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Stephen Phillips (Sleaford and North Hykeham) (Con)
1. What steps his Department is taking to protect minority Christian communities in the middle east.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
Government Ministers regularly speak out against abuses of the right to freedom of religion or belief. I met minority Christian communities in Egypt in December and in Algeria during my visit there last week precisely to highlight this issue.
Stephen Phillips
My right hon. Friend will be aware of the plight of Christians in Iraq, which often goes unreported in the western media. The scale of the exodus of Christians owing to sectarian violence is unprecedented and those who remain often flee to Kurdish-controlled areas to escape violence in Baghdad. However, although they are physically safer in places such as Irbil, they are struggling to survive. What steps is the Department taking to encourage the Iraqi Government to protect Christians in that country and to improve their security?
Hugh Robertson
My hon. and learned Friend is absolutely correct. The security situation of Iraq’s Christians, and indeed other minorities, remains precarious. We continually urge the Iraqi Government, through ministerial contacts and by all other means, to protect all communities and to deal appropriately with those who are found responsible for acts of violence and intimidation because of political, ethnic or religious affiliation.
Naomi Long (Belfast East) (Alliance)
The Geneva II peace conference for Syria is taking place tomorrow. What actions are the UK Government going to take to ensure that the voices of Christians and other religious minorities are heard during those negotiations, to ensure that freedom of religion and belief are enshrined in any new constitution?
Hugh Robertson
The hon. Lady is right to raise that issue, and it has been a key concern for the Foreign Secretary and all involved on behalf of the Government. We have absolutely urged the coalition to make sure it is broad based and includes Christians who it will bring to Geneva II. Our hope is that that will be achieved.
Mr James Clappison (Hertsmere) (Con)
Is my right hon. Friend aware that persecution of Christians is also continuing unabated in Iran, with reports of Christians being lashed for drinking communion wine, having their homes raided and having Bibles confiscated? Is my right hon. Friend aware of the particular case of Maryam Naghash Zargaran, who last year received a sentence of four years of imprisonment on account of her Christian beliefs and whose health is now reported as deteriorating? Will my right hon. Friend take up her case with the Iranians?
Hugh Robertson
I certainly will, and my hon. Friend correctly highlights the serious position of Christians, and indeed of other minorities, in Iran. It is important to remember that despite the very welcome unfreezing that is going on in some areas, in other areas little or nothing has changed, and that will very much be part of the negotiations as we move forward.
Ian Lucas (Wrexham) (Lab)
The Minister will be aware that the last three years have proved among the most difficult for Christians right across the region. What specific steps is the Minister taking to point out consistently that tackling the persecution of Christians in the region is fundamental to the UK Government’s approach to dealing with issues of toleration?
Hugh Robertson
The hon. Gentleman is right to raise an issue that is often raised in correspondence that Members from across the House send into the Foreign Office. As a result of that, I have made a particular point of going to visit Christian communities in order to highlight their concerns and to ensure that the Governments in many of those countries know we care about those concerns. I had a very good visit with the Coptic community in Egypt the week before Christmas and, as I said in my answer, I have just been to see the Christian community in Algeria during my visit there. I will continue to do that and also to examine with the Churches, and in particular with people such as the Archbishop, with whom I had a conversation about this over Christmas, what more we can do to work better with them.
Mr Henry Bellingham (North West Norfolk) (Con)
2. What recent assessment he has made of the UK’s relations with Pakistan; and if he will make a statement.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
Our relations with Pakistan remain strong, and we pay tribute to the people of Pakistan in their struggle against recent terrorist violence. Last June, my right hon. Friend the Prime Minister was the first foreign Head of Government to visit Pakistan after its new Government took office.
Mr Bellingham
Does the Minister agree that Pakistan’s long-term economic future depends not on more aid, but on more trade and, especially, on improved European Union market access? Does he also agree that Pakistan’s recent joining of the generalised system of preferences plus—GSP plus—is excellent news, as it will open up duty-free access to much of the EU market? However, is he confident that Pakistan will sign up to the international conventions on labour and on good governance?
Mr Swire
I am grateful to my hon. Friend for his question. Pakistan’s joining the GSP will drive better governance, as it grants vulnerable countries duty-free access to the EU on two thirds of tariff lines if they implement 27 international conventions on human rights, labour standards, sustainable development and good governance. That is good news for Pakistan and for the EU. Pakistan stands to gain an estimated $500 million and 1 million new jobs from this agreement. It is a sign of a deeper and more effective relationship that benefits both our two countries, given that the UK was at the lead on it.
Susan Elan Jones (Clwyd South) (Lab)
23. Many of us are deeply fearful about the chasm between the official Government position in Pakistan on religious freedom for Christians, Hindus and other religious minorities, and the reality on the ground. Has the Minister had any discussions with the Pakistani Government on the vexed and vexatious blasphemy laws?
Mr Swire
As the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Faversham and Mid Kent (Hugh Robertson) just said, we raise issues of religious tolerance, particularly in respect of Christian minorities, wherever we go. Baroness Warsi repeatedly raised the issue of religious freedom and minority protections at the highest level during her visit to Pakistan in October 2013, and she referred to the issue in an open letter on 25 December. It is worth saying that she had a frank and open discussion with the Prime Minister of Pakistan, Nawaz Sharif, in the margins of the United Nations General Assembly in New York in September.
Mr David Nuttall (Bury North) (Con)
The principal area of concern for many of my constituents of Pakistani origin is the problem of the disputed area of Kashmir. Will my right hon. Friend explain to the House what the latest position is on encouraging both Pakistan and India to work together to give the people of that disputed region the right to decide their future for themselves?
Mr Swire
I could with your indulgence, Mr Speaker, as I am coming to that question later on this morning. We are heartened by greater communication between India and Pakistan. The lines of communication are now better, but the problems in that region can be solved only by the two Governments of Pakistan and India and the people of Kashmir themselves.
Joan Walley (Stoke-on-Trent North) (Lab)
May I draw the right hon. Gentleman’s attention to the work in Stoke-on-Trent of the Andrhal Welfare Trust, which is licensed in Pakistan and in the UK? It does vital work to ship out educational material and equipment, and information and communications technology equipment. Shipments are being detained for a lengthy time in Karachi, so, in the interests of education, will he examine how the process can be speeded up?
Mr John Baron (Basildon and Billericay) (Con)
3. What recent progress has been made on securing a comprehensive agreement with Iran on its nuclear programme.
Dr Phillip Lee (Bracknell) (Con)
12. What recent progress has been made on securing a comprehensive agreement with Iran on its nuclear programme.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I welcome the entry into force yesterday of the Geneva joint plan of action. This agreement halts progress in Iran’s nuclear programme in return for proportionate sanctions relief, and will be implemented in parallel with the negotiations on a comprehensive agreement.
Mr Baron
There has been an encouraging start to these negotiations, so will the Foreign Secretary give his assessment of the wider possible implications of success for other challenges in the region, including Syria, Afghanistan and Iraq, and for the prospect of a normalisation of diplomatic relations between the UK and Iran?
Mr Hague
Some encouragement should be taken, as my hon. Friend says, from the start of the negotiations and from yesterday’s agreement to begin implementing the interim deal. I must stress that a huge amount of work remains to be done to arrive at a comprehensive settlement of the nuclear issue. It will be formidably difficult to do so, but it must remain the main priority. It is too early to say whether that will be accompanied by wider changes in the foreign policy of Iran. In the meantime, we are working, step by step, on building up our bilateral relations, including two visits in recent weeks by our new chargé d’affaires.
Dr Lee
I welcome any progress in improving relations with the Iranian Government notwithstanding the overnight debacle surrounding the invitation to them to attend Geneva II. Does the Foreign Secretary agree that constructive Iranian involvement is required to secure a viable regional security settlement? With that in mind, does he think that Britain should adopt a Gorbachev-like approach to our engagement with reform-minded Iranian politicians, including those in power and those of the future?
Mr Hague
As I mentioned a moment ago, it would be extremely welcome if there were other wider and constructive changes in the foreign policy of Iran. I intend to have a telephone discussion later today with the Foreign Minister of Iran, building on our recent contact. The United Kingdom is very much in favour of engagement with Iran, but we also need to see commitment from it. It was open to Iran yesterday to say that in the Geneva II process it would support the implementation of Geneva I, which every other country is in favour of and is seeking in the talks this week, but it was not able publicly to make that commitment.
Mr Jack Straw (Blackburn) (Lab)
May I draw it to the House’s attention that I am co-chairman of the all-party group on Iran and was recently a guest of the Iranian Parliament on a parliamentary delegation?
I commend the work of the Foreign Secretary and welcome the progress that has been made, but will he take account of the fact that many of those in the current Administration in Iran felt, I think quite rightly, badly burned by their experiences of acting in good faith 10 years ago and finding that their best efforts were thwarted, in this case, by forces inside the United States. We must ensure that that does not happen again.
Mr Hague
Absolutely, we must take account of events 10 or 11 years ago and make sure that we give encouragement to those in Iran who are in favour of better relations with the west and with the region. That has been one of the arguments for proceeding quickly with an agreement on an interim deal. Indeed that was one of the reasons for urgency, apart from the advances of the Iranian nuclear programme, in coming to that deal, so I hope that we can now build on that, and we will make every effort to do so.
Jeremy Corbyn (Islington North) (Lab)
Will the Foreign Secretary focus his attention on the issue of nuclear proliferation? In welcoming the interim agreement with Iran, does he not accept that it is now important to press ahead with the possibility of a non-proliferation treaty-led conference for a nuclear weapons-free region as a whole, and to use the current good atmosphere to achieve that outcome?
Mr Hague
Yes, I do accept that. That was an important outcome, promoted by the United Kingdom, of the NPT review conference in 2010. The progress that we are making with Iran is an additional argument in favour of bringing together that conference. There has been some renewed diplomatic momentum behind this over the past couple of months, which we are encouraging. Therefore, I very much hope that, over the course of this year, we will be able to make some serious progress on this.
Sir Menzies Campbell (North East Fife) (LD)
Has my right hon. Friend made any assessment of the impact, in relation to foreign policy opportunities with Iran, of the fact that an invitation was extended by the United Nations and then withdrawn? Can he conceive of any circumstances in which there would be a long-term and effective settlement in Syria that did not have the commitment of Iran behind it?
Mr Hague
It is very important to the future peace of Syria, when ever we are able to bring that about, to have Iranian commitment to it. That is extremely important, which is why we have never opposed on principle Iranian involvement in the Geneva II process. I stressed last week in the House that it would be important for Iran to give some constructive signal that it would approach Geneva II on the same basis as all other nations, which is to implement the Geneva communiqué of June 2012. It is a great shame that it felt unable to do that publicly yesterday, which is why, to save the Geneva II process, the UN Secretary-General rescinded the invitation that he had issued on Sunday.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Does the Foreign Secretary agree that whatever the difficulties with Geneva II and Iran’s participation in it, we should not let them in any way get in the way of the progress that we need to make on the agreement on the nuclear programme? In that respect, will he assure the House, in relation to the question from my right hon. Friend the Member for Blackburn (Mr Straw), that the resistance that previously existed is not still so potent as to prevent, for example, UK designated banks that are authorised to deal with transactions with Iran from doing so?
Mr Hague
As the hon. Gentleman knows, there are certain measures of sanctions relief that we will now implement, which we agreed yesterday among EU Foreign Ministers. That is part of implementing this deal and we will ensure that that relief can be delivered effectively. Of course, it is also important at the same time to ensure that remaining sanctions are rigorously enforced. I will consider the point that he has raised in the light of that.
Sir Richard Ottaway (Croydon South) (Con)
Will the Foreign Secretary confirm that since he signed the joint agreement with Iran, Iran has installed and started IR-1m centrifuges, which have an enhanced enrichment capacity? Although that might be within the letter of the agreement, does he agree that it flies in the face of its spirit and undermines faith in the Iranians’ willingness to restrain their enrichment capacity?
Mr Hague
Discussions about more advanced centrifuges and Iran’s intentions to install them have been one of the issues that had to be resolved in agreeing from yesterday to implement this deal. However, the E3 plus 3 countries are satisfied with the arrangements that have been made, which do not involve Iran bringing such centrifuges into operation.
Andrew Gwynne (Denton and Reddish) (Lab)
What conversations is the Foreign Secretary having with his P5 plus 1 partners to secure International Atomic Energy Agency access to sites such as Parchin, a site that the EU body suspects the Iranians are using to test nuclear weapon technology?
Mr Hague
The hon. Gentleman raises an important issue, as such issues will need to be addressed beyond the interim deal if we are to arrive at a comprehensive deal. There are many aspects to what the IAEA terms the possible military dimensions to Iran’s programme. To reach any comprehensive deal, the international community would have to be satisfied about what is happening in places such as Parchin.
Dr Julian Huppert (Cambridge) (LD)
4. What recent assessment he has made of the human rights situation in Bahrain.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
The most recent assessment of the human rights situation in Bahrain is in the FCO’s update to its annual human rights report, published last September. The report noted the positive steps taken by the Bahraini Government to improve the human rights situation and highlighted areas where more needed to be done.
Dr Huppert
The Select Committee on Foreign Affairs recommended that if Bahrain’s human rights record did not substantially improve by this January, the Foreign Office should designate it as a country of concern. Today, Human Rights Watch launched its world report and stated:
“Bahrain’s human rights record regressed further in key areas in 2013”,
from, I have to say, a fairly low base. Will the Minister accept the recommendation of the Select Committee and designate Bahrain as a country of concern?
Hugh Robertson
Clearly, we follow events in Bahrain very carefully and the Foreign Secretary spoke to the Crown Prince about the situation recently. With the full backing of the King, the Crown Prince has begun a set of meetings to start a political dialogue process. We very much hope that that will see concrete steps taken to improve the situation.
Ann Clwyd (Cynon Valley) (Lab)
What is the Foreign Office doing to object strongly to the stripping of nationality from 31 Bahraini citizens? That is a disgrace. Bahrain always cites the UK as an example of another country that has in the past stripped people of their nationality, so I would be glad if the Foreign Office would refute that.
Hugh Robertson
We have a regular programme of contacts with the Bahrain Government that cover a considerable number of areas across our bilateral relationship. That is an issue that we discuss with them regularly and it will most certainly be part of the Crown Prince’s new political dialogue. I very much hope that some progress will be made.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
5. What recent discussions he has had with his Russian counterpart on LGBT rights in that country.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I discussed the issue with Foreign Minister Lavrov at the UN General Assembly in September. The Secretary of State for Culture, Media and Sport raised concerns about lesbian, gay, bisexual and transgender rights with Deputy Prime Minister Golodets in December and the Prime Minister made clear the strength of feeling about the new law to President Putin in September.
Tom Blenkinsop
Will the Foreign Secretary commend and applaud the message of equality and diversity implicit in President Obama’s decision to include two gay athletes in the USA’s official delegation to the winter Olympics in Sochi?
Kerry McCarthy (Bristol East) (Lab)
I welcome the Foreign Secretary’s words and the confirmation that the Government will continue to raise this at the highest level, but what will such conversations achieve? It is clear that despite the expressions of international concern, not just Russia but several Commonwealth countries too, are moving in the wrong direction on LGBT rights. Now that Russia and the UK are both back on the Human Rights Council, does he perhaps see that as a way of making sure that it is not just about words, but about action too?
Mr Hague
We must all hope so. We cannot control the decisions in other countries but we can make the arguments and make our point very clear, as I did in a speech at the Perth Commonwealth Heads of Government meeting in 2011. We have raised these issues with the Nigerian Government and we fund actual projects as well. It is not just words from the United Kingdom. We have provided funding in Russia for the Side by Side film festival, we have funded a project to increase the capacity of LGBT civil society organisations in Russia, and FCO officials in Russia meet LGBT activists regularly. We do give meaningful support, as well as the words of all of us in this House.
Christopher Pincher (Tamworth) (Con)
6. What recent discussions he has had with his EU counterparts on reforming the principle of free movement within the EU.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
I discussed free movement with my Hungarian and Bulgarian counterparts last week. My right hon. Friend the Minister for Europe raised free movement at the December General Affairs Council and the Prime Minister was clear at the December European Council that free movement cannot remain completely unqualified.
Christopher Pincher
When my right hon. Friend discusses these issues with his counterparts in Europe, will he remind them that because British immigration was previously out of control, if there is to be confidence here in the single market, and if we are to welcome talented and skilled migrants to work in our country, a broken system that allows mass population movements from the south to the north of Europe—because migrants think that if they cannot get jobs, they can certainly get generous benefits—must be fixed?
Mr Hague
Certainly I make the point to colleagues across the European Union that the long-term sustainability of the free movement of workers requires the sort of reforms that my colleagues in the Government have announced in recent weeks, particularly on rules that govern our social welfare system. Other member states share our concerns on abuse of free movement, particularly Germany, Austria and the Netherlands, so we will continue to make these points.
Keith Vaz (Leicester East) (Lab)
Following the Prime Minister’s statement after the European Council meeting, there was a suggestion that there should be a cap. Does the Foreign Secretary have a figure as to what that cap should be?
Mr Hague
No, we have not set out a particular figure, because that is for discussion with member states in the future. There needs to be a discussion about how we handle these things. In the long-term future, as the right hon. Gentleman knows, across the House we are strongly in favour of the enlargement of the European Union, but the next member state to join the EU is quite some years away in all probability. These are things that need to be discussed in the context of the whole future of the EU.
Dr Sarah Wollaston (Totnes) (Con)
7. What recent progress has been made on negotiations on reform of the common fisheries policy.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The UK has recently secured important reforms to the common fisheries policy. We have banned the wasteful practice of discarding edible fish, decentralised key decisions on managing fisheries from Brussels to groups of national Governments, and introduced legally binding measures to end overfishing. This is tangible progress towards a more competitive and flexible EU.
Dr Wollaston
It is right that we move to end the scandal of discarding healthy fish. It shows how renegotiation within the EU is possible. Will the Foreign Secretary join me in paying tribute to the leadership of my hon. Friend the Member for Newbury (Richard Benyon) in his success in those renegotiations, and perhaps even set out for the House what further negotiations a Conservative Government plan?
Mr Hague
My hon. Friend is right to pay tribute to our hon. Friend the Member for Newbury (Richard Benyon). This is an important negotiating success. It shows that decision making can be decentralised away from Brussels, producing at the same time a more sustainable and successful policy overall. That decentralisation and the greater accountability to national Parliaments are important aspects of the changes we want to see in the European Union, as the Prime Minister set out in his speech a year ago.
Mr Ben Bradshaw (Exeter) (Lab)
The right hon. Gentleman will have noticed that fish swim around and are no respecters of national boundaries, which means that any effective policy to conserve stocks has to be agreed with our neighbours, so why do some in his party still seem to hanker after a return to a chaotic series of multilateral and bilateral agreements, which would be devastating for our marine environment, rather than the sensible reforms that he and our Government before him achieved?
Mr Hague
The observation that fish swim around is not among the most devastating revelations to be heard in the House of Commons recently, but we know the point that the right hon. Gentleman is making. The point I would make in return is that the common fisheries policy has been one of the European Union’s greatest catastrophes, and we are much more likely to encourage good conservation and a prosperous future for fisheries across the European Union if this is done on a more decentralised basis. It is not about not co-operating with our neighbours; it is about co-operating with them on a meaningful scale and at a regional level so that sensible decisions can be taken, unlike the absolutely disastrous policy that preceded it.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Is the Foreign Secretary, like me, a fan of “The Bridge”, the Danish/Swedish drama currently on BBC Four on Saturday evening? The Danish/Swedish model lies at the heart of the common fisheries policy reforms. If that is the new way forward for decentralisation, which other models might he alight on in that regard?
Mr Hague
Well, so many Danish/Swedish models on a Saturday evening must be very enjoyable, but I cannot say that I have been watching that programme. Of course, the decentralised model of decision making is the one that will work, rather than a one-size-fits-all approach for 28 countries. Such an approach is not right for fisheries, or for so many other areas. Again, that is the point of seeking real reform in the European Union.
Angus Robertson (Moray) (SNP)
The Foreign Secretary is right to describe the common fisheries policy as a disaster, but in fairness he should probably acknowledge that it was a Conservative Government who signed us up to it in the first place. He is also aware that Cabinet documents have shown that the Scottish fishing fleet in a European context has been described as “expendable”. Is it the UK Government’s current position that they prefer land-locked European Union member states such as Slovakia having a more direct say over the Scottish fishing industry than the Scottish Government?
Mr Hague
No, the Government have stood up for fisheries in Scotland, and we have done so very energetically in recent decisions. Indeed, it is intended that a great deal of the benefit of the changes in the common fisheries policy will be felt by Scotland. The United Kingdom can always be counted on to do that, and I think that we will do so more successfully than would a separate Scotland, which would in any case be outside the European Union.
Duncan Hames (Chippenham) (LD)
8. What recent discussions he has had with representatives of the Governments of the Crown dependencies and overseas territories on establishing registers of company beneficial ownership.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
The Government are in ongoing dialogue with the Crown dependencies and overseas territories on the establishment of central registries of company beneficial ownership. I discussed the issue with territory leaders at the joint ministerial council last November, as did the Treasury Minister. We agreed to continue to work in partnership to tackle the global challenges of corporate secrecy.
Duncan Hames
Supporters of Christian Aid from St Andrew’s church in Chippenham who met me before Christmas will welcome the Government’s decision to publish a register of company beneficial ownership and the leadership they have shown on the matter, but given that so much money is leaving developing countries for our overseas territories, it is very important that similar transparency is shown there. If the consultations that are currently being launched by the Cayman Islands and the British Virgin Islands provide a further opportunity for the Government to present evidence to encourage them to publish a register, will he please take that opportunity in the hope that that might happen?
Mr Speaker
I am sure that the hon. Gentleman will get back to his normal form, having recovered from his splendid paternity leave.
Mark Simmonds
The first thing that needs to be said is that the overseas territories and Crown dependencies have responded extremely positively and have taken steps in response to the Prime Minister’s G8 agenda of tax, trade and transparency by signing up to multilateral conventions on tax matters and signing agreements automatically to exchange tax information—a significant step change in tax transparency—as well as setting out action plans and consultations as regards setting up registers of beneficial ownership and making them accessible to the public.
Gavin Shuker (Luton South) (Lab/Co-op)
9. What recent reports he has received on human rights violations in the Jammu and Kashmir region.
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
We are aware of allegations of human rights abuses on both sides of the line of control. We are clear that allegations of human rights abuses require proper investigation, and we regularly raise concerns through our missions in Islamabad and Delhi, as appropriate.
Gavin Shuker
The number of civilian deaths attributed to the Indian forces is now greater than the number attributed to terrorist attacks in the region. Will the Minister assure me that these issues are being raised not only in our official discussions but at ministerial level, given the number of delegations and trips to India in recent years?
Mr Swire
Indeed. The hon. Gentleman will know that in the past few years India and Pakistan have made progress on trade, with both countries agreeing to double bilateral trade by 2014. India has lifted a ban on direct investment from Pakistan, and both sides have implemented a new visa regime. Ultimately, we want to encourage progress between India and Pakistan. Our position, as is well known, is to allow both sides to decide the pace of dialogue, as any direct involvement or international intervention would not be welcomed—by India, certainly.
Fiona Mactaggart (Slough) (Lab)
Is the Minister aware of the petition signed by thousands of my constituents —and, I believe, people in other constituencies —asking for a debate about human rights in Jammu and Kashmir, and can he assist by giving us such a debate in Government time?
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
10. What recent discussions he has had with his Afghan counterpart on security arrangements after 2014; and if he will make a statement.
The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)
My right hon. Friend the Foreign Secretary discussed this issue with Foreign Minister Osmani at the NATO Foreign Ministers meeting in December. The UK’s long-term commitment to Afghanistan is made clear in the enduring strategic partnership document signed by the Prime Minister and President Karzai in January 2012 and reviewed annually by a ministerial joint commission.
Mr Brown
I am sure that the Minister is aware of the campaign being run by Amnesty International aimed at strengthening and protecting the rights of women in the security arrangements and more broadly in civic society. What can he say to the House that will reassure those campaigners?
Hugh Robertson
The UK has made it absolutely clear to the Afghan Government that the historic gains since 2001, including on women’s rights, must not be lost. These commitments are enshrined in the Tokyo mutual accountability framework, and we will be doing everything possible to ensure that the Afghan Government meet them.
Rehman Chishti (Gillingham and Rainham) (Con)
Does the Minister agree that the security situation in Afghanistan post-2014 is linked to working with Pakistan to stop the terrorism that is going from one country to the other across the large border between the two countries?
Hugh Robertson
Absolutely. Anybody who has come back from Afghanistan recently, particularly from the military side, will point to the real improvements made by the Afghan security forces. It would be a great shame if that were lost in the political discussions that take place above that.
Mr John Spellar (Warley) (Lab)
May I join my right hon. Friend for Newcastle upon Tyne East (Mr Brown) and old boss in paying tribute to the work of Amnesty International in Afghanistan and thank the Minister for his reply? On 23 April last year, I asked the Foreign Secretary what steps he was taking to ensure the protection of British forces and civilians in Afghanistan. In the light of the shocking events in Kabul in the past few days, can he provide reassurance to them and their families as to what is being done to provide protection now and after the military draw-down?
Hugh Robertson
After the military draw-down, of course, the hope is that a NATO-led mission will replace the international security assistance force. Britain’s part in that will be to provide mentors and trainers. We keep the security situation in Kabul and elsewhere under close review on a daily, if not hourly, basis, and we amend the advice accordingly.
Toby Perkins (Chesterfield) (Lab)
11. What preparations his Department has made ahead of the Geneva II summit on Syria.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
The objective of Geneva II is to establish by mutual consent a transitional governing body in Syria with full executive powers. The regime, opposition and invited states should attend on that basis, and all sides need to improve the dire humanitarian situation, including through prisoner releases and improving access.
Toby Perkins
I thank the Foreign Secretary for that answer. Did the United Nations Secretary-General consult him before Iran’s invitation to Geneva II was issued, and if so, what was his response to that consultation?
Mr Hague
There have been many consultations at the UN Security Council, such as between the Secretary-General and the permanent representatives, including the UK’s permanent representative. Our advice has always been what I said in the House last week—that we were not opposed in principle to Iran attending, but that we wanted a clearer and more constructive public commitment by Iran to the objectives of the Geneva II conference, which I have just set out. In the light of Iranian unwillingness to make such a commitment yesterday, the Secretary-General was right to rescind the invitation.
Robert Halfon (Harlow) (Con)
As the Soviet Union of the middle east, Iran continues to prop up the Assad regime. What steps is my right hon. Friend taking to try to stop Iranian influence in Syria?
Mr Hague
Of course, we want Iran to desist from supporting the brutality of the Assad regime, which has been highlighted again overnight by shocking evidence of the torture, abuse and murder of people in detention at the regime’s hands. We will always try persuasion, but in the end it is in Iran’s interests for there to be peace in Syria. We therefore ask Iran to embrace that opportunity.
Mr Peter Hain (Neath) (Lab)
Will the Foreign Secretary correct me if I am wrong about the tortuous diplomacy over Geneva II? Iran’s participation is clearly essential to getting an agreement to end the catastrophic war. Iran knows that a transitional Government is the only way of doing that. On the other hand, it does not want to be seen to be abandoning its long-term ally, the barbarous regime in Syria. As we know from Northern Ireland, preconditions often kill the prospect of any negotiated solution. How will we resolve that impasse?
Mr Hague
The right hon. Gentleman is absolutely right about it being a tortuous process, including over the past few days, but it should be possible for Iran to say what others, including Russia, are able to come to Geneva II and say—that our aim is to implement the objective of the Geneva I communiqué: a transitional governing body by mutual consent. It was not a precondition, but it was fair to expect Iran to come to the conference on the same basis as all other foreign states. The practical reality is that if it was not prepared to say that, it would have led to the collapse of the conference. It was clear that if it did not do that, we would not be going to Geneva II tomorrow.
Mr Philip Hollobone (Kettering) (Con)
With the spotlight falling on Russia ahead of the winter Olympic games, will the Foreign Secretary press the Russians to increase their contribution to humanitarian aid, the need for which is in large part caused by their support for the Assad regime?
Mr Hague
Yes, we do raise that with Russia, and we particularly raise the issue of humanitarian access. We and other countries are providing generously for humanitarian relief in and around Syria, but the regime continues to deny access to more than 200,000 people in besieged areas. We continue to look to Russia to help to lift the regime’s sieges of those areas.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
This morning’s reports in The Guardian of the systematic killing and torture by Syrian Government forces of 11,000 detainees are deeply disturbing. The important work done to collect and publish that material was essentially a privately funded initiative run by a London-based law firm. In the light of that, will the Foreign Secretary set out what steps the international community, and the UK Government in particular, are taking to help catalogue and document evidence about alleged gross violations of human rights?
Mr Hague
We have a done a great deal, and the right hon. Gentleman is right to highlight the evidence that was published last night. That was done with the assistance of the Qatari Government, so it was not entirely a private initiative. I have seen a lot of the evidence. It is compelling and horrific, and it is important that those who have perpetrated those crimes are one day held to account. The United Kingdom has done a great deal in the documentation of human rights abuses, and part of the support we have given to moderate political forces in Syria is to train human rights activists in the recording and documentation of crimes, many of which have therefore come to the world’s attention. We will do more of that.
Mr Alexander
We all welcome the fact that the Geneva II conference is due to commence in Switzerland tomorrow. Will the Foreign Secretary today set out what he would regard to be realistic ambitions for the discussions this week? Does he agree that confidence-building measures could be an important step towards securing further progress, and if so, does he believe in the relative likelihood of local ceasefires, humanitarian access, or prisoner exchanges being agreed in the coming days?
Mr Hague
Confidence-building measures would assist enormously, including prisoner releases and local ceasefires. Although there have been discussions about those issues over the past 10 days, they have not yet borne fruit, and it is important that real effort is made on that in the opening stages of the Geneva II talks. I will attend the opening of those talks tomorrow and speak on behalf of our country, and I will encourage progress from all sides on the creation of a transitional governing body. Realistically, we are starting a process; it is important that a political process is started and then pursued.
Mr Andrew Turner (Isle of Wight) (Con)
13. If he will make an assessment of the effect of a codified constitution on member states’ ability to regulate within the European Union.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
European Union member states have widely differing constitutional structures. In Germany, for instance, the constitutional court has highlighted instances of where the Bundestag’s rights are close to being infringed. In the UK, European Union law takes effect only by virtue of the will of Parliament.
Mr Turner
We are fortunate in that our constitution is unwritten, or rather written on a number of documents. Why does the existence under EU law of a written constitution protect the rights of Germans, while our unwritten constitution does not give the UK equivalent protection?
Mr Hague
My hon. Friend is right about the importance of the German constitutional court and its written constitution, and it has sometimes warned of the limits of the EU’s role. It has insisted that questions should be referred to the German Parliament, but it has never directly overridden EU law, and we must bear that in mind about its constitutional structure. As my hon. Friend knows, and as he supported in the European Union Act 2011, we have made clear the ultimate sovereignty of Parliament in this country. That is the constitutional position, but we made it clearer in our 2011 Act.
Mr Frank Roy (Motherwell and Wishaw) (Lab)
What assessment has the Secretary of State made as to whether an independent Scotland would be able to regulate within the EU without having to negotiate to join in the first place?
Mr Hague
A Scotland that left the United Kingdom would have to negotiate afresh its membership of the European Union. It would have to do so without some of the favourable settlements that we have achieved in the past with the European Union, such as the rebate. Not only would Scotland no longer be entitled to the rebate, but it would have to contribute to the rebate of the rest of the United Kingdom.
Ian Lavery (Wansbeck) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
Yesterday I attended the Foreign Affairs Council of the European Union in Brussels, and later today I will travel to Switzerland to take part in the Geneva II talks.
Ian Lavery
On 4 January, Francisco Toloza, another leading member of the Patriotic March political movement in Colombia, was arrested and charged with the usual accusation of rebellion. Given that 25 of that group’s leading members were murdered last year alone, do the Government still insist that Colombia is a democratic country that allows opposition political participation?
The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)
The answer is yes, we do. Human rights continue to be an important part of our relationship with Colombia. They were discussed with President Santos during his visit to the UK from 6 June last year. We have never hidden our concerns about human rights in that country. Equally, we are supportive of the mass improvement in the general well-being of Colombians under the president and his negotiations with the FARC guerrillas. My right hon. Friend the Foreign Secretary will have an opportunity to raise those matters when he visits Colombia shortly.
Jason McCartney (Colne Valley) (Con)
T4. Holocaust memorial day takes place next Monday. Will the Secretary of State join me in commending the role that British veterans played in defeating the Nazis in the second world war, and in liberating the Bergen-Belsen concentration camp almost 70 years ago?
Mr Hague
Yes, absolutely—my hon. Friend is right to highlight the vital role of British forces. Later this year, we will have the 70th anniversary of D-day, when it will be important to remember that it made possible the liberation of Europe and the role of British forces in doing exactly what he has described.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
Given the publication by the Foreign Office of its Scotland analysis paper last week, what is the Foreign Secretary’s assessment of the impact on Scotland’s exports and influence of reducing a diplomatic network of 14,000 people spread across 267 locations and 152 countries to just 70 to 90 diplomatic offices?
Mr Hague
It is clear that Scottish independence would involve a huge reduction in its diplomatic presence and influence around the world. We make a great impact as the United Kingdom on so many issues all over the globe. It would not be possible to do that with between 70 and 90 offices in place of our current 267 embassies and consulates. It would also not be possible to replicate the huge effort that the UK Government and UK Trade & Investment put in to promoting Scottish exports and trade around the world. For instance, I am very proud of everything I have done to promote the interests of scotch whisky all over the world.
Dr Julian Huppert (Cambridge) (LD)
T6. The Foreign Secretary has often highlighted the fact that a warrant is needed for GCHQ to search content. We now know that the dishfire scheme acknowledged by the National Security Agency allows people in GCHQ to search the content of people’s text messages. To avoid reading the content, analysts are warned to flick a toggle on the form. Can the Foreign Secretary confirm that it would be unlawful to read content without a warrant? How can he be sure that all analysts always tick the right box on the form?
Mr Hague
My hon. Friend knows that I cannot go into intelligence matters in Parliament beyond the statement I gave on 10 June last year. Therefore, I do not confirm or deny reports that appear in newspapers that may or may not be true. However, I can always confirm that the legal structure in this country is very strong and robust. As I have said before, the interception of the content of communications in the UK requires a warrant from me or the Home Secretary. The interception of communications commissioner then reports to the Prime Minister on how we and our officials do our jobs.
Jim McGovern (Dundee West) (Lab)
T2. Back in 2006, I was delighted to be able to smooth out some red tape to allow Father Jean-Pierre Ndulani from the Congo to come to my constituency to work as a priest in the Wellburn care home run by the Little Sisters of the Poor. He returned to the Congo in 2012. Not long after his return, he was kidnapped along with two colleagues. I have written to the Foreign Secretary’s office and am grateful for the response, but may I urge him to use all the powers within his good offices to find out the whereabouts, and more importantly the well-being, of Father Jean-Pierre? Many of my constituents still ask me about him.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)
I am grateful to the hon. Gentleman for raising that case. He mentioned his correspondence with the Foreign Office. I will visit the Democratic Republic of the Congo shortly, when I will ensure that I raise that specific case with the Congolese authorities.
John Pugh (Southport) (LD)
Somalia banned the celebration of Christmas, but we give it £130 million in aid. Is it not time to play hardball with that country?
Mark Simmonds
The hon. Gentleman will be well aware that there is a very small religious minority in Somalia. For some considerable time, we have worked with the new federal Government of Somalia to improve human rights for everybody in Somalia, irrespective of their religious persuasion. We have worked to encourage a human rights commission, to finalise a human rights road map and to support the United Nations assistance mission in Somalia—UNSOM—in taking a strong lead on building and monitoring human rights there.
Naomi Long (Belfast East) (Alliance)
T3. Pakistan’s federal sharia court has ordered the Government in Islamabad to implement only the death penalty in cases of blasphemy, and the 60-day time limit for the Government to appeal against that is almost up. Given that blasphemy laws are already being abused to settle personal scores, does the Foreign Secretary agree that this could lead to more abuse and a climate of intolerance against religious minorities in Pakistan?
Mr Hague
Yes, I have raised these issues, and the whole issue of the death penalty in Pakistan, with Prime Minister Nawaz Sharif and his national security adviser. I have made very clear the United Kingdom’s longstanding view on the death penalty and I hope that there will continue to be, one way or another, a moratorium on the death penalty in such cases.
George Freeman (Mid Norfolk) (Con)
Following the Prime Minister’s Bloomberg speech on EU reform last year, last week the Chancellor welcomed more than 300 parliamentarians and leaders across Europe to the Fresh Start conference to debate a series of reforms on trade, free movement and deregulation. Is it not the case that Conservative Ministers and Members are leading the EU reform and renegotiation debate, on which our opponents and coalition partners are strangely silent?
Mr Hague
I could not possibly disagree with that observation. I congratulate Fresh Start and Open Europe on holding the conference last week, which my right hon. Friend the Chancellor addressed. It was interesting that people were there from many other EU countries who want to have the discussion on how the EU becomes more flexible and more competitive, with greater accountability to national Parliaments. That is the debate we are leading.
Mark Durkan (Foyle) (SDLP)
T5. Further to the case raised by the hon. Member for Wansbeck (Ian Lavery) on Colombia, will the Minister address the case of Huber Ballesteros, who will face trial in a number of weeks, also on a contrived charge of rebellion? Will he address these human rights issues in a way that does not just send a signal to the Santos regime that they somehow fall within a margin of tolerable excess in the context of a peace process?
Mr Swire
That is not the case. We are, of course, aware of the detention of Mr Ballesteros on 25 August. Our ambassador to Colombia wrote to the Colombian prosecutor general on 28 August to highlight our interest in the case and to request information on the charges. Staff at our embassy in Bogota are seeking permission to visit Mr Ballesteros in prison. It is simply not the case that we turn to one side and avert our gaze to what we regard as human rights violations in Colombia.
Paul Uppal (Wolverhampton South West) (Con)
My right hon. Friend will be alarmed, as I was, at the release of documents last week on the attack at the Golden Temple in 1984. The Prime Minister made a swift response in terms of the Cabinet Secretary. Will my right hon. Friend update the House on the timeline for the inquiry and for a possible statement to this House?
Mr Hague
I know that my hon. Friend is very assiduous in pursuing this matter. As the Prime Minister said last week, these events led to a tragic loss of life. We understand the legitimate concerns that the papers that have been published will raise. As he said, the Prime Minister asked the Cabinet Secretary to look into this case urgently and to establish the facts. That review by the Cabinet Secretary will soon reach its conclusion, and its conclusions and findings will be published in the near future.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
T7. Despite its vast mineral wealth, for too many years the Democratic Republic of the Congo has been held back by corruption, poor infrastructure and conflict. In the east of the country, more than 800,000 people have been forced to flee their homes by the M23 rebel militia group. I note that the Minister said that he does have a visit due, but given the huge economic potential of central Africa what concrete actions are the Government considering to support peace and economic development in the DRC?
Mark Simmonds
The hon. Lady raises a very important issue. Significant discussions have been taking place and will continue to take place. We support the Democratic Republic of the Congo through our significant bilateral aid programme, as well as by supporting multilateral institutions. The progress made by the UN mission and the Secretary-General’s special representative to negate the influence of the M23, which has now completely surrendered, and to tackle other armed militia groups in the eastern part of the DRC, is a key cornerstone to creating stability and security, which will then lead to developmental assistance.
Mr Simon Burns (Chelmsford) (Con)
Further to the shadow Foreign Secretary’s question, may I ask my right hon. Friend, on the wider issue of foreign policy, what assessment he has carried out on the impact on Scotland of our foreign policy and all the work done by our embassies and high commissions day in, day out, including UKTI, on behalf of this country and its citizens?
Mr Hague
My right hon. Friend is right to refer to this point, because in addition to what I mentioned in response to the shadow Foreign Secretary, this country has a huge consular network—one of the biggest of any country in the world. We look after British nationals wherever they are overseas, and there is no way that a Scotland separate from the UK could compete with that network. An ambassador of a new country arriving in, say, Washington DC would be the 179th ambassador arriving in town, which could not compete with the influence of the UK in Washington.
Gavin Shuker (Luton South) (Lab/Co-op)
T8. A number of individuals and charities in my constituency have contacted me about the difficulties they have encountered in funding legitimate humanitarian action in the disputed region of Kashmir. Will the Secretary of State allow a Minister to meet me briefly to discuss these concerns?
Sir Greg Knight (East Yorkshire) (Con)
Will the Foreign Secretary update the House on what is happening to his constituent, my constituent and others arrested from a vessel off Tamil Nadu? Can anything more be done to expedite their release? Given that they were only obeying orders, should it not be the captain who faces the charges, and should these men not be freed?
Mr Hague
My right hon. Friend makes his point extremely well. As he knows, I am familiar with this case, because one of my constituents is involved. The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), will be meeting him and other Members about the matter this afternoon. I have raised it with the Indian Foreign Minister, and the Prime Minister has raised it with the Prime Minister of India. It has also been raised with the Ministry of External Affairs in Delhi this month, and will be raised now with the Chief Minister of Tamil Nadu.
Mr Dave Watts (St Helens North) (Lab)
T9. If we are to end the bloodbath in Syria, will it not have to involve Iran, and should we not get on and start the peace process now? If the Foreign Secretary does not agree, will he set out how he will achieve this without the help of Iran?
Mr Hague
As we discussed earlier, we will start the Geneva II process tomorrow. We were not opposed in principle to Iran’s involvement, but we all have to face up to the fact that if the invitation to Iran yesterday had been proceeded with, without the necessary statement from Iran, the whole conference would have collapsed, and there would be no Geneva II process at all. Diplomacy involves some difficult compromises and tortuous moments, as the right hon. Member for Neath (Mr Hain) said, and this has been one of them, but it is vital that we get this process going.
Mr Speaker
Extreme brevity is now required, as will be exemplified, I know, by the hon. Member for Maldon (Mr Whittingdale).
Mr John Whittingdale (Maldon) (Con)
Does my right hon. Friend agree that the latest laws passed in Ukraine severely restricting democratic protest represent a further step backwards and are fuel for the shocking violence seen overnight? Will he send a clear message to the Ukrainian Government that we will take measures against those responsible and a message to the Russian Government that this is for the Ukrainian people to resolve?
Andrew Miller (Ellesmere Port and Neston) (Lab)
May I draw the Foreign Secretary’s attention to my point of order yesterday about the Government’s failure to brief me about the destruction of chemical weapons in my constituency? Will he undertake, first, to answer, as a matter of urgency, my five named day questions, and secondly to ensure the high-level ministerial briefing for me that was promised to the company—not to me—and thirdly will he put on the record his apology to my constituents for his failure?
Mr Speaker
I hope that the hon. Gentleman’s appetite can be satisfied, at any rate for today. We shall see.
Mr Hague
Broadly, yes. I am sorry that the hon. Gentleman has not had a briefing on this. I shall ensure he gets one from the relevant Ministers. Of course, this was the destruction not of chemical weapons—let me reassure him about that—but of precursor chemicals that are no different in form when they come to the UK from other industrial chemicals that are regularly destroyed here. He is entitled to a detailed briefing, however, and I shall ensure that he gets one.
Richard Benyon (Newbury) (Con)
Can my right hon. Friend bring us up to date on what the Government are seeking to achieve from the very welcome conference on international wildlife crime taking place in London next month?
Mark Simmonds
I am grateful to my hon. Friend, who has a particular passion and knowledge in this important area. The purpose of the summit is to draw together the work being done in a range of states, supported by the UK, the USA and interested African states such as Gabon. The purpose is not just to talk about what can be achieved; we want real results on security, the environment and the economy, reducing demand as well as cutting off the supply.
Valerie Vaz (Walsall South) (Lab)
May I ask the Minister on his next visit to Burma to raise the letter that Mr Speaker has written to Minister Soe Thein with a list of political prisoners and to ask for their unconditional release?
Mr Speaker
I genuinely apologise to colleagues whom I was not able to call, but we did proceed relatively slowly today, which did not greatly assist matters. However, this is a box-office occasion and I shall try to bear in mind those who were not able to contribute today for subsequent occasions.
Petition
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Nic Dakin (Scunthorpe) (Lab)
I would like to present a petition against increases in Scunthorpe hospital car parking charges and to commend the work of local councillors Haque Kataria and Mashook Ali for the leadership they have shown in working with the local community to raise this petition.
The petition states:
The Petition of residents of Scunthorpe,
Declares that the Petitioners are very concerned that car parking prices at Scunthorpe General Hospital have been increased from September 2013.
The Petitioners therefore request that the House of Commons urges the hospital to think of local constituents who are affected by this price increase and reconsider their decision.
And the Petitioners remain, etc.
[P001315]
Adventure and Gap Year Activity Companies (Accreditation and Inspection)
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Kate Green (Stretford and Urmston) (Lab)
I beg to move,
That leave be given to bring in a Bill to make provision for a register of accredited providers of adventure and gap year activities in the UK and overseas, where such activities are offered by a UK-owned or managed business; for the provision of consumer information about the registration process; for inspections of providers of such activities and for a register of approved inspectors; and for connected purposes.
In August 2006, Luke Molnar, the 17-year-old son of my constituents Gill and Steve Molnar, died on the island of Tokoriki. Luke was a paying volunteer on a diving expedition arranged by a UK-based company, Coral Cay Conservation Ltd. On the day of his death, he went to assist a friend who had received an electric shock when he touched a washing line. When Luke touched the line, he received a massive electric shock, which killed him. It transpired that a local electrician had wired the washing line to the electricity supply in order to run power to a number of huts that were being used as accommodation for the volunteers.
A coroner’s inquest held in Manchester in 2011 returned a verdict of unlawful killing and the electrician was convicted of manslaughter by a court in Fiji, but no proceedings have been taken against Coral Cay or its then directors. The company has since been taken over and is under new ownership. Luke was a fine diver and he was well aware of the risks involved in such an activity. He and his parents undertook very careful research into the expedition and the facilities that would be available before he embarked on the trip, but the coroner’s inquest exposed a total lack of care for health and safety by the then management of Coral Cay. Claims on the company’s website of high standards and qualified personnel on site—claims that were relied on by the Molnars—turned out to be entirely false.
Luke’s death is not the only instance in recent years of young people, often minors, being placed at lethal risk on overseas adventure activities. The inquest into the death of 17-year-old Samuel Boon, who died on a trekking holiday in Morocco, concluded just last week. In a number of cases, including Luke’s, coroners have highlighted a series of concerns, including a lack of regulation and suitably qualified expedition leaders with good local knowledge. Parents and families place great trust in the UK-owned companies that provide and manage such expeditions, yet they are being denied genuine assurance that proper quality standards are being met.
Of course, in the case of UK activities, a much more stringent regulatory environment has existed for a number of years, following the establishment of the Adventure Activities Licensing Authority as a result of the Lyme bay tragedy, in which four teenagers died. However, the future of the AALA is now worryingly uncertain, and although other excellent quality standards exist, including the Learning Outside the Classroom badge and British standard 8848, today parents face a bewildering landscape of standards, accreditation processes and inspection regimes, on which they are desperately reliant to ensure that their children are safe.
To its credit, the industry has been anxious to address these concerns, and I want to place on record my thanks to the many groups and individuals who have spent time talking to me about the different regimes that exist and explaining their different features and benefits. I would particularly like to thank members of the British Standards Institution committee SVS/2/5 on adventurous activities, expeditions, visits and fieldwork, which has been conducting a review of British standard 8848; Beth Gardner of the Council for Learning Outside the Classroom; and Alistair Cole of the Expedition Providers Association, who is also chief executive of the Lifesigns group, the new owners of Coral Cay. All those bodies are acutely aware of the vital need for public reassurance and confidence that the activities they are offer are safe.
I welcome the work done to establish high-quality standards, but the fact is that it remains entirely possible for a completely unqualified, inexperienced provider to offer overseas adventure activities without having to comply with any safety standards at all. No parent could possibly be willing to allow their child to participate in activities that have not met the most rigorous safety standards. Every parent would want to assure themselves that adequate safety procedures existed and that proper checks and controls were routinely carried out. Parents would be especially reassured where a provider had been accredited to an independent standard. They would want to know what the standard encompassed and whether an organisation that claimed to meet it had been independently assessed.
How would parents know that today? Given the range of accreditation processes and standards, it would be difficult and chancy, even for the most clued-up and careful parents, as the experience of the Molnars shows. That is why I have been discussing with industry leaders the idea of providing a register of accredited providers, which would clearly set out what standard a provider had complied with, whether it had been independently accredited as meeting that standard or whether it had self-assessed. My motion proposes a Bill to introduce the establishment of such a register.
There are those who will say that conformity assessment schemes can restrict innovation and competition, and that the very essence of the activities I am talking about is that they contain a degree of risk, which is, of course, indeed the case. But no parent would consider a single avoidable risk a price worth paying, and I am pleased that many of those I have spoken to in the industry now recognise the value of a register of accredited providers to reassure parents that avoidable risks have been properly addressed. To be clear, this modest proposal is not for mandatory accreditation, but for a publicly available record of who is or is not accredited. The transparency of such a register would create an impetus and expectation that good providers would be accredited and bad providers driven out of business.
Such a register would not, of course, eliminate every risk, but it would be an important step that could help to prevent another family from experiencing the horror faced by the Molnars in 2006. Gill and Steve have been brave, passionate and committed campaigners, and they are here closely watching this debate. They strongly support the creation of such a register, so that some small good might come from Luke’s tragic death. I commend the motion to the House.
Question put and agreed to.
Ordered,
That Kate Green, Sir Peter Tapsell, Alison Seabeck, Dan Jarvis, Bob Stewart, Mr Michael McCann and Chris Bryant present the Bill.
Kate Green accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 28 February, and to be printed (Bill 157).
Opposition Day
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Pub Companies
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:57 - The House divided: - Ayes: 244 / Noes: 311 - Question accordingly negatived.
16:13 - The House divided: - Ayes: 311 / Noes: 246 - Question accordingly agreed to.
Mr Speaker
I must inform the House that I have selected the amendment In the name of the Prime Minister.
Toby Perkins (Chesterfield) (Lab)
I beg to move,
That this House notes that two years have passed since its resolution on pub companies of 12 January 2012; remains of the view that the Business, Innovation and Skills Committee was right to state in its Fourth Report, on Consultation on a Statutory Code for Pub Companies, HC 314, that only a statutory code of practice which included a mandatory rent-only option for pub companies which own over 500 pubs, an open market rent review and an independent adjudicator would resolve the contractual problems between the big pub companies and their lessees; further notes that pub closures are increasing, and believes that the Government should by July 2014 bring forward legislative proposals to introduce a statutory code of practice of the kind recommended by the Business, Innovation and Skills Committee.
For many Members, January in Parliament means two things. First—for some— it means the worthy, if somewhat joyless, challenge of a dry month, and secondly, it means a parliamentary debate about pubs.
This is the third January in a row during which the House has debated the regulation of pub companies. We know that pubs in our local communities are among our constituencies’ most precious assets, and a quick trawl through the press releases expressing MPs’ dismay at the fact that much-loved pubs in their area face closure will reveal immediately what an emotive issue this is, and how passionate our constituents feel about it.
I know that Members on both sides of the House will agree that, economically, socially and culturally, pubs are part of the fabric of our great nation. As well as being community hubs, they make a huge contribution to our fragile economy. Each pub employs an average of 10 people—often young people; often women, including working mums—who are finding it particularly hard to obtain other work. When a pub closes, its local economy loses about £80,000. More widely, the production and sale of beer contributes about £19 billion to the United Kingdom’s GDP, and generates total taxation revenues of £10 billion each year.
Given that a wide body of experts and more than 27,000 other people signed the 38 Degrees petition on pubco reform in just four days, today is one of those—some would argue—all too rare occasions in an MP’s life when he can vote for something that is both popular and right. In the last decade, our expectations of our locals have changed, and consumers now rank food higher than beer or sociability among their reasons for choosing a pub. As I know there is so much common ground between many Members across the House, I shall argue the case for reform in as unpartisan a way as I am capable of. [Laughter.]
Dr Huppert
I hope the hon. Gentleman will have a chance to take that step. He is right to say that there have been huge problems with pub closures, but as a result of new policies introduced by Liberal Democrat-led Cambridge city council, not only are pubs not closing, but previously closed pubs are able to reopen. Will the hon. Gentleman join me in congratulating the council on its excellent work, which has been supported by the Campaign for Real Ale and many other organisations?
Toby Perkins
Of course I welcome anyone taking a positive step in what is an incredibly difficult climate. At a time when there are so many pressures on pubs— 26 are now closing each week—anyone who is able to buck that trend will have our wholehearted support.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I am possibly the only Member in the House who owns a pub. I am the chair of the John Clare Trust, which has bought the Exeter Arms, where Clare and his father used to sing and play. Unfortunately, it is closed at the moment, but we are determined to reopen it as a community pub.
Toby Perkins
I almost got carried away there, then my hon. Friend announced that his pub was in fact closed. However, the fact that his determination and vigour will ensure that it soon reopens gives us all a sense of enthusiasm and excitement.
My hon. Friend the Member for Edinburgh South (Ian Murray), a former Enterprise Inns landlord himself, will have the honour of winding up the debate. I also want to salute the many other hon. Members who are here today and who have previously raised this issue in debates here or in the press, or joined campaigns in their communities to highlight the problems caused by aggressive pub company behaviour.
In September 2011, the Business, Innovation and Skills Committee’s fourth review of pub companies finally settled on the view that only a statutory code with a mandatory rent-only option would put the pubco relationship on a fairer footing. I was therefore disappointed by the suggestion in today’s Government amendment that Labour should have regulated this issue before. The Government will know that it was precisely because the Select Committee wanted to give the pubcos time to get their house in order that they were given a final chance in 2010, with a timetable that the Secretary of State supported when he first came into office.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Does my hon. Friend agree that it is rather strange that the Government are using the previous Government’s decision to abide by a Select Committee recommendation as an excuse to ignore the current Select Committee recommendation?
Toby Perkins
My hon. Friend’s intervention gives me an excellent opportunity to put on record my gratitude—and that of the whole House and the wider coalition supporting the reform—for his work as Chairman of the Select Committee, which has led the way on this issue. I entirely agree that it is odd that, with such a large body of opinion in favour of the reform, it has been so difficult for the Government to support the recommendation that the previous Government were behind and that this Government said in 2011 that they would support.
Alison Seabeck (Plymouth, Moor View) (Lab)
Many people outside the House are clearly taking a great deal of interest in this debate. We have a lot of independent brewers in the south-west, and some fantastic beers are sold in the local pubs. Many publicans there have raised the issue of the way rents are passed on with little independent assessment. Is my hon. Friend going to say something about that?
Toby Perkins
My hon. Friend has successfully predicted what I am going to say. I will definitely touch on that issue, because it is one of the key elements of the debate.
I also want to take this opportunity to reflect on some of the other contributions that have been made in the run-up to the debate by Members trying to support pubs in their area. The hon. Member for Leeds North West (Greg Mulholland) has been a determined campaigner on this issue. Among his many valuable contributions to the campaign, his article in the Yorkshire Post on 10 May was on message enough for the Liberal Democrat press office to promote it with the message that
“pubco terms are the biggest reason for pub closures”.
That was his view in May 2013, as I know it remains. Now, eight months later, I am disappointed to see that he has signed the amendment proposing that the Government need more time to come to the conclusion he has so consistently and persuasively argued for.
Greg Mulholland (Leeds North West) (LD)
The hon. Gentleman might be disappointed, but I was disappointed that he has tabled this Opposition day motion. We have had a conversation about this. My belief is that support for this issue commands a majority in the House of Commons, and that we need to do this properly, rather than through an Opposition day debate. I look forward to getting the recommendation from the Department for Business, Innovation and Skills and, at that point, getting everyone on both sides of the House together to push this through.
Toby Perkins
I have tremendous respect for the hon. Gentleman, but those whose lives have been wrecked by the behaviour of the pub companies will look askance at the idea that, because of the nature of this debate, people will choose whether or not to vote for the motion. We had a Back-Bench debate on the issue two years ago, at which the motion was carried unopposed. However, the Government ignored it. In fact, it is only when the Opposition have brought pressure to bear that we seem to have achieved any movement on the issue. Today, in an entirely open and reasonable way, we are calling for all Members who feel strongly about this, as I know the hon. Gentleman does, to support the motion and give the Government the necessary impetus and the courage of their convictions to take the action that is so desperately needed.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
One reason behind pub closures is the high taxation on spirits in general and on Scotch whisky in particular. Given that spirits and Scotch whisky account for 40% of the sales in pubs, and that the level of taxation continues to escalate, should not the Government look more closely at the inevitable loss of revenue involved?
Toby Perkins
My hon. Friend raises an important point. There are many aspects to the debate on the future of our pubs, but this debate is about the pub companies. I will therefore resist his offer to get drawn into what the shadow Chancellor should propose to do about the taxation of the Scottish whisky industry. However, my hon. Friend rightly identifies whisky as an important product for our pubs, for our economy and particularly for the Scottish economy. Whether the statistic that he has just given us lends any credence to Scottish people’s reputation for an enthusiasm for alcohol I will leave to Members to consider.
Bill Esterson (Sefton Central) (Lab)
May I offer an example from my constituency to support the motion and illustrate the urgency of the matter? A constituent of mine moved into her pub a few years ago with the promise of significant investment being made in the property. Those repairs have never been carried out. She also has to buy her beer from the pub company; if she buys from elsewhere, the pub company fines her and charges her significantly more. Does not that illustrate why the motion is so important—particularly the part about rent-only tenancies—and why we need action now? Tenants such as my constituent cannot afford to wait any longer for action.
Toby Perkins
I could not agree more with my hon. Friend.
I shall outline how we have arrived at this position. We have now seen the full scale of the revelations from the Select Committee in its four different reviews over eight years. Examples have also been given by many Members from across the House on behalf of their constituents. The hon. Member for Northampton South (Mr Binley), my right hon. Friend the Member for Torfaen (Paul Murphy) and my hon. Friend the Member for Easington (Grahame M. Morris) are all well-known champions of the cause. Just a little research has revealed many more.
The hon. Member for Salisbury (John Glen) has told the House about the landlords of the White Horse in Quidhampton, alleging that
“Enterprise Inns signed them up to a lease on a false prospectus and…made their business completely uneconomic and unsustainable”.—[Official Report, 13 June 2013; Vol. 564, c. 476.]
The hon. Member for Meon Valley (George Hollingbery) has confirmed that
“unsustainable rent demands…from Enterprise Inns”—[Official Report, 13 June 2013; Vol. 564, c. 476.]
led to the closure of the White Hart in South Harting. The hon. Member for Romsey and Southampton North (Caroline Nokes) has written to Enterprise Inns to inform it that the Abbots Mitre in Chilbolton was
“under threat largely due to unrealistic rents and changes in terms and conditions.”
The hon. Member for Bristol North West (Charlotte Leslie) has written to Enterprise Inns asking it not to close the Lamplighters in Shirehampton.
The hon. Member for Cheltenham (Martin Horwood) has bemoaned Enterprise’s decision not to save the Little Owl, saying that
“a big company has failed to recognise a pub’s value to the community.”
The hon. Member for Pudsey (Stuart Andrew) was also concerned with saving the Owl, this time the one in Rodley, whose threatened closure he blamed on
“the mounting costs imposed by the building owners, Enterprise Inns”.
The hon. Member for Bromley and Chislehurst (Robert Neill), who has recently written an excellent article in support of a mandatory free-of-tie option, has said of the sale of the Porcupine in Mottingham that the public were
“incensed that their right to bid for the pub has been bypassed deliberately by Enterprise Inns and LiDL”.
The right hon. Member for East Devon (Mr Swire) told a packed crowd that he would be joining the campaign to save the Red Lion in Sidbury, which Punch Taverns was planning to sell. There are many more examples. My right hon. Friend the Member for Tooting (Sadiq Khan) joined the campaign that successfully saved the Wheatsheaf. My hon. Friend the Member for Westminster North (Ms Buck) was particularly busy: she was trying to save both the Clifton and the Star. My right hon. Friend the Member for Southampton, Itchen (Mr Denham) campaigned to save the Bittern. The list goes on and on and on.
Today we are faced with a choice. We can race to the aid of pubs in distress in our communities—pubs that are the symptoms of the great pubco disaster that plays out in every one of our constituencies and leads to job losses and the loss of a treasured community asset. We can sign the petitions; we can beg the pub companies to be fair this time; we can complain that the rents were too high or that the companies sold a false dream; we can rage against how they did not understand or seem to care about the impact on our communities; we can bemoan that they changed the rules; or, finally, we can act.
Andrew Selous (South West Bedfordshire) (Con)
Televised sport, especially football, is very important to many pubs. I have had news today that a pub in my constituency is in difficulty because Sky Sports wanted to charge £1,250 a month to show Sky Sports in the pub. Has the hon. Gentleman had any thoughts as to how we can try to get sport into pubs more cheaply or increase competition so pubs can show sport, especially football?
Toby Perkins
The hon. Gentleman makes an incredibly important point. I know that many pubs have an agonising decision to make about whether they continue to show sport, which is incredibly expensive but attracts a lot of people through the door. I am sure he raises this question looking forward this weekend to Sheffield United playing Fulham on BT Sport, which can be watched in most good public houses at about 1 o’clock on Sunday afternoon.
The point the hon. Gentleman raises highlights the fact that the proposal we are discussing today is not a panacea for all the problems of the pub trade. If our motion is supported and the Government, with our support, swiftly bring forward regulation we can all back, it will not mean that all the problems will be solved and no more will be asked of Parliament. The sports issue is important and I will speak to my hon. Friend the Member for Eltham (Clive Efford) about it, as he is putting forward Labour’s ideas on sport for the next manifesto.
Mark Tami (Alyn and Deeside) (Lab)
I recently met a landlord who has managed to turn around a failing pub and increase the turnover. His reward is for all the extra money to be taken away in increased rent. That destroys the incentive for people to work hard and bring these pubs back.
Toby Perkins
That is an important point, and we hear it time and again. Given the economic difficulties and the difference between on-trade and off-trade alcohol, people understand that there are going to be difficult times for pubs. They will also recognise that some people are not suited to running a pub and, for whatever reason, are unable to make a decent fist of it. What sticks in the craw of most fair-minded people, however, is that the majority of those who take on major pubco tenancies end up earning under £10,000 a year. It is not a case of a few people doing very well, a reasonable number making a decent living and a small number failing; we are seeing the majority failing. Under the existing perverse disincentives, regardless of whether the pub does well or badly, the pub company does all right, and many people say that even when their trade grew they got hit with higher rents or higher prices that took away all the increased revenue they had generated. It is clear that there is a desperate imperative to act.
Andrew Gwynne (Denton and Reddish) (Lab)
My hon. Friend recently rattled off a great long list of Members on both sides of the House who have rightly campaigned on this issue. Does he share my disappointment that as long ago as last January he brought a debate to this House during which the Government performed a U-turn saying they would seek to introduce a statutory code, which is absolutely necessary, and we had a lengthy consultation, but very little in terms of the legal framework has changed 12 months on?
Toby Perkins
I certainly do share my hon. Friend’s disappointment. My sense is that there is a lot of sympathy on this issue across the House and I want to bring people together rather than tear us apart. It is fair to say that a year ago the Government did a U-turn. I was not disappointed with that at all; I was delighted. They told the House that they were going to get on with the consultation. Many people were celebrating, and they went out drinking in the pubco pubs around the country that night. A few months later the consultation started and it finished about six months ago, yet despite the overwhelming response in favour of what we are proposing today and what the Government seemed minded to consider, we still have not actually had any action. We have not changed the situation on the ground for hard-pressed publicans and all those people who have seen their life-savings disappear and who want to know that the regime is going to improve for the people who follow them.
As I was saying, we can bemoan the situation, we can join the campaigns, or we can act. We can take court action on the cause of the closures. We have within our grasp today the opportunity to prove that actions speak louder than words and stand united across the House on behalf of our communities, but also on behalf of the hundreds who are looking to us to act. In just four days since Friday, 26,762 people have signed the 38 Degrees petition on the great British pub scandal.
CAMRA is an immensely important and well-respected body. It has the best interests of the pub in its heart and in its DNA; that is its raison d’être. It boasts a membership of almost 160,000, a staggering demonstration of the importance of real ale and pubs to people across our country. If I was seeking to make a political point, I might have mischievously pointed out that, with almost 160,000 members, CAMRA is bigger than the recently reported membership of the Conservative and Liberal Democrats parties combined, but as I said I wanted to be consensual, I am not going to mention that.
We all know that a fairer relationship between pub companies and their landlords is not a panacea that will end all the challenges faced by the trade. There are others and there will continue to be asks of us in Parliament even if we take action on this scandal today, but the fact that we cannot solve every problem does not mean we should not solve this major one. From the Federation of Small Businesses to the GMB, from CAMRA to the Forum of Private Business, from Fair Pint and the all-party save the pub group to Unite the Union, a diverse coalition of interests has consistently called for a new statutory code of regulation.
Let no one say that this House or the Business, Innovation and Skills Committee have rushed to judgment. Over four reports and eight exhaustive years, the Committee gave the major pub-owning companies every opportunity to make the changes that were needed to put their house in order, yet at every turn it found that the industry moved at a glacial pace, and always reluctantly, and only because of the scrutiny of the Committee.
Although I want to pay tribute to everyone involved in the work of the Select Committee and to say that I think the work done on pubco is a shining example of the Select Committee system at its best, it should not have to be the role of a Committee not only to investigate an issue but to be the body that constantly has to chase to see whether the assurances made to it have been kept. Following the final 2011 Select Committee report, there was widespread disappointment when the right hon. Member for Sutton and Cheam (Paul Burstow) came to the House to defend opting for a self-regulatory regime. In January 2012 this House felt it had seen enough. We believed that voluntary regulation had failed and we voted unanimously for a statutory code, a vote that was ignored by the Government. Frankly, at every stage it has felt as though the Opposition and the Select Committee, ably supported by Members across the House, have had to make the running.
During oral questions to the Secretary of State for Business, Innovation and Skills in November 2012, there were three Labour pubco questions and it was suddenly announced that there would be an investigation into the success of self-regulation. A day before the Opposition day debate in 2013, the Government finally announced that they would consult on introducing a code to deliver a fairer balance between pub companies and their tenants. The response to the consultation was overwhelming: over 7,000 people responded, 96% were in favour of regulation, 67% were in favour of a mandatory free-of-tie option, 92% were in favour of open market rent assessment, and there was widespread support for a stronger independent adjudicator.
The strength of feeling was overwhelming, with 91% of respondents who ran a pub saying that the beer tie was one of the three biggest challenges facing their business, and more than nine in 10 saying they would take a free-of-tie option even if it meant paying a higher rent. It is therefore a little odd for the Government to say, as they do in their amendment, that they want to take more time to learn from the consultation. They chose the questions to ask and they got a big response. On almost all the big questions, the level of support was so overwhelming that even Robert Mugabe would have thought it was a bit one-sided, yet the Government then commissioned a report from London Economics, which critics felt was deeply flawed, apparently to try to persuade themselves against the view they appeared to have taken before their consultation. Nothing could more clearly demonstrate the failure of the big pub companies than the desire to leave them on the part of the very people they consider to be their business partners. But for all the warm words expended on the Floor of this House and elsewhere, still nothing has changed in legal terms, and every week 26 pubs close.
If the Government do not introduce a Bill on this issue in the Queen’s Speech, it is impossible to imagine that there will be sufficient parliamentary time to pass one in this Parliament. As my right hon. Friend the Member for Doncaster North (Edward Miliband) said on Sunday’s “The Andrew Marr Show”, if this Government fail the challenge set them today, everyone who feels strongly about this issue will know that, for all the rhetoric, only voting for a Labour Government will bring about the fairness that so many people so desperately want. Hon. Members will today have an opportunity to choose whether to be part of the solution or, I am sad to say, part of the problem.
There is no doubt that the existence of large pub companies, which own the vast majority of British pubs and often force their licensees to buy beer only from them, are distorting the market. As we consider their devastating impact, let us remember that 57% of Britain’s pubco publicans, people who often work among the longest hours of anyone in our communities, earn less than £10,000. The Federation of Small Businesses, brilliant advocates but hardly Marxist radicals, found in 2013 that a mandatory rent-only option would generate £78 million for the UK economy, that 98% of respondents would have more confidence in the success of their pubs and that almost 10,000 would take on extra staff or give their staff extra hours of work. Hon. Members will know that the FSB does not propose additional regulation lightly.
My own Chesterfield pubs survey mirrored many of those encouraging statistics, but also sounded a deadly warning about the cost of inaction, with many pubs saying that they were on the brink of closure and that increased rents and beer prices were key issues. This morning, the British Beer & Pub Association claimed that tied tenants’ pubs were cheaper, but that is far removed from the reality that people see in their community. At The Nags Head in Dunston in Chesterfield, I dealt with a Marston’s tenant who was competing with Marston’s managed houses just across the road that were selling the same product at up to £1 a pint less. The big pub companies and the BBPA will tell us, “Yes, there is the odd problem, but it is not typical.” They say, “You can’t offer general criticisms. We need to know about specific cases.” However, when we bring them specific cases they say, “Well, that’s just a one-off.” It seems that no evidence is good enough for them to recognise the reality of what people are seeing in their pubs. The BBPA and the pub companies are saying, “Mainly it’s just people who have failed in their businesses wanting to blame someone else.” I do not think that stands up to any sensible scrutiny.
Many businesses and industries have undergone tough times, particularly in the past five years or so, but they have not all universally claimed that they have been misled by their suppliers. Corner shops have closed, but MPs are not besieged by former Londis or Spar shopkeepers claiming they have been ripped off by Londis or Spar. People in business generally know the difference between tough market conditions and plainly misleading practices.
On that note, the BIS consultation last year was sobering reading for anyone who thought that the threat of regulation would cause the industry leopards to change their spots. It told of a married couple who produced a careful budget plan before signing a lease, only to find on the day they received the keys that their pub company increased the prices, meaning the couple can only afford to pay themselves one salary. We also heard about the couple who ploughed—
Mr Speaker
Order. May I say gently to the hon. Gentleman, to whose speech I am listening with close attention and great interest, that I know he will want to take into account the fact that several hon. Members on both sides of the House also wish to take part?
Toby Perkins
That has been preoccupying me for several minutes, Mr Speaker. None the less, I would not like the couple who ploughed their life savings into acquiring a pub only to find the agreed credit order with their pubco was unilaterally withdrawn, leaving the business in ruins, to be left out of my contribution. I am glad that they found their way in.
Our motion calls for three key steps to be taken that will ultimately lead to a better future for Britain’s boozers. First, we need a mandatorv free-of-tie option. The beer tie, whereby landlords can buy products only from their pubco, works for some licensees, but for many others it means that they can buy only limited products at inflated prices. We want every landlord to have the choice of whether to go free of tie. The hon. Member for East Dunbartonshire (Jo Swinson), whom we all miss terribly, although she will be back with us soon, has previously said that she is
“committed to stamping out abuse of the beer tie”.
Clearly, there is only one way to do that.
The Government have previously committed to the principle that no landlord should be worse off than they would be in an otherwise free-of-tie pub, but the behaviour of the pub companies suggests to me that that will not happen without allowing the market to decide. Members who are worrying that such a measure would go against their free market principles should have no fear. What the pubcos are defending is an old- fashioned closed shop, whereas what we are proposing is a genuinely competitive market solution that stands up for the rights of the small entrepreneur.
Secondly, we need independent rent reviews. When a new licensee takes over a pub, or when an existing rent contract expires and is renegotiated, there should be a fully transparent and independent rent review, completed by a qualified surveyor. That would deal with so many of the horror stories that we have heard in this debate and previously.
Finally, there must be a truly independent body to monitor the regulations and adjudicate in disputes between licensees and pubcos. There is little confidence in how PICAS, the Pubs Independent Conciliation and Arbitration Service, or PIRRS, the Pubs Independent Rent Review Scheme, are operating, with many of the people going through the PICAS process unhappy with the outcome.
Those are our tests, which are grounded in the principles of building a market that works, with rules to prevent restrictive practices and big companies unfairly using their size in an uncompetitive way. I know that Members across the House share this vision, so let us unite today behind this vital British industry and this vital British institution, and deliver the change that publicans, licensees, business groups, trade unionists, beer enthusiasts and the great British public are crying out for. I commend the motion to the House.
The Secretary of State for Business, Innovation and Skills (Vince Cable)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“welcomes the opportunity to debate the issue of fairness in the relationship between publicans and pub owning companies; notes the concerns, acknowledged by the Government in January 2013, about the failure of pub company self-regulation to rebalance risk and reward between the companies and their tenants and lessees; recognises the excellent work and the four Reports that the Business, Innovation and Skills Select Committee and predecessor Committees have produced over the years on this issue; further notes that the previous Government failed to take any position on this important issue until February 2010, just two months before the dissolution of Parliament and the end of its term in office; further notes that this Government held the first ever consultation to explore how best to protect tenants and lessees through a statutory code of practice backed by an independent adjudicator; further notes that this consultation received a very large response and that it is right that the Government carefully considers the huge volume of the evidence received as part of this consultation before publishing its response as soon as it can in 2014.”.
I welcome the opportunity to debate, again, fairness in the relationship between publicans and pub-owning companies, on which, at least on the broad principle, there is a wide measure of agreement. Perhaps I might thank the hon. Member for Chesterfield (Toby Perkins) for what, by his standards, must rank as a calm and consensual introduction. I wrote down the word “statesmanlike” at one point, but that was probably a bit excessive, so we will save it for another occasion.
My own approach to the matter is slightly coloured by the fact that I have only just stepped off an aeroplane from a part of the world where tasting alcohol is likely to lead someone into prison, if they are lucky. Indeed, I spent yesterday evening in a bar where the most potent drinks on offer were “mocktails”. At least in this country we do value our pubs, not simply for the drinks but for the fact that this is a major industry, with a large number of small and medium-sized companies. The people who run them are hard-working and not well paid. Hundreds of thousands of people work in the industry, which, as the hon. Gentleman said, makes a contribution to the communities in which we live.
The central issue in the debate is not about the principles, which we have debated before and on which there is a lot of common ground, but, “Why the delay? Why have the Government not given a formal response?” Let me explain the point. We received a big response to the consultation, which, let us remember, was the first Government consultation on a specific set of proposals in the long period, under both Governments, during which the issue has been considered by the Select Committee and others. We had a formal consultation, to which there was a massive response. We received about 9,000 responses, more than 1,000 of which were very specific—they were often written communications with nuanced arguments, which we must try to address. We are trying to look at the evidence in an objective way. The evidence may well point in one direction, but there are competing studies; the London Economics survey has been mentioned, but another good study has been done by the Federation of Small Businesses. Such studies do give different arguments, which we must evaluate.
Let us also remember that the industry is a complex one, and it was not a simple “yes or no” issue. The consultation also covered a set of other issues, including flow monitoring, guest beer and the gaming tie, each of which must be examined properly, not to mention its open question, which was about the mandatory free-of-tie option and open market rent review. Everybody concerned with the matter knows that that is the core issue, on which, although there was a strong opinion, there was less unanimity. We must respond to those issues and try to come forward with a proposal that carries the House and as many of the stakeholders as possible. I am very conscious of the legislative timetable, and I can assure the hon. Gentleman that there is no attempt to delay on those grounds. We want to see action, but first we must provide a thorough and proper response to the consultation. Of course we have already released the evidence.
Simon Danczuk (Rochdale) (Lab)
There is a lot of cross-party support for this matter, but I get the impression that the Government are taking for granted my good nature and that of other hon. Members. Will the Liberals go into the next general election having done absolutely nothing on this important issue?
Vince Cable
The simple one-word answer is no, but we will wait to hear the Government’s response.
Vince Cable
As I have said, I cannot anticipate exactly what the Government will say in their official response, but the whole purpose of the consultation was to seek views on legislative action, and our response will be built around that set of questions.
Mr Laurence Robertson (Tewkesbury) (Con)
I have a lot of sympathy for what has been said in the debate so far, but I am a little troubled by suggestions that this problem arose only in May 2010. I had an Adjournment debate on the issue during the previous Parliament, and a number of other debates were also held, but nothing was ever done. My right hon. Friend was right to suggest that this is not a simple issue.
Vince Cable
I thank my hon. Friend, who remembers such things from his time in the House, for his reminder. We have, I think, had four Select Committee reports under different Governments. The matter has been actively debated for something in the order of eight years, and we have moved quickly on it in comparison with what went before.
Jim Shannon (Strangford) (DUP)
The failure of the pub companies to self-regulate underlines the need for an adjudicator, as does the fact that a number of pubs are closing. Does the Minister not feel that there is a sense of urgency in relation to bringing in legislation?
Vince Cable
As I will say later—we have covered the matter in earlier debates—we did try to encourage self-regulation. We drew the conclusion that the action had not been adequate, which is why we moved on to proposals for statutory regulation on which we are now consulting. We have been down that road; we have tried that.
Mr Henry Bellingham (North West Norfolk) (Con)
I agree with the Secretary of State that it is important that we get this right. I must impress on him that there is a degree of urgency now with the forthcoming Queen’s Speech. Does he agree that we should recognise the fantastic job that local organisations, such as the Campaign for Real Ale group, are doing? In my area, CAMRA has pioneered a number of pub salvations, working with the community to ensure that the King’s Arms at Shouldham and the Dabbling Duck at Great Massingham were able to survive.
Vince Cable
My hon. Friend is right to remind us that this is not simply a top-down campaign. It involves not just Parliament, but an enormous grass-roots campaign. I am talking about community organisations, and I will go on to develop that point in a moment.
Ian Lucas (Wrexham) (Lab)
The right hon. Gentleman is being very generous with his time. Will he confirm that he now believes that statutory regulation is necessary?
Vince Cable
That was the purpose of the Government consultation. Statutory regulation was necessary, and we consulted on how to do it. We are now evaluating the results of that process. The House will soon hear our conclusions on how to take the matter forward.
Let me repeat my appreciation for the work that has been done by Members from all parts of the House. I also thank the Business, Innovation and Skills Committee, whose Chairman is here, and the various campaigning groups for their work on the matter. It would not be amiss to single out Fair Deal For Your Local, which is the campaign that has been mobilised by my hon. Friend the Member for Leeds North West (Greg Mulholland). As part of his campaign, he has brought together CAMRA, the Federation of Small Businesses and the GMB union as well as various other groups. We are talking about local and national groups across industry and across the country.
Toby Perkins
I am grateful to the Secretary of State for giving way and for what he said about me being a statesman. If I may, I will press him on the timetable issue that has been raised. If he accepts that statutory regulation of some sort is necessary and the consultation overwhelmingly supports the majority of such aspects, will he at least commit to some sort of legislative action in the next Queen’s Speech, and will he say that we will not get to the end of this Parliament with nothing having changed?
Vince Cable
I cannot really add to what I have already said. The hon. Gentleman knows that we are following a process. I am conscious of the legislative timetable, and he will remember—indeed it is the whole purpose of this debate—that the Government did not consult in an open-ended way over this question; we consulted on a specific proposal to introduce statutory regulation, and that is what we are responding to. Although I am conscious of the legislative timetable, I will not give a specific date on which this report will be concluded.
Mr Robin Walker (Worcester) (Con)
As a member of the Select Committee, I urge the Secretary of State to take action as soon as possible, but I do understand the need to listen to the consultation. A moment ago, he mentioned some of the broad campaigning that has gone into this matter, and the organisation Fair Deal For Your Local, which I support. Does he agree that it is unfair of Opposition Members to suggest that this Government have done nothing for pubs when we have paid attention to the important campaign to end the unfair and job-destroying beer duty escalator?
Vince Cable
Indeed. I will go on to talk about some of the things that the Government have done to help the pub industry, the most important of which is the tax measure. The combination of the 1p cut and the abolition of the escalator is the equivalent of 4p on a pint. There have also been various other measures to support community pubs, of which my hon. Friend will be well aware.
Rushanara Ali (Bethnal Green and Bow) (Lab)
I have two points to make. One relates to the many pubs in my constituency and the curry industry, which is worth about £4 billion, and the other to the inter-relationship between beer and curry. What assessment has the Secretary of State’s Department made of the impact on pubs and the alcohol and restaurant industries of the increase in VAT to 20%?
Vince Cable
Just about every aspect of the fiscal and economic implications for this industry has been exhaustively reviewed, and I will try to find out the answer to that specific question from the various studies that have been done. I do not think that we have specifically analysed the interaction between beers and curries, but I am sure that there is a positive correlation.
Ms Margaret Ritchie (South Down) (SDLP)
Will the Secretary of State urge his colleague, the Chancellor of the Exchequer, to give full consideration in advance of the Budget to a reduction in VAT on the hospitality industry, as it is urgently required not only in Northern Ireland but by the British Hospitality Association?
Vince Cable
I have met the hospitality industry and it has set out its case for a VAT reduction. As the hon. Lady will know, I do not make the decisions on what goes into the Budget on tax measures. I am sure that there are many other claims on the Budget in terms of tax reduction and spending. Certainly, the hospitality industry has been very effective in making its case.
Andrew Griffiths (Burton) (Con)
I thank my right hon. Friend for the measured way in which he is considering all the responses to the consultation. Does he understand the concerns raised by the Office of Fair Trading about the free-of-tie proposal as outlined in the consultation? It claims that it will increase rents and the price of beer and lead to the closure of more pubs.
Vince Cable
I have not seen those comments by the Office of Fair Trading, but I will certainly look for them. I am rather surprised by them because the whole purpose of that option is to increase competition and market forces. If my hon. Friend could send me the details, I would be interested to see the response of the competition authorities.
Mr Sheerman
As I own a pub, I have a great interest in this debate; I am chair of the John Clare Trust and we will be bringing this pub back to life through crowdfunding. The Secretary of State might not have control of the Budget, but he knows that there is a consultation on crowdfunding regulation. If we get that regulation wrong, it will stop a lot of community enterprises funding themselves, so will he ensure that it is appropriate?
Vince Cable
I am well aware of the importance of crowdfunding, and the hon. Gentleman might have followed the progress of the business bank, which is now actively engaged in, and supporting, crowdfunding, certainly through the peer-to-peer lending streams. I am aware of the issues with the regulation. Some incumbents, understandably, want their industry regulated, but we need to balance that against the fact that new companies coming into the industry might be less enthusiastic about regulation. Incumbents such as Funding Circle have made a very good case for sensible, moderate regulation.
Let me move on. As I said, we have had four Select Committee investigations into whether the tied model is at the root of the unfairness in the relationship. We have received an enormous amount of correspondence, quite apart from that received from the various action groups, from tenants about problems in their relationships with pub companies and from MPs. The response I have had in the past 10 to 15 minutes shows how widespread such concerns are.
Although pub-owning companies can and sometimes do treat their tenants well, the overall sense from those representations is that the tie arrangements with the pub-owning companies are unfair and that a lack of transparency causes a severe imbalance of negotiating power. That is the essence of the problem. There is an issue about what exactly we should do about it, which is what we are consulting on, but there is no doubt about the problems.
It has also been very clear from the discussions led by the Select Committee over the years that the problem is not so much the tied business model but the unfairness with which it operates. There is quite a lot of debate about the evidence on the speed of closures and how they operate in the tied sector and the non-tied sector. My understanding is that there has been a fairly steady rate of decline, from some 70,000 pubs in 1980 to 50,000 today. Depressingly, that is something in the order of 18 a week net. That decline has continued even after some of the big changes that have taken place in the industry—from the beer orders to pub company consolidation. I know that there is a debate among campaigners about whether tied pubs are more likely to close than pubs that are free of tie, but the evidence I have seen goes both ways. This is not fundamentally an argument about pub closures; it is essentially about the unfairness of and inequalities in the relationship.
Duncan Hames (Chippenham) (LD)
My right hon. Friend is right to broaden his critique beyond the tie itself, important though that is. In my constituency, the landlord of a pub in Melksham complains that Punch is in breach of its own code of practice and of the framework of the British pub industry. He asks where else he can go under the current arrangements, without statutory regulation, when he finds that he gets no joy from the self-regulatory system on a range of issues from dilapidation surveys to meetings that are not minuted.
Vince Cable
As I said earlier, there were more than 1,000 individual responses to the consultation. Many described very similar stories to the one that my hon. Friend has just mentioned.
Vince Cable
May I move on, as the hon. Gentleman has intervened once already?
Just as this is not primarily an issue about the rate of closures, I think we would all agree that it is not fundamentally an issue of consumer choice. Otherwise, the competition authorities would have been engaged a long time ago. It has already been shown that the share of microbreweries has increased over the period for which many pubs have been under a great deal of stress. The number of breweries now tops 1,000, the highest figure since the 1930s.
The conclusion that I think we have all reached is that there are issues with the beer tie, but that is not the fundamental problem in itself. The Business, Innovation and Skills Committee argued that it does not want to see the tie model disappear. Under proper conditions, it is a business model that can be used and it has been around in various forms since the 18th century. The abuses are a different matter and are due in part to the lack of transparency in the relationship between the pub-owning companies and their tenants, which is what I want to turn to.
Pauline Latham (Mid Derbyshire) (Con)
I was recently contacted by my constituent, Claire, who has been told by her landlords, Enterprise Inns, that the rent on her pub, the Pattenmakers Arms in Duffield, will increase by 42% in April. Claire loves her pub and has brought it from being a grubby and run-down pub to an award winner; she even worked while she was battling breast cancer. Does my right hon. Friend believe that the pub companies whose business practices force out committed publicans such as Claire will be dealt with effectively by some sort of adjudicator?
Vince Cable
That is a truly awful case. I hope to see the details of that example, because although we have a lot of cases, it seems to be a particularly bad one. I guess that would be one of the factors that led the Government to conclude that the voluntary code approach was not satisfactory, as presumably it has already been used.
The voluntary approach did have some positive outcomes, such as the Pubs Independent Conciliation and Arbitration Service and the framework code, but the conclusion we came to at the beginning of last year was that the changes had not gone far enough and that problems persisted. To us, the essential point is best captured in the work done by CAMRA that suggests that 57% of tied tenants earn less than £10,000 a year. If we apply that to 35-hour week, 48 weeks a year, we are talking about less than £6 an hour, which means that people are working for considerably less than the minimum wage. Since many work much longer hours, that means that this is a very low-paid industry. Many publicans are struggling. In contrast, only 25% of those who are free of tie are on at the same income level. There is a striking disparity, which is at the heart of the question.
Mr Bellingham
The Secretary of State is being very generous in giving way. Does he agree that many of these disputes need to go to adjudication? Does he share my view and that of many colleagues that getting an adjudication system in place as soon as possible is essential?
Vince Cable
Indeed. That was the objective of the consultation. Let me briefly reveal the history, as we have been talking about it implicitly throughout these exchanges. We announced last January that it was time for the Government to step in and the consultation was launched along the lines envisaged by the Select Committee on a statutory code of practice and an independent adjudicator. That was the framework of the Government recommendation. We included an open question on the mandatory free-of-tie option with open rent review and we tried to underpin a specific intervention with a framework, a philosophy, a set of principles, the overarching fair-dealing provision and the core principle that a tied tenant should be no worse off than a free-of-tie tenant.
Julie Hilling (Bolton West) (Lab)
I thank the right hon. Gentleman for giving way, he is being very generous. Does he recognise that because of the relationship between the licensee and the pub companies, whatever the licensee does means in some circumstances that the pub company asks them for more money? If they put on food, for example, the pub company increases their rent. The relationship is fundamentally unequal and difficult.
