoon. I am not sure whether we are here to discuss how perfect the Bill could be, or who would be the best recipient of the measures in it, but I think we are here for fairness and justice for individuals who have suffered greatly as a result of mesothelioma. There may be a difference of opinion about who we should be looking after—should we be looking after the insurance companies, or should we look after those who are suffering greatly as a result of mesothelioma?

Right through the Bill, from First Reading until now, the costs of the insurance companies have dominated the debate, yet we rarely discuss the individuals who have suffered and who have died. We rarely discuss the victims or those who are perhaps sitting on the sofa at home watching this debate now. As I am sure everyone is aware, once someone has been diagnosed with mesothelioma, they have a very short time to live. I just want people to be fair; I am not asking for the world, but I think that as politicians we have the right to be fair to ordinary people. Is anything wrong with being fair? Sometime we short-change people, which is not just or fair.

My hon. Friend the Member for Paisley and Renfrewshire North (Jim Sheridan) spoke in a previous debate of someone who went to see him and said, “This is horrendous; it is like a tree growing inside, and it eventually chokes you. It eventually kills you.” That is what we should be thinking about and discussing in lots more detail, not the fact that insurance companies have come forward with a potential 3% levy. What about those who are dying? What about the people who are suffering? Once they have been to the doctor, their life has ended. Let us start discussing those people.

[Mr Anderson]

My hon. Friend is being his normal forthright self. Does he feel—as I do—that he is in the middle of a negotiation, when, like me, he expected to be making the law of the land? We are basically saying that we make the law of the land if the insurance companies will agree to it. It is unbelievable.

[Ian Lavery]

I totally agree with my hon. Friend. I have been through the Bill and I am puzzled by the fact that there is a threat—if we do not agree to something that is a lot less than what people deserve—the insurance companies will walk away. I always thought that if the Government pushed through a Bill that said 100%, it would be 100%. If that is what the Bill says, surely that is what it means and what the insurance companies will have to do. From what has been said throughout the stages of the Bill, it appears that the insurance companies are running this, not Parliament. That concerns me because there have been great discussions and great debates on all sides, but I am yet to hear any persuasive reason why the victims should not receive 100% of their compensation.

[Grahame M. Morris]

My hon. Friend is making a powerful argument. The very lifeblood of insurance companies is the assessment and measurement of risk, so would it not be reasonable to have expected them, from the start of the consultation in 2010, to set aside a contingency fund to meet the full liability of the victims’ claims?

16:00

[Ian Lavery]

That possibly should have been considered, but we must remember that these insurance companies do not lack finance. They have had the money already, so why should we accept that those victims and sufferers—and their families and carers—should have anything less than 100% compensation? The claimants under the scheme have to meet the same standards of evidence and burden of proof as those who make successful civil claims. The only difference is that those who make a successful civil claim get 100% of the compensation.

The benevolence of insurers has been raised. Should we clap our hands or embrace the insurance companies because they have done a marvellous job with regard to the people we represent? Should we class them at this time of year as industrial Santa Clauses with presents for people who might not be here next year? Should we applaud the companies’ efforts? I think not. The insurers collected premiums in full and invested them for decades.

[Mike Penning]

The hon. Member is making a passionate speech, as he did on Second Reading, and he is rightly standing up for his constituents. I have to tell him that the insurers did not come happily to the table to have this discussion. When the discussions with Lord Freud started, they were told to come, and the negotiations were based on what we could get agreement on without putting a further burden on business—in other words, the 3% levy does not go on to new business. I heard what my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) said, and we will take a close look at that. We have to look at the context. Nothing had been done for so long, but now something is being done and the insurance companies are not happy about it.

[Ian Lavery]

Every hon. Member who has spoken today understands that the insurance companies had to be dragged to the table, because contribution after contribution has cited examples where the first thing an insurance company does after an individual has been diagnosed with mesothelioma is run away and deny it for as long as possible in the hope that the problem goes away. In Committee, I applauded the work done by successive Governments in getting the Bill to this stage. We are just a little too far away from this Bill being absolutely fantastic for mesothelioma sufferers. Three or four points mean that it is nowhere as good as it could be, and some great arguments have been made today on how to bridge the gap.

I return to the point that the insurance companies are not companies that are just surviving. They have made profits over generations—10, 20, 30, 40 and 50 years. They took the premiums and invested the money. Never mind contingency funds, the funds should be there—unless, of course, the money has been paid out in dividends or in other ways. That means that the money that should have been there for mesothelioma sufferers is not there any more because it has been given to shareholders. That is simply a point. The insurers paid out nothing on the untraced policies that they lost or destroyed. Again, that is not the fault of the people who are suffering—it is not their difficulty. Remember, the only thing wrong that they have done is to attend the workplace. For goodness’ sake, we cannot forget that that is the main point.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Does my hon. Friend accept that in terms of events in the workplace we are talking about identical events with a different period of maturity into full-blown mesothelioma? Some people with identical circumstances will not qualify, while others will. Will he speculate on the issues that that may cause? Someone may have been through the same process as the person sitting next to them in the workplace—in the case of Southampton, handling blue asbestos in the docks, bailing it up and throwing it on to the dockside—with the disease appearing many years later over different periods for different people—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We need shorter interventions—there are quite a lot of other speakers to get in. Interventions are important, but they must be shorter.

[Ian Lavery]

This issue has been explained. This is not just a shipyard, mining or other heavy industry problem; this disease can be contracted in the classroom. We really need to look at the position with asbestos in schools. I fear that not enough data have been kept on children over the years. People never believe, 30 or 40 years later, that they have mesothelioma. They think back to what type of employment could have caused it, but it could have started in school. I accept my hon. Friend’s point.

Lloyd’s made £2.7 billion between January and June 2012. Royal and Sun Alliance made £233 million last year. Aviva, between January and June 2013, made £605 million. That is just three companies. They are awash with finance. Believe me, Mr Deputy Speaker, they intend to continue to be awash with finance.

The regulatory impact assessment estimated that approximately 6,000 mesothelioma sufferers lost about £800 million in compensation due to untraced insurance. If we add that to the cost to the victims of other asbestos diseases, and the deal cooked up between the Government and their friends in the insurance industry, that represents a saving to insurers of about £1 billion. That is absolutely scandalous.

[Mr Anderson]

Does my hon. Friend agree that in 2007, as a result of the decision on pleural plaques, the insurance companies were handed a windfall of £1.4 billion that they were not expecting?

[Ian Lavery]

That is absolutely true, and that strengthens the argument put forward with regard to the apparent finances and wealth of the people who are threatening to walk away if they are asked to pay the right amount of compensation, or even more than 75% of it.

There are other examples where compensation has been paid at 100% or at 90%. The pneumoconiosis scheme in the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 pays 100% compensation and the Financial Services Compensation Scheme paid 90% to asbestos sufferers, so there are examples.

On the cut-off date, which my hon. Friend the Member for Southampton, Test (Dr Whitehead) mentioned, why on earth is 25 July 2012 being suggested? Why not February 2010? In other case law, compensation has been paid from the guilty date of knowledge. In this case, that would mean paying compensation right back to the 1960s, but the cut-off date is 25 July 2012, and that causes huge problems. I understand that with a cut-off date there will always be losers—that is a matter of fact—but the 25 July cut-off date was when the written statement was made on the Bill, whereas the consultation started way back in February 2010. That would seem to be the most appropriate cut-off date.

[Mike Penning]

May I politely correct the hon. Gentleman? The date in 2010 was when the previous Administration issued the consultation document, not when the Bill started.

[Ian Lavery]

Yes, the consultation document was issued in 2010, but the cut-off date in the Bill will be 25 July 2012. I cannot see any rationale for that. I cannot understand the reason for it. Eligibility should at least commence with the publication of the consultation document in February 2010, but, as I say, there are strong arguments for going back even further.

It comes down to whose side we are on. As politicians, we face tough choices every day of the week. Are we on the side of the victim who will sadly pass on within months, or are we on the side of the insurance companies, which, as the Minister said, had to be dragged to the table to pay any compensation at all? The insurance companies are getting £17 million from the Government just to start the scheme, and it has been agreed they will get a further £30 million from them through some sort of borrowing arrangement.

In conclusion, when someone with mesothelioma who is soon to pass on comes to one of our surgeries and we explain that the insurance companies have only to pay 75% compensation, I wonder what their reaction will be. It is not fair, it is not just, and it is not acceptable. Wherever there is 100% liability, there should be 100% payment.

[Sammy Wilson]

It is a privilege to follow the hon. Member for Wansbeck (Ian Lavery). He has brought the human side of this debate into the Chamber, which is important, because while we can throw around the percentages that insurance companies will have to pay, cut-off dates and so on, we need to remember that we are dealing with people who have suffered greatly as a result of their employers’ negligence, not their own, and whose suffering will inevitably result in death.

At the outset, I also pay tribute to the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who is fondly remembered in Northern Ireland, where he served as a Minister. Since he left office, he has always taken a great interest in the affairs of Northern Ireland. I also pay tribute to the Minister. Although I am critical of much of the Bill, I fully understand the pressures he came under when introducing it.

The insurance companies are not easy to deal with and when it comes to paying out, they are bullies. I had a similar experience in Northern Ireland when we were taking through legislation to overturn the House of Lords decision on pleural plaques. Officials advised that we should not do it as we would have a hard time. The insurance companies jumped up and down, threatening all kinds of legal action. They threatened to challenge the legislation in Northern Ireland; the argument was that we would be raising expectations and that the measure would be delayed for years. But at the end of the day, when it was seen that there was a determination to push it through—and it did go through—it was, ironically, the Attorney-General for Northern Ireland who challenged it in the courts, and lost. [Hon. Members: “Your friend?”] My friend, yes.

16:15

[Mike Penning]

I have had my own experiences with the Attorney-General when I was a Minister in Northern Ireland; I am sure other colleagues have as well. The difference between what is happening here today and what happened in Northern Ireland was that we have done a deal with the insurance companies before proposing the Bill rather than, as in the negotiations on pleural plaques, there not being a deal, so the legislation had to be forced through. That is the real difference; we have an agreement that will not affect businesses or premiums and will allow us to get the money through.

[Sammy Wilson]

I want to come on to that agreement. As the hon. Member for Wansbeck (Ian Lavery) said, at the end of the day this Parliament sets the rules by which insurance companies and everybody else must abide. I understand that the Minister has had the discussions with the insurance companies. I have to say that I think that the companies have come out with a very good deal. Do not forget; despite the fact that we are dealing with people who perhaps cannot trace where the insurance was with their companies, that does not mean that, in most cases, the insurance was not paid. The premiums went to the insurance companies. They benefited from the money and they have not paid it out when the claims were made. This is not a case of there never being any insurance paid, in many cases. In most cases, the insurance was paid and the insurance companies have escaped.

Secondly, as has been pointed out, as a result of House of Lords decisions and other decisions on claims that could have been paid for pleural plaques, for example, the insurance companies have got a windfall. We can debate the size of that windfall but figures up to £1.4 billion have been thrown around. On top of that, the Government will underwrite part of the cost; £17 million plus another £30 million loan to them. Then, the companies will only have to pay out 75%, and 50% of the people who should have been covered—because they did experience health problems as a result of exposure to asbestos—are not even covered. I reckon that that is a very good deal for the companies. If this House were to say, “We think that the deal struck is overly generous and we are going to make amendments to the Bill to compensate for the overly generous deal that was struck,” I doubt very much that the insurance companies would walk away or that they would challenge it, especially as the mood of the House is that many people who should have been included in this are not, and that there are levels of compensation that should have been paid that are not being paid. Those are the kinds of arguments that I have found persuasive when listening to the arguments for the amendments.

The Minister has sat face to face across the table with the insurance companies. It is his judgment that the insurance companies will not buy any strengthening of the Bill. Given the generosity of the deal and that insurance companies try to eyeball Ministers and see who blinks first, it is my judgment that if the Government stand firm, we can get a better deal for those who suffer enormously as a result of negligence.

[Ian Mearns (Gateshead) (Lab)]

Surely the nature of the insurance business in this respect is that the risk is spread over a whole range of different liabilities. The very fact that the insurance companies have done that means that they should pay up when they ought to. They are not doing so; they are trying to wriggle out of it.

[Sammy Wilson]

I wanted to come on to that point, so I will jump to it now. The risk is, of course, fairly minimal in any case. First, it has already been covered and, secondly, I heard the Minister say that this cannot be passed on through additional premiums on employers’ liability insurance. No Minister can guarantee that when insurance premiums go up, some of the marginal increase is not to enable the additional costs to be recouped by the insurance industry. I do not know what kind of scrutiny of employers’ liability insurance premiums the Minister intends to introduce to ensure that the costs are not passed on, but in any case, as the hon. Member for Chatham and Aylesford (Tracey Crouch) has pointed out, the insurance companies will already have made provision for this Bill.

[Ian Paisley (North Antrim) (DUP)]

My hon. Friend is making a compelling case. He is absolutely right about how the insurance companies will operate in this field. They not only insure the initial risk, but sell it on. We can be assured that they are definitely covered, and I believe that the Minister should take cognisance of that in making his decision.

[Sammy Wilson]

I thank my hon. Friend.

Let me deal with the two amendments that deal with whether the compensation level is acceptable. For 28 years, I represented east Belfast—the inner part within the shadow of the shipyard—on Belfast city council, and I saw and represented, at disability living allowance tribunals and so forth, many people who had suffered as a result of exposure to asbestos in the shipyard. I have seen the suffering that they went through. I have gone into their houses and seen people who could hardly walk across a 12-foot wide living room, who could not climb the stairs and who knew that they were in for a horrible and painful death. Those are the sort of people we are talking about, and that is the outcome of the exposure to which they have been subjected. That is what we are dealing with.

I must say that I find it grossly offensive that people who qualify for 75% compensation under this scheme will have 100% of their benefits taken from them, yet that will be paid back to the insurance companies to try to “relieve the burden” on companies that already have the money to cover the costs. We should bear that in mind when we look at amendments 1 and 4, which provide for increasing the level of compensation.

[Jim Shannon]

We are very much focusing on what happened to the individuals who had the disease, but perhaps we have not focused enough on the ripple effect on the families that comes out of that. Does my hon. Friend agree that it is not just individuals, but families and wider family circles that are involved, and that because of that, the squeeze should be put on the insurance companies to ensure that they pay more? Should not the Minister do that as well?

[Sammy Wilson]

We should, of course, bear in mind what it is like for any wife, husband or child who sees their father, mother or son going through the sort of agonies they have to endure when they die from this disease.

Let me deal with the issue of the cut-off date. I understand that cut-off dates are difficult: how should we choose them? No matter what is chosen, some people are going to feel aggrieved or short-changed. The proposer of the amendment spoke about a range of cut-off dates, going right back to before the war when people first knew that exposure to asbestos led to a terrible disease and death. However, there must be some logic to the cut-off dates that we set, and, in seeking that logic, we should be asking how we can apply it to encompass as many people as possible.

Although I am not particularly happy with it, there is logic in the argument for a cut-off date of 2010, when expectations were first raised and the insurance industry was first notified, and when preparations for the payment of compensation could begin. The Minister said that setting a date of 2010 would add £80 million to the cost of the Bill, but I should like him to explain how he arrived at that figure. Given the 75%, the cost of payments will be £343 million over the next 10 years. It has been accepted—and I saw the Minister nod on a number of occasions when this was mentioned—that the bulk of cases will arise in future years. How can we have a figure of £343 million for the next 10 years, during which we expect the bulk of cases to arise, and a figure of £80 million for the two years preceding 2012? Those figures simply do not add up. I should be happy to hear the Minister’s explanation now, or, if he prefers, when he sums up the debate, but I suspect that the figure has been over-inflated and gold-plated in an attempt to establish arguments for not setting a date of 2010, presumably because the insurance companies will ensure that that does not happen.

[Mark Lazarowicz]

Like the hon. Gentleman, I could not see where the figure had come from. If the Minister has that information, should he not give it to us now in order to illuminate the debate?

[Sammy Wilson]

I will happily give way to the Minister if he can provide an explanation. However, I should point out to him that even if we did incur an additional £80 million—and I suspect that it will be nowhere near £80 million, because £80 million does not seem logical—according to the Minister’s own figures, that would add 0.53% to the premiums that the companies would have to provide, while also encompassing, as we have heard, 700 people who are currently not covered by the scheme.

I realise that much of what I have said has been negative. I understand the pressures that the Minister is under, and I believe that the attitude that he has taken today shows that he genuinely wants to help those who suffer from this disease and will die as a result of it. However, I also believe that more can be done. I believe that logic is on the side of those who have tabled the amendments, and I trust that the House will support them when they are put to a vote.

[John Woodcock]

I shall speak only briefly.

I support all Members on both sides of the House who are pushing for more in this deal. As I said in an intervention earlier, Barrow contains the largest number of mesothelioma victims in the country. In most of those cases, the employer can be traced, because it was the Vickers shipyard. However, the families of the victims—wives who have seen their husbands die, children who have seen their fathers, and in some instances their mothers, experience that horrible, horrible death—are standing in solidarity with other families throughout the country, just as they have throughout the struggle for appropriate compensation that has continued for far too long.

Let us be clear about the fact that there can be no total fairness in this regard. If there were total fairness, people who went to work to do an honest job, to earn a living, to build ships and to work in industry would not have caught this disease and died in terrible ways, or caught a disease which is a ticking time bomb and which hangs over their lives now. Do we want to see premiums go up for current payers of insurance cover? No of course we do not, but it is absolutely clear that the victims who have waited so long for compensation should not be the ones who continue to bear the financial cost and penalty of this.

16:30

The Minister and his predecessors deserve some credit for taking on the consultation that the previous Government set out. As I have said before in the Chamber, my hon. Friends who were here before me pushed for this for so many years under the last Government and they should have got further faster, but that was not for want of trying by Ministers.

[Steve Rotheram]

My hon. Friend is making a powerful point, but does he agree that premiums should not be increased, because premiums have already been paid to insurance companies who made huge profits and distributed them to shareholders? They have had the money and they should pay out, as that is what happens with an insurance scheme.

[John Woodcock]

My hon. Friend is absolutely right. Insurance companies now have an opportunity to do the right thing and to be seen to be doing the right thing, and I hope they take it.

I said the Minister deserved some credit but I think he has blinked too early in this negotiation. We have all said we recognise the pressures he is under, but there are a lot of Members of this House who know a bit more about negotiations than I do and they will all tell him, just as I am about to do, that people do not tend to go into a negotiation saying, “Well, we’re going to offer this now, but, to be honest, there’s a bit further we could go so just push us a bit more and we’ll be prepared to give you a bit more.” They always say, “This is the last offer and we are not going to go further.”

[Mike Penning]

If that was what happened I would agree with the hon. Gentleman, but that is not what happened. The figure started at 70% and now we are at 75%. I have never blinked early in my life, and nor did Lord Freud.

[John Woodcock]

The Minister is absolutely right; it has gone up from 70% to 75%, but the case has been made powerfully and strongly today that he can go further, to 80% at least.

[Mr McKenzie]

Does my hon. Friend agree that the deal that has been struck is allowing the insurance companies to renege on their commitment to these victims, and, not only that, but perhaps we are seeing a precedent being set for industries who are yet to leave their legacy of industrial victims?

[John Woodcock]

My hon. Friend is right and that does not leave the insurance companies doing sufficient.

Of course time is a factor, and we do not live in an ideal world. Today we will probably not achieve giving these people everything that ought to be given to them, and God knows they have waited far too long already, but we should all thank the hon. Member for Chatham and Aylesford (Tracey Crouch) for her tenacity. She has brought her considerable expertise to bear on this. I am sure her former friends and colleagues in the insurance industry think of her as a poacher turned gamekeeper—[Interruption.] Perhaps it is the other way round in this instance. Her expertise and inside knowledge have enabled the way in which the insurance companies work to be exposed in the House today. Some of us will struggle to see the logic of the 3% cut-off. If we stretch this and have a longer period for making the pay-outs over the next decade, even by the parameters the insurance industry has set itself, the figure will still come in at 3%.

We have shown today that we can go further and I really hope that, even at this late stage, the Minister will listen to the arguments made in this House and improve what is on offer for the victims of this awful, horrible disease.

[Mr Anderson]

I will try to keep my voice going if I can. I appreciate the work the Minister has done but this debate saddens me. We have got a situation where employer liability was paid to these insurance companies. They have had their money and they have run with it. People have died, and that was not a surprise. We have known for a century that asbestos kills people, so the fact that people would need compensation was not a surprise. The whole argument about the cut-off date, and that we cannot just spring this on the insurance companies, is nonsense. Looking back over the last decade, at the Fairchild rules, the Barker rules and the Rothwell rules, we can see that those were all cases in which the industry tried to get out of its responsibilities.

I raised this point with the Prime Minister on 18 December. I asked him to intervene to try to resolve the issue and he said:

“I will obviously look at what he has to say”.—[Official Report, 18 December 2013; Vol. 572, c. 732.]

I understand the time constraints that he has been under since then, but will the Minister tell us whether the Prime Minister has had a chance to look at the Bill? Where has the Prime Minister been to take that look? Has he been to the TUC? The trade unions have supported people through this morass for decades. Has he been to the asbestos victim support groups, including those who have been here today, who have real-life experience of these matters? Has he been to the employment lawyers who have sat with the people while they have died, and with their families?

[Mike Penning]

As a trade unionist myself, I would have expected the TUC to contact me for a discussion, but it has not done so. Other groups, including victim support groups have. This is an interesting situation. I would have been more than happy to speak to the TUC, but it did not knock on my door.

[Mr Anderson]

I thank the Minister for his intervention, but I am talking about what the Prime Minister has done since he made a promise to the House from the Dispatch Box to look into the situation, knowing that the Bill was coming back to the House today.

Perhaps the Prime Minister has looked at what the employment lawyers have been dealing with over the years. Or perhaps he has done the other thing, and spoken to the people who have set the parameters for this debate: the people in the insurance companies. After all, he knows them all. They have bankrolled his party for decades, and they have bankrolled his constituency and those of hundreds of Conservative Members across the country. If a trade union had exerted that much influence, we on this side of the House would have been nailed to the wall. The Prime Minister knows the insurance industry well enough to have appointed the Association of British Insurers to lead the consultation. My hon. Friend the Member for Barrow and Furness (John Woodcock) talked about gamekeepers and poachers a moment ago. If this is not the most glaring example of that, I do not know what is.

At the end of the day, however, the Prime Minister could have gone somewhere much closer to look into this matter. If he had gone to his constituency office, he would have found a document in his in-tray that was sent to every one of us as constituency MPs. It is from the Asbestos Victims Support Groups Forum UK, and it is entitled “The Mesothelioma Bill [HL]—the Victims’ View”. I shall read out a few examples from across the country.

A constituent from Stockton North asks:

“After being robbed of my husband and father of two sons why am I now being robbed of compensation for my children?”

A constituent from Birmingham, Selly Oak states:

“I hope you never have to watch a loved one on oxygen fighting to get his breath, carrying it around to be able to live, or should I say exist. You have no idea what mesothelioma sufferers go through.”

A lady from Halesowen says:

“I watched my husband suffer for 3 years and then his horrific end to this illness. I’m sure that if the Ministers in Parliament witnessed this they would change the Bill without any hesitation”.

A lady from Eltham states:

“My husband was murdered. His name was Alan. My husband died aged 58 because he went to work every day in places riddled with asbestos.”

Mrs Barker from Staffordshire Moorlands says”:

“If you haven’t seen a man die of mesothelioma like I saw my husband in hospital then maybe you ought to go to a hospital. To see him go from a healthy active man to nothing, skin and bone, or anyone diagnosed with mesothelioma fall to pieces…is heart-wrenching.”

Mrs Bell from Telford states:

“My husband died within 2 months of diagnosis of mesothelioma. He was a strong, healthy man brought down to a weak, skeletal figure in that short time. Watching someone you love reduced to such a state is soul destroying.”

Mrs Barclay from Cannock Chase says:

“Come and spend time watching someone you love struggle to walk because of pain and lack of oxygen. My husband was 6 ft 2 in tall and now he is bent double struggling to walk.”

But the Prime Minister need not even have gone there; he could have gone to visit Mr Larrie Lewington, who lives in Witney and who said:

“I’m disgusted because 90% of the work I did was for people like the Ministry of Defence, police and hospitals. I now have this death sentence hanging over me for helping the government and they are trying to reduce the amount of money that I deserve. It’s an absolute insult. I could have had another 20 years left, everything else is perfectly healthy except this horrible disease. No amount of money will ever compensate what this has done to me and my family but it will help, and give me peace of mind that I can live without worry for the rest of my time.”

That is the real story here. It is not about whether the insurance companies can afford this or not; it is about the moral duty of the people in this House to do the right thing and not be told, “We might have to put the insurance bill up and some businesses will be wobbling.” We do things in this House every day of the week that put businesses, people, trade unions and every other organisation in the country under pressure, yet somehow we are saying that because we have this deal we should not put these people under pressure. There is absolutely no excuse for what is going on here today. The least that should be done is that we should start the scheme from 2010, because that is the last point when insurers can say, “We did not realise we were going to have to face up to this.” They should be made to face up to it. They have had their money and they ran with it. They should be caught, brought back to book and made to pay the proper compensation—anything below 100% is a disgrace.

The other clear disgrace—I am glad that the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) is in his place—is the concept that somehow the Government can claw back 100% of benefits from people and yet give only 70% compensation. Where on earth has that come from? Where is the morality in that? Has anybody made the case to say that that is fair? It is obviously wrong. Somebody who goes to the courts because the employer is identifiable will get, on average, £154,000, whereas under this scheme the most somebody will get, even though they have to go through all the same hoops, except that they do not have an identified employer or insurance company, is £115,000. So they are already £39,000 worse off. Then 100% of the benefit they had is going to be clawed back because they are lying on their death bed—it stinks! We have to put this right. If it is not put right today, we need to continue on it because this is not the end of the matter. If it is not put right in this Parliament, I hope that when Labour comes to power in the next one we will resolve it.

[Hywel Williams]

It is a pleasure to follow the hon. Member for Blaydon (Mr Anderson) and all the other hon. Members who have spoken most eloquently about this terrible disease in support of the proposal made by the right hon. Member for Newcastle upon Tyne East (Mr Brown), which my party and I support. The hon. Member for High Peak (Andrew Bingham) said that it seemed unlikely that he would be so concerned about mesothelioma, given that he represents a rural area, and the same applies to me; what does mesothelioma mean to us in rural Arfon?

In the early 1960s, a Ferodo factory was established just outside my home town of Caernarfon. The slate industry was dying at the time, and many slate workers were affected with the dust disease that led to the 1979 Act to which I referred earlier in an intervention. At the time, people believed in economic planning and the plan was to establish a large factory in the constituency to mop up the unemployment arising subsequent to the closure of the slate industry. Ironically, the factory was that of the Ferodo firm, which then used asbestos in the production of brake linings, leading to cases of mesothelioma in my constituency.

I will be brief because the arguments have been very well made this afternoon by a variety of hon. Members on both sides of the House, and I pay tribute to the hon. Member for Chatham and Aylesford (Tracey Crouch) for her interesting and well-informed speech. As has been said, the scheme is being set up for individuals who have not only been diagnosed with a terminal illness, but who have been suffering the misfortune of being unable to trace their employer’s insurers. It is plainly unjust that these claimants should automatically lose a significant percentage of the compensation that is rightly theirs through no fault of their own. The industry has argued that mesothelioma claimants should be encouraged to look at all other avenues before making a claim under the scheme. At a meeting I had some months ago with insurers, that point was made most strongly.

[Mike Penning]

It is the Government who are saying that a victim must do everything they possibly can to ensure they get a claim against an insurance company before they approach the scheme, because the scheme is a fund of last resort.

16:45

[Hywel Williams]

I stand corrected. However, that argument was made to me by representatives of the insurance industry when I met them on this issue. I understand the argument that it would spur people on to take any action they can and that the fund should be a matter of last resort, but it seems that we are in danger of giving the impression that the Government are heedless of the bitter realities and the ferocity of this disease. I am sure that the Minister does not see it that way, but that is the impression that might be given to sufferers in the short time that is available from diagnosis to the outcome. There are also cruel pressures on their families. As we have already heard, sufferers can die very shortly after being diagnosed, which leaves their families with little time to seek more positive avenues of compensation. There is the matter of basic humanity here. Should we expect people to use their precious final months of life to pursue these legal means of tracing their previous employers’ insurers when the fault is not of their making?

Briefly, let me repeat a point that I made in an earlier intervention. I referred to the slate industry and the fact that there is compensation for slate workers who are unable to trace the insurers of their former employers, and the compensation is paid at 100%. That is in respect of slate workers and workers in other industries, such as the jute industry in Dundee and the china clay industry in Cornwall.

I have heard the arguments and that there have been negotiations and that a figure has been arrived at, and I can see the practical politics of that. I will end by saying that whatever the technical aspects of the case, there is a moral issue here. I support amendment 4, tabled by the right hon. Member for Newcastle upon Tyne East, but if that fails, I will back the other relevant amendment.

[Kate Green]

I rise to speak to amendment 9 in my name and to support all the other amendments in this group. Amendment 9 seeks to enshrine in the Bill the 3% of gross written premium, which is the levy to be imposed on insurance companies to fund the mesothelioma payment scheme.

What I want from this amendment is a cast-iron guarantee that that levy will remain in place as long as the scheme continues. I am sure that the Minister feels that he has already given me that guarantee on at least one occasion—if not on many occasions. For example, he gave it in Committee on 10 December.

[Mike Penning]

May I reiterate the guarantee that I gave the hon. Lady in Committee and again today that it will stay at 3%?

[Kate Green]

I am grateful for that further assurance. On 10 December, the Minister said that 3% “is not going anywhere”. On 12 December, he said:

“Three per cent. is 3% and we have no intention of moving away from it.”––[Official Report, Mesothelioma (Lords) Public Bill Committee, 12 December 2013; c. 117.]

He has given us a further assurance this afternoon. He was a wee bit more equivocal, if he will forgive me for saying so, in his letter to Committee members on 17 December, where he said:

“We will look to ensure that the rate of the levy continues to be 3% of GWP...or equivalent to 100% of average civil damages.”

I am particularly concerned about this, because the Government’s impact assessment says that the levy will raise £371 million over 10 years, but I have subsequently learned from the economist at the Department for Work and Pensions that its modelling to arrive at that figure is based not on 3% “not going anywhere” but on how much it costs to meet pay-outs at 75% of average civil damages and the associated costs. In fact, the figure of £367 million in the impact assessment, which is what the Government have been relying on as the cost of the scheme that they say is affordable to the industry, means that the industry will face a levy of just 2.46% over 10 years. I know that the Minister has assured us that there will be a review after four years of the operation of the scheme of the amount the levy has raised and what can be done to increase the rate of payments beyond 75%. Indeed, the Minister has said to me that there might be other things that can be done, too.

If the industry can afford 3% today, it can afford 3% over the lifetime of the scheme. If the rate were maintained at 3% over the first 10 years of the scheme, it would raise £452 million rather than £371 million. That would be a further £81 million for sufferers that the industry is telling us it can afford. Indeed, the industry thinks that the scheme will run for 30 or 40 years and talks about there being a cost of £30 million to £35 million a year, or £1.2 billion to £1.4 billion over the whole period of the scheme. The cost of 100% payouts going back to 1968 will be £1.1 billion, so 3% would allow us a much earlier start date and to increase the rate while leaving some money over for research or to cover other diseases.

It seems to me that there is plenty of scope to enshrine the level of 3% in legislation. The industry can afford to pay it and we have no reason to believe that it cannot or will not be able to afford it in the future. The industry says that that is an acceptable levy that would put more money into the scheme, if not immediately then in subsequent years. The industry will face the levy during the first four years of the scheme, so we are not asking for any extra money during those years. I cannot understand why that levy cannot be enshrined in the Bill today.

I strongly support amendment 5 on the start date, proposed by my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), for exactly the reason given, for example, by my hon. Friend the Member for Wansbeck (Ian Lavery)—the guilty knowledge which backdates, even on the most modest reading, to at least February 2010 when the Labour Government launched the most recent consultation. I would argue that since that date the industry has been on notice that there will be a scheme, and one for which it will have to pay.

The Minister says that one option in the consultation was to do nothing, and that might be true. Consultation documents always contain a do nothing option, but that rarely suggests that nothing will transpire. I do not think that the Government of the day, this Government or insurers have thought that doing nothing was the option on the table. Labour’s consultation document specifically said that Ministers were

“persuaded that an Employers’ Liability Insurance Bureau…should form part of the package”

creating a compensator of last resort. The industry has been planning for a scheme based on market share of employers’ liability insurance, either historic or current. In its response to the Labour consultation, the industry concentrated on only two costed models and made it quite clear that that was the basis on which it expected the scheme to proceed.

It has been noted, although I think some of my colleagues were rather sceptical about the figure, that backdating to 2010 could increase costs by £80 million over 10 years. I think that figure is acceptable and understand why the Government have suggested it. We will see an early spike in claims during the first few years of the scheme and in later years, of course, we will expect the number of claims to reduce. I accept that backdating the scheme to February 2010 would breach the 3% levy by taking it to 3.56% over the first four years of the scheme, although it would be comfortably within 3% over the first 10 years. However, I strongly contend that for a multibillion-pound industry that is receiving, as colleagues have pointed out, a £17 million gift and a £30 million loan from the Government, it could easily swallow that cash-flow issue, especially given that, as has been pointed out repeatedly this afternoon, it has been taking income in premiums for such policies over years—in fact, over decades. The money is already in its hands.

Let me remind right hon. and hon. Members that it is not possible to access the scheme unless the technical committee that will manage it takes a view that an employers’ liability insurance policy was in place. It is not possible to access the scheme on the basis that there was no policy; there must be prima facie evidence that there was a policy and that premiums were therefore collected.

I understand and strongly sympathise with the points made by colleagues about the moral case for 100% of average civil damages to be the basis on which the scheme should operate. In fact, I believe that that is the Minister’s, and everybody’s, preferred moral position in relation to the victims of this horrific disease. I was very pleased to hear him put on the record—I think it is the first time he has had the chance to do so—that it was not his view that a figure below 100% was necessary to create some sort of incentive to sufferers to find an insurer rather than simply come to the scheme. I think we have all found quite offensive the suggestion that sufferers are in some way shopping around for the best deal. I am grateful to him for putting on the record that the Government do not believe that that would be the case.

I was struck by the point made by my hon. Friend the Member for Middlesbrough (Andy McDonald)—sadly, he is not in the Chamber at the moment—that because of well-established principles of contributory negligence, in paying out less than 100% to victims we albeit inadvertently send a message to them that it may be perceived that to some degree the suffering that they are facing is their own fault. That is an extremely unfortunate and unjustified message to send to victims who have contracted a disease simply from going out to work to earn a living and support their families. I hope we can all accept that whatever the constraints imposed by the deal that the Minister has been able to negotiate, the moral case for mesothelioma sufferers coming to this scheme is that they should be compensated in full.

The proposal by the hon. Member for Chatham and Aylesford (Tracey Crouch) is supported right across the House. We recognise that an 80% payout is a very reasonable compromise even within the terms of the scheme that the Minister has negotiated. There would be more money in the scheme if the Government and the industry stopped messing around with the likely legal fees that claimants would be facing. The fees were £7,000 and then went down to £2,000, which somehow magically allowed us to get the pay-outs up to 75%, and now they have gone back up to £7,000 again. The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) is not able to join us in today’s debate, but in Committee he made some very telling points about lawyers’ fees. He is a well-paid lawyer, so I am sure he will forgive me for saying that he ought to know —[Interruption.] The fees were considerably more modest than his fees, as I think we all heard. He pointed out that any assumption of the basis on which legal fees were calculated within the scheme would create the danger of that becoming the tariff for its legal fees. The Minister undertook to have further discussions to see whether it would be possible to bear down on the level of legal fees.

I have since been advised by an asbestos victims support group that it has been asked to help to get mesothelioma victims to put pressure on their lawyers to keep the fees low. That is unacceptable. At a time when they are coping with an appalling illness and worrying about the future for their families, as they know they may not even survive to receive the compensation that they are due, the last thing they need is to get into an argument with their lawyers about fees. I really hope that the Minister is able to do much more than simply pass the problem back to victims. Perhaps he will respond to that point in his comments.

Another issue that we discussed in Committee and have not yet got to the bottom of is that a whole range of other fees are covered by the levy, as we have debated during the passage of the Bill: the insurance industry’s legal fees of £24.2 million, as distinct from the victims’ legal fees; the scheme administration costs of £4.4 million; and the set-up costs of £1.4 million. In Committee, the Minister assured me that the industry’s legal fees would be spent to the benefit of claimants and said he would get back to me if he was wrong about that. As he has not done so, I assume that those fees will be spent for the benefit of claimants. However, since he told me that on 12 December, I have been racking my brains as to how they would be spent for the benefit of claimants, and I have not been able to think of anything. I therefore hope that he will now be able to give me chapter and verse on exactly how those fees are to be deployed.

I also hope the Minister will be able to confirm that the sum set aside for setting up and administering the scheme will contain no profit element. This is of particular concern, because we know that the insurance industry itself is likely to bid to run the scheme. The Minister assured us in Committee that the process of appointing the body to run the scheme would be a competitive one. He said it would be based on value for money and commercial criteria, which is welcome, but those criteria would not necessarily preclude the administrator from making a profit: they might simply have to come up with the best price.

I am still in some about doubt about the position on arbitration costs and whether they are also being taken out of the levy. The Minister has not yet responded on that.

All those factors could serve to deplete funds that could otherwise be deployed for more generous pay-outs or to an earlier start date. It really is not good enough that we are still in the dark at this very late stage as to how much of the levy is earmarked for expenditure other than direct payments to victims.

17:00

I welcome the debate we have had this afternoon and the attempts made by Members throughout the House to extend the generosity of the scheme to victims. I very much hope that the Minister will be able to give us some positive reassurances as to how that can be achieved, because I know he shares with all colleagues the wish for the scheme to be as generous as possible. It is strongly our view that there is every reason to believe—we have heard the evidence this afternoon—that the scheme can afford to be more generous than it is at present.

[Mike Penning]

I again thank colleagues from all parties for the tone of the debate and the measured way in which it has been conducted. I thank in particular the shadow Minister, the hon. Member for Stretford and Urmston (Kate Green), for her comments. I hope she will agree that we have been as helpful as possible to her, her team and other colleagues, not only through letters but through access to our team managers. I am slightly concerned about the technical questions she asked at the end of her speech, because I had hoped that they had been addressed. If I am not able to address them all now, I will make sure that my team contacts her to do so in the near future.

We have heard some excellent contributions. As has been said several times, morally I am probably in agreement with nearly everything that has been said. These people are not at fault. They mostly went to work in good faith and they have contracted an atrocious, abhorrent disease that is fatal. They and their loved ones need this fund’s support. There are no arguments whatsoever about that. Many of us are disappointed that we are still discussing this issue all these years after this terrible disease, its cause and its effects—it is fatal—were known about.

At the outset I thank the right hon. Member for Newcastle upon Tyne East (Mr Brown) for his very kind comments. I praise the work he did when he was a Minister trying to introduce a similar Bill. I also praise not only the support groups, but the trade unions, because without their pressure over the years we probably would not be in this position.

Having said that my moral position is absolutely as one with that of colleagues, I have to be a pragmatist. The Bill has come from the Lords and I am the Minister with responsibility for taking it through the House.

The hon. Member for East Antrim (Sammy Wilson) mentioned the figure of £17 million, but that is to get the fund going and to keep us below 3%. It is not being given to the insurance companies to do whatever they want with it. It is to get the fund running for four years. On the issue of 3%, the right hon. Member for Newcastle upon Tyne East was spot on to say that, although he was thinking of a 10-year period, I was thinking of four years, and that after that four-year period there will be a review.

I am restricted by the maths and our agreements. Could the insurers afford this? I have no doubt whatsoever that they could, but that is not the deal that has been struck. As has been said, the House could decide to set the limit at 80%, but I want this Bill to receive Royal Assent and for compensation to be paid in July. That is not happening at the moment and it has not happened for years. Could it be better? Yes, it could. I said as much on Second Reading and I have said so extensively elsewhere.

[Grahame M. Morris]

I agree with much of what the Minister has said. Will he respond to the point made by my hon. Friend the Member for Stretford and Urmston (Kate Green) about the 3% levy? If the advice is correct that the money will not be spent in the first years of the scheme, perhaps it could be redirected into medical research on the causes of mesothelioma.

[Mike Penning]

What I have said in Committee and today is that there will be a review after four years. I have committed to the 3% figure beyond the four years, as is absolutely right. I will come back to the £80 million that has been touched on in a second. Actuaries have looked at this very carefully and the Health and Safety Executive, for which I am also responsible, has looked at the costings. We will consider the review at the end of the four years, but there is no way in which the figure will drop below 3%. As far as I am concerned, that will flow through until we get 100% compensation.

It is very important for hon. Members to understand that we are talking about 75% of the average, which means that some people will be worse off—I fully admit that—but that some people will get more than they would have done if they had been able to trace their insurer or employer and go through the scheme. That is an interesting parallel. The percentage is an average, and in working with an average some will be on one side of the line and some will be on the other side of the line. I know that it is really difficult for those on the wrong side of the line in theory, but there will be people on the other side of it.

Where should the arbitrary line be? Of course I could say, as I did in Committee, that the consultation issued by the Government before the last election included a proposal to do nothing. I accept that there is a proposal to do nothing in most consultations, but it was there. I do not, however, think that that is the biggest issue; the biggest issue is how we stay within the 3% over the period and within our financial obligations. That is the position that I am in.

I cannot, obviously, support the 100% figure. I pay tribute to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) for her work on the cross-party group, including before she entered the House, but, sadly, I cannot accept 80%. We have discussed that, and I think that she understands why. I need to make sure that we stay within the realms of what we have agreed and get the Bill through the House and on to the statute book.

[Mr Anderson]

I regret to hear what the Minister is saying. One thing he could do is to change the clawback from 100% to 75%, which would at least give people a little more money.

[Mike Penning]

Some things are out of my hands, and such is the legal situation in relation to clawback. I cannot change that through the Bill. It just happens: if someone gets compensation, there is clawback on it at 100% because taxpayers’ money is used to pay the compensation.

[Bob Stewart (Beckenham) (Con)]

From what the Minister is saying and the feeling of the House, it may well be that the Bill is just a work in progress. Are we collectively agreed—the Minister, in particular—that we may well have to revisit the Bill properly after, say, three years and try again to give decent compensation to everyone?

[Mike Penning]

That is exactly what we are doing because there is a four-year review. It was announced in the other place, and I talked about it on Second Reading and in Committee. We are committed to the four-year review, which I know we will work on.

All the amendments would affect the speed at which the Bill goes through, because if we amend it today, it has to go back to the other House and there will be ping-pong. That would delay the compensation, which should be remembered by hon. Members who really want their constituents to get compensation. Along with the restraints on me within the agreement, that is why I will oppose the amendments. I hope that hon. Members will not press their amendments, so that we can make progress and get on to the next group.

Question put, That the amendment be made.

17:09

Division 169

Ayes: 232

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Labour: 214
Democratic Unionist Party: 7
Scottish National Party: 5
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Alliance: 1
Green Party: 1

Noes: 303

---

Conservative: 257
Liberal Democrat: 44
Independent: 1

Clause 4

Payments

Amendment proposed: 1, page 3, line 5 , at end insert ‘but shall not be less than 80 per cent of the average civil compensation recovered by mesothelioma claimants.’.—(Tracey Crouch.)

Question put, That the amendment be made.

17:24

Division 170

Ayes: 247

---

Labour: 216
Conservative: 12
Democratic Unionist Party: 7
Scottish National Party: 5
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Independent: 1
Liberal Democrat: 1
Alliance: 1
Green Party: 1

Noes: 286

---

Conservative: 241
Liberal Democrat: 42
Independent: 1

Clause 5

Applications and procedure

[Kate Green]

I beg to move amendment 10, page 3, line 32, at end add—

‘(3) Clause 18(2)(a) of the Commissioners for Revenue and Customs Act 2005 is amended as follows—

After sub-paragraph (ii) there is inserted—

(a)

(i) is made to representatives of persons preparing an application to the Diffuse Mesothelioma Payment Scheme or being assisted by that scheme to bring a claim under the Fatal Accidents Act 1976, and/or the Law Reform (Miscellaneous Provisions) Act 1934.”.’.

I apologise to the House for what will prove to be a rather technical and nerdy amendment. To reassure the Minister and the House before we start—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Will Members please leave the Chamber quietly so that we can complete the business before the knife at 6 o’clock?

[Kate Green]

I reassure the Minister and the House that it is not my intention to press the amendment to a vote. I hope that he will be able to offer me at least some indication of the way forward as a result of the concerns I am about to raise.

The amendment was discussed in Committee on 12 December and relates to the fact that Her Majesty’s Revenue and Customs has now decided that a High Court order will be needed in order for it to release the employment records of deceased customers and protect employers’ confidentiality. Clearly mesothelioma sufferers coming to the diffuse mesothelioma payments scheme will need to have employment records to demonstrate their prima facie case that an employers’ liability policy of insurance existed.

Under the Data Protection Act, disclosure about employers to customers while still living is permitted because that would be part of their personal information. But this cannot apply once the customer is deceased. It might then be possible to look to the Commissioner of Revenue and Customs Act 2005 to enable access to employment records but this does not appear to offer circumstances in which HMRC is prepared to release the records without a High Court order, as HMRC confirmed in a letter to the Association of Personal Injury Lawyers on 2 December last year.

Clearly this is a worry in relation to the diffuse mesothelioma payments scheme because it will be very burdensome for families to get such a court order—burdensome and potentially costly. We must recognise that the need to do so will be quite frequent because victims die so quickly after diagnosis. The Data Protection Act exemption that is available to customers while still living will in many cases not be available.

When we discussed the matter in Committee before Christmas, I asked the Minister what consideration had been given to the impact of the changed interpretation on mesothelioma victims. I asked what consultation had been carried out and how the change in interpretation could be reconciled with the Ministry of Justice’s aim to speed up the process of claims. I emphasise of course that this is an issue not just for those coming through the diffuse mesothelioma payments scheme, but for anyone pursuing civil claims in relation to the scheme.

Since our debate in Committee I have learned that the concerns that I raised are shared more widely. Coroners, in particular, are becoming very anxious. I am sure that the Minister will be aware that in the Liverpool coroners court the other day, the coroner required HMRC to produce the employment records of a Mr Roger Carmichael. HMRC, relying on its new interpretation of the law, declined to provide those records and to appear before the coroner. I understand that the ruling is now being challenged in a judicial review. Clearly, with the matter proceeding through the courts, both the Minister and I are going to have to be careful in what we say about that case—indeed, I do not intend to say anything about it.

What is clear, however, is that the situation is just a mess—a mess that will bear adversely on mesothelioma sufferers and one that we need to sort out. It is potentially a costly mess for the Government if, for example, coroners needed to be funded to make applications to the High Court for the release of employment records. It is potentially a mess because it could be a breach of the Government’s obligations under the European convention on human rights, particularly in respect of people’s ability to exercise their article 2 rights, which would apply to mesothelioma claims. It is a confused mess when it comes to coroners’ matters as to whether the Commissioners for Revenue and Customs Act 2005 or the Coroners and Justice Act 2009 prevails on disclosure—a mess that I imagine would be a subject of judicial review. In any event, if we are speedily to introduce the diffuse mesothelioma payment scheme, it is a mess that we—and, I am sure, the Minister—will want to see speedily sorted out.

This mess has arisen not because the law has changed, but because HMRC’s interpretation of the law has recently changed. Of course we understand and I accept that if HMRC receives legal advice saying that it should act differently from how it has worked previously, it cannot casually disregard it, but there is clearly an urgent need to clarify the exact position. The judicial review to which I referred might not adequately clarify the position for mesothelioma sufferers and their dependants coming into this scheme because, as I say, it might make a ruling only on mesothelioma matters before the coroner—not necessarily or likely to be applicable to accessing this scheme.

I know that the Minister recognised this concern when I raised it in Committee and he said that he was anxious to see it resolved, but reluctant to do it in this Bill because of his wariness around ping-pong. While I am, frankly, doubtful whether this would be a major stumbling-block if we had to ping this back to their lordships, who I think would be pretty happy to see an amendment put through simply and straightforwardly to address the particular problem, I understand that the Minister, in conjunction with his colleagues in other Departments, is now looking for another legislative vehicle.

That is certainly welcome, but I have to ask the Minister whether he is going to find that legislative vehicle quickly enough for it to be available before the diffuse mesothelioma payment scheme comes into effect? He has repeatedly stressed that this scheme needs to be up and running by the summer of 2014, which does not leave a lot of time to find a suitable legislative vehicle to sort out the problem and ensure that it is dealt with robustly so that the scheme can properly be the beneficiary of such sorting out. I am thus extremely anxious that the Minister might find himself in some difficulty if his colleagues cannot oblige him with a handy, urgent and useful Bill.

The Minister might like to think about accepting this amendment. It is intended to help what he says he wants to happen, which is to get the scheme up and running, operational and effective as quickly as possible. It is not a contentious amendment; it is not one about which there is going to be any dispute either here or in the other place in respect of what it is designed to achieve. The amendment is narrowly drafted to relate specifically to those seeking employment records in relation to accessing the scheme that this Bill covers. If the Minister is unable to accept my amendment, I hope he will be able to assure me at least that the matter will be sorted out in good time before the scheme comes into operation this summer. I hope he will explain how he thinks that will happen. We do not want warm words alone; we need specifics. Time to sort this out is becoming urgent.

[Mike Penning]

I thank the shadow Minister for tabling the amendment and for setting out her position early when she said that she would not press the amendment to a vote. She is quite right, and I reiterate the point I made in Committee: I do not think this is the right Bill for addressing that important issue. I agree that the change in HMRC’s interpretation of the existing law—as opposed to a change in the law itself—is a massive issue, but fortunately there is time for us to deal with it between now and July. I have been meeting Justice Ministers to discuss the matter. As I am sure the House will understand, the Ministry of Justice does not want the courts to be clogged up with people asking for court orders in order to obtain their employment records, and I am sure that that was not the intention when the legislation was enacted.

17:45

Our priority—apart from publishing the regulations, which we hope to do tomorrow—is to address this matter. I will meet a Justice Minister, and we will find a vehicle to simplify the way in which the employment records are obtained for those who are making claims on the mesothelioma fund, so that we can do exactly what it says on the tin. What we have wanted to do all along is secure a speedy resolution for those who need access to the fund because they have no other recourse, and it is imperative for the House and Ministers to ensure that that happens. I hope the hon. Lady accepts that we are working very hard, and are also asking for legal opinions on whether we can take some action between now and the passing of the Bill.

[Sir Edward Leigh (Gainsborough) (Con)]

Could the matter eventually be dealt with by means of delegated legislation?

[Mike Penning]

I understand that that is possible. It could also be dealt with through a deregulation Bill. In any event, we will find the necessary vehicle. As I have said, the Ministry of Justice does not want the courts to be clogged up with requests for court orders, and the matter will be resolved.

[Kate Green]

I am grateful to the Minister, I am also grateful to the hon. Member for Gainsborough (Sir Edward Leigh) for his helpful intervention about the possibility of secondary legislation. Perhaps the Minister could discuss with his colleagues and with the Government’s legal advisers whether the regulations under the Bill—which I expect to complete its passage later this evening—could be used as a vehicle for the change. Although more substantial Bills such as the Deregulation Bill may make some progress between now and July, we have not observed legislation proceeding all that speedily under this Government, particularly given the notorious requirement for a legislative “pause” while Ministers go off and rethink from time to time. Obviously, if the Minister has to use colleagues’ primary legislation to deliver his intent, he will be careful to select a Bill that would pose no such risk.

[Mike Penning]

Just to have a little bit of fun with the hon. Lady, let me point out that, having first been accused of trying to rush the Bill through, I am now being criticised for the fact that the Government are slowing down legislation. One cannot win, can one?

[Kate Green]

It must be tough being the Minister. I am sure that all our sympathies go out to the hon. Gentleman.

As I have said, I do not intend to press the amendment to a vote. The judicial review may give us some indication of the interpretation of the current legislation, which would be helpful, and I think that we should wait for that. I know that the Minister fully appreciates the urgency with which my amendment seeks to drive the process, and I hope that I can work with him to find and expedite the most suitable vehicle. If that turns out to be regulations under the Bill, we will stand ready to help him to ensure that they are passed.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Third Reading

17:48

[Mike Penning]

I beg to move, That the Bill be now read the Third time.

It is an honour and a privilege to be the Minister who has taken the Bill through the House so speedily, with the help of Her Majesty’s Opposition and many other Members. Let me explain why the Bill is necessary. It will provide a fund of last resort for those who suffer from mesothelioma as a result of asbestos poisoning, and for their loved ones. As was pointed out earlier by the right hon. Member for Newcastle upon Tyne East (Mr Brown), it has been on Ministers’ desks for an awfully long time. It is not perfect—I accept that it is not perfect—but it will, I hope, do what it says on the tin and get compensation to those who so greatly need it.

I want to pay tribute to those who have helped get this Bill where it is, in particular the civil servants in the Box this evening—my Bill manager, Lee Eplett, Rose Willis, Fiona Walshe and Jenny Vass—the Bill Committee joint-Chairs, the right hon. Member for Knowsley (Mr Howarth) and my hon. Friend the Member for Shipley (Philip Davies), and the Government Whip, my hon. Friend the Member for Devizes (Claire Perry), for their assistance in expediting the Bill’s passage. We had three days—six sessions—for the Bill Committee if we needed them. I think everybody who served on the Committee will accept that we discussed it at length yet we still had time to spare. That is exactly what should happen with a Bill; no one should come out and say, “We haven’t discussed it at length.” We will be finishing slightly ahead of schedule this evening as well. I hope the tone with which the Bill has been addressed during its progress through the House, with the assistance of Her Majesty’s Opposition, will be continued, and I pay tribute to the hon. Member for Stretford and Urmston (Kate Green) for the way in which she has worked with me and my officials so that, should the Bill get its Third Reading, we can send it off to Her Majesty for Royal Assent, get the regulations down, and get compensation paid to those who so desperately need it, hopefully by July. I commend the Bill to the House.

17:51

[Kate Green]

The Opposition welcome this opportunity to put a scheme into law that will provide a measure of payment to victims of what we are all agreed is a most horrific and terrible disease. I pay tribute to Ministers in this Government and past Governments who have worked over many years to bring us to the point we reach today, and also to Members of all parties who have been so determined to fight for the best possible deal for victims of this terrible disease. May I also place on record my thanks to the campaigners who have been actively and determinedly lobbying for many years for justice for victims, including trade union campaigners and especially the victim support groups around the country who I know have been in contact with many of us about the very complex and technical details of this Bill? I also want to echo the Minister’s thanks to his officials, who have been extremely helpful, in this Chamber and the other place, and to both Opposition and Government spokespeople, in ensuring that we all have a full understanding of the often complex and technical analysis of the likely consequences of different scenarios, which we sought to test as we considered the Bill.

The Minister said a few moments ago that the Bill is not perfect and we concur. We are pleased to have made the progress we have, but we regret that there have been some missed opportunities which many of us feel did not need to be missed. There was scope to have gone at least a little further than we have managed tonight. The Bill could be so much better than it is and, in the House of Lords, in Committee, on Second Reading and again this afternoon and this evening, Members on both sides of the House have highlighted its deficiencies and have suggested very constructive, practical—and affordable, where cost implications have been involved—ways to remedy them. It is disappointing that the Minister has felt under such pressure from the deal that has been done with the industry that he has been unable to accept any of the amendments, which I think have been brought forward in a very constructive manner. I think the Minister himself said that that has been the spirit in which we have sought to make the changes we have advanced.

However, we welcome the promise that the regulations that we will shortly be studying will provide for a review of the operation and effects of the scheme in four years’ time. We are determined to see that provision appearing in the regulations, and Members across the House will be equally anxious in four years’ time to hold Ministers to a full, meaningful and effective review that genuinely addresses the operation and consequences of the scheme and the potential for its expansion and extension.

It is a matter of concern that we are passing legislation today that we already think will need improvement in four years’ time. I hold the rather old-fashioned view that we ought to try to get legislation right first time, and it is a shame that we already know that Parliament will want to come back to certain areas of this Bill after four years. Mention has been made repeatedly during the passage of the Bill of the areas involved. They include: eligibility; access to the scheme; the cost of running and administering the scheme; the processes surrounding the scheme; the funding of research into the treatment and cure for mesothelioma; and, of course, the generosity of the scheme. There is a clear need for us to make progress in the development of each of those areas, and I believe that the Bill should have been used to ensure that progress.

On the question of generosity, it is widely agreed that there is no moral case whatever for sufferers to receive a pay-out of less than 100%. Even if we accept that there is a constraint on 100% pay-outs that is dictated by affordability—the industry has suggested that that affordability is restricted to an amount set at 3% of gross written premium—I suggest that that figure is laughably small in the context of a multibillion pound industry that has been collecting premiums and avoiding pay-outs for decades. There should have been some scope for pushing the industry for more.

Regrettably, the amendments to introduce an earlier start date, to increase the level of pay-outs and, crucially, to protect the 3% levy were all rejected by the House. The Minister was reluctant to accept them, and the House did not vote for them. Those amendments would have meant: more money for victims; more victims benefiting; the possibility of more asbestos-related diseases being covered; more funding for research; and the inclusion of the self-employed and those who are currently forced to access less generous schemes.

On research, the Government’s response, as articulated by Lord Howe in the House of Lords, has been welcome as far as it goes. We very much hope that it will bear fruit in bringing forward more, better-funded and more fully developed research proposals. However, we really cannot overlook the moral responsibility of everyone involved in the sorry history of asbestos exposure to invest now in the best quality research that we can possibly promote to tackle this horrible disease. It was pointed out earlier that our obligation is not just to sufferers who are experiencing and dying of the disease now, and not just to sufferers in the UK. Developing economies mean that exposure rates around the world will rise for many years to come. Good research programmes and proposals exist, and more will come forward. Ministers have given a welcome indication of what they intend to do to galvanise and support such proposals, but we will want to keep a close watch on the practical consequences and effects of the guarantees that have been given. Unless they turn into properly funded, meaningful research programmes, I fear that we will have heard little more than warm words.

We very much look forward to seeing the draft regulations, which the Minister has indicated will be available tomorrow. I hope that will give us the opportunity to see some of the details of how the scheme will be run, which remain to be teased out, even after our debates. We particularly wish to scrutinise the detailed operation of the scheme, because we know that the insurance industry hopes to create a vehicle that can bid to administer the scheme. Understandably, there is a certain amount of suspicion among victims’ groups about the industry, which has so wronged them over so many decades, now becoming the vehicle responsible for operating the scheme that is to give victims some level of financial satisfaction.

I have to say that the representatives of the Association of British Insurers who have discussed the Bill and the scheme with me have given me an encouraging impression of how committed they are to operating an effective and well-run scheme that will get funds moving swiftly to victims. However, as I am sure the Minister will expect, it is not enough that we have a scheme run wholly in the interests of victims; the scheme must also be seen to be run in that way. That requires a tendering process that is entirely transparent. It requires transparency about the costs of running the scheme and who is recouping what payments for running the scheme, including details on a range of costs and fees that we are still unclear about: the legal fees, the arbitration costs, and the set-up and running costs. Those simply must not deplete resources that ought to be available to make pay-outs to victims. I hope that when the regulations are introduced, much more financial and operational detail will be given about the running of the scheme.

I am pleased that the Minister is working with colleagues in other Departments to sort out some difficulties that lie outwith his control but which, none the less, threaten either to derail or to have an adverse impact on this scheme. He said that he was working collaboratively with colleagues—I hope he will be a little more assertive than that. We urgently need a resolution to the difficulties created for us by Her Majesty’s Revenue and Customs’ new interpretation of disclosure rules in relation to employment records. I hope, too, that he will continue the dialogue with the Ministry of Justice about the baffling correlation it makes between the Legal Aid, Sentencing and Punishment of Offenders Act 2012 provisions on mesothelioma and this scheme, which is, of course, designed entirely for victims who cannot access civil justice through the courts.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Has my hon. Friend had a response yet to the request in the letter she wrote to the Justice Secretary, which I believe was brought up in the Justice questions before last, about exactly this point? If so, will she enlighten us as to what the connection is between that Act and this Bill?

[Kate Green]

I am pleased to tell my hon. Friend that I have had a response. In fairness to the Justice Secretary, I should say that a response was received before Christmas. Clearly, he took note of the debates that were happening in our Committee, and the Minister of State, Department for Work and Pensions, the hon. Member for Hemel Hempstead (Mike Penning) was extremely helpful in expediting a response to a query that I had first raised in Justice questions on 11 November. I would be lying, however, if I said that I could now answer my hon. Friend’s substantive question as to what that connection is. It is not for me to put words into the mouths of Ministers or to suggest what Ministers think the connection is, but let me roughly paraphrase the letter. It said, “We think the two are connected because we are going to do them at the same time.” If I am doing wrong to the Minister’s colleagues in the Ministry of Justice, I am sure that they will want to make it clear how I am being unfair to them—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I have given the hon. Lady quite a lot of latitude in respect of her comments about a parliamentary question, but I would like her to return now, however tempting the question is from the hon. Member for Hammersmith (Mr Slaughter), to the Third Reading and what is in this Bill.

[Kate Green]

I am grateful to you, Madam Deputy Speaker.

The scheme that we will pass into law tonight is a start, but it is far from being all we can do for the victims of mesothelioma. I am glad that Parliament will keep close oversight of the scheme via the mechanism of the four-year report. That must be an opportunity for the fullest and most open scrutiny and should be taken as a genuine effort to develop and expand the scheme. As debate on the Bill has proceeded, it has been quite clear that it is the strong will of parliamentarians in both Houses and across all parties to secure justice for sufferers of this appalling disease, which was so often contracted by people who simply went out to work to earn a living to support their families, and yet in so doing were put under terrible threat. Today we have made a start in securing some justice for those victims, but there is much more for us to do. We can, we must and—as it is the mood of Parliament—we will do better for victims than we have been able to do to date.

18:05

[Tracey Crouch]

I am pleased that we have reached Third Reading of this Bill. It is a welcome Bill, but I remain disappointed that it is not as good as it could and should have been if we were to provide fair and reasonable justice to the victims of mesothelioma. I recognise the constraints that the Minister was under as a consequence of the negotiations that were made before the Bill entered this Chamber. Although it is a good day for the victims of mesothelioma, it could have been a great day for them had some of the amendments that were tabled on Report been listened to.

[Mike Penning]

Let me place it on the record—I think I did this earlier—that my hon. Friend could not have done more for her constituents during the progression of this Bill through the House. I paid tribute to her earlier on, and I do so again now.

[Tracey Crouch]

I am grateful to the Minister for his comments. My constituency has high levels of mesothelioma because of its dockyard history and the heavy industries that surround the Medway towns. Earlier, the hon. Member for Barrow and Furness (John Woodcock) expressed concern that I might be poacher turned gamekeeper as a consequence of my time in the insurance industry before coming to this place and trying to secure better compensation for mesothelioma victims. My bosses from my previous life know that I was strong campaigner for mesothelioma victims. Indeed I was proud of the efforts that I took during my time in the insurance industry to try to improve access to compensation. It just so happens that I was also elected to a constituency that has high levels of mesothelioma.

I am pleased that we had a debate today, but, as I have said, I remain slightly disappointed that nothing has happened to the Bill since it received its Second Reading. I see that as a failure in the way that Parliament works. Although I pay tribute to the Minister’s officials, who have worked incredibly hard and been generous with their time, it is a shame that the Bill that was prepared before our debate in Parliament is exactly the same now despite the fact that there is a strong will on both sides of the House to improve the legislation.

Let me pay tribute, as I did on Second Reading, to Lord Freud. He had a difficult time in getting the insurance industry to the table. I notice from the list of meetings that he met with the industry many times. Although he has had fewer meetings with the asbestos working group, it has had access to civil servants. He has done a good job, and would, I think, share the Minister’s view that this is not a perfect Bill. In a perfect world, he would have liked much better legislation.

None the less, both Ministers, my hon. Friend the Member for Hemel Hempstead (Mike Penning) and Lord Freud, are quite right when they say that this legislation would not have happened had it not been for this Government, and I welcome that. I remember the negotiations that took place with the previous Government and it is quite right for the Ministers to say that they are proud of where they have got to. Mesothelioma victims will be better off as they will have access to some compensation but, as I have said, I still think that the Bill is flawed.

I also want to pay tribute to my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips), who did a fantastic job in Committee in raising many of the issues I would have liked to have raised personally. He brought to the debate understanding of the issues of mesothelioma and the concerns of the victims. Having met victims, he understands how awful the disease is, that it is a fatal disease that can be contracted only through exposure to asbestos and that victims will, unfortunately, die an incredibly painful death. He did a fantastic job of bringing forward many of the points I would have liked to have made.

I also want again to pay tribute to the right hon. Member for Wythenshawe and Sale East (Paul Goggins). He and I have worked on this issue for many months and years and it seems strange to stand up in this Chamber and discuss mesothelioma without his being in the House. I hope that he recognises that those of us who have tabled amendments and spoken in the debate have done so partly on his behalf. He has been a sound campaigner on the issue for many years. He is a decent man and all he wants to do is to try to improve the compensation for victims of this dreadful disease.

I look forward to the publication of the regulations and welcome the fact that there will be a review of the legislation. Like the hon. Member for Stretford and Urmston (Kate Green), I rather innocently and possibly even naively believe that we should be making legislation that does not need to be reviewed in four years’ time and that it could be better scrutinised and considered in this place and in the other place before it passes into law. We are where we are, however, so I congratulate the Minister on getting the Bill through the House on time. I am pleased that many victims will secure some sort of compensation for a disease that they got simply by going to work.

18:12

[Jim Shannon]

I, too, put on record my thanks to the shadow Minister, the hon. Member for Stretford and Urmston (Kate Green), for the way in which she made her argument today on an issue that is close to all our hearts. I also thank the Minister. We know him as an individual, but we also know the work that he has done. His responses to our questions today would suggest that he might have wished to have seen something better but had to settle for a wee bit less than what we had hoped for.

