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Yvonne Fovargue (Makerfield) (Lab)
1. When he next plans to announce progress on his legal aid proposals.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
10. What progress he has made on reducing the cost to the public purse of legal aid.
Bob Blackman (Harrow East) (Con)
14. What progress he has made on reducing the cost to the public purse of legal aid.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
I welcome the Minister of State, Ministry of Justice, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) to my Front-Bench team. I also inform the House that Lord Faulks has joined my team in the House of Lords. I pay tribute to Lord McNally, who has left the Front-Bench team, for the excellent work that he did on behalf of the Government.
I will shortly publish final proposals covering the two areas that are subject to consultation in the “Transforming Legal Aid: Next Steps” document: the procurement of criminal litigation services and reform of the advocacy fee scheme. I anticipate that the total saving from the transforming legal aid proposals will be £220 million per year by 2018-19. That is in addition to the £320 million that has been saved as part of the Government’s previous reforms, which were enacted in the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
Yvonne Fovargue
Trafford law centre closed last week, Barnet law centre faces closure in March, and many more advice agencies and citizens advice bureaux face closure or redundancies, which will reduce services for the most vulnerable. What assessment is being made of the impact of those closures, which have been caused by the cumulative effect of cuts to civil legal aid and other cuts, through an increased demand on other public services, such as the health service?
Chris Grayling
We will clearly continue to review those matters. The decisions that we are making are of course difficult, but we have to make them because we have to bring down the cost of legal aid to deal with the enormous financial challenges that we face. We would not have wished to take these decisions, but given the inheritance that we received from the last Government, there is no option but to do so.
Oliver Colvile
Will my right hon. Friend confirm that the reforms are designed to impact on those who receive the most in legal aid fees, while protecting those at the lower end of the scale?
Chris Grayling
I can confirm that. In taking a range of difficult decisions, we have sought to ensure that the impact is felt most significantly higher up the income scale. I am well aware that people at the junior end of the income scale face considerably more financial pressure than those who are further up. We have sought to put together a package that has a disproportionate impact further up the income scale, for example through our changes to very high cost case fees.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
The Justice Secretary’s plan A of dismantling the independent legal Bar seems to be going very well. Will he tell us about his plan B and the public defender service?
Chris Grayling
I am having to take difficult decisions on the fees that we pay for the independent Bar, but I have absolutely no intention of dismantling it. It is an important part of our justice system and will continue to be so.
Sir John Randall (Uxbridge and South Ruislip) (Con)
My right hon. Friend is to be congratulated on trying to get the costs of legal aid down. He knows that I have concerns about the impact on the criminal Bar. What alternative funding has he looked at or will he be looking at to get costs down?
Chris Grayling
We have looked at a variety of ways of minimising the impact on different parts of our justice system of the difficult decisions that we have had to take. I reassure my right hon. Friend that the decisions that we are taking on legal aid are in proportion to the decisions that we are having to take in the rest of the Department—the legal aid budget is coming down by the same proportion as the overall departmental budget. In relation to the Bar, I have sought, where I can do so, to put in place ameliorating measures, such as the offer to introduce a staged payment system, which at the very least will improve the cash flow of working barristers, even if we have to take tough decisions about the amount that we pay.
Sadiq Khan (Tooting) (Lab)
I, too, welcome the Minister of State, Ministry of Justice, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) to his position and congratulate him on his promotion.
The Government’s salami-slicing of civil legal aid over the past three years and of criminal legal aid over the next 15 months will, according to independent experts, deny hundreds of thousands of citizens access to decent advice and representation. Law centres and high street firms are closing down, as we have heard, and junior barristers are leaving the profession. That should worry us all. If the Justice Secretary was provided with costed proposals that would make similar savings over the next 15 months but without the devastating consequences, would the Government reconsider their plans?
Chris Grayling
I sometimes find the Opposition’s attitude completely breathtaking. It is but two and a half years since they attacked our proposals to reform civil legal aid, saying that the savings should be found from criminal legal aid instead. Now they appear to have done a complete U-turn. Is the right hon. Gentleman prepared to commit in the House today that if a Labour Government are elected at the next election, they will reverse the cuts? I suspect that the answer is no.
Robert Neill (Bromley and Chislehurst) (Con)
2. What assessment he has made of the potential role of mediation in reducing the number of court cases.
Dr Matthew Offord (Hendon) (Con)
9. What assessment he has made of the potential role of mediation in reducing the number of court cases.
The Minister of State, Ministry of Justice (Simon Hughes)
The Government have put in place an extensive awareness strategy, and we believe that the more people can attend mediation, the more significant the impact will be on reducing the number of applications made to court. We have increased the legal aid budget for family mediation. There are data about the amount of mediation that takes place, but we cannot tell specifically who has attended mediation rather than gone to court.
Robert Neill
I congratulate the right hon. Gentleman on his appointment. Does he agree that mediation is well established in the commercial law field and growing in the family and matrimonial law field, but that we are perhaps missing a trick in two areas? The first is in ensuring that more use is made of mediation in land compensation and related planning disputes. Will he meet me to discuss whether the Bill on High Speed 2 gives the Government an opportunity to promote that and to create greater awareness among fellow Departments, and—
Mr Speaker
Order. I say to the hon. Gentleman that if he was paid by the word when he was practising at the Bar, he must have become a very rich man indeed.
Simon Hughes
First, the whole Government are committed to mediation being used whenever possible, although it is not always practical. HS2 and other such matters are well beyond my brief, and I am not going to be that brave on my first outing.
Dr Offord
In recent months, I have dealt with several cases for constituents, including one in which a constituent was presented with a £15,000 legal bill for civil court costs over the siting of his rubbish bin. Another constituent lost a case after failed joint legal action with the local council, when his wall collapsed after being damaged by a utility company. Will the Minister outline what measures the Government are taking to increase the number of such cases that are taken to mediation services before such costly legal action occurs?
Simon Hughes
The hon. Gentleman is quite right to identify the costs involved. In matrimonial and other matters, if there is mediation the average cost to both parties is £500; if they go to law the average cost is £4,000. Mediation takes 110 days on average; going to law takes 435 days. The Government are committed to ensuring that we use mediation wherever possible, and we will collectively promote it heavily over the next few weeks. There will be a round table and a web interchange, and it will be one of the priorities for me and the Ministry of Justice.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
The whole House agrees that mediation is preferable to ordinary members of the public falling into the hands of lawyers. However, given that the Government’s emphasis on mediation is largely driven by cost, is there not a danger that in family law, women will be left vulnerable to violence and abuse because of the emphasis on mediation rather than immediate legal redress?
Simon Hughes
That issue is very important and well understood. Under the Children and Families Bill, which is currently going through Parliament, there will be a requirement that people consider whether mediation is appropriate. We are clear that in domestic abuse cases, it absolutely may not be appropriate, and there will be no requirement of mediation in cases in which it would be to the disadvantage of either party or to the children of the family.
Valerie Vaz (Walsall South) (Lab)
17. What guarantee can the Minister give that both parties will have access to legal advice before and during mediation?
Simon Hughes
At the moment, legal advice and legal aid cover mediation. Someone does not necessarily need legal advice to go into the process, although the mediators may recommend that they need legal advice, which will be available in a legally aided way. It is often necessary to have lawyers involved to draw up the agreement that the mediators have reached, and that will also be publicly fundable by the legal aid service if someone is within the eligibility limits.
Mr Jonathan Djanogly (Huntingdon) (Con)
Will the Minister advise the House on the take-up of mediation in the small claims courts since the threshold for small claims was increased to £10,000?
Simon Hughes
I do not have that figure in front of me, but I will willingly give it to the hon. Gentleman and make it known more widely. I am clear that we have a duty to re-engage people with the idea that mediation is available. The figures have gone down in some areas in the past year, and we want them to go up. We hope to be able to report a significant increase in the number of people using mediation by the end of the year, but I will of course give him the figures.
Mr Andy Slaughter (Hammersmith) (Lab)
We know that the Secretary of State is not a big fan of due process, because otherwise he would not have briefed The Times this morning on how the criminal justice and courts Bill will keep developers and other Tory donors happy by curbing judicial review—a subject on which he has not yet responded to consultation. However, Ministers should play by the rules when answering questions in the Chamber, so will the Minister correct the record for Justice questions on 17 December, when the Secretary of State said three times that there would be no change in the number of mediations, even though his Department’s figures show a year-on-year fall of 35%?
Simon Hughes
First, on matters in the legislation to be announced I caution the hon. Gentleman to be careful of being overly critical.
Simon Hughes
It is certainly not all in the press, and the Bill might be much more encouraging to people than the hon. Member for Hammersmith (Mr Slaughter) might wish it to be. On the take-up of mediation, we do not have the figure for a full year but it is unarguable that figures have gone down. We are making sure, and we are hoping, that when we have the full-year figures, we will see that we have reversed that. I will keep the House and the hon. Gentleman updated about those figures over the year ahead.
Julian Sturdy (York Outer) (Con)
3. What plans he has to ensure that young offenders leave custody better equipped to avoid a life of crime.
Karl MᶜCartney (Lincoln) (Con)
5. What plans he has to ensure that young offenders leave custody better equipped to avoid a life of crime.
Steve Brine (Winchester) (Con)
7. What plans he has to ensure that young offenders leave custody better equipped to avoid a life of crime.
John Howell (Henley) (Con)
11. What plans he has to ensure that young offenders leave custody better equipped to avoid a life of crime.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
The Government will introduce a new pathfinder secure college in 2017, which will equip young offenders with the skills and qualifications they need to pursue a life free from crime. We are also enhancing education provision in young offenders institutions, and taking steps to improve the resettlement of young people leaving custody.
Julian Sturdy
Last year the York and North Yorkshire Probation Trust community payback team joined forces with local residents to carry out a spring-clean in York. Graffiti was painted over, broken fences fixed, and public spaces brought back to life. Will the Minister join me in encouraging more initiatives of that kind, which provide young offenders not only with valuable skills, but also a sense of community responsibility?
Jeremy Wright
I agree with my hon. Friend and think that where the court deems it appropriate, offenders young and old should be engaged in putting something back into the communities they have damaged by their offending. I also think it important that communities see that happening.
Karl MᶜCartney
Will the Minister confirm that young offenders such as those in Her Majesty’s Prison Lincoln who have worked with Gelder Group, a forward-thinking construction company in Lincolnshire, say that better education and skills would help them stay away from crime once they are released from custody?
Jeremy Wright
My hon. Friend is right: that is exactly what we hear from young offenders, and evidence is overwhelming that young offenders who engage in education, get qualifications, and go on to find work, have a better chance of staying out of trouble. That is exactly what we want to see.
Steve Brine
Does the Minister agree that custody in secure colleges provides an opportunity to end the chaos that many of these children face and to impose boundaries that have all too often been lacking in their lives? Will he stick rigidly to the cross-departmental approach that was set out so intelligently in the “Transforming Youth Custody” paper, which is now a year old?
Jeremy Wright
We want to see a cross-Government approach to this, and my hon. Friend is right to say that many other Departments have an interest in what we are doing. He is also right that a period of stability is vital. It may be a relatively short period of incarceration for those young people, but it is probably one of the few opportunities they have had to be clear about where their next meal will come from and where they are going to sleep, and to give us the space to address some of their significant problems. That is a large part of what we intend to do.
John Howell
As well as providing support to young offenders to turn their lives around, will the Minister say what regime is in place so that a young offenders institution becomes a deterrent for going back there?
Jeremy Wright
It is certainly important that the environment of a young offenders institution does not encourage those in it to think it is comfortable and to want to go back. For that reason, my hon. Friend will be encouraged to hear that we are looking at changes to the incentives and earned privileges scheme in young offenders institutions, in the same way as we have considered changes in the adult estate. We want to ensure that where young people have access to privileges, they get them only when they have earned them.
Keith Vaz (Leicester East) (Lab)
A report published by the chief inspector of prisons on 17 December last year suggested that it was easier for inmates to get drugs than clean underwear in prison, and a number of young offenders acquire a drugs habit in prison. How can we break the cycle when they leave?
Jeremy Wright
The right hon. Gentleman is right to say that drugs in prison—whether adult prisons or young offender institutions—are a continuing problem, but as he and I have discussed, that problem is changing. Increasingly we see good reductions in mandatory drug testing rates for adult institutions—down from some 25% positive results to nearer 7%—but an increase in problems with drugs that are not in and of themselves illegal, but which should not be misused in prisons. For that reason we need to change the testing regime and give ourselves more tools to address the problem, which is what we seek to do.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
Under the previous Government, the youth offending teams brought together professionals from different areas to help to tackle youth offending and bring down youth crime. What is the Minister doing to invest in mental health services and drug rehabilitation services in particular? Skills are important, but, if the issues that affect many of our young offenders are not addressed, they are likely to return to crime.
Jeremy Wright
The hon. Lady is right that youth offending teams do valuable work. They continue to do that work, of course, supported by the Youth Justice Board. We are looking at the moment at how we can strengthen youth offending teams and have greater support from the Youth Justice Board to ensure that high standards are maintained. She is right, too, that one of the advantages of the youth offending team model is that it brings together a variety of different agencies, including those within the health sphere. She is right that mental health questions, in particular, are often relevant to addressing wider reoffending needs.
Bill Esterson (Sefton Central) (Lab)
Children in care are some of our most vulnerable young people, yet far too many end up in prison due to a lack of support when they leave care. Will the Minister tell us what work he is doing with colleagues in other Departments to support care leavers, and to reduce the number of young people who turn to crime, both while in care and when they have left care?
Jeremy Wright
I work closely with the Under-Secretary of State for Education, my hon. Friend the Member for Crewe and Nantwich (Mr Timpson), the Minister with responsibility for children and families, who, as the hon. Gentleman knows, takes a close interest in the welfare of children in care and those who leave care. He is right that a connection is, unfortunately, often made between those leaving care and those who end up in the criminal justice system, but it is important that we address the needs of young offenders throughout the process. He will appreciate that the Ministry of Justice encounters these young people quite late on in that process, but he is right that there should be co-ordination and that will continue.
Dan Jarvis (Barnsley Central) (Lab)
Recently, a jury inquest into the death of a 17-year-old at a young offenders institution indicated a string of failures by the authorities to safeguard the life of a vulnerable boy. In the past 10 months, there have been 12 deaths in custody of those aged 24 or younger. In the past 10 years, there have been 163 deaths. Will the Secretary of State and the Minister consider inviting the Justice Select Committee to undertake a review into how deaths of young people in custody can be prevented?
Jeremy Wright
The hon. Gentleman is right to focus on this issue. Every one of those cases is a very real personal tragedy and a worrying sign for the system, but that does not mean that we should react in the wrong way. I think it is appropriate that we think very carefully about what level of investigation is necessary. I can tell the hon. Gentleman, as he may already know, that, in relation to each death, a variety of different investigations take place both internally within the prison system and from the coroner, and, in many cases, from others too. That does not mean, however, that there is not perhaps a case for looking more broadly at what wider lessons can be learned. That is exactly what we are considering at the moment. It is what I am applying my mind to now. I will let him know as soon as I can what we think the right conclusions should be.
Philip Davies (Shipley) (Con)
4. What recent discussions he has had with judges on the judgment of the European Court of Human Rights on whole-life tariffs.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
I have had no recent discussions with the judiciary about the Strasbourg Court judgment in Vinter and others about whole-life orders. The reason for that is that the Government have been arguing in the Court of Appeal that whole-life tariffs are wholly justified in the most heinous cases. That process is continuing and we await the Court’s decision with interest.
Philip Davies
Mr Justice Sweeney has already refused to give a whole-life tariff to a murderer due to a ruling from the European Court of Human Rights, and he has deferred the sentencing for the murderers of Drummer Lee Rigby, who most right-thinking people think should get a whole-life tariff. When are we going to withdraw from the European convention on human rights and the increasingly barmy European Court of Human Rights, so that we can ensure that a life sentence means a life sentence for the murderers of Lee Rigby?
Chris Grayling
I agree with my hon. Friend’s sentiments. We have gone to the Court of Appeal to ensure we can continue to give whole-life tariffs in this country. My view is that this should always be a matter for Parliament, but as he knows, while we have good collaborative relationships across the coalition and while we agree on many things, there are some things we do not agree on, and this is one of them, so I am afraid that wholesale change to our relationship with the European Court of Human Rights, which I personally think is urgently needed, will have to await the election of a majority Conservative Government.
Jeremy Corbyn (Islington North) (Lab)
Will the Justice Secretary think about what he just said? He might agree or disagree with an individual decision of the ECHR, but does he not recognise that having a Europe-wide convention which protects the human rights of everybody in every country that is a signatory to it is good for all of us, including victims of irrational justice decisions in other jurisdictions? Will he not declare that we support the idea of a European convention on human rights and that we will not withdraw from it?
Chris Grayling
I am afraid that the hon. Gentleman and I take a different view on this matter. I simply refer him to the recent comments by Lord Judge, the previous Lord Chief Justice and distinguished judicial figure who commands respect around the country. He said he believed the Court had overstepped the mark, and I agree with him. It is a tragedy, given the Court’s history, but it is the reality, and it has to be dealt with.
Dr Julian Huppert (Cambridge) (LD)
Does the Justice Secretary think it helps those of us campaigning for LGBT+ rights in Russia, for example, or trying to persuade Belarus to behave more like a responsible country for this country to be so negative about the European convention on human rights and the European Court? These are our standards, and we should be trying to export them, not pull away from them ourselves.
Chris Grayling
Fundamentally, in my opinion, the problem is that the Court is interpreting the convention as an unfettered jurisprudence that allows it to move into areas never envisaged by the people who wrote the convention. My clear view is that the Court is moving into areas that are matters for national Parliaments and which do not belong within the remit of an international court. It is a matter of disagreement between the coalition parties—we are open and honest about that—but we will leave it to the electorate in 14 months to decide which of our approaches they prefer.
Barry Gardiner (Brent North) (Lab)
Would the Secretary of State care to reflect on the role of the European Court of Human Rights in protecting fundamental freedoms in this country that he would support? For example, it was due to the Court that journalists were not forced to reveal their sources and that people were allowed to go on wearing crucifixes when they had been told not to wear them. These are essential and fundamental freedoms that I know he agrees with. Would he care to comment on that?
Chris Grayling
Where I differ is that I do not believe it is necessary to have an international court deciding things that should be a matter for this Parliament and our courts. That is what needs to change.
Mr Julian Brazier (Canterbury) (Con)
I strongly support my right hon. Friend’s stand on this matter. Does he agree that just one example of how far the European Court of Human Rights has moved from its original foundations is that the British Government and the lawyers who were instrumental in setting it up were also responsible for the largest programme of judicial executions—of Nazis at Nuremburg—in modern British history?
Chris Grayling
It is certainly the case that the jurisprudence of the Court has moved a long way from where it started, and some things have clearly changed for the better, but I would argue now that the decisions coming out of the Court are matters that should be addressed in this and other Parliaments. Of course, this is an area where there are divisions between all the parties in the House, and I have no doubt that it will be an area of lively debate as we approach the general election, when the people will decide.
Paul Flynn (Newport West) (Lab)
6. What steps he is planning to take to improve the performance of HMP Oakwood.
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
We are working closely with the contractor at Oakwood to implement the recommendations in last year’s report by Her Majesty’s inspectorate of prisons. As with other new prisons, Oakwood has experienced initial challenges, but action has been taken and the prison’s performance is improving. We expect that improvement to continue over the next 12 months.
Paul Flynn
A prison officer on the scene described the disturbance as a full-scale prison riot, but the Government and the contractor described it as “concerted ill-discipline”—that might be a perfectly adequate description of the behaviour of Back-Bench Tory MPs. I urge the Government to abandon this PR spin and for once to tell the simple truth.
Jeremy Wright
I can tell the hon. Gentleman that the term “concerted indiscipline” has been used by both Governments to describe incidents that have occurred in both the public sector estate and the private sector estate. There has been no cover-up. I went to Oakwood 10 days ago and spoke to an officer engaged in the incident. I also spoke to a prisoner who, although not involved, was there at the time. I saw some of the CCTV coverage, too, so I am very clear about how serious the incident was, but to describe it as a full-scale riot is in my view inaccurate. Twenty prisoners were involved in the incident, out of a total of 1,600. The wing is now back in use and the issue was professionally resolved. That is what we would expect from prisons in the private or public sector. I do not think it is wise to overstate the significance of this incident in the context of what happens in other places.
Mr Peter Bone (Wellingborough) (Con)
Does the Minister agree that one way to relieve pressure on Oakwood would be to reopen the prison in Wellingborough, which took category C prisoners? Will he update the House on what progress has been made regarding Wellingborough?
Jeremy Wright
Even by my hon. Friend’s high standards, that is inventive. As I have said to him before, we will of course consider again, as he has asked me to, whether Wellingborough is a suitable venue for a large new prison for the London area, but that is entirely separate from the judgments we need to make about how the rest of the estate operates. However, I will of course keep him informed as our thinking develops.
Ian Lucas (Wrexham) (Lab)
The coalition has characteristically dealt with the difficult decision of whether the prison at Wrexham will be in the public or private sector by deferring it, probably beyond the next general election. How can we prepare to ensure that the type of incident that occurred at Oakwood does not occur at Wrexham in 2017, when we do not know how the prison will be run?
Jeremy Wright
I am not sure whether the hon. Gentleman’s case is that what happened at Oakwood was because it was privately run or because it was too big.
Jeremy Wright
That is very helpful. Let me help the right hon. Gentleman and his hon. Friend. In relation to the size of the prison, it was the last Labour Government who decided to set it at 1,600 prisoners, and in relation to its running, it was the last Labour Government who decided to put the management of the prison up for competition and not retain it in the public sector. Therefore, on both counts it is not us on the Government Benches whom the right hon. Gentleman should be talking to; it is those on his own Benches.
In relation to Wrexham, we have quite properly said that there is an initial decision to be made, which is whether a large new prison should be built at Wrexham. As the hon. Gentleman knows, we were asked to build it on that site by his own council and a large number of other members of the Labour party in north Wales. The decision to be taken now is who should build it; we will make a decision about who should run it in due course.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Will my hon. Friend look at what the chief inspector of prisons said to the Select Committee on Justice this morning about Oakwood, which is that there are special problems in managing very large prisons and in new prisons? When both things are brought together, there are surely training and staffing requirements that the Department needs to consider.
Jeremy Wright
There are undoubtedly issues that arise with every new prison. New prisons in both the public and the private sector, and of all sizes, have encountered these kinds of difficulties. My right hon. Friend is right, too, that it is necessary to pay close attention to the training needs of staff. We will do that—that is already under way—and both the contractors and the MOJ are keen to ensure that these issues are addressed.
Jenny Chapman (Darlington) (Lab)
I am afraid this prison is two years old now, and we would have hoped to see some progress. The Minister is being way too complacent about the failure of G4S at Oakwood. Given the delay in implementing the probation changes, due to fears of public safety, how do we know that he will not be equally tolerant of failure when he privatises probation?
Jeremy Wright
There is no complacency on this issue at all. Let us get the facts right. Oakwood has been operating at full capacity since February last year, and it is not unheard of that prisons—in the public or private sector, as I said—have difficulties of this nature in the first two years of operation. That does not mean that we do not address those difficulties, but it is important to put them in context. If I may ever so gently say so to the hon. Lady, when I was at Oakwood 10 days ago, one of the comments made to me by staff who work there was that it does not help their already difficult job when their workplace is used for party political purposes to exaggerate what is going on there.
Priti Patel (Witham) (Con)
8. What recent steps he has taken to support victims of crime.
The Minister for Policing, Criminal Justice and Victims (Damian Green)
The Government are giving more support to victims, and giving them a louder voice in the criminal justice system. We have introduced a new victims code, which gives victims more help throughout the criminal justice process. We are also exploring ways of reducing the distress caused to victims of sexual violence by cross-examination in court, and we aim to provide up to £100 million—more money than ever before—to help victims to cope and recover from crime.
Priti Patel
My right hon. Friend is aware of my long-standing support for victims of crime. He is also aware that my constituent Marie Heath lost her job because she had to take time off work to attend the trial of criminals who murdered her son in Frankfurt. Does he agree that employers should show sympathy to employees who are bereaved in such horrific cases?
Damian Green
The whole House will sympathise with my hon. Friend’s view, and, in particular, with her constituent Marie Heath. The Government fund a national homicide service which supports bereaved people by, for instance, giving them access to support and guidance, helping them to explain their position to their employers, and enabling them to gain access to legal advice.
Ann Coffey (Stockport) (Lab)
The extent to which sexual attacks and exploitation affect the way in which victims give evidence in court is poorly understood, and the difficulties that such people experience when giving evidence are often used to undermine them and their credibility as witnesses. The wider use of registered intermediaries would help to ensure that the evidence of the best possible quality was obtained during cross-examination. I know that the Minister is very supportive of that idea, but what is his view of the barriers that still prevent the use of registered intermediaries?
Damian Green
There are certainly no barriers as far as I am concerned. I entirely agree with the hon. Lady about the importance of registered intermediaries. As she knows, as well as introducing a victims code, we are taking other steps to help particularly vulnerable victims of the type that she has described, which include the introduction of changes in the way in which they can give evidence. In some cases video evidence can be used, and we are consulting on how to surmount the problems posed by the multiple cross-examination of vulnerable witnesses in other cases. Obviously, we will continue that work.
Mr Crispin Blunt (Reigate) (Con)
One of the Government’s objectives is to ensure that victims receive much more compensation and restoration from offenders themselves. What progress is being made in that regard?
Damian Green
I am pleased to report to my hon. Friend that we are making significant progress. Increased use of the victim surcharge means that more money is available for victims’ services than ever before, and we hope in time to double the amount that is currently available from £50 million to £100 million. I am sure that the whole House will welcome the fact that the extra money will come from offenders themselves.
Helen Jones (Warrington North) (Lab)
As the Minister will know, those who deal with victims of domestic violence fear that the services they currently receive will not be maintained when police commissioners take over the provision of support for victims, and those in areas such as Warrington still do not know how much money will be provided in April. Is he prepared to give the House a commitment that support for those very vulnerable victims will be maintained?
Damian Green
Obviously that will be a decision for individual police and crime commissioners, but they will all be very aware of the need to help, in particular, the most vulnerable victims. As I have said, not only will the total budget available be greater than ever before—[Interruption.] The hon. Lady says that I am not deciding how the budget is distributed. No, I am not: the decision is being made by elected people at local level, and I think that that is more likely to provide locally sensitive and tailored services than a decision made by someone sitting in London.
Ian Swales (Redcar) (LD)
Local commissioning of victim support will start in October. Will the Minister reject the proposal to base the funding on population rather than on the number of victims, so that police authority areas such as Cleveland do not lose out?
Damian Green
I do not agree with my hon. Friend. In particular, I do not agree with his suggestion that his area will lose out. The fact is that every area in the country will receive more money under our proposed system than it was receiving under the previous system, so no one will lose out.
Derek Twigg (Halton) (Lab)
Does the Minister agree that victims of assaults, especially serious assaults, should be warned when the offenders are due to leave prison? If he does agree, will he tell me what he is doing to ensure that that happens?
Damian Green
I do agree with the hon. Gentleman, and the system is there to enable that to happen. However, if he can cite individual cases in which it is not happening, I urge him to write to me, and I will investigate.
Charlie Elphicke (Dover) (Con)
12. What assessment he has made of options for reform of real property boundary disputes; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
The Ministry of Justice is in the process of completing the initial scoping study on the issue of property boundary disputes announced by my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) in February last year in her reply to my hon. Friend’s written questions on this subject. The Department will publish its findings in due course, when Ministers have considered the options.
Charlie Elphicke
I thank the Minister for that answer. Property boundary disputes are stressful and cause a lot of heartache, and cost a lot of money unnecessarily. May I urge the Minister to move ahead on this and consider introducing reform proposals to this House?
Mr Vara
I agree with my hon. Friend that boundary disputes can often be bitter, protracted and indeed expensive. I can assure him that the Department is working at pace to come up with the conclusions of the scoping study, and we hope to report on that as soon as is practicable.
Mr Robert Buckland (South Swindon) (Con)
13. What effect he expects the victims code to have on the experience of victims in the criminal justice system.
Graham Evans (Weaver Vale) (Con)
15. What effect he expects the victims code to have on the experience of victims in the criminal justice system.
The Minister for Policing, Criminal Justice and Victims (Damian Green)
The victims code will have a positive effect on the experience of victims in the criminal justice system. The new code gives victims clearer entitlements; a louder voice, including a right to read a victim personal statement aloud; enhanced entitlements for victims of the most serious crime, and vulnerable or intimidated and persistently targeted victims; and a more effective means of redress.
Mr Buckland
I thank my right hon. Friend for that answer. How will he make sure restorative justice measures are truly victim-led and that those who wish to seek restorative justice at a stage later than the sentencing process will be able to do so easily?
Damian Green
I am happy to tell my hon. Friend that of the money the police and crime commissioners will be using, up to £18 million is specifically ring-fenced for restorative justice services. That funding will help us to ensure that restorative justice is available at all stages of the process so that victims can make properly informed decisions about whether they want to participate in restorative justice at the point in the process that best serves their needs.
Graham Evans
What assessment has the Minister’s Department made of how the victims code will support the victims of human trafficking?
Damian Green
The new victims code provides an enhanced service for victims of the most serious crime and that includes victims of human trafficking. This will enable them to have quicker updates on the status of their case and to have referral to pre-trial therapy and counselling, which is often appropriate in those cases.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The Minister must have seen in the national newspapers this morning the incidents of alleged rape and how in some parts of the country there is very poor follow-up of these allegations. Will his victims code help those women who have been raped and then find that the police do not take their case seriously enough?
Damian Green
I agree that the point made in this morning’s reports is very serious, and I can assure the House that it is not just the victims code that will help. We have written to PCCs and chief constables encouraging them to use these recently issued data in conjunction with the data on referrals to the Crown Prosecution Service to improve all forces’ response to rape. We have also involved the Director of Public Prosecutions in setting up a scrutiny panel to look at how forces deal with rape in certain areas.
Alison McGovern (Wirral South) (Lab)
The criminal investigation into the Hillsborough disaster is still ongoing, but a very great number of people undoubtedly suffered, as we saw on last night’s “Newsnight”—I hope the Minister and Secretary of State will watch it if they have not already done so—when the survivors told their harrowing stories. May I simply ask the Minister to confirm that his Department will make available all support necessary to bring them justice as soon as possible?
Damian Green
When the hon. Lady refers to my Department, I should point out that it is the Home Office, where I also have a responsibility, that leads on Hillsborough. We are absolutely determined to do what she says through the Independent Police Complaints Commission investigation, which is ongoing, and the coroner’s action, which is due to start next month. I know the families are very much looking forward to those as a way of getting to the truth.
Katy Clark (North Ayrshire and Arran) (Lab)
16. What his policy is on the tendering of shared services; and if he will make a statement.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
As part of the next generation shared services programme, the Ministry of Justice is reviewing the options available for the future delivery of our shared services.
Katy Clark
A foreign multinational that has been awarded hundreds of millions of pounds of Government money to undertake work that was previously carried out in the public sector has admitted to exploring options to offshore that work. Surely the Secretary of State accepts that it is the Government’s responsibility to maximise employment in this country. Will he undertake to intervene if necessary to prevent that work from being offshored?
Chris Grayling
I have a track record of saying that I do not believe in offshoring UK jobs, and I will always look carefully at any such situation that arises. Whenever possible, the Government should prevent that from happening. I cannot say that it will never happen, however, as these are often decisions with a number of factors behind them, but I am not sympathetic to the offshoring of UK jobs.
Mr Jim Cunningham (Coventry South) (Lab)
18. What progress his Department has made on bailiff reform.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
We have legislated to set out the process that bailiffs must follow when taking control of goods, and to introduce a simplified, transparent fee structure. Further legislation for a new certification process will ensure that only fit and proper individuals can work as bailiffs. These reforms will come into force in April.
Mr Cunningham
I welcome that simplification, but what is the Minister doing to protect vulnerable people from some of the excesses of bailiffs?
Mr Vara
May I first put on record what a doughty campaigner the hon. Gentleman has been on this issue? I very much hope that the proposals that we will be putting in place in April will meet with his approval. We are putting in place a governance system that will make it absolutely clear when bailiffs—or enforcement agents, as they will be called—can seize goods and when they cannot, as well as how they should deal with vulnerable people. We are also putting in place a fee structure that is clearly understood and, most importantly, ensuring that enforcement agents have mandatory training and receive a certificate. If anyone acts as an enforcement agent without that certification, they will be committing a criminal offence.
Mark Pawsey (Rugby) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Lord Chancellor and Secretary of State for Justice (Chris Grayling)
This Government are committed to reducing the number of foreign nationals in our prisons. While Labour was in power, the number of foreign prisoners more than doubled, at great expense to the taxpayer. Since 2010, we have begun to clear up Labour’s mess. We have reversed that rising trend, and we are now looking at every option to send more foreign criminals back to serve their sentences in their home countries. Earlier this month, the Under-Secretary of State for Justice, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright) travelled to Nigeria to sign a compulsory prisoner transfer agreement between our two countries, and I congratulate him on doing that. This is a significant achievement for the UK, particularly as Nigeria has one of the highest foreign national populations in our prisons. The agreement will be ratified in the coming months, and we expect to see Nigerian offenders being sent home within a year.
Mark Pawsey
The Secretary of State is working hard to improve the chances of those who have completed a prison term. Does he agree that locally managed schemes such as Future Unlocked, which he visited in Rugby last year, have a key role to play in achieving that objective?
Chris Grayling
I very much enjoyed that visit, and I pay tribute to the work being done in Rugby. In setting out our probation reforms, we have taken steps to ensure that smaller organisations not only have the opportunity to participate in that way but have the simplest possible mechanisms to enable them to do so, with transparency of risk in the supply chain, with common contracts to save on bureaucracy and with measures to prevent anyone being used as what is commonly known as bid candy. We want to guarantee that supply chains will remain intact—without changes—through our consent.
Sadiq Khan (Tooting) (Lab)
Having seen the way in which the Ministry of Justice has been taken for a ride by G4S at Oakwood prison and by ALS in relation to the court translator services—both of which contracts were awarded by this Government—will the Secretary of State tell us just how bad a private company running a probation contract will need to be in order to be sacked?
Chris Grayling
Let me tell the House what being taken for a ride is. It is what happened under the last Government, under the contracts for electronic tagging, and we have been dealing with that and clearing up the mess in the past few months. I will take no lessons from Labour Members, who presided over an appalling system of contract management and exposed the taxpayer to considerable risk, leaving behind the mess that we have had to clear up. They are shocking, they were shocking, and I will take no lessons from them.
Sadiq Khan
The Justice Secretary has been in the job long enough to understand that the way it works is that I ask the questions and he answers them. He and the Minister with responsibility for probation claimed that the main reason for privatising probation is that the savings can be used to provide probation services to those who currently do not receive them as their sentence is less than 12 months. The Justice Secretary has refused to publish costings and to pilot his plans, and he is already two months behind schedule. I will ask him a simple question, and I hope to get an answer: by what date will all those on sentences of less than 12 months be receiving through-the-gate supervision?
Chris Grayling
We will begin rolling out the part of the reforms set out in the Offender Rehabilitation Bill in the latter part of this year. I say to the right hon. Gentleman that he represents a party that was in government for nearly 15 years, during which time tens of thousands of offences were committed by people on short sentences who had no supervision when they left prison. The Labour Government did nothing about it. We are doing something about it, and it is not before time.
Dr Julian Huppert (Cambridge) (LD)
T2. The Marriage (Same Sex Couples) Act 2013 is one of the great achievements of this Government but it left a few issues unresolved, one of which relates to humanist weddings, which are very popular in Scotland but currently not allowed here. The Act required the Secretary of State to conduct a review. What progress has been made on it, so that we can get on with allowing such weddings to happen?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
My hon. Friend is right to say that the Government made a commitment to have a review, and we will do that. We will be starting it soon, and we will have a consultation. We intend to have the results of the review by the end of the year.
Mr William Bain (Glasgow North East) (Lab)
T3. The Secretary of State had previously been adamant that no further contracts would be awarded to Serco until it had received a clean bill of health from the Serious Fraud Office. Will he therefore explain why he awarded it a contract for the extension of Thameside prison on 20 December? When is a contract not a contract?
Chris Grayling
I can only assume that the hon. Gentleman was not in the House last June when I made the original statement about the electronic tagging situation and said that I had decided, in the interests of justice in this country, to proceed with two extensions at prisons run by the two organisations involved. I was completely clear about it, I explained why at the time and he clearly was not listening.
David T. C. Davies (Monmouth) (Con)
T4. Residents in Monmouthshire were recently very concerned when a man convicted of manslaughter absconded from Prescoed open prison. Will the Minister ask his officials to look into the risk assessments being used before prisoners are transferred to Prescoed to ensure that they are suitably rigorous?
The Parliamentary Under-Secretary of State for Justice (Jeremy Wright)
We expect that the risk assessments in all these cases are rigorous. My hon. Friend is right to draw attention to this case, and I will, of course, look into it and find out what has happened.
Bridget Phillipson (Houghton and Sunderland South) (Lab)
T7. Sunderland’s courts are in urgent need of rebuilding, as the Department has previously recognised, spending nearly £2 million in preparation. I am grateful for the meeting that took place with the Minister, but we have been in limbo on this since 2010. When will a decision be taken?
Mr Vara
As the hon. Lady acknowledges, we have had a meeting, and I can assure her that of the 500 buildings the court estate encompasses, the ones to which she refers are very much at the forefront. She will appreciate, however, that we have a large estate and we keep matters under review, and we will keep her and her colleagues informed as soon as we are able to do so.
Ian Swales (Redcar) (LD)
T5. More than half of the prisoners serving indeterminate prison sentences have passed their tariff date. Will the Secretary of State look at the parole and risk assessment process and review all cases where prisoners have complied with their sentence conditions but significantly exceeded their tariff?
Jeremy Wright
As my hon. Friend knows, we have abolished those particular sentences because we do not believe they are the best way to deal with such serious offenders. However, that is not a retrospective change, and a number of prisoners in the estate are still serving such sentences. He will also appreciate that the decision on whether someone is released from such a sentence is to be taken by the independent Parole Board, not by Ministers. He must also recognise that the tariff is the minimum period to be served in custody, not the maximum. None the less, we will do everything we can to ensure that the process of these sentences is as efficient as it can be.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
T10. The Secretary of State may recall that some years ago the police used a method called “trawling”, which became discredited, in order to find evidence about allegations against teachers and social workers. That destroyed many innocent people’s lives through false allegations of abuse. I understand that Operation Pallial is using trawling again, and many other hard-working social workers and educationists are being put in limbo and having their lives ruined.