Vince Cable
The hon. Lady is stating in her own way what I have already said several times and what I think is the consensus. There is an imbalance in the relationship, which is not equal. The market does not deliver a fair outcome, which is why we are considering how we can change it.
We did not want to reopen the fundamental issue about the pub tie, but to decide how to address the unfairness of it, and the consultation revealed the depth of feeling on the subject, which all the interventions that we have had so far have reinforced. The responses came not just from the pubcos and the tenants, but from supply chain companies, consumer groups and trade bodies, all of which fed into the consultation, and they were so many and diverse that we published them just before Christmas so that hon. Members were aware of what was being said before we came to a conclusion on how to respond.
As I have said already, we want to respond as quickly as possible. We fully understand the problems, not just because distressing cases are continuing but because people in the industry want clarity, and it is perfectly reasonable for people to want regulatory certainty. We do not want to rush into a decision. We want to get this right, but we realise that there is some urgency because people need to make investment decisions. We are trying to get this absolutely right and we want the intervention that we make to be proportionate and properly targeted.
Paul Blomfield (Sheffield Central) (Lab)
I thank the right hon. Gentleman for taking a further intervention and for all the others that he has taken. He makes the case for urgency, which is reflected across the House. Does he not accept that his failure to answer the question from the shadow Minister and the Chair of the Select Committee, together with the wording of the Government’s amendment, will be seen widely throughout the country as an attempt simply to kick this issue into the long grass? Will he reassure the House that that is not the case by giving a commitment that legislation will come forward in this Parliament?
Vince Cable
There is no attempt to kick this into the long grass. We are trying to do this properly. I can assure him that it will be dealt with in a timely way. We are not cutting corners. As I said at the beginning, we have a large number of responses and different strands of evidence that we are trying to reconcile and respond to properly. We must do this right.
The whole issue of the beer tie, the relationship with the pubcos, is crucial, and we must take action in the way that we have discussed, but it is not the only set of measures for the pub industry. We are sometimes in danger of losing sight of the bigger picture. Thanks to interventions from Government Members there was reference to the budgetary measures that have been taken, and I would add to that the action taken on business rates, including the capping of the business rate increase, the continuation of business rate relief, the £1,000 discount for retail outlets, which include pubs, and some of the action taken by my colleagues in the Department for Communities and Local Government, for example the pub is the hub scheme and the community right to bid to keep pubs open. A lot needs to happen and a lot is happening on a broad front, and I reassure the House of my commitment, which remains as strong as ever, to addressing the unfairness in the relationship between pub companies and their tenants.
Madam Deputy Speaker (Dawn Primarolo)
Order. A large number of Members wish to take part in the debate, which is due to finish at 4 o’clock, including the Front-Bench winding-up speeches. I ask each Member to speak for no more than 10 minutes, including interventions, so that we can fit everybody in. If that does not happen, there will have to be a time limit.
Paul Murphy (Torfaen) (Lab)
In the last three Januarys, including this one, I have written to Mr Speaker to ask to speak in a debate on pub companies. In all three debates—I assume this one as well—there has been unanimity across the House of Commons on what measures need to be taken. I pay particular tribute to my hon. Friend the Member for Chesterfield (Toby Perkins), the hon. Member for Leeds North West (Greg Mulholland) and, although he is not here, the hon. Member for Northampton South (Mr Binley), and many others too, right across the political spectrum, who regard this as a very serious and important issue. There have been two unanimous votes in the House of Commons on this, although on the second one it took 24 hours before the Secretary of State decided that he agreed with the House of Commons, and he came along and gave us great assurances of what would happen.
There have been four Select Committee reports, more or less all arguing for the same course of action. Enormous numbers of people from our constituencies—I think of Mr Phil Jones who owns the Open Hearth in Griffithstown in my constituency—have written to us about the iniquities of the system. A large number of organisations support the basis of the Opposition motion, including the GMB, CAMRA and the Federation of Small Businesses—a whole host of them. The essence of it is that they all say—I understand that the Secretary of State agrees with this—that first of all there should be a statutory code of practice; secondly, a mandatory rent-only option for pubcos that own more than 500 pubs; thirdly, an open market rent review; and finally, an independent adjudicator. All those are meant to enhance the significance and importance of the role of pubs in our communities. That has already been mentioned a number of times, and I am sure will continue to be throughout the course of the debate.
A new institution that has come into the debate, which many hon. Members will have read about, is the Local Government Association, which talked about the importance of pubs in our communities, and, as the Secretary of State mentioned, the importance of the community right to bid for pubs. But the essence of my contribution is not what has been said and will be said, but why we have had a delay, which strikes at the heart of what was said by the Secretary of State—who clearly is not listening to me, but perhaps other hon. Members are.
The Secretary of State presides over one of the largest Departments in the Government. He has an army of officials and civil servants and a little army of junior Ministers. He tells us today that the reason why this has been delayed is that the consultation is so enormous, so vast and so unwieldy that they cannot make up their minds as to what to do, but in the same speech he admits that this was not an open-ended consultation. This was a consultation on the basis of the Government not having made up their mind but being very close to making up their mind on what the solution should be. In many ways it was a closed consultation, making it much easier.
Andrew Griffiths
I understand the right hon. Gentleman’s desire for movement and to see some improvement in this matter, but does he not accept that in 13 years of his Government, despite 6,000 pubs closing in the last three years alone, they did nothing at all, apart from a few weeks before the general election, when, amazingly, something appeared in the manifesto? Does he understand that at least this Government are listening to the consultation and looking to make some changes for the good?
Paul Murphy
Of course I accept that Labour could have done more when we were in government, but after three debates in the House of Commons during the last three years, and when the Government have already said that they want to take these matters into legislation, they are now using the excuse of a consultation being too burdensome to allow them to make up their mind. If we were at the beginning of a parliamentary Session, that would not be too bad, but we are not. We are 15 months away from a general election. We are possibly just months away from a Queen’s Speech. When my hon. Friend the Member for Chesterfield referred to the fact that this had been kicked into touch, perhaps he had a point. Unless the Government make up their mind relatively soon, time will run out and nothing will happen between now and the general election.
Jim Shannon
The right hon. Gentleman makes a very good case. With some 50% of pubco licensees reporting earnings of less than £10,000 and 26 pubs a week closing—a different figure from that mentioned by the Secretary of State—time is not on our side. Urgency is needed. We need to have the legislation in place before the next election.
Paul Murphy
The hon. Gentleman is absolutely right. The purpose of this debate is not to argue for or against the proposals, because last year the Secretary of State said that he agreed with them. He said that he did not believe in the voluntary system and that a proper system of regulation was needed, and I believe he genuinely believes that. He represents moderation in the Cabinet and, some might argue, social democracy.
Paul Murphy
Indeed. In which case he would be opposed to the big energy companies, the shenanigans of the bankers and—I believe that he is—the way the pub companies operate, which is to the detriment of the small and medium-sized enterprises that are our pubs. I therefore think that he is on our side.
However, I know from my years in government that things can be delayed for other reasons, even if Ministers pretend that it is because the consultation exercise is too big to handle. I think that the Secretary of State is meeting opposition from Cabinet colleagues, maybe from the Treasury and maybe from the top. The consultation ended months ago and the timetable is now tight, and I do not believe for one second that the delay is being caused by anything other than Government disagreement, whoever it is from.
The longer the delay continues, the greater the damage to public houses in our communities. Some 26 pubs a week are closing. The pub companies themselves have caused thousands upon thousands to close. Some of those closed pubs have now been taken over by big companies and turned into shops—I think Tesco has taken over 130 in the past few months. When we bear in mind the importance of pubs to our communities, we realise that the longer the delay continues, the worse the situation will get.
The Secretary of State has the power to change that. He could persuade his colleagues—that is where the problem is coming from—on how to change those things. Unless he does so, all the promises that he was forced to make last year, which I believe he thinks are right, will come to nought.
Mr Chuka Umunna (Streatham) (Lab)
What puzzles the Opposition is the fact that the Secretary of State has accepted in principle the need for a legislative code, so I do not understand why he is unable to commit today to taking legislative action by at least the end of this Parliament, given that that is what he is consulting on. Does my right hon. Friend, like me, fail to understand why we are not seeing that commitment from the Secretary of State?
Paul Murphy
I repeat that I think the reason is that he is encountering opposition within the Government.
The Secretary of State is right that things have changed. Having been a Cabinet Minister for eight years and having dealt with all sorts of consultations, my experience is that we must of course take them seriously and look at the pros and cons, but he had already made up his mind, more or less, before the consultation was done. The consequence of all that is that he has to battle on. He has to get back into the Cabinet Committees and persuade his colleagues that this is important. Let us ensure that in the Queen’s Speech there is a proper Bill to put right what is clearly wrong.
Chloe Smith (Norwich North) (Con)
I, too, welcome the debate. It is not the first time we have looked at the topic. I am in favour of the amendment, because I believe that the Government are taking action and that it is important to do that well, rather than rushing for reasons of political expediency. It is important to start by echoing the point that my hon. Friend the Member for Burton (Andrew Griffiths) made, which was that the previous Government did not act. They seemingly did something only two months before the 2010 general election. By contrast, this Government have taken the trouble to go through a large consultation process, which has been acknowledged to be very popular. I know that many of my constituents have responded to it. It is important that the Government offer a high-quality response.
Chloe Smith
I defer to the hon. Gentleman, who chairs that Committee, and leave it to him to explain its actions to the House.
I want to focus first on the proposals set out in the consultation. It is right to put in place a system to stop pub companies abusing the beer tie. It is good to look at having an adjudicator who can help tied pubs. It is also good to have independently chosen guest beers, which helps to support connected industries and manufacturing across the UK.
In the time I have been a Member of this House, like every Member present this afternoon, I have become well aware of the situation facing pubs in my constituency. I could talk about the Bull at Hellesdon, an Enterprise inn, which is a good pub at the heart of the community. In fact, that was one of the first pieces of casework I took up as a new Member of Parliament. I could also talk about the Maid’s Head in Old Catton, which is also an Enterprise inn. It hosts an enormous charity fundraiser—a walk around the ring road in Norwich. The only other hon. Member who might have done that is my hon. Friend the Member for Norwich South (Simon Wright). It is that kind of activity that puts pubs at the heart of the community, and rightly so.
I also take my cue from my hon. Friend the Member for North West Norfolk (Mr Bellingham), who noted the role of the Campaign for Real Ale in supporting and campaigning for pubs. CAMRA runs the large Norwich beer festival, which in turn makes large charitable donations, most recently to the Norfolk and Norwich Association for the Blind. The Norwich Evening News is also running its strong Love Your Local campaign. By focusing on a pub a week, it does something very practical to help what can be quite a beleaguered trade.
I think we all acknowledge that pubs are facing tough times because many of their customers are facing tough times. There is a far broader debate to be had in that respect. We might look at many long and short-term economic factors, for example, but we would also do well to recognise the other things that our constituents talk to us about, such as the introduction of the smoking ban, which is commonly thought to have changed the pub trade quite a lot, and competition from supermarkets, which I will talk about later. I have always believed that good pubs can do good trade, regardless of some of those external conditions. I also want to reiterate the point that pubs are at the heart of the community.
Sir Greg Knight (East Yorkshire) (Con)
My hon. Friend is making some good points. Does she agree that pubs can also help themselves to improve trade by broadening the services they offer, for example by offering food and, importantly, free internet for customers?
Chloe Smith
My right hon. Friend is absolutely correct. That point will resonate up and down the land in urban, suburban and rural pubs and communities alike.
Neil Carmichael (Stroud) (Con)
I am grateful to my hon. Friend for giving me an opportunity to point out that the Red Lion in Arlingham would have been closed by a pubco but is still open and now owned by the community. That is a good example of communities taking charge of their destiny and that of their pubs.
Chloe Smith
I am grateful to my hon. Friend for pointing that out. I recently made the acquaintance of another landlord in his constituency who not only runs a good pub, but thinks that my hon. Friend is doing a good job as his local MP, which I think is very important.
The value that pubs can give to their communities has been quantified in various places. I want to mention a few figures which have a bearing on the debate. The industry is said to sustain 900,000 jobs nationally and each pub contributes £100,000 a year to its local economy. Crucially, about 30% of the industry is owned by the pub companies, and it is that segment that we are talking about. I support action to make that segment of the market fairer.
Simon Danczuk
The hon. Lady is making an important speech, but my point is about urgency. Twelve months ago, I raised concerns about the Hunters Rest in my constituency. Mary Spence, the landlady, said that because of the tie she was paying £500 a week over the odds, which equates to £26,000 a year. She threw in the towel in November. Does the hon. Lady agree that this shows the importance of the Government taking urgent action?
Chloe Smith
I have already said that I agree with the Government taking the action that they are correctly taking. The hon. Gentleman gives a solid example of one of the very human effects that we are talking about.
I want to note a couple of other ways in which the pub trade is being supported, including scrapping the beer duty escalator and a set of community rights. The community right to bid gives communities a fairer chance to bid to take over pubs, but there is an issue connected to this that I recently came across in my constituency. Residents were shocked to discover, at the very latest hour, that the Beehive in Sprowston had changed hands from regional brewery and pub company Greene King to the East of England Co-operative Society’s retail arm. I am the kind of MP who runs surgeries in pubs—I run a series called Politics in the Pub—and I am sad to report that I had never made it to the Beehive when this news broke. Now I may never have the chance to have a pint and some politics in the Beehive—unless I prefer a pint of milk, which is not necessarily the sort of thing I am thinking of.
On 6 January, the Co-op confirmed to the Norwich Evening News that it had exchanged contracts on the Beehive and would announce plans for a new community food store in the near future. Local residents then quickly organised and held public meetings, and local councillors and I met residents to go through the options for using the community right to bid. In this case, however, it was too late because information about the sale emerged at a very late stage. I have asked the Co-op to provide information about its plans so that it can engage with the community at an early stage. Understandably, the community is concerned not only about the closure and loss of a pub but the potential effect of a supermarket on other local businesses, as well as any intrusive aspects of the new premises that might arise from parking, lighting or similar things.
I know from experience that the Co-op’s retail arm is extremely keen to work with local communities, and I urge it to do so in this case so that the necessary issues can be properly addressed, despite the fact that planning permission is not required for a change of use from A4—which, as Members will know, is for pubs—to A1 for supermarkets. That feature of the planning system involves a very easy switch, which sometimes means that communities are not consulted on the concerns that can accrue when a pub closes.
I urge the Minister to look at this set of issues as it connects to pub companies. This is not only about the relationship between a tenant and their proprietor but the relationship of a pub to its community and the relationships that ought to be examined in the planning system—in other words, what citizens ought to be able to expect in a well-planned local area. These issues come down to wanting to keep the economy moving. I do not say that there should be stasis throughout the whole planning system, but there should be sufficient safeguards and community involvement in planning.
I support the Government’s amendment, because action has been taken to help pubs not only on the issues addressed in the consultation on an adjudicator and more, but in the field of community rights. That is very important, but, on behalf of my constituents, I am looking for the final element of fairness to enter into the debate.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
This is a debate that I never thought we would need to have again. Last year, we were given assurances that a statutory code would be introduced; a year later, there is still no sign of it. The motion reflects the sense of exasperation felt by Labour Members—and perhaps privately by many Government Members—about the lack of progress on this issue.
Toby Perkins
Does my hon. Friend share my fear that we will potentially be back here another year to have yet another debate? I am pencilling that into my diary.
Mr Bailey
Absolutely. The only debate I want to see again is on the proposed legislation when it comes forward —if it ever does. I would add to the sense of exasperation a sense of bafflement as to why that has not happened.
The work done by successive BIS Committees has had two characteristics: first, the overwhelming desire to get the industry into a position where it would regulate itself; and secondly, the need to ensure unanimity across all political parties on the measures to be proposed. Successive reports said what needed to be done, what progress—often very little—had been made, and what would happen to the industry if it did not regulate itself. It has been said in this debate—indeed, it is mentioned in the amendment—that the previous Government did not do anything, as if that is some sort of justification for this Government not doing something. In the conclusion to its 2010 report, the Committee, under the chairmanship of the hon. Member for Mid Worcestershire (Sir Peter Luff), said:
“The industry must be aware that this is its last opportunity for self-regulated reform. If it cannot deliver this time, then government intervention will be necessary. We do not advocate such intervention at this stage, but remain committed to a resolution to all the problems discussed in this Report and those of the 2004 and 2009 Reports. Should those problems persist beyond June 2011, we will not hesitate to recommend that legislation to provide statutory regulation be introduced.”
Significantly, it was never intended that there should be statutory regulation until all other procedures had been exhausted in 2011. The previous Government committed themselves to that course of action, as did the current Secretary of State when he came into office. Yet still, after all these years, we have not had statutory regulation despite the overwhelming body of evidence that clearly demonstrates that the industry was not prepared to regulate itself. I give credit to my colleague on the Committee, the hon. Member for Northampton South (Mr Binley), whom I think would have vigorously expounded similar views today but had an unavoidable commitment and was therefore unable to be here. I emphasise that successive Committees have tried to secure a consensus across the board on this.
Like other Members, I was delighted when the Secretary of State changed his position and agreed to have a Government consultation. That took place in the early part of last year, and the Government have had the results since June. Again, there is an increasing sense of exasperation as to why those results have not been published. All right, it was the Government’s own consultation, but as my right hon. Friend the Member for Torfaen (Paul Murphy) said, the Secretary of State has the people to analyse it, and there appears to be no coherent logic as to why it has been delayed for so long. When the consultation was published, the Committee was asked whether it would have a session looking at it, as though it were the Committee’s job to analyse it. We refused in somewhat robust manner.
I will give the Government credit for one thing—they are perhaps the one organisation to have made the British Beer and Pub Association’s speed of operation look positively dynamic. I can think of no reason whatever why they could not have introduced legislation soon after the consultation process was concluded. There was nothing dramatically different in the consultation from the evidence unearthed by Select Committees or the points made in debates in the Chamber. The Groceries Code Adjudicator Act 2013 could provide a model for that legislation. Although there might be different opinions on different recommendations in the Select Committee report, it would have been appropriate to put those recommendations in legislation and have a debate on them in the Chamber. The different opinions are not in themselves an excuse for legislation not having been brought forward.
I wish to emphasise the sense of embarrassment that I feel, as the Select Committee Chair, about the fact that all the work that has been done over the years still shows no tangible result. My sense of exasperation is reflected by tenants up and down the country, who want to know what is happening and why parliamentarians support the pubs in their constituencies in debate after debate but do not seem prepared to vote to bring forward legislation to do something about the situation. I know that some Government Members have been even more vigorous than I have in upholding the need for legislation to be introduced quickly. The public at large and pub tenants will be mystified as to why they are not prepared to back the Opposition motion today.
I cannot help but feel that the lack of progress demonstrates something more profound than just sympathy for publicans—tensions within the Government and a lack of political will to translate promises into legislative action. The result of that will be disillusionment among the public and the tenants who need reforms, and above all, disillusionment with Parliament as an institution, which has demonstrated that it cannot make its will prevail over the Government.
Damian Hinds (East Hampshire) (Con)
The hon. Member for Chesterfield (Toby Perkins) outlined effectively and persuasively the importance of pubs as valuable assets to this country. They are at the heart of our communities and a big part of being British. In East Hampshire we have great community hubs, from the Fox and Pelican at Grayshott to the White Hart at Holybourne. There are also a number of the beautiful country pubs that form part of our national image and attract people to visit this country, such as the Queens and the Selborne Arms, the Greyfriar at Jane Austen’s Chawton, the Harrow, the Trooper and the Pub With No Name. That great range of brilliant pubs is a mixture of managed houses, tenancies, leases and independent free houses.
Like many other areas, we have also suffered too many pub closures. Just in the past couple of years, in one town in my constituency, Alton, and its surroundings, we have lost the Gentleman Jim, the Railway Hotel, the Barley Mow, the Wey Bridge, the two pubs in Ropley—the Chequers and the Anchor—and, just recently, the only pub in the growing community of Four Marks, the Windmill. Like the pub that my hon. Friend the Member for Norwich North (Chloe Smith) mentioned, the Windmill is going to become a Co-operative retail store. Of course, a lot of other publicans are struggling to break even and make a decent living.
I welcome the Government’s support for the licensed trade, such as the scrapping of the beer duty escalator, the 1p of tax taken off a pint, the extension of small business rate relief and the community right to bid. It is worth remembering that the pub trade’s problems predate the beer duty escalator and exist in both tied houses and free houses. Top of the list is the declining propensity of men to visit a pub after work multiple times a week to drink reasonably large quantities of draught beer, which is a high gross margin product. The second, related, problem is the wide price gap between the on-trade and off-trade in alcohol sales, which has coincided with the arrival of affordable, decent quality new world wine. There are a whole range of other factors, many of which we would welcome in themselves but have had adverse consequences for the pub trade. I refer to things such as the smoking ban, radically different attitudes to drink-driving and changes in people’s living rooms, such as having big-screen TVs at home, not just at the pub. There is also intense price competition in food and leisure in general.
When I used to work for an integrated brewer—I worked for Greene King for a couple of years—the cost pressures that licensees used to talk about included the massive price of Sky, which my hon. Friend the Member for South West Bedfordshire (Andrew Selous) mentioned, the national minimum wage and the cost of products through the tie.
We could argue that pub owners take too much money from publicans, but to mention only the tie is to chase the wrong target. People have two key objections to it: the impact on product range, and the way the product is priced. On the first point, we must remember that the tie is not the same for every pub. For some, particularly food-led pubs, it excludes wine and spirits, for example, which can be bought from outside. For others, even a tied house, there may be provision for a guest beer or for what is sometimes called a “local hero”, which means that a pub owner in an area where there is one dominant beer brand might be allowed to have that brand, even though it is a direct competitor.
A lot of the focus has been on whether licensees have the right to buy in a guest ale of their choosing. The hon. Member for Chesterfield mentioned the 160,000 members of CAMRA, and a lot of other people are also real ale lovers. I am proud to count myself among their ranks. I am proud of real ale—it is a uniquely British product that is not found anywhere else in the world, and I am proud to bits that it is growing. It is a craft product, and we should support it. I would love the Triple fff brewery in Four Marks, in my constituency, to have more outlets for its beer, which people would enjoy drinking. A guest ale option is positive for the increase of the brewery industry. However, we must be clear that it is a red herring for the survival of most pubs. Real ale is a small category in most pubs, and four out of 10 do not stock it at all. The drinks that matter in most pubs are standard lager, bag-in-box Coke and the others that generate the bulk of revenue.
The second set of objections to the tie are about pricing, which goes to the heart of pubs’ profitability. Sometimes when we discuss the matter—it happened in the last debate in the House—we speak as though, if we could remove the tie and the inflated beer prices from the equation, everything else would stay the same. Of course, that is not what would happen at all. The target margin for pubs is set by starting with a target return. There is an asset on the books with a certain value, and it is believed that the shareholders and the market require a certain return to be demonstrated on it. That return is split between rent and margin, the latter sometimes being known in the trade as “wet rent” for that reason. If the return was all on rents, the rent would clearly be higher and pubs would be more operationally geared, with a higher fixed cost. Arguably, more businesses might fail.
Greg Mulholland
With respect, although my hon. Friend speaks from a position of knowledge, I think he is missing the point. The whole point of the benchmark level of the market rent-only option—the Select Committee’s solution—is to stop the double overcharging that currently happens. The large pub companies have skewed the traditional tie so that there is no longer a lower rent if there are higher beer prices. The benchmarking survey by the Association of Licensed Multiple Retailers shows that tied rents are higher, on average, than free-of-tie rents, which is an abuse of the tied model.
Damian Hinds
It is difficult to go into the maths in great detail in a forum such as this, but with respect, I do not see how we can make that comparison, because we are talking about different pubs in different places.
Toby Perkins
The hon. Gentleman is right to say that it is difficult to make such comparisons. That is precisely why we are making the case that the only way to get genuine fairness is to ensure that people know what is a fair market rent. We can then say, “You can take that or you can take an alternative. The choice is yours.” That is the only way we will get a genuinely fair deal.
Damian Hinds
I have a lot of sympathy with that view and it is legitimate. We must not forget, however, that the owner of the pub also has an interest in that business thriving, and it must be an arrangement both sides are happy with. In one sense, the tie is just a way of sharing risk. It is a way of having rent that goes up when business is good, and down when business goes down. If we want to complain about how much money pub owners take from licensees, that is perfectly reasonable, but it is misleading to speak only about the tie and to say that if that went, all those problems would disappear. I do not believe they would.
I believe the single most important thing for regulation is to ensure the availability of proper financial and legal advice for new licensees. That must include someone giving advice who is able to understand and challenge what the pub company puts forward. It is called FMT—fair maintainable trade—and involves an estimate of what the pub can make, on which the rent and target return is based. If the licensee enters that arrangement with their eyes fully open, it is a commercial decision. Pub companies tell us that things are getting better and that pre-entry training, consultation and so on has improved, but it is difficult to tell that from the outside—I know the Select Committee has had more opportunity to look at that in detail.
Overall, we want more of a partnership approach between the owner of the pub and the licensee, and in the industry at its best that is of course what happens. For a long time, pulling pints has not been enough to survive and thrive in the licence trade. Such businesses are increasingly food driven, and they are trying to attract a wider range of customers while having to compete against managed houses that have different cost structures. There can be big advantages to being part of a wider group, such as consultancy and guidance on the development of the food business and menus. For some, there are other streams of business such as accommodation and retail opportunities, or—critically—improving purchasing programmes to improve margins.
It may be that as the industry evolves, the old tied model becomes less appropriate as more business goes to food and other products, and a franchising-type model may become more appropriate. It is arguably easier to do that and provide a full range of services if there are managed houses, as well as tenancies or leases. It is not for the Government to force such things through, but competition authorities can ensure there is sufficient space in the marketplace for operators who would provide a different model to licensees. The other crucial thing the Government can do to ensure that pub companies are fully mentally invested in long-term pub operations, rather than having an asset register of real estate, is make it harder to convert to residential property. If someone knows that the way they will make money out of a certain asset is by trading it well as a pub or a place where people come together to eat and drink, their minds will be focused on doing that more and more.
Where communities want to take over a pub, but that does not work out with the pub company and so on, I would like the Government to review continually the way the community right to bid works. We have a number of such instances in my constituency, and there is a great team working on the Anchor in Ropley. People are giving up a lot of time and putting in their expertise. That seems quite hard on occasion, and I hope the Government will keep that under review to ensure the process is as simple as possible.
In conclusion, we should beware of solutions, such as removing the tie, that appear to solve a lot of problems. Let us think back to the beer orders, and those who thought it was a great idea at the time in terms of breaking the vertical integration hold of brewers on individual pubs. I wonder what some of those people think about that now.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
It comes almost as a surprise to me to speak in this debate. First, I am a member of the Methodist Church and we have a long tradition of not being very keen on drinking, although we have modernised a bit since those days. As I said in an intervention, I also own a pub as chairman of the John Clare Trust, because we bought the Exeter Arms in Helpston. It is temporarily closed while we finance what we call an omni-hub in the village, which will meet the needs of the local community and the overall educational purposes of the trust. A journalist said to me the other week, “You must be the only MP who owns both a church and a pub.” Funnily enough, the church in Norwood Green in Halifax, where we have an environmental body, has a strict codicil that states we cannot serve alcohol. It is an interesting world we live in.
May I remind the House of a bit of history? I support the motion today. I do not say that in a partisan way because there is so much agreement about the need for action. I shall support it not only because the Whips will tell me to, but because it is about time we had some action. I think there is a majority in this House for action on the situation of the many people in tied houses. When we took over the Exeter Arms, having negotiated a reasonable price with Enterprise Inns, there had been a succession of tenants who just could not make it work while having to pay premium prices for beer and everything else. They had to pay if they introduced new varieties of food and for all the gaming machines—I did not realise the tie could take a lot of that as well. Many people had found it very difficult to make a go of that pub, and they need a new and fair deal.
Sir Tony Cunningham (Workington) (Lab)
I do not want to miss the point because the whole essence of this debate is about fairness. We should always remember that word—fairness—because it has been absent for a very long time in that relationship.
Mr Sheerman
My hon. Friend is absolutely right and I was about to make that point. Let us look at the history. I have been in the House quite a long time and I remember what seemed to be a dramatic change when Lord Young of Graffham, then Secretary of State for Trade and Industry, cut up the industry, and the link between brewers that cared about their pubs and the pub estate was broken. That was done perhaps with the best intentions, but the unintended consequence was that people who had a tradition of brewing and who loved beer and their pub outlets were cut out of that relationship. The Conservative Government at that time—I am not being too rancorous about this—created unintended consequences that severely damaged brewing and the pubs of this country.
Greg Mulholland
The hon. Gentleman is right to say that that was an unintended consequence of the change, but organisations—particularly CAMRA at the time—said that there had to be a limit for all companies, including stand-alone pub companies, but that was not included because of industry lobbying. That led to the disaster that created the stand-alone pubcos and it is why the Government must now intervene to put that right.
Mr Sheerman
I agree, but we cannot get away from the fact that, as I see it, the whole brewing industry and the pub estates have been taken over by money men and women who are interested mainly in the return they can get on the estate and do not have a real love of the sector, brewing, beer and the leisure industry generally. I get the impression that the people who own most of the pubs in our country are not those who love the sector, and they are out to screw as much money and profit from it as they can. Some of them, because they made unwise takeover investments at a particular time, have become very ruthless indeed, although I shall not dwell on that.
The hon. Member for East Hampshire (Damian Hinds) made a very good speech, but one thing I feel strongly about as a long-term campaigner against smoking is the myth that banning smoking in pubs damaged trade. I do not think it did. I think it opened pubs to a broader audience of people who wanted to go out but not to finish the evening stinking of tobacco. That is the only thing I disagree with the hon. Gentleman about.
Hon. Members are sometimes cosy about the pub trade and defend it. I love the pubs in my constituency—I do not go to all of them, but there are some wonderful ones. We have some fine history, too, like the Luddite trail in Huddersfield. At the time of the Luddites, people could not belong to a political society or trade union. The only place they could meet—it was a secret society—was in pubs. People still go to many of the pubs that the Luddites conspired in, which is a lovely bit of history. The Exeter Arms in Helpston is the pub where John Clare played the fiddle—he was taught by Gypsies—and sang with his father, who was also a farm labourer. That is the wonderful history of Helpston. John Clare also worked as the pot man at the Blue Bell Inn to make ends meet.
There is history, but the industry, like any other, must be up to date. Many people stopped going to pubs because they did not keep up to date. The hon. Member for East Hampshire mentioned men going home from work and drinking a lot of beer every night. That has gone. The pub trade should keep up by providing good food and a good selection of drinks—I drink wine, but not much beer. Pubs should have well trained people serving. The skills training in the pub trade is very poor. I care very much about high-quality skills in every sector, but there is too little high-quality training of pub staff. I have found that there is very little training in pub management. Many who have a go at running a pub have never been trained to manage anything, which is a recipe for disaster. We need an industry with training at its core and with 21st century skills.
We also need a diverse community of pubs. One of the first social enterprises I started as a young councillor was a folk club for young people in a Welsh village. Pubs playing the relevant music for the area are an amazing draw. People go to pubs to have fun and a good time. If they cannot have fun and a good time in a pub, what is its purpose? A good time means different things for different parts of the community. The pubs mentioned by the hon. Member for East Hampshire reminded me of Roger Davies, a well known singer-songwriter from Brighouse in West Yorkshire, who strung together the names of all the pubs in his area in a glorious song.
Pubs have to upgrade. Back in the day, someone went into a pub in Rochdale after reading a sign saying, “Pie, pint and a friendly word.” He gets a pint, which is not very good, and his pie. He says to the landlord, “Where’s the friendly word?” The landlord leans in and says, “Don’t eat the pie.” I am sorry that my hon. Friend the Member for Rochdale (Simon Danczuk) was not in the Chamber to hear that, because that is too often the image of the pub. I love CAMRA and my local CAMRA organisation, but it sometimes puts people off. There is sometimes a stand-off in CAMRA pubs. There are only men, many wearing beards and dressed in a particular way. They sometimes make going to the pub a little bit too much of a minority leisure activity, which can be damaging.
The future of pubs is at the heart of the community, doing all sorts of things they have never done before. They could have crowdfunding centres, educational facilities for elderly and young people, and a range of activities, so that they are a hub in a broader sense than anyone has managed to achieve so far. I chair the Westminster forum on crowdfunding. Crowdfunding through CrowdPatch can turn a community around. Where better for such activity than the pub?
I commend the Opposition motion only because I want action. However, I want the trade and the pub industry to come up to date and do exciting and innovative things.
Greg Mulholland (Leeds North West) (LD)
I cannot say that it is a pleasure to take part in the debate. I echo the comments made by the hon. Member for West Bromwich West (Mr Bailey), the Chair of the Business, Innovation and Skills Committee. I pay tribute to him, to his predecessor, the hon. Member for Mid Worcestershire (Sir Peter Luff), and to his Committee for their excellent work. It is a stunning example of a Select Committee. Like the hon. Member for West Bromwich West, I would rather we were not having another debate on pub companies. If we have to have one, I would rather that we were voting on Government proposals that do what the Committee has said the Government should do since 2011.
We will have to have at least one more debate on pub companies—I have shared that with the hon. Member for Chesterfield (Toby Perkins). When we have the response, we will need to bring it before the House and show that the majority of hon. Members support not only action but the only sensible and obvious action, namely the Committee’s suggestion of a market rent only option.
It is important to remember the history of pub companies. Let us be clear that we are debating pubcos because of the concerted lobbying of a number of organisations. Last year, I was pleased to bring those organisations together under the banner of the Fair Deal for Your Local Campaign. Those 10 organisations—the Federation of Small Businesses, the Forum of Private Business, the GMB, the Guild of Master Victuallers, Fair Pint, the Pubs Advisory Service, Justice for Licensees, Licensees Supporting Licensees, CAMRA and Licensees Unite—have a membership of more than 2 million people. The campaign is now supported by no fewer than 206 MPs on both sides of the House. It is supported by the whole Opposition, so there is a clear majority for action.
I pay tribute to one MP who was a supporter of the Fair Deal for Your Local Campaign—the wonderful Member for Wythenshawe and Sale East, Paul Goggins, who is sadly no longer with us. I thank Paul for his support, which was yet another example of his commitment to social justice and a reform that we need if we are to have a fairer society.
The Department for Business, Innovation and Skills decided in 2011 not to do what we believed it would do. The reality is that we were outdone by some rather dodgy, behind-the-scenes lobbying. That is precisely why we set up the Fair Deal for Your Local Campaign—to ensure that, with the might of the 10 organisations behind us, we could tackle that lobbying head-on, which is precisely what we have done. It was the freedom of information request submitted by the all-party parliamentary save the pub group that outed the lobbying and led to the first debate and the unanimous vote for action.
To be fair to the Department for Business, Innovation and Skills and the Government, the motion in January 2012 said that we must have a consultation in autumn 2012. It appeared that we would not have one, but it happened. The consultation showed what we knew it would show: that the problems are as bad as ever and that self-regulation has failed. The response was the debate a year ago and the announcement of the consultation.
As someone who has campaigned on pub companies for something like six or seven years, I of course share hon. Members’ frustration. I am more frustrated than anyone and wish that the Government had responded by now, but they have not. The only reason that I shall support the amendment is that, as the Chair of the Business, Innovation and Skills Committee has said, there has been last chance after last chance for the industry, so the Government should have a last chance to act. This is that last chance. I assure the Chair of the Committee and the House that if the Government do not announce swiftly that they will back the Committee’s solution, and in a time frame that allows for legislation, they can be assured that I will lead the criticism most loudly, because it is so long overdue. That is where we are and I hope we will get a decision as soon as possible. What we are seeing from the rather desperate lobbying by industry sources are the death throes of an unjustifiable and unregulated business model, and the last sorry chapter in one of the worst and most shameful episodes of corporate abuse and financial mismanagement that the UK corporate sector has ever seen.
The Secretary of State was right to say that the issue is not the existence of a tied model, and just to correct my hon. Friend the Member for East Hampshire (Damian Hinds), it is not about the abolition of the tie. The Fair Deal for Your Local Campaign is very clear that it is about stopping abuse of the tie. That abuse is endemic because of reckless financial mismanagement, the acquisitions spree and the overvaluation scam that led to huge debts that are the reason why these companies are taking so much of the profit—often 75% and even 100% of pub profits—and stopping tenants and lessees making a living.
This is not about emotion or roses around the door, but cold, hard economics. While average tied rents are higher than free-of-tie rents—it should be the other way around, because the only justification for the tie is that if people agree to pay more for their beer they should pay a lower rent—beer prices go up and up and up, and the increases are above inflation every year.
I am delighted to see the Secretary of State back in his place. Does he know that Punch Taverns, which was the largest pub company, made an astonishing £2.271 billion in 10 years from selling on beer, simply by acting as a middle man, driving the price at the brewery down and selling on to tenants? I say to all my Conservative coalition partners—many are hugely supportive of this campaign, standing alongside the Federation of Small Business and the Forum of Private Business, and understand that this is about freeing up small businesses and giving them a chance—that this is about bringing in market forces. I say to those who are confused that this is not a market place that it working; it is an abuse of capitalism and a twisting of the market.
Toby Perkins
I thank the hon. Gentleman for giving way, though he has moved on slightly from the point I wanted to intervene on. On whether what we are now seeing are the death throes of a shameful part of the history of our corporate world, does he share my astonishment that the big pub companies are making the case that if their customers have the choice not to use them, they will not use them, and that that will cause them to collapse? Can he think of any other industry that would think it was credible to say, “The only reason our customers use us is because they have to, and if they don’t have to, we will collapse”?
Greg Mulholland
As the hon. Gentleman and, I think, many right hon. and hon. Members know, there has been an extraordinary campaign of misinformation on behalf of the big pub companies by their lobbyists the British Beer and Pub Association. I am sorry to say that it includes false statements that have been given even to the Select Committee: false statements about the reality of pub closure figures, and lots of unsubstantiated nonsense about how giving the right to a fair rent—that is all we are talking about; the right to choose whether to have a rent-only agreement—will somehow close breweries, create all sorts of disasters and close pubs. That must be stamped on. I urge all Members to read “Setting the Record Straight” by the Fair Deal for Your Local Campaign, which puts those myths to bed.
Sir Andrew Stunell (Hazel Grove) (LD)
I give my hon. Friend every encouragement to carry on the excellent work he has been doing over the years in Parliament. Does he agree that Punch Taverns, in particular, has very pernicious business practices? Just this weekend, I met the tenant of the Bulls Head in High Lane, who is a victim of its partner franchise tenancy. He has been driven out of business in less than nine months and tells me that he is one of three tenants of Punch Tavern inns who have been driven out of business in the past nine months through this pernicious sucking of capital and revenue out of the business.
Greg Mulholland
There are many, many examples from around the country that show just that. I have a word of caution for Business, Innovation and Skills Ministers, as it appears that some companies are using franchising to seek to circumvent the code, and that must be dealt with.
We have witnessed an extraordinary campaign of misinformation, but the report from the all-party save the pub group, to which the Secretary of State referred, showed the reality of pub closures. The CGA Strategy figures, often misquoted and misused in a disgraceful way, show clearly that between December 2004 and March 2013 the number of non-managed pubs—that is, tenanted and leased and mostly tied pubs—fell by 5,117, compared with a fall of only 2,131 free trade pubs in the same period. It is extraordinary for the BBPA to have gone around peddling the myth to the Select Committee—it fell for it previously, but it now realises that it was duped—when its own figures over 10 years showed that the number of non-managed, leased and tenanted pubs decreased by more than 8,000, while the free trade sector expanded by 1,600. No wonder it was keeping those figures rather quiet and relying on a distortion of others.
On pub disposals, Enterprise Inns and Punch Taverns, the two largest pub companies, disposed of more than 5,000 pubs—a third of their pubs—in just four years, between 2008 and 2012. I say to the Secretary of State that pub closures, both temporary and permanent, are being caused in huge number because of the inequity of the lease-tied pubco model. The argument, based on flawed conclusions, that some reports and analysts make is that there is no competition issue or consumer detriment. How can it be argued that there is no consumer detriment when in many cases consumers are having their pubs unnecessarily closed because of the abuse of the tie and the reckless mismanagement by such companies?
The solution is clear and it is backed by the Select Committee, the Fair Deal For Your Local campaign and 206 MPs. I say to my hon. Friends on the Conservative Benches that it is a simple market-based solution that would bring back not just fairness but competition into what has become an unequal and uncompetitive relationship. Do not take my word for it: take the word of the former community pubs Minister, the first appointed by the Prime Minister, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), who said:
“A market rent only option offers the only mechanism that can transform the fortunes of thousands of landlords across the country. It is a common sense market-based solution.”
The Prime Minister himself knows these problems all too well through the experience of The Chequers Inn in Witney, where the Enterprise Inns lessee had to move after a long dispute and lack of support. One of the most extraordinary things in that dispute was not the overcharging, which is endemic in the Enterprise Inns business model, or that at the same time as pubs were shutting, the boss Ted Tuppen and the new boss Simon Townsend paid themselves vast salaries and hundreds and thousands of pounds in bonuses, but that The Chequers Inn licensee, Simon Moore, could not deal directly with the brewery whose yard was at the back of his pub. I cannot believe that Conservatives can stand that business arrangement any more than the Liberal Democrats or Labour Members, and I welcome the support of so many MPs, including my hon. Friend the Member for Bromley and Chislehurst, and the chair of the all-party save the pub group, my hon. Friend the Member for Northampton South (Mr Binley), who has campaigned long and hard on this issue.
Let us look at the research and the reality, not the nonsense being peddled. The extraordinary piece of work by London Economics is frankly so flawed that it is a disgrace it was ever commissioned. I have put in a freedom of information request to find out the truth. That research concluded that if we stopped the large pub companies taking too much from pub profits, they would, according to the pub companies, be less viable. It concluded that that would lead to pub closures, when clearly the opposite is the case. At the end of the research we see the worrying phrase:
“London Economics would like to thank the pub companies who supplied us with confidential data”—
more behind-closed-doors thinking. We want to see those data and the brief given to it, because its conclusions are utterly absurd.
In reality, as seen in research by the Federation of Small Businesses, if we had a market rent only option, not only would 79% of lessees take it, but people would take on more staff and invest in their pubs, and confidence would increase—98% of tenants said they would have more confidence in the future of their business. Moreover, the projections show that nearly £80 billion would be pumped into the UK economy, rather than go abroad to pay off foreign creditors, the people currently—
Madam Deputy Speaker (Dawn Primarolo)
Order. I gently remind the hon. Gentleman that I asked Members to speak for 10 minutes so that we would not need a time limit and everybody could get in. He has now been speaking for 17 minutes, and other Members might not get in as a consequence. I would be grateful if he could reflect on that and perhaps draw his remarks to a conclusion.
Greg Mulholland
I apologise, Madam Deputy Speaker. I allowed my enthusiasm to get the better of me.
To conclude, these are the death throes of this model, but the Government must act to save hundreds of pubs. Punch Taverns is teetering on the brink. It is in discussion with bondholders that might anyway lead to its demise. Luckily its tenants and lessees have their rights, but they also need the right to a fair share of their pub profits. It is time we had a decision. I welcome the chance to give the Government the necessary nudge—that is what this is about—but let us come back and discuss this again when we get their response. They must now listen and their response must be the right one.
Susan Elan Jones (Clwyd South) (Lab)
It is a great pleasure to follow the hon. Member for Leeds North West (Greg Mulholland), whom I know has a long track record of campaigning on this issue.
I am sorry that the playwright Samuel Beckett is no longer with us, because there is more than a shade of an existential play to this one: in act one, we all eventually come to some sort of conclusion, but in act two, it all replays, only in this case there are more than two acts and nothing changes, and on and on we seem to have gone.
Chloe Smith
The hon. Lady should come to the Sewell Barn theatre in Norwich. It is currently playing much better works than those.
Susan Elan Jones
I fear I might also have to go to a Welsh pub to hear my hon. Friend the Member for Huddersfield (Mr Sheerman) teach us folk singing, but I would be delighted to come to the hon. Lady’s constituency as well.
We were last here debating this matter on 9 January last year, when many of us genuinely felt reassured by the Government’s promises to introduce a statutory code and independent adjudicator, which we all concluded were needed, and I am extremely heartened that today, having doggedly pursued this issue, my hon. Friend the shadow Minister has offered the possibility of a proper cross-party agreement in order to get the Bill on the statute book. The Secretary of State said earlier that it all depended on the legislative timetable, but we know the paucity of business on that timetable. It would be easy for the Bill to pass, and I hope it does.
It was clear that an industry regulator was needed when we debated this last year and that the Government had to take action, and so they still do. We are not waiting for Godot; we are waiting for Government. One year on, and a good deal longer since the House first spoke out, many of us are disappointed that no progress or change has been made. Of course, any regulator must be created carefully, but the Government’s sluggish action is nothing short of a tragedy in many communities. As Members will know, the Government’s response to their own consultation on pub company reform is now four months overdue.
Society changes fast, and it is more than 20 years since the former Prime Minister John Major evoked those oh so quintessentially British images that not even UKIP councillors could complain about: of cricket, warm beer, and spinsters cycling—preferably having kept to soft drinks before doing so. The pub has been in decline for many different reasons, not least the revolting practice of what I believe is called pre-loading, which was mentioned earlier, but it is not about which Government did what. Figures from organisations such as the Campaign for Real Ale demonstrate the scale and pace of the decline, in a situation where we could effect positive change. With 26 pubs closing every week, a few hundred must have closed in the four months in which we have been waiting for the consultation on pub company reform. That is deeply concerning.
I am concerned about why the Government have failed to act. As Members will know, if a Bill is to be introduced before the general election, the Government must put it in this Queen’s Speech. With every month of stalling, it becomes less and less likely that a Bill will be passed this Parliament. We are losing hundreds of pubs a year, which adds up to hundreds of businesses and job losses. With hard-working families already struggling to makes ends meet, that will only add to the melting pot being created within our local communities. By the Government’s own admission this time last year, our local pubs are struggling. We know that. The Secretary of State for Business, Innovation and Skills was correct when he said that these small businesses were under a great deal of pressure.
In my own constituency, I am delighted to have seen creditable examples of communities coming together to fight for change, but often that has happened in opposition to the tied system, not because of it. I have been hugely impressed by a group from the village of Minera. Faced with a pub that had closed, local people came together, raised the money and reopened a much-loved pub that is now a welcoming hub within that beautiful mountainous community. Tyn y Capel pub is an excellent example of a truly community-owned and run pub. Local people have bought shares and are managing the enterprise, but financially, for all their success in the community, it is touch and go. It is not possible to run the pub full time; still less is it possible to have full-time paid staff—much of the time, it is staffed by volunteers, with only a temporary residue of paid staff.
We need more Tyn y Capels, but we need an environment in which pubs can survive. Thousands of pubs have closed in the last four years, and hundreds more are being sold every year, and with each closure, a family, an individual or a community lose their business, livelihood or a vital connection to their community.
Bob Stewart (Beckenham) (Con)
Pubcos seem to be cutting off their nose to spite their face. I just do not understand. If they charge too much for rent and beer, their tenants will go out of business and it will not work. The only way for pubcos to survive is if they reduce their prices so that more pubs survive. It makes sense. Even without legislation, that is good economics and good business. Why are they not doing that?
Susan Elan Jones
I agree with the hon. Gentleman. For far too long, what we have seen from pubcos is a ridiculous example of monopolistic practices, which this House and the Government need to deal with.
Even those pubs that are staying open face an appalling situation, with tied landlords often paid risibly low salaries. That is why it is vital that the Government act and stop delaying on a promise that they made this time last year—and, I think, probably this time the year before. This is not just about beer drinkers facing higher prices and poorer choice, or even about people losing their local; it is about fairness for current pub owners and future jobs in our communities. The Government made us a promise. Indeed, some of us can remember that before the Secretary of State became a Minister, he was often referred to—sometimes affectionately, sometimes not—as Saint Vince. Today Saint Vince has a chance to redeem himself, for it is high time that he and the Government delivered on the promise they made and took some much needed action.
Mr Laurence Robertson (Tewkesbury) (Con)
Let me declare a non-declarable interest, as it were. My sister, along with her husband, runs the local pub, The Village Inn, in Twyning, the village I live in, so although I do not have absolutely first-hand experience of the pub trade, I have what must pass as a close interest.
I echo what has been said about the value of pubs to communities. They are not only places where people drink; they are places where they eat and meet. Many golf societies, darts clubs and pool tournaments are hosted by pubs, and they are of great value to local communities in rural areas especially. Pubs also raise a lot of money for charities. Just this Saturday gone, I had the honour of presenting three cheques totalling almost £4,000 to local charities, and that picture is replicated across the country.
However, we have concerns. We are seeing many pubs closing, as has been said, and many landlords getting by on very little money. Their profits have been squeezed by the business model under which many of them are operating. There are no easy answers to the problem. As I said in an intervention, I held an Adjournment debate on this issue in the last Parliament, during which there were other such debates. The then Government were accused of not responding to a report that came out in that Parliament. I do not seek to make a party political point about that; I merely suggest that it is fairly unusual for the House to be almost in total agreement when discussing a problem, as it is today, yet for us all to be struggling to come up with a solution that will actually work.
As has been mentioned, the idea was tried with the beer orders in 1989, when breweries were barred from holding more than a certain number of pubs. That gave birth to the pubcos that we now see, which then bought pubs and other properties at high prices. As has been rightly said, they are now trying to recoup that money, in some cases quite desperately.
Andrew Griffiths
I completely concur with my hon. Friend’s point. He mentions the history of this. Would he be surprised to learn that the number of pubs owned by pubcos doubled under the last Government?
Mr Robertson
I am not at all surprised to hear that. I do not know the exact figure, but I do know that that is what has given rise to the problem, to the extent that it is one.
I recognise that there is a problem, and I want us to move on as quickly as we can, to help hard-working people who are keeping pubs going at the centre of communities. There are problems—I want to stress that point—but I want us to come up with a lasting solution that will not make matters worse. There are some benefits to the existing situation—I will come to the weaknesses in a minute. For example, a pubco can allow people who do not have a great deal of capital to enter the trade. They might be unable to afford to spend £300,000, £400,000 or £500,000 on buying a pub outright or to borrow that money. They also get their accommodation basically covered—certainly in most cases—while they run the pub, which gives them some security.
I do not recommend the tie at all, but I am concerned about what would happen to the rent if there were no tie. I am not speaking against reassessing the rent against a market level, but if we do that, what do we compare it with? If we are looking beyond pubs, we might look to McDonald’s, for example, or other franchise organisations. Is that a direct comparison? I am not quite sure how the proposal would work in detail—and of course, the devil is always in the detail. What about the repairing side of the lease? Will people with a fixed market rent be required to do more repairing of the fabric of the building than they are now? I am not throwing those questions out as stumbling blocks or trying to cause a problem, but they need answering.
Toby Perkins
I am happy to help the hon. Gentleman on that. The valuation would be done with transparency against the performance of other pubs. We need much greater transparency in the industry. Under the specific proposals that we have made today, the publican would be able to decide, knowing what a fair market rent was, whether they wanted to throw their lot in with the pub company, on the offer being made, or to opt out and buy their beer from wherever they chose. I hope that has answered his questions.
Mr Robertson
Not exactly, no, because how do we determine what the market rent level is? Is it the level for those with a tie or those without a tie? What about a repairing lease or a non-repairing lease? These are all details that need filling out, but I am not aware that they have been properly addressed. I want to deal with them and to make progress, but I am not sure we are there yet.
Greg Mulholland
The hon. Gentleman will be glad to know that I can help him. BIS Ministers have a copy of the definition of a market rent only option, which sets out how it would work and when it would be triggered. In essence, it is about simply paying a rent, which would be independently assessed according to statutory guidelines, and then being able to buy everything directly from the market. He seems to be making a mistaken comparison. The pubco tied leases are generally “fully repairing and insuring”. One of the scandals was when, as part of a tied lease, all the responsibility for that was shifted. A market rent only option is exactly what I have set out, and I will send that definition to him.
Mr Robertson
I am grateful to the hon. Gentleman; perhaps I could now move on to how rents are assessed. As has been said, quite often they are assessed not on the turnover of a pub, but on the potential turnover, which takes in things such as food and non-tied products. There is therefore an unfairness in the way that rents are assessed now. If we can move to a better system, I will certainly support that.
As has been said, there is also the inflated cost of tied products. For example, certain pubcos will charge £130.70 for a keg of Carling when it can quite easily be bought—we have looked at these figures—for £95. That is a huge difference, which squeezes the profits of the landlord and makes the beer more expensive for consumers. To give another example, Stowford is sold for £112.70 when it can be sourced for £79.99. Those are just two examples; I could go on and on if I had the time. I think hon. Members realise that this is a problem.
My hon. Friend the Member for East Hampshire (Damian Hinds) and my right hon. Friend the Secretary of State both mentioned this, but this debate is not just about the rent and the tie. We make a huge mistake if we believe that. We can look at those aspects at the beginning of a contract taken out with a pubco, but the relationship goes on from there, and sometimes it is the behaviour of the pubcos that causes the problems. For example, pubcos have the power to install fixtures and fittings and charge an exorbitant amount to the landlord, but he will not get anything back for them. Basically, the fixtures and fittings rule, which has been in existence for a long time, is a con, I am afraid. I thought carefully about whether I should use that word, but I think that rule is a con. It is an additional rent that people have to pay, which again squeezes the profits.
When people go into a pub owned by a pubco, they often have to go on expensive courses run by that pubco, for which it can charge exorbitant amounts. The cost of carrying out electricity checks, for example, has doubled in one year at the local pub I mentioned. It is the same pub, so why has the cost doubled? These are the sort of extraordinary charges that pubcos sometimes make in the course of running their ordinary business.
Extraordinary decisions are sometimes taken. The local pub I mentioned needed about £100,000 of work carried out, but the electrics and the roof were not completed when that work was done. There seemed to be an obsession with putting up new wallpaper, which was not necessary and not at all important. The work needed to be done over a six-week period, yet the period covering the jubilee week of last year was suggested. That is unbelievable—the busiest week of the busiest year in memory was chosen, and when the landlord refused to have the work done then and asked why it could not be done in January, there was a startled reaction.
I am providing examples to show that it is not just about the rent or the tie; it is about the behaviour of the pubcos as they go through the period of the agreement. I do not know how best to assess and tackle the problem, which is as important as other issues discussed today.
I have had my 10 minutes. I would have liked to talk about more issues, but in summary, I believe it is important to be careful to get this matter right. I think we need to take a little longer—I suggest not years, but months. Sometimes Government interventions can make things worse; sometimes Governments can be the problem rather than the solution. As I said at the outset, I believe that there is a problem and that it needs fixing.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is interesting for me to follow the hon. Member for Tewkesbury (Mr Robertson), who broadened the debate, yet also provided some technical detail. I am sure that both Front-Bench teams will be interested to consider what he said. There has been broad agreement on this issue. What I think frustrates publicans and people who use pubs the most is the fact that, despite that broad agreement, nothing seems to be happening.
The Secretary of State, who is not in his place, listed all manner of surveys, while my hon. Friend the Member for West Bromwich West (Mr Bailey) talked about the detailed work done by the BIS Select Committee over a number of years. Apart from the hon. Member for Leeds North West (Greg Mulholland), very few Members have that level of detailed knowledge of the history and nature of the problem. The House is privileged to have both those Members contributing to the debate.
Pubs are struggling. As we have heard, many have diversified and are successfully running restaurants, for example. I called into a pub somewhere off the A303 and found that an opera evening was going on, apparently with great success. This and other specialist events are all designed to bring the punters into the pub, and provide a good all-round pub experience. Of course, when pubs are well run—and most are—they provide an opportunity for people to drink responsibly. Some Members touched on concerns about alcohol abuse, with some people just boozing at home. We should encourage people to go and drink sensibly in a pub with a responsible landlord, and we want a thriving network of pubs around the country.
Members have voiced concerns about the level of advice and training of the people who work in and run pubs. The hon. Member for East Hampshire (Damian Hinds) made a good point about that, and it is worth looking at as part of the wider process of change.
I find it extraordinary that the Government and the industry have failed to act on the popular demand for change. The case made by the Fair Deal for Your Local Campaign, the Campaign for Real Ale and its members, the Federation of Small Businesses, the GMB and others is an extremely sound one. My hon. Friend the Member for Chesterfield (Toby Perkins) cited the outcome of consultations, returning resounding support for change, with 96% in favour of the main question and 92% in favour of independent rent reviews. From my experience, Governments seldom issue consultations without having a ballpark idea of the answers they are likely to get. I therefore find it almost inexplicable that, despite receiving full and rounded responses on the subject, the Government are still prevaricating. It is extremely disappointing.
We have some fantastic pubs in Plymouth and the south-west, but in other parts of the country, pubs are struggling and closing. We had some recent closures in Plymouth. My local pub, The Ferry House Inn, is diversifying. It serves fabulous food, and it is surviving, which is great. Other publicans across the city, however, are earning little more than the minimum wage. They sometimes work 364 or 365 days a year, and I think it takes a special type of person to take on the challenge of running a pub. The hon. Member for Leeds North West made it very clear that the tie is a distorting influence, in that tenants can no longer get lower rent in return for higher beer prices.
Andrew Griffiths
The hon. Lady says that the tie is distorting. I point her to the Office of Fair Trading investigation, which clearly said that the tie does not distort and that it is not anti-competitive in any way.
Alison Seabeck
The hon. Gentleman raises an interesting point, and it would be interesting to hear what the Secretary of State says in response to that finding, which, to be honest, many Members find rather odd.
My hon. Friend the Member for Chesterfield highlighted other areas of business where there is a relationship similar to the one that exists between the pubs and the companies, but where things are much more open and fairer. Clearly, we need to get pubs put on to that type of footing. This motion encourages a move away from the current position. All hon. Members who enjoy visiting their local pub and drinking a good ale or beer should think carefully and support the motion.
With pubs struggling for a range of different reasons, we need to do something about it. We need to introduce independent rent reviews to stop this double rent charging, to put in place the mandatory free-of-tie option and to set up an independent adjudicator, which would make a massive difference. The Government keep telling us that they are not kicking this issue into the long grass—I have lost count of the number of times that has been said—and that everything is being handled in a timely manner. Timely for whom? The Government should tell that to the 26 pubs that are about to close. They are not acting in a timely fashion. How many pubs will have to go to the wall before we finally get legislation? Let us face it: at the moment, the legislative programme is virtually non-existent, and there is no excuse for the Government not to bring legislation forward. I urge the Secretary of State to get his finger out and do something about it.
Caroline Nokes (Romsey and Southampton North) (Con)
I shall keep my comments as brief as possible because the problems with pub companies have been well rehearsed this afternoon. I would like to thank the hon. Member for Chesterfield (Toby Perkins) for mentioning the Abbots Mitre in Chilbolton; I can reassure him that the pub is still open and doing business. In that instance, however, there have been significant problems with the tie. That caused difficulties for the local community, which then sought to establish a community buy-out to make sure that their much-loved local is still open.
There are numerous examples in Romsey and Southampton North of previously successful and popular pubs shutting their doors. Some of the closures have been temporary. I am pleased that the Hunters inn in Romsey, for example, has reopened and is doing well. I echo the hon. Member for Plymouth, Moor View (Alison Seabeck) in saying that it takes a very special type of person to make a success of running a pub. The Hunters inn is a good example because the landlord there is also the landlord of two other pubs in the immediate Romsey area. He has certainly worked hard with pub companies to make sure that he can make a go of it. I am sure that it is partly attributable to his strong negotiation skills when it comes to arranging and agreeing leases.
However, this afternoon I want to focus on a slightly less happy example: the Stoneham Arms in Bassett, which closed in the middle of last year. I fear that what I am about to say is almost inevitable: the pub was owned by Enterprise Inns and is due to be converted to a Co-op store, although there is already one just a few doors away. I have no doubt that there is a sound business model to add to the existing retail offer in Bassett Green road, because otherwise the Co-op would not be seeking to do that, but the Stoneham Arms as a pub provided a meeting place for the community, and there are precious few such facilities left in Bassett. We often talk about the need for more community cohesion, but pubs can and do provide ideal meeting places.
I know that pub companies often cite a lack of interest on the part of potential future tenants as one of the reasons why they are obliged to consider alternative uses. Enterprise Inns informed me that the Stoneham Arms had been marketed on extremely competitive terms in an attempt to find a new publican, and that, in its words,
“not one serious enquiry was received to operate the premises as a public house”.
However, we cannot know how competitive those terms were, or, indeed, what other bars there were to people seeking to run the premises as a pub. Nor can I judge how significantly the beer tie acted as a deterrent to potential publicans, but I am convinced it played a part. The tie, the nervousness with which publicans regard possible abuses of it, and the general uncertainty that exists in the industry as a whole have come together to present a very bleak picture.
As we have heard repeatedly this afternoon, publicans just want to be able to earn a decent income—and must work incredibly hard to do so—and I believe that regulation is necessary to make that a possibility. Those in the trade seek certainty, fairness and reassurance that the Government are on their side, to ensure that they can run their business models.
Time is of the essence. As we have heard, 26 pubs are closing each week, and the Stoneham Arms is just the latest in a long list of pubs in my constituency that have either been lost or come under serious threat. The Woodman, also in Bassett, is now a Tesco Express, and in the villages of my constituency many pubs have been boarded up. I do not pretend that that is just because of pub companies and beer ties. Indeed, a pub in my own road is currently being marketed, and as far I know it did not have a contract with a pub company. However, we know from CAMRA that the rate of closures is increasing, and that many in the trade are looking to the future and considering their positions very carefully.
I realise that the Minister has heard a great many exhortations about timely action today. I welcome the amendment and the fact that it is supported by the hon. Member for Leeds North West (Greg Mulholland), whom I have always regarded as something of an expert on this issue. As he has said, it has and deserves cross-party support. We have heard from the Secretary of State that statutory regulation is needed, and there is agreement on that among Members on both sides of the House, but it is vital that when that is done it is done well, so that it works for the whole of the licensed trade and, indeed, its customers.
Andrew Griffiths (Burton) (Con)
Thank you, Madam Deputy Speaker, for allowing me to take part in this important debate. I have been struggling to juggle the task of opening a new business in my constituency with my membership of the Care Bill Committee, so I am grateful to you for giving me the opportunity to speak—which I do as the Member of Parliament for Burton, which is the home of brewing and of two important pub companies.
Given that I am the last Back-Bench speaker in the debate, it is unfortunate that it should fall to me to represent the voice of doom, but I must urge the House to think about the unintended consequences of what it calls for today. I listened intently to the very reasoned speech of my hon. Friend the Member for Tewkesbury (Mr Robertson), who uttered those words that strike fear into anyone who has been involved in the brewing and pub industry over the years: the Beer Orders. This is the single biggest factor that any Minister considering legislating in this area should consider. It is because of the Beer Orders and because of ill-thought-out legislation that we find ourselves in our present position, and I urge the House not to repeat those mistakes.
All Members who have taken part in today’s debate have done so for the same reason. They want to see a healthy and successful pub industry, and they want our pubs to thrive and to succeed. However, I believe that the unintended consequences of the proposed regulations will cause many more pubs to close.
It is important for the House to understand exactly what we are talking about when we refer to a free-of-tie option and to market rents. Let me cite the example of a pub company in my constituency, a brewery called Marston’s. It owns a number of pubs, which would be regulated under the proposed legislation. It has been operating for many years, and is a reputable business with a long and proud history. That brewery might have owned a pub for 30, 40 or 50 years, and run it extremely successfully. The tenant might retire or decide to do something else, and a new tenant might take over. Within months, that new tenant—despite having seen all the pub books and despite having had the business case assessed by his lawyer, his business adviser, his bank manager, and Uncle Tom Cobley and all, and despite knowing exactly what rent he would pay and what he would pay for beer—might decide that he wanted to become free of tie.
What is now being proposed is not only that the Government should tell Marston’s what it can charge for beer and rent in a property that it may have owned for 50 or 60 years, but that we should then allow that tenant, paying a rent set by the Government, to sell beer that is not Marston’s. We can see the unintended consequences of successful pubs, well run by brewers, no longer selling the beer on which they were built.
Mr Jim Cunningham (Coventry South) (Lab)
The hon. Gentleman has led a debate in the House on the same issue in the past, and it has still not been resolved. The situation he is describing actually happened between working men’s clubs and breweries. A number of clubs ran up a lot of debt that they owed to the brewers, and were then forced to sell their beer. How can we solve that problem? Many people in Coventry are concerned about pub closures.
Andrew Griffiths
As a young boy, I was more or less brought up in a working men’s club. I went to it every weekend. I recognise the importance of our working men’s clubs, and I know that a situation arose whereby clubs were in hock to the brewers. What we must bear in mind is that this is intervention in the marketplace that we would see nowhere else in business.
John McDonnell (Hayes and Harlington) (Lab)
The hon. Gentleman is advancing a coherent argument, but surely he does not oppose the introduction of an adjudicator. We have done that in other contexts, such as supermarkets.
Andrew Griffiths
I am certainly open to the idea of an adjudicator. My question is, who pays? It is estimated that the administration of an adjudicator could cost £1 million, which is a huge amount of money to take out of the beer and pub economy. Who is going to pay for what could be described as just another piece of red tape and Government regulation?
I genuinely ask the Minister why she would want to sit in judgment on rent disputes or other commercial or contractual disputes between two businesses, especially when effective mechanisms are already in place that are unique to the pub sector, independent and funded by the industry. I ask her to consider carefully the Office of Fair Trading’s report to the consultation. It clearly expressed the view that the tie is not distorting the market, and states that the proposed intervention could result in a breakdown in economies of scale, leading to an increase in rents and prices that would affect tenants and consumers. I also urge the Minister to consider the report from London Economics, which her own Department requested. It suggests that more than 2,400 pubs could close as a direct result of the proposed intervention in the market.
The reality is that many pub companies are nursing pubs because they cannot find a tenant or buyer for them. The proposed economic model would mean that those companies would have to free themselves of those pubs, which could lead to thousands of pubs closing in a very short time. I ask the Minister: why regulate? Is there a consumer issue involved? Not according to the Office of Fair Trading. Would regulation help the smaller brewers? Certainly not, according to the Society of Independent Brewers. That organisation represents the micro-breweries. We have heard people rejoicing today that those breweries have flourished and blossomed. There are now 1,000 micro-breweries operating in this country as a result of the progressive beer duty introduced by the previous Government—I commend them for that—so why would we want to interfere in the market, given that those brewers have clearly stated that to do so would prevent their access to the market?
Mr Donohoe
I used to run a licensed premises myself, so I understand what the hon. Gentleman is saying, but he has not really addressed the issue before us today. Why are so many pubs closing? Why, in his opinion, is that happening?
Andrew Griffiths
I think that you would become apoplectic, Madam Deputy Speaker, if I were to wax lyrical on why pubs are closing. We all know that it is due to changing social demographics, to the fact that people are spending more time at home, to the drink-driving laws and to the supermarkets. There are many reasons—[Interruption.] And, yes, the smoking ban. The hon. Member for Central Ayrshire (Mr Donohoe) gesticulates as though he is puffing on a cigarette. I completely agree with him on that point. The previous Government introduced the smoking ban and, at a stroke, closed thousands of wet-trade pubs without putting in place any support for the pubs or the industry. He has pointed out another unintended consequence of legislation. It was a good idea that we stopped smoking in pubs—they have a nicer environment as a result—but the unintended consequence was that many of them closed.
The danger is that we repeat those mistakes in the proposed regulation. We would not expect McDonald’s franchisees to be able to sell Kentucky Fried Chicken products because they thought there would be more profit in doing so. Why, then, should we want a Marston’s pub to be forced to sell other people’s beer as a result of the proposed regulation?
Bob Stewart
Would it not help licensees if Marston’s could reduce the price of its beer to a market level? Would that not make their pubs more sustainable? Reducing the price of beer in that way would help a heck of a lot, without the need for any intervention.
Andrew Griffiths
I completely agree with my hon. Friend, and I am grateful to him for his support for our cross-party campaign to reduce beer duty. That campaign did a lot to help publicans, and I hope I will be able to call on his support again as we move forward.
Mr Laurence Robertson
My hon. Friend has mentioned the difficulties involved in reaching a solution, as I tried to do in my speech. Does he agree that one clear way for the Government to help pubs would be to cut the tax charged on beer, which can amount to 37% on the average pint? That is a huge amount of money, and any tax cut would benefit customers and landlords.
Andrew Griffiths
I completely agree with my hon. Friend. The previous Government increased the duty by 60% during their time in office, and it is no wonder that 9,000 pubs closed on their watch as a result.
Mr Donohoe
I recall a previous debate on beer, which I think was led by the hon. Gentleman. I made an intervention on that occasion to ask about whisky and other spirits. It is now known that spirits account for 40% of the sales in pubs, so would he include them in his calculations, as well as beer?
Andrew Griffiths
The hon. Gentleman will also be aware that the vast majority of a pub’s income comes from the sale of beer. We brew beer in this country; it is something that we are fantastic at doing. It is a British product—
Andrew Griffiths
Of course, and whisky is a great product, but the hon. Gentleman will also know that the whisky industry is growing and that the vast majority of that growth is coming from exports, whereas the beer industry is in decline, and beer is produced and sold uniquely in this country.
I recognise that I am in the wilderness here, but I urge the Minister, colleagues and all Members who are considering how to vote in this debate not to introduce red tape and regulation that will force more pubs to close and create a further decline in the great British pub.
Ian Murray (Edinburgh South) (Lab)
First, may I welcome the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Cardiff Central (Jenny Willott), to her post? She has taken over the role from the hon. Member for East Dunbartonshire (Jo Swinson) whom we congratulate on the birth of her son, Andrew, and we pass on our regards to the hon. Member for Chippenham (Duncan Hames), who participated in the early part of this debate.
We have had yet another constructive debate on pub companies and their relationship with their tenants, but I cannot help but feel a significant sense of déjà vu. As my hon. Friend the Member for Chesterfield (Toby Perkins) said in opening the debate, it would not be January without his staying off the alcohol for a month—I could flippantly say that he keeps off paying for it for the other 11 months of the year—and without our having a debate on pubcos. This is the third such Opposition day debate—that is, this Opposition are using our own parliamentary time to continue to raise this important issue and keep the pressure on the Government, stressing that they are doing too little, too late and too slowly.
It is important that we should continue to re-emphasise the contribution that pubs make to our local economies and local communities. Each pub employs an average of 10 people, often young people who find it particularly hard to find work in other sectors. They provide skills in customer service, management and training. My hon. Friend the Member for Huddersfield (Mr Sheerman) is no longer in his place but he talked about training, which allows me to mention the Montpelier group in Edinburgh, which set up its own training academy for people who work in its pubs and restaurants. It deserves great commendation for the work it does on that in Edinburgh.
The role of the licensee is very difficult, as I should know—I was a licensee of a hotel and two licensed premises before becoming an MP. It is the combination of pubcos and decisions by Governments of all political persuasions that has pushed prices up for the consumer, which has subsequently undermined the competitiveness of these organisations and, indeed, other activities. We need to look at what can be done by Government.
Mr Jim Cunningham
I hope my hon. Friend will cover the new idea of local people buying their own pubs and setting up community pubs. Some football clubs are doing that as well. What does he think about that as a way forward?
Ian Murray
I think it is fantastic that communities are able to bid for pubs. It is happening in Scotland as well, under the Scottish Parliament. Indeed, I have a small vested interest in that, because I am leading a consortium of fans looking to buy Heart of Midlothian football club. Community ownership—or at least having the opportunity to go into community ownership—is the way forward for lots of industries that have a tie to the local community.
The combination of high rents and tied barrelage costs means that a pubco tenant must sell a pint at a price level that allows some reasonable profit margin. That level is well above what non-tied premises can charge, which makes the pubco tenants uncompetitive and pushes up the price for the consumer. As the hon. Member for Tewkesbury (Mr Robertson) mentioned, barrelage costs can be 50% higher in tied premises than in non-tied premises, which can distort the market in terms of how much tied premises need to charge the customer. Add to that an increase in VAT to 20% and we have a cocktail of disaster for the publican.
Mr Donohoe
As my hon. Friend was a pub licensee, he will know that in a tied pub it is not only beer prices that are tied but the spirits and everything else that is sold. I know that from my own experience.
Ian Murray
My hon. Friend is right to raise that because it is indeed the case. My hon. Friend the Member for Huddersfield mentioned that too, when he said that the ties can be on wet sales, dry sales and gaming machines, and they can mean compulsory courses, compulsory training, compulsory licensing and using highly inflated contracts through the pub companies for, for example, statutory checks like electrical checks.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
My constituency has a large number of excellent pubs of distinction, and my hon. Friend may well have visited some of them from time to time. They are also major sources of employment in the area. How would the proposals in the motion assist employment in that very important sector in my constituency and others across the country?
Ian Murray
There is a simple formula on employment in the licensed trade: the more successful a premises is, the more people it is likely to employ. The entrepreneurial nature of people in these small businesses running licensed premises means that they tend to want to get more licensed premises and expand what they are doing, so this is very good for employment. I declare an interest again, Madam Deputy Speaker, because I have visited some of the hostelries in my hon. Friend’s constituency, some of which are rather nice, and I encourage others to do likewise.
I was talking about the double whammy of Government decisions and the tied contracts pushing up prices to the consumer, which perpetuates the demise of licensed premises. We must also consider the ever-increasing energy bills, the spiralling rates and the costs of other non-alcoholic supplies such as food, which are rising much faster than tenants are able to pass on to their customers. More has to be done to deal with all those other relationships, and I hope the Government will back Labour’s policy on both energy and business rates to enable us to bring some of those other pressures down.
Mark Pritchard (The Wrekin) (Con)
It is important that we talk about the financial structures of pub companies and pubs, but does the hon. Gentleman recognise the important social function of pubs such as The Bull’s Head in Rodington, The Cock Hotel in Wellington and the Plough Inn in Shifnal, all of which are in my constituency? They have a link to CAMRA and the flexibility of being able to bring in real ales so that everyone can enjoy them in the community at the right levels.
Ian Murray
I am delighted that I gave the hon. Gentleman an opportunity to mention a lot of the pubs in his constituency—I hope that is reciprocated. As he rightly says, pubs provide a community benefit, and many of the premises I have frequented, and one I used to run, had the local Rotary club there raising a lot of money for charity, so the community part of the pub is very well established.
I wish to reflect on the relationship between tenants and the pubco owners of the premises, which has been mentioned. One thing I found galling when I ran one of my own premises was that our business development manager took great delight in telling us which tenants he was fining that week for buying out, which they had to do to make a small living. That kind of behaviour and culture in the pubcos highlights the problem we face. We must also address the issue of inaccurate information being provided when people are making big decisions, particularly, as my hon. Friend the Member for Chesterfield alluded to, when they are putting life savings into these premises; they have to make sure that the information they get is accurate.
Greg Mulholland
I thought it might be useful to intervene because I have something of an answer on the question of jobs. The research from the Federation of Small Businesses showed that the market rent only option would lead to 9,888 pubs in the UK taking on more staff, which would be worth £48 million in wages.
Ian Murray
I am grateful for the hon. Gentleman’s contribution. I only hope that he changes his mind and votes with us in the Lobby. It was striking that he said he would not be voting with us, given that he sent an e-mail to all Members yesterday encouraging them to do so. It is a shame that he will not change his mind, although he still has time.
Let me now deal with the remarks by the Secretary of State, whom I am delighted to see back in his place. He mentioned that he was drinking “mocktails” on his trade mission to the United Arab Emirates, and I wish him well in there. As you know, Madam Deputy Speaker, a “mocktail” is a cocktail without alcohol. The Secretary of State has invented a brand new word in today’s debate, because he has developed a “molicy”, which is a Government policy without legislation. He refused time and again to commit to bringing legislation forward in the Queen’s Speech. Why? It was because he probably does not want to bring it forward or he is being pressed not to do so. Despite making the case for urgency, he does not seem to be doing this. To continue the puns, he seems to be serving the pub trade very much a short measure in his response to this debate, .
My right hon. Friend the Member for Torfaen (Paul Murphy) rightly highlighted the numerous reports produced by the Business, Innovation and Skills Committee report, which are strewn over the Table. I can count 10 in front of us that have looked at this issue, so the Government do have a great degree of direction on which way they may wish to go. He was right to say that we have been round this issue time and again. He also talked about the considerable coalition for action that we have heard about, and we need to take cognisance of the number of people who have been looking at this matter.
The hon. Member for Norwich North (Chloe Smith) blamed the previous Labour Government for some of the problems. I was delighted when the Chair of the Select Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), highlighted that, because the conclusions of the 2009-10 report, which came out just before the general election, included the sentence:
“The industry must be aware that this is its last opportunity for self-regulated reform.”
It is clear that the reason the previous Labour Government did not take a statutory approach was that they were listening to the influential Select Committee.
My hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) said that there was broad agreement on the matter in the House, but that Members and publicans become frustrated when the Government do not take the right action. My hon. Friend the Member for Clwyd South (Susan Elan Jones), despite her tour of both Norwich and Huddersfield, was sober enough to notice that there is little legislation on the Government’s current agenda and that there is time to promote this issue, and we hope that the Government will be able to do that before this Session finishes, or in the Queen’s Speech in May.
In their amendment to our motion on this subject last year, the Government said that they would create an adjudicator; they have done that already with the groceries code. This year’s amendment tends to row back from that. We cannot help but think that they are kicking the matter into the long grass, as they did with the zero-hours contracts until they were forced into action by the Opposition. The window of opportunity for a Bill before the general election is rapidly diminishing. The Government must introduce a Bill in the next Queen’s Speech; otherwise, there will be insufficient parliamentary time to pass it. Without such a Bill, we face starting the next Parliament with even more reports telling us how broken the pubco market is.
The Government must support our motion today and set in place a statutory code that allows a mandatory free-of-tie option, independent rate reviews and an independent adjudicator with teeth. That is what this House wants, what it has consistently voted for and what we are asking the Government to do. If the Government do anything else, they will yet again be seen to be failing to stand up to vested interests and to back the local pub.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
I thank the many Members who have spoken so passionately in the debate today. Almost all of us have heard tales of hardship from constituents who have worked in the pub industry. The need for action has been shown across the House. The hon. Member for Huddersfield (Mr Sheerman) appears to be the only one here who currently owns a pub, albeit closed, but there are clearly a number of Members who have an understanding of the industry.
Mr Sheerman
As my pub is soon to be crowdsourced, the hon. Lady can become a member.
Jenny Willott
I congratulate the hon. Gentleman on giving probably the best plug to his business, which has been mentioned four or five times in today’s debate—crowdsourcing will clearly not be a problem from now on.
A number of Members who have spoken have previously worked in the licensed trade, so they have been speaking from knowledge not only as constituency Members but as former licensees and so on, which has lent weight to the debate. My thanks go to the members of the Business, Innovation and Skills Committee and their Chair, the hon. Member for West Bromwich West (Mr Bailey). He and his predecessor, my hon. Friend the Member for Mid Worcestershire (Sir Peter Luff), have done crucial work over the years to raise awareness of this issue. I congratulate my hon. Friends the Members for Northampton South (Mr Binley) and for Leeds North West (Greg Mulholland) on their tireless work over a number of years.
Finally, I thank the wide range of people who responded to the Government’s consultation, including tenants, brewers, pub companies and their employees, interest groups, trade bodies, supply chain companies and consumers. Indeed, a number of Members from all parts of the House also submitted their views.
We have heard a number of stories from Members whose constituents are facing real hardship and adversity, which is clearly worrying. In his opening remarks, the hon. Member for Chesterfield (Toby Perkins) name-checked a large number of pubs that have been mentioned in previous debates, so I will not do the same. I would, however, like to highlight some of the Members who have given a passionate defence of pubs: my hon. Friends the Members for Leeds North West, for East Hampshire (Damian Hinds) and for Norwich North (Chloe Smith), the hon. Member for Huddersfield, my right hon. Friend the Member for Hazel Grove (Sir Andrew Stunell), the hon. Member for Clwyd South (Susan Elan Jones), my hon. Friend the Member for Tewkesbury (Mr Robertson), the hon. Member for Plymouth, Moor View (Alison Seabeck) and my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes) and for Burton (Andrew Griffiths). That illustrates how important pubs are to a diverse range of communities across the UK. The constituencies about which Members have spoken today range from the urban to the rural and have very different issues, and that shows just how important pubs are.
As many Members have mentioned, over the course of a decade there have been four Select Committee investigations into the relationship between pub companies and their tenants and into whether a tied model causes an imbalance in bargaining power. The Government have received a large amount of correspondence from tenants about problems in their relationship with their pub company as well as from many hon. Members writing on behalf of constituents.
Although many pub companies behave well and some tenants have written in support of the tie, many others tell us that the tie arrangements with their pub companies are unfair and that a lack of transparency in particular causes a severe imbalance in negotiating power. Another issue that has been highlighted during today’s debate is the research commissioned by CAMRA based on self-reported income, showing that more than half of tied tenants earn less than £10,000 a year compared with only a quarter of those who are free of tie. The problems faced by tenants are real and clearly something needs to be done.
The Government consulted on the creation of a statutory code of practice to govern the relationship between large pub companies and their tenants and of an independent adjudicator to enforce the code. As a number of Members have highlighted, the proposals would represent a real step change for the industry, offering tenants the protection of a code of practice enshrined in statute and an independent and reliable body to which they could turn for assistance—[Interruption.]
The proposed code has at its core two important principles: the principle of fair dealing and the principle that a tied tenant should be no worse off—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. This has been a very important debate and everyone has been listened to quietly and with respect. There are far too many conversations going on and I cannot hear the Minister, who is speaking perfectly clearly. If Members are in the Chamber, they should be listening to the Minister. If they want to talk to each other, they should go outside.
Jenny Willott
Thank you, Madam Deputy Speaker. I completely agree; I have to say similar things to my children when they are bickering, as some Members appear to be today.
The two core principles at the heart of the code are fundamental. As the consultation made clear, there is a problem in the relationship between pub-owning companies and their tenants, and that was backed up by pretty much every Member who has spoken today.
Alison Seabeck
On the consultation and the Government’s work on the adjudicator role, have the Government come up with a figure for the cost of that adjudicator? That question was asked by Government Members.
Jenny Willott
As the hon. Lady will know, we are evaluating the responses and we will publish our response as soon as we can. That will give much more information about what we propose to do and the costs and impacts of those proposals.
Jenny Willott
I am afraid that I am very short of time and the hon. Gentleman has already intervened a number of times, so I will not.
The purpose of the consultation was to consider the proposals to address the problems in the relationship between pub-owning companies and their tenants, rather than to rehash the problems that we all know to be there. That leads me on to the response to the consultation; I emphasise again that the volume of responses we received was staggering, demonstrating the depth of feeling on the issue.
We received more than 1,100 written responses and more than 7,000 responses to the online questionnaire. One of those responses was 2,000 pages long, so the amount of evidence we have received is significant. That also shows that the situation is not as simple as some people have portrayed it, as illustrated by the speeches made by a number of Members today—not least those made by my hon. Friends the Members for Burton, for Tewkesbury and for East Hampshire and the hon. Member for Huddersfield. They raised concerns about what should be done to tackle the problems, including mentioning the views of the OFT, and highlighted that the matter is not simple but is far more complex than has been suggested by those on the Opposition Front Bench.
The responses to the consultation came from a wide range of interested parties. Since we published the responses online in December, they have been read several thousand times. If hon. Members have had the opportunity to look at even a little of the evidence that has been submitted—I am fairly sure that no one will have read the 2,000-page submission—they will see that views are often polarised on the degree and the nature of the problem, and what the best solutions would be. That has also been seen in today’s debate. The 2011 report of the Business, Innovation and Skills Committee noted that the evidence
“demonstrates a high level of acrimony within the industry and is littered with claims and counter-claims”,
which just shows that it is important to make sure that we get this right.
The breadth and depth of views expressed in the Chamber today and in the consultation help to illustrate what a complex issue this is, particularly if we aim to design a solution that is both effective and proportionate. As some hon. Members have highlighted today, the tie itself is not necessarily a problem; it is abuse of the tie that is the problem. Nor is the tie the only problem facing pubs, so finding the right solution is a complex matter.
As hon. Members have also highlighted, the Government had intended to publish their response to the consultation by the end of 2013. I know that those who are affected by the proposals, whether tenants or businesses, need clarity from us. This is, however, a complicated issue, and it is really important that we get the decision right. The excellent response to the consultation has created a broad evidence base upon which we can make our decision, and the evidence spans the range of proposals that we have discussed today, including the market rent only option, and puts us in a good position to make the right decision to ensure a fairer and more sustainable pubs industry.
We intend to publish the Government’s response to the consultation as soon as we can, but we are working to reach a proportionate solution that delivers greater fairness for Britain’s publicans. We believe fundamentally that a tied tenant should be no worse off than a free-of-tie tenant. The beer and pubs sector makes a significant and valuable contribution not only to our economy, although that has been highlighted in today’s debate, but also to the more intangible benefits of social cohesion and a sense of community. We want to support a fair and flourishing pub sector, which is why we removed the beer duty escalator, as has been mentioned by hon. Members, and reduced the tax on beer in last year’s Budget. It is also why we support the community right-to-buy scheme, which several hon. Members have mentioned today, and why we are giving £19 million to help communities to take advantage of the scheme.
By ensuring that tied tenants are treated fairly and putting an end to the abuses of the tied model, we will create a sustainable and fairer industry to enable pubs to remain as mainstays of our communities, and that will be good for publicans, pubs and the public.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Terrorism Prevention and Investigation Measures
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
18:59 - The House divided: - Ayes: 236 / Noes: 312 - Question accordingly negatived.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I beg to move,
That this House notes the ending of preventative measures allowed under Terrorism Prevention and Investigation Measures (TPIM) for six terrorist suspects in January 2014, including individuals that the Home Secretary considers to pose a risk to the security of the United Kingdom through terrorism-related activity; notes the decision made by the Home Secretary to end TPIM controls after two years regardless of whether she assesses individuals are likely to involve themselves in terrorism-related activity; is concerned that the Home Secretary has provided to Parliament no assessment of the current threat these individuals may pose to the public through terrorist-related activity, and notes the recent finding of Mr Justice Wilkie that the Secretary of State does not accept that there is a general duty to tailor measures towards the end of a TPIM in order to facilitate assimilation; further notes the disappearance of two terrorist suspects subject to TPIMs, Ibrahim Magag and Mohammed Ahmed Mohamed; calls on the Government to make a statement to Parliament on the threat of terrorist-related activity posed by the six suspects exiting TPIMs, and to share the full assessment from the Security Service with the Intelligence and Security Committee; and further calls on the Government to establish a cross-party review of TPIMs in the light of these assessments to decide whether changes are needed to protect the security and liberty of the United Kingdom.
By the end of this week up to six terror suspects will have all their restrictions removed so that they can walk the streets of Britain unhindered. These six men were previously considered sufficiently dangerous by the Home Secretary and the courts that they were subject to terrorism prevention and investigation measures, with their communications and movements restricted to prevent terror-related activity. According to the courts, one was a suspected suicide bomber planning to blow up an airline; one was planning a firearms attack, either in the UK or abroad; one was trying to join terrorists in Somalia and another was trying to join Islamist terrorists in Syria; a fifth was accused of fundraising and supporting terror activity in Pakistan; and a sixth was accused of planning attacks and fundraising for al-Shabaab, the group responsible for the awful attacks at Nairobi’s Westgate centre last year.
