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George Freeman (Mid Norfolk) (Con)
1. What fiscal steps the Government are taking to support women who want to set up businesses.
The Chancellor of the Exchequer (Mr George Osborne)
The most important thing that we can do to support women in business is supporting the economy to grow. Today’s gross domestic product figures show that our economy grew by 0.7% in the last quarter, bringing four-quarter growth up to 2.8%. I am sure that that news will be welcome across the House. These numbers are a boost for the economic security of hard-working people. Growth is broadly based, with manufacturing growing fastest of all. It is more evidence that our long-term economic plan is working, but the job is not done, and it is clear that the biggest risk now to the recovery would be to abandon the plan that is delivering jobs and a brighter economic future.
George Freeman
May I congratulate the Chancellor on the appointment of Karren Brady as small business ambassador? Does he agree that our record of 500,000 new businesses started last year, bringing the total to 880,000 now run by women, and accelerating economic growth to 2.8% a year demonstrate that our long-term economic plan for an entrepreneurial recovery is working in the face of the pessimism and bankrupt business credibility of the Opposition?
Mr Osborne
My hon. Friend is right to draw attention to the remarkable success story of many women entrepreneurs. Karren is a role model for many of them, and she is helping with a mentoring programme to encourage more women to set up their own business and become entrepreneurs. It is all part of the picture where we now have a record number of women in work, and our proposals to bring in tax-free child care next year will help as well.
Lucy Powell (Manchester Central) (Lab/Co-op)
The Chancellor will know that one of the main barriers for women setting up a business is the cost of child care. Given that it has risen five times faster than wages in this Parliament, what help is he offering to women in this Parliament to meet those costs?
Mr Osborne
We have provided extra free child care, and we have increased the number of hours available, which has been a real help. We have also helped the parents, including mothers, of those on low incomes by extending the child care offer to younger children, and we will legislate for tax-free child care. I hope the hon. Lady can support that.
Caroline Nokes (Romsey and Southampton North) (Con)
22. Little Bee bakery in my constituency is owned by Melissa O’Dwyer, and it is a great example of a business set up from home that has expanded into an industrial unit, employs exclusively female staff and is growing. Does my right hon. Friend agree that this is an example of female entrepreneurs playing a critical part in economic growth?
Mr Osborne
I absolutely agree with my hon. Friend, and I congratulate Melissa on her business and her expansion plans. We are there to provide advice and support for women who want to grow their businesses. We are there to provide help, as I have set out, with tax-free child care. Above all, we are there to provide economic conditions in which businesses can grow and our long-term plan is, as the numbers show today, delivering that.
Sheila Gilmore (Edinburgh East) (Lab)
Of course, 0.7% is lower than 0.8% in the previous quarter, but leaving that aside—[Interruption.] With construction—[Interruption.]
Mr Speaker
Order. The hon. Member for Rochford and Southend East (James Duddridge) should go and lie down in a dark room. Take a tablet and restore your health—I am very anxious about your condition, and I suspect that the House will be too.
Sheila Gilmore
Construction is down as well, but to return to the question—[Interruption.] Well, the Chancellor did not return to it. Support through tax credits and child care tax credits has been crucial for many women going into self-employment for the first time. Proposed universal credit rules will make it a lot more difficult for self-employed people. Will the Chancellor speak to the Secretary of State for Work and Pensions to help him to get this right for women entrepreneurs?
Mr Osborne
First, the economy shrank by 7% of GDP when the Opposition were in office. It is striking that no Labour MP has yet got up to welcome the good economic news today. They cannot bring themselves to welcome the news that jobs are being created and the economy is growing and, yes, we are reforming our welfare system with universal credit to make sure that work always pays.
Stuart Andrew (Pudsey) (Con)
2. What assessment he has made of the effect of freezing fuel duty on the price of petrol.
The Economic Secretary to the Treasury (Nicky Morgan)
My right hon. Friend the Chancellor confirmed in the 2013 autumn statement that fuel duty will be frozen for the remainder of this Parliament. As a result of this Government’s actions, average pump prices are now 13p per litre lower than if the Government had implemented the previous Government’s fuel duty escalator and it will be 20p per litre lower by the end of this Parliament.
Stuart Andrew
Does my hon. Friend agree that it is only because of the difficult decisions that the Government have taken on deficit reduction that they have been able to provide this action on fuel duty? Does she further agree that if these difficult decisions on spending had not been taken, not only would it have been impossible to help motorists, it would have put at risk the economic recovery?
Nicky Morgan
My hon. Friend is entirely right. We all know of many businesses across our constituencies, as well as households, who rely on their vehicles—their lorries and vans—to get about. By 2015, the average motorist will be saving £680 a year and the average small business with a van will be saving £1,300 a year in their fuel costs.
Mr Russell Brown (Dumfries and Galloway) (Lab)
Will the Minister explain to my rural constituents in a low-wage economy area why of the 10 areas where the Chief Secretary has endeavoured to get a special rural fuel discount scheme into place, eight are in Lib Dem constituencies and two are in the hon. Gentleman’s constituency? Is that some kind of coincidence?
Nicky Morgan
The point is that there were very strict criteria relating to pump price thresholds, cost of transporting fuel and population density. That is how the list was arrived at and that is why the hon. Gentleman’s constituency was not included.
John Thurso (Caithness, Sutherland and Easter Ross) (LD)
On that latter point, I commend the Government for listening in a way that the Labour party never did and I commend the scheme, but may I draw to my hon. Friend’s attention one anomaly, namely the petrol pump at Bettyhill? It meets all the criteria of the others, but because of an anomaly in postcodes will not be included. Is there anything at all that can be done to help that one station?
Nicky Morgan
As I mentioned before, very strict criteria were laid down by the EU. The scheme was brought in by this Government, not by the last Government, to help rural areas. My hon. Friend might like to consider campaigning for the postcodes to be changed.
Mr David Hanson (Delyn) (Lab)
Rural north Wales has the highest petrol prices in the United Kingdom but is not included in the rural discount. Is that because we made the mistake of not electing a single Liberal Democrat Member of Parliament?
Nicky Morgan
The right hon. Gentleman seems to have forgotten that if the last Labour Government had continued in office prices would have been even higher, because it is this Government who reduced fuel duty.
Alun Cairns (Vale of Glamorgan) (Con)
3. What recent fiscal steps he has taken to support small businesses.
Damian Hinds (East Hampshire) (Con)
4. What recent fiscal steps he has taken to help high street businesses.
Margot James (Stourbridge) (Con)
7. What recent fiscal steps he has taken to support small businesses.
Andrew Jones (Harrogate and Knaresborough) (Con)
12. What recent fiscal steps he has taken to support small businesses.
The Chancellor of the Exchequer (Mr George Osborne)
We heard today that our economy continues to grow and we know that there is currently the greatest number of businesses in the UK on record—around 400,000 more than at the general election. We have supported that by reversing the previous Government’s increase in the small companies tax, undoing their jobs tax, cutting red tape, freezing fuel duty, taking the smallest firms out of business rates and helping the high street, and in a few months’ time, we will have our employment allowance, a £2,000 cashback on jobs, which will take almost half a million small firms out of employer national insurance altogether. Unlike others, we are unabashedly pro-business.
Alun Cairns
Small businesses recognise the supportive economic framework that the Chancellor has set out, such as reductions in corporation tax, national insurance and business rates, among many others, by recruiting more people than ever before. Will the Chancellor reassure me that he will not follow any advice from the shadow Chancellor, who called for a plan B and predicted a double and even a triple-dip recession?
Mr Osborne
There is no danger of that. In the last few days, even the Labour Ministers who served with the shadow Chancellor are not prepared to follow his advice. The important point here is that we have supported a private sector recovery, small businesses are absolutely at the centre of that, and the Prime Minister yesterday, at the Federation of Small Businesses, reinforced the point that we are there to do more to help small businesses and we encourage them to come forward with ideas for the Budget.
Damian Hinds
Town centre businesses in Alton, Bordon and Petersfield will welcome the Government’s package of help for high streets. As many young people rely on local shops and cafés for their first job, will my right hon. Friend update the House on what he is doing to make it easier to employ those young people and give them the key skills that they need to get on in life?
Mr Osborne
This year, there is the help for the high street and the £1,000 support for business rates for our high street shops, cafés and pubs. We are also introducing the employment allowance, which will take many small businesses out of employer national insurance altogether. Next year, we have the removal of the jobs tax altogether when someone under the age of 21 is employed. That is what we are doing to help the many businesses that my hon. Friend so ably represents in Parliament.
Margot James
There have been 3,000 new business start-ups in my borough of Dudley since 2010, many of which will benefit from increased research and development tax allowances, the national insurance rebate and the business rates cap. Does my right hon. Friend agree that while the fiscal measures he has introduced make a vital difference, the 2.8% growth in the economy announced today is sure-fire proof that his economic plan is working and that those small and medium-sized enterprises are now on a far better growth trajectory as a result?
Mr Osborne
I am delighted to hear about the success of businesses in the Dudley borough area and in my hon. Friend’s constituency. The Government made a choice that we were going to back a private sector recovery and that, in a time of limited resources, we would put our efforts into helping small businesses grow by cutting their business and employment taxes. That is what we have done, and we are beginning to see the fruits in the growth of jobs in the west midlands and across the whole country.
Andrew Jones
In the past 20 months, unemployment in my constituency of Harrogate and Knaresborough has halved. It is now has one of the lowest levels of unemployment in the country, particularly for young people. Much of that growth has come from our strong small business sector. What assessment has my right hon. Friend made of the impact that the employment allowance will have on improving the situation further, and does he agree that the anti-business rhetoric and measures proposed by some would destroy that progress?
Mr Osborne
The employment allowance will help many small firms that want to invest or take on a new member of staff. I saw that for myself when I visited a small business in Enfield that, as a result of the employment allowance, will take on an extra member of staff. That is the support we can give. It is up to those in this House who promote anti-business rhetoric to get up and explain how that could possibly help our economy. The truth is that by being anti-business, they are anti-recovery, anti-jobs, anti-investment and anti-the British people.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The latest figures show that net lending by banks to businesses has dropped by nearly £56 billion since 2010. The Chancellor is on record as supporting lending to small businesses, so what action is he taking to address the problem?
Mr Osborne
Credit conditions for small businesses have been one of the huge challenges since the banking crash. The better news is that conditions are starting to ease, as the most recent surveys show, but I am the first to say that the job is not done. That is why we are shifting the focus of the funding for lending scheme with the Bank of England onto small business lending and why we have introduced the British business bank, which did not exist before. We are doing all those things to support credit, including for small businesses.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Following that answer, will the Chancellor tell us how many firms have actually been helped by the business investment bank?
Mr Osborne
The British business bank is lending to intermediaries that support non-bank lending to small firms. [Hon. Members: “How many?”] There was no British business bank before. The only bank that the Opposition helped to take into public ownership was the Royal Bank of Scotland, because they completely failed to regulate it.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
One of the ways that the Treasury can help small businesses is by giving them a better chance of winning Government contracts. What is the Chancellor doing to use his Department’s clout across Whitehall to ensure that those contracts are not just snaffled up by the big guys?
Mr Osborne
That is a huge challenge for any Government and any bureaucracy, but I am pleased to report that under this Government, because we have focused all Departments on trying to increase their procurement from small firms, that has gone up from around 10% to around 20% of Government procurement. That is a big step forward, but I am the first to say that the job is not done. We want more procurement from small firms, not least because they are often the most innovative and entrepreneurial in the country.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Business rates are one of the biggest concerns for employers, yet they are still going up and up under this complacent Chancellor. The autumn statement saw some relief for retailers, but will the Government commit to giving genuine support to all small and medium-sized enterprises, which are the lifeblood of our economy, by matching our pledge to cut and freeze business rates for all small firms—not just those in retail, but manufacturers, high-tech firms and other job creators too?
Mr Osborne
Business rates rocketed under the last Government. First, we have taken about 400,000 of the smallest businesses out of business rates altogether, a scheme that the Labour Government wanted to bring to an end. Secondly, we have capped the increase at 2%, so we have protected businesses from inflation. Thirdly, we have chosen to provide particular support to our high street stores, and I am very disappointed that the hon. Lady does not support that. It is interesting that another of the Labour spokespeople has got to their feet, but not one of them has yet—20 minutes into Treasury questions—welcomed the good economic news today.
Sir Malcolm Bruce (Gordon) (LD)
Is my right hon. Friend aware of changes in the VAT export rules that are causing concern among auctioneers, damaging EU trade and putting them at a competitive disadvantage? Will he look into this, and try to ensure that Her Majesty’s Revenue and Customs makes the system manageable?
Mr Osborne
I will make sure that the specific issue is looked at and that the right hon. Gentleman can meet my hon. Friend the Exchequer Secretary, who handles such tax and VAT issues.
Ms Margaret Ritchie (South Down) (SDLP)
There is evidence that Ulster bank deliberately bankrupted some viable businesses to make more profit, according to one of the Government’s key advisers, Lawrence Tomlinson. What is the Chancellor going to do about this to protect the small businesses affected by Ulster bank and by RBS?
Mr Osborne
The revelations by Tomlinson shocked everyone, and the business practices of RBS, including Ulster bank, are now under the microscope. Of course, these revelations would not have come to light if we had not asked Tomlinson to do his work and had not published the Tomlinson report.
We are particularly aware of the challenge in Northern Ireland, with the weakness of the Northern Ireland banking system—affected by what has happened in the Republic and the fact that RBS is such an important player through Ulster bank—and we are in constant discussion with the Northern Ireland authorities. I know that my hon. Friend the Financial Secretary is talking to the Northern Ireland Executive about precisely what we can do to help to protect the Northern Ireland economy, as RBS implements its bad bank plan.
Mr Andrew Tyrie (Chichester) (Con)
The Prime Minister said yesterday:
“I am a tax-cutting Tory”.
So am I. Does the Chancellor agree that, when resources allow, cuts in tax are the best possible tonic that the Government can provide to small businesses? Does he further agree that the best spur to incentives for small businesses is to cut the marginal rates of corporation and personal tax as soon as he can?
Mr Osborne
I am a low-tax Conservative as well, and I hope that I am in good company on the Government side of the House. We have made reductions in tax. The small companies tax rate was due to go up to 22% under the Budget plans voted on by the Labour party, but we have reversed that and reduced it to 20%. We are now of course bringing the main headline rate of corporation tax down to 20% as well, and getting rid of the complicated taper. That is all further evidence to support the ambition of reducing marginal tax rates for businesses.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Could the Chancellor and I make a deal that I will start to welcome any measure of improvement in the economy if he stops blaming the whole economic world meltdown on the previous Labour Government?
On small businesses, many people find crowdfunding and crowdsourcing a real way to start businesses and get the finance to do it; women, in particular, are coming through that route. Will he meet an all-party group of MPs to talk about the proposed regulation of crowdfunding so that we do not strangle a rather nice baby at birth?
Mr Osborne
I am glad that the hon. Gentleman welcomes the better news. Indeed, I think that unemployment in his constituency has fallen by 20%, which is further good news. It is the first time in years that I have heard him try to defend the record of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown): since he is not here, the hon. Gentleman has to do it for him.
The point that the hon. Gentleman makes about crowdsourcing is a serious one. We are looking at this new market and at what, if anything, the Government should do to support it. It is of course growing without Government support, but we are actively looking at it, and I would very happily consider any positive suggestions he has on what more we can do to support crowdfunding.
Chris Heaton-Harris (Daventry) (Con)
5. What recent steps he has taken to reduce income tax.
The Chief Secretary to the Treasury (Danny Alexander)
Since 2010, the Government have increased the income tax personal allowance by more than 50% and it will reach £10,000 this April. That will cut the income tax bills of more than 25 million working people by £700 a year. We can afford to do that because we have stuck to a credible economic plan that is creating jobs and supporting growth, as is shown by today’s excellent figures.
Chris Heaton-Harris
That means that 2.4 million people have been lifted out of paying tax altogether. In my constituency, thousands of people are no longer paying tax and are in profitable work. My constituency has a 1.9% unemployment rate and thousands of jobs are coming to Daventry. Does that not show that for my constituents, the Government’s long-term economic plan is working?
Danny Alexander
I agree wholeheartedly with my hon. Friend. I can update him on one point of fact. By April this year, we will have taken not 2.4 million low earners out of tax, but 2.7 million low earners.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Given that the married couples tax break helps just one sixth of families with children and one third of married couples, is it an example of the Government’s well-targeted support?
Danny Alexander
I would prefer it if those resources were used to fund further increases in the personal allowance. However, the hon. Gentleman should welcome the fact that the Government are saving thousands of people in his constituency £700 a year in income tax that they would be paying if his party had stayed in office.
Ian Swales (Redcar) (LD)
Raising the income tax threshold to £10,000 is putting more money into the pockets of the low-paid, and their spending is helping to drive the recovery. Will the Chief Secretary consider increasing the threshold to £10,500 in the forthcoming Budget?
Danny Alexander
My hon. Friend is right to say that this policy is helping people on low incomes, as well as working people up and down the country, many of whom have household budgets that are under pressure. I would like the income tax personal allowance to be higher. As a party, we have set the goal of a £12,500 personal allowance in the next Parliament. In the same way, the £10,000 goal for this Parliament was set by the Liberal Democrats.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I note that, despite a number of opportunities, the Chancellor did not mention the cut to the 50p rate of tax. I wonder whether the Chief Secretary to the Treasury will refer to it in answering a simple question. Will he confirm that people who are earning more than £1 million have received an average income tax cut of more than £100,000 this year—yes or no?
Danny Alexander
The figures from HMRC show that the cost of reducing the 50p rate to 45p was about £100 million. It is precisely because the tax was not raising any money that I was willing to support the decision to reduce it, on the basis that we would raise much more money from the same people in different ways. The House might like to be updated on one of those measures. The annual tax on enveloped dwellings—the mansion tax for tax dodgers—is raising five times as much as we thought it would.
Keith Vaz (Leicester East) (Lab)
6. What discussions he has had with the Secretary of State for Health on introducing an additional tax on drinks with a high sugar content.
The Exchequer Secretary to the Treasury (Mr David Gauke)
There are difficulties of principle and practice with using tax instruments to promote public health. Unlike smoking, where any level of consumption can have damaging effects, the consumption of most drinks in moderation can be to the benefit, rather than the detriment, of an individual’s health. The Government are instead working with industry to reduce the nation’s calorie intake.
Keith Vaz
The Academy of Medical Royal Colleges has called for a 20% tax on sugary drinks, stating that it would provide enormous health benefits and yield £1 billion to the Treasury. We spend £9.8 billion a year on dealing with type 2 diabetes and its complications. Will the Exchequer Secretary consider that idea for inclusion in the next Budget? At the very least, will he meet a delegation of those who want to make the argument in favour of such a tax?
Mr Gauke
I am grateful for the right hon. Gentleman’s remarks. This is a problem of over-consumption and tax can often be a blunt instrument in dealing with such problems. My hon. Friend the Economic Secretary will be more than happy to meet the right hon. Gentleman and a delegation to discuss the matter.
Mr James Gray (North Wiltshire) (Con)
Does the Exchequer Secretary agree that tackling obesity in children should be a matter for parents, teachers and others who work with children, and that any tax increase such as that proposed by the right hon. Member for Leicester East (Keith Vaz) would be seen as a Treasury tax grab on those who enjoy Pepsi cola, Coca-Cola and Fanta?
Mr Gauke
My hon. Friend makes a perfectly fair point. It is right that the Government take steps, through the public health responsibility deal, to encourage companies to reduce calories in their products, and that we encourage participation in sport. That is more effective and targeted than a tax increase.
Greg Mulholland (Leeds North West) (LD)
8. What steps he has taken to reduce the cost of living for those on low incomes.
The Chief Secretary to the Treasury (Danny Alexander)
In addition to lifting the income tax personal allowance, which I mentioned earlier, the Government are supporting working households’ income through other measures such as freezing fuel duty, supporting a council tax freeze and, most importantly, sticking to an economic plan that is getting hundreds of thousands more of our fellow citizens back into work.
Greg Mulholland
I thank my right hon. Friend for that answer. The best way to help people and families on lower incomes is to take them out of tax. What is the effect of the increase in the tax threshold compared with the last Government’s disgraceful decision to abolish the 10p tax rate?
Danny Alexander
That is a very good question. The tax threshold increases that we have presided over will have taken 2.7 million people out of tax. The personal allowance is a zero rate, whereas a 10p rate would halve the rate of income tax, so raising the personal allowance is literally twice as good.
Nia Griffith (Llanelli) (Lab)
I would like to draw the Chief Secretary’s attention to people who earn less than £10,000 a year and cannot afford to run a car. With the incredible squeeze on tax credits through low inflation rises and the taper being made even steeper, families in that situation, who are the working poor, are being hit the hardest. What will he do for those people on tax credits?
Danny Alexander
The hon. Lady is right, of course, that the financial crisis that took place when her party was in office cast a long shadow over the personal finances of millions of people in this country. However, she omits to mention that many of the people she refers to were paying income tax under the previous Government, and it is thanks to this Government’s policies that they are no longer doing so.
Heather Wheeler (South Derbyshire) (Con)
19. I want to extend the previous question to the difficulties of pensioners who are stuck on low-performing annuities. How will the Government open up the market and improve annuities for the future?
Danny Alexander
We have already taken steps to ensure that the annuities market works better. We are examining it further to ensure that people who have saved for a pension can get a proper deal in retirement.
Chris Leslie (Nottingham East) (Lab/Co-op)
When it comes to the cost of living, does the Chief Secretary now agree that it was a big mistake for the Chancellor to issue such dodgy statistics last week, desperately pretending that the public have never had it so good? The Government’s first statistical dodge was adding in only tax changes that they like and ignoring tax rises and cuts to tax credits, which, by the way, disproportionately hit women. Their other dodge was trying to prove that the rich were really doing very well by leaving out that thing that they do not like talking about today—the millionaires’ tax cut. They were such blatantly skewed figures—is the Chief Secretary not just a little bit embarrassed about such statistical trickery?
Danny Alexander
A vast amount of words, but not one of them welcoming the most important set of statistics today—the growth figures that have been published this morning. The year 2013 was the first calendar year since 2007 with economic growth in all four quarters, and I wish the hon. Gentleman had welcomed that.
Chris Leslie
Week after week, month after month, we come to the Dispatch Box and beg the Government to do something about the cost of living crisis, but all we hear from the two Government parties is, “Crisis? What crisis?” How out of touch can they possibly be? I want to ask the Chief Secretary a simple question. Does he really, genuinely think that the British public are better off today than when he came to office?
Danny Alexander
I know for a fact that the British public are better off than they would be if the hon. Gentleman’s party had stayed in office. He’s got a cheek, he really has.
Again, no welcome for the growth figures or the fact that, last week, we saw the largest quarterly rise in employment in our country’s history. No welcome for the big tax cuts for working people in this country or the range of measures that we have taken to ask the wealthiest to pay more. Those are the things that are getting this country back in the right direction, something that the hon. Gentleman’s party would fail to do.
Andrew Griffiths (Burton) (Con)
9. What assessment has he made of the effect on the brewing industry of the reduction in beer duty announced in the 2013 Budget.
The Economic Secretary to the Treasury (Nicky Morgan)
The Government reduced the tax on a typical pint of beer in the Budget 2013, and ended the beer duty escalator. A British Beer and Pub Association survey suggests that 76% of its members have increased investment, and 61% are employing more staff following the beer duty changes.
Andrew Griffiths
On Friday I will open a new bottling plant at Marston’s brewery in my constituency—a £7 million investment made possible because of the Chancellor’s decision to cut beer duty. In the past six months, beer sales have gone up for the first time in 10 years, and 120 million extra pints have been sold. Does the Minister agree that the Chancellor was right to cut beer duty to get growth, and can we have the same again please, George?
Nicky Morgan
I thank my hon. Friend very much indeed. He ran a magnificent campaign before the Budget last year in representing Burton, which I understand is the home of British brewing. By ending the beer duty escalator at Budget 2013, it is already assumed in the public finances that beer duty will rise by less than other alcohol duties this year. Pubs and brewers will also benefit from other actions that we have taken to support businesses, including support with business rates and ending employer national insurance contributions for those under 21, but I hear what my hon. Friend says.
Mr David Heath (Somerton and Frome) (LD)
Knowing that the Government would always wish to recognise and celebrate cultural diversity, will the Minister ensure that anything done for beer is also done for cider?
Nicky Morgan
I hear the hon. Gentleman’s request. I am sure he is aware that in the 2010 Budget the Government reversed the previous Government’s 10% above-inflation rise on cider duties, and as he will know, the Treasury keeps all duties under review.
Yvonne Fovargue (Makerfield) (Lab)
10. What recent assessment he has made of the level of child poverty.
The Economic Secretary to the Treasury (Nicky Morgan)
Estimates of child poverty are published in the National Statistics “Households below average income” series. The Government remain committed to ending child poverty, but strongly believe that looking at relative income in isolation is not a helpful measure to track progress towards that.
Yvonne Fovargue
There are now more than 1,000 food banks throughout the country, and the Brick food bank in my constituency is forced to give out cold food packs and kettle packs to some working families who cannot afford to eat or heat. Will the Minister explain why the number of working families with children in relative poverty is increasing?
Nicky Morgan
I thank the hon. Lady for her question. As a Member of Parliament who has held a number of surgeries in my local food bank in Loughborough, I know that there is a variety of different reasons for people having to rely on food banks, and I am sure she will recognise that, under this Government, jobcentres are now able to direct people to food banks. Work remains the best way out of poverty, and the number of children living in workless households has fallen by more than 100,000 since the Government came to office.
Mr Brooks Newmark (Braintree) (Con)
Does the Minister agree that Labour’s abolition of the 10p tax rate drove more households into child poverty? By raising the tax threshold to £10,000 and creating more jobs than ever before, this Government are reducing child poverty.
Nicky Morgan
At the heart of my hon. Friend’s question is the fact that, as I said, work remains the best way out of poverty, and the number of children living in workless households has fallen since this Government came to office. He is absolutely right, and we must do more to get people into jobs and therefore benefit from changes to the personal allowance threshold.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
16. The Institute for Fiscal Studies estimates that an extra 1.1 million children will be living in poverty by 2020 as a direct result of this Government’s economic policies. Today, research from Demos shows that children living in poverty are also less likely to do well at school. What will the Government do to prevent the multiple and lifelong effects of children living in poverty?
Nicky Morgan
On poverty projections, in October 2012 the IFS suggested that the number of children in relative poverty would fall by 100,000 in 2010-11, but in fact it fell by 300,000. If the hon. Lady wishes to talk about educational attainment, I am sure she will join me in welcoming the news yesterday that thanks to strong reforms of the education sector by the Secretary of State for Education, more schools are now offering better education than under the previous Government.
Mr Julian Brazier (Canterbury) (Con)
Does my hon. Friend agree that, as the Centre for Social Justice has argued for a long time, we must tackle the underlying drivers of poverty—family breakdown, illiteracy and innumeracy, substance abuse among parents and so on—as well as put a welcome emphasis, as she has done, on getting people back into work?
Nicky Morgan
I entirely agree with my hon. Friend. The Government remain committed to ending child poverty by 2020 and to the Child Poverty Act 2010. We understand that poverty is about more than income alone. As he has said, we need to focus on the root causes, one of which is poor mental health, in which I have taken a particular interest.
Stella Creasy (Walthamstow) (Lab/Co-op)
11. What recent assessment he has made of the effect of domestic energy prices on consumer price inflation.
The Economic Secretary to the Treasury (Nicky Morgan)
Consumer price inflation was 2% in December. That is the first time it has been at or below the 2% target since November 2009. It is well below half the peak of 5.2% in September 2011. The Office for Budget Responsibility is responsible for producing independent economic and fiscal forecasts, and factored in energy prices in the latest forecasts for consumer price inflation.
Stella Creasy
Given what the Minister says about inflation, in plain English, can she tell us whether she accepts that the energy bills of my constituents and those of all hon. Members have gone up this winter? Does she think that is good or bad for them and our economy?
Nicky Morgan
I thank the hon. Lady for her questions. Yes, energy bills have gone up, but how come she voted for a decarbonisation target last autumn that would have added a further £125 to all average bills?
Miss Anne McIntosh (Thirsk and Malton) (Con)
Will my hon. Friend look at the impact of domestic energy prices on off-grid customers and try to find common measures to enable them to access lower energy prices?
Nicky Morgan
I certainly will do so. I am sure my hon. Friend welcomes the moves the Government have made so far—in the autumn statement 2013—to cut £50 off household bills. Of course, we would like to do more, working with the companies.
Mrs Linda Riordan (Halifax) (Lab/Co-op)
23. What assessment has been made of the impact on fuel poverty of the proposed changes to the carbon emissions reduction obligation funding, which will prevent insulation work from being carried out on hard-to-treat cavity properties, particularly in the north?
Nicky Morgan
I am interested to hear the hon. Lady’s question, as she also voted for the decarbonisation target that would have added £125 to bills. However, I am sure she welcomed the winter fuel payments made to 14,000 people in her constituency in winter 2012-13. This Government are on the side of helping people to deal with the rising cost of their fuel bills. In autumn statement 2013, we extended the energy company obligation target, but we have certainly not given up on it.
Mr Aidan Burley (Cannock Chase) (Con)
13. What assessment he has made of the level of recent job creation in the private sector.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The latest data published by the Office for National Statistics on public and private sector employment are available up to September 2013. Between the first quarter of 2010 and the third quarter of 2013, private sector employment increased by 1.67 million, more than offsetting a decrease in public sector employment of 433,000. Over the period, for every public sector job lost, 3.9 have been created in the private sector.
Mr Burley
In Cannock Chase, 4,000 more people were employed in the private sector in the 12 months to June 2013 than in the same period in 2012, an increase of more than 12%. Unemployment is down 40% in Cannock Chase since May 2010. What further action is the Treasury taking to make it easier for small businesses in my constituency to take more people on?
Mr Gauke
To highlight one measure, the introduction of the employment allowance in April will mean that the first £2,000 of jobs tax will not need to be paid. It is worth noting that some believed it was not possible that growth in private sector job creation would outweigh public sector jobs lost. Indeed, in 2011 the shadow Chancellor said that that whole idea was a “fantasy”.
Sammy Wilson (East Antrim) (DUP)
As the Chancellor is keen for an Opposition Member to endorse his growth figures, I welcome them—[Hon. Members: “Hooray!”] However, a report yesterday indicated that much of the growth in the private sector has been concentrated on London and not on other parts of the United Kingdom. What policies is he undertaking to ensure that the growth we are experiencing is experienced by cities across the UK?
Mr Gauke
First, may I express my gratitude for the first part of the hon. Gentleman’s question? As to the second part, he should be aware that in 2013 the focus on London changed and that only one in five of the new private sector jobs was created in London. Indeed, over the course of this Parliament employment is up in every region and nation of the United Kingdom.
Jesse Norman (Hereford and South Herefordshire) (Con)
14. If he will extend eligibility for child benefit and tax credits to the households of young people who are undertaking apprenticeships.
The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government continue to support apprenticeships by funding 16-to-18 apprenticeships for every employer who wants to offer them and every young person who secures a place, and by promoting the uptake of apprenticeships among employers and implementing reforms to drive up apprenticeship quality. When a young person takes up an apprenticeship, they are classed as in employment with training. From that point, benefits for the young person paid to their parents cease.
Jesse Norman
I thank my hon. Friend for that reply. The number starting apprenticeships in my constituency has almost doubled from 630 in 2009 to 1,100 last year. Will the Minister join me in congratulating all those apprentices and their employers? Does he share my view that this is one more sign that the Government’s long-term economic plan is working?
Mr Gauke
I entirely agree with my hon. Friend. His experience in Hereford in not unique: the number of apprenticeship starts across the nation has gone up by 82% in the course of the past three years. He is absolutely right to describe that as part of a long-term economic plan.
Roberta Blackman-Woods (City of Durham) (Lab)
15. What recent progress his Department has made on implementing the national infrastructure plan.
The Chief Secretary to the Treasury (Danny Alexander)
I published the updated national infrastructure plan on 4 December 2013. It includes an update on the Government’s top 40 priority investment projects, including a pipeline of £375 billion-worth of planned investment, of which the Government have contributed £100 billion in capital over the long term.
Roberta Blackman-Woods
Last month, after detailed analysis, the Financial Times reported that it found progress in infrastructure schemes to be slow, if not minimal, including on many of the 40 priority projects launched to great fanfare by the Government. What will the Minister do to rectify the situation and get infrastructure projects delivered?
Danny Alexander
I do not think that that analysis is correct. Thirty-six transport projects worth more than £1.7 billion have been delivered, upgrades to more than 150 railway stations and 350 flood and coastal erosion schemes have been completed, superfast broadband last year passed an extra 200,000 premises and electricity generation schemes are being completed across the country. Just last week we completed, several months ahead of schedule, the M4 and M5 managed motorway projects near Bristol—another example of infrastructure being delivered by this Government.
Stella Creasy (Walthamstow) (Lab/Co-op)
T1. If he will make a statement on his departmental responsibilities.
The Chancellor of the Exchequer (Mr George Osborne)
The core purpose of the Treasury is to ensure the stability and prosperity of the economy.
Stella Creasy
When the right hon. Gentleman was first asked to vote on the issue, the figure was 1 million; now it is 5 million—that is, people in hock to payday lenders. Does the Chancellor therefore regret voting against the cap on the cost of credit so many times?
Mr Osborne
I was the shadow Chancellor for five years and never once did the Labour Government propose a cap on payday lending. It is this coalition Government who are introducing a cap on payday lending. I would have thought that of all people the hon. Lady, considering her campaign, would welcome that.
Philip Davies (Shipley) (Con)
T2. Does the Chancellor agree that the previous Government led us to financial ruin not through taxing us too little but by spending too much, and that the solution to the problem is to reduce spending to affordable levels? Will he therefore guarantee to plug the remainder of the deficit through spending reductions, rather than through tax rises on hard-working and hard-pressed families?
Mr Osborne
While no responsible Chancellor rules out tax changes, I believe the remainder of our deficit reduction plan can be achieved by reducing spending. Indeed, the reduction in the deficit has contributed to the economic stability that has been a platform for the economic growth we have seen. Perhaps the shadow Chancellor will get up and welcome that.
Ed Balls (Morley and Outwood) (Lab/Co-op)
After three damaging years of flatlining in our economy—[Interruption.]
Mr Speaker
Order. Some people are slow learners, so I will say it slowly: keep calm, be patient; Government Members, you have got the man at the Box for whom you were waiting, and now you should just listen. In tennis, new balls come after the first seven games of a match and subsequently after every nine, so patience is required.
Ed Balls
After three damaging years of flatlining, today’s growth figures are welcome, but everything we have seen today from the Chancellor shows he just does not understand that for working people facing a cost of living crisis, this is still no recovery at all. Last week, the Chancellor and the Prime Minister tried to use dodgy figures to tell people they had never had it so good. Why will he not today admit the truth: he has failed to get the deficit down, and since he came to office, working people have been not better off, but worse off?
Mr Osborne
I am not sure that that was worth waiting for. Since we last met, there has been a very important Labour economic announcement, and one that we wholeheartedly support: the decision to keep the right hon. Gentleman in his job until the general election. He welcomes the economic news through gritted teeth, because he said not only that it would not happen, but that it could not happen if we pursued our economic plan. He predicted that jobs would be lost, but 1 million have been created; he predicted that the deficit would go up, but it has come down; he predicted there would be no economic growth, unless we borrowed and spent more. He has been wrong on all these things. What the Opposition need are new crystal balls.
Ed Balls
Very good, Chancellor—a joke about my name being Balls. Fabulous.
The reality is that business investment is still weak, housing demand is outstripping supply, the savings ratio is falling and the average working person is £1,600 a year worse off than they were in 2010. Let me ask the Chancellor about the one thing he has refused to talk about now for four days. He has delivered one massive tax cut for the richest 1% earning more than £150,000, when everybody else is worse off. The Prime Minister and the Mayor of London are now saying that they want to cut the top rate of income tax again, to 40p. Is that really the Conservative party’s priority? If the Chancellor still believes that we are “all in this together”, why will he not stand at the Dispatch Box and rule out another top-rate tax cut from the Conservatives in the next Parliament? Come on, George: stand up and rule it out.
Mr Osborne
I will tell the right hon. Gentleman what the big tax cut was this Parliament: it was for working people through our increase in the personal allowance to £10,000. After last week, it is clear that the shadow Chancellor has learned absolutely nothing from the economic mess he brought upon this country. He said that Labour should have spent more money in the boom; he has set out fiscal plans that allow billions more of borrowing; and on the top rate of tax, he announced a plan that was attacked by Labour Ministers whom he served with in government, by the people who lent the Labour party money and by credible business people across the country—and his costings were shot down by the Institute for Fiscal Studies last night. There cannot have been a more disastrous policy launch in the history of the modern Labour party. On the day we learn that our economy continues to grow, is it not clear that the anti-business Labour party is now the biggest risk to the economic recovery?
Stephen Gilbert (St Austell and Newquay) (LD)
T3. That seems to be game, set and match.The European Commission is considering the removal of the aggregates levy exemption, which would affect the Cornish china clay industry and put up to 500 jobs at risk. Will my right hon. Friend confirm that the Government will do all they can to maintain the exemption and protect these vital jobs?
The Chief Secretary to the Treasury (Danny Alexander)
Yes, I can confirm that. A state aid investigation has been opened, so we are compelled under European law to suspend the exemption, but, working with the industry, we have provided a very robust response to the Commission outlining why the exemption is justified. We remain confident that the Commission will find that the exemption does not amount to state aid.
Andy Sawford (Corby) (Lab/Co-op)
T8. Her Majesty’s Revenue and Customs is investigating 12 employment agencies in my constituency for underpayment of the minimum wage. Two investigations have been concluded, penalties imposed and money repaid to local workers, but local people simply do not understand why the Government will not name and shame those two agencies. I think the Government are wrong. Will they reconsider?
The Economic Secretary to the Treasury (Nicky Morgan)
I think the hon. Gentleman raised this topic in the debate on the national minimum wage. I am very happy to take this away and to have a conversation once I have had a chat with Treasury officials.
Harriett Baldwin (West Worcestershire) (Con)
T4. This time last year, the shadow Chancellor said that the economy would get worse. Can I lob the following question to the Chancellor and ask him how that prediction turned out?
Mr Osborne
The economy has grown by 2.8 % over the past four quarters, which is the point. First, when the shadow Chancellor was in office, he predicted that there would be no more boom and bust—we had the biggest boom and the biggest bust—and secondly, he predicted that there would be no recovery unless we borrowed and spent our way into economic risk, which has turned out to be untrue. I do not know why anybody in the Labour party still listens to his predictions at all.
Mr Speaker
Order. Mr Cryer will be heard. The House should hear him. His constituents should hear him. It is really just a matter of courtesy.
John Cryer
The Liberal Minister used to be a loyal servant of Britain in Europe. Does he still agree with its founding principles?
Danny Alexander
I still very much take the view that Britain is better and stronger as a full member of the European Union and that membership of the European Union is vital for our trade and for 3.5 million jobs in this country, which is why I will resist any attempts to take Britain out of the European Union.
Jason McCartney (Colne Valley) (Con)
T5. I do not know whether the shadow Chancellor has been to Yorkshire recently, but if he does come up north, he will see that, in Colne valley and Huddersfield, manufacturing is surging, whether it is Magic Rock brewery exporting to Australia, Camira fabrics selling its textiles to the Los Angeles transit system or even Newsholme foods selling black puddings to Spain. Will the Chancellor please continue to reject the doom-mongering, mithering and class warfare from the Labour party and continue with his long-term economic plan?
Mr Osborne
I was in Pudsey the other day seeing a very successful manufacturing business near to my hon. Friend’s constituency. What was interesting was that that business is now exporting to China, which is a total reversal of what we have seen in the textile trade over the last few decades. I am very willing to come and see my hon. Friend and perhaps taste some of that delicious black pudding that the Spanish are buying.
Alison Seabeck (Plymouth, Moor View) (Lab)
Thousands of small businesses are often unaware that they are sitting on a bit of a time-bomb: embedded swaps sitting within personal loans, often sold to them without their knowledge. What will the Chancellor do to bring that back into the Financial Conduct Authority review to ensure that these swaps, which are currently not subject to any regulation, are regulated?
Mr Osborne
The FCA is looking at the whole issue of swaps and how they were sold to small businesses, and clearly, considerable sums of compensation are going to be paid. I will look at the specific point that the hon. Lady makes. If she believes that there is a group that are not currently included that should be included in that work, I will take a close look at it personally and get back to her.
Chris Kelly (Dudley South) (Con)
T6. Last week, we saw the sharpest quarterly increase in the number of people in work since records began. Does my right hon. Friend agree that that is more evidence that the Government should stick with their long-term economic plan to reduce the deficit and create more jobs, which is already providing a record number of people with the stability and security of a regular pay packet from firms such as Steelco in Dudley, which I visited last week?
Mr Osborne
I know from visits with my hon. Friend to the manufacturing businesses of Dudley that he is a powerful supporter of their interests in growing those businesses and taking on more people. Unemployment in Dudley has fallen by 19 % since he started to represent that town. I welcome his support. Together let us make sure that we have a business-led recovery and a recovery in the west midlands and that we reject the anti-business approach of the Labour party.
Mr Geoffrey Robinson (Coventry North West) (Lab)
The whole House has heard the Chancellor proclaim over the last three years that when the recovery comes—as it will—it will be a different kind of recovery, based on investment and, indeed, investment-led. Is it not the case that business lending is stagnating, if not falling, that capital investment in the much-heralded infrastructure plan is 7.4% lower than it should be, and that what we are actually seeing is an economic-pick-up based on consumer spending? Does that not send a warning signal to the Chancellor? Instead of boasting about the situation, he should be doing something about it.
Mr Osborne
Given his experience, the hon. Gentleman must surely consider the growth of the car industry in Coventry, and in the west midlands as a whole, to be as strong as any growth that he has seen in his career. We are exporting cars at a rate at which we have not exported them since the early 1970s. Of course we want to see more business investment and more exports, but what we are seeing now is a rebalancing of the economy. The private sector is growing, and the number of jobs is increasing throughout the country—and that includes the west midlands, an area in which the number of jobs fell during the boom.
Incidentally, given his business experience, I suspect that the hon. Gentleman does not support for one moment the proposals announced by the shadow Chancellor over the past week.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
T7. In south Essex, £1.5 billion is being invested at London Gateway, £500 million is on the table for a new power station, £180 million is being invested at Lakeside, and the regeneration of Basildon town centre is about to begin. Does my right hon. Friend agree that those inward investments in my area indicate that our long-term economic plan is working, leading to rising growth and falling unemployment for the benefit of my constituents?
Mr Osborne
I entirely agree with my hon. Friend. I congratulate him on the work that he has done to bring that investment into his constituency, and to create jobs and opportunities for the people whom he represents. It is important for us to send a message to the world that we are open for business and open to investment, and because we are doing that, we are now a go-to destination for world investment. Can my hon. Friend imagine the impact on jobs and investment in his constituency if we adopted the Labour party’s approach?
Mark Durkan (Foyle) (SDLP)
May we have an update on the Chancellor’s intention to introduce a new regime for annually managed expenditure? Will the overall welfare cap of which he has spoken include a cap within a cap for welfare spending in Northern Ireland?
Mr Osborne
We are not proposing a cap within a cap, as the hon. Gentleman puts it, but we are proposing a welfare cap. We have set out the details of the benefits and the annually managed expenditure that will be part of the cap, but we will announce further details about the level of it at fiscal events later this year.
Jesse Norman (Hereford and South Herefordshire) (Con)
T9. Next week I shall be hosting an event to celebrate independent retailers, cafés and pubs in the city of Hereford, in particular Hat Trick, La Madeleine and The Barrels. I greatly welcome today’s excellent economic news. Does the Chancellor share my view that low taxes are a vital means of helping and encouraging small businesses to grow and create jobs?
Mr Osborne
It sounds very tough, campaigning in Hereford.
I thank my hon. Friend for bringing those businesses to the attention of the House, and congratulate him on the support that he has given to the economic policies that are helping them to grow. He is absolutely right: we must continue to support firms of that kind. High street shops, pubs, cafés and the like will, of course, benefit from the £1,000 rate relief which will be introduced this spring, and which will be a huge help to all—or most—of the businesses on the high streets of Hereford.
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
Average weekly gross pay in my constituency has fallen by 32.5% since 2010. Why?
Mr Osborne
The person who had the best answer to that question was the head of the Institute for Fiscal Studies, who said very clearly that the reason why the country was poorer was the very deep recession. He said that we have had the biggest recession in 100 years and that it would be astonishing if household incomes had not fallen and earnings had not fallen. This country is poorer because of the disastrous economic policies of the shadow Chancellor. It is under this Government that the economy is growing and jobs are being created, including jobs in the hon. Gentleman’s constituency.
Duncan Hames (Chippenham) (LD)
We know that the Chancellor is keen to cut high marginal rates of tax. Does he appreciate that an advantage of the further increase in the personal allowance for which the Liberal Democrats are calling is that it would almost entirely scrap the effective 30% marginal tax rate faced by those who are aged over 65 and whose incomes amount to no more than the national average?
Danny Alexander
May I first take this opportunity to congratulate my hon. Friend, and my hon. Friend the Member for East Dunbartonshire (Jo Swinson), on recently becoming parents? He is quite right to suggest that further increases in the personal allowance would benefit all parts of the population. The Chancellor will make announcements in the Budget in March and, as a party, we will be campaigning for further increases in the personal allowance, precisely to ensure that the benefits are spread as widely as possible.
Sex Establishments (Regulation)
(10 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Diana Johnson (Kingston upon Hull North) (Lab)
I beg to move,
That leave be given to bring in a Bill to make provision for the statutory regulation of sex establishments; to amend the Local Government (Miscellaneous Provisions) Act 1982; to require local authorities to adhere to the existing voluntary licensing framework for sex establishments; and for connected purposes.
Many right hon. and hon. Members’ constituents will have raised concerns about the changing shape and make-up of their local high streets and town centres, with the proliferation of payday lenders, of gambling dens with fixed odds betting terminals and of lap-dancing clubs. Those clubs have increasingly become a feature of the high streets in many towns and cities over the past 20 years. Many communities often feel that this is happening all around them and that they have little say in the matter. My Bill is about empowering all local communities to have their views heard, in particular their views about lap-dancing clubs. It is also about giving local people the ability to feel that they can start to reclaim their high streets.
Lap-dancing clubs are a fairly new phenomenon in the UK—they first appeared outside London in about 1995—but their growth has been rapid, and that has caused real concern. Some people will ask why that concern exists. Chris Knight is the vice-chair—an apt title, given the nature of the lap-dancing industry—of the Lap Dancing Association. He said on Radio Humberside this morning that the clubs were
“legitimate businesses and any attack on any business is ridiculous”.
According to Mr Knight, elected MPs should keep their noses out of that business. Let us be clear: this man also opposed the previous reform of the law in this area. I believe that if members of the public are concerned about this, MPs should be concerned too.
As well as the specific concerns about the links between the sex entertainment industry and coercion and human trafficking, there is a widespread view that lap-dancing clubs can contribute in a negative way to the general character of an area and detract from the residents’ quality of life, especially if the clubs are located in residential areas or near schools. One such local resident, Tara, has said:
“For a time I lived next door to a pub that hosted table dancing. I was a support worker to adults with learning disabilities and worked shifts, often ending at 11 pm...On those days I was afraid to go home because of the time it took to unlock the door...I was frightened of the men who came out of that pub, especially the men in groups leering at women walking past...I was frightened of being followed into my flat because those men seemed to think that they had a right to do anything they liked. They would stare at me, make comments to each other about my legs, tell me they would give me one...I moved as soon as I could, because of that.”
Another resident, Elaine, has said:
“On several occasions I have experienced sexual harassment: men often make sexually suggestive comments or gestures to me as I walk past the lap-dancing club. I believe that, as a female resident, I should have the right to live without fear of violence and threat, and to walk around my local neighbourhood as freely as any male resident. At present, I do not believe I have that right.”
Another resident, Meredith, has said:
“When I take my daughter swimming on the weekends, she asks me to make sure that we leave before nightfall. Our route from the swimming pool to the train takes us past lap-dancing clubs, and although my daughter has no idea of what is going on, she finds the atmosphere frightening. I often wonder why my city council doesn’t think about my right to an enjoyable night out as much as it seems to think about the money being spent by men in lap-dancing clubs.”
I personally dislike the industry but I am not seeking to ban the clubs. I just want to create greater recognition of what their presence can do to a local neighbourhood or town centre, and to give all communities a greater say in whether they want them or not. In particular, I want all communities and elected councils to have a say over the operation of these venues in general across their local area.
What is the current position and why does the law need amending? The Licensing Act 2003 aimed to consolidate the licensing procedure for different types of venue. That was a noble aim, but it had the unintended consequence of making it much easier to open lap-dancing clubs, and they started to mushroom in number as a result. Many people felt uncomfortable at this rapid increase and felt that the licensing regime was not adequately reflecting the concerns of local communities.
A number of hon. Members have highlighted the problems associated with the spread of such clubs and campaigned for a change in the law. My hon. Friend the Member for City of Durham (Roberta Blackman-Woods) and Lynda Waltho, the former MP for Stourbridge, campaigned in Parliament for the changes, and were backed up by excellent work from both Object and the Fawcett Society. The previous Labour Government listened to them and responded by introducing a special licensing category for sexual entertainment venues, which allowed councils to implement specific licensing conditions on lap-dancing clubs. They were adopted powers, which means that there was no requirement on local authorities to use them. However, if councils did choose to use them, they had a range of measures open to them, including governing the areas in which such clubs could open, taking into account their proximity to residential areas, schools or places of worship; the hours in which they could open; what type of advertising they could conduct; and what they could show on the outside of the premises. The change in the law also gave councils the ability to cap the overall number of venues if they so wished.