The Minister for Policing, Criminal Justice and Victims (Damian Green)
I will happily discuss that issue with the National Crime Agency, which is in overall charge of that area, and will write to the hon. Gentleman with the results of my investigation.
Philip Davies (Shipley) (Con)
T6. Does the Secretary of State agree that prisoners released on licence who reoffend or breach the terms of their licence should serve the remaining part of their original sentence in prison in full? If he agrees, what is he doing to ensure that that always happens? If he does not agree, why not?
Chris Grayling
As my hon. Friend knows, I have a lot of sympathy with him on these matters in areas such as breach of licence and automatic early release. For resource reasons, I cannot do everything that he would like me to do, but when he reads the Bill that is due to be laid before this House tomorrow, he will find things in it that are at least a step in the right direction.
John Healey (Wentworth and Dearne) (Lab)
There are 33 firms doing legal aid-backed criminal work in South Yorkshire, but only one in four or five will get duty contracts in the future, which means less competition, less choice and less access to justice. Surely what we are seeing is the slow, lingering death of legal aid at the hands of the Justice Secretary.
Chris Grayling
The argument for consolidation in the legal aid world goes back well before the last election to reviews carried out, and arguments made, by the previous Government. Our current reform proposals allow those firms to retain own-client work, which is what they argued for. What we are setting out around duty work is designed to ensure that, in tough times, we can guarantee that everyone arrested and taken to a police cell will always have access to legal advice.
James Morris (Halesowen and Rowley Regis) (Con)
T8. I welcome the Government’s transforming rehabilitation programme to cut reoffending, but will the Secretary of State reassure me that those suffering from mental health problems, both inside and outside prison, will also get the help they need? Will he outline what steps or initiatives his Department is taking, in conjunction with the Department of Health, on the matter?
Jeremy Wright
My hon. Friend will know that, in relation to sentencing options, the courts have a number of choices they can make over mental health disposals. On the point he makes about co-ordination, he is right that the best thing we can do is ensure that people with mental illness are diverted away from the criminal justice system as soon as possible. To that end, we have been working with the Department of Health on liaison and diversion programmes. We are spending a considerable amount of money on that this year and over the next couple of years. We expect to have full coverage of all police custody suites and courts in the next three years or so.
Sheila Gilmore (Edinburgh East) (Lab)
Given the continuing high level of tribunals overturning Department for Work and Pensions decisions, particularly in employment support allowance cases, why did the Department offer up to the Deregulation Bill a provision that would take away the duty on the Senior President of Tribunals to report on the standard of decision making? Surely reporting on that might lead to better decisions being made in the first place.
Mr Vara
The hon. Lady will be aware that the Ministry of Justice, Her Majesty’s Courts and Tribunals Service and the Department for Work and Pensions have been working very closely to ensure that decisions by tribunals on social security and child support matters are passed on to the DWP. That is happening and, as a consequence, DWP decisions are being influenced and its decision-making guidelines have been changed.
Mr Robert Buckland (South Swindon) (Con)
T9. My right hon. Friend the Minister of State knows my interest and that of other colleagues in the reform of the criminal law of child neglect. Will he update the House on the progress he is making with regard to reviewing that particular provision of the Children and Young Persons Act 2008?
Damian Green
My hon. Friend is correct that this is an important area in which I have had fruitful discussions with Action for Children about the best way to make progress, and I hope to be able to report further on those discussions shortly.
Karl Turner (Kingston upon Hull East) (Lab)
Why is the Legal Aid Agency expanding the public defender service and recruiting barristers when reports from as far back as 2007 have found that it is between 40% and 90% more expensive than the independent professions? Furthermore, it cannot act in cases of conflict.
Chris Grayling
The public defender service was, of course, set up by the previous Labour Government, and it is always important to ensure that it is staffed properly.
Mr James Clappison (Hertsmere) (Con)
The Secretary of State will recollect the prisoner deportation shambles of 2006, when huge numbers of foreign prisoners were allowed to stay in the country on release simply because of administrative incompetence. Will he assure me that foreign prisoners who should be considered for deportation are now properly being so considered?
Jeremy Wright
My hon. Friend will know that that is primarily a matter for the Home Office, but none the less I can assure him that those of us who work in the Ministry of Justice and the Home Office do everything we can to ensure that foreign national offenders are deported as soon as they can be.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
The House will be disturbed to learn today that since the CPS guidance on rape was amended in 2011 the number of people charged with rape over that period has fallen by 14%. There is concern that cases are being dismissed that could be successfully prosecuted. What will the Secretary of State do to ensure that the CPS has the appropriate resources to ensure that no victim of rape in this country is let down?
Damian Green
I am sure that the hon. Lady heard the answer I gave a few moments ago about the action we are taking with the Director of Public Prosecutions, police and crime commissioners and chief constables to look beneath the detail of that and ensure that all proper cases are referred. I am happy that the facts do not bear out her accusation that this is anything to do with resources, as in nine police areas the number of referrals has gone up over the two years since the new guidelines came in.
Richard Graham (Gloucester) (Con)
The maximum sentence for causing death when driving disqualified, uninsured and drunk is only two years and because of the rules of custodial sentences, the actual sentence served is only eight months. Does my hon. Friend agree that that only increases the sense of injustice felt by my constituent Mandy Stock, whose husband was killed in that way in Tredworth, Gloucester?
Jeremy Wright
I congratulate my hon. Friend on the advocacy he has engaged in on behalf of the Stock family. He will recall that we discussed the points he makes in the debate last Monday and I am happy to repeat what I said to him then, which is that the Government are considering carefully all that was said in the course of the debate and whether the sentencing is right for such offences. As he knows, we have particular sympathy for his points about those who cause death while disqualified.
Mr David Hanson (Delyn) (Lab)
On 23 January, the House of Commons voted 120 to three to release papers relating to the Shrewsbury 24. What is the Government’s response to that vote in the Commons?
The Minister of State, Ministry of Justice (Simon Hughes)
As the right hon. Gentleman will remember, as he was in the Chamber for the debate, two things are happening. First, next year there will be a Cabinet Office review of the papers that are held and, secondly, a court reconsideration is in process. As a Government, we are ensuring that we increase transparency wherever possible but there will always be some papers that must be withheld on the basis of national security.
Mr Philip Hollobone (Kettering) (Con)
How many foreign national offenders are there in our jails, how does the figure compare to last time and when does the Minister expect the first Nigerian to be sent back?
Jeremy Wright
Once again, I was ready for this one. There are currently 10,692 foreign national offenders, and when I last reported to my hon. Friend the figure was 10,789. The figures are heading in the right direction—
Jeremy Wright
No, they have gone down. Let me correct the hon. Gentleman, whose mathematics is faulty. Last time, the figure was 10,789 and this time it is 10,692. I hope that is clear.
On Nigeria, as my right hon. Friend the Secretary of State has said, we will make every effort in conjunction with our colleagues in Nigeria to remove Nigerians by the end of the year.
Mr Speaker
That is obviously the Wright effect, or the Hollobone effect, or possibly a virtuous combination of the two. Who knows? I will leave the House to muse on the matter.
Roberta Blackman-Woods (City of Durham) (Lab)
One of the many excellent things the Secretary of State inherited from the previous Labour Government was an outstanding Probation Service in County Durham, which is now at risk from the Government’s privatisation. Will he now pay attention to the many issues raised in the Select Committee on Justice’s report of 22 January, and scrap that botched privatisation?
Chris Grayling
I do not recall the Justice Committee asking us to scrap our plans. Although good work is being done around the country by probation officers, we cannot go on with this situation in which 50,000 offenders are released from prison every year and left with no supervision on our streets, so that tens of thousands of crimes are committed, with victims around the country. We cannot go on in that way.
Mr Speaker
Order. I am sorry to disappoint remaining colleagues, but we must move on.
Petition
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Richard Drax (South Dorset) (Con)
Picking up on the campaign zeal I have experienced in the past 20 minutes in the Chamber, may I say our fight to retain the Portland search and rescue helicopter continues? The petitioners have raised 105,000 or more signatures and I want to pay special tribute to the team that in the main went out in wind or rain: Belinda Craig, Patricia Joy, Debra Joy and Shelley Cutler. I also want to thank Roger McPherson, who has played a large part in co-ordinating that, Councillor Sandy West, a Labour councillor on the island of Portland, who has been very supportive and Dr Ian Mew, a consultant at Dorchester county hospital, who has provided advice and help.
The petition states:
The Petitioners therefore request that the House of Commons urges the Department for Transport to reverse the decision to close Portland coastguard helicopter base.
Following is the full text of the petition:
[ The Petition of residents of South Dorset,
Declares that the Government plans to close Portland coastguard helicopter base, despite protests from local people, MPs and hospital consultants; and further that the Petitioners believe that there may be lives lost as a result of losing this search and rescue facility.
The Petitioners therefore request that the House of Commons urges the Department for Transport to reverse the decision to close Portland coastguard helicopter base.
And the Petitioners remain, etc.]
[P001317]
Sri Harmandir Sahib
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)
With permission, Mr Speaker, I wish to make a statement on the Cabinet Secretary’s report on the Indian operation at Sri Harmandir Sahib—also called the Golden Temple—in Amritsar in June 1984.
The House will recall that on 13 January concerns were raised regarding two documents released to the public in the National Archives. The documents relate to the painful events that followed the occupation of the temple site by Sikh dissidents in December 1983, which led to a six-month stand-off with the Indian authorities. In June 1984, a three-day military operation by Indian forces known as Operation Blue Star took place. Official Indian Government figures estimate that 575 people died. Other reports suggest that as many as 3,000 were killed, including pilgrims caught in the crossfire.
That loss of life was an utter tragedy. Understandably, members of the Sikh community around the world still feel the pain and suffering caused by those events. Given that, we fully understand the concerns raised by the two documents. They indicate that in February 1984, in the early stages of the crisis, the then British Government sent a military officer to give advice to the Indian Government on their contingency planning. Many in this House and across the whole country rightly wished to know what connection, if any, there had been between that giving of advice and the tragic events at Amritsar over three months later.
Within hours of the documents coming to light, the Prime Minister instructed the Cabinet Secretary to carry out an urgent investigation in four critical areas: why advice was provided to the Indian authorities; what the nature of that advice was; what impact it had on Operation Blue Star; and whether Parliament was misled. The Cabinet Secretary was not asked to investigate Operation Blue Star itself, or the actions of the Indian Government, or other events relating to the Sikh community in India. Although he has investigated those specific matters, I can make it clear that during his investigation no circumstantial evidence has been offered, or has surfaced, of UK involvement in any subsequent military operations in the Punjab.
The investigation has been rigorous and thorough. The Cabinet Secretary and officials have met Sikh organisations to ensure that their concerns informed the investigation. They have spoken with individuals associated with the two documents, although some officials are now deceased. They have examined Hansard records from 1984 to the present day. They have carried out an extensive and thorough search of the files held by all relevant Departments and agencies from December 1983 to June 1984. Their search through some 200 files and over 23,000 documents found a very limited number of documents relating to Operation Blue Star.
The report notes that some military files covering various operations were destroyed in November 2009, as part of a routine process undertaken by the Ministry of Defence at the 25-year review point. They included one file on the provision of military advice to the Indian authorities on their contingency plans for Sri Harmandir Sahib. However, copies of at least some of the documents in the destroyed files were also in other departmental files. Taken together, those files provide a consistent picture of what happened.
The Cabinet Secretary’s investigation is now complete. Copies of the report have been placed in the Libraries of both Houses, and it is now being published on the Government website. The report includes the publication of the relevant sections of five extra documents that shed light on the period but would not normally have been published. We have taken that step because the whole investigation has been based on a commitment to the maximum possible transparency. We want to be as open as possible with the British public, in so far as that does not undermine the principle, upheld by successive British Governments, of not revealing any information relating to intelligence or special forces.
The main findings of the report are as follows. First, on why the UK provided advice to the Indian Government, the Cabinet Secretary has established that in early February 1984 the then Government received an urgent request to provide operational advice on Indian contingency plans for action to regain control of the temple complex. The British high commission in India recommended that the Government respond positively to the request for bilateral assistance from a country with which we had an important relationship. That advice was accepted by the then Government.
Secondly, the Cabinet Secretary then examined the nature of the advice that was provided to India following that decision. He has established that a single British military adviser travelled to India between 8 and 17 February 1984 to advise the Indian intelligence services and special group on contingency plans that they were drawing up for operations against armed dissidents in the temple complex, including ground reconnaissance of the site. The adviser’s assessment made it clear that a military operation should be put into effect only as a last resort when all attempts at negotiation had failed. It recommended including in any operation an element of surprise and the use of helicopter-borne forces in the interests of reducing casualties and bringing about a swift resolution.
This giving of military advice was not repeated. The documents show that the decision to provide advice was based on an explicit recommendation to Ministers that the Government should not contemplate assistance beyond the visit of the military adviser, and this was reflected in his instructions. The Cabinet Secretary found no evidence in the files or from discussions with officials involved that any other form of UK military assistance, such as equipment or training, was given to the Indian authorities. The Cabinet Secretary’s report therefore concludes that the nature of the UK’s assistance was purely advisory, limited, and provided to the Indian Government at an early stage in their planning.
Thirdly, the report examines what actual impact UK advice had on the Indian operation, which took place between 5 and 7 June 1984, over three months later. The report establishes that during that time the planning by the Indian authorities had changed significantly. The number of dissident forces was considerably larger by that time, and the fortifications inside the site were more extensive. The documents also record information provided by the Indian intelligence co-ordinator stating that after the UK military adviser’s visit in February, the Indian army took over lead responsibility for the operation, and the main concept behind the operation changed. The Cabinet Secretary’s report includes an analysis by current military staff of the extent to which the actual operation in June 1984 differed from the approach recommended in February by the UK military adviser. Operation Blue Star was a ground assault without the element of surprise and without a helicopter-borne element. The Cabinet Secretary’s report therefore concludes that the UK military officer’s advice had limited impact on Operation Blue Star.
This is consistent with the public statement on 15 January 2014 by the operation commander, Lieutenant-General Brar, who said that
“no one helped us in our planning or in the execution of the planning”.
It is also consistent with an exchange of letters between Mrs Gandhi and Mrs Thatcher on 14 and 29 June 1984 discussing the operation, which made no reference to any UK assistance. The parts of the letter relevant to Operation Blue Star are published with the Cabinet Secretary’s report today.
The Cabinet Secretary has also examined two other concerns raised in this House and by the Sikh community—namely, that Parliament may have been misled or that the decision to provide advice may have been linked to UK commercial interests. The report finds no evidence to substantiate either of these allegations. The investigation did not find any evidence in the files or from officials of the provision of UK military advice being linked to potential defence or helicopter sales, or to any other policy or commercial issue. There is no evidence that the UK, at any level, attempted to use the fact that military advice had been given on request to advance any commercial objective. The only UK request of the Indian Government made following the visit was for prior warning of any actual operation so that UK authorities could make appropriate security arrangements in London. In the event, the UK received no warning from the Indian authorities before the operation was launched.
The Cabinet Secretary also concludes that there is no evidence of Parliament being misled. There is no record of a specific question to Ministers about practical UK support for Operation Blue Star, and he concludes that the one instance of a written question to Ministers related to discussions with the Indian Government on behalf of the Sikh community after the operation.
In sum, the Cabinet Secretary’s report finds that the nature of the UK’s assistance was purely advisory, limited and provided to the Indian Government at an early stage; that it had limited impact on the tragic events that unfolded at the temple three months later; that there was no link between the provision of that advice and defence sales; and that there is no record of the Government receiving advance notice of the operation.
None the less, we are keen to discuss concerns raised by the Sikh community. The Minister responsible for relations with India, the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), and my noble Friend Baroness Warsi, the Minister for faiths and communities, will discuss them with Sikh organisations when they meet them later today. This reflects the strong, positive relationship the Government have—and all British Governments have had—with the British Sikh community, which plays such a positive role in so many areas of our national life.
We are also determined to look at the wider issues raised by these events with regard to the management and release of information held by Government. Under the Constitutional Reform and Governance Act 2010, the 30-year rule has been superseded by a 20-year rule, so that from 2022 all annual releases will be after 20 years. However, it is not clear at the moment that this change is being approached in a uniform fashion by all Departments. The Prime Minister has therefore decided to commission a review to establish the position across Government on the annual release of papers and the ability and readiness of Departments to meet the requirements of moving from a 30 to 20-year rule, including the processes for withholding information. This review will be carried out by the Prime Minister’s independent adviser on ministerial standards, Sir Alex Allan.
Nothing can undo the loss of life and suffering caused by the tragic events at Sri Harmandir Sahib. It is quite right that the concerns that were raised about UK involvement have been investigated. It is a strength of our democracy that we are always prepared to take an unflinching look at the past. I hope, however, that this investigation and the open manner in which it has been conducted will provide reassurance to the Sikh community, this House and the public and, in that spirit, I present it to the House.
Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)
May I thank the Foreign Secretary for his statement and for advance sight of it this morning?
May I also take this opportunity to thank colleagues who have campaigned to help uncover the truth about the tragic events of 1984? I pay particular tribute to my right hon. Friends the Members for Wolverhampton South East (Mr McFadden) and for Warley (Mr Spellar) and my hon. Friends the Members for West Bromwich East (Mr Watson) and for Wolverhampton North East (Emma Reynolds). They have done important work on behalf of many of their constituents, and it is only right that this House offers them its collective thanks for their determined efforts.
As the Foreign Secretary has made clear, the 1984 raid on the Golden Temple complex—code-named Operation Blue Star—resulted in hundreds of deaths, devastating damage to the temple itself and rising levels of sectarian violence, which ultimately saw the assassination of Prime Minister Indira Gandhi later that year.
I welcome what light the report sheds on the British Government’s alleged involvement in those events and the fact that some of the key documents relating to the event in question, and the British Government’s alleged involvement, have now been published.
Serious questions continue to be asked, however, about the involvement, conduct and contribution of the British authorities at the time—going up to the highest level—in the events that surrounded the storming of the Golden Temple and that ultimately cost so many innocent lives. In the light of that, I would like to ask the Foreign Secretary the following questions.
First, I regret that the Government have so far refused to accept our call that all relevant documentation relating to the incident that can be should now be made public. I welcome the publication of five further documents as part of today’s report, but, given that the report itself cites “officials interviewed” over the course of this investigation, will the Foreign Secretary now commit to publishing a list of those officials, and will he confirm whether any surviving Ministers who served at the time were interviewed as part of the investigation? Will he also confirm whether these testimonies will be made public?
Secondly, on the terms of this investigation led by the Cabinet Secretary, I welcome the fact that, following representations by the Sikh community, the Cabinet Secretary published a letter detailing the scope of the inquiry. Will the Foreign Secretary explain, however, why there was a more than three-week delay in publishing those terms of reference? Will he further explain whether the terms of the inquiry changed over the course of the inquiry?
The terms of reference, as published in a letter from the Cabinet Secretary on 1 February, did not include specific reference to the time period covered by the investigation, yet the final report sets out a time frame of December 1983 to June 1984. Will the Foreign Secretary explain why that time frame was not made public at an earlier stage?
Many have already expressed regret that the investigation seemed to be covering only the first part of 1984, given the significance of events in the weeks and months after June 1984 and their direct link to the storming of the Golden Temple.
Will the Government therefore task the Cabinet Secretary with setting out whether he believes that there might be grounds for a full inquiry covering a longer period?
Turning to the substance of the findings, the report states that the UK military adviser in India from 8 to 17 February 1984 advised the Indian Government that
“this type of operation should only be put into effect as a last resort when all other courses of negotiation had failed”.
Based on the documents that he has seen, but for understandable reasons may not be able to publish, will the Foreign Secretary set out what type of operation was referred to in that case?
The report also sets out that a “quick analysis” by current UK military staff confirms that there were differences between the June operation and the advice from the UK military officer in February. Will the Foreign Secretary explain the nature of the quick analysis undertaken on such a central part of the investigation? Does he expect a fuller review of that aspect of the evidence to be conducted?
The report touches on the allegations that the potential sale of Westland helicopters was linked to the provision of military advice. It claims that no evidence was found to substantiate that allegation, but none of the annexed documentation so far released pertains to that issue. The report cites
“ongoing contacts between UK and Indian officials around the time of Operation Blue Star on potential defence related sales”.
Will the Foreign Secretary commit to publish this correspondence?
A few moments ago, the Foreign Secretary spoke about the exchange of correspondence between Prime Minister Gandhi and Prime Minister Thatcher, yet only Prime Minister Gandhi’s letter appears to have been published today. Will he undertake to publish the response of Prime Minister Thatcher?
Everyone in this House is aware of the continuing pain felt by the Sikh community around the world at the events of 1984—not just at the storming of the Golden Temple in Amritsar and the deaths and destruction that followed, but at the anti-Sikh violence that followed the assassination of Prime Minister Gandhi, and the emergency period that saw arbitrary arrests, and accusations of torture, rape and disappearances that are still unresolved today.
Although there are of course differences within the Sikh community on the issue of a separate Sikh state, there is unanimity in their horror at those events. For British Sikhs over recent weeks, there has been the additional burden of worry that their own Government may have been involved in those actions. The Government therefore have a responsibility—indeed, a duty—to address those very widespread concerns and fears. If they can provide answers to all those concerns and questions, we as the Opposition will support them in that endeavour.
Mr Hague
I am grateful to the right hon. Gentleman for his questions. He is right to draw attention to the efforts of several of our colleagues, on these and other issues, always to find out the truth about events in the past as well as in our own times. My hon. Friend the Member for Wolverhampton South West (Paul Uppal) is another example.
The right hon. Gentleman is quite right to refer to the anxiety about these events that many people have expressed during recent weeks. That is why we should do everything we possibly can to set out the truth of the matter, in so far as that can be discovered from documents and from discussions with officials. Taking what I said earlier as a whole, I think that the story is a reassuring one for the House, the public and the Sikh community.
The right hon. Gentleman asked certain specific questions about the process. He asked whether we would publish a list of officials. No, I do not think that that would be appropriate. It is important to protect the anonymity of some of the officials and military personnel involved. He asked whether Ministers have been spoken to. Yes, the Cabinet Secretary’s investigation included discussions with the senior Ministers of the time. He asked whether the terms of the inquiry changed. No, they did not change, except that the Cabinet Secretary’s work was expanded to cover some additional concerns that were raised during the past few weeks—we may come to some of them later during questions—but the terms of the inquiry remained the same.
There is no mystery about the dates. At the beginning, the Prime Minister asked the Cabinet Secretary to investigate the specific events—whether there had been UK involvement in the specific events leading up to and during Operation Blue Star in June 1984—and the time frame was therefore from the start of what happened at the location in question in December 1983 to the Indian operation in June 1984. As the right hon. Gentleman will have gathered from my statement, the Cabinet Secretary was able to go beyond that to say that in the 23,000 documents he has seen no circumstantial evidence of British involvement in any subsequent military operation in the Punjab. One of the questions raised is whether there could have been British military involvement in subsequent Operations Black Thunder I and II. From everything that the Cabinet Secretary has seen, having examined hundreds of files—200 files—the answer to that is no.
The relevant documents—those that can be published while, as I have said, upholding the publication principles that all British Governments have always observed—that relate specifically to Operation Blue Star have been published. There will of course be publication over the coming years of many more documents concerning British relations with India at the time. I certainly do not want to suggest that no more documents will be published that can shed light on relations between Britain and India through the 1980s. As I understand it, the 30-year rule—it will become the 20-year rule—is implemented on the basis of 30 years from files coming to an end, but such files contain documents from earlier years. Therefore, other documents will of course be published about this period. However, the relevant files have all been searched, and these are the documents that shed light on Blue Star.
The right hon. Gentleman asked about the quick analysis by the military. I do not think that the word “quick” should be used in a pejorative sense. The report has been quite quick, given that concerns arose only a few weeks ago, and military experts have provided an analysis, but it is clear even to a layman that the military operation mounted was very different from any that was discussed in the documents. As I mentioned earlier, it was entirely different: it did not have the element of surprise; there were no helicopter-borne forces; and it was conducted by the Indian army, not by the paramilitary forces present when the UK military adviser was there in February. Even to the non-expert on such matters, the military operation mounted in June was clearly fundamentally different from any discussed in February 1984.
Overall, I therefore think that this report has the right degree—a strong degree—of transparency, and is a thorough and good job by the Cabinet Secretary, and we should be prepared to support it as such.
Paul Uppal (Wolverhampton South West) (Con)
I thank my right hon. Friend for his swiftness in making a statement in the House. Most importantly, it is right to recognise that British involvement was not in any shape or form malicious, and particularly to recognise the line that the military option was going to be used only as a last resort.
None of us can change what happened yesterday, but we can change today and tomorrow. If documents cannot be released to the general public, will my right hon. Friend take the unusual step of making sure that they are released to the widest possible audience, but within a proper environment? In addition, will he work with fellow parliamentarians, Sikh organisations and the Indian high commission to start a process of truth and reconciliation so that, after 30 years, victims and families can finally start to feel a sense of justice?
Mr Hague
I fully accept my hon. Friend’s points. It is important, in doing everything we can to establish the truth when controversies such as this arise, to help in the process of being able to move on from these terrible events and to encourage people to live and work together successfully.
I will certainly look at my hon. Friend’s point about the release of documents. That is one of the issues that the review on the release of documents can cover, because questions arise over when documents should be withheld and how the 30-year rule, which is to become the 20-year rule, is implemented. Those are fair questions that can be looked at in Sir Alex Allan’s review. We all want to ensure that the same reassuring transparency evident in the Cabinet Secretary’s report continues as further documents are released in future years.
Mr Tom Watson (West Bromwich East) (Lab)
I must take issue with the Foreign Secretary’s conclusions. In 1984, the Commons was told that a march to commemorate the thousands of massacred Sikhs was cancelled on public order grounds, but newly revealed Cabinet minutes show the real reason. They state:
“In view of the importance of the British political and commercial interests at stake, it would be necessary to explore every possibility of preventing the march from taking place. Export contracts worth £5 billion could be at stake.”
In the year in which we will commemorate the loss of 80,000 Sikhs in the 1914-18 war, is it not the least we can do to apologise to the Sikhs who were misled in 1984?
Mr Hague
I can only explain the facts as they have been presented by the Cabinet Secretary. The evidence from the 23,000 documents is that there was no such link. The Cabinet Secretary is not saying that such matters were not of importance in wider relations or other matters of policy between India and the UK. He is saying that on this issue, that is what the documents show. We all have to work from what the documents show.
Martin Horwood (Cheltenham) (LD)
Given the distress that is felt by the Sikh community and its desire for clarity on the events at Sri Harmandir Sahib, it is obviously very regrettable that a key file was destroyed in 2009. Will the Foreign Secretary tell the House at what level oversight would have been exercised or permission given for the destruction of that file? Do we need to review the procedures to ensure that such sensitive and important material is not destroyed in future?
Mr Hague
That is an important point and the review by Sir Alex Allan that I have just announced will be able to cover it. Such decisions are made at official level and go on all the time under all Governments. They are not made on any political basis or conducted by Ministers. The implementation of the 30-year rule and, as in this case, the reviewing of documents by the Ministry of Defence at the 25-year point are continuous official processes. Judgments have to be made all the time about what is released and, as in this case, what is destroyed. We can all question that particular judgment in retrospect. The review that has been established must consider such issues so that we can all be satisfied that important files will not be destroyed in future.
Anas Sarwar (Glasgow Central) (Lab)
This issue has caused great sadness to the Sikh community in Scotland, across the UK and across the world. That community enriches our economy, our culture and our society, and the very least that it deserves from this process is closure. It will never overcome the sadness or get those lives back. Sadly, I do not think that today’s report gives it the closure that it needs. I urge the Foreign Secretary to have a further investigation that looks into the full communications that took place between the UK Government and the Indian Government in the lead-up to the storming of the temple and during the events that followed.
Mr Hague
I emphasise to the hon. Gentleman the extent and thoroughness of what the Cabinet Secretary has done. Twenty-three thousand documents is not a small number, even by Government standards, and 200 files is not a small number. The investigation has been conducted by the Cabinet Secretary, not by me or any other Minister. Having read the report, I have no reason to think that it is not a very thorough piece of work. I think that it helps all of us, including people in the Sikh community, whom the hon. Gentleman was quite right to speak about in the terms that he did, to understand the events and to see them in their true light. As I said earlier, I hope that it will be of some reassurance to the Sikh community, the House and the wider public.
Sir Edward Garnier (Harborough) (Con)
Given the strong and deep links between the Sikh community in my constituency and India, does the Foreign Secretary agree that the reaction of Sikhs in Britain on the publication of the documents not so long ago was entirely understandable? He mentioned the possibility that further documents that reflect back on the period in question will come to light in due course. Will he use his best efforts to ensure that similar surprises are eliminated or at least mitigated to prevent such an understandable reaction happening unnecessarily in future?
Mr Hague
I absolutely agree with my hon. and learned Friend that people were right to feel very concerned and anxious when they heard about this matter last month. I do not think that we can avoid all surprises on all issues when Government documents are published. We want such documents to be published. In fact, we want them to be published faster. This Government have brought in the 20-year rule. There will be surprises on other issues, no matter which Government or party was in power. We cannot screen them out. When issues are raised that cause great concern and when there is a legitimate demand for past events to be investigated, we should investigate them in exactly the way that we have on this occasion.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
The Foreign Secretary is right to describe the loss of life in 1984 as an utter tragedy. My constituents and the constituents of other hon. Members have raised their concerns and shared their personal stories of family members who were affected. Understandably, this will not be the end of the matter. My constituents will want to have time to study the report, to be able to raise questions and to reach what other Members have described as closure on this terribly tragic matter. Will the Foreign Secretary commit to ongoing dialogue and meetings with representatives of the Sikh community so that people feel that their needs and questions have been heard?
Mr Hague
The hon. Lady is quite right. She is right to say that people will want to read the report. It was only published to the public as I began my statement. I hope that it is widely read and discussed. She is also right to say that the process of dialogue and understanding should go on. That will happen this afternoon as the Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for East Devon (Mr Swire), holds meetings. We are all happy to carry on that process in the Foreign Office, as are those in other Departments. My noble Friend Baroness Warsi, who is the Minister for faith and communities, will be involved in such meetings. That process of discussion, which may help to bring closure, will certainly go on.
Sir Edward Leigh (Gainsborough) (Con)
I was not actually standing, Mr Speaker, but if you want me to, I will ask one very short question. Why were we consulted in the first place—why us?
Mr Speaker
The hon. Gentleman was certainly standing at one point because he is on my list. Anyway, he is the most dextrous of fellows and is always capable of adjusting, as he has just proved.
Mr Hague
My hon. Friend has managed to ask an interesting question, even though he was not expecting to. It is not obvious from the documents why we were consulted. We can all guess why it was. In facing this situation, India wanted expertise from the rest of the world. British expertise in tackling difficult security situations was renowned at that time, as it is today. British advice was therefore asked for. I think that that is the simple explanation.
Mr Speaker
I do not want to dispute the word of the hon. Member for Gainsborough (Sir Edward Leigh). Perhaps he was just having a therapeutic stretch.
Mr Virendra Sharma (Ealing, Southall) (Lab)
As a Punjabi, having been born and brought up there and having studied in institutions run by the Sikh community back in Punjab, I fully understand the feelings and sentiments that exist. As my hon. Friend the Member for West Bromwich East (Mr Watson) asked, will the Foreign Secretary commit to investigating further the points that he raised in his statement?
Mr Hague
The hon. Gentleman understands well that the statement and the Cabinet Secretary’s report are about specific events. There are many other aspects of relations between the UK and India—many positive ones, and sometimes controversial ones. Whenever there is something that we feel should be investigated we must be prepared to do so, but I have not seen, and the Cabinet Secretary has not turned up in producing the report, other circumstantial evidence that we think requires such investigation. Of course, we do not know what evidence will ever be turned up in future, so we cannot rule out all investigations for the future.
Sir Richard Ottaway (Croydon South) (Con)
It is important to put issues such as this in context. The incident was in 1984, just three years after the Iranian embassy siege, which the UK’s security forces dealt with successfully. Does the Foreign Secretary agree—this may answer the question asked by my hon. Friend the Member for Gainsborough (Sir Edward Leigh)—that given the expertise in handling such situations that had been developed at the time, a request for help in the circumstances was completely understandable?
Mr Hague
My right hon. Friend has answered the spontaneous question that my hon. Friend the Member for Gainsborough (Sir Edward Leigh) asked. I am glad that this discussion is going on in the House without the need for me to intervene in it.
My right hon. Friend the Member for Croydon South (Sir Richard Ottaway) is right. The Iranian embassy siege had taken place a few years earlier, and it was known across the world that British forces were skilled in conducting operations with minimal loss of life. That is always the spirit in which they give advice, and from everything we can see, that was the spirit on that occasion, although it is not for us to defend or promote the decisions made 30 years ago. He is almost certainly correct.
Fiona Mactaggart (Slough) (Lab)
The Foreign Secretary said that there was no evidence of Parliament being misled. As he is aware, my predecessor as MP for Slough was told by a Foreign Office Minister on 30 July 1984:
“As this is an internal Indian matter, we have not sought to discuss it with the Indian Government.” —[Official Report, 30 July 1984; Vol. 65, c. 111W.]
The rest of the paragraph answering my predecessor’s question was simply a description of the nature of that question. The Foreign Secretary has informed us that the Cabinet Secretary did not examine papers from after 5 June, so it would seem impossible to know from his inquiry whether there had been discussions with the Indian Government by 30 July. Will the Foreign Secretary agree to examine whether there were discussions with the Indian Government after 6 June, at a time when killings were continuing?
Mr Hague
There are several parts to the answer to that question. First, the Cabinet Secretary has said that there is no evidence in the documents, even after that point, of any British involvement in subsequent military operations in the Punjab. That goes beyond June 1984. It is also clear in the letter from Mrs Gandhi that there is no reference, for instance, to thanking the UK for any participation, support or advice. From everything that we have seen, and having read the report, I do not think there would be much to add to what the Cabinet Secretary has already said.
Sir Peter Tapsell (Louth and Horncastle) (Con)
May I add to the answer to the spontaneous question asked by my hon. Friend the Member for Gainsborough (Sir Edward Leigh)? It is difficult for the present generation to realise how close our relationships with India still were at that time. My father and grandfather were both born in India, and I knew Indira Gandhi very well. I visited her a fortnight before she was assassinated at her home, after the Golden Temple disaster, and asked her whether she was wise to be surrounded by the Sikh bodyguard, who looked magnificent in their uniforms. She said that they were absolutely loyal to her, that some of them had served her father, and that if she were to get rid of them it would be regarded throughout India as an insult to the other Sikhs. There was nothing sinister at all about Britain, and many Brits at various levels, being asked for advice during that terrible period.
Mr Hague
There was a remarkable prescience in my right hon. Friend’s questions to Mrs Gandhi at that time. As always, we are not in the least bit surprised to find that he knew her, and indeed knew several generations of the Gandhi family. He is right to put the matter in that historical context. The requests for British advice, however they were then responded to, should be seen in that light.
John McDonnell (Hayes and Harlington) (Lab)
The Foreign Secretary spoke of reassurance. I do not believe that members of the Sikh community in my area will be reassured by the fact that a UK Government were willing to provide any military support to desecrate the most holy place on this earth, or by the fact that there was no semblance of an apology today. Nor do I believe they will be reassured by files going missing, or by the fact that this was an internal inquiry. May I urge him to move swiftly for a full public and independent inquiry?
Mr Hague
No, and I think the facts have been set out clearly by the Cabinet Secretary, a respected official and the most senior civil servant in the country, who has served Governments of all parties in a non-partisan way. These are sensitive matters, and everyone should be careful about how they phrase things. To say that the UK gave military support to desecrate the temple is obviously a wild distortion of events, and the hon. Gentleman should regret that.
Mr Rob Wilson (Reading East) (Con)
Unlike the hon. Member for Hayes and Harlington (John McDonnell), may I thank my right hon. Friend the Foreign Secretary for his statement and welcome the reassurance that it gives the UK Sikh community about these events? However, many Sikhs in my constituency not only have questions about Operation Blue Star but have wider questions about what happened in India in 1984. Most of the answers will lie in India, but will he commit to a full disclosure of any information that the Government hold about the custody, interrogation, torture, disappearance and murder of thousands of Sikhs during that period?
Mr Hague
My hon. Friend draws attention to wider events, which others have also referred to, which caused enormous distress to the Sikh community and in which many people suffered. It is entirely understandable that people should raise those events, although they were predominantly within India and we are not able to inquire into the Indian Government’s actions. The investigation is about any question of UK involvement in one particular set of events. As I mentioned earlier, over the next few years more Government documents will be released. The Cabinet Secretary has examined the ones relating to the specific events in question, but other documents about relations between the UK and India will be released, and we will of course ensure that they are released promptly and transparently.
Liz Kendall (Leicester West) (Lab)
The Sikh community in Leicester has expressed to me and my hon. Friend the Member for Leicester South (Jonathan Ashworth), who unfortunately cannot be here today, its deep concerns about the attack on the Golden Temple and the wider events of 1984. Is the Foreign Secretary confident that all the documents have been properly investigated and that the Government are publishing as many of them as possible? In this day and age, when trust in politicians and institutions is so low, I believe people want to judge for themselves.
Mr Hague
That is a very good point and a fair question. This investigation is not by Ministers but has been presented by the Cabinet Secretary to the Prime Minister, and we should have confidence in that. It has involved going through a huge number of documents, and the publication of additional documents that would not normally be released, and those things should be helpful in providing the necessary assurances to people. On top of that, as I announced in my statement, there will be a review of how we release documents, to ensure that all Departments are living up to their responsibilities and doing so in a uniform way, and that includes looking at the processes for withholding information. I hope that all that, and the fact that we are moving from a 30-year rule to a 20-year rule, will fortify or produce some public confidence in the transparency of the processes.
Mark Pritchard (The Wrekin) (Con)
The events of 1984 were tragic and still impact on the lives of many Sikh families in my constituency. Does the Foreign Secretary agree that it would be a disservice to the victims and their families if some Members of Her Majesty’s loyal Opposition made this a party political issue, rather than a pursuit of truth, transparency and closure for those families?
