House of Commons

Monday 13th January 2014 Commons Chamber

Monday 13 January 2014

The House met at half-past Two o’clock

Prayers

Monday 13th January 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 13th January 2014 Commons Chamber

The Secretary of State was asked—

[Ian Mearns (Gateshead) (Lab)]

1. What plans he has to improve the work capability assessment.

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

We remain committed to reviewing continually and further improving the assessment. Dr Litchfield’s independent review was published in December, and the Government will publish their response in the first quarter of this year.

[Ian Mearns]

It has come to my attention through research conducted by several disability campaign groups that as many as four people a day are dying within six weeks of being declared fit for work under the Department’s work capability assessment. Will the Secretary of State reflect on those figures? When he finds them to be true, as they are based on his Department’s data, will he come back to the House and apologise to the families of the deceased, who suffered unnecessarily in their last precious days? We can recuperate benefits that are awarded incorrectly, but we cannot recuperate a person’s life.

[Mike Penning]

Our thoughts and prayers are with the people and families who have lost their loved ones. There is a system in place for people with life-threatening illnesses, and particularly for those who are likely to die. As I said to the Work and Pensions Committee, the Chairman of which is in the Chamber, we are trying to get the decision making down to seven days, which we would all welcome.

[Sir Tony Baldry (Banbury) (Con)]

Am I right in thinking that we spend more than £13 billion on sickness and incapacity benefit for almost 2.5 million people of working age? Is it not right to ensure that the support goes to those who need it most?

[Mike Penning]

I completely agree with my right hon. Friend. Of course, the scheme was brought in by the previous Administration—the Opposition have selective memory loss about that. We are determined to get the scheme right to help people get back into work and to help those who cannot get back into work through the benefits system.

[Helen Jones (Warrington North) (Lab)]

As the Court of Appeal recently threw out the Government’s appeal against the decision that the work capability assessment disadvantages those with long-term mental health problems and learning disabilities such as autism, will the Minister accept that the test is simply not designed to deal with such people? What will he do about that?

[Mike Penning]

The Harrington report referred to that matter specifically. Ensuring that people with hidden disabilities get all the help we can give them is is close to my heart, but the Harrington pilot is on hold because of the judicial review.

[Mr David Heath (Somerton and Frome) (LD)]

In my part of the world, the work capability assessment and the personal independence payment are administered by Atos. When my constituents finally get an assessment, they find an organisation that is as insensitive as it is incompetent. Would not the best way of improving the work capability assessment be to remove the incapable Atos?

[Mike Penning]

We inherited the contract with Atos as the company running the WCA. We were not happy with the quality of its work, which is why we brought in measures. We accept that that is causing delays to the system, but it is better to have the necessary quality than to get it wrong.

[Mr Dennis Skinner (Bolsover) (Lab)]

How many people have to lose their appeal after 12 months of trying to get justice done? How many more people—including the four a day referred to by my hon. Friend the Member for Gateshead (Ian Mearns)—have to die before they get an appeal? Surely it is time for even this insensitive Government to understand that Atos is not fit for purpose and should be abandoned, and that we should start all over again.

[Mike Penning]

I am sure that the hon. Gentleman said that all the way through to his own Government when they brought in Atos. What the Opposition put in place when they were in government was a complete mess. We are determined to get it right. We are listening to why the tribunal judges make their decisions so that we get the decisions right earlier on.

[Sarah Newton (Truro and Falmouth) (Con)]

Will my hon. Friend confirm that that the Department has service level agreements with Atos and Capita that include claimant satisfaction and timeliness?

[Mike Penning]

Yes, we do. There is a financial penalty regime that I have every intention of implementing.

[John Robertson (Glasgow North West) (Lab)]

2. How many claimants have received the personal independence payment since April 2013.

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

The Department intends to publish official statistics in the spring. In the meantime, we are looking to see whether we can publish interim information as soon as it becomes available.

[John Robertson]

I thank the Minister for that answer, which is good news for a lot of people. He will appreciate that a lot of people are suffering while Capita takes so long to get that information out; they have the anxiety of not knowing whether their appeals, or even their applications for assessment, have been agreed. What kind of monitoring of Capita is he doing, and does it have enough people to do the job?

[Mike Penning]

We are monitoring the work of both Capita and Atos, and we will have the figures as soon as we can. Under the previous Administration’s scheme, fewer than 6% of people claiming this or a similar benefit were ever assessed. It must be right and proper that there is not self-assessment; it is done by the experts.

[Mrs Anne Main (St Albans) (Con)]

Will the Minister look into the fact that personal independence payments seem to get stuck in the system and are not passed on to the Department for Work and Pensions? My constituent waited three months for an assessment. Three more months later, it is still stuck in the system. The Department wants to sort it out. What more can he do to ensure that they liaise with each other?

[Mike Penning]

The Department’s officials and the contractors, Atos and Capita, are working closely every single day. We need to ensure that we get the decisions right. In such situations as the one brought to the House’s attention by my hon. Friend, we will work closely. If my hon. Friend contacts me later, we will look exactly at that point.

[Dame Anne Begg (Aberdeen South) (Lab)]

When the Minister appeared in front of the Select Committee, he admitted that there had been very long delays in getting PIP assessment determinations. People had applied in the summer and still did not have a determination by December. We are a month further on and they still have not yet heard anything. I am now receiving e-mails from people across the whole country, as well as from my own constituents, who have been waiting for more than six months since they had their face-to-face assessment. They still have not heard whether they will get the benefit or not. What is the Minister doing to ensure that people find out whether they qualify?

[Mike Penning]

The evidence I gave to the Select Committee—the Committee’s questions were useful to me and I hope the evidence I gave was useful—is that the key to this is that we roll it out until we get the decisions right. The next part of the roll-out is taking place today in south Scotland. If we get it right, it will be a much better benefit for everybody. As we know, there are delays, but they are based on getting the quality and the decisions right. We are working very closely and very hard to make sure that decisions are correct when they are put out.

[Greg Mulholland (Leeds North West) (LD)]

I, too, have constituents who have been waiting since September. I have received letters in writing from the DWP saying that it cannot speed it up. What can the DWP do to speed up the process?

[Mike Penning]

That would depend on where the claim is within the system and whether it is with Capita, Atos or DWP. I will look into the individual complaints. Perhaps the hon. Gentleman would like to come and see me and I will make sure we get on with it.

[Bill Wiggin (North Herefordshire) (Con)]

3. What assessment he has made of recent trends in the award of discretionary housing payments.

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

9. What assessment he has made of recent trends in the award of discretionary housing payments.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

13. What assessment he has made of recent trends in the award of discretionary housing payments.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Figures published in December show that in the first half of the financial year 2013-14 the average committed spend by local authorities was 40% of their allocated budget. Against those who had said that they were overspending, in fact it turns out that the vast majority are not.

[Bill Wiggin]

Will the Secretary of State explain the particular circumstances for people who have been on housing benefit constantly since 1996 in relation to discretionary housing payments?

[Mr Duncan Smith]

Yes, this is a narrow but complicated area dating back to 1996 with the introduction of local reference rent rules. They were intended to offer transitional protection at that time for existing claimants, but they were not in any way time limited. There was another opportunity, in 2008, to change the regulations when the previous Government brought in local housing allowance. They were not adjusted then. This protection had been dormant for 17 years and not used. This is a complex area that we are now resolving, but I have to say that in three different Governments it has missed the attention of Ministers.

[Chris Heaton-Harris]

Some would have had us believe that the discretionary housing payment will run out very quickly and that people will be forced out of London to live elsewhere. Will the Secretary of State confirm that there was an underspend in discretionary housing payments of nearly £11 million, and that the claims of social cleansing from the Opposition were complete rubbish?

[Mr Duncan Smith]

Yes, I can. The reality, as my hon. Friend says, is that last year about £11 million in underspends was returned to the Department. It is interesting to note the claims made by some in this House. The hon. Member for Manchester Central (Lucy Powell) said that the money in her area was fast running out. It turns out that, at the six-month cut, only 28% of discretionary housing payment has actually been used. In Nottingham South, only 33% has been used. The hon. Member for Birmingham, Erdington (Jack Dromey) said that too much had been spent in Birmingham, Erdington, but only 47% has been used. Discretionary housing payments are there to be used to help those in the most difficult circumstances. Councils should get on and use them.

[Dr Thérèse Coffey]

My right hon. Friend may not be aware that Suffolk Coastal has used 60% of its budget after nine months and Waveney has used half its budget. Does he agree that that shows that discretionary budgets are working and that it is wrong to try to make political capital out of potentially very difficult human circumstances?

[Mr Duncan Smith]

It does. The reality is that about 71% have spent less than half of their discretionary budgets by the half-way cut of the year, and politicians should always be careful about using individual cases and making political capital out of what are often human tragedies.

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

The Secretary of State should be careful about throwing around accusations of incompetence in local authorities. I was going to ask a different question, but I want to put it on record, and reassure the Secretary of State, that Manchester city council will be spending all its discretionary housing payments and has recently applied for more. Will he accept that application for more funding?

[Mr Duncan Smith]

The answer I gave previously was based on what the hon. Lady actually said previously, which was:

“The money is fast running out, if it has not already run out”.—[Official Report, 12 November 2013; Vol. 570, c. 838.]

At the six-month cut, Manchester city council had spent 28% of the discretionary payments. I suspect that, in reality, the hon. Lady was about to ask me about that, but realised that she could not because she had got it wrong.

[John Healey (Wentworth and Dearne) (Lab)]

What a lot of waffle in response to that planted question from the hon. Member for North Herefordshire (Bill Wiggin). The bulletin that the Secretary of State issued last week is a clear admission that he has been hitting thousands of people illegally with the bedroom tax since April. Is he aware of the latest survey from the Northern Housing Consortium, which says that nearly half of all front-line housing workers have dealt with someone who has threatened to commit suicide, largely because of the Government’s welfare changes? Will he apologise this afternoon to those people for the concern and chaos that he is causing?

[Mr Duncan Smith]

I said it all right, and I say it again: the Department is, and I am, absolutely sorry that anybody may have been caught up in this who should not have been. However, what we were left by the last Government was this: 1,000 pages of complex housing benefit regulations. Under universal credit, they will be reduced to 300 pages and we will simplify them. The reality is that this is a problem of the massive complexity of housing benefit that the last Government left us, with a housing benefit bill that has been rising and that doubled in 10 years on the right hon. Gentleman’s watch.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Discretionary housing payments simply will not plug the gap for disadvantaged tenants in Scotland. Given that last week the Convention of Scottish Local Authorities published clear evidence showing that the policy is costing more to implement than it saves, will the Secretary of State finally accept that it has been a disaster and abandon it?

[Mr Duncan Smith]

What I never hear about from the other side of the House, including from the hon. Lady, is what was left to us, which is 250,000 people living in overcrowded accommodation. Nobody on the Opposition Benches ever speaks for them or for the 1 million people they left on waiting lists who cannot get into homes while the taxpayer subsidises people to live in homes that they do not fully occupy. I simply put it back to the hon. Lady: I wonder when she or Opposition Front Benchers will ever speak for those they left in terrible conditions in overcrowded accommodation.

[Heather Wheeler (South Derbyshire) (Con)]

24. As always when I talk about my wonderful South Derbyshire district council, I declare an interest: its leader is my husband. Does my right hon. Friend agree that good councils are spending the appropriate amount of money on this issue and that councils need to look at the systems they have to look after the most vulnerable people in our society?

[Mr Duncan Smith]

That is exactly the point. I am sure that the leader of South Derbyshire district council is doing almost as good a job as my hon. Friend did previously, although I leave her to sort that out with him later. The key thing is that discretionary housing payments are there to help the most vulnerable. Councils should use them. We have allocated an extra pot for those that think they might run over, so there is extra money to bid for, and we are happy to entertain those bids.

[Andrew Bridgen (North West Leicestershire) (Con)]

4. What recent estimate he has made of potential savings to the public purse arising from implementation of the benefit cap.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Capping benefit at average earnings is forecast, by reducing the large benefit amounts previously paid to households, to save £85 million this year and around £140 million next year. What is more, some 19,000 potentially capped claimants have moved into work, where paying tax and national insurance contributions brings a further benefit to the Exchequer.

[Andrew Bridgen]

Residents in my North-West Leicestershire constituency are doubly astonished, first, that more than 30,000 households were claiming more than £26,000 in benefits prior to the introduction of the cap and, secondly, that the Labour party completely failed to support the introduction of a cap at all. Will my right hon. Friend assure us that this Government will persevere with its benefits cap policy and review the level at which the cap is set—currently at considerably more than the average post-tax income in my constituency?

[Mr Duncan Smith]

My hon. Friend is not alone, when 73% of the public support the cap as it stands, as did nine out of 10 Londoners in a recent poll. It appears that the only people who do not support the cap are Labour Members. We will keep the policy under review, but the one thing we should celebrate is that we are reforming welfare to ensure that those who need the money get it, and those who do not get back to work.

[Mr Frank Field (Birkenhead) (Lab)]

When previous Governments changed benefits, they commissioned research to find out about the consequences. Given that we are talking about a benefit cut, is the Secretary of State in a position to tell us who is doing the research?

[Mr Duncan Smith]

I am not sure from that whether the right hon. Gentleman supports the change or not. [Interruption.] He supports it—yet again a lone figure on his side, on which I congratulate him. We have carried out a whole load of revisions and changes, making sure that we watch implementation carefully. We carry out research constantly when it comes to the effects of all of our benefit changes. This one is an overall positive rather than a negative.

[Mrs Madeleine Moon (Bridgend) (Lab)]

5. What recent assessment he has made of Capita’s timescales for processing medical assessments for personal independence payments and providing them to his Department.

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

As I said earlier, the end to end journey time for people claiming PIP is too long—within the DWP as well as with Capita and Atos in the hon. Lady’s constituency. More than anything else, this is to do with quality issues that we want to get right. There is no point in having a very quick journey if we get the wrong decision.

[Mrs Moon]

I thank the Minister for that reply. My constituent Mr Weaver applied for PIP in June, and Mrs Curran did so in July. They both had their assessments with Capita in August. The assessments have still not reached the DWP, which is totally unacceptable. Legitimate claims are being denied, which cannot be good money for the Government and cannot be a quality service. This company is inept, inefficient and not fit to carry out the work it is asked to do.

[Mike Penning]

I thank the hon. Lady and we will obviously look into the individual cases she mentioned. It is absolutely crucial to get it right and to get the quality right so that when benefits are claimed, those who deserve them get them and those who do not deserve them do not. Face-to-face assessment is a crucial part of this and I have said previously, that fewer than 6% of those who claimed benefit were ever assessed.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Is it not the appeals process against the initial decision that is slowing the process down? Will my hon. Friend use his good offices and those of my right hon. Friend the Secretary of State to raise this issue as a matter of urgency with the Justice Secretary and Lord Chancellor?

[Mike Penning]

My hon. Friend raises an important point. What often happens is that evidence is produced on the day of the tribunal that the Department’s officials have never seen before. In some cases, evidence has understandably come forward at that stage when we might not have known anything about it. We are looking closely at that as well as at getting more information from the judges.

[Ian Lucas (Wrexham) (Lab)]

Since June, I have had five cases brought to my attention at my constituency surgery where applications for PIPs have been made yet not one of them has been paid. The assessments have been carried out, yet DWP employees are telling people being treated for cancer to phone up and chase Capita. Will the Minister do something about it because this system is collapsing?

[Mike Penning]

People suffering from terminal illnesses are being dealt with very quickly in most cases—

[Ian Lucas]

They are not.

[Mike Penning]

Those with terminal illnesses are; cancer is not always terminal. I know this is an emotive subject, but fortunately plenty of people in this country live through their cancer. I will look carefully into what the hon. Gentleman says, but it is not the case that no benefits are getting through. The vast majority are. I see cases at my surgery the same as others do, but the vast majority are getting their benefits. We will, however, work on the quality.

[Tessa Munt (Wells) (LD)]

A GP whose patient has particularly complex medical and learning disability needs is still waiting for an assessment and a decision many months after making his application. Why are doctors’ letters not accepted?

[Mike Penning]

Even the last Administration had the sense to recognise that GPs were very close to their patients, and that it was therefore necessary to obtain evidence from other health experts as well, especially consultants. However, the assessment relates not to an illness or other condition, but to a person’s capacity to work. That is what is important.

[Fiona Bruce (Congleton) (Con)]

6. What recent assessment he has made of the OECD disability spend.

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

The most recent OECD figures, from 2009, show that the United Kingdom spent 2.4% of its gross domestic product on benefits for people with disabilities. According to UK figures for 2012-13, we are spending about £50 billion a year on such benefits.

[Fiona Bruce]

Can the Minister explain how that money is being used to help disabled people in my constituency to lead full and independent lives?

[Mike Penning]

The reason we are spending so much money is that we want to ensure that people with disabilities or other long-term conditions can lead lives that are as fulfilling as possible, and, if they are able to do so, enter the workplace. Much of the money is spent on the Access to Work scheme, which has proved very successful. It is interesting that not many Opposition Members seem to approve of the £50 billion that the Government are spending.

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

Ministers have been taking a pick-and-mix approach to the OECD figures, claiming that the United Kingdom is a top spender on disability-related benefits while referring to only one indicator rather than to total incapacity-related benefit spending. Is it not time that they came clean? Will the Minister now admit that disabled people are bearing the brunt of the Government’s welfare reforms?

[Mike Penning]

We do not “pick and mix” at all. Those who look carefully at the figures will see that Germany spends roughly half the amount that we spend in relation to GDP. If the hon. Lady thinks that we should spend more, that will mean another spending commitment from the Opposition.

[Bob Blackman (Harrow East) (Con)]

7. What assessment he has made of the implications for his Department’s policies of the most recent employment statistics.

[Michael Ellis (Northampton North) (Con)]

14. What assessment he has made of the implications for his Department’s policies of the most recent employment statistics.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

The latest employment statistics, which show a record number of people in work and falling unemployment, demonstrate that our policies are working.

[Bob Blackman]

Will my hon. Friend tell the House by how much the number of claimants has fallen since the Government were elected in 2010, and what has been the consequent saving to the public purse?

[Esther McVey]

I know that my hon. Friend is very interested in this subject. I understand that he runs business breakfast clubs to help people to obtain work, and to secure growth in his constituency. I can tell him that 525,000 fewer people have claimed the three main out-of-work benefits since the election, that both unemployment and the claimant count are lower, and that in his constituency the claimant count has fallen by 23% in the last year, long-term unemployment has fallen by 16%, and youth unemployment has fallen by 28%. Obviously, all that is saving the Government a considerable amount of money.

[Michael Ellis]

Youth unemployment in my constituency has fallen by 25.6% in the last 12 months alone thanks to this Government. I organise a job fair every year, and last year more than 2,000 people came through the doors, many of them wanting to swap jobs. Thanks to the Government, things are moving very much in the right direction. Meanwhile, the Government are expanding the new enterprise allowance scheme, which is designed to improve young people’s entrepreneurial skills. What is the Minister’s assessment of how that is going?

[Esther McVey]

My hon. Friend is another Conservative Member who is doing a great deal in his area. He has got together 2,000 people from his local community—job seekers and businesses—and has found everyone work. He is right: youth unemployment has fallen by 28% over the year, and long-term youth unemployment in his area has fallen by 26%. The new enterprise allowance scheme is expanding—2,000 young people have already set up businesses in that way—and we are investing more money by extending the scheme until December 2015.

[Sheila Gilmore (Edinburgh East) (Lab)]

The December report of the Office for Budget Responsibility increased its projection for increased spend on housing benefit by £1.8 billion between March and December and attributes half of that to people in employment who will have to claim housing benefit. Is not the truth that because of low hours and wages, savings in one respect are simply popping out as increased spending in another?

[Esther McVey]

That is not the case. We want to look at the numbers. If we look at the spend on housing benefit, we see that it doubled under Labour from £12 billion to £24 billion. What we have got to do is look in the round at those people who are in overcrowded housing and those on waiting lists as well as those who have got houses that are bigger than they necessarily need and yet the taxpayer is funding all of it. The figures are right: the cost doubled under Labour’s watch.

[Stephen Timms (East Ham) (Lab)]

What plans does the Minister have to tackle the new record level of people wanting full-time work but only able to get part-time work? That went up in the most recent statistics to 1.47 million. It is the highest level it has ever been. What is the Minister going to do about it?

[Esther McVey]

Actually, in the last three months the vast majority of people who got jobs were getting not only full-time jobs but also permanent full-time jobs, and three out of every four jobs have been full-time.

[Andrea Leadsom (South Northamptonshire) (Con)]

22. For the past three years running I have had an apprentice caseworker in my office who has been an A-level school-leaver. Does my hon. Friend agree that having apprenticeships perhaps before university is an opportunity for young people to get on to the road to work by getting some work experience and that that is an incredibly valuable experience for young people that more and more of them are taking advantage of?

[Esther McVey]

I totally agree with my hon. Friend who set up one of the biggest and best job clubs in her area, supporting people into work. Work experience is key and it does not matter whether people are on their way to university or just wanting to get into a job because this helps in understanding what jobs they want to do and what jobs they do not want to do. Around 113,000 people have gone through work experience and over 50% of them have ended up in a job. My hon. Friend is right to sing the praises of work experience.

[Ann McKechin (Glasgow North) (Lab)]

8. What steps he is taking to increase the ability of employment and support allowance claimants in the work-related activity group to gain paid employment.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

ESA claimants in the work-related activity group have access to a wide range of employment support, including the Work programme where claimants receive tailored support for two years, and a flexible menu of support through their Jobcentre Plus. Specialist support is also available through Work Choice.

[Ann McKechin]

The Minister will be aware that the Lichfield review analysing the system said that it was beset by delays beyond the stipulated regulatory period and that Work programme providers consistently reported that they had very little information about the people referred to the scheme. Can the Minister explain to the House what specific steps she has taken to address those concerns?

[Esther McVey]

First, let us talk about the Work programme, which is the first time we have ever had a coherent way to address and support these people back into work. We know through industry statistics that over 440,000 people have got a job from that programme and that over 100,000 have found a long-term job. We are supporting people as best we can—the first time we have ever done this. We are taking specific steps, too: we are analysing everything, watching what works, conducting a best-practice group and implementing the findings. So this is new, it has started and we are getting it better.

[Charlie Elphicke (Dover) (Con)]

Can the Minister confirm that the pilot is the first time that ESA has been looked at in a co-ordinated way to try and get people to fulfil their potential? Will she also confirm that it is innovative policies such as this that mean our unemployment is so much lower than that in countries such as France where the Labour party’s policies are being pursued to economic catastrophe?

[Esther McVey]

My hon. Friend is right. Most of Europe is looking to us to see how we get people into work, whereas the Opposition are looking to France where the exact opposite is happening. This is a very complicated journey for people who are in the ESA group and for most of them it is about understanding their lifestyles and getting them closer to the workplace and then into a job.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

10. What recent assessment he has made of trends in auto-enrolment.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I am pleased to update the House and say that more than 2.5 million workers have now been automatically enrolled into a workplace pension. That puts us roughly a quarter of the way through the entire programme of automatic enrolment.

[Andrew Jones]

What have the Government done to ease the burdens on employers, particularly the small and medium-sized enterprises that play such a dominant role in the business mix in my constituency?

[Steve Webb]

My hon. Friend is quite right. Every change that we have made to the administration of automatic enrolment has been designed to reduce the burden on firms. For example, we have raised the wage threshold at which people are automatically enrolled, and we have delayed the staging for the smallest firms so that no one who employs fewer than 50 people will have to stage before April 2015.

[Dr Matthew Offord (Hendon) (Con)]

11. What transitional arrangements his Department will make in respect of the ending of basic state pension inheritance.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The ability to access or increase a state pension based on the national insurance record of a partner or former partner was introduced in the 1940s, but less than 5% of people reaching pension age after the single tier is introduced will be affected by the removal of this facility. We are putting in place transitional arrangements for certain women who paid the married woman’s stamp, but to go beyond that and make transitional arrangements for a broader group would severely damage the simplicity of the scheme.

[Dr Offord]

Can my hon. Friend confirm that protection will be put in place for those women who have paid the married woman’s stamp, to ensure that they receive a decent state pension?

[Steve Webb]

Yes, I can. Women who paid the married woman’s stamp at any point in the 35 years before the scheme comes in will get the pension that they expected—namely, the 60% for married women and the 100% widow’s pension.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

When the Minister announced his flat-rate state pension reform, the key argument was that the public would henceforth have clarity about what they could expect from the state in retirement. Now we find, via a parliamentary question tabled by my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce), that the Government have no intention of writing to individuals to communicate what the state pension changes will mean for them and their families. Why did the Minister give the impression that the Government would write to people about their state pension entitlement if he has no intention of doing so?

[Steve Webb]

I am slightly baffled by that question, because our reforms to the state pension will affect everyone who reaches state pension age after 2016. That is almost the entire working age population. Is the hon. Gentleman really suggesting that we should write 40 million letters?

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

12. What assessment he has made of the appropriateness of the eligibility criteria for funeral payments allocated from the social fund.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

It is important that help is targeted at those who are least well off at the time the need arises. The Government therefore firmly believe that the qualifying criteria for the funeral payments should be linked to the receipt of one of a number of income-related benefits.

[Mrs Lewell-Buck]

I thank the Minister for his response, but the reality is that almost one in five people struggles to pay the cost of a funeral service for a member of their family, and more and more are taking on debts so that they can afford to pay for a service for their loved one. Will the Minister therefore consider adjusting the criteria so that families suffering emotional hardship need not experience financial hardship as well?

[Steve Webb]

I am grateful to the hon. Lady for her question. We have expanded the scope of the budgeting loans scheme to include funeral costs, which were not previously eligible. If someone is short of cash to meet funeral costs, they can borrow money through the social fund if they are eligible for a budgeting loan, as well as applying for the grant that we pay, which averages £1,200.

[Nic Dakin (Scunthorpe) (Lab)]

16. What assessment he has made of the effect of the under-occupancy penalty on household incomes.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

The average weekly reduction in housing benefit resulting from this measure is £14.50. However, two thirds of those affected experience weekly reductions of less than that, and the average weekly loss for those who have moved off benefit as a result of this policy is £8.

[Nic Dakin]

When I visited the Scunthorpe food bank recently, the excellent volunteers there reported a significant increase in the numbers of people using the food bank. When I asked them why that was, they chorused in unison: “The bedroom tax.” When are this Government going to do a proper evaluation of the damage the bedroom tax is doing to hard-working families?

[Esther McVey]

I, too, praise the local community, the voluntary groups, the Trussell Trust and the Churches that are helping people through the food banks, but I do not agree that we can draw an analogy between what is happening there and our attempt to get fairness through changes to the spare room subsidy. What about those people who are in overcrowded homes? What about those people who are on a waiting list? How do we support everybody in this way? Labour shirked dealing with this problem, and it is a very difficult issue to get right. Labour shirked it but we are dealing with it.

[James Morris (Halesowen and Rowley Regis) (Con)]

Does my hon. Friend agree that it is financially unsustainable for the housing benefit bill to continue rising at the level that it has historically without the type of fundamental reform to housing benefit that this Government are introducing?

[Esther McVey]

I completely agree with my hon. Friend. There are many dimensions to this, because it is not just about a housing benefit bill that doubled under Labour’s watch; it is also about the lack of houses that were built, fairness in the system, getting housing right and building right for the future.

[Chris Bryant (Rhondda) (Lab)]

This might be all right if there were smaller properties for people to go to, but there are not. It might be all right if £14.50 was a tiny sum, which it may be to the hon. Lady or to any of us in the Chamber, but it is not to the carers who do an invaluable job, not only on behalf of the person they care for, but for the whole of society. So how can it possibly be right that 60,000 carers are paying, on average, as the Minister has just admitted, an extra £14.50 a week? Are this Government dim-witted, short-sighted or just plain cruel?

[Esther McVey]

I am afraid none of those are true. I see that the hon. Gentleman gathered much information together, but let us see what happens; as I said, we have got to get this right. We have to get the housing right. We have got to have more smaller buildings. He wrote to me as he did not understand about conversions and I had to lay it out clearly in the letter; the National Housing Federation agreed with me. Despite not knowing the facts, he did produce a press release for the papers. We are getting conversions right, sorting out the problem and helping as many people as possible.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

17. What assessment he has made of the effect of the under-occupancy penalty on carers.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

Live-in carers are provided for as part of the assessment of household need. An additional room for non-resident overnight carers is allowed in certain circumstances. Discretionary housing payment funding has been increased to £180 million for 2013-14 to help support vulnerable claimants to adjust to the reforms.

[Teresa Pearce]

Many children grow up with separated parents, but I think we would all agree that joint parenting is in the best interests of the child. One of my constituents is a devoted father whose small son lives with him 50% of the time, but he now has to lose his son’s bedroom because the benefits system will accept only one parent as the “main carer”. Will the Minister re-examine that rule and consider an exemption?

[Esther McVey]

The hon. Lady is right to bring this matter to the House, and such situations are always difficult, but the room would be allocated to whoever was the main carer of the child. In this instance, that is the mother and that is who we would be looking to. We would not be supporting two sets of rooms in two separate houses, as we are trying to get this housing policy right.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

May I bring the Minister back to the issue of unpaid family carers of sick and disabled people? She recently admitted in a response to my question that 50,000 or 60,000 of those carers were affected by the bedroom tax. More than 1 million of those carers have given up work to care, and they have nowhere to go to find the money. She has talked about live-in carers, but it is not about that. Will she answer about the 50,000 or 60,000 carers? Will she admit that it was a mistake not to exempt them from the bedroom tax?

[Esther McVey]

What we did is not name absolutely everybody who could have part of the discretionary housing payment. We have allowed discretion for those people who might need it the most, hence it is called “discretionary”, hence it has been trebled and hence we are supporting these people. Obviously, if somebody on housing benefit, or their partner, needs an overnight carer on a regular basis, they would have their spare room subsidy; they would be exempt from this.

[Nigel Mills (Amber Valley) (Con)]

18. What plans he has for the habitual residence test.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Migrants must now meet a much tougher habitual residence test than before, showing the efforts they have made to find work before coming to the UK and that their English language skills are not a barrier to getting a job. They must also have been resident in the UK for three months before being able to access out-of-work benefits. We have plans to make it even stronger, by introducing a minimum earnings threshold, with tougher questions on whether work is genuine, and job seekers from the European economic area will not receive housing benefit.

[Nigel Mills]

I am grateful to the Secretary of State for that detailed answer. I urge him to go a bit further and listen to the representations he has received to extend the qualifying period for the habitual residence test, and make people have to be here for a year before they can get those benefits.

[Mr Duncan Smith]

As has been made clear beyond this Chamber, we are looking at that matter at the moment, and we have been discussing it with a number of other European nations, the vast majority of which are clear and with us on the idea that freedom of movement should not result in an opportunity for people to take benefits from wherever they want and to pick and choose their benefit areas. We are looking at how we can come to an agreement on those time scales and limits.

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

19. What his most recent estimate is of the number of people who will be claiming universal credit by April 2014.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Based on caseload projections, we expect more than 6,000 claimants from the pathfinders to be on universal credit in January.

Beyond the pathfinder scheme and in the live running of universal credit, we are also rolling out other components, such as the claimant commitment. Jobcentre Plus advisers have agreed around 120,000 JSA claimant commitments, rising by some 30,000 each week. That continues our progressive approach to date, enabling a safe and successful delivery.

[Steve Rotheram]

The Secretary of State has made a pig’s ear of the roll-out of universal credit. Does he agree with his colleague, the Minister for the Cabinet Office, who claimed that the mess was all his fault?

[Mr Duncan Smith]

Actually my right hon. Friend did not make that claim. If the hon. Gentleman had gone on with the quote, we would hear that he said:

“I’m a very strong supporter of what he is doing…and I’m absolutely confident that”

he is capable of implementing it.

[Mr Philip Hollobone (Kettering) (Con)]

20. How many adults and young people have been helped to find employment by Kettering Jobcentre Plus in each of the last three years.

[The Minister of State, Department for Work and Pensions (Esther McVey)]

In the last three years, the number of young people and adults claiming jobseeker’s allowance in Kettering has fallen by 26%, long-term unemployment is down 8%, youth employment is down 35% and long-term youth unemployment is down 31%. Claimants are not required to tell us their reason for leaving JSA, but surveys suggest that it is that 77% of people move into work.

[Mr Hollobone]

I thank the Minister for that extremely good news for Kettering. Will she say what assistance is being provided to help young people find employment?

[Esther McVey]

I will indeed. I was planning to give my hon. Friend some information for those young people in Kettering. There is a growth hub, Brackley job club, Christ Church work club, the graduate boost work club, Kettering library work club and a whole host of extra support. Across the country, we have put £1 billion in the Youth Contract to help young people get into work.

[Neil Carmichael (Stroud) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I welcome industry figures that suggest that business hiring intentions are at their highest for two and a half years and that even more UK businesses are reporting that they intend to recruit in 2014. Those positive signs are backed up by the latest labour market statistics that show that more people are in private sector employment than ever before—up by more than 1.6 million since the general election.

[Neil Carmichael]

With the popularity of the Post Office in mind, does the Minister agree that the value of the Post Office card account is immense, benefiting some 2.9 million people? Will he think about extending it?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I indeed agree with my hon. Friend that the Post Office card account has played an important part in supporting the post office network and enabling pensioners and benefit recipients to receive their money at a local post office. All of the options under consideration conclude that access to pensions and benefits via the post office will continue beyond March 2015.

[Rachel Reeves (Leeds West) (Lab)]

We already know that 600,000 people are affected by the bedroom tax, two thirds of them are disabled and 60,000 are carers. Will the Secretary of State now tell the House exactly how many long-term residents have been wrongly paying the bedroom tax since April because the Government failed to spot a loophole in the legislation?

[Mr Duncan Smith]

We have already made it clear that the number is likely to be between 3,000 and 5,000, but we will be clearer about that when the local authorities, which are responsible for collecting the data, come forward with the final facts.

[Rachel Reeves]

The fact is that the Secretary of State has not got a clue. It could be 5,000 or it could be as many as 40,000 people, as reported by the experts. What a total shambles! Will the Secretary of State now guarantee that everybody who has been wrongly paying the bedroom tax will be reimbursed, and instead of closing the loophole, will the Government now do the right thing and scrap the bedroom tax?

[Mr Duncan Smith]

Yet again, what we have from the hon. Lady is a moan about a policy that helps people in difficult circumstances. I said earlier that not once has she come to the Dispatch Box and said that she was concerned about those her party left behind living in overcrowded accommodation. Not once has she mentioned the 1 million on the waiting list or apologised for the fact that building levels for social housing fell to their lowest point since the ’20s. Of course we will look after those affected by the policy, but she must make it clear that she supports one of these policies; otherwise, there will be a total cost to the Exchequer. The shambles is on the Opposition’s part.

[Dr Matthew Offord (Hendon) (Con)]

T7. Will the Minister confirm that under the new system, 80% of individuals will be entitled to a full single-tier pension in their own right by 2030?

[Steve Webb]

I am encouraged by the close interest my hon. Friend is taking in the single-tier pension, and I feel he is a kindred spirit. He is right that, as the 35-year qualifying rule includes not just earned contributions but credits for caring and so on, the vast majority of people will qualify for the full single-tier pension.

[Mr David Crausby (Bolton North East) (Lab)]

T3. In response to an inquiry, the Department for Work and Pensions has confirmed to me that employers advertising vacancies on the Government’s jobmatch service must provide a full, clear and accurate job description. Does the Secretary of State agree that they should also make it clear when they are offering zero-hours contracts, rather than simply listing them as part time?

[Mr Duncan Smith]

Of course, the key point is that all contracts must be clear from the beginning and every employee must know what contract they are on. A very small percentage of the population are on zero hours and great care is needed, as some jobs and some individuals prefer such contracts—as the hon. Gentleman’s Government found out when they were in power.

[Mr Marcus Jones (Nuneaton) (Con)]

T8. Will the Minister update the House on the progress in providing support for mesothelioma sufferers?

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

Legislation on compensation for mesothelioma sufferers went through the House last week, and I was pleased to see the Bill receive its Third Reading. As I said at the time, it is not perfect but it will help as a fund of last resort for those who have had nothing from the system because they could not trace their employers or insurers. I hope that Her Majesty will grant it Royal Assent at the earliest opportunity.

[Kelvin Hopkins (Luton North) (Lab)]

T4. The Government’s auto-enrolment pension scheme will provide relatively poor and insecure returns, based as it is on the private pensions industry and subject to stock market vagaries. Is not the only long-term solution a comprehensive and compulsory state scheme for all, with defined and guaranteed returns, in line with schemes overseas?

[Steve Webb]

I pay tribute to the hon. Gentleman for his consistency on the issue. His view is that he wants his income in retirement to be wholly dependent on a promise that future taxpayers would fund it. I must say that I would prefer to spread my risks by having a decent, simple state pension, such as the single-tier pension that we are introducing, and a stock market-linked investment that will benefit in the long run as the economy grows and, crucially, will benefit from a contribution from the employer, too, which is not the case in the state scheme.

[Bill Wiggin (North Herefordshire) (Con)]

T9. Will the Secretary of State say how many fewer children there are in workless families since 2010?

[Mr Duncan Smith]

The total figure for the fall in the number of workless households has been in the order of 17%. The position we inherited was that it had not fallen for 30 years and approximately 2.5 million children were living in such households. That number has fallen by several hundred thousand—a clear change and a clear improvement for the public and those going back to work.

[Nick Smith (Blaenau Gwent) (Lab)]

T5. Can the Secretary of State guarantee that there will be no further delays to his roll-out of universal credit?

[Mr Duncan Smith]

Universal credit is set to roll out according to the timetable I laid out the other day. We have been round this—[Interruption.] With respect, Mr Speaker, I know that Christmas is over but I think one of the pantomimes left its dame behind on the Opposition Front Bench. Universal credit will roll out in the time scales available and will be a major benefit to all those who come under it, including the constituents of the hon. Member for Blaenau Gwent (Nick Smith).

[Sir Andrew Stunell (Hazel Grove) (LD)]

Constituents of mine who face mandatory reconsideration are stuck with the possibility of a gap in their benefits until their tribunal hearing. I know that the Secretary of State is very keen to deal with that problem. Will he tell the House what further steps can be taken to protect my constituents?

[Mike Penning]

One of the things we have done in the past couple of weeks, since I came to this post, is get information back from tribunal judges. Previously, we did not have that information. We are studying why judges are making those decisions, so we can make sure that we get decisions right before they go to tribunal.

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

T6. Given the praise for the Health and Safety Executive from respondents to the recent triennial review, including positive feedback from the business sector, will the Minister support its regulatory function of saving British workers’ lives, instead of repeating the tired old Tory mantra about work-based dangers: “It’s health and safety gone mad”?

[Mike Penning]

I am slightly disappointed in my hon. Friend for asking that sort of question, because it is very important that health and safety is taken seriously in the workplace and in public areas. Right across the Christmas period, I went public about the need to ensure that Christmas was not spoiled by stupid comments, and stupid local authorities saying, “We shouldn’t do this or that”—throw snowballs, or have Christmas trees in certain areas—“because of health and safety.” That is wrong, and it has nothing to do with health and safety; it is an insurance risk.

[Philip Davies (Shipley) (Con)]

Has the Secretary of State managed to watch programmes such as “Benefits Street” and “On Benefits & Proud”? If so, has he, like me, been struck by the number of people on them who manage to combine complaining about welfare reform with being able to afford to buy copious amounts of cigarettes, have lots of tattoos, and watch Sky TV on the obligatory widescreen television? Does he understand the concerns and irritation of many people who go to work every day and pay their taxes but cannot afford those kinds of luxuries?

[Mr Duncan Smith]

My hon. Friend is right: many people are shocked by what they see. That is why the public back our welfare reform package, which will get more people back to work and end these abuses. All these abuses date back to the last Government, who had massive spending and trapped people in benefit dependency.

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

May I ask the Secretary of State to look carefully at his many policies that are delivered through intermediaries such as G4S, Capita and Atos? Are not many of those private sector providers deeply ineffective and inefficient? They cause many of my constituents great grief.

[Mike Penning]

While I accept some of the things that the hon. Gentleman says—in particular, I accept that Atos’ contract for the work capability assessment was brought in by the previous Administration—there can be benefits, and savings can be made, if assessments are done correctly. To look after our constituents, we have to make sure that companies do them properly.

[Richard Fuller (Bedford) (Con)]

In the Minister’s reply to my written question of 5 December, we learned that there was a prosecution in fewer than one in four of 45,000 cases of benefit fraud. Only 400 cases resulted in a prison sentence; the vast majority were handled through informal recovery processes. What proportion of the informal repayment arrangements are up to date, and does the Minister believe that increasing the incidence of prosecution would be helpful in reducing the incidence of benefit fraud?

[Mr Duncan Smith]

We have made great progress in pursuing more people than have ever been pursued before. The reality is that the amount got back from those who have been defrauding the state is better than it has been, but in the answer to which my hon. Friend refers, we made it clear that we have much more to do. It is the nature of many benefits that they are open to abuse; changes such as universal credit will simplify the process and give far less opportunity to those who would defraud the system. That is the right way to deal with the issue.

[Ian Paisley (North Antrim) (DUP)]

In Northern Ireland, 300,000 pensioners enjoy the winter fuel allowance. Will the Secretary of State confirm whether, if he is returned to office after the next election, that benefit will remain in place?

[Mr Duncan Smith]

It is this Government who have stood by that. The Prime Minister gave a pledge before the last election, and we intended to, and will, see that all the way to the election. As always, all further commitments will be made and published in the manifesto.

[Simon Kirby (Brighton, Kemptown) (Con)]

Can the Secretary of State confirm that universal credit will improve the lives of those in our poorest communities, including those of many people in Brighton, Kemptown?

[Mr Duncan Smith]

I can indeed. Universal credit replaces the benefits that are most open to fraud, in many cases. Also, housing benefit doubled in value under the last Government; universal credit will deal with those problems, get things back into order, and provide an incentive to go back to work; that is the key thing. Getting people back to work, which the Opposition are not interested in, is the key element of welfare reform.

[Andrew Gwynne (Denton and Reddish) (Lab)]

Given this latest bedroom tax shambles, can the Secretary of State clarify whether he will write off, or seek repayment for, discretionary housing payments that have been made to those people who will now receive back payment of housing benefit?

[Mr Duncan Smith]

I made it clear in my previous answer that I will be coming forward with full details about that, including the number of people affected.

[Charlie Elphicke (Dover) (Con)]

I urge the Secretary of State to promote fairness for people on housing waiting lists, fairness for people in overcrowded accommodation, where children have to do their homework in the hallways, and fairness for hard-working people and their families when it comes to welfare tourism.

[Mr Duncan Smith]

That is exactly right. The reality that my hon. Friend has spotted is that the Opposition have voted against every single one of our welfare reforms. Not only would the welfare bill have been £45 billion higher under them, but more people would be out of work and they would have failed the British people.

[Jim McGovern (Dundee West) (Lab)]

On the Work programme, can the Minister explain why Dundee is once again the least supported city in Scotland, with only 9.79% of people being helped back into work by the programme? Will she apologise to the people of Dundee and explain why 90% are still not being helped?

[The Minister of State, Department for Work and Pensions (Esther McVey)]

The majority of people are being helped by the Work programme. As I said earlier, this is the first time we have had a co-ordinated approach to support, and it has supported 2.5 million people so far. Of course we have to make it better and support more people, but 444,000—that figure is from industry statistics—have actually got a job.

[Greg Mulholland (Leeds North West) (LD)]

Tragically, nearly 10,000 families suffer the death of a child each year, including 7,800 babies under the age of one. Is it not time that the Government did the right and compassionate thing in the remainder of this Parliament by backing the Change Bereavement Leave campaign and introducing a statutory right to bereavement leave for all parents who lose a child?

[Steve Webb]

As my hon. Friend knows, the Government are reforming bereavement benefits. The intention, having talked with bereaved families, is to focus the funding on the point of bereavement and the immediate year thereafter, but obviously ongoing support for bereaved families will be available through universal credit. I will be happy to discuss the matter with him further.

[Jonathan Ashworth (Leicester South) (Lab)]

A few moments ago the Secretary of State quoted the Minister for the Cabinet Office on universal credit, but he forgot to mention the part where the Minister called its implementation “lamentable” and said that a lot of money has been wasted. We also learned last week that the Cabinet Office withdrew the Government Digital Service from universal credit, a decision described as “disappointing” by the lead official. Why did the official describe it in such terms?

[Mr Duncan Smith]

Yet again the Opposition are farming in and around old e-mails. The truth is that universal credit and the Cabinet Office are working together, with the Cabinet Office supporting us on the digital ask. The Minister for the Cabinet Office made it absolutely clear that that is where we are going. I know that in reality the Opposition do not support universal credit, but it would be better if they came clean: it will be delivered and they will be thankful in the end.

[Several hon. Members]

rose—

[Mr Speaker]

I am sorry to disappoint colleagues, but we must move on.

Syria

Monday 13th January 2014 Commons Chamber

15:32

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

With permission, Mr Speaker, I wish to make a statement on Syria. I would first like to inform the House that we have reached E3 plus 3 agreement with Iran on implementing, from 20 January, the first stage nuclear agreement reached in Geneva, as set out in my statement on 25 November. We will now move to seek a comprehensive settlement on the nuclear issue with Iran.

Yesterday I attended the meeting of the core group of the Friends of Syria in Paris to prepare the ground for the Geneva II peace negotiations beginning in Montreux on 22 January. In his letter of invitation, the UN Secretary-General makes it clear that the aim is to

“assist the Syrian parties in ending the violence and achieving a comprehensive agreement for a political settlement, implementing fully the Geneva Communiqué, while preserving the sovereignty, independence and territorial integrity of Syria.”

That means agreeing a transitional governing body in Syria with full executive powers, formed by mutual consent, to meet the aspirations of the Syrian people.

Our united message in Paris yesterday, from all 11 countries represented, was the vital necessity of this process, the great importance of both the regime and the opposition being prepared to attend, and our determination to support a political settlement and end the humanitarian suffering of the Syrian people. No one should underestimate the difficulty of the negotiations ahead, but we will not give up on diplomacy as the route to stopping the appalling bloodshed, nor will we waver in supporting the moderate Syrian opposition, for if there is only a murderous regime on the one side and extremists on the other, there can be no peaceful settlement in Syria.

President Jarba of the Syrian National Coalition has always said that he is ready to attend the Geneva negotiations. His task is to persuade the rest of the moderate opposition to agree to that at a time when their towns, villages and homes are under relentless attack. The National Coalition is expected to make a final decision at its general assembly this Friday. We urge it to attend and to put the spotlight on the Assad regime’s responsibility to end this terrible conflict. Today Secretary Kerry and Foreign Minister Lavrov met UN and Arab League envoy Brahimi for further discussions ahead of the talks. There is a pressing need for measures that can build confidence ahead of the negotiations such as prisoner releases and progress on humanitarian access, including through local ceasefires. We call on all parties in Syria to work towards such actions.

Since my last statement to the House, the violence has remained intense. The Syrian Observatory for Human Rights now puts the death toll at over 125,000 people. The regime continues to bombard Aleppo and other towns and cities, including through the repeated use of barrel bombs. These huge canisters, filled with explosives and shards of metal and dropped from helicopters on to civilian areas, have killed 600 people in Aleppo alone since mid-December, including 172 children, and injured 3,000 people. The use of this deliberately indiscriminate weapon is yet another war crime and is clearly designed to sow terror and weaken the will of the civilian population. Assad and those around him should be in no doubt that the world will hold them to account.

The deliberate obstruction of humanitarian aid to the Syrian people is also utterly unacceptable. The UN Security Council presidential statement in October last year demanded that aid must be able to reach all Syrians. However, the UN estimates that 2.5 million people inside Syria are currently not receiving assistance, including 250,000 people trapped in besieged or hard-to-access areas. Countless numbers of people are being denied access to food and medicines, and there are now sickening reports of innocent people dying from malnutrition. Last week at the Security Council we proposed a new statement calling for immediate and unfettered access for aid. This was blocked by Russia, but we will continue to seek action at the UN Security Council and to work with Russia to try to bring about progress at Geneva and in the humanitarian situation. More than half the Syrian population is now in need of humanitarian assistance: 9.3 million people within Syria, and 2.3 million refugees in the region, who are facing bitter winter conditions.

The UK has now provided half a billion pounds in aid—the largest sum our country has ever committed to a single crisis. Today my right hon. Friend the Secretary of State for International Development announced that we have now allocated or delivered on all our funding promises. On Wednesday she will attend a pledging conference in Kuwait where the UK will make a major further donation, in response to the new UN appeal, of $6.5 billion for Syria in 2014, and we will urge other countries to be equally generous. We will also press for the lifting of sieges and access for humanitarian organisations, the immediate end to attacks on civilian areas and medical facilities, and respect for international humanitarian law.

In this House and this country we are very conscious of the importance of a greater role for women in ending conflicts and building peace. The UK has led the way in advocating a direct role for women in the Geneva negotiations. We have put forward proposals to ensure that both sides include women in their delegations, we have urged the UN to facilitate a clear role for women’s groups and civil society in the form of a consultative body present at the negotiations, and we are providing £200,000 in funding to enable Syrian women’s groups to take part.

On top of our humanitarian assistance to the Syrian people, we have given more than £20 million in support for opposition groups, civil society, human rights defenders and media activists. This includes training and equipping search and rescue teams, providing power generators and communications equipment, supporting and training civil administrations, and helping survivors of sexual violence.

In November last year, we announced an increase in non-lethal support to the supreme military council of General Idris, including communications assistance and medical and logistics equipment. In December, we took the decision to impose a temporary halt to deliveries of those supplies, following fighting over control of the border crossing at Bab al-Hawa. We are ready to resume—and to consider increasing—this assistance as soon as we are satisfied that conditions on the ground allow the military council to take safe delivery of our equipment.

Since 3 January, Syrian opposition groups have been battling an al-Qaeda-affiliated extremist group—the so-called “Islamic State of Iraq and the Levant”—in dozens of locations across northern Syria. Opposition groups are reported to have driven the al-Qaeda-affiliated group back in Aleppo, Idlib, Hama and al-Raqqah governorates. The fighting has been accompanied by widespread public demonstrations against the torture and summary executions carried out by the extremists.

The fact that the moderate opposition is prepared to fight against these groups is a demonstration to the world that they reject extremism, just as they reject the Assad regime. It gives the lie to Assad’s claim that that there is no choice other than his regime or extremist terrorists. And it underlines the importance of supporting the moderate opposition forces to help them counter the extremists—which is vital for security in the region and in the UK. Assad’s brutality is the best recruiting tool the extremists have. Ultimately, the only long-term way to deal with the extremist threat is to reach an inclusive political settlement.

We have always warned that the longer the conflict continues, the greater the consequences will be for regional peace and security. There have been further car bombings in Lebanon, as well as clashes on the Lebanese border. There has also been fierce fighting in western Iraq involving al-Qaeda extremists—at least in part the result of the conflict in Syria. And both Jordan and Lebanon, as well as Turkey, are generously coping with the strain of the ever-increasing burden of Syrian refugees, hosting more than 575,000 and more than 860,000 refugees respectively. We have given more than £111 million in humanitarian support to Jordan, more than £109 million to Lebanon, and more than £15 million to the Lebanese and Jordanian armed forces to help protect their borders.

One area in which progress is being made is the destruction of Syria’s chemical stocks. The first consignment of the most dangerous chemicals has now left Syria, after a short delay caused by intense fighting and poor weather. The Syrian regime must ensure that the remaining material is transported to the port as quickly as possible, to ensure that all chemicals can be eliminated by the end of June. The disposal of Syria's chemical stockpile is a strong example of international co-operation. Italy, the United States, Russia, Germany, Denmark, Norway, Finland and China are all making important contributions.

In addition to the support worth £2.4 million that the UK has provided to the Organisation for the Prohibition of Chemical Weapons destruction effort, we announced on 19 December that we would accept some of the chemicals for destruction in commercial facilities here. These chemicals are similar to many other industrial chemicals routinely handled in the UK and we are working to ensure the safe management of this operation.

A Royal Navy ship, HMS Montrose, is about to join the escort of the Danish and Norwegian vessels transporting the chemical stocks from Syria. My right hon. Friend the Secretary of State for Defence has also informed the House today that we will provide specialist equipment for use on board the US vessel where material of greatest proliferation concern will be neutralised.

The situation on the ground in Syria is appalling and getting worse, as I have described. The threat to regional and international security continues to grow, as the conflict increasingly cannot be contained within Syrian borders. We will continue to intensify our efforts to reach a political settlement, to save lives and to protect our own security.

It is only through a political resolution that the conflict can be brought to an end. The start of the Geneva II peace conference on 22 January is an important step, and, while we have no illusions about how difficult and challenging a process this is likely to be, we will do everything possible, with other nations, to help it succeed.

15:44

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

I thank the Foreign Secretary for his statement, and for giving me advance sight of it.

On Iran, agreeing the terms of the deal in Geneva back in November was indeed an important first step, but the real test remains how it is implemented on the ground. Given the past conduct of the Iranian regime, it is now vital that the international community remains vigilant and stringently monitors the implementation of the first stage nuclear agreement in the months ahead.

Turning to Syria, a conflict that began nearly three years ago as an uprising against the Assad regime has since inflamed sectarian fault lines within the country and mutated into a proxy regional conflict, so delivering support to those most affected by the ongoing violence remains urgent and vital. Ahead of this week’s long-awaited second pledging conference in Kuwait, Baroness Amos has already stressed that the conference will need to raise much more than the $1.5 billion raised last year if it is to meet the scale of the humanitarian need.

The Opposition of course welcome the Foreign Secretary’s statement that the UK Government have now allocated or delivered all our funding promises, but earlier today the Secretary of State for International Development confirmed that contributions from others have so far fallen well short. Will he therefore tell the House what action the Government are taking to encourage other nations to meet their obligations on past pledges, before further pledges are made in the coming days? We also welcome the Foreign Secretary’s efforts, along with the Friends of Syria group, to encourage the Syrian National Coalition to commit to attending the Geneva talks.

In the light of experience of such conflicts, such as the 15-year Lebanese civil war, and the apparent intractability of the factions fighting within Syria today, we all recognise the scale of the challenge, of which the Foreign Secretary spoke, involved in securing a full transitional deal in Geneva in the coming days. Yet surely the first goal at Geneva II, between the main international and regional players, could and should be to aim to secure a stop to the escalation and fuelling of the conflict.

That is why the role of Iran in particular may yet be crucial. Last week, Iranian Foreign Minister Zarif said that Iran would take part in the Geneva II peace conference if invited without preconditions. He added:

“We support any initiative aimed at finding a political solution to the Syrian crisis.”

It is of course right to acknowledge the role that Iran has so far played in deepening and inflaming this conflict. Yet with the need for resolution now so urgent, does the Foreign Secretary agree that Iran’s claimed resolve to be part of the solution should now be tested, and if so, does he agree that one way of doing so is to bring Iran to the table at Geneva to participate in the conference?

A key priority for the international community at that conference must surely be to minimise the problems of overspill across the region by working with allies in Jordan, Turkey, Lebanon and Iraq. Will the Foreign Secretary set out what other steps, beyond humanitarian support, the UK Government are taking to help the Governments of Jordan, Iraq and Lebanon to respond to the growing internal political and economic pressure that the Syrian conflict is placing on them?

The rise of al-Qaeda affiliated groups in Syria, such as those the Foreign Secretary mentioned, is not of course simply a concern for Syria; they form but part of a crescent of crisis that stretches from Iraq to Lebanon. Will the Foreign Secretary set out his assessment of the extent to which British citizens are playing a role in these conflicts, and will he assure the House today that our agencies are sufficiently focused on these deeply troubling developments?

The challenges to be addressed by the Geneva II conference are of course considerable, but the process under way to secure the peaceful destruction of Assad’s chemical weapons stockpile offers us a point of hope amid the death and destruction still being witnessed in the country. The Government will therefore have our support in the coming days in their effort to secure real and substantial progress in Geneva next week towards a political settlement that ends the humanitarian suffering of the Syrian people.

[Mr Hague]

I am grateful to the right hon. Gentleman, including for the strong support across the House for our trying to do everything we can to make a success of the start of the Geneva II process. He is of course absolutely right to say that a beneficial early product of that could be measures that stop the fuelling and escalation of the conflict. That is why I have talked, as have Secretary Kerry and Foreign Minister Lavrov at their press conference today, about the great desirability of local ceasefires and improved access for humanitarian aid even before we all get to Geneva next week. These are of course things that could also be beneficial products of the process.

The right hon. Gentleman asked about the role of Iran. He said correctly that Iran has done quite a bit to deepen and inflame the crisis, including through much direct support for the Assad regime and its brutal treatment of its people. Our position on Iran depends very much on its readiness to work with the outcome of Geneva I. The invitation letter of the UN Secretary-General is clear about the purpose of our invitation to Montreux and then to Geneva, where we will carry on next week, which is to implement the original Geneva communiqué of 30 June 2012. Iran was not present at that conference, but all the other nations are united behind that communiqué. That includes Russia, which was represented there.

That is the basis of Geneva II. It is about bringing about a transitional governing body with full executive authority that is formed by mutual consent. A signal of support for that being our united purpose would be very helpful in getting Iran to Geneva II. There is no problem in principle in any quarter, and certainly not among western nations, with Iran coming, but there is the practical problem of whether it is prepared to play a constructive role if it gets there. We would welcome stronger signals of that from the Iranians.

On the questions about Jordan and Lebanon, a great deal of the help that I have described is humanitarian assistance. In the case of Lebanon, where there has been violence, we use our diplomatic presence in every possible way to help the authorities to calm the situation. We also give direct support to the Lebanese armed forces. We help to finance some of their border posts. I welcome the recently announced support from Saudi Arabia for the Lebanese armed forces. It is providing $3 billion of assistance to build up the Lebanese armed forces. We have assisted Jordan with a good deal of equipment, as well as with the support that I have mentioned.

It is clear that the number of British nationals who have travelled to the region to fight is into the hundreds. We are vigilant about that and all our security agencies are focused on it. It is important to make it clear that we are prepared to act to obstruct people from doing that. The Government have the right and the power to confiscate passports. When people are resident in the UK but are not British nationals, we can cancel their leave to remain in the UK on the basis of such activity. I stress, as I have stressed since April 2011, that we advise against all travel to Syria. We of course advise people against going to fight in Syria, but we advise against all travel to Syria even for those who go there for more laudable motives. We are very limited in what we can do to assist people once they have gone there.

Our work on the destruction of chemical weapons will, of course, continue.

[Sir Malcolm Rifkind (Kensington) (Con)]

Although I welcome unreservedly the Foreign Secretary’s diplomatic efforts, does he acknowledge that neither he nor his American counterparts have any real clout on the Syrian moderate opposition because of our collective inability to provide them with any of the material help that they need to press home their objectives? Does that not contrast with the Russian Government’s ability to influence the Assad regime, as was demonstrated by their ability to deliver the sacrifice of all the chemical weapons within days, once the Kremlin had decided that it was necessary? If the west cannot give material help to the Syrian moderate opposition, must we not swallow our pride and work with the Russians to find the minimum that is required to bring this ghastly conflict to an end and to enable the international community to help the Syrians get rid of the jihadi terrorists who are threatening the whole of the middle east?

[Mr Hague]

Of course we work with the Russians. We discuss endlessly with the Russians, in any case, if there is any way in which we can together resolve the crisis. On chemical weapons, the permanent members of the UN Security Council, working together, have made the progress that we have described.

I think that my right hon. and learned Friend goes too far in saying that we have no clout with the Syrian opposition. What he says is not true, in that stark form, of the United States and the United Kingdom. I have many extensive discussions with the Syrian opposition. I was with the leadership of the Syrian National Coalition in Paris yesterday and they do listen carefully to what we say. They know, of course, that we have sent them assistance in the past. It is not the lethal assistance that my right hon. and learned Friend has consistently called for, but we have sent a great deal of other assistance to help to deal with chemical attacks and to save lives.

We have had to put on hold the delivery of that assistance because of what happened at the Bab al-Hawa border depot in December. To deliver assistance to the opposition we have to have confidence, and this House would expect us to have confidence, in its destination and in who will have control of it. We can resume and increase such assistance when we are satisfied on that point. That is of value to the opposition, and they are conscious of what the UK can do to provide that support.

[Mr Jack Straw (Blackburn) (Lab)]

I draw to the attention of the House the fact that, as co-chairman of the all-party group on Iran, I visited Tehran as a member of an all-party delegation last week at the invitation of the Iranian Parliament.

May I press the Foreign Secretary on the issue of Iran’s attendance at Geneva II? Iran was not present in June 2012, but the circumstances were very different, not least of which was that President Ahmadinejad was President of Iran at the time and not the much more moderate President, President Rouhani. Lakhdar Brahimi, the distinguished UN diplomat, has himself called for Iran to be allowed to attend Geneva II unconditionally. I plead with the Foreign Secretary to back Mr Brahimi, and to have a conversation with Mr Kerry who seems to be saying, according to news reports today, that the current Government in Iran have to sign up to a communiqué that is now 18 months old, Geneva I, and to which they were not a party and had no decision on whether to attend because they were not in that Government.

[Mr Hague]

The 30 June 2012 communiqué is 18 months old, but it is also the basis of the Secretary-General’s invitation letter to the participants in Geneva II issued on 6 January—last week. That is the basis on which we are going to Geneva II. The Geneva I communiqué is the basis of that letter: that is what we will be there to implement. Geneva I is not, therefore, just an old thing from some time ago when not everybody was there; it is the Secretary-General’s basis for the conference. It is therefore not asking too much to ask those who participate to express their support for that and their readiness to engage in a conference on that basis.

The right hon. Gentleman is right to say that the Government have changed in Iran, and what we have been able to do on the nuclear issue has changed in that time. Nevertheless, from everything we can see, the active support of the Iranians for the Assad regime, which is now carrying out some of the terrible crimes I have described, continues today, even with a change of Government in Iran. That is the background and we must not forget that. That is why we are putting the pressure on Iran to say, “If you want to come, show very clearly that you are going to engage on the same basis as the rest of us.”

[Sir Richard Ottaway (Croydon South) (Con)]

Of the three groups in Syria—the regime, the Islamists and the Free Syrian Army—the weakest is the Free Syrian Army. As my right hon. Friend said, many have concluded that the choice is now coming down to one between the al-Qaeda-backed Islamists and the regime. Given that both are backed by Russia and Iran, however, is that not a false choice? The Islamists are happy to support the regime, which is why the regime is not attacking them. If the people of Syria are to get their country back, we should do all we can to support the moderate opposition in Syria and, if necessary, revisit the decision to supply only non-lethal weapons.

[Mr Hague]

There is a three-way contest; my right hon. Friend is right. Of course, in reality it is even more complex, because many different groups make up the Free Syrian Army and the groups that are affiliated to al-Qaeda. I would never accuse Russia—or, indeed, Iran—of supporting the al-Qaeda-affiliated groups. They draw their support in other ways. Nevertheless, he makes the case for giving more support to the moderate opposition. I say again: we are ready to resume and increase our support through important but non-lethal supplies, provided we are confident about what will happen to those supplies. That is a condition on which this House would always insist.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

The situation in Syria is an indictment of the international community and our failure to take seriously the doctrine of the responsibility to protect. Is it not time for this Government and, indeed, the international community together, alongside the process in Geneva, to look seriously again at all options of intervention to bring this horror to an end?

[Mr Hague]

It is an indictment of the international community—I will readily agree with that—and I have often spoken myself of the failure of the UN Security Council and the international community. Nevertheless, that is a failure with which we have to work, because as we have found before, with the vetoing of resolutions at the UN Security Council, we are not able to win agreement in the UN Security Council for far less radical or interventionist measures than what the hon. Lady is calling for. Therefore, we have to tackle the situation in other ways: to relieve humanitarian suffering in all the ways I have described; to promote a political settlement, working with Russia wherever we can; and to ensure that the chemical weapons are disposed of. Yes, there would have been earlier solutions, but they were not practical at the Security Council, so they would not have been legal and would not have commanded international support.

[Mr John Redwood (Wokingham) (Con)]

If we cannot guarantee safe delivery of non-lethal supplies, would it not be particularly unwise and foolish to start delivering weapons into this cauldron? Is it not right to concentrate on diplomacy, which is not compatible with war?

[Mr Hague]

As my right hon. Friend knows, we are very much concentrating on the diplomacy. As my statement reflects, I am not proposing lethal supplies—I have always been clear that we would come to this House and have a vote if we were going to do that—but there is a role for non-lethal supplies, if they can be safely delivered and controlled, that save lives and help a moderate opposition to function, because without them diplomacy will not work. If it is only extremists and the Assad regime, diplomacy will never succeed, so there is a role for our support for the moderate opposition in that regard, but we must have confidence in how such supplies will be used.

[Angus Robertson (Moray) (SNP)]

All diplomatic progress involving Iran and Syria is welcome, but the Foreign Secretary is right to highlight the fact that the situation involving refugees in Syria is calamitous. It is also right to support refugees in situ in neighbouring countries, but there are thousands of refugees who have made it to Europe. Germany has accepted 80% of pledged places among Syrian refugees. Amnesty International has described the attitude of countries, including the UK, towards Syrian refugees as “shameful”. Why does the UK have such a poor record in not accepting Syrian refugees?

[Mr Hague]

It is clear from what I have said that the UK has a strong record on the humanitarian side. Our donation, of £500 million so far, is the biggest ever in our history and one of the biggest in the world. We are the second most generous nation in the world in this regard, and we are trying to help people, as the hon. Gentleman says, in situ. On the question of refugees, last year between January and September, we accepted 1,100 Syrian refugees into the United Kingdom for asylum, treating them on their individual merits, as we do people from other nations. That fact is sometimes neglected and overlooked.[Official Report, 16 January 2014, Vol. 573, c. 14MC.]

[Martin Horwood (Cheltenham) (LD)]

I support the Foreign Secretary’s plea to the Syrian moderate and peaceful opposition to vote on Friday to take part in the Geneva II talks. However, if they show that willingness to overcome their genuine qualms and participate, can we reward them by stepping up support, in practical and operational ways, for the peaceful opposition, as called for in the letter by many honourable colleagues in The Times today?

[Mr Hague]

Yes, we can. I hope we can, and my hon. Friend will understand from what I am saying that I would like to be able to do so. I stress, however, that because of the difficulties that arose and the loss of control at the main depot in Bab al-Hawa, we had temporarily to put on hold the supplies of communications and logistics equipment we were sending in December. We will need to be assured that the restructuring of the supreme military council that is meant to be taking place over the coming days has satisfactorily addressed those problems, so that we can receive a high level of assurance in respect of the equipment we send.

[Jeremy Corbyn (Islington North) (Lab)]

Along with my right hon. Friend the Member for Blackburn(Mr Straw), I was part of the all-party delegation to Iran last week, which I put on the record. I welcome the Foreign Secretary’s statement about the tentative nuclear agreement with Iran. If there is to be a successful Geneva II process, however, I agree with the former Foreign Secretary that it must involve Iran. If other countries are involved in the Syria talks and themselves support jihadist forces in the country, questions need to be asked about the amount of resources they are putting in. Why is it that the Foreign Secretary and, apparently, the United States are still opposed to Iran being part of the process, which can bring about a permanent peace and save a lot of lives?

[Mr Hague]

I can only reiterate what I said to the right hon. Member for Blackburn (Mr Straw)who asked about the same point: it is not a dogmatic opposition in principle; we simply want those who attend Geneva II to be there on the same basis. Let me put the argument another way. If we think back to the Geneva I communiqué, which is now the basis of the peace talks to come, I do not believe that, had Iran been present at that time, we would have been able to arrive at that agreement on creating a transitional governing body in Syria. We all hope, as the right hon. Member for Blackburn said, that there will be a change of policy, but it is necessary to have a little more evidence of such a change than we have seen so far in order for Iran to play a constructive role at Geneva II. We would be very pleased to see in the coming days further signals of a readiness to play such a constructive role.

[Alistair Burt (North East Bedfordshire) (Con)]

The House will welcome later today the spokesman for the president of the Syrian opposition coalition, and the moderate opposition could have had no more staunch supporter than my right hon. Friend the Foreign Secretary. If the negotiations in Geneva are to succeed, and if the imbalance of forces that my right hon. Friend described so graphically in his statement is not to be addressed by the Geneva process, how can some balance be made that will give the regime an incentive to negotiate as opposed to feeling that its position is particularly strong?

[Mr Hague]

I join my right hon. Friend in paying tribute to what some of the leading members of the National Coalition have achieved, in the most difficult circumstances imaginable, in helping to bring together, in a country without any free political institutions, a coalition of people committed to a democratic and pluralist future for Syria. For the reasons my right hon. Friend described, it is important for people in other countries to help keep a moderate opposition in being and in business. We have contributed to that in various ways and, as I mentioned, we are ready to do so again, but we need assurances about how our assistance will be used. If the opposition go to Geneva II and the regime is not prepared to work on the basis of creating a transitional governing body drawn from regime and opposition, I think many people across the world will draw the conclusion that they should give increased support to that moderate opposition in the face of diplomatic blockage from the Assad regime.

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

I am grateful for the update but so far I am still searching for a coherent British policy on Syria. If we want to be anything other than willing participants in the failure of the international community, would it not be a good start simply to say that the future of Syria will not include Assad?

[Mr Hague]

We have been saying for a couple of years that Assad has no role in the future of Syria. After all, the proposition that will be before us at Geneva II is the establishment of a transitional governing body formed by mutual consent from regime and opposition. It is inconceivable that any opposition group, however moderate or extreme, would give its consent to Assad’s being part of that transitional governing body. Nor is it realistic, after the death of 125,000 people and years of torture, abuse and murder, to think that Assad could ever again unite the people of Syria. I think it is clear to us and to most observers that he has no role in the country’s future.

Our policy is very clear: to promote the political solution, to help keep a moderate opposition in being, to deliver humanitarian assistance, and to assist with the destruction of chemical weapons stocks. On those things I think we are fairly united across the House.

[Sir Roger Gale (North Thanet) (Con)]

My right hon. Friend has referred to a murderous regime on the one hand and extremists on the other, and to the 2.5 million displaced people in Syria who are receiving no aid whatsoever in terms of food or assistance. Within that 2.5 million, the Christian community is probably suffering disproportionately. Will my right hon. Friend seek to ensure through the United Nations at Geneva II that that community is not dismissed as a sideline?

[Mr Hague]

My hon. Friend has made a very good point. This conflict has affected minorities in Syria, including Christians, particularly sharply and horribly. It is important for that point to be made, and it will be made strongly at Geneva II. It reinforces the case for seeking the political solution which alone can protect those minorities, including Christians, and for the National Coalition—the opposition—to be as broadly based as possible. I am pleased to say that there are leading Christians in the opposition ranks, and it is important for them to retain that broad support so that they do not fall into the trap of sectarianism into which so many have already fallen.

[Mr George Howarth (Knowsley) (Lab)]

The right hon. Gentleman will be aware that in recent weeks the jihadists—some of whom, as he conceded, are from these shores—have been promoting sectarian division between Sunni and Shi’a. Does he agree that any way forward must involve protecting not just the rights of Christians, but the rights of all people—of whatever faith—including their human rights? What guarantees does he think can be provided to ensure that that happens?

[Mr Hague]

The right hon. Gentleman has made an important point, which adds to the point made by my hon. Friend the Member for North Thanet (Sir Roger Gale). It must be stressed that the people of Syria, in the main, are not extreme, and have not been sectarian in their history. This is a country which, for a long time, has been able to combine happily alongside each other people of many different cultures and religions. Extremists are taking advantage of the conflict in Syria, rather than the conflict’s being a reflection of the true nature of the Syrian people, and we need a political solution to be arrived at as soon as possible so that they can return to their true nature. That is not for the benefit of any outside power; it is for them, so that they can go back to the happier solutions at which they had arrived together, living alongside each other.

[Sarah Teather (Brent Central) (LD)]

May I press the Foreign Secretary on his answer to the question about refugees? The 1,500 figure that he gave referred to those who had been accepted for asylum, rather than those who had been accepted as part of a co-ordinated resettlement programme. Just before Christmas I visited the Zaatari refugee camp, and saw a project run by the Jesuit Refugee Service to support refugees living in host communities in Jordan. The situation is dire, particularly for those who are very vulnerable, which is why I want to urge the Foreign Secretary to think again. We could make a real contribution to a co-ordinated programme of resettlement for the most vulnerable refugees, who could benefit greatly from coming here.

[Mr Hague]

There will of course be a variety of views about this, but I hope no one will think the United Kingdom has anything other than a strong record in trying to look after vulnerable people caught up in this conflict. We are currently providing food for 320,000 a month, medical consultations for 300,000 a month, and cooking sets and mattresses and blankets for 385,000 people. The United Kingdom is one of the most generous countries in the world in looking after vulnerable people affected by the conflict in Syria.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Will the Foreign Secretary tell the House who he thinks is arming the jihadist al-Qaeda-linked groups in Syria and what discussions has he had with the Governments of Saudi Arabia and Qatar about shifting their emphasis towards humanitarian assistance rather than arming al-Qaeda-linked groups?

[Mr Hague]

Gulf states also provide humanitarian assistance. For instance, Saudi Arabia has provided $373 million to the UN appeals, and of course in Kuwait on Wednesday we will be looking to some of the Gulf states to make huge contributions to the humanitarian appeal so we will be reinforcing this point. At the meeting we had in Paris yesterday, those states—including Qatar, Saudi Arabia and the United Arab Emirates—were very clear about channelling their support through the National Coalition and making sure it is fighting for people who want a democratic and pluralist Syria, and that is what we always look to it to do.

[Mark Field (Cities of London and Westminster) (Con)]

I welcome the Foreign Secretary’s confirmation that the UK has made a substantial contribution to humanitarian aid and also in relation to chemical weapons decommissioning, but notwithstanding the strength of feeling we have heard across the House today, will he accept that it is the settled will of this House that there should be no military intervention by the UK in Syria?

[Mr Hague]

As my hon. Friend can gather from what I have said, I am not proposing that. There was no mention in my statement of military intervention in Syria. We are addressing this crisis in many other ways. I do not want to anticipate what the settled will of the House will be months and years into the future, but the Government are not planning for, and are not proposing, any military intervention of our own in Syria; he can be assured of that.

[Paul Flynn (Newport West) (Lab)]

Did not this House on 29 August beneficially influence world opinion and reduce substantially the threat to the world from both chemical and nuclear weapons? Will the Foreign Secretary continue to resist the cries to give war a chance, and insist on the most likely path to peace which is through diplomacy, not through military intervention?

[Mr Hague]

I hope the hon. Gentleman heard the statement I gave a moment ago because I do not know how he could have got any impression that it was about anything other than diplomatic success and, through diplomacy, making sure the crisis is addressed as best we can. On the chemical weapons, I think we have had this disagreement before. There was a very important change of policy by Russia and by Damascus on chemical weapons in September, but I believe the origin of that was the fact that military action was being considered and debated in the United States, so sometimes diplomacy benefits from the soft power having some hard power behind it.