My Bill is not particularly radical. It seeks to build on the law as it currently stands and would require all local authorities to adopt the full range of powers available to them and consult their local communities for their views on such premises. I am proud to have as co-sponsors my hon. Friend the Member for City of Durham and the former Minister with responsibility for licensing, my hon. Friend the Member for Bradford South (Mr Sutcliffe). The former Minister, my hon. Friend the Member for Tynemouth (Mr Campbell), who introduced the change in the law, also supports that proposal becoming a mandatory requirement.
Where the powers have been adopted, we see communities again having their say in what goes on in their local area. For example, the Labour council in Haringey was a pioneer in adopting these powers and setting a borough-wide limit of zero clubs. I pay particular tribute to councillor Nilgun Canver for trailblazing the use of such powers. Other cities have also begun to adopt them. Swansea, for example, adopted a zero limit after a wide consultation, and Liverpool has restricted such clubs to a particular area of the city.
My aim is for all areas to make better use of the powers. I want to spread good practice and stop the postcode lottery. This is about including local communities at an early stage of the licensing process and giving locals a voice about whether or not they want these types of establishments on their high street. That is a question that should be asked of all communities and that everyone should feel able to contribute to.
The amendment to the law would assist local licensing committees. I want to contrast licensing authorities that give communities a strong voice over these establishments and have a clear policy with licensing decisions that are taken on an individual basis, which is still a proper and legal way of doing things. Let us take, for example, a local authority that has chosen to adopt the sexual entertainment venue powers, but has not issued a specific licensing statement. When that local authority then receives an application, it considers it on an individual basis. If communities want to assert themselves, individuals have to make specific objections. They have to show how that club will impact on their lives, and they need to relate it to vague licensing statements.
It is often difficult for a community collectively to argue about what such a venue means for their area or community. Indeed, considering such general concerns may render the authorities’ decision open to legal challenge, which can be expensive and off-putting. Adopting a clear licensing statement and a cap on the number of such venues negates the risk of a court challenge and both simplifies the process and ensures that the wider community is able to be clear and supported in what it wants its town or city to look like.
I am not seeking to impose some draconian new ban from Whitehall on any activity that is freely and legally participated in, or to restrict legitimate entertainment businesses. I merely want local people and councillors to have more power to resist the spread of sleaze in their neighbourhoods and for current best practice in local government to become universal.
Question put and agreed to.
Ordered,
That Diana Johnson, Mr Gerry Sutcliffe, Roberta Blackman-Woods, Mrs Sharon Hodgson, Mrs Louise Ellman, Andrew Gwynne, Wayne David, Nia Griffith, Ian Austin, Andrew Percy and Stephen Gilbert present the Bill.
Diana Johnson accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 28 February, and to be printed (Bill 164).
Consumer Rights Bill
(10 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Innovation and Skills (Vince Cable)
I beg to move, That the Bill be now read a Second time.
I am delighted to introduce this important Bill. It has been widely consulted on outside and inside the House and our understanding is that it is welcomed by both business and consumer groups. There has been some constructive criticism from inside the House during domestic scrutiny and we have taken on board the large majority of the suggestions. As the Bill proceeds, we will further debate much of the detail.
The context of the Bill is our determination to build and enhance a climate of trust in which UK business operates, restoring trust, which is often needed, in markets and market transactions. The consumer law reforms that we are discussing lie at the heart of a crusade towards trusted business and trusted capitalism. We see them as part of the overarching overhaul of UK competition and consumer legislation that we have been undertaking over the past four years.
Essentially, the coin has two sides: competition policy and consumer protection. Let me start with the competition reforms. A competition regime is essential to encourage efficient and innovative businesses, allowing the best to grow and enter new markets, driving investment in new and better products, and pushing prices down and quality up. That is good for growth and good for consumers. That is why earlier in the Session we introduced reforms of competition policy and the new Competition and Markets Authority, which will come into effect in April with strong new powers to take robust decisions more quickly. Changes we have made to the criminal cartel offence will enable the CMA to address the pernicious influence of cartels.
What we are doing in the UK is mirrored in what is happening in the European Union. There are people who think that the European Commission is entirely about regulation, but it does important work in opening up markets, deregulating and increasing competition. It is worth citing several examples. Last year, fines of almost €1.5 billion were imposed on companies engaged in fixing the price of TV and computer monitor tubes and fines of €1.7 billion were imposed on companies that had established a cartel to fix interest rate derivatives. The European Commission is conducting a competition investigation into Google’s business practices. Among other things, the Commission is considering how Google uses third-party content without consent and how it structures its search results. Our domestic Consumer Rights Bill will enable us to strengthen that framework by making it easier for individuals and businesses to seek redress through private actions where they have been harmed by anti-competitive behaviour. That is covered in one of the clauses.
Competition also relies on consumer law and the framework of protection for individuals who suffer from unfair business behaviour. That is why we are reforming the landscape of consumer bodies funded by Government to improve consumer protection and give greater clarity about where consumers need to turn for help and advice. I hope that will deliver a better deal overall for consumers through clearer responsibilities and better co-ordination.
We cannot expect consumers to be confident when they do not understand their rights or when they find it hard to know what they are entitled to if something goes wrong. Unclear rights and remedies mean that businesses can also find it costly to understand their responsibilities. We seek to address those concerns. We have set out in one place key consumer rights and what consumers are entitled to. The measure covers goods, services and, for the first time, digital content such as e-books and software. We estimate in the impact assessment a value in the order of £4 billion over a 10-year period.
Of course, this involves strengthening statute and regulation, but overall this is a deregulatory measure, with a positive impact on business. It makes it easier for business to understand what should happen when a problem arises. It will stop problems escalating, with all the associated costs and the development of disputes, and it will help to create a level playing field for business. It is pro-consumer, but it is also pro-business.
Robert Flello (Stoke-on-Trent South) (Lab)
Will the Secretary of State elaborate on the reason why the downloaded digital regime is different from the physical regime? If I go and buy some software on a physical DVD or CD, under the Bill, that is different from a downloaded version.
Vince Cable
I will elaborate on that when I discuss digital measures. The hon. Gentleman is quite right: there are different consumer protection arrangements for the DVD—the physical equipment—and for content. The measures in the Bill specifically relate to how we strengthen protection on content.
The Bill was published in draft last summer and, as I have acknowledged, we are grateful for the feedback we received as a result of scrutiny, particularly by the Select Committee on Business, Innovation and Skills. Many of its recommendations are reflected in the Bill before the House, and I believe that it has been improved as a consequence of that scrutiny.
The first main measure in the Bill deals with goods, which are a critical part of the economy. There are roughly 350,000 retail businesses, but much of the law pertaining to this area is 30 to 40 years old. We have tackled the complexity that makes compliance burdensome for companies and confusing for consumers by setting out in one place the standards that have to be met. For example, we have defined a 30-day period within which goods have to be inspected. We have made it clear that, where consumers have a faulty item repaired or replaced, that repair or replacement must remedy the problem the first time round, or they can insist on some money back. Survey data show that all but 6% of faulty goods can be remedied the first time round, but we have embedded that in a clear set of rules.
We often hear, for example, about consumers trapped in a cycle of repairs that fail to fix a fault. Which? recently reported a case of a car owner who had fault after fault after fault, but he was consistently fobbed off with further repairs that failed each time to fix the fault. Under the Bill, that will not arise, as we will narrow down the obligations.
The hon. Member for Stoke-on-Trent South (Robert Flello) asked about digital content. There is a good deal of legal uncertainty about consumer rights in relation to digital content, which is unacceptable in a rapidly growing segment of the economy with a turnover of around £200 billion. That is why we have introduced a new category of digital content with a set of quality rights. As I said, we need a distinction between the way in which we protect content, which is intangible, and the way in which we protect goods, such as DVDs, which are tangible and are dealt with under the goods provision.
For example, many people now download music albums, but if one of the tracks is corrupted and will not play, it is not clear what they are entitled to. Under the Bill, they are entitled to a repair or replacement of the digital content and, if that does not fix the problem, they will get their money back. This is a complex matter, and we recognise that, in relation to complex software, for example, there are flaws—that is the nature of the business—but we have tried as far as possible to narrow down the areas of fault and consumer obligation. Clear digital rights are good, not just for consumers but for responsive businesses, particularly new market entrants—a key part of the industry—which will find it easier to attract customers, even if they are not an established brand, because they can establish a track record in consumer service underpinned by the legislation.
Another part of the Bill deals with consumer protection in relation to services. We know from reviews by the Law Commission that the law governing the provision of services is difficult to understand and, when things go wrong, there is no statutory redress regime to put them right. However, we are talking about 75% of the British economy. That is why the Bill provides new statutory rights and introduces new statutory remedies when things go wrong. There is a great deal of debate about the specifics: the Business, Innovation and Skills Committee has suggested a statutory quality right, which we looked at, but we found it too complex. We considered the evidence from Australia, and we are certainly happy to engage in further debate on the matter.
As an example of how the new rights would apply, we can look at the case of cowboy builders. Almost all of us have dealt with such cases in our constituencies, and they cause particular anger. A cowboy builder is doing domestic work and altering someone’s bathroom. They start the work, but there are problems, with debris strewn around the house and disruptions to the water supply. Currently, it is unclear what the householder is entitled to, and a lot of frustration flows from that. Under the Bill, there will be a statutory right to ask for a poorly performed service to be redone if possible. If it cannot be redone within a reasonable time or without significant inconvenience there is a right to money back. I stress the example of cowboy builders, as I think that the hon. Member for Walthamstow (Stella Creasy), who may well want to discuss this, issued a press release this morning in which she singled out cowboy builders and said that there was no reference to them in the Bill. In fact, these measures will improve significantly consumer protection in that area.
Another area in which the Bill introduces reform is unfair contract terms—essentially the small-print problem. Legal ambiguity arises from recent landmark court cases—the so-called banks case in particular—and our reforms endeavour to protect consumers from the small print while making it easier for businesses to understand how they can prevent contract terms from being challenged in court. In a typical example, someone joins a gym in January with a lot of enthusiasm, but they have not read or fully understood the details of the small print. When they cancel the contract in March, as many people do—I seem to remember cancelling my gym contract rather earlier in the year—they have to pay for a full year’s membership. Currently, it is not clear whether a court would find that unfair. Under our proposals, it is clear: a court can find it unfair, and if it is unfair the consumer is not bound by it.
The reforms endeavour to make clear what the courts can and cannot consider in assessing fairness. In particular, we make it a key test that price and subject matter in a contract need to be transparent and prominent—the operative word is “prominent”—to ensure that it cannot be challenged for fairness in court.
Mr Gordon Marsden (Blackpool South) (Lab)
I am interested and encouraged to hear that proposal, because I dealt with a constituency case in which a young man found himself with precisely the sort of problems that the Secretary of State has described. Does he agree that there is a role for local councils, if it is a local gym or other local body, and their consumer protection departments, which should intervene in these issues? Will he encourage local authorities to use their public protection departments in that way?
Vince Cable
Trading standards at a local level are extremely important. It is not a statutory obligation, and councils vary in their support for it, but it is absolutely crucial. This is where much of the enforcement action will be eventually taken. At national level, as the hon. Gentleman will know, we put £13 million a year into the National Trading Standards Board, which provides training support, for example, and helps trading standards authorities to co-ordinate activities. That is often required, because an abuse can occur across borough boundaries. He is absolutely right: local trading standards officers are crucial in implementing much of this legislation.
Stephen Lloyd (Eastbourne) (LD)
I am chair of the all-party parliamentary group on consumer affairs and trading standards. In my constituency and around the country, trading standards do a tremendous amount of very good work, but one of their challenges is that their budget depends on local authorities and can be patchy. I appreciate that, as a result of the streamlining measures in the Bill, much of the enforcement will be done by trading standards. I think that the Bill will make that easier and make a real difference. Will the Secretary of State or his officials meet me and some senior trading standards colleagues so that we can work out how that can be done more efficiently or better, or even find ways to squeeze more income from the Government to help them to do that?
Vince Cable
I know very well my hon. Friend’s interest in this area and the work that he has done on it. He has made Eastbourne an exemplar of good practice. I accept that local authority budgets are squeezed, and sometimes trading standards are squeezed relatively severely. We can help with that by helping to rationalise their operations, training and cross-border co-operation. I am happy to meet my hon. Friend and others, cross-party or otherwise, to see how we can progress this.
A further set of measures in the Bill relates to consumer law enforcement. We will consolidate and simplify the investigatory powers of consumer law enforcers—this takes us back to the discussion we have just had on local trading standards officers—into one generic set to make it easier for enforcers and businesses to understand what powers can be used and in what circumstances. We estimate that that measure alone will save businesses around £40 million during the next 10 years. We will also make it easier for trading standards to collaborate across local authority boundaries to tackle the kind of rogues we saw in a recent scam drawing people throughout the country into costly and unnecessary driveway repairs.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I thank the Secretary of State for his generosity in giving way, particularly as I unfortunately missed the start of his speech. He makes an interesting speech—as interesting as he can given the subject. Why is there so little in the Bill for people who are failed by public sector agencies? Is there not a great need for increased rights when consumers or citizens find themselves on the wrong side of these bureaucracies when they let them down?
Vince Cable
Some of us find this a passionately interesting subject. The enthusiasm shows, I know. There is the ombudsman for the public sector. One could argue that the legislation will bring the private sector up to the same standards of scrutiny that we would expect when there are failures in public administration.
Sammy Wilson (East Antrim) (DUP)
I am extremely interested in what the Secretary of State has been saying, which is important for consumers throughout the United Kingdom. As some of the measures that he has been speaking about today are devolved to Northern Ireland, in the interests of consistency, how will he ensure that whatever is introduced in this House is also introduced in other parts of the UK where there is devolution?
Vince Cable
There have already been discussions with the Northern Ireland authorities, and we plan to introduce the same measures in Northern Ireland. There is agreement on the subject. I cannot say off the cuff where we are in relation to Scotland and Wales, but there are discussions with devolved authorities to try to ensure that this is widely applied. Everyone agrees that these are improvements and it would be desirable if everybody throughout the UK benefited from them.
Richard Burden (Birmingham, Northfield) (Lab)
I was so fascinated by what the Secretary of State would be saying today that when I realised that I had missed the start of his speech I came hotfoot over here.
My point also relates to the issue of public services. On premium rate phone lines, the Government have said that all Departments should migrate to the use of geographic phone lines—03 lines—or others to ensure that consumers will not be charged rip-off rates by Government Departments. I welcome that, but will he give us some indication about when that will happen? The promise is good, but consumers need action.
Vince Cable
The hon. Gentleman is correct that an undertaking was made, which I understand is in process. Different Departments are proceeding at different speeds, but there is a commitment to do this. If he wants more information on it, I will try to get it to him. It is a perfectly legitimate complaint that people have.
The consumer law enforcement powers establish a primary authority to improve co-ordination. The enhanced consumer measures relate to the law and the gap between criminal and civil law in relation to consumer enforcement. At the moment, consumers rarely get their money back when a business breaks consumer law. That is partly because criminal courts are reluctant to award consumers redress and enforcers are often unable to seek redress in the civil courts. There is a common law remedy, but it is often difficult to realise it. What then tends to happen is that the more extreme cowboys are prosecuted on criminal grounds, but compensation, particularly for lesser levels of abuse, is more difficult to obtain. The legislation will enhance consumer measures to give enforcers greater flexibility to get the best outcome for consumers.
Valerie Vaz (Walsall South) (Lab)
The Secretary of State has set out a lot of rights for consumers. What has been the impact of the lack of legal aid for those consumers to enforce those rights?
Vince Cable
Many of these issues are dealt with through small claims courts. I recognise that there is often a difficulty in enforcing claims in the small claims courts. I am not sure that legal aid is the central issue there. It is a question of ensuring that, when court remedies are imposed by the courts, they enforce them and there are proper fines on companies that do not yield at that point.
The measures on the civil courts seek to ensure that there are properly specified rights aimed at giving consumers their money back, giving them more information and increasing business compliance. We must try to ensure that the measures are reasonable and proportionate, and that there is flexibility. Let me give a concrete example, because this is a slightly abstract and legalistic issue. Under a more flexible regime, a furniture retailer that has made false promises on delivery dates may not only have to give consumers their money back, but have to advertise in the press or social media what they are doing to put the situation right. They may also be required to change their internal systems to ensure that there is no repeat of the breach of the law. Essentially, the changes will enable enforcement to take place in a much more flexible way that reflects the circumstances of particular companies and customers.
Yvonne Fovargue (Makerfield) (Lab)
How will the Bill address the issue of companies going into liquidation and what happens to their creditors? We have all seen what happened with the Farepak scandal. Consumers do not understand the difference between part-payments, deposits and prepayments. Will that be clarified in the Bill?
Vince Cable
Those issues are covered by insolvency legislation, which we hope to review later in this Parliament. I am aware of the hon. Lady’s close involvement in the Farepak victims’ case, on which she has worked with my Department and helped a great deal. The issue that has been triggered is whether we should change the order of claims of creditors. We have looked at this sympathetically. The danger is that by promoting one group of creditors, another, perhaps equally worthy, is subordinated. We have not yet found a satisfactory way of reordering creditor claims that everybody would accept as fair and just. I am aware of the Farepak problems, but we have made quite a lot of progress in that case.
Mrs Madeleine Moon (Bridgend) (Lab)
I thank the Secretary of State for singling out the furniture industry, which has a number of problems. In particular, people can spend a lot of money on one item of furniture from a company that they think is UK-based, but discover that that is not so if the product delivered is in any way faulty. It can then take months to get it repaired or replaced. Can we look at how we deal with such companies, including Laura Ashley, which has terrible reviews of its furniture on the complaints board? Its consumers also have to pay 10p a minute to make a complaint. It is very difficult to get redress if it delivers something that is faulty, as with any furniture company not based in the UK.
Vince Cable
The proposals are designed to address exactly that kind of problem, because they would enable the remedies to be tailored and varied according to circumstances and the seriousness of the offence.
Sir Greg Knight (East Yorkshire) (Con)
Will the Bill be in any way retrospective? For example, will it bring relief to a customer who has entered into a long-term contract, the provisions of which extend beyond the Act’s implementation date? Will a customer in those circumstances be able to cancel any unfair terms?
Vince Cable
The right hon. Gentleman asks a tricky and quite specific legal question, and I do not want to guess the answer. Of course, in general we always try to avoid retrospective legislation, but I can see that for contracts spanning a period of time we need to cover the whole contract period. I will check the details of the proposal and get back to him.
Robert Flello
I appreciate the Secretary of State’s generosity in giving way to me a second time. I want to touch on something my hon. Friend the Member for Bridgend (Mrs Moon) raised: the issue of companies based overseas. The Secretary of State has generously met me and other colleagues from north Staffordshire on a couple of occasions to discuss the ceramics industry. People can sometimes be misled into buying something that they think was made in Stoke-on-Trent, but when they get it home they discover it was made not in Fenton, but in Indonesia or China. How does the consumer get redress in those circumstances? If that is not dealt with in the Bill, is it something he will look at?
Vince Cable
As the hon. Gentleman says, I have discussed that with him before. Indeed, there was a discussion in the European Union last week about rules of origin legislation. I am very sympathetic. The potteries are reviving somewhat and the ceramics industry is returning, and we want to ensure that that is sustained. I think that the issues raised are somewhat different from the content of the Bill. We might be talking about fraud, trading standards or enforcement, and there is an issue about mandatory origin reporting, which is currently being debated in the European Union. I fear that the Bill’s provisions will probably not help to solve the problem, but those are important issues.
Mark Durkan (Foyle) (SDLP)
I want to raise a further question that is not addressed by the Bill as currently drafted, surprisingly. It relates to electrical product recalls, which are clearly a matter of safety for people and properties. The law is currently deficient, and the Electrical Safety Council has made it clear that it wants it improved. It points out that the recall checker on its website often lists products for which there is no procedure in place and no traceable manufacturer. Surely, with regard to consumer rights, that is an area that needs to be addressed.
Vince Cable
The hon. Gentleman is right that the safety aspects are dealt with separately. I was under the impression that the relevant law was tightened up several years ago. I am familiar with it because a colleague who formerly represented Richmond Park in the House had a family tragedy in circumstances similar to those that the hon. Gentleman describes. I understood that the regulations relating to defective electrical equipment had been tightened, but that is a specific point that we can check.
Sammy Wilson
With regard to the time it can take for products purchased from manufacturers based overseas to be returned, or the number of times someone may have to be called out to repair a product before it is fit for purpose, does the Bill set out a time scale within which repairs must be done, products must be replaced or money must be returned?
Vince Cable
As I tried to explain when describing the reforms relating to deficient goods, repairs must be done the first time round. If they cannot be done in a reasonable time, there will be cash compensation. Previously that was ambiguous and unsatisfactory. There will be either a repair or cash compensation, and that will be much clearer than it has been in the past.
Let me talk about the provisions in the Bill that relate to competition law and the role of private actions. Competition is good for growth and one of the pillars of a vibrant economy, so a key part of the work is tackling anti-competitive behaviour. The European Commission—I quoted some examples a few moments ago—has estimated that cartels can raise prices by between 20% and 35%. Despite the strong competition framework that the Government are putting in place, the Office of Fair Trading has shown that businesses believe that the current regime for private actions is too slow and costly. As a result, businesses and consumers rarely get redress when they have been harmed by anti-competitive behaviour. In 10 years, there has been only one collective action case in this country, and only one 10th of 1% of the consumers who were eligible signed up to it.
We have tried to strike a careful balance. We do not want an American-style system of prodigious and constant litigation, which would be costly and benefit only lawyers. None the less, we believe that there is some imbalance in the current system that needs to be redressed. We will try to discourage parties from engaging in costly court cases by encouraging alternative dispute resolution. We propose reforming the Competition Appeal Tribunal by introducing a fast-track regime so that small and medium-sized companies can get quicker and cheaper access.
For example, let us take a car garage that relies on spare parts from a large supplier that has started withholding supplies to drive up prices, showing cartel-type behaviour. Previously, the garage would have had to take costly legal action in the High Court, possibly bankrupting itself in the process—it is a small company up against a big one. Under the Bill, the garage could take the case to the Competition Appeal Tribunal, which could swiftly issue an injunction resulting in the supplier having to restart its supply.
We will also introduce an opt-out collective action regime for consumers and businesses that have been harmed by anti-competitive practice, with safeguards to ensure that cases are appropriate and merit that approach.
Stephen Lloyd
I am grateful for what the Department for Business, Innovation and Skills is doing in relation to the Competition Appeal Tribunal. As a result of the cost of legal intervention, numerous small businesses have been unable to challenge anti-competitive behaviour, so I applaud that and think that it will make a real difference for small businesses. Has the Department made any impact assessment of the number of cases it anticipates over the next three to five years and, if not, is it in the pipeline so that we can get some sort of idea?
Vince Cable
I cannot give any figures, but we are starting from virtually zero, so there will almost certainly be an increase. We will have to conduct an impact assessment as part of the regulatory regime in Government. I will endeavour to give my hon. Friend more facts and figures if I can unearth them.
In conclusion, the Bill represents a radical and far-reaching set of reforms designed to streamline the law, making it clearer and more accessible. It will enhance consumer rights and deregulate for business. It will benefit consumers by reducing the time and cost of finding out how to deal with problems. It will protect consumers from the small print in contracts and increase the redress they get when things go wrong. It will benefit businesses by reducing the need for ongoing legal advice, and it will save legitimate businesses from losses from anti-competitive practices. The benefits are substantial. They will create more confident consumers, who in turn will be more likely to try new and innovative goods and services, which in turn will create a more responsive and vibrant UK economy.
Stella Creasy (Walthamstow) (Lab/Co-op)
I share the Secretary of State’s passion for this subject, and I challenge the idea of my hon. Friend the Member for Barrow and Furness (John Woodcock) that it is boring. I am delighted that so many hon. Members have come into the Chamber to stand firm on the idea that consumer rights are a key concern. Despite the short notice, I hope that they will join us in agreeing that it is important to have a strong consumer rights framework in this country.
We agree that the Bill is long overdue. The previous Government introduced a White Paper on delivering a better deal for consumers. It was designed to take action on rogue traders, empower and assist trading standards and bring in a consumer rights Bill to help modernise consumer sales law, so giving consumers the real power that we all want. The Bill should be the culmination of that elephantine gestation.
We therefore welcome the idea of bringing in consumer rights legislation to meet the test that the Government set on their website, which states:
“The government believes that consumers who are well-informed about their rights and what they’re buying are more confident and more likely to spend money well, getting better deals or buying new goods and services.”
It seems to the Opposition that a good first test to set the Bill is whether it meets this ambition: does it help consumers not to be big spenders, but smart ones, and does it give them the information and rights to be able to use their money well and wisely? I am afraid that the Opposition believe that the Bill falls at that first hurdle, in that it provides neither information nor rights, and it makes the Secretary of State a consolidator, not a champion of consumer rights. As such, this legislative opportunity short-changes, rather than strengthens, the pounds in our pockets.
The Opposition know that healthy, fair and competitive markets and effective methods for information-sharing across providers are vital for building an economy that works both for consumers and for businesses. We know that savvy consumers make for better customers for businesses, and that better-informed citizens get better outcomes.
In my speech, I will set out the scale of the challenge that demands a roar, not a whimper, and a Government who will speak—indeed, shout out—for consumers and their rights in a free, fair and functioning economy to provide a consumer rights framework that does not wait until people get ripped off before coming into force. In explaining what that means, I want to set out the areas of the Bill that need to be strengthened and on which we will therefore table amendments.
Philip Davies (Shipley) (Con)
This is a Bill on consumer rights, and many consumers would, for example, like the opportunity to shop freely at a large store on a Sunday, as they already can in Scotland. Does the hon. Lady agree with extending the rights of consumers to spend their money in whichever shops they want, whenever they want on a Sunday, or perhaps with devolving that down to local authorities, so that they can vary Sunday trading hours if they so wish? Is she really that much on the side of consumers?
Stella Creasy
I hope that the hon. Gentleman is on the Public Bill Committee, because I would enjoy many such conversations with him. His interest in how widely consumer rights can be applied is legendary in this House and in the country. We need a fundamental understanding of where rights for consumers make a difference to our economy. We believe that the Bill needs to meet such a test, and I shall set that out today. I hope that I can make clear and compelling arguments about why the Bill should make a real change to people’s lives and redress the balance of power for consumers.
Mr Marsden
My hon. Friend has already proved herself to be a superb champion of consumer rights since entering the House in 2010. I am following what she is saying about the need for the Bill to go further. Does she agree that one real issue, particularly in my constituency of Blackpool South, is the amount of counterfeit goods that are regularly sold—worth tens of millions of pounds every year—and the crucial role of trading standards? Many trading standards bodies have been affected by the cuts in funding to local government. Does she agree that the Government need to look at supporting such bodies more centrally, especially in their role in relation to counterfeit goods?
Stella Creasy
I want to come on to precisely my hon. Friend’s question about trading standards, and about how to have stronger powers for consumers at local level, which is one issue that the Bill does not seem to understand or to address.
I am honoured that the Secretary of State made time this morning to read my article for PoliticsHome. I, too, took the time to read his speech last night, and I very much enjoyed his attempt to use Jedi mind tricks on the Government. In particular, he paraphrased one of my personal heroes, Obi-Wan Kenobi, in his attempt to claim that “This is not the recovery you are looking for”, which is recognition that consumers are bearing the burden of this Government’s economic policy as a result of their lopsided attempt to balance the budget. I am therefore glad that the Secretary of State has acknowledged that growth is being driven only by consumer spending, because many of us are concerned about the impact of that.
Although the Secretary of State celebrates the idea that consumers have dipped into savings that they hold for a rainy day, I have to tell him that he is mistaken to presume that they have done so only for long-term investments. His own Money Advice Service shows that a third of British people have no money put aside for rainy days, due to the everyday costs of living, and that those who have such savings have been forced to dip into them to cover those costs, with three quarters of the people surveyed having been hit by a bill that threw them off-budget in the course of the past year. Indeed, a third of people in our country who now have no savings at all have said that not having a high enough income is the problem causing them not to save. We agree that we should be extremely worried about an economy in which, every day, people get further and further into personal debt. We are also worried that when the Government are presented with an opportunity to do something about that, they stand aside. They talk strongly about national debt, but say nothing about personal debt.
I know that the Secretary of State will want to blame the Treasury for the National Audit Office’s damning indictment that Government failure to assess the impact on consumers of investment in infrastructure might lead to consumers facing financial hardship and unplanned taxpayer support being required. That damning report shows that Whitehall Departments are forgetting the needs of consumers, and therefore the cumulative impact of household bills. I know that some in the Government want to cast the Public Accounts Committee as the dark side, but I fear that consumers will feel the Sith inhabit the Treasury, not Committee Room 16. Why does the Secretary of State therefore not use the Bill to address that gap and to help such hard-pressed households, as well as to show that he gets the need to tackle the rip-off charges and broken markets in goods and services that they face?
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Does the hon. Lady agree that companies selling products often overlook the rights of consumers on islands and in some rural areas, saying that they will not deliver to them, and often overlook the best distribution network, which is the Royal Mail? Does she agree that the Bill should ensure that consumers who do not live on the mainland are given equal access to the market?
Stella Creasy
The hon. Gentleman makes some strong points about exactly the kind of contracts that consumers get into and the kind of service standards they should expect. That the Bill will simply consolidate existing rights, rather than address some of the challenges, shows that it could go much further on such issues.
It would not take much to make a real difference to households across this country. The Money Advice Service research shows that if consumers saved just £3 a day, it would be enough to cover their average unexpected bills in a year. That may not sound like much, but for millions of British consumers who have already used up their savings or are getting into debt in dealing with the cost of living crisis created by this Government, it is a stretch. For millions of people, reducing their outgoings would also make a real difference to their financial precariousness. The Centre for Social Justice has estimated that about 4 million British families do not have enough savings to cover their rent or mortgage for more than a month, and that more than 5,000 households became homeless in the past year alone because of arrears.
I hope that the Secretary of State will at least do better than his Cabinet colleague, the Prime Minister, who denies that living standards are falling as the public pay for the cost of this Government’s policies. The Prime Minister claims that it is a matter for statisticians to argue, but I hope that the Secretary of State agrees that it is a matter on which politicians should help out. It is not our role to make decisions for consumers, but it is our role to help to make decision making easier.
We could also help with the cost of living crisis, because it is about not just job creation, but every extortionate charge to which the Government turn a blind eye or every broken market they ignore, and that all adds to the struggles that people face. Every unfair service contract term and every bad decision that consumers are duped into making is more money down the drain.
Stephen Lloyd
I hate to interrupt the hon. Lady in full powerful flow, but I want to ask her whether there is anything about the Bill that she likes, or does the whole direction of travel and everything that we are doing on the cost of living crisis, which she has mentioned about five times, mean that it is just a poor Bill?
Stella Creasy
I can safely say that I will please the hon. Gentleman by talking about the cost of living crisis an awful lot more. I said at the very start that we welcome the Bill. Our concern is that this is a once-in-a-Parliament opportunity to get consumer rights legislation right. There are so many challenges that the Bill does not face that it will become a missed opportunity, to the detriment of all consumers and all our constituents, who are paying the price for our failure to tackle these issues. It will have minimal impact on the problems that we are seeing every day in our constituencies. The fact that nothing in the Bill is of particular concern tells us everything we need to know about its narrow ambitions in addressing the problems that our constituents face.
Stella Creasy
I think it will help the hon. Gentleman if I go on to explain my case, but I will give way to him once more.
Stephen Lloyd
Does the hon. Lady agree that it is at least something that the coalition has brought the Bill forward? Many consumer groups and people who are involved in this area are very supportive of the Bill. That has to be a good thing. Perhaps it is a shame that the Labour party did not bring forward such legislation six, seven, eight, nine, 10 or even 15 years ago.
Stella Creasy
The hon. Gentleman is again being a little uncharitable. I pointed out that consumer rights legislation in this country has had an elephantine gestation. If his argument is that something is better than nothing, when we could be aiming for the best for this country, I think that people will see the difference between the choices of the Government and the Opposition.
I want to set out our ambition today. If the hon. Gentleman is on the Committee, I encourage him to support it. We want to get the best possible consumer rights framework in this country and truly tackle the detriment that people in our communities are facing. We want to prevent problems from occuring in the first place, rather than waiting for people to be ripped off. That is the ethos that we want to see in the Bill. We know that when we do not get consumer rights right in this country, it is the poorest and the most vulnerable who pay the biggest price.
Consumer Futures and the Joseph Rowntree Foundation have found that lower-income families can end up paying £19 more a week on average because they face higher charges for the same products. Their research shows that such poverty premiums can add up to 10p for every £1 that is spent by households. Poorer households in this country are subsidising richer households as a result of the levels of detriment that they face.
I will set out for the Secretary of State four questions that we believe could make the Bill better and that will be the focus of our efforts in Committee.
Mrs Moon
Often, the poorest families shop away from the main street. Something that has long concerned me is that furniture dealers in white vans are selling products that are lethal because they do not meet British fire-retardant foam standards. If a fire starts, it can literally kill a family before they get out of the room. How can we tackle that problem and ensure that poor families are protected by consumer protection legislation, not just those who can afford to shop on the main street?
Stella Creasy
My hon. Friend is spot on and shows why the Bill falls short. That issue in the furniture industry reveals the problems that we have with the ombudsman system. I will come on to that matter and talk about her work on it.
The first question that we want to ask relates to the role of competition and challenge within markets to produce choice and value for money, which the Secretary of State spoke about. We agree that competition is a key driver of quality, innovation and personalisation in products, goods and services. However, in many markets in Britain, people are paying over the odds for essential goods and services because the barriers to entry into those markets have created dominance for a small number of providers or because there is outdated regulation. The existence of many companies does not always mean that there will be competition either. The ability of small firms to compete with larger providers is a key element of a free and functioning market.
If the Secretary of State wants examples of where those problems lie, there are many. My right hon. Friends the Members for Doncaster North (Edward Miliband) and for Don Valley (Caroline Flint) and my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) have been clear about the broken nature of our energy markets. Six companies dominate the retail market in the UK, supplying to 98% of the domestic market and 82% of the smaller business market. The fact that no new entrant has managed to challenge that dominance suggests that there are significant barriers to newcomers that inhibit competition. That is reflected in the prices that consumers pay. A lack of competition in the retail market for energy has resulted in consumers paying £3.6 million more than they need to every year. Switching levels in that market are the lowest that they have been for years. The low levels of switching mean that the big energy companies have a captured market, which again reduces the incentives to keep prices competitive.
It is not only in the energy market—[Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
Order. We require only one speaker at a time, so I would be grateful if the hon. Member for Suffolk Coastal (Dr Coffey) would stop shouting across the Chamber.
Stella Creasy
Thank you, Madam Deputy Speaker. I would be delighted to take an intervention from the hon. Lady at any point if she would care to make one. I am sure that whatever she is chuntering from a sedentary position is absolutely fascinating.
It is not only in the energy market that we see such problems. My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) and the hon. Member for South Derbyshire (Heather Wheeler) have highlighted similar problems for consumers in the pensions market. The current restrictions on the operations of the National Employment Savings Trust mean that it is impossible for it to compete with other providers, to the detriment of consumers. It is a market where hidden charges and fees create problems for people. There are penalty charges for people who want to change jobs and exit charges for savers who switch schemes. Which? found cases of consumers having up to 50% of their savings being absorbed by such charges and costs.
If the Secretary of State does not believe me on the energy and pensions markets, let us look at my passion, the payday lending market, in which a lack of competition is clearly causing problems for consumers. Not every consumer in that market gets into financial difficulty, but enough of them do because the way in which it operates causes huge detriment to the consumer and huge problems for our economy. The National Audit Office estimates that unscrupulous behaviour by firms in that market costs consumers at least £450 million a year. The lack of competition to provide services to the customers of those companies, as well as a barrier to accessing alternative services being created by borrowing from them in the first place, enables the exploitation of their customers.
If the Secretary of State is not interested in the impact of high-cost credit, perhaps he will look at the banking market. My hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson) and the hon. Member for South Northamptonshire (Andrea Leadsom) have again highlighted the raw deal that consumers get. The pricing power of big banks means that they dominate the market in key products such as mortgages. Banks are able to retain their dominance by making it hard for customers to move their custom. Some 1.3 million people have switched their current account in the past year, which is a churn rate of just 2% to 3%. Studies show that a truly competitive industry would have a switching rate nearer to 10%. It is not only in the dominance in the current account market that we see problems. When banks are able to set their own terms, they can set requirements such as those for buy-to-let mortgages that force borrowers to offer only short-term tenancies, which are causing problems in the housing market.
Given the Secretary of State’s speech last night and his commitment to competition, I would have thought that a healthy dose of competition across the sectors I have mentioned for the benefit of consumers is what the doctor would have ordered. However, we do not see that in the Bill.
The second question that I want to pose for the Bill is about the importance of information flows, which is linked to free markets. What are the Government doing in the Bill to address the information gaps and asymmetries that enable consumer detriment? We know that data are vital to ensuring that consumers may compare goods and services in order to make their own choices. We know that a lack of information helps providers to hide behind confusion and a lack of transparency. The Government’s own research shows that if consumers knew more about products, they would be able to gain £150 million to £240 million a year. However, only 13% of those who use price comparison sites get the lowest priced deal. The Government admit that one reason for that is that people do not have accurate information about their past usage and therefore find it difficult to predict future usage.
We are at the bottom of the European league for consumers being able to switch and shop around to get the deals that they want. The contrast with countries such as Australia is clear. Mass movement switching campaigns have led to one in four Australian citizens being part of schemes that get them better deals not just on energy, but on health insurance and financial services.
Consumers have legal rights to request access to personal data, but half the respondents to Which? were not even aware of that right and very few people have exercised it. I am sure that the Secretary of State will point to the midata project, which is a voluntary scheme to give consumers access to their energy, mobile and financial services data. However, that scheme has struggled to have any impact for a simple and obvious reason: companies have little incentive to release commercial data that could convince a customer to go elsewhere. We welcome the fact that the Government took an order-making power through the Enterprise and Regulatory Reform Act 2013 to compel certain businesses to release such data, but that affects only four core sectors and has not yet been applied. It could be applied more widely if secondary legislation were used. That is another missed opportunity in the Bill. Let us revise the Bill to unlock the capacity of information to improve outcomes for all consumers and citizens.
That capacity would help in many sectors. My right hon. Friend the Member for Southampton, Itchen (Mr Denham) has run a tireless campaign, for example, on the lack of clarity in supermarket pricing. We have seen how some deals and special offers mislead shoppers when clear information is not provided. There are products that are more expensive than the original price when they are in a multi-buy offer; products that have been at a sale price for longer than the original price; and products whose prices are increased immediately before they go on offer, to make the discount appear more significant.
Supermarkets, like many other industries, hold a wealth of data about us as consumers that they use to design their pricing strategies. Making those data easily available—in principle, they are already public data—could transform consumers’ power to shop around and to know a good “buy one, get one free” deal from a dud one, unlike some coalition voters, I suspect.
Or the Secretary of State could learn from my hon. Friend the Member for Sefton Central (Bill Esterson) and the hon. Member for Edinburgh West (Mike Crockart) and use the Bill to help consumers protect their data and to deal with nuisance calls, which I know many Members are frustrated by. I know that the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Cardiff Central (Jenny Willott), who is in her place, has campaigned on that issue. We know that 71% of landline customers say that they have received a live marketing call and 63% a recorded marketing message. The Information Commissioner receives 2,500 complaints a month from people sent unsolicited text messages, usually for debt or payment protection insurance claims. With 75% of landlines being registered with the Telephone Preference Service, the number of complaints shows that something is going seriously wrong. Again, the Bill will do nothing to help consumers protect their own data, which will be to their detriment.
We know that it is not enough just to have data, because they are not a disinfectant if the curtains are closed to the sunlight. Helping people make the right decisions the first time is key to outcomes, yet many people, especially those with complex needs or a lack of confidence, struggle to get the information and advice that they require to make effective decisions. In turn, that generates cost to the public purse, including the costs of putting it right. I know that the hon. Member for Mid Norfolk (George Freeman), who is in his place, feels strongly about that subject.
We know that when good advice is provided, services are improved. Indeed, one study in Nottingham showed that 40% of the cases dealt with by a local advice service referred to poor decision making in the public sector—what was called “preventable failure in the system”. A project that piloted advice services working with the council showed that 60% of those issues were preventable. When we see such studies and the impact of good advice and good access to data, the question is why the Government are not truly empowering consumers and citizens to bring them the benefits of the right changes. Why does the Bill not offer any action on that?
Where the Bill does offer input is on contract terms. It sets minimum standards that supplied goods must meet, sets out that they should be fit for purpose and satisfactory, and provides a legal right to reject faulty goods within 30 days of receiving them. Again, however, consumers will ask whether that will deal with the real problems with terms and conditions that they face time and time again. That must be our third challenge for the Bill.
A lack of clarity about prices causes many of us to purchase products that are not suitable. It is about the most basic of consumer needs—to know the cost of the product that we are purchasing and what our money will buy us. Prominent pricing is not the same as transparent pricing. Hidden charges are a problem for too many in our society. One study found that buying insurance through a broker could push up premiums by £500 a year, and that the gulf was caused largely by the added expense of the broker’s fees.
Many consumers experience the frustration of signing up for services or goods and then finding that the terms and conditions are varied because the prices are not clear. A constituent wrote to me this week about a website called Tax Return Gateway, a copycat of a Government website that looks suspiciously like the real deal. My constituent was charged £500 for filling in her tax return, and only after she had paid it was she told that that was the fee for the service, not the tax return itself. Such sites exist for a whole range of public services, including passport applications, visa programmes and driving licences. It seems a simple principle that people should be told the price before they purchase something, but again, the Bill will do nothing to provide for that.
Mr MacNeil
The hon. Lady raises an important point. There are scam versions of Driver and Vehicle Licensing Agency sites, and many people do not understand what they are purchasing, far less the costs of it. They do not realise that they are only getting a form to apply for a road tax disc or whatever.
Stella Creasy
The hon. Gentleman is absolutely right, and if the Bill met the test of providing the best consumer rights framework that this country can have, such scams would be addressed. Again, we find the Bill wanting on that point, and we will look to address such challenges in Committee.
Chris Kelly (Dudley South) (Con)
Does the hon. Lady agree that Members should encourage their constituents simply to use the Government’s own website at gov.uk, and not to google other alternatives that can lead to scam sites?
Stella Creasy
The hon. Gentleman’s question reveals one challenge that we face. I would love to sit at a computer with him, google those websites and see whether he could tell the difference. Making that difficult is one thing that the companies in question do. It is fair to ask how we can empower consumers, but it is also fair to ask what we can do to ensure that someone knows precisely what they are buying. That does not need to be an unreasonable requirement on terms and conditions, but the Bill does not address that challenge.
The Bill also fails to address the problem of people paying for services that they cannot get the details of. I beg the House’s indulgence to mention a second case in my constituency. At present, 4,500 leaseholders in Walthamstow have buildings insurance via their leases, on top of which they pay a premium for terrorism cover. According to the freehold manager, that is on the basis that the plane bomber lived in my constituency. Indeed, the freehold manager has sent me newspaper coverage to justify that additional charge of £80 a household to leaseholders in my community on top of their buildings insurance. Yet my constituents cannot get the details of the policy that they are paying for, because the insurer claims that its deal is with the freehold manager, not with the leaseholders. It seems that they cannot test in a tribunal whether the charge is fair, and consequently whether they can challenge it.
If the Secretary of State will not listen to my cases as arguments for why pricing and contract information need to be addressed, perhaps he will listen to the many other Members who have raised similar issues about contract terms and who is selling goods. In particular, there is the question of secondary ticketing sales, which my hon. Friends the Members for Washington and Sunderland West (Mrs Hodgson) and forEltham (Clive Efford) and the hon. Member for Hove (Mike Weatherley) have raised repeatedly.
We know that it is vital that there is a marketplace for the reselling of unwanted or unneeded tickets for events, because there is little scope for refunds or returns in that sector. However, there is also widespread abuse in the sector, because online touts can buy up tickets en masse to resell once an event has sold out. Indeed, Ticketmaster USA has estimated that for some high-profile events, up to 60% of available tickets can be taken in that way. Consumers who are unable to buy tickets on the first release must then pay over the odds to buy them from sites such as eBay or viagogo.
The secondary ticket market in this country thrives on a lack of clarity about who is selling a ticket and what right they have to do so, and it is estimated to be worth £1 billion a year. That is why I am surprised that the Secretary of State, as the Member for Twickenham, is not seeking to use the Bill to protect rugby fans in the run-up to the forthcoming world cup.
George Hollingbery (Meon Valley) (Con)
I am listening to the hon. Lady with interest, and one cannot help but agree with her on a large number of issues. I recently had a case in my constituency of people being ripped off on what looked like a DVLA website. However, is there not a danger that if we tried to specify every possibility and detail, the Bill would become far too fine-grained and would ultimately be used much less than if we defined things more generally?
Stella Creasy
We can have that argument in Committee, but being clear about pricing is not about any one of the individual issues that I have mentioned. It is a fundamental principle that should be in contracts. That would benefit consumers and mean that businesses could be clear that they had sold goods, so that we would not have some of the problems that we see further down the road. One point for us to consider in Committee is whether we can make clear what should be specified in a contract across a range of industries. That is not being specific; it is a general principle. Surely the hon. Gentleman would want his constituents to know what they are buying in advance of buying it.
George Hollingbery
Again, I cannot disagree with the hon. Lady, and that is indeed what the Bill is intended to do. At the same time, she makes specific criticisms about all sorts of cases without recognising that it would be extremely challenging to produce a general rule that would capture them all in a way that the courts could interpret.
Stella Creasy
I am disappointed that the hon. Gentleman does not believe that we can clarify what should be included in prominent pricing and at what point in the sale that information should be provided. Perhaps that reflects the Government’s small vision for consumer rights, because we could put that basic principle into the Bill and it would help to deal with a range of issues. The Government have chosen not to do that, and we are going to challenge them about it.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
My hon. Friend is making some excellent points, especially about the secondary ticketing market. Does she agree that there is now demonstrable market failure, which is one of the measures that the Government always said they would need before they would regulate the market? Does she think that the time has now come when we need to legislate to do something about that parasitic economy?
Stella Creasy
I pay tribute to my hon. Friend. She has been a tireless campaigner on this issue and seen at first hand the frustration of fans denied the opportunity to go to events. There are ways we can address that market, and principles about how sales are made and who has the opportunity to sell a product. We could put those clear and simple proposals into legislation and they would benefit not just the secondary ticketing market, but also some of the other markets under discussion. The Opposition have committed to testing the Government in Committee about why they feel they cannot provide that protection for people, and I hope the hon. Member for Meon Valley (George Hollingbery) will reflect on that and agree with us. As he said, it is difficult to disagree with these issues, but we now need to act. It is no good wringing our hands when we could prevent some of those problems.
Stella Creasy
I am conscious of time and I would like to make a little progress, but I will let the hon. Lady intervene if she is quick.
Mrs Main
It slightly confuses the matter if the hon. Lady tries to bring secondary ticketing within the scope of the Bill. That is more about how touts get hold of tickets, rather than what people choose to pay should they buy a ticket from a secondary ticketing market. It would confuse the Bill’s good intentions if she tried to drag all that in.
Stella Creasy
The hon. Lady does not quite recognise that a contract involves both a vendor and a purchaser, and the terms of a contract can apply to both. That is the point of the amendments we will table. On secondary ticketing, for example—the Secretary of State should be interested in this as the Member for Twickenham—legislating to make the rugby world cup an event of national significance would require tickets to be resold through recognised ticket vendors at face value, as happened in 2012. It would then be illegal to sell tickets through any other means. Indeed, viagogo already has tickets on sale for that event at huge mark-ups, and tickets do not even go on sale until the autumn. Some 2.3 million tickets will be sold at between £7 and £15 for children, with a top price of £700 for adults. That means that touts will be able to cash in on those prices on top of that, and damage the affordable ticketing policy of the organisers. Surely it cannot be right for us not to include in the Bill a way of ensuring that if someone wants to sell a ticket at a certain price, they can.
Stella Creasy
I will give way to the Secretary of State who I am sure is a passionate rugby fan.
Vince Cable
Not least because the hon. Lady is looking after my constituency for me. Let me reassure her that I live on the road from Twickenham station to the rugby ground, and I am well aware of ticket touts as they operate outside my front door. There is, of course, a public order offence of ticket touting, and in addition, the hon. Lady might not be aware that there have been extensive discussions between the Department for Culture, Media and Sport and Ticketmaster—the agent for the world cup—to ensure that those problems are minimised. It is not as if the issue is being overlooked.
Stella Creasy
I think the fact that the Secretary of State is considering the ticket touts rather than the rugby fans is the challenge. If we get consumer rights legislation right, rugby fans will be put first in such matters. That is why Labour, including my hon. Friend the Member for Eltham (Clive Efford), has offered to co-operate with the Government to get the legislation through and support the negotiations in time to protect rugby fans next year. The fact that the Bill is silent on such issues—I say this as a regular gig-goer in my time off—causes me great pain because it is consumers who suffer.
We see such problems not only in the secondary ticketing market but with letting agencies, because there are no regulations about how charges are levied, and there is a high demand for properties. My hon. Friend the Member for Wolverhampton North East (Emma Reynolds) has highlighted those problems, including charges such as excessive up-front fees, additional letting agency fees, and people losing deposits.
Mike Thornton (Eastleigh) (LD)
It is kind of the hon. Lady to give way, and laudable that she should try to cover every single possible thing that could possibly go wrong if we ever buy anything. I am not sure how long the Bill is at the moment, but I imagine that if we covered everything that could go wrong—surely that is the only way to be completely fair—we would not be able to get it through the door of the Committee Room.