Mr Hague
Of course I agree with that, but I am not accusing anybody in the House of doing anything other than seeking the truth about these matters, and it is important we do that across parties. Procedures for the release of documents have been established across parties and different Governments over a long period of time, and I hope that if we improve and change those procedures, that will also command cross-party consensus. Let us hope that Members across the House will always approach the issue in that spirit.
Mr Pat McFadden (Wolverhampton South East) (Lab)
The core fact exposed by the release of documents a few weeks ago and in the Foreign Secretary’s statement today is that advice was given by this country in the run-up to an attack on the holiest place in Sikhism. Given that fact, and given the tremendous pain and grief over the broader events of 1984 in India, does the Foreign Secretary understand that there will be calls in the community for an apology or gesture of reconciliation from the Government, and will he give the House his response to those calls? What can the Government do internationally to get to the full truth of this matter, because the British Sikh community feels that that full truth has never been told?
Mr Hague
There are several parts to the right hon. Gentleman’s question. I think the report should be acknowledged, even by those who criticise it, as a big step in establishing the truth about many matters. It is clear and covers many documents, and is a thorough piece of work by the Cabinet Secretary. It is important for us to support all processes of reconciliation, and to do so through the dialogue with the Sikh community which I am sure the Government will continue, as, I hope, will all political parties in this country. When it comes to judging these past events for ourselves, if I or any of us thought that this country had at any time materially contributed to unnecessary loss of life, it would be something that we should say was a mistake, for which the country should apologise. That case cannot be made for these documents, however, and we must respect what they say.
Heather Wheeler (South Derbyshire) (Con)
I congratulate my right hon. Friend on his statement. It is a wounding time for many of my constituents, who have contacted me, and I appreciate the candour that he has displayed at the Dispatch Box today. Together, I am sure, with many other hon. Members, I would like to gather these now public documents and get them back to our constituents so that they may see for themselves. I congratulate the whole team on putting this package together. It will help calm matters down.
Dr William McCrea (South Antrim) (DUP)
I thank the Foreign Secretary for his statement. While accepting that nothing we can say or do can undo the tragic loss of life and hurt felt within the Sikh community—we in Northern Ireland know about such things over 30 years—is the Foreign Secretary certain that the Cabinet Secretary’s report and examination of all issues surrounding the Indian operation has been thorough, rigorous and factually correct, and that there has not been, nor will there be, any cover up of the facts?
Mr Hague
The hon. Gentleman is right to say that nothing any of us can do or say makes up for what so many people experienced during those events, and we must understand that. It is important that we set out what happened as we understand it as clearly and transparently as possible, and I can give a clear yes to the whole of his question.
Mr Adam Holloway (Gravesham) (Con)
As a former Army officer who represents a constituency with a large number of Sikhs, I thank the Foreign Secretary and the Prime Minister for the serious and rigorous way they have approached this issue. Will the Foreign Secretary confirm that had the distinguished SAS Major’s advice been taken, there would have been a much lower level of violence? Indeed, if that advice had been taken in full, there would have been no violence at all, rather than the—to my mind—appalling behaviour of the Indian Government in the assault in Operation Metal, and the weeks and months that followed. We must remember that, for the victims of that, justice remains in very short supply.
Mr Hague
Of course, we can never know for sure what would have happened under different circumstances or a different plan. It is clear from the Cabinet Secretary’s report that the UK military adviser gave advice about using negotiations and using force only as a last resort, and the military advice he gave was partly based on the desire to reduce casualties all round. It is important that those points are fully brought out and understood, as my hon. Friend suggests.
Fabian Hamilton (Leeds North East) (Lab)
As chair of the all-party group for British Sikhs, I commend my hon. Friend the Member for West Bromwich East (Mr Watson) for bringing this matter to light in the first place. I also thank the Foreign Secretary, the Prime Minister and the Cabinet Secretary for their swift and transparent report. Does the Foreign Secretary agree, however, that the knowledge of even one military adviser going over in February 1984 will cause anger and hurt to the British Sikh community? Will he consider the possibility of a further report into the consequences of the attack on the Sri Harmandir Sahib?
Mr Hague
I understand how any of the matters that we are discussing can cause worry, speculation and suspicion, and we must be as transparent as possible about such things. The hon. Gentleman asks about a further report, but it is important to remember that we can only investigate and inquire into what we or our predecessors were responsible for. The Cabinet Secretary’s report makes clear that there is no evidence in the documents of any subsequent British military involvement in any military operations in the Punjab. There are many other wider issues and controversies that understandably cause people great distress to this day, but they are predominantly matters under Indian sovereignty, and part of the Indian people’s responsibility for their own affairs. There is a limit to how much the United Kingdom can inquire into those things.
Richard Fuller (Bedford) (Con)
In his question, my hon. Friend the Member for Reading East (Mr Wilson) rightly placed these issues in the context, for many British Sikhs, of a search for justice and truth about the atrocities in 1984. In the consultation his colleagues will undertake with Sikh organisations and others, will my right hon. Friend assure me that he will listen to the wider issues and that he will go beyond the national organisations to listen to local organisations, too?
Mr Geoffrey Robinson (Coventry North West) (Lab)
The Foreign Secretary will be aware that Coventry has a relatively large and very successful Sikh community. He will also probably know that for the past 30 years, since the incident happened, I have been lobbied in this House repeatedly by the Sikh community. We had hoped that his statement today would bring closure, but I fear it will not. One of the problems is the military files that have been destroyed and much of what I have received from the Sikh community recently has been on that point. His statement today said that that “included one file on the provision of military advice to the Indian authorities on their contingency plans”. Only some of those other destroyed military documents have been found in other files—only some. Can he reassure the House that the bulk of the destroyed files did not relate to the critical period of February and June, and then immediately after June?
Mr Hague
As set out in my statement, there was the destruction by the Ministry of Defence of one file in 2009, but it has turned out that some of the documents that would have been in it are in other files around the rest of Government. The reassuring thing, I think, is that all of the documents show a consistent picture. There is not, in the Cabinet Secretary’s analysis of these documents, something that remains unexplained. It is a consistent picture: of the one visit in February 1984 by one military adviser; of no decision by the British Government to give any further assistance beyond that, either in nature or in time; and of the actual operation in June 1984 being very different from the advice given by that one UK military adviser. All the documents are consistent with that in every Department across the whole of Government in all 200 files. So, when we think about it in that way, it is a consistent picture and it should be reassuring.
Stephen Phillips (Sleaford and North Hykeham) (Con)
May I commend my right hon. Friend on a very frank statement? I am afraid that I must press him on one point. During the statement, he said that “the adviser’s assessment made it clear that a military operation should be put into effect only as a last resort when all attempts at negotiation had failed.” It is therefore clear that there was an assessment in February 1984 of the potential military operation. One thing that causes such hurt to the Sikh community across the world was the use of artillery, both at one of the holiest sites in Sikhism and in the wider region. Will my right hon. Friend assure the House that no British adviser, either this one or anyone else, ever gave advice that artillery should be used, and that, insofar as any advice was given, it was that a military solution was not the right way forward?
Mr Hague
I think I can be reassuring on that point. The advice was that military solutions—I think British military advisers would give this advice anywhere in the world—are only for when all negotiations have failed. It also referred specifically to the importance of speed and surprise, and to the use of helicopter-borne troops to achieve that and minimise casualties. That would not be consistent with the use of artillery, with all the consequent collateral damage and destruction caused by the use of heavy weapons.
Mike Gapes (Ilford South) (Lab/Co-op)
Those of us who have had the honour to visit the Golden Temple know that it is a place of peace and tranquillity, and that its symbolism is very significant. When the Prime Minister went to India, he visited Amritsar. He also went to Jallianwala Bagh and signed a message of condolence relating to an atrocity carried out by the British military in 1919. Would it not be appropriate for us to say something about apologising for the fact that there was minor, limited complicity in giving military advice to the Indian authorities, because otherwise it will be misinterpreted? The Prime Minister did the right thing when he went to India. Can we do something now for the Sikh community?
Mr Hague
As the hon. Gentleman says, the Prime Minister did the right thing in making that statement on other tragic events near Amritsar decades before and in expressing this country’s regret for that. That was absolutely the right thing and I think across the whole House we support that. He did that because of Britain’s responsibility for those events. Apologies go with responsibility and imply a responsibility. As I said earlier, if any of us thought that any British assistance had contributed to unnecessary loss of life and to suffering in this case, or in any other case, we would all want to say that that was a mistake and for the country to make an apology. But that is not what is established by the Cabinet Secretary’s report. The picture is very different from that, and we all have to base our opinions, in the end, on the facts.
Chris White (Warwick and Leamington) (Con)
My constituency is also home to a large Sikh community, and I would like to take this opportunity to pay tribute to the huge contribution they make to local and national life. I am pleased that the Government have investigated these issues so promptly. However, may I ask the Foreign Secretary what further steps he will take to reassure our Sikh community that this investigation has indeed been fully transparent and comprehensive?
Mr Hague
It is important to explain the investigation, and that is what I am doing today. I am sure that my hon. Friend will encourage his constituents to read the report. It is not a report just for Parliament to read; it is a report for the public to read. It is published on the Government’s website and it is easy for Members of Parliament to make copies available. People will be able to make judgments for themselves on its transparency and on how much reassurance to take from it. I hope they will be reassured that in this country we do look into such documents and respond to demands for investigations. We asked the highest ranking civil servant in the country to lead those investigations. We ensured that officials from 30 years ago were interviewed and that tens of thousands of documents were examined. There are not many countries in the world that have that level of transparency relating to events in the past, let alone in the present. We should say that those are good attributes of our country, and that they are good examples of how we face up to issues from the past.
Jeremy Corbyn (Islington North) (Lab)
May I take the Foreign Secretary back to the answer he gave to my hon. Friend the Member for Coventry North West (Mr Robinson)? On page 2 of his report, he rather glibly says that under a 25-year procedure a lot of Ministry of Defence files were destroyed. This issue is not new and concerns have been expressed ever since 1984. Therefore, what was going through the minds of people in the MOD when they destroyed those files? Only some of them have been discovered in parallel files kept in other Departments. Why, at no stage in 1984, did any Minister feel fit to tell the House of Commons that a British military adviser had been sent to India? I was a Member of the House at that time and no such reference was ever made, so it was unlikely that any question would have been raised.
Mr Hague
It is hard to judge—1984 was a few years before I was a Member of this House—why questions were not asked and statements not given. I do not think that we can go back and judge that now. The hon. Gentleman said that I had said glibly in the report that the file was destroyed, but it is the Cabinet Secretary’s report, not my report. The Cabinet Secretary is reporting the fact, which is that the MOD destroyed that file in 2009. It is not for me to explain that. That happened under the previous Administration and was carried out by an official; it was not a political or ministerial decision. It raises a sufficient question such that, in the review I announced today, we have to look at such rules and how these things are carried out. That is part of what Sir Alex Allan will examine.
Mr Mark Spencer (Sherwood) (Con)
Further to the question from my hon. Friend the Member for Wolverhampton South West (Paul Uppal), will the Foreign Secretary do all he can to continue building links with the Punjab, both politically and economically, and encourage his colleagues across Government to recognise the enormous contribution that the British Sikh population make economically and socially?
Mr Hague
As our discussion today reminds us, the importance of that contribution is understood across all parties in the House. Sikhs in Britain make an enormous contribution to this country, as is widely recognised in our national life, and it is something we want to continue and see flourish in the future. In our minds in this House, none of these controversies detracts from the importance of that contribution, and nor should they ever.
Emma Reynolds (Wolverhampton North East) (Lab)
There is real concern, distress and grief among the Sikh community in my constituency over the horrific events in June 1984. The correspondence released last month indicated that the then Foreign Secretary, Lord Howe, agreed to advise the Indian Government, and the Foreign Secretary has confirmed that today. While my Sikh constituents were shocked that that advice was given, they are also seeking further clarity about the contact between the British and Indian Governments at the time. With that in mind, will the Foreign Secretary commit to disclose the full transcript of the Cabinet Secretary’s interview with Lord Howe?
Mr Hague
The Cabinet Secretary decided what to disclose in his report, and that included additional documents that would not normally be disclosed and which gave additional details confirming the picture set out in his report and my statement. While preparing the report, he and his officials had discussions with officials and senior Ministers, and it was for him to set out to the Prime Minister, as he did in his report, what he recommended for publication. I think that that provides a full, transparent picture, and that he made the right judgment in what he said.
Mr Robert Buckland (South Swindon) (Con)
I welcome my right hon. Friend’s statement. Sikhs in the community I have the honour to represent still feel that the scars and wounds left by the events of 1984 run deep and remain open, so the need for transparency is patently clear. On the nature of the advice given, was this a unique set of circumstances with regard to India, or are there examples of other countries seeking military advice of the type sought in this case?
Mr Hague
It seems to have been unique in the context of operations in the Punjab—this is the only such occurrence the Cabinet Secretary has discovered—but globally there will, of course, have been many other occasions in the 1980s when Governments of other countries asked the United Kingdom for military advice, and occasionally Ministers have to deal with that today, so it is not unusual for a foreign country with friendly relations with the UK to ask for military advice.
Mark Durkan (Foyle) (SDLP)
According to the Heywood report, the recommendation and decision to agree to the request were based on advice from the British high commission that it would be good for the bilateral relationship, whereas refusal would not be understood by the Indian Prime Minister. However, the report does not tell us—perhaps the Foreign Secretary can—whether the high commission’s recommendation gave consideration to the special sensitivity and sacredness of the Golden Temple site or whether the British Government’s decision to accept the advice gave consideration to the special status of the site?
Mr Hague
Further documents, which the hon. Gentleman can study, have been published and attached to the report, and that is the information we have on the motivations and decisions of Ministers and diplomats at the time. Everyone can read the documents for themselves. It is evident from the UK military adviser’s report that he advised that military action in this—and presumably in any other—context should be taken only if negotiations failed. I imagine people would have been conscious of the great significance of the site and the delicacy of the situation, but we can only go for sure on the documents that are there and what they say, and he can read them like the rest of us.
Michael Ellis (Northampton North) (Con)
I commend the Foreign Secretary and Cabinet Secretary for a job—and a neutral job—well done. Like the Father of House, my father was born in India. In the constituency I have the honour to represent, there is a large Sikh community. I have visited the gurdwaras, and I have spoken to members of the community and answered their questions where I can. Will my right hon. Friend confirm that UK bilateral relations with India and many other countries around the world mean that, as in the past, we are regularly asked for assistance and bilateral advice by other countries, especially those dealing with difficult situations, and that we afford such assistance where we can?
Mr Hague
Yes, my hon. Friend is absolutely right. As I just said to my hon. Friend the Member for South Swindon (Mr Buckland), over the decades we have been asked for military assistance and advice. It is not always possible to discuss specific instances on the Floor of the House, but when we receive such requests and decide to give assistance, this being the 21st century, we apply high standards of human rights considerations and of course always try to minimise loss of life, but it is not uncommon for us to receive such requests.
Chris Williamson (Derby North) (Lab)
When these documents came to light, there was a palpable sense of betrayal, anger and incredulity within the Sikh community in my constituency. It is clear from today that many questions remain unanswered, and the Foreign Secretary has conceded that some documents were destroyed. In response to my hon. Friend the Member for Hayes and Harlington (John McDonnell), he ruled out an independent inquiry, but would he not at least accept that an independent, judge-led inquiry would allay any suspicions of a cover-up, allow former Ministers to give evidence in full and enable us to determine whether a full apology would be appropriate?
Mr Hague
I encourage the hon. Gentleman to read the report, because I do not think it is possible to read it and conclude that a cover-up has taken place. It is the very opposite of that: the most senior civil servant in the country has considered the matter in a dispassionate and non-partisan way; he has been as open as possible with documents; and he has shown that all the evidence and documents paint a consistent picture. In those circumstances, it is not possible to justify additional inquiries piled on top of inquiries. People might be interested in other, related issues beyond the scope of the investigation—it is wholly legitimate for them to pursue them—but on the nature of British involvement in the events leading up to June 1984, I think the Cabinet Secretary’s report gives a clear answer.
Mr Peter Bone (Wellingborough) (Con)
I think that most Members would thank the Prime Minister and the Foreign Secretary for the speed of the inquiry and the latter for making such a full statement. I am surprised to learn, however, that Government files are routinely destroyed after 25 years—five years before they would otherwise be released under the 30-year rule. Was the Foreign Secretary as surprised as me by that? Furthermore, if we move to a 20-year rule, will the 25-year rule remain in place, meaning that all files will be available for publication?
Mr Hague
The interaction between the move from a 30-year rule to a 20-year rule and the way Departments treat their files after 25 years raise interesting questions, as it would make the 25-year rule rather a moot point. That is why there is value in the further review I have announced today to ensure consistency across all Departments and to ensure that lessons that need to be learned from when documents have been withheld or published can be learned collectively across the whole of Government. I encourage my hon. Friend to await the outcome of that review for a definitive answer to his question.
Barry Gardiner (Brent North) (Lab)
The Foreign Secretary has been at pains to stress that the advice given by the British military adviser was not, in fact, followed and that it would therefore be inappropriate to take responsibility for Operation Blue Star and to issue an apology for it. None the less, it was countenanced to give advice; indeed, advice was given about how to storm the holiest site in Sikhism. Is that not something that the Foreign Secretary should apologise for?
Mr Hague
I go back to my earlier answers. I think it is fair to put it this way. If any of us, in any part of the House, thought that Britain had contributed to serious or unnecessary loss of life elsewhere in the world, it would be right to acknowledge a mistake and to say that the country apologises for that, but when the country clearly does not have responsibility for it, that is a different context. We have to go on the facts, and I think the facts are clear. Of course, the hon. Gentleman is really asking us to judge to a finer degree the decisions of Ministers at the time, which I feel, 30 years later and in a different Government, is very hard to do and could be unfair. I therefore stick to what I said earlier on this.
Mr Philip Hollobone (Kettering) (Con)
I thank the Foreign Secretary for his statement, which I am confident will be very reassuring to the long-established and highly respected Sikh community in Kettering. None of us should ever forget that 83,000 Sikhs gave their lives in both world wars for His Majesty’s armed forces.
Does the Foreign Secretary agree that it is important not to put two and two together and make five? Will he confirm the rank of the military adviser? Does he also agree that the Iranian hostage siege operation and the raid on the Golden Temple in Amritsar were completely different exercises? The Iranian hostage siege operation was a precise, surgical military engagement involving a small number of armed soldiers and a small number of hostages, and was remarkably successful. The raid on the Golden Temple involved artillery, main battle tanks, helicopter gunships and the execution of prisoners. It is completely inconceivable that Her Majesty’s Government would send any military adviser to another Government to recommend an assault of that kind.
Mr Hague
There is a great deal in what my hon. Friend says. It has been the culture of the British armed forces for a long time to avoid, wherever possible, civilian loss of life and to minimise casualties in any operations, or anything similar to them, such as those to which he referred. There is therefore a very big distinction between those two operations; he is absolutely right about that. I will not give any information that identifies the officer concerned. My hon. Friend is quite right to refer to the huge contribution of Sikhs—indeed, of Indians, Sikh and non-Sikh—in the world wars. We owe a great deal to them, and we must remember that on many occasions over the coming years, on the centenaries of the main events of the first world war.
Mr Jim Cunningham (Coventry South) (Lab)
Given the contribution that the Sikh community has made—not only in Coventry, but nationally and internationally, and, more importantly, economically to this country and in two world wars—at the very least we owe those in that community an inquiry. This investigation is a step in the right direction, but we should have an inquiry. More importantly, will the Foreign Secretary say what the Cabinet knew? Did the Cabinet take the decision to send the adviser? Who consulted the Cabinet?
Mr Hague
It is clear from the documents that are published that this was a decision of the Foreign and Defence Secretaries at the time, in consultation with the Prime Minister. That was how the decision was taken. On the subject of inquiries, these are the documents and the facts, as set out in the Cabinet Secretary’s report. There is nothing in that report or in those documents to suggest that some form of inquiry would find any different information or come to any different conclusion.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Many Sikhs in my constituency are concerned not just about the detail and nature of the advice given, but about the principle that the British Government were prepared to advise another Government on an attack upon a holy shrine. If we are to get reconciliation, would the Foreign Secretary not be prepared to concede, first, that at least it was an error of judgment by the then Government and that an apology is justified, and, secondly, that there must be procedures in place to prevent any such repetition in future?
Mr Hague
Thankfully there are no parallel situations that we are dealing with in the world today. We do receive requests—now, in the 21st century—for military advice or co-operation. As I mentioned earlier, in responding to those we are extremely conscious of all considerations of human rights and avoiding loss of life. These are paramount factors in how the British Government, as we practise our policies today, evaluate requests for assistance from other countries, whether through their militaries or any other agencies. These policies have taken shape over the years, and it is very hard to speculate about exactly what considerations were in the minds of Ministers 30 years ago.
On the question of 30 years ago, all we can do is be as open and transparent as possible and let people evaluate the facts for themselves. It would not be unusual or unknown, as I said, for foreign Governments to ask for military advice. What is clear from this case is that the military advice that was given was designed to minimise casualties and to stress that military action should take place only if all negotiations had failed.
Flooding Prevention for New Developments
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Mark Spencer (Sherwood) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision to require Highways Authorities to include flooding prevention schemes in the development of new road constructions; and for connected purposes.
I am grateful for the opportunity to present this ten-minute rule Bill, Madam Deputy Speaker. You will be aware of how high a profile flooding has in the news at the moment. Sadly for many residents in Sherwood, this is not a recent problem, but something they have lived with for a very long time. Many of the villages of Nottinghamshire are built around settlements dating back to Saxon times located next to a small stream as a source of fresh water. They have evolved and grown for hundreds of years. For many of them, the discovery of coal meant their growth was quite rapid in the 20th century.
Sadly, the drainage systems of those villages have not grown at the same rate, and further developments upstream have added to the problem of drainage. Those villages are today faced with sewage systems that are already under enormous pressure and have a high risk of flooding during periods of prolonged or heavy rainfall. That is because there are often no top water drainage systems in place, and run-off from roofs, driveways and highways is left to flood the highway or enter the village stream or, even worse, is directed into the foul water system. My Bill, should it be successful, seeks to prevent any further pressure on these already over-stretched drainage systems.
Currently, water companies are placed under an obligation to connect any new development to an existing sewerage system, even if this system has flooded in the recent past. It is the water company and its customers who bear the costs of any improvements required, not the developer, who may be building a large number of houses further upstream. My Bill would do two things in those circumstances. First, it would ensure that the developer was obliged to pay for any proportionate improvement required in the foul water system. Secondly, my Bill would ensure that any top water must be dealt with via a purpose-built top water system and not increase water flows downstream during high rainfall events.
That would also apply where a new road development was taking place. Any new highway being built would have to include its own surface water drainage system that did not add increased volumes of water during high rainfall events. Such action would be entirely achievable with the use of balancing ponds, and would not dramatically increase costs, as the new systems would be put in while the diggers were on the ground. There are a number of instances in which that has already been done, but, sadly, it does not appear to be happening in a number of instances in Sherwood.
Nottinghamshire county council is currently planning the development of the Hucknall inner relief road. I shall not be discussing the merits of that today, but the proposed route runs though an area of Hucknall around Thoresby Dale, where there is already extensive flooding, and the current plans do nothing to improve the plight of residents in the area. The solution seems quite simple to me. The council is about to spend more than £15 million on the road; laying a purpose-built top-water drainage system below the road, while the diggers are there in any event, would involve very little additional cost, and would be of massive benefit to people in the area.
My second example relates to the village of Farnsfield, whose predicament, sadly, is not unusual. The village has suffered a number of flash-flooding events over the past five years, which have usually culminated in an overflow of the foul water systems which has left several householders with raw sewage in their gardens, garages and homes. Newark and Sherwood district council is currently considering a substantial development on the edge of the village, upstream of the flooding properties, and that can only make the problem worse unless substantial mitigation measures are introduced. My Bill would ensure that the developer was legally obliged to do that, and would hold the highway authority responsible for ensuring that it was done during the planning process.
The Bill is not retrospective, so it will not solve the existing problems, but it will help to prevent them from being made worse in future. While I am realistic about its chances of success, I nevertheless hope that the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Camborne and Redruth (George Eustice)—who is present—has listened to my comments. There may still be a further opportunity to amend the Water Bill, which is currently in the House of Lords.
I commend my Bill to the House.
Question put and agreed to.
Ordered,
That Mr Mark Spencer, Heather Wheeler, Angie Bray, Robert Halfon and Karl MᶜCartney present the Bill.
Mr Mark Spencer accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 28 February, and to be printed (Bill 167).
ANTI-SOCIAL BEHAVIOUR, CRIME AND POLICING BILL (PROGRAMME) (NO. 3)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Anti-social Behaviour, Crime and Policing Bill for the purpose of supplementing the Orders of 10 June 2013 (Anti-social Behaviour, Crime and Policing Bill (Programme)) and 14 October 2013 (Anti-social Behaviour, Crime and Policing Bill (Programme) (No. 2)):
Consideration of Lords Amendments
(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion three hours after their commencement at today’s sitting.
(2) The proceedings shall be taken in the following order: Lords Amendment No. 112; Lords Amendments Nos. 1 to 111; Lords Amendments Nos. 113 to 180.
Subsequent stages
(3) Any further Message from the Lords may be considered forthwith without any Question being put.
(4) The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—(Damian Green.)
Question agreed to.
Anti-social Behaviour, Crime and Policing Bill
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:22 - The House divided: - Ayes: 292 / Noes: 239 - Question accordingly agreed to.
15:36 - The House divided: - Ayes: 297 / Noes: 238 - Question accordingly agreed to.
Madam Deputy Speaker (Mrs Eleanor Laing)
I must draw the House’s attention to the fact that financial privilege is involved in Lords amendment 89. If the House agrees to the amendment, I shall cause the appropriate entry to be made in the Journal.
Clause 151
Compensation for miscarriages of justice
The Minister for Policing, Criminal Justice and Victims (Damian Green)
I beg to move, That this House disagrees with Lords amendment 112.
Madam Deputy Speaker
With this is will be convenient to take Government amendment (a) in lieu of Lords amendment 112.
Damian Green
I should add that I wish the House to agree to amendment (a).
Clause 151 defines what amounts to a “miscarriage of justice” for the purposes of compensation under section 133 of the Criminal Justice Act 1988. There has been much debate about the clause, both here and in the House of Lords, and I am indebted to all who have contributed to examining this important issue. The Government have taken account of all the points that have been made and all the concerns that have been expressed, and our position has changed as a result of the very good debates that have taken place in Committee here as well as in the House of Lords.
I was pleased to note that Members of both Houses and members of the Joint Committee on Human Rights agreed with us that that the current definition set out by the divisional court in the case of Ali was not clear enough, that we needed to legislate for a clear definition of a miscarriage of justice given the ongoing uncertainty and reinterpretation of definitions by the courts, and that our aim was not to seek to restrict compensation, but to provide clarity. The question that remains before us is how it can be determined whether someone has suffered a miscarriage of justice.
This is indeed a complex issue. When a case is properly brought to court—that is, when there is evidence of a crime on which it is right to ask a jury to adjudicate—there is no miscarriage of justice when the result of the trial is an acquittal, or even in very many of the cases in which a guilty verdict is later quashed as unsafe. The Government believe that a miscarriage of justice arises only when there is in existence a fact which entirely exonerates the accused: in other words, a fact which makes it unquestionable that the accused did not commit the crime. In such cases, it is only the ignorance of this fact that allowed the accused to be convicted in the first place. What we are seeking to define is something far more than merely a failure in the investigative or trial processes. We are seeking to define a clear miscarriage of justice which is—and, in our view, can only be—the wrongful conviction of the innocent.
Our aim is to create an unambiguous statutory description of such a situation for the purposes of compensation. The fact that the definition inserted in the Bill by Lords amendment 112 is open to various interpretations is obvious from the significant number of judicial review cases awaiting consideration by the administrative court—13 at present—in which the aim is to challenge the Secretary of State’s application of the Supreme Court’s judgment in the case of Adams. That number excludes the three cases that are awaiting judgment from the challenge to the divisional court’s decision in respect of Ali and others, which was heard by the Court of Appeal last December. A test similar to the “Adams test”—the definition that is at the heart of all these cases—is the test that is now being proposed in Lords amendment 112.
It is vitally important for us to ensure that the definition that is introduced into statute for the first time is “fit for purpose”. It must be clear and robust enough to avoid the need for further judicial interpretation, and, as far as possible, to limit the scope for argument about what will amount to a miscarriage of justice. The amendment that we propose would leave applicants in no doubt: if the new fact that led to their conviction being quashed showed that they did not commit the offence—for example, if it were shown that they had been somewhere else at the time, if someone else was proved to be the perpetrator, or if the courts acknowledged that no offence had in fact been committed—they would have suffered a miscarriage of justice, and would be likely to be compensated.
Dr Julian Huppert (Cambridge) (LD)
Will the Minister explain to those of us who are not lawyers what the difference is between the Government’s original wording and the wording of the amendment that they are now proposing?
Damian Green
I join my hon. Friend in that state of grace of not being a lawyer. The difference is that we have removed the word “innocent”. There was, I think, a feeling that the original Government proposal required people to prove their innocence, which, of course, would alter the presumptions that lie at the heart of the criminal justice system. That is what could be described as the non-legal significant difference, which is none the less a significant difference.
John McDonnell (Hayes and Harlington) (Lab)
Will the Minister therefore explain to us what the difference is between “innocent of” and “did not commit”?
Damian Green
A lot of the debate was about the nomenclature—the thought that we were asking people to prove their innocence. I have just explained the effect of the new clause: if a new fact emerges that on its own shows the person could not have committed the offence or that an offence may not have been committed, that would entitle that person to compensation. Throughout this debate people have recognised that it is not simply a question of being declared innocent that requires a miscarriage of justice to be called.
Mark Durkan (Foyle) (SDLP)
Further to that point, will the Minister explain how it would be different for someone to prove they did not commit an offence, as opposed to someone being expected to prove their innocence? What is the difference in terms of the burden of proof?
Damian Green
The point is that nobody has to prove that they are innocent. We are not requiring them to do that. There requires there to be evidence that shows that they could not have committed the offence because they were somewhere else, for example, or because there is new DNA evidence or the offence has not been committed. That is the material difference between the two.
Hywel Williams (Arfon) (PC)
Will the Minister concede that that puts the burden of proof squarely on the defendant, however? They will have to do what is virtually impossible: prove a negative, and perhaps many years after the alleged offence took place.
Damian Green
No, I do not accept that because what would trigger the compensation claim would be the new evidence showing they could not have committed the offence. Something has to happen. Some new evidence has to be brought forward, so it is not simply a situation of the case being redefined.
Jeremy Corbyn (Islington North) (Lab)
If an innocent bystander is watching this debate today and the Minister is saying they have to prove they did not commit an offence, it sounds awfully like they have to prove their own innocence, which of course is anathema to our legal system. Why is he so keen on this new version?
Damian Green
I am keen on this new version and consider it to be an improvement on the original version precisely because it does not require anyone to prove they are innocent, and it provides as unambiguous a wording as we can find to ensure we do not have years of judicial interpretation to come.
Mr David Davis (Haltemprice and Howden) (Con)
I assure the Minister I have not risen to intervene to ensure he takes an intervention from every other Member in the Chamber. Can he give me an example of a case that would not pass one filter but would pass the other filter, because I cannot think of one?
Damian Green
It would not be helpful to go into individual cases. I have given some examples of what requirements need to be shown for an applicant to receive compensation. What is required is that there must be a new fact that demonstrates that the applicant did not commit the crime. A Court of Appeal judgment that led to the quashing of an applicant’s conviction would have to show what the reasons were. Although I cannot give individual examples, I can tell my right hon. Friend that the reason could be new DNA evidence or compelling new medical evidence, or compelling new alibi evidence that shows the applicant was somewhere else at the time.
To address what lies behind a lot of the unease, let me say that it is fundamentally important to remember that we are legislating here for a compensation scheme that is based on specific eligibility requirements. These are designed to meet our international obligations which only require payment in exceptional cases. The Government believe this clause achieves that.
Everyone has been asking, “What’s the difference between the original clause and this clause?” Of course the substance is not different. However, we recognise that in this area language is very important, and precisely because of the emotion that surrounds the word “innocent”, there is a case for reviewing the reference to that word which has been so controversial, and that is what we have done. We have removed that word, which I hope adds to the clarity and lack of ambiguity.
John McDonnell
I think I understand where the Minister is coming from, but I just think we are getting ourselves into a bit of a mess here. Let me give him a concrete example. I chaired the Guildford Four campaign for a large number of years. What happened there was the discovery that the confessions were completely wrong. They were wrong for all sorts of different reasons—the circumstances in which they were taken, the way they were taken. They were just false. At that stage it is then demonstrated that the prosecution—and the original decision of the courts—is unsound and it is then dismissed. Those people are then released. They will then have to seek to prove their innocence to gain any compensation, so practically I think we are digging ourselves into a hole here and are creating a system that will cause more problems than those we are seeking to solve.
Damian Green
I disagree. The hon. Gentleman seems to be saying the system will in some ways be more difficult because people will have to apply for compensation. That in itself is not a huge change.
John McDonnell
May I explain my point again? Let us take the Birmingham Six as our example. As soon as the confessions were seen to be completely false, they were released on the basis that their prosecution was unsound. However, to gain compensation they will now have to go out and prove they “did not commit” or they were “innocent”, whichever terminology is decided on.
Damian Green
I think this is just a genuine misunderstanding. Someone will be eligible for compensation if the new fact—the hon. Gentleman is talking about new facts emerging in respect of confessions and so on—which led to the quashing of their conviction shows they did not commit the offence for which they were convicted. I think the particular objection he is giving rise to now would not apply, therefore.
Mr Burrowes
I must declare an interest as a lawyer. Returning to the amendment, these matters must be dealt with on a proper evidential basis. It has never been the remit of a court or Minister to pronounce on innocence. The issue is dealing with the question of whether an offence has been committed. That is what any jury or tribunal considers on the basis of the evidence. It is therefore important to look at the test for compensation on an evidential basis, which plainly is whether an offence has been committed. If we get into the territory of pronouncing on innocence, the situation becomes harder and more ambiguous. The amendment in lieu makes it much more concrete. This is a fair and just test and that is why the amendment in lieu is welcome.
Damian Green
I am grateful to my hon. Friend for bringing his legal mind to bear on this, and explaining the difference.
Damian Green
The hon. Gentleman may disagree, but he will have his chance to contribute to the debate.
We are seeking to provide greater clarity, which is why we are unwilling to accept the Lords amendment. We have listened to those who consider that the express reference to the concept of innocence is problematic. That is what lies at the heart of this change. Our amendment in lieu is intended to take this concern into account by removing what has been until now the controversial aspect of this clause: the use of the word “innocent”. I hope that removing the express reference to innocence will make our respect for the presumption of innocence clear, and I hope I can allay the concerns expressed by hon. Members.
We remain strongly committed to ensuring that compensation is paid only to those who genuinely warrant it, however. In our view compensation should be paid only to applicants where it is shown beyond reasonable doubt that they did not commit the offence. We believe that this change takes into account the points made in the House of Lords, which we have carefully considered. As Lord Phillips said in that debate, the primary objective of section 133 of the Criminal Justice Act 1988, which this clause would amend, is to provide redress to an applicant who has been convicted when he or she was in fact innocent. He also considered that its second and subsidiary objective was to ensure that an applicant whose conviction had been quashed but who had in fact committed the offence charged should not be compensated. Our proposed test goes a long way towards achieving both of those objectives. We consider that, while the definition of a miscarriage of justice for which we are seeking to legislate is drawn narrowly, it nevertheless provides for a range of circumstances in which compensation should rightly be paid to help people who need to rebuild their lives after suffering great injustices.
Throughout our debates, much has been said about the views of the European Court of Human Rights on compensation for a miscarriage of justice, and I am again grateful to Lord Phillips, who commented on this so succinctly during the debate on Report in the Lords. He stated:
“In substance, whatever interpretation is given to miscarriage of justice, something more than quashing a conviction is properly required”.—[Official Report, House of Lords, 22 January 2014; Vol. 751, c. 680.]
This much can be gleaned from the four most recent decisions of the European Court on this issue. Today, our business is to determine precisely what that “something more” is. We believe that the definition we are now providing in our amendment will make it easier for applicants to assess whether they should apply for compensation, and will make decisions on eligibility easier for the applicant to understand and less likely to be the subject of legal challenge, as my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) made clear a moment ago.
Mark Durkan
Surely the Government’s amendment would not make it easier for the applicant to decide. Would not the Lords amendment make it easier to decide?
Damian Green
No; my difference with the Lords amendment is that it would leave applicants less clear about what to do. This would result in a large number of cases backing up in the courts waiting for judges to interpret what Parliament meant by the legislation, just as there are at the moment. The purpose of my proposal today is twofold: first, to meet the reasonable objections that have been raised about the original Government proposal; secondly, to provide greater clarity so that the House can speak with as clear a voice as possible in these difficult areas and not leave the field open to judicial interpretation, which can take a long time and which provides uncertainty for applicants.
I am aware that, in both Houses, there has been a misconception that applicants would somehow be required to prove that they did not commit the offence before compensation could be considered. I can categorically say that that is not the case. Applicants do not have to prove anything under the existing criteria, and nor would they have to do so in future under this proposal. Applicants need only rely on information that is already available to them as a result of their appeal process.
The test provided for in the Bill on its introduction was one that Labour was perfectly content to operate while it was in office. I hope that the new definition, which attempts to address the concerns that have been raised, will therefore have the support of the Opposition. I hope that they will now reconsider their position so that the Bill, and the many important measures it contains, can swiftly secure Royal Assent.
Jack Dromey (Birmingham, Erdington) (Lab)
Justice demands that those who are guilty of serious offences should be held to account and brought before the courts, especially in the case of heinous offences such as the murder of a child or a terrorist outrage of the kind that the city I am proud to represent suffered in 1974, with the appalling Birmingham pub bombings by the Provisional IRA, in which 21 innocent civilians were murdered. The victims of such crimes deserve no less than having the perpetrators brought to justice. Justice also demands that the innocent should not be found guilty, however. When serious miscarriages of justice occur, it is right that the innocent have access to justice and are able to be compensated for them.
I am proud of the system of jury trial in this country. I fought for many years to defend it, as a member of the executive council of the then National Council for Civil Liberties, now known as Liberty. Trial by jury is one of our great British institutions. In the words of the jurist Lord Devlin, each jury is a “mini Parliament”, and trial by jury is
“the lamp that shows that freedom lives”.