[Rory Stewart (Penrith and The Border) (Con)]

As the Foreign Secretary knows well, the reason the moderate opposition are weak is unfortunately not only that they lack weapons. It would be extremely difficult and very dangerous for the west to try to micro-manage the balance of forces on the ground. Will the Foreign Secretary therefore please concentrate on ensuring that our humanitarian assistance is more focused, in particular in relation to Jordan? Refugees in Jordan are currently unable to work. Could we work with the Jordanian Government to ensure employment and livelihoods for refugees in Jordan?

[Mr Hague]

This is also a very good point because we are now seeing people who have been displaced for the long term: children who have been away from their schools for two or three years; people who have been without work for that amount of time. That is reflected in our redefinition of some of our aid priorities, so we are trying to help in more ways than just feeding people when they are in refugee camps. We will have to shift increasingly in that direction and my right hon. Friend the International Development Secretary can speak about this in greater detail and with greater authority when she returns from Kuwait, but I very much take on board the point my hon. Friend makes.

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

The news today that there have been serious discussions about localised ceasefires—particularly in places such as Aleppo, which has suffered badly over the past year—is obviously welcome. Does the Secretary of State accept that it must be a top priority for this Government and the international community to try to roll out those localised ceasefires as quickly and widely as possible? That would help to bring support to those who are suffering in the humanitarian crisis throughout Syria, and it would also provide a good foundation for the Geneva talks and for any settlement reached thereafter.

[Mr Hague]

Yes, I agree with the hon. Gentleman. I was discussing that matter with the other delegations at the Paris meeting yesterday. These are very difficult things to bring about, and I do not want to heighten expectations too early. In such a complex and brutal conflict, even localised ceasefires are difficult to bring about. However, it is important to pursue discussions about that matter with Russia, and it could well be an important track to discuss at Geneva II.

[Mr Crispin Blunt (Reigate) (Con)]

Does my right hon. Friend agree that the one area of progress, on chemical weapons, has been instructive? On that issue, western nations were able to agree to co-operate with Russia on a strategy. Until the parties to this conflict are no longer able to look to their respective international patrons for support because those patrons have agreed on a way forward, they will be pretty unlikely to come to an agreement in circumstances that Eugene Rogan has described not as “winner takes all” but as “loser must die”.

[Mr Hague]

Yes, I think there is a lot in that as well. It is generally true to say that there is now a greater appetite among some of the outside powers for a political settlement in Syria than there might be among some of the people who are fighting each other in Syria. It was clear in our discussions yesterday that all 11 members of the core group of the Friends of Syria supported a political settlement and wanted the opposition to go to Geneva II. That included Saudi Arabia, Qatar and other Gulf states, which have been mentioned in these questions. We also need Russia to assist in bringing the regime to Geneva II in the same spirit, and that is what Secretary Kerry has been pursuing with the Russians today. We will all be pursuing it with them over the coming days.

[Mr Gordon Marsden (Blackpool South) (Lab)]

I very much welcome the Foreign Secretary’s acknowledgement of the impact on Christian and other religious minorities of the al-Qaeda depredations in northern Syria. I also welcome his assurances of focus in that respect. May I press him further and say that one of the key issues is humanitarian aid? Many of the people affected will require resettlement in areas in which their families have lived for hundreds of years. It will also be important to extend diplomatic assurances to those people so that President Assad does not try to recruit them as proxies to shore up his own power in Syria.

[Mr Hague]

Yes, that is also true. The hon. Gentleman is looking ahead a bit, however. We are not yet in a situation where people can go back to their homes or be resettled, or where assurances can be given about the position of different communities in Syria. In a way, that would be a good problem to have. It is the next stage that we will need to move on to. Our overwhelming emphasis now is on staunching the bloodshed, but we will have to move on to those issues and he is quite right to raise them.

[Mrs Anne Main (St Albans) (Con)]

I welcome my right hon. Friend’s commitment not to provide any lethal support to the so-called moderate rebels. When thinking about a transitional Government, may I also urge him to learn the lessons from places such as Bangladesh? It had a transitional Government put in place but they did not consider the outcomes in regard to the delivery of democracy for those people who were not part of that Government.

[Mr Hague]

A transitional governing body is no easy thing to bring about in any country, and, as I said in my statement, we must not underestimate the difficulty of doing that in a war-torn, divided country such as Syria. The provision to do so by mutual consent is very important, because through that a transitional governing body could just work, mutual consent being required for the membership on both sides. It is very important to uphold that commitment of our Geneva communiqué of 2012 as we go into the talks next week.

[Graham Jones (Hyndburn) (Lab)]

Will any democratic settlement at Geneva II include or preclude Assad? Will it include or preclude those around him—those who are culpable in what has gone on? In particular, will it include or preclude the jihadists and the fundamentalists?

[Mr Hague]

I go back to what I have referred to before. What we are seeking—the basis of the invitation letter from the UN Secretary-General—is a transitional governing body formed by mutual consent. Such a thing, drawn from regime and opposition, would naturally guard against the extremes, as each side would have to agree to the representatives of the other. That would not be a recipe for Assad to continue, as I mentioned earlier, or for the al-Qaeda-affiliated extremists to have a role. Again, that shows the importance of our sticking to this principle and this formula in the forthcoming negotiations.

[Penny Mordaunt (Portsmouth North) (Con)]

Will my right hon. Friend update the House on what support his Department is providing to individuals working for aid agencies, and their families, to ensure that they are getting all the information and support they need to keep as safe as possible while carrying out their vital work, for which I am sure the whole House will wish to thank them?

[Mr Hague]

My hon. Friend is right to say that the people working for the aid agencies do an extraordinary job. They are often in danger, and quite a number have lost their lives in the Syria conflict. They are the unsung heroes, and she is right to refer to them in the House. Of course we do everything possible to provide the information and equipment they need, but if at any stage she or any other hon. Member thinks there is more we need to do on that, we are always open to ideas.

[Ian Paisley (North Antrim) (DUP)]

I thank the Secretary of State for his statement and for the advance copy of it. He mentions the E3 plus 3 agreement with Iran. What impact will that have on the sanctions against that country? Will there be an early release of them?

[Mr Hague]

As I mentioned to the House, we were able to announce in the past 24 hours that this agreement will come into force next week, on 20 January. That means that the sanctions relief we have offered Iran starts from then. That will involve the amendment of some European Union sanctions and United States sanctions, and it means that the US will unfreeze a certain amount of Iranian assets—that will be spread over the six-month period of this agreement. It is anticipated that this amounts to about $7 billion of sanctions relief for Iran, provided the Iranians are sticking to their part of the agreement on the nuclear issue. That agreement is then renewable for further periods of six months while we work on a comprehensive solution. So a limited measure of sanctions relief is available to Iran from 20 January.

[Mr Julian Brazier (Canterbury) (Con)]

My right hon. Friend, with his command of history, will know that Britain, America and Russia have all had embassies sacked by mobs in Tehran, although in the Russian case that happened rather longer ago. Following the question from my hon. Friend the Member for Reigate (Mr Blunt), does my right hon. Friend agree that the key to a change in attitude by the slightly more moderate regime in Iran, and indeed in Damascus, lies in persuading the Russians that they share the same interest in this as we do in the long run?

[Mr Hague]

That is a very important factor. I have often discussed it with Foreign Minister Lavrov and the Prime Minister has discussed it with President Putin, and the American leaders continue to do the same. After all, it is in the interests of Russia, as with all of us, to make sure that extremism does not take hold, in Syria and in the wider region. That means that we all have to work together on bringing about a political solution. So we hope that, just as we have done that on chemical weapons, we will be able to do it during and around the Geneva II process to make a political process viable. We will spare no effort to work with Russia in bringing that about.

[Mark Hendrick (Preston) (Lab/Co-op)]

I had a meeting earlier today with the chief of staff of the Syrian National Coalition, who claimed he had evidence that the Iranian and the Assad regimes are providing covert support for ISIS—the Islamic State in Iraq and the Levant—and Islamists operating in Syria. He said that the target of ISIS is not the Assad regime but the Free Syrian Army. Is the Foreign Secretary aware that all attacks are taking place on the Free Syrian Army with the support of Assad? If he is and believes it to be true, does it not put a totally different complexion on the war in Syria in that the Free Syrian Army is on its own? We should look at more ways to support it and not just provide humanitarian assistance.

[Mr Hague]

I am aware of that suggestion. Whatever the truth of it, it is the case that the Assad regime has fed the growth of extremism. I cannot corroborate statements of it giving direct support to such groups, but if there were such evidence I would be interested to see it. None the less, it is its position, its politics and its brutality to the people of Syrian that have fed the growth of extremism. Assad is not the alternative to the extremists; he is producing them. Although I cannot confirm exactly what he says, I think it supports the same analysis, which means that we must do what we can to keep a moderate opposition in business, with all the constraints that we have discussed in our questions today.

[Steve Baker (Wycombe) (Con)]

What is the Government’s assessment of the flow of arms into Syria from the arms markets that emerged in Libya after our action there?

[Mr Hague]

It is not possible to be precise about such things. Clearly, arms flow in from many different sources and in many different ways. Funnily enough our concerns about arms in Libya are more about the ones that remain there. There is more evidence of those arms remaining in Libya. We are working on a UN decommissioning programme to be able to take arms out of Libya and out of commission in Libya. Of course we cannot be precise about those flows of arms, but my hon. Friend can be sure that a high proportion of them that flowed into Libya in 2011 are still in the country. However, there would have been more of them had we not taken the action that we did, which helped to bring the conflict in Libya to an end.

[Mrs Madeleine Moon (Bridgend) (Lab)]

The Assad regime and the al-Qaeda affiliates have been targeting medical teams. It is extremely difficult for the people in Syria and in the refugee camps around the region to access complex medical care. Is it not time now for the UK to respond to the United Nations High Commissioner for Refugees’ urgent request for countries to open their doors to cases of complex medical need, particularly to those who have also been victims of torture?

[Mr Hague]

A number of views have been expressed in the House about that. I reiterate our very strong work and commitment to help people in such countries. I know she is making a slightly different point, but that is where we are concentrating our help. That includes providing 250,000 medical consultations within Syria as well as tens of thousands outside it. The UK is playing a very big part in trying to provide medical care to the most vulnerable people. I am afraid that I cannot offer her more than that at the moment.

[Mr Philip Hollobone (Kettering) (Con)]

As we were responsible, almost 100 years ago, for drawing up the borders in this part of the world, it would perhaps seem most appropriate that we now play our part in helping to contain the Syrian crisis within those borders. I know that in his statement the Foreign Secretary said that we are giving £15 million to Lebanon and Jordan. Compared with our generous humanitarian assistance, that does not strike me as a huge amount of revenue for those countries. Will he assure the House that we are doing all we can to ensure that the conflict stays within Syria itself?

[Mr Hague]

Yes, but I am not in any way excluding the possibility that we will need to do more on that. That is what we have given so far and it is hugely appreciated by Lebanon and Jordan. Some countries are in a position to do much more; I mentioned briefly that Saudi Arabia has announced a $3 billion donation to build up the Lebanese armed forces, largely to be delivered and implemented by France. I hope that my hon. Friend will also bear it in mind that those countries are rightly receiving assistance from other quarters as they try to contain the crisis.

[Gavin Shuker (Luton South) (Lab/Co-op)]

I am grateful to the Foreign Secretary for giving the House this update. Will he talk about Russia’s blocking of a statement condemning the atrocities in Aleppo as well as a statement calling for immediate unfettered access for aid agencies? What more can be done to ensure that Russia lives up to its responsibility to the most vulnerable in this conflict, regardless of the politics?

[Mr Hague]

We must continue to discuss that with Russia. I mentioned in my statement the discussions today between Secretary Kerry and Foreign Minister Lavrov. They covered some of these issues, such as how humanitarian access can be improved ahead of next week’s talks and the possibility of localised ceasefires. Of course, we are disappointed that Russia is not readier to agree international statements or resolutions at the UN that we ought to be able to pass and that it would be wholly appropriate to pass and enforce. The Russians are not prepared to do that, so we try to work with them in other ways to relieve humanitarian suffering and we will spare no effort in doing so.

[Neil Carmichael (Stroud) (Con)]

President Putin has made some small conciliatory steps in connection with the forthcoming winter Olympics. Is there any sign that the same logic and approach apply to his thoughts on Syria?

[Mr Hague]

We will see. The subject is very different and, of course, Russia has played an important role in the work on chemical weapons—it has been and remains indispensable in that regard. I hope that, following the discussions today between the US, Russia and the UN, Russia will demonstrate its readiness to deal with the Syrian regime. The Syrian Foreign Minister is going to Moscow this week and I hope that the Russians will say to him, “There are now certain things you have to do to relieve the suffering and to give humanitarian access, as well as to go to the Geneva talks, fully in the spirit of the Geneva communiqué, to bring about a transitional governing body.” We look to Russia to make those things plain to Damascus.

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

It has been said that that Mr Jarba attended the Friends of Syria meeting in Paris and asked for certain guarantees and commitments before the Geneva II conference. What requests were made by Mr Jarba and what was the response of the Friends of Syria group? On Iran and the E3 plus 3 agreement, does the Secretary of State understand the concern raised by many countries in the middle east about the agreement? What steps have been taken to get those countries to have confidence in it?

[Mr Hague]

Of course we understand the concerns about the agreement with Iran. People will inevitably be sceptical about that and we have given extensive briefings about the detail, which has greatly reassured many countries. Those countries will want to know that we are monitoring it very carefully and that the International Atomic Energy Agency is playing the full role it needs to. We want to know that, too. They will want to see the evidence over the coming months that the agreement is working, which is completely understandable. In the meeting yesterday, President Jarba of the National Coalition asked for more support for the National Coalition, in whatever way any country around the table could provide it. I made it plain, as I did just now, that we can resume and increase the support we give through non-lethal supplies provided we can be confident about where it will be delivered to and who will be using it.

[Bob Blackman (Harrow East) (Con)]

I welcome the measures that have been taken on the agreement with Iran on nuclear arrangements, but the key is to monitor compliance with the terms. Reports suggest that Iran is still pursuing the use of advanced centrifuges, which would give it nuclear weapons capability. Will my right hon. Friend confirm what additional arrangements are being made to monitor Iran’s compliance with its agreement with the United Nations?

[Mr Hague]

That is an absolutely crucial point. Our monitoring of the agreement involves the formation of a joint commission by the E3 plus 3 and Iran, and there is a very active role for the IAEA. It is important that all the agreements that Iran has made with the E3 plus 3 and the IAEA are enforced and monitored. The IAEA is determined to do that; it was agreed, in the implementation plan, that that would happen. We, and the IAEA, will monitor this very carefully indeed.

[Guy Opperman (Hexham) (Con)]

Last night, I returned from a four-day trip with the Alliance of European Conservatives and Reformists to the Nizip 2 refugee camp, just inside the Turkish border. Turkey’s amazing humanitarian action and our aid programme—its provision of food, in particular—should be complimented. While I was there, I met representatives of UNICEF, the Foreign and Commonwealth Office and AFAD and, separately, Syrian opposition leaders and military commanders, as well as dozens of refugees, whom we are helping with winter clothing and a social action project. All the Syrians I met want their country back and are desperate to return home. I urge the Foreign Secretary to take all steps necessary to enable Syrian refugees to return to their homeland, both diplomatically through Geneva II, and ultimately through the provision of safe havens.

[Mr Hague]

I applaud what my hon. Friend and other colleagues have done in going to assist the people in that region, and I do not doubt at all the sincerity of the message that he brings back, which is that people want to be able to go to their homes in peace. That again underlines the urgency of the political process that we are beginning next week. It is a formidably difficult process, but it is right to start and to try a political process; that is the only sustainable hope of peace. He can be assured that we will give every effort to that.

[Andrew Bridgen (North West Leicestershire) (Con)]

There have been calls—some from unexpected quarters, and some from the Chamber today—for the UK to take a small number of refugees in this crisis. Does my right hon. Friend agree that that is pure tokenism? If the UK were to take 500 refugees from a pool of more than 2.5 million people who have been displaced from their country, it would have very little effect. The answer really is for the UK to stick with its policy of supporting the refugees in situ, so that they can return to their country when the conflict is over.

[Mr Hague]

Ours is a generous policy, as I say. Whatever views people across the House hold on the subject, I hope that no one will say anything other than that the United Kingdom is among the most generous and big-hearted nations on earth on this. We are by some distance the second largest donor country in the world, helping hundreds of thousands of people with medical consultations in Syria, Jordan and Lebanon. That is the right policy for the United Kingdom, and it is making a very positive impact.

Point of Order

Monday 13th January 2014 Commons Chamber

16:43

[Angus Robertson (Moray) (SNP)]

On a point of order, Mr Speaker. At Prime Minister’s questions last week, the Prime Minister said, in relation to the Scottish independence referendum, that the subject was one for

“debate among the people in Scotland.”—[Official Report, 8 January 2014; Vol. 573, c. 307.]

However, we have learned that a Cabinet Office official working on Scottish constitutional issues and Andrew Dunlop, who is Downing street’s Scotland adviser, have been co-ordinating in Madrid with the Spanish Government in opposition to independence. Meanwhile, the official ITAR-TASS News Agency has cited a source in the Prime Minister’s office as confirming a desire in Whitehall for Russian support in opposition to Scottish independence. What options are open to Members to scrutinise UK Government special advisers, given the Prime Minister’s assurances that the issue is one for debate among the people in Scotland?

[Mr Speaker]

Order. First, Ministers are of course responsible for the accuracy of what they say in the House, in common with all other Members. Secondly, the hon. Gentleman asks what avenues are open to Members to enable them to scrutinise special advisers and undertake scrutiny more widely. The answer is that there are manifold mechanisms available to them, including the use of the Order Paper and, dare I say it, the ingenious, and some might think occasionally outrageous, deployment of bogus points of order.

European Union (Approvals) Bill [Lords]

Monday 13th January 2014 Commons Chamber

[Relevant documents: 23rd Report from the European Scrutiny Committee, Session 2012-13, HC 86-xxiii, Chapter 11; and 25th Report from the European Scrutiny Committee, HC 83-xxii, Chapter 1.]

Second Reading

[Mr Speaker]

I call the Minister for—well, for a number of different matters. Mr Edward Vaizey.

16:44

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)]

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

Thank you, Mr Speaker. I am, in fact, the Minister responsible for culture, communications and the creative industries. They are a number of different matters, but they are all linked.

The sole purpose of the Bill is to support two draft regulations of the Council of the European Union. They both rely on article 352 of the treaty on the functioning of the European Union, which permits the adoption of a measure to attain one of the objectives set out in the European Union treaties but for which no specific power is given in the treaties, provided that it has the unanimous support of all member states.

Thanks to this Government, who passed the European Union Act 2011 to ensure that no treaty could be passed without a referendum, such measures must be approved by Parliament. Parliamentary scrutiny of European measures is a matter of lively debate at the moment, and I am delighted to see so many of my colleagues who are experts on European matters present in the Chamber this afternoon. I am also delighted that it is this Government who have given Members of both Houses the chance to decide whether to approve such measures. I note that the Bill was debated in the other place, which is renowned for its scrutinising abilities, for precisely 37 minutes. The German Parliament carried out similar scrutiny before approving the measure—its measures are similar to ours—although I am not sure how long that debate lasted.

[Mr William Cash (Stone) (Con)]

Will the Minister give way?

[Mr Vaizey]

I will now take my first intervention.

[Mr Cash]

Is my hon. Friend aware that the Europe for Citizens programme could be construed as no more than a provision to enable grant-making for organisations that tend to be of a Europhile capacity? Hopefully it would be resisted by the Government on the grounds that it would be likely to induce propaganda for the purposes of European elections and the like.

[Mr Vaizey]

I do not want to get ahead of myself, because I must first cover the specific regulations. My hon. Friend is a lawyer and an expert on European matters. I am not here to defend every measure. For example, I note that one of the measures audited in 2013 related to supporting the “European Network on forward policies and actions for seniors in Europe”. With one in five Europeans already in their 60s, our take on old age needs reconsidering. That programme focused on older people in the European Union, not European federalism. I will address the Europe for Citizens programme, to which he refers. It is one of two regulations—I say this for the benefit of all hon. Members taking part in the debate—that will be approved by the Bill.

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

Will the Minister give way?

[Mr Vaizey]

I will now take my second intervention.

[Jacob Rees-Mogg]

How does the Minister’s earlier example meet the test of subsidiarity?

[Mr Vaizey]

It is not a question of subsidiarity. The question of subsidiarity applies to the whole programme, which has been in place since 2007 and supports a number of measures. I will come to examples of the programme shortly.

Following my hon. Friend’s perceptive intervention, I hope he will indulge me for a few minutes while I deal with the first measure and see what interventions we have on that. The measure establishes a legal obligation on the European institutions to deposit their paper historical records at the European University Institute, which is based in Florence. Previously, European institutions have voluntarily deposited their archives at the EUI under contractual agreement, and the proposal is to make this obligatory. It is designed to provide long-term certainty that the archives will be preserved in accordance with recognised international standards at a single accessible location.

[Richard Drax (South Dorset) (Con)]

Will my hon. Friend give way?

[Mr Vaizey]

I will take my third intervention.

[Richard Drax]

Does my hon. Friend agree that it would be wonderful news if the EU were not archived?

[Mr Vaizey]

Speaking on a measure on archiving documents of European Union institutions gives rise to the possibility of many light-hearted comments. I have resisted making such comments, but that is in no way an indication that I would resist those of other Members about the interest, or otherwise, that these documents could engender when being read by future generations.

A 1983 Council regulation already obliges the European institutions to preserve and provide access to the historical papers once the records are 30 years old, when they would no longer be in business use. Europe’s Council, Parliament, Commission, Court of Auditors and Economic and Social Committee, and the European Investment Bank, currently meet that obligation by depositing their paper archives with the EUI on a contractual basis. The proposed legal obligation reflects those existing arrangements and will not change the point in time at which the public can access historical records or the place at which they can be accessed.

Making this practice a legal obligation will help to ensure transparency and scrutiny of the European institutions’ work, and it fits alongside this Government’s drive for greater transparency both at home and in Europe. We should all welcome a measure that allows for greater accountability around EU decision making, the more so because it will have no impact, financial or otherwise, on the UK’s own archives.

As the European Union moves towards digital record-keeping, the measure also provides that the European institutions should, where possible, make their records available to the public in digital format. In addition, the EUI is to be given permanent access to each institution’s digital archives to fulfil its obligation to make historical records accessible to the public from a single location once they are 30 years old.

The European Court of Justice and the European Central Bank will be exempt from the obligations under the proposed regulation, although they can deposit their records on a voluntary basis. The Court is exempt because of the large volume of records, most of which are case files often containing sensitive personal data that need to be quickly accessed to support its functions. The exemption of the ECB is due to its organisational autonomy and the fact that its historical records are subject to a separate 2004 regulation.

The measure will be financed by the depositing European institutions from within their existing budgets and so will have no financial impact on the UK. Hon. Members will be delighted to learn that the Italian Government have made suitable premises permanently and freely available to the EUI to ensure that the deposited archives of the European institutions are preserved and protected in accordance with recognised international standards. The European Council has published the text of this measure and has received consent from the European Parliament. It is therefore ready for adoption, subject to the agreement of hon. Members.

Let me move on to the second measure, on which I do not anticipate a great many interventions. It provides for the continuation of the Europe for Citizens programme for the period January 2014 to December 2020, building on the previous programme that covered the period 2007 to 2013. It is important to point out that there have been some crucial improvements to the programme. More effort will be put into monitoring and evaluating funded projects against published performance indicators and boosting the transferability of results to give a better return on investment.

[Jacob Rees-Mogg]

I am sorry to disappoint my hon. Friend in his hope that there would not be too many interventions, but before he gets into how this will be improved, may I ask him to look at paragraph 4 of the document? It says that this is being introduced in order to

“bring Europe closer to its citizens and to enable them to participate fully in the construction of an ever closer Union”.

The Prime Minister said a year ago that he did not want ever closer union. Will my hon. Friend square the circle?

[Mr Vaizey]

It is important to look at the kinds of programmes that will be supported by this measure. It is also important to note that when one uses the phrase, “Ever closer union”, it can mean many things to many different people. Perhaps if I spend some time giving examples of the programmes that have been funded and those that might be funded, we can have a wider, almost philosophical debate on the issue.

[Jacob Rees-Mogg]

Will my hon. Friend give way?

[Mr Vaizey]

I can hear my hon. Friend making an attempt at a third intervention.

[Jacob Rees-Mogg]

Fourth.

[Mr Vaizey]

It is my hon. Friend’s fourth attempt and I think it would have been his third intervention, had I accepted it. I expect him to make several interventions during my remarks and I will take them at the appropriate moment. I also expect him to make one of his formidable speeches, for which he has become legendary in this House. With his indulgence, however, I will elaborate on the point I was making.

As well as highlighting the improvements in transparency and evaluation, I want to make the point that the commemoration element of the programme has been significantly increased. In the previous programme, commemoration was just 4% of the budget, but it now amounts to 20%. This is a serious point, because, of course, 2014 is the year in which we begin our commemorations of the great war, so I for one am pleased that the commemoration element of the programme will increase.

It is also very important—this is also serious—to point out that the commemoration element of the programme goes beyond simply commemorating the great war. It will include funding to commemorate the second world war—that is particularly relevant given the 70th anniversary of D-day this year—as well as the victims of totalitarian regimes such as Nazism and Stalinism, and, of course, the holocaust.

[Jacob Rees-Mogg]

On my hon. Friend’s earlier point about ever closer union and what it means, is he saying, as has been said to this House before, that we should not pay attention to the detail of the document and that we should accept bland assurances that it does not mean what it says?

[Mr Vaizey]

What I am saying is that one should look at the kinds of projects that have been funded in the past and the kinds of projects we expect the programme to fund in the future. Hon. Friends may well disagree with the funding of some events, both past and future, while other hon. Members of a different political persuasion may disagree with the funding of others. That is the nature of a programme that funds a huge range of projects.

[Mr Lee Scott (Ilford North) (Con)]

Does my hon. Friend agree that, during these times of a rise in anti-Semitism in Europe, anything that remembers what happened in the holocaust can only be a good thing?

[Helen Goodman (Bishop Auckland) (Lab)]

Good point.

[Mr Vaizey]

My hon. Friend quite rightly achieves approbation from all corners of the House for his intervention. I know that the hard work he undertakes on these issues as a Member of Parliament is well recognised. It is a serious point that much of the programme’s funding supports issues relating to commemoration, which covers the holocaust, and some British organisations that commemorate the holocaust have received funding.

[Sir Roger Gale (North Thanet) (Con)]

I suspect that the House probably feels that the United Kingdom is quite capable of providing its own recognition of the holocaust and the great war and that we do not need any help from Europe. At the start of his remarks, my hon. Friend said that the Bill had been debated in another place. I suggest to him that the bill that matters is that to the British taxpayer. Could he tell us how much cultural citizenship costs the UK taxpayer?

[Mr Vaizey]

In this debate, we will find that many hon. Members are incredibly well informed and know a lot about the issue. My hon. Friend’s intervention is the second that tempts me to jump ahead in my speech. It is important, however, to answer a direct question directly: the budget is €185 million. I will come on to the budget, because there are certain things to say about it at the right moment.

[Richard Drax]

Will the Minister give way?

[Mr Vaizey]

I can hear another hon. Friend wanting to intervene, but I do not know whether or not the intervention is about the budget.

[Richard Drax]

On questions of percentages and budgets, I understand that 20% will go towards commemorations, but will my hon. Friend comment on the 60% for projects linked to the Union political agenda?

[Mr Vaizey]

My hon. Friend neatly takes us on to the next element of the budget. Some 60% of the budget will support other measures to encourage greater friendship between people living in Europe. One example of something that will be financed is twinning.

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

Oh no.

[Mr Vaizey]

I was about to say that I did not know hon. Members’ views on the European Union, but I should perhaps say that I do not know their views on twinning, apart from that of my hon. Friend the Member for Isle of Wight (Mr Turner), who has just made his view quite clear.

As a constituency MP, I for one see that twinning brings great joy to my constituents. If you will indulge me for a minute, Madam Deputy Speaker, the market town of Faringdon in my constituency is twinned with Le Mêle-sur-Sarthe in France, and it intends to twin with Lipcany in the Czech Republic. The market town of Wantage is twinned with Mably in France—in fact, we even have a Mably way—and Seesen in Germany, and Didcot is twinned with Planegg in Germany and Meylan in France. May I use this opportunity to pay tribute to the late Terry Joslin, a Labour councillor in Didcot—he sadly died at the end of last year—who was very much at the forefront of Didcot’s twinning arrangements?

[Mr Turner]

Does my hon. Friend accept that many twinnings, which are jolly good, are done at no cost to the taxpayer?

[Mr Vaizey]

I accept that point, and as a good Conservative, I am always in favour of anything that has no cost to the taxpayer. I also think that we all, as constituency MPs, know that when there is an opportunity for support, whether from the Big Lottery Fund or any other grants programme, we would encourage our constituents to apply for it, where appropriate.

Another example of the kind of programmes that are likely to be supported is shown by the recent grant of €100,000 to the National Council for Voluntary Organisations, which is a British organisation. It received the money last year to help European bodies understand how to run voluntary organisations. The rest of the budget will be spent on programme administration and the evaluation and dissemination of best practice between participating organisations.

Like its predecessor, the programme will be implemented through grants based on open calls for proposals and through service contracts based on calls for tender. To provide for the analysis and dissemination of the results, these activities will be supported by regular external and independent evaluation. Priority will be given to projects using new working methods or proposing innovative activities. An interim evaluation report on the implementation of the programme will be drawn up by the European Commission no later than the end of 2017, and a final evaluation report will be drawn up no later than 2023. The programme has no new impact on UK domestic policy. Such activities have been supported since the programme first began.

[Mr Philip Hollobone (Kettering) (Con)]

Will the Minister update the House on the size of the budget of the programme compared with the size of the budget of its predecessor, and on whether the budget reflects the search across the European Union—supposedly—for savings for the taxpayer in these straitened times?

[Mr Vaizey]

I will certainly do so, but to put the answer to my hon. Friend’s question in context, it is important to stress that the Bill will have no financial effect on the UK Budget. Some might say, for the sake of argument, that the money could be better spent in the UK, but the fact is that it forms part of the European Union budget that has been agreed, so money not spent on this European project would be spent on a different one. I therefore take my hon. Friend’s intervention as an opportunity to remind the House that the Prime Minister secured a significant reduction in the European Union’s overall budget. In fact, I think it is the first time the EU has ever reduced its budget.

The original budget proposed for the programme was €229 million, which would have been a 7% increase on the budget for the 2007-2013 programme, which was €215 million, but I am pleased to say that, following the budget negotiations—otherwise known as the multi-annual financial framework—that figure came down to just over €185 million, which was a reduction of €44 million. It is also important to stress that the €185 million is spread over seven years and that we estimate the UK contribution to be about £2 million to £3 million a year. With that, I commend the Bill to the House.

17:05

[Helen Goodman (Bishop Auckland) (Lab)]

As the Minister set out, the two purposes of the Bill are to provide proper archiving arrangements for European documents and to establish a programme for a citizens’ Europe. At first sight, they seem rather disparate, but they have a shared theme—history. The first is about preserving documents for future historians and the second is about looking back at the European events that catalysed the foundation of the EU.

I hope the programme can be used to strengthen people’s understanding of the EU, although I am not wholly convinced that more knowledge will mean a less critical view of the current institutional arrangements.

[Richard Drax]

Would the hon. Lady agree that the more people know about how the EU works, the less likely it is to continue to exist?

[Mr Vaizey]

That should be a reason for some people to support the proposals.

[Helen Goodman]

As the Minister points out, that should be a reason for some people to support the programme, but actually I do not necessarily agree with the hon. Member for South Dorset (Richard Drax), for reasons I shall explain.

I have some observations and questions for the Minister about these two major themes in the Bill. As he has explained, EU documents will be archived at the European University Institute in Florence so that future historians can benefit from complete records. The Clerk of the House has explained to me that our own material is archived in Victoria Tower. Will the Minister tell the House—[Interruption.] Could he stop talking to his Parliamentary Private Secretary and listen to me? Would the EU institutions be able to make duplicates in vellum as we do in this Parliament?

The Minister said that the Bill does not cover the documents of the European Court of Justice and the European Central Bank. The ECB position is rather controversial, given our own decision, in 1997, to publish, after only six weeks, the meetings of the Monetary Policy Committee. Expectation management is an important part of monetary policy, so I wonder why we are not seeing the ECB papers in the same way. The whole exercise cannot be described as a measure to improve transparency, given the decision to keep everything secret for 30 years. Who decided that these documents should be kept secret for 30 years and why? My hon. Friend the Member for Bolsover (Mr Skinner), who sadly is not in his place, has commented on Mrs Thatcher’s approach to the miners’ strike, demonstrating how few people can fully understand the significance of papers when they are kept locked up for 30 years.

The aim of the citizen programme is to improve how citizens participate in and contribute to the EU by strengthening remembrance and common values and encouraging a broader engagement and debate. The budget is €185 million, so by my calculation about £7 million will be spent in this country—not, I would suggest, a vast amount. The Minister has said what he thinks we will contribute to the budget, but I wonder whether he can say how much of it he thinks will be spent in the UK.

As the Minister said, 20% of the money will go towards commemorating the world wars and victims of totalitarianism. The Government are spending some £50 million on commemorating world war one. If the remarks of the Secretary of State for Education and the decision to put Lord Kitchener on the £2 coin are anything to go by, the Government are embarking on an unnecessarily jingoistic approach, which this EU programme might usefully counterbalance.

I want to ask the Minister how the funds will be distributed. It is unfortunate that world war one appears only fleetingly for children in key stage 3, so a little more understanding can only be a good thing. Will the money for the commemoration of the world wars be distributed in its own channel, or will it be bundled up with the money the Government are spending directly and through the Heritage Lottery Fund?

As the Minister said, the major part of the moneys will be used on EU citizenship projects for learning and twinning. Since the major wave of twinning took place in the late-1970s, just after we joined the Common Market, and given that the EU now has 22 member states, it seems a good idea to give this initiative fresh impetus so that new relationships can be built across the Union.

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

I do not want to jump in on the hon. Lady, but there are 28 member states if Croatia is included.

[Helen Goodman]

I am happy to be corrected by the hon. Gentleman. His arithmetic is better than mine.

I wonder whether some towns will choose to be twinned with places in Bulgaria or Romania. I do not know whether the Minister has heard anything about that.

Projects for young people to learn about EU citizenship are particularly good, especially given the Government’s foolish decision to take personal, social, health and economic education, which included citizenship, out of the core curriculum. Young people are the most likely to self-identify as European. I hope that more information and education on, and more understanding of, Europe will mean that people will not be misled by the wilder claims about the European Union made by people who are Eurosceptic. However, I am not convinced that, once people know how the European institutions operate, their views towards them will be flattering.

I have received some interesting information from the National Council for Voluntary Organisations about how the Europe for Citizens programme is operating. I hope that it will reassure the hon. Member for Stone (Mr Cash) that the money will not just be taken up by Europhile institutions. It states that the grants have enabled

“support for participation and democratic engagement”,

which is surely a good thing; projects on the

“impact of EU policies in societies”;

and the

“exchange of expertise between members in different countries”.

When I was thinking about who might benefit from taking part in such programmes, I thought of the Minister. Many parts of his brief could benefit from a more collaborative approach with our European colleagues. For example, there could be collaboration on child protection on the internet, tackling the uncompetitive behaviour of the internet giants, and providing a proper copyright and intellectual property protection system. On the point about expertise, it might be worth looking at what some of our European colleagues do to prevent the export of heritage items, which is far more effective than what he is doing.

[Mr Cash]

On the hon. Lady’s comments about my intervention, does she agree that grants that might be made to organisations to promote European values, as they are called, should be evaluated against what is in the interests of all citizens? Should they be confined only to political organisations or to charities?

[Helen Goodman]

The hon. Gentleman makes a good point. I was going to come on to the question of whether they should be purely political, but he will surely agree that there is a shared commitment in Europe to democracy and liberty, and that is fruitful for people to understand how they can exercise their rights within the European context and in the European institutions.

It would have been better for these projects to be up and running before the EU elections in May. Why has it taken the Government so long to bring the Bill to this House? The Lords dealt with it at the end of July, when the Minister in the other place stated that his intention was for the Bill to receive Royal Assent by the end of 2013. Will the Minister say why the timetable has slipped? That is particularly unfortunate, as we are only four months away from the EU elections.

[Chris Heaton-Harris]

I am slightly concerned that the hon. Lady ties the Europe for Citizens programme with the European elections, because to gain funding from it people have to sign up and put in their contract bid that they will support the European Union’s initiatives and be pro-European. It would have been useful if the hon. Lady had bothered to read any background information on this before she stood up at the Dispatch Box. Surely it is not necessarily in the interests of democratic debate to have only one side of the argument funded by this programme?

[Helen Goodman]

The hon. Gentleman’s remarks are rather ungenerous. It is obviously important for people to understand what it is they are voting for. They are being asked to elect candidates and they need to know what powers the institutions have. I would have thought that could be shared across the House. I was struck by the energetic twinning arrangements in Oxfordshire.

[Jacob Rees-Mogg]

I am extremely grateful to the hon. Lady for giving way. Following on from the point made by my hon. Friend the Member for Daventry (Chris Heaton-Harris), the programme says that strand 2 will spend 60% of the money and that

“It will give preference to initiatives and projects with a link to the Union political agenda”,

so there is an underlying political agenda. I agree with my hon. Friend that to spend the money before the elections could have an improper influence on them. It would be unlikely to give money to the UK Independence party, for example.

[Helen Goodman]

The money will not be given to political parties in any case, so the hon. Gentleman’s concern about unfairness is somewhat misplaced. The fact is that the money will not be spent before the European elections.

How will the money be publicised, so that we in Durham might benefit from it as much as people in Oxfordshire evidently have? How will people apply? It is crucial to the success of the project as a lever in raising people’s participation that it involves not just the same group of organisations that have a long-standing interest and involvement in European projects, but goes wider than that.

I hope the evaluation is not too onerous, because as much could be spent on the evaluation as the sums of money that are being given out, which would not be efficient. What steps has the Minister taken to ensure that the arrangements are open and straightforward?

[Richard Drax]

Given that the EU accounts, as I understand it, have not been signed off for the past 15 years, how can anyone be confident that this money will go where it is meant to go?

[Helen Goodman]

The hon. Gentleman needs to look at the areas that have caused the European Union’s auditors to qualify the EU’s accounts. My understanding is that they do not include the citizens programmes of education and learning for young people.

I am content with the arrangements on the Order Paper for further scrutiny of the Bill. I do not intend to divide the House tonight, but I agree with the suggestion made by other Members that it is important that we encourage and facilitate non-political cultural exchange, for which the Minister has responsibility. Over the Christmas holiday I was looking at the BBC’s collection of the nation’s favourite poems. Hon. Members will be pleased to know that the nation’s No. 1 choice is Kipling’s “If—”. I think that reveals something about the British, while the collection taken as a whole tells us something about our imaginary life and the value we place on our countryside. It would be fascinating if we knew more about the cultural life, views, experience and perspectives of the other member states, so I wonder whether the Minister has paid any attention to what we might do to facilitate more cultural exchange as well.

[Mr Cash]

Will the hon. Lady give way?

[Helen Goodman]

No, I have finished.

17:21

[Mr William Cash (Stone) (Con)]

I am most grateful to you for calling me at this opportune moment, Madam Deputy Speaker, because I was going to ask a rather pertinent question about the BBC. There has been a lot of publicity recently about what I think is called the media action trust. This is an organisation within the BBC that apparently also has its own premises there and has, so we are informed, been provided with substantial funds from the EU for training journalists and activities of that kind. I have raised this issue in the House in the past, but that is typical of the kind of thing that is going on in the run-up to the European elections.

Let me say straight away that I do not have any particular concern about the first part of the Bill, which concerns the archives. There might well be some hidden problems buried in the archives in Florence that turn out to be a concern, but that is not what I am concerned about today. What I am profoundly concerned about, however—I shall vote against the Bill for this reason—is the question of European citizenship, which goes back to the treaties and the objectives of political union. One of the things that I well remember and that deeply concerned me in the very first part of the Maastricht debates, all those years ago, was the reference in the Maastricht treaty to conferring rights of citizenship on the people of the United Kingdom.

There was a good deal of debate about that in this House at that time. Although that reference did not say specifically what “European citizenship” would mean, we now know where it has been intended to lead. We only have to look at what Viviane Reding, the senior vice-president of the European Commission, said last week to know that it is based on an absolute determination to go pell-mell for a full united states of Europe. The proposals in this Bill, which, if it were possible, I would prefer to describe as a disapprovals Bill rather than an approvals Bill, aim to provide money for the purposes of generating information about and supporting the study and promotion—that is the key word—of political union.

I have with me the full documentation from the Council of the European Union dated 17 September 2013. My hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) has already rightly referred to the passage that says that preference will be given

“to initiatives and projects with a link to the Union political agenda.”

However—no doubt when he rises to speak he will also refer to this; I hope I am not pre-empting him too much—under the heading “Programme Management”, that document also says:

“In general, preference will be given to grants for projects irrespective of their size but with a high impact, in particular those which are directly linked to Union policies with a view to participate in the shaping of the Union political agenda.”

These provisions are said to be done under article 352. Those of us who have been involved in the whole process—I have the honour to be Chairman of the European Scrutiny Committee, and I have been a member of it for the best part of 30 years—may remember the old article 308, now replaced by article 352. Those associated with administrative law will know that where there is a statute, there is often a supplementary provision that allows one to do all such things as are reasonably incidental to the carrying on of the main functions. That is precisely what article 352 achieves.

Although I deeply disapproved of the provisions of the Referendum Bill in most respects, which is why I voted against most of them, it is quite right that—and I am glad that the coalition Government have provided for this—for matters of this kind to be dealt with by Act of Parliament. This regulation and these arrangements are dictated by unanimity, which means that we could say no. I shall now provide a number of reasons to explain why I believe that this grant-making exercise is aimed at providing propaganda, as I see it, for purposes of political union. That is why we should say no.

I heard what the hon. Member for Bishop Auckland (Helen Goodman) said in her reasonable speech about the whole question of European elections, and I alluded to the same point in my intervention on the Minister. I believe that although not much money is involved, this will benefit organisations—I mentioned the word “charities”, but this measure will not relate solely to charities—that are politically motivated for the purposes of promoting the objectives under article 352, which amount to the whole integrationist process. I have in mind statements of the kind recently made by Mr Barroso, who said in the so-called blueprint for the future of Europe that

“the European Parliament and only the European Parliament is the Parliament for the European Union.”

That shows the sort of propaganda whose mechanism and funding will drive the argument further and further in that direction. As many argued in the documents relating to the Bill, this could be extended towards schools, for example. Some in the House of Lords spoke of greater engagement with schools, educational colleges and the rest. Then there is the BBC and the training of journalists, and so it goes on.

If the money, albeit only £2 million, is to be tied under the contract and the tender by these arrangements, many of the organisations concerned will have a very significant impact because what they write will be reproduced in much of the press. There might then be, shall we say, £150,000 or £250,000-worth of grants, providing a very substantial opportunity to disseminate propaganda for the European Union.

In the present situation, however, 95 Conservative Members—I believe it is really well over 100—have said that we should veto European legislation if it is not in our interests. I would be interested to know whether I am right—I believe I am—that this is mainly aimed at providing money for foundations, organisations and, as it specifically mentions, think-tanks to promote European policies and European integration, and not the other way round.

At the same time a serious debate is taking place between those who are in favour of more integration and those who are against it. The Prime Minister is trying to find some middle ground, but it is crystal clear that what is also happening is the promotion of European integration, and this programme will assist that process. If we are to have an in-or-out referendum, albeit far too late in my opinion, I think it very important for the Bill’s immediate objectives to be confined to ensuring that no money is provided under the aegis of the United Kingdom, or with its encouragement, for the purpose of promoting activities in which we in this country have effectively said that we do not want to engage.

[Jacob Rees-Mogg]

Does my hon. Friend fear that money from this pot could be used at any point to promote the European Union prior to a referendum in this country?

[Mr Cash]

I sense that you, Madam Deputy Speaker, would not wish me to go too far down that route, but the short answer to my hon. Friend’s question is yes. That is a good illustration of why we need a provision—under the aegis of the European Scrutiny Committee’s report, which has been supported by numerous Conservative Members of Parliament—to ensure that we do not end up paying for the promotion of integrationist policies that are contrary to what we believe in.

[Zac Goldsmith (Richmond Park) (Con)]

My hon. Friend is making some excellent points. Does the Bill contain any provisions or mechanisms that would prevent the use of money from this pot for propaganda purposes before a referendum in this country?

[Mr Cash]

That is an extremely important question, to which the answer is zero: none at all. Perhaps the Minister would like to intervene in order to repudiate what I am saying, and to assure me that none of this money will be used for any propaganda exercises—that none of it will be given to think-tanks that are promoting the idea of the European Union—and to make absolutely clear that we are not, as a Government, supporting the promotion of propaganda for the purposes of political union in advance of European elections. The Minister is sitting with a Sphinx-like expression on his face. I suspect that he knows the answer, but is not terribly keen to give it to me.

[Mr Vaizey]

It is a poker face, actually, not a Sphinx-like expression. I will respond to my hon. Friend when I sum up the debate. There are so many Members in the Chamber this afternoon who are experts on this subject and who will want to make lengthy interventions to educate the House about the Bill that I do not want to stand in their way, given that I know I have a slot.

[Mr Cash]

There is another point, too. A very interesting statement, which I happen to know is true, was made under the aegis of the European Scrutiny Committee. In his letter of 19 November 2013, the Minister said that an agreement on the substance of the draft regulation had been reached by COREPER in March 2013. I need not spend too much time on that, because the COREPER problems are contained in our report, but the point is that the agreement to which the letter referred was ticked off by officials.

I am not denying that the Minister has come to the House and said that he endorses this, and the same situation arose in the House of Lords. However, I want to emphasise that our report, which has been supported by all those Members of Parliament, identified that process as a matter of concern, because it had been dealt with by officials in the first place and ticked off by them, and then along came the Government and agreed to it. We had recommended that the whole matter be dealt with in a European Standing Committee. Our recommendation has understandably been overtaken by events, in the shape of the Bill, but we remain deeply concerned about the way in which the money could be used.

I am always pleased to be able to be constructive, and to offer a tribute when it is required. I was glad to hear the Minister tell us—and I happen to know that this is true—that the amount of money in question started out as £229 million, and has been reduced to £185 million. I am glad he linked that to the reduction in the budget generally under the multiannual arrangements he described, but I would only make this point, especially on behalf of some on this side of the House: I put down the amendment that helped the Government to arrive at the decision that reducing the budget would be a good idea, because that was a unanimous decision that had been agreed to on both sides of the House.

[Andrew Bridgen (North West Leicestershire) (Con)]

My hon. Friend talks about propaganda and UK taxpayers’ money being used to fund it. Is he aware that, anecdotally, as we approach the centenary of the first world war it is being referred to by the European Union as the European civil war?

[Mr Cash]

I am extremely interested in that because I recall that a serious dispute arose only a few days ago, when the distinguished Secretary of State for Education made remarks regarding the manner in which world war one was being addressed. The debate ultimately turned on the question of whether or not it was Germany that started the first world war, and I have no doubt at all, and nor did A. J. P. Taylor.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Gentleman rightly said earlier that the Chair would be keeping a watchful eye to ensure that this debate sticks to the purpose of discussing this very short Bill. At the moment the hon. Gentleman is just within the bounds of discussing Europe for citizens. He may be straying somewhat, however, and I am sure he will bring his remarks back to the subject under discussion.

[Mr Cash]

I certainly will, and precisely because of that reference to world war one. I took part in the debate on the Floor of the House about the idea of our helping to commemorate world war one, and I believe we can do it, as my hon. Friend the Member for North Thanet (Sir Roger Gale) said, on our terms without European money. It is about remembrance, and that is most emphatically in this Bill, as I am sure all Members of this House will recognise, so when I referred to the question of world war one, I was referring to the remembrance aspect of this strand of the programme. I would like to make it clear that I am very much in favour of that and in no way would want to prevent substantial remembrance events from taking place. Indeed, I shall be going to Normandy next year, where my father was killed in the second world war, and won the military cross, at Maltot near Caen. I shall be going there to commemorate all the brave men and women who died in the second world war and also to pay tribute to those who took part in the first world war. I am not against the principle of this, therefore, and I am very much in favour of moneys being provided for it, although I think we can do it on our own terms and we do not need this Bill to do it.

There is one final point I wish to make. I think the entire debate that we have had in the last few days about whether or not there should be vetoes and whether or not there should be disapplication of legislation is very important. For the reasons I have given, and because of the way in which the money, which is our money, is being spent by the European Union on projects that are not consistent with the voters’ wishes in general, this is not the kind of thing I would want to support. Furthermore, that is why I shall be voting against this Bill. I am also extremely surprised because I do not think the Minister is in any way disagreeing with my general proposition that, for the reasons set out clearly in the programme itself, this money is going to be made available to those who promote the political objectives of the European Union and the citizenship that goes with it and will provide substantial grants for that purpose.

All of these points are reasons why we should exercise a veto. Indeed, this proposal would provide a perfect example under my parliamentary sovereignty Bill, which I introduced a few months ago. If 100 Members were to decide they did not want something like this, I hope that would lead to its being vetoed.

In summary, I do not approve of this approvals Bill. This is all about democratic decision making. Let us bear in mind that the draft regulation is indeed a regulation, which is of a higher order even than a directive. We have to comply with every aspect of a regulation. I have great affection for the Minister, and I have heard what he has said. I greatly approve of almost everything he does, but not this measure. This should be a European Union disapprovals Bill.

17:39

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

Although we have just passed the auld Scots new year, this is the first chance I have had to congratulate you on your new appointment, Madam Deputy Speaker. In the context of another debate that is going on outside this place, which is not unrelated to Europe in some respects, it is good that a Scot has been elected by her colleagues to such a prominent and important UK constitutional position. Long may that capacity continue in the United Kingdom.

We are talking about another Union today, however. The matter of the United Kingdom draws the hon. Member for Stone (Mr Cash) and me together, but that other Union has forced us apart for 30 years. I shall not echo his concluding remarks about the question of a veto. Were that to be established as governmental and Commons practice, he would want to apply it even to something as gentle, timorous, limited and constrained as this European Union (Approvals) Bill. That would certainly vindicate my view that his election to the chairmanship of the European Scrutiny Committee was akin to putting King Herod in charge of a maternity ward. Indeed, he has proved that in his attitude to this generally meek, mild and inoffensive measure that the Minister has put before the House tonight.

[Chris Heaton-Harris]

Actually, such a veto already exists. The measure that I like to call “Bill’s Bill” would not even apply to this. I think the right hon. Gentleman followed us through the Lobby on the EU legislation that gave us a veto on the Bill we are discussing today. So, timorous though it might be, we already have the ability to veto it.

[Mr Kennedy]

I gather from the hon. Member for Stone’s speech that we are going to face a Division on the Bill’s Second Reading, so the House will have an opportunity to decide. The Minister will be aware of the presence of some notable evergreens who remember the days, and particularly the nights, of the Maastricht saga in this House. He will know that, on this Bill, he has the backing of the Government and, I would imagine, of a swath of the parliamentary Conservative party. He also has the backing of Labour, as the official Opposition, and I think I am correct in saying that he has the unanimous backing of the Liberal Democrats, although I never seek or aspire to speak for them in any leadership capacity or in an ex cathedra manner.

Before the Christmas recess, I raised a question with the Deputy Prime Minister, my party leader, who was standing in for the Prime Minister. I pointed out that there could be quite a difference between Government rhetoric on Europe and the reality. The Bill is interesting because, on this occasion, the rhetoric and the reality are as one. The hon. Member for Stone is correct—I have read the correspondence—to say that the Minister pointed out in the early stages of this measure that the Government were not pleased about what was then a projected percentage increase in the available budget, and that they would seek, through negotiation, to push that sum in the opposite direction. I congratulate the Government on their act of positive engagement at European level, which has achieved exactly that. Those cost reductions are to be welcomed, and the rhetoric of the Government has matched the delivery. That makes it all the more easy for people such as me to support the Government in the Lobby on this issue. We have also supported the Bill in the Lords, as my noble Friend, Baroness Falkner, made clear.

I do not wish to dwell at all on the established practice of the European University Institute being based, located and accessed in Florence and that now being given legal status as a result of this measure. However, I want to say a word or two about the second half of the Bill, which deals with the Europe for Citizens programme, where I wish to make a contribution not on behalf of the Liberal Democrats, but in a personal capacity on behalf of the European Movement, with which I have been associated for a number of years—I have had the privilege and pleasure to be its UK president. As the Minister knows, the European Movement is all-party and, most significantly, as I always say, non-party in its composition. It has been with us, in this country and elsewhere on the continent, since the formation of Europe itself—the political Europe in the aftermath of the second world war. Over the decades it has made a notable and distinguished contribution to the dissemination of knowledge—genuine knowledge, not propaganda—through schools, local voluntary organisations and so on.

The European Movement suffered in the era of the Blair Government through the launch of Britain in Europe. As we all know, Britain in Europe was not so much a case of “Waiting for Godot” as of waiting for Gordon; it was a two-act play in which nothing happened, twice. The Prime Minister assembled his pro-European forces and marched them to the top of the hill on more than one occasion, and absolutely nothing came of it. The group that suffered most during that period of raised expectation followed by zero was the long-standing European Movement, which was rather eclipsed by Britain in Europe and has been clawing its way back ever since.

The European Movement is central to the second part of the Bill, because its entire raison d’être fits ideally with precisely what the Bill talks about. The characteristically excellent Library research paper states that in an explanatory memorandum of 26 January 2012, so just under a year ago,

“the Government approved of the proposed simplifications to the programme’s administration”—

the Europe for Citizens programme—

“and observed that the programme reflected, and could potentially support, the UK Government’s aims and programmes, in particular the Big Society agenda and Positive for Youth. There were also potential benefits to UK civil society organisations, local authorities and organisations, and grassroots sports and culture projects.”

The constitution and raison d’être of the European Movement fit ideally within what the Government have pointed out, but here comes the rub: the European Movement used to enjoy a direct subvention from the Foreign and Commonwealth Office. That came to an end in Mrs Thatcher’s days, and perhaps that is no great surprise. What is perhaps a wee bit more surprising is that nothing was ever restored in the long years of the Labour Government that occurred later. I raised the issue with both Prime Minister Blair and Prime Minister Brown but to no avail. It is not a matter for the Department for Culture, Media and Sport. It has, in the past, been a matter for the FCO, although if DCMS wished to enter and make good the breach, I can assure the Minister that it would be welcome to do so. I hope that he will take this opportunity to point out that there is a bit of an irony that the European Movement is often offered practical support, through the use of facilities, by many European consulates and embassies within the UK yet receives nothing by way of practical support from our own FCO.

When we are passing a Bill such as this, with the very things that the Government are highlighting approvingly and the potential that this Bill can bring, it does seem a bit ironic, if not perverse in the extreme, that the European Movement is getting overlooked in this way. Wearing that hat, I make a plea to the Minister to draw the matter to the attention of his colleagues at the Foreign and Commonwealth Office and to look for a little bit of largesse as we reach the closing stages of this coalition Parliament.

[Mr Cash]

I am listening with great interest to the right hon. Gentleman, not least because, from his perspective, the European Movement does its job. However, is he not over-concerned about this matter? Surely, under these arrangements, he should expect the European Movement to get the moneys, because that is made clear under the Bill. I may not believe that we should pass the Bill, but if it does go through, as seems likely, I believe that the European Movement will benefit. Is he not being a bit over-anxious?

[Mr Kennedy]

I am less anxious now than I was just before I accepted that intervention. If the European Movement makes an application to such funds, I will be able to quote an opponent of the very measure that gives rise to such access as well as supporters such as the Minister and me. I hope that that might help its prospects as and when it makes an application. For the first time ever in nearly 30 years in a European debate, I can look at the hon. Gentleman, regard him as my hon. Friend and say, “D’accord”. I am most grateful to him.

In conclusion, one thing that always bedevils the European debate is the meaning of vocabulary. The classic is “federalism”, which has a very different meaning the minute we cross the English channel to what it has come to mean not least in the tabloid press in this country. Another example is the term “ever-closer union” on which we have touched. Of course it has its antecedents with the initials ECU, which was used in a slightly different context several decades ago.

As we are seeing in the Scottish debate, and as I think we can see in the European debate—these measures can assist in this process—the words “ever-closer union” could be more appropriately replaced with the words “ever-closer understanding”. The more that the practical implications, particularly for citizens’ rights, in the second part of this Bill create a climate of more accessibility and greater, ever-closer understanding, the better it will be.

17:52

[Neil Carmichael (Stroud) (Con)]

There is a huge amount about the European Union that I would like to change. Indeed, all organisations of that type need to be reformed, and there is a huge opportunity coming up. The Prime Minister’s commitment to a referendum in 2017 is predicated on the fact that we will also see substantial changes. I would like to see a lot of changes, particularly the deepening and widening of the single market to include energy. I want to see more emphasis on productivity across Europe, and more capacity for European countries to trade with each other and, above all, strike a bigger punch in the global economy as well. That is all about ensuring that the European Union is fit for purpose. I am, therefore, by no means immune to the idea that the European Union needs to be reformed and changed. However, let me first celebrate the fact that we are today debating this issue, which is down to the coalition Government who passed the European Union Act 2011.

This is a fabulous opportunity for us to demonstrate the value of that Act, because it is through that Act that we are making this decision. It is proof that Parliament—I am talking about this Parliament, but other Parliaments could pass similar legislation—can indeed exercise some authority over the decision making of the European Union. The Government should be congratulated not just on being bold enough to pass that Act but on being so easily able to use it in a situation such as this.

Importantly, this legislation is founded on the treaties to which we have signed up. Those treaties require, in this particular case, unanimity, which gives the decision we are making even more force, which is useful. That does not mean that we should be handing out red cards every time we think about an issue, because we also must ensure that the European Union works. A single market is one example where we need a more considered and conciliatory approach to ensure that it operates not just for our benefit but for that of everybody else in the European Union, particularly when we are negotiating a free trade agreement with the United States.

Such decisions require unanimity in the Council of Ministers, and our Minister will not be able to nod the matter through unless or until we vote accordingly tonight. That is a clear statement that this Parliament has more power than it did before, and that is down to the European Union Act 2011. When we confront either the next general election or the referendum, we will be able to say that we have delivered for Parliament more capacity to influence the situation in the European Union.

Having talked about the Bill in a constitutional context, I now want to move on to the measures it contains. It is a good idea to move all the archives to Florence, particularly to the European University Institute, which I have visited. It is obviously logical to have everything in the same building. None the less, I cannot imagine that many people would want to visit Florence just to look at the archives. If that is the case, they are indeed committed to something that is not as exciting as other things they might like to find. The fact is it is right to have archives for the European Union. Historians will want to know how things unfolded, and will want to be able to access such findings, so I am happy with that measure.

On citizens and, effectively, promoting the European Union through the fund, it is sensible to take into account the Minister’s remarks on twinnings. In my constituency, a large number of towns and villages are twinned. They enjoy the experience and get a huge amount of cultural advantage from it, as they meet many people from different regions. Stroud itself is twinned with Saint-Ismier near Grenoble, and I find the linkage with the people there extraordinarily valuable, but it is neither overtly political nor party political in any sense. The people in the twinning organisation are Conservatives, Liberal Democrats, Labour party supporters—there are some—independents and those who are not interested in politics at all. The linkage is first and foremost cultural.

I will not go into detail about all the things that will be supported by the money, because Members might raise an eyebrow about some of them. In broad terms, however, this is a reasonable amount of money spent in a reasonable way, especially as it has already been allocated through the budget.

My last point is a territorial one. In the explanatory notes, we are reminded that the Bill applies to the whole of the United Kingdom. Scotland might make the foolish decision to leave the UK, in which case it will effectively leave the European Union, and that may well raise an issue for this measure. I remind the House that we should be absolutely emphatic in our view that Scotland should remain a member of the United Kingdom and, therefore, a member of the European Union. These matters should be discussed in 2017 when we have had an opportunity to recalibrate some of our policies and reassess where we stand, and—fundamentally, in my view—we should then ensure that Britain’s membership of the European Union continues through a reformed, modernised and, in many cases, vastly reduced EU, but one in which business can thrive, trade is developed and our punch as a country and as a continent are enhanced.

It is absolutely right that the 2011 Act was passed. The Bill is an example of the value of that Act, and I hope to see more opportunities to show that in the months and years to come.

18:00

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

It is a privilege to follow my hon. Friend the Member for Stroud (Neil Carmichael), because I am going to start my speech with a similar point to that with which he finished his. It is interesting to see how we got to the point of having this debate. As the House knows, the legal position is that the UK now holds a veto over these proposals under the EU treaties and section 8 of the European Union Act 2011. The Government are not permitted to support the proposals or abstain unless they are approved by Parliament.

The European Union Act is the much-heralded Act that means that we, as the UK Parliament, are scrutinising some aspects of European business that have never been properly examined before by nation state Parliaments. Our Government should be congratulated on that and I thank them for the opportunity. To provide such parliamentary approval, the Government have introduced this Bill, and hence we have the debate today.

As we have heard, the Bill has already been approved by the House of Lords with minimal debate, but unless the House of Commons approves it the Europe for Citizens programme, for example, will simply fall. The UK will have to block that programme in the Council of Ministers and it will not be able to go ahead. To put it simply, voting against the measure means that Parliament is telling the Government to veto this element of EU spending. It is a welcome development for Parliament to be able to scrutinise such spending in such detail. I was pleased to hear that the Minister has done some of his homework and he has done very well at getting up to speed on the matter.

As a number of Members have mentioned, the Bill will also approve a pretty uncontroversial proposal, which is also subject to section 8 of the 2011 Act, that will require most European bodies to deposit their historical archives with the European university institute in Florence. I have a “Boring but important” box in which to file things in my office and also a “I don’t give a toss” box; this measure would certainly be flung into the latter. There is no reason to talk or get excited about that measure.

There is good reason, however, to talk about the Europe for Citizens measure. I first came across the measure during my work not as a member of the European Scrutiny Committee of this Parliament but as a Member of the European Parliament for the East Midlands, which I was for 10 years, when I sat on both the Committee on Budgets and the Committee on Budgetary Control. When, as a Member of the European Scrutiny Committee of this Parliament, I saw that the Government were proposing to support a draft EU regulation re-establishing the Europe for Citizens programme for the period from 2014 to 2020 it caused me to raise an eyebrow. I have many concerns about the programme—I have harboured them for a long time—and I want the Government to alter their position so that the UK and other EU countries are not saddled with funding what is likely to be wasteful pro-European propaganda, political in its very nature.

Ages ago, when I was a Member of the European Parliament, I asked questions of the European Commission about what organisations would get funding from the programme. I will talk about some of them, but let me say first that we are not talking about one or two organisations. I have in my hand a list of all the organisations that received funding from that budget—I will not read it out, as it has seven or eight pages of closely typed words. The copy I have brought with me is just for 2007.

I was concerned then about the level of transparency with which those organisations spent their money, with the European Commission’s evaluation of that programme and with how the moneys were spent. I am pleased to hear that the European Commission has decided at least to say that it has decided to up its game in evaluating the programme. Will the Minister tell us whether that is an admission by the European Commission of its failure to do things properly in the course of the previous programme? Lots of money was wasted on a number of projects, some of which I will detail later.

I would like to hear confirmation from the Minister of whether any official or Minister of a UK Government—either this Government or the previous Government—has raised any concerns about how money is prioritised and spent in the Europe for Citizens programme. I doubt that has ever happened.

The preamble to the draft regulations introduces the Europe for Citizens programme with the following words:

“While there is objectively an added value in being a Union citizen with established rights, the Union does not always highlight in an effective way the link between the solution to a broad range of economic and social problems and the Union’s policies.”

If one was Greek, one would probably say that those policies were the cause of the problem, not the solution. The preamble continues:

“Hence, the impressive achievements in terms of peace and stability in Europe, long-term sustainable growth”—

interesting—

“stable prices, an efficient protection of consumers and the environment and the promotion of fundamental rights, have not always led to a…feeling among citizens of belonging to the Union.”

[Kelvin Hopkins (Luton North) (Lab)]

I apologise for arriving late to the debate. The hon. Gentleman talks about stable prices, but prices have started to fall in Greece and deflation is a much more serious concern for anybody who understands economics than inflation. Greece faces a serious problem and prices are hardly stable.

[Chris Heaton-Harris]

I understand the statistics that the hon. Gentleman has just relayed. That just goes to prove that what the European Commission believes to be happening and what is happening are two completely different things. Indeed, the Commission is quite Orwellian in its interpretation of what goes on around it.

[Richard Drax]

Surely the evidence that it is not working is there for all to see. My hon. Friend the Member for Stone (Mr Cash) is an expert on such matters, as the Minister recognised, so why are the Government not listening to the experts and looking to act on the evidence?

[Chris Heaton-Harris]

Fortunately, that is one for the Minister to answer. There are plenty of experts on both sides of this very political argument and one point that I shall continue to make during my speech is that this is a very political matter that should therefore not be funded by taxpayers’ money.

It is interesting to see that the European Commission recognises some of the issues it faces. The preamble continues:

“In order to bring Europe closer to its citizens and to enable them to participate fully in the construction of an ever closer Union, a variety of actions and coordinated efforts through transnational and Union level activities are required.”

In other words, the solution to some of the issues we face today is not less Europe but, according to the European Commission, more Europe, and to ensure that people think that way the Commission will pay for a bunch of projects to try to tell them that that is the case.

Article 1 of the draft regulation states that the general objectives of the programme are

“to contribute to citizens’ understanding of the Union, its history and diversity”

and

“to foster European citizenship and to improve conditions for civic and democratic participation at Union level.”

I am pretty sure that that is a reference to the European elections, which is slightly concerning. That, together with the preamble, suggests that the programme is aimed at lauding the European Union as a political project with, as I will demonstrate, many a federalist overtone. That is reinforced by the fact that article 6 of the proposal states that the programme is open to

“stakeholders promoting European citizenship and integration”.

In other words, one can apply for money from the programme only if one believes in one side of the political argument.

I heard what the Minister said about the collaboration element of the project. Like everyone else in the House, I support any attempt realistically to encourage the commemoration and remembrance of important events in the history of Europe, volunteering, or participation in the democratic process, where there is genuine enthusiasm for it, but I am greatly concerned about trying to force one particular political viewpoint down peoples’ throats.

[Mr Cash]

Does my hon. Friend agree that the idea that the Bruges Group, or the European Foundation, of which I have long been the chairman, could, if we wanted to—I do not think that we would want to—successfully apply for any of this financial support is simply pie in the sky?

[Chris Heaton-Harris]

I am sure that my right hon. Friend—is he right hon. yet?

[Mr Cash]

No.

[Chris Heaton-Harris]

My soon-to-be right hon. Friend’s organisation could benefit from funding, if it changed its basic principle on belief in the European project, but he is a very principled gentleman and would not do that, so no is the simple answer; there would be no access to EU funding for those groups.

I am supportive of trying to encourage the things I mentioned, but I do not believe that that is best achieved by a European Union spending programme that has its decision making centralised in the European Commission, and in which everything is tied to a supportive view of European Union political integration. The draft regulation’s preamble even asserts that there is a link between remembrance and European identity; I struggle to see that link.

The Government’s support for the regulation calls a number of points into question. It sits uneasily—does it not?—with the Prime Minister’s speech on Europe on 23 January last year, which made it clear that Britain has no desire for ever closer union with other EU countries in any political sense. The Prime Minister also said:

“There is not, in my view, a single European demos.

It is national parliaments”—

not EU institutions—

“which are, and…remain, the true source of real democratic legitimacy and accountability in the EU.”

The regulation, which we might be asked to vote for, would establish a political programme, which we would fund, with exactly the opposite ethos. How can that be?

Moreover, the regulation states that the programme would have a budget of €185.5 million, which, according to the Google currency converter last night, is about £156.5 million over the multi-annual financial framework period. The Government have estimated that the UK will meet about 11.5% of the cost of the multi-annual financial framework, after the rebate is applied. That means that the UK may end up paying roughly £18 million for the programme, over its course. The shadow Minister said that we expect to receive about £7 million back. That is not a bad return on European money—normally, we pay in a fiver and get £2 back—but the money comes back to us with caveats on how it should be spent, and who it should be spent on. I understand the Minister’s point about the general budget envelope, but there are better ways that we could spend the money; we could spend it on much more worthy projects in the UK, without the involvement of a middleman with sticky fingers in Brussels.

The House might be interested to know how much money was spent on the previous Europe for Citizens programme, which ran from 2007 to 2013. Most of this information comes from budget questions relating to 2013, because it is best to have the most up-to-date information, and from a compendium of summaries of reports submitted last year under strand 1 of the programme, produced by the European Commission agency responsible for selecting projects, the Education, Audiovisual and Culture Executive Agency. As I mentioned, I have followed this issue for quite some time.

Let us start with a nice, friendly organisation, the Transeuropa citizens festival, an annual festival that, in 2013, took place in October in various cities simultaneously. Page 4 of the Commission’s compendium says that it took place in nine cities, but the festival’s website claims that it took place in 13: London, Paris, Berlin, Barcelona, Amsterdam, Bologna, Prague, Bratislava, Belgrade, Warsaw, Lublin, Sofia, and Cluj-Napoca in Romania. The compendium’s summary says:

“Transeuropa Citizens Festival is an annual festival of citizenship happening across Europe. For the European Year of Citizens it will take place in 9 cities simultaneously in October 2013 and will celebrate free movement. The festival promotes active citizenship: it is made by and for citizens from throughout Europe (particularly central and eastern Europe). About 300 active citizens”—

I have no idea what they are—

“will meet and work together to make events which promote their vision of Europe to a wider public”,

so it is an interesting festival.

[Richard Drax]

My hon. Friend is making an excellent speech, and I am most grateful to him for giving way a second time. If this nightmare continues, can he foresee a time—say, in 10 or 20 years—when countries that do not participate in these awful affairs will be fined for not doing so?

[Chris Heaton-Harris]

The few times in my political career when I have not relied exactly on facts, I have always stumbled and fallen over, so I will keep to what has happened and is happening, rather than having a guess at what might happen in future.

The 300 individuals, and the people they then talk to, will

“act as European Citizens of the future and peer-leaders. The festival will focus on the issues of precarity, poverty and solidarity in a Europe facing the financial crisis, as well as themes of common goods, media pluralism, migrants and Roma rights and the fundamental rights given by Europe.”

Obviously, to be involved in this scheme, one has to approve wholeheartedly of the application of the EU charter of fundamental rights by the European Court of Justice. Those interested in Roma migration should note that the festival was held in London, as well as many other European cities, to promote that sort of thing.

Last year, the festival was awarded €149,000 from the Europe for Citizens budget. It appears that the 2011 festival was awarded €150,000. In 2010, European Alternatives Ltd was awarded €40,000 for a project called “Transeuropa citizens”. In 2009, the same company was awarded €36,300 for a project called “active and transnational citizens in dialogue”. In 2008, the company was awarded €24,800 for a project called the “active and transnational citizenship programme”. I wonder what all these programmes did, or do; from the preamble, one can probably guess exactly what they did.

In addition, European Alternatives Ltd has been awarded grants to fund its existence, which the Commission said it would cut out; no longer could organisations bid for money simply to run themselves, so that they could bid for more European money to run projects for the Commission, so that they could bid for more money from the Commission, so that they could run more projects for the Commission. That was not the case here. In 2012, 2011 and 2010, it was awarded a €100,000 annual operating grant. In 2009, it did a bit worse: it got only €60,000. This one organisation was awarded, all in all, approximately €760,000 from one section of the Europe for Citizens programme budget over the period from 2007 to 2013. Bear that figure in mind when I come on to the sort of grants that have been issued to projects in the United Kingdom.

Let us look at another example of an organisation that has received money from the Europe for Citizens programme. The grants were intended to support the running of the organisation itself, so I am pretty sure that it would not exist were it not for this funding. It is the French think-tank called—perhaps Members will be able to work out why it has been awarded funding—Notre Europe, the Jacques Delors Institute. It was set up by Jacques Delors in 1996 after he stepped down as European Commission President. It aims to contribute to the debate on the future of Europe and to influence decision makers. We are paying for an organisation to try to influence decision makers in a highly political way on the future of Europe and other European integration matters.

[Kelvin Hopkins]

I strongly sympathise with what the hon. Gentleman is saying, but he keeps referring to Europe, as so many people do, when he really means the European Union. They are two different concepts.

[Chris Bryant (Rhondda) (Lab)]

He should have learnt that by now.

[Chris Heaton-Harris]

The hon. Member for Rhondda (Chris Bryant) is quite right. I will try to remember to say “European Union”, but if I slip up and say “Europe” by mistake, please add “ean Union” for me.

Notre Europe’s handy charter states:

‘When reflecting on its mission, Notre Europe continues to take its cue from its founding president, Jacques Delors. Besides the masterstrokes the Single European Act and the Maastricht Treaty represent, and their two great attending projects, namely the single market and the economic and monetary Union, European integration owes him one of the most dynamic and inspired periods of its history. A virtuoso in the art of working the Community method and its famous “institutional triangle”, he can rightly join the ranks of Europe’s founding fathers. It is his vision, which Notre Europe aims to grow and perpetuate.’

Let us examine what Notre Europe does and its principles:

“The end goal of European integration, for Notre Europe, is the creation of a political community, beyond market and economic trading. What brings the Europeans together within the Union is therefore, beyond lifestyles, a set of founding political values. The which—freedom, democracy, rule of law, human rights—are enshrined in the treaties and itemised in the Charter of Fundamental Rights in a corpus of human rights which are at the core of integration. These values are not merely declaratory: the European Court of Justice is their ultimate guarantor”.

That last bit is the problem.

[Mr Cash]

In the light of that last point, does my hon. Friend recall that the European Court of Justice has effectively stated that the provisions in the treaty that introduced the Lisbon treaty, which were meant to exempt the charter of fundamental rights, apply in the United Kingdom and that therefore the objectives he has just described would promote the striking down of UK Acts of Parliament?

[Chris Heaton-Harris]

I absolutely agree. It is the guarantor bit that causes the real problem in this matter.

Notre Europe also calls for

“substantial improvement to the coordination of economic policies”

as part of building a European “social market economy”. Notre Europe

“insists on the pressing necessity for the Union to become a global and influential actor... It must, in due course have summoned up a defence policy and the joint forces to go with it.”

The charter also states:

“Though healthy emulation may be conceivable, nay desirable, competition between nations is the harbinger of all sorts of conflicts and the very negation of all concepts of political community, not to mention being a brake on the coherence and might of a large integrated economic block. Some types of fiscal and social competition are destructive and must be resisted.”

In other words, the European Union should set tax rates and social and employment law.