Stella Creasy
I thank the hon. Gentleman for illustrating so vividly why the Government believe there must always be winners and losers in every element of policy. The Labour party believes that if we get the framework right, it would cover a range of industries. My point in describing the many different problems with current pricing and contracts is that if we took a different—indeed, stronger—approach to the laws on pricing and contract than that currently in the Bill, we could deal with a range of detrimental problems. Indeed, I would wager that if we get this right, two-thirds of the casework that many of us see would disappear overnight. Surely the merits of such a proposition alone would cause the hon. Gentleman to reflect on whether we can make the Bill stronger, and therefore better. That is the case we are trying to make.
We have already discussed letting agencies, and the way that charges and a lack of clarity over prices are a problem, but contracts do not cause problems only with pricing. The Minister will be as frustrated as I am about the lack of action on poor services, and I know she feels passionately that in her constituency, where residents are not receiving a mobile phone service they should be refunded. Despite raising the issue for months, she must be frustrated because nothing has happened, and I query whether her constituents are also frustrated. Although she is in charge of the Bill, and therefore has an opportunity to clarify when a refund for poor service would be due, the Bill will do little to help that issue. We would all like stronger powers of redress.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
On the contrary, the issue has been resolved and a mobile phone signal has been restored to my constituents, a number of whom are receiving compensation. It is perfectly possible to do such things under current legislation, and a lot of the issues the hon. Lady raises fall completely outside the remit of the Bill we are supposed to be discussing.
Stella Creasy
The Minister raises an interesting question about why, if the Bill will simply consolidate powers that she says are already effective, she does not use the opportunity to go further and deal with matters that she considers to be outside the legislation. She cannot have the argument both ways—either we need new consumer rights in this country, or we do not and she is wasting everybody’s time. Labour Members think there is a case for a new, stronger consumer rights legislative framework, which we are trying to set out, and part of that is about redress. I am delighted to hear that the Minister’s constituents have got redress for their mobile phone coverage, but I hope she will also consider how we can use the Bill for things such as nuisance calls, which she mentioned. This is about how we tackle such problems once and for all.
Mr MacNeil
There is a second problem with mobile phones as well as when a mast breaks down. There is also a lack of sharing and networks across the UK are incomplete. A customer of a certain network can travel to certain places and find no coverage at all. Mobile phone companies could share masts, but the renting and price structure around them militates against that and makes it an expensive thing to do. If something in some Bill somewhere were to tackle that, consumers who use mobile phones would have far better services in the UK than they do at present.
Stella Creasy
I thank the hon. Gentleman for his contribution, and I will come on to whether the voice of the consumer is strong enough with the regulators. That is the sort of issue a regulator could consider, because not all people access services in the same way.
With that in mind—I am conscious of time—I will press on to the final question that we will set for the Bill in Committee, which concerns whether it has a clear enough framework for when things go wrong. We know that absence of enforcement gives an advantage to firms that break the rules, whether in a local community or nationally. Consumers are getting a poor deal and providers are getting away with it because there is little accountability or likelihood of prosecution. Giving consumers a stronger voice in the regulation of goods and services would enable consideration of the consequences of the different way that services are managed among different groups in society.
Again, the Bill could have led on that and tackled the problem. The concept of an ombudsman is clear in principle, but confused in practice. There are at least 17 different ombudsman services including the Financial Ombudsman Service, the local government ombudsman, the housing ombudsman, the pensions ombudsman and the legal ombudsman, as well as the parliamentary ombudsman and the health service ombudsman. In addition, there are also 14 recognised complaints handling services, including the Advertising Standards Authority, the commissioner for young people, the Information Commissioner and the schools adjudicator. However, not all ombudsmen and adjudicators are the same. Some exist through European and UK statute, such as the housing ombudsman, but others have been set up by the industries as voluntary bodies.
Let me return to the point raised by my hon. Friend the Member for Bridgend (Mrs Moon), who has sadly left the Chamber, about the furniture industry where we see such problems at first hand. The furniture ombudsman was set up as part of the Furniture Industry Research Association and is the only profit-making ombudsman service in this country. Some sectors have one ombudsman, but others have many. Businesses can pick and choose which they sign up to, further complicating matters for consumers. The lack of clarity about what an ombudsman could do and what powers it has is a problem for all consumers, and I say to the Secretary of State that tweeting about the issue or using social media is not the way to address it. My hon. Friend the Member for Makerfield (Yvonne Fovargue) has been diligent in raising the case of Farepak consumers, which seems exactly the point at which a stronger and clearer ombudsman system would come into play.
Stella Creasy
If the hon. Gentleman will forgive me, I am conscious of time and want to press on.
Madam Deputy Speaker (Dawn Primarolo)
Order. I heard the hon. Lady say that she wanted to press on. May I point out to her that she has been speaking for more than 40 minutes now? She has been generous in giving way, but I would be grateful if she could conclude her remarks so that other hon. Members can participate in the debate.
Stella Creasy
I promise you, Madam Deputy Speaker, that I, too, want to conclude my remarks.
The Bill does not deal with the European directive on alternative dispute resolution, which the Opposition will want to look at in Committee. The Business, Innovation and Skills Committee has said that that needs to be dealt with. There is also a need for a stronger take on the role of trading standards. The Secretary of State seems to believe that trading standards, which are desperately short of resources, can deal with many of the problems. We know that most consumer detriment happens at local level, and therefore that we need to do more to help people to take action at that level. The Secretary of State has not told the whole truth on cowboy builders. Many builders repeatedly rip people off, and yet there is little provision locally to take them on. The Opposition believe that the Bill has a role in doing something about that.
The Opposition also believe that there is a role for the Bill in dealing with the broader social impact of changes. I would flag up prepayment meters and premium phone lines, in relation to which there is a need for a broader social concern in the role a regulator can play.
Madam Deputy Speaker (Dawn Primarolo)
Order. When I say that the hon. Lady needs to conclude her speech, I do not mean that she should speak faster through what she has left to say; I mean that she should finish her speech with a few sentences. I would like her to do that now. That is not an opinion, but a request, and I expect her to do it.
Stella Creasy
It is a request to which I willingly oblige.
Suffice it to say, the Opposition look forward to the debate in Committee. I hope we have set out that there are many more things we can do in the Bill. We believe that we should make the pound in our pocket truly powerful. We hope the Government join us in that ambition.
George Freeman (Mid Norfolk) (Con)
Unlike the hon. Member for Barrow and Furness (John Woodcock), I believe this is an important subject, although I agree with his point. It is a pleasure to follow the Secretary of State and the hon. Member for Walthamstow (Stella Creasy), or should I call her the hon. Member for Alderaan, or my hon. Friend the Princess Leia, champion of consumer rights?
George Freeman
Perhaps the hon. Lady could explain that to the hon. Gentleman. I pay tribute to her commitment to the subject. We heard all too little of such commitment during the 13 years of the Labour Government. Her commitment is all the more welcome for that.
I strongly welcome the Bill. It is deregulatory, pro-consumer and pro-business. After saying something about some of the measures in it, I will turn to one or two points it is appropriate to think about on Second Reading, such as the changing pace of technology and how it is changing the landscape, and the way in which the debt crisis and the model of broken public finances we inherited from the previous Government demand that we embrace a more radical model of consumer empowerment and citizenship to drive the recovery all hon. Members want.
The truth is that consumer law is currently not clear enough. It is often out of date, and it is confusing and incomplete. The Bill sets out a simple modern framework of consumer rights. Twelve pieces of legislation currently govern them, and I welcome the fact that there will now be only one.
George Freeman
I will not take interventions because of the instruction from Madam Deputy Speaker to keep moving.
Madam Deputy Speaker (Dawn Primarolo)
Order. I was addressing my remarks only to the hon. Lady at the Dispatch Box speaking on behalf of the Opposition. If the hon. Gentleman or any other hon. Member wants to take interventions, it is entirely up to them. I have not put a prohibition on interventions.
George Freeman
Thank you, Madam Deputy Speaker, for that very helpful clarification. If I can finish my point, I will happily take an intervention.
I welcome the fact that there will be one simple Act to govern what has hitherto been covered by 12. I also welcome that, underpinning the Bill, are core consumer principles. People will have the right to get what they pay for; for goods and digital content to be fit for purpose; and for services to be provided with reasonable care and skill. We will also have the right to have faults in purchases put right free of charge, or to be provided with a refund or replacement. The reforms will enhance measures to protect consumers when appropriate.
I welcome the deregulation to reduce business burdens and costs. I also welcome the modernisation of the legal framework to ensure that consumer law keeps pace with technology. It clarifies the law when it is written in legal jargon and streamlines consumer rights, remedies and enforcement powers.
Yvonne Fovargue
The hon. Gentleman mentions the modernisation of consumer rights. Does he agree that it is time to change the bill of sale legislation, which was introduced in the 1800s, but which is now used to create log book loans—people give their log books for loans and can have their cars repossessed if they miss so much as one small payment? The legislation obviously does not intend to allow that, and it is time to modernise it.
George Freeman
The hon. Lady makes an interesting point, some of which is dealt with in the Bill. It will be interesting to see whether it is picked up in Committee.
Consumers spend more than 59 million hours a year dealing with goods and services problems, which costs an estimated £3 billion a year to the British economy. The Bill is deregulatory by nature, which means that consumers and businesses will find it easier to resolve problems with faulty goods and substandard services, and, for the first time, corrupted digital downloads. I noted with great interest that the executive director of Which?, Richard Lloyd, has said that the Bill
“brings consumer law into the 21st century, extending rights into digital content for the first time, and making it easier for people to understand their rights and challenge bad practice.”
The House will agree that that is a welcome step.
I welcome the fact that underpinning the Bill is the principle of fairness and helping customers when things go wrong, as they sometimes do. The measures will provide a firm foundation for empowering consumers, which will benefit businesses that treat consumers fairly.
Many businesses provide their customers with enhanced rights, but the truth is that even the best businesses still spend significant time and resources—more than they should have to spend—understanding the law and training their staff to apply it. The Bill will benefit businesses by reducing many of the burdens they face because of complicated consumer law. I particularly welcome the competition affairs tribunal.
My support for the Bill is genuine, but I wanted to mention one or two aspects of it that reveal, within our society, a view of consumer rights that is, at times, rather too narrow and that does not embrace broadly enough a concept of true consumer and citizen empowerment on the scale we need to drive a sustainable recovery and to reform how we deliver public services and put this country back on its feet. There are three specific areas in which the challenge of unleashing citizen and consumer power are urgent.
First, some markets—banking, utilities and telecoms—are holding back our recovery. Secondly, I am struck that the consumer rights conversation is framed around consumables, point-of-purchase rights and commercial rights in the commercial market. Many of those concepts could and should apply equally in the public sector and public services. Thirdly, it is also important to have active and empowered consumers in supply chains to drive them. That subject may not entertain all hon. Members, but I know that the Secretary of State feels particularly strongly about it.
In the bigger markets—banking, utilities and telecoms —we inherited from the previous Government an extraordinary concentration of power. One or two institutions had a very unhealthy predominance in each of those key markets, which are vital to the proper functioning of a free market economy. What we need as we try to recover from that toxic legacy of debt and dysfunctional markets is an insurgency of empowered consumer citizens to drive a new paradigm of choice, and to demand and insist that that which is available in so many fields of public life is available in banking, utilities and telecoms.
In banking, why is it still so difficult for bank customers to take their accounts to different banks? I would like to see consumer power, and consumer frustration with some banks, driving much more insurgency and the creation of new banks. First Direct appeared nearly 20 years ago, which was a stunning moment for our generation, who had never seen an online bank. We tapped the mouse and wondered whether it could be trusted and whether it would work. It turns out that First Direct was a stunning new entrant that catalysed all sorts of reforms in banking market. Why not have more now? Our banking sector is dominated by too few big banks, which were propped up by a very unhealthy burst of crony capitalism under the previous Government and shored up in the crisis that that incubated. We need to release customers to drive that insurgency in banking.
I would argue that the same is true with some of the utilities. Following privatisation in the ’80s, we saw those markets consolidate under the previous Government. For 13 years, we did not see or hear very much about that. We have inherited, particularly in energy, a small number of big companies that now pass on substantial global commodity price rises to customers, who have all too little real choice and power to drive across the market. To a lesser extent, the same is true for telecoms and broadband. We still see a very powerful monopoly provider in BT. Of course, other providers are able to operate on the railway tracks, but I do not think that in the telecoms market, given the extraordinary empowering impact of the underlying core technology, we have seen a parallel opening up of consumer power. Going the final mile to get broadband into deep rural areas to drive a rural renaissance, in my constituency and in East Anglia more generally, will require us to support consumers through some sort of voucher mechanism—I welcome the steps the Government are taking on this—to be more empowered to choose satellite, digital or any one of the insurgent broadband providers appearing on the market.
On public services, as important as the measures in the Bill are and as important as this subject is, they are still framed, as is the wider public debate on consumer rights, within the notion of point-of-purchase and consumerist trade descriptions legislation. It is principally concerned with the rights of the consumer at the point at which they buy a consumable. However, the concepts, ideas and rights enshrined in this useful Bill could and should go further. In fact, a number of the reforms that the Government are rightly unlocking in other areas of government will demand that they do. For example, why can patients in the health service, parents in the education system, or even pupils—possibly not young pupils, but sixth-form pupils—not have greater choice, transparency and consumer rights in the public services they receive? I would argue that a sixth former in a failing school who is receiving a bad education has just as many rights as the consumer of faulty electronic goods at a supermarket checkout. We need to extend this principle more broadly across public services.
Mrs Main
My hon. Friend is making a powerful point. On education, many students are not aware of how little time they will have in lectures or interactive courses when they apply for degrees. Expanding transparency to what exactly students are purchasing when they take a course might be helpful.
George Freeman
My hon. Friend, as ever, makes an extremely interesting and shrewd observation. The truth at the heart of public services is that the taxpayers provide the money and the Government, as best they can, the service. In that loop, something is lost: a direct connection between the recipient of the public service and the point of payment. Most of the recipients of public services have, of course, already paid for them through their taxes, but the sacred moment of the empowerment of the consumer gets lost in a complex chain of public service delivery. She makes the point that we need to look across our public services at how we can restore that moment. I would like more parents and pupils in schools to feel that the choice they make—choosing which school to send their child to—is a choice that the system respects. I wholly welcome the reforms that the Secretary of State for Education is putting in place to that end.
I want to mention health care, in particular, as we are seeing an extraordinary change in modern health care. I do not think it is too profound or bold to claim that health care is going from something that traditionally, in the 20th century, was done to us by Governments when they decided we needed it, to being something that modern consumer health care citizens do for ourselves. We are seeing across the NHS much greater patient demand for information, transparency and choice. We are seeing click health care and modern patients wanting to be able to access information and be empowered. That is all to the good if we want a new generation of citizens empowered to understand what causes disease—how lifestyle, diet and even genomics affect one’s predisposition to disease. We want to empower consumer citizens to prevent disease. We will not do that without empowering them to make choices and receive information. That is why I have a ten-minute rule Bill on the very subject of releasing patient data to patients within the framework of acknowledging that it is their data—our data. By giving patients back their data, we empower them to use them better for public health care.
Chris Kelly
My hon. Friend talks about empowering health consumers to gain greater transparency. Does he welcome the improvements in the past several years to the nhs.uk website, which now provides a great deal of very useful information on all manner of health issues to our constituents?
George Freeman
Yes, I do. My hon. Friend makes an excellent point and I think this is a subject that we will debate more in the House. I am struck that some in the media are beginning to suggest that it is dangerous to release health care data because it challenges how health care is delivered and will create all sorts of unfortunate misunderstandings. It seems to me that those are prices worth paying to drive the revolution of transparency and accountability that the Government’s reforms are beginning to deliver with such benefit. We have seen in health care in the past two or three years a very difficult, at times, but powerful transparency revolution in which failings in the system have been exposed and those responsible for them held to account on behalf of the patients who ultimately paid for the service and have the right to expect that that service is delivered. That genie is out of the bottle and it is not in anyone’s interest to try to put it back. In fact, quite the opposite: at the heart of modern democracy and a modern economy, the notion of empowered citizens who are able to exercise choice in their supply chain—in public services, every bit as much as in private commerce—is an important idea that, although I appreciate the limits of the Bill, we ought to embrace in the rest of this Parliament and the next.
On supply chains, globalisation and technological change mean that in all sorts of sectors many of the goods, services, products, medicines and foods we buy have global supply chains. That globalisation and the extending of the distance of supply chains removes the consumer in many cases from the point of origin of the goods they are buying. In some areas, consumers do not appear to care very much, but in some, such as food, consumers are passionately interested in the source. We saw that most recently illustrated with the horsemeat scandal. Something interesting is going on: globalisation and technology are extending supply chains, but technology is also requiring, allowing and encouraging people to take more interest in the source of the products they buy. That creates a huge challenge. Many of the goods we buy digitally come from global websites that could be pulled down at the flick of a switch, destroying transparency. I welcome the measures to introduce transparency and accountability to the digital marketplace.
I note that the Secretary of State has, I am sure briefly, left his place, but I know that he has a strong interest in the role of supply chains in industrial policy. The turnaround in the British automotive sector has come about principally through important strategic work on how the UK’s strength in components, down at the bottom of the supply chain, can be better integrated through a policy for skills with the manufacturers at the top.
Chris Kelly
Will my hon. Friend join me in welcoming the many examples in the west midlands of reshoring, including in the automotive sector, where businesses are coming back to the UK for processes that they took away from the UK over the past 10 or 20 years?
George Freeman
My hon. Friend makes another excellent point. In fact, no industry is more symptomatic of the post-war British economy, culminating in the crisis of productivity in ’79 and the collapse of that model of growth under, it gives me no pleasure to say, a Labour Government, than the British automotive sector and its restoration over recent years—longer than just the past two or three years, I would grant; over the past 10 years—so that Britain is now a net exporter of vehicles. That has been brought about through a combination of enlightened supply chain work, fostering and supporting the UK’s extraordinarily strong world-class components sector with the bigger manufacturers at the top.
Mr Iain McKenzie (Inverclyde) (Lab)
The hon. Gentleman is making a good point about supply chains, but does he not agree that those who operate supply chains have a duty and responsibility to monitor them at regular intervals to ensure that they live up to the quality and standard of the product at the end of the chain that they will be delivering?
George Freeman
The hon. Gentleman pre-empts precisely the point I was about to make about balance in supply chains. The manufacturer at the end of the supply chain has a duty to understand, monitor, measure and take responsibility for the supply chain, but we also need to provide for consumers to exercise their rights and understand the supply chain.
I want to talk about the two areas I have most experience of: the Government’s industrial strategies for life sciences and agricultural technologies. The central thrust of the agri-tech and food strategy, which we launched last summer, is that corporate interests in reducing costs and dependence on agrochemicals, energy and labour are now very much aligned with consumer interests and demand for increasingly green food with low-carbon, low-plastics and low-water footprints. The challenge in global agriculture is how to measure those inputs and communicate to consumers clearly and simply at the point of purchase that the thing they are buying comes with a low-carbon and low-water footprint. A proper system for measuring that will also make Britain a leader in the technologies required to hit those targets. I pay tribute to my hon. Friend the Member for South Thanet (Laura Sandys), who has done a lot of work on resilience in supply chains and the importance of this agenda. I suspect we will get the benefit of her comments in a moment.
That agenda applies equally in the field of medicine. The challenge of discovering drugs for modern patient groups has seen the industry reinvent itself and move away from spending 15 years and $1 billion on developing a blockbuster drug that it can present to Governments as working for everybody. The more we know about disease, genomics and different patient groups, the more we know that different people get the same disease in different ways, and the challenge is to help the industry develop drugs around the patients whom we know will benefit. Then we can give the right drugs to the right people, instead of wasting drugs and having to set dosages at levels that make drugs ineffective in those for whom they work well in order to prevent side effects in those for whom they do not.
That agenda is driving a completely different way of discovering drugs—one where the NHS works with patients—and creating extraordinary opportunities for the UK to lead the world in providing targeted and ultimately personalised medicine, but it requires a different way of thinking about patient rights. We need to think of patients as having the right to be involved in NHS research; to access the best medicines available; and to access and use data, both personalised and anonymised, to support research. I understand that the Bill does not address that area of consumer rights, but the House will have to return to it in the coming years.
Mrs Main
On supply chains and consumer rights, my hon. Friend might be aware that the all-party group on Bangladesh visited that country last September to look into the Rana Plaza collapse. One thing that came out of our report was the suggestion that consumers should be able to identify whether garments have been produced ethically through a supply chain that does not use people who work in bonded workshops or sweatshops or who are badly treated and not paid a fair wage for a fair day’s work. That is the driving force. I know the Minister is considering a kitemark for garments so that people can be reassured.
George Freeman
My hon. Friend makes another excellent point. If we are to seize the benefits of globalisation and embrace our potential to play a role in those emerging markets, we could help set in place a framework in which citizens of the globe can buy products from the global supply chain confident that they are not supporting sweatshops or irresponsible capitalism. That is a deeply inspiring and progressive purpose for this country in the next cycle of growth around the world.
Consumer rights are not the sexiest subject in public debate—it is not something one hears discussed in those terms down at The Dog and Duck—but it sits at the heart of a lot of the issues the electorate, citizens and taxpayers in this country are grappling with. I do not want to be overly partisan, but under Labour we had 13 years of what increasingly—and perhaps surprisingly—became an example of crony capitalism, and the nation is now grappling with that inheritance: an overconcentration of wealth, privilege and power, and in key markets, such as banking and elsewhere, a small number of providers. As a consequence of that crisis—the black hole in the public finances, the structural deficit—we will have to unleash the powers of modern consumer citizens to drive enlightened public services and a more entrepreneurial and innovative recovery. Consumer rights—consumers of public services as well as private goods—sit at the heart of that. Consumers must be able to understand and demand the right standards from all those supplying them goods and services—whether at the till in the supermarket, on a global website or in the public services on which we all rely—and to hold them to account.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
As Chair of the Select Committee on Business, Innovation and Skills, which spent four sessions examining and discussing the Bill, I understand the point made by my hon. Friend the Member for Barrow and Furness (John Woodcock), although I do not totally agree with it. It is not often that an intervention gets such currency throughout a debate. While some of the issues in the Bill are extremely arcane and legally complex, the consequences of not getting them right could be devastating for individual consumers, as well as detrimental to the economy and to the culture of informed consumerism that we want to underpin and drive better standards of business provision in this country.
Several hon. Members have unfairly criticised my hon. Friend the Member for Walthamstow (Stella Creasy) for the range of issues with which she dealt, but of course not only do consumer rights encompass a huge range of issues, but how goods and services are delivered changes all the time. The growth of online retailing and the digital revolution have thrown up new products and purchasing and marketing processes, all of which, to the unscrupulous, offer new opportunities to rip off the consumer. I agree with hon. Members who have said it is impossible to devise consumer rights legislation that deals with every possible eventuality, but we can consider certain basic elements of legislation that will at least inform consumers and make them less susceptible to being ripped off in what is a rapidly changing and sometimes pretty vicious business world.
The Secretary of State himself said that the Bill was only part of the picture. The much bigger picture includes competition and transparency, and the idea that we can solve all consumer rights problems with one piece of legislation is fanciful. It must be accompanied by a range of policies across Government designed to improve competition and transparency, so that those who wish to exercise their consumer rights have the right information basis on which to do so. I would single out three elements as being essential for everyone: first, clarity of pricing; secondly, clarity of contracts; and thirdly, and in some respects most important of all, clarity in the mechanism by which someone can obtain redress if they are not satisfied with either the quality or pricing of a particular good or service. The Bill tries to address some of those, but could be improved in certain areas.
The Committee heard evidence from business and consumer rights groups, and both Government and local government organisations, and received 43 pieces of written evidence. In its report, the Committee welcomed the aims of the reforms but also raised a range of issues that it felt merited further examination and it made stronger recommendations on those. A rough count of the Government’s responses would indicate that they have accepted about 70%, which is a decent hit rate for pre-legislative scrutiny. We recognise the Government’s willingness to listen to the Committee’s arguments and to take them on board.
I will not pick out those that the Government rejected and re-argue the arguments from the Committee, as I am sure that they will form part of the debate that will take place in the Public Bill Committee. Having said that, I will single out some issues where I feel the Government have not delivered and which merit further debate in Committee. The first is the sale of goods. The Bill retains the provision for “deduction for use” which, in effect, is a discounting of the refund for something that is faulty that may be made if the consumer exercises his or her final right to reject. The Committee—based to a certain extent on the Law Commission’s recommendation—said that that should be removed. The Government’s arguments for not doing so, which they will no doubt rehearse during the Bill’s progress, is that that would lead to complications in terms of the time scale involved, the level of use and so on. They asked whether it would be fair to give anybody a total refund or replacement for something that they had had, and had used, for a while.
We proposed a fallback position, which happily the Government accepted: if the Government retained the deduction for use provision, they should have a formula that was fairer than the ones that were debated beforehand. I will not go into the technical elements of that but basically the provision should reflect the cost to the consumer for the loss of use rather than the market condition or the cost to the business providing that product.
On digital content, we felt that the remedies for tangible content—for example, CDs—and intangible content, such as a download, were inconsistent. There are again some complex legal issues surrounding that but we felt that the Government had taken the safest position and perhaps should try to equalise the rights of redress so that anybody could get a refund for downloaded content as well. I recognise that the Government have gone some way towards that but the issue is complicated and needs further examination.
On services, it is fair to say that that was a subject of considerable debate and disagreement among witnesses in the evidence that the Government and the Committee have had. Where there is the provision of a service—the Minister mentioned cowboy builders—it is true that the Bill contains the opportunity for redress. But the Government have retained the legal liability standard of where a service is provided with reasonable care and skill, rather than the one that the Committee preferred, which was basically an outcomes-based model; if the service were not provided, full stop, the person who paid for the service should be entitled to a refund.
To encapsulate the different perspectives on that, there was an argument that one could have a very competent and expert French teacher who took somebody on a course for which that person paid but, at the end, the person—for various personal reasons—was no better at speaking French. Would that person have a right of redress notwithstanding the quality of the teaching received? I agree that there are issues there. However, I would have thought it possible to build into the legislation some conditions that recognise that one could measure reasonable care and skill rather than the outcome.
The Government looked at the other perspective in their reply to the consultation, using the example of an electrician who rewired a house very competently but, for one reason or another, could not wire it up to the mains. The Government said that because that electrician had exercised reasonable care and competence in rewiring the house, the person who paid for the service should not get the full compensation. In effect, the electrician would be entitled to discount the compensation because he had done at least part of the job correctly. That was the Government’s example but I could not help but feel that if an electrician did not start off on the basis that he could connect a house to the mains, that would be a fundamental flaw in their competence. We would reasonably expect a person, whatever the electrician’s skill, who could not access electricity in their house to be entitled to a full refund.
I mention those examples to demonstrate the different perspectives and complexities involved, but the Committee would have preferred a harder line to be taken, not least from the point of view of the consumer, because it is much more difficult to prove that a person has not exercised reasonable care and skill—and much more difficult for a consumer to take that through a legal process—than if there is a simple outcomes-based standard based on the failure of someone providing a service to deliver that service.
On unfair contract terms, the Bill does not add a term to the grey list, with which MPs may not be familiar; it is the indicative list of contract terms that may be regarded as unfair. The Bill does not add a term concerning a change by the trader where the consumer is not free to dissolve the contract without being disadvantaged. Again, that is an arcane point but here is an example to give it some depth. In at least one quoted example, a bank changed its interest rate halfway through a mortgage period and a person paying that interest was highly disadvantaged. There was an option in the contract to get out but there was no alternative provider. It was felt that, where a person was locked into a contract—even by default—they could be severely disadvantaged by a change in the terms of the contract. If that change were for no reason other than the desire of the company to get extra profit, that should be put in the grey list of unfair contract terms. I hope that the Government will look at that further in Committee.
Earlier I outlined three elements where it was essential that the Bill should demonstrate that it empowered consumers; pricing, contracts and redress. Members may not have seen the excellent briefing from Citizens Advice, whose recommendation of a legislative requirement for a trader to promote that statutory right to the purchaser at the point of sale was supported by the Select Committee. It should be possible for a receipt to contain information about how and where the purchaser of a good or service can obtain redress if for any reason that good or service is not up to scratch. The Government have made sympathetic noises, but they have yet to agree to implement that recommendation.
Surely the first stage in the creation of an informed consumer society involves enabling consumers to know exactly where they need to go and what they need to do in order to obtain redress if what they have purchased is not what it ought to be. We are living in a highly complex world, in which goods and services are delivered in all sorts of ways. I believe that that one simple change would do an enormous amount to create that society of informed consumers, which could then drive our economy, and hence drive the business practices of those who provide goods and services.
I could go into much more detail, but I think that I have exercised the patience of Members to a sufficient degree. I hope that the Select Committee’s arguments and recommendations will be examined again in the Public Bill Committee, perhaps in a more politically robust way. Overall, however, although I do not think that this is the most ambitious of Bills—it is essentially a consolidating Bill, and it has a long way to go before it can realise the visionary objective of transforming consumers’ awareness—I think that it is a step in the right direction, and that if the Government accepted the Select Committee’s other recommendations, they would take a few more steps in the right direction.
Adam Afriyie (Windsor) (Con)
I support the Bill because the principles that guided it are exactly what the country needs in order to get back on its feet after 13 years of what could be described as misappropriation of the public purse by the Labour Government.
Sheila Gilmore (Edinburgh East) (Lab)
I am utterly astounded that the hon. Gentleman should believe that this is the legislation that will put the country back on its feet. The Bill is a consolidating measure. Surely we need something a bit more dramatic.
Adam Afriyie
Perhaps the hon. Lady misunderstands the Bill. It is at the heart of empowering consumers—empowering citizens, indeed—by providing them with information and freely operating markets so that they can make the choices that will lift the whole economy. If the hon. Lady will allow me to continue, I shall explain precisely why the Bill should be welcomed by Members in all parts of the House.
As I have said, the Bill will empower consumers and enable them to make choices. It will also simplify regulations—particularly those governing small and medium-sized businesses, which are the life blood of the economy—and help small businesses and consumers to tackle manipulative, anti-competitive and monopolistic practices by creating a form of speedy redress. Above all, it will help us to continue the process of facilitating the fierce competition between businesses that will not only improve public and consumer services, but help to lift the economy further in the future.
This is a Bill that takes competition seriously, and raises the game for everyone. It empowers people, and it backs British businesses. I listened carefully to what was said by the hon. Member for Walthamstow (Stella Creasy), and I accept that some small changes may be required in Committee, but, on balance, I think that the Bill and the principles behind it will be good for the United Kingdom’s economy.
Competitive markets are a successful country’s bread and butter. They are what we need in order to lift all the boats, not just the yachts. I fear that unless companies compete fiercely to sell goods and services, the future of the nation will not be particularly successful. Competition raises standards and pushes down prices: every person who has been in business knows that, as does every person who has ever bought a product or service, including those who have done so online.
We know that if we can choose where to buy a product, and if the contract terms and the information about what we are purchasing are clear, the means of exchange will be facilitated, and our ability to make a choice will drive down prices. I believe that any business that does not respond to those signals from the market and from consumers, and to the extra signals that will be conveyed by the Bill, will in fact no longer be in business. Principles such as that are at the heart of the Bill, and at the heart of the competition that will enable businesses to create a better country.
The Bill will give the consumer the power to shop elsewhere, and it will also drive innovation. If businesses have clear, fair contracts which their customers understand, they will need to work harder and innovate more quickly to remain in business. That, indeed, is the joy of being in business: competing, innovating, and knowing that the business is not only making profits for its owners and shareholders, but lifting economic growth nationwide, and providing better goods and services for everyone involved.
I also think that the Bill should be welcomed by Members on both sides of the House because, for the first time, consumers’ rights are contained in a single piece of legislation. To that extent, the Bill is a consolidating measure, but I can say with my business hat on that consolidating those rights in one simple piece of legislation will enable business productivity to increase. Instead of spending hours being trained and briefed on legislation that does not actually help anyone, staff will be able to concentrate on providing better services for their customers, and on making a return for the business—as well as a return for the Exchequer in the form of the increasing tax takes that that will generate.
The simplification in the Bill is no small matter. Estimates vary, but it may scrap up to 100—perhaps up to 1,000—pages of existing legislation, and bring measures together in a package that is easier to understand. I hope that it will also close many loopholes created by disparate pieces of legislation, some of it dating back to the 1800s and certainly much of it to the 1970s, which have enabled unscrupulous businesses to escape from the spirit of the law.
Given that many others wish to speak, I shall make only a couple of observations about part 3, which I believe should also be welcomed with open arms. For the first time, consumers and small businesses will be able to challenge anti-competitive practices. We all know, as consumers, that if a company does not quite deliver what it is supposed to deliver in the case of a low-value item bought on the internet or perhaps in a supermarket, it is futile to suggest that we should attempt single-handedly to argue that competition was not working effectively, or that monopolistic practices were involved. The Bill and the competition tribunal will make it a great deal easier for smaller businesses to get together, and consumers to get together, to ensure that their voice is heard, not by means of incredibly expensive court battles with corporate companies that have multi-million-pound budgets for lawyers, but by means of a simple and cost-effective tribunal route.
The principles that guide the Bill are the principles that will guide us further out of recession and further into economic growth. I very much hope that Opposition Members will support those principles. I also hope that any modifications that they seek to make will be proportionate, will have the consumer’s interests at heart, and will not overlook the fact that the purpose of the Bill is to enable fiercely competing businesses to drive down prices, giving citizens and consumers the choices that they need.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
Colleagues who remember my speech during the debate on the Queen’s Speech at the start of this Session will know that I see this Consumer Rights Bill as an opportunity to address the serious failings in the secondary ticketing market. I want to explore that opportunity in my speech today. I was pleased to hear my hon. Friend the Member for Walthamstow (Stella Creasy) agree with my views on this in her excellent speech, and I am pleased that she is drafting amendments to the Bill accordingly. I know that a growing number of Government Members also agree with me.
Many colleagues will know that I have campaigned on this issue for a long time. I secured a Westminster Hall debate on the subject only last week. I see that one of my sparring partners, the hon. Member for Bury North (Mr Nuttall)—who is often on the opposite side to me on this issue—is in the Chamber today. That debate was intended as a curtain-raiser for an inquiry that is being undertaken by the newly-formed all-party parliamentary group on ticket abuse, which I am pleased to co-chair with the hon. Member for Hove (Mike Weatherley). He is also a long-term campaigner on this issue. That inquiry is intended to inform the thinking on amendments to the Bill that could be tabled in order to enhance the rights of consumers in a market that has had precious little scrutiny thus far, despite being worth around £1 billion a year.
I hope that the Government’s timetable for the Bill will allow us to conclude our evidence-gathering in time to present that evidence to Ministers for Report stage, although, for my money, there is plenty already out there that makes the case for intervention, some of which I will skim over in my speech today. If Ministers want a more detailed case, I would be happy to send them the Official Report of the debates on my Private Member’s Bill in 2011 and of last Tuesday’s Westminster Hall debate.
Like all markets, the secondary ticketing market serves a purpose. It meets a need, and that need is for people who have bought tickets for an event they can no longer attend to sell on those tickets, and for people who decide late that they want to go to an event to purchase tickets nearer the time. However, the refusal of successive Governments to get involved in this issue means that the market has moved far beyond simply performing that role, and it is now fundamentally failing consumers.
If anyone needs proof that these secondary ticketing websites are not about legitimate fans selling tickets they cannot use, they need only watch what happens on the day that tickets for a major sporting event, concert, or stage show go on sale. Within minutes—sometimes even seconds—an event or series of events for which there are thousands of tickets completely sells out on the official market, only for thousands of tickets to appear instantaneously on the secondary market at a significant mark-up. Nobody buys a ticket at 9 o’clock in the morning, only to realise at 9.5 am that they cannot go to the event. Those are tickets that are harvested in vast quantities, by fair means or foul—the foul means involve the misuse of computers or back-channel dealing—and then either dumped or drip-fed on to the secondary market for profit by industrial touts.
Just last week, the BBC highlighted the resale of state-subsidised theatre tickets at the Donmar Warehouse and the National Theatre for up to 10 times their face value. Those tickets are rightly subsidised to increase access to the arts, but those arrangements are being exploited by faceless individuals who are pricing out the very people the tickets are supposed to be for. The same happens with art tickets—the Da Vinci exhibition in 2012 and the David Bowie exhibition last year are prime examples. This applies to more commercial enterprises as well. The last big example of that was tickets for the Monty Python reunion being snapped up and resold at eye-watering mark-ups within minutes.
I do not know whether the Secretary of State for Business, Innovation and Skills is a fan of the Arctic Monkeys—it is not exactly ballroom dancing music—but that band has done more than most to try to stop touts cashing in on its hard work. Even it cannot stop the practice, however, despite trying to do so and despite doing nothing to encourage it, as some bands and promoters are accused of doing. If the Secretary of State wanted to see the Arctic Monkeys at Finsbury park in May, the minimum he would have to pay for a ticket on the secondary market would be double its face value. On one of the websites, I counted seven pages of listings, with some entries allowing up to 10 tickets per applicant.
This is not about random gig-goers; this is large-scale manipulation of a market, and an exploitation of copyright and intellectual property by individuals who put nothing into the industry that they are capitalising on. It is a parasitic market that is now out of control. In many cases, the practice severely undermines the strategic objectives that are factored into ticket pricing decisions, such as the need for artists or sports to develop long-standing relationships with fans or, as in the case of National Theatre and exhibition tickets, access to the arts.
More importantly for me, this practice is obviously bad for consumers. Many never get a chance to buy a ticket at face value, and if they can bear the cost of going to the secondary market, they do not know who they are buying from or whether the ticket will be genuine or still valid, as event holders have the right to cancel tickets they identify as having been resold. They cannot even be sure whether the ticket was ever available on the primary market at the face value printed on it, as more and more event-holders try to cash in on the secondary market by directly allocating tickets to it, passing themselves off as fans selling to fans so as not to damage their reputation with fans.
The report from Operation Podium, the Metropolitan police unit set up to monitor crime related to the Olympic games, shows that the complete and intentional lack of transparency in the market creates a front for fraud and large-scale money-laundering. The market is therefore attractive to organised criminal networks, which are of course more likely to use illegal means such as botnets to harvest genuine tickets, making it even harder for consumers to buy tickets at face value. The report, “Ticket Crime: Problem Profile”, clearly states:
“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.”
Those are not my words but those of the Metropolitan police report.
I hope that the Government will have heard the excellent exposé that Radio 4’s “You and Yours” produced in conjunction with ticketing expert Reg Walker last summer, which uncovered a large-scale fraud perpetrated through the main secondary websites by their so-called power sellers, whose privileged status allowed them to do that. This was able to happen precisely because of the opaque nature of the market and the way in which those websites operate.
What better way of addressing this kind of problem than through the Consumer Rights Bill? At the very least, the Government need to ensure that there is a right to transparency. After all, there are very few markets in which we think that it is fine not to have at least some basic knowledge about who we are buying from. To ensure that consumers have the information they need to make an informed choice, these websites must ensure three things. First, they must ensure that all ticket listings display the face value, and seat number where appropriate, of the tickets being purchased. That would prove that it was a real ticket that was already in existence.
Secondly, websites selling tickets that they have acquired themselves, or that have been directly allocated to them by an event-holder, must disclose that clearly to buyers, instead of passing the tickets off as being sold by fellow fans. Thirdly, individuals selling tickets via the websites must be able to provide proof that they actually own the ticket. When we buy from eBay or Amazon, we are at least able to see a profile of the individual or company we are buying from. We can see what they have sold in the past, and what other consumers are saying about them. The secondary ticket market could learn a lot from that approach.
Those measures would cover the right to information, but there must also be a right to recourse when the market lets consumers down. As I demonstrated earlier, the way in which the market works at the moment is allowing fraud to be perpetrated under the anonymity that the secondary websites offer to sellers. When someone turns up at a venue and finds that they cannot get in because they have been sold a fraudulent or invalidated ticket—or a ticket that has rightly been cancelled because it has been resold without permission, in contravention of its terms and conditions—it is not just the price of the ticket that that person loses.
Mr David Nuttall (Bury North) (Con)
The hon. Lady has mentioned the word “fraud” twice now. If a fraud has been committed, does she not agree that a crime will have been committed and is therefore actionable by the police as a crime?
Mrs Hodgson
I do agree, but people who report fraud or illegal activities to Action Fraud are finding that the offence is not being taken forward. Perhaps it is because it is seen as a minor fraud or a minor criminal offence. The Metropolitan Police have recommended that we pass legislation to ensure that we take forward such offences as criminal activity. We need to put such a measure in the Bill so that we can follow their recommendations.
A new report by UK Music on music tourism and its value in our economy calls on the Government to tackle the problems of the secondary market. It says that people who travel from one country to another or from one end of the country to another for the sole purpose of going to a gig or seeing a show incur substantial costs, such as those for travel, airfares, accommodation and subsistence. Consumers who are sold fake or invalid tickets should not expect to have just the cost of the ticket refunded promptly. That guarantee, which they actually pay for as part of the service charge that is slapped on the tickets when they buy from these sites, is not always honoured judging by some of the stories that people have sent me over the years. Consumers should also have the right to be able to reclaim all of the associated costs they have incurred where they can be proven with receipts.
Such measures would not prevent the secondary market from functioning, but it would ensure that it is focused on the rights of consumers, rather than on the rights of a handful of industrial touts who want to make unlimited amounts of money off the hard work and investment of others. Personally I would like to go even further, and allow rights holders properly to protect their tickets from being resold without authorisation. I hope that a future Government would look more favourably on such a measure than the current Government do.
It is ludicrous that the Government have ignored the calls of the Rugby Football Union and England Rugby 2015 to ban the unauthorised resale of world cup tickets as they did for the Olympics. I hope that when the world cup comes around, our streets are not littered with those who have, in all innocence, bought counterfeit tickets, because they are being sold all over the place and are available from unofficial outlets, and fans have not been able to tell the difference.
Given that two of the four secondary ticketing platforms are already listing tickets for the final and for numerous other games and were doing so as far back as December, despite the fact they do not go on general sale until October, there is clearly a question about whether every ticket that is listed on those sites actually exists. However, the best should never be the enemy of the good. The measures I propose are very much in keeping with the spirit and intentions of this Bill, and will be widely supported by the live events industry and consumers alike. I hope that Ministers and other Members will look on them favourably—perhaps they can be incorporated into the Bill before its later stages—and take action to put consumers of live ticketed sporting and cultural events first and to tackle once and for all the parasitical ticket touts who prey upon them.
Laura Sandys (South Thanet) (Con)
Following the contribution of the hon. Member for Washington and Sunderland West (Mrs Hodgson), I will be watching very carefully when I next buy a ticket to an event.
I am the only Member of Parliament who used to work for the Consumers Association. It is important that the consumer voice is heard in the House. This Bill is an excellent piece of legislation. As my hon. Friend the Member for Windsor (Adam Afriyie) said, it is simple, clear and designed to give consumers access to redress and ensure that they are in a position to take control and that they are getting the value and the product or service that is clearly “on the package”. I welcome the legislation and feel that, at last, we are pulling the threads together and ensuring that we have clarity at the heart of our consumer policy.
I was also very taken with what my hon. Friend the Member for Mid Norfolk (George Freeman) said about broadening the debate and ensuring that we do not just address the issues of consumers at the point of redress and when things have gone wrong. I feel passionately that we must take our agenda even further and place consumers at the heart of markets. Good markets put consumers in the driving seat and that enables consumers to make, shape or break products. Bad markets disguise; they mislead and control consumer choice. This is the first in a number of pieces of legislation. I am sure that, over the following stages, the Government will look at where we can embed consumers at the focal point of our competition and market philosophy.
Markets, regulators and Government Departments must put consumers at the heart of the economy. I welcome the role played by the Department for Business, Innovation and Skills in that regard, and I hope that it will champion it across other Departments because we need to ensure that they look at the power of the consumer, and not just be captured by the power of the supply chain.
Members have talked about energy prices, ticket touts and telephone and broadband suppliers, but there is also the food sector, which needs to allow consumers to shape the market. I am particularly concerned about “shrinkage”, which is becoming very common. It is something that poorer consumers are finding extremely challenging. Food companies are creating a perception for the consumer that a particular product is the same as another one that they may have seen or bought. Ultimately, what has happened is that the quality ingredients in the product have been reduced. That is happening across a wide range of products and, because no obvious flash is placed across the product, saying, “30% less good ingredients”, consumers are not able to make proper choices. They are not able to recall the weights and measures of the ingredients in every favourite item to try to establish whether its content has been reduced.
Mintec, one of the big analysts of the food sector, says:
“Shrinking products have become a ‘common tool’ used by a range of food sectors, from confectionary and snack foods to soft drinks, to mitigate the volatility of commodity prices.”
It is crucial that the Government bear down on those companies that are not being transparent. I hope that this Bill will be the platform for further pressure on the supply chain to ensure that consumers have absolute clarity and transparency in what they are purchasing.
It is important that we extend and broaden our consumer policy beyond just protecting the vulnerable consumer. We should do more than just protect the consumer at the point of market failure. We must engage the consumer right at the beginning of the design, regulation and governance of our markets. I suggest that we look at some measures that we can take over the next couple of years and into the next Government. They include a very clear focus on consumer policy. I propose that we consider appointing a Minister of State for consumers. That Minister needs to act as an advocate around all Departments to ensure that they are looking at the consumer who needs to be at the heart of their decision making.
I also urge the Government to consider the regulators. They have consumer representatives on their boards, but do they design their markets around consumers? Or are they also, in many ways, looking to, and captured by, the supply dynamic? We must review regulators’ remits to strengthen the consumer voice, not just in terms of redress but in terms of consumer activism and efficiency.
I also welcome the Bill because it creates simplicity of information, which is absolutely fundamental for consumers. Frequently, energy companies, for example, say that they must educate the consumer—for example, that they must do a public awareness course so that consumers understand what kilowatt-hours are. I would turn it around and say that they needed to design their product around consumers rather than expecting consumers to become electrical engineers.
It is incumbent on people who have dominant roles in markets and those who are an important part of our consumers’ lives to deliver the truth. We need to be very clear that we expect a presumption of truth and that redress must become simpler and more public. I propose that companies that have been prosecuted by trading standards should have to put that prosecution on their website for a month. We must ensure that the consumer sees what goes on and sees when they have been taken for a ride. It is crucial that we address the question of the large companies that put their hand in the petty cash box and pay the money to trading standards so that nobody is any the wiser while continuing to pursue certain non-transparent aspects of their business model.
I know that the Government care about putting the consumer at the heart of markets and I am sure that we will consider legislation that does that. It is imperative that we ensure that we start to rebalance the relationship and create greater symmetry between the consumer and the large dominant companies, particularly those in the food and energy sectors. I know that the Government have consumers at the heart of their agenda and I believe that it is our role to remind the market that the consumer must be king.
Mr Iain McKenzie (Inverclyde) (Lab)
I want to focus on certain aspects of the Bill that relate to the changing landscape of the types of products we purchase, the sales techniques we encounter, the impulse purchases consumers make, the consequences of those purchases and, last but not least, the consumer’s experience of the unknown data sharing that clearly happens.
A number of Government Members tried to entice us to welcome the Bill. Although I do not welcome it in its entirety, I welcome the spirit behind it. We welcome anything that brings consumer rights up to date, although I do not think that the Bill totally does that, or that protects the consumer, although the Bill does not do that in the way that we would like to protect them. Those on the Front Bench suggested, as I would hope, that they would engage with the devolved Administrations and encourage them to consider consumer rights and to embrace and work on some of the issues that are raised today and will be raised in Committee and during the later stages of the Bill.
It is difficult for consumers. It is difficult for them to know their rights and for some of them to understand those rights, or to know where to seek assistance if they believe that their rights have been breached. That crosses the generations, covering both the elderly and the young. Let me give an example, which is not in the Bill, that I would ask the Government to consider, caused by the changing way we purchase things. We go online to purchase nowadays, so protection is required on downloads as much as on the hardware and the physical products that we buy.
We must embrace the idea that we live in an age of online shopping and we purchase things that we can only download, as they have no hard physical existence. We still need those products to do exactly what we have purchased them to do, however. We are now living in the world of apps and if we download a patch to our phone or tablet, we should not just accept that it did not operate and move on to the next download.
I want to enlighten the House by sharing some of the experiences that my constituents tell me about when they come to my surgeries. They have had, or believe that they have had, their consumer rights infringed. One example involves unfair business behaviour and sales techniques, such as those used to sell products over the phone. Elderly constituents have come to me who have been caught out time and again by those selling over the phone. The most recent case involved insurance sales. It is not hard to pitch a sale when we have been through a difficult winter, with storms and so on. If someone says, “We can do your house insurance £50, £60 or £100 cheaper,” that would be enticing to an elderly couple, for example, with a low budget.
As we say, if something is too good to be true, it probably is, but those people only find that out when the dream bargain they think that they have acquired over the phone turns into a bit of a nightmare when they have to make a claim. I have heard complaints that such insurance sales companies are difficult to contact and difficult to get back to. After the difficult and stormy weather that we have had, they renege on their commitments for months on end. That means that we have elderly couples in extreme panic about the repairs needed to their roofs. They take on the insurance, but find that they end up phoning the other side of the country and are in a queue, meaning that it can take anything from 20 minutes to get through to someone to talk to. Even after that, the repair does not transpire for months.
Susan Elan Jones (Clwyd South) (Lab)
Does my hon. Friend not agree that one of the great problems with some of those calls is how the company at the other end of the phone can make it look as though the consumer has to purchase the product, as though they are coming from some pseudo-position of knowledge? That is especially the case with the rightly much-unloved energy companies, some of which urge consumers to take out higher direct debits by making it look as though they have to do so because otherwise there will be serious problems. They even suggest that there will be money at the end and that it will be a nice way of saving. That is completely unethical.