Juries can get it wrong in certain circumstances, however: when evidence is withheld from or not disclosed to the defence, as in the case of Sally Clark; when new forensic evidence shows that the person charged and convicted was in fact innocent, as in the case of Mary Druhan; or when evidence is extorted as a consequence of outrageous and unacceptable pressure in a police station, or when it is manufactured, as in the cases of the Birmingham Six and the Guildford Four. When we debate the importance of compensation for the victims of miscarriages of justice, it is worth reflecting on each of those sets of circumstances.
Sally Clark was a practising solicitor. She was traumatised by the sudden death of her child. She was wrongly accused of murdering her child, and went to prison. When she came out, she was a crushed woman, and she died not long afterwards. Mary Druhan was convicted of arson. In a powerful speech in the other place, Baroness Kennedy of the Shaws described how Mary Druhan had served 11 years in prison, and how she had become so institutionalised that when she came out, she was unable to negotiate public transport. She was also traumatised by the tragic suicide of her daughter while she was in prison.
At a time in our history when the country was reeling from the horror of terrorist violence, what happened to the Birmingham Six and the Guildford Four was absolutely wrong. The Birmingham Six were beaten, brutalised and wrongly convicted. They served 16 years in prison. In the case of the Guildford Four, I will never forget when they walked to freedom and Gerry Conlon stood on the steps of the Old Bailey and said that his dad had died in prison. Such serious miscarriages of justice are mercifully rare—there are typically only a couple a year—but it is absolutely right that compensation should be available for the innocent victims who have suffered as a result of them.
At the very heart of our legal system lies the principle that a person is innocent until proved guilty, and rightly so. It is for that reason that Labour tabled an amendment on Report to ensure that that age-old principle was upheld. I said then, as I do now, that I agreed that the Government were right in principle to include in the Bill a statutory definition of the cases in which compensation should be paid for a miscarriage of justice, in order to secure greater certainty in this area of the law. However, the Government’s proposed changes today seek to redefine the compensation test, limiting it to circumstances in which a
“new or newly discovered fact shows beyond reasonable doubt that the person was innocent of the offence”
of which he or she was convicted. That seems to fly in the face of the age-old principle. Worse still, the Government’s proposal will lead to the Secretary of State passing judgment on whether or not a person is innocent. Requiring the Secretary of State to perform that role when no court has done so would be to impose a complex and contentious role on Ministers, in cases that are among the most sensitive.
Rehman Chishti (Gillingham and Rainham) (Con)
The hon. Gentleman talks about the issue of innocence and the test that is to be applied. Like me, he is aware that Barry George was convicted of the murder of Jill Dando, was then acquitted and then lost his appeal for compensation. What does the hon. Gentleman say about that case?
Jack Dromey
First, the number of people who receive compensation every year is a handful—it is less than the number of fingers on a hand. There is no automatic entitlement to compensation, and each case is considered on its merits. Secondly, I have rightly focused on cases where people are absolutely entitled to receive compensation for the trauma they suffered as a result of being wrongly convicted and spending many years in prison, and I hope the hon. Gentleman would agree on that.
Mr David Burrowes (Enfield, Southgate) (Con)
I share the hon. Gentleman’s concern about the cases he has cited and the appalling years that these people spent, without obtaining justice in the form of compensation. We need to recognise where we agree: there is a consensus in the House on achieving justice for these people. He mentioned the innocence test. Amendment (a) would do away with the language of “innocent” and replace it with a test of “did not commit”. What is the substantive difference between that and the Pannick amendment, which I understand he supports and which also requires that the burden is to prove
“conclusively that the evidence against the person at trial is so undermined that no conviction could possibly be based on it”?
There is still a burden to provide conclusive proof, so what is the substantive difference between it and the “did not commit” test that the Government are now proposing?
Jack Dromey
In English law, someone is innocent until they are proved guilty. Let me contrast the three different formulations. The Lords amendment would mean that the new or newly discovered fact showed
“conclusively that the evidence against the person at trial is so undermined that no conviction could possibly be based on it”.
The Government’s original clause would have required that the fact showed
“beyond reasonable doubt that the person was innocent of the offence”.
Amendment (a) in lieu of the Lords amendment repeats those tell-tale words of “beyond reasonable doubt” and proposes a test that the person “did not commit” the offence. We strongly believe that the formulation from the other place provides a much more appropriate test, and that the amendment in lieu is about making it more difficult for victims of miscarriages of justice like those to whom I have referred to receive compensation. Indeed, two of the Birmingham Six have expressed the view, following legal advice, that they might not have been entitled to compensation under the Government’s proposed changes.
Mr Burrowes
We are talking about where the burden lies so we are dealing with the difference between a test of “beyond reasonable doubt” and one of proving “conclusively”. This is not about distinguishing “innocence”; the debate was had in the Lords and there has been a recognition that we need to have reference to a “did not commit” test. I am trying to work out where we differ on this. Are we differing about whether something should be proved “beyond reasonable doubt” or just be proved “conclusively”? If so, what is the substantive difference between proving “conclusively” and proving “beyond reasonable doubt”?
Jack Dromey
As a lawyer, the hon. Gentleman will know the difference between providing conclusive proof and proving something beyond reasonable doubt. I stress again that the essence of our argument, and that supported by all parties and Cross Benchers in the other place, is that an individual is innocent until proved guilty. We see no good reason why a victim of a miscarriage of justice should suffer a “beyond reasonable doubt” test.
Jeremy Corbyn
Is not the Barry George example one we should think about carefully? He was convicted and spent a lot of time in prison but was later released as “not guilty” of the offence. He was then denied any compensation. Is the amendment in lieu an attempt by the Government to deny people compensation, and thus save money? Or is it a return to the slack days when a large number of people were wrongly convicted? The Criminal Cases Review Commission, which gave evidence last week to the Select Committee on Justice, confirmed that more than 500 people had been released from prison as a result of its intervention—I believe that is the correct figure.
Jack Dromey
There is a widespread view, reflected in the debate in the other place—someone talked about “incredulity”—as to why the Government are introducing such a test. A statutory definition providing greater clarity, particularly in the light of some of the cases that have gone before the courts, is one thing, but making it more difficult for people to receive compensation for serious miscarriages of justice is something altogether different. As the Barry George case shows, very few people are receiving compensation. The fear expressed in the other place is that the Government’s proposals will make it yet more difficult to obtain compensation for a miscarriage of justice.
Mr Burrowes
We all want clarity, so let me try to understand the difference between “conclusively” and “beyond reasonable doubt”. Are we talking about a balance of probabilities—whether something is more likely than not? Or are we talking about proving something beyond reasonable doubt, so that people are satisfied and sure? Is “conclusively” a balance of probabilities test, a beyond reasonable doubt test or something else? If it is something else, that wording does not provide the clarity we all seek.
Jack Dromey
As an eminent lawyer, the hon. Gentleman will know that “beyond reasonable doubt” has a very clear standing and purpose in our criminal justice system.
Jack Dromey
We believe it is inappropriate for the test to be pitched so high; a “beyond reasonable doubt” test will make it more difficult for victims of miscarriages of justice to obtain compensation.
Jack Dromey
I have given way three times and have been more than happy to do so, but let me continue now.
For all the reasons I have described, Labour tabled an amendment on Report in this Chamber and then wholeheartedly backed the amendment in the name of Lord Pannick in the other place, which would ensure that compensation should be paid only if the new or newly discovered fact showed conclusively that the evidence against the defendant at trial was so undermined that
“ no conviction could possibly be based on it.”
That clearly provides a statutory definition and greater certainty in this area of the law, while adhering to the age-old principle for which I have argued so strongly. When the Court of Appeal has quashed a conviction, it is simply wrong then to require the defendant also to establish beyond reasonable doubt that he or she is, to all intents and purposes, innocent. Such a provision is incompatible with the presumption of innocence.
The framework for which I am arguing already applies in the Supreme Court, where it was brought in by the then President, Lord Phillips of Worth Matravers, who strongly supported the Pannick amendment in the other place, and indeed in the European Court of Human Rights. Indeed, the Joint Committee on Human Rights has said:
“in our view requiring proof of innocence beyond reasonable doubt as a condition of obtaining compensation for wrongful conviction is incompatible with the presumption of innocence which is protected by both the common law and Article 6(2) ECHR.”
It is worth stressing again that the amendment from the other place is not about giving people more compensation automatically or making it easier for people to get off on technicalities and then to claim compensation in all circumstances; it is about serious and rare cases in which it is entirely appropriate that the victims should receive compensation. As our amendment makes clear, asking people to prove their innocence beyond reasonable doubt is an affront to our system of law, and denying compensation to those who have been wrongly convicted is an affront to a decent society. Many Members of this House, including my hon. Friend the Member for Hayes and Harlington (John McDonnell) and the hon. Member for Foyle (Mark Durkan), have campaigned for many years on miscarriages of justice.
The simple fact is that our legal system is not perfect, and cases do go wrong. It is a tribute to our legal system that miscarriages of justice are rare, but when they do happen, it is simply wrong to expect those who have suffered to prove to all intents and purposes that they are innocent beyond reasonable doubt—it is adding to the injustice that they have already suffered.
As I argued at the start of my contribution, miscarriages of justice lead to ruined lives. Families are destroyed. People leave while their partners sit wrongly behind bars. Jobs and homes are lost and people’s reputations are left in tatters. The mental despair and anguish are never fully resolved, which is why victims of miscarriages of justice need real help on their release. People’s lives can never go back to how they were. That is where we, as a decent society, have to make amends, and that is what our amendment does.
In conclusion, I urge all Members of this House to support a rigorous and fair justice system that sticks up for its founding principle of people being innocent until proved guilty; that rejects the notion of “beyond reasonable doubt” to obtain compensation; that ensures that where a serious miscarriage of justice has happened, innocent people receive fair compensation for all they have suffered; and that reflects rulings already set out in the Supreme Court and the European Court of Human Rights. In short, we want a justice system that is serious about putting right serious injustice.
John McDonnell
To be frank, I am absolutely confused about where we have got to. I am confused over the difference of interpretation between innocence and “did not commit”. If someone wants to intervene on me at this stage I would be really grateful, because I cannot see the difference.
My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) has explained the implications of the proposal with regard to the Birmingham Six and Guildford Four. Let me put the situation in context following my involvement in the case of the Guildford Four. A number of people are locked up for many years. When they come out, they have nothing—no accommodation and no employment. The financial compensation they receive is relatively minimal compared with the suffering that they have gone through, and it is desperately needed to ensure that they have a chance of some form of normal life in the future.
In the case of the Guildford Four—it was the same in the case of the Birmingham Six—we found that not just the prisoners but whole families were devastated. There have been suicides in the family of Paul Hill. As my hon. Friend the Member for Islington North (Jeremy Corbyn) knows, the lives of Errol and Theresa Smalley have been permanently damaged. The whole family network has been damaged as a result of that case. Gerry Conlon admitted it when he came out of prison. He was addicted to drugs, because that was the only way he could cope. The state pays compensation to try to do whatever it can to remedy the injustice that took place.
The cases of the Guildford Four and the Birmingham Six went to court and were quashed because the forensic evidence demonstrated that confessions were made under duress and that documents were tampered with. When they left court, it was on the basis that the system had failed in due process to prove that they had committed the crimes for which they were brought to court. We then went through a negotiation process, which was quite bizarre; I did not realise that, under the existing compensation arrangements, their compensation would be reduced to pay for accommodation charges while they were in prison. It was a real struggle to get that compensation. The Minister says that this is not the case, but under the proposed system, if a case is quashed on the basis of that type of evidence, the defendants will have to go to another level of proof to get any compensation. They will have to demonstrate not that the process was faulty in the first place and that they should never have been caught, but that they did not commit the crime, which is having to prove innocence. That is almost impossible, for any of us. Trying to prove that negative is contrary to everything in English law, and practically impossible to do.
John McDonnell
Let me just finish this point, then I will give way; I welcome the intervention.
In the cases of the Birmingham Six and the Guildford Four, the media very quickly started to say. “Well, they might have got off, but maybe they did it anyway.” A campaign then started in the gutter press. It did not matter how good the evidence was, they still came at us. They tried to damage the reputations of those individuals. What worries me is that a Secretary of State determining that a higher level of proof is required to gain compensation will affect the atmosphere that is created.
Mark Field
I must admit that I have quite a lot of sympathy with what the hon. Gentleman is saying. He expresses a specific concern about high-profile miscarriages of justice. However, is there not a concern that this new test of a convincing case brings a whole lot more uncertainty into the law? I dare say that it will be an absolute boon for the lawyers as to precisely where that comes into play. Although I have sympathy with what the hon. Gentleman says, the benefit of what the Minister is saying is that we at least have a certain test that is already set in English law.
John McDonnell
In my view, the Government’s test is faulty. I am not convinced of the need for this additional test anyway. At least the House of Lords edges towards some greater level of fairness. I would rather give up on this attempt to redefine.
The hon. Member for Gillingham and Rainham (Rehman Chishti) raised the case of Barry George. There has always been an ability in our system for the court awarding compensation to take into account whether the person contributed towards their plight. That has an effect on compensation levels or even whether compensation is awarded at all. By seeking to arrive at some definition in legislation, we are digging ourselves into a very complicated and costly hole, and that cost will be on the individuals who are desperately trying to ensure that they get some compensation for the ill that they have experienced as a result of the state’s failure to live up to a proper process. Additionally, it will be extremely costly for the state. As a result of the weakness in the definition proposed by the Government, we will see case after case being dragged through the English courts and then the European courts. In trying to remedy some form of perceived ill, we will create greater damage to those who have suffered enough.
In addition, the process that is under way at the moment risks making a laughing stock of the Government. As we have heard today, there will be arguments over the difference between “do not commit” and innocence, between “conclusively” and “beyond all reasonable doubt”. The lawyers will make a fortune. I plead for a common-sense approach. The compensation arrangements at the moment are not absolutely perfect, but at least we have managed to secure some compensation for those cases that have been quashed as a result of the state’s failure, and this is about the state’s failure to act accordingly.
There are many other cases. Susan May recently passed away, unfortunately, but her case is still being pursued to demonstrate her innocence, and I think that, rather than it being proved in the long run that the evidential base was the problem, it will be demonstrated that police processes were not adhered to and it will be another case that is eventually quashed. I hope that the Criminal Cases Review Commission will posthumously provide some proof that she should never have been taken through the courts, but again, the case has been dragged out over years, demonstrating how difficult it is, even when trying to prove the failure of due process, to secure not just a decision but any compensation. The new process will make it even harder to get compensation, drag the decision-making processes out for even longer and prove to be basically unfair.
I support the Lords amendment, because at least it moves us a little further forward, although I think even it will be open to significant challenge in the courts.
Mark Durkan
I rise to support Lords amendment 112 and oppose the Government’s amendment in lieu. The Minister told us that the Government were moving to allay the concerns raised by the use of the word “innocence” and its abuse in the Bill as originally drafted. Of course, many of us argued that the wording used in the original Bill changed all the normal presumptions about innocence under the rule of law and that it was tilting things to say that because someone had not proved their innocence they could remain guilty, even though they had been released on a quashed conviction. We were concerned not just about the word “innocence” but about the fact that the burden of proof would be reloaded for cases subject to review on the basis of new evidence that could lead to a quashed conviction. We were concerned that the question of compensation would be tested by altering the burden of proof so that new evidence had to prove someone’s innocence. The onus was being put on that person and their legal team to show the strength of the evidence.
The Government’s response to the Lords’ fairly reasonable and measured amendment is to say that they have solved the problem of innocence by using the term “did not commit” about the offence. The Minister was asked again and again to tell us the difference. A brand of soup—I cannot remember which—used to be advertised by the slogan, “The difference is in the thickness.” We are being told that there is a big difference and the Minister is emphasising its importance, but he cannot explain, specify, spell out or measure in any way the difference between whether someone can show that the evidence proves that they are innocent of an offence or whether they can show that it proves that they did not commit the offence. Even some of the interventions from the Government Back Benches seemed to rest more on whether there was evidence that an offence had been committed than on whether there was evidence that the person had actually committed the offence.
There are cases, of course, in which we know that gross and horrible offences have been committed, but that is very different from saying that that proves that a person who was charged and convicted of that offence has committed it. At other times, offences that might or might not have been committed are subject to questions and conjecture. We might consider our experiences in this House, as we might be thrown into the spotlight of public judgment about whether or not we did something. If we consider “did not commit” and “innocent” in that context, we might start to tease out some of the differences.
If as MPs we were arrested on the basis of some allegation, the fact that we were not charged and nothing more happened would show that we were innocent, but would other people necessarily say that it proved that no offence had been committed and nothing had happened? Things might be different; there can be a difference between “innocent” and “did not commit”. As the hon. Member for Hayes and Harlington (John McDonnell) said, it is hard to prove a negative. We know from recent events of major publicity and political import in which allegations were made that someone had spoken to and treated police officers in a particular way, leading to consequences and all sorts of sweeping media and public judgments—although thankfully not court judgments—that that person was put in the position of having to prove a negative. They were asked to prove that they did not say what they were meant to have said and that they did not behave in the way that they were meant to have behaved.
We need to think not only about the hard and serious cases when we consider miscarriages of justice in this jurisdiction; some of the questions about the difference between “innocent” and “did not commit” can be asked closer to home about cases that do not necessarily reach the criminal courts. If we are conscious about language and the standards, judgments and measure of such things, it might help us and make us a wee bit more sensitive about how we word things as legislators.
The Lords amendment is designed, I believe, to meet the problem that the Government were seeking to address in the Bill. The Government said that they did not want to create a situation whereby the quashing of a conviction led either to the automatic fact of compensation or to the automatic assumption or expectation of compensation. They felt that some other test or qualification was needed. That was what the Government decided; it might not have been the starting point for some of us who have campaigned on miscarriages of justice cases such as those of the Birmingham Six and the Guildford Four. Long after the latter conviction was overturned, I worked with Gerry Conlon and his mother to try to ensure that there was an apology that fully vindicated them and voiced their innocence, because many people in the system and the media were still trying to hide behind the pretence that it was a technical quashing of the conviction but that the conviction itself was due and proper. For them, the issue is not compensation but the absolute assertion of innocence. That was why offence was taken at the use and abuse of the term “innocence” in the original Bill, but that was not the only issue. The burden of proof was altered and an attempt was made to allow in the system for someone who had been convicted and imprisoned for a long period not to be entitled to compensation, because they could not prove beyond reasonable doubt that they did not commit the offence or their innocence.
Lord Pannick’s amendment accepts the Government's premise that there needs to be a definition and bases that definition on many issues that have been tested in other cases, including, as we have heard from the Minister, the Adams case. Based on the working and practical use of the law, the Lords amendment is wise and considered in its suggestion that a new or newly discovered fact should show conclusively that the evidence against the person at trial is so undermined that no conviction could possibly be based on it. That is not a hard test, as it does not open up things to conjecture. It basically allows courts to do what many appeal courts and more senior courts often have to do in considering the material evidence that would have been in front of a lower court and to make a judgment on that basis.
The Lords amendment would simply allow someone, after their conviction has been quashed, to pursue compensation on the basis that the quality of the new evidence shows that there would not have been a conviction in the first place. By refusing that, the Government are basically seeking to return to a situation in which the courts, the police and the prosecution service could be seen as part of a nexus of pursuing and achieving a miscarriage of justice. The beauty of the Lords amendment is that it would clearly take the lower court out of the frame, because it states that had the lower court known about such evidence, it would never have achieved the conviction.
Hywel Williams
I wish to add my voice to those seeking to support Lords amendment 112. I am indebted to my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd) for his guidance and advice on the matter. He would have been here if that were possible.
The hon. Member for Hayes and Harlington (John McDonnell) referred to the long-term damage done to individuals, and indeed to their families, by such miscarriages of justice. In the case of the Cardiff Three, damage was clearly done not only to those individuals and their families, but to an entire community. I believe that what happened was a public harm, because it damaged relations between community groups in Cardiff. We must not underestimate the importance of that case.
The Lords rejected the Government’s original intention, which was to place an expectation that the defendant would have to prove that
“the new or newly discovered fact shows beyond reasonable doubt that the person was innocent of the offence”
in order to gain compensation. As I said in an intervention, that would have placed a heavier burden of proof on the individual, as he or she would have been forced to prove their innocence of a crime years or even decades after it took place. The Lords instead passed their amendment 112, which means that a person could be awarded compensation, provided that the evidence now used against them could not possibly result in a conviction at trial. That means that the evidence against a person is so undermined that no conviction could be based on it.
Regrettably, the Government now intend to disagree with the Lords and, in effect, reiterate their original intention by saying that the evidence would need to prove that the defendant “did not commit” the offence. We have already heard the debates about the semantic difference between “did not commit” and “innocent”—I was imagining lawyers dancing on the head of a pin. That would once again place the burden of proof on the defendant. It asks the defendant to do something that is virtually impossible: to prove a negative—that they did not do a certain thing—years after the trial has taken place.
The Minister said that it would not be useful to provide examples of individual cases. The Government’s attempts to change the law covering compensation in cases in which an alleged miscarriage of justice has taken place runs contrary to case law, which cements the current position. Some cases have been suggested to me by my right hon. Friend the Member for Dwyfor Meirionnydd. In R (Mullen) v. the Home Secretary, Lord Bingham successfully argued that a miscarriage of justice can occur where an individual has been wronged by
“a failure of the trial process”.
The burden is not on the defendant to prove that they were innocent. In R (AH) v. the Secretary of State for Justice, the divisional court ruled that a miscarriage of justice occurs where an individual can prove
“beyond reasonable doubt, that no reasonable jury... properly directed as to the law, could convict on the evidence now to be considered.”
It is chilling to think that the cases of the Birmingham Six, the Maguire Seven, the Guildford Four and, as I have mentioned, the Cardiff Three would not have satisfied the new test put forward by the Government. If Lords amendment 112 is overturned, individuals who have already suffered a miscarriage of justice will be further wronged by not being able to access the compensation due to them—compensation meant to represent roughly the amount they would have received in earnings had they not been imprisoned.
I do not believe that the Government have offered an adequate reason for introducing this ill-advised provision. The Secretary of State, by refusing to change the Government’s proposals, is not only refusing to listen to Members of the other place, but ignoring the advice of external organisations, such as Liberty and Justice, that oppose the change.
I urge Members to disagree with the Government and insist on Lords amendment 112 in order to uphold the current position based on case law, which determines that a miscarriage of justice has occurred if it can be shown
“conclusively that the evidence against the person at trial is so undermined that no conviction could possibly be based on it”.
As the hon. Member for Birmingham, Erdington (Jack Dromey) said, the presumption of innocence is a key principle of the justice system. Defendants should never have to prove their own innocence. There can be no reason why such an unfair burden should be placed on defendants seeking to prove that a miscarriage of justice has taken place. Lords amendment 112 must be upheld.
Jeremy Corbyn
I rise to support Opposition Front Benchers. Lords amendment 112 uses the words,
“conclusively that the evidence against the person at trial is so undermined that no conviction could possibly be based on it”.
I put it to the Minister that that is surely about as good as we are going to get as an effective definition in taking things forward. If we have to take the route of proving that an offence was not committed, then I see all kinds of injustices occurring further down the line. A point was made about Barry George. We all agree that the murder of Jill Dando was disgusting, appalling and revolting, and obviously the person who did it should suffer the consequences of committing it. Barry George was imprisoned and later released. Therefore, the court had decided that he did not commit the offence. Has he now to prove his innocence even though he has been released by a court? That case is very well known, and I suspect that very many others do not get that degree of publicity. Miscarriages of justice happen all the time.
Like my hon. Friend the Member for Hayes and Harlington (John McDonnell), who has had to leave to chair a Public and Commercial Services Union group meeting but will return, I was very involved in the Birmingham and Guildford cases. Indeed, Paul Hill, who was the first person ever arrested under the Prevention of Terrorism Act 1974, was a constituent of mine. I went through the whole business of the campaign, and eventually those people were released and compensation was paid. However, I have to say two things about the compensation. First, there seemed to be a calculation based on the expected income of those people throughout their lives, yet at the time of their arrest, the Guildford Four were not particularly well paid, working as part-time building workers in some cases, and one would not have said that their economic prospects were particularly good. But who knows what would have happened to their economic prospects had that terrible miscarriage of justice not happened?
Secondly, one area of compensation was not effectively taken into account. This was not just about the emotional cost to the wider families—my hon. Friend the Member for Hayes and Harlington is correct that there have been some awful traumas in the families of the Guildford Four, the Birmingham Six and many others—but the financial cost. In mounting a campaign to try to gain the release of a convicted prisoner, particularly when they have been convicted of very serious offences, it is difficult to gain public support and even more difficult to find anybody to help finance it, so in many cases the families paid out a great deal of money themselves.
The step forward that was taken on the release of the Birmingham and Guildford people was the establishment of the Criminal Cases Review Commission, from which we took very interesting evidence last week in the Justice Committee. There are a number of cases that it does not review because it does not think there is enough evidence to do so. When people come back and demand a re-examination, in some cases the CCRC will then review. In the very large number of cases where it does review, it sends those cases back to the Court of Appeal and subsequently the individual is released. On that basis, compensation should be automatic—a given. If someone has been convicted, the case has been reviewed by the Court of Appeal, and they have been released, obviously the Court of Appeal must have had some very good grounds for releasing them. I do not see why they should then have to go through another hoop of trying to get compensation by proving that they did not commit an offence that they have been released for not committing. We are getting into a big problem in this regard.
Damian Green
With the leave of the House, Madam Deputy Speaker, I will respond briefly to some of the important points that have been made during this debate.
Taking this back to first principles, the domestic courts have always made it clear that compensation should be paid when the new facts that form the basis on which a person’s conviction was quashed clearly show that the applicant did not commit the offence. However, the courts have never been able to define without ambiguity a stable and robust test. Given the courts’ difficulty in this area, we decided to create a clear and definitive statutory test, the requirement for which is supported by Parliament and others, including the Joint Committee on Human Right, although I appreciate not by the hon. Member for Hayes and Harlington (John McDonnell) and conceivably the hon. Member for Foyle (Mark Durkan), although he did not address the point.
With regard to the test, we have sought to provide an amendment that recognises that compensation should be paid only to those who genuinely warrant it. What we require to achieve that is for the new fact to demonstrate that the applicant did not commit the crime—I addressed the various situations in which that could be shown—and that this should be evident from the reasons outlined in the Court of Appeal’s judgment that led to the quashing of an applicant’s conviction. The applicant does not have to prove their innocence—in other words, the reversal of the burden of proof, which Members have mentioned. That is simply not the case. The reasons why the applicant could not have committed the crime will be evident from what is outlined in a successful appeal.
The hon. Member for Birmingham, Erdington (Jack Dromey) talked about the Sally Clark case. Obviously it is difficult to say how we would consider any applications where compensation would be payable under the new test in the abstract. We have heard much mention of their lordships’ discussion of this. On Report in the Lords, there was disagreement between two eminent lawyers as to the facts of the case that would be fundamental in consideration of an application for compensation. Great lawyers can disagree about that, but what we do know, and what therefore cannot be in dispute, is that the Secretary of State did grant compensation in that case.
Jack Dromey
Just for the record, Lord Saville of Newdigate, Lord Phillips of Worth Matravers, Lord Hope of Craighead and Lord Scott of Foscote, who are members of the Supreme Court, all supported amendment 112. Why is the Minister pitching this at the level of beyond reasonable doubt?
Damian Green
I should point out that Lord Brown disagreed and that the Supreme Court’s judgment in the Adams case was five to four. It genuinely is the case that our most distinguished lawyers were very close to disagreeing.
On the question of beyond reasonable doubt, the ambiguity we seek to resolve with our amendment (a) is illustrated not just by the 13 cases currently awaiting consideration by the administrative court, but by the disagreement between the lawyers in the House of Lords about whether Sally Clark would not have qualified for compensation under that test. The fact that the hon. Gentleman could not tell my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) whether the test he supports—the conclusive test—is one of beyond reasonable doubt or of the balance of probabilities reflects that test’s inherent ambiguity.
There is nothing new in the “beyond reasonable doubt” test. The existing provision in section 133 of the Criminal Justice Act 1988 already requires a miscarriage of justice to be shown to have occurred beyond reasonable doubt. The Government, therefore, are not introducing a new test. The aspect on which the hon. Gentleman and the hon. Member for Foyle have laid such great weight is already in the 1988 Act, which we are seeking to improve.
The hon. Member for Hayes and Harlington made a reasonable point. He does not think that Parliament should get involved at all and that we should just leave it to the lawyers. I disagree with that argument and so do most people who have addressed the issue. I think we should try to set out a clear, unambiguous basis for the payment of compensation.
I return to the basic point that where the new fact which underpins the quashing of the conviction clearly shows that the offence did not happen, that the applicant could not have carried out the offence or that someone else carried out the offence, that would qualify as a miscarriage of justice. That seems to me to be clearer and less ambiguous than what we have at the moment. It will not deny anyone who genuinely deserves compensation from getting it.
Question put, That this House disagrees with Lords amendment 112.
The Minister for Crime Prevention (Norman Baker)
I beg to move, That this House agrees with Lords amendments 1 to 68, 138 and 168.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The House is agreeing with Lords amendment 1 only, with which we will consider Lords amendments 2 to 111.
Norman Baker
Thank you, Mr Deputy Speaker, I am so keen to agree that I got carried away.
The amendments deal with the new antisocial behaviour powers in parts 1 to 6 of the Bill, and I will deal briefly with each one in turn. Members will, I am sure, have watched with interest the proceedings in the House of Lords on the test for issuing an injunction in part 1 of the Bill. Because of the clear vote in the Lords, where there seems to be a majority, and in the light of that debate, the Government has accepted that the test for an injunction should be amended. Lords amendments 1 and 5 will provide for a two-tier test, and the nuisance or annoyance test will continue to be used to deal with housing-related antisocial behaviour. In all other circumstances, the test of harassment, alarm or distress will apply.
The Government believes that the fears raised in the Lords and by campaign groups were unfounded, and our view is shared by the Law Society and housing providers who have been using the nuisance or annoyance test responsibly and proportionately for more than a decade. The suggestion was made that we somehow wanted to curtail the activities of carol singers. It is slightly difficult to believe that any Government would want to do that, and that we would mis-write legislation to enable that to occur. We are then expected to believe that a local council or police officer would want to use the legislation to ban carol singers. We are then expected to believe that any court in the land would deem it proportionate, just and convenient to ban carol singers. Of course, by the time a court had so decided, several weeks on, the carol singers would have left the place where they were singing and it would not be possible to capture them. I think that that example shows some of the exaggeration and scaremongering that have occurred on this proposal. The Lords have spoken, however, and we have listened carefully. It is a democratic Parliament and we have therefore accepted, largely, the substance of Lord Dear’s amendments.
Jim Shannon (Strangford) (DUP)
I do not take exception to the Minister’s comments, but those of religious persuasion who are concerned about the proposed changes support the view that the Lords have put forward. Will the Minister confirm that the position of those of religious persuasion and religious beliefs will not be in any way changed?
Norman Baker
Yes, I am happy to deal with the issue of religious beliefs. Lords amendments 2 and 19 respond to concerns by the Joint Committee on Human Rights relating to the provision in clauses 1 and 21 that requires a court to avoid, so far as practicable, imposing prohibitions or requirements in an injunction or a criminal behaviour order that would conflict with a respondent’s religious beliefs. The amendments remove this wording, as the right to hold a religious belief is absolute. It was simply the manifestation of a person’s religious beliefs that we intended the provision to capture, but a court would be obliged to consider this in any case to comply with its obligations under the Human Rights Act. That being the case, the neatest solution is simply to remove the provision. That is what has happened, and I hope that that deals with the hon. Gentleman’s point.
Mark Field
While I agree with the Minister that we should agree with what the Lords have had to say on this matter, I do not necessarily think that it is the result of the workings of democracy—it is anything but. He slightly trivialised the issue of carol singers, but there is a bigger nuisance concern. For example, there might be a sense that if trick or treating was being clamped down on, it would be unfair not to clamp down on other activities, such as carol singing. I think that that is what might have been behind the Lords thoughts on this matter.
Norman Baker
I am not quite sure what was in the Lords thoughts. Other examples were given—bellringers and so on—and nobody in this country would want, in any way, to limit the activities of bellringers. I fear that the Government’s honest attempt to deal with genuine antisocial behaviour has been misconstrued, either inadvertently or otherwise, but we are where we are. We have accepted the form of words—“harassment, alarm or distress”—which was wanted by their lordships.
The next set of amendments in this group relate to under-18s. Lords amendments 3, 4 and 12 enable an applicant for an injunction to apply to the youth court for permission to have cases involving respondents, who are both over and under 18 years of age, to be heard together in the youth court if it is in the interests of justice to do so. If the youth court does not grant the application, the hearings will be separated, with the adults in the county court and the under-18s in the youth court. By linking these hearings, we will help to put victims first.
Lords amendment 10 brings us to the prohibitions that can be included in an injunction where the respondent is under 18. As originally drafted, clause 12 meant that the injunction could be used to exclude a respondent of any age from his or her home in cases of violence or risk to others. However, in the Lords, concerns were expressed, by my Liberal Democrat colleague Baroness Hamwee, on whether it would ever be appropriate to exclude under-18s from their own home on the grounds of antisocial behaviour. Lords amendment 10 limits the exclusion provisions to injunctions where the respondent is over 18. Where it is in the best interests of the child to be removed from the family home, there are sufficient powers in other safeguarding legislation to ensure that that is possible without the need to resort to an injunction.
Other amendments and provisions in this group relate to tenancy injunctions, the criminal behaviour order, dispersal powers, the public spaces protection order, the recovery of possession of dwelling houses and the issuing of statutory guidance. I will be very happy to pick up on any questions that Members have on any of those particular matters.
Helen Jones (Warrington North) (Lab)
I am grateful to the Minister for outlining how the Government do not intend to oppose the Lords amendments, although it is interesting that he bows to the wisdom of the Lords on this issue, but not on miscarriages of justice. The Lords amendments, particularly on the threshold for injunctions to prevent nuisance and annoyance, improve the Bill, taking the threshold from “nuisance and annoyance” to “harassment, alarm or distress”, but overall we feel that the Bill still weakens the powers against antisocial behaviour, which is of growing concern to people. It is a badly worded Bill thrown together on the usual principle of, “We must do something. This is something. Therefore, we must do it”, which the Government seem to operate under. Large parts of the Bill will not offer people the protection they need.
Mark Field
I think the hon. Lady is being too sceptical about the genesis of these provisions. As a central London MP, I do not think that everything about the old ASBO regime was bad; elements worked well for many of my constituents. I know that Westminster City council has expressed concerns, which were raised in another place, but it is still a little unfair to suggest that nothing good is coming from the Bill. We will have to see how it works in practice.
Helen Jones
The hon. Gentleman makes the important point that in many cases ASBOs worked. I have seen them work in my own area, as he has in his. As he said, it remains to be seen how the Bill will work, but I look forward to debating it in the future.
I want to comment on a number of other amendments in this group that the Minister did not mention, but I do not intend to take up too much of the House’s time. We are grateful that the Government have accepted the Lords amendments on forced marriage originally moved on Report by my noble Friend Baroness Thornton and later taken up by the Government, who tabled similar amendments ensuring that where a person lacks capacity an offence would be committed where conduct was carried out for the purpose of forcing someone into a marriage. It is arguable, I agree, that this is the case under present law, but the amendment makes it clear. It is sensible because it ensures that where a person is incapable of understanding the implications of their decision, the new offence can be committed even without violence, threats or coercion. This will also apply in Scotland.
Much work still needs to be done on forced marriage, and I commend the work of the forced marriage unit and all those working in this area, but the House is making it clear in the Bill that British children and young people, whatever the colour of their skin, and including the most vulnerable who lack capacity, will have the same protections in law as anyone else, and that is to be welcomed. There are many things in the Bill on which we might disagree, but on this issue, the House is united. These provisions will take us forward.
The Government’s firearms amendments seem fairly minor: one closes the loophole around antique firearms, which seems perfectly sensible, while the other relates to suspended sentences. Currently, a three-year jail term bans someone from owning a firearm for life and a three-month sentence leads to a five-year ban. The amendment treats a three-month suspended sentence in the same way, which we welcome, although it does not go far enough. When someone has a conviction, the police have grounds for refusing an application. The problem comes when there is no conviction but the police have evidence of violent behaviour in the past. That was why we wanted an amendment to provide that where the police found credible evidence of domestic violence, or drug or alcohol abuse, a firearms licence could be refused. No sensible gun owner has anything to fear from such a provision.
The case of Michael Atherton is the one that I must refer to here. He was convicted of the murders of his partner, Susan McGoldrick, her sister and her niece. He had a long history of domestic violence, but he was still allowed to own four shotguns. The licensing officer’s comments on his application were chilling. He wrote:
“Four domestics, last one 24/4/04, was cautioned for assault. Still resides with partner and son and daughter. Would like to refuse, have we sufficient to refuse re public safety?”
Durham constabulary decided it did not have sufficient grounds to refuse and people died as a result. This is an issue that the Opposition will want to return to in the future because it is essential to keep women safe.
Jim Shannon
I sympathise greatly and understand the issue that the hon. Lady raises. In the case of someone against whom a domestic complaint has been made to the police which is unsubstantiated, how would that be taken care of, in the Opposition’s view, under impending legislation? Incidents are not always taken as proof; there may be only complaints that are not substantiated.
Helen Jones
The hon. Gentleman makes a fair point. He is right that incidents of domestic violence do not always make it to court for a number of reasons, usually involving the vulnerability of the victims, but in such cases the police would have to find credible evidence of domestic violence or drug or alcohol abuse, and that refusal could be challenged in court. As a first premise, we should be clear that we should not put guns in the hands of people with such a record. We know that there are people who need to hold guns for a number of reasons. For example, farmers—some of my relatives are farmers—and vets do, but we should not be putting guns into the hands of people with a record of domestic violence. I hope that in time the Government will see that.
I shall comment briefly on the amendments to deal with child sexual exploitation, particularly amendment 76, which allows closure of premises suspected of harbouring those who have committed child abuse. We know from the cases that have happened in Rochdale, Oxford and other towns in this country how horrific some of this abuse has been. The reviews from Oxford and Rochdale were very clear that certain premises were repeatedly used for grooming and sexual exploitation. It was, in my view, impossible for the proprietors of those premises not to know what was taking place there. In Oxford it was guest houses in particular, and it was horrific beyond belief.