Notre Europe, which is funded from the Europe for Citizens budget line, also believes that

“there are domains where Union action is of the essence and where it will have to be increased. The issue of mobility”—

currently a pertinent subject in the UK—

“comes in that scope: a European labour market is needed for those who go from one country to the next, including common rules and protections. Member States must further come to an agreement on a minimum package of social rights to be observed everywhere and at all times.”

Notre Europe also

“champions Jacques Delors’ groundbreaking vision of a Federation of Nation-States.”

It is notable that that phrase was later propounded by the current Commission President, Mr Barroso, in his state of the Union address in 2012.

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

Does not that episode underline the point of our signing a letter to the Prime Minister at the weekend, because it is not the lack of a power of veto that seems to matter in this case, but the reluctance to exercise a veto even when we have one?

[Chris Heaton-Harris]

The latter part of my hon. Friend’s intervention is exactly right. We have a veto on the matter, so it is up to Parliament to choose whether it wants to exercise it. That is the point of this debate.

Finally—this bit I find particularly galling—Notre Europe’s charter states:

‘The 21st century EU must also have at its command a budget in keeping with its ambitions. It will not be possible… to settle for a ceiling at 1.27% of Member States’ gross national product without abandoning stated goals. It must establish new own resources levied through genuine European taxation, proof perfect of European solidarity beyond the States’ calculations in terms of “return” on their contribution, calculations the philosophical, political and economic basis of which Notre Europe disputes.’

In other words, the funding that Notre Europe receives from that budget line goes to try to get a European tax to fund even more Europe.

Mr Deputy Speaker, I am sure that you, as Chairman of Ways and Means, will be pleased to know that we were fairly generous in 2013, because Notre Europe was awarded €435,500 from the Europe for Citizens budget line. It was awarded €500,000 in 2012, €550,000 in 2011 and €605,000 in 2010. That means that under the last Europe for Citizens programme that organisation was awarded a total of almost €2.1 million.

It also turns out that Notre Europe has been awarded grants for particular projects under the last Europe for Citizens programme—the European Commission likes not only to fund an organisation, but to give it things to do. In 2009 it received €46,400 for a project called “Think Global—Act European”. In 2011 it received €102,500 for a project of the same name. A cursory examination of the European Union’s budgets online shows that that programme received about €2.24 million.

The right hon. Member for Ross, Skye and Lochaber (Mr Kennedy), who has just left the Chamber, would have been pleased to hear my next point. Also benefiting handsomely under the previous Europe for Citizens programme is our old friend the European Movement. Hon. Members might have noticed that we all receive a regular e-mail commenting on British and European political matters from the UK chapter of the European Movement. It claims that it raises its own moneys and that its objective is to

“contribute to the establishment of a united, federal Europe”,

which is a fairly political objective.

Seemingly, however, the European Movement does receive EU moneys. The grants that I am about to list were all given to help the running of European Movement International, which is based in Brussels, rather than for any one specific project. The European Movement received €432,500 in 2013, €430,000 in 2012, and €430,000 in 2010. A little more delving shows that in 2007 it was also awarded €56,360 for a project that is not identified on the relevant list of selected projects but it still got the money. The total receipts for this organisation under the previous programme, the latest version of which the Government want us to recommend to go through, were almost €1.78 million—the best part of £1.5 million.

My final example of egregious spending under the Europe for Citizens programme is the money doled out to the Union of European Federalists. As its name suggests, this organisation is “dedicated to the promotion” of a “federal Europe”. Over the course of the previous programme, the UEF was awarded grants totalling €671,000 to support its existence—again, not to support projects that it runs. It received €121,000 in 2013, €110,000 in 2012, €110,000 in 2011, €110,000 in 2010, €110,000 in 2009, and €110,000 in 2008. It was also awarded grants for particular projects. In 2010—this money was given to the Belgian member organisation of the UEF, the Union of European Federalists Belgium, which is based somewhere in the same location—it was awarded €15,214 for a project called “European issues and citizenship”. We can see a theme running through many of the sums that are given. In 2007, it too received money—€27,670—for an unspecified project. The UEF got so much money during the course of the previous programme that it raised €714,000.

[Mr Cash]

This money is paid by way of grant, out of taxpayers’ money, direct to these organisations. Does my hon. Friend accept that these organisations, including many Eurosceptic organisations, can receive money only out of donations after the tax has been paid on them? The taxpayer is funding all this.

[Chris Heaton-Harris]

Absolutely. In fact, the United Kingdom taxpayer is funding all this. That is why I am worried about allowing this measure to progress much further without having the opportunity to amend it to strike out the Europe for Citizens programme completely. As I said, we have the ability, as a Parliament, to do exactly that.

I have written to the Minister regarding my concerns about these moneys being spent in this fashion. At the end of last week I received a reply that is a close-to-desperate attempt to justify such spending, in which he said:

“In negotiating the regulation my officials ensured that the overall bill was cut from €229m in the Commission’s proposal to €185m, as part of the PM’s historic cut to the European budget.”

I am very pleased about that. He continued:

“The programme would cost the UK around €2-3m annually, and we will of course get some of that back in funding to projects in the UK. A recent example is a project called ‘History Speaks’ at the Holocaust Centre in Newark.”

I thought I would have a look at that project because it sounds like a really worthy project that I would want money to be spent on, and it absolutely is—it is fantastic. However, since the financial crash the Holocaust Centre in Newark, like every other organisation that does good work, has struggled financially. In 2007, this memorial and educational trust, founded 14 years ago by non-Jewish brothers Stephen and James Smith, needed to slash its annual budget from £800,000 to £500,000, and its activities such as professional training to spread the word about what the holocaust meant had to be axed so that it could focus its resources on educating the young. The centre deals with over 22,000 primary and secondary school pupils who visit it each year.

If we were really serious about this, we could ask the European Commission to rebalance the Europe for Citizens programme in negotiations. I understand that it is a complex package; indeed, I have been in trialogues between the Commission, the Parliament and the Council where such a complex package has been rebalanced before. Then we could talk about funding worthwhile commemorative projects such as the Holocaust Centre in Newark above and beyond anything we give to political organisations that should be raising their own money and not suckling on the teat of the taxpayer. Surely our Government are also capable of funding worthy remembrance and town-twinning projects. As the whole House will know, town-twinning projects do not just involve European Union countries; UK towns and cities are twinned with towns and cities across the world. EU funding is not needed for this, and so we do not need the associated EU federalist propaganda that goes with it, which, as I have proved, is a significant part of the programme.

The UK wields a veto over this draft regulation. I realise that the Government are planning to submit their support for the proposal to the approval of the House of Commons under the terms of the European Union Act 2011; the Minister has confirmed as much. However, I would be delighted if they went back to the Council and insisted on a radical rethink of the matter so that British taxpayers do not end up paying for schemes aimed at furthering a political project with which most of them disagree.

It was fairly obvious that the shadow Minister did not know what was included within these programmes. Nevertheless, as the Labour leadership is trying to engage more sensibly with the British people on European matters and has given a commitment to European Union budgetary restraint, I would like Labour Members to see this as a matter where they could help the Government to take the right course and have UK taxpayers’ money spent in a better way.

The Minister will be relieved to know that I do not intend to push for a vote on Second Reading, although others might do so. However, I will seek at a later stage to remove clause 1(2)(b), which approves the Europe for Citizens programme for the period 2014 to 2020. The Government’s programme motion provides that the Bill’s next stage will be taken in Committee of the whole House, and I look forward to that debate.

18:37

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

It is a particular pleasure to follow my hon. Friend the Member for Daventry (Chris Heaton-Harris) because he has gone through so much of the rather painful detail of what this money goes towards. I congratulate my hon. Friend the Minister on putting his case as he did. I could not quite decide whether he was modelling himself on Horatius at the bridge or the boy who stood on the burning deck, because I noticed that he was not supported not only by his Secretary of State but by any Secretary of State. He had the occasional support of the Lord Privy Seal, and I am glad that he now has the support of the Minister for Europe, but I think he should feel rather let down by Ministers who have not turned out in greater numbers to rally to this particularly disagreeable cause.

I will mention in passing the first part of the Bill, on archives and the value—or the vanity—of archives. When I was doing my A-levels, I was told that if ever we ran out of something to say when discussing 16th-century history, we should always refer to a report sent by the Venetian ambassador. That is because the archives in Venice were so great—so large and comprehensive—that nobody ever went through them all, and therefore if we attributed a view to the Venetian ambassador nobody could tell us that we were wrong. In the same way, if we were to visit the Escorial we would find that some of the documents of Philip II of Spain still have on them the sand used to blot the ink, because nobody has looked at them in the many hundreds of years that have passed. I have a feeling that the institute in Florence—this wonderful, glorious, illustrious European institute that is going to educate us so much about the virtues and kindness of the European Union—will find that the sand remains on these documents until scholars yet unborn finally get round to sweeping it off.

I want to deal most particularly with the idea of “Europe for Citizens”. Let me start by saying that I object to the idea that I am a citizen of Europe in the first place. I do not believe that it is, was or ever could be legitimate to foist a citizenship on people who have not asked for it or were not born into it. To say in about 1990, as the Maastricht treaty came through, that those of us who were proud to be subjects of Her Majesty were suddenly also citizens of some foreign multinational organisation seems to me an affront. Therefore, I deny— I repudiate—my citizenship of this body.

[Chris Bryant]

What about the Catholic Church?

[Jacob Rees-Mogg]

The hon. Gentleman says from a sedentary position, “What about the Catholic Church?”

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I do not think we are going to go down that route. We are going to stick with what is before us.

[Jacob Rees-Mogg]

I will just say, briefly, that a previous Leader of the House stood godparent for me when I was baptised into the Catholic Church, so I think I consented through him.

I will turn to the text of the document, because we need to look at the detail of what the Government are signing us up to. My hon. Friend the Member for Daventry has mentioned paragraph 3 of the “Europe for Citizens” document, but I should like to construe it in some detail. It says:

“While there is objectively an added value in being a Union citizen with established rights, the Union does not always highlight in an effective way the link between the solution to a broad range of economic and social problems and the Union’s policies.”

But that is not true. The very fourth word of that paragraph is a falsehood. Objectively, there is no added value in being a European citizen—that is a subjective view of being a European citizen. The document is a dishonest document and we are only on the third paragraph.

The paragraph continues:

“Hence, the impressive achievements in terms of peace and stability in Europe”.

It occurs to me that the achievements in terms of peace may have had something to do with the North Atlantic Treaty Organisation and the willingness of the United States of America to spend billions of dollars on putting a defensive shield around western Europe to protect us from the USSR, the evil empire. This is a document of ipsedixitrists: people who believe that, because they say it themselves, it must be true, but, by and large, it is not true.

The paragraph goes on to tell the great joke—I doubt you ever thought, Mr Deputy Speaker, there would be such humour in a European Union document—about long-term stable growth. Tell that to the Greeks, the Italians, the Cypriots, the Spanish, the Portuguese and the Irish. Are there any other offers from hon. Members? [Hon. Members: “The French!”] The French and Monsieur Hollande would like to hear about the stable growth provided by their kind brethren in the European Union.

The paragraph goes on to tell us about the “promotion of fundamental rights”. How splendid that is. I am all in favour of fundamental rights—we have had them in this country for quite a long time—but what is the one fundamental right that the European Union disapproves of? Why, it is democracy of course. They do not like that a bit, because we might vote against them. I am sorry to say that even our own Foreign Secretary does not much like democracy any more, because he thinks this Parliament may have the discourtesy to vote against rules and regulations and instructions sent down from on high by the European Union.

The paragraph notes that the situation has, sadly,

“not always led to a strong feeling among citizens of belonging to the Union.”

My infant children blow raspberries sometimes. In this House of Commons it may not be appropriate to blow a raspberry literally, but let me metaphorically blow a raspberry at the idea of having a strong feeling about belonging to the Union.

I will come back to the next page later, because it ties in with a comment made by the Prime Minister that, importantly, needs to be examined. The sixth paragraph looks at the

“interim evaluation report of the Europe for Citizens programme”,

which says that the last programme was a great success and worked very well. The European Commission has produced a report to say that what it has just done was enormously successful. That strikes me as, to coin a phrase, marking one’s own homework.

I will move on, if I may, to paragraph 7. Where are they going to do all this wonderful stuff? They are going to do it

“in the areas of education, vocational training and youth, sport, culture and the audiovisual sector, fundamental rights and freedoms, social inclusion, gender equality, combating discrimination, research and innovation, information society, enlargement and the external action of the Union.”

Not all of those are, in fact, competences of the European Union, so in this article 352 extension to the powers of the EU we see an attempt to push those powers even further by spending money in areas that are not actually competences of the EU. The Government are agreeing—in breach of the coalition agreement—to an extension of the power and competence of the European Union.

I quite like paragraph 8, because it wants to promote reflection on defining moments in European history. If we do have to have this Bill, I hope it will get through by 2015, because there are four defining moments in European history that I am looking forward to celebrating in 2015. It will, of course, be the 800th anniversary of Magna Carta; the 750th anniversary of the meeting of the House of Commons with Members from boroughs; the 600th anniversary of Agincourt; and the 200th anniversary of Waterloo. We can have a jolly time in 2015 celebrating the defining moments in European history, which I am glad to say mainly involve the success of the English and, more latterly, the British.

[Richard Drax]

Given that my hon. Friend is giving such an excellent speech and talking about anniversaries, I would be failing in my duty if I did not point out that it is his wedding anniversary today and that his other half is not too far away.

[Jacob Rees-Mogg]

My hon. Friend is spot on. He has discovered the secret of the Rees-Mogg household: we celebrate our anniversary by speaking about the European Union. I have a feeling that that is probably true of Members on both sides of the House. Could there be a nicer way to spend one’s seventh anniversary?

Reflecting on the history of Europe is important, because we as Britons can take some pride in the fact that we have on four occasions—arguably five—destroyed an attempt to have a single European superstate: Louis XIV was unquestionably one, followed by Bonaparte, the Kaiser and Hitler. It may be that the fifth attempt to create—

[Mr Deputy Speaker]

Order. I do like the hon. Gentleman’s history lessons, but I am bothered because this is the Second Reading debate on a Bill that is quite tight and narrow. As much as the hon. Gentleman’s history may add up, I know that he wants to actually concentrate on the Bill before us.

[Jacob Rees-Mogg]

I am actually referring to the eighth paragraph of the document we are being asked to approve, which wishes us to define defining moments of history.

[Mr Deputy Speaker]

Order. I think I might be able to help. As much as I welcome the history lesson, it is the length of the history lesson that I do not quite need. I am sure the hon. Gentleman wishes to shorten it.

[Jacob Rees-Mogg]

I apologise, Mr Deputy Speaker. I was taking the Secretary of State for Education too literally with regard to the thought that a chronological history should be taught in all aspects of life.

We should be proud of our influence on European history. The document goes on to say that it wants to remember the existence of European identity. I am not too sure what European identity it is talking about. I think we have an identity as people belonging to the individual nations that make up the European Union, not as people belonging to a supranational state.

We must not forget that this is a European document and no European document would be complete without at least one sentence—probably many more—of complete gobbledegook, so I shall quote one. It may be that a cleverer hon. Member present will be able to translate it. It states:

“A horizontal dimension of the Programme should ensure the valorisation and transferability of results for enhanced impact and long-term sustainability.”

Ain’t that just fine and dandy?

I want to—[Interruption.] I am scattering my papers—this is how European documents should be treated: tossed in pieces around and about—but I want to address a point that has already been raised. The nub of this is that 60% of the money spent will be spent on giving preference to initiatives and projects with a link to the political agenda of the European Union. This is all about promoting what it thinks of as being the advantage of the EU. It is about advancing the superstate and using British taxpayers’ money to do so.

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

To give my hon. Friend a moment to relocate his script, may I ask him whether we are perhaps in danger of being unfair to the Government? Could not the reason our Government are so keen to suggest that we sign up to this nonsense, garbage and propaganda be that they want to impress on the House and the British people how important it is to have an in/out referendum on our membership of the European Union?

[Jacob Rees-Mogg]

My hon. Friend makes a wonderfully ingenious point. I am not sure that a coalition Government could be quite that clever, though that may be uncharitable.

I want to move on to the real problem about the programme. In not only mine but a succession of speeches this afternoon and early evening, we have established that it is about propaganda for the European Union, but why have Her Majesty’s Government brought it before the House in a Bill when they have a veto? That question takes us to the heart of the matter—it is about trust. We are told by the Government very regularly, or at least by the Conservative part of the Government, that they are Eurosceptics and do not want to see further integration, but believe we should restore powers to the United Kingdom. Then, when they have the chance to veto something, what do they do? They bring it forward with further expenditure and adopt, or wish to adopt, a European regulation, irrespective of their previous propaganda. It seems to me that people will notice the disjunction between what is said and what is done.

Like my hon. Friend the Member for Daventry, I want to quote the Prime Minister, who said about a year ago:

“Let me make a further heretical proposition. The European Treaty commits the Member States to ‘lay the foundations of an ever closer union among the peoples of Europe’. This has been consistently interpreted as applying not to the peoples but rather to the states and institutions compounded by a European Court of Justice that has consistently supported greater centralisation. We understand and respect the right of others to maintain their commitment to this goal. But for Britain—and perhaps for others—it is not the objective.”

However, paragraph 4 of the document we are asked to approve this afternoon mentions bringing

“Europe closer to its citizens and to enable them to participate fully in the construction of an ever closer Union”.

We are therefore being asked to vote on the Second Reading of a Bill that directly contradicts a promise given to the British people by the Prime Minister a year ago.

What will people in the country say when they read in the newspapers that politicians do not stick to their promises, and when they are told by UKIP that the Tories may say they are Eurosceptic, but they are in fact little more than sheep in sheep’s clothing? They will look at us and think that we are playing ducks and drakes with them. We ought to be honest with the British people. We should make sure that our promises, words and actions go together.

When we have the power of veto, the right to stop this further piece of European integration, we should without question exercise it. The Government deserve praise for the fact that under the 2011 Act we at least have a vote, but they should never have allowed the Minister to come to the Dispatch Box with this odious piece of further pro-European integration. It is against what the Conservative party stands for, and as that party forms the majority of the coalition, it ought to be against Government policy.

18:49

[Mr Vaizey]

I am grateful to have the opportunity, with the leave of the House, to respond to the debate, which has been wrapped up by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg). There was an element of disloyalty from my acting Parliamentary Private Secretary, my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), who said to me during the debate, “You’d better hope that you don’t follow him.” I think that that was a reference to the rhetorical qualities of my hon. Friend the Member for North East Somerset, who certainly did not disappoint. It is my sad lot to have to follow his excellent and perspicacious speech.

My hon. Friend pointed out that I have been without friends on the Front Bench for most of the debate. It is true that we invited Justice Ministers to wind up the debate, because archives are obviously an important element of their portfolio, but for some reason we found that none was available. It is therefore down to me, with the leave of the House, to wind up the debate.

It is very rare for a Minister to open and close a Second Reading debate—[Interruption.] Apart from two weeks ago, it is a very rare event. [Interruption.] It happens all the time, according to the hon. Member for Rhondda (Chris Bryant). Here I am, however, closing a debate that I opened. Let me begin by asking the hon. Gentleman not to intervene from a sedentary position. Frankly, if he has something to say, he should come to the Dispatch Box and say it. [Interruption.] He is trying it again, but let me move on.

I congratulate the hon. Member for Bishop Auckland (Helen Goodman) on her response to my opening remarks. She raised several points that I want to address. In relation to archives, she asked whether European institutions can deposit their documents written on vellum. That is not part of the regulations that we are debating and approving. It is of course welcome that she takes a traditionalist view of how documents should be written and archived, but it is rather sad that when any spending opportunity presents itself, she seizes the moment.

It is true that the European Central Bank will not deposit its documents in the archive. Its situation is similar to that of the Bank of England, which does not deposit its archives at the National Archives. To be frank, the hon. Lady’s point was more to do with the general issue of whether the European Central Bank is transparent enough, which is nothing to do with today’s debate.

The hon. Lady asked how much money will be spent in the UK. Many hon. Members debated the issue of how much is likely to be spent. Normally, we would expect to see a return on our investment of about 5% to 10%. Any money to support commemorations for world war one, for example, would not be part of the Government’s main programme of commemoration, but to support programmes involving different countries across Europe.

The hon. Lady said that I am not doing well enough on stopping the export of objects that have been legitimately purchased. I remind her that our export ban system has been in place for 60 years. The delay to the Bill was simply to do with finding parliamentary time.

We heard excellent speeches from my hon. Friend the Member for Stone (Mr Cash), my right hon. Friend the Member for Ross, Skye and Lochaber (Mr Kennedy), and my hon. Friends the Members for Stroud (Neil Carmichael), for Daventry (Chris Heaton-Harris) and, of course, for North East Somerset.

I must say that my hon. Friend the Member for Stone made a fantastic contribution. It was generous to me, and it showed off his remarkable knowledge of the subject from his 30 years of looking at European issues.

My right hon. Friend the Member for Ross, Skye and Lochaber described the Bill as “gentle”, “timorous” and “meek, mild and inoffensive”. I think he was making a plea to hon. Members not to be cruel to the Bill, but to shepherd it through with the utmost care and attention. He mentioned that the funds in one of the regulations supported the European Movement, of which he is the UK president and which, of course, was started by Sir Winston Churchill.

My hon. Friend the Member for Stroud made a very good point when he reminded us that this debate was happening because of the Conservative party and the Bill we passed, in the teeth of opposition from Labour, to give the House the opportunity to scrutinise European legislation. It is shocking, when we see the House filled up with people ready to scrutinise European legislation, that Labour still refuses to give the British people a say on their membership of Europe. It is only by voting Conservative that the British people will get a say, in a referendum, on whether we should remain a member of the EU.

My hon. Friend the Member for Daventry welcomed the scrutiny, but asked for a rebalancing of the project. He is the chairman of the Royal and Derngate theatre, and it is welcome to see him in that position. We will always find examples, as he did, of funded projects with which we disagree, but I know, as someone responsible for funding the Arts Council—I do not want to start another debate—and looking at the distribution of lottery funds, that we will always find funded projects with which we disagree and many projects we think should be funded that are not. That is in the nature of it. The process for getting funding will involve an open application system, and we should encourage people to make applications, should the House support the regulation, as there is no reason, in principle, why they should not receive funding.

This has been a lively, enjoyable and informative debate. It remains for me to conclude on the most important issue, which is of course the wedding anniversary of the hon. Member for North East Somerset. It falls on St Canute’s day. It is said in Scandinavia that good St Thomas brought Christmas and the evil Canute took it away. The death of Canute started a minor European civil war, and it is important to remember that this fund will commemorate some horrific events in Europe that are worth commemorating—the totalitarian nature of Stalinism and Nazism and the holocaust, as well as the carnage of the great war.

But I am running out of things to say. I will not refer to the Venetian ambassador. I simply commend the Bill to the House.

Question put, That the Bill be now read a Second time.

19:01

Division 174

Ayes: 366

---

Conservative: 207
Labour: 109
Liberal Democrat: 43
Independent: 3
Scottish National Party: 2
Social Democratic & Labour Party: 1

Noes: 30

---

Conservative: 22
Labour: 8

European Union (Approvals) Bill [Lords] (Programme)

Motion made, and Question put forthwith, (Standing Order No. 83A(7)),

That the following provisions shall apply to the European Union (Approvals) Bill [Lords]:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on Consideration and Third Reading

(2) Proceedings in Committee, any proceedings on Consideration and proceedings on Third Reading shall be taken in one day in accordance with the following provisions of this Order.

(3) Proceedings in Committee and any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

Programming committee

(5) Standing Order No. 83B (Programming committees) shall not apply to the proceedings on the Bill in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.

Other proceedings

(6) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Mark Lancaster.)

Question agreed to.

Backbench Business

Monday 13th January 2014 Commons Chamber

Welfare Reforms and Poverty

Monday 13th January 2014 Commons Chamber

19:14

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

I beg to move,

That this House believes that a commission of inquiry should be established to investigate the impact of the Government’s welfare reforms on the incidence of poverty.

I am very grateful to the Backbench Business Committee for giving the House the opportunity to debate this issue, which has been seriously neglected over the past three years. I am pleased to move the motion, which appears in my name and the names of Members from other parties.

It is clear that something terrible is happening across the face of Britain. We are seeing the return of absolute poverty, which has not existed in this country since the Victorian age, more than a century ago. Absolute poverty is when people do not have the money to pay for even their most basic needs. The evidence of that is all around us. There are at least 345 food banks and, according to the Trussell Trust, emergency food aid was given to 350,000 households for at least three days in the last year. The Red Cross is setting up centres to help the destitute, just as it does in developing countries. A study that was published two months ago shows that even in prosperous areas of the country, such as London, more than a quarter of the population is living in poverty. This point is really scary: according to the Joseph Rowntree Foundation, for the first time, the number of people in working families who are living in poverty, at 6.7 million, is greater than the number of people in workless and retired families who are living in poverty, at 6.3 million.

The Department for Work and Pensions published new data two months ago—it was pretty reluctant to do this, and one can see why—showing that the use of sanctions, which means depriving people of all their benefits for several weeks at a time, had increased by 126% since 2010 and, most strikingly of all, that 120 disabled people who had been receiving jobseeker’s allowance had been given a three-year fixed duration sanction in the previous year. Figures from the Department for Communities and Local Government—these are the last that I will quote, although there are many more that I could quote—show that there are now more than 2,000 families who have been placed in emergency bed-and-breakfast accommodation after losing their homes. The 5% rise in the overall homelessness figures last year included nearly 9,000 families with children, which is the equivalent of one family losing their home every 15 minutes.

What impact have the so-called welfare reforms, which would more accurately be described as social security knock-backs, had on the families who have been affected? The best evidence comes from the Northern Housing Consortium, which carried out a survey three months ago of a representative sample of people living in social housing. It found that a third of families spent less than £20 a week on food and that the average spend on food per person per day was precisely £2.10. That is a third less than those families were able to afford three months before that. The proportion of households that had to make debt repayments of more than £40 a week had doubled and the average level of debt was £2,250. That might not sound a lot to us, but to people with that standard of living it is an enormous and daunting sum. A third of families had council tax debt, and households were having to spend 16% more on gas and electricity. Those are deplorable figures of profound impoverishment in an economy that is still the sixth largest in the world.

[Andy Sawford (Corby) (Lab/Co-op)]

I congratulate my right hon. Friend on securing this incredibly important debate. Does he also recognise the impact of 2.7 million people losing out through the Government’s changes to council tax benefit, many of them disabled people, veterans and some of the most vulnerable in our communities?

[Mr Meacher]

I have already made slight reference to that, but my hon. Friend is entirely right. The change is quite small, but its impact can push very poor families into deep poverty.

What are the causes of the emergence of absolute poverty? The biggest cause is the huge rise in sanctioning: depriving someone of all their benefit entitlement for a month in the first instance, for three months in the second instance and, on a third infringement, for three years!

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

Will the right hon. Gentleman give way?

[Mr Meacher]

I will not give way to too many Members, for the simple reason that many want to speak, but I will give way to the hon. Gentleman.

[David T. C. Davies]

I am grateful to the right hon. Gentleman for giving way. Does he not agree that it is vital that those who are not looking for work are made to realise that there will be consequences to those actions, particularly at a time when 1 million people have been able to come into this country from eastern Europe and find work here?

[Mr Meacher]

Those who come to this country are more likely to be employed and take out less in benefits than many of the indigenous population. The real point is that these people want work. Of course the hon. Gentleman is right that people should get work if they can, but there are 2.5 million people who have been unemployed for the best part of two years, and there are 562,000 vacancies—I checked that figure today. So four out of five of those who are unemployed simply cannot get a job whatever they do.

[Hugh Bayley (York Central) (Lab)]

The hon. Member for Monmouth (David T. C. Davies) does not seem to realise that many of the people who claim benefits, including jobseeker’s allowance, are people who work. I have a constituent on a very low income. He delivers newspapers to my constituency office. He has dyslexia, but he works because he wants the pride of keeping himself. He still needs to claim JSA, but he lost his allowance because his dyslexia meant that in one fortnightly period he applied for nine jobs, not 10. Can that possibly be right, when this man is already working and trying to pay his way?

[Mr Meacher]

My hon. Friend is entirely right. I have already made the point that the greatest number of people in poverty are actually in working families. That is a real indictment of economic and social policy.

The sanctions are very harsh. I accept that there must be some sanctions, but the scale is out of all proportion and remarkably harsh. They are often applied for trivial reasons, such as turning up five minutes late for a job interview or a Work programme. Of course, people should not turn up five minutes late, but to deny them benefits for a whole month for that reason is totally disproportionate. There are other examples from my own experience in my surgery or from Citizens Advice interviews. I will quote, very quickly, just a few of them:

“The jobcentre didn’t record that I had informed them that I was in hospital when I was due to attend an appointment and I was sanctioned.”

“I went to a job interview instead of signing on at the jobcentre because the appointments clashed.”

Presumably, that was the right thing to do, but he was still sanctioned.

“I had to look after my mum who was severely disabled and very ill, but I was still sanctioned.”

“I didn’t know about the interview because they sent the letter to my previous address. I’d told them my new address but I was still sanctioned.”

“I was refused a job because I was in a women’s refuge, fleeing domestic violence and in the process of relocating, but I was still sanctioned.”

This is a classic:

“I didn’t do enough to find work in between finding work and starting the job.”

The latest DWP figures are from two months ago—it would be handy if we had more up-to-date figures—and show no fewer than 580,000 persons sanctioned in the eight months to June last year. If the same rate has continued since then—it has probably increased—that means that more than 1 million have been sanctioned in the past 15 months and deprived of all benefit and all income. Given that the penalties are out of all proportion to the triviality of many of the infringements, and given that, as I have said, four out of five people cannot get a job whatever they do, the use of sanctioning on this scale, with the result of utter destitution, is—one struggles for words—brutalising and profoundly unjust.

There are other reasons for this deeply worrying rise in absolute poverty. One is the delays in benefit payments, which have increased substantially—the delays, not the benefit payments, unfortunately. Another reason is the impossibility for many poor and vulnerable people to comply with the new rules, even though they want to, that are being imposed. I will quote just one case from my surgery a few weeks ago. He is a disabled man who had his benefits reduced due to the one-year employment and support allowance rule, so his income is now £71 a week. He has been left in a three-bedroom house because his mother and other people looking after him have died and so has to pay £23 in bedroom tax, plus £6 a week—this is the point that my hon. Friend the Member for Corby (Andy Sawford) was making—in council tax due to the new council tax rules, leaving him with £42 a week. He asked to downsize to a smaller property, which is what the Government would expect him to do, but the local housing association, ironically called First Choice Homes, demanded that he pay two weeks’ full rent upfront, £197, before getting any housing benefit. He cannot do that, of course, and he is stuck in an impossible situation.

Another reason for the rise in absolute poverty is the impact of the bedroom tax, which applies to two thirds of a million households. I think everyone, probably even Government Members, will admit that it is Dickensian in its sheer social divisiveness. The housing benefit cap has now been imposed on a further 33,000 households. Both of those measures have forced tens of thousands of people out of their homes—we need to take into consideration what that means—even though two thirds of those affected by the bedroom tax are disabled. It is reckoned that more than 90% do not have smaller social housing to move into.

Another not insignificant cause of destitution—I will be very brief on this—is mistakes made by the authorities themselves. Last week, one of my constituents who had been sanctioned for a month was suddenly told that his sanction had been extended to a year. It was only intervention with the local DWP office that uncovered that it was actually its mistake. What happens for others who do not have the advantage of such an intervention? It now seems that up to 40,000 working-age tenants in social housing have been improperly subjected to the bedroom tax because of DWP error.

I will cite just one more reason for the unnecessary and cruel imposition of poverty, and I say that advisedly: the way in which tens of thousands of severely disabled persons have been judged by Atos, the French IT company, as fit for work—and therefore forced on to JSA at just £71 a week—when they are patently unfit for work. Very often, their GP has not been consulted to inquire whether there are other factors that need to be taken into account. The Chancellor’s policy of keeping 2.5 million people unemployed makes it impossible for them to find work, even if there were employers who would be willing to take them, and the 40% success rate of appeals shows how unfair the whole process is.

I conclude by asking just one simple question: is all this brutality towards the poor really necessary? Is there any justification in intensifying the misery, as the Chancellor clearly intends, by winding up the social fund and, particularly, by imposing another £25 billion of cuts in the next Parliament, half of that from working-age benefits? The whole objective of the massive cuts programme—to reduce the deficit—is one that I think we would all support. There is no disagreement about that across the House, yet after £80 billion of public spending cuts, with about £23 billion of cuts in this Parliament so far, the deficit has been reduced only at a glacial pace, from £118 billion in 2011 to £115 billion in 2012 and £111 billion in 2013. Frankly, the Chancellor is like one of those first world war generals who urged his men forward, over the top, in order to recover 300 yards of bombed-out ground, but lost 20,000 men in the process. How can it be justified to carry on imposing abject and unnecessary destitution on such a huge scale when the benefits in terms of deficit reduction are so small as to be almost derisory?

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Does my right hon. Friend agree that the Government might save a lot more if they showed the same energy and enthusiasm for getting those who evade their taxes and run to tax havens as they do for going after the poor, the sick and people on the dole?

[Mr Meacher]

I will come to that in just a moment.

People say that to carry on doing the same thing over and over again, but expecting a different result, is the first sign of insanity. The Chancellor is not insane, of course, but he is deeply punitive and sectarian. Frankly, I want to help him. There is another way.

[Stephen Mosley (City of Chester) (Con)]

I have listened to the right hon. Gentleman with great interest. What does he think about the assertion by those on his own Front Bench that they would be tougher on welfare than the Tories?

[Mr Meacher]

The thrust of what those on our Front Bench have said, as the shadow Chancellor has made clear on many occasions, is that we need public investment. We need to get jobs and growth. That is the alternative way: public investment in jobs, industry, infrastructure and exports to grow the real economy, not the financial froth, because that would cut the deficit far faster—that is the key point—than the Chancellor’s beloved austerity.

If the Chancellor is obsessed with fiscal consolidation, as I think he is, how about the ultra-rich—Britain’s 1,000 richest citizens—contributing just a bit? Their current remuneration—I am talking about a fraction of the top 1%—is £86,000 a week, which is 185 times the average wage. They received a windfall of more than £2,000 a week from the 5% cut in the higher rate of income tax, and their wealth was recently estimated by The Sunday Times—not The Guardian, but The Sunday Times—at nearly half a trillion pounds. Let us remember that we are talking about 1,000 people. Their asset gains since the 2009 crash have been calculated by the same source at about £190 billion.

My question, therefore, is: does the Chancellor believe that these persons, loaded with the riches of Midas, might be prevailed upon to contribute a minute fraction of their wealth in an acute national emergency, when one sixth of the work force earns less than the living wage and when 1 million people who cannot get a job are being deprived of all income by sanctioning and thereby being left utterly destitute? This is just a thought: charging the ultra-rich’s asset gains since 2009 to capital gains tax would raise more than the £25 billion that the Chancellor purports to need. I submit that it would introduce some semblance of democracy and social justice in this country if the Chancellor paid attention to this debate and thought deeply about what he is doing to our country and its people.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There will be a 10-minute time limit in this debate.

19:29

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

Members of the shadow Cabinet might need a boxing referee to sort out their disputes at the moment, as we read today in the Daily Mail, but I can assure hon. Members that I believe that the Conservative party is absolutely united in supporting the coalition Government and coalition Ministers in what they are trying to achieve. We do so against the backdrop of one of the most disastrous economic situations that this country has faced outside of a war.

It is worth reminding ourselves just what we were looking at in 2010. We took office with a deficit of £160 billion and a debt that was rising rapidly to £1 trillion. That was after years of overspending in good times, as well as in bad, by Labour, a cheap money supply and lax banking regulation under the former Government. We had disastrous economic decisions, such as that to sell gold at a fraction of its real rate. Worst of all and most seriously—this is what we are dealing with today—we had a welfare system that allowed people to get into a trap of welfare dependency, leaving them on the dole for many years, but at the same time filling the consequent gap in employment by allowing mass and uncontrolled immigration into this country, which completely undercut British workers.

That was the disastrous legacy that this coalition Government faced in 2010. I am proud of the fact that, instead of shirking their responsibilities, Ministers in this coalition Government took difficult economic decisions. Of course we had to make cuts and reduce public spending. It would have been grossly irresponsible not to do so, and in the longer term it would have led to far greater poverty than we face now. The reality is that we are a nation in debt. We are having to borrow about £10 billion every month. We are also having to roll over existing debts that previous Governments left us. If for any reason the international money lending organisations that give us that £10 billion a month ever decided that we were not in a position to pay either the interest or the original sum, they would simply stop lending to us, and there would be no European bank or International Monetary Fund waiting to bail us out with the sums we would need.

We would face an economic catastrophe on a far greater scale than the one we face now, and it would lead to real poverty. Indeed, it could lead to even third-world levels of poverty, because we would simply run out of cash. That is the catastrophe that keeps me awake at night—far more so than the bogus claims about global warming, when we have seen no rise in temperature for 16 years, or than terrorism, which is a much more serious matter but which the security services have thus far been able to contain.

[Hugh Bayley]

Will the hon. Gentleman not acknowledge the truth that the amount spent on welfare by the last Labour Government decreased over time because we were effective in creating more jobs and getting people off welfare and into work? The national debt was some £800 billion when his party came to power, but is it not now well over £1 trillion and rising?

[David T. C. Davies]

Indeed, the hon. Gentleman is quite correct in his last point. He makes an important point, but I would like to find out where it was going. Is he suggesting that we are not doing enough to pay down the national debt? Is he suggesting that we should cut further and faster? If so, and if we had the support of other Opposition Members, that is exactly what the Government could do and, indeed, possibly should do. I look forward to seeing that support for getting the deficit down.

[Hugh Bayley]

The point I am making is simply that the Labour Government reduced the amount that taxpayers had to spend on welfare because we were effective at investing in the economy, creating jobs and thereby getting people off welfare and into work.

[David T.C. Davies]

I do not accept that point, but I do accept that when the last Labour Government came into office in 1997, they spent the first couple of years paying down the national debt, which is exactly what they should have done.

[Hugh Bayley]

It was the first 10 years.

[David T.C. Davies]

No, from 2001 onwards they started overspending by an average of about £30 billion. That is an absolute fact; I have checked the figures on the national debt very carefully. From 2001 onwards, they started overspending by an average of about £30 billion a year. That is a fact. I can tell hon. Members that I have checked the figures on the national debt very carefully. As I say, from about 2001 onwards, the Labour Government decided to start overspending by approximately £30 billion a year, and they were overspending long before the financial crash happened in 2008—a crash that they, incidentally, had helped to cause.

Ministers in the coalition Government are absolute right to make cuts, and if Labour Members feel that the deficit is still too high and that further cuts should be made, I am sure we would all welcome their support. The Government are right to do this for another reason: the welfare system, which we are reforming, traps people in worklessness. Many members of my family— through marriage—are from eastern Europe, and some of them came to this country barely able to speak English and had no qualifications that would be recognised here. They were, however, able to get into work. They started in low-paid jobs and worked their way up.

I spent many years in low-paid jobs, and I am not talking about holiday jobs or a gap year, as I never even went to university. I happened to believe that, rather than wait around for whatever job people think they deserve, they should take any job available to them and use work to get better work. That is the way forward, and that is what the Government are trying to encourage through the use of sanctions and, frankly, through making it difficult for people to sit around watching the television all day. I am not suggesting that that applies to everyone who is out of work or even a majority of them, but it certainly applies to a percentage of people who are out of work. It is high time that it was tackled and stopped. I am glad that some people have the courage to do that.

We hear nothing from Labour Members except a mass of contradictions. They say that they want to be tough on welfare—tougher than the Tories, as the shadow Work and Pensions Secretary said in October 2013—and then to a different audience they complain about every single cut to the welfare budget. They complain that the Government are making cuts and then they complain, as the right hon. Member for Oldham West and Royton (Mr Meacher) did, that the deficit is too high. It is ludicrous. They say that they are against the bedroom tax, but they brought the bedroom tax in, albeit in the private sector. What they say is a mass of contractions, so I cannot understand how anyone could feel that Labour Members were fit to be put in charge of welfare benefits or indeed the economy ever again.

[Stephen Mosley]

Had my hon. Friend attended Work and Pensions questions this morning, he would have heard Labour Members going on about the work capability assessment. Which Government introduced it? It was, of course, the previous Labour Government.

[David T. C. Davies]

My hon. Friend makes a good point. I believe we would all like to see some consistency from the Opposition—both on the economy and on what they are really planning to do to benefits. In the meantime, let me commend both the Liberal Democrat and Conservative Front-Bench teams, who have been prepared to put aside their personal poll ratings—frankly, these are unpopular decisions—and do what is right for this country rather than what is right for winning elections: namely, getting the deficit down and solving the long-term problem of worklessness. That will do far more to tackle poverty than anything we hear from Labour Members tonight.

19:43

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

Ministers—and certainly some Tory Back Benchers, as we have just heard—are in a state of denial about the increasing poverty in this country resulting from Government policies. They want us to believe—the hon. Member for Monmouth (David T. C. Davies) is as good an example as any—that we are dealing with the work-shy and scroungers, with people who have no justification for receiving benefits in the first place. It is to a large extent a repeat of what I witnessed during the Thatcher years. My right hon. Friend the Member for Oldham West and Royton (Mr Meacher), whom I congratulate on initiating this motion, will recall how we repeatedly used to point out what was happening in the country at large under Thatcher—increasing poverty and deprivation. Ministers and Tory Back Benchers back in the 1980s simply denied it: poverty did not exist; it was a figment of our imaginations. It was not then and it is not now.

The Child Poverty Action Group has estimated that 60% of the current benefit cuts fall on those who are in work. I totally reject, as do my right hon. and hon. Friends, that those who are not in employment are scroungers or not justified in receiving social security benefits. The severely disabled are among those being hit by the cuts.

The Institute for Fiscal Studies has said that child poverty will rise during this Parliament from 2.5 million to 3.2 million—an interesting figure, and I would argue that this debate is justified by that alone, and it explains why my right hon. Friend the Member for Oldham West and Royton and I urge taking action. The figures I have quoted mean, according to the IFS, that almost 24% of children in the UK are likely to live in poverty by 2015 next year. What sort of country are we—supposedly one of the most advanced industrialised countries in the world, yet 24% of our children will be living in poverty by next year? This compares with just over 19% in 2011—and that figure was far too high. The IFS goes further, projecting that, unless there are changes, current policies will impoverish a further 700,000 children between 2015 and 2020. That means some 4 million children growing up in poverty in the UK.

I had thought that Parliament in previous times, such as from 1945—I cannot claim to have been here at the time—was determined that poverty should largely be abolished, that full employment should occur and that no one should ever be in need again to the extent that people were before the second world war, yet we seem to be returning to that situation, which we hoped would be abolished for ever.

The policies being pursued—only 1% uprating of so many benefits, including child benefit; the change from the retail prices index to the consumer prices index as a basis for calculating benefits; the reductions in working tax credits and the rest—all add up to explain why we need this debate on poverty. All this, of course, is without what the Chancellor has threatened—a further £12 billion-worth of benefit cuts that he would like to see introduced after 2015.

Is it surprising that so many people in need are turning to food banks, which my right hon. Friend the Member for Oldham West and Royton mentioned? During Education questions in September last year, the Education Secretary said that when people used such facilities as food banks, it was

“often the result of decisions that they have taken which mean they are not best able to manage their finances.” —[Official Report, 9 September 2013; Vol. 567, c. 681.]

That was his explanation—a leading member of the Cabinet—for food banks. The Trussell Trust described those comments as “not just insensitive”, as they obviously were to say the least, but “completely inappropriate”.

As anyone would know, people do not just go to a food bank for fun to ask for this, that or the other. It has to be authorised; people need vouchers and authorisation before food can be given. Does anyone in this House believe that people go along to food banks for the fun of it and to get a bit of free food? They go because they have no alternative. They have such limited incomes for bringing up their children, and I thought many of them feel humiliated by having to attend food banks. I would feel humiliated, and I am not alone. I would imagine that virtually every Member would feel humiliated if, as a result of limited income, poverty and so forth, they had to go to a food bank. How easy is it to justify that to the children? “Why are you going to a food bank, dad? Why do we not go to Tesco’s like everyone else?” Many children would ask such questions. We know why people go to food banks.

What about the figures? In 2009-10, about 41,000 people used food banks. By 2011-12, it had gone up to 128,000. As I think my right hon. Friend the Member for Oldham West and Royton mentioned, the latest figures from the Trussell Trust suggest that some 350,000 people are using them. Given that—fortunately—other organisations provide such facilities, the total number is about half a million. Half a million people in this country are using food banks! Are we proud of that? Do we feel that the House of Commons is doing its duty, and carrying out its obligation to deal with poverty and deprivation? Let me say it again: at the beginning of this year, 2014, half a million people are resorting to food banks because they have no alternative.

Other problems are being caused by cuts. For example, as a result of the impact of the cuts on local authorities, many home care visits are limited to 15 minutes. Those visits would not have been authorised in the first place unless they were necessary. Most of them involve disabled people and, in many cases, elderly people—in my age group or older—who cannot look after themselves. The number of 15-minute visits has increased by 15% over the last few years, and 60% of local authorities commission such visits. Why is that? In the main, it is not because any of them—including Conservative councils—are insensitive, but because, given the impact of the cuts, they see no alternative.

[Andy Sawford]

My hon. Friend has made an important point about the impact of the social care cuts. Is he aware that the 10% of local authorities that are the most deprived in the country face cuts six times higher than those faced by the 10% that are the most affluent?

[Mr Winnick]

That too is an important point, which I hope the Minister will bear in mind when he winds up the debate.

For those who have limited means, for those who cannot find work and for the disabled, the last few years—especially the last three—have become a desperate struggle for survival. I repeat what I said earlier. We should be ashamed, deeply ashamed, that so many of our fellow citizens—and let us not forget for one moment that they are our fellow citizens—are having to live in such circumstances. I only hope that there will be a change of Government, and that the new Government will do what I have every confidence that they will do. I hope that they will develop policies that will make life easier for those in need, as a Labour Government did previously. I was a bit of a critic of the last Labour Government on occasion, but there is no doubt that, overwhelmingly, my constituents were greatly assisted by their policies. I said so at the time, and I have said so many times since then.

This debate is essential, and I congratulate my right hon. Friend the Member for Oldham West and Royton on introducing it. I hope that, as a result, Ministers and Conservative Back Benchers will recognise how vital it is that change should come.

19:53

[Jeremy Lefroy (Stafford) (Con)]

I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) and my hon. Friends the Members for Worthing West (Sir Peter Bottomley) and for Birmingham, Yardley (John Hemming) on securing the debate. I welcome the opportunity to discuss the impact of the Government’s welfare reforms on poverty.

Evidence from my constituency certainly suggests that an increasing number of people are finding it very difficult, or impossible, to make ends meet. That applies particularly to those who are out of work, but, as other Members have said, it also applies to those who are in work. However, I think it important for us not to restrict our review to welfare reforms. More and more people in my constituency, and indeed throughout the country, are entering work and finding a way out of poverty as a result of the Government’s focus on job creation and apprenticeships.

We also need to consider the overall effect of the work that is being done to cut the deficit. As was pointed out by my hon. Friend the Member for Monmouth (David T. C. Davies), the purpose of that work is to maintain confidence in the United Kingdom as a borrower, to keep interest rates down—let us not forget that we are currently spending nearly £50 billion a year in interest, and that the figure is rising—and to ensure that we as a country can maintain a proper welfare safety net for our people, not just in the short term but in the long term. A country that continues to run a 6.8% annual budget deficit will eventually be unable to afford not only a welfare safety net, but the other vital safety nets that we provide.

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

The hon. Gentleman makes many very measured speeches, and I know that this will be no exception. Does he agree with my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) that the number of working people who live in poverty is now greater than the number in workless households?

[Jeremy Lefroy]

I do agree, and I shall say more about that in a moment. It is a matter that should concern all Members on both sides of the House, and I do not believe that the Government are immune to that concern.

A universal free health service and a universal free education service are also vital safety nets, but it is essential for the Government, on behalf of the nation as a whole, to keep a close eye on both open and hidden poverty. Poverty is often more hidden than open: many people do not complain and do not come to our surgeries, but get on with it, day in, day out. However, those people are really struggling, and it is incumbent on the Government to keep an eye on them. Governments exist for all their citizens, just as we as Members of Parliament represent all our constituents, whether they voted for us or not. Certainly, they do not exist only for the 20% or 25%—or fewer, if we count those below the voting age—who cast a vote for them. I know that Ministers in the Department have always taken that very seriously—especially the Secretary of State, not least when he established the Centre for Social Justice, of which I have been a supporter for some time.

It is also vital for Governments to consider both the short-term and the long-term effects of their policies. As I have said in the House before, I believe that in the short term we need to look again at the way in which the spare room rent subsidy is being implemented. Increasingly, arrears are accumulating. One social housing provider in my constituency already has arrears of 37%, and it is a good provider. Many others have far lower collection rates. That will eventually lead to evictions or write-offs, both of which are costly in human and financial terms. A suggestion I have made before is that the rate for the spare room rent should be substantially lowered from its current percentage levels to a fairly nominal amount initially if we are to maintain the principle, which I believe we should, and therefore make it affordable. It should be increased only as the supply of suitable accommodation approaches demand.

The right hon. Member for Oldham West and Royton mentioned sanctions, which are applied to some of my constituents in a rather arbitrary manner. I ask the Minister to consider the way in which the Department sanctions jobseekers. I think it important for sanctions to exist, because we cannot be taken for a ride, but those who are genuinely seeking work should not be sanctioned as a result of mere technicalities, as has happened in my constituency.

The Chancellor recently talked of removing benefits from those aged under 25. I shall say more in a moment about the £25 billion hole that needs to be filled. Certainly, everything possible should be done to ensure that the under-25s have all the support they need in the form of education, training and work. It is clearly important for people to see benefits as a safety net rather than a way of life, but removal of, for instance, housing benefit from under-25s across the board would have a drastic impact on young people who need to live away from home and who have no support from their families. The YMCA in Stoke-on-Trent is an excellent organisation. Its managing director, who is a friend of mine, drew my attention to the consequences that such action would have on its excellent provision for young people, most of whom it is trying to get into work. This is a case of supporting people during transition. For younger people, we need to recast this support almost as income for productive work for all those who are able, so they get used to the idea of work, which almost all of them want to take up; but that support must remain.

We need to do more to help councils deliver more homes, perhaps by relaxing the existing borrowing rules for local councils, particularly on affordable and social homes. We also need to look at the possibility of localising employment schemes. The Work programme is doing some very important work around the country, but I would like it to become more local, so local councils can take more responsibility for running it in their own areas. The universal credit is incredibly important and I wholeheartedly support it. When it is introduced in each area, we should look at localising support and giving responsibility for managing finances as much as possible to local councils.

Finally, let me return to the question of the £25 billion hole. This is a fact and it is something a future Government, of whichever party, will have to face. There are so many ways we can reduce it. We can raise taxes, we can cut departmental spending and we can cut benefit and pension spending, or we can increase growth, which clearly is the preferable option we would all like to see. However much growth is increasing by at the moment, however, it is not going to fill that gap in the coming years. Can we raise more in taxes? I would rather see whether we can remove some of the concessions, and I have mentioned before the high rate of pension tax allowance, which is not a tax rise but is reducing the allowances people on higher incomes can claim when making pension payments. That costs us several billion pounds a year.

I do not believe there is much room to cut departmental spending in certain areas. I would certainly not want to see any more cuts in defence and security and schools and education, but we do need to have a look at one or two of the existing ring fences, although perhaps over the coming few years and not immediately. For instance, I would look at different ways of maintaining the free-at-the-point-of-delivery national health service—more through a progressive contributory national insurance system than out of tax. That would be one way of raising the income required to pay for our free-at-the-point-of-delivery health service and giving the Chancellor a little more wriggle-room on the £25 billion.

In conclusion, I think it is vital to look at poverty not just in terms of welfare reforms—important though those are and though their impact is—but in the round at all the things the Government are doing, whether in the field of job creation or protecting the vital national health service and the vital schools budget. Therefore, although I support this motion, if this inquiry is to go ahead it should look at all those things in the round, rather than just focusing on one or two of the points that have been raised.

20:03

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

I add my congratulations to my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and join him in thanking the Backbench Business Committee for finding time to accommodate today’s important debate.

It is crucial when the Chancellor complacently talks of a recovery that Opposition Members articulate the more accurate reality for the hard-pressed and hard-working families of Britain, but I will concentrate on the effects of the reforms on my city, and I make no apology for doing that.

According to a study by Sheffield Hallam university and the Financial Times more than 64% of neighbourhoods in the Liverpool city region can be categorised as being in economic deprivation. The average for a local authority is just 15%. Such a stark statistic should in itself explain why Liverpool’s five MPs—I am delighted that my hon. Friend the Member for Liverpool, West Derby (Stephen Twigg) is present—have been so steadfast and vocal in this place in our opposition to the Government’s welfare reforms and cuts across the spectrum.

Let us look at the abolition of council tax benefit. While Liverpool opted to reduce rebates by no more than 8.5%, a further 44,000 Liverpool households of working age have had to start paying additional council tax as a result of the Government change, at an average of £1.70 per week. I know some Government Members will scoff at that, and I know it works out as roughly the same amount per year as the Prime Minister pays for a haircut, but when just a few pounds a week makes all the difference the loss of £1.70 a week hits low-income households hard.

There is not only the council tax benefit issue, of course. There is also the Government’s beleaguered bedroom tax, as we have heard, which does not just affect the disabled; it actively targets disabled people. This has detrimentally impacted on 11,600 working-age households in Liverpool with an average reduction in housing benefit of £14 per week. In Liverpool, despite the largest budgetary cut in the country and with the council being asked to do even more but with 52% less in budget, council officers have had to deal with a 34.2% increase in benefit appeals, which in real terms equates to 6,768 individual cases with the resulting costs to the staffing budget.

In 2013 Liverpool city council saw 7,360 people apply for discretionary housing payments, which amounts to a staggering 610% increase on 2012. More than four out of five of these applicants were social sector tenants affected by the bedroom tax. Liverpool city region is one of the five most indebted areas in the UK and the national, regional and local figure for individual and household accumulated debt is rising. That is why unemployment is never a price worth paying and why exploitative zero-hours contracts and the proliferation of part-time temporary jobs are never the answer.

My constituency of Liverpool, Walton is in the top 10 constituencies for the highest levels of unemployment and, as I am certain other Members would agree, the vast majority of the unemployed people who come to see us are desperate to find work. They want a job—they want to find employment—but unfortunately opportunities are limited.

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

May I reinforce the point my hon. Friend is making about people wanting to work? I held a jobs fair in Liverpool in October last year, to which more than 3,000 people desperate for jobs or apprenticeships came. I want to support what my hon. Friend said about the overwhelming majority of the people who are unemployed in his constituency and mine desperately wanting work.

[Steve Rotheram]

I agree, and I support the sentiments behind my hon. Friend’s holding of that fantastically successful jobs fair and the sentiments of the ordinary people we speak to. Sometimes we in this place see everything through the prism of what happens in London, and that is wrong. Out in our constituencies the reality is very different from the growth we sometimes see not across the board in London and the south-east, but in certain parts of this end of the country.

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

One of the reasons I brought the cruise terminal to Liverpool in my previous job as a Transport Minister was to create jobs, that proposal was refused by the previous Labour Government. A lot of Government Members have exactly the same aspirations as the hon. Gentleman has for his constituency—to bring jobs to the area, which is why I made that decision.

[Steve Rotheram]

I thank the Minister for that intervention and I have previously put on record my thanks to him for making that decision. It was a brave decision, but it was also the right decision for Liverpool and for this country. I might be playing into the hands of Conservative Members by saying this, but when we joined the EU—the Common Market, as it then was—Liverpool found itself on the wrong side of the country and business transferred to the east. However, Liverpool is once again an international destination of choice, and it now finds itself on the right side of the country for the increasing transatlantic trade. We are hoping to open the first Panamax facility in the UK there in the near future, which will create jobs. Perhaps the Minister can therefore claim some credit as a catalyst for the regeneration of our waterfront.

[Mike Penning]

I want some more credit, actually, because Peel Ports will do that, and I also granted permission for that. The commercialisation of the Manchester ship canal will really open up that part of the world to international trade.

[Steve Rotheram]

I am not going to say quite so many nice things about the other end of the M62, but I understand the Minister’s point.

The massive increase in apprenticeships has been mentioned, and we welcome any genuine increase in their numbers. I used to work for the Learning and Skills Council, however, and I know that a large percentage of the increase in apprenticeships that the Government are claiming consists of rebranded training programmes for over-25s who are already in employment. What we really want is for the Government to tackle youth unemployment in those aged under 25 and to introduce real apprenticeships to bring those people job opportunities.

Lots of people in my city are on benefits for the very first time. Far from being in clover—it beggars belief what we read in the right-wing press—they are struggling to make ends meet, and the problem that thousands of Liverpudlians are facing is new to them. For many, the idea that they might miss a rent payment is totally alien. They have not done that in the past 20 years, but since May 2010 their individual household incomes have been on such a downward trajectory that they now find themselves in rent arrears, seeking advice on debt management and unable to afford the daily cost of travel, food and energy.

The Government now admit that, thanks to their flawed economic plan, they will miss their own economic targets by more than half, yet they still try to pass it off as a great achievement. That plan has meant that growth has been non-existent for three years, that small and medium-sized businesses have gone bankrupt at a rate we have not seen before, and that people’s money no longer goes as far on payday. The Money Advice Service estimates that 8.8 million people in the UK now have serious debt problems, but only 17% of that group have access to the debt advice that they need. That shows the depth of the problem.

Figures suggest that 40% of the adult population in Liverpool are struggling with serious debt problems. Let us stop and consider that for a moment. More than a third of all working-age people are in serious debt. Their wages are simply not enough to pay off what they owe, let alone pay their monthly bills. That is central to my party’s reason for highlighting the cost of living crisis. The findings of the New Policy Institute prove that, for the first time, more than half of the 13 million people living in poverty in the UK are in working families. That really exposes the folly of the Government’s rhetoric about strivers and skivers, workers and shirkers. With the cost of living rising faster than wages in virtually every month since this Government came to office, it is a betrayal of the Britain we live in not to recognise that recovery is a hell of a long way off. The fact is that, out there in the real world, people are hurting.

Just under 11,000 people were fed by the South Central and North Liverpool food banks between April and October 2013. I took the opportunity to visit the food bank in my area on Friday, and the work that it is doing is unbelievable. It has never been so busy. Instead of listening to the absolute nonsense peddled by the Secretary of State for Education about life choices, we should be congratulating those volunteers and the people who donate to food banks so that our constituents and citizens can have a decent meal of a night. Forget the Government’s flawed line about the rise of food banks over a 10-year period while Labour was in office; that figure of 11,000 is double what it was just 12 months ago, and 35.3% of those who have been fed by the Liverpool food banks are children.

The poverty inflicted by this Government has wider implications. In a letter to the British Medical Journal, David Taylor-Robinson of the university of Liverpool and his fellow academics have highlighted the doubling of malnutrition-related hospital admissions nationally since 2008. I am sure that many Members will also have seen the recent briefing from the charity Shelter, encouraging those with rent or mortgage repayment problems to seek early advice rather than allowing the problems to build up. Unfortunately, the cuts to citizens advice bureaux and legal aid make it more difficult to get appropriate advice. One of the advice centres in my constituency has had to close. In quarter 2 of this financial year—I am going to run out of time unless somebody intervenes on my to allow me an extension. [Hon. Members: “We can’t.”] All right. In that case, I have run out of time, Madam Deputy Speaker.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. To try to ensure that every Member who has indicated that they want to participate in the debate may do so, I am going to reduce the time limit to seven minutes. I hope that that will mean that everyone will be able to contribute, although I cannot guarantee it. It might be necessary to reduce the time limit further.

20:10

[John Hemming (Birmingham, Yardley) (LD)]

These debates are important in highlighting matters of detail. I am pleased to have signed the motion for this one, which calls for an inquiry into the effects of the benefit system. The biggest detail involved in all this is of course the deficit. When this Government took over, the country was borrowing £150 billion a year, which was added on to the debt each year. If we reduce that too quickly, however, it will cause economic dislocation, so it will have to be reduced relatively gradually. That is why it is surprising that the Opposition are criticising the Government for not reducing it to zero straight away. Obviously, we cannot do that sort of thing.

Another important detail is universal credit. I am very supportive of universal credit because it goes down the route of creating an environment in which people can benefit by being in work. There are people who abuse the benefit system, but the majority of people who receive benefits need support from the state in order to live. It is important, when we are dealing with the people who are abusing the system, that we do not throw out the baby with the bathwater.

I have been doing some work with the 6 Towns credit union. One issue with universal credit is that people will receive a sum of money each month then have to pay their costs out of it. The reason for doing that is to ensure that people who go back into work and are paid monthly do not suddenly find themselves unable to cope financially. There is no doubt that that prospect often makes people frightened of taking a job. The motivation of paying universal credit on a cash-flow basis is a good one, because it is designed to create an environment in which it is easier for people to get into work.

To achieve that, however, there must be ways for them to manage their cash flow, because not everybody is good at that. That is why I am pleased that the 6 Towns credit union has expanded its modus operandi and its common bond to include a lot of Birmingham, including my constituency. When universal credit comes in, my constituents will now have a service towards which the Government have put some money, because they have put money towards credit unions generally.

Specific issues need to be looked at. I always worry about the debate on food banks, for example. If we do not look at individual cases and work out why people are depending on food banks for three days, we cannot identify the problems in the system. The Trussell Trust was created in 2000, so in 1999 there was no Trussell Trust and no food banks. There were schemes then—people would go to supermarkets and get stuff that was out of date; there were all sorts of ways in which people found emergency food support. The fact that we have good organisations with good volunteers offering a good service does not mean that suddenly everybody who is using that service is doing so as a result of changes in Government policy. We have to review this in detail and look at the individual cases.

One of the general sorts of cases I am concerned about involves people transferring off employment and support allowance and then not being informed enough to claim jobseeker’s allowance. I believe that the Government are working on dealing with that. A number of constituents have come to me with those cases when they are destitute. My top priority is to ensure that people are not destitute. We see that happening from time to time and we need to identify those cases. Sometimes when I tell people that we can give them a voucher for the food bank they tell me, “I cannot afford to cook the food, so there is no sense in me having anything from the food bank.” It is important to prevent people from being destitute, and I have raised this issue directly with the Minister and in a ten-minute rule Bill.

[Jeremy Lefroy]

I wonder whether the hon. Gentleman agrees with me about one problem with the transfer from ESA to JSA. A lady in my constituency says, “I am simply not fit for work, but by signing on for JSA I have to say that I am available and fit for work.” She does not want to tell a lie.

[John Hemming]

This is where the difficulties lie. I do not think that those are the details of the situation, but people misunderstand the situation and end up suffering as a result. I have never liked any of the cuts, but we have to make cuts because of the deficit. The one I would be most uncomfortable about is restraining the inflation increase to 1%, and if things get better I would at least like to examine the situation of the people right at the bottom of the pile—those on £71.70 a week or some £52.35 if they are under 25. They may only be losing out by £1.40 a week, but that is a lot for someone in that situation. I would like the Government to consider that issue.

I am also worried about the interrelationship between the welfare cap and victims of domestic violence, and whether there are situations that need more attention. I believe that people can get discretionary housing payment to leave a violent home, but it is important that we ensure that there is a route out of domestic violence for women. I am worried about that issue, just as I am about some wrongful sanctioning that I have seen. That does not help at all, because it undermines the whole process.

I would also like to see a substantial increase in the minimum wage, because as the economy is improving the Government should look at that, rather than maintain things as they are. I might be the first person to mention that. As colleagues are aware, I am not so uncomfortable about the spare room rent. On Saturday, a constituent came to see me because they were living in a one-bedroom council flat with a family of four. If that is happening, clearly there is space for people to downsize; I know that Bromford Housing Group has difficulty renting out single-bedroom properties, as it has said that to me. The details matter on this, and I am trying to get those details from my local authority in order to look at these things.

I am unhappy with my local authority cutting the amount of money it is putting into council tax benefit and therefore increasing the amount of council tax paid by people on JSA. We also have to examine the issue of habitual residency for in-work benefits, because a situation where people are encouraged to come here to be self-employed so that they can get a large amount of benefits even if they are not earning any money being self-employed—this is The Big Issue case—is not a good way of doing things. Debt issues are critical, and I am pleased that the Government are making some moves on payday loans, because when people get into a mess it is difficult to get out of it.

[Dame Angela Watkinson (Hornchurch and Upminster) (Con)]

Does my hon. Friend agree that fiscal education in schools is playing a vital role in helping the next generation of adults to be able to manage their personal finances, however modest, and to understand how to stay out of debt?

[John Hemming]

That is very important. The essence of what we are trying to do with the universal credit is get people to be able to manage their accounts. Again, people such as those at 6 Towns credit union offer services that facilitate that. That is definitely the way to go, but we need government action—regulatory action—on payday loans because people are not necessarily that numerate and they see these things as a short-term solution without being aware that they create a long-term problem. That is clearly part of the issue.

As I said at the start, the details are crucial. The motion calls for an inquiry to be set up that is independent of Parliament. I would prefer a parliamentary inquiry, but I am pleased to have my name down in support of a motion asking for these issues to be examined. The details are critical and they need to be kept under continuous review.

20:25

[Chris Williamson (Derby North) (Lab)]

I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this incredibly important debate on the need for a commission of inquiry into the impact of this cruel, callous coalition’s policies on poverty in the United Kingdom. I wish to focus in large measure on the impact of housing and the welfare reforms that have been put in place, but I wish to start by addressing the intervention made by my hon. Friend the Member for Corby (Andy Sawford), who referred to the pernicious reforms that have been made to the council tax benefit system. We hear a lot from the Government about freezing council tax. That is fine and dandy for the people who have the resources not to need council tax benefit, but the very poorest people, even in those local authority areas that had a freeze on their council tax, are seeing an increase in the amount of council tax they are expected to pay. That is absolutely disgraceful, and I do not know how Ministers can sleep in their beds at night when they are inflicting such penalties on the poorest people in our country.

As I have said, housing is a key area in addressing poverty in our country. The hon. Member for Stafford (Jeremy Lefroy) said that the commission we are talking about should have a slightly wider remit, and that is important, as it should incorporate housing, too. What we saw when this Government came to power was a massive reduction in investment in affordable housing in our country. One of the first things they did was to cut it by 60%—that is what they did when they first came to power. Their housing policy is shambolic. They are not building anywhere near enough houses for the people in our country, and the houses they are building are too expensive—to buy or to rent. People are caught in a Catch-22 situation. Youth unemployment is growing, with about 1 million young people on the dole, and low pay is endemic. As my right hon. Friend the Member for Oldham West and Royton pointed out, some 6.7 million people living in poverty in our country are in employment —that is disgraceful.

Let me briefly touch on my personal story, and how things have changed from the 1970s in terms of what ordinary working-class people were able to do and the sorts of lifestyles they were able to afford, particularly the housing. I was a 19-year-old apprentice bricklayer when I was able to buy my first house, with the benefit of the option mortgage scheme brought in by the 1974 to 1979 Labour Government. I was earning £60 a week and I was able to buy a brand new three-bedroom house that backed on to a canal for £10,000. That was three times my salary then, but it would be impossible to do the same today because the average price paid by a first-time buyer is £185,000. I have checked on the internet what a bricklayer can earn these days. On average, they earn £10.28 an hour, or £21,382 a year, so the average price for a first-time buyer would be a multiple of 8.6 times their salary. In this day and age, an apprentice bricklayer earns around £170 a week, or £8,840 a year, so a multiple of 21 times their salary would be required. People can no longer put down roots in the way that they did, because they have been priced out of the market. I am talking not just about buying but renting as well.

It is vital that we build the houses that people need. Labour is committed to building 200,000 homes per annum, which is vital in not just delivering a social need but putting thousands and thousands of people back into work. We need a renaissance in council housing, because the private rented sector is ill-suited to social housing, which has led to the obscene housing benefit subsidy system that was set up by the right hon. Member for North West Hampshire (Sir George Young) when he was the Housing Minister. On 30 January 1991 he said:

“If people cannot afford to pay that market rent, housing benefit will take the strain.”—[Official Report, 30 January 1991; Vol.184, c. 940.]

Well, take the strain it most certainly has. Some £24 billion a year is being paid out in housing benefit. According to the House of Commons Library, £9.3 billion is going into the back pockets of private landlords. Compare that with the £1.1 billion this Government are putting into building affordable homes for people. The affordable homes programme summary said that will result in just over 67,000 homes per annum. Imagine if we put all that money into building homes for people. Think of all the jobs that could be created. If we just used the amount that is going to private landlords, we would be able to build 600,000 homes a year. We are building nowhere near that. We have a massive housing crisis in our country. There is a crazy housing subsidy system, which needs to be reformed. There are 1.7 million households on the housing waiting list across our country, 4,000 of which are in Derby. More and more people are reliant on the vagaries of the private rented sector. That cannot go on. What we need is a change in emphasis. We need a bricks and mortar subsidy to build the homes that people need. We need a council house, renaissance, to regulate the private rented sector and to ensure that land is released to build homes that people can afford.

[Steve Rotheram]

Does my hon. Friend also agree that Labour’s pledge, if we were to be the next Government, would mean an additional apprentice for every £1 million of public sector contracts?

[Chris Williamson]

That is a really important commitment. Let me refer if I may to some other statistics. I have talked about a massive investment in council housing. It is important to recognise that for every £1 of public sector investment in infrastructure, the Exchequer gets back 56p. As the net expenditure is somewhat less, it is well worth making that investment to generate the apprenticeships to which my hon. Friend referred and the jobs across the piece that are required, and to build the homes that people need. We need this commission. Its terms of reference should be somewhat wider than has been set out in the motion. If we can invest in the housing that we need, it will help to create stable communities, generate jobs and promote economic growth. Yes, we need a commission, but we also need a Labour Government in 2015 with the radical commitment that we saw in 1945 to deliver what Beveridge achieved. We need to deliver on the recommendations of the commission, which has been called for by my right hon. Friend the Member for Oldham West and Royton.

20:33

[Sir Peter Bottomley (Worthing West) (Con)]

That was an interesting speech. I am glad to support the right hon. Member for Oldham West and Royton (Mr Meacher) in his suggestion that we have a commission to provide comprehensive, unbiased measures of how action changes levels of poverty—absolute and relative poverty. That should include what people spend their money on and what makes people more likely to find themselves in poverty. We know about disability and the dependency of people before they get a job. We know about people in retirement, family deformation and mental health issues. A whole range of considerations should be taken into account.

The hon. Member for York Central (Hugh Bayley) is no longer in the Chamber, but he made some comments about the national debt. Most of us know the difference between a deficit and a debt and could talk for ages about gross Government debt, public sector net debt, unadjusted measures of public sector net debt and UK net borrowing, whether as a percentage of gross national product or not.

It is better to understand that the previous Labour Government had some merits. In their first three years, they stuck to the Conservative spending plans, net debt did not go up and we all benefited. From 2001, there was a massive expansion in public sector employment of 30% that was, I think, associated with the structural deficit exposed by the recession and the bank crisis.

I started in public policy in the early 1970s when I ran a thing called the Family Allowance Movement, trying to introduce family allowances for the first child. A Labour Chancellor asked, “What is the point of having a family allowance? I am going to increase the married man’s tax allowance.” Those are the arguments we come back to 30 years later in a rather different sense. Balancing people’s resources and needs at any one time and over a life circle is how I prefer to look at it.

Let us not make any comments about any individual, as my hope is that many of the people who follow us will make fewer mistakes than we did, but if, for example, the time of family formation comes later on average and more children are born into households that can make some reasonable provision for them, we will be better off. At one stage, I looked to see who was most likely to smoke, a habit that takes £60 or £70 out of post-tax income. The answer was lone parents on income support. We would be able to give a lone-parent family an extra £50 or £60 of disposable income if a third of our teenagers did not take up smoking. As those who are most likely to take up smoking are those who were most likely to be deprived in their early lives, we could make a difference to people’s lives.

I am not absolutely certain that we should be too keen on a welfare system that guarantees independent housing to young people. My mother used to say that if someone was a lone parent, setting her up—it is normally a her rather than a him—in independent housing at the age of about 18 with a child, alone, is not the best thing as parents need to learn parenting from those who are around them.

What makes a difference to me is how we can reduce the cost of borrowing by households or individuals, which is why I strongly support the mentions of credit unions. I look forward to hearing from the Minister when credit unions will be able to charge a rate of interest per month that might look high to most of us but that is dramatically lower than the cost of door-to-door lending or some of the other sources of credit available to those who do not have assets or reliable incomes and who are in difficulty.

I recognise the point made by the hon. Member for Derby North (Chris Williamson) about how it was possible in his day for someone with ordinary earnings to buy an ordinary home. I first got a home in Worthing, my present constituency, in 1966. Almost anybody there who had a job could afford to buy a home. That has changed and it is crazy that we have an economic system in which half the value of a home is the site value. We must find some way of ensuring that ordinary people in ordinary jobs can afford to buy homes.

We can also make a difference, as I did when I was involved in a small electrical contracting business before I came into Parliament. Most people’s earnings were twice their guaranteed earnings and by putting people almost on salaries I made sure that they could have guaranteed income for the year. Three quarters of my colleagues were able to buy their own homes for the first time. There are some mechanical things that matter.

[Jeremy Lefroy]

Does my hon. Friend recognise that that is also a problem for agency workers? As they do not have a long-term guaranteed income, they are unable to get mortgages.

[Sir Peter Bottomley]

I am grateful to my hon. Friend for that intervention and I appreciated his speech, too. We ought to try to ensure that we have sources of lending in which people understand the industries in which people are working. That is where the building society movement came from—originally, it was about building homes. If we could get some mutuality back into the agency area, people would be able to decide who could be lent money and who should be deferred.

The last point in my mind concerns how we can go on preparing people for the jobs and occupations of the future. Many people’s futures will be as entrepreneurs, as they set up their own businesses; others will be in employment. I remember with pleasure Peter Thurnham, one of our former colleagues. When he was made redundant, he used his redundancy money to buy two machine tools, set up an engineering business and eventually employed 150 to 200 people. People sometimes say to me, “MPs shouldn’t have outside interests.” I would far prefer to have in Parliament people such as Peter Thurnham, who can tell us how business and employment work and how to get more people off welfare and into the kind of jobs that make them pretty independent for most of their life.

Many of us will require some support at some stage in our life; relatively few of us need support all the way through our lives. Before this Government came to office, we were getting to a stage at which too many families were in dependency from generation to generation; Keith Joseph told us quite a lot about that. Statistics show that only 10% of people who were in the bottom decile—the bottom 10%—10 years ago are in the bottom 10% this year. There is a great deal more movement among those who are poor or very poor than most people understand.

[Chris Bryant (Rhondda) (Lab)]

indicated dissent.