We know how dangerous the court and the Home Secretary believed these men were even just 12 months ago, when their TPIMs were renewed. The Home Secretary needs to tell us today whether she believes they are still dangerous now. Their TPIMs are not being removed because the Home Secretary has changed her security assessment; they are being removed because the Home Secretary changed policy and legislation three years ago. We need answers today on the risk each of these men poses and on what action she has taken to reduce the risk. Parliament also needs to know whether TPIMs are still fit for purpose, or whether reforms are needed in the interests of public safety.
Dr Julian Huppert (Cambridge) (LD)
Can the right hon. Lady be clear on her position? Is it her view that people who have been accused but never convicted should be held under such measures indefinitely? That is the consequence of what she is saying.
Yvette Cooper
I will make a little progress and set out our concerns and views. We have always raised concerns about the introduction of the two-year time limit, because we believe that that raises serious questions. We also want nobody to be under control orders or TPIMs longer than is necessary, so it is right that they are continually reviewed. However, it is also right that we make sure that concern for public safety is at the heart of the debate, and that is what we need to discuss today.
Mr Gerry Sutcliffe (Bradford South) (Lab)
My right hon. Friend is talking about the answers we need. Promises were made to the Bill Committee—I was on it—and Parliament about the cost of TPIMs, but we have never got to the bottom of how much those costs have increased by. Would she like to comment on that?
Yvette Cooper
My hon. Friend is right. Figures were given in briefings to newspapers of about £50 million of additional funding to the security services and the police as a result of the switch from control orders to TPIMs, but it would be helpful to have that figure confirmed by the Government. In addition, however, we do not know whether extra resources are being provided for the ending of TPIMs. That clearly creates additional pressures on the police and security services.
This country has always to be vigilant against terrorism, and we should thank the police and our security and intelligence services, which do a difficult job incredibly well, often behind the scenes and unnoticed. According to the independent reviewer of terrorism, the threat of a terror attack directly by al-Qaeda has decreased since the mid-2000s, but the threat from its affiliates and its power to motivate other extremists and provide training and planning support all remain. Over this Parliament, we have seen attempted bomb plots in the west midlands, plans to attack a Territorial Army base and target Wootton Bassett, and of course the dreadful murder of Drummer Lee Rigby last summer.
UK nationals attempting to travel overseas to fight and train are also potential threats to the UK, both to our interests and citizens abroad and to us here when they return home. The independent reviewer has warned that the Syrian conflict might begin to rival the traditional threat from al-Qaeda core and regions north of Pakistan. We need to be vigilant against these threats and ensure that the British people are protected, and to ensure that the terrorists do not divide us or undermine our democratic values. The laws we pass against terrorism need always to be proportionate and fair.
That is why, like control orders before them, TPIMs are exceptional powers and should be used only in exceptional circumstances, but there are difficult cases: where there is substantial evidence that someone poses a terror risk, but where convictions cannot be achieved—for example, if they depend on secret intelligence that cannot be used in court. Given the risk of harm and potential loss of life from terror attacks, Parliament and our courts have long supported preventive measures based on a clear legal procedure, with safeguards to reduce the risk to the public.
Three years ago, however, the Home Secretary decided to weaken those terror powers by replacing control orders with TPIMs, putting a two-year limit on each one and removing relocation and other restrictions from them. She said there would be a greater focus on prosecution and imprisonment.
Mr Kevan Jones (North Durham) (Lab)
Does my right hon. Friend agree that the narrative being put out by the Conservative part of the coalition is that the legislative change that brought in TPIMs was a result of their coalition partners, the Liberals? Was not the start of this, however, in the Conservative party’s 2010 manifesto?
Yvette Cooper
My hon. Friend makes an important point, and I want to come to that. The Home Secretary ducks the issue if she simply blames the Liberal Democrats for this change in legislation, because she introduced it and Conservative MPs voted for, supported and defended it at every stage of its passage through the House, even when we raised questions and concerns.
Yvette Cooper
I want to make some progress, because I have not yet reached the main substance of my speech, but I will briefly give way to the hon. Gentleman and then my hon. Friend.
Michael Ellis
Does the right hon. Lady not accept that it was the courts of law in this country that criticised and weakened the control orders that her Government set up—the courts sounded their death knell—and that any Home Secretary has to establish a proper legal framework for the orders of this country to subsist?
Yvette Cooper
I am afraid the hon. Gentleman is simply wrong, and he knows he is wrong because he asked exactly that question of David Anderson, the independent terrorism reviewer, in the Select Committee on Home Affairs. The reply from David Anderson was clear. He said that control orders had not been undermined by the courts and had in fact been upheld by them—that the principle had been upheld and individual control orders had been upheld. Of course it is right for control orders to be scrutinised in the courts, as it is right for TPIMs to be scrutinised. However, the independent reviewer was absolutely clear: it was not the courts undermining control orders, nor was it the courts that decided to replace them with the weaker TPIMs; it was the Government.
Yvette Cooper
The concern for us is that the weakening of the terror powers has led to additional costs. We simply do not know what additional costs there might be now as a result of ending control orders for up to six people this month.
The Prime Minister told the House earlier this month that TPIMs “are working”, but the verdict on TPIMs, two years on, is very different. According to the independent reviewer, there have been no successful prosecutions, despite all the Home Secretary’s promises. The removal of relocation powers has badly backfired. No one relocated as part of their control order ever absconded, yet the Home Secretary removed relocation powers and lost two out of 10 suspects in 12 months. Ibrahim Magag ran off in a black cab; Mohammed Ahmed Mohamed ran off in a burqa. They have not been seen since, and the Home Secretary and Prime Minister have no idea where they are. The Prime Minister calls this a successful policy, yet 20% of the terror suspects on TPIMs have disappeared within a year.
We want to concentrate on the six men expected to be released from TPIMs this month. The House warned the Home Secretary of the risks that she was taking by restricting TPIMs to two years regardless of the security assessment unless fresh terrorist activity had occurred. Here is what Mr Justice Collins said about her legislation:
“if a TPIM has achieved its purpose and the Home Secretary has no reason to believe that any terrorist related activity has occurred, there will be no power to impose a fresh TPIM whether or not…the Secretary of State has reason to believe the subject will involve himself in terrorist related activity.”
In other words, if the TPIM works to prevent terrorist activity, there is no possibility of the Home Secretary extending it, even if she has good reason to believe that that terror suspect remains a serious risk and will return to terrorist activity straight away.
If that is the case, Parliament needs to know the extent of the risk that these men pose now, and the Home Secretary needs to give us this simple piece of information: does she believe that these six men are still likely to pursue terror-related activity: yes or no? The courts said they were likely to do that 12 months ago. Does she believe they are now? Are these men still a risk: yes or no? She cannot claim that she does not comment on individual cases, because she has already done so. Public statements have been made about these men and the risks they pose.
Let us take the person known as CD—one of the men whose TPIM expires this month. The Security Service said he was trying to procure firearms for a terrorist attack in the UK. Just over a year ago, the judge agreed he was too dangerous to remove the TPIM controls. The judge said at that point that
“the evidence that CD has been involved in terrorist activity is overall stronger now than it was”.
He also said that the
“control order and now TPIM are having something of their intended effect, but that is very different from saying that the TPIM should be ended…there remains a network, his views and determination are unchanged, he has training”.
What has changed since then? Have CD’s views and determination changed? Has his network changed? Or is there still a significant risk that he will try to get firearms or other weapons again to pursue a UK attack? The Security Service and the judge told us a year ago that this man was a serious risk; now the Home Secretary is removing all his restrictions. We have a right to know whether she still thinks he is a risk or whether that risk has gone. I will give way to the Home Secretary if she will tell us now whether CD is still a risk. [Interruption.] The Home Secretary has chosen not to intervene to answer the specific question about whether CD remains a risk.
Pete Wishart (Perth and North Perthshire) (SNP)
Is the right hon. Lady really telling us that she is going to take us back to the bad old days of Labour’s anti-civil-libertarian state, with its control orders, ID cards, national database and 90-day detention? Is that where new Labour is going to take us once again?
Yvette Cooper
The hon. Gentleman, too, should want this information and these answers from the Home Secretary. Whatever his views about the legislation, he ought to want answers from the Home Secretary about whether CD still presents a risk. Our view is that it is right to have exceptional legislation, but that strong safeguards should also be in place. Sometimes there is a need for clear powers, but clear safeguards must also be in place. There should be provision to review TPIMs or control orders to make sure that they are used only where it is proportionate and justified. However, the Home Secretary should provide answers about whether she is needlessly putting people at risk as a result of the decisions she has taken.
Hazel Blears (Salford and Eccles) (Lab)
My right hon. Friend will be aware that the independent review of David Anderson recommended that consideration be given to an additional power at the end of a TPIM to provide something similar to licence conditions when people are released from prison. At the moment, there is no legislation to provide any degree of control once the TPIM is ended. Does my right hon. Friend think it a good idea to introduce such provisions into the TPIMs legislation so that if we do not have a TPIM, we at least have something akin to licence conditions on the release of prisoners?
Yvette Cooper
My right hon. Friend makes an important point. As we understand it, no restrictions will be in place for these six men, regardless of the security risk. We do not know what the security assessment of these six men is; that is why the Home Secretary needs to tell us. She may now believe that they are no longer a risk and that no further restrictions are needed. If further restrictions are needed, however, we need to know what they are. We are happy to engage in a cross-party discussion about whether further legislation and changes are needed, but we need answers from the Home Secretary on the security assessment of these men.
Let us take the man known as AM, for example. The Government have argued that he was part of
“a viable plot to commit mass murder by bringing down transatlantic airlines by suicide bombing”.
Here is what the judge said just 18 months ago:
“But for the disruption of the transatlantic airlines plot, there is every reason to believe that AM would have killed himself and a large number of other people.”
Those are the judge’s words. He also said that
“convincing evidence of a change of heart was required before the Secretary of State could reasonably consider that the need to protect members of the public from a risk of terrorism had gone or been reduced to a level at which preventative measures were no longer required.”
The Home Secretary has now removed those preventive measures. Does she believe that there has been
“convincing evidence of a change of heart”?
Does she have evidence that
“the need to protect members of the public from a risk of terrorism”
has gone? I have cited what the court said 18 months ago, but what does the Home Secretary say about AM now? Once again, I give her the opportunity to intervene to answer the question whether she believes that AM is still a risk.
There are others, such as the man known as BF. Just seven months ago, the Home Secretary described him as a
“long term, committed and historically well connected extremist”
who
“maintains a desire to travel overseas and he would seek to travel after restrictions are removed and he would seek to engage in terrorist related activities.”
That was seven months ago; what has changed? Is he still a risk; yes or no? Then there is the man known as CE. The Home Secretary told the courts that he was trying to travel to Somalia to engage in terror-related activity and that he was linked to a UK-based network of Islamist extremists who are fundraising and supporting terrorism in Somalia. Is he still a risk; yes or no?
The courts confirmed nine months ago that CF had attempted to travel to Afghanistan to engage in suicide operations, while the Security Service said he was fundraising for al-Shabaab and recruiting fighters from the UK. Is he still a risk? The man known as BM is accused of fundraising for terrorist organisations in Pakistan and of trying to travel there to engage in terror-related activities. Is he still a risk?
Ian Paisley (North Antrim) (DUP)
Perhaps the Member known as YC will tell the House what measures she would introduce to replace those to which she is referring.
Yvette Cooper
That is an important question. We think that the decision about the framework must depend on the security assessment, to which the Government have access but we do not. We believe that it was wrong to introduce the two-year limit in the first place, and wrong to remove the relocation powers. That was our view when the legislation was passed, and we continue to be concerned about those issues. However, we are willing to work with the Government and with other parties, on a cross-party basis, to consider what the framework should be now. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) advanced important proposals which have also been advanced by the Independent Reviewer of Terrorism Legislation. There may be other options, and we think it important for those to be debated, but they need to be debated in the light of the security assessment.
Ian Paisley
Does the right hon. Lady agree with the independent reviewer that there should be a licence system, or does she recognise its weakness?
Yvette Cooper
The independent reviewer’s proposals should be looked at very seriously. As I have said, there may be other options, such as the extension of time limits. As the hon. Gentleman has pointed out, any set of proposals will involve limitations. This is the kind of debate we ought to be having in Parliament, but it needs to be informed by that proper security assessment.
Yvette Cooper
I will give way once more, but I must then make some progress, because I know that many other Members wish to speak.
Richard Fuller
I am grateful to the right hon. Lady; I know that she wants to move on. Do I understand from her response to the hon. Member for North Antrim (Ian Paisley) that her understanding of justice in this case is that the group of people concerned should not be allowed to see the evidence that will be presented in a trial that they will not actually undergo, and that they should then be forcibly relocated from their communities and kept in detention for at least 23 hours a day, for an indefinite period? Is that the Labour party’s view of justice in this case?
Yvette Cooper
No. We have made it clear throughout the passage of the legislation that these measures should be used only in very exceptional circumstances, and that there must also be a court procedure. There must be legal safeguards, and there must be judicial processes. I have cited the views of the judges, not just the views of the Security Service and the Home Secretary. However, we must also recognise that there are some cases in which it is very difficult to prosecute in the courts because of secret intelligence, and the risk to human sources who may put their lives at risk by providing that important information.
The Home Secretary should tell us this: does she still believe that each of the six men whose restrictions she is now removing poses a terror threat—yes or no? She told us 12 months ago that the answer was yes, because she renewed their TPIMs, but what is her answer now? We know what she thought of those men when she imposed the restrictions, but surely it is even more important for us to know the risk when she takes those restrictions away. We are not asking her to show Parliament the detailed Security Service assessment—she should show that to the Intelligence and Security Committee—but we are asking her to inform us of her conclusions, and to give us as much detail as she gave publicly to the courts.
The Home Secretary gave us her security assessment when Magag and Mohamed ran off. She told us then that she did not believe they posed any risk to people in the United Kingdom. If she could tell us that much about those two terror suspects once they were out on the streets without restrictions, why can she not do the same now in relation to all the others?
People change and risk levels change. If the risk has been reduced, restrictive measures may no longer be justified, in which case they should certainly be removed. We support the removal of restrictions as soon as they are no longer justified. Over the last decade, control orders have rightly been removed from more than 30 people because they were not longer justified. Terror powers such as these must always be kept under review, but the Home Secretary has removed these restrictions not because they are no longer justified but because of her legislation, the legislation she pushed through Parliament. How can Parliament assess whether that legislation was right, and whether she has done the right thing, without knowing the continued risk that any of these men is expected to pose?
We also need to know what action the Home Secretary has taken to prepare for the end of TPIMs. The independent reviewer warned us some time ago that serious planning should be done to work with those individuals to reduce the risk once the restrictions were removed. Has that happened? Has any work been done with them to address their extremism? Judge Wilkie suggests not. On the basis of the evidence that the Home Secretary submitted to the court, he said that she
“does not accept that there is a general duty to tailor measures towards the end of a TPIM in order to facilitate assimilation.”
What planning has taken place to cope with the restrictions being removed? The Home Secretary has told us that the Metropolitan police have a plan for each person, but will she ensure that the Intelligence and Security Committee is shown those plans? Will she also tell us what those plans will cost? When control orders were downgraded to TPIMs two years ago, the Government provided extra funding for surveillance and investigations. However, that extra funding was clearly not enough to ensure that there was sufficient surveillance on Mohamed and Magag, who were able to abscond, or enough to deliver successful prosecutions. That reduction from control orders to TPIMs will have put additional pressure on the resources of the police and the security services, but surely the ending of TPIMs for those suspects altogether will put even greater pressure on those resources now, as there are no restrictions in place. Has any additional funding been made available to cope with the ending of TPIMs for those men, or will surveillance resources have to be redeployed from other important targets?
Before the Home Secretary stands up to answer my questions, let me address some of the points that she usually makes in her defence, as well as some new ones that she has added to her list in the past few days. She usually argues that control orders were not strong enough, and that people absconded while subject to them. She and I agree that the control orders without relocation powers, under the regime that operated before 2007, were not strong enough, but that is why the control order regime was tightened up in 2007 with a greater focus being placed on relocation, after which no one absconded. My response to that was to say that we should keep the relocation powers. Hers was to ditch them. She has lost two terror suspects as a result.
The Home Secretary has now come up with two new defences. She has told the Daily Mail that the problem was the fault of the Human Rights Act, and she has told The Sun that it was the fault of the Liberal Democrats. Both claims are nonsense. She has also tried to claim that control orders had to be reformed because they were being undermined in the courts. The independent reviewer has made it clear, both to the Home Affairs Committee and in other statements, that the courts have repeatedly upheld the principle of control orders and upheld individuals’ cases time and again. The independent reviewer has said:
“The replacement of control orders by TPIMs was a political decision. It was not prompted by any court judgment, either from the United Kingdom or from Strasbourg.”
As for the idea that this was all the Liberal Democrats’ fault, the Deputy Prime Minister is not even strong enough to sort out the problems in his own party. No one believes that he is strong enough to make the Home Secretary put forward legislation that she does not agree with. Let us remember what she said at the time. She made it clear that it was her legislation, not his. She defended every one of the changes, including the two-year limit, the end of relocation and the granting of extra freedoms. Indeed, she was proud that she was
“re-striking the balance between national security and civil liberties.”—[Official Report, 7 June 2011; Vol. 529, c. 71.]
The Home Secretary cannot blame the Liberal Democrats, the Human Rights Act or the courts. She has only herself to blame if she does not like the consequences of her legislation. We need to know what she is going to do now, however. What is the risk to the public from those six men? What is the risk to the public from her legislation? What is she doing about this? She told us three years ago:
“Where successful prosecution or deportation is not possible, however, no responsible Government could allow dangerous individuals to go freely about their terrorist activities.”—[Official Report, 7 June 2011; Vol. 529, c. 69.]
So can she now get up and tell us that she is not doing exactly that? Can she put her hand on her heart and tell us she is confident that she is doing the right thing for the British people by removing those TPIMs from those six individuals this month? And if she is really as uncomfortable with her own legislation as her briefings to the newspapers suggest, is it not time that she backed down and set up a cross-party review to look at this legislation again?
The Secretary of State for the Home Department (Mrs Theresa May)
Since 11 September 2001 successive Governments have grappled with the problem of how to deal with terrorist suspects who can neither be prosecuted nor deported. The last Government first introduced the Anti-terrorism, Crime and Security Act in November 2001. This legislation effectively introduced detention without trial for foreign terrorist suspects who could be held pending deportation even when that deportation was unlikely ever to happen. In 2004 the Law Lords struck down those powers.
We later had the extraordinary spectacle of the attempt to increase the period of pre-charge detention to 90 days, which was rightly defeated by Parliament, and in 2005 the last Government introduced control orders, but control orders too, as my hon. Friend the Member for Northampton North (Michael Ellis) has said, were steadily eroded by the courts. Three control orders were quashed because the courts said they were wrong in principle, two control orders were revoked because the courts directed that they were no longer necessary, and three control orders were revoked because the previous Government felt they were unable to make the disclosures ordered by the court. All those individuals were then freed from their controls.
Mr Kevan Jones
Does what the right hon. Lady has just described not show that the judicial oversight of control orders was actually working?
Mrs May
I have to say that that is an ingenious argument to make in support of the hon. Gentleman’s Front Benchers, but what it shows is that the courts were giving a very clear message about aspects of control orders. What we needed was a regime that was legally viable and would command the confidence of the police and security services, and TPIMs have been consistently endorsed by the courts, two successive independent reviewers of counter-terrorism legislation, the police and the Security Service. They provide some of the strongest restrictions available in the democratic world and some of the strongest possible protections that our courts will allow. We now have a strong and sustainable legal framework to handle terrorist suspects whom we can neither prosecute nor deport.
Hazel Blears
I am beginning to have a concern that, as a result of the outcry because people have absconded from the TPIMs regime, the Government will in future be reluctant to use the TPIMs powers. Will the Home Secretary confirm that if there are people who pose a serious security risk to this country, the Government will continue to use the TPIMs powers, although they are considerably weakened in my view, to try to protect the people of this country?
Mrs May
The TPIMs remain on the statute book. They remain there as an option; they are an option for the Security Service and the police to look at in relation to any individual and to bring forward to the Secretary of State for determination and then through the court process, which the right hon. Lady knows is in place.
Ian Paisley
Some of us come from the “lock ’em up and throw away the key” brigade on a lot of these matters, but will the Home Secretary take this opportunity to spell out the additional measures, which she has referred to, that will convince us that what will be put in place will be stronger, better and give us more security?
Mrs May
If the hon. Gentleman has a little patience, I shall refer to some of the other measures we have taken a little later on in my speech, but first I want to address the issue of funding.
As part of the TPIMs package, we provided additional funding to the Security Service and the police of tens of millions of pounds a year to help keep the public safe. For obvious reasons, I cannot go into detail on how that money was spent, but I can assure the House that it has significantly strengthened the police and the Security Service’s surveillance and counter-terrorism capabilities.
We followed that up by increasing spending on the security and intelligence agencies, most recently also protecting counter-terrorism policing budgets in the 2015-16 spending round. The police and Security Service made it clear that the move from control orders to TPIMs, combined with the additional funding for counter-terrorism, would not substantially increase overall risk. In fact, I can tell the House that the police and Security Service believe that TPIMs have been effective in disrupting the individuals subject to TPIMs and their networks.
Graham Jones (Hyndburn) (Lab)
Did the Home Office not fail to confiscate Mohammed Ahmed Mohamed’s passport when he was subject to a TPIM? Surely that is not a secure system.
Mrs May
As the hon. Gentleman knows, and as I made clear to the House following the statement I made on that individual, when that individual returned to the United Kingdom he did so on a document that was not a passport, and therefore the passport was not available to be taken.
Let me deal with the specific points raised by the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). Anyone listening to her would sometimes think that the control order regime would have solved every terrorist plot, but as well as the eight people released when the courts revoked their orders, another seven people absconded during the six years that control orders existed, and only one of those seven was ever found again, so people did abscond on control orders.
Mr Straw
One of the central differences between control orders and TPIMs that the right hon. Lady has not mentioned so far is the issue of relocation. Nobody absconded from relocation, and she cannot claim that she abandoned relocation because of orders from the courts, because the courts generally were supportive of relocation.
Mrs May
I was about to answer the point that the right hon. Gentleman has just made. When I refer to the seven absconds that took place under control orders, the answer that I always get from Opposition Members is about this issue of relocation. What neither he in his intervention, nor the right hon. Lady in her speech tell us is that forced relocation was struck down by the courts in four control order cases, including those of two individuals who were subsequently placed on TPIMs. The right hon. Lady also does not say that several control order subjects breached their control orders even while they were relocated, so the idea that relocation would prevent orders being breached is simply not correct. When the Metropolitan Police Commissioner was asked whether the removal of the option for relocation would have had any bearing on the case of Ibrahim Magag, in particular, he answered:
“we do not think so”.
Mr Kevan Jones
What about the point made by David Anderson in his latest review? He says:
“The possibility of relocation has now been removed. That step was not required by the courts …which had indeed shown themselves generally supportive of relocation as a deterrent”
to terrorism.
Mrs May
I am grateful to the hon. Gentleman for mentioning the independent reviewer of terrorism legislation, because David Anderson has consistently said:
“The only sure way to prevent absconding is to lock people in a high security prison.”
As I said at the beginning of my speech, that option, without charge or prosecution, has already been struck down by the highest courts in the land.
Yvette Cooper
The Home Secretary has not answered the point raised by my hon. Friend the Member for North Durham (Mr Jones). He specifically said that the independent reviewer has said:
“The possibility of relocation has now been removed. That step was not required by the courts …which had indeed shown themselves generally supportive of relocation as a deterrent”
to terrorism-related activity. The Home Secretary has just claimed that the Government had to get rid of relocation because it kept getting struck down by the courts, but the independent reviewer has said the complete opposite. He has said that the courts supported the principle of relocation. Will she now make clear her view: does she simply think the independent reviewer is wrong or will she now withdraw her previous comments?
Mrs May
I will repeat precisely what I said a few minutes ago, which is that what the right hon. Lady never tells this House is that forced relocation was struck down by the courts in four control order cases. The point is that she and others speak about relocation in this House as if it was never queried, but it was; in four cases it was struck down.
Lyn Brown (West Ham) (Lab)
Will the Home Secretary clarify whether the principle was objected to by the courts?
Mrs May
What I have made clear is that the courts struck down forced relocation in a number of cases. That is a fact that the shadow Front-Bench team never put before this House.
The Opposition’s motion also raises a number of other issues, as the right hon. Lady did in her speech, so let me start by addressing the issue of the two-year time limit. Again, the Opposition do not tell us the whole story. If the police or Security Service observe any of those individuals engaging in new terrorism-related activity, they can apply to have a new TPIM placed on that subject. That is something that is entirely open to them. Besides, people coming off restrictions is nothing new. Convicted prisoners serve their sentences and are released every day. Opposition Members can say what they like, but that also includes people convicted under the Terrorism Acts.
Hazel Blears
It would help the House enormously if the Secretary of State could confirm now whether she is prepared to look at the recommendation from David Anderson that at the end of a TPIM there be some power similar to licensed conditions when people are released from prison, so that at least there is some mechanism for making these people engage with the authorities, whether it is the National Offender Management Service or the probation service. There needs to be some vestige of control over those people’s activities.
Mrs May
I will come on to those points about individuals in general and individuals who are coming off TPIMs. As I have said, if individuals have been conducting new terrorism-related activity, it is perfectly possible for a new TPIM to be established and for a request to be made for that TPIM to be applied to those individuals.
The Opposition can say what they like about the issue of the two-year time limit, but I suggest that the fact that people are released having been convicted under the Terrorism Acts suggests that there are people released on to our streets who have been involved in acts of terrorism.
Mr Straw
I am grateful to the right hon. Lady for giving way. Having been in her position, I remember what it is like trying to defend a very weak position. To compare people who are released from prison under terrorism legislation with people whose TPIM comes to an end is no comparison at all. Will she acknowledge that if someone is released from prison after serving a lengthy sentence for terrorism offences, they will be on licence and they are eligible to be recalled to prison straight away without any further court proceedings?
Mrs May
As my hon. Friends are saying from a sedentary position, there is a basic difference between the individuals: one set of individuals has been prosecuted, convicted and put in prison. The suggestion that somebody who has at some stage been involved in terrorism activity is never allowed to be released on to the streets is not correct, yet that is the impression that the Opposition sometimes give. In their comments on control orders, they fail to concentrate on the fact that 43 people who were on control orders came off their restrictions. That may have been because the orders were allowed to expire or they were revoked or quashed by the courts, or people may have absconded. As I have said, even before TPIMs were introduced, the courts would simply not allow people to be parked permanently on control orders. When the Commissioner of the Metropolitan Police was asked whether he had concerns about time limits, he said, “I do not think so.”
Pete Wishart
It has come to something when the Tories are having to lecture Labour on civil liberties. Why does the right hon. Lady not just test the evidence? Why does she not make sure that those who are on TPIM orders are taken to the courts so that the courts can decide? Surely that is what we do in a democratic society.
Mrs May
We take individuals to court where it is possible and where there is evidence on individuals to prosecute them for crimes under the Terrorism Acts. The court is then able to make those decisions. The issue is what does society do with the individuals we are not able to deport or to prosecute. The Government took the decision at an early stage that we introduce TPIMs and give them a two-year time limit. That matter was debated and discussed in this House.
Thomas Docherty
I am grateful to the Home Secretary for giving way. Further to the point raised by the hon. Member for Perth and North Perthshire (Pete Wishart), can she confirm on how many occasions the First Minister of Scotland or Scottish Ministers have lobbied her, expressing concerns about this or any future arrangements?
Mrs May
I am happy to say to the hon. Gentleman that these matters of security are reserved matters for us here in Westminster. I have not looked at the debate on these issues in Hansard, but I would not be surprised if the hon. Gentlemen from Scotland or indeed Northern Ireland took part.
I will now make some progress. On the specific cases, the police and Security Service have now been working for some time to put in place tailored plans to manage each individual once their TPIM restrictions are removed. Those plans, which are similar to those put in place for the release of prisoners who have served their sentences, are kept under constant review, and they are similar to the plans the police and Security Service use every day to manage other suspects who are not subject to restrictions.
I completely reject the suggestion that the Opposition are putting about that the police and Security Service have not carried out proper risk assessments of these individuals. They have done so because that is their job, and they have put in place specific, tailored plans to deal with each individual.
Ian Paisley
Will the Home Secretary spell out very clearly that this will not be like the licence system? When the Labour party was in government, hundreds upon hundreds of licensed prisoners—including mass murderers—were released from our jails in Northern Ireland. Those people were at large to commit crime and their licences were only revoked after they had committed another crime. That was not good management. Will she assure us that the management system that will be put in place will not be like the licence system?
Mrs May
The hon. Gentleman brings considerable experience of this matter to the House. As I said, the police and Security Service have been putting plans in place for those individuals who will come off TPIMs, and they are similar to the plans they use every day to manage other suspects who are not subject to restrictions.
Mrs May
I am going to make some progress as I have taken quite a few interventions.
We continue to believe that the best place for a terrorist is behind bars. As I have said, if the police and Security Service find any individual engaging in new terrorism-related activity, the police will seek to have them prosecuted. If that is not possible, it is open to the police and Security Service to recommend that a new TPIM notice should be imposed.
In response to an earlier intervention from the hon. Member for North Antrim, I said that I would talk about the new powers that we have introduced. We have not just given extra money to the police and Security Service; we have strengthened their powers. In April last year, in a written statement to the House, I explained how we would use the royal prerogative to remove passports from British nationals who we believe want to travel abroad to take part in extremist activity, terrorist training or other fighting. That has significantly enhanced the security services’ powers in this area and the prerogative has already been used on several occasions, helping to disrupt terrorist suspects who want to travel abroad to gain skills or contacts that they could use to plot attacks in this country.
Yvette Cooper
In the cases of several of the six people expected to be released from TPIMs this month, the concerns raised were that they would travel abroad to be involved in terrorist activity. Can the Home Secretary tell us whether that power has been used to remove the passports of any of those who are coming off TPIMs this month?
Yvette Cooper
The Home Secretary answered this question when she was asked about Mohammed Ahmed Mohamed, and specifically about his passport—she initially gave an incorrect answer to the Home Affairs Committee, which she then corrected. If she was prepared to answer a question about his passport, why is she refusing to answer legitimate questions about the attitude towards the passports of these suspects?
Mrs May
I should have thought that the right hon. Lady would have been able to distinguish between the information given to this House about the passport of Mohammed Ahmed Mohamed and the question of whether the royal prerogative has been exercised.
Given the conflict in Syria, powers to disrupt terrorist travel are now particularly vital. The UK already has some of the most robust and effective legislation in the world to deal with suspected terrorists and those suspected of engaging in terrorist-related activity, both in the UK and abroad. We will not hesitate to use every power at our disposal. If a terrorist suspect is a dual national, I will consider deprivation of their British citizenship, and the Government are considering strengthening our legal powers in that area. If a suspect is a foreign national, the Government can exclude them from the UK. This Government have excluded more foreign hate preachers than ever before.
We will further increase our efforts to remove foreign nationals from this country where they threaten our national security. After this Government finally secured the deportation of Abu Qatada—who was, of course, one of the original Belmarsh detainees—we introduced the Immigration Bill to make it easier for us to get foreign terrorist suspects out of our country. The Opposition failed to vote for that Bill on Second Reading.
As well as tackling foreign terrorist suspects, we are doing more to stop home- grown extremism. This summer, we saw events that shocked the nation, with the horrific killing of Drummer Lee Rigby in Woolwich and the murder of Mohammed Saleem in Birmingham. Last month the Prime Minister announced new measures to tackle extremism, with the outcome of the extremism taskforce, which was established in the wake of those tragic events. That built on the revised Prevent strategy, which we extended to cover all forms of extremism, including non-violent extremism. We have already had success in restricting extremist speakers. Many events with extremist speakers have been referred to the police, some have been disrupted, and in other cases, venues have been persuaded not to host speakers with extreme views.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
That does not answer the central point. In January 2011, when introducing TPIMs, the Home Secretary said:
“there is likely to be a small number of people who pose a real threat to our security, but who cannot currently be successfully prosecuted or deported...no responsible Government could allow those individuals to go freely about their terrorist activities.”—[Official Report, 26 January 2011; Vol. 522, c. 307-8.]
In relation to the five or six people who will be released, what assurance can she give to Parliament that they will not now go about their terrorist activity?
Mrs May
The right hon. Gentleman is correct in saying that there are some people whom it is not possible to deport or prosecute. That is the sentence I opened my speech with. That is precisely why we have the TPIM measures as possibilities to be used for certain individuals.
In addition to the other measures I have spoken about, more than 21,000 items of illegal terrorist content have been taken down from the internet. As I have mentioned, we have excluded more preachers of hate from this country than ever before. While some Labour politicians positively welcomed the likes of Yusuf al-Qaradawi to London, under this Government foreign hate preachers are not welcome here.
We are stopping terrorist suspects travelling abroad, we are depriving them of the option of coming back, we are deporting foreign terrorist suspects and we are doing more to tackle home-grown radicalisation.
Yvette Cooper
The Home Secretary has not answered the basic question about whether these six men still pose a risk. Let me ask her about one of them, the man known as CD. She has told us plenty about him before and has said plenty to the courts. She told us plenty about Magag and Mohamed. Why does she not simply tell us now whether she believes that CD still poses a risk that he will pursue terrorist-related activity—yes or no?
Mrs May
I have made it clear to the right hon. Lady and to the House that of those individuals who are coming off their TPIMs, the police and the Security Service have made a proper risk assessment and have put in place measures to ensure that they are dealing with those individuals in the way that they believe is appropriate. Those are decisions that they take.
Mr Tom Harris (Glasgow South) (Lab)
I am grateful for the Home Secretary’s patience. I am sorry to try it, but I really do not think that she has answered the question from my right hon. Friend the shadow Secretary of State. She was asked whether she believes that CD currently represents a threat. She responded by saying that an assessment was carried out. That is not the answer. Does she believe that CD poses a threat to the public safety of this country?
Mrs May
I recognise that quite a few hon. Members, possibly including the hon. Gentleman, want to speak in the debate and time is pressing. For every individual who comes off a TPIM, an assessment is made of the risk that they pose. That assessment is properly made by the police and Security Service, and that is a decision that it is right for them to make. They put into place the appropriate measures that they believe are right in order to deal with those individuals, as they do—as I have said—with other suspects, other people who are of concern, people who have not been on TPIMs or control orders.
The other issue is ensuring that we have successful prosecutions. There have been some notable recent successes. In the year to 30 June 2013, 40 individuals were convicted for terrorism-related offences, under both the Terrorism Acts and non-terrorism legislation, and a further 15 defendants were awaiting trial on 30 June 2013.
Those convicted include Irfan Naseer, Irfan Khalid and Ashik Ali, from the Birmingham area, who were convicted in February 2013 of offences including: travelling to Pakistan for training in terrorism; collecting money for terrorism; assisting others to travel to Pakistan for training in terrorism; recruiting others for terrorism; and planning a bombing campaign, which was assessed to be potentially on a scale greater than the 2005 London bombings. Naseer was sentenced to life imprisonment for each count and will serve a minimum term of 18 years. Irfan Khalid received a sentence of 23 years. Ashik Ali received a sentence of 20 years.
On 30 April 2013 six men, also from Birmingham, pleaded guilty, following a police investigation, to preparing acts of terrorism. They had intended to attack an English Defence League rally in Dewsbury using a home-made improvised explosive device and various other weapons. Three of the men were sentenced to 19 years and six months, and the other three were sentenced to 18 years and nine months.
We should not forget that we must also tackle the threat from far-right extremism. Last year the police arrested Pavlo Lapshyn, who pleaded guilty to the murder of Mohammed Saleem in April 2013 and IED attacks on three mosques in the west midlands. He received a life sentence with a recommended minimum tariff of 40 years. Unlike the Labour party, which was content for convicted terrorists to be released halfway through their sentence, this Government have proposed that those convicted of serious terrorism offences should no longer be automatically released at the halfway point of their sentence without an assessment of their suitability for release.
To keep us all safe, our police and security services do exceptional and often dangerous work every day. I am sure that the whole House will join me in paying tribute to their skill, courage and dedication. TPIMs are just one weapon in the considerable armoury of powers at their disposal. But the Government have shown that we are committed to doing all we can to support the police and Security Service in tackling the threats we face. That is why we have enhanced our powers to disrupt terrorist travel, we will help deport foreign terrorist suspects, and we have given the police and the Security Service tens of millions of pounds in extra funding each year. The police and the Security Service do a tremendous job in keeping our country safe. Rather than questioning their work, we should be supporting them with the powers and resources they need. That is why the Opposition’s motion deserves to fail.
Mr Speaker
Order. In order to try to accommodate the number of Members who wish to contribute to the debate, I am afraid that I will have to impose, with immediate effect, a seven-minute limit on Back-Bench speeches.
Mr Jack Straw (Blackburn) (Lab)
Achieving a balance between the liberty and freedom of citizens on the one hand, and the safety and security of the same citizens on the other hand, is a fundamental duty of this House and a fundamental responsibility of any Home Secretary. Since it is not possible to exercise more abstract freedoms and liberties without the freedom to live one’s life in peace and security, identifying where that balance lies will always be difficult and must take account of the particular circumstances of the age in which we live.
The Home Secretary opened her remarks—we should all be grateful for her generosity in giving way—by referring to the fact that all these orders were in the shadow of the attacks of 11 September 2001. Given that the scale of the terrorism and its threat had not before been experienced here, or anywhere else around the world, changes were made that then had to be altered in the light of experience.
I am not suggesting for one second that every change the Labour Government initiated or proposed was exactly right, because it was not. We had to learn from experience. I do not think that anyone who has held the office of Home Secretary—I am glad to see my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) in his place—would suggest that they got everything right.
However, I believe that by the end of our period in government, including the reforms introduced in 2007, the regime of control orders was broadly operating better than any alternative for dealing with the very small minority of dangerous people who, for reasons with which the House is fully familiar, could not in practice be prosecuted for the offences which it was understood in other circumstances they had committed or were likely to commit. Some would say, “We should just leave these matters to the courts.” At least the main parties are agreed that some people are so dangerous—as confirmed by information sufficiently reliable for the courts, albeit in closed proceedings—that they cannot just be left at large. No Government and no Home Secretary would survive if we washed our hands of the risks before us and then an aeroplane was blown up with hundreds of UK citizens on it, or bombs were let off. Control orders, imperfect though they are, and although they should be used only in extreme circumstances, were introduced to deal with those threats.
I never understood, and we have had no reliable explanation today, why on earth the Home Secretary decided, with no explanation whatsoever, to change control orders, which were working, to a weaker system of which there are two fundamentally different features: first, an arbitrary time limit, which she did not need to impose; and secondly, the removal of the relocation provisions, which was not required by the courts. She referred to four cases, I think, where she said that the courts said that they were not appropriate, as opposed to being struck down, because that phrase is about striking down legislation. The courts had decided, quite rightly, in the instant case, that they were not going to approve that part of the control order. That is what the courts are there for. They were not striking down relocations; they were merely saying “Parliament asked us to substitute our judgment for that of the Home Secretary. That is precisely what we have done. We do not think this is justified in these circumstances.” By the end of this process, no individual for whom a relocation order had been confirmed then absconded, whereas the Home Secretary has been faced with the reality that the system she introduced is very much weaker.
Andrew Gwynne (Denton and Reddish) (Lab)
My right hon. Friend is absolutely right to draw on his experience as Home Secretary and that of my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson). Perhaps the current Home Secretary should have drawn on the experience of Lord Howard, who was Home Secretary in the previous Tory Administration and who said:
“If you ask me my personal view…I would have preferred the relocation provisions to have remained.”––[Official Report, Terrorism Prevention and Investigation Measures Public Bill Committee, 21 June 2011; c. 17, Q53.]
Mr Straw
I am sorry that the Home Secretary did not say, as I think anybody who has held that office would say, “Okay, we’ve made these changes but we’re willing for them to be reviewed on a cross-party basis”, which is the gravamen of what is proposed in our motion.
The Home Secretary was asked, I do not know how many times, whether she regarded those whose TPIMs are about to end as still posing a significant risk to the public. In other words, we seek her judgment as to whether, if there were no time limit, she would be seeking to maintain those TPIMs. However, answer came there none. What she did say, which I greatly regret—I do not think it fits the office—was, “The police and the intelligence agencies have judged that they posed no substantially increased risk.” That is damning the current regime with faint praise. Of course she has to take advice from the police and the security agencies, but she knows very well that she cannot subcontract the responsibilities of this House and the statutory responsibility of the Home Secretary to unnamed police and intelligence agents; she has to make the judgment herself. The legislation does not say that the decision about whether to apply for a TPIM—as, before, with the decision about whether to apply for a control order—should be delegated to a panel of the police or the intelligence services. It is a judgment for her.
We needed to know, not least so that we could understand the Home Secretary’s own confidence in the measures that she has recommended to the House, whether she thought that the individuals in question continued to pose a risk. She did not answer that question. That is one of a great many reasons why I believe that she herself has little confidence in the process that she has brought into legislation and why we should strongly support the motion in the name of my right hon. Friend the shadow Home Secretary.
Sir Edward Leigh (Gainsborough) (Con)
I broadly support what the Home Secretary is trying to achieve on TPIMs. As far as the public outside will be concerned, the debate has been rather skewed, because for most of it a Conservative Home Secretary has been attacked by the Labour party on a civil liberties issue. The House should not indulge in party political attacks but should reflect what our constituents want, which is to feel that they are safe. They want our Home Secretary to do whatever is necessary for that.
Before I deal with the issue of whether TPIMs or control orders are right, I point out that as far as most Back Benchers and most members of the public are concerned, TPIMs are simply control orders-lite. There is not a huge difference between them. I will deal with the issue of relocation in a moment, but first I wish to support both the Labour Government and the current Conservative Government in having such orders at all, because they are under attack from the civil liberties lobby. If there is a choice for me, as a father, between my daughters being blown up on a London tube, or our constituents being attacked by people who detest everything we stand for and all our liberal values, and there being some minor infringement of those people’s civil liberties, I know what choice I will make. I suspect that 90% of the population would make the same choice.
It is said that such orders are a gross infringement of civil liberties. I am on record as being an advocate of our jury system, I have never wanted to give the police extra powers and I recognise all the ancient arguments for our civil liberties. However, given the danger that some people pose and the views that they hold, what is the gross infringement on their civil liberties that we are talking about? Overnight residence measures; electronic tagging; restrictions on communication or association; exclusion from particular places; overseas travel bans; restrictions on bank accounts; restrictions on the transfer of property; limitations on the possession and use of electronic communication devices; work or studies measures that require permission to be obtained for specific activities or notice to be given prior to any work or studies being carried out; measures requiring regular reporting to a police station; and measures requiring the individual to allow himself to be photographed. Are those grotesque violations of those people’s civil liberties? No.
Sir Edward Leigh
The hon. Gentleman is living in a dream world. Does he appreciate what these people are trying to do? Does he understand the level of danger they pose?
Mark Reckless (Rochester and Strood) (Con)
Surely what is important is that those individuals are being deprived of those liberties without due process, a trial and conviction, on the basis solely of suspicion, albeit in many cases potentially justified suspicion.
Sir Edward Leigh
We know that there is some evidence, such as intercept evidence, that is difficult for the Home Secretary to bring to trial. Surely we must have some faith in our Home Secretary. Surely we respect her and the instruments of justice as having the public interest at heart. They are in no way inclined to restrict anybody’s civil liberties unless there is good reason.
Dr Huppert
Would the hon. Gentleman like to explain how his list is not a major problem to somebody like Cerie Bullivant? He was on a control order that was scrapped by the courts because there was simply no evidence, and he was found not guilty when there was a criminal trial. How would the hon. Gentleman explain to him that the two years he spent under that control order was not an infringement of his basic rights?
Sir Edward Leigh
This is not actually the moment; the Government have moved on from control orders, but that is another issue. I would say that if there has been a trial and that person has been found not guilty, fair enough. There may, however, be reasonable suspicion that somebody poses a real danger to the public. This whole debate has been skewed because the Labour party has attacked the Government from the right, but I am more interested in what the public think. When the public look at the appalling outrages that have taken place, and when they consider the plots to blow up hundreds of innocent people for no reason at all, I do not think that most of them think that the sorts of measures that the Labour Government brought in, and that our Government are enforcing, are such a dramatic infringement on our traditional way of life. In that sense I support the former Labour Government; I think they had to act as they wanted, although we know there was a problem with the courts.
It does not seem to me that TPIMs are so very different from what we had before. They are instigated by the Home Secretary with the permission of the High Court, and they are granted on the basis of a reasonable belief in the subject’s involvement in terrorism—that all sounds quite sensible. That is, I agree, a higher threshold than the one for control orders, which required “reasonable suspicion”, but as far as the public are concerned, is there a great deal of difference between the “reasonable suspicion” that was required under the former Labour Government, or a reasonable belief in the subject’s involvement in terrorism? I do not think so; that is not a great difference between control orders and TPIMs. The Home Office memorandum on the Terrorism Prevention and Investigation Measures Act 2011 states that the Home Secretary must reasonably—again, “reasonably”, and all this is subject to judicial review—consider
“that it is necessary, for purposes connected with protecting members of the public”.
Let us always focus on members of the public. That is what we are here for, not to debate party political issues. I wish those on our two Front Benches could get together on this issue; it is a matter of national security.
Sir Edward Leigh
I am sure that on a Privy Counsellor basis, the Home Secretary would be happy to brief the right hon. Lady. I am speaking as a Back Bencher, but it seems that when the public are concerned, and when there are people who hold such dangerous views, it is not unreasonable for us as members of the public to ask our two parties of state to work together on this.
The memorandum says that the Home Secretary must reasonably consider
“that it is necessary, for purposes connected with protecting members of the public from a risk of terrorism,”
and with preventing or restricting the individual’s involvement in terrorism-related activity,
“for TPIMs to be imposed on an individual.”
That is not unreasonable.
There are two points to consider and I understand the attack from the Labour party. I also understand that the High Court had a problem with relocation, but I would have thought we could find a way through that. If relocation was absolutely necessary from the point of view of protecting the public, I do not think it unreasonable —I have been listening to the shadow Home Secretary—for there to be some requirement for relocation.
Sir Edward Leigh
I hope my hon. Friend does not mind, but I must finish in a few seconds. I will end with this point, although I would like to be able to give way.
We have a right to know that these six people are now safe to be released on the streets. That is a reasonable question. The Home Secretary’s reasonable point of view is that there must be some new evidence that they continue to be a threat to the public, and we cannot keep someone under a control order for ever on the basis of information that is two years old. I think that is her point of view, and that is how TPIMs differ from control orders. From a rational and objective point of view, that is not an unreasonable stance.
When the Minister sums up the debate, without going into operational details, I would like him to seek, as best he can, to reassure the House that those people have behaved themselves over the past two years, that there is no evidence of new involvement in terrorism, and that in his view, they will not be a threat to society. That would be entirely proper for the Minister to do. Surely all the public want is reassurance that they and their children are safe, and it is the job of us in this Parliament to ensure that those children are safe.
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
It is a pleasure to follow the hon. Member for Gainsborough (Sir Edward Leigh), who spoke for the public. It was the kind of speech that should have been made by someone on the Treasury Bench.
To join in the debate with the national union of current and former Home Secretaries, it is important to stress that nobody wants control orders or TPIMs. In our free society, no one has ever issued a control order without a heavy heart—and the current Home Secretary issued control orders before the change.
The best solution would be to have the ability to use intercepts as evidence. There is full agreement in the House on that, but Sir John Chilcot’s cross-party Privy Council review could find no practical way of doing it. I briefed the current Prime Minister and the Deputy Prime Minister, and we accepted that there was no way forward. Added to that, an authoritative review by senior counsel found that using intercept evidence would not have made a difference in nine cases they examined.
We are therefore stuck in a dilemma. The hon. Member for Gainsborough was right that there is little difference between TPIMs and control orders, apart from the two main measures we are debating. Shami Chakrabarti has described TPIMs as control orders-lite—Shami’s problem is with “control orders”; my problem is with “lite”. She is right in a way. The Home Secretary’s review came to the same conclusion as the previous Government—I was confident that it would. The argument is not about sending people through the courts. There is a small number of people whom we can neither deport nor send through the courts, so we must have a process.
We use control orders or TPIMs with a heavy heart, but there is no alternative. I have the affliction of seeing the other side of the argument, which affects all hon. Members. I can see the civil rights argument for getting rid of control orders, but I cannot see the argument for keeping TPIMs, which apply to a small number of dangerous people who could be free on our streets wreaking havoc and causing harm, and taking away relocation and the ability to renew.
It is important to stress that the people subjected to TPIMs have not simply looked at a few unsavoury websites or made a couple of inflammatory speeches—an awful lot of people would be on TPIMs if they were used in those circumstances. TPIMs, like control orders before them, are issued on the basis not of an extravagant expression of support for terrorism, but of evidence of an intention to carry out threats. As the Government’s independent reviewer puts it, the suspects are at
“the highest end of seriousness”.
There is complete consensus on that among those on the two Front Benches. When control orders were introduced in 2005, it soon became apparent that, if those subjected to them continued to live within that sphere of influence, making it easier for them to fraternise with their old associates, the order was less effective and the ability to abscond was enhanced.
Dr Julian Lewis
I am following the right hon. Gentleman’s argument closely. Although I intend to vote with the Government, I find common ground with him on the question of relocation in one respect. Does he agree that, if terrorists move away from the more spectacular type of attack to the type that involves just a small number of them, and if people are not physically located away from one another, it makes things much harder? There will be nothing to intercept if people plan low-level attacks by meeting face to face.
Alan Johnson
Relocation does not have to be part of an order—it would be within the Home Secretary’s box of tools. There would be no argument whatsoever if there was an agreement that that might be counterproductive. I do not think we are over those kinds of threats yet—I take issue with that—but I take the general thrust of the hon. Gentleman’s point.
It would be a different matter if relocation was objected to by the courts, but that is not the case. My right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) quoted David Anderson and others. It would be a different matter if the removal of relocation was required by the Government’s independent advisers, but David Anderson thought we were going backwards on protecting the public. That is what he said in his first review, in so many words. Those on the Liberal Democrat Benches do not like to listen to Lord Carlile, and neither would I if I was in their position, but David Anderson’s predecessor said:
“On the evidence available, I am persuaded firmly—I choose my words carefully—to the view that it would be negligent to remove relocation from the main provisions.”
Both Governments’ reviewers said the same thing.
It was me who placed the control order on Ibrahim Magag, who was relocated away from London. Why was he relocated away from London? Because the ruling of Lord Justice Collins was that
“it is too dangerous to permit him to be in London even for a short period.”
That was the courts, not me. Why on earth did the current Home Secretary allow him back into London, enabling him to hail a taxi and disappear? In times past, media pressure would have meant a taxi being ordered for the Home Secretary.
Richard Fuller
As the right hon. Gentleman is making such a substantial point on relocation, and as he is experienced in the use of control orders, can he advise the House which other European Union countries have relocation as part of their protections against terrorism suspects, and, if it is not used in other EU countries, why does he think it is particularly apropos in the United Kingdom?
Alan Johnson
We could have a seminar for hours on other European countries and their much better abilities to detain, and to detain for many years, as we have seen with suspects in France. The hon. Gentleman’s Government reviewed this and decided that they needed an element that they could call a control order. The “T” in TPIMs did not stand for temporary; it stood for terrorism. Having concluded that, why would relocation be removed? That is a mystery to me. The Home Secretary herself placed the control order on Mohammed Ahmed Mohamed, before control orders were changed to TPIMs. Humiliatingly, he has absconded.
The two-year limit is completely arbitrary—that is the mystery. It is not as if a terrorist who has served a sentence is about to be released after a period in prison. TPIMs relate to people who, we had cause to believe, posed a danger. The question we have asked consistently of the Home Secretary is why, after this arbitrary period, do they suddenly not pose a threat?
I am very familiar with the activities of three of the people covered by TPIMs. Incidentally, one of them is known as DD. I am not sure if that is a reference to the right hon. Member for Haltemprice and Howden (Mr Davis), who may well have been put under one of these orders by his own Front Bench. Those three people do not have to be engaged in any fresh activity for me to be extremely worried about their release. Indeed, it is a curious point that TPIMs come to an end if people subject to them are not engaged in any fresh terrorist activity. That suggests that TPIMs are so weak that people on them could be gaily getting involved in fresh terrorist activity. However, it is not the fresh terrorist activity I am worried about, but the original reasons for the order.
Let us go back for a moment to the Home Secretary’s words, which we have heard before. She said that there are
“a small number of people who pose a real threat to our security”,
and that
“no responsible Government could allow these individuals to go”—[Official Report, 26 January 2011; Vol. 522, c. 307-8.]
back on the streets. The motion is genuinely trying to reach a consensus. This matter is too serious for us to score political points. Parliament is concerned that people previously thought too dangerous for our streets will now be released. We need to find a solution, and I urge the Treasury Bench and Government Members, if not to support our motion, which might be too much for them, at least to find a similar way to reach a consensus on this issue.
Mr Robert Buckland (South Swindon) (Con)
It is a pleasure to follow the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), and I particularly take on board his last exhortation. He is absolutely right: when it comes to national security, party politics should recede into the background and the common interest of Members of Parliament, whether acting as legislators or residents—or as parents, as my hon. Friend the Member for Gainsborough (Sir Edward Leigh) reminded us—should guide us in our deliberations.
The TPIMs debate is finely balanced. I took part in the Bill Committee on what is now the Terrorism Prevention and Investigation Measures Act 2011, and I sit on the Joint Committee on Human Rights, which this week will publish its post-legislative report on the Act’s implementation. While it would be wrong of me to pre-empt its findings, personally, I can offer some opinions on where the balance needs to be struck. I am sure that the first principle that needs to be emphasised is accepted by most, if not all, Members. The fundamental basis from which we all start must be the rule that individual freedom should be curtailed only where there are reasonable grounds for arrest or sufficient evidence to charge a suspect, or where custody is the only appropriate sentence after a finding of guilt. Any departure from that rule has to be exercised sparingly and within the narrowest parameters, and cannot involve indefinite or permanent deprivation of liberty. Balanced against that important principle has to be the duty of the state and its agents to safeguard us in our daily lives, which is why the activities of our security and intelligence services deserve our strong support and praise.
Bob Stewart (Beckenham) (Con)
I have seen people locked up for a long time. When they come out, their resentment and aggression can grow, and what worries me is our assumption that the aggression and resentment of these six people, after two years on TPIMs, will have lessened. I am worried about them just being released.
Mr Buckland
My hon. Friend’s point allows me to make two observations. First, we have to be careful, in setting the parameters of any orders we impose, not to heighten the sense of grievance; and secondly and most importantly, the Government have to take other measures, in terms of the resources given to the security and intelligence services, the work done by Prevent and the counter-terrorism work done day in, day out to supplement the TPIMs regime. Is there not a danger that in dwelling on the detail of TPIMs, we ignore the bigger picture and the Government’s welcome injection of extra resources into this area of activity?
The constant vigilance of our security services is not only underpinned by statute, but, as the Home Secretary said, exercised by use of the royal prerogative, which is still the residual source of authority for Government activity in this area and which I know is used daily. The motion calls on the Government to share with the Intelligence and Security Committee the full assessment of the threat or otherwise posed by the six individuals who are to exit the TPIMs regime imminently, and then subject it to a cross-party review. However well intentioned that might be, to link such a process with individual cases is misconceived, because it risks bringing a Committee of Parliament into the field of operations. It is the job of parliamentary Committees to consider the strategy and the legal structure; it is not their job to consider operational matters, and I can see any cross-party review falling foul of that problem.
Mr Sutcliffe
What does the hon. Gentleman see as the role of the Intelligence and Security Committee? It looks at lots of issues that are reported to it about the threats the country faces, which ordinary Members of Parliament cannot see.
Mr Buckland
I accept the hon. Gentleman’s point about the role of that Committee and its structure, which perhaps allows it to go into more intimate detail than debates on the Floor of the House would allow. However, if members of that Committee were to intervene—I am sure some of them will take part in the debate later—I think they would hesitate before allowing the ambit of the Committee to include looking at individual operational matters. That really is not the role, as I see it, of a Committee of Parliament such as the Intelligence and Security Committee.
TPIMs are already subject to a number of reviews. We have heard a lot about the independent reviewer, David Anderson, QC, and his annual reports, which give a helpful and comprehensive analysis of the effectiveness or otherwise of TPIMs. There are also, of course, quarterly reports to Parliament made by the Home Secretary, and I have already mentioned the work of the Joint Committee on Human Rights. As I understand it, the Government intend to carry out a broader review of counter-terrorism measures, which will no doubt include the operation of TPIMs. For all those reasons, it seems unnecessary to call for a cross-party review at this stage.
Let me deal with some of the points that have sparked debate this evening, the first being the question of absconsion. The very nature of such orders means that the risk of absconsion will always be present, whatever the conditions may be. The only way to prevent absconsion is to lock people up, and doing so without trial falls foul of fundamental principles that we should all share as democrats and lovers of liberty. There is an argument I have heard that the risk of absconsion would be higher if TPIM subjects remained in their local communities, but to my way of thinking it is equally arguable either way. It is equally arguable that a person placed in another part of the country, isolated and therefore disengaged from their community, would want to abscond as well.
The truth is that there is no clear evidence to support the contention that the lack of relocation powers in TPIMs has led to more absconsions. When it comes to the reasons for those absconsions, Ministers must satisfy themselves that the secret services and the police are taking every step possible to reduce the risk posed to the rest of us by such people and that suitable resources are available to deal with the situation. That is why the increase in resources by the Government is so important.
As an investigative measure, TPIMs are a bit of a misnomer in my view. I agree with the view of David Anderson that the investigatory part of TPIMs has not been effective. There is no evidence to suggest that they have in any way led to further prosecutions. What they are is a preventive measure. That was the view of the reviewer and it is certainly my view. I agree with him that TPIMs are likely to have prevented terrorist activity and, most importantly, they will have allowed resources to be released from deployment on the former control order regime, to deal with other pressing national security targets. Those are not my words; they are the words of David Anderson in his last review, and I agree.
We have heard about exit strategies. It would be wrong to explore individual cases, but—to return to the point made by my hon. Friend the Member for Beckenham (Bob Stewart)—some information about the work being done in the wider counter-terrorism context would be welcome, whether it be general information about the Prevent strategy or information about the work of the new extremism taskforce, which was set up in the wake of the appalling Woolwich murder.
Much has been made of time limits, yet an inescapable truth has been avoided by some Opposition speakers: that the indefinite use of control orders would inevitably be subject to legal challenge in the continuing absence of guilt. The argument about time is therefore rather an artificial one and does not advance the merits of the case much further forward.
In a nutshell, it would be wrong to characterise the introduction of TPIMs as a wholesale diminution of the Government’s resolve to tackle terrorism. To say so does no service to the issues that we are dealing with. Let us return to the approach outlined by the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), the former Home Secretary, and rise above petty party politics.
Mr Speaker
Order. Given that hon. Members have taken their full complement and interventions to boot, the time limit will have to be reduced, with immediate effect, to six minutes.
Keith Vaz (Leicester East) (Lab)
I shall not take that personally. Because the Select Committee met at the same time as the Opposition Front Benchers called for this debate, I was not able to be here for the excellent speech of the shadow Home Secretary or to hear what the Home Secretary had to say. I would like to take up the theme started by the former Home Secretary, my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson)—and, indeed, continued by the hon. Member for South Swindon (Mr Buckland)—in urging us to look beyond any partisanship in dealing with counter-terrorism issues.
One feature of our discussions on the Floor of the House—and it applies to Select Committee discussions, too—is the need to understand that we are living in a very dangerous age. That highlights the importance of our trying to build on the consensus that I believe is so important when dealing with counter-terrorism issues. The Select Committee is in the middle of its inquiry into counter-terrorism and is just about to look at a report on TPIMs that will be published next week. I have just read the report. I shall speak very briefly about it because, having just read it, I do not want inadvertently to leak any of it. When Members get the chance to read it, I hope they will find it to be a measured and all-party report. One feature of a Select Committee is that progress is made on an all-party basis.
I shall flag up three personal concerns. First, what on earth is going to happen to all the people who are on TPIMs and are about to be removed from them? That is an important question, and I hope that the Minister will answer it. I entirely accept what the hon. Member for Beckenham (Bob Stewart) said in his intervention on the hon. Member for South Swindon—that if we go to the trouble of making people subject to TPIMs, we need to think about what it will do to those people if the orders are suddenly stopped. One problem with control orders and TPIMs has been the lack of engagement with those who have been subject to them. The Government will have to introduce some kind of measure to replace the one that is about to expire for so many people, so I hope we will be able to ensure not only proper monitoring of those individuals, but appropriate engagement with them.
We heard evidence in our last session from Cerie Bullivant, a young man who, through association with another individual whose brother was a subject of interest to the security services, was put under a control order. His view was that control orders and TPIMs were exactly the same, but he felt that his life had been transformed by the experience—he became even bitterer because he had been made the subject of such an order. When we are dealing with situations of this kind, we must have these orders, but we must also engage with these people. If we do not, when the order ends, we will be in the same position or an even worse one than when we started.
Secondly, I am still not clear about what has happened to the two individuals who have escaped from their TPIMs—Ibrahim Magag and Mohammed Ahmed Mohamed. We have had no explanation of what action has been taken. I recall statements being made by Ministers and I know there was a dispute about whether the passports had been retained by the Home Office and the police. Frankly, however, we must have clarity on those points of detail. We know the circumstances of the two individuals who decided to break their orders, but as we come towards the expiry of the orders for the others, we still do not know where these people are. Presumably, we will make no attempts to find them, for what is the point of trying to find people when their orders have expired?
Finally, I want to say something about foreign fighters. The Committee took evidence from Charles Farr of the Home Office, and we have heard speeches from the head of the security services. These are issues of great importance to the House. What concerns us is not just those who go abroad, but those who come back and then infect other people with their ideology. We need a new counter-terrorism strategy that brings the community on side with us so that they are our eyes and ears. We cannot simply feel that we can prevent this happening; without engagement, we will not be in a position to deal with these dangerous times.
Dr Julian Huppert (Cambridge) (LD)
It is a pleasure to follow the Chair of the Select Committee.
A number of principles are at the heart of what we stand for, which is the way of life for which we are fighting. We may not agree on all of them, but one of them, surely, is that people are innocent until proven guilty. That is how our legal system starts. No matter how awful the crime of which someone is accused, that person should have his day in court, and should be found guilty or not guilty. However, Labour Members have spoken up against that in the House. They have said that when someone has never been convicted of a crime, the key should be thrown away. When we were discussing the legislation in Committee, the then shadow Minister, the hon. Member for Bradford South (Mr Sutcliffe)—I am pleased to see that he is in the Chamber now—said
“there are times when people have to be outside the legal framework.”––[Official Report, Terrorism Prevention and Investigation Measures Public Bill Committee, 23 June 2011; c. 57.]
I do not agree with that as a principle for the rule of law in this country.
Bob Stewart
May I point out that it is not just members of the Labour party who are very concerned when people say that they want to do us harm and we cannot obtain evidence against them? I say that we must do something to keep those people out of harm’s way so that they do not harm our people.
Dr Huppert
I understand what the hon. Gentleman is trying to achieve, but I hope he would stand up for the rule of law, because it is fought for in many places. People who have committed terrorism offences, of which there is a huge range, should be tried, and if they are convicted they should go to jail for a long time. That is the best place for someone who is dangerous.
Mr Tom Harris
The hon. Gentleman has already conceded that he does not stand by his own point. He supports the TPIM regime, which actually allows someone to be punished for up to two years without being taken to trial and convicted. Why does he support that regime?
Dr Huppert
The hon. Gentleman can have a look at the report of the debate in which I described the method that I should prefer, which is far more focused on prosecution, and note the amendments that I tabled.
The system that was set up by the last Government involved secret evidence. People did not know what their orders were based on. There was a huge range of punishments, including long curfews—virtual house arrests—and there was this awful internal relocation. People were not even allowed to be in their own homes. All that could continue for an indefinite period. To me, internal exile without trial does not sound like what I would expect this country to be doing; it sounds like the way in which the Soviet Union would behave. In the review that he carried out for the Government, Lord Macdonald said of relocation:
“This is a form of internal exile, which is utterly inimical to traditional British norms…It is disproportionate and there is no justification for its retention.”
That view was expressed on the basis of a detailed study.
Richard Fuller
Is it not also the case that whenever that regime is in place, the Government of the day—acting as judge and jury in the case of people who have never been brought to trial—will see the Opposition trample over our civil liberties in order to look tougher than the Home Secretary, and try to scare people about what may happen with no evidence that it will happen at all?
Dr Huppert
That is a good point, although I should say in fairness to the Labour party that it has been authoritarian in office and authoritarian out of office. It has at least been consistent in that regard.
Control orders simply did not work very effectively. Astonishingly, there were people who went to court, were tried and were found not guilty, and who then had a control order slapped on them although they had just been acquitted. As we have already heard, a huge number of people absconded. Seven people who had apparently been very carefully monitored wandered off. More important, not a single person on a control order or a TPIM has ever been convicted. As Ken Macdonald said:
“The reality is that controlees become warehoused far beyond the harsh scrutiny of due process and, in consequence, some terrorist activity undoubtedly remains unpunished by the criminal law.”
The view of our expert, the former Director of Public Prosecutions, was that those measures were not helping to prosecute the people who should be prosecuted if they have committed an offence.
The Chair of the Select Committee described the case of Cerie Bullivant, who attended our Committee last week. He was found not guilty and the High Court threw out the control order, two years after the Home Office had imposed it. He has said that
“had I actually been someone dangerous, with criminal intent, the control order wouldn’t have stopped me. Instead all it achieved was to beat me down for two years and change my life forever.”
He said that it would have been no tougher to go on the run under the relocation powers. He went on:
“You don’t have a life while you are under a control order. Everything is as it says on the tin. It is claustrophobic and it is controlled. Every day every sort of action you are taking is being monitored. With all of the conditions upon you that you are constantly worried about breaching and trying not to breach, it is like having a sword hanging over your neck.”
He is a British citizen living in Britain. He had not committed an offence. He was found not guilty and the High Court scrapped the control order. This approach runs against our fundamental sense of British justice, and it does not work. It did not lead to the convictions that I and others would like to see.
There is a collection of things that affect the way in which people see their role in society. Let us consider the control orders and the huge range of anti-terror powers created by the last Government. It was claimed that they were put in place for our safety, but they were abused time and again. We have heard about the push from Tony Blair to allow people to be detained for 90 days without even telling them what they were accused of. We also remember when the anti-terror powers, apparently put in place for our safety, were used when the 82-year-old Labour party member Walter Wolfgang was thrown out of the party conference for heckling about the Iraq war. That is an example of those rules being abused. When I think of a terrorist, I certainly do not think of an old man shouting at a conference. Labour has still not learnt, however.
These measures have a financial cost. They have a moral cost to our country when we tell people around the world how they should behave. They also have the cost that the right hon. Member for Leicester East (Keith Vaz) touched on—namely, the message that they send to people in this country. If we ask many of the people in the Muslim community how they perceive their interactions with this country, they will talk about the pressures resulting from such measures. They will talk about the alienation that they suffer as a result of the schedule 7 searches at ports. They will also talk about the effects of stop and search—the Home Secretary is quite rightly reviewing that policy. When we send people a message that they are suspects because of what they believe, they become more separated from our society and less able to engage. The right hon. Gentleman was quite right to highlight the concerns about that, and the effects that all the rhetoric can have.
Alan Johnson
Will the hon. Gentleman confirm that the report from his Government, led by the very man whom he has just been quoting, Lord Macdonald, found no evidence that control orders had the kind of effects that he is talking about?
Dr Huppert
We can argue about that, but the noble Lord made it absolutely clear that relocation had no place in this. I hope that the right hon. Gentleman will accept that point. He only has to talk to members of the Muslim community around the country, as I have done on many occasions, to find out how they feel victimised by the rhetoric and the legislation that was passed.
We have to get national security right, which is why I want to see a far greater focus on prosecution. I have tabled amendments to try to achieve that. We cannot sacrifice our way of life and our longest-held, proudest traditions because we want to look as though we are being tough, which is what we see in the Opposition motion. I am pleased that TPIMs are much lighter than control orders and do not run for an indefinite period, and that we have got rid of the awful idea of internal exile. I want to see more support given to investigations, and I want people to be convicted in court whenever necessary. That is the right approach, and it is the one that this Government are heading towards. I am disappointed that the Opposition are not standing up for the things that this country holds dear.
Mr Gerry Sutcliffe (Bradford South) (Lab)
It was a pleasure to be on the Bill Committee with the hon. Member for Cambridge (Dr Huppert). He has been consistent in his arguments about the threat to individual and civil rights, and I understand his point. As the former Home Secretary, my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), has said, none of us wants to be in this position. We all want the rule of law to be in place, but there are circumstances, when we are dealing with a small number of individuals who want to do harm to the country, in which we have to take exceptional measures. That is the reason for control orders and that is why we are in the situation we are in today. It was a political decision: the Government of the day—the coalition—decided they did not want control orders, for the reasons that Members have set out tonight. Instead, they wanted to introduce TPIMs.
It is good to see that the Minister who took the Bill through the Bill Committee for the coalition Government is in his place. I had the privilege of leading for the Opposition. It was a good Bill Committee in the sense that we had 10 sessions relating to the very important issues that were at stake. The hon. Member for South Swindon (Mr Buckland) served on the Committee, as did my right hon. Friend the Member for Salford and Eccles (Hazel Blears) and our colleague, whom we have sadly lost, the former Member for Wythenshawe and Sale East, Paul Goggins. He also served on the Intelligence and Security Committee and brought great expertise to bear.
Why are we here today? Why have the Opposition had to bring forward a debate in Opposition time to ask the Home Secretary and the Government what is going to happen at the end of the month when a number of people who have already declared themselves a threat to our country are going to be released because the TPIMs regime has a time limit—and there is nothing in its place to deal with these individuals?
My right hon. Friend the Member for Kingston upon Hull West and Hessle said he had concerns and was aware of three of the six or seven people involved, whom he considered at the time to be a threat to the nation. We have heard nothing today to allay the concerns that he and I have. We have information about the individuals under this TPIMs regime, and until I hear something different, I will consider them to be a threat. I am happy to say that is not my responsibility, however. It is the responsibility of the Home Secretary. It is the Home Secretary who takes out the TPIMs, acting on the recommendations of, and information given to her by, the security forces. I hope the Minister will be able to allay our fears about these individuals who are going to be released because the TPIMs regime lasts for only two years, and there is nothing in place to deal with them.
I noticed that the briefings sent out said there would be a tailored response by the security services to each of these individuals. I understand the Minister cannot go into the detail of what that tailored response will be, but we need to know whether these people are still a threat to our nation and whether they are going to be treated as such.
I christened the TPIMs mini-control orders, which the Minister did not like at the time and I am sure he will not like now. The only difference from the control orders was the issue of relocation and the two-year limit, which went against the advice of the then independent person, Lord Carlile, and the former Home Secretary, Lord Howard. It is interesting to note the views of former Home Secretaries, who have had the unfortunate responsibility of dealing with the nature of this threat. I do not believe that the threat has lifted in any real way; we still live in a dangerous time, and that is why it is right and important to give thanks to the police and the Security Service for the excellent work they do. We should never underestimate, or fail to reflect on, the work they do to stop threats being executed.
I hope that we do reflect on this issue, though it is sad that that has to be done on an Opposition day. I agree with the hon. Member for South Swindon that we should try to find a way to discuss these matters without being partisan. As I have said, the Government of the day took the clear decision that they did not think control orders were appropriate and they considered TPIMs to be a better measure, to restore what they said was the right balance between the individual and society.
The terrorists have only got to get it right once, whereas the security forces have got to meet all the threats. Surely what should be of concern to us all is the safety of the nation. I believe that if there are six people who are a threat to us, we should know about it and we should know we are going to defend our nation in the way we have tried to defend it before. This is an important debate, and we need answers.
I raised the issue of cost. We were told that control orders cost about £1.8 million per individual, yet we are now told the cost is nearer £18 million per individual. Will the Minister deal with that point, and also with the cost of the legal cases since 2012 getting somewhere near £2 million? I am sure we can deal with the details another day, but the principal question is: is the country safer because of TPIMs? We hope that the Minister can give us some positive responses in his reply.
Mr Tom Harris (Glasgow South) (Lab)
Let me start by reminding the House why this debate is taking place today, and to do so I will quote from today’s The Times:
“A terror suspect feared to have been plotting a Mumbai-style attack in London is to be free to walk the streets in days despite MI5 warning against lifting restrictions on his movements.
The security service said there was a ‘real risk’ that the man, known as CD, would attempt to revive plans for terror attacks in the UK if curbs were lifted.”
The report continues:
“Court papers show that the security services judged that CD would be able quickly and covertly to purchase firearms for use in his attack plans and that without a Tpim in place there was a ‘real risk’ that he would seek to revive his plans to carry out attacks in the UK or engage in other terrorism related activity.”
This man is about to go free from all restrictions that have been previously imposed on him, despite the fact that in September 2012, just 15 months ago, the Home Secretary described CD as “a leading figure” in an extremist network in north London, who had displayed a “very high level” of “security awareness”. I found it deeply disappointing that despite repeated questions from myself and from the shadow Home Secretary, the Home Secretary refused to answer a very straightforward and pertinent question: does she still believe that her assessment, delivered to the House in September 2012, is relevant? Does she still believe that CD is a threat? She refused to answer that, so we must conclude that the answer is yes.
Another question to ask is: do Ministers trust our security services? Do they trust the judgment of our security services? I found it odd, almost surreal, that during the debate the Minister for Crime Prevention, the hon. Member for Lewes (Norman Baker), who wrote a book slandering MI5 for alleged complicity in the murder of Dr David Kelly, was sitting supporting the Home Secretary and the release of a number of highly dangerous criminals—terrorists—from their obligations under TPIMs. He was sitting there during the debate offering his support, and Ministers sometimes have to be wary about whose support they encourage.
If we have in our country a number of individuals whom we can all agree pose a risk but cannot be deported or charged, they must be contained. If control orders, with appropriate judicial oversight, result in those individuals being subject to restrictions for an indefinite period, that is a consequence we should be prepared to tolerate. I have to take issue with the hon. Member for Cambridge (Dr Huppert)—he would be disappointed if I did not do so—because I disagreed with almost everything he said, apart from one thing: he said that control orders did not contribute whatsoever to the conviction rate of suspected terrorists. He is absolutely right about that, but of course he is entirely wrong to imagine that that was ever the point of control orders. Control orders were put in place to prevent terrorist acts from happening—to protect individual members of the public; they were never intended as a mechanism to increase the conviction rate of terrorists.
Let us consider the current alternative to control orders. If an individual spends two years dreaming about the carnage he wishes to wreak on the wider population, but does not act on it, he will be released to walk the streets to associate with whomever he likes. The idea is absurd: if someone behaves themselves for two years while they know that their movements and communications are being monitored, they are guaranteed to be relieved of those restrictions because they will be deemed no longer to be a threat—not because they are a reformed character but because they have managed to resist the temptation to plan anyone’s death for a couple of years. Why do we not give them an OBE while we are at it?
Control orders, although despised by the civil liberties lobby, were a proportionate response to the threat of terrorism—they were proportionate because of the scale and nature of the threat posed by Islamist terrorism. Yet too many in this Chamber, on both sides of the House, do not recognise the scale or the nature of that threat. They claim that the threat is no greater than that previously posed by the IRA and that British foreign policy is as much to blame as this hateful religious ideology. They convince themselves that everything did not change after 9/11. They are wrong; everything did change. We need a legislative framework that will provide a proportionate response to this new form of terrorism. A regime that allows people whom the Home Secretary and the security services consider to be a threat to walk our streets does not deserve the support of this House.
Mr Kevan Jones (North Durham) (Lab)
The first priority of any Government must be the protection of their citizens. In this country, we take for granted the freedoms and liberties that have been built up over many centuries. Do many of our constituents think about the threats that are posed by Islamic terrorists? No, they do not, and that is quite right as they have to go about their daily business. None the less, there is a serious threat. My hon. Friend the Member for Glasgow South (Mr Harris) has just mentioned the fact that some people believe that this threat is similar to that posed by the IRA. It is not similar to IRA terrorism. It is not similar to other terrorist organisations that act against states. Ideologically, this is a corrupted version of Islam that is hellbent on taking away the liberties and the way of life that we have built up over many centuries and that we in this House support. It also involves individuals who are prepared to take part in atrocities, including by taking their own lives, against all types of communities. That was certainly not the case with other terrorist organisations. What we are dealing with here is a new type of threat.
I agree with previous speakers when they asked whether, in an ideal world, we would have control orders or TPIMs. No, we would not. There is a recognition that, in a small group of cases, the state needs to act to protect its citizens. The hon. Member for South Swindon (Mr Buckland), who is not in his place, said that we should not make this a party political matter. I must say that that is a bit rich coming from the Conservative party or the Liberal Democrat party, which made it a very political matter at the previous election.
I do not know what fantasy world the hon. Member for Cambridge (Dr Huppert) lives in, but it is clear that he has a distorted view of control orders and the TPIMs arrangement. I know that Government Members scoffed when I suggested that the courts were doing their job when they turned down control orders. Well, they were; it was built into the process. The hon. Gentleman stated that the relocation of people was tantamount to a Soviet-style regime. No, it was not. In that system, the High Court could review cases and, in some instances, they overturned them. It was doing its job as defined by the legislation. Four cases were rejected. The idea that the Home Secretary has put over today that the courts were the reason for changing control orders was nailed by the independent reviewer, David Anderson, in his report. He said:
“The possibility of relocation has now been removed. That step was not required by the courts (which had indeed shown themselves generally supportive of relocation as a deterrent to TRA”—
terrorist-related activity.
In an ideal world, we would want to prosecute such cases, but it is not possible. That does not mean that those individuals are not dangerous to our citizens and our way of life, but what TPIMs have done—they were referred to by the hon. Member for Gainsborough (Sir Edward Leigh) as control orders-lite, which is exactly what they are—is to affect two fundamental issues: the arbitrary two-year time limit and relocation. I know that the Liberal Democrats might not want to be reminded of being lectured by Lord Carlile, but what he said is important and interesting. He said:
“With my experience from the beginning of control orders until early this year, I wonder why we are troubling to replace a functioning system with another that has almost entirely the same arms, body and legs, but…there is one leg missing from the Bill, and for now, in my view, it gives this legislation a distinct limp. It is the continuing power to order relocation, subject, of course, to the usual court procedures.”
Again, that is something that the hon. Member for Cambridge seems to forget about. Lord Carlile went on to say:
“On the evidence available, I am persuaded firmly—I choose my words carefully—to the view that it would be negligent to remove relocation from the main provisions.”—[Official Report, House of Lords, 5 October 2011; Vol. 730, c. 1176.]
Clearly, the TPIMs system has taken two of the fundamental provisions away. The question for the Government and the Home Secretary today, which she refused constantly to answer, was about the six individuals who will come off TPIMs in the next week. What will happen to them? She gave us an assurance that the Security Service has put in place the necessary monitoring systems, but we need to know about that as the public need that reassurance. Without it, people who are a threat to the liberties we take for granted in this country will walk free on our streets. It is not good enough for the Home Secretary simply to say, “Trust me, this will happen.” These people are either a threat or not a threat, but the public need to know.
I do not often agree with the editorial of The Sun, which said this morning:
“The Coalition is relaxing terror controls just as Britain enters a perilous era.”
Nic Dakin (Scunthorpe) (Lab)
My hon. Friend the Member for North Durham (Mr Jones) reminded us at the start of his speech that the first priority of any Government should be to provide national security for its citizens. My right hon. Friend the Member for Leicester East (Keith Vaz) reminded us that, sadly, we are living in dangerous times. Any changes to the regime for dealing with people who threaten our country and our citizens must therefore be dealt with very seriously. That is why the hon. Members for Gainsborough (Sir Edward Leigh) and for South Swindon (Mr Buckland) said that this is too big for party politics. It is an issue on which all political parties should work together in the national interest and, essentially, that is what the Opposition motion does. It suggests exactly where we should be going.
My right hon. Friend the Member for Blackburn (Mr Straw), with all his experience, clearly spelt out the difference between control orders and TPIMs—essentially, the introduction of an arbitrary time limit and the removal of the relocation element. Under the TPIM system that the Government have put in place, they have already lost two individuals who were subject to such measures so, in that respect, there have been failures in the regime. There are still questions about what happened with those two individuals and they have not all been satisfactorily answered.
One advantage of speaking towards the end of the debate is that one has the benefit of listening to the wisdom of all Members, which is significant in this case, but I still do not understand why exactly the individuals who are currently on TPIMs will go off them next month and how that is a secure process. When pressed, the Home Secretary did not give full assurances. She suggested that she felt comfortable with the process, but I do not think that those assurances were strong enough for this House or, more importantly, citizens outside it.
Mr Sutcliffe
The Home Secretary could not even tell us whether the Government were going to take the passports off those individuals and whether they would be free to roam around.
Nic Dakin
She was certainly reticent about sharing that information with the House. Interestingly, one individual who absconded did not have a passport but had entered the country with some other identification about which we were not given further details. The plot thickens.
It is clear that nobody wants TPIMs or control orders, and it would be much better to prosecute those involved in terrorism. But we have heard from the Home Secretary and two eminent former Home Secretaries that in a small number of cases evidence is inadmissible because it would compromise security, and that means that alternative measures need to be in place. As my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) said, that applies to a very small number of individuals, but they pose a serious danger to the public and the public would expect us to have powers in place to secure our security in regard to those cases. My right hon. Friend said that he knows these cases inside out and expressed concern about the future behaviour of those individuals. Let us hope that his concerns are ill founded and that the Home Secretary’s assurances are well founded. If the opposite is true, we will all pay the price, which none of us wants.
Those currently subject to a TPIM notice are accused of terrorist activities, which David Anderson QC describes as
“at the highest end of seriousness, even by standards of international terrorism.”
These are very serious cases. They are not trivial. These individuals are not members of organisations like the scouts. They are people who are involved in activities of serious concern. The evidence is there.
Jim Shannon
The figures show that the cost of the six TPIMs, including MI5, special branch, the police and everyone else who is required to look after these people, is some £20 million. As has been said, prosecution is the only way forward.
Nic Dakin
Next month, the six individuals currently subject to a TPIM will no longer be subject to a TPIM. In my simple world, either they do not need a TPIM now or they need one in the future. If there is no TPIM in the future, we need more clarity from the Under-Secretary of State for the Home Department, the hon. Member for Old Bexley and Sidcup (James Brokenshire). He is a good Minister and I hope that he will be able to give more clarity than the Home Secretary was able to give about the strength of powers that are in place to ensure that these six individuals do not pose a threat to citizens of the UK or elsewhere.
Unfortunately, the Government first weakened the powers of control orders by removing the relocation element when the TPIM process was involved, and now all powers to manage these suspects will end. There is a lack of clarity, but that is what seems to be happening, because of an essentially arbitrary two-year limit after which these people who are considered to be a real threat turn into pumpkins of no threat. That does not appear at all credible.
As the shadow Home Secretary spelt out clearly in opening the debate, the Labour party wants necessary but proportionate powers to manage the dangers that these individuals pose. It has persistently and consistently offered to work with the Government in the national interest to ensure that appropriate powers are taken forward on a cross-party basis to protect our citizens from that small group of people who pose such a risk.
Diana Johnson (Kingston upon Hull North) (Lab)
Today the House is debating the Government’s first responsibility, which is to keep their citizens safe, in this case from acts of terror, and the expiry of the six TPIM orders on individuals who have been identified as posing a terrorist threat, but who will all have restrictions removed from them, regardless of the security assessment, because of the two-year limit on the life of the orders brought in by the coalition Government.
Different views have been expressed, but one thing unites the House: we would all prefer not to need TPIMs or control orders. We would all prefer to see terrorist suspects prosecuted. That would be fairer, more effective and cheaper, but it is not always possible. We are debating how to deal most effectively and fairly with the small number of exceptional cases that cannot be prosecuted. As the independent reviewer of terrorism legislation, David Anderson QC, has said, those on TPIMs are accused of
“terrorist activities at the highest end of seriousness, even by standards of international terrorism.”
For the past decade, Labour and the Conservatives have agreed on the need to have terrorism orders that are restrictive but viewed by successive Home Secretaries and the High Court to be necessary and proportionate. The current Home Secretary decided to weaken those powers, first by removing the power to relocate, and secondly by introducing an automatic ending of such orders after two years. That leaves a series of questions about her judgment.
As six of the individuals subject to TPIMs will have all restrictions ended this month, owing to the legislation that the Home Secretary introduced, the questions asked by my right hon. Friend the shadow Home Secretary still need addressing: what risk does each man pose, and what action has the Home Secretary taken to reduce the risk? Parliament needs to know whether TPIMs are still fit for purpose and whether reforms are now needed in the interests of public safety. It is important that she recognises that these are genuine concerns.
We heard many excellent contributions in this high-quality debate, including from two former Home Secretaries, my right hon. Friends the Members for Blackburn (Mr Straw) and for Kingston upon Hull West and Hessle (Alan Johnson); from the Chair of the Home Affairs Committee; from the former shadow Minister who led for Labour when the TPIMs Bill went through Committee, my hon. Friend the Member for Bradford South (Mr Sutcliffe); and from my hon. Friends the Members for Glasgow South (Mr Harris), for North Durham (Mr Jones) and for Scunthorpe (Nic Dakin). We also heard three contributions from the Government Benches.
Given the number of points that have been made, I will limit my remarks to the issues that I think the Government still need to respond to. First, the TPIMs regime was supposed to allow more prosecutions at the same time as providing protection for the public. Will the Minister confirm whether any of the individuals subject to TPIMs have actually been prosecuted for terrorist-related activity?
Secondly, we know that two of the people subject to TPIMs have absconded. The fact that the power of relocation is no longer available to the Home Secretary might have something to do with that. Will the Minister agree to reflect on whether it was wise to ignore the advice of the former Conservative Home Secretary, the noble Lord Howard, the former independent reviewer of terrorism legislation, the noble Lord Carlile, and the police when removing the power of relocation?
When TPIMs replaced control orders, Parliament was promised that the introduction of those weaker powers would be accompanied by extra surveillance capacity. The Public Bill Committee was promised an elaborate web of 24-hour surveillance provided by specially trained officers. The cost was predicted to rise from £1.8 million a year for a control order to £18 million a year for a TPIM, but Ibrahim Magag disappeared by getting into a taxi and Mohamed did the same by donning a burqa and removing his tag. Will the Minister set out whether the TPIMs regime provided the direct surveillance of suspects that Parliament was promised? For example, was either of those suspects under direct surveillance when they disappeared?
The Home Secretary pointed out that individuals had in the past been taken off control orders. Indeed they were, but the difference is that in those cases the individuals were no longer deemed to pose a high risk. Now the decision has been taken away from the Government with the automatic ending of a TPIM after a maximum of two years. My right hon. Friend the Member for Blackburn, when pressing the Home Secretary on her personal view on when individuals should come off TPIMs, asked whether she thought that they posed a risk. She refused to answer.
The Home Secretary was also asked whether she thought that the person known as CD still posed a risk. As she was previously able to tell us what the risk assessment was for Magag and Mohamed, it is rather unfortunate that she was unable to be as candid on the Floor of the House in this important debate about these individuals.