When the Minister responds to the debate, will he clarify one point in particular? For a closure order there has to be reasonable suspicion that a criminal offence has occurred. This could be a sexual offence against a child, but the obvious thing that we are likely to be dealing with in such situations is grooming, and the offence of grooming is quite a hard one to establish. That is why there are few convictions for it. The adult has to have met and communicated with the child twice, and the adult must then meet the child and, at that time, the offender must have the intention of committing a relevant sexual offence.
Perhaps the Minister could clarify for us how the police will have a reasonable suspicion of all aspects of the offence of grooming, and whether the difficulties in establishing this will prevent the power from being used. If that is found to be the case as time goes on, will he undertake to come back to the House with further proposals if necessary? This issue is causing deep disquiet in some of our communities, and rightly so. When we are talking about protecting children, we should err on the side of caution—on the side of children, as it were, rather than anyone else.
Julie Hilling (Bolton West) (Lab)
Before my hon. Friend sits down, will she say whether she, like me, welcomes Lords amendment 69, which strengthens the penalties for attacks by dogs, but does she regret, as I do, the fact that the Government have not accepted amendments to introduce dog control notices or to continue to review the progress of these changes?
Helen Jones
My hon. Friend makes a good point. I well recall the horrific case in her constituency. I do regret the fact that the Government did not accept what were reasonable suggestions on that issue. I hope we will be able to return to them in future, because we have seen some awful attacks, against children in particular but also against adults. This is something we will have to deal with in future.
We have reservations about some of the Lords amendments, but all in all we are glad that the Government have accepted them. I look forward to hearing the Minister’s reply to some of my queries when he sums up.
Dr Julian Huppert (Cambridge) (LD)
There is a huge range of issues to cover in this group of amendments. I will not even try to touch on them all, but will talk about a few that I am particularly concerned about and have raised on a number of occasions.
This Bill started with pre-legislative scrutiny. It is telling, to me at least, that quite a number of the amendments made in the other place were originally recommended during pre-legislative scrutiny. Perhaps if the Government looked at pre-legislative scrutiny earlier, we might get there somewhat faster. With that in mind, I particularly welcome the changes to the injunction to prevent nuisance and annoyance, or IPNA—the issue that has received perhaps the most attention—in Lords amendments 1 to 5. This is a welcome change, and I pay great tribute to my hon. Friend the Minister for his work in getting us to this place.
During the pre-legislative scrutiny, the Home Affairs Select Committee said there was a risk that the provisions could be interpreted as being too broad. The Minister has quite rightly described why some of the stories that were going round—for example, about how carol singing would be prevented—were simply not true but were good debating points. We made it clear that we had real concerns with the provisions as they stood. I am pleased that, as a result of the changes in the other place, we now have something that is much more proportionate. We have moved away from causing nuisance and annoyance in the general sense to something more serious. That is definitely right, because all of us are quite capable, I am sure, of causing nuisance or annoyance to people on various occasions.
Dr Huppert
I hope my hon. Friend would join me in being in the annoying category.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I think we go through the Chair.
Dr Huppert
I was somewhat surprised by the original amendment passed in the other place, which was backed by many, including Labour peers, because it wrote into law discrimination that I would not be happy with. We have rules about behaviour that is unfair—behaviour that is too harsh—but I was really surprised to see an amendment that said there should be one set of rules for people in social housing and a completely different set of rules for people in private housing. If someone’s behaviour is causing problems that are sufficiently serious to be dealt with under the Bill, the form of tenure should not matter. I was very disappointed by that amendment and very pleased that the Government corrected it. What we now have corrects that problem and I am happy to support it, because I would not have been able to support the previous version from the Lords.
Jack Dromey
Just for the record, the proposal for a tenure-neutral approach in fact came from Labour Lords.
Dr Huppert
I do not have the list of exactly who proposed what. The Government amendment we have is neutral; the one that Labour peers supported in the other place was not tenure-neutral. I hope the hon. Gentleman agrees that that was a flaw in it, although the other principle was there.
I welcome the change, although I remain surprised by the position of the Opposition, who felt that the version that left this place was both too draconian and too liberal. I am glad that their position has moved in a more liberal direction. The new approach is far better than the failed system of ASBOs, which many young people collected as a badge of honour. A huge number of people broke them; they simply did not work. I think that this non-criminalising approach will work much better.
Let me turn now to some of the other issues. Lords amendment 10 is important and concerns the principle that we should not be using these rules to throw children out of their own homes. The Lords pushed for that, and it is a shame that we did not manage to get it fixed in this place. The importance of care for the under-18s should have been emphasised more strongly during the Bill’s earlier stages, and I am glad that it has been emphasised more strongly now. This is another of the issues that were dealt with by the Home Affairs Committee. I am also pleased that Lords amendment 11 proposes the removal of clause 13, because it discriminated on the basis of tenure.
Lords amendments 23 and 24 deal with the rights of free expression and free assembly. The Home Affairs Committee recommended that we should ensure that dispersal powers were not used in a way that could damage those rights. Before my hon. Friend became a Minister in this Department, the Government moved some of the way towards this, and I am glad that he has now been able to persuade them to move the whole way, so that we can protect all forms of free expression and free assembly.
Lords amendments 59 to 64 deal with cases of riot. Riot is of course very serious, and we have already seen what it can lead to in this country. As a result of what happened, the Prime Minister said that he wanted stronger powers to deal with the families of people who were rioting. Many of us felt that, although we could understand the tensions that existed at the time, his suggestion went too far. It did not seem appropriate to throw everyone out of a house because a 16-year-old child had committed a minor offence where a riot was happening. I do not in any sense condone either the riot or the behaviour, but throwing an entire family out of their home seems to be a disproportionate response. I pay tribute to my hon. Friend the Minister for his work in this regard, which has led to the proposal that an automatic eviction should take place only if the offence is committed by an adult, and only if it is a serious, indictable offence. A trivial offence that happened to be committed near a riot would not lead to such an eviction; nor would an offence committed by a child.
Finally, let me raise two issues that we had very little time to discuss during our initial debates in this House, and that were not particular topics of interest at that stage. The first involves surveillance and the Terrorism Act 2000. Lords amendment 102 and related amendments deal with the powers of the Investigatory Powers Tribunal to deal with complaints about the surveillance commissioners and their decisions. The IPT does not necessarily work as well as it needs to, and it is not as transparent and open as it needs to be, but I am glad that we are taking a step towards more transparency. Surveillance oversight is an extremely important subject, and the Bill does not finish what we need to do about it. There is much more to be done, but although the amendments represent just a tiny piece of the jigsaw, I welcome them.
Lords amendment 100 and related amendments deal with schedule 8, which amends schedules 7 and 8 to the Terrorism Act. Schedule 7 became very topical at the time of the detention of David Miranda. I am pleased that, after a great deal of argument in this House, we have managed to get some changes made in the House of Lords. People must be questioned within an hour of detention, reviews must take place within two hours of that, and people’s right to consult a solicitor is made clear. That fundamental right was omitted by the Terrorism Act when it was passed by the last Government. There is much more to be done about that as well, but I am very pleased with all the amendments. I commend the Minister and his team for their work, and look forward to our passing the amendments promptly.
Mark Field
I agree with the hon. Member for Cambridge (Dr Huppert) that it is a shame that the Government did not take more account of the pre-legislative scrutiny, relying instead on the other place. I accept that all too often, whichever Government are in play, the electoral arithmetic ensures that legislation is rushed through and guillotined here in the House of Commons, and some sensible suggestions are then made in the House of Lords, many of which—as in this instance—we end up not seeking to oppose. Given the relative paucity of legislation in the House of Commons over the next 15 months, I hope that we will pay the House a little more respect, and ensure that whatever Bills come before us during the fifth year of this five-year Parliament are given proper scrutiny.
I support what the Government are doing in Lords amendments 40, 41 and 44 to 47, which relate to public bodies that can issue a public spaces protection order. That has particular resonance in my constituency, and I am glad that a number of friends—in the broadest sense—of the City of London corporation in another place were able to make some important changes. Numerous other bodies which operate open spaces under local Acts—such as the Wimbledon and Putney commons conservators, to name but two of them—will also benefit from what the Government are doing. The proposed new clause would enable bodies other than local authorities administering open spaces under byelaws to use public spaces protection orders. I believe this is particularly relevant to trustees or local conservators who operate under byelaws inferred by private Acts of Parliament, many of which go back not just many decades but some centuries. I hope the Minister agrees with that point.
The City of London corporation operates some of the most important open spaces in London and the south-east, including Epping forest and Hampstead heath. There are also important local authority parks. In Newham there is West Ham park and there is Queen’s park in the London borough of Brent. It was often under private Acts of Parliament, frequently through bequests of what were the curtilage of large mansion houses, that these local parks and amenities were founded, often back in the 18th and 19th centuries.
Conservators have exactly the same issues as local authorities in terms of the public open spaces they administer, so it is sensible to include these places in order not to have duplication but to ensure there is not an opportunity for some of these powers to slip through the net. Conservators are not required to use the orders, and they can keep to the local byelaws if they so wish. If they do make an order, however, and the local authority for the area makes its own, the local authority’s order will take precedence. That is right.
These clauses are sensibly drafted. The powers of the City of London corporation would not in any way usurp those of the relevant local authority, but this does provide a belt-and-braces approach to ensure there is a proper focus on public order within those important open spaces.
I wish the Minister and Government well in getting this change into the Bill and I hope there will be no opposition from any corner of this House.
Richard Drax (South Dorset) (Con)
I will not detain the House for long. I want to touch briefly on the dangerous dogs element of the Bill. The Environment, Food and Rural Affairs Committee of which I am a member published its report on dog control and welfare on 6 February 2013. In that report we recommended that all dog-related issues should be consolidated in a comprehensive Bill. This would pull together the fragmented legislation referring to dog control and welfare and allow us to amend the Dangerous Dogs Act 1991 where necessary.
Such consolidation is essential because there are yawning gaps in our legislation. Voluntary compliance with guidelines on responsible ownership has proved to be limited and slow, but that is not surprising as there are 8 million dogs in this country—a huge number. The vast majority are well cared-for, kept and controlled, but there are exceptions. Dangerous dogs have killed seven people, five of them children, since 2007. In my own constituency a small child had her eye savaged by a West Highland terrier, but more about that later because there are certain circumstances there which I want the Minister to cover when he responds to the debate. Dangerous dogs have attacked specially trained dogs for the blind, causing untold grief and difficulties—and let us not forget the postmen and postwomen who all too often are assaulted by animals as they deliver our mail.
Irresponsible dog breeders, driven only by greed, run puppy farms where a single bitch can legally produce up to five litters a year. That is not good for the welfare of the bitch or her litter. Subsequent failure to socialise these puppies properly has the potential to create more badly behaved and dangerous dogs.
Under the law as it stands, it has proved impossible to prosecute the owners of vicious dogs if the attack takes place on private property. In such cases it has also frequently proved difficult to prove ownership. The proposals in this Bill include many of the Committee’s recommendations on dog control and welfare, such as compulsory micro-chipping by 2016, stricter oversight of puppy farms, and extending dangerous dogs legislation to private property in clauses 98 and 99, and I wholly endorse them. The tougher sentences in the two amendments in question for those whose dogs attack, injure or kill people or guide dogs for the blind are also necessary and proportionate.
I have just one concern, which I ask the House to consider. If we legislate to allow enforcement agents on to private property to handle or destroy a dangerous dog after an attack, we are impinging on important rights to privacy in our own homes. While I—and, I am sure, the other members of the EFRA Committee—fully endorse the amendments to the current legislation, any new legislation must be careful to protect those rights.
I want to give an example from my constituency, and I hope that the Minister will listen to it, because I would be interested to hear his response. A couple and their four-year-old daughter were invited to a party next door. It was a dog party, and there were several dogs—and several people—there. In the resulting mêlée of people wandering around and having tea, the couple lost sight of their daughter. Suddenly, they heard the most appalling noise. There had been some form of communication with a dog by the girl, but we do not know whether she had poked it in the eye or put her hand in its mouth. Whatever she had done, the dog—a West Highland terrier, which had done no harm at all up till then—responded by leaping up and latching on to the left side of her face. It would not let go, and caused horrific damage to her eye.
I ask the Minister’s guidance on this point. I assume that, under the proposed new law, the lady who owned the dog would face a criminal prosecution. If that is the case, the change in the law will provide a salutary warning to dog owners who keep their dog in their home, as many millions of people do. When the law is passed, they will have to be very careful what they do with their dog when inviting people into their house. I suspect that not many people have even considered the matter up to now. I have two dogs, and I do not think about whether they are going to attack anyone who comes into my house. From now on, however, I am going to have to think carefully. If a child comes into my house, I am going to have to think about whether my dogs could assault that child.
Obviously, it goes without saying that a dog owner must take responsibility for their dog, but I raise this question because I wonder whether the process of the law has been thought through by everyone outside this place. Can the Minister confirm that, if the new law had applied at the time of that incident, the lady in question would not have faced five years in jail, and that the judge would have considered all the facts of the case and perhaps recommended that the dog be put down, with the lady facing no further consequences? Will the Minister also tell us how and when the enforcers would go into the owner’s house in such a case? If a complaint was made, would they go in on the same night to remove the dog, informing the owner that it could either be put down or returned, depending on the result of the ensuing investigation? I ask the Minister to clarify those points if he can.
I assume that if the dog owner were someone with a bad reputation—let us be blunt: if they were well known to the police for breeding properly vicious dogs, rather than West Highland terriers, for ill-gotten gains—the enforcer would simply go into the house and take the appropriate action. That is exactly as it should be. Such a case would be very different from the one that I have described, in which a perfectly innocent lady was going about her business when an appalling accident happened. Yes, that accident could have been avoided if the dog had been locked up, and that is the point that I would like to have clarified. I welcome the Lords amendments to allow people who have dogs on private property to be reached by the law. That is incredibly important, but I would be most grateful if the Minister could comment on the example that I have raised.
Richard Fuller
It is a pleasure to follow my hon. Friend the Member for South Dorset (Richard Drax), because I am always better informed after listening to his speeches. I wish to speak to Lords amendment 69, which deals with changes to the penalties relating to attacks by dogs, and I, too, hope that the Minister will respond directly to the points that my hon. Friend and I are raising today.
This amendment originated in the Bill Committee in this House. I, too, thank my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) and my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) for supporting the pressure that was put on the Government in Committee to increase the maximum sentence permissible for these offences. We were all appalled by the evidence that the police gave in our evidence sessions, so I am very pleased that Lord de Mauley took forward the Committee’s recommendations, produced this amendment, and obtained the Government’s support and, I hope, that of the whole House.
There have been a number of victims of dangerous dogs. The hon. Member for Bolton West (Julie Hilling) has made a powerful case on behalf of her constituents who were affected by a dangerous dog, and other hon. Members have done the same on behalf of victims of upsetting cases that resulted in only a minimum sentence. The police told us how difficult it was for them to prosecute under the existing legislation, and Lords amendment 69 gives them the tools they need to deal with the small minority of people that my hon. Friend the Member for South Dorset was talking about who breed or keep dogs that go out of control, attacking and maiming people. The police will now have the measures to provide the proper prosecution and sentencing through the courts for those people.
The amendment is also an indication of the good work of the trade unions. The Communication Workers Union has run an excellent campaign in support of its members who face the daily risk of attack by a dog. Such attacks can end in injury and be quite severe: they may have a negative psychological effect on postal workers. It is fair to put on the record my support for the CWU and its campaign to bring this legislation to the House.
Although this took place before my time here, I understand that legislating on dangerous dogs is treacherous territory for Governments of whatever party or origin. I hope that this amendment will prove to be an exception to that rule, and I commend the Minister for bringing it to the House today.
Norman Baker
With the leave of the House, Mr Deputy Speaker, I will respond to some of the points that have been raised in a very wide-ranging debate. As you will appreciate, we are considering a huge range of disparate measures, so I will do my best to make sense of them. I welcome the Opposition spokesperson’s general support, even if, as my hon. Friend the Member for Cambridge (Dr Huppert) says, we are not clear whether they are accusing us of being too draconian or too weak in our response to antisocial behaviour. As they are accusing us of both, perhaps we have got it about right.
I know that the Opposition are wedded to the ASBO, but the simple fact is that, although it may have been useful on occasions, as my hon. Friend the Member for Cities of London and Westminster (Mark Field) has said—I am not saying it has not—it has generally been a failure. In 2012, the 1,329 ASBOs issued represented a decrease of 68% since 2005. Up to the end of 2012, 58% of ASBOs were breached at least once and 43% were breached more than once. Where ASBOs were breached, they were breached five times on average, and the breach rate for under-18s was 69%. Defending a continuation of that arrangement is not a sensible approach for anyone in this House who is as sensible and concerned as everybody should be, and is, about tackling antisocial behaviour.
The hon. Member for Warrington North (Helen Jones) also referred to the use of hotels and other such premises for child sexual exploitation and, in particular, for grooming. She wanted to know how the law stood on that matter. If she looks at Lords amendment 77, she will see that subsection 1(b) of the new clause we propose refers to
“conduct that is preparatory to, or otherwise connected with, child sexual exploitation.”
I believe that provision is sufficiently wide as to provide reasonable grounds for the police to take action.
Helen Jones
That was precisely my concern; I fear that it is difficult to prove a grooming offence, because of the nature of the offence. I asked the Minister this earlier, but will he keep this under review and, if necessary, come back to the House with further proposals?
Norman Baker
I am happy to keep anything like that under review. Everyone in this House shares a dislike of and distaste for the reprehensible child exploitation activities that some people engage in. Of course there are other evidential trails that the police can use. Grooming often takes place online, and so sometimes evidence can be accrued and then added to the use of a hotel, which then gives the police reasonable grounds for taking action. Of course we will keep matters under review, because we want to ensure that we eliminate all such cases as far as it is possible to do so. We share that objective across the House.
Richard Drax
I am most grateful to the Minister for answering my question. If the Crown Prosecution Service decides not to take any action, would someone still be in a position to decide, in the case that I cited, to put down that West Highland terrier because a view had been taken that it was indeed dangerous? What would the situation be there? If the case does not go to court, who has the power to decide on the future of that dog, which has caused an offence on private property?
Norman Baker
On the face of it, if no offence has been committed or pursued, there is no case to answer. However, I imagine that responsible owners would want to take into account the activity that has taken place or the attack on the individual that has occurred. Of course it is always open to people to take civil action if they believe that that is the appropriate course of action. If I find out any further details, I will drop my hon. Friend a line on that particular matter.
The hon. Member for Warrington North referred to the issue of firearms ownership and guidance, particularly in relation to domestic violence. I assure her that we take both issues extremely seriously. Indeed I am spending a great deal of time on those two issues in my ministerial role. I want to make it plain that the law sets out that the police must consider whether a firearms or shotgun applicant can possess a gun without danger to public safety or the peace. The detailed criteria are set out in the firearms guidance, which can be amended when we believe it to be necessary. On 31 July last year, we took action to strengthen the guidance for the police on domestic violence specifically, and published new, more detailed guidance. For the avoidance of doubt, if there is an expectation or an understanding that someone has been involved in domestic violence, I would expect in most if not all circumstances the police to refuse to issue a licence to that particular individual.
Helen Jones
I am grateful to the Minister, who is being generous in giving way. If the Government accept that that should happen, can he explain why they are so opposed to having it written into law?
Norman Baker
The Opposition, as we saw during their time in government, appear to believe that the only solution to anything is to create a law about it. If laws and statutory guidance already exist and it is common practice for certain processes to be followed, it might not be necessary to create a law to achieve the aim that she wants. The question that she should be asking me is whether we have put in place a mechanism to achieve the aim that she rightly identifies, and the answer to that is yes. We do not need to create further legislation to deal with something that has already been dealt with satisfactorily under present arrangements.
Mr David Hamilton (Midlothian) (Lab)
Will we have continuity? What discussions has the Minister had with the devolved Parliaments to ensure that we have a similar approach across the country?
Norman Baker
We and my officials have regular discussions with the devolved Administrations on this and other areas, and irrespective of political control the relationships between central Government here in London and the Administrations in Wales, Scotland and Northern Ireland are sensible and good. If the hon. Gentleman has any particular concerns and believes that there is a scenario in which the approach has not worked and is willing to drop me a line, I would happily look into it for him and take it further.
My hon. Friend the Member for Cambridge (Dr Huppert) referred to schedule 7, which, unless I have got this wrong, appears in the next string of amendments, but as he raised the matter I will deal with it now. He quite properly asked about our response to the changes to the schedule recommended by the Joint Committee on Human Rights. In coming to a final view on that and other matters relating to the schedule, we want to take into account the judgment of the judicial review into the David Miranda case and the report of the independent reviewer of terrorism legislation into Mr Miranda's examination. Once they are available, we will naturally study them carefully and decide how best to proceed. Should we conclude that further amendments to schedule 7 to the Terrorism Act 2000 are appropriate, we will seek to bring them forward as soon as parliamentary time allows.
My hon. Friend the Member for Cities of London and Westminster (Mark Field) rightly drew attention to the peculiar powers—peculiar in the sense that they are unique—of the City of London. For example, it is the only authority to be designated a secondary authority for the control of dogs. Let me be clear on this point: we are, of course, deleting the reference to private Acts. Much of the land operated by the City of London corporation, as he mentioned, is done so under a private Act. As worded, the measure would have resulted in that land not being designated as a public space for the purposes of chapter 2 of part 4. That would have the perverse result of restricting the corporation’s ability to manage land that it is entitled to manage under a private Act, and that is why we have taken the steps that we have in that regard.
I hope that that deals satisfactorily with the amendments and points raised by hon. Members.
Lords amendment 1 agreed to.
Lords amendments 2 to 88 agreed to.
Lords amendment 89 agreed to, with Commons financial privileges waived.
Lords amendments 90 to 111 agreed to.
After Clause 152
Abolition of defence of marital coercion
Norman Baker
I beg to move, That this House agrees with Lords amendment 113.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to take Lords amendments 114 to 180.
Norman Baker
I will not repeat the numbers, in case I get that wrong, but these are the main amendments to the policing provisions in the Bill. The first relates to schedule 7 to the Terrorism Act 2000, which we have already touched on and which is a part of the UK’s counter-terrorism strategy. Lords amendments were made in line with our ongoing commitment to ensure respect for individual freedoms and the need to balance that against reducing the threat of terrorism to the public in the UK and to British interests overseas. Other amendments clarify how the right to consult a solicitor as soon as is reasonably practicable and privately at any time may be exercised under schedule 7.
The amendments make it clear that a detained person who exercises the right to consult a solicitor may not be questioned until they have consulted a solicitor or no longer wish to do so unless the examining officer reasonably believes that postponing the questioning would prejudice the determination of whether the detained person appears to be a person who is or has been concerned with the commission, preparation or instigation of acts of terrorism. I would expect that exception to be used very sparingly.
The amendments also clarify that a detained person is entitled to consult a solicitor in person, where it is practicable to do so, without prejudice to the purpose of the examination. Other amendments respond to a commitment given in Committee in the Lords to consider building on one of the key changes we are already making in the Bill: namely, the introduction of statutory provision for the review of detention under schedule 7 to the 2000 Act. On reflection, we agree that the maximum periods between reviews should be specified in primary legislation, rather than in a code of practice. The amendments provide for a first review of detention by a review officer no later than one hour after the start of detention, and for subsequent reviews at intervals of no more than two hours.
I ought also to refer to marital coercion. I will deal briefly with a final substantive amendment, Lords amendment 113, tabled by Lord Pannick, which would abolish the defence of marital coercion. It is currently a defence for all criminal offences, other than treason and murder, for a wife to show that she committed the offence in the presence of, and under the coercion of, her husband. The defence is an historical one and reflects the particular dynamics of marriage at the time when it was introduced, which was by section 47 of the Criminal Justice Act 1925, which in turn abolished the previously existing presumption that a wife who committed any offence, except treason or murder, in the presence of her husband did so under his coercion and should therefore be acquitted. For those historical reasons, the defence applies only for the benefit of a woman married to a man. I am happy to say that time has moved on, as indeed will I in a moment. That one-sided defence is now clearly an anachronism, and we accordingly agree that it can be consigned to history. Lords amendment 113 achieves just that.
These amendments, and the one in the previous string, reaffirm the value of effective scrutiny and demonstrate, yet again, that the Government is receptive to sensible proposals from hon. Members on both sides of the House and from noble Lords to help address the many issues of public policy we face on a daily basis.
Lords amendment 113 agreed to.
Lords amendments 114 to 180 agreed to.
Business of the House
Ordered,
That, at the sitting on Wednesday 5 February, paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motions in the name of Edward Miliband as if the day were an Opposition Day.—(Claire Perry.)
Business without Debate
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Backbench Business
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Energy Company Charges
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Deputy Speaker (Mr Lindsay Hoyle)
Let us see whether we can get someone to open the debate. Who wishes to move the motion?
Mr Deputy Speaker
Look at that. Albert Owen—just like a man from Wales. Let us start with you.
Albert Owen (Ynys Môn) (Lab)
I beg to move,
That this House is disappointed that 17 energy companies in the UK charge their customers more if they do not pay their bills by direct debit; acknowledges that some firms do not charge their customers any extra at all; notes that Department of Energy and Climate Change statistics show that this adds £114 to the average consumer’s bill; further notes that 45 per cent of people do not pay their energy bills by direct debit; recognises that over one million people in the UK do not have access to a bank account; believes that these charges are a stealth tax on the poor; and therefore urges Ofgem to hold an inquiry into these practices, encourages energy companies to operate with more transparency, and urges the Government to consider ways of limiting these charges, such as by introducing a cap.
I was going to start by paying tribute to the hon. Member for Harlow (Robert Halfon) on opening the debate; I am sure we will reverse that role when he arrives. I think it is an appropriate time to have such a debate. I am pleased to be among the many Members who have signed the motion. I am not sure—I seek your advice, Mr Deputy Speaker—whether I should stop my speech when the hon. Gentleman arrives, or whether I should continue.
Albert Owen
That is what I wanted to hear.
Energy prices have been a serious issue for some time, but attention has recently been concentrated on it because of the high hikes in those prices. Fuel poverty is very much on the agenda again as many people are feeling the strain of the energy price hikes, particularly in rural areas. I know that the Minister has been before the Energy and Climate Change Committee on this issue. The Department’s own figures show that twice as many people in rural areas as in urban areas are suffering from fuel poverty. It is worth putting that on the record, because people in my constituency and in many constituencies across the UK are really suffering from energy prices.
As many people are now acknowledging, the energy market is flawed in many ways. As hon. Members will know, it was set up when gas and electricity were privatised. The old structures were used and the energy market developed from that. There were price controls very early on, and the regional distributors and energy companies all came together. In the beginning we had the big three; the big five and the big six were not invented at the time of the near-monopoly under Labour.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
The hon. Gentleman is setting out the context of this debate extremely well. Does he share my concern that the people who are paying the most for their energy are often those least able to afford it under the current regime?
Albert Owen
Yes, absolutely—I am coming to that.
I want to deal with a number of groups and issues, including the two main themes—vulnerable customers and choice, which the Government talk about all the time but which some people do not have. This is about helping and protecting vulnerable people, and that is the purpose of the motion. It is good to see that the proposer of the motion, the hon. Member for Harlow, is now here. I am taking over his role for a few minutes, but I am sure, Mr Deputy Speaker, that he will catch your eye and will not be penalised for being late.
There has been some progress on energy prices. Compared with a few years ago, bills are more transparent and a number of tariffs have been simplified. I pay tribute to Ofgem, the regulator, for setting up the retail market review, which was helpful, and to the work of hon. Members, including those who serve on the Energy and Climate Committee, which has been very proactive in holding the energy companies to account on tariffs and the price mechanisms in bills.
A few weeks ago—it seems like a long time ago now—we debated a proposed price freeze. Many people’s reaction was to say that it was a con. In terms of cons by political parties, we have to look closely at what the Prime Minister has said on several occasions about people going on to the cheapest tariff. The reality is that many people are adversely affected by prices. If they are off the gas grid, for instance, they will never get the best deal offered by energy companies because they cannot have the dual fuel discount. Equally, there are people on fixed charges and various other things that are built into the system. However, there is now simplification and the situation is improving regardless of legislation.
Mr Mike Weir (Angus) (SNP)
Is not the situation even worse than the hon. Gentleman suggests? Under the legislation, people on pre-payment meters, for example, can never get anything like the lowest tariffs available.
Albert Owen
Absolutely—that was my next point. These people are in vulnerable positions—not only those in houses in multiple occupation but those in rural areas. I know small estates in my area where people have these very high payments and are unable to get the best tariffs. It is a bit of a con. Although we passed the legislation and had those debates, it is worth putting this in its proper context, and I thank the hon. Gentleman for his intervention.
Mr David Hamilton (Midlothian) (Lab)
As regards the price freeze that Labour is proposing, does my hon. Friend agree that a member of any party that does not agree with it, such as the Scottish National party, has to be asked in their constituency why that is?
Albert Owen
The purpose of the proposed price freeze, which is not the main theme of this debate, is to have a pause, take stock, get the regulator to look at the issues and think about future legislation. I believe that we are where we are because of rushed legislation to privatise both gas and electricity, which created the wrong starting point for an energy market.
Many people on prepaid meters will never be on the cheapest tariff, and that fact was never addressed by the Government when the Energy Act 2013 made its way through Parliament. I want to concentrate on those who are hardest hit by the price discrimination to which the motion refers. They are really struggling with their bills and I make no apology for highlighting that fact time and again. Many of my constituents do not have the best prices. They also have lower incomes and higher transport costs in rural areas, which all adds up to a cost of living crisis.
Caroline Dinenage (Gosport) (Con)
The inflexibility of the prepayment system means that many families end up having to go to a shop to prepay. Does the hon. Gentleman agree that, rather than have the Government compel the energy companies, those companies should use their initiative and take the profits from over-inflated prices to invest in new and more flexible ways for people to make their prepayments?
Albert Owen
The hon. Lady makes a good point. I think that the onus is on the energy companies, but it is also on the Government and the regulator. It is a heavily regulated market and the regulator has a role to play. The point I was making—I will move on from it in a moment—was about cons: it was incorrect to make bold statements to the people of this country, while legislation was making its way through Parliament, that they would be put on the lowest tariff.
David Simpson (Upper Bann) (DUP)
Does the hon. Gentleman agree that the whole issue of direct debit payment hits the most vulnerable in our society and that the threatening nature of the correspondence from these organisations puts a lot of fear into the elderly in particular?
Albert Owen
Yes, and that is why I support the motion, which deals with that very issue. A high percentage of people choose not to pay by direct debt—I will come to the question of choice later—but others have no choice, and they are the ones who feel most threatened.
Mr Jim Cunningham (Coventry South) (Lab)
Does my hon. Friend agree that it is a bit of a con to ask people to shop around for a lower tariff? It is about time we had a proper inquiry into the energy companies, particularly the way in which they operate as a cartel. Only a week or two ago, I watched a television programme in which the regulator admitted that it could only advise companies to lower prices and that it could not impose such a measure.
Albert Owen
I am grateful to my hon. Friend for his intervention. He is absolutely right to refer to the regulator’s lack of teeth and its lack of willingness to use the powers it already has. That is an important point.
Some people say, “It’s a free market. Why should we over-regulate it?” They would also oppose the motion’s suggestion that the Government should consider introducing a cap, but it is important to realise that we have been here before. There is no doubt that the price of energy rose considerably between 2006 and 2008. Ofgem undertook an energy supply probe and agreed to place a licence condition on the energy companies to ensure that different segments of the customer base did not face undue price discrimination. This motion—I am certain that the hon. Member for Harlow will make this point more accurately than me, because he has done a lot of research on the issue—does not ask for very much, only to return to the position we were in previously. The licence condition that Ofgem introduced in 2008 after its energy supply probe lasted three years. My hon. Friend the Member for Coventry South (Mr Cunningham) has hit the nail on the head. We have been here before and Ofgem has the ability to address the issue.
My party has talked about having a new body to put consumer rights at the top of the bill. The opening line of Ofgem’s website states that it is there “to protect the interest” of the customer. In this case, I believe that it is failing, and falling short of what it should do on behalf of the consumer. I am very pleased that my party now considers that off-grid customers need the same protection as those on the mains gas grid, so that everybody in the United Kingdom is treated fairly in relation to energy and can have somebody to fight on their side.
Hon. Members have intervened about those who are hurt most by direct debit payments. I confess that I pay my utility bills by a mixture of direct debits and good old quarterly payments on paper—
Albert Owen
My hon. Friend is absolutely right. That was my next point—that I use the services of my local post office to pay my energy bills, which helps the local community in many ways. We get drawn into using direct debits, because it is a little bit cheaper, but sometimes there is extra social value from using other methods.
Sheila Gilmore (Edinburgh East) (Lab)
My hon. Friend has rightly explained how we can exercise choice and use other options, but such a choice is very limited for many people. He might be interested to know that in a recent pilot for direct payments of housing benefit, my local housing association found that many people did not want to get involved in such things as direct debits, because of bad experiences of payments coming out at the wrong time.
Albert Owen
My hon. Friend is absolutely right. I am sure that that issue will be addressed again as the Consumer Rights Bill goes through Parliament. I can remember a time when cash was cool. People went in on time and paid their bill in cash, and that was considered a good method of payment. Today, people are being penalised for exercising that very choice.
The hon. Member for Harlow has singled out companies in his early-day motions, but many companies have good practices. For instance, my supplier gives an early payment bonus to people who pay early by cheque or cash, or in other forms. There are mechanisms that can be used, but they need to be adopted by the whole industry.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. A lot of Members are waiting to speak. I know that the hon. Gentleman is coming towards the end of his speech, which is heading towards 15 minutes.
Albert Owen
I was dragging out my speech, because some hon. Members had not arrived in the Chamber. That explains the slowness of my opening remarks, but I am now getting to the crux, if not the end, of my argument. The points made in interventions are important: people do not choose to be in such a position, but some are, and there should be a mix of payment methods.
Those who use buzzwords about a free, open and liberal market are missing the point. Much of the energy we consume involves fixed costs over which companies have argued in the past few months that they have no real control. I am talking about such matters as commodity prices and transmission costs. Companies should be fairer in how they bill people, and should not penalise people or discriminate against them through their payment methods.
Other hon. Members have mentioned the choice to switch. To be honest, it is very perverse that energy companies and the Government push switching. No other sector of industry says, in a competitive market, “If you don’t like what we do, go somewhere else.” Can we imagine supermarkets adopting that policy?
I want energy companies to give loyalty bonuses to people who stay with them as long-term customers, rather than tampering with their accounts and penalising them for how they pay. I am told by energy companies—I have no reason to dispute this—that the regulator does not allow it. We should look at that, and if we had the proper review called for in the motion, the regulator would have to consider such issues and help people by alleviating the effects of the high percentage increases of the past few weeks.
The motion is about Ofgem doing its job and standing up for the consumer, the Government being on the side of the consumer, and us, as a Parliament, being on the side of the people we were sent here to represent.
Robert Halfon (Harlow) (Con)
After the debate, I think that I will enter the Olympics because I do not think that I have ever walked so fast in my life as when this debate started slightly early.
I am hugely grateful to my hon. Friend the Member for Ynys Môn (Albert Owen)—I call him my hon. Friend on purpose—not only because he has campaigned on this issue for far longer than I have and since before I was even in this House, but because he was a huge support in tabling the motion and in going to the Backbench Business Committee. I also thank him for his speech.
I would also like to thank my hon. Friend the Member for New Forest East (Dr Lewis), the hon. Member for North Down (Lady Hermon), the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) and all those who came with me to the Backbench Business Committee, particularly my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), who is winding up the debate and has done an enormous amount of work on this issue. I also thank the 177 Members who have signed the motion, making it one of the best supported Back-Bench motions in the history of such motions. That reflects the fact that this is an all-party issue and not just a Conservative issue, a Labour issue or a Unionist issue.
Organisations, such as Which?, have done a huge amount of work to promote consumer rights in this field and they keep me posted on what is happening. We must remember that Which? has led a campaign on this matter for quite a long time.
Mr Mark Spencer (Sherwood) (Con)
I am sure that the House will recognise that my hon. Friend is a tremendous campaigner—an award-winning campaigner—on these matters. I think that it is worth putting that on the record at the start of his comments.
Robert Halfon
I am proud to call my hon. Friend a friend and I appreciate his remarks.
It is no secret that consumers are feeling hard pressed. The cost of utility bills has gone up exponentially in the past three years. Since 2007, the average electricity bill has gone up by 20% in real terms and gas bills have gone up by a shocking 43%, proving that they are a major burden on the cost of living. Citizens Advice has warned that energy bills are rising at up to eight times the rate of earnings. It is no surprise that polling shows that the rising cost of energy bills is a top concern for the British public.
I welcome the efforts that the Minister and the Government have made to help, including by forcing companies to put consumers on the lowest possible tariff, providing a rebate to every domestic electricity customer, reducing bills by £130 for 2 million of the poorest households and protecting pensioners’ cold weather payments. However, with price increases, companies making large profits and general dissatisfaction with energy companies across the United Kingdom, it is clear that the energy market is not working at its prime.
The payment of energy bills by direct debit is often associated with companies overestimating a household’s energy usage, resulting in overcharging and a large amount of credit being built up. Understandably, that upsets many customers and it has rightly received a lot of attention from the media.
Alok Sharma (Reading West) (Con)
My hon. Friend is a huge consumer champion, not just on this issue, but on many others. More power to his elbow. He makes a good point about the way in which direct debits work. They are not a panacea. Last week, I received an e-mail from my constituent, Mr Balfour, who told me that his 87-year-old father had built up a £1,400 credit because he was paying by direct debit. According to Ofgem, direct debits are meant to be set on a fair and reasonable basis. Does my hon. Friend share my view that we should define in more detail what “fair and reasonable” means?
Robert Halfon
My hon. Friend makes a hugely important point, and I suspect that the Minister will have more to say about it. I welcome the fact that the Government are forcing companies to compensate customers, such as his constituent, who have been mis-sold or overcharged. I know that the Department of Energy and Climate Change has asked Energy UK to set up direct debit best practice guidelines.
The problems associated with customers not paying their gas and electricity bills by direct debit have largely been ignored, even though it can end up costing consumers significantly more. Unlike the hon. Member for Ynys Môn, who has known about the problem for some time, I first became aware of it only a few weeks ago. A pensioner in my constituency told me that she had received a letter from Co-operative Energy saying that because she was not paying her bills by direct debit, she would be charged £63 a year extra. I could not believe it—I wondered how on earth such a thing could happen, given that she had gone to the post office religiously to pay on time. I thought, “That is a lot of money”, so on the Monday, I rang up Co-operative Energy and spoke to the general manager, who was very pleasant. He said, “Actually, ours is one of the lowest”. There I was thinking that £63 was a lot of money.