[Sir Peter Bottomley]

The hon. Gentleman shakes his head; when he speaks, perhaps he can give his statistics. We need a commission, with statistics that we can all rely on from the Office for National Statistics, the Institute for Fiscal Studies and the Office for Budget Responsibility.

20:40

[Katy Clark (North Ayrshire and Arran) (Lab)]

It is a pleasure to follow the hon. Member for Worthing West (Sir Peter Bottomley). I congratulate all those who signed the motion and did the work to secure this debate, because I think that a commission of inquiry should be established to investigate the impact of the Government’s welfare reforms on the incidence of poverty. I say that because of my experience as a constituency MP, and my knowledge, from this place and other places, of what is happening nationally.

The reality is that all of us are inundated in our constituency surgery by constituents who are experiencing the impact of the Government’s welfare reforms. Mr Scott, a constituent, came to see me last week; he was diagnosed with bowel cancer last summer, and had applied for the personal independence payment. He has worked all his life; it was the first time that he had had contact with the welfare benefit system. He is still awaiting receipt of any money. Many other constituents who come to see me, including carers and those who are disabled, are suffering as a result of the bedroom tax.

There has been a massive increase in poverty in this country since 2010. Some of that is associated with welfare reforms; some is related to other aspects of Government policy, and what is going on in the country with low pay, wage freezes, wage cuts, and less secure forms of employment, and all the other issues that we spend time talking about in this place.

We particularly need to focus clearly on welfare reforms, both for those in work and those who are not working. Since 1997-98, there has been a decrease in poverty for most of the time. Some 28% of the population lived in absolute poverty in 1997, but by 2010, that had dropped to 15%—still a scandalously high figure that is unacceptable in any civilised country, but the reality was that 2.3 million children and 2 million pensioners were lifted out of poverty in that time. The country can be proud of that, even though, as I say, a huge amount more needed to be done. Since 2010, absolute poverty has increased by 1.4 million people, including 300,000 children and 200,000 pensioners. There can be absolutely no doubt that much of that increase in poverty has been a direct result of the coalition Government’s policies.

I will talk about some of those policies. We have had these debates already in this place, and we have divided on many of these issues. One of the impacts that will have the biggest cumulative effect over time is the uprating of benefits in line with the consumer prices index instead of the retail prices index. Of course, we already see the impact of that change. In 2010, when the Government changed the indexation, the difference between RPI and CPI was the difference between 4.6% and 3.1%. In every year since, RPI has been higher than CPI. Of course, the impact on our pensions and benefits affects disproportionately those on the lowest incomes.

Let us look at those in receipt of carer’s allowance. In April 2010 they received £53.90 a week. If that had increased under the old system, using RPI, they would now be receiving £61.08 a week, rather than £59.75. They are therefore £167.96 worse off each year as a result of the switch from RPI to CPI.

We see a similar situation with disability living allowance. Someone in receipt of the higher care component is now £221 worse off as a result of the switch. People with more serious disabilities who are on the higher rate mobility component are now £155.48 worse off a year. Those who receive both the higher rate mobility component and the higher care component are now £376.48 worse off a year. Those might sound like relatively small amounts to some people, but the reality is that those benefits are received by some of the poorest and most vulnerable people in the country, who were already struggling and finding it difficult to cope.

People in receipt of employment and support allowance—another form of benefit that many constituents come to see us about—are now £342.68 worse off a year as a result of the shift from RPI to CPI. It is not just that shift, but the impact of other policies, such as the 1% cap on benefits, that is having an effect. Ministers have claimed that those in the ESA support groups are exempt from that, but of course that benefit is both a basic payment and an additional payment. Although one is exempt from the 1% cap, the other is not. The reality is that for almost every benefit we look at, we are seeing our constituents receive less money every week, every month and every year.

[Chris Williamson]

Does my hon. Friend agree that cutting benefits for the poorest people in our communities has a knock-on impact on economic growth, because they inevitably spend the money in their pockets in the communities in which they live?

[Katy Clark]

I agree with my hon. Friend. I am sure that that is the case in his constituency, as it is in mine. In areas that are disproportionately reliant on the public sector and the welfare state, cutting benefits is taking millions of pounds out of the economy every year, which is simply putting us in a worse situation.

We have also seen a massive increase in the impact of benefit sanctions, as I am sure many Members are only too aware from their constituencies. It is often the same people receiving those benefit sanctions again and again, and each time it is for a longer period. Many of those people have nowhere to go, because they can go to a food bank only three times.

The other major concern is the bedroom tax, which constituents come to see me about all the time. In North Ayrshire we have seen a 756% increase in discretionary housing payment applications. Only 66% are accepted, which means that a third of those people do not get the payment. Indeed, when people go back to apply the next time, because it is a time-limited payment, they are often refused. That is having an impact on council rent arrears. Rent arrears in North Ayrshire, for example, have increased from 3.6% of annual rent to 5.5%.

Those are just a few examples from my constituency, but we all have many others. This is having a massive impact on our country. We are seeing a massive shift in wealth. We need someone to look at that seriously, which is why I think that the motion before us—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Simon Danczuk.

20:48

[Simon Danczuk (Rochdale) (Lab)]

Let me start by thanking those Members who pressed for this important debate, particularly my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and the hon. Member for Worthing West (Sir Peter Bottomley). I believe that we should be proud of our welfare system in this country. It provides a vital safety net, and not just for people who have fallen into poverty, but for the disabled, older people and those who need to get back into employment.

However, we should not fall into supporting an argument that suggests that the system is perfect. Too many people take the view that the welfare system is a sacred cow that should be left alone. I do not share that view; on the contrary, I believe that self-reliance and making the welfare state much more accountable and appropriate to people are extremely important. I certainly believe that reforms can be made, especially to the way in which the system supports and challenges people—and, yes, pushes them back into employment. However, when reform of the welfare system is undertaken we must be certain that we do not abandon the most vulnerable people and push them into poverty.

I will give two examples of the Government’s welfare reforms having left vulnerable people without the safety net they need. First, I want to talk about one of my constituents, Sheila Holt. On Friday I met her father, Mr Kenneth Holt, and other members of her family. Sheila is 47 years old. She had an exceptionally traumatic childhood that I will not detail here, but needless to say it was a period of her life that scarred her mentally. She has not worked for 27 years because she has a severe psychiatric condition; she is unable to work. Because of cuts, I suspect, Sheila was relatively recently persuaded to sign off her psychiatric treatment. Soon after that, she was being pushed by the DWP towards the back-to-work scheme. Her family advocated for her, explaining that she had had trauma in early life and had a psychiatric condition. They made those points strongly, but to no avail. Sheila had to start attending back-to-work classes in another town. She struggled with meeting other people. Most importantly, no mental health support or service was offered to her. The safety net was not there for her. She also had to start paying the bedroom tax. Needless to say, she was falling into poverty and beginning to worry about becoming increasingly poor. She started to become agitated and her medication could not keep up with her condition. On 6 December she was admitted to Birch Hill hospital under section 3 of the Mental Health Act 1983. A few days later, she suffered a heart attack—at the age of 47, which is my age—and she is now in a coma.

The reason I tell this story is that Sheila’s family want people to be aware that she was pushed into this situation. Soon after Sheila started her life, she experienced terrible trauma that mentally crippled her. The truth is that she is trying to live through the welfare system as best she can, but the unsophisticated and haphazard way in which it has been changed has forced a very vulnerable woman into a terrible predicament. She had a very difficult early upbringing and now finds herself in the situation she is in today.

My second point is about the discretionary social fund, which has provided crisis loans to people in need. Hon. Members will be aware that in April this year the DWP passed that responsibility on to local authorities. They will also be aware that the fund is not ring-fenced, and it has been open to local authorities to spend it however they wish. For me, this came to light because a number of constituents were presenting to me with difficulty in being able to claim any sort of crisis loan from any sort of crisis fund. One woman who came to see me was heavily pregnant and was being told by Rochdale council’s social services that unless she provided a carpet in her property she would lose the child, who would be taken into care. Ironically, the local authority was not administering the local discretionary social fund in a way that would enable her to claim money to be able to get the carpet.

Rochdale is not an exception to the rule. I carried out some research looking at local authorities right across the country, and it shows that the passing down to them of this responsibility has meant that they have set criteria far too strongly, to the point where one local authority has spent only 1% of its budget for helping people through crisis loans or grants. The irony is that, when the fund was administered nationally, it encouraged self-reliance because it was a loan that the recipient could pass back, but since responsibility was given to local authorities it has not done so because it is now a grant that cannot be passed back.

The best bit came just before last Christmas, when the Government announced that the fund will be scrapped completely from 2015. It will not exist at all and there will be no safety net for those people who really need it. They will be pushed towards loan sharks and money lenders. That will certainly happen in Rochdale and, I have no doubt, in other places as well.

[Chris Williamson]

Does my hon. Friend agree that this is tantamount to the reintroduction of the Poor Law, which was abolished by the 1945 Labour Government?

[Simon Danczuk]

I certainly take on board the point that we are moving that way in some respects. I am wholly in favour of reform of the welfare state, as I pointed out at the beginning of my speech, but it has to be done compassionately and it has to retain the safety net. If we do not do that, we will see, as my hon. Friend suggests, a return to Victorian values in the way that we administer our welfare state.

I call on the Government to reverse their decision on the discretionary crisis fund. I believe that the purpose of the welfare system is to provide a safety net for the vulnerable, but it is clear that some of the Government’s reforms are destroying parts of that safety net and leaving people much more vulnerable to poverty. As my hon. Friends have said, we need an inquiry into how the reforms are impacting on people so that they are not abandoned and left to poverty.

20:56

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

May I start by congratulating my parliamentary neighbour, my hon. Friend the Member for Rochdale (Simon Danczuk)? I agree with him that we must reform the welfare system and make it sensitive to the needs of the 21st century. I also congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), who is another constituency neighbour of mine—I am in total agreement with the points he raised—and the other hon. Members responsible for securing this debate.

I want to spend the next few minutes discussing a few points, particularly those that constituents have raised with me in my surgeries and elsewhere. The Joseph Rowntree Foundation annually monitors social exclusion and poverty and produces data on them. Its most recent report, which was published last month, shows that 3.5 million children, or 27%, live in poverty. In some parts of my constituency, the figure is nearly one in two. The Institute for Fiscal Studies has said that it expects an increase of 1.1 million children living in poverty by 2020 as a result of tax and benefit changes.

Three million parents also live in poverty. The number of pensioners living in poverty has fallen to 1.5 million, or 14%, which is the lowest level in 30 years, but the number of working-age adults without children living in poverty has risen to 4.5 million, which is the highest level in 30 years.

That is only half the story, because those relative levels of poverty relate to median incomes. The average income has gone down by 8% since 2008, which means that 2 million people who would have been deemed to be in poverty in 2008 are not classified as such now, because incomes have dropped. Incomes are going down, but prices are rising. The energy prices of the big six have gone up by 37% since 2010 and food prices went up by 32% between 2007 and 2012.

The most worrying thing—this point has already been made—is that we are seeing an increase in the working poor. For the first time since the data series started back in the 1980s, poverty in working households is higher than that in workless and retired families combined. Therefore, work is clearly not paying. In spite of a shared objective of wanting our welfare system to make work pay, it is not. I was very interested in what the hon. Member for Stafford (Jeremy Lefroy) said about phasing in the introduction of some of the welfare measures. They have been brought in too soon, and they are having a huge impact on families.

Related to the increase in the number of working households living in poverty is the increase of the number of people in low-paid work. For 46% of working families in poverty, one or more of the adults is paid less than the living wage. In total, about 5 million people are being paid below that level, which disproportionately affects women, 27% of whom are paid less than £7.40 an hour.

If we look at the effects of welfare reforms on poverty, we find that instead of alleviating poverty, it is exacerbating it. Our social welfare model is based on principles of inclusion, support and security for all—protecting any one of us should we fall on hard times, or become ill or disabled. Welfare is there to assure us of our dignity, as well as the basics of life, and to give us a hand up, not a handout; the current welfare reforms are doing anything but that.

I want to mention Rebecca, who came to see me at my surgery on Saturday. She is blind, and not only has she had her care package reduced from 13 hours to eight hours, but she is absolutely terrified about what the migration from disability living allowance to personal independence payments will mean to her. She said, “I will not see anybody from when I see you”—her personal adviser was with her—“until Monday, because of the lack of support that I am getting.” She is not alone. A raft of measures is affecting the ability of disabled people to live as normal a life as possible.

We have heard about people on employment and support allowance, and the trials and tribulations of going through the work capability assessment. One constituent on ESA, who has a heart condition, had a heart attack in the middle of going through the WCA process. He was advised to leave and he went to hospital, but a week later he got a letter saying that he had been sanctioned because he had left the work capability assessment. That is not atypical. We have also heard about the bedroom tax, with 500,000 people affected nationally. In Oldham, where 2,048 people are affected, there are only 500 properties for them to move into, which is absolutely absurd.

We still do not know the cumulative effects of all these measures. Despite the valiant efforts of the people behind the WOW—War on Welfare—petition, which has got 100,000 signatures, we still do not have an agreement on a cumulative assessment of all the different measures.

Sanctions have been mentioned. One person who came to see me had been a Jobcentre Plus adviser until relatively recently, and he told me that there is a deliberate culture to develop a sanctions target mentality. Even if people have followed everything they are meant to do, they are still sanctioned, with bogus appointments being made to set them up to fail. That is not just, and it is not what we expect of our welfare system. The implications for health and the social effects on our communities are dire. I commend the commission—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

21:03

[Lyn Brown (West Ham) (Lab)]

There is no doubt in my mind that poverty is increasing, and that a major factor in that increase is the vicious and misguided welfare reforms that are beginning to bite in my community. The scale of the impact of changes to the social security system is really quite staggering. As of September last year, 598 households in Newham are affected by the benefit cap, of which 75% are in the private rented sector, with all the vulnerability that goes with that. Larger households are the worst hit: 80% of them have three or more children. Three quarters of main claimants are women and more than half come from lone parent households. With an average loss of £90 a week, it is clearly families—that means children—who are suffering at the sharp end of these reforms.

Some 2,113 households in Newham have been hit by the bedroom tax, with many choosing to pay and stay in order to hang on to the family, social, school and other community networks they desperately rely on. The average loss is £16 a week. A further 25,227 households are caught up in the council tax benefit localisation and the cut to the overall amount available. The average loss here is £3.50 a week. Taking all the losses across the three categories—the benefits cap, the bedroom tax and the council tax—the loss to households in Newham each year is £8.9 million. It is obvious from these figures that such losses cannot be experienced without a serious impact on families, children and the local economy.

The danger for policy makers and politicians is that we assess the impact of these changes serially and separately, whereas families experience them collectively and cumulatively. In our debates in this Chamber over the past months, we have looked in detail at issues relating directly to this subject and to the incidence of poverty, its causes and its consequences. Food banks, zero-hours contracts, payday loans and high-cost credit are just a few, and it is worth reminding ourselves that each of these is not a stand-alone issue; they are interlinked and have a cumulative and often devastating impact on the lives of many of my constituents. Running through them all is the imminent threat of poverty, and underpinning them all is the spectre of the Government’s welfare reforms.

In 2009, there was just one food bank in Newham; now there are at least six, and at least four places where the hungry can get a free meal. The scale of provision is indicative of the scale of the problem. Newham is a place of widespread deprivation, yet it is from this community that food is collected and donated—by schools and faith groups and individuals paying a little extra as part of their weekly shop. These donations are from people who absolutely understand how difficult life is for those who have even less than they do. The poor are giving to the even poorer.

I will give an example of where a food bank stepped in to help when a failure of social security tipped Mr K into crisis. A single man in his thirties with learning difficulties and physical disabilities, his employment support allowance was suspended when he attended a medical. He had no money to live on for three months and could not afford to heat his home or pay his bills. The food bank supported him for a month with food and advice, and assured a successful ESA appeal. Mrs Y was supported after her husband disappeared, leaving her and the children alone. The police suspected suicide, but her benefits were stopped, as they were claimed by her husband. Community Links, a fabulous voluntary sector organisation in my constituency, supported Mrs Y with food until she could get her benefits transferred and reinstated. Although food banks have done well supporting people through crises, that shows how “on the edge” people actually are—just about keeping their heads above water, for ever vulnerable to the slide into hunger because of job loss, pay or hours cuts, reduced social security payments, or, as I have seen far too often at my surgeries, a blunder by the Department for Work and Pensions that stops essential support, regardless of the consequences.

It is so wrong that in the 21st century, people are forced to rely on the good will of neighbours to ensure their well-being. The community in which I live is poor but always generous. The plight of those reliant on food banks is something the commission of inquiry should investigate. I am grateful again to Community Links, which, in order to understand better how these changes are rolling out in our communities, carried out in-depth quality research into the circumstances of local people. The localisation of council tax, the benefits cap and the bedroom tax are hitting poor people indiscriminately, regardless of their needs or situation, and the people who responded to the survey felt they were being stigmatised for situations over which they had no control. There is no support to help people manage or cope with the transition, while the survey tells us categorically that people are struggling to make ends meet, cutting back on essential items—heating or eating—and prioritising paying rent, thereby exacerbating the choice between food and comfort and safety.

When we have the commission of inquiry, it must not just concern itself with the economics of the poverty figures. It must hear the human stories of the people who stand behind the Community Links research and who go to our food banks. It must consider and respond to the reality of their lives, as we in this House must address the sorry and devastating impact of the changes that are agreed to here, but that are felt acutely in the world outside.

21:10

[Nia Griffith (Llanelli) (Lab)]

The first question that we must ask ourselves is why we make social security payments to people. We make them because people have lost their jobs, which is a traumatic event in itself. We make them because of sickness or disability. We make them to people who are in work, but are on low incomes. Some 68% of those who are affected by the Government’s welfare cuts are in work, according to the Resolution Foundation. I will come back to those people in a moment. We make payments to prevent homelessness and to protect people from living in squalid, cold and damp conditions—conditions that will make them more susceptible to disease. We make payments to prevent malnutrition and the diseases that go with it. That is particularly important for children. Malnutrition in childhood not only affects those children in adulthood, but can affect their children. The difference in longevity between well-off areas and poor areas is well documented.

As my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) has explained clearly, we are one of the richest countries in the world and there are other ways in which we could get the deficit down. I will not spend time talking about food banks, other than to say that 50% of the people who are going to food banks are doing so because of mistakes, changes or delays in their benefits.

I want to focus on benefit rates, the Government’s policy on them and the effect that is having on people in Britain. To go back to the beginning, it is a bit of a misconception that UK benefit rates are based on a systematic estimate of minimum needs. Even from the start, back in 1948, benefit rates were a bit of a compromise between the actual needs and what was deemed to be affordable. Even by the time they were introduced, Rowntree had researched the fact that social need was an additional need to physical need. However, that was not recognised from the beginning. Although things were rather patchy until April 1975, in general, benefits increased in line with inflation. Since then, successive Governments have uprated benefits in line with inflation, mostly using the retail prices index until 2011. It is only from then onwards that we have seen the breaking of the link between inflation and the rates at which benefits rise.

Universal credit will be subject to annual review, but not to mandatory uprating. There is a huge danger that it will fall behind inflation. However, well before we get to universal credit, with its myriad problems, which are not helped by the sheer incompetence with which it is being introduced, the Government should be looking at the impact of the Welfare Benefits Up-rating Act 2013. Most working-age benefits have been limited to rises of 1% a year, and yet the costs of basic items such as food and energy—the very basics of life—are rising by significantly more. Even Government estimates suggest that there may be 200,000 more children in poverty, and the Child Poverty Action Group estimates that there could be 1 million more children in poverty by 2020.

Which benefits have been affected? Let us look at the list. The first is tax credits, which have a huge impact. We called the cut to tax credits the strivers’ tax, because it affects people who are desperately trying to make ends meet. Such people are often doing two or three jobs and patching together a few hours here and a few hours there. They are then told that they have to find more hours. Those hours simply are not available; otherwise they would be doing them.

I heard the most extraordinary statement from the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) when we were talking about housing benefit and the bedroom tax. He came out with the absurd nonsense that two or three hours on the minimum wage would make up the £15 shortfall. Does he not understand how the system works? It is very complex and there are enormous differences depending on the family circumstances and who lives in the household, but essentially, if somebody who is getting housing benefit gets additional income, roughly 65% of it will go straight into a cut in their housing benefit. So in order to get an extra £15 a person effectively has to earn £45, and to get an extra £25 they effectively have to earn about £75. That does not take into account the transport costs to get to work and so on. That is a couple of days’ work at minimum wage at the absolute minimum, on top of the other work people are already doing—these are people who are in work.

The effect of the changes is catastrophic. What have we seen cut? Tax credits, pension credits, savings credits, the health and pregnancy grant, lone parent benefits, contributory employment and support allowance, disability living allowance and council tax benefit have all been cut, and there is the switch to CPI instead of RPI. Luckily, in Wales people have been cushioned for one year by the Welsh Government, but whether that can continue and is affordable is another matter. The impact of all those cuts together is absolutely catastrophic.

The other myth we often hear peddled is the fantastically high figures that, somewhere or other, a tabloid newspaper manages to find for housing benefit. That is because they take the example of one large family in a very expensive area of London, completely forgetting that the family does not receive that money—it goes straight into the pockets of a greedy landlord. That is one of the significant contributors to a high housing benefit bill.

As our shadow Secretary of State for Work and Pensions has said clearly, and has been quoted today as saying, we will get the benefit bill down. How will we do that? We will put people back to work, we will ensure that the national minimum wage keeps up with inflation and we will bring in measures to encourage employers to introduce the living wage, through tax breaks in the first year of its introduction. Frankly, we could make £3 billion of savings simply by helping people to earn more and pay more tax. They would then not need as much in the way of tax credits. We will have a house building programme that will put people into social housing at more sensible rents, thereby reducing the housing benefit bill. We have already seen how a two-bedroom house in the private sector can be far more expensive than a three-bedroom house in the social sector.

There is so much we could be doing. In this motion, we ask for a commission to look at the impact of poverty because we are very concerned that not just this generation but generations to come will be affected by the dreadful conditions and poverty we now see spreading across the UK.

21:17

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

The question was asked earlier about how we pay off the deficit. There was a choice when the economic crisis hit: should those who created the economic crisis pay for it, or should the others? This Government decided that the poorest in our society would pay. To enable that to happen there had to be some form of ideological attack on the poorest—the latest example is the programme “Benefits Street”—that identifies a group of people and demonstrates that they somehow stand for all those people who are dependent on benefits. That is then used as a justification to cut benefits overall.

The reality, as has been said time and time again, is that some of the people suffering hardest are those who are in work. In two weeks time in this city, the BAFTAs will be hosted again at the Royal Opera House. That weekend, the cleaners will be on strike and picketing outside. I will be joining them, because they are on just above the minimum wage, not on a living wage, and cannot afford to live in the city in which they work. A whole range of constituencies outside London have been mentioned. London and the south-east have an image of wealth, with gold pavements and so on, but there is a growing underclass in London of people in dire poverty.

The anxiety and anger we have is that in two weeks the cleaners will go on strike because they have no other option. They are trying to get their employers to negotiate a London living wage, while this week the bank bonuses will be announced. Goldman Sachs has already explained that it looks like it will have a bumper year. We are back to pre-crisis bonus levels. I raised this with the Chancellor and, to give him his due, he actually said that there is an issue that we have to address. We have been told that in one company the average bonus payment is £2.7 million per member of staff. This is the contrast we have: people in work are struggling just to maintain a roof over their heads, feed and clothe their children and have a decent standard of income. At the same time, we have the profligacy and obscene levels of bonuses returning. I think the choice was made under this Government that the poor would pay for the crisis, not the rich who caused it.

Examples have been given of the range of cuts that have been made. I will be frank: I do not know how people in my constituency survive on the income they are getting. I have no idea how they can afford to live on the minimal income that they are getting. We will have a debate in a few weeks’ time about the WOW petition and people with disabilities, who are among some of the hardest hit. However, the latest statistics show that we have 13,000 children in my borough living in poverty, and it is a relatively wealthy borough. We are a working-class area with high levels of employment and, usually, not bad levels of income, but even in my constituency we are seeing child poverty on a scale that we have not seen since the second world war, with all the problems associated with that.

One of the main problems has been touched on by others: the fact that people cannot afford a roof over their heads. House prices have gone through the roof. People cannot afford them on the incomes they are getting, but what do the Government do? They increase rents in the social sector—in council housing and social housing—and at the same time cut benefits. The argument put forward by the Government—it has some logic to it—was that if they cut benefits, somehow the landlords would stop charging higher rents, but the reverse has happened. Rents have gone up in my area. Getting a three-bedroom property in the private rented sector means spending between £1,200 and £1,600 a month, and we are not talking about high standards of property. We are just talking about the roof over people’s heads.

When people go to the council, the discretionary money that has been awarded does not meet the difference between the loss of benefits and the rents they are now being charged. What is happening, therefore—this is the irony of it—is homelessness on a scale that we have not seen for perhaps two decades and children living in bed and breakfasts again. We were promised that that would never happen again, and it is happening. Children are living in appalling conditions in bed and breakfasts, and then they are farmed out round the country, which completely disrupts their education and breaks down the connections with their wider family. That destabilises whole families as well, because people under that pressure begin to implode. It is therefore no wonder that we have family breakdown increasing in many of our areas as a result of the financial pressures that people are under.

That is the result of a whole series of reforms that have been introduced as part of an incremental development to attack the poor. Those of us on the Labour Benches should say: “No more. That’s enough now.” We are the people who invented the welfare state. We introduced it—working, yes, with Beveridge, the Liberals and others. It was not just to provide a safety net; it was to give people the opportunity to achieve their life chances. This Government are destroying that opportunity for people to thrive and enjoy the life chances that we wanted to give them.

[David T. C. Davies]

Given what the hon. Gentleman has just said, does he agree or disagree with his shadow Work and Pensions Secretary, who wants to be tougher than the Tories on benefits?

[John McDonnell]

I am not sure whether the hon. Gentleman was here under the last Government, but I was one of those who argued for a massive redistribution of wealth to tackle poverty in this country, and I will continue to argue that point. I do not think that any of the parties should get into this Dutch auction about who can be more brutal towards the poor, but from the detail of the policy being advocated by the Opposition that I have heard, it is about achieving growth, getting people back into employment, ensuring a fair system of redistribution of wealth in this country and—this is the point my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) made—ensuring that people pay their taxes. At the moment we are living in a corporate kleptocracy, where corporations steal and rob from us through tax avoidance and tax evasion. If we could have some of that back, not only could we tackle the deficit, but that redistribution of wealth could take place and we could lift people out of poverty, provide the homes they need and give them back the life chances that this Government are stealing from them.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. In order to fit the last two speakers in before the Minister and the shadow Minister speak, I am reducing the time limit on speeches to five minutes.

21:24

[Sheila Gilmore (Edinburgh East) (Lab)]

Like all other speakers, I am grateful to those who lobbied for this debate.

There is a need for some good research into what is going on—research that would very much form part of a commission. I want to give an example of research started by the previous Government that is not being conducted by this Government—in this case, research into the employment and support allowance and the work capability assessment. The last Government commissioned research into what happened to people who had been found fit for work. After three months, 22% were back in employment and 41% were on another benefit. There were still some missing people, but there was no explanation of where they were. After a year, only 23%—there was hardly any increase—were back in employment. However, 43% of those people were neither in employment nor on any other out-of-work benefits. Now 43% is an awful lot of individuals, but this research stopped so we do not know what has been going on since; we do not know whether the pattern has been consistent over the last few years. If it has been, there are a lot of unexplained outcomes in respect of people living in great poverty.

This issue is not just about people who have somehow been benefit dependent for all their lives. Professor Fothergill of Sheffield Hallam university recently gave evidence to the Work and Pensions Committee, and he pointed out that some of those most affected are couples in their 50s. Typically, people will be affected most by becoming ill at that stage in their lives, when illness really does begin to rack up and benefits for illness are most likely to be received. What happens if, say, a couple has one and a half incomes and has been comfortably off with the children grown up and a reasonable income coming in, but the main earner falls ill? There will be an immediate big loss of income because of the illness in itself. After a year, if that individual goes into the workplace activities group, which many do, they will lose even their employment and support allowance. At that stage, another £91 is lopped off their household income—and all this at a time when the costs are probably increasing because they are likely to be at home longer and have more heating bills to pay.

If this couple are council or housing association tenants, they might well have a spare room and will also be hit by the bedroom tax. The second means test applied by many councils for discretionary housing payments will probably mean that, because there is still an earner in the household—albeit probably a part-time earner—they will not qualify for discretionary housing payment. They will be deemed to have sufficient income over the absolute basic amount for them to have this extra payment. After working for 35, 40 or perhaps even more years, this couple will have experienced a huge tumble from being comfortable to being in really straitened circumstances. If they have made any savings over their working period towards their retirement, the chances are that when they reach pension age, they will have been entirely eroded, creating further problems for the future.

The irony in all this is that many of the measures introduced—I would hope that the research covered this issue—are not actually making any great savings. We have heard a lot about the bedroom tax not making much in savings, but it is not the only thing. Housing benefit payments are due to increase, which the Office for Budget Responsibility has factored into its assessment. Why? Half the expected increase—a substantial increase—is due to people in employment who will qualify for the benefit. Fewer people may be receiving jobseeker’s allowance at one end of the system, but further along the system, more will receive housing benefit. For one set of savings, there is a comparable set of costs. We have to look at that.

We are not making the savings we think we are, and I believe the same is true of the employment and support allowance. There is a big mystery here. The number of people in receipt of that benefit has gone down by far fewer than the number of people who have been found fit for work. What on earth is going on? I suspect that many people have simply come around through the system again. They were not well; they had to apply for benefit again. We are putting people through a lot of trauma and stress for very little saving.

21:29

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

I am glad to have the opportunity to say a few words. I wanted to speak in the debate to make the point that the crisis caused by the Government’s welfare reform policies is affecting constituencies up and down the length of the country and is affecting all types of constituency. My constituency comes out about average on the statistical lists of poverty, employment, unemployment and wealth in the UK. We have some areas of high wealth with wealthy individuals, but other areas, and some individuals living in the generally richer areas of the constituency, are suffering from the effects of Government policy in a way that has not been seen for a generation. That experience is evidenced by the growing demand for and reliance on food banks, soup kitchens and other outlets that provide free food. One such food bank was opened in my constituency last year, and another is under way. Another six, seven or eight organisations provide support of various kinds which enables people to survive from day to day, but, given the shortage of time, I shall not list them all.

As many other Members have pointed out today, food banks are a symptom of a wider problem. People depend on them for a host of reasons. Sanctions are one of the most important, but others are the delays and mistakes caused by all the changes and complications that the Government are increasingly imposing on those who rely on benefits, and the effects of their economic policies, such as the need for people to rely on part-time work when they want to work full-time.

Another reason is the bedroom tax. I want to say a little about what is happening in my city of Edinburgh, and also to explain why I think that a commission of inquiry would be a good way of at least trying to inject some sense into the attitudes that were expressed during DWP questions earlier today. It appears that most members of the coalition believe that numerous people living in large houses are desperately avoiding moving to smaller houses, and fighting off all the people who are trying to move into the larger houses. In fact, that is happening almost nowhere in the country. In my constituency, many people who live in under-occupied houses are in houses for which there would not be a great demand if they became vacant.

Above all, in Edinburgh and elsewhere, the number of people who could possibly qualify for smaller, one-bedroom accommodation is vastly greater than the number of such homes that are available. According to a figure that I saw a few weeks ago—and I have no reason to believe that it has changed since then—more than 3,000 people were living in under-occupied housing, according to the Government’s definition, and a further 14,000 were on the waiting list for one-bedroom houses. In that week, only 24 one-bedroom homes were available in any part of the council or the social housing sector. A commission of inquiry might at least get some awareness of the reality of the situation into the minds of Ministers and Government Back Benchers.

I suspect that when the House votes on the motion, Government Members who have not been in the Chamber for the debate will come flooding in to defeat it. Perhaps the Minister will surprise us and tell us that the Government will allow the motion to be passed, but I suspect that that will not happen. However, given that this is a Back-Bench rather than a Government or an Opposition motion, I hope that at least some members of the coalition parties will show the humanity that others have shown today. I hope that they will recognise that there is a problem whose extent needs to be assessed, and will stand along with those in the Chamber and outside who are prepared to speak up for the people who are suffering as a result of the inhumane policies of this Government.

21:33

[Chris Bryant (Rhondda) (Lab)]

I warmly congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) and the Government Members who signed the motion, not least because they have given us an opportunity to hear some of the most insightful and moving speeches that I have heard for a long time in the House. It is a shame that nearly all of them had to be made by Opposition Members because so few Government Members turned up to speak, but I am sure that Government Members had other interesting things to do. I should add that I thought that the speech of the hon. Member for Stafford (Jeremy Lefroy) was insightful as well. It had barely a partisan bone in it, and I commend the hon. Gentleman for the views that he espoused tonight.

Let me begin by listing some facts on which I hope we can all agree. We all believe that the best route out of poverty is work, that those who can work should work, that those who need help to work should receive that help, that a civilised nation cares for the vulnerable, that at times we may all need the support of the state to get back on our feet, that a strong national health service, free at the point of delivery, is a key part of getting people back into work, and that education cannot stop at 16 or at 18 or, for that matter, at 21 if people are to acquire the skills that they need in order to prosper in a fiercely competitive world.

As Labour colleagues have been referring to what we will do when we form the Government in 2015, the Minister has, on several occasions, been heard chuntering, “Oh yes, the shadow Secretary of State says you’re going to be tougher on welfare.” We are, because we know that the best way to be tough on the welfare budget is to get people into work. We are absolutely determined that we will not do what this Government did immediately on coming into power in 2010, which was, without a shred of evidence, to abolish the future jobs fund that was giving young people an opportunity. We will do exactly the opposite. We will bring in a jobs guarantee for every under 24-year-old, because we have seen what is happening in Wales where a new scheme has been brought in to replace what this Government have been doing and that has put 7,748 young people into work. Some 80% of those jobs are in the private sector and 96% of those who have gone into those jobs have then gone into full-time employment. That is being tough on the welfare budget—not being tough on the recipients of welfare, but being tough on the welfare budget—and that is exactly what we intend to do.

We all know that there are areas of the country that have suffered deprivation for decades. Those are the places—in particular, the mining, shipbuilding and iron and steel cities and towns of this country—where one industry flourished, dominated and then died. That is what many of the speeches this afternoon have been about. However, the indices of deprivation come not single spies, but in battalions. All too often, with poverty comes poor housing, poor educational attainment and poor diet, as well as high levels of long-term unemployment, disability, mental health problems, obesity, malnutrition, teenage pregnancy, ischaemic heart disease, type 1 and type 2 diabetes and also, therefore, blindness. The poor die younger and are more likely to die of their first coronary or their first stroke. They are more likely to be the victims of crime, especially violent crime. Each of those problems exacerbates the other, so we have a vicious circle of poverty with children trapped by their parents’ opportunities or lack of ambitions. In short, all too often poverty is hereditary in Britain—as hereditary as the monarchy or, for that matter, a place at Eton.

The image that those on the right would have us all subscribe to of those living in poverty is far from the truth. Often the poor work the hardest, at the least hospitable hours, with poor protection and for paltry pay. Frequently, as many Members have said, they take several jobs to be able to pay to put food on the table. They travel for hours to work because they cannot afford properties in expensive places where there are more jobs. They take pride in the ability to stand on their own two feet, so they often refuse to claim all they are entitled to or to accept charity. We should applaud them, not denigrate them.

When the Secretary of State came to Merthyr Tydfil and told everybody that the answer to their problems if they were out of work was to get on a bus down to Cardiff, he simply did not know the facts. First, there are not buses that will get people to Cardiff in time for most jobs on low pay that start very early in the morning. Secondly, if they are going to be doing shift work, they cannot possibly rely on buses to get them to work. Thirdly, there are eight people applying for every job that is available in Cardiff so the situation is not much better than in Merthyr Tydfil. Most importantly, if people are spending half of their daily wage every day on getting on the bus to work and getting back home, the likelihood is that they are not going to be able to make work pay. That is what we need to change: we need to make work pay.

There have been massive changes in welfare in this country since 2010, especially since the Government changes to welfare came in last summer. Food prices have risen far more on average than those of other goods, and that has hit many poor families. According to Which? over the last six years food prices have risen over and above general inflation by 12.6% and nearly half of consumers now say they are spending a larger proportion of their available income on food than just 12 months ago. Six in 10—60%—are worried about how they will manage their future spending on groceries if prices continue to rise, and it looks as though they will. It must surely be shaming for this country that, between April and September, more than 350,000 people—150,000 of whom were children—received at least three days of emergency food from Trussell Trust food banks. That represents a threefold increase on the same period last year and a dramatic rise from 2009-10, when just 41,000 people received food aid. Contrary to what the hon. Member for Birmingham, Yardley (John Hemming) said, the Trussell Trust has stated that

“rising living costs and stagnant wages are forcing more people to live on a financial knife edge where any change in circumstance can plunge them into poverty.”

That is precisely what the Government’s welfare changes have done.

In March last year, Ministers in the Department for Environment, Food and Rural Affairs commissioned research into food banks and promised to publish the results last summer. The Government have had the results of the review since last June and, bizarrely, have now been reviewing them for far longer than it took to write them. I do not know whether they need educational assistance to read the report and present it to the public, but it is about time we all saw the findings that they have had in their pocket since last June.

The Trussell Trust has reported rising food bank use due to the bedroom tax, and states that 35% of its clients were referred due to delays in receiving benefits. There is no way out of this; the Government cannot avoid responsibility. Yes, charities are picking up the difference, but that is not the kind of society we should be living in. On top of that, the National Housing Federation, which represents housing associations, said that a survey of 51 of its biggest members found that more than half their residents affected by the bedroom tax—32,432 people—were unable to pay their rent between April and June last year. Contrary to all the rumours put out by The Sun, the Daily Mail and The Daily Telegraph, the survey shows that a quarter of those affected by the tax had fallen behind with their rent for the first time in their lives. That is not their fault; it is the Government’s fault.

One report, the Real Life Reform report, interviewed 74 households in the north of England last July, three months after the changes came in, then again three months later. In September, it found that over a quarter of the people in the survey reported having less than £10 a week to live on once rent, food and bills were accounted for. The report also found that 37% said they had no spare cash at all, and that families were spending an average of just £23 per person a week—or £3.30 a day—on food. Those were people in work, and for those with school-age children, £1.80 of that daily allowance was going towards a school dinner. Households were spending an average of £26 a week on gas and electricity, which equated to 10% of gross income. That was in July, not during the winter months when the costs would be much higher.

Three months later, that same survey found that the number of households spending less than £20 a week on food had increased from a quarter to a third, that the number of people having no money left each week had risen to 51%—more than half—and that the average spend on food per person per day had gone down from £3 to £2.10. It also found that households were spending 16% more on gas and electricity, taking them into fuel poverty. In addition, 33% of respondents now had council tax debt as well.

The loan sharks are flourishing, the number of those in fuel poverty is rising and the number of homeless people is rising. The number of those relying on charity to feed their children is also rising, and the number of those wanting to work more hours is at a record high. And for the first time ever, the number of those in work and in poverty is higher than the number out of work. The number of those in debt, in arrears and in despair about their finances is rising. Even Sir John Major knows that more and more people this winter have been choosing between heating and eating. It feels as though a worldwide economic crunch, manufactured in the boardrooms of Wall Street, on the executive floors of international banks and on the trading floors of the City of London, has been visited on the most vulnerable in our society. Those who struggle to buy shoes for their children have paid the price of austerity, not the well-heeled. We should be ashamed; the Government should certainly be ashamed. This is why we need a commission of inquiry.

21:44

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

Apart from a short comfort break, I have sat through the whole debate, finding it very interesting. I found the tone and manner of most of it to be exemplary, and a credit to the House and the Backbench Business Committee. I will take exception with the Opposition Front-Bench team, because if they were so determined that they wanted this they could have had this debate and pushed for this inquiry during Opposition day debates last week or later in this week. They could even have signed the motion tabled by the right hon. Member for Oldham West and Royton (Mr Meacher), but they did not; there are three names on the Order Paper, but none from the Front Bench. They have suddenly decided—[Hon. Members: “It is a Back-Bench debate.] So why did we have the debate last week? What about the business next week? They have not done it.

Let us not get into the semantics of what went on but look at what happened during the debate. [Interruption.] For someone who sits there and complains about other people chuntering from a sedentary position, I must say that the hon. Member for Rhondda (Chris Bryant) is the leading expert in it. We heard contributions from: the right hon. Member for Oldham West and Royton; my hon. Friend the Member for Monmouth (David T. C. Davies); the hon. Member for Walsall North (Mr Winnick); my hon. Friend the Member for Stafford (Jeremy Lefroy); the hon. Member for Liverpool, Walton (Steve Rotheram); my hon. Friend the Member for Birmingham, Yardley (John Hemming); the hon. Member for Derby North (Chris Williamson); my hon. Friend the Member for Worthing West (Sir Peter Bottomley); and the hon. Members for North Ayrshire and Arran (Katy Clark), for Rochdale (Simon Danczuk), for Oldham East and Saddleworth (Debbie Abrahams), for West Ham (Lyn Brown), for Llanelli (Nia Griffith), for Hayes and Harlington (John McDonnell), for Edinburgh East (Sheila Gilmore) and for Edinburgh North and Leith (Mark Lazarowicz). As I say, it is a credit to the Backbench Business Committee that it listened to the Back Benchers and tabled this debate.

The contribution from the right hon. Member for Oldham West and Royton was wide ranging. I am pleased that he did not place all the blame on the coalition Government, not least because he was aware that the work capability assessments were introduced by the previous Administration, as was the Atos contract, which we discussed at Work and Pensions questions. So we inherited the assessments that are being complained about by hon. Members from across the House today, particularly those being carried out by Atos. We are working hard to improve the situation and deal with the mess we inherited. [Interruption.] I would like to know how it is possible that we are making it worse, as the contract we are working to is exactly the one we inherited. The hon. Member for Derby North, from a sedentary position, asks why. We were trapped in this because the previous Administration signed the contract. We need to make sure that the work capability assessment works as we go forward.

[Sheila Gilmore]

rose—

[Mike Penning]

I will not give way, because I do not have time.

My hon. Friend the Member for Monmouth raised the most important issue, and I am pleased that the shadow Secretary of State is here now. The shadow Minister engaged in a rewriting of history. My hon. Friend and several others alluded to the fact that the shadow Secretary of State said that Labour would be tougher than the Tories on welfare and on welfare reforms. There was no nuance about helping more people. Labour said it would be tougher than the Tories on welfare. We have saved £83 billion on welfare spending—that is the predicted saving. I would like to know where those cuts would take place if not through welfare reform. [Interruption.] The hon. Member for Gateshead (Ian Mearns) says from a sedentary position that the cuts would come through jobs, but more than 1 million people have been placed into jobs since this Government took office. That is most important.

[Lady Hermon (North Down) (Ind)]

rose—

[Mike Penning]

I will give way to the hon. Lady because she has sat through the whole debate without having an opportunity to speak, and it is a credit to her.

[Lady Hermon]

Before the Minister came into his current job, he was a very effective Minister in Northern Ireland. He will know, therefore, that in Northern Ireland we have had an increased threat from dissident republicans, who are deeply and utterly ruthless. Would it not be worth while to extend this proposed commission to Northern Ireland? I hope that those who have proposed it would support that, but that is a point that could be clarified later. If the commission were to be granted, we could have a worthwhile review of and inquiry into whether deprivation and poverty in Northern Ireland have fed into the increase in dissident violence. Would that not be worth while?

[Mike Penning]

I thank the hon. Lady for her intervention and for her comments about my time as a Minister in Northern Ireland. That means an awful lot to me. Most of the welfare reforms have not been implemented in Northern Ireland yet because they are being blocked by one particular party, so it is difficult to see how we could appraise what was going to happen in Northern Ireland compared with the rest of the United Kingdom because the welfare reforms have not been introduced there in the way that they have in the rest of the country. I do not think that the answer at this stage is to have an independent review. The Government issue huge amounts of research—very expensive research—and we need to look carefully at what is going on.

We have of course brought in the benefit cap and reformed housing benefit. My constituency has one of the largest council-run social housing stocks in the country—nearly 16,000 council properties—as well as quite a large housing association stock. I get family after family saying to me, “Why do my children have to do their homework in the corridor? Why can’t we move into a larger property.”

[Chris Williamson]

Build more houses.

[Mike Penning]

Absolutely. The hon. Gentleman’s party had 13 years to do so. The housing situation has not suddenly occurred in the last five minutes. Labour did not do it when it was in government, and yet it wants to rewrite history this evening. That is not possible and it will not happen. We need to ensure that we have fairness in the system. I have listened carefully to Members throughout the debate. The system has to be fair for both sides. It has to be fair to the people who are working and to those who are on benefit.

Earlier in the debate someone mentioned the Channel 4 programme. The idea of Channel 4 being supportive of this Government would be a shock to the system and to Channel 4. I was brought up in a working class area in north London, and, as I have said, I have two estates in the top 10% of the most socially deprived areas, but I was shocked by what I saw.

[Chris Williamson]

It was not a fair representation.

[Mike Penning]

Whether or not it is a fair representation is a matter for Channel 4. Like the rest of the country, I sat and watched the programme. I have not said anything about it, because I do not know the facts. I will go and see what is happening on the ground rather than speaking in generalisations. Channel 4 is not in any way a mouthpiece for this Government. It has been hugely critical of what we have been doing.

[Chris Bryant]

rose—

[Mike Penning]

I will not give way, because I want to make some progress. I did not intervene on the hon. Gentleman, so he will have to understand.

The hon. Member for Birmingham, Yardley made an important point about people who have moved from employment and support allowance to jobseeker’s allowance. It is enormously important that they know what benefits they are entitled to. As I said to the Work and Pensions Committee the other week, I will look carefully at the decision letter they get when they are told that their ESA has been stopped and what they are able to claim. That is a simple way to ensure that they understand the benefits they are entitled to and that families are not short of money.

The hon. Gentleman was the only Member to raise the issue of the minimum wage. The debate about what it will be raised to is taking place now. We will wait to hear what the independent review says. It is an important debate for people who are in work but require help from other benefits.

My hon. Friend the Member for Worthing West gave a wide-ranging speech. I will have to write to him about when the credit unions will be able to charge monthly interest. I have been a member for more than 12 years, and believe that the credit unions make a very important contribution to our communities. In particular, they stop that man with a threatening look from knocking at the door on a Friday night, just after pay day. All of us who have grown up on such estates have had that frightening experience. In many ways, the credit union can really help with that problem.

The hon. Member for North Ayrshire and Arran talked about discretionary payments and the fact that people have to apply again and again. There is nothing in the rules that says it should be for three months or for any other time scale. It is plainly obvious in many cases that an individual will be able to receive the payment for the long term and that the local authority should be able to rule on that. As we said at Question Time today, most local authorities are not using all their discretionary payments, and those that have can apply for extra payments under the scheme. We are looking forward to seeing how we can take that forward to ensure that we can give those assurances to local authorities. It is important that when Members go back to their constituencies they speak to their local authorities about what they should be doing, because there is no rule on the matter. My own local authority is using the three-month rule and there is no need for that in many cases. Local authorities should look at individuals rather than the numbers.

The hon. Member for Rochdale made an important speech and a good contribution to the debate, not least because he accepted from the outset that welfare reform is imperative. I was slightly concerned during his speech by the idea that if we are not careful, we might start thinking that all welfare reform will have a massive effect. In many ways, welfare reform can have a beneficial effect on people, particularly those who have been out of work for a considerable time and, thinking of my portfolio, those who have disabilities or long-term illnesses and have not been able to get back into work. For instance, the Access to Work programme is often the key to getting those people back in to work. It is important that we understand how the different schemes work and that hon. Members ensure that there is understanding in their constituencies.

The hon. Member for Oldham East and Saddleworth talked about bogus appointments. I would love to know about that and how it happened, so perhaps we can meet after the debate. It is obviously fundamentally wrong for bogus appointments to be made and for people to then be sanctioned. It would be much appreciated if she or any other hon. Member could help us with such issues.

Mr Deputy Speaker—[Interruption.] I am sorry, Mr Speaker. I apologise. I think you have known me long enough to accept that that was a genuine mistake.

The whole debate has been sensible, apart from the contribution of the shadow Minister, who is chuntering away again, ruining the quality of the debate as usual. It is important that the Backbench Business Committee can introduce such a debate. If the Opposition Front Benchers had wanted it so much, they could have introduced it in their own time. We should let the House decide this evening.

21:56

[Mr Meacher]

This has been an excellent debate, one of the best that I have attended. The evidence from all parts of the House about the impact of the Government’s welfare reforms on poverty was both compelling and systematic. With the exception of the Minister, at the end, it was relatively free of tribalism.

There was little disagreement about the need for a commission of inquiry, with an emphasis on the 4 million children growing up in poverty. The hon. Member for Stafford (Jeremy Lefroy), in a considered speech, said that the bedroom tax should be, if not abolished, at least conditional on enough social housing being built and that sanctions for technicalities are totally intolerable. I am grateful to him for saying that. We heard about the level of debt standing at 40% in Liverpool, and I am sure that the same applies in many other cities. We also heard evidence from the hon. Member for Birmingham, Yardley (John Hemming) about a range of issues that must be considered in detail, not just in terms of the framework of policy. I agree with that.

We heard a passionate speech about the housing crisis, the catastrophic drop in Government investment in housing and the price-to-income ratio that puts housing totally out of the reach of poorer people. We heard about the damaging effects of the Government’s switch—convenient to the Chancellor, of course—from RPI to CPI and that the loss of a discretionary social fund was forcing people back into the hands of loan sharks. We also heard about the DWP staff culture of looking for targets to achieve sanctions. Those are all important points.

There were significant disagreements. The hon. Member for Monmouth (David T. C. Davies) gave, I think, the traditional Conservative response, as one might expect, giving the Chancellor the overriding right to pursue an austerity policy irrespective of the impact on ordinary people. My hon. Friend the Member for Hayes and Harlington (John McDonnell) strongly opposed that because of the Government’s choice to put the burden on the poor.

I hope that all Members of the House will support the motion, because we need a commission of inquiry.

Question put.

21:59

Division 175

Ayes: 125

---

Labour: 108
Liberal Democrat: 7
Democratic Unionist Party: 3
Conservative: 3
Social Democratic & Labour Party: 2
Scottish National Party: 2
Independent: 1

Noes: 2

---

Conservative: 2

Resolved,

That this House believes that a commission of inquiry should be established to investigate the impact of the Government’s welfare reforms on the incidence of poverty.

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

On a point of order, Mr Speaker. We have just had a very important debate and a very decisive result—the House has spoken strongly, by 125 to two. I do not think that anyone could deny that this is a critically important issue. Can we therefore be assured that the Minister will respond, either now or tomorrow, in order to answer the fact that Parliament has decided and the Government should take note?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order, but it is not a matter for the Chair. If the Minister of State wants to respond, he can, but he is under no obligation to do so. [Interruption.] No, the Minister does not wish to respond. The right hon. Gentleman’s point stands on the record.

Business without Debate

Monday 13th January 2014 Commons Chamber

Speaker’s Committee for the Independent Parliamentary Standards Authority

Motion made, and Question put forthwith (Standing Order No. 118(6) and Order of 16 December 2013),

That in pursuance of paragraph 2A of Schedule 3 to the Parliamentary Standards Act 2009, as amended, Professor Monojit Chatterji be appointed as lay member of the Speaker’s Committee for the Independent Parliamentary Standards Authority, for a period of three years from 26 January 2014.—(Claire Perry.)

Question agreed to.

Oral Cancer

Monday 13th January 2014 Commons Chamber

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

22:11

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

I am particularly delighted to see my hon. Friend the Minister on the Front Bench because she understands my unusual form of English, which is really quite helpful.

I must first declare a double interest as chairman of the all-party parliamentary group on dentistry and as a very part-time practising dentist. This means that I am a member of the profession that faces the detection and treatment of the appalling disease of oral cancer. Over the years I have detected perhaps seven cases among my patients. We picked them up at a very early stage, and I believe that as a result those involved were all successfully operated on and treated without disfigurement, and survived.

I recall being called in by a colleague for a second opinion on a patient who was very well known in the media. I confirmed my colleague’s opinion that the small growth behind the lower right wisdom tooth was cancer. My colleague referred him to a specialist oral surgeon. The patient then disappeared off our horizon. He did not return for regular check-ups or go to the oral surgeon. As I said, he was a famous media personality. About two years later, news reports stated that he had died in spite of late treatment involving massive oral surgery disfigurement. As we later discovered, he had not wanted to hear my advice or my colleague’s. He went to see his GP, who gave him a bottle of some green fluid to paint on the ulcer, thus allowing the cancer to grow. This sad example indicates the first problem of oral cancer—that there is insufficient awareness among the public, among general medical practitioners, and even, regrettably, within the dental profession.

Last November, there were two cancer campaigns. The campaign on prostate cancer—Movember—caught the public imagination thanks to the proliferation of sometimes quite hideous hairy growths just under the nose on predominately male faces. The other campaign was an oral cancer awareness campaign. It was very successful within the dental profession but did not catch the public awareness. This is deeply disturbing, first, because prevention and cure is possible if the disease is found easily and early, and secondly, because of the increasing prevalence of the disease.

The latest available reports and figures relating to oral cancer do not make encouraging reading. In short, the problem is worsening each year and is set to continue to do so unless decisive action is taken on a national level. Across the globe, oral cancer is now one of the 10 most common neoplasms. About 6,000 new cases of oral cancer are reported annually in the UK, with 1,800 deaths related to the disease each year. The total number of new cases per annum has been steadily rising for the past three decades, to the extent that there are now 35% more new cases a year than 30 years ago. The problem has become so acute that oropharyngeal cancer is the fastest growing cancer in Scotland and is a similar, significant problem in the rest of the UK. To quote the British Dental Association:

“No other cancers have shown such a significant increase in their incidence. Furthermore, treatment of many cancers is showing impressive improvement in survival, but oral cancer continues to have high death rates.”

As I alluded to earlier, a key factor is late diagnosis, which brings me to my first point. Public awareness would be a huge help. Yawning is really dangerous, Mr Speaker, from a dentist’s point of view. That lump—that ulcer—in the mouth, particularly if it is painless, needs to be seen by a dentist. More dentists should be aware and look at the soft tissue, not just the teeth.

The second and third factors are tobacco and excess alcohol, particularly when the two are combined. I will not dwell on them, because the Minister, the Government and previous Governments are well aware of the detrimental health factors relating to both. Dentists have a role to play, particularly in persuading their patients to give up tobacco smoking. I suspect that the Minister will enlighten us a little further on that in due course.

The fourth factor, and the one on which I believe decisive action can be taken, is tackling the human papillomavirus. It is a very large family of viruses that infect the skin and lining of the cervix, vagina, anus, mouth and throat. There are two groups. One group—HPV 6 and 11—is relatively low risk, causing laryngeal and genital warts, while the other group carries a high risk of causing cancer. They are key in causing 13 different types of cancers, but of these viruses perhaps HPV 16 is the most dangerous.

The last figures I have quickly managed to find on new cases of HPV-related cancers in the UK are from 2009, when 7,538 females and 6,484 males were affected. In 2010, 2,016 males and 2,253 females died in the UK as a result of HPV-associated cancers, namely cervical, penile, vaginal, vulval, laryngeal and oral. In UK males, the greatest proportion of those cancers involved new cases and deaths as a result of oral cancer. In females, oral cancer is a relatively close second to cervical cancer.

The number of annual cases of HPV-causing cancers in men is rising significantly. They are not just oral cancers; they cover other areas as well. Indeed, if recent incident trends continue, the annual number of HPV-positive oropharyngeal cancers may surpass the annual number of cervical cancers by 2020.

Obviously, that trend will be affected by the success of HPV vaccines, which are advocated in this country for women but not for men. That is a little odd, because it appears that fewer men than women produce an immune response to HPV infection. HPV vaccines protect against HPV infection and disease, including cancers, in men as well as women.

Australia’s policy of vaccinating both males and females is producing herd immunity. The effect on HPV diseases, including cancers, has been quite dramatic. The last chart I happened to see showed a 90% decline in the number of patients—both men and women—diagnosed with genital warts, caused by HPV, at a Melbourne sexual health centre between 1 July 2004 and 30 June 2011.

HPV plays a role in oral cancer and it is clear that gender-neutral vaccination would lead to a dramatic reduction, over time, in a number of cancers, including oral cancer. Immunising boys and girls would achieve real herd immunity for all such cancers.

The burden of HPV-associated cancers is now almost the same on men as it is on women. Men currently face a significant and rising risk of HPV-associated diseases. I therefore put it to the Minister that it is not fair, ethical or socially responsible to have a public health policy that leaves 50% of the population vulnerable to infection. Such vaccination, combined with early detection and action on smoking and heavy drinking of alcohol, could save a huge number of lives just as we face a dramatic increase in oral cancer. I repeat that the next procurement round is in the offing: the moment and the opportunity is here now.

22:20

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

I congratulate my hon. Friend the Member for Mole Valley (Sir Paul Beresford) on securing a debate on this important issue. It is a very current one, as I responded to a debate in Westminster Hall on HPV only last week. I will return to that point.

I want to restate the Government’s commitment to making England among the best in Europe in improving all cancer outcomes, including for oral cancers. As part of that, we are committed to reducing the incidence or oral cancers, improving diagnosis rates when it occurs and of course improving outcomes for people diagnosed with the disease. My hon. Friend mentioned the fact that the earlier the oral cancer is caught, the more successful that can be.

My hon. Friend outlined the scale of the challenge and, as he said, the numbers are quite stark. In 2011, the latest year for which we have information, more than 6,000 people in England were diagnosed with an oral cancer, and in the same year, more than 1,600 people died of the disease. That is, as it were, a milestone in a significant and worrying increase in incidence since the 1970s.

My hon. Friend touched on some of the issues, and the explanation for the trend relates to changes in the prevalence of the major risk factors for oral cancer, particularly heavy alcohol consumption and smoking. It is estimated that more than three quarters of cancers affecting the upper aerodigestive tract, including oral cancers, are caused by alcohol and tobacco. There are also such factors as the chewing of betel quid, which is more common among some south-east Asian populations. That is a risk factor for oral cancer and may have contributed to the trend.

Reducing the damage done to the health of the population though smoking and harmful drinking is absolutely a high priority if we are to make progress on tackling oral cancers. My hon. Friend will be aware of some of the health initiatives that we have taken, particularly the tobacco control plan and our alcohol strategy, which we continue to pursue with some real energy.

I am grateful to my hon. Friend for raising the issue of HPV, which, as I have said, was recently a subject of interest in Westminster Hall. It is good that it is being debated so thoroughly, including in making the link to the different kinds of cancer with which HPV is associated. He will know that there is growing evidence that the human papillomavirus, which is already linked to the development of the more than 99% of cases of cervical cancer in women, is a major risk factor for about a quarter of head and neck cancer cases.

If we can reduce incidence of HPV in females through high uptake of the national vaccination programme, a reduction of other HPV-associated cancers in females and males is likely to follow, but I will pick up my hon. Friend’s good point about herd immunity. Since 2008, more than 6 million doses of vaccine have been given in the UK, with 87% of the routine cohort of girls completing a three-dose course in the 2011-12 academic year. That is one of the highest uptakes of any vaccination programme in the developed world.

I know that my hon. Friend is keen that HPV vaccination should become universal. When the Joint Committee on Vaccination and Immunisation first developed its recommendations, it concluded that should vaccine uptake among girls be high, the vaccination of boys was likely to provide little additional benefit in preventing cervical cancer in girls, which was of course the primary purpose of that vaccination programme. That result proved to be the case in the UK.

The JCVI has, however, recognised that the protection that accrues from reduced transmission from vaccinated girls under the current programme may not be provided to men who have sex with men. In last week’s debate, my hon. Friend the Member for Finchley and Golders Green (Mike Freer) introduced the idea that in some places, particularly those where a large number of people were born abroad or travel abroad, such factors are also a threat to the argument about herd immunity.

In October 2013, the JCVI agreed to set up a sub-committee on HPV vaccination to assess, among other issues, extending the programme, as a priority, to men who have sex with men, to adolescent boys or to both. The HPV sub-committee is scheduled to meet for the first time on 20 January, when it will assess currently available scientific evidence and consider what further evidence is required to advise the Committee on the suitability of possible changes to the HPV programme. Any proposals for the vaccination of additional groups will require supporting evidence to show that it would be a cost-effective use of NHS resources, as my hon. Friend would expect. Public Health England has begun preliminary modelling to assess the impact and cost-effectiveness of vaccinating men who have sex with men in anticipation of further guidance when the HPV sub-committee meets. It plans then to undertake further work to assess the impact and cost-effectiveness of vaccinating adolescent boys against HPV infection.

These are complex issues, and the development of the evidence base, including mathematical models, by Public Health England, as well as the Committee’s deliberations, will take time. That process is important for ensuring that decisions are made using the best quality evidence, so we cannot hurry it. I explored with officials the possibility of taking those decisions more rapidly, but that relates to the quality of the evidence being assessed and the necessity of building the right models. That brings with it the concerns that my hon. Friend and other hon. Members have raised about fitting in with the timetable for vaccine procurement, and on that I can give a little reassurance. Should the JCVI recommend the targeted vaccination of men who have sex with men, flexibility in the contracted volumes within the current vaccine contract may allow such a programme to be undertaken without the need for a new round of vaccine procurement, if additional vaccine is available from the manufacturer in the required quantities.

I also undertook last week to explore with officials the flexibility in our contract and the potential for extending it to give us time to negotiate different procurement arrangements in the event that the JCVI makes that recommendation for adolescent boys, who obviously comprise a much larger cohort. We are not quite certain yet, but I am fairly sure that we are getting promising signals about the possibility of flexibility in those contract negotiations. I hope that gives my hon. Friend some reassurance that if that is what the Committee recommends, we would be in a position to respond without missing an entire procurement cycle, but I will continue to look at that closely.

I want to take this opportunity to talk not just about prevention, but to remember the importance of rapid diagnosis. My hon. Friend graphically illustrated the tragic consequences of late diagnosis or of an early diagnosis being ignored. With early-stage diagnosis, five-year survival rates are more than 80%, which is very good by the standard of these things. Clearly, doctors and dentists have a vital role to play. Since 2005, the “Referral Guidelines for Suspected Cancer”, published by NICE, have supported GPs in identifying symptoms of oral cancer and urgently referring patients. That guidance is currently being updated.

Furthermore, all dentists are now aware that patients presenting for dental care is an opportunity—quite rightly, as my hon. Friend said—to assess any symptoms that might suggest oral cancer and refer them if appropriate. A new patient pathway being piloted in 94 practices—he might be aware of this—includes an oral health assessment requiring dentists to examine the soft tissue of the mouth; assess a patient’s risk factor in relation to oral cancer; and offer advice on lifestyle changes. Given what we have said about the relevance of lifestyle to the potential for developing oral cancer, that is very important. Those pilots are under way, and a great deal is being learned from them.

Once a cancer has been diagnosed, both dentists and GPs can use an urgent referral pathway to ensure patients get rapid treatment. The latest data showed that 95.5% of patients urgently referred with suspected head and neck cancer, including oral cancer, were seen by a specialist within two weeks, which is excellent progress. To ensure that patients get appropriate treatment, NHS England published a service specification for head and neck cancer last summer. This was based on NICE guidance and set out what NHS England expects to be in place for providers to offer evidence-based, safe and effective services.

The Government have committed £23 million to the radiotherapy innovation fund, which has supported radiotherapy centres across England to deliver increased levels of intensity modulated radiotherapy. That is a more accurate form of radiotherapy that reduces the risk of patients with oral cancers suffering side effects such as permanent dryness of the mouth as a result of treatment.

There is good news on research that I would like to relay to my hon. Friend. The clinical research network of the National Institute for Health Research is currently recruiting patients to 30 studies into head and neck cancer, of which five are focused on HPV-associated cancer. The NIHR also funds 14 experimental cancer medicine centres across England jointly with Cancer Research UK. Two of the centres have a disease focus on oral cancer.

I thank my hon. Friend for raising this subject. It is good that it is being brought up regularly in the House. That will illustrate to the JCVI how much interest Parliament is taking in its work as it deliberates on the potential extension of the HPV programme. I hope that he has found the debate helpful and is reassured about our commitment to reducing the incidence of oral cancer and improving the outcomes for those who are diagnosed with the disease.

Question put and agreed to.

22:31

House adjourned.

Petitions

Monday 13th January 2014 Petitions

Monday 13 January 2014

The Appeals Process for the Removal of Capacity in Legal Proceedings

Monday 13th January 2014 Petitions

The Petition of Sarah Matthews, a mother living in England,

Declares that the Petitioner’s barrister, Francesca Wiley, of 1 Garden Court Chambers without having met or being formally appointed by the Petitioner and merely on reading documents created by the London Borough of Sutton applied to the court to have her mental capacity to instruct a solicitor removed because the barrister believed she was subject to querulous paranoia. Additionally, her solicitors Russell & Co informed her prior to her meeting her barrister that they had jointly decided that she did not have capacity. Furthermore the solicitors refused to be instructed at this point.

The Petitioner then contacted the hon. Member for Birmingham, Yardley who put her in touch with Sam Smith, who is a McKenzie Friend specialising in capacity issues. Sam Smith assisted her in successfully retaining her capacity to instruct a solicitor. This, however, involved paying an experts fee of £1,650 for a full assessment, followed by a further £1,500 for the expert to attend court and provide the written report. The court ordered that the Petitioner should pay the cost of this experts report if legal aid refused to pay it, which legal aid duly refused to do.

The Petitioner recognises that there is no legal support for those people who wish to argue against a removal of capacity and believes that there is a conflict of interest when legal advisers can apply to remove the capacity of their own client whilst retaining the matter when a litigation friend is appointed.

The Petitioner believes that it is difficult for someone to believe the inequality of arms when a litigant’s own legal advisers start acting against a litigant until they have experienced this.

Furthermore the Petitioner is being refused access to her files by the London Borough of Sutton. Records appear to have been altered with the intention of preventing disclosure under s77 of the Freedom of Information Act and without these she is unable to correct inaccurate information held.

The Petitioner therefore requests that the House of Commons Justice Committee investigates the procedures that are used to remove capacity in the English and Welsh courts and calls for the provision of independent legal assistance for those people who wish to resist the removal of their capacity.

And the Petitioners remain, etc.—[Presented by John Hemming, Official Report, 27 November 2013; Vol. 571, c. 5P.]

[P001302]

Observations from the Secretary of State for Justice:

An individual’s capacity to litigate is assessed under the principles of the Mental Capacity Act 2005. In particular, that Act states a presumption that a person must be assumed to have capacity unless it is established that he lacks it. The philosophy of the Act is to maximise the scope for people to make their own decisions and for an individual to be treated as unable to do so only if all practicable steps for assisting him or her to make the decision have been exhausted. The courts had already adopted the presumption that all adults are competent to manage their property and affairs, and accordingly that it is for the person alleging incapacity to displace that presumption and to prove incapacity, not for an adult to prove his own capacity (the leading case prior to the 2005 Act being Masterman Lister v. Brutton [2002] EWHC 417).

The assessment of litigation capacity is a matter for the court to decide in the individual case—it is categorically not a decision for other parties nor for the affected party’s lawyers. Given the presumption of capacity, the courts must consider the matter with great care, and in particular must do so on the basis of evidence, including medical evidence. The affected party must be notified of any proposal to question their capacity, and is entitled to present (or instruct lawyers to present) their case on the point to the court, calling such evidence (including medical evidence) as is appropriate. They are of course also entitled to challenge the evidence presented against their position in the usual way, and a decision by the court that they lack capacity would be capable of appeal, where appropriate, on the usual principles and procedure. As with any other issue in proceedings, the affected party can simply concede that he or she lacks capacity, but that would be a decision only the affected party is entitled to make.

Litigation capacity is a fundamental concern and the courts have been very clear as to the importance they place on the right of an individual to conduct litigation in their own right. In particular, capacity is considered in an “issue specific” way, so that it is accepted that a person may not have capacity to conduct one kind of litigation, but this does not prevent them being found to have capacity regarding the conduct of another sort of case subsequently—the issue will be looked at in the context of the specific case.

Where a party lacks capacity, this has very important consequences requiring not only the appointment of a litigation friend for the protection of their own interests, but to protect other parties too. First, if a party does in fact lack capacity, it is important that they are able to continue asserting their rights through the courts (or indeed defending their position) and do not lose that opportunity through the lack of capacity. Therefore, the appointment of a litigation friend, as a consequence of a finding by the court of a lack of capacity ensures that the affected party’s case can be properly litigated despite the lack of capacity. It should be noted that a person may not be appointed as a litigation friend by court order unless they satisfy the court that (a) they can fairly and properly conduct the proceedings on the part of the affected party, and (b) they have no adverse interest to the affected party.

Secondly, if it subsequently transpires that one of the parties to litigation did not have capacity to conduct it, that party will not be bound by the outcome. That would be highly prejudicial to other parties, who will have gone to the expense and trouble of the litigation only to find that the result was not binding (whether the case settled or had to be determined by a court). For this reason it is important for the proper administration of justice that issues of capacity can be raised before the court and determined at the earliest possible stage.

For these reasons, it is perfectly proper for the affected party’s own legal team to raise any concerns they have as to that party’s capacity with the court (and indeed, having the most knowledge of that party they are likely to be best placed to do so). Other parties may also raise the issue, or the court may deal with it on its own initiative. Raising the issue is of course a very different matter from having any power to determine it, this being for the court alone.

The Government cannot of course comment on the individual circumstances of the Petitioner’s case and the questions raised about the conduct of her legal team. However, the conduct of lawyers is regulated by their respective professional regulatory bodies. Their rules of professional conduct strictly regulate the duties lawyers have to their clients, and when they are property allowed to decline instructions, or must consider themselves to have a conflict of interest such as to be unable to property represent the client. A failure to abide by professional rules in these matters renders the lawyer liable to disciplinary action by the relevant regulatory body, which can have very serious consequences for the lawyers concerned.

In the light of the existing safeguards as described above and including the professional duties and discipline to which lawyers are subject, the Government are of the view that there is sufficient legal assistance in these cases, but will keep the position under review.

Written Statements

Monday 13th January 2014 Written Statements

Monday 13 January 2014

Departmental Minute (Gift of Equipment)

Monday 13th January 2014 Written Statements

[The Secretary of State for Defence (Mr Philip Hammond)]

It is the normal practice when a Government Department propose to make a gift of a value exceeding £300,000, for the Department concerned to present to the House of Commons a minute giving particulars of the gift and explaining the circumstances; and to refrain from making the gift until 14 parliamentary sitting days after the issue of the minute, except in cases of special urgency.

Subject to no objections being received, I intend to authorise a gift of equipment as part of the United Kingdom’s contribution to the international effort following United Nations Security Council Resolution 2118, which requires Syria to complete elimination of all chemical weapons material in the first half of 2014. I have today, in accordance with the usual parliamentary procedures, laid a departmental minute on the gift.

In support of the resolution, the United States has made a formal request for the United Kingdom to assist in the elimination of Syria’s chemical warfare stockpiles through provision of specialist equipment. The “gifting” in this case is therefore to the United States Government, who are taking the leading role in the international effort to support the UN and the Organisation for the Prohibition of Chemical Weapons (OPCW) and making a substantial financial investment to this end. The US will use a field deployable hydrolysis system to render the chemical warfare agents unusable as weapons; the proposed UK equipment package will allow stored chemicals to be processed at a higher rate.

The UK contribution comprises a training package and specialist equipment to support the neutralisation of chemical warfare agents, as well as sufficient spare parts and consumable items. The total cost of the proposed UK contribution will depend on the level of consumables required but will be in the region of £2.5 million, which can be met within existing cross-Whitehall funds. This capability will be pivotal in providing the international community with the capacity to support the Organisation for the Prohibition of Chemical Weapons in its mission to destroy the Syrian chemical warfare agents within UN dictated time scales. The UN schedule for destruction is necessarily ambitious and the UK system will enable the US field hydrolysis teams to maintain a higher throughput of materials into their system. The US approached the UK to support this primary activity from our domestic industry as they would not have been able to procure the device themselves within the time frames set by the UN/OPCW mission.

The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute was laid before the House of Commons, a Member signifies an objection by giving notice of a parliamentary question or a motion relating to the minute, or by otherwise raising the matter in the House, final approval of the gift will be withheld pending an examination of the objection.

Drug Policy

Monday 13th January 2014 Written Statements

[The Minister for Crime Prevention (Norman Baker)]

The coalition Government has decided to opt out of the European Commission’s proposals for a regulation and a directive on new psychoactive substances.

The proposals would, as drafted, fetter the UK’s discretion to control different new psychoactive substances, binding the UK to an EU system which would take insufficient account of our national circumstances. In addition, the Government agrees with the House of Commons’ and House of Lords’ reasoned opinions that the proposals infringe the key EU principle of subsidiarity.

We also strongly dispute the evidence base stated in the EU Commission’s impact assessment which estimates that 20% of new psychoactive substances have a legitimate use. While the proposed new psychoactive substances directive cites a title V legal base, the proposed new psychoactive substances regulation does not, as drafted, recognise the right of the UK to opt out. We will remain a full and active participant in the European Union negotiations to shape the proposal and defend our national interests.

New psychoactive substances pose a significant global challenge and the decision to opt out should not in any way be considered to diminish our commitment to tackle this issue. As I informed Parliament on 12 December, the coalition Government is conducting a review into new psychoactive substances, and alongside our programme of work, we are looking at a range of options including legislative ones to enable us to deal with the dangers many of these substances present even more speedily and effectively. The international comparators study begun by my predecessor has been useful in identifying different approaches adopted around the world and those approaches are being examined as part of this work.

Grand Committee

Monday 13th January 2014 Grand Committee

Monday, 13 January 2014.

Pensions Bill

Monday 13th January 2014 Grand Committee

Committee (4th Day)

15:30

[The Deputy Chairman of Committees (Lord Faulkner of Worcester)]

My Lords, I am obliged to say that if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes or as soon as members of the Committee are able to get here.

Schedule 13: Abolition of contracting-out for salary related schemes

Amendment 43 not moved.

Amendment 44

Moved by

[Lord Freud]

44: Schedule 13, page 76, line 25, at end insert—
“Pensions Act 2004 (c. 35)In section 258 of the Pensions Act 2004 (pension protection on transfer of employment), in subsection (2)(c), for sub-paragraphs (i) and (ii) substitute “complies with prescribed requirements”.”

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, before I speak directly to the subject of the amendment tabled in my name, I would like to address some of the points raised in debate last Wednesday while we were still considering amendments to Clause 24 and Schedule 14. I will start by acknowledging the points made in Wednesday’s debate about the need to ensure that statutory mechanisms to amend schemes are used with care. We have not chosen to apply an override lightly and we recognise the need to ensure that the extent is tightly defined.