Many passionate speeches have been made on behalf of individuals and families. They stick in my mind most of all because they come from knowledge and living with people who have had the disease. I have been an elected representative for almost 30 years as a councillor and an Assembly Member in Northern Ireland, and now I am privileged to be the Member of Parliament for Strangford. I have met a lot of people over the years who have had mesothelioma and serious health problems. I have helped some of those people with their disability living allowance and their incapacity benefit, as it was, or employment and support allowance, as it is now. I have seen those people deteriorate healthwise. I have known them personally and it was never easy to watch that marked deterioration in their health over a period of time.

My colleague, my hon. Friend the Member for East Antrim (Sammy Wilson), wearing his other hat as Finance Minister in Northern Ireland, introduced legislation to deal with compensation and in doing so brought about equality and fairness for sufferers. Today, we have contributed to a Bill that might not go as far as we would like, as the hon. Member for Chatham and Aylesford (Tracey Crouch) and the shadow Minister have said, but which goes a long way towards addressing the issues of those sufferers and those people. For that reason, we should take some credit for delivering that for our constituents.

I would have loved more pressure to be put on the insurance companies, as was suggested in the previous debate, and the percentage of compensation is not what I wished to see. However, this is a big step as regards people out there being able to see that this House can deliver such legislation, and in an urgent fashion. The Minister said that his imperative was urgently to produce legislation that could deliver, and that is clearly what he has tried to do. We want fairness for these sufferers to enable them to have some quality of life in their lifetime, however short it might be. I always think of the families, in particular, who watched their loved one deteriorate markedly in a very short period. This Bill takes a massive step in the right direction for all of the United Kingdom of Great Britain and Northern Ireland.

18:15

[Andrew Percy]

It is a pleasure to follow the hon. Member for Strangford (Jim Shannon). I am also pleased to speak so soon after my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), who has done a fantastic job in highlighting this issue and fighting for her constituents, not just on this Bill but on the Bill that became the Legal Aid, Sentencing and Punishment of Offenders Act 2012, when we had a rebellion in this House which, I am proud to say, led to changes in the other place as well. I was happy to be part of that.

This is a big issue for my constituents and for those of my neighbour, the hon. Member for Scunthorpe (Nic Dakin), who is on the Opposition Front Bench as a Whip today and so cannot speak. We have a mix of industries across our region, including the steelworks, which are largely in his constituency but also in mine. We have a shipbuilding past, particularly in Goole, and I have in my constituency a number of former coalminers and a lot of power station workers who, even today, are affected by this.

[Mr Slaughter]

I entirely agree with the hon. Gentleman about the debate on LASPO in which Government Members played a strong part, as did Members in the other place. It is regrettable, though, that the Government are not going ahead with any changes to the provisions in LASPO, as was announced just before Christmas.

[Andrew Percy]

Indeed. My hon. Friend the Member for Chatham and Aylesford just whispered to me that new clause 3, tabled in the name of the right hon. Member for Wythenshawe and Sale East (Paul Goggins), who obviously, very sadly, cannot be here, would have progressed that matter as part of this Bill.

I will comment more on my unhappiness with some aspects in a moment, but I was regaling the House on the importance of this issue for constituents in my area, several of whom have been to see me. They do not just come from the traditional industries. Very sadly, a lady who is a former schoolteacher recently came to see me who has the difficulty of having worked for a number of different education authorities and suffers from this terrible disease. It is very sad when we meet these individuals because, as hon. Members have said, a diagnosis of this disease is a death sentence. That should not be forgotten in any of our debates, and I do not think it has been.

I am proud that the Government have introduced this Bill. Members in all parts of the House recognise that we now have a scheme that will provide for hundreds of people who otherwise would not have been provided for, and that is certainly progress. I am a little saddened that some of the debate turned into an attack on insurance companies, although I understand that there is legitimate cause for concern about the behaviour of some of them. I voted for the 80% compensation amendment because I felt that the extra £6,000 was significant and deliverable, and, like other Members, I could see no reason why insurance companies would walk away from such a deal. That £6,000 would have made a very significant difference to people in my constituency who suffer from this disease and who often live in some of the poorest areas.

I pay tribute to the Government for introducing this Bill and getting the scheme in place. I am sad that the Bill is not as good as some of us would have liked it to be, and I hope that that will be considered when it is reviewed. The hon. Member for Stretford and Urmston (Kate Green) said that we would rather not pass legislation and then have to review it, but would rather it were perfect from the start. I suspect that there are very few pieces of legislation where that is the case, and this will clearly not be one of them.

I just want briefly to say, on behalf of my constituents who will benefit from this Bill, how pleased I am that something is in place. It may not be exactly what we wanted—some of us have tried to make it better and I am sorry we have not succeeded in doing so—but the scheme is to be welcomed and I hope we can all now support the Bill. I hope there will not be a Division, but if there is I shall be more than happy to support the Bill.

18:20

[Mr Slaughter]

I am grateful for the opportunity to speak in this Third Reading debate. I have not taken part in the Bill’s previous stages, but I have followed it very closely and I will confine my comments to one specific point. It was raised in Committee on 13 December and was the subject of new clause 3, which was not selected for debate on Report.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I am sorry to say to the hon. Gentleman that this is the Third Reading debate. It is not a debate about amendments that were not selected or a Second Reading debate. The Third Reading debate is about the Bill as it now exists. I am afraid that the hon. Gentleman will be out of order if he tries to make a speech that goes beyond the contents of the Bill as it appears now before the House. The hon. Gentleman is experienced in this House and I know that he will stick closely to that.

[Mr Slaughter]

I will indeed, Madam Deputy Speaker. I referred to new clause 3 simply because it was tabled by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). I was present when the Minister paid tribute to him earlier and I just wanted to add my voice to that, because my right hon. Friend has been of great assistance to me on this issue elsewhere. I think he would have wanted to address the issue.

If the shadow Minister, my hon. Friend the Member for Stretford and Urmston (Kate Green), was right to say in her response to my earlier intervention that the Bill no longer gives recourse to the matters dealt with under sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, it would be helpful if the Government could make that clear. The Bill has received qualified support from Members on both sides of the House and it would be helpful if those outstanding matters could be satisfactorily addressed.

There is an outstanding consultation or review to be had; the Government have not been clear about exactly what it will be. My right hon. Friend the Member for Wythenshawe and Sale East raised matters of serious concern. There has not been a proper consultation so far with regard to LASPO. The hon. Member for Brigg and Goole (Andrew Percy) has just alluded to the fact that when the issue was debated in both Houses there was a very strong feeling that mesothelioma should be exempt, but that is not being honoured by the Government.

[Madam Deputy Speaker]

Order. [Interruption.] The hon. Gentleman will sit down. I spoke to him very gently earlier. He has been in this House a long time and we all hold the right hon. Gentleman to whom he is referring in the very highest regard, but, frankly, the hon. Gentleman is now drifting considerably from this Bill and I now want him to refer only to the Bill or to conclude his remarks. I do not want him to refer to justice or other things; I want him to refer to this Bill and its contents.

[Mr Slaughter]

I am grateful for that guidance, Madam Deputy Speaker. I have made the point that I wanted to make. I simply say to the Minister that, as this Bill stands on Third Reading, it would be helpful if the outstanding matters connected with mesothelioma could be dealt with properly and the Bill was not used as a way of occluding them.

Question put and agreed to.

Bill accordingly read the Third time and passed, with an amendment.

Welsh Grand Committee

Tuesday 7th January 2014 Commons Chamber

18:25

[The Leader of the House of Commons (Mr Andrew Lansley)]

I beg to move,

That

(1) the matter of—

(a) the Autumn Statement as it relates to Wales, and

(b) the Government Response to Part I of the Commission on Devolution in Wales

be referred to the Welsh Grand Committee for its consideration;

(2) the Committee shall meet at Westminster at 9.30am and 2.00pm—

(a) on Wednesday 22 January to consider the matter referred to it under paragraph (1)(a);

(b) on Wednesday 5 February to consider the matter referred to it under paragraph (1)(b); and

(3) on each such day, the Chair shall interrupt proceedings at the afternoon sitting not later than two hours after their commencement.

The House will recall that Standing Order No. 108 specifies that a motion may be made by a Minister of the Crown providing for the Welsh Grand Committee to sit on specified days at Westminster or in Wales, at such hours as may be specified. The motion will allow the Welsh Grand Committee to meet twice in the next month to consider the autumn statement as it affects Wales and, separately, the Government’s response to part I of the Commission on Devolution in Wales. The sittings will take place on Wednesday 22 January and Wednesday 5 February at Westminster. They have been proposed in consultation with the Opposition and Plaid Cymru.

The timing of the second sitting has been scheduled with the intention of informing the work of the Welsh Affairs Committee as it undertakes pre-legislative scrutiny of the draft Wales Bill. The House will recall that the Secretary of State for Wales made a statement on 18 November. The draft Bill was subsequently published on 18 December, following publication of the UK Government response to the Silk commission’s first report on the devolution of tax and borrowing powers to the National Assembly for Wales and the Welsh Government. The House will further recall that the UK Government agreed to almost all the recommendations, in whole or in part.

The Welsh Affairs Committee will take evidence on the draft Wales Bill this month, including at an oral evidence session on Tuesday 14 January. The Committee has set a deadline for written submissions of Thursday 16 January. It is the intention of the Committee to report in late March on the two main areas of the Bill—the devolution of taxation and borrowing powers, and the electoral arrangements for the National Assembly for Wales. A meeting of the Welsh Grand Committee in the form proposed in the motion and focused on the devolution of taxation and borrowing powers will enable it to inform the pre-legislative scrutiny of the draft Bill.

The two sittings will be the 10th and 11th Welsh Grand Committee sittings held during this Parliament. Since the 2010 general election, the Welsh Grand Committee has debated Budgets, Queen’s Speeches, the Commission on Devolution in Wales, legislative programmes, energy matters and the comprehensive spending review. The 2013 autumn statement and the draft Wales Bill can now be added to that long list. I commend the motion to the House.

Question put and agreed to.

Dementia Care and Services

Tuesday 7th January 2014 Commons Chamber

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

18:27

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Dementia services need to be addressed now. According to the Office for National Statistics, by 2030 the number of people entitled to draw a pension will be 15.6 million, of whom more than 3 million will be over 85. Society has done much to prolong lives through a focus on helping ageing bodies and faulty organs, but for too long help for the brain has not kept pace with that for the rest of the body.

With an ageing population, it is no surprise to hear the worrying prediction that 1 million people will be living with dementia by 2021, up from 800,000 today. There is obviously a massive financial worry resulting from the figures, especially when dementia is already predicted to cost the UK economy £23 billion a year, which is more than cancer, heart disease or stroke. It is therefore crucial to have plans in place that are proven to deal effectively and compassionately with dementia and that can be improved and expanded as necessary over the next 10 years.

Aside from the economic argument, the more pressing issue for me is that of compassion, care and support. When my grandmother was diagnosed with dementia 25 years ago, little support or information was available for carers. Being painfully aware that the last two years of her life were spent with little memory or recognition of family members, I now wish that she could have received an earlier diagnosis, so that we could have found professional help much earlier.

To put the problem that we face in context, I will give some statistics from the Alzheimer’s Society, which has been hugely supportive during my preparation for this debate and has worked to raise awareness of these issues in Parliament and throughout the country. One in three people over 65 will die with dementia. Two thirds of care home residents have some form of dementia. There are 600,000 family carers of people with dementia. It is estimated that a quarter of hospital beds are occupied by people with dementia. The most poignant statistic for me when I was preparing for this debate was that dementia is now the most feared health condition among people aged over 55.

[Steve Rotheram (Liverpool, Walton) (Lab)]

I congratulate the hon. Gentleman on securing this debate on such an important issue. As we know from previous debates, this issue is close to the hearts of many people in this Chamber who have first-hand experience of dementia. Given what he has said about people living longer, which is to be welcomed by everyone, does he agree that one of the most important things that we can do is to ensure that there is better co-ordination in the research into the prevention of dementia? The issue of treatment is secondary. Preventing people from getting dementia is surely the most important thing that we can do.

[Alec Shelbrooke]

I am grateful for the comments that the hon. Gentleman has made. He is right that we must not only treat the illness, but consider what preventive work can be done. I will speak later about the need for the national strategy to focus not only on the treatment of people with dementia, but on what other research can be done.

It is obvious that dementia is on the radar of an ageing society. However, given the emotional toll of dementia and its prevalence at the end of life, I was horrified to hear that only 48% of people who live with dementia receive a formal diagnosis, meaning that many people are denied the care and support that they and their loved ones need. Before the national dementia strategy for England was introduced in 2009, the rate was 33%. If further proof were needed that dementia care and services need to be improved as soon as possible, those awful diagnosis rates should be enough to show that something needs to change.

I am proud to be part of a coalition Government who have shone a long-overdue light on dementia, not least through the Prime Minister’s decision to host the G8 summit on dementia last month. However, there is still much to do before we can be confident that everyone who is living with dementia—individuals and families—is able to have a fulfilled life.

[Neil Parish (Tiverton and Honiton) (Con)]

It is good that my hon. Friend has secured this debate. It is not only the people who are suffering from dementia who are badly affected, but those who are looking after them. We must therefore not only get the diagnosis right for those who are suffering from dementia, but ensure that there is respite care for those who are looking after them. They need a break in order to fulfil their caring role properly.

[Alec Shelbrooke]

I am most grateful to my hon. Friend for those comments. I am sure that everybody has experiences of their own, but perhaps it will help the House if I speak about my grandmother, as I did earlier. I was aged about 12 or 13 at the time of her diagnosis, and my sister was two years younger. My dad was working as a teacher and supporting me, my mum and our family, but he was also dealing with his own mother. I remember the toll that that took on him. He had to work out what was the best thing to do for his mother. He toiled over the decisions that he had to make for a long time, such as selling the family home in which he had been born and brought up in order to raise money for the care home. My hon. Friend is right that there is a massive toll on the families involved, as well as on the people who have this terrible disease.

Despite the focus on dementia, there is a danger that the momentum that has been created by the Prime Minister’s challenge on dementia, the G8 summit and the work of the Science and Technology Committee and the all-party parliamentary group on dementia will be lost if the Government do not act in a number of areas.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this matter to the House for consideration. Every one of us will have knowledge of this matter personally and from our position as elected representatives. One of the homes in my area has 23 residents and 20 of them have dementia. The magnitude of the problem is tremendous. Does he agree that an exchange of medical information would be helpful? Northern Ireland has the highest diagnosis level in the United Kingdom. Perhaps it is time to exchange the knowledge in Northern Ireland, Scotland, Wales and England to come up with a strategy for the whole of the United Kingdom of Great Britain and Northern Ireland.

[Alec Shelbrooke]

I am most grateful to the hon. Gentleman. I am sure the Minister heard his comments and will perhaps reflect on them when he sums up the debate.

I was talking about a number of areas. First, to continue making improvements along the current trajectory, it is crucial that the national dementia strategy for England is updated from the 2009 version. That strategy identified 17 key objectives for the NHS and social services aimed at improving the commissioning of dementia services, the quality of care delivered in hospitals and care homes, developing a clear picture of research and evidence needs, and providing support for carers. Will the Minister please outline what meetings have taken place about the effectiveness of the NDSE, and say what plans he has for a formal evaluation of it?

Secondly, in spite of the obvious benefits of the national strategy, so far the Government have made no plans to renew it. I welcome the Prime Minister’s challenge on dementia, which is ambitious in its plans and places a welcome political spotlight on the issue. However, that challenge alone does not provide the breadth of detail needed to guide health and social care services to make improvements, and neither does it carry enough accountability measures, which a national strategy would do.

A new national dementia strategy, with guidance for commissioners of health and social care, GPs, hospital trusts, care homes, and others, must be published before the current strategy expires in April this year. It does not seem to be a new trend of coalition Government not to renew national strategies, because in 2011, new national strategies for cancer and chronic obstructive pulmonary disease were published, and one for hearing loss is due.

[Hazel Blears (Salford and Eccles) (Lab)]

I have been listening carefully to the hon. Gentleman who is making an eloquent and powerful case. His point about the strategy is fundamental. We have a system of different clinical commissioning groups, and a lot of fragmentation, and we need a holistic strategy that brings together the national effort. All credit to the Government for pursuing the issue, but I echo what the hon. Gentleman is saying about the need to renew the national strategy to maintain that momentum and energy, and ensure we get good services across the country. Will he join us all in continuing to press the Minister for renewal of the strategy?

[Alec Shelbrooke]

I am most grateful to the right hon. Lady, and I congratulate her on the work she does with the all-party group on dementia. She and all hon. Members will recognise that on this subject the whole House is fairly united in trying to get the Government to make those changes, regardless of whether we sit on the Government or Opposition Benches.

Our international partners, many of which attended the G8 summit in December, have ambitious long-term plans. In the US, for example, President Obama published a dementia strategy that runs until 2025, well beyond his own term as President. France has recently published its fourth dementia strategy. The economic case for having a clear directive for dementia is overwhelming. Dementia costs the UK £23 billion a year, which is more than cancer, stroke or heart disease, yet the annual research spend into dementia is about £51 million, rising to £66 million in 2015. That compares with £521 million spent on cancer.

The ambition announced at the recent G8 summit to double the spend on research in the UK by 2025 is an excellent step forward, but a new national dementia strategy that covers all aspects of dementia, including research into prevention and finding a cure, will ensure that the momentum gained from the good work undertaken by the coalition Government will be turned into improvements for people affected by dementia. To be clear, I am not suggesting that money be taken from the other crucial health causes I have mentioned; I wish merely to illustrate the numbers involved.

What plans does the Minister have to renew the current national strategy on dementia? That point was left unanswered in the Backbench Business Committee debate last year. As past statistics have shown, the introduction of a national strategy for dementia in England has caused a rise in the rate of diagnosis, although the level is still worryingly low at 48%. More needs to be done on prevention, particularly further investigation into whether the small change of introducing homocysteine level tests on the NHS could act as an early-warning sign in identifying the problem.

[Mr David Ward (Bradford East) (LD)]

Bearing in mind what the hon. Gentleman has said about low diagnosis rates, does he agree that the national strategy should include promoting greater awareness for many of those close to dementia sufferers who do not identify with the condition? They think people are just losing their hearing or becoming visually impaired as they grow older, and the diagnosis is then made far too late because symptoms are not realised early enough.

[Alec Shelbrooke]

That is a very helpful intervention from my hon. Friend. I will move on to cover some of the care homes in my constituency that are tackling those issues as one, but as he says it is important that a national strategy has accountability written into it so that these issues can be tracked as we move forward.

More than half of people with dementia cannot access the treatment, services and support they need because they have not officially been diagnosed. Furthermore, carers of people living with dementia also suffer. They have the uncertainty of knowing that something is wrong with their loved one, but have no official diagnosis. Patients and carers are therefore denied expert support through health and social care services and often feel that they cannot approach organisations such as the Alzheimer’s Society without a proper diagnosis.

In my constituency, the two clinical commissioning groups that are spread across Elmet and Rothwell have wide-ranging and impressive plans to increase diagnosis rates, but their ambition can go even further. Currently, NHS Leeds North diagnoses 50.85% of people with dementia, while NHS Leeds West CCG is only slightly better with 54.35%. My constituency reflects the picture across the rest of the country, meaning that half the people living with dementia are denied the certainty of a diagnosis.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate my hon. Friend on securing this debate. Will he congratulate the staff of Lloyds bank in Swadlincote high street who have taken the Alzheimer’s Society as their charity of the year? The local Alzheimer’s carers group works there and raises hundreds of pounds every month for that very important cause.

[Alec Shelbrooke]

My hon. Friend eloquently describes the work going on in her constituency to raise funds for this very important issue. I wish to add my congratulations to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) on her dedicated work and on securing the debate last month, as well as to the right hon. Member for Salford and Eccles (Hazel Blears) and my right hon. Friend the Member for Sutton and Cheam (Paul Burstow). I hope that the recent momentum achieved by the efforts of the all-party parliamentary group to shed light on this issue will result in achieving the aim—backed by NHS England—of 66% of people with dementia receiving a formal diagnosis by 2015. It can be done, as some CCGs already have a 70% diagnosis rate. Can the Minister shed any light on why individual CCG diagnosis rates are so varied and do not add up to the NHS England ambition of 66%? Are there any plans to investigate further the effectiveness of homocysteine tests on the NHS?

[Bob Stewart (Beckenham) (Con)]

Is this not a very human problem? Diagnosis rates will depend entirely on whether people go to see their doctor, who, using a simple test, identifies whether someone has dementia. It is a bit unfair to say one CCG has a better rate than another because the determinant of the rate of identification is whether people go to see their doctor or are taken to see them by family and carers.

[Alec Shelbrooke]

I seem to be one page behind the House in my speech this evening, because interventions keep pre-empting the next part of my speech. My hon. Friend is correct that we need wider support. I have become a dementia friend, as I know many other hon. Members have.

The aforementioned points all combine in reality to have an impact on post-diagnostic support, as well as the support for those who have not been diagnosed but need care. In my constituency, some inspiring examples make me feel optimistic that dementia can be dealt with effectively and compassionately. I have seen at first hand that such support, delivered well and early in a person’s dementia journey can lead to better outcomes.

[Jim Shannon]

There have been great advances in medication. If people get an early diagnosis, medication can give them an extra five to six years of quality life. Does the hon. Gentleman agree that it is important that medication is available across the whole United Kingdom to give people with dementia or Alzheimer’s a better quality of life?

[Alec Shelbrooke]

I thank the hon. Gentleman for that intervention. He makes important points that reflect what the hon. Member for Liverpool, Walton (Steve Rotheram) said earlier: it is not just about treating the disease when it is there, but about how much preventive work can be done in the first place.

As I said at the start of my speech, I wish only that some of the strategies, diagnoses and drugs that are now available were there for my grandmother 25 years ago. I was only about 11 to 13 years old in the two years before she finally went into a home, but I realise in hindsight how her quality of life was slipping away. I talked about the toll that that took on my father when he was trying to do what was best for his mother. He would be at work all day. His mother lived in south-east London while we lived 20 miles away in Kent and he would get a phone call at 3 am from her next-door neighbour saying, “Your mother”—she was in her late 70s—“is out walking the street in her nightgown.” Those are the pressures and there was nothing in place at that time. She was still living on her own and, as her grandchildren, we would still visit her. Today, I believe that she would have had a better quality of life.

I am encouraged by some of the things that are going on. I want to draw attention to a chap called Paul Mancey and his team at Orchard Care Homes. They are located in my constituency and are developing care partnerships between charities and care providers, which is very much what my hon. Friend the Member for Bradford East (Mr Ward) was talking about. This new approach means that residents are tested for hearing loss, diabetes and dementia symptoms on entry to the care home, ensuring that appropriate care packages are put in place.

Many other care homes are developing innovative ideas, too. I am pleased to say that care homes have developed immensely since we moved my grandmother into one in the early 1990s, and even more delighted that the leading company on the development of care villages is located in my constituency. Graeme Lee and his team at Springfield Healthcare have set the bar on building a quality and comfortable dementia-friendly care village at Seacroft Grange, which is located in the constituency of the hon. Member for Leeds East (Mr Mudie).

As is often the case, however, the truly inspirational support networks are not those provided by the professionals. My hon. Friend the Member for Beckenham (Bob Stewart) talked about early diagnosis, and there are community champions. One community champion in my constituency is Peter Smith, who established the Tea Cosy Memory Café in Rothwell, which provides a welcoming place for those with dementia and their carers, as well as making Rothwell the first dementia-friendly community in Leeds.

The Alzheimer’s Society has done great work to promote awareness of dementia. Hon. Members can play a greater role, too, in raising awareness. I alluded to the fact that, like many Members, I am proud to be a dementia friend and to support the work of the Alzheimer’s Society. I urge as many Members as possible to become a dementia friend and to help the Alzheimer’s Society.

[Hazel Blears]

I am delighted that the hon. Gentleman is a dementia friend. Will he join me in encouraging all Members to make their constituency offices dementia friendly? We have just embarked on this journey. We are looking at special signage and at constituency letters to ensure that they are written in a way that people can understand, and all my constituency staff have been trained to be dementia friendly. If every Member of Parliament’s constituency office was dementia friendly, that would be a significant step forward. Perhaps we could work together on that.

[Alec Shelbrooke]

I hugely welcome what the right hon. Lady has just said. Perhaps I could be cheeky and suggest that she e-mail every one of us in this House to outline what she has been doing in her constituency office, because sharing information and best practice is the best way we can help people on this journey. I look forward to working with her.

I urge as many people as possible to become dementia friendly and help the Alzheimer’s Society achieve its goal of creating a network of 1 million friends across the UK by 2015.

Those examples prove what many health professionals know: that peer support networks and dementia advisers are effective in providing information to people with dementia and their carers, and they are valued by service users. They should therefore be supported and I welcome the “Carers call to action” campaign by the Dementia Action Alliance to promote this particular facet of the issue—not to mention that they are a relatively cheap intervention that also raises awareness of dementia and tackles stigma.

What are the Government doing to improve post-diagnosis support and what plans does the Minister have to ensure that all people with dementia have access to a dementia adviser or to equivalent suitable named carers?

18:49

[The Minister of State, Department of Health (Norman Lamb)]

I congratulate my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) on securing another debate on dementia. It is important that we maintain the pressure, keep talking about this subject and keep challenging ourselves to take the necessary further steps. I am delighted to hear he is a dementia friend. I hope that everyone in the Chamber this evening is a dementia friend. [Interruption.] There is lots of nodding, which is encouraging.

[Bob Stewart]

Will the hon. Gentleman define exactly what a dementia friend is so that those of us who are not yet one can understand what we should do?

[Norman Lamb]

I am delighted by that intervention, because it gives me the opportunity to say something very quickly about the initiative being taken by the Alzheimer’s Society. If someone applies to be a dementia friend, they can go along to an hour-long session on understanding dementia better. It is very illuminating to go through that process. We got the initial idea from Japan, where it has gathered enormous momentum. If we can get a million people across society who better understand dementia, it could have an enormously powerful impact by making our communities more dementia-friendly and understanding and giving people with dementia a better life. I would therefore encourage my hon. Friend to become a dementia friend.

The right hon. Member for Salford and Eccles (Hazel Blears) talked about her constituency office. I will accept the challenge she laid down. I absolutely accept the case she makes. We are all serving the public, and it is critical that we make our own facilities friendly for people with dementia and their carers. My constituency office staff do not know this yet, but I will encourage them to go through this process, as all right hon. and hon. Members should.

I was struck by the constituency examples that my hon. Friend the Member for Elmet and Rothwell gave. He mentioned Paul Mancey of Orchard Care Homes, which is ensuring that people entering care homes get proper care and support and that their particular needs are met, and the Springfield Healthcare initiative.

[Glyn Davies (Montgomeryshire) (Con)]

I thank the Minister for allowing me to intervene on an issue that, usually because of personal experience, is close to our hearts. He speaks of the importance of care homes, understanding dementia and caring for sufferers properly, but does he agree that the best treatment is care in the home of the person suffering from dementia? In my experience, a change in circumstances advances dementia faster than anything else. By far and away the best way to treat people suffering from dementia is to make it Government policy to support people to stay in their own homes.

[Norman Lamb]

I broadly agree with my hon. Friend. The most important thing is that the care and support should always be right for the individual. Whatever they need they should be provided with. I recently visited the most amazing GP surgery in Gnosall, Staffordshire, which has managed—this demonstrates a point that my hon. Friend the Member for Elmet and Rothwell made about the variability of dementia diagnosis rates—to achieve diagnosis rates of close to 100%. That demonstrates what is possible. Most of the diagnosing is done in the community within primary care without referral to a memory clinic. What they have found is that by getting early diagnosis and then having very good community follow-up and support—the general practice is central to that—people are staying in their own homes and maintaining a good life for far longer and admissions to care homes and nursing homes are significantly reduced. That demonstrates what is possible and confirms the point that my hon. Friend the Member for Montgomeryshire (Glyn Davies) made.

[Steve Rotheram]

Will the Minister give way?

[Norman Lamb]

I will. I am still on page one of my speech.

[Steve Rotheram]

I thank the Minister for giving way. He is absolutely right about the individual care package that somebody who, unfortunately, has dementia or Alzheimer’s gets. Thankfully, long gone are the days when somebody was given a couple of tablets in the hope that that might somehow affect their condition. Is he aware of the House of Memories project in Liverpool? Is he also aware that there is an event that I am hosting here on 17 June that Members of this House are welcome to attend?

[Norman Lamb]

I thought for a moment that the hon. Gentleman was not going to mention the House of Memories. He always does. Of course I am aware of it because he keeps talking to me about it and knows what I think. I am incredibly impressed by it and there is a plan for me to visit and see it for myself. He is right constantly to make the case for it and for spreading what has been demonstrated is possible in Liverpool to other parts of the country.

It is less than two months since the last debate on dementia and it is a measure of the importance that Members put on the subject and the extent of the challenge that we face as a nation that, thankfully, the House has recognised the importance of debating it regularly. It is also less than two months since we published our dementia state of the nation report, which sets out the progress that we have made on dementia and the challenges we are facing.

The report is an incredibly important document because it also includes online a set of interactive maps that, for the first time, allows someone to enter their postcode to see how their local dementia services are performing and how that performance compares with the rest of the country. Having this level of transparency, as well as the extent to which people will be able to hold their own local areas to account, will have a big impact on driving up diagnosis rates. I have already made the point that some parts of the country have demonstrated that high diagnosis rates are possible. There is no rocket science here and no reason why other parts of the country cannot follow suit, understand and learn that best practice and, critically, apply it to ensure that people get the support they need.

My hon. Friend the Member for Elmet and Rothwell is absolutely right when he makes the point that unless someone has had that diagnosis, they do not get access to the advice, guidance, support and services that are potentially available in a local area to make the life of that individual better and, critically, to provide more support for the carer as well. The maps highlight the variation in dementia care across the country and allow people, but also commissioners and providers, to use the data to see how they compare against other areas and then work to deliver improvements.

Around the world, someone is diagnosed with dementia every four seconds. Over 35 million people have it and as people live longer than ever before that figure is set to double every 20 years. Among them, 58% live in low to middle income countries and this proportion is projected to rise to 71% by 2050. We cannot ignore the pressure on our health and care systems and dementia costs society as a whole as much as £23 billion in the UK alone. The cost of dementia worldwide has been estimated at about £400 billion, or 1% of the world’s GDP. This is why dementia is a major priority for the UK Government and why the Prime Minister launched a dementia challenge in 2012. But we must fight back on an international scale, breaking down barriers and joining forces to address this issue, which has such an enormous human and economic cost.

Five years ago, the national dementia strategy was developed. It has achieved a lot, laying the foundations for real change. We are currently evaluating progress on dementia and on how we have achieved improvements in dementia care, and we are looking at both the national dementia strategy and the Prime Minister’s challenge. I shall come back later to the point about what comes after, and it seems to me sensible first to understand—

19:00

Motion lapsed (Standing Order No. 9(3)).

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

[Norman Lamb]

That was unexpected; I have never had this happen to me before, so I apologise for looking confused! I shall carry on.

It makes sense to understand the success—and, indeed, sometimes the failures—of the current strategy and the Prime Minister’s challenge before designing what follows on afterwards. It is absolutely clear—I have tried to demonstrate this on other occasions—that something must follow; there must be a continuation. This disease has such a profound impact on people and on society that we have to keep developing our understanding and maintaining the momentum.

[Hazel Blears]

I am grateful for the Minister’s commitment that there will be a follow-on from the dementia strategy. He is right to look at what has worked and what might not have worked quite so well. My concern is that whatever comes next must find a way of uniting the whole system. In proceedings on the Care Bill, we debated integration and how important it was, particularly for dementia, because it will save us money. When the Minister looks at the next set of strategies, I urge him to bear in mind that the country must not have in place a set of fragmented relationships that are not bringing the system together to make things better for people with dementia and their carers. The economic impact on the country is also important.

[Norman Lamb]

I very much agree with the right hon. Lady on that. I think that what she argues for is developing. We are not there yet, but it is important that we have developed this ambition to achieve a diagnosis rate of two thirds, which encourages every part of the system to focus on what it needs to do. It is not a nationally imposed arbitrary target; it was based on getting every part of the system to think about what it can achieve by setting ambitious objectives. Collectively, that amounts to an ambition to achieve a two-thirds diagnosis rate, but in itself, of course, a two-thirds diagnosis rate is not good enough. We should not be satisfied when we achieve that; we have to press on. We know that the community in Gnosall has a diagnosis rate of close to 100%, so we should not be satisfied until everyone is getting properly diagnosed on a timely basis. I agree with the right hon. Lady’s point. Under the new system, with the health reforms making clinicians much more involved in the commissioning of care locally, there is a greater chance of getting the engagement of general practice across the country than we perhaps had in the past through the primary care trust route.

[Jim Shannon]

Has the Minister had an opportunity to consider the point I made in my intervention on the hon. Member for Elmet and Rothwell (Alec Shelbrooke), which was about the exchange of good practice and information between the four regions of Scotland, Northern Ireland, Wales and England? Ever mindful that the highest levels of diagnosis for the whole of the United Kingdom are found in Northern Ireland, has the Minister had a chance to discuss these matters with the Health Minister, Edwin Poots from the Northern Ireland Assembly, for instance, to take the issue forward? We all gain from good practice across the whole of the United Kingdom of Great Britain and Northern Ireland, and we all gain from the exchange of good ideas.

[Norman Lamb]

I completely agree. This disease knows no country boundaries. We all face the same challenge across the whole of the UK and, critically, across the world. That is why we pursued the matter in the G8 summit of December. There should be good collaboration across the UK through all of the devolved Administrations and the Government here. I am always happy to engage with colleagues from Northern Ireland to understand what we can learn from Northern Ireland and also because the exchange of information helps everybody to improve.

We recognise the need to build on the strategy. That is why the Prime Minister’s challenge on dementia is now the main vehicle for change and improvement across health and care, in the community and for the purposes of research. The Prime Minister’s challenge runs until 2050, not just outliving the dementia strategy, but broadening its vision and providing better accountability.

Last year we hosted the G8 dementia summit. I was delighted that the right hon. Member for Salford and Eccles participated in it, and challenged me during one of the sessions. The summit attracted interest all over the world, and harnessed the efforts and expertise of the G8, health and science Ministers, the World Health Organisation, the OECD, industry, researchers, philanthropists and civil society to secure much greater international collaboration in order to tackle and defeat dementia. The declaration and communiqué announced at the summit set out a clear commitment to working more closely together on a range of measures to improve early diagnosis, living well with dementia, and research.

The G8 announced an ambition to identify a cure or a disease-modifying therapy by 2025, which we hope will focus minds internationally. It is backed by a commitment to increase significantly, together, the amount spent on dementia research—we know that at present it is a fraction of the amount committed to research in other areas of medicine—and to increase the number of people involved in clinical trials and studies of dementia. The United Kingdom has committed itself to funding a global dementia innovation envoy to draw together international expertise, stimulate innovation, and co-ordinate international efforts to attract new sources of finance. That will be incredibly important if we are to crack this disease.

In partnership with the OECD, the WHO, the European Commission, those involved in the EU joint programme on neurodegenerative disease, and civil society, the G8 will hold a series of high-level forums throughout 2014 on social impact investment—it will be critically important to attract new sources of funding—new care and prevention models, and academia-industry partnerships, which will also be extremely important. The G8 will meet again in the United States in February 2015, along with other global experts including the WHO and the OECD, to review the progress that has been made on the research agenda. That will enable us to focus minds and try to increase the momentum.

The G8 is an exciting global initiative, and I am immensely proud that the United Kingdom led the way in that regard. However, we are also keeping our focus on dementia in England, and we have made progress since the launch of the Prime Minister’s challenge. We have launched a new dementia friends scheme—which has already been mentioned—to make a million people more aware of what dementia actually is, thus helping to break down the barriers between people with the condition and their local communities. It is important to challenge the stigma that still exists in many places. The Alzheimer’s Society has published guidance setting out the criteria for becoming a dementia-friendly community. I was pleased to hear that Rothwell, near Leeds, is becoming a dementia-friendly community: that is very good news.

The NHS continues to support dementia care in hospitals through its CQUIN scheme—commissioning for quality and innovation—which is generating between 3,000 and 4,000 referrals for diagnosis each month. We have allocated £50 million to 116 schemes to make health and care environments such as hospital wards and care homes more dementia-friendly. Making the environment in which people live with dementia more dementia-friendly is critical to the provision of a calm atmosphere. When we see places to which attention has been given and in which investment has been made, we realise what a difference can be made. The Government’s mandate for the NHS prioritises dementia, and, as I said earlier, includes the ambition of a diagnosis rate of two thirds. My hon. Friend was right to say that the current rate is far too low. We are letting people down in many parts of the country by not securing early diagnosis.

[Mr Ward]

Obviously there is an opportunity to do something once a person has been identified as needing a diagnosis, but in my experience the problem is that other things are usually taking place in people’s lives, and GPs often assume that they are just part of the ageing process. There is a failure, often because of the lack of skills of the GPs, to recognise that diagnosis is required.

[Norman Lamb]

My hon. Friend is absolutely right and there are still GPs who do not really believe in the importance of a timely diagnosis. I have heard GPs say, “What’s the point, because it will make no difference?” However, we know it does make a massive difference not only to the person with dementia but to the rest of their family, in understanding the condition and what they can do to help. Education among GPs is incredibly important, and attitudes are changing but we still have a way to go.

Clinical commissioning groups are working with their local councils and other partners to better understand how widespread dementia is in their communities, including among people living in local care homes. This will mean they can identify and support people with dementia in a timely way. GPs are now able to use the new directed enhanced service to improve the diagnosis of dementia by asking people in certain at-risk groups about their memory. This proactive approach should help to identify patients who are showing the early signs of dementia.

Health Education England has prioritised dementia training and has already delivered 100,000 dementia-trained staff. Again, ensuring the work force within health and care have a proper understanding of dementia is critically important.

[Hazel Blears]

I am pleased the Minister has now come on to the area of the work force. He will know that many of the carers in this area are paid the national minimum wage if they are lucky. Many of them are on zero-hours contracts. Many of them do not get paid for travelling between the appointments they undertake. We ask them to do some of the most difficult work that one can ever imagine but the rewards and the training and support they get is minimal. Is the Minister committed to tackling some of these issues in the care sector, which in my view are unacceptable?

[Norman Lamb]

I feel as strongly as the right hon. Lady does about this. We can never get good care on the back of exploiting very low-paid workers. It is not acceptable to not pay a care worker when they are travelling from one home to another. That is a breach of the minimum wage legislation unless their rate overall comes above that level. HMRC has specifically targeted the care sector and has found quite widespread abuse of, or failure to comply with, the national minimum wage. It is very important that it is complied with.

It is also important for councils commissioning care to be absolutely clear with those they contract with that they expect total compliance with the law. If a council is commissioning in a way which almost becomes complicit in a breach of the law, that is completely unacceptable. Some of the commissioning around the country is very poor and we have got to move on from commissioning on these 15-minute, short-time periods resulting from contracts being opened up for bids and there being a race to the bottom with the cheapest offer winning the contract. We have got to move on to commissioning for quality and for better outcomes.

Wiltshire has now introduced commissioning for home care based on outcomes and quality. One of the care providers now pays salaries to its care staff. So the whole attitude and approach changes and the incentive on the care provider is to improve care, not to get away with the quickest possible care visit.

It comes down very often to the way in which the care is commissioned. That is what has to change and we are working with the Association of Directors of Adult Social Services and the Local Government Association to change the way in which commissioning is undertaken. There is also an amendment to the Care Bill which will require that commissioning takes into account an individual’s well-being. Councils cannot commission on the basis of 15 minutes of care when important care work needs to be undertaken. They will not meet their obligation under the Care Bill if they are doing it in that way. That change will also help to drive up standards. Care workers need to be respected. They do incredibly important work, and they are undervalued by society.

Since 2009-10, Government-funded dementia research in England has almost doubled, from £28.2 million to £52.2 million in 2012-13. Over the same period, funding by the charitable sector has increased, from £4.2 million to £6.8 million in the case of Alzheimer’s Research UK and from £2 million to £5.3 million in the case of the Alzheimer’s Society. In July 2012, a call for research proposals received a large number of applications, the quality of which exceeded expectations. Six projects, worth a combined £20 million, will look at areas including: living well with dementia; dementia-associated visual impairment; understanding community aspects of dementia; and promoting independence and managing agitation in people with dementia.

The hon. Member for Liverpool, Walton (Steve Rotheram) made the point about doing research into how we can prevent the onset of dementia in the first place. We know that vascular dementia is often related to lifestyle, including factors such as heart condition, smoking and alcohol consumption. If we can understand better how to prevent dementia from occurring, we will achieve a massive advance. Research needs to focus on that as well as on finding a cure and on living better with dementia, which is another critical area of research. It is essential that we do all this collaboratively and internationally. We cannot simply find all the results by ourselves, here in the UK. There needs to be an international effort.

The coalition Government have clearly demonstrated their commitment to dementia, but there is a massive amount still to do. We are not looking inwards to solve the problems that we are facing. At the G8, we brought the world together to work collaboratively and to look for solutions. By leading the way with the G8 summit, and with our own domestic agenda of the Prime Minister’s challenge, the UK is mobilising all available resources. We should be proud of the leadership we have shown as a nation to date, but as ever, we will continue to push much further, and we must never be complacent.

Question put and agreed to.

19:17

House adjourned.

Ministerial Correction

Tuesday 7th January 2014 Ministerial Corrections

Tuesday 7 January 2014

Roads: Accidents

Tuesday 7th January 2014 Ministerial Corrections

[Robert Flello]

To ask the Secretary of State for Transport how many people were (a) killed and (b) seriously injured whilst working on the hard shoulder in each of the last three years.

[Official Report, 10 December 2013, Vol. 572, c. 185-86W.]

Letter of correction from Robert Goodwill:

An error has been identified in the written answer given to the hon. Member for Stoke-on-Trent South (Robert Flello) on 10 December 2013:

The full answer given was as follows:

[Mr Goodwill]

The following data has been provided by the Highways Agency who manage and operate the Strategic Road Network in England:

[Mr Goodwill]

The following data has been provided by the Highways Agency who manage and operate the Strategic Road Network in England:

Petitions

Tuesday 7th January 2014 Petitions

Tuesday 7 January 2014

Animal Protection Laws in Thailand, Vietnam and China

Tuesday 7th January 2014 Petitions

The Petition of residents of Coatbridge, Chryston and Bellshill,

Declares that any torture and eating of cats and dogs in Thailand, Vietnam and China is unacceptable; further that the practices in place in Thailand, Vietnam and China cause unnecessary stress and harm to the cats and dogs involved; and further that these practices are a cause of concern for the British and Scottish athletes who will be attending the Winter Olympic Games in South Korea.

The Petitioners therefore request that the UK Government urges the governments of Thailand, Vietnam and China to strengthen and enforce their animal protection laws and further requests that the House urges the Government to consider incoming visits from the governments of these countries.

And the Petitioners remain, etc.—[Presented by Mr Tom Clarke, Official Report, 19 November 2013; Vol. 570, c. 1202.]

[P001295]

Observations from the Secretary of State for Foreign and Commonwealth Affairs:

The British Government take seriously reports of animal cruelty throughout the world and are committed to raising standards of animal welfare at home and abroad. The UK is at the forefront of international animal protection efforts. We welcome the work undertaken by non-governmental organisations, such as the International Fund for Animal Welfare, PETA and the Royal Society for the Prevention of Cruelty to Animals. This includes the work they do, for example, with the Chinese authorities to improve standards of animal welfare and to gradually build support for animal welfare issues in China.

While the UK cannot intervene directly in the protection of wildlife abroad, we have raised our concerns on specific animal welfare issues with the Chinese authorities. We are aware of the illegal smuggling of dogs from Thailand for consumption in Vietnam. In April 2012 an Animal Welfare Bill drawn up with the involvement of the Thai Society for the Prevention of Cruelty to Animals was submitted to the Thai Parliament, and is now going through the legislative process. In October 2012 the Bill passed its First Reading, and the Bill has since passed the Committee stage.

St Raphael’s Hospice (Cheam)

Tuesday 7th January 2014 Petitions

The Petition of residents of the UK,

Declares that the future of St Raphael’s Hospice has been put in doubt by plans drawn up by Daughters of the Cross, a charity who fund the hospice, and by plans to sell off St Anthony’s hospital which shares the site with the hospice and provides administrative and other support services worth up to a million pounds a year; further that the sale of the hospital will break the funding link with the hospice and undermine the Christian character of the institution; further that the Petitioners regret that rather than engaging with the staff and supporters of the hospice and hospital to find a mutually agreed solution to the future of both institutions the charity has pursued a course of action that is not widely supported; and further that the Trustees have failed to grasp that the success and respect in which both institutions are held is the result of a shared endeavour between themselves, the staff and volunteers and the local community who raise and donate the funds to pay for them.

The Petitioners therefore request that the House of Commons thank Her Majesty’s Government for raising the matter with the relevant authorities in the Vatican; further that the House urges the Papal authorities to intervene to protect the ethos of St Anthony’s hospital and its special relationship with St Raphael’s Hospice; and further that the House holds a debate on the future of St Raphael’s Hospice and possible ways forward.

And the Petitioners remain, etc.—[Presented by Paul Burstow, Official Report, 20 November 2013; Vol. 570, c. 1341.]

[P001297]

Observations from the Secretary of State for Foreign and Commonwealth Affairs:

I understand the strength of feeling about this issue, particularly amongst the constituents of Sutton and Cheam. It is clear that St Raphael’s Hospice plays an important role within the community, providing a dignified and caring environment for those with serious illnesses. The British Government are committed to giving hospices the support they need to carry out these vital duties and awarded an extra £60 million in Government funding to hospices across England earlier this year. We believe this investment is crucial as we face the challenge of caring for an ageing population and supporting their families. Hospices such as St Raphael’s play an increasingly important role in delivering this care and support.

I understand that the Daughters of the Cross, who act as the Trustees for St Raphael’s, are members of an International Order of Religious Sisters who are subject to the jurisdiction of the Congregation for Institutes of Consecrated Life and for Societies of Apostolic Life, based in Rome within the Roman Curia of the Holy See. In July 2013, the British Ambassador to the Holy See met Archbishop Jose Rodriguez Carballo, the Secretary of the Congregation for Institutes of Consecrated Life and raised the concerns of the local community about the future of St Raphael’s Hospice. The Archbishop confirmed he was aware of the issue and assured the Ambassador that he would look carefully at the case. He did make clear that the decision on the future of St Raphael’s was ultimately one for the Trustees but advised that he would give guidance to the Trustees on the basis of the known preference of the Church that such good works should continue to be run on Catholic lines.

The Foreign and Commonwealth Office also suggested that the Honourable Member for Sutton and Cheam raise this issue with the Apostolic Nuncio in the UK, Archbishop Mennini. I understand that this meeting took place recently and that Archbishop Mennini recognised the Honourable Member’s concerns. The British Government values the work of the Daughters of the Cross in running St Raphael’s Hospice and understands their difficulties in maintaining these responsibilities. I very much hope a sustainable solution can be found.

Westminster Hall

Tuesday 7th January 2014 Westminster Hall

Tuesday 7 January 2014

[Jim Dobbin in the Chair]

Annuities for Pensioners

Tuesday 7th January 2014 Westminster Hall

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

09:29

[Richard Graham (Gloucester) (Con)]

Today we are covering a subject that in many ways is both dull and important. “Annuity” is a difficult word, which lacks a simple definition, and it is not something that a man or woman under the age of 50 would wisely bring up in discussion with friends. However, 400,000 people this year will buy an annuity. That figure will grow substantially over the years, and anything that affects such a large percentage of our country’s population is therefore worthy of the first Westminster Hall debate in 2014. Annuities are dull, but important, and absolutely ripe for review and improvement. It is therefore timely that Mr Speaker has chosen the subject for the first Westminster Hall debate of the year, and it is a pleasure to participate in it under your chairmanship, Mr Dobbin.

I will first outline annuities and their market as it is at the moment, who buys them, for whom they are best and least suited, and whether we need them, before looking at specific issues raised by recent investigations and considering what more might be done to improve the world of annuities. Historically, pension structures have required individuals to bring certainty to our savings, effectively by exchanging whatever pool of savings we have for known income, by drawing an annuity or by having income draw-down—two technical terms already, which are perhaps better described as “income for life”. That is what an annuity was designed to deliver, and it is derived from a complex calculation that involves bond yields, longevity and charges. In due course, I will return to discuss the last especially.

The concept of an annuity is relatively simple: to provide older people with the certainty of knowing what their income will be in an otherwise uncertain world of costs and, perhaps, care. In a world of defined-benefit pensions, we had such certainty, but that world—outside the public sector—is going fast, so certainty of income is a bigger issue than it was, and in today’s world many people are searching for it. We might therefore imagine that an annuity is the product for today. As auto-enrolment expands, reaching about 8 million new pension savers, net of opt-outs, the number of new annuity customers will surely grow. It will be a slow burn, because most of those auto-enrolling over the next few years will not reach annuity-type age for some decades, but eventually the figure used in the media—the number of annuity customers doubling—will be reached. As a result, instead of more than 1,000 new customers a day in 2014, before long there will be 2,000 new buyers of annuities every day.

The annuities market will therefore soon have 500,000 customers a year, predominantly in their 60s and 70s, making what for most will be the second most important financial decision of their life—the first being their home. As Ros Altmann has pointed out, as things stand with an annuity, unlike buying a home, there is no going back: someone buys it and that’s it—no change, no transfer, no flexibility and no equivalent of renting out, moving on, selling or downsizing. An annuity therefore best suits customers who know exactly what they are looking for—because they are well versed in the language of annuities, such as open-market options, enhanced annuities or comparisons with income draw-downs—and perhaps already have a defined benefit pension and are looking to convert a smaller defined contribution pot, which is a modest percentage of their total savings.

Such customers use the comparison tables of the office of the Pensions Advisory Service, provided by the Money Advice Service. They shop around for alternatives offered by online and household-name providers. They know that they will keep the same wife, husband or partner for ever, that they will live long enough for the income draw-down to exceed the capital exchanged and the commission charges, and that, ideally, both partners will exceed the lifespan expectations of their current health and the geography of where they live—alternatively, perhaps they will buy their annuity in a poor city and thereafter move to an idyllic village where people live longer. Such a customer should do well in the current world of annuities. Unfortunately, he or she is as exotic and rare as a sacred ibis on the banks of the river Severn in my constituency.

[Alun Cairns (Vale of Glamorgan) (Con)]

I pay tribute to my hon. Friend for securing the debate and for the way in which he is presenting it. He rightly highlights the fact that the transaction is extremely complicated—that is exceptionally important—and he has used a range of phrases that are commonplace to financial advisers, but not necessarily understood by the clients. Does he accept that the retail distribution review, although perhaps painful in the short term, will deliver significant benefits over the longer term, but that the charging structure and the change in the culture might well put some people off seeking advice for annuities, thereby making this extremely complex transaction far more difficult for the average punter to decide on?

[Richard Graham]

My hon. Friend has spent a lot of time working in the sector and knows the issues well. He is absolutely right to highlight the unintended consequence of the retail distribution review, which in a sense is to put people off the idea of buying up-front advice on a complex product such as an annuity. For those who have a relatively small pot of savings, such as £20,000, £30,000 or £40,000—a lot of money for some people—the idea of paying £400 or £500 for advice is not attractive. My hon. Friend is right to highlight that, because it is one of the issues.

I drew attention to the perfect customer for an annuity; let me now give the other side of the coin. By contrast is the customer who is told by the provider of their direct contribution pension—his or her only modest source of savings—that they need an annuity, has no idea what an annuity is and asks the pensions provider what they can offer; who has no idea whether that offer is good, bad or indifferent, goes for the cheaper of the options available, probably leaving out any cover for his or her partner and certainly any provision for inflation, and forgets to mention perhaps a hereditary heart weakness; and who moves from a suburb to the inner city to be closer to shops and a hospital, lives for a few years and then dies, having drawn only a small percentage of income from a capital sum that has now disappeared, leaving their wife, husband or partner on the state pension. For what purpose did he or she save?

With longevity the way it is, we might argue that such a customer scarcely exists, as we would all hope, but the reality is that some of his or her characteristics are a reality—as the Pensions Advisory Service has confirmed—especially in the understanding of what they are buying. Ros Altmann has estimated that insurers will often keep between half and three quarters of a pension fund they take over and convert it into an annuity.

I did a quick reality check on the word “annuity” in a Gloucester pub last weekend. Of the 22 people I asked, six said it was a financial thing like a pension, one of those said it gave income and most of the rest said they had no idea. I accept that it was a bad weekend for Gloucester rugby, and trying to discuss annuities in a pub was pushing my luck, but I do not believe that the people of Britain know what an annuity is or that the average response would be any different. Why is an annuity useful? Do people have to have one? The answer is no. How do they go about getting one? An annuity is potentially the second biggest financial purchase of our lives, so the current state of information about them is worrying.

In any market that size—£12 billion a year is big—if a customer feels that he or she has to buy something but does not really know what it is, the definition of good value is elusive. Customers need a lot of knowledge to pick the right product and the market is dominated by a handful of big names, so there is a danger of high charges, a lack of transparency and inadequate protection. The annuities market more than lives up to all those risks. I rang the Pensions Advisory Service yesterday to get some initial advice—just one man in his 50s ringing in to ask questions about annuities. I got good general advice on a whole number of issues, but when I asked about charges, I was told confidently, “You will never be able to work out what the charges are.” I asked the helpful adviser whether he thought that was right. “Not for me to say,” he replied, which was fair enough. However, it is right for hon. Members to raise and challenge the situation on behalf of our constituents, who ought to know what they are being charged for a product as important as an annuity.

Almost 20,000 of my constituents in Gloucester are between 50 and 64. For all of those people, some understanding of annuities would be useful. It is not good enough to have a product for which people will simply never know the charges. The situation for annuities sits oddly beside that for their stepbrother or sister, the pension. Huge efforts are being made to clarify, and make as simple as possible, all the costs and charges for pensions; to estimate a management fee that is neither rapacious nor drives investment managers to the lowest common denominator; and, above all, to make charges transparent to the client. The status quo is tantamount to an insurance firm—everyone is under the same roof, in the same organisation—saying, “Right, over here is a team of investment managers managing pensions: you need to be squeaky clean, work out all the costs and charges and report them completely. Your margins will be tight. Over here, in this corner, we have the annuities guys: your pricing is roughly what you want it to be, and there is no need to explain or declare anything.” That has to be wrong. When such efforts are being made to ensure transparency about money coming into a pension, it is especially strange that, at the moment, the system does so little for moneys coming out of a pension and into an annuity.

For today’s debate, we have the benefit of the detailed investigations by the Financial Conduct Authority’s consumer panel and The Daily Telegraph. The latter found that differences between annuities offered amounted to as much as £1,444 a year on a pot of £100,000. The FCA’s consumer panel found that commission charges vary by up to £1,000, which might, for the cynical, explain why the industry is so shy when it comes to explaining what the charges are.

The FCA found in general that the industry was “very dysfunctional”, with “possible exploitative pricing”—up to 6% of a customer’s pot could go in commission. In a rebuke to any of us who thought that the answer might simply be to provide more information, the consumer panel found that customers are put off by the mountain of jargon and “information overload”. Frankly, I am irresistibly reminded of the endowment mortgage I was obliged to buy in the 1980s: however it was explained, it was absolute gobbledegook, and there were high commissions, often from one insurer to another. The consumer panel found that 3.5% commission for an introduction from Zurich to Legal & General seemed to be the going rate for annuities today. In the 1980s, if someone wanted to buy a house, they had to have an endowment mortgage. Later on, of course, the fabulous projected investment returns did not materialise, the mis-selling was investigated, fines were levied, the product was binned and the financial sector moved on. Will we see a repeat of that?

I chaired a seminar recently on annuities and asked the Association of British Insurers whether there was a danger of any of its members being sued for mis-selling. There was a long pause before the answer came: “Not yet.” It is therefore not surprising that the FCA consumer panel has recommended urgent regulatory and Government-led reforms to protect and benefit millions of our constituents.

I will turn now to what changes have already been made, and then move on to what could or perhaps should be done next. I start by recognising what the Government have already done. Some of the changes made by the Treasury should have been made a decade ago. For example, it has removed the default retirement age and the effective requirement to purchase an annuity by the age of 75. That is a vital change: it means people no longer have to buy an annuity, and, if they do not, they can take 25% of their savings tax-free and draw an income from the rest. That is a serious option for many people. The starting point of a debate on annuities for every individual should always be whether an annuity will be useful and helpful to them, and what the alternatives are.

There have also been changes to the capped draw-down rules—more jargon, I am afraid, but those rules have been reformed, and that matters within the sector. The Treasury has also encouraged the ABI’s new code of conduct for retirement choices, which has come into play and has made modest steps forward on explanations and general advice, but I do not believe that that is enough. At the same time, the Department for Work and Pensions has promoted open market options and obliged DC schemes to provide what it calls a “wake-up pack” of information, pre-retirement.

[Heather Wheeler (South Derbyshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Dobbin. On that point, when people previously received their packs on coming up to retirement, there was every chance that there would have been a standard form in the pack from a chosen insurer detailing a chosen product. That has now gone, and people are given a form listing their options and saying where they need to go for each. That is a great step forward.

[Richard Graham]

My hon. Friend is knowledgeable and absolutely right to highlight that all ways of giving people more options and widening the market to give them choice must be steps in the right direction.

The changes that the Treasury has made do not in themselves answer the nub of the issue, as highlighted so well by the FCA consumer panel. The uncomfortable truth remains that very few people understand annuities or make the informed choices that increased choice should enable them to make. They do not understand what they are buying or whether it is the right product for them, and they have no idea what charges are being levied and whether they are appropriate. As the consumer panel concluded, much more needs to be done. The fundamental issues that I flagged up at the beginning of the debate remain unresolved. An annuity is still something that is bought once and that lasts for ever; however, the circumstances of the buyer might change.

I will finish by touching on some of the issues that could and should be addressed. I do not want to make too much of the structure of the market, but it would be interesting to hear the Minister’s views. In a way, an annuity is an offshoot of the pensions sector—it is what happens after a pension—but because it is provided by the insurance sector, it is regulated by regulators that are ultimately responsible to the Treasury. The Pensions Advisory Service is DWP funded; the Money Advice Service is separately funded, and the appointments of its chairman and chief executive are approved by the Treasury, but it is answerable for its strategy to the Department for Business, Innovation and Skills. There is therefore a sense of different advice being offered by different agencies that are responsible to different Departments. That situation does not seem wholly satisfactory to me. It is interesting that the Opposition have today chosen to put up their pensions spokesman rather than someone from their Treasury team.

There is the structural issue of how annuities are regulated and whether the gap between increasing regulation on the pension side, especially in the context of defined contributions and auto-enrolment, could be mirrored by more regulation on the annuities side. I hope that the DWP’s consultation on charges will also shed light on the charges on annuities. Perhaps the Treasury will be able to absorb that when the FCA investigation gets under way.

The broader issues remain, and the nub of the problem is that annuities are unchangeable and inflexible. It is well worth considering the suggestion floated in The Sunday Telegraph by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb)—that annuities might be changeable when circumstances change, so that they become more like mortgages that may be fixed for a period and thereafter traded or renewed.

A couple of hon. Members have highlighted advice. There is a strong case for believing that annuity brokers are not adding value for customers and that hidden commission should be revealed and consideration given to whether it is appropriate. More specific advice should be offered. When someone rings the Pensions Advisory Service to talk about annuities, they are told straight away that the service cannot discuss an individual’s specific circumstances and cannot access information about their pension or anything else. The advice, although good, is generic, but specific advice about people’s individual situations is most needed and least available.

[Heather Wheeler]

I am delighted that my hon. Friend called today’s debate because I have received a letter from a constituent, Mr Tejpal Singh of Stenson Fields, who asked me to ensure that the House had a debate on annuities, so a new year resolution has been kept. Mr Singh’s point was that people were given specific advice to save and were given to understand that when they took out an annuity at a specific age, the return would be £10,000 or £7,500 a year, but they are lucky to get £4,000 or even £3,000 now. That is difficult for people who have done the right thing on this important cost-of-living issue, but then the market has collapsed. I wonder whether the advice that my hon. Friend is referring to could help with that.

[Jim Dobbin (in the Chair)]

Order. Interventions should be short.

[Richard Graham]

I am grateful to my hon. Friend, who raises an important point. There is no doubt that annuity rates have dropped sharply from 10% to 5% over the last few years. Rather like charges on pensions and on investment management generally, it is only when a market becomes more difficult that it becomes more important to shine a light on charges and commission structures, because they become a much higher part of the total cost. If someone’s significant pension pot does not generate a significant income, they want to know where the money is going. My hon. Friend is absolutely right to raise that issue, which has propelled the annuities issue on to the front pages of newspapers from the business and financial sections.

I must sound a warning to the Opposition. We have heard from them over the last few weeks and months a sudden and dramatic cry that something must be done urgently. That rather prompts the question why they did so little during their long 13 years in office, with almost as many pensions Ministers. Some of the issues have been around for a long time. I am pleased that the FCA took up the issue of annuities relatively soon after its birth, put its consumer panel on the case and has now come up with research showing, I think without further question, that the annuities market is not working satisfactorily.

I want to make three points to clarify the matter. First, the annuities market is no longer working for many people in this country. It needs to be reformed, and if that is to be useful, it should be welcomed by everyone in the industry; otherwise, annuities will have no real role in future financial planning. Secondly, the opaqueness of the market stands in stark contrast with the increasing amount of light in the pensions industry as a whole and is therefore more of an anomaly than it was. Thirdly, the reports now coming in from regulatory bodies provide the Government with a wonderful opportunity to do something that millions of people throughout the country would be grateful for and reform an imperfect market so that it works much more effectively than at present. It falls to our Government to have that opportunity, and I hope we will seize it in the remaining 18 months of this Parliament.

09:56

[Mr Mark Hoban (Fareham) (Con)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this debate. He is spot on in saying that annuities represent an important market and that we must ensure that it functions properly, fairly and to the benefit of those who have saved for their retirement and done the right thing but now face the second most difficult financial decision of their lives. The cost of getting that decision wrong is clear.

The National Association of Pension Funds has suggested that, every year, pensioners lose between £500 million and £1 billion by not shopping around for the best annuity rate, and that they make the wrong choices for a variety of reasons. We must tackle that. The research suggests that more than half of retirees do not shop around for an annuity but roll over to one of their existing pension provider’s annuities.

When I was a Treasury Minister, I worked with the Association of British Insurers in drawing up its code of conduct, which helps to shift the balance away from the default option of staying with the pension provider and towards shopping around. My hon. Friend the Member for South Derbyshire (Heather Wheeler) referred in her intervention to the change in the wake-up pack and the forms in it. However, I question whether that code of conduct is working; we must look carefully at whether the effective default is to shop around. I am not sure that the evidence exists that the code has been as effective as it should be.

My second point, raised in the report produced by the Financial Conduct Authority’s consumer panel, is about what happens when people do shop around. It is clear that the quality of help available is variable. There are some good sources of advice, but too often they are less than satisfactory. Some websites are not clear about the charges and commission earned from putting someone in contact with an annuity provider. It is sometimes not clear whether the website is offering a view of the whole market or just part of it. I looked at the Money Advice Service’s website this morning and it is clear that its comparison tables draw information from a panel of annuity providers. Firms must be much clearer about what service they are offering when people are shopping around.

We must consider whether consumers are being ripped off by hidden charges when they are shopping around, whether they are comparing the whole market or a segment of it, and whether they understand the regulatory protection when using such websites. We must ensure that consumers are properly protected and think about existing sources of information and whether they are adequate. My hon. Friend the Member for Gloucester referred to the Pensions Advisory Service. The Money Advice Service also provides information on annuities; one recommendation from the consumer panel was that the support given through the Money Advice Service and the Pension Advisory Service should be beefed up to help consumers.

We need to bear employers in mind, as they are another important player in the market. The reason why our constituents have to make difficult decisions about how to spend their pension pot is that employees are moved away from defined benefit schemes to defined contribution schemes. We are putting much more risk on the shoulders of employees. Although a large number of employers support their employees in making such choices and put them into contact with a pension adviser at retirement, we need to encourage more employers to do that, so that more employees who are coming up to retirement know exactly what they should be looking for and who they should be consulting.

We need to look at how the annuities market functions, because a poorly performing market has a detrimental effect on income for pensioners and also, in the longer term, reduces the incentive to save. If people feel that they will not get good value for money when they retire, they think, “Why should I put money into a pension? Why shouldn’t I put money into a house instead, or into an ISA?”

We need to make sure that we have a properly functioning market. That is not to say that all that providers should be doing is the bare minimum set out in regulation. Providers should recognise that they have a role to play in having high standards, so that consumers feel that they are being treated fairly and they know, for example, what they are being charged, that they have the best possible rate and that they have explored all the options. Providers have a role to play, too, in ensuring a high standard of conduct in those sectors. A low standard of conduct will lead to potential mis-selling risks in future and, as we have seen in the banking sector, that costs the industry dear.

[David Rutley (Macclesfield) (Con)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing the debate. My hon. Friend the Member for Fareham (Mr Hoban) is making a compelling argument about the need to open up the market. I have been doing some research and it is clear that more than 400,000 people a year are making this decision. That is a huge number and it makes the case for opening the market up even more important. He talked about trying to delink product choices; we can look at what has gone on in the mortgage industry, for example, in decoupling household insurance. If we move forward to a more retail approach to the segment, it will help more people have a wide range of options as they consider this very important decision.

[Mr Hoban]

My hon. Friend is absolutely spot on. We need to ensure that there is a more retail-type approach. One reason why people are able to shop around and compare mortgages is that there is good-quality information out there.

It is easy to compare the different rates on mortgages and the monthly payments people will make on different mortgages. The charges are very transparent as well. We can learn things from the mortgage market and its transparency that can be applied to the annuities market. I do not often disagree with the pensions Minister, my hon. Friend the Member for Thornbury and Yate (Steve Webb), but I am not entirely convinced that being able to trade in annuities will work and be effective. There are some comparisons with the mortgage market that we cannot necessarily draw.