Mr McKenzie
I thank my hon. Friend for her intervention, and she is absolutely right to say that there is a pressure from the other end of that telephone line to make the recipient think that the caller is selling the best possible product imaginable. Time and again, it catches people out.
It is not only a question of the elderly being caught out by sales over the phone and so on. Increasingly, a number of young people are coming in to my surgery. They are not the only people who purchase online, but they are increasingly purchasing certain products online and are bitterly disappointed by their quality. I am speaking about those who might have downloaded things, especially music, from the internet in the months leading up to Christmas, only to find that the music is not quite what it said it was and is not quite of the quality they would have expected from the group or individual they downloaded. For them, it is a case of saying, “That is not what I wanted: the product does not do what I thought it would when it was sold to me.” In some instances, it is not entirely the person they expected when they downloaded their purchase. Other people are filling up tracks just to make up the album.
The problem does not often come to light, because when people purchase something for £2.99 or £3.99 they think that it is not really worth their while to go back and complain. However, when we multiply the problem by the number of young people who make downloads and share that experience, it adds up to quite a bit of money. The Bill should look at the download and software side as much the hard physical side of the problem.
We live in an era in which we share a lot of data—perhaps we do not realise how much data companies have on us, including about our buying habits and other trends. I dare say that if we went into certain supermarkets, they could tell us what we purchased every week, what we changed every week and, more to the point, what we were probably enticed to buy when there were “Buy one, get one free” or “Three for the price of two” offers. It is that sharing of data that leads to another consumer experience: nuisance or persistent calls in which people are told, “We know what you buy, we know what you like, and we know what you might buy.” We live in a different world in which we are told that we should not wait and that we have to buy something now—“Get it now; don’t wait”—which is in stark contrast to the experience of a previous generation, who thought that if they could not afford something, they should not buy it. There are pressures to impulse buy as a result of the sharing of that sort of information. For some people, that leads inevitably to debt. An increasing number of people are getting into debt as the result of such purchases.
Mr David Hamilton (Midlothian) (Lab)
Is it not the case that when certain groups of people take those calls they take a backward step? They think that they are talking to the agent or the company, but in fact they are talking to a sub-company. They are left with a belief that they have to do something. It is not a question of whether they should do it—they have to do it.
Mr McKenzie
We should never forget that those sub-companies have targets, and they will do anything to meet them. For example, a young constituent came to see me. He had purchased a mobile phone contract, and wished to give up the phone after the term of his contract had ended. He found that, yes, it was easy to give up the phone, but he noticed on his bank statement that every month a deduction of £5 continued to be made by the company. He wondered what on earth it was about. He had given up the phone, only to find in the small print that he had been sold phone insurance. Because of its targets, the company continued to take insurance money, even though he did not have the phone.
That leads me to the problem of debt and how we help people to get out of debt. I am delighted that in my area we have begun a campaign to highlight the problem called Debtbusters, which has been rolled out across Scotland both to help people who have got into debt as a result of those purchases and to tackle payday lending. One way out is to offer advice on credit unions. The focus on credit unions tends to be the credit side, but we need to change that and focus on savings. It is unbelievable that, after eight weeks, someone can take out three times what they have saved and that leads to increased debt.
In conclusion, Labour believes that this Bill does not do enough to clarify the way in which customers are empowered in both local and national structures to ensure that they know who to turn to for help when things go wrong.
James Wharton (Stockton South) (Con)
I welcome this important Bill. We have heard much about its impact and the positive benefits that it will bring to consumers, and I will talk about that shortly. When I was even younger and a law student studying the myriad regulations and legislation that made up consumer protection, I remember spending many a sober hour late into the night trying to get my head around a very complex area of law, which was beyond the reach of many lay people who would not have been able to devote the time that I, as a student, could. Occasionally, I suspect, it was also beyond my reach as a law student. Therefore, it is welcome that we see a real and genuine attempt by the Government to consolidate much of that regulation and legislation into a clear and straightforward Bill which will, I hope, become a clear and straightforward Act, and will empower consumers and enable them to enforce the rights to which they are entitled.
As a starting point, this consolidation Bill, which is part of what it is, is welcome. Compared with other consolidation Acts, such as, to recall again my days as a young law student, the Trade Union and Labour Relations (Consolidation) Act 1992—a monster of an Act, which tries to do many things and to bring together many pieces of legislation, and is so complex that it is very hard to decipher—this is clear and straightforward. We know what it says and what it means. We know what it means for our constituents and what it will mean for consumers in this country and for our economy. That is a positive benefit.
It is also worth noting that the Bill updates our consumer law for the 21st century—not my words, but the words of the chief executive of Which?—because it talks about protection for digital downloads and digital content. It is a glaring omission that our consumer regulations have not been able successfully and adequately to keep up with what is now such an important part of our economy. In 2012, more than £1 billion was spent downloading digital content, and more than 16 million people who did that had a problem of one sort or another with what they downloaded. That is not a good situation, but it is even worse when we have a regulatory framework that does not address it and does not directly give people the sorts of rights that they need in order to be protected in an increasingly important part of our economy.
Andy McDonald (Middlesbrough) (Lab)
Given what the hon. Gentleman has just said, does he welcome the European directive on alternative dispute resolution?
James Wharton
The hon. Gentleman makes a good point. I welcome the fact that competition regulation can be properly done across borders, across Europe, in a way that allows us to continue to trade together and to have a functioning free market within the European Union. I welcome the directive. It is something that we can do ourselves, and are doing ourselves, but that does not mean that I am against it in principle. It is an important point. This is something on which we can unite across the House because it is about getting the right deal for our constituents. This is about protecting people, some of whom—we have heard examples of constituency casework—are vulnerable, are pressured by unscrupulous sellers and need protection in the form of legislation, and others of whom, while they may not be vulnerable, find themselves, through unfortunate circumstances, with goods or services that do not meet the standards that they expect. It is right that we have a clear and straightforward framework that offers them the protection that they should be able to expect to rely on. That is what the Bill does, and that is what the Bill extends to digital content, which is incredibly welcome.
I do not intend to detain the House for long, but it is important that, on behalf of law students throughout the country and consumers in our economy, we recognise that the Bill does a good thing. It simplifies and consolidates an important area of law and regulation, and it will make life better for people who buy goods and services and rely on the functioning economy that lies behind the selling and providing of goods and services in this country. I welcome it. I hope it will gather support across the House and that it will be successful and become an Act.
Sheila Gilmore (Edinburgh East) (Lab)
The hon. Member for South Thanet (Laura Sandys) said that she had previously worked for the Consumers Association. Earlier in my career I worked for the Scottish Consumer Council. It is important to recognise that Governments of all colours have wanted to strengthen in various ways the rights of consumers. The National Consumer Council and its Scottish and Welsh equivalents were set up by the Labour Government of the 1970s, so everyone has aspired to putting the consumer at the heart of things. The problem sometimes is how to make that a reality for those consumers. How can we ensure that people understand how to use the rights that they are given?
People often encounter the greatest difficulty when dealing with smaller retailers, because in larger companies staff are generally better trained and so better able to respond. Indeed, some larger retailers would rather allow the consumer to go away happy, even if that means going beyond the basic statutory minimum. Many smaller retailers, however, either seem unaware of what the law states or deliberately obfuscate when a consumer complains. They say, “You have to go to the manufacturer for that,” even though that has not been the case for many years.
Citizens Advice has suggested amending the Bill—perhaps the Minister will consider this—to make it a requirement that information on consumer rights is provided at the point of sale. It has made some suggestions on how such information could be presented, because it is aware that it could be quite difficult to convey simply. I think that that information, whether it is on a notice in the shop or on the till receipt, would be helpful, as consumers would be clear about what to do if something goes wrong.
Another relatively minor amendment that Citizens Advice proposes is including a time limit for repairs and replacements. I remember what things used to be like, when I had to try to explain to people what was going on with repairs, when they could get a refund and whether accepting a repair put them in a difficult position. The simplification is to be welcomed. However, the question remains whether there should be a limit on the time a company can take to repair and return a product. Citizens Advice suggests a 30-day limit. I would like to know whether the Minister will consider such a change.
Services have always been more difficult to regulate than goods—when we buy an object, it is much clearer what we are buying. The relevant legal wording, which effectively requires one to make a judgment on whether reasonable care and skill has been used in the performance of the service, has always been quite difficult. It is good to have that made explicit, rather than implicit. It is not an implied term; it is to be taken as an expressed term in the provision of services. However, that still leaves open the question of precisely what that means. Could it be measured in some way?
I was interested to hear what the Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), had to say on that and about the Committee’s recommendation. I hope that it can be explored more fully to see whether other measures could be used, at least in relation to some services, to give a clearer and more explicit measure of whether a service has been performed in the way it should have been, rather than having to rely on a debate on what is a reasonable level of skill.
Ultimately, we must also look at how people exercise their rights. Ideally, they should be able to exercise them face to face with the person providing the service or selling the goods. Things should be sufficiently clear that the consumer can go back, exercise their rights and get a good response, but we know that that does not always happen. We must therefore look at the means by which people can get redress.
Citizens Advice also wants the Government to consider the question of collective redress in relation to competition cases—if there is a particular kind of mis-selling or product or service failure—that affect not just individuals, but people in particular localities or up and down the country, and on which a collective response is available, because there is strength in numbers.
Although allowing an individual consumer to have all their rights and choices is clearly important, they are sometimes a small cog in the wheel, and it can be very difficult for them to push a case. Many people simply give up, because it is not worth the effort: if they are rebuffed at first, they will not necessarily pursue their case further, because they do not know how to do so or find the whole process so difficult.
Even for people who contemplate going to court, the process can be quite expensive. Other hon. Members have spoken about the difficulty of getting legal aid to go to court or even for legal advice. A court fee can be a considerable block to people’s ability to exercise their right. For example, in Scotland, an action for a small claim can be made for something worth more than £200, which is not a huge amount in relation to various consumer purchases, but it costs £71, which is quite a lot for someone to risk if they feel that they might not win the case. We therefore have to consider the whole idea of redress.
When I was involved with the Scottish Consumer Council, we did much work on developing proper small claims courts to which people could easily go, be represented and get a lot of help. There is still merit in trying to develop such an approach, rather than people feeling that their case cannot be taken forward. That is where the collective becomes important. For one individual, the cost and effort of pursuing a case will be great. As my hon. Friend the Member for Inverclyde (Mr McKenzie) said, even in relation to what seem very small amounts—less than a fiver—such amounts add up and, collectively, it should be possible to put such cases together.
I share the concern expressed by my hon. Friend the Member for Walthamstow (Stella Creasy) that no one wants a book of law of huge size, as was suggested by the hon. Member for Eastleigh (Mike Thornton), but this is an opportunity to legislate on some of the issues that hon. Members raise time and again because of their constituents’ experiences. Various people are campaigning on many of the issues, because they understand the detriment that people are suffering. This seems to be an opportunity to legislate, and it is sometimes important to legislate. Rather than end up with smaller pieces of legislation in future, which would recreate the difficulty that we now have in consumer legislation, we could take the opportunity of having this Bill to consider some of the issues.
My geographical, if not adjacent neighbour or political colleague, the hon. Member for Edinburgh West (Mike Crockart), has pursued the issue of nuisance calls. With other hon. Members, he has made some progress in highlighting that important subject. Nuisance calls are an irritant to those of us who thought that we were on the Telephone Preference Service, but still get calls that we are told are for research or some other spurious reason, or calls where only one in 20 people who have been rung is spoken to when they answer.
That is an irritant for those of us who cope with that sort of thing very or reasonably well, but it can be worse than an irritant for others. My father, who is now in his 90s, has got to the stage where he hardly ever answers the phone, which is not particularly practical. He certainly will not answer the phone if it is an unknown number. As Members will know, if somebody phones from an institution, such as this place, it comes up as an unknown number. He is not only exasperated by such phone calls, but anxious about answering the phone. It is highly harmful that nuisance calls are being made and it is important that we legislate to deal with them.
Chris Kelly
Has the hon. Lady found, as I have, that this matter is of particular concern to our older constituents because they tend to rely more on landlines than any other age group? Many young people do not have a landline or have one only for broadband services and use their mobile phone for incoming calls. They are therefore not affected in the same way as many older people.
Sheila Gilmore
That is correct. I suspect that that may be a reason why older people get so many nuisance calls.
A related concern, particularly for less well-off consumers, is the phone numbers that are used. When I tried to pay my electricity bill by calling from my mobile phone, because that was the most convenient way for me to call, there was a message to say that I would be charged if I called that kind of number. I put the phone down and made a mental note to call from a landline. That probably led to a delay in the bill being paid. However, some people would find it very difficult to call from a landline and so would be charged a premium.
Government Departments are not immune from the problem of premium rate numbers. It is a major issue for many people that the Department for Work and Pensions still uses numbers that cost them a lot of money when they phone in for information, to report changes in circumstances or to change an appointment because they cannot attend. We need to look at that problem. People should not be charged—sometimes they do not even realise that they are being charged—to engage with a private firm that is selling them goods or services, or with a public agency.
I hope that the Bill has room to cover the problem that less well-off consumers and older consumers often pay more for their utilities than the rest of us, which the hon. Member for Harlow (Robert Halfon) and I have raised. I think that he was planning to seek a debate on that issue at the Backbench Business Committee this afternoon, because he has approached various Members for support. It is one thing for companies to say that direct debits are so much more convenient and cheaper to process than other forms of payment that they will give direct debit consumers a discount and everybody else will pay a standard charge, but companies have gone beyond that and are making other customers pay an additional charge. Not only energy companies but organisations such as BT are charging people a £6 fee to pay via PayPoint.
The constituent who brought that issue to my attention did so on behalf of her elderly uncle, who was insistent that he wanted to pay in that way. He had always managed his finances in cash and was going to go on doing so. He could no longer use certain methods that he had used before and the only way in which he could pay by cash was to use PayPoint. It is not only people on low incomes who are affected, but such people are more likely to use the cash economy and can be wary of banks.
I was talking recently to one of the housing associations that took part in the pilots set up by the Department for Work and Pensions for the direct payment of housing benefit. The DWP would like people to get bank accounts and pay by direct debit, and that would certainly help housing associations as well, because it would help people to be responsible for their own payments. The problem that the housing association found was that a lot of its tenants were not comfortable with doing that, either because they had had bad experiences of being charged because their direct debit went out at the wrong time of the month or because they knew people who had. They preferred to pay when they wanted to pay, preferably in cash or through some other payment mechanism. They were not keen on banks and direct debits, even if they could get a bank account, which still not everybody can. We must think about the aspects of the system that harm the least well-off consumers as well as competent and able consumers. It would be helpful if room could be found in the Bill for some of those issues.
Mr David Hamilton
More and more people are coming to my surgeries and indicating that, because of the type of contract they have—zero-hours contracts, for example—they cannot use direct debits. They pay when they can pay. That is a major issue that is beginning to develop in my area.
Sheila Gilmore
I thank my hon. Friend for that intervention. We must examine that issue more carefully, because there is an assumption that people will have bank accounts. The Government have stated that they want to make that assumption in relation to universal credit payments, for example. People who are working will be affected as well as those who are not. People are naturally wary of that, because they do not want to be caught up in the payment of high charges. There has been talk of trying to find some form of bank account that would avoid that happening, which would be all the better. I am sure that Members of all parties have had cases come up, whether localised or not, that have made them realise the need for legislative change to protect people. The Bill provides us with an opportunity to make that change. I do not want to rewrite “War and Peace” or create a huge doorstop of a Bill, but we could take this opportunity, perhaps in Committee, to improve the Bill and improve the lives of many of our constituents.
Chris Kelly (Dudley South) (Con)
I support the Bill, because it must be right to simplify a complex area of law by reducing eight pieces of legislation to one consumer Bill that is easy to understand. I wish to concentrate particularly on two matters: the help that the Bill contains for digital consumers, who are a fast-growing part of the economy, and the reforms to trading standards, which will support small businesses as they seek to compete with bigger rivals and bring vital competition on price and usually also on service.
The hon. Member for Edinburgh East (Sheila Gilmore) stated that customer service is sometimes better in larger organisations, because they have departments purely to deal with customer complaints and customer service issues. In my experience, many nimble small and medium-sized enterprises in my constituency offer excellent customer service and are doing a great job of taking on their larger rivals.
At the core of the Bill is the principle that people have a right to get what they pay for. In 2012, UK consumers spent more than £1 billion on downloaded films, music and games. I confess that, as you would expect, Mr Deputy Speaker, I was one of those consumers. Until now, the law has lagged behind in protecting consumers who do not get what they pay for or who receive poor-quality content. Apple’s iTunes service is dominant, and I am sure that its customers nearly always get what they have paid for to the correct standard. However, there are new entrants to the market all the time, seeking to take some of Apple’s market share, that may not provide a proper service or genuine content. Consumers in my constituency deserve protection from shoddy or spurious content providers, and the Bill certainly goes a long way towards protecting their hard-earned money when they make online purchases.
In 2011, a staggering 16 million people experienced at least one problem with their digital content, as my hon. Friend the Member for Stockton South (James Wharton) mentioned. I imagine that many Members consider themselves digitally savvy, but it is easy to get caught out by an attractive price proposition online. I believe that my constituents deserve protection from rogue businesses supplying poor-quality, corrupted or inferior downloads. More and more people will download content on mobile and smartphone devices, where sometimes the telltale signs of a rogue or spurious site are much harder to spot.
As more “silver surfers” go online, perhaps without the experience of having operated online for some time already, they may be unsure of the difference between http and https, for example, or less able to spot a problem site or the telltale signs of a spurious site, before using it and entering their card details. I believe that the Bill is welcome in helping to correct such problems, and it is a correct use of the House’s time today.
I know my hon. Friends on the Treasury Bench are determined to help small and medium-sized businesses by reducing unnecessary red tape and regulation, and the Bill helps to deliver that aim. Enforcers such as trading standards officers will be required to give 48 hours’ notice to businesses when carrying out routine inspections, saving businesses an estimated £4.1 million per year—a welcome saving. Trading standards officers will still be able to carry out unannounced inspections where illegal activity is suspected. Therefore, the new start-up businesses in my constituency, and all the growing SMEs in the black country, can go about serving their customers to the best of their ability and introducing innovative new products and services, without the worry of unexpected, unannounced and unnecessary inspections by trading standards. There is something to fear only when there is something to hide. We need trading standards to work closely and fruitfully with our small businesses, and the proposals in the Bill will help businesses on the smaller end of the scale to get on with serving and innovating.
I welcome the Bill’s Second Reading and the prospect of my constituents having their key consumer rights for goods, services and—for the first time—digital content set out in one place. As my hon. Friend the Member for Mid Norfolk (George Freeman) said, there is a 59 million man-hour saving to be addressed, as that is the amount of time consumers spend dealing with goods and services problems, at an estimated cost of £3 billion a year. The Bill will go some considerable way to saving many millions of those hours and many hundreds of millions of those hard-earned pounds.
Mark Durkan (Foyle) (SDLP)
Like the hon. Member for Dudley South (Chris Kelly), and others, I have no problem in welcoming any Bill that successfully consolidates quite a number of existing pieces of legislation, and helps to clarify practice as well as better codify the legal basis. However, it is a long way to jump from that consolidation to implying that the Bill will deal with all the consumer issues that we know exist, and the active and pressing matters that hon. Members from across the House regularly express, not only in debates such as this but through other means such as early-day motions.
A number of hon. Members mentioned areas where the Bill could be improved or go further, and indicated that they hope that that will happen in Committee. One point that has been mentioned is the issue highlighted by Citizens Advice in its submission about better information at point of sale. I fully support that, including the points raised by the hon. Member for Edinburgh East (Sheila Gilmore). However, in any future improvement of the standards and requirements for point-of-sale information, the fact and quality of that information should not of itself become a new marketing lure, where businesses imply to customers that they are doing everything in their interests as consumers. Many hon. Members have complained about claims management companies. Claims management companies ring people and tell them they are ringing on behalf of, for example, the Department of Justice. They imply that they have been appointed by the Department to tell people they have a claim simply because they have been licensed as claims management companies. We do not want to assist any firm or supplier, whether online or in-store, in any other mis-selling, but they might use the fact that they are giving point-of-sale information to new consumer legislation standards to do so.
Many hon. Members have heard complaints from their constituents about extended warranties. They have become something of a racket. People find it very hard to buy goods without being spooked into buying extended warranties. The small print that attaches to extended warranties is not matched by small prices. People often find that they have cancelled out any headline discount by buying an extended warranty, but also that, if they need to use it, it does not do the job for them. Many people mistake an extended warranty for an extended guarantee—they believe that it absolutely guarantees against any problem, but do not realise that they are buying a fairly narrow form of insurance, which will be fought and resisted using all means in the small print.
I fully endorse the point made on point-of-sale information, but we need to recognise that point-of-sale abuses take place. The Bill does not give us very much to deal with those problems and does not tell us where consumers stand. We must test the Bill not only on how far it consolidates existing law, but on how far it mitigates the problems consumers encounter.
More needs to happen on a time limit on repairs and refunds. I fully endorse everything other hon. Members have said on that.
On part 3, a point was made on the idea of collective redress. I welcome the important concept in the Bill which suggests that, if action is taken by consumers in relation to a product or service, the eligibility to benefit from it should apply to other consumers—people need not be party to the action to benefit. Of course, it would not apply to anybody who had specifically opted out. That raises an interesting question, which goes back to my intervention on the Secretary of State.
On time limits on repairs and refunds, and on collective redress in respect of known faults that are identified and pursued, there is a glaring omission in the Bill on product recall. Even if faults become known to the product manufacturer and the supplier, they might remain unknown to the consumer. There are problems with product recall, particularly in relation to electrical goods. The Electrical Safety Council runs a recall check and says that only 10% to 20% of the products it tracks are subject to successful recall. We should remember that those products are recalled because of a risk to people and property. Hon. Members have argued about what the Opposition want and what the Government want, but we should remember that we are talking about products that go inside consumers’ houses and represent a real risk. There is something of a dereliction in the law in terms of what is expected or required in product recall. Under existing legislation and under the Bill, consumers will have their rights asserted and addressed only in respect of faults that they know and identify, not in respect of serious and risky faults that are known to others.
The Electrical Safety Council also says that for many of the products on which it is running a recall check there is no traceable manufacturer. Many products are supplied under the names of other brands, so the actual manufacturer is unknown. Recalls are made according to codenames, so even if people have accessed any of that information they will still not be sure whether they have the product. There is such diversity in sales and distribution chains—hon. Members have made significant points about supply chains—that the issue arises of whether the standards we set on product recalls are tight enough. Only this month an article in The Guardian highlighted the risks and dangers of unsafe products and the incidences of fires in homes. We should heed those warnings and listen to bodies such as the Electrical Safety Council, and consider whether there is more we can do in the proposed legislation to address that significant gap.
I raised the effectiveness of electrical product recalls in a written question to the Minister. She replied:
“Liability and responsibility for unsafe products lie with the manufacturer or the importer placing them on the European market. Local authority Trading Standards services in Great Britain and district councils in Northern Ireland are responsible for enforcement. They have powers to order a recall, but rarely use them. The majority of recalls are undertaken by industry on a voluntary basis to address their obligations. Recall actions are expensive and often complex; manufacturers work with the enforcement authority to tailor the action to the product and the specific circumstances.
The electrical products industry monitors the impact of these actions to continually improve their effectiveness. I fully support their efforts and consequently have not undertaken my own assessment of the effectiveness of electrical product recalls. However, my officials are keeping this under review.”—[Official Report, 7 January 2014; Vol. 573, c. 190-1W.]
I ask the Minister to listen to what the Electrical Safety Council is telling us. Legislators, Ministers and the Department need to pay attention to this issue and I hope that the Bill will be amended to make good the gap. It seems strange that we are talking about time limits on repairs and refunds when people identify a fault and that we are talking about people being identified and being eligible for rights as a result of a collective action that they may not have been party to themselves. That is right and good, but it is odd that we are not showing care—as consumers and as people who should expect health and safety standards from products that we have brought into our own homes—in relation to product recalls, especially those that have taken place on the basis of an identified danger or risk.
I join many hon. Members who are currently signing early-day motions and doing other things to highlight the injustice of differential charges for paying by direct debit or by other means, and the penalties that appear to be imposed. It is one thing for people to understand that discounts are made available to those opting out of receiving bills by post or by any method that has overheads, but many people believe that many utilities are now charging a standard rate for those on direct debit and a penalty rate for those who pay by other means. This is a concern to all hon. Members, including many who welcome the Bill, but it will not be mitigated by it. I hope that that gap will be taken care of in Committee.
Jim Shannon (Strangford) (DUP)
I congratulate the shadow Minister on the points she made, which we fully endorse, underlining the need for tighter consumer protection. This subject involves myriad issues often arising out of constituency concerns.
I am pleased that the Bill is before the House. Like everyone in the Chamber, I am often contacted on the need for tighter legislation and greater rights for consumers and others. Staff in my advice centre regularly refer cases to the Consumer Council, and sometimes they have to contact the council themselves to ensure that it pushes a matter strongly. It does not always do that, so we have to underline what we are asking it to do. Sometimes it tells us that the legislation is not strong enough and it is important to address that.
David Simpson (Upper Bann) (DUP)
My hon. Friend mentions constituents and the Consumer Council. Like other hon. Members, I am sure, I often receive complaints about the process and bureaucracy of exchanging goods. I think, in particular, about older folk, who have a paper trail to keep, and who sometimes are not good at it. It would be good if that could be addressed.
Jim Shannon
I thank my hon. Friend for bringing that matter to the House’s attention. I think that every speaker has underlined that issue, and many have spoken on behalf of elderly constituents who find it difficult to return goods. I have had people in my office complaining about particular retailers, but in true British form, rather than complaining, they say, unlike Arnold Schwarzenegger, “I’ll not be back” to make a complaint. Someone might have lost £100 on a pair of shoes because the heel is too wobbly to walk on, but feel that there is no point in complaining. That underlines the crucial issue that my hon. Friend the Member for Upper Bann (David Simpson) mentioned.
I regularly hear complaints in my office about flights that have been cancelled, about the service and about the fact that prices quoted are often different from the actual prices. These are issues that regularly come to my attention. Many retailers get away with selling substandard merchandise. When somebody brings something back, they simply point to the sign that says, “No sale return”. That is not correct. It does not affect a consumer’s statutory rights. Why does the consumer sometimes have to push so hard to get their rights? Many people are not aware of their rights, and it is my hope that the Bill will clarify consumer rights and make them a little easier to understand and regulate.
Hon. Members have referred to energy suppliers. We have a regulator that controls—or tries to control—prices, but more often than not prices rise faster than inflation. We feel that the regulator should have more power, so I hope the Bill will give us a regulator that can enforce the issue on energy prices. Every one of us, as elected representatives, will be aware how energy prices affect the households we represent.
I am also concerned about insurance premiums. The hon. Member for South Down (Ms Ritchie), who is not here, brought this issue to the Chamber a short time ago. I think every Member from Northern Ireland contributed to that debate. It frustrates and angers me, and it certainly angers my constituents, that people advertise insurance premiums on the television that are available anywhere in the UK—Scotland, Wales and England—except, according to the small print, Northern Ireland. I am as British as anyone in Edinburgh, Cardiff or London and I expect to be treated the same, as do my constituents.
The regulatory measure will reduce the effort both consumers and businesses have to make to resolve problems. Consumers will now have the right to get some money back after one failed repair of faulty goods or one faulty replacement, to demand that substandard services are redone or, failing that, to get a price reduction and a repair or replacement of a piece of faulty digital content such as a film or music download, online game or e-book. It is clear that the more we shop online, the more regulation there needs to be in place. After Christmas, the newspapers indicated that there were greater sales online than there have ever been in the past. In my constituency that is an issue as well; the trend is for online shopping.
In my constituency, there is a business called Excel which, to use its own word, is excelling in online sales. It is a prestigious clothes shop in Newtownards that moved into online sales a few years ago. That business has grown and it gives consumer protection. When it sells goods, it has a sale or return policy. That gives the consumer the opportunity to buy a good, which they are doing in increasing numbers. That business has grown greatly. It is now hoping to sell to the Republic of Ireland, another stage of that growing business in my constituency.
There are many sites online that help someone to stand up for their rights but the ordinary person would never think to look those up and would also not think that they were capable of fighting their corner. Many times people do not want to be involved in controversies or to have to complain. The Bill must be easily readable and understandable and I urge the Minister to ensure that anyone of any educational background is able to apply it to their own situation.
Some hon. Members today have spoken about the issue of those who use Google to get an idea of their rights but are then drawn down a road that takes them away from their real consumer rights. That is an issue about which we need to be concerned. We need to stop the exploitation of the vulnerable because most of the people who come to me are vulnerable people who have no knowledge of all the issues involved. I am concerned that those people are sucked into a process that they find difficult to get out of.
Hon. Members have mentioned credit card companies, banks and payday loans, where consumer protection is needed. Many companies now advertise a method to reclaim or redeem unfair charges. That also needs to be monitored because sometimes we wonder what it all means. If someone is phoned and told that they have a chance to claim back money, a financially vulnerable person might respond and disclose details that they should not disclose. We need a consumer rights Bill that protects people from those things.
The Bill proposes a set 30-day time period during which consumers can return faulty goods and get a full refund. At present, consumers can reject goods as faulty within a reasonable period; interpreted by some retailers as 14 days and by others as up to two months. There is diversity among retailers; let us get it correct for everyone so that everyone knows their rights.
In my constituency, a lady left her shoes to be re-heeled. When she came back to the same place to collect them a few days later, as she was told to do, the shoeman had disappeared and the shop was closed for two months. In such cases there should be a method by which the police or local authority has the right to be involved and to enter the shop; it is about consumer protection and consumer rights.
I hope that the Minister will tell us what attention she will pay to all of the issues raised today about the Bill and protecting consumers. All in all, I believe that the Bill seeks to enhance consumer rights. I support it in principle and look forward to the Minister’s response.
Ian Murray (Edinburgh South) (Lab)
I am slightly disappointed that my hon. Friend the Member for Barrow and Furness (John Woodcock) is not still in the Chamber. He said that the debate would be dull, but it has been far from dull. We have heard about the Foreign Secretary’s gym membership habits, about Obi-Wan Kenobi, about the Sith, and about the gestation period for elephants. One Member mentioned Alderaan. We have heard about Monty Python, the Arctic Monkeys, and, at the tail end of the debate, about Arnold Schwarzenegger. It has indeed been an exciting debate.
The experience of consumers is a litmus test for future economic success. When consumers are confident, they can reward good business practice and respond to innovation. When their treatment is shoddy—as it was in recent notable cases such as those involving unsafe breast implants and payment system failures in the long-drawn-out saga of payment protection insurance—goods and services can become stuck in a cycle of weak demand and low trust. The essential element of a successful economy is the ability to ensure that consumers have that confidence, and to support their role as a primary driver in making markets work effectively—as we heard from the hon. Member for Dudley South (Chris Kelly)—not just for consumers, but for producers. That in turn helps to lay the foundations for UK businesses to succeed in other markets, throughout the European Union and, indeed, throughout the world.
As a number of Members have observed, the Bill represents a welcome step towards the simplification of a complicated matrix of consumer law and the adoption of an up-to-date approach to the changing world of the consumer in these digital times. It is not difficult to demonstrate the ways in which consumers can suffer detriment. For instance, how would the Minister feel if she went into a hardware store to buy a number of handles for her garden forks and left with four candles? Such incidents should be resolved quickly and efficiently for the benefit of the consumer. [Laughter.] I thank my hon. Friends for their laughter. I cued them up for it earlier.
There must be a number of building blocks for effective consumer confidence. First, there must be a fair framework: a framework of behaviour, expectations and rules that seem to work fairly for both consumers and producers, and which encourage innovation. Secondly, there must be effective enforcement. The rules governing any exchange between consumer and producer must be enforced so that persistent malpractice does not take place in the industry or any sectors of it. Thirdly, there must be trusted advice. When people want advice or support that they can trust, it must be easy for them to find it. Fourthly, there must be simple means of redress: when things go wrong, they must be put right without difficulty.
The United Kingdom has a record of good practice in all those respects, and the Bill will improve the position further. However, although it does a good job in relation to, for example, the fair framework, Ministers appear to be ignoring other critical pieces of the jigsaw such as enforcement, advice and funding. Let me give two examples relating to enforcement. First, the changes in consumer protection provision that the Government have introduced since 2010 have been muddled, and have created uncertainty and confusion on the consumer landscape. They abolished Consumer Focus and transferred some of its resources and responsibilities to Citizens Advice, but then they did not really know what to do with Consumer Focus, so they came up with the wonderful idea of rebranding it as Consumer Futures, so that it could do pretty much the same job as it had been doing before.
Secondly—this was mentioned by my hon. Friend the Member for Blackpool South (Mr Marsden)—the Government slashed local authority funds. That has had a significant impact on trading standards, making it harder for consumers to uphold their rights and seek redress. Aggregate trading standards funding has dropped from £245 million to approximately £142 million since 2010. Hundreds of jobs have been lost in a brain drain that is estimated to amount to 15% of the total work force.
Trading standards are at the forefront of the upholding and enforcement of consumer rights, but, as the Public Accounts Committee commented last year,
“there is a creation of trading standards deserts”
owing to funding gaps. The Government now want to remove the ability of trading standards officers to make unannounced inspections. In response to that part of the Bill, the Trading Standards Institute, which has done so much wonderful work in this area, said that it
“would urge the Government to refrain from removing the power of trading standards officers to enter premises unannounced. It is an essential tool for them to use and it is vital that when complaints are made, councils can investigate and tackle the problem immediately.”
Those are just two examples of areas in which the Bill is deficient in relation to the four pillars by which we will measure its effectiveness.
I should like to comment on some of the contributions that have been made to the debate this afternoon, starting with that of the Secretary of State for Business, Innovation and Skills. We all read his comments last night about the wrong type of growth; today, he was slightly more contrite and demonstrated a more positive attitude towards the Bill. He mentioned the importance of the European Union in relation to competition policy, and talked about the clauses in the Bill that would allow collective actions on competition issues. It would be good, however, if the Government could examine an extension to the policy on collective redress. May I point the Secretary of State to the consumer investigation that the shadow Business team completed last year, which has been published on the team’s website? That could give him some ideas on the kind of collective redress arrangements that we would all like to see, and that many Members have mentioned today.
The Secretary of State was absolutely right to pay tribute to the work of the Business, Innovation and Skills Select Committee, which has strengthened the Bill and will continue to do so. The contribution from my hon. Friend the Member for West Bromwich West (Mr Bailey) highlighted some of the issues that the Government should be looking at, and I also pay tribute to the other members of the Committee for the work that they have done so far to make the Bill better.
The Secretary of State said that the digital landscape was hugely complicated; that is certainly an area of the Bill that needs clarity. Concern has been expressed that it is not flexible enough to deal with much of today’s modern technology. He also talked about measures on cross-border enforcement, which we all welcome. When local authorities take the lead on trading standards, there often seems to be a David and Goliath relationship between them and the big corporations that they have to take on. I said earlier that trading standards enforcement across the country has been decimated; we need to do something to replenish those resources.
The hon. Member for Mid Norfolk (George Freeman) rightly pointed out that this was a consolidation Bill, but it is none the less the responsibility of the House to make it as good as it can possibly be. The Bill Committee will have a huge responsibility in that regard. The hon. Gentleman mentioned some of the areas of concern, including banking, utilities and the public sector.
My hon. Friend the Member for West Bromwich West, the Chair of the powerful and effective Select Committee, highlighted the significant range of issues in the Bill, and the need to respond to changing markets. He mentioned three essential elements—clarity of pricing, clarity of contracts and clarity of redress mechanisms—and said that the Bill needs to be improved in those areas if it is to be the best that we can make it.
I agree with my hon. Friend that further debate is required on the sale of goods provisions, on the right to reject the refund tapering that can apply depending on how long someone has had a product for. I hope that the Bill Committee will examine those issues. My hon. Friend also said that he was looking forward to the debate in Committee on the digital provisions, to ascertain whether the Government had got them right and whether they were flexible enough for our modern economy. He also gave good examples of how complicated the service provision in the Bill would be. I am sure that the Committee will look closely at that.
The hon. Member for Windsor (Adam Afriyie), who is no longer in his place, was right to say that highly competitive markets were good for the economy. He also mentioned small businesses, yet they are not included in the Bill as consumers. The Federation of Small Businesses has asked for that to be remedied, and I hope that that point will be looked at in Committee. Perhaps the Minister can tell us today whether small businesses will be seen as consumers for the purposes of the Bill.
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) is a passionate advocate of tackling the abuses in the secondary ticketing market. She mentioned the Monty Python reunion show in her speech. My father-in-law is a massive Monty Python fan, and I decided to try to get some cheap seats for him for Christmas. The tickets went on sale at 9 o’clock on the Monday morning, yet I was able to purchase them on a secondary ticket site before the official site had opened. That shows that there must be something wrong. Those were not really secondary ticket sales, but there must have been some kind of collusion between the promoter of the event and the secondary ticket market. The Bill could be an opportunity to look at some of those things. Although that is a specific issue around secondary ticketing, the overall concept of consumer detriment from secondary sales is something that we should be looking at quite closely.
The hon. Member for South Thanet (Laura Sandys), who is sitting in a slightly different place, wants to broaden the debate, and I welcome that. Indeed, that is what my hon. Friend the Member for Walthamstow (Stella Creasy) tried to do. Although this Bill is, as my hon. Friend the Member for Barrow and Furness said, quite dry, technical and difficult in terms of the consumer landscape, it does have to be broadened out. Given that this is an opportunity to look at consumer law and the consumer landscape, it is important that we get it right. If the debate can be broadened out to some of those other markets, that is what we should be doing. I was also struck by the idea of a consumer champion to be put in across Departments in Government to ensure that consumers are at the heart of everything that is being done.
My hon. Friend the Member for Inverclyde (Mr McKenzie) was right to concentrate on the sales mechanisms of some industries and companies and on how the Bill should be used to assist consumers, particularly vulnerable ones. We are finding that constituents are increasingly coming to us with problems of nuisance calls and door-to-door selling, especially as they impact on vulnerable consumers and customers.
I was interested in the short contribution by the hon. Member for Stockton South (James Wharton). I agree that the law up to now has been deficient in terms of the digital landscape, and I hope that the Bill will be able to do something about that. Perhaps it is late in coming, but we do, none the less, welcome it. I am also pleased that he managed to speak for six minutes without banging on about Europe, which was fantastic.
The hon. Member for Dudley South talked about the importance of getting the Bill right in the digital sphere, but we have spoken about that already. The hon. Member for Foyle (Mark Durkan) endorsed the Citizens Advice briefing note—I think we all do—especially with regard to some of the simple steps that it suggests we put in the Bill to make things just that little bit easier.
Finally, the hon. Member for Strangford (Jim Shannon) raised a number of issues, particularly around the insurance industry. He mentioned the fact that some insurance premiums are not available in Northern Ireland in the way that they are across the rest of the mainland UK. It is worth emphasising something that he said at the end of his contribution, which is that we need to prevent the exploitation of the vulnerable. That should be the cornerstone of this Bill, and I do not think that anybody in the House would disagree with that.
It is also important to look at the competition in markets to give consumers confidence. Last year, Teresa Perchard from Citizens Advice said:
“Consumers have a long memory. When energy companies say ‘trust me’, to consumers, their experience says that they should expect the opposite. Consumers do not feel powerful in many markets.”
My hon. Friend the Member for Walthamstow looked at some of those markets that the Government must deal with if they do not want the Consumer Rights Bill to be irrelevant. She mentioned energy, pensions, payday loans and banking. Those are just a few of the industries that may be affected by the Bill.
Finally, let me turn to my hon. Friend the Member for Edinburgh East (Sheila Gilmore) who brings experience to this debate through the Scottish Consumer Council. She highlighted the sensible approaches in the Citizens Advice briefing, one of which must be about giving information to consumers when they are purchasing goods through stores or online. I have often been met, when reaching the till in a store, with a nice sign that says that my statutory rights are not affected. I know that that is a statutory requirement, but it is completely beyond me what it means. If we turn over till receipts from many organisations, we would find a whole plethora of legislation that a Philadelphia lawyer would find difficult to pick through never mind someone who just wants to return a pair of shoes that are either too large, too small or not to their liking. There is something in that Citizens Advice briefing that I hope the Committee will look at when it takes through this Bill. For example, there might be some simple proposals to ensure that information for consumers is clear.
There is also a substantial body of evidence that shows that businesses are not aware of the rules. Will the Minister address that in her response? What will the Government do to ensure that there is a wide understanding of the new rules among businesses as well as consumers? Yet again, the Business Innovation and Skills Committee deserves a considerable amount of credit for its detailed analysis in that particular area.
Finally, will the Minister seriously consider the research that has been mentioned, commissioned by the Federation of Small Businesses, on treating small businesses as consumers? I know that that is incredibly difficult and complex, but they are a huge pillar of the economy and much of the detriment goes not only from businesses to consumers but from businesses to businesses—indeed, the detriment tends to go from large businesses and Government Departments to small businesses. We should consider that in Committee.
Healthy, fair and competitive markets and effective methods for information sharing across providers are vital to building an economy that works for both consumers and businesses. Well-informed consumers make better customers for businesses, improved markets make better businesses for customers, and better informed citizens get better outcomes when redress is required. We will support the Bill on Second Reading but encourage the Government to improve it in Committee to ensure that the opportunity is not lost truly to make a step change in consumer rights in this country.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
This has been a wide-ranging debate with many useful and, on occasion, entertaining contributions from Members of all parties. I thank Members for their considered views.
I agree with the hon. Member for West Bromwich West (Mr Bailey) that this is an important area of work. When something goes wrong for a consumer, it can be devastating, as he said. The Bill will provide remedies for consumers with a wide range of problems, from a broken toaster to a dodgy kitchen installation and for things worth from a few quid to thousands of pounds. The wide range of matters encompassed by the Bill shows how complex an area this is.
I shall try to address as many of the points that have been raised as I can, but as a number of Members have said, we will have further opportunities to discuss the detail in Committee. Contrary to what the Opposition have argued, the Bill will provide a substantial improvement to consumers’ rights, remedies and protections. It is true that it consolidates the current law, which, as a number of Members have said, is spread across eight pieces of legislation and more than 60 sets of regulations. It also brings in major new rights for consumers, however, particularly in digital goods and services, although they have been completely overlooked by some Opposition Members.
It is important to note that the Bill has widespread support among consumer and business groups. The economic benefit is estimated to be more than £4 billion over 10 years. It is more than just minor tinkering, as some Members have suggested; it is an important piece of legislation.
I found the speech made by the hon. Member for Walthamstow (Stella Creasy) rather disappointing. She seems not to have read the Bill in detail as she seems to have rather a poor grasp of what it does and does not do. She barely mentioned much of what is in the Bill and I hope that she has a chance to read it in detail before Committee.
I am proud that the Government are taking such important action to improve the rights of consumers, when the previous Labour Government did very little over 13 years. For example, as a number of Members mentioned today, the issue of cowboy builders was raised repeatedly during the previous Parliament but no action was taken. The coalition Government are doing something for consumers rather than just carping from the sidelines.
As I said, the hon. Member for Walthamstow did not talk about a lot of the issues in the Bill. She laid out an extremely long wish list of things that she wanted to add to the Bill rather than engaging with what was already there. I appreciate that this is the sort of Bill that many people spot gaps in and want to add to, but there is more to it than that.
Hon. Members raised a number of issues that they want included in the Bill, including banking, utilities, telecoms and ticket touting. At the risk of disappointing them, I do not propose to go into much detail on those issues as they do not fall within the remit of the Bill. Although I have sympathy for many of today’s speakers and with a lot of the issues, many are issues for other Ministers and Departments to tackle.
The hon. Member for Walthamstow and a number of others mentioned concerns about consumers having access to their own data. We agreed that that information can be key to empowering consumers to take well-informed action. The hon. Lady mentioned midata and the voluntary approach the Government have taken to it has already had success, with all the major energy companies now providing midata downloads so that their customers can access their data in a consistent and machine readable format. My Department is reviewing progress on the voluntary programme and we wrote to chief executives of companies about that in November. The review, which will be completed in March, will help us to decide whether to use the power in the Enterprise and Regulatory Reform Act 2013 to require companies to release the data they hold on consumers, but we hope that the voluntary approach will make progress. There is progress and I hope that the hon. Lady welcomes that.
Members on both sides of the House expressed concern about lookalike websites. As they will know, misleading information and advertising has long been the subject of consumer protection legislation, which was substantially updated and extended in 2008. Under the Consumer Protection from Unfair Trading Regulations 2008, it is illegal for a trader to mislead consumers to the extent that the average consumer is likely to make a decision that they would not otherwise make. That is slightly wordy, but it includes giving a false impression of cost, such as charging for something that would otherwise be free. That encompasses the example given by the hon. Member for Walthamstow of fake HMRC websites. We accept that there is a problem, but further legislation is not required. The Department for Business, Innovation and Skills has written to public enforcers to draw the issue of copycat websites to their attention and to ensure that the law is enforced appropriately.
Sheila Gilmore
If the law is there to deal with this problem, why is it still happening? A constituent contacted me about this only the other day. He was not uneducated or stupid in any way, but he was taken in by one of these websites. What should he do?
Jenny Willott
If the hon. Lady would listen, I just said that the Department has written to public enforcers to ask them to enforce the law properly. The problem is clearly still happening, and we are all aware of instances of it. Recently, there were reports about the issue on the radio, particularly about the fake HMRC websites. There are lots of things that are illegal that still go on until there is a crackdown. This is one such thing, and we are doing what we can to encourage public enforcers to take action to close down websites that are clearly in breach of the law.
On a technical point, the issue of devolution was raised by a number of Members from Northern Ireland, and I should like to clarify the situation. The issues covered in the Bill are reserved to Westminster with regard to Scotland and Wales, but they are devolved to the Northern Ireland Assembly. The devolved Administrations in all three nations were consulted throughout the drafting process, and both Cardiff and Edinburgh are perfectly satisfied with the measures and are happy for them to be implemented across England, Wales and Scotland. I completely agree with the hon. Member for Strangford (Jim Shannon) that we are all part of one country and that it is important to be consistent across it. I am glad to be able to tell him that the Northern Ireland Assembly has agreed to a legislative competence order so that the Bill will apply across the board to the whole of England, Scotland, Wales and Northern Ireland. There will be consistency in the application of all the measures to the whole of the UK.
Mrs Hodgson
Will the hon. Lady clarify something? I think I heard her say that some of the issues raised by hon. Members did not fall within the remit of the Bill, including the point that I made about the secondary market in controlling ticket touts. Am I correct in thinking that she is not going to respond to any of my points?
Jenny Willott
Some of the issues that the hon. Lady raised related to unfair contract terms, which I shall come on to in a minute. Many other issues relating to banking legislation and the regulation of energy markets do not fall within the remit of the Bill, and they are the responsibility of other Departments. However, I shall come on to the points that she made about ticket touting.
As the hon. Member for Mid Norfolk (George Freeman) said, many good businesses already offer enhanced rights to their customers. The Bill will help them, because it will create a level playing field, and it will help us to have fair competition. The hon. Member for Windsor (Adam Afriyie) made it clear that the Bill will bring significant benefits to businesses, saving them time and money, and helping them to provide a better service to customers. It will also make the market more competitive, which helps everyone.
On the specific matters raised, the hon. Member for West Bromwich West mentioned the issue of deductions for use when a product is returned to the trader. As he said, we accepted some of his Committee’s recommendations, and it is vital that we begin the debate by recognising the fact that current legislation allows for a deduction for use whenever the customer exercises their second-tier right to reject. The Bill strengthens that by saying that a deduction for use cannot be made until after the first six months from purchase with a limited exception. As a result of the pre-legislative scrutiny, ably led by the hon. Gentleman, we decided to tighten and limit that exception even further. It is important to maintain the ability to deduct for use, but to ensure that there is a fair balance between the rights of consumers and the pressures on business.
The hon. Member for East Antrim (Sammy Wilson) raised the issue of time- limiting the period available for repairing products, as did another hon. Member. A number of factors will be beyond the control of the trader and a fixed time limit may impose a significant burden on them. When providing a repair the trader must carry out a number of actions, including taking delivery of the goods, diagnosing the faults, and perhaps sending the goods away for repair or ordering in parts. Similarly, the trader may have to order in a replacement. We are concerned that imposing a time limit may lead to a reduction in the quality of the repairs, which may in turn lead to a loss of faith in the repairs, and ultimately to an increase in the number of goods being rejected. We do not want to see that, so we do not propose to lay down a specific time limit in legislation because it could be counter-productive to the interests of consumers.
A number of hon. Members raised the issue of digital content. For the first time, the Bill introduces consumer rights for digital content. We are one of the first countries in the world to legislate in this area. I hope that as well as benefiting consumers, this will help to give this sector of the economy a competitive edge in the future. Such an important and rapidly growing industry needs to be governed by a clear and effective consumer framework. Many consumers assume that they have rights at the moment and are confused and concerned when they find out that they do not. We heard from a number of Members about the scale of this. During the last year, 16 million consumers have had a problem with downloaded material. I accept that, where possible, we should align the digital regime with goods and services to make it as clear and simple as possible for consumers, but we should do that only where it makes sense, and we need to ensure that we neither over nor under-regulate this important sector to ensure that it can grow.
Another issue that was raised by the hon. Member for West Bromwich West concerned the outcome-based quality standard for services. The Bill reflects the current position, which, as he knows, requires services to be undertaken with reasonable care and skill. As part of the consultation ahead of the Bill, the Government asked for comments on additional proposals to move the services regime closer to the regime for goods by introducing an outcome-based quality standard for certain services, but the responses that we received gave a wide range of views, including contradictory views on whether an outcome-based standard would be easier to understand. While in some cases, such as repair or certain installation services, it may be quite simple, in other cases a view on the quality of a service is subjective, and therefore much harder to determine.