I decided to investigate every single energy company, and the results were shocking. Of the 26 companies that responded, five only allowed their customers to pay by direct debit and 17 charged their customers different rates depending on the method that they used to pay. Only four companies charged their consumers the same whether or not they paid by direct debit. In a euphemism extraordinaire, many of the companies that charged extra said not that they were adding a surcharge but that they were discounting the bills of people who used direct debit, because there were lower costs.
Mr Jim Cunningham
The hon. Gentleman has been a great champion of a lot of energy issues over the past two or three years, for which I pay him tribute.
It strikes me that we must have a good look at how energy companies are structured and at the powers that the regulator has. I am not convinced about the regulator. I do not want to be party political—we are trying to get a consensus tonight—but does the hon. Gentleman share my hope that the Secretary of State for Work and Pensions will examine the motion tonight? There have been strong stories in the press that the Government are going to abolish the winter fuel allowance. I do not know whether that is true or false, but we hope that the message will get through to the Minister responsible in one way or another.
Robert Halfon
I want more money to go to the poorest pensioners, including the winter fuel allowance. I do not believe that millionaires or people with earnings of more than £100,000 should get winter fuel payments, and I would rather they went to the poorest.
Charlie Elphicke (Dover) (Con)
I congratulate my hon. Friend on his speech. Does he agree that when people are in credit, interest should be paid at a proper rate? Does he believe that the reason why balances creep up is that bill models are too opaque, and that a filling station-type model might be better?
Robert Halfon
My hon. Friend makes an important point, and I am sure the Minister has heard his remarks.
Philip Davies (Shipley) (Con)
I totally understand my hon. Friend’s point, but my only concern about the thrust of his arguments is that people are being charged less for paying by direct debit rather than being charged more for not doing so. If we stop that differential payment scheme, energy companies might equalise charges upwards rather than downwards and charge everybody more for their bills, in which case nobody will benefit and some people will lose out even though everyone will be paying the same.
Robert Halfon
I thank my hon. Friend, with whom I have discussed the issue. I will come on to it later, so I hope he will bear with me for a moment.
Some companies’ levies are extraordinary. I spoke last night to the managing director of Spark Energy, which says that it has a special tariff system and that the majority of its customers are tenants. Some 10,000 of Spark’s 80,000 customers, those who do not pay by direct debit, are charged up to £390 a year extra. The managing director told me that that was purely down to costs. I will make this point later, but what is to stop another company coming along and saying, “It’s £450 or £500 and that is down to costs”? We need transparency.
Let me make three points: first, I believe that these charges effectively act as a stealth tax on the poor; secondly, I want to rebut the arguments used by energy companies to defend such practices; and thirdly, I will say what I think the Government should do about them.
The excessive charges often hit those we should protecting the most, and just like my constituent, it is often the elderly who are affected. Many pensioners do not like paying by direct debit because they want to be in control of their finances. Over the past few weeks I have been inundated with letters from pensioners. One said:
“We are from the old school—brought up to put our bills money away every week. Never to be in debt. But because we prefer not to have direct debit, we are punished.”
Another wrote that
“as members of the older generation, we are very aware that keeping a careful eye on budgets and control of finances is very important, and we have always been in favour of paying bills as and when they arise—budgeting year by year for increases and ensuring that we have money to cover such expenses. In this way we avoid becoming overdrawn and incurring bank charges.”
That is exactly the sort of fiscal responsibility we should encourage, and it is not exclusive to pensioners.
Understandably, anyone on a low income might be concerned that a direct debit could be taken at a moment when they are not able to pay for it. They might be waiting to get paid a day later, for example, and missing a direct debit payment would incur a heavy bank charge. It also does not take into account those who struggle to get access to proper banking facilities. Some 1.9 million households in the UK do not have a current account and there is no facility for them to have an overdraft. Half a million of those households do not even have access to a basic bank account that can accept direct payments. Such people are incredibly vulnerable and have very little choice over their payment methods, yet they are being penalised for that and are often those who can afford it least.
This is not just about finances because, crucially, many people, particularly the elderly—certainly in my constituent’s case—enjoy the social aspect of going to the post office to pay their bills. Many pensioners have contacted me to say that they do not trust direct debits and feel that companies discriminate against them because they cannot use computers. As one person rightly pointed out, direct debits and credits are always susceptible to human error on the part of the recipient, and mistakes take an enormous amount of time to sort out. All echelons of society should be catered for, not just computer and smartphone users, credit card holders and the technologically literate generation.
Robert Halfon
I will give way to the hon. Member for South Antrim (Dr McCrea) who represents a party that has been enormously supportive on this issue.
Dr McCrea
I congratulate the hon. Gentleman on the effort he is making on this important issue. The motion before us reminds us that more than 1 million people in the UK do not have access to a bank account. Surely that points to the fact that energy companies are penalising the weakest and most vulnerable people in society.
Robert Halfon
The hon. Gentleman is right, and even worse, those companies justify the charges by saying that they are because of the cost of pursuing non-payers. In essence, the poorest and pensioners who pay on time are paying for companies to pursue non-payers or late-payers.
Mr Marcus Jones
My hon. Friend is a true consumer champion. Does he agree that the same principle exists for many people who have not got access to the internet and are penalised for asking their supplier for a paper bill and charged a levy as a result?
Robert Halfon
My hon. Friend is right, as he will understand as I continue my remarks.
Dan Byles (North Warwickshire) (Con)
I, too, congratulate my hon. Friend on securing this important debate. Is he aware of any studies or work that looks at exactly how the burden of this problem falls on different income distribution groups? If such work is not available, does he think that Ofgem, or possibly the Department of Energy and Climate Change, should commission it so that we can see exactly where the burden of this disparity falls on different income deciles?
Robert Halfon
My hon. Friend makes an important point. I know that Which? has done an enormous amount of work, as have other organisations and the Keep Me Posted campaign. I am sure the Minister has heard my hon. Friend’s remarks.
How do some of the energy companies justify these fees? First, they claim, amazingly, that the fees they charge are proportionate. Under Ofgem’s licensing conditions to energy companies, they are required to ensure that what they charge is reflective of cost. As I have said, I have no problem with a small administrative charge to reflect the extra cost companies face in processing a cheque, but many companies offer a paperless discount of approximately £6 per annum, implying that the cost of letters is £6. Keep Me Posted, after discussions with mailshot companies, has revealed that the cost of printing letters, staff cost, postage and printing is 19p per item. I would therefore question how some companies have concluded that sending out letters can cost up to £15, and whether that is truly proportionate. It is also worth noting that some companies, such as Good Energy and Green Energy UK, do not charge their customers anything different based on their preferred type of payment, believing that customers should not be penalised for how they choose to pay.
Secondly, the companies argue that they should charge more owing to the cost of providing credit to customers. Of course, I understand that when one pays for something retrospectively there is an extra cost, but, as I have said, it is also worth pointing out that some companies that charge retrospectively do not charge anywhere near as much as the big utility companies. BT is not my favourite company. Nevertheless, it bills customers retrospectively for the calls they make, yet charges just £2 a month to customers who do not pay by direct debit. There is no extra charge for any customers who are on a low income and therefore qualify for the BT basic service. I praise BT for making a commercial decision not to rip off their customers and to charge just £2 a month. I believe that companies should be able to meet some of these extra costs themselves. Because of the nature of direct debit payments, customers often pay too much.
Kate Hoey
I congratulate the hon. Gentleman on his articulate outlining of the case. He mentions BT. His ten-minute rule Bill next week covers a much wider area, because it is clearly not just the energy companies that do this. Does he not agree with me that a basic principle should be that if someone has a bill and they want to pay it in cash, they should not be charged a penny extra for doing so?
Madam Deputy Speaker (Dawn Primarolo)
Order. Before the hon. Gentleman replies to that intervention, may I remind him that the Backbench Business Committee recommends 10 to 15 minutes for opening speeches? He is not making an opening speech, but he is being allowed that time. That 10 to 15 minutes does not allow extra time for interventions. He has been very generous, but a lot of Members wish to speak. I would be grateful if he could now draw his remarks to a conclusion.
Robert Halfon
Thank you, Madam Deputy Speaker. I will do my best.
The third claim is that the cost differential—coming on to the point made by my hon. Friend the Member for Shipley (Philip Davies)—is due to the discount that companies offer customers who pay by direct debit. Indeed, many energy companies I spoke to told me that what they actually offered was a discount to encourage customers to use direct debit. However, if companies are using discounts to attract customers, it seems possible that they are using non-direct debit paying customers to subsidise these accounts—the point I made earlier. Differences in price should therefore be called a premium, rather than a discount, which can be misleading. Calling a difference of £390 a discount is like calling a mortuary a negative patients output. Any price savings must be proportional and must be communicated transparently to the customer.
The fourth claim is that the cost is reflective of the fact that those who do not pay by direct debit are more of a risk for non-payment. I have seen the cost breakdown of some companies that shows how much this adds on to the extra charge. Roughly, it makes up about half. Returning to some of the people I quoted at the beginning of this speech, all of them said that they pay on time without fail. Why should they pay more because of other people’s mistakes?
The fifth claim—I am nearing the end of my remarks—is that introducing a cap on what companies can charge consumers would result in everyone’s prices going up. That should not be the case, and the suggestion that it would push up prices is symptomatic of an energy market that is not as competitive as it should be. Energy companies should be fighting to keep these charges as low as possible to hold on to as many customers as they can. It tends to be the smaller companies that charge the least or do not differentiate between payment types. I am pleased that the Government are encouraging new entrants to the market, but in the short term I believe that a moderate cap on fees charged is the answer.
In conclusion, I am not against energy companies. I believe in business, but I believe in fair business, not the juggernaut of the big corporation. That is why I urge the Government, first, properly to investigate these charges and reassure customers that their bills are proportionate and that they are not being hoodwinked. Any companies whose charges are not found to be proportionate should be subject to a fine or windfall tax, with all the money being passed back to the consumer. Secondly, there should be fundamental reform of the system. As I have suggested, late fees should be for those who pay late—
Madam Deputy Speaker (Dawn Primarolo)
Order. It is now three minutes since I asked the hon. Gentleman to conclude his remarks. There is going to be a tight time limit. When I say “conclude”, I normally mean a couple of sentences. I realise he has a lot to say, but to say it within the time is always the challenge in the House. Will he please give us his last two short sentences, otherwise I will just sit him down?
Robert Halfon
Yes, Madam Deputy Speaker.
Finally, a cap should be introduced on the amount a customer can be charged. We need transparency, a cap on charges and fundamental reform.
Madam Deputy Speaker
Order. I must inform Members that there will be an eight-minute time limit on Back-Bench contributions. It might be necessary to shorten it, but let us see how we go.
Yvonne Fovargue (Makerfield) (Lab)
I, too, congratulate the hon. Member for Harlow (Robert Halfon) and all the Members who have supported this important debate.
We are all paying a lot more for our energy. As the hon. Gentleman mentioned, energy prices have increased eight times faster than earnings since 2010. It affects us all but impacts on lower-income households far more, not just because they have less to spend generally, meaning that any rise in the price of everyday goods and services hits them harder, but because they pay more than better-off households for their heating and power—many poorer households pay for their light and heating using prepayment meters. That is the area on which I want to concentrate.
People with prepayment meters have more expensive tariffs than direct debit customers. Citizens Advice calculates that meters add £100 a year to the average bill, which is a lot of money for someone on a low income already stretched by the rising prices of other household essentials. It is no wonder, then, that StepChange debt charity has recorded a 129% rise, between 2010 and 2013, in the number of clients in electricity arrears and a 114% rise in gas arrears.
We can all understand why energy companies want customers to pay their bills by direct debit—it is easier for them and cheaper—and many of us do pay that way, but 45% of households do not, according to Which?. In fact, more than 7 million people in the UK pay for their gas and electricity by prepayment meter, and that figure has been rising in recent years. It is not right that less well-off families are being penalised for using this payment method. There are many reasons households choose not to pay by direct debit: they might not have a bank account; they might be wary of falling into arrears; they might have been put on a meter by the energy company for past arrears; or they might simply have inherited the meter from a past tenant in their flat or house.
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
My hon. Friend is making a powerful case about prepayment meters. I have been contacted by a constituent who wants to get off her prepayment meter. She has just been made redundant and is facing a big cost of living crisis in her own life, but to come off the meter will cost her £195, because Scottish Power charges £45 for a home visit by an inspector and then expects her to come up with a further £150 for a credit check. She will get that back if she passes, but she is still expected to find £195 just to come off the prepayment meter, which she wants to do to reduce her energy costs. Is that not another example of how these charges are a penalty on the poorest?
Yvonne Fovargue
I quite agree with my hon. Friend. Indeed, I was coming to that very point. The company I spoke to charges £50 for removal, or a deposit, and as my hon. Friend says, a credit check is payable by the person who wants to change their meter.
The other issue is that many people on prepayment meters are not aware of the tariff they are on, particularly if they moved into the accommodation with the meter already in place. In a recent survey by Stratford-upon-Avon citizens advice bureau, only 7% of gas users surveyed and 12% of electricity users knew the name of their supplier and the tariff they were on. This state of affairs is not helped by the fact that prepayment users receive only an annual statement. They do not receive quarterly statements. They receive an annual statement, which makes it impossible for them to monitor their expenditure, their deductions and their energy use on a regular basis. Crucially, many do not know that in addition to the energy cost, they are having a daily standing charge deducted from what they pay. Many people believe that all the money they put in goes to fuel, but if they try to economise in the warmer weather by not topping up their card, they easily build up arrears of the standing charge, and that plays havoc with the household budget.
The situation is made worse by emergency credit, which is often accessed by pressing the special button on the meter. In the Stratford-upon-Avon survey 67% of people used emergency credit in colder weather, but most did not realise that the deduction for the standing charges and arrears cease when they go on emergency credit, and are then taken off when they next top up. I have seen people at the citizens advice bureau who have topped up £10 but have had almost £5 of that go on their standing charge. That plays havoc with the household bills. If the money cannot be found, the prepayment user is left without light, heating or cooking facilities. In the Stratford-upon-Avon survey 30% of the clients who answered the survey had a long-term limiting health condition. These are the people we are leaving without heat, light or cooking facilities.
Prepayment meters are often presented as an effective budgeting tool for low-income households, and—this sounds quite benign—people self-disconnect. But they do not self-disconnect: they simply do not have the money to top up or they cannot get to the shop to do it. The reality is that the meters themselves are contributing to the increased debt problem. The highest fuel poverty rate by payment method is among households that pay for their fuel using a prepayment meter.
Energy companies need to stop discriminating against prepayment meter users and accept that there are good reasons why people are reluctant or unable to pay by direct debit. They need to ensure that prepayment meter customers have access to and knowledge of the various tariffs on offer, and that they get the best energy deals. There is a lot of talk about consumer choice, but for many on prepayment meters there is often no choice, unless the choice is between eating or heating. The energy companies need to respect their prepayment clients—they are customers, after all—and ensure that they have real control over their expenditure and energy use.
Ian Swales (Redcar) (LD)
I add my congratulations to the hon. Member for Harlow (Robert Halfon), who has led the charge, and to all the other Members who supported his motion today. The debate has already shown that there is no monopoly of concern in one part of the House—we are all concerned about this. I heard the calls for extra analysis of the issue, but there is no doubt that we are talking about an issue that largely affects the poorer part of the community. We could analyse it to death, but we all know intuitively what is going on.
I worked in the electricity industry way back in the 1970s. I was probably around at the start of the discount for direct debit schemes. We always used to do our marketing campaigns in the spring. Why? Because that allowed us to pile up credit through the summer, which helped to finance the business. There is no doubt that companies are doing that. We always used to aim to hit the exact average over the 12 months, but some companies seem to be looking to build up credit over the 12-month period by assuming extra usage. That practice ought to be stopped. Back in those days we used to give people an incentive of £2 or £3 a quarter for paying by direct debit. I am staggered by the size of the so-called incentive that is around now. It seems to be way out of line with any measure of actual costs. Of course, we have additional things now, such as discounts for online bills, which can add up to a fair amount, so there are many ways in which those without direct debit facilities or the internet are being penalised.
However, I want to follow on from the previous speaker, the hon. Member for Makerfield (Yvonne Fovargue), who made a good speech about prepayment meters. Rather like the hon. Member for Harlow, I had this issue brought to my attention just a couple of weeks ago. I was aware there was an issue, but I did not know how big it was until a constituent of mine called Frank Harrison claimed he was spending an extra 25% by having a prepayment meter. I found that staggering, but sure enough, when I did a bit of digging, I found that that was roughly the figure. I heard the figure of £100 from Citizens Advice. However, I have checked the three biggest comparison websites, which estimate the difference at between £160 and £300 extra for having a prepayment meter, and we are talking about people who largely cannot afford any extra.
I understand the history. As an accounting trainee, I remember going round with a meter collector with gigantic bags of silver coins, which he had to keep shipping to a bank. The costs of prepayment meters used to be serious when somebody had to be sent round collecting money frequently. However, we do not have that now; we have pre-payment cards. The risks of default are minimal. Prepayment meters also used to be a big target for theft, but not any more, and the energy companies are getting their money in advance, so the excuse that the costs of prepayment meters are much higher starts to fall away, given that people have to pay for the energy before they use it. Therefore, by definition the bad debts will be nil.
I join other Members in calling for transparency. It is inexcusable that these companies appear to be able to differentiate however they like, whenever they like and to any degree they like. The concept of a cap, which we heard about from the hon. Member for Harlow, is an extremely good start, but I would like to go further. Through policies such as the energy company obligation, the Government already require energy companies to do things—in that case to do with insulation—for the poorer sections of the community. Given the cost of energy, it is high time that companies were required to do more—to get involved not just in insulation, but in levelling the playing field between different methods of payment, particularly when it comes to prepayment meters, and to bring down the direct debit difference, if it is to exist, to a very low level. I would favour the Government saying, “Along with the ECO, we expect you to provide the lowest cost tariffs, whatever the method of payment.”
Jake Berry (Rossendale and Darwen) (Con)
I am sure that, like me, my hon. Friend would want to publicise the fact that uSwitch now offers a paper switching service. Some of the people on the most expensive tariffs can be the elderly and the vulnerable—the people least likely to want to go on the internet to change user. This excellent debate initiated by my hon. Friend the Member for Harlow (Robert Halfon) is a good opportunity to publicise uSwitch’s paper switching campaign.
Ian Swales
I would not necessarily want to support any particular commercial organisation, but I recognise the bid that the hon. Gentleman makes and I certainly support the idea of switching. He is absolutely right that anyone who wants to get the best deals these days has to have a bank account—and pay by direct debit—and has to be online to get the discounts and switch easily. They certainly do not want to have a prepayment meter. All that militates against the poorest part of our community.
David Mowat (Warrington South) (Con)
I agree with my hon. Friend that the current practice militates against the poorest people. His example of the ECO is rather a good one, because it involves the Government putting the onus on companies to do something. The only thing that bothers me a little, however, is that what is being suggested might imply a levelling of the bill upwards, as it does with the ECO, although that might be a reasonable thing to happen.
Ian Swales
What I am suggesting is really an averaging process. We expect better-off consumers effectively to pay for various measures nowadays, and I think we should ensure that they help the poorer members of the community in this instance by levelling the playing field between the different tariffs. I hope that the Minister will respond to that suggestion.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I shall not detain the House for the full eight minutes. I just want to tell Members about an event that I organised in my constituency in January 2012.
I had begun to notice that more and more people were coming to my surgeries to talk about their difficulties in paying their bills. When I started to talk to people who were in debt about what their debts were, arrears of gas and electricity were appearing ever higher on the list. I started writing to charitable trusts, particularly those attached to British Gas and other large suppliers, in an attempt to help those people.
In order to draw attention to the issue, I organised a gas and electricity advice day in my constituency. It was attended by representatives of the big six, Co-operative Energy—which was very new at that point—debt advice agencies, the Royal British Legion, and other bodies that do good work out there to help people. It was also attended by representatives of uSwitch, because I thought that my constituents were, in the main, not people who would know how to go about switching. I thought that it would be anathema to them. After all, few of us who get up and go to work each day want to spend hours trying to decide on an alternative energy supplier. uSwitch was inundated on the day. People—they were mainly elderly, and mainly members of particular ethnic minorities—brought their bills, and cautiously went to talk to the uSwitch representatives. I observed that no one trusted their suppliers to stick to a better deal if they managed to secure one, or felt confident that the wool would not be pulled over their eyes.
We held eight question and answer sessions on a rolling basis with Audrey Gallacher, who at the time was director of energy at Consumer Focus. At the beginning of each session, the same two issues were raised—and 430 people were there that day. Some said, “We know that we are paying more because we do not pay by direct debit, but we do not trust our supplier. We do not want it to have access to our bank account. We would be in economic meltdown if the supplier took large sums from us, so we do not want it to have access to our account. We also know that although we will be racking up credit, because that is the sort of people we are, the supplier will still increase our direct debit.” Others asked, “How do I know that I am not being wrongly charged? How can I understand my gas bill? Do I need to be an advanced scientist to understand what the unit price is, and how the supplier charges me?” That question arose time after time, and it made me more aware of how people felt. Members of the Caribbean community in my constituency, in particular, did not want to be involved with direct debit.
Gas and electricity costs are still one of the major sources of continuing debt among those who come to my surgeries. I encountered an amazing case just a few weeks ago. My constituent Mrs Boakye cares for her elderly mother, who has had a stroke, and has four adult children. She won the jackpot when she was given a social tenancy of a four-bedroom house. All her dreams were realised: she was out of the insecurity of the private rented sector. Her only problem was that her supplier, British Gas, then attempted to take £835 from her account to meet her gas bill. I do not know about other Members, but I could not sustain a direct debit of £835. Certainly Mrs Boakye, as a nurse, could not do so. Her account was put in a spin, and all her direct debit payments began to be missed. It took some time for British Gas to agree that it had made a mistake.
Mrs Boakye is living proof that those who are on tight and limited incomes should not let gas and electricity suppliers have access to their accounts. While that fear and anxiety exist, the people who can least afford it will continue to pay most for their energy.
Ms Margaret Ritchie (South Down) (SDLP)
I thank the hon. Member for Harlow (Robert Halfon) for bringing this topic to the Chamber through the Backbench Business Committee and for his tireless work on behalf of consumers and the wider community, and I thank the hon. Member for Ynys Môn (Albert Owen), too.
In addressing today’s debate and the motion, which focuses on direct debit payments for electricity bills, we must also take into consideration the current economic situation faced by consumers. People are already paying excessive energy bills. Nearly all the major UK operators increased the cost of annual bills by about 10% last year, while Power NI delivered a staggering 17.8% increase in Northern Ireland. Although the recent jobs and GDP figures for Northern Ireland give some cause for hope, the truth is that this limited recovery is not being felt by families who are faced with higher energy bills, rising petrol costs and real-terms pay cuts. In this economy, every pound matters and that is why today’s debate is so important.
It is understandable if a company wants to give a discount to customers for paying by direct debit, and that is an entirely valid pricing structure, provided that it reflects the genuine saving to the company of the payment option. However, what is not acceptable is the vast price differential which seems to be prevalent in the current market between customers paying by direct debit and those not paying by direct debit. It would seem that those not paying by direct debit are actually paying a penalty to subsidise other customers’ lower bills. That is clearly unacceptable.
This is not a plain and simple matter of consumer choice. There are over 1 million people in society who do not hold current accounts and who therefore do not have the option of paying by direct debit. Moreover, 45% of all bill payers, including many of those with bank accounts, do not pay using direct debit for a variety of valid reasons. Such people, who are often vulnerable or elderly, should not face a penalty for that. Sadly, the people facing penalties, which can amount to hundreds of pounds a year, are often also those most likely to be facing fuel poverty or for whom such an amount of money would make the biggest difference.
Jesse Norman (Hereford and South Herefordshire) (Con)
I thank my hon. Friend the Member for Harlow (Robert Halfon) for calling this debate and I apologise for missing the early part of it. The hon. Lady is making a very valuable case. Does she agree that the additional cost to which disadvantaged people are being put by these meters and other payment systems that are not direct debit is grossly disproportionate to the amount of savings that are supposed to be generated for the power company and therefore represents an extortionate extraction of value from the poor member of the public who has to pay for it?
Ms Ritchie
I thank the hon. Gentleman for his intervention, and I fully agree with him, because I have seen that, not least in my own community in Northern Ireland.
Many people are likely to be pushed into financial difficulties by such charges and they often have the least flexibility when it comes to arranging their financial affairs. I support this motion on the simple principle that price structures and options should offer customer choice, not be determined by customer constraint.
It should also be pointed out that not every company operates in this way. In contrast to Power NI, there is Budget Energy in Northern Ireland. It does not penalise customers for non-direct debit payments. In fact, its cheapest tariff per unit is for prepayment meters. Other companies should be encouraged to consider similar pricing structures that do not penalise certain bands of customers. Again the issues of transparency and equity and fairness come into play.
Bob Stewart (Beckenham) (Con)
If someone pays their bill promptly, it is unfair that they should be penalised for not using a direct debit. Surely it should be put into law that people who pay their bills when they are asked to do so should not pay a penalty in that way.
Ms Ritchie
I agree with the hon. Gentleman; nobody should be penalised, and those who are least well-off are being penalised more than anyone else. Energy bills are at very high levels at the moment.
I am glad that the Prime Minister called last week for a probe into these excessive costs, and that the Department of Energy and Climate Change is to investigate the situation. There is clearly a role for Ofgem there, and I will encourage the utilities regulator in Northern Ireland to intervene with Power NI. Any such investigation needs to determine the real cost of the different payment options and the level that should be charged to ensure that one band of customers is not cross-subsidising another.
Ms Ritchie
I apologise, but I want to make some progress; I have already taken some interventions, and to take more would be unfair to others.
As I was saying, we need to determine the level that should be charged to ensure that one band of customers is not cross-subsidising another, particularly when a group of customers with limited financial means is found to be supporting cheaper prices for those who have the luxury of choice. The Consumer Rights Bill to which my hon. Friend the Member for Ynys Môn referred has a role to play. It offers the perfect opportunity for implementing the measures proposed today, and I would like to ask the Minister if he will now bring it forward.
We have a separate energy market in Northern Ireland, but I am aware that a similar situation exists there in relation to non-direct-debit charges. I therefore hope for an assurance from the Minister that the review will consider Northern Ireland as well. Will he tell us what discussions have taken place with the relevant Minister in Northern Ireland on the matter of energy billing?
The House knows of the wider issues facing the energy market, and there is clearly a need for sweeping reform, but today’s motion offers the opportunity to commit to a measure that would resolve at least one inequity. That would bring a degree of relief to families and individuals who are hard pressed by the ever-increasing cost of living.
Mr Mike Weir (Angus) (SNP)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate and on amassing such an impressive number of supporters. I also congratulate the Backbench Business Committee on securing the time for the debate.
All our constituents have suffered from rocketing energy prices over the last few years. Hard as that is for everyone, it is harder still for those who are unable to access the special deals that are offered by just about all the energy companies. In passing, however, I note that it is not all plain sailing for those who sign up to pay by direct debit, which can involve either a quarterly bill payment or paying a set amount per month. Those who take the quarterly bill payment option do not necessarily have any control over the amount being taken from their bank account, especially if they are out a lot and regularly have estimated bills. That can be a real problem. For those who opt to pay a set amount per month by direct debit, the company will regularly try to increase the amount they pay, whether or not the current amount covers their bills. Any attempt to retrieve an overpayment can result in a long tussle. At any given time, the energy companies are sitting on substantial sums that have been overpaid by customers. These are estimated to be about £2 billion, earning the companies £36 million a year in interest. It is hardly surprising that they keep trying to up the level of people’s direct debits.
Matters are not helped by the fact that energy companies are often not transparent about the charges that will actually be applied. The hon. Member for Makerfield (Yvonne Fovargue) mentioned the fact that many people on prepayment meters did not know what tariff they were on. In recent price rises we were told the average, but that hides a multitude of sins. A constituent, a low energy user, contacted me yesterday regarding the charges levied on his flat. He told me that the unit charge had risen from 7.242p to 10.89p—a rise of some 50%. That is outrageous.
The crux of the debate is not so much energy prices as social exclusion. Gratifying as it is to give the big six energy companies a well deserved kick, we also need to examine the actions taken by many of our major financial institutions and how they work against people accessing cheaper energy deals. The Minister may be able to do something about energy companies and Ofgem, but we need a cross-governmental effort to look also at how people access finance and bank accounts. The major energy companies all offer better deals if people can pay for their energy by direct debit; Citizens Advice reckons that the average saving is £100 on that paid by people who pay by other methods, although it can be as high as £140. That is great for people who are able to pay by direct debit, but many of those most in need of cheaper energy are the very people unable to pay by direct debit. There can be many reasons for that. Banking exclusion is one such reason, because about 1 million people do not have a bank account. We have all seen in recent years the flight of the banks from rural areas and areas of deprivation, and just the other week many branch closures were announced.
Sheila Gilmore
I am sure the hon. Gentleman is aware of this, but I would like him to comment on it. Many big banks have retreated from things such as basic bank accounts—Barclays is the only one of the major banks still to offer that—so in the past few years things have gone backwards on banking inclusion.
Mr Weir
The hon. Lady is right about that, and I will deal with the matter in a moment.
Another reason is digital exclusion, because many people do not or cannot access the internet, perhaps because they cannot afford it or they are unable to work a computer because of illness or age. Other people are simply disengaged from any competitive initiatives. Some may lead chaotic lives, whereas others may simply live in privately rented accommodation and move frequently to seek employment, and, thus, cannot enter into the longer-term agreements demanded by many of the direct debit arrangements.
Today’s debate pack contains an interesting table detailing the percentage of people who pay by direct debit. The figure for the south-east is 63% and the one for my area of north Scotland is 56%. Surprisingly, London’s figure, 41%, is one of the lowest, but that is because of the transient nature of London’s population and the fact that it contains a huge number of houses in multiple occupation and young people living in them. Those things push the figure down.
Some people are simply wary of getting into debt, especially if they have previously had problems, and they do not want to get into the position where they cannot control exactly when money comes out of their accounts and have to juggle their income to ensure that all bills are met. The availability of direct debit arrangements further discriminates against such consumers.
Let me directly address the point made by the hon. Member for Edinburgh East (Sheila Gilmore). Anyone who cares to look at banking comparison sites such as MoneySuperMarket.com or money.co.uk will find that data on best buy basic bank accounts show that some managed accounts with niche suppliers, which are supposedly specifically designed to help people with poor credit histories budget, have substantial monthly fees of about £12 to £14; those come up first if people google “basic bank accounts”. By contrast, some of us still, at least for the moment, enjoy free banking, as well as being able to get direct debit payments on our energy. It is also illuminating to look at the discussion forums on some of these sites and at the threads on basic bank accounts. It is apparent that the big banks, some of which still offer basic bank accounts without a fee, try to place people who inquire about basic bank accounts on their basic current accounts, which allow the very overdrafts that many of those seeking basic bank accounts seek to avoid. Such accounts can also sometimes come with swingeing penalties should the limit be exceeded.
In addition, people may find that the payment card for their basic bank account works only in certain automated teller machines. That makes things difficult, particularly in rural areas, where there may be only one ATM; if it does not happen to be the right one, people cannot access their money. Many people who have had difficulties with banks in the past are also wary of opening basic bank accounts with the same banking group, as they have real concerns that the money that goes into them might be swiped by the banks to clear pre-existing debts. All of that works against taking advantage of direct debit deals.
The situation is even worse for people who are on prepayment meters. As I have said before, this is one of the rare examples where people are actually penalised for paying in cash up front. Not only can they not access special deals, but the tariff is often higher. Many people who rent privately have no option, as private landlords have often installed prepayment meters. Worse still, when meters are calibrated to recover existing debt, much of the money is taken before energy is provided.
Those are just a few of the many issues around energy prices. For many people, the advice from successive Governments to switch suppliers or to pay by direct debit simply does not work. I accept that there are additional costs in different types of payments, but the huge disparity in charges shows that the current system is not working. We need real action on the matter and a fairer and transparent charging system. The motion calls for a cap on charges, which is very reasonable. I appreciate that the problem is not all down to the Department of Energy and Climate Change. As I said earlier, I hope that there will be a cross-governmental effort to deal with the problem.
Caroline Nokes (Romsey and Southampton North) (Con)
I add my congratulations to my hon. Friend the Member for Harlow (Robert Halfon) on securing this important debate. I intend to keep my comments brief, as other Members have covered some of the subjects in such depth. However, there is an issue that I wish to raise, pertaining as it does to the south-east. We have just heard from the hon. Member for Angus (Mr Weir) that people in the south-east are more likely to pay their bills by direct debit. However, even in Hampshire, which is a relatively well-developed county, there is a significant problem with broadband access in rural areas, making it hard for people to manage either their banking or energy payments online. As we have heard, it is those who can manage an online account who often get the most preferential rates for their energy bills.
It is simply too much of a generalisation to say that it is the elderly who are least likely to use the internet to manage their energy bill. There are many silver surfers in my constituency who are happy to use the internet to manage their energy bills and their banking, but they cannot manage them in areas where the broadband speeds are simply not adequate to do so. I speak from some experience; I can manage my own energy account online, but that is because I have relatively rapid broadband speeds at home and can upload the regular requirements of the meter readings that have to be taken. There are plenty of people in my constituency who are still on dial-up, and simply could not dream of uploading anything to the internet via those means. It is important that those who cannot manage their energy bills online should not be discriminated against.
I want briefly to comment on the issue of refunds. We have repeatedly heard from Members about how their constituents have seen their accounts getting into very high rates of credit. Of course, if someone knows that their account is in credit, it should not be particularly complicated to make contact with the energy company and ask for a refund. However, in the case of direct debits, we can all cite examples of how they are increased year after year. Consumers can find themselves paying more and more without ever being in a position to compare the bill, how much they are paying and how much is in their account. They are often confused by the sheet on the back of their bill, which does not make things transparent.
In conclusion, I commend my hon. Friend the Member for Harlow for his efforts in this area. He is absolutely correct when he says that transparency is the key to the matter.
Sammy Wilson (East Antrim) (DUP)
I congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate through the Backbench Business Committee and on the work that he has done on this issue. When we consider the impact of rising energy bills on people across the United Kingdom, every aspect of those increases should be closely examined.
Northern Ireland has one of the highest levels of energy bills, and we have certainly had the highest increases in recent years. That is the result of a range of issues, including the green energy policies of central Government that add £100 a year to energy bills. On top of that, perverse incentives lead to direct debit increases for consumers.
That all hits Northern Ireland in a number of ways. First, we have the lowest percentage of people in the United Kingdom paying by direct debit—38% as opposed to 55% across the rest of the UK. There are many reasons for that, including a more conservative approach to such things. Fewer people have access to bank accounts and the remoteness of many rural areas means many people cannot pay online. In my constituency, a huge programme is trying to connect people to broadband because of the low level of coverage for thousands of households. Those in remote areas, especially those in the Antrim plateau, do not even have broadband as an option. As a result, 42% of people in Northern Ireland live in fuel poverty. That is exacerbated by perverse incentives that affect how energy bills are structured.
Ian Swales
The hon. Gentleman is talking about perverse incentives. Does he agree that people who have access to the internet and pay by direct debit are those who are most likely to switch, which means that the energy companies have a perverse incentive to give them the lowest tariffs to try to keep them?
Sammy Wilson
They do. The hon. Gentleman makes a very important point, and in most cases those people have the greatest ability to pay for electricity. In Northern Ireland, for example, those who cannot pay by direct debit or online will pay £55 more a year for their energy bill. That is about half the increase they pay as a result of the green subsidies consumers must pay to the energy companies.
Bob Stewart
It seems to me that, from the point of view of an energy company, if people can be put on to direct debit payments, all too often those who can afford it will not challenge their bill—they will just say that it is done and dusted. That is a big advantage for the energy companies.
Sammy Wilson
It is a huge incentive. The figure has already been quoted. People do not query their direct debits and as a result huge surpluses worth £2 billion across the United Kingdom have built up, meaning that people are in effect lending the energy companies money for nothing and those companies reap the interest. Meanwhile, those who cannot afford to or choose for whatever reason not to pay by direct debit must pay extra.
The companies’ defence is that they have additional costs in dealing with people who do not pay by direct debit. I approached Power NI about that and it identified two additional costs. First, if people pay by cheque, the company pays additional transaction costs. Secondly, if people pay by cheque, even if they pay on time—I did not understand this—the company says that that affects its cash flow. But as long as people pay promptly, whether by direct debit at the end of the month or by cheque at the end of the month, the company’s cash flow is not affected. I do not know what transaction costs the power companies are paying if they have to charge 6% to 8% more when a member of the public pays by cash or cheque. They are certainly not the kinds of transaction costs one would expect in those circumstances.
What action can be taken? First—a number of Members have mentioned this—the power companies must be more transparent. They cannot simply throw the matter aside and glibly say, “We charge people who do not pay by direct debit extra because we have increased costs.” Those costs must be quantified. As I have said, I do not accept that the costs are 6% to 8% higher just because someone chooses to pay at a post office or by sending the power company a cheque.
Secondly, I believe that there is a role for the regulator, whether Ofgem or, in Northern Ireland, the Utility Regulator. The regulator should be on the side of the consumer. In fact, that is one of its objectives and part of its remit. However, when I contacted the Utility Regulator about the cost disparity, I received a letter that might as well have been written by the power company. Indeed, the power company probably would have given a better explanation, rather than the few lines I received from the Utility Regulator. There was no challenge function, no querying of the differences in costs, and no seeking of additional information. It simply stated the differences, which I already knew, and the reasons for them, but there was no indication of whether that would be challenged.
I also believe that there is a role for the Government in this, whether through the Consumer Rights Bill, which is currently going through the House; by encouraging the regulator to act by digging more deeply into the reasons given by the power companies; or indeed, as has been suggested, by finding find ways of increasing competition, which of course would give consumers more options.
It is striking that some of the smaller companies, which are hungry for customers, do not face those additional costs. In fact, some of them do not impose additional charges at all. That is why I cannot believe that there are such huge cost differences for the larger power companies. Perhaps that is the good impact of competition. Why do some companies find that there are huge costs resulting from people paying in a particular way and other companies do not? Or is it that the smaller companies are hungry for customers and wish to compete? If that is the case, I think there is a lesson for the Government: the more competition we have in the power industry, the more chance we have of addressing these issues.