The primary legislation sets out the key limits on the scope of the changes under the override, but much of the detail that deals with this, including how the extent of the changes is limited, will be set out in the technical regulations that we have been working on with trustees, scheme managers, the actuary profession and pension lawyers. We intend the regulations to set out a methodology and the assumptions that will apply to the calculation of the lost rebate.

We also intend to set out in the same way how the impact of changes to scheme rules are to be valued so that the actuary can certify that the employer is not recovering more than the lost national insurance rebate. We will of course conduct a full public consultation before these regulations are laid. As I said in my letter to Peers, if it would be helpful I would be happy to offer a separate briefing meeting with officials before Report. This will allow us to go through our thinking in detail in a way that is not possible in debate or correspondence.

I also want to make clear that we do not see use of the override as a default position for employers. We expect the override to be used by employers only as a fall-back position where they need to offset the costs resulting from the end of contracting out and have no options available other than closing the scheme. As several Lords pointed out, there are long-standing and established ways in which employers work with trustees to make changes to schemes when required. The noble Lord, Lord Browne, when paraphrasing the Pensions Minister, said:

“The strong incentive, therefore, is … to have a mature conversation with the trustees in order to reach an agreement”.—[Official Report, 8/1/14; col. GC 427.]

The Government have every expectation that, in the majority of cases, employers will do that and trustees will fully engage.

However, employers have told us that without the override, some of them will have few or no options available to them because such agreement cannot be reached or because scheme rules will not allow it. They tell us that this will force them to close their schemes. Some trustees have told us that without the override, they will find it difficult to agree changes. We therefore believe that the override is necessary to avoid schemes being closed, even though we believe that in most cases employers and trustees will be able to explore other options. As employers and trustees can be expected to discuss scheme changes as a matter of routine, and as it is in their interests to do so, we do not believe that those discussions would be facilitated by overlaying legislative requirements concerning the content and time limits of consultation. That is why we have not provided for that.

The noble Lord, Lord Browne, also asked whether the changes had been discussed with employers and, especially, small businesses concerning the impact of the increases to national insurance that they and employees will have to pay on the ending of contracting out. In particular, what would be the impact of large numbers of employees leaving schemes because of the increases in contributions? During the development of our policy we have engaged with a large range of employers, including the British Chambers of Commerce and the Federation of Small Businesses. Small businesses expressed no particular concern on the ending of contracting out. When we consult on our regulations, we will of course ensure that we gather views from employers of all sizes.

I turn now to scheme members. Notwithstanding the potential for increased contributions, members of defined benefit schemes will continue to get good-quality pension provision. Our expectation is that members, as demonstrated by the low opt-out rates with automatic enrolment, will choose to remain in their schemes. Our communications strategy will seek to ensure that both employers and employees are properly supported through this change and that both parties understand why the changes are taking place and what options and outcomes are available to them.

As to whether the override regulations should follow the negative procedure, I recognise the desire of the Committee to ensure proper scrutiny of the regulations. There is just over two years until the end of contracting out. To ensure that employers have adequate time to consult with actuaries, trustees and members about any potential changes, regulations need to be finalised as soon as possible. We are working hard to complete the regulations. However, these are complex provisions that require us to have extensive discussions with employers and trustees during and after a consultation period before we can get them right. Based on previous experience, we do not expect a final version to be ready to present to Parliament until May or June.

Our concern is that, with the affirmative procedure, we would not be able to secure time for a debate in both Houses before the Summer Recess. This would potentially delay the point at which employers can start to plan with confidence until October this year, just 18 months before contracting out ends. So, while recognising that the negative procedure does not allow Parliament the same level of scrutiny, it will mean that employers and schemes have longer to consider and consult on any changes. We believe that, on balance, this is the right approach.

The noble Lord, Lord Browne, specifically referred to the power in Clause 24(8) to extend the five-year window in which the employer override can be used. I will make clear that we think it important that there is a strict time limit on when the override can be used, which is why the Bill repeals the relevant provisions of Schedule 14 after five years. We fully expect those employers who wish to employ the override to have done so by 2021. However, we recognise that, in limited circumstances and given the complexity of some schemes, some employers may find it difficult to meet that time limit; for example, if several diverse employers have to agree on changes to a multi-employer scheme.

We therefore think it is vital that the time limit can be extended if absolutely necessary, but we also think that the extension of an existing time-limit period should not require the affirmative procedure when using the power would only allow employers otherwise prevented from using the override to do so. The power does not allow us to alter the way the override works or to extend its scope—only to extend the window in which employers can use it. As such, I do not believe the affirmative procedure would be appropriate. I apologise for the length of my contribution to the debate, but I hope that I have helped to reassure noble Lords on the issues that were raised last time we met.

I turn to Amendment 44 to Schedule 13. As I said when we last met, the abolition of contracting out is a natural consequence of the implementation of the single tier. With the ending of the additional state pension, there will no longer be anything to contract out of. Employers who contract out of the additional state pension must provide their scheme members with pension benefits that are broadly equal to, or better than, the benefits they would have received had they remained contracted in. To do so, they must satisfy the statutory standard set under Section 12A of the Pension Schemes Act 1993.

This is a consequential amendment to existing legislation to remove the reference to this statutory standard, as the standard will no longer exist once contracting out has ended. The amendment is to the provision for pension protection when someone transfers employment under TUPE regulations. For future transfers, and those who have already transferred, the intention is that regulations will ensure that employees will receive or continue to receive the same protection of their pension rights as they currently enjoy. I beg to move.

[Lord Whitty (Lab)]

My Lords, I am grateful to the Minister for giving in his opening remarks a reply wider than the amendment before us merits. I have no particular objection to the amendment, in so far as I understand it, but a few issues were raised in the debate last week that I do not think the Government have yet fully answered, even given the Minister’s speech today.

We have a difficult situation here. Everyone understands that contracting out has to cease in this respect, but the way in which it is done is vital. The Minister referred to the measures for private sector occupational schemes being tightly constrained by technical regulations. They definitely need to be tightly constrained because the Bill provides the ability to override trustees in all circumstances, to avoid any form of negotiation, and to place the full cost of any replacement of the contracting-out benefit on the employees. The cost of contracting out will jeopardise the solvency and therefore the future of many of these schemes. As we discussed at some length, and as was pointed out by my noble friend Lord Browne in particular, there is also the question of statutory protection in some circumstances in certain fairly significant schemes.

The Minister continues to justify doing all this on the basis of a negative resolution procedure. This is quite a revolution that will be imposed by this statute on private sector occupational pension schemes. There is not even, for example, a provision that states that there should be no retrospection. The whole principle of pension scheme regulation is that at any given point, benefits accumulated by an individual until that point will be frozen, even if changes are made by the trustees, by statute or whatever. That is not written into Schedule 14, as far as I can see. We need some reassurance on that.

The wider point is the one I raised last week. Where do the Government think we are going on private sector occupational pension schemes? The Minister said—perhaps not with relish; I would not put it quite like that—that it was a matter of inevitability that the decline in the number of people covered by defined benefit schemes had already reduced from more than 2 million to 1.6 million, and that the figure was expected to be roughly 0.9 million in a couple of years’ time. The Government seemed to regard that with some complacency. Of course changes will have to be made to those schemes, but it is not right to say that this imposition will have an effect only on defined benefit schemes, because the lack of trust in the future for any form of scheme is affected by the way that the Government can change solvency rules and the prospects of this scheme so drastically.

I am grateful to the Minister for offering us a meeting between now and Report. We will probably wish to take up that offer, and some schemes may wish to write to the Minister, but my point is that it is extraordinary that the Government seem to be relaxed about the prospect of the whole occupational pension scheme sector being undermined without any serious guarantees to beneficiaries or a clear strategy as to where we are going on the pensions scene.

The proposal is even odder coming from a Conservative-led Government, because these private sector schemes allow individuals to provide savings for the whole of their working lives. They are a way of providing security in retirement. They are a form of collaboration between employees and the employer in providing that. They defer pay in a way that, because it is in the pension pot and not in the pay packet, reduces inflationary pressures. Of course, they also create funds that will be the long-term investors in our business and industrial performance.

15:44

I cannot quite understand where, from a Conservative Party point of view, there is something wrong with that. We face the prospect in 20 years’ time of having everybody in the state scheme and very few people, except some highly privileged ones, in the private sector at least, in an occupational pension scheme. I would not have thought that that was the vision that this Government really wanted. It is certainly not one that I want.

Occupational pension schemes have provided an enormous degree of security which, up until 30 years ago, ordinary working people could never expect to achieve. It is time the Government took a step back from this and looked strategically at it. Therefore, if we have a meeting, I hope that we will look more widely than the precise terms of this clause, these amendments and the potential technical regulations that will come from them. Certainly, I would look forward to that.

I am also grateful for the Minister’s offer to talk to people on the public sector pension side. I know he is going to have a meeting with the LGA tomorrow, which I very much welcome. I am sorry I cannot be there myself. Public sector pension schemes may or may not survive in the future, but the impact of this on private sector direct-benefit schemes is lethal, and trust in all forms of scheme is being seriously undermined. There is a very serious issue underlying the changes made via Clause 24 and Schedule 14, which we have not fully addressed in Committee; perhaps it is not possible to address it fully in Committee. Certainly, the Government need to think about it and so, indeed, do the rest of us.

[Baroness Drake (Lab)]

I thank the Minister for taking the opportunity to address some of the issues we were concerned about—we ran out of time, in effect—in our previous Committee session. My major concern in this debate has been the sufficiency of protections when a statutory override is given or is exercised. It sets a precedent and I am sure that this will not be the last statutory override we are going to see in the pensions arena over the next three or four years, given some of the agenda items we know are coming our way.

I am genuinely concerned that what is proposed or what we can see is weak. The Minister said that he expected that the override would be used in exceptional circumstances. To an extent that is true, because if the sponsoring employer does not need, as a requirement of the scheme, to get trustee consent, there is no need for a statutory override. I had conceded that point in my opening comment. Of course, there will be a need for statutory overrides where the scheme’s rules do not allow what is being proposed on the recoup arrangements, or where trustee agreement is required and the trustees do not want to give their consent.

There are expressions of hope that somehow this consultation will take place and everybody will act appropriately and only in extremis—having gone through due process but finding barriers in the way—will the employer be able to invoke the statutory override. Of course, the Minister has no idea how employers will behave in practice in individual schemes. One hopes that they will all consult, but some may be in a hurry and some may simply see that they are not required to consult or gain trustee consent. A statutory override is being put in the Bill without, as far as I can see, an explicit requirement to consult—merely an expression of hope from the Government that it will take place. That worries me deeply.

The other area about which I remain concerned is the fact that the regulations will still be subject to a negative procedure. Again, we face key issues about the value of what the employer can recoup, and this would be setting a precedent on a significant issue. The Minister conceded that these are complex issues, and that is right. In multi-employer schemes, if the decision is taken to amend the protected order status for certain employees if there are shared cost arrangements, one can see the multiplicity and complexities that could arise. They would arise anyway, but they will arise.

We have no clear indication from the Government about how they will value what it is that can be recouped. As I asked when speaking the other day, is it the net or the gross loss? Will it be crystallised in terms of the 2016 value of the rebate? These are quite significant issues. On one level, setting out some actuarial assumptions in the regulations may be a good thing, although we would perhaps want to see the actuarial assumptions first. But we have no way of seeing them and when we do, the regulation will be subject to the negative procedure.

I know that the Minister said that there would be a full consultative exercise. Consultative exercises are important and I do not wish to detract from the importance of their taking place, but we all know that they can be dominated by organisations that have the capacity, the means and the interest to dominate them. I just hope that in the consultation exercise fair regard is given to the views of employees and trustees.

15:52

Sitting suspended for a Division in the House.

00:00

[Baroness Drake]

I was drawing to a close. I have a final point on the negative procedure. In response to my suggestion that there could possibly be time limits on consultation in order to meet the spirit of what I aspired to achieve before the constraint of April 2016, the Minister said that seemed too prescriptive and asked why one would want to put constraints on the consultative process. It seemed rather contradictory to say that one cannot go for negative procedures because affirmative procedures take too long and could push up against the efficient way in which employers could adjust in time for April 2016. If the balance were a trade-off between defined periods or timetabled periods of consultation with the employers and the opportunity to deal with the regulation by affirmative procedures, it would be fair.

[Lord Browne of Ladyton (Lab)]

Like my noble friends, I am grateful to the Minister for engaging more generally with the issues of statutory override in his remarks in support of Amendment 44. That has been of some assistance to the Committee. It is obvious from the engagement he has already had with my noble friends that they believe that to be the case. I, too, wish to be associated with the words of thanks to the Minister for the offers of further briefing and engagement. They will be taken up.

Before I take advantage of his generosity to ask him a few additional questions, one of the advantages of anticipating that he would do this—because he was gracious enough to indicate that he was prepared to do it—was that I was able to read the official record of the previous debate we had in Committee, and there are one or two things that occurred to me that he could expand upon.

Before I turn to that, I shall deal somewhat formally with government Amendment 44, which I accept is a consequential amendment. I have to say—I do not expect the Minister to engage very fully with this—that reading the statutory provision which he seeks to amend, the section of the Pensions Act 2004, I am slightly at a loss to understand why the amendment is necessary. It makes the precise provision more elegant, but I am not sure that it changes much of the content. It is genuinely consequential. Section 258(2)(c)(ii) already contains these words, although they are further qualified.

In the more general debate I shall try to be complementary to the points already made and not go back over the issues that my noble friends have addressed, although I have some notes here which are similar to some of their observations. I turn first to the issue of whether it is appropriate to deal with the regulations anticipated by these provisions by affirmative procedure in your Lordships’ House and in the House of Commons, or by negative procedure, and consequently whether it would be appropriate to deal with the limited issue of the extension of the period by negative or affirmative procedure. It seems to me, first, that it is improbable in the extreme, given the way the Minister has described these regulations in terms of their comprehensive nature, their complexity, and the difficulty associated with understanding them, that they will not be debated in some form in both Houses. It is unlikely that there will not be a desire to engage with some aspects of them to—at the very least—achieve some further clarification.

My second point to the Minister is that it seems to be counterproductive to the argument that negative procedure is appropriate to go to such length to explain just how complicated the regulations are. It seems to me that the more complicated the regulations are, and the more the primary legislation has to be supplemented by complicated regulations, the weaker the argument for doing this by negative procedure becomes. I suspect that that is why, reflecting on the Minister’s words, he referred again to the issue of parliamentary time. With respect to the Minister, getting parliamentary time in our current Parliament is the weakest argument possible.

I am struck by the number of times the House of Commons rises before what I consider to be its normal rising time. I do not know whether that is a function of the fact that the coalition Government have run out of agreement about what they can legislate on —that may happen; it is a perfectly natural thing with coalition government—but I am also struck by how much time is spent in the House of Commons debating what is now called “Members’ Business”. As far as your Lordships’ House is concerned, I am struck by the fact that we are all expecting—and I think we will see—that an extraordinary amount of time will be found to debate a Private Member’s Bill over the coming weeks.

If regulations are debated in the normal way, it seems to indicate an expectation that there will be no great competition for parliamentary time between now and the general election. In fact, I go so far as to suggest that the business managers of the respective Houses may have difficulty in filling the time they already have, so I do not think the argument about parliamentary time is all that strong. If the Minister is to continue to promote the idea that these regulations—complicated, difficult, comprehensive and substantial as they are—are still best dealt with by negative procedure, then, with all due respect, I think he will need better arguments than those he has already deployed.

Secondly, perhaps I may take advantage of the opportunity to debate these issues and ask the Minister to give some clarification about information that he gave us when we last debated these issues about the effect that the abolition of contracting out will have on people’s expectations. Early on in his contribution to our last Grand Committee, he came to engage with the issue of trustees and pension funds and their responsibilities. I will quote him fully, not in short. He stated:

“Referring to those private sector employees who are contracted out immediately before implementation, who reach state pension age in the first decade of single tier, around 75% of them will receive enough extra state pension to offset both the increase in national insurance contributions that they will pay over the rest of their working lives and any potential adjustments to their occupational pension schemes”.—[Official Report, 8/1/24; cols. GC 430–431.]

That is an argument that was deployed by the Pensions Minister in the House of Commons, too, when addressing that issue. It is clearly designed to allay, and does allay, the concerns of a significant number of people about the denial of their expectations. However, in col. GC 433, when the Minister was discussing the issue of protected persons under statutory override, he deployed a similar but different argument. I shall quote it to him, because I am interested in the difference, and what it actually means. He said:

“We also have to factor in that the design of the single tier reforms means that those with a long history of contracting out will in most cases build up significantly more state pension. Around 75% of people in the private sector who pay higher national insurance contributions and reach state pension age during the first two decades following implementation will receive enough extra state pension over their retirement to counterbalance the increase in national insurance contributions”.

He went on to say:

“This is a very complicated issue with many different and conflicting interests”.—[Official Report, 8/1/14; col. GC 433.]

But we know that.

Were these different ways of saying the same thing, or were they different things—and, if so, what is the difference? Why does he say “two decades” in one case and one decade in the other, and why is there a reference only to counterbalancing the increase in national insurance contributions in one while there is a reference to eventual benefits in the other? It may not be easy for the Minister to answer that immediately, and I apologise if it is not, but I would be interested to know whether he intended those two things to mean the same—and, if not, why there is a difference.

On the issue of protected persons, in col. GC 433, the Minister addressed my question about the defeated expectation that the decision that the Government promised following the consultation would be made clear to Parliament. He told the Committee that a decision following the consultation about protected persons would be made as soon as possible, and that when it was made, Parliament would be informed. But what he did not say was important. The Pensions Minister in the other place said at one stage that it would be done in the summer of 2013—and we know that that is now long gone. No matter how generous one might be with Governments who use seasons to give an indication as to when something might be done—and having been a Minister myself I know how wise it is to do that sometimes—in no one’s view are we still in the summer of 2013.

The Pensions Minister gave both the Standing Committee and the whole House of Commons to believe that, at the very worst, a decision may be made when the Bill was still before Parliament. That is not a phrase the Minister used. Was that deliberate or can he repeat the phrase? It is important for the 60,000 people who consider themselves to be protected persons. Their expectation is that the decision and therefore some engagement with the consequences of that decision will still be a live issue while the Bill is still before Parliament.

16:15

Finally, I fully accept that it is the Government’s intention that this override power will be used in extremis and that the very existence of the pension scheme is at risk. I understand that. My noble friend Lady Drake indicated that that may not necessarily be an approach to the use of the override that an employer may use; that is a point she made more strongly than I could. But if either the members of the scheme or the trustees come to the view that an employer has exceeded the limitations of the statutory power of the override, how do the trustees or the members of the scheme challenge the employer? Or is the Government’s intention—this is one possible interpretation of the legislation—that there will be no challenge if the employer holds a certificate from an actuary that confirms that the employer’s use of the power is compliant with the extent of the statutory power? Is there no method of appeal or challenge open to them? If there is, is it is expected that the expense of that, which could be significant, will have to be found by the members or trustees of the existing pension fund?

[Lord Freud]

I am grateful to noble Lords for their observations. I shall first take the query from the noble Lord, Lord Browne, about whether Amendment 44 is needed. I am conscious of his forensic skills in looking at particular bits of legislation in this area, and I therefore take his warning seriously. What it does is to remove a defunct reference on which legislation is worded. The default test is to meet the statutory standard. Actually, the legislation could work without this particular amendment, but it is confusing to those applying legislation and would leave an out-of-date reference on the statute book. The noble Lord, as usual, has picked up something quite clever.

He also picked up another clever thing: that I mis-spoke about my decades. I should have said two decades in each case, so I am pleased to correct that, and impressed that I was picked up.

On the negative procedure issue that the noble Lords, Lord Whitty and Lord Browne, and the noble Baroness, Lady Drake, mentioned, at this stage I do not have anything to add except to say that we are genuinely concerned about timing if the affirmative procedure is used. But that may be something we have a chance to discuss in our briefing ahead of Report.

On the question from the noble Baroness, Lady Drake, about the override being net or gross, as I mentioned in my letter on Friday, the intention is that the current rebate rate of 3.4% will be used for these calculations. Without reform, this rebate would change over time, but it is impossible to predict what would happen, and therefore creating a net value for the rebate in future years would be impractical.

[Baroness Drake]

I shall desist from arguing that point, as we are going to have a meeting, but it is such a wrong approach because it is an unexpected premium for employers. You can have net at the employer level and at the aggregate level—what employers would have to pay taking into account taxation and tax relief—as well as how you set the figure for NI overall. Individual employers would have been able to set the cost of the additional NI against their tax liabilities.

[Lord Freud]

I think my answer stands. It is gross, not net.

[Baroness Drake]

We are going to have another meeting, but the effect of what the Minister has just said worries me. Employers will be allowed to recoup the value that is crystallised in 2016, but everyone knows that if there had not been changes the post-2016 value would have gone down. In addition, the employer’s NI charges are an expenditure that can be taken into account and set against tax. If those two elements are not built in, is that not a little unfair in term of the rules for recoupment—a little imbalanced?

[Lord Freud]

I do not think that I am in a position to say anything further, but we will pick this up later and if we cannot satisfy the noble Baroness at that stage, I will have to write very specifically on that matter and the tax implications.

[Baroness Drake]

It goes to my point about negative regulations. We just do not get the opportunity to address these issues because they are not drafted.

[Lord Freud]

I hear the point. Clearly we will be looking at it some more.

On the point made by the noble Lord, Lord Whitty, about whether the override can be used for retrospective changes, the answer is no. That is contained in paragraph 3 of Schedule 14, which prohibits changes that might adversely affect subsisting rights; that is, rights to benefits already accrued.

On the noble Lord’s point about whether this undermines schemes, the override has been introduced precisely so as not to undermine schemes. Employers have told us that without the override, they would close schemes; the override is there to help them find ways of avoiding that.

On the protected persons question from the noble Lord, Lord Browne, I agree that it would be most unusual if the Government were not able to notify Parliament of their decision before the Bill completes its passage.

The noble Lord had a query about the rights of trustees to challenge. They could apply to the courts for direction, because amendments to the rules are not valid if they are beyond limits. Costs fall to the scheme, and ultimately the employer pays.

I hope that I have covered all the issues. Clearly this is an area of some interest and we will be spending more time on it.

Amendment 44 agreed.

Schedule 13, as amended, agreed.

Schedule 14: Power to amend schemes to reflect abolition of contracting-out

Amendments 45 to 47 not moved.

Amendments 48 and 49

Moved by

[Lord Freud]

48: Schedule 14, page 78, line 19, at end insert—
“( ) Where the effect of using the power to increase employee contributions of the relevant members would be to increase the contributions that the employer is required to pay, the power may be used to make other amendments needed to ensure that only the employee contributions are increased because of the use of the power.
“( ) Where the effect of using the power to alter the future accrual of benefits for or in respect of the relevant members would be to decrease the contributions that any members are required to pay, the power may be used to make other amendments needed to ensure that the contributions of those members are not decreased because of the use of the power.”

49: Schedule 14, page 78, line 20, leave out sub-paragraph (5)

Amendments 48 and 49 agreed.

Amendment 50 not moved.

Schedule 14, as amended, agreed.

Amendment 51

Moved by

[Lord Freud]

51: Before Clause 25, insert the following new Clause—
“Part 1AOption to boost old retirement pensionsOption to boost old retirement pensions
In Schedule (Option to boost old retirement pensions)—Part 1 contains amendments to allow certain people to pay additional contributions to boost their retirement pensions;
Part 2 contains amendments to allow corresponding legislation to be put in place for Northern Ireland.”

[Lord Freud]

My Lords, Part 1 of the Bill is about future generations of pensioners who will benefit from the certainty of a contributory state pension set above the level of the basic means test.

We have dealt with a great deal of complexity as we have discussed the transition provisions. These are intended to respect past contributions by giving people reaching state pension age on 6 April 2016 onwards the higher of the value of their national insurance record calculated under both single tier or old scheme rules. As a result of this calculation, many people retiring in the early years of the single tier will have their pension boosted using new-scheme rules. So a woman with 30 qualifying years and £10 of state earnings related pension scheme in 2016 would get £123.30 of single-tier pension, which is around £6.30 a week more than under the old scheme rules. As illustrated here, the groups who will benefit most are those who have only modest amounts of additional state pension, if any at all. These tend to be, in the main, women and the self-employed whose social and economic contributions were not captured in SERPS and are not fully reflected in the state second pension.

As set out in these amendments, we now want to give existing pensioners and those reaching state pension age before 6 April 2016 the opportunity to boost their additional state pension by paying a new class of voluntary national insurance contribution: class 3A. The intention is that a unit of additional pension, obtained by paying the class 3A contribution, will provide £1 a week of extra pension. The extra pension itself will simply be added to people’s state pension. The intention is for the scheme to start from October 2015 and run for a limited time of between 18 months to two years. There are just two entitlement conditions to class 3A—entitlement to a UK pension and that the person reaches state pension age on or before 5 April 2016.

We published a briefing paper that provides more details of the scheme, but we have left some decisions to secondary legislation. These include questions such as whether there should be a cap, perhaps of £25 a week; how long the scheme should be open; and whether people should have a cooling-off period after paying class 3A contributions. As the extra pension obtained will be the additional state pension, it will be uprated by CPI, it will be heritable and people will be able to defer, in line with existing rules.

I turn now to costs. As noble Lords will know, covering basic state pension gaps through existing class 3 is relatively cheap. A person paying class 3 to acquire one qualifying year of basic state pension will get their money back within four years of reaching state pension age. A different approach is required for class 3A to ensure that the arrangements do not become a burden for today’s national insurance contributors. So the costs of class 3A, which will be set by the Treasury, will be based on actuarially fair terms, in consultation with the Government Actuary’s Department. In keeping with this, the cost will be adjusted to reflect the age of the pensioner at the time they pay class 3A.

The briefing paper provides an example of how pricing based on life expectancy will work. The Government Actuary expects to report back to us on a pricing structure shortly. The report will take account of the latest ONS life expectancy estimates that were published on 11 December. I should clarify at this point that entitlement to pay existing class 3 voluntary national insurance contributions, which allows people to cover gaps in their contribution record for basic state pension, will be unaffected by this measure. DWP and HMRC will put in place administrative arrangements to ensure that individuals applying to pay new class 3A contributions are made aware that they should check their eligibility to make class 3 contributions.

16:30

The department has conducted some customer research on the likely take-up of class 3A. A report, Additional Voluntary National Insurance Contributions at State Pension Age: Results from an Online Survey, was published on 20 December. The polling indicates that take-up levels are likely to be in the low hundreds of thousands. At this point we have not settled on an estimate of the additional national insurance revenue from class 3A or on the costs of the extra additional state pension that will be paid out over the years. I recognise that these amendments have been introduced at a late stage, but to wait for another legislative opportunity risks seeing a good idea, which will benefit existing pensioners, go to waste. I recognise that decisions on some of the finer details of the scheme are outstanding, but the main regulations will be subject to the affirmative procedure, so there will be further opportunities to test the overall proposition.

We all know that pensioners with savings have had more than their fair share of pain in the past few years. People will have to consider whether paying class 3A contributions is the best option for them. However, we believe that class 3A contributions will provide an opportunity for some people to boost their pension income with a secure, inflation-proof income, with the added advantage that it will provide survivor benefits. I therefore beg to move this amendment.

[Baroness Hollis of Heigham (Lab)]

My Lords, the Minister has been very helpful in his introduction, but how can the consultation that he reports he has had with possible users be at all meaningful when they do not know how much they are going to have to pay and what they may be likely to get? Following that, can he give us any indication of the ball-park figure? Say someone is 70: what is the lowest possible price and the range for which the extra year of pension will be bought? Otherwise, people’s views cannot be taken seriously because they have not got the relevant information.

[Lord McKenzie of Luton (Lab)]

My Lords, following my noble friend Lady Hollis, I support the inquiry about the pricing structure and whether we will know that by the time the Bill completes its passage through your Lordships’ House. I listened carefully to the Minister’s explanation, because at the heart of it this is basically a savings plan. It is effectively an annuity arrangement. It is attached to the additional state pension but you could delete all that and describe the fundamental proposition here very much as an annuity. We know that that cannot be done because the DWP does not have the power to do it. However, we should be clear what this is about.

It is attached to the additional state pension and gives people a chance to enhance provision they have made in that respect. As I understand it, you could avail yourself of this opportunity if there was currently no additional state pension due—or there was a very significant amount of additional state pension due because you had been investing heavily in it, certainly above the level of the single tier of pension. Indeed, if somebody was contracted out of additional state pension I think they would still be able to avail themselves of this opportunity. I am just trying to work out how easily that sits with the whole concept—this is all about people who have reinvested in additional state pension, not just about an investment product.

I did not find the rationale for leaving these arrangements open for only a limited period, and the online survey is a bit difficult to interpret. Can the Minister give us any more information about the expectation of the number of people likely to take this up and the amounts that they are likely to take up? The Minister said—and this was said in the briefing session as well—that nothing has been scored in respect of these proposals so far as the public accounts are concerned, but presumably it will be scored at the next Budget, and certainly credit for any take-up of this will feature in the year 2015-16, presumably with its consequential impact on the deficit and government debt arrangements. Indeed, the lump sum would be taken out in the year in which it is received, and the flow of pension contributions will just score over the years and decades ahead.

Given the nature of this, I am interested to understand the sort of explanations and information that people will be given when they are looking to make their choices. In a sense, the information about their class 3 and 3A voluntary contributions is relatively straightforward, but we are in an environment where we know the annuities market is generally very opaque. The Financial Conduct Authority is on the point of publishing a review of the annuities market. Given the closeness of this product to annuities, what sort and range of advice and information is it proposed that the Government will provide for people thinking about taking up these opportunities? We accept some of the potential benefits. In a sense, it is risk free; it is inflation protected; and it can be shared on divorce. One sees the benefit of those arrangements, but I have one or two queries on the wording of the amendment which I hope the Minister can help me with.

[Baroness Hollis of Heigham]

Would my noble friend not agree that the Treasury is following the same philosophy as it is in trying to abolish the lump sum as an option for people who have deferred taking their state pension for two years in order to avoid paying out the money upfront and is now trying to do exactly the same thing—a sort of mirror opposite—in terms of this package?

[Lord McKenzie of Luton]

Indeed, I agree with my noble friend. It is the converse of that. A cynic might say that this is all to do with managing the deficit and the debt in the run-up to a general election, but that is for us cynics, I guess.

Looking at Amendment 62, I wonder whether the Minister can help me out on what will eventually be new Section 14B dealing with the arrangements for repayment of contributions. I am a little unclear about proposed new subsection 14B(4), which states:

“Regulations under subsection (1) may provide for benefits paid to a person because of the unit of additional pension to be recovered by deducting them from the repayment”.

I am not quite sure whether the benefits referred to there are the additional pension that has hitherto been received or whether there is something else because typically one would not expect extra benefits to be paid if somebody has extra income—quite the reverse. Perhaps the Minister can help me on that provision.

Proposed new Section 61ZA is headed “Shortfall in contributions”. I was a bit bemused by this. It states:

“This section applies to a person who has one or more units of additional pension if the person … is not entitled to a Category A retirement pension, but … would be entitled to a Category A retirement pension if the relevant contribution conditions were satisfied”.

It goes on:

“The relevant contribution conditions are to be taken to be satisfied”,

but in a sense it negates the impact of that in terms of payments as you get only the additional pension attributable to units of additional pension. I was trying to fathom what that was about because if somebody is not entitled to a category A pension presumably they would only be entitled at all if they had a category B or D pension. Or is this saying, basically, that even though you do not have a pension entitlement, we will treat you as having a pension entitlement for the purposes of being able to take up these provisions? That seems to undercut one of the two requirements—and there are only two requirements—to be able to access these arrangements.

I do not know why there needs to be consultation with the Government Actuary or the deputy Government Actuary—I do not know whether you can choose who to go to for advice. I would have thought that going to the Government Actuary’s Department would include going to the deputy if the Government Actuary is not available. But there may be good reason for that formulation. This may well be a nice little earner and deserve support on that basis, but until we know more detail it is difficult to judge. It is an odd formulation to attach this to the additional state pension in the way that is proposed.

[Lord Browne of Ladyton]

My Lords, I, too, thank the Minister for his explanation of these provisions. I take this opportunity to thank his Bill team on behalf of my noble friends and myself for the briefing that it provided to explain some of the issues that have been raised. When the Chancellor announced the scheme in the Autumn Statement there was much excitement among financial journalists, I recollect. It was hailed as a great deal for consumers by commentators, many of whom missed crucial words in the small print that it would be at a broadly actuarial fair rate. My understanding—and the Minister's explanation confirmed this—is that the price will vary according to age at purchase, much as an annuity would, and that it would be gender-neutral.

The Minister has effectively confirmed that the only factor that will be taken into account in pricing a class 3A contribution will be age. No account will be taken of any regional or occupational differences in life expectancy, which are issues that will engage the Committee later in this evening’s debate. As that is not going to be the case, have the Government done any work on the likely distributional effects of this scheme? If this scheme is broadly actuarially fair in pricing and the proposal is that over time the policy will be broadly cost-neutral as the briefing paper says, if some people are getting a good deal others must be losing out. Those who lose out will be those with shorter than average lives, and there is a clear socioeconomic correlation there.

There is much that we do not know about the scheme and the Minister was absolutely candid about that. In fact, there is much that the Government do not know about the scheme because they have not worked it out. We know, however, that it will start in October 2015 and that the Government are minded to run it for 18 months or two years only. I digress here to point out to the Minister the irony of telling us in one short unqualified sentence that the affirmative procedure will be used for the regulations for this in a scheme that is due to start in October 2015 when he spent a significant amount of his last contribution to the Committee explaining that it would be very difficult to find time for affirmative regulations in this Parliament. That irony was not lost on the rest of us. He may find that fact being played back to him at some time in the not-too-distant future.

We do not know the range of prices, but the illustrative price given in the briefing paper sent to Peers showed a charmingly named couple, Mr and Mrs Average, who will be 65 in 2015. They could be expected to live for another 24 years. It suggests that they would have to find £1,248 to acquire another one pound a week. That would be a better deal for them than going to the market, said the briefing, because the extra pension that it would buy would be uprated by CPI and without charges, and would be inheritable under the additional state pension rules. I am not sure whether that was meant to be the price for them to receive an extra £1 per week each because it seems in the polling reports that the prices tested were between £300 and £800 to buy an extra £1 per week, depending on age. I make this point because the value of polling is of course dependent on the nature of the questions asked. If the questions that were asked in the polling were on an expectation that one unit per week would cost between £300 and £800, and in fact it is likely to cost £1,248 to acquire, that polling may need to be redone as it will be of limited value.

16:44

The suggestion is that up to something of the order of £25 per week might be the maximum additional pension that could be bought, so at £1,248 per £1 per week of pension for the two of them, that would cost £31,200. Can the Minister tell the Committee what proportion of pensioners have in excess of £31,200 in savings? As I explained at the briefing, it would be helpful to have at least one fixed point of reference to have a debate around because it is quite difficult to get a handle on just how valuable this is as a boost, unless we have some sense of how attractive it will be to Mr and Mrs Average.

Based on the polling if the price were £800 to buy an extra £1 per week, it would cost £20,000 to buy £25 per week. However, only one in five of the small proportion who said that they would be interested in buying at this price have more than £20,000 in savings, so even if they bought they could not buy the maximum. Indeed, three in five of them have less than £10,000 in savings and investments in total. Of those who are fairly interested, just over half have £20,000.

Then there are the numbers. The briefing suggests that 7 million pensioners have enough savings to enable them to buy class 3A contributions. Can the Minister clarify this? Does that mean enough savings in total to buy one unit of class 3A contributions or 25 units, or is it somewhere in between—and if so, where in between is it? The briefing also says that the polling suggests that “a small number” of those 7 million would take it up, as the Minister himself said. Just how small is that number? He gave us some idea but how specific can he be?

This is all highly relevant to the costing of the schemes. For the reasons given by the Minister, there was no point in me looking across the Autumn Statement or the scorecard for any reference to this policy. It is not there because there is no figure to be put. I understand that but given that this provision is coming in during the next financial year, when and how will Parliament have the opportunity to scrutinise the detail? We know that it will be by affirmative resolution and we are pleased about that, for obvious reasons after all the arguments we made about why the other set of regulations should similarly be by affirmative resolution, but can the noble Lord give us some indication as to when he thinks the Government will be able to secure the valuable parliamentary time to have that debate? If the scheme is to be broadly cost-neutral over time, it clearly will not be in the short term. Indeed, as my noble friends suggested, this could be viewed as a way of bringing in revenue in the short term, which the state will then have to pay back in the next 20 years-plus.

The polling suggests that, overall, 14% to 15% of people are either very or fairly interested in buying; mostly, they are fairly interested. Let us average everything for Mr and Mrs Average. Let us suppose that 500,000 or 7% of the 7 million people who the Minister believes will have enough savings decide to buy class 3A contributions, that on average they buy about £13 a week extra, which is just over half the suggested maximum, and let us choose the middle price of £600 for an extra £1. My estimate, which I accept is very rough, is that this will bring in less than £4 billion in revenue. Whatever the figure, how will this be scored given that it will have to be paid back again by the state in pension payments in the decades ahead? Presumably, this also pushes those billions of pounds into the DWP AME costs over the years ahead. I do not know whether the Minister has the answer to this but how does that interact with the concept of a welfare cap? Is this to be added to the cap or within the cap?

[Lord Freud]

It does not count. I can answer that straightaway because the discussions on the welfare cap have been around working-age benefits, not pension benefits. The Labour Party may have been discussing a wider pension cap but that is not what we—

[Lord Browne of Ladyton]

It is the pension cap that this Committee is discussing. I am grateful for that clarification, which was appropriate at this time.

Finally, there are the decision points for individuals. Will they get advice on whether they should buy class 3A contributions? After all, there are significant considerations for individuals, such as their life expectancy, which may be significantly affected by where they live in the United Kingdom; whether they are married or in a civil partnership, or likely to be so; and what other income or savings they have—and, therefore, whether it is a good idea, if it may affect their entitlement to incapability benefits, for example. After all, if someone with £10,000 in savings decided to spend £4,000 of those in buying another £5 in income, would they not simply lose that in pension credit and have 40% less of their savings? For all the reasons that we have discussed, those savings may be necessary at later stages in their life. Crucially, who would sell this to them? In the context of the briefing that we received from the Minister’s team, we were told that engagement between the purchasers of this and the Government would be through the Treasury. Does that mean that the Treasury will have certain responsibilities to people who call to inquire about buying these class 3A contributions? If so, how will they be discharged?

There are many questions to ask. The Committee will not be surprised if the Minister cannot answer them all now, because, with respect, he was unable to answer even any of his own questions on his introductory remarks. We may have to wait and see about some of the detail. I understand the reasons for haste; this legislative vehicle is important for this initiative and, if it proves to be positive, that is a good thing. But the scheme was rushed out in the Autumn Statement and added on to the Bill when it had gone through another place. We have no costings or details on price, and no idea how it will be administered—but we still look forward very much to the Minister’s reply.

[Baroness Hollis of Heigham]

Can I ask a question following on from my noble friend about the interaction of pension credit, which I was trying to tease out as he was going along? At the moment, if you have savings of more than about £40,000, the first £10,000 of pension credit capital is disregarded for pension credit purposes. Thereafter, you have the tariff income of £1 for every £500, which means that if you have savings at the moment of about £40,000 and you are single—I am not sure how it would work for a couple, because I do not have the figures in my head—you would be just about ineligible for pension credit, because your tariff income would float you above it. But turn that capital into a pension, given the fairly unattractive rates for annuity purposes, and I think as a result you would come into pension credit. I shall try to do some more work on this as the discussion moves on, but, if I am right, what the Minister will get in upfront savings he will lose not only in payments in perpetuity while those people live, through his additional pension, but also the immediate payments he will have to make in pension credit—because, having disbursed their capital, they will now come within the pension credit income rules.

[Lord Freud]

I need to thank noble Lords, as usual, for a mine of interesting questions, and I shall try to deal with as many as I can. On the point that the noble Baroness, Lady Hollis, raised about the research and the understanding of the prices, we are clearly looking at how much the original research needs to be complemented—and, indeed, we may consider more polling work. The original testing was based on a stylised scheme, and further work, playing in the fact that the scheme is secured in national insurance and state pension, may be beneficial. We will also look to consider qualitative research to find out what sort of barriers there may be to taking up class 3A contributions, and I will be happy to provide further details of that research. On the question raised by the noble Lord, Lord Browne, about whether some of that research needs to be redone, I think we would say that it needs to be complemented.

The example of £1,248 raised by the noble Lord, Lord Browne, was not the cost of £1 for a 65 year-old; it was illustrative only, and we are looking to do some more research on the final price. In answer to questions from both the noble Lords, Lord Browne and Lord McKenzie, about information and timing, we will provide comprehensive information and get it quality assured by stakeholders, and we build on the kind of information we provide for class 3, which noble Lords will be familiar with. This is the standard background that we will build on.

The noble Lord, Lord Browne, raised the question of the amount of financial advice that people will need before buying class 3A. Again, in this document, as in others, we draw people’s attention to the fact that they may wish to take independent financial advice before taking a decision that could affect their current or future income. We also need to note that HMRC, rather than the Treasury, administers this scheme.

On the point about pension credit that the noble Baroness, Lady Hollis, was developing in front of our eyes, she is correct that some people would come within the scope of pension credit, but it is up to the decision-maker to decide whether people deprive themselves of capital in order to derive income. We will look at that point further.

[Baroness Hollis of Heigham]

There is certainly a rule within all social security, along with the rule that capital may be treated as income and income treated as capital, that you may not wilfully deprive yourself of capital in order to boost income. However, to do so wilfully in response to a government campaign would be very different from handing a gift of £10,000 to your grandchild. I think that the Government would be open to mis-selling claims if they went down that road. I do warn the Minister.

[Lord Freud]

I am, of course, always very grateful for warnings from the noble Baroness or other members of the Committee. That is clearly one of the areas in which quite a lot of detailed work needs to be done. I suspect that it is a minority sport that she is defining, but nevertheless we will need to look at it.

On the question of the noble Lord, Lord McKenzie, about what pension entitlement is necessary, people can have a pension entitlement that consists of graduated retirement benefit or state pension based on their own record of national insurance, which is a category A pension, or one derived from a spouse or civil partner’s record, which is a category B pension. Proposed new Section 61ZA overrides the rules that prevent people having an entitlement to more than one pension at a time.

On the question about what we call it, I think that the noble Lord called it a savings vehicle. We have to be rather careful in our language, which the noble Lord was good enough to recognise and acknowledge. Class 3A will be a one-off opportunity for today’s pensioners, with a cap on the amount of additional pension that can be bought and a limited window during which applications can be taken. As with other forms of voluntary national insurance, we do not expect it to be seen as an investment in a commercial sense. As class 3A is not an investment product, it does not require regulation by the Financial Conduct Authority and, therefore, people with defined contribution pension savings will not be able to get their pension pot refunded in order to take up class 3A as an alternative to an annuity.

On the point raised by the noble Lord, Lord Browne, about the belt and braces approach of the Government Actuary or the Deputy Government Actuary, this is a provision to cover situations where the post of the Government Actuary is vacant. It enables engagement for consideration. I know the noble Lord takes an Occam’s razor attitude to legislation, but that is the reason.

The question from the noble Lord, Lord McKenzie, on the recovery—

[The Deputy Chairman of Committees]

I apologise to the Minister—he will have to finish in a few minutes. A Division has been called. The Committee will stand adjourned for 10 minutes.

17:01

Sitting suspended for a Division in the House.

17:10

[Lord Freud]

My Lords, I should start by quickly apologising to the noble Lord, Lord Browne, on my belt-and-braces comments. I should have directed my admiration towards the noble Lord, Lord McKenzie, as regards the deputy Government Actuary. I need to address to the noble Lord the point on recovery, which is a straightforward matter, to the extent that if someone changes their mind we will undo both sides of the payment and consider only any actual additional payment made to balance up.

[Lord McKenzie of Luton]

Perhaps we can clarify the point to get rid of it. In that case, does the reference to benefits paid basically include the additional pension that has been earned from the payment?

[Lord Freud]

Yes. To the extent that if someone changes their mind about wanting to buy class 3A contributions and recoups that fund, we will recoup the early payments made on that benefit in order to balance both sides of the position.

We hope to have the pricing details bottomed out by Budget time, although I cannot give any range at this point.

As regards the query on numbers from the noble Lord, Lord Browne, of the 7 million pensioners we assess as potentially being able to afford it, we estimate that around 30% will have savings of between £1,500 and £10,000, 20% will have between £10,000 and £20,000, and 50% will have more than the £20,000 limit. So if we assume that pensioners would not want to spend more than, say, 25% of their capital on this, we might expect the average amount bought to be £5 a week. However, those are, again, premature estimates, and it is not worth spending too much time on that because there will be more information later.

I also take on board the points made by noble Lords about the importance of communicating the new scheme effectively and giving people the right information at the right time. We will take great care in going through the detail of implementation and delivery arrangements to put the customer first and will work with key stakeholders to ensure that this happens.

As I said in my opening remarks on pricing and revenue raising, we need to bring regulations back to the House, and at that time we will have the details required for a fully informed debate. We will introduce those regulations as soon as possible. I hope that I have been able to assure noble Lords that the new voluntary national insurance class 3A policy is well intended, designed to give some people who may have lost out on the opportunity to build additional pension the chance to do so.

[Lord McKenzie of Luton]

Will the Minister clarify a couple of points? Is it the case that someone can avail themselves of these provisions if they are currently contracted out and that there is no prohibition on that?

[Lord Freud]

I can confirm that they can do so.

[Lord McKenzie of Luton]

Whatever the level of their current S2P arrangements—they might have paid in significantly or they may have nothing at all—can they still avail themselves on the same basis as everyone else?

[Lord Freud]

Yes, I can confirm that, too.

Amendment 51 agreed.

Clause 25: Increase in pensionable age to 67

Debate on whether Clause 25 should stand part of the Bill.

[The Deputy Chairman of Committees (Lord Bichard)]

I should point out that this debate has been de-grouped from subsequent Amendments 52 to 58.

17:14

Sitting suspended for a Division in the House.

17:24

[Baroness Turner of Camden (Lab)]

My Lords, Clause 25 increases the pensionable age to 67. It is a key clause, but I wish to oppose the question that it should stand part of the Bill, as I hope to get the Government to think again about it. I know that in legislation that has an impact on millions of people, as this Bill does, it is useful to have arrangements that are the same for everyone—the same benefits and the same retirement age—as that makes things much easier to administer. The problem with that is that we are not all the same. Even more important, jobs are not all the same.

As I said at Second Reading, some people are happy to work for longer. They like their jobs and the social aspect of working with others is important to them. Such people do not look forward to retirement; they like to go on working if they can. These people are often employed in administrative jobs, but for others things are very different. Some industries involve strenuous and often hazardous work—the construction industry is one such. Those who work in such industries do work that is necessary for the rest of us. Without them, we would not have the comfortable lives that we now have. Yet such industries often have a record of industrial accidents and disease, which we should all find unacceptable. It may be dangerous for older workers to work with others in such a working environment. Therefore, an earlier retirement may well be necessary. This simply cannot be left to the private sector. We cannot have legislation that says that all people must work longer before retiring.

It is not only industries that are hazardous where this is a problem. There are many low-paid workers in dreary jobs who are only too happy to retire, as long as they have enough money to do so. People who work in hospital cleaning and dreary jobs of that kind are only too happy to retire if it is possible for them to do so and to receive reasonable benefits when they are retired. Such people long to retire. It is not enough for us to say, “Oh well, you have to work for longer”.

We are often told of the evidence that we are all living longer, but it is not always sensible to use that as a reason for extending working life—not for everyone, anyway. We are not alone in thinking this. A number of my colleagues have tabled amendments to subsequent clauses to seek a review of retirement ages. I certainly think that that is necessary. Have the Government thought through what all this means? What is the impact on people working in particular jobs and their health? What happens when people live longer? What is the effect on their health? Therefore, it seems to me that this simple provision in legislation to ensure that people work for longer is not a good idea. I hope that the Government will be prepared to look at it again, in the light of some of the things that have been said both at Second Reading and in Committee today.

[Baroness Sherlock (Lab)]

My Lords, as this is the first discussion of Part 2 of the Bill, it may be worth setting out a couple of principles from these Benches at the outset. First, we agree with the principle of raising the state pension age to reflect longevity, as people are living longer than when the current arrangements were put in place, largely in post-war reforms. As I indicated at Second Reading, we also accept the need for periodic reviews of the state pension age, but we differ from the Government on how best to do that—we will return to that issue in the discussion of our later amendment.

Fixing the state pension age is never easy, and an issue of fairness is always at stake. There needs to be a balance between the interests of the generations on the funding of retirement incomes in a pay-as-you-go system, where today’s taxpayers fund today’s pensions. As we will discuss in later groups, our view is that having a careful, evidence-based review before taking any future decisions on changes to the state pension age is a crucial element of ensuring fairness between generations.

However the arguments made by my noble friend Lady Turner require careful attention from all of us. Sometimes fairness also requires at least a consideration of difference, and my noble friend has highlighted some crucial differences, particularly in relation to longevity and health. We all know that life expectancy is increasing, but that fact conceals as much as it reveals. Mortality rates vary widely, as do morbidity rates. There is a huge amount of socio-demographic data available to inform our debate—and I am sure we will hear a great deal of it in the groups to come—from the Wanless and Marmot reviews to government figures and other outside research. There are also some very interesting data from the TUC. I will say more on this later, but I do not want to pre-empt what I think could be a very substantial discussion coming up shortly.

There are no easy solutions to these problems. The biggest challenge to the Government is to address the question of differential mortality and morbidity rates through urgent attention to public health, but we also need time to reflect on how best to deal with these questions in relation to the state pension age. It is our view that the best way to do that is to ensure that the mechanism for reviewing the state pension age includes a review panel which has on it representatives of a wide range of interests in society, including employer and employee representatives and representatives of different parties and, indeed, our own Cross Benches. I shall move an amendment later today to that effect, but in the mean time, I hope very much that the Minister will take the concerns of my noble friend seriously. I look forward to his reply.

[Lord Freud]

My Lords, the purpose of Clause 25 is to bring forward by just over eight years the point at which the state pension age completes its rise to 67. The latest evidence shows that we are living longer and, on average, healthier lives than ever before. To illustrate this point: a man in the UK reaching the age of 65 30 years ago—in 1983—could expect to spend 14.5 years in retirement. Today, a man reaching that same age can expect to spend about 21.5 years in retirement.

The noble Baroness, Lady Turner, raised the key issue of differential life expectancy. I do not propose to go into that in great detail at this point because we will have the opportunity to address that full-on in the next amendment; so, if she will forgive me, I shall concentrate my remarks on raising the age to 67.

The Pensions Act 2007 was informed by the Office for National Statistics’ 2004-based life expectancy projections. Those projections suggested that a man aged 67 in 2028 would survive for a further 19.9 years. However, on our latest understanding, this same man is projected to survive for a further 21.5 years, fully 1.6 years longer than we thought when setting the original timetable in the 2007 Act.

We continue to believe that it is only fair that those enjoying the benefits of longer life expectancy pay a share of the associated costs. Bringing forward the increase in pensionable age to 66 through provisions in the Pensions Act 2011 ensured the short-term sustainability of the UK’s state pension system. Now, the measures contained in this clause to accelerate the increase to the age of 67, combined with the regular review mechanism as set out in Clause 26, will help ensure the fairness and affordability of the system into the medium and long term. The savings projected to result from this proposal are significant—some £73 billion in net savings between 2026 and 2036—but not only are there net spending reductions, but this measure is projected to increase employment rates and boost GDP by around £100 billion over the same period.

Bringing forward the rise to 67 by some eight years will affect around 8 million men and women born between 6 April 1960 and 5 April 1969: people who are now aged between about 44 and 53. As with previous increases in state pension age, the transition to the higher age will be phased in gradually: men and women born between 6 April 1960 and 5 March 1961 will have a state pension age of between 66 and 67, and those born between 6 March 1961 and 5 April 1969 will have a state pension age of 67. Those born after 5 April 1969 will not be affected by this change because they already have a state pension age of 67 or 68, or somewhere in between the two, as legislated for in the Pensions Act 2007. The proposals in this clause mean that the maximum increase that any individual will experience in their state pension age, in relation to the Pensions Act 2007, is one year. By starting the transition to age 67 in 2026, no one who was affected by the Pensions Act 2011 will have their state pension age changed again by the measures in this Bill. To help people prepare for the change, we announced these proposals back in November 2011, giving the first cohorts affected more than 14 years’ notice.

Finally, noble Lords will be aware that an ageing society is not a phenomenon unique to the UK. That is why other countries in Europe and beyond are moving to adjust the age at which retirement benefits become available. Indeed, even by moving to a state pension age of 67 in 2028, we will still be behind many other countries—Ireland will get there in 2021, the Netherlands and Australia in 2023, and Denmark and the US in 2027. In bringing forward the rise to a state pension age of 67 we are ensuring that the system as a whole remains fair between the generations and sustainable and that we are doing so in a way that is on a par with elsewhere in the developed world. I beg to move that Clause 25 stands part of the Bill.

Clause 25 agreed.

Clause 26: Periodic review of rules about pensionable age

Amendment 52

Moved by

[Baroness Hollis of Heigham]

52: Clause 26, page 13, line 23, after “expectancy” insert “, evidence of variations in life expectancy by region, gender, occupation, socio-economic class, healthy life expectancy, alternative ways of measuring life expectancy, and its impact on the labour market”

[Baroness Hollis of Heigham]

My Lords, in moving this amendment, I suspect I will also speak to some of the other amendments in the group en route. Clause 26 states that the Secretary of State must review pensionable age from time to time,

“having regard to life expectancy and other factors”,

he considers relevant. In preparing this report he must consult GAD and a panel appointed by him which will produce their own reports to inform his. All that seems entirely sensible and I welcome it.

This amendment is a limited and modest one, which I hope the Government will find helpful and might even accept. It simply asks to put in the Bill, for the avoidance of doubt, those factors that the White Paper of January 2013 on page 77, paragraph 161 stated:

“are expected to be considered”.

There is also one additional factor, gender, which slightly oddly was omitted.

What factors does the White Paper expect “to be considered” both by the Secretary of State and the review body? The first is:

“evidence of variations in life expectancy … by socio-economic class”,

and therefore, by implication, as my noble friend Lady Turner said, by occupation, and by geographic reason. Secondly, there are,

“trends in healthy life expectancy”,

a point I am sure we will pick up and explore as my noble friend already has done in referring to the Marmot report. Thirdly, there are

“alternative ways of measuring life expectancy”,

and, finally,

“impact on the labour market”.

As I said, all these factors, which the amendment seeks to put in the Bill, come from page 77 of the Government’s own White Paper from January 2013—The Single-tier Pension: a Simple Foundation for Saving. The only missing factor, as I have said, which I have added in was gender, which I presume was an oversight, given the recent fusses we have had over unisex annuity rates and the like. This amendment is very simple. It seeks to put in the Bill that the considerations in the Government’s White Paper will come into play.

Why bother to spell it out in the Bill instead of leaving well alone and keeping it in the White Paper? My noble friend has mentioned the Marmot report, which was highly important. I, and I am sure other Members of the Committee, have read—and I know the Chair of the Committee knows it very well—the recent Lords report from the Committee chaired by the noble Lord, Lord Filkin, called Ready for Ageing?. I have been through all of its 1,000-plus pages of evidence. It was an important and valuable report, especially for the evidence coming in from the wide range of contributors. However, I was surprised to see how relatively little attention, particularly in the recommendations, was paid to these other factors. Instead, there is an insistence on trying to connect retirement age, in some rather formulaic way, to increased longevity, as, I fear, the Minister has just done.

We have recently had the Autumn Statement, in which the Chancellor of the Exchequer again seems to think that retirement age should be mechanistically linked to longevity by defining a set proportion of adult life that should be spent in retirement, irrespective of what happens to whom or what the quality of that retirement is like. It is all, in my view, highly elitist, and I am delighted that the DWP is not following the Chancellor’s approach, which is the easy, mechanistic way, but is seeking appropriate evidence with which to inform its decisions. This amendment would strengthen the DWP’s decent, evidence-based approach against a simplistic, bulldozing Chancellor, now or in the future, who wanted easy money to cut the welfare budget in its entirety by raising the state pension age.

What are the issues? Some have been touched on by my noble friend Lady Turner. Most commentators go over the well worn statistics—a year for every three or four years; the doubling of numbers of those over 85; the trebling of centenarians, and so on. They end up with the glib assumption that we cannot afford it so we must all work longer or, more specifically, delay drawing our pension to pay for all those—not us, of course—who in future will linger too long; and if we do not do this we are destroying the life chances of our children and grandchildren. That argument is pretty well nonsense. The issue of affordability is invariably prayed in aid and is, I think, inappropriately stated—indeed, badly misstated.

The first point is that half the population growth among the elderly, by which we are so financially frightened, is a temporary bulge left over from the baby boomers and will scale down from the 2030s on, at which point we will have one of the best worker/pensioner support ratios in Europe. I do not think the Chancellor told us that, if he actually knew it. The second point is that I remember doing a speech at the Institute of Directors 18 months or so ago and to a man—as, indeed, they were—they thought that the state pension age should be 70 and that they should have the right to dismiss staff at 65. No connection was made between the two. There is little point in raising the state pension age if people do not stay in the labour market. It merely means that they linger longer in the twilight of inadequate working-age benefits.

The latest statistics I have—the Minister’s may be more up-to-date—is that some 30% of men have left the labour market before the state pension age of 65, though the averages are skewed and in practice it is actually a higher number because some men, and women, continue working for a couple of years after 65, a subject we debated when talking about lump sums earlier in Committee. At the moment, that 30% or so of men who leave the labour market early, whether through unemployment or poor health, are protected. This is a point that is never raised in any of these discussions and I do not know why, because it is very relevant. They are protected because they can claim pension credit on the same terms as women and thus, while pension age remains unequal, they have, or have had, a level of benefit equivalent to the state pension topped up by pension credit for up to five years while they linger in the twilight world between leaving work and pension credit age. That will disappear as the state pension age is equalised and poorer men, unable to work but unable officially to retire will find themselves in a no-man’s land on a low level of benefits with no top-up by pension credit as the state pension age continues to rise. As far as I know, no consideration at all has been given to that by anyone, and it should have been.

I come to my third point. What matters, therefore, when we consider the cost of state pensions is their percentage of GDP, which over the next 20 years will actually fall. Why has that not been brought into play as an argument? It depends also on employment levels and productivity during working years; savings ratios, including pensions, which conventionally are not counted in the savings ratio—the difference between outgoings and incomings; rising real incomes, which can buy adequate heating and food, both before and during retirement; and the ability in the later years of retirement, the decade of growing disability, to release assets such as one’s home. Those are also not counted in the savings ratio—and there is a big difference between us and Germany. That could be done by trading down, or equity release, can help co-payment of the cost of old age. Then there is the degree to which heavy-end caring, especially dementia, can be pushed back.

17:45

The crisis of affordability is simply not the case. Apart from half of it, which is due to the temporary baby-boomer bump, we have one of the best ratios among OECD countries, and we have affordable choices that we can make. We never hear those spelt out in any debate; there is simply a mechanistic argument that, as longevity increases, we have to raise the state pension age, without considering what is going on over time with the situation for older people.

So why is that option of the longevity/pension age formula so profoundly wrong? I hope that noble Lords will forgive me if I repeat the nature of what lies ahead of us. I was delighted to receive the DWP’s statistics a few days ago—thank you very much for that—and to see that they coincided with my own understanding of the demographics, which I used at Second Reading and which were to some extent drawn from the information in the Lords report on ageing.

We retire at 65, although many, up to 30%, have dropped out of the labour market several years earlier. A middle-income person, Mr Average, who retires in good health, can then hope to have a decade or so until his mid-seventies, when he increasingly develops functional disability with walking, reaching, hearing, seeing, when he receives not care but some degree of support. By 84 and 85, he is in his third stage of old age and increasingly likely to need care; he is probably bedbound and may be developing dementia. He may be dependent on others putting him to bed at night, getting up and feeding him and giving him intimate attention. That stage is likely to be around three to four years, and that has not changed much over the past 30 to 40 years as a proportion of older age.

The good news is that aids and appliances can be wonderfully effective in maintaining a quality of life in stage 2, growing disability. Motability scooters, for example, are so popular now that one of the awkward problems in my sheltered housing schemes is where to park and recharge a dozen or 20 of the blessed things, a problem that did not exist when we bought the schemes 20 years ago. There is smart technology, and there are smart houses, mats, detectors, alarms—we are getting better at this all the time. Over and beyond the heart/stroke/cancer problems are the falls, due very often to loose slippers and loose stair carpets, the fractured hip and the hospitalisation and institutionalisation that follows, which leads into our third stage of dependency where we need substantial care. Yes, we are living longer but—and this is key—that extra longevity is not added to the first decade of our retirement when we are healthy and can enjoy it but largely to that second decade of increasing disability and dependency.

As the Government’s own statistics show, between 2002 and 2010, in those eight years, we gained more than two years of extra life expectancy. I think that it was 2.2 years extra—but less than one-third of that, 0.7 of a year, will be healthy life expectancy. The rest will be an ever-increasing period of functional disability. The gap between the two is widening, not narrowing. The problem is getting worse, and the more that life expectancy rises, the longer the period spent in that second decade of partial disability. No one ever tells us this. ONS figures show that it is already the case that the most deprived one-fifth of men have a healthy life expectancy of only 55 years, 15 years lower than the more affluent. As my noble friend Lady Turner said, that is why a one-size-fits-all state pension age is profoundly unfair.

In Norwich, we have Mile Cross ward, in the north, which has largely social housing, and Eaton ward in the south, with more affluent owner-occupiers. The difference between those two wards in life expectancy is 11 years; in healthy life expectancy it is nearer 15—and the difference is widening. We are not talking Glasgow compared to Westminster; we all know those stats. I am talking about two wards two miles apart, with the same air, same water and same public services, supermarkets, parks and pavement, and the same city government. How fair can it be to impose the same state pension age on both?

We are where we are now but as we expect to raise the state pension age, as the Government propose, those considerations should come into play. Those people do not enter the labour market at the same time and do not leave it at the same time, so why do we expect that they should draw a pension at the same time? It is too late for the poor who are in poor health and may be unnecessarily early for the better off in better health. Higher-income and higher-educated people such as me will usually have longer than that first decade of healthy retirement, I hope. Those who left school at 16 for unskilled jobs, as my noble friend mentioned, will be lucky to have three or four years of healthy retirement. Raise the pension retirement age by one year and they will lose a precious year of those three to four healthy life years. Raise it by three years and they will move almost immediately from being officially in the labour market into a retirement cribbed and confined by growing ill health and disability.

We talk about intergenerational inequality: how unfair it is on our children or grandchildren to support us in older age, when we should instead be postponing our state pension age. But the British Academy recently estimated that the over-65s contribute £40 billion net—after health and other costs—to the UK economy. It is only after 75 that they are less likely to give than to receive. In other words, and I cannot emphasise this enough—we need it in the moral equivalent of capital letters—the large inequalities within generations are far greater and far more significant and worrying than those between generations. This was a point well made in the evidence of John Hills to the Filkin committee. However, those large inequalities get little or no attention.

The life expectancy difference between men and women is closing quite fast and that between those in routine and professional classes, to use the DWP formula, is widening quite fast. The gap between increased life expectancy and healthy life expectancy is widening fastest of all. Those trends, which widen inequality, are far more significant and serious than the issue of affordability for younger generations to come, given that half that problem will have disappeared once the bulge of baby boomers has gone through. Again, no one ever tells us that, yet we are proposing to widen those inequalities still further by unilaterally continuing to raise the state pension age.

The question we should ask ourselves in all this is: why do we have a state pension at all? It was devised, and remains, to give an income to the poorer among us in old age. Why then do we expect those same poorer-off people to find their state pension effectively shrinking, given the years that they will receive it, while others of us like me who have additional retirement income find the value of their state pension increasing? The DWP rightly recognised all this in its list of factors to be considered in its White Paper. Well done to it for being spot on, as that was one of the first papers of which I know that listed it in that way. However, I have no confidence at all that HMRC will shape its policy accordingly. That is why these factors really need to be in the Bill—not because I doubt the DWP but because other departments want to savage welfare spending to protect themselves. Increased longevity, with an automatic mechanistic tie into a later retirement age, is a self-evidentially quick and easy win.

I am not suggesting in this amendment by what and how we should raise the state pension age, or for whom, but to have an evidence-based approach to it. The DWP claims on page 31 of our November 2013 information pack that,

“the Government believes that it is right to retain flexibility in the review so has not set out in legislation what factors the body must consider”.

Really? I remind the Minister that the Bill asks the Secretary of State only to,

“review whether the rules about pensionable age are appropriate, having regard to life expectancy and other factors”.

Other factors, after all, remain that give the Government flexibility. The amendment merely specifies what some of those other factors mentioned in the White Paper are. Flexibility is not affected. It is not an issue. Other factors remain and the Government’s argument is not valid.

To argue with that is absurd unless and only if the Secretary of State wants to resile from this White Paper and abandon its philosophy while keeping intact the structure of the Bill. I am sure that that is neither the Minister’s nor the department’s wish. The amendment does not bind him in any way as to what he or the department would do now or in the future about the state retirement age. There is no loss of flexibility and considerable gain in transparency—a popular word with the Government in the Bill.

I urge the Minister to accept this modest, helpful amendment, which spells out in the Bill the wise policy intent of the White Paper. It is wise because it recognises the differences and distinctiveness of human experience, that one size does not fit all and that, above all, the poor among us should not be expected to wait longer and in poorer health for their state pensions in order to help protect the wealth and pensions of those of us with good health and good incomes. That is not decent. I beg to move.

[Lord Whitty]

My Lords, that was a real tour de force by my noble friend. She has laid out the problems of simplistic answers to the setting of the pension age. I would have preferred it if the strategy embodied in the Bill had been preceded by the kind of review referred to by my noble friend. The reality is as she spelt out. There has been due consideration and serious assessment of the statistics, certainly, but a simple and mechanistic relationship has been made between increased average longevity on the one hand and a Treasury-led assessment of what the nation can afford in the medium term on the other, on a fairly spurious basis.

I have two amendments in this group that move in much the same way as my noble friend’s amendments. She has made the case for looking much more widely when we come to review the pension age next time and ensuring that we do that by including it in the Bill. The central problem was also referred to by my noble friend Lady Turner in the previous amendment: the range of longevity and life experience is still enormously wide. One of the problems in this House, frankly, is that most of us have spent most of our lives in relatively comfortable positions and healthy and salubrious surroundings. In so far as we have been under pressure, it has probably stimulated our brains to function for slightly longer than many of our fellow citizens. None of that will go on forever for any of us but, nevertheless, we are in a fairly privileged group in that regard.

At the other end of the scale, there are people whose whole life has been in physical and intellectual distress and who have come in their 60s—let alone 67—and sometimes in their 50s to a position where they cannot sensibly work any longer. This is a minority group, but it is quite a large minority. It tends to be defined by occupational background, geographical area and income. All of those factors need to be taken into account in a much more sophisticated way in any future review. My noble friend referred to two wards in Norwich having that differential. We have long said in London that life expectancy declined if you went from South Kensington across to Mile End roughly by one year per stop on the District line. This is not an equal society, and we should not be imposing an equal retirement age on everybody, however they got there.

All these amendments ask is that we recognise that change is necessary. We recognise that there will be another review but at least let us ensure that our successors, in undertaking that review, look at these wider elements. The extra bit in my Amendment 57 is that we should look specifically at the lowest end of the longevity increase or achievement, if that is the word, to see whether we need to make special provision for them in so far as we can define them. That is an exercise in the future, but this Bill could ensure that it is effective and undertakes a much wider review of life experience than a direct correlation between average longevity and the state pension age. I am very pleased to support my noble friend in her amendment.

18:00

[Baroness Drake]

My Lords, I shall speak to Amendments 52, 55 and 58. I acknowledge that increasing the state pension age consistent with increases in life expectancy is part of delivering a sustainable state pension system. For the regular reviews of the state pension age rules, however, we also need to ensure that a clear and wide range of relevant factors is considered and that there is clear and authoritative public presentation of the evidence to inform that debate, while recognising, of course, that the Government of the day will determine the policy that is brought to Parliament.

Intergenerational fairness requires that each generation should enjoy a roughly similar proportion of adult life in state-supported retirement, and we may well see newer and higher projections for life expectancy in the future which will bring huge challenges to how our society operates. For example, who knows where advances in modern medicine will take us in terms of life and health expectancy? State pension policy clearly has to be robust, in the face of not just increasing life expectancy but major uncertainty about how fast that increase could proceed. However, I am also concerned that increasing the state pension age should not be seen as the silver bullet for automatically delivering sustainability without considering some of the complexities and collateral consequences which need to be addressed at the same time.

This requires a range of factors to be considered in the periodic review of the state pension age. My noble friend Lady Hollis has clearly identified these factors, and I shall add arguments about why it is important that they are in the Bill. On average, life expectancy is increasing and yes, on average, ageing appears to be healthy, but averages do not tell the whole story. There are major inequalities, as has been articulated. Life expectancy varies significantly by socioeconomic class and while it has risen significantly in all social classes, there are widening absolute inequalities. Lower socioeconomic groups live for fewer years post-retirement, a smaller percentage of which appears to be free of sickness or disability, and they are far more likely to leave the workforce early for health reasons. In part, this reflects differences in key lifestyle predictors of future health.

The key implication is that there may be limits to the feasibility of across-the-board increases in the age of retirement from the workforce, particularly if the increases are more than proportionate to the increase in life expectancy of particular socioeconomic groups. Similarly, for those who are healthy, since the state pension accounts for a larger share of their total retirement income, this suggests that an increase in the state pension age would be most likely to induce lower income workers to work longer and less likely to induce higher income ones.

It is important to understand how trends in life expectancy and health by socioeconomic class will develop in the future. Certainly, figures indicate some significant differences in life expectancy and healthy life expectancy between regions. The recent figures, kindly provided, show that there is a widening gap between local authority areas with the lowest and highest life expectancies at age 65. Of course, one can speculate on the causes of these differences—major industrial shocks, unemployment rates, specific health problems and cultural and behavioural issues. However, if one looks below age 65, lower socioeconomic groups are also not participating equally in the significant reductions in death rates between the ages of 45 and 65.

An optimist could argue that the major occupational sources of ill health that played a large role in previous generations, such as coal mining or heavy industry, and whose impacts can still be seen in the regional incidence of unemployment, will decline in importance. Conversely, a pessimist would stress that the increasing divergence of some lifestyle factors, continuing differences in working conditions and new labour market features may offset some of these positive developments. The issue therefore is whether policy levers can be deployed to mitigate the disproportionate impact of a rising state pension age on lower socioeconomic groups.

Variable state pension ages may not be an appropriate response for addressing the significant differences in morbidity, life expectancy and early departure from the labour market. However, where differences exist a response is needed. Simply ignoring them is, in itself, a default public policy response with potentially negative consequences for many people. Measures need to target reducing health inequalities but the welfare system needs also to be sensitive, efficient and protective in supporting those for whom working longer is problematic because of their class and health. If these inequalities persist or widen should, for example, the age of eligibility for pension credit be lower than that for the state pension itself?

The UK state pension system, even with these reforms, will not be particularly generous in relative terms. Its focus is poverty prevention rather than an income replacement system. The value of the single tier will be only a little above the guaranteed credit. Yes, it will be the foundation for private saving to enable people to achieve a reasonable level of replacement income but it will be some years before auto-enrolment delivers the necessary savings levels. We are still only staging and phasing its introduction. Meanwhile, lower socioeconomic groups will still be facing a greater likelihood of ill health and earlier exit from the labour market as they get older.

Understanding the extent to which increases in life expectancy are accompanied by increases in healthy life expectancy, monitoring inequalities between socioeconomic classes and regions and identifying the implications for policies associated with the evolving policy for state pension ages will remain an important part of any review. The key responses should include a strong focus on health service and occupational health policies and on the measures to reduce the life expectancy gaps and to compress morbidity. The long-term aim must be to narrow health inequalities rather than treating them as permanent barriers. We should aspire, for example, for the men in Glasgow and Liverpool to have as good an average life expectancy as the men in Kensington and Chelsea, or even those in East Dunbartonshire. Policy needs to be designed to be both equitable and affordable in the face of whatever rise in life expectancy actually occurs. Higher pension ages are essential but are not in themselves a sufficient response.

Increasing labour market participation by older workers is, equally, an integral part of sustainability. Analysis of trends in average age of retiring from the labour market and in employment rates among older people by gender, region, occupation and socioeconomic class is required to understand the extent to which increases in state pension age are accompanied by increases in employment. Unless increases in state pension age are accompanied by higher labour market participation by older workers, then the effective contribution of those pension ages to public expenditure pressures will be weakened, GDP will be lower and other benefit expenditure could well increase. However, major inequalities in life expectancy and health may make across-the-board increases in retirement ages unfeasible unless these differences disappear over time.

The policy of raising the state pension age needs to be accompanied by measures that facilitate higher labour market participation by older workers, because barriers certainly exist. Take, for example, the position of some women. Although women have a higher average life expectancy than men, the figures also reveal that the gap between them is narrowing. The gap between women in higher and lower socioeconomic classes is increasing and women’s participation in the labour market has reached a plateau, partly because of care requirements and the cost of care provision, particularly childcare. Older women are increasingly looking after their elderly parents or grandchildren. An older woman’s earlier age of retirement from the labour force may, for example, be the price paid so that her younger daughter or son can be economically active.

The cultural biases against older workers are often embedded in personnel practices and employers’ assumptions. Take training as an exemplar. The evidence suggests that employer-provided training is skewed towards younger workers, with an assumption that some workers are too old to train. Yet the experience of workers in their 50s plays an important role because beyond the age of 65, participation in the labour market is driven by participation up to the age of 65. Once older people exit the workforce, they are much less likely to work again. The challenges facing business in embracing older workers will be very real. I recall quite vividly 10 years ago the CBI, anxious about that challenge, simultaneously arguing for an increase in the state pension age to 70 but a default retirement age under discrimination law of nearer 65. I described it at the time as a five-year gap between loss of employment rights and receipt of pension. The debate has moved on but that indicates what tensions will be there as industry responds to increased longevity and increased state pension age.

The extent to which increases in state pension age are accompanied by increases in labour market participation will inform government of what initiatives they need to take, be it tackling discriminatory cultures, financial incentives for later retirement, incentives to employers to employ and train older workers, flexible employment practices, cultural attitudes and health policies and changes to welfare policy and welfare payments themselves. Whatever decisions are made in response to the periodic reviews of state pension age, and however much desirable continuity in policy can be achieved, delivering both a fair and sustainable pension policy and level of public expenditure will and should be subject to fully informed debate continuing over time, in the light of new information on a series of relevant factors becoming clearly available and systematically considered.