As the hon. Gentleman said, the issue is complicated and difficult. I completely understand where he and his Committee are coming from, but the Government feel that the evidence does not fully support the conclusion that they came to and we have decided to stick with the current legal position requiring reasonable care and skill rather than introducing an outcomes-based quality standard. The current system is understood and it seems easier to apply, rather than introducing a new system that could be complicated and subjective, particularly as there are strong views on either side.
Mr Bailey
I hesitate to have a mini-debate, but the difficulty is that under the reasonable care and skill provision, anybody who felt that they had a case to bring against a service provider would have no other course of action but a recourse to law. It is extremely difficult for them to prove that if they are not professionally qualified in the service that has been provided for them. An outcomes-based approach would at least give clarity and strengthen consumer rights because they would know that if they took action they had a much better chance of winning.
Jenny Willott
Because the services sector is so incredibly broad and varied, what is the case in one area would not necessarily be the case in another. For example, I like the way my hair has been cut, but someone else might not have the same view. That is much more subjective and difficult to identify, whereas whether or not it has been cut with due care and attention is a totally different matter. It is clearly a difficult issue, and one to which I am sure we will return in Committee, because there are strong arguments on both sides. It is a matter of weighing up the evidence and deciding which side to come down on. There is not necessarily a right or wrong answer; either is a possible outcome.
Alternative dispute resolution and an ombudsman service were mentioned. I believe that we must first consult on how to implement the alternative dispute resolution directive, which the Select Committee mentioned in its pre-legislative scrutiny. Having a single consumer ombudsman is one of several options that we are considering, but it would not be appropriate to legislate for that until after we have properly consulted and decided which avenue to pursue and how to pursue it. We intend to publish a consultation document shortly, and I look forward to hearing people’s views on what approach we should be taking and on having a single consumer ombudsman, but this Bill is not the vehicle for that.
I would like to clarify a point made about collective redress. The hon. Member for Windsor mentioned the right of small businesses to participate in collective redress. The proposals in the Bill on competition-based measures and collective action will be available to consumers and small businesses in the specific area of the competition tribunal. On the broader issue of whether small businesses should be eligible to access more of the rights in this legislation, I understand that research by the Federation of Small Businesses will be produced fairly shortly. I am interested to see the case it makes. I am fairly sympathetic to the idea, but I do not think that this legislation is the place to introduce it, because it is specifically about business-to-consumer relationships, not business-to-business or consumer-to-consumer relationships. We want to maintain that clarity. However, this is an issue that will come up again, so I look forward to reading the FSB research.
The unfair terms legislation relates to a very complex area of law. The Bill will make it easier for businesses to apply the law in practice while ensuring that consumers are not tripped up by the small print. The Government agree that consumers should be protected from terms that allow traders to make unilateral changes to a contract, and the so-called grey list of potentially unfair terms already includes terms that permit the trader unilaterally to alter the characteristics of a consumer contract. Through the Bill, we are protecting consumers from terms that are not made prominent and are left in the small print, because they can be considered for fairness by the court. We think that will address many of the problems that have occurred.
To respond to one of the concerns raised by the hon. Member for Walthamstow, under recent regulations implementing the EU consumer rights directive, traders cannot hide costs; they must make all charges and costs clear up front before the consumer buys. That will come into force in June 2014. We have already taken action to tackle hidden costs and do not believe that we need to legislate on it further.
As the hon. Member for West Bromwich West said, we also looked at proposals to make it harder for businesses to change terms, even when they are flagged to consumers as liable to change in certain circumstances, but we believe that could make businesses less likely to offer consumers good deals and bargains for fear of not being able to be flexible in future and to respond to changes outside their control. Our concern is that consumers would ultimately lose out, which clearly we do not want to see. That is why we have not gone ahead with those proposals.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) talked about the charges added by ticketing authorities. That will be covered by the provisions on unfair terms. If consumers are subject to extra charges that are hidden, that would be covered by the measures in the Bill. We have also legislated to prevent companies from charging more to process a credit card payment than it actually costs them, so that should offer customers further protection. I am sure that we will debate that further in Committee.
My hon. Friend the Member for Eastbourne (Stephen Lloyd) raised the important issue of funding for those who tackle breaches of consumer law, and that was also mentioned by the hon. Member for Edinburgh South (Ian Murray). As my right hon. Friend the Secretary of State said, BIS is providing additional funding of about £13 million through the National Trading Standards Board for enforcement to tackle national issues, which is separate from the budget for local issues. It will ensure better co-ordination across local authority borders and improved intelligence-gathering.
Ultimately, the provision of local trading standards services, which I know is the concern, is a matter for individual local authorities, but by supporting the National Trading Standards Board we are working to help trading standards services make better use of their money and co-ordinate better across borders. We are also helping trading standards officers to make more efficient use of their time by introducing 48 hours’ notice for routine inspections, which was welcomed by the hon. Member for Dudley South (Chris Kelly). Businesses, especially small ones, welcome the requirement for notice, because it means that they can ensure the right people are present and that the paperwork is ready, which saves time for both businesses and trading standards officers.
We do not believe that the measure will reduce the ability of enforcers to tackle rogue traders and breaches of consumer law as it applies only to routine visits. Trading standards officers can still turn up unannounced if they feel that providing notice would defeat the purpose of the visit or if they suspect a breach or an imminent risk to public health and safety. The introduction of notice only for routine visits will help trading standards to operate more effectively and efficiently, and save time and effort for both trading standards and small businesses.
The hon. Member for Edinburgh East (Sheila Gilmore) raised the issue of collective action, as well as the cost to consumers of taking individual action. The Bill will tackle that by giving public enforcers more flexibility to seek redress on behalf of consumers, so it will substantially improve the likelihood of consumers being able to get redress without having a court case, which is better for everybody, both consumers and businesses.
We are allowing for the business and the enforcer to reach agreement without the need to go to court, although the option to seek a court order will be available if agreement cannot be reached. The Bill will also allow for more flexible options to get the right solutions—for example, agreeing new delivery times for overdue goods, which might be more appropriate for the customer, or putting in place a better complaints system and joining an ombudsman service, as well as financial recompense. There is therefore a broad range of things that businesses could agree with enforcers to find a way forward. We want a system that is flexible enough to provide the most appropriate redress for consumers, and we believe that that is the right way to do so.
A couple of hon. Members mentioned the need to let people know about their rights and asked what we are doing to let them know about the changes. We have established an implementation group with members from the business community, consumer groups and the enforcement community. It is helping us to put together a strategy to ensure that consumers and businesses know about their rights and the changes that will be made by the Bill.
I completely agree with hon. Members who highlighted that information is absolutely key. The whole point of the Bill is to make legislation so much simpler that consumers will be much more able to understand their rights and to act when they feel that they have not been given the service or quality of goods they deserve. That is very important to us, and we are making sure that it runs alongside our work in the House.
The Bill will improve clarity and reduce the complexity of consumer law for both businesses and consumers. It will reduce the cost and time spent by both parties in resolving disputes, and it will lead to happier consumers and more successful businesses. The consumer law framework will be made fit for purpose in the 21st century by the introduction of a new category of digital content, and it will encourage consumers to shop around and take a risk on new businesses, helping our burgeoning digital industry to grow and to create wealth and jobs. The reforms will also build on and enhance the success of the current consumer and competition law enforcement regimes, making markets fairer and clearer. I therefore commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Consumer Rights Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Consumer Rights Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 13 March 2014.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of the proceedings.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on Consideration.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Gavin Barwell.)
Question agreed to.
Consumer Rights Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Consumer Rights Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(a) any expenses incurred by a Minister of the Crown or a government department under the Act; and
(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Gavin Barwell.)
Question agreed to.
Consumer Rights Bill (Carry-over)
Motion made, and Question put forthwith (Standing Order No. 80A(1)(a)),
That if, at the conclusion of this Session of Parliament, proceedings on the Consumer Rights Bill have not been completed, they shall be resumed in the next Session.—(Gavin Barwell.)
Question agreed to.
Business without Debate
(10 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr John Elam
(10 years, 11 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Gerry Sutcliffe (Bradford South) (Lab)
I am grateful for the opportunity to have this Adjournment debate this evening.
I am pleased to see the Minister for Policing, Criminal Justice and Victims in his place. I do not expect him to be able to respond in detail to the important issues that I will raise, but perhaps while he listens to my speech he will reflect on what advice he can give on the best course of action to take the matter forward.
The last case that I raised in which I felt a serious injustice had been done was that of Private Lee Clegg, a soldier in Northern Ireland who was convicted of murder. After the intervention of his solicitor, Simon McKay, other Members from both Houses and myself, he was eventually cleared of the crime.
I want to make it clear that I do not raise these matters lightly. On the whole, our legal system is fair and just. It was with great pleasure and pride that I served as a Minister in the Home Office and the Ministry of Justice under the last Government. I therefore raise this case knowing the confines within which Ministers may speak because of operational issues and the legal process. I raise this case this evening because a number of things have happened that have made me want to put it on the record.
Mr John Elam was convicted of a conspiracy to commit fraud and received a 10-and-a-half-year jail sentence in April 2008. He has now been released on licence. He has always maintained his innocence and has sought to appeal against his imprisonment. He had an appeal in 2010 that was turned down.
A constituent of mine came to see me to raise his concerns about the safety of the conviction and the role of certain officers in West Yorkshire police. As you will know, Madam Deputy Speaker, Members of Parliament are approached by many people who feel that the legal system has operated against them. Sometimes it is difficult to unravel what the issues really are. As any other constituency MP would do, I wrote to the appropriate Departments and West Yorkshire police, and I contacted Mr Elam’s then solicitors, Keith Dyson and Partners. I also had meetings with the West Yorkshire police commissioner.
My interest was stirred even more when differing accounts of the case emerged. According to West Yorkshire police, Mr Elam was an international criminal who had connections to the Russian mafia and was involved in money laundering and the drugs trade. However, according to his solicitor, Mr Elam was the victim of police intimidation and a dirty tricks campaign, which included a lack of disclosure at his appeal. I am not a lawyer, so I was unsure what legal avenues were available to resolve the conflicting stories. As MPs do, I asked around, seeking advice and receiving information from many sources. The responses led to my interest in the case deepening further.
Mr Elam had only one previous conviction, for common assault—he threw a Toby jug at a pub landlord. How did that minor criminal evolve into an alleged international criminal? According to West Yorkshire police, they were interested in Mr Elam in 2005 and sought approval to have him monitored and placed under surveillance as a dangerous criminal. Operation Teddington was set up, and a very large amount of resources was spent on the process. Covert action was used to monitor the bank accounts of the Medina Trading Company, which consisted of a restaurant and a car wash. Mr Elam has always admitted his involvement with the Medina company and its directors.
The Yorkshire bank held the accounts of the Medina company, and an employee of the Yorkshire bank at that time, Mr Richard Shires, passed on information relating to the accounts, and cheques, to DC Casey of West Yorkshire police, as confirmed by affidavit. During my investigations into the matter, I have submitted a number of freedom of information requests to West Yorkshire police, through which I have discovered that a person called Mr Richard Shires was a serving special constable in West Yorkshire police at the time the information was passed on. I have also discovered that a person called Mr Richard Shires subsequently became a paid constable in West Yorkshire police and continues to serve to this day. I have tried to discover through a recent freedom of information request whether those Richard Shires were one and the same, but at this time I have not been provided with that information.
If those Richard Shires were one and the same, there was a clear conflict of interest, and more to the point, the credibility of the information and cheques passed to DC Casey would be called into doubt. I think all would agree that it would never be appropriate for a bank employee who was also a serving special constable to assist with the inquiries of the very same police force he worked for.
At the trial, the Crown was represented by Mr Sandiford, QC. No evidence was given about the wider concerns relating to Mr Elam’s criminal associations. In fact, Mr Sandiford stated:
“The prosecution case here is that the conspirators sought to conceal the fact that Mr Elam was the true owner of the companies acquiring the business in order to defraud creditors.”
In summing up the case, His Honour Judge Wolstenholme said to the jury that
“what you must do is take the view that, well, something dishonest was going on with one or more of the defendants. They must all have been up to something, even if you are not sure what.”
Subsequently, Mr Elam was convicted.
Mr Elam’s case, supported by his legal team, portrays an entirely different account of the chain of events. Mr Elam claims that he was approached in the summer of 2004 by a police officer demanding £150,000 in cash to be paid immediately, and £30,000 annually thereafter. In March 2005, the police investigated Mr Elam’s business practices using the covert name Operation Teddington. It is alleged that, in June 2005, 49 officers were redeployed from the anti-terrorist taskforce to work on Operation Teddington.
As I said, in September 2005, Mr Richard Shires was a paid employee of the Yorkshire bank. He accessed bank accounts relating to the Medina restaurant and secured more than 3,000 cancelled cheques. A written affidavit by Mr Shires confirms that he delivered a bundle of those cheques to DC Casey. The Yorkshire bank also confirms that it never received an order to produce from the courts.
In 2006, John Elam was arrested, and then the Crown court trial began. Despite a wide-ranging three-year investigation, involving more than 300 officers, Mr Elam faced a single charge of conspiracy to commit fraud. He was convicted and served his sentence in Wakefield prison as a category A prisoner, the highest security level. He had also been treated as a category A prisoner during his time on remand. Mr Elam suffered a stroke in prison and needed external medical support.
It is my contention that, whatever the true situation, a number of questions remain unanswered and there are a number of public interest concerns. First, was a production order properly served to Yorkshire bank, and what was the role of PC Shires? Secondly, what was the true cost of Operation Teddington, and were officers diverted from the anti-terrorism taskforce, who at the time were dealing with the 7/7 bombers in west Yorkshire? Thirdly, why was Mr Elam considered to be a category A prisoner, and who was the police officer that demanded money?
I know the Minister cannot respond directly to individual cases and that the Criminal Cases Review Commission will take a fresh look at this case, but I am seriously concerned enough to raise these issues and the fact that, while out on licence, Mr Elam still faces issues related to the recovery of the proceeds of crime. A hearing that was suspended in October is due in February. I have tried to contact West Yorkshire police on a number of occasions about those issues, and I will continue to do so. I was heartened today when I had a more co-operative response from West Yorkshire police because they knew this debate was taking place, and I hope to take the matter further.
These are serious allegations and this is a serious case—as I said, I do not usually promote and push issues where I do not feel that a cause needs to be looked at. This is a sensitive case, but it is important that as constituency MPs we raise such matters when they are put to us, and that we try to get the best result for the constituents we represent, particularly where justice and the work of the police are concerned. It must always be held utmost that the police operate in a proper manner and that our legal system is operating at its best.
I want to put this case on record. I am sure it will not end here and that we will have to deal with other issues. However, I believe that the other bodies involved—they know who they are—should look at this case in greater detail, and I look forward to what the Minister has to say.
The Minister for Policing, Criminal Justice and Victims (Damian Green)
I congratulate the hon. Member for Bradford South (Mr Sutcliffe) on securing this debate and thank him for recognising at various stages in his speech that I will inevitably be constrained in what I can say in response to the specific points he has raised. He served in a distinguished capacity in both the Ministry of Justice and the Home Office under the previous Government, so he will recognise that as a Minister in both Departments I am doubly constrained in what I can say. I will, however, respond to his points about miscarriages of justice, applications to the Criminal Cases Review Commission, and police matters.
Consideration of alleged miscarriages of justice is a matter for the independent Criminal Cases Review Commission, and ultimately for the appeal courts. I am aware that Mr Elam has made an application to the commission. It is therefore not a matter for the Government and it would be inappropriate for me to comment on that case on their behalf. I understand that Mr Elam has made a complaint to West Yorkshire police that is still ongoing and being investigated by the force’s professional standards department. Again, that disqualifies me from commenting on it.
The hon. Gentleman mentioned the background to the case, and I understand that Mr Elam and a number of co-defendants were prosecuted as a result of a major operation by West Yorkshire police. There were a number of criminal trials against Mr Elam and other defendants in 2006, 2008 and 2009. Mr Elam was convicted of offences including assault and conspiracy to pervert justice, conspiracy to defraud, and doing acts tending or intending to pervert the course of justice. Custodial sentences were imposed following conviction, which have been served, and I understand that Mr Elam has appealed unsuccessfully to the Court of Appeal, against sentence on one occasion, which was heard in 2007, and twice against conviction—both those appeals were heard in 2010.
As I have said, Mr Elam has made an application to the Criminal Cases Review Commission, which was established by the Criminal Appeal Act 1995. Its purpose is to review possible miscarriages of justice. Since 31 March 1997, the commission has operated with the power to investigate alleged miscarriages of justice and refer convictions and sentences to the relevant appeal court for a new appeal. Its remit extends to England, Wales and Northern Ireland. The commission replaced functions that were previously carried out by the Secretary of State. Parliament established the commission specifically to be a body that is independent of the Government.
A commission review is rightly a long and thorough process. If Mr Elam’s application to the commission concerns all the criminal proceedings to which he has been subject over a number years, the review will be complex and lengthy.
It should be noted that the commission has strong statutory powers to enable it to discharge its functions. It can direct and supervise investigations; approve the appointment of officers to carry investigations on its behalf; and gain access to documents and other relevant materials. I draw the hon. Gentleman’s attention to the power in section 17 of the 1995 Act, under which the commission can reasonably require any person serving in any public body to produce to the commission any document or other material that can assist it in the exercise of any of its functions.
Of course, “public body” includes the police, so the commission’s powers pursuant to section 17 operate irrespective of any duty of confidentiality and allow the commission access to information of the highest sensitivity. Accordingly, as I am sure the House can see, the commission has the power to obtain and review the papers and materials held by West Yorkshire police, provided the commission believes it reasonable to do so, in connection with its review of Mr Elam’s conviction. I hope that that reassures the hon. Gentleman that, when the time comes, the commission can access and consider all material relevant to the review of Mr Elam’s application.
The commission has confirmed that an application from Mr Elam was received in January 2013. Mr Elam is now at liberty and, as I understand it, the case is not yet under active review. The commission has informed me that it recently wrote to advise Mr Elam that the estimated date for the allocation of his case for review is January 2015. I appreciate that that is some two years after the original application was made and that, given the complexity of the case, it is likely to be some time before an outcome is reached once the review is under way.
In addition, the commission has explained to me that it operates a system of priority for applicants who are in custody. For cases requiring a substantial review, the review is generally started 12 months earlier when applicants are in custody than when somebody is at liberty. Currently, the wait for those in custody is unduly long. The commission is concentrating on allocating those cases to reduce the maximum waiting time.
As I have said, although the commission prioritises applications from people in custody, I am advised that it has a policy for affording priority to any individual case when appropriate. Perhaps Mr Elam wishes to pursue that, or perhaps the hon. Gentleman can discuss with Mr Elam whether that is an appropriate course of action in his case. I should take the opportunity to repeat that the Government should not, and indeed cannot, in any way intervene or be seen to be intervening in a matter for the commission and, if appropriate, the appeal courts.
On the West Yorkshire police investigation, I understand from them that Mr Elam’s solicitor contacted them at the end of last year to make a complaint about an officer involved in the 2005 investigation. West Yorkshire police’s professional standards department is currently in correspondence with Mr Elam’s solicitor about the matter and currently awaits a response. As the hon. Gentleman has said, Detective Chief Superintendent Brennan, the head of the West Yorkshire police professional standards department, has spoken to him and informed him of the sequence of events surrounding the original complaint to the Independent Police Complaints Commission.
The complaint was thoroughly reviewed, and the response was sent on 18 September advising that there was no evidence to support the allegation. A formal complaint was recorded by West Yorkshire police’s professional standards department and, although Mr Elam and his representatives have been advised that the complaint will be subject to disapplication on two occasions, there has been no response to the letters.
I understand that the hon. Gentleman was advised that the process would not stop West Yorkshire police’s professional standards department from taking action on the information, especially if there is a suggestion of misconduct or criminality. I believe that Detective Chief Superintendent Brennan has also offered to meet the hon. Gentleman to go through any outstanding allegations or suggestions of misconduct. As well as that offer—it is obviously a matter for him to decide whether to take that up—the professional standards department strongly encourages Mr Elam, or any other person, to contact it should they have information that they believe may be relevant or of value. I think that that is all I can appropriately say at this stage.
If after those stages Mr Elam is not satisfied with how his complaint to West Yorkshire police was dealt with, or how he was notified of the outcome, he can appeal a decision to the Independent Police Complaints Commission, which is the statutory guardian of the police complaints system. There are, therefore, further steps that he can take if he wishes to do so.
The hon. Gentleman raised three important specific points at the end of his speech. Let me address them as far as I can. The issue of the production order to Yorkshire Bank and the role of Mr Shires is specific to one or more of the criminal cases brought against Mr Elam. If that is a case he has asked the Criminal Cases Review Commission to consider, it will investigate the issues fully. It is therefore not appropriate for me to speculate on them. Information on the costs and diversion of police resources for the purposes of Operation Teddington is an operational matter for West Yorkshire police, so I refer the hon. Gentleman to it for the answer to that. On the question of where Mr Elam served his custodial sentences, the decision on which custodial facility a convicted prisoner is sent to is made by the National Offender Management Service. Its decision is informed by information and intelligence from various sources, and the directorate of high security has a responsibility to act on that information. It is not within its remit to investigate the details of the information provided by the sources it uses.
It is clear from the important matters raised by the hon. Gentleman that there are issues that need to be looked into further. As I have explained, the relevant and appropriate bodies are looking into those matters now. I therefore think that the sensible way forward is to allow the application to the Criminal Cases Review Commission to take its course. I hope that that satisfies the important points raised by the hon. Gentleman.
Question put and agreed to.
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Education Funding for 18-year-olds
(10 years, 11 months ago)
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Kate Green (Stretford and Urmston) (Lab)
It is a pleasure to serve under your chairmanship this morning, Mr Williams. I am very glad to have secured this debate on a subject that affects not only the excellent Trafford college, which serves my constituency, but further education and sixth-form colleges right across the country, as is demonstrated by the presence of so many colleagues.
On 10 December last year, without any prior notice or consultation and before any impact assessment had been published, the national director for young people at the Education Funding Agency announced a 17.5% cut in funding per full-time student aged 18 at the start of the academic year 2014-15, as part of a strategy to achieve the savings required in the 2015-16 spending review period. The cut, which it is estimated will affect 100,000 students and save £150 million, means that the funding per student would be reduced from £4,000 to £3,300, at an average cost to FE colleges of £600,000 per college, although some will suffer much greater cuts—in some cases, in excess of £1 million. Sixth-form colleges will also be hit, many of which have already suffered substantial funding cuts; some face the loss of as much as a third of their funding over the lifetime of this Parliament.
Mr Jim Cunningham (Coventry South) (Lab)
I hope that my hon. Friend realises that the student opportunity fund will also be cut. That will badly affect Coventry university, which will receive a cut of £790,000. The figure for Warwickshire college is £361,000, and for North Warwickshire and Hinckley college it is £162,000. Effectively, Coventry and those Warwickshire colleges will have a cut—so much for helping young people to find jobs and acquire skills. What does she think about that?
Kate Green
My hon. Friend is right to draw attention to the wider context of the cuts faced, both by the FE sector and by this particular age group.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate the hon. Lady on securing the debate. While we are focusing on the impacts on sixth-form colleges, does she agree that this is not a double but a triple whammy, because sixth-form colleges are facing the VAT problem, in that they have to pay VAT whereas other schools do not? In a sense, it is a really unlevel playing field. Colleges such as Brighton, Hove and Sussex sixth-form college and Varndean college in my constituency simply cannot understand why there are double standards, particularly when we add in the fact that academies are being set up and getting funded for sixth-form, and sixth-form colleges are not.
Kate Green
The hon. Lady is right. The issue of the uneven playing field in relation to VAT charging was raised in this Chamber shortly before Christmas by my hon. Friend the Member for Wigan (Lisa Nandy), and many other hon. Members have repeatedly brought the matter to the Government’s attention.
Ministers have argued that the cut announced just before Christmas is justifiable because they want to focus spending on 16 and 17-year-olds, and because 18-year-old students would already have received two years of post-16 full-time study. Perhaps Ministers believe that the affected students are undertaking a repeat year of study in order to resit their A-levels and upgrade their results, but that is not the case at all. As has been pointed out by the Association of Colleges, the 157 Group and others, the students most affected are most likely to be those on vocational courses.
Those students may have achieved good GCSE results at school but may have had no opportunity to undertake vocational study at key stage 4. If they wish to pursue a technical route, they cannot begin level 2 vocational studies until they enter college post-16. Colleges report a reluctance among, and lack of incentive for, schools to co-operate with them to provide early vocational training to students aged 14 and 15, and it seems particularly unfair that such students should be penalised.
However, it is perhaps even more concerning that many of the students who will be affected are likely to be those whose school experience was the least successful. For such students, full-time study undertaken at college offers a vital second chance. These are the students who may have found the school environment difficult, but who flourish in a college setting. They may have had their education disrupted by health problems or difficult family circumstances. Some will have started out their studies in a school sixth form but will have left after the first year, having failed to attain good AS grades —often as a result of the poor information, advice and career guidance offered in the school.
Dr Julian Huppert (Cambridge) (LD)
I thank the hon. Lady for giving way and for securing this very important debate. Does she agree that there is also an issue with the number of schools not providing information about the existence of FE colleges and sixth-form colleges? There needs to be a much better link, with schools encouraging people to look at apprenticeships and other opportunities.
Kate Green
I very much support what the hon. Gentleman says. This is a matter of the incentives and funding arrangements, and it is about having a level playing field for all educational institutions, something that I know other hon. Members will wish to allude to in the debate.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I congratulate my hon. Friend on securing the debate, and apologise for the fact that I will not stay until the very end. A lot of emphasis has been put on the impact assessment. Sheffield college and Sheffield’s Longley Park sixth-form college, in my constituency, are somewhat bewildered as to who could possibly have undertaken an impact assessment that so grievously missed the point about what the cut will do to young people from the most disadvantaged backgrounds. Does she agree that it would be possible to avoid the cut if new institutions and small sixth-form developments that have not recruited to the level for which they were funded had that money properly clawed back in a timely fashion? That would be better than hitting the most disadvantaged students.
Kate Green
I very much agree, both with the concerns that my right hon. Friend raises about the impact assessment, and with his comment about potential alternative sources of funding that would allow us to avoid the need to introduce this cut. On his comments about which students will be most affected, an analysis of the situation at Trafford college, which serves my constituents, bears out his concerns. Ministers know that level 3 is the standard that employers increasingly look for, and it is the standard that we should expect students to achieve as a minimum. It is worrying that the majority of students at Trafford who will be affected are studying vocational courses at level 3. The majority had low attainment at age 16 and, contrary to the suggestion in the Government’s impact assessment, the majority come from the borough’s most disadvantaged wards.
I have looked carefully at the breakdown of the courses that students at Trafford college are taking. They include English, maths, biology, chemistry, and vocational courses in plumbing, training as an electrician, vehicle maintenance and cabin crew training—a testament to the important relationship that the college has forged with nearby Manchester airport. Those courses could not be more pertinent or relevant to the career prospects of young people, so it comes as no surprise that college principals have expressed concern that a cut in funding, which will have the effect of reducing access to such courses, increases the risk of these young people becoming NEETs—not in education, employment or training.
Stephen Gilbert (St Austell and Newquay) (LD)
I congratulate the hon. Lady on securing this important debate. Her experience in Trafford is exactly the experience that is being fed back to me by the principals of Cornwall college, which has campuses in Newquay and St Austell, and Truro and Penwith college. They say that very vulnerable people, whom we should be helping the most to get that second chance in education, are likely to be affected. Does she not find it surprising, as I do, that although the Government’s impact assessment suggests that disadvantaged people will be affected by the cut, we are moving ahead with it anyway?
Kate Green
I very much agree with the hon. Gentleman that the impact assessment, which paints a rather puzzling picture, does not appear to support the decision that the Government have taken. It certainly attempts to paint a rosier view than the one that college principals and sixth-form college heads have painted. The Government’s somewhat thin assessment pays no attention to wider issues, such as the implications for bursary funding, and it pre-empts the outcome of the Cabinet Office review of provision for 16 to 25-year-olds.
Stephen Timms (East Ham) (Lab)
I am grateful to my hon. Friend for securing a debate on this very important issue. She has talked about what college principals are saying. Let me quote what the principal of Newham sixth-form college has said, describing those affected:
“These are ambitious and aspirational students who have stuck with their commitment to education. They are doing the right thing…How were they to know that the system would decide that they don’t deserve to be funded for 3 years of further education at the same rate as those students who only need 2 years?”
Is not it a very arbitrary and damaging cut that has been introduced?
Kate Green
It is indeed a damaging and arbitrary cut. Little attention seems to have been paid to the educational life chances of these students and why they need this additional year of full-time education at age 18.
There are also, it is fair to say, a number of flaws in the methodology used in the Government’s impact assessment. It compares 18-year-old students with all 16 to 18-year-olds, not with 16 and 17-year-olds, which means that the distinct circumstances and backgrounds of 18-year-old students and their particular needs and characteristics are obscured. It fails to do a comparison with students in school sixth forms, and so underplays the disproportionately diverse backgrounds of FE and sixth-form college students. It ignores 18-year-olds studying for between 450 and 539 hours, and it makes no mention of the disparity between the funding for five to 15-year-olds, and the funding for 16 to 18-year-olds, which the Association of Colleges has pointed out already stands at 22%.
Even so, as the hon. Member for Cornwall—I forget the exact constituency—[Interruption.] It is not all of Cornwall. As the hon. Member for St Austell and Newquay (Stephen Gilbert) pointed out, the impact assessment does acknowledge that there is a disproportionate impact on disadvantaged students. A disproportionate number of black and ethnic minority students are affected. It also recognises that the majority of students affected are undertaking vocational courses of study.
The impact assessment recognises that five out of six students affected are in FE colleges. That means in practice that the effect of the policy overall is a 5% funding cut for FE colleges, compared with a 1% cut for schools. It is likely that, in colleges, the effect will be felt not just by 18-year-old students, but by all 16 to 18-year-old students, because they are often taught together as a single group.
The impact on colleges is compounded by the lagging in their funding, which was highlighted when the Secretary of State appeared before the Select Committee on Education on 18 December 2013. That lag means that the effect of the introduction of a cut in August 2014 is that the funding received for students who have already started two-year courses will be at a rate lower than had been anticipated and budgeted for in their second year. That means that colleges are having to rethink fundamentally their budgets and business plans for next year, and their future admissions policies. I was encouraged by the fact that the Secretary of State recognised that point when it was raised with him at the meeting of the Select Committee and agreed to give it further consideration, including the possibility of delaying the cut until September 2015. I very much hope that this Minister will be able to update us today on what further thought has been given to that.
In conclusion, there are real concerns about the impact of the cut both on institutions, especially further education colleges and sixth-form colleges, and on the students they teach. The policy appears to run counter to all the Government’s ambitions to increase social mobility, to invest in vocational education, to increase the employability of young people at risk of becoming NEET, and to level the funding playing field for colleges and schools.
Of course everyone understands the scale of the challenge, given the financial settlement in the spending review 2015-16, but as has been pointed out, other spending choices could have been made. As the Chair of the Select Committee, the hon. Member for Beverley and Holderness (Mr Stuart), pointed out on 18 December, colleges are losing out, while free schools and academies are being funded for what he graphically described as “phantom students”, often in areas where there is already plenty of provision.
The Sixth Form Colleges Association points out that nine free schools for 16 to 19-year-olds established since 2011 will educate just 1,557 students when they have recruited fully in line with their plans—if they manage to do so—compared with an average of 1,687 students per single sixth-form college, so the investment in free schools certainly does not look like an efficient use of funds at a time when spending for this age group is under such pressure.
Against that background, the choice to cut funding for vocational training, and to cut funding that is more likely to reach students from less advantaged backgrounds—the very group that the system has repeatedly failed—seems at best ill informed and at worst simply perverse. That approach is likely to have a far-reaching impact on the life chances and prospects of the very group of young people for whom we should want to do most. I very much hope that Ministers will take a step back for further reflection and rethink their approach, given the widespread concerns, and I very much look forward to the Minister’s response to those concerns.
Hywel Williams (in the Chair)
Order. At least 10 hon. Members have written in to say that they want to contribute to the debate. The Chairman of Ways and Means has therefore authorised me to impose a time limit on speeches, which will be five minutes. I appeal to hon. Members to keep interventions—and the answers—short.
John Pugh (Southport) (LD)
I congratulate the hon. Member for Stretford and Urmston (Kate Green) on calling the debate. I was minded to attend it only after I visited my local college last Friday. I come from an area that is not ethnically mixed or socially diverse—it is not socially deprived anyway; it is fairly socially diverse—but people at the college reminded me that there was an issue in all parts of the country and for all colleges.
Most students and, I guess, most people in this room have followed a fairly orthodox path in education: attending school from 11 to 16, staying on to 18 or going into further education, and subsequently going to university or into employment. That is a fairly characteristic profile. Most people, when they look back at their own educational history, will see that they have that characteristic profile, but some people find themselves at the age of 18 still in FE. These are to some extent the exceptions, rather than the rule, and a decision has in effect been made to fund them less, so colleges will provides less for them, opportunities will diminish for them, and courses specifically for them will decrease. We have to ask ourselves, as the hon. Lady did, who these people are who are less fundable.
I have read the pack prepared by the Library for the debate and I am fairly clear on some things. These people are certainly not the disabled, for whom special provision is made. They are not those without qualifications in English and maths, because they will not be affected. They are disproportionately from the black and ethnic group, and that seems to be agreed both by the colleges and by the Department for Education. There is some dispute between the Department and the colleges about whether they are disproportionately from socially deprived areas, because I understand that the impact assessment from the Department says that they are not. They are certainly not repeat grade hunters, as the hon. Lady made clear; they are not people just looking to enhance an already good educational career. They are not eternal students—people wanting to do courses just for the sake of it. They are people who are there for a specific purpose.
We are talking about people who are likely to have had a slightly unorthodox educational career. They are likely to be people who have made mistakes, either in course choice or in their adolescent life, as many people do. They are likely to be people who have encountered social or emotional problems during their education. I notice that the hon. Member for Romsey and Southampton North (Caroline Nokes), who will speak later, has tabled several questions along those lines, asking what happens to children who, through no fault of their own, have lost out on a year or two because of illness. During my A-level years, I had a year out because of illness.
Those who will be affected are disproportionately likely to be on vocational courses, and they are more likely to suffer as a result of not completing their course. The cost of not funding those students is potentially considerable, and the risks are appreciable. The Government will respond that savings must be made somewhere, and that it is not fair to criticise the Government without suggesting other ways in which savings might be made. I agree with the hon. Member for Stretford and Urmston that an audit of the academy and free schools programme would realise significant funds that could be used to defray those costs, because, frankly, money is being squandered in that area. The Government can do some good by making that move, and they can reduce the risk.
I do not want to take up too much of hon. Members’ time, but Martin Doel on behalf of the Association of Colleges has summed up the situation rather well:
“We all understand the financial constraints on the public purse”,
as indeed we do,
“but this funding cut is ill-targeted, under-researched”—
that is undoubtedly true—
“and full of unintended consequences”.
I believe the Minister will have some difficulty explaining why that is not true.
Mr John Denham (Southampton, Itchen) (Lab)
I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on obtaining this important debate. I want to start by asking the Minister a question that sixth-form colleges have raised with me—how he thinks colleges should respond to the cut. Now that full-time students aged 18 will be funded by some £700 a year less than other students, it is not clear whether he thinks that colleges should continue to support those students in their third year with the same quality of education despite not having the money to do so, or whether he wants colleges to offer such students only two years of education. It is important to have a clear answer to that question on the record.
I want to focus on a few matters to do with Southampton. Two consequences of the policy have not been made clear by the Government. Although the Government have said that they will try to protect the base budget, colleges do not teach the students in question separately, so the effect will be felt across the college. The decision will concentrate the cuts on a subset of colleges, particularly those in areas with a higher than average level of deprivation and areas of historically weaker school performance, which will throw up more able students who require a third year to reach level 3 or A-level. The decision will target colleges in relatively small areas, because a concentration of students from more deprived backgrounds with weaker prior school attainment will not be offset by a wider catchment area of students who do not suffer such disadvantages.
That, in a nutshell, is the position that Southampton faces. There are two sixth-form colleges and City college, which is the FE college. They all perform well on inspections and completion rates, but they have a disproportionate number of students with weaker prior school attainment and higher levels of deprivation. The principals estimate that the cut across the three colleges is approximately £500,000. In City college, of the 246 18-year olds, 78% have not yet achieved a C at GCSE English or maths, so they have yet to achieve the basic level of attainment that we are all aiming for; 44% are from disadvantaged postcodes; and 44% are taking level 3 courses. At Richard Taunton sixth-form college there are 212 18-year-olds, of whom 46% come from priority neighbourhoods. Of those third-year students, 49% took a level 2 course before progressing to level 3, 28% are on bursaries to support their attendance and 24% speak English as a second language.
I want the Minister not only to clarify the aim of the policy but to understand how his decision targets institutions such as those in Southampton. In the impact statement, the estimate of the impact on sixth-form colleges is 1.2%. I can only say that some sixth-form colleges must be barely affected, because the effect is nothing like that for the sixth-form colleges that my constituents attend.
Kerry McCarthy (Bristol East) (Lab)
I have had an e-mail from the principal of the sixth-form college in my constituency, who says that the cut to that institution is 17.5%, which will affect 120 students. The college will lose £85,000 of funding that had already been committed, so it will be hit incredibly hard. I agree with my right hon. Friend; I just do not know where that figure comes from.
Caroline Nokes (Romsey and Southampton North) (Con)
It is a pleasure to serve under your chairmanship, Mr Williams. I add my congratulations to the hon. Member for Stretford and Urmston (Kate Green) on securing the debate. I draw attention to a declaration of interest: I am an advisory governor of Eastleigh college in the neighbouring constituency to mine.
Hampshire has a fine tradition of sixth-form colleges. Some of the best in the country can be found in our fine county, including Peter Symonds college, which I attended. However, my constituency has no sixth-form provision whatsoever in the state sector, which means that virtually every 16 to 19-year-old is sent elsewhere. The colleges that they attend have different specialisms and are of very different sizes. Some focus on vocational training and others are highly academic. They cater for different types of students from different backgrounds, some of whom have excelled at GCSE and some of whom have not.
I want to mention some of those colleges, not as an exercise in name checking my favourite college principals but to highlight the variety of experience. Some are huge, including Peter Symonds college, Barton Peveril sixth-form college and Brockenhurst college, all of which cater for well over 3,000 students. Others are much smaller. It is a pleasure to follow my neighbour, the right hon. Member for Southampton, Itchen (Mr Denham), who mentioned Richard Taunton college, which is less than half the size of some of the bigger colleges in the area. Brockenhurst has a particular specialism in special educational needs, and when I visited last year I was particularly impressed with its dedication to those who faced different learning challenges. Sparsholt college, one of the country’s leading land-based colleges, provides a significant focus on vocational qualifications. It has emphasised that it has only 44 18-year-old A-level students, but it has 358 18-year-olds on vocational courses.
Why might students need an additional year at college, and what would be the financial impact on colleges? I will not revisit the VAT issue, but the Minister is well aware of it. There are many reasons why a young person might not achieve the results to which they aspire at GCSE, at A-level or in a vocational course. We all remember the problems with GCSE English last year, which in Hampshire particularly affected boys, and I recall how the colleges I have mentioned really stepped up to the plate and met those challenges. They compromised, put on additional classes and held resits of English GCSE. How much less flexible might they have been if they had thought that a fiscal penalty would result from their keeping those young people for another year?
What of Brockenhurst, which has a phenomenal track record of helping those with physical disabilities and special educational needs? Why should it receive less funding for a third year of study for a student who has overcome physical problems, as a result of which they need an extra year of study? Surely, we want to encourage young people to stay in education to achieve their maximum potential and we do not want to give colleges a reason to say no.
I am the mother of a 15-year-old, so I have been completing college application forms recently. I was struck by the additional information form that was required by the outstanding college in Hampshire, which asked for any additional reasons why a student might not complete their study, and I wonder how much more rigorous such forms will become. Two years ago I visited April House, a specialist eating disorder unit in the constituency of my neighbour, the right hon. Member for Southampton, Itchen. I emphasise that although eating disorders can affect anybody, they particularly strike 17-year-old girls who are high achievers academically. Three of the girls I met were at the same sixth-form college, but their studies had been disrupted—forced to a temporary halt—by their condition. It was not their fault, it was not the college’s fault and it certainly was not their parents’ fault, but all three girls had been negatively affected. Nevertheless, they were hoping to go back to college. I do not want colleges to have an excuse to say no to that type of student—to see illness as a reason not to accept them back on to their course because they can foresee a negative fiscal impact in having them back.
There are some great colleges that do a brilliant job of getting teenagers back on the road to education. I cite in particular Richard Taunton college, and we have heard the figures from the right hon. Member for Southampton, Itchen: 212 of 1,159 full-time students are 18, and 30% of them have come from other colleges. I always used to say to students, “You’re a long time old. Education is critical, but getting it wrong, admitting that you have made a mistake, making the necessary changes and moving on is all part of the learning process.” I will be a lot more reluctant to say that to them now.
I have 20 seconds, but I wanted to touch on the subject of summer-born babies, who we know are statistically likely to perform less well than their older classmates. That is measureable through GCSEs, A-levels and university admissions. What about those teenagers who, just through a freak of their date of birth, might require resits to achieve the required grade?
I shall finish with the thought that we must also think about those who come to the UK late, whose parents get divorced, who are bereaved or who have been sick.
Richard Burden (Birmingham, Northfield) (Lab)
I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on securing this debate, and I am happy to follow some excellent Back-Bench speeches. The policy we are debating will stop people getting the second chances that they need. If they do not have such chances, their life opportunities will be restricted, but it will also be bad for us and for the economy.
We all proclaim how much we support apprenticeships and welcome measures that are taken to boost them. Often, however, we know that far too few apprenticeship schemes reach the hardest-to-reach young people; the ones who, for good or ill, have been passed over by education up to and sometimes over the age of 16. Education has not given them the start in adult life that they would want. As well as being bad for young people, that is bad for the economy. It actually costs us as taxpayers in the long run, as well as the Government. That cost will not be taken away simply by cutting housing benefit for young people at some point down the line.
We also need those young people. The level and number of apprenticeships is often most advanced in the larger companies. They have the cushion of size—the human resources departments and the rest of it—to cope. For small companies, taking on apprentices can seem complicated and daunting. They are not sure what is at the end of it. That is why they need the confidence that they can go forward with young—sometimes not so young—people who are job-ready, or at least ready to be upskilled. That is where further education comes into the picture to provide the necessary education, training and aspiration, which are precisely what the policy is going to hit.
Of those in further education, 71% of those over 18 are studying vocationally based courses. Two thirds of the young people affected are disadvantaged in some way and require additional support. As other Members have said, we may be talking about black and minority ethnic students, or those with lower attainment at 16. At Bournville college in my constituency, 68% of those affected are likely to be disadvantaged in some way, including by previous poor attainment, deprivation, disability and learning difficulties. What impact will that have on the young—sometimes not so young—people who need support so that they have life chances? Who will provide job-ready or training-ready people for the firms that need them?
A lot of what I and other Members have said about post-18 education sounds like we are talking about people who are just over 18, going into their 20s. I have said several times that they are sometimes not so young—people who need chances later in life will also be hit. Look at the numbers of people we are talking about in my constituency. In December 2009, there were 100 people aged 24 and under who had been claiming benefits for more than 12 months. In December 2013, there were 240. That has more than doubled. There is a persistent problem of long-term unemployment among young people. If we look at the equivalent figures for people over the age of 24, there were 360 in December 2009 and 785 in December 2013. If we are to do something about increasing the chances for young people hit by persistent, long-term unemployment—even if there is a dip in unemployment overall—the policy we are debating will take us in the opposite direction from achieving that.
I know that the Minister will say that hard choices have to made, and they do, but we cannot simply do the sums and trade off chances up to 16, at 16 to 18 and post-18. We can do the sums in a different way. Let us start factoring in the cost to us, to taxpayers and to the young people themselves if they do not get life chances because their education is cut in an arbitrary, ill-targeted way. That is what the Government are doing with this policy. I plead with the Minister to think about it again. He will see that the objections do not come just from the Opposition; they come from the Government Benches as well. I really hope that he will rethink on this issue.
Peter Aldous (Waveney) (Con)
It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate the hon. Member for Stretford and Urmston (Kate Green) on securing this debate.
My concern is that the funding cut will disproportionately affect those towns where further education and sixth-form colleges are playing a major role in the education of 18-year-olds. That is the situation in Lowestoft in my constituency. I am grateful to the Minister for listening to the concerns that have been raised with him in recent weeks. In this instance, I am concerned that although the Government have carried out an impact assessment of their decision, they have failed to highlight the fact that the impact of the policy is concentrated in specific locations where it will hit certain—often vulnerable—communities hard.
There are four reasons why I believe that the proposed cuts will hit Lowestoft particularly hard. First, schools in Suffolk are not currently doing as well as they should be. Lowestoft college and Lowestoft sixth-form college are doing important work to address the situation, which often involves students staying on in education or training for an extra year. As a fellow Suffolk MP, the Minister will be familiar with the need to raise standards and levels of achievement in schools across the county. A variety of measures have been put in place, by both the Government and the local education authority, to address challenges and raise standards, but they will take some time to come to fruition. In the meantime, the two colleges are playing an extremely important role which should not be undermined.
A high proportion of the students who have become disengaged while at school either need to resit GCSEs or are following a vocational course. Lowestoft college advises that only some of its students follow the traditional course of completing GCSEs at 16, doing two years at A-level and then going to university. Instead, many pursue a variety of different paths that may include, for instance, a year at level 2 followed by two years at level 3. As a result, 25% of the 16 to 18-year-old students are aged 18 at the start of each academic year. That brings me to my second point: all post-16 mainstream education in Lowestoft is provided in the two colleges and there are no other schools or colleges where students can take A-levels. That is because four years ago, when the schools moved from a three-tier to a two-tier education system, it was decided to discontinue the individual sixth forms in each high school and replace them with a single sixth-form college—a centre of excellence. That was a good idea, and it is working, but the reduction in funding could undermine much of the good work.
My third point is that in Lowestoft there is a higher than average percentage of pupils from disadvantaged backgrounds living in deprived areas. Research by the Association of Colleges shows that 18-year-old learners are more likely to live in deprived areas than 16 or 17-year-old learners. There is a real worry that disadvantaged students will be hit the hardest as they are the ones who take longer to finish courses. That could have a negative knock-on effect on the number of NEETs.
Jason McCartney (Colne Valley) (Con)
I declare a personal interest. I never went to university; I attended a vocational college course. Kirklees college in Huddersfield is transforming young people’s lives under the inspirational leadership of Peter McCann. My hon. Friend has rightly highlighted what colleges give post-18 learners and the challenges that they face: in my area, for example, there are pupils who have recently moved to this country, who have behavioural difficulties, who have been in care, who are pregnant or for whom English is not their first language. Will he join me in asking the Minister to reconsider the funding reduction?
Peter Aldous
I am grateful to my hon. Friend for raising that matter. I will indeed join him in asking the Minister to reconsider the funding reduction.
Finally, it should be pointed out that larger colleges with larger budgets are better placed to handle reductions in funding; they may have more room to manoeuvre and put in place their own mitigating measures. Lowestoft college and Lowestoft sixth-form college are relatively small. Although they are performing extremely well in challenging circumstances, they are not as well placed as larger establishments to withstand the impact of such income reductions.
Mr Marcus Jones (Nuneaton) (Con)
I will try to be brief. My hon. Friend is quite correct that there will be a significant funding impact for many sixth-form colleges and further education providers. Could another impact be that such institutions, including for example the excellent King Edward VI college in Nuneaton and North Warwickshire and Hinckley college, are disincentivised from taking students at age 18?
Peter Aldous
My hon. Friend raises an interesting point. It is one of a number of issues that I do not believe the impact assessment addressed.
It should also be noted that the late announcement of the decision has made it difficult for colleges to make contingency arrangements. I am grateful to the Minister for listening. For the reasons that I have outlined, I believe that the measure hits Lowestoft particularly hard. As I look around the Chamber, I realise that there are numerous such communities all over the country. In Lowestoft, we have two colleges that are playing a vital role in difficult circumstances, raising educational standards and providing young people with the skills that they need to take up a variety of opportunities. The two colleges need the resources to carry on with that excellent work, and the proposal both handicaps them and penalises 18-year-olds living in Lowestoft, where there are no school sixth-form colleges for them to attend.
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on securing this important debate and other colleagues for laying out some of the challenges. I will make my comments brief.
There are two issues here: the cut itself, and the unfairness of it—not just the £700 per student, but the impact on individual institutions and the manner of its introduction, which has not been particularly mentioned and which I will discuss in a moment. The Government’s own impact assessments says that the measure will hit further education colleges disproportionately, much worse than schools. I quote from the impact assessment:
“Fewer than one in five of 16 to 18-year-olds funded by the EFA are aged 18 at the start of the academic year, although clearly this will vary by institution”,
which is one way of glossing over the issue.
As has been highlighted, the measure clearly hits vocational students much worse than academic students, due to the need to stay longer on vocational courses. Critically, it hits London worse than other regions, including Hackney community college in my constituency, which has imaginatively gone with the flow of many funding changes over the years but is once again being penalised for doing excellent work with 18-year-olds. Only last week I visited the college, meeting three students who had had difficulty achieving at GCSE level but had found at the college—one was becoming a chef, one went into painting and decorating and another was on a fashion course—vocations that worked for them and gave them the opportunity to achieve and secure jobs. However, they were over 18.