I thank the House for listening to my arguments and the hon. Member for Harlow for securing the debate. I trust that some good will eventually come from this to help those who are on the bottom rung when it comes to their ability to pay their power bills each month.
Mr Brooks Newmark (Braintree) (Con)
I had not intended to speak, but I have been moved to make a couple of points and did not want to take up hon. Members’ time by intervening. I would first like to congratulate my hon. Friend the Member for Harlow (Robert Halfon) on bringing this important matter to the House’s attention and ensuring that we have time to debate it. I also congratulate the Government on at least beginning to tackle it by starting the process of simplifying tariffs, rather than continuing with the confusing situation we had before. That is important, because Opposition Members failed to tackle the problem during their 13 years in government.
Many elderly people in my constituency are suffering from the cold. The problem is exacerbated by two issues: fairness, which is the point of this debate, and transparency. On fairness, as many Members have said, it is extremely unfair that those who have the ability or capability to pay by direct debit should be favoured in one way or another over those who may not have that ability or capability and pay by more traditional means by simply getting their bill, writing a cheque, and putting it in the post. As my hon. Friend the Member for Beckenham (Bob Stewart) said, someone who pays their bills on time in that way should be rewarded in the same way as any other person who pays their bills on time.
The point about transparency is more subtle. When people, particularly the elderly, look at their paperwork, the writing is almost microscopic when it comes to the detail of the terms of reference and, more importantly, the penalties. Moreover, the language used is extremely complicated, often involving jargon. It would be good if a working group, perhaps through the regulator or even internally in this House, could address the simple issue of trying to use simple language to communicate with consumers. Many consumers get baffled by the language used about the terms they are being told they must sign up to. If they understood the language, perhaps they would not suffer so many penalties.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for Harlow (Robert Halfon) on his crusading efforts on many issues in this House. He has talked about fuel costs in the past, and now he has turned to energy bills and tariffs. I commend him for his energetic investigation across the whole of the United Kingdom of Great Britain and Northern Ireland to ascertain the charges and costs that are involved.
This is a very pertinent issue. I am sure that many hon. Members’ constituents are facing the same difficulties as mine. In July, Northern Ireland’s biggest energy company, Power NI, increased its household electricity bills by 17.8%, which meant that the average household supplied by the company paid an extra £90 per year. There was a lot of disquiet across the whole of Northern Ireland about that increase. While it might be an inconvenience to many people, and to many others it might mean the sacrifice of a luxury to cover the difference, for some of the elderly in my constituency it will mean that they have to make the choice between a bit of heat or something to eat. This debate could have been entitled, “Heat or Eat?” For some of the people I represent, and some of those we all represent in this House, it is as specific and dire as that.
Bob Stewart
Why does the hon. Gentleman think that the charges in Northern Ireland, a part of the United Kingdom, seem to go up proportionately more than in the rest of the United Kingdom?
Jim Shannon
I wish I had the answer to that question, but I do not. My hon. Friend the Member for East Antrim (Sammy Wilson) and the hon. Member for South Down (Ms Ritchie) both said how much more expensive the charges are in Northern Ireland than anywhere else in the United Kingdom. As my hon. Friend outlined, the Utility Regulator in Northern Ireland does not seem to have the teeth that are needed to ensure that companies reduce their prices. We need to address these issues. I thank the hon. Gentleman for his intervention, but unfortunately I do not have the answer that we would very much wish to have.
Jim Shannon
I thank my hon. Friend for that helpful intervention, which clearly highlights the issue that we are all trying to bring to the Minister’s attention.
I want to speak particularly for the elderly people in my constituency and across the whole of the United Kingdom. At the Belfast pensioners parliament, Age Sector Platform gave a horrifying statistic: the number of winter excess deaths in Northern Ireland in 2012 was 486. Almost 500 people died because of their exposure to the winter weather. All of them were aged over 65, so we clearly need to address that age category. It is clear that older people are being hit hardest by the rising cost of energy and their reduced incomes. The energy providers must ensure that the elderly are on the cheapest tariffs possible. That is not happening. Even when they are told of the advantages, the language is so complicated they cannot understand it. We would do well to be able to understand it ourselves.
A good starting point would be to remove the charge for those who do not pay by direct debit. The simple fact is that many elderly people prefer to pay by cash or cheque, not by direct debit. Although it is simple for you, Madam Deputy Speaker, and sometimes even for me, to use online banking, it is clear that it is not as simple for elderly people, who should not be penalised to the tune of £114 a year just because they like to collect their pension from the post office. I underline the point made by the hon. Member for Harlow about the social contact that elderly people enjoy in the post office when they pay their bills by cash, rather than by direct debit. Many do not have regular visitors, so that social contact means much to them and its importance cannot be underlined enough.
I am a former business owner and I much preferred it when customers paid cash, for no other reason than that it meant I would get my money! Indeed, at times I would offer a small discount—or even a big one—as an incentive for that payment method. Now another option applies and the people who are hit hardest are those least able to afford it.
Northern Ireland—this point has not been made yet—does not have access to all of the alternative sources of energy. My hon. Friend the Member for South Antrim (Dr McCrea) and I have discussed the fact that parts of Northern Ireland and my constituency do not have access to gas. I wish they did. Many of my constituents on the Ards peninsula and in Ballygowan, Saintfield and Ballynahinch would love gas to be introduced to the area, and perhaps that will happen one day.
Our food bank in Newtownards is also involved in running the Christians Against Poverty scheme to help people who have debts to get on top of their issues and live on a budget. More and more people are deciding to get help to control their finances.
Mr Gregory Campbell (East Londonderry) (DUP)
Does my hon. Friend agree that Christians Against Poverty has had to involve itself with more and more people, particularly elderly and vulnerable people, in Northern Ireland and across the UK precisely because of the impersonal way in which many of the power companies deal with those who get into financial difficulties?
Jim Shannon
I thank my hon. Friend for that intervention. How true that is in my constituency and others across the whole of the United Kingdom.
Two months ago a new Christians Against Poverty scheme was set up in Ballynahinch in my constituency and there was great demand for it as a result of the impersonal attitude of some Departments and the complexity of financial matters. People have come together with Christians Against Poverty on the back of the food banks. I am one of the many Members who welcome food banks. I see them as a plus point for many parts of the community. They bring people together who energise themselves to help others who are less well-off, which is a trait we have not seen too much of in society in the past. It is good to see it.
Time is flying by, so I will move on quickly. Even a 5% reduction to a household budget will make a big difference, and that is why I welcome food banks and the good work of Christians Against Poverty. People are struggling, but the industry is not, and although I am firmly in favour of the free market, I am most certainly not in favour of profiteering, which is what seems to be happening.
I was horrified to read that the profits of the big six energy companies have shot up by 74% since 2009, dwarfing the 13% rise in inflation. British Gas, E.ON, EDF, npower, Scottish Power and SSE have enjoyed a £3.3 billion surge in profits, while households have been hit by a 29% rise in bills. My goodness, how obscene it is that on one side they are raking it in, and on the other side they are losing out. The word “perverse” was used earlier, and I could not describe it better.
For many people whose pay has been frozen and for many of those in small businesses whose hours have been cut to allow the owner to stay open, such a situation is a gross injustice. A profit must be made—let me make it quite clear that we are not against profit—but there comes a stage at which we must ask whether enough is enough. Profits from the groups that provide energy to 98% of homes rose from £2.15 billion in 2009 to £2.22 billion in 2010, £3.87 billion in 2011 and £3.74 billion in 2012, while the typical domestic dual fuel bill now stands at £1,420 a year compared with £1,100 in May 2010, according to the regulator, Ofgem. Surely it is time that the energy companies did the right thing by the most vulnerable—the elderly—and used some of their profit margins to provide affordable heating or, at the very least, not to penalise those people who use cash and cheques and do not feel comfortable paying by direct debit. The companies are clearly getting paid, and that, not the method of payment, is what is important.
As other hon. Members have done, I am putting forward a case on behalf of my constituents that enough is enough and that something must change soon. The question whether to heat or to eat is not one that anyone in the United Kingdom of Great Britain and Northern Ireland should have to ask or answer. Although we will do all in our power to help, the many businesses that are seen to be taking advantage must take their place, do their part and help our elderly people.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Strangford (Jim Shannon), who made a very powerful speech. I join other hon. Members in congratulating the hon. Member for Harlow (Robert Halfon) and his colleagues on tabling the motion. It has support from all parts of the House, and I am alarmed not to see my name on it. I must have missed the motion for some reason, but I certainly support it fully. I hope that my speech will make up for my name not being on the list of its supporters on the Order Paper.
The issue of people who do not pay by direct debit sometimes having to pay substantially more is one example of how low energy users—mostly people who are poor and vulnerable, but not always, because people sometimes choose a lifestyle involving low energy use or are fortunate enough not to use a lot of energy—by and large end up paying more than high energy users. That starts from tariffs: we all know that, with some exceptions, tariffs for people who consume more energy are cheaper, while those who use less have higher ones.
The extra cost for those not paying by direct debit is such an example, and hon. Members have spoken at length about the issues that that raises. Like them, I certainly find it hard to believe that in the vast majority of cases the extra charge levelled on those not paying by direct debit accurately reflects the extra costs to the companies. I rather doubt that it does, but there might be a case if the direct debit discount was a fair reflection of the extra cost that would otherwise fall on companies from people not paying by direct debit. However, the amount and variety of charges indicate that they are certainly more than can in any sense be justified.
As hon. Members have mentioned, it is wonderful for suppliers to get people on to direct debits because, as we all know, the likelihood that they will move or even think about switching is much less than that of those who are forced into thinking about how much they pay every quarter.
Colleagues have commented on prepayment meters. The hon. Member for Redcar (Ian Swales), who is not in his place, pointed out that we are not talking about the past situation in which, given the way cash was kept and all the rest of it, prepayment meters involved a major operation. It is now in no sense justifiable for prepayment meter customers to have to pay so much more than other customers, as we all know they do.
I want to mention the higher standing charges that have come about as a result of the Government’s policies on simplifying tariffs. The hon. Member for Braintree (Mr Newmark), who is not in his place, said that the Government have started the process of addressing the issue by simplifying tariffs, but the fact is that Ofgem’s recommendation that companies should effectively have higher standing charges is a result of its attempt to put into practice the Prime Minister’s hastily thought-out policies. In the vast majority of cases, the standing charge is higher than it used to be and the price per unit of energy is lower. I am sure that all Members have had cases of customers who are on low incomes and are low energy users experiencing massive increases in their energy bills. Ofgem says that companies can offer zero standing charges if they want to, but not many have done so. There is clearly something very wrong with the way that the market is operating and in how the market changes have operated.
This issue does not affect just people on low incomes. I saw one example of somebody who spent quite a bit of money on introducing renewable energy and energy efficiency measures. They reduced their energy usage drastically, only to find that their energy bill went up by almost 600% because such a heavy standing charge was levied on a daily basis. That is another example of how those who are low energy users for various reasons suffer because of the way in which the system operates.
Many of the issues that Members have raised today are not new. The hon. Member for Harlow has performed a valuable service to the House by highlighting the surcharge for non-direct debit payers. However, many of the issues that have been raised today have been brought to the attention of the Government and the regulators time and again. I have raised the issue of standing charges for months. There has been some movement, but not a great deal.
In the past few weeks, the Government have seen motions passed in Back-Bench business debates, but have then ignored them. Given that today’s motion has support from across the House, I hope that the Government will give a positive indication of the action that they will take on the issues that have been raised. Over the past few winter months, some of the lowest earners and some of the most vulnerable people in our country have yet again suffered because of the bias against them in the energy pricing system. We want to see action for those people and, at the very least, we want to see action before next winter.
Julie Elliott (Sunderland Central) (Lab)
I congratulate the hon. Member for Harlow (Robert Halfon) and others on securing this important debate. I thank the hon. Member for Chatham and Aylesford (Tracey Crouch) for offering to move the motion and my hon. Friend the Member for Ynys Môn (Albert Owen) for starting the debate in rather unusual circumstances. I also thank the Backbench Business Committee for allowing us to discuss these issues.
Ever since my right hon. Friends the Members for Doncaster North (Edward Miliband) and for Don Valley (Caroline Flint) made their announcements on energy at the Labour party conference last year, the way in which the market works or, more accurately, does not work has rightly come under greater scrutiny. Today’s debate is another symptom of that.
This debate has highlighted one of the essential facts about the energy market: we have not one energy market, but two, with companies targeting the lowest prices at a small section of the market, while charging everyone else whatever they think they can get away with. That is evident when one looks at the difference in prices between customers who pay by direct debit and those who pay by other means. It is also evident when one compares the prices that are paid by loyal customers, by which I mean customers who have never switched, which is the majority of people, with the prices paid by those who have switched. Tariffs should be cost-reflective: any difference for a different type of customer, payment or account—for example, dual fuel versus single fuel—must reflect only the costs that are associated with serving those customers and must be justified by the savings that suppliers enjoy.
Ofgem is responsible for ensuring that that happens. Following its energy supply probe in 2008, it introduced new rules that were designed specifically to prevent such anti-competitive behaviour. There will of course be marginal differences in costs between different payment methods and it is reasonable that there should be a small discount for customers who use cheaper payment methods, such as direct debit. However, what we are seeing is not a small difference but, in some cases, discounts of as much as £100—far and away above what could be reasonably justified. Ofgem has the power to act, but it does not. The Government should be intervening, but they are not.
The discounts for those on direct debit are not free. They must be paid for by someone. They are therefore being subsidised by those not paying by direct debit. In effect, energy companies are overcharging loyal and, in some cases, vulnerable customers, such as those who do not have access to bank accounts, to pay for deep discounts for the active segment of the market.
Julie Elliott
No, I do not have much time now.
The rules on tariffs being cost-reflective are clear, and Ofgem has the power to intervene and stop loyal customers being ripped off, so why has it taken no action, and why have the Government failed to act? My right hon. Friend the Member for Don Valley has repeatedly raised the question of Ofgem’s inaction, yet the Secretary of State has strongly disagreed with her when she has said that Ofgem is not using its powers. Will the Minister of State, the right hon. Member for Bexhill and Battle (Gregory Barker), enlighten the House on whether he is one of the Ministers cited in The Independent last week who have told Ofgem that it is in the last chance saloon and must take immediate action to improve competition? Given that the Secretary of State referred to our plans to replace Ofgem with a regulator that actually stands up for the consumer as “silly”, perhaps it was the Minister of State.
I say gently to the hon. Member for Harlow, who presented his case with conviction today, that capping the level of discount available to customers who pay by direct debit is probably not the answer on its own. In all likelihood, companies would just reduce the discount, and customers paying by standard credit or prepayment meter would carry on paying exactly as much as they are now. In fact, he alluded to that point when he called for fundamental reform, which is what we propose.
The practice of overcharging people who do not pay by direct debit, in order to target the lowest prices at the most active end of the market, is part of a broader problem in the energy market. In a vibrant and competitive market, suppliers would compete to give their customers the best deals and the best customer service would reward loyal customers. In our broken energy market, the big companies are overcharging and punishing their most loyal customers. That is why we need Labour’s plans to reform the energy market.
The plans that we have set out will reintroduce competition, restore transparency and create a tough new energy watchdog that will actually stand up for consumers. We will inject competition by separating energy generation from supply and requiring all energy companies to trade their energy in an open market by selling into a pool. We will reintroduce transparency by establishing a new, simpler tariff structure so that people can compare prices, just as they could before they were made artificially complicated.
As my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) clearly outlined, the Secretary of State may be intensely relaxed about Ofgem’s performance, but the Opposition are not. We will create a tough new regulator with new powers and new leadership, to stand up for consumers. It will have the power to force energy companies to cut their prices when there is evidence that reductions in wholesale costs have not been passed on to consumers, as would happen if the market were functioning in a properly competitive manner, and powers of collective redress.
Implementing those crucial reforms will take time, which is why, with immediate action upon entering office, we will freeze prices until January 2017, when our reforms will start kicking in. That will save the typical household £120 and the average business £1,800.
I am pleased that the Minister has come around to the fact that the energy market is broken. He said in an interview last week that he was unaware that three of the big six energy firms were not passing cuts on to fixed-price customers, and that that was unacceptable. He should pay closer attention to detail, because I raised the issue in the House just a few weeks ago, when he was in his place. I welcome his change of heart, but I do not understand how it could have taken him this long to come to that conclusion.
The Labour party has been clear: we will fix the market and put an end to secret deals and unfair pricing, our new regulator will stand up for consumers, and we will put all over-75s on the lowest tariff. Massive charges for non-direct-debit households are indicative of a broken market, and our reforms will ensure that all consumers get a fair deal under a Labour Government.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
This has been an excellent debate and there have been thoughtful speeches from Members across the House. I pay tribute to my hon. Friend the Member for Harlow (Robert Halfon) for bringing this matter before the House and for framing this very real question in his powerful introduction to the debate. I also pay tribute to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) who will speak after me. She has joined my hon. Friend the Member for Harlow to bring into close focus an issue that rightly warrants the scrutiny of Members across the House.
Let me be clear: the coalition Government are doing more than any Government before them to help hard-pressed consumers with the cost of energy bills, and we are fairly, squarely and rightly on the side of British consumers. My hon. Friend has raised legitimate questions about the way that consumers pay for energy by different methods, and the Government want to address that. We share the concern that my hon. Friend has put into sharp relief, but it is not a new issue. I am glad to use this debate to tell the House that Ofgem will be looking into the issue as part of the new competition test announced by the Prime Minister, to ensure that energy companies are living up to their obligations and licence requirements, and that the interests of the British consumer are at the heart of the modern energy market.
Dr McCrea
During the Minister’s remarks, can we get away from having those on the Front Benches make a political broadcast, and deal with the cross-party motion before the House? Will the Minister tell the House—I certainly did not hear this from the Opposition Front Bench—what is happening to the concerns that we as elected representatives have on behalf of our constituents, and which are summarised in the motion?
Gregory Barker
I certainly intend to do that, but I think the hon. Gentleman is being a little unfair. I have already mentioned the most important point of the speech, which is that we have asked Ofgem to consider the matter raised by my hon. Friends the Members for Harlow and for Chatham and Aylesford, and Members across the House, as part of the new competition test that was brought forward by the Prime Minister towards the end of last year. That will have real teeth and will report within a matter of months, if not weeks. We expect that in the near future, and Ofgem will be tasked to do it.
Mr Robin Walker (Worcester) (Con)
I am grateful to my hon. Friend the Member for Harlow (Robert Halfon) for securing this debate. I agree with the Minister that it is welcome that Ofgem will look into this matter and at competition, but Government policy is clearly to encourage switching. Will he address the point raised by the hon. Member for Liverpool, West Derby (Stephen Twigg) about energy companies charging people who want to move from a prepayment meter to a more ordinary tariff, and the outrageous variation in costs that can involve? One of my constituents was quoted between zero and £200 to have a prepayment meter removed. Does that not show that the system is not functioning properly as a competitive market, which is something Ofgem ought to investigate?
Gregory Barker
My hon. Friend is right and it is to his credit that he raises an issue that invariably afflicts the poorest and most vulnerable customers. In most cases, however, those on a prepayment meter can switch to a supplier that will not charge them for coming off it. Even if they are on a prepayment meter, they can still switch supplier.
It is important that we do not become carried away with the idea that the only response to getting a better deal for consumers is for Government to intervene with a one-size-fits-all solution. We saw what the result of over-regulation was under 13 years of Labour. Ham-fisted over-regulation does not actually benefit the consumer—it created the big six. We saw real choice for the consumer collapse under the previous Government through ham-fisted inappropriate regulation. The real interests of consumers will be served by a renaissance in competition. Relighting the fires of competition under this market will create real competition between energy companies.
I am glad to tell the House that since the coalition came to power we have seen movement back the other way, correcting the downward slide towards an oligopoly that we saw under the previous Labour Government. We are seeing new entrants to the market and unprecedented switching. In the last two months of 2013, an unprecedented number of customers switched their suppliers, hitting the companies that penalise customers where it hurts. People voted with their wallets and moved to get a better deal. This Government stand for empowered consumers—not just a lucky few, but everyone. We do not want a return to a nationalised industry; we want fair regulation for a fair energy sector.
Caroline Flint (Don Valley) (Lab)
There were plenty of examples in the debate that made it clear that regulations are not being followed on prepayment meters, and that Ofgem is not even using the powers it has. Rather than kicking everything off to the competition review, the Minister should ask Ofgem why on earth it is not enforcing the powers it has. It should stop letting this happen.
Gregory Barker
The right hon. Lady suggests that the competition test, which is new, will be a distant solution and that action is needed in the meantime. The competition test is alive now and we expect the first results shortly. This is not something we are kicking into the long grass; this is live. She raises a legitimate point on prepayment meters, as other Members have from across the House. Do not misconstrue me: this is a serious point and she is right to raise it. The Government take it very seriously.
We also take seriously the crux of today’s debate: are customers who elect to pay by cash or cheque, by standard payment through the post or at the post office, being unfairly penalised for doing so? That is not the same as saying that everybody should pay the same. I am afraid that there may be a genuine difference of opinion on that point. It is not our view that all customers should pay the same. There should be healthy competition, but—and it is a very important but—the differential between paying by direct debit and paying by cash or cheque should be cost-reflective and cost-reflective only. That is a key element of the licence condition under which energy suppliers operate. It is vital that Ofgem looks at that forensically and in detail, and answers to Ministers who have asked whether that is really happening.
Gregory Barker
In just a moment. I want to make some progress and I have to give my hon. Friend the Member for Chatham and Aylesford time to wrap up.
My hon. Friend the Member for Harlow drilled to the centre of the issue when he raised the fact that Spark Energy is charging a premium of £300-plus. That is staggering. Scottish Power, one of the big six created by the Labour party, is offering a premium—or a discount, depending on which way we look at it—of £99. The right hon. Member for Don Valley (Caroline Flint) asked why we were not doing anything. We are doing something: there is already a specific ongoing investigation into Scottish Power. This is not just about Scottish Power, however: for npower, that figure is £95. As part of the competition test, we have asked Ofgem to look at all the energy suppliers to ensure genuine cost reflection. We want to know why these costs are so much more than those charged by other utilities providers, such as water and telephone companies.
Robert Halfon
My right hon. Friend is right about the costs, but do we not need to look at the criteria by which they are measured?
Gregory Barker
Absolutely, and of course we look at the criteria. I have listened carefully today and in our discussions with my hon. Friend about the criteria, and we are asking Ofgem not to make a cursory comparison, but to establish forensically whether these charges are genuinely cost-reflective.
Julie Elliott
Ofgem’s investigation into Scottish Power has been going on since March 2011. Why does the Minister have faith that Ofgem is looking into this properly and will come up with a real answer?
Gregory Barker
Ofgem will be reporting in the near future as part of the competition test. It has the necessary powers, and we have made it clear that we expect a forensic analysis of the cost differentials and criteria.
This is not a new phenomenon, however. The Labour party had 13 years to crack it, but it took no action. Moreover, the Leader of the Opposition spent two years as Secretary of State for Energy and Climate Change, so the question is not “Why has it taken since 2011?”, but “Why did Labour do nothing, between 1997 and 2010, when it had the time, the power, the majority and the authority?” What did Labour do? Zero, zip, nothing. So before they ask, in high dudgeon, why we are not acting faster, would they please explain why they did nothing to help consumers for 13 years? When we get a credible answer, we will give their criticisms more credit.
I do not want to go off on a completely partisan rant, however, because some good questions have been raised, and I do not want to diminish their seriousness. We take the issue of prepayment meters and standard payments seriously, but we are also looking at direct debits. Some 55% of people pay by direct debit and 45% pay by standard payment.
Albert Owen
Did I understand the Minister correctly? On cost reflection, he said that Ofgem still had the power to intervene over the licence. I understood that in 2012 it gave up that power and introduced the retail market review. Is he now saying that Ofgem can still exercise that power? If so, why does he not tell it to do so? Then this debate would be null and void.
Gregory Barker
We have done it already. The hon. Gentleman was not listening. We have spoken to Ofgem, and it has confirmed publicly what we have discussed privately—that this will form a key part of the competition assessment. That is a new development, and a sign that the Government take this seriously and are on the side of consumers. We will not wait 13 years to do something about it.
We are not just acting for people on prepayment meters or trying to get a better deal for people who pay by a standard payment method; we are taking action to get a better deal for people on direct debits as well, because they do not always get a fantastic deal. We know that many people do not realise they are inadvertently building up stores of credit with the energy companies, as has been highlighted by Members on both sides of the House, including the hon. Member for Sunderland Central (Julie Elliott), I believe. We will soon be announcing proposals that will give consumers a much better deal. That is just one of the measures we are taking to get a better deal for British consumers, particularly the most vulnerable, and comes on top of the £135 warm home discount, guaranteed winter fuel payments for pensioners and energy efficiency support for the most vulnerable through the ECO.
This has been a good debate. I am pleased that we were able to benefit from expertise from across the House and that the concerns shared across the House on this issue were properly aired. I pay tribute to my hon. Friends the Members for Harlow and for Chatham and Aylesford for bringing it to the Floor of the House and allowing us to demonstrate that this coalition is taking action for British consumers.
Tracey Crouch (Chatham and Aylesford) (Con)
When my hon. Friend the Member for Harlow (Robert Halfon) asked me if I would wind up this debate, I thought it would be a great privilege. Now as I stand here, with my intelligent and beautiful Whip—my hon. Friend the Member for Guildford (Anne Milton)—sitting on the Front Bench with her pen poised, I am beginning to wonder whether this will determine whether I shall be a Minister in the future. The Minister was kind enough to offer me some advice, which was: “You’ll do a good job, but please try not to do a great job.” I shall therefore do my best to satisfy both the Whip and the Minister, but also to reflect the important aspects raised in this afternoon’s debate.
I thank the Backbench Business Committee for allowing this important debate and congratulate my hon. Friend the Member for Harlow on securing it. He is a tireless campaigner who always puts his case so expertly, as he has today. His speech was very clear in setting out the scale of the problem. He recognised that the Government have done much on the need to protect consumers, especially when experiencing additional charges. He outlined the case incredibly well, as did many others.
It is important to note that until the shadow Minister’s speech and the Minister’s speech, there was a great deal of consensus across the House on helping the most vulnerable consumers. The motion focuses on the 17 energy companies that are subjecting customers who do not want to pay by direct debits to charges. It is a great honour that 179 colleagues signed the motion, which shows how important this issue is to us in representing our constituents.
Those who spoke did so with passion. The hon. Member for Ynys Môn (Albert Owen) did a great job of standing in at the start. He spoke on energy prices in general and praised the work of the Select Committee on Energy and Climate Change. Like him, I was reluctant to switch to direct debit initially, preferring, like millions of other people across the country, to have control over when I pay my bills, based on the energy I use. That was reflected in many contributions this afternoon.
The hon. Member for Makerfield (Yvonne Fovargue) is a consumer champion on many issues. Her emphasis today on prepayment meters demonstrated characteristic concern for our poorest in society. I listened carefully to what she had to say. The hon. Member for Redcar (Ian Swales) spoke of one of his constituents and raised similar concerns about prepayment meters. The Minister heard those concerns loud and clear, as I am sure did those listening to the debate. I hope that the energy companies also took on board some of the issues that were raised.
The hon. Member for Mitcham and Morden (Siobhain McDonagh) used constituency casework as the basis of her contribution to today’s debate. I was fascinated by the excellent project she highlighted, an advice day surgery involving the big six. With her permission, I might steal it for my constituency, which has areas of deprivation and where we see concerns among particular pockets of energy consumers about paying their bills. I will be in touch with her office to find out precisely how she did that.
The hon. Member for South Down (Ms Ritchie) said that the charges should be seen in a wider economic context. She also said that many people felt that they were being penalised for not paying by direct debit, a view that was reflected throughout the debate. I agree with the hon. Member for Angus (Mr Weir) that this is as much about social exclusion as it is about unfair charges for those who cannot pay for utilities by direct debit because, for example, they do not have bank accounts. He made that case extremely well.
As a fellow south-east Member, I agree with what was said by my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) about rural broadband. However, I think it important to note that those who pay online are not immune to stealth charges. The problem does not just affect those who post cheques or take them to the post office.
The hon. Member for East Antrim (Sammy Wilson) made an incredibly important contribution on behalf of his constituents. He pointed out that 38% of people in Northern Ireland pay bills by direct debit, as against 55% in the United Kingdom overall. I thought that that was a very interesting statistic, and I hope that work will be done to establish the reason for it.
My hon. Friend the Member for Braintree (Mr Newmark) spoke of the need for fairness and transparency for our constituents, especially, but not exclusively, the elderly. He said that those who paid bills on time should not be penalised. He also made the very fair point that Labour Members, who had been very critical of some of the Government’s measures, had had 13 years in which to sort the problem out, and had not done so.
The hon. Member for Strangford (Jim Shannon) praised the good work of Christians Against Poverty, and spoke of the importance of social contact to those who pay their bills at the post office. As a Member of Parliament who highlights the problem of isolation, particularly among the elderly, he was absolutely right to raise that issue.
The hon. Member for Edinburgh North and Leith (Mark Lazarowicz) certainly made amends for not signing the motion by speaking so knowledgeably about the issue. That was hardly surprising, given his long-term advocacy of consumer protection. He did a good job in, as it were, providing the 180th signature.
I have a great deal of time and respect for the hon. Member for Sunderland Central (Julie Elliott), whom I call a friend outside the Chamber, but I have to say that, given the tone of the debate, I was rather disappointed by her response. Opposition Members should remember that the ripping off of consumers by energy companies did not begin in May 2010, and that the Labour party had 13 years in which to stand up for vulnerable consumers and did not do so. The Minister made that point as well, but I was very sad that the debate ended on a party political note.
I was thrilled to become involved in the campaign initiated by my hon. Friend the Member for Harlow. Like many others, I did so because I was contacted by a constituent. Mr Steele, who lives in Lordswood, contacted me because he wanted to pay a number of utility bills online, but felt that he was being penalised for doing so. He said that British Gas had had the cheek to remind him that he would have been £67 better off if he had paid his gas bill by direct debit, and £33 better off if he had paid his electricity bill by that method.
It has been made very clear that Members want more transparency for their constituents when it comes to energy charges. We know that the charges are high and that they are often hard to justify in view of price increases and the large profits made by the industry, but it is unacceptable that customers are being penalised for choosing to manage their payments in a way that is convenient for them. The motion notes that 45% of people do not pay their energy bills by direct debit, and are being charged for not doing so. I hope that the energy companies will note what has been said here today, and will rectify the position immediately.
Question put and agreed to.
Resolved,
That this House is disappointed that 17 energy companies in the UK charge their customers more if they do not pay their bills by direct debit; acknowledges that some firms do not charge their customers any extra at all; notes that Department of Energy and Climate Change statistics show that this adds £114 to the average consumer’s bill; further notes that 45 per cent of people do not pay their energy bills by direct debit; recognises that over one million people in the UK do not have access to a bank account; believes that these charges are a stealth tax on the poor; and therefore urges Ofgem to hold an inquiry into these practices, encourages energy companies to operate with more transparency, and urges the Government to consider ways of limiting these charges, such as by introducing a cap.
Planned Closure of the Portland Coastguard Helicopter Base
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text
Richard Drax (South Dorset) (Con)
Picking up on the campaign zeal I have experienced in the past 20 minutes in the Chamber, may I say our fight to retain the Portland search and rescue helicopter continues? The petitioners have raised 105,000 or more signatures and I want to pay special tribute to the team that in the main went out in wind or rain: Belinda Craig, Patricia Joy, Debra Joy and Shelley Cutler. I also want to thank Roger McPherson, who has played a large part in co-ordinating that, Councillor Sandy West, a Labour councillor on the island of Portland, who has been very supportive and Dr Ian Mew, a consultant at Dorchester county hospital, who has provided advice and help.
The petition states:
The Petitioners therefore request that the House of Commons urges the Department for Transport to reverse the decision to close Portland coastguard helicopter base.
Following is the full text of the petition:
[ The Petition of residents of South Dorset,
Declares that the Government plans to close Portland coastguard helicopter base, despite protests from local people, MPs and hospital consultants; and further that the Petitioners believe that there may be lives lost as a result of losing this search and rescue facility.
The Petitioners therefore request that the House of Commons urges the Department for Transport to reverse the decision to close Portland coastguard helicopter base.
And the Petitioners remain, etc.]
[P001317]
Deaths in Custody (Legal Aid)
(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am very sorry to have to rise in my place tonight to bring this debate to the Floor of the House of Commons. For nearly three years I have worked to avoid this debate, and I come here tonight because I have been left with no other choice.
Let me say at the outset that there is no more determined campaigner for the police of my city than me. For 10 years as a Member of this House I have campaigned for bigger, stronger police teams. I have run half-marathons and triathlons to raise money for the West Midlands Police Benevolent Fund, and it has been my privilege on the Floor of the House to praise the bravery of officers such as PC Adam Koch and his colleague who literally risked their lives to save worshippers recently at a Ward End mosque. I am motivated tonight by their courage, because I believe our police are so important to our communities that they deserve to have the best team around them, but I am motivated too by an injustice that I want to bring to the attention of the Government.
Because the police service is a human and not a divine organisation, sometimes there are shortcomings, but if we want the best police service, it is important that we do not stand by when there are shortcomings; it is important that we act. For three years now I have been seeking to help a constituent of mine to act. My constituent’s case is sub judice, but I can give the House the essence. My constituent’s son, a boy she loved, died in police custody—a tragedy the pain of which I, as a father of three children, cannot possibly imagine—but this tragedy is deeper and darker for the alleged culpability of police officers who were paid by us on that night to keep my constituent’s son safe.
Fiona Mactaggart (Slough) (Lab)
I am very glad my right hon. Friend has brought before the House this issue of people who die in custody. I have informed the Minister of the case of my constituent Philmore Mills. His case is very unusual. He was in hospital in a lung ward, and on 11 December 2011 the staff were made anxious by his behaviour. They called the police and the police restrained him, and he died under police restraint. The inquest into that death is due on 1 April—two and a half years later—yet his family still do not know if they are going to have legal aid for representation at that inquest and they are thus made more anxious still. Their dad was in hospital with a breathing problem, yet he died at the hands of the police. They should be legally represented without having to pay.
Mr Speaker
Order. May I remind Members that they should be very careful about reference to live cases because of the sub judice rule?
Mr Byrne
Thank you, Mr Speaker; I am also grateful to my hon. Friend the Member for Slough (Fiona Mactaggart) for her intervention.
In the months that followed the death of my constituent’s son, the family and I sought, together with the Independent Police Complaints Commission, to ensure that the police officers involved were judged. I am sorry to say that they were judged to have been so negligent, and to have fallen so far short of their sworn duty, that they were found guilty of gross misconduct.
Now, the family are approaching the last trial of their strength: the inquest. It will be their final opportunity to find the truth of why and how their son died. Yes, it might bring grief, but I hope that it will also bring closure. The inquest is also important for our community, because it could provide critical insights that would help us to ensure that others need never suffer the same fate.
Despite my representations and the arguments that we have put forward, the family have been told that they must pay to have questions put on their behalf during the proceedings. Like me, they are outraged. The original bill was going to be nearly £7,500. It is true that their costs have now been reduced, but our system has become perverse. The fact that the family are having to provide a smaller cut of their savings cannot be judged a great success.
Keith Vaz (Leicester East) (Lab)
I thought that my right hon. Friend would like to know that the Home Affairs Select Committee will be opening an inquiry into the issues of deaths in police custody, and policing and mental health, later this year. It will also look into legal aid provision for the families involved.
Mr Byrne
That is very welcome, and I hope that my right hon. Friend and his Committee will be able to draw the right conclusions and, perhaps, use some of the evidence from the case that I am raising here tonight.
My point is very simple: when a family have lost their son while he was in the custody of the state, and when servants of the Crown have been judged guilty of gross misconduct, it is a gross injustice to tell that family that they must now help to pay their costs at the inquest into how their son lost his life.
I know the objections to my arguments. There are few in the House who know the pressures on the legal aid budget as well as I do. As Chief Secretary to the Treasury, I too had to negotiate reductions to that fund. However, if we cannot fund an inquest into a death of which the state appears to be culpable, we have got it wrong. Our article 2 obligations demand a thorough investigation of state action and culpability in cases such as these. Like me, the Minister knows that, following the case of Main in 2007, a wider public interest test must be satisfied if legal aid is to be awarded. A death in state custody, especially when Crown servants have been found negligent, must surely satisfy that test. We in this House agreed to that principle when we passed the Coroners and Justice Act 2009. Section 51 of that Act extended the principle of public funding for advocacy at inquests such as these.
As a parliamentarian, I want to know what happened on that night. That is the wider public interest test that is being satisfied here. I want to know whether we need changes to the law, or to the organisation of the police service. I want to know that, so that I can help to bring those changes forward. I do not want this House, this Government, or this Minister to be kept in the dark. I do not want the comfort of ignorance. I want to know why my constituent’s son died, and I want to know what we must do together in this House to ensure that none of our constituents ever has to face the same fate.
Tessa Munt (Wells) (LD)
I have had a similar case in my constituency. The inquest has now taken place, Mr Speaker. James was in his 20s, and he was mentally ill. He was restrained and, unfortunately, died in police custody. When the police force in question has access to unlimited legal advice and expertise at no quantifiable cost, is it not an outrage that the parents, who are so vulnerable at a time like that, should be asked to seek advice from a local solicitor who is not an expert in mental health or deaths in custody?
Mr Byrne
Let me deal with a point directly. The family did not choose to be in this position; the Coroners Act 1988 demands an inquest. We in this House are the people who insist on the position my constituents are now in, and we do so for a very good reason: we want to know what happened. Our predecessors in this Parliament felt so strongly about the unchecked actions of an arbitrary state that they deposed the monarch and fought a war to insist on the liberty of the individual and a measure of their protection—we want to know what happened.
Jim Shannon (Strangford) (DUP)
There were 5,998 deaths in police custody in the 11 years from 1 January 2000 to 31 December 2010. Does the right hon. Gentleman agree that there must be a method for families to access support in suspicious cases and that legal aid is an important part of that support for grieving families?