Finally, I want to make a broader point. Over the course of the past decade, there has been quite a lot of focus on, to use another bit of jargon, the accumulation phase—what happens when people build up their pensions savings. The previous Government commissioned Lord Turner to look at pensions. I think there was some dispute between Tony Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) about whether Lord Turner’s recommendations should be implemented, but they were, with cross-party consensus. There is considerable consensus over the introduction of the single-tier pension. One area that we have not debated in enough detail today starts that process. What happens when people spend their pension pot? What choices are available to them?

My hon. Friend the Member for Gloucester talked eloquently about an asymmetry of knowledge between someone seeking an annuity and an annuity provider, and about the circumstances that people face. Alternative products, such as income draw-down products, are out there, but that transfers both the investment risk and the longevity risk to the investor—the pensioner. We need to look carefully at the products out there, recognising that this very polarised market, with annuities on the one hand and draw-down products on the other, may not necessarily be in the interests of consumers. Other alternatives might be out there.

[Steve Baker (Wycombe) (Con)]

My hon. Friend is making his points with typical perspicacity. Before he concludes, will he consider what I think is one of the biggest factors in the market—the role of the Bank of England, both in terms of what it does to savers and what it does to the annuities market?

[Mr Hoban]

We were not going to get very far in the debate without that being mentioned; I am surprised that we got to four minutes past 10 before my hon. Friend raised the role of the Bank of England. I do not want to digress too much into that, but the Bank of England’s research into the inpact of quantitative easing on the pensions market demonstrates that there are upsides and downsides—that QE has stimulated the economy, and that has improved the value of equities as well as having a potential impact on gilt yields. However, let us leave that to one side.

We are moving to a situation in which people coming up to retirement will have a number of different sources for income in retirement. Those may be part-time work, equity in their houses or ISAs. There will certainly be a DC pension pot and there may be a DB pension. People’s income sources and needs will change over their retirement. Given that we are all expected not only to work longer, but to live longer, we will have choices to make. We need a proper debate about how we equip people for that post-retirement phase and how they can have the information they need to make the right choices—not only about what costs they will face in retirement, but about how to maximise their income in retirement.

Annuities are an important part of the market, but they are not the whole of it and we need a bigger debate to look at what is happening. That debate needs to involve not only pension companies and fund managers, but representatives of those in retirement, as well as those approaching retirement. It needs to ensure that the regulators—the FCA, particularly—are involved, as well as the Money Advice Service.

It is important that we get the issue right, because if we do not, many of our constituents will enter retirement with a lower income than they expect—perhaps lower than they feel is necessary to meet their financial needs. That is not good for them and it is not good for us. This debate has helped to spark a much wider process of debating how we ensure that people approaching retirement get the best financial deal possible.

10:06

[David Mowat (Warrington South) (Con)]

I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing the debate and on his chairmanship of the all-party parliamentary group on pensions, which has aired these issues on a number of occasions.

Over the lifetime of this Parliament, we have discussed the pensions industry a number of times. To date, the discussion has mostly been of the accumulation part and not, to use the jargon, the decumulation part, which we will talk about today. However, the issues are similar. I am a little less sanguine than some hon. Members who have spoken about the fact that we have fixed the transparency problems in the accumulation part of the industry—I believe we have not started to do so yet. The same problems of market failure, asymmetric knowledge and lack of transparency exist in the industry. Whether hon. Members represent the party of the cost of living or the party of hard-working people—Conservatives seem to have won in terms of numbers, at least in today’s debate—the issue really matters.

The fact that annuities are talked about so little compared with, say, energy prices, is a function of the point my hon. Friend has made. People understand annuities so little—annuities take people outside their comfort zones. That is a terrible thing when 400,000 people a year sign up for such products. This morning, during the time of the debate, 250 people will have signed up for an annuity. By lunchtime, a constituent of every Member in the Chamber will have signed up for an annuity. Approximately a third of them will have bought the wrong product within the market, even by the terms of the market. In my opinion, the market is inappropriate and a great disincentive for people to be part of the pensions industry. It is one of the reasons why so many people who should be investing in pensions would rather bite their arm off than get involved in either the accumulation or decumulation part of the industry.

Let us step back and think about the structure of the industry, because my solution responds a bit to that. It is an artificial industry, fed by tax relief. We have made the decision in the UK to have a pensions industry that is predicated on the relatively low basic state pension—it is low compared with the rest of Europe—but one that is supplemented by tax relief and private sector provision, of which the annuity is one of the final products. The tax relief that we pump into the industry is about £30 billion a year, which clearly behoves the Government to get involved. With auto-enrolment, that urgency is becoming much greater. It is not acceptable for us to leave it as an industry that has failed, on any measure, at any time when it has been looked at. It is reasonable that the Government get involved.

There are two parts to the failure. The one that gets most attention is the failure of people to shop around—the open market option—notwithstanding the progress that the ABI has made with its code of conduct. It is in that context that one third of people are currently making the wrong choices. However, that is not the only aspect of the failure. The industry is not subject to the market pressures that would cause better performance. Within the context of the industry, one third of people are choosing wrongly, but the whole industry is failing to provide products that are competitively priced and transparent.

The industry has fairly viciously applied the term “caveat emptor”. It is playing it long, because it is only a matter of time before a Conservative Government or a Labour Government take the matter more seriously and start to fix things. In discussions of energy companies, in which I have also been involved, it has been said that they operate a cartel. I do not like to use words such as “cartel” lightly, but we have to look at the return on capital employed in industries and at transparency. Anybody who compares the pensions industry with the energy industry will know where the evidence of a cartel, such as it is, exists.

The National Association of Pension Funds and Cass business school report estimated that about £1 billion a year was being misappropriated, or at least was not going to the pension holder, because about one third of people buy the incorrect product. We could fix that through the application of the OMO—more attempts to make the market transparent—but the view I took as I was doing research for the debate is that that is not actually the solution for annuities market. The solution is that the Government should offer annuities. People will say, “You want to nationalise the industry.” I do not want to nationalise the industry—I am a free marketeer. I was about to say that I am as much of a free marketeer as anyone in the debate, but then I saw my hon. Friend the Member for Wycombe (Steve Baker), who possibly would challenge that. However, I really do believe in the free market. I believe that the free market is a panacea and a great mechanism for allocation of capital and all that goes with that, but the annuities market is not working. When a market does not work, particularly a market that is at the centre of Government policy on retirement and incomes in old age, and all that goes with that, it is reasonable that we look at what we might do about it.

Our national savings organisation in Glasgow offers interest rates as the Government sell gilts. I see no reason why an organisation like that cannot offer annuities in the same way. It is basically a very simple product. Because of the interest of the industry in developing the asymmetry and all that goes with it, the product has been overly complicated.

[Sheila Gilmore (Edinburgh East) (Lab)]

I apologise for missing the initial part of the debate because I was in a Select Committee.

The market is not completely free. The Government have already intervened to say that people should be contributing to pensions. People do not have a choice or increasingly will not have a choice not to take part. The Government have a responsibility to the people they have placed in that position.

[David Mowat]

That is absolutely the point that I am making. It is not a free market, and it behoves Government to do more than they have done so far to get it right.

One approach is to try to make the market work better—that was the subject of some of the points that have been made already. The other way of dealing with it is more dramatic. I believe it is reasonable that the Government think very hard and seriously about providing products that would compete in the market with the industry guys, because, in any event, the principal thing that annuity providers do is match Government bonds. One reason why QE has been an issue is that the industry is buying Government bonds in order to match income and liability. It is a classic middleman thing. It is entirely reasonable for the Government—a Government of either complexion—to look long and hard at that suggestion. I believe that will happen, because we cannot continue with the market abuse that has occurred over the past two decades.

[Richard Graham]

My hon. Friend makes an interesting point on which we will no doubt hear more from the Opposition spokesman, the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont). Does my hon. Friend really believe that nationalisation of the annuities sector is in the overall interest of large numbers of taxpayers, who will in effect see the risk for their product transferred to them?

[David Mowat]

The point that has been made, I think, is that that risk is currently with the annuity providers; that seems to be the implications of that point. If that is my hon. Friend’s belief, it would be reasonable to say that their profits should be transparent, understood and not abusive.

[Richard Graham]

Does my hon. Friend not see that that is precisely the argument for reform? The case I have made is that the opportunity is there. The initial research by the consumer panel provides enough light to justify a more detailed investigation, which is happening. The Government can then make decisions to reform the industry. The mortgage sector was reformed, but the Government are not providing the country’s mortgages.

[David Mowat]

My hon. Friend is right that the Government do not provide mortgages, but they do provide people with interest rate products. There is an analogy with annuities, which are an extremely important transaction. In any event, the industry is an artificial one, because it is driven, as I have said, by tax relief. Annuities are not optional—we can draw down, but, broadly speaking, until very recently, everybody has had to buy an annuity.

By the way, I did not advocate nationalisation. I am advocating that the Government offer a product. They can compete with the existing market, rather like the National Employment Savings Trust competes with the existing market. That is not nationalisation. If the existing market is pricing things in a certain way and making very clever decisions on longevity and actuarial things and so on, it will win, and so be it; good luck to it. However, I suspect that that may not be the case. We must bring trust back. I agree that it is important to make the market work. I floated the point about national insurance because I think that that proposal will have to happen, but I also think that there are a number of things we could do to make the market work better.

[Mr Hoban]

One objective of the FCA is to promote competition. It is currently undertaking a thematic review of the annuities market. That would be a very good starting point for it to undertake a market study to look at the economics of the annuity industry, to see whether it is making excessive profits, and to understand the charging structures in order to help to inform what the next stage of the reforms of the annuity market should be.

[David Mowat]

I have absolutely no problem with any of that. In fact, the next point in my notes is on the Office of Fair Trading. We should try to make the annuities market work better, in the same way as we should make the accumulation market work better. The fact that NEST has been introduced is not a reason not to have that happen. My proposal on the Government offering annuities alongside the market is not a reason not to make the market work better.

The point was made earlier on education in the market, the retail distribution review and all the rest of it. I do not agree that the charging structure is a disincentive, if that was the point made by my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), who has left the Chamber. It might be a disincentive, but it is no worse than a charging structure that pays people to recommend products based on commission and all that that means. That is not a solution in its own right, but I agree that we should try to make the market work better. We should hold the ABI to account on the application of the OMO.

We could try other things. If one third of people continue to stay with their existing supplier and buy inappropriate products as a consequence, there is a case for enforced separation, meaning that people buy the decumulation product from a different provider from the one from which they buy the accumulation product. That is entirely reasonable if the OMO code of conduct does not work better—it is currently rather patchy.

Another thing we could do to make the market work better is enforce the simplification of annuities, exactly as we have done in the energy industry, with bands to allow the comparison of products from different providers. The case for that is even stronger in the pensions industry than in the energy industry. I want recognition that draw-down might be used on smaller pots than at present, so that it receives wider application. When I speak to anybody who is about to make a decision on whether to use an annuity or a draw-down, I recommend that they think long and hard before they go down the annuity route. We could do more on that.

We need to make the market work better. The point I made about national insurance also applies to accumulation. NEST is working quite well, and it will be an incentive for reform in the industry. We could do the same with the decumulation part of the industry.

I have a couple of final points. It is interesting that a Treasury Minister is replying to the debate and a pensions spokesman is speaking for the Opposition. In a way, the issue has suffered because it has not wholly been owned by either Department and has tended to fall between the two. I hope that that does not continue. I also hope that people in the industry listen to the debate—I see that a couple of them are in the Public Gallery—because it is not right for the current situation to continue. It is not right that the industry response is to play it long. In the time I have been speaking, 40 people will have signed up for annuities, 15 of whom will have bought the wrong ones. We owe it to all our constituents to get that fixed.

10:22

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Dobbin. I congratulate the hon. Member for Gloucester (Richard Graham) on securing the debate, because annuities continue to rise up the political agenda. I was struck by the hon. Gentleman’s speech, which I interpreted as a clear message that the market is not working properly. Indeed, I understood him to say that the annuities market was broken and cannot be fixed simply through individual engagement by consumers. The repeated references to the Financial Conduct Authority’s consumer panel report were helpful, because the whole thrust of that report was that the market cannot be fixed purely by increased transparency.

Several Government Members referred to mortgages. A big difference between mortgages and annuities is that annuities are one-off products, so consumers cannot learn more about annuities over time through repeated purchases. I agree with the hon. Member for Fareham (Mr Hoban) that the idea of tradeable annuities, which was floated over the weekend by the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb)—I was a little surprised that the hon. Member for Gloucester repeated that suggestion—will not get far.

The hon. Member for Gloucester provided compelling evidence of the fact that the market does not work effectively and cannot be fixed by individual engagement. His speech might stand as a metaphor for the Government’s approach, because there is general agreement that the market does not work properly—the hon. Member for Warrington South (David Mowat) made that argument eloquently. Moving from diagnosis to solution, however, the Government’s cupboard is pretty bare. I listened carefully to the solutions that the hon. Member for Gloucester suggested at the end of his speech. He noted that the Treasury had acted to remove the default retirement age and that people are no longer required by law to annuitise by 75. As the House of Commons Library made clear earlier this year, however, someone with a secure pension of less than £20,000 essentially has to annuitise by 75. Draw-down works well for those with big pension pots, but the rest of us still have to annuitise our defined contribution pot, so that is not a solution.

The hon. Gentleman was good enough to mention the Association of British Insurers code, but he was absolutely right to say that that is not enough. Let us be clear about what the ABI has done so far. The open market option gives people more information about their ability not to take an annuity from their existing pension provider. The hon. Member for Fareham was somewhat generous when he suggested that the results were not in yet to show whether that will deal with the lack of shopping around. It will not deal with the problem. All the evidence in the market shows that inertia is a powerful force on consumers that leads to excess profits for providers.

[Mr Hoban]

The code of conduct came into place only on 1 March last year, so it has run for less than a year. It is therefore hard for either of us to say that it has or has not worked.

[Gregg McClymont]

The hon. Gentleman referred to the Turner commission. The thrust of its conclusions—and, indeed, of the auto-enrolment pensions policy pursued by the previous Labour Government and the current Government—was that inertia is a fact of pensions markets. Auto-enrolment is an attempt to use inertia for the good of the public and the consumer. That is the basis on which pensions policy is developing under the pensions Minister—a process that began under the previous Labour Government.

There is a massive lack of engagement and involvement in pensions. Leaving aside the ABI, there is general recognition in the pensions world that the open market option is simply not going to do the job. That is the thrust of the FCA consumer report, which has been mentioned several times. Having looked at the matter closely over two years, and based on the Turner commission consensus, which we wish to maintain, I am prepared to say that inertia in the annuities market is a reality that leads to excess profits. That is not only my description, but the description given by the pensions Minister, who said in a recent television documentary that excess profits were being made by insurers, which is a product of inertia.

[Richard Graham]

The interesting point about inertia is that that is precisely the context in which I recommended that a change be considered to the current requirement for an individual to buy an annuity for life, whatever their circumstances or however those circumstances change. That crucial change would affect the inertia about which the hon. Gentleman is concerned, because it would enable people to reconsider and change their annuity if circumstances demanded that. Does he agree?

[Gregg McClymont]

No, I do not agree. The problem in the market is that people do not shop around, but the hon. Gentleman suggests that we should solve that problem by creating an even more complex product, in which people will magically start to engage in trading and moving from one annuity to another.

[Richard Graham]

Will the hon. Gentleman give way?

[Gregg McClymont]

No, let me continue. It is simply not feasible or credible. The idea of tradable annuities is a non-starter, and I will set out the response to it from across the industry. Phil Loney from Royal London said they had not been thought through by the Minister. Mark Wood from JLT Employee Benefits described it as misleading to compare annuities to mortgages. Tom McPhail, who is present in the Public Gallery, said that the Government

“should not try to invent products which…aren’t likely to be…value for money.”

The Actuary magazine described the wider response from the industry as “scathing”. The idea is a non-starter.

[Richard Graham]

Will the hon. Gentleman give way?

[Gregg McClymont]

We have heard from the hon. Gentleman, who gave a long and interesting speech, and it is now my duty to respond. I shall make a little more progress and then I will let him back in. He diagnosed the problem effectively, but provided no solution. The airy-fairy, half-baked suggestion that we should think about tradable annuities does not deal with the reality, which more than one Conservative Member has set out this morning, that hundreds of thousands of people are annuitising every year, right now. What are the Government doing about that now, in real time?

Interestingly, the hon. Member for Gloucester diagnosed the problem very well, and understood that transparency will not solve it. The solution cannot be based on a utopian hope for greater individual engagement; it must be like what the OFT report did more widely for pensions. The demand side—the buy side—is too weak; how can we strengthen consumer weight or consumers’ ability to get a good deal? My view is that although individual engagement is a good thing, and anything that encourages it should be welcomed, it will not solve the problem, given that inertia is a central fact of the pensions marketplace.

The Opposition tabled a sensible amendment to the Pensions Bill which would at least have begun to tackle the problem, by ensuring that in the existing market—in the real world, right now—those who annuitise would get access to properly regulated, independent brokerage. That is not a panacea, but it is a reasonable starting point. It bears positive comparison with the Government’s lack of action. They have done nothing on annuities; there are no clauses about them in the Pensions Bill. That may or may not be an indictment of Government policy. No one says that the problem can be solved overnight, but surely an amendment of the kind tabled by Labour is a reasonable starting point.

More widely, the only answer is more purchasing power on the side of the consumer. That means we need to move to mandatory independent brokering, ideally in-house rather than external. [Interruption.] The hon. Member for South Derbyshire (Heather Wheeler) looks puzzled. In 2012, the National Association of Pension Funds, which is represented in the Public Gallery, rightly suggested that the annuity-buying process should be part of a pension scheme—that goes to the point that building up a pension pot is entirely part of the same process as producing an income at the end. Pension schemes should have a role in providing annuity brokering advice—that is what I mean by “in-house”.

Of course, that leads us into the argument about pension schemes being big enough for that to happen. I know that the hon. Member for Gloucester is aware, although it was not mentioned in the debate, that the market is fragmented. There are hundreds of thousands of pension schemes, but the providers of annuities are four or five insurance companies and three or four specialists. It is worth asking why market entrants do not emerge to compete with the giants. It is probably to do with the amount of capital needed, and the fact that on the insurer side it is possible to cross-subsidise products, because of being involved during the phase of building up the pension pot, as well as in the creation of a retirement income at the end. We need pension schemes to be involved as a matter of course in ensuring that their members get the best possible annuity at the end of the saving process. That seems a sensible way to proceed.

The hon. Member for Warrington South, who has done doughty work in the area we are debating, suggested that there should be a Government-backed annuity provider, and the hon. Member for Gloucester intervened and said that that was nationalisation. If it is, then so is the National Employment Savings Trust, which the Government support. NEST is a Government-backed scheme intended to bring down the benchmark for charges during the phase of building up a pension pot, and it has been very successful. That is not nationalisation, and nor is the suggestion of the hon. Member for Warrington South.

[Richard Graham]

The hon. Gentleman’s earlier reluctance to give way is uncharacteristic, especially as 45 minutes were left in the debate for Front-Bench spokesmen. He has two or three times confused issues, especially on my exchange with my hon. Friend the Member for Warrington South about nationalisation. My hon. Friend clarified that and explained that he was looking for participation in the market, not domination of it. Members on both sides of the House have an opportunity today to express their views and reach a consensus; the review by the Financial Conduct Authority and the consultation by the Department for Work and Pensions provide an opportunity for the House to move forward on an issue of concern to all our constituents. Does the hon. Gentleman agree? He should surely reach for consensus, not political division.

[Jim Dobbin (in the Chair)]

Order. I remind hon. Members that interventions should be short.

[Gregg McClymont]

I am not sure what the point of the hon. Gentleman’s intervention was, other than to show that he had not understood the point made by the hon. Member for Warrington South. Everyone else understood that he meant proceeding in the way NEST does, rather than nationalisation. For people who understood the point, no clarification was needed.

[Mr Hoban]

There is a fundamental difference between NEST facilitating the building up of pension pots and the state bearing additional longevity risk by providing annuities. The additional longevity risk would be borne by taxpayers if it were not correctly assessed. That would add to the existing longevity risk that taxpayers face through changing demographics and increased care bills and pension costs.

[Gregg McClymont]

That sounds a plausible point; I should say it is for the hon. Member for Warrington South, who put the idea forward. My observation is that the idea is not nationalisation, but something along the lines of NEST, and that it would at least be worth thinking about for the Government.

[David Mowat]

Since we are discussing the point I made, I feel I should chip in. Of course it was about participation. Two of my hon. Friends have made points about risk. The state already carries risk of inadequate pension provision, which is manifested daily. To talk about further risk in that context is disingenuous.

[Gregg McClymont]

That is clearly a matter for Conservative Members to debate among themselves after we leave the Chamber.

We face a broken market; the question is what to do about it. It seems to the Opposition that the way forward is increasingly to involve pension schemes in—I am wary about using this term, as I try not to use the jargon—“decumulation”. Pension schemes are involved in building up savings pots for members. They should also be involved in turning those savings pots into retirement income, which is what the process is all about, after all. Moving to a system in which pension schemes ensured that their members got decent, well regulated brokerage advice would mean bigger pension schemes, because many very small pension schemes do not now have the ability.

We have mentioned NEST. What does it do about annuities? It has sealed panel bids from annuity providers for each cohort coming to retirement. That is not the whole of the market, because NEST must annuitise for people with very small pots, as part of its public service objective, but that is the road we must go down. The Royal Mail pension scheme is another one that recently announced that it would provide an in-house brokerage service for its members.

The hon. Member for Gloucester was absolutely right in his analysis of the market. The problem—it is not his problem; he is an august Back Bencher, but not on the ministerial team—is that so far the pensions Minister and, I assume, the Treasury have not come up with anything concrete. Until they do, the hundreds of people who are annuitising as we speak and the 400,000 people who annuitise every year will surely look at the Government and ask when they will end the rip-off and the excess profits. If the pensions Minister says that insurance companies are profiting excessively from annuities, when will the Government act? Surely it must be sooner rather than later.

I make this point again to the Government, in the hope that they might listen. Any solution that depends solely on increasing individual consumers’ engagement in the process of buying an annuity will not succeed. The whole thrust of Government pensions policy since Turner, which this Government have continued, is that inertia is a reality that we must make work in the public interest, rather than in the interests of pension company shareholders. That has been the thrust of pensions policy for a decade now. Any solution to the annuities market dysfunction must start from that assumption. In the spirit of the Turner consensus and co-operation on auto-enrolment, I urge the Government to take heed of that reality in the annuities market.

10:42

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

It is a great pleasure to serve under your chairmanship, Mr Dobbin. I congratulate my hon. Friend the Member for Gloucester (Richard Graham) on securing this debate and opening it so well. He brings to the matter his professional experience before entering the House, his experience as chairman of the all-party parliamentary group on pensions and his experience of discussing these matters in Gloucester pubs, all of which have helped our deliberations. I thank my hon. Friend the Member for Fareham (Mr Hoban), who served with such distinction as a Treasury Minister dealing with such matters for more than two years and made a substantial contribution to the Government’s achievements in the area. I also thank my hon. Friend the Member for Warrington South (David Mowat), who spoke with great passion and demonstrated his determination to ensure that consumers—our constituents—are served well by the annuities market.

It is a priority for all of us that the annuities market should work in consumers’ best interests. When people have saved hard for a pension, it is right that they should get the best out of their savings on retirement. The decision that people make about their savings on retirement can determine what income they receive for the rest of their lives. Undoubtedly, it is one of the most important financial decisions that a person can make. As we have heard, more than 400,000 people purchase annuities each year, and studies show that there can be more than a 30% difference in the incomes offered by providers, highlighting the importance of making the right decision.

The Government want to ensure that the annuities market works in favour of the consumer and that consumers can make well-informed decisions to secure the best rates and exert effective competitive pressure on the market. The Government have been working with industry and consumer groups to make effective changes in the market, including work carried out by the open market option review group, which has introduced a number of measures aimed at encouraging consumers to shop around on the open market when buying an annuity.

For example, as my hon. Friend the Member for Gloucester pointed out—as did my hon. Friend the Member for Fareham, who worked so hard on the matter—the Association of British Insurers has introduced a code of conduct for retirement choices, which came into effect on 1 March last year. The code is binding on all ABI members that sell annuities, covering almost all the market. In addition, tailored advice and tools have been developed by the Money Advice Service and the Pensions Advisory Service to help consumers understand their choices and promote the benefits of shopping around.

The ABI code has brought about an important change in how annuity providers communicate with their customers, a point raised by my hon. Friend the Member for Fareham and my hon. Friend the Member for South Derbyshire (Heather Wheeler). The removal of application forms from pre-retirement packs actively encourages consumers to engage with the important process of choosing their annuity type and provider, ensuring that they do not automatically settle for the default. Through requirements on providers to provide better information to retirees in their wake-up packs, and new and improved tools such as the Money Advice Service’s comparison tables and the Pensions Advisory Service’s online planners, we can ensure that consumers have the resources that they need to make informed decisions.

The ABI will evaluate the impact of its code in March this year, one year after its implementation. The OMO review group will also evaluate its wider package of measures and their effectiveness.

[Jim Shannon (Strangford) (DUP)]

I apologise for not being here in time, Mr Dobbin. My plane was an hour late, so I could not be here. I also apologise to the Minister and to the hon. Member for Gloucester (Richard Graham). I wanted to speak in this debate, but I did not have the chance. Does the Minister agree that the language used in the selling of annuities, especially to elderly people, must be such that they can understand what they are getting themselves into? I believe that they do not.

[Mr Gauke]

The hon. Gentleman raises an important point. It must be right that we should do all that we can to ensure as much transparency for consumers as possible. That includes a number of aspects, some of which I have mentioned. Let me go further.

The code and other measures will only be as successful as the outcomes that they prompt. We want clear evidence that more people are making active, better choices about their retirement income as a result of the changes. If we do not, we will not hesitate to consider further action. In addition to the ongoing work to help consumers make better choices, the FCA is currently conducting a thematic review of the annuities market and how well it is working to serve consumers’ interests, a pricing survey of all annuity providers and a comparison of the rates available to consumers through a range of distribution channels. The review will consider whether firms create barriers that can restrict consumers from shopping around, and what risks and potential for detriment those barriers may present for consumers. I look forward to the report’s initial findings, which will be published next month.

Although it is imperative that the annuity market works in the consumer’s interests as an effective option for retirement income, it is important to consider the retirement income market as a whole to ensure that consumers have income flexibility in retirement. To increase flexibility, the Government have removed both the default retirement age and the effective requirement to purchase an annuity by age 75. Whether they annuitise or not, individuals are permitted to take 25% of their accumulated pension savings as a tax-free lump sum before going on to secure an income with the remaining savings. To ensure that that income can best serve retirees’ needs, the Government have reformed the capped draw-down rules and raised the annual withdrawal limit from 100% to 120% of the value of an equivalent annuity. That can help to raise the retirement incomes of individuals in draw-down arrangements who may recently have experienced reductions in income due to wider economic conditions.

There is additional flexibility for those with a guaranteed income of at least £20,000 a year. With income already secured, they have the option of a flexible draw-down arrangement, in which they can withdraw any amount from their pension pot. Those coming to retirement will benefit from having more flexibility in deciding how to provide an income for themselves in retirement, and for those with small pension pots, the Government have taken steps to reform the trivial commutation pensions tax rules. An individual who is aged 60 or over with total pension savings of less than £18,000 can withdraw the entirety of their savings as a lump sum. The first 25% of that lump sum is normally tax-free, with the remainder taxable as income. In addition, small occupational pension pots under £2,000, and up to two small personal pension pots under £2,000, can be taken as a lump sum for those aged 60 or over, even when people have savings in excess of the aggregate limit. All those options add flexibility.

Having a decent retirement income is driven by two factors: saving enough for retirement through working life, and making good choices at retirement to secure a reliable and maintainable income throughout retirement. It is important to remember that the biggest determinant of how much income someone receives in retirement is how much they have saved during their working life. With the introduction of auto-enrolment, the Government have taken a huge step forward towards ensuring that consumers start to save for their retirement and carry on saving throughout their working life. Auto-enrolment is the most important pensions change for a century—around 6 million to 9 million people will make new savings and increase savings for their retirement. It is estimated that that will generate around £11 billion in extra pension saving by 2020, which will mean an extra £11 billion coming to the retirement income market within the next six years and a new wave of retirees with robust defined contribution pension pots, making it all the more important that we ensure that the retirement income market is working effectively.

The Government are also acting to protect those valuable savings. We recently consulted on proposals to cap pension charges and introduce a range of transparency measures as a means of ensuring that savings are not eroded by charges. We are currently assessing the responses to the consultation and an announcement will be made when that work is completed.

[David Mowat]

The Minister is right that the Government are consulting on pension charges. I have two questions for him. First, have the Government given any thought to annuity charges and to capping them? Secondly, approximately what level of charge does he believe is reasonable on an annuity of £100,000 during the lifetime of that annuity?

[Mr Gauke]

I suspect that my hon. Friend will not be surprised to learn that I am not inclined to be drawn into specifying what I believe is a reasonable charge for an annuity. What I will say to him—I will expand on this in a moment—is that we want to ensure that the annuities market works. We want to ensure that there are competitive pressures in that market. In the light of the consultation that we have undertaken on pension charges, the work undertaken by the FCA and the analysis of the evidence that has already emerged on the ABI code of conduct and so on, we want to ensure that the spotlight remains on the market, so that we do everything we can to ensure that it works effectively for consumers.

We are committed to ensuring that consumers have access to retirement income options that provide a reliable and decent income throughout retirement. That is an agenda to which ministerial colleagues in the Treasury and the Department for Work and Pensions and I are committed. We are working together to ensure that consumers have appropriate options, value for money and support when they come to turn their hard-earned pension savings into a retirement income. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), who has responsibility for pensions, has recently suggested,reforms will be considered in the context of that work. That is why the Treasury and the DWP are currently considering the broad range of research and evidence on decumulation and how the market is working—to explore the impacts and interactions between market and consumer behaviour and Government policy.

I thank my hon. Friend the Member for Gloucester for securing and opening this debate. It has allowed us to discuss important annuities issues that are crucial for consumers if they are to secure the best from their savings at retirement.

[Richard Graham]

Will the Minister give way?

[Mr Gauke]

I will certainly give way to my hon. Friend—I can assure him that I am not about to conclude my remarks in the next sentence or two.

[Richard Graham]

I will be very brief, and I am grateful to my hon. Friend for his very measured reply to the debate. When the FCA review is published and when the ABI one-year review of the code of conduct comes out, the Treasury—as the Minister was saying—will look closely at how well the market is working. Just so we can be absolutely clear, if there is evidence that it is not working as well as it should and that there are hidden commissions, unnecessary charges and all the rest of it, will they be taken into consideration and reviewed and changed if need be?

[Mr Gauke]

Let me put it this way: the industry, the Government, the regulator and consumers all have roles to play in ensuring that consumers get the best deal. So far, action by the Government, the industry and the regulator has focused on ensuring that the market works more effectively to ensure that consumers shop around; identifying conduct risks that prevent them from doing so; and ensuring that they have the right tools and information to make informed choices and provide competitive pressure on the market. However, as I said earlier, those measures are only as effective as the changes they bring about, and they should not stop here.

The Government look forward to the results of the ABI’s evaluation of the effectiveness of its code, and to the FCA’s findings following its thematic review of the market and how consumers are being treated. They will complement the Government’s review of the evidence on how the market is operating and whether improvements are necessary. However, to answer directly the question put by my hon. Friend, the Government are serious about ensuring that the action already under way has a clear and positive impact. We have not ruled out further action in future.

[Gregg McClymont]

Does the Minister accept that the thrust of pensions policy has been to accept the reality of inertia and harness it for the public good? Everything that he has read so far from his script has been about individual engagement. Does he think that individual engagement is enough in this market?

[Mr Gauke]

The hon. Gentleman is too quick to dismiss the role of individual engagement—it seems to me that he dismisses it almost completely. It is important that we engage individuals in such hugely important decisions, that we increase transparency and that we remove any hidden barriers that may exist. There is consensus—we all want the market to work. If we are to succeed, we must take every measure available to improve individual engagement. We should not dismiss it.

[Mr Hoban]

Is not the point that we can design legislation around inertia to benefit from it, and that we can also design out inertia? The default—acquiring an annuity from a pension provider—can be designed out through an effective open market option, which will ensure that consumers can shop around and have good-quality information. The mass engagement solution put forward by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) is another way of tackling inertia. He accepts that we can change inertia and get people to shop around instead.

[Mr Gauke]

My hon. Friend puts it very well and I agree with his point.

To conclude, the view of all hon. Members who have spoken in the debate is that annuities are very important. There are concerns as to whether the market has worked as well as it might have done during a number of years, but there is recognition that the Government have made a number of reforms on our watch—I am delighted that my hon. Friend the Member for Fareham, who was so involved with those reforms, is here. However, we must keep our eyes on the matter and keep the spotlight on the annuities market. Crucially, we must ensure that the market is working in the best interests of consumers.

Health Funding (Telford and Wrekin)

Tuesday 7th January 2014 Westminster Hall

11:00

[David Wright (Telford) (Lab)]

Mr Dobbin, it is a pleasure to see you in the Chair this morning and to have the opportunity to talk about health funding in Telford and Wrekin.

The objective of all of us, across the political divide and in the health community, is to strengthen the links between the formal national health service and local authorities and care providers in the community. That is the general consensus and I think everybody agrees with that as an overarching policy. However, I am concerned about the amount of resource available to tackle issues to do with continuing health care in the community in Telford and Wrekin, and about how that health funding integrates with the work that the local authority is doing.

It is pretty much acknowledged, across the political divide, that Telford and Wrekin council is a good unitary authority. It performs well and is working hard to ensure that it protects local residents as we move through a period of budget restraint and cuts to services. That is difficult and tough for the local authority and it has a major impact on our community. The way we integrate health services with the ongoing provision of front-line social care services is important.

The council is undertaking a consultation on its budget. Real pressure is emanating from Telford and Wrekin clinical commissioning group’s stance on funding continuing health care cases in the town. Some 50% of the council’s revenue budget—the money it spends on day-to-day services, such as caring for the elderly, looking after children and taking care of the environment—comes from the Government, and in the last three years it has been cut by almost £29 million.

By the end of 2015-16, the cut in the council’s funding from the Government will have reached nearly £50 million. These are cuts to cash grants that the Government provide to the council. Clearly, if inflation is taken into account, the real-terms cuts are much greater. At the same time, the council is facing major challenges from the growing cost of caring for increasing numbers of vulnerable people in our community. The CCG has added to the financial pressure by shunting around £8.5 million of costs that it would previously have covered in respect of CHC cases to the local authority. That is being done by the CCG’s taking a much harder line in the assessment of CHC cases. That is impacting seriously on the council and its budget.

Today is about exploring what more we can do to integrate health funding with the work that the local authority is doing in its social care environment. To set this out fairly starkly, in 2009-10 the primary care trust spent some £13.9 million on CHC cases. In 2012-13, the equivalent body in Telford and Wrekin spent just £2.3 million directly on care packages for CHC. I acknowledge that the CCG has topped that money up this year, with an additional £2.4 million, but that is a one-off payment. There is concern that such an enormous reduction in funding for CHC cases is putting enormous pressure on the health service and on front-line integrated health and social care services.

The other important issue to consider is how the funding formula has been calculated in respect of the number of people receiving continuing health care funding in our community, in comparison with surrounding locations. As at 30 June last year, there were 19.4 people per 50,000 population in Telford and Wrekin receiving CHC funding; in Shropshire, the figure was 82.2 per 50,000 population. Considerably fewer people, proportionately, are receiving CHC funding in Telford and Wrekin, but I cannot for the life of me determine why. Some have said that it is because Shropshire has an older population and because its structure is different, but it might be imagined that, given the provision of community hospitals in other parts of Shropshire, the figure would be different and that Telford and Wrekin would be doing far better.

If Telford and Wrekin is compared with similar local authorities—what might be called its Chartered Institute of Public Finance and Accountancy neighbours—we see that we are struggling to match the numbers of people per 50,000 weighted population who are receiving continuing health care funding. For example, in Warrington the figure is 54.6, in Darlington it is 65.1 and in Stoke-on-Trent it is 48.4 of weighted population per eligible 50,000 people. I reiterate that the figure is 19.4 in Telford and Wrekin and I cannot understand why, in that context, so few people are receiving continuing health care funding. This places enormous pressure on the local authority. As people move out of hospital or into care, whether at home or in other settings, the council is having to step in and try to provide care and support that ought to be provided, in my view, by the health service.

Although I accept that the primary care trust, at one time, was generous in its CHC funding compared with national averages—I mentioned the historical figures—the position now seems to have reversed. As I said, the ratio of CHC cases per 50,000 population in Shropshire is almost four times higher than in Telford and Wrekin. The council has calculated that, if the CCG spent at the national average, it would need to spend in the region of £7.65 million. That is significantly different from our current funding profile. I am concerned that the formula is not working effectively for Telford and Wrekin—either that, or the assessment procedure is not being undertaken in the same way as in other areas of the country.

The Prime Minister made it clear in the Conservative manifesto for the last general election that health funding would be protected. I am concerned that costs are being shunted away out of the health service and on to local authorities. The real concern is that these hidden cuts within the health service are being fed through into the local authority sector, so that nobody notices. Well, I hope that after today people will notice. This dilemma will be faced by a range of local authorities that will increasingly have to pick up costs that would previously have been met by the health service.

The Minister is a good man with a good reputation for understanding how the health service works—understandably, given his background—and I am sure that he agrees with my opening remarks. We want to see better integration between the health service and social care, as provided by local authorities. That is what I am calling for today. I should like him to look at the formula for Telford and Wrekin overall, in terms of the work being done by the CCG, and at whether the assessment procedure operating in our area is correct and being applied effectively.

The council is making a lot of savings. It has delivered more than £50 million of ongoing annual revenue savings, and it is considering proposals to cut the remaining £23.7 million that has to be saved over the next two years. Colleagues from mid-Wales will have seen the coverage in the Shropshire Star over the past few days on how the council is working extremely hard to identify where some of the cuts can take place. We have already seen significant cuts in the council’s back-office staff, and large numbers of people have left the structure of the local authority—1,000 posts at the council have been deleted or become subject to voluntary redundancy in recent years—so there has been a lot of work to try to pare back costs.

In the next two years, the council will endeavour to meet the Government’s proposal to freeze council tax too, because we are conscious of the big cost-of-living issues for ordinary people. That means that some of the cuts to front-line social care services will fall on the most vulnerable people in our community. If the continuing health care budget is not correct, and if the health funding that passes through, in partnership with local authorities, to care for the most vulnerable people in our community is not correct, we will have an even greater challenge in the long term.

We are trying to develop proposals to make savings at local authority level, but the Government need to reconsider the issue of continuing health care. I would like the Minister to address direct support for trying to achieve a fairer apportionment of CHC costs between the CCG and the council in future years. The council’s managing director has written formally to the CCG. I understand that, fortuitously, a meeting is taking place today to discuss some of the issues.

I am not pitching for large pots of new money. We just want a fair deal on what we are entitled to, and I hope that the Minister can reassure us today that he is aware of the issues and how important they are for health funding within our community. I also hope that he is aware of the pressure on Telford and Wrekin council, which I think he will agree is a good council that tries to do a good job and is trying to deliver on the Government’s commitments while ensuring that we provide care and support for some of the most vulnerable people in our community.

11:12

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

It is a pleasure to serve under your chairmanship for the third time, Mr Dobbin.

I congratulate the hon. Member for Telford (David Wright) on securing today’s Westminster Hall debate, on his strong advocacy for the needs of his constituents and on his highlighting of the importance of political consensus on these issues. He is absolutely right to do so.

We know that the single biggest challenge facing our health services is how better to look after older people and people with long-term disabilities and how to provide dignity in the care of people as they grow older. The key to delivering better health services for that group—and for all patients, including those in the early years of life—is an increased focus on integration and more joined-up health care services. That is very much at the heart of the hon. Gentleman’s contribution, and I hope my remarks will reassure him that it is very much the focus of the Government’s stewardship of the health care system.

The hon. Gentleman will be aware that a £3.8 billion integration fund has been set up that will, in the longer term, drive and improve joined-up services between local authorities and the NHS. For far too long, there has been too much silo working. Silo budgets have sometimes reinforced the silo working, and it is often patients who have fallen through the gaps and paid the price. That is why the Government are determined to fix the situation and ensure that, not just through the changes we are introducing in the Care Bill but through the integration fund, there will be greater synergy of joint commissioning and pooled budgets between local authorities and the NHS, where that is to the benefit of patients.

It was a pleasure for me to visit the Princess Royal hospital in November 2013 to see the birthing centre and the development of the new women and children’s centre. As the hon. Gentleman will be aware, the trust has benefited from some £35 million of external capital money to support its capital investment programme, including the development of the women and children’s centre, which is due to open in autumn 2014.

Before we proceed, there are two issues. First, there is the key issue of how the national funding formula is set. I reaffirm that throughout the NHS, including in Telford and Wrekin, there have been real-terms increases in NHS funding under this Government. Secondly, the local CCG has discretion on how it allocates its budget, so there is some local discretion, which probably goes to the heart of some of the hon. Gentleman’s concerns.

Until recently, the funding allocation was set by the Department of Health, but under the new arrangements politics has been taken outside the setting of health care funding; NHS England now has direct responsibility for funding allocations. The NHS, through NHS England, relies on the Advisory Committee on Resource Allocation, or ACRA, and its assessment of the expected need for health services to help set allocations for each area.

We were all pleased that, for the 2013-14 allocations, NHS England decided that following the ACRA recommendations exactly would lead to higher growth for areas with better health outcomes and possibly reduced budgets for areas with less good health outcomes. Given that, like NHS England, we are all concerned about reducing health inequalities, the important decision was made to maintain the substantial weighting in the formula for areas of deprivation and health care inequalities. The ACRA formula was not directly followed, an issue on which we have touched in previous Westminster Hall debates. NHS England’s thinking, in outline, was that the recommendations were inconsistent with the responsibility to reduce health inequalities. NHS England conducted a fundamental review that has informed the allocations.

On 17 December 2013, NHS England’s board met and agreed CCG planning guidance and allocations for 2014-15, which will help commissioners to commission services for the benefit of local populations. The Government have protected the overall health budget, and NHS England has ensured that every CCG in England will continue to benefit from at least stable real-terms funding for the next two years.

The Government’s mandate for NHS England makes it clear that we expect it to place equal access for equal need at the heart of its approach to allocations; to consider health inequalities; to ensure a transparent process; and to ensure that changes to allocations do not destabilise local health care economies. A rapid change to or endorsement of the ACRA recommendations would have led to mass destabilisation of local health care economies. NHS England was mindful of that, and of the need to prioritise funding for areas of deprivation, in its allocations.

The 2014-15 allocation for Telford and Wrekin CCG will be almost £187.8 million—the per capita allocation is £1,058 a head, about the same as my constituents receive in Suffolk. That is a cash increase of 2.14% on the funding that the CCG received this year. The CCG will also receive a 1.7% increase on its allocation for 2015-16, which means that its funding will go up to almost £191 million. Additionally, NHS England has announced that the Shropshire and Staffordshire area team will receive a 2.38% rise in primary care funding in 2014-15 to almost £342 million and a further 1.8% increase in 2015-16 to more than £348 million. Those increases are higher than average, which reflects the historical underfunding in those areas against the primary care funding formula adopted by NHS England. I hope that is some reassurance to the hon. Gentleman that, in a general sense, increased funding is coming to his part of the country.

The hon. Gentleman will be aware that the Government have also provided £221 million in additional funding to the NHS to help cope with winter pressures this year so that patients get the treatment they deserve. Winter is a challenging time for all health care services, and it is right that we have put in place additional money for the NHS. The local health economy has received £4 million in additional funding, of which £1.2 million will be directly invested in Shrewsbury and Telford Hospital NHS Trust to staff all escalation areas.

The trust has also outsourced a proportion of day surgery to the Nuffield hospital to protect elective activity, should that be necessary at times of high demand during the winter. The remaining £2.8 million is being used to improve unscheduled care capacity and flow outside the hospital. An additional 69 beds have been sourced outside the trust, including intermediate care, care home and specialist dementia beds.

As the hon. Gentleman will be aware, the winter pressures money is being used to fund intermediate care beds and the focus on rapid discharge, not only in Telford and Wrekin, but nationally to some extent. That benefits not only the NHS, but local authorities, and it is part of the drive to achieve more integrated and joined-up health and social care.

If an old person can be promptly discharged home with the right care package, it is important that that happens; that is better for the person and the care they receive, but also better for the NHS’s financial settlement. To put it crudely, stuffing beds with patients does not make good financial sense, and it is not good for patients, who would much rather be at home in their communities. I am pleased that the money is going towards making that possible in the hon. Gentleman’s area.

[David Wright]

I absolutely agree with everything the Minister says—it is basic common sense. Although I am glad to hear him say it, and it is really positive, it would be helpful if he could address one concern, although I am not necessarily suggesting he will have an answer today.

I accept that we want to get people out of hospital and into their homes if possible to ensure they are cared for effectively. However, he must admit that the figures I highlighted, as well as the local authority’s concerns, suggest there has been a fairly significant reduction in the CHC pot. Given the scale of the local authority’s budget, compared with the health service’s budget, that reduction has an enormous knock-on effect on the local authority. I hope the Minister will take some time to look at that.

[Dr Poulter]

The hon. Gentleman is absolutely right to highlight the issue. The point I was coming on to is that although the region’s funding allocation from the Government through NHS England is going up, the CCG obviously has some local discretion over how that allocation is spent, and that goes to the heart of the matter.

As has been highlighted, continuing health care funding is the crux of this matter, and it is relevant to mention NHS continuing health care, which is a package of ongoing care arranged and funded solely by the NHS where the individual is found to have a primary health need. The NHS provides that throughout the country, and it is vital that it does.

There is sometimes quite a blurred line between where NHS funding and care end and where local authority responsibility starts. The issue is not whose budget is involved or which budget the money comes from, and that is part of the reason why the Government set up the £3.8 billion integrated care fund. This is about joining up budgets. The hon. Gentleman and I, the doctors and nurses on the ground, and the local authority are interested in the person, rather than who pays for treatment. The fund is a recognition of that, and we are setting it up to drive forward joined-up working.

However, we have to look at where we are now and why we have come to the place the hon. Gentleman highlighted. He will be aware that audits were carried out in 2009-10 and 2010-11 of the then PCT’s accounts. It was decided that the continuing health care funding was not being allocated properly, appropriately or even, potentially, legally.

At that point, the PCT was putting a lot of additional money into continuing health care, but a similar approach was not being taken elsewhere in the country. The auditors therefore rightly took the view that funding had to be allocated in accordance with the correct public rules for spending money, including NHS money, and that if money was, potentially, being allocated in an illegal way, that needed to be addressed under the rules at that time.

[David Wright]

rose—

[Dr Poulter]

I absolutely accept—the hon. Gentleman may wish to elaborate on this in his intervention—that, fundamentally, this is not about rules, but about making sure we have a better service for people. That is what we need to focus on.

[David Wright]

Yes, indeed, I do believe that. My concern is that the figures I highlighted suggest that, in comparison with similar and surrounding authorities, we are doing very badly per head of population in terms of the assessment process for qualification for continuing health care. That suggests to me that the pendulum has swung too far in the other direction and that the assessment procedure is being used to ensure that the figures are kept down.

I am concerned that some people with care needs in the community will lose out—as the Minister rightly said, this is not about structures and silos in the health service, but about individuals and their families in the community who are trying to cope.

[Dr Poulter]

The hon. Gentleman is right. In terms of the per capita spend in CCG allocations, Suffolk similarly has large towns with very rural surrounding areas, and the CCG in the hon. Gentleman’s area has a fairly similar allocation to the one I represent.

There is also an issue about how the money given to CCGs is spent. In a knee-jerk reaction, perhaps, to the auditors’ findings and the fact that the spend was not allocated appropriately, Telford and Wrekin went from being almost one of the highest spenders on continuing health care to being one of the lowest, and that is the crux of the problem. That is down to decisions by the CCG, or the PCT as it was, about how to allocate the budget given to it.

If, in 2009, 2010 and 2011, the PCT was picking up funding responsibilities that should perhaps have been the local authority’s, but then, in response to the audit, changed the amount it allocated to continuing health care, that could clearly have a destabilising effect on the local authority. However, the PCT and then the CCG have done everything they can to mitigate that, and they have given the local authority discretionary funding.

In particular, just over £3 million has gone to the local authority thanks to the fund set up by my right hon. Friend the Member for South Cambridgeshire (Mr Lansley) to facilitate exactly that kind of activity. At its own discretion, the CCG has also given the council £2.4 million on top of that, over and above what the council expected to receive. The CCG has therefore acknowledged and accepted that, in reacting to the auditors, there was perhaps an over-reaction, and it has now righted that by giving the local authority some discretionary additional funding.

That does not detract from the overriding point that, generally throughout the country, and particularly in Telford and Wrekin, we need to see increased emphasis on integration and joined-up care. It is in no one’s interests to have such discussions about funding, which waste a lot of time and effort on the part of the local authority and the CCG. If we can drive more joined-up working, more joint commissioning and more pooled budgets, where appropriate, as the Government will be doing through the Care Bill and the integration fund, the number of these turf wars will be reduced, because the emphasis will be on the patient, rather than the budgetary silo. That must be the right way forward.

I am sorry that, in this instance, the hon. Gentleman’s constituents and local authority have perhaps been caught up in errors made by the former PCT, although I am pleased the CCG is doing all it can to redress the balance by giving the local authority discretionary additional funding. I hope working relationships will improve and that, as we move forward, with further emphasis centrally on integrated health care and joined-up budgets, we will see greater improvements to the local health care economy and, more importantly, continuing improvements to patient care locally. If the hon. Gentleman wants to discuss the matter further or to meet me, I will be happy to do so.

11:30

Sitting suspended.

Financial Sustainability (Local Government)

Tuesday 7th January 2014 Westminster Hall

[Mr David Crausby in the Chair]

14:29

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

This debate is about sustainable local authority funding. It is my contention that it is neither sustainable nor local, and it certainly does not confer any authority. I will focus on our cities, not because I want to set up an argument between urban and rural areas, but because what is bad for our cities is bad for our urban areas. If our cities do not do well, rural areas will suffer.

Our cities do not reflect the national economy; they are the national economy. If our cities do not do well, the country will do not well. If we do not generate growth, the rest of the country will suffer, and one certainly does not generate growth by throttling one’s engine. Our cities are competing not with rural areas, but with other cities internationally. Cities are a complex system, even though Whitehall treats them as though they are only complicated. Jet engines are complicated; they are predictable and have predictable outcomes. Cities are complex; their outcomes cannot be predicted, and the players are not always rational. Above all, cities are systems that can come up with their own ideas and solutions to problems, if given permission to do so.

England is the most centralised country in the world—something that holds back our cities, stymies growth and productivity and produces poor value for our public services. Our cities were once great—Birmingham MPs will certainly be aware of that—but their power has continuously reduced since the 19th century and there has been a shift toward the centre. The most radical power shift probably came in the 1980s, when rate capping and financial penalties were introduced. Then, in 1986, the Greater London council and the six metropolitan counties covering England’s largest cities were abolished.

It is worth looking at the continent, where things are different.

“Every city outside the capital in Germany has GDP per capita above the national average, they are dragging the national average up. In Italy it’s six out of the eight, in France all are at or above the national average. We are the only country in Western Europe where, apart from Bristol, the level of the eight cities are some way below the national average and therefore are bringing down the national average of GDP per capita.”

14:32

Sitting suspended for a Division in the House.

14:39

On resuming—

[Ms Stuart]

Those were not my words—the comparison of England with France, Italy and Germany —but the words of the Minister of State, Cabinet Office, the right hon. Member for Tunbridge Wells (Greg Clark), who has responsibility for cities.

Previously, the Labour Government embraced devolution. We devolved power to Wales, Scotland and Northern Ireland, and we restored London’s city-wide government in 2000, led by a directly elected executive Mayor. England outside the capital, however, remains unfinished business. It is a shame that the Government imposed police and crime commissioners, but presented us with a rather botched referendum on directly elected mayors in some of our cities.

I regret that our major cities do not have directly elected mayors, because such leaders need the support of the whole electorate and not only a small cabal of their own councillors. They need authority. To be frank, the names of the leaders of the core cities ought to be rolling off the tongue in the same way as we can name Cabinet Ministers, but they do not. Running a city the size of Birmingham is probably a far more difficult task than many a Cabinet post, yet we do not give those leaders the political authority that they ought to have.

A small way to remedy the situation, citing the noble Lord Whitby of Harborne as a precedent, might be for retiring council leaders to join the House of Lords, giving some representation for local government. I am not sure that the Mayor of London would be terribly keen on a place in the House of Lords after he finishes his term, but it is worth a try.

My second contention is that local government funding is not actually local. To quote again from the cities Minister:

“At the root of the problem is a lack of local control over the cities’ own affairs and spending”.

When talking about taking up his post, he said that he had to do two things, the first of which was

“to persuade the Cabinet to accept the principle to have licensed exceptions to national policy”,

so that cities could come up with their own way of dealing with things. If I remember rightly, in questions to the Deputy Prime Minister today, a number of Members also suggested that the presumption about deviations from national strategy should be that they were allowed, rather than having to prove the case.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

I congratulate my hon. Friend on securing the debate and making such excellent points. In response to my recent debate on local government finance hold-backs, the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), who will respond to this debate, claimed to be freeing local authorities to stand on their own two feet. Does my hon. Friend agree that it is the height of hypocrisy to claim to be freeing up our great cities when actually the Government are taking key powers into Whitehall, such as on inward investment, housing, skills, economic development and European funding?

[Ms Stuart]

Indeed, and I shall make that case with regard to Birmingham. Presumably, a true liberal regards the freedom to fail as a freedom, and that is one of the freedoms that our cities have been given.

The cities Minister also said:

“The second thing is to liberate from the central government barons funding that can be better spent locally.”

I cannot improve on his observation. Quite a number of colleagues will agree, in different ways, that the current funding structure is not sustainable. If there were some great vision of how our cities can succeed, we could engage with that, but what is happening at the moment is that, to quote Sir Albert Bore, the leader of Birmingham city council:

“Politicians in Westminster are systematically dismantling services that maintain the very fabric of culture and community here.”

Birmingham’s total budget for 2013-14 was £3.4 billion. That sum has to cover a whole number of things that the council must do and a number of things that the council might do. The money comes from a variety of sources, and the structure of the system is virtually impossible to explain to our voters.

I am wary of quoting figures, for two reasons. One is that we throw the words “millions” and “billions” around as if the difference is a change of just one letter. I have always found it useful to remind myself that 1 million seconds is 11 and a half days, whereas 1 billion seconds is 31.7 years. There is a massive difference. The second reason is that whenever I think I have a handle on the cuts, things change. I turned on the television yesterday and found that the Chancellor was in the west midlands announcing another £25 billion of cuts. I am not entirely sure where they will come from.

The latest figure for Birmingham is that we need to find savings totalling just under £840 million between 2010 and 2018, including £120 million of cuts in the financial year 2014-15.

[Mr James Gray (North Wiltshire) (Con)]

The hon. Lady is making a powerful case for maintaining local government funding across the nation—not just in cities, but everywhere else—but I have one question. Those cuts are necessary because of the financial situation that the Government found themselves in three years ago. Would she prefer savings to come from local government or national Government, and, if the latter, in what areas?

[Ms Stuart]

That is a fair point, but as I will come to later, by the end of this Parliament local government will have taken 33% of the cuts, whereas Whitehall will have taken 12%. I will also suggest some ideas that would not be robbing Peter to pay Paul but would instead give greater liberty, in a managed way, to our cities to survive. At the moment, those areas in the greatest need are being cut most.

This might sound slightly boring, but let us look at the figures per dwelling. In Birmingham in 2014-15, using the Government’s preferred measure—that of spending power—we will lose £145.59 per dwelling, a cut of 5.3%. The national average is £71.58. Leafy Wokingham—Wokingham is not popular in my constituency because of the comparison, although one of my local councillors comes from there and takes slight umbrage that we keep quoting it—gets an increase in funding of £5.20, or 0.3%. In 2015-16 it will be even worse: Birmingham will lose 5.6% and Wokingham will have an increase of 3%. There is a whole list of shires and counties that are also getting an increase. At every turn, the combination of grant reduction and budget pressures widens to the point where—let us be clear on this—it is no longer a question of cutting services: some services simply will not be delivered.

[Lilian Greenwood (Nottingham South) (Lab)]

My hon. Friend is setting out an important case. Does she agree that the issue is not just the impact of cuts on local authority spending, but the cumulative impact when taken along with welfare reforms, which tend to hit our most deprived cities the hardest? That combination is having a detrimental impact on local economies.

[Ms Stuart]

Absolutely. I have a couple of specific questions for the Minister that will help me outline how we can minimise further cuts.

In answer to a question on 18 December, the Minister suggested that Birmingham should

“be more efficient with its back office, and look at how to use its reserves to invest for the future.”—[Official Report, 18 December 2013; Vol. 572, c. 750.]

I had a chat with people at Birmingham city council about how much it spends on its back office services. It has already made some cuts to them, and will go on to make some of the largest single cuts in 2014-15. However, even if Birmingham were to remove its back office services entirely, it could not meet the required cuts for 2014-15, let alone those for 2015-16.

That puts me in a rather unusual position, in that I am at one with the noble Lord Heseltine. When he addressed the 200th anniversary dinner of the Birmingham chamber of commerce in April 2013, he called for no less than a “peasants’ revolt”, and I agree that that is what is needed. His definition of a peasants’ revolt was a reallocation of power back to the people who created the wealth in this country in the first place.

For that, we require three elements. The first is more control over the money received from central Government and—this is an important point—a time scale that allows for proper planning. At the moment, cuts are being imposed so quickly that local authorities, whether in cities or rural areas, have not had the time to reflect properly on how best to reorganise. In some areas, we even find confusion over which duties are statutory, because some statutory functions have been farmed out—councils have found that when they cancel the contracts, they are in breach of their statutory duties. The second element is greater freedom over the money raised locally, and the third is the means to benefit financially from investments and savings made.

However, I do not believe that that will be sufficient. Something far more radical is required. Relying on council tax to raise revenue will help only affluent areas. Capping via referendum and the utterly out-of-date banding system mean that, for authorities that rely heavily on central Government grants, relying on council tax to raise revenue just makes the situation worse. We need a more radical idea. We could raise a local tax or look at a system of apportionment of locally raised VAT to replace the grant. At this stage, I am simply looking for the Minister to acknowledge that if he continues on the current trajectory, some of our cities will go to the wall. I do not say that to be dramatic; the statement is borne out if we look at the figures.

I also have a number of specific questions. First, on the better care fund, am I right to assume that, although NHS transfers across clinical commissioning groups, which start in 2015-16, will not overtly redistribute funds from rural to urban areas, they will end up doing so in practice, given the age profile of rural areas? The better care fund is not new money, but a kind of redistribution. In Birmingham, almost 46% of the population is under the age of 30, compared with 36.8% in England as a whole. In contrast, Birmingham’s over-65s represent 12.9% of the population, compared with 16.9% in England as a whole. If we focus on the older population, therefore, we will be disproportionately hit.

The second question is about education. Education funding was not part of the local government finance settlement, because it comes mainly through the ring-fenced dedicated schools grant. However, the current formula is historic, and a consultation is going on. When can we expect the result? Will it include a minimum funding guarantee that protects against losses at a per-pupil level? Next year will be a crunch year for our cities and local authorities. Unless they have some indication of how not just the known grants, but the ones that underpin them, will play out, they will not be able to plan.

That takes me to my final observation. The Local Government Association already says some councils are not viable. How many councils does the Minister think are in that category? Does he agree with the work done by the Mayor of London, which suggests we should hand tax-raising powers to England’s largest cities? Will he give English cities control of the revenues from all property taxes, such as stamp duty, council tax, land tax and business rates? One thing is for sure: they will manage those funds differently and, I would contend, better. Will he also lift the cap on local government capital borrowing? I am not for one moment saying that local authorities do not need renewing or that some of the funding structures do not need to be looked at. However, that needs to be done in a planned and sustainable way that allows authorities to respond positively.

Finally, I invite the Minister to come to Birmingham, because 2014 marks the 100th anniversary of the death of Joe Chamberlain—the man who introduced the concept of good governance into our cities. If we do sit down and talk together about some of these structures, I hope we can come up with a way of maintaining the strength of our cities, rather than marking the 100th anniversary of Joe Chamberlain’s death by killing our cities with 1,000 cuts.

[Several hon. Members]

rose—

[Mr David Crausby (in the Chair)]

Order. I intend to call the two Front Benchers at 3.55 pm, which will give them 10 minutes each to sum up. I think six people want to speak, and while I do not intend to impose a time limit, we should be able to get everyone in if Members keep their contributions to less than 10 minutes.

15:02

[John Pugh (Southport) (LD)]

I congratulate the hon. Member for Birmingham, Edgbaston (Ms Stuart) on calling this timely debate and on introducing it in a constructive fashion. However, I do not share her enthusiasm for elected mayors, so I must demur on that point.

Several people in the room have probably sat on both sides of the political fence that divides local government from central Government, so they will be familiar with the scenario many of us have had visited on us: we listen to a statement about the local government finance settlement and think, “That’s not so bad,” but when we talk to our borough treasurer, we find that the world has more or less fallen in. I am very familiar with that scenario because my first experience of Whitehall involved coming down to Richmond house to see the now Lord Boateng, who was a Minister at the time. I was castigated on behalf of Sefton council because he felt we had quite enough money to deal with our problems, while we felt the money he was giving us fell significantly short of what he should have given us.

That scenario is fairly familiar, and it is part of a very dishonest conversation that has taken place decade after decade between local authorities and central Government. It is a dishonest conversation about local resources, central resources and their effect on services. All Governments say that the funding settlement is fair and generous in the circumstances and that councils surely have sufficient funding to get by. If Ministers need a further defence, they will point to occasional—or perhaps less than occasional—instances of local authority inefficiency or profligacy. They will then point to some local authority—normally one from their own political party—that does things particularly well and set it up as an exemplar for all others to follow.

Local authorities, in turn, talk about savage reductions, service impairment and the new and sometimes unnecessary burdens that have been imposed on them, but not financed, by central Government. Characteristically, they will accuse the Government of deceitful sleights of hand, favouritism and formula rigging. I think Members will acknowledge—particularly those who have sat on both sides of the fence—that those involved put their side of the case in a very one-sided way.

The past few years have been no exception. It helps local authorities that are making their case to their local populations to blame the Government for the totality of their woes, whether those result from demographic factors or unaddressed issues from years gone by. Most local authorities worth their salt big up the cuts, blame all the financial pressures they face on central Government and try as far as possible to ignore their own failings.

Equally, central Government help themselves by confusing the grant regime, changing the names of the grant from year to year—from revenue support grant, to formula grant, to spending power or whatever—and presenting their case in the best possible way. The Minister and I have had many interesting discussions about whether to describe a local authority’s situation in terms of a fall in its spending power or a fall in its grant. I prefer the latter; he prefers the former.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

The hon. Gentleman talks about authorities bigging up the cuts, but, taking into account all the adjustments he has just spoken of, Sheffield will, by 2015-16, have seen a 50% reduction in funding since 2010. That is not bigging up the cuts; it is the absolute fact. Sheffield cannot go on with that level of cuts to its funding base.

[John Pugh]

I have no experience of Sheffield, but I have experience of my own local authority, and at times it rolls up many years’ cuts into one total figure, as if those cuts were imposed in one particular year. That is par for the course. Equally, central Government will find obvious scapegoats and point to the things such as assets and reserves—they are sometimes usable, but sometimes not—as though they can be regularly tapped.

Such things are all part of the toolkit or the argument, and most people are fairly familiar with them. The public tend not to pay a lot of attention to the debate, and they almost split the difference in many cases, because they are not certain who is telling the truth. They do get exercised when council tax goes up and certainly when services they are particularly enamoured of disappear, but, by and large, they are fairly agnostic on this issue, and they do not always know who should be blamed.

However, the game has now got deadly serious. What has been a familiar scenario over many years is now having a more severe effect. As the hon. Member for Birmingham, Edgbaston suggested, the sustainability of local services and, in some cases, local councils appears to be at stake—there is a fair case to be made in that respect. If we cut through what I described as the usual dishonest conversation, there are four absolutely indisputable facts.

First, in terms of deficit reduction, councils have been hit first—that is not particularly helpful, because they have to work within annual budgets and cannot make plans over two or three years—and they have been hit hardest, as has already been said. The second fact is that the reduction in central Government expenditure is considerable, and it may end up being something like £20 billion.

Thirdly, it is also an indisputable fact that the funding reduction for local authorities is proportionally greater in the poor areas and particularly the metropolitan districts. I take that as an unarguable fact, which we can all acknowledge around the room, although we may want to explain it in different ways. That fact is well documented, and it is what the Rowntree research, the Institute for Public Policy research, the National Audit Office and the Audit Commission report “Tough Times” all say. It is an indisputable fact.

Clearly, one element in it was the initial loss of area-based grants. We could argue that that happened because the previous Government were looking after the local authorities that were most of their persuasion. However, the fall in the less affluent areas, if I can put it like that, is in no way compensated for in its totality by city deals or regional growth funds. Those are often talked of as a compensating factor, but they must be looked at in terms of the general decline in regeneration funding in those areas as a whole. Taking the totality of the issues, I would be prepared to—although I will not—argue that case at length. There is nothing to suggest that things are otherwise; the proportionate reduction in poorer areas is greater.

It would be inappropriate for the Minister to respond, as often happens in parliamentary debates, by saying that none the less Birmingham gets so much per head, as opposed to some other area that he wants to nominate. I assume that we all buy into the assumption that grant support for local authorities must be based in some way on need. Therefore we would expect per capita spending in Liverpool, for example, to be greater than per capita spending in Surrey, and so on.