Let me say clearly to the hon. Member for Cambridge (Dr Huppert) that nobody wants people to remain on TPIM orders indefinitely, but we do want a proper risk assessment as to when a person should come off a TPIM order, not an arbitrary two-year time limit. That is our position, and I hope he will reflect on that.
Control orders and TPIMs have had some parliamentary oversight from the Intelligence and Security Committee, and that vital form of accountability needs to continue. The Opposition would like an assurance that the ISC will be given the individual risk assessments for each person who is currently subject to a TPIM order and the individual plans for them once they are no longer subject to it.
It would be helpful if the Minister said a little more about what is going to happen after these orders come to an end. He has referred to specially tailored packages, and my hon. Friend the Member for North Durham asked for more information about exactly what that would mean. I understand the constraints that the Minister is under, but a more general comment would be welcome.
When TPIMs replaced control orders, the extra cost continued to be borne by the Home Office. Will the Minister say where any extra funding will come from and clarify whether Ministers will remain responsible for the oversight of these individuals once the TPIM orders have been lifted?
I want to ask the Minister about any additional powers that might be required. The Opposition have offered assistance and co-operation to bring in necessary but proportionate measures on a cross-party basis. My right hon. Friend the Member for Salford and Eccles (Hazel Blears) referred to the issue that David Anderson raised about the possibility of a provision akin to a licence condition being imposed when someone comes off a TPIM order. The Opposition would be willing to consider that with the Minister if he were willing to engage in such discussions.
Will the Minister comment on the restriction on foreign travel? When someone is placed on a TPIM order, their passport should be confiscated, although that did not happen in the case of Mohamed, and we have not got to the bottom of where the passport is or whether it is still in existence. Seven of the current TPIM suspects are thought to have travelled abroad to Pakistan, Syria or Somalia to attend terrorist training camps, where they develop the expertise and skills that make them so dangerous. I heard what the Home Secretary said about the use of the royal prerogative, but will the Minister confirm whether any additional powers are needed to stop these individuals travelling abroad once they are no longer restricted by TPIM orders?
We hope that the Minister will acknowledge that we have used an Opposition day debate to raise an important matter, to offer co-operation on an issue of national security, and to work together on a cross-party basis to make sure that we have legislation that is fit for purpose.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
Let me say at the outset that this Government regard protecting the British public from terrorism as absolutely one of the most important functions of the state. I stress the seriousness and weight that the Home Secretary, other Ministers and I attach to the exercise of these powers, and therefore the careful consideration that we give to them.
We have been consistently clear that violence and extremism of all kinds have no place in today’s society. We believe that individuals who engage in terrorist activity should be prosecuted wherever and whenever possible. The right place for terrorists is behind bars. In that context—I am sure that this will be supported by Members in all parts of the House—I recognise and pay tribute to the work of the police and the security services in protecting the security of our country and pursuing those who would seek to do us harm.
However, where individuals who pose a threat to this country and its people cannot be prosecuted or deported, we need powerful measures that can help manage the risk. My hon. Friend the Member for Gainsborough (Sir Edward Leigh) made that point clearly. That was exactly why we took stock and reviewed the control orders that the previous Government had used. Despite what a number of Members have said today, it was clear to us that control orders were not working as they were intended to.
During the six years for which control orders existed, seven people absconded. Moreover, they were being steadily eroded by the courts. A total of eight were either quashed or revoked because they were thought wrong in principle, because they were believed no longer to be necessary or because the previous Government were unable to make a disclosure ordered by the court. Furthermore, in four cases the relocation of individuals subject to control orders was quashed. That was why we judged that the state of affairs was untenable. The British public rightly expect protection from dangerous individuals, and we needed a robust system that would provide effective and workable restrictions. We therefore ordered a lengthy and considered review of our counter-terrorism powers against the risk that then existed.
We judge that TPIMs have proved effective and workable. They have consistently been upheld by the courts, they have been endorsed by two separate independent reviewers of counter-terrorism legislation and they have the confidence of the police and the Security Service. To quote David Anderson, they are a “harsh measure” that provide some of the toughest controls possible in the democratic world. They provide for a comprehensive range of restrictions that can be placed on terror suspects, including daily reporting; overnight residence at a specified address; a ban on overseas travel; the wearing of a global positioning system tracking tag; limits on the use of telephones, computers and financial services and on association; and exclusion from specific places such as ports and airports. They give the police certainty about how individuals will be managed. In his first annual report on TPIMs, David Anderson stated:
“In terms of security, the TPIM regime continues to provide a high degree of protection against untriable and undeportable persons who are judged on substantial grounds to be dangerous terrorists”.
James Brokenshire
The right hon. Gentleman needs to understand—I am sure he will recognise this, as a former Home Secretary—that we need to focus on the management of dangerous offenders’ exit strategies and how they are released. As the Home Secretary made clear, the courts struck down relocation on a number of occasions. Our concern has been, and always will be, about having a continuing arrangement to provide assurance about the management of such offenders. Most importantly, the police and the Security Service, whose opinions are after all the ones we should listen to on the subject, say that TPIMs have been effective in disrupting individuals and networks that pose a threat to this country’s security. As my right hon. Friend the Home Secretary made clear, however, they are only one weapon in the fight against extremism and terrorism.
James Brokenshire
The right hon. Gentleman and other Labour Members have implied that, in essence, the measure was a silver bullet and the solution, but that absolutely was not the case. The courts have challenged relocation in individual cases, and it is therefore important for us to reflect on that in the management of those individuals.
As my colleague the Home Secretary has made clear, TPIMs are only one weapon in our fight against extremism and terrorism. They are used only in exceptional circumstances as part of measures designed to disrupt a person’s activities—in other words, part of the bigger picture that my hon. Friend the Member for South Swindon (Mr Buckland) mentioned. Alongside TPIMs, the Government provided additional funding of tens of millions of pounds a year to the Security Service and the police, substantially increasing their surveillance and counter-terrorism capabilities. In addition to TPIMs, a range of tough measures are in place to disrupt the activities of people engaged in terrorist activities, and prevent people from becoming radicalised.
We are using the royal prerogative to remove passports from British nationals whom we believe want to travel abroad to take part in terrorist and extremist activity, and who on their return would pose a threat to this country. We have strong controls in place at British ports, and the National Border Targeting Centre is able to check advance passenger information provided by carriers, and identify any known persons of interest who intend to travel. We have the power to exclude extremists and preachers of hate from coming to this country, and where necessary we may consider the use of other disruptive powers, including deprivation of British citizenship where an individual is a dual national and the Home Secretary determines that such action is conducive to the public good.
James Brokenshire
I will give way briefly as I have only a couple of minutes.
Alan Johnson
I am grateful; the hon. Gentleman has a couple of minutes to tell Parliament what it needs to know. In the judgment of the Home Secretary, which of the six people who will be released from their TPIMs, and who were considered so dangerous that they needed to have those restrictive measures, still pose a security threat?
James Brokenshire
As the Home Secretary made clear, and as I said in my contribution this afternoon, the police and the Security Service have stated that TPIMs have been effective in reducing the risk associated with those individuals. The right hon. Gentleman, and others, have sought to make a point about the risk assessments. Those have been made but they are an operational matter for the police and the Security Service. It would seem that right hon. and hon. Members are seeking to have information disclosed on the Floor of the House that could make it that much harder for the police and the Security Service to do their job of protecting this country.
The Terrorism Prevention and Investigation Measures Act 2011 provides for the appointment of an independent reviewer of the operation of that Act, and for that reviewer to report annually on the outcome of that review. David Anderson has been appointed to perform that function and reviews all TPIM cases. No doubt he will cover those coming off their TPIMs in his annual report.
We are returning dangerous foreign nationals who have no right to be here back to their home countries through deportation with assurances, just as we did with Abu Qatada last July—something the previous Labour Government failed to do. We are working to do more than ever to stop people becoming terrorists or supporting terrorism. I am clear that the best place for a terrorist is in a cell, and those who endanger lives and threaten our national security deserve to receive long sentences. Unlike under the Labour party, which was content for convicted terrorists to be released halfway through their sentences, under new proposals, criminals convicted of serious terrorism offences and who receive a determinate sentence will no longer be automatically released at the halfway point of their prison sentences without any assessment.
Mr Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the question be now put.
Question agreed to.
Main Question accordingly put.
Business without Debate
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Scunthorpe Hospital Car Parking Charges
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Nic Dakin (Scunthorpe) (Lab)
I would like to present a petition against increases in Scunthorpe hospital car parking charges and to commend the work of local councillors Haque Kataria and Mashook Ali for the leadership they have shown in working with the local community to raise this petition.
The petition states:
The Petition of residents of Scunthorpe,
Declares that the Petitioners are very concerned that car parking prices at Scunthorpe General Hospital have been increased from September 2013.
The Petitioners therefore request that the House of Commons urges the hospital to think of local constituents who are affected by this price increase and reconsider their decision.
And the Petitioners remain, etc.
[P001315]
Staying Put Agenda
(10 years, 9 months ago)
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Craig Whittaker (Calder Valley) (Con)
May I say what an honour it is to have secured this evening’s Adjournment debate?
We have all heard some of the statistics on outcomes for our nation’s 68,000-plus looked-after children, and I think everybody will agree that our country’s record on helping this most vulnerable group of young people when they leave care is nothing short of appalling. Of the 7,000 19-year-olds who were in care at 16, 36% are not in education, employment or training, and only 6% of all care leavers are in higher education, compared with 43% of their peers. We can add to those figures the fact that just 12.8% of children in care obtained five good GCSE grades, compared with 57.9% of their peers, and that about 23% of the adult prison population have spent some time in care. Around a quarter of those living on the streets also have a care background, while care leavers are four or five times more likely to commit suicide. Finally, about 47% of looked-after children aged five to 17 show signs of psychosocial adversity and psychiatric disorders, which is higher than among the most disadvantaged children living in private households.
Physical and mental problems increase at the time of leaving care. In order to address the many serious challenges faced by care leavers, the Government propose to introduce an amendment to the Children and Families Bill to allow young people who are fostered to remain with their carers until they are 21, if they wish and their carers agree and if it is considered to be in their best interests to do so. All young people in foster care will be offered enhanced support until they are 21. For young people in foster care, this is one of the biggest, most fundamental changes to their support when they leave care and is widely applauded as a hugely significant change in the right direction for this incredibly vulnerable group of young people.
The scandal, however, is that the extension to fostering excludes the 9% of young people in care who are placed in children’s homes. These young people have a wide range of needs and challenges. What most have in common is that they are vulnerable. That vulnerability is further enhanced by a stigma attached to residential care among politicians, the public and still, sadly, some in the social work profession. Ministers appear to see living in a family as the best option for children in care—I believe they are right—and as the only setting in which children may thrive. That is reflected by some social workers who see children’s homes as the last resort—a place where children who have “failed” family placements may be sent or as somewhere the more challenging young people may be placed. Many of the public see children’s homes as places where “naughty children” are sent. Historically, that view was compounded by some local authorities that used children’s homes to accommodate the more challenging young people.
When recently asked by the Select Committee on Education to explain different care leaving ages for foster children and those in children’s homes, the Secretary of State for Education replied that fostering is different from residential options and that children’s homes will not get support until an unspecified number of children’s homes nationally have improved within an unspecified time, at which point he may consider it. However, Ofsted inspections of 400 children’s homes concluded by June last year found that on overall effectiveness 65% were good or outstanding and only 7% were inadequate; on outcomes for young people, 67% were good or outstanding and only 3% were inadequate; on quality of care, 74% were good or outstanding, with only 6% inadequate; on safeguarding of children and young people, 69% were good or outstanding, with only 6% inadequate; and, finally, on leadership and management, 57% were good or outstanding and only 9% inadequate.
The Ofsted data, based on Ofsted inspection standards, thus show that the inspectors found most children’s homes to be good or outstanding and only a small percentage to be inadequate. I wonder whether the Secretary of State realises the absurdity of his argument. Surely, as the holder of the purse strings, he should be targeting the homes he is not happy with, and not the young people who are in them through not fault of their own. This suggests strongly that the stigma and misuse of residential care often mask some excellent work that is taking place. It is a credit to residential care that so many of the young children placed in children’s homes under such pressure grow up to lead fulfilling lives.
Tim Loughton (East Worthing and Shoreham) (Con)
Perhaps I should declare my entry in the Register of Members’ Financial Interests. I entirely agree with my hon. Friend, but is not part of the problem the fact that the children who end up in residential children’s homes are, as he says, often there as a last resort, and will usually be there for only a matter of months, when what we really need to look at, rather than short-term spot purchasing of places, is long-term planning? Children need to go into good-quality residential children’s homes—the quality still needs to be improved—as a long-term planned option, just as it is for long-term fostering, rather than as a last resort. If that were the case, enabling children to stay on, which would be wholly consistent with fostering, could be seen as much more of a natural process.
Craig Whittaker
I agree absolutely with the sentiments expressed by my hon. Friend, who has had massive experience in this field over the years and has worked tirelessly for young people. The solutions sought for these young people need to be diverse, but long-term planning for residential care is, without question, vital.
The problem with allowing the amendment just for those in foster care is that it leads to inequalities and discrimination within the system, creating a two-tier system for these vulnerable young people. It does not include young people in residential care, so the state just washes its hands of children anywhere between the ages of 16 and 18 and cuts them free without any support in the big wide world. I have even heard stories of young people being sent back to their birth families just a few days before their 16th birthday, so the local authority no longer has to support them.
As chair of the all-party parliamentary group on looked-after children and care leavers—a post held that the Minister held before me, so he has had massive experience with the APPG—I have been inundated with stories of young people feeling that the state is yet again letting them down because of the inequality and discrimination being created. In this particular case, however, I have noted a real anger coming from those young people in residential care—an anger that I feel is justified. The brilliant campaign led by the “Every Child Leaving Care Matters” team has in less than a month secured 5,000 signatures for the petition from care leavers to change the Government’s mind, and this has been backed by academics and charities from all over the nation. Five thousand young people cannot be wrong: they are angry about their exclusion, and as one young man said to me, “We are being stitched up yet again.”
Bill Esterson (Sefton Central) (Lab)
I congratulate the hon. Gentleman on securing the debate and on agreeing with the intervention by the hon. Member for East Worthing and Shoreham (Tim Loughton). I suggest that the long-term objective might be to treat children—whether they be in foster care or residential care—as if they were our own children, which is supposed to be the situation now. That implies a much more flexible and longer-term view of how long these children should stay with their parents.
Craig Whittaker
The hon. Gentleman is absolutely right. I believe that nowadays the average age of young adults who live at home with their parents is 26 or 27, so why on earth should we cut these young people off all of a sudden when they turn 18, and send them off to fend for themselves? It just does not seem right.
I would argue, as would many others, that young people in residential care are the most vulnerable of all. The majority have been through the fostering system, and have found themselves in placements that break down. The average number of placements for each child in the care system is seven, and the figure is generally much higher for those in residential care. Ben Ashcroft, who is a care leaver, had a total of 37 placements, and wrote a book about his experiences called “51 Moves”.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on raising this important issue. Does he agree that continuity is essential for young people whose lives have been turned upside down and who have reached a critical point in their lives, and that they must be in a place that they can look on as their own and can see as being long-term rather than short-term?
Craig Whittaker
The hon. Gentleman is right. Traditionally, there has been a severing of the relationship between the state and these young people. It is vital for us to provide a long-term plan and security for all of them, not just for a section of them.
Another young man who contacted me recently had had more than 85 placements. His case and Ben Ashcroft’s are extreme, but young people in residential care have far more than the average seven placements.
Why should we want to discriminate against the most vulnerable members of an already vulnerable group? Most of us who are close to the system understand that it is not quite as simple as delivering foster placements until young people reach the age of 21, but the Government have been very quiet about those in residential homes, and about what some of the solutions might be. The Staying Put agenda has been piloted, tried and tested for young people in foster care, but nothing has yet been piloted for those in residential care. We need, at the very least, an announcement from the Government that there will be such pilots, and an indication from them that young people in residential homes can have the same rights and entitlements as those in foster placements until a long-term solution is found. However, the silence is deafening.
I understand the caution, but I do not believe that young people who are in placements now, who are settled, and who will benefit from remaining in those placements until they are 21 should have to move elsewhere simply pending further research. They have needs now. Some will be facing failure, destitution, homelessness, exploitation and all the other risks that young people face on their own. That is happening now—not in the future, but now. Those young people should not be placed at risk pending further research.
One of the Government’s concerns is that allowing young people to remain in children’s homes after their 18th birthday may cause problems for younger children placed, and that safeguarding issues could be involved. I struggle to see how a young person who is settled in a children’s home and enjoys a positive relationship with staff and peers should suddenly become a safeguarding risk when he or she turns 18, having never been so before.
Some people argue that it is too soon to include changes in the leaving care arrangements for children placed in children’s homes by April 2014. I see no reason why those who are settled in placements, enjoy positive relationships and want to stay with the agreement of those in charge of their placements should not be supported and allowed to do so. The Government should give a commitment to support all young people leaving care until they are 21 by April 2014, while work is being done to establish how than can best be achieved.
If cost is the issue when it comes to including the 9% of young people in residential care in the amendment, I must ask what the cost is of supporting young care leavers in the criminal justice system. I would ask about the costs to the benefits system and the mental health system, and the huge costs associated with homelessness.
I recently highlighted a potential saving—and a good way of paying for such a scheme—that would involve ensuring that the birth parents did not continue to claim family benefit for the young person. Evidence from inquiry workshops relating to the report on entitlements produced by the all-party parliamentary group on looked-after children and care leavers showed that several young people on those workshops had birth parents who were still claiming child benefit from the state on their behalf, even though they had been in care several years.
The law says that local authorities should stop the benefit when a child is taken into care, but in reality that practice is rather hit and miss. If the Department for Work and Pensions incentivised local authorities to stop the benefit by giving them, say, half the child benefit, we would have a win-win situation, with savings for the DWP and extra money to fund a scheme for local authorities. Sadly, however, the DWP fails to admit that this is an issue, despite those young people saying that it is.
The changes in the Children and Families Bill are being made to improve the support for young people leaving foster care. However, the changes, which will in effect increase the care leaving age for many fostered children but not for those in other residential settings, could have unintended consequences. They risk creating a two-tier care system, in which children in foster care receive longer aftercare support than those in residential settings. They risk creating an “underclass” of children in residential care who will still have to leave care at 18. They risk reducing real choice for children, as they will be compelled to accept family care in order to gain better aftercare. They also risk creating serious issues for social workers when family placements are breaking down, because the social workers might repeat family placements in an effort to protect aftercare instead of considering the best option for the young person, which might include a residential care option. Finally, they risk creating a negative impact on the self-image and confidence of children in residential settings other than foster care, who might feel undervalued and discriminated against by a change that excludes them through no fault of their own.
I would like to ask the Minister why young people in residential settings who are settled in placements, who enjoy positive relationships and who want to stay, with the agreement of their placement, should not be allowed and supported to continue to do so? There are no reasons why that cannot be done while the research into the best long-term options is ongoing. What is the Minister going to do to address any possible gross discrimination? Will he tell those young people what the Government’s plans are for pilots for a long-term solution that will give them the same support as young people in foster care? The brilliant amendment to the Children and Families Bill would represent a fantastic advancement for all young people in care, not just those in foster care.
The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)
I congratulate my hon. Friend the Member for Calder Valley (Craig Whittaker) on securing this important debate. As my successor as chair of the all-party parliamentary group on looked-after children and care leavers, he is well placed to bring to the House the concerns and views of the many children and young people who actively participate in the group’s work. Like him, I completely recognise the vital need for care leavers to be provided with good-quality, stable accommodation and support if they are to make a successful transition to adulthood. Likewise, I am sure that he recognises my personal commitment, and that of the Government, to making substantial improvements to services for care leavers. That will include ensuring that young people are given help to access suitable accommodation with the right support.
As has been said, we recently announced our intention to place a new legal duty on local authorities to provide staying-put arrangements, supported by additional funding of £40 million to local authorities over the next three years. We will introduce a new clause into the Children and Families Bill to place a duty on local authorities to give young people the opportunity to “stay put” with their former foster parents from their 18th birthday until they are aged 21. We have worked closely with the Who Cares Trust and other interested parties to ensure that we get the wording of the new clause right, and I look forward to tabling it soon.
That is not the only step we are taking. This is all part of our wider reform programme to provide care leavers with much better support as they move into adulthood. Other reforms include changing the rules so that 16 and 17-year-olds remain in care until they are ready to move out, and providing much greater financial support for young people leaving care at 18.
My hon. Friend has secured this debate in order to express his concern about the potential for inequity between young people in foster care and those in children’s homes. So let me be clear: I want to ensure that all care leavers, whatever their placement while in the care system, are provided with the appropriate support when they leave care. As my hon. Friend is aware, one of my two adopted brothers came to live with my family from a children’s home, so I have a deep personal interest in wanting to see all children’s homes provide the best-quality care and support on offer, both during a child or young person’s time in care and as they move on to independent living or other accommodation.
My hon. Friend says that for some young people staying in the children’s home is the right thing to do. I agree, and the law is clear that local authorities can already provide funding and support to a young person to stay with their former foster carer or to remain in a children’s home beyond their 18th birthday, and we know and see examples of that already happening. The issue, however, is whether it is appropriate to place a new duty on local authorities to provide a particular type of support to all young people in children’s homes.
The evidence for placing such a duty on supporting staying-put arrangements for young people in foster care is robust. Staying-put arrangements were tested out in pilots, and proved to have a positive impact on their outcomes. Research from the Fostering Network since the pilots ended shows that, where these arrangements continue, they show similar positive outcomes. Making the transition from a children’s home and from a foster home are very different, however. For some children, leaving a children’s home means moving into residential accommodation for adults. For others, it will be supported accommodation back in their home community; I acknowledge that many—too many—children’s homes are miles from where their families live. We also know that a disproportionate number of young people leave children’s homes and go home to live with their families.
There are also a number of practical and legal issues we would need to consider and test out before placing a duty on local authorities to have to provide staying-put arrangements in children’s homes. A key barrier would be having vulnerable adults living alongside much younger vulnerable children. My hon. Friend addressed that point, but children’s homes are, in law, establishments “wholly or mainly” for children and are registered as such by Ofsted, which, as my hon. Friend mentioned, inspects children’s homes and makes judgments on how the home is achieving outcomes for children. As part of our wider reform of residential care, a much stronger inspection regime will be put in place to help drive up quality standards.
Given that most children’s homes are now very small—typically 2, 3 or 4 beds—extending staying put could result, for example, in a home accommodating two or three care leavers and one child. In this case it could not be registered as a “children’s home”, as it would mainly be an establishment accommodating young adults, which could cause difficulties for the only child living there. For the same reason, Ofsted would not have any legal scope to regulate and inspect this service.
I recognise, however, that these should not be viewed as insurmountable barriers, so my hon. Friend will be pleased to know that I have asked my officials to work with the National Children’s Bureau, the Who Cares Trust and Catch 22 to look at the practical issues of introducing staying-put arrangements in children’s homes over the coming year.
Craig Whittaker
The news my hon. Friend has just announced is very welcome and I thank him for it, but I want to challenge him on some of his points about children’s homes and the number of adults staying in them. He has said that local authorities can already allow someone who is 18 to stay in care. Surely if that is allowed, the problems he is bringing up are not insurmountable and can be put right.
Mr Timpson
I have expressed a clear view about some of the legal and practical issues that remain. It is right that we consider them carefully and understand the consequences more widely across the residential care sector before taking any further steps. I want to be absolutely clear that I am not looking to find excuses not to do this. I am trying to establish what we will need to do to make me feel confident that any further steps we take will achieve what we all want, which is much more stability in placements, whatever that placement may be while in care, and a much better transition into adulthood that is co-ordinated and planned properly as a consequence of the input from the professionals involved in that young person’s life.
As I said to my hon. Friend when I recently gave evidence to the Education Committee on this issue, if I believed that including children’s homes and staying-put arrangements was the right thing to do at this juncture, I would do it in a heartbeat. However, I think it would be premature to place a new duty on local authorities now or to pilot a scheme before the work being carried out by the National Children’s Bureau is completed. I also think such a move would be wrong when we know there needs to be fundamental reform of children’s homes, as the 2012 report by the Deputy Children’s Commissioner and the all-party group on runaway and missing children and adults illustrated so clearly.
I wholeheartedly agree with my hon. Friend that children’s homes should not be seen as a last resort and should be a positive option for many, as I have said on several previous occasions in public and am happy to reiterate this evening. However, too many current homes are simply not good enough. He has said that Ofsted inspection reports show that most homes are rated as “good”, but that is under the current system of national minimum standards. Although there are undoubtedly some excellent children’s homes, and we should applaud them and try to encourage what they do well to be spread more widely, we do not think these standards—the “good” standards—are good enough, and neither do many of the children and young people in residential care. We want to raise the bar and move to much higher quality standards.
Young people living in residential care are more likely to make an early transition from care at aged 16 compared with those living in foster care. Those who do leave at that stage are less likely to be in education, training and employment, as my hon. Friend said. That is why I have introduced a new duty that directors of children’s services must sign off the pathway plan where it suggests a young person should leave care between the ages of 16 and 18. As I said a few moments ago, research has found that many young people are dissatisfied with the support they receive, and report shortfalls in planning and preparation for leaving care, which leaves their needs unmet.
Our immediate priority is to press ahead with driving up the quality of residential care, and we have set out a substantial programme of work to do that. We also want to test out new ways of delivering residential care via the children’s services innovation programme I recently announced. It will catalyse the development and spread of more effective ways of supporting children and of new approaches to commissioning—the point my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) made—and managing that support. Part of that may well include a move away from spot purchasing and towards more regional commissioning, as well as the extension of a children’s homes remit further into adulthood. Our approach will build on the call for change from the field, as evident in the Association of Directors of Children’s Services “What is care for” report and in the Local Government Association’s report on the strategic commissioning of children’s homes.
The “What is care for” report proposes a more fluid boundary between care and community services and new, more flexible models of care, particularly for troubled adolescents who often end up in care and placed in children’s homes. By winter 2014, we will support the developing, testing and implementation of the most promising approaches both in delivery and around the structure of services. I encourage all those who want to see improvements in residential care and its role in the transition to adulthood to come forward with their own ideas as to how best to achieve just that. We must get the system right before considering whether to run pilots or impose a duty on local authorities that requires them to provide staying-put arrangements in children’s homes. We must be confident that homes can offer children provision of the highest standard and that the £1 billion per year that we spend on placements in children’s homes is truly delivering for those living in them.
As I said at the beginning of my speech, this all comes against the backdrop of a wider reform package for care leavers. It is important to remind the House that, to date: the Government have launched the care leavers’ charter, which sets out the support that care leavers can expect right up to the age of 25, with more than 120 local authorities now signed up; we have introduced the junior independent savings account for all care leavers, with more than 40,000 accounts now open, and with a £200 contribution from government; I have written to all local authorities calling for a dramatic improvement in financial support for care leavers, resulting in a tripling in the number of councils now paying £2,000 or more through the setting up home allowance; and we have published the first cross-government care leavers strategy, which sets out in one place the steps government is taking, from housing to health services, and from the justice system to educational institutions, to support care leavers to live independently once they have left their placement.
I will take away the valid point raised by my hon. Friend about the post-care use of child benefit, and the correspondence that he has had with the Department for Work and Pensions. I am happy to work with him to ensure that the response that he receives from my ministerial colleagues in the DWP is sufficient to push that issue further forward, and I will happily discuss that with him in due course.
I am determined to improve the outcomes of all care leavers, and I hope that the action that this Government have taken to date amply illustrates that endeavour. However, I am not yet convinced that placing a duty on local authorities to offer staying-put arrangements in children’s homes is the right thing to do at this time.
I am acutely aware of the disappointment that this brings to many of those young people currently in residential care, and I share the ambition to see staying-put arrangements take hold in children’s homes, as has been the case and will now more widely happen in foster homes. Councils can, in certain instances, already do that. We first need to see more fundamental reform. We need to be confident that any change to the law is founded on good, sound evidence and that it will deliver what we all want to see. Sadly, we have not yet reached that point, but I hope my hon. Friend recognises my ongoing commitment in this area, as well as the significant progress that the Government have already made. I am grateful to him for securing this important debate.
Question put and agreed to.
Westminster Hall
(10 years, 9 months ago)
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Debt Advice (FCA Levy)
(10 years, 9 months ago)
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Mr Robin Walker (Worcester) (Con)
It is a pleasure, Mr Hollobone, to speak under your chairmanship. I am grateful to the Backbench Business Committee for allowing one of its first Tuesday morning debates in Westminster Hall to be about this important issue. Following last night’s positive cross-party debate on the recent report on the payday loan sector by the Select Committee on Business, Innovation and Skills, this debate allows us to expand on a vital and timely matter, which was subject to a key recommendation in that report.
I particularly welcome the cross-party support for this debate from the Chair of the Select Committee, from its Labour members, including the hon. Members for Sheffield Central (Paul Blomfield) and for Glasgow North (Ann McKechin), from my Liberal Democrat colleagues, my hon. Friends the Members for Edinburgh West (Mike Crockart) and for Chippenham (Duncan Hames), and from a good number of Conservative colleagues, both on and not on the Select Committee. It is good to see my hon. Friends the Members for Gosport (Caroline Dinenage), for East Hampshire (Damian Hinds) and for North Swindon (Justin Tomlinson) here to contribute to today’s debate.
This debate is timely because, over the next year, the payday lending sector and other high-cost lenders will begin to be regulated by the Financial Conduct Authority and to pay the levy that it raises to cover the costs of regulation and to fund the Money Advice Service—and, through that, the provision of free debt advice services.
Hon. Members will be as surprised as I was to note that, until now, the highest-cost lenders have not had to make the same contribution to free debt advice services as their competitors in the banks and the credit unions. That has been unjustifiable, but I am glad that, thanks to changes made by the Government and the FCA, such lenders will shortly be making at least that contribution in future. However, there is concern that if the machinery of regulation and the levy remain as they stand, and no guidance is provided, the opportunity for those lenders to contribute additional resource to free debt advice services might be missed.
Another reason why this debate comes at a crucial time is that the Money Advice Service is negotiating with free debt advice services over their future three-year plans and budgets. Almost all hon. Members will benefit from the important work that the likes of the citizens advice bureaux do in our constituencies, and will recognise the enormous value to constituents of being able to access free, timely and impartial debt advice. I value highly the work of Worcester CAB, Worcester Housing and Benefits Advice Centre and other small debt advice charities such as Two Pennies Money Advice and Christians Against Poverty. I am grateful to all those organisations, as well as to national charities such as StepChange, for their work with constituents and for the information they provided to inform this and other debates.
A key way in which the free debt advice sector is funded is through the Money Advice Service and that, in turn, is funded through the FCA’s levy. The problem was discovered by a cross-party group of MPs who have been working together on these issues; I am grateful to the hon. Members for Sheffield Central, for Glasgow North and for Makerfield (Yvonne Fovargue), and to my hon. Friend the Member for East Hampshire, for sharing their meetings in this regard.
Understandably, the FCA sees itself as a collection organisation for the levy, with powers to agree what is put to it, but not to set the terms of the levy or measure the demand for debt advice services. Meanwhile, the Money Advice Service has been under pressure to show that it is delivering value for money and running efficiently, and its representatives have told me and other hon. Members that it has no current plans to ask for an increased budget in the years to come. If things remain as they are, we could miss the opportunity offered by the fact that new organisations will be paying the levy and contributing at last to the budget for free financial advice; their contributions could be cancelled out by a levelling down of the charges to other financial institutions.
I recognise that some colleagues, and even the Treasury Committee, are worried about the cost of regulation encompassed in the current levy, and I do not want to rule out a reduction in the contribution to the levy of other financial organisations. I have no reason to object to any such changes, but I want to ensure that they are not made at the cost of funding valuable and necessary support for free financial advice.
I also recognise that there is a legitimate debate about the role of the Money Advice Service, and that it has been the subject of reports by the National Audit Office and the Treasury Committee. The latter recommended a full independent review of its work and questioned whether it should continue at all. However, today’s debate is not the avenue for taking forward that particular discussion. If we accept that the Money Advice Service is the established channel for allocating funds to the free debt advice sector and that its negotiations with free debt advice providers are likely to set the limits of lenders’ financial contributions to the sector, we must show political leadership in calling for those limits to be raised.
I would like the proceeds of the levy for debt advice to be allocated among an even wider group of organisations, including some of the smaller players in the voluntary free debt advice sector, alongside the major providers, but that is also an argument for another time. I note that the National Association of Citizens Advice Bureaux confirms in its briefing that the six lead organisations work with more than 240 smaller organisations to deliver free debt advice.
In previous debates on high-cost credit, I have advocated the advantages of a levy on the highest-cost lenders to create a competitive advantage for more affordable lenders such as credit unions. I have pointed out that if such a levy were related to the rates of interest charged and the extent to which they go beyond the existing cap on credit union lending, that could create a virtuous circle whereby the growth of the high-cost lending market would fund ever greater provision of debt advice or the availability of more debt advice might direct borrowers to cheaper forms of debt, such as credit unions. I still believe strongly that such a system is desirable, but I recognise that it is not what we currently have. As a pragmatist, I want to make the system that we have work better.
Charities such as StepChange have made a clear case that the high-cost lending industry in general, and payday lenders in particular, are contributing to the growth in demand for free debt advice. As the BIS Committee report reflected, tens of thousands of people have been put into severe financial difficulty by taking out loans that turned out to be unaffordable for them. They are in addition to the hundreds of thousands who struggle to meet their obligations and the millions for whom short-term, high-cost loans might not be the best financial choice.
StepChange and citizens advice bureaux have reported rising numbers of people seeking advice as a result of getting into trouble with payday loans. The latter reported that the number doubled in the last year alone, and the former referred to a sevenfold increase over five years. Citizens advice bureaux highlighted that, in the last four years, there has been a tenfold increase in the proportion of clients receiving casework help with multiple debts that included a payday loan debt. They also reported many problems with people taking out multiple payday loans, and I hope that the speedy introduction of real-time data sharing and action on rollovers will address that.
However, we should not believe that, just because regulatory action is being taken on some of the most pressing issues of high-cost credit, all the problems will go away. Research by the Money Advice Service shows that 8.8 million people in the UK are over-indebted and, of those, 1.9 million are considering seeking advice. Although levels of household indebtedness have come down from a peak during the last Government, they remain well above long-term averages.
The evidence of the last few years is that demand for short-term, high-cost products is here to stay, and that consumers put a greater premium on ease of access than on price in many transactions. That point was well made in yesterday’s debate. There is a vital role for the free debt advice sector in ensuring that consumers understand the true cost of the financial decisions they are taking. The FCA’s current guidelines include recommendations for greater signposting to free debt advice services. Such signposting, although welcome, is likely to create more demand on a sector already under financial pressure.
I do not intend to go into a long discussion of the financial and fiscal difficulties that the Government inherited, but one consequence has inevitably been pressure on the direct and indirect funding of free debt advice services. Whatever our political views on that—those are likely to differ from one side of the House to the other—hon. Members of all parties should welcome an opportunity to secure funding for these very important services at no cost to the taxpayer and at no risk of being removed by political necessity further down the line.
Securing greater funding through the FCA levy would achieve that aim. In its recent report, the BIS Committee recommended:
“When payday loans come under the authority of the FCA, they will be subject to a levy. This must be additional to the existing levy and not used to off-set the level of payments by other financial organisations. We recommend that the levy paid by payday lenders is ring-fenced by the Money Advice Service solely for the funding of front-line debt advice services.”
Similarly, the briefing that StepChange kindly prepared for this debate concludes:
“StepChange Debt Charity believes the inclusion of payday lenders and other consumer credit firms as levy payers should be used to significantly boost funding for free debt advice. It should not be used to level down the total payments other financial services organisations have to make. The OFT says around a third of payday loans lead to repayment problems, suggesting the strain lenders place on debt advice is exceptionally high. StepChange Debt Charity believes the contribution different financial services firms make to debt advice should be based on the level of detriment they cause as well as the firm’s size. Payday lenders cause a disproportionate level of consumer harm relative to the amounts they lend; relative to turnover, they should therefore pay more towards debt advice.”
In succinct terms, the briefing from Citizens Advice concluded:
“The additional contributions from payday loan companies should result in an increase in the funding available for debt advice.”
I know that the Minister, my hon. Friend and Worcestershire colleague, is a sensible and reasonable man. Rising Treasury star though he undoubtedly is, I realise that not all aspects of the debate fall within his diktat, although I hope that he can reassure the Chamber today that the Government will look carefully at the issue. Huge progress has been made on the regulation of high-cost lending in recent months and the Minister can take a great deal of credit for important decisions that have been taken to date, as a result of which many more lenders will be paying the FCA’s levy and the bizarre anomaly of their not contributing while credit unions did is at last being dealt with. I hope the Minister will agree that we should take the opportunity to ensure that the free debt advice industry is properly and adequately funded and that institutions that drive up demand for its services make a proper contribution to the costs.
The FCA is a regulator and independent of the Government and the Money Advice Service is an arm’s-length organisation designed to deliver support to the free financial advice sector. Both have made strides in improving their approach to high-cost lending but the danger is that, without clear guidance about the will of the House, they could miss an opportunity to go further. As things stand, neither has a mandate to match the resources made available to the free debt advice sector to the growth in demand for its help.
It is also worth our noting the Low commission’s recommendation to increase substantially the funding made available for free financial advice. The measure that I have been discussing is one of the means by which that can be achieved. I hope that today’s debate will help to provide much needed guidance and that the Money Advice Service will consider taking the opportunity of having new contributors to the levy, to increase the resources that it passes on to the free debt advice sector.
I am grateful for your chairmanship, Mr Hollobone, and to the Backbench Business Committee for allowing the debate. I look forward to the Minister’s comments on how we can best address the important issue to the advantage of all involved.
Mr Philip Hollobone (in the Chair)
Order. Seven hon. Members are seeking to catch my eye. I do not want to call the Front-Bench speakers after 10.40 am, so we have just under an hour. I do not want to impose a time limit, but please, if we are to get everybody in on an equitable basis, Members should seek to limit their remarks to no more than eight minutes. Let us see whether we can do it without an imposition. With eight minutes each, everyone will get in. The hon. Member who will first demonstrate how to do it is Paul Blomfield.
Paul Blomfield (Sheffield Central) (Lab)
Thank you, Mr Hollobone—no pressure at all then. It is a delight to be here with you in the Chair, and I congratulate the hon. Member for Worcester (Mr Walker) on securing the debate. He has been a committed champion of the cause and one of several colleagues on both sides of the House who have sought the effective regulation of payday lending.
The reason for today’s debate is simple: the need for free and independent debt advice is growing, which is due in no small part to the unscrupulous practices of payday loan companies. We now have a unique opportunity to tackle the problem without cost to the public purse. Payday lenders, as the hon. Gentleman pointed out, will soon have to pay the FCA levy to fund free debt advice. When they do, we need to ensure that they pay an amount commensurate to the problems that they cause and, crucially, that the total pot of money collected increases to fund the additional advice that is needed. There certainly should not be any levelling down of payments simply because more financial service companies will be paying the levy.
As has been pointed out, the Money Advice Service is consulting on its draft business plan as we speak. Extraordinarily, it is suggesting keeping the budget for debt advice unchanged. That cannot be right and, to my mind, it brings into question the organisation’s judgment. MAS’s own research, which was conducted last year by YouGov, indicates that
“there is a growing need for impartial money and debt advice in the UK”.
It estimates that 8.8 million people are over-indebted, from struggling students to working families, and that only 1.5 million of those people are getting advice. That is an extraordinary figure, but it is only the tip of the iceberg, because a further 900,000 have said they were planning to seek such advice and another 1 million said that they were actively considering it. The FCA’s very welcome proposal that payday lenders should signpost borrowers to free debt advice at the point of roll-over means that the demand for debt advice will only grow. Indeed, many of us think that the signposting should be on the initial health warning, too.
According to the Office of Fair Trading, one in every three people who take out a payday loan seek debt advice, which is a sure sign of the link between the payday loan product and the problems it creates. The number of people contacting the StepChange debt charity for help with payday loan problems increased sevenfold between 2008-09 and 2011-12, as has been pointed out, while Citizens Advice has seen a tenfold increase. In the past two and a half months, my local advice bureau said that it had one new case resulting from payday loans every day. One new case might not seem a problem, but in a stretched local advice it is, given that these are complex problems—they involve not quick interventions, but detailed engagement in which people need considerable support. As I said, those who are actively seeking help at the moment are just the tip of the iceberg.
As well as increasing overall funding for free debt advice, it is important that the FCA looks again at how it calculates the levy paid by each firm. For example, StepChange has argued that rather than looking at a firm’s income and write-off rate—companies would, perversely, be encouraged to pursue vulnerable borrowers more aggressively if having fewer write-offs was rewarded—a better formula for calculating the levy would take account of default rates, the number of complaints made about lenders to the Financial Ombudsman Service and intelligence on repayment difficulties from debt advice agencies. The aim of the levy, after all, is to fund support for people when things go wrong. If the business model of the payday lending industry means that things go wrong relatively often, the lenders, rather than profiting from that, need to pay to help to pick up the pieces.
None of the arguments that will be made this morning negate the need for better regulation, and many of us who are in the room made that case yesterday in the Chamber. If such regulation works, we might look forward to a time when there is less need for debt advice. That would be something that we could welcome, and we could review the levy at that stage, but at the moment there is more need for debt advice, so we should not miss the opportunity for it to be funded by those responsible for the problems. I hope that the Minister will reassure us, while recognising that this is a decision for MAS and the FCA, that he and the Government will support such a funding increase.
Damian Hinds (East Hampshire) (Con)
It is a great pleasure to see you in the Chair, Mr Hollobone, and I thank the Backbench Business Committee for recommending this important debate. I join others in congratulating my hon. Friend the Member for Worcester (Mr Walker) on bringing the subject to Westminster Hall and his overall leadership on the issue, which he has pursued consistently and compellingly.
We all know the true human cost of problem debt, because we hear about it all the time in our constituency surgeries and from our local citizens advice bureaux, such as mine in Alton, Petersfield and Bordon. Problems often start when someone gets a little overstretched and then a shock happens, such as them losing their job, suffering a bereavement, or facing an enormous unexpected expense. As we know, couples are often reluctant to talk about money. Letters are left unopened, but calls and demands get more frequent. It might be that an enticing ad leads someone to borrow even more money, or that they go to a fee-charging debt management company that seems to offer a solution. Then, at one point, panic sets in. Stress and mental health problems can follow, and great strains can be placed on relationships—all too often, the family suffers.
At some point, such a person may decide to seek debt advice. That is the time when they can begin to take control, make a plan and start to turn the corner. It is vital that, at that moment, good-quality, free and impartial debt advice is available. I pay tribute, alongside others, to the work done by citizens advice bureaux, StepChange—formerly the Consumer Credit Counselling Service—and others in that regard.
This debate is particularly timely because the FCA and the Money Advice Service are considering how to levy and how to use funds from payday lenders to provide money advice and debt advice. The FCA levies two sums for the Money Advice Service: the money advice levy, which funds MAS directly; and the debt advice levy, which is onward allocated to third parties providing debt advice. Those organisations rely heavily on that funding from MAS, and all the more so because of the strains on public finances. It is worth saying, however, that there is another source of funding from lenders in the form of fair-share agreements and other contributions that they make to some of those charities.
Soon payday lenders, too, will have to contribute to the debt advice levy. I think that we all welcome that development, but we understand that, as things stand, it may not lead to an increase in the total pot available for debt advice, but rather that the budget would be held flat, with decreases in the contributions from other lenders to compensate for the new source from payday lenders.
Our focus today is on payday lenders, which make up the most visible part of the market, given their sponsorship of TV shows and adverts on the sides of buses. However, payday lending is certainly not the only part of the high-cost, sub-prime market, or the only part that causes problems. Home credit lenders—doorstep lenders as they are sometimes known—logbook loans, rent-to-own and good old catalogues are all significant players in the high-cost sector, as are mainstream prime operators when people get into trouble. At a time when payday lenders are becoming subject to the levy, we have a good opportunity to ensure that total funding for debt advice is increased, which would help to put advice organisations on a more stable, firmer footing.
Moreover, there is good evidence that payday loans generate a disproportionate number of debt problems. My hon. Friend referred to the StepChange statistics showing that although the payday market doubled in size between 2008-09 and 2011-12, the number of people contacting the charity with payday loan problems grew sevenfold over that period. As the sector grows further—I am afraid that it does, and it probably is not about to stop growing—it is important that the availability of debt advice keeps up with that growth.
There is a particular area due to which I assume that debt advice providers face above-inflation cost increases: online—so-called pay per click—advertising. Its pricing model involves an auction element, and those who make money out of people’s debts have an incentive to bid higher, so there is a tendency for costs to spiral. If debt advice providers are to be able to compete, as it were, on the internet, they need to be able to afford that.
It is important that we stress two things today, the first of which is a will for the total amount of funding available for debt advice to grow. Secondly, we need to give some input on how firms should contribute. As we consider those two things, there are two funding principles that should in turn underpin them. The first is a principle that has long existed in the debt advice sector: the beneficiary pays. When a creditor stands to regain some of what they are owed, it is right and fair—and, in fact, in their interests—that they support the organisations facilitating that. Secondly, a key principle of economics and internalising externalities is the concept that the polluter pays. In this case, that means that those associated with the greatest numbers of knock-on problems should contribute the most.
I think that the argument for a larger total pot of funding from the industry is self-evident, but I also want to say something about the formula that is applied, which was touched on by the hon. Member for Sheffield Central (Paul Blomfield). The FCA recognises that there are certain higher-risk operators and parts of the market, and that they should contribute more. I understand that the basis of the levy would be a split—50:50, I think—between an element based on the firm’s size and one based on the amount of debt that it writes off, with the idea being that the amount of debt written off is a proxy for riskiness or consumer harm. That principle is good but, like the hon. Gentleman, I worry about the specifics. Such a measure may tend to under-charge newer operators. By definition, when operators are new to the market, they do not have any debts being written off—that takes some time. It may also deter some firms from writing off debt and instead, as he said, they will use more aggressive collection techniques. More generally, if there is one thing that we have learned from the field of education and the metric of achieving five or more GCSEs at grade C or above, it is that if we give people one big hairy metric to be measured on, they will find 14 ways around it. Instead, we need a more balanced scorecard.
Obviously, there is another balance to be struck: accuracy versus simplicity. It could be argued that the amount of money that goes from the profit and loss to the debt advice levy is so small that it is unlikely, relatively speaking, to drive gaming, but I do believe that a slightly more nuanced formula would be useful. It could perhaps include—we may have slightly different lists, and I am not an expert—a broader range of things, such as the age of the debt due, numbers of consumer complaints and so on. I hope that the FCA will consider that.
We have an opportunity not to be missed to improve the sustainability of funding for debt advice. I congratulate the Business, Innovation and Skills Committee, whose Chair, the hon. Member for West Bromwich West (Mr Bailey), is with us today, on its very good report, as well as my hon. Friend on bringing the debate forward. I hope that the FCA and the Money Advice Service will find the debate a useful input into their work and that they will take the opportunity to bolster debt advice in this country, for the sake of all our constituents.
Yvonne Fovargue (Makerfield) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Worcester (Mr Walker) on securing this important debate.
The demand for free debt advice is rising, which is not surprising, given the cost of much short-term credit and the desperate financial situation that many people face due to unemployment, under-employment, rising prices and stagnant incomes. There are a great many people with problem debt. According to the MAS report, as we have heard, 8.8 million people—18% of the UK adult population—are over-indebted but, as we also hear, not all of them seek debt advice. In fact, the same report from MAS shows that only 17% of such people are actively seeking advice, so many people are not receiving the advice that they almost certainly need.
There are various reasons why people do not seek advice. I have talked about the “behind the clock” syndrome: when people are too frightened to open envelopes and just always put them behind the clock, until the clock drops off the mantelpiece. For some people, the reason is stigma—they cannot admit that they are in debt, as they see being in debt as a failure. However, for many others, the reason is simply a lack of signposting or the fact that if they have decided that they need debt advice, they will ring the local CAB or charity to ask for debt advice only quite often to be told that there is a six-week waiting list. After plucking up the courage to make the call, a great number of people are put off when they are told that they have to wait another six weeks. However, that may change soon, when payday loan advertising is required to provide information about sources of debt advice. People will then know where to go. We have to assume that more people will be seeking debt advice and that therefore more debt advice will be needed.
Of course, the extra debt advice must be paid for. It might be free for the client—rightly so—but it is not free to provide. In fact, it is expensive to provide such advice, especially face-to-face advice, although I make a plea now that face-to-face advice is available. That applies even to people who normally can deal with their problems. The worst debt case that I saw involved an accountant who just could not face the fact that she could not deal with her debts. She had to be seen face to face; she could not have dealt with the matter over the telephone. Face-to-face advice is expensive, but valuable.
It costs a lot to provide good advice, and it is right and proper that firms that contribute to debt problems—by lending at a high rate of interest, or by allowing borrowers to over-extend themselves—should contribute to the costs. Let us not forget that those firms benefit from their clients making affordable repayment plans with them.
A large part of free debt advice is funded by the levy on financial services firms, which is regulated by the FCA and administered by MAS. It provides about £35 million of grants to six delivery partners that give specialist face-to-face advice: Citizens Advice, Capitalise, Community Finance Solutions, the Bristol debt advice service, East Midlands Money Advice and the Greater Merseyside Money Advice Partnership. As a founder member of the Greater Merseyside Money Advice Partnership, I would like to say how valuable that funding was so that advice could be provided to people who did not qualify under the legal aid scheme, but had a high level of debt.
Payday lenders will be subject to the levy when they are fully authorised, which could be as early as the autumn. It is right that they come under the regulatory regime and pay the levy. Many of us feel that this would be the logical time to increase the overall amount of the levy paid by the industry to reflect the increasing numbers of firms regulated by the FCA.
As we heard from my hon. Friend the Member for Sheffield Central (Paul Blomfield), the Money Advice Service’s draft business plan for 2014-15 bizarrely proposed to keep spending on debt advice at the same level. A freeze in the levy implies that current firms’ contributions will be reduced, on the basis that more firms will be contributing to the same pot. If that is the case, this is truly a missed opportunity. We do not want to squeeze firms dry or punish them, but it is appropriate that the inclusion of payday lending firms should trigger more funding for debt advice.
I am not against the payday lending industry, but that is not to say that it does not contribute greatly to the financial problems of a great many people—it does, and the problems are increasing at an alarming rate. In the past four years, Citizens Advice has seen a tenfold increase in the proportion of clients receiving casework help with multiple debts, including payday loan debt. When I left the bureau in 2010, although I had seen plenty of people with home credit, I had never seen a client with a payday loan, so there has been a big explosion in the practice since then. In the first quarter of 2009-10, 1% of citizens advice bureaux casework clients had a payday loan, but in the same quarter of 2012-13, 10% had at least one payday loan, which represents huge growth.
It has been mentioned that StepChange has dealt with a sevenfold increase in payday loan debt problems in the past five years. That increase far outstrips the growth of the industry, which doubled during that period. The average payday loan debt is £1,665, which has risen a third in two years. The fact is that payday lenders cause disproportionate consumer detriment, so there is a strong case for saying, as the hon. Member for East Hampshire (Damian Hinds) and my hon. Friend have done, that their contribution to the levy should reflect that. There seems to be an assumption that the levy will reflect firms’ income and the level of debt that is written off. I share my hon. Friend’s concern that that will encourage payday lenders to pursue people even more aggressively. If the size of the levy does not reflect the detriment caused by the industry, payday lenders will be getting off far too lightly.
We must ensure that the overall levy pot is increased substantially when the payday loan firms are regulated by the FCA because free debt advice is vital and can make all the difference to people’s lives. A YouGov survey undertaken by the Money Advice Service showed that individuals with a manageable debt who sought debt advice were almost twice as likely to have their debt become manageable than those who had not sought advice. Supporting people with financial burdens can help in other ways, too, including with family relationships and mental health, and by sustaining employment.
Much can be done to help people in crisis, and we have an opportunity to ensure that payday loan firms accept at least some of the burden of the problems that they have helped to create. However, we cannot let the banks and credit companies off, either. They have always contributed to the levy for debt advice, and their contribution to the overall level of individual debt has not lessened. The addition of payday lenders to the pot should substantially increase the amount available for free debt advice, but should not be a way of reducing the contributions of existing payers. Banks and credit companies are still responsible for the majority of personal indebtedness and they should continue to pay at least as much as they do now.
Justin Tomlinson (North Swindon) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone, because you are a true champion of Back-Bench business. The debate is a good example of how Back-Bench business can have an influence in a crucial and important area. We have heard several thoughtful and constructive speeches, and I am impressed by the degree of cross-party consensus in this important area. I pay particular tribute to my hon. Friends the Members for Worcester (Mr Walker) and for East Hampshire (Damian Hinds) for securing the debate, with the work and support of other Members.
I will not take up my full eight minutes as I simply want to concentrate on two small areas. I am the chair of the all-party group on financial education for young people, and I am delighted that the Government have supported our calls to include financial education in the national curriculum. That drove my support for the idea that we are debating. Underlining all our work, research by the Nationwide building society shows that 91% of people who get into financial difficulty say, “If only I had known better.” Hindsight is a wonderful thing, but we live in an increasingly complex financial world, partly because we are bombarded by marketing and partly because nowadays direct debits, standing orders, roll-overs and all sorts of other things encourage us to get into debt. If something happens—a bereavement, the loss of a job or a family breakdown, for example—people who have traditionally been good at managing their money quickly become overwhelmed. Because they understand that there is a problem, they might think “I will not go out at the weekend. I will not spend any money.” When they look at their bank account on Monday, however, they find that all the direct debits and standing orders have gone out and they quickly become overwhelmed.
My hon. Friend the Member for Gosport (Caroline Dinenage) will shortly tell us that such problems affect not only young consumers but existing ones. Although it is brilliant that the Government are supporting financial education, it will take generations for the benefits to filter through and to ensure that consumers are equipped with the skills to make informed decisions. That will not end the problem, but it will certainly help to tackle it. We must also tackle the situation faced by people today. The YouGov survey that the hon. Member for Makerfield (Yvonne Fovargue) cited showed that those who get face-to-face debt advice are twice as likely as those who do not to get their debts into a manageable situation in 12 months.
I praise the hon. Lady’s comment about putting envelopes behind the clock, because it sums up the situation very well. People come to our surgeries with a carrier bag full of unopened envelopes, having passed the point when they should really have tackled the situation to reach a position at which they are completely overwhelmed. We do our level best to help them, and we have organised training with our local citizens advice bureau so that my staff know the best way to deal with such issues as swiftly as possible. The reality, however, is that it is costly for organisations such as StepChange or Citizens Advice to sit down with people, unravel the complex mess in which they have found themselves and start to broker deals that will allow them to get back on the right path.
I absolutely support the need for face-to-face debt advice. If money from the levy is to go to the Money Advice Service, which commissions services from several different organisations, it should be ring-fenced for face-to-face debt advice. People should not simply be pointed to a website, because that approach has not worked. That might help consumers who already kind of know what they are doing to go that bit further, but people in real distress can be helped only by face-to-face debt advice. I also support calls for the funding to be additional so that it provides for additional face-to-face advice, rather than the new money simply offsetting the current levies that the banks pay. Although payday lending makes a big contribution to the increasing complexity of our world, other factors are also involved, so we need to increase funding rather than simply offsetting it.
We need to ensure that debt advice is clearly signposted, because consumers often do not realise that they can get help. When an individual takes out a loan, there should be a clear sign—a bit like the health warnings on tobacco products—giving them a telephone number to call or a website to visit. Even if people are not yet in a mess, they can simply ask whether the product is the most suitable one for them and whether there are other alternatives.
I think that we have made good progress. The Government have noticed that things need to be done and given the FCA greater powers, and the FCA has been proactive in meeting those of us who have campaigned on the matter. We must recognise that the market is ever changing, and I encourage the Government and the FCA to listen to what we are saying and to continue to work with us in our determination to protect and empower vulnerable consumers.
Ann McKechin (Glasgow North) (Lab)
In the consensual and time-disciplined way in which other hon. Members have spoken this morning, I simply want to support my friend the hon. Member for Worcester (Mr Walker) in his call for the FCA to consider ring-fencing the levy. As other colleagues have mentioned, the need for increased debt advice is clear, because personal debt in this country is increasing and bringing with it increasingly complex problems. I share the concerns expressed by my hon. Friend the Member for Makerfield (Yvonne Fovargue) and the hon. Member for Worcester about the lack of debate between the FCA and the Money Advice Service about the demand for advice services and how best to use the additional funding, which I very much support, from payday lenders. I think it was the hon. Member for East Hampshire (Damian Hinds) who said, correctly, that for the welfare rights officers, citizens advice bureaux and StepChange, other funding avenues are becoming much more restricted.
My constituency benefits enormously from the work of the Maryhill citizens advice bureau, as well as from experienced welfare rights officers in our housing associations. Housing associations are also finding restrictions in their budget—the bedroom tax is having a direct impact, and arrears have increased—but the demand for their services is becoming ever greater. Last summer, I conducted some research in my constituency on a range of issues. A CAB worker there told me the following:
“Huge, huge changes have occurred as a result of the welfare reforms. We have much more cases where we have to help clients with appeals on benefit sanctions and ESA. There are many more people coming in angered, frustrated and desperate because of this. This puts a lot of strain on us. Furthermore a lot of people are coming in confused about how the new system works, including ourselves!
There is a big problem with sanctions from the job centre. They are being much tougher on families. More people are coming in with mental health issues—depression being a major one—caused by debt, unemployment and the stress of things like benefit sanctions.
There has also been a large increase in exploitative employers in this area…the rise in zero hour contracts.
Clients are coming in with more complex problems. All sorts of issues—and they’re all intertwined. We (the CAB) are definitely going to be facing much more problems in the near future with the changes to universal credit and it all going online.”
That fact is that debt is not the only issue that advisers are dealing with on the ground in our communities. They are having to deal with huge changes in the welfare system, the increase of insecure work—we discussed that in the debate last night, Mr Hollobone—and the increasing use of high-cost credit. All those are interlinked together. Basic training for a Citizens Advice volunteer takes 10 weeks—it is an intensive course. The people who have been working as welfare rights officers in my area have been doing so for many years. We benefit from their high level of experience, but it does not come cheap. We must train more people in the years ahead to be able to meet the demand, which is coming from a much wider range of our population.
I was interested to hear the hon. Members for North Swindon (Justin Tomlinson) and for East Hampshire talking about a range of people who had secure jobs but were now having great difficulty trying to manage their finances. The demand spans from people like that down to those in my constituency, where in some areas people are living on very reduced incomes and always have been. They are now finding their income even more stretched, and real incomes have declined significantly.
The need is utterly apparent. I hope that the FCA and the MAS will respond positively to this debate, and that when the Minister responds he will be a friend in persuading those institutions of the need to reconsider how they are going to use the levy in future.
Caroline Dinenage (Gosport) (Con)
It is a great pleasure to serve under your stewardship, Mr Hollobone. I would like to add to the praise heaped on to my hon. Friend the Member for Worcester (Mr Walker) for securing this important debate and also for the sterling work that he has carried out with Members from all parties on championing such an important issue.
The hon. Member for Makerfield (Yvonne Fovargue) pointed out and properly articulated the fact that, a few years ago, most of us had not even heard of payday loans. They have grown like a cancer in the past few years and led many thousands of our constituents into a spiral of debt and despair. Addressing this growing, innovating and evolving industry is a matter of urgency. The FCA must take a firm grip on the issue to bring unscrupulous lenders under control.
Of course, in and of themselves, payday loans are not harmful; it is their propensity to turn into defaults and rollovers, as well as the insufficient quality of the advice, that is leading to so much misery. Unscrupulous traders and the devastating impact of continuous payment authorities are concerns for all our constituents who have taken out payday loans. That is why we must do all we can to bring clarity to the dangerous terms and conditions that leave borrowers caught unawares, with no means to pay for their food, utility bills and other household costs.
With a prophesy worthy of Mystic Meg, my hon. Friend the Member for North Swindon (Justin Tomlinson) pointed out that I might allude to some adult literacy and numeracy issues in my speech. He is quite correct. Recent research conducted by the OECD shows that there are 8.5 million people in England and Northern Ireland with the numeracy ability of a 10-year-old child. Payday lenders can seize the opportunity to take advantage of such individuals, who struggle to keep on top of their weekly shopping bills, let alone the complex percentages and interest rates involved in taking out a loan.
In order to strangle the problem at the roots, we need to address the problem of weak numeracy skills and promote the importance of financial education. That is why my hon. Friend has done such sterling work in this field. We cannot leave behind a generation of adults who are unable to comprehend the staggering interest rates that we see. We must improve how we signpost adults through debt advice to the numeracy training that they so desperately need. Independent debt advisers specialise in providing such a service, and their role in mitigating against the devastating impacts of payday loans is crucial. Without such targeted help and support, many of those who fall victim to payday lenders will be unable to break the cycle of financial trauma.
Over the past four years, Citizens Advice estimates that it has seen a tenfold growth in the demand for debt advice, as many colleagues have already said. That significant rise has undoubtedly been stimulated by an increasing dependence on payday loans, which take advantage of some of the most vulnerable people in our society. One aspect of payday loans about which I am particularly concerned is refinancing. The recent review by the Office of Fair Trading revealed that individuals seeking debt advice had, on average, refinanced their loans at least four times and were repaying six separate payday loans. Such shocking figures show the extent of the difficulty that borrowers can get into before seeking help, as the hon. Member for Makerfield said.
What we see is not responsible trading. The absence of ready access to helpful information prevents people from gaining the necessary autonomy that they need to put a stop to successive borrowing. Although the FCA’s proposal to force payday lenders to signpost borrowers to debt advice will promote greater responsibility and hopefully discourage the selling of unaffordable loans, it will also place even greater pressure on organisations that have limited resources. Therefore, like many colleagues, I strongly advocate the new powers that the FCA will have to levy all consumer credit firms to help to fund MAS. We must ensure, however, that the level of payment is commensurate with the problem.
Consumer choice is a paramount factor in the issue of payday loans. Individuals must be well informed and aware of the risks before and during their engagement with payday lenders. That is why debt advisers are so important and must be provided with the financial resources needed to continue their good work. It is also important to emphasise that we are not seeking to eliminate the access to credit streams that provide a safety net to many of the lowest paid. However, such borrowing opportunities must be subject to rigorous regulation and injected with the responsibility needed to bring about greater consumer advice and confidence.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I would like to reiterate what the hon. Member for North Swindon (Justin Tomlinson) said about your commitment to Back-Bench involvement. I also thank the Backbench Business Committee for recommending this issue for debate.
Above all, I thank my colleague on the Business, Innovation and Skills Committee, the hon. Member for Worcester (Mr Walker), for having the foresight and judgment to table this debate at this time, because its timing is crucial. Last night, we debated payday loan companies in the Chamber. A number of headline-grabbing issues that have long been discussed publicly were debated, but there is a real danger that the significance of the BIS Committee’s recommendation on ring-fencing may have fallen below the radar. Certainly, in the numerous interviews that I have done with the media, I have yet to be asked a question on it. The sheer significance of it may well have gone unrecognised. He has taken up the issue and run with it, and the timing is impeccable. It is extremely important.
I emphasise that this is not just a dry academic issue. Debt advice does not sound very exciting, but I was first confronted with its importance in deprived areas when I was approached by members of my local branch of Christians Against Poverty, based at St Matthew’s church in Tipton, who wanted me to see the work that they had done. I have attended events run by the branch and talked to people who have spoken of the life-transformative experience of taking advice from Christians Against Poverty and adhering to the organisation’s recommendations and support. They were so grateful that it was almost unbelievable. It was very moving. Make no mistake: debt advice is not just about somebody sitting in an armchair talking to people on the other side of a desk. It is about talking to them, giving them support, comfort and advice, pointing them in the right direction and monitoring their life as they come out of the trough that debt imposes on them.
The issue is very important, and there is a danger if MAS goes for a flatline budget. We could be left in a position where although demand for the service is increasing hugely—all the indications are that it will continue to increase—the budget is static, meaning that an increasing number of people would not be able to access the support that they need to transform their lives. I support the recommendations made by the previous speakers. I will not go into all the detail, as they have argued the case effectively and I realise that others want to contribute to this debate, but to finish, I will say one thing to the Minister: this is an easy win. It does not cost the Government anything. Politically, it would be highly popular across the board to ensure that the major contributors to the problem fund at least part of the solution.
That is the positive side. The negative side is that the social cost of people running into heavy debt and the potential impact on families can be so devastating that the Government will incur costs by picking up the bill for the resulting social breakdown and deprivation. If the Government ignore the opportunity to get more money from the private sector that is creating the problem, they will incur greater social problems with a price tag, and they will have to pick up the tab. That is illogical and incoherent. There is an easy win that has popular and political support. It will benefit Government finances in the long run and address the problem that we confront.
Mr Philip Hollobone (in the Chair)
I am about to call the Front-Bench speakers. I thank all hon. Members for their contributions and for being so disciplined in the timing of their remarks. We have just over 35 minutes left. As this is a Back Bench-sponsored debate, I encourage Back-Bench Members who want to hold both Front Benches to account to do so through interventions.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I have listened intently to the debate; Members may wish to intervene during the course of my remarks. I congratulate the hon. Member for Worcester (Mr Walker) on securing this debate and the Backbench Business Committee on seeing the wisdom of holding it. I am sure that it is due to the Committee’s good judgment rather than simple coincidence that we had a Backbench Business debate on payday loan companies last night in the main Chamber, followed by this one. The two debates are linked, and it adds value to be able to follow last night’s discussion with this one. There were 17 Back-Bench speakers last night, not counting interventions, and Members had the opportunity to lay out a range of reasons why tougher action is needed on payday loan companies generally and ways that regulation could be improved.
When I first saw that this debate was going to be about the levy, I feared slightly that people would think the issue was only a technical one and not quite as important, but it has been useful to hear a number of speeches linking the principles of what needs to be done on payday lending and regulation and how it can be put into practice for the greater good. It has been heartening to hear that from Members from all parties; we have not got bogged down in the technicalities of the levy, as we might easily have done.
Anyone who has gone through the Library briefing—I am sure that everyone here has, although perhaps people outside this room have not—knows that it explains in great detail how the levy is calculated and the various different sections and categories. The Minister may want to say something about that and whether, in the longer term, he has any plans to review the levy further. I know that the Government always say that they keep everything under review—he and I often exchange comments on that particular approach—but it might be useful to hear from him whether he has any further work to do on that.
We have heard that although better regulation is of course important, it is also important that we continue to ensure that proper debt advice is available. In his opening speech, the hon. Gentleman made the key point that there is a danger that the Financial Conduct Authority might simply be seen as a collection agency. Several speakers made the point that the Money Advice Service has a flatline budget—I hesitate to use that word—but the Government are not seeking to increase the budget, at a time when we have all heard about and know the pressures on various organisations that provide support. That is a potential problem, and I hope that the Minister will address it in his reply.
We want to ensure that the cost of regulation does not take up all the available resources. That is why I highlight the point about the complexity of the levy as it currently operates. We do not want the FCA and MAS to spend all their time trying to administer it, so that resources do not get to the front line. Another key point made is that we do not want the amount of advice available to be reduced.
On the nature of advice, we want the opportunity to widen the scope for funding. I will return to that, but I want to mention a couple of the points made by my hon. Friend the Member for Sheffield Central (Paul Blomfield), who has a long track record of campaigning on payday loan issues, as do the majority—in fact, all—of the hon. Members here. He made the point early on that we have a unique opportunity to tackle the problem without additional cost to the public purse, a point reiterated by my hon. Friend the Member for West Bromwich West (Mr Bailey). I am sure that it will always be attractive to the Treasury, when we have a problem, if we can identify a potential solution that will not cause additional cost to the public purse, especially at a time when we are trying, as I am sure the Minister will mention, to reduce the deficit and look to the future. That ought to be considered.
I would certainly be concerned by any suggestion that the changes to get more companies paying the levy by bringing them into the scope of the regulation would mean a levelling down in terms of what they pay. The point about the payday loan companies, which has been emphasised in a number of debates, is their potential detriment to individuals, because of the way they operate. They should certainly not get off the hook, particularly as we are hearing that more problems are being identified.
It was also correct to suggest that the FCA should not simply exist to signpost people at particular stages, for example rollover, however important that role is. Nevertheless, we need advice to be available and easily accessible.
I am also concerned about an issue that was raised in the briefings that I have been provided with, for example by Citizens Advice and the StepChange charity. We must not have a perverse incentive whereby the system would mean, for example, that on the issue of write-offs companies were somehow moving to operate in a way that would be detrimental to the individual debtor, so that those companies could somehow avoid paying what would be seen as their fair share of the levy. Lenders should pick up the bill for some of that levy. Again, I hope the Minister will say something about that issue.
My hon. Friend the Member for Makerfield (Yvonne Fovargue) talked about the “behind the clock” syndrome and I think it was the hon. Member for North Swindon (Justin Tomlinson) who referred to carrier bags. I do not want to make this debate sound like a competition, but I spent many years as a front-line social worker providing a lot of welfare benefits advice, among other things. I recall occasions when people had large black bin bags full of information. What never ceased to amaze me at the time was the fact that people had kept all of the paperwork, including every letter that had come in. Quite often, those papers were stacked in fairly neat order, with elastic bands around them, but they were not then dealt with; they had simply been put away because the problem they related to was too difficult to deal with.
One thing that I learned from those experiences was that we do people no favours whatsoever if we do not have a face-to-face discussion and work with them to get them out of the mess they are in. Simply telling someone to go and read a website, or to get information online or even a pamphlet, is not enough; it ought to be an introduction to them, so that they can sit down face to face, assess the scale of the problem and work it out. Again, the importance of that process was raised by a number of hon. Members.
Caroline Dinenage
I do not want to bang on about the same subject, but does the hon. Lady agree that sometimes adults lack the necessary literacy and numeracy skills to address the issue of debt and so, even if they wanted to address it, debt is a massive puzzle for them? We also need to look at the ways that we signpost people to address that skills issue.
Cathy Jamieson
The hon. Lady makes an important point, and the issue of financial education was raised in the debate in the main Chamber last night. Financial education is important because there are people who have literacy and numeracy problems, which are often picked up at the point that they come for advice. They may not have felt able to tell people before then, but the problem becomes very apparent in a face-to-face meeting with advice workers, who can perhaps assist them to get help and support.
More broadly, financial education in schools is, of course, valuable; I have said that many times. It is the right thing to provide, but if it is only seen as something to be provided in schools that is not enough. There are key points in people’s lives when there is the opportunity to introduce them to different forms of financial education.
Mr Robin Walker
As the hon. Lady points out, financial education in schools is very valuable, but it is not the whole solution. Recently I visited a community primary school in my constituency where the local anti-loan sharking team were holding an assembly, which was entirely funded by money confiscated from illegal loan sharks. That is one example of how good work can be funded with no direct cost to the taxpayer and is this debate not another example of that, whereby we can help to fund the good work of debt advice charities and the rest of the sector without any cost to the Exchequer or the taxpayer?
Cathy Jamieson
Again, the hon. Gentleman makes a valid point. It reminds me of a previous career, when I was in another Parliament and worked closely with the predecessor of my hon. Friend the Member for Makerfield on tackling some of the illegal loan sharks and trying to ensure that they were brought to justice.
Of course, it is important that we consider everything we can do to establish the principle—I think it was referred to as “the polluter pays” principle—whereby the people who cause the problem have a social responsibility and, in this context, a financial responsibility to provide some of the funding to pay for the resources we need to tackle the problem.
My hon. Friend the Member for Glasgow North (Ann McKechin) asked if there has been a lack of discussion between MAS and the FCA. Again, I hope that the Minister can enlighten us on that issue, perhaps giving us some more information about the involvement of the two organisations. Also, can he say whether or not he can ensure at this crucial stage that all the organisations are brought together for further discussion? I am almost hesitant to say this again, but, as I have already said, there is sometimes a danger that people involved on the Treasury side would perhaps look in isolation at this issue; they would look at the money flows, the funding streams and so on, without necessarily looking at the people involved. In this context, it is very important to look at the people involved.
Ann McKechin
Does my hon. Friend agree that because the FCA is such a massive organisation—in terms of its scale and what it is intended to cover—compared with MAS and because it is just getting off the ground, trying to set some parameters for what the FCA and other organisations need to consider is an important part of the Treasury’s function?
Cathy Jamieson
Again, my hon. Friend makes a valuable point. In bringing my remarks to a conclusion, I want to reiterate some of the points that were made in the debate in the main Chamber last night. As she said, the FCA is a new organisation and it has been given a wide-ranging remit. It has consulted on a number of issues and new rules will be introduced for a range of things, but I would not like to see the specific issue of the levy slip through the net. My hon. Friend the Member for West Bromwich West referred to the recommendation for a levy in the Business, Innovation and Skills Committee report as the recommendation that has almost gone “under the radar”. Hopefully it is no longer “under the radar”; as I say, I certainly do not want it to slip through the net because of the FCA’s wide range of responsibilities.
The Minister, who has been listening intently, will have heard the view expressed in both debates on this subject—last night and today—that there is a genuine consensus across the House on this issue, and hopefully people from the FCA and MAS have heard that too. There may be other areas where we would disagree, but there has been a genuine consensus on this issue, which has built up during months, if not years, of campaigning by individuals who have been very committed to tackling this problem and by organisations that have been absolutely at the sharp end and see it every day. Those individuals and organisations have the ideas both to deal with the problems when they are identified and—crucially—to put in place preventive measures. There was some discussion of those measures last night, which include, for example, action on advertising, education and so on, so that we can try to prevent people getting into debt in the first place. However, if they do get into debt, the correct services must be there for them, not only to point them in a direction to get a bit of information but to help them to work their way out of debt, including making some of the lifestyle changes that are perhaps associated with getting out of debt.
Yvonne Fovargue
Does my hon. Friend agree that today is really a good time for this debate and that, if people want to see that the levy is not a dry subject and has an effect on individuals, they should know that this week Twitter has the hashtag #cablive, where the real-life experiences of people visiting CAB, and of the volunteers and paid staff who are crucial to helping them, are being demonstrated?
Cathy Jamieson
My hon. Friend makes a very important point because, as we discussed last night, this is of course debt awareness week. The comment that I made last night was that for some people this week may be a week of awareness but for others it is how they have to live their lives, to deal with debt problems. I am sure that the information that she has just given will encourage people to follow the process on Twitter and obtain more first-hand information from those who are using these services and those who are providing them.
I want to give the Minister further time to respond to the debate, and to allow for further interventions, because these debates give Back Benchers the opportunity to ask questions. First, however, can the Minister say whether he has already had any discussions with MAS and the FCA about this issue? Does he intend to look in more detail, over the coming months, at the structure and the nature of the levy and whether there could be any improvements there? Will he also consider an idea that we Opposition Members have been advancing, which is that, in addition to the provision of debt advice and money advice resulting from a levy on payday lenders, there should be a levy supporting credit union development and alternative low-cost providers? I hope that the Minister will answer those questions.
I thank all hon. Members who participated in the debate last night and, crucially, in this debate. I am sure that the debate is no longer under the radar. I hope that it will be out there more and that people will see that it is important in the wider scheme of things, as we try to tackle the problem.
The Financial Secretary to the Treasury (Sajid Javid)
I welcome you to the Chair, Mr Hollobone; it is always a pleasure to serve under your chairmanship. I congratulate my hon. Friends the Members for Worcester (Mr Walker) and for East Hampshire (Damian Hinds) on securing the debate. I listened carefully to them and the other hon. Members who contributed, and I thank all hon. Members for their contributions. I think that I am right in saying that each of them contributed to yesterday’s important debate on the payday lending sector in general. Once again, they shared thoughtful and well-balanced comments.
The Government believe that consumers should have access to free, independent money and debt advice. The Money Advice Service has the important job of ensuring that consumers get that advice. The Government want to empower consumers to manage their money well and to make responsible financial decisions, which is where MAS’s money advice role comes in. However, as we have heard, for consumers facing difficulties with debts, the first step in getting those debts under control is debt advice, and MAS also has a role to play in that regard. Money advice can help consumers to keep on top of their finances and stop them getting into problems in the first place.
Let me say something about payday lending generally, because it is connected to consumer detriment issues, which we heard about both yesterday and today. As well as giving MAS responsibility for ensuring that consumers have access to debt advice, the Government are tackling the root causes of spiralling debt. We are fundamentally reforming the regulatory system that governs lenders and we are, in particular, clamping down on payday lenders.
The Financial Conduct Authority takes on its consumer credit responsibilities from the Office of Fair Trading in April. The FCA will have far stronger powers over lenders than the OFT has, and it will be more nimble, meaning it is able to keep pace with a fast-moving market. The FCA is already flexing its regulatory muscle in advance of taking on regulatory responsibility for high street lenders. It plans to cap roll-overs, hold payday lenders to account on affordability assessments, curb the misuse of continuous payment authorities, and mandate risk warnings on payday lending adverts that signpost borrowers to the advice and help that MAS can provide.
The Government have taken decisive action to tackle the harm caused by the cost of payday loans. In the Financial Services (Banking Reform) Act 2013, we gave the FCA a clear mandate and duty to put a cap on the cost of payday loans by the beginning of 2015. This is not just an interest rate cap, but a cap on all fees and charges associated with a payday loan including, of course, default charges and roll-overs.
As we have heard—I agree with hon. Members about this—the provision of debt advice is vital. Free debt advice is currently funded by a levy on financial services lenders, which stand to benefit from advice that helps borrowers to get back on their feet and in control of their borrowing again. Once the responsibility for consumer credit transfers to the FCA, it is absolutely right that the levy begins to apply to consumer credit firms including, of course, payday lenders.
I welcome the focus of my hon. Friend the Member for Worcester and the Business, Innovation and Skills Committee on this issue. We all agree that payday lenders must pay their fair share towards the provision of advice. However, although I listened carefully to points made by my hon. Friend and other hon. Members, I am not yet persuaded that the levy collected from payday lenders should be ring-fenced for debt advice only and used to top up funding for front-line debt advice, and I shall now explain why.
We should not consider debt advice separately from money advice. The two go hand in hand to help consumers to get back in control and to give them budgeting skills and financial awareness to help them to stay out of problem debt, which is crucial, as my hon. Friend the Member for Gosport (Caroline Dinenage)said. We also should not forget that money advice can be vital in helping those on the brink of taking out a payday loan. It can help them to understand what they are getting into, how to borrow responsibly, how to find out whether there are better and cheaper options available, and whether they should be turning to payday loans at all. As money advice could help to stop people from getting into trouble with payday loans in the first place, it is right that payday lenders contribute to funding free money advice and debt advice services. The Money Advice Service has a statutory objective to provide money advice and debt advice.
Ann McKechin
I have listened carefully to what the Minister has said about money advice. The Money Advice Service primarily uses a website to provide access to money advice. In Glasgow, less than 30% of those on the lowest incomes have broadband access in their house, so the people who need advice the most are the least able to access it. It is not just about giving money advice; it is about how that is delivered. I have to say that, in my experience, it is poorly delivered.
Sajid Javid
I listened carefully to what the hon. Lady said, and others have also made that point. When I visited MAS’s office in London last week, I looked much more closely at how it provides money advice. The hon. Lady is right to say that it relies considerably on a website, but it is more than just a website—there are individuals involved. I listened to a lengthy recorded call that was an example of how people who wanted money advice before entering into a financial transaction could be guided through the process. I saw for myself how that was adding value. Although that was obviously a phone call and not face-to-face advice, it was more than just web advice. The hon. Lady highlights the importance of MAS continuing to consider how it can continue to improve its service and ensure that it is providing appropriate advice.
Justin Tomlinson
There are a couple of problems. The MAS website is a poor man’s version of Money Saving Expert and it spends a fortune on self-promotion and advertising for its inferior product. The reality is that the financial world is changing, with direct debits and standing orders, and there has never been a greater need for face-to-face help for those who have become overwhelmed by difficulty.
Sajid Javid
I agree with my hon. Friend about face-to-face advice, including debt advice. All the debt advice that MAS provides through its partners is face-to-face debt advice. More than 158,000 face-to-face sessions took place in the last financial year, whereas 150,000 had been planned for, which shows that face-to-face debt advice is crucial. I agree with many comments made by colleagues, including the hon. Member for Makerfield (Yvonne Fovargue), about the importance of face-to-face advice.
Paul Blomfield
I am a little bit concerned by how the Minister is counterpoising money advice and debt advice. I think that all hon. Members in the Chamber would agree that money advice is important, although there are questions about how MAS delivers it, but that does not overshadow the need for effective debt advice. Given all the contributions that have been made and all the evidence there is, does he agree that the demand for debt advice is growing?
Sajid Javid
I agree that demand seems to be growing, and evidence on that is emerging. It might help the hon. Gentleman if I move on to how MAS determines its budgets for money advice and debt advice, and how it has to take demand into account.
Mr Robin Walker
As the Minister will be aware, the Treasury Committee, among others, pressed MAS to justify the efficiency with which it delivers those services, and it was right to do so—I am the last person to object to that. Does he agree that it is important that MAS does not take from that the message that the only way to justify itself is by keeping its budget flat or spending less money? Delivering a greater service and providing more money to debt advice services would also be a sign of efficiency, so a message that MAS could take from this debate is that there is support for it providing a better service, and potentially more money, to the free debt advice industry.
Sajid Javid
I completely agree with my hon. Friend. He will know that I gave evidence to the Treasury Committee’s inquiry on MAS last year in my previous role as Economic Secretary. I said that the Government would have a full review of MAS during this Parliament, and over the coming weeks and months, I will set out how that review will take place. The review will consider some of the issues he raises.
Damian Hinds
As the Minister is on a roll, I have a question. Will he confirm that he said only that money would not be ring-fenced for debt advice, rather than that money would not go to debt advice? Perhaps we should all welcome that extra flexibility, but if he is suggesting that the money would still come in and would not necessarily involve levelling down other contributors, who would decide—and how would they decide—how that extra funding would be allocated between money advice and debt advice?
Sajid Javid
As my hon. Friend will find out, I am coming on to how MAS determines its budget. As we all would hope and expect, the budget is based on demand. More generally, MAS has a statutory responsibility to consult on its budget for the forthcoming year. Right now, MAS is consulting on its budget for 2014-15. This debate, the Business, Innovation and Skills Committee report and the information from stakeholders, which we have heard about today, are important in providing MAS with the information it needs to develop its budget for the future. That makes a big contribution to how MAS decides the correct allocation of resources for forthcoming years.
MAS’s budget is based on what it needs to achieve its statutory objectives. Although it is right that payday lenders contribute to that funding, it is also right that the funding is based on demand and that it delivers value for money. In the year ahead, MAS’s budget for debt advice will be based on its assessment of demand for such advice. MAS must consult on its plans for providing debt advice each year, which must then be approved by the FCA.
The National Audit Office recently commended MAS for delivering value for money in its debt advice provision. As we have heard, MAS is also carrying out ongoing research to ensure that the debt advice it funds has the best impact on consumers and that it reaches those who need it most. MAS recently conducted an in-depth study of where in the UK debt advice is needed most. The study shows that 21% of over-indebted people do not even recognise that they are in debt and that 44% of people who are in debt are not aware of the solutions available to them. It is important that MAS reaches such people and engages with them successfully to give them the help that they need. MAS will use the report to inform how it funds debt advice, thereby ensuring that it targets those who need it most. It is important to note that more money does not necessarily mean better provision.
Paul Blomfield
I accept that more money does not necessarily mean better provision, but the Minister has acknowledged that there is increased demand and that that increased demand is only the tip of the iceberg. He will also know that many of those delivering services on the ground have been hard pressed because of the reduction in other resources, especially those available through local authority funding. In many parts of the country, citizens advice bureaux are trying very hard to reorganise provision. In my own city of Sheffield, there is a comprehensive reorganisation to deliver value for money and ensure that the challenge can be met. Nevertheless, given the escalating demand for debt advice, which he has acknowledged, would he not also acknowledge that there is now an opportunity, which should be addressed, for that increased demand to be matched with additional resources?
Sajid Javid
Where there is emerging evidence of increased demand, I would expect MAS to respond. I am looking for the actual numbers, but off the top of my head, in 2012-13, the most recent financial year, MAS planned for 150,000 face-to-face debt advice sessions, but provided 158,000 sessions. The trend increased in the first six months of this financial year.
Yvonne Fovargue
The Minister’s concentration on the number of sessions is somewhat concerning because it is easy to provide a one-off session to someone with one debt. Providing for ongoing work with individuals with a high number of small debts, who continually have to write to creditors, is what costs time and requires expertise, which is why such organisations need paid staff with a high level of expertise. Such staff also help those people with money advice, because they identify the difference between priority debts and non-priority debts, and hopefully, following that advice, the individual will be more empowered to address their own problems.
Sajid Javid
I value what the hon. Lady says. She has considerable experience of this subject from before she came to the House and she makes a good point. If she would find it useful, as I certainly would, I would love to sit with her and learn more about what she says, which could help to inform decision making. If she is agreeable, that would be a good step forward.
In the interest of time, I will answer some of the questions that have been raised. Spending time on debt advice, when there is a demand for it, is clearly the right thing to do, and it is crucial to establish how debt advice can best be delivered to reach consumers. My hon. Friend the Member for Worcester is right that debt advice should be funded appropriately to meet demand and to provide services that directly benefit consumers. Last year, 94% of MAS’s £34.5 million budget for debt advice was spent on front-line delivery services. MAS aims to provide 150,000 debt advice sessions this year; last year, it exceeded the same target by 8,000.
The shadow Minister asked whether I have had direct discussions with MAS about this issue. I have not had specific discussions about the levy, as it would not be appropriate for me to get involved at this stage, given the independence we rightly give to the FCA in its oversight of MAS regarding the levy structure. She may be aware that the FCA is still deciding the best way to structure the levy on the consumer lending industry, and it will publish details on that shortly.
The hon. Lady asked me about MAS more generally, and I again point her to the review that will take place, as the Government have promised, during this Parliament. She also rightly asked about alternative sources of lending, which we discussed in yesterday’s debate. She mentioned credit unions, and of course the Government are committed to helping to promote them. We have a credit union expansion project under which there is £38 million of Government funding to help credit unions to modernise and to increase their customer base across the country by more than 1 million. We also recently made regulatory changes to the interest rates that credit unions can charge to ensure that they are not losing money each time they make a loan commitment. As I said in closing yesterday’s debate, I would like to see what further action the Government may take to promote that important sector.
I once again thank my hon. Friend for securing the debate. He and many others made important points, and I know that he in particular cares deeply about consumer detriment in regard to the payday loan sector. He has already played a significant role in the Government’s response to consumer detriment in that area. He mentioned that he recognises that the FCA is independent, and I am sure that the authority has heard the arguments today and will reflect on them. I assure him that I will also further reflect on the points he and other hon. Members have articulated so well.
Mr Philip Hollobone (in the Chair)
I thank all who participated in that debate for their contributions. If they are not staying for the next debate, I ask them to leave quickly and quietly.
Croydon NHS (Financial Losses)
(10 years, 9 months ago)
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Sir Richard Ottaway (Croydon South) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone, for what is probably the first time. I speak today in a desperate bid to get some answers on a matter of grave importance that has brought my local national health service trust into disrepute. An internal audit, an external audit, an independent report and a council investigation have been unable to provide those answers. The debate concerns the huge sum of £28 million that was mis-stated in Croydon primary care trust’s financial accounts of 2010-11. I hasten to add that the issue does not apply to the present board.