18:15

[Lord Stoneham of Droxford (LD)]

I was not going to intervene, but there is not as much difference between the two sides of the Committee on this, as earlier contributions seemed to suggest. I certainly thought that the remarks of the noble Baroness, Lady Drake, were right down the line and I was sympathetic to them. Nobody is suggesting that the Labour Government were wrong to start the debate on early retirement. Everybody knows that life expectancy is improving and there are great complexities with inequalities. I would question whether the inequalities have necessarily got worse. I will come to that in a moment, but there is also the issue of overriding affordability.

One of the problems of extended life expectancy is that it almost certainly results in higher social care costs—and, as we know, higher pension costs. We all want to see better pensions, and you cannot often have both a lower retirement age and better pensions. It has to be recognised that you have to get a balance. We have all seen the extra costs that this Government have put into pensions through the triple lock. We want to see that continue into the next Government as well, but that will add to the overriding costs.

I question the inequality issue. As someone who worked in the mining industry when there were 250,000 people working in it, having seen the consequences of early retirement on a lot of those communities and the effect that it is already having on inequalities and lifetime expectancy, I would expect to see some improvement, as we have moved away from older, heavy industries. Another argument was about boring jobs—and boring jobs in the health service. The boring jobs of my generation were in the car assembly industry. With improved technology, anybody organising cleaning jobs should certainly know that that is one of the most important jobs in the health service. It should be respected and there should be pride in it, and there are ways and means of managing that.

That takes me to my further point. You have to have a uniform state pension age and it has to be an average. There will be difficulties with certain occupations, but those have to be respected. We already have some occupational pension schemes that have a lower retirement age because of the consequences of people working in those sectors.

My final point is on the categories that we are using here and the factors that will be included in any review. Those will change over the next 20 years. You could put in the proportion of people smoking or having bad diets as factors that should be looked at specifically. In fact, there is a whole variety of factors and I do not think that the Government are saying in the Bill that there will not be a variety of factors considered in these reviews. We all have an interest in reducing the health inequalities that arise in terms of life expectancy. Under the Government’s proposals, these factors will be taken into account, but we are giving people a recognition that this will be done formally, as part of a set procedure, whenever this is looked at every six or seven years. This will give some certainty as we go forward. I doubt whether the differences between us are really very big.

[Baroness Sherlock]

My Lords, there are times when one feels rather redundant in these proceedings—and, after a range of extraordinary speeches from my noble friends, this is one of them. I thank very much all those who contributed to this debate.

Perhaps I might start by briefly responding to the noble Lord, Lord Stoneham. I think I may have misheard him, and I hope that he will correct me if I did. He said that inequalities had not got worse, but perhaps I might refer him to the brief sent out by the DWP on equality in life expectancy and in healthy life expectancy. It said that while life expectancy has risen substantially for all social classes, this has resulted in a widening of inequalities, and that the smallest growth in life expectancy at age 65 was experienced by those in the lower socio-economic groups. What has been happening is that life expectancy has been rising for all classes, but because of the differential rate at which it has been rising, the gap has been widening. In fact the inequality problem is significant. That is a question for public policy to address.

We have heard today about trying to find a way to do two things: First, the analysis was made very clear by my noble friends Lady Hollis and Lord Whitty that people are living longer, but the proportion of years spent in full health is not keeping track at the same rate. We have significant inequalities in health within the UK, and significant variations in mortality and morbidity rates as a result. Also, we have people who are not able to work safely through to retirement age. Those are the issues that somehow public policy has to grapple with.

The fact is that mortality rates start rising slowly when people hit their mid-50s, and rise significantly from 65 onwards. That has significant implications for workers and employers. First, we have the implication—to which a number of noble Lords alluded—of having an older workforce. There will of course be employees who find, as my noble friend pointed out, that they cannot work until the state pension age. I wonder what consideration the Government have given to the risk that we will see a growing number of people who are recognised as sick or chronically disabled, but are having to wait so long for their pensions that they end up eating through the savings that they have set aside for retirement and so move into retirement without the very nest eggs that we want them to build up. Has any assessment been made of whether that will be one of the consequences of the changes to state pension age?

Secondly, what happens to those who know that they are unable to work safely at 67 but cannot retire? We have heard various examples mentioned of people in different professions. This is not simply a case for those in unskilled jobs. I would not want to be operated on by a surgeon who felt that his or her eyesight was no longer up to it, either. The reality is that a number of people in different roles may find that they have to face up to the fact that they cannot continue in the same role until a higher retirement age. The real question is whether their differential experience and resources may give them differential strategies for dealing with that. One of the questions for public policy is how we address the problems of those who do not have the resources or choices available to them in that circumstance.

Then there is the question of employers. We know that many employers welcome the wisdom and experience of older workers, but they have often expressed concern that older workers may get seriously ill and be off work for longer periods. I know that the Government have often reassured them that that is not the case and that older workers do not take more time off sick than younger ones. Have the Government given any consideration to whether that is likely to change as the state retirement age increases? Of course, at the moment, people can choose to work beyond the state retirement age and therefore there must be an element of self-selection among older workers who carry on working. As the retirement age increases, people may have no choice but to continue working, and I am interested to know whether any work has been done on whether that could make a difference to the composition of the older workforce.

We then heard about the issue of inequalities in health in relation to the fairness test. I read very carefully through the DWP document on equality in life expectancy and in healthy life expectancy, but in the end, I almost wrote at the bottom, “Baroness Hollis was right”. I found it hard to summarise it other than with something I have heard my noble friend say repeatedly almost ever since I have known her—one can expect 10 years of healthy retirement, 10 years of declining health and the rest of one’s life with significant levels of infirmity and disability. Yet despite that fact, she has pointed out the tendency of Governments to put so much store by actuarial information on average life expectancy. That of course is precisely what the Bill says in bald terms, whatever assurances we may want to receive about how it will be done in practice. The point has been made that average life expectancy tells us something, including quite a bit about how medical advances can keep us alive, but it does not tell us very much about our health in retirement, or about differential mortality rates.

We have heard a huge amount of information about clear socio-economic differences and the health inequalities that result from them. There is also clearly still a gender divide. Women still live longer than men, although the gap is closing. I also note that we are only now seeing a generation of female pensioners who have worked for most of their lives as well as raised families. We do not yet know the impact of that on female longevity—it will be interesting to see that.

18:24

Sitting suspended for a Division in the House.

18:34

[Baroness Sherlock]

My Lords, in addition to a gender divide, we have heard that there is a class divide and a geographical divide. To add to the examples from Glasgow, Liverpool and Norfolk, I offer Dorset, which I am reliably informed is the place to live—statistically, you are expected to live longest in the UK. Women in east Dorset can expect to live nine years longer than women in Corby—the area with the shortest life expectancy for women. Men living in east Dorset can expect to live 7.1 years longer than men in Manchester—the area with the shortest life expectancy for men. Then there is the effect of this differential life expectancy on state retirement incomes. Those living shortest post retirement, primarily the poorest and least skilled workers, will obviously receive less in state pension than their better-off counterparts in Dorset. Women in Corby will get £67,000 less and men in Manchester will get £53,000 less. And, of course, those manual workers may well have contributed for longer than those who spent longer in education.

Where does all this take us? It does not take us to any straightforward policy solutions. As I am sure is the case with other noble Lords, many representations have been made to me on ways in which the Government should tackle this—that perhaps they should not raise the state pension age until we have tackled inequalities in health; or that a variable retirement age should be brought in, taking account of life expectancy, work pattern or contribution history; or that there should be flexible retirement proposals or the idea of paying actuarially adjusted pensions early for those retiring in their 60s but before the state pension age. It is quite likely that none of these will commend themselves to the Minister. Given the look on his face, I expect that I am right in that. However, I am sure the Minister will accept that what we have heard today is an analysis that suggests that a significant set of public policy issues needs to be addressed. They are not all pension issues—a point that my noble friend Lady Drake made powerfully—but are effectively spillovers from decisions around the state pension age, which will then impact on public policy-making in a range of other areas.

If the Minister does not feel able to respond positively to any of those concrete suggestions on how to deal with this issue, I encourage him at the very least to go along with the idea of spelling out in the Bill the need to take account of all these factors, because that would then at least put the review process for setting the state pension age in the position of having to tackle all these complicated issues and making some recommendations to government on which we could all, I hope, place some store.

[Lord Freud]

My Lords, the purpose of Clause 26 is to ensure that every Government consider state pension age in light of the latest life expectancy projections and other relevant data. The legislation sets out that a review must be informed by a report from the Government Actuary on the proportion of adult life spent in retirement and corresponding implications for state pension age.

On the point about pensions as a percentage of GDP raised by the noble Baroness, Lady Hollis, the single-tier impact assessment shows that even with an SPA of 67 in 2028 and an SPA of 68 in 2046, the proportion of pensioner benefit expenditure could rise from under 7% of GDP in 2016 to 9% of GDP by the 2060s. I am addressing her point about the baby boom.

It is true that life expectancy is different between socio-economic groups, and even in the latest figures it slightly widened. However, it is increasing for all groups. Such inequalities have always existed and, as the Minister noted in Committee in the other place, adjusting the pension age is not the right way to address these inequalities. We need to address these issues elsewhere through tackling the factors that lead to these differences in life expectancy. To illustrate the rate of increase, the period of life expectancy at age 65 for males in the lowest occupational class between 2002 and 2006 was 15.3 years. You have to go back only to 1999 for the average period of life expectancy of males from all occupations to be the same figure.

I will not go into detail on one of the amendments regarding adult age because we have not discussed it very much, but I will pick up the point raised by the noble Baroness, Lady Hollis, and the noble Lord, Lord Whitty, on the timing of when people enter the labour market.

The single-tier pension’s key features are simplicity—giving people the clarity and confidence to save—and a value set above the minimum income guarantee standard. Allowing early access would mean that we would have actuarially to reduce the pension, and this would severely undermine both these key features of the new system, complicating outcomes and meaning that, if people’s actuarially reduced state pension was below the minimum guarantee, we would retain an extensive and complex system of means-testing. International organisations have repeatedly advised countries to withdraw incentives to early retirement. Indeed, in recent years, a number of countries have put in place measures to discourage it, including Denmark, Finland and Germany.

The changes to state pension age are primarily about fiscal sustainability and fairness between the generations, such as taxpayers and pensioners, at any given time. It is therefore right that the Government Actuary’s Department focuses on total life expectancy from state pension age and not on healthy life expectancy. Indeed, the Pensions Commission advocated that pension age should rise proportionately in line with life expectancy, thereby maintaining the proportion of adult life spent in retirement. Just last week, the noble Lord, Lord Turner, reasserted this principle. This is what the GAD element of the review is for.

We also think it is crucial that future Governments have access to wider evidence before laying any proposals to change state pension age before Parliament. We have been clear in the White Paper and in the other place that we believe the reviews of state pension age should consider healthy life expectancy but also differences between socioeconomic groups and the wider economic effects of increasing state pension age.

On my original point about flexibility, we do not want to be too prescriptive in setting out factors that must be looked at by each review. We want to foster a more long-term view which would allow each Government to specify factors relevant to the circumstances at the time of commissioning the review. There is the danger that, by setting out a list of things for each review to consider, future Governments will simply have a tick-box approach to the reviews. As my noble friend Lord Stonham said—

[Baroness Sherlock]

It is Stoneham.

[Lord Freud]

When I last talked to the noble Lord he was pretty indifferent about his pronunciation, but I apologise to the noble Lord, Lord Stoneham. He made a point which I want to reinforce. When we are looking out for 10, 20 or more years, it is quite difficult to specify all the considerations that a review should take into account. The risk is that that if you specify them, you become restricted.

[Baroness Hollis of Heigham]

The Minister is being a little unfair in this argument because at no stage did I suggest that we remove the words “other factors”. They would remain. All I am trying to do is transpose the wording from this document into the Bill; they are both the Government’s documents.

[Lord Freud]

I am very grateful to the noble Baroness for her advice, but we want to make sure that future Governments look at this themselves, take a proactive approach to the review process and are transparent and conscious about what they are commissioning. Stipulating now all the variables and all the factors to be taken into account restricts rather than supports that responsibility. Greater discretion will also allow an iterative approach with future Governments building on the reviews of previous ones.

A lighter touch approach will help to generate more debate at the time when the state pension age review is conducted. This should encourage all interested parties across Parliament and industry to feed in their thoughts and contributions and involve them better in the process.

The noble Baroness and, indeed, the noble Lord, Lord Whitty, discussed quite a lot of the factors. I do not wish to get into a huge debate about healthy life expectancy, and so on, but I will make just make a few points on it. The first is to warn noble Lords that the ONS measure of healthy life expectancy from 2000 onwards was changed to run in comparison with our EU partners, so we do not have a consistent data run for the whole period, although we have evidence that shows that healthy life expectancy has increased consistently since the 1980s. Do not use the run because there is a discontinuity in it.

18:45

The other factor that I would suggest noble Lords look at is not just the good or the very good figures for health but the figures for fair health. On average, men and women aged 65 can expect to maintain good or very good health until their mid-70s and expect to maintain at least fair health until their early 80s. This equates to spending almost 90% of life remaining at age 65 in very good, good or fair health. On that measure—I think it is in terms of healthy life expectancy, good or very good—we rank third in Europe.

[Baroness Hollis of Heigham]

We are more stoical.

[Lord Freud]

It is a very fair point that health is, importantly, attitudinal. It is not a matter of just taking a medical model for this. I accept that point.

However, where we have an unbroken record, which is the time spent free of disability, which runs from 1981 to 2010, the figure for men in Great Britain rose by 2.9 years and by 2.8 years for women. It is possible to take a rather more encouraging attitude towards our healthy life expectancy compared with some of the gloom I sometimes hear. The House of Lords report, Ready for Ageing—the Filkin review to which the noble Baroness referred—concluded:

“The Government were right to raise the state pension age, but they are now adopting a timetable of increases slower than that recommended by the Turner Commission and will have to revisit this with rising healthy life expectancy”.

[Baroness Hollis of Heigham]

Yes, but one of the problems is that people quote that without reading the 980 pages of evidence that went with it, which show that the summary of those recommendations did not pick up most of the debates in the evidence.

[Lord Freud]

My Lords, I can only go with the conclusion that I would like to leave on the record alongside my warning to take a little care on some of the conclusions that have been drawn on the progress of healthy life expectancy.

The noble Lord, Lord Whitty, asked whether people can work longer and what the trends are in the labour market. The SPA has remained at 65 for men since the 1940s and the average age of labour market exit in 1950 was just over 67 for men and just under 64 for women. That figure has declined, ironically, along with the nature of the work that we have been talking about—hard physical labour. We have seen a countertrend in what has happened since then.

I genuinely welcome this debate and believe that it is important to keep having these discussions, whether inside or outside the House. But we should not seek to prescribe every last detail in the Bill; we must make sure that each and every Government revisit the issue in the light of the circumstances. I urge the noble Baroness to withdraw her amendment.

[Baroness Hollis of Heigham]

Despite being interrupted by a couple of votes, we have had an interesting, valuable and, I hope, important debate. I am very grateful to the number of noble Lords who have taken part in it, including those who had not expected to do so. I was certainly grateful to hear from the noble Lord, Lord Stoneham—not to be confused with the housing association called Stonham.

I am grateful to my noble friends Lord Whitty and Lady Drake for joining me in pressing the Government to put these provisions in the Bill, not to challenge where we are now but for future consideration, when we are thinking about raising the state pension age—and I cannot emphasise too strongly—so that we have a coherent policy across government. We need that, because, as pension credit is withdrawn, with every year that we equalise the state pension age between men and women, we reduce the income of men who are in their twilight and who have dropped out of the labour market early, as 30% or more have and do. That figure will increase as the pension age rises—that 30% will probably go up to 35% and 40%, and so on, as we raise the state pension age, unless we can keep people in the labour market for longer, as my noble friend says.

[Lord Freud]

Let me just make a point, before we take those figures absolutely on face value. When you have differential incentives—in other words, the point that the noble Baroness is making precisely, when you have a higher level of pension credit than working age benefit—you cannot be too surprised when people elect to go with the better paying structure. That probably tells you less than it could about what is happening to those people.

[Baroness Hollis of Heigham]

Oh, dear me. Are we assuming that somebody who has a real choice about whether to stay in work is going to make a rational decision to forgo a job that pays £400 a week to take an extra £30 or £40 or £50 in pension credit to top up an employment support allowance? Is that what the Minister is saying—that that person is so rational that he will willingly reduce his income to one-third of what it was because of the enticement of pension credit? Is that the Minister’s position?

[Lord Freud]

I was referring to the differential between the two benefit structures. I was not referring to enticement; I was just saying that one cannot be too surprised if people select the better of two options.

[Baroness Hollis of Heigham]

I think that I am right in saying that under 10%—probably about 7%—of those in that position do not choose to go on pension credit when that choice is available to them, and the rest do. So clearly the Government’s position assumes that people are making a choice that is attractive because they have been financially encouraged to do so by the relative generosity of pension credit. I cannot attach any other understanding to the Minister’s position. If pension credit did not exist, the assumption would be that the benefits structure was less attractive and therefore, presumably, that they would stay in work for longer—and that therefore they are being encouraged because of pension credit to leave earlier than they need to and that, therefore, withdrawing pension credit is a wise move in the process of the rationality of economic thought in the labour market. Is that what the Minister is saying?

[Lord Freud]

My Lords, I am saying that when you have a higher benefits structure, it is not surprising if people select it, other things being equal, over a lower one.

[Baroness Hollis of Heigham]

I think that the Minister and I have a very different understanding. My view is based on my experience representing—I do not know if the noble Lord has ever had that privilege—one of the poorest wards in my city for nearly 25 years. My noble friends here have either represented such wards or constituencies with very poor members and I can tell the Minister that if people can work they want to work. They want it for self-respect, for income, for social mobility and they regard going “on the club”, as it used to be called in my ward, or taking benefits as something that they are not proud of but reluctantly do because the labour market does not make appropriate provision for them, given the state either of their skills or their health. If that comes from experience of working with people, as I have done and as I am sure my noble friends have done, then I regret that the Minister cannot share that personal experience, which might give him a greater respect for the pressures that some people face in making decisions when they have to leave the labour market. I am not for a moment suggesting that he is lacking respect, but there is a great difference in perspective on this and I do not know that I can bridge it with the noble Lord.

It is certainly the case that, as pension credit is withdrawn, it will reduce the income of people who have already had to leave the labour market, usually on grounds of ill health, and as a result they will have less money for heating, diet and all the other things that we know they will need. People going onto pension credit are already effectively entering that second decade of disability without, in many cases, having gone through the first decade of reasonably healthy retirement. By withdrawing pension credit and putting no substitute in its place, we are ensuring that all we do is increase people’s poverty and thereby progressively increase the rate at which they go into further ill health, since they can no longer afford the heating, the diet, the aids and appliances, the cleaning help and all the rest of it which keeps them more effectively fit and engaged in society. Again, I am really disappointed in the Minister if he does not appreciate that.

[Lord Freud]

I cannot understand the difference between what the noble Baroness has just been talking about and what she was saying the other day when she was so indignant that men could get pension credit at women’s state pension age. She described it, if I remember right, as a smooth path to the beach before getting state pension.

[Baroness Hollis of Heigham]

Indeed so—I made the image up on the spot, but I will, indeed, repeat it. What I was arguing there was that women were facing a cliff edge. Men had always had that slow path to the beach, but that is now being withdrawn from them and as a result they have a cliff edge in the future between where they are, on benefits, and state pension. Unfortunately for the Minister, the argument continues to be made.

I do not think that any of us disagree, as my noble friend Lady Drake pointed out so well and as was reinforced by my noble friend Lady Sherlock, that we need to extend healthy life expectancy and that that requires health policies. We need to make the second decade of average life expectancy, of increasing disability, of as decent a quality as we possibly can. The noble Lord, Lord Stoneham, said that factors will change. Of course they will. The Minister said that factors will change, but the point is that that is already covered, as was pointed out by my noble friend Lord Browne, but the wording of Clause 26(1)(a) gives the Secretary of State alone the privilege of determining the other factors. Putting all these factors in the Bill, as listed in the White Paper, does not exclude other factors that may develop as time permits; it is a basis on which I would hope that the DWP has its arm strengthened as it engages in battles for resources with other departments and with the Treasury.

Does the Minister really think that he will have greater powers of persuasion to get those health policies that we would want to extend healthy life expectancy, or those supporting policies from local government or from the DCLG for the second decade if these factors are not in the Bill and if the Government are not bound by the legislative requirement to consider those factors? On the contrary; by putting those factors into the Bill we will strengthen the DWP’s arm in requiring other departments to play their part in seeking to extend healthy life expectancy and to improve the quality of the decade of disability. Without it, his position will be weaker, not stronger. The other factors, as my noble friend Lord Browne has reminded me, remain the same. I hope that this addresses the point made by the noble Lord, Lord Stoneham. We are absolutely right to challenge the assumption of reduced inequality.

My noble friend Lady Sherlock said that we are going to eat into capital. The point is that, for example, somebody who is in a position to draw down an occupational pension has a choice of when they retire and they are not dependent on their basic state pension. The people we are talking about in this Bill are, and they have no such choice. As my noble friend Lady Sherlock said, they will eat into their capital, thus ensuring an impoverished old age as they wait to reach their state pension age.

19:00

The Minister said that such inequalities have always existed and should be tackled in other ways. How does he expect them to be tackled? Does he think that putting into the Bill the wording of the White Paper, which talks about tackling them, makes that possibility more or less likely? I am sure that he, too, wants healthy life expectancy to rise along with life expectancy, and the quality of the second decade of retirement to be as high as we can possibly make it. I am sure he agrees with that. I am surprised that he does not see that his position vis-à-vis other departments and policy development would be strengthened, not weakened, if this was in the Bill. Other factors remain. He can still specify them. I do not understand why he does not.

For me, this is not just an actuarial issue. It is a moral issue about whether we make that last period in people’s lives as healthy and free from disability as we possibly can. To do that, the Minister would be well advised to have the words of this White Paper enshrined in the legislation in order to hold his colleagues to account. I shall withdraw the amendment, but it may be that we will come back to it. I think the Minister is being very unwise in refusing to put it in the Bill. He has given no explanation for that other than flexibility. He does not need to say that. He has other factors in already. That is redundant verbiage, if I may say so. Why, exactly, is he not willing to add his first thoughts to his second thoughts, which are the Bill? I can only presume that he has been got at by HMRC, which wants to retain the simplest tick-box of them all, rather than the list the Minister was talking about: average longevity increases, therefore average state pension age rises. If he wants any help in resisting that, he needs these words in the Bill. I beg leave to withdraw the amendment.

Amendment 52 withdrawn.

Amendment 53

Moved by

[Baroness Drake]

53: Clause 26, page 13, line 25, leave out “prepare and”

[Baroness Drake]

My Lords, I shall speak also to Amendment 54. Amendments 53 and 54 are tabled in my name and that of my noble friend Lady Hollis. They provide for a report on the periodic review of the rules about pensionable age, having regard to life expectancy and other factors, to be prepared by an independent commission.

There is an important role for an independent commission, while recognising that the Government of the day would determine the policy that is brought to Parliament. The demographic challenge poses unavoidable choices, which are partly for society to make and partly for individuals. However, for those choices to be rational and sustainable, they have to be informed, barriers have to be removed and a broad consensus has to be achieved. One of the useful roles of an independent commission is to present society with those difficult but unavoidable choices. It can spell out the facts and choices clearly and starkly. It can identify the complexities. That process will also assist the parties in reaching a political consensus.

Public debate on policy changes will be better focused and more likely to arrive at consensus if there is a permanent independent body charged with presenting to society the evidence and the issues. A commission can provide the public with a clear and comprehensive narrative about what is happening and what it means. Delivering a sustainable state and private pension system and responding to the demographic challenge are long-term projects that cannot be delivered in the lifetime of any one Government.

A consensus needs to be held over a long policy framework, because optimal outcomes take decades to come through. However, securing and maintaining a consensus will not be easy, because deciding the way forward involves important political judgments, and successive Governments have focused very often on immediate challenges. Trade-offs are the essence of political debate, but achieving some degree of consensus on core principles will be easier to achieve if there is an independent commission supporting that consensus. We know that the long-term management of public finances requires intensive debate now about the state pension age—but, notwithstanding the desirability of continuity in policy being achieved, the detail of pension and associated policies will and should be subject to continuing debate over time, in the light of new information becoming available.

Life expectancy and healthy life expectancy may change significantly from current forecasts, trends in voluntary private pension savings could turn out to be more or less favourable, and the participation rate of older workers in the labour force may prove problematic. As the information available changes, so the precise public policy direction can be refined, even if the overall framework of the system maintains as much continuity as possible. It is important that an independent commission should consider the sort of issues and complexities that we all referred to in the previous debate.

As to the type of commission, it should be small, so that the quality of engagement between commissioners is dynamic and qualitative, but sufficient in number to allow for wider input and for the stimulation of considerations that an individual by definition could not achieve. The commission could become a source of authoritative and independent presentation of the facts, and of the estimates of public expenditure consequences and of what future rises in the state pension age might be implied by the principle of pension ages rising in proportion to life expectancy increases. A commission could maintain a clear and steady focus.

The report could capture the key trends in life expectancy and the differences in morbidity, employment and retirement patterns among older people, by gender, region, occupation and socio-economic classes. This analysis would also allow early and regular identification of whether increases in state pension age are accompanied by increases in productive employment and/or a greater reliance on means-tested benefits and whether major inequalities in healthy life expectancy can make across-the-board increases in retirement ages feasible or unfeasible.

For example, if state pension ages rise and average retirement ages rise, state pension expenditure as a percentage of GDP will be reduced, not only by a pension expenditure reduction but by a rise in GDP. However, if pension ages rise and average retirement ages do not, the reduction in pension expenditure will be offset by other non-pension benefit expenditure and lower GDP. These issues are matters of some moment when we are looking to achieve sustainability in the light of what is a major demographic challenge.

Engaging the public is important. Individuals consistently underestimate their own life expectancy. Research confirms that. Individuals on average are unaware of, or do not believe, the projected increases in life expectancy—in some instances, even when the evidence is presented to them. Such attitudes make it difficult for people, particularly young people, to think rationally about the savings rate/retirement age/pension level trade-off that they personally and society face. An independent commission would assist in changing those attitudes and getting those key messages across in a way that very often government and political parties cannot do successfully.

The commission’s analysis could also identify the latest trends in private pension provision on average and across different gender, socio-economic and ethnic groups, and thus of the overall coverage and adequacy of pension provision. This analysis coming from an independent commission could assist in future debates about appropriate adjustments in employee or employer default contribution rates. This is a not insignificant matter and a key debate—one that people are probably feeling tentative about in view of other, wider considerations, but one which certainly an independent commission would help address, as well as helping the formation of a political consensus.

In the debates on previous amendments we heard much reference to data—the quality of the data, what they show, their integrity, whether they are sufficient and so forth. The quality of choices made and policy decisions taken is directly influenced by the quality, quantity and type of data that are available. An independent commission would be well placed to interrogate the quality of the data available and to make recommendations on the gaps or omissions in the data collected, and on the data needed to inform debate.

As the Minister conceded in an earlier discussion, there is a need to take a long-term view on these issues. In considering those long-term issues, long-term projections also need to focus on the uncertainty inherent in such analysis and on important sensitivity analysis. These are issues that a standing commission could focus on. It could assist in helping the debate and in helping the quality of government and individual decisions.

To repeat what I said at the beginning, one of the useful roles of an independent commission is to present society with difficult but unavoidable choices. It can spell out the facts and choices clearly, and it can identify the complexities and assist government and political parties in making the type and quality of decisions that are necessary in the light of the challenges that we face. I beg to move.

[Baroness Sherlock]

My Lords, I rise to speak to Amendments 55 and 57A in my name and that of my noble friend Lord Browne of Ladyton. I shall speak also to Amendments 53 and 54 in the names of my noble friends Lady Hollis and Lady Drake.

As we heard in the very clear speech from my noble friend Lady Drake, Amendments 55 and 57A provide that the periodic review of rules on pension age should be prepared by an independent commission. I can think of no one better to suggest how a pensions commission might work than my noble friend Lady Drake, who was such a distinguished member of the Turner commission.

As I indicated previously, we agreed that there should be periodic reviews of the state pension age to reflect changes in longevity and the need for people to fund their retirement and also to achieve a fair balance between generations. The question is how to achieve that, and we have grave concerns about the way in which the Government are approaching this matter.

As it stands, the Bill simply says that the Secretary of State shall review the rules about pensionable age. That leaves us with some significant gaps. There is insufficient information about the kind of review mechanism that there might be. There is also insufficient detail about who will conduct a review or how it is to be done, and there seems, on the face of it, to be insufficient scrutiny by Parliament of any recommendations that emerge. Perhaps the Minister will clarify that for us when he replies.

At the heart of this lies a very important question: how do we enable people to have confidence in the system? If we want to encourage people to save for their retirement and we need them to save more, they need to trust the Government, to trust Parliament and to believe that their pensions are safe in our hands. The public need to know that they will not be at the mercy of political expediency and will be protected from any adjustments that might otherwise be made too quickly. After all, they may be nervous about this. There has been a succession of changes to pensions legislation, pensions levels and the state pension age. To suggest just one example, under the previous Labour Government the number of years of contributions required to get a basic state pension—

[The Deputy Chairman of Committees (Baroness Fookes)]

My Lords, we have to adjourn the Committee for 10 minutes.

19:14

Sitting suspended for a Division in the House.

19:24

[Baroness Sherlock]

My Lords, as I said, there has been a succession of changes to pension policy and legislation. One key example is that under the previous Labour Government the number of years of contributions required to get a full basic state pension fell significantly, only for there to be a change of Government and for the number now being proposed to shoot back up again. The Chancellor did not help by giving the appearance of using the Autumn Statement to make an ad hoc announcement about the raising of state pension age. Once the dust settled, that turned out to be nothing more than what was already in the Pensions Bill and was therefore not necessary. However, that ran the risk of reinforcing the impression that pensions policy is made on the hoof, and we need to tackle that.

If we are serious about getting Britain saving for retirement, we need a proper, cross-party consensus on the way forward for settling the state pension age. Rather than simply being a matter for the Secretary of State, as the Bill proposes, we need a proper external panel which has the kind of cross-party and independent representation which will reassure the public and give confidence to parliamentarians from across the spectrum. We need a review mechanism that is clearly understood, a review body that is clear in purpose and function and ways of working, and clear parliamentary scrutiny of its finding—the kinds of things that will come from the report.

I know that the Minister will want to be reassuring about the Government’s intentions. In another place, the Pensions Minister said, in the face of pressure from the Opposition, that he had always envisaged a model such as the Hutton review, where the review is chaired by someone who people respect and who has credibility across the spectrum. That point was underlined by the Minister at Second Reading. I am happy to accept that the current Pensions Minister means that. However, even if that proposal were satisfactory, he will not always be Pensions Minister. I mean no disrespect when I say that I hope very much that in 18 months he will not be Pensions Minister any more. I can recommend my right honourable friend Mr Gregg McClymont, should anyone be looking for an alternative. However, Mr Webb, even when he is Pensions Minister, cannot bind the hands of his successors, even in this Parliament, never mind a future one. That is why this matter needs fixing in legislation.

Our amendment proposes simply that the review body should include representatives of the opposition parties and of the Cross-Bench Members of this House to ensure that Parliament as a whole is at the heart of this process. It would also include representatives of trade unions as those who represent those who are spending their ever-longer working lives saving for retirement. This broader representation on the review panel will give people confidence that a wide range of views will be heard. This amendment does not seek to shape the remit beyond that of having a range of competent and representative people sitting on the review panel. I urge the Minister to accept it.

[Lord Freud]

My Lords, I start by acknowledging the expertise and experience of the noble Baroness, Lady Drake, as a member of the Pensions Commission, on which she was able to rest when she moved this debate.

The purpose of the review is to inform the Secretary of State. Its job would be to collect and analyse the latest data, compiling a report to give the Government of the day the information they need to make a decision. Of course, we are all keen that the Secretary of State receives a report that is both impartial and credible. We appreciate the attraction of a panel to ensure that a wide range of views are reflected in the compilation of the report. However, we have been clear that we do not think that prescribing a committee is the right way to go. We do not want to restrict future Governments by prescribing exactly what the review looks at and who is doing the looking. There is greater merit in allowing Governments to choose whether to appoint a single reviewer—as with the review of public service pensions by the noble Lord, Lord Hutton—or a larger commission, such as the Pensions Commission. Indeed, the latter, set up by the previous Government, was made up of three individuals, two from the worlds of academia and business, neither of which, incidentally, was mentioned in the amendment.

Both of those cases show that a legislative underpin is not required to set up a review that can win cross-party and wider public support and that there is no consensus on where is the best place to find the right people. We do not think that the proposal by the noble Baroness, Lady Drake, to set up a permanent commission—an NDPB or a standing commission, as she put it—is appropriate. That kind of structure is simply not necessary for a review that will come together and publish a report on a single issue, wide-ranging though it may be.

[Baroness Hollis of Heigham]

Is that so very different from the Low Pay Commission, which is also a single issue?

[Lord Freud]

The Low Pay Commission reports on a much more regular basis than the five years envisaged here. To pick up the timings that we have experienced, there is the example of Independent Public Service Pensions Commission. The noble Lord, Lord Hutton, was appointed in June 2010 and reported some nine months later, in March 2011. In the intervening period the noble Lord held two calls for evidence, undertook a research event, published an interim report and published his final report. It is clear that a lot can be done in the space of a year, and that is the kind of period that we imagine is about the right length of time required for a review.

NDPBs also tend to look at a wide variety of regularly changing data in the areas of longevity, healthy life expectancy, socioeconomic variations, trends in the labour market and so on, and they tend to be published on a much less regular basis than this. I want to be clear, though, that the groups indicated in Amendment 57A and many others should all be encouraged to participate and contribute in the process. Indeed, the review has been designed to ensure that both Parliament and stakeholders will have ample opportunity to participate in the process and shape the outcomes. Furthermore, because the reviews will be regular, stakeholders may indeed be able to better prepare and contribute than they are now.

Of course, if the Government decide to bring forward changes to the pension age, then those changes must be secured through primary legislation and subjected to the full scrutiny and approval of both Houses, as now. However, to have such extensive and political input at the data-gathering and analysis stage risks stymieing the process before information can even be provided to the Secretary of State. Indeed, the House of Commons Disqualification Act 1975 prevents MPs sitting on many public bodies, precisely in order to avoid politics influencing their work.

Regarding the publication of this report, subsection (6) of this clause requires all reports prepared under the clause to be published. This means that both the Government Actuary and the report from the independently led review, including any recommendations that that component of the review makes, will be published, so all the evidence that has been taken will be made available. Every report will be laid in Parliament and published, including the report from the Secretary of State. As I said before, any proposed changes will require primary legislation.

It is for the Government of the day to put forward proposals resulting from the reports and to present any legislation to Parliament. Responsibility for publishing any overall report on the outcome of the review therefore has to remain with the Secretary of State. I hope that I have been able to provide some reassurance about how we envisage the review working and why. In this case, less is more. I urge the noble Baroness to withdraw the amendment.

[Baroness Drake]

I thank the Minister for his comments. I certainly was not trying to overleverage my experience on the Pensions Commission; that was not necessarily the main driver for my amendment. I shall respond to some of the points that he made. In Clause 26 the periodic review on the state pension age is a standing arrangement, which is why it provides an opportunity to create an independent commission in support of that arrangement. It is not a case of a one-off job and then it finishes, otherwise it would not be in the Bill. It is obviously intended as a standing arrangement, which is meritorious; I do not disagree with that. However, that is materially different from a one-off commissioning of something. It says that if you are going to have this standing arrangement and periodic reviews and assess whether the current rules on state pension age are fit for purpose, that lends itself to being supported by a commission on a standing basis.

Again, on reading Clause 26 it is not simply dealing with the narrow issue of the state pension age rules, it is also quite clearly saying it will review other factors relevant to the review. The implication in that must be that the Government recognise that complexities would arise around the demographic challenge. That would need to be understood in order to influence policy decisions across a range of issues. Again, a standing commission would be able to assist in looking at that wider range of factors that would inform the review.

I also repeat the point I made in moving the amendment because it is really important. The long-term management of public finances, particularly in respect of responses to the demographic challenge, would be really helped by having a standing commission. The fact that so much progress was able to be made on a political consensus that we are still getting the reward from was because there was a commission. It was able to present the issues and the case to Governments and political parties, as well as the country as a whole, in such a compelling way that it drives, almost from a sense of political responsibility, a consensus on the long-term management of public finances on that issue. It would be a shame to lose that.

Sustainability is a long-term project. Secretaries of State change, Governments change, but as a society we want a political system that delivers rational policies that give us good long-term outcomes. The one thing that characterised pensions in the last 20 years of the previous century was the incremental decisions that Government after Government made about both the private and public pension system. When you stood back you could see the complexity and the dysfunctionality of what the political system, motivated as it might have been in each instance in a very positive way, created. Certainly, when employers started to withdraw from the private pension system it started to show the weaknesses of our political system.

If we are looking for long-term effective management of public finances, the sustainability of the private pension system and the demographic response over the long term this strikes me as a way to go forward. To take an anecdotal example, I remember telling my husband that I was about to go and tell the whole country that they had to work significantly longer and we could not even promise that even the first forecast of how much longer they would have to work would not be increased further in the light of experience. He thought that I was committing career suicide and could not believe that I could possibly do that. I explained to him that the evidence was so compelling and if one cared desperately about a pension system and the interests of the people in this country you had to have the courage to take that debate out to people.

I can remember the CBI being horrified at the thought of having to retain older workers. I can remember trade unions being mortified at the prospect of the default retirement age being raised or abolished because it was a stalking horse for raising the state pension age. However, because you had a commission you could have a much more positive influence on that debate. I remember, as I am sure the Minister will experience, lots of people from around the world, particularly in Europe, asking how the UK managed to get such a consensus from the country about the reforms that needed to be made to the pensions system and the state pension age in particular. I genuinely think that one of the reasons that was possible, compared with some of the problems that are being experienced in other countries, is because the analysis and the narrative that were taken out to people were not just the product of party politics. They were the product of a commission that sought to identify the issues and the choices on the basis that even if you did not make a choice, that by definition was a choice because you would be inevitably moving along a certain line.

I think that that is right. There are 60 million people in this country who have an investment over the very long term, either for themselves, their children or their grandchildren, so we must get this right. What is there to fear in trying to sustain the political consensus by having a group of independent people who assist that process by being able to assist with the narrative and identify the issues? It is that passion that makes me move the amendment, not just that I happened to be on a commission at a point in time. I beg leave to withdraw the amendment.

Amendment 53 withdrawn.

Amendments 54 to 58 not moved.

Clause 26 agreed.

Committee adjourned at 7.41 pm.

House of Lords

Monday 13th January 2014 Lords Chamber

Monday, 13 January 2014.

14:30

Prayers—read by the Lord Bishop of Newcastle.

Banks: Payment Protection Insurance

Monday 13th January 2014 Lords Chamber

Question

14:37

Asked by

[Lord James of Blackheath]

To ask Her Majesty’s Government what plans they have to require all banks which have refunded payment protection insurance (PPI) monies to customers to send each such customer a statement, without charge, setting out how much money has been refunded under each of the three separate elements comprising a PPI payout.

[Lord Newby]

My Lords, the Financial Conduct Authority requires banks to explain clearly to customers, free of charge, how their PPI redress offer has been calculated. The FCA is actively monitoring banks to ensure that they are complying with this requirement. If a bank has not provided this information, or it is not clearly presented, the consumer can bring a complaint against the bank and, if it is not resolved, raise a complaint with the Financial Ombudsman Service.

[Lord James of Blackheath (Con)]

I thank the noble Lord for that Answer, but will he take it into account that the banks got off on the wrong foot with the repayment programme by refusing to write a letter to everybody telling them that they owed them some money? It was left to customers to initiate their own claim and there is no certainty that many have not slipped through the net. The noble Lord’s Answer does not allow for the possibility that there are a great many people out there who have no knowledge that a great deal of money is still owing to them.

[Lord Newby]

My Lords, I can assure the noble Lord that the FCA is taking this matter seriously and I am sure that someone would be happy to meet him to discuss this in more detail. The FCA is already looking at this general area as part of the thematic review it is currently undertaking into PPI complaint handling.

[Lord Wrigglesworth (LD)]

My Lords, does my noble friend not agree that the breathtaking scale of the PPI scandal is matched only by the volume of telephone calls that have been received by many people throughout the country, offering to help, and taking a slice of the proceeds that are then obtained? Will the Government look into this to see whether another scandal is not under way?

[Lord Newby]

My Lords, I think that all Members of your Lordships’ House will have had such telephone calls. I can reassure the noble Lord that the Government have acted in this area. During last year’s passage of the banking reform Act, we gave the claims management regulator the power to impose penalties on claims management companies which make speculative claims. We are also giving the regulator more enforcement staff and requiring claims management companies to pay for this extra effort.

[Lord Campbell-Savours (Lab)]

But they are still doing it.

[Lord Newby]

My Lords, every call made in respect of PPI is not necessarily inappropriate. Some are. Many people have used claims management companies because they did not feel confident going through the process themselves. I accept that there has been abuse. The key thing we have done is to give the regulator power to crack down on firms which make speculative claims to the banks when there is no justification for it.

[Lord Eatwell (Lab)]

My Lords, the noble Lord has not answered the point made by the noble Lord, Lord James, which was that individuals have to apply to the banks for restitution of PPI claims rather than the banks recognising the obligation that they know they have. Why are the Government letting the banks off the hook?

[Lord Newby]

My Lords, the Government are not letting the banks off the hook. The banks have paid out almost £13 billion in respect of PPI claims, which is about 70% of the total we think is payable, and a lot more claims are in the pipeline. The concern raised by the noble Lord in his Question relates primarily to the way in which the detailed amounts were calculated and the extent to which individuals can understand those calculations from the material that they receive from the banks.

[Lord Soley (Lab)]

My Lords, is not the problem around individual complaints that very often those people who do not claim are the most vulnerable?

[Lord Newby]

My Lords, a great deal of publicity has been generated on this issue, and consumer organisations are looking at how they can do more. As I have said, a very considerable number of claims have already been made.

[Lord Davies of Oldham (Lab)]

My Lords, the noble Lord will recall that in 2011 the chief executive of Barclays said that the period of remorse and apology should now be over. Since then we have had this scandal, described by the noble Lords, Lord James and Lord Wrigglesworth, as breathtaking and utterly unacceptable. We have Lloyds Bank, which is still being funded from the public purse, in the middle of it. Since 2011, we have had the rigging of LIBOR and we have had RBS, another publicly supported bank, handing out massive bonuses while declaring a pre-tax loss. When are the Government really going to get tough with the banks and make sure that the Vickers reforms are honoured in spirit and in practice?

[Lord Newby]

I think that the noble Lord must have been somewhere else in recent months because I seem to remember spending many days over last autumn in your Lordships’ House putting through, under the banking reform Bill, the tougher new approval regime for senior bankers, instituting the new criminal offence of reckless misconduct and more generally looking at ways of vetting the suitability of bank staff to a greater extent. The legal framework within which the banks operate moving forward is substantially different from that in place when this Government came into office, and it will make it much more difficult, although not impossible, for many of the problems we have seen in the past to recur. It will be much easier for the regulators to take effective action if they think it is necessary to do so.

[Lord Elystan-Morgan (CB)]

My Lords, it is not for the claimant to put his or her claim forward, but for the banks to justify the holding of moneys to which they are in no way entitled. If the banks know that to be the case, are they not deliberately withholding those funds from their rightful owners? If they do not know, although in most cases and with few exceptions they should know, that puts them constructively in a position of trust with regard to the holding of those moneys. Is not that the way to look at it?

[Lord Newby]

My Lords, there is a certain amount in what the noble Lord says, but I repeat what I have said: there has been a huge amount of publicity around this issue and not only have a very considerable number of people made claims, but £12.9 billion has been paid out in respect of those claims.

[Lord Hamilton of Epsom (Con)]

When will my noble friend go a little further than Vickers and actually break up those banks that are too big to fail and seem also to be too big to manage?

[Lord Newby]

My Lords, again this is something that we have debated at some length. The Government have taken effective steps to ring-fence retail banks and to make sure that a resolution position is in place so that if they get into difficulties, there is a prearranged way of dealing with that to ensure that the Government are not faced with the problems they had in 2008, when essentially all the banks which got into financial difficulties had to be propped up.

Businesses: Business Rates

Monday 13th January 2014 Lords Chamber

Question

14:45

Asked by

[Lord Borwick]

To ask Her Majesty’s Government what assessment they have made of the impact on high street businesses and employment of measures relating to business rates announced in the Autumn Statement.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)]

My Lords, our £1 billion package will benefit all 1.7 million business rate payers. The measures announced in the Autumn Statement include the annual increase to be capped at 2%, around 360,000 businesses to receive 100% small business relief, and around 300,000 shops, pubs and restaurants to get a £1,000 discount. The package exceeds expectations and was welcomed by the CBI and the British Retail Consortium, and it will provide the support that high streets need to grow and provide employment.

[Lord Borwick (Con)]

I thank my noble friend for that Answer, but does she agree about the importance of the problem of empty shops on the high streets, made worse by empty rates introduced by Gordon Brown and the Labour Party some time ago? What action are the Government taking to address that matter?

[Baroness Stowell of Beeston]

My noble friend is right that this pressure on businesses was made worse by the tax hikes on empty premises introduced by Gordon Brown. To help to relieve that pressure, and as part of our £1 billion business rate package announced at the Autumn Statement, we also included a relief that provides a 50% discount for 18 months for new occupiers of retail premises that have been empty for a year or more. This is on top of exempting all empty new-build property from business rates for 18 months.

[Lord Naseby (Con)]

Is my noble friend aware that the Government’s actions have been exceedingly well received and that many in the business community would like to say “Thank you for listening for once”? Nevertheless, is it not true that the business rate today, particularly in the retail sector, where more than 20% of trade is done online and those companies pay no business rate, is no longer fit for purpose? Therefore, will Her Majesty’s Government look to review in toto the impact and structure of the business rate as we move forward?

[Baroness Stowell of Beeston]

My noble friend is right that the measures that we introduced were born out of listening to businesses, and measures have been introduced that support them to grow the economy without adding any extra burdens on other taxpayers. I make two points. Online retailers do, of course, still pay taxes, including business rates, on the properties that they use to facilitate their businesses. As to the business rate system itself, as my noble friend will know, my right honourable friend the Chancellor keeps all taxes under review. He is certainly looking at the administration of business rates and this review will take place later this year.

[Lord McKenzie of Luton (Lab)]

My Lords, we are in the era of the business rate retention scheme but there are emerging representations from councils, via the LGA, that currently the risks of the new system outweigh the rewards. This is partly to do with appeals but also business rates avoidance—exploiting the current relief and discount framework. What specifically are the Government doing to address these concerns about business rates avoidance?

[Baroness Stowell of Beeston]

The noble Lord will know that one of the changes that we have introduced is to allow local authorities to retain 50% of all the business rates that they raise. This is so that they can enjoy and benefit from business activity in their area. We have also changed the law so that local authorities are able to introduce their own discounts, and since April this year central government is funding 50% of those discounts. We think this is the right thing to do to make sure that there is the incentive there for new businesses and local authorities to receive the benefit from that activity.

[Baroness Wheatcroft (Con)]

My Lords, many of the shops in secondary retail locations will never return to retail. Given the figures that we have seen on the growth of online shopping, it seems inevitable that they will remain empty. Does my noble friend agree that the sensible thing is for local authorities to encourage the ground-floor units, as well as those above, to turn into residential accommodation?

[Baroness Stowell of Beeston]

My noble friend is right to highlight the changes in the way that consumers are shopping and spending their money. We have introduced, as she has acknowledged, some flexibility to high streets and are currently consulting on additional measures that will allow towns and high streets to adapt even further to this new world.

Housing: Leasehold Valuation Tribunal System

Monday 13th January 2014 Lords Chamber

Question

14:50

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government what assessment they have made of the impact on leaseholders of changes to the operation of the Leasehold Valuation Tribunal system, introduced in October.

[Baroness Gardner of Parkes (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interest as listed in the register.

[Lord Ahmad of Wimbledon (Con)]

My Lords, in October 2013, a revised fee remissions scheme was introduced across the courts and tribunals system. The impact of the revised remissions scheme will be reviewed after October this year.

[Baroness Gardner of Parkes]

I thank the Minister for that. Can he confirm that people will not be charged management costs unless their lease specifies that they must be and that they will not be obliged to pay—win or lose—the head lessee’s or freeholder’s slice of the action?

[Lord Ahmad of Wimbledon]

My noble friend comes to this issue with great experience and has been a long-standing campaigner in this regard. She raises the issue of administration charges on leases. Some leases contain covenants for the recovery of legal costs, which is a slightly different issue from the recovery of costs as service charges. I understand there have been calls for the Government to consider the feasibility of creating a provision to prevent the recovery of administration charges, similar to the protection over service charges already provided under Section 20C of the Landlord and Tenant Act 1985. We understand the concern that this topic provokes but, as I am sure my noble friend will agree, we need to look at this very carefully and consult quite widely before deciding on any action that can be taken in this regard.

[Lord Beecham (Lab)]

My Lords, I declare an interest as I have some interest in a leasehold flat. The former cap of £500 on costs has been removed, as the Minister has said, and the Church Commissioners, of all people, recently persuaded the court that a default judgment over service charges allowed them to forfeit a lease. Furthermore, in another case, a landlord recovered from two pensioners £40,000—not £500—as an administrative charge in a dispute over service charges. Is it not time that the Government acted to replace leaseholds for residential properties with commonhold?

[Lord Ahmad of Wimbledon]

My Lords, as the noble Lord will know, the Government have already taken forward the issue of legal costs in relation to service charges. I have already alluded to the Section 20C order, as provided for in the Landlord and Tenant Act 1985, which allows a leaseholder to seek for those service charges—if the landlord is claiming that—to be voided. He also raised the point about the £500 fee. Normally in tribunal cases, we have found that parties pay their own costs, and it is rare for costs to be awarded in the property chamber itself. Only where the tribunal considers that a party has behaved unreasonably could it make a costs order against them.

[Baroness Gardner of Parkes]

My Lords, I remember debating the Bill very carefully here in 1996, because it was stated that the total costs would be recovered from the applicants, down to,

“the milk for the office cat”.—[Official Report, 10/7/96; col. 348.]

These charges, under the previous system, were limited to a maximum of £500 and the only abuse was when the other side charged it back to all the leaseholders in the block, even if only one had brought the case. Now, it is a different matter. You have to put up the £500 even to take your case to the tribunal and you have to pay further costs all the way. Can we at least be assured that if, as the noble Lord says, it is not possible to limit it in some cases, the costs will not be charged to all the tenants, as is now the case, instead of just to the one person who brought the case? Will the court, or the First-tier Tribunal as it is now called, have the power to determine where these costs are actually justified?

[Lord Ahmad of Wimbledon]

Bearing in mind the series of questions that my noble friend has asked, perhaps writing to her in this regard would be more appropriate and beneficial.

EU: Free Trade Agreements

Monday 13th January 2014 Lords Chamber

Question

14:54

Asked by

[Lord Trimble]

To ask Her Majesty’s Government what progress is being made in European Union free trade agreements.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

The EU is currently negotiating 12 free trade agreements, including those with major trading partners such as the United States and Japan. The EU has also reached conclusion on 10 more agreements that have yet to enter force, adding to the 50 that have already been agreed and are now active. These negotiations are complicated endeavours, but I believe that the EU has made good progress. The Government will continue to be a champion for free trade and of the benefits that it brings to this country.

[Lord Trimble (Con)]

I thank the Minister for that Answer, which draws our attention to the huge number of free trade agreements that are in course. I would direct his attention to the EU-US free trade agreement. In that connection, has he seen the projections that were issued of the benefit there would be to both the EU and the US, which, interestingly, appears to be roughly evenly divided? Does he agree that the assumption of a virtually equal division of the benefits should be revisited in the light of the huge competitive advantage that the US now enjoys, thanks to its access to abundant supplies of cheap energy, whereas we are increasingly locked into expensive energy to the disadvantage of our businesses?

[Lord Livingston of Parkhead]

My noble friend is right to draw attention to TTIP, the US-EU agreement, which will indeed bring substantial benefits. I believe that the UK is expected to gain around £10 billion a year, which is about £400 for every family in the UK, the US is expected to gain about £80 billion and the EU about £100 billion, so there are very substantial gains. In addition, there will be very substantial gains for the rest of the world, which are believed to be in excess of £80 billion.

I take my noble friend’s point that energy presents some challenges. Certainly, we hope to see the US exporting energy, so that the benefits of shale to global energy prices would help all industry rather than just those in the US. In any event, we believe that helping to have openness and convergence of standards will assist all citizens, not just in the EU but in the US and around the world.

[Lord Pearson of Rannoch (UKIP)]

My Lords, if we left the political construct of the European Union, is there any reason why, as one of the world’s largest economies, we could not maintain our existing trade agreements and sign new ones with Commonwealth countries and the markets of the future? Surely we would enjoy our own seat on the World Trade Organisation.

[Lord Livingston of Parkhead]

If we were to exit the EU, there would be no certainty that any of the free trade agreements would actually continue. While the UK is a significant economy in its own right—and that is important—these agreements take many years to negotiate. Even assuming that we could renegotiate them, we would not have the leverage that the EU has, as the single largest trading bloc in the world, to make such agreements. Therefore, I think that it would be very difficult to replicate them, particularly within a short space of time.

[Baroness Kinnock of Holyhead (Lab)]

My Lords, will the Minister comment on progress on the negotiations between the European Union and African, Caribbean and Pacific countries, which have now been going on for 10 years and are meant to focus on development and reciprocal free trade? Is it not the case that there is a strong chance that, unless the October deadline is met, we will see an unprecedented situation wherein African countries will lose their preferential access to European markets?

[Lord Livingston of Parkhead]

The noble Baroness makes a good point in raising those countries. There has been a lot of focus on the most developed nations, but we also have an obligation to continue to push the economic partnership agreements that we have been trying to make with Caribbean and African countries. However, I would stress that there was a major breakthrough with the WTO agreements. The WTO agreement to aid trade facilitation is worth around £100 billion to the world economy as a whole and the vast majority of that will go to developing nations, which I think is to be welcomed. Certainly the UK will continue to push for trade agreements with Caribbean, African and ASEAN countries. We are great proponents of free trade and of the benefits that it brings for all nations involved in it.

[Baroness Suttie (LD)]

My Lords, does my noble friend the Minister agree that concluding the EU-India free trade agreement would bring enormous benefits to the economies of both sides and, therefore, that finding solutions to the remaining obstacles should be a priority this year?

[Lord Livingston of Parkhead]

Indeed, the Indian agreement would be of great benefit. Of course, India is one of the major powers and is growing fast. However, as we know from our debates in this House, there are challenges with internal Indian beliefs on trade and there are elections in India in, I believe, April this year. Discussions are ongoing, and I believe there will be discussions in Davos with the Indian trade Minister regarding progress on this agreement. We will certainly be pushing the Indian Government for a wide-ranging agreement, but whether that will be feasible this side of the Indian election is extremely doubtful.

[Lord Davies of Stamford (Lab)]

Will the EU-US prospective trade agreement as currently envisaged continue to allow the United States to ban the export of crude oil or natural gas, as they do at the present time?

[Lord Livingston of Parkhead]

The discussions are still ongoing. Clearly, we would like to see free trade of all descriptions, but the TTIP agreement will be largely focused on reducing import tariffs and particularly on the convergence of rules, which will help all countries. We would certainly like to see its energy exports being made available all around the world, as is the case with UK exports from the North Sea.

[Lord Tugendhat (Con)]

Does the noble Lord agree that the advantages of TTIP to the consumer need to be more emphasised? At the moment, most of the emphasis is on the benefits to producers on both sides of the Atlantic, but in terms of price reduction and a widening choice of products and goods the TTIP stands to do the consumer a great deal of good as well.

[Lord Livingston of Parkhead]

My noble friend is entirely right that the TTIP will bring a lot of benefit to consumers. When you get a convergence of standards, global models being made and lower tariffs, prices will come down and consumers will have more choice, not just in the UK or the EU but in the US as well. Certainly, we feel it is very important—Her Majesty’s Government have done a number of pieces of good work on this—to highlight the benefits that free trade will bring to consumers on both sides of the Atlantic. I absolutely agree with my noble friend that it is very important to highlight the positive impact that will arise.

[Lord Hannay of Chiswick (CB)]

Does the Minister agree that it is a very encouraging sign that the US Administration are now pressing for fast-track authority for this agreement, as with the Pacific one, and that this is essential if the agreement is to go through in a reasonable amount of time? Will the Government do what they can to let their friends in Washington know that this fast-track authority is really important and to let our friends in Brussels know that this is a sign that the negotiation really is for serious?

[Lord Livingston of Parkhead]

Indeed it is. The timetable for TTIP is very aggressive, with the aim of completion by 2015, which would be almost unprecedented. I met with the US ambassador to the UK just before Christmas and we discussed TTIP at some length. Certainly, his enthusiasm for it is there, albeit that I recognise that not everyone in the American political system feels that way. However, we made that point very clearly. The Prime Minister said at the G8 conference that this is a once-in-a-generation opportunity and, understandably, I would not disagree with the Prime Minister on this issue.

[Lord Howarth of Newport (Lab)]

Is the Minister confident that free trade agreements would be good for African economies? Historically, did not the US, our own country and the countries that are now successful—the industrialised countries of south-east Asia—build up their economic strength behind protectionist barriers? Is it not the case that when the countries of the advanced West pressure African countries into free trade agreements, they are doing so not for the benefit of those African economies but for themselves?

[Lord Livingston of Parkhead]

As I indicated earlier, from the free trade agreement that was recently conducted in Bali, for example, the biggest beneficiaries by far will be the developing nations. The improvement of trade facilitation will yield £100 billion in benefit, most of which will come to them. Actually, a lack of free trade, rather than the absence of it, has been the challenge for a lot of developing nations. The UK will continue to push to see free trade around the world, not just with developed countries but with developing countries.

[Lord Avebury (LD)]

My Lords, in all these agreements that the European Union makes with third parties, there is a standard clause on human rights. Can he tell me of any such agreement in which that clause has ever been invoked?

[Lord Livingston of Parkhead]

My noble friend is correct that EU agreements, including for instance the one with Canada, have standard clauses on human rights. I am not aware that any of these clauses have been invoked, although it is feasible to suspend all or part of the agreement if human rights have got worse in a particular country. I think that the engagement in free trade and the free movement of people, services and goods, is something that should help human rights. I certainly think that ensuring that human rights are on the agenda when we try to negotiate is a major help.

[Lord Alton of Liverpool (CB)]

My Lords, without doubting the importance of free trade agreements to lifting an estimated 800 million people in the world out of starvation, despair or poverty, will the noble Lord nevertheless take into account the exploitation of children in a country like India, for instance, or exploited labour elsewhere in the world? Will he tell the House what balance is struck in determining free trade agreements in relation to protecting the rights of those who are likely to be exploited?

[Lord Livingston of Parkhead]

The challenge of child labour in certain countries can happen irrespective of free trade, but I think that free trade will actually help through the exposure and openness of the economies, which is a major help to improving the conditions of workers in individual countries. That is something we will continue to push for. As I said earlier, we also put human rights clauses in the various agreements and the UN has certain statements on human rights, which we also look to comply with. It is an important subject, but it is not peculiar to free trade agreements.

[Lord Hamilton of Epsom (Con)]

My Lords, is it not inevitable that, as long as European energy prices are double—or, in the case of Germany, triple—that of the United States, there is inevitably going to be a transfer of manufacturing to the United States?

[Lord Livingston of Parkhead]

As I said earlier, energy prices are a significant issue for EU-US relations, but they are not the only issue and there are many industries that are not wholly reliant on energy prices. In fact, energy prices are just one part of the total package. We would also look to see the exploitation, for instance, of alternative energy sources in the UK, which will hopefully act to balance some of that. With that in mind, I was delighted to see the comments from the Prime Minister about looking for alternative energy sources. The UK, which is already an energy producer through conventional means, is also looking at alternative sources of energy, and that is going to be very important for the future of the UK.

Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Monday 13th January 2014 Lords Chamber

Report (1st Day)

15:07

Relevant document: 3rd Report from the Constitution Committee.

Clause 1: Prohibition on consultant lobbying unless registered

Amendment 1

Moved by

[Lord Hardie]

1: Clause 1, page 1, line 5, leave out “carry on the business of consultant” and insert “engage in professional”

[Lord Hardie (CB)]

My Lords, this amendment seeks to extend the legislation requirements introduced by Clause 1 to all lobbyists who are engaged in that activity on a professional basis. If the amendment is agreed, incidental amendments will be required, but these can be included at Third Reading. I do not intend to rehearse my observations at Second Reading or in Committee but will set out my reasons for this amendment.

The Explanatory Notes to the Bill state that the main purpose of the provisions in the Bill on lobbying is to ensure that people know whose interests are being represented by consultant lobbyists who make representations to government. To that end, Clause 1 requires that those carrying on the business of consultant lobbyists must register. They cannot operate unless they are entered in the register. I agree that lobbying undertaken in an open, transparent and responsible manner is integral to our democratic system, but it should be regulated to ensure, as was said by the Minister at Second Reading, that we dispel any public perception that,

“certain powerful organisations and individuals could exert a disproportionate influence on government”.—[Official Report, 22/10/13; col. 893.]

The registration system proposed in the Bill will not dispel that public perception. It is limited in scope and is confined to those businesses above the VAT threshold which are involved in lobbying as consultants for others. It does not apply to lobbyists employed by those firms of consultant lobbyists, nor does it apply to national or multinational companies or organisations which seek to exert influence on the Government and choose to do so by using in-house lobbyists. The public want to know who is engaged in lobbying the Government and are not interested in whether the lobbying is undertaken by consultants or in-house lobbyists. In short, the decision to restrict registration to consultancies is fundamentally flawed.

The desire to include in the provisions in-house lobbyists is not academic. They represent about 80% of the lobbying industry. Moreover, the statutory register would replace the current voluntary register operated by the Public Relations Consultants Association, which is the professional body that represents United Kingdom PR consultants, in-house communication teams and individuals. Those who have chosen to register with PRCA include the largest consultancies in the industry as well as the in-house teams of various organisations. Registration in the voluntary register requires members to update their entries about staff and clients on a quarterly basis and to sign up to the PRCA’s code of ethical conduct, which is supported by rigorous disciplinary structures. It is appropriate that there should be a statutory register, assuming that it is supported by enforceable codes of conduct—a matter to which we may return in later amendments.

However, it is unlikely that the voluntary register will survive after the introduction of a statutory scheme and, in any event, it might be confusing and undesirable to have more than one register. The existing provisions would have the effect of removing from the public domain information that already exists about certain in-house lobbyists. Rather than concealing such information, it would be more appropriate to extend it to those lobbyists who have not already registered on a voluntary basis.

I invite your Lordships to support this amendment for a number of reasons. First, it will increase transparency of lobbying. Secondly, it will give the public greater confidence in the political system by affording them greater powers of scrutiny of lobbying activity than is offered by the Bill. Thirdly, it will ensure that they are not denied information about the activities carried out by the vast majority of lobbyists in this country represented by those employed by large national and multinational companies representing the energy sector, alcohol, tobacco and gaming industries and many other activities affecting people’s lives. It is only right that the public can judge the extent to which government policy has been influenced by lobbying activities and the extent of such activities. The consequences for the public are the same, whether lobbying is by a consultancy firm or by in-house lobbyists. Finally, this amendment will ensure that the benefits of the current voluntary system of registration are maintained and indeed enhanced. I beg to move.

15:14

[Lord Norton of Louth (Con)]

My Lords, I will speak briefly, simply because my Amendment 136 is grouped with the other two in this grouping. My amendment is slightly different from the others, and signals what we will need to do if some of the amendments we are discussing this afternoon are not accepted. My amendment seeks to change the title of the Bill. As it stands, it is Transparency of Lobbying, but the Bill does not enhance transparency and it is not actually about lobbying. It is about lobbyists; it is about status, not about activity. There is a mismatch between the Short Title and the Long Title. The Long Title makes clear what the Bill is about: it is about the registration of lobbyists; it is not about transparency of lobbying. As I say, this is really to signal later debates, but unless the Bill is changed quite substantially, we will have to amend the title to bring it into line with what the Bill actually contains.

[Lord Campbell-Savours (Lab)]

My Lords, I want to speak for less than a minute; I spoke at some length on this matter in Committee. The Bill is deceiving the public. The public expect the matter of the registration of lobbyists to be dealt with in this legislation. However, Parliament is now considering a Bill which excludes the vast majority of people in the industry. I object and I hope that the amendment of the noble and learned Lord, Lord Hardie, is accepted by the House.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I also support Amendments 1 and 11. I hope that I will not also have to support the amendment tabled by the noble Lord, Lord Norton, as we hope that we will have made the changes that will make supporting it unnecessary. Amendment 1 also stands in the name of my noble friend Lady Royall and myself. It is already clear that establishing a register only of consultant firms would add nothing to the existing voluntary register. It would omit hundreds of employers—the in-house, public bodies, charities and, perhaps most importantly, trade associations—as well as more than 1,000 individuals who work in this industry.

We have heard the Government boast about being part of the Open Government Partnership, and Ministers say that the public should be able to see who is lobbying Ministers. However, as we know, the Bill will not do that. It will only tell us the companies for which, for example, Bell Pottinger has had direct contact with a Minister over the past quarter. It will not name the individual lobbyists concerned, nor will it identify the company on whose behalf that meeting took place. So if a lobbying company met a Minister, for example, on behalf of a defence company, we still would not know that. In the hypothetical Bell Pottinger case, it has, according to Marketing Week, some 900 clients; so we would only know that Bell Pottinger was meeting somebody on behalf of one of those 900 clients but not which one it was. If the Minister, instead of meeting a consultant, met the actual defence company itself, or its trade association, that would not appear on the register at all, because the lobbyists would be direct employees.

This is very different from the United States where, we understand, Mr Cameron’s election guru, Jim Messina, has just taken up a job with the American Gaming Association, which is about to lobby on online gambling. That will all be declared, but in the UK, there will be no record of such lobbying by organisations such as the Association of British Bookmakers, despite the public interest in knowing who is lobbying the Government, in this case, on gambling.

According to today’s Daily Mail, the Chancellor took the boss of one of the world’s biggest makers of betting machines on his trip to Beijing. That is something that the company would not have to declare because it would be doing that lobbying direct. It is interesting that the Rank Organisation discloses far more than the Bill actually asks. It has decided to set out the spending that it makes in its government and regulatory affairs work—for example, £115,000 to Luther Pendragon, Ernst & Young and FTI and another £88,000 in membership fees to three trade organisations: the Bingo Association, National Casino, and the Remote Gambling Association. However, none of those would be required under the Bill. So, congratulations to Rank but not to the Government.

Similarly, we would know nothing about meetings between the big six energy companies and HMT or DECC officials because they use their direct staff for that. Or consider the anti-electronic-cigarette lobby, largely funded, I understand, by the pharmaceutical industry, which produces nicotine replacement therapy and ideally would like e-cigarettes off the market. Johnson & Johnson, GSK and Novartis have teams dedicated to that lobbying work, and none of that would be known under the current provisions.

I am afraid that the Bill is rather a damp squib and, unless we amend it, it will exclude virtually all business lobbying, whether done by the companies themselves or by their trade bodies. Worse, even where one of the big agencies such as Weber Shandwick or Bell Pottinger register, we will still not have a list of their staff so that if one of their lobbyists met a Minister, we would be no more the wiser about who that lobbyists’ clients actually were.

In the debate on Part 2, the noble Baroness, Lady Williams, who is not currently in her place, warned us of the danger to our democracy of American-style lobbyists, and indeed her autobiography, which I recommend, draws on her wide experience of that side of the Atlantic. She talks of the powers of lobbyists there and the extraordinary influence of organisations such as the American Association of Retired Persons, the National Rifle Association and the American Israel Political Action Committee. As she and your Lordships’ House must know, though, none of those or their UK equivalents would have to be registered under the Bill—nor the British Insurance Brokers’ Association; the Building Society Association; Philip Morris; FOREST; the nuclear industry; One Hub or None, which is in favour of Heathrow’s expansion; the CBI; the TUC; or the drinks industry, despite 130-odd meetings with civil servants to resist minimum unit pricing.

What is the point of the Bill, particularly this clause, if it does nothing to shed light on what goes on behind closed doors in Whitehall? For the sake of democracy and good governance, we need to see who is lobbying whom and about what. The register should cover the act of lobbying—the status, I think the noble Lord, Lord Norton of Louth, said—not the type of lobbyist, otherwise this is open to abuse. If an issue becomes very sensitive, you can simply have the lobbyists who have been working for an agency become directly in-house and put on the payroll of a particular company at that time, and then none of their activity will have to be registered. Or a small lobbyist could simply work part-time for 10 clients and be paid directly by them, and then we would know nothing about them.

A list of lobbying firms is not enough. That is not what was foreseen in the coalition agreement, it is not what the lobbyists themselves want and it is not what Unlock Democracy or Spinwatch want. The charities and trade unions have told us that they are very content for their public affairs professionals to be registered and to disclose their lobbying meetings. We strongly support Amendment 1 regarding the production of a proper, comprehensive and statutory register of all professions lobbying the Government. Democracy demands nothing less.

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, the amendment moved by the noble and learned Lord, Lord Hardie, and supported by the opposition Front Bench would amend Clause 1 such that the register applied to professional, rather than consultant, lobbyists. The noble and learned Lord said that if the amendment was carried then it would need some consequential amendments. I respectfully suggest that it would need more than just consequential amendments because there is no definition of “professional lobbyists” in what he is offering to the House, of which I will say more in a moment.

From the discussions which I understand took place in Committee on this issue and on amendments previously tabled by the Opposition, it appears that they would capture—as the noble and learned Lord and the noble Baroness, Lady Hayter, made clear that they would wish them to—so-called in-house lobbyists in addition to consultants and, with Amendment 11, also employees. However, as I have said, there is no definition given of professional lobbying to accompany the amendment and its effect would therefore be that the provisions of this Part would be undermined such that a functioning register could not be established. I do not believe that that could simply be resolved by a number of consequential amendments.

We have discussed at length, in various debates on the Bill, the importance of clear definitions. Until now, the Opposition have struggled somewhat to define what they mean by “professional lobbying”, and now seem to have abandoned such a definition altogether. It is vital that we understand exactly who is intended to be captured by the amendments—whether this includes, for example, charities and all the paid employees of charities. Does it include church groups? Does it include the vicar who makes representations on behalf of his parishioners, because he is in paid employment? The noble Baroness shakes her head, but the problem is that without any definition we simply do not know who is intended to be covered by what she proposes.

[Baroness Hayter of Kentish Town]

We have said throughout that the definition used by the professional organisations—which would absolutely answer every point, as I am sure the noble and learned Lord must have read—is one that we are very content with.

[Lord Wallace of Tankerness]

My Lords, it is fair enough to say that, but it is not what the House is being asked to vote on today. It is being asked to vote on something which is devoid of any definition.

[Lord Campbell-Savours]

If the professionals have designed a system which includes them, why can that not be in the consequential amendments? Why do the Government not come back at Third Reading to include those provisions?

[Lord Wallace of Tankerness]

Because, my Lords, there have as I understand it been many attempts made to pin down and define what is meant by “professional lobbyists”, none of which has met with approval or the kind of certainty we want in previous debates. Perhaps we can answer two of the points of the noble and learned Lord and the noble Baroness. Simply to introduce ambiguity to a prohibition provision that is accompanied by serious criminal sanctions is unacceptable. That lack of clarity leaves the amendment fatally flawed.

As the Government have made clear throughout the passage of the Bill, our proposals for a register are designed to address the specific problem that we have identified. One of the things that gave rise to complaints in the media was that when consultant lobbyists were lobbying, people did not know who their clients were. That is the issue which the Bill addresses. It is not always clear whose interests are represented by consultant lobbyists when they meet Ministers and Permanent Secretaries. The context is that this Government have for the first time made it clear to the public exactly who Ministers and Permanent Secretaries are meeting. The Political and Constitutional Reform Committee’s report on the Government’s initial proposals for a statutory register of lobbyists made clear that identifying the problem that the register is intended to address is critical if successful regulation is to be achieved.

While we acknowledge that there are those who consider the focus of the proposed register too narrow—I am aware that these criticisms have been made—we have yet to see a clear articulation of the problem that would be addressed by expanding the scope to all so-called professional lobbyists. The point has been made about in-house lobbyists. It is quite clear whose interests are represented by an in-house professional lobbyist: it is the person who employs him or her. If you are an in-house lobbyist for the Scotch Whisky Association—I am not sure if that association has in-house lobbyists, but let us assume that it does—it does not take a genius to work out that if you are lobbying a Minister or Permanent Secretary, those are the interests that you would be representing. If you are an in-house lobbyist for one of the utilities and you meet a Minister or Permanent Secretary, it does not take a huge leap of the imagination to guess that you are representing the interests of the organisation which employs you. I cannot honestly see what is added by creating a list of people and their employers. If I have missed the point, I am more than happy to have it explained.

15:30

[Baroness Hayter of Kentish Town]

There are two issues. The first is that there are some enormously large employers and we do not know whether they are lobbying over a particular application for planning permission, for a new medicine or for something else. The second is that unless they meet a Minister or a Permanent Secretary under the silly bit of this Bill, we will know nothing; whether they meet senior civil servants, Bill teams or policymakers in the Civil Service, that will not be covered at all.

[Lord Wallace of Tankerness]

My Lords, we shall come on to the second point made by the noble Baroness. I think it is the subject matter of the next group of amendments. We would not know any more just by listing the names of in-house employees who engaged in lobbying. You would still not know from doing that—and that is what this amendment seeks to do—whether that person was actually lobbying with regard to planning permission or not. That is why it is important that the parallel provisions which the Government are doing in quarterly returns as to which people Ministers and Permanent Secretaries are meeting is an important part of the whole picture. We shall deal in a moment with the points made by the noble Baroness because I think that she is missing out that crucial part.

[Lord Norton of Louth]

Just on the example the noble and learned Lord was giving of the Scotch Whisky Association, if it was to buy in a consultant lobbyist to advise it but did the lobbying itself, how would that be caught by the Bill?

[Lord Wallace of Tankerness]

If the Scotch Whisky Association was lobbying itself, then the important thing is that if the Scotch Whisky Association is meeting a Minister or a Permanent Secretary, then that would be in the returns which the Minister or Permanent Secretary makes. That would make it very clear that it is the Scotch Whisky Association that the Minister has been meeting. That is what I think people wish to know. In a moment I will address my noble friend’s amendments to say some of the things which the Government intend to do to actually improve the openness to which we are already committed and delivering.