[Mr Gray]

Like the hon. Member for Birmingham, Edgbaston (Ms Stuart), the hon. Gentleman makes a powerful case for maintaining spending on local government. I disagree with his thesis that cuts are deeper in urban areas than rural areas, but let us leave that on one side for a moment. If I am right in guessing that the hon. Gentleman is saying that spending must be maintained at local government level, will he, a Liberal Democrat, tell us which central Government budgets he would like cut so that the local government settlement could be increased?

[John Pugh]

I am not necessarily making a case for increasing the local authority settlement. I am mainly making a fair case for different distribution, and for spreading it over more years, to enable local authorities to make the appropriate adjustments.

My fourth point, which has not been stressed in the debate so far, is that local authority spending is now significantly unbalanced. Because of the nature of the cuts, local authorities have had to concentrate on their statutory services, which primarily means social services. Most ordinary punters and electors do not ordinarily interact with social services. That is a democratic problem as well as a financial one. We have all heard of the graph of doom and the view that some local authorities will end up spending on nothing but social services. If that happens, neither electors nor the authorities will welcome it.

The hon. Member for Birmingham, Edgbaston is right about the situation. She did not say that it was not sustainable; she said that the trajectory we are on is not sustainable, and I agree. Various things could be done about it, and she suggested some. I shall not cover the same ground that she did. We can spread good practice and develop community budgets—the Select Committee did some work on that. We can talk about possible savings from the integration of health and social care, which would be good, or about possible benefits from the repatriation of rates, and accompanying incentives.

We can talk about things on a grand scale, as the Local Government Association is doing at the moment with the Rewiring Public Services campaign, which would also be good. All those ideas are ways forward, but they will not work at all unless we sensibly and intelligently—starting in this Chamber—stop the dishonest conversation and look at the facts for what they are. If we concentrate on formulae designed to present the Government’s or a local authority’s case polemically in a particular way, we will never get central and local government speaking the same language, or succeed in making local authorities sustainable as a result.

15:13

[Steve Rotheram (Liverpool, Walton) (Lab)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Crausby. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing today’s debate.

I was disappointed at the contempt with which the Minister dealt with my question to him in response to the statement on the local government finance settlement before Christmas. Liverpool’s settlement is so dire that I offered personally to fund two rail tickets for him and the Secretary of State, so they could visit my city and look at the books. If they truly believe that Liverpool has not done everything they say a responsible council should do to mitigate the cuts, surely the Minister should have bitten my hand off and accepted the offer. It is still open—to avoid confusion, I want to make it clear that it would not cost taxpayers a penny: I would fund it from my own pocket—so perhaps the Minister will respond.

The cuts to Liverpool’s funding are deadly serious. They deserve not light-heartedness or levity, but sombre deliberation and scrutiny. That is why I felt so strongly about the lack of an adequate response from the Minister in December. Far from being a good news story for local government, as he injudiciously claimed, his statement was a disaster for local government. He also argued that the cuts he announced were fair to all parts of the country. However, far from that being the case, they disproportionately hit core city regions—those least able to absorb their severity and those with lower levels of gross domestic product.

I want to concentrate on what that so-called good news day for local government meant for Liverpool. Unsurprisingly, but none the less shockingly, Liverpool city council was once again hit hardest. The latest cut of 5.5% will have a devastating impact on a city that is working tirelessly to pull itself up by its own economic bootstraps. Even the Prime Minister has recognised the work that Liverpool has done to cut out waste and restructure its services.

Indeed, despite the latest savage cuts, Liverpool’s entrepreneurial spirit is alive and kicking, and in a few months we will host the international festival for business on behalf of the UK. Hundreds of thousands of businessmen and women will once again be able to see our city and feel the warmth of our welcome. That will happen despite what the Government are doing to us, but our resilience is legendary. It is crucial to understand that Liverpool, like all the core cities, is asking not for handouts but for a fair local government settlement, so that when the Government wield their axe it will not be hit disproportionately.

[Mr Gray]

I have great sympathy when the hon. Gentleman speaks up for his wonderful city, but I feel uneasy about the way the debate is centred on how the cuts focus on poor areas and cities. Leafy, Conservative Wiltshire this year received 18.2% cuts; next year it will have 26.8% cuts; the year after that they will be 7%. We are going from a revenue support grant of £76 million down to one of £45 million. That is a great deal deeper than Liverpool’s.

[Steve Rotheram]

That is absolute nonsense. It is possible to pick individual statistics, but cumulatively the cuts and other Government policies have a disproportionate effect on my city. It is a greater effect than the hon. Gentleman could ever understand.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I do not know the source of the evidence cited by the hon. Member for North Wiltshire (Mr Gray), but I think the Audit Commission showed that one in 10 of the best-off areas suffer only a fraction of the cuts being suffered by the poorest 20% of areas in the country. Has my hon. Friend seen that evidence?

[Steve Rotheram]

I have, and I mean to refer to it later. I also have further evidence about how badly the Government have treated Liverpool. I understand what the hon. Member for Southport (John Pugh) said about years of dishonest argument, but that is not what we are talking about. At times that dishonest argument was about some authorities that thought they should get a greater increase than other authorities. We are now talking about savage cuts, not increases.

Not only is Liverpool’s cut the deepest; there are 38 other areas that will receive either a flat settlement or an increase in funding. How can that be fair? What happened to the Chancellor’s claim that he would not balance the budget on the backs of those in most need, or to the Government mantra that we are all in this together? Before some hon. Member intervenes with the inevitable argument that Liverpool will still receive above the national rate per capita, let me point out that the very fact that the city is struggling to meet its statutory requirements as a local authority gives credibility to the argument that further consideration of the funding formula is necessary to reflect socio-economic and multiple deprivation indices.

Perhaps the best description of the consequences for Liverpool of Ministers’ actions was from the shadow Health Secretary when he suggested:

“The Government do not understand, or they do not care, and they just rip up the fabric of an entire city. It is disgraceful.”—[Official Report, 18 December 2013; Vol. 572, c. 765.]

I could not have put it any better myself: it is managed decline, based on an inequitable formula that, at its core, is predicated on an ideological assault on the cities that no longer offer the Tories or Lib Dems any form of electoral support. It is not fair and it is not good news for local government.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I wish, in a way, that the debate had followed the lines laid out by the hon. Member for Birmingham, Edgbaston (Ms Stuart) in an admirably even-handed and non-partisan way. Is it not true, as a matter of historical fact, that under the previous Government, heat maps were generated that specifically tied public funding to areas of actual and potential Labour support? That has been in the newspapers. We know that it is a well established fact, which has been well attested from other grounds. Should the hon. Gentleman not be properly recognising that in his remarks?

[Steve Rotheram]

Deprivation has always been recognised on heat maps and areas of the country are well known in that regard. I do not accept the premise of the hon. Gentleman’s question. If he is saying that money in the formula was given to those areas of greatest need, and that showed up on a heat map, yes, that is true, and quite rightly so—it should have been.

Some might argue that it is simply coincidental that Labour-controlled Liverpool, Labour-controlled Manchester, Labour-controlled Birmingham, Labour-controlled Sheffield, Labour-controlled Newcastle and so on are the hardest-hit councils, with, in some cases, cuts to their budgets of more than 50% over the life of this Parliament, while councils that benefit most are well-off, Tory-controlled authorities. Some might suggest that that is just a coincidence, but I do not buy that. The formula was designed to do exactly that.

[Jesse Norman]

Let me put on the record that the heat maps are not reflective of imbalances in deprivation funding at all. Let us take an example that is completely open and known to everyone, which is the scandal of the private finance initiative, in which 106 new hospitals were built at enormous cost. The vast preponderance of them were built around a model of funding that was for very large outpatient hospitals in major cities, and it was deliberately targeted on those cities. The result has been, at a time when health care has been moving to a much more localised, technology-enabled solution, a disaster for health care. We will find that these great hospitals, including the new one being built in Liverpool, struggle as a result.

[Mr David Crausby (in the Chair)]

Order. Interventions should be kept short.

[Steve Rotheram]

It absolutely beggars belief that individual Members of Parliament do not understand that every area is different. Areas that had infrastructure from Victorian times, hospitals that were literally falling apart and schools that leaked, needed intervention at that time—not in 15 or 20 years, when the country might well have been able to afford it. Intervention was needed.

I am no great fan of PFI, by the way, but according to the latest figures the Chancellor is signing off as many PFI contracts, worth as much, as the previous Labour Government did. Members really cannot have it both ways—be anti-PFI while not even standing up to their own Chancellor, who is signing off these huge contracts, including the one for Liverpool.

My right hon. Friend the Member for Leeds Central (Hilary Benn) said:

“Tough times do indeed require tough decisions”—

nobody would argue against that—

“but this Government, as they have shown time and again, from the bedroom tax to the top rate of tax and local government funding, take most from those who have least. That is unfair and unjust.”—[Official Report, 18 December 2013; Vol. 572, c. 746.]

A cumulative 52% cut to Liverpool city council will mean not only that it has to make staff redundant, which means even more human misery and an even higher benefit bill, but, as I have said, that it may not even be able to fulfil the requirement to deliver statutory services to the level that it has to date. In other words, keeping our libraries open will be virtually impossible. Services for the young and old will be decimated. Children’s centres will be affected. Street lights and roads will not be repaired at the same rate, and the legacy of our year as European capital of culture will be damaged, possibly beyond repair.

Perhaps the most devastating aspect of the whole debate is the fact that decisions continue to be made, by a Minister and his boss in a cold and calculated manner, that I know will detrimentally affect Liverpool’s history, heritage and traditions and adversely affect every man, woman and child in our city.

[Several hon. Members]

rose—

[Mr David Crausby (in the Chair)]

The number of Members standing to speak seems to keep increasing, so Members will have to keep their contributions shorter if we are to accommodate them all. I call Jesse Norman.

15:24

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Thank you, Mr Crausby. I am grateful to you and to the hon. Member for Birmingham, Edgbaston for calling this important debate.

I absolutely applaud the measures that the Government have taken over the past couple of years, not merely to bring the national economic crisis under some kind of financial control, but to make specific improvements to local government in the hope of making it more relevant, more accountable and more autonomous. The hon. Lady made the very good point that local government was glorious in the 19th century, and one reason for that was how autonomous it was. It is very important that we restore proper dignity to town halls, and I think the Government are doing that.

It is remarkable that the Government have been able to do that in the extremely difficult financial conditions in which we find ourselves. It is extraordinarily hard to change embedded funding decisions and disparities that have been left over from times past. In my county of Herefordshire—although we are talking about cities and the wider impact, I hope that we can strike a rural note, as the hon. Lady acknowledges the differences between them and the effects that each can have on the other—levels of funding have always been extremely low. The culture is one of making do and mending. To take one example, it was a minor miracle when we moved from having the third worst-funded schools in the country to the fourth worst-funded schools in the country, in the past year or two. I hope that we will continue to motor rapidly up the tables thereafter.

Above all, the issue is not only about local government, but about the totality of public services, because, as I think all Members would recognise, the services interlink with each other and the cumulative and interrelated effect of them makes all the difference. I am perhaps somewhat unusual in that I commissioned an independent study of underfunding in Herefordshire in 2010, which concluded, based on a comparison with other authorities, that it had been underfunded to the tune of £174 million over the previous five years—the period from 2005 to 2010. That is £35 million a year or roughly 10% of local government spending.

Those totals broke down across the public services as: police, £11 million a year; fire, £4 million a year; schools, £30 million a year; and health, £44 million a year. Each of those sums, in turn, was dwarfed by the underfunding of local government, which was £85 million over that period, or £17 million a year.

It is important to put that in perspective. It is not only about underfunding in some of the leafy suburbs to which people like to refer, because there are areas of deprivation in Herefordshire. It is not a rich place; it is a county in which the average earnings are significantly below the averages for the west midlands and for England as a whole. It is well known to those who have studied the issue that public services are harder, not easier to deliver, and more expensive, not cheaper to deliver, in rural areas than in cities, whether that involves filling potholes or the number of women whom a midwife can see in a given year.

[Steve McCabe]

I want to see whether I understand the essence of the hon. Gentleman’s point. Is he arguing that his area is underfunded, as a number of us would think of our areas, and therefore that central Government need to do something to relieve that underfunding? Alternatively, is he arguing that money should be taken off other areas and given to his area to address what he perceives as the underfunding problem in his area alone?

[Jesse Norman]

I am arguing that the situation in Herefordshire is the result of well over a decade—possibly two decades—of underfunding and that therefore, although every area has been hit badly because that is the nature of the tough times we are in, the case for treating with care and attention areas that have suffered from that inherited imbalance of underfunding is clear.

Let me give an example. In many parts of the country, local councils have reserves—indeed, large amounts of reserves that they have stored up over many years against a rainy day. That is not true in Herefordshire. Herefordshire council is only 10 or 15 years old. It does not have large inherited reserves. All the reserves it has are spoken for, more or less, and therefore it is not in the position that some cities are in of being able to draw on inherited reserves.

[Ms Gisela Stuart]

Will the hon. Gentleman give way?

[Jesse Norman]

I am winding up my speech, but I defer to the hon. Lady so much that I am happy to take her intervention.

[Ms Stuart]

I am exceptionally grateful. The hon. Gentleman mentioned that Herefordshire is a relatively young county. Is not that the problem? When there was a split between Herefordshire and Worcestershire, there was always a debate about whether they were big enough to be sustainable local authorities. Do not some of the problems in his area relate to the question whether the size and configuration of local authorities is optimal?

[Jesse Norman]

Of course, that point would be much stronger if it were ever true that Herefordshire had received anything like a fair level of funding relative to its comparators. Unlike, I think, most other hon. Members, I have the facts and the evidence in my hands and on my iPad if anyone would like to check them, so we can be quite precise about it.

My final point has to do with reserves. Herefordshire does not have huge reserves. It has virtually no reserves and an embedded underfunding over at least two decades. In that context, the Government’s efforts to level the playing field, if that is what they are, are to be welcomed, because that is doing a difficult thing in unusually difficult circumstances. I am grateful to the Minister and his colleagues and hope that they will continue to look closely at this issue and at the disparities between different authorities as reflected in their reserves.

15:31

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I, too, congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing this important debate. She is a tireless campaigner for the people of Birmingham and, like me and many of my colleagues on the Opposition Benches, is simply unwilling to let the issue of unfair cuts to local government go.

Indeed, I have lost count—I am sure that the Minister has too—of the number of times I have raised with him and other Ministers the impact of disproportionate cuts on cities such as Newcastle, yet he continues to bury his head in the sand about the scale of the consequences of the decisions that the Government are taking. I therefore look forward to hearing his response and seeing whether he will acknowledge the impact of those decisions on communities and services in cities such as Newcastle. However, given the provisional local government finance settlement that was confirmed to the House on 18 December, I am not holding my breath.

The United States celebrates groundhog day on 2 February, but I think mine might be occurring at the beginning of this month, because on 8 January last year, I introduced an Adjournment debate on the effect of funding cuts on Newcastle city council, during which I was complacently told by the Minister:

“Predictably, the doom mongers have been consulting their Mayan calendars and issuing dire warnings about the end of the world as we know it and a billion pound black hole in local budgets. Concerns that the poorest councils or those in the north will suffer disproportionately are well wide of the mark”.—[Official Report, 8 January 2013; Vol. 556, c. 293.]

What is the reality facing cities such as Newcastle? In the debate last year, I outlined how in 2012 Newcastle city council had started to consult on a three-year budget for the period from 2013-14 to 2015-16 in the light of the unprecedented funding challenges it faced. When it began the consultation process, it believed it was looking at a funding shortfall of £90 million over three years as a result of disproportionate central Government funding cuts and rising cost pressures, such as inflation, energy prices and the costs of providing services to an ever-ageing population. That figure rose during the consultation process to £100 million, following further cuts announced in the 2012 autumn statement and the local government finance settlement. However, following the 2013 spending round and provisional local government finance settlement announced in December 2013, Newcastle city council now believes it faces a funding gap of £108 million over the same period.

I have no doubt that the Minister will again seek to dismiss concerns about the scale of the cuts faced by cities such as Newcastle by reminding us, again, of the “spending power” that Newcastle has at its disposal—it is groundhog day, after all—but I suggest, as other hon. Members and I have suggested on several occasions, including today, that that measure is absolutely meaningless if it is used simplistically to compare total spending power without taking into consideration the completely different spending pressures facing cities such as Newcastle and those facing other parts of the country with totally different needs and challenges to support.

The Minister repeatedly fails to mention the scale and the speed of the change in spending power that is proposed for the next two years. Newcastle may have a higher total spending power than certain parts of the country, but it faces a cut in that spending power of £232 per dwelling over the next two years. In sharp contrast, Wokingham, which my hon. Friend the Member for Birmingham, Edgbaston also referred to—I appreciate the concerns of the friend to whom she referred—and which the Minister often likes to cite, will see its spending power rise by £60 per dwelling, and Windsor and Maidenhead’s will rise by £32 per dwelling. Therefore, although the spending power of cities such as Newcastle is being significantly cut, the spending power of some of the wealthiest and least deprived areas of the country is not only being protected but increased under this Government. The straight fact is that the additional spending power of cities such as Newcastle has not originated from some unfair funding decision of the past, but reflects very real differences in spending pressures and, in particular, differences in the requirement for statutory services.

Newcastle, as an urban and relatively deprived city, faces significantly greater spending pressures than the two councils that the Minister frequently chooses to compare it with. However, as Newcastle city council officers have pointed out:

“The reduction in spending power of areas with higher needs and lower resources and the increase in spending power in the wealthiest areas is a trend that will continue each year if the Government continues to operate the grant system as is currently proposed. It will not just close the funding difference between these areas but in time will potentially reverse it...This effect is happening because the Government’s funding system now focusses on self-sufficiency and providing incentives for areas where economies grow as opposed to applying the core principles of providing sufficient funding to reflect the different needs to provide statutory services across the country and to compensate for very different abilities to raise money locally from a standard council tax. These were the core principles introduced…in 1993/94 by the Conservative Government at that time. The principles were aimed at ensuring that residents anywhere in England could receive a standard level of service to meet their needs with a similar council tax charge for similar bands of property. Now that this no longer holds true the provision of statutory services can and will only be achieved by councils in poorer areas with higher services demands by charging a higher Band D council tax than wealthier areas of the country. As the Government is effectively restricting increases in council tax this will in effect mean that similar levels of service (including statutory services) can no longer be provided in poorer areas of the country or those areas with higher calls on statutory services.”

Crucially, the officers say:

“It is unclear whether Ministers...fully understand the implications of the new funding system that they have introduced.”

With regard to the title of today’s debate, the key concern is the cumulative impact of higher percentage cuts and higher cash cuts in spending power per dwelling. Far from Opposition Members bigging up the cuts, those cuts will place much greater pressure on the financial sustainability of councils sooner than would be the case if they were proportionate. The Minister may decide to use his response to the debate to continue to bury his head in the sand on this critical issue. Perhaps he thinks that if he sticks his fingers in his ears and sings loudly enough, we will all just go away, but it is not just Opposition Members and Labour-run councils that fear that, although they are clearly the ones worst affected by the Government’s decisions. Ahead of the autumn statement, the Conservative chairman of the Local Government Association, Sir Merrick Cockell, commented:

“The next two years are make or break for many councils and the Chancellor has it in his power to either deliver a stable environment in which they can plan for the unprecedented challenges ahead, or he can deliver uncertainty and risk which will put even more stress on vital local services and push councils toward failure…This Government is testing the resilience of councils to breaking point and in many areas the cracks are starting to show. 2015/16 is shaping up as the crunch year and we expect some councils to be placed in a position where they do not have the money…to meet their statutory obligations.”

That is a truly damning statement, and if it comes to fruition, it will be residents of constituencies such as mine, in Newcastle North, who will pay the price.

15:39

[Robert Neill (Bromley and Chislehurst) (Con)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I am slightly disappointed at the outcome of the debate, although I congratulate the hon. Member for Birmingham, Edgbaston (Ms Stuart) on the thoughtful way in which she introduced it. The subject of the debate deserves a little better than some of the contributions that have been made. I agree with the hon. Member for Southport (John Pugh) that we must use the debate as an opportunity to think about the sustainability of local government finance in the longer term.

Some of the matters that have been raised relate, I suggest, to symptoms rather than disease. The hon. Member for Birmingham, Edgbaston hinted at the real problem with financial sustainability in local government, which is that the state in this country is highly centralised. That needs to change. I gently say that that is not the construct of any one party; it has happened over about 50 years. In fairness, it must be said that this Government have taken important steps to seek to reverse that.

I agree with my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) that Ministers should be congratulated on the devolutionary steps they have taken at the same time as having to make significant spending reductions to meet the economic crisis we inherited. We cannot have sustainable financing for local government, which accounts for some 25% of the spend on public services, without a sustainable economy for the public finances as a whole. I do not accept lectures from Opposition Members who suggest that we should exempt local government from the necessary spending reductions.

In the longer term, we need to tackle the real problem, namely that local government has historically been too dependent on central Government grant for its finance. The Government have taken important steps to address that, but the degree of the problem is highlighted by the London Finance Commission. I represent a suburban London seat, which falls somewhere between the two poles when it comes to the matters that are being discussed. The LFC report, which the Mayor of London commissioned and endorsed, points out that some 7% of all the tax paid by London residents and businesses is retained locally, as opposed to, say, New York, where the picture is some 50%.

I am not saying that it is realistic to change those figures overnight, because we come from different constitutional and historical traditions, but we can move in that direction. In that regard, the Minister and the Government—I might have a slight interest in this—are to be commended for providing other financial levers to local authorities beyond pure dependency on central Government grant or council tax. The new homes bonus was an important additional income stream from central Government.

[Mr Clive Betts (Sheffield South East) (Lab)]

Recycled money.

[Robert Neill]

The hon. Gentleman rather misses the point. During the whole time that the Labour party was in government, it made no such devolutionary steps in local government finance. It ill behoves the Labour party to criticise the steps that the Government have taken against a background of financial stringency.

Secondly, the retention of business rates, particularly if we follow it through in due course and increase the local share, has a real opportunity to reduce dependency on central Government grant. Currently, for understandable reasons such as deficit reduction, the local share has to be constrained. The primary legislation is drafted in such a way as to permit the local share to increase as the economy grows. I hope that happens, and I think hon. Members would do better in the longer term at finding financial sustainability for local government if they were to support that growth on a cross-party basis rather than seek to make short-term points about the funding of individual local authorities.

[John Cryer (Leyton and Wanstead) (Lab)]

To some extent, the hon. Gentleman makes a fair point about the long term. The problem is that we are dealing with the situation we are in, which is that local government is dependent on grant from central Government. Waltham Forest council, which covers most of my constituency, has already faced extensive cuts and will probably face further cuts in grant from central Government of some 8% over the next two years. That reaches the stage, as Sir Merrick Cockell has said, where it is unsustainable and cracks start to appear. My local authority has wrought miracles in delivering services in difficult circumstances, but I am not sure that that can continue.

[Robert Neill]

With every respect to the hon. Gentleman—I know he thinks about such matters carefully—the problem with his analysis is that simply shovelling more money into the system that cannot be paid for in a sustainable way is not, I regret to say, the answer. A much more radical approach is needed to the way in which we deliver services, which good councils of all political persuasions are willing to undertake. We should move away from the high levels of dependency that local government in this country has on central Government bail-out.

There are things we could do. I hope we will not only increase the local share of the retained business rate and therefore reduce dependency on central Government grant, but work with the Local Government Association to deliver a genuinely sustainable market in municipal bonds, which holds real opportunities, particularly for big cities.

I hope we can extend the period of the funding settlements for local authorities. It is worth recognising, as the LGA recognises, that in the autumn statement this year we set out that local public services will get the same long-term indicative statements as central Government, which will provide more certainty. That is an important and valuable step forward, on which I congratulate the Minister. We might, in due course, roll that out to five-year settlements for local government, which will provide a sensible approach to long-term planning.

There are things that can be done, but it is not enough simply to talk about a system and to have a needs-versus-resources argument that does not recognise efficiency. We can do more in the system to recognise efficiencies and past efficiencies. Although the cities are a pressure point, it struck me when I was a Minister that we should not forget that there are financial pressures on rural authorities as well. One thing that concerned me when I first came into office at the Department for Communities and Local Government was that the then formula grant system did not recognise the cost of rural services or the particular pressures that give rise to rural deprivation. I congratulate the Minister and the Government on taking important steps to recognise that. There are positive, long-term things that we can do, and I hope the Minister will reflect on what we can build on in a constructive way.

15:46

[Mr Clive Betts (Sheffield South East) (Lab)]

I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing the debate. Reference has been made to the Local Government Authority’s position. It is a good idea to take notice of those who, day to day, have to deal with the problems we are discussing and make decisions in local government. Sir Merrick Cockell, the Conservative leader of the LGA, which has a Conservative majority, has said clearly that the position of local Government finance is not sustainable. I happen to agree with him, and there is cross-party agreement in the LGA. That comes about because, as my hon. Friend has said, local government has been asked to make twice the level of cuts demanded of central Government Departments. Local government services are more important than that, and the extent to which local government services have been singled out for disproportionate cuts is unacceptable.

We can argue about which authorities have had the worst deal, and I certainly argue that those with the greatest needs and traditionally the highest level of grants have had the biggest cuts in their grant. That is not questionable—the figures are there to back it up. Local government generally has a good record on efficiency savings. It has coped with the cuts so far quite well, but we have already seen across the country cuts to community services such as libraries and changes to eligibility criteria for adult social care that are affecting communities and individuals in local authorities of all political persuasions.

We cannot continue on that basis, because it is not sustainable. Cuts that are made one year cannot be simply repeated and enhanced the following year. Every year it becomes more difficult because there is less room for manoeuvre and a lower percentage of discretionary spend that can be cut. That is not a steady state, because more pressure is being put on spending for adult social care all the time. The graph of doom that the hon. Member for Southport (John Pugh) referred to is already there. As cuts are made in spending availability and extra demands are made on adult social care, the amount left for other local government services is squeezed until it becomes non-existent. Adult social care and care for looked-after children ultimately benefit a minority of people, important though those services are, and the rest of the population do not know what they get from local councils because virtually nothing is left. That undermines local democracy, which is very worrying.

The hon. Member for Bromley and Chislehurst (Robert Neill) is absolutely right that we have to look towards the longer term. The Government have done some good things, such as abolishing ring-fencing, moving a little on business rates—I would like to see more—and introducing city deals. The most significant thing they have done, however, is to undermine the basis of local government finance in this country to such an extent that a future Government simply will not be able to come back and build on what was there before.

There has to be a fundamental and radical change. There was a good contribution to the debate from the LGA with the “Rewiring Public Services” document. There was a good contribution from the London Finance Commission. The Communities and Local Government Committee is to conduct an inquiry into local and inter-city financing and how city governance affects other parts of the country. Important elements have been raised for discussion, and I hope we can take that debate forward.

In the meantime, what will the Minister do when a local authority gets into real difficulties? The National Audit Office has been highly critical that the Government have not done an impact assessment on the cumulative impact of cuts to local councils. The LGA has said that 56 councils will spend 15% above their income by 2015-16. What happens if one of those councils gets into serious financial difficulties? Would the Government insist on a council having a referendum if it needed to raise council tax by 20% to make ends meet and to deliver its statutory service? Will the public vote for an increase in a referendum if they know that the Government have section 31 powers—civil servants and Ministers revealed them to the Committee—to step in at any point and give councils extra grant to stop them from going bust? Where do we stand when an authority gets into serious difficulty, whether that authority is Conservative, Labour or Lib Dem, rural or urban, a city authority or a district council? What action will the Government take if a council gets into difficulty, which seems to me to be almost inevitable?

[Angela Smith]

rose—

[Mr David Crausby (in the Chair)]

Order. I plan to call the first Front-Bench spokesman at 3.55 pm, so, with four minutes to go, I call Angela Smith.

15:51

[Angela Smith (Penistone and Stocksbridge) (Lab)]

I will do my best, Mr Crausby. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on her excellent speech, which had depth and context. The only thing I can add on the history of local government is its contribution in cities such as Sheffield and Birmingham to our housing, our schools, our leisure facilities and our libraries. The green legacy, particularly in Sheffield, bears a heavy debt to the history of local government in the area. She succinctly outlined the declining powers of local government over many decades, which was echoed by the hon. Member for Bromley and Chislehurst (Robert Neill).

The case for cities as economic motors was powerfully made by my hon. Friend the Member for Birmingham, Edgbaston. I want to compare Sheffield with Pittsburgh in the USA—she made comparisons with Europe, but comparisons can occasionally be made with the USA. Pittsburgh is Sheffield’s sister city and suffered the same decline in its industrial base, but it is now motoring ahead. Why? It is because Pittsburgh had the powers available to rebuild itself. It has focused on life sciences and hydraulic fracturing—fracking to most of us—and has rebuilt its economic base very successfully. It has managed to tap in to resources made available by the federal Government, but beyond that it has tapped into local resources and rebuilt itself. It stands as a shining example of what can be done when a city is given control of its destiny. It is not just Europe we can look to for comparisons of what can be done; sometimes, the US can teach us lessons.

By comparison, Sheffield will, over the lifetime of this Parliament, suffer a 50% reduction in its grant. Barnsley, the other borough I represent, will suffer a 41% cut over the same period. The contrast between what is happening in some of the great cities of the world and what is happening in the UK could not be greater. People living in Sheffield and south Yorkshire more generally feel emotional and strongly about the loss of their industrial base. Something has to be done to rebuild the economy of south Yorkshire. Even the boroughs of Barnsley, Rotherham and Doncaster would acknowledge that Sheffield has to be at the heart of that regeneration.

The myth about the rural and the urban needs to be scotched. Some 70% of south Yorkshire is rural, but it is within a metropolitan area. It has suffered declines greater than Herefordshire, Worcestershire and other areas in the country. I do not want to pitch south Yorkshire against other parts of the country, but south Yorkshire and areas like it helped to build the UK’s industrial base, and they have the capacity to do that again. The role of local government in that is critical. Local government as we know it is broken for ever. The model has gone. Devolution has to be at the heart of the solution for countries and regions such as ours. For Birmingham, for south Yorkshire, for Greater Manchester, for Newcastle and for the north-east, we have to have devolution and a different model for delivering local government in future.

15:54

[Andy Sawford (Corby) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Crausby. I congratulate my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) on securing this very important debate and on how she has spoken up for her constituency and her city and made a wider and powerful case on the importance of our cities to the UK economy. Cities have helped to shape local government as we know it.

As my hon. Friend has said, urbanisation and industrialisation in the 19th century created the impetus in cities for the growth of local democracy, whether that was guilds of merchants and craftsmen coming together; the turnpike trusts and the improvement commissions; or the local Acts of Parliament, such as in Newcastle, to ensure that houses had privies attached to them, or those in the west midlands, where councils came together to promote an end to animal cruelty, or those of many local authorities who sought public health measures to tackle diseases such as cholera and tuberculosis. There was also the invention and confidence of municipalism in Birmingham, symbolised by Joseph Chamberlain—he was mentioned by my hon. Friend—who municipalised the gas works and the water supply. London blazed the trail for the national health service. Some 40,000 of the 55,000 hospital beds in the city were run by the county council.

Today, the challenge is even greater for our big cities. They must lead the renewal of local government, not only for local citizens who rely on their local services, but also, as my hon. Friend rightly said, for our national economy. They must do that in spite of Government policies that have hit our cities hardest of all. Birmingham council’s leader, Sir Albert Bore, said that

“these cuts will mean the end of local government as we know it”.

My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) spoke powerfully about how his council has already worked incredibly hard to reform local public services and to make efficiencies. We know that local government, despite receiving the biggest cuts of any part of the public sector, is viewed by the Government as the most efficient part of it. The Prime Minister has said that.

The core funding reductions in local government are an average real terms cut of 33%, and the figures announced in the 2013 spending round envisage a further 10% cut in the local government resource budget, but I believe that it goes further than that. The key issue is the unfairness of the distribution of those cuts. By 2014-15, the 10 most deprived local authorities in England will have lost six times more than the 10 least deprived local authorities, compared with 2010-11.

While Birmingham, Newcastle and other cities will lose most, the Prime Minister’s local authority—West Oxfordshire council, which is one of the wealthiest—is seeing its spending power increase. My hon. Friend the Member for Birmingham, Edgbaston contrasted the cuts to her local authority, as did other hon. Members, with the increases in Wokingham, Hampshire, Surrey and Windsor and Maidenhead. Where is the fairness in a policy that takes most from those with least to give to those with most and a policy that takes from the have-nots to give to the haves? The council cuts are brought to us by the Government who gave millionaires a tax cut while imposing the bedroom tax on the poorest.

We know that the policy is deliberate. The former local government Minister, the hon. Member for Bromley and Chislehurst (Robert Neill), whom we have heard from, is on record as saying that. Both the Audit Commission and the Joseph Rowntree Foundation have said that councils in the north have been hit harder than those in the wealthier south-east. Can the Minister explain why that is right?

The National Audit Office has warned that cuts are having a direct impact on front-line services—we know that from our own areas—and that many councils are at risk of being unable to balance their books in future, with potentially disastrous consequences, not only for the delivery of those discretionary services, but for the delivery of those statutory services that our constituents rely on. The Public Accounts Committee report on the financial sustainability of local authorities found that there had not been a proper analysis of the impact of the cuts. The Committee highlighted the unfairness of the cuts for different areas of the country and raised serious concerns that some councils will simply not be viable.

As my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) has said, it is not just the scale of the cuts but the pace of them that is having such a significant impact on our areas. The Chair of the Committee has said:

“Central government is cutting funding to local authorities by more than a quarter over four years but does not properly understand what the overall impact will be on local services.”

For instance, the Department for Education has failed to provide a proper cost analysis of how funding reductions will affect children’s services. As my hon. Friend the Member for Liverpool, Walton has said, the cumulative impact of cuts in other departmental budgets on local authority public services is affecting our cities most. Nor is enough work being carried out across Departments to determine how funding reductions in one area of spending might affect services in another—for example, how cuts in local authority adult social care are leading to bed blocking in hospitals, as they are in my area.

The Public Accounts Committee says that the Government do not understand the impact of their cuts on vulnerable groups. We know that, and it is reflected in other policy areas across government, not least welfare reform. We want to know what actions the Government would take in the event of the financial failure of multiple local authorities. As my hon. Friend the Member for Sheffield South East (Mr Betts) said—he is the Chair of the Select Committee on Communities and Local Government, and I hope the Minister will listen to him—we must hear from the Government what action they will take if councils cannot balance the books.

The hon. Member for Bromley and Chislehurst told us that the shifting of funding is aimed at reducing dependence, but the truth is that often the areas with the highest demand for services have the least capacity to raise income through business rates or council tax, as I am sure he knows. Although some of the changes to business rates can be built on and are to be welcomed, on the issue of fairness, he is not right. It has compounded the problem for some of the toughest areas of our country with greatest need.

In the Government’s spin operation following the provisional finance settlement, they said that there would be no more cuts to local government. I was astounded to read august publications such as the Local Government Chronicle reporting “No more cuts to local government”, when we know that next year, the year after that and—to listen to the Chancellor yesterday—in the five years that follow, if the Conservatives are in power, there will be substantial further cuts to local authorities. The Chancellor has said that 10% will be cut in the next two years, but I ask the Minister to take this opportunity to correct the record. The Local Government Association, a cross-party organisation, is clear that without including NHS support for social care, which is not available for all councils, the reduction over the next two years will be 15.9%.

The Minister and I are having our own groundhog day; we were here a few weeks ago debating holdbacks. I welcome the Government’s U-turn on holdbacks, particularly the decision to return some of the money held back as part of the new homes bonus, which was the subject of a debate led by my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah), who was here earlier. The second U-turn that we heard about was to adopt Labour’s policy to act on business rates, which have increased for small and medium-sized businesses by £2,000 under this Government. However, we would go further, freezing and then cutting business rates for 1.5 million small and medium-sized businesses. If the Minister were to confirm that the Government are willing to take that U-turn, I am sure it would be welcomed around the country.

My generosity to the Minister does not extend to the fairy tale that we are likely to hear about council tax and the notion that it will again be frozen. When will we hear the details of the council tax freeze grant for 2014-15? What is his response to the recent report in The Daily Telegraph that at least 42 councils, more than half of which are Conservative-led, plan to reject the Government’s additional funding and raise council tax this year? The leader of Conservative-led North Yorkshire said that

“settling for the additional funding for another year could place the council’s finances in a perilous position.”

The next Labour Government will not be able to turn back the clock, but we can offer hope to local authorities and local government around the country that we understand the depth of the financial challenge that councils face and are committed to finding a way forward. We will start by putting fairness back at the heart of the relationship between central and local government. We will acknowledge the difficulties that councils face, not try to sweep them under the carpet. We will respect decisions made by councils at local level about how to use resources, not criticise and carp from Whitehall, as the Secretary of State does about everything from the level of reserves to bin collections.

The next Labour Government will, of course, want councils to meet communities’ needs, but our approach will be one of partnership. It is crucial that we support councils to deliver economic growth in all areas of the country with fairness. We will consider the report of the London Finance Commission and some of its proposals, and the LGA document “Rewiring Public Services”. We want to devolve power over housing and planning, and jobs and skills. Councils will have to come together to decide how best to use those powers, not just in our cities but across England, as part of what my right hon. Friend the Member for Leeds Central (Hilary Benn) calls the English deal. We will take the process of devolving power from Whitehall further, through Labour’s “Total Place” programme, which has sadly stalled under this Government, but whose pilots in places such as Greater Manchester show that there is much potential.

The local government innovation taskforce, set up by the Leader of the Opposition, makes it clear that Labour in local government is already innovating in responding to the challenges faced by our communities. As my hon. Friend the Member for Liverpool, Walton said, our councils are doing a great deal already, even in these difficult circumstances. That taskforce will press for a growing role and greater freedom for local government. Labour’s localism will be an ambitious programme requiring Whitehall and local government to work together as we transfer much more power and responsibility to local councils. In that way, although resources will be tight, councils will have a better chance to find a sustainable and fair way forward for their communities.

16:04

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

One would be forgiven for believing that there was some golden inheritance for local government when this Government came in. Many council leaders across the political divide would struggle to recognise the description given by the shadow Minister. Having been a council leader under the last Government, I find the idea of the Labour party favouring anything involving flexibility or partnership with local government, as opposed to top-down central control through one mechanism or another, almost laughable.

We should put this debate in context. We still have not heard anything from the Labour party about the £52 billion in cuts to local government that they outlined—local government still has something to fear. Members have also talked about money for areas. We have heard the debate about the difference between rural and urban areas. We would argue that we have created a fairer position, but we should also remember the backdrop outlined by the right hon. Member for Birmingham, Hodge Hill (Mr Byrne): the previous Government basically spent all the money. As my hon. Friends the Member for Bromley and Chislehurst (Robert Neill) and for Hereford and South Herefordshire (Jesse Norman) rightly said, we are working within the tight financial envelope left to us by the mess of the last Labour Government.

Having said all that, I must also congratulate and thank the hon. Member for Birmingham, Edgbaston (Ms Stuart) for securing a debate on this important issue and for her thoughtful opening speech. This Government have armed local government with a fair funding deal for all parts of the country—rural and urban, district and county, city and shire—which means that councils can plan budgets and deliver sensible savings while protecting front-line services. I will come back to the context of “fair” in a moment.

As has been outlined, every bit of the public sector must do its bit to pay off Labour’s deficit, including local government, to account for a quarter of all public spending. Our hats should go off to local government for the impressive work it has done, because we have shown that we can make those savings and still deliver good front-line services. Public satisfaction is at an all-time high, especially compared with 2010.

The autumn statement ensured that local government is protected from further spending reductions for 2014-15 and 2015-16. Councils now have the stability and certainty to plan their budgets and move ahead with transforming local services and ongoing efficiencies, which they absolutely need to do.

[Richard Burden (Birmingham, Northfield) (Lab)]

Will the Minister give way?

[Brandon Lewis]

No, I will not, due to the time constraints.

Councils now have stability. A number of local authorities have already done much work to prove that efficiencies deliver not only savings, but better services for their residents. Ultimately, that is the key. It is not about Government money or councils’ money; it is about taxpayers’ money being spent on good front-line services for local residents. I encourage authorities to look at the good councils out there doing great work with efficiencies and innovation, such as those that have done work through the community budget programme and the public service transformation network.

Their work is becoming more efficient and effective for council residents. Independent reports show that it is saving about £20 billion a year in this country. More importantly, areas going forward with such innovation show better outcomes for residents, not the least of which is being highlighted through the work of the better care fund, which involves work between the Department for Communities and Local Government and the Department of Health, and is showing benefits. I will touch on Members’ individual points in a moment, and I will write to the hon. Lady with some details about the better care fund, particularly with relevance to Birmingham. I am happy to meet her separately on that issue as well.

The average spending power reduction for councils in 2014 is expected to be limited to 2.9% per household. Members have mentioned the top 10% and the bottom 10%. Let us be clear that authorities’ spending power in the most deprived areas is much higher. In 2014-15, it is up to about £4,200 per dwelling in the 10 most deprived authority areas, compared with about £2,100 per dwelling in the 10 least deprived. That absolutely reflects, as the hon. Member for Southport (John Pugh) said earlier, ensuring that need is recognised.

The hon. Member for Birmingham, Edgbaston mentioned better care, as I have said, and education, which I will feed through to the Department for Education. I appreciate the invitation to Birmingham. I will look at the diary and see whether we can work out a visit, to ensure that we get up there. However, I gently point out to Members from Birmingham, Liverpool and Newcastle that we are holding consultations right through January—councils are coming to see me to talk about the financial settlement—and at the moment those individual authorities have not even asked for an appointment to come and see the Department. I gently suggest that those Members go back and say to those authorities that if they feel they need to talk to the Department they should make appointments to come and see us. I am seeing the councils from the north-east next week, but at the moment Birmingham and Liverpool councils have not asked to come and see us.

[Several hon. Members]

rose—

[Brandon Lewis]

As I have said, I am not giving way, either to tide or time.

Regarding Liverpool more generally, I will happily see Mayor Anderson. In fact, I saw him just a few months ago, and the next time I am in the north-west I will make a point of ensuring that I go to see him again. I appreciate the kind invitation that has been made to visit him, but if it is a working visit it will be even more efficient for the taxpayer.

My hon. Friend the Member for Hereford and South Herefordshire quite rightly made the point about the backdrop we are working with. He also made the point about rural and urban funding. I appreciate his comments on the work we have done in that regard, which recognises the problem for young councils.

As I have said, some councils have been mentioned today whose representatives have not yet made an appointment to come and see us. I hope that they will do so, but I particularly want to point out that my hon. Friend the Member for Bromley and Chislehurst quite rightly highlighted the key role for moving the relationship between local and central Government, particularly on funding, so that we have a system that is much more based on reward rather than handouts, and on giving local authorities the power—the autonomy—to decide their own future and their own destiny, which is something we are very keen to do. That is about ensuring that we get efficiencies, and that we encourage local government to move away, as some councils are doing—not all councils are doing so but there are some really good councils doing great work, across the political divide. As has been highlighted, Manchester is a good example, with its community budgets work.

However, councils must not do what they do just because they do it. They must go even further than the occasional stop and pause to think, “Can we do this better and quicker and faster?” They should start from the beginning by asking, “What is it we are looking to achieve? What is the outcome we want for our residents and how do we best supply that?” The councils that do so are finding substantial savings.

There is significant scope—with small things as well, in some cases—for small authorities with a small budget of £5 million to £20 million to merge back office services to do more joint working. Councils that are doing that are finding up to 18% in savings—substantial money. They can get more for less that way and do better with the £60 billion-a-year procurement budget that local authorities have; they could tackle the £2 billion of local fraud that is still there; they could reduce the £2 billion of lost money in council tax arrears, with arrears substantial in some areas such as Liverpool; or they could use their record £19 billion of reserves and get better value for money from the billions they have in property assets.

We touched on spending power this morning in the House and the Government grant is, of course, not the only way councils receive their money. People need to understand why we look at spending power. Local councils have income from a wide range of sources, so it is right and accurate to look at their overall spending power. The Government have again looked at all of a council’s income, from council tax, settlement funding assessment figures, specific grants, new homes bonus and, as I have said, from 2015-2016 the pooled money that will come from the NHS to support health and social care.

Councils still have a long way to go in terms of the work they can do to be efficient. They can look at the transformation fund—there is a new fund of £330 million. There is a £200 million extension of the troubled families programme to support 400,000 more families that need help and to build on the progress that has already been achieved. There is £100 million to enable efficiencies in service delivery; a £30 million revenue fund; and £45 million to drive transformational change just in the fire and rescue service.

There are rigorous safeguards in place to protect local authorities’ sustainability. Local authorities are legally required to balance their books and are responsible for managing their cash budgets within each financial year. The chief finance officer plays a key role in positively influencing the budget-setting process, including setting out the key risks associated with the budget and helping to find sustainable solutions in future. Chief finance officers have a duty to stop council spending effectively instead of allowing an overspend, and there is an audit process in place to ensure that the books are balanced. I encourage authorities to look at the 50 ways to save for local government and at what good authorities are doing to find those savings, and to learn from them.

Authorities have considerable flexibilities to set income and spending levels and to move money between years to help themselves. We have given more flexibility and more local autonomy, and councils are now directly able to benefit from local business growth for the first time in a generation, with around £11.5 billion per annum available through business rates and the annual growth on their share. Therefore, there is a strong incentive to support and develop local businesses, and to help people get into work and to see those businesses grow. There are cutting-edge councils that are doing this work—they know how to do it and they are leading by example in developing best practice for the rest of the country to follow.

I know that getting the ball rolling can be a hard part of overhauling local services. We have seen that. That is why the transformation challenge award was brought in. We were pleased to announce 18 successful schemes just last year, including projects looking at shared services and integration of health care and council services.

Local government has shown commendable skill in reducing its budget and protecting front-line services. With the economy now in recovery and more job opportunities being created, councils are managing their budgets and have a once-in-a-generation chance to step out from Whitehall’s shadow and be masters of their own destiny.

Mid Staffordshire NHS Foundation Trust

Tuesday 7th January 2014 Westminster Hall

16:14

[Jeremy Lefroy (Stafford) (Con)]

Thank you very much, Mr Crausby, for calling me to speak. It is a pleasure to serve under your chairmanship. Given the interest of several colleagues from the Staffordshire area, with your permission I will take a number of interventions in the course of making my remarks.

On 18 December, the administrators of the Mid Staffordshire NHS Foundation Trust published their final report. It recommended the dissolution of the trust as soon as possible and the absorption of Stafford and Cannock hospitals into the University Hospital of North Staffordshire NHS Trust and the Royal Wolverhampton NHS Trust respectively. It also set out proposals for the services that would continue to be offered at both Stafford and Cannock. The total cost over three years would be £220 million, of which £63 million is revenue and £157 million capital.

Let me first address the proposal to dissolve MSFT. I believe that is the right thing to do. It will enable both Stafford and Cannock hospitals to work much more closely with larger specialist teaching hospital trusts. They will both then be able more easily to recruit clinical staff who see greater opportunities for skills development within a larger organisation working across two or more sites and overhead costs will also be reduced.

However, the administrators’ proposals do not go far enough in ensuring that the interests of those who currently use MSFT are fully taken into account. Monitor and the Secretary of State clearly need to state that the expanded trusts should immediately recruit suitable non-executive directors from the areas served by MSFT, such as Stafford, Cannock, Penkridge, Rugeley, Stone, Brewood and so on, to ensure that those areas are properly represented.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Under the proposals, the University hospital of North Staffordshire will take over Stafford hospital. North Staffordshire hospital has a deficit at the moment, caused by reopening beds to cope with blockages in A and E and in admissions. Does the hon. Gentleman agree that in taking over Stafford hospital, it is very important and in the interests of everybody—everybody in Stoke-on-Trent, Newcastle-under-Lyme and Stafford—that the University hospital of North Staffordshire has the prospect of attaining financial stability?

[Jeremy Lefroy]

I thank the hon. Gentleman for his intervention and I entirely agree with him. I would see the situation more as two hospitals coming together, but it is vital that the financial difficulties that UHNS is facing are sorted out. I particularly urge the Government to look at the private finance initiative cost, which is too great for that particular trust.

[Joan Walley (Stoke-on-Trent North) (Lab)]

I am most grateful to the hon. Gentleman for giving way and I congratulate him on securing the debate. May I point something out for the record, so that when the Minister comes to reply he can, hopefully, give cast-iron assurances about the financial input that will be needed for this reconfiguration to take place, addressing the issue that UHNS has identified—that the additional expenditure needed for service configuration is in the order of £28 million or £29 million, whereas the trust special administrator has said that only £13 million would be needed? Also, the trust special administrator has proposed a cost improvement programme of 8.5%, whereas Monitor has said that anything above 4.5% is dangerous. We need a very clear, detailed calculation and input from the Government as to how these extra costs will be met, also taking on board the issue about PFI.

[Jeremy Lefroy]

I thank the hon. Lady for her intervention and I entirely agree with that point. There is no point in Stafford’s merging with Stoke if the consequence is that we have a trust that will be financially failing in the future.

The administrators rightly place emphasis on the need for swift action, and I believe that the dissolution of MSFT in the autumn of this year should be possible—indeed, it should be possible even earlier. In fact, I would go further. MSFT has improved greatly in recent years following the huge failings brought to light through the vital work of Cure the NHS and documented in the Francis report. Its recently published hospital standardised mortality ratio figures were the best in the west midlands, but it is fragile and finds it difficult to recruit in some areas. We need the overall arrangements to take immediate effect, even in shadow form. In recent weeks I have detected less engagement than is necessary, because of the uncertainties of the administration process. That needs to stop.

This is all taxpayers’ money. It is our national health service. It is time to work together.

[Andrew Griffiths (Burton) (Con)]

I congratulate my hon. Friend on securing this debate and on the work that he has done in recent years. He used the words “fragility” and “uncertainty”. He understands the fragility and uncertainty of the health care economy in Staffordshire. Queen’s hospital, in my constituency, is a Keogh hospital, which has huge financial debts and is struggling to survive. Does my hon. Friend agree that it is essential that this reorganisation takes place and is properly funded? If not, the knock-on effect on other hospitals, such as Queen’s, and on the wider health economy, could be damaging and have a domino effect, with other hospitals falling over.

[Jeremy Lefroy]

My hon. Friend is right. We must make sure that we do not jump from the frying pan into the fire. We must get to a sustainable condition for the health economy. These new overall arrangements must take immediate effect. I urge the Minister to make that clear today, to give the various managements confidence to get on with their work.

I shall make one final point about the future UHNS and the Royal Wolverhampton hospital. The Secretary of State has rightly emphasised patient safety and care since the publication of the Francis report. The new expanded trusts have the opportunity to become national leaders in zero-harm health care, so I urge Monitor and the Secretary of State to seize the opportunity to support them in doing so at this time. Let this administration not be a dry legal exercise. Let it be the chance for Stoke, Stafford, Cannock, Wolverhampton and Walsall to become, even more, shining examples of the best 21st-century health care.

[Mr Aidan Burley (Cannock Chase) (Con)]

I congratulate my hon. Friend on securing this debate. I do not think that any other hon. Member has had to deal with a local hospital issue as all consuming and difficult as the one in Stafford. I congratulate him, on behalf of everyone, on his tireless dedication to getting the best deal for his constituents.

My hon. Friend mentions Cannock Chase hospital, in my constituency—the other hospital run by Mid Staffordshire NHS Foundation Trust—which will be taken over by Wolverhampton as part of the administration process. I welcome the abolition of that trust, which left my hospital 50% empty and which, even as we speak today, has just closed Littleton ward, to decant nurses to Stafford to try to shore up the hospital there.

Does my hon. Friend agree that we cannot wait until later—until sometime this year; perhaps even the back end of the year—for Wolverhampton to take over running Cannock and for UHNS to take over running Stafford, and that we need to move to the new organisational structure as soon as possible? I mean weeks, not months, so that both of our hospitals can have a secure future and the staff can know that their jobs are safe.

[Jeremy Lefroy]

I agree. I welcome my hon. Friend’s huge support, both for Stafford and Cannock, throughout this process.

[Valerie Vaz (Walsall South) (Lab)]

I congratulate the hon. Gentleman on securing this debate. I know how hard he has worked and I echo the tribute of the hon. Member for Cannock Chase (Mr Burley).

The impact on the Manor hospital in Walsall has been immense, as the hon. Gentleman said. We have already had to open 70 beds, as well as attempting to open two wards. The hospital desperately needs £40 million. I have raised this matter frequently with the Minister. I should be grateful if the hon. Gentleman took that on board in his summing up and if the Minister looked at the Manor hospital—he has visited it, although I was not there when he did—to ensure that it gets the funds that it desperately needs, having taken the impact of the closure of accident and emergency at Stafford hospital.

[Jeremy Lefroy]

I am grateful. I place on the record my thanks to all the staff at all the hospitals—Stafford, Cannock, Wolverhampton, Walsall and Stoke—for all they have done through this difficult time.

Let me turn to the detail of the services, which comprises the bulk of the trust special administrators’ report. We have come a long way from 11 months ago. Then, the contingency planning team recommended removing A and E and all acute services from Stafford, as well as elective surgery from Stafford and/or Cannock. We now have proposals that retain elective surgery at Cannock and, indeed, foresee increased activity there. At Stafford, we retain 14/7 A and E, together with acute medicine, elective and some less serious non-elective surgery, day-case surgery and a large out-patient department.

As a result of the consultation, the administrators proposed a midwife-led unit for maternity, when their original proposals removed all childbirth from Stafford. The estimate is that some 90% to 91% of all current patient attendances would remain at Stafford and Cannock.

[Gavin Williamson (South Staffordshire) (Con)]

Most of my constituents and, I am sure, many of my hon. Friend’s, would find it deplorable if Stafford hospital did not have a consultant-led maternity unit. The pressure that that will place on so many hospitals—Walsall, Manor, New Cross, Queen’s or the University hospital of North Staffordshire—will be unsustainable. I urge Ministers to look at the issue again.

[Jeremy Lefroy]

I am most grateful to my hon. Friend. I will come to that important point.

I pay tribute to the work of Support Stafford Hospital, because the impact of its campaign has shown just how much the community values the services at Stafford and Cannock. I also pay tribute to the working group, which I set up, and all those who have worked with me on that to provide us with the detail on alternative proposals, some of which I shall outline.

There is no doubt that the administrators listened carefully to what was said in the consultation and made a number of changes in their final proposals. However, the proposals as they stand are insufficient. What I am setting out requires not a re-doing of all the work of the trust special administrator—given what I have said about the urgency of the situation, that would not be sensible—but a modification of the detail.

I do not believe that such a modification would necessarily require more money than is currently proposed, although that remains to be seen, but it would be of huge benefit to many thousands of my constituents, and those of hon. Friends and other hon. Members. It will also ensure that both Monitor and the Secretary of State can fully comply with their legal obligations under the Health and Social Care Act 2012, in respect of health inequalities, as I will show later.

My proposal is that rather than cutting three areas of service in Stafford, those continue in a more cost-effective form, at least for two or three years. I, and the clinicians at Mid Staffs, consider that it will be quite possible to show how these services can be run across the two sites in Stoke and Stafford on a networked basis. The areas concerned are paediatrics, obstetrics and maternity and critical care.

First, the report proposes a reduction of the critical care unit to four beds. It says that the possibility of the highest level of critical care—level 3—should be maintained, but it is not clear how this will be possible without a rota for specialists in critical care. The critical care department at Stafford made its own submission to the consultation, which suggested a reduction in beds and a networked specialist rota. That seemed eminently sensible. Given that the CCU at Stafford is a net contributor and supports several other activities, I urge Monitor and the Secretary of State to determine that this model is tried for a period, during which it will, hopefully, be proven to operate well, clinically, operationally and financially.

The TSA’s final report also proposes, as my hon. Friend the Member for South Staffordshire (Gavin Williamson) mentioned, removing the consultant-led obstetrics and maternity service and replacing it with a midwife-led unit dealing with approximately 350 to 400 births a year. That is a step forward from the draft report, which proposed no childbirth at all at Stafford. However, my constituents and I do not believe that it is sufficient.

Currently, Stafford sees more than 2,000 births a year and that is likely to rise, with extensive house building, various new business parks being built and the doubling of the size of MOD Stafford, to mention but some developments, resulting, in the coming years—even with a MLU—probably in some 2,000-plus babies being born in other maternity units, mainly at Stoke and Wolverhampton. UHNS in Stoke already sees some 6,000 a year and its population is also growing. With at least 1,000 births, and probably more from Stafford, UHNS will probably approach 8,000, which is the number currently born at the largest unit in the country, in Liverpool.

The NHS rightly promotes choice for women about where to have their babies and the Prime Minister has spoken out against the trend towards ever larger units. Yet that is precisely what is being proposed here for women who are unable to use a MLU, due to the possibility of complications in childbirth. There would also be an impact on those who currently use UHNS and the Royal Wolverhampton, as their local units will become even busier—probably including Walsall as well—taking in women from a much wider area.

My proposal, and that of clinicians at Stafford, is to continue with the current service, fully networked with UHNS, while the impact of the current rise in both the population and birth rate is assessed. That would also enable the special care baby unit at Stafford to continue to support the regional intensive care network for babies, as it currently does. An added benefit would be that women will continue to have a local obstetric and gynaecology service, which I am sure the Minister will appreciate as he comes from that specialty. Again, that would relieve pressure on the larger University hospital of North Staffordshire and the Royal Wolverhampton hospital.

Thirdly, the TSAs propose to reduce the paediatric assessment unit to 14 hours a day from 24 hours a day and to do away with in-patient paediatric beds. There will be no paediatric rota, although A and E doctors will receive extra paediatric training and paediatric out-patient services will continue. The principal reason given by the TSAs is the national standards of the Royal College of Paediatrics and Child Health, which state that such services should be provided by a full consultant rota, which is usually between eight and 10 consultants, whereas at Stafford it is between five and six.

Let me be clear about the consequences: if the proposal is allowed to happen, the clear logic is that dozens of other paediatric units across the country that have similar numbers of consultants, or indeed fewer consultants, must be closed or have their activities drastically curtailed. Monitor cannot use the argument that that must happen at Stafford but not at other foundation or NHS trusts for which Monitor or the NHS Trust Development Authority are responsible, and neither can the Government.

The argument that all in-patient paediatric care should take place in the largest hospitals is not accepted by the general public. They fully understand why very sick children should go to specialist units; they do not understand why their local general hospital cannot receive sick children at night or for short stays, and neither do I. If experts at the Royal College insist on making that argument, however, let it be open, let it be consistent across the land and let it be agreed by all political parties. The proposal should not be implemented by stealth through a trust special administration that in no way arose because of the performance of the paediatrics department at Stafford.

I have one final point.

[Mr William Cash (Stone) (Con)]

I have been waiting for my hon. Friend to reach his conclusion so that I can say how much I support him in his endeavours on Stafford hospital, which affects my constituency of Stone. I had to fight so hard to get the public inquiry that has led to many of the changes, and I simply offer him many congratulations. I support pretty much everything that he says, and I believe that he has done an enormous service to his constituents through his work over the past few years.

[Jeremy Lefroy]

I am most grateful to my hon. Friend, and I return his compliments. He has likewise tremendously supported the trust and the work that has been done.

My final point is that the children and families who will be most affected by the paediatrics proposal are those on the lowest incomes. Such families are the least likely to have access to private transport to take their children nearly 20 miles to the nearest hospital at night. For them public transport in the daytime is often poor, and a taxi fare is beyond their means—certainly if they have to visit a sick child several times. I believe that those on low incomes should have fair access to health care, which both Monitor and the Secretary of State have a responsibility to ensure.

The paediatrics department at Stafford made an alternative proposal in its response to the consultation. That alternative was measured and understood the need to cut costs. The alternative proposal included a reduction in the number of in-patient paediatric beds, and consultants would have worked in a network across both of the new trust’s sites.

A pattern can be seen: critical care, maternity and paediatrics. There are sensible alternative proposals.

[Robert Flello (Stoke-on-Trent South) (Lab)]

I echo the sentiments of other hon. Members in thanking the hon. Gentleman for securing this debate. I also echo the sentiments of my colleague and near neighbour, the hon. Member for Stone (Mr Cash).

Before the hon. Member for Stafford (Jeremy Lefroy) concludes, I have two points. First, he is absolutely right that there are sound alternatives that need to be considered very quickly, and a proper process must be put in place. Secondly, the situation’s impact across the whole of north Staffordshire, and indeed the whole of Staffordshire, should not be underestimated. I hope he agrees that there is probably no right solution, but we must get as near as possible to a right solution.

[Jeremy Lefroy]

I entirely agree with the hon. Gentleman, and I appreciate his support and the support of colleagues from Stoke-on-Trent, Newcastle and across Staffordshire. We have worked together, which is a great achievement on a subject that can be political.

In conclusion, surely it makes sense to work through the proposed clinical networks while Stafford is joining the expanded UHNS—with things roughly as they are now—for a period of two or three years. I believe that those network solutions can work. If they prove as effective as the clinicians and I think they can be, we will have achieved the objective of securing services that are financially, clinically and operationally sustainable in Stafford, and indeed elsewhere, under the expanded UHNS. Such services would be welcomed by my constituents and would reduce the potential pressure on other hospitals, such as UHNS, the Royal Wolverhampton, Manor hospital in Walsall and hospitals in Burton.

16:35

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

It is a pleasure to serve under your chairmanship, Mr Crausby. It is also a great pleasure, as always, to respond to my hon. Friend the Member for Stafford (Jeremy Lefroy) and, indeed, to all hon. and right hon. Members who have contributed to and supported this debate, which raises an important issue for patients and constituents, not just in my hon. Friend’s Stafford constituency, but across Staffordshire and the wider region.

It has been an incredibly difficult time for local patients and staff at the Mid Staffordshire NHS Foundation Trust. I entirely agree with my hon. Friend that the trust has come a very long way since the terrible events exposed by the inquiries and the Francis report last year. My hon. Friend has walked the journey every step of the way with his constituents and with the patients, and he should be congratulated and commended on his strong and superb advocacy of the needs of local patients, of all his constituents and of the families of those who were treated appallingly by the trust in the past. He should also be congratulated and commended on his strong advocacy for the improvements and the high-quality care that is now being delivered by parts of the trust today. I am sure we would all like to put on record our congratulations on his advocacy and on the work done by him and my hon. Friend the Member for Stone (Mr Cash), who for many years has also been a strong champion of local patients.

In responding to some of the points that have been raised today, it is important to talk a little about the trust’s background to provide some context. The trust has been operating at a deficit for some time, and certainly since 2009. In April 2013, the trust reported a deficit of £14.7 million. As my hon. Friend the Member for Stafford alluded to, that position is expected to get considerably worse. As a proportion of the trust’s turnover, the deficit forecast for 2014 is higher than that of almost any other trust in the country. For the past two financial years, the trust received approximately £20 million a year in support from the Department of Health. Without that funding to supplement its income, Mid Staffs would have been unable to pay its staff.

The contingency planning team sent into Mid Staffs in late 2012 concluded that the trust was delivering services at a cost substantially higher than most other trusts in the country. A key challenge faced by the trust is the recruitment and retention of staff and the high cost of temporary staff, which is no wonder, given that it must have been a very demoralising time for those working in the trust when there have been ongoing investigations into events that took place in the past. Additionally, some of the trust’s services are operating with consultant numbers significantly below Royal College guidelines. The 2012 contingency planning team reported that, despite improvements in clinical services, the trust is unlikely to be able to achieve the required cost savings without adversely affecting the quality of care provided to patients.

On the reasons why the special administration process has been set up, it is important to take the initial report into account and to recognise that we are where we are today because of that report. In cases such as this, where a trust is facing substantial financial challenges, it is crucial that action is taken quickly to secure services for patients and ensure that high-quality patient care can still be delivered. The special administration process for foundation trusts offers a time-limited and transparent framework for resolving the problems of a significantly challenged trust. Like the regime for NHS trusts, the special administration process is intended to be used only in the most serious circumstances.

As my hon. Friend the Member for Stafford is aware, Monitor made the decision to place Mid Staffs into special administration on the basis of the 2012 work. The CPT’s first report concluded that Mid Staffs is not financially or clinically sustainable in its current form and recommended the appointment of administrators as the best option for identifying the changes required in the years going forward to continue to secure high-quality patient care. Acknowledging the serious financial challenges facing the trust, the Secretary of State wrote to Monitor giving his support for the appointment of the trust special administrators.

It is worth touching briefly on the work of the trust special administrators at Mid Staffs. The TSAs have been in place since April last year, and they have had two tasks. First, they had to take over the day-to-day running of the trust. Secondly, they have had to work with the trust’s staff, commissioners, providers and other local stakeholders to develop a plan for services. The work undertaken by the TSAs builds on the earlier conclusions of the CPT and only strengthens the case for urgent change. If no action is taken, the TSAs estimate that Mid Staffs’ annual deficit will exceed £40 million in four years.

[Joan Walley]

I am conscious of the amount of time left to reply to the specific points made by the hon. Member for Stafford (Jeremy Lefroy) and in interventions, so will the Minister ensure that the issues flagged up will be responded to in detail in this debate?

[Dr Poulter]

I will of course respond to those that I can, but as the hon. Lady will be aware and as I will set out later, the TSAs’ report is currently with Monitor—I would expect it to be recommended to the Secretary of State by the end of this month—so it would be inappropriate for me to comment on it at this stage. I hope she understands that it would be wrong for me to make assumptions about a report that has not yet been submitted to the Secretary of State.

[Mr Cash]

Will the Minister give way briefly on that point?

[Dr Poulter]

I will, but I am conscious of the time.

[Mr Cash]

I have asked nearly 10 times for a report to be debated on the Floor of the House in Government time, but it has not happened yet. Nobody can understand why it has not happened yet. Can we please have an assurance that a debate will take place and within a matter of weeks?

[Dr Poulter]

My hon. Friend makes an important point. The Secretary of State has previously given that assurance, and I give my hon. Friend that assurance again today. It is obviously for the Leader of the House to organise Government time, but I will have conversations with and write to him following this debate to ask him to expedite the issue.