Croydon PCT, now known as NHS Croydon, posted a £5.5 million surplus, despite sitting on an estimated £23 million black hole. More than two years after that mis-statement was exposed, we are still no closer to finding out exactly how much, how, who and why. Our best idea is that it was the result of a combination of incompetence bordering on neglect and cover-up. A significant lack of documentation and a conspiracy of silence from the people in charge have made it all but impossible to ascertain the truth.
Other people and I have tried time and again to hold the people in charge to account; many of those people have moved on to other lucrative jobs in the NHS. Rules shield them from answering to the people they have failed. Those of us trying to get to the bottom of this financial fiasco have discovered, to our dismay, that they are beyond the reach of not only NHS England’s chief executive, but the Secretary of State as well. That is quite baffling. The implications, not only for Croydon and its NHS cluster, but for the NHS as a whole, are deeply disturbing. That a health trust can lose such enormous sums of money without anyone noticing, and without anyone accepting responsibility subsequently, is frankly unacceptable. The people of Croydon and the NHS deserve better than that.
Allow me to recap the events that led to today’s debate, which has the full support of my hon. Friend the Member for Croydon Central (Gavin Barwell), who shares my frustration. In February 2011, NHS Croydon merged with four other primary care trusts in south-west London to form a cluster. Four months later, when the final accounts were signed off, a £5.5 million surplus was reported for 2010-11. By that time, however, a new financial director had begun to identify issues regarding the budget-setting for the 2011-12 financial year. The budget was indicated, but the figures lacked detail and transparency. For example, there were unpaid invoices that were not budgeted for.
In October 2011, the cluster’s chief executive sent an e-mail to staff informing them of a
“change in our understanding of NHS Croydon’s financial position”.
NHS Croydon, it appeared, had been living beyond its means and other PCTs in the cluster would have to cough up with their reserves. Suspicion fell on the previous year’s finances, even though an external and internal audit had signed them off at great expense; Deloitte charged £60,000 and the Audit Commission charged £250,000. The matter was referred to NHS London, which commissioned an independent review by Ernst and Young. The final report, published in May 2012, confirmed that the final accounts had been mis-stated by at least £28 million. It also highlighted limited scrutiny by the trust board and audit committee, a lack of leadership in the finance team and the move from PCTs to clusters as contributing factors to the multi-million pound black hole.
The report found that an unqualified accountant, Mark Phillips, who had been left in charge of a finance department where 50% of the staff were on interim appointments, had made unwarranted adjustments to the accounts. He reported directly to Caroline Taylor, the trust’s chief executive, yet NHS London concluded that
“no individual was entirely at fault”,
and that there was
“no need for any further inquiry into what had happened.”
It said that the priority was to ensure that lessons learned were applied across the NHS in London. Let me translate that—it is called a whitewash.
Washing one’s hands of a problem does not mean that it ceases to exist. The financial liabilities of NHS Croydon became the financial liabilities of the health care services throughout the cluster. Local authorities within the cluster were unhappy with NHS London’s verdict and set up a joint committee to investigate. The management, who had by now moved on to other parts of the NHS, showed utter contempt for that inquiry.
Of 11 people whom the joint committee identified as being significant to their investigation, only three dignified it with an appearance. Key officers from NHS Croydon snubbed it, including the chief executive, Caroline Taylor—she moved on to a top job in charge of PCTs for NHS North Central London before becoming administrator of the failed South London Healthcare NHS Trust on a salary of £165,000 a year. The interim deputy director of finance, Mark Phillips, who was effectively in charge of the finance team, also snubbed it, while his boss Stephen O’Brien, who also refused to give evidence, was off on sick leave. Other key players who refused to answer questions were the Croydon councillors David Fitze, who was in charge of the audit committee, Toni Letts, the former chairman of the trust and Labour leader Tony Newman. The committee also sought to speak with the authors of the report, but NHS London was not able to confirm who they were. Too many failed in their duty to give evidence.
Those who did oblige presented damning indictments of the culture at NHS Croydon. Dr Peter Brambleby, the trust’s director of public health at the time of the scandal, said that officers were under immense pressure to achieve a balanced budget at the end of the year and were therefore reluctant to challenge the sums as long as they added up. He also contested the claim that the poor finances had not affected the provision of local health services, identifying an early screening scheme for high-risk patients that had to be pulled in 2010-11.
Ann Radmore, chief executive of the south-west London cluster, told the committee that she believed that the mis-statement of accounts was deliberately hidden. John Power, former chairman of the audit committee, who briefly replaced David Fitze—a year before Mr Fitze was reinstated as chairman, he was deemed not to have sufficient financial qualifications—claimed that the £22 million deficit was largely, if not entirely, avoidable.
There were just three witnesses, so there was not a lot to go on, but the joint committee concluded from the scraps of information presented to it that the multi-million-pound mis-statement might have occurred due to individuals acting to safeguard their occupations and that that was to the detriment of NHS Croydon. Even if the overspend went on health care within Croydon, the committee said that it was
“unlikely to have been spent efficiently or in accordance with agreed priorities.”
That is not a good result. Crucially, the committee raised concerns that no one had been held to account for the financial mis-statement. It stressed that that was not to attribute blame, but to ensure that such behaviour was not repeated or left unchallenged within the NHS.
What about the future? We have not made much progress. We are left mulling over the shameful legacy of a local health care system that lacks transparency and accountability, rewards people who do not challenge inconsistencies, puts the interests of staff before those of patients and taxpayers, and flies in the face of justice. It cannot be right that the chief executive did not properly manage and scrutinise her team, the interim financial director did not have the proper accounting qualifications, the Audit Commission did not carry out thorough auditing, the board did not ask the right questions, and inquiry after inquiry failed to get to the bottom of the scandal.
NHS London said that there were “lessons to be learned”. It is a hackneyed cliché. How can we learn if we fail to understand what went wrong and how, and who was responsible? I am delighted that the Health Minister is here; I should like to think that she will be as alarmed as I am about the conduct in this case. When I asked her during oral questions last week for an assessment of its causes and effects, I was told that
“NHS London in June 2012 identified a systemic failure of financial management within NHS Croydon”.—[Official Report, 14 January 2014; Vol. 573, c. 709.]
What does that mean? Does it mean that there is a problem with the system at NHS Croydon, or in the NHS at large? An organisation “living beyond its means” is not systemic failure, and nor is the making of “unwarranted adjustments” to the accounts, a reluctance to challenge the sums as long as they have added up, the deliberate hiding of accounts, or a deficit that was largely if not entirely avoidable. It sounds like obfuscation to me, and I believe that Ministers are receiving bad advice.
There is a systemic failure that has not yet been resolved. Neither Sir David Nicholson, the chief executive of NHS England, nor the Secretary of State can force the likes of Ms Taylor—on a six-figure salary courtesy of the public purse—to respond to questions about the catastrophe that she presided over. No one has the power to compel senior NHS officers to co-operate fully with scrutiny if they have already moved to a new job, even if that job is within the NHS. That seems equivalent to telling a suspected thief that they can burgle a home and avoid court by moving on to the next property.
The system is broken. I have said this before, and I say it again now to the House:
Ms Taylor and senior executives should be forced to give evidence about the huge scale of the losses. If their bosses cannot make that happen—I do not challenge the idea that they want it to happen—and if the Government cannot make it happen either, perhaps the Department of Health should get specific statutory powers to deal with former officials who have moved on. I hope that the Minister will do everything in her power to get to the bottom of the mess.
The Health Secretary has made a lot of positive noises about accountability and transparency in the NHS. I applaud that, whether it is a question of doctors and nurses saying they are sorry when they make mistakes, or of NHS managers being warned that they cannot expect to keep their jobs if they preside over failings in care. However, the Department may be interested to hear that members of the finance team at the former Croydon PCT have transferred to the south-west London cluster and others may have transferred to other NHS bodies. In the words of the joint committee:
“It is very possible that those who were possibly doing wrong things in all innocence, are now scattered throughout the wider NHS with who knows what consequences.”
Does the Minister agree that it is high time we got some answers and accountability? If she is unable to hold Ms Taylor and her senior colleagues to account, the responsibility will have to lie with her Department.
The Parliamentary Under-Secretary of State for Health (Jane Ellison)
I tell my right hon. Friend the Member for Croydon South (Sir Richard Ottaway) at the outset that if I cannot respond today to some of the concerns he has outlined, I will be happy to follow them up later. I have already had a couple of meetings about the details of the matter and my officials tried to contact him yesterday.
I congratulate my right hon. Friend on securing the debate. I know that the issue is a big one in his constituency; as he said, it is also a big issue for the NHS. I share his frustration at the catastrophic situation that arose at the former Croydon primary care trust. As we have heard, a stated surplus of £5.4 million in NHS Croydon’s accounts for 2010-11 was revealed to be a deficit of £22.4 million, so there was a funding gap of £27.8 million.
I understand that the gap arose from an overspend on the provision of health services, but my right hon. Friend makes a fair point when he says that such an overspend, in as much as it is not controlled, is hardly likely to have been directed to the most beneficial places. It is probably fair to say, and the Ernst and Young report pointed out, that patient care was not compromised as a result of what happened. The situation is slightly different from money being misappropriated and not spent on health care. That does not make the situation better, but there is a difference.
I am not going to try to defend the indefensible. The Government position is clear: overspends are not acceptable and all NHS organisations must live within their means. As my right hon. Friend is aware, an independent review commissioned by NHS London was published in spring 2012 and it identified a series of failures in financial management. I realise that my right hon. Friend is not happy with the use of the word “systemic” but I would dispute his view slightly. There were several systems, none of which picked up the problem, so to that extent “systemic failures” is a fair description. The question is what we have done to change the systems and make it more likely that such a combination of circumstances cannot occur again. I think that we have made progress on that, but there are probably further things we can do.
The failings in question, together with substandard financial processes and poor management reporting—and, indeed, poor management—led to an inaccurate picture of the organisation’s financial position. The report highlighted contributory factors, including limited scrutiny and challenge by NHS Croydon’s board and scrutiny committee; a lack of leadership in the finance team during the finance director’s sick leave—as my right hon. Friend said, the interim finance director was insufficiently qualified—and difficulties with leadership and operational continuity during the move to the cluster.
The PCT commissioned an internal audit and the Audit Commission commissioned an external audit, both of which failed to uncover the significant financial irregularities. That is extraordinary. One of the audits was conducted by a well known firm of auditors; in a discussion of the matter yesterday with officials there was a feeling that that money was not well spent and should ideally have been refunded, given that it did not uncover the issue. The Ernst and Young report found that no individual was entirely at fault—rather than that no individual was at fault—but clearly there were people who performed poorly. It also found no adverse effect on patient care and no evidence of personal gain.
As I said in the House last week, it is important to note the measures that have been taken to prevent what happened at Croydon from happening again. Understanding what happened will give us an understanding of prevention methods. Following publication of the report, NHS London wrote to all primary care trusts outlining the lessons to be learned, as one would expect. In south-west London, the joint boards of the PCTs established a work programme to ensure that all the recommendations from the independent report would be addressed. That programme was overseen by the audit committee of the joint boards, implemented by management and assured by internal audit.
Furthermore, since their establishment the clinical commissioning groups have adopted a harmonised ledger system, ensuring that they all approach their accounts in a similar manner. That will make it more difficult to conceal irregularities, and will allow more effective scrutiny by NHS England and others. Someone coming to look at the books of another CCG would not be thrown by a different ledger system but instantly encounter a familiar system, making it more likely that they could spot what was going on. Problems would not be concealed by a particular version of the system.
I know that my right hon. Friend is frustrated about the fact that no former officers of NHS Croydon have been held to account, and I understand that. He wrote to my right hon. Friend the Secretary of State in support of a recommendation, from the joint health overview and scrutiny committee in south-west London, that such committees be given powers to enable them to compel former employees of NHS bodies to appear.
As my right hon. Friend knows, the Secretary of State was unable to accept that recommendation. Employees attend before local authorities to answer questions on behalf of the relevant body and not in a personal capacity. Accordingly, the Local Authority (Public Health, Health and Wellbeing Boards and Health Scrutiny) Regulations 2013 do not impose duties on people who are no longer employees of the NHS body in question. Where employees have moved, we would expect the relevant body to have appropriate handover arrangements and to identify another suitable person to attend. It should not be the case that people can move on and no one else will attend as a result; someone else should be able to respond as part of the handover arrangements.
The Department of Health will, however, publish new guidance shortly on local government health scrutiny, and I am happy to ensure that it is discussed when available. In addition to supporting local government, the guidance will help to ensure that NHS organisations are aware of their duties and responsibilities. We want to start to tackle the culture that my right hon. Friend describes of people being able to move on without their mistakes catching up with them.
It is extremely unfortunate that Croydon’s clinical commissioning group is now operating with a deficit as a result of overspending by the former primary care trust. It is important, however, to concentrate on what has happened since, such as the measures being taken to bring the local health economy back to financial balance.
My right hon. Friend is rightly concerned about the impact on his constituents and others in Croydon. I have already touched on some of the steps being taken to minimise the risk of such a situation arising again, but there are other steps to take and further questions to ask. The CCG has developed a five-year financial improvement plan and is working closely with NHS England to help to achieve its target. I understand that NHS England’s London regional team is meeting the CCG monthly to track delivery against the plan. Furthermore, Croydon will be receiving budget growth of around 3.5%, compared with the national minimum of 2.1%. Setting aside the problems of the past, that reflects Croydon’s being some 7% below target and the growth, which is above average, should help to ease its return to financial balance and to close the gap faster.
I am also advised that the Croydon financial management team has been restructured with new leadership, clear accountability and new team members in post since April 2013. NHS England has retained reporting oversight through the national financial reporting system, which is another substantive change since the unfortunate events took place. I am pleased to assure my right hon. Friend that, as I mentioned briefly in the House last week, when CCGs were established all chief financial officers were subject to a rigorous independent assessment and appointment process. I hope that he agrees that that is a welcome development.
Furthermore, NHS England has been involved in the appointment of all substantive chief financial officers in London. I have asked officials to consider the appointment of interim CFOs, as it was clearly a real weakness in Croydon. I have not yet received assurance that there is the same level of scrutiny for interim CFOs, so I have asked for more work on that. NHS England and NHS London are looking at how to bring in more oversight in the same way as they have with substantive chief officers. Going right to the heart of what my right hon. Friend says, I have also asked how we can prevent people from popping up in another position where they could repeat the mistakes that they made in the past. Some such systems are in place, but oversight of appointments is critical, so more work must be done there.
The clinical commissioning group has established a finance committee, as part of its membership constitution, to oversee the financial performance of the organisation and to provide additional time for board members to scrutinise the financial position. I am assured that Croydon CCG’s governing body remains committed to achieving its financial targets—I would hope that it would say that, but I have no reason to believe otherwise and know that it is taking the matter seriously—based on clinical and quality led service improvement programmes.
I understand and share the frustration of my right hon. Friend. I think that I have picked up on some of the points made in his very good speech, but we accept that others need further investigation. I am happy to discuss those with him after the debate, so that he can feed through any other questions or concerns.
It is not enough just to say that we have learned lessons; we need to do everything in our power to reduce the chance of such things happening again. I have met NHS England specifically to discuss the issue and, obviously, I communicated my concerns. I will follow that up after this debate and look at what more can be done to ensure that such catastrophic events cannot happen again. I hope I have given my right hon. Friend some reassurance, although I accept that he will continue, rightly, to campaign for more satisfaction.
Ticket Abuse
(10 years, 9 months ago)
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Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
It is an honour to serve under your chairmanship, Mr Crausby. I am grateful to Mr Speaker for granting this timely debate.
The all-party group on ticket abuse, which I am pleased to chair with my friend, the hon. Member for Hove (Mike Weatherley), ably assisted by the hon. Members for High Peak (Andrew Bingham) and for Selby and Ainsty (Nigel Adams) and my hon. Friends the Members for Bristol East (Kerry McCarthy) and for Liverpool, Walton (Steve Rotheram), who are vice-chairs, was set up shortly before the Christmas recess. Our short inquiry into the state of the secondary ticketing market was due to start next week, so this debate is very much intended as being, I hope, the first of many in Parliament over the coming months.
Our inquiry had been due to start next week, but unfortunately we have had to cancel our first sitting, in which we were to hear evidence from the major players in the secondary ticketing industry. It was a shame that none was able to attend, however, including the boss of Seatwave, who sits on the Minister’s departmental board. None the less, the inquiry will go on, and over the coming months we will hear from the live events industry and consumers, as well as those who do whatever they can to design out, or otherwise prevent, the exploitation of events by resellers.
Mr Christopher Chope (Christchurch) (Con)
The hon. Lady says that her all-party group—an organisation that has already made up its mind that something is wrong—will be carrying out a non-independent inquiry that will be addressed by a select group of people. How will it ever be able to produce an objective response?
Mrs Hodgson
We have not already made up our mind—obviously that is the purpose of the inquiry—but we have already received evidence from the Metropolitan police that has proved that abuses are taking place. We are looking for solutions, as Ministers asked us to do when we met them. I hope that the inquiry will uncover solutions to some problems that have already been identified. We are not self-selecting, and if the hon. Gentleman wants to come to give evidence, we will be happy to hear from him.
The Minister and hon. Members are no doubt aware of where I come from on this issue. In 2010, I promoted a private Member’s Bill, the Sale of Tickets (Sporting and Cultural Events) Bill, which was debated on Second Reading on 21 January 2011. I will try not to repeat the speech I made that day, because it was around an hour in length, but many of the points I raised then are as true and as worthy of being made today. Other hon. Members who attended that debate are present today, and I hope that they do not use the same arguments—they might have come up with some new ones. Perhaps this debate will convince them to change their minds.
I am going to go through what has happened since that debate and what should happen in the future. It is worth restating first, however, why I embarked on this campaign all those years ago and what has sustained me, despite the continued stonewalling of the current Minister’s predecessors. My daughter is a second-generation Take That fan—I being the first generation—and I was alerted to this scandalous practice by her sense of great unfairness that she had not been able to acquire Take That tickets for us, despite being ready to buy them online the minute the tickets went on sale, only to see them moments later on other websites for many times the original price.
I looked into the practice further and found that neither my daughter nor Take That were alone. In fact, that day I found just the tip of the iceberg, because this happens week in, week out with music, comedy, sport and theatrical events up and down the country. The same situation affects not only Wembley arena gigs and international matches, but small and medium-capacity concerts in provincial towns and cities throughout the country. It even affects art exhibitions; someone would have been very lucky to pay face value to see the recent David Bowie exhibition at the Victoria and Albert museum at a convenient time or, similarly, the da Vinci exhibition at the National Gallery last year. The Chelsea flower show regularly makes the news when its tickets hit many times face value on secondary sites. The most recent example to hit the headlines and inspire columns and features about the secondary market was the Monty Python reunion, probably because lots of journalists and editors wanted to go themselves.
My daughter’s experience started me on this crusade, but I have kept fighting in the light of the experiences of countless other fans of all kinds of events who are disgusted by this practice. I thank all those people who have e-mailed and tweeted me over the past few years for their support.
This is not just an emotive issue, however, although that is often the case—bear in mind that famous line about football being not a matter of life and death, but more important than that. As I did my research and more people supported my campaign, I met more stakeholders in the live events industry and became increasingly aware of the real concern that this kind of parasitical practice is detrimental to our creative industries. It stands to reason that if someone is creaming off money from the sector without putting anything in, the industry will suffer. In the case of the creative and live events sector, it would make sense for the Government to do everything possible to protect and support it, given that it sustains more than 1 million jobs and accounts for a significant proportion of our exports to the rest of the world, especially with regard to music.
Tourism is important to the UK economy as well, and our creative industries are particularly important to tourism. How many tourists come to the UK to see a show in the west end, to attend one of our many excellent festivals or to see a gig at one of our growing network of regional stadiums, such as the Stadium of Light in Sunderland? According to a UK Music’s recent report “Music Tourism: Wish You Were Here”, music tourism is worth £2.2 billion to the economy, with each overseas tourist spending on average more than £650. Those tourists will not come over here to spend all that money in our service and retail sectors if they cannot get a ticket for a fair price.
In the same vein, domestic event goers with limited funds are not likely to go to other events, or to spend a great deal at or around an event for which they do have a ticket, if their ticket has cost them many times what it should have. Even worse, if people are priced out of going to a gig, game or comedy show, that could be the end of their relationship with the band, sport or comedian that they were planning to go and see, thus harming long-term sustainability. Ticket touting is bad for not only fans, but the live events business, which was why the fifth recommendation in the UK Music report was that the Government address the issue, including through legislation if necessary, to ensure that the sector keeps going from strength to strength.
Many within the industry have had to adapt their business models to fit the market following what I would call the green light that the secondary market got from the previous Government—I am sorry to say—and the Culture, Media and Sport Committee back in 2008. Both said that the secondary market served a purpose for fans and that it could regulate itself.
Kerry McCarthy (Bristol East) (Lab)
I congratulate my hon. Friend on her work, about which I know that she is absolutely passionate. She highlights a point that is made over and over again by people who seek to defend the practice. Yes, there is a value to secondary ticketing when people want to offload tickets because they happen not to be able to make an event, or if people are able to snap up tickets at the last minute after thinking that they would not be able to attend. However, there is a big difference between those practices and the market manipulation that is taking place on a huge scale, and that is what my hon. Friend is talking about.
Mrs Hodgson
That is exactly the point that I want to expand on. We all agree that the secondary market can serve a purpose—if we have tickets to an event that we thought we could go to, but then find that we cannot attend because of a change in work patterns or whatever—but the exponential growth in online resale that we have seen since 2008, with major players coming from America to get a slice of the growing pie, proves my “green light” point. If the brakes were on before 2008, while we were waiting for the decisions, they were certainly smashed to pieces afterwards, and people in the industry have seen touts making more and more money from their work and investment without putting anything in. After all, when a ticket sells for double its face value, the tout makes more money than everyone involved in putting on the show.
People in the industry tried unsuccessfully to convince the Government and Parliament to do something about the situation. Having failed in that attempt, they decided—reluctantly, in my opinion—that if someone was going to make that money, it might as well be them. Some are doing so openly by selling premium packages or appointing a secondary website as an official partner, as Jessie J did recently. Some, however, are doing it through back channels because they do not want their fans to know that they are effectively being ripped off by the artiste they admire, as that would inevitably hurt their relationship.
The practice of allocating blocks of tickets directly to the secondary market was exposed by a “Dispatches” documentary in 2012, which I took part in. I hope the Minister watched it—I have a copy in my office that I can pass on to her if she did not. Such under the table dealing is a direct consequence of successive Governments failing to do anything to protect fans. At the very least we need to bring those dealings out into the open.
It is not as if there is no precedent for protecting fans, as we protected Olympic tickets from being exploited by touts. I am aware that doing so was a condition of being granted the games by the International Olympic Committee, but I would like to think that that would have happened anyway, given the national significance of the games and the obvious security considerations.
I note from the excellent Library debate pack—I put on record my thanks to our exceptional Library researchers for putting it together in such a short space of time—that the Scottish Parliament has passed legislation protecting tickets for the Commonwealth games, which is welcome. Colleagues will know that the unit set up to monitor Olympic touting and other crimes associated with the games, Operation Podium, also looked at the wider secondary market in the years it was in operation—from 2005 to 2013. It estimated that that market was worth £1 billion, and its initial findings resulted in the fine for touting Olympic tickets being quadrupled. I sat on the Public Bill Committee that considered the legislation that put that in place, and during our proceedings, a representative from the Metropolitan police told us that the people they were tracking who were trying to tout Olympic tickets were the same players who control most of the inventory on sale on a day-to-day basis. During our questioning, I nearly coaxed him into agreeing that action was needed to regulate the wider secondary market, but he stuck to his brief very professionally.
I might not have been successful on that occasion, but the recommendations in the report on ticket crime that Operation Podium published shortly before it was disbanded last year could not have been clearer. “Ticket Crime: Problem Profile” found:
“Due to the surreptitious way that large numbers of ‘primary’ tickets are diverted straight onto secondary ticket websites, members of the public have little choice but to try to source tickets on the secondary ticket market.”
Its findings led the unit to conclude:
“The lack of legislation outlawing the unauthorised resale of tickets and the absence of regulation of the primary and secondary ticket market encourages unscrupulous practices, a lack of transparency and fraud.”
The unit therefore recommended:
“Consideration must be given to introducing legislation to govern the unauthorised sale of event tickets. The lack of legislation in this area enables fraud and places the public at risk of economic crime…The primary and secondary ticket market require regulation to ensure transparency, allowing consumers to understand who they are buying from and affording them better protection from ticket crime.”
The Minister’s predecessor, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), told me repeatedly that if we provided evidence of market failure he would reconsider his position; I refer Members to Hansard, volume 551, column 997W from 25 October 2012, and volume 542, column 66WH from 13 March 2012. The latter refers to the long-awaited report from the Office of Fair Trading, which I hope we will see later this year.
Even given the damning report from Operation Podium, the Government have still refused to engage on how to protect fans. I hope that the new Minister will differ on that and agree with me and other colleagues that, when the police say that a market needs to be cleaned up because it is acting as a front for organised crime and fraud, we should probably listen to them.
If we needed confirmation that the secondary market is allowing fraud to be perpetrated, we got it in July last year, when it emerged through an investigation by Radio 4’s “You and Yours” programme, working with security expert Reg Walker, that thousands of counterfeit tickets had been sold through the major secondary market platforms. Those platforms tell people that tickets are guaranteed because sellers receive their money for a ticket only once the buyer has been to the event without incident. That would be the case if someone were to try to shift a few tickets for an event they could not attend or if they were small-time casual touts. However, the fraud could be perpetrated because the restriction does not apply to the big players, otherwise known as power sellers or brokers—although I would call them industrial touts.
The secondary platforms compete for inventory from those major players and the commissions from their sales, so they bend over backwards to win their business. That means preferential rates and premium services, and even the odd party, with drinks and networking opportunities; but importantly it also evidently means disbursing money paid for tickets before those tickets have been verified by the end user.
Unscrupulous individuals—they would be called “gangsters” or “organised criminal networks” in common parlance—were able to establish themselves as power sellers by selling large amounts of genuine stock, although we do not know from where they got it. When they then carpet-bombed the market with false tickets, they had ensured that they got their money within days of the sale. By the time the reported thousands of fans were knocked back from concerts by the likes of Beyoncé and One Direction, those criminals were long gone.
I am not saying that the four major secondary platforms that were stung by that fraud were complicit in any way, although my understanding is that they did not exactly run to the police about that criminal activity, probably because it would harm their reputation; it was an issue of damage limitation. However, the fact that their processes allowed the fraud to happen shows that the market is not foolproof—or gangster-proof—and desperately needs reform and transparency. I have heard it argued that if those websites did not exist, all those fans would be out of pocket, whereas now they will be reimbursed eventually, if they are tenacious. However, without those websites, with their aggressive marketing and their promise of safe transactions, the criminals or criminal organisations would not have been able to sell nearly as many counterfeit tickets in the first place.
The Minister will be well aware of the trouble that rugby union has had with the resale of tickets for high-profile games. Some have credited the Rugby Football Union with driving viagogo out of the country to the safety of Switzerland, after it won a High Court battle to be told the identities of people who had broken its terms and conditions by reselling tickets to high-profile games. Of course, it is only the company address that has moved abroad; the business retains an operation in London and trades here as before. However, we have to ask ourselves, why did viagogo run away if it has nothing to hide?
Like many national sport governing bodies, the RFU is conscious of the need continually to feed the grassroots and drive participation at every level of the game. That is not all altruistic; if the grassroots are neglected, every level of the game suffers very quickly—gate receipts fall and talent does not come through, meaning that our clubs and national teams are not as competitive. That then feeds back again, damaging interest in the sport.
For that reason, the RFU ensures that a significant number of tickets for high-profile games are distributed to the 2,000 or so rugby clubs across the country. Indeed, it even announced before Christmas that that would include at least one ticket per club for the rugby world cup final in 2015. The RFU knows that it could get much more for those tickets—indeed, for all the tournament tickets—on the open market, but that is simply not the point. It wants to ensure that not just wealthy individuals and corporate buyers can afford to see the best rugby teams and players in the world.
The RFU wanted the identity of those reselling tickets to be known to ensure that they contribute to the long-term fostering of grass-roots participation, instead of making some individual a nice wad of cash. That is why the RFU and England Rugby 2015 have continually asked the Government to legislate to protect tickets for the 2015 rugby world cup from being touted. It is disappointing that, so far, the Government have refused to do that.
I hope that when the World cup comes around, our streets will not be littered with counterfeit tickets bought innocently from people who were selling them all over the place, or because they were available from unofficial outlets and fans could not tell the difference from legitimate tickets. The World cup organisers must do as much as they can to limit the number of tickets that fall into the hands of touts and to educate consumers about the official resale mechanism through which they will be guaranteed genuine tickets, as happened for the Olympics.
I am sure the Minister will be aware that touts cannot be blocked completely. She will be aware, from the last Department for Communities and Local Government questions, that if someone is desperate to secure a ticket now for the World cup final, they could do so today, on at least one of the secondary websites, for around 10 times the face value of one of the lowest priced seats. Some of the posh seats in the west lower tier would set them back almost £18,000 a pair, and that is despite the tickets not yet having gone on sale to the public; that will not happen for a further eight months. The touts obviously know that they will be able to obtain tickets, so they are selling them in advance at huge profits.
Does the Minister recognise that the situation is a direct consequence of her Department’s choosing not to get involved? The problem does not apply only to rugby; the governing bodies and major event holders in cricket and tennis have been at pains to try to enforce the non-resale clauses that they put on their tickets, for much the same reason. Alienating fans with ordinary means from prestigious events means risking the loss of their continued involvement with and patronage of the sport.
Top-flight football is the one sport in which there has historically been some protection for fans, but legislation introduced in 1994 to tackle hooliganism is increasingly being circumvented by people doing deals and accepting money from the secondary websites to authorise them to resell their tickets. That loophole must obviously be closed immediately, and there are growing calls from fans—including Spurs fans, as reported in local papers yesterday—in favour of that happening.
The websites are always at pains to point out that it is individuals, not them, who are selling the tickets. In that case, is it all right for someone to buy a season ticket for a premiership club, never to attend a match, and to make a fortune reselling their 19 home tickets on an “authorised” secondary market, when it would be illegal for a genuine fan who cannot go to one match to sell a single ticket at face value to their mate?
I asked in a written question a few months ago what conversations the Department had had with the football world about this issue, and the answer was “none”. I hope that the issue is now on the Minister’s radar, that she will give us her opinion on the practice and that she will have conversations with the football world. Does she think what is happening is in the spirit of the original legislation and will she close the loophole?
When the hon. Member for Hove secured a short Westminster Hall debate on this issue back in March 2012, the hon. Member for Chatham and Aylesford (Tracey Crouch) intervened on him and perfectly distilled the problems in the market. She asked:
“Does my hon. Friend agree that we should be putting the fan, not the salesman, at the centre of the ticketing process for live music and other events?”— [Official Report, 13 March 2012; Vol. 542, c. 59WH.]
That is exactly what we should be doing. We should put our constituents first, closely followed by the legitimate and important businesses that employ them and generate wealth for the UK. We should put last those who seek only to exploit. We can do that by legislating to make the secondary market more transparent and making people who profit from it more accountable to both the end consumer and those who own the intellectual property, on the back of which they are getting rich.
The all-party group will hear evidence on the best way of doing that. The intention is to table new clauses to the Consumer Rights Bill when it comes before the House later in the year. I will not prejudge the results of that process and the ideas that it will no doubt turn up. However, I suggest that the following is the minimum the Government can do to shut me and others up. Websites facilitating the unauthorised resale of event tickets should be made to reimburse a buyer for all costs incurred when tickets purchased through their service are found to be fraudulent. That should include all fees involved in purchasing the ticket, travel to and from the venue, and any accommodation and subsistence costs when evidence can be provided.
Mr David Nuttall (Bury North) (Con)
Does the hon. Lady fear that if she introduced that proposal it would just send those websites offshore?
Mrs Hodgson
They are already on the internet. Viagogo’s head office is in Switzerland, so they are offshore.
Mrs Hodgson
It should be enforced in the same way as we enforced the regulations on Olympics ticketing. Tickets could be sold abroad under different rules, but the number of tickets held here that had to go to UK fans had to follow UK legislation and the laws that we made.
Clive Efford (Eltham) (Lab)
Does my hon. Friend agree that if the details of tickets were provided to the organising body and they were being sold illegally, it could then cancel them? That information would be important in enforcing the proposal.
Mrs Hodgson
My hon. Friend is right. That already happens with some events, including those at the O2. If a ticket is found to have been resold illegally and can be traced, it can be cancelled. That is one mechanism that can be used. My proposal would give consumers the peace of mind that they will not be left out of pocket if they are the victim of ticket fraud. The websites that make money facilitating ticket touting say they currently aim to make that happen now, so I hope that my proposal will not be considered too much of a stretch.
To bring to the market the much-needed transparency that the police and many others say is needed, the websites should ensure that all ticket listings display the face value and seat number, where appropriate, of the tickets being purchased. That would prove that the tickets were real and already in existence. Websites selling tickets they have acquired themselves, or through direct allocations from an event holder, should disclose that clearly to buyers, and individuals selling tickets via these websites should be able to provide proof that they own the ticket they are selling.
EBay was probably the original platform for web-based touts. The main websites these days could learn a lot from the information about a seller that it allows to be seen. EBay no longer allows tickets to be sold; that part of its activity has been moved to StubHub, through which it makes commission from the buyer and seller. However, providing information could still apply to other listings, so that the number of tickets sold to other events, the number currently for sale, feedback from previous purchasers, and the record of any previous accounts held by the individual when possible could be detailed. That would allow consumers to make an informed choice about whether to buy from a tout who sells hundreds of tickets, or from a genuine fan who is selling tickets because they cannot go to the gig or event.
There is a serious problem with how some touts acquire tickets through the use of botnets and sophisticated software programmes to circumvent restrictions placed on sales by primary ticketing websites, but that is arguably more a case of detection and properly enforcing existing laws and regulations, rather than making new ones.
The secondary websites have a role to play in questioning the legality of the methods employed by their power sellers to acquire the vast inventories that some of them have. I hope that that will be explored more during the APPG’s inquiry.
I have given the Minister and the other Members here a lot to think about this afternoon, but I hope she will try to respond to as many of the different points as possible. If she cannot, I hope she will simply tell the House whether she thinks her Government should carry on entrenching and exacerbating the situation. Even the chair of the Association of Secondary Ticketing Agents admits that
“the ordinary fan is screwed. The decks are stacked against them.”
Please do not say that the previous Government and the Select Committee looked at this issue years ago, so it is all okay. I have spent the past 30 minutes explaining why that just does not wash any more and why everything that has happened in the past six years shows that the wrong decisions were made.
I could have spent much longer speaking, but I will not. I have had lots of material sent to me over the past few years, which I will present to Parliament in due course to back up the case. If, as I hope, the Minister does not want her Government to reach the end of their tenure having made the same mistakes, I will be delighted to work with her and colleagues from all parts of the House to come up with a solution that tips the balance back in favour of the fans.
As I have said before in debates on this subject, tickets give access to an experience—sometimes, a once-in-a-lifetime experience—and the normal market rules of supply and demand do not apply. The tickets should not go just to those with the deepest pockets, access to back-channel deals or criminal methods of acquiring them, unless that is what the person putting on the event wants. The Government’s job is to legislate to prevent such market failure and to ensure as far as possible that everyone has a fair and equal chance of purchasing a ticket to their dream event, at the price those putting on the event intended.
Philip Davies (Shipley) (Con)
It is a pleasure to serve under your chairmanship, Mr Crausby, and to follow the hon. Member for Washington and Sunderland West (Mrs Hodgson). I admire her persistence; she comes back time after time on the same issue, but I am afraid that time after time she is wrong about it.
I also commend the hon. Lady’s ingenuity. This matter, as she rightly said, has been extensively considered by the Culture, Media and Sport Committee, on which I serve. We found that the secondary market was perfectly legitimate and worked, on the whole, in the best interests of the consumer. The Office of Fair Trading has looked into the subject as well; it also found that the market worked in the best interests of the consumer.
The hon. Lady has decided to set up her own inquiry, from which she can at least guarantee the answer she wants. I commend her for doing that, because none of the objective looks at this issue have ever fallen on her side of the argument. I also commend her for persuading the shadow Minister, her hon. Friend the Member for Eltham (Clive Efford), that this is another populist bandwagon on which he must jump. It seems that there is not one he is not prepared to jump on at the moment. He has added this one to the list.
The premise that the hon. Lady starts from is false. She believes that, by definition, all ticket touting and all reselling of tickets must be done at a profit, but ticket touts can make a loss—some 50% of the tickets sold on viagogo are sold at face value or below. When she and, I hope, the Minister go back over the Select Committee reports and the Office of Fair Trading reports, they will note the excellent contribution to our Select Committee inquiry made by the right hon. Member for Barking (Margaret Hodge), who gave evidence as a Government Minister. We all know she does a fantastic job as Chair of the Public Accounts Committee. She was robust in her defence of the secondary market and explained the reasons why we should not intervene and why it works in the best interests of consumers. I hope everyone will look over the evidence that she gave.
I see my hon. Friend the Member for Hove (Mike Weatherley) in his place, and I have no doubt he will be looking to trouble the scorers as well. He speaks consistently about intellectual property rights for event promoters, but I take a different view. My belief is straightforward: if someone sells something to somebody, they have sold it on for that person to do as they wish with it. It happens all the time in the world of retail, which is where I came from.
When I was at Asda, we sold products, people bought them and whatever they did with the products was up to them. We used to get lots of letters from people saying that our Asda-branded whatever had been spotted being sold in a corner shop down the road. Our view was that that was fine, because it was their product. If they wanted to sell it on at a higher price than they paid, that was fine, because that is how the free market operates.
My advice is that if someone does not want a person to sell a product on, they should not sell it to that person in the first place. The first rule of the free market is that if a product is sold to someone, the product belongs to them and they can do with it as they please. That happens in all walks of life. People buy stamps off other people as an investment and hope that one day they can sell the stamps on to someone else at a profit. People do it with gold. I am sure that the former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), would have loved, when he sold the gold off at a ridiculously low price, to have said, “By the way, you cannot sell it on again at a price higher than what I have sold it to you at.” All that would have done was emphasise what a ridiculous mistake he made in the first place.
Kerry McCarthy
In a way, I am reluctant to intervene on the hon. Gentleman, because I know that is simply rising to his bait, but the difference surely is that in his examples—they are faintly ridiculous—the secondary market does not in any way, shape or form distort the primary market. The sort of secondary market that my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) is talking about completely and utterly distorts the primary market. The hon. Gentleman says that people can walk into Asda and buy whatever they like at the price that is charged to everyone, but they cannot do that with ticket prices these days.
Philip Davies
I do not agree with the hon. Lady. For example, when a new designer handbag comes on to the market and gets a lot of hype, there are massive queues in department stores of people hoping to buy one of the first 25 to go on sale. When new gadgets come out at Christmas time, there are massive queues of people hoping to be one of the few to get the few in stock.
The same happens with toys. I remember that a few years ago there was a massive craving for Buzz Lightyear toys and people queued up to get one. We all knew that the first 20 or 30 people, or however many could buy one, would resell the toys at a massively inflated price, in much the same way as happens with tickets. That is exactly what happened. Is anyone suggesting that the Government should intervene in the law to stop people reselling their Buzz Lightyears or their designer handbags, or whatever goes on sale in department stores with a lot of hype, at a higher price? If they do not want the Government to intervene to stop that—Lord help us if people want us to intervene in the market in that way—I do not see why they would want the Government to intervene with tickets. I do not see how tickets are a different commodity from designer handbags, toys or anything else.
Mrs Hodgson
The difference is that these are tickets to an experience. To use the Buzz Lightyear example, the situation would be like someone buying all the toys from the shop’s stock room so that other people never even had the opportunity to buy them off the shelves. That is what is going on. Customers have not even got a chance to buy them, because they have been bought out of the stock room.
Philip Davies
That might apply anyway. I do not know how shops operate, but it might well be that the shops say to staff, “If you want one, you can have one.” By the time any real punter gets in there, the items have all gone to members of staff. Does the hon. Lady really think that the Government should legislate to stop that from happening? That would be nonsensical. I do not see tickets as being different from anything else that people choose to buy and sell on at a higher price.
Mike Weatherley (Hove) (Con)
I also hesitate to rise to the bait, but is the point not about who owns the product? If someone buys a newly released iPad from someone else, it becomes their property to own and sell on, as would happen with baked beans. With tickets, the creative owner might prefer them to be sold in a particular way. For example, sports facilities might want a children’s area to build up support. The facilities could sell those tickets at much higher prices, but they prefer to sell them for a different reason than to be sold on again. It is the facilities’ products to do what they want with.
Philip Davies
My hon. Friend is right. It is the facilities’ product to do as they want with. If they want to go from house to house, picking the individual they want to sell those tickets to in a private transaction, they are free to do so. They choose to sell them in the public domain for anyone to apply for them. They sell them as they have chosen to sell them, and people are purchasing them as they have been invited to purchase them, so I am not sure what point my hon. Friend is making.
Mike Weatherley
That is an interesting point. If the owner of the ticket—the creative holder—wanted to restrict the people to whom it could be sold, does my hon. Friend agree that they should be able to?
Philip Davies
If the creator wants to sell the ticket in a particular way that to him or her guarantees that it goes to a particular person, they are free to do so. If they want to put it on the open market, the chances are that it will be purchased on the open market, and that is what happens. It is no good people bellyaching when people buy their tickets on the open market—presumably that is why they were put on the open market in the first place.
The idea that ticket touting negatively affects the artist or the person who is setting up the event is for the birds. If somebody is selling 50,000 tickets at £20 each, they have decided that they want to rake in £1 million in ticket sales from the event. It seems to me that the ticket touts are helping by buying up the tickets, because when the 50,000 tickets are sold, the event organiser and the artist have reached the amount—£1 million—that they were hoping to gain from ticket sales.
Whatever happens on the secondary market has no impact on the income that the event organiser has received from fixing up the event. It is still £1 million. If the event is not as popular as some people might have anticipated, the tout may well have done a favour by buying up tickets that they are not able to resell. They did not really want to go to the event, so they have helped the event organiser and the artist. The idea that reselling works is against the interests of the organiser and the artist is absolute nonsense. I hope that the Minister appreciates that and that we can nail the point for now.
My hon. Friend the Member for Hove is right: the event organiser can do lots of things to try to discourage people from selling tickets on. For example, for an event in, say, four months’ time, instead of selling all the tickets in one go the moment the gates open—therefore encouraging the secondary market—the event organiser could sell a few tickets week by week, including up to the final week before the event. In that case, the secondary market would not be quite as attractive because tickets were still going to be available the week before in the primary market.
If the issue is so massive for event promoters and organisers, why do they not take the steps within their capability to try and deter the market? As far as I can see, it is all crocodile tears. If such a terrible thing is happening, which is against the rules, and if people put on the tickets that they are not for resale, it is open for ticket sellers, event organisers and artists to take people who resell the tickets to court. If they are so sure of their ground on the issue, why not do that? Perhaps it is because they fear that the courts will decide that what they are trying to impose is an unfair condition on the selling of tickets. I suspect that they shy away from doing so because it will be exposed for the world to see that what they are trying to argue for is anti-competitive and an unfair thing to impose on somebody whom they are selling to. I suspect that is why we get all the hot air in places such as this, but why no one stumps up the money to take the case to court.
On looking after the interests of the consumer, I should mention the net book agreement. I was at Asda when we bust that agreement. What used to happen in years gone by was that publishers—I am sure my hon. Friend would have supported publishers at the time—produced a book and set its price, and nobody else could sell it at any other price. Asda, when I was there, felt that that was terrible for the consumer. We wanted to sell it for less and thought that our customers wanted to buy it for a lower price, so we decided, “Blow it, we’re going to sell them at a lower price anyway”. Of course, the publishers took Asda to court and what happened? The courts found in Asda’s favour and book prices collapsed, to the massive advantage of the consumer.
Presumably everybody here who is arguing against the secondary market for tickets are the sort of luddites who would have kept the net book agreement in place, thinking that publishers should have the right to charge whatever they like for a book and that retailers should not be able to sell it at a lower price. I think that was a nonsense then and it is a nonsense now, and there is absolutely no difference between the arguments. Saying that the event organiser should be able to charge what they like for a ticket and not allowing anyone to sell it for any other price is the same as saying that publishers should be able to sell a book at a price they set, and that nobody should be able to sell it on at a lower price themselves. I hope that the Minister accepts that argument as well.
The hon. Member for Washington and Sunderland West mentioned the rugby world cup. It seems to me that for that tournament, the secondary ticket market should not only be allowed to happen, but is desirable. As I mentioned to the Minister, people in New Zealand may well be very confident that their team will get to the final, so they might buy up tickets for the final in huge quantities. However, their team might get knocked out in the semi-final. We need some mechanism for allowing fans of South Africa, for example, who may have beaten New Zealand in the semi-final, to get hold of the tickets that all the New Zealanders have bought.
It seems to me that the secondary sale of tickets works to the advantage, rather than the disadvantage, of the consumer. It would be a bit of a sickener if someone bought the ticket for their country’s game, but could not sell it on because of some well meaning legislation that the hon. Lady is trying to impose.
We then hear the typical argument that real fans suffer. I have no idea how one defines a real fan, but I will hazard a guess that if someone is prepared to stump up £2,000 or £5,000 for a ticket to see a concert or a sporting occasion, they are a real fan. No real fan would stump up such a huge quantity of money to go and see something that they were not really interested in. It seems to me that the resale of tickets is more likely to guarantee that real fans turn up than any other mechanism.
The Labour party used to believe in the redistribution of wealth, but that is obviously long gone from its DNA. The chances are that the person wanting to buy a ticket for £5,000 is wealthier than the person wanting to sell it for £5,000. If somebody who is relatively poor wants to sell off their ticket at a huge profit, that seems a rather good redistribution of wealth from the rich to the poor. Obviously, however, the Labour party has given up on the redistribution of wealth. I am sure that many of its members and supporters would like to know that.
Nobody loses out at all with the resale of tickets. The event organiser gets the income that they had budgeted to get from the event, so they certainly do not lose out, nor does the artiste, who is guaranteed to perform before a packed audience. If I want to go to an event but am not sure whether I can, because of work commitments, when I finally decide that I can, I have only one mechanism through which to buy a ticket—the secondary market, which gives me an opportunity to go. If that market was not allowed, I would have no chance of going at all.
If I do not want to pay the inflated price that is being asked for the tickets, I do not have to. Nobody is forcing me to, so I have not lost out through the secondary market. I have been given a choice and an offer that otherwise I would not get. I am not entirely sure who loses out with the resale of tickets. I do not see who the loser is, to be perfectly honest, because for many occasions, the tickets will sell out in five minutes flat, so many legitimate people would not be able to go. The secondary market gives them a chance that they would not otherwise get.
The hon. Lady mentioned people selling on tickets that do not exist. That is called fraud. It is already illegal; I am not entirely sure why she wants to make it more illegal, but we cannot make something more illegal that is already illegal, so we can easily dismiss that.
Finally, the hon. Lady seems to think that the public are on her side on the issue, but I have no idea on what basis. ICM conducted opinion polls on the issue and asked people about this premise:
“If I had a ticket to a sporting event, concert or other event that I could no longer use, then I should be allowed to resell it.”
Some 86% agreed with that. Some 83% agreed with this premise:
“Once I’ve bought a ticket it is my property and I should be able to sell it just as I can any other private property”.
The enthusiasm of the hon. Member for Eltham appears to have wilted at that point, but that is not the case for 83% of the population. Some 86% of people polled agreed that
“It shouldn’t be against the law for people to resell tickets that they no longer want or can’t use.”
The same opinion poll showed that a clear majority thought that the price of a ticket should be determined only by what they were willing to pay. That seems to fly in the face of all the arguments that we have heard today.
I hope that I have instilled some balance into the debate, and that the Minister will bear in mind the Select Committee and Office of Fair Trading reports, as well as the excellent evidence given by the right hon. Member for Barking to the Select Committee, to the effect that what we are debating is the free market in operation. We should not try to outlaw it, but encourage it, because it works in the best interests of the consumer. That is what the Select Committee and the OFT found when they looked into the matter.
Mike Weatherley (Hove) (Con)
It is with trepidation that I follow my hon. Friend the Member for Shipley (Philip Davies). I enjoyed his speech very much.
Music, theatre, comedy and sport are vital to British society and the British economy. Our creative industries are worth more than £36 billion a year. They generate £70,000 a minute for the UK economy and employ 1.5 million people in the UK. I have consistently been a champion of the free market and I want to make it clear that I do not have a problem with artists or sports teams charging whatever prices they want for the services that they offer. That is their prerogative and they should be allowed to set the prices of their tickets or, if they choose, to sell them through secondary ticketing or auction websites. However, as the online marketplace has become quicker and easier to use, a large number of unsavoury and illegal practices have sprung up surrounding ticket reselling websites. That is why I, along with colleagues, have set up the all-party group on ticket abuse.
One of the key aspects of an honest and transparent ticket purchasing process is the intention of the buyer at the time of purchase. No one would begrudge a Rolling Stones fan who has become ill the day before the show the opportunity to sell their ticket on to someone else. However, an increasing number of people are buying tickets with no intention of going to the event. Furthermore, the situation does not affect only those fans who waited too long to buy tickets. With internet selling becoming more streamlined, touts are able to use sophisticated computer systems to buy large volumes of tickets automatically, mere seconds or minutes after they go online. It can often be practically impossible for the target fans to access the event, so they are forced to rely on an artificially created secondary market, and the content creators—and the Treasury—are deprived of revenue from the event. That is unacceptable.
Mr Nuttall
My hon. Friend said that the creators would be deprived of income, but surely a sell-out is a sell-out, and they have got as much as they expected to.
Mike Weatherley
The argument goes that the creator will still get the same sort of money, but that is not true, especially if there is an audience that they want to target. Taking away control from performers also takes away control of how money is distributed. I have no problem with a band giving a promoter tickets to sell on the secondary ticket market, if they want to generate additional income. However, the process should be transparent.
My hon. Friend did not mention the fact that the Treasury is disadvantaged by the practice. There are people who do not pay VAT or tax on their secondary ticketing sales, and that is wrong. If they make a profit from someone else’s activity, I do not see how he can disagree about their paying that.
In 2011, I supported the private Member’s Bill on ticket touting promoted by the hon. Member for Washington and Sunderland West (Mrs Hodgson). The sensible suggestion that profits from re-selling should be limited to 10% more than the face value of the ticket has already been adopted in some Australian states. We can argue about whether 10% is the correct amount, as there could be ticket fees and so on in addition.
Andrew Bingham (High Peak) (Con)
That would not work, because it would drive certain people to the underground market, as they would have to get more than 10%. Surely it would be back to blokes outside concert venues shouting “Tickets, tickets, tickets.”
Mike Weatherley
I tend to agree. I am not that worried about the odd ticket tout outside a venue, but I am worried about people making money from a bank of about 1,000 computers in a room the size of this one automatically buying tickets, when they have no intention of going to the gig. Those are not touts as we know them. Things have substantially changed since 2006-07. We are in a completely different sphere of ticket purchasing. Those people do not buy tickets for any other reason. The solution of a 10% limit on reselling would stop the people who buy purely intending to resell, rather than to go to the gig, who take rights away from the intellectual property creator.
Even for those who have not personally had experience of ticket touts, the extent of the problem is illustrated by the lengths to which they go to subvert ticketing controls. A potential solution to touting, which has been adopted by some venues already, is credit card verification, and many other methods are available. Nevertheless, touts often generate such large profits from many events that even that method is ineffective.
That does not, of course, address the issue of completely fraudulent tickets. When people buy, or are driven to buy, from a ticket reseller, they expose themselves to a greater risk. It is not uncommon for someone to buy tickets through a website that looks genuine, and make travel and accommodation plans to attend the event, only to discover when they arrive at the venue that their tickets are fakes. I take the point made by my hon. Friend the Member for Shipley that such activity is already illegal, but secondary ticketing makes such illegal activity easier.
The Metropolitan police published a comprehensive report on fraudulent ticketing and the danger it posed to the Olympics that specifically cited ticket fraud, touting and ticket reselling websites as areas of concern. Among several issues, the Met noted that websites with their servers based overseas were causing serious problems by advertising fraudulent tickets and then making it difficult for law enforcement agencies to track the offenders or shut down illegal sites. That is an irrefutable fact, and the Culture, Media and Sport Committee did not address it in 2007.
The Met’s report stressed, as I do, the need for an open and transparent system for ticket reselling, with clear and appropriate regulations. Transparency is the key to protecting not just content creators but ticket buyers from dubious and misleading transactions. It is common in the entertainment industries for all or part of the fee for professionals involved in an event to be paid in tickets. The venue might be paid in tickets to a corporate box, or a promoter or manager might be given them as part of their fee. That is done with the tacit understanding that the recipients of those tickets will subsequently be able to sell them on for significantly more than their face value. It is, of course, the prerogative of the content creators to do that if they want to, but it should be done transparently.
Some of my colleagues, including my hon. Friend, have suggested that trying to regulate ticket touting represents an interference in the natural free market. However, that is a misunderstanding of one of the key principles of the free market—the ability of a market to respond to demand by increasing supply. That is one of the five conditions of a free market. In the case of sports matches or live music, there is no way to increase supply. There are only so many games in the season and bands can only play so many dates.
Mike Weatherley
I have no problem with someone doing that if they want to. My point is that someone who does not want to do that, but wants to sell to a particular sector of society, such as young fans or particular fans in certain areas, should be allowed to apply to do so. I see nothing wrong with the people who provide the content suggesting how much they should get for it. If they want the free market to decide the price, I would be the first to say that that is right. If they want to give tickets to the promoter to sell on for whatever price they can get, as part of the deal, that is fine. Let us not, however, say that there should be no transparency about it, and that it should be under the table. We should bear in mind the police’s comments about secondary sites driving illegality.
Philip Davies
Obviously the event organisers do not care very much about it. I know that my hon. Friend has influence with people in the music industry. If they want to sell tickets to a young target audience, I am happy to use my good offices to try to distribute them around schools in my constituency—I hope that he will tell them so. However, they choose not to. They put them on the open market for anyone to get them, as they choose. If they are that bothered, perhaps they will take up my offer to distribute them in such a way.
Mike Weatherley
I would be delighted if my hon. Friend would meet me and some of the people from the industry. In fact, it would be fantastic if he was able to come along to some of the meetings of our all-party group at which we could hear from band managers and promoters about some of the problems that they experience. They tell me that this is a huge problem and that their fan bases, to whom they would like to distribute the tickets, also find that it is a problem. That is not me saying it, but the people who are in control of these things. They are looking to the Government to help them with sensible and fair regulation.
The proposals from the hon. Member for Washington and Sunderland West are measured and sensible. This would be not a huge leap forward, but a gentle nudge in the right direction that would assist the process of tickets being provided at the price that people or performers would want. I see nothing wrong with the proposals. The free market can still operate in situations in which performers would like it to operate. All we are saying is that there should be some sense in the whole thing.
Andrew Bingham (High Peak) (Con)
I did not intend to make a speech, because I just wanted to hear Members’ arguments—both sides of the argument have been put with great passion. My view is that we must take a pragmatic approach. There is a market for secondary tickets. If people cannot go to a concert, they have to get rid of their tickets. We live in a new world in which we have the internet, and we need to harness it. I think that what has been suggested is trying to preserve in aspic for a new world the way in which tickets used to be dealt with. I have looked into the secondary market and how people operate and, quite honestly, I think it works. I think it is a good system. People can offer their tickets for sale for the price that they want, and if other people want them, they can buy them. I hear the argument, “Oh, well, the ticket prices will be inflated,” but as my hon. Friend the Member for Shipley (Philip Davies) will know from his days at Asda, if people overprice things, no one will buy them. The market will dictate what price tickets will sell at, and we should let the market do that. I do not think that we need to be wrapping things in legislation at every turn.
Many of us will remember the days when there seemed to be people outside sporting events and musical events with fistfuls of tickets. I have never bought a ticket from a tout and I would not do so, but if someone does buy a ticket from a tout outside a stadium, they do not know whether it is genuine, and if an honest person is trying to get rid of a ticket because a member of their family cannot go to the event, they do not know whether the person buying it is paying them in forged money—we hear tales about forged £5 and £10 notes.
The secondary ticketing market, of which I was unaware until I looked into the issue in greater depth, provides a secure way for people to dispose of a ticket that they cannot use. There is a guarantee that they will be paid for the ticket and that the person buying it will get the ticket that they want. With regard to the price being driven up, let us say that there is a surplus of tickets to see the Rolling Stones, Motörhead or whoever my hon. Friend the Member for Hove (Mike Weatherley) would like to go and watch. I do not know what my hon. Friend the Member for Shipley likes to watch, but we will have a punt on Barbra Streisand or someone like that. If there is a market for the tickets, that will dictate the price. As has been said, many tickets go for a price below their face value, because that is what the market will allow.
Philip Davies
I will not go through my tastes in music with my hon. Friend, but I just want to point something out. Does he agree that many events do not even allow people to get a refund, and that if we do not allow people who cannot go to events to sell their tickets, we are in a completely ludicrous situation? If event organisers are so busy, perhaps a good place to start would be to force them all to allow people to receive full cash refunds if they cannot go to an event, which does not happen at the moment.
Andrew Bingham
Yes, and that practice has a knock-on effect because people think, “Actually, I’m not going to buy a ticket, because I don’t know whether I can go. I don’t want to pay out however much for a ticket because if I can’t use it, I’ve lost the money.” My hon. Friend makes a valid point.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) made a point about corporate responsibility. I think that legitimate companies with secondary ticket websites will be concerned about their corporate responsibility. I have looked into the issue and held discussions with them. I have talked about the internet and how the world is different, and there is a different way of dealing with tickets. I hear the argument about bots—roomfuls of computers just harvesting tickets. As far as I can see, however, such legitimate companies are aware of their corporate reputation and, as a result, are making every effort to prevent that sort of thing from happening. That is the way in which the secondary market and the systems seem to work. We are in a brave new world in which we are dealing with the internet. When tickets came out many years ago, I remember that we would sit there on the phone, pressing redial, redial, redial. Now we are on the internet, although sometimes it seems somewhat the same—we just hit refresh, refresh, refresh. Learning to deal with the secondary market is about using the internet, not abusing it.
I heard what was said about previous inquiries. My hon. Friend the Member for Christchurch (Mr Chope) said that the all-party group had made its mind up, but I am a vice-chairman of that group and I can assure him that I might not fit the template that he seems to imagine for the group, although that might disappoint one or two people. Let us carry out an open and honest inquiry. I have my views, and I will listen to all aspects of the argument, as I am sure that we all will. However, I note that the inquiries in previous Parliaments found nothing wrong with the current system, and I do not think that Government legislation is especially necessary at the moment. The system seems to work, but by all means let us have another look at it. The world has moved on but, as I said, my view is that at the moment it seems okay.
Mr David Nuttall (Bury North) (Con)
It is a pleasure to follow my hon. Friend the Member for High Peak (Andrew Bingham). This has been an interesting debate. As we have heard, we have perhaps been round this course before in Parliament—no doubt we will do so again—but the debate is no less enjoyable for that. The hon. Member for Washington and Sunderland West (Mrs Hodgson), who opened the debate, said that some hon. Members might have new arguments. I do not have any new arguments, because my belief in the free market is the same today as it was three years ago. It was on 21 January 2011—three years ago to the day—that we debated the hon. Lady’s private Member’s Bill, and my view today is the same as it was then. When someone buys a ticket, whether they are an individual or a large corporate entity, it is up to them what they do with it. It is not the job of the Government—it is not the job of the Houses of Parliament—to try to legislate to control in any way what they should do with it.
I agree that it is up to the original owner of the ticket—the band, promoter, sporting team or whoever—what they do with it. If they want to sell it, to whomever they want, I am happy to go along with that idea. It is perfectly sensible and right that they should do that. I do not accept that it is the job of Parliament to try to say to anyone that they cannot sell their ticket at a given price, whether that is 10% more than face value, 15% more, 20% more or whatever. Of course, the problem with introducing the 10% rule that was proposed in the private Member’s Bill is that if it is okay for the first person to sell the ticket for 10% more, what about the owner who has already paid 10% more for it? Are they then stuck with being able to sell it only at that price, or can they sell it for an additional 10%? The idea is just ridiculous.
My hon. Friend the Member for Hove (Mike Weatherley) made a point about bands wanting to target a certain sector. Let us not beat about the bush. What the proponents of controlling the secondary market seem to be suggesting is that that target audience is somehow those who are of lesser means—those who cannot afford to pay for a ticket in the open market. If bands are really committed to helping those of lesser means, there are many ways they can do so. What is to stop bands, on the day of the concert, from letting a certain number of people—the genuine fans—in for free? Those fans would be the people who were prepared to queue to see the band for free. The top bands, and middle-level and lower bands, could still get their money by selling the rest of the tickets at higher prices. They would still get as much as they ever would have, and they would be able to reward those fans of lesser means. I will not call those people “real” fans, however, because if someone is prepared to pay an inflated price, they are just as much of a real fan as someone who is prepared to queue throughout the night to see a particular band. I look forward to hearing what my hon. Friend the Minister has to say.
Clive Efford (Eltham) (Lab)
It is a pleasure to take part in this debate under your chairmanship, Mr Crausby. I start by paying tribute to my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson). She has been a tireless campaigner on the matter and is determined to protect the consumer, who is frequently ripped off by people exploiting the secondary ticketing market.
We need to get one or two things clear at the start. No one is suggesting that people should not be able to resell their tickets if they have a legitimate reason to do so, such as if they are unable to attend an event. We have all been in similar situations. The viagogo figure of 50% of tickets being sold for their face value or less arises because many people use the secondary ticketing market to try to minimise their losses when they cannot attend events. They did not necessarily buy tickets with the intention of making a profit and fail to sell them on.
We must have a robust secondary ticketing market that is properly regulated and that gives consumers protection. The secondary ticketing market must also allow organisers to monitor what is going on. The hon. Member for Shipley (Philip Davies) said that if somebody buys a ticket, they own the rights to it and can do what they like with it, but that is not true. When someone buys a ticket, they enter into a contract with the organiser. In many instances, the organiser makes stipulations regarding the selling on of tickets, which must be honoured. The ticketing market must be regulated and provide that information so that organisers can check ticket details at the point of sale. Let us face it; there is no other form of retail in which a consumer cannot examine the full details of a product. Rugby union made a challenge against viagogo on that basis, to try to secure access to such information.
We must protect the consumer against organised gangs of touts. The hon. Members for High Peak (Andrew Bingham), for Bury North (Mr Nuttall) and for Shipley made passionate speeches in favour of the free market. I have had various descriptions of redistribution of wealth thrust at me, but that given by the hon. Member for Shipley was a new one on me. He did not mention the link between crime and many instances in which people hoover up large numbers of tickets and sell them on. Presumably, he sees bank robbery as a form of redistribution of wealth and considers any form of crime that takes from the rich and gives to the poor to be justifiable in terms of the free market.
At the moment, 14 sets of tickets for the rugby world cup are available on the viagogo site. Tickets for that event will not even go on sale until autumn of next year, and the tournament will take place a year after that. When people do not even own those tickets yet, how can they be offering them for sale? The tickets on offer range from £86 to £10,000, and the two £10,000 tickets carry a £3,000 surcharge to cover the ticket guarantee and customer service. I would have thought that that was well and truly covered in the £10,000 price. What sort of extra cover could anyone need from viagogo to get a ticket guarantee? I would expect that to be part of the deal, but it is obviously not. People who use such sites are subject to some dubious additional charges, which is another area of concern.
The police inform us that touts are often linked to criminal gangs, and touting is estimated to raise some £40 million a year for organised criminal networks. The report “Ticket Crime: Problem Profile” published by the Metropolitan police in February 2013 states:
“Intelligence suggests that OCNs engaged in ticket crime have links to other organised crime, including the importation and production of drugs, as well as the smuggling of firearms and money laundering.”
We have heard impassioned pleas for a free market that facilitates such criminal activity, which is totally irresponsible and unjustifiable. Criminal gangs are well equipped, as my hon. Friend has set out, to hoover up tickets through networks of computers, botnets and so on ahead of genuine fans—the hon. Member for Shipley is no doubt wriggling in his seat at the mention of those words—whom they will force to pay extortionately high prices for those tickets.
I wrote to the Minister to ask that the rugby world cup, like the 2012 Olympics and Paralympics, be given a specific designation as an event of national significance to protect rugby fans. The organisers of the rugby world cup have priced their tickets to make them accessible to a range of fans, and they want to be able to resell returned tickets at face value through their own ticketing regime and reimburse the original purchasers. They want fans to be able to buy tickets at affordable prices so that a good cross-section of our communities and sports fans attend the events. What is wrong with that? Inevitably, however, criminal organisations and people who, even if they are not involved in criminal gangs, attempt to avoid paying tax on the profits that they earn from reselling tickets will buy tickets from under the noses of the fans. In so doing, they will completely undermine the ticketing policy that we, as politicians, have demanded of the England rugby world cup 2015 to try to ensure that tickets are accessible.
In my letter to the Minister, I asked for co-operation across the House to pass legislation to protect rugby fans from such exploitation. In her response, she mentions a consultation by the previous Government on ticketing. She states that the responses were broadly in line with the findings of the report by the Culture, Media and Sport Committee in 2008, and says that the consultation found that the biggest issue with regard to ticket resale concerned the practice of purchasing large numbers of tickets with the sole intention of releasing them back into the secondary market. That is exactly the point that we were raising, and we did not need it to be reiterated. She went on to say that the Department had looked at the Select Committee findings and the conclusions of the previous Government, and that it was broadly in agreement.
Time has moved on, and the Metropolitan police report that I have referred to states:
“The absence of a regulatory or legislative framework (apart from designated football matches) enables fraud, unscrupulous practices and a lack of transparency. This clearly places the public at risk. This matter was last considered by a Culture, Media and Sport select committee report in 2007.”
I think that report was actually in 2008. The Metropolitan police report continues:
“It is noted that, since then, the Internet has grown exponentially providing even more opportunities for fraudsters and unauthorised sellers to exploit.”
The Metropolitan police force has conducted a serious study into this area of operation since the 2012 Olympics and since the Select Committee’s report, and it has reached the conclusion that something needs to happen. The Metropolitan police report later states that there is a “lack of legislation outlawing” the practice.
In 2005, the then shadow Minister, the right hon. Member for Faversham and Mid Kent (Hugh Robertson), who became the Minister for Sport and the Olympics, said that ticket touting had a “knock-on effect” on the availability of tickets for real fans, and that
“ticket touting is now part of a vast organised criminal business.”—[Official Report, Standing Committee D, 18 October 2005; c. 101.]
When the Government were in opposition, they put forward exactly the same arguments as we are making today. Those arguments apply even more so now with the advancement of the secondary ticketing market on the internet.
I welcome the Minister’s offer of a meeting to discuss the issue. We can wait for legislation—I am sure that we will have detailed discussions about secondary ticketing market regulation when the consumer protection Bill is introduced—but when we meet, will the Minister guarantee that we will sit down and talk about how we will designate the rugby union world cup 2015 in order to protect fans from being exploited in the secondary ticketing market on the internet?
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)
It is a great pleasure to serve under your chairmanship, Mr Crausby. I would like to start by telling the hon. Member for Washington and Sunderland West (Mrs Hodgson) that I too was a Take That fan, although perhaps not first generation. I congratulate her on her very good musical taste and thank her for securing this debate. I also thank my hon. Friends the Members for Shipley (Philip Davies), for Hove (Mike Weatherley), for High Peak (Andrew Bingham) and for Bury North (Mr Nuttall), as well as the shadow Minister, the hon. Member for Eltham (Clive Efford), for their important contributions, which I have listened to carefully.
I welcome the opportunity to discuss ticket abuse, which is important to my Department, and I would like to assure the hon. Lady that the Government take the issue seriously and keep it under review. My officials have had lengthy discussions with the organisers of the rugby world cup—who have been repeatedly mentioned by Members today—and with other organisers of various events. We are aware of the concerns that the hon. Lady and others have highlighted today.
Although the Government have no plans to introduce new regulations on the ticketing and events market, we continue to encourage improvements so that all customers have an opportunity to purchase tickets and can do so in a secure, safe and proper environment. We believe that it is for event organisers, together with the professional ticketing organisations, to determine suitable arrangements for ticket sales to their various events. That is why my officials have had extensive discussions with both the event organisers and the ticketing organisations such as Ticketmaster.
Where the Government differ from some of the opinions expressed today is in the belief that the best way to achieve improvements is through legislation. Our view is that the best way to do that is by building effective safeguards into the ticketing processes. For example, at a meeting last month with Ticketmaster, which is the ticketing partner for the rugby world cup, officials had a detailed briefing on the options available to event organisers. Options include using barcoding, having named tickets, staggering the release of tickets, and rewarding fans with a history of support. I note that tickets for the ever-popular Glastonbury festival, for example, are managed very effectively in that way. I am pleased to learn that the rugby world cup organisers have already decided to sell 500,000 of the 2.3 million tickets to members and clubs through the Rugby Football Union. That will ensure that tickets really do go into the hands of genuine fans.
The question of ticket re-sale is interesting and important. There are, of course, genuine reasons why someone might wish to re-sell their ticket—for example, if their team does not qualify for the finals. In such an instance, we would look to the event organisers to offer an official platform to return or re-sell the ticket. That would have the added benefit, which I believe was mentioned by my hon. Friend the Member for Shipley, of offering to fans a last minute opportunity to buy tickets at face value. That proved to be a successful way of ensuring that fans could safely buy and sell tickets for the 2012 Olympic and Paralympic games. I understand that the rugby world cup will also have an official re-sale mechanism in place—the shadow Minister asked about that a few moments ago.
We must recognise above all that there is a legitimate market. People are willing to pay above the market value of a ticket to attend an event. Others have genuine reasons to sell their tickets. I have listened carefully to everyone, but we do not want to criminalise fans, and we must not. Successive Governments and Select Committees have looked into the market in great detail and concluded that events organisers, promoters and ticket agents need to find solutions to ticketing and access to their events. Members will be aware that the Government made an exception in producing legislation for the London 2012 Olympic and Paralympic games because that was a requirement of the bid. The hon. Lady conceded that point.
Operation Podium has also been mentioned. The report on that operation clearly sets out that, even where legislation exists—such as for the re-sale of football tickets—it does not necessarily prevent the secondary market from operating. The hon. Lady raised the issue of the football tickets loophole. I will certainly raise that issue with the football authorities. I know that many season tickets take the form of electronic cards that are quite difficult to sell on for individual matches, which I think helps. I am happy to take that issue further. The Home Office is in charge of the legislation, so it would decide whether there is any risk to public order. I am sure that it will keep an eye on the issue and act accordingly.
Although further regulations might act as a deterrent for some, the regulatory burden imposed by stronger regulations is one that local authorities and police forces can ill afford to bear. The Government have made a commitment to reduce regulation and will only introduce new regulation as a last resort. We believe that the lightest practical regulatory burden is the right approach, particularly as powers exist to prevent criminal activity and unauthorised re-sale. Local authorities have powers to prevent unlicensed trading in the streets around venues under the Local Government (Miscellaneous Provisions) Act 1982, and fraudulent activity is already a criminal offence under the Fraud Act 2006. The police have had some successes in tackling such activity, but some of it occurs abroad where our powers of enforcement do not extend, unfortunately.
The key aim must be to reduce fraud by carefully educating consumers about the risks they take in using unofficial marketplaces. Removing the ability for consumers to buy tickets legitimately will ultimately drive demand to unauthorised websites, which are much harder to police. The Government have previously stated that unless there is proper evidence of market failure, there is no need for us to take action. We still believe that to be the case, but we will keep the position under careful review.
Earls Court Exhibition Centre
(10 years, 9 months ago)
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Mr Andy Slaughter (Hammersmith) (Lab)
It is a great pleasure to be here under your chairmanship, Mr Crausby, to tell what I hope is an uplifting story about one of the finest cultural institutions in this country, although I am afraid that it has a rather sad twist, which leads to my being here.
I am delighted to see the right hon. and learned Member for Kensington (Sir Malcolm Rifkind) in the Chamber. The better known part of the exhibition centre is in his constituency and I know that he has a strong interest in this matter. I am also delighted to see my hon. Friend the Member for Bishop Auckland (Helen Goodman), the shadow Culture Minister here, which reminds us that this is not just a local or a London issue, but a national issue as well. I look forward to the Minister’s response, because he is not only a great patron of the arts, but a local resident himself and no doubt a user of the exhibition centre. I hope that we will be joined by other hon. Members.
I acknowledge the people from the Earls Court Area Action Group, who are here in substantial numbers in the Public Gallery. They helped me prepare for this debate and, more importantly, they have been stalwart in the defence and promotion of the exhibition centre, since we learned that it was under threat. I thank them for their incredible efforts. I am wearing the badge today, but not the T-shirt. I hope that they will find this debate rewarding.
In providing a brief background to the importance of Earls Court, I could not do better, although I could try, than simply to read the introduction—the long description—on its own website. So I shall read from it for two minutes.
“Earls Court One opened for business in 1937 with the Chocolate and Confectionery Exhibition, and was joined in 1991 by Earls Court Two which still boasts Europe’s biggest unsupported roof span. Earls Court One and Two together have a total 60,000 square metres of event space and add to these facilities the purpose-built conference centre and the Museum Hall party space can boast a venue and a space for every event.
Over the years, the venues have welcomed visitors to shows such as the London Boat Show, the British Motor Show, the Ideal Home Show, the London Book Fair, the Great British Beer Festival and the Good Food Show”,
to which we might add the royal tournament.
“The halls have resounded to performances by world-famous artists such as Madonna, Pink Floyd, Iron Maiden, George Michael, Elton John, Kylie, Rod Stewart, Queen and the Rolling Stones.”
It has
“hosted the BRIT Awards, and sporting events such as boxing and wrestling contests, and some of the country’s largest companies have held conferences, training sessions and…staff parties in”
the venues.
“As the ultimate accolade, Earls Court was selected to be a London 2012 Olympic venue—chosen, according to Lord Coe…for its west London location and excellent transport links.
All of this puts Earls Court at the heart of the communities in which they operate, as the 1.5 million visitors, 15,000 exhibiting companies and 300 events that we cater for every year have a sizeable economic impact—in terms of jobs and expenditure.
A study carried out on behalf of Earls Court and sister venue Olympia London, showed that the two venues together supported £258m of expenditure in their boroughs and over £1.25bn in the London region, and accounted for…over 1,000 jobs in the boroughs and around 12,500 in London.”
The study...showed that one in two Londoners visits the venues every year.”
One could go on and mention the history, even before the centres were built.
Clive Efford (Eltham) (Lab)
I have listened to my hon. Friend listing the events. Does he think that it is tragic that we are going to lose this important venue, which was so central to our successful bid to win and host a successful Olympic games and Paralympics in 2012, and that losing it in this way will close off the opportunity for London to host such major sporting events in future?
Mr Slaughter
I thank my hon. Friend, the shadow Sports Minister, for his intervention and I am delighted that he has drawn attention to the centre’s importance as a sporting venue.
It is the largest exhibition space in central London and is clearly a versatile space. It has a swimming pool 60 metres by 30 metres available inside it. In its time it has hosted ski runs 100 feet long. It was used in both world wars.
During the construction of Earls Court Two, the new part of the exhibition centre in my constituency, residents put up with some years of pile-driving—I was first a councillor there in the late 1980s—but they knew that a venue was being provided that could rival any other in the United Kingdom and internationally. Its expansion, only 20 years ago, provided jobs for the local community and an unrivalled conference venue. It has hosted operas, rock concerts and the Olympics; it is a venue that cannot be replaced.
I say all that because we are here to praise Earls Court, but we are also here because others wish to bury it. That includes Earls Court’s current owners Capital & Counties, the London borough of Hammersmith and Fulham and Transport for London, which between them own the Earls Court opportunity area—one might call them partners in crime. They are abetted by the planning authorities, which conveniently are also the owners of those bodies in two out of three cases: the Mayor of London and the London borough of Hammersmith and Fulham. They are joined, I am afraid, by the royal borough of Kensington and Chelsea and the Secretary of State for Communities and Local Government in sounding the death knell for the exhibition centre by granting consent to the master plan for the development of the 80-acre site, which will lead not only to the demolition of the exhibition centre but the demolition of 760 high-quality, affordable homes on the West Kensington and Gibbs Green estates and the loss of 550 skilled jobs and a major manufacturing site for Transport for London at the Lillie Bridge depot. Each of those deserves a debate in its own right, and indeed I have previously raised them in the House. They are part of a much bigger plan to destroy Earls Court.
Helen Goodman (Bishop Auckland) (Lab)
My hon. Friend is making an excellent case. Does he agree that the potential destruction of the Earls Court site, which has an iconic 1930s art deco building and provides employment, would affect an important area of London that is a real place with a real community? If we take Earls Court with Smithfield, we see that all the city will be turned into expensive flats for people who do not live in them. Does he not think that will make London an intensely boring city?
Mr Slaughter
My hon. Friend makes several good points. She is right about Smithfield, although I note that Smithfield, which is an iconic site, albeit much smaller than Earls Court, has been granted a public inquiry, as has the Shell centre. In the case of Earls Court, the Secretary of State has cynically refused a public inquiry for 80 acres in the centre of London. My hon. Friend is also right that, in place of the rich employment, cultural and residential areas that we now see, we will have 8,000 faceless high-rise luxury flats sold off plan to foreign investors with, at most, 11% new affordable housing—a quarter of all housing—that will not be affordable to any of my constituents. Unfortunately, every day in west London is Christmas day for developers, but there is a lot of collateral damage.
In the remaining time, I will address the damage that will be caused and the real loss that will be occasioned if the exhibition centre goes. The proposal is part of a much bigger time scale. We have had five years of attempts at demolition and resistance from the community, but we have up to 25 years of further development on the site. That long time scale notwithstanding, it is appropriate that we should be talking about Earls Court today because we stand between two important events for the future of the exhibition centre. Last week, the developer submitted the first detailed application for that part of the site, which includes the potential replacement for the exhibition centre should Earls Court One and Two be demolished. That detailed application followed the granting of the planning application for the master plan for the whole area in November 2013.
With what would the developer and the local authorities replace the exhibition centre? The answer is luxury flats. The total floor space of the detailed designs submitted to replace the exhibition centre is 290,170 square metres. The amount for culture, education, health and community is 324 square metres, which works out at 0.1% of the site. There will not be one single affordable home, but there will be 1,324 luxury homes in massive apartment blocks. That is what we will have on the site instead of the Earls Court exhibition centre if the detailed planning application is granted. Meanwhile, there is a question of land ownership, and on Thursday of this week Transport for London’s finance and policy committee—there are serious questions on whether that is the appropriate body and whether it has the powers to do this, but no doubt it will attempt to do so—will recommend that the board approve TfL entering a joint venture arrangement with Capital & Counties Properties and/or a wholly owned undertaking of Capco, on which hangs other tales, with regard to the development of Earls Court One and Two, of which London Underground is the freeholder and Capco the long leaseholder, along with other properties owned by London Underground and Capco.
The matter has been debated at length in the London Assembly. On 9 October 2013, by 14 votes to 7, with the support of all parties other than the Conservative party, this resolution was passed:
“This Assembly notes that the Mayor of London has approved the Earls Court Opportunity Area plans, which will mean that…the Earls Court exhibition centres will be demolished in the absence of a full, independent economic impact assessment, and in the face of opposition from the event organisers industry”.
The resolution goes on to describe what happens to the West Kensington estate and the Lillie Bridge depot, and it states that:
“TfL should not enter a joint venture to develop these sites”.
That very clear instruction from the London Assembly was totally ignored by the Mayor. I am pleased to say that the same members of the Assembly have today written to TfL:
“We are writing to strongly urge you to defer your recommendation on entering the proposed joint venture with Capital and Counties…with regard to the redevelopment Earls Court and West Kensington Opportunity Area”.
The letter points out that the London Assembly transport committee has yet to discuss the matter, and indeed we have yet to hear the Government’s response to today’s debate. The letter states:
“There has not…been a full independent economic impact assessment on what the loss of the Earls Court Exhibition Centres will mean to the local and national economy. There are also concerns that TfL will not receive the best value from this deal until the value of the land has been properly and independently assessed.”
I do not want to run too much over my time, but I hope the Minister will bear with me if I go one or two minutes over because this is an opportunity to present all of the issues. I want to say two other things. First, in the view of those who understand, what will be the effect on the exhibitions industry? According to Karim Halwagi, the chief executive of the Association of Event Organisers:
“At a time of deep economic recession, the exhibitions industry is a shining example of national resilience and economic growth. The events economy expanded by over 18% from £9.3 billion to £11 billion between 2005-2010 and this uplift occurred during the worst economic recession in recent years.
We must ask why, in the midst of a property-busted recession, should loss of the halls…rob London of a much-needed cultural and business hub at a time when Britain needs more space devoted to cultural and commercial exhibitions.
This debate is set against a mounting concern in the local residential and business communities that will be directly affected by this contentious development. The failure by the two local authorities to conduct an Area Action Plan, which would have provided a wide-ranging strategic assessment of the proposed development, has left the immediate area vulnerable. The impact of this development is already being felt with businesses and amenities that support the vitality that residents enjoy, already closing.”
I pause to observe that the local businesses that have been sustained by the footfall to Earls Court over the years—mainly small businesses in Kensington and Chelsea and Hammersmith and Fulham, but also businesses in the wider area—are not only facing the loss of most of their trade due to the closure and demolition but are effectively being blackmailed and forced out by the developer, which is increasing their rents by up to 100%. Mr Halwagi also points out that ExCeL, which is considered the alternative to Earls Court, is 36th in the world rankings, whereas Paris has two venues in the top 10. We know that the national exhibition centre is possibly threatened because of the forced sale due to cuts to local government funding in Birmingham. Ironically, the NEC was supposed to provide an alternative to Earls Court all those years ago.
It is therefore not the case that we can do without Earls Court, which is unique by virtue of its space, history and central London location. Indeed, more exhibition centres are needed. There are only 52 weeks in the year, and in any one week we need as many exhibition centres as we have. The industry is expanding, and we are trying to compete on the world stage. It is the sheerest folly to have decided to destroy such centres without putting anything in their place.
Finally, because this debate is primarily about the culture of the area, I turn to a letter published in the Evening Standard on 28 November last year from 30 well-known names across popular and more elite culture, including Neil Tennant, Holly Johnson, Ozwald Boateng, Tracey Ullman, Duggie Fields and Baroness Deech. They said:
“The planned demolition of the iconic landmark Earls Court Exhibition Centres is nothing but cultural vandalism. The authentic Art Deco building represents the visual heart and hub of a community vital to the life-blood of the London economy. The venue attracts on an international scale, with a history of millions of visitors and crowd-drawing events on the world map…Trade shows, product fairs, artists, musicians and performers hold this venue in high esteem because it offers an unrivalled space in a central location. The substantial loss of income to local traders and to London as a whole is inexcusable. Nothing about the so-called Masterplan is beneficial for either the neighbouring community or for the long-term economy, only more shops, offices and apartments for the super-wealthy…London’s skyline is already at risk according to UNESCO and yet the shameless glut of luxury property building continues. It is a scandal that will scar the capital forever and a bubble that will have to burst in the near future, inevitably…A far more modest spend on the buildings infrastructure would guarantee the Earls Court heritage for the long term future, with a continuing enrichment both of London’s creative life as well as the national economy.”
I could not have put it better. That is what is at risk.
This should not be a party political issue, and certainly was not in the past. I am grateful for being sent a press release from Sir Horace Cutler, the Conservative leader of the Greater London council in 1979—gosh, that does seem a long time ago— announcing that £5 million was being provided to sustain and improve Earls Court. He said:
“It is tangible proof of the GLC’s total commitment to retaining and encouraging major exhibitions and conventions in London.
It is also evidence of our support for Earls Court in particular. The £5 million that the GLC is injecting will, together with money and expertise from the Earls Court management, ensure that operations go on here for some considerable time.”
I hope that that “considerable time” is not cut off in its prime by the demolition plans. As I said at the beginning of my remarks, I am delighted to see the right hon. and learned Member for Kensington here. His constituents have also written to me, so I know that he has said:
“I would like to see Earls Court being preserved.”
I know that he appreciates as much as I its value as a cultural, as well as economic, asset to the area. I look forward to working with him, with my hon. Friends and, I hope, with the Minister as well. I apologise again for taking slightly more than my allotted time, but I hope that the Minister will indicate whether the Government are prepared to show sympathy to retaining the Earls Court exhibition centre for all the reasons given—and if not, why not—and what do they see as the alternative to preserving and enhancing the cultural and economic life of this part of central London?
Sir Malcolm Rifkind (Kensington) (Con)
Given the time available, my speech will be brief, but I start by congratulating the hon. Member for Hammersmith (Mr Slaughter) on raising this subject. The Earls Court exhibition centre itself is primarily in the Kensington constituency, but the proposals form part of a much larger development, involving the demolition of large numbers of houses in the hon. Gentleman’s constituency, so I fully understand residents’ concern about all the changes. The hon. Gentleman has set out the position fairly.
This description has already been used, but Earls Court is an iconic building. It is always sad when such a building moves on. That has been part of the history of London, which has seen so many changes of this kind. Part of why London remains a vital and extraordinarily successful city is that it not only tries to preserve the best, but adapts to changing circumstances. The hon. Gentleman gave some of Earls Court’s history and I can add to it in one important respect. In 1935-36, when it was being built, it was reported that the
“project did not go exactly to plan; it ran over budget and was late in completion.”
Running over budget might not seem too strange, but the total cost rose to the extraordinary, astronomic sum of £1.5 million in 1937. When Earls Court Two was constructed in 1991, inflation meant that it cost some £100 million. We are therefore dealing with major projects. I am sad that Earls Court exhibition centre is likely to disappear. That is unfortunate, because it has made an important contribution in the way the hon. Gentleman describes.
With regard to my constituents, the massive development is going to last for not one year or five years, because it will be up to 20 years before the work is complete, and that has substantial implications for those who live in the immediate vicinity. I want to make particular reference to the residents of Eardley crescent and Philbeach gardens, the two streets that are closest to the centre. The volume of traffic, the demolition and all the various works associated with any major development are bad enough, but something of this scale will be of great significance. I visited the exhibition centre to see the developers’ presentation, and I must confess that I was impressed by their awareness of implications for residents in the immediate vicinity of the area, the steps that they are taking to try to ameliorate the difficulties, their willingness to have ongoing consultation with the residents of the adjoining streets, who will have to bear the brunt of the noise and dust, and various measures to ensure that much of the rubble that is removed will not be taken through residential areas. I am sure that the two local authorities—Kensington and Chelsea, and Hammersmith and Fulham—will be responsible for monitoring the work closely as it develops. Conditions can be imposed on developers, but that is not good enough. Even when good conditions exist, what can sometimes be more noticeable is a lack of willingness to respect them once the development has actually started. Local authorities have sometimes been less than perfect at imposing real conditions that can be enforced.
The project could take up to 20 years to be completed. It could represent an exciting new phase of London life but, whatever its success, the loss of the centre and the short and medium-term impact on people’s lives are matters of sadness. The hon. Gentleman has done a service in raising the issue, and I look forward to hearing the Minister’s response.