The position—as I understand it—which we have adopted or sought to adopt is the position in Australia. I am delighted to see my noble friend Lord Wallace of Saltaire here—I just wish he was actually right here because he has a wealth of knowledge and experience on this Bill. He very helpfully reminded me that we have modelled these provisions on the position as it is in Australia, whereas Canada has what might be described as medium regulation, which requires some of the information on employees and in-house lobbyists to which the noble Baroness and the noble and learned Lord referred. That system costs £3 million a year and, as my noble friend says, there is actually so much detail that it almost ceases to be useful. There is almost a detail overload, whereas our system replicates the Australian model. We expect it to cost considerably less, at £200,000 a year, and we believe that that is a very good system where the consultant lobbyists are identified, their clients are identified and the Minister works hand in hand with the regular returns from Ministers and Permanent Secretaries as to whom they have met.

I was actually struggling to see how the problems raised by the noble Baroness would be addressed by just adding more names to a register of people who are employed, unless—as we have committed to and are doing—you also indicate who Ministers are actually meeting. It does not add anything else by having the name of the person who was the in-house lobbyist, for the sake of argument, at one of the utility companies when they met the Secretary of State for Energy and Climate Change.

Until we see evidence of the case for introducing a register of all professional lobbyists, we remain reluctant to expand the scope of these proposals because we believe that what we have here is proportionate and problem-specific and will increase transparency without discouraging engagement by those who will be affected by policy and legislative decisions, such as businesses, charities, community groups and members of the public.

Amendment 11 would require consultant lobbying firms to disclose the names of all who undertake consultant lobbying activity on their behalf. The Government do not consider that such a requirement is either necessary or appropriate. The Bill requires the publication of the clients of consultant lobbyists, and the existing meeting publication scheme publishes both the persons Ministers and Permanent Secretaries meet as well as the body or firm that employs them. Transparency of who a consultant lobbyist is is therefore achieved on that information alone. To require the disclosure of the names of every private individual who is employed by a consultant lobbying firm would raise issues of proportionality and justification when the disclosure of such names provides no greater transparency, because we will know what the group, organisation or company is that meets the Minister or the Permanent Secretary. Therefore in return for listing a large number of names there seems to be no increase at all—not even a proportionate one—in the amount of the transparency than what is made available at the moment through the scheme of publication of persons whom Ministers and Permanent Secretaries meet.

[Lord Tyler (LD)]

The Minister will recall that at every previous stage of the Bill I have pressed that the Government should recognise that the key issue is not who the lobbyist is but who he or she meets, for what purpose and when. I very much welcome what my noble and learned friend has just said about the quality of the record of meetings that this Government have introduced. Perhaps he can go just a step further. He will be aware, from the discussions that have taken place across the House—and there has been support for this at every stage—that the present records of meetings are very often way out of date and not very detailed, and there is a grave discrepancy between the records that come from some government departments and those that come from others. In addition, it is very difficult to access them in a normal way through the computer. I instanced that we tried to find 23 different websites that would give us that information. Is my noble and learned friend now saying that there will now be active involvement by the Government to make sure that the situation is improved right across government?

[Lord Wallace of Tankerness]

I am very grateful to my noble friend and I recognise his long-standing interest in this, not just in terms of the Bill. I hope that I will directly address the points he has raised in responding to points made by my noble friend Lord Norton.

My noble friend’s amendment would revise the title of the Bill so that it referred to the registration of consultant lobbyists rather than the transparency of lobbying. His amendment appears intended to suggest that the provisions outlined in Part 1 of the Bill will not enhance the transparency of lobbying. He will not be surprised to learn that I respectfully disagree. This Government have done more than any before to enhance the transparency of government and decision-making, and these provisions will extend that transparency. We are the first Government to proactively and regularly publish details about Ministers’ and Permanent Secretaries’ meetings with external organisations, and we do so alongside a huge amount of open data regarding departmental spending and procurement. We are recognised as international leaders in open government and we continue to introduce initiatives to further extend transparency in government and the public sector.

We listened carefully to the concerns expressed during the Committee stage debate. In response to the question raised by my noble friend Lord Tyler, I am pleased that I can today commit to noble Lords that we will make further improvements to the accessibility of government transparency information. We will ensure greater co-ordination of the publication of data sets so that all returns within a quarter can be found on one page. I hear the criticism that he makes, and we ought to get better at the speediness with which we make this information available, but we will improve the access to and presentation of those data, including by improving the consistency of presentation and titling. We will also ensure greater consistency in the content of departmental reporting, particularly on including the subject of meetings. Finally, we will ensure that the gov.uk transparency pages contain a link to the statutory register of lobbyists so that the data can be easily cross-referenced.

The practical implications of those improvements are that: rather than having to visit a number of different sites or pages, all information will be accessed via one easily located page of gov.uk; the consistency of those data will be improved so that the transparency reports can be more easily located via search functions; and the subject of the meetings will be set out more helpfully—for example, rather than describing them as “introductory” or “catch-up” meetings, the detail of the meeting discussion will be outlined. Therefore, if, for example, my right honourable friend the Secretary of State for Energy and Climate Change was meeting someone, the subject would include not just energy policy but things such as fracking.

I hope that these practical proposals to which the Government are committing themselves will improve the transparency of decision-making further than we have already achieved, and that the Part 1 provisions will complement and enhance them. I dare say that they will do more to improve transparency than just having a long list of employees of a consultant firm. Obviously, if an employee—the noble Baroness mentioned Bell Pottinger, so for the sake of consistency let us say that this was an employee of that firm—had a meeting, the record would list not just “Joe Bloggs” but “Joe Bloggs of Bell Pottinger” and the subject of the discussion. As a result of the Bill, the list of Bell Pottinger’s clients would also be made available. I therefore believe that what we propose today does far more to improve transparency than simply making available a list of employees, and it reflects suggestions made by a number of colleagues who have made representations.

Although this does not relate directly to the actual register or to the Government’s scheme, I can also indicate that in our response to debates in Committee and to concerns that have been raised by Members of your Lordships’ House—I do not believe that this has been raised on any of the amendments now before us—we are committing ourselves to subjecting the appointment of the registrar to the scrutiny of the Political and Constitutional Reform Committee of the other place. By doing so, we are reiterating our commitment to the independence of the registrar.

[Lord Campbell-Savours]

If I put a scenario to the Minister, perhaps he will be able to give me the answer. If an in-house lobbyist from, let us say, IGas, the shale gas production company, were to meet a junior Minister or a civil servant in the department, by what means would a member of the public or a journalist know about that?

[Lord Wallace of Tankerness]

My Lords, if a lobbyist meets a Minister or the Permanent Secretary, there will be a scheme of publication—as, indeed, we are committed to publish at the moment, and we do. The noble and learned Lord, Lord Hardie, who moved the amendment, will recognise the name if I mention Mr Michael Clancy of the Law Society of Scotland. If I met Mr Clancy, at the moment I would register that, and put on my quarterly return that I had met Mr Clancy of the Law Society of Scotland. In the last term I think there was an issue relating to the banking reform Bill; I cannot remember if I actually met him or had correspondence with him about that—but this is what I would envisage would happen. There would be a reference to “Mr Michael Clancy, Law Society of Scotland: representations on the banking Bill”, or whatever its formal title was. That is how I would envisage the system working. The record would not simply say “catch-up meeting”—a term which has, perhaps, caused frustration to some in the past.

My Lords, these commitments show that the Government have listened—

[Baroness Neville-Rolfe (Con)]

Perhaps I may ask my noble and learned friend for further clarification about meetings. When I was in business I sometimes found that a note of a meeting was sent to the company before being made available under freedom of information or other provisions. The problem often was that the report of the meeting was not very accurate. Will there be any system of clearing or showing notes of the formal meetings that he has described to the people who were involved in them, simply for the sake of accuracy?

[Lord Wallace of Tankerness]

I am grateful to my noble friend for asking that question. I have not said that we will publish the minutes of meetings; the example I gave showed that we would record the detailed nature of what the meeting was about. I hesitate to use the word “subject matter”, because until now that term has also covered “catch-up meetings” and “introductory meetings”. It is not anticipated that we would publish minutes of such meetings. If a meeting had taken place on fracking, I do not think that any clarification would be needed between the Minister and the company as to whether the meeting was about fracking. It is not proposed that minutes would be made available, but there may be other ways—under, say, freedom of information provisions—in which other information might become available. None the less, what we are committing to today takes our commitment as a Government that much further. Ours has been a listening response, and I believe that it will do far more for transparency than—

[Lord Hardie]

Can the Minister help me in the following regard? He relies upon the fact that a system of recording meetings has been introduced. That is, of course, very welcome. He gave the example of a meeting with Mr Clancy of the Law Society of Scotland—and I am sure that he and his officials are very diligent in recording such meetings. However, what if we have a Minister or officials who are not as diligent and who perhaps record it as a meeting with Mr Michael Clancy full stop and do not explain who he is? Clearly, if Mr Michael Clancy is a lobbyist and my amendment is accepted, the cross-reference of the register will identify who he is and what his interests are.

15:45

[Lord Wallace of Tankerness]

My Lords, I hear the point that the noble and learned Lord is making. As I think my noble friend indicated, if the register is anything like the Canadian register you may have difficulty finding out who it is. However, more importantly, the transparency part of it comes in because of what Ministers would be obliged to put in their scheme. There is an ethics and propriety department in the Cabinet Office. I assure the noble and learned Lord and your Lordships’ House that when we submit our returns that department can get back to us. If we just put “Mr Michael Clancy” and there is no indication of who he is, we will be pushed to elaborate on that.

The noble Baroness said that, if a defence contractor was involved, we would not necessarily know that. In fact, under the publication scheme, the company’s name would have to be given. If that company was a defence contractor and the meeting was about the provisions of the defence Bill that is before your Lordships’ House, such information would be far more relevant, transparent and informative for the public than just giving the name of an employee of that particular company. Therefore, I ask the noble and learned Lord to consider whether his amendment advances transparency at all, given what I have indicated that the Government are willing to do, and whether it would lead to considerable uncertainty. Indeed, if it took the matter as far as the Canadian experience, it could, through an overload of information, be even less effective in promoting the transparency that we both wish to see.

[Lord Hardie]

I am grateful to noble Lords for their contributions to this short debate and to those who have spoken in support of the amendment. As regards the noble and learned Lord’s criticism that the amendment does not include a definition of professional lobbyists, I would say two things. First, is not that definition self-evident from the words “professional lobbyists”? Is it not a similar situation to that of a solicitor who is a lawyer performing legal services as either an employer—a principal—or as an employee? Equally, is not a professional lobbyist someone who lobbies as part of his profession as either a principal or as an employee? As regards the noble and learned Lord’s difficulties with the definition, what efforts have the Government made since the very full debate we had in Committee to try to come up with a definition? If that is a difficulty for the Government and this amendment is carried, perhaps they could put in a definition, although I do not think that is necessary.

[Lord Wallace of Tankerness]

The noble and learned Lord asks a fair question. The answer is that that is not the scheme that the Government have been following. We did not think that we needed to produce a definition of professional lobbyists. I ask him to reflect on the fact that if the managing director of a large drinks manufacturer were to meet the Secretary of State on a particular issue—for example, minimum unit pricing—I do not think that one would consider that person to be a lobbyist. Why should it matter that the name of a lower-ranking official in a company who lobbies on behalf of the company is in the public domain but not that of the managing director, when the information that the public want relates to the latter? I have said that we are willing to give that information, because a Minister would have to say that he had met the managing director of company X to discuss minimum unit pricing. Surely that is a much better route to transparency than putting the name of a much lower-ranking official than the managing director.

[Lord Hardie]

I take the noble and learned Lord’s point but it is not an alternative: it is not either disclosure by the Minister or registration. The transparency arises from the combination of the disclosure by the Minister and the registration, and the ability of the public to cross-reference the two to see precisely on whose behalf the lobbyist is speaking.

The noble and learned Lord also mentioned cost and referred to the Canadian system. He will be aware that the system has to be cost-neutral. The cost would be met by the various people who had to register. Of course, the larger number of entries in the register would—or should—offset the increased cost.

The professional body, the Public Relations Consultants Association, supports this amendment. Although it currently operates the voluntary register, it sees the benefit in having a statutory register provided that that register covers all in-house lobbyists as well. As I said earlier, some of the register already includes entries relating to in-house lobbyists. The noble and learned Lord also referred to charges, but there are already charges on the existing voluntary register. In all the circumstances, I wish to test the opinion of the House.

15:51

Division 1

Ayes: 185

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Labour: 134
Crossbench: 39
Independent: 3
Green Party: 1
Conservative: 1
Plaid Cymru: 1

Noes: 218

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Conservative: 131
Liberal Democrat: 61
Crossbench: 17
Ulster Unionist Party: 2
Independent: 2

16:04

Clause 2: Meaning of consultant lobbying

Amendment 2

Moved by

[Lord Hardie]

2: Clause 2, page 2, line 6, leave out “or permanent secretary” and insert “, Parliamentary Private Secretary, civil servant or political adviser”

[Lord Hardie]

My Lords, this amendment reflects a similar amendment to that which was debated in Committee, along with other amendments, including an amendment proposed by the noble Lord, Lord Campbell-Savours. The Bill regulates lobbying activities only where the object of the lobbying is a Minister of the Crown, a Permanent Secretary, a Second Permanent Secretary or a person serving in the government offices listed in Part 3 of Schedule 1. Again, I do not intend to repeat what I said in Committee, but it is my respectful submission to your Lordships that the class is too restrictive, as was observed by many noble Lords both at Second Reading and in Committee. There seemed to be a general consensus across the Committee that the persons listed would not be the first port of call for lobbyists, who would probably concentrate on political advisers, Parliamentary Private Secretaries and more junior civil servants before approaching Permanent Secretaries, Second Permanent Secretaries and Ministers. Indeed, in the very helpful contribution made by my noble friend Lord Armstrong of Ilminster, who is not in his place, it appears unlikely that Permanent Secretaries will be lobbied if the noble Lord’s own considerable experience is taken into account.

The noble Lord, Lord Rooker, confirmed my own experience that Parliamentary Private Secretaries have direct access to Ministers and are involved in some meetings determining departmental and government policy. The noble Lord, Lord Norton of Louth, observed in Committee:

“When this Bill was considered in the other place, the point was well made that it appears to have been written by people who do not understand lobbying”.—[Official Report, 5/11/13; col. 139.]

Lobbyists would focus on the channel for reaching the Minister and that channel would include a political adviser, a Parliamentary Private Secretary or civil servants below the level specified in the Bill. It is clear that the Bill will be of little effect if it confines communications to those currently specified in it and does not focus on those people more likely to be the object of lobbying activity. If lobbying is confined to the more effective targets and the Minister is not directly lobbied, there will be no requirement for registration, not even by the restrictive category of consultant lobbyist. Such a result is contrary to the stated desire and the desirable intention of transparency that underpins Part 1 of the Bill.

In his response in Committee the Minister—I am delighted to see him in his place after his illness—referred to the number of civil servants who would be affected if the scope of this provision were extended as proposed. As noble Lord, Lord Norton of Louth, observed in his intervention at col. 149, the number of such civil servants is irrelevant. What is at issue is the identification of the class of persons the lobbying of whom will require registration. That class has to be sufficiently wide to make lobbying transparent.

In view of the discussion in Committee, it is disappointing that the Government have not come forward with their own amendment to improve the Bill in this respect. The amendment in my name is an attempt to remedy that omission. Without this amendment, the Bill will fail in its objective of increasing the transparency of lobbying Government. It will further undermine public confidence in our political system because it will be seen as an example of Parliament either failing to understand the lobbying process or failing to take effective measures to address and identify a problem. I beg to move.

[Lord Tyler]

My Lords, Amendment 3, in my name and that of my noble friend, is grouped with the amendment just moved by the noble and learned Lord. As has already been made very clear this afternoon, the key issue is not the role, title or job description of the people who take part in the activity of lobbying but the activity itself. That is absolutely critical. I have a lot of sympathy with my noble friend Lord Norton, who, in his usual way, has put his finger right on that point. That is why I thought that it was extremely important to have the statement from my noble and learned friend Lord Wallace of Tankerness a few minutes ago about the nature, character, efficiency and accuracy of the register of meetings with those who are taking decisions, or making proposals to Parliament, on behalf of the Government.

I should say in parentheses, in welcoming back my noble friend Lord Wallace of Saltaire, that way back at Second Reading, let alone in Committee, he expressed a lot of interest in the proposals that we were making from these Benches about improving the status of the record of meetings that was introduced for the first time—for which the Government should get credit—in the past few years. As I said in that earlier debate, I am not so worried about who the lobbyists are but am very worried that we know who they lobby, what they lobby about and when. The very full statement made by my noble and learned friend Lord Wallace of Tankerness a few minutes ago goes a very long way to meeting that anxiety. We have made it clear at every stage of the Bill that, for us, that is the core issue. The proactive publication of data on ministerial meetings by the Government makes a potentially huge difference. That is what transparency should be all about.

We also believe it is important that that record should indicate when the meeting with in-house lobbyists takes place. Whether they are the managing director of a whisky firm, or a lowly employee of any other firm, it is the subject matter of the meeting, when it happened and with whom that is of considerable importance. I agree with my noble and learned friend and I am delighted that the House agreed too, a few minutes ago, that simply extending the register into a sort of enormous directory, like a telephone directory, with every lobbyist in the land, whether from a church, charity or voluntary organisation, would not really seem to be anything more than disguising the wood for the trees.

Amendment 3 deals very specifically, and only, with the issue of special advisers. Many in your Lordships’ House have had enormous responsibility in the Civil Service. What is unusual about a special adviser is that he or she of course is not responsible to the head of the department: he or she is not a full-time employed member of the Civil Service, and their first loyalty and responsibility is to the political master for whom they work. The special adviser’s responsibility is to the Secretary of State, or other ministerial politician, and his or her relationship is with them. It is therefore our view that this is the one major exception that should be tackled, either in this Bill or in some other way, because these are special people—special advisers are, by definition, outwith the normal hierarchy of responsibility to the Permanent Secretary in the department.

The principle in the Bill is that if the consultant gains access to or influences a Minister on behalf of a client, the public should know who they and their clients are. However, anyone who has been in this building for any length of time or who has lobbied knows perfectly well that influencing a Minister does not necessarily mean seeing them yourself. There is sometimes an even better way: to meet the Minister’s special adviser. Spads have a rather unfair bad reputation in the press. Many will remember Clare Short’s description of them as living “in the dark”. I think that was about a particularly period in the previous Government, perhaps, and it may not be appropriate for all periods of recent history. That epithet then led to a thought-provoking analysis of the role of special advisers in a book of the same name by the respected academic Dr Andrew Blick. In my limited experience of being on the Government side of the House in the past three years and therefore having spads in my own party, it does not feel as though many now live in the dark. We see them all the time. They are helpful, they are influential; in many cases persuading a spad is the first step to persuading a Minister.

I know that this is also part of their job: to meet outside groups. It is very proper and very effective—a proper role that they should undertake. Perhaps it is a better one than a civil servant in the normal hierarchy. Ministers have only a certain amount of time and sometimes it is the right judgment to ask a senior adviser to see someone first, sound them out and explain the Government’s thinking—there is absolutely nothing wrong with that. However, these meetings with outside groups are important and details of them, like the ministerial meetings which were so fully referred to earlier, should be transparent.

The first step we could take today to make that point in this House is to say that in this Bill those consultants who lobby spads should have to register, just as if they were meeting Ministers. It would then follow, of course, that although this is outside the immediate scope of the Bill, for this to be meaningful spads would also need to publish all their meetings with all lobbyists, whether they be consultant lobbyists or in-house, just as Ministers do. I very much hope that when we look in detail at the record of meetings in future to see how these can be improved and made even more influential and transparent, my noble friends on the Front Bench will acknowledge that this would be an important step to take.

This is not in any way intended to malign spads or imply that anything they do is wrong. It is the opposite. It says that what they do is useful and, on many occasions, necessary, but keeping any aspect of it hidden feeds a largely unnecessary suspicion that they are up to no good. I referred at earlier stages of the Bill to the fact that two of the big lobbying scandals in this Parliament have involved close advisers to Ministers rather than Ministers themselves, and that resignations resulted.

For example, the Murdoch empire recognised these facts of life very early on. We should too. Both scandals would probably never have got to this stage had encounters between close ministerial advisers and outside groups been a matter of public record. It is therefore as much in the Government’s interests as in the public interest—surely the two should fit hand in glove anyway—for this information to be freely available. I quoted before and I shall quote again. The Prime Minister memorably said:

“Sunlight is the best disinfectant”.

I agree.

16:15

[Lord Norton of Louth]

My Lords, briefly I support the comments of the noble and learned Lord, Lord Hardie, and those of my noble friend Lord Tyler. I also associate myself with my noble friend’s comments about special advisers. He is absolutely right. This Bill is flawed in two major respects. First, political consultants rarely lobby directly. They advise clients and the clients do the lobbying. That point was well made in the other place, not least by those who have direct experience of the lobbying industry.

The second flaw is that when they do lobby, they rarely lobby Ministers or Permanent Secretaries directly. We know that from the debates in this House from those who have served as Ministers and Permanent Secretaries. The amendment before us goes at least some way to addressing that second problem. The Bill remains flawed and we want to look at that later in more fundamental respects, but at least this amendment would try to make a bad Bill less bad.

[Baroness Williams of Crosby (LD)]

My Lords, I strongly support my noble friend’s amendment and that put forward so effectively by the noble and learned Lord on the Cross Benches. Having been a Minister, I want to say a few words about what in my view is the absolutely vital importance of including special advisers in this Bill. I would add to that the first three ranks of the Civil Service, by which I mean under-secretary, deputy secretary and Permanent Secretary.

I find it very puzzling that the specific rank of civil servant mentioned in the Bill is that of Permanent Secretary. I can think of almost nobody less likely to be open to exploitation by lobbyists. To be a Permanent Secretary, you have to be somebody of outstanding integrity, whose honour cannot be doubted, who will be respected in his or her own department and who sets the quality and standards of that department. You are, frankly, the last woman or man to be likely to fall for the more dodgy approaches of some slightly dodgy lobbyists. In fact, it is close to inconceivable that this particular person is likely to be open to temptations of a kind that all of us would eschew.

However, I am asking the Government to include the first three levels because, as has been very rightly said, the much more tempting position is that of people near but not at the top. For example, I was for some years on the Government’s Advisory Committee on Business Appointments. We looked consistently at what the gap should be between a senior civil servant leaving his or her department and being free to take up other employment afterwards. Members of this House will know that certain departments have very close links with the private sector and that, therefore, their officials carry with them a level of expertise that is quite exceptional. They are indeed very attractive recruits to private business because obviously they have a great deal of experience and knowledge.

Generally speaking, in the Advisory Committee on Business Appointments, consideration is given to how wide the gap should be between leaving one’s employment as a civil servant and joining a private industry with which one may previously have had some kind of relationship. It is extremely tempting, obviously, for somebody to join a private sector business when they have a great deal of knowledge that would be useful to that business, but the longer the gap the less useful that knowledge may be. It is therefore strange, to say the least, that the level of seniority in the Civil Service that makes an individual so attractive to major industries that have close relations with a certain department should not be covered by this Bill.

I have suggested that we should limit that practice as much as possible. I quite agree with my noble and learned friend Lord Wallace of Tankerness, but it is no good having what he called a laundry list or a telephone list of names. Deputy and under-secretaries are very limited in number and particularly attractive to those who want their expertise. I do not doubt that both sides behave with full honour but I also think that lobbyists will be very attracted to people in that situation, and therefore it would be strange if the Bill did not cover that particular group of civil servants.

When I first became a Minister the number of special advisers was extremely closely controlled. According to Prime Minister Wilson, the absolute maximum number of special advisers any Minister, however senior, could have was two. They had to be shown to be knowledgeable about the kinds of organisations with which that Minister would interact; for example, in my own case as Minister of State for Education and Science, it was very clear that the special advisers I needed had to be able to show expert knowledge and evidence of science, universities or the education of children in schools. The two I had were both eminently well suited in that way. But the general attitude towards special advisers was very limited. They were experts, they were there to advise, but they were not there to substitute.

That has rather changed over the years. There are now many more special advisers than there were. There have been one or two worrying cases where a special adviser has taken upon himself or herself responsibility for something that clearly should belong to the Minister. My noble friend Lord Tyler gave an example. Some of your Lordships may remember the famous occasion when a special adviser told her Minister that it was a good time to issue bad news and crises were ideal because they meant that the bad news was hidden by the interest of the media in other issues. I do not want to push that very far, but there are certainly a few cases—not many—where special advisers have behaved as if they were autonomous, and beyond what seems to be either the wishes or the desires of the Minister concerned. Some people may remember that the previous Prime Minister, Mr Gordon Brown, had difficulties with at least one of his special advisers, which did not do him or his reputation any great good, despite the fact that he is undoubtedly a man of integrity and honour himself.

Quite straightforwardly, that means there is a very strong case indeed for recognising that special advisers are, as the noble and learned Lord, Lord Hardie, and my noble friend said, something of a highway to a Minister. They are the quickest route to his personal information; they are probably closer to him than anyone else in his department, with the possible exception of his PPS. Often, they are also people who have their own agendas, and those agendas may not invariably be the same as that of the department. I therefore feel that it is important that special advisers should be held accountable. Indeed I would go further and say that it is crucial that they should be held accountable, and that this Bill takes congnisance of the relationship between a Minister and a special adviser.

Therefore I hope that the House gives full consideration to the proposals in these amendments and will recognise that, without some movement towards including special advisers, the effectiveness of this Bill will be very much limited. I have already argued for the top three ranks of the Civil Service. I hope that the amendment will be seriously considered in this House, and that the Government will reconsider the narrowness of the interpretation of which people are open to lobbying. As the Bill stands, it is steadily getting better. I pay full credit to my noble and learned friend Lord Wallace of Tankerness and his noble friend Lord Wallace of Saltaire for the improvements that have been made to this Bill, but we should include special advisers in evidence that we are serious and committed to the idea of limiting unfortunate and ill-motivated lobbying to those who might be effecting it.

[Lord Woolf (CB)]

Could I ask for the noble Baroness’s assistance from her great experience on whether she sees any difference between special advisers, to whom Lord Tyler refers, and political advisers, to whom the noble and learned Lord, Lord Hardie, refers?

[Baroness Williams of Crosby]

My impression is that there is not any real difference between the two. It is possible that some Ministers prefer to use the term “political adviser” to indicate to the public the scope of a particular special adviser’s responsibilities, but I do not believe there is any more to it. I hardly dare say that to a former leading justice in this country, but I hope he will agree with me that there is no real difference between them in terms of their responsibility.

[Lord Aberdare (CB)]

My Lords, I, too, support the amendment put forward by the noble and learned Lord, Lord Hardie. I very much welcome the statement made by the noble and learned Lord, Lord Wallace of Tankerness, in terms of improving the quality, the usefulness and the timeliness of ministerial reporting of the meetings they have. But that makes me even more puzzled about what specific problem this Bill and this register are intended to solve. As we have heard, it is only going to cover consultant lobbyists who represent—if anything—less than 20% of all those operating in this area. Currently, this amendment extends only to Ministers and Permanent Secretaries.

When I worked for IBM in its public affairs function, I occasionally met Ministers, usually on what I might call ceremonial occasions. I hardly ever met Permanent Secretaries. What I did have was numerous contacts with other civil servants, and indeed with special advisers. That is where all the real lobbying activity went on, and where we pursued our interests as a company for IBM. I am completely baffled why my activities on behalf of IBM should be treated differently from the consultant lobbyists that we sometimes employed to advise us, one of which was an extremely good firm of which the noble Lord, Lord Tyler, was one of the leading lights. They would advise us on how we should approach civil servants, special advisers and others in the political process. It was not self-evident what we might have been lobbying for, because the range of interests that IBM had, and the range of issues in which it might have had an interest, was very broad indeed.

I am very conscious of the risk pointed out by some members of the lobbying industry that, under the Bill, transparency might end up being less than it was previously because the Bill sets such a low threshold that it might remove any incentive to go beyond it—although I welcome the intention to include reference to codes to which lobbyists have subscribed. If it turns out to be only a very small number of consultant lobbyists who need to register, I take the point made by the noble and learned Lord, Lord Hardie, that the burden of cost on that small number of firms of this rather elaborate structure may be unacceptable.

Finally, I am completely baffled as to how the Bill will address concerns among the public about who is saying what to whom on some of these issues. I therefore strongly support what the noble and learned Lord, Lord Hardie, has put forward and some of the related points made by the noble Lords, Lord Norton of Louth and Lord Tyler.

16:31

[Lord Bichard (CB)]

My Lords, as a former Permanent Secretary, I rise still bathing in the warmth of the comments from the noble Baroness, Lady Williams. Would that some of the current Permanent Secretaries were here to hear them; I think that they might have been moved to tears.

I shall speak only briefly in support of the amendments proposed by the noble and learned Lord, Lord Hardie, and the noble Lord, Lord Tyler. It is one thing for Parliament to show that it does not fully understand, or understand very much, the lobbying process; it is a rather more serious thing for Parliament to show that it does not understand how Whitehall and the decision-making process work. That process works increasingly through special advisers and senior civil servants, not through Ministers and Permanent Secretaries. For this not to be recognised in the Bill is very odd and shows serious flaws.

[Lord Campbell-Savours]

My Lords, I spoke in Committee on this matter, so I shall be brief today. My concern is that special advisers often have more influence on ministerial decision-taking than do Members of Parliament, because they have daily access.

I want to tell a story of an incident that I experienced in 1999 on a train coming from my former constituency of Workington to London. To my side in the carriage was the Member of Parliament for Blackpool and opposite were two young men who were on their way to London, and we struck up a conversation. They told us that they were going to London to lobby in the department on the need to introduce new gambling legislation. As Labour MPs, we had absolutely no idea that discussions were going on in the department about gambling and gambling legislation. That was in 1999—some 14 years ago. Those two young men were going to meet the special adviser in the department concerned. I was very interested and asked them how they had made contact. They explained that they had done so at a political level, locally to start with, and had then been referred to the special adviser. There was no need as far as they were concerned to see Ministers.

In that particular case, the embryo of the debate had started with access from the industry directly to political advisers in the department. The discussion would then permeate within the department between, as has just been said, civil servants and the special advisers, to the exclusion of Parliament and individual Members of Parliament. I find that deeply troubling. One of the reasons why I want special advisers to be included in the Bill is that I want that process to become more transparent, so that individual Members of Parliament can at least see what is happening within a department, what influences are being brought to bear and the dangers that might arise. If those special advisers then organise meetings between various groups and Ministers without Members of Parliament being aware of the scale of the lobbying going on—I know that I am making a very subtle point—it is at that point that Members of Parliament need to know that such relationships are being forged. That is why I strongly support the amendment proposed by the noble Lord, Lord Tyler, and I hope that we have the opportunity to vote on it.

[Lord Turnbull (CB)]

My Lords, this is the first time I have got involved in this Bill.

The current structure is indeed rather peculiar: lobbyists or lobbyist consultants are to register themselves and report those whom they represent, but we will find out whom they lobby only by an indirect process of interrogating a list of external meetings of all kinds that Ministers and Permanent Secretaries have attended. The case for this amendment is that lobbying takes place with a much wider group of people, which in a typical department would be about five or six individuals. I was a Permanent Secretary for 11 years in three departments and I do not think I ever had a conversation with a lobbyist as defined in this Bill. The lobbying always took place with officials who were working on the policy or were experts on the subject or were working on a Bill team.

Should we extend the requirement to civil servants? Well, there are 412,000 of them, so we have to define whom we mean. The people working on a policy would probably include the senior Civil Service, which is probably about 3,000 people. The logic of this Bill is that we extend the requirement to assemble and publish a list of external meetings—of course, these are not only meetings with lobbyists—to a very much wider group. In my view, there would be a lot of dead-weight cost in this: most of those contacts are part of the regular and desirable interchange between government and industry. In the White Paper that launched this whole process, it was stated:

“The Government does not wish to create an obstacle to necessary interaction with policy makers”.

If that is the price—that we extend this to all of the senior Civil Service, who then have to report all external meetings involving not just these people but everyone—in my view that is a price too high.

On the other hand, I am taken by the arguments about special advisers. There are now 98 of them; there were 38 in 1997 at the exit of John Major’s Government; there were about 74 by 2010; the number dipped for about three months but now there are 98. If I really had to distinguish between the amendments in this group, I would vote against Amendment 2 but for Amendment 3.

[Baroness Royall of Blaisdon (Lab)]

I rise to speak to Amendment 2 in the name of the noble and learned Lord, Lord Hardie, my noble friend Lady Hayter and myself, which extends the parameters of who needs to be lobbied to prompt registration to include special advisers, civil servants and PPSs.

I, too, welcome the enhanced transparency in relation to reporting that was mentioned by the Minister in response to the earlier debate. However, I believe that will not be enough if the subjects who are principally lobbied are not asked to report. There has been progress, but it is simply not enough.

Both today and in Committee, a powerful and clear case has been made by former Ministers, former senior civil servants—which includes those in the Diplomatic Service, pursuant to the discussion we had in Committee—and former special advisers as to why the remit of the Bill must be extended if it is to have proper impact. As the noble Lord, Lord Norton of Louth, said in Committee, the target is normally the Minister and you therefore have to focus on the channels for reaching the Minister. The Permanent Secretary, as we have heard, is not a significant channel for this purpose. Indeed, the lobbying industry itself has said on numerous occasions that,

“we do not make personal representations to Ministers or Permanent Secretaries”.

So there we have it from the horse’s mouth. Yet the Government did not provide any convincing reason for why only meetings with Ministers and Permanent Secretaries should be subject to the provisions in Part 1. I hope that this short debate will persuade the Minister that there need to be some changes to this Bill in order to make it properly creditable.

Civil servants here and in Brussels should be included, not because there is any suggestion that they are conducting themselves in any inappropriate manner but to fulfil the purported aim of the Bill—that is, transparency. Last week it was revealed that there had been 130 meetings between representatives of the alcohol industry and the Government since 2010. The BMJ investigation showed that they had an extraordinary level of access to the Department of Health, which later decided to U-turn on the question of minimum unit pricing. It was a comment from the Minister for Public Health on the “Today” programme on Wednesday that caught my attention. Of those 130 meetings, she said, “But most of those were with officials”. Precisely. If the Bill is to increase transparency, the public should have access to this information.

I turn to special advisers. Naturally, I support Amendment 3 in the name of the noble Lords, Lord Tyler and Lord Greaves. Special advisers should certainly be subject to the same level of transparency, given how closely they work with their Ministers and the influence that they can and do have on policy. The case has already been well made but I make no apology for returning to the News International lobbyist Fred Michel, whose case proves quite how large the loopholes in the Bill are. He was summoned to the Leveson trial after DCMS released 164 pages of e-mails between him and Adam Smith, the then Secretary of State’s special adviser. This came to light only in what I am sure everyone would agree were quite extreme circumstances. Again, if the Bill is to increase transparency, the public should be able to access these details.

Given the stance taken in Committee, I imagine that the Minister may well object by saying that the provisions in our amendment are disproportionate; indeed, the noble Lord, Lord Turnbull, has just made that case. Of course that argument cannot apply to extending the Bill to cover special advisers—that should be a given now—but, if proportionality is the Minister’s only concern, I hope that he will commit to bringing an amendment back at Third Reading that at least includes special advisers, civil servants and Parliamentary Secretaries. There is time for the Government to work on an amendment that could ensure that these people are included in the least bureaucratic way.

The Minister may also point to the fact that the limits that the Government have put in the Bill mean that there is no obvious place to publish such information. In Committee I asked the Government to look at the least bureaucratic way of extending the scope of those lobbied, but they do not seem to have taken the opportunity to find a solution. We can provide the Minister with two solutions. No doubt the Minister will be aware that on the website data.gov.uk, the meetings between special advisers and newspapers editors, proprietors and executives are already published, so there is no convincing argument why that cannot be extended. The other solution may have been provided by the noble Lord, Lord Norton of Louth, and it is elegantly simple: the Minister, when publishing details of his own meetings, publishes information about the meetings of civil servants and special advisers in his department.

This House has explained—very graphically, in many ways—the problems relating to the Bill and its extent, but we have also pointed the Government towards solutions. I very much hope that they will accept these amendments. If not, I trust that they will go away and come back with an amendment at Third Reading that takes these crucial issues into account.

[Lord Wallace of Tankerness]

My Lords, the noble and learned Lord, Lord Hardie, has moved an amendment that would extend the scope of the register to include meetings with Parliamentary Private Secretaries, civil servants and political advisers, while the amendment of my noble friend Lord Tyler would extend the scope to include meetings with special advisers.

At the outset, I want to pick up the point that was made by the noble and learned Lord, Lord Woolf, who asked whether there was a difference between “political adviser” and “special adviser”. My understanding is that the term “special adviser” is defined in the Constitutional Reform and Governance Act 2010. In Committee the noble and learned Lord, Lord Hardie, indicated that the term “political adviser” was really referring to special advisers. One is a term of art already recognised in statute, but for the purposes of this debate I think that everyone is talking about the same entity, if that is the right word.

The Government have previously outlined that the register is designed to complement the existing government transparency regime, to which I referred and on which I made announcements in the previous debate, whereby Ministers and Permanent Secretaries proactively publish details of their meetings with external organisations—I should add, for the avoidance of doubt, that these will be external organisations whether the Minister meets them in Whitehall, Edinburgh, Brussels, Washington or wherever. The register will address a specific and discrete problem within that context: that it is not always clear whose interests are being represented by consultant lobbyists.

16:45

To extend the scope of the register to other public officials would provide no appreciable benefits because they are not required to publish their diaries. Yes, we accept that lobbyists make communications to government other than directly to Ministers and Permanent Secretaries but, ultimately, it is the Minister who makes the decision. I noted the point made by the noble Lord, Lord Bichard. Ministers are of course the ultimate decision-makers and Permanent Secretaries are the accounting officers for their departments; that is the thinking which underlies the scope of the Bill.

My noble friend Lord Tyler suggests that the register should apply to those who lobby special advisers. While special advisers may provide advice, they are not decision-makers. Indeed, my noble friend said that even talking to special advisers may be a first step towards trying to achieve a decision from a Minister. However, it is the Minister, not the special adviser, who ultimately has responsibility for the actions of the department.

The noble Baroness, Lady Royall, and my noble friend Lady Williams accepted that the cases cited in making their points were extreme. My understanding is that, in both the case of the special adviser who said that 9/11 was a good day for burying bad news and the example of Adam Smith, the special advisers resigned. We recognise that there is a code for special advisers. In cases where that code was breached, they took the significant step of resignation. It is therefore right that Ministers are the focus of the meeting reporting system and the register.

The noble and learned Lord, Lord Hardie, suggests that, in addition to special advisers, the register should apply to those who lobby civil servants and Parliamentary Private Secretaries. The amendment says, “civil servants”; my noble friend Lady Williams talked about the top three grades, but the amendment goes far further—further even than the senior Civil Service.

While registers are designed to reflect different contexts and to address broader problems sometimes cast their scope wider, by doing so they can greatly increase the cost, as referred to by the noble Lord, Lord Turnbull. The necessary complement to an extension would be the introduction of meeting reporting obligations for all public officials. Such a system would result in an unnecessary, disproportionate and unhelpful administrative burden. The cost to the public purse that it would involve could not be justified in the light of the limited transparency benefits that would be achieved.

The noble Lord, Lord Turnbull, suggested a figure of 412,000 civil servants; my speaking note says that there are 450,000 civil servants in the United Kingdom. One must ask whether there is really a public interest in seeing the details of all of their meetings with external organisations. Even if the scope were limited only to senior civil servants, it would still require the diaries of 5,000 individuals to be published. That would be a huge cost and would include, as the noble Lord, Lord Turnbull, said, much dead weight.

[Baroness Williams of Crosby]

On that point, I raise the question of whether the three most senior classes of the Civil Service are not in a much narrower area in terms of cost than the wider range of civil servants to which my noble and learned friend has been referring. They seem to be almost completely distinct in terms of the costs involved.

[Lord Wallace of Tankerness]

My Lords, I accept that it would be more proportionate, but I really am not in a position to say. One of the problems is that some of the terms used, such as “director-general”, mean completely different things in different departments. That has been another issue. At a time when we should be streamlining public services, not imposing additional costly burdens upon them, I do not believe that the added burden of 5,000 extra diaries would be proportionate.

[Baroness Royall of Blaisdon]

I should like to raise two issues. First, nobody is suggesting that all meetings with all civil servants should be included—I have some sympathy with what the noble Baroness, Lady Williams, said—only meetings with lobbyists. Secondly, the Minister has not answered the point made earlier in Committee, I think, or the suggestion made by the noble Lord, Lord Norton of Louth, that when publishing details of his or her own meetings, Ministers should also publish information about the meetings of civil servants and special advisers in his or her department. That seems a very unbureaucratic way of addressing the issue.

[Lord Wallace of Tankerness]

My Lords, the noble Baroness says that they are not asking to include all civil servants’ meetings with everyone, but the amendment does say all civil servants, although I admit that she says that it would cover any lobbyist who met civil servants. As for Ministers’ reporting regime, we have said that Ministers will report the people with whom they have had meetings whether they are lobbyists or non-lobbyists. To further subdivide that would be a considerable burden on 450,000 civil servants. I do not believe that it would add to the transparency that we have tried to enhance and improve by what we have already done as a Government, some of which has been unprecedented. I think that the noble and learned Lord is seeking to intervene.

[Lord Hardie]

I am grateful to the noble and learned Lord. The point that I am seeking to make in this amendment is that one has to go back to the definition in Clause 2. In the terms of that definition, it is people who fall within the category of persons carrying on the business of consultant lobbying who have to register under Clause 1. Clause 2(1)(a) states that they are required to register if, in short,

“in the course of a business and in return for payment, the person makes communications within subsection (3)”.

It is the communications that we are addressing. Subsection (3) states that the communications are,

“oral or written communications made personally to a Minister of the Crown or permanent secretary relating to”,

the various matters mentioned. I think that second Permanent Secretaries are on the list of people in the schedule.

The point of this amendment is to highlight that the narrow definition of people to whom communications are being made which require registration on the part of consultant lobbyists renders the whole concept of registration almost worthless because, as has been clear from the contributions across the House, these people are not just lobbying Ministers. To get round that, a lobbyist who lobbies a special adviser or a civil servant concerned with policy would not be required to register.

[Lord Wallace of Tankerness]

I think I understand the point that the noble and learned Lord is making about the requirement to register if you are making communications with these people. It may be that that would bring more names on to the register—I simply do not know—but to enhance transparency, the complement to such an extension would be the introduction of meeting reporting obligations on these public officials. Otherwise you have a list of names of consultant lobbyists and their clients but there is nothing there to which you can then relate them. It becomes fully meaningful only if you have that complementary extension of the scheme. On the amendment, I sought to make the point that that would be a huge burden and one that would not be consistent with efficiency in government; nor indeed would it be proportionate to improving transparency.

[Lord Campbell-Savours]

The Minister has not responded to the very narrow point that was made by my noble friend Lady Royall of Blaisdon. She asked a very simple question: why should a Minister, in his or her registration, not register the activity of that Minister’s individual political adviser? That political adviser is working on behalf of that Minister. No doubt the noble Lord, as a Minister, has political advisers of his own. In the event that they meet lobbyists from outside, they are meeting them on his behalf. Why should not he, in his registration, refer to those meetings?

[Lord Wallace of Tankerness]

My Lords, until I became Deputy Leader of your Lordships’ House I did not have a special adviser. I now have one but I am not sure that she has met anyone, although she has said that if she could get a diary secretary it might be a bonus. We take the view, as I indicated earlier, that it is the Ministers who are making the decisions. On that basis, we believe that it is communications with Ministers—and not just meetings, as the noble and learned Lord said—that are pertinent. We believe that these proposals are appropriate and proportionate. I therefore urge the noble and learned Lord—

[Lord Tyler]

I am grateful to my noble and learned friend, who is very good to take points from us all. I sympathise with the point he makes about the scale of the increase in the number of people who would be involved if Amendment 2 was agreed, and the potential enormous cost as a result. However, that does not apply to Amendment 3, as has been made clear on all sides of the House. The very specific nature of the character, responsibility and role of special advisers—I think the noble Lord, Lord Turnbull, said that there are 98 of them—would not require a great increase in the amount of information to be given by government in terms of both the record of meetings and who, as regards lobbyists, meets them. Can he give an undertaking that between now and Third Reading he will look very hard—in sympathy with the views that have been expressed on all sides of the House—at the practicalities of including special advisers? In terms of both the meetings they have and the nature of the people who they meet, there is broad support right across the House for their being exceptional. They are indeed, as their title states, special. In those circumstances I hope that my noble friend is prepared to look again at that issue.

[Lord Wallace of Tankerness]

My Lords, I know that my noble friend knows me well enough and I hope that I have made enough appearances at this Dispatch Box for noble Lords to know that I would not wish to give the kind of undertaking that my noble friend seeks if it were to raise an expectation that I am not necessarily able to deliver on. I therefore invite the noble and learned Lord to withdraw his amendment.

[Lord Norton of Louth]

Can my noble and learned friend clarify what he has said? If a consultant lobbyist lobbies a Minister directly to achieve policy X, that consultant lobbyist must register. If that consultant lobbyist only lobbies the special adviser, who then advises the Minister, who decides to implement policy X, they do not have to register. The second point is on civil servants. Does he think that lobbyists will lobby any passing civil servant as opposed to those members of the senior Civil Service who have responsibility in particular areas, and are therefore a very narrow and usually clearly defined group?

[Lord Wallace of Tankerness]

On the second point, I was responding to the amendment as it is tabled, which does not narrow it down at all to senior civil servants—it applies to all civil servants. I am sure that bodies make arrangements with junior officials as well as with members of the senior Civil Service. On the issue of special advisers, I cannot elaborate on what I have already said.

[Lord Hardie]

I am grateful to noble Lords on all sides of the House for their support for the amendment. I realise that the noble Lords, Lord Tyler and Lord Turnbull, suggest that the matter should be confined to special advisers. However, as I said in Committee, when I was in practice at the Scottish Bar I was standing junior counsel to the City of Edinburgh district council, and then, latterly, senior counsel—and it was clear from my experience there that it was not the senior director of administration or the director of planning who was the subject of contact by people seeking to influence policy. The contact was with the local authority officials—in this context, the civil servants—who were concerned with the formulation of policy. It strikes me that to exclude the very policymakers, whether civil servants or special advisers, makes nonsense of the registration process. I therefore beg to test the opinion of the House.

17:01

Division 2

Ayes: 191

---

Labour: 139
Crossbench: 39
Independent: 4
Green Party: 1
Conservative: 1
Plaid Cymru: 1

Noes: 242

---

Conservative: 152
Liberal Democrat: 68
Crossbench: 15
Ulster Unionist Party: 2
Independent: 2

Amendment 3

Moved by

[Lord Tyler]

3: Clause 2, page 2, line 7, after “secretary” insert “or special adviser”

[Lord Tyler]

I beg to move, and to test the opinion of the House.

17:13

Division 3

Ayes: 213

---

Labour: 133
Crossbench: 34
Liberal Democrat: 29
Independent: 5
Green Party: 1
Conservative: 1
Plaid Cymru: 1

Noes: 195

---

Conservative: 153
Liberal Democrat: 28
Crossbench: 9
Ulster Unionist Party: 2
Independent: 1

17:25

Amendment 4

Moved by

[Lord Wallace of Tankerness]

4: Clause 2, page 2, line 18, leave out “the Minister or permanent secretary” and insert “the person to whom the communication is made”

[Lord Wallace of Tankerness]

My Lords, the amendments in this group are a number of technical amendments in the name of my noble friend Lord Wallace of Saltaire. It may assist the House if I briefly go through them and explain their purpose.

Amendments 4, 5 and 6 clarify, and provide greater consistency to, terminology used in relation to the recipients of the lobbying communications and the communications themselves. The minor amendment, Amendment 6, which clarifies the term “Minister of the Crown”, does not, in the context of the Bill, capture the corporate bodies of the Defence Council and the Board of Trade. As Clause 2 makes clear, the communications that the register is intended to capture are those that are,

“made personally to a Minister of the Crown or permanent secretary”.

The definition in the Ministers of the Crown Act 1975 includes the Defence Council and the Board of Trade. Both these entities, however, are corporate bodies with which it is not possible to make personal communications. As such, these amendments remove those bodies from the definition and, in doing so, provide further clarity regarding the communications that fall within the scope of consultant lobbying.

Amendment 8 clarifies the position in relation to employees who make lobbying communications as a part of their employment. Specifically, the amendment provides that employees will not be considered as carrying on,

“the business of consultant lobbying”,

if they make lobbying communications as an employee in the course of a business carried on by their employer. The amendment therefore clarifies that in-house lobbyists are not captured by the Part 1 provisions, and that it is a consultant lobbying firm rather than its employees that are required to register in respect of any lobbying activity. As Ministers have made clear—indeed, as we have already debated—the register is designed to address the problem that it is not always clear whose interests are represented by consultant lobbyists.

Amendment 9 provides, first, that where an individual makes a communication in the course of the business of another, then both the individual and that other business or person make that communication. As such, the amendment ensures that the client on whose behalf consultant lobbying communications are made is always declared on the register even if that communication is undertaken by a subcontractor that the consultant lobbying firm has engaged. The amendment also provides that if the individual happens to be an employee—as opposed to a contractor, for example—then the employee is not to be regarded as making the communication on behalf of their employer but, rather, only on behalf of their employer’s client, reflecting the fact that in-house lobbyists and employees of consultant lobbying firms are not required to register.

Amendment 10 is intended to remove any ambiguity as to the maximum period of a reappointment term of the registrar, which is three years. An individual may be reappointed twice, and the maximum period for each of those terms is three years.

Amendments 18, 20 and 21 ensure consistency in the language used in the provisions relating to the cancellation of an information notice or the variation or cancellation of a penalty notice. By ensuring consistency of terminology, these amendments will further clarify the detail of the provisions relating to the cancellation and/or variation of these notices and ensure consistency with approaches to such matters in other legislation.

Amendment 19 clarifies that any individual, not just employees, can commit the offence of carrying on the business of consultant lobbying while unregistered if they and/or their organisation are unregistered. The amendment will remove any ambiguity as to whether the provisions apply to individuals who undertake consultant lobbying in the course of a business but are not employees of that consultant lobbying business—for example, contractors. It will therefore ensure that the application of the provisions in this respect is absolutely clear.

Amendment 24 has been tabled to clarify that the charges associated with registration will be set to ensure that the sums received offset the total costs of the registrar’s activities. Treasury guidance requires that if a charging regime recoups costs other than those directly associated with the service provided—in this instance, the keeping of the register—then the position should be made explicitly clear to Parliament. This amendment reiterates that the charges provided for in Clause 22 will be set to recover the total cost of the registrar’s activities, including those that are not directly connected with the keeping of the register, such as enforcement activity.

Amendment 25 removes drafting in relation to the netting-off of monies from the Consolidated Fund for the funding of the registrar. Such funding will instead be arranged administratively between the Cabinet Office and the Treasury.

Amendment 27 is tabled to fulfil the Government’s commitment to implement the recommendations of the Delegated Powers and Regulatory Reform Committee in relation to Part 1. The Government, as ever, are grateful to the committee for its thoughtful consideration of the delegated powers in Part 1 and have accepted its recommendations in relation to this part in their entirety. The amendment alters the part to require that regulations under Clause 4(5) or Clause 5(4), the first regulations to be made under Clauses 11(3) and 17(3), and any regulation which amends or modifies the provisions of the part, must be made by the affirmative procedure. As a result, Parliament will be provided with the opportunity to undertake detailed scrutiny of any regulations made under the powers in these clauses. Again, I express thanks to the Delegated Powers and Regulatory Reform Committee for its detailed report on this part of the Bill. I beg to move.

Amendment 4 agreed.

17:30

Amendments 5 and 6

Moved by

[Lord Wallace of Tankerness]

5: Clause 2, page 2, line 19, leave out “the communication” and insert “it”

6: Clause 2, page 2, leave out lines 24 and 25 and insert—
““Minister of the Crown” means the holder of an office in the government, and includes the Treasury;”

Amendments 5 and 6 agreed.

Schedule 1: Carrying on the business of consultant lobbying

Amendment 7

Moved by

[Lord Hardie]

7: Schedule 1, page 53, line 1, leave out paragraph 3

[Lord Hardie]

My Lords, in moving this amendment, I declare an interest. As I explained in Committee, I am a member of the All-Party Parliamentary Group on Taiwan and have received hospitality from that Government in the form of social events. Several years ago, I visited Taiwan on two occasions as a guest: the first was as part of a judicial delegation from Scotland and the second was as a lecturer at an international conference. As I advised the registrar of interests last week, I have now been invited to speak at another conference next month, and my expenses will be paid by the Taiwanese Government. It is a legal conference.

Paragraph 3 of Schedule 1 excludes from lobbying activities communications from an official or member of staff of a sovereign power. In Committee, I sought clarification on whether that included countries such as the Republic of China (Taiwan), which is not a member of the United Nations and with which we have no formal diplomatic relations, although we do have an office and a representative there and it has offices in this country. The Minister promised to write to me. I received a letter dated 7 January from the noble and learned Lord the Advocate-General to the effect that communications from any foreign Government, irrespective of their country’s membership status with the United Nations or its diplomatic status with UK, would not meet the criteria for lobbying for profit in Clause 2.

In view of that response, it seemed that paragraph 3 of Schedule 1 was unnecessary, and I wrote accordingly to the noble and learned Lord. I received a reply dated 9 January, in which he confirmed that communications from foreign Governments,

“will not be captured by the definition of consultant lobbying outlined in clause 2”.

However, he added that paragraph 3 of Schedule 1,

“provides helpful clarity, especially to international colleagues, in relation to the application of the register and it is not our intention to remove it by amendment at Report stage”.

It seems to me that Clause 2 should be sufficient assurance to sovereign powers, and the addition of paragraph 3 may have the unintended consequence of causing concern for foreign states that are not sovereign powers. For that reason, the amendment seeks the removal of this paragraph.

In moving the amendment, I seek clarification from the noble and learned Lord as to what is meant by the term “sovereign power” in the Bill. Sovereignty would seem to me to include such issues as control over a geographical area whose citizens are governed by its rulers, whether they have been democratically elected or not. Taiwan is a democracy whose citizens enjoy universal suffrage from the age of 20. There are elections for the President and the legislature every four years. The President can hold office only for two successive terms. The Government pass legislation and govern their citizens, and Taiwan has diplomatic relations with a number of countries, including the United States of America. Does the noble and learned Lord accept that sovereignty does not depend upon membership of the United Nations or having diplomatic relations with the United Kingdom? In those circumstances, will he confirm that Taiwan would satisfy the test of sovereignty for the purpose of this provision? Even if Taiwan does satisfy that test, what about countries which do not? Which ones are they? Does the inclusion of sovereign states not cause concern for those countries which do not come within that category? I beg to move.

[Lord Wallace of Tankerness]

My Lords, the noble and learned Lord, Lord Hardie, has moved an amendment which would delete paragraph 3 of Schedule 1 and, as such, remove the explicit exemption from the requirement to register for members of staff and officials of sovereign powers and international organisations.

As the noble and learned Lord very fairly explained in moving his amendment, we have been in correspondence over the past week on this matter. The Government believe that, by establishing a statutory register of consultant lobbyists, this part of the Bill aims to make clear whose interests are represented by consultant lobbyists when they meet Ministers and Permanent Secretaries. It is not our intention that the register should capture international or diplomatic communications by representatives of foreign Governments or authorities or of international organisations. Communications made by representatives of foreign Governments or authorities will not be captured by the definition of consultant lobbying, as the noble and learned Lord has said, as they will not meet the criteria outlined in Clause 2 and the associated schedule. Those include, among other things, that lobbying must be done,

“in the course of a business and in return for payment”,

and,

“on behalf of another person”.

However, out of an abundance of caution, the Bill also includes a specific exemption in paragraph 3 that explicitly excludes officials or members of staff of sovereign powers and international organisations from the requirement to register in respect of their communications to UK Ministers and Permanent Secretaries.

Noble Lords will recall that Schedule 1 provides a number of explicit exemptions that are designed to provide absolute clarity regarding the application of Part 1 provisions. Those exemptions include one specifically excluding parliamentarians from the scope of the register. Although the Government have been absolutely clear that communications made by parliamentarians to the Government will not be captured by the Clause 2 provision, I understand that, none the less, noble Lords and Members of the other place have been particularly grateful for the extra clarity and reiteration provided by paragraph 4. Paragraph 3 is intended to provide equivalent clarity to sovereign powers and international organisations and the Government are not persuaded that it should be removed.

The noble and learned Lord asked specific questions regarding Taiwan. I am sure that he and perhaps other Members of your Lordships’ House would agree that the Report stage of the transparency Bill is perhaps not the most appropriate forum in which to discuss matters of international diplomacy. Indeed, if the noble and learned Lord wishes to pursue the issue, he may wish to take it up with my colleagues in the Foreign and Commonwealth Office. In these circumstances, I ask him to withdraw his amendment.

[Lord Hardie]

I am grateful to the noble and learned Lord for putting those remarks on the record and, in the circumstances, I seek leave to withdraw the amendment.

Amendment 7 withdrawn.

Amendments 8 and 9

Moved by

[Lord Wallace of Tankerness]

8: Schedule 1, page 53, line 16, at end insert—
“3A An individual does not carry on the business of consultant lobbying by reason of making communications as an employee in the course of a business carried on by the individual’s employer.”

9: Schedule 1, page 54, line 10, leave out paragraph 9 and insert—
“9 (1) Where an individual (“A”) makes a communication in the course of a business carried on by another person (“B”), the communication is to be regarded as being made by B as well as by A.
(2) Where A is an employee of B, then (whether or not the communication is made on behalf of a third party) A is not to be regarded as making the communication on behalf of B.”

Amendments 8 and 9 agreed.

Schedule 2: The Registrar of Consultant Lobbyists

Amendment 10

Moved by

[Lord Wallace of Tankerness]

10: Schedule 2, page 55, line 1, leave out from “but” to end of line 2 and insert “the term for which a person is re-appointed must not be more than 3 years”

Amendment 10 agreed.

Clause 4: The register

Amendment 11 not moved.

Amendment 12

Moved by

[Lord Wallace of Tankerness]

12: Clause 4, page 3, line 12, at end insert—
“(fa) a statement of— (i) whether there is in place an undertaking by the person to comply with a relevant code of conduct, and(ii) if so, where a copy of the code may be inspected;”

[Lord Wallace of Tankerness]

My Lords, in moving the amendment standing in the name of my noble friend Lord Wallace of Saltaire, I will also speak to Amendments 15, 16 and 22. As the Government have made clear throughout the debates on this part of the Bill, the statutory register of consultant lobbyists is designed to address a specific problem—that it is not always clear whose interests are represented by consultant lobbyists. Our objective is to ensure increased transparency without disrupting in any way the fluency of the dialogue between government decision-makers and those who will be affected by policy and legislative decisions.

It is not, nor has it been, the Government’s intention to attempt to regulate comprehensively all those who communicate with government, and the register will not, therefore, be associated with a statutory code of conduct. Instead, the Government are committed to ensuring that the statutory register complements the existing self-regulatory regime by which the industry promotes the ethical behaviour that is essential to the integrity and reputation of the lobbying industry.

We have been very grateful to those Members of your Lordships’ House for their thoughtful suggestions as to how this might best be achieved. After careful consideration of the debates both in this House and in the other place, and discussion with the industry and transparency groups, we have concluded that the most effective option is to provide for a statutory link between the statutory register and the industry-hosted voluntary codes of conduct. As such, Amendments 12, 15 and 16 will require consultant lobbyists to state in their register entries whether or not they subscribe to a publicly available code of conduct in relation to their lobbying activity and, if so, where a copy of the code can be accessed. Such a provision will enhance both the transparency and the scrutiny of registered lobbyists, and the Government hope that the measure will therefore be welcomed.

Additionally, the Government have tabled an amendment to clarify that the registrar can both revise and replace the guidance that he or she has published. I appreciate that this group also includes amendments in the name of the noble Baroness, and I will perhaps respond to these after she has moved them.

[Lord Campbell-Savours]

What are the circumstances in which a lobbying firm would not wish to sign up to the code of conduct?

[Lord Wallace of Tankerness]

I am not sure that this should be addressed to me as opposed to the lobbying firms, since it is sincerely hoped that they would sign up to a code of conduct. What we seek through these amendments is for them to indicate that they have signed up to a code of conduct and for there also to be a link as to where that code of conduct can be found.

Amendment 13 (to Amendment 12)

Moved by

[Baroness Hayter of Kentish Town]

13: Clause 4, line 2, leave out “of whether” and insert “that”

[Baroness Hayter of Kentish Town]

My Lords, Amendment 13 stands in my name and that of my noble friend Lady Royall. I shall also speak to Amendments 14 and 23. This Bill should be about raising standards within the lobbying industry, not least to provide reassurance for the public about the behaviour of lobbyists. While we therefore welcome the Government’s amendments, which build on the arguments that we made in Committee—because they at least recognise the existence of a code of conduct—it is extremely regrettable that the Government have not gone one step further and made it a requirement for registered lobbyists to undertake to abide by a code of conduct. Without something which makes a code of conduct obligatory, there will be absolutely no qualification as to who can get on to the register. Yet once someone is on a register, they will put it on the bottom of their headed notepaper and it will look as though there is some sort of approval for being on that register. That, of course, will not be the case.

I raised this question in Committee and as a result, the noble Lord, Lord Wallace of Saltaire, kindly wrote and clarified to me that even if someone was convicted under the Bribery Act, that would not prohibit them registering as a consultant lobbyist. As the noble Lord wrote in the letter, the register is not an accreditation system and anyone on it will not be considered to be “approved”. In other words, regrettably, this does nothing about raising standards or changing behaviour and nothing about giving assurance to the public that the lobbying of their elected Government is legitimate and above board.

Without any such a requirement to comply with a code, it will also be impossible to remove even the worst offenders from the register—the “slightly dodgy” lobbyists which were described by the noble Baroness, Lady Williams, in the earlier debate. Our amendment to the Government’s Amendment 12 makes the voluntary adherence to a code a requirement.

Our lesser amendment, Amendment 23, would permit the registrar at some time in the future to publish a code of conduct. This might simply be a best practice code, an indication of expected behaviour or an indication against which any allegation to a professional body might be judged. However, it would keep in play the idea that the register should be about behaviour and not simply a list of lobbying companies. I beg to move.

17:45

[Lord Tyler]

My Lords, in Committee I moved an amendment to deal with the linkage between the registration process and existing codes of conduct in the lobbying industry. I warmly welcome the movement that the Government have now undertaken. If I recall rightly, we were given encouraging noises on that particular point in Committee. Therefore I very much support Amendments 12, 15 and 16. I shall listen with interest to what my noble and learned friend has to say about the stiffening of that resolve—if I may put it like that—incorporated in Amendments 13 and 14.

Amendment 23 is, almost by definition, premature. I want to see how this works. I do not want to put more responsibilities on the statutory register than it can easily undertake at the outset. The noble Baroness was quite right to talk about the future. In this particular case, we legislate for the future when it arrives, rather than put more responsibilities on the registrar at this stage. I will listen with interest to what my noble and learned friend has to say about Amendments 13 and 14, to see if there seems to be a practical way in which these could be incorporated and therefore give an even stronger statutory link between the register and the existing codes.

[Lord Campbell-Savours]

My Lords, as I understand the present arrangement—and I am only going by memory from what was said in Committee—the Public Relations Consultants Association already has a code of conduct. If it is correct that the professional organisations may over the longer term actually wind up—and in the period between Committee and Report we were led to believe that this is the case—then I presume that no code of conduct will necessarily apply. That is unless the Government introduce a model code on the basis that my noble friend on the Front Bench has just argued for. I asked the Minister in what circumstances an organisation that registered would not wish to introduce a code of conduct. I presume that during the consultation to which the Minister referred when he moved his amendment, they made clear what those circumstances would be. I wonder if we can be told what Ministers were told. There must be some explanation for why they resist. If there is an explanation—perhaps it is in the written brief or something—maybe we could see it prior to Third Reading. I simply cannot understand what they are objecting to, and we need to know during the course of the debate what it is.

[Lord Hardie]

Perhaps I can answer the noble Lord, Lord Campbell-Savours. In the debate about the first amendment today, I referred to how the PRCA requires people who sign up to the voluntary register to sign up to the code of conduct, which has strong enforcement of regulations or provisions. My point earlier was that if that disappears and there is to be a statutory register in place, it would be appropriate that we have something which is at least as good, not something that detracts from the current position.

[Lord Wallace of Tankerness]

My Lords, I appreciate the welcome given to the government amendments by the noble Baroness, Lady Hayter, and my noble friend Lord Tyler. As I indicated, we listened carefully to the debate in Committee. We have responded by tabling these amendments, which will require consultant lobbyists to state in their register entries whether they subscribe to a publicly available code of conduct in relation to their lobbying activity and, if so, where a copy of the code can be accessed.

The Opposition’s amendments, spoken to by the noble Baroness, Lady Hayter, would require that lobbyists declare on their register entry which publicly available code of conduct they subscribe to, implicitly requiring such a subscription in order to register. The Government are not persuaded that the amendment is appropriate. Moreover, there is no provision that would require compliance with such codes or provide for enforcement.

The objective of the Part 1 provisions is to enhance transparency and scrutiny. We are not seeking to regulate behaviour. The noble Baroness mentioned the exchanges she had in Committee with my noble friend Lord Wallace of Saltaire about lobbyists who breach the Bribery Act. Of course, breaches of the Bribery Act are punishable by unlimited fines and up to 10 years’ imprisonment, or both. The Government do not consider it appropriate for a Bill to contain separate sanctions in addition to those already included in the Bribery Act, which are clearly very substantial indeed. It is quite proper that the Bribery Act includes serious and proportionate sanctions but it would not be appropriate for the transparency Bill to duplicate those sanctions. The Government considered the option of including a penalty whereby a person could be removed from the register but concluded that imposing a limitless prohibition on someone conducting their profession was too extreme a penalty.

Requiring lobbyists to declare whether they subscribe to a code will expose those who do not abide by the ethical principles that are so essential to the integrity of the industry. It is not the Government’s intention, however, to introduce a high-regulation regime whereby the registrar is responsible for monitoring and enforcing subscription to, and compliance with, codes of conduct. The Opposition also suggest that the registrar should be responsible for publishing a code of conduct. As my noble friend indicated, that is premature. The Government’s amendments are intended to complement the existing self-regulatory regime, not to replace or undermine it.

To pick up the point made by the noble and learned Lord, Lord Hardie, and the noble Lord, Lord Campbell-Savours, we do not anticipate that lobbying associations such as the PRCA, CIPR and APPC will withdraw their codes. Indeed, the industry has welcomed the link between its codes and the proposed register, which it recognises will enhance the existing self-regulatory regime. That was the feedback we got during the consultation. I heard the noble Lord’s inquiry but I am not aware that any explanation or example was given of circumstances in which a firm would not register. Rather, the industry anticipates that it will continue with its codes and that the proposed register—and the government amendment—will enhance the existing self-regulatory regime.

[Lord Campbell-Savours]

Would Ministers be happy to meet a lobbying company that did not subscribe to the ethical standards that have been set down, either by the association or any code that the Government might wish to introduce at some stage in the future? Indeed, are there circumstances in which Ministers would refuse to meet them?

[Lord Wallace of Tankerness]

My Lords, I do not think the noble Lord can reasonably expect a blanket application. There may be reasons—I do not know what they might be—that are not malign as to why a particular group has not signed up. We already know that a majority of lobbying firms sign up to and adhere to the respective codes of conduct, but we believe that making it a statutory requirement would lead to unnecessary pressure and that what we are proposing has struck the right balance.

I have a lot of sympathy for the point the noble Lord is making but it would not be appropriate to make a sweeping general obligation on all future Ministers when you cannot foresee particular circumstances that would occur at any time or place. I believe we have struck the right balance. I urge the House to support the Government’s amendments and I urge the noble Baroness not to press the amendment in her name.

[Baroness Hayter of Kentish Town]

My Lords, I thank the noble Lord, Lord Tyler, for what I think is his support for the approach we are taking on this.

Of course, Amendment 23 would be only permissive. It does not require the registrar to publish a code of conduct; it simply permits the registrar, should at some time in the future he or she feel the need to, to be able to do so. I am slightly surprised that the Government cannot even allow a registrar at some time in the future to be able to publish a code of conduct. They seem to be turning their back on any interest in raising standards.

The Minister spoke about the Bribery Act. Of course, the issue is that nobody will be able to be removed from this register for any criminal offence. We could have people convicted all sorts of tax evasion—anything—still on the register. I and others think that this would be very misleading as it will appear that they are on a statutory register and therefore have some stamp of approval.

As to the question of who would not sign up to it, I am sure that your Lordships’ House is well aware that the Association of Professional Political Consultants is supporting our amendment. It very much feels that it will be only the bad boy who does not bother signing up and that this really undermines the code of conduct.

I am not going to test the opinion of the House on this amendment. But in withdrawing it, I will say two things. First, it was very sad to read in the paper yesterday that the UN special rapporteur called this Bill,

“a stain on British democracy”.

Secondly, my fear is that, as per the warning of the Prime Minister, the next scandal waiting to happen will be from a consultant lobbyist, it will be behaviour that would have been caught by this code and it will be this Government who said they did not want to make signing up to a code mandatory. With those words, I withdraw the amendment.

Amendment 13 (to Amendment 12) withdrawn.

Amendment 14 (to Amendment 12) not moved.

Amendment 12 agreed.

Amendments 15 and 16

Moved by

[Lord Wallace of Tankerness]

15: Clause 4, page 3, line 29, at beginning insert “In this section—”

16: Clause 4, page 3, line 31, at end insert—
“(b) a “relevant code of conduct” (in subsection (2)(fa)) is a code of conduct which governs the carrying on of the business of consultant lobbying (whether or not it also governs other activities) and is open to inspection by members of the public.”

Amendments 15 and 16 agreed.

Clause 6: Duty to update register

Amendment 17

Moved by

[Lord Hardie]

17: Clause 6, page 4, line 27, at end insert—
“(6A) A registered person who is aggrieved by the Registrar’s decision in terms of subsection (6) may appeal to the Tribunal against that decision.”

[Lord Hardie]

My Lords, this amendment seeks to give a right of appeal to someone whom the registrar has removed from the register. Clause 6(6) says:

“If the Registrar has reasonable grounds for believing that a registered person is not (or is no longer) a consultant lobbyist, the Registrar may decide that—

(a) the person’s entry should include a statement to that effect, or

(b) the person’s entry should be removed from the register”.

If the latter course is taken, the consequence is that the person—although of course we may be talking about a company—who is operating the business of a consultant lobbyist, once he has been removed from the register, can no longer operate as a consultant lobbyist. Clearly, that will have implications for not only the business itself but its employees.

Moreover, this measure has implications for the criminal law. Clause 12 provides that it is a criminal offence to act as a consultant lobbyist if you are not registered: once you are removed you can no longer act as a consultant lobbyist, but if you choose to do so it will be an offence. What is worse is that Clause 12(1) states:

“If a person carries on the business of consultant lobbying in breach of section 1(1) (lobbying whilst unregistered), an offence is committed by … the person”—

that is understandable, because the person will presumably know—

“and … any employee of the person who engages in lobbying in the course of that business”.

So if an employee of the company is not told that their registration has been removed, he or she will be guilty of an offence. It is strict liability; there is no statutory defence for the employee in that situation, so the consequences for the person and for the employees are quite significant. This decision to deregister a person is at the instigation of the registrar, if he has reasonable grounds for suspecting that they are no longer trading or what have you. There is no right of appeal against that. I am suggesting that there ought to be a right of appeal to the tribunal. There is a tribunal in existence in terms of the provision. If the employee accepts that he or she should be deregistered, there is no issue; but if he considers that the registrar has made a mistake, that would enable an aggrieved employee to have the right of appeal.

The Minister’s answer in Committee was that the registrar will act in a bona fide way and will not make mistakes. I am not questioning the bona fides of the registrar, but we all know that people make mistakes and there ought to be a remedy for someone in that position. In those circumstances I beg to move.

18:00

[Lord Wallace of Tankerness]

My Lords, I thank the noble and learned Lord for his amendment. It might be helpful if in response I indicate the Government’s thinking on sanctions and appeals. When considering the most appropriate sanctions in respect of non-compliance with the register, Ministers did consider the option of removing a person from the register, thereby prohibiting them or the company from continuing to operate as a lobbyist. We concluded, however, that such a sanction would represent a disproportionate penalty as it would essentially take away their livelihood. There are very few industries where, unless one is imprisoned, one is prevented from carrying out one’s professional activities if one has made errors in the course of doing so, and the Government are not persuaded that the lobbying industry should be singled out for such treatment. The sanctions regime that we have designed is therefore a proportionate one, designed to provide appropriate deterrent against, and punishment for, non-compliance with the provisions of the register.

Clause 6(6) does, however—as the noble and learned Lord has pointed out—provide the registrar with the ability to remove a person from the register. That provision is not drafted as a sanction, but rather as an administrative housekeeping measure to enable the registrar to maintain the accessibility and relevance of the register. The registrar may, for example, wish to remove individuals who have retired, passed away, chosen a change of career, or who work for a company that has been wound up. The noble and learned Lord’s amendment would enable a person to appeal against the registrar’s decision to remove them from the register, as under Clause 6(6).

We do not envisage that the registrar would remove any person from the register unless they were confident that the person no longer engaged, or no longer wished to engage in future, in consultant lobbying. I take the noble and learned Lord’s point that there are potential criminal sanctions attached to it. Obviously, as a former distinguished Lord Advocate, he will know that there is a discretion. Indeed, Clause 12(9) indicates that proceedings for an offence under this part in England and Wales may be instituted only by, or with the consent of, the Director of Public Prosecutions, and in Northern Ireland by or with the consent of the Director of Public Prosecutions for Northern Ireland.

Therefore, if a person was to find that they had been wrongly removed, if they wished to object, they could immediately advise the registrar that they were still living, or that they had not given up consultant lobbying, and accordingly the registrar could reregister that person without the need for an appeal and without any difficulty. If they remained dissatisfied in spite of the fact that they could prove that they were still living and consulting, it would be possible to judicially review a decision, although that is very unlikely given the much simpler course of reregistering.

The important point is that this is not intended as a sanction or a penalty, but rather one of administration where the company or the individual is no longer believed to be performing the role of consultant lobbyist. Therefore in those circumstances, if a person becomes aware of that and wishes to challenge it, the best and most simple thing to do is to ask to be reregistered rather than to go to some expense in seeking an appeal to a tribunal.

I hope that the noble and learned Lord is reassured by that explanation. This provision is not intended as a sanction and I invite him to withdraw his amendment.

[Lord Hardie]

I thank the noble and learned Lord for that explanation. I simply comment in passing that if it got the stage of having to have a judicial review, then that is a sledgehammer to crack a nut. But in all the circumstances I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Clause 9: Notice to supply information

Amendment 18

Moved by

[Lord Wallace of Tankerness]

18: Clause 9, page 5, line 24, leave out subsection (7) and insert—
“( ) Where an information notice has been served on a person, the Registrar may cancel it by serving written notice to that effect on the person.”