Areas with high numbers of black and minority ethnic pupils and disadvantaged students are particularly hit, which is a double whammy for Hackney South and Shoreditch and other disadvantaged areas. I take the Government at their word about their desire for greater social mobility—I represent an area where that is an important issue—yet I say to the Minister that I cannot see how the measure will help social mobility. It is disadvantaged students who need a second chance sometimes, as highlighted by the hon. Member for Romsey and Southampton North (Caroline Nokes), or who often just choose a different path of study that does not fit within the traditional tramlines for 16 to 18-year-olds. In further education environments, particularly Hackney community college, classes are very mixed, so it is not abnormal for 17 and 18-year-olds and much older pupils to be there. Sometimes students in a class range from mid-teens to late adulthood, as the painter and decorator to whom I talked last week highlighted, so 18-year-olds will often be in a class among other people.
I said that I would discuss the manner of the announcement. It was made very late, at the end of last year, with little, if any, discussion and no time for colleges to prepare. Colleges plan their academic studies ahead. Suddenly shifting course at such short notice is challenging. They will have made commitments to teachers and lecturers and tried to secure students through recruitment routes. Although they can often adapt at short notice, it is ridiculous and not very sensible for a major education sector—one that is within the Minister’s purview—to have to cobble things together in that way. It is not as though it were a great surprise that the Government are trying to manage the budget in this way and by taking such measures, so a little bit of forethought would have been a good thing.
By hitting colleges as it does, the measure goes against the policy intent and last year’s moves to equalise school and college funding. Can the Minister clarify one particular point? If a child is 18 years old on 1 or 2 September—old for their cohort, but within the normal cohort—will their funding be cut? I imagine not, but it would be good if he were explicit about it. I also point out that as others have said, this debate is well attended for Westminster Hall. MPs from around the country and from all parties have come. We are not bleating; we are raising a serious concern.
I know that the Minister is a thoughtful man, so I am sure that he is listening, but I am sure that he will also listen to the Secretary of State for Education who, when challenged by the Chair of the Select Committee on Education to push for even a one-year intervention to smooth things over, said:
“Let me have a look at that. It is a very fair-minded and generous suggestion”.
I appeal to the Minister to be fair-minded and generous, to follow the lead of his Cabinet colleague and to take a different approach. One alternative to a smoothing budget might be a flat-rate reduction across 16-to-18 funding, which would halve the effect on London colleges and be a fairer spread, allowing colleges to plan better. We recognise the challenge in funding, but this way is the wrong way.
Dr Julian Huppert (Cambridge) (LD)
It is a pleasure to serve under your chairmanship in this excellent debate, Mr Williams. I warmly congratulate the hon. Member for Stretford and Urmston (Kate Green) on securing it. There is clearly passion about the issue throughout the House.
The further education and sixth-form sector has been neglected and under-supported for many decades. It has not had the rightful support that it needs, which is a great shame, because it does extremely well with the resources that it has. We have heard that education for 16 to 18-year-olds gets about 22% less funding than for pupils up to 16, which seems problematic. We in Cambridge are hit particularly hard, because our county gets the lowest funding in the country for all schools, followed by poor funding afterwards. That is a separate issue and not for the Minister, but I hope the Government will correct the long-standing anomaly that pupils in Cambridgeshire get £600 less each per year than the English average. That does not seem fair to me.
My constituency is served by three excellent institutions, all of them for some reason right on the boundary; some are just inside, some just outside. They are Long Road sixth-form college, Hills Road sixth-form college and Cambridge Regional college, and they do extremely well. Hills Road sixth-form college has a national reputation for leading the way in the sector. If one looks at entry into Oxbridge, which I do not think is the only way to measure success, its performance is right up there; it gets more pupils in than anywhere other than Eton and Westminster, and it is a state-funded sixth-form college. That is what we should be aspiring to in state-sector education throughout the country.
However, the Government changes, of which the measure we are discussing is one, will make it hard for those colleges to provide the four A-levels that they have often provided and that are often provided in the private sector. They are worried about whether the example that they have set for so many years will continue, or whether that excellent exemplar of what the state can provide will be lost. They have huge problems.
Bill Wiggin (North Herefordshire) (Con)
Hereford sixth-form college is another outstanding performer. Does the hon. Gentleman agree that the Government could—it would be much appreciated by everybody if they could—consider how much VAT such schools can reclaim?
Dr Huppert
The hon. Gentleman is right. I was going to say that next. I have debated this matter in the House, as have many other hon. Members. One big problem is that the general education sector does not have to pay VAT, but the sixth-form sector does. If equal money is given at the beginning but one sector has to pay VAT and the others do not, that is a huge problem. A sixth-form college’s VAT load is typically £300,000. If the Minister could fix the problem with the Treasury, that would be solved. Cambridge Regional college pays £1 million in VAT. That is a huge difference and there should be a much easier way to solve the problem.
Caroline Lucas
Does the hon. Gentleman agree that it adds insult to injury that because the Office for National Statistics classifies free schools and academies as public, they have a much more favourable VAT situation than sixth-form colleges, which have, because of an anomaly, been beset with this problem? That ought to be sorted out now.
Dr Huppert
I agree. It is perverse to say that a free school or academy is more public than a sixth-form college or a regional college; it simply does not make sense and must be changed.
Long Road sixth-form college has its own problems. It has one of the lowest levels of funding of any sixth-form college; it has £480 per pupil per year less than the average. If it got average funding it would have an extra £940,000 and there would not be such a problem. It does not get protection, because it was not one of the high-funded sixth-form colleges, and it gets hit by another £70,000 or so, and pupils will miss out as a result. It was also hit years ago, because the Learning and Skills Council told it to put together a bid for new buildings that it desperately needed, but the calculations were done wrong and there was no money available, and it is stuck with poor buildings. Yet despite that it is in the top 10% of value added in the entire sector.
All three institutions do well and they would be delighted if the Minister visited—it is not a long distance—to look at what they are doing and at the problems they face. They do a great job, but this is the straw that can break the camel’s back, because it is not something that they can do much about.
Long Road sixth-form college does not have a way of changing its curriculum offer to students who are already enrolled in level 2 courses at the moment; it will not have the opportunity to take on a new system. It would be completely wrong to say, at the end of somebody’s level 2 year, “Sorry, you can’t do the course you signed up for. You can only do a 12-unit applied qualification: two A-levels rather than three.” That simply cannot be done; that would not be reasonable.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
On that point, will my hon. Friend give way?
Dr Huppert
No, I am afraid I will not. I have given way twice already.
The speed of the proposal is a problem. It is not helpful, either, because the non-qualification elements that the Government talk about are things that we should want to see and should not want to take away—employability skills, work experience, skill building and personal and social development. An investment now will save a huge amount of money over the lifetime of those pupils. Let us not cut the support there.
These institutions do a phenomenal job. Cambridge Regional college has responded actively to the Government’s drive for apprentices; it has just had its 10,000th apprentice and 4,000 are studying now. That is a huge increase. Such institutions throughout the country do their best to deliver education and social mobility on a fairly limited budget. Let us not have these small but incredibly damaging cuts—and they should certainly not be announced so late. I urge the Minister to listen to what all hon. Members have said and to think again.
Nic Dakin (Scunthorpe) (Lab)
It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on securing this debate. The attendance demonstrates how important this debate is inside this building and—more importantly—outside.
The fact is that students at colleges are 22% less funded per student than in the 5 to 16 sector, so this sector is already under serious pressure, financially. Frankly, the Government are cutting this sector because they have chosen to protect 5 to 16-year-old funding and they have nowhere else to go to cut the funding further. However, at the same time there are political choices, because the Government have created nine new 16 to 19 free schools at a cost of £62 million. The answer to my written question shows that students in those schools are funded at £5,500 per student, compared with £4,000 per student in other colleges.
Nic Dakin
No. I have to allow other hon. Members to get in.
Political choices are being made, which is why these colleges, and these youngsters, are being hit again.
Essentially, post-16 there are two types of institution: widening participation institutions, which include further education colleges and about half of sixth-form colleges, and selective institutions, including most schools and some sixth-form colleges. Essentially, the measure will hit widening participation colleges, which take a gamble, or work to invest, in students who are highest-risk in respect of Ofsted outcomes and in terms of needing the most work in them while they are there; and now they are the highest-risk in terms of cash. Hon. Members are right to say that the result will be perverse outcomes, in terms of behaviours of people in various areas.
Three types of students are affected: first, those who have not achieved their five A* to C grades at the end of compulsory education, coming to 16, and need an extra year to do their intermediate level, before going on; secondly, those who change course during their level 3 provision, often for good reasons, and take three years to do their level 3; and thirdly, students who have to take a year out to care for somebody or to have a baby, or for other crises that happen. These are the hardest students to support and they are the biggest risk, and now they bring in the least money. So the measure is damaging in that regard. It also contradicts the Government’s framework. To raise the participation age, for example, there should be rewards, not penalties, for taking these students forward. There is a desire to close the achievement gap and these are the very students to whom that applies. There is a desire to invest in vocational education and the Government’s own impact assessment demonstrates that this is hitting vocational education worst of all. Everybody recognises that the forgotten 50% need further investment and these students are the forgotten 50% who need it, to be able to deliver.
There is a danger. Let me quote Paul Wilson, principal at Regent college, who said that, in the area of Leicester in which his inclusive college operates, his is the institution in the partnership that is delivering for these students. If there are disincentives for him to do that, he might start to say, “Thank you, goodbye” to these students, and then where do they go? We will have a rising issue with people not in education, employment and training at 17 and 18, as well as beforehand.
It is really dreadful. I know, from my experience as a college principal, that schools would at the end of the first year send students with Ds at AS-levels to us, up the road, because they no longer wanted to deal with them, because they were too high-risk. This means that other students will be too high-risk. There is a danger that we will let down a generation—this forgotten 50%—yet again. There will be an impact on colleges, such as John Leggott college and North Lindsey college, which do an excellent job for students in my constituency.
Sir Peter Bottomley (Worthing West) (Con)
On behalf of my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), I shall put the case for both of us regarding the situation around the country and, because it is appropriate and we are the representatives, speak for Worthing college, which is, in effect, a sixth-form college for our town and district, and for Northbrook college, our further education college.
More than 600 students will be affected and the amount of money involved is more than £400,000. I do not want to play the numbers game, because some places will be affected more and others less. The question for the Minister is to what extent this is all compatible with the aims he set out in the skills funding statement 2012-15, which he made 13 months ago, in which he spelt out the four achievements he was after.
One issue facing the Government—the proposal having been announced in December and the impact statement produced on 13 January—is to what extent the Minister and his Departments are able to engage with the Treasury and talk not just about the still photograph of how it affects people now, but about the moving picture he can expect as other education reform changes bring forth their fruit.
For example, a significant number of students have had the extra year to get the qualification in maths and English now required for BTEC courses. I expect that more 16-year-old students in schools, academies and colleges will get the maths and English qualification, so fewer people will need support later on. That will help to cut some of the other costs to the education and training system.
We must also face transition issues. Colleges will on average lose 2% to 3% in-year. Their funding from September is based on decisions that they and the students took a year previously, so there is no way of escaping from that or adjusting the intakes. I do not argue, in any case, that intakes should be adjusted. The colleges are there to help people who will benefit. To go back to the analysis, I take the view that about 10% to 20% of people in their teens should be able to get out of the school and college system a year early, and about 10% to 20% could take an extra year at least. I do not think that we are all so normal and should be treated like racehorses, whose birthday gives the year cohort in which they will work. We need more flexibility.
I should declare that when I was at university my parents were not judged sufficiently well off to be able to pay anything for my maintenance, let alone my fees, and I am grateful to the taxpayers who kept me going. We should be asking how we can achieve a system in which those who fail or who have been hindered or slowed, for some reason, in their progress can get full support at college. There is a question whether people get to college at all: Worthing college was built 40 years ago for 600 students and there are now about 2,000, which is a sign of growth not just in population but participation. Northbrook college has done remarkably good things during its development and, with the use of initiative, has rebuilt its premises at relatively low cost to public funds.
I do not want to repeat the points made by Lynne Sedgmore, the executive director of the 157 Group of colleges, published in The Times Educational Supplement on 23 January; people will have read those. I urge the Minister to talk to MPs, consult heads of colleges and tell the Treasury that we need permission for a transition process, and that we should give up the idea that someone aged 19 who is in college needs less support or a shorter course. Those people are there at 19 for a reason, which is that the college can give them what they should have been able to get at 16 or 17.
My final comment is about the impact assessment. I believe that if a comparison had been made between 18-year-olds and 16 and 17-year-olds, there would have been far larger differences than from comparing 18-year-olds with 16, 17 and 18-year-olds; the Office for National Statistics should have prevented the Department from doing that sort of thing.
Hywel Williams (in the Chair)
I intend that the winding-up speeches should begin at 10.40. If hon. Members who want to speak will confine themselves to just under four minutes apiece, they will all get in.
Mr Steve Reed (Croydon North) (Lab)
The proposal to cut further education funding for 18-year-olds disproportionately will have a major impact on disadvantaged young people in Croydon North. I spent some time last week at Croydon college so that I could better understand the impact of the decision, and was alarmed to learn that the college believes that it will be the worst-hit general further education institution in the country if the cuts are imposed as the Government intend.
Many incorrect assumptions underlie the Government’s decision. The assumption that 18-year-olds require fewer taught hours is simply wrong. At Croydon college, as at many other FE colleges, students with a range of ages are taught together, as my hon. Friend the Member for Stretford and Urmston (Kate Green) described. Eighteen-year-olds cannot be separated out from their classmates and put on to different programmes with fewer hours’ teaching time, so the cuts will affect students of all ages—something that the Government have said they want to avoid. Further, 18-year-old students are often the ones with the most risk of not being in education, employment or training, as a result of failure to achieve in education at an earlier age. They are often returning to make up for past failure and they need additional support, not less, to achieve. The Government have often stated that they want to reduce the number of young people who are not in education, employment or training. Yet the proposal will have the opposite effect.
Croydon North has a higher rate of unemployment than any neighbouring constituency and high levels of poverty and disadvantage. Many of my younger constituents attend Croydon college, trying to better themselves and make themselves more employable, but the cuts are particularly acute for the college. Nationally, 22% of learners in the 16 to 18 group are aged 18, but at Croydon college the figure is 35%; students in that age group are more likely than 16 or 17-year-olds to be from deprived backgrounds or minority ethnic groups, and are the least likely to have achieved level 2 by the time they enter college.
The financial impact on Croydon college will be upwards of £511,000. That is a higher percentage of the college’s total budget than elsewhere because of the higher proportion of students that will be affected. The college informs me that that is the highest percentage reduction in funding for any college in the sector. Given the level of deprivation that many of the students live with, and how hard they are trying to turn their fortunes around, cuts on that scale are a bitter blow that will severely damage our community as a whole. The cut, which comes without consultation, runs contrary to the Government’s policy on raising the participation age and supporting young people to stay longer in education and training, to develop the higher-level skills that the economy needs. That is vital if we want to improve our competitiveness globally.
The young people affected are not, as the Secretary of State imagines, in need only of a short period of study to resit their A-levels. They may, for instance, need a longer programme of study to improve their maths and English so that they can secure a traineeship or make themselves employable. I urge the Minister to reconsider the proposal and to minimise the impact on the most disadvantaged young people by adopting a different funding formula that recognises the needs and aspirations of young people from the most deprived communities, instead of cutting their future off at the knees.
Simon Danczuk (Rochdale) (Lab)
I thank my hon. Friend the Member for Stretford and Urmston (Kate Green) for obtaining an important debate. I confess that I was unaware of the impact of the cuts to funding for 18-year-olds until it was brought to my attention by the principal of Hopwood Hall college in Rochdale, who wrote pointing out that the effect on students in our town will be hugely damaging. Hopwood Hall does a fantastic job, providing young people with vocational skills and enabling them to achieve their educational and employment goals. It also runs an excellent trainer restaurant, where I have eaten—the Riverside restaurant. It is an excellent venue with great food. There is a catering department, which provided the cake for my relatively recent wedding; the hair and beauty salon at the college also provided support—[Interruption]—not for me, but for my wife; I clearly did not require those services.
I am extremely concerned that the good work done by colleges such as Hopwood Hall will be undermined by the cuts. I am told that it is expected that more than 400 students will be hit by the changes, and the college stands to lose some £400,000 in teacher funds. We all know that inequality in society is partly caused by inequality in education, and the funding cut will serve only to widen that inequality. As Derek O’Toole, the college’s excellent principal, has said:
“The majority of learners affected in Greater Manchester will be those from disadvantaged wards.”
That is the reality of the policy. I understand that there are strong financial constraints on the Government, but there must be a fairer way to allocate the funding, so that the deep implications of the policy do not adversely affect communities such as Rochdale.
I have one or two blunt points to make. I am particularly concerned about the Department’s impact assessment, which is clearly faulty, as other hon. Members have pointed out. I find it shocking that the Government contradict their own principles. The proposal seems to undermine completely their goal of reducing the inequality gap. By limiting the potential of students such as those who attend Hopwood Hall college, the Government do more harm than good.
On a personal note, I left school at 16 and I know how important it is for young people to get support to equip them for the world of work. That support was not there for me when I left school in the 1980s, and it was a struggle for me to get the skills and training I needed. We should be determined not to leave students in places such as Rochdale in the same position. We need to support colleges, not cut their funding.
Rushanara Ali (Bethnal Green and Bow) (Lab)
It is a pleasure, Mr Williams, to serve under your chairmanship. I congratulate my hon. Friend the Member for Stretford and Urmston (Kate Green) on securing this important debate, and I welcome the contributions from throughout the Chamber. We are united in our concern about the impact that the decision that the Minister and the Department made just before Christmas will have on 18-year-olds, given the drastic cut in funding for further education colleges. Colleagues from across the Chamber and I want to hear from the Minister, so I will not go through the speeches of individual Members, but I want to pick up some of their points.
As my hon. Friend the Member for Stretford and Urmston highlighted, the funding cut from £4,000 to £3,300 per 18-year-old student will have a massive impact on more than 150,000 young people, particularly in FE colleges. I represent a London constituency and have received representation from the FE college that I attended. There will be a disproportionate impact in London because of the high number of young people who continue their post-16 education in FE colleges and the high number of ethnic minority students. The Government’s belated impact assessment also highlights the disproportionate impact on ethnic minority groups, white people from disadvantaged backgrounds and many other vulnerable students. Those points were well made by hon. Members, including my hon. Friends.
There is particular concern about the consultation process. We are all deeply worried about lack of consultation and the irresponsible and reckless way in which the decision was made. The Minister should know better than to leave FE colleges, which work hard to support millions of young adults with varied life circumstances, high and dry and having to deal with a set of decisions that will cause disruption. I appeal to the Minister to listen to my hon. Friends, and his many hon. Friends, who said that the decision must be rethought. At the very least, we need some breathing room for FE colleges so that there is no disruption in the system, which many, including the Association of Colleges, have said is likely.
There is deep and genuine concern that there will be a disproportionate effect on young people who desperately need a second chance. Almost all hon. Members highlighted that. For various reasons and in various circumstances, as the hon. Member for Romsey and Southampton North (Caroline Nokes) eloquently highlighted, young people, including young women who are high achievers, may suffer crises—bereavement is an example—and may need an additional year. It is unbelievable that the Government are so short-sighted that such circumstances are not taken into account, because those young people may end up with the other 900,000 who are not in education, employment or training. Surely we should not increase the number of people in that category. Surely the Minister wants young people to stay in the education system and take vocational courses, so that they can service our economy, which needs the technical skills and high-quality apprenticeship schemes that FE colleges are increasingly delivering.
My hon. Friend the Member for Rochdale (Simon Danczuk) told us that his local students rose to the occasion and serviced his wedding preparations. We are direct beneficiaries of educating young people, and many of us who attended FE colleges recognise the significant contribution that they make to the life chances of people from a variety of backgrounds.
Dr Julian Lewis (New Forest East) (Con)
The principal of Brockenhurst college in my constituency has made similar points about people who have gone on to serve the nation—for example, in the police and armed forces. Does the hon. Lady have a policy on the point that was made so clearly by the hon. Member for Cambridge (Dr Huppert) about the differentiated VAT regimes for sixth-form colleges and other schools? If so, what is that policy, and will she urge it on the Minister?
Rushanara Ali
The issue has been discussed; my hon. Friend the Member for Stretford and Urmston mentioned it, and hon. Members have raised concerns about it. The question today is for the Government, and the hon. Member for New Forest East (Dr Lewis) should focus on getting a response from them. We will certainly look at the issues and at how we respond when we form a Government. There are deep concerns about the issue, and we need to look at how to ensure parity across providers. He should focus his question at the Minister. Too often, the Government throw questions back at the Opposition as though we were still in government. The Government are in their final year and they should take responsibility for issues, particularly today. Perhaps the Minister will respond to the question.
I want to highlight the issue of the education maintenance allowance, which played a big role in reducing the number of young people not in education, employment or training. Reducing the allowance will risk adding to the number of people in that category, which surely cannot be acceptable for anyone, including the Government.
I conclude by reiterating points that colleagues in all parts of the Chamber have mentioned: the disproportionate impact on those who need a second chance; the pressures on the FE sector at a time when it already faces drastic changes and cuts; and the fact that the FE sector often takes risks with students whom other institutions are not prepared to take, as hon. Friends have said.
The Government’s decision and their belated impact assessment, which acknowledges the disproportionate impact on ethnic minority groups, suggest that the Minister is, at best, indifferent to the impact on some groups. Considering the high number of black Caribbean boys and white working-class boys who are affected, it is shocking that the Minister is not taking the issue seriously. I hope that he will do so today, because we cannot tolerate the creation of greater inequality and social immobility. The Government’s policy is damaging for young people in general and particularly those who need a second chance, and it is damaging for our economy, our society and our ambition of promoting equality of opportunity and social mobility. It is a complete contradiction of the Government’s rhetoric. I hope that the Minister will think again and consider the issues that hon. Members have raised.
The Minister for Skills and Enterprise (Matthew Hancock)
It is a great pleasure, Mr Williams, to respond, under your chairmanship, to a forthright debate. I am grateful for the opportunity to set out the context and some of the issues surrounding our decision, which was not an easy one to take. Many of the points raised were not quite accurate, so I hope to provide some reassurance on them, and on how we will deal with the impact on individual colleges, not least because several hon. Members raised the concerns of colleges that are particularly hard hit; I am looking at the hon. Member for Croydon North (Mr Reed). At the moment, we are confirming with colleges the individual allocations.
Before we get to the meat of the debate, let me say that the process for making the decision was completely in line with the process for making such funding decisions under this Government and the previous Government. Say that following the overall allocation in a spending round, it becomes clear that savings have to be made in the Department for Education, outside the ring fence for education for 5 to 16-year-olds; the overall funding policy for the following academic year should be set out before Christmas, in December, in a letter from the Education Funding Agency. That is the normal way of doing things. Someone implied a criticism of the EFA, but there should be absolutely no criticism of the EFA over this, because such decisions rightly rest with Ministers. In February, normally, we come up with the allocations for individual colleges. That is the process we are going through: we are looking at the impact on colleges. We have estimates of those impacts, but we need confirmation from each college. That is the normal process, followed by the previous Government as well as this one. There has not been a problem in the process, but we can go into the individual decisions.
Nic Dakin
First, earlier information about a cut would have been helpful and welcomed by colleges. Secondly, although the process described by the Minister is accurate, for the first time that I can remember, a decision will affect people already enrolled on courses. If they are on a two-year course, the cut will impact on them and, because of the lagged funding, that is particularly difficult.
Matthew Hancock
I will certainly respond to that point. The irony for those already in education who are affected by this decision is that the funding is being returned to the 2012-13 level that it was at when they enrolled. An important piece of context has not yet been mentioned: the decision, which regrettably had to be made because of pressures on the public finances, changes funding for 18-year-olds back to the 2012-13 level. I understand and appreciate the pressures on the budgets of FE colleges, but in 2012-13, pupils were funded for 450 hours, and we raised that to 540 hours—an increase of 16 and two thirds per cent.—and we are now debating a cut of 17.5%, which is of almost exactly the same order of magnitude. The discussion about the impact on colleges and the conversations with college principals need to happen in the context of the fact that this changes the funding rate per pupil for 18-year-olds back to 2012-13 levels, which was only last year.
Rehman Chishti (Gillingham and Rainham) (Con)
I accept that the Government have done a lot of good work in the FE sector. The Minister says that further discussions will take place with specific colleges. For the record, MidKent college, which will lose £800,000 and have 1,000 students affected, is being told that it will get a cut of 3.4%, and yet there are high levels of deprivation in that area. Will the Minister have discussions with the college to see how things can be taken further?
Matthew Hancock
I will absolutely ensure that that happens. In fact, I will ensure that such discussions take place with all colleges. It is important, however, to set out why we took the decision we did.
We were faced with a cut across Government to make savings to reach our goals on reducing the budget deficit. I need not stress the wider argument about the necessity of reducing the deficit, but life would be easier for a Minister and throughout our country if we did not have a budget deficit of £100 billion, and if we had not had an even bigger deficit three years ago. We all know who is responsible for that. There is tension on the Opposition Benches between those who recognise and acknowledge the need to deal with the problems left by the Labour Government and the others. Not least, I recognise the reasonable approach taken, and the suggestion of alternatives, by the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Rochdale (Simon Danczuk); that is in contrast simply to complaining about things and saying, “Aren’t we in a terrible mess?” It is difficult being a Minister when there is no money left, but we all know whose fault that is. I will not stress that any more.
I care about the individual impact on colleges. For example, I would be delighted to visit Cambridge—I think I have a campaigning visit in the diary. According to our figures, which we are in the middle of confirming with colleges, as a result of the decision, Long Road sixth-form college will have a reduction in funding of 0.7% and Hills Road college of 0.2%. Those figures are to be confirmed with the institutions, but that is the scale in those instances. The impact assessment sets out the effect for types of colleges.
The reason for our decision is partly that it is in tune with other things that we are trying to do, not least raise the participation age. Many people have talked about NEETs, and I bow to no one in my support for FE colleges and their work in reducing the number of NEETs, but the biggest impact comes from the level of education at the age of 16, and from those who are in FE at 16 and 17 and whom we have to keep there. We are raising the participation age up to 18 years, with cross-party agreement, and are insisting that everyone stays in some form of education up to that age. We are focusing the funding on that.
The reasons underpinning the funding decision, therefore, are the decision to return funding for 18-year-olds to last year’s levels; our raising of the participation age; the need to do so much work to ensure that people stay in education at 16 and 17; and the fact that on average—this is not the case for everyone—18-year-olds spend less time on their education, even when it is full-time education. Furthermore, as the impact assessment says—this ought to be recognised in the debate—those who are 18 in education are no more likely to be disadvantaged than anyone else.
Matthew Hancock
I am well versed in the VAT issue and recognise the argument. Removing the VAT anomaly would cost £150 million, which is the same amount that we have had to save through the measure we are debating, so I am afraid that I simply have to plead having no money to deal with it. All I will say is that I fully acknowledge the argument.
A sixth-form or FE college has a private sector designation from the Office for National Statistics that leads to the VAT charge, but it also gives the college much more power over borrowing. On the one hand, a sixth-form or FE college has much more power to manage its finances, but on the other hand, it has to pay VAT. I note that in the past couple of years, there have been two new sixth-form colleges. Yes, there have been new 16-to-19 free schools, but there have also been new sixth-form colleges, so some people have taken the decision, even though they know that they will have to pay VAT, to go down the sixth-form college route, because they get extra flexibility in managing their finances. I completely acknowledge the VAT issue, but there is a flip side to the argument, which is why some people go for paying the VAT, even though they might not need to do so.
Eric Ollerenshaw
The Minister is explaining himself extremely well, but there is a bit I do not get. Why did he make the commitment to colleges that they could have 540 hours, which they then budgeted for, only to take it away, leaving them with a problem?
Matthew Hancock
My life would certainly have been easier had the decisions been taken together, and had that not happened. I am simply putting that forward as an explanation of the context we need to think about when considering the size and scale of the cuts.
We are looking at the individual implications. I am happy to ensure that the EFA and my team talk to any college that is concerned. We need to recognise, however, that the reason for the decision was that savings had to be made across Government. There is also a policy explanation: there is the fit with other things on which there is consensus across the House. I am not looking for adulation over this policy decision; I am looking to explain myself as well as I can. I am happy to talk to colleagues and colleges further, because my goal is to support colleges and education to the best of my ability.
UK Bill of Rights
(10 years, 11 months ago)
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Mr Graham Allen (Nottingham North) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Williams.
A Bill of Rights is not a modern invention. Indeed, next year we celebrate the 800th anniversary of Magna Carta, which was agreed not too far away from here and is the root of so much that then followed. The need to enshrine our basic rights against arbitrary executive power is just as necessary and just as resisted as it was all those centuries ago. It was not until after the English civil war that, in 1689, the expression “Bill of Rights” was first used, in an important statute passed to define the role of the Crown. One hundred years later, it was used not for a separate list but as the beating heart of the constitution of the United States. These days, the expression is used to refer to a document that has some degree of constitutional status and that declares the fundamental rights of all people by virtue of their common humanity. A Bill of Rights is the human engine of our democratic settlements, without which our constitutions, written or not, are just hollow organisational charts.
Those rights are described in different ways: basic, fundamental, inalienable, inherent or natural rights, the rights of man or, in a limited context, constitutional rights. We know that the expression “human rights” was probably first used in Tom Paine’s translation of the French Declaration of the Rights of Man. If I may, I will wish Thomas Paine a happy 277th birthday for tomorrow. He was England’s greatest political philosopher and democratic export, and I dedicate this debate to him.
The United Kingdom added to that rich vein in the 1940s by gifting to the rest of Europe its convention on human rights, to enshrine the inalienable rights that Tom Paine first put into words in 1791. That convention was written by British lawyers and British politicians, and has been adopted by 43 countries and over 800 million people. The United Kingdom then ratified the convention in 1951 and with the introduction of the Human Rights Act 1998, the European convention on human rights was repatriated into UK law, allowing UK citizens to seek redress in UK courts for human rights offences covered by the ECHR.
Of course, that is not the end of the story. As someone involved in this field on the Front Bench in the early 1990s, I can personally testify that the intention was to build on the ECHR and move forward to a British Bill of Rights. However, the Executive power of today is just as anxious as King John to avoid constraint and definition of its power. Our failure to put in place that fundamental of democracy, a separation of powers, means that the Executive have a control of Parliament that even Charles I could only have dreamed about. The Government who should be held to account by citizens are the very body who authorise the rights of those citizens. That contradiction presents its own danger. As Professor Robert Blackburn wisely said:
“The truth is that governments of all persuasions have a vested interest in moulding our constitutional arrangements in a manner that suits their own political, financial, and administrative convenience...Nothing is more dangerous than corrosions of liberty dressed up as constitutional safeguards.”
None the less, in March 2011 the Government established a Commission on a Bill of Rights that would
“investigate the creation of a UK Bill of Rights that incorporates and builds on all our obligations under the European Convention on Human Rights, ensures that these rights continue to be enshrined in UK law, and protects and extend our liberties.”
Sadly, the commission was unable to agree on a way forward. That has allowed the short-termist nature of our daily media and daily politics to wash over and, to some degree, trivialise the rights agenda.
Today, I want to rebalance that, to look past the immediate squabbles and restate why our rights are important, and why we would want to continue to have them written down and ensure that they remain so in future. Anthony Lester, as always, finds the right words. He says that
“the Human Rights Act gives necessary protection to the civil and political rights of everyone, and not only unpopular or vulnerable minorities—the right to life, and freedom from torture or other ill-treatment, to liberty without arbitrary arrest or detention; to freedom of speech, assembly and association, fair trials by independent and impartial courts respecting the presumption of innocence, to personal privacy, home and private property, to education, and to equal treatment without unfair discrimination”.
It takes politicians of very low quality indeed to turn such soaring principles into language that fails to excite voters, although we might have managed that somehow.
In 2002, the results of a Public Agenda national opinion poll in the United States showed that 67% of those interviewed felt that it was “absolutely essential” for ordinary Americans to have a detailed knowledge of their constitutional rights and freedoms, and 90% agreed that, after the 9/11 attacks,
“it’s more important than ever to know what our Constitution stands for”.
The report concluded that although the actual text of the constitution might be imperfectly captured in people’s heads,
“its principles and values are alive and well in their hearts.”
In America, citizens have a clear and steadfast understanding of where their rights originate—their Bill of Rights within a written constitution.
What about Britain? What would a poll of that nature look like here in the UK today? Would there be a wide consensus that a UK Bill of Rights would provide a baseline of common values to which the public could refer? A survey quoted by King’s college, London, in “Codifying—or not codifying—the United Kingdom constitution: The existing constitution”, a report written for the Political and Constitutional Reform Committee, of which I am honoured to be the Chair, seems to support the notion that increasingly British public opinion is in favour of a UK Bill of Rights. It showed that most people agreed strongly or slightly with the view that
“Britain needs a Bill of Rights to protect the liberty of the individual”.
The figure rose from 71% in 2000 to 80% in 2010, so there is evidently a high and rising level of support for the idea of a Bill of Rights.
There is still work to be done, however, and there are issues that still need to be explored. We need to take the word out, past the fog of media short-termism and the excuse making and opportunism around particular aspects of rights in general. We need to assess, for example, whether our rights could be better articulated—perhaps the Minister will have something to say on that issue—as they are currently spread far and wide, in a host of different places.
We could learn from the United States. It is well known that Americans’ sense of civic duty goes hand in hand with being American. It is so much easier to fulfil that civic duty when someone has a clear sense of what is expected of them—of what they belong to and of who they are. Here in the United Kingdom, many of our responsibilities and duties already exist in statute or are woven into our social and moral fabric, and into common practice. A UK Bill of Rights—an extension of the Human Rights Act—would reflect their burgeoning importance in our democracy.
Bills of Rights are not just legal and constitutional documents; they provide ownership and promote citizenship. We are a society in constant flux, and a Bill of Rights would help to form a common bond across our increasingly mobile and diverse society by emphasising our togetherness, what unites us and our shared political values. As part of a post-Scottish referendum settlement, a Bill of Rights could be an important unifying force across all the nations of our Union. I believe that a Bill of Rights would also help to reinvigorate our democracy. A Bill of Rights would have a symbolic and iconic role, much like the one across the Atlantic. Endowing citizens with human rights as their birthright not only protects the rights of individuals, important though that is, but has the symbolic role of highlighting the fundamental principles of a democracy and signifying what a country such as ours stands for.
As well as returning rights to individuals, a Bill of Rights would be part of Government returning our democracy to those individuals. Again, as Thomas Paine said in “Rights of Man,”
“a government without a constitution is a power without right.”
Codifying our rights would help the British political system to be founded not on judicial archaeology by insiders but on a legitimate, open and transparent basis understandable to all. The history of Executive resistance to external rules and definitions shows the fragility of human rights law. We have human rights law at the moment, but we need to look after it, let alone extend it. History also shows the importance of entrenching democratic principles not with the passing whim of whomever happens to form a Government but in an enduring and overarching written settlement of our democracy—a written constitution.
I ask the Minister to join me and many others in restarting this debate. A UK Bill of Rights is the next step forward in securing the constitutional thinking that Magna Carta prompted nearly 800 years ago. Magna Carta should not be a relic, barely used, encased and on display; it should encourage further evolution, growth and strength within our democracy. We may go looking for a British Bill of Rights and yet find our soul and our liberty.
The Minister of State, Ministry of Justice (Simon Hughes)
Bore da, Mr Williams. It is a pleasure to serve under your chairmanship. I am grateful to the hon. Member for Nottingham North (Mr Allen) for bringing a UK Bill of Rights back on to our agenda. He and I have often worked together, and he is greatly respected across the House not just personally but for his chairing of the Political and Constitutional Reform Committee. I am pleased that he has secured this debate. He might expect me to say that, as I am a human rights lawyer by training—I did a traineeship and worked for a while at the Council of Europe in Strasbourg dealing with human rights applications from this country. I am delighted to have the privilege of responding to this debate, which is home territory for me. The one thing I had not realised is that tomorrow is the anniversary of Thomas Paine’s birth, so I join the hon. Gentleman in recognising the timeliness of today’s debate. My hon. Friend the Member for Lewes (Norman Baker) will no doubt celebrate tomorrow, because that is where Thomas Paine did his writing.
On 15 June 2015, we celebrate the 800th anniversary of Magna Carta, and plans are in hand for great celebrations, and so they should be. Magna Carta was the first general statement of rights in England, and three clauses remain in force. Clause 1 confirms the liberties of the Church of England and of all freemen of the realm. Clause 9 confirms the liberties of the City of London and other cities, towns and ports. And Clause 29 reads:
“No Freeman shall be taken or imprisoned, or be disseised”—
which means unlawfully dispossessed—
“of his Freehold, or Liberties, or free Customs, or be outlawed, or exiled, or any other wise destroyed; nor will We not pass upon him, nor condemn him, but by lawful judgment of his Peers, or by the Law of the Land. We will sell to no man, we will not deny or defer to any man either Justice or Right.”
That principle drives the hon. Member for Nottingham North, and it should drive us all in a country in which we do not have a codified constitution. We have written documents, but they are not put together in one place.
When people talk about the Bill of Rights, the one that most comes to mind—the hon. Gentleman referred to this—is the Bill of Rights enacted in 1689 after William and Mary were invited to take the throne after the end of the reign of James II. Of that legislation, the declaration of right remains. It is the only formal Bill of Rights that this country has ever had, but the key elements are as relevant today as they were then: that Parliament should be frequently summoned and that there should be free elections; that Members and peers should be able to speak and act freely in Parliament; that no army should be raised in peacetime and that no taxes be levied without the authority of Parliament; that laws should not be dispensed with or suspended without the consent of Parliament; and that
“excessive bail ought not to be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted”.
We do not have laws in this country with a constitutional status above other laws, and Parliament is free to repeal any legislation that it wants to repeal, but if one looks back across the sweep of history, Magna Carta and the Bill of Rights are the two laws that people regard as the bedrock of our democratic country’s civilisation today.
When preparing for this debate, I not only considered the recent Commission on a Bill of Rights, which I will address in a second, but looked at which other countries have Bills of Rights. I was surprised to discover that fewer countries than I expected have something called a Bill of Rights, although many have written constitutions. Obviously, Thomas Paine translated from the French “Declaration of the Rights of Man and of the Citizen,” which was part of the French constitution. In addition to the UK’s Bill of Rights, the first 10 amendments of the US constitution are called the Bill of Rights. The 1922 constitution of the Irish Free State adopted a Bill of Rights. Canada passed a Bill of Rights in 1960, although that was updated with something called a charter of rights and freedoms. New Zealand passed a Bill of Rights Act in 1990, and the new South African constitution of 1996 contains a Bill of Rights. In terms of specific provisions, those are the common law traditions.
I am pleased that the hon. Gentleman did not forget to say what we are talking about. I am often frustrated when people debate Bills of Rights or human rights and do not say what those rights are. He cited some of the rights, but I will state the convention rights that, at the moment, are the nearest we have to a Bill of Rights. The Human Rights Act 1998 allows people to exercise those rights in our courts, and I think they matter hugely to the people of Nottingham, Southwark, Hampshire, east London and elsewhere, and we should get the message out loud and clear. We do not do enough to ensure that people understand that they have the following rights: the right to life and the abolition of the death penalty; the prohibition of torture and inhuman or degrading treatment or punishment; prohibition of slavery and forced labour; the right to liberty and security of the person; the right to a fair trial; prohibition of punishment without law; the right to respect for private and family life; the right to freedom of thought, conscience and religion; the right to freedom of expression; the right to freedom of assembly and association; the right for men and women to marry and found a family; the right to peaceful enjoyment of personal property; the right to education; the right to free elections; and the prohibition of discrimination. There is no citizen or resident of this country who would not sign up to those rights. Between us we clearly have not done enough to get out the message on what we are talking about. There is often huge criticism of human rights, yet if people are reminded of what those rights are about, they say, “We want some of that, please.”
At the last general election, the two parties now in government made different manifesto commitments on human rights. The Conservative party manifesto stated:
“To protect our freedoms from state encroachment and encourage greater social responsibility, we will replace the Human Rights Act with a UK Bill of Rights.”
The Liberal Democrat manifesto stated:
“We will…ensure that everyone has the same protections under the law by protecting the Human Rights Act.”
When the coalition was formed, there had to be a negotiation and as the hon. Member for Nottingham North rightly alluded to, we agreed in the coalition agreement to deal with it. The coalition agreement is clear:
“We will establish a Commission to investigate the creation of a British Bill of Rights that incorporates and builds on all our obligations under the European Convention on Human Rights”—
I stress that point—
“ensures that these rights continue to be enshrined in British law, and protects and extends British liberties. We will seek to promote a better understanding of the true scope of these obligations and liberties.”
That was an attempt to reconcile two different proposals for how we move forward from two different parties, but I think it was a perfectly proper next step. I repeat the thanks to the commission for the work it started and has completed, and for the report it has given to the Prime Minister and Deputy Prime Minister. It has made a significant contribution to the debate and I refer those who are interested to the commission’s report, “A UK Bill of Rights? The Choice Before Us” which was published just over a year ago, in December 2012, and is available. It is worth a read.
The commission did about a year and a half of work to produce its final report. It was thoughtful and detailed, and I remind the Chamber of its key conclusions. A majority of the commission concluded that there is a strong argument in favour of a UK Bill of Rights. However, that was on the basis that any such Bill would need to incorporate and build on all the UK’s existing obligations under the European convention on human rights and that it would provide no less protection than is currently contained in the Human Rights Act and the devolution settlements. That was in line with the terms of reference that the commission was given.
The majority of the commission saw the lack of public ownership of the Human Rights Act and the European convention on human rights as the most compelling reason in favour of a new Bill of Rights. That was exactly one of the themes in the speech made by the hon. Gentleman; the public do not seem to own the constitutional settlement in our country and do not understand that it is theirs and for them. It should be for the people, not for the Government. Some of those in the majority favouring a Bill of Rights felt that a Bill could usefully define the scope of some rights more clearly and adjust the balance of those rights.
Two commissioners dissented from the majority view. They concluded that neither the commission’s two consultations nor the commission’s own deliberations had identified any real shortcomings, either in the Human Rights Act or in the way in which it is applied by the courts. They also pointed to an overall lack of public support for a Bill of Rights in the responses received to the two consultations that the commission held. They were concerned that any move to a UK Bill of Rights would lessen the rights protection that is currently available. They were also concerned that developing such a Bill of Rights would be the first step on the road to the United Kingdom withdrawing from the European convention on human rights.
With two dissenters, but a much larger majority, the commission could not reach agreement on all its conclusions, and therefore, it put back to the Government issues and places that they should consider for future action. All commissioners agreed that any debate on a UK Bill of Rights had to be fully alive to the sensitive issues of devolution—you will appreciate that as a Plaid Chairman, Mr Williams, as I do very clearly, as someone with Welsh, Scottish and English blood—and the current state of devolution settlements, particularly with the referendum in Scotland later this year, means that we should wait until we know what the outcome of that is. Starting to talk about UK Bills of Rights when we do not know the future of the UK would be unwise. Of course, the Government are fully committed to encouraging people in Scotland to vote in favour of staying in the United Kingdom and I add my small voice to that plea.
Human rights are intricately woven into the existing devolution settlements. Debates are ongoing, including in Northern Ireland, where there has been a huge debate on human rights issues, and in Wales and Scotland, so doing anything now would not be appropriate. We are not far from being on the other side of the referendum decision, and therefore, the hon. Gentleman’s request that we put the issue back on the agenda is perfectly timely. We have the revolution—sorry, devolution, or independence referendum in September. We might have a revolution some time, but that is not in my brief and is not planned anywhere, as far as I know. We then have the Magna Carta celebrations next year, so the debate is timely, and I am grateful that it is, as it were, the trailer for that.
It is also important to note that the commission’s findings revealed wide differences of opinion in different parts of the UK. Many respondents from Scotland, Wales and Northern Ireland argued that there was little or no call for a UK Bill of Rights. The commission’s final report says:
“As a matter purely of practicality all of us believe that, while we would not want to see an inhibition on further discussion…it would be essential to await the outcome of the referendum”—
in Scotland—
“before moving towards final decisions on the creation of a UK Bill of Rights for the obvious reason that it will only be after the referendum that the future composition of the UK will be known.”
The Government have publicly acknowledged the diligent way in which the commission discharged its terms of reference. They have thanked it and I repeat those thanks. The Government have publicly acknowledged that they agree with the conclusion that the time is not right to proceed with a Bill of Rights or changes to the current legislative framework for human rights, for the reasons set out by the commission.
We have agreed, in the context of the coalition agreement, that the obligations under the European convention on human rights will continue to be enshrined in British law. Whatever the different party views and individual views, that is the position agreed across Government and it will not change during this Parliament. Although political parties have expressed views on policy directions that they may want to consider in the future, the coalition agreement does not set out any plans for major changes to the human rights framework before the election. That may be disappointing, but it gives the hon. Gentleman, his party, his Committee, my party and other parties the opportunity to warm up the debate. I can trail the fact that at our party conference in York next month we will be debating these very issues, and I am sure that the Conservative party will be doing so soon, because a document is apparently in preparation. The Labour party will certainly have the matter on its agenda too. Therefore it will not go away and nor should it. I hope that as a result we have the opportunity to reach the British public with these issues.
Let me end by turning to a little-remarked aspect of the commission’s terms of reference. The commission was invited to
“consider ways to promote a better understanding of the true scope of these obligations and liberties”
arising from the European convention. In chapter 10 of its final report, it noted that few respondents to its consultations had made submissions on that aspect of its terms of reference. As for discharging that part of its remit, the commission noted that its major contribution was the publication of its report. It hoped that putting the report before the public would get the debate going and encourage people to respond. The report sets out in some detail the background and history of our human rights framework, to promote an understanding of the context for the current human rights debate.
However, the commission also noted with disappointment —I echo this loudly—that the issues in the debate
“are often conveyed in polemical and sometimes inaccurate terms.”
I believe that that is unarguable. Colleagues will all have read much—bad things and possibly some good things—about human rights, but media reporting is often blighted by myths. I call on the public to look not at the headlines in the tabloid press about what human rights mean, but at the judgments of the courts, the articles of the convention and the contents of this debate. I hope that our debate has helped to make people look at the real issues and the real benefit of human rights and not the froth and the politics. Misleading and mischievous headlines serve only to obscure the good that human rights protection can do.
Human rights are not about bowing down to frivolous demands. They are about common-sense decisions affecting people’s rights when coming into contact with the power of the state. I share the hon. Gentleman’s view that we need to strengthen the power of the citizen and the power of the legislature against the Executive, and the Government share that view too.
If we can look beyond the sometimes skewed perceptions, we see that the Human Rights Act is a measured piece of legislation when understood and used properly. It can be a force for good. It brought a lady suffering from Alzheimer’s disease who had been moved to a care home far from her family back closer to them, so that they could continue to visit and care for her. It was instrumental in returning a young man with autism and severe learning difficulties to his father after their local authority decided to keep him in respite care for a year against his father’s wishes.
Those are the issues that matter and that motivate the hon. Gentleman, me and other Ministers in the Government, so I am grateful that he has brought the debate to the forefront of our minds. I hope that I have conveyed how important the Government believe it is that human rights remain a foundation stone in our legislative framework. I do not think, and the Government do not think, that we should take any steps that lessen existing protections or that move us from the Government’s agreed position, set out in the coalition agreement,
“that these rights continue to be enshrined in British law”.
This is not the end of the development that started with Magna Carta and continued through the Bill of Rights. The hon. Gentleman must, with his Committee, continue to press the issue. I will do so inside Government and I hope that Government will continue to uphold these rights and ensure that we are seen as the country in the world that stands for them most clearly and where they can be exercised most specifically by the public.
That is the Government’s case in response to the hon. Gentleman’s very timely debate. Diolch yn fawr, Mr Williams.
First Capital Connect (Hertford Loop)
(10 years, 11 months ago)
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Nick de Bois (Enfield North) (Con)
It is a pleasure to serve under your chairmanship for what I believe is the first time, Dr McCrea. I am delighted to see so many colleagues here. I think that we have all linked up on the First Capital Connect line, which shows how integrated we are, and how integrated we would like our transport to be.
Many of us in this place often focus, understandably, on the important political policy shifts that often divide us, despite the fact that sometimes we have common goals and desired outcomes. Those political policy shifts understandably dominate the political agenda, and of course have a significant impact on our constituents, but although they may capture our imaginations and dominate most of our time, this debate is, I suggest, on one of the most pressing issues facing hard-working constituents who commute to work.
It is perhaps worth bearing in mind that a typical commuter from Gordon Hill in my constituency to Moorgate will spend approximately 230 hours a year on a First Capital Connect train, if all runs well.
Mr Charles Walker (Broxbourne) (Con)
If the trains are not running well, as is often the case, they will spend another 230 hours waiting for the train to arrive.
Nick de Bois
My hon. Friend anticipates me neatly. That 230 hours a year is equivalent to about 10 days—or, if we are more realistic, 20 daylight days—which, over a working life of 40 years, is a year spent on a train. A commuter from my constituency will pay £1,560 annually for the privilege. Is it any wonder that our constituents rightly consider it a major issue? After all, it is a question not of how much of their time is spent travelling to and from work, but of their quality of life. If the daily commute does not go well, it can affect the whole working day—our punctuality, our reputation at work and, let us face it, our mood and our whole working environment for the day.
The odds are not good of having a pleasant experience, even if punctuality is not an issue. At average peak times, commuters on most suburban lines face tired rolling stock with precarious heating systems or, in summer, carriages that feel like mobile greenhouses. They have a one in three, possibly a one in four, chance of getting a seat, yet they pay the same fare as their luckier neighbours. Often, to pick up the point made by my hon. Friend the Member for Broxbourne (Mr Walker), my constituents are undertaking only the first part of a two-part journey, as they will then embark on the tube.