Mr David Crausby (in the Chair)
I point out to the Minister that we will move on to the next debate at 4.54 pm.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
I am grateful to be speaking under your chairmanship, Mr Crausby, and for the alert that I have only five minutes in which to make my points. I do not regret that, however, because it is extremely important that local residents—whether due to being here in the audience, or reading the record—are aware of the clear exposition of the hon. Member for Hammersmith (Mr Slaughter), as well as the equally clear speech made by my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind). My right hon. and learned Friend’s speech was rather shorter, given that this is not his debate, but both he and the hon. Gentleman expressed their views as local MPs.
This debate could range far and wide. I cannot be blind to the fact that there is a huge debate about the merits, or otherwise, of the entire development of the Earls Court area. However, while I put on record that I do not doubt the sincerity of the points made by the hon. Member for Hammersmith, or of the residents’ action group, which campaigns on the issue, the hon. Gentleman has used Earls Court as a good way to raise much wider issues in Parliament and to seek a response from the Government.
I will focus on the Earls Court exhibition centre, which is the focus of the debate. The hon. Gentleman gave a good history of the area. It is interesting to note that the site was first opened as an entertainment ground in 1887. Known as the Earls Court exhibition grounds, the site closed in 1914 and was commandeered for the war—none of those historical buildings survives. As was pointed out, the grounds were replaced by the exhibition centre in 1936 to 1937, with Earls Court Two added in 1991.
The key point lies in the fact that although people have talked about a magnificent art deco building, one of my most important responsibilities as heritage Minister is to decide whether to accept listing recommendations from English Heritage, the official body that advises the Government on such matters. It is worth pointing out, to provide clarity and context to the debate, that the application to list the building was first made in 2006, under the previous Government. As the hon. Gentleman pointed out, this is not a party political issue, and I respect and understand the fact that every heritage Minister not only takes their responsibilities seriously, but approaches any decision on a listing recommendation in a quasi-judicial capacity, if I may put it in such terms.
At the time, the clear advice from English Heritage was not to list Earls Court and, further, it provided a certificate of immunity from listing for a period. The issue came back in October 2010 and again, although some note was made of an exhibition centre that had survived, given that a lot of such centres were temporary, the view of English Heritage was:
“In terms of architectural merit…this is an extremely functional building, designed to maximise floor capacity on a difficult site, with limited embellishment...While of regional interest as one of the capital’s most prominent exhibition centres, in a national context Earl’s Court has insufficient architectural interest to warrant listing.”
As far as I am aware, no other opportunity to list Earls Court will come up again for a number of years—not until 2016 at the earliest—so there is no protection for the exhibition centre as a listed building.
The hon. Gentleman widened the debate to the merits or demerits of the development itself, which is the subject of a Terry Farrell master plan. Sir Terry Farrell was used by the previous Government to carry out master plans, and at the moment is undertaking a review of the architectural profession on my behalf. The hon. Gentleman is familiar with both sides of the argument, but the opposing points to those he made are: the development will provide 7,500 homes, 1,500 of which will be affordable; there will be 750 replacement homes for the residents of Gibbs Green and West Kensington estates; there will be 37 acres of new open space, with a five-acre public park; and there will be investment in the local tube stations of West Brompton and Earl’s Court. In terms of exhibition space—
Carbon Capture and Use
(10 years, 9 months ago)
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Laura Sandys (South Thanet) (Con)
I am honoured to be serving under your chairmanship today, Mr Crausby.
As the Minister knows, few Conservative Members have a greater commitment to building a sustainable, clean and low-carbon economy than I do—an economy that is truly resilient to price shocks and international crises, while making a serious contribution to the global reduction in carbon emissions. The Government have been tireless in building the policy framework around a low-carbon infrastructure that was so neglected for so many years. There are also a few who would like to see more energy from renewable sources, with little to no reliance on fossil fuels. Even I, however, live in the real world. I totally recognise that the pressures to use new and existing fossil fuels will be real and immediate for many economies, now and into the future.
As part of the armoury to combat climate change, it is essential that we promote technologies that can capture carbon and restrict emissions. I would very much prefer our default option to be low carbon at the point of generation, but carbon capture and storage offers greater flexibility in the energy source, and as a technology it will be important for coal and gas-rich economies.
I have to admit that I am not a techie, but—my word—CCS is an incredibly complex route for achieving carbon-free fuels. I sometimes accuse the energy sector of being over-engineered, but CCS is an engineer’s dream. Extraction, transportation and deep-sea storage—quite a feat to rid us of waste that in some minds should not have been emitted in the first place.
How did we get to that particular solution? Part of it perhaps is that carbon is seen as a waste product. Carbon has suffered from a bad image, in particular among the greenies. Carbon itself, however, is not bad; what is bad is its atmospheric build-up, the emitting of carbon dioxide. Carbon can be recycled, utilising rather than storing this so-called waste, not only reducing the cost of land fill—or sea fill—but ensuring that new products do not need to use new carbon. The issue is about resource reutilisation and remanufacturing what we now consider a waste product into something of value.
I am aware that the quantities of carbon that would need to be used to complete the whole carbon cycle through utilisation are huge. Few scientists can envisage full utilisation of CO2 from fossil fuel generation; at best, 10% might be feasible to reuse at this stage. There are scientists, however, who believe that we must start looking at utilisation alongside capture and storage. Perhaps utilisation should be the first call on carbon, not only the afterthought.
Carbon utilisation is not only a fringe area of interest. Sir David King, now the Foreign Secretary’s special representative for climate change, even highlights carbon dioxide conversion and use as one of the top 10 emerging technologies for 2013-14 on behalf of the World Economic Forum. The US is investing $1 billion in carbon capture and utilisation research; Germany is investing £118 million and the Chinese are making it a key part of their carbon management programme. What can be done with CO2 that would add to the greater good, rather than its merely being regarded as waste? Sir David King’s group states that the conversion of
“unwanted CO2 into saleable goods can potentially address both the economic and energetic shortcomings of conventional CCS strategies.”
A leading group of scientists from Imperial college, while warning that carbon capture and utilisation must work in conjunction with CCS, agree that there is potential for conversion into liquid fuel. They also agree that captured carbon need not simply displace conventional petrochemicals. Some say that, in the longer term, polymers could be used for sustainable packaging and construction materials, as a by-product of CO2. The universal key reservations, however, are scale and whether enough added value could be created by the end of the process. No one is saying that the technology will change the world of carbon overnight or that we should halt our focus on carbon capture and storage, but utilisation and reuse should be part of the mix. We want to get rid of landfill onshore, so why do we want to create a different sort of landfill offshore?
This debate aims to raise the profile of the utilisation of carbon, to rehabilitate carbon and offer it a second chance—or even a second life. I ask the Government to consider the following policy interventions. Although carbon capture and storage will be the main focus of decarbonising fossil fuels, to what extent have the Government focused on utilisation, particularly in light of Sir David King’s belief that CCU could be a game-changing technology?
The US and Germany are putting huge investment into research. What is the current spending on research on carbon capture and utilisation in this country, and should we be looking at it again as a priority? Did the carbon capture and storage cost-reduction taskforce examine the cost implications and potential benefits of utilisation, such as chemical and/or liquid fuels? If carbon capture and utilisation could be scaled up or work in conjunction with carbon capture and storage, would it attract contracts for difference? The big potential prize of carbon capture and utilisation is its transference into liquid fuels. As we know, one of our biggest challenges is decarbonising the transport sector. Could CCU play an important part in the decarbonisation of that sector, and help deal with such a vexatious and challenging issue?
Carbon capture and utilisation is an excellent example of the circular economy that keeps products within the productive sphere rather than leaving them as a waste product, and turns a malign substance into an economic asset. Although there is much that we still need to overcome, with economic and engineering challenges that are also shared by carbon capture and storage, CCU could become an integral part of our decarbonisation strategy and could deliver innovation. Perhaps some game changers might even emerge. It is early days for utilisation of carbon, but as we are still a while away from fully functioning carbon capture and storage, utilisation technologies have time to catch up. With a bit of Government help and encouragement, that could be achieved for all our benefit, both here and globally.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on not only securing but leading this debate on green issues and the climate agenda. As usual, she is absolutely bursting with provocative, interesting and thoughtful ideas. I am pleased to have the opportunity to discuss the important issues she has raised today, and join her in raising the profile of carbon capture and use—or, as she said, reutilisation, re-engineering and remanufacturing.
I agree with my hon. Friend that carbon capture and use is an interesting, albeit nascent, approach and one that we are already investigating in the coalition as part of our broader CCS programme. CCU refers to technologies that can capture and then convert waste CO2 into commercial products of value—for example, construction materials, biofuels, fertilisers, polymers or even the fizz in a Coca-Cola. CCU can be seen as a subset of and complement to carbon capture and storage, which is the focus of our current long-term approach. Many people, particularly in China and the US, also use CCU to refer to enhanced oil recovery, where waste CO2 is used to increase the amount of oil recovered from a field, although I do not think that is what my hon. Friend was getting at.
Let me first remind my hon. Friend about why we are pursuing CCS, including CCU. Coal and gas currently provide the majority of our electricity in the UK—still, I am afraid, nearly 70% in 2012. They also represent a key source of our carbon emissions. The energy supply sector remains the single largest source of UK emissions today. We must reduce those emissions if we are to meet our climate change ambitions. CCS and CCU can help us do that, and let us continue to enjoy the benefits of flexible fossil fuels without emissions. That is particularly important for global efforts to reduce emissions, allowing countries to make use of indigenous resources while they transition to a low-carbon model.
That approach can also help us meet our emissions targets in a cost-effective way. The Energy Technologies Institute estimates that successfully deploying CCS could cut the annual cost of meeting our carbon targets by £32 billion, or up to 1% of GDP, by 2050. CCU has the potential to add even further value to that. For those reasons the Government see CCS as an important part of our energy policy and a core element of our approach. We are taking forward a comprehensive package of measures, with significant funding, to build the first commercial scale CCS projects and establish conditions that encourage the development of a wider industry.
We are looking not just at storing the CO2 we capture, but at how it can be used positively—an area of particular interest to my hon. Friend. CCU covers a broad and diverse range of technologies. It offers the potential for a new revenue stream to contribute to the business case for carbon capture. It also presents a possible alternative to transportation and storage, particularly in more remote locations where it may not be economically sensible to invest in such infrastructure.
We envisage CCU having a flexible role in addressing the UK’s CO2 emissions. There is a wide range of possible approaches and some will be better suited to certain regions than others. For that reason, we are investing in research and development projects now. That will help us to assess the viability of CCU and what role it could play in the future, and to develop promising new technologies.
Let me provide some more detail on our support for CCU. As part of our four-year carbon capture and storage research, development and innovation programme, the coalition is investing over £10 million in new CCU projects. My hon. Friend highlighted three particular CCU technologies: polymers, photosynthetic bacteria and mineralisation. I am pleased to say that, with our partners, we are involved in innovative research in all those areas.
On polymers, we are supporting Econic Technologies, an innovative spin-out from Imperial college, to develop polymers using CO2 rather than hydrocarbons. With support from the Department of Energy and Climate Change, Econic has already tested its idea, using CO2 captured from the DECC-funded CCS pilot at Ferrybridge, a power station in Yorkshire.
On photosynthetic bacteria, we are providing funding to a Sheffield-based SME, Carbon Sequestration Ltd, which is working with Sheffield university to develop high-value chemicals from CO2 using novel algae and bioreactor technology. On mineralisation, the Technology Strategy Board has funded Carbon8, an award-winning SME that is developing a technology to mineralise CO2 from waste incineration. I understand it has also recently secured funding from Europe to work with the university of Greenwich on further research.
Mineralisation technologies are also a good example of some of the challenges CCU faces. Although Carbon8 is forging ahead, the Energy Technologies Institute invested £1 million looking at other mineralisation processes. Working with Caterpillar, the British Geological Survey and the university of Nottingham, it concluded that at this time certain technologies might not be economically viable. But, as we have seen, CCU covers a broad range of different technologies.
Our approach shows that, despite austerity and the huge cuts that we have had to make to public spending to correct the deficit, the coalition continues to prioritise science and innovation, knowing that research and development and such innovation are critical, right across the board, to our future prosperity. It is part of our long-term economic plan. The Engineering and Physical Sciences Research Council is supporting five British universities to undertake novel research into CCU, working with major companies such as Johnson Matthey. That research includes projects to develop catalysts for the conversion of CO2 into chemical feed stocks and fuels, and projects to use methane to convert CO2 into fuel.
CCU also forms an important element of the current techno-economic study into industrial CCS, which was commissioned by the coalition Government in October 2013. That was recommended by the CCS cost reduction taskforce, which the coalition set up. We expect a final report to be published this spring. Those work streams, led in the coalition by DECC and our partners, will help us to assess which CCU technologies are viable and what role they could play in the future. CCU covers a broad range of technologies and each needs to be evaluated individually.
To help to answer these questions and to encourage academics to share ideas, the Engineering and Physical Sciences Research Council has funded the CO2Chem network, which I understand could be the largest CCU network in the world, with more than 800 global members. My officials attended its meeting in October 2013 to hear the latest news and innovative ideas direct from the CCU community.
One of the biggest considerations for DECC is that CCU should permanently reduce emissions. That is another great example of the UK now leading innovation in a global way. We fully support the work of the CO2Chem network, which has made carbon lifecycle analysis of CCU technologies a key priority across its research areas. Through the international Carbon Sequestration Leadership Forum, of which the UK is a co-chair with Australia, we also engage with the carbon capture utilisation and storage action group.
Back in the UK, if some of the CCU projects prove to have significant potential, they will need a constant supply of CO2. This is where our wider work on CCS comes in: getting the first commercial-scale projects built and laying down the UK’s first CO2 transportation infrastructure. We also need to prove our CO2 stores in the North sea, which will be needed even if CCU takes off. As my hon. Friend noted, given the huge scale involved, few scientists can envisage full utilisation of CO2 from generation.
We have introduced a comprehensive package of measures to develop CCS in the UK, as set out in the coalition’s CCS road map. We recognise that that is most important for confidence in CCS and to kick-start wider deployment to get the first projects up and running in UK conditions. The coalition’s £1 billion competition is designed to help that to happen and we are making good progress.
In December 2013, the coalition awarded the White Rose CCS project a multi-million pound contract for a front-end engineering design study of its bid. The proposal is to build a new state-of-the-art 426 MW-equivalent clean coal power plant with full carbon capture and storage, bringing clean electricity to more than 630,000 homes and capturing approximately 2 million tonnes of CO2 per year. That will link into the planned development of a CO2 transportation and storage infrastructure—the Yorkshire CCS trunk line—with the capacity for additional projects in the area.
We are also looking beyond the first project, reflecting the coalition’s ambition in this area. We want a strong and successful CCS industry able to compete on cost with other low-carbon technologies in the 2020s, and to deploy up to 13 GW by 2030. Our policies are designed to help to bring CCS to the point where it can compete with other low-carbon technologies. Our electricity market reform programme will provide certainty and a route to market for CCS projects in the UK.
As my hon. Friend knows, the second Energy Bill of this Parliament received Royal Assent just before Christmas, and we are now working to develop the contracts for difference for CCS. My hon. Friend also asked about contracts for difference for CCU. We do not believe that utilisation is currently available on the scale needed for commercial electricity generation, but if utilisation became established as a viable technique for permanently avoiding the release of large quantities of CO2, there is no reason in principle why the clean electricity produced should not become eligible for contracts for difference. I hope that that is the answer she wanted.
We are focusing on how else we can strengthen the business case for CCS projects. We are trying to learn from overseas experience, and we have seen in north America how enhanced oil recovery using CO2 has played a crucial role in the development of CCS projects. Some people believe that this is a type of CCU and have adopted the abbreviation CCUS for carbon capture utilisation and storage.
Conditions here are different, but we are exploring with industry whether enhanced oil recovery might have an important role in UK CCS projects and in extending the supply of North sea oil. We have undertaken a detailed mapping exercise to estimate potential and held a workshop with industry to inform the coalition’s approach. We know that CCS could be important for industrial, energy-intensive sectors, and in December 2013 the Prime Minister announced agreement on the Tees Valley city deal, which includes funding for a feasibility study on industrial CCS.
On the inclusion of CCU in the IPCC best practices for greenhouse gases, I should say that it would be sensible if, when CCU activities lead to permanent storage of CO2, such activities were reflected in the IPCC in respect of how to report emissions.
In conclusion, I thank my hon. Friend for allowing us the opportunity to shine a light on a fascinating area of innovation, with the potential to improve the economics of carbon capture by putting a value on the CO2 captured. It may also present an innovative solution for smaller or more remote emitters, when it may not be economical to transport the CO2 to storage or to a trunk. We are providing multi-million pound funding to help to develop projects in this area and to assess its viability. That work complements the coalition’s wider ambitious programme on carbon capture and storage, which is maturing and beginning to deliver. We have awarded the first front-end engineering design, or FEED, contract to the White Rose project, and we hope to make a further announcement shortly on the competition.
Our £125 million research and development programme is keeping the UK at the forefront of CCS innovation and the global race for clean energy. Our electricity market reform programme has passed the significant milestone of Royal Assent for the Energy Bill. All told, we are set for a very exciting future.
Question put and agreed to.
Written Statement
(10 years, 9 months ago)
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National Fraud Authority
(10 years, 9 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The National Fraud Authority (NFA) annual report and accounts 2012-13 has been laid before the House today and copies will be available in the Vote Office. They will be published shortly on the NFA’s pages of the gov.uk website.
Grand Committee
(10 years, 9 months ago)
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The Deputy Chairman of Committees (Lord Geddes) (Con)
My Lords, as is usual on these occasions, I must advise the Grand Committee that if, as I think is likely, there is a Division in the House, the Committee will adjourn for 10 minutes.
Aviation: Regulatory Burden
(10 years, 9 months ago)
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Lord Rotherwick
To ask Her Majesty’s Government what steps they intend to take to reduce regulatory burdens relating to general aviation.
Lord Rotherwick (Con)
My Lords, I am most grateful to those noble Lords taking part in this debate today and for this timely opportunity to draw to your attention some important developments in UK general aviation. GA involves far more aircraft and perhaps twice as many flights per annum as does commercial air transport. These are small aircraft in the main but there are significant gains in terms of economic and social benefit. If we effectively encourage the GA community there could be far more gains. An appropriate regulatory environment is fundamental to this.
Last year, a particularly successful effort was made in the aviation red tape challenge, the RTC. For reinvigorating and driving through this endeavour, I offer my thanks and congratulations to the work of my right honourable friend the Minister without Portfolio, Grant Shapps, and the chief executive at the UK Civil Aviation Authority, Andrew Haines.
I am a private pilot and have fully declared my interests in aviation. The General Aviation Alliance, of which I am vice-president, is an important grouping of GA voluntary organisations. It represents, particularly, sports recreation aviation, which includes parachuting, hang-gliding, gliding, ballooning, plus sports and recreation flying in light and microlight aircraft and helicopters. The GA Alliance represents some 72,000 members, including the operators of around 60% of the UK’s registered aircraft fleet, and perhaps 70% of the total fleet.
The GA Alliance engages with the Government, the CAA and other bodies on regulatory matters concerning aviation. Last year there was a strong response to the aviation RTC, identifying many instances of unnecessary restrictions of gold-plated regulations. The CAA, as the UK’s national aviation regulator, had the task of processing this input. To give it credit, its response was generally strong and well considered. It consisted of a document entitled CAP 1123, describing a strategy for improvement. One key change is the setting up of a GA unit within the CAA, recognising the interests of that community and how different it is from the airline focus. I welcome this unit. The GA Alliance now looks forward to an early dialogue and consultation on the promised full reform programme for the sports and recreation sector.
The CAA’s response highlights two guiding principles within a more proportionate, risk-based regulatory regime. I welcome these principles and urge the CAA to hold firmly to them, although I wish to highlight the need to fully evaluate the consequences in consultations with stakeholders.
The CAA’s first principle is to deregulate wherever possible. This contains three aspirations which I strongly support. First, the removal of CAA oversight rule making in areas where the UK has no specific EU obligation. Secondly, identification of areas that could be removed from EASA oversight, primarily those that are nationally based and where previous self-regulation regimes had good safety records—for example, gliding and ballooning. Finally, the CAA wishes to take an evidence and risk-based approach proportionate to the risk appetite of participants. An informed consent concept will move the onus on to participants to demonstrate their awareness of the risks involved in GA activities. To be effective this initiative must reduce opportunities for speculative litigation. At present aviation associations are the targets of litigants seeking damages for unfortunate events that were outside their control.
The CAA’s second principle will maximise delegation of regulatory activities,
“to the extent that industry appetite and competence and resilience are the only constraints”.
The CAA would necessarily retain overall accountability but responsibility for delivery of regulation would be delegated to so-called qualified entities. These might be commercial or they could indeed be the existing GA associations. For example, the Light Aircraft Association—the LAA—of which I am a director, as is my noble friend Lord Goschen, holds an approval to regulate the airworthiness of several thousand aircraft on behalf of the CAA. Interestingly, the CAA charges this association for the privilege of carrying out this work.
I want to see delegation possibilities considered across the entire sports and recreation sector, ranging from CAA oversight through delegated accountability to full delegation where a competent body is available. The GAA’s member associations are mature national bodies with effective governance, run on behalf of their members. They are not commercial organisations and will be concerned by the entry of commercial qualified entries into their sector. Such competitive positioning would inevitably seek to cherry pick the best business opportunities while leaving the less lucrative activities to the associations. This would not promote the social or economic benefits that I referred to. In a worst case scenario, capable voluntary organisations might be damaged to the point of liquidation.
I have expanded on the two principles at some length but CAP 1123 also identifies other general areas raised by the RTC. I found the general tone of the CAA and the Department for Transport helpful and flexible, but I also noted how responses sometimes only reiterate the current approach. In two key areas, further change is needed. First, CAA fees and charges are annually brought before its influential Finance Advisory Committee, which has long been dominated by commercial interests. CAP 1123 merely reiterates this status quo without an apparent intent to promote fair stakeholder representation. Better pre-discussion with GA and a wider consideration of CAA costs and their proportionate allocation are essential.
Secondly, I must mention airspace, the allocation of which is a key CAA function. The ever expanding UK controlled airspace is a major concern because it increasingly excludes light aircraft from large areas of our country. Sadly, there is not the time today to discuss the details of this complex issue.
Finally, I should mention implementation. The CAA’s response is strong on announcement and intent but, for real success, it also needs outstanding implementation, including consultation with stakeholders. Currently there is a mechanism—the challenge panel—involving GA experts selected to help the Department for Transport and the CAA to move forward. Timescales for this process are short, and I am concerned that it may run out of time before enough has been achieved.
All parties need clarity on the likely “steady state” shape of regulation in 12 to 18 months’ time. This is essential, as much work will be required from organisations using volunteer resources. Partnership mechanisms must now be established to achieve effective and sustainable change. A dynamic and expanding GA sector can nurture new opportunities and jobs across the country, from a reinvigorated flight training industry, through aircraft manufacturing, to the many professions and industries needed to support thousands of light aircraft.
Overregulation has been one of the main problems faced by general aviation in the UK. It is good that this is now being vigorously addressed. This is a once-in-a-lifetime opportunity; we cannot allow it to fail.
The Earl of Liverpool (Con)
My Lords, I thank my noble friend Lord Rotherwick for giving us the opportunity to discuss this important red tape challenge and the reduction in regulatory burdens on general aviation. From listening to his speech, I can say that it is quite obvious that he knows a great deal more than I do about all the ins and outs of the regulatory burdens.
I have an interest to declare in that I am a private pilot, both fixed wing and rotary. I got the bug after my first lesson on 4 June 1966, and I have enjoyed every moment in the air since. I am also a member of the Air Squadron. There is an old saying in aviation that there are old pilots and bold pilots, but not many old, bold pilots, so I consider myself very lucky and fortunate to be able to take part in this debate today. My noble friend Lord Rotherwick will certainly remember that in the late 1990s we were both part of an Air Squadron wing which took about 12 light aircraft across Europe to the north-east border of Pakistan and back again. Flying over the Himalayas and through the mountain passes was a wonderful experience, not without a few hairy moments, but we all got back safely. The only reason I dare to mention this to your Lordships is that I was flying a Piper Aztec called “Red Tape”. It is one of life’s strange, happy coincidences that I can be here to congratulate the Government and the CAA on their commitment to reduce red tape in civil aviation.
General aviation is worth about £1.4 billion to the UK economy and supports around 50,000 jobs. As a result of the red tape challenge which the Government have initiated, a number of areas have been identified where existing regulations are unduly onerous, as my noble friend has stated. This problem is being addressed with vigour and commitment. I shall quote from a press release, which is slightly old now as it is from 6 November 2013. The chair of the CAA Dame Deirdre Hutton said:
“We are absolutely committed to improving the way we regulate GA. We have made a start, for instance deregulating in some areas and delegating responsibilities in others. But there is much more we can do. The new, dedicated GA Unit is a formal recognition that GA needs a different and less onerous regulatory regime to commercial air transport. It will ensure we understand better the impact of our regulation on the sector, that we are as transparent and efficient as possible in how we go about it, and that we identify opportunities to reduce burdens and costs wherever we can”.
The general aviation sector can ask for no more than that, so we look forward to the unit coming into being in, I think, April. All I can say is that as a pilot I have never encountered an undue amount of red tape in aviation, but I have only been at the controls of aircraft and have not actually had to run a business involved in that sector.
I shall close with one thought. Flying has its own challenges. To deregulate too much would certainly be a mistake. I am really thinking in terms of pilots who have medicals. I am now at the age where I have to have a medical every year. The regulation that I go through and the tests that I am required to undergo, including an ECG every year, are the kinds of things that should not be foregone in the stampede to reduce red tape. Therefore, I welcome the moves that are taking place and we look forward to the general aviation unit being set up this year.
Lord Bradshaw (LD)
My Lords, I thank the noble Lord, Lord Rotherwick, for having introduced this subject. I am not involved in general aviation but I welcome the Government’s commitment to the general aviation sector and the positive steps that have been taken, particularly with the help of my old friend and colleague, Andrew Haines, with whom I worked for many years. He was a career railwayman. I do not know whether that has any implications but he certainly seems to have started off very well.
One thing that I should like to take up is whether the panel is proposing to meet with the Home Office, in particular, to discuss the issues that the general aviation sector has experienced with the UK Border Force. I have some experience of dealing with the UK Border Force in international affairs. Quite frankly, it is very, very difficult to deal with. It is very unyielding and very inflexible, and I should be interested to know how any progress is being made. General aviation shares the property of being the route by which undesirable people or undesirable subjects can get into this country. In particular, I should like to hear whether there is any progress at all in that area.
The noble Earl, Lord Liverpool, covered my other question when he mentioned the need for well qualified people to fly planes, and he assured us that he himself is indeed well qualified. I look forward to the recommendations that are likely to be made by the panel. I hope that they will be adopted and will pass whatever legislative rules they have to pass in the not-too-distant future.
Viscount Goschen (Con)
My Lords, I, too, congratulate my noble friend Lord Rotherwick on bringing forward this short debate today. There cannot be anyone better qualified in Parliament to discuss the concerns of general aviation. It may not be broadly known that not only is my noble friend a pilot, a board member of the LAA and a vice-president of the General Aviation Alliance but he also builds aeroplanes with his bare hands and then flies them to the ends of the earth. This is adventurous stuff, and we are very lucky to have his wise counsel and guidance this afternoon.
I make a short declaration. I have a UK private pilot’s licence and I operate a vintage aircraft that comes under the Light Aircraft Association permit to fly regime. About a hundred years ago, I had some responsibility for aviation policy in the UK, and I am very pleased to see that considerable progress has been made on the issues that we were grappling with in the mid-1990s.
It is a privilege to be able to fly in the UK and internationally. We talk of the privileges of our licence, and I think that the general aviation community is always aware of that fact. It is a very law-abiding community. The initiative that we have been talking about this afternoon is really about aligning regulation with the safety-critical issues that the GA faces and making sure that there is a proper match.
The CAA has been criticised in the past by the GA community for taking perhaps a too heavy-handed and too costly approach to issues such as airfield regulation. However, the initiative that we are discussing today represents a profound change in approach. While we recognise that the detail of general aviation is of interest to some noble Lords, a real success story in terms of a deregulation initiative—a partnership between the industry, participants, the Department for Transport, the CAA and other areas of government—is really to be highly commended.
All those who have participated and who take an interest in this sphere will feel that real progress has been made, and this is a good news story. We can always guarantee that it will get very little promotion and broader discussion because it is a good news story rather than a bad news story. But the Government say that they are committed to deregulation—Governments have said that for a long time—and will actually bring forward sensible, carefully and clearly thought through proposals that demonstrate that, and they are to be commended. Mr Haines at the CAA is to be commended, too, and the LAA itself, which is a major player in this environment, also needs to take some of the credit. There are lessons to be learnt more broadly, way outside of aviation, for areas where the burden of regulation can be carefully considered and stepped back from in certain areas where there is no loss to safety.
It is well worth reading the documents produced by the Government and the CAA. I shall read a short quote from the foreword to the government document, which says:
“Regulation often appears too prescriptive, impractical and inappropriate for the general aviation sector … Safety regulation should therefore impose the minimum necessary burden and empower individuals to make responsible decisions … The package of measures we have agreed will overhaul the GA regulatory framework, moving it from a prescriptive, bureaucratic regime to a light-touch, proportionate system”.
That is a major change, and I believe that it represents major progress.
The CAA’s initiative of bringing forward its own specialist GA unit is an important one. I was drawn to one sentence that features in Mr Haines’s introduction to the CAA’s document. At the end of the third paragraph, he says that it wants to,
“help create a vibrant and dynamic GA sector in the UK”,
and that it will,
“work with other Government Departments to identify the potential for funding to develop new technology”.
I believe that that represents a significant change as well, in that it takes the CAA’s declared remit more into the promotion of general aviation than the mere observing and regulating of it.
There is also a commitment in the CAA’s document to use the legal process as a “last resort”. I welcome that approach as well. It must be sensible in a detailed technical environment such as this to use regulation when it is really required but in other cases pursue the guiding principles that have been established. Principle one is to deregulate wherever possible. This means that there should be removal of CAA oversight where not required, and that we should,
“identify what within the GA sector might be removed from EASA oversight”—
that is, European oversight—as well as easing,
“the definition of ‘commercial activity’”.
The second guiding principle is to maximise delegations, which have worked very well in the past with the LAA and the BMAA, and I believe will continue to do so.
In the final analysis, this is an ongoing process. It is not a one-off deregulation report saying, “Let’s get on with it”. The Government have set up the CAA and its own panel to prompt it to continue and keep the pressure on, examining everything that comes forward. There is a significant European aspect to this with EASA; it is a highly complex field. We do not have time to talk about it today.
I conclude with genuine congratulations to all those who have been involved. I hope that we can learn broader lessons for regulation in other spheres.
Lord Berkeley (Lab)
My Lords, I am very grateful to noble Lords for allowing me to speak briefly in the gap. I am not a pilot, but I was interested to hear three pilots speaking about their experiences. I remember when the noble Viscount was a Minister for air and shipping. He reported to the House one day that he had flown over a tanker that had hit a rock in Milford Haven and had saved the day by finding a Chinese takeaway cook who could translate between English, which everyone was using, and Chinese for the tug outside. I did not know that he was flying his own plane. That is terribly impressive.
My interest in this is that I go to the Isles of Scilly quite often. In the winter, the only transport is a small plane that usually goes from St Mary’s to a grass runway at Land’s End, except when it is waterlogged, which it has been for the past month. Costs are high—£70 to £80 for a single fare—so it difficult for people who live on the islands, and I am grateful to the Minister for agreeing to have a meeting later this week with some representatives where I hope we can discuss this. I have tabled a few Questions on this. I was very pleased to hear that Bristows will do the medevac service—evacuation to the mainland of people who need urgent medical treatment—after the RAF hands over emergency rescue. That is really good news, and I am grateful for that.
Less good is the problem of taking blood samples to the mainland. I asked a Question more than a year ago about whether the Government would facilitate granting a licence for Skybus to carry these samples to the mainland for testing. The answer came back that they would when an application was received, which was fair. A year later, it has still not happened, so I tabled a Question asking whether an application had been received and, if so, what was the answer. I am not looking for an answer from the Minister today. My question is more fundamental: why do you need a licence at all to carry blood samples between the Isles of Scilly and the mainland, or anywhere else, for testing in a hospital? Why does doing so need a licence? They are not going to blow up or anything. You can put them in a sealed bag and they would be quite happy, but there we are.
Finally, I went to the Scillies just before the new year; I had a bit of a difficult journey, so I did a blog on it which produced quite a few responses, including one from the chairman of the Isles of Scilly Steamship Company that runs the service inviting me to meet him, which I did. We did not necessarily agree on customer service, but what he told me about costs was very interesting. He said that a third of the cost of the short, very frequent service, which does not make a big profit, went towards regulation, a third fuel and a third airport charges. That probably justifies the charges, but do they have to be so high? A third of the cost being regulatory seems an awful lot. As for airport charges, Newquay is renowned for having high charges because it likes to call itself an international airport, so it has to cope with the odd international flight with enormous numbers of staff, I believe, for security.
I hope that the Government and the CAA can look at the total charges because if that is correct—and I have no reason to suppose that it is not—an £80 single fare to get home to the Scillies if you live there or to go to the hospital or visit friends seems a bit high, and that is the only way you can get there in winter. If the regulatory cost could come down a little, it would be a great help.
Lord Davies of Oldham (Lab)
My Lords, I am grateful to all noble Lords who have spoken in this debate and to the noble Lord, Lord Rotherwick, for introducing it in his usual considered terms. He indicated the scale of general aviation and the number of flights; it is an important part of the sporting and recreational interests of the nation and a crucial part of the aviation industry as a whole.
The noble Lord mentioned the Minister without Portfolio, Grant Shapps. I feel that his ministerial position should be extended slightly and I will describe the necessity for that in my remaining remarks. The noble Lord told us how much the right honourable gentleman had backed the changes to the legislation that were being effected and how, not surprisingly as a Minister, he was very much in favour of them. He does, however, fly from a private airfield near to where I live and where he is in some dispute with the local authority about prospective planning permission with regard to buildings on the airfield. That issue is unresolved—it is due to be resolved in due course—and I do not mind the Minister commenting on it as long as he declares an interest. I wish he had declared an interest that he is a flier from a private airfield. It matters even more when I can attest to the fact that it is his aircraft that causes me to miss my putt on the sixth hole of the local golf course on some weekend mornings. So Grant Shapps and I have a little in common on these issues.
The noble Lord, Lord Rotherwick, made the case for the reduction of regulations to the minimum, but the minimum consistent with safety. The noble Earl, Lord Liverpool, mentioned medical tests. It is obviously a great danger if people fly when they are not fit enough to do so. It is dangerous enough if they drive cars on the highway when unfit to do so, but when flying an aircraft it is infinitely more serious. I hope the Minister can reassure us that all the necessary medical requirements are met, particularly against the background where medicine changes in its perspective. I remember being lobbied a few years by a group which was seeking to bring to the Government’s attention the illness of apnoea and the problem of people falling asleep while in control of a motor vehicle—not through excessive activity or a shortage of sleep the night before, but through the development of an illness. That has to be taken seriously in regard to motoring and I hope it is taken equally seriously in regard to aircraft.
There has in recent weeks been great concern about people who, even though they are qualified to drive and feel they are inherently safe drivers, have what is vulgarly called “the jumps”, where they suddenly realise they had lost a moment of concentration and then recovered it. We do not know how many accidents are caused by such a phenomenon, but certainly there are enough for us to be acutely aware of it. We must make sure that we keep a close watch on the development of illnesses of this kind and on the general level of fitness to drive—and whatever applies to fitness to drive must surely apply to fitness to fly.
The point I particularly wanted to pick up on was touched upon by the noble Lord, Lord Bradshaw, but almost in passing. It concerns the relationship between civil aviation and the Home Office and the control of our borders and space. I am much more concerned than the noble Lord, Lord Bradshaw, who seemed to indicate that the Home Office and the border agency were not too oppressive in their dealings with such flights. Far from being oppressive, from this side of the House it looks as though the border agency has no idea of what is going on with regard to flights. As we all know, there is a large number of aircraft in this sector—the noble Lord, Lord Rotherwick, referred to this—and a plethora of airfields, at least 520, where aircraft can be landed, but the border agency tells us that it has no idea what is happening with regard to these airports. What is going on? If there is concern about the security of our borders—and my goodness me, the Government have drawn attention to this in recent months with increased anxiety—to have a sector which the border agency says is completely unchecked and in which there is no question of it knowing the number of flights or passengers, who lands and who lands where, is an extraordinary position as far as our overall security is concerned when we are all conscious of the fact that we need to protect ourselves effectively.
It may be said that these regulations have nothing to do with it. If it is not these regulations, will the Minister explain which regulations are being used to tighten up this position? There could certainly be anxieties about the way in which general aviation flights contribute to the problem. We expect the Government to know about the nature of these flights, who is on them and who comes into the country. Otherwise all the checks which are continually drummed up for our ports, at huge inconvenience to passengers going through security who have to wait for hours on occasion, can be completely disregarded by anybody who can get in a private aircraft and arrive at a private airfield. This is something that needs attention. Although the Minister may be sorely tempted to say that regulations do not address the security issue, I do not think we can have a debate about general aviation without her addressing this position.
The Minister of State, Department for Transport (Baroness Kramer) (LD)
My Lords, I am delighted to address this Question for Short Debate which my noble friend Lord Rotherwick has introduced on reducing the regulatory burdens on general aviation. I am grateful to the noble Lord for securing the opportunity for this debate to take place. I am aware of his interest and great expertise which far exceeds mine, so I am delighted that he and other noble Lords with experience have spoken in this debate. This is a useful opportunity to update noble Lords on the work which is currently taking place and to address some of the key issues that have been raised today.
Noble Lords may be surprised by the number of activities covered by the general aviation industry, including maintenance and pilot training, gliding and ballooning, as well as the operation of small aircraft for leisure or business purposes. The sector covers a wide spectrum of aircraft types and activities, ranging from paragliders and microlights to business jets. There are around 20,000 civilian aircraft registered in the UK, of which 95% are engaged in what can be described as general aviation activities.
The value of the GA sector and its contribution to the UK economy should not be underestimated. The 2006 strategic review of general aviation, carried out by the CAA, estimated the UK’s GA industry to be worth approximately £1.4 billion in 2005. This highlights the important economic contribution which is made by the GA sector. The sector currently supports around 50,000 jobs in the UK and has a strong track record of providing high value-added employment opportunities across a range of areas and supply chains.
I am sure that noble Lords are aware of the Government’s deregulatory red tape challenge because it has been so well addressed in this debate. In 2012, all existing aviation regulations were scrutinised, but at the start of 2013, the Minister without Portfolio, Grant Shapps, proposed that a further red tape challenge should be undertaken, specific to GA issues. I am sure that Grant Shapps and Andrew Haines will appreciate the warm comments by the noble Lord, Lord Rotherwick, on what they have achieved, which were echoed by the noble Earl, Lord Liverpool, the noble Viscount, Lord Goschen, and the noble Lord, Lord Bradshaw.
In this context, I assure the noble Earl, Lord Liverpool, and the noble Viscount, Lord Goschen, who raised the issue, that the red tape challenge is being handled in a most judicious way. The concern that they raised about medicals is an area that will certainly be reviewed by the GA panel to see whether there are more proportionate ways of delivering the process of providing and maintaining licences. However, it will be done only with an understanding of the importance of the robustness and safety required. When the panel reports, Ministers will consider very carefully any recommendations in this area and will discuss them in great detail with the CAA.
The GA red tape challenge received nearly 500 responses —three times as many as any other theme to date. The responses identified many areas where improvements are needed and highlighted the need for a change in the approach to regulating GA. In response to this, a substantial programme of reform has recently been launched with the aim of helping to support a vibrant UK GA sector.
The Civil Aviation Authority, the independent regulator, has recognised the need to create a culture change in its regulation of the GA sector. It has incorporated the findings of the GA red tape challenge into its own internal review to produce a comprehensive GA reform programme. This will support a programme of deregulation and self-regulation for the GA sector, remove complexity, look to deregulate and delegate where possible and, where not, consider how to allow the GA sector to take on more responsibility and accountability for its own safety where possible and appropriate.
As part of that programme, the CAA announced the setting up of the specialist unit—which, again, has been widely praised in this debate—dedicated to GA issues. I can confirm that it will indeed be operational from April this year. This recognises that the GA requires different, less onerous regulation compared with that for commercial air transport and it demonstrates the CAA’s commitment to addressing GA issues. It will provide effective and proportionate regulation which supports and encourages the growth of the GA sector. As others have mentioned, Andrew Haines, the chief executive of the CAA, and his team are very committed to making the unit a success.
I assure noble Lords that the CAA will work closely with the GA community as regulations are developed, providing opportunities for the sector to challenge those regulations when it believes that they are unduly burdensome. For example—to take up a point that has been raised—there will be far greater scrutiny of the CAA’s fees and charges in order to provide greater transparency. On the issue of onerous fees, the CAA is committed to reducing the charges that it places on the industry, and it has agreed to work to reduce fees and charges by 3% in real terms by 2015-16. It must also report on issues such as efficiency.
The noble Lord raised a number of specific issues, most of which have already been explored by the CAA. They include informed consent, which would allow members of the public to pay for flights which are not designed to meet the same requirements and standards as a commercial carrier. However, it must be stressed that the CAA will consider this alongside other initiatives intended to bring proportionate oversight to address the safety risks associated with aviation activities.
The noble Lord, Lord Rotherwick, is right: the CAA is looking at options for delegating certain functions to industry associations, and he named a number of them. They are well placed to deliver regulatory oversight in a manner proportionate to the needs of the sector. However—and he may be slightly disappointed when I say this—the CAA will seek to introduce market access opportunities for suitable qualified entities because it believes that in some areas where there are no existing arrangements, this will help to provide those new and required opportunities.
The CAA welcomes the GA sector’s involvement in agreeing its charging schemes, as I mentioned earlier, and it recognises some of the concerns expressed about the fees and charges. As a result, it is proposing to establish a GA sub-group of its Finance Advisory Committee specifically to take on the issue of fees to ensure that they are proportionate as well as transparent.
Another specific area of concern is the availability of airspace for GA operators. The community often takes the view that this has been reduced as controlled airspace has grown to favour commercial aircraft. Actually, the opposite may often be the reality. For example, between 2010 and March 2012 the total volume of controlled airspace within the UK was reduced by 214 cubic nautical miles. The CAA is aware of these concerns and ensures that its airspace change process is public and that all decisions made are fully explained. A principal benefit envisaged within the future airspace strategy is the potential to capitalise on the improved performance characteristics of modern commercial aircraft, which will allow other airspace users, including GA, to benefit from the airspace volumes released beneath them.
The GA challenge panel is an important element. It is independent and includes representatives from the GA industry. The panel is providing a “critical friend” function to the CAA and will work with the regulator to challenge its GA reform programme, challenging the CAA to be consistent, transparent and innovative in its approach to GA regulation and supporting the CAA as it strives to deliver genuine change in its approach to GA regulation.
The panel is considering projects which have the potential to promote growth within GA and opportunities for further reducing the regulatory burdens on the sector. It is also considering options for simplifying existing European safety requirements, an issue discussed in the debate, and assessing the progress being made to bring about a culture change within the CAA. The challenge panel will report directly to Ministers Grant Shapps, Robert Goodwill and Mark Harper in the Home Office in April, with an interim report due before then in late January. The panel’s existence will be short term, but the role it is performing and the report it will produce will provide a platform for improving the regulation of the GA sector.
An increasing number of the regulations which impact on GA ultimately derive from the European Aviation Safety Agency. The Government and the CAA have been proactive in lobbying for reform and fully support the EASA road map for general aviation, which came about as a result of the GA sector sharing its concerns about the proportionality of its rules. The EASA has recognised that much of its regulation has been overly burdensome and the road map proposes a series of reforms and changes in approach.
We welcome the fact that the European Commission has accepted the UK's recommendation that an evaluation of the application of commercial aviation safety requirements to general aviation should be included in the rolling regulatory fitness and performance programme. We will continue to work with the European Commission to ensure that this evaluation is both rigorous and evidence-based. Recent announcements such as securing the EU’s agreement to allow the UK to continue issuing the instrument meteorological conditions rating for pilots until April 2019 are encouraging and demonstrate EASA’s willingness to reconsider its regulatory policy in relation to GA. The Government also welcome the CAA’s commitment to eliminating gold-plating of EU regulations and Ministers are due to meet with the EASA next week.
On the serious issues concerning the border agency, I say to the noble Lords, Lord Davies of Oldham and Lord Bradshaw, that the GA challenge panel is meeting with the border agency, hopefully next week. I understand that the issues have been raised and that consideration will be given to whether they are onerous or appropriate. There is a mechanism for taking the issues forward.
The noble Lord, Lord Davies, raised the question of airfield planning. Planning issues are always contentious but, luckily, they tend to be local issues.
I shall be meeting the noble Lord, Lord Bradshaw, on the Isles of Scilly and I thank him for giving me a heads up on many of the issues he will wish to address in that meeting. However, there is not time for me to deal with them now.
The noble Viscount, Lord Goschen, asked about innovation. There is innovation grant funding for GA and the DfT is currently working with the GA challenge panel to identify suitable projects.
There is movement on all fronts. I thank all noble Lords who are present. My time is up. I am not sure that I will be able to take the noble Lord’s question.
Lord Berkeley
Could I remind the Minister that I am Lord Berkeley, not Lord Bradshaw? I think she got us muddled up.
Baroness Kramer
I consider it an insult to neither noble Lord that I might have confused them for a brief moment. I certainly know who they are, and both are remarkable in the area of transport.
Wales: Silk Report
(10 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Bourne of Aberystwyth
To ask Her Majesty’s Government what assessment they have made of the opportunities for Wales resulting from the recommendations of Part One of the Silk Report.
The Deputy Chairman of Committees (Lord Geddes) (Con)
The Grand Committee is again adjourned for 10 minutes.
Lord Bourne of Aberystwyth (Con)
My Lords, in opening this debate, I declare my interest as a member of the Silk commission, an unremunerated commissioner, as all the commissioners are. The work on Part 2 is soon to end. It is hard to conceive of life without the Silk commission; like taxes and motorway cones, it seems that it has always been there.
I am sure that your Lordships will agree that it is fitting that I say a few words about the late, much-loved and much-lamented Lord Roberts of Conwy. This is the first Welsh debate in your Lordships’ House since his very sad death. For more than 30 years, Wyn gave massive public service to our country—to the United Kingdom and to Wales. He fought hard and successfully for Welsh interests, and he is missed here as he is, of course, massively, in Wales. That is a considerable epitaph. On a personal note, I shall miss his wise advice, encouragement and assistance as well as his impish humour and happy demeanour. His life was a fulfilled one. Our thoughts are very much with Enid and his family.
As we debate the opportunities afforded to Wales by Part 1 of the Silk report and the Government’s response to it in the draft Wales Bill, which encompasses key aspects of the Government’s response as well as other matters, it is being debated in another place. I am pleased at that because I believe that it is important that the current momentum is not lost. It was rightly said in Shakespeare’s “Julius Caesar”:
“There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves,
Or lose our ventures”.
I believe that that sums up the position that we are in at the moment.
I mentioned at the outside that the Silk commission, which has been on the Silk road, so to speak, for more than two years, under the able chairmanship of Paul Silk, is considering Part 2. I do not propose to say anything about that because it would be premature, but it is now 14 months since we presented the report on Part 1. Each of the four main political parties in Wales—that is, the Welsh Conservatives, Welsh Labour, the Welsh Liberal Democrats and Plaid Cymru—has had representatives on the commission throughout its work and it also has independent members. Agreement on the Part 1 report was unanimous, and I am sure that in all honesty there was no real difficulty in achieving that unanimity. It is important that we keep that very much in mind as we go forward.
I turn to our recommendations. Consistent with the recommendations of Part 1, the Government have come down in favour of devolving landfill tax and stamp duty land tax to Wales. Admittedly, they are not massive taxes in terms of revenue, but it was very much consistent with what we recommended. Those taxes, particular the latter, could be used to make it more attractive to business to be formed in Wales. The Wales-England border, unlike the Scotland-England border, is very porous, and the opportunity to attract business and jobs into Wales should be a priority. Stamp duty land tax could be used to attract business as well as business men and women into Wales, which would provide a much-needed boost for the Welsh economy, which has been slipping in relative terms against England. It is key to raising economic standards in Wales as well as Welsh public services because the revenue that is generated could help with those services as well. I do not believe that there is a serious politician in Wales across all the parties who does not believe that expanding the private sector should be a priority; most would probably agree that it should be the number one priority because it generates the wealth that is needed to improve public services.
We also recommended the transfer of power over the aggregates levy and some limited power over long-haul flights in relation to air passenger duty. In that case, the Government have not taken heed of our recommendations, although we recognised in our report that there were issues of competition law and state aid and that the position in Europe might cause difficulty. Are these matters now under constant review so that if the position in Europe demonstrates that they could be devolved to Wales without any legal difficulty, they would accordingly be devolved?
In addition, the Government have recognised the case for devolution of 25% of the income tax system so that, even if there is no change in the rate from Westminster, the tax rate would have to be set in Wales, consistent with the tax rate from Westminster. Once again, that tax system could and should be used to encourage business and create wealth and jobs in Wales, and funding flowing from that would once again help our public services.
The commission recommended that income tax rates should be capable of variation independently, just as Gerry Holtham recommended in a report to the Welsh Government. We thought that that was the right way forward and would mean that it would be possible to create better economic conditions in Wales because of the possibility of varying the rates independently. That has not happened, and so far I have had no satisfactory explanation of why it has been rejected. There is, of course, a lock-step in Scotland and it may be that the other side of the Scottish referendum—where I hope for a no vote, which I am sure most, but perhaps not quite all, of us fervently hope for and passionately want—that will be revised. Perhaps the Minister will respond on this.
In their response to Silk Part 1, the Government acknowledged borrowing powers for Wales. That is extremely important but, apart from the limited power that has already been conceded in advance of any progress on income tax and other taxation powers, some power has now been given for the much-needed M4 relief road to improve the M4. I am sure that most people here recognise that as a priority. I tuned into Radio Wales this morning to find, as one does nearly every morning, that there was a hold-up in the Brynglas tunnel, which is a priority. However, there are other things that need doing, and they can be done only with the extended borrowing powers consequent upon having income tax as well as the other smaller taxes so that money can be invested in improvements in infrastructure, whether rail or road, in north, mid and south Wales and in things such as dualling the A40, which is certainly much needed.
Some of that borrowing can be consequent on the smaller taxes—landfill tax, stamp duty land tax and air passenger duty, if that does come, and so on—but the great bulk will be dependent on income tax being devolved. We recognise that in the report. It is what we called for, so it is no different from the plea we made to the Government and is consistent with what happens in Scotland. Borrowing is dependent on taxation powers, but it would be a much-needed boost to the Welsh economy and Welsh infrastructure.
I shall take up one issue that we saw as important for Wales: the Barnett formula. We recognised that change in the Barnett formula should go hand-in-hand with progress on taxation and borrowing and that there should be no hold-up on taxation and borrowing. It would be a big mistake for Wales if we parked this until there was a done deal on Barnett. There has clearly been some progress on Barnett. This problem has been with us for a long while and, in all honestly, we have made more progress in the past three years than we did in the previous 20 years on getting the Barnett formula looked at. Is the Minister in a position to tell us where we are on that and what progress is being made on the Barnett formula?
Under this Government and this Prime Minister and with Danny Alexander, Cheryl Gillan and David Jones we have delivered important opportunities for Wales that complete, or go some way to completing, the jigsaw for what is in reality a Parliament. However, a Parliament without taxpayers looks rather a strange sort of Parliament, and I do not think there is anywhere else in the world where that is the case. This is a necessary move, and I hope that we can all move forward together on it. We did not get everything we wanted in Silk Part 1, but we largely did, and now we must move forward.
Lord Anderson of Swansea (Lab)
My Lords, I congratulate the noble Lord, Lord Bourne, on his initiative and on spelling out the details of the settlement on the basis of Northern Ireland, where there is an air passenger duty. I am not sure why in Wales we are likely to have problems with Europe in a way that Northern Ireland does not, but perhaps the Minister can ultimately spell that out.
As we welcome the noble Lord, Lord Bourne, to this House, we mourn the loss of Wyn Roberts, our very distinguished and beloved colleague Lord Roberts of Conwy. I am personally grateful to the noble Lord, Lord Bourne, for having given me a lot of help as vice-principal of what is now one of my local universities when I was a mere constituency MP. I was musing that I have known Members of the Committee—the noble Lords, Lord Wigley and Lord Elystan-Morgan—for almost 50 years. Certainly I have known the noble Baroness, Lady Randerson, for 30 years, and I knew the father of my noble friend Lady Morgan. One could go on detailing the incestuous nature of Welsh politics.
If we are an overgrown village, that perhaps brings with it difficulties and temptations. If we have this capital-raising power around expenditure, there is a danger within the village of not looking strategically but of looking at penny packets in which everyone has a share. I am pleased that at least we all agree that the big priority now should be Brynglas in Newport and the M4, even though it is still some distance from Swansea.
Samuel Gompers, the great trade union leader in the United States, was once asked, “What does American labour want?”. He answered, “More”. I suppose that if we were to ask the Welsh people what they want, they would say, “More”. Of course, if there is also greater responsibility and accountability, that is a bonus, but what we in Wales really want is more as we are at the bottom of most of the indices of poverty and deprivation, and there are wide regional differences even within Wales. Scotland benefits most from the Barnett formula—and it is unrealistic to expect any change before the referendum—and we in Wales appear to benefit least. I guess that we could lose out on capital expenditure depending on how the block grant is adjusted.
It is worth recalling that Wales has suffered losses in terms of major capital expenditure projects. That would have happened even if the Silk commission recommendations had been put fully into effect. To give brief examples of that, there was expenditure of £9 billion on the Olympic legacy, including a diversion of the National Lottery fund, part of which would have come to Wales. However, in spite of the claims of the noble Lord, Lord Coe, and the delivery committee that the benefits would be spread throughout the UK, 83% of the value of the contracts went to London, the south-east and the east of England, while Wales was at the bottom of the table with 0.01% of the value of the contracts. Has the Wales Office asked for compensation for what we did not receive when it had been promised to us? There will be massive expenditure on HS2. Of course, we welcome the electrification of the rail line to Swansea by 2017, but can we plausibly claim that Wales is benefiting from this vast public expenditure? Finally, I mention the Severn Bridge toll, which now costs £6.40 for cars. As I was driving over on Friday, it occurred to me that this is really a major tax on Wales and a disincentive to investment, and it is far more relevant to us than many of these proposals. Obviously the toll cannot be abolished overnight but, in my judgment, it should be reduced in a staged process.
That said, Silk makes a serious effort to tackle the major deficiency in the devolution settlement—that is, the lack of responsibility and accountability at Cardiff Bay. That will of course have major repercussions for the Welsh Government, and there should be a serious effort to ensure that we have the expertise in finance at Cardiff which is presumably now lacking.
I have already mentioned the linkage between the borrowing and tax powers. The latter depends on the referendum and, if the referendum is unsuccessful, we are left with only the minimal changes—the small beer—which has been mentioned by the noble Lord. Perhaps we need a cross-party consensus and agreement to avoid the referendum, otherwise there could be a major obstacle.
On taxation, clearly we have noted the evidence of Gerald Holtham to the Welsh Affairs Committee last week. In his view, devolving part of income tax, subject to the referendum trigger, is likely to remain a dead letter. The only people likely to vote for higher taxes are those who pay no taxes at all. That was in the ICM poll for Silk. Perhaps the most important finding of the poll was that:
“The Welsh public would prefer fiscal transfers from the rest of the UK than higher taxes in Wales”.
The First Minister has stressed also the point about fairness in Wales.
Nevertheless, perhaps like Gerald Holtham I have been too pessimistic. If the tax-raising and borrowing powers are agreed, that will raise opportunities for a new approach and go some way towards resolving the dilemma of accountability. This is an important new phase—a stage in the devolution process.
Lord Thomas of Gresford (LD)
My Lords, I echo what has been said about Wyn Roberts. I spoke for the Liberal Democrats and he for the Conservatives when the devolution Bill went through in 1998 to 1999. He was not a party man, he was a Welshman, and he did much to deal with the choleric contributions of some of his colleagues on that Bill. We travelled down together occasionally from north Wales and shared a taxi. I was pupil to his brother, Eifion Roberts. I have had a close connection with him and I shall miss him. I send our respects to Enid, his wife.
This week, the coroner for north-east Wales, John Gittins, held an inquest into the death of Mr Fred Pring of Mynydd Isa, near Mold. Last March, he was suffering from severe chest pains and feeling ill when his wife telephoned 999 and requested help at one o’clock in the morning. There was no response. She made four phone calls, the last at ten to two to tell them that he had died. The reason, it appears, was that the five ambulances on call were outside the Maelor general hospital in Wrexham waiting to unload patients who were already on board. One had been there for more than five hours and another for an hour and a half. At the weekend, Mr Carwyn Jones, the First Minister, told the BBC that Wales was far behind England in accident and emergency response times because we were more honest about our statistics and that he wanted to change the targets.
Today we hear that all routine planned surgery across north Wales this week has been postponed due to “increased pressure”. Emergency operations are to be carried out at Abergele. This affects Wrexham, Ysbyty Gwynedd and Glan Clwyd. The NHS, said the First Minister on Sunday on the BBC, is open to improvement. We also hear today that the Welsh Health Minister has announced the closure of neonatal services at Withybush hospital.
Six of the 22 local authorities in Wales are under special measures with regard to education. When the PISA results were published last month, they showed Wales the worst country in the United Kingdom. I need not repeat the statistics because your Lordships will be well aware of them.
The Labour Government in Wales are a total disaster, and you wonder how they get away with it. On the economy, we learned last month from the latest figures on GVA, the measure of value of goods and services produced in the nations and regions in the UK, that Wales is the bottom of the pile. This month in my home area of Wrexham, Kellogg’s have announced 140 job losses; last month, Sharp announced that 250 permanent jobs and 365 agency staff were to go; and 230 workers have lost their jobs at the First Milk cheese-packing plant in Marchwiel.
When Wyn Roberts, other noble Lords who are in this Room and I campaigned for devolution in 1979 under the leadership of the noble Lord, Lord Elystan-Morgan, and again in 1998, we expected that a Welsh Government would successfully lead the way. In the major fields which were devolved to the Welsh Assembly, Labour-led Governments for the past 14 years have failed. I will never forget one Labour parliamentary candidate who once said to me that I was too concerned as a Liberal about the voters: “Don’t worry about them”, he said. “We don’t worry about them. They’ll vote for us whatever we do”.
It is not surprising therefore that the Labour Government are seeking to avoid accountability. At the moment, they are refusing to hold a referendum which would implement the proposed income tax changes under Silk. “We must reform the Barnett formula first,” says Mr Carwyn Jones. I have looked up a speech I made in this House in 2001, in which I said that it is essential that a needs-based formula be devised, taking into account factors such as deprivation, population sparsity and the local environment. We campaigned as Liberals, and I know that Plaid Cymru campaigned for changes to the Barnett formula over the same period. While the Labour Government were in the heyday of their power, the noble Lord, Lord Barnett, expressed his embarrassment at having his name linked to the formula. The Labour Government did absolutely nothing. In putting it forward as a precondition, Mr Carwyn Jones can wait for ever before there will be changes.
We Liberal Democrats would have preferred to have had the flexibility of income tax powers without the Scottish lock-step model. Wales is not Scotland. The Silk report pointed out in appendix F that the latest transborder travel-to-work figures are at their highest in north-east Wales, with 34,500 people travelling from Flintshire and Wrexham into England to work and 16,000 travelling in the opposite direction each day. I can appreciate the Government’s view that the temptation to live in the country with the lowest tax rate might cause some upheavals in Wales that it would not cause in Scotland. Nevertheless, I regret that that flexibility has not occurred.
However, sharing the income tax base between Westminster and Cardiff Bay will significantly enhance the accountability of the National Assembly and the Welsh Government. Income tax contributes the greatest proportion of tax revenue in Wales and will provide a relatively stable revenue stream. Stamp duty, if properly used, could help to lower the cost of developing and buying houses, and we would hope that control over business rates would encourage business investment. In our submission to the Silk commission we asked for borrowing powers equivalent to those of the Scottish Parliament, specifically 10% of the capital budget, and we hope that that is what we will ultimately obtain.
These additional funds of capital and revenue must be wisely spent, and the record of Labour Government in Wales is so poor that a further priority must be to make sure—to adopt the analogy used by the noble Lord, Lord Anderson—that the village has a new head man and a governing council as soon as possible. I am sure we can get cross-party consensus on that.
Lord Elystan-Morgan (CB)
My Lords, I join the tributes so genuinely and deservedly paid to our late friend Wyn Roberts. I, too, congratulate the noble Lord, Lord Bourne of Aberystwyth. How sweet the name of Aberystwyth sounds when it is not in the context of disaster from the sea. I am very grateful to him for having raised this matter.
The Silk commission was asked to report on two matters, as we remember. The first was the fiscal elements and how they could be reviewed and improved upon. The second was on non-fiscal matters and how greater powers could be deployed to the Welsh Assembly. It puzzled me, and still puzzles me, why they were in that order. Surely the first thing to do is to decide what functions a Government have and the second is how they pay for those functions. Be that as it may.
Perhaps I may digress for a few moments and speak not of Silk 1 but of Silk 2. In so doing, I project my remarks to the noble Lord, Lord Bourne, who, I know, will assiduously and religiously report on these matters to his colleagues in Silk. First, what is in a name? The answer is: a great deal when you are dealing with constitutional status. It may very well be that the term “Assembly” was in no way inappropriate when that body was set up in 1998, but nowadays I think that it is a misnomer. Following the referendum of 2011, we are three-quarters of the way to being a full home-rule Parliament. I accept the point made by the noble Lord, Lord Thomas of Gresford, that the residium may very well keep us back from that full status in the field of fiscal responsibility, but that is another matter. Certainly, by now it would be right and proper for Wales, as a legislating body, to have a parliament in exactly the same way as Scotland has.
Secondly, the challenges facing that body are immense. I believe and am confident that in Cardiff Bay there are people of spirit, ability, vision and determination, but it will be a very difficult task for that body within a few short years—that is all that it has—to build up the expertise that this House has had in the review and survey of legislation over many centuries. It will not be done overnight. It also means building up a cadre of civil servants with the expertise and, indeed, the distinguished qualifications for such a massive task.
However, above all there is the question of Members. We have 60 Members. The Richard report, which after all did not envisage a body as authoritative as this, talked of something much more modest and recommended 80. It seems that the minimum that we can do with is something of the order of 100. Let us call it 120 as that makes it very simple—it exactly doubles the representation in each constituency. One can argue as to which should be first past the post and how others should be elected, but that is not the issue for the moment. Without that, there is no possibility at all of development for the Welsh body in Cardiff Bay. If you want it to fail, all you have to do is nothing.
The third matter is one that I and many of us here have raised at various times—that is, the bulk transfer of authority to Wales, subject to specific exceptions, in the same way as is the case with Northern Ireland and Scotland. A Welsh lawyer, be he a solicitor or a barrister, has to chase through a labyrinth of hundreds of small matters to find out exactly what has or has not been transferred. In order to save Welsh lawyers from constitutional neurosis, there is an overwhelming case for such a transfer.
Lastly is the question of income tax variation. I respectfully disagree, not for the first time and no doubt in life, with the noble Lord, Lord Thomas of Gresford. If the Welsh people opt for these powers, with Barnett in its unreconstructed form we will be doing our nation a very great disservice. Why is that? At the moment, we lose something of the order of £350 million to £400 million each year on the Barnett formula. That is accepted. Nobody will stand up and say that it must be justified and kept. Mrs Gillan, our Secretary of State, said its time was up and everybody agrees, yet Her Majesty’s Government, twin-headed as they are, said, “We know that you are being cheated out of these monies year in and year out, but we are perfectly content to maintain that system”. That is entirely wrong. Therefore, Barnett has to be put right before we can contemplate a referendum.
Lord Wigley (PC)
My Lords, I join noble Lords in mourning the loss of the late Wyn, Lord Roberts, of whom I had an earlier opportunity to speak in the Chamber. I very much thank the noble Lord, Lord Bourne, for facilitating this short debate and also pay tribute to his work on the Silk commission and that of other commissioners, including Plaid Cymru’s Dr Eurfyl ap Gwilym and, particularly, Paul Silk himself.
I am sure that the noble Lord, Lord Bourne, would agree that among the most remarkable aspects of the Silk commission was that, first, unlike Scotland, it was drawn up with terms of reference to which all four parties in Wales signed up and, secondly, its first report secured the support of all commission members. I am sure that the noble Lord would confirm that such agreement was achieved by some give and take and that the report was presented as a balanced package, not one to be cherry-picked. I regret very much that the Government, driven as they are by the Scottish agenda, could not accept the package in its entirety.
I regret that for two substantive reasons. First, by insisting on a lock-step on income tax, the Government denied the Assembly the significant degree of policy flexibility it might have otherwise enjoyed, and with it the possibility of creating a far-reaching investment programme that could stimulate the Welsh economy. Goodness knows that we need that. Business rate flexibility and stamp duty land tax are certainly worth having but are not in themselves enough. Secondly, by acting in this way, the UK Government have let the Welsh Prime Minister off the hook. Carwyn Jones has waxed eloquent this week on how the Tories and their Lib Dem backers squandered the opportunity provided by Silk. It has been enough of an excuse for Mr Jones to step away from a referendum, for what is the point of having a referendum on income tax powers that are unusable?
Had the Silk report been adopted in its entirety, with all the parties represented on the commission on board, it would have been impossible for Labour or any other party to wriggle out of having a referendum. A yes vote could have been secured again, as happened in the 2011 referendum when all four parties were united. I pay tribute to the noble Lord, Lord Bourne, in that context. That yes vote would have started making Wales’s Government truly answerable to the people of Wales in having to justify their expenditure and stewardship of Welsh taxpayers’ money. I cannot understand the Government taking this course of action which at one stroke negates everything they purport to advocate in terms of democratic answerability in Wales. Has Alex Salmond’s shadow really got them on the run to that extent?
I also respectfully disagree with the noble Lord, Lord Thomas of Gresford, and do not join him in talking Wales down in terms of the National Health Service. Goodness knows that there are people working hard enough and with great commitment in the health service in Wales, and they deserve our thanks. Of course, some bad decisions have been made by the Welsh Government, as by the Westminster Government. The noble Lord quoted a highly unfortunate situation in the NHS in Wales this week. One of the worst blind alleys that the Assembly pursued with regard to the health service was the creation of 22 local health boards, but I suspect that the noble Lord’s party supported it in doing that. The truth is that Barnett underfunding deprived the Assembly of some £5 billion since its establishment, and health and education in Wales have been underfunded as a result.
Lord Thomas of Gresford
I am sorry to take up the noble Lord’s time, but is that not the point? As soon as the NHS and education are under attack, what do they blame? It is the Barnett formula for failing to provide funds. We need accountability in this.
Lord Wigley
Of course we need accountability. That is why we do not need the lock-step, so that we get the tax linked in. I agree with the noble Lord on that. The fact is that if there was adequate funding, we would not have had some of the cutbacks that have been necessary in the health service in Wales.
The questions I wish to put to the Minister are these. First, could an income tax-sharing model be adopted before reform of the Barnett formula? Secondly, will the borrowing powers set out in the draft Bill include the old WDA borrowing powers, or is that a separate amount? Thirdly, is the M4 relief road dependent on getting these borrowing powers? Fourthly, how much of the £500 million borrowing limit will be available before a referendum? Fifthly, does the revenue stream from the minor taxes—the land tax and the aggregate levy—constitute enough to support the £500 million borrowing capacity? Lastly, the draft measure says that a yes vote in a referendum would allow the Secretary of State to raise the borrowing limit, but raise it by how much?
If I may put one key question to the Labour Front Bench, as Carwyn Jones has said that he will not hold a referendum until the Barnett formula has been replaced or radically amended, will the Labour Party give a copper-bottomed commitment that if it forms the next Government at Westminster after the 2015 election, it will reform or scrap Barnett as a matter of urgency?
Baroness Humphreys (LD)
My Lords, I, too, join in the tributes to Lord Roberts of Conwy and add my thanks to the noble Lord, Lord Bourne, for initiating this debate.
At the outset, I pay tribute to my colleagues in the National Assembly for Wales who called for, and supported, the establishment of a commission to examine the need for a different financial structure for Wales, one which would bring more accountability and responsibility to the Welsh Government. My Westminster colleagues also fought for the inclusion of the commission as part of the coalition agreement. I am grateful for their readiness to listen to Welsh concerns and their desire to move the devolution process forward. We all, I am sure, await the opportunity to debate further the devolution settlement in general when we receive the second part of the Silk commission’s report.
The Silk commission’s report provides us with an historic opportunity to increase the accountability of the Welsh Government, making them accountable for their policies and making them responsible for raising some of the money they spend. I was pleased to see the UK Government’s offer of devolving income tax on the same basis as that legislated for in the Scotland Act 2012. While not the preferred method of many for devolving income tax, I welcome this as a major step forward in the devolution settlement for Wales. However, I have some sympathy with the commission’s recommendation against the lock-step system. One cannot help but wonder how many more opportunities would have been open to Wales had it been given the freedom to vary the basic, higher and additional rates of tax independently.
The devolution of stamp duty, as other noble Lords have said, provides the National Assembly with the opportunity to address the acute housing crisis in Wales by helping to lower the cost of developing and buying houses in Wales. Greater control over business rates will allow the Welsh Government to deliver a more coherent reform of those rates and will, I hope, give the National Assembly an additional tool to encourage business. I certainly look forward to seeing, for instance, which measures the Ministers in Cardiff Bay will employ to help those smaller businesses on our high streets which sometimes struggle against crippling overheads.
I must admit that when I read the announcement of the granting of borrowing powers to the National Assembly, I uttered a silent “Thank goodness”. This now addresses an historic and, in some eyes, offensive inequality where other public institutions, including community councils in Wales, are able to borrow yet the Assembly is not. My own small town council, for example, with an annual budget of less than £40,000 a year, has the right to borrow, yet our national Government and the National Assembly have been unable to secure capital funding for projects, including the much needed major improvement of the M4 in south Wales. I am also pleased to see that the Chief Secretary to the Treasury has announced that the UK Government will provide early access to borrowing powers for the Welsh Government to enable schemes such as the M4 improvement to take place. I look forward to taking my place in the queue to make the case for further investment in the road building and improvement programme in north Wales and seeing the advantages to local economies and road safety which should follow.
These new borrowing powers do not apply just to roads. I certainly welcome them as a way to provide the Welsh Government with more scope to stimulate the economy with investment in other capital expenditure projects. The Silk commission report and the draft Wales Bill which emanates from it must not be seen as merely dealing with taxes, borrowing and financial matters. They are a unique opportunity to shape democracy in Wales. We must ensure that the Welsh and UK Governments take this opportunity and do not let progress pass them by.
Liberal Democrats have long supported a federal system as part of our vision for the UK’s constitutional future, and we believe that the United Kingdom is slowly moving towards a federal state. However, in the early stages of devolution, its constitutional and financial systems had not been developed sufficiently to compensate for these changes. The Silk commission and the draft Wales Bill present politicians across the UK with a unique opportunity to strengthen the framework as far as Wales is concerned. Our support for devolution and federalism has been coupled with a belief that additional responsibility must be accompanied by additional accountability and additional capacity to deliver. That is why we have regularly supported reforms to increase the responsibility that Welsh Ministers have over the money they spend, but also to ensure that they have the right legal and financial powers to deliver a wide range of solutions.
I realise that I have come to the end of my time. The challenge that the Welsh Government face in education and health services needs to be addressed.
Baroness Morgan of Ely (Lab)
My Lords, I thank the noble Lord, Lord Bourne, for introducing this discussion and congratulate him on his first debate in this place. I associate myself with his generous tribute to Lord Roberts. It is wholly appropriate for the noble Lord, Lord Bourne, to introduce a debate on a report in which his contribution and extensive experience as a former Assembly Member was instrumental. Regardless of how dramatic his damascene conversion was to the cause of the Assembly following his election to that place, no one in Wales would now question his absolute commitment to the cause of devolution. It is a shame that that cannot be said of everyone in his party, but we will watch with interest to see how he votes in some key passages of the Wales Bill.
While I am in a generous mood, I also pay tribute to the noble Baroness, Lady Randerson, and her commitment to devolution. It is good that there is at least one expert Minister in the Wales Office who has a thorough understanding of what is going on.
Part 1 of the Silk report represents real positive opportunities for Wales and the wider United Kingdom. First and fundamentally, it creates the opportunity to address Wales’s anomalous situation among its international comparators in that at the moment the Welsh Government have responsibility for spending but not for taxation. Control of the so-called minor taxes—stamp duty, landfill tax and so on—which Silk advocated can now, if legislation is passed, be used to lever associated borrowing powers to the Welsh Government, which are essential in our current circumstances.
Children across the country today are in the unenviable position of growing up during a time when the Tory Government are removing funding from public projects on a vast scale. Just over two weeks ago, the Conservative Chancellor announced a further £12 billion welfare cut, which will be delivered in 2014-15. This is on top of the array of cuts to public services which have already been implemented.
For the people of Wales, the situation is worse. According to the Holtham commission, Wales is already underfunded through the Barnett formula to the tune of more than £300 million per year. It was good to see the Government accept the Barnett floor, but what the Government give with one hand, they take with another and Wales’s budget will be £1.7 billion lower in real terms by 2015 than it was five years ago. That money would have gone a very long way towards addressing some of the problems in the NHS.
The Labour Party fought for the power and accountability of a Welsh Government which would allow us the opportunity to represent the needs of the people of Wales and to fight for a fairer and better deal for each of them. Let us not forget that the strong growth in Wales which was experienced prior to the banking crisis was based on Labour’s record of investment in Wales under devolution and while Labour was in power in Westminster. This growth came to a juddering halt in 2008 in the face of the worldwide economic crisis, and the economy is still struggling to reach that former position. It is only by looking at the economic concerns of the people of Wales, struggling with the cost-of-living crisis, energy prices, childcare, expensive homes and transport costs that we begin to understand that tinkering with the funding formula for Wales will do little to change the country’s economic outlook. Ultimately, we need significant growth in the economy and, as the noble Lord, Lord Bourne, suggested, a larger, responsible private sector. This would help alleviate many of those issues.
Silk recommends revisiting the current funding formula for Wales—Barnett—before transferring income tax-varying powers. To answer the question of the noble Lord, Lord Wigley, I would go further and suggest that a fair funding formula for every nation and region needs to be put on the political agenda.
Silk was clear on the income tax proposals for Wales and opposed the lock-step nature of what the coalition Government are now proposing. Economic experts and the First Minister suggest that the lock-step approach means that income tax power is rendered virtually unusable. Interestingly, even the Tory leader in the Assembly disagrees with the Secretary of State on the issue of lock step. The key thing to avoid is any race to the bottom across the UK on income tax rates; that would be damaging for every nation. It is interesting to the hear the Secretary of State suggest time and again that we could cut income tax rates in Wales, without any suggestion of how we would make up the shortfall in the public sector cuts which would be necessary to fund any such reduction.
I acknowledge that the Government have taken up the vast majority of the recommendations of Silk, which presents Wales with an opportunity to borrow against future income. This means that we can see increased investment in essential infrastructure projects in Wales. However, can the Minister inform the Committee of the process by which the £500 million level of capital borrowing was arrived at? Can she confirm on the record that this is comparable to Scotland’s borrowing powers? Does it take into account Wales’s relative lack of exposure to PFI debts?
I look forward to seeing the findings of Silk part 2. We certainly will not lose sight of the broader economic challenges which Wales and the rest of the UK are currently experiencing, and acknowledge that piecemeal concessions to the Welsh Government will do little to bring the economic prosperity that is so necessary for our poorest communities in Wales.
The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD)
I thank all noble Lords who have participated in this debate. I start by joining the noble Lord, Lord Bourne, and others, in the tributes to Lord Roberts of Conwy. I had known him over many years, and he provided me with an inspirational example in the way that he fulfilled his role in the Wales Office. In particular, his love of the Welsh language ensured that changes were made at the time that have strengthened the language and its position in society.
I thank the noble Lord, Lord Bourne, for securing the debate today on the very important opportunities for Wales presented by the recommendations made by the Silk commission in its Part 1 report. I also paid tribute to the hard work of the Silk commission that went into the report, and I note the important role that the noble Lord played in that process. I have listened carefully to noble Lords in the Chamber and I am pleased that the Government’s response to the Silk commission’s recommendations has been broadly welcomed by several noble Lords, as has the draft Wales Bill, which, we must remember, implements the vast majority of its key recommendations, and which is currently undergoing pre-legislative scrutiny in the other place.
The Government believe that the devolution of tax and borrowing powers should be used to help to generate jobs and growth in the Welsh economy; to give Wales a competitive edge; and to make Wales a more prosperous place. Our response to the Silk commission and the powers we will transfer to Cardiff Bay, take forward these principles. The Welsh economy has lagged behind other parts of the UK for far too long—a point made by the noble Lord, Lord Anderson—and we intend to give the Welsh Government and the National Assembly for Wales the tools to change that.
Just as importantly, implementing the Silk commission’s recommendations will also make the devolved institutions in Wales more accountable to the people who elect them. We fully agree with the commission’s key recommendation: that the funding model of a block grant and some devolved taxes best meets sound principles for funding the Welsh Government, and that part of their budget should be funded from devolved taxation under their control. Since devolution, the Assembly and the Welsh Government have been accountable only for how they spend taxpayers’ money—a point made by the noble Baroness, Lady Humphreys. They will now become more accountable for how they raise it.
The Government demonstrated our commitment to these reforms by publishing the draft Wales Bill before the Christmas recess, only one month after we announced our response to the Silk 1 recommendations. We wanted pre-legislative scrutiny of this important legislation to take place in this Session of Parliament, and I am pleased to say that the Welsh Affairs Select Committee already has that scrutiny well under way. Subject to successful parliamentary passage of the legislation, I hope the new tax and borrowing powers to be devolved well before the next Assembly elections in May 2016.
I want an early referendum called as soon as possible after the legislation is passed, and I will be campaigning for a yes vote. I hope that the First Minister will be joining me.
In response to the points made about the ability to vary income tax in each band by the noble Lords, Lord Bourne and Lord Wigley, and the noble Baroness, Lady Humphreys, among others, we believe that the so-called lock-step system of income tax devolution that we have set out in the draft Wales Bill is the right system for Wales. The system applies in Scotland and was agreed with the Scottish Government, with a single devolved rate for all bands. We believe that it would work equally well in Wales. It delivers on two key principles that underpin the Government’s approach to devolving income tax. It ensures that the UK maintains a progressive tax system. As the noble Baroness, Lady Morgan, said just now, it prevents a damaging race to the bottom on higher-rate taxes, one where the tax rate increases as the income of an individual increases.
The income tax structure is a key mechanism to redistribute wealth across the whole of the UK, which is why we believe it is properly set at a UK level. That point was made clearly and firmly by the Calman commission in respect of its recommendations on Scotland. That point transcends both Scotland and Wales and applies to both countries. The lock step ensures that the gap between income tax rate is consistent across the UK; that devolved government works comfortably within the parameters of the UK; and that fiscal devolution does not benefit one part of the UK at the expense of another. This could occur if the Welsh Government were to set substantially lower rates for higher and additional taxpayers without having to change the basic rate.
Devolving income tax would give the Welsh Government a crucial lever that they could use to reduce taxes across the board in Wales to put money back into the pockets of people in Wales who are working hard and deserve to hold on to more of the money that they have earned. It will create new incentives for growth and jobs and rekindle the spirit of entrepreneurialism. If the people of Wales decide in a referendum in favour of income tax devolution, the Welsh Government would become responsible for almost half of the income tax generated in Wales, making it more accountable while giving them flexibility over levels of tax and spending. An important issue is, crucially, that devolution of income tax would give the Welsh Government access to a significantly larger revenue stream to finance borrowing. So it is far from being a power that cannot be used.
Even if the Welsh Government decided not to vary income tax rates, it would still provide a base for borrowing as well as a base for accountability. However, as the noble Lord, Lord Anderson, pointed out, you have to win the referendum first. I am surprised that the noble Lord can envisage only a situation where the Welsh Government would wish to increase tax if income tax were to be devolved. Under the Government’s proposal it would be just as feasible for the Welsh Government to reduce rates of income tax—for example, by half a pence or one pence in the pound. The noble Lord and the noble Baroness, Lady Morgan, both reflect the view, which is all too prevalent in the Labour Party, that taxes could only be altered by increasing them and not by decreasing them.
Lord Wigley
My Lords, the Minister has mentioned three times now the wish, which she clearly reflects, to reduce income tax and reduce the revenue the Assembly would have. What services is she going to cut to facilitate that?
Baroness Randerson
The noble Lord does not take account of the well known economic mechanism that reduced taxes create more money in people’s pockets, which stimulates the economy, which in turn causes more taxation to be collected. That is a basic point of economics that the Government are pressing.
Much time has been devoted to income tax, but we should not forget stamp duty land tax, which was referred to by the noble Lord, Lord Thomas, which will give us a chance to reshape the housing market in Wales in a way which is much more appropriate for Wales.
Further, we must not overlook business rates. The full devolution of business rates can be implemented almost immediately and without legislation, a crucial point which will enable the Welsh Government to get on with stimulating, for example, the establishment of new SMEs.
The noble Lord, Lord Bourne, asked about the future of the aggregates levy proposal. We have promised that we will review that once the situation in Europe is clear. On air passenger duty, we are not convinced that this will do any more than shift passengers from one airport to another. The situation in Northern Ireland is different: it is the only part of the UK that has a land border with another European country. That is the key difference.
Several noble Lords referred to Barnett reform, including the noble Lords, Lord Elystan-Morgan, Lord Bourne and Lord Thomas. The issue of fair funding is set out in the following way. The arrangements that we agreed with the Welsh Government, set out in our joint statement in October 2012, established a process to review the relative levels of funding for Wales and England in advance of each spending review. That process worked well at the spending review last year. It provides a firm basis for the devolution of income tax, should that be the outcome of the referendum. Convergence is not occurring at this moment; indeed, divergence is occurring, and funding levels are well within the parameters recommended as fair in the Holtham commission’s report, contrary to what the noble Baroness, Lady Morgan, said. If convergence is forecast to resume, we have committed to discuss it with the Welsh Government and to address it in a fair and affordable manner.
I thank noble Lords for their contributions. This Government have delivered for Wales on devolution and will go on doing so. Devolved Governments will be fairer and more accountable and will be able to create a stronger Welsh economy as a result of these proposals. It will be a giant step forward in the development of devolution. This Government are ambitious for Wales and are planning to give the Welsh Government the tools to do the job to stimulate the economy. It is up to the Welsh Government to use those tools effectively.
House of Lords
Health: Flour Fortification
(10 years, 9 months ago)
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Lord Rooker
To ask Her Majesty’s Government what is their assessment of the public health impact of the current programme of fortifying flour; and whether they have plans to extend the programme.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, the Government considered the health impact of the current programme of fortifying flour as part of the Red Tape Challenge review of the bread and flour regulations and concluded that it does deliver public health benefits. We are currently considering the case of mandatory fortification of flour with folic acid and will reach a decision when we have considered new data on the folate status of the population due early this year.
Lord Rooker (Lab)
I thank the Minister for his Answer but ask him to speed up that review. Is he aware of the major new peer-reviewed research from the Wolfson Institute, which surveyed half a million women over a 10-year period and found out that folic supplementation is going down? It concluded that the current policy is failing and creating health inequalities. We know that now. Is this not a real worry?
Earl Howe
My Lords, I am not aware of that study but I shall of course make myself familiar with it. I do not doubt that it will feature in the consideration that we give to this issue, which I can assure the noble Lord we will do as speedily as we can. It is important to say that adding to the list of fortificants would be a major step and we need to be absolutely sure that it is the right one.
Baroness Gardner of Parkes (Con)
My Lords, is it not a fact that in the United States bread is already fortified not only with folic acid, which of course prevents spina bifida in newly born children, but also vitamin D? At present there is a great deal of concern here that none of us is getting enough vitamin D due to the lack of sunlight in winter. Would it not be a good thing for us to have that benefit? Can the Minister also assure me that if this applies to wheat it will cover wholemeal as well as ordinary loaves, as we recommend people to eat those?
Earl Howe
On my noble friend’s last question, we are slightly jumping ahead of ourselves because we need to decide on the principle before we decide on which types of wheat might be fortified. However, I recognise my noble friend’s main point. Indeed, the Scientific Advisory Committee on Nutrition, in recommending mandatory fortification of flour with folic acid, sought to highlight the benefits of fortification as well as the risks. It was a balanced recommendation. We value it and we will look at the advice very closely indeed.
Lord Krebs (CB)
My Lords, what has the Minister’s department made of its evaluation of folic acid fortification in the many countries that have implemented it, including the United States, as has already been mentioned, Canada and Australia? What has been the balance of risk and benefit in those countries?
Earl Howe
I am aware that we have looked at the experience of other countries, but, as I am sure the noble Lord will accept, we need to take a decision on this that is right for all of our population rather than another country’s population. That is why we want to make the decision evaluating risks and benefits based on the most up-to-date data of the folate status of our own population.
Lord Turnberg (Lab)
My Lords, the case for fortifying flour with folic acid is now incontrovertible. It is both safe and effective in preventing spina bifida. I should like to follow up the question of the noble Baroness, Lady Gardner, about vitamin D fortification, as there is a rising incidence of rickets in children, particularly Asian children, and we really should take that seriously.
Earl Howe
The noble Lord is absolutely right. I agree with him that the incidence of rickets is a cause for concern. At the same time, he characterises the case for mandatory fortification as incontrovertible. There are risks that SACN pointed out. Its advice to government stated that fortification of flour with folic acid might have adverse effects on neurological function in people aged 65 years and over with vitamin B12 deficiency. Treatment with folic acid can alleviate or mask the anaemia and therefore delay the diagnosis of vitamin B12 deficiency, which can lead to irreversible effects.
Lord Patel (CB)
The noble Earl referred to two things. His immediate answer just now suggested that folic acid levels might interfere with B12 anaemia in older people. That would require a dosage of about 15 milligrams per day; the dosage we are talking about for fortification would hardly reach 1 milligram per day. The risk, therefore, is pretty minimal. Secondly, he suggested in his opening Answer that the folate level of the population might help to devise the policy. How would that help to devise the policy for women in early pregnancy who need the folic acid to reduce the incidence of neural tube defects?
Earl Howe
I am sure the noble Lord would agree that we have to take a decision based on the most up-to-date data. The data that we had prior to this were 10 years old and it is important to take a decision in the context of the nutritional state of health of the population. On his first question, all I can say is that the risk to which I referred was considered as part of SACN’s overall assessment and we will draw on that in reaching our decisions on the fortification of flour and give it the appropriate weight that it deserves.
Lord Hunt of Kings Heath (Lab)
My Lords, on the issue of up-to-date information, as the noble Lord, Lord Rooker, has said, we now have the Wolfson study, which actually leads that organisation to recommend that all countries should introduce folic acid fortification. The Government already have the recommendation of the Scientific Advisory Committee on Nutrition for mandatory fortification. Yes, it says it should be accompanied by actions to restrict voluntary fortification of food with folic acid for the reasons to which noble Lords have already referred. Why on earth are the Government delaying action on this?