Returning to the report, the TSAs have also highlighted the serious clinical implications of failing to act. They predict that services operating below the recommended consultant level, such as A and E, would need to be reduced. Low-volume services would risk being closed altogether, forcing patients to travel further for treatment. Throughout the process, the TSAs have stressed the fragility of the trust and emphasised the huge importance of agreeing to and implementing the changes required as soon as possible.

I will now move on to the next steps, about which all hon. Members are concerned. I know that it is frustrating for hon. Members wanting answers that I cannot provide them all today. The report is currently with Monitor, so it is for Monitor to make recommendations to the Secretary of State on the basis of that report. That will be the appropriate time for the Secretary of State and Ministers to comment. That may be frustrating for hon. Members, but that is the way that things need to be. We cannot comment on the matter until Monitor has made its recommendations. If Monitor is satisfied with the TSAs’ final proposals, the Secretary of State will have a maximum of 30 working days to consider them against a set of requirements defined in legislation. These aim to secure services for patients that are of a sufficient level of safety and quality and that offer good value for money. The Secretary of State will consider each requirement carefully before coming to his final decision.

As I have said, it would be inappropriate for me to pass further comment today on the TSAs’ final report because its final version has not yet been submitted. It is clear from the debate, however, that there is widespread interest from around the region and from local Members who are concerned about the wider impacts of the report on the health care economy and on services for other local patients. I am confident, however, given the interest from Members and the support provided to the trust from other health care trusts and hospitals in the area, that we will come to the right conclusion. We all want to see a strong and viable health care service for patients in Stafford and the surrounding areas, and I am confident that that is what we will have delivered once the Secretary of State has considered the report.

Autumn Statement (Coventry)

Tuesday 7th January 2014 Westminster Hall

16:44

[Mr Jim Cunningham (Coventry South) (Lab)]

This is one of the few times I have had the honour of serving under your chairmanship, Mr Crausby. I will start by looking at the background to why I asked for this debate.

The Chancellor said he would eliminate the deficit by 2015, but we heard yesterday that he is going to have to make a further £25 billion of cuts. At the same time, the Government have presided over a cost of living crisis that is affecting ordinary families right across Coventry. Families are on average £1,600 a year worse off. The purchasing power of their wages is down by 5%. Energy prices have rocketed, adding £300 a year to the average family bill. Train fares have increased by up to 6% and bus fares have increased by 2.5%.

Food prices have also increased. The bedroom tax has penalised many in the social housing sector, while rents in the private sector are at an all time high. The benefit cap is also making life difficult for children in Coventry, in particular those in care—the Government are making things harder for around 287 children who have already had a tough start in life.

All that has culminated in large numbers of people relying on food banks across the city, with 67 families receiving food vouchers from the Coventry citizens advice bureau in November alone. Nationally, Citizens Advice expects to allocate over 100,000 vouchers this year.

Cuts could mean that pensioner benefits, such as the winter fuel allowance, could be cut back. As a result of spending cuts, other pensioner benefits are also at risk. Centro, the west midlands transport agency, has to cut £14 million from its budget over the next two years, which will mean reducing pensioner benefits to the statutory minimum.

Benefits for the disabled are also at risk in the transport budget, with Centro having to consult on removing up to a third of ring-and-ride services. Many of my constituents are also facing long delays in receiving their benefits and problems with Atos, which seems to be forcing ill and vulnerable people off benefits and back to work.

Since the Government came to power, the cost of child care has gone up by 30% while wages have been cut by 5%. Moving on to the situation regarding women, tax adjustments made last year raised £14 billion, of which women contributed £11 billion. Given the £11 billion in tax that was inflicted on women and the cost of child care, women are hardest hit by this Government. More women than ever before are on low wages. More women than ever before cannot get a job. More women than ever before are bearing the brunt of cost of living increases.

I turn to the settlement for Coventry. Core funding has been cut by £45 million since 2010. Coventry will face a further £19 million funding cut in 2014-15, which is a 10.6% cut. In 2015-16, the provisional settlement indicates that Coventry will face a 15.2% cut. Government figures regarding Coventry’s spending power do not make sense as they ignore inflation and include funding from council tax and new burdens placed on the council. The council tax base is being eroded; council tax has not increased as a result of the freeze grant, which is storing up problems for the future.

I turn to the impact on children’s services and education. There will be a significant impact on youth services and social care services to support education and the well-being of children, and schools’ basic need grant has been reduced to zero. That may be a mistake by the Government that needs clarifying urgently, because it puts in jeopardy plans to expand our local schools. If what I have said is correct, plans to expand primary schools to meet the demographic changes will have to be cancelled.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

In our casework and surgeries, we are all seeing the effects of what my hon. Friend is outlining. If we couple that huge increase in need, which is apparent to Members of Parliament and is impacting on the services provided by the local authority, with the deep cuts that have taken place and will continue to take place, is there not a substantial magnifying effect of the gap between needs and the ability to provide for those needs?

[Mr Cunningham]

I totally agree with my right hon. Friend. I come back to something that Nicholas Ridley said many years ago—about 25 years ago. He foresaw a time when local councillors would meet once a year and give contracts out to the private sector. If we look at the strategy of this Government and of previous Conservative Governments, we see that they have slowly but surely taken powers away from local authorities. They do so in a number of ways, in particular by slowly but surely cutting budgets and forcing services out to the private sector, and yet the private sector does not always know best.

Also, we have a big issue regarding pensioners, in particular caring for them, that started under the previous Conservative Government and the matter has never been resolved, as far as I can remember. We are still debating changes that should have happened 25 years ago. Instead, 25 years ago local authorities were forced to hand over—or sell, if people want to put it that way—old people’s homes to the private sector. Five or seven years down the road, however, after the private sector had made a profit, the homes closed down. That, too, created a shortage of beds, but more importantly it forced the prices up for care for elderly people.

The whole strategy can be seen. I have always said that this Government think in generations: what the previous Conservative Government leave off, the next Conservative Government pick up. At the end of the day, in local government we will have only one or two little services, while the rest is in the private sector. Mr Ridley’s prophecy is becoming true.

I move on to the impact. Support for Age UK and other local charities will reduce by 22%; there are significant reductions to housing-related support; the housing-with-care scheme in Coventry at Jack Ball house and George Rowley house has ceased; a range of day centres and the in-house, short-term home support service have closed; and charities will no longer get the business rate support that they once had, even though that is meant to be something to do with the Prime Minister’s big society.

If we cut the public sector—the social sector, in particular—we can hand things over to the private sector, or the voluntary sector, but if we hand it over to the voluntary sector, the Government inflict cuts on the voluntary sector. It is an endless cycle of viciousness. If the Government want to get some credibility in local government—even Conservative councils are concerned about what the Government are doing—they need to get a grip and have a good look at what they are doing.

Finally, there is the impact on benefits, such as the local welfare provision grant, which will also end this month—£1.4 million for Coventry, providing emergency funding to those in direct need.

[Mark Pawsey (Rugby) (Con)]

Many of my constituents in places such as Binley Woods, Bulkington and Brinklow see Coventry as their major city, so what happens in Coventry is important to them. I notice, however, that the hon. Gentleman is not merely restricting himself to the autumn statement; he is having a rather broadsided blast at lots of things that the Government are doing. Does he agree, however, that the steps the Chancellor took in the autumn statement to reduce the burden of business rates on small businesses is beneficial to the prosperity of Coventry, as was the freezing of fuel duty, which means that fuel is now 20p less than it would have been had Labour been in power? Are those things not beneficial to his constituents and mine?

[Mr Cunningham]

I expected the hon. Gentleman to come in on that. That should have been done three and a half years ago, and not left until now. He mentioned that I have had a wide-ranging debate on a lot of subjects, but the Government have had three or four Budgets since coming to power, and each one has had an effect on the areas that I have outlined.

As I said, the Government have to look seriously at the burdens that they are inflicting on local government and, more importantly, on the public. Up to 1,000 more jobs in Coventry, or 1,800 over the past three or four years, will go as a result of the Government’s so-called rebalancing of the economy.

16:55

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I am pleased, Mr Crausby, to serve under your chairmanship. I congratulate my hon. Friend the Member for Coventry South (Mr Cunningham) on securing the debate, and I thank Mr Speaker for allowing this important local debate on the impact on Coventry of the autumn statement.

My hon. Friend covered well and succinctly the overall impact of the autumn statement on the country as a whole. We have at last had some small growth, which is very welcome, with a continued reasonable increase in employment, but there is no point in trying to kid ourselves that we are anywhere near where we said we would want to be. Furthermore, the Government should not kid themselves that they are anywhere near where they want to be on the deficit, because the deficit has not been tackled to anything like the extent that they said with such confidence that it would be when they took office in 2010. As a result, we are still facing the cuts, an increasing level of cuts, that we are discussing this afternoon.

Coventry, which is anything but one of the richest cities, has suffered a massive collapse. All Members who know the west midlands or live near there will recall that in the first period of the Thatcher Government up to 1983, we lost something in the order of 30% of our manufacturing capacity—certainly more than that in Coventry—and the city has never really recovered. Whether that was necessary is not for today’s debate, but the hangovers and the legacy are still with us, meaning that Coventry is quite simply not a rich city and cannot bear the level of cuts being imposed on it.

Since 2010-11, we have lost £45 million from the core support to Coventry, which is 20% over about three years. I have heard it said by various business men, in the House and in particular elsewhere, that 10% of any company’s budget can be cut and it will survive quite well. Frankly, I have done that myself—it can be done. I have never heard any sensible business man say, however, that that should be done for three or four years running and then tried for another two years at an even higher level of cut than 10%. I have certainly never attempted to do that myself. It simply cannot be done, but the figures show that in effect that is what the Government are trying to do.

The figures given by my hon. Friend bear repeating, I am sorry to say. In 2014-15 we face a 10.6% cut, and in 2015-16 a 15.2% cut. I am well aware that that is not the entire income of the company, if we want to regard the local authority as a company. Nevertheless, that is a substantial and continuing sustained cut to its core budget, from which it has to deliver the key services.

Put together, the cuts from 2010 through to 2016 in Coventry, I think, come out as something in the order of a 65% cut in the core budget—making allowance for inflation and all the other things that the Government do not necessarily allow for in their figures. I do not invite the Minister to bandy her figures against ours—we all know that local government finance is an extremely complicated and tiresome matter, which can be twisted in any way and used to prove almost any argument—because that would not be helpful.

Instead, I ask the Minister to address two questions asked by my hon. Friend, to see whether we can get clear answers. I think that she has passed a message back to the officials about one of them, which—to quote from a note received from the local council—is:

“Coventry’s capital allocation for Schools Basic Need has, without prior explanation, been reduced to zero for 2015/16”.

That is surely a mistake. The council cannot believe it. How will it maintain its school buildings? The worst thing a school can do is neglect its buildings. I remember that when we took office in 1997, schools had buckets underneath the holes in their roofs where the rain was coming in. Difficult though it was, the first thing we did was to release £1 billion from the tax on utilities’ excess profits to deal with that situation. It costs a lot more in the long run to deal with such situations in that way. What I read out must be a mistake; I am sure that the Minister will be able to reassure us on that point.

The other specific point put to us by the Coventry local authority, to which my hon. Friend the Member for Coventry South also referred, is that the local welfare provision grant will end from 2015-16. That is worth £1.4 million to Coventry. That is not a lot of money, but it is a line in the budget until 2015-16. There has been a line in our budget for local welfare for as long as I can remember.

My right hon. Friend the Member for Coventry North East (Mr Ainsworth) referred to what we are seeing in our surgeries. People turn up destitute: they have nowhere else to go or to look. A constituent came to my surgery with two young children and asked, “What am I going to do?” I said that we had to release some funds from what I think we call the hardship fund—that is the vernacular for it. That fund, too, has disappeared as a line in the budget. I would like the Minister to note that.

Now, if a line in a budget disappears, we can bet our bottom dollar that the money for that line in the budget has disappeared as well. We had a temporary holding reply from the Government—I do not think that is good enough—on this matter, which says that the money is still there, but is simply in the whole total rather than being identified separately. Nobody is going to buy that—if a line has disappeared, the money has disappeared. We are facing a 16% cut in the year. It is simply not possible to believe that that money is still there. The money comes from core funding, and has gone down by 16%, yet we are being asked to believe that the money is still there. It is not.

Those are the two fundamental errors in the settlement that we are discussing this afternoon, and we need a reply on each. There are many other problems in Coventry, of course, that are very sad. The hon. Member for Rugby (Mark Pawsey) spoke of the small amount of help on business rates: every help is welcome, especially from this Government, and so we welcome the measure. But then one thinks of what could be done for small businesses. We could get rid of national insurance for new small businesses, or get rid of NI for businesses taking on new employees. There are so many imaginative measures that could grasp the attention of small businesses—particularly in the west midlands, where we have not done so well and could do so much more. But none of that was in the local government settlement in the autumn, and we did not imagine that it would be.

I ask for three things. The level of cuts should be re-examined; they are simply unmanageable in their present form. They cannot happen. They are just too big. Will the Minister also please answer the two specific points I raised, if possible this afternoon? If not, will she answer them in writing as soon as she is able to?

17:03

[The Economic Secretary to the Treasury (Nicky Morgan)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Crausby. I congratulate the hon. Member for Coventry South (Mr Cunningham) on securing this debate, and the hon. Member for Coventry North West (Mr Robinson) on his speech. I shall try to address the points hon. Members have raised. Although I appreciate that this is not always the style of the House, it would have been helpful if an indication of specific questions had been given in advance, so that I could have come with specific answers. If I do not answer the specific points raised by the Member for Coventry North West, I shall write to him with further information.

I should say that the subject for this afternoon’s debate was the effect on Coventry of the autumn statement. The points that have been raised are partial and do not fairly reflect the impact on the city of Coventry and the surrounding areas of Warwickshire of the Chancellor’s autumn statement. Hon. Members have focused on local authority funding as the main reason for the debate, but the whole point was that local government funding was excluded from the autumn statement and 2013 Budget reductions to help local authorities to freeze their council tax for 2014-15 and 2015-16. In fact, it is central Government Departments that are going to have to make further spending reductions as a result of the autumn statement, not local government.

The hon. Member for Coventry South started by talking about a cost of living crisis. The best way to deal with the fall in living standards is to deal with the economic crisis left to us by the previous Government. The hon. Gentleman is shaking his head, but he cannot possibly ignore the fact that the economy at the end of last year was 7% smaller than in 2008. That will have an impact on every household budget and every business in this country. My right hon. Friend the Chancellor has made enormous progress, as heralded in 2010, in putting our economy back on track. That should be welcomed by all hon. Members on both sides of the House.

[Mr Jim Cunningham]

I do not know whether the hon. Lady was in the House when the Chancellor was the shadow Chancellor and used to tell us that there was too much red tape. The actual economic crisis was worldwide and started in America with Lehman Brothers. She should not rewrite history.

[Nicky Morgan]

I thank the hon. Gentleman for that intervention. There was certainly an issue with the banks that had to be bailed out. I was not in the House when that happened; his colleague, the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), made the decision to do so—rightly, in my opinion—but the point is this: from the early 2000s, the then Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), was running a deficit budget, which means that a huge gap now needs to be plugged. The previous Government consistently spent more than they raised, which means that the achievement of this Government in cutting the deficit by a third—indeed, the Office for Budget Responsibility is forecasting that the deficit will be halved by next year—is an enormous one and should be welcomed by all people in this country.

[Mr Robinson]

If I could take us all back to the situation in Coventry—we could argue indefinitely about local finance and about the Government’s economic policy—I wanted to raise one other point, and apologise to the Minister for not having mentioned it before. I will write to her about, and hope that she will take note of, another issue arising directly from the cuts in Coventry, concerning the Meriden Street Housing Co-operative, which is facing cuts of 60%—a figure she will recall. I promised to raise that matter today, and I look forward to her reply.

[Nicky Morgan]

I look forward to the hon. Gentleman’s letter. Either I shall answer or I shall ensure that a colleague in the Department for Communities and Local Government answers if the issue is more within its remit than within the Treasury’s. He is right: today’s debate is about Coventry. When I was handed the brief I was amazed and impressed—although I should not be, as I am an east midlands Member of Parliament and Coventry is in the west midlands—at the amount of investment that both the Government and the private sector are making in Coventry. I will come on to the city deal that was announced recently, but I am also impressed by the number of new jobs that have been created in Coventry. Only yesterday, I was reading an article in the Coventry Telegraph about a software company, Phocas, which is choosing to locate its global headquarters in Coventry, bringing jobs with it. That should be welcomed and I am sorry that the hon. Member for Coventry South chose not to make a single mention of job creation or of companies choosing to locate in the midlands, a part of the country that I would agree is a fantastic place for companies to locate.

I will leave aside statistics on the autumn statement, and will talk about ensuring fairness. The hon. Gentleman failed to mention the rise in the personal allowance that came into force last April, and the further rise that will come into force this year: from this April people will be able to earn up to £10,000 without paying any income tax. If he thinks that that is not making a difference to the pockets of hard-working families in Coventry, he is very much mistaken. I can tell him from my constituency casework that it is very much making a difference to the hard-working families in Loughborough and the east midlands.

The autumn statement delivered an average saving of £50 in household bills. It will maintain support for the poorest families and provide new home owners with incentives worth up to £1,000 to undertake energy efficiency measures. That package of support will also help more than 2.3 million households in the west midlands with the costs of their electricity bills. We are freezing fuel duty for the remainder of this Parliament, saving motorists in Coventry £11 every time they fill up their tanks.

17:09

Sitting suspended for Divisions in the House.

17:29

On resuming—

[Nicky Morgan]

I will be brief because we expect further Divisions, but I want to finish the points that I was making, particularly in relation to council funding. The hon. Member for Coventry North West talked about not trading figures, but as he referred to some figures in the debate, I will tell him that, for Coventry city council in 2013-14, the spending power per household —per dwelling—will be £2,323, which is £107 more than the England average of £2,216. In relation to welfare payments, I think he was referring to the discretionary housing payment, which residents can apply for in relation to the spare room subsidy. My figures show that in the first six months of the scheme, Coventry city council allocated only 20% of that budget to households that had asked for help, so I hope he asks the city council why some of the funding remains unspent.

[Mr Jim Cunningham]

We have the cabinet member responsible for the city council’s finance here in the room, so he will be making a note of that.

[Nicky Morgan]

I thank the hon. Gentleman very much indeed. Let me finish with some good news, which I did feel was lacking from his speech.

We have already talked, thanks to the intervention from my hon. Friend the Member for Rugby (Mark Pawsey), about the announcements in the Chancellor’s autumn statement on business rates, which will benefit 174,000 properties in the west midlands. Thirty-seven per cent. of properties will see their business rates either frozen or falling, which is extremely welcome news. We are making it cheaper for businesses in Coventry to employ young people by abolishing employer national insurance contributions for under-21-year-olds. That will help 123,000 people in the west midlands under the age of 21.

I mentioned the good news announced yesterday that the software firm Phocas is to move its global headquarters to Coventry. Its work force will increase by one quarter. In China, Geely, which had recently acquired the London Taxi Company, announced that it was to quadruple its work force, creating 500 jobs in Coventry. In the hon. Gentleman’s constituency, food manufacturer Mission Foods has announced 50 new jobs as part of an expansion of its factory in Coventry. I understand that the hon. Gentleman used to work for Rolls-Royce. He will know the extremely good news about the success of that company. I am pleased to say that the east midlands, through the facility in Derby, shares that success.

On 12 December, my right hon. Friend the Prime Minister announced the agreement of a bespoke city deal for Coventry and Warwickshire. I know that that is the result of an enormous amount of hard work by Warwickshire Members of Parliament, including my hon. Friends the Members for Nuneaton (Mr Jones) and for Rugby. The city deal recognises the fact that the west midlands and Coventry and Warwickshire are a key engine of growth for the United Kingdom. Part of that success is the advanced manufacturing and engineering sector, including the automotive sector, but further growth in that sector is being impeded by a series of barriers, including insufficient business support advice, access to finance and the non-availability of individuals with appropriate skills. The city deal rightly seeks to tackle those key barriers.

The Coventry and Warwickshire local enterprise partnership predicts that the deal will include the delivery of more than 15,000 jobs in the wider economy, of which 8,800 will be in the advanced manufacturing and engineering sector. A range of innovative business support programmes will support further growth in the advanced manufacturing and engineering sector and a new flagship clearing house centre, where key business support agencies are co-located in one building.

[Mr Jim Cunningham]

Over the years, the local MPs have pushed for a lot of the companies that she has mentioned—for example, Jaguar Land Rover—in the midlands and particularly in Coventry. A city deal would push for that as much as anyone else, so we are not totally negative. We have played a part in some of the things the Minister has outlined.

[Nicky Morgan]

I am very glad to end the debate in a spirit of positivity. I thank the hon. Gentleman. He is quite right. All hon. Members, from both sides of the House, come together to support their local areas. That is why I felt that his speech missed the importance of the west midlands and the successes that are being achieved there. I am sure that neither he nor any MP would want to talk down their constituency or city. I am pleased to see that, as we approach the end of the debate, we are getting there.

Before I finish, let me talk about education funding, which was referred to by the hon. Member for Coventry North West. I have just been handed some figures, which show that Coventry’s capital allocation for 2014 to 2017 is £6.25 million. That is funding for new school places. In relation to the pupil premium, the extra in 2013-14 is £13 million and in 2014-15 it is £17 million. I will write with more detail to both hon. Gentlemen who referred to the figures, but I wanted to get that on the record.

I thank the hon. Member for Coventry South for organising the debate, for bringing this matter to the attention of the House and for enabling me to highlight some of the positive impacts that the autumn statement has had on Coventry, the west midlands and the United Kingdom.

Question put and agreed to.

17:38

Sitting adjourned.

Written Statements

Tuesday 7th January 2014 Written Statements

Tuesday 7 January 2014

Tax Information Exchange Agreement (Anguilla)

Tuesday 7th January 2014 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

An arrangement comprising an exchange of letters amending the 2009 tax information exchange agreement (TIEA) with Anguilla was signed in duplicate on 13 and 20 December 2013 to permit automatic and spontaneous exchange of information. At the same time an agreement was also signed to improve international tax compliance which sets out the precise details of the information which will be automatically exchanged.

The text of the agreement to improve international tax compliance has been deposited in the Libraries of both Houses and will be made available on HM Revenue and Customs’ website. The text amending the tax information exchange agreement will be scheduled to a draft Order in Council and laid before the House of Commons in due course.

Veterinary Products Committee (Triennial Review)

Tuesday 7th January 2014 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)]

Today I am publishing the report of the triennial review of the Veterinary Products Committee (VPC), which was launched by DEFRA’s then Minister of State on 26 March 2013. Triennial reviews of non-departmental public bodies (NDPB) are part of the Government’s commitment to ensuring accountability in public life.

The VPC is an advisory NDPB which reports to the veterinary medicines directorate (VMD), an Executive agency of DEFRA. The VPC exists to provide independent expert technical advice to Ministers in relation to aspects of veterinary medicinal products, in order that VMD’s remit can be fully achieved. The Committee requires very broad and also specialised expertise in order to be knowledgeable across the broad scope of issues the Committee may be asked to consider.

The review has found that the functions of the VPC remain necessary and should continue to be carried out independently of Government by an advisory non-departmental public body.

The report of this review will be published online, and copies will be placed in the Libraries of both Houses.

Greek Presidency

Tuesday 7th January 2014 Written Statements

[The Minister for Europe (Mr David Lidington)]

I am keen to keep Members fully informed of developments in the European Union, their implications for the United Kingdom and our priorities. I would, therefore, like to draw Members’ attention to a paper on the priorities of the Greek presidency of the Council of the European Union, which has been placed in the Library of the House. I have also deposited a copy of the calendar of ministerial meetings for the duration of their presidency.

International Tribunals (Sierra Leone) Act 2007

Tuesday 7th January 2014 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

The Government have today laid before Parliament a memorandum to the Foreign Affairs Committee on the post-legislative scrutiny of the International Tribunals (Sierra Leone) Act 2007.

The Foreign and Commonwealth Office carried out the post-legislative scrutiny, which includes a preliminary assessment of how the International Tribunals (Sierra Leone) Act 2007 has worked in practice, and has set out the findings in a Command Paper (Cm 8775) to the Committee.

Copies of the Command Paper have been placed in the Libraries of both Houses and also in the Vote Office and Printed Paper Office.

Maternity Care

Tuesday 7th January 2014 Written Statements

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

On 20 December 2013 I published information about the availability of £10 million capital funding in 2013-14 to improve maternity care settings across England so both mothers and fathers, and the staff who work in the units, can benefit from a more pleasant and appropriate environment. “Improving Maternity Care Settings: Capital fund programme 2013-14: Information and criteria” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Improvements to over 100 maternity units across the country funded by the £25 million improving birthing environments capital fund in 2012-13 are making a big difference to families, with more choice and better environments where women can give birth.

This year, the funding criteria prioritise:

services where the birth rate has increased quickly or where the environment needs to adapt to local demographic population changes, or

initiatives that can make a difference to women who have mental health or substance misuse problems.

Information on how to apply for this funding was made available to maternity units in December 2013 and can be found at:

https://www.gov.uk/government/publications/improving-maternity-care-settings-applying-for-funds

The closing date for applications is 5 pm on Friday 10 January 2014.

It is important that the views and experiences of women and their families locally inform the development and design of birthing environments. The successful projects will have demonstrated involvement and support from service users and the ability to deliver the project in the current financial year.

Contingencies Fund Advance (Single Tier Pension)

Tuesday 7th January 2014 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The Department for Work and Pensions has obtained approval for an advance from the Contingencies Fund of £984,000 for the development of IT for the single tier pension before Royal Assent. This advance is necessitated by the lead in time for delivery in April 2016 which requires IT development work to begin prior to Royal Assent of the Pensions Bill.

Parliamentary approval for additional resource of £984,000 for this new service will be sought in the main estimates for the Department for Work and Pensions for 2014-15. Pending that approval, urgent expenditure estimated at £984,000 will be met by repayable cash advances from the Contingencies Fund. The repayment is expected to be made in the financial year 2014-15.

This advance will allow the single tier programme to continue to work to meet the revised timetable of April 2016 to implement the single tier new service.

House of Lords

Tuesday 7th January 2014 Lords Chamber

Tuesday, 7 January 2014.

14:30

Prayers—read by the Lord Bishop of Ripon and Leeds.

UK: EU Membership

Tuesday 7th January 2014 Lords Chamber

Question

14:36

Asked by

[Lord Dykes]

To ask Her Majesty’s Government what assessment they have made of public reaction to recent ministerial statements about United Kingdom membership of the European Union.

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)]

My Lords, I start the year by wishing all noble Lords a very happy new year. It is clear that there is wide support for the United Kingdom’s membership of a reformed European Union, both in the United Kingdom and across Europe.

[Lord Dykes (LD)]

I thank the Minister for that Answer and wish her a happy new year. Will she reassure the House that the Government will be earnestly rebutting the nationalist hysteria in some of our newspapers in this country and in UKIP about various aspects of European policy and will she constantly remind the public—and the Government too—of the enormous benefits that accrue to us from membership of the European Union?

[Baroness Warsi]

My Lords, membership of the European Union is in the United Kingdom’s interests and we will continue to make the case vigorously as we progress with our proposals for reforming the EU. My noble friend is absolutely right that there is no doubt about the huge benefits that membership of the European Union brings to us, including the 3.5 million jobs in the United Kingdom which are dependent upon trade with the EU.

[Lord Soley (Lab)]

Is the Minister aware of the enormous damage that the Government’s constant criticism of this country’s membership of the European Union is doing to Britain’s reputation within Europe? Increasingly we are seen as a semi-detached part of Europe, and that does us immense damage.

[Baroness Warsi]

There are voices across European Union countries that echo our sentiment that we need to move forward with a reformed European Union. Indeed, after the Prime Minister’s speech, we heard voices from the Netherlands, Sweden, Austria and across the European Union who, too, felt that we need to have a Europe which is much more flexible and democratically responsive to the needs of its members.

[Lord Pearson of Rannoch (UKIP)]

Surely the noble Baroness did not suggest that, were we to leave the political construct of the European Union and maintain our free trade, as of course we would because it sells us much more than we sell it, any jobs would be lost. She was not saying that, was she?

[Baroness Warsi]

I did not quite catch the question, but I can assume what the noble Lord asked. There are great benefits to our membership of the European Union.

[Baroness Knight of Collingtree (Con)]

Does my noble friend agree that, not only is there an overwhelming desire among the British people to have their say on this matter, such an opportunity gives all of us a first-rate chance to make the case for strong membership of Europe?

[Baroness Warsi]

My noble friend makes a vital point. The question about the direction in which the European Union is heading is out there and ignoring it will not make it go away. Therefore it is right that the Conservative Party’s political view is that we will negotiate a fresh settlement and then hold an in/out referendum before the end of 2017. We on these Benches feel that we need to let Britain decide, and I hope noble Lords will follow in the referendum Bill we have at the end of the week.

[Lord Tomlinson (Lab)]

Will the noble Baroness accept that, grateful as we all were for her best wishes for a happy new year, perhaps she ought to direct them to Mr Clegg and Mr Cameron with a maybe forlorn hope that they will manage to get on with each other on the important issue of Europe?

[Baroness Warsi]

I firmly hope and believe that the season of good will is not over. I can assure the noble Lord that, as far as the coalition is concerned, the season of good will is certainly there and we have a coalition that is working well.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, given the leadership role that the noble Baroness has just outlined for Britain regarding a number of countries in Europe, can she say whether that leadership will be advocating to those countries that they should undertake a referendum in the form that we are?

[Baroness Warsi]

I am really sorry—I think it must be my hearing today.

[Lord Brooke of Alverthorpe]

I will repeat the question and try to put it in simple terms. Are we as the new leaders of a grouping in Europe advocating that others should undertake a referendum in the form that we are likely to take in this country?

[Baroness Warsi]

I think the Conservative Party’s position is that this country needs to have the option to decide and that is why we feel that a referendum should be held in this country before the end of 2017.

[Baroness Falkner of Margravine (LD)]

My Lords, does my noble friend accept that the leadership of the EU, which will of course be renewed post the European elections in 2014, would be advantaged by having a senior Briton among its leadership team? We have had the noble Baroness, Lady Ashton, who we know has done such a super job. Does she agree that in seeking a British candidate on the leadership team it would be again be highly advantageous to have a female in those positions?

[Baroness Warsi]

My Lords, I am always supportive of Brits holding leadership positions in all institutions, including EU ones. Certainly, strong female leaders from this House have made a great impact in those institutions.

[Lord Liddle (Lab)]

My Lords, does the Minister think that the Government are going about it in the right way to win friends and influence people to carry through their legitimate programme of reform for the EU? In the last month we have seen Ministers of the Crown stigmatising Bulgarians and Romanians as benefit tourists, threatening, to the great annoyance of the Polish Foreign Minister, Poles with benefit changes in the UK and attempting to blame Germany for all the horrors of the First World War. Is this the right way to go about winning friends in Europe?

[Baroness Warsi]

It is important that Ministers do what they can to make sure that the best possible outcome for Britain is achieved. I think the noble Lord would accept that the first ever cut in the EU’s seven-year budget last year and protection of the UK’s rebate were two great successes. He would also accept that changes and reforms to the common fisheries policy—again Britain putting its interests on the table but doing so in the interests of all of the European Union—are progressive steps. We can therefore show that the Government can act in the interests of the United Kingdom in a way that is also beneficial to the rest of the European Union.

[Lord Kilclooney (CB)]

As a former MEP, can I ask the noble Baroness to tell us what the great benefits of membership of the European Union are, other than the single market?

[Baroness Warsi]

Of course, the single market is one of its greatest benefits, both in relation to the amount of trade—the large marketplace that the European Union presents—and the free movement of persons around the European Union. Let us not also forget that the ambitious trade treaties that the European Union has managed to negotiate with larger developing economies around the world have had great benefits for Britain.

Immigration

Tuesday 7th January 2014 Lords Chamber

Question

14:45

Asked by

[Lord Balfe]

To ask Her Majesty’s Government what preliminary assessment they have made of the recent lifting of restrictions on citizens coming to the United Kingdom from Romania and Bulgaria.

[Earl Attlee (Con)]

My Lords, it is too early to provide such an assessment. We have taken the advice of the independent Migration Advisory Committee, which concluded that it would not be sensible or helpful to policymakers to make predictions about likely volumes. The Government are doing everything they can to ensure that people who come to the UK from the EU do so for the right reasons—to work hard and to contribute to our economy and society.

[Lord Balfe (Con)]

I thank my noble friend for his reply. Does he accept that migrants from these countries, many of them highly skilled, come to Britain because the expanding, vibrant and welcoming economy gives many opportunities for self-advancement? Secondly, has he sympathy with Romanian Ministers who have pointed out that, with 866,000 persons in the UK being registered unemployed for more than a year, the UK Government might be well employed in reviewing benefit levels for the UK unemployed to a level at which they might be encouraged to apply for some of the vacancies currently being filled by the migrants?

[Earl Attlee]

My Lords, on my noble friend’s first question: yes, this is one of the benefits of the free movement of labour around the community, so if one country is doing better than another we can get a flow of labour to equalise things. On the second point, on benefit levels, it is not my responsibility to answer for the Home Office on migration issues.

[Lord Davies of Stamford (Lab)]

My Lords, amid all the unpleasantness in parts of the media over the past few weeks about Romanians and Bulgarians, has the noble Earl had the time to see the study recently published by a team from University College London, which shows that immigrants from the EU over the past 10 years have contributed far more in taxes and national insurance contributions than they have consumed in public services and in benefits, unlike the position of the native population? In other words, they have supplied us with a substantial financial and fiscal surplus, to the benefit of every taxpayer in this country. Is there not every probability that hard-working Romanians and Bulgarians will follow in the same footsteps?

[Earl Attlee]

My Lords, the answer to the noble Lord’s last question is yes. On his first question, I handled business on that particular report. I cannot remember the precise details, but I broadly agree with the noble Lord’s thrust.

[Lord Hannay of Chiswick (CB)]

Can the noble Earl confirm my recollection that all three main parties supported the seven-year transition period that expired last week for Romanians and Bulgarians, and gave it wholehearted support when this House and the other place ratified their accession treaties?

[Earl Attlee]

Again, the noble Lord is right. This is what we signed up to in the accession treaties for these two states. However, we need to stimulate a debate within the community about how best to manage transition in the future.

[Baroness Hamwee (LD)]

My Lords, is my noble friend aware, as I am, of the benefits of free movement enjoyed in the past, now and, I hope, in the future, by British citizens in the EU? Is it not a case of, “Do as you would be done by”?

[Earl Attlee]

My noble friend is absolutely right. There is two-way traffic, both to and from member states in the EU. There are great benefits from the free movement of labour.

[Lord Howell of Guildford (Con)]

My Lords, would my noble friend remind the noble Lord, Lord Hannay, that when we debated the question of former satellite countries joining the European Union, some of us were considerably less than wholehearted. In fact, we queried whether the figure of 13,000 likely new arrivals was accurate. As it turned out, of course, it was nearer a million than 13,000, so our reservations at that time were fully justified.

[Earl Attlee]

My noble friend may have been talking about the accession of Poland. A very large number of Poles came to this country. I was talking about Romania and Bulgaria, where we expect that the numbers will not be so large.

[Baroness Smith of Basildon (Lab)]

My Lords, the Minister said in his Answer that it was too early to make an assessment of the numbers. However, some of the language from the Government has been quite alarmist rhetoric. Would it not be better to look at measures to stop any workers being exploited, such as stronger and better enforcement of the national minimum wage, and also to tackle those loopholes that allow agency workers, often from overseas, to be employed at much lower rates than home-grown employees?

[Earl Attlee]

My Lords, I absolutely agree with the noble Baroness. One thing that we have done is to increase very significantly the fixed penalty for employers for not paying the minimum wage. We also need to look at a number of instances where immigrant labour is being abused—for instance, agricultural workers from eastern Europe. The noble Baroness is right; we need to keep a grip on this.

[Lord Elystan-Morgan (CB)]

My Lords, whatever reservations we might or might not have had concerning the expansion of the European Union, will Her Majesty’s Government give an undertaking that unless and until we extricate ourselves from the Union, we will loyally and honourably accept all our legal obligations in respect of it?

[Earl Attlee]

My Lords, I assure the House that Her Majesty’s Government do have a policy of adhering to treaty obligations. That is why we are very happy with the accession of Romania and Bulgaria to the EU, and with the free movement of those peoples, from 1 January.

[Lord Campbell-Savours (Lab)]

My Lords—

[Lord Forsyth of Drumlean (Con)]

My Lords—

[The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)]

My Lords, if we can be quick, I think that it is this side.

[Lord Forsyth of Drumlean]

I am grateful to the noble Lord. Am I having an aberration? The opposition Front Bench complained about loopholes introduced by the agency workers scheme. Will my noble friend confirm that the scheme was introduced by the previous Labour Government?

[Earl Attlee]

My Lords, the noble Lord is right—but, equally, we must close the loopholes and avoid the abuse of low-cost labour from eastern Europe.

[Lord Campbell-Savours]

My Lords, if what the noble Lord, Lord Hannay, said about the seven-year accession arrangements was correct, why do Mr Cameron and government Ministers go on television and accuse the previous Labour Government of acting irresponsibly?

[Earl Attlee]

My Lords, it is important to make sure that we have transitional arrangements for future accessions that work properly and do not have undesirable effects, especially when the acceding state has a lower GDP per capita than the rest of the community.

Families: Troubled Families

Tuesday 7th January 2014 Lords Chamber

Question

14:52

Asked by

[Lord Horam]

To ask Her Majesty’s Government what progress is being made with the Troubled Families Programme.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)]

My Lords, this Government’s ambition to turn around the lives of 120,000 troubled families is on track. In November, 18 months into the three- year programme, we announced that more than half the families are being worked with and more than 22,000 have been turned around. This means that children are back in school, levels of youth crime and anti-social behaviour have been significantly reduced, and more than 1,400 adults from some of England’s hardest-to-help households are now in continuous work.

[Lord Horam (Con)]

That is very good news from a very important social programme. Can my noble friend tell me whether she is getting enough mentors on this programme? These are one-to-one relationships—that is the programme’s strength—and we need very good-quality mentors to do that. Secondly, is she getting enough co-operation from local authorities, which are in the driving seat on this?

[Baroness Stowell of Beeston]

My Lords, I am grateful to my noble friend for raising this important matter. As noble Lords have just heard me say, we define the term “troubled families” by using specific criteria. Often that does not give the true picture of just how entrenched those families are in terms of their dependency and how some of them have to deal with violence, drugs and crime in intergenerational families. In the past, lots of agencies have worked with them but got nowhere fast. On the point my noble friend raises, many social workers want to come forward and be the key worker in charge of working with those families. There has been no problem whatever with recruiting for that, and the local authorities have been very proactive in moving forward with this programme. As regards turning those families around, this programme is about reducing their dependency on the state and giving them, and especially their children, the chance of a decent life.

[Lord Howarth of Newport (Lab)]

My Lords, the Troubled Families programme, as it is, is a good programme. But how would it help troubled families to turn their lives around positively if the Government were to cut £25 billion more from public expenditure, of which £12 billion would come from the social security budget?

[Baroness Stowell of Beeston]

My Lords, when this Government came into office they were committed to the reform of our welfare system, and are, indeed, reforming it. We are also cutting back on some of those levels of payments which we considered unfair. As the noble Lord has just heard me say, we are also helping the most desperate of families so that they, too, have a chance of getting on in life. This Government’s approach is to make sure that we leave no one behind, and that is what we are doing.

[Lord German (LD)]

My Lords, does my noble friend agree that the commitment that we have heard about benefit spend in future is a commitment for a future Government, not for this Government? Does she also agree that the Troubled Families programme, which is doing so well at the moment, acts as a suitable counterbalance to the sanctions regime, which comes from the benefits structure? But of course two separate government departments are involved there. Can she tell the House what arrangements there are for the linkages between local authorities and the DCLG and the DWP and Jobcentre Plus and all the mechanisms of government in that department?

[Baroness Stowell of Beeston]

The DCLG, the DWP and other departments across Whitehall are working together in an unprecedented manner on the Troubled Families programme. At local authority level, there is fantastic co-operation between local authorities and the DWP. We now have 152 Jobcentre Plus staff plugged in as part of the Troubled Families programme, directly concerned with securing work for the adults in these families.

[Baroness Howarth of Breckland (CB)]

My Lords, while accepting the value of the Troubled Families programme, does the Minister not accept that it is really important to get in early when working with families at a preventive level, and that hard-pressed social workers in local authorities find it increasingly difficult to do the work that would stop families falling into the sort of chaos that takes them into the Troubled Families programme?

[Baroness Stowell of Beeston]

In this phase of the programme, with regard to the 120,000 families that we are working with and those that we have identified, a lot of problems stem back to earlier generations. Their problems are so entrenched that they go beyond the immediate family that we are focusing on. We have committed to extending this programme; new money is being committed for the next spending round. When we extend the programme, what we have planned to happen, and expect to happen, is to intervene with those families at an earlier stage, to prevent exactly what the noble Baroness has described.

[The Lord Bishop of St Albans]

My Lords, does the noble Baroness agree that there is a considerable body of research and expertise pointing to the vital importance of relationship support in strengthening families? As there are no specific references to family relationships or positive family dynamics in the progress report, will she ask the Troubled Families programme to prioritise such support in the next phase of its work?

[Baroness Stowell of Beeston]

I understand the point that the right reverend Prelate makes. I can certainly assure him that, in the approach being taken by the programme, the key worker who works with every family is there to address all the fundamental problems that the family experiences—and, if that means relationship issues, that is what they will support that family on.

[Lord McKenzie of Luton (Lab)]

My Lords, on the question of departments working together, the Minister will be aware of a parallel DWP programme focused on families with multiple problems. Both programmes fund improvements in employability, crime and anti-social behaviour, among a similar group of people, and both fund similar activities. However, there were separate assessments of need, separate business cases and the programmes were launched within four months of each other without any clear data to show which programme was best suited to addressing which issue. The NAO has pointed out that that led to poor performance and loss of value for money. What are the Government going to do about that?

[Baroness Stowell of Beeston]

The recent NAO report, as with all NAO reports, is a useful and constructive contribution to how we can extend and build on the work that we are doing. However, as the noble Lord has heard me explain, one measure that we have introduced is to use Jobcentre Plus staff in this programme to address specifically the issue of work, and there is great co-operation between the two departments.

South Sudan

Tuesday 7th January 2014 Lords Chamber

Question

15:00

Asked by

[Baroness Cox]

To ask Her Majesty’s Government what action they are taking in response to recent developments in South Sudan.

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)]

My Lords, the UK is deeply concerned by the terrible violence in South Sudan that began on 15 December 2013. The UK has supported political talks between representatives of President Kiir and former Vice-President Machar. We have provided additional humanitarian assistance on top of our existing commitments to South Sudan and consular support to British nationals.

[Baroness Cox (CB)]

My Lords, I thank the Minister for her comprehensive reply. Does she agree that one of the most disturbing aspects of this tragic situation is Riek Machar’s delaying the peace talks, thereby prolonging the fighting that has killed more than 1,000 people and displaced more than 200,000, who are now living in life-threatening conditions; and that he has a disturbing track record of changing allegiance and of brutality, including responsibility for one of the worst massacres of the previous war? Will Her Majesty’s Government provide all possible support for the African Union and IGAD to promote a political solution as a matter of urgency and press Riek Machar to join President Salva Kiir’s serious commitment to a ceasefire?

[Baroness Warsi]

My Lords, unfortunately, the fighting continues in South Sudan. As we are in the middle of sensitive negotiations on the substantive issues between the two parties, rather than procedural matters, it would be the wrong time to try to attribute blame. It is clear that both sides have a case to answer for the violence that we have seen over the past few weeks. The UK is engaged in encouraging participation in the peace negotiations led by the Intergovernmental Authority on Development, which is leading the mediation efforts.

[Lord Chidgey (LD)]

My Lords, I think it is generally accepted that the present conflict arises from the power struggle between Riek Machar and Salva Kiir, with scant regard for some 200,000 displaced Sudanese citizens and more than 1,000 killed so far, as the noble Baroness pointed out. What is the Government’s reaction to the call for urgent additional humanitarian aid, not just bringing forward an existing programme but additional aid to help these people in such a desperate situation? With regard to the negotiations that have begun in Addis Ababa, what discussions are the Government, as a member of the CPA troika, having with like-minded parties: for example, Wang Yi, China’s Foreign Minister; Omar al-Bashir, the President of Sudan; and the chair of the AU, Madame Zuma? What discussions are they having with the EU’s representatives to the African Union?

[Baroness Warsi]

On the humanitarian question, I assure my noble friend that, as regards the £60 million already allocated to South Sudan, the relevant programmes continue. We have allocated an additional £12.5 million specifically to address the current humanitarian emergency. In terms of the support for the political process, he is, of course, familiar with the troika partners. We, the US and Norway have been involved over a number of years in taking forward work in relation to South Sudan. I assure him that the Foreign Secretary has been in touch with the Sudanese Foreign Minister, the Ugandan Foreign Minister, the Ethiopian Prime Minister, the Ugandan President and, indeed, with Secretary Kerry on the negotiations. The main challenge was to get representatives of both sides to the table. That has now been achieved. They have met in Addis Ababa from 2 January and, as of today, they have started substantive discussions.

[Lord Triesman (Lab)]

My Lords, this is probably one of the most deeply depressing developments experienced by those of us who have spent time in Juba trying to deal with peace, health and food security issues with President Salva Kiir and his original team. The fact that negotiations are taking place in Addis Ababa is, of course, welcome, if the participants take the process seriously. The United Nations Security Council passing a resolution demanding a ceasefire while the negotiations took place would at least indicate the world’s abhorrence for this violent outbreak. I do not believe that it would impede the African Union’s work at all. Will the United Kingdom and its friends sponsor such a resolution immediately?

[Baroness Warsi]

The Foreign Secretary has issued a number of statements in which he has called for the violence to stop. As the noble Lord is aware, the United Nations Security Council resolution, which I think was passed on Christmas Eve, was specifically intended to ensure that further troops were put on the ground quickly to try to stop the situation deteriorating. They also strengthened the existing UN mission in South Sudan to support its humanitarian work so that the human rights abuses that were occurring were properly documented to ensure that responsibility follows these acts. The negotiations between the representatives of the two parties are ongoing. We have done a huge amount of work in the background but also in leading these negotiations. The Foreign Office’s political director, Simon Gass, was there throughout the Christmas period, working with the US and his other counterparts. If it is felt that a further UN Security Council resolution is required over and above the statement issued on 30 December, I will certainly take the noble Lord’s views back.

[Lord Alton of Liverpool (CB)]

My Lords, in her written reply to me on 3 January, the Minister said that the unanimous adoption of United Nations Security Council Resolution 2132 authorised a significant increase in the number of troops in the UNMISS force in South Sudan. Can she tell us what the numbers actually are and whether she believes that they will be up to the task of dealing with the situation, which, as we have heard, has led to a displacement of 200,000 people? Does she not also agree that there is a real danger that these events in South Sudan will distract the world from looking at what is happing just over the border in Blue Nile, South Kordofan and Darfur, where the campaign of aerial bombardment by Khartoum goes on as we meet?

[Baroness Warsi]

The noble Lord, as always, makes an informed and important point. In relation to the UN Security Council resolution, a further five battalions were committed, which amounts to about 5,500 troops. Three police units were specifically granted, which amounts to about 480 personnel—those are the increased numbers at this stage. The noble Lord makes an important point about regional challenges, but one of the positive features of this current tragedy is how, for example, Ethiopia, Uganda and even Sudan have acted in a much more responsible way. There has certainly been a suggestion that there could be some joint working between Sudan and South Sudan, maybe in relation to keeping the oil flows going.

Water Bill

Tuesday 7th January 2014 Lords Chamber

First Reading

15:07

The Bill was brought from the Commons, read a first time and ordered to be printed.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Tuesday 7th January 2014 Lords Chamber

Order of Consideration Motion

15:07

Moved by

[Lord Wallace of Tankerness]

That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 and 2, Schedule 1, Clause 3, Schedule 2, Clauses 4 to 25, Clauses 36 to 39, Clause 26, Schedule 3, Clauses 27 to 32, Schedule 4, Clauses 33 to 35, Clauses 40 to 44.

Motion agreed.

Social Care Portability Bill [HL]

Tuesday 7th January 2014 Lords Chamber

Motion to Withdraw

15:08

Moved by

[Baroness Campbell of Surbiton]

That the Bill be withdrawn.

[Baroness Campbell of Surbiton (CB)]

My Lords, the contents of the Bill will now be largely achieved.

Motion agreed.

Children and Families Bill

Tuesday 7th January 2014 Lords Chamber

Report (3rd Day)

15:08

Clause 27: Duty to keep education and care provision under review

Amendment 25E

Moved by

[Baroness Howe of Idlicote]

25E: Clause 27, page 23, line 3, at end insert—
“(2A) If the educational and social care provision referred to in subsection (1)(a) and (b) is deemed insufficient to meet the needs of children and young people under subsection (2), a local authority must—
(a) publish these findings; (b) involve those consulted under subsection (3) in producing an action plan to revise the educational and social care provision referred to in subsection (1)(a) and (b);(c) review and report on progress against the action plan; and(d) revise the local offer accordingly.(2B) Regulations shall make provision about—
(a) criteria to be used by local authorities in assessing whether the educational and social care provision referred to in subsection (1)(a) and (b) is sufficient under subsection (2);(b) the information to be included in an authority’s action plan;(c) how an authority is to involve children, young people and families in the production of, and assessment of progress against, its action plan;(d) imposing time limits on implementing the revision of the educational and social care provision referred to in subsection (1)(a) and (b) that has been deemed insufficient under subsection (2A).”

[Baroness Howe of Idlicote (CB)]

My Lords, I start by re-emphasising a point that I made in Committee: that accountability is the most important aspect of the local offer, an offer that will be relied on by 1.5 million children with special educational needs. Without strong accountability mechanisms, families will have no way of ensuring that the services they need are available and it is likely that parents will continue to need to push for a statement or an EHC plan to get the support that they and their child need.

Clause 30 states that a local authority must publish comments from children with SEN and their parents about its local offer, as well as the authority’s response to those comments. I am pleased that the Government have strengthened this further with Amendment 33C, requiring local authorities to publish what action they intend to take in response to comments from parents about the local offer. However, I and, indeed, the Special Educational Consortium, which is backing this amendment, have serious concerns that the Government’s Amendment 33C has been placed in the wrong clause and will therefore fail to have its desired effect. Clause 30 refers to the local offer only as a source of information and advice and not to the provision contained in the offer, and therefore the impact of the Government’s very welcome amendment will be felt only in terms of the quality of information and advice. It is Clause 27, relating to reviewing education and care provision, that must be amended. Will the Government therefore commit to moving Amendment 33C to Clause 27 to ensure that improvements to local services are made? If they commit to doing so, this will make a huge difference and go a long way to reducing the battles that parents face. However, I fear that it will still not go far enough in ensuring that local authorities are held to account and that essential improvements to local services are made.

Amendment 25E to Clause 27 would require a local authority, after publishing comments on the local offer, to involve parents and young people in producing an action plan to revise the education and care provision outlined in the local offer, review and report on progress against its action plan and then revise the local offer accordingly, ensuring that local support was sufficient to meet local needs. This would ensure that local authorities and parents, along with other parties including school governors and children’s centres, worked together at the earliest possible stage to ensure that local provision was the best it could be, bringing about exactly the cultural change that the Government want to see. This is a vital addition to the Bill.

My key question to the Government is: exactly who will check that local authorities do what they promise to do when publishing their response and the actions they intend to take following parents’ comments about the local offer? My amendment would ensure that local authorities not only work with parents and other interested parties to develop an action plan to improve service provision in the local offer but review and report on progress against their action plans. This is exactly the robust accountability measure that will ensure that local support is responsive to local needs—something that the Government have said time and again they wish to see. At the very least, can the Government confirm that the code of practice will include further information relating to the action that local authorities will take in response to parents’ comments about the local offer so that parents and other interested parties, listed in Clause 27(3), will be involved in drawing up an action plan to improve the local offer along with the necessary mechanisms for reviewing and reporting on progress against such an action plan? I beg to move.

15:15

[Baroness Jones of Whitchurch (Lab)]

My Lords, I shall speak to Amendments 30 and 31 standing in my name and in the name of my noble friend Lady Hughes of Stretford and also to Amendment 33D standing in the name of the noble Lord, Lord Low, to which my noble friend Lady Hughes of Stretford has added her name. We also add our support to the amendment proposed by the noble Baroness, Lady Howe, and to the arguments she eloquently made in proposing it. There is a compelling case for local authorities to be expected to take action where education and care provision is judged to be insufficient and it is important that we have adequate means to address that.

Our amendments relate to Clause 30, which introduces the concept of the local offer and places a duty on local authorities to publish the local offer for children and young people with special educational needs, to keep it under review and to revise it periodically. Obviously, we welcome the principle of the local offer, as does most of the sector, but our concern is to make the local offer tangible, accessible and responsive. One concern which our amendments seek to address is that the wording of subsection (1)(a) requires the local authority to set out in the local offer only what it “expects to be available”. We believe that this wording is ambiguous and could be used by local authorities to duck out of their responsibilities to deliver a quality package of services.

Parents, children and young people have expectations that the local offer will be an improvement on what has gone before, but, understandably, they want a more formal understanding with the local authority about the service that they can rely on being provided. Many parents have spent their lives fighting for basic support for their children and are naturally suspicious of wish lists. We believe that our amendments to replace “expects to be available” with “which is available” will give those parents the added guarantees they desperately need.

When this was discussed in Grand Committee the Minister said:

“The local offer should enable local people to see what services are available, how they can be accessed, who provides them and where to go if things do not work out”.—[Official Report, 30/10/13; col. GC 612.]

We agree with that statement. That is what we are all trying to achieve and we believe that our wording is a better reflection of this aspiration than the current wording in the Bill. In Grand Committee the Minister also made the point that families need to be informed about,

“what provision the local authority expects to become available in the near future, possibly from new innovative practices”.—[Official Report, 30/10/13; col. GC 613.]

We very much welcome a culture of innovation in this sector and families will, of course, be interested in being kept informed of newly developing services. This should all be part of a greater commitment to information sharing and dialogue between families and the local authority. However, information about innovation and good practice is very different from the function of the local offer, which should be about what is available to families and what they can access now with some degree of certainty.

The Minister also drew our attention to the draft code of practice, where more detail is provided. Again, it is useful to have this additional information for parents. However, it does not answer our central concern about the status of the local offer and the extent to which it can be relied on. In fact, while the draft code of practice contains good supplementary guidance, it continues to use the phrase that the local authority should provide information about services which it “expects to be available”. Also, as we have debated before, it is important to have the fundamental principles set out in the Bill and we believe that this is a key feature which will give parents, children and young people confidence in services for the future. This is more than an argument about semantics. Our amendment will help to make the local offer a real, living commitment that will help to make the new proposals a success.

My noble friend Lady Hughes of Stretford has also added her name to Amendment 33D standing in the name of the noble Lord, Lord Low, who, I am sure, will speak on it shortly. The amendment seeks to give families confidence in the quality of the local offer by requiring the Secretary of State to lay regulations specifying the standards and quality of education, health and social care provision which local authorities must meet. These regulations would need to be approved by both Houses. In addition, it would require the Secretary of State to issue guidance on how to meet the regulations and publish information on the regulations on the department’s website. The amendment addresses the continuing concern in the sector that services across the UK will be patchy and that a postcode lottery of services will develop. Without the amendment, families will be at the mercy of local authority budgets, with all the uncertainty of provision that already occurs as a result of budget cuts, and so what starts out as a promising new regime of integrated services may quickly descend into a fight to retain any kind of minimum provision. There is the added challenge that there is little incentive for local authorities to develop high-quality provision as it will simply attract clients from other areas, letting the poorer providers off the hook.

Our amendment also addresses the knowledge gap that arises from Clause 21(1)(a), which defines SEN provision in a local area as being relative to all mainstream schools in England. However, without minimum national standards, all a local authority can do is define the offer relative to its own local provision. When we debated this issue in Grand Committee we explored whether setting minimum standards of provision might be the answer, but we accept the limitations of this solution, which is the danger that minimum standards might become the norm. Therefore, our new amendment seeks to address this problem in a different way, allowing scope for services to be different around the UK to meet local and individual needs but nevertheless requiring that they meet overall quality standard benchmarks.

These standards could provide the framework for the Ofsted and CQC inspections currently being considered by the Government and would build on the recommendations of the Ofsted study into how this can be delivered most effectively which is currently taking place. Perhaps the Minister can update us on progress in developing this suggested framework of standards. They would also be a measure against which parents could judge the acceptability of local services if they wish to challenge the provision or ultimately appeal. Therefore, this amendment is the final piece of the jigsaw which will give parents confidence in the new provision and guarantee the success of the new regime, the principles of which, as I have said, we all support.

Finally, I would like to say a few words on the government amendment in this group. In Grand Committee we raised the concern, shared by many, that the obligation on local authorities to publish comments on the local offer from parents, children and young people did not sufficiently hold them to account or require them to be responsive to the views expressed. Giving a more powerful voice to those, often isolated, individuals struggling to access services ought to be at the heart of these improvements. That is why we welcome the government amendment, which would require local authorities to publish the action they intend to take in response to the comments received. However, picking up on the theme of the amendment of the noble Baroness, Lady Howe, there is a further stage to be addressed if we are serious about making change, which is that the local authority should also be required to work with those who have been consulted to produce an action plan to address any identified failings.

It would be helpful if the Minister could explain how this additional challenge will be addressed. It may be that the requirements could be included in the regulations, but we need to be assured before we make a final decision today that the Government are addressing this issue and the concerns raised by the noble Baroness, Lady Howe.

[Lord Low of Dalston (CB)]

My Lords, I support the amendment of my noble friend Lady Howe.

I welcome the Government’s Amendment 33C, which would require local authorities to publish what action they intend to take following parents’ comments about the local offer. However, I am keen to know from the Minister what mechanisms will be in place to ensure that parents have a key role in shaping what this action to be taken by local authorities will be. The Government have consistently and rightly stated that the local offer should be responsive to local needs. Unless the Government accept the amendment of the noble Baroness, Lady Howe, to ensure that parents and young people are joint partners in developing an action plan to improve local provision, is there not a danger that the local offer will be responsive only to the needs of local authorities and not local families? While welcoming the Government’s amendment and supporting the amendment of the noble Baroness, Lady Howe, I would just ask the Minister those two questions. The second of them is really about how the Minister proposes to respond to the points that the noble Baroness, Lady Howe, has made.

I will speak mainly to my own amendment in this group, Amendment 33D, which would require the Secretary of State to make,

“regulations setting out the standards and quality of the special educational provision, health care provision and social care provision which local authorities must meet in their local offer … issue guidance to local authorities on how to meet these regulations, and … publish information on these regulations accessible to the families of children and young people with special educational needs”.

I will speak fairly briefly because we had two long debates in Grand Committee and the noble Baroness, Lady Jones of Whitchurch, has just spoken very eloquently to this amendment. I am very grateful to her for that—she made a very good argument for the case being put forward by the amendment.

As I said, we had a couple of very good debates in Grand Committee on the provisions of the Bill relating to the local offer. I moved an amendment which sparked a discussion about the kind of framework which needed to be put in place to regulate the local offers that local authorities made, to ensure that they met certain standards of consistency. The amendment took its cue from the animating principle underlying much of the legislation emanating from the Support and Aspiration Green Paper, which was that parents of children with special educational needs needed to be freed from the tangles of bureaucracy that were making it so difficult to access the services which could best meet their children’s needs. The amendment was couched in terms of the minimum standards which local authorities must meet in their local offers. The flaw in such an amendment was quickly pointed out: it could all too easily lead to local authorities simply working to the bare minimum and usher in a race to the bottom. At the same time, it provoked a bit of reaction from noble Lords who had a history in local government, who were at pains to point to all the good work local authorities do, the undesirability of constraining their room for manoeuvre too much and the need to leave them alone to get on with things. I was at pains to be conciliatory and to acknowledge that in my reply but, on reflection, I think I may have gone a bit too far.

The underlying thrust behind this legislation is the need to free families from the bureaucracy which ties them in knots and to redress the balance between local authorities and families attempting to assert their rights. I remember the noble Baroness, Lady Morris of Yardley, making the point very persuasively that, although one did not want to hamstring local authorities and unduly constrain them in what they can do, it was not wise to set up a completely new system like this without exercising a measure of central oversight. That is a very familiar distribution of responsibilities between central and local government and the education service.

My amendment is not unduly prescriptive in dictating to the Secretary of State what he must do; it merely requires that he make regulations setting out, as I have said, the standards and quality of the special educational provision, health care provision and social care provision which local authorities must meet in their local offer, issue guidance to local authorities on how to comply with these regulations and publish information on the regulations accessible to the families of children and young people with special educational needs. This is a very moderate obligation to lay on the Secretary of State and, depending on what the Minister says, I reserve the right to seek the opinion of the House when my amendment comes up as we go through the Bill.

15:30

[Baroness Eaton (Con)]

My Lords, I can understand why the noble Lord, Lord Low, tabled Amendment 33D, which would regulate the special education provision to be provided by local authorities. That sounds sensible and reassuring. However, the practicalities of regulating provision in such a way would, despite what has been said in the contributions from noble Lords, cause unnecessary restrictions on provision and prevent innovation and creativity that could bring about new and supportive services.

The duties on local authorities and other bodies to assess needs and secure provision are already set out elsewhere in the Bill. There are already some excellent examples of local offers—for example the pathfinders in North Yorkshire that worked with parents and young people to produce an interactive map and colour-coded diagram, including a version for children and young people, showing precisely what the local offer would be.

Funding allocated to councils by the Government for education, including SEN provision, can vary greatly, even for similar or neighbouring local authorities. That is one reason why provision may vary between areas. We know that the new national funding formula will not be introduced until after the next election. SEN provision also varies from one local authority to another because of the nature of the population. There are higher levels of need in some areas, which require the local authority to provide more specialist services than in others areas that may have no such requirements or quite different needs.

Defining in law a minimum level of provision may actually mean that resources in some authorities are diverted from other areas of special need simply to meet a legal requirement. Health needs also differ between local areas. That is reflected in the local joint strategic needs assessment, which is based on the needs of the local population. Surely the key purpose of the local SEN offer should remain as a source of information to parents and young people, developed by local authorities working with them to reflect their choices and preferences.

[Lord Storey (LD)]

My Lords, I agree with the noble Baroness, Lady Jones, that parents have fought for years to get resources and what some might call justice for children with special educational needs. That is why the Bill is so important: it is a progressive piece of legislation that we can all be proud of. It will mean that, for the first time, local authorities have to spell out clearly and precisely what is available in their area and how that can be accessed. As we know, people with special educational needs will, for the first time, have a plan that joins up health, education and social care.

The giveaway is in the title: “local offer”. It is not a national offer but a local one. I suppose the Government could have said, “Nationally, we have decided that this is what you will do”, but I am quite sure that there would have been screams from local authorities that this was national government again dictating exactly what should happen. The local offer is important.

I was grateful for the comments of the noble Lord, Lord Low, in Committee but I still have grave concerns about creating a minimum requirement. We have seen what happened in care for the elderly: if you have a minimum requirement, councils under financial pressures jettison what they do not need to provide. If you have a minimum offer in terms of special educational needs, you will find that those authorities that my noble friend Lady Eaton so eloquently described, the ones that are progressive and look at new ideas, will say, “Well, if there are some savings to be made, we do not need to do that”. So I am not in favour of a minimum offer.

I am in favour of what the Government have reflected on and come back to at Report with Amendment 33C. Let us never underestimate the power of local people. If the local offer is not meeting the local requirement, you can bet that local people will say that they want something extra. Cases will make that happen. That is why the government amendment is so important. Let us celebrate where we are at so far, because it is important for children with special educational needs.

[Baroness Morris of Yardley (Lab)]

My Lords, I support the amendments and, in particular, will comment on Amendments 30, 31, and 33D.

The amendments tabled by my noble friend Lady Jones, which deal with the “expects to be” versus “which is” dilemma, just make sense, as I do not think that anyone here would not want parents to know what is being offered rather than what might be offered. The Government’s concern appears to be that something innovative might happen during the year that could be added to the offer, but the Minister might reflect that, if the offer was a living document so that it could be updated as an innovation came through, was proven to work, accepted as best practice and added to the local provision, in a digital age it would not be difficult to update the offer. The notion of “which is” gives far more certainty to users of the service than the words “expect to be”. In that respect, I very much support those amendments.

I just want to comment on the amendment of the noble Lord, Lord Low. I see both sides of this argument. We want local authorities to be free to innovate, to reach for the stars and to be the best they can, and we do not want the local offer in every local authority area to look exactly the same regardless of where you are in the country. Neither do we want to give permission to local authorities to go for a basic minimum standard. I accept the concerns laid out by the noble Baroness, Lady Eaton, and the noble Lord, Lord Storey, but we are still left with a problem.

The code of practice talks a lot about the quantity that should be in the local offer. There is a whole list of things that the code of practice guarantees will be there. What is missing from the whole debate is something that guarantees quality. Amendment 33D attempts to do that, and I want the Minister to respond to it. None of us wants poor quality, and I do not think that we would be in politics and would certainly not be legislators if we did not know that we have to ensure quality. It does not happen by itself or through a free-for-all, and it will not happen if we just leave it to local authorities to do their best. We want more than that. Minimum standards are not in the amendment. I do not want to fetter those local authorities who will provide very well; I want to protect those people who live in areas where the local authority does not do very well. I am concerned about how we protect people against poor provision falling below those minimum standards.

Normally, government takes one of three actions. It leaves it to the market—the noble Lord, Lord Storey, mentioned just now that if people do not like it, they will complain and changes will be made. I do not think that that will happen with the local offer. The only way that the market usually works is if people are free to go elsewhere. Then the poor provision that they did not want withers on the vine, vanishes, closes down and gets off the playing field. That is not what we want here. We do not want a local offer to be squeezed out of the market so that people have to go over the local authority borders. I cannot see how the market works as a regulator of standards for the local offer.