Amendment 18 agreed.

Clause 12: Offences

Amendment 19

Moved by

[Lord Wallace of Tankerness]

19: Clause 12, page 6, line 25, leave out paragraph (b) and insert—
“( ) any individual who, not being entered in the register, engages in lobbying in the course of that business.”

Amendment 19 agreed.

Clause 16: Imposition of penalty

Amendment 20

Moved by

[Lord Wallace of Tankerness]

20: Clause 16, page 8, line 37, leave out subsection (7) and insert—
“(7) Where a penalty notice has been served on a person, the Registrar may vary or cancel it by serving written notice to that effect on the person.”

Amendment 20 agreed.

Clause 20: Further provision about civil penalties

Amendment 21

Moved by

[Lord Wallace of Tankerness]

21: Clause 20, page 9, line 41, leave out “of notices under section 16(7)” and insert “under section 16(7) of penalty notices”

Amendment 21 agreed.

Clause 21: Guidance

Amendment 22

Moved by

[Lord Wallace of Tankerness]

22: Clause 21, page 10, line 21, leave out subsection (3) and insert—
“( ) The Registrar may publish—
(a) revisions to any guidance published under this section;(b) replacement guidance.”

Amendment 22 agreed.

Amendment 23 not moved.

Clause 22: Charges

Amendments 24 and 25

Moved by

[Lord Wallace of Tankerness]

24: Clause 22, page 10, line 34, at end insert “(whether or not those costs are directly connected with the keeping of the register)”

25: Clause 22, page 10, line 40, leave out subsection (6)

Amendments 24 and 25 agreed.

Amendment 26

Moved by

[Lord Norton of Louth]

26: After Clause 23, insert the following new Clause—
“Publication of communications
(1) A Minister of the Crown, at the time of making a statement relating to any of the matters referred to in section 2(3)(a) to (d), shall publish details of any oral or written communication received in respect of that matter by the Minister of the Crown, or civil servants within the Minister’s Department, or a special adviser.
(2) Communications are exempt from the provisions of subsection (1) if in the Minister’s judgment they contain material that is commercially sensitive or have the potential to affect adversely national security.”

[Lord Norton of Louth]

My Lords, my amendment gets, I think, to the heart of Part 1 of the Bill. The purported purpose of Part 1, as we have heard, is embodied in the first three words of the title “Transparency of Lobbying”. The problem, or rather problems, is that Part 1 does not deliver transparency—it adds little, if anything, to what is already known—and it is not concerned primarily with lobbying. It covers lobbyists rather than lobbying. It registers those who engage in the activity, or rather some of those who engage in the activity, but does not enlighten us as to the particular activity. We may know who some of the lobbyists are, but not necessarily what they are doing in respect of individual measures. As has been argued throughout the stages of this Bill it will not capture the totality of those who are professional lobbyists. Indeed, given the exemptions, it will catch very few. Precisely how many is a matter for conjecture as the Government admit they do not know. The Bill introduces a new bureaucracy for the purpose of registration but achieves nothing substantial in terms of enhancing the transparency of lobbying.

My amendment is designed to ensure that the Bill does what it says on the tin, or rather what it says in the title. It shifts the emphasis from those who lobby to those who are lobbied. It is also comprehensive. By requiring Ministers at the time they make a statement on policy or any of the matters listed in Clause 2 to publish details of those who lobbied them on the matter, one ensures public awareness of who has sought to influence the outcome. Any representation made to anyone in the department would be within the scope of the provision, thus ensuring that those lobbying are not able to avoid their activity being made public. It would capture lobbying, whether direct to the Minister or indirect through someone else in the department. It would not matter whether the lobbyist was a consultant lobbyist, an in-house lobbyist or a part-time lobbyist: all would be caught by the provisions of the clause.

The clause therefore delivers transparency of lobbying. The principal case for the amendment is compelling. What are the arguments against? In Committee, the Minister argued that the objection was essentially practical. I do not accept that; I do not think that it is impractical. Under my amendment, transparency would be achieved through developing existing practices. There is already the quarterly publication of details of ministerial meetings. Ensuring publication of details of those who have lobbied at the point of a policy statement is thus not a paradigmatic departure from what is done already. As my noble friend Lord Tyler explained in Committee, it is achievable. Much information is already published, but it is a case, as he said, of being hidden in plain sight. As he went on to say:

“Indeed, by the time that department does publish that information, the influence that has been exerted over important legislation might have come and gone, right through Parliament. There is simply no opportunity to see what has happened … a simple and searchable central database for all their meeting data would mean that we could take the sting out of the calls, here and elsewhere, for an enormous lobbying register. We would have immediate access”.—[Official Report, 5/11/13; col. 164.]

As he mentioned, his office managed to draw together material from different departments, so it would hardly be beyond the wit or the limited resources of government to achieve. Indeed, I think that the case for that has been made today by my noble and learned friend Lord Wallace of Tankerness in what he said about the further publication of details. We are already moving in that direction, so I believe that it is achievable. It is a step—it might be more than a small step, but it is none the less a step—from what my noble friend developed to what is encompassed in my amendment.

The problem, as I argued in Committee, is not one of resources but one of political will. The Government have produced a mechanistic and very limited provision in order to be seen to be doing something. They have sought to hide just how limited it is by the use of the term “Transparency of Lobbying”, when, as I have said, it does not deliver transparency and it is not about lobbying. If the Government are serious about delivering on what the Bill says in the title and ensuring that the public can see who has lobbied government on a particular policy, they have to change the emphasis from lobbyists to lobbying, from status to activity.

Accepting this amendment would ensure that we are making a great stride towards transparency. As the Bill stands, it is not so much a great step forward as a faltering tip-toe. If the Government are keen, and have the political will, to deliver transparency, they should embrace this amendment. I beg to move.

[Lord Aberdare]

My Lords, the amendment proposed by the noble Lord, Lord Norton, seems to me an elegant and efficient way of achieving the principal aims of this part of the Bill and enhancing the transparency of lobbying, which is what it claims to be all about. I see it as a much more effective and less bureaucratic approach than the very limited transparency offered by the Bill.

The noble and learned Lord, Lord Wallace of Tankerness, has argued on a number of occasions that when Ministers and Permanent Secretaries are lobbied by consultant lobbyists, it is sometimes not clear on whose behalf that lobbying is being done. I find it hard to imagine such circumstances but, in any event, it seems to me that the amendment proposed by the noble Lord, Lord Norton, would fully address them.

Meanwhile, the register proposed looks to me increasingly like a Potemkin village: elaborately constructed to persuade the public that an effective process of regulating lobbying is in place. I very much fear that the public, not to mention the media, will not be fooled and that this Bill may only increase their appetite for a proper, comprehensive system to be put in place, as already exists in other jurisdictions, designed not only to enhance the transparency of lobbying but also to assure and improve the standards of conduct of the lobbying industry.

18:14

[Lord Campbell-Savours]

My Lords, about five or six years ago, I sat on a pre-legislative scrutiny committee dealing with the bribery and corruption Bill. During consideration of the draft Bill, there was a realisation within the committee that the Government were going into the issue from completely the wrong position. That was the view right across the committee. I always remember the civil servants sitting at the back of the committee wriggling in their seats as they saw their case being destroyed along with all the work that they had done in the production of the Bill. I tell that story because I believe that that is precisely what would have happened here if this Bill had gone into pre-legislative scrutiny. If it had done so, a very different approach would have been taken and I think that there would have been agreement on the way forward across the House. We would not have been going down this particular route; we would have taken the route set out by the noble Lord, Lord Norton, in moving this amendment. His is the right approach. The approach that the Government are taking is the wrong approach. His solution is cheaper; it is more efficient; it provides for a greater level of transparency; and it is what the public have expected of Ministers in the introduction of legislation. In the end, we will probably end up where the noble Lord is starting when we find, particularly in the light of the previous amendment, that there are problems in the way in which the system is operating. I know at this late stage that we will not see a change in the minds of Ministers, but I am really sorry that they missed a cue given by the noble Lord, Lord Norton of Louth, when he moved his amendment in Committee and gave the Government the opportunity of at least changing their approach.

[Baroness Royall of Blaisdon]

My Lords, I have little to add. Like my noble friend, I deeply regret that this Bill was not subject to pre-legislative scrutiny. I still do not see the urgency for this Bill. It would have been better if pre-legislative scrutiny had been undertaken now and we could have adopted the Bill in the next Session. Notwithstanding that, I strongly support this amendment from the noble Lord, Lord Norton of Louth, which, as he said, would enhance transparency. The Government have moved today in terms of improving the reporting in ministerial diaries of when lobbying takes place, but that is still a very narrow measure. This amendment is so clever but so simple in that all it does is develop existing procedures. It is not about a new bureaucratic mechanism; it is a very simple means of moving forward. I hope that, even at this late stage, the Minister will consider either adopting this amendment or coming back at Third Reading with the Government’s own. That would not only hold the Government in good stead but improve the governance of our parliamentary system and of government.

[Lord Wallace of Tankerness]

My Lords, I thank my noble friend Lord Norton for moving his new clause, which would require the Government to publish alongside any statement on a matter of policy, legislation or a contract or grant records of any oral or written communication directed to a Minister, the Minister’s Parliamentary Private Secretary or special adviser, and any departmental civil servants concerned with that matter. This is an issue in which my noble friend has long taken an interest. His amendment would also provide exemptions from the requirement to publish for commercial or security-sensitive material.

I do not think that this is a simple proposition, although I certainly think it is an intriguing one. However, at a time when we seek to ensure more efficient and effective government, one should pause to reflect that a statutory requirement that every oral or written communication received by every civil servant, special adviser, Parliamentary Private Secretary or Minister be recorded, collated and published in parallel with any relevant statement is not as easy and simple as was perhaps suggested.

Not only would the system impose a considerable bureaucratic burden on the public sector but one would wish to consider whether it would lead in turn to an information overload. Publishing information in relation to a very small public policy statement may well have some merit, but the volume of information that the Government would be likely to be required to publish in relation to, let us say, the Budget, the Autumn Statement or the Queen’s Speech could be so overwhelming that any transparency value would be undermined by the inaccessibility and quantity of the information.

The Government’s objective is to provide the public with valuable information which they can utilise to scrutinise our actions and hold us to account. The focus should be on the value of information and the insight it can provide, not on the volume. As I have already indicated, this Government have taken exceptional steps to publicise information about decision-making, and the register is intended to extend that transparency to those who seek to influence decision-makers. It is already standard practice that responses to government consultations are published in full or in summary, and if the public require further information about certain policies or decisions, then they have the right to request that information under the Freedom of Information Act.

I recognise that my noble friend is urging the Government to extend or improve their information publication regime, and I know that this view is shared. However, I hope that the commitments to the improvement of transparency that I made on behalf of the Government during the debate on the first group of amendments will show that not only have we already taken unprecedented steps, but we are furthering them. I recognise and acknowledge that they fall short of what my noble friend is seeking, but I hope he will reflect that to publish the volume which he is suggesting—particularly in circumstances such as the Budget—might not enhance transparency, but could lead to an overload that might not assist those he seeks to help with his amendment. I hope that it will be acknowledged that the Government have already taken steps and are committed to more steps; and that what we are doing will increase the level of transparency more than any previous Administration have done. In these circumstances, I urge my noble friend to withdraw his amendment.

[Lord Hardie]

My Lords, I seek a point of clarification. In light of the decision of the House to accept the amendment of the noble Lord, Lord Tyler, on special advisers, will the Minister tell the House whether it is the Government’s position that, notwithstanding that decision, the Government have no intention of adding information relative to special advisers’ meetings with lobbyists when the Minister makes his or her return?

[Lord Wallace of Tankerness]

My Lords, I stand by what I said when I replied to the question asked by my noble friend Lord Tyler in the first group of amendments. Obviously, the Government have not had an opportunity to discuss the matter, as I have been here since my noble friend’s amendment was passed. I have had no opportunity to discuss with ministerial colleagues and others how we will respond.

[Lord Norton of Louth]

My Lords, I agree with my noble and learned friend in that I certainly welcome what he announced earlier about the Government moving towards greater provision of information. However, I disagree with him on all the other points. I am inclined to ask, “What price transparency?”. I am not persuaded by the argument that, “Oh dear, this is all too much trouble”. The body of policymakers is a relatively small number of people who would actually be affected. The Minister seems to envisage some great body of civil servants that would be brought within this provision—they would not. It is doable and it is a fundamental point of principle. We have to go down that route. Either we are going to have transparency or we are not really going to do very much at all as far as this Bill is concerned. This is absolutely fundamental to Part 1 and this is the last chance we have to get it in order. Given the support that has been expressed for the amendment, I would like to test the opinion of the House.

18:23

Division 4

Ayes: 175

---

Labour: 136
Crossbench: 27
Independent: 3
Democratic Unionist Party: 1
Green Party: 1
Bishops: 1
Conservative: 1
Plaid Cymru: 1

Noes: 226

---

Conservative: 145
Liberal Democrat: 68
Crossbench: 7
Independent: 2
Ulster Unionist Party: 1

18:36

Clause 24: Regulations

Amendment 27

Moved by

[Lord Wallace of Tankerness]

27: Clause 24, page 11, line 27, leave out subsection (5) and insert—
“( ) A statutory instrument containing any of the following regulations may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament—
(a) regulations under section 4(5)(a) or 5(4);(b) the first regulations to be made under each of sections 11(3) and 17(3);(c) regulations under this Part which amend or modify the provisions of this Part.”

Amendment 27 agreed.

Amendment 28 had been withdrawn from the Marshalled List.

Clause 37: Duty to appoint an assurer etc

Amendment 28A

Moved by

[Lord Monks]

28A: Clause 37, page 40, line 9, at end insert—
“(c) to have a duty of confidentiality to the trade union and its members, and(d) to abide at all times by the trade union’s obligations under the Data Protection Act 1998 to protect the information of members.”

[Lord Monks (Lab)]

My Lords, I shall speak also to Amendments 28B, 28C, 28D and 31A, standing in my name and that of my noble friend Lord Stevenson.

To give some brief context to those who are new to this subject, we have moved from Part 1 of the Bill to Part 3, which is concerned with trade union administration. It seeks to strengthen the public supervision of union membership records, with a duty on unions to produce a membership audit certificate annually. Unions with more than 10,000 members would have additionally to appoint an assurer—a new term to me in public life—whose job would be to check the veracity of union records. Perhaps this is a precedent, and perhaps we could do with assurers to be appointed to check some companies’ tax affairs from time to time.

Why is union membership being singled out? Are there are a lot of complaints? Is there widespread public concern? Is there a lobby around to say that there are some scandals in this area? Let us have a look at the facts: between 2000 and 2004, the last time that any records were taken, six complaints had been received by the certification officer, and there has been only one since, which is current. Is there public pressure for this intrusion into internal union affairs? No one knows who has been asking for it because the Government have never been able to provide any information about that.

This provision seems to be the product of a fevered imagination, convinced that it is quite legitimate to pile a load of red tape on to unions when generally the policy is against red tape and overregulation. In today’s Conservative Party it does not actually seem necessary to have a reason to make union lives more expensive and complex; it is almost a reflex action that they wish to perform from time to time.

It is not just about the expense and trouble that this part of the Bill is likely to cause. The measures have only one parallel in the EU: in Malta, in connection with a specific circumstance of rivalry between unions, a public official got involved in checking membership records. Every other country keeps the state and employers out of union membership records.

This is not a theoretical discussion about what might happen. There are 2,000 cases currently in procedure over allegations of blacklisting, and the people being accused—some of them have admitted it—are eight of the major blue-chip construction companies in this country. This involves sites as huge as the Olympic site, which of course is being regenerated for other purposes, and the Crossrail site, which we are all aware of if we travel around central London. There is a risk of information falling into the wrong hands and becoming available to people who should not see it. We know that the more people get hold of records and information of this kind, the more likely it is to fall into the wrong hands and be used to people’s detriment.

That is what this series of amendments is about. They would strengthen protection for the individuals. The Data Protection Act 1998 classed trade union membership as “sensitive personal data”, and was quite correct to do so. A specifically protected category under the EU data directive is a derogation for unions. Unions should be affected only where there is a substantial public interest. Where is the substantial public interest in this measure? There have been hardly any complaints, and very few people have spoken on this subject.

Amendment 28A would make clear that the assurer, this new creature, would have a duty of confidentiality to the union and its members, and a duty at all times to abide by the trade union’s own obligations under the Data Protection Act to protect the personal information and data of members. It is important that we recognise that this information is very sensitive and the assurer should have a duty of care and proper responsibility. I hope that the Minister will be able to accept these rather simple points. After all, if you reverse the situation, will he be saying that there is no duty of confidentiality to the union and its members and no duty to help a union maintain its obligations under the Data Protection Act?

Amendment 28B would strengthen the hand of the union to get rid of an assurer who breaches confidentiality or some other statutory duty, or for some other justifiable reason. In the Bill, the only way in which an assurer can be sacked is by a resolution at a general meeting of members or delegates—an annual conference, if you like. That is limited scope indeed for termination of this position. Surely, a union, which will be paying the assurer, should be able to discharge a person who is unsuitable, just as it can an accountant, an auditor or its solicitor. The Bill’s assumption here is somehow that the assurer will be in conflict—an investigating officer looking into the affairs of a miscreant union and an adversary who must be protected. The Bill gives the game away on the Government’s rather hostile approach to what unions are doing and how they are administering their affairs.

Amendment 28C reinforces the point about the assurer complying with the Data Protection Act, and reminds us that information can easily be obtained nowadays by people who should not have it, particularly if it becomes too widely available.

Amendment 28D would narrow the circumstances under which the names and addresses of members can be disclosed. It would specifically remove requests from the certification officer, the government registrar, who already has significant powers over trade unions in this area but not normally to get personal data. We are trying to stop him from being able to ask for personal, individual data. There is an inspector in addition to the assurer in this cast list of new people who will be rolling around union administration. We also want to stop an inspector, appointed by the certification officer, getting this individual, personal information. In effect, we are seeking to establish the principle that the disclosure of an individual’s name and address is done only with the individual’s consent, and not with some blanket power given to the assurer, the assurer’s officials and the certification officer. In this way, we are trying to help to protect against breaches of the Data Protection Act.

18:45

Amendment 31A would impose a penalty on an assurer who has breached the confidentiality obligations. There can be serious implications for the individuals whose information is misused; I mentioned the 2,000 blacklisting cases, and others are being investigated by the Scottish Affairs Committee. Individuals can be out of work for years if they find themselves on one of these lists. For an assurer who is inefficient or incontinent with the trust that has been given, it seems only right that they should feel that they too could be at risk if they get this area wrong. I beg to move.

[Lord Morris of Handsworth (Lab)]

My Lords, I support this group of amendments in the name of my noble friend Lord Monks. My reason for doing so is the hope that, in his response, the Minister will spell out clearly the duties of the trade union assurer, particularly—a point made by my noble friend Lord Monks—the duties of confidentiality.

Confidentiality is of the utmost importance. We have all read about the blacklist constructed by the consulting association. It is a subversive list which can damage the individual both financially and in terms of their reputation. I have read nothing in the Bill, and have heard nothing at Second Reading or anywhere else, which gives any protection at all to the possible victims of this new office of assurer. I ask myself why the trade union is a target, because it has much less information than, say, the CBI, the IoD or the Federation of Small Businesses. Those organisations have information which is relevant to the whole notion of behaviour within the context of the workplace. Now, however, the trade unions are at the sharp end.

I will not rehearse here the names of the consulting association; I do not want to pollute the debate. If the organisations involved were not in the category of trade unions or any other membership association, I suspect that the consulting association’s behaviour would be the subject of criminal investigation. However, that is not a matter which we decide here. What we decide here is how to ensure that the new office carries with it the responsibility and obligation which it owes to the people who can be impacted by its decisions. The assurer’s task will be an onerous one, in so far as it relies on the co-operation not just of individual trade unions but of employers. I therefore hope that when the Minister replies he will make absolutely clear that this particular office carries with it the highest notion of responsibility because it has the propensity to ruin so many lives and so many reputations. For those reasons I support the amendments tabled by the noble Lord, Lord Monks, and look forward to hearing the Minister’s reply.

[Lord Lea of Crondall (Lab)]

The whole philosophy of Part 3 seems quite astonishingly inequitable between what you might call the TUC family on one side of industry and the CBI or the employers’ associations on the other. Now, the counterpart to a trade union—as set down by the famous Donovan royal commission in 1965-68—is an employers’ association, but it has no responsibilities, no obligations of transparency or membership finances or anything else. So this is a purely political measure. It was no doubt agreed by the quad over the heads of people in the department of business, but we are never going to be told that. This is going to be another trophy on the mantelpiece of the Conservative Party and other people will have their attention drawn to this trophy on that mantelpiece in due course.

[Lord Cormack (Con)]

I had not intended to say anything but I have listened with care and sympathy to what has been said. I hope that when my noble friend comes to reply he will be able to give at least some of the assurances which have been sought by the noble Lords, Lord Morris, Lord Monks and Lord Lea of Crondall. Every man or woman is entitled to privacy. It is more and more difficult in this modern age for them to have it but it is something we all cherish and prize. No one should be put into a position where it is in jeopardy. What has been said by the noble Lords on the other side during this very brief debate has convinced me that there is at least a case to answer and I very much hope that my noble friend, for whom I have very real regard, will be able to give at least some of the assurances that have been sought when he replies to this debate.

[Lord Martin of Springburn (CB)]

I support the noble Lord, Lord Monks, and others who have spoken regarding these amendments. At one time it went without saying that anyone who had private information or was privy to it would not divulge that information except when obliged to do so in legal circumstances. Recent matters have come up in the media—I will not stray into the sub judice area—exposing people who have been involved and pleaded guilty to misconduct in public office where they have handed over private and confidential information to those who are not entitled to that information and received payment for it. We need assurances from the noble Lord the Minister that things are going to be kept very tight indeed.

I notice in the Bill that the removal of the officer concerned has to be carried out either by a meeting of the whole membership or of the delegates. That can be a very cumbersome area. If the executive of a trade union found that such an officer was wanting in his or her behaviour, it would take a long time to get all the delegates together, find a venue for them and check their credentials before they met. If it was going to be the membership, bear this in mind: it used to be the cry of the employers and the Conservative Party—a cry they were entitled to make—that there were too many small unions. I belonged to a small union, the metalworkers’ union, which was only a few thousand members and everyone said, no, we should have larger trade unions. As a result, my own circumstances changed and I now belong to the union called Unite, which is an amalgamation of many other unions. I have got to be careful because perhaps next week the name might change—I have to keep track of the name of the union to which I belong. The downside of all those amalgamations means larger membership and if we carried out the legislation to the letter by saying we should have an aggregate membership meeting, it would be some venue that we would have to create.

The important thing is that sadly we have people in confidential situations who have divulged information, and some sides have done it in what we in Scotland call a very sleekit way because they put out information by e-mail. If an e-mail goes out in a certain way, you have a trail of other e-mails which divulges a great deal of information. This matter has got to be looked at.

[Baroness Williams of Crosby]

I very strongly support the amendments tabled by the noble Lords, Lord Monks and Lord Stevenson of Balmacara. Since we have seen some of the troubling issues—for example, the keeping of a blacklist in the construction industry—it is clear that somebody whose personal details have been revealed can be at risk in a way that should not be acceptable. It is very sound and sensible to propose that there should be very stringent sanctions against any inspector who fails to recognise that confidentiality of individuals. It is accepted in this country that very strong and good relations should exist between responsible employers and responsible trade unionists. An amendment like this should be supported by the House.

[Lord Stevenson of Balmacara (Lab)]

I declare an interest as a retired member of a large union. As the noble Baroness has just said, it is common ground that the unions in Britain play a significant part in the modern economy. They should be cherished, not castigated. As has been mentioned, if the Government had brought forward such a burdensome set of duties on any other section of civil society, there would have been an outcry. Well, there is an outcry and the Government should listen.

For many employees, their membership or lack of membership of a trade union is a private choice, and one which they desire to keep confidential for what may be very legitimate reasons. The knowledge that under these new powers, trade unions could be required to provide their membership register to a government-approved official for “good reason” may act as a disincentive for workers to join unions, particularly in light of the current concern over union blacklisting. As my noble friend Lord Monks said, the Government are introducing this series of measures at the same time as the full extent of the scandal of blacklisting in the construction industry is gradually coming to light. This is by no means the only industry in which members of a union may wish to keep their membership confidential for fear of being subject to discrimination.

These measures clearly go beyond what is necessary and they are certainly not proportionate if they are to achieve any legitimate aim behind the proposals, if indeed there is one.

[Viscount Younger of Leckie (Con)]

Before I address the amendments I would like to say a few words about blacklisting, which was raised by the noble Lords, Lord Monks and Lord Morris, and my noble friend Lady Williams, because at each stage of this Bill we have sought to emphasise how seriously this Government take any allegations of blacklisting. The Trade Union and Labour Relations (Consolidation) Act 1992 makes it unlawful to refuse to employ a person because they are a member or not a member of a trade union or because they refuse to join or leave a trade union. This position was strengthened in 2010, when in response to the Consulting Association blacklist uncovered in 2009, the Government introduced anti-blacklisting regulations and increased the penalties for unlawful processing of data. Data controllers can now be fined up to £500,000 for serious offences. There have been several allegations of new evidence of blacklisting to date, but no evidence of this practice recurring. The Scottish Affairs Select Committee and Information Commissioner are both currently investigating the potential for ongoing offences, and the Government continue to take a close interest in this issue. Therefore, the provisions that we are considering today do not increase the risk of blacklisting, because of the protections in place around the treatment of membership data.

19:00

Noble Lords have tabled a number of amendments, which I understand seek greater assurance that the confidentiality of union membership data will be protected. That is entirely understandable. Information about who is a union member is sensitive, as the noble Lords, Lord Monks and Lord Morris, have already eloquently pointed out, and it is right that it should be protected. However, existing data protection rules are sufficient for those purposes. I hope to be able to explain how the data will be protected and to reassure noble Lords that their concerns are unfounded.

I will begin by speaking to Amendments 28A, 28B and 28C, which are all concerned with the protections around the way the assurer handles membership data. Amendment 28A would place on the assurer a duty of confidentiality to the union and its members, and would require the assurer to comply with the union’s obligations in the Data Protection Act. Amendment 28B would prevent the appointment or reappointment of an assurer in the case of a breach of the union’s confidentiality, of its statutory duties or of its terms of appointment, or where there are reasonable circumstances not to appoint. Amendment 28C states that the assurer must comply with the Data Protection Act. Amendment 28D seeks to prevent the disclosure of member data in any circumstances, except with their consent or where required as part of criminal proceedings.

The intention behind all those amendments is already achieved by the Bill and the application of the Data Protection Act. I will explain that. The Bill explicitly states that the assurer will owe a duty of confidentiality to the union, which will be incorporated into the assurer’s appointment. Breach of that duty would mean that the union would have a remedy for breach of contract. The union may also choose, if it wishes, to include additional protections as part of its contract with the assurer. In addition, the assurer must comply with the Data Protection Act, because in performing their statutory functions they will be a data controller. Should the assurer breach data protection rules, the union may engage the Information Commissioner, who enforces the Data Protection Act. The Information Commissioner has a range of powers at his disposal, including imposing a fine of up to £500,000. Finally, the assurer is prohibited in the Bill from disclosing member data unless in specific permitted circumstances. Noble Lords also raised the issue of whether an assurer who breaches their obligations should be prevented from reappointment. I am happy to confirm that that is entirely within the control of the union. The Secretary of State will set out in an order who is qualified to be an assurer, but who the union chooses from that list is entirely at its discretion. If, for any reason, the union has doubts about the assurer’s suitability, including their handling of sensitive member data, it can pass a resolution to remove the assurer on agreement of the members.

On Amendment 28D, the intention seems to be to prevent the disclosure of member data in any circumstances except with member consent or where required as part of criminal proceedings. That would in practice prohibit a certification officer, inspector or assurer having the necessary access to the register, as they would be unable to identify the member in order to seek their consent. It would defeat the Government’s policy intention of giving assurance of union compliance with the duties to maintain a membership register. We believe that this amendment is unnecessary. The existing contractual and statutory arrangements surrounding use of membership data will be sufficient to ensure that membership data are protected.

I have already explained the protections with regard to the assurer and will now say something about the protections with regard to the treatment of membership data by the certification officer and the inspector. As part of that I will therefore deal with Amendments 31, 31A and 32. Amendment 31 would remove the explicit statement that the certification officer may require an explanation of documents from the assurer. In practice, that may interfere with the effective application of the new enforcement regime. It may be important for the certification officer to engage with the assurer in a particular case in order to make an informed assessment of a union’s compliance with Section 24 of TULRCA. Amendment 31A deals with the appointed inspector and seems intended to ensure that there are appropriate protections to ensure that they handle sensitive membership data properly. I reassure noble Lords that a range of safeguards are already in place to achieve that. That includes, for example, that first of all, the certification officer will have discretion to appoint an inspector as he does currently for inspectors of a union’s financial affairs. It will be for the certification officer to ensure that he appoints someone capable of fulfilling their responsibilities. Secondly, the inspector will owe a duty of confidentiality to the certification officer. Should the inspector breach that duty, it will be for the certification officer to decide the appropriate remedy, considering the circumstances and severity of the breach. A third party appointed as an inspector is likely to be someone in a professional firm. It would seem unnecessarily restrictive to require that the certification officer could never appoint that firm again, no matter what had happened to the individual concerned. A further example is that if the appointed inspector—or any other individual, for that matter—has breached data protection rules, they will be liable to the Information Commissioner taking action, including imposing a fine of up to £500,000.

I infer that the intention of Amendment 32 is to obtain explicit, cast-iron assurance that sensitive union member data will be adequately protected under the new investigatory powers introduced by the Bill. The amendment intends to prohibit the disclosure of data to third parties, but there is already provision in law to prevent the disclosure of documents to third parties, except as necessary for the performance of functions set out in the Bill, where the member consents or, of course, for criminal proceedings. In any event, as I have already explained, member data will be well protected by both existing and new legal safeguards. The assurer will owe a contractual duty of confidentiality to the union, as stipulated in the Bill. The Data Protection Act will also continue to apply whenever the assurer, certification officer or inspector handle union membership data, because in doing so they will be data controllers. Furthermore, the certification officer is obliged to act in concordance with the European Convention on Human Rights, which includes the individual’s right to privacy. We are confident that the certification officer is well placed to deal with sensitive data, and I can reassure noble Lords that the Government will not have access to member data through those provisions.

Finally, Amendment 33 changes the heading to new Section 24B. We do not think that that would have a substantive effect, but have assumed that the intention is that provisions relating to the appointment of the assurer would not be enforceable. We will come to the role of the assurer in the next group of amendments, but it is key to the achievement of the Government’s policy objective. I understand the desire to ensure that the Bill poses no risk to the confidentiality of union membership, and I have been listening this afternoon. I am sure that there are adequate safeguards in current data protection legislation and introduced by the Bill, to ensure that not only the assurer but also the certification officer and the certification officer’s inspector properly protect the confidentiality of union member data.

The noble Lord, Lord Monks, questioned why the legislation is needed, because the certification officer has had only a limited number of complaints. However, the current statute does not automatically provide assurance that the register is up to date for all members. The certification officer can investigate only in response to a complaint, and then only, as I mentioned in Committee, in response to a complaint from a union member. Not all members will be proactive about checking the register. A member who checks it may not see the register in its entirety. In any case, they cannot know whether the names and addresses of other members are accurate. Members cannot tell whether the register is accurate in recording all new joiners and leavers. We believe that those measures are an appropriate way to give greater confidence to union members and, importantly, to the public, so that unions know who their members are and can contact them.

The noble Lord, Lord Martin of Springburn, raised concerns because there has been some misuse of sensitive data by some public authorities. I assure him that the certification officer is subject to duties under the Human Rights Act 1998 to comply with the European Convention on Human Rights, including a person’s right to his private and family life and his correspondence. We are confident that the certification officer is well placed to deal with sensitive data. One respondent to the consultation conceded that, although they thought this was a risk, they had,

“no reason to believe the CO’s office has poor systems”.

The noble Lord, Lord Morris of Handsworth, stated that unions were more harshly regulated than other organisations. Noble Lords are sometimes fond of drawing analogies between trade unions and other membership organisations, but trade unions are unique in both purpose and design. They are explicitly defined by legislation, and in practice regulation is tailored to each type of organisation, to fit its role and function. Again, we believe that these measures are appropriate to the function of trade unions. I therefore ask noble Lords not to press their amendments.

[Lord Monks]

My Lords, I thank the Minister for that reply. I admired his straight bat, which could have been used down under, against the Australians, in the last few weeks.

I hope that noble Lords have noticed the complex web of officials who are going to be busying themselves around the union world. There is quite a cast list of people for unions to deal with. First there is the certification officer, whom they are used to dealing with, but now he has extra powers. Then there is the new assurer, who is unique in British public life. Nobody else has an assurer. No political party has an assurer. Do we have assurers to check the electoral roles in some inner city areas? Of course we do not. People do their best, and we get 80% accuracy, on average, in this area.

Why are we appointing this network of officials, who will no doubt be passing the buck if problems really do arise? I know that at the end of the day it will be the trade union that ends up in breach of the data protection legislation in the event of any complaints, despite the fact that it will all have passed through the hands of the certification officer, the assurer and an inspector. And of course, there have been no complaints—I remind people of that.

One of the problems with this debate is that the Committee stage was truncated. These measures were brought forward quickly. Because Part 2 of the Bill was paused, Part 3 was rushed forward to fill the timetable gap. So we have not had a chance to get many people interested in this particular issue. This is perhaps the best attended debate that we have had. I hope that people who are listening with an open mind—I know that that is the position of many in this House—will reflect on this complex, bureaucratic, red-tape way of spinning some kind of web around unions, causing expense, difficulty and possible problems where no problems exist.

Union members want to be confident that their information is not misused. Contrary to what the Minister said about confidence, they will be less confident with this measure than they would be on the ground that the union accountants are doing their job properly. They are reasonably confident about that now—as confident as they can be. I am not saying that union membership administration is perfect; of course it is not. But it is in the unions’ interest to make it perfect, and the certification officer keeps an eye on what is going on.

I appreciate the Minister’s straight bat, but I would like to test the opinion of the House.

19:13

Division 5

Ayes: 157

---

Labour: 133
Crossbench: 15
Independent: 2
Democratic Unionist Party: 1
Green Party: 1
Bishops: 1
Plaid Cymru: 1

Noes: 216

---

Conservative: 140
Liberal Democrat: 62
Crossbench: 9
Independent: 2
Ulster Unionist Party: 1

19:19

Amendments 28B to 28D not moved.

Amendment 29

Moved by

[Lord Whitty]

29: Clause 37, leave out Clause 37

[Lord Whitty (Lab)]

My Lords, Amendment 29 would deal with the problem that was alluded to in the previous debate. A number of my noble friends referred to the new office of assurer and queried why we needed it, what exactly the role of the officeholder would be and suggested that it was an additional level of red tape and bureaucracy for trade union administration. In replying to the previous debate, the Minister did not address this point but rather sought to reassure the House in relation to confidentiality. However, in seeking to leave out Clause 37, my amendment suggests that there is no point whatever in inventing this new role. The oversight of trade union administration is clearly in the hands of the certification officer, and has been so for many years.

The Government may feel that the certification officer needs new powers—they are contained in the Bill to a limited extent—or that he needs new resources to carry out his job, but the relevant apparatus for doing that is already in place. They have invented a new officer without defining that officer’s qualifications, which will be defined in technical regulations at a later stage. The Minister referred to a list from which trade unions could choose but, presumably, the list is drawn up by the Government. The House does not have before it the qualifications that are required for someone to be on the list, the details of how you get on to it or what professional standards the assurer should meet.

As my noble friend Lord Lea asked, why is no other body in society having an assurer imposed upon it? No reason has been given for that by the Minister so far; perhaps he will do so when he replies to this debate. The only reason given in the impact assessment for not moving entirely down this road is because, as he says, assurers are an important part of society and the public and union members need to be assured that their membership records are in order. As far as the rest of society is concerned—I include in that employers and the Government—clearly the membership records of a union are most important at times of possible industrial strife. The list of members taking part in a ballot on a potential industrial dispute must accord with the union membership covered by the issue under dispute. There are reams of case law in that area, so the assurer has not been invented in order to monitor strike ballots more rigorously as that issue is already covered.

The full union membership list, excluding members’ personal details, is an important document when union elections are held. We need to ensure that internal elections are proper and fair, that members who are given a vote in those elections have the right to vote in them and that everybody who falls into that category has a vote. However, that issue is also covered in existing legislation and there are already complaint mechanisms and potentially draconian sanctions for a union which breaches those rules. Therefore, I see no reason to invent another officer.

Unions, through their own rules and through legislation more generally, are already required to audit their financial records. A significant part of those financial records comprises the receipt of membership dues and the recording of those receipts. The auditor of a trade union already has to do that. The oversight of that process is already there with the certification officer, who has substantial powers to intervene. Where in this does the assurer rest? He is not an auditor, a lawyer or an officer of the certification office. No standards of professional attainment exist for such a creature. In the previous debate, the Minister failed to reply to my noble friends Lord Lea and Lord Morris of Handsworth as to why such a person was necessary.

19:30

Amendment 29 deletes the whole reference to the assurer. There would have to be other consequential amendments but the simplest and cleanest way to deal with it is to delete the whole of Clause 37. The other toughening up of the requirements on unions to keep a membership list is there, and the powers of the certification officer would remain. However, the role of this specious, unnecessary and, to use a House of Lords’ term, otiose officer is not spelt out in anything that the Minister has yet said or in any of the documentation that we have received. I therefore think that it would be more sensible for the Government, instead of engaging in the creation of more layers of red tape in this area, just to drop the idea of this new level of bureaucracy and to let the existing requirements and the existing regulator perform their jobs—if necessary, to tighter standards than they previously consider that they have done. To do so probably would require the certification officer to have more resources, which I am sure the Government have in mind, but it would be cheaper to give those resources to the certification officer than to invent a whole new and unnecessary profession. I therefore hope that the Government could either give us more cogent reasons than they have so far given as to why the assurer has been invented or that they will take the issue away and look at it again.

My other amendment in this group basically deals with the powers of the certification officer and when they require documentation from the union over and above that which is supplied to the certification officer in the normal course of events. My amendment refers to “if” the certification officer considers it necessary after receipt of a complaint. Otherwise, it is a very open-ended power to require a lot of very delicate documentation. The trigger for requiring that additional documentation needs to be the receipt of a valid complaint. That would amend the following clause accordingly.

My main point in these amendments is: why on earth do we need this new officer, if officer is the word, this new profession, if profession is the word, this new bureaucratic measure—I was trying to think of another word—to be imposed within the trade union structure but not in any other part of civic or economic society? I beg to move.

[Lord Lea of Crondall]

My Lords, I think the word that my noble friend Lord Whitty could not quite conjure up, because it is not often used in this House, is hypocrisy, and it has to do with red tape. My noble friend Lord Monks reminded us that, not only because of Christmas and the new year but also because of the pause, we are between Parts 1 and 2 of the Bill, and now are dealing with Part 3. It is all rather confusing. There is overkill of all these lists of people who have some sort of role. We mentioned the electoral roll and how 80% might be up to date. I think that 50% would be a very good score for a candidate examined on this set-up even when it has been a year in use. It is quite remarkable. I will not go through the whole list.

It reminds us of the point made by a number of colleagues at Second Reading to do with the famous impact assessment and the enormous costs falling on the trade unions and many other people as well, which requires some justification. In particular, some justification is required of a Government whose raison d’être seems at some times to be to cut out red tape. If this is not red tape, what is it? The Government are clearly are going to be obstinate and will stick to their guns, whether the bowling is fast bowling, a googly or whatever else. We know that they have been taken over by dogma on everything to do with industrial relations.

Finally, I have here the report about which my noble friend Lord Monks and I have had a conversation. We asked people in the international departments of European countries to tell us, in answer to a questionnaire, what goes on in these successful democratic countries on these sorts of questions. No one remotely has a top-heavy superstructure such as this. I have little doubt that the only reason why a Labour Government might not repeal this on day one is that they would have very much bigger fish to fry, no doubt, in some respects.

I have little doubt that the life of this legislation will be very short, which is the only saving grace I can think of to mention in support of my noble friend Lord Whitty on this amendment.

[Lord Stevenson of Balmacara]

My Lords, it is interesting that the questions we are left with keep coming back and keep being unanswered. What is the serious public policy issue behind this proposal? What exactly is the problem? What will this Bill achieve that current legislation does not achieve? Will the measures being proposed do more than simply increase the regulatory burdens on trade unions? We have all those questions and very few answers.

We know that union membership is already regulated by the Trade Union and Labour Relations (Consolidation) Act. Section 24(1) puts a duty on unions to maintain an up-to-date register of members’ names and addresses so far as reasonably practicable. This legislation has stood the test of time since the days of Mrs Thatcher. As has been said already, we are not aware of any calls having been made to the Government to extend this provision. BIS, the certification officer and ACAS have confirmed under freedom of information requests that they have received no representations for such a measure.

As my noble friend Lord Whitty said, it may be that a better self-certification system could be an advantage. I say “it may be” because we do not know what the problem is but cloaking the issue in some spurious idea that there is some public concern out there that would be remedied by having an additional checking arrangement is simply not sufficient.

[Viscount Younger of Leckie]

My Lords, I turn to two amendments which seek to drastically reduce the effect and extent of the provisions as drafted. This would in practice undermine the Government’s key policy objective, which is to introduce a proportionate and effective reporting and enforcement mechanism alongside the existing duty of unions to maintain an up-to-date membership register so far as is reasonably practicable.

Amendment 29 would remove Clause 37 and the role of the independent assurer from the Bill altogether. Clause 37 gives credibility to the assurance process by requiring independent scrutiny, which is in line with the Government’s overarching aim to provide greater assurance of the maintenance of trade union membership registers for the benefit of members, employers and, importantly, the wider public. As some unions become large organisations representing members across a variety of employers and workplaces, their administrative requirements become more complex. As a consequence of the prevalence of very large unions in recent years, there is also now an increased public perception of a union’s scope of influence.

This may be an appropriate moment for me to restate what I said in Committee: I am not minded to comment on the media coverage of particular industrial disputes, such as the Grangemouth refinery or, more recently, the issue affecting Howdens. Instead, as I should, I will focus on the separate issue at hand relating to the obligation of unions to maintain up-to-date membership registers. Perhaps this can also be described as playing a straight bat. I hope so.

The nature of union membership data means that they decay easily—for example, addresses can quickly become out of date. About 2 million people move in and out of union membership every year, which equates to around one in four union members. The register for a union which has a 25% turnover in membership could theoretically be entirely out of date in four years. Unions are already required by statute to maintain a register of the names and addresses of their members. What we are introducing is annual reporting on the compliance of unions with this duty where currently there is none. I believe—

[Lord Lea of Crondall]

I am most grateful to the Minister for giving way. This must be about the fourth time that he has said that, on the one hand, of course there is “churn”, as the word is now fashionably used, in trade union membership—20% or something like that. That is where I suggest the figure of 80% comes from; there is always churn going on. There is then a huge leap of logic, and the word “proportionate” in this context strikes me as astonishing. It is straight out of Alice in Wonderland—words mean what I say they mean, no more and no less. It cannot be proportionate to say that, because of churn, there is only 80% accuracy at any moment in time, therefore we will make it accurate by saying we will make it more accurate because we will have inspectors running around the country making it accurate. They will not make it accurate. In terms of what we have described as the problem with churn, how can they make it accurate? So the punishment will not fit the crime, even if there were a crime in the first place. Can the Minister give a more reasonable justification for an extraordinary lack of logic in his pronouncements?

[Viscount Younger of Leckie]

My Lords, the reasoning behind this is simply to look at the bigger picture in relation to unions. The noble Lord, Lord Lea, needs to be reminded that unions with 10,000 members or fewer will be self-certificating. We are looking at those unions which have large membership lists. Many colleagues of the noble Lord—certainly in Committee—acknowledged that it is a challenge to keep membership lists up to date. This is why—in a very light-touch way—we are bringing in an assurer so that we can be sure that the lists are up to date, so far as is reasonably practicable.

I believe that the membership audit certificate will be credible for larger unions only if it is independent, and this is because larger unions often represent workers across a range of different job types and employers. They have complicated branch structures—I am sure that the noble Lord, Lord Lea, would agree with that. They often have different IT systems and there may be greater time delays for updating information. A union official or rep would not, therefore, have the same credibility as an independent expert in ensuring that the systems used across the entire union are fit for purpose. This is the essence of what we are aiming to do. That may also be helpful in response to the comments made by the noble Lord, Lord Whitty.

Clause 37 requires trade unions with more than 10,000 members to appoint a qualified, independent person, called an assurer, who has a duty to provide an annual membership audit certificate to the union. The membership audit certificate must state whether, in the opinion of the assurer, the union’s system—and please note this word “system”—for compiling and maintaining the register is satisfactory to comply with the duties in Section 24. This is analogous with the regime in place for financial reporting, where all unions are required to appoint an independent auditor to approve their accounts. An assurer has the right to access the membership register and other relevant documents at all reasonable times, and to require information and explanations from the union. This is necessary for the assurers to be able to meet their duties and carry out their functions. However, as I mentioned in a previous debate, they will be subject to the obligations of the Data Protection Act when handling union membership data.

The assurer may request access only to documents which may be relevant to the union’s duties in Section 24. At the outset, when the assurer is appointed, the union and the assurer could agree terms as to the relevant documents to which the assurer should have access. If, after making inquiries, the assurer’s opinion is that the union’s system for maintaining the register is not satisfactory, or the assurer is unable to obtain the information necessary to provide the certificate, they must state this on the certificate and give reasons for doing so. If the certificate is not satisfactory, the assurer is required to send it to the certification officer as soon as is reasonably practicable but after submitting it to the union. Again, as part of the contractual arrangements, it would be possible for the union and the assurer to agree that the assurer must alert the union of any possible issues before the certificate is finalised.

19:45

Clause 37 also provides an order-making power for the Secretary of State to set out who is qualified to be an assurer. A person is not qualified if their independence is questionable, or if the union believes that they would not carry out their duties competently. An officer or employee of a union, or their partners or employers, may not perform the role of assurer for that union. In order to carry out their duties, the assurer is likely to want to understand how records are compiled and maintained. This could include looking at whether the union has mechanisms in place to ensure that it collects and records data accurately from new members, reminds members to keep their addresses up to date, and updates the register promptly once changes are notified. Unions will set out in their individual rules the provisions for appointing and removing an assurer, although certain provisions will have effect, notwithstanding this flexibility. The union retains ultimate control, however, because it can always remove an assurer from office by passing a resolution. As I have explained, Clause 37 is crucial to the credibility and effectiveness of the reporting regime introduced by the Bill in order to demonstrate the unions’ compliance with their existing duty to maintain an up-to-date register of members.

I now turn to Amendment 30. This would alter Clause 38 to make the certification officer’s powers to require the production of documents contingent on receiving a formal and qualifying complaint. As drafted, the amendment is difficult to follow, as there is no explanation of what would constitute such a complaint. The intended change seeks to undermine the key policy objective of Part 3 of the Bill, which is to give union members, employers and the public greater assurance that unions are complying with their existing duties to keep an up-to-date register of their members’ names and addresses. The amendment would make it more difficult for the certification officer to exercise the investigatory powers introduced by the Bill.

The principle underlying the existing duties has not been questioned. However, evidence from BIS’s consultation and from debate in this House and in the other place has indicated that unions face difficulties in keeping their records updated and that there is not always confidence in their compliance with the duties. As the noble Lord, Lord Monks, acknowledged in Committee, union membership records are not perfect. The noble Lord has a wealth of experience in this field, which I recognise and as has been demonstrated by his contributions to these debates. As he explained to the House, unions collect subscriptions in a variety of methods. He said:

“The record keeping could sometimes slip”.

Moreover, he said that high turnover in some sectors means that,

“a third of the members of USDAW, the main retail union, have to be replaced each year just for membership numbers to stand still”.—[Official Report, 11/11/13; col. 529.]

Current statute does not provide—

[Lord Monks]

I am grateful to the Minister for giving way. I just wonder how the assurer can help a union in a situation where there is very rapid labour turnover, lots of short-term contracts and great difficulty in keeping membership rolls up to date. What possible value can the assurer add to that situation, except to confuse it?

[Viscount Younger of Leckie]

It is certainly not to confuse, my Lords. As I explained, the role of the assurer is to provide that element of credibility which is not there at present. The assurer will also be working closely with the union and a contract will be drawn up with the union, notwithstanding the core powers that the assurer must have. That is why we believe this is necessary, in particular for the larger unions with 10,000 members and above.

The current statute does not provide an assurance of the union’s compliance as there is no sufficient enforcement mechanism. The Bill addresses this shortcoming by allowing the certification officer to investigate instances of possible non-compliance where there is good reason to do so. The certification officer will require access to the register and other relevant documents in order to determine whether a union is diligent in maintaining a register that is up to date so far as is reasonably practicable. The current system relies on individual members making formal complaints to the certification officer before he can investigate. As members can have no way of knowing the state of the register as a whole, the route for the certification officer to determine whether a union is compliant with its statutory obligations is not that effective to ensure that the existing duties are complied with. There may be a good reason for the certification officer to investigate a union’s compliance with the overarching duties even in the absence of a complaint including, for example, where a membership audit certificate has not been provided by the union or it is unsatisfactory.

We want to give members and the wider public an assurance that all unions are complying with their existing statutory duties. If the measure is applied only when the certification officer receives a complaint, we will not achieve this objective. Just because there are few formal complaints that we are aware of, it does not mean that there is no problem and this is an important point to make bearing in mind the comments that were made earlier by the noble Lords, Lord Whitty and Lord Monks. The access to and handling of union data is a concern that has occupied a great deal of time and debate. The Government understand the sensitivity of union membership data and agree with the importance of protecting them. However, for the reasons discussed at length previously, I reassure noble Lords that this amendment is unnecessary. Membership data will be well protected by both the existing and new legal safeguards. The assurer will owe a contractual duty of confidentiality to the union as set out in the Bill. The assurer, the certification officer and the inspector will be subject to the obligations of the Data Protection Act whenever they handle union membership data. Furthermore, the certification officer is obliged to act in accordance with the European Convention on Human Rights, which includes the individual’s right to privacy.

These two amendments between them would undermine the Government’s policy objective in Part 3 of the Bill. Amendment 29 would remove the independent scrutiny that is fundamental to the credibility of large unions’ annual reporting on duties. Amendment 30 would remove the provision for the certification officer to proactively investigate and assess a union’s compliance with Section 24 of TULRCA where there is good reason to believe that there may be an issue. For these reasons I cannot accept the amendments.

Just before I ask the noble Lord, Lord Whitty, to withdraw his amendment, I want to respond to a question he put to me. He raised the important issue of who would be appointed to be an assurer. We have already said that we will consult on who will be eligible to be an assurer, and further to this consultation the Secretary of State will make an order setting out who is eligible. They are likely to be qualified professionals such as solicitors and lawyers, which was alluded to by the noble Lord, Lord Whitty, auditors or independent scrutineers. This is similar to the system in place for independent scrutineers, and furthermore the unions will have discretion over whom to appoint from the list of eligible assurers and to remove them from the role on agreement with their members. Unions will be able to define the detailed terms of contract and their relationship with the assurer. I ask the noble Lord to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the Minister for that lengthy reply, in which he repeatedly referred to the Government’s key policy objective. However, it is not clear to me what the policy objective of the whole of Part 3 is, and in particular the invention of this new category of assurer. I am glad that there is to be a consultation on it, but I do not see that anything is likely to emerge at the end of that consultation which could not be written into the terms of the annual audited return from the trade unions, whereby the external auditor would be required to certify that their membership system complied with the requirements. Why we have to invent a whole new structure is creating grave suspicion among the unions. The whole of Part 3 is very difficult to understand, but its effect will be a significant cost on union administration. The creation of an intermediate level between them and the certification officer is bound to increase distrust, and there is a suspicion that the Government’s motive in this is, at the very least, suspect.

Some of the motives that we have to tried to impugn have been denied by the Minister. It is not about tightening up on strike ballots. It is not about assurances on internal elections. It is not about the political fund. It is about imposing a cost and a bureaucracy on trade unions that will increase the likelihood of conflict between them and their regulator. I do not think that that is in the interests of trade union members and I cannot see that it is in the interests of wider society. The suspicion therefore has to be that other, sinister motives are involved here—that the Government wish to impose someone right in the heart of the administration of the trade unions, someone employed or contracted theoretically by the trade unions but who is actually a different type of person. I do not want to go too far down the paranoid road but I am quite a long way down it.

It seems to me that all the objectives that the Minister has mentioned can be achieved by a tightening up of the audit and by the certification officer and his or her powers. This intrusion of an assurer has not been justified. Had we not been voting so much today and we are all getting very tired, I would have asked the opinion of the House. I think that this is a bad part of the Bill and this is the worst part of that bad part. Before they put it into operation, the Minister and the Government need to think about this very carefully again. In the mean time, I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Clause 38: Investigatory powers

Amendments 30 to 32 not moved.

Clause 39: Enforcement

Amendment 33 not moved.

Amendment 33A

Moved by

[Lord Monks]

33A: After Clause 39, insert the following new Clause—
“Part 3: Commencement
The provisions in this Part shall not come into force until the Secretary of State has received notification from the Certification Officer that all registered unions with more than 10,000 members have completed such rule changes as are required to satisfy this part of the Act.”

[Lord Monks]

My Lords, Amendment 33A concerns the commencement of Part 3. We have already debated the purposes of the Bill and I must say that I am still in a state of some mystery about exactly what it is supposed to do, other than give trade unions a provocative prod, and it is certainly doing that. For the Government to act in this way without any clear justification for doing so other than through some sense of confidence and assurance—for whom, I am not sure—is a dangerous road to go down. We will be watching other developments in this area, if there are any, very carefully.

I am not going to go through the speeches and points that have been made already. This amendment seeks to ease the regulatory burden by extending the period before the Act is brought into force. The Minister has learnt about union administrative procedures. To change the rules, which would have to be done to allow the assurer access to this kind of information, is a time-consuming, complicated and expensive prospect. The kind of costs we are talking about are those for a union with, say, 1 million members that holds a rules revision conference every two or three years of 1,000 delegates. If, because of the timing, a union has to hold a special conference, that will cost another £500,000. The Government’s estimate that the cost to unions collectively will be around £460,000 pales into insignificance against the costs of union conferences and administration. We debated earlier that the assurer can be got rid of only by the decision of a delegate conference, and again you can see the kind of costs that are beginning to stack up; they go way beyond where the impact assessment took us. In Committee, the Minister indicated some scope for flexibility about this aspect and I know that there have been talks about it. The TUC has been involved and some noble Lords have had contact with the Minister as well.

Let me emphasise that there does not seem to be any great urgency about the need to bring this in. It is not a matter of widespread public concern. There are no current, or indeed historical, problems screaming for attention and for the early implementation of this legislation. It would very much help unions, which would obviously have to comply with the law, if they had adequate time to prepare the necessary changes to their rules without the need to have special conferences and rules revision processes that are exceptional rather than in their mainstream work. It would be cost effective, economical and practical, and would minimise some—not enough but at least some—of the red tape that has been dolloped on the administrations of trade unions. Therefore, I ask the Minister if there can be an adequate period of digestion that avoids unnecessary costs and administrative complexities.

This is a probing amendment, so I wonder whether the Minister can say something about what talks he has had on this issue and whether he has been able to give any more thought to it that he could disclose today in addition to what was said in Committee. I hope that if there is a chance for further dialogue, he will agree to come back to the House on Third Reading to give a report about where we are. However, this is a plea for a road map of where the unions go in relation to full implementation, for some additional time and maybe even for a scintilla of sympathy for the union position as we are forced into this particular corset, which is unwelcome in so many aspects.

20:00

[Lord Balfe (Con)]

My Lords, let me first apologise for not taking part in the earlier stages of the Bill. As a new Peer I had not made my maiden speech and therefore under the conventions of the House could not intervene.

There is a common misconception in many parts of the United Kingdom that trade union membership equals Labour Party support. This is not true. Setting aside the fact that voter turnout among trade unionists is not dissimilar to that of the rest of the population, of those who do vote around one third of TU members vote for the Conservative Party—may that grow in the future.

Unions are already firmly regulated in two ways, first by provisions in the Trade Unions and Labour Relations (Consolidation) Act 1992, passed by the last Conservative Government and left on the statute book by the Labour Government. I noticed the noble Lord, Lord Lea, mentioned the life of legislation as being short, but that is not the precedent we have from the party opposite when it was in government—indeed, it left most trade union legislation firmly in place. Secondly, the contractual relationship between unions and their members is set out in each union rule book, which is a legal document that governs how unions operate. In order to change its rules, a union must obtain support from its members. Having received that support, the rule changes can be made only within the context of statutory legislation.

In order to ensure—and I am sure we all support this—that small and unrepresentative groups of members cannot change the rules of unions without fully consulting the members, unions all have democratic procedures in their rule books which must be followed if changes are to be made. In order to give effect to the provisions of the Bill, many unions will have to hold special rules revision conferences where members vote to change their union rule book to comply with the new provisions. This is, of course, especially and usually the case with larger unions.

Tonight I ask the Minister to consider two points: first, to raise the exemption limit in Clause 37 from the present 10,000 members to a figure of around 40,000. Mention has been made of turnover in big unions. Small unions often face a very different situation. Many are professional unions, such as the radiographers or the physiotherapists, who will be caught by this Act, but have a very low turnover indeed, as do many of the others. If we went from 10,000 to 40,000, we would go from 22 to 37 unions but we would exempt all the unions that traditionally have a low turnover and a highly professional membership.

The noble Lord, Lord Martin, who is not presently with us, earlier mentioned small unions. I had the privilege for many years to belong to a very good small union called AUEW-TASS. I must say that since TASS merged, it has got more and more out of touch. Now I am almost ashamed to say I am a member of Unite, as I remain a member of Unite. I still look forward to the day when we might have an engineering section in Unite that could compare with AUEW-TASS. None the less that is a digression. Even if this change were accepted, 90% of union members would remain within the assurer provisions of the Bill.

Secondly and finally, no doubt the Government and the certification officer will want to ensure that unions are able to make these changes following the agreed procedures. This will mean giving notice to members of a special conference. Good administration—which I am sure we all support—would indicate that a transition period of at least 17 months would be helpful. I would welcome an assurance from the Minister that the transition period after commencement will at least accommodate the 17 months, because it is in all our interests that this is done properly and competently.

[Lord Stevenson of Balmacara]

My Lords, I have never in my long life met a Conservative member of a trade union. It is very nice to be introduced to one and to hear him speak. It has been very evident from the speeches we have heard, both in this small debate and previously, that if the Bill is to progress and be brought into law it must operate with the best chance of success otherwise it will not have been worth a candle doing it. As my noble friend Lord Monks said in an earlier intervention, the right way to do this is to give the unions—particularly the larger unions—adequate time to comply with the Act in a way that is cost effective, economical and practical, but also from their point of view. Unions are, after all, independent self-governing bodies. As the noble Lord, Lord Balfe, said, they rightly have procedures for making complex changes in their constitutions and it will be necessary, as the Bill recognises, that the unions will make some changes through rules conferences and the like. This is not to say in any sense that there is not anything wrong with what is currently in the Bill, but I detect in some of the comments made that we are still not absolutely clear about how the procedures will operate and the timescales that will be on and that will interfere a little bit with transparency.

When he responded to this point in Committee, the Minister said that he shared the sentiment that,

“trade unions should be given sufficient time to prepare”,

and he hoped he could,

“offer a positive and emollient answer”,—[Official Report, 11/11/13; col. 596.]

to allow time for the bedding down of the new legislation. I take it from that that he is still interested in trying to make sure that this works well. Picking up on what has just been said, I get to 17 months from the comments that were made during Committee if I follow two tracks. The first is that a union whose reporting year ends on a fiscal basis—that is, 31 March—would not need to submit a report for the year ending 31 March until the end of August 2015, which I think is 17 months if I do my maths correctly. However, a union that reports on a calendar-year basis would have a little more time. It would not have to submit its report for the year ending 31 December 2015 until the end of May 2016.

That is the sort of level of complexity which we are operating on. If we are going to fit a 17-month period, which I think was mentioned earlier as being appropriate, combining it with a Royal Assent, possibly by March 2014, and a period of consultation on the question of how assurers are going to be both defined and appointed, that suggests that it would be sensible to have one further round of discussions before it is finalised. Will the Minister consider having a short meeting with me and a few colleagues to try to run over this so that we can get some absolute clarity on it? Thereafter, we can all work together, not in any sense to shake the principles which are part of this part of the Bill, but to make sure that they work effectively.

[Viscount Younger of Leckie]

My Lords, Amendment 33A could delay commencement of the provisions in Part 3, as they would not come into effect until the certification officer knows that all trade unions with more than 10,000 members have changed their rules to provide for the appointment and removal of an assurer. I know that noble Lords have been concerned that unions should have sufficient time to prepare for these new arrangements. In particular, we have been told that many unions do not routinely have an opportunity to make rule changes—I think the noble Lord, Lord Monks, alluded to that earlier. I am happy to offer reassurance to the noble Lord, Lord Stevenson, and other noble Lords that unions will have the time that they need. They will have at least 17 months to comply from the point at which the legislation takes effect, because the provisions will not apply retrospectively.

Unions will be required to submit a membership audit certificate alongside their annual return for the first full reporting year after the changes become law. The 17 months is the combination of the 12-month reporting period plus the five months that is allowed after that period to submit the annual return. The earliest that the provisions will take effect is October this year, which would depend on Parliament granting Royal Assent next month. That being the case, unions would have a minimum of 25 months from Royal Assent. In practice, many unions will have much longer.

Unions have different reporting years: many work on either a calendar or a financial year, which the noble Lord, Lord Stevenson, mentioned. Were the legislation to take effect in October 2014, a union with a calendar reporting year would first provide the membership audit certificate by the end of May 2016; for a union with a financial reporting year, it would be the end of August 2016. The noble Lord, Lord Monks, raised the issue of allowing unions sufficient time to meet the new requirement. I entirely sympathise with that and have said something about it just now. I have to confess that this is not the most straightforward of timetables to set out and I would be very happy to meet the noble Lords, Lord Stevenson and Lord Monks, and any other noble Lords to clarify the timings and state why we think this would be sufficient for trade unions to make the transition. That reflects the discussions that we have had with the TUC and others.

I take this opportunity to warmly welcome the noble Lord, Lord Balfe, and the experience that he brings on union matters, something I mentioned earlier in respect of the noble Lord, Lord Monks; it is only fair to acknowledge the experience that the noble Lord, Lord Balfe, has as well. I have had some discussions with him, at his request, on the question of whether the £10,000 threshold is set at the right level. Our primary objective is to supply assurance to union members, and to the wider public, about the existing statutory requirement to maintain an up-to-date register of members. The requirement to maintain a register applies to all unions, no matter what size. However, at the same time, the Government do not want to unnecessarily prohibit the creation of trade unions or undermine their ability to operate. We believe that it is possible for a union to be confident in the accuracy of all its records where its membership is small. We also believe that the wider public will think it reasonable that special provision is made for the smaller union and accept that where numbers are smaller it is reasonable to rely on the union’s own assessment.

Self-certification means a union officer assuring that every individual record is up to date, so far as is reasonably practicable. We think that this is achievable for unions with 10,000 members or fewer, but it becomes much more challenging where there are more members than that, which was part of the debate that we had earlier. The union official would have to be confident of the position and union members and the wider public would have to have trust that this was reasonable—a point, again, that I made earlier. By contrast, independent assurance focuses on whether the system in place for monitoring records is satisfactory, as opposed to making a statement about the accuracy of individual records. I therefore believe that this amendment is unnecessary and I ask the noble Lord to withdraw it.

[Lord Monks]

My Lords, it was a pleasure to hear the noble Lord, Lord Balfe. I welcome him to this House. It was a pleasure to hear him praising TASS, which, as its chosen acronym suggests, was not exactly aligned with the Conservative Party—nor, from time to time, with the Labour Party either. However, we all change and I am interested in what his views were when he was an active member of that union.

We appreciate the way in which the Minister responded on the timetable point. It will be useful to just see if we can tie this matter down in the next couple of weeks and see where the different positions that we hold meet, so that unions comply in a way which is sympathetic to the necessary costs and timetables. On that basis, I beg leave to withdraw the amendment.

Amendment 33A withdrawn.

Consideration on Report adjourned.

Co-operative and Community Benefit Societies Bill [HL]

Monday 13th January 2014 Lords Chamber

Second Reading

20:16

Moved by

[Lord Newby]

That the Bill be read a second time.

[Lord Newby (LD)]

My Lords, it is a pleasure to open the debate on the Bill. This is a consolidation Bill which brings together and modernises the law relating to co-operatives and community benefit societies, and other societies registered or treated as registered under the Industrial and Provident Societies Act 1965, with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission.

As a consolidation Bill, the Bill aims to remove ambiguities but does not seek to introduce any new policy or make substantial changes to law. It is still, however, an important step in reducing legal complexity for new and existing societies. In January 2012, the Prime Minister announced that, in support of the co-operative movement, the legislation dealing with co-operatives and other mutual societies would be consolidated into one co-operatives Bill. This Bill represents the Government’s delivery of that commitment.

The industrial and provident society sector forms a major part of the mutuals landscape, with a diverse mix of over 7,000 independent societies in the UK. Given their clear importance to the diversity and strength of the UK economy, the Government are keen to continue their support for the sector. This consolidation Bill is one element of the key reforms we are making to help ensure that industrial and provident societies are well placed to play a central role in the UK economy for years to come.

As part of the Government’s continued efforts to simplify and modernise legislation, the Law Commissions made a number of recommendations for modifications which have been incorporated into the Bill. For example, the language regarding the conditions for registration as a community benefit society has proved problematic. The Bill now clarifies this position and provides that a society may be registered as a community benefit society only if it is shown to the Financial Conduct Authority’s satisfaction that the society’s business is being, or is intended to be, conducted for the benefit of the community.

The Law Commissions also identified areas where some of the language used in the legislation was unnecessarily complicated. For example, there is no reason to distinguish between documents in electronic format and those in other forms. The approach has been harmonised in the Bill, with relevant sections applying to all of a society’s business correspondence and other business documentation in any form. The Bill has been warmly welcomed by sector trade bodies, particularly Co-operatives UK.

In addition to the consolidation Bill, we are taking further steps to modernise industrial and provident society legislation by commencing various sections of the Co-operative and Community Benefit Societies and Credit Unions Act 2010. The Government are also introducing a package of measures in support of co-operative societies through secondary legislation, and the consolidation Bill takes account of these measures. These are due to come into force in August 2014 and are: first, increasing the cap on the amount of withdrawable share capital that an individual can put into a society, which will increase from £20,000 to £100,000; secondly, allowing for troubled societies to enter insolvency rescue proceedings; thirdly, giving the FCA additional powers to investigate societies; and, fourthly, making electronic submission of registration documents simpler.

Following a public consultation earlier last year, all of these measures have been warmly welcomed by sector representatives. Co-operatives UK, the main industry trade body, has welcomed the changes, saying that:

“The appetite and commitment to do business the co-operative way has not waned”,

and that this is,

“a massive vote of confidence in the strength of the co-operative sector and recognises the movement’s ambitions for growth and development”.

This is a useful and overdue Bill.

[Lord Tunnicliffe (Lab)]

Will the measures that the Minister has just described come before Parliament, either as affirmative orders or as negative orders?

[Lord Newby]

My Lords, I believe that they will. I will confirm that to the noble Lord, but that is my understanding.

As I was saying, this is a useful and overdue Bill, which will allow the Government to continue their support for the mutuals sector, as underpinned in the coalition agreement where it sets out their commitment to foster diversity and promote mutuals. The Bill is a key part of wider legislative reforms aimed at strengthening the sector and encouraging increased investment in the country’s co-operative sector, allowing it to thrive. In short, this Bill is good for the mutuals sector, and I commend it to the House.

20:21

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, I am grateful for an opportunity to speak briefly in the gap. I am afraid that I was away on business in the United States last week and I arrived back at Heathrow only at 10 o’clock last night. By the time I got my mind into gear, I am afraid that the speakers list had closed.

My two simple points refer to the point made by my noble friend in his opening comments. The heavy type on page 3 of the Law Commissions’ report, which is the first recommendation, says that,

“a society may be registered as a community benefit society only if it is shown to the Financial Conduct Authority’s satisfaction that the society’s business is being, or is intended to be, conducted for the benefit of the community”.

I would like to explore with my noble friend some of the practical implications of this. First, who defines “benefit of the community”, where is it defined, who judges whether the definition has been met and who hears appeals against judgments perceived to be unfair? Secondly, does the test precisely match the public benefit test applied by the Charity Commission, which is the key to charitable status? If not, is there not a danger that the unscrupulous will game the system to take advantage of whichever regime is laxer? As far as the charitable sector is concerned, which is under pressure with the Cup Trust and executive pay, further adverse publicity would be surely unwelcome.

My second point concerns the question of “to the FCA’s satisfaction”. Is my noble friend convinced that the FCA will devote sufficient resource to ensuring that the benefit to the community test is met? When I reviewed this as part of my charity review, it was clearly low on its agenda. At paragraph 10.29 of my report I said:

“Only a small proportion of IPS are charities; all of those are community benefit societies. Charitable IPS are exempt from registration with the Charity Commission and, although they are registered with the Financial Services Authority … the FSA undertakes no regulation in respect of any type of IPS. This, then, is essentially an unregulated sector”.

It needs to be a test that is not just a nod-through. It needs to be a test that is reapplied from time to time; it should not be the case that, once a society is through the hoops, it is in the pen for ever.

I appreciate that these are detailed comments made in very short order. I have not been able to give my noble friend any advance warning, and I apologise for that. I would be happy if he wanted to write to me, but these are potentially very important issues, which deserve a public response and airing.

20:24

[Lord Tunnicliffe]

My Lords, before I commence, I wonder if the Minister has some information from the Box that he might share with me in response to my question.

[Lord Newby]

My Lords, I am extremely pleased to be able to reassure the noble Lord that the four measures that I referred to will be brought before Parliament shortly. One will be brought forward in an affirmative resolution and the other three in a negative resolution.

[Lord Tunnicliffe]

I thank the Minister for that response, which will make my brief speech even shorter.

At somewhat short notice we were asked if we would take this consolidation Bill and it fell to me as the sort of second tier on our team—because we have only two now—to look at it. I thought, “What is a consolidation Bill?”, so I looked it up and it seemed that the first role of the Opposition was to have a reasonable confidence that it was a consolidation Bill. The test is in the Companion at 8.205 and there are five reasons, (a) through (e), and it is fair to say that the Bill seems to fall among (a), (b) and (c).

The first thing I did was to get a copy of the Bill. I was just about to start reading it when I got another document, the table of origins, which convinced me that I should not read it. Almost fortuitously, the Printed Paper Office offered me a copy of the Law Commission report, and I have read that. I take the point that these Bills have to be looked at very carefully to ensure they pass the test for a consolidation Bill but, reading the Law Commission’s report a little bit carefully, its recommendations seem to fall within the overall requirement.

Certainly, when one goes on to read how this Bill will now proceed, to the Joint Committee on Consolidation Bills, where there will be detailed scrutiny of the origins of the parts of the Bill and the Government, through their witnesses, will have to assure the committee that it meets the test, we can be comfortable that this is a proper consolidation Bill and serves a useful purpose.

The thing about consolidation Bills is that no parliamentarian—except when you are in government, I suppose—can be other than joyful about their arrival. I cannot think of parliamentary language to describe much of our legislation but, having sat through so many variations of financial services Bills—FiSMA and so on—in the sure and certain knowledge that no reasonable human being using the source document could possibly understand it, consolidation Bills are a joy to the eye.

However, one has to ask: why this one? The Government’s response to the consultation offers the rather nice words that it will,

“consolidate existing IPS legislation in one place, and is an important step in reducing legal complexity for new and existing societies”.

I agree that it is an important step but I ask the Minister: why this Bill and not many others? Do the Government have a plan for a programme of consolidation Bills? I particularly hark back to the travail that he and I and others have been through with the various financial services Bills. I have to say that the Treasury did a splendid job of producing Keeling schedules and such things to help us but even with all that help it was an uphill battle. Will the Government bring forward further consolidation Bills?

The next area I was going to venture into concerns the merits of the other actions that stand alongside the consolidation Bill and are set out in the consultation document. Because of the Minister’s assurance that they will come in front of Parliament as either negative or affirmative instruments, I will not waste the time of the House on those issues now and will not ask the Minister questions he would have to promise to write to me about.

Accordingly, we broadly support the concept of a consolidation Bill. We wish it well and I wish the members of the Joint Committee who have to go through all this paperwork all the luck in the world.

20:30

[Lord Newby]

My Lords, I am grateful to noble Lords who have spoken in this pleasingly short debate at this time of the evening.

The noble Lord, Lord Hodgson, asked me some very technical points and I will of course write to him as he suggested. He asked about the extent to which the FCA will prioritise looking at IPSs. The FCA is committed to maintaining the registration requirements of being a bona fide co-operative or community benefit society. One of the measures that the Government will bring forward will give the FCA additional powers to investigate these societies for irregular activities, as well as disqualifying directors where appropriate. There has been a long-held view that the FSA has devoted very little attention to this sector, but there is a logic in the regulators putting in more effort to make sure that, as the sector grows both in size and prominence, it is well regulated. However, I will certainly pass on his view that this is a sector which the FCA certainly cannot afford to ignore.

The noble Lord, Lord Tunnicliffe, very kindly welcomed the Bill. One advantage of consolidation Bills is that if you do attempt to read them, the first parts—until one gets into the schedules—are often a much better read than what preceded them. This is a consolidation Bill albeit with the Law Commission’s drafting amendments to clarify various ambiguities. Why, he asks, are we consolidating in this area rather than in a lot of others? We have been very keen as a Government to simplify and develop the law in this area. It has been a bit of a patchwork quilt. There has been a long tradition that mutuals legislation is introduced as private Member’s legislation, and more than with other types of legislation, little pockets of provision have developed over the decades. As the sector grew, however, it needed legislation that was commensurate to its new status.

There will be other consolidation Bills in due course. The challenge is, as much as anything else, around resources. Sadly, this Government are no less keen than their predecessor to produce a large volume of legislation; and sadly, from the parliamentary counsel’s point of view, there are limited resources. The other challenge, as always, is to consolidate at a time when there are often new changes which are sometimes difficult to provide for legislatively. However, the whole process of consolidation is an important one in terms of keeping the law up to date and useable. The Government are committed to maintaining that approach.

I am grateful to noble Lords who have spoken. We believe that this is a useful piece of tidying-up legislation, and I commend the Bill to the House.

Bill read a second time and committed to the Joint Committee on Consolidation Bills.

House adjourned at 8.34 pm.