Earl Howe
My Lords, I can only repeat what I said before, which was that taking this step would be a major step by any standards. We must base it on a proper assessment of the risks and benefits. We have some excellent advice from SACN and we need to evaluate that advice fully before taking a decision.
Baroness Hollins (CB)
My Lords, does the Minister agree that the public education campaign has failed and that given that most pregnancies are unplanned and that the risk period for low folate levels is in the first 28 days, before a woman is aware that she is pregnant, there is actually some urgency to act?
Baroness Hayman (CB)
My Lords, it is more than 20 years since the MRC study on this issue first had to be abandoned because it was considered inappropriate not to give folic acid supplements to the women who were involved. When the noble Earl reads the latest study, I suggest that he will find it “incontrovertible”, to use the word of the noble Lord, Lord Turnberg. The noble Earl said in December that the Government were looking at this issue urgently. Will they now look to act urgently?
Public Order: Busking and Live Music
(10 years, 9 months ago)
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Lord Clement-Jones
To ask Her Majesty’s Government what assessment they have made of the consistency of proposed legislation on public order with existing policy on busking and live music.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, the new anti-social behaviour powers are designed to protect the activities of the law-abiding majority. The Government are certainly not seeking to restrict reasonable behaviour and activity, and we do not believe that these powers do. Live music and street entertainment play an important role in community life and can generate a positive atmosphere that is enjoyed by all. As a result, these reforms are completely consistent with our policies on busking and live music.
Lord Clement-Jones (LD)
My Lords, I welcome that statement from my noble friend but there appears to be a considerable difference between the approach of the DCMS and that of the Home Office to busking. The DCMS has been enthusiastic about deregulating live music. The Home Office, by contrast, is enthusiastic about its new public spaces protection order, which creates new dispersal powers and which could be used disproportionately and pre-emptively by local authorities, if the existing behaviour of some London borough councils such as Camden is typical, by contrast to that of the mayor and the GLA. Can my noble friend confirm that the statutory guidance to be issued to local authorities will ensure that these powers are exercised with proper consideration of the balance between freedom of expression and respect for private and family life, and will also point out the considerable existing body of nuisance and noise-abatement powers which local authorities already have to hand? Should we not be encouraging rather than discouraging busking, which is such an important part of our urban culture?
Lord Taylor of Holbeach
I can certainly give my noble friend the assurance that the guidance will achieve what he and the Government wish to see from it. I do not think that there is a difference across government on this issue. We believe that the tests and safeguards set out in the new anti-social behaviour powers will ensure that they will be used only where reasonable. Where behaviour is having a positive effect on a community, and I see busking as having that effect, it would not meet the tests for the new powers. Instead, the powers are directed against the anti-social minority who give street performers a bad name; I might illustrate them as being aggressive beggars and drunken louts.
The Earl of Clancarty (CB)
My Lords, does not the Minister think that Part V of the London Local Authorities Act 2000, which specifically targets busking as being effectively a potential criminal activity and which has allowed Camden Council to impose its draconian policy, should be repealed?
Lord Taylor of Holbeach
I do not intend to comment on the Camden case because it is subject to judicial review, as the noble Earl will understand. However, perhaps I can convey to the House the sentiments of the Mayor of London, who clearly believes that busking is an important part of street life in London. He is keen to encourage street entertainment and live music, not least because of the positive aspect it brings to the life of the city. As I have made clear, the Government believe that live music and street entertainment can play an important part in community life. The Government support the mayor’s position.
Baroness Smith of Basildon (Lab)
My Lords, I welcome the Minister’s responses and I think that the intention of the legislation is clear, but the noble Lord, Lord Clement-Jones, is on to something about the guidance. We all know that overzealous implementation of legislation can cause problems. Will the Minister respond to the noble Lord’s specific point about making things clear in guidance? When looking at the public spaces protection order, will he also consider guidance for community protection notices and dispersal powers because, with this whole new architecture of arrangements for dealing with anti-social behaviour in the Bill, guidance will be important to ensure that we do not have overzealous implementation?
Lord Taylor of Holbeach
I hope I gave my noble friend a positive response to his request. The Government do not start from the position that busking requires regulation and control. Busking can brighten our lives; local action is necessary only to curb any excesses. I think that noble Lords will understand that that can occur. It is not about top-down government; it is about local authorities using the powers available to them. The guidance will certainly make clear the Government’s position on busking and street entertainment.
Lord Colwyn (Con)
My Lords, local authorities and private landowners take different approaches to busking, which can mean that licences are required in some places but not in others. Will my noble friend work closely with local government to clarify the current laws that apply to busking in different areas? I declare an interest as an occasional busker.
Lord Taylor of Holbeach
We have a diversity of talent in this House, and occasionally we have to draw on it. My noble friend makes a very important point: the Government have a role in helping local government to use and interpret its powers properly. The noble Baroness referred in her question to the same issue: making it clear what is considered to be sensible use of powers is a responsibility that the Government can usefully carry out.
Lord Storey (LD)
My Lords, the Minister may have heard of an historic music venue in Manchester called Night & Day which, as a result of one complaint, is in danger of being closed down, which would mean that that opportunity for music would be lost. Is not the Minister right when he says that in these cases a proportionate approach should be considered?
Lord Taylor of Holbeach
Yes. My noble friend who asked the original Question introduced the Live Music Act. I pay tribute to him for securing that Private Member’s Bill through this House. It is designed to ease the licensing burden on popular venues. However, we have to allow local democracy to work and people should be entitled, if they find activity to be disruptive, to make that point and have it established whether or not it is disruptive. I cannot comment at all on the detail of the Night & Day case. I have never been to the place myself; I have obviously missed out in my sheltered life. None the less, I will listen with interest to the outcome.
Armed Forces: Widows’ Pensions
(10 years, 9 months ago)
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Lord Craig of Radley
To ask Her Majesty’s Government what is the estimated annual cost of allowing all armed forces widows, who choose to re-marry or co-habit, to retain and not forfeit their existing service widow’s pension in line with the provisions in the Armed Forces Pension Scheme 2015.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, first, I am sure that the whole House will wish to join me in paying tribute to Captain Richard Holloway of the Royal Engineers, who was killed while on operations in Afghanistan on 23 December, last month. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.
The cost of not suspending pensions on remarriage or cohabitation to spouses who survive members of the 1975 Armed Forces Pension Scheme, whose deaths were not attributable to service, is estimated to be in the region of £250,000 per annum; the cost is estimated to be £70,000 per annum in relation to the War Pensions Scheme. Survivors of those enrolled in the current 2005 pension scheme and the new 2015 scheme, when implemented, will retain pensions for life regardless of personal circumstance.
Lord Craig of Radley (CB)
My Lords, I associate myself with the Minister’s remarks about Captain Holloway. I also declare an interest as a vice-president of the Forces Pension Society and a member of the Armed Forces Pension Scheme 1975.
Is the Minister in favour of justice for widows—those widows who are trapped or locked into a scheme which is unfair and discriminatory compared with later schemes, which allow the survivor pension awards to be retained for life? Is this not totally counter to the Armed Forces covenant, which is so strongly supported by the Prime Minister and all in the Government? Will Her Majesty’s Government move quickly to remove the discrimination in the Armed Forces Pension Scheme 1975 and the War Pensions Scheme, bearing in mind that there would be no significant cost to the taxpayer, given the Minister’s figures and making allowance for the policing, both intrusive and insensitive, and the complex administration of these schemes?
Lord Astor of Hever
My Lords, there are 10 categories of widow or widower under the Ministry of Defence pension and compensation schemes. I have discussed this very complex issue with the noble and gallant Lord. We both agreed that I should place a letter of explanation in the Library setting this all out, which I have done this afternoon.
Defence Ministers have enormous respect for the Forces Pension Society and for the War Widows Association of Great Britain and will continue to work very closely with both of them. Successive Governments have reviewed pensions for life, but changes cannot be taken in isolation from other public sector schemes, including those for the NHS, teachers, police and the fire service, which have similar rules in place for their older schemes.
Lord Rosser (Lab)
My Lords, we associate ourselves with the condolences expressed by the Minister to the family and friends of Captain Holloway. His death on active service in Afghanistan is another reminder of the enormity of the sacrifices that continue to be made on our behalf by members of our Armed Forces.
We have had questions before on service pension issues, including the impact of redundancy just prior to the relevant pension qualifying date. If the money is unavailable to ensure that what some would regard as the basic principles of fairness are not overlooked in some cases over service pensions, why is the money readily available to bail out the Secretary of State over misjudgments on, for example, the Joint Strike Fighter and the IT system for Armed Forces recruitment?
Lord Astor of Hever
My Lords, I remind the noble Lord that it is a fundamental principle, which has been applied by successive Governments, including that of the noble Lord, that public service occupational pension terms should not be improved retrospectively for those who are no longer active members of these pension schemes or for their dependants.
Lord Palmer of Childs Hill (LD)
My Lords, from these Benches, may I associate us with the condolences expressed by the Minister?
I agree with the Minister that this is a most complicated area of legislation. When you research it, you realise how mixed up, complicated and confused it is, particularly for those people trying to work their way through it. What is the cost in terms of staffing an administration to police the relationship status of service widows? Given this, and given the fact that the Armed Forces Compensation Scheme does not depend on widows remaining single, is it not time to look again at extending the service widows pension to cover all service widows, whatever their subsequent relationships?
Lord Astor of Hever
My Lords, I agree with my noble friend that this really is a very complicated issue, which is why I am placing a letter in the Library, a copy of which I will send to some noble and gallant Lords. The Service Personnel and Veterans Agency checks the relationship status of war widows. This is conducted every two years, looking at a random sample of about 5% of recipients. In 2010, this exercise cost some £50,000. It is a complicated matter for the Government to consider whether to look again at extending the terms of various schemes to cover all bereaved spouses for life regardless of subsequent relationships. Nevertheless, Ministers will continue to work closely with the Forces Pension Society and the War Widows Association of Great Britain.
Lord Naseby (Con)
My Lords, I declare an interest as a trustee of the parliamentary pension fund. In light of the fact that Her Majesty’s Government have totally turned that upside down through the use of IPSA et cetera, why on earth cannot Her Majesty’s Government listen to the noble and gallant Lord opposite about what is, yes, a complicated scheme—as was the parliamentary scheme—and take some action?
Lord Astor of Hever
I am afraid that I am not sighted on the parliamentary pension fund. However, we are sympathetic to the concerns of the Forces Pension Society and the War Widows Association of Great Britain. The NHS, teachers, police and fire services’ scheme administrators were consulted last year and highlighted their concerns. Should the MoD accede to the retrospective change, the Government Actuary’s Department confirmed that, if all public sector schemes were to change their rules to accommodate this, the cost would be in the region of £3 billion over a 40-year period—the NHS cost alone would amount to about £1 billion.
Lord West of Spithead (Lab)
My Lords, I believe that the armed services are different and it is shameful that we cannot look at this. When Governments look at something like this and decide to do something, as the noble Lord says, they can do it. It is appalling that we have people policing these women—and they are generally women—who are now wanting to remarry to live with someone and who will probably have to have a worse standard of living. Certainly, if I died, I would want my wife to have a happy second life. It is appalling and we should do something about it. Can that not be done?
Syria: Geneva II Talks
(10 years, 9 months ago)
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Baroness Falkner of Margravine
To ask Her Majesty’s Government what is their assessment of the future of the Assad regime in Syria, in the light of the Geneva II conference talks.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, the purpose of Geneva II is to implement the Geneva I communiqué. This calls for the establishment by mutual consent of a transitional governing body with full executive powers. Any mutually agreed settlement will mean that Assad can play no role in Syria’s future. The Government will continue to do everything we can to maximise Geneva II’s chances of success.
Baroness Falkner of Margravine (LD)
I thank my noble friend for that reply. She has answered part of my Question, but I will persevere. Given the findings of Sir Desmond de Silva and his team of 11,000 executions in a single location, which were systematic, ordered and directed from above, according to the team, can the Minister tell the House whether the Government foresee an outcome at Montreux which would be satisfactory in terms of a transitional Government? Will the Minister tell the House whether the Government are holding talks with the Arab League and the Gulf co-operation council in light of these findings to establish a regional tribunal to try the Assad regime for crimes against humanity?
Baroness Warsi
My Lords, my noble friend once again refers to an appalling atrocity taking place in Syria. This matter has now gone on for many years. We have heard horrendous stories; only last night we heard details of photographs of detainees who had been tortured in custody. However, we come back to the fact that this matter can be resolved only through a political solution. Geneva II is really the only show in town. That is why we are working as hard as we can to make sure that it is a success.
Lord Triesman (Lab)
My Lords, I read the report yesterday and I shall not repeat the figures because the noble Baroness, Lady Falkner, has already provided them to the House. There is credible evidence in Sir Desmond’s submission of widespread war crimes. He is one of the most eminent lawyers in the field of international criminal law. He says that the evidence would stand up in any court of law.
The Government often repeat their policy of no immunity. In that light, is it now not unlikely that Assad can travel abroad to a peace conference or, indeed, any other conference without being arrested for war crimes—or, at least, on the allegation of war crimes—as would indeed apply to any rebel forces against whom similar allegations could be made?
Baroness Warsi
My Lords, the delegation of regime representatives at Geneva II is being led by Foreign Minister Muallem, and I cannot see how a successful Geneva II process would mean that Assad or his brutal regime had a future role in Syria. I agree that there must be accountability for the appalling human rights violations that have been committed in Syria. That is why we have been supporting the opposition through, among other things, human rights training to document these abuses, so that one day those who committed them will be brought to account.
Lord Wright of Richmond (CB)
My Lords, in our Syrian debate on 9 January I quoted Mr Ban Ki-Moon as saying that it would be “useful” for Iran to be present at the Geneva conference. I expressed my own view, which I still maintain, that it is essential for Iran to be there. Does the Minister accept that there can be no hope of the conference reaching a diplomatic or political solution, or even a partial ceasefire, in the absence of the Syrian regime’s principal supporter, while Saudi Arabia and Qatar, which have poured money and foreign fighters into this so-called Sunni-Shia war, while paying lip service to the implementation of the Geneva communiqué of June 2012, make no secret of their determination that there shall be no representation of the present Alawite-controlled regime in any transitional Government? Will the Government persuade our allies, our friends and Mr Ban Ki-Moon to think again at this 11th hour, if there is to be any hope of this conference achieving any practical result?
Baroness Warsi
My Lords, I have said on numerous occasions at this Dispatch Box that the Government have no objections in principle to Iran being involved in Geneva II. However, Geneva II is about the implementation of the Geneva I communiqué, and we do not see how it would be possible for Iran to take part in the Geneva II discussions when it has not endorsed the Geneva I communiqué. Noble Lords will have seen on the news the offer to Iran to take part in Geneva II. It was made by the UN Secretary-General, on the understanding that Iran would endorse the Geneva I communiqué. The endorsement was not forthcoming, and it was therefore appropriate for the invitation to be rescinded.
Baroness Kinnock of Holyhead (Lab)
My Lords, I know that the Minister will have supported the calls made by Syrian women for a place at the table at the Geneva II conference. Does she agree that without women’s support and participation, no viable peace agreement can be made—or, indeed, implemented? Does she further agree that Syrian women’s rights must be strengthened and not compromised in any way during the discussions taking place tomorrow?
Baroness Warsi
I agree with everything that the noble Baroness said. That is why the Foreign Secretary has led the call for women to be involved in these negotiations. The noble Baroness will be pleased to know that UN Women will have a delegation at the Geneva II discussions, and it will have access both to the delegations and to Brahimi. There will also be senior women in both the attending delegations.
Mesothelioma (Amendment) Bill [HL]
Defence Reform Bill
(10 years, 9 months ago)
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Lord Astor of Hever
That it be an instruction to the Grand Committee to which the Defence Reform Bill has been committed that they consider the Bill in the following order: Clauses 1 to 4, Schedule 1, Clauses 5 to 7, Schedule 2, Clauses 8 to 10, Schedule 3, Clauses 11 to 13, Schedule 4, Clauses 14 to 38, Schedule 5, Clauses 39 to 45, Schedule 6, Clause 46, Schedule 7, Clauses 47 to 50.
Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill
(10 years, 9 months ago)
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16:29 - Division on Amendment 11 - Ayes: 248 / Noes: 222 - Amendment 11 agreed.
The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)
My Lords, the Government signalled during Report that they would bring forward a number of technical, clarificatory amendments for Third Reading. Amendments 1 and 17 are such technical drafting points. These amendments relate to Amendment 38 debated on Report, which adjusts the code of practice defence for third parties. As I indicated on Report, there were two points of detail we wished to put right. The defence should also apply to a situation where expenditure may have been incurred on behalf of the third party. It should also apply for a charge in relation to a targeted expenditure offence. These amendments do just that.
This group of amendments also includes amendments relating to the use of Welsh translation and the Welsh language. I am not sure whether the noble and learned Lord, Lord Morris of Aberavon, is present, but I will leave it to him and the noble Lord, Lord Wigley, to speak to those amendments. I should just put on record that we are very grateful to the noble and learned Lord and to the noble Lords, Lord Wigley and Lord Elystan-Morgan, for their constructive engagement on this. I think that we have arrived at a satisfactory outcome. I beg to move.
Lord Wigley (PC)
My Lords, I apologise that I arrived in the Chamber slightly late due to the crush of noble Lords seeking to leave it. I thank the Minister for the movement that he has made on the interpretation of the amendment that was put down by the noble and learned Lord, Lord Morris of Aberavon. Clearly, the Minister’s intention—and our intention with our amendments put forward earlier—was to ensure that not only the literal translation costs but also the costs of implementing that translation were allowable; otherwise, it would not be meaningful. The Minister has now accepted that principle, for which we are very grateful. It will be welcome in Wales.
Lord Wallace of Tankerness
My Lords, I should explain for the benefit of your Lordships’ House that it is the Government’s intention to accept Amendment 25 —when we come to it—in the name of the noble and learned Lord, Lord Morris of Aberavon, which meets the points that the noble Lord, Lord Wigley, was talking about.
94B(3)
““94A Arrangements between third parties notified to the Commission
(1) A recognised third party may, at any time before the end of a regulated period, send a notice to the Commission—
(a) stating that it is party to an arrangement of the kind mentioned in section 94(6),(b) undertaking to be a lead campaigner in relation to the arrangement, and(c) identifying one or more other third parties that are parties to the arrangement and have undertaken to be minor campaigners in relation to it.(2) A recognised third party that has sent a notice under subsection (1) may, at any time before the end of the regulated period, send one or more supplementary notices to the Commission identifying additional third parties that are parties to the arrangement and have undertaken to be minor campaigners in relation to it.
(3) As from the date of receipt by the Commission of—
(a) a notice under subsection (1), the recognised third party that sent the notice becomes “a lead campaigner” in relation to the arrangement;(b) a notice under subsection (1) or (2), a third party identified in the notice becomes “a minor campaigner” in relation to the arrangement.(4) A notice under subsection (1) or (2) may not—
(a) identify as a minor campaigner a third party that is a lead campaigner in relation to the same arrangement, or(b) be sent by a recognised Gibraltar third party.(5) The Commission must, as soon as reasonably practicable after receiving—
(a) a notice under subsection (1), enter in the register maintained under section 89 (register of notifications) the fact that the recognised third party that sent the notice is a lead campaigner in relation to the arrangement;(b) a notice under subsection (1) or (2), enter in that register the name of each third party identified in the notice and the fact that it is a minor campaigner in relation to the arrangement.(6) For provision about the effect of sending a notice under this section, see section 94B.
94B Effect where arrangements are notified under section 94A
(1) Subsection (2) applies where controlled expenditure is incurred during a regulated period in a part of the United Kingdom—
(a) by or on behalf of a minor campaigner in relation to an arrangement, and(b) in pursuance of the arrangement.(2) The expenditure is treated for the purposes of sections 96 to 99A (returns as to controlled expenditure) as having also been incurred, during the period and in the part of the United Kingdom concerned, by or on behalf of any lead campaigner in relation to the arrangement who sent a notice under section 94A(1) or (2) identifying the minor campaigner.
(3) In determining for the purposes of section 94(3)(a) whether a limit is exceeded by a third party during a regulated period, controlled expenditure incurred by or on behalf of the third party is to be disregarded if—
(a) conditions A and B are met in relation to the expenditure, and(b) condition C is met.(4) Condition A is that the expenditure—
(a) is incurred in pursuance of an arrangement that has been notified to the Commission under section 94A(1), and(b) is, by virtue of section 94(6), treated for the purposes of section 94 and Schedule 10 as incurred by or on behalf of the third party.(5) Condition B is that the third party is, at the time the expenditure is incurred, a minor campaigner in relation to the arrangement.
(6) Condition C is that—
(a) the total of the controlled expenditure incurred during the regulated period in any part of the United Kingdom by or on behalf of the third party, disregarding any expenditure in relation to which conditions A and B are met, does not exceed the limit for that part mentioned in section 94(5), and(b) in the case of a regulated period in relation to which any limit is imposed by paragraph 3, 9 10 or 11 of Schedule 10 (periods involving parliamentary general elections), the total of the controlled expenditure incurred during the regulated period in any particular constituency by or on behalf of the third party, disregarding any expenditure in relation to which conditions A and B are met, does not exceed the limit mentioned in section 94(5ZA).(7) References in subsection (6) to controlled expenditure incurred by or on behalf of the third party include controlled expenditure that is, by virtue of section 94(6), treated for the purposes of section 94 and Schedule 10 as so incurred.””
“( ) In section 99 (declaration by responsible person as to return under section 96), after subsection (2) insert—
“(2A) Subsection (2)(b)(ii) does not apply to expenses that are treated as incurred by or on behalf of the recognised third party by virtue of section 94B(2) (arrangements between third parties notified to the Commission).””
““(a) either—(i) during a regulated period, any controlled expenditure is incurred in a part of the United Kingdom by or on behalf of a third party in excess of the limit for that part of the United Kingdom mentioned in subsection (5), or (ii) during a regulated period in relation to which any limit is imposed by paragraph 3, 9, 10 or 11 of Schedule 10 (periods involving parliamentary general elections), any controlled expenditure is incurred in a particular parliamentary constituency by or on behalf of a third party in excess of the limit mentioned in subsection (5ZA),”.”
Lord Tyler
Lord Tyler (LD)
My Lords, this amendment seeks simply to tidy up an anomaly created by the government amendments here and on Report. My noble and learned friend informed us on Report last week that the threshold for registration would be £20,000 in England, £10,000 in each of Scotland, Wales and Northern Ireland, or £9,750 if the spending was to take place in one constituency. In other words, the lowest of the spending limits in the Bill—the £9,750 constituency limit—is exactly equal to the threshold for registration if the activity is focused in that constituency.
The Government’s approach is the same as that I took in my initial amendments on thresholds in Committee. However, I was then persuaded by the Electoral Commission, with the very explicit advice that,
“this approach would cause significant workability problems, since in practice campaigners will either remain below the registration threshold or will be in breach of a spending limit”.
It went on:
“We therefore do not support this amendment”.
The very valid point it was making was that, if you need to have a point of registration, it must be lower than the spending limit with which the activity is concerned, so there are two quite separate processes. First, an organisation says, “I am spending X, so I need to register”. Then it goes on to say, “I have now spent Y, so I cannot spend any more”. The commission has said very clearly on a number of occasions that X and Y cannot be at the same level, but that is the effect of the present situation arising from the recent government amendments.
My amendment therefore sets X, which is the threshold for registration if you are spending in just one or two constituencies, at £5,000 and leaves Y—the Government’s proposed constituency limit—at £9,750. This provides the process of spending, registration, more spending, then reaching the limit—which is exactly what the Electoral Commission has indicated is desirable and essential. I therefore hope that the Minister will recognise that, even today, the Electoral Commission is saying that the Government’s amendments in this area are just not quite right. Importantly, they are defective.
Lord Wallace of Tankerness
My Lords, I recognise the strength of feeling with which my noble friend Lord Tyler moved his amendment; indeed, it is one to which he has spoken in the past, and one which he, I and—at some stage—my noble friend Lord Wallace of Saltaire have discussed. We debated this issue last week when the Government tabled, and the House accepted, amendments which raised the third-party registration thresholds to £20,000 for England and £10,000 for Scotland, Wales and Northern Ireland.
An amendment providing for a new “third” registration threshold of £9,750 was also tabled and accepted. If that was not made clear, I apologise. The point has been picked up by the Electoral Commission. Perhaps I may give some clarity. This third threshold has been introduced to provide alignment with the constituency limits. It ensures that a third party, whether or not it is already registered with the Electoral Commission, will have committed an offence if it spends more than £9,750 in a constituency. In other words, if a third party is already registered, it will be subject to the constituency limit, exceeding which will be an offence. If it is not registered and exceeds the constituency registration threshold, it will also have committed an offence.
I hope noble Lords will recognise that this third registration threshold has not been introduced with the same purpose in mind as that which applies to the other registration thresholds. It has not been introduced to bring third parties into the regulatory regime. Instead, its principal purpose is to ensure that the offence of exceeding the constituency limit operates as intended. For this reason, the Government do not believe that there is a need for a registration threshold lower than the constituency limit.
I hear what my noble friend says about the need for clarity, and I hope that these words have brought greater clarity. I can also tell your Lordships that the Electoral Commission will make very clear in its guidance the operation of the various registration thresholds so that campaigners are left in no doubt about their responsibilities. I hope that the fears which my noble friend expressed on Report, that it would not be possible to keep account of what a third party was spending in a constituency, are resolved by this.
Moreover, the Government have spent a significant amount of time listening to the concerns of campaigners. Perhaps I should address my noble friend’s suggestion of a £5,000 limit. He said that £9,750 is a significant amount. We took seriously the representations made by campaigners, organisations, the commission chaired by the noble and right reverend Lord, Lord Harries of Pentregarth, and other Members of your Lordships’ House. One of the largest criticisms the Bill received, which was made abundantly clear to us, related to the registration thresholds. They were originally set at £5,000 and £2,000 in the Bill but the Government tabled an amendment last week to raise these to £20,000 and £10,000. This major concession was made with the intention of reassuring campaigners that the Bill would not seek to promote the principle of transparency by imposing onerous and unnecessary burdens on third parties. It was a direct response to the debates in and outside this House and I thank again all those who contributed to them. The increased thresholds mean that small campaigners need not worry that they will be unduly burdened by the Bill’s reporting requirements. The thresholds have been set at a level such that those campaigners who spend only small amounts of money will effectively be excluded from the regime.
I totally accept that this is a judgment call. I hear what my noble friend says about spending up to £9,750 but I also think it was my noble friend himself who made the point in our first Committee sitting that greater transparency goes hand in hand with a greater administrative burden and regulation. We have sought to try to strike the right balance. With regard to constituency spending, we believed that the lower threshold of £5,000 could risk capturing exactly those small local campaigners who have been so clear regarding their concerns about the impact that the Bill would have on them. It was not our intention to do so, and we certainly do not want to unpick some of the important work—
Lord Campbell-Savours (Lab)
The noble Lord, Lord Tyler, made clear in his contribution that the Electoral Commission was concerned about the lack of clarity. The noble and learned Lord is not answering that point. Is the commission simply to be ignored?
Baroness Williams of Crosby (LD)
Perhaps I may add to the point made by the noble Lord, Lord Campbell-Savours. The amendment of my noble friend Lord Tyler very much simplifies the administration. It sets a clear limit—rather clearer than the percentages in the original Bill. Given that, given the real problem about bureaucracy and fights with transparency in the Bill, and given that all of us appreciate the major changes made already, would the Minister not consider the advantages of both clarity and transparency in accepting this amendment?
Lord Wallace of Tankerness
Both interventions raise the same point. I say to the noble Lord, Lord Campbell-Savours, that I tried to explain how the £9,750 registration limit comes into play, but I also went on to indicate that the Electoral Commission, in its guidance, will make very clear the operation of the various registration thresholds, including this one with regard to the constituency limit, so campaigners should be in no doubt. In response to that and to my noble friend Lady Williams, I have a lot of sympathy with the point, but the figure of £5,000 is better than a percentage. I do not want to embark on the theology of the percentages because they run through the Bill, but the figure itself will appear in the guidance from the Electoral Commission.
One of the concerns about the administrative burden is that smaller organisations could be caught up. It may be that in one particular constituency there is one constituency issue with which a small campaigning group has become engaged. If we set the limit at £5,000, they may find suddenly that they have to put in place a bureaucracy and administration to deal with that. The higher limit of £9,750 would probably address such concerns, which is what we want to try to ensure. It is often so when you have an individual campaign in an individual constituency. I accept that there is no perfect answer to this. It was a judgment call as to whether we should keep the limit as low as £5,000 or, having listened to those who thought that was too low for individual constituency cases, whether it might be possible to raise the sum. For that reason and to strike that balance, we thought that £9,750 was an appropriate amount. Therefore, I invite my noble friend to withdraw his amendment. I give way to the noble and learned Lord, Lord Morris.
Lord Morris of Aberavon (Lab)
My Lords, I apologise for having misread the grouping of my amendment as scheduled. I will now make a brief comment. I understand that the Minister has referred to it already and to what my attitude is.
In our previous debate on Report on the costs to third parties of Welsh-language publications, which I thought to be excluded from the ceiling on third-party expenditure, I welcomed the helpful comments of the noble and learned Lord, Lord Wallace, which were in the same vein as those made in Committee by the noble Lord, Lord Gardiner of Kimble. The failure to be aware of how well used the Welsh language is in campaigning, in documents and in many other ways, has become obvious. It is very different from the time, long ago in the 1960s, when I was a young Transport Minister struggling with officialdom to meet the demand for Welsh forms and licences. As the noble and learned Lord, Lord Wallace, said, the oversight goes back to the 2000 Act. If this short debate does nothing else, it will remind policymakers and draftsmen that the Welsh Language Act 1993 was passed and that there was a sea change in the use of the language.
The noble and learned Lord, Lord Wallace, indicated that I went too far in seeking to extend the excluded costs beyond the payment to a translator. I understand that argument, but an organisation could publish a modest amount of literature in English and flood the electorate with Welsh material a hundredfold bigger. My main point remains that, on a narrow interpretation of Amendment 25, an organisation might be inhibited from actually producing Welsh material. In my view, you have to produce paper to be able to translate it, and I argued accordingly. I believe that the Minister was then taking a more restricted view. However, the noble and learned Lord, Lord Wallace, said that there was not much between us and that we should try to reach a consensus without creating loopholes whereby much more material was produced. I suggested that, in the short time available, the Government might seek the views of the Electoral Commission.
When I returned to west Wales late on Friday afternoon, I was encouraged to receive a telephone call from the noble and learned Lord, Lord Wallace, from Edinburgh, for which I thank him very much. That was indeed a long-distance negotiation. I kept the Welsh Language Commissioner in Cardiff informed. I understand that the Electoral Commission has been consulted following my suggestion and has agreed to the new form of words. The amendment has been drafted by parliamentary counsel, to whom I am grateful.
Lord Wallace of Tankerness
My Lords, it may be helpful if I respond to the points made by the noble and learned Lord. I had already indicated that the Government are willing to accept Amendment 25. The noble and learned Lord, along with the noble Lords, Lord Wigley and Lord Elystan-Morgan, raised this important issue on Report. It is the case that costs should not be limited to the fee of the translator but should include other costs that arise as a consequence of that translation. We believe that Amendment 25 achieves that aim. It certainly enjoys the full support of the Government. All costs incurred as a consequence of the translation of materials to or from Welsh will not count as controlled expenditure. For example, when a three-page leaflet in English is translated into Welsh and becomes a six-page document, the additional costs of printing and paper will not be counted as controlled expenditure.
There was a general consensus when we debated this in the past. Certainly the Government do not wish to see a situation in which a campaigner could increase their effective spending by clever use of materials in different languages. That is not a result that any of us wanted. We believe that Amendment 25 achieves the right balance between excluding costs in connection with translation without creating the loophole. I think that we have struck the right balance, but as the noble and learned Lord said, there will be a review after the 2015 election. If some practical difficulties arise in the course of it, that matter will almost certainly be discussed; it would be appropriate to discuss it in the context of that review. I hope that that gives the noble and learned Lord the necessary reassurance.
Lord Morris of Aberavon
I am most grateful to the Minister for his help. I shall not press Amendment 26.
Lord Tyler
If I may return to Amendment 9, my noble and learned friend made the very fair comment that this is a judgment call. It is not just my judgment with which he has a problem; it is the judgment of the Electoral Commission. I shall read again what it said, as I do not think my noble and learned friend covered this point. It said previously that if a registration threshold is identical to a limit, there is a problem. It said that,
“this approach would cause significant workability problems, since in practice campaigners will either remain below the registration threshold or will be in breach of a spending limit. We therefore do not support this amendment”.
That is precisely where the Government’s amendments have left us.
As I also said, I am not wedded to the figure of £5,000. If it were necessary, we could go up to £8,000. The key point is that there must be a gap between the registration threshold and the limit. That is not my advice but the advice of the Electoral Commission. That is its judgment call. Therefore, I must invite my noble and learned friend to think carefully before this element of the Bill is considered by our colleagues in the other place tomorrow—as it will be, since there will be government amendments that they will be addressing—as to whether there is not some way that we can deal with this very serious problem. On the basis that I still regard this as an important judgment call—one on which I think my noble friends and I differ, the Electoral Commission being on my side—I am happy for the time being to withdraw this amendment.
“(1) For the purposes of this Schedule “third party constituency expenditure” means controlled expenditure incurred by or on behalf of a third party in relation to—
(a) election material falling within paragraph 1 of Schedule 8A which is addressed to electors (whether addressed to them by name or intended for delivery to households or otherwise distributed within any particular constituency or constituencies), or(b) unsolicited telephone calls falling within paragraph 2 of Schedule 8A, made to such electors or households which can reasonably be regarded as intended to ascertain or influence their voting intention,where the effects are wholly or substantially confined to any particular constituencies or constituency.(2) Third party constituency expenditure—
(a) shall be attributed to those constituencies in equal proportions, or(b) shall be attributed solely to that constituency,as the case may be. (3) For the purposes of sub-paragraph (1), the effects of third party constituency expenditure are wholly or substantially confined to any particular constituencies or constituency if—
(a) there is no significant effect in any other constituency or constituencies, and(b) it can reasonably be inferred that the third party selected the relevant electors or households (or both) or otherwise distributed the material wholly or substantially to contact electors in the particular constituency or constituencies and not a wider section of the public.”
Lord Harries of Pentregarth (CB)
My Lords, I recognise the great importance of constituency limits, and believe that there should be real restraints in place to stop large sums of money distorting an election result at constituency level. There is therefore no disagreement about the purpose of this clause. However, as the original draft did, the current version has grave drawbacks.
First, in its briefing before Second Reading, the Electoral Commission said in effect that it was unworkable and unenforceable. Its exact words were that, even if it were given extra resources,
“it will be challenging to obtain robust evidence to determine and sanction breaches in specific geographical areas, for example, regarding the effects of a leafleting campaign or mobile advertising in different constituencies ... it is likely to be difficult to demonstrate that a breach meets the necessarily high test for using a stop notice to intervene to halt campaigning activity”.
Secondly, campaigning groups have pointed out many times that for the most part they are not organised on a national basis, and it would be a huge administrative burden to divide up national expenditure on constituency lines.
Thirdly, a number of campaigns—for example, against a hospital closure or a motorway extension, let alone HS2—cross a number of constituency boundaries. It would be difficult to allocate expenditure in a transparent way that could be policed by the regulator. With a view to keeping constituency limits, but making them more workable and enforceable, the noble Lord, Lord Tyler, brought forward an amendment on Report, but withdrew it in the hope that the Government would bring forward their own amendment to meet these major concerns. In the event, the Government have not done this. I have therefore tabled this amendment, which builds on the concerns of the noble Lord, Lord Tyler, to take into account the point made by the Minister in his response. It also takes into account legal advice to make the wording more precise, clear and therefore workable.
The fundamental principle behind this amendment is to capture, for the purpose of controlled expenditure, activities that can be clearly monitored, costed and enforced. This means,
“election material … which is addressed to electors whether addressed to them by name or intended for delivery to households”.
This was the amendment of the noble Lord, Lord Tyler. I have added the phrase,
“or otherwise distributed within any particular constituency or constituencies”.
This is to meet the point made by the Minister, who said:
“A third party could therefore freely distribute leaflets by hand in a town centre, or, indeed, in shopping areas in different parts of a constituency, in the knowledge that, because they are not being delivered to voters’ homes, the associated costs need not be accounted for in that constituency’s limit”.—[Official Report, 15/01/14; col. 302.]
So, under my amendment, that activity would be captured and would count towards the constituency limit.
The second activity included in the amendment is,
“unsolicited telephone calls … made to … electors or households … which can reasonably be regarded as intended to ascertain or influence their voting intention”.
Sub-paragraphs (2) and (3) proposed in the amendment provide a more detailed definition of what is meant by targeting one or more constituencies. In principle, activities would be subject to constituency limits where the distributional contact is “wholly or substantially” due to their location in one or more particular constituencies. This avoids mailings based on general issues becoming subject to constituency limits where the location of recipients is primarily chosen because they are affected by an issue, or have expressed a concern about it, rather than on an electoral basis. These mailings may be subject to controls on a national level even if they are not subject to the constituency-specific limits.
The amendment before the House today differs from Amendment 52 as tabled on Report by the noble Lord, Lord Tyler, and others in that it would include material distributed other than by delivery to addresses, such as through distribution in shopping centres, and in that it provides a more detailed definition of what is actually meant by targeting one or more constituencies. My proposed new sub-paragraph (3)(a) is, I think, uncontroversial in that it simply repeats wording already contained in Clause 29. Proposed new sub-paragraph (3)(b) is a response to the response of the Electoral Commission, which, in an earlier briefing, said:
“In principle, we support amendment 52, tabled by Lord Tyler and others … We see benefits in defining the scope of activity covered by the constituency controls more narrowly than in Part 2 of the Bill generally. For example, costs relating to material sent to specific addresses can be identified and evidenced with some confidence”.
However, in its further briefing for Report, while reiterating its support in principle for the amendment, the commission was concerned about general campaigns on an issue and how costs associated with them would be allocated to each constituency:
“If Parliament wishes to narrow the scope of the constituency controls so that they only apply to mailings and unsolicited phone calls, we recommend that this should only apply to campaigning that appears intentionally concentrated in particular constituencies”.
Sub-paragraph (3)(b) proposed in the amendment addresses that point, in relation to both telephone calls and leafleting, much more carefully, because it tries to define what is meant by a constituency. In its final briefing, which we received just before this debate, the Electoral Commission says:
“On balance, we support this amendment, which should make the new constituency controls more practicable for campaigners and more enforceable”.
Given the concern this part of the Bill has aroused among third-party campaigners and the concern of the Electoral Commission about its enforceability, and taking into account the additional wording in this amendment to meet the concerns of the Minister and of the Electoral Commission, I very much hope that the Government will be able to accept it. I beg to move.
Baroness Mallalieu (Lab)
My Lords, my name is also on the two amendments in this group. I start by very briefly saying that, on some aspects of the Bill, the Government have clearly listened and responded positively, for which we are all grateful. That makes it harder for me to say, as I stand up yet again to carp and complain, that I hope that they will not dismiss the words that I have just used. The reality is that the Government are determined to have Clause 29, which I suspect—even if this modest amendment is accepted by the House today—will have little value except to serve as a warning to future Governments tempted to make constitutional changes without first thinking very carefully about them and the consequences.
The constituency limits introduced in the Bill, which, as we all know, reduce the spending limit to £9,750 in the year of an election, do not do that for candidates or political parties but only for non-party campaigners. We were told at the outset that Clause 29 is necessary to reduce the perception of undue influence. That is curious, because there is no evidence—I have not heard any in the course of any of the lengthy debates—to support a claim that there is any such public perception or that the current combination of PPERA and the Representation of the People Act has been in any way ineffective in relation to non-party campaigning so far. There is no evidence that non-party campaigners are currently exploiting the existing law by focusing their spending on a particular constituency. Indeed, no data are presently available on third-party spending by constituencies.
Lord Cormack (Con)
My Lords, I shall not detain the House for more than a few moments. I put my name to the amendment for all the reasons that the noble and right reverend Lord, Lord Harries, and the noble Baroness, Lady Mallalieu, so splendidly and lucidly outlined. I will underline just one point, which was touched on by the noble Baroness in her concluding words. We have established in this country an Electoral Commission. It surely makes no sense to fly in the face of the commission and make its work more difficult and more complicated when it will have a difficult enough task monitoring the election in May 2015. My noble and learned friend, who has been extremely helpful and has listened with care, has come back to us with a number of improvements to this very unsatisfactory Bill—he himself has made it much more satisfactory than it was when it first came before your Lordships’ House—but I urge him to go just one step further and accept the good sense that is contained in this amendment, and to bear in mind that it has been in part drafted, as the noble Baroness said, by the Electoral Commission. We should listen to its sage advice and incorporate this amendment in the Bill.
Lord Martin of Springburn (CB)
Does the noble Lord envisage the third party groups being registered charities? Does he see any inhibition on a third party group being a registered charity?
Lord Cormack
I suppose that the answer to that question, which is a perfectly reasonable one for the noble Lord, Lord Martin, to ask, is that some would perhaps be eligible but others would not. We know from what we have debated in this Bill that not every such body can become a registered charity; it depends on what the aims are. It is possible that some could, but certainly not all of them.
Lord Tyler
My Lords, in respect of the comments made a few moments ago by my noble friend Lord Cormack about the Electoral Commission, perhaps I should put on the record that I sit on an informal cross-party advisory group for the Electoral Commission. It is not a pecuniary interest, but it means that I take very seriously its advice.
As the noble and right reverend Lord, Lord Harries, said, Amendment 11 builds on my own amendment on Report last week, and on Amendment 170A in Committee, and I welcome the fact that it is still here for our discussion. However, I believe that too much building has taken place, and I regret to say that I think that the lawyers have been too clever by half. The purpose of my amendment was to simplify drastically the operation of the constituency limit. I wanted to do away with any need for anyone to work out what did or did not have a significant effect on whom. That was the previous test, which I thought was extremely ineffective and very difficult for small organisations to address without great bureaucracy.
In my estimation, if election material that can reasonably be regarded as seeking to promote or procure the electoral success of a party or candidate has been sent directly to an elector in a constituency, it should be counted under the relevant constituency limit. That seems to be a very simple test. Likewise, if unsolicited telephone calls are made to ascertain or influence voting intentions, it is easy to know where the people whom you are calling live and to allocate those costs to a constituency limit. The amendment on Report was about simplicity.
However, my noble and learned friend the Minister made a compelling point on Report last week. He said that materials could be distributed within a constituency other than by delivering them directly to electors’ homes—they could be handed out in town centres, for example. The noble and right reverend Lord, Lord Harries of Pentregarth, has rightly tried to meet that point in proposed new sub-paragraph (1) of his amendment, but the complication of considering whether materials handed out in a town centre are trying to influence a constituency result has led him and his advisers to complicate the amendment with proposed new sub-paragraphs (2) and (3) of the amended schedule. Therein lies a problem.
The cumulative effect is to ask those campaigners—many of them small operations, as we have been constantly reminded—to consider their spending against not one test, as I advocated last week, but three. First, there is my test, which I have already given: are the phone calls and election material directed at a particular elector or household? That is easy. Then we have in this amendment, secondly: does the material have a significant effect just in the constituency to which it was sent? Who can tell? When can they tell? Perhaps they can tell only after polling day. Therein lies another problem. Then there is the third qualification: can it reasonably be inferred that the third parties selected the electors in order to contact electors in that constituency,
“and not a wider section of the public”?
Who will adjudicate on that and when?
I do not know how one can be sure of either of the latter tests, either in terms of the Electoral Commission and its very proper responsibilities, to which my noble friend Lord Cormack has just referred, or of the organisations that have been in touch with us over the past few weeks. I can see that it may be necessary in relation to the narrow issue of handing out leaflets in a town centre. After all, leaflets handed out in the town square of my old North Cornwall constituency would almost certainly be directed at North Cornwall’s results and voters, but leaflets handed out in Trafalgar Square might not be directed only at voters in the City of London and Westminster.
That is a problem—one brought about by the Minister’s legitimate concern about the distribution of leaflets in a town square. If we had more time for drafting, I would be able to find some additional tests, but only for this additional activity of handing out leaflets rather than for all deliveries that could take place. It is a rather complicated point and I apologise for that to Members of your Lordships’ House—but it is an important one.
As the amendment is drafted, it means a loophole is created, permitting direct communication with voters outwith the constituency limit because it could somehow be deemed under sub-paragraphs (2) and (3) of the amended schedule that the materials sent to them were not really supposed to influence the constituency result. I do not buy that, and at this stage it leaves a real lacuna. If you write to a voter in a constituency to promote or procure the electoral success of a party or candidate, I am confident that you are trying to promote or procure their electoral success in that constituency. That is a simple rule, and one it would be simple for campaigners big and small to follow.
At every stage of the Bill, from Second Reading right through to Report last week, I have been concerned to simplify and clarify the requirements placed on campaigners, reflecting what they—the campaigners, who are charities and other organisations—have said consistently to me and my Liberal Democrat colleagues in both Houses, and no doubt to many other Members of your Lordships’ House. None the less, I regret the position we are now in since I have pursued this issue right from Committee.
I return to the point made by my noble friend Lord Cormack: the Electoral Commission still says that it has concerns about the enforceability of a constituency limit. There needs to be a constituency limit. A revised amendment along these lines would make that more effective and much easier to enforce. Combined with the sensible changes to the constituency threshold that I outlined in the debate on the previous group of amendments, the whole regime would be much tighter and more workable, which is what the Bill sets out to achieve.
Following up on the point made by my noble friend Lord Cormack, I promised to refer to the advice given to us by the Electoral Commission. At the end of its advice to us for today, referring to Amendment 11, it said:
“We think this amendment would reduce this problem, but in practice it will still often be difficult to obtain adequate evidence of a breach at a constituency level and deal with it before polling day”.
That is an extremely important point. To that end, I hope that my noble and learned friend the Minister will respond positively to this amendment, even if it means that some simplification must be achieved in the other place tomorrow.
Lord Harries of Pentregarth
The noble Lord knows that I value simplicity even more than he does. Would he not agree that it was right to try to respond to what the Minister said about the distribution of leaflets, and that if you were doing that, you had to try to define what was meant by focusing on a constituency or influencing the voting intentions of people in a constituency? Would he not also agree that, while there was, of course, a qualification at the end of the last advice from the Electoral Commission that there were probably difficulties remaining, the difficulties with this Bill are now far less than they were originally or even, perhaps, with his own amendment at an earlier stage?
Lord Tyler
My Lords, in response to that, I certainly agree that the Bill is greatly improved and I pay tribute to the noble and right reverend Lord for the amazing amount of work that he and other noble Lords have undertaken to achieve that purpose.
I regret very much the speed with which we have moved from Report to Third Reading and that we did not have a genuine opportunity—we only had a comparatively few hours yesterday—to look at this together. I regret even more that any amendments passed today, whether government amendments or others that are passed by your Lordships’ House, will be considered by the other place within 24 hours. The short period for discussion of any necessary improvements is very unfortunate. Had his amendment simply brought in the point raised by the Minister about leafleting, and therefore stuck rigidly to the simplicity of the first provision in his amendment, I would be much happier about it.
Baroness Williams of Crosby
My Lords, I intervene briefly in this debate because I am struck time and again in the exchanges in this House by the endless pursuit of perfection in an area where I do not think that perfection can be achieved. We have to accept that the best compromises that we can get are the best that we can do by this Bill at this late date. I know that it reflects the failure of pre-legislative scrutiny and I know that it reflects the lack of consultation, but given that we are where we are, I think that the recent amendments put forward—not least the ones by my noble friend and those by the noble and right reverend Lord, Lord Harries of Pentregarth—further improve the Bill. We should be pleased with having produced that effect as the matter goes to the other place.
I completely accept what my noble friend has said that it is a great shame, given the lack of pre-legislative scrutiny, that the gap between the deliberations in this House and those that are starting in the other place tomorrow is, frankly, ludicrous. It does not enable the other place to take into account the very careful and deliberate thought that has been given in this House, not least by the noble and right reverend Lord, Lord Harries of Pentregarth, and his very impressive commission, which most people here agree went into this Bill in great detail, produced some excellent amendments and really gave us the opportunity to say that the House of Lords has made a constitutional contribution of the kind for which it is distinguished in a large range of legislation.
I do not want to detain the House, but I share the view that there are certain limitations on the whole issue of dealing with leafleting and all the rest of it. I also recognise that what has come out of this is the best attempt we could make to simplify an extremely complex Bill and to keep as largely as we can the concept of constituency limits.
I have the greatest respect for outstanding intelligence, but I think that, in what the noble Baroness, Lady Mallalieu, said in her defence of the position she would like to see, she went a bit far. I think that she should have been a bit more fair about the extraordinary efforts made by Ministers in this debate to try to meet some of the points that she so forcefully made about the need to protect the freedom of speech and expression of the non-party campaigning groups. She is quite right about that, but I think that she was less than generous in her failure to recognise the extent—by raising the threshold and other ways—to which Ministers have tried to meet some of the arguments that she and some of her colleagues have made.
Having said that, I hope that Ministers will be able to pay particular attention to elements of what has been said in this House and to draw the attention of the other place—which means that they will have to work very hard tonight, I appreciate—to the points that have been made here that have not altogether been carried out. Having said that, in a very constrained situation, I think that this House and the commission can legitimately say that they have made a very substantial contribution to making this complicated Bill as good as it could be made.
Lord Martin of Springburn
My Lords, I come in briefly, having listened to the arguments surrounding this amendment. The noble Baroness is quite right that we cannot get perfection, but I wish that we could put on record and give due consideration to the men and women who, when a general election or municipal elections come, put their names forward as parliamentary candidates. I had the good fortune to be in a constituency where, although I hated the term “safe Labour seat” and cringed whenever anyone said it because the seat had to be worked at, I had significant admiration for those candidates who came into that constituency and said that they were flying the flag for their party—Conservatives, Liberals or the SNP. Remember that many of us get to our feet and talk about the new democracies in Africa and those that used to be behind the iron curtain, but one thing that we have to do as parliamentarians is to teach people how to be parliamentary candidates.
That brings me on to these campaign groups and it is why I asked the noble Lord, Lord Cormack, whether they might be registered charities. The noble Lord, Lord Tyler, said that they might be, if I picked him up correctly. Let me look at the registered charities which embark on campaigns. I know that the situation is different now when a general election is called, because we have got ourselves this five-year election term and people see that we can go right to the wire on a given date, five years from the previous election. In the old days, we used to sit in the tea room in the House of Commons wondering when the Prime Minister was going to go to the country, which meant that the campaign groups could not put the kettle on and say that it would be on a certain date—even those who were closest did not know that. Now that we have this five-year situation, perhaps I might send a message out to people in charities that they should use their heads. If they want to campaign, they have four years and three months, I think, in which to campaign. They should let the general election take its course with the parliamentary candidates because there is a danger here.
Let us take hospital closures, which the noble Lord mentioned. We all hate to see hospital closures, but we know that certain people have sinister reasons for being involved in a campaign, which is to embarrass a certain parliamentary candidate. I have heard the term “putting up score-cards” used during this debate. Some of these campaigns put up score-cards and say, “This is a good candidate, who has campaigned against the closure of a given hospital”. What if it was a Minister in that constituency who was holding office and had another portfolio? That Minister would not be allowed to say, “Don’t close that hospital”, yet some of these campaigners choose not to see that and say, “This is the good guy who is prepared to campaign, while your sitting Member of Parliament has been silent”. We know full well that the reason he or she has been silent may be that they are holding the office of Secretary of State. They could be holding the office of Prime Minister. However, what they have been doing in the background may have been excellent in fighting for the local community and its hospital.
I say to the charities that they really have to watch what they are doing. Every time I give to a charity, I am asked whether I am a taxpayer. If I am, the Inland Revenue will give money to that charity, so a high proportion of what charities are receiving involves the public purse and they should be careful about what they are doing. Also, it might be argued that a campaign body in an area that has no charitable status may call on other groups that have charitable status to support it.
I do not know if I am articulating my point properly, but we must give serious thought to the fact that decent men and women get into these constituencies during the general election and fight in good faith. It is wrong for some of these campaign groups to get involved when the democratic process, such as a general election, is on.
Baroness Hayter of Kentish Town (Lab)
My Lords, first, I endorse the words of the noble Baroness, Lady Williams, about the work of what by way of shorthand we call the Harries commission. The noble and right reverend Lord and his colleagues have done both the charity sector and this House an enormous service.
As we have emphasised, we have two problems about the Bill’s brand-new constituency limits, which obviously apply to the wider issues covered by the Bill, which might in theory have an effect in one or more constituencies. The major problem has already been articulated: it is not their intention or purpose, in the words of the noble and right reverend Lord, Lord Harries, but their workability. Charities and campaigners simply do not organise or do their accounts or even think in constituency terms. They focus on the proposed path of the HS2, the flight paths around Heathrow, the ground under where fracking will take place, the location of badger sets or the location of a polluting factory. That is the focus for their work.
For them, therefore, a requirement to record and account for their staff time and expenditure on a whole new geographical basis—indeed, on boundaries which are probably unknown to their accounts department—will be highly problematic. It will add enormous bureaucracy when, as we have said before, the Government are elsewhere trying to reduce red tape. Accounting for expenditure on the basis that it might have an effect on a constituency would require those charities and other groups to develop a whole new financial accounting system, a demand which surely cannot be achieved even by the new and welcome date of September.
Our second concern is also one that has already been mentioned. It is the worry of the Electoral Commission about whether the new constituency limits are enforceable in the timescale of an election. There is nothing worse than having a rule or a law that is unenforceable, because it undermines the rest of the law. The Electoral Commission considers that Amendment 11 would at least reduce its enforceability worries, although it still fears that it would often be difficult to get the information and evidence for any breach of constituency-level spending and deal with it before polling day. Amendment 11, which, as we have heard, limits the new reporting requirements to telephone calls, literature to households and physical distribution in a defined area, seems to us eminently sensible. That sort of spending is preplanned and easy to measure. As the Electoral Commission says in supporting the amendment,
“We see benefits in defining the scope of activity covered by the constituency controls more narrowly than in Part 2 of the Bill generally”.
Given the widespread support across the House for the amendment, I think that the Government would be well advised either to heed the wise words of the noble Lord, Lord Cormack, and accept the amendment or, at the very least, to undertake not to implement their new constituency rules until after the 2015 election. That would give charities time to think about whether it is possible to do their accounting in that way, and it would give the Electoral Commission the opportunity to sort out those demands on enforceability. I think that the former course is better—to accept the amendment. We certainly support it.
Lord Wallace of Tankerness
My Lords, I thank the noble and right reverend Lord, Lord Harries, for this amendment and for the opportunity to discuss these issues on constituency limits. It is an issue that has featured in discussions not only today but at previous stages of the Bill’s passage. It is appropriate that we give consideration to this, which members of the commission might see as the outstanding item still to be addressed. The amendments are very similar to those tabled by my noble friend Lord Tyler on Report. My noble friend’s amendment, which we discussed last week, sought to narrow the range of activities which would be considered controlled expenditure for the purposes of constituency limits. Although I made no commitment on the part of the Government to returning to this at Third Reading, I indicated at the close of the debates on Report that we would ensure that officials raised these matters with the Electoral Commission.
I understand the point about simplicity. We have sought in many respects to reduce the administrative burden, but it was clear from the discussions that took place subsequently with the Electoral Commission that there was no technical fix. My noble friend Lord Tyler was almost asking me the same again at the end of his contribution to the debate on this amendment. There was not a technical fix but there might be a policy fix. It is a policy fix that is inherent in the amendment of the noble and right reverend Lord, Lord Harries, which would remove some categories of expenditure from being counted towards the constituency limit. For reasons that I will explain, the Government are unable to accept that there should be that policy switch.
First, I acknowledge that, in moving the amendment, the noble and right reverend Lord, Lord Harries, accepted the principle of constituency limits and sought to address one of the points of concern I had raised with regard to the amendment of my noble friend Lord Tyler. He also sought to address the practical issues raised by the Electoral Commission. In the context of trying to relieve some of the administrative burden—going back to the earlier debate, just to remind your Lordships’ House—it is also important that the original proposals had a limit for the constituency spending and a smaller limit for the post-Dissolution period. There was a much smaller limit for campaigning activity that could be spent between the date of the Dissolution of Parliament and the election. We have taken away that interim threshold, again in an effort to help smaller organisations which may be campaigning in one constituency.
We believe that these amendments would require that any expenditure on election material addressed or delivered to households, and any unsolicited telephone calls made with a view to ascertaining households’ voting intentions, would be attributed to a particular constituency or constituencies for the purposes of the limits. The noble and right reverend Lord’s intention appears to be that only expenditure on such activities should count towards constituency limits. He goes further than my noble friend Lord Tyler did last week to suggest considering the costs associated with the distribution of materials otherwise in a constituency—which was the example I gave. I fully accept the example that I gave of activity in a shopping centre, which clearly would relate to the one activity.
I was somewhat bemused by the point made by the noble Baroness, Lady Mallalieu, when she complained that there was a loophole. It appears to me that if you take away other activities which have to contribute towards controlled expenditure, the loophole gets bigger. She indicated that it could be a loophole to have a rally just over the constituency boundary. First, whether a rally against a hospital closure that promotes the electoral success of one particular candidate counts towards a constituency limit depends on whether it has a significant effect in that constituency. Albeit that it takes place over the boundary in a neighbouring constituency, it could still have a significant effect in the first constituency and would therefore come within it. Of course, the loophole that would be created by this amendment would be the rally in the constituency itself—over the boundary it would not count at all. I believe that is a criticism: there are activities that would not therefore come within the definition of “controlled expenditure”.
Constituency limits for third parties mean that they cannot outspend and overwhelm candidates and political parties, who after all are the main actors in an election. The noble Lord, Lord Martin of Springburn, made an important point, reminding us that elections are about the names of candidates on the ballot paper. It is not right that a candidate or a party campaigning in a constituency could be targeted by a third party with greater means and a greater spending limit at its disposal.
Taking into account both the long and short campaigning period limits, the most a candidate at the last parliamentary general election could have spent was £55,000; that is for the entire period. I may have misunderstood what the noble Baroness, Lady Mallalieu, said, but I thought she said at one point that parties could spend without limit. That is not the case. There is a limit on political parties. Indeed, in the course of the election period—the short campaign from the Dissolution of Parliament—it is roughly £12,000 to £13,000, depending on the number of electors, a figure that was mentioned by my noble friend Lord Cormack in one of our earlier debates.
However, a third party could choose to spend the entirety of its current spending limit in one small area, campaigning against that and other candidates or the parties they represent. That could be very substantial if one allows a range of activities not to be in any way brought into controlled expenditure. We have previously heard concerns that third parties, although an important part of the democratic process, can also be so closely aligned to a political party as to be effectively campaigning to promote that party. It is right that we take account of that. That is why the Bill introduces a number of provisions to give greater transparency to the activities and expenditure of third parties. The limits on constituency spending are a key element of the entire package in the Bill. The controlled expenditure incurred on the entire range of activities, not just those few proposed by the noble and right reverend Lord, Lord Harries, should be attributable to constituency limits.
Third parties are not merely in the business of distributing leaflets. They arrange and hold events, rallies and press conferences. They bus campaigners from area to area, delivering large groups of people to distribute those leaflets, or to take part in rallies or other events. Not to include these activities would mean that third parties could still continue to hold local media events on a weekly, or even daily, basis in the run-up to an election without any of that expenditure being brought within controlled limits. It would mean a third party could hold a rally on the eve of an election, secure in the knowledge that it need not account for the cost other than on a nationwide basis. It would mean that a third party could bus hundreds of campaigners into marginal constituencies and overwhelm the work of the candidates in that constituency.
These are all significant activities, and it is right that third parties should be required to account for them on a constituency basis. Narrowing the scope of constituency limits would address only half the problem. On that basis, recognising that in an election the actors are the candidates themselves, it was unfair, particularly in the period from the Dissolution of Parliament until the election, that they were limited to a relatively small sum of money—£12,000 or £13,000—while if you got two third-party groups in the same constituency, they could spend up to £19,750. We do not think that it is reasonable that a loophole should be created.
Lord Cormack
I would be most grateful if the Minister would reflect on one suggestion. I think that he would agree with me that Clause 29 is not the easiest of clauses to understand, particularly for those who are not familiar with legislative language. Would the Minister be prepared to have a conference with the Electoral Commission to try to draw up some mutually agreed guidelines to, and interpretation of, this new law? It is very important, and that would be extremely helpful—particularly bearing in mind that we have this ridiculous businesses of the Bill being in another place tomorrow. I cannot see the reason for that; maybe the Minister could comment on it.
Lord Low of Dalston (CB)
Before the Minister finishes his speech, may I, too, ask him a question, to which I would be grateful for a response? All the examples that he has cited seem to be hypothetical. What examples does he have of the kind of conduct that he is railing against actually taking place? Where is the mischief that he seeks to legislate against?
Lord Wallace of Tankerness
My Lords, it was probably at one of the consultation meetings that my noble friend Lord Wallace of Saltaire held when we were discussing these matters that we heard about one substantial organisation that spent a considerable amount of money at the last election—and, indeed, registered the fact that it had done so. It was made clear that one of its activities was to focus on individual constituencies. I do not criticise that organisation for doing that, but if people are going to do such things, there should be proper limits so that there is proper transparency.
With regard to the point made by my noble friend Lord Cormack, whether I speak personally or on behalf of Ministers and officials, I think that a conference with the Electoral Commission to ensure clarity of guidance on the constituency limits could be very worth while. I say “guidance” because interpretation is, ultimately, a matter for the courts, not the commission. I am not even sure—I am making this up as I go along—whether it should be restricted to Ministers, or whether it might also include the Opposition and other parties, and representatives of campaigning groups. Some sort of round table discussion might be very helpful before the final guidance is produced by the Electoral Commission. On the basis of what I have said, I again invite the noble and right reverend Lord to withdraw his amendment.
Lord Harries of Pentregarth
Before I focus on what the Minister has said about the amendment, may I thank him, and the noble Lord, Lord Wallace of Saltaire, for responding on a whole range of issues to the concerns that have been expressed in this House? The Government really have moved a significant way; there is no doubt about that. But I think we are all aware that the Bill as it came to us in the first place was an appalling piece of legislation. A parliamentarian of very many years’ experience said to me that it was the worst piece of legislation that they had ever seen in a long parliamentary career. “Not quite”, I am hearing, so there must be some other cases as bad.
Again, the value of this House has been shown, as has the willingness of Ministers in this House to listen, so I genuinely thank them. I also thank noble Lords on all sides of the House who have supported some of the amendments tabled in my name and in the names of others. Not least, I thank members of the Electoral Commission, whose expertise I have had the privilege to share. The people there have worked extraordinarily hard. When I look at my e-mails in the morning I find that, night after night, they were sent off in the small hours of the morning; that gives you some indication of how hard they have worked.
Focusing on the amendment, I am disappointed that the Government have not been able to respond more positively. We made a genuine attempt to meet the point that they made about distributing leaflets, and the need to define very carefully what was or was not meant by a constituency in which there was an attempt to affect people’s voting intentions. Rallies have just been mentioned, but as the noble Baroness, Lady Mallalieu, said, if people want to get round restrictions on rallies they could easily do so by having a rally just outside a constituency where there is a narrow majority. There are all sorts of ways round, even as the Bill now stands.
My final point is about the Electoral Commission. I reiterate that it supported the amendment that has been moved today in my name and in the names of others. It said that there were still some difficulties with monitoring, but those would be nothing like the difficulties that it will have if the Bill goes through with the provisions on constituency limits unchanged. That will be extremely difficult, if not impossible, for the Electoral Commission. It is slightly surprising that the Government have not listened more carefully to what it has said. I think that the strength of feeling in the House on this issue is such that I ought to test the opinion of the House.
“(a) in subsection (6), after “the purposes of this section” insert “, sections 94D to 94H”;(b) in subsections (8) and (10), after “sections 94A and 94B””
“( ) It is a defence for a third party charged with an offence under subsection (2) or (3) to show—
(a) that any code of practice for the time being issued under paragraph 4 of Schedule 8A was complied with in determining whether any expenditure is controlled expenditure for the purposes of this Part, and(b) that the offence would not have been committed on the basis of the controlled expenditure as determined in accordance with the code.”
““(1) Subsection (1A) applies where—
(a) during a regulated period, any controlled expenditure is incurred by or on behalf of a recognised third party in a relevant part of the United Kingdom, and(b) the incurring of that expenditure would, if the third party had not been recognised, have been an offence under section 94(4) (whether because it was incurred in excess of a limit mentioned in section 94(5) or 94(5ZA)).”
“( ) In sections 90(3) and 94(8), (10) and (11), for “99” substitute “99A”.”
“( ) The report under subsection (6) shall be laid before Parliament not more than 18 months after the date of the first relevant parliamentary general election.”
Lord Harries of Pentregarth
My Lords, I need not speak to this amendment for very long. We very much welcomed the Government’s commitment to have a review of the Act after the 2015 general election and that they will set up a person to monitor the election itself. That is all very much to be welcomed—not least of course because, even with the amendments that the Government have accepted, there is still a great deal of concern about this Bill.
We all know that there is a tendency for reviews to be spun out and spun out. That is why some of your Lordships were very keen to have a sunset clause. I believe that Amendment 21 will ensure that Parliament has a proper opportunity to see that review and respond to it well before the election following the 2015 election. We believe that 18 months is about the right time for a proper review to take place and for all the consultations that are necessary. I beg to move.
Baroness Lister of Burtersett (Lab)
I want very briefly to support the amendment but also to remind your Lordships’ House that the Joint Committee on Human Rights expressed concerns about the implications of the Bill for freedom of association and freedom of expression. I would be very grateful if the Minister, in responding, could assure your Lordships’ House that the effects of the Bill on freedom of expression and association will be part of this review, the importance of which was underlined when discussed in Committee—although I do not think that this particular point was raised.
Lord Tyler
My Lords, I very much welcome the noble and right reverend Lord’s amendment. I believe that it is preferable to a sunset clause because it will start the process of analysis of what is happening under the Bill before the general election happens, rather than having to wait till a later stage. I hope that it gets an equally warm welcome from my noble and learned friend on the Front Bench.
Lord Wallace of Tankerness
My Lords, as the noble and right reverend Lord, Lord Harries, has indicated, the Government brought forward at Report an amendment so that there will be a review. The Government are committed to appointing a person to undertake the review within 12 months of this Bill receiving Royal Assent. That came out of one of the meetings that we had with one of the campaign groups, which suggested that it might be useful to have someone in place during the election. We thought that that was a very sensible suggestion and one for which we have provided.
I have discussed with the noble and right reverend Lord, Lord Harries, the merits and demerits of perhaps putting more in the Bill about what the review might or might not do, and we concluded that the minute we start adding things it begs the question as to what has been left out. There is no intention to limit the review, and I take the point made by the noble Baroness, Lady Lister. If people wish to make representations on that point in terms of the review, we would not anticipate anything stopping it—certainly there is nothing in the Bill that would stop it. I emphasise, however, that we believe that freedom of association and expression are vital. They are not impinged by the Bill; rather, what we have is transparency. We are not trying to stop people campaigning, but if they are campaigning in a way that seeks to influence an election it is not unreasonable that that should be transparent.
The next scheduled general election will be the opportunity on which the Bill will operate, and will provide a timely opportunity to review the effectiveness of those controls. On completion the person conducting the review must produce a written report which must be published and laid before Parliament by the Minister. The noble and right reverend Lord, Lord Harries of Pentregarth, tabled the amendment proposing that the report must be laid before Parliament within 18 months of the general election. It is right that Parliament should have the opportunity to consider the outcomes of the review well before the following 2020 election. It is appropriate that the review is done to an established timetable, and the Government are therefore pleased to accept the amendment.
Lord Harries of Pentregarth
I thank the noble and learned Lord for accepting the amendment. I do not know whether he can give any kind of indication, or feels that he would like to at this stage, about the groups or constituencies of people who would be consulted as part of the review. Perhaps he is not yet in a position to do that.
Lord Wallace of Tankerness
My Lords, I do not want to pre-empt the person who is appointed to undertake the review or in any way constrain what he or she will do. It might be an opportunity to reiterate something, not just in the context of the review, but on the point made in the previous debate by my noble friend Lord Cormack. I accepted the point that he made on the constituency issues: there might be merit in having groups—not just parties, but campaigning groups—involved in any guidance that emerges from the Electoral Commission. I readily expect that any review would involve submissions from the political parties that have been involved in the election, from charities, non-charitable campaigning groups, and people who have something relevant to contribute. As I said yesterday, we can always bet our lives that some issue will emerge that none of us has thought about, in spite of our very exhaustive discussions and debates. That is why it is important not to be prescriptive.
Lord Harries of Pentregarth
I thank the Government for their willingness to accept the amendment.
“( ) No union shall have to submit a membership audit certificate to the Certification Officer before August 2016.”
Lord Stevenson of Balmacara (Lab)
My Lords, at Report the Minister said that he was happy to offer reassurance that unions will have the time that they need to comply with this new legislation. He said that unions would,
“have at least 17 months to comply from the point at which the legislation takes effect, because the provisions will not apply retrospectively”,
and because,
“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”.—[Official Report 13/1/14; c. 92.]
So if Parliament granted Royal Assent next month, the earliest that the provisions could take effect is May 2016. However, this timetable is complicated by the fact that the Minister for Employment and Consumer Affairs gave an assurance in the other place that the Government will undertake a public consultation prior to commencement on the order that will set out who is eligible to be an assurer. In a recent letter, the noble Viscount also announced that the Government will use this consultation to inform the development of guidance for employers and employees, to support implementation, and he will be seeking further evidence to revise and republish the impact assessment before commencement. That was agreed when we were discussing the Bill earlier.
Our point at Report was that this section of the Bill will operate successfully only if the legislation gives the unions, and particularly the larger unions, adequate time to comply with the requirements in a way that is cost-effective, economical and practical from their point of view. Under questioning from my noble friend Lord Monks, the noble Viscount conceded 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”.—[Official Report 13/1/14; c.92.]
He also mentioned that there were ongoing discussions with the TUC and others.
That is the background to this amendment. My noble friend Lord Monks and I had a further meeting with the Minister when he confirmed that the department did want to adjust the timetable for the unions to comply. In a letter following the meeting, the noble Viscount wrote:
“Further to concerns raised about the time unions will require to prepare for the new requirements, and discussion both at Lords Report and separately between BIS and the TUC, I can also now confirm that the Government intends to work towards commencement in April 2015”.
It is indeed a complex picture of calendars. Our understanding is that this will mean that no union will have to submit a membership audit certificate to the certification officer before August 2016.
I hope the Minister will accept this simple amendment, which does, I think, reflect the Government’s intention. If not, I hope he will use the opportunity to spell out precisely the timetable for the unions so that we are all clear about what is required.
In closing, while we on this side of the House deplore this part of the Bill, which places costly and unnecessary burdens on the larger unions and poses a threat to the security of their data, the noble Viscount has, as usual, been unfailingly courteous to all of us who spoke in this debate, and he and the Bill team have been able to assist us on all our queries over these last few months. We thank him for that.
Lord Monks (Lab)
My Lords, I support the remarks of my noble friend Lord Stevenson. I hope the Minister will be able to confirm the points that are being raised and in particular the points that have already been covered to a high degree in a letter to my noble friend Lord Stevenson.
We still do not know why we have Part 3. It is onerous, it is expensive and it is uncalled for. There is no evidence of any problem that it addresses. There is no evidence that any questions of public interest about union membership cannot be addressed by perfectly adequate existing remedies, particularly the existence of independent scrutineers in ballots. There is no information about who wants this Bill, who has been pressing for it or what lobby is behind it. Transparency, which is in the title, certainly does not extend to the reasons why this part of the Bill exists. We simply do not know. We do not know who thinks this is deserving of public interest. The Government have still to explain that. I hope that one day—perhaps not today—we shall get an explanation of what this was really for and what it was all about.
This morning I received a petition organised by the TUC and others. It is signed anonymously by nearly 12,000 people. They do not give their names, they give their occupation and location details. The trade unions have got the information about their names. The individuals trusted the unions with this information. They do not trust these public officials who the Bill proposes to turn loose on union membership records. This is not an academic issue. We currently have over 2,000 cases in the construction industry of allegations of blacklisting—of people who have been out of work, in some cases for years, because of misuse of confidential information, allegedly by some of the most prestigious names in the construction industry.
This part of the Bill has no practical value. I regret it. I hope the Minister can confirm now that the problems, at least in terms of its introduction, will be eased. We do not respect Part 3 because we do not know why we have got it. We do respect the Minister and the courteous way in which he has dealt with us. I hope that next time he comes to the House with something about trade unions and employment, he has a real issue to address rather than the fiction which is in this part of the Bill.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)
My Lords, first, I take this opportunity to thank all noble Lords who have provided thoughtful and constructive contributions to debate throughout the passage of Part 3 of the Bill. I personally understand how sensitive many of these issues—some of which the noble Lord, Lord Monks, has iterated just now—are to some noble Lords. In particular, but by no means exclusively, I thank the noble Lord, Lord Stevenson of Balmacara, for his kind words earlier; the noble Lords, Lord Monks, Lord Whitty, Lord Beecham and Lord Lea of Crondall; and the noble Baronesses, Lady Donaghy, Lady Turner and Lady Drake. I also thank my noble friends Lord Tyler and Lord Balfe and, in particular, my noble friend Lord Cormack, whose brief contribution I failed to acknowledge on Report. Finally, I give my sincere thanks to the Bill team for all their hard work.
I know that the intention behind the amendment of the noble Lord, Lord Stevenson, is to probe the Government’s plans for commencement of Part 3 and to ensure that trade unions are given sufficient time to be able to comply with changes requiring them to report annually on their membership registers. On Report, I offered to meet the noble Lords, Lord Stevenson and Lord Monks, to discuss this matter in more detail. Indeed, as they alluded to, that meeting took place two days following Report, on 15 January. Noble Lords may like to be reminded that, on Report, I suggested that the earliest the provisions would be commenced was October 2014. I am pleased that I was able to say at the meeting last week, and can confirm to the House today, that commencement will not occur before April 2015. This follows careful consideration of what has been said during the parliamentary stages and concerns raised during the BIS consultation, as well as discussions between the Secretary of State for Business, Innovation and Skills and Frances O’Grady, the general secretary of the TUC.
Commencement in April 2015 would mean that the very earliest any trade union would be required to submit a membership audit certificate to the certification officer would be August 2016. In practice, it is likely to be later than that for many unions, as many have a calendar reporting year and would not be required to submit their first certificate until June 2017. Noble Lords will recall that this is because unions will submit a membership audit certificate for the first full reporting year after the changes become law. The 17-month period that I referred to on Report is a combination of the union’s 12-month reporting period and the five months that is allowed after that period to submit the annual return.
I hope that this thoroughly reassures noble Lords as, in the meeting that I had with the noble Lords, Lord Stevenson and Lord Monks, I was led to believe that the reassurances that I personally gave were accepted. However, we will continue to work closely with trade unions as we head towards commencement, in particular by discussing with them the guidance that will be needed as well as consulting on the draft order that identifies eligibility to be an assurer. I believe that an April 2015 commencement date will give trade unions the time that they need to prepare and to amend their rules, and understand that the general secretary of the TUC agreed that this was achievable. I have written to the noble Lords, Lord Stevenson and Lord Monks, and placed copies in the Libraries of both Houses confirming this. The Secretary of State has written in similar terms to Frances O’Grady. I hope therefore that the noble Lord is reassured and that he will withdraw his amendment.
Lord Stevenson of Balmacara
My Lords, I thank the Minister for his very full response to our amendment. I am obviously sad that he will not accept the amendment as laid, as it seems to exactly mirror what he has announced, but maybe these are days when the Government do not want to see too many concessions being scored, so I understand the problems. Assuming that what he has said is exactly what we think it is, and given that we have letters and documentation to support that and that letters are also being written separately to the TUC confirming it, I beg leave to withdraw the amendment.
“Power to make consequential provision
(1) The Minister may by order made by statutory instrument make provision consequential on any provision of Part 2 or section .
(2) An order under this section—
(a) may include provision amending or modifying any provision of or made under PPERA 2000 (including any provision inserted by this Act),(b) may include incidental, supplementary, transitional, transitory or saving provision, and(c) may make different provision for different purposes or cases or for different areas.(3) A statutory instrument containing an order under this section that amends or modifies any provision of PPERA 2000 may not be made unless a draft of the instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.
(4) Any other statutory instrument containing an order under this section is subject to annulment in pursuance of a resolution of either House of Parliament.
(5) No order may be made under this section after the date of the poll for the first relevant parliamentary general election.
(6) In this section—
“the first relevant parliamentary general election” has the same meaning as in section ;
“the Minister” means the Secretary of State or the Lord President of the Council;
“PPERA 2000” means the Political Parties, Elections and Referendums Act 2000.”
Lord Wallace of Tankerness
My Lords, Amendment 24 introduces a power to make any provision consequential on Part 2 by order. At the outset, I wish to reassure noble Lords that the power is narrow in scope and will only allow the Government to make consequential amendments—it would not allow the Government to amend the fundamental principles and provisions included within Part 2. Any changes to the primary legislation would be subject to the affirmative resolution process.
The power is also time-limited, so that it could only be used until the date of the next general election. I emphasise that I hope this power will not be needed, but I consider it prudent to insert it into the Bill. Indeed, Amendment 7, which has already been agreed to by your Lordships today, was a starred amendment on the Marshalled List because it came up even since the Government tabled our amendments on Friday. We believe that we have introduced a number of amendments of significant benefit to campaigners and we would not wish to risk them becoming ineffective for any technical reason.
The Electoral Commission says it is important that Ministers should consult it, at least informally, before using the power. We agree that it is important to consult the Electoral Commission. I assure the House that we will consult it before making an order under this power, and the commission has agreed with that approach. Should the commission make a recommendation to use this power, we will consider it extremely carefully, but the circumstances in which we anticipate the need for this power would be to deal with any minor or technical drafting changes that are identified to ensure that the legislation is effective. They may be identified by the Electoral Commission or by officials or lawyers in government, and it would be counterproductive to suggest that only a commission recommendation could justify the use of this consequential provision. I beg to move.
Lord Horam (Con)
My Lords, I remind the House that I am a member of the Electoral Commission. This new clause gives the Government the power to deal with any consequences of the Bill that turn out to be radically different from those intended. Such consequences may indeed include the workload and the efficacy of the Electoral Commission, which has been greatly commented on today and in previous debates. The noble Baroness, Lady Mallalieu, talked about headaches and nightmares for the Electoral Commission. I hope it is not quite as bad as that but I appreciate her point. My noble friend Lord Cormack called, in the right spirit, for sensible and simple advice from the Electoral Commission. Given the hideous complexity of the Bill, that is more than ever necessary in this case.
I wish to draw the Minister’s attention to a point about the consequences for the workload and efficacy of the Electoral Commission. Clause 38 alters the legal language in which the remit of the Electoral Commission is incorporated. The Government have done this without any prior consultation with the Electoral Commission. This non-consultation, while fairly common in this Bill, is unusual generally in legislation and is doubly so when one considers that the Electoral Commission is not a government body but one that reports to Parliament through the Speaker of the House of Commons. It is deliberately independent of government yet the Government have altered the wording of its remit without any prior consultation with the Electoral Commission or with Parliament.
The Lords Constitution Committee noted that the regulatory duties of the Electoral Commission had been extended and advised that:
“The House may wish to consider the implications”
of that. The Political and Constitutional Reform Committee in the other place actually said that the clause should be withdrawn, pending consultation with the Electoral Commission. Of course, that has not happened.
It is fair to say that the Government’s motives in doing this were well intended but, as has often been said, the road to hell is paved with good intentions. The Government’s contention is that the change in emphasis of the Electoral Commission’s remit provides reassurance to non-party campaigners and the Electoral Commission itself that its role and responsibilities are important and necessary and that it has the appropriate statutory backing.
That is commendable but, on closer scrutiny of the Bill, it is not helpful. The main thing Clause 38 does is to change “general function” to “duties” and change taking “appropriate steps” to taking “all reasonable steps”. The problem with this is that it reduces the flexibility of the Electoral Commission to deal with spurious or politically motivated allegations that are clearly unfounded. The lawyers in the House will appreciate the difference between “appropriate” and “all reasonable” steps. The problem is compounded by the fact that, as a result of the Bill, many more campaigners are likely to be regulated, as has been acknowledged by the Government and other speakers. Any allegations may peak at the climax of the election and thus lead to confusion and loss of confidence in the new regime.
As has been acknowledged, many provisions are untested. On the one hand, the Government are giving the Electoral Commission more to do; on the other, they are making it harder to deal with simple and unsubstantiated cases quickly and cost-effectively. I am sorry to raise this point so late in the deliberations on this Bill, but I think that the Electoral Commission has shown admirable self-restraint in wanting the House to concentrate on the content of the Bill rather than on the problems that it may have in enforcing it and regulating subsequently. It is important to raise that point before the Bill is finalised here. I would therefore be grateful if the Minister would ensure that the Government talked to the Electoral Commission about this problem, which may occur over the next few months, and if necessary take corrective action by means of the powers which they are taking under this new clause.
Finally, perhaps I may say as a new Member of your Lordships’ House that the debates on this Bill have brilliantly illustrated this House’s role as a scrutineer of legislation. The Bill has been much improved as a result of the House’s efforts, and pride of place in that respect must go to the noble and right reverend Lord, Lord Harries, and his supporters on the Commission on Civil Society. They have, in common parlance, played a blinder.
Occasionally, their supporters outside the House have gone over the top. A certain co-ordinated “holier than thou” attitude has sometimes been apparent. I have lost count of the number of campaigners who have told me in identical words, “This is a deeply unpopular Bill the need for which has yet to be substantiated”. Letter after letter contained that particular clause; they could have been a little more differentiated in the way in which they approached this issue. Those campaigners have also attempted to portray themselves as defenders of democracy. Actually, in my view, it is the Government who are in this case the defender of democracy. As my noble friends Lady Williams and Lord Tyler have said in a Guardian article, this Bill has a noble intent, which is to defend the democratic process from distortion by excessive interference by outside interest groups. Quite rightly, the Government want to make the electoral process as level a playing field as possible. The noble Lord, Lord Martin of Springburn, whose great expertise in this area we acknowledge, made that point forcefully in the previous debate. The Government have also shown a creditable willingness to be flexible, having originally consulted too little and drawn the Bill too tightly. I commend my noble friends for that.
The end result, I believe—and I believe that it is the view also of the Electoral Commission—is a Bill which is workable. If it proves that the unintended consequences can be dealt with by a review process, that should happen and I commend my noble friends on making provision for it. I therefore commend them on the way in which they have handled the Bill in its totality.
Lord Campbell-Savours
My Lords, is there a connection between the substantial powers inherent in the new clause proposed in government Amendment 24 and the fact that the Bill is to be returned to the Commons with there being inadequate time for substantial consideration of potential Commons amendments?
Lord Harries of Pentregarth
My Lords, concerns have been expressed about this government amendment allowing a Minister to have these powers on an Act which will go to the very heart of democracy—they are rightly called Henry VIII powers, I believe. The Government have given assurances that these powers are strictly limited and that they will consult the Electoral Commission. In view of the lessons learnt as a result of this Bill going through the two Houses, they may think that it is worth consulting more widely if they feel the need to bring orders before this House. It should be put on record that concerns have been expressed, but we are grateful, from what the Minister said, that the powers are strictly limited.
Lord Cormack
My Lords, very briefly, we are much indebted to my noble friend Lord Horam for what he said. He has clearly demonstrated admirable restraint during this Bill, knowing—as he has now made clear—that the Electoral Commission was far from happy and that he, as a member of that commission, shared at least some of that unhappiness.
This is an object lesson in how not to do things. I warmly commend my noble friend and my noble and learned friend—the brace of Lord Wallaces—for all they have done to make a very bad Bill palatable. They have exercised infinite patience, great care and unfailing courtesy, and we should all be extremely grateful for that. But that does not absolve the Government from blame for bringing in a Bill of this complexity in this way. I have said before, and will say again for the final time on this Bill, that if ever a Bill cried out for pre-legislative scrutiny it was this one. I sincerely hope that that lesson has been learned and that in future complex Bills of this nature, touching as they do on constitutional and parliamentary issues, will have the benefit of pre-legislative scrutiny. We have had a series of patch, make-do and mend amendments, many of them introduced by the noble and learned Lord, Lord Wallace, himself. I repeat: we are grateful for that, but that is not a substitute for a carefully drawn-up Bill that really meets a need.
My noble friend Lord Horam touched on the complexity of the Bill. Legislation should be readily understandable by those to whom it applies. When one brings in a whole range of new provisions that many of the bodies with which the noble and right reverend Lord, Lord Harries, has been involved never anticipated, they really should have the benefit of consultation. We now have placed before us what is a bit of a catch-all, Henry VIII clause. In principle I do not like Henry VIII clauses, but I concede that in this particular Bill something like it is probably necessary.
I am grateful to my noble and learned friend for responding so positively to the suggestion I made earlier about a round-table conference. That is good and he rightly said in that context that he wanted to go beyond the Electoral Commission. It is also very necessary that there are detailed discussions with the Electoral Commission directly. I suggest those involve leaders of the Opposition, too, because this Bill is likely to last quite a long time. As it is worked through, we need to make sure that all—or most of—the things we have said we feared do not come to pass.
My final words on the Bill in this House are that this has been an interesting exercise. I do not believe that we have produced something truly worthy of the important subject, but I agree with my noble friend Lord Horam that we have been able to demonstrate the value of this House in making a very bad Bill palatable in the way we have.
Baroness Thomas of Winchester (LD)
My Lords, I dip the tiniest of toes into the waters of this Bill, not as chair of the Delegated Powers and Regulatory Reform Committee but as somebody who knows a tiny bit about Henry VIII clauses, just to reassure noble Lords that this kind of power is well precedented and here it is very narrowly drawn. The House need not worry that the Government are in some way exceeding their powers or doing something they should not on this occasion. That is all I wish to say on this, but it has been very instructive to sit here and listen to the last few hours of debate on the Bill.
Lord Tyler
My Lords, my noble friend Lady Thomas of Winchester said, with typical modesty, that she had only a tiny knowledge, but she has more knowledge than most of us present in the House put together on the subject of Henry VIII clauses. I entirely endorse what she said. In fact, I do not think this is a Henry VIII clause because of its very limited impact. I think it is more, in terms of longevity, like an Edward VI clause, as Henry VIII ruled for quite a long time whereas Edward VI ruled for a relatively short time. It is more likely that that is the more appropriate historical analogy. As my noble friend just said, the power is only about consequential provisions; it includes the affirmative procedure; it is effectively sun-setted, because it is limited to the general election; and it is well precedented.
My noble friend Lord Cormack said just now that these were his final words on the Bill. He presumably assumes that the other place tomorrow will accept all our amendments or produce amendments in lieu that are so acceptable all over your Lordships’ House that we do not return to the Bill again. Let me be as optimistic as he is, just for a minute, and assume that that is the case. I therefore want to place on record my gratitude and congratulations to noble friends all around the House who have done some hugely important work on what I think is now a much better Bill and a necessary Bill. I am not sure that everybody in the House agrees with that, but I certainly said at Second Reading that I thought it was necessary and it certainly has improved.