Secondly, we inspect. That is another way to guarantee quality. I would be grateful if the Minister would give us an update on where the department is with Ofsted inspecting the local offer. In Committee, he undertook to write to me, and I must admit that I am not sure whether that letter has been sent; I have not seen it. I would accept it if the Government have decided to inspect the local offer to make sure that people are protected against poor provision.

If they do not want to do that, the next action is regulation. Amendment 33D, as tabled by the noble Lord, Lord Low, would put in regulation to protect people against poor standards. It really does not matter whether it is inspection or regulation—but I do not want it to be the market, which I think is where the Government are headed with this, because that will not work. We have to get the balance right between protecting people in areas where a local authority does not deliver the goods and leaving local authorities that are good, free to excel.

This is not just about safeguarding against low-quality provision: the Government should, equally, be incentivising innovation and high standards. If you only dampen down by inspecting, you will not get the high standards and innovation to which the noble Baroness, Lady Eaton, referred. We have had so many decades of experience in the delivery of public services, and there are good ways of incentivising innovation, rewarding high standards and making sure that those high standards are spread to include everyone else. That is my ideal— to do both. I think that we will see the good quality provision in the local offer to which the noble Baroness, Lady Eaton, referred, and that we will find ways of making sure that other local authorities know about it. Equally, for balance, we need something to set a basic standard below which local authorities’ local offer should not fall so that as regulators and legislators we can say that everybody, no matter where they live, is protected from a poor standard of provision. In that respect, I very much support the amendments that we are considering in this group.

[Baroness Wilkins (Lab)]

My Lords, I, too, support all the amendments in this group. If the Bill really is to improve the position of families of children with SEN in their struggle to give their children the best start in life then it must provide some certainty. Assurances of the provision which a local authority expects to be available are useless if they turn out to be just warm words. Parents need to know what is available, and families must know that there is a benchmark below which standards are not allowed to fall.

Let us not forget that the vast majority of people who find themselves as the parent of a disabled child will have no previous knowledge of the world of special educational need. They will not know what services that their child might need should be available and will have no knowledge of the structure of provision or the standards that they should expect. They will have to learn all of this at a time of great stress and amid all the other demands of family and work life. On Amendment 25E, I particularly support the comments of the noble Baroness, Lady Howe, on the importance of accountability regarding the local offer. As the Education Select Committee said, the importance of the local offer cannot be overestimated.

Given that Clause 30 relates to the local offer as an information offer and not to the actual provision contained in it, can the Minister explain exactly how local authorities will publish their response and what action they intend to take following parents’ comments about the local offer? How will that actually lead to improvements to the services being made? Unless the Minister agrees to move the Government’s Amendment 33C to Clause 27, what do the Government expect local authorities to do with comments from parents about service provision? Is there anything in the Bill to ensure that these comments will be fed into the review of service provision referred to in Clause 27? Moreover, will local authorities clearly explain to parents that they can comment on the local offer only as a source of information and not the provision itself?

As the noble Baroness, Lady Howe, stated, the local offer will be relied upon by 1.4 million children with SEN, namely those without a statement or an EHC plan. Can the Minister therefore clarify, if the child does not have a plan and a local authority publishes a response and follow-up action which was unsatisfactory to parents, are there any further mechanisms in place to ensure that parents’ concerns are addressed?

By the Government’s own figures, the total cost to the taxpayer of parents taking cases to an SEN tribunal is more than £30 million a year. Given this substantial cost, is it not imperative that disputes between parents and local authorities are resolved at the earliest possible opportunity? Amendment 25E, which requires parents, local authorities and others to work together and develop an action plan, would enable this to happen, and I urge the Government to accept it.

15:45

[Baroness Perry of Southwark (Con)]

My Lords, I can imagine myself as a parent of a child with special educational needs; I have listened to the debate trying to put myself into that person’s shoes. I can imagine taking my child along to discuss with the local education authority what provision could be made and being told, “I am sorry that you may want this, that and the other, and your child may have that particular set of needs, but we’re meeting the minimum standards set down. They do not happen to suit your child, but I’m afraid they are all that we can afford”.

My noble friends Lady Eaton and Lord Storey passionately described the dangers of minimum standards and the stifling of any innovation or adaptability to the local needs of parents and their children. They also described the danger of saying, when money is tight, “We are sorry we can’t help those other parents and children, but we are meeting the minimum standards. That is the regulation, so that is all there is”. You do not encourage response to people’s needs or collaboration between a local authority and the parents and children in its region by regulation and by national minimum standards. You encourage it by leaving local authorities and parents free to talk together.

I note that the Bill carefully states that the comments received from parents and from the local community must be published every year. That is a strong system of accountability, and is much better than trotting out a bit of inspection from time to time and issuing that report. To coin a phrase, it seems a triple lock if parents’ comments about the provision that they receive from the local education authority, with their own deep and often tragic experience of children with special educational needs, must be published in a form that all can see. Local authorities will be required to respond to local needs, and it gets us away from this dreadful idea: “A minimum standard is all that we can afford and therefore, even if it does not suit your child, that is all that you will get”.

[Baroness Sharp of Guildford (LD)]

My Lords, I return to the introduction that the noble Baroness, Lady Howe, gave to Amendment 25E and the issue of accountability. Government Amendment 33C is good so far as it goes, but it puts the onus on parents and young people using the service to police the sufficiency of the local offer. Perhaps my noble friend the Minister could correct me if I were wrong, but so far as I know there is no obligation on local authorities to publish the findings of their own reviews, which, as was emphasised by the noble Baroness, Lady Howe, they are obliged to make under Clause 27. Therefore, there is not the obligation to proactively improve their services that might arise from looking at whether their own reviews were sufficient, and acting on that. That picks up the point made by the noble Baroness, Lady Morris, that there are ways and means whereby innovation comes organically and internally. Equally, she made the point that for most parents there is not the opportunity to move authorities: whether they like it or no, this is the authority that they have to work with.

Again, I pick up the point made by the noble Baroness, Lady Howe, that, when we are talking about special educational needs, we do not mean only the few who have statements and will have the EHC plans now—about 3% of pupils. Something like 15% of pupils are regarded as having special educational needs and are treated under school action and school action plus.

It is now the schools’ responsibility to meet the needs of these pupils. We shall be talking later about the training that is necessary for SENCOs, and so forth. Most schools rely very much indeed on local educational specialists being available. One of the problems with the situation at the moment is that if there is no follow-up on whether or not there is a sufficiency of provision, there is a great danger that local authorities, whose finances, as we know, are being squeezed at present, will not find it necessary to provide outside the needs of those who actually have EHC plans, and that specialists in language, communication and behaviour will not be available to schools for them to be able to recruit to help them with the problems that they meet.

So I am somewhat concerned. As I say, the government amendment is good so far as it goes, but it is unfortunate that it does not follow through to requiring action on the reviews that the local authorities themselves have to make of their own provision.

[Baroness Howarth of Breckland (CB)]

My Lords, I support the noble Baroness, Lady Sharp, in what she was saying. I was rather taken by the government amendment because of its involvement of parents, children and young people themselves, but I could not see the follow-through. What we are looking for is an interrelationship between the legislation, the code and how it is applied and then how that is reported back, so that you have a virtuous circle and you can measure against what you are attempting to do.

In order to do that, you have to have absolute transparency. That is why I am also concerned about the phrase,

“it expects to be available”.

Unless families know with absolute clarity what is available and have some idea of what the local authority might be planning to make available—that might be what the “expects” is trying to achieve—how can they be engaged in a debate with the local authority in some sort of forum to move things forward in an innovative way? Being involved in two charities that work nationally, I know how very different the provision is across the country, but I still have grave anxieties about setting minimum standards, having also worked in a local authority that was strapped for cash in the 1970s, where we looked for any area of legislation where we could move back and save money. At this time, as I have said several times in this debate, we have to be absolutely open with families about what is and is not available. It is only if they are absolutely clear about that within the constraints of the finances that are available that they will be able to campaign, if you like, for an alternative that would better meet their needs. I encourage the Minister to look again at the phrase, “expects to be available”.

I find it far more difficult to know how I would vote on any of the other amendments, recognising the sheer complexity of the discussion that we have been having. I happen to have more faith in local authorities, and believe that if they have the opportunity and the resource they will do their best for the people that they want to serve.

[The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con)]

My Lords, this is our first opportunity after the Recess to consider Part 3 of the Children and Families Bill. This is a good time to reflect on how far we have come in taking forward our shared ambition of a new framework for supporting children, young people and their parents—one that raises aspirations, improves outcomes and enables young people to prepare successfully for adult life.

On 17 December, the House passed a number of government amendments responding to important issues raised by noble Lords in Committee. These amendments will include disabled children and young people without SEN in key provisions of the Bill and ensure that local authorities exercise their functions with a view to securing that they identify both children and young people with SEN and disabled children and young people, and that health bodies inform the child’s parents and local authority where they are of the opinion that a child under compulsory school age has or probably has a disability. Local authorities will exercise their functions with a view to ensuring the integration of education and training provision with healthcare provision and social care provision for children and young people with SEN and disabled children and young people where they think this would promote their well-being, including in relation to their participation in education, training and recreation. Local authorities and their partner commissioning bodies making joint arrangements for the commissioning of education, health and care provision for children and young people with SEN will be amended to include disabled children and young people. Local authorities will keep under review all the education and training provision and social care provision for disabled children and young people and consult disabled children and young people and their parents when doing so. Local authorities will arrange for disabled young people and the parents of disabled children to be provided with information about matters related to disability—I have also tabled an amendment, which we shall come to later, to extend the requirement to cover children themselves as well as their parents—and local authorities will include disabled children and young people both in relation to the information to be published and in developing and reviewing the local offer and in publishing comments.

The definition of disability applied in relation to these government amendments is that in the Equality Act 2010. Since I have already given an undertaking to strengthen the links to the Equality Act duties in the SEN code of practice, they will sharpen the focus on those duties considerably. The code of practice is, of course, statutory and the guidance it provides cannot be ignored.

These changes followed a government amendment in Committee requiring schools to make arrangements for supporting children with medical needs, including children with long-term medical conditions, about whom noble Lords had particular concerns. These changes have improved the Bill and will improve provision for children, young people and families.

We have now had an interesting debate on accountability for services and the local offer. It is an important issue, and one on which a range of views was expressed in Grand Committee. I would like to thank the noble Lord, Lord Low, and the noble Baronesses, Lady Howe, Lady Hughes, and Lady Jones, for their contribution today and for bringing their experience into this debate.

I think it is important at the outset to reflect for a moment on the purposes of the local offer and on how the provisions in the Bill, the draft regulations and the draft SEN code of practice have been developed. The Lamb inquiry highlighted the need for parents to have clearer information about the support available and how decisions are made. Brian Lamb was clear that greater clarity and transparency reduces conflict and builds trust. That is why the SEN Green Paper proposed the local offer.

Since the Green Paper, we have worked with our local pathfinders and others to develop the statutory framework for the local offer. From this work, we know that local services will be much more responsive to local needs if local offers are developed with children and young people and their parents. This is precisely what we provide for in the Bill.

I appreciate the concerns that have prompted Amendment 25E, which was tabled by the noble Baroness, Lady Howe, on the review of education and care provision. I understand why she is seeking the publication of an action plan if the education and social care is deemed insufficient. I also understand her wish to ensure that local authorities address any shortcomings, but I think that Clause 30 rather than Clause 27 is the right place to address these issues, and I will say more about this shortly.

The provisions in the Bill will ensure that children and young people with SEN and disabled children and young people and the parents of children with SEN and disabilities are involved in improving provision where it is insufficient. Local authorities must consult and involve them when reviewing local provision, but I believe that the detailed mechanics of how local authorities work with local people and those providing services for them to improve provision are best left to the local authority—I take the point the noble Baroness, Lady Howarth, has just made—if we are really to secure services that are responsive to local needs.

As many noble Lords have mentioned, there is a government amendment in this group—Amendment 33C —which I would now like to explain. Local authorities must publish comments from children and young people with SEN and disabilities and parents of children with SEN and disabilities about the local offer, including comments about the quality of the provision available and about any provision that is not available. We make it clear in the draft SEN code that when local authorities publish their response to comments they should include the action local authorities propose to take. However, in view of the concerns raised in Committee I have tabled Amendment 33C to make this explicit in the Bill.

This amendment will add a requirement to Clause 30(6) to make it absolutely clear that local authorities cannot simply publish their response to comments but then ignore them. They must say what action they intend to take. This will provide even greater transparency and help to improve local accountability. As with every other part of the development of the local offer, children, young people and parents will be involved in discussions with local authorities about the action they propose to take.

16:00

The noble Baroness, Lady Howe, asked whether Clause 30 was the right place, as opposed to Clause 27. Clause 27 is only about reviewing provisions and consulting people whereas Clause 30 provides the impetus to reflect provision in a local offer and to shape it in response to the views of children, young people and parents. As I have said, we feel that substantive engagement with children, young people and parents is the way to do this. However, we would be happy to make stronger links in the SEN code of practice between the review duty in Clause 27 and Clause 30 on the local offer. In answer to the point made by the noble Lord, Lord Low, I can also confirm that we expect local authorities to develop their action plans with parents, children and young people, and we will make that clear in the code of practice.

Many noble Lords have spoken to Amendments 30 and 31. I thank the noble Baronesses, Lady Hughes and Lady Jones, for tabling these amendments and for giving us the opportunity to consider further the aims of the local offer. Our aim in requiring local authorities to publish the provision they expect to be available in and outside their local area is to make the local offer as relevant and useful to families as possible. It will not be so informative if it can only set out what is already available rather than what is expected to be available. If, for example, a new specialist provision was due to open in an area, it would be useful for parents and young people to know about that in advance. We would not wish to restrict local authorities to including this facility in the local offer only once it had already opened.

Often, the things that are most important to parents are provided by small voluntary sector groups or informal arrangements such as a trampoline club on a Saturday morning for a child with autism, a local club providing activities for disabled children and their siblings or a circle of friends group for disabled young people set up by local young people. The services may be expected to be available, but this cannot be guaranteed. Requiring local authorities to publish only what is available may deter them from including such provision in the first place and children and young people will miss out on valuable opportunities.

I assure noble Lords that we intend the local offer to be robust and it was always intended that it would cover what is available. We want parents and young people to have confidence in the information it contains. In answer to the point made by the noble Baroness, Lady Morris, and other noble Lords, for the avoidance of any doubt we will amend the SEN code of practice to make it clear that the duty on the local authority to set out what it “expects” to be available is not about what the local authority would like to be available but what it expects actually will be.

Many noble Lords have spoken to Amendment 33D on quality standards for the local offer. I firmly believe that further prescription of additional legal duties and setting national quality standards in law would mean central government deciding what is best rather than local parents, children and young people, and that this would critically undermine the value of the local offer. Since the proposal for a local offer was prompted by the Lamb inquiry it might be helpful to reflect on Brian Lamb’s views. He said:

“I would be very reluctant to create a legal duty to provide whatever is included in the local offer. What you would get is very defensive practice from local authorities. They will be so cautious about what is included and the local offer will be stripped back to the absolute minimum they can commit to and avoid legal challenge. The local offer will become worthless and you’ll lose the prize of collaboration and openness with parents that it’s trying to secure”.

Brian Lamb’s view is that real change comes when local authorities engage fully with children, young people and parents. We share that view; we have seen it in operation in the pilots. That is why we will be looking for evidence of such engagement in the information we receive from local authorities on their approach to the reforms. We will also look at how we might strengthen the code of practice further in this regard.

We have already set out a clear common framework for the local offer in the Bill, particularly the draft regulations and the draft code of practice. This will ensure consistency across local authorities. We heard from my noble friend Lady Eaton and the noble Baroness, Lady Howarth, in Committee and again today, and today from my noble friend Lady Perry and the noble Lord, Lord Storey. All stressed the dangers of a minimum-standards approach and urged us to resist the temptation to place further prescription on local authorities. I agree with them and I am clear that doing so would work against openness and collaboration, and stifle creativity.

I understand why the noble Lord, Lord Low, and the noble Baroness, Lady Hughes, have tabled Amendment 33D seeking regulations prescribing quality standards for the provision in the local offer. However, it is difficult to see how quality standards could be developed for the local offer since it will contain a wide range of services and support provided by a wide range of local providers, including not only local authorities but organisations from across the statutory and voluntary sectors. How would any standards be meaningful without covering the full range of provision and without taking account of local views, local needs and local circumstances? There are fundamental differences between institutions regulated by statute, such as children’s homes, where it is necessary to set standards of care for children and young people to which all institutions must adhere, and the wide range of services to be embraced by the local offer from schools and colleges to small local voluntary-sector groups. We do not believe that standards—minimum or quality standards—are feasible for, or consistent with, the purposes of the local offer, which are to provide children, young people and parents with easy access to information about provision, and the opportunity to be directly involved in shaping that provision.

It is also important to remember that many services in the local offer will already have statutory duties and be subject to statutory regulation—for example, schools, including non-maintained special schools and independent schools. Standards of one kind or another will also be in place for other areas such as fostering. It would not make sense to overlay existing arrangements with national prescription through the local offer. Instead, we want to encourage local engagement and innovation.

In our local pathfinders, the freedom to innovate is already paying dividends. The SE7 pathfinder developed its local offer specifically to answer the questions local parents and young people want to have answered, not to fit a predetermined regime imposed by the Government. As my noble friend Lady Eaton mentioned, North Yorkshire has been developing an interactive site map for the local offer, to improve access to information about available support in a simple and direct way that responds to local views. Leicester, through its parent carer forum, Big Mouth Forum, has set up pop-up shops in local shopping centres for families and young people to access useful information and ask questions about the local offer. This has also allowed Leicester City and the Big Mouth Forum to gather valuable feedback to inform continued development of their local offer. When I visited the pathfinder at Greenwich, Cherry Orchard School gave a presentation on how the local authority had worked directly with local schools from the outset to set out a clear school offer. There is a real sense of shared objectives, joint ownership and co-operation in these examples. We want to encourage this to flourish, not to overburden local agencies with further regulation.

At an open meeting for Peers with some of the pathfinders before Committee, noble Lords heard how, by working directly with parents and across education, health and social care provision had been developed that better met children’s and young people’s needs and was more cost effective, making the most of resources. If we had a tick-box approach to the local offer we would lose this collaboration and creativity, and families and children would lose out.

The noble Baroness, Lady Jones, asked for more information on the Ofsted study. The noble Baroness, Lady Morris, was quite right that when I wrote to Peers about SEN issues following Committee, I promised more detail on the study. Although we will come to that in more detail in a later group, I will give an update now. The Ofsted study will focus on the extent to which local areas ensure that children and young people with SEN and those who are disabled are identified and their needs met. It will look for improved outcomes, and at the satisfaction of parents and young people. It will establish a baseline from which to evaluate progress in implementing the reforms; provide guidance to local authorities about the development of effective practice and advice about aspects requiring further development; and consider how, if required, effective accountability could take place.

The study will consider how local authorities identify and assess social care needs and will ensure that those needs are met. It will look at how local authorities work with clinical commissioning groups to identify and commission the range and sufficiency of specialist services required to support the needs of children with and without EHC plans, and will evaluate the effectiveness of these services. It will also consider arrangements for personal budgets, transition to EHC plans, and how school and college inspection and other inspection activity could provide ongoing information about the effectiveness of the local area’s arrangements. This will be a comprehensive study. Should Ofsted recommend that an inspection framework is needed we would, of course, take that very seriously. If it does not make such a recommendation, we will consider what further action is necessary.

The noble Baroness, Lady Wilkins, asked about local authorities publishing their responses. The Bill requires local authorities to publish comments about their local offer so that parents and others can see whether their views have been taken into account. We will say more on that in the SEN code of practice, but we still do not wish to be too prescriptive.

I hope that I have been able to reassure noble Lords that appropriate measures to improve transparency and accountability for the local offer will be established by the provisions in Clause 30, the common framework created by the regulations and the guidance in the code of practice. Just as amendments made earlier on Report have improved the Bill, government Amendment 33C will help to reinforce accountability and encourage provision that responds to local needs by ensuring that local authorities make it clear what action they intend to take in response to comments from children, young people and parents. In view of what I have said today I urge noble Lords not to press their amendments.

[Baroness Howe of Idlicote]

My Lords, first, I thank everyone who took part in this extremely interesting debate. It was at least as interesting as the debate on these subjects in Committee. I should have said at an earlier stage that I had a lot of sympathy with the other amendments in this group, and still do. On my own amendment, I have to admit that I am rather sorry that the Minister does not think that agreeing my amendment to Clause 27 would be a good thing, not least because that would give a lot of authority to the accountability of parents, who could see that what had been agreed between them and their local authority in the discussions they had had would be provided to a high standard. My own amendment was rather more probing, even at this stage, so I shall not take it further. However, if other Members who have spoken to their amendments in this group wish to press them to a Division, I would have considerable sympathy with what would be proposed. I beg leave to withdraw my amendment.

Amendment 25E withdrawn.

16:15

Amendments 25F to 25K

Moved by

[Lord Nash]

25F: Clause 27, page 23, line 5, leave out paragraph (a) and insert—
“( ) children and young people in its area with special educational needs, and the parents of children in its area with special educational needs;( ) children and young people in its area who have a disability, and the parents of children in its area who have a disability;”

25G: Clause 27, page 23, line 17, after “by” insert “—
(i) ”

25H: Clause 27, page 23, line 18, at end insert “, or
(ii) children or young people in its area who have a disability”

25J: Clause 27, page 23, line 20, after “to” insert “—
(i) ”

25K: Clause 27, page 23, line 20, at end insert “, or
(ii) children or young people in its area who have a disability”

Amendments 25F to 25K agreed.

Amendment 26 not moved.

Clause 28: Co-operating generally: local authority functions

Amendment 27 not moved.

Amendment 27A

Moved by

[Lord Nash]

27A: Clause 28, page 24, line 16, at end insert—
“( ) a person in charge of relevant youth accommodation—(i) in which there are detained persons aged 18 or under for whom the authority was responsible immediately before the beginning of their detention, or(ii) that the authority thinks is accommodation in which such persons are likely to be detained;”

[Lord Nash]

My Lords, I rise to move the group of government amendments starting with Amendment 27A. These amendments will strengthen provision for children and young people with special educational needs in the youth justice system. Provision for young offenders has been the subject of considerable debate during the passage of this Bill, both in this Chamber and in the other place. This is an issue that we must get right. Evidence suggests that nearly one in five young people in custody has a statement of special educational needs. I offer my sincere gratitude to the noble Lords who have pursued this matter, particularly the noble Lord, Lord Ramsbotham. I have benefited considerably from his expertise in this area, and I pay tribute to his tireless efforts to secure better outcomes for those with SEN in custody.

I also offer my thanks and appreciation to the noble Baroness, Lady Howarth, and my noble friends Lord Addington, Lord Storey and Lady Walmsley, all of whom have contributed valuably to this discussion. I have considered all representations on this issue very carefully, and I am now pleased to bring forward a series of amendments that will considerably strengthen protections for this vulnerable group.

The noble Lord, Lord Ramsbotham, has tabled Amendment 50, which I support, removing Clause 70 of the Bill, which currently disapplies Part 3 of the Bill to children and young people in detention. The Government’s amendments would replace Clause 70 with new provisions after Clause 65, which would enable education, health and care assessments to take place for a detained child or young person; require home local authorities and health service commissioners to use their best endeavours to arrange the special education and health provision specified in a plan during the period in custody; and require relevant youth custodial institutions—that is, young offender institutions, secure children’s homes and secure training centres—to co-operate with the home local authority when arranging support for young offenders with SEN. These changes will ensure that needs are identified and assessed at the earliest opportunity, that the best possible support is provided to young people in custody, and that there is a single point of accountability before, during and after their period in detention.

The first clause affected by this group of amendments is Clause 28, hence our consideration at this time. However, in the interests of clarity, I will firstly explain the substantive amendments that we would introduce after Clause 65. The point at which a child or young person is first detained is a crucial opportunity to identify special educational needs. Amendments 47B and 47C would allow the custodial institution, and the detained person or their parent, to request a full, statutory education, health and care assessment from the detained person’s home local authority. Under our amendments, a home local authority must also determine whether to conduct an assessment when a detained child or young person has been brought to its attention by someone else—for example, a professional working with the child or young person. This will support early identification of needs; it will also make best use of the time that a young person is in detention so that an assessment can get under way and support be put in place immediately upon release.

Amendment 47D would extend the right to appeal to a detained young person or a detained child’s parent when they were unhappy with a local authority decision not to carry out an assessment or a decision not to make provision following an assessment.

Amendment 47E would require a child or young person’s home local authority to use its best endeavours to arrange the special educational provision specified in the EHC plan while they are in custody. This is a strong and robust statutory duty, requiring the home local authority to do everything in its power to arrange the specified provision, or provision corresponding as closely as possible to it, or other appropriate provision while the individual is detained. Placing this duty on the home local authority will provide continuity and stability that is not present under existing arrangements. It will significantly improve accountability and ensure that, wherever a child or young person is detained, there remains a single point of accountability and a single contact for their families. It also creates a strong incentive for the home authority to arrange the best possible provision, as it will remain responsible for that child or young person throughout their period of detention and afterwards when they return home.

Amendment 47E would also create a parallel requirement for a detained child or young person’s health services commissioner to use its best endeavours to arrange the healthcare provision specified in an EHC plan. Where a child or young person is detained in custody, the relevant health services commissioner would be NHS England. This is a new duty, which would require the health service commissioner to do everything in its power to arrange the specified provision, or provision corresponding as closely as possible to it, or other appropriate provision while the individual is detained.

Amendment 27A to Clause 28 and Amendments 33HA to 33HK to Clause 31 would require relevant secure institutions—young offender institutions, secure children’s homes and secure training centres—to co-operate with the local authority. These amendments will require governors of young offender institutions or those in charge of other establishments in the youth secure estate to work with local authorities to deliver the best possible support for those in custody. These new statutory requirements will give local authorities the backing they need to ensure that custodial institutions play their part. This also reflects the Government’s ambition to place education at the heart of youth detention, set out in the Transforming Youth Custody consultation paper.

In addition to these substantive changes, we have also made a series of technical supporting amendments to Clauses 36 and 48, and to Schedule 3. These supporting amendments also include adding a new clause, “Application of Part to detained persons”, which includes a regulatory power to apply further provisions to detained people. These regulations, along with a revised section within the code of practice, will allow us to set out more detail about how we expect these new duties to operate in practice, and the relative roles and responsibilities of each party.

Amendments to Schedule 3 make consequential amendments to the Education Act 1996 to reflect the fact that these new provisions would replace existing provisions in England, but not in Wales. The Government, in consultation with the Welsh Ministers, would have the power to amend provisions by regulation. This package of amendments represents a much more robust statutory framework for detained young people, which responds to the valuable contributions and issues raised by noble Lords, for which, as I say, I am extremely grateful. I beg to move.

[Lord Ramsbotham (CB)]

My Lords, I begin by thanking the Minister for his courteous words in his introduction. I feel that we are almost there on children in detention, but not quite. I fear that some work remains to be done to ensure that the intent outlined in the Government’s amendments is brought to pass. I am very grateful for the many meetings and discussions which have resulted in the amendments that the Minister outlined, which make my Clause 70 stand part debate irrelevant. However, both as a former soldier and Chief Inspector of Prisons, I admit to remaining unease, fuelled in particular by proposed new subsection (4) of Amendment 47E, which requires a home local authority to,

“use its best endeavours to arrange appropriate special educational provision for the detained person”.

Those words seem far too weak to ensure that anything actually happens.

I refer to the intent behind my Amendment 49, which—despite much of the content having been, like my stand part debate, made irrelevant by the government amendments—remains very much extant in intent. To me, “best endeavours” is too weak because it leaves too much open for too many individuals to interpret to allow consistent provision of what is intended. Therefore, I plead guilty to falling back on a concept that underpins consistent provision of what is intended in the Army, namely duty. In the long-term interests of young people with special educational needs, quite apart from the best interests of the country as a whole, I can see no reason why, rather than leave such provision to chance, a duty should not be put both on a local authority to arrange that provision be made for an EHC plan to be continued in custody, and on places of detention to deliver what is required in such a plan. That is what it appears that the Government intend, because proposed new subsection (1) of Amendment 47C states that a home local authority must secure that an EHC plan is prepared for a detained person. Unfortunately, though, as I have bemoaned on many previous occasions, such an intent is unachievable because the Ministry of Justice cannot guarantee to deliver what is arranged, prepared or required.

Unlike any other operational organisation such as a school, hospital or business, the Prison Service makes no one responsible or accountable for the treatment and conditions of any group of people in custody such as women, children or young people. Not only is the governor of any place of detention not bound to continue any practice that was in place when he or she took over, but alone determines what is or is not appropriate and will or will not be provided. Having campaigned unsuccessfully for 19 years to have this changed, and having seen far too many promising initiatives and developments dropped—wholly wrongly and unnecessarily—I suggest that if the Government mean what appears to be the intent of this group of amendments they must do something about the wording in proposed new subsection (1) of Amendment 47C and proposed new subsection (4) of Amendment 47E because, as set down, they are incapable of securing anything. I put it to the Minister that neither the Government nor any local authority should feel comfortable that the Ministry of Justice at present lacks the means of ensuring EHC plan provision in places of detention. Therefore, not least to ensure the credibility of government legislation, he should be seeking other means of securing it.

I turn to the code of practice, which has been mentioned many times during the passage of the Bill and is currently out for consultation. At present, certainly to a lay man such as me, the code appears to be a vast document, full of “musts”, without any specification about who is to deliver them or oversee their provision. The Minister has often emphasised the store the Government set by the code, and I therefore ask him whether he sees it as the vehicle by which the problem I have outlined is to be remedied. If he does, I ask him whether he will reconsider the wording in the government amendments and tell the House, probably at Third Reading, exactly how the code of practice will be worded so that provision of EHC plans is secure. I understand that NHS England is responsible for contracting provision of the healthcare part of any plan from an appropriate local provider, but I would be grateful for information on how exactly that is to be secured. I use the word “security” deliberately because local authorities, which are responsible for the continuation of any provision after the release of anyone from detention, will have a vested interest in the quantity and quality of the provision of what they are told that they must secure, but over whose provision they have virtually no control. In other words, as I said at the start of my contribution, we are nearly there but I suggest that we need one last shove before we can feel certain that provision of what the Government want is secure.

16:30

[Baroness Warnock (CB)]

I support everything that my noble friend Lord Ramsbotham has said. This is an enormous opportunity and it would be disastrous if the Government did not seize it. It has long been an outrage that there is a large number of young people with special educational needs in places of detention. Nobody disputes the evidence that there is a huge number of such young people, and this is an opportunity to remedy the neglect that these children have had. I entirely agree that the present wording is such that local authorities may very well make no changes whatever, and the Ministry of Justice has no power to compel governors of such places to do what urgently needs to be done. I do not think that there can be any dispute about that, and I implore the Minister to come back with wording which is a great deal tighter and which will make the change that we all know has needed to be made for a long time.

[Lord Storey]

My Lords, we all know that 70% of these young offenders have special educational needs. We also know that 10% or 20% of them have statements. We know, too, that a huge number of them—I do not know the exact figure but 70% or 80%—will go on to reoffend. Therefore, it is really important that this group of young people gets the best possible special educational needs support. When this Bill first came out, I found it unbelievable that EHC plans would not be going with these young people into their institutions.

One of the hallmarks of the Bill has been the Minister’s desire to discuss, consult and listen to what people say, and I pay tribute to him for doing that. During the discussions on this matter, it has become clear to all of us that the number of young people in these institutions is declining, as is the time that they spend in them—thank goodness. The practicalities of getting their EHC plans to go with them becomes very difficult, particularly if you are talking about different local authorities, and therefore what the Minister is proposing seems sensible.

I also pay tribute to the noble Lord, Lord Ramsbotham, for his remarkable knowledge in this area. I agree with him, and I hope that when the Minister replies he will be able to refer to the concern that a lot of us share about the words “best endeavours”. Sadly, the justice system is not an educational system, and “best endeavours” is too wide a hope—for example, “I use my best endeavours to get up early in the morning but I don’t”. I hope that noble Lords can see the point that I am making. The use of this phrase is a recipe for not doing the sorts of things that we in this House want to see provided for these young people. Maybe the word to use is “responsibility” or “duty”—I do not know—but I hope that the Minister will indicate that he will look at this again and come back with exact wording to make sure that the special needs provision that we all want to see is provided.

[Baroness Howarth of Breckland]

My Lords, I shall be brief, as I usually am, but I want to say two things. One is that when I read these amendments my heart leapt. I thought that if only the home local authority could be made responsible for every young person in secure provision on this basis with a proper plan for seeing them through—as I remember, and as I am sure my noble friend Lord Laming will remember, was the case in children’s departments, where someone was responsible for a young person, with a plan, wherever they were—that would be absolutely wonderful. Of course, at that time there was much more focus on education in the institutions, as childcare establishments, than there is in some of the more penal establishments that exist today.

So I was utterly delighted and was going to congratulate the noble Lord, Lord Ramsbotham, whose tenacity of purpose has taken this through, until I realised, as he did, the key flaw in this piece of legislation. That flaw is that those who wish to take the plans through are not the people with the capacity to provide the resource in order for it to happen in the place it needs to happen. As I am always interested in implementation, I thought about how this would work. There has to be a further step somewhere, either in some sort of regulation or a change in the legislation, that ensures that these plans are formulated into the institution—because, remember, these are individual plans. In the institution they have to be put together into programmes for groups of young people; it is not as easy as simply saying that you can carry each plan through as it stands without extra provision being brought in, with all the problems with that in terms of financing.

I hope that the Minister will look at this, take heart that many of us have been very impressed with the way he listens, and take it forward. Many of us are very concerned about young people in detention who have been failed by everybody by the time they get to detention, particularly those with special educational needs who should not be in this form of provision at all. Surely they can get the right education through this legislation, but they certainly will not with this flaw.

[Baroness Walmsley (LD)]

My Lords, I have a suggestion following what the noble Baroness has just said about implementation, but first I must say how pleased I am to see that my noble friend Lord Nash has listened tremendously well and gone away and done something about it. This has been a great example of the way this House works so well behind the scenes. I am very pleased that the blanket statement that all the good stuff in the Bill should not apply to children in custody has been got rid of and that my noble friend the Minister has grasped the opportunity that the Bill gives to put something better in place. Let us see whether we can get it as perfect as we would like to see it.

It occurs to me that it is a very good thing that the responsibility moves back to the home local authority. What we want to see when young people come out of custody and go back to their home local authority is continuity of provision. I know that the Local Government Association has welcomed this provision, but the people actually delivering the services while the young people are in custody are a company, an organisation that has been contracted to deliver that service from outside. They are not the prison authorities. These education services are provided by external organisations under contract. Why should those contracts not always have a proviso within them that says that there is somebody within the organisation with the responsibility of liaising with the home authority to ensure that the EHC plan is delivered, or the assessment is made, whichever is appropriate, and that the services are provided while the young person is in custody? That should be a condition of the contract for delivering education services within the prison. They should be obliged, under their contract, to provide what EHC plans say should be provided. I see no reason why that should not be a condition of winning a contract for providing services within a prison.

My final point is that I am particularly pleased about the duty that is being put on health commissioners to provide services within an EHC plan. I am aware, and the noble Lord, Lord Ramsbotham, has emphasised it on many occasions, that speech and language therapy is much needed by a high percentage of young people in custody. Let us hope that those services will be provided better in future under these new provisions.

[Baroness Hughes of Stretford (Lab)]

My Lords, my name is attached to Amendment 50 along with that of the noble Lord, Lord Ramsbotham. The amendment seeks to take Clause 70, which disapplies the provisions of Part 3 to detained young people, out of the Bill and I am pleased that the Government have accepted that. I also support Amendment 49, tabled by the noble Lord, Lord Ramsbotham.

I can be brief because most of the points have been made. I welcome the Government’s recognition that, as the noble Lord, Lord Storey, said, it was unbelievable that the provisions in Part 3 ought not to apply to detained young people and they have come some way, at least, to applying some of the provisions to young people in custody. However, I regret that, compared to the situation that will exist for young people in the community, the provisions in the government amendments are weak and that, as they stand, they will not give detained young people the same rights to and expectations of support as those in the community.

A number of points have been raised and I would like to summarise two significant holes in the proposals in the amendments as they hang together. First, where there is an EHC plan in existence before a young person goes into custody, the amendments will require the home local authority to maintain that plan and be ready to re-implement it on the release of that young person. That is good. However, as the noble Lords, Lord Ramsbotham, Lord Storey and others have said, the amendments will require the local authority and the healthcare authority to use only their “best endeavours”. That is very different from the duty on the local and healthcare authorities for young people in the community to secure the provision in the EHC plan. That is a big hole and I should be grateful if the Minister would address that issue and say why the Government have diluted the duty on local authorities in respect of detained young people.

The other big gap, which has been addressed in different ways by different contributors to the debate so far, relates to what happens to young people while they are in custody. Most of the amendments address the issue of what happens when the young person is released—they ought to be able to go back home and the home authority should carry on implementing the EHC plan that was in place—but there is nothing in the amendments about what happens in custody. There is a duty on YOIs and custodial institutions to co-operate with the local authority but there is no requirement on the institutions to, for example, identify if a young person has SEN if it has not been identified before they go into custody. This may well be the case because many of them have special educational needs. There is no responsibility on the custodial institution to request an EHC assessment. They can, but there is no requirement for them to do so. There is no responsibility laid on the custodial institutions to take over the responsibilities that would exist for a local authority if that young person was still in the community.

The noble Baroness, Lady Walmsley, referred to the contractors providing the education, but the responsibility ought to lie with the public sector organisation, or the quasi-public sector organisation in the case of a privatised institution, which is holding these young people. It ought to be its responsibility to address the special educational needs of those young people while they are in custody, working closely, of course, with the home local authority from which a young person has come and to which they will return.

16:45

As these amendments stand at the moment, there is nothing that requires the young offender institutions to pay attention to the special educational needs of the young people in custody or to address them in any way at all. That is a big gap. I do not know whether it has arisen because the Ministry of Justice does not want to take on those responsibilities but it is a glaring omission. It means that a young person may go into an institution with an EHC plan and may come out with the home authority ready to implement that EHC plan again but, in the middle, there is no requirement on anybody to do anything. That is a big gap. As the noble Lord, Lord Storey, said, these are the most needy young people in terms of their special educational needs, with huge issues. This is an opportunity, when they are in custody, to address those issues very securely. I hope the Government will rethink and strengthen these amendments. The amendments are good, in so far as they go, but they need to be strengthened further in those respects. I hope that the Minister will agree to think again.

[Lord Addington (LD)]

My Lords, Amendment 48A is in my name. The noble Baroness, Lady Hughes, made the point, also made in the amendment, that hidden disabilities—my interest in dyslexia is very well known in the House—are, by definition, difficult to spot. We also know that they are grossly overrepresented in all sections of the prison and youth justice systems. My amendment suggests that there should be some duty on those institutions to try to identify people in them with such disabilities. Providing education, training and, indeed, even socialisation for people who have been denied the ability, for instance, to access the written word and education is going to be incredibly difficult. They do not respond well and it is something that they cannot do. For example, you cannot even access social security when you leave prison. That might be going slightly off the point, but it is important that the Government give us an idea about the pressure that will be placed on these institutions to try to identify those who have these problems. Most of the work that has been done in this area shows that there is a much better chance of them not reoffending if that is done.

[Lord Nash]

My Lords, I am delighted that the noble Lord, Lord Ramsbotham, is satisfied that we are nearly there. However, as always, we do not quite seem to be there. The best endeavours clause that we are proposing for home local authorities would place incentives, we believe, in the right place—it is in the home local authority’s best interests to arrange quality provision, as it will remain accountable for the young person while they are detained and when they return from detention.

I remember many late nights in lawyers’ meetings when I have been strongly advised not to give a “best endeavours” undertaking, as it is a very strong under- taking, but to try to get away with a “reasonable endeavours” one. My legal training teaches me to believe that a best-endeavours undertaking is actually a very strong one.

The amendments specifically require the local authority to secure the special educational provision that is specified in the plan. If that is not possible, best endeavours would require home local authorities to do everything they could to arrange the special education provision specified in a young offender’s EHC plan while they are in custody—or provision that corresponds as closely as possible to it or to other appropriate provision. Some provision specified in EHC plans cannot be arranged by local authorities while a person is in custody: most notably and obviously, any requirement for a young person to attend a particular school or college, which of course they cannot attend while detained. It is for this reason that it is necessary to use the term “best endeavours”. It is a technical term that avoids placing a legal duty on local authorities which is impractical or impossible for them to deliver.

Amendment 47E does not, we believe, provide a get-out enabling home local authorities to have a free choice about which services they arrange for detained children and young people. They cannot simply decide, without robust justification, that some provision is no longer appropriate, just to avoid arranging it. Under the best endeavours duty, their starting point must be to arrange the provision specified in the EHC plan. They can arrange alternative or other appropriate provision only once they have done everything they can to arrange the provision specified in the plan.

Local authorities and the health services commissioner will be accountable to parents and young people in respect of this best endeavours duty. Parents and young people will be able to complain to their home local authority or to the health body—with ultimate recourse to judicial review. Our strengthened best endeavours duties will be accompanied by a robust code of practice.

The existing contracts for education services in public sector young offender institutions are due to end later this year. We will ensure that the arrangements made with the new education providers support local authorities as they seek to fulfil their best endeavours duty to ensure that provision in EHC plans continues to be delivered while a child or young person is in custody.

The current draft code of practice was of course written before we tabled these amendments. We will now rewrite the code to reflect them and the intent that I have today set out. I am very happy to discuss the wording of the code with the noble Lord, Lord Ramsbotham, outside the Chamber. The code is of course subject to affirmative procedure. I hope that the noble Lord will find that helpful. I look forward to those discussions with him so that it will not be necessary for us to come back to this at Third Reading.

[Baroness Hughes of Stretford]

I am not clear: could any requirements in relation to young offender or custodial institutions included in the code of practice actually be applied to those institutions? Could they come within the purview of the code of practice legally?

[Lord Nash]

I have no idea, but I hope that by the time I have finished dealing with the amendment of my noble friend Lord Addington, I might have an answer.

My noble friend Lord Addington tabled Amendment 48A to require the host local authority to make arrangements to ensure that the workforce has the skills and knowledge to identify special educational needs and put in place effective interventions. It is already a requirement of those we commission to deliver education in the youth secure estate to ensure that the needs of those young people with SEN are properly identified and addressed. Education providers in the youth secure estate are contractually required to have an appropriately trained and qualified workforce to conduct assessments. They will also have a SENCO who is responsible for managing the effective delivery of specialist SEN services.

Education providers are required to conduct an educational assessment of anyone entering custody unless this information is already known. That includes both assessments of levels of literacy, language and numeracy, and the screening of anyone who shows signs of a specific learning difficulty or special educational need. They also use a variety of tools for this purpose, including the hidden disabilities questionnaire developed by Dyslexia Action which screens for a range of hidden disabilities. Provision is subject to regular inspection by Ofsted, where appropriate working with HM Inspectorate of Prisons.

The current contract between the Education Funding Agency and education providers for young offender institutions requires all secure settings to have: procedures for ensuring that the identification and support of specific learning difficulties in young offenders is inspected, evaluated, monitored, reviewed and developed; and an appropriately trained workforce that will identify and support a young offender’s individual learning needs and deliver relevant and individually tailored programmes of learning support to those young offenders whose profiles provide evidence of specific learning difficulties. With the amendments I have proposed today, a young person identified as being at risk as a result of the screening process could be referred for a full EHC assessment. In view of this, and the existing requirements on providers and the amendments I have outlined, I hope that my noble friend will not press his amendment.

I am confident that the government amendments in this group will result in vastly improved provision for children and young people with SEN in custody, and that they address the views and concerns of noble Lords. We have made significant steps on this. As I said, I would be very happy to continue discussing this further—including, if I may, the point made by the noble Baroness, Lady Hughes.

[Lord Ramsbotham]

I thank the Minister for the way in which, as other noble Lords said, he has listened during all our discussions. We have come a long way, but I am still nervous that we have people under the age of 18 in young offender institutions, but health and care plans continue from nought to 25; and we have the problem of the over-18s who will be dispersed elsewhere and who will now, under plans from the Ministry of Justice, no longer go to young offender institutions, but may be sent to adult institutions all over the country.

My nervousness is not so much about the home local authority drawing up the plan but about the actual implications. A great gulf seems still to exist between the intent of the Department for Education, which has been so clearly set out by the Minister, and the ability of the Ministry of Justice to deliver what is required and laid down in legislation. I hope that when we discuss the application of the code of practice, the Ministry of Justice will be present and will be required to set out exactly how it will deliver what is in the code.

[Lord Nash]

I do, too.

Amendment 27A agreed.

Clause 29: Co-operating generally: governing body functions

Amendments 28 and 29 not moved.

Clause 30: Local offer for children and young people with special educational needs

Amendment 30 not moved.

Amendment 30A

Moved by

[Lord Nash]

30A: Clause 30, page 25, line 23, after “needs” insert “or a disability”

Amendment 30A agreed.

Amendment 31 not moved.

Amendments 31A and 31B

Moved by

[Lord Nash]

31A: Clause 30, page 25, line 25, after first “for” insert “—
(i) ”

31B: Clause 30, page 25, line 26, at end insert “, and
(ii) children and young people in its area who have a disability.”

Amendments 31A and 31B agreed.

Amendment 32 not moved.

Amendment 32A

Moved by

[Lord Nash]

32A: Clause 30, page 25, line 30, at beginning insert “other”

Amendment 32A agreed.

Amendment 33 not moved.

Amendments 33A to 33C

Moved by

[Lord Nash]

33A: Clause 30, page 26, line 2, at end insert “—
(i) ”

33B: Clause 30, page 26, line 4, at end insert—
“(ii) children and young people who have a disability, and the parents of children who have a disability, and”

33C: Clause 30, page 26, line 5, at end insert “(including details of any action the authority intends to take)”

Amendments 33A to 33C agreed.

Amendment 33D

Moved by

[Lord Low of Dalston]

33D: Clause 30, page 26, line 5, at end insert—
“(6A) The Secretary of State shall lay a draft of regulations setting out the standards and quality of the special educational provision, health care provision and social care provision which local authorities must meet in their local offer, and the regulations are not to be made unless they have been approved by a resolution of each House of Parliament.
(6B) Once regulations under subsection (6A) have been made, the Secretary of State must—
(a) issue guidance to local authorities on how to meet these regulations, and(b) publish information on these regulations accessible to the families of children and young people with special educational needs on the Department’s website, and in any other way he sees fit.”

[Lord Low of Dalston]

My Lords, Amendment 33D stands in my name and I spoke to it in our first debate this afternoon. When I spoke to it, I said that I would listen to what the Minister and other noble Lords had to say, but I reserved the right to move it and test the opinion of the House when it came up in order. With your Lordships’ agreement, I would like to do that. Never mind all the arguments in favour of the amendment to do with the desirability of a degree of central oversight of a wholly new system being introduced and operated by local authorities, which those who spoke in favour of it maintained is not unduly prescriptive. Irrespective of all that, the main reason why I want to press the amendment to a Division is that I think there has been a considerable misapprehension about the thrust of the amendment on the part of those who expressed reservations about it.

A number of noble Lords said that they were unhappy about an amendment which contained the idea of minimum standards and sought to impose them on local authorities as that would give rise to a tick-box culture, with local authorities merely operating to a bare minimum standard. When I spoke to the amendment I indicated that I had taken this very point when it was made in Grand Committee—that we should not confuse a framework of standards with minimum standards, because if we talked in terms of minimum standards that would lead to this very race to the bottom, which nobody wants to see. I made it clear when I spoke this afternoon that I have very much taken that point.

This amendment does not speak of minimum standards. It merely speaks of the Secretary of State making regulations to provide a framework of standards and quality for local authorities to observe in formulating their local offers. For that reason, I would like to test the opinion of the House.

17:01

Division 1

Ayes: 197

---

Labour: 141
Crossbench: 37
Independent: 7
Bishops: 2
UK Independence Party: 1
Plaid Cymru: 1

Noes: 258

---

Conservative: 160
Liberal Democrat: 71
Crossbench: 18
Independent: 3
Ulster Unionist Party: 2
Bishops: 1

17:14

Amendments 33E to 33H

Moved by

[Lord Nash]

33E: Clause 30, page 26, line 13, after “involve” insert “—
(i) ”

33F: Clause 30, page 26, line 15, leave out from “needs,” to end of line and insert “and
(ii) children and young people who have a disability, and the parents of children who have a disability,in the preparation and review of its local offer;”

33G: Clause 30, page 26, line 21, at end insert “—
(i) ”

33H: Clause 30, page 26, line 23, at end insert “, and
(ii) children and young people who have a disability and those who care for them”

Amendments 33E to 33H agreed.

Clause 31: Co-operating in specific cases: local authority functions

Amendments 33HA to 33HK

Moved by

[Lord Nash]

33HA: Clause 31, page 26, line 30, after “following” insert “persons and”

33HB: Clause 31, page 26, line 33, at end insert—
“( ) the person in charge of any relevant youth accommodation;”

33HC: Clause 31, page 26, line 38, after “The” insert “person or”

33HD: Clause 31, page 26, line 38, leave out “it” and insert “the person or body”

33HE: Clause 31, page 26, line 40, leave out “its own duties” and insert “the duties of the person or body”

33HF: Clause 31, page 26, line 41, leave out “its functions” and insert “the functions of the person or body”

33HG: Clause 31, page 26, line 42, after “A” insert “person or”

33HH: Clause 31, page 26, line 44, after first “a” insert “person or”

33HJ: Clause 31, page 27, line 1, after “assessment” insert “, a detained person’s EHC needs assessment”

33HK: Clause 31, page 27, line 1, after second “the” insert “person or”

Amendments 33HA to 33HK agreed.

Clause 32: Advice and information for parents and young people

Amendment 33J

Moved by

[Baroness Northover]

33J: Clause 32, page 27, line 4, after first “for” insert “children and young people for whom it is responsible, and”

[Baroness Northover (LD)]

My Lords, the Bill already provides for local authorities to be responsible for ensuring that parents of children with special educational needs, and young people with special educational needs, are provided with advice and information. It also already requires local authorities to take appropriate steps for ensuring that parents of children with special educational needs, and young people with special educational needs, know about the advice and information available to them. These government amendments extend that local authority responsibility to children with special educational needs.

In Grand Committee, I said that we were sympathetic to the views of a number of noble Lords about the need for consistent references throughout the Bill and the code to the inclusion and participation of children, where that is appropriate. Where there is a specific decision-making responsibility in relation to children, as distinct from young people, it is, of course, right that we vest that in parents. However, as Clause 32 relates to the provision of information and advice, it is appropriate to make a specific reference to children in it. These amendments do that. Indeed, they have the same effect as Amendments 119, 120 and 122 tabled in Grand Committee by the noble Baronesses, Lady Hughes and Lady Jones. I thank them for highlighting this issue. I hope that noble Lords will agree that these amendments are necessary and I urge noble Lords to support them. I beg to move.

[Baroness Howe of Idlicote]

My Lords, I very much welcome the Government’s amendments in relation to the provision of information to children with special educational needs. Children must be able to take part in decision-making which affects them, according to the UN convention. They will be able to do so only if they are fully informed. This is also important so that under-16s are prepared for the time when they have primary responsibility for decision-making at the age of 16.

The Committee on the Rights of the Child has stated that children have a right to information, which is a prerequisite to their involvement in decision-making:

“Children need access to information in formats appropriate to their age and capacities on all issues of concern to them. This applies to information, for example, relating to their rights, any proceedings affecting them, national legislation, regulations and policies, local services, and appeals and complaints procedures”.

It has even specifically called on Governments to amend legislation to ensure that children are provided with information so that they can be effectively involved in decision-making:

“The child’s right to be heard imposes the obligation on States parties to review or amend their legislation in order to introduce mechanisms providing children with access to appropriate information”.

These statements underpin the Government’s amendment to Clause 32, which I warmly welcome. The amendment to Clause 32 will ensure that under-16s are provided with advice and information concerning special educational needs and disabilities as well as relevant services.

While welcoming these amendments, I urge the Government to ensure that they are paying the utmost attention to the detail of the code of practice and associated regulations with regard to children’s involvement in decision-making. The code of practice and regulations will shape what people on the ground do and how they involve children and young people in decision-making in practice, so it is critical that these documents spell out clearly, consistently and in detail, the responsibilities of local authorities to involve children and young people of all ages in decision-making. I therefore support the Government’s amendment to Clause 32 and welcome the intention to ensure that children, in addition to young people, are provided with advice and information. I also call on the Government to set out clearly in the code of practice and regulations the rights of children and young people to be involved in decision-making.

[Baroness Walmsley]

My Lords, I, too, welcome this group of amendments. From these Benches in Committee we proposed a group of amendments about the voice of the child and the child’s involvement with decision-making. We have not got all that we wanted but there is certainly a step in the right direction here today and I very much welcome it. I echo the words of the noble Baroness, Lady Howe, when she said how important it is that children have the information they need to enable them to take part in decision-making about matters that relate to them. This is a right under the UN Convention on the Rights of the Child and I am very glad that the Government have taken one step further towards implementing it.

[Baroness Howarth of Breckland]

My Lords, very briefly, I would be remiss if I did not welcome this amendment. I was directly involved for many years with children and giving children information, both in voluntary organisations and in the Children and Family Court Advisory and Support Service. It was clear to me that they did not know what information you had given them unless it was in an appropriate form. I hope that the code will take the best from some of the practice that already exists in some local authorities and CAFCASS regarding the form of information and the method of delivery to children and young people. Young children in particular can be involved very easily in many complex areas of their lives and indeed in decision-making if it is explained to them in an appropriate way by an appropriate person. I welcome the amendment but I hope that the implementation will be looked at carefully as there is good practice out there that could be used.

[Lord Pearson of Rannoch (UKIP)]

My Lords, perhaps I may just caution—I think that the noble Baroness has just touched on this—that it is all very well asking children and young people to take decisions but if there is any doubt that they are capable of taking those decisions in their own best interests then it is very important to consult the family, especially when the family is a supportive one. Your Lordships will know that I speak from personal experience on this subject.

[Baroness Jones of Whitchurch]

Very briefly, we also welcome the fact that the Government have recognised that children need to be involved in decision-making that affects their lives and, as the noble Baroness, Lady Howe, has said, this is in keeping with UN Convention on the Rights of the Child and was clearly set out in Clause 19. It was Clause 32, however, where there was an inconsistency in this approach and this was where we had tabled amendments to ensure that the clause also included the right for children to be involved in decision-making. It was this inconsistency that we were keen to address. We are very pleased to hear from the Minister that the Government are now prepared to amend the Bill to rectify that inconsistency.

However, there is still an ongoing issue about the wording in the code of practice and the regulations that sets out local authorities’ responsibility to involve children and young people in decision-making. Unfortunately, these documents still do not consistently reflect the framework set out in Clause 19. Therefore, although I welcome the steps that the Minister and the Government have taken on this matter, it would be helpful if the Minister could also confirm, in the spirit of the previous debate, that the regulations will be updated to ensure that those rights of the child are consistent throughout the Bill. With that challenge back to her, we very much welcome the amendment.

[Baroness Northover]

My Lords, I thank noble Lords for their welcome for these amendments, particularly the noble Baronesses, Lady Howe and Lady Howarth, and my noble friend Lady Walmsley. I understand what the noble Baroness, Lady Howarth, and others have said about implementation and, as the noble Baroness put it, the form and method of delivery. We certainly take her points.

I remind the noble Lord, Lord Pearson, that this is about the provision of information and the participation of children where appropriate, as I said in my introductory remarks. I am sure that the code will be carefully examined to ensure that it is consistent with the decisions made on Report, as evidenced by these amendments. I hope that noble Lords will be willing to support these amendments.

Amendment 33J agreed.

Amendments 33K to 33P

Moved by

[Lord Nash]

33K: Clause 32, page 27, line 5, leave out “and young people for whom it is responsible,”

33L: Clause 32, page 27, line 7, at end insert—
“(1A) A local authority in England must arrange for children and young people in its area with a disability, and the parents of children in its area with a disability, to be provided with advice and information about matters relating to the disabilities of the children or young people concerned.”

33M: Clause 32, page 27, line 9, leave out “subsection (1)” and insert “subsections (1) and (1A)”

33N: Clause 32, page 27, line 10, at end insert—
“( ) children in its area;”

33P: Clause 32, page 27, line 15, leave out “subsection (1)” and insert “subsections (1) and (1A)”

Amendments 33K to 33P agreed.

Clause 34: Children and young people with special educational needs but no EHC plan

Amendments 34 and 34A not moved.

Clause 36: Assessment of education, health and care needs

Amendment 34AA

Moved by

[Lord Nash]

34AA: Clause 36, page 29, line 39, at end insert “or section (Assessment of post-detention education, health and care needs of detained persons)”

Amendment 34AA agreed.

Amendment 34B had been withdrawn from the Marshalled List.

Amendment 34C

Moved by

[Lord Nash]

34C: Clause 36, page 30, line 20, after “In” insert “making a determination or”

[Lord Nash]

My Lords, there has been broad support across this House for our ambition to create a system that raises aspirations and helps young people with SEN to realise their full potential, achieve positive outcomes and prepare for adult life. There has also been broad support for the provisions in the Bill that extend additional rights and support to 16 to 25 year- olds in further education and training.

The Bill enshrines in law the principle that local authorities must take account of young people’s views, wishes and feelings, and involve them in decision-making. It gives young people aged 16 to 25 the right to request an assessment of their needs. It ensures that post-16 institutions will be consulted by the local authority when it reviews its provision, and are included in the local offer. It places FE colleges, sixth form colleges, 16 to 19 academies and free schools under a new duty to use their “best endeavours” for all young people with SEN, and ensures that they have regard to the new nought to 25 code of practice. It gives young people the right to request that these institutions—and approved independent specialist providers—be named in their EHC plan and then admit them, unless exemptions apply. It ensures that young people who become NEET do not lose their EHC support, and are helped back into education. Also, for the first time, it gives 16 to 25 year-olds in further education and training the right to appeal to an SEN first-tier tribunal if they are unhappy with their arrangements. There is a great deal here that we should be proud of and I am grateful for the support that noble Lords have shown on all sides of the House.

However, I also know that there has been genuine concern about the provisions in the Bill that require local authorities to “have regard to” the age of young people aged 19 to 25 when determining their support. We had a particularly helpful round-table discussion on this when a number of noble Lords, including my noble friends Lady Sharp and Lady Cumberlege and the noble Baronesses, Lady Hughes and Lady Howarth, made a number of really helpful comments in this regard. Noble Lords have particularly expressed their fears that the Bill as currently drafted would provide local authorities with an excuse to deny or cease support to a young person based solely on their age. This is not, and has never been, our intention. Young people with SEN aged 19 to 25 should be supported to remain in formal education where this will enable them to complete or consolidate their learning, achieve their outcomes and make a successful transition to adulthood. In achieving this important aim we must not inadvertently create an entitlement or expectation that all young people with SEN remain in education until age 25. That would not be in the interests of many young people, who may need just one or two years of additional education to progress into adult life and work.

I have listened carefully to the concerns of noble Lords, both during debate in Grand Committee and subsequently. In particular, I have listened to concerns that the focus on age is unhelpful or unclear in its intention and could lead to support being denied on the basis of a young person’s age alone. I have therefore tabled government amendments to clarify our intention in the Bill. I am pleased to be presenting these amendments with the support of my noble friends Lady Sharp and Lady Cumberlege, who spoke incisively on this issue in Grand Committee.

17:30

The amendments remove the explicit requirement to have regard to a young person’s age, instead requiring local authorities to consider whether a young person aged over 18 needs more time to complete their education when determining whether to make an EHC plan, and whether they have achieved the outcomes specified in their plan before determining that it should end. As ever, local authorities must make that judgment in close consultation with young people, who will have access to mediation and can appeal to the SEN tribunal if they are unhappy with the decision.

I am grateful also to the noble Baronesses, Lady Hughes and Lady Jones, for their amendments seeking to require consideration of “educational progress” rather than age. I am pleased that we have achieved such a degree of consensus. I hope that noble Lords will support my proposed amendments, which represent a very positive improvement to the Bill and reflect the very constructive and helpful debates that we have had in this House. I beg to move.

[Baroness Cumberlege (Con)]

My Lords, I am delighted to be able to support my noble friend on these amendments which remove the requirement for local authorities to have regard to age when making decisions about the education, health and care plans for young people.

Amendment 173, which I proposed in Grand Committee and in which I was supported by the noble Baronesses, Lady Hughes and Lady Jones, aimed to achieve the same end that has been put forward in these amendments. As my noble friend said, it removes Clause 45(4). I applaud the Government for recognising the force of our arguments and for putting forward these very important amendments, which will make a significant difference not only to the Act when it is passed but to the young people concerned, which clearly is the most important part of this amendment.

Like many other noble Lords, I pay a personal tribute to my noble friend Lord Nash, who has been generous in the time he has spent discussing this aspect of the Bill with me and many other noble Lords and in the determination that he has shown to get it right for young people at what many of us consider to be the most important time of transition in their lives. I am very grateful for his recognition that some young people with special educational needs require more time to complete their education beyond the age of 18. Of course, that has now been translated into the amendment in the Bill. This requires local authorities to consider whether the young person requires additional time to complete his or her education or training. That is a very good thing indeed.

My noble friend will know from the amendment that I proposed in Grand Committee that I believe that local authorities should be required to have regard not only to whether education and training outcomes have been achieved but to whether,

“health and social care outcomes have been achieved”.

The Government did not support that amendment. Nevertheless, I welcome the proposed amendments to Clauses 44 and 45 which will require local authorities, when reviewing a plan or considering whether to propose the cessation of an EHC plan, to have regard to whether the education or training outcomes specified have been achieved. Focusing on outcomes is much more important for young people with complex special educational needs. Their chronological age is far less relevant than whether they have achieved the skills that will enable them to make a successful transition to adult life.

I have one remaining concern, however, and a request to my noble friend. I am worried that some people may mistakenly interpret the phrase “education and training outcomes” in too narrow a way and relate these primarily to formal accredited learning and qualifications. I know from my noble friend’s visit to the Chailey Heritage Foundation that he understands that, for some young people with complex needs, the learning educational outcomes they achieve will not be appropriately assessed and recognised through the usual formal accredited qualifications. It would be most unfortunate if local authorities sought to stop EHC plans for young people with complex needs because the outcomes they wanted to achieve post-18 were not ones that could be formally accredited.

The code of practice should be explicit about the full range of educational outcomes that might be legitimately included in an EHC plan. I therefore ask for assurance that the code of practice will make clear that the educational and training outcomes in these clauses will be considered in the wider sense and not restricted to accredited learning or formal qualifications.

[Baroness Sharp of Guildford]

My Lords, my name is attached to many of these amendments and I am delighted to support them all. I also pay tribute to the Minister for having listened to the arguments that we put forward in Committee.

First, it was suggested in Committee that some young people over 18 might not need the help and support they had been getting. That would provide local authorities with an excuse for dropping such support after 18 by using those words “to have regard to age”. Secondly, and perhaps more importantly, it was said that the wording was too flexible. We all know that circumstances can vary enormously and that some young people with SEN are ready by the age of 18 to stand on their own and that—partly thanks to the help and support they have received—they are well able to cope without further support. However, others mature later and need to be given extra help and support. Indeed, they often need to take longer, as the noble Baroness, Lady Cumberlege, indicated, over the process of learning and acquiring skills and qualifications. The Minister agreed with those arguments and stated very clearly in his response that the provision of continuing support was not a matter of age but of whether the young person concerned was ready to move into adult life. He was not prepared to move initially in Committee but he said that he was very willing to meet us. The amendments that he has introduced today very largely meet the points that we made then and show that he has very much heeded those arguments. The new wording introduced today meets our requirements.

The first of the two key amendments is Amendment 34D to Clause 36. The wording,

“have regard to his or her age”,

will be changed to,

“consider whether he or she requires additional time, in comparison to the majority of others of the same age who do not have special educational needs, to complete his or her education or training”.

In Amendment 39B to Clause 44, “his or her age” will be omitted and the words,

“whether the educational or training outcomes specified in the plan have been achieved”,

will be inserted. As the revised wording implies, the clear intention is that local authorities should be flexible in their approach, and should above all consider whether the young person has reached a point where they can do without the extra help and support that an EHC plan would give them. It is clear from the various case studies provided to us by those who are anxious to see the wording changed, that many young people need and will benefit from this flexible approach. I again thank the Minister and the Bill team for their readiness to listen to our arguments and to make these changes.

However, there is some unhappiness among those providing education and training to over-18s with special educational needs about the current wording of the draft code of practice. In particular, they think that there is a degree of inconsistency in it. At some points the draft code rightly emphasises—as the wording of the amended Bill does—the needs of the individual, whether the outcomes specified in the EHC plan have been achieved and whether the young person is ready to enter and cope with adulthood. At other times the code seems to point to the cliff edge—that once a young person reaches the age of 18, it is no longer necessary to maintain the plan. Could the Minister and his officials, having now amended the Bill, make sure that the code of practice fully reflects the amendments that we have made?

In general, I reiterate how very grateful those for whom I have been speaking in relation to these issues and I are to the Minister and his officials for listening to us, and for amending the Bill.

[Baroness Howarth of Breckland]

My Lords, I add my thanks and make two brief points. First, this will convey a message to the young people themselves. It is not often that legislation matters to the recipients so directly in sending a message. Transition is a very difficult time for people with special educational needs and severe disabilities. Added to all the difficulties that they have of movement of placement and, often, of changes to the personnel involved in their care, has been the suggestion that their age mattered. To them, it does not matter to the transition that they will make to the adult world, because they are not like everyone else who is 18; they are all difficult, but certainly not like most 18 year-olds. This will mean that, in the words of the noble Baroness, Lady Sharp, the needs of the individual will be met. That is a really important message.