That year of our lives spent commuting is probably, in reality, more like two, which is why the quality and reliability of our franchise operators, and Network Rail’s maintenance of, and investment in, infrastructure, is one of the big issues facing my constituents. That is reflected to me on Twitter and Facebook in characteristically blunt terms.
Mr Walker
My hon. Friend will be aware of the brief put out by First Capital Connect, which is almost beyond parody. It includes 10 tweets from customers congratulating the rail service on its wonderful performance. I know that FCC has many fabulous staff members—Sue and Jim in the ticket office in Cuffley are two of the most fabulous public servants I know of—but frankly, my inbox for the past six months has been full of complaint after complaint about service that has been substandard too often, for too long.
Nick de Bois
My hon. Friend’s point would be well backed up if we added up the number of tweets that are, shall we say, less generous. In fairness—I will come to this later—FCC does at least try to confront some of the issues raised on Twitter during some peak times.
Let me set out for the Minister what the problem is, the responses from FCC and Network Rail, and my analysis and that of some of my constituents. I will not be able to cover all the issues, but I know that colleagues will mention problems common to all of us, and certainly to my constituents. I will conclude by sharing views on how the future franchise should secure commitments from operators, and why public satisfaction should be a consideration when awarding or extending franchises—a measure for which my hon. Friend the Member for Stevenage (Stephen McPartland) was an early champion.
For clarity, what is the Hertford loop? It is a line that leaves the east coast main line at Langley South junction, just south of Stevenage—why it is called the Langley junction baffles me—and passes through the stations of Watton-at-Stone and Hertford North, represented here by my hon. Friend the Member for Hertford and Stortford (Mr Prisk); Cuffley, represented by my hon. Friend the Member for Broxbourne; Crews Hill, Gordon Hill and Enfield Chase in my constituency; and Grange Park, Winchmore Hill, Palmers Green and Bowes Park in the constituency of my neighbour and hon. Friend the Member for Enfield, Southgate (Mr Burrowes). However, what is most significant in this debate and draws wider interest, including that of my hon. Friend the Member for Stevenage, is the fact that the Hertford loop is also a diversion route for the main line when necessary. Thereby hangs a tale.
Turning to the operational shortcomings, my neighbour and hon. Friend the Member for Enfield, Southgate, and I have had considerable representations from constituents served by FCC; he will, I am sure, speak for his constituents and their experiences further down the line. There has been a severe and sudden drop in service levels, most noticeably since late August 2013. The situation remains unchanged. In particular, the pre- and post-Christmas periods proved utterly unacceptable. At that point, I pressed FCC for a meeting to represent my constituents’ views and to try to learn what plans were afoot to mitigate the operational failings. Unfortunately, it took until 6 January to get a meeting with FCC, along with my hon. Friends the Members for Stevenage and for Enfield, Southgate. I am pleased to say that Network Rail also attended.
Mr David Burrowes (Enfield, Southgate) (Con)
My hon. Friend is making a strong case for his constituents. I understand from FCC that during the three-month period leading up to Christmas, on 83% of occasions, it did not meet its target for punctuality. He is someone with great experience in business. What would happen to him if he did not meet his core business target on 83% of occasions?
Nick de Bois
I would have faced the prospect of going out of business. My hon. Friend touches on accountability, which I will discuss. One cannot miss targets of such gravity and expect no consequences. In the case of business, it is quite likely that those consequences would be lasting and permanent.
After the meeting with FCC, the level of service degenerated to a point when on a particularly wet and windy day, constituents were faced with a choice between walking to Enfield Town station or, as some let me know, returning home to grab bicycles to get to work, because the prospect of the FCC service getting them there was nil. The Minister might appreciate the situation better if I record the fact that between 2 December and 21 December 2013, the following peak-time issues arose.
On 2 December, there was an 85-minute delay between Enfield Chase and Essex Road as a result of signalling problems. On 5 and 6 December—two consecutive days—tracks contaminated by leaves, which I accept is a serious problem, and signalling faults left the track unusable for considerable amounts of time during peak hours while FCC tried to clean the tracks. On 12 December, there were no trains whatever during the morning rush hour due to a power supply problem. The very next day, 13 December, urgent track repairs at Finsbury Park caused evening peak-time delays and cancellations, followed by late arrivals on 16 December.
On the very next day, 17 December, signal failure on the east coast main line resulted in diversions through the Hertford loop, resulting in cancelled trains for my constituents, period. That is when they resorted to bicycles. On 21 December, staff shortages meant that there were cancellations and delays, because with the Christmas holidays approaching, there was insufficient cover available to maintain the train service.
The passenger headline surveys show one story, but if we dig into the responses on commuter services in the Passenger Focus survey, they show that for punctuality and reliability the figure once peaked at 80% and then reached a new low of 58%, with a rise in autumn 2013 to 68%—still a one in three failure rate.
On top of all that, there is evidence of poor communication with passengers at a time when information is the most valuable currency to a commuter. One constituent summed up what many felt when he wrote to FCC after abandoning any attempts to get to central London:
“Another FCC communications disaster
I have just returned home after an abortive attempt to travel by train from Gordon Hill to central London. Apparently a signal failure had disrupted services, but why, oh why”,
he pleaded to First Capital Connect,
“is no information forthcoming? What I want to know is: why, in this age of technology, do the computerised departure boards on the platform state that trains are ‘on time’ when it is patently not the case?”
Can hon. Members think of anything more irritating as people are going to work? My constituent continues:
“Station staff have to resort to bits of paper sellotaped to the Oyster card reader to let people know that there are delays.
Why”,
he pleaded,
“do announcements over the public address system stating that the signal failure is ‘now fixed’ give no indication of when there might be a train?
Why was the booking office clerk, who was as frustrated as the would-be passengers, unable to obtain any service information despite numerous ’phone calls to the operations dept?”
Mr Charles Walker
One of the great frustrations at Cuffley is that the train timetable board will say that the train is delayed by two minutes, four minutes, six minutes, 10 minutes, 12 minutes, back to 10 minutes, and then up to 14 minutes, and finally it will say that it is cancelled. It is absolute nonsense if the company cannot even indicate to passengers when their train will arrive, and how late it will be.
Nick de Bois
My hon. Friend strikes the right tone and makes a good point. Even in dire circumstances, passengers accept that things go wrong, but not knowing what is happening and what can be expected drives the frustration that they feel. Is it any wonder that the Passenger Focus survey reports said that only 43% were happy with how the company dealt with delays? That, incidentally, was an increase from a new low the previous year of 33%. It is not acceptable. Tragically—that is overstating it; poignantly, perhaps—the gentleman who wrote that e-mail of complaint is still waiting for a reply.
I hope that the record will show that the patience and good humour of my constituents was tested beyond all reasonable limits. As a regular commuter, I share their frustration, but I have the privilege of being able to come to the House to express that deep sense of frustration to both First Capital Connect and Network Rail on their behalf. I also promised many of them that I would share their experience with Ministers at the highest possible level.
What do these fare-paying passengers want? Above all, they want a service operator that is fit for purpose, that represents reliability and safety. Passengers do understand that problems arise and that sometimes delays and even cancellations are unavoidable, but delays and cancellations at this level and over a long and sustained period rightly prompt the question: are FCC and its parent company fit for purpose and deserving of a new franchise?
In fairness to FCC, in its letter to me of 24 January, it acknowledges the following:
“Over the past year the performance has dropped significantly and is far below what we aim to achieve for our customers on this route.”
FCC rightly points to the combined responsibility for the service failures between FCC and Network Rail, citing a split of 23% and 64% respectively. Other operators on the route are responsible for the remainder of the delays.
I am sure that my constituents will be pleased to learn the following:
“Major programmes of track, power supply, signalling and overhead line works are underway”
to address the majority of problems. In addition, extensive vegetation removal is taking place near the tracks to mitigate the effects of leaf falls and prevent them bringing the system to a halt again. However, passengers feel that there is a distinct lack of accountability to passengers for FCC. It accepts that it is accountable to passengers, but in its letter to me, it confuses accountability with communication of service difficulties, citing its Twitter service as an example of accountability. It is true that passengers are quick to let FCC know what they think of the service on social media, and in fairness I pay tribute to FCC’s Twitter team, who always seem responsive and provide information when they have it, but that is no replacement for accountability.
I am a free marketeer. I believe that my record will bear testimony to that and will stand scrutiny. I believe that choice lies at the heart of successful free market principles. My constituents’ belief that there is a lack of accountability for First Capital Connect’s service is underpinned by the lack of real choice in how to get to work, and their lack of real influence over, or say in, who should be awarded the franchise. Is it not time to introduce an obligation for passenger satisfaction to be included in any new franchise agreements, so that the passenger experience becomes a priority and not an afterthought?
Stephen McPartland (Stevenage) (Con)
I raised this issue in a debate back in 2011, and the then Transport Minister said that it was under consideration, so it would be interesting if this Minister was able to give us an update on what has happened in those two years.
Nick de Bois
I am hopeful that that is exactly the sort of point that we will be able to explore with the Minister in this debate.
Is it not fair that, as in any commercial arrangement, if standards fall during the lifetime of what will ultimately be a very long franchise, passenger power should allow a review of the franchise, with the possibility of notice being given if service levels fall to a predetermined unacceptable level? I have signed many contracts in a lifetime of business and I know fundamentally that all those contracts will survive only if we maintain the right level of service for the customer for whom we are fulfilling the contract. The length of a contract should never be seen as an opportunity to have a blank cheque, but the only way to ensure that is to introduce greater accountability.
In all this, where is the voice of the customer? The voice of the customer does not seem to register significantly on the train operator’s radar. That is why we are here today acting on behalf of—giving voice to—the customer.
Mr Walker
My hon. Friend has been very generous. When a train is delayed at Cuffley, customers can fill out forms and get their money back. I think that is nonsense, because people are busy. What should happen is that if people have a season ticket or a monthly travelcard, when they renew it at the end of the month or the end of the year, they should receive a discount for the following month or the following year—perhaps a 5% or 10% discount. That is true accountability and recognition that the rail company is a service provider to our constituents.
Nick de Bois
My hon. Friend again makes a point brilliantly and superbly. Let us face it: technology should not bar that. I have often seen, much to my surprise, a refund on my Oyster card. I am often not sure why the Mayor of London is being so generous in giving me that money back, but I have seen it. It is a technology transfer; it works. With thousands of commuters travelling every day, the introduction of a system like that would, for the first time, truly represent the value of the considerable buying power that these passengers should have. It is interesting to note that on every pound spent by the fare-paying passenger, FCC sees a net return of 3%—a 3% net profit. That would not be unreasonable if service standards were maintained at the highest level. Fares have increased substantially, but customers are not benefiting from real choice. Let us at least give them real influence.
The question of accountability is not only one for FCC and its customers. What of the relationship between FCC and Network Rail, from which FCC purchases track access? That accounts for 48p in every pound that the customer spends. Network Rail does not have accountability to passengers, but it acts as a supplier to rail operating companies such as FCC. What compensation do operators receive from Network Rail for service failure, and if such an arrangement exists, what are the criteria for receiving such compensation, and how is it accounted for? If such an arrangement does not exist, surely it should. Without such a system, I suggest that there is no accountability—perhaps not even commercial accountability—between the provider and the customer. Why should not compensation be passed down to passengers through the excellent system that my hon. Friend the Member for Broxbourne has advocated?
Today has been about not politics but fairness to long-suffering commuters. The previous Government had a record of failing to invest in our local rail infrastructure, and we are having to catch up quickly. The patience of my constituents is being sorely tested, and notwithstanding the work that is taking place, I see no immediate relief to the problems that my constituents face this winter and spring. Will the Minister impress on FCC and Network Rail that the service must improve, and quickly? Will he respond to the idea, set out earlier in this Parliament by my hon. Friend the Member for Stevenage, that new franchise agreements should include passenger satisfaction, so that passenger experience might finally become the priority?
Stephen McPartland (Stevenage) (Con)
I congratulate my hon. Friend the Member for Enfield North (Nick de Bois) on securing this valuable debate on a subject that is incredibly important to our constituents.
The Hertford loop line effectively starts at Stevenage, a station with 4.2 million passenger movements a year on a line running through prime commuter belt. To put that in context, Leeds station has some 4 million passenger movements a year. We are talking about incredibly busy stations, and lines that deal with millions of people. My hon. Friend spoke of a day on which his constituents were forced to get on their bikes, which meant that tens of thousands of people had no way of getting to work.
Two train operating companies serve Stevenage: First Capital Connect and East Coast. Stevenage is the junction between the east coast main line and FCC services. One of the worst moments for a passenger is when they are told that they are being diverted via the Hertford loop line, because it adds 25 minutes to the journey. Everybody’s heart sinks, because they know that there will be a queue of East Coast trains in front of the FCC trains. In addition to the delay caused by the diversion, all those trains will arrive at Finsbury Park and King’s Cross at exactly the same time. This morning, for instance, there was a problem at Hitchin—the points failed, I believe—and I was delayed for about 35 minutes. When we got to King’s Cross, we all sat outside the station as East Coast trains came firing in and took all the berths. After passengers have been delayed for more than 30 minutes, they are entitled to receive compensation, and my constituents often wonder whether there is a conspiracy to give the long-distance trains priority so that the operating companies do not have to pay passengers large amounts of money.
Mr Mark Prisk (Hertford and Stortford) (Con)
Perhaps I can add to the sense of misery. My constituents stand in Hertford station and watch the trains that my hon. Friend is talking about sail past while their local trains have been cancelled. I understand the misery, and I would like to top it, if I may.
Stephen McPartland
My hon. Friend is welcome to top the misery, because in the most recent Eureka timetable, I was lucky enough to secure an extra 58 East Coast train stops for Stevenage station, so my constituents are often the ones sailing past his. It is also interesting to see how my constituents use the Hertford loop. We often get a fast train at Stevenage, so that we do not have to go on the Hertford loop line, and then we change at Finsbury Park and continue on the Hertford loop line to Liverpool Street. My constituents often get off the train at Finsbury Park only to be told that there are problems, so they have to wait for the next east coast main line or FCC main line service to take them to King’s Cross, where they take the tube to Liverpool Street. That adds a huge amount of time, frustration, anger, bicycles—you name it—to my constituents’ journeys.
There is a real lack of communication. My hon. Friends the Members for Enfield North and for Broxbourne (Mr Walker) have said that some station staff do an amazing job of keeping constituents informed, but sometimes things simply collapse. When my hon. Friends the Members for Enfield North and for Enfield, Southgate (Mr Burrowes) and I attended a meeting with National Rail and FCC, I raised the issue of ticket inspectors. The fastest journey from Stevenage to King’s Cross takes 26 minutes, so a delay of 35 or 40 minutes is considerable.
Mr Charles Walker
The situation can often be terribly unfair on staff. For example, on the third day of delays to services, station staff still have to face angry commuters and bear the full brunt of their anger and frustration in as good a humour as possible. The higher-ups—the suits —remain squirreled away in the train company’s headquarters, rather than coming out to meet their disappointed customers. We need to see greater leadership from the directors of the company; they must not leave it to the poor staff to bear the brunt of commuters’ frustrations.
Stephen McPartland
My hon. Friend makes a good point, and my hon. Friends and I made the same point in the meeting that I have just mentioned. I was pleased that both companies apologised for the service that our constituents received and tried to explain some of the reasons for it. In fairness to FCC staff, many of them do a very good job. I understand that during the recent delays, some of the higher-ups went out to stations—they could not get to work either—and tried to placate customers. We need to see more of that. I often tweet about how good some of the FCC staff are on my journey to work.
One thing that particularly irritates my constituents is when their train is delayed and they ask the ticket inspector what is causing the delay, but the inspector—or payment protection officer, as they are called—does not know. That poor member of staff may get grief along the 12 carriages of the train as he checks tickets. That creates dysfunctionality and reduces the quality of the passenger experience a great deal. FCC needs to do a lot more work on getting information down to staff, to ensure that those on the front line can communicate with passengers.
I commute to Parliament every day, so I use the FCC service at all hours of the day. On a Monday evening, I am often using it at half-past 11, and if I see bus replacement services I begin to cry, because I know that that will add about two hours to my journey home. These issues affect a huge variety of people, including shift workers.
Mr Walker
I do not want to be left out of this. I, too, travel in from Cuffley, which is down the line from Stevenage, and I share my hon. Friend’s frustration. Before we are too mean to our rail provider, however, let us remember that Network Rail is responsible for many of the delays. I do not think that Network Rail has been entirely up front in its communications with my constituents. I endorse the suggestion made by my hon. Friend the Member for Enfield North (Nick de Bois) that Network Rail should pay some compensation to our rail companies, so that they in turn can compensate our constituents.
Stephen McPartland
I agree with my hon. Friends the Members for Broxbourne and for Enfield North. I believe that Network Rail is responsible for about 67% of the delays on the line, while other train operating companies are responsible for some 9%, and FCC about 24%. That is right—they add up to 100%. It is important that Network Rail takes a huge amount of the responsibility.
I know about repayments from my own experience. I buy what is called a carnet that allows travel from Stevenage to King’s Cross via a variety of routes. I could be reimbursed for my journey today, but I will be perfectly honest: I cannot be bothered to fill in the paperwork on a daily basis. I know that thousands of people in Stevenage will not even bother to try to reclaim the cost for today from their season ticket, because it is pointless. It is a waste of a huge amount of energy and time; it would cost more than it is worth. Repayments should be automatic. During some of the worst of the winter storms, First Capital Connect said that tickets would be valid for use the following day. That was a great improvement for some in my constituency, but not for the majority who have season tickets.
The railway system is broken. The previous Government did not invest and co-ordinate in the way we would have hoped, but some problems that we have seen on the line are actually the result of new investment. We understand that one huge delay was the result of a new signalling system being installed and the circuit breaker burning out. The company is trying to improve the signalling system, which must be fully replaced in 18 months, but the amalgamation of the two systems is causing great problems. I raise that issue because the whole line is 40 years old and must be replaced completely in the next five years. One can imagine the horror felt by MPs and constituents who live along the line at the thought of what is coming down the track towards us, or possibly not coming down the track at all. There are huge concerns.
When I met Network Rail and First Capital Connect with my hon. Friends the Members for Enfield, Southgate, and for Enfield North, we asked them what the root causes of the problems were. What really depressed the three of us was the simple fact that there did not seem to be a root cause. There was a variety of problems, one after the other. As they fixed one, they moved on to another. I do not want to bore Members too much, but on the Hertford loop line, they use class 313 carriages, which are old-fashioned London Underground and Overground carriages. As a result, the Hertford loop line is turned off of an evening. One morning, when they tried to turn the electricity on the line back on, it did not work. Perhaps someone had not paid the energy bill. No service was available on the line.
I would like to move on to some of the positives regarding First Capital Connect, because I feel that it is getting a bit of a kicking from Members, even though a lot of the problems—at least two thirds—are the responsibility of Network Rail and are due to how it integrates with First Capital Connect. During the First Capital Connect franchise, more trains have been stopping at Stevenage, so we have gained thousands more seats, many of which I have secured over my past two or three years as an MP. We have had huge improvements to bicycle racks, which have almost doubled in number. That is a big issue in Stevenage. We are the only town in the country with an integrated cycle network. Tens of thousands of us cycle everywhere in town. We have had the platforms resurfaced and we now have 12-carriage trains stopping at the town; the station is secure and we have better waiting rooms; and both the signage and the customer information system have improved.
In another transport debate earlier in this Parliament, I was very pleased to secure more than £578,000 from the Minister at the time, the hon. Member for Lewes (Norman Baker), so if the current Minister is listening, there are a number of things that I would like. That money is being used to upgrade the goods lifts to fully automated passenger lifts. The station has 4.2 million passenger movements, but it was built in the ’60s—we still do not have fully automated passenger lifts, and it is 2014. Thankfully, the work on that is now ongoing. First Capital Connect is doing a good job—its mobility teams help passengers with mobility difficulties up and down the stairs—but the lifts will be a lifeline for the disabled and the most vulnerable in our community. The station is also being refurbished, and bits of it will, I hope, open in the next few months.
There has been a huge range of improvements, but one of the main concerns of my constituents remains the simple fact that we pay only for our journeys. No matter how long the journey takes, the ticket does not entitle us to a seat on the train. It just entitles us to go from Stevenage to London, or to Hertford, Watton-at-Stone, Cuffley or Enfield. We pay for the journey only. As my hon. Friend the Member for Enfield North said, it feels like there are very few ways in which constituents and passengers can get their points heard by the train operating companies because the franchises last for so long. The debate is opportune because the franchise is due for renewal in September this year. Like my hon. Friend, I would dearly love to see a Minister introduce to the franchise a passenger satisfaction obligation to ensure that passengers’ voices are heard, so that if there are problems, they can take direct action.
I am the chairman and co-founder of the Stevenage and Knebworth rail user group, which is why I know so much about class 365 and 313 carriages. I must add that that is not through choice, but because I have had to learn about what happens in our area. Only a week or so ago, First Capital Connect put 40 newly refurbished class 365 trains on our line. The trains are cleaner and have improved. There is a balance between the passenger experience and what happens going forward.
Nick de Bois
I am pleased to hear about the investment in carriages, but I feel it is worth making the point that the 313s that we use on the Hertford loop are not being replaced. It seems like we will always have to use them. We have tired rolling stock, so although I am pleased for my hon. Friend, I hope that he spares a thought for others.
Stephen McPartland
I do spare a thought for my hon. Friend’s constituents. Many of my constituents travel to Hertford and use those carriages when they get to Finsbury Park and other places. The point I was trying to make is that there has been some progress. I think that First Capital Connect is doing a relatively sound job.
Mr Charles Walker
I promise that this will be my final intervention. As my hon. Friend knows, First Capital Connect is full of civilised, approachable people. That is why I am so disappointed that it has tolerated a failing train service for too long. Its people are better than that. I hope that this debate is a call to arms to our rail company to up its game and deliver to its potential.
Stephen McPartland
I completely agree with my hon. Friend. Since just before Christmas, the service has become intolerable. Although it improves on some days, on others it does not. I would like First Capital Connect to see the meetings that we have had and this debate as a means of moving forward, getting to grips with Network Rail and delivering on some of the improvements that it has told Members it will deliver. The way to move the issue forward is to insert into the franchise a passenger satisfaction obligation. That would allow us all to hold train operating companies and Network Rail to account.
Mr David Burrowes (Enfield, Southgate) (Con)
It is a pleasure to follow my hon. Friend the Member for Stevenage (Stephen McPartland). He is a champion of both his constituents and commuters, as is my hon. Friend the Member for Enfield North (Nick de Bois). Enfield Chase, Winchmore Hill, Palmers Green and Bowes Park stations are all in my constituency. This debate is of particular concern to my constituents who, like me, travel along that line. As my hon. Friend the Member for Enfield North said, our constituents spend thousands of pounds a year for, essentially, a poor service, although there are some exceptions.
I am not sure whether any of my constituents are present—I noticed that some members of the public arrived late—but if any of them had tried to attend this debate, they would have struggled to get here on time had they taken the trains at 11.3 am and 11.31 am. They would have been greeted by the news that there were delays of between 14 and 18 minutes at Enfield. They would have heard not only about delays, but that the train was no longer going to call at Enfield Chase, Grange Park, Winchmore Hill, Palmers Green and Bowes Park, owing to an earlier broken down train. Sadly, that is typical. There are not only delays, but complete cancellations. People’s travel plans are thrown into disarray by the fact that no trains will be stopping at certain times. Commuters in particular must get to work on time. When they pay out thousands of pounds, they have a basic expectation that they will reach their destination in a reasonable time. That does not happen too often.
Sadly, my constituents have had to get used to tolerating the intolerable in many ways—to the overcrowding and overheating of carriages, as well as the delays. As my hon. Friend the Member for Enfield North carefully outlined, the past three months have been totally unacceptable. Passengers have been left literally stranded. They have had to take a bike or find some way to get a bus—when it arrives—to take them to tube stations. That is not straightforward; it is not a good, easy, efficient transfer. First Capital Connect must take much more immediate action to deal with problems when there is a good reason for things going wrong—for example, for reasons of safety.
We heard on Monday, sadly, that somebody had fallen on the line. Such things happen, and then there are delays. It is important that ameliorative action takes place, not least to give people proper transfers, so that they do not have to wait and find ways themselves—through getting a bike or by doing something else—to get a better service.
First Capital Connect, as we have heard, said in a letter that it is ultimately accountable to our constituents. Is it really? It hides behind saying that it is responsible for only about a quarter, or 24%, of delays—yes, some responsibility and accountability lies with Network Rail, particularly, and others—and it hides behind its specific contractual responsibility, saying that it is not responsible for overall performance. I say to the Minister that we must be able to do better than that when we consider the franchise agreement. It cannot simply compartmentalise its responsibilities and rely on its specific contractual delays, as it were.
Stephen McPartland
The figure of 24% that I referred to covers the whole of the Great Northern line. We are not aware of the figure for the Hertford loop line; it may be much higher than that.
Mr Burrowes
That is a very good point, and it has already been said that there are particular problems on the Hertford loop line. I agree with my hon. Friend that we need to look at properly ingraining customer satisfaction in the franchise agreement.
First Capital Connect also relies on the national passenger survey, saying, on the question of how train companies deal with delays—again, this is across the line and not only for the Hertford loop; the figure for that may well be very different—“There is a 43% satisfaction rate; you should be pleased with that.” It boasts that there has been a 10% improvement on the previous year, and that the figure is 5% greater than the average for London and the south-east. I hope the Minister realises that those rates are not acceptable. Whether or not they are the average, and whether or not there has been a 10% improvement, our constituents, who pay thousands of pounds, have to put up with what the majority of passengers say is unsatisfactory. That is not acceptable.
When the franchise agreement is agreed, our expectations must be so much higher. In the private sector and elsewhere, that satisfaction rate would not be accepted. Those sectors would have to bring about serious changes to provide a better service, and we must see that happen. The Which? survey in 2013, based on historical data, found that First Capital Connect had the worst customer ratings of all operators. There is a long way to go to ensure proper customer satisfaction and confidence.
As I and others have said, statistics for the past three months show that 83% of trains did not meet their punctuality targets. First Capital Connect’s core business is to get passengers—our constituents—to their destination on time, and it is failing at that great rate. It talks about issues of accountability, but it is not truly accountable for failing to deliver that core part of its contract. We need to see how we can ensure that it does better. It is not good enough, as my hon. Friend the Member for Enfield North mentioned, to say, “We have improved the Twitter service; we have 50,000 followers.” I could refer to Facebook groups; some parody the name First Capital Connect, which suggests that a whole group of people on social media have different views.
There is an infrastructure issue and a recognition that Network Rail has a lot to answer for, and indeed there is now increased investment in the line. Reference has been made to the trains and tracks being 40 years old—looking at the ages of Members present today, I think we all recognise that when one gets to 40 and beyond, there are issues—and there are problems with leaves, storms and winds, and even when new circuits get burned out. The reality is that progress has been made. There has also been progress from First Capital Connect, with additional trains coming through at peak hours, and that has all been welcome. However, now is an opportune time to ensure that First Capital Connect, or whoever takes over, does a better job.
As First Capital Connect states, decisions about future rolling stock will be made as part of the franchising process. This is a really important opportunity for us to make it crystal clear to the Minister that getting future investment soon is key to delivering a better service to our long-suffering constituents. They are long-suffering, not least because a lot of maintenance has been going on. Every Sunday, ever since I can remember, Winchmore Hill and services to Moorgate have been shut down, with a replacement bus service—a big coach trundling along our roads. People have seen that there is investment, but they are impatient to see it result in actual service improvements. They are also impatient for the franchise agreement to deliver what we are all talking about, which is true and proper accountability, meaning an improved service and improved performance.
Mr Mark Prisk (Hertford and Stortford) (Con)
I congratulate my hon. Friend the Member for Enfield North (Nick de Bois) not only on securing this timely debate, but on raising issues affecting hon. Members and hon. Friends from along the whole line. Clearly, the significance of the fact that every Member on the entire Hertford loop is present will be understood by the Minister.
Ever since last September, commuters using both Hertford North and Bayford stations have endured what can only be described as a third-rate service from First Capital Connect. Admittedly, during the same period, Greater Anglia has hardly covered itself in glory, but those on the Hertford loop have suffered the most. As we have heard, for more than four months, there have not simply been occasional problems, but daily delays and frequent cancellations. When customer information has been provided, as my hon. Friend accurately described, it has been inconsistent, confusing and very often wrong, leading to our constituents not getting to work, or not getting home.
We accept that last autumn the weather was appalling. I understand, as do my constituents, that the type of problems one has in a storm can be very destructive for a rail service, but we do not understand why First Capital Connect’s service was hit far worse and for far longer than the service on comparable lines; nor do we understand why, three or four months later, the problems have persisted through Christmas and into the new year, and apparently will go on for weeks to come. Many of my commuters have had to file claims for compensation—three to four a week at the moment—for the lengthy delays that they are enduring on almost every journey. Three to four claims a week is an appalling indictment of what is meant to be a service.
When things go wrong, what I discover from my constituents’ complaints is that, very often, however well-intentioned and genuinely motivated and hard-working the front-line staff are—which they are—the company’s contingency plans singularly fail to get people where they need to be, whether that is London for work or back home at Hertford or Bayford. As somebody put it to me, “We often feel with this service that we are simply being abandoned.” That demonstrates the strength of feeling on the issue.
I have to say to the Chamber and to my hon. Friends that this autumn’s problems are not unusual for the line. In 2009 and 2010, passengers from my constituency went through month after month of delays and cancellations. We were told, first of all, that it was because of the lack of drivers; that seemed to persist for several months. We then had my favourite, which was “the wrong kind of snow”—a novel explanation that the communications department would clearly have been proud of. We then had signalling failure at a certain point—it was never quite clear where that was, but it was always at some stage along the line. What it meant in reality was that for almost 12 consecutive months, we had a service that was, frankly, lamentable.
Much has rightly been made of punctuality and service. I looked at where the company lies among its competitors; that would be grounds for a reasonable judgment. The official statistics showed that in the year 2012-13—after the problems I have just described, when apparently things were settled—it achieved just 82.8% punctuality, when the industry average was up to 88%. One might reasonably assume that it would try to improve its game the following year and get ahead of that, but not at all. In fact, the following year it fell from that point down to 76%, which was among the worst in the entire rail sector.
What I described as a third-rate service is not new on this line. My constituents have endured it for years. One only has to look at the different passenger satisfaction surveys, rightly mentioned by my hon. Friends, to see where the root of the problem is. When one looks at surveys on punctuality, value for money, or overall satisfaction, time and again, First Capital Connect is rooted at the bottom of the list.
The point about passenger power and its inclusion in the franchise process is powerful. The Minister takes these matters seriously, and I know that he will want to talk about that today, and consider it when the franchise is let in the autumn.
First Capital Connect of course relies on Network Rail and has cited it as a regular cause of its failure. It is true that the state of the 40-year-old infrastructure on the loop is—let us be polite—below par. The condition of the tracks and other infrastructure has been the cause of many delays. There are frustrating comparisons to be made, because commuters are told that their line needs repairs, but other lines to the west, east and north have been repaired and are back in service. They wait day after day for their line to be repaired. I will try to find out in the next few weeks from Network Rail why the rail lines and other infrastructure on the Hertford loop continually fail. That is a particular issue in comparison with the main line. Does Network Rail not maintain the loop to the same standard as the main line? If not, why not? That raises an interesting safety question for the Minister.
Another area of concern for my constituents has been raised by several hon. Members. I hear many complaints not just about delays and cancellations, but about the state of the rolling stock. My hon. Friend the Member for Stevenage (Stephen McPartland) pointed out that the carriages in question go back to the 1970s. I am not as expert on carriage numbers as he is; I bow to his knowledge on that. The carriages can only be described—again, I am using the sort of polite language that seems not to appear in the social media—as not fit for purpose. They are ageing and increasingly dilapidated. They boil in the summer and are unheated in the winter.
Stephen McPartland
The carriages were built in 1976, the year of my birth, 37 years ago.
Mr Prisk
Clearly, my hon. Friend has aged better than the carriages, he said carefully, tiptoeing away. The carriages seem to be in need of replacement; I shall take things no further than that, given the age comparison that has been alluded to.
In 2011 there was some hope among the passengers on the loop in my constituency that First Capital Connect could be replaced as the franchise neared its end. However, the contract was renewed, and we were told that that was necessary to allow Thameslink investment to proceed. I want to make it clear that I agree about the need for that investment, but we on the Hertford loop do not benefit from it—either from the main line improvement or the new rolling stock. Those to our west and to the north will benefit, certainly, but those on the loop will not.
That underscores a theme that has emerged in the debate—a wider concern about the Hertford loop and the way in which the rail sector and policy makers regard it. All too often, it seems that the service on the Hertford loop is just an afterthought for the railway sector. Thus, when there are problems on the main line, inter-city trains are redirected along the loop and our local trains are cancelled. If there is congestion, the Hertford service is told to wait. As to rolling stock, we find that it is provided for the main line but not for us.
Commuters in my constituency feel that they have been neglected by the rail service for which they pay: by First Capital Connect, certainly by Network Rail, and by a national strategy that seems routinely to put inter-city and long-distance passengers’ needs ahead of theirs. We understand the need for balance, but commuters find it difficult to accept its being continually tilted against them. That is why I want to tell the Minister that we are not satisfied with First Capital Connect’s service; I could not support the extension of its franchise without radical changes, and I am doubtful that those can be achieved.
We are not happy with Network Rail’s performance, either. The Minister will know, because he studies such matters closely, how bad the service delays on the loop have been. I want his assurance, if he can give it today, that he will challenge Network Rail’s senior management on the issue. I intend to do so, but the Minister will know how important it is for them to hear it from him. Lastly, it is very important that he should explain that passengers on the loop should not be treated as secondary to those who travel on the main line.
In particular—this is perhaps the most tangible thing from the point of view of my constituents—a vital principle in future franchise negotiations should be the sharing of new rolling stock for the benefit of all passengers on the main line and the loop. There are different ways to do that. It would not mean that everyone would get an equal share, but all passengers should feel that they benefit from the changes in part, and are not excluded simply because they are served by only part of the franchisee’s overall business. That is an important principle, which can and should be knitted into the franchise arrangements for the coming period, in the autumn and afterwards. I should like the Minister’s response to it, and I hope he will support it. I look forward to his response.
Lilian Greenwood (Nottingham South) (Lab)
It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate the hon. Member for Enfield North (Nick de Bois) on securing this important debate. Many of the concerns that he raised—overcrowded, uncomfortable trains, frequent cancellations and inadequate customer services—will be familiar to commuters throughout the country, but there are clearly particular challenges on the Hertford loop line. I listened carefully to the examples that the hon. Gentleman and other hon. Members gave of recent disruption on the line. Passengers undoubtedly expect better, and it is clear that action by Network Rail and First Capital Connect is needed.
Network Rail is responsible for maintaining and improving the line, but train operators also have an important role in managing disruption, providing public information and passing compensation on to passengers. Today’s debate has raised concerns over how well that relationship functions. Several hon. Members have highlighted the vital importance of the way in which operators deal with delays, especially when infrastructure leads to unavoidable disruption. The disruption on the line has affected passengers acutely, because by London standards people in the borough of Enfield are unusually dependent on national rail services. The unacceptable performances of recent months have thrown the quality of those services into sharp focus, and we can all understand commuters’ anger at the frequent disruption, especially against a backdrop of rising fares.
Regulated fares have risen by 20% since the election, and there have been much higher rises in some unregulated fares, but commuters on the First Capital Connect franchise have had to endure some of the worst punctuality figures in the country. Perhaps unsurprisingly, passengers report some of the lowest satisfaction rates. Between 8 December and 4 January just 74% of trains on the Great Northern routes arrived on time. The hon. Member for Enfield North highlighted periods of even lower punctuality. That is not to underestimate the challenges that Network Rail and operators face in running busy London commuter services, or the pressures on the local infrastructure and the rolling stock, some of which, as has been mentioned, is decades old; but as hon. Members have made clear today, passengers have, over the past three months in particular, had to endure an unacceptable standard of service.
Given the level of investment that is due to go into the part of the commuter network in question, it is easy to understand why the Government have opted for a management-style contract for the combined Thameslink, Southern and Great Northern franchise. However, that means that Ministers must take a greater degree of responsibility. Perhaps the Minister will outline how he expects that new approach to contracting to work in practice. How will the reclassification of Network Rail affect things? Will the reclassification make it possible to get more co-ordination between the infrastructure manager and passenger operators with a management-style contract? There are opportunities to deliver more frequent or otherwise improved timetables as part of the new franchise; that will be made possible by the infrastructure improvements.
A peculiar feature of the line is the southbound destination: most services terminate at Moorgate during the week, but there are exceptions, such as evening and very early trains, which are diverted to King’s Cross.
I hope that the Minister acknowledges that there are issues that will not be resolved by the franchising process, including the rolling stock used on the line. The hon. Member for Stevenage (Stephen McPartland) mentioned the class 313s, which are among the oldest trains still in regular commercial use. If they are still in use when the new contract ends in 2021, some of those units will be 45 years old. I understand that there are particular challenges, as trains on that route have to operate with both overhead and third rail electrification systems, but even in the light of that restraint we need to know what the Department is planning for the future. What assessment has the Minister made of the long-term viability of these trains?
It would also be good to have the Minister’s comments on the record about the long-term management of the lines. The West Anglia lines, including the route to Enfield Town, mentioned earlier, are due to transfer from the Greater Anglia franchise next year. I am sure that passengers hope that London Overground will deliver the same benefits it brought to other areas that were previously managed by Silverlink, namely investment in the trains, improvements to stations and increased staff presence. That approach has resulted in much improved passenger satisfaction, delivered integration with other Transport for London services and increased revenue.
The Campaign for Better Transport has said that passenger services have
“improved significantly since the previous arrangements”
and station standards have
“sharply improved…from the Silverlink days.”
Even the most significant customer service improvement in recent years—the introduction of Oyster cards on suburban rail routes—was driven by Transport for London, although rail operators have been the main beneficiary of the additional revenue that has been generated.
Transport for London previously expressed an interest in running the Hertford loop line, which in theory could happen when the combined Thameslink, Southern and Great Northern franchise expires in 2021. Given the success of London Overground, any such proposals deserve to be taken seriously. What discussions has the Minister had with TfL on the possibility of any future devolution of the Hertford loop line, either in whole or in part? Although that is a long-term question, which will surely be revisited, the point it underlines is that there are alternative models for operating services, which we should consider.
Mr Prisk
As the Member for Hertford and Stortford, I caution the hon. Lady slightly. I wonder whether she is aware that there is a danger that services could be improved for those within the M25, with money being spent on carriages there, not for my constituents. Does she agree that, where improvements are made and provision is offered, all the passengers along that line should benefit, not just some?
Lilian Greenwood
I agree that that danger could present itself, if there is devolution of only part of the route. It is important that we understand whether the Minister is considering devolution and, if so, how protection would be put in place in respect of such issues. I understand why the hon. Gentleman expresses concerns on behalf of his constituents.
The Hertford loop is a branch of the east coast main line. Of course, hon. Members’ constituents have the option of catching a direct train to Stevenage, unless they are already there, where they can change on to InterCity East Coast services. As a key transport artery, we have to look at the east coast main line’s inter-city services and how they relate to First Capital Connect’s commuter provision, just as we look at improvements to the Hertford loop in the context of the wider Thameslink programme. In recent years, the quality gap between inter-city and commuter services on the east coast main line has widened, but instead of concentrating on bringing the local trains up to standard, the Government are committed to abolishing the successful long-distance operator.
East Coast has gone from strength to strength since the last private operator failed in 2009. Record passenger satisfaction and punctuality ratings have been achieved and all profits are reinvested in the service. However, if the Government’s privatisation goes ahead, that money would be split with shareholders instead. By the time the Government expect the new franchise to start, almost £1 billion will have been returned to the Treasury in premium payments.
This year, East Coast has raised fares by an average of 1.2%, a real-terms cut, at a time when commuters across the country are having to budget for fare rises of more than double the rate of inflation. This decision was a welcome relief for passengers up and down the line, including those who change on to East Coast services from north London and Hertfordshire, but it underlined the absurdity of the Government’s drive towards privatisation, which seems born out of a desire to end this successful alternative to franchising before the election. It certainly does not seem to relate to the passenger power that the hon. Member for Hertford and Stortford wants.
It is nonsense that the current successful operator has been barred from bidding for ideological reasons, but Eurostar East Coast, which is ultimately owned by the French and British Governments, has been shortlisted. The refranchising budget runs to £6 million. In the light of today’s discussions, it is disgraceful that Ministers are wasting Government time and taxpayers’ money on this unneeded, unwanted and wasteful privatisation, instead of getting to grips with the cost of living crisis and addressing problems on routes such as the Hertford loop.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
Is the hon. Lady considering taking other services back into the public sector when the franchises run out, should her party win the next election?
Lilian Greenwood
The Minister is aware that we are committed to maintaining East Coast as a public sector comparator, if we are in a position to do that, if he has not already privatised it. Certainly, given the amount of taxpayer and fare-payer money going into our rail system, we are right to be open-minded about considering possible rail reform, in the interests of passengers and taxpayers.
Investment in the Hertford loop line must lead to improved services in the short term and long-term strategic questions need to be dealt with, including about the trains used on the line. I urge the Minister to concentrate on securing those improvements, on this line and on other commuter lines, instead of pursuing a costly and wasteful privatisation that will not benefit passengers.
The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)
I am grateful to my hon. Friend the Member for Enfield North (Nick de Bois) and congratulate him on securing this debate on an important subject, not only for his constituents in north London, but for rail passengers throughout the country.
I have to say that I feel rather guilty, because although I travel down from Yorkshire as a weekly commuter I suspect that I have had fewer problems in the past year than some commuters from north London, and further afield, experienced during just one week before Christmas. Although some of that could be down to the St Jude’s storm and other inclement weather, and the need to clear tracks of fallen trees before services could resume, I appreciate that the service has, on many occasions, fallen below the standard that people would expect. I am very much in the picture, having heard a number of contributions on this subject. I will ensure that the Under-Secretary of State for Transport, my hon. Friend the Member for Wimbledon (Stephen Hammond), who deals with rail franchise policy, is also in the picture, and that Network Rail and First Capital Connect are aware of what has been said during this debate.
It is clear that if we are to continue the strong growth in rail travel over recent years, passengers must be confident that the service that they receive is reliable, quick and comfortable. That is why this Government have invested billions of pounds in railway infrastructure improvements during this Parliament and have set out their plans to continue doing so in the years to come.
My hon. Friend mentioned specifically the services provided by First Capital Connect in his constituency. As one would expect, the Department monitors rail performance closely. I should like to spend a moment providing a little more detail on some of the recent performance trends. I will also explain some of the issues involved, but I stress that it is not my job to make excuses on behalf of the operator; my job is to understand why things go wrong and what can be done to alleviate problems.
The key headline indicator for rail performance is the public performance measure, which measures the percentage of services that arrive on time. Data from the start of the financial year up to 4 January, the most recent period for which data are available, show a total PPM score for the Great Northern route, of which the Hertford loop is a part, of 85.16%. That is 6.07 percentage points short of the target agreed by the operator and Network Rail. My hon. Friend has already alluded to the inconvenience that that has caused to his constituents and to other passengers on the line. Only about a fifth of the total delay minutes over the year to date are attributable to a fault of the train operator. Some three quarters of all such delays were the responsibility of Network Rail, with the remainder being attributable to the knock-on effect of actions by other operators on the network.
My officials regularly discuss performance with First Capital Connect, and I am reassured that a number of key measures are in hand to ensure that the situation improves over the coming months. The two main causes of delays within the operator’s control are issues with drivers and issues with the train fleet. On the former, regular passengers will be aware that there have been some isolated cancellations due to train crew. Passengers will naturally be frustrated by those cancellations, which have occurred for a number of reasons. Passengers should, however, also note that First Capital Connect has been steadily recruiting and training new drivers across a number of key routes. The latest cohort of drivers will be out on the network, ready to drive trains, from this month. That rolling programme of recruitment and training will continue for the remainder of the franchise and beyond.
The level of delays on the First Capital Connect network due to fleet-related problems has also been increasing, despite expected improvements over the course of this year. We have challenged First Capital Connect on that matter, too, and we are aware that First Capital Connect has considered ways to improve its response to incidents, thereby reducing the level of delays that result from problems with the train fleet.
I have mentioned that the majority of delays on the Great Northern route over the year to date have been attributed to Network Rail. Such delays, however, include significant and, to a large extent, unavoidable delays due to the severe weather over recent months. The St Jude’s day storm, for example, caused widespread disruption, as did severe weather just before Christmas and since. In such severe weather it is inevitable that some disruption will occur. On a number of occasions, Network Rail has been forced to order the suspension of rail services until full route inspections have taken place, which has caused major disruptions.
Nick de Bois
The Minister is right to point to the weather, which played a significant part, but I remind him that the incidents raised today are also related to infrastructure. There have been signal failures and power failures with Network Rail, as well as operating issues with First Capital Connect.
Mr Goodwill
I am well aware of those issues, and the weather was only one part of it. Coupled with the other problems to which my hon. Friend alludes, weather was probably in some cases the straw that broke the camel’s back and caused annoyance and anger among passengers. When we have such weather situations, safety must remain the highest priority, and it is in no small part due to Network Rail’s performance on safety that the UK now has one of the safest, if not the safest, railways in Europe.
Mr Burrowes
Will the Minister respond to the point made so well by my hon. Friend the Member for Hertford and Stortford (Mr Prisk)? Why did our line seem to perform so much worse as a result of the storms? Yes, storms happened across the line, but the Hertford loop seemed to come off worst.
Mr Goodwill
I was involved in conference calls following the St Jude’s day storm, and the main issue was fallen trees. A decision was taken that, before services could commence, proving trains would be put through the routes so that large numbers of commuters were not stranded, possibly with trains backed up on the line behind a number of fallen trees. Where the embankments or the margins of a rail line are wooded, there are likely to be more fallen trees on the line. That was a particular problem north of London and in the south-east during the St Jude’s day storm. From a safety perspective, the right decision was taken. I gave evidence to the Select Committee on Transport stating that, before trains carrying commuters could use a line, proving trains ran to ensure that the lines were clear so that the trains could reach their destination.
Mr Burrowes
On the Hertford loop, the safety issue was not so much fallen trees as compacted leaves. The equipment necessary to unpack those leaves took a long time to get down the lines. The delays getting to us to ensure the safety of the line was a particular operational issue, and I understand that that problem has been repeated over the years. As we see continued poor weather coming down the line, as it were, we need to ensure that the problem is not repeated.
Mr Goodwill
I am aware that “leaves on the line” has become a standing joke, but it is no joke for those affected. I will ensure that Network Rail considers its strategy for ensuring that such situations can be addressed.
Mr Prisk
I realise that the Minister cannot chase every element of every line, but there is a clear differential in the standard to which the loop is administered by Network Rail. It would be helpful if he could confirm that he will take that point away, challenge Network Rail’s management and come back to us in writing in due course on the standard to which the Hertford loop is kept. Is that standard directly comparable to the main line? If so, why have we found our delays to be longer? There is a clear difference either in the way Network Rail responds to the loop or in the standard of the loop in the first place.
Mr Goodwill
Network Rail’s performance on the route has not been a glorious success. In fact, it has been among the worst in the country, and it is vital that Network Rail’s performance improves. It has been highlighted, for example, that vegetation management has been an issue on the Great Northern route. Although “leaves on the line” has become the stuff of satire, the fact is that autumn brings significant challenges for train operators, particularly in respect of the adhesion between train and track, which in some cases results in increased journey times and knock-on delays for passengers.
Stephen McPartland
Perhaps we could move forward with the franchises. Will the Minister consider publishing delays and timetables separately for the Great Northern route so that we can see how the delays on the Hertford loop compare with delays on the main line? There is a suspicion among hon. Members that the main line gets cleared first.
Mr Goodwill
I will see whether that information is available. If my hon. Friend tables a written question, he will probably get an answer more quickly than if he writes me a letter. Written questions seem to be an effective way to get officials to work as quickly as they can.
We have already told First Capital Connect that it must continue to challenge Network Rail to improve its performance on the line, and we are seeing some positive signs, including better plans for clearing trackside vegetation and for reducing minor defects in overhead line equipment. Network Rail has also started a programme of measures to reduce fatalities at stations. I welcome the programme, and I am aware that Network Rail has looked in some depth at how those tragic incidents can be reduced. Not only are fatalities still a significant cause of delays on the network, but of course each and every incident is a tragedy for the families of those involved.
First Capital Connect’s franchise agreement, as with all franchise agreements, contains benchmark measures. It should be stressed that although passengers have seen some significant delays, particularly in the recent extreme weather, the operator’s overall performance is well within its contractual requirements, which are measured as moving annual averages. We will continue to monitor the situation closely, and we will be quick to act in the event of any breach of the operator’s contract.
Lilian Greenwood
What discussions has the Minister had with First Capital Connect on how it deals with delays? The hon. Member for Broxbourne (Mr Walker) said that delays are often unavoidable, such as in periods of inclement weather, but it is how the operator deals with those delays and informs passengers of the cause and of how long the delay will last that causes the most inconvenience and upset.
Mr Goodwill
The hon. Lady is right. One of the problems, as mentioned by my hon. Friend the Member for Stevenage (Stephen McPartland), is with the information provided to passengers. We have discussed inaccurate information on the live update boards with First Capital Connect, and my hon. Friends the Members for Broxbourne (Mr Walker) and for Enfield North, who also mentioned the problem, may be interested to know that First Capital Connect is already considering the implementation of a live countdown system at a number of stations. Although I cannot promise that the system will be installed at every station for the time being, it is definitely a step in the right direction.