I really think that we owe a very considerable debt to the Wallace duet. Ministers in the other place should perhaps take lessons from the way in which they have responded to very important proposed improvements to this Bill, which leaves this place in a much better state than when it arrived and that is very much to their credit. I am grateful to them for the way in which they consulted many Members of your Lordships’ House.
I think the noble and right reverend Lord, Lord Harries, would agree that the engagement of a large number of other people outwith the Westminster bubble—outside Parliament—in this process was actually a plus for your Lordships’ House. We must recognise that they were stirred by concerns and anxieties that were very real. I wish it would happen on many other occasions with many other legislative proposals. We may need to build on that in future. Perhaps it may be that those organisations will take more notice in future of the way in which your Lordships’ House scrutinises legislation, and that must be to the good reputation of Parliament as a whole.
I am glad that I have had the opportunity to contribute at all stages of this Bill and I welcome the way it is now leaving this House. That is due not only to the assiduous way in which many Members of the House contributed to these debates but to the engagement of a large number of others outside the House. That is a good result.
Baroness Hayter of Kentish Town
My Lords, we have some concerns about this power, but if we are given the reassurance that the Electoral Commission will be consulted and involved, that will reduce those concerns. I think the noble Baroness, Lady Thomas, has also added her imprimatur to that. I am sure that the Government will listen to the sage advice that they get from the Electoral Commission, should this be necessary.
I am much more optimistic than the noble Lord, Lord Tyler, so I think this will be our last outing on this Bill. I am sure that the good offices of the noble Lords opposite will be able to ensure that all is accepted down the other end tomorrow and they will not send it back as ping-pong. That is my assumption. Having already learnt, from the noble Lord, Lord Horam, on Report, the words “harrying” and being “harried”—referring to the noble and right reverend Lord—I am not sure what being “wallaced” is, but I think it must mean being heard with sympathetic ears. In this case, of course, it was four sympathetic ears and not just two.
We have complained about the timing of this and the shortage of time. Our complaints are of nothing compared to what it must mean to the Bill team. We are about to finish with this, but they are now going to have to scuttle down and do the whole thing again. Therefore, not only for their efforts but for the time constraints we put on them, we should give them a big thank you.
I thank my colleagues, some of whom are here. My noble and learned friend Lord Morris and my noble friends Lady Lister, Lady Pitkeathley and Lady Mallalieu are just some of those who have contributed. I also make a small thank you to a newish member of our own team, Byron Orme. This was the first Bill which he saw through this House so perhaps we can also thank everyone who, by their umpteen amendments, have helped him learn how to do that. He has been superb for us.
I thank the third sector, which I do not think went over the top. I saw an enormous amount of practicality—certainly when we from this side of the House said, “Look, that amendment just isn’t on”, they would say, “All right”, and come back with some different words, which showed practicality and an involvement in the political process at its best. I also put my thanks to them for the briefing which they gave to us all, whether we agreed with it or not.
Lord Wallace of Tankerness
My Lords, it is almost inevitable that concerns are expressed when an amendment of this nature comes forward. That is a quite proper function of the House, and the Government should be made to justify putting forward such an amendment.
First, I say to the noble Lord, Lord Campbell-Savours, that the proposed clause has nothing whatever to do with the fact that there will be Commons consideration of Lords amendments tomorrow. The concern is that because the agreement on the provisions relating to coalitions came so late in the day, we want to be certain that we can deliver the policy which we reassured the campaign groups that we would deliver, and that if things emerge at a later stage, not necessarily in the next 24 hours, there will be an ability to do so. I am reassured by the comments of my noble friend Lady Thomas that, as clauses of this nature go, this one is limited and consequential. Indeed, it has a sunset clause and I also welcome the fact that this was noted by my noble friend Lord Tyler.
My noble friend Lord Horam raised the Electoral Commission’s remit, which is being amended by Clause 38. The Government believe it is appropriate to emphasise the importance of the commission’s regulatory role and to remove any potential understanding of its responsibilities. Clause 38 requires the commission to,
“take all reasonable steps to secure”,
campaigners’ compliance with campaigning rules. The Bill further provides for transparency of the commission’s work by introducing a new requirement for it to set out in its annual report what steps it has taken to secure compliance with the relevant provisions of PPERA. By requiring an account of its activities, the Government are seeking to make clear that the commission’s work is vital and that its regulatory approach is being empowered by the Bill.
The point was made by my noble friend Lord Horam, and I have heard it mooted in other quarters, too, that every small, malicious or vexatious complaint or query would have to be investigated. We do not agree, as the provision in Clause 38 imposing a duty on the Commission to investigate complaints does not mean that the commission would have to investigate complaints that it knows to be unfounded, malicious or vexatious. However, I believe that any change to the Electoral Commission’s remit could and should form part of the review of Part VI of PPERA, to which your Lordships have already agreed and which was the subject of further discussion earlier today.
In relation to the Electoral Commission, perhaps I might also reassure the noble Baroness, Lady Hayter, of what I said in moving this amendment. We agree that it is important to consult the Electoral Commission before any use of the powers in Amendment 24. I assure the House that that is indeed what we would do before making an order under this power. My noble friend Lord Horam suggested that the power in this amendment might be used with regard to any changes in the Electoral Commission’s remit. In disappointing him, perhaps I might reassure the rest of your Lordships that we think it unlikely that any changes to the commission’s remit could be considered as consequential provisions under this power, and therefore would not be within its scope. However, it would be appropriate if the review we discussed were to look at the remit of the Electoral Commission.
Finally, I take this opportunity on this last amendment to say thanks to many people but particularly to your Lordships’ House for the scrutiny which the Bill has had here. I can say without doubt that the Bill returns to the House of Commons much improved, and in doing so we have shown evidence of the value and merit of the revising role that this House undertakes, which it does with great seriousness.
I acknowledge with thanks the kind words that have been said about my noble friend Lord Wallace of Saltaire and me. In turn, I thank the noble and right reverend Lord, Lord Harries of Pentregarth, and the noble Baroness, Lady Mallalieu, for their excellent work on the Commission on Civil Society and Democratic Engagement. They have made a valuable contribution to the work that we have done in this House. Along with them and other members of the commission, I thank the many organisations which have engaged with us and them: third-parties and campaigning groups, charities and non-charities, all of which have made an important contribution. We have not necessarily always agreed, but they have contributed to making the Bill better.
I also thank those who have contributed in other ways through amendments and speeches: the noble and learned Lords, Lord Morris of Aberavon and Lord Hardie, my noble friends Lord Hodgson, Lord Horam, Lord Tyler and Lord Cormack and the noble Baroness, Lady Hayter, as well as the noble Baroness, Lady Royall, and the noble Lord, Lord Stevenson, who have at times contributed to our debates. Although there are many people in your Lordships’ House who have had experience as Members of Parliament, the noble Lord, Lord Martin of Springburn, brought a welcome reminder in his contributions that these are practical provisions which affect people who actually fight elections.
I also thank my noble friends on the ministerial Bench, Lord Wallace, Lord Gardiner of Kimball and Lord Younger of Leckie. I also acknowledge the tribute paid by the noble Baroness, Lady Hayter, to the officials—some in the Box and some not. On their behalf—because, obviously, they cannot speak—I express appreciation of that and add mine. They have worked with considerable equanimity and good humour. At least one of them attended almost every meeting which we have had with groups and they have assisted my colleagues on the ministerial team greatly. I certainly very much value the work that they have done and the very long hours, including over Christmas and New Year—one sometimes noticed the times and dates when e-mails were sent. I express appreciation for that.
Having said that, I very much hope that your Lordships will agree to the amendment.
Lord Harries of Pentregarth
My Lords, before the noble and learned Lord sits down, I gave a range of thanks before and I shall not repeat them, but there is one group of people who have not been mentioned and thanked. For a person who is not a very experienced parliamentarian, such as me, those people been particularly helpful. They are the staff of the Public Bill Office. They have been very helpful in guiding me on what might be allowable and possible. I express my thanks on behalf of others to them.
Lord Morris of Aberavon
Local Audit and Accountability Bill [HL]
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 1 to 14.
“(b) by an auditor (a “local auditor”) appointed in accordance with this
Act or provision made under it.”
“(2A) Subsection (2) applies to a provision of or made under this Act even if it makes specific provision about a smaller authority to which the regulations apply.”
“(aa) make provision about the persons that may be specified by the Secretary of State;”
“(d) confer functions on a specified person, including in relation to—
(i) the appointment of local auditors under the regulations,
(ii)the activities of such auditors, and
(iii) the resignation or removal from office of such auditors;”
“(f) make provision for the appointment of a local auditor in relation to the accounts of a smaller authority to which arrangements within paragraph (a) apply where the specified person does not make an appointment under the regulations (and in particular for such an appointment to be made by the authority or the Secretary of State).”
“(b) make provision about the procedures to be followed in relation to opting into or out of those arrangements;
(c) impose duties on smaller authorities to which those arrangements apply, including duties as to—
(i) the payment of fees to a specified person, and
(ii) the provision of information to a specified person;
(d) make provision for the making of payments, in specified circumstances and by the smaller authorities to which those arrangements apply, to a fund of a specified kind for the purposes of meeting local auditors’ costs of a specified kind.
(4A) Provision made by regulations under subsection (1) by virtue of subsection
(4)(c)(i) may, in particular—
(a) provide for fees to be paid in accordance with a scale or scales of fees determined by a specified person, and
(b) provide for the payment in specified circumstances of a larger or smaller fee than is set out in the appropriate scale.”
“(ba) specifies the period for which the local auditor has been appointed,”
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, I beg to move that this House do agree with the Commons in their Amendments 1 to 14 en bloc. I shall speak also to the other amendments in this group, which amend the provisions for the appointment of local auditors.
Although I see that the Bill is not attracting a great deal of attention this afternoon, it is worth saying briefly that it increases local accountability and transparency, and helps local people to hold councils and local bodies to account for their spending decisions. The Bill is the final step in a programme of reforms to local audit that will result in an estimated £1.2 billion of savings over 10 years.
Before I go on to explain the amendments in this group, I pay tribute to my predecessor and noble friend Lady Hanham, who, as noble Lords will know, was responsible for taking this Bill through your Lordships’ House last year. All credit should go to my noble friend for amendments that the Government have accepted or are making to the Bill in response to debates in your Lordships’ House. I know that other noble Lords would want to join me in acknowledging her work on the Bill. I only regret that she is not in her place today. Indeed, because of the technical nature of the Bill, I perhaps regret that she is not at the Dispatch Box, but I will do my best.
Commons Amendments 1 to 13, 17, 31 and 33 would enable the development of sector-led collective procurement arrangements. They would allow the sector to come together and, if it wishes, to establish a body to procure auditors on behalf of local public bodies that choose to participate. These amendments fulfil a commitment made by the Government during Report in the Lords and reflect opposition amendments proposed both here and in the other place. The Government recognise the potential benefits of local authorities coming together jointly to procure their auditor as a means of achieving efficiencies and economies of scale and keeping audit fees low.
The Bill already allows two or more authorities jointly to procure their auditor. However, following calls from the sector—the Local Government Association in particular—and noble Lords, these amendments go further to allow for large-scale collective procurement led by a separate sector-led body.
As the Government have previously stated, any collective procurement arrangements established under these regulations will be voluntary. Local authorities will be able to choose to participate or to make their own appointment locally.
Commons Amendment 17 inserts into the Bill a new clause that will allow the sector to establish collective procurement arrangements. Under the new clause, the Government will, by regulations, make provision for certain authorities to have their auditor appointed by an “appointing person” specified by the Secretary of State. This will allow the Secretary of State to designate a sector-led body as an appointing person, and give them the necessary powers and duties to act as a collective procurement body. From now on, I will refer to the appointing person simply as the sector-led body.
Regulations will set out the process by which authorities choose to participate in sector-led arrangements, the process for specifying a sector-led body, and the powers, functions and duties of such a body. This would include, for example, a power to levy fees on opted-in authorities, and a corresponding duty on the body to consult before setting those fees.
Regulations under the new clause will also be able to modify other parts of the Act as they apply to authorities that have opted into the collective procurement arrangements. We intend to use this power to ensure that, where necessary, other provisions reflect the different appointment process for these authorities. For example, authorities that opt in and do not make their own appointment will not need to establish an independent auditor panel.
Commons Amendment 31 provides that regulations made under this new clause will be subject to the affirmative procedure. The Government also intend to consult publicly on draft regulations before they are made.
Commons Amendments 1 to 3, 13 and 33 would make minor changes to the definition of a local auditor in the Bill. These minor amendments are necessary in the light of the wider amendment to enable sector-led collective procurement. They reflect the fact that an authority could in future have their auditor appointed by a sector-led body, rather than make an appointment itself.
Commons Amendments 4 to 12 would make a number of minor changes to the existing provisions in the Bill that already allow for sector-led collective procurement for smaller authorities. They ensure consistency with the new clause introduced by Amendment 17, and clarify the Government’s powers to make regulations in relation to such arrangements.
Commons Amendment 14 will ensure that the term of an auditor’s appointment is confirmed publicly when the appointment is made. It will support greater transparency, and ensure that the public and audit firms know when the existing audit contract for a local body is due to end. The amendment reflects previous discussions on this matter both here and in the other place. Having considered the case for this further, the Government accept that it would be useful to put the matter beyond doubt through this amendment. The noble Lord, Lord McKenzie, proposed a similar amendment in Committee and will, I hope, therefore welcome this amendment today.
Amendment 46 is a minor amendment that would clarify that existing legislative requirements will continue to apply to audit committees of health service bodies where they act as the independent auditor panel. This will ensure that the operation of legislation governing health body audit committees is not unintentionally affected by this Bill.
There has been strong support for a collective approach to auditor procurement and appointment from all sides of the House during the passage of the Bill, and I hope these amendments will be welcomed.
Lord Tope (LD)
My Lords, I begin too by thanking and joining the Minister in her tribute to her predecessor, the noble Baroness, Lady Hanham. I think we would agree, on all sides of the House, that she was always willing to listen—not always to agree, and indeed sometimes she might have agreed but might not have been able to say so. Certainly she would always listen, and if a reasonable case was made she would do her best to see that, so I thank her for that.
I wish the Minister every success, having picked up the baton. She commented that there was not huge interest in this Bill. She might not be aware that perhaps that was in part because, at the start of this Bill, the Secretary of State was reported to have said of this Bill, “It is not as interesting as it sounds”. Those of us who have worked on the Bill tirelessly through the summer would not necessarily echo the reported comments of the Secretary of the State.
Often—not always—with debates on local government legislation, we genuinely try to improve the legislation, whether we like it or not, to make it more workable. This is a very good example of how that success has been achieved. I reminded myself by looking back to our Second Reading debate in this House back in the summer. Indeed, the issue of joint procurement was raised at that stage. It received, I think it is fair to say, a sympathetic response, and here we come to the last stage of the Bill, when we are actually getting what we on all sides of the House were seeking.
This is a very useful and important measure. It is voluntary. Local authorities are given the opportunity to opt in to a shared arrangement. That was what we were seeking. It is not mandatory. They are not required, but they are able—exactly as we want—to choose what is best for their particular circumstances, so I thank the Minister. I welcome these amendments and I feel confident that they will have a general welcome on all sides of the House.
Lord McKenzie of Luton (Lab)
My Lords, let me welcome the Minister, the noble Baroness, Lady Stowell, to her first, and probably last, foray into the delights of the Bill. I am sure, deep down, she regrets not having had the opportunity to be engaged in our earlier detailed debates.
Perhaps, before a more detailed comment on this group of Commons amendments, I should acknowledge that much of what is before us this afternoon springs from matters that were pressed on the Government by noble Lords—Lib Dems, as well as ourselves and others. Like others, we pay tribute to the noble Baroness, Lady Hanham, for the way in which she was receptive to these matters and to the Government for fulfilling the commitments made by that Minister.
These amendments also bear the hallmark of the diligence of my honourable friend Andy Sawford in another place. A key amendment in this group is Amendment 17, which as the Minister has explained gives the Secretary of State the power to introduce regulations for the development of a sector-led approach to collective procurement. Amendment 31 properly requires the regulations to follow the affirmative procedure.
The retention of a collective procurement capability was one of the major issues that we debated. Of course, the detail of what might be forthcoming will have to await the regulations. It was pressed, among others, by the LGA and the National Association of Local Councils. This impetus was driven by the significant savings that the Audit Commission had achieved in its outsourcing of audit contracts. Of course, the contracts in question run to 2017 and can be extended. I do not know whether the Minister can confirm, under these proposed arrangements, who will make the decision about the extension of those contracts. Any different arrangements will happen some time in the future.
It is understood that the Government’s position is that they will not themselves use these regulations to set up another entity, but will respond to any sector-led approach that might arise. Discussions have already taken place with the LGA.
Baroness Stowell of Beeston
My Lords, I am grateful to my noble friend Lord Tope and to the noble Lord, Lord McKenzie, for welcoming the amendments that we are currently discussing. I certainly agree with my noble friend Lord Tope that while the matters that come out of the DCLG might not always attract widespread interest, they are always important. I am glad to be responsible for this late stage of this piece of legislation.
The noble Lord, Lord McKenzie, asked some specific points which I am happy to respond to. On his question on whether Amendment 6 changes or narrows who might be specified as concerns the appointment of auditors of smaller authorities, I can be clear that it is not the Government’s intention to do so. We do not intend to use this power to make any further requirements which would have that effect, or under the new Clause 17 to principal authorities.
The noble Lord also asked whether it could be confirmed that functions of the auditor appointment, such as its powers to specify fees or scale of fees, could be included in Amendment 7. I reassure the noble Lord that the amendments to Clause 5 retain provision for the specified person to set a scale or scales of fees. Of the original drafting of provisions in Clause 5 relating to the setting of fees by the person specified by the Secretary of State to appoint auditors to smaller authorities, Clause 5(3)(d) is deleted by Amendment 7. These provisions are replaced by those in Amendment 10. The new provisions unpack the arrangements relating to fees to clarify that the regulations will impose duties on authorities which are opted into the specified persons’ regime to pay fees in accordance with a scale or scales of fees determined by the specified person.
More generally, on the questions of the noble Lord, Lord McKenzie, about audit contracts and transitional arrangements, I reiterate the importance that the Government place on ensuring that the Audit Commission’s existing audit contracts continue to be well managed following its closure. These contracts have a combined annual value of £85 million and will continue to run until 2017, at which point we intend to introduce local or sector-led appointment of auditors. Noble Lords will be aware, however, that the contacts include provision to allow them to be extended for a further three years to 2020. While it remains our intention to introduce local appointment from 2017, no formal decision is needed on extension until closer to the scheduled end of the contracts. At that point, this will be a decision for the Government to take in conjunction with the interim body managing the contracts.
Given the length of the existing contracts, we need to make sure that the organisation that manages these contracts in the period following closure of the commission and introduction of local appointment is capable of putting in place resilient governance and management arrangements. In consultation with the Audit Commission and other key government departments and delivery partners, my officials have agreed a set of criteria against which all options should be assessed. They are now working with counterparts in interested organisations and have shared a set of requirements, roles and responsibilities alongside an invitation to formalise a proposal to the department to perform the role of designated transitional body. Subject to further work with each of the organisations, proposals will then be evaluated against the agreed criteria and we plan on making a decision by the spring.
I should add some remarks on another topic which I was not sure whether the noble Lord had raised in his question to me; if he did not I should perhaps have covered it in my opening remarks. Grant certification is a further critical issue raised in both Houses during the passage of the Bill. When the commission closes, the few remaining grants requiring certification will be certified through arrangements agreed between grant-paying bodies, the recipients and their auditors. There is one exception to these arrangements: the Audit Commission will continue to make arrangements to certify the housing benefit subsidy scheme for the 2014-15 return, due to its complexity and size, before the move to universal credit. However, work to complete this and oversee auditors’ work in autumn 2015 will then need to be undertaken by the designated transitional body. We are therefore drawing on the commission’s expertise to ensure that appropriate measures are put in place to support this work and also that Section 28 of the Audit Commission Act is saved so the designated transitional body can take on this function.
Finally, I will talk briefly about the future of the commission’s value-for-money profiles. The LGA has expressed an interest in taking on this tool and we are in discussions with it, the Audit Commission and others, including the National Audit Office. We are therefore currently considering the future options for the profiles with these partners with the aim of making a decision by the spring.
I hope that by providing this additional information I am able to reassure noble Lords that we are working towards a resolution on each of these points and intend to reach a decision on outstanding transitional issues well in advance of the Audit Commission’s closure. I also take this opportunity to thank the Audit Commission for its assistance and support in advancing these matters with my officials and other interested parties. We have been very grateful for its input.
With all that additional information, I hope that I have been able to answer any outstanding questions from noble Lords.
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 15 and 16.
“(8) The auditor panel of a parish meeting may only exercise the function in subsection (2) in relation to the chairman of the parish meeting or the proper officer of the district council within whose area the parish lies.”
“(7) A decision to enter into a liability limitation agreement between a local auditor and a parish meeting must be taken by the parish meeting itself (and not by its chairman on behalf of the parish meeting).”
Baroness Stowell of Beeston
My Lords, I shall speak also to the other amendments in this group. These amendments clarify how the audit-related functions in the Bill will sit in the case of a parish meeting where there is no separate parish council. Where new functions are created as a consequence of the local appointment of auditors, the amendments clarify where those functions will sit for a parish meeting. The amendments are relatively minor in nature.
Unlike a parish council, a parish meeting has only one elected member: its chairman. However, all local government electors in the parish are entitled to vote at a parish meeting and are therefore, arguably, members. Where there is no separate parish council, the chairman and the proper officer of the district are together known as the parish trustees, and the parish trustees are the body corporate of the parish meeting.
The principle we have used is that, where a function is of an administrative nature—which is the case in the majority of functions—it would be exercised by the chairman on behalf of the parish meeting. For example, the chairman will be responsible for ensuring that a local government elector may inspect the statement of accounts. This rule is set out in Amendment 36. Where a function is of a deliberative or decision-making nature, it would sit with the parish meeting itself rather than be delegated to the chairman. For example, the decision to appoint an auditor, and the consideration of a report in the public interest, will sit with the parish meeting itself. These exceptions to the general rule are set out in Amendments 16, 44, 45, 48, 53, 68 and 71.
Amendments 15, 19 and 20 would ensure that certain duties that would otherwise be placed on members of the parish meeting are restricted to the chairman and the proper officer of the district and are not placed on all local government electors. These functions include supplying information and attending meetings with the auditor. This approach is consistent with the treatment of parish councils in the Bill, where the functions are placed only on council members and do not extend to local government electors.
Amendments 62 and 69 would remove disproportionately onerous and costly burdens from the chairman of a parish meeting. He will not be required to supply a copy of a report in the public interest to all local government electors. Local government electors will be able to access a report in the public interest or a written recommendation under provisions made in Clause 24. Amendment 34 would insert a definition of “parish meeting” into the Bill and Amendments 42 and 55 would reflect that definition.
Finally, Amendments 60, 63 and 66 are tidying amendments. These are redundant in the light of Section 231 of the Local Government Act 1972, which provides that where a document is to be served on a parish meeting, it should be addressed to the chairman.
I should also make clear to noble Lords that we have discussed these amendments with the smaller authority sector, and I confirm that the National Association of Local Councils is content with them. On that basis, I beg to move.
The Earl of Lytton (CB)
My Lords, I welcome these amendments. I apologise to the Minister for not being in my place for the previous group of amendments; I had intended to be in the Chamber when she spoke but unfortunately had a guest with me.
I can confirm that this group of amendments seems eminently sensible, particularly as they deal with the very smallest of the parish family, if I can call it that. I welcome the pragmatic approach that has been put forward here.
Perhaps I may say also that, in general, I am much indebted to the noble Baroness, and to her predecessor, for the way in which the amendments were taken from this House after all the consideration that we had, and other things were added in the other place, which on the whole have considerably enriched the Bill. I am extremely grateful for that, and the parish and town council movement—I am proud to be the president of the national association—warmly welcomes the general direction of travel. I therefore welcome this group of amendments, in particular.
Lord McKenzie of Luton
My Lords, as we have heard, this group of amendments addresses the application of the Bill to a parish meeting where there is no separate parish council. A parish meeting has only one elected member—its chairman—although it is suggested that all local government electors in the parish who are entitled to vote are members. There are more than 11,000 parish meetings for which the Audit Commission currently appoints auditors.
We accept the necessity of clarifying how various functions created by the Bill should be applied to parish meetings, and the principle adopted—that administrative functions should be exercised by the chairman on behalf of the parish meeting, and deliberative or decision-making functions should be exercised by the parish meeting itself—has our support. We note that NALC supports the amendments, and we do, too.
Baroness Stowell of Beeston
I am grateful both to the noble Lord, Lord McKenzie, and to the noble Earl, Lord Lytton, for welcoming the amendments. I shall not repeat what I said at the beginning of our consideration of the amendments, but will simply say to the noble Earl that he has echoed my tribute to my noble friend and predecessor Lady Hanham, and I wholly concur with his comments.
Earl Attlee
That this House do agree with the Commons in their Amendment 17.
“Appointment of auditor by specified person
(1) The Secretary of State may by regulations make provision for and in connection with the appointment, by a person (an “appointing person”) specified by the Secretary of State, of a local auditor to audit the accounts of a relevant authority to which the regulations apply.
(2) Regulations under subsection (1) may, in particular—
(a) make provision about the persons that may be specified as an appointing person;
(b) make provision about the procedure for specifying a person and for an appointing person’s specification to come to an end in prescribed circumstances;
(c) make provision about the consequences of an appointing person’s specification coming to an end, including—
(i) for the exercise of functions by the Secretary of State, and
(ii) for the transfer of the person’s rights and liabilities arising by virtue of the regulations to the Secretary of State or another appointing person;
(d) confer functions on an appointing person, including in relation to—
(i) the appointment of local auditors under the regulations,
(ii) the activities of such auditors, and
(iii) the resignation or removal from office of such auditors;
(e) require an appointing person to consult prescribed persons before exercising prescribed functions.
(3) Regulations under subsection (1) may, in particular—
(a) make provision about the relevant authorities to which the arrangements under the regulations apply, including provision for them to apply to an authority that has opted into them or has not opted out of them;
(b) make provision about the procedures to be followed in relation to opting into or out of those arrangements;
(c) impose duties on relevant authorities to which those arrangements apply, including duties as to—
(i) the payment of fees to the appointing person in respect of an audit carried out by a local auditor appointed by that person, and
(ii) the provision of information to the appointing person.
(4) Provision made by regulations under subsection (1) by virtue of subsection (3)(c)(i) may, in particular—
(a) provide for fees to be paid in accordance with a scale or scales of fees specified by the appointing person, and
(b) provide for the payment in prescribed circumstances of a larger or smaller fee than is specified by the appropriate scale.
(5) Regulations under subsection (1) may, in particular, make provision about the functions of a local auditor appointed by an appointing person.
(6) Regulations under subsection (1) may, in particular, make provision for the appointment of a local auditor of the accounts of a relevant authority to which arrangements made by the regulations apply where the appointing person does not make an appointment under the regulations.
(7) Provision made by regulations under subsection (1) by virtue of subsection (6) may, in particular, provide for the appointment to be made by the authority or the Secretary of State.
(8) Regulations under subsection (1) may, in particular provide—
(a) for any provision of, or made under, Part 3 of this Act not to apply, or to apply with modifications, in relation to a relevant authority to which regulations under that subsection apply;
(b) for any other provision of, or made under, this Act not to apply, or to apply with modifications, in consequence of provision made by regulations under that subsection.
(9) Subsection (8) applies to a provision of or made under this Act even if it makes specific provision about a relevant authority to which the regulations apply.
(10) In this section “prescribed” means prescribed by regulations under subsection (1).”
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendment 18.
“(a) enter on the accounts a certificate that the auditor has completed the audit in accordance with this Act, and
(b) make a report in accordance with subsection (5).
(5) A report under subsection (4)(b)—
(a) must contain the auditor’s opinion on the accounts, including on the matters in subsection (1) or, as the case may be, subsection (3), but
(b) must not contain the auditor’s opinion on the matter in subsection (1)(c) or (3)(c) if the auditor is satisfied as to that matter.”
Baroness Stowell of Beeston
My Lords, the amendments in this group make a number of clarifications to Part 5 of the Bill, which sets out the duties of the auditor. Amendment 18 requires the auditors of health service bodies to provide a report on all the matters on which they have a duty to satisfy themselves—other than value for money, where they will have to include their opinion in the report only if they are not satisfied on the matter.
As the Bill stands, the auditor is required to provide a certificate to confirm that the audit has been completed. In practice, auditors of health service bodies already report on all the matters on which they are required to satisfy themselves. The amendment would make this an explicit requirement, in order to provide assurance to the accounting officer and to Parliament that budgets have been used for the purposes intended by Parliament.
Commons Amendments 21 to 23 would clarify the process and timescales for a local elector to make an appeal, following an auditor’s decision not to make an application to the court that an item of account is unlawful. The amendments reflect the current process and provide a local elector with six weeks to require the auditor to provide a statement of reasons for their decision not to apply to the court, and then a further 21 days to appeal the auditor’s decision to the court.
Commons Amendments 24, 25 and 72 would enable local auditors to recover costs for their time in undertaking their main additional statutory audit duties under this Bill, where that work does not result in any formal action being taken. I will explain what the duties are in a moment.
We expect that contracts between authorities and auditors will set out how auditors’ costs are to be recovered. The Bill currently gives auditors an explicit right to recover reasonable costs from the audited body for their time in exercising some of their statutory duties—for example, when undertaking investigatory work that might lead to a public interest report but where, ultimately, one is not issued.
These further amendments enable auditors to recover reasonable costs for their time in investigating—but ultimately deciding not to take action—in relation to three of their statutory functions: first, whether to make an application to the court that an item of account is unlawful; secondly, whether to issue an advisory notice; and, thirdly, whether to apply for judicial review of an authority’s decision. This would ensure consistency in treatment of cost recovery for these functions, enabling local auditors to recover reasonable costs incurred in investigating issues that could result in them exercising their main statutory functions under the Bill.
Commons Amendments 59 and 61 would ensure that the Greater London Authority continues to be supplied with a copy of any public interest report or written recommendation made by the auditor of any of the authority’s functional bodies, following a recently proposed change in the way functional bodies are treated within the Greater London Authority’s group accounts. This change means that functional bodies may not, in future, be considered “connected entities” of the GLA under the Act.
The Bill requires that a copy of a public interest report or written recommendation on a body that is a “connected entity” of a relevant authority should be sent to that authority. However, the proposed change not to include functional bodies within the GLA’s group accounts would mean that they no longer met the definition of a connected entity and so would not fall under this requirement. These amendments therefore ensure that a similar requirement continues to apply to the GLA and its functional bodies, to ensure adequate transparency and scrutiny where such a report or recommendation is made. This is necessary given the close and unique relationship between the GLA and its functional bodies.
Further to this, Commons Amendments 64, 65 and 67 make minor drafting changes needed as a consequence of the Mayor’s Office for Policing and Crime ceasing to be a connected entity of the GLA. They do not change the policy position, but simply correct the drafting of the existing requirement that reports and recommendations on the Met Commissioner are considered by the Mayor’s Office for Policing and Crime.
Commons Amendments 70 and 73 are minor amendments, which apply the definition of “relevant authority concerned” to all the provisions relating to advisory notices, rather than just to paragraph 3 of Schedule 8. The “relevant authority concerned” is defined as the relevant authority to which, or to any officer of which, an advisory notice is addressed. After that comprehensive explanation of this group of amendments, I hope that noble Lords will feel able to accept them. I beg to move.
Lord Shipley (LD)
My Lords, I shall speak specifically to Amendment 18. I refer to the Explanatory Notes on the Commons amendments that have been published, and in particular to that on Amendment 18 in relation to health service bodies, which says that,
“an auditor will have to provide an opinion on value for money only if the auditor is not satisfied in respect of that matter”.
I want to raise the issue of health and well-being boards, which are shared across the health service and local authorities, in terms of identifying how they can work more closely together and how best value can be achieved.
My question is: who audits the health and well-being boards? They have a clear role in driving improved health outcomes. I realise that different bodies are spending money, and are therefore audited for that role, but there is a broader question about how those boards steer policy and make good decisions that reflect acknowledged best practice, and achievements in other areas by other health and well-being boards. I would like to think that an auditor has a clear role in identifying whether value for money is being achieved by individual boards—I suspect that this will become important over the next two to three years, as the success of those boards is assessed—and whether, indeed, the health service investment and the sum of money available to local authorities are adequate for purpose.
To this end, I suggest to my noble friend the Minister that one of the National Audit Office’s thematic studies that are promised as part of the Bill could look at the joining point between local authorities and the health service, specifically in relation to adult social care but more generally in terms of improving health, preventing a decline in health and to reduce inequalities in health outcomes. I think that there is a role for an auditor in that area. An auditor would have to provide only an opinion on value for money if he or she is not satisfied in respect of a specific matter. I think that the issue goes a little further than this. I would like to think that some strongly proactive work would be undertaken by the National Audit Office and auditors who are looking at the role of health service bodies and local authorities’ work in the health field.
Lord McKenzie of Luton
My Lords, I thank the Minister for her detailed explanation of the amendments in this group. Our discussion on them has been widened by a very pertinent inquiry from the noble Lord, Lord Shipley. We have generally seen these amendments as tidying up and consequential measures. We have issues around: the duty of auditors of health bodies to prepare a report; the provision of sequencing of electors’ rights concerning unlawful items of accounts; the procedures for auditors to be able to recover costs when there is no formal action they can take; copies of recommendations or public interest reports of functional bodies of the GLA to be sent to the GLA; and the drafting changes arising from the fact that the Mayor’s Office for Policing and Crime will cease to be a connected entity of the GLA. We have gone through these measures and are content with them.
Baroness Stowell of Beeston
I am very grateful to the noble Lord, Lord McKenzie, for confirming that he is content with these amendments. As regards the query of my noble friend Lord Shipley about the health and well-being boards, the arrangements for reporting on the accounts and the value for money conclusion, I shall give him what I have and, if I need to, perhaps we can follow up the matter after the debate.
The Bill places auditors of both health and local government bodies under a duty to satisfy themselves that the body has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources, which is known as the value for money conclusion. Unlike local government, the accounts of health bodies are consolidated within their sponsor Whitehall department resource account. Local authorities, on the other hand, are directly accountable to the local electorate in a way that health service bodies are not. Because of the different accountability arrangements for health service bodies, the Government consider it necessary to put the requirement to have opinions on the accounts in the Bill rather than in the code of audit practice, to provide assurance to the accounting officer and Parliament that budgets have been used for the purposes Parliament intended. We believe that it is unnecessary to do this for non-health service bodies because of the statutory power for local auditors to apply to the courts for a declaration that an item of account is unlawful. Furthermore, for non-health service bodies, we expect the code of audit practice will set out what auditors must report against this duty, as is currently the position under the code produced by the Audit Commission. Overall, we consider that this allows for greater flexibility in reporting for non-health service bodies, but for health bodies the different parliamentary accounting framework includes a strict requirement for regularity to be reported on.
I have just been reminded that the health and well-being boards are not included under the provisions of the Bill but I hope that what I have just read out has reassured the noble Lord and your Lordships’ House that value for money is very much part of the consideration of the auditors who will be looking at the health and local government bodies.
I have just been passed another note which I hope may be helpful because I am not sure how much of what I have already read out is entirely helpful to the noble Lord. The provisions in the Local Audit and Accountability Bill on value for money inspections do not cover health service bodies. I think we know that. The NAO’s existing powers in relation to value for money inspections are wider than those in the Bill, so the latter does not need to include provision on this in relation to health service bodies. I think that is the killer point that I have finally got to. On the basis of that additional information, I beg to move.
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 19 to 25.
“(8A) A local auditor of the accounts of a parish meeting may only exercise the function in subsection (7), so far as it applies to a person who is or was a member or officer of a relevant authority, in relation to a person who is or was the chairman of the parish meeting or the proper officer of the district council within whose area the parish lies.”
“(4A) Subsection (3) does not apply in relation to a parish meeting unless the offence is alleged to have been committed by the chairman of the parish meeting or the proper officer of the district council within whose area the parish lies.”
“(5A) Subsection (5B) applies if a local auditor of the accounts of a relevant authority incurs costs in determining whether to make an application under this section in relation to the authority, but the application is not in fact made.
(5B) The local auditor may recover the reasonable costs so incurred from the relevant authority.”
“(5) Subsection (6) applies if a local auditor of the accounts of a relevant authority incurs costs in determining whether to make an application under this section in relation to the authority, but the application is not in fact made.
(6) The local auditor may recover the reasonable costs so incurred from the relevant authority.”
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendment 26.
“Access to local government meetings and documents
(1) The Secretary of State may by regulations make provision for and in connection with allowing persons—
(a) to film, photograph or make sound recordings of proceedings at a meeting of a body to which this section applies, or of a committee or sub-committee of such a body;
(b) to use other means for enabling persons not present at such a meeting to see or hear proceedings at the meeting, as it takes place or later;
(c) to report or provide commentary on the proceedings at such a meeting, orally or in writing, so that the report or commentary is available, as the meeting takes place or later, to persons not present at the meeting.
(2) Regulations under subsection (1) may in particular make provision—
(a) for allowing persons to make available to the public or a section of the public using any medium (including the internet) things produced as a result of activities within that subsection;
(b) about the facilities to be made available by bodies to which the regulations apply to enable persons to carry on such activities;
(c) about the steps to be taken by persons before carrying on such activities;
(d) about the circumstances in which persons may not carry on such activities, including for enabling a person specified in the regulations to prevent them from doing so in the circumstances specified in the regulations.
(3) The Secretary of State may by regulations make provision—
(a) for requiring written records to be kept of decisions that are of a kind specified in the regulations and are taken by an officer of a body to which this section applies,
(b) with respect to the information that is to be included in those written records (including information as to the reasons for any decision);
(c) for requiring any such written records, or any documents connected with the decisions to which they relate, to be supplied or made available to members of the body, to the public or to other persons;
(d) for the creation of offences in respect of any rights or requirements conferred or imposed by the regulations.
(4) The Secretary of State may by regulations provide that any of the following may or must be given or made available by electronic means—
(a) any notice which is required by the Public Bodies (Admission to Meetings) Act 1960, Part 5A of the Local Government Act 1972 (access to meetings and documents of certain authorities etc) or regulations under this section to be given by a body to which this section applies;
(b) any document relating to such a body which is required by that Part or those regulations to be open to inspection.
(5) Regulations under this section may, in particular, amend or repeal any provision of—
(a) the Public Bodies (Admission to Meetings) Act 1960,
(b) Part 5A or section 228 (inspection of documents) of the Local Government Act 1972, or
(c) section 58 of the Greater London Authority Act 1999 (application of Part 5A to the London Assembly).
(6) Subject to subsections (7) and (8), this section applies to—
(a) a district council,
(b) a county council in England,
(c) a London borough council,
(d) the London Assembly,
(e) the Common Council of the City of London in its capacity as a local authority or police authority,
(f) the London Fire and Emergency Planning Authority,
(g) Transport for London,
(h) a joint authority established under Part 4 of the Local Government Act 1985,
(i) an economic prosperity board,
(j) a combined authority,
(k) a fire and rescue authority in England constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies,
(l) a National Park Authority for a National Park in England, (m) the Broads Authority,
(n) the Council of the Isles of Scilly,
(o) a parish council, and
(p) a parish meeting.
(7) In its application to subsection (1), subsection (6) is to be read as if it included a reference to an executive of an authority within paragraph (a), (b) or (c) of that subsection.
(8) In its application to subsection (3), subsection (6) is to be read as if the reference in paragraph (d) to the London Assembly were to the Greater London Authority.
(9) References in this section to a committee or sub-committee of a body include any committee or sub-committee of that body to which Part 5A of the Local Government Act 1972 applies or is treated as applying.
(10) References in this section to Part 5A of the Local Government Act 1972 include a reference to that Part as it applies to the London Assembly by virtue of section 58 of the Greater London Authority Act 1999.
(11) In paragraph 4(2) of Schedule 12 to the Local Government Act 1972 (notice of meeting of principal council), for “Three clear days” substitute “Five clear days”.”
Baroness Stowell of Beeston
My Lords, in moving the Motion on Amendment 26, I shall speak also to the other amendments in this group.
Noble Lords will be aware that these are new provisions. These amendments insert a new clause into the Bill that would give greater rights to report at local government meetings and to have access to documents. We believe that this is an important extension to reflect greater enthusiasm and appetite among the public not just for transparency but also to have an element of control over the information and the access that they enjoy which allows them to continue discussion and debate beyond being just observers at meetings.
Commons Amendment 26 gives the Secretary of State the power to make regulations that would allow members of the public to report proceedings at public meetings, allowing people to film, audio-record, tweet and blog at a meeting of a local government body. This will allow those who are unable to attend the meeting to follow the proceedings and, as I have just said, perhaps promote discussion about proceedings thereafter. It will also give the public access to documents of local government bodies. These documents may, for instance, include records of decisions taken by officers acting under delegated powers; the reasons for the decisions, details of any alternative options considered and rejected, and any other documents connected with the decisions to which they relate.
The regulations may set out possible conditions to be met before such activities can be carried out. Likewise, they may specify the circumstances where activities such as filming or audio recording might not be permitted. The Government intend to work with partners such as the Local Government Association and the National Association of Local Councils on the detail of the regulations. They will be subject to the affirmative procedure if there is provision in the regulations amending or repealing primary legislation; otherwise the regulations will be subject to the negative procedure.
Local people are currently enjoying more rights under the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 when they attend meetings of a council’s executive and access information relating to decisions made in those meetings. Unfortunately, these same people cannot enjoy the same rights when they attend the public meetings of full council, its committees, sub-committees and joint committees, parish and town councils and other local government bodies. Some councils have used this inconsistent approach to refuse the public access. We are aware of some recent examples of councils ejecting members of the public from meetings for filming or tweeting from those meetings. That is why we have decided to bring forward these amendments now.
Since the 2012 regulations came into force, we are not aware that they have caused any particular problem for local authorities, other than some needing to update their standing orders to reflect the change in access rights by the press and public. We do not believe that this greater access should create additional burdens. However, I am aware that some may be concerned about the possible disruption that filming in council meetings might cause. Therefore, we will consider possible steps that have to be taken by people attending the meeting for the purpose of reporting the proceedings so that activities such as filming or taking photographs might not disturb the good order and conduct of a meeting. As I say, we intend to work with partners to ensure that the regulations and any guidance address this.
We are in a digital age where technology has significantly evolved and we need to acknowledge that it will continue to advance swiftly. With this in mind, we must widely embrace the use of modern communication methods such as filming, tweeting and blogging at public meetings. On top of this, opening up these bodies would help the public to have a better understanding of their local decision-making process and, as I said, potentially encourage them to be more involved in local affairs. I beg to move.
Lord Tope
My Lords, I expect we all welcome the intentions of the amendments: I certainly do. I must confess that my first response when I read about this was a little surprise that they were considered necessary. I am sure the vast majority of authorities of all persuasions are already doing this. It may well be that, in some cases, their standing orders have not been brought up to date, but I am sure that most are doing it very willingly. However, I then reflected on my early days as a councillor, quite a long time ago, when all council and committee meetings were open to the public, as required—if I remember rightly—by a Private Member’s Bill introduced by the then new and young honourable Member for Finchley, Mrs Thatcher. The one committee not open to the public was what was then called the planning committee; it would now probably be the development control committee. This was, arguably, the committee of greatest interest to members of the public but it was the one to which they were not allowed access.
Those days are, fortunately, long gone but it reminded me that we need to ensure we keep up to date with the times. I am sure all noble Lords welcome the good intentions of these amendments. The key will be in the drafting of the regulations. I am not sure why any local authority or council would wish to stop someone tweeting during a meeting or, if they did, how they could implement it without the most draconian measures. That is well and good, but the difficult part will be making regulations that require the greatest openness but do not allow the avoidable disruption of meetings.
I hesitate a little, because a fundamental part of our democracy is the right to be irritating and to annoy. I think the noble Lord, Lord Beecham, is suggesting that I am doing this at the moment. We all know from our local authority experience that there are some people whom everyone agrees are simply a nuisance. It will be quite tricky to balance the regulations to ensure that the person—it is usually an individual rather than a collection—has a right to be a nuisance and be irritating but does not disrupt the good order and procedure of the meeting. I imagine that the decision will be in the hands of whoever is chairing the meeting. They have the right now to have disruptive people ejected, as happens occasionally, and this will, no doubt, still be the case. However it will be quite difficult to draw the balance between allowing the maximum openness and transparency at meetings, which we would all endorse, with not allowing individuals —I stress, individuals—with a cause from unnecessarily and avoidably disrupting proceedings.
We look forward with interest to seeing the regulations. I am delighted that the Minister has made clear that there will be wide consultation with the local government associations, NALC and other bodies in the drawing up of these. We look forward to seeing the result.
The Earl of Lytton
My Lords, I relate to what the noble Lord, Lord Tope, has just said. I have a mental image of the small parish or town council, with its quite limited premises, taking on progressively more functions and finding itself in the centre of some awfully controversial measure. The premises might, quite literally, be crowded out by people with cameras or wanting to record: the sort of thing one sees on television outside the courts of justice when a person of fame—or infamy, as the case may be—has received a decision. The scrum that goes on out there is the sort of thing that slightly worries me, particularly, for the reasons given by the noble Lord, Lord Tope, with development control, which in many instances is highly contentious.
I will not ask the Minister for an answer at this juncture, but could she bear in mind that uniformity of regulations across the whole of local government might be difficult to achieve, for the reasons given by the noble Lord, Lord Tope? There is also a question of how open-ended this public right is. There will clearly be instances—I am sure we have all witnessed meetings of this sort—where it can be thoroughly disruptive and an impediment to the sober and conscientious consideration of matters on the agenda. Perhaps there must be some limitations. Like the noble Lord, Lord Tope, I look forward to seeing the draft regulations in due course. I appreciate what the Minister has said about the process for that: would she perhaps clarify the timescale for it? That would be very helpful, particularly for parish and town councils, a bigger proportion of which may be affected by this measure than principal authorities which, in many cases, already have generous facilities for public access and the recording of proceedings.
Lord Beecham (Lab)
My Lords, I occasionally encounter some unfortunate being who has apparently had nothing better to do than watch me on Parliament TV. It is possible that others of your Lordships may have had similar encounters. Oddly enough, although Newcastle City Council—on which both I and the noble Lord, Lord Shipley, have served—has webcast its meetings for many years, nobody has ever claimed to have seen me on those broadcasts. Perhaps that says something about the medium not quite having conveyed the message thus far.
I join my honourable friends in the House of Commons in welcoming these changes. It is fair to say, and was said by the Minister in the debate on this provision in the Commons, that the Opposition Front Bench there were very supportive of the concept. It is welcome that these proposals come here and, as the Minister pointed out, that they include the potential for safeguards. I presume that these will, as she has implied, be negotiated, or at least discussed, with the Local Government Association so as to avoid conduct which might disrupt meetings and to provide clarity about what happens when, for legitimate reasons, the press and public may be excluded. Examples might be if there are matters of commercial confidentiality or confidential personal details to be discussed in certain areas. I might like to suggest, though it may not reach into regulations, that selfies might be prohibited, but that is a matter of taste rather than democracy.
It would also be helpful if, alongside any regulations, the Government gave some information, in guidelines or otherwise, about the risks that may be attendant on people filming, tweeting or otherwise relaying actual events. Although one hopes it would not happen, what is said in council may sometimes stray into the area of defamation and those relaying matters of that sort could find themselves in a difficult situation. Some guidance about the need to be careful would help those who might otherwise run into difficulties. It is not likely to arise in a large number of cases but it is conceivable it might happen. Broadcasting authorities and so on are very alert to that danger. In Parliament it is privilege but that does not apply to local authorities.
Baroness Stowell of Beeston
I am grateful to the noble Lord for his and the Opposition’s support for these amendments. I am also grateful to have been reminded by my noble friend Lord Tope that I am following in the proud tradition of my late and noble friend Lady Thatcher in terms of increasing access to public meetings.
As my noble friend Lord Tope pointed out, many local authorities now provide the kind of access and opportunity to local people in the way that we are seeking to require through these measures. He is right, there is extensive use and availability in this area. However, some local authorities are not providing that kind of access. As we think that that is important and the precedent is there in other kinds of public meetings, it is only right to extend such provisions. For example, I am told that Tower Hamlets Council barred a 71 year- old resident from filming because it claimed a risk of reputational damage to the authority. Keighley Town Council blocked some residents from filming as it would have amounted to a breach of standing orders. Stamford Town Council placed a ban on journalists tweeting from meetings due to the risk that the journalists would not accurately portray the debate. So there are examples and evidence of inconsistency in approach and we want to address that.
Noble Lords raised important points about risks, and the measures necessary to mitigate those risks, to ensure that proper conduct is able to continue. I re-emphasise that we will carry out a process of consultation on these regulations and ensure that we take account of the points that have been made. We will not lay the regulations until we have completed that consultation. However, we are talking about a matter of months in terms of bringing those regulations forward. We do not want delay on this.
The noble Lord, Lord Beecham, specifically raised concerns about whether guidance will be issued on matters such as defamation in order that members of the public do not inadvertently put themselves at risk. Alongside the regulations, we intend to produce guidance to cover such matters. As the noble Lord will know, there is some precedent in this area because journalists are now allowed to “live tweet” from some public court proceedings.
The noble Lord specifically asked whether this provision may be extended to other public bodies such as health bodies. I will take his point away and raise it with colleagues. We believe that if a public meeting provides access to the public we should ensure that they have the ability to record it appropriately, in the way that I have described.
That leads me to another point that my noble friend Lord Tope and others mentioned regarding the ability to maintain sensitivity and confidentiality during public meetings. Councils and other government bodies will still be able to exclude the public from the part of a meeting in which confidential or exempt sensitive information will be disclosed. The definition of confidential and exempt information is already covered in legislation. There are legislative rules that must be followed when excluding the public from a meeting. For instance, a resolution may be passed to exclude the public from a meeting at which exempt information would be disclosed. Again, measures are already there to inform on how we propose to operate in this area.
I think that I have covered all the points that have been raised. I re-emphasise that we will bring forward regulations and ensure that we consult. I am very much aware of the kind of concerns that have been raised by noble Lords and will ensure that proper account is taken of these issues when the regulations are drafted.
Motion on Amendment 26 agreed.
Motion on Amendments 27 to 29
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 27 to 29.
“(13A) Subsections (14) to (16) apply (and subsections (18) to (20) do not apply) if, in accordance with section 46(2A), this section comes into force on the day on which this Act is passed.”
“(17) Subsections (18) to (20) apply (and subsections (14) to (16) do not apply) if this section comes into force on a day appointed by the Secretary of State by order under section 46(2A).
(18) Section 52ZC of the Local Government Finance Act 1992 applies with the following modifications to the determination of a set of principles for the financial year beginning with 1 April 2015.
(19) The Secretary of State may, in particular, determine categories of authority for that financial year—
(a) on the basis of whether an authority’s relevant basic amount of council tax for the financial year beginning with 1 April 2013 would have been excessive if that amount for that year and for the immediately preceding financial year had been determined under section 52ZX of the Local Government Finance Act 1992 as amended by this section,
(b) on the basis of whether an authority’s relevant basic amount of council tax for the financial year beginning with 1 April 2014 would have been excessive if that amount for that year and for the immediately preceding financial year had been determined under that section as so amended, or
(c) on the basis set out in paragraph (a) and on the basis set out in paragraph (b).
(20) In subsection (3)(b) of section 52ZC the reference to an authority’s relevant basic amount of council tax for the financial year immediately preceding the year under consideration is to the amount that would have been calculated by the authority for that year under section 52ZX of the Local Government Finance Act 1992 if the amendments made to it by this section had been in force for that year.”
Baroness Stowell of Beeston
My Lords, I beg to move that this House do agree with the Commons in their Amendments 27 to 29 en bloc. I shall speak also to the other amendments in this group.
These amendments would provide advance certainty to local government over timings, so they can be confident that any delay in Parliament will not impact on their budget-setting timetable.
Commons Amendments 27, 37, 39 and 40 provide that if the Bill is passed by 5 February, the likely date by which the referendum principles for 2014-15 must be laid before Parliament, the clause takes effect immediately. If not, the changes would take effect by order and relate to the financial year 2015-16. Commons Amendment 29 gives detail of the changes required if the clause was to be commenced by order and relate to 2015-16. This includes amending transitional provisions to ensure that council tax comparisons could be made on a like-for-like basis between 2014-15 and 2015-16.
Commons Amendment 28 is a minor amendment to clarify that the current clause does not reduce the existing discretion of the Secretary of State when determining categories of authority for 2014-15.
These amendments were proposed at Report in the other place as a precautionary measure to remove a risk that local authority budgeting could be adversely impacted in the event of any delay to the Bill. The Bill has not been delayed to date and, subject to the decisions of your Lordships’ House today, is on track to reach Royal Assent well before local authorities begin setting their budgets. If this remains the case, barring the minor clarification of Amendment 28, this group of amendments would not alter the operation of the clause from the version first introduced into this House.
With this explanation, I hope noble Lords will see fit to accept the amendments.
Lord Shipley (LD)
My Lords, could I make a brief point about Amendment 27 and the group as a whole? It relates to the issue of principle, which it is important that we restate. I do not like centrally imposed targets for increases in local taxation. The reason is simply this: there is a principle that localism means local decision-making, and those who are elected at local elections should make those decisions. We have various definitions now of what is seen to be relevant expenditure. Is it spending power? If you compare spending power to the amount of government grant, or to the amount of money paid on average by council tax payers or at band D by council tax payers, you get very different sums. In the end, we are reliant on the ballot box in each council area to decide who represents a ward, who then come together and make decisions about how that council is to be run. In my view, that includes the level of council tax.
I understand that we have debated that before and that debate has no doubt been held in the other place. I hope that somebody will decide to hold a referendum on the issue of council tax and the proposal that there should be a higher increase than the amount that the Secretary of State would prefer.
Therefore, this remains an issue of principle: local authorities are the people who should decide the level of council tax and they should be responsible to their electors, on the principle of localism. They will stand or fall at their ballot boxes by the decisions that they themselves take.
Lord McKenzie of Luton
My Lords, this amendment takes us back to the thorny issue of council tax at referendums. We have just heard from the noble Lord, Lord Shipley, about his opposition to centrally imposed targets; he has been very consistent on that issue. The fundamental policy change provided for in the Bill is the inclusion of the definition of a relevant amount of council tax—certain levies. Previously, any increase in council tax resulting from an increase in levies could not have caused a determination that the level of council tax was excessive, and would not have triggered a referendum requirement.
Debates in your Lordships’ House and in the other place highlighted a number of concerns, namely that the referendum regime places the burden on major preceptors and billing authorities who have no direct ability to influence the amount of the levy or to cause a levy body to reduce its levy; that factoring in 2013-14 council tax increases into referendum criteria introduces an element of retrospection potentially penalising authorities for decisions made before the Bill was introduced; and that it would undermine certain infrastructure projects that relied on an increase in levy stream and that were negotiated as part of a city deal. The example of Leeds has been cited in this regard.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his final statement in confirming that the Opposition will not resist these amendments. In response to comments made both by the noble Lord, Lord McKenzie, and my noble friend Lord Shipley, I remind your Lordships that the coalition agreement committed the Government to remove capping and to bring in a fairer system of addressing excessive council tax increases. Parliament agreed the principle of removing the old capping regime and instead giving local people the final say on excessive increases during the passage of the Localism Act 2011. The time to debate whether that was the correct approach was then and not now.
As far as timing is concerned, subject to your Lordships agreeing these amendments today, we hope to have Royal Assent as soon as possible. While that is of course a matter for the Crown, we envisage that we should have it in time for the changes to the council tax referendum provisions to take effect for the 2014-15 financial year. Those principles will be announced in due course.
I do not agree with the point put forward by the noble Lord, Lord McKenzie, about the issue of including levies being a retrospective provision. The Secretary of State considers all relevant factors when setting referendum principles and that always includes past council tax-setting decisions. That was done for 2013-14 when he gave low-spending authorities the ability to set a £5 council tax increase, even if that meant a percentage rise above 2%. This provision simply makes it clear that he can take into account changes in levies in 2013-14 and 2014-15 when setting next year’s principles.
The Government were clear before council tax and levies were set for 2013-14 that they might take account of council tax decisions in setting future principles. No change will be made to the money raised in 2013-14 and both authorities and levying bodies can plan for 2014 accordingly. Local tax payers deserve fair and equal treatment no matter where in England they live. There must be measures to protect taxpayers from excessive increases brought in through the back door by a small number of authorities without seeking local agreement.
I clearly hear the arguments that have been put forward today but I am afraid that we beg to differ. The clause and the principle of including levies in the calculation of what constitutes an excessive council tax increase has now been debated at length in both Houses and approved. The principle and practicalities of holding council tax referendums were agreed in 2011 via the Localism Act. The amendments before us do not alter them. They were proposed to ensure that local authorities were not disadvantaged by any delays in the Bill becoming law. As I said, the referendum principles will be announced in due course, but we believe that authorities should not wait for them to be published. They should look to freeze council tax levels next year and we have made funds available to support them in doing so. I beg to move.
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendment 30.
“Parish meetings: parish polls
(1) In Part 3 of Schedule 12 to the Local Government Act 1972 (procedure in parish meetings), paragraph 18 is amended as follows.
(2) Omit sub-paragraphs (4) to (6).
(3) At the end insert—
“(7) A poll may be demanded before the conclusion of a parish meeting on any question arising at the meeting, subject to regulations made under sub-paragraph (8).
(8) The Secretary of State may by regulations make provision about polls consequent on parish meetings, in particular about—
(a) the questions arising at a meeting on which a poll may be demanded,
(b) the circumstances in which a poll may or must be taken (including provision as to the number of local government electors who must demand a poll for a poll to be taken), and
(c) the conduct of a poll.
(9) Regulations under sub-paragraph (8)(c) may apply any electoral enactment (with or without modifications) to polls consequent on parish meetings.
(10) In sub-paragraph (9) “electoral enactment” means an enactment which relates to elections or referendums.
For that purpose, “enactment” includes an enactment contained in subordinate legislation as defined in section 21(1) of the Interpretation Act 1978.
(11) A statutory instrument containing regulations under sub-paragraph (8) is subject to annulment in pursuance of a resolution of either House of Parliament.”
(4) In section 243 of that Act (computation of time and timing of elections, etc)—
(a) in subsection (2) for “rules under paragraph 18 or” substitute “regulations under paragraph 18 or rules under paragraph 34”,
(b) in subsection (4) before “rules” (in both places it occurs) insert “regulations or”, and
(c) in subsection (5) before “rules” (in both places it occurs) insert “regulations or”.”
Baroness Stowell of Beeston
I shall speak also to Amendment 103. These amendments would modernise the arrangements that govern parish polls. I am grateful to the noble Earl, Lord Lytton, for bringing the much-needed modernisation of parish polls to the House’s attention when the Bill was last in this place. I understand, although I was not here at the time, that he had widespread support from other noble Lords. I am also grateful to the Members of the other place who consented to widen the scope of the Bill to allow the addition of these amendments.
Commons Amendment 30 gives the Secretary of State power to make regulations regarding parish polls. The clause specifies that regulations may cover arrangements for the conduct of a poll; the subject matter on which a poll may be held; and the circumstances in which a poll may or must be taken. So, in line with the noble Earl’s proposed amendment, this amendment will enable regulations that more tightly define what constitutes a legitimate topic for a poll and which raise the trigger threshold. On top of this, we will also modernise the voting arrangements to increase participation in polls by, for example, extending voting hours and allowing postal voting. Amendment 103 simply updates the Bill’s Long Title to reflect the inclusion of the new clause.
We are taking this action because we believe that parish polls are an important democratic tool that allows a parish council to get a clear indication of local opinion about a local matter. We want to protect that. However, as the noble Earl, Lord Lytton, outlined to the House last year, the current rules that govern the trigger and subject matter allow for individuals to abuse them by holding polls unrelated to the local area, at substantial cost to local tax payers. This has led to some individuals vexatiously pursuing particular agendas, with large financial consequences for parish councils. What is more, the present rules can also operate as barriers to participation, particularly as voting can take place only between the hours of 4 pm and 9 pm and there are no provisions for postal or proxy votes.
The new measures will make this important democratic process fit for purpose in the modern world. They will ensure that parish polls enable local communities to have a voice on issues that directly relate to parish matters. They will increase participation by updating the archaic arrangements for the conduct of a poll and guard against vexatious misuse. We will consult widely on the content of the regulations, which will be subject to the negative procedure. It is our aim to launch a scoping exercise in the spring, followed by a formal consultation process. We hope to work closely with the noble Earl and sector-led bodies, such as the National Association of Local Councils, in that work. I beg to move.
The Earl of Lytton
I particularly welcome this amendment for all the reasons recited by the noble Baroness. I think that it will substantially modernise, improve and streamline the work of parish councils and make them more open, without having the negative impediments that have previously been associated with parish polls. I very much welcome this. In doing so, as I expressed when this was before us previously, I thank other noble Lords who supported this; the noble Baroness’s predecessor, the noble Baroness, Lady Hanham, who readily took this away; and the Bill team for the work that it did to fashion it and get it approved by the other place. I warmly welcome this measure for all the reasons given. It is very much a success all round, for which I claim only minority credit for having raised the matter in the first place.
Lord McKenzie of Luton
My Lords, we should thank the noble Earl, Lord Lytton, for raising this matter in the first place, and he should certainly claim a substantial amount of credit for it. He regaled us in Committee with some of the anomalies and archaic processes concerning parish meetings. Voting only between 4 pm and 9 pm with no provision for proxy or postal voting is hardly the stuff of inclusion. The noble Earl was convincing on the need to modernise arrangements, and the Government responded by providing for the Secretary of State to have the power to make regulations about the conduct of parish polls. We consented in the other place, as the Minister acknowledged, in widening the scope of the Bill to facilitate this.
The Government gave undertakings in another place—they have been reiterated tonight—about continued collaboration with the National Association of Local Councils and with the noble Earl, and we trust that the promised wide consultation on draft regulations will now proceed apace. This is an opportunity, as has been said, to provide a method for local communities to have a voice on issues directly related to parish matters, and it has our support.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his support for these amendments and I certainly join him in paying tribute to the noble Earl for all his work on the matter. I have nothing further to add but my thanks to all noble Lords for allowing us to respond so constructively to this proposal from the noble Earl.
Earl Attlee (Con)
I shall speak also to Amendments 47, 49, 50, 51, 52, 54, 56, 57 and 58, which relate to the eligibility and regulation of auditors in the new local audit framework.
Commons Amendments 35, 47, 49, 54, 57 and 58 are all minor and technical tidying-up amendments. Amendment 35 would ensure that references throughout the Bill to subordinate legislation made under it will cover Part 42 of the Companies Act 2006, as applied by Schedule 5 to the Bill. This means that provisions on eligibility and regulation will be included whenever the Bill refers to subordinate legislation. Amendment 47 would insert a new subsection that will apply explicitly to Sections 1288, 1289, 1290 and 1292 of Part 42 of the Companies Act 2006 in relation to local audit. These sections set out how regulations and orders under the Companies Act are to be made.
Amendment 49 corrects a drafting error in order to mirror accurately the obligations under Schedule 10 to the Companies Act 2006. Amendment 54 makes a minor change to ensure that the definition of local auditor used in the Companies Act 2006, as modified and applied to local audit, refers to the correct clause in this Bill. Amendments 57 and 58 ensure that a body to which the Secretary of State’s functions are delegated under Schedule 5—which we expect to be the Financial Reporting Council—can be audited by either a statutory auditor or a local auditor.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of this quite large group of amendments. I believe they cover quite minor and technical matters. Generally, we have no issues to raise on them. When I was first going through the amendments, I did wonder about Amendments 51 and 52, which replace the power of the Secretary of State to make regulations with provisions in the Bill. As the noble Earl explained, this is to do with which existing qualifications will be recognised. It is unusual for Governments to take something from regulations and put it in a Bill, but I understand the rationale.
Amendment 56 clarifies that no aptitude test is required if an individual is providing services on a temporary or occasional basis, and it is accepted that this is to be judged by reference to duration, frequency, regularity and continuity. The Minister will be relieved to know that I do not intend to press further detailed explanations of how those terms might be interpreted. We have no further points to raise on this group of amendments.
Earl Attlee
My Lords, I thank the noble Lord for his support for these amendments.
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 36 to 40.
“(7A) Any function conferred or imposed on a parish meeting under or by virtue of this Act, other than a function expressly conferred on the parish meeting itself, is exercisable by the chairman of the parish meeting acting on behalf of the authority.”
“(2A) If this Act is passed before 5 February 2014, section 39 comes into force on the day on which this Act is passed; otherwise that section comes into force on such day as the Secretary of State may by order appoint.”
Earl Attlee
That this House do agree with the Commons in their Amendment 41.
Earl Attlee
My Lords, I beg to move that this House do agree with the Commons in their Amendment 41, which is a privilege amendment.
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendment 42.
Earl Attlee
Moved by
That this House do agree with the Commons in their Amendment 43.
Earl Attlee
My Lords, Amendment 43 removes internal drainage boards which are partly in England and partly in Wales from the local audit provisions in the Bill. There are two such internal drainage boards: Powysland and Lower Wye. Both are mainly in Wales but currently fall under the Audit Commission regime. Last November, the Welsh Government announced their intention to transfer the functions of the two cross-border IDBs, along with the functions of one IDB that is wholly in Wales, to Natural Resources Wales, and to bring them under the Welsh audit system. The Welsh Government subsequently supported a legislative consent Motion to make audit arrangements for these two bodies under this Bill as a stopgap measure until the new governance arrangements are in place. However, the legislative consent Motion was not passed by the National Assembly for Wales. In line with the devolution settlement, the amendment therefore removes these two bodies from Schedule 2. Schedule 2 lists the relevant authorities that would fall under the new audit regime.
It is the Welsh Government’s intention that the new governance arrangements will be in place by the time the Audit Commission is abolished, by 2015, and preparations for this are in hand. The Welsh Government are also working with Defra to agree a way forward with regard to the future management of the areas in England covered by the two cross-border internal drainage boards. Both cross-border bodies will continue to fall under the Audit Commission regime until then.
Welsh Ministers have agreed that we retain the power in Clause 2 as a backstop power to add cross-border bodies back into Schedule 2 by regulations at a later date, should the transfer of functions take longer than expected. Regulations made under this power will be subject to consultation and the affirmative procedure. They would also require consent from the National Assembly for Wales. With this explanation, I hope noble Lords will accept this amendment. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of this amendment. I accept that it is consequent upon decisions of the Welsh Government and their intention to transfer the functions of the two cross-border bodies to Natural Resources Wales and to bring them under the Welsh audit system. I understand also that it is the intention that the new governance arrangements will be in place by the time the Audit Commission closes, but that a backstop has been retained should that not actually have occurred. We are content with this amendment and happy to support it.
Earl Attlee
That this House do agree with the Commons in their Amendments 44 to 73.
“(4) A local auditor appointed to audit the accounts of a parish meeting must be appointed by the parish meeting itself (and not by its chairman on behalf of the parish meeting).”
“(6) The function of appointing a panel or making a determination under this paragraph is to be exercised in the case of a parish meeting by the parish meeting itself (and not by its chairman on behalf of the parish meeting).”
“(3) The reference in sub-paragraph (1) to Part 42 of the Companies Act 2006 includes sections 1288, 1289, 1290 and 1292 of that Act (regulations and orders) as they apply in relation to that Part.”
“6A In section 1216 (effect of appointment of a partnership), after subsection (5) insert—
“(5A) The consent or agreement of a parish meeting under subsection (5) must be given by the parish meeting itself (and not by its chairman on behalf of the parish meeting).”
“(7) A person holds an appropriate qualification for the purposes of this Chapter if, immediately before the relevant time, the person was qualified for appointment as an auditor under section 3 of the Audit Commission Act 1998 by virtue of the person’s membership of a body listed in subsection (7) of that section.
(7A) A person holds an appropriate qualification for the purposes of this Chapter if—
(a) before the relevant time, the person began a course of study or practical training leading to a professional qualification in accountancy offered by a body listed in section 3(7) of the Audit Commission Act 1998,
(b) the person would have been qualified for appointment as an auditor under section 3 of that Act by virtue of subsection (5)(b) of that section if that qualification had been obtained before that time, and
(c) the person obtained that qualification within the period of 6 years beginning with that time.”
“(7) A person appointed under this section to conduct a second audit of the accounts of a parish meeting, or to review and report on the first audit of such accounts, must be appointed by the parish meeting itself (and not by its chairman on behalf of the parish meeting).””
““parish meeting | section 41(1) of the Local Audit and Accountability Act 2014”;” |
“(3) For paragraph 6 (holding of appropriate qualification) substitute—
“Holding of appropriate qualification
6 (1) The body must have rules to the effect that an individual is not eligible for appointment as a local auditor unless the individual—
(a) holds an appropriate qualification,
(b) is an EEA auditor who has passed an aptitude test in accordance with sub-paragraph (3), unless an aptitude test is not required (see sub-paragraphs (4) and (5)), or
(c) has been authorised to act as a local auditor by the body pursuant to the European Communities (Recognition of Professional Qualifications) Regulations 2007 (SI 2007/2781), and complies with the requirements of those Regulations that apply to a person acting as a local auditor.
(2) The body must have rules to the effect that a firm is not eligible for appointment as a local auditor unless—
(a) each individual responsible for local audit work on behalf of the firm is eligible for appointment as a local auditor, and
(b) the firm is controlled by qualified persons (see paragraph 7 below).
(3) The aptitude test—
(a) must test the individual’s knowledge of subjects—
(i) that are covered by a recognised professional qualification,
(ii) that are not covered by the professional qualification already held by that individual, and
(iii) the knowledge of which is essential for the pursuit of the profession of local auditor;
(b) may test the individual’s knowledge of rules of professional conduct;
(c) must not test the individual’s knowledge of any other matters.
(4) No aptitude test is required if—
(a) the individual is to provide services consisting of local audit work on a temporary and occasional basis, or
(b) the subjects that are covered by a recognised professional qualification and the knowledge of which is essential for the pursuit of the profession of local auditor are covered by the professional qualification already held by the individual.
(5) Whether the provision of services is on a temporary and occasional basis is to be assessed on a case by case basis and in particular by reference to its duration, its frequency, its regularity and its continuity.
(6) A firm which has ceased to comply with the conditions mentioned in sub-paragraph (2) may be permitted to remain eligible for appointment as a local auditor for a period of not more than three months.”
(3A) In paragraph 7 (meaning of control by qualified persons)—
(a) in sub-paragraph (1) (introductory), for “paragraph 6(1)(b)” substitute “paragraph 6(2)(b)”, and
(b) in sub-paragraph (2)(b)(i), (requirement for firm to be eligible for appointment as statutory auditor), for “statutory auditor” substitute “local auditor, or as a statutory auditor in accordance with this Part of this Act as it has effect apart from its application by virtue of Schedule 5 to the Local Audit and Accountability Act 2014.”.”
(b) in paragraph 10(6) (requirement for auditor of body established by order to be eligible for appointment as statutory auditor), for “a statutory auditor” substitute “a local auditor, or a statutory auditor in accordance with this Part of this Act as it has effect apart from its application by virtue of Schedule 5 to the Local Audit and Accountability Act 2014.”.”
(i) a functional body,
(ii) an entity connected with a functional body, or
(iii) ”
(i) a functional body,
(ii) an entity connected with a functional body, or
(iii) ”
“(3A) Sub-paragraph (3)(a) does not apply in relation to a parish meeting.”
“(2A) This paragraph applies to the Mayor’s Office for Policing and Crime where a local auditor has made a report or recommendation relating to the Commissioner of Police of the Metropolis regardless of whether the Office is a connected entity or was such an entity at the time to which the report or recommendation relates.”
“(2) This paragraph does not apply where a local auditor has made a report or recommendation relating to the Commissioner of Police of the the Authority or was so connected at the time to which the report or recommendation relates.”
“(2A) The functions of a parish meeting under paragraph 5 are to be exercised by the parish meeting itself (and not by its chairman on behalf of the parish meeting).”
“(5A) Sub-paragraph (5) does not apply in relation to a parish meeting.”
“(8) In this Schedule “the relevant authority concerned”, in relation to an advisory notice, means the relevant authority to which, or to any officer of which, the notice is addressed.”
“(2A) The condition in paragraph (a) of sub-paragraph (2) is met in relation to a parish meeting only if the matters referred to in that paragraph are considered by the parish meeting itself (and not by its chairman on behalf of the parish meeting).”
“(4) A local auditor may recover from a relevant authority—
(a) the reasonable costs of determining whether to issue an advisory notice to that authority or an officer of that authority, and
(b) the reasonable costs of issuing an advisory notice to that authority or an officer of that authority.
(4A) Sub-paragraph (4)(a) applies regardless of whether the notice is in fact issued.”
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 74 to 76.
“(10A) In this paragraph “enactment” includes—
(a) an enactment contained in, or in an instrument made under, a
Measure or Act of the National Assembly for Wales,
(b) an enactment contained in, or in an instrument made under, an
Act of the Scottish Parliament, and
(c) an enactment contained in, or in an instrument made under, Northern Ireland legislation.”
“(f) a health and social care body mentioned in paragraphs (a) to (e) of section 1(5) of the Health and Social Care (Reform) Act (Northern Ireland) 2009.”
“(ba) to assist in the prevention and detection of errors and inaccuracies,”
Baroness Stowell of Beeston
My Lords, these amendments extend the potential purposes for which a data-matching exercise can be carried out by the National Fraud Initiative and make minor clarifications and updates to the data-matching provisions in Schedule 9. Following the helpful amendments of the noble Lord, Lord McKenzie, when the Bill was last in this House concerning data-matching exercises, the Government introduced Amendment 76. This amendment would add the prevention and detection of errors and inaccuracies as further potential purposes for which a data-matching exercise can be carried out by the National Fraud Initiative.
The amendment would allow the National Fraud Initiative to undertake the ad hoc data-matching exercises that it does at present through the Audit Commission’s wider powers once it moves over to the Cabinet Office. If your Lordships’ House agrees, the amendment would allow the possible extension of the National Fraud Initiative’s potential data-matching powers to include: the prevention and detection of crime other than fraud; assisting in the apprehension and prosecution of offenders; assisting in the recovery of debt owing to public bodies; and the prevention and detection of inaccuracy and error, which is the subject of this amendment.
The noble Lord, Lord McKenzie, proposed an alternative amendment relating to the prevention and detection of maladministration and error when the Bill was previously here in Committee, which we undertook to consider. However, although we felt that a good case had been made for the inclusion of “error”, we concluded that there was insufficient evidence as to how the investigation of maladministration over and above error might be used. Furthermore, “maladministration” has a strong association with the work of the Local Government Ombudsman. We were concerned that its use here might raise the potential for conflicting roles and responsibilities. We therefore considered that the term “error and inaccuracies” was both more appropriate and indeed wider than the amendment proposed originally. We hope that the noble Lord, Lord McKenzie, concurs with that, and I thank him for bringing forward the original proposal that has led to this amendment.
Before enacting any of these purposes, the Secretary of State must consult relevant authorities, their representatives and the bodies affected. In addition, those regulations would be subject to the affirmative resolution procedure. In our view, these safeguards will ensure that proper consideration is given to any extension to the initiative’s current powers.
Commons Amendments 74 and 75 are minor and technical amendments made purely to ensure consistency with other, similar provisions in the Bill or with other legislation. With these assurances, I hope your Lordships will feel able to approve these amendments.
Lord McKenzie of Luton
My Lords, I thank the Minister for her explanation of these amendments and her kind remarks. As has been noted, we had an extensive debate around data matching when the Bill was originally before us, prompted in particular by concerns that data matching undertaken by the Audit Commission under its audit powers would be lost with the demise of the Audit Commission. These powers were not covered by data-matching powers exercisable for the prevention and detection of fraud. Nor were they included in the list of items which, after due process, could be added to those powers. We pressed the case to add data matching for the purpose of detection of maladministration and error to the list of those powers which could be introduced. As the Minister has explained, we highlighted information provided by the Audit Commission as to how its powers had been used to identify problems with GP lists, for example, which would be lost without an amendment to the data-matching provisions. The Minister handling the amendment, the noble Lord, Lord Wallace of Saltaire, who coincidentally had Lords responsibility for Cabinet Office matters, rightly stressed the need for sensitivity around data matching but said that the Government would reflect. The point we pressed was that we were not seeking an extension of data-matching powers, leading to preservation of those that would be lost with the Audit Commission. We are delighted to note that the Government have responded positively on these matters and proposed the addition of,
“prevention and detection of errors and inaccuracies”.
We are told that this formulation will allow the National Fraud Initiative to undertake the ad hoc data-matching exercises it does at present through the Audit Commission under its powers once the NFI moves to the Cabinet Office.
The Minister will be aware of the amendment that we and colleagues in the Commons pressed about the prevention and detection of maladministration and error. As we have heard, there was some debate around excluding maladministration from the amendment, but the main thrust of the Government’s position was the overlap with the ombudsman’s responsibilities to look at this. I do not propose to rerun the arguments advanced by Andy Sawford about the omission of maladministration being a lost opportunity. However, we understand that the Audit Commission has confirmed that the Government’s amendment would enable the NFI to carry on the data matching it conducts through other powers—I think the Minister has actually confirmed that. This was our key starting point, so although we are a tad disappointed at the omission of maladministration, we are grateful that the Government have responded to our arguments and will not press the matter further today. Can the Minister say when it is planned to take the steps, including the necessary consultation, to add these purposes to the NFI’s powers to data match? We accept that Amendments 74 and 75 maintain the status quo in relation to the cross-boundary work of the NFI and we have no points to raise on that. We are happy, indeed pleased, to support these amendments.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his very gracious welcome to this amendment, which, as I said before, stems from an amendment that he originally proposed. I will just confirm to the noble Lord, and indeed your Lordships’ House, that we are in discussions with the Cabinet Office regarding the future operation of the National Fraud Initiative and the commencement of the relevant parts of the Bill that are required to ensure the safe continuation of the commission’s data-matching exercises. This is something that is very important and I can confirm that this will continue when the National Fraud Initiative moves to sit with the Cabinet Office. The enactment of the further purpose which we have been discussing tonight is not required to support the transition of the National Fraud Initiative but, as we have identified through the course of the Bill, it is a useful addition to the potential powers for which exercises can be undertaken. It will allow the national fraud initiative to undertake the ad hoc data-matching exercises that it does at present under the Audit Commission’s wider powers once it moves over to the Cabinet Office in 2015. The addition of this potential extension also fits well with the Cabinet Office’s overarching remit, covering fraud, error and debt.
As to the noble Lord’s question about timescales, at present, we do not have a draft timeline for the introduction of such powers should the Cabinet Office determine that it intends to bring them forward. However, I hope that I have been able, through the introduction of this amendment, to give the noble Lord the reassurance that the extension of these powers will be possible at such time that the Government decide to bring forward these regulations.
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 77 to 101.
“10 In section 25(2) (coordination of inspections: persons to whom the section applies), for paragraph (a) substitute—
“(a) an inspector or assistant inspector appointed under section 10(1) or (2);”.”
“Transport Act 1985 (c. 67)
12A (1) Section 76 of the Transport Act 1985 (audit of accounts of public transport companies) is amended as follows.
(2) For subsection (1) substitute—
“(1A) In a case where a public transport company’s controlling authority are—
(a) a county council or county borough council in Wales, or
(b) a composite authority of which both or all the constituent councils are county councils or county borough councils in Wales,
it shall be the duty of the controlling authority to exercise their control over that company so as to ensure that the company appoints as auditors of the company only persons who, in addition to meeting the requirements of Part 42 of the Companies Act 2006 (statutory auditors), are approved for appointment as such auditors by the Auditor General for Wales.
(1B) In any other case, it shall be the duty of a public transport company’s controlling authority to exercise their control over that company so as to ensure that the company appoints as requirements of Part 42 of the Companies Act 2006 (statutory auditors).”
(3) In subsection (2), after “(1)” insert “or (as the case may be) (1A)”.”
““financial year” means—
(a) the period commencing with the date on which the corporation is established and ending with the second 31st March following that date, and
(b) each successive period of twelve months.””
“Social Security Administration (Northern Ireland) Act 1992 (c. 8)
In section 117(8) of the Social Security Administration (Northern Ireland) Act 1992 (unauthorised disclosure of information relating to particular persons: Audit Commission)—
(a) omit paragraph (gb), and
(b) after paragraph (gc) insert—
“(gd) a local auditor within the meaning of the Local
Audit and Accountability Act 2014;
(ge) the Auditor General for Wales and any member of the Auditor General’s staff;
(gf) any member of the staff of the Wales Audit Office, and any person providing services to that Office;”.”
“Local Government Act 1999 (c. 27)
33A (1) Section 23 of the Local Government Act 1999 (accounts of best value authorities) is amended as follows.
(2) In subsection (4) omit paragraph (a).
(3) In subsection (7) for “an auditor appointed by the Audit Commission” substitute “a local auditor appointed in accordance with the Local Audit and Accountability Act 2014 or provision made under it”.”
“ (1) Section 26D of the Public Finance and Accountability (Scotland) Act 2000 (disclosure of results of data matching etc) is amended as follows.
(2) In subsection (4) for paragraph (b) substitute—
“(b) the Secretary of State,
(ba) the Minister for the Cabinet Office,
(bb) a local auditor within the meaning of the Local Audit and Accountability Act 2014,”.
(3) In subsection (7) in the definition of “relevant NHS body” for paragraph (b) substitute—
“(b) a body mentioned in paragraph (a), (b) or (c) of paragraph 4(11) of Schedule 9 to the Local Audit and Accountability Act 2014 (“relevant NHS body”);”.”
“50A(1) Section 100 (exercise of powers by reference to authorities’ performance categories) is amended as follows.
(2) Omit subsections (1) and (2).
(3) In subsection (3), for “those powers” substitute “certain powers”. (4) Omit subsections (4) to (8).”
“ (1) Article 4D of the Audit and Accountability (Northern Ireland) Order 2003 (disclosure of results of data matching etc) is amended as follows.
(2) In paragraph (2)(b) after “body”, in each place, insert “or person”.
(3) In paragraph (3) after “bodies” insert “and persons”.
(4) In that paragraph, for sub-paragraph (a) substitute—
“(a) the Secretary of State,
(aa) the Minister for the Cabinet Office,
(ab) a local auditor within the meaning of the Local Audit and Accountability Act 2014,”.
(5) In paragraph (4) after “body”, where it first occurs, insert “or person”. (6) In paragraph (6)(b) for paragraph (ii) substitute—
“(ii) a body mentioned in paragraph (a), (b) or (c) of paragraph 4(11) of Schedule 9 to the Local Audit and Accountability Act 2014 (“relevant NHS body”);”.”
“58 (1) Section 62 (co-operation) is amended as follows. (2) Omit paragraph (b).
(3) In the heading (in its original form and as substituted by paragraph 61(3) of Schedule 4 to the Public Audit (Wales) Act 2013) omit “, Audit Commission”.”
“ (1) Section 64D (disclosure of results of data matching etc) is amended as follows.
(2) In subsection (2)(b) after “body”, in each place, insert “or person”.
(3) In subsection (3) after “bodies” insert “and persons”.
(4) In that subsection, for paragraph (a) substitute—
“(a) the Secretary of State,
(aa) the Minister for the Cabinet Office,
(ab) a local auditor within the meaning of the Local Audit and Accountability Act 2014,”.
(5) In subsection (4) after “body”, where it first occurs, insert “or person”.
(6) In subsection (6)(b) for sub-paragraph (ii) substitute—
“(ii) a body mentioned in paragraph (a), (b) or (c) of paragraph 4(11) of Schedule 9 to the Local Audit and Accountability Act 2014 (“relevant NHS body”);”.”
“(a) at the end of paragraph (a) insert “and”,”
“(aa) in paragraph (b) omit “in the case of an order containing a scheme within paragraph 1(1)(a),”, and”
“(za) section 95(4) of the Traffic Management Act 2004;”
“(ba) section 31(2) of the Legislative and Regulatory Reform Act 2006;”
Baroness Stowell of Beeston
My Lords, Commons Amendments 77 to 101 make a number of minor and technical related and consequential amendments to Schedules 10 and 12 to the Bill.
Commons Amendments 77 to 79 and 81 to 84, to Schedule 10, simply remove redundant references or make clarifications to related provisions in existing legislation. They are the result of amendments to the Local Government Act 1999 made by the Public Audit (Wales) Act 2013, which removed or amended provisions relating to the Auditor-General for Wales.
Commons Amendment 80 will amend Section 25(2)(a) of the Local Government Act 1999. The amendment ensures that inspectors and assistant inspectors of best value authorities will continue, as they do now, to have regard to any guidance issued by the Secretary of State when carrying out investigations or inspections of best value authorities once the Audit Commission is abolished.
Commons Amendments 85 to 101, to Schedule 12, will remove redundant references to the Audit Commission in a range of other Acts and, where necessary, replace them with reference to auditors appointed in accordance with this Bill, and amend provisions already in the Bill to avoid unintended outcomes once the Audit Commission has been abolished. I hope that I have been able to give noble Lords the assurances they need that these are technical, minor and consequential amendments.
In case this is the final time I am on my feet speaking about this Bill, I thank all noble Lords who have participated in this evening’s debate and I am grateful for the support I have received from noble Lords for these various amendments. I would also like to take this opportunity to thank the Bill team for their consistent hard work on this piece of legislation. It has been my privilege to work with them only for this very final stage of the Bill, but I know that they have had a long and hard-working journey through both Houses. My predecessor would, I am sure, want me to relay her thanks to the Bill team. I beg to move.
Lord McKenzie of Luton
My Lords, we accept that these are minor and technical amendments and have no points to raise.
This is my final utterance on this Bill so I, too, would like to take the opportunity to thank all those who have been involved, particularly the Bill team, who have been helpful during the passage of the Bill and in focusing on these amendments. I thank the stalwarts of our debates, the noble Lords, Lord Tope and Lord Shipley, the noble Earl, Lord Lytton, and my noble friend Lord Beecham, who brings with him not only a very serious understanding of local government and its challenges but the fantastic ability to deliver his thoughts in a light-hearted and challenging way. I also thank the noble Baroness, Lady Stowell, the noble Earl, Lord Attlee, and the noble Baroness’s predecessor, the noble Baroness, Lady Hanham.
The Earl of Lytton
My Lords, I follow the noble Lord in thanking the noble Baroness for her unfailing courtesy, and that of her Bill team, and particularly for keeping me in the loop as matters have proceeded through the other place. That was very welcome and I am extremely grateful for that, and I am sure I can say the same for the parish and town council movement for her consideration and care over this matter.
Lord Tope
My Lords, lest my silence should be misunderstood, I echo those sentiments from the Liberal Democrat Benches. I began this evening by paying tribute to the noble Baroness, Lady Hanham, and wishing well to our Minister now, the noble Baroness, Lady Stowell, who has performed eloquently this evening and succeeded in passing more than 100 amendments, which is getting close to a record. I echo the thanks that have been given to the Bill team for the great help they have given all of us in understanding this most interesting Bill.
Baroness Stowell of Beeston
That this House do agree with the Commons in their Amendments 102 and 103.