I am concerned, as is the noble Baroness, Lady Cumberlege, about the link to health and social care, because it simply cannot be avoided. I am sure that there will be issues around the code of practice. If you are admitted to a residential college because you have severe learning difficulties and physical disabilities, combined with the residential placement will be a series of health provisions. That will all be part of the package, so you have to have regard to all that as well. The Minister may say that that will come anyway because commissioning will be expected for that—but this is something that still worries a number of providers and families as well as individual youngsters, who need very specialist healthcare in their placements and are concerned that that might not continue beyond their 18th birthday, even if their education does.

[Lord Pearson of Rannoch]

My Lords, I rise briefly to speak to Amendment 39CA, which has been put in this group. I apologise for tabling the amendment so late in our proceedings and for not taking part in those proceedings so far, or in your Lordships’ consideration of the Care Bill, which has now gone to the Commons. As on many previous occasions, I declare my interest as the father of a daughter with Down’s syndrome, although because she is now 32 that interest is not directly relevant to this amendment.

I tabled the amendment because I was contacted shortly before we rose for the Christmas Recess by some cerebral palsy practitioners who could not see how this Bill ensures continuity of support from child to adulthood for children with learning disabilities—hence this probing amendment, which I do not pretend is perfectly worded. It focuses on Clause 37 of the Care Bill, which deals with continuity of support when an adult moves geographically. It may have been better to focus it on Clause 67 of the Care Bill, which is described in the Explanatory Notes as being designed,

“to ensure no gap in provision during the transition to adult care and support”.

That is what the amendment seeks to secure. I would be very grateful if the Minister could confirm whether that is what Clause 67 does, or if and how that well known gap is closed elsewhere in this Bill or the Care Bill. When he comes to reply, I would be particularly grateful if he could explain what the words,

“or for some other reason”,

mean in Clause 67 of the Care Bill, on page 57, in line 36—and, again, on page 59, in line 1. At first sight, they appear to give wide discretion to a local authority not to meet a person’s needs after it has concluded that he has such needs. If true, that would appear to affect children moving to adulthood as well.

I have discussed this matter with the noble Lord’s officials. I appreciate that it strays somewhat into Care Bill territory, but I would be most grateful for anything that the Minister feels able to say about the position, in plain language. I look forward to his remarks.

17:45

[Baroness Hughes of Stretford]

My Lords, I rise briefly to make two points. First, I welcome the amendments. The wording of the government amendments is very sensible and I am pleased that the Minister has listened. The critical moment was when the Government published their policy position on this issue when it was crystal clear to everyone that the position as outlined was not reflected by the words “having regard to age” in the Bill. That was a kind of “light bulb” moment, and I am pleased that they have recognised that. The wording in so far as it goes is fine, and I am very pleased to support it.

Secondly, I commend the points made by the noble Baroness, Lady Cumberlege, repeated by the noble Baronesses, Lady Sharp and Lady Howarth. It is important that the Government pay attention to the way in which the code of practice reflects this change and make sure that the wording in the code is expansive rather than restrictive on local authorities and other service providers, so that they can look in the round at these young people as they approach and go beyond 18, in terms of their various needs, and not limit it only to a formal definition of education and training. I look forward to the Minister’s remarks on that, but I very much welcome the changes.

[Lord Nash]

My Lords, I thank again my noble friends Lady Sharp and Lady Cumberlege, as well as the noble Baroness, Lady Howarth, for their insights during Grand Committee. I welcome the opportunity that the noble Lord, Lord Pearson, has given us to clarify how we have secured continuity of adult care for young people with EHC plans. I also thank the noble Baroness, Lady Jones, for her kind remarks.

On the point made by my noble friend Lady Cumberlege, yes, we are making it clear that the outcomes that we are looking for are wider. The outcomes specified in the plan do not have to be formal or accredited; we are happy to make sure that that is clear in the code. On a point made more generally by my noble friend Lady Sharp, the draft code predates the amendments, and we will make sure that the code fully reflects the amendments, including making it clear that outcomes rather than age must be considered.

In response to the important issues raised by the noble Lord, Lord Pearson, I am delighted to state categorically that no young person who turns 18 and is in receipt of children’s social care will face a gap in provision while consideration is made about their adult care. This applies if they move to a new local authority or if their EHC plan comes to an end at that point because they are leaving education. Clause 47 provides for regulations that ensure continuity of support and provision when a child or young person with an EHC plan moves to a different local authority. For those turning 18, Clause 50 enables local authorities to extend children’s services beyond the age of 18 for those with an EHC plan where that is the best option. Provisions in the Care Bill ensure that there is no gap in care services when a young person moves to a different area, turns 18 or their EHC plan comes to an end. Those 18 year-olds who have eligible needs for care and support will in future receive a statutory care and support plan. Both we and the Department of Health are clear that this will form the care part of their EHC plan when one is in place and would continue in its own right as a statutory plan once their EHC plan is no longer maintained.

Furthermore, Clauses 37 and 38 of the Care Bill ensure that support is continued when someone with a statutory care and support plan moves to a new local authority. When a young person turns 18, Clauses 59 to 67 of the Care Bill ensure that assessments for adult care are carried out in good time so that support can be put in place promptly. In particular, Clause 67 requires local authorities to continue to provide existing support under Section 17 of the Children Act 1989 or under the Chronically Sick and Disabled Persons Act 1970 until adult care begins, or a decision is made that an adult care and support plan is not required. Young people who have made a successful transition to adulthood and are now in employment, higher education or adult learning, will continue to receive support in those settings that will 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.

As regards the point made by the noble Lord, Lord Pearson, about the reading of the words “for some other reason”, the Department of Health is clear that this phrase does not in any way change a local authority’s duty to meet an adult’s eligible needs for care and support under Clause 81 of the Care Bill. “Other reasons” could refer to, for example, a person changing their place of residence to a different local authority area before the assessment has been completed. It does not provide carte blanche for local authorities to refuse to provide services for spurious reasons. I hope that is helpful. I believe that the amendments I am moving today represent a genuinely positive change to the Bill, which, along with reforms in the Care Bill, further strengthen arrangements for young people making the transition to adulthood. I hope that noble Lords will support them.

Amendment 34C agreed.

Amendment 34D

Moved by

[Lord Nash]

34D: Clause 36, page 30, line 21, leave out “have regard to his or her age” and insert “consider whether he or she requires additional time, in comparison to the majority of others of the same age who do not have special educational needs, to complete his or her education or training”

Amendment 34D agreed.

Amendment 34E not moved.

Clause 37: Education, health and care plans

Amendment 34F

Moved by

[Baroness Sharp of Guildford]

34F: Clause 37, page 31, line 10, leave out subsection (4)

Amendment 34F agreed.

Amendment 34G not moved.

Clause 38: Preparation of EHC plans: draft plan

Amendment 35 not moved.

Clause 39: Finalising EHC plans: request for particular school or other institution

Amendment 36 not moved.

Clause 41: Independent special schools and special post-16 institutions: approval

Amendment 37 not moved.

Clause 42: Duty to secure special educational provision and health care provision in accordance with EHC Plan

Amendment 38

Moved by

[Lord Rix]

38: Clause 42, page 34, line 10, at end insert—
“( ) If the plan specifies social care provision, the responsible local authority must secure the specified social care provision for the child or young person.”

[Lord Rix (CB)]

Noble Lords will have noticed, no doubt, that Amendment 38 would place a duty to deliver the social care element of the forthcoming education, health and care plans, which gives me an excuse to indulge for a short time in a worry that has bothered me for more than 30 years. In the 1980s, I began to have discussions with civil servants, politicians and administrators, particularly at the old DHSS—then located at the Elephant and Castle—about increasing co-operation between education, health and social care, and was told on many occasions that this was the recognised way forward. The will seems always to have been there, but meaningful co-ordination and collaboration on the ground has failed to emerge. It has been entirely dependent on local circumstance. We need to change that.

To the Government’s credit, they have recognised the problem and have taken the very welcome step forward of amending the Bill so that clinical commissioning groups are under a duty to provide the health element of the plan—but, alas, social care remains the poor cousin. This could easily be remedied by aligning the duty to provide social care services, as laid down in the Chronically Sick and Disabled Persons Act 1970, with the education, health and care plans that appear in the Bill. In this suggestion I am supported by not only my fellow signatories to the amendment but by the Special Educational Consortium and the Every Disabled Child Matters campaign.

Currently, many families do not receive the care they need until they reach breaking point—something to which Mencap drew attention in a recent report of that name. A duty to deliver the care elements of the plan will ensure that children, young people and their families receive services earlier, thus preventing the need for higher levels of support later. I understand that the Government are looking into this matter— something I warmly welcome, if the outcome is correct. I look forward to the Minister’s response. I beg to move.

[Lord Low of Dalston]

My Lords, my name is on the amendment and I wish to give my full support to my noble friend Lord Rix, who moved it. It would place a duty on local authorities to deliver the social care services identified in education, health and care plans. The contention of the noble Lord, myself and the other noble Lords who have their names on the amendment is that there is very little point in assessing a child or young person’s needs, identifying social care needs and putting them in the education and health plan, and then not making the plan enforceable in respect of social care as it is in respect of education provision.

As I think the noble Lord, Lord Rix, indicated, the amendment would add no new duties on local authorities to provide social care in addition to those that already exist. It merely brings together the legislation on education, health and care plans and existing social care legislation. There is currently a misconception that the social care duties in respect of disabled children are not specifically enforceable for an individual child. However, as I think the Government accept, this duty does already exist under Section 2 of the Chronically Sick and Disabled Persons Act 1970. The proposal contained in this amendment would help to correct this misconception.

The Government have argued that a proposal to create an individually owed duty in relation to social care would prioritise one group of children in need over another. However, there is already an individually owed duty to disabled children in Section 2 of the Chronically Sick and Disabled Persons Act, as I indicated, which is not enjoyed by other children in need. We had a good discussion about this in one of the Minister’s meetings with Peers, which I think we all found very valuable in developing our understanding of the Bill. I think we managed to elucidate in that discussion that if one were going to establish priorities between different groups of recipients of social care, it would have to be done at a prior stage to the formulation of the education, health and care plan. If the authority has got to the point of identifying social care needs and putting them in the plan, it really does not make any sense in terms of integrated education, health and social care provision not to make the provision identified in the plan enforceable.

[Baroness Hollins (CB)]

My Lords, I, too, add my support to the amendment moved by my noble friend Lord Rix, which aims to ensure that children and young people receive the care to which they are entitled. I empathise with the battle to get health, education and social care agencies to work together; it is one that I waged on behalf of my son in the past. I know, of course, that I am not alone here and that parents across the country face this uphill struggle.

The absence of a duty to deliver the social care elements of the plan sends out the dangerous message that care is unimportant alongside education and health provisions. It is, as my noble friend says, the poor cousin. For children and young people with a learning disability and their families, this could not be further from the truth. Good social care plays an important part in helping the child or young person achieve their educational goals. That is accepted, whether it is in relation to independent living, supported employment, employment or moving on to further learning. Good social care prevents burnout in families. I understand and am glad that the Government have accepted that there is an issue here, and I look forward to the Minister’s response.

18:00

[Baroness Sharp of Guildford]

My Lords, my name is also attached to the amendment. I endorse what has already been said by the noble Lords, Lord Rix and Lord Low, and by the noble Baroness, Lady Hollins.

As currently drafted in the Bill, special educational provision has to be secured by local authorities. In Committee in the House of Commons, the Government tabled an amendment that places health commissioners under a duty to arrange any health provision set out in the plan. It leaves social care as the only element of an EHC plan that is not enforceable. However, if you create an education, health and care plan, it does not make sense if there is no specific duty to provide the social care services for young people set out in the plan. As the noble Lords, Lord Rix and Lord Low, indicated, there is already provision in Section 2 of the Chronically Sick and Disabled Persons Act 1970 for a specific duty to provide social care services for disabled children.

That picks up on a point made by the noble Baroness, Lady Cumberlege, when we were debating the previous amendment, about her worry that there was no enforcement mechanism to make sure that the social care provisions, which need to be integrated with the education and health provisions, are there. That point has been made time and time again by the noble Baroness, Lady Howarth. It is not logical that we have enforcement mechanisms for education and health but none for social care.

[Baroness Howarth of Breckland]

My Lords, I want briefly to say what I have said several times. If you have a package for education and health, you cannot fail to include the social care element. What I am hoping is that the Minister will give the same answer that he has just given on my previous point—that such provision is contained in the Care Bill. Having looked at the progress made in the way that these services are delivered, that Bill will ensure that the social care element can be provided along with the health element. That is really important because the three are inseparable in the provision of services, particularly for very severely disabled young people. I therefore hope that the answer will be that such provision is already there in another piece of legislation.

[Baroness Wilkins]

My Lords, I, too, add my support for the amendment. For this system to be truly joined up, all parts of the education, health and care plan need to be enforceable; otherwise, social care will be, as has been described, the poor cousin—the element within the EHC plan that will be considered to be of least importance. This is of concern to a wide range of children and young people with SEN and disabilities. We know that parents, too, are concerned about this; in fact, more than 1,000 people have written to the Minister on the issue and asked the Government to ensure that social care will be an equal partner in education, health and care plans. I am therefore encouraged to learn that the Government are looking into the issue in more detail. I very much welcome this and look forward to the Minister’s response.

[Baroness Eaton]

My Lords, perhaps the Minister can clarify what I understood was the situation, whereby there is already in existence a statutory duty under Section 17 of the Children Act 1989 for local authorities to provide services in their area to meet the needs of children in need, including disabled children.

In the case of services for disabled children, under Section 2 of the Chronically Sick and Disabled Persons Act 1970, once the local authority is satisfied that it is necessary to provide assistance under that section, it is under a duty to provide the assistance. It is not, however, necessarily the case that services must be provided to meet every assessed need. Whether a children’s services authority has to provide services following assessment depends on the nature and extent of the need assessed, and on the consequences of not providing the service. These duties have already been the subject of significant litigation, and it may be that imposing a social care duty under the Bill would further complicate an already complex legal position.

[The Lord Bishop of Ripon and Leeds]

My Lords, I, too, add my support for the amendment and my gratitude to those who have fought so hard to bring it forward. For reasons that have already been expressed in terms of the parity between the three elements of education, health and social care, there is a continuing danger, time and again, in our legislation and in our thinking, that social care becomes an orphaned right—to take an analogy from another area.

I want to push Minister a bit further on the argument that has been put forward that if we pass an amendment such as this, other areas will thereby be deprioritised. I simply fail to understand, despite having read a good deal about it, how that can possibly be so. It seems to me that equality in this area is crucial, and therefore that we ought to pursue an amendment such as this.

[Lord Storey]

My Lords, if you are going to agree an education, health and care plan, it is clearly important that all elements have to be provided. That is agreed. I understand that there are complex difficulties here. I have spoken to the Local Government Association, which recognises those difficulties. I know that the Minister himself is—perhaps “wrestling” is too strong a word—looking in detail at how we can get what we all want. I hope that your Lordships will be patient on the issue, because I am sure that with good will on all sides we will eventually get there.

[Baroness Hughes of Stretford]

My Lords, my name is also attached to the amendment and I respectfully suggest to your Lordships that this is one of two outstanding, key issues on which the effective implementation of the Government’s welcome approach to integration of education, health and social care depends.

Clause 42 states that where a local authority maintains an ECH plan it must secure the special educational provision. Where the plan specifies healthcare provision, the responsible commissioning body must provide the healthcare. The amendment would simply place a parallel duty on local authorities to provide the social care that is outlined in the plan. This is a key issue for parents as well as, obviously, for many noble Lords in this House. As the legislation is currently drafted, the ECH plans would offer no more legal entitlements to support from social care services than current statements do at the moment. Let us remember that social care provision can be detailed in those statements in a separate section from educational provision. However, the aim of these reforms and the Bill is to provide a simpler system for disabled children and young people, and those with special educational needs and their families, that integrates the different forms of provision into one piece of legislation. One assessment and one plan is what the Government are trying to achieve for those families. There is an opportunity in the Bill to bring everything together. One of the main aims of the Bill is to provide clarity, transparency and integration, as the noble Baroness, Lady Sharp, so eloquently identified.

In Committee and at the various meetings that we have had on this matter, while the Minister has been trying to listen, I do not think that so far the Government have provided any coherent reason for excluding the local authority from the duty to provide the social care specified in the plan. As the noble Lord, Lord Low, reminded us, the first argument put by the Government was that other legislation—the Chronically Sick and Disabled Persons Act together with the Children Act—already provide for that duty. A second argument deployed at later meetings was that placing such a duty in this Bill would give disabled children an unacceptable priority in law above other children in need.

The debate has been rather clouded by well meaning but exceedingly technical legal opinions on both sides. However, the clearest and most helpful opinion has come in the further opinion, dated 13 May 2013, from the lawyers commissioned by the sector. This asked the crucial question in relation to these different arguments as to whether placing local authorities under a duty to deliver the social care set out in the plans would represent a significant change to local authorities’ legal duties under that existing legislation. The crucial question is whether it would represent a significant change. The answer in the opinion is emphatically no. If noble Lords will bear with me, it is worth putting this opinion on the record.

The crucial question asked is whether placing local authorities under a duty to deliver the social care provision set out in the EHC plans would represent a significant change to local authorities’ legal duties in other legislation. Paragraph 13 of the opinion states:

“No. If there were to be a specific duty to provide the social care provision set out in an EHC Plan, this would simply mean that the Local Authority would be discharging its CSDPA 1970 duty (either wholly or in part) by providing the provision set out in the Plan. Indeed, for children who qualify for an EHC Plan the inclusion of social care provision within the Plan is a helpful way of determining that the Local Authority considers that this provision is necessary to meet their needs—in other words that the test for the 1970 Act duty to arise is met”.

The opinion goes on to say:

“This is very similar to the approach that the Government has adopted in relation to the duty to arrange health care provision … the Government accepts that in arranging the provision specified in the plan a CCG”—

a clinical commissioning group—

“will be discharging its existing duty pursuant to section 3 of the NHS Act 2006”.

This was a question that we asked in Committee: why the difference between social care and healthcare? Paragraph 14 states:

“Any concern that this would involve treating disabled children more favourably than other groups of children ‘in need’ is misplaced. Firstly, disabled children have already benefited”—

for more than 40 years—

“from the specific duty … in the CSDPA 1970 to provide them with support, a benefit which other children ‘in need’ do not enjoy … Secondly, it is a well established tenet of discrimination law that reasonable positive measures intended to correct significant disadvantage experienced by a particular group are unlikely to be discriminatory. Indeed Equality Act 2010 … provides that compliance with the public sector equality duty … ‘may involve treating some persons more favourably than others’”.

Therefore, in this view, the inclusion of social care under the duty to provide the services specified in an EHC plan would not make a significant difference to existing entitlements in social care and, indeed, is simply consistent with local authorities’ current duties.

However, there would be a number of significant advantages to putting this duty into this Bill as well. A main advantage is that it would clarify for parents the responsibilities of the three agencies together regarding what must provided—in other words, everything in the plan—and that would be a very big benefit for parents. Secondly, it would consolidate the integrated approach that runs right through this Bill until we get to social care. Thirdly, it would give children under 18 the same demonstrable, enforceable rights that adults already have under the Chronically Sick and Disabled Persons Act, and thus there would be a seamless and equal status for disabled children from birth to 25. Those are the simplest legal arguments in favour of the amendment.

18:15

However, even simpler is the fact that we are talking about making explicitly enforceable the social care services specified in the plan—that is, those that the local authority itself has willingly assessed the child as needing and has agreed to include in the plan. The local authority will be assessing that level of need in the context of its duties and its resources, as will the health services.

Therefore, I do not think that there is a credible argument for distinguishing between special education, health and social care in relation to the duty outlined in Clause 42, and I hope that the Government and the Minister will listen on this very important issue, as they have done on other issues.

[Lord Nash]

My Lords, I thank the noble Lords, Lord Rix and Lord Low, the noble Baroness, Lady Hughes, and my noble friend Lady Sharp for raising this important matter. I also welcomed the high-quality debate on social care in Grand Committee. I understand fully all the concerns expressed by noble Lords and I say again that it remains our clear expectation that any social care services specified in an EHC plan will be provided by local authorities. As I shall explain, I hope that at Third Reading we will be able to bring forward amendments to address some of those concerns.

However, it is vital that local authorities are able to decide how to prioritise expenditure on social care based on the needs of children and young people, whether or not they have an EHC plan. As a targeted service for vulnerable children and young people, social care is different from education and health services. Education and health services are universal and it makes sense that there should be equivalent duties to provide the services in EHC plans in order to prioritise, over others, children and young people with greater needs.

Social care is a targeted service and is available only for vulnerable children and young people, so there is a greater risk that an individually owed duty for those with plans could adversely affect other vulnerable groups, including children at risk of neglect. We do not think that that is the right thing to do. In answer to a point made by the noble Baroness, Lady Hughes, and the right reverend Prelate the Bishop of Ripon and Leeds, I am afraid that it is really a question of resources. However, I am delighted to hear the noble Baroness, Lady Hughes, say that this is one of two remaining pieces in the jigsaw. I am dying to hear what the second one is and I am sure that I will not have to wait long. However, I hope that I shall be able to be helpful in relation to this point.

I do not propose to rehearse further all the important arguments that were made in Grand Committee except to recognise that a number of points have been raised by noble Lords about the Chronically Sick and Disabled Persons Act 1970. It is important to re-emphasise that, regardless of whether social care provision is included in the EHC plan, the duties in existing legislation will continue to apply, as a number of noble Lords have said. Therefore, the requirement for EHC plans to include social care provision “reasonably required” by the learning difficulty or disability which gives rise to the SEN will not introduce a new test for which social care services are to be provided. The duty of local authorities to provide services to disabled children where it is decided that they are necessary under the CSDPA will continue to apply.

I recognise that a number of noble Lords, along with representatives of Every Disabled Child Matters and the Special Educational Consortium, are attracted to including the CSDPA in the Bill as a means of, first, providing assurance that assessed social care needs for disabled children will be met under the existing duty in Section 2 of the CSDPA and, secondly, ensuring that the EHC plan includes all the relevant social care services needed by disabled children.

The Minister for Children and Families and I have had helpful meetings with representatives of the Special Educational Consortium and noble Lords where we have discussed this proposal, and officials at the Department for Education are continuing those discussions. There are of course a number of important issues to consider and we need to avoid unintended consequences. For example, we need to ensure that including the 1970 Act in the Bill will not cause confusion if other relevant legislation is not also listed. We must also ensure that we do all we can in the SEN code of practice to explain the existing legislation clearly to parents and professionals. However, I am hopeful of a positive outcome to these discussions and hope to bring forward an amendment at Third Reading to reflect this. In view of these ongoing discussions and my undertaking, I urge the noble Lords, Lord Rix and Lord Low, the noble Baroness, Lady Hughes, and my noble friend Lady Sharp not to press their amendment.

[Lord Rix]

My Lords, I thank every noble Lord who spoke in support of this amendment. Clearly there is greater support than the number of noble Lords present at the moment and I most grateful, too, to the Minister for his response. I can only take him at his word, which I am sure is totally unassailable, and trust that the amendment that he brings forward at Third Reading will, indeed, support all of us who have wished for Amendment 38 to be accepted. Obviously, he will bring forth something which is not quite Amendment 38, but I hope that it will satisfy all of us here concerned and ensure that social care is, in some form or another, in the Bill. With that assurance ringing in my ears, I beg leave to withdraw the amendment.

Amendment 38 withdrawn.

Amendment 38A

Moved by

[Baroness Northover]

38A: Clause 42, page 34, line 14, leave out “to the extent that” and insert “if”

[Baroness Northover]

My Lords, both this amendment and Amendment 42 in the name of the noble Countess, Lady Mar, are concerned with the roles of parents, young people and local authorities in making decisions about support for those with education, health and care plans.

Government Amendment 38A is a technical amendment to Clause 42. In the current system, set out in the Education Act 1996, when a statement is maintained for a child or young person the local authority is under a duty to secure the special educational provision specified in it. If a local authority names an independent school or college in the statement as special educational provision it must, under Clause 59, meet the costs of the fees, including any boarding and lodging where relevant. However, the local authority is relieved of its duty to arrange the special educational provision in the statement, including securing a place in a school or college named in a statement of SEN, if the parents or the young person have made suitable alternative arrangements for special educational provision to be made, for example, in an independent school or college or at home.

The Bill introduced to Parliament in February 2013 retained this provision, but when government amendments were introduced in Committee in the other place to place a duty on heath bodies to arrange the healthcare provision specified in an education, health and care plan, Clause 42 was amended so that, under Clause 42(5), local authorities’ and health bodies’ duties to secure and arrange specified provision would not apply,

“to the extent that the child’s parent or the young person has made suitable alternative arrangements”.

We made this change with the intention of ensuring that, in cases where a parent or young person had made suitable alternative arrangements only for education provision, the duty on responsible health commissioners to arrange required health provision would remain in place. On reflection, that wording is problematic and could have unintended consequences, since it could be interpreted to mean that when a parent or young person makes alternative arrangements for only some of the provision the local authority or health body is only relieved from its duty to make that provision and must secure and arrange the remainder. This would not be sensible or fair.

Amendment 38A would address this issue and ensure that local authorities have a clear duty to secure the special educational provision in a child or young person’s education, health and care plan; it would enable parents or young people to make alternative arrangements; it would require local authorities to satisfy themselves that those arrangements are suitable; and it would enable local authorities to assist parents in making their own arrangements suitable, if they consider it appropriate, without imposing any duty on them to do so. It has not been sufficiently clear that local authorities can assist parents in this way until now and I am pleased that this amendment gives me the opportunity to clarify the position.

Where parents or a young person make alternative arrangements, the local authority must satisfy itself that those arrangements are suitable before it is relieved of its duty to secure the provision. It can only conclude that arrangements are suitable if there is a realistic possibility of them being funded for a reasonable period of time. If it is satisfied, the authority need not name its nominated school or college in the plan and may specify only the type of provision. This is to avoid the school having to keep a place free that the parents have no intention of taking up. If the local authority is not satisfied that the parent or young person’s alternative arrangements are suitable, it could either name another appropriate school or college in the EHC plan or assist parents in making their arrangements suitable, including, if they consider it appropriate, through a financial contribution, though it will be under no obligation to meet the costs of those arrangements.

Where parents make suitable alternative arrangements for educational provision, the health commissioning body is still responsible for arranging the healthcare specified in the child or young person’s EHC plan. If parents make alternative arrangements for healthcare provision, then the health commissioning body would need to satisfy itself that those arrangements were suitable. If the arrangements were not suitable, they would arrange the provision specified in the plan or, if they felt it appropriate, assist the parents in making their own arrangements suitable. We will, of course, clarify this position in the SEN code of practice. I beg to move Amendment 38A.

[Baroness Massey of Darwen (Lab)]

My Lords, I thank the Minister for introducing this group of amendments so comprehensively. Amendment 42 is a probing amendment and the issues in it have been discussed before. The noble Countess, Lady Mar, has asked me to give her apologies for being absent. She emailed me about two hours ago to say that she was on the point of going to the operating theatre to have her appendix out. How she e-mailed at that time, I do not know, but I was asked to pass on the message and I have done so.

[Lord Lucas (Con)]

My Lords, I am grateful to the noble Baroness for such a clear and extensive explanation of this amendment. As she will know, it is a very important word when it comes to the home education community and I think that her explanation has provided all the comfort that they need as to what their situation will be in the future.

[Baroness Northover]

I thank noble Lords for their support and I wish the noble Countess, Lady Mar, well.

Amendment 38A agreed.

Clause 43: Schools and other institutions named in EHC plan: duty to admit

Amendment 39 not moved.

Amendment 39A had been withdrawn from the Marshalled List.

Clause 44: Reviews and re-assessments

Amendment 39B

Moved by

[Lord Nash]

39B: Clause 44, page 35, line 9, leave out “his or her age” and insert “whether the educational or training outcomes specified in the plan have been achieved”

[The Deputy Speaker (Baroness Harris of Richmond)]

If Amendment 39B is agreed to, I cannot call Amendment 39C by reason of pre-emption.

Amendment 39B agreed.

Amendment 39C not moved.

Clause 45: Ceasing to maintain an EHC plan

Amendment 39CA not moved.

Amendments 39D and 39E

Moved by

[Lord Nash]

39D: Clause 45, page 35, line 37, leave out “child or young person” and insert “young person aged over 18”

39E: Clause 45, page 35, line 39, after “educational” insert “or training”

Amendments 39D and 39E agreed.

Amendment 39F

Moved by

[Baroness Sharp of Guildford]

39F: Clause 45, page 35, line 41, leave out subsection (4)

Amendment 39F agreed.

Amendment 39G not moved.

18:30

Clause 47: Transfer of EHC plans

Amendment 39GA

Moved by

[Lord Lingfield]

39GA: Clause 47, page 36, line 29, at end insert—
“( ) Regulations shall make provision to specify those sections of an EHC plan prepared for a young person that must be transferred into—
(a) a needs assessment for disabled students’ allowances for that young person; or(b) any other assessment of need concerning the access of that young person to higher education.”

[Lord Lingfield (Con)]

My Lords, I put down a probing amendment in Committee which was meant to draw attention to the position of young people with EHC plans at school when they enter university. Your Lordships will remember why we welcomed the EHC plan carrying on to age 25 for those engaged in further education and other courses, but the process seems—illogically—to start again for those entering higher education. During the debate there was a general view, with which I concurred, especially from the noble Lord, Lord Low, and my noble friends Lord Addington and Lord Lucas, that regulation and guidance should focus on making the transitional arrangements between school or college and higher education as easy as possible for the students concerned. The point was made that it was not clear how the Bill would improve the current imperfect arrangements.

The Minister’s reply was encouraging; she agreed with this aim but stated that universities, not local authorities, were the best places to support young people at this transition period. She also said that local authorities should encourage young people to make an early claim for disabled student’s allowance so that support is in place when their courses begin. No one could disagree with this.

However, not all local authorities are good in their communications with young people with disabilities and, of course, the earliest that a student usually can begin these negotiations with universities is at the end of August, when A-level results lead to the confirmation of the offer of a course to begin some seven or eight weeks afterwards. Whereas universities—as the Minister pointed out—have a good record of publishing their objectives for the disabled, their record in achieving them is patchy throughout the system. We are told this by parents and students.

Section 7.19 of the code of practice sets out the Government’s expectations on transition and, although it is limited to four paragraphs, it contains some positive elements. For instance, it states:

“Where a young person with an EHC plan makes a claim for DSA, local authorities must (with the young person’s permission) pass a copy of their Plan to the relevant DSA assessor, to support and inform the application”.

However, it is not clear what “support and inform” will mean in practice. At best it could mean that the EHC plan is accepted in full as part of the DSA assessment, but the wording is too vague for us to be confident about this.

My amendment, which is a probing amendment, would add further subsections to Clause 47 which would require regulations to be made to specify those sections of an EHC plan that must be transferred into the needs assessment for the disabled student’s allowance—or, indeed, into any other formal assessment of need for other sources of funding which might become subsequently available. Obviously, the needs of young people with disabilities can change at university: what might be appropriate provision, for instance, for someone with profound hearing difficulties in the school classroom may not necessarily be suitable for a large lecture theatre at university.

My point is that a student entering university should have the same continuity of protection via the contents of his or her EHC plan as a student entering further education. I hope that the Minister will reassure me that the regulations will be strengthened, even if not necessarily in the way that the amendment suggests, in order to ensure that this is so, and to give comfort to many young people and parents who are very concerned about this. I beg to move.

[Baroness Northover]

My Lords, I am grateful to my noble friend Lord Lingfield for his amendment and for the eloquent way in which he put his important case. As my noble friend will know, we very much share his ambition to support young people with SEN and disabilities into university. We must have high expectations for these young people and provide the right provision and support through EHC plans to help them achieve their goals.

My noble friend pointed to the value of the disabled student’s allowance. DSAs, of course, are not means tested but are awarded in addition to the standard package of support and do not have to be repaid, and it is encouraging to see the take-up of DSA in this area. He is also right that we should do everything we can to ensure that young people get the support that they need and that the assessments for the new types of support build on what they had before rather than starting from square one—that was his key point.

Following debate on the issue during earlier stages of the Bill, we made some important improvements to the draft assessment and plan regulations, and to the draft code of practice. I hope that my noble friend will be reassured by those. The changes make it clear that local authorities must share a copy of the EHC plan with the relevant higher educational institution and with the DSA assessor—with the young person’s consent, of course—and that local authorities should make young people aware of the support available to them in higher education through their local offer, including the disabled student’s allowance, and how they can make an early claim so that support is in place when they start their course.

Our intention here is very similar to that of my noble friend. We want the valuable information contained within an EHC assessment to be shared both with the person assessing them for the disabled student’s allowance and with the institution they are planning to attend so that other provision may be made, as appropriate, in line with the institution’s own policies. I hope my noble friend will agree that creating further regulation in this area is unnecessary. I appreciate the flexibility of approach in his amendment.

The information within an EHC assessment is extremely valuable, but it will be only a starting point. When young people take up a place in higher education, they are starting a new phase of their education in which they will be expected to develop a different approach to learning. My noble friend recognised this. Higher education courses vary greatly in terms of content, delivery and assessment across institutions and subjects. It is therefore appropriate for a new assessment to be conducted to ensure that young persons get the support that they need in their new environment.

We are happy to look at the detail of the revised code of practice to ensure that we get the balance right, and we would be happy to receive any further advice from my noble friend in that respect. I hope that I have reassured him that we agree with what he is seeking to do, and I hope that he will withdraw his amendment.

[Lord Lingfield]

My Lords, I thank the Minister for her reply, which gives me much reassurance. The tightening of the code of practice will lead to better legislation than that which we faced in Committee. I look forward to hearing more and possibly discussing this with the noble Baroness. In the mean time, I beg leave to withdraw my amendment.

Amendment 39GA withdrawn.

Clause 48: Release of child or young person for whom EHC plan previously maintained

Amendments 39H to 39L

Moved by

[Lord Nash]

39H: Clause 48, page 36, line 32, leave out “custodial sentence” and insert “detention order (within the meaning of section 562(1A)(a) of EA 1996)”

39J: Clause 48, page 36, line 36, after “was” insert “—
(i) ”

39K: Clause 48, page 36, line 37, leave out “custodial sentence.” and insert “detention, or”

39L: Clause 48, page 36, line 37, at end insert—
“(ii) kept for him or her under section (Duty to keep EHC plans for detained persons) during the detention.”

Amendments 39H to 39L agreed.

Clause 49: Personal budgets and direct payments

Amendment 40 not moved.

Clause 51: Appeals

Amendment 40A

Moved by

[Lord Rix]

40A: Clause 51, page 38, line 42, at end insert—
“(g) the social care provision specified in an EHC plan;(h) the healthcare provision specified in an EHC plan.”

[Lord Rix]

My Lords, Amendment 40A, supported by my noble friends Lord Low and Lady Hollins, seeks to create a single point of appeal across education, health and care. If we are to create a joined-up system across education, care and health, we must apply the same principle to an appeals process. The case was well made by noble Lords in Committee, and I know that the Minister sympathises with the arguments.

My concern is for parents whose sons and daughters have profound and complex needs that cut across education, care and health. If in September this year the provision set out in the plans is not up to scratch, parents could end up appealing left, right and centre, across three very different cultures—from the SEN tribunal, to the health ombudsman and on to the social care chamber. Ultimately, this is about making the system run smoothly so that parents can get on with just being parents—often, as I say, to children with the most complex needs. I fear that unless we do something, parents will remain knee-deep in a quagmire of different agencies, desperately battling for support so that their sons and daughters can, rightly, achieve their aspirations.

The noble Baroness, Lady Hughes, has tabled an amendment that could see a review looking at the feasibility of bringing appeals for education, health and care together. It seems that it is a case of fix now or fix later. For the sake of disabled children and young people, and their families, I hope that whatever the outcome, the fix is soon. I beg to move.

[Lord Low of Dalston]

My Lords, I have my name on the amendment and give my noble friend Lord Rix my full support in moving it. The case seems self-evidently made and I do not wish to add a great deal to what my noble friend has said.

The raison d’être of this legislation, by and large, is the Government’s attempt to sweep away the barriers of bureaucracy which, it has been well attested, have come between parents, families, children and young people and the assertion of their rights in relation to special educational provision. The Government have, very laudably, brought forward this legislation to try to tackle some of those barriers by developing an integrated system of provision through the integrated education, health and care plan.

We said in relation to an earlier amendment that it does not make much sense to put things in an education, health and care plan and give people the right to enforce provision only in one or maybe two areas but not a third. Equally, it does not make any sense to create an integrated system of provision using education, health and care plans, with a view to sweeping away barriers of bureaucracy by putting in place an integrated system of provision, and then give people a wholly unintegrated system of enforcing their entitlement to what is specified in those integrated education, health and care plans.

18:45

The Government seem to have got themselves into an impossible position here. You cannot possibly say that what you are trying to do with this legislation is sweep away barriers of bureaucracy and then require that, when people try to assert their rights under the integrated system of provision that you have put in place, they may have to go round three different places to assert their entitlements under different parts of the plan. It seems that the Government are really on a hiding to nothing here and must give some ground.

I know what the problem is. I think the Minister and the Department for Education fully agree with us—it is their Bill and they want to see this integrated system of provision, with people being able to assert their entitlements under it and bureaucratic barriers swept away—but the department’s problem is that they have to get other government departments to co-operate with this vision, and they do not always do so. Although the Department for Education may be perfectly happy to put in place a system of appeal regarding educational provision, the department lacks the power to get the Department of Health to help it put in place not separate systems of appeal but an integrated, one-stop-shop system of appeal. This is not just the Department for Education’s problem but the Government’s problem and it needs to be sorted out at a cross-governmental level.

I know the Minister shares our concern about this and I hope that he will be able to give us some indication that he is making progress in achieving a genuinely integrated cross-governmental approach. I know he is trying and I very much hope that he will be able to give us some comfort with what he tells us about the progress he is making. If he is not able to succeed, we will pass into law a brilliant system of integrated provision through education, health and care plans—which we are improving by the minute with these amendments, many of them the Government’s own, which we are passing today to make the system ever more integrated—but we will be in danger of passing a very nice system of provision into law with a completely unintegrated system of asserting children’s and families’ rights under it.

[Baroness Hollins]

My Lords, I, too, added my name to this amendment. My noble friends Lord Rix and Lord Low have eloquently set out the logical intention behind the request to create a single point of appeal across education, health and care. If we are to create a truly joined-up system that really works for children, young people and their parents, this seems to be an absolute necessity. I speak as a parent who has worked hard to get the right support across all three systems and cultures for my son. The Government propose a single point of assessment, but the same old separate routes for redress and complaint, which will continue to bewilder and confront parents. We should aspire to more.

To focus on health needs for a moment, there are significant concerns among those in the sector that the health service is far from prepared to deal with appeals for the new plans when they are introduced from September this year. We should be mindful of the culture in which complaints and appeals happen in the NHS, and it is not quite clear where parents who are concerned about the health component of the plan would start. Ann Clwyd’s excellent recent report concluded that the NHS complaints system was confusing, lacked accountability and was subject to often long and frustrating delays. The system has been particularly unsatisfactory in the face of complaints from families of people with a learning disability.

Prior to a debate that I secured last year on the premature deaths of people with a learning disability, I met with a number of families who had lost loved ones to neglect and discrimination within the health service. Their experience of going through the NHS complaints process was that, in addition to being overbureaucratic and time-consuming, it was very defensive. They explained that it took years in many very serious cases to receive any sort of answer. A single appeal process for a single education, health and care plan might help us move closer to the joined-up system we are looking for, and ultimately help parents get what is needed for their sons and daughters.

[Lord Storey]

My Lords, I, too, moved an amendment in Committee on a single point of appeal. It beggars belief that you would have progressive legislation that creates for the first time a joined-up approach to education, health and social care but not a joined-up approach to an appeals mechanism. Everybody I have spoken to agrees with that.

Of course, the problem is the current systems that we have, so the notion is that we establish a Bill that creates single education, health and social care plans but then the appeals mechanism is threefold. We expect in this child and family-friendly approach for parents then to navigate their way through these different systems. Currently, the health appeals mechanism is not very transparent and on patient or family satisfaction ratings is very low indeed. Local authorities, as we know, vary.

What do we need to do? First, the code of conduct very much highlights the need for mediation—but it talks about mediation in terms only of education, not on the health and social care side. I hope the Minister might respond by telling us how we bring the mediation together for all three strands of the plan. In my view, mediation could considerably reduce the number of people wishing to appeal.

Then you come to the appeals mechanism itself. Whatever happens here today, I am utterly convinced that, in the years that follow, there will be one tribunal for these plans. The difficulty is the bureaucratic systems, as eloquently extolled by the noble Lord, Lord Low. Currently, the bureaucracy is not fit for purpose. My great fear is that we push the bureaucracies to agree one tribunal, they go kicking and screaming, and the whole thing does not work. We have to negotiate and make sure that everybody is on board to make this happen. Having talked to Ministers in health and education—though having been slightly disillusioned by officials—I am sure that we can achieve that eventually. We need to give my noble friend Lord Nash more time to continue those negotiations. Again, as has been said, I am sure that on the education side we all agree.

[Baroness Hughes of Stretford]

My Lords, I support Amendment 40A moved by the noble Lord, Lord Rix, and colleagues. We supported him on this in Committee and it would still be our first preference as it would add health and social care provisions to the list of matters in respect of which children, young people and families could appeal to the First-tier Tribunal.

This was first moved in Committee by the noble Lord, Lord Storey, as he just reminded us. I recall that he subsequently said, as he has just done so, that he was unsure as to the feasibility of this approach in terms of the technicalities. For that reason, because we may not be able to evaluate those technicalities at this point, we have tabled Amendment 40B, which I will refer to in a moment. I do not know if the comments of the noble Lord, Lord Storey, mean that he would support that amendment but it has the intention of giving the Government time to resolve whatever the issues are.

As other noble Lords have said, the issue is simple: the Government want to establish an integrated system for meeting better the needs of disabled children and those with special educational needs. That integration would be at the point of assessment and planning education, health and social care. However, as the Bill stands, that integration is blown apart at the point of appeal. As we have heard, parents and young people would potentially have to go through three different routes of appeal simultaneously for the three different elements of their plan. Like the noble Lords, Lord Low and Lord Rix, I sense that behind this is the considerable resistance from the Department of Health and the Department for Communities and Local Government to any change.

Having previously been a Minister for some time, I feel quite strongly that agencies should bend for the benefit of families. Families should not be imposed with the burden of mobilising three bureaucratic systems that just happen to exist. It is the job of all of us, particularly the Government, to make those agencies bend, albeit by negotiation and discussion, to make the system work for the people that we are here for.

In a letter to noble Lords, the noble Lord, Lord Nash, said that the tribunal is only for special educational needs, and that, as we have heard:

“There are established routes of complaint about social care through the local authority complaints procedures”,

and, for health, to the health complaints procedure and the health ombudsman. That is not adequate, even if local authority and health appeals systems were simple—and they really are not, even for a Member of Parliament. I see the Minister for Children at the Bar and I am sure he will have tried to mobilise those complaints procedures on behalf of his constituents. It takes for ever, it is labyrinthine, it is completely not transparent and it is very bureaucratic. The idea of parents doing that on three fronts at once is simply unimaginable. There should be a single point of appeal and we support Amendment 40A.

However, should that not prevail tonight and the Government not accept it, we have tabled Amendment 40B which would require the Government actively to seek a way to secure a single point of appeal and to report back to Parliament within a year. That would keep the possibility alive. It would require the Government to do what they have not done and maybe have not had time to do so far: namely, to find a way to make this work for parents and families, to take on the resistance of those agencies and, if necessary, to change the law to establish a single point of appeal.

I am afraid that I do not share the optimism of the noble Lord, Lord Storey, that without anything done this evening there will at some point in future be a single point of appeal. I was constantly surprised and depressed by the inability sometimes to change some of our big public organisations. Without the drive and initiative from this and the other place, I do not think that will happen. I hope the Minister will take that on board.

[Baroness Howarth of Breckland]

My Lords, I support Amendment 40A but particularly Amendment 40B. I agree absolutely with the principle of Amendment 40A but believe that the complexities that need working through to get a single point of entry are so great that we need some sort of driving project.

However, I sincerely believe that we need that single point of entry. Everyone has said how difficult it is for families to negotiate the different kinds of tribunal. I remind noble Lords that these families are struggling with children with severe disabilities. One thing they do not have is time. If you have a disabled child, it takes three times as long, if not more, to do anything, so you are immediately short of time. These negotiations then cut into what time you have. You are also short on emotional energy. If you have been through any sort of tribunal—I have been through a few in my time in a number of different positions—you know the emotional energy that it takes. Disabled children drain emotional energy, much as you love them.

The other thing is that the information you need for the different points of entry is extremely complex. Many families are poor, have not had educational advantage and do not always have the help of someone to take them through the information to enable them to understand it. Were the Government to achieve one different kind of tribunal, perhaps an independent tribunal, it would be more efficient and more economic, because there would be fewer people involved and less time used up.

I have to say that no Government have achieved that yet. No Government have managed to bring health, social care and education systems together. It would be a real triumph were this Government able simply to take a project through to consider the issues and complexities involved and what would be possible to make life so much easier for families who are already struggling emotionally and with their time in trying to care lovingly for a disabled child.

19:00

[Baroness Butler-Sloss (CB)]

My Lords, I had not intended to speak, but I have been listening to this argument with considerable interest from the outside. The present system of appeals, and the other ways in which social care and health are dealt with, does not seem sensible and something ought to be done about it. I have to say that my heart goes with Amendment 40A and my head with Amendment 40B. I can see from what has already been said that there are some formidable obstacles to achieving the desirable end—but it is a desirable end, and it really is time, in an admirable Bill such as this, to tackle some of the more difficult themes.

I see that the noble Lord, Lord Storey, may be too optimistic, and that it would be sensible to have some spur to encourage the Government to get somewhere rather than going away and saying, “Yes, in principle we think that this is a good idea but it is extremely difficult. We have problems with the Department of Health and social services and we are not sure, with everything else that we have to do, that we can achieve it”. The advantage of Amendment 40B is that it would be a spur to getting something done. I put in a plea: the present system is not sensible and something ought to be done, and put not into the long grass but into the short grass.

[Baroness Howe of Idlicote (CB)]

My Lords, rather like my noble friend who has just spoken, from listening to the arguments, I feel it is clear that something pretty sharp has to happen. I am assuming that one can have both the amendments. If we can, I am in favour of both of them.

[Lord Nash]

My Lords, I thank the noble Lords, Lord Rix and Lord Low, and the noble Baronesses, Lady Hughes, Lady Hollins and Lady Jones, for tabling the amendments, for their contributions and for bringing their experience to this debate.

Several noble Lords have been kind enough to discuss with me their questions and concerns about the complaints process for children and young people with SEN, including the noble Lords, Lord Rix and Lord Low, and my noble friend Lord Storey. I have been listening carefully to these points and have discussed them at length with my honourable friend the Minister for Children and Families.

Noble Lords have been right to press the Government hard to deliver an integrated complaints procedure to respond to the needs of a more integrated system. First, I reassure noble Lords that work is already in hand to improve the situation. The new code of practice will require that impartial information, advice and support is commissioned through joint arrangements and available through a single point of access with the capacity to handle initial phone, electronic, or face-to-face inquiries. It will also encourage clinical commissioning groups to ensure that relevant information is available at this single point of access, as well as including information on their local health offer on their website. A one-stop shop will be simpler and much more parent and young person-friendly than having to go to more than one place for advice on a range of issues, including how to complain.

Today, my honourable friend the Minister for Children and Families, who has vast direct personal experience in this area, announced a £30 million package to provide children and young people with SEN and disabilities and their parents with independent support to help them through the new SEN assessment and education, health and care planning process. This funding will be available between April 2014 and March 2016. The aim is to have around 1,800 trained independent supporters from the private, voluntary and community sectors in place by autumn 2014. That equates to about 12 individuals, on average, in each local authority area in England.

This will ensure that many families have access to informed advice and support at a time when the system is changing and new processes are bedding in. These independent supporters will be independent of the local authority, but they will need to work with local authorities and other statutory agencies to help families get the support they need. Where there is disagreement, independent supporters will make sure councils understand what families want, and help families to challenge decision-making. This will mean that children and young people with SEN get the help they really need across education, health and care. This is a major step forward.

On the health side, noble Lords will also be glad to hear that work is under way on how NHS complaints are handled, in the light of the Francis report and the review undertaken by the right honourable Ann Clwyd MP and Professor Tricia Hart into the NHS hospitals complaints system. The Government want to ensure that when things go wrong, the complaints system is clear, fair and open, and that at every level, the NHS scrutinises and learns from mistakes to improve care for patients.

The Parliamentary and Health Service Ombudsman, Healthwatch England and the Department of Health will work with the Patients Association, patients, regulators, commissioners and providers to develop universal expectations for the handling of complaints. These will be used across the NHS to drive improvements in patient satisfaction with complaint-handling. This will benefit children and young people with SEN, so we should be wary of establishing a new set of arrangements for this one group without allowing the wider suite of reforms on NHS complaints to establish itself.

Turning to why extending the remit of the tribunal is difficult, the issues here are extremely complicated. It is tempting to extend the tribunal’s remit across health and social care, but there are legitimate reasons why we cannot do so at this point. Local authorities’ duty to arrange provision that will meet the special educational needs of a child currently with a statement, or, in future, a child or young person with a plan, is absolute. The local authority has to arrange that provision no matter what the cost. This means that when the tribunal makes a decision that will increase the special educational provision for one child, that will have no effect on other children with statements because the local authority has the same absolute duty to arrange provision that meets their needs as well.

The position is different with health and social care. The authority is making decisions having regard to the health and social care needs of the whole population. We have already discussed the issues around social care in some detail. This means that, if the tribunal were to be given powers to make decisions in those areas, any decision the tribunal made to increase provision for one child or young person could mean that other children or young people with similar or even greater health or social care needs could be deprived of provision they require. It would therefore be wrong to give the tribunal the powers implied by the amendment.

The issues are significant. None the less, we should consider what more we should do now better to integrate complaints across services. This is a matter of concern to Ministers in both the Department of Health and the Department for Education. Building on our commitment to funding for key workers to help parents who need to navigate the system, we agree that there is more to be done to ensure that redress works well and feels joined up, where it needs to, and that we will need to keep that under review as the reforms are implemented.

We would therefore be grateful for the opportunity to discuss these issues further with noble Lords before Third Reading to ensure that we can confirm a strong package by that point. The things that we particularly would like to look at include: the role of mediation, including the scope to extend the arrangements in the Bill to cover health and social care as well as special education; notwithstanding the concerns I have set out, whether there could be a role for the tribunal in joining up redress across education, health and care; and what arrangements we should put in place to review how redress works once the new system is bedded in and in the light of wider reforms to complaints in the health service.

I assure noble Lords that that is something that we are taking seriously and about which we are in active discussions, which will continue, with the Department of Health. In view of what I have said, I urge noble Lords not to press their amendments.

[Lord Rix]

My Lords, this is like opening a Christmas stocking, is it not? You are never quite sure what is going to come out next. The idea that we will be given time to discuss this matter in more detail before Third Reading is a promise which has great merit. To a certain extent it answers the noble Lord, Lord Storey, on his problems, and the noble Baroness, Lady Hughes, who was asking for an extension of up to a year before any final decision were taken. If we can make a decision before Third Reading, it will be quite incredible. I would obviously welcome that, because my amendment is asking for immediate effect, but I am very happy to attend any meeting which makes this possible. Even at Third Reading, if some sort of promise is made to continue the review along the lines laid down by the noble Baroness, Lady Hughes, again, I am sure that I would support that. Without knowing quite what the noble Baroness is going to say, I beg leave to withdraw my amendment.

Amendment 40A withdrawn.

Amendment 40B

Tabled by

[Baroness Hughes of Stretford]

40B: After Clause 51, insert the following new Clause—
“Single point of appeal: review
(1) The Secretary of State will, within a year of this Act coming into force, carry out a review to assess the feasibility of enabling a child’s parent or a young person to appeal to the First-tier Tribunal in relation to the healthcare or social care provision specified in an EHC plan.
(2) In undertaking a review under subsection (1), the Secretary of State will pay particular regard to the need for an integrated appeals process.
(3) The Secretary of State will publish, and lay before both Houses of Parliament, a report setting out the conclusions of the review.”

[Baroness Hughes of Stretford]

On the basis of what the Minister has just said, I will not press this amendment. However, I say to him that whatever strengthening he may propose in terms of mediation, that is not the same as moving towards an integrated system of appeal. We will need to see some substantial progress towards that, or a route map for getting there along the lines of Amendment 40B, if we are not to rehearse this debate and put the amendment again at Third Reading. I hope that he does not mind my making that clear.

Amendment 40B not moved.

Clause 57: Special educational provision otherwise than in schools, post-16 institutions etc

Amendment 41 not moved.

Clause 59: Fees for special educational provision at non-maintained schools and post-16 institutions

Amendments 42 and 43 not moved.

Amendment 43A

Moved by

[Lord Low of Dalston]

43A: After Clause 61, insert the following new Clause—
“Guidance on duty to maintain a register of disabled children and young people under section 17 of the Children Act 1989
The Secretary of State shall issue impairment specific guidance, whether in regulation or otherwise, to local authorities on how they can most effectively discharge their duty to maintain a register of disabled children and young people under section 17 of the Children Act 1989.”

[Lord Low of Dalston]

My Lords, Amendment 43A addresses a comparatively specific range of concerns, so I shall use my best endeavours to speak to it comparatively briefly. In a meeting that I attended earlier today, I was told that the obligation to use my best endeavours laid on me a pretty heavy obligation.

In Committee, I introduced an amendment to require 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. The Care Bill currently going through Parliament lays a duty on local authorities to establish and maintain registers of sight-impaired and severely sight-impaired adults. It seemed odd, therefore, that no such obligation in relation to sight-impaired and severely sight-impaired children was included in this Bill. These registers play a critical role in enabling local authorities to assess population-level need for specialist visual impairment services and support, and to plan for their provision. The Government argued that an obligation to maintain registers of disabled children exists under the Children Act 1989, but there is a lot of evidence to suggest that this obligation is widely disregarded and, in any case, is not effective. The RNIB—and here I declare my interest as a vice-president of that organisation—has recently discovered by means of a series of freedom of information inquiries that a fifth of local authorities do not have a register of disabled children at all.

19:15

The Minister agreed in Committee to meet me to discuss the matter, and I am grateful to the Minister and the officials for the discussions that we have had. Given the requirement to maintain registers of disabled children, the Government are understandably reluctant to introduce a requirement to maintain further impairment-specific registers. The Government’s view is that the best way forward is to make the requirement to maintain the registers of disabled children effective rather than start setting up further impairment-specific registers. This amendment is therefore designed to assist the Government in this enterprise and give them the necessary tools by providing that the Secretary of State should issue guidance on how local authorities can most effectively discharge their duty to maintain registers of disabled children under the Children Act 1989. It is a modest and, I hope, helpful amendment. I hope very much that the Minister may be willing to accept it. I beg to move.

[Baroness Northover]

My Lords, this debate builds on previous discussions which we have had as the Bill has progressed. We had a particularly important debate before Christmas on the need for high-quality data to inform decisions about the necessary support for families. I thank the noble Lord, Lord Low, for his engagement in this area and his promotion of it.

Local authorities have a duty under Section 17 of the Children Act 1989 to maintain a register of disabled children in their area. This will remain unchanged by the Care Bill, which applies only to adults. I recognise, however, that the noble Lord, Lord Low, remains concerned that the registers of disabled children are underused and that they lack the detail needed to support effective planning of services, in particular for blind or visually-impaired children. It may well be that some local authorities do not adequately maintain their registers at the moment. We agree that guidance is important in addressing this issue, which we believe is one of practice rather than legislation, as the noble Lord indicated. We do not think that a new power to issue guidance is necessary.

In our debate before Christmas, noble Lords welcomed amendments to the Bill requiring disabled children to be included within the scope of a number of significant clauses in Part 3. These include: local authorities identifying children and young people in their area who have or may have SEN, in Clause 22; joint commissioning arrangements, in Clause 26; reviewing the special education and care provision that is available locally, in Clause 27; and the local offer, in Clause 30. I am pleased that noble Lords welcomed these amendments, which are a significant change to the Bill. They also provide a greater incentive to use the SEN code of practice, which provides statutory guidance on these and other duties under the Bill, to include guidance on issues relating to disabled children and young people.

Within the code, we will now require that local authorities have a clear picture of the numbers of disabled children within their area, including in particular data on low-incidence needs such as visual impairment or hearing impairment. We will also make clear—as we have in the existing code—that local authorities remain under a duty to maintain a register of disabled children and that these registers are particularly important in fulfilling the duties that I have just set out.

Placing this guidance within the core SEN code of practice will mean that the duties of the local authority are clearly and explicitly set out in the main statutory document that local authorities and their partners consult practically daily and which they must have regard to. This also avoids the potential for confusing or contradictory requirements across different sets of guidance. The guidance in the code will ensure that there is no doubt over the need to maintain registers of visually-impaired children and link this need clearly to the local authority duties under the Bill. I hope that the noble Lord is reassured and I urge him to withdraw his amendment.

[Lord Low of Dalston]

My Lords, I am grateful to the Minister for her reply. I am reassured by what she says—that the Government have certainly got hold of the issue and its importance. The important thing now is to make sure that local authorities get hold of it. I am not 100% reassured by the undertaking to ensure that it is included in a code of practice that gets thicker by the minute as we put new things in it. This provision seems the kind of exhortation that could easily get buried among a lot of other, more high-profile stuff.

Could the Government meet me one step further? The Minister kindly offered to include the issue in the code of practice. Not only that, but when the code of practice is circulated, as it will be, could they specifically draw the issue to local authorities’ attention as an important requirement that they have to give considerable attention to? That would be particularly helpful. When the code of practice is circulated, there will be ancillary communications surrounding it, laying emphasis on the importance of this and that aspect. If the Minister would agree to put something in those supporting communications to draw attention to the importance of maintaining the registers, for the point of view of the data that they provide and the opportunity for identification of need and planning that they—

[Baroness Northover]

Maybe I could reassure the noble Lord that we will highlight the importance of the duties when we write to local authorities about the implementation of the Bill.

[Lord Low of Dalston]

Now I am about 99.9% reassured. That is very helpful and I am grateful to the Minister for it. On that basis, I beg leave to withdraw the amendment.

Amendment 43A withdrawn.

Clause 62: Using best endeavours to secure special educational provision

Amendments 44 and 45 not moved.

Amendment 45A

Moved by

[Lord Addington]

45A: Clause 62, page 45, line 40, at end insert—
“( ) On using their best endeavours to fully meet the special educational needs of a registered student at a school or other institution, the school or other institution must undertake an audit of the skills and knowledge of its workforce to deliver a graduated approach to special educational provision.”

[Lord Addington]

My Lords, the three amendments in my name—Amendments 45A, 46A and 46B—all have at heart addressing the idea of training for teachers in the skills required to deal with special educational needs. This is primarily inspired by my work with the British Dyslexia Association; I draw the House’s attention to my interests in this area. I am trying here to clarify how the Government propose using the code, and the ongoing need to train teachers in how to deal with the issue.

The first amendment is about the whole school: what basket of skills is required to deal with these people? Identification is an important part of this. Unless you know what you are looking for, hidden disabilities—dyslexia, dyspraxia—are quite easy to miss. I do not really have to draw on much evidence to say that it has happened throughout the history of organised education. We have got it wrong, and inappropriate training often leads to very negative results for those concerned.

I appreciate that the Minister—my noble friend Lord Nash—has given me some assurances, particularly for the amendment that deals with SENCOs, but actually there I suggest that the person in charge of the overall position get a bit more specific knowledge. The Minister has moved quite a long way already on this, and I thank him, but a little more specific knowledge about the actual nuts and bolts of the subject would be helpful.

The really beneficial provision here is on something that I think will come back, if we do not get it through today: initial teacher training. Some 10% of the population of any school, and indeed of the population as a whole, is dyslexic according to the British definition; you can stick in 3% for dyscalculic and dyspraxic, and you can stick in ADHD and one or two other problems. Those are the hidden problems. If you know what you are looking for, you have the opportunity to call in help and support, and not to make the classic mistake of saying, “Work harder”, which leads to a very negative educational experience. Such an experience invariably leads to the child either being disruptive in the classroom, or doing that wonderful disappearing act into the middle of it and making damn sure that they do not pay any attention to the class and that the class pays no attention to them.

If the Minister can assure us how the Government will work towards the goal of making sure that the entire establishment, and the individuals themselves, are better prepared to provide the help and support that will lead to better outcomes, I will be very much reassured. I beg to move.

[Lord Storey]

I pay tribute to my noble friend Lord Addington. I used the expression “a dog with a bone” in Committee. He has stuck with this issue and made real progress on it. I also congratulate the Government, because we have now seen real movement: there have to be properly qualified special educational needs co-ordinators in schools. That is real progress, and the Government are to be congratulated on taking that important step.

My noble friend rightly points out two areas. One is the need to ensure that all teachers, particularly those in primary education, have training—perhaps a unit of training—in special educational needs. Every report has shown that the two crucial elements are early identification of a problem and providing the resources to deal with it. I hope that we might see movement on that. Maybe we can move towards a road map for how we ensure that all teachers going into our schools have an understanding of—maybe a qualification in—of special educational needs. I have forgotten the second issue, so I will sit down.

[Baroness Howe of Idlicote]

My Lords, I very much support the noble Lord, Lord Addington, in his pursuance of the subject. He obviously is an expert and is quite right to pursue the area, one of growing need—and not just need, but growing complexity as we begin to understand the various subsections of need that there are in SEN.

SEN co-ordinators are a good new grouping, but there is an important role for school governors. I would like to see a member of the governing body take on a genuine responsibility in the area. That would be a practical way to deal with it, not least when we have a range of education provision with rather different requirements.

I hope that we will see rather more happening in the area, but we should not forget the importance of ensuring the early intervention that has already been mentioned, and on which there was an interesting question today during Questions. It indicated that the earlier you can get to grips with this, the better. There must also be areas of retraining for teachers—not just initial training, because it will take a long time for that to infiltrate right across the spectrum. With retraining, teachers can be made much more up to date in the current needs of this vital area.

19:30

[Baroness Jones of Whitchurch]

My Lords, I support these amendments in the name of the noble Lord, Lord Addington. I echo the comments that have been made about his diligence and determination in pursuing these issues. He has today, in his usual style, made a compelling case for the quality of special educational needs co-ordinators in schools to be ensured though appropriate professional development and training, and for all teachers to undergo an SEN module.

That would ensure that all teachers were aware of the range of SEN characteristics that could be identified and the range of services available to support and assist all young children. It would also avoid the SEN responsibility being given to a member of staff who was not prepared to undergo the training to carry out the functions seriously. In other words, it would protect children from the possibility of it becoming a box-ticking exercise in which the school could claim that the requirement had been met without anyone with the requisite skills actually being available. We feel that this ought anyway to be a feature that Ofsted routinely inspects in schools.

We rehearsed these arguments in Grand Committee, and the case was well made then for the importance of early identification and intervention to support children with special educational needs; that can make all the difference to the child’s subsequent education and life chances. The requirement in the Bill to have a comprehensive range of SEN co-ordinators is of course a good step forward, which we welcome, but these amendments would build in the extra requirement for skills and quality, which we also think are important.

The Bill talks of possible regulations in this area and obviously some of the detail of these requirements could, quite rightly, be included in regulation. However, the principle of qualifications and training for what is a specialist field is too important simply to be left to regulation, so we support this requirement being in the Bill and hope that the Minister will be able to reassure us that this will be the case.

[Lord Nash]

My Lords, I thank my noble friend Lord Addington for tabling these amendments and leading the debate on this important issue of ensuring that schools and other institutions have the right expertise within their workforce to support children and young people with special educational needs. I cannot disagree with my noble friend’s intentions. Ensuring that we have a well trained workforce is essential, and is something that this Government are committed to doing. I hope that I can reassure my noble friend that it is possible to achieve this aim without placing requirements in the Bill.

Schools and other institutions that support children and young people with SEN must build the appropriate skills for their staff, and the draft 0-25 SEN code of practice makes that clear. Chapter 6 of the draft code requires schools to make sure that teachers’ ability to meet SEN is included in the school’s approach to professional development and in their performance management arrangements for all teaching and support staff. The chapter also requires schools to review teachers’ understanding of strategies to identify and support vulnerable pupils, and their knowledge of the special educational needs most frequently encountered. This would particularly cover issues such as dyslexia, which my noble friend has spoken passionately about on a number of occasions.

I mentioned in Committee that the latest newly qualified teacher survey, which at that point had not yet been published but was nevertheless giving off strong signals, reveals that teachers feel that the quality of their training in SEN has improved significantly in recent years. Just 5% of newly qualified teachers surveyed this year rated their training in SEN as poor, while 69% of primary teachers and 74% of secondary teachers rated their training as good or very good in helping them to teach pupils with SEN. That compares to as few as 45% in secondary in 2008. I am sure that noble Lords will agree that this is a significant improvement, and I am sure that we all welcome it.

Furthermore, initial teacher training courses must ensure that they enable trainee teachers to meet the Teachers’ Standards. These standards define the minimum level of practice required of teachers, and no trainee should be recommended for qualified teacher status until they have met those standards. Teachers’ performance is then judged against these standards throughout their career.

The Teachers’ Standards state that teachers must,

“have a clear understanding of the needs of all pupils, including those with special educational needs”.

Teachers must also be able to adapt teaching to the needs of all pupils, and have an understanding of the factors that can inhibit learning and how to overcome them. Of course, noble Lords will know that this Government have a strong drive to have more ITT in schools, and many more teachers are now coming through who have been trained in SCITTs, some of whom are at special schools particularly appropriate for training teachers in SEN.

Ofsted has an important role here as well. It inspects both the quality of initial teacher training and the quality of teaching in our schools. These standards and the ability to adapt teaching to meet special educational needs are central to these inspections.