This month Passenger Focus, the statutory representative body for rail passengers, published the autumn results of its national passenger survey, which contained some positive signals for First Capital Connect passengers, so it is not all bad news. For example, First Capital Connect showed an annual 10% increase in satisfaction with the way it deals with delays and a 5% increase in satisfaction with the helpfulness of staff. Good results were also seen in improvements to the train and station environment; passengers report that trains and stations are cleaner and better maintained.
Nick de Bois
The heart of the problem is that, notwithstanding the fact that the operator improved by 10% from a very low, appalling 33% to 43%, if the data are not available and there is no scope within the contract to drill down to key lines and commuter routes, the chances are that a franchise operator will always hit his target, but there will always be a poor relation, and in this case that is our constituents.
Mr Goodwill
I am not saying that everything in the garden is beautiful. I am saying that there are a few more blooms around this year than in the past. The pressure is now on First Capital Connect to improve performance on punctuality and reliability, in which the survey showed an annual decline.
As my hon. Friend will know, we are planning to re-let the franchise in September, and the Department is currently assessing bids from several operators and looking at their plans for the future. I am sure he will understand that I cannot say more about the details of those bids at the moment, but I assure him that the new franchise will contain a regime of financial penalties and rewards to improve passenger satisfaction.
The extent to which bidders meet or exceed the Department’s requirement to improve the quality of services and to increase customer satisfaction will form an important part of the evaluation of bids, as my hon. Friend suggested. The winning bidder will be required to publish a regular customer report, setting out how it is engaging with passengers and taking account of their views, and how it is meeting its commitments and targets. It will also have to monitor and publish its performance against a new passenger experience metric, which combines a national passenger survey of satisfaction run by Passenger Focus, an independent body, and an objective assessment of service quality. We will, of course, make further announcements in due course.
If my hon. Friend is interested, extensive information on the new TSGN franchise is available publicly on the gov.uk website and includes the draft franchise agreement and the invitation to tender. Between them, those two documents set out the Department’s detailed expectations of all bidders hoping to be the next operator of train services in my hon. Friend’s constituency. In particular, they provide a full explanation of how the operator will be challenged to improve services throughout the entire spectrum of passenger experience, and detail how it will be rewarded if it exceeds passenger expectations, or held to account if it falls short. They also explain how the operator will be measured against the targets, including by reference to the national passenger survey independently undertaken by Passenger Focus.
On compensation for passengers, Network Rail pays compensation under schedule 8 of its track access agreement to train operating companies for unscheduled delays. A proportion of that will find its way to passengers via delay repayment refunds, but I accept that it is sometimes a hassle to fill in the paperwork and get the refund.
I was pleased to hear my hon. Friend the Member for Enfield North praising some of First Capital Connect’s front-line staff. I hope that passengers will take advantage of its facility to nominate staff who go an extra mile for passengers.
Lilian Greenwood
I want to take the Minister back to the new franchise, which is a management-style contract. How will he ensure, or what action has he taken to ensure, that there is better integration between Network Rail and the successful operator under the new contract? I am thinking of experience elsewhere, such as the alliance with South West Trains.
Mr Goodwill
There is often criticism of such franchises and questions are asked about what incentive there is for the operators to provide a decent quality of service as they do not keep the revenue. We are very mindful of that.
The winning bidder’s performance in key areas will be subject to a performance regime with financial incentives and penalties used to drive the quality of service, protect passengers’ interests and, therefore, increase revenue. The winning bidder will focus on reducing delays, cancellations and short trains and improving customers’ experience of the railways in the franchise area, not just on minimising costs.
Nick de Bois
The Minister is being generous in giving way and I am conscious of time. Will he tell us now or write to us later to say whether Network Rail pays compensation to operators if it has let them down, and should there be scope to pass that on to passengers?
Mr Goodwill
I will write to my hon. Friend about that. When a train breaks down, for example, it may cause delays for other services. It is not always Network Rail’s fault when such a problem happens.
Questions were asked about rolling stock, some of which is 37 years old. Decisions on the rolling stock in the new TSGN franchise are for the bidders, and we do not intend to mandate them. However, the strict service standards that operators will be held to should help to drive up services for passengers. We will be interested to see the bids that come forward.
Mr Prisk
Will that mean that all passengers should benefit? Is that the expectation of Ministers, even if it will not be the same degree of benefit? And will it mean that no classification—for example, those on the Hertford loop—will be excluded from enjoying new carriages when that is happening on the main line? That is an important principle that Ministers can establish.
Mr Goodwill
The decisions on rolling stock are a matter for the bidders, but I am sure that when the Government look at the bids, the points that have been made in this debate will be at the forefront of their mind when considering the quality of service and ensuring best value for taxpayers.
In conclusion, we are aware of the issues that my hon. Friend the Member for Enfield North has raised, and I assure him that we will maintain pressure on the operator and Network Rail to improve their performance on this important commuter route. There are signs of improvement, notwithstanding the recent severe weather problems, and we will watch the situation closely to ensure that those improvements are built on in the existing franchise and the next. I am grateful to my hon. Friend for bringing this matter to the attention of the House.
Kings Science Academy (Bradford)
(10 years, 11 months ago)
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Mr David Ward (Bradford East) (LD)
It is good to be here before you, Dr McCrea, and the Minister. I initiated this debate and I was lucky to secure it, so it is only fair that I should be able to say what its focus is. It is important to say that because it is not about free schools and academies in general. We have had such debates, so it is not for or against such schools, but about one particular school: Kings science academy. I am not interested in what has been done in the last year or so to improve things at the school or the achievement of pupils, the quality of teaching, the behaviour of pupils, or the leadership and management. I am passionately interested in all those things because I care about Bradford, but that is not what this debate is about.
I am interested in what seems to be the collusion between the so-called benefactor, Alan Lewis, the currently suspended principal, and the Department for Education. I am interested in the DFE’s role in allowing a rich Tory vice-chair to become even richer to the tune of millions of pounds of public money, and how it allowed an inexperienced young man to become principal of the school and to remain in control long after the DFE knew he had admitted that fraud had occurred in his school. How could that be?
I would like the Minister to prove me wrong in what I believe has occurred and the preferential, favourable treatment received by Mr Lewis by ending the speculation and making public the options, analysis and appraisals of nine alternative sites. If they were available, we could see whether there was a rigorous process in place.
I also want to see the evidence that the near £300,000 per year rent is not far in excess of what Mr Lewis could reasonably have expected to get from the partially tenanted and largely derelict site—I have given the Minister three photographs from before it was developed, and I can give more. What evidence is there that Mr Lewis has not made excessive profits from the school that now stands on that site? The Minister has the pictures before him. I believe that the school was only ever going to be built on that particular site—neither the principal nor, certainly, Alan Lewis would have been interested had it been anywhere else. Prove me wrong, please, but the DFE failed in its duty to ensure that a fair and robust options appraisal took place, and I have evidence to suggest that it did not take place.
As for the personal involvement of Mr Lewis in the running of the school, there is this big debate about “was he or wasn’t he” chair of the governors. How on earth can the DFE have mistakenly believed that a vice-chair of the Conservative party was chairman of governors at a free school for 12 months? How can the Department have been confused about that? I had a letter from Mr Lewis as recently as December 2013, signed by himself, in which he states:
“I was never chair of the governing body of the academy.”
Yet I have a copy of an e-mail to the Department, which has been amended by Mr Lewis to show him as chair of the governing body and not simply as someone involved in some way in the school.
I also have evidence that Mr Lewis was involved in the financial management of the school. In the same letter from him, however, he states that
“at no time have I ever had responsibility for the financial management of the academy.”
Yet I have a letter from the DFE in which the financial arrangements of the school have Mr Lewis not only as one of many involved, but as the person who should receive financial reports. He was the key individual who was receiving the reports, even though, to repeat his own words:
“at no time have I ever had responsibility for the financial management of the academy.”
The e-mail clearly shows, set out as an action point, that the monthly financial reports were to be given directly to him.
The truth is that Mr Lewis was personally and heavily involved in the school, right from the very beginning, but he now wants to distance himself from any involvement during a period in which he knows that fraud took place. Moreover, at the same time, negotiations were taking place about the rent for the property that he owned.
A second point, on the principal, involves the internal audit investigation team report endorsing the findings of the earlier Education Funding Agency report and of the report by the accountants, Crowe Clark Whitehill, in August 2012. Will the Minister please tell me whether the CCW report was seen by the DFE? I have to tell him that I think it was, but I want some evidence that it was and for when it was seen. The IAIT report states that the principal admitted that fabrication of invoices had taken place, so even if the DFE did not see the CCW report in August of 2012, at the very least it must have known about it from the audit team at the beginning of 2013. The DFE knew about the fraud, which had been admitted by the principal, but it took no action whatever to remove him from the school.
Kevin Brennan (Cardiff West) (Lab)
The Secretary of State said to me during a recent exchange in the main Chamber that
“Mr Lewis is receiving for the property an appropriately guaranteed market rent—less than he was receiving for it beforehand.”—[Official Report, 6 January 2014; Vol. 573, c. 16.]
One of the architects involved in preparing the free school bid has said to me that he finds that statement is a
“very difficult to believe” Statement.
Does the hon. Gentleman agree?
Mr Ward
We need clear evidence, because we are now receiving at best evasive responses to the questions that many of us have been asking. At worst, hiding behind the ongoing police inquiry, we have received no response whatever. To be honest, the evasiveness of some of the responses has been disrespectful to Members of this House. We need answers—all the speculation can then disappear.
We know how serious things were in the school, and that the audit reports identify not only the fraud, but all the nepotism and other financial irregularities that were taking place. I repeat that all of that was known by the DFE, but no action was taken at all. We are not talking about a young and inexperienced man, but about a dishonest and disreputable character, and yet, with all that information, the DFE was content to let the principal remain in place.
I hope that the Minister can prove me wrong, because I have a number of serious allegations about the DFE itself. If I am right, the independence of the civil service must be in doubt. Will the Minister please put to bed some of the suspicion about the DFE by helping us? The Department has failed in its public duty to expose what it knew to be malpractice and criminal activity—it held information back and covered up the situation. We cannot have the freedom extended to free schools including freedom from public accountability.
On the reporting of an admitted crime to the police, I am still not satisfied. We have asked oodles of questions, but I am still not satisfied that the DFE acted as it should have. There will always be suspicion of a cover-up until the Minister carries out a full investigation into what happened.
The first phase of the launch of the Kings school was praised by the Prime Minister and described in the press as closest to David Cameron’s vision of what a free school should be. We know the background, but when the whole scandal broke, the DFE said that it was for the school itself to decide whether the issue was a disciplinary one. How on earth can an organisation highlighted in an audit report as responsible be the organisation responsible for looking at itself and dealing with its own disciplinary issues? It beggars belief. A Government audit uncovers misconduct so serious that it needs to be passed to the police for criminal investigation, and yet the DFE feels that it is for the school itself to decide whether the issue is a disciplinary one.
When at last the Department decided that matters could not be contained within the school, it finally referred it to Action Fraud. We are asked to believe that Action Fraud botched up the recording of the fraud on 25 April. Even if we believed that to be true, we know that the DFE then did nothing about ensuring that a crime was investigated until 5 September, when it sent an exploratory e-mail to ask what was going on.
On 5 September, the DFE knew that its April report had been erroneously recorded as an information report. It was told by Action Fraud:
“If more information related to your report becomes available your report will be re-assessed to determine its viability for investigation.”
The Department knew that on 5 September, but did nothing. Why was the audit report not sent directly to the police at that time?
Mr Gerry Sutcliffe (Bradford South) (Lab)
I am grateful to the hon. Gentleman for the work he has been doing on this case, which has affected the credibility of some of the free schools in Bradford—notwithstanding the fact that there are some good ones. We had to get the information about when the police were informed from the police themselves, not from the DFE. We were asking questions, either written questions or questions on the Floor of the House, to try to get answers, yet answers we got none—except when we contacted the police.
Mr Ward
When we asked the police in e-mails what they had received, they said that they had received nothing. Despite what the DFE said, they did not receive the reports.
As for the questions we have been asking, there are simply too many discrepancies between the answers to parliamentary questions and the other evidence available to us. The Department made its original report on 25 April 2013: that is when the matter was reported—so we are told—to Action Fraud. Let us not forget that that is eight months after the CCW report. If the DFE had seen that report at that point, why was it not made public?
George Galloway (Bradford West) (Respect)
I congratulate the hon. Gentleman on securing this debate, but I congratulate him more on the excellent forensic speech that he is making. The more he speaks, the more I am bound to ask whether he agrees that it is already obvious that the nub of this question is that Alan Lewis is a very senior member of the Conservative party, and so for party political reasons the Secretary of State for Education simply could not come clean on this matter with the people of Bradford and with the Members of this House.
Mr Ward
That is an excellent point. We have to ask why. There must have been a justification for the cover-up. It can be one of only two things. It is either because free schools are such a flagship policy for the Conservative party that it could not afford the embarrassment or because of Alan Lewis’s involvement and his association with the Tory party. If there are any other reasons, I cannot think of them.
I will make the point again about deception—I cannot use any other word, really. As I said, the Department’s original report was made on 25 April 2013, a long time after it knew about the matter. We are told that Action Fraud inadvertently logged the report as an information-only report, and subsequently apologised for that error. But how did that occur? If, as the Department claimed, information on fabricated invoices was submitted to the National Fraud Investigation Bureau, how could that be? Unless there was just a passing reference in a short telephone call, it is hard to believe that the correct message could not have got through. How could it have been logged as an information-only report if the audit report had been made available? In that case, the reaction could have been nothing other than a decision that the matter required a criminal investigation and needed to be dealt with quickly.
The Minister must be interested to learn the answer to those questions himself. In answer to a parliamentary question, the Department said:
“Action Fraud notified the Department on 1 November”.—[Official Report, 6 January 2014; Vol. 573, c. 98W.]
Action Fraud notified the Department of its mistake in classifying the report on 1 November, but—as we know thanks to a freedom of information request by John Roberts—on 5 September the Department had received a communication from Action Fraud saying:
“Thank you for your email to Action Fraud concerning your Information Report.”
That was received seven weeks before the Department says it was notified that the report had been wrongly classified as an information-only report. In those seven weeks, it did nothing.
In a parliamentary answer, the Department said that it had contacted Action Fraud on 5 September and
“in response Action Fraud stated that the National Fraud Intelligence Bureau had assessed the case but determined that there was not enough information to progress the case further.”—[Official Report, 6 November 2013; Vol. 570, c. 229W.]
End of story, it seems—the police had looked at the matter and there was nothing to do. But the truth is that the e-mail from Action Fraud to the Department on 5 September told the DFE not only that the report had been wrongly classified as an information-only report, but that more information would lead to the report being
“re-assessed to determine its viability for investigation.”
Even if we believe that it was through some error back in April that the report was inadvertently misclassified, on 5 September the Department was told not only that it was a report that could lead to an investigation—something it claimed subsequently to have been told on 1 November—but that if it gave additional information the matter could be turned into a crime investigation.
Of the three parties to this situation I have mentioned, who do I blame most? Is it a businessman who wants to make a lot of money and sees a quick opportunity provided by a political party with which he is closely associated? Is it a young man who is, I think, idealistic but is also egotistical, and is led on by politicians and senior civil servants to believe that for him the normal rules of integrity, honesty and propriety simply do not have to apply? Or is it the Department for Education, which became a Government agent of change and forgot that the basic rules of public accountability and scrutiny in the spending of millions of pounds of public money must always take precedence over the desire to support its political masters?
The real surprise is not that, eventually and thankfully, we have been made aware of what has happened via the whistleblowers, but that there were not more whistleblowers earlier—people within the Department, who were looking at what was going on and saying, “This is just not right.” That is the real problem. I have been to the Department recently and seen the whole floor that has been taken over by the academies and free school organisation within the DFE. The massive shift that has taken place has also, I believe, brought about a cultural change in the Department. The policy has become such an important driver and part of the Government’s strategy that anything goes.
The big unanswered question is, if the Department could behave in this way once, with this particular school, how many other academies and free schools has it supported in a similar manner? Unfortunately, unless we get some answers we will have to wait until another whistleblower comes forward to find out.
The Minister for Schools (Mr David Laws)
It is a pleasure to serve under your chairmanship, Dr McCrea.
I thank my hon. Friend the Member for Bradford East (Mr Ward) for securing this debate and for his persistence in ensuring that this important issue is debated properly in the House and scrutinised properly. I say that not just out of the courtesy that is normal on these occasions; it is quite right that he should ask questions about a serious issue that deserves to be looked at seriously.
I will take my hon. Friend’s hint and will not, as sometimes happens on these occasions, fill the first 75% of my speech with general comments. I will come very quickly to a lot of the matters he raised and will try to address them as far as I can. But since he mentioned some issues about the accountability of free schools, I will briefly say a couple of things on that matter, before going through each of the points that he made.
Most free schools are popular with parents and are delivering strong discipline and teaching across the country. As they are brand-new schools there is, quite rightly, greater contact and oversight with open free schools than with other academies—until their first successful Ofsted inspection, at least. After that, they are subject to the same monitoring arrangements as other academies.
Mr Laws
I am trying to address that. I am going to speak briefly, and then I will come straight to my hon. Friend’s points. He mentioned free school accountability in his speech, and it is right to say something on that, briefly and without taking up precious time. I promise him that I will address the issues that he raised.
The approach I was outlining means that in term 1, visits are arranged by the education adviser and the Education Funding Agency. In year 2, the first Ofsted section 5 report becomes available. All free schools provide budget forecasts, financial management and governance self-assessments and externally audited financial statements.
I will now turn, in the time that we have, to the matters raised by my hon. Friend that are specific to the case of the Kings science academy. He said he feared that I would hide behind—I think those were his words—the fact that there is a criminal investigation. There are some things that I cannot touch on in this speech because they are subject to a criminal investigation, and we all understand the constraints that that imposes on us all. Subject to that, however, I will try to be as open as I can.
The Kings science academy opened in September 2011. The Education Funding Agency had already planned a full financial management and governance review at the academy which would look at aspects such as financial and other internal controls, when it received allegations about practices at the school in October 2012, some of which related to possible financial irregularity. Those allegations were included in the EFA’s financial management and governance review, as my hon. Friend is aware. The EFA carried out its financial management and governance review in December 2012. It looked in detail at all aspects of governance, including the chair’s position, financial controls and conflicts of interest. Following the usual procedures, the EFA sent the draft report, showing the inadequacy of the financial management and controls, to the academy in January 2013 so that the academy could correct any inaccuracies. Thereafter, the EFA sent the final report in February 2013, which confirmed the assessment of “inadequate” and requested the academy’s response to the findings and recommendations in the report.
The findings of the EFA’s review led to a further investigation, as my hon. Friend knows, by the Department’s internal audit investigations team. The Department’s investigators began their on-site work at Kings science academy on 24 January 2013. The investigation team sent its report to Kings science academy at the beginning of April to allow for the correction of any inadequacies. John Bowers became the new acting chair of the academy in March 2013, and he tightened control by, among other things, assuming the important role of accounting officer for the academy in April of that year. The EFA also received the academy’s improvement plans at the beginning of April in response to the findings of the financial management and evaluation report. Both the EFA and the Department’s investigation team continued contact with Mr Bowers to monitor progress in responding to both reports. We remain grateful to the new chair for the real efforts that he has made to address some of the issues that are now public.
In line with our zero tolerance of fraud in all schools—free schools, academies and maintained schools—we reported the evidence of possible fraud to Action Fraud at the earliest opportunity on 25 April 2013. I will return to cover that aspect of the case, which my hon. Friend has mentioned, in more detail in a second. Because both the financial management and governance review and the investigation found serious failings in financial management, the Secretary of State issued a warning notice in May 2013 requiring the full recovery of relevant funds and confirmation that Kings science academy would respond to the findings in both reports.
In June 2013, the EFA confirmed that Kings science academy’s new finance policy provided a firm basis for establishing proper internal controls at the school, and we wrote to the academy in July 2013 recognising the progress it had made and confirming that the report of the internal audit investigation team would be published. That is in line with our policy to publish investigation reports, which is clearly set out in the “Academies Financial Handbook”. We had planned to wait before publishing the investigation report until the disciplinary processes had been completed, but we decided that it was right to publish when the investigation report was leaked in the media.
Mr Ward
I understand all that. A report had been produced by the audit team in January, which was finally published a little after that, so a report was available in which the principal of the school admitted that fraud had taken place. Does the Minister think it was right that the principal was allowed to continue to go in to work each day?
Mr Laws
I will come directly to that point in a moment. The EFA’s financial management and governance report and the Secretary of State’s warning notice have also now been published. We insisted that Kings science academy address identified failings urgently. While its internal evidence gathering continued, we confirmed the repayment sum at £76,933. We also sought confirmation that the disciplinary process was being taken forward. It is right that the relevant funding is being recovered from the academy in full, as it always will be if an academy or free school is unable to demonstrate that funding has been used for its intended purpose.
We believe that the Kings science academy, under the leadership of Mr Bowers, is making steady progress to address the weaknesses found in financial management and governance. That increased confidence is not just a result of the monitoring visits carried out by the EFA. We have evidence from KSA’s externally audited accounts for 2012-13, which were received on time, unqualified, and report the auditor’s comments on improvements in financial control and governance.
Let me turn now to the reporting of evidence to the police. The administrative error made by Action Fraud, which wrongly categorised the Department’s evidence in April as an information report rather than a crime, is deeply regrettable, as my hon. Friend made clear. Significantly, Action Fraud has apologised for the error. We do not believe that there is any fault with the way in which the report was made by the Department.
Mr Laws
I will not give way, because I have so much to cover. I hope the hon. Gentleman will excuse me.
Before April 2013, any evidence of fraud found by the Department would have been reported to the relevant police authority. Action Fraud was established from April 2013 and since then has been the correct organisation with which to engage. The KSA situation was the first occasion on which the Department had needed to contact Action Fraud, so it made a further check with West Yorkshire police on the same day—25 April—to confirm that the report had been made in the right way. I put it to my hon. Friend the Member for Bradford East that if there had been an attempt at a cover-up, it is unlikely that that check would have taken place.
In September, we made a further check with Action Fraud, which told us that the National Fraud Intelligence Bureau had assessed the case and decided not to take it forward. At the time, it seemed clear to us that the information regarding an alleged fraud had been correctly provided; it had been assessed and the case was not going to be progressed further. We know now that the case should have been passed by Action Fraud to West Yorkshire police for investigation, but the decision to investigate lies with the police, not the Department for Education.
I am sure my hon. Friend shares my wish to ensure that such a problem does not happen again. The Department’s internal audit and investigation team has now met Action Fraud and the National Fraud Intelligence Bureau to review and refine the processes for reporting fraud in future. We have tightened the procedures through which any future reports will be made. We will use Action Fraud’s online system. We will retain our own copy of the report we make and follow up within five working days if we have had no response from Action Fraud or contact the police.
As my hon. Friend knows, the police made an arrest in connection with the case on 9 January this year. Kings science academy wrote to parents on 10 January to confirm that the arrested man was Mr Raza, the principal, and that he would not be returning to the school, at least until the investigation was completed and finalised. Beyond that, it is not appropriate to comment. The parameters of the investigation are, quite rightly, for West Yorkshire police to determine. Until such time as the investigations are concluded and a determination regarding the case is reached, it would not be appropriate to release further information on that matter.
I shall now turn to the matter of Alan Lewis’s role at Kings science academy. On 27 September 2011, the academy told the Department that Mr Lewis would be chair of governors from 1 October 2011. The Department was informed on 24 October 2012 that Mr Lewis was not the chair and that Dr Asim Suleman would be chair of governors from 25 October 2012. We learned in December 2012 that there had been no chair of governors in place between October 2011 and October 2012. That was clearly a completely unsatisfactory position and totally unacceptable. Not to have a properly constituted governing body is a demonstrable failure to comply with the funding agreement. It is one of the issues identified in the EFA’s review, and one that the academy quickly addressed.
Alan Lewis’s other connection is that his company, Hartley Investment Trust Ltd, leases the site to the school, as my hon. Friend indicated. The site was secured for Kings science academy at £295,960 per annum, after an independent valuation. Due to the related party involvement, Treasury approval was sought and provided before final decisions were taken. If any hon. Members have any points to make about the police investigation, they should make them as soon as possible to the police.
Tyne River (Pollution)
(10 years, 11 months ago)
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Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
It is a pleasure to serve under your chairmanship, Dr McCrea. This debate is important to my constituency and to the constituencies that neighbour mine on the River Tyne. The issues that I intend to raise have far-reaching consequences for public policy, as I hope to demonstrate. Essentially, I want to raise two questions: should we continue with the long-running efforts of central and local government to clean up the River Tyne, and should the burden of paying for that be shared between central and local government? Ideally, of course, the polluter should be made to pay. However, if that is not a practical way forward, that does not relieve those of us in public life of the obligation to find a solution to the problems.
Until recently, these were not particularly controversial questions. The statutory responsibility lies with local authorities. Government recognised the exceptional nature of these issues, the financial consequences and the broader public interest in remediation, and therefore made a financial contribution towards the costs. Newcastle city council, under both Labour and Liberal Democrat administrations, deserves credit for the way the local authority has proactively worked to remediate contaminated sites within the city boundaries. Alongside that, it has developed an imaginative and very successful public-private partnership to bring new employers to the north banks of the Tyne.
So successful has the local authority been, working in partnership with the Department for Environment, Food and Rural Affairs and its predecessor Departments, that there is only one significant cause for concern remaining in the city. To have got to this position is no mean achievement. The remedial work already completed includes two significant antimony sites.
The outstanding problem is the old Thomas Ness tar works site—the subject of today’s debate. The Thomas Ness tar works was a going concern from 1920 to 1981. Its function, as the name suggests, was to produce coal tar. As a young official of the General and Municipal Workers Union, I played a small part, back in 1981, in negotiating the redundancy terms for the work force when it closed. Following closure, the factory was demolished and some remedial work was carried out to the site. However, it was still contaminated, and it quickly became clear that the contaminants were leaching into the river. Underneath the site, the sand and gravel are also heavily contaminated with tars and oils. To this day, the site causes significant water pollution in the adjacent River Tyne, as well as posing a risk to human health, with reports of serious headaches being suffered by members of the public who use the nearby foreshore in the Walker country park after only 10 minutes in the area.
In 1984, the then Tyne and Wear county council sponsored an intervention aimed at dealing with part of the problem, but the Tyne and Wear scheme could not have dealt with the underlying problem of coal tar seeping underground on the site and then dispersing. It was designed to catch the tar nearer the surface and divert it through a trench into a containment tank. That was only partly effective and in any event could not have stopped the seepage into the river.
Newcastle city council made a more thorough attempt at remediation in the late 1990s. Essentially, the city council’s scheme was a pumped treatment scheme involving pumps in wells along the site’s frontage facing the river. I should say at this point, for those who are not familiar with the area, that the site is on the riverbank, and therefore natural seepage from it would be downhill towards the river. The tar clogged up the pumps, wrecking the scheme.
Government Departments worked closely with Tyne and Wear county council and the city council in a constructive way to try to solve the problem. That is all I am asking for today. In a notice from the Department for Environment, Food and Rural Affairs dated December 2013, the Under-Secretary, Lord De Mauley, wrote to all local authorities in England. His opening sentence was:
“I am writing to update you on the future of DEFRA funding of the Contaminated Land Capital Grants Scheme”.
The letter is not really an update, however; it is a retreat from financial responsibility for these matters.
DEFRA had issued revised guidance to local authorities in April 2012 obliging them to focus their attention on the highest-risk sites, while allowing them to dismiss lower-risk ones. Let nobody be in any doubt: the site under discussion is a high-risk site. The key issue, of course, is the Government’s financial contribution to solving the problem. The DEFRA contaminated land grants budget has gone from £17.5 million in 2009-10 to £2 million in 2013-14. An increase of £500,000 is budgeted for each year after that until 2017, when the budget head will be abolished.
Depressingly, the Minister will probably say that the council should pay for the whole thing using money provided by the Government through the revenue support grant, but the revenue support grant for north-east local authorities is not adequate to meet their day-to-day statutory functions, let alone carry extra ones without any remedial action-specific grant-aid from central Government. That, of course, would lead us into a much wider debate. I hope that the Minister will engage constructively with the issue, rather than trying to hand the whole thing over, unfunded, to the local authority.
Newcastle city council has a proposed way forward for containing the contamination on site. It has presented the scheme to the Environment Agency, which assessed and approved the proposed scheme. The Environment Agency’s reply to the council is blunt and honest, and the Environment Agency deserves credit for setting out the situation in clear terms. It states:
“We currently have insufficient funds within the Capital Works Programme to be able to support this project as well as other projects with higher priority scores”.
You cannot get clearer than that, Dr McCrea.
The question for all of us involved in public life is whether we leave things as they are or try to find a constructive way forward that would at least contain the problem. Let there be no misunderstanding: my preferred solution would be to eradicate it altogether. If that is not realistic, however, the very least we can do is to try to protect the river from further contamination and contain the problem on site. That, as I understand it, is essentially the local authority’s proposal.
So much work has been done and so much effort has been put in to improve the condition of the Tyne that it seems disproportionate to walk away from the problem now. We are very close to restoring the River Tyne to its pre-industrial quality. Central Government have played an important part in getting us to where we are now, and they should help us to finish the job. We need a comprehensive plan for the river as a whole, including the upper reaches of the north and south Tyne. We need a latter-day Tyne improvement commission to bring public authorities and private sector interests together, to set a clear programme of remediation for the whole river right the way to its upper reaches, to drive the work programme forward and to remain vigilant on any emerging causes of pollution. That would have to be paid for. No local authority in the north-east is in any position to make a significant financial contribution to the project, nor is it reasonable to try to pass the cost on to private sector interests, which are, after all, not responsible for the pollution. There is a necessary role here for Government.
I accept that the problem is not unique to the Tyne, and that the Minister will be faced with similar issues in other parts of the country. I would like to explore with him constructive ways of taking the issue forward and hope that he, or one of his colleagues, is open to a meeting at which we can explore the matter further.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)
I congratulate the right hon. Member for Newcastle upon Tyne East (Mr Brown) on securing the debate. I was interested to hear about his long-standing connection with the plant, and his negotiation of the redundancy deal for former workers.
As the right hon. Gentleman explained, land contamination is a complex area. The issue of the St Anthony’s former tar works and the pollution of the River Tyne shows that. The Department for Environment, Food and Rural Affairs and the Environment Agency are aware of the site and the agency has been in regular contact for several years with Newcastle city council, which owns the site and is designated the “appropriate person” under the Environmental Protection Act 1990. We continue to offer advice and guidance.
I acknowledge the council’s work to deal with the site. DEFRA recognises that it initiated work in 2000 to try to prevent the flow of hydrocarbons into the river. Unfortunately, that system failed shortly after installation. Following that, further investigation was funded through the contaminated land capital grants scheme at a cost of £240,000, and that led to the site being determined under the legislation in 2007. The council was successful in securing further funding of £189,000, resulting in a detailed design for remediation of the site. DEFRA has therefore already provided more than £400,000 in capital funding to support the council in dealing with the site.
As the right hon. Gentleman pointed out, however, the budget for the grants scheme has undergone significant cuts in line with the economic downturn, and since 2010 no further funding could be made available for the site following the assessment and prioritisation of all applications for funding. Other bids, such as those to do with landfill gas entering residential properties, would be considered a higher priority, given the greater risk to public health on the measures that we use to assess such projects. Vapour monitoring at St Anthony’s established that there was no health risk to users of the walkway on the river bank, and there is currently no evidence that the site is causing a breach of the status of the Tyne estuary for the purposes of the water framework directive.
The phasing out of the grant scheme is regrettable, but it reflects a necessary change of approach following a review of departmental priorities and expenditure. DEFRA and the Environment Agency are not immune from the necessary funding constraints that all Departments are under. Government can continue to support only those projects that are considered to be the highest priority, and absolute emergency cases, until the scheme ends in 2017.
I want to explain how contaminated land is dealt with in England, and the additional work that has been undertaken by DEFRA to support local authorities so that they can direct resources to the highest-priority sites. The contaminated land regime, as set out in part IIA of the 1990 Act, provides a risk-based approach to the identification and remediation of land where contamination poses an unacceptable risk to human health or the environment.
Responsibility for identifying such contaminated land is a local authority obligation under part IIA, and, since 2000, financial support has been and will continue to be provided through the revenue support grant provided by the Department for Communities and Local Government. That is exactly the answer that the right hon. Gentleman predicted. The revenue support grant is not ring-fenced, and it is up to local authorities to decide where to allocate the money according to their individual priorities.
Changes made to the part IIA statutory guidance in April 2012 have resulted in a more stringent, risk-based approach to identifying and remediating contaminated land, meaning that more resources can be directed to those sites most in need. It is a simple fact that with far fewer resources, we must prioritise where spending goes first.
We are now in the final stages of DEFRA-funded research to develop new screening levels that will screen out low-risk land from the need for further investigation, thus saving money for local authorities. Once published, the screening values will sit alongside DEFRA research published in 2012 on the normal background concentrations of contaminants to help inform decisions. Case studies are also being published from the work of the contaminated land national experts panel, which is a free resource available to support local authorities that face the more difficult, borderline decisions so that they can understand what would or would not be required. It is important to note that the environmental permitting regime for current activities, particularly on redeveloping sites where there is potential to cause contamination, ensures that no new part IIA contaminated sites should be being created.
There has been a broader analysis of the health impacts. DEFRA-funded research on the current state of scientific knowledge on the health effects of contaminated land found little direct evidence of serious health effects from the types and levels of land contamination found in England today. We are not complacent, however. Such effects cannot be ruled out in all cases because it is sometimes difficult to prove causality, and there are reasons to be concerned that some sites might pose significant risks from longer-term exposure. We therefore take a precautionary approach to the identification and remediation of contaminated land, which is reflected in the development of the new screening levels for contaminants in soil.
The right hon. Gentleman stated that, in this era of lower public spending, we have to consider how to put right historical contamination. An estimated 90% of contaminated land in England and Wales is cleaned up through the planning system under the national planning policy framework, which has played an important part in making the planning system less complex and easier to understand, thereby encouraging sustainable development and the effective use of brownfield land where appropriate. The key for many sites is to redevelop them and, as part of that redevelopment, to have an agreement with the developer that they will put right the contamination, as they have the proceeds of the redevelopment to invest.
Mr Nicholas Brown
I am open to exploring with the Minister any practical way forward that will address the problem, and I know that he proposes that idea constructively, but I cannot see it working with the site in question. The difficulty would be in finding some way either to prevent the tar from leaching into the river, or to clear the tar off the site altogether. The capital cost of a protective measure, let alone a complete clearance, is likely to be several million pounds, which must be far more than any possible planning gain that could be made on the site.
George Eustice
I am not sure. One estimate I heard is that it would cost somewhere between £1.2 million and £1.5 million to put the site right. I take the right hon. Gentleman’s point, and he understands the site better than I do, as he is the constituency MP. There are possibilities in many instances. Local authorities across the country hold toxic assets that are something of a liability. We have many such sites in Cornwall. I grew up in a mining area, and we have our share of arsenic and contaminated land. Deals can often be reached in which the local authority effectively gives the land to a developer in return for the developer putting right the contamination. I have seen that work in my part of the country—the opposite end of the country from his constituency—where we also have contamination caused by tin mining. We need to explore such things, otherwise we go full circle and come back to the question of whether using public money is justified. We have introduced a new screening process for prioritising sites that are a direct threat to health in residential areas, and we have been frank and honest that we cannot justify the expenditure at this stage. I hope it will be possible to explore the approach I have outlined.
Also, land remediation relief will support developers. The Government are encouraging a market-based approach to dealing with contaminated land, as much as possible. One financial incentive that the Government have provided to encourage the redevelopment of contaminated land is land remediation relief, which allows companies to claim back corporation tax on 150% of the costs of dealing with contaminated land, and which is intended to influence developers’ decisions positively by increasing the profitability of redevelopment projects. The Treasury estimates that the value of land remediation relief is around £30 million per annum, suggesting that the private sector is spending approximately £100 million on land remediation relief-compliant voluntary remediation each year.
The Government are also trying to encourage local authorities, LEPs and enterprise zones to find solutions to toxic sites that have not so far been suitable for redevelopment. Furthermore, DEFRA is working with the Environment Agency and the Coal Authority to address water pollution from abandoned metal mines. DEFRA has agreed to a modest and targeted approach, initiating one to two new remediation schemes each year, subject to funding. I appreciate that that particular fund is of little use in relation to the former tar works at St Anthony’s, but it is nevertheless indicative of the fact that we continue to do what we can on the issue with the resources we have.
I mentioned earlier that emergency cases will still be funded. As part of the announcement on the future of the grants scheme, my noble Friend Lord de Mauley made it clear that, subject to capital funding allocations, a contingency fund of £500,000 each year will continue to be available until the scheme ends in 2017. DEFRA is working with the Environment Agency to agree how the contingency fund will be administered; that will enable the fulfilment of ongoing projects as far as possible, and provide funding in case of emergencies. An announcement on that will be made soon, and will include details of the qualifying criteria for such cases.
To conclude, DEFRA will review the impact of the changes to the grants scheme for local authorities 12 months after the changes are introduced in April 2014. In addition, it has commissioned a new state of contaminated land survey, which will collect information on part IIA regulatory activity, the apportioning of liability, and the funding mechanisms used for dealing with contaminated land. The report will be produced by the Environment Agency before the end of 2014 and will provide information that can be used when reviewing the impact of the changes to the grants scheme.
I thank the right hon. Gentleman again for bringing this debate before the House. I am sorry that I have not been able to give him any more reassurance than the Environment Agency has, but I hope that he will appreciate the difficult constraints that we face and the need for us to prioritise our spending.
Mr Nicholas Brown
Dr McCrea, like me, you represent a constituency with a rich industrial heritage that no doubt has similar problems, albeit perhaps not exactly of the nature we have been discussing. I am very disappointed by what the Minister has said. He has, however, offered one constructive suggestion, which I note would not cost the Government any money. Nevertheless, it is a constructive suggestion and I will take it up with the local authority and others locally.
I agree with the Minister that the possibility of a commercial way forward for the site is worth exploring. The figures he cited are the same as my own—a cost of roughly £1.2 million to £2 million for the council’s preferred scheme to try to contain the tars and prevent them from leaching into the river, but it would contain them on site. I do not know how commercially attractive that would be to a developer. My preferred option would be a one-off capital clearance of the whole site to clear it up completely and bring it back to a more pristine standard, certainly than it has known since 1920. However, my suspicion is that that would cost more money.
I rather thought that the Minister would turn me down on the money, and that he would refer to the Department for Communities and Local Government grant arrangements—
Dr William McCrea (in the Chair)
Order. May I say to the right hon. Gentleman that the Minister might like to say a few words in response, but it is an intervention; there can be no further speeches. Does the Minister want to respond?
George Eustice
I omitted to deal with that point, which the right hon. Gentleman raised. I am more than happy to go back and raise that point with Lord De Mauley. He is responsible for the matter because it is in his portfolio, even though I handle it in the Commons, and I am sure that he will be willing to meet and discuss it further. I have been as honest and frank as I can with the right hon. Gentleman about the constraints that we have. As I have said, a large sum of money is required to put the site right. We have made it clear that we have only about £500,000 a year for the whole country, so he can appreciate that it would overwhelm us. I will nevertheless take that point back and ask Lord De Mauley if he will have a meeting.
Dr William McCrea (in the Chair)
I thank the Minister and the right hon. Gentleman for the debate. It was less contentious than some of the debates that we have had today, but it was no less important.
Question put and agreed to.
Written Statements
(10 years, 11 months ago)
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Office of Fair Trading (Contingencies Fund Advance)
(10 years, 11 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jenny Willott)
The Department for Business, Innovation and Skills wishes to report that a cash advance from the Contingencies Fund has been sought for the Office of Fair Trading (OFT).
The advance is required to meet an urgent cash requirement on existing services pending parliamentary approval of the 2013-14 supplementary estimate. The supplementary estimate seeks an increase in the net cash requirement in order to settle material liabilities recognised in the prior year.
Parliamentary approval for additional cash of £5 million will be sought in a supplementary estimate for the Office of Fair Trading. Pending that approval, urgent expenditure estimated at £5 million will be met by repayable cash advances from the Contingencies Fund.
The advance will be repaid upon Royal Assent of the Supply and Appropriation (Anticipation and Adjustments) Bill.
ECOFIN
(10 years, 11 months ago)
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The Financial Secretary to the Treasury (Sajid Javid)
A meeting of the Economic and Financial Affairs Council will be held in Brussels on 28 January 2014. The following items are on the agenda to be discussed.
Current legislative proposals
The presidency will provide information on the ongoing work on financial services dossiers.
Implementation of the Single Supervisory Mechanism
The European Central Bank (ECB) will provide an update on the state of play of the implementation of the single supervisory mechanism (SSM). The establishment of the SSM will help to safeguard euro area financial stability and is critical to restoring market confidence over the medium-term.
Presentation of the Presidency work programme
The Greek presidency will present its six-month work programme for ECOFIN. The main themes of the presidency are: growth, jobs and cohesion; further EU/eurozone integration; migration, borders and mobility; and maritime policy.
Follow-up to the European Council meeting on 19-20 December 2013
Council will hold an exchange of views on the December 2013 European Council conclusions regarding the implementation of the compact for growth and jobs. The UK supports the objectives of the compact to promote growth and competitiveness and tackle unemployment.
Implementation of the Stability and Growth Pact
Council will be asked to endorse a draft Council decision on the existence of an excessive deficit in Croatia and a draft Council recommendation to put an end to the present excessive deficit situation.
Counter-Terrorist Asset-Freezing Regime
(10 years, 11 months ago)
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The Financial Secretary to the Treasury (Sajid Javid)
My noble Friend the Commercial Secretary to the Treasury, Lord Deighton, has today made the following written ministerial statement:
Under the Terrorist Asset-Freezing etc. Act 2010 (“TAFA 2010”), the Treasury is required to report to Parliament, quarterly, on its operation of the UK’s asset-freezing regime mandated by UN Security Council Resolution 1373.
This is the 12th report under the Act and it covers the period from 1 October 2013 to 31 December 2013. This report also covers the UK implementation of the UN al-Qaeda asset-freezing regime and the operation of the EU asset-freezing regime in the UK under EU regulation (EC) 2580/2001 which implements UNSCR 1373 against external terrorist threats to the EU. Under the UN al-Qaeda asset-freezing regime, the UN has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under the Al-Qaeda (Asset-freezing) Regulations 2011. Under EU Regulation 2580/2001, the EU has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under part 1 of TAFA 2010.
Annexes A and B to this statement provide a breakdown, by name, of all those designated by the UK and the EU in pursuance of UN Security Council Resolution 1373.
The following table sets out the key asset-freezing activity in the UK during the quarter ending 31 December 2013:
TAFA 2010 | EU Reg (EC) 2580/2001 | Al-Qaeda Regime UNSCR 1989 | |
|---|---|---|---|
Assets frozen (as at 31/12/2013) | £82,000 | £11,0001 | £58,0002 |
Number of accounts frozen in UK (at 31/12/13) | 54 | 10 | 26 |
New accounts frozen (during Q4 2013) | 0 | 0 | 0 |
Accounts unfrozen (during Q4 2013) | 7 | 0 | 3 |
Number of designations (at 31/12/2013) | 38 | 373 | 284 |
(i) New designations (during Q4 2013) | 0 | 0 | 4 |
(ii) Delistings (during Q4 2013) | 1 | 0 | 4 |
(iii) Individuals in custody in UK (at 31/12/2013) | 15 | 0 | 0 |
(iv) Individuals in UK, not in custody (at 31/12/2013) | 3 | 0 | 3 |
(v) Individuals overseas (at 31/12/2013) | 12 | 11 | 220 |
(vi) Groups | 8 (0 in UK) | 26 (1 in UK) | 62 (0 in UK) |
Individuals by Nationality | |||
(i) UK Nationals4 | 13 | n/a | n/a |
(ii) Non UK Nationals | 17 | - | - |
Renewal of designation (during Q4 2013) | 11 | n/a | n/a |
General Licences | |||
(i) Issued in Q4 | (i) 0 | ||
(ii) Amended | (ii) 0 | ||
(iii) Revoked | (iii) 0 | ||
Specific Licences | |||
(i) Issued in Q4 | (i) 4 | (i) 0 | (i) 1 |
(ii) Amended | (ii) 2 | (ii) 0 | (ii) 0 |
(iii) Revoked/Expired | (iii) 0 | (iii) 0 | (iii) 0 |
1This does not duplicate funds frozen under TAFA. 2This figure reflects the most up-to-date account balances available and includes approximately $64,000 of funds frozen in the UK. This has been converted using exchange rates as of 31/12/2013. | |||
3This figure is based on ex-designations where the UK freeze forms the prior competent authority decision for the EU freeze. 4Based on information held by the Treasury, some of these individuals hold dual nationality. |
Legal Proceedings
An appeal against designation made under the Terrorism (United Nations Measures) Order 2009 and TAFA 2010 was ongoing in the quarter covered by this report, brought by Zana Abdul Rahim. Two civil claims relating to designations are also ongoing, one brought by Gulam Mastafa against the Treasury and other Government Departments, and another brought by an individual, known as “M”, against the Treasury. The challenge under s63(2) of the Counter-Terrorism Act 2008 brought by Mohammed Al Ghabra against the Treasury and joined to be heard with his claim for judicial review against the Foreign and Commonwealth Office, was withdrawn by the claimant. In the quarter to 31 December 2013, no criminal proceedings were initiated in respect of breaches of asset freezes made under TAFA 2010 or under the Al-Qaeda (Asset-freezing) Regulations 2011.
Annex A: Designated persons under TAFA 2010 by name5
Individuals
1. Hamed Abdollahi
2. Bilal Talal Abdullah
3. Imad Khalil Al-Alami
4. Abdula Ahmed Ali
5. Abdelkarim Hussein Al-Nasser
6. Ibrahim Salih Al-Yacoub
7. Manssor Arbabsiar
8. Usama Hamdan
9. Nabeel Hussain
10. Tanvir Hussain
11. Umar Islam
12. Hasan Izz-Al-Din
13. Mohammed Khaled
14. Parviz Khan
15. Waheed Arafat Khan
16. Osman Adam Khatib
17. Musa Abu Marzouk
18. Khalid Mishaal
19. Khalid Shaikh Mohammed
20. Ramzi Mohammed
21. Sultan Muhammad
22. Yassin Omar
23. Hussein Osman
24. Muktar Mohammed Said
25. Assad Sarwar
26. Ibrahim Savant
27. Abdul Reza Shahlai
28. Ali Gholam Shakuri
39. Qasem Soleimani
30. Waheed Zaman
Entities
1. Basque Fatherland and Liberty (ETA)
2. Ejercito de Liberacion Nacional (ELN)
3. Fuerzas Armadas Revolucionarias de Colombia (FARC)
4. Hizballah Military Wing, including External Security Organisation
5. Holy Land Foundation for Relief and Development
6. Popular Front for the Liberation of Palestine—General Command (PFLP-GC)
7. Popular Front for the Liberation of Palestine (PFLP)
8. Sendero Luminoso (SL)
Annex B: Persons designated by the EU under Council Regulation (EC)2580/20016
Persons
Hamed Abdollahi*2. Abdelkarim Hussein Al-Nasser*3. Ibrahim Salih Al Yacoub*4. Manssor Arbabsiar*5. Mohammed Bouyeri6. Sofiane Yacine Fahas7. Hasan Izz-Al-Din*8. Khalid Shaikh Mohammed*9. Abdul Reza Shahlai*10. Ali Gholam Shakuri*11. Qasem Soleimani*
Groups and Entities
1. Abu Nidal Organisation (ANO)
2. Al-Aqsa e.V.
3. Al-Aqsa Martyrs’ Brigade
4. Al-Takfir and Al-Hijra
5. Babbar Khalsa
6. Communist Party of the Philippines, including New People’s Army (NPA), Philippines
7. Devrimci Halk Kurtulu Partisi-Cephesi—DHKP/C (Revolutionary People’s Liberation Army/Front/Party)
8. Ejército de Liberación Nacional (National Liberation Army)*
9. Fuerzas armadas revolucionarias de Colombia (FARC)*
10. Gama’a al-lslamiyya (a.k.a. Al-Gama’a al-Islamiyya) (Islamic Group—IG)
11. Hamas, including Hamas-Izz al-Din al-Qassem
12. Hizballah Military wing, including external security organisation
13. Hizbul Mujahideen (HM)
14. Hofstadgroep
15. Holy Land Foundation for Relief and Development*
16. International Sikh Youth Federation (ISYF)
17. Islami Büyük Dogu Akincilar Cephesi (IBDA-C) (Great Islamic Eastern Warriors Front)
18. Khalistan Zindabad Force (KZF)
19. Kurdistan Workers Party (PKK) (a.k.a. KONGRA-GEL)
20. Liberation Tigers of Tamil Eelam (LTTE)
21. Palestinian Islamic Jihad (PIJ)
22. Popular Front for the Liberation of Palestine—General Command (PFLP-GC)*
23. Popular Front for the Liberation of Palestine (PFLP)*
24. Sendero Luminoso (SL) (Shining Path)*
25. Stichting Al Aqsa
26. Teyrbazen Azadiya Kurdistan (TAK)
5For full listing details please refer to: https://www.gov.uk/government/publications/current-list-of-designated-persons-terrorism-and-terrorist-financing
6For full listing details please refer to: www.gov.uk
*EU listing rests on UK designation under TAFA 2010.
Boundary Commission for England
(10 years, 11 months ago)
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The Minister of State, Cabinet Office (Greg Clark)
I should like to inform the House that I have made the following reappointments under schedule 1 to the Parliamentary Constituencies Act 1986:
Mr David Elvin QC, reappointed as a Member of the Boundary Commission for England, effective until 11 January 2019; and
Mr Neil Pringle, reappointed as a Member of the Boundary Commission for England, effective until 30 June 2019.