With regard to further education, chapter 6 of the draft 0-25 code of practice sets out that colleges should ensure their curriculum staff are able to develop their skills and knowledge, and that colleges should have access to specialist skills and support when required to help students with SEN to progress. As autonomous bodies, FE colleges are responsible for ensuring that their staff are properly equipped. To support the development of the FE workforce, we are investing £1 million for the existing workforce to undertake the specialist diploma in teaching disabled learners. We are also providing initial teacher-training bursaries of up to £9,000 to help to attract high-calibre graduates to specialise in teaching students with SEN in FE.

Schools and other institutions have very clear duties to ensure that their staff are equipped to support children and young people with SEN. I do not think that it is necessary to introduce a skills audit in addition to these very clear requirements. The Department for Education is funding a range of specialist organisations covering autism, communications needs and dyslexia to provide information and advice to schools on implementing our reforms. The Dyslexia-SpLD Trust, for example, is providing an online professional development tool for teachers to help to assess their current knowledge of dyslexia and access further training. It will also be providing a toolkit to help teachers to identify and respond to literacy difficulties and dyslexia.

I hope that I have made clear that the Government recognise the importance of good teaching for pupils with SEN and that, through the changes in the code and the requirements of the Teachers’ Standards, there are clear requirements on all schools.

I turn to Amendment 46A. When Clause 63 was debated in Committee, I made clear that the appropriate regulations—the Special Educational Needs (SEN co-ordinators) Regulations—continue to require that the SENCO is a qualified teacher, and that SENCOs new to the role must study for the National Award in SEN Co-ordination. This should ensure that SENCOs have a thorough grounding in the knowledge and skills that are required for the role.

My noble friend Lord Addington’s amendment would go further than that in requiring that these skills are kept up to date and that schools ensure that their SENCO has adequate support and opportunities for training. I entirely agree with that aim but do not believe that the amendment is the best way to achieve it. Schools could fulfil the proposed requirement by providing the bare minimum opportunity for further training, and I fear that it would fall short of my noble friend’s intention.

Instead, I propose revising the section of the SEN code of practice that deals with the SENCO role. We will set out that schools “should ensure that the SENCO has sufficient time, training and resources” to carry out their role. This will place an ongoing expectation on schools to ensure that the SENCO is sufficiently supported and trained. As qualified teachers, SENCOs are also judged against the Teachers’ Standards. The code of practice already makes clear that the quality of teaching for pupils with SEN should be,

“a core part of the school’s performance management arrangements and its approach to professional development for all teaching and support staff”.

I hope my noble friend would agree that, taken together, this should deliver what he is seeking to achieve.

On the point made by the noble Baroness, Lady Howarth, about governance, since I came into office governance has been at the top of my list of priorities. As things stand, it is true that governing bodies should have a governor with specialist responsibility for SEN.

I hope that I have reassured the House and my noble friend that the Government are committed to ensuring that our teaching workforce is well trained in identifying and supporting children and young people with SEN. Continual professional development and training is essential for the whole workforce but it is particularly important for the role of the SENCO and, as I have said, I am committed to ensuring that the code of practice goes further than before to adequately reflect that. On that basis, I urge my noble friend to withdraw his amendment.

[Lord Addington]

My Lords, I thank my noble friend for that answer. I would, of course, have been happier if we had got a commitment, particularly to initial teacher training having a more comprehensive element, and, basically, if all the amendments had been accepted, and accepted a long time ago, and I did not have to raise the subject.

The Dyslexia-SpLD Trust wrote the amendments and, although it is working with the Government, it would still like slightly more from this. It is a long-established fact that if you know what you are dealing with, you stand a much better chance of getting it right. Although the teachers of today are undoubtedly better trained than those of yesterday, I still feel they could be better trained. Having said that, progress is progress. It is fairly late, and the Government are putting pressure on to go forward on this. I will withdraw the amendment, but I am sure that the House will be addressing this issue on numerous occasions in the future. Unfortunately, we cannot draw a line under this. I beg leave to withdraw the amendment.

Amendment 45A withdrawn.

Amendment 46 not moved.

Clause 63: SEN co-ordinators

Amendment 46A not moved.

Amendment 46B not moved.

Amendment 46C

Moved by

[Lord Addington]

46C: After Clause 63, insert the following new Clause—
“Apprenticeship support
Apprenticeship training providers must enable individuals undertaking an apprenticeship to access the full range of special education provisions to which they are entitled under this Act, the Equality Act 2010 and the Apprenticeship, Skills, Children and Learning Act 2009.”

[Lord Addington]

My Lords, we now come to an issue that has taken up a great deal of my time and this House’s time over the past three or four years. We have found that, through a variety of unfortunate events, people with dyslexia taking apprenticeships have been unable to obtain the final qualification because they could not take the necessary English or maths test. It is an absurd situation about which I have bent the ear of numerous Ministers over the past few years. Indeed, numerous Ministers have given me a series of responses, such as “This should not be happening. Oh! It is happening”, and then they have read out briefs which have stated that.

After Committee stage, I was rather surprised when I got a letter from the Minister which stated quite clearly that this situation is not lawful, effectively. I do not know whether that is exactly the correct term, but under the Equality Act, this should not have happened, and the Apprenticeships, Skills, Children and Learning Act did not preclude it taking place. We have come to a situation that should not have happened. My noble friend rather took the wind out of my sails for a few minutes when I received his letter because I just did not expect that something that definitive would arrive. A series of emotions went through me and I asked myself what I had I been wasting my time on and why.

This amendment is to ask my noble friend what should happen now. If it does not happen, what will be done about it? We have a situation in which practice has been established. Providers of apprenticeships do not have to get people with dyslexia through this. They do not have to make the adaptation provided here. The examining bodies and colleges have not been doing it, so if we are changing this now, which I believe will be the case—I hope it will be the case— I would like to know exactly what will happen. Indeed, if these people do not do this, what will happen to them? What is the legal framework? What is the duty involved?

Having established this, the need for Amendment 46D became apparent to me when I had the first meeting with officials on this. Indeed, when I asked about an appeal, the expression “no good deed goes unpunished” must have been running through their heads because there is now another issue. There are people who have been failed because people have been saying it is a legal requirement. What happens to them? Potentially, there is a legal challenge here. If we do not do something about it, there will be a legal challenge about loss of earnings or lower earnings for life because of not being qualified. Are we going to employ the plumber, the carpenter or so on who has the apprenticeship or the one who does not? If you do not get some form of redress here, somebody has let you down. There is a challenge. I suggest that a reassessment or an appeal of some sort is the most sensible thing to do. I look forward to what my noble friend will say about this.

On the process and criteria, there will be some cases that will be easy to assess. If you have completed the course but failed the English test and you are dyslexic, it is not that difficult. There are problems because we have changed the name of the English test and have slightly changed its nature—it has gone from “key skills” to “functional skills”—but it should not be beyond the wit of man. It has been going on for less than four years and there are records. We should be able to follow them up. I owe my noble friend a great deal of thanks for making sure of and correcting the legal situation—unless there has been another bolt from the blue over this—and I hope he will be able to give me some assurance that this will take place, because it should. I beg to move.

19:45

[Baroness Jones of Whitchurch]

My Lords, we are very grateful to the noble Lord, Lord Addington, for raising these concerns about the access of apprenticeship trainees to SEN support. As he pointed out, they already have some entitlements that were laid down in previous legislation, but the rights and provisions are not being supplied consistently. This is leading to otherwise excellent trainees failing particular modules of their training because their learning support needs have not been properly identified. It seems that once again apprenticeships are in danger of being the poor relation in the education hierarchy.

There are two ways that these inconsistencies can be addressed. First, all employers and trainers need to be aware of their responsibilities to make proper provision. This echoes the point the noble Lord is raising here. Secondly, apprentices themselves should have greater awareness of their rights, how to access the help they need and how to appeal if they are unhappy with the provision made.

These amendments go some way to addressing these issues. Amendment 46D deals more specifically with the testing regime. We would expect apprentices with SEN to have their needs identified at an early stage rather than waiting until they have failed a component. However, we would also expect provision to be made for an appeal if the failure is felt to be caused by inadequate support for their special educational needs. I very much endorse the arguments the noble Lord made and hope that the Minister will be able to provide reassurance today that these issues are being addressed so that no young apprentice will suffer because of inadequate support for their learning and skills needs.

[Lord Nash]

My Lords, progress on this issue has been far too slow, and I am very concerned that some individuals have been denied the reasonable adjustments that could have helped them to demonstrate what they know or can do, and subsequently to achieve an apprenticeship.

I thank my noble friend Lord Addington for bringing this very important issue to the attention of the House. He has been an assiduous campaigner for children and young people with dyslexia, and I pay tribute to the way in which he has presented his concerns in this House, particularly during Grand Committee debates. I pay tribute to his passion and persistence. Saying that I managed by my letter to take the wind out of his sails is high praise indeed. I want to take this opportunity to clarify the system allowing reasonable adjustments to qualifications and appeals, and I hope I will be able to reassure him that additional action will happen with an urgency that has been lacking.

As my noble friend knows from our discussions, I share his desire to see reasonable adjustments offered to all young people on an apprenticeship who need them, so that they have a reasonable opportunity to achieve the required qualifications in English and maths. I want to take this opportunity to clarify the clear duty in Part 6 of the Equality Act 2010 on learning providers and awarding organisations to make reasonable adjustments so that disabled people are, wherever possible, not put at a disadvantage compared to other learners. I share my noble friend’s concern that this duty should be applied in every relevant case.

Where a body breaches this duty, individuals may bring a challenge in a county court. The county court can grant any remedy which the High Court could grant in proceedings in tort or in a claim for judicial review. Available sanctions include damages, injunctions and a declaration. In addition, repeated breaches may lead us to challenge the body’s ability to deliver training or to award qualifications. Following the important points that my noble friend Lord Addington made in Grand Committee, I am pleased to be able to place on record that there is nothing in the Apprenticeships, Skills, Children and Learning Act, or in the associated specification for apprenticeship standards in England, that prevents the use of assistive technology for functional skills qualifications.

I am aware that Ofqual has for some time been working with awarding organisations and the British Dyslexia Association to continue to widen opportunities to use assistive technology as a reasonable adjustment. The Access Consultation Forum meets three to four times a year. The next meeting is on 30 January, and this will be on the agenda. Ofqual assures me that it takes the issue of equality very seriously. I understand that the BDA and my noble friend have examples of individuals who have been disadvantaged, and I invite them to provide details of the specific cases to Ofqual, via officials if that would be helpful. Ofqual has committed to investigate the circumstances of all these cases. In addition, we will include new text in the skills funding statement to remind education and training providers of their duty to support young people with learning difficulties or disabilities and of their responsibility for providing reasonable adjustments, including the use of assistive technology where appropriate.

I also agree with my noble friend that we can do more to provide straightforward advice and information on the support available to individuals with learning difficulties or disabilities, so that they understand their rights and can challenge appropriately if they are not properly supported. Noble Lords will be aware that I wrote to the noble Lord, Lord Addington—as he mentioned—on 2 December and committed in that letter to some additional steps to raise awareness of the support on offer.

I know that my noble friend is also concerned that young people should make a good transition out of school and into their next stage of learning. The system that we are replacing has not always served young people well in this respect. The nought to 25 system created by the Bill will ensure a much greater continuity of support between different phases and types of learning. Local authorities will be under a duty to identify all young people aged up to 25 in their area who have, or may have, special educational needs, and to consider whether local provision is sufficient to meet their needs. They may publish a local offer setting out the full range of post-16 education and training provision, including apprenticeships. Young people who need the most support will receive an EHC plan regardless of whether they stay at school, go to FE college or to work-based provision in the private sector, unlike the current disjointed system.

The new nought to 25 code of practice is clear about how schools and colleges should focus much more strongly on helping children and young people prepare for their transition into post-16 education and on to adult life. Chapter 6 states:

“Schools should help pupils to start planning for their future adult life as early as possible, and by Year 9 at the latest”.

This should of course include,

“the range of post-16 options which may be available”.

The draft code also explains the importance of a school sharing information about a pupil’s special educational needs with the college before the young person starts. As a result of my noble friend’s recent appeal, we are working with the Dyslexia Trust to produce clear information explaining the support available to apprentices with learning difficulties or disabilities. This will be made available through the National Apprenticeship Service website and will also include information about assistive technology and reasonable adjustments.

In response to the concerns raised by the noble Lord, Lord Addington, I also asked officials to look into the process of complaints, retakes and appeals to ensure that it is as fair and transparent as possible. Although a process is in place and is consistent with other national qualifications such as GCSEs, I believe that more could be done by centres and training providers to publicise it. My officials checked several apprenticeship provider websites, and, although there were examples of good practice, many do not provide details of their procedures. This contrasts with information on school or university websites, where it is generally very clear how to get advice about support or exam results, and about how to complain. I will ask officials as a priority to find a way to ensure that centres and provider websites publish good information about complaints and appeals on their websites in future. I hope that my noble friend will recognise that, taken together, these measures represent improvements for those undertaking apprenticeships. I hope also that the House will acknowledge the outstanding personal commitment that the noble Lord, Lord Addington, had demonstrated in bringing this about.

I move now to historic appeals for those who failed key skills tests because of failures to make reasonable adjustments. As noble Lords may know, key skills qualifications have been replaced by functional skills qualifications. The last possible date for certification was in 2013. Key skills were phased out very gradually, allowing plenty of opportunities for learners to resit them. Nevertheless, as my noble friend has so eloquently set out, we cannot ignore cases where there is evidence that legal duties have not been adhered to. I have therefore asked officials to work with the British Dyslexia Association and Ofqual to gather evidence and seek a solution to any issues identified, whether current or historic. Officials will be able to advise on specific cases or systemic issues.

I will now make a further specific commitment. Where an apprentice with learning difficulties or disabilities has previously completed all other requirements of a particular apprenticeship, but was not able to pass a key skills qualification, for example because reasonable adjustments were not made, they will be able to sit the alternative functional skills test. They will be entitled to the appropriate support and reasonable adjustments. If this test is passed at the appropriate level, the Government will enable the individual to receive an apprenticeship certificate, even if a year or two has elapsed.

I hope that this will reassure noble Lords that the issue is of great concern to the Government and that we are taking substantial and appropriate action to address it. I am grateful to my noble friend Lord Addington for his work, as I have already said, and I hope that with these assurances he will feel able to withdraw his amendment.

[Lord Addington]

My Lords, this is one of the speeches I thought I might never get to make. I thank the noble Lord, Lord Nash. Another Minister might have done the job, but it was he who did it. Other Ministers have not addressed this subject. He has gone in and probably made the lives of a substantial number of people considerably better by his actions. I thank him profoundly on their behalf and on my own.

However, I hope the whole House will pay attention to the fact that we took this long to get here, and that officials provided answers for the noble Lord’s colleagues at the Dispatch Box that did not concur with what he has said. This is something about which this House—and indeed the Government—should be worried. The noble Lord took a bold step and corrected something. Once again I thank him. Unfortunately he should not—as I should not—have had to battle away for this long. I thank him for his efforts and for what has happened here. He has made people’s lives better with one blow. That usually makes the day feel a little better in the end. I beg leave to withdraw the amendment.

Amendment 46C withdrawn.

Amendment 46D not moved.

Clause 64: Informing parents and young people

Amendment 47 not moved.

Clause 65: SEN information report

Amendments 47A to 47F

Moved by

[Lord Nash]

47A: After Clause 65, insert the following new Clause—
“Application of Part to detained persons
(1) Subject to this section and sections (Assessment of post-detention education, health and care needs of detained persons) to (Supply of goods and services: detained persons), nothing in or made under this Part applies to, or in relation to, a child or young person detained in pursuance of—
(a) an order made by a court, or(b) an order of recall made by the Secretary of State.(2) Subsection (1) does not apply to—
(a) section 28;(b) section 31;(c) section 69;(d) section 73;(e) any amendment made by this Part of a provision which applies to, or in relation to, a child or young person detained in pursuance of—(i) an order made by a court, or(ii) an order of recall made by the Secretary of State.(3) Regulations may apply any provision of this Part, with or without modifications, to or in relation to a child or young person detained in pursuance of—
(a) an order made by a court, or(b) an order of recall made by the Secretary of State.(4) The Secretary of State must consult the Welsh Ministers before making regulations under subsection (3) which will apply any provision of this Part to, or in relation to, a child or young person who is detained in Wales.
(5) For the purposes of this Part—
“appropriate person”, in relation to a detained person, means—
(a) where the detained person is a child, the detained person’s parent, or(b) where the detained person is a young person, the detained person;“detained person” means a child or young person who is—
(a) 18 or under,(b) subject to a detention order (within the meaning of section 562(1A)(a) of EA 1996), and(c) detained in relevant youth accommodation,and in provisions applying on a person’s release, includes a person who, immediately before release, was a detained person; “detained person’s EHC needs assessment” means an assessment of what the education, health care and social care needs of a detained person will be on his or her release from detention;
“relevant youth accommodation” has the same meaning as in section 562(1A)(b) of EA 1996, save that it does not include relevant youth accommodation which is not in England.
(6) For the purposes of this Part—
(a) “beginning of the detention” has the same meaning as in Chapter 5A of Part 10 of EA 1996 (persons detained in youth accommodation), and(b) “the home authority” has the same meaning as in that Chapter, subject to regulations under subsection (7) (and regulations under section 562J(4) of EA 1996 made by the Secretary of State may also make provision in relation to the definition of “the home authority” for the purposes of this Part).(7) For the purposes of this Part, regulations may provide for paragraph (a) of the definition of “the home authority” in section 562J(1) of EA 1996 (the home authority of a looked after child) to apply with modifications in relation to such provisions of this Part as may be specified in the regulations.”

47B: After Clause 65, insert the following new Clause—
“Assessment of post-detention education, health and care needs of detained persons
(1) This section applies in relation to a detained person for whom—
(a) the home authority is a local authority in England, and(b) no EHC plan is being kept by a local authority.(2) A request to the home authority to secure a detained person’s EHC needs assessment for the detained person may be made by—
(a) the appropriate person, or(b) the person in charge of the relevant youth accommodation where the detained person is detained.(3) Where this subsection applies, the home authority must determine whether it may be necessary for special educational provision to be made for the detained person in accordance with an EHC plan on release from detention.
(4) Subsection (3) applies where—
(a) a request is made under subsection (2),(b) the detained person has been brought to the home authority’s attention by any person as someone who has or may have special educational needs, or(c) the detained person has otherwise come to the home authority’s attention as someone who has or may have special educational needs.(5) In making a determination under subsection (3), the home authority must consult—
(a) the appropriate person, and(b) the person in charge of the relevant youth accommodation where the detained person is detained.(6) Where the home authority determines that it will not be necessary for special educational provision to be made for the detained person in accordance with an EHC plan on release from detention, it must notify the appropriate person and the person in charge of the relevant youth accommodation where the detained person is detained—
(a) of the reasons for that determination, and(b) that accordingly it has decided not to secure a detained person’s EHC needs assessment for the detained person.(7) Subsection (8) applies where—
(a) the detained person has not been assessed under this section or section 36 during the previous six months, and(b) the home authority determines that it may be necessary for special educational provision to be made for the detained person in accordance with an EHC plan on release from detention. (8) The home authority must notify the appropriate person and the person in charge of the relevant youth accommodation where the detained person is detained—
(a) that it is considering securing a detained person’s EHC needs assessment for the detained person, and(b) that the appropriate person and the person in charge of the relevant youth accommodation where the detained person is detained each have the right to—(i) express views to the authority (orally or in writing), and(ii) submit evidence to the authority.(9) The home authority must secure a detained person’s EHC needs assessment if, after having regard to any views expressed and evidence submitted under subsection (8), the authority is of the opinion that—
(a) the detained person has or may have special educational needs, and(b) it may be necessary for special educational provision to be made for the detained person in accordance with an EHC plan on release from detention.(10) After a detained person’s EHC needs assessment has been carried out, the local authority must notify the appropriate person and the person in charge of the relevant youth accommodation where the detained person is detained of—
(a) the outcome of the assessment,(b) whether it proposes to secure that an EHC plan is prepared for the detained person, and(c) the reasons for that decision.(11) Regulations may make provision about detained persons’ EHC needs assessments, in particular—
(a) about requests under subsection (2);(b) imposing time limits in relation to consultation under subsection (5);(c) about giving notice;(d) about expressing views and submitting evidence under subsection (8);(e) about how detained persons’ EHC needs assessments are to be conducted;(f) about advice to be obtained in connection with a detained person’s EHC needs assessment;(g) about combining a detained person’s EHC needs assessment with other assessments;(h) about the use for the purposes of a detained person’s EHC needs assessment of information obtained as a result of other assessments;(i) about the use of information obtained as a result of a detained person’s EHC needs assessment, including the use of that information for the purposes of other assessments;(j) about the provision of information, advice and support in connection with a detained person’s EHC needs assessment.”

47C: After Clause 65, insert the following new Clause—
“Securing EHC plans for certain detained persons
(1) Where, in the light of a detained person’s EHC needs assessment it is necessary for special education provision to be made for the detained person in accordance with an EHC plan on release from detention, the home authority must secure that an EHC plan is prepared for him or her.
(2) Sections 37(2) to (6) and 38 to 40 apply in relation to an EHC plan secured under subsection (1) as they apply to an EHC plan secured under section 37(1), with the following modifications—
(a) references to “the child or young person” are to be read as references to the detained person,(b) references to the local authority are to be read as references to the home authority, and (c) references to the child’s parent or the young person are to be read as references to the appropriate person.(3) Section 33(2) to (7) apply where a home authority is securing the preparation of an EHC plan under this section as they apply where a local authority is securing a plan under section 37, with the following modifications—
(a) references to “the child or young person” are to be read as references to the detained person,(b) references to the local authority are to be read as references to the home authority,(c) references to the child’s parent or the young person are to be read as references to the appropriate person, and(d) the reference in subsection (2) to section 39(5) and 40(2) is to be read as a reference to those provisions as applied by subsection (2) of this section.”

47D: After Clause 65, insert the following new Clause—
“EHC plans for certain detained persons: appeals and mediation
(1) An appropriate person in relation to a detained person may appeal to the First-tier Tribunal against the matters set out in subsection (2), subject to section 52 (as applied by this section).
(2) The matters are—
(a) a decision of the home authority not to secure a detained person’s EHC needs assessment for the detained person;(b) a decision of the home authority, following a detained person’s EHC needs assessment, that it is not necessary for special educational provision to be made for the detained person in accordance with an EHC plan on release from detention;(c) where an EHC plan is secured for the detained person—(i) the school or other institution named in the plan, or the type of school or other institution named in the plan;(ii) if no school or other institution is named in the plan, that fact.(3) The appropriate person may appeal to the First-tier Tribunal under subsection (2)(c) only when an EHC plan is first finalised for the detained person in accordance with section (Securing EHC plans for certain detained persons).
(4) Regulations may make provision about appeals to the First-tier Tribunal in respect of EHC plans secured under section (Securing EHC plans for certain detained persons), in particular about—
(a) making and determining appeals;(b) the powers of the First-tier Tribunal on determining an appeal;(c) unopposed appeals.(5) A person commits an offence if without reasonable excuse that person fails to comply with any requirement—
(a) in respect of the discovery or inspection of documents, or(b) to attend to give evidence and produce documents,where that requirement is imposed by Tribunal Procedure Rules in relation to an appeal under this section.(6) A person guilty of an offence under subsection (5) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(7) Section 52(2) to (9) apply where an appropriate person intends to appeal to the First-tier Tribunal under this section as they apply where a child’s parent or young person intends to appeal under section 51, with the following modifications—
(a) references to the child’s parent or young person are to be read as references to the appropriate person, and(b) references to the local authority are to be read as references to the home authority.(8) Regulations under subsection (7) of section 52 may make provision for the purposes of subsection (7) of this section, and accordingly in subsection (7)(f) of section 52—
(a) the reference to a child’s parent is to be read as a reference to the parent of a detained person who is a child, and(b) the reference to the child is to be read as a reference to a detained person who is a child.”

47E: After Clause 65, insert the following new Clause—
“Duty to keep EHC plans for detained persons
(1) This section applies in relation to a detained person—
(a) for whom a local authority in England was maintaining an EHC plan immediately before the beginning of his or her detention, or(b) for whom the home authority has secured the preparation of an EHC plan under section (Securing EHC plans for certain detained persons).(2) The home authority must keep the EHC plan while the person is detained in relevant youth accommodation.
(3) Regulations may make provision about the keeping of EHC plans under subsection (2), and the disclosure of such plans.
(4) The home authority must use its best endeavours to arrange appropriate special educational provision for the detained person while he or she is detained in relevant youth accommodation.
(5) If the EHC plan specifies health care provision, the detained person’s health services commissioner must use its best endeavours to arrange appropriate health care provision for the detained person while he or she is detained in relevant youth accommodation.
(6) For the purposes of subsection (4), appropriate special educational provision is—
(a) the special educational provision specified in the EHC plan,(b) educational provision corresponding as closely as possible to the special educational provision specified in the plan, or(c) if it appears to the home authority that the special educational provision specified in the plan is no longer appropriate for the person, such special educational provision as reasonably appears to the home authority to be appropriate.(7) For the purposes of subsection (5), appropriate health care provision is—
(a) the health care provision specified in the EHC plan,(b) health care provision corresponding as closely as possible to the health care provision specified in the plan, or(c) if it appears to the detained person’s health services commissioner that the health care provision specified in the plan is no longer appropriate for the person, such health care provision as reasonably appears to the detained person’s health services commissioner to be appropriate.(8) In this section, “detained person’s health services commissioner”, in relation to a detained person, means the body that is under a duty under the National Health Service Act 2006 to arrange for the provision of services or facilities in respect of the detained person during his or her detention.”

47F: After Clause 65, insert the following new Clause—
“Supply of goods and services: detained persons
(1) A local authority in England may supply goods and services to any authority or other person making special educational provision for a detained person, but only for the purpose set out in subsection (2).
(2) The purpose is that of assisting the local authority in the performance of a duty under section (Duty to keep EHC plans for detained persons).
(3) The goods and services may be supplied on the terms and conditions that the authority thinks fit, including terms as to payment.”

Amendments 47A to 47F agreed.

Clause 67: Code of practice

Amendment 48 not moved.

Amendment 48ZA

Moved by

[Baroness Wilkins]

48ZA: After Clause 68, insert the following new Clause—
“Inspection and review of local authority special educational needs provision
Services included in the local offer that are delivered or commissioned by the local authority for the provision of specialist education support for children with special educational needs under this Act shall be subject to inspection by an appointed regulator and the findings shall be published.”

[Baroness Wilkins]

My Lords, this amendment is in my name and that of the noble Baroness, Lady Howe of Idlicote, and the noble Lord, Lord Low of Dalston. It would require an independent regulator to be appointed to scrutinise the provision of local authority services for children with SEN and their families. It is a further attempt to address the widespread concern about the lack of accountability in this Bill. As my noble friend Lady Morris of Yardley said in Grand Committee, the whole Bill could fail if parents do not quickly have confidence in the offer. There must be a clear message to parents that there will be a voice speaking on their behalf to make sure that the offer is of good quality.

20:00

In that same debate, several noble Lords echoed the point of the noble Lord, Lord Low, that, in the introduction of new assessed systems such as this, it would be rash not to build any element of accountability or quality control into the process. This is also a key concern for many in the sector, including the Special Educational Consortium, the National Deaf Children’s Society, Sense, RNIB and the National Sensory Impairment Partnership. In particular, there is a real lack of scrutiny of local authorities’ specialist SEN services. They remain the Cinderella service, and the missing link in the SEN accountability framework within Ofsted. This is despite recognition from the department and Ofsted that such services are vital. If these services are as important as the department says they are, they need to be properly scrutinised to ensure that they are effectively raising outcomes.

My amendment would therefore fill this gap in the SEN accountability framework. Action cannot come soon enough. We know that too many children with SEN are underachieving. For example, government figures show that just 37% of deaf children achieved five good GCSEs last year. Given that deafness is not a learning disability, this is a particularly shocking statistic.

In her response to the debate in Grand Committee, the Minister stated that her department had,

“asked Ofsted to study and report on how best to identify best practice in preparing for SEN reforms … and to consider particularly whether there is a need for an inspection framework to drive improvements”.—[Official Report, 30/10/13; col. GC 640.]

I am grateful to the Minister for spelling out that review in more detail in the debate earlier today. However, that report will not be published before next spring, long after the Bill has completed its passage. Moreover, I am concerned that, following the debate in the Commons on deaf children on 17 October, the Minister, Edward Timpson, has already limited the scope of this review by Ofsted. He confirmed by letter to Sir Malcolm Bruce that his department had no plans to introduce inspections of local authority SEN services, as it would impose significant new burdens. It therefore looks highly unlikely that this promised review will be carried out with an open mind.

I will examine some of the arguments which the department has given for not inspecting local authorities’ SEN services. The department has said that it does not believe that Ofsted inspection of local authority SEN provision is needed, because it is already indirectly covered by their inspection of mainstream schools. However, this ignores the crucial role that many services play in supporting families with pre-school children. For example, the British Association of Teachers of the Deaf supports parents of deaf children in advising them on their children’s language and communication development. Without this support, far more deaf children would be starting primary school without age-appropriate language skills. We know how vital early communication is. More than anything else, we should be paying far more attention to the quality of these services.

Secondly, this argument presupposes that Ofsted inspections already pay close attention to the quality of local authority SEN support to schools. I am sceptical. Particularly in the case of low-incidence needs, such as sensory impairment, where there may be only one child with that condition in that school, does it really seem likely that an Ofsted inspector will have the time to closely scrutinise the quality of that support?

I understand that Ofsted’s recent annual report made no reference to the quality of local authority SEN provision. I also understand that, of the nine Ofsted regional reports, only one made any reference at all to SEN. The department has also suggested that inspection of local authority SEN services might send a signal to schools that they are no longer responsible for SEN. In that case, by the same rationale, Ofsted should immediately cease their inspections of local authorities’ school improvement services.

The Minister has also argued that increased transparency will support greater accountability, and that the Children and Families Bill supports this. Of course, increased transparency is welcome, but I remain concerned that the burden of keeping local authorities in check lies far too heavily with parents. The proposed requirement that local authorities be required to respond to comments left on the local offer by parents is not a substitute for real accountability. If it were, we could do away with Ofsted inspection of schools altogether. Why not just allow parents to leave comments on a website about their school? We must remember that many parents are busy being parents. Parents do not always know what they do not know. They do not have the time to research and analyse how good their local authority services are and many parents do not wish to rock the boat. The support that a child receives should and must be determined by what they need, not by how pushy or confident their parents are.

The failure to inspect specialist support services for children with SEN sends a signal that their education matters less. That is not acceptable. A failure to act also leaves us stuck with a weak accountability framework that does little to address the poorer outcomes achieved by children with SEN, something that will cost us greatly in future years. The proposal that Ofsted simply studies this issue and reports back next spring is too weak and vague. Moreover, based on what the department has told Members in the other place, it will not deliver what my amendment would: much stronger accountability and scrutiny of local authority SEN support that is vital to children with SEN and their families. I hope that the Minister will reconsider and accept the amendment. I beg to move.

[Baroness Howe of Idlicote]

My Lords, I am pleased to support the amendment of the noble Baroness, Lady Wilkins. The Bill is in my view somewhat weak in terms of accountability. This is surprising, given how much emphasis the Government put on strengthening accountability in other areas. Very recently, for example, in their response to the consultation on secondary school accountability, the Department for Education noted approvingly that:

“OECD evidence shows that a robust accountability framework is essential to improving pupils’ achievement”.

In the Government’s White Paper Open Public Services, it was stated that increased choice must be accompanied by a framework that ensures,

“providers meet basic quality requirements enforced by … inspectors”.

The White Paper went on to say that the Government would,

“ensure that providers of individual services who receive public money … are licensed or registered by the appropriate regulator”.

I am also rather concerned that local education authority SEN services are subject to so little scrutiny given the amount of government expenditure in this area. I understand that over £5,000 million is allocated to funding for children with high needs. Surely, there must be greater scrutiny of whether funding for local authority SEN provision is delivering value for money.

Separately, it can be argued that there is a particular case for inspections of services for children with low-incidence needs, such as sensory impairments. Local authorities and mainstream schools and teachers are far less likely to be familiar with the specific needs of children with sensory impairments. This lack of familiarity and expertise makes the role of local authority SEN provision much more important. The quality of this support is crucial, but apparently no one is checking the quality of this support. This is not really acceptable.

We should note, too, that this proposal has the support of professional bodies, including the National Sensory Impairment Partnership. Heads of services for children with sensory impairment have indicated that they would welcome greater scrutiny, because it allows them to demonstrate and emphasise the importance of their role.

I share the concerns raised by the noble Baroness, Lady Wilkins, that the commitment made in Committee that Ofsted be asked to carry out a review is insufficient, particularly if Ministers have already, apparently, ruled out inspection of local authority SEN provision. We have already had a one-off thematic review of support for deaf children, with the findings published in the Ofsted report, Communication is the Key. It looked at provision in three local authorities; it did not tell us much about the other 149 local authorities and, even in those three local authorities identified as having best practice, weaknesses were identified in their quality assurance and self-evaluation. For that reason, there is clearly real concern about what value or impact another broad, one-off thematic review will add. Instead, surely what is needed is the introduction of a robust inspection framework for all local authority SEN services.

I hope that the Minister, having listened to all this, has been persuaded by strong arguments in favour of the proposal.

[Lord Low of Dalston]

My Lords, I, too, give my full support to the amendment moved by the noble Baroness, Lady Wilkins. I shall make three points in support. The amendment is inspired by Sense, the RNIB and the National Deaf Children’s Society. As vice-president of the RNIB, I declare my interest in that connection.

Nowadays, the majority of school-age children with sensory impairments attend mainstream provision and often rely on support from specialist visiting teachers and services. Whether the support comes from outside or inside the school, the development of mainstream provision for children with sensory impairment is of sufficiently recent origin for it to be the case that many schools in which children with sensory disabilities and impairments are being educated are still unfamiliar with the methods of educating children who are blind, deaf, or deafblind, and with the special skills that they need, the communication methods that they use, and how to inculcate those skills. It is vitally important that there should be a system of inspection to assure us that services are of an adequate quality. At an early stage of this transition to mainstream, services are not yet of the quality that we want to see; it is in the nature of the case that you do not always get services of the quality that you want just at the beginning of a new development. But I want to argue that the existence of a system of inspection and accountability is absolutely vital to raising standards and avoiding bad practice just by default. The lack of scrutiny afforded to these services places these children at risk of poor provision, particularly as mainstream teachers and schools are still unlikely to be familiar with the specific needs of children with sensory impairments.

The second point that I would like to make is that, in other areas, the department has already recognised the importance of strengthened accountability. In its response to the responses received to the consultation on secondary school accountability, the department stated:

“The most effective education systems around the world are those that have high levels of autonomy along with clear and robust accountability”.

That is the kind of point that we were trying to make in relation to the local offer in the first debate this afternoon. We want there to be local autonomy, but we want also to be satisfied that that is not developing as a postcode lottery and that too many services are not falling below the mark. We need a system of clear and robust accountability alongside the notion of local autonomy.

20:15

The OECD has produced evidence that shows that,

“a robust accountability framework is essential to improving pupils’ achievement”.

And this is my third point—that Ofsted has identified that local authorities are very weak on evaluation of SEN provision. A 2012 Ofsted report on effective practices and services for deaf children found that there was,

“limited strategic overview and no systematic approach across all services to evaluate the quality of services and their impact on improving the lives of deaf children”.

The OECD evidence, the department’s own response to the consultation responses that it received and the Ofsted report that I have just quoted are more than enough to substantiate our argument that a vigorous and thoroughgoing system of inspection is absolutely essential to the development of a system of provision for children with SEN in which we can have trust and confidence.

[Lord Ramsbotham]

My Lords, I warmly support the intent behind the amendment in the names of my noble friends Lady Wilkins, Lady Howe and Lord Low of Dalston. However, as a former chief inspector, I have to admit that I am a little concerned about the confusion between inspection and regulation that is implied within it. Three separate functions are involved in oversight: audit, regulation and inspection. They are all different and are carried out in a different way. An audit can be a largely internal activity. Regulation must involve somebody directing that something has to happen. Inspection, if it is to mean anything, should be both independent and objective and therefore able to consider all the nuances of what is to be inspected. I note with interest that the current lack of accountability, which was described as weak accountability by my noble friend Lady Howe, has already been mentioned many times during the course of this debate.

This amendment is really a plea to the Government to think very carefully about how they are going to ensure oversight of an essential local authority provision, because currently there are no inspectors capable of carrying out that function. I refer the Minister to a precedent which might be followed—namely, the inspections of the safeguarding of children which were carried out by the old Commission for Social Care Inspection, which was abolished by the previous Government. It consisted of inspectors from Ofsted, the prisons inspectorate, the Department for Education and the Audit Commission, because it had a responsibility to look at local government and, of course, healthcare. The reports that were produced on safeguarding children are models that could be followed in this case as they covered many aspects which Ofsted does not have the skill to cover given that it is essentially concerned with education and a lot of the relevant provision concerns either healthcare or social care. Ofsted is not responsible for healthcare and I do not believe that it is very good at social care either.

The other thing that has to be remembered is that when we are talking about special educational needs, we are talking not just about the under-18s who come under the school regime but about the age range of nought to 25, as was mentioned earlier today in connection with detention. Therefore, we have to consider the inspection of local government provision for people other than those at school. The review that has been announced for next spring, carried out by Ofsted, should be stopped as I do not think that it is adequate. What the Government should do is consider very carefully a much wider examination of who is needed to conduct the oversight of all the activities that have been mentioned at various stages of the Bill. Unless they do that, not just the accountability but the oversight of something as important as this, on which we have made so much progress thanks to the way that the Minister has handled the Bill, is in jeopardy of being lost. That would be a tragedy.

[Baroness Sharp of Guildford]

My Lords, I have some sympathy with the amendment. Earlier today we rejected the notion of minimum standards being laid down for local authorities but we made it very clear in that debate that this was a matter for local authorities and that we wanted to see them use their discretion and compete with each other to provide high-quality services for those with special educational needs. Equally, in discussing the local offer, we were concerned not just with those classed as having special educational needs but with the wider community of children who have special educational needs. That is a very large number of children, as has been mentioned already. Some 1.4 million children fall into that category and are served by their schools but depend very much at the moment on local authority services to supplement what the school SENCOs and the school staff can provide.

There is enormous variation between what local authorities do in this regard. Picking up the point made by the noble Lord, Lord Ramsbotham, I believe I am right in saying that Ofsted currently inspects children’s services within local authorities. In so far as it is inspecting children’s services, including protection services, it would not be so difficult for it to take account also of the special educational needs services provided by local authorities. It seems to me that this is not an impossible situation and that the point that the noble Baronesses, Lady Wilkins and Lady Howe, made on accountability, and the need for it, is very important.

[Lord Nash]

My Lords, I am grateful to the noble Baroness, Lady Wilkins, for tabling the amendment. Earlier today we discussed the government amendment to Clause 30(6) to strengthen transparency and accountability for the local offer. Local authorities must publish comments from disabled children and young people, those with SEN and the parents of such children, about the local offer, including the quality of the provision available and about any provision that is not available in their area. We make clear in the draft SEN code that when local authorities publish their response to comments this includes the action local authorities propose to take. Amendment 33C makes this explicit in the Bill. Local authorities cannot simply publish their response to comments but then ignore them. They must say what action they intend to take. As with every other part of the development of the local offer, children, young people and parents will be involved in discussions with local authorities about the action they propose to take.

When we debated the local offer, I emphasised that we are not yet clear about whether inspection is necessarily the best way to encourage a good local offer. I hope that the confirmation that we have asked Ofsted to deliver a study to identify best practice in preparing for the SEN reforms, and consider particularly whether there is a need for an inspection framework to drive improvements, is reassuring. It has been asked to deliver the study this summer, not next spring. I hope, too, that the noble Baroness, Lady Wilkins, is reassured that the study will include local authority specialist services supporting children and young people with special educational needs and those who are disabled, and say how Ofsted intends to monitor those services. The study will focus on the extent to which local areas ensure that children and young people with SEN and those who are disabled are identified and their needs met. It will look for improved outcomes and the satisfaction of parents and young people. It will establish a baseline from which to evaluate progress in implementing the reforms; provide guidance to local authorities about the development of effective practice and advice about aspects requiring further development; and consider how, if required, effective accountability could take place.

The study will consider how local authorities identify and assess social care needs and ensure that those needs are met, look at how local authorities will work with clinical commissioning groups to identify and commission the range and sufficiency of specialist services required to support the needs of children with and without EHC plans, and evaluate the effectiveness of these services. The study will also consider arrangements for personal budgets, transition to EHC plans and how school and college inspection and other inspection activity could provide ongoing information about the effectiveness of the local area’s arrangements.

This is a comprehensive study. Should Ofsted recommend that an inspection framework is needed we would, of course, take that very seriously. If it does not make such a recommendation, we will consider what further action is necessary. I should make it clear that we have not ruled out inspection by Ofsted of local authority support services.

In terms of accountability, schools are ultimately responsible for the progress of all pupils where additional support is needed. Schools should use their best endeavours to ensure that those needs are met. The Ofsted inspection framework introduced in September 2012 places a clear emphasis on meeting the needs of disabled pupils and those with SEN. Inspectors must consider the quality of teaching and the progress made by these pupils. Where a school has a specialist resource base or integrated unit, these are covered as part of the inspection. Ofsted also inspects special schools, which provide support for sensory impaired children and others who may currently have a statement of SEN. This means that any deaf child in a mainstream or specialist school would have their education inspected as part of the Ofsted Section 5 framework. I want to stress that the SEN reforms will provide legal protections for families wanting to challenge councils through their involvement in determining local provisions. Not only do the SEN reforms in the Bill provide legal protections, they will also establish a better system for identifying need and commissioning services across education, health and social care to ensure that services provided match local needs as accurately as possible and so that families do not have to battle to get those services.

Of course, the success of the reforms will depend on changing culture and practice locally. We cannot just pass this Bill, walk away and hope that things happen. I agree entirely with the point made by the noble Lord, Lord Ramsbotham, about ensuring that local authorities perform. That is why my department is monitoring closely the readiness of local areas to implement these reforms in preparation for September 2014. There is already a package of support for implementation delivered and co-ordinated by our strategic delivery partners—the Council for Disabled Children and pathfinder champion lead via the pathfinder support team at Mott MacDonald. The Minister for Children and Families has written to all chief executives of local authorities and clinical commissioning groups about the reforms. We will be monitoring local authorities’ progress in implementing the reforms from September 2014. We will consider what further steps may be needed in the light of this information and the findings of the study being conducted by Ofsted into local authority practice in preparing for and taking forward these reforms. I will certainly ensure that we look at the prior art to which the noble Lord referred and that we take seriously the whole issue of ensuring that delivery happens on the ground.

I hope that I have been able to reassure noble Lords about the measures that we have taken to improve transparency and accountability for the local offer. I also hope that what I have said about the Ofsted study and the approach we will take to monitoring the implementation of the reforms in some way reassures the noble Baroness, Lady Wilkins, that we will consider the issue of inspection carefully once we have the findings from that study, and I urge her to withdraw her amendment.

20:29

[Baroness Wilkins]

I thank the Minister very much for that very full reply. I must admit that I need to take it in more thoroughly and shall read it. I am glad to hear that the department has not ruled out inspection of local SEN support services in the Ofsted review and that that will be heard this summer. However, that will be after the Bill has completed its course.

I thank all noble Lords who have taken part: the noble Baronesses, Lady Howe and Lady Sharp, and the noble Lords, Lord Low and Lord Ramsbotham. I am sure that noble Lords will want to reflect on what the Minister has said and perhaps follow up on the very interesting suggestion from the noble Lord, Lord Ramsbotham. However, for now, I beg leave to withdraw the amendment.

Amendment 48ZA withdrawn.

Amendments 48A and 49 not moved.

Clause 70: Part does not apply to detained children and young people

Amendment 50 not moved.

Schedule 3: Special educational needs: consequential amendments

Amendments 50ZA to 50ZC

Moved by

[Lord Nash]

50ZA: Schedule 3, page 157, line 34, leave out sub-paragraphs (2) to (4) and insert—
“( ) In subsection (1), after “local authority” insert “in Wales”.
( ) In the title, after “with” insert “statement of”.
55A In section 562D (appropriate special educational provision: arrangements between local authorities), in subsection (2) after “local authority” insert “in Wales”.”

50ZB: Schedule 3, page 157, line 40, leave out sub-paragraphs (2) to (8) and insert—
“( ) In subsection (1) after “local authority” insert “in Wales”.
( ) In subsection (2) after “home authority” insert “, where they are a local authority in Wales,”.
( ) In subsection (4) after “local authority” insert “in Wales”.
( ) In subsection (5) after “local authority” insert “in Wales”.
( ) In subsection (7)—
(a) in paragraph (a) after “home authority” insert “, where they are a local authority in Wales”, and(b) in paragraph (b) after “authority” insert “in Wales”.( ) In subsection (8)—
(a) after “home authority”, where it first occurs insert “, where they are a local authority in Wales”, and(b) in paragraph (a) after “local authority” insert “in Wales”.”

50ZC: Schedule 3, page 158, line 18, leave out sub-paragraphs (2) and (3) and insert—
“( ) In subsection (1)—
(a) after “person” insert “—(a) ”, and(b) after “apply” insert “, and(b) for whom the home authority are a local authority in Wales.”( ) In subsection (4), for “Subsections (5) and (6) apply” substitute “Subsection (6) applies”.
( ) Omit subsection (5).
( ) In subsection (6), omit paragraph (b) and the “and” preceding it.”

Amendments 50ZA to 50ZC agreed.

Amendment 50A

Moved by

[Lord Nash]

50A: Schedule 3, page 161, line 5, at end insert—
“Children Act 1989 (c. 41)(1) The Children Act 1989 is amended as follows.
(2) In section 23E (pathway plans), in subsection (1A)(a) after “Education Act 1996” insert “or Part 3 of the Children and Families Act 2013”.
(3) In Part 1 of Schedule 2 (provision of services to families) in paragraph 3 (assessment of children’s needs) after paragraph (b) insert—
“(ba) Part 3 of the Children and Families Act 2013;”.”

[Lord Nash]

My Lords, government Amendment 50A makes consequential amendments to Section 23E of, and Schedule 2 to, the Children Act 1989.

A pathway plan makes plans for a looked-after child leaving care and sets out the role of the local authority once the young person has left care. The pathway plan is about managing that transition. Section 23E of the Children Act 1989 allows the local authority to combine assessments in respect of pathway plans with other assessments, including an SEN assessment under Part IV of the Education Act 1996. This technical government amendment would ensure that Section 23E of, and paragraph 3(b) of Schedule 2 to, the Children Act would be able to include, for England, assessments under Part 3 of the Children and Families Bill. I beg to move.

Amendment 50A agreed.

Consideration on Report adjourned.

National Insurance Contributions Bill

Tuesday 7th January 2014 Lords Chamber

Second Reading

20:33

Moved by

[Lord Newby]

That the Bill be read a second time.

[Lord Newby (LD)]

My Lords, it is a pleasure to open this debate on the National Insurance Contributions Bill. Before I describe the main measures in the Bill in detail, I should like to mention two which in particular are aimed at supporting jobs and economic growth.

First, by introducing the employment allowance, employer national insurance contributions will be cut for up to 1.25 million employers, taking 450,000 out of employer NICs altogether and making it less expensive for businesses to take on new staff. Secondly, as announced in the Autumn Statement, from 6 April 2015 onwards, employer class 1 NICs will be abolished on the earnings of employees aged under 21, up to a limit of £813 a week. This is a Bill that will help jobs and job creation.

In addition to the two measures just mentioned, the Bill contains three principal other measures. First, it gives effect to the general anti-abuse rule, or GAAR, for NICs. Secondly, it amends existing powers in the Social Security Contributions and Benefits Act 1992 to allow regulations to be made for the certification of non-UK employers of oil and gas workers. Thirdly, it makes changes in connection with two elements of HMRC’s partnerships review. I should now like to explain each of the main measures in a little more detail, starting with the employment allowance.

As part of the Government’s efforts to grow the economy and increase employment, the Chancellor announced in his 2013 Budget the creation of an employment allowance, which will come into effect from 6 April this year. The intention is that businesses, charities and community amateur sports clubs in the UK will be entitled to an allowance of up to £2,000 towards their employer NICs liability. The objective of the allowance will be to support businesses with the cost of employing their staff by reducing their employer class 1 NICs bill each year. It will support thousands of small businesses which are aspiring to grow, perhaps by hiring their first employee or expanding their workforce, as well as those already employing others or facing temporary cash-flow problems.

Up to 1.25 million employers will benefit from the allowance, with around 450,000 employers—around one-third of all employers in the country—being taken out of the requirement to pay employer NICs altogether. The benefits of the policy will be most keenly felt by small businesses, with more than 90% of the benefit of the allowance going to businesses with fewer than 50 employees. The allowance will be a permanent feature of the national insurance scheme. It will be simple to administer, delivered through standard payroll software and HMRC’s real-time information system. The cost of the allowance is estimated to be £1.255 billion in 2014-15, rising to £1.725 billion in 2017-18. The allowance has been warmly welcomed by the business community and, as I mentioned earlier, it will not just be businesses that are eligible; charities and community amateur sports clubs will benefit too.

The second main element of the Bill implements the announcement by the Chancellor of the Exchequer in the Autumn Statement that employer class 1 NICs will be abolished for employees under the age of 21 from 1 April 2015. This is brought into effect by introducing a zero rate of secondary class 1 NICs for all employers on the earnings of those employees under the age of 21. As the Chancellor made clear, the Government believe that this measure will help to support young people and make sure that no one is left behind as the economy recovers. The measure will apply both to new and existing employees aged under 21 and is not time-limited.

There are two important features of the new clause which I should like to explain to the House. First, there are regulation-making powers to add an age group to those in respect of whom a reduced rate of secondary class 1 NICs applies and to specify what that reduced rate is; and to reduce the rate of secondary class 1 NICs for a previously specified age group. For example, the Government could in the future allow for an increase in the age bracket of employees falling into the zero-rate band of secondary class 1 NICs. This power is capable only of placing an employee in a lower percentage bracket, so will be a relieving power only.

Secondly, there is a regulation-making power to ensure that the benefit of the zero rate, or a reduced rate of secondary class 1 NICs, can be enjoyed only in respect of earnings below a certain level. This will initially be set at the level of the upper earnings limit, expected to be the equivalent of around £42,000 a year in 2015-16. In the year that it is introduced, 2015-16, the abolition of employer class 1 NICs for under-21s will cost £465 million. This effective abolition of employer NICs for employers of those under 21 years of age has been warmly welcomed by the business community.

I now turn to the other main measures in the Bill, starting with the general anti-abuse rule, or GAAR. Noble Lords will be aware that the Government announced in the 2012 Budget that they had accepted the recommendations of the Aaronson report to introduce a GAAR targeted at abusive tax-avoidance schemes. The GAAR was introduced by Part 5 of the Finance Act 2013 and has been in force since July last year. Provisions in the Bill apply the GAAR to NICs. The Government have always been clear that the GAAR should apply to NICs and the clauses in the Bill are the earliest opportunity for this to be effected.

The GAAR is designed specifically to target those arrangements which are regarded as abusive by considering whether the arrangement can be regarded as a reasonable course of action. The rule, once it is applied to NICs by the Bill, is estimated to increase combined receipts of tax and NICs by £60 million in 2014-15, rising to £85 million in 2017-18. However, the main purpose is not to raise revenue but to deter abusive avoidance practices in the first place.

The Government have made it clear on numerous occasions that they will take a robust line in tackling tax avoidance. It is simply not acceptable that a small, but persistent, minority try to find ways around our tax laws to avoid paying their fair share, especially at a time when the public finances are under considerable pressure. The GAAR is one new weapon in our armoury.

I turn now to the provisions in the Bill concerning oil and gas workers on the UK continental shelf. Noble Lords may recall that in last year’s Budget the Chancellor announced that the Government would strengthen legislation in respect of offshore employment intermediaries. The measure in the Bill is specifically intended to address the non-payment of employer’s national insurance in the oil and gas industry involving the placement of the employer of oil and gas workers who work on the UK continental shelf outside the UK. This measure was subject to consultation last autumn.

The Government intend to address these offshore employment schemes largely by using existing powers contained in social security legislation. This Bill supplements those with a new certification provision for the oil and gas industry. This 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.

This clause 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 businesses will increase only if they have not previously been accounting properly for all tax and NICs. This proposal has been broadly welcomed by a range of bodies, including the Oil Taxation Action Committee, the RMT and the Association of Chartered Certified Accountants.

Finally, I should like to refer to the provisions in the Bill that flow from HMRC’s partnership review conducted between May and August last year. Clause 13 addresses a tax issue arising under existing partnership tax rules where the immediate entitlement to partnership profits is restricted by the alternative investment fund managers directive. The majority of fund managers will not be affected—only those who operate through a partnership. Under existing partnership tax rules, tax is charged to profits as they are earned, rather than when they are received. An unfunded tax charge can therefore arise on profits that are allocated to an individual partner of an AIFM partnership and which are then deferred in line with the regulatory requirements of the AIFMD. This is because the partner cannot access the deferred profits before the tax becomes due and payable.

The new mechanism that the Government propose will allow the partnership itself to pay tax at the additional rate of profits which are deferred in line with the regulatory requirements. It is designed in such a way that it will also meet the government objective of the partnerships review to achieve fairer taxation by stopping tax-motivated allocation of profits in mixed membership partnerships that typically include individual and corporate members.

The new power introduced under Clause 13 will support the introduction of the mechanism and will be used to change the relevant NICs legislation by regulation once the related Finance Bill 2014 legislation becomes law. It will also allow the NICs legislation to be amended in the future to reflect any subsequent changes in the income tax legislation in this area so as to maintain symmetry between the tax and NICs positions.

Clause 14 provides an express power to treat LLP members who meet certain conditions as employed earners for NICs purposes. The conditions will be set out in regulations and will follow the income tax legislation to be introduced under the Finance Bill 2014. Broadly, this will be that the individual member of the LLP is wholly, or almost wholly, rewarded by a fixed salary and has neither significant influence over the affairs of the LLP nor capital at risk. These conditions will be based on proposals on which HMRC has consulted. It has been advised that, in response to these proposals, structures with only corporate members were being promoted as a way around the proposed legislation. The schemes involve the individual establishing a personal service company or other intermediary, and that intermediary becoming a member of the LLP in place of the individual in order to avoid these provisions.

Clause 14 provides a power to make regulations to achieve the policy objective of the measure and to counteract the artificial interposition of a company or intermediary to avoid the impact. The regulations will follow the new income tax legislation included in the Finance Bill 2014. This power will enable the reclassification, by regulations, of certain LLP members as employed earners for NICs purposes, even when they hide behind a company or intermediary. The treatment of members of LLPs as self-employed was designed to replicate the position of traditional partnerships. This clause ensures that those tax rules are not used to create a tax advantage and creates a level playing field between those partnerships that have not sought to misuse the tax rules for LLPs and those that have. These tax and NICs changes are expected to bring in approximately £3.27 billion to the Exchequer over the period to 2018-19.

This is an important and necessary Bill. It will allow us to support businesses with the cost of employing their staff and it will support small businesses aspiring to grow. It also includes an important package of measures aimed at activity that attempts to reduce the amount of NICs payable to the Exchequer. In short, this Bill is good for growth, it is good for jobs and I commend it to the House.

20:47

[Lord Razzall (LD)]

My Lords, I should start by saying, for the record, that this is the first time in my 17 years in your Lordships’ House in a Second Reading debate that two-thirds of the speeches have been delivered by Liberal Democrats. It goes without saying that we on these Benches support the Bill very strongly. The Bill ought to be put into the context of the package of measures that the coalition Government have introduced to support the so-called SMEs in recent years, which were very much supported by the Liberal Democrat members of the coalition—and often, dare I say it, provoked by them.

I will briefly list them. We have corporation tax down from 28% to 23% and heading for 20% by 2015. We have the proposed creation of the new business bank and the various lending schemes designed to assist SMEs. We have the establishment of the regional growth fund and the increase in capital allowances, very much sponsored by my friend in another place, the Member of Parliament for Burnley. We have the “one in, two out” policy on deregulation, and, of course, the small business rate relief, spread over two and a half years.

We very much welcome the creation of the employment allowance system, allowing a grant of £2,000 a year to employers in relation to their employees’ class 1 NICs, and the Government’s confirmation that HMRC will engage with the representative bodies of businesses and others to ensure that the system works as simply as possible, so as to minimise its impact. I think the Minister reported the Treasury calculation that up to 1.25 million businesses will benefit from the scheme, with around 450,000 being taken out of paying employer’s NICs altogether. That is about one-third of all employers. It is clearly a significant figure. The other issue here that we very much welcome from these Benches is the effect of including charities. It is calculated that up to 35,000 charities with employees will benefit, reducing their tax burden, it is calculated, by around £45 million in total.

At this time of night, far be it from me to comment on Labour’s alternative policy, which undoubtedly the noble Lord, Lord Davies, will touch on, but I do not think that there is any disagreement across the Floor of your Lordships’ House that something must be done to help SMEs. The Labour proposals of which I am aware would freeze business rates for two years from 2015. It is calculated that this would save small businesses an average of £450 over two years. Of course, the employment allowance scheme created by this Bill would see those businesses save £4,000 over the same period.

From these Benches, we also very much welcome the inclusion of NICs in the so-called GAAR—the general anti-avoidance rule. They were originally excluded. I am particularly conscious of the effect that this will have on offshore employment payroll companies, preventing them doing what they have so often done to allow employers to avoid paying NICs. We also welcome the fact that the Bill removes the presumption that limited liability partnership members are to be treated as self-employed, which can be used as a tax loophole. It is important that these changes will only target those NIC arrangements that are regarded as abusive. As the Minister indicated, as with all other measures under the GAAR, the NIC arrangements will be subject to the double-reasonableness test, which will consider whether the arrangements used by a company can be reasonably regarded as a reasonable course of action.

The Minister indicated the overall welcome for these proposals from a number of representative bodies. The Federation of Small Businesses stated:

“The NICs Employment Allowance is a measure our members have warmly welcomed. It will have a positive impact on small firms and the economy when it comes into force next spring. Our members have said they’ll spend the savings on their business, either through investing in the business, increasing wages or taking on staff”.

The CBI director-general said:

“The surprise £2,000 National Insurance rebate in the Budget will give smaller firms the confidence to take on extra staff. Extending the General Anti Avoidance Rule is sensible. No one can condone abusive avoidance schemes which serve no commercial purpose other than the minimisation of tax—even if they are legal”.

Finally, the 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”.

It just remains to be seen whether this proposal has the effect desired by the Government of helping create new jobs.

20:50

[Lord Davies of Oldham (Lab)]

My Lords, it is a happy occasion when I can congratulate the Minister on his opening speech and on the accuracy with which he presented the Bill. As the noble Lord, Lord Razzall, noted, there has been a 100% contribution by the Liberal Democrats on his side of the House. He put it as two-thirds of the speakers in the debate; perhaps he should have put it as 0% Conservative speakers. After all, this is a fairly worthwhile measure, so he should not be surprised if the Opposition look on certain elements of the Bill with considerable favour.

The judgment of the House appears to be that this is a fairly uncontentious Bill. As I look around, I notice that I have not got too much support from Labour Back-Benchers on the matter. They are totally reliant on me being able to deliver exactly what is necessary in criticism of the Bill—and to express support where we see the merits of it.

The Minister will be delighted to hear that we approve of the five main provisions in the Bill, although there are areas on which we will seek additional clarification in Committee. In at least two sections there are proposals with regard to regulations and other actions of the Government where it is not entirely clear how they will be phrased in future. I want to press the Government on these matters at that time.

I turn to the real issues. The main issue is the employment allowance, which we welcome, although we note the comment of the director of the Institute for Fiscal Studies, Paul Johnson, who said:

“Whether it will actually have any measurable effect on the creation of jobs we don’t know”.

Given that there is no pilot for this measure and that it is extremely difficult to measure its effects, we may never know its real effectiveness.

Nevertheless, one must welcome a step in the right direction by the Government, particularly when we look at the next major issue of the Bill. We of course approve of the abolition of national insurance contributions on the earnings of employees under 21, although we are concerned about the introduction of the measure. The Minister clearly indicated that it is significant and important, but we will not get it for another year. The Minister may be content with that rate of progress. I must say that this Government are undistinguished in their rate of progress on the issue of national insurance contributions. I do not think that the Minister was in that role when we considered the previous efforts by the Government to introduce some stimulus to job creation by legislation or national insurance contributions, but I was certainly in my place when that Bill was introduced. It was a complete disaster in its conception and absolutely absurd in its execution.

The Government argued that there should be some regional dimension to the provision on the grounds that some regions were less well favoured than others. It was quite difficult to accept because the Government bracketed with London and the south-east, which one might recognise as being different from the rest of the country and in less need of job creation, the eastern region, as if East Anglia were a high-wage, high-employment area—but the Government were convinced of the rectitude of their position at the time. What was the result? We were told that 400,000 businesses would benefit, with the possible creation of 800,000 jobs. In fact, after three years, just over 25,000 businesses, rather than 400,000, took advantage of the scheme, so it is not surprising that it was jettisoned and that the Government, after three wasted years, addressed themselves to a more realistic approach to the issue.

We welcome the second attempt. It is infinitely better than the previous effort, but the price is three wasted years on the matter when the Government have only five years of constructive activity, even assuming that the long run-in to the general election, which is based on the concept of a fixed date for the election, allows them to be constructive in their last few months, rather than just defensive about their record. We shall see.

We express general approval for the other aspects of the legislation. We shall seek to press the Minister in Committee on the effectiveness of the measures. They depend on other legislation or secondary legislation related to NICs—in fact, NICs are only a bit player in the strategy that the Government propose. The Minister will therefore not be at all surprised if he is pressed to identify just how significant this particular legislation is, so dependent is it on other, more significant activities by the Chancellor in conducting the economy.

The scheme for offshore employees—oil and gas workers—is unexceptional, but of course many aspects of the reforms in this area are to be delivered outside the Bill, so the Minister must expect that we will press him on greater clarification there.

The Bill also provides for alternative investment fund managers and members of limited liability partnerships a strategy in which the Government anticipate a considerable increase in returns from taxation, because they will have ended what we recognise is not just avoidance of tax but unfairness between the groups concerned. We are in favour of what the Government are doing there but, again, the Minister will recognise that quite a lot of what he has said in relation to the Bill here is only part of the general picture.

At this stage in my brief response, I am entirely happy to associate the Opposition with the broad thrust of the Bill—particularly as the noble Lord, Lord Razzall, indicated that we should concentrate on the Liberal Democrat part of the coalition when discussing this matter. We will of course seek to test the Government further in Committee, while applauding the fact that the main principles of the Bill are those to which we subscribe. In particular, we recognise the application of GAAR to this area. GAAR is always going to loom up as a deus ex machina in relation to a great deal of finance legislation. It does so here, and we noted the optimistic assessments that the Minister put forward on what it may achieve. The proof of that particular pudding will be in the eating—but, as a concept, we support that interaction in the Bill.

20:10

[Lord Newby]

My Lords, I thank both noble Lords for their broad welcome for the proposals in the Bill. I am very grateful to my noble friend Lord Razzall for setting the Bill in the context of all the other measures that we have taken to support business, particularly SMEs. The Bill contains useful and valuable measures but, as my noble friend pointed out, they are only a couple of pieces in the large jigsaw of provisions which, taken together, we believe will help to sustain the recovery and put Britain on the path to strong, prosperous growth in the years ahead.

The noble Lord, Lord Razzall, referred to the findings of the Federation of Small Businesses’ survey in this area and what small businesses said they would do with the additional resource. I thought that one of the more interesting aspects of that survey was that a substantial proportion of respondents said that they would increase wages. Given that I think both the Government and the Opposition are keen that wages at the bottom end are improved, if the measure does have the impact of increasing wages—as well as generating new jobs in other cases—that will mean that it has been effective.

The noble Lord, Lord Davies, slightly chided me on the fact that I had no support on my Benches. He will have seen support flooding in during this short debate.

[Lord Davies of Oldham]

If the Minister will allow me, the verb “flood” in the present circumstances is not the right one to use.

[Lord Newby]

My Lords, the noble Lord is of course absolutely correct. He is also aware that the number of people in the Chamber is normally in inverse proportion to the degree of support for a measure. The fact that the Chamber is largely empty just shows how popular this measure is.

The noble Lord slightly chided the Government on the fact that the regional employers’ NICs holiday had not been as effective as we had originally hoped. That is undoubtedly the case. However, it did support over 90,000 jobs, and I suspect that the people in those jobs think it was a pretty good scheme. It certainly did not have the scale of effect that we were looking for. Although that was in no small measure because of the overall economic environment into which that programme was launched, having a nationwide permanent scheme rather than a temporary targeted scheme is likely to make the impact of the scheme that much more difficult.

The noble Lord also slightly chided me on the fact that we were not bringing in the abolition of employer NICs for under-21s sooner than 2015. That is largely because of the need for computer systems to be changed. The view taken by HMRC in consultation with business was that it would be extremely difficult to get all that sorted out by next April, which would be the alternative.

The noble Lord also said that it would be impossible to accurately assess the impact of the scheme because we had not introduced it on a pilot basis. Of course the conundrum is that, if you do something on a pilot basis, you are only allowing a small proportion of the overall audience that you seek to affect to be part of that pilot. Particularly with the employment allowance, we wanted to make the scheme available to everybody as soon as possible. As the FSB survey suggests, we are confident that it will be effective.

I agree with the noble Lord that quite a lot of the implementation of this legislation will obviously be done by secondary legislation. The primary legislation is already pretty complicated; the secondary legislation will be even more technical. We will be very happy to discuss our approach to that with him when we get to Committee.

For today, the Government believe that the Bill does and will enable the reduction of taxation of labour nationally through the employment allowance, and provides support to employers of under-21s. As I have said on several occasions, the Bill is good for growth and good for jobs. I commend it to the House.

Bill read a second time and committed to a Grand Committee.

House adjourned at 9.08 pm.