Mr Byrne
The hon. Gentleman is absolutely right. Some will say, “We should not get too worked up about this. The inquest process is inquisitorial not adversarial. It is just a gentle canter around the facts.” But when we are dealing with death in custody, it is different. How can we tell? It is because the public servants represented at the inquests will not just have one lawyer; they will have teams of lawyers, paid for by the taxpayer, on their side. We have to ask ourselves: how can we allow such a profound inequality of arms in the inquest room? How can we pretend to ourselves that that is even remotely equal, fair or right? There is now growing evidence, not just in my home city of Birmingham, but across the country, that wrongful legal aid decisions are being made in cases such as this. Many in this House will have seen the tragic case confronting Alex Kelly’s family, which was highlighted in The Observer on Sunday, and INQUEST, an organisation I wish to praise to high heaven, has brought to me a number of other cases where bad decisions are being made in our name.
In the short time remaining to me, I want to put five questions to the Minister. I appreciate that he will not be able to answer all of them tonight, so I hope that he will follow up in writing and that the House will be able to return to this subject, perhaps in the light of the report by my right hon. Friend the Member for Leicester East (Keith Vaz) later in the year. First, will the Minister meet me to discuss the legal aid decision in my constituent’s case? The case clearly meets the threshold of having “wider public interest'” set out in section 2.4 of the Legal Services Commission’s funding code criteria, which refers to the “potential” of the proceedings
“to produce real benefits for individuals other than the client”.
Secondly, when will the Lord Chancellor bring into effect section 51 of the Coroners and Justice Act 2009, which will extend advocacy support to those who died in custody? No stand part debate was held on that measure and, to the best of my knowledge, the Minister was not in the House to vote on the Bill on Third Reading. I do not believe the Conservative party or the Liberal Democrats opposed this legislation when it was brought to the House, so will the Government give us a date for bringing in section 51 as soon as possible?
Thirdly, will the Minister confirm that it is ministerial policy, and not simply administrative discretion, to seek a contribution from the family in inquests where a death in state custody has occurred? Fourthly, will the Minister tonight agree to a review of the way families are offered support and funding for inquest costs, not least because there is now evidence that the process is out of control, with the most invasive questions being asked of families in order for them to prove they do not have the resources to help contest these cases? Finally, will the Minister tell us how many families have been asked to make a contribution since 2010? What is the total bill that families in this country are now paying for cases such as this?
When I asked my constituent what she wanted from tonight’s debate, her answer was as generous as she is compassionate. “Hopefully,” she said, “we can change this for other people so that they will not have to suffer what we have suffered.” When all is said and done, the question at the heart of this debate is simple. It is the story of a mother’s loss, a mother’s love and a mother’s search for justice. Will we, in this House, stand on a mother’s side, or will we stand against her? When we begin work in this House each day, we pray for strength and wisdom to make the right decisions. I hope that we can now call on that strength and wisdom and make the right decisions in the case of my constituent and her lost son.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I congratulate the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) on securing this debate, which is on a subject that we can all agree is extremely important. On behalf of the Government, I extend my condolences to the Butler family. It is bad enough that somebody should die—it is difficult for any family member to put up with that—but the circumstances in which Mr Butler died makes it even harder to accept.
I trust that the right hon. Gentleman will accept that I cannot comment in specific details about any case. I hope that the hon. Member for Slough (Fiona Mactaggart) will appreciate that, too. I can, however, speak in general terms. I will try to address as many of the issues that the right hon. Gentleman has raised as I can, and if there is anything left over, I will certainly write to him.
I understand that this case deals with legal aid legislation, but I hope that the right hon. Gentleman will appreciate that the Access to Justice Act 1999 was introduced by a Labour Government. It is under that legislation that decisions about exceptional funding cases concerning deaths in police custody, or during the course of police arrest, search, pursuit or shooting, are dealt with solely by the director of legal aid casework at the Legal Aid Agency, which is the successor body of the Legal Services Commission. Ministers have no role in those individual decisions. However, I fully appreciate the clear frustration of the right hon. Gentleman, which he has made abundantly clear to us, and the even greater frustration of Mr Butler’s family. It appears that a long time elapsed between the initial application and the final decision on funding. I believe that, along the way, there was also an inquiry conducted by the Independent Police Complaints Commission.
Fiona Mactaggart
My constituent’s family have been told that there will not be a decision about eligibility for legal aid until the opening of the inquest on 1 April. The Minister seems to imply that there could be a decision before that date. Will he explain why the coroner from Berkshire has said that no decision will be made on whether there will be a Middleton inquiry until the inquest is open?
Mr Vara
The hon. Lady seeks to tempt me into territory into which I cannot go. What I will say is that as far as her constituent’s case is concerned, the process is still ongoing. As I understand it, a decision on legal aid has not been made, and dialogue is still going on. I trust she will accept that.
Although I cannot comment on the decision concerning Mr Butler’s family, I understand from the Legal Aid Agency that there was an issue concerning financial eligibility and whether it was appropriate for the family to pay a contribution, which is something that the right hon. Gentleman mentioned. I hope I can assist the House by explaining how the means test is applied to inquest cases. Legal aid for the representation of bereaved families at inquests is means-tested, like nearly every other element of the civil legal aid scheme. It is important that we focus our limited resources on those who need them the most, and the means test is an important and long-standing part of the legal aid system which has been in place since well before this Government came to power.
There is discretion to waive the financial eligibility limits for inquests if, in all the circumstances, it would not be reasonable to expect the family to bear the full costs of legal assistance at the inquest. Whether that is reasonable will depend in particular on the history of the case, the circumstances, the issues raised against state institutions, the applicant’s assessed disposable income and capital, the other financial resources of the family and the estimated costs of providing representation. Contributions from the applicant can also be waived in whole or part.
That is the position under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, but it was also the position under the Access to Justice Act 1999, the legislation that applied to Mr Butler’s case.
Mr Byrne
The Minister is replying in a courteous and thoughtful manner. He has given us a number of helpful words about the broad principles of the means-testing regime, but I hope he will not elide over the point that when we passed the 2009 Act we decided to include section 51, which accepted that there were wider public interests at play in inquests that delved into deaths in state custody and explicitly provided for full legal aid costs to be provided to families in such cases. The Lord Chancellor has not implemented section 51. The arguments about it have already been rehearsed and the House has passed it. When will it be implemented?
Mr Vara
Well, the previous Government made provision for it but they did not implement it. I do not know when it will be implemented, but I am happy to reflect on that matter and write to the right hon. Gentleman. Let me put on the record that the criteria under the Access to Justice Act still apply, as that was the Act that was applicable when Mr Butler’s case first arose.
Tessa Munt
I shall be brief. When the Minister is reviewing the situation, will he consider whether it is appropriate for applicants to be pressured—there is no other word to describe it—to seek local and non-specialist advice from solicitors and therefore barristers who have no knowledge about taking on something such as a police force, with all its expertise?
Mr Vara
I hope that the hon. Lady will appreciate that I cannot comment on pressures in the individual cases to which she is alluding or on specific cases.
Guidance issued by the Lord Chancellor under the 1999 Act says on contributions:
“Where it is appropriate for a contribution to be payable this may be based upon the applicant’s disposable income and disposable capital in the usual way ignoring upper eligibility limits. Contributions should always be based on what can reasonably be afforded by the applicant and his or her family in all the circumstances of the case.”
It is worth underlining that we do not have a red-line rule on financial eligibility for inquests in the same way as we do for most other categories of law for which civil legal aid is available. There are a large number of variables, as I have mentioned, that the Legal Aid Agency considers when deciding whether to exercise its discretion to waive the limits.
It is also worth making it clear that, contrary to certain reports, there has been no substantive change to legal aid provision for inquests as a result of the recent reforms to the system. On that issue, both the right hon. Gentleman’s party and mine are in agreement. Let me assure the House that legal aid for inquests has been protected by this Government.
Legal help—in other words, the advice and assistance level of legal aid—remains within the general scope of the scheme, subject to merits and means-testing. That can cover all the preparatory work associated with the inquest, which might include preparing written submissions to the coroner. Notwithstanding the pressure on the public finances, the Government made a clear commitment to bereaved families by ensuring that legal help was retained in inquest cases.
Legal aid for representation can also be provided exceptionally where certain criteria are met. Those criteria have remained largely unchanged from those that operated under the 1999 Act. Let me be clear that under the new statutory scheme all individual decisions on legal aid, including exceptional funding decisions, are taken by the director of legal aid casework at the Legal Aid Agency.
However, the Lord Chancellor has published guidance setting out the general circumstances in which he considers that exceptional funding may be required under section 10 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. The director of legal aid casework is not bound by that guidance, but he must have regard to it when reaching individual decisions, together with any representations made by applicants on the individual case or any new and relevant case law.
Under section 10 of LASPO, the director of legal aid casework can grant exceptional funding for representation at an inquest where it is required by article 2 of the European convention on human rights, to which the right hon. Gentleman referred. Article 2 confers a “right to life” and imposes on states a substantive obligation not to take life without justification and to establish a framework of laws, precautions and means of enforcement that will, to the greatest extent reasonably practicable, protect life. The other ground on which the director can grant funding for representation at an inquest is where representation for the family is likely to produce significant wider public benefits, meaning significant benefits for a class of person other than the members of the family involved.
On the coronial system, I know that concerns persist about the length of time some cases take to progress. The Coroners and Justice Act 2009 includes a number of provisions that will help to tackle delays in the coronial system, including a new power for the Chief Coroner to direct a coroner to conduct an investigation into a death. There is now greater flexibility on where post-mortem examinations and inquests can be held. They can now happen outside the coroner’s area.
The 2009 Act also requires coroners to notify the Chief Coroner of any investigation that has lasted more than 12 months. The Chief Coroner is then required to provide a summary of such cases in his annual report to the Lord Chancellor, which is laid before Parliament, together with reasons for the delays and any steps he is taking to prevent such delays from becoming unnecessarily lengthy.
While this debate has focused on legal aid, the coronial system and the police, there is, of course, a broader issue at stake. Let me be clear that the Government take deaths in custody extremely seriously. Deaths in custody are among the most scrutinised of all incidents. All deaths in custody are subject to a number of investigations, including, in the case of police custody, an independent investigation by the Independent Police Complaints Commission. Of course, an inquest is also held. Those investigations will usually involve the participation of the bereaved family.
I should like to acknowledge the ongoing work of the ministerial council on deaths in custody, which incorporates senior decision makers, experts and practitioners in the field. This allows for an extended, cross-sector approach to deaths in custody and is designed to ensure better learning and sharing of information. The council works to ensure that lessons learned in any area of state custody are disseminated across the police, prisons, approved premises, immigration, detention, and secure hospitals. The council commenced operation in 2009 and is jointly funded by the Ministry of Justice, the Department of Health and the Home Office. The House will want to know that funding has been extended until March 2015.
Let me again thank the right hon. Gentleman and all other hon. Members who have spoken. I hope that I have been able to offer some reassurance as to the position concerning legal aid, what the Government are doing to tackle delays in the coronial system, and the Government’s position on deaths in custody more generally. To the extent that there are matters outstanding, I am happy to write to the right hon. Gentleman and, indeed, to have a meeting with him as well, although, as I say, my ability to influence the Legal Aid Agency is somewhat limited.
Question put and agreed to.
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Westminster Hall
(10 years, 9 months ago)
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Gypsy and Traveller Policy
(10 years, 9 months ago)
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Andrew Selous (South West Bedfordshire) (Con)
It is a pleasure to serve under your chairmanship, Mrs Riordan —[Interruption.]
Mrs Linda Riordan (in the Chair)
Order. There is a problem with the sound recording equipment. Without a recording of the proceedings, no Official Report can be produced, so I am suspending the sitting until the problem has been resolved.
Andrew Selous
I ask all who speak in this important debate to do so in a calm and measured way as we discuss sensitive issues concerning our fellow citizens.
A separate planning system for Gypsies and Travellers has been developed in this country since part II of the Caravan Sites Act 1968 was enacted. That part was repealed by the Criminal Justice and Public Order Act 1994, but the Human Rights Act 1998 and section 225 of the Housing Act 2004 recreated a parallel planning system for Gypsies and Travellers. I have no doubt that that was done with the best of intentions, but it is no longer appropriate for the settled or Traveller communities. Many local councillors share that view.
We know from the 2011 census that 76%—more than three quarters—of Gypsies and Travellers live in houses, bungalows or flats, while only 24%—less than a quarter—live in caravans or mobile homes. Thus, the existing separate planning law for Gypsies and Travellers applies only to less than a quarter of their population in the United Kingdom. I cannot think of any other group in the UK, whether vulnerable or not, that we seek to ghettoise in such a way. We must look at whether such separation in the planning system has worked for the benefit of Gypsies and Travellers; I think that the evidence suggests that it has not.
At 47%, Gypsies and Travellers have the lowest level of work of any ethnicity. The comparable figure for the English and Welsh population is 63%. Of Gypsy and Traveller adults, 60% have no qualifications, whereas the corresponding figure for the rest of the nation is 23%. A compassionate case can be made for integrating Gypsies and Travellers into one assessment of housing need in every local authority. If it is necessary to provide places to park for travelling caravans and some fields for grazing horses belonging to Gypsies and Travellers to bring about one cohesive planning system for the whole population, I believe that that should be done.
When I look at Polish residents in my constituency, I note that they have an active social centre and, indeed, their own Polish Catholic church, both of which are close to my constituency office. We do not have a separate planning system for Poles, allowing them to live together with planning rights not available to the rest of the population, but they have managed to maintain their identity and cultural heritage by meeting together regularly.
I see no reason why there should be any loss of Gypsy or Traveller identity from what I am proposing. To achieve what I am proposing, I am calling on the Minister to introduce primary legislation in the forthcoming Queen’s Speech to amend section 225 of the Housing Act 2004, which requires a separate housing needs assessment for Travellers and Gypsies. I am also calling for the Human Rights Act 1998 to be similarly amended as well as, if necessary, those sections of the Equality Act 2010 that apply to Gypsies and Travellers.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Gentleman on securing this debate. I do not disagree with him about a single planning policy; we should not differentiate Travellers, or any other ethnic group. However, does he agree that it is important that, wherever it settles, the Traveller community should abide by the rules of the local community? We have had serious problems with the condition of sites in Northern Ireland. That issue must be dealt with as well.
Andrew Selous
I completely agree with the hon. Gentleman. We are all equal under, and have a duty to obey, the law.
The current twin-track, separated planning system—one for Gypsies and Travellers and one for settled residents—greatly threatens and undermines community cohesion and causes significant fear, distrust and upset to both Travellers and settled residents. If someone can demonstrate, or simply declare, that they are a Gypsy or Traveller, they acquire highly lucrative planning rights not available to the rest of the population. Such rights are granted to some individuals who are very wealthy, or become so as a result; they are not all vulnerable individuals. That opens up the system to massive abuse from some people seeking to gain such lucrative planning rights.
Many able-bodied Travellers do not in fact travel for a living. Often, settled residents travel more, on business, than some so-called Travellers.
Tim Loughton (East Worthing and Shoreham) (Con)
Is there not another point, which is certainly true in the case of Sussex police? If someone claims to be a Traveller, the police simply accept that as fact. No effort is undertaken to ascertain whether they really are of that ethnic identity.
Andrew Selous
My hon. Friend is absolutely right. The reality is that anyone can self-declare as a Traveller. I very much welcomed the written ministerial statement made by the Minister on 17 January in which he committed to looking at that issue.
I cannot believe that it is right that some schools, such as that in the village of Braybrooke in the constituency of my hon. Friend the Member for Kettering (Mr Hollobone), should be entirely occupied by Traveller children. I do not believe that that is in their own best interests, not least given Traveller children’s high rates of absence. For Irish-heritage Travellers, the 2008 national pupil database showed primary school absence rates of more than 24% and secondary school absence rates of more than 27%. I believe that if the children of Travellers were integrated across a greater number of schools, they would be more likely to conform to the higher attendance rates of the majority.
The current separate planning system for Gypsies and Travellers often takes no account of the proper provision of facilities in rural locations, specifically those for sewerage and sanitation. Harm is often caused to the local environment by hedgerows being illegally pulled out, pollution of the local water courses and farmland, and sometimes encroachment on others’ land.
Andrew George (St Ives) (LD)
The hon. Gentleman is making an interesting case. In view of the difficulties he is describing, does he accept that a lot of problems have been caused over the decades by a severe shortage of both permanent and transit Gypsy and Traveller sites around the country as a whole? If that shortage was addressed, we would not be having to deal with all the problems he has described.
Andrew Selous
I would welcome a proper analysis of how many transit sites we actually need. Many of my constituents have said to me that they in the settled community travel more, for business, than many Travellers. I am proposing a single, compassionate, overall housing needs assessment for everyone—everyone in this country needs housing. I would also point out that more than three quarters of Travellers already live in bricks and mortar houses, and that I would not take away their right to own caravans.
Many villages in my constituency, such as Billington, Stanbridge, Tilsworth, and Heath and Reach, feel very threatened by the large number of Travellers and Gypsies being sited in their communities to comply with current Government requirements. Specifically, the current requirement to accommodate a growth in the Gypsy and Traveller household net formation of 3% every year is causing massive problems. Although I would like to scrap the whole system, it is imperative that while it continues a more accurate figure is used, which I believe would be nearer 1.5%. I also believe that the Pat Niner review that called for a 3% figure was based on the arrival of large numbers of Travellers from Ireland after the Irish Government changed the law. The Irish Planning and Development Act 2000 made development without planning permission a criminal offence.
After that, in 2002, Irish law changed again to make trespass a criminal offence in certain circumstances, which I believe caused numerous Irish Travellers to come over to England and Wales, resulting in a spike in the numbers that led to the 3% figure that is causing problems at the moment.
The current law penalises authorities that have made significant Traveller provision, such as my own, Central Bedfordshire council, which had 197 pitches in November 2013. In addition, almost 60% of the total 247 pitches and plots listed in the Gypsy and Traveller local plan are within four miles of the village of Stanbridge, contradicting the Secretary of State’s statement on 25 November 2013 that Traveller sites should not dominate villages.
Large pitch numbers tend to produce large further needs assessments, leading to ever-increasing pitch requirements. The travellers on the unauthorised Mile Tree Farm site in my constituency are from Aylesbury, I believe, yet are counted against Central Bedfordshire’s needs assessment. That is wrong and unfair, as are the enormous legal costs that council tax payers must bear when local authorities challenge the unfair system.
Caroline Nokes (Romsey and Southampton North) (Con)
Does my hon. Friend agree that it is sometimes not only local councils but local communities that bear enormous legal costs? In one case in my constituency, an applicant at a planning appeal has sought costs against local residents, purely because they had the courage to stand up and speak about what they believed in for their community and their village.
Andrew Selous
I am grateful to my hon. Friend for putting that point on the record. She highlights the fact that there are many legal disputes. They do not promote community cohesion and are expensive for all concerned, whether individuals or, as often happens, council tax payers through local authorities.
Paragraph 15 of the March 2012 planning policy for Traveller sites seems to blunt the impact of the Minister’s written ministerial statement of 17 January on the green belt; that is another reason why I believe that nothing less than primary legislation will do. I do not believe the current situation is tenable, because central Government are forcing local authorities to take many extremely unpalatable decisions that are causing a great deal of anxiety and anger in rural and urban communities. As I said, that does not aid community cohesion. I believe strongly that we are all equal under the law. That is an important principle, but many of my constituents in the settled community do not believe that equality under the law exists at the moment and feel highly discriminated against.
The education and skills of Traveller children are more likely to increase if they are integrated with children from the settled community over a much wider area, so that they do not dominate any particular school. I also believe that Traveller children and their parents would follow the example of the majority of children and have higher rates of attendance and a greater desire to achieve the qualifications and skills necessary to secure sustained employment.
I repeat my request to the Minister to introduce primary legislation to deal with the situation in the forthcoming Queen’s Speech and, in the interim, immediately to lower the 3% net household formation annual growth requirement for Gypsies and Travellers to around 1.5%, as I do not believe that the evidence supports the 3% figure and it is causing huge difficulty to local authorities and our constituents.
Mrs Linda Riordan (in the Chair)
I congratulate the hon. Gentleman on keeping his speech short and relevant. Hopefully, we will fit in all Members who wish to speak.
Mr Philip Hollobone (Kettering) (Con)
On a point of order, Mrs Riordan. You will know that at the start of this debate, there was a 10-minute delay while the microphones were not working. This is an important and well attended debate. What advice have you had from the Chairman of Ways and Means about whether 10 minutes could be added to the end of this debate, and subsequently to the rest of the day?
Mrs Linda Riordan (in the Chair)
I have no discretion as the Chair of this debate to extend the sitting, because question time begins in the House at 11.30.
Mr Iain McKenzie (Inverclyde) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate the hon. Member for South West Bedfordshire (Andrew Selous) on securing this debate.
The term “Travelling people” covers groups found across the country, in Scotland, Ireland and England, and across Europe. All regard travelling as an important aspect of their ethnic and cultural identity. This debate is not concerned with certain other groups such as, for example, fairground travellers—show people—or new age travellers, although obviously some of the issues that we will mention, such as the education of children, affect all sorts of travelling people.
In my own area of the country, Scotland, references to the presence of Travellers can be found as early as the 12th century. There is a number of theories about the origin of Travellers: some people argue that Travellers can trace their roots to a Celtic or perhaps pre-Celtic population; others suggest that they may descend from Roman slaves brought over to Britain, although on the evidence that can be identified, that sounds improbable. The most recent estimate is that there are more than 1,500 Travellers in Scotland at any one time, but the true figure is unknown. The Scottish figure excludes thousands of Travellers living in housing for some or all of the year, and many people are afraid to identify themselves as Travellers because they fear discrimination. Travellers themselves estimate that there are more than 15,000 Travellers in Scotland at any one time.
We recognise that Travellers engage in a wide variety of employment, including in the world of entertainment. Famous people connected with Travellers include Charlie Chaplin, Rita Hayworth, Bob Hoskins and Shayne Ward—it is even claimed that former US President Bill Clinton is descended from the Scottish Gypsy kings and queens—but as we know, it is not just famous Travellers who attract press coverage. Travellers are no longer a forgotten minority: both the local and the national media regularly cover stories relating to Traveller issues. Unfortunately, it usually results in the majority of people, who may never have met a Traveller, holding firm and often negative opinions about them. Although we should be concerned that press coverage is often unbalanced, we should also accept that Travellers are as diverse as any other group and recognise that, as in any other ethnic group, a small minority of individuals do engage in unlawful behaviour. In short, we should not be so gullible as to accept that they are all just misunderstood and hard-done-by angels.
For decades, Travellers’ accommodation needs have featured low on the priority list, and they have largely been the subject of heated debate. It would seem that in council chambers up and down the country, there are few subjects more hotly contested the provision of Traveller sites. Travellers require a range of accommodation provision, encompassing sites, housing and roadside camps, in order to meet their individual needs and circumstances. For many Travellers, travelling is not so much a lifestyle choice as a strong part of their cultural heritage. Traditionally, many Travellers had a wintering place and then travelled throughout the rest of the year, and some follow a similar pattern today, living in one place during the winter so that, for example, their children can go to school, and travelling during the summer.
The first council-owned site in Scotland was established only in 1978, in Argyll and Bute. During the 1980s and early 1990s, local authorities made use of a Scottish Office grant scheme to build sites, but some sites have since fallen into disrepair and others have closed. Existing council site provision in Scotland does not meet demand or the needs of Travellers, but many communities are still averse to supporting local Traveller sites—all agree that there should be sites, but not near them. In my constituency, we find that although we need to provide a campsite, local people object if it is to be situated near them. They all want an official campsite, but not beside them.
Recently, my council set aside moneys to establish a site, but communities disputed both the site position and whether it was the best use of money in these austere times. That is understandable, but money will still have to be spent to clean up unofficial sites used by Travelling people, such as roadside camps. In recent years, councils have blocked off many of the traditional roadside stopping places used by Travellers; as a result, Travellers have been compelled to camp in places that are closer to the settled population, which has often become a source of tension. Given the inadequate provision of council-owned sites and the difficulties in getting planning permission for private sites, roadside camping can be the only option for some families. As I say, roadside camping is often blamed for causing mess, which can incur rather hefty clean-up costs.
What of the UK-wide situation in sectors that affect Travellers, such as health and education? Many health services continue to exclude Travellers. Some GP surgeries refuse to register Travellers as patients, and doctors are reluctant to visit Traveller sites. Consequently, Travellers sometimes have no alternative but to seek care through accident and emergency clinics. Moreover, living conditions have a direct impact on health—more than 50% of Travellers have spent at least part of their life without access to running water. Travellers have one of the highest maternal death rates in the UK, and a study in Scotland estimated that the average life expectancy of Travellers could be as low as 55 years.
Attempts to meet the educational needs and concerns of Travellers are patchy. Some Traveller children are unable to attend school because they are concerned about their safety—in a recent survey, three quarters of young Travellers interviewed said they have been picked on or bullied, and some parents have even been advised by teachers to tell their children not to let the other pupils know that they are indeed Travellers. Interrupted learning as a result of travelling may also have an impact on Traveller children’s ability to access mainstream education, including further education. Few schools keep formal contact with Traveller pupils or record information about their attainment.
Clearly the provision of sites, including official sites, for Travellers requires the agreement and support of the communities who receive frequent visits from Travellers.
Andrew George
I am grateful to the hon. Gentleman for giving way, and I congratulate him on giving a balanced picture of the challenges facing the Traveller community. He describes a set of circumstances affecting the Traveller community and explains the nature of their marginalisation, which was exemplified by the statistics cited by the hon. Member for South West Bedfordshire (Andrew Selous), but does he agree that what underlies this situation is that there are simply not enough lawful and official permanent and transit sites for travelling people?
Mr McKenzie
I thank the hon. Gentleman for his intervention. He is absolutely right to say that there are not enough official sites, and that is one of the causes of the friction and tension between the travelling community and the established community.
I will finish my remarks by highlighting that very point. It cannot remain the position that people say, “Yes, we recognise the need for sites, but not here.” Travellers will continue to visit areas of the country regardless of whether facilities are made available for them, which will result in calls for Travellers to be moved on from unofficial stopping sites as soon as possible. However, to remove them from unofficial sites, councils up and down the country will have to identify official sites and agree their use with the communities that they serve. Otherwise, they will forever pick up the cleaning-up costs.
Julian Sturdy (York Outer) (Con)
Thank you, Mrs Riordan, for calling me to speak; it is a privilege to serve under your chairmanship this morning. And I congratulate my hon. Friend the Member for South West Bedfordshire (Andrew Selous) on securing this really important debate.
In my short speech, I wish to raise an issue that is causing many of my constituents deep concern: the siting of Gypsy and Traveller encampments by local authorities. My local authority, York city council, is in the early stages of developing its local plan, and in its first set of draft proposals, which were consulted on last summer, 63 Gypsy and Traveller pitches were suggested. Of those 63 pitches, 41 have been proposed in what I would class as inappropriate countryside locations in small rural communities in my constituency. A further 21 travelling show people pitches have been proposed, again in rural locations on the edge of village settlements.
All the Gypsy, Traveller and show people pitches allocated to proposed sites are on York’s established green belt. The council has promised that the remaining 22 Gypsy and Traveller pitches are to be allocated to “suitable” sites as they emerge during the next 10 years, but the council’s blatant disregard for the green belt gives one little faith about what they class as “suitable” sites. Sadly, when identifying sites the council has actively pursued a “green belt first” policy, rather than the “brownfield first” policy that is explicit in the national planning policy framework. I shall be grateful if the Minister clarifies or reiterates today what I believe to be the current position: that local authorities should pursue a “brownfield first” policy when allocating Gypsy and Traveller sites, and that they should consider publicly owned land before privately owned sites.
Disappointingly, in York the council appears to have used the willingness of the landowner as the only criterion for designating sites, much to the detriment of my constituents and the affected communities. Countless constituents have contacted me to express their deep concern about the ability of landowners to use the local planning process to coerce—some might even say “blackmail”—communities into accepting inappropriate housing developments by threatening to put the land forward for Gypsy and Traveller sites. As people can imagine, that does not help anyone involved in this process, from the Travellers themselves to the affected communities.
I will also touch on the question of unmet need for Traveller pitches. There seems to be some confusion among certain local authorities—I am sorry to say that mine falls into that category—about whether unmet need constitutes the “special circumstances” required to place new Traveller sites on the green belt, even when no other option is available. Will the Minister clarify that situation for me? I would also be grateful to learn whether he feels that the “five-year supply” rule on new pitches should apply to Gypsies and Travellers, who are nomadic in their living requirements and whose accommodation needs are likely to fluctuate greatly during the 15-year life of a local plan, as has already been mentioned.
Gavin Williamson (South Staffordshire) (Con)
Does my hon. Friend share my concern about how supply is determined? Salford university undertook a study, including in my own constituency, that basically asked the Gypsy and Traveller populations how many pitches they thought they would require during the next 15 to 20 years. Unsurprisingly, the number was very substantial: the Gypsies and Travellers deemed that they needed a 60% increase in the supply of pitches in quite a short period.
Julian Sturdy
I entirely agree with my hon. Friend. In fact, he might have been reading my speech, because I will touch on that important issue when I talk about how local authorities have assessed future needs.
As we all know, under the national planning policy framework local authorities have sole responsibility for assessing the accommodation needs of Gypsies and Travellers in their area. I am not saying that it is an easy task—far from it; it is very difficult. However, I am concerned that there are insufficient checks and balances in place to ensure that these assessments are being carried out in an objective and proportionate manner.
As I said, York city council has assessed that it requires more than 80 pitches for Gypsies, Travellers and show people during the 15-year life cycle of its local plan, but when my constituents and I reviewed the figures and the methodology used for identifying that specific need, we found some disturbing inaccuracies and errors, which suggests the council is proposing to provide for well above the “appropriate level of supply” required. The council based much of its background research on the 2008 North Yorkshire accommodation assessment. The report identifies that York has a shortfall of 36 pitches, which the council astutely picked up on in its own assessment, but that 2008 document also states that the number of households moving off sites and into bricks and mortar housing has vastly outstripped the projected need from concealed Gypsy and Traveller households. It concluded that the trend in York was of declining need, with the total number of additional pitches required between 2008 and 2015 having gone into negative figures, standing at minus 17—an important fact that was strangely absent from the council’s own assessment. Under huge protest, the council is now revisiting its assessment process.
The 18 concealed households that city of York council included in its assessment included Gypsies and Travellers who are currently accommodated in bricks and mortar housing but wish to be on local authority-run Travellers’ sites. Will the Minister clarify the definitions attached to Gypsies and Travellers? I strongly believe that, as my hon. Friend the Member for South West Bedfordshire so eloquently stated, those who reside in bricks and mortar housing and have done so for some time should not be taken into account by local authorities when assessing Traveller pitch requirements, regardless of whether they would like to be back on a pitch.
Andrew George
The hon. Gentleman makes an interesting point. That is clearly the nub of how local authorities have assessed needs. I do not know about his local circumstances, but is he aware of any local authority or official site of pitches that is underutilised? How does he explain the many examples of unlawful pitch sites? Traveller people have no other alternative, because there are not sufficient lawful sites available.
Julian Sturdy
The hon. Gentleman makes a good point. I can only speak from my experience of my local authority and constituency. There is underuse on privately run pitches in my local authority area and we see few, if any, illegal encampments in the city of York. There are illegal encampments in neighbouring local authority areas, but none specifically in the York council area.
It would be sensible—this also applies to the point that I have just picked up on—of the Government to do more to encourage neighbouring local authorities to work together to carry out accurate assessments of Gypsy and Traveller needs, to ensure they are appropriately accommodated and that the responsibility for doing so is apportioned fairly. York, for example, is behind many other neighbouring local authorities in the local plan-making process. That has served to highlight the disparity between the needs assessments, with the council committing itself to far more pitches than any of its neighbours. I fear that that is because it is including the unmet need of surrounding local authorities in its own assessment.
I have a lot of respect for the Minister and the work he is doing on this issue, and I look forward to hearing his comments on the points raised in the debate. On the whole, I feel that much greater clarity is required about both the appropriate siting of Traveller pitches and the assessments of Gypsy and Traveller accommodation needs. That would provide much-needed transparency in a complex area of law and would prevent local authorities, such as city of York council, from the irresponsible and complacent conduct that has, sadly, caused my constituents so much distress.
Priti Patel (Witham) (Con)
It is a pleasure to serve under your chairmanship, Mrs Riordan. I congratulate my hon. Friend the Member for South West Bedfordshire (Andrew Selous) onsecuring this important debate and on his thoughtful speech. Having initiated a similar debate in July 2011 on Gypsy and Traveller planning, I am pleased to be able to contribute to this one, because this is a challenging area of constituency work for all right hon. and hon. Members in this Chamber.
The Minister will be aware that, like other parts of Essex and England, some communities in my constituency—I thank him for visiting it last week—have become blighted by the negative consequences of ill-thought-out planning policies, as well as illegal and unauthorised developments. The way those cases have been handled through various planning processes has alarmed many of my constituents, who take issue with that and now feel that there are two planning systems running in parallel—one for the settled community and one for travelling communities.
Let me provide some context. Three local authorities and a county council cover my constituency, so, as one might imagine, there are complexities relating to local development frameworks.
Simon Hart (Carmarthen West and South Pembrokeshire) (Con)
On that point, although certain matters are devolved in Wales, does my hon. Friend agree that the consequence is that, rather than enhancing and integrating the Traveller community, resentment towards that community has developed, along with a complete lack of confidence in the local authority, leading to the opposite effect of what was desired?
Priti Patel
My hon. Friend is right. We are dealing with questions of public confidence. The planning system needs to address the many concerns that he and other hon. Members have raised, but there are endless examples where the planning system has been perceived as deeply unhelpful, particularly in respect of travelling communities and, of course, settled communities.
I have dealt with cases where human rights legislation has been used in favour of the travelling community. That legislation appears to provide a licence for planning developments to be granted on a particular scale, even though similar applications from the settled community would be refused. This is about ensuring that everyone is dealt with fairly and even-handedly within the planning system. Evidence seems to suggest that the planning process favours travelling communities over settled communities, and I have examples of that happening.
I praise Conservative Ministers, particularly the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Great Yarmouth (Brandon Lewis), and his team, who deserve considerable credit for trying to resolve many historical problems associated with the planning system in relation to the travelling community. I praise them also for calling in some appeals and for some of the reforms that have been made since we have been in government. Much more work is needed to ensure that we have a single planning system that is fair and, importantly, has the confidence of the public in all our communities.
I shall highlight ongoing problems in the village of Great Braxted in my constituency. It is a small rural community with an amazing, strong community spirit. All the neighbours know each other and new developments are not only unexpected, but are more often than not unsuitable for the area. In a well known case, a road in the village, Lea lane, has in recent years become the focal point of a number of planning applications, planning appeals and enforcement actions.
One family, who have lived in Lea lane for more than 20 years, have been left terrified by the constant bombardment of planning activities and development taking place on the land surrounding their property. In recent years, they have faced more than 30 planning applications from members of the travelling community and their associates. Every couple of months a new application or appeal seems to be lodged. Some applications have been successful, particularly on appeal, and pitches have been approved but remain unoccupied, but when applications are refused, new applications of a similar nature are submitted or unauthorised development continues.
My hon. Friend the Minister is aware from my correspondence with him about this situation that there seems to be no mechanism built into the planning system to protect my constituents from this bombardment of planning misery. I urge the Government to consider introducing new powers that can be exercised locally, to prevent persistent applications of a similar type from being made for a period of time.
In one example, a planning inspector granted permission on appeal by disregarding my constituents’ concerns and putting the rights of the travelling community above theirs. The inspector’s judgment stated:
“any harm to the living conditions of”
my constituents
“would clearly be outweighed by the benefits arising from the provision of a site for Gypsies and Travellers.”
The Minister knows that judgments such as that one shatter public confidence in the planning system and exacerbate the sense of unfairness in settled communities, particularly when their rights and views are effectively bypassed. Furthermore, my constituents have incurred significant costs—we have heard about this already—as a third party in the planning appeals process, and they have no way of recouping those costs, even when the application is refused. Works undertaken at the site on Lea lane have been very inconvenient, and my constituents have suffered disruption to their utilities—on top of the misery the planning process causes them, their utilities are being cut off. What is more, the area’s planning history naturally makes if very difficult for my constituents to sell up and move on.
The local planning authority is Maldon district council. Its draft site allocations plan, a copy of which I have here, deems that Lea lane should host 11 of the district’s 54 pitches and that priority should be given to intensifying or expanding current sites to accommodate new applications, irrespective of the plot’s unsuitability. I hope that my hon. Friend the Minister will encourage the local authority to reconsider its approach to Lea lane. I offer him an open invitation to pop by and see the site for himself when he is passing through on the A12, which he knows well. I am sure he has a great deal of empathy for my constituents, who feel trapped by the situation.
This weekend my constituents launched a petition to the Secretary of State for Communities and Local Government to ensure that the settled community is treated equally and fairly in the planning process. Within hours of the petition’s launch, there were more than 200 signatures. I have a copy of the petition here, and I would be delighted to hand it to the Minister. I hope he will take note of the concerns raised in the petition.
Business premises and industrial estates are also affected by Travellers who turn up totally uninvited. Witham Industrial Watch has had some horrendous cases. Thousands of pounds of damage was caused last summer alone, not just on one occasion but on three. Businesses are the engines of our economic growth, creating jobs, prosperity and wealth. It is appalling to see the extent of the devastation and damage that has been caused on our industrial estates in Eastways and at two other locations. Action was taken though section 61 notices. I commend Witham police, with which I spent some time two Fridays ago. We discussed the cases, and the police were on the ball. I praise Witham Industrial Watch, too, for working in partnership with Witham police. I think there will be some best practice and good learning that we can all use when dealing with such cases.
The Government have done the right thing by making squatting in people’s homes a criminal offence and I urge Ministers to consider introducing a similar criminal offence to protect businesses and landowners by deterring illegal occupancy of land.
David Simpson
I agree with what the hon. Lady says about commercial sites and businesses. In my constituency we have had serious problems in which companies have had to pay Travellers to move on because international visitors were coming in and the place was a mess. It is a disgrace that that has to be done.
Priti Patel
I completely agree with the hon. Gentleman. That is a classic example of why the system needs to be changed. The status quo is not an option; we need to do something. I believe that we can have an effective planning system that addresses the needs of both settled communities and Traveller communities and addresses the tensions that we have discussed today, but we need to change the culture and the attitude within the planning system, which means taking robust action on some of the areas that I and other hon. Members have raised.
Mrs Linda Riordan (in the Chair)
Before I call Mr Robert Syms, I remind Members that three hon. Members wish to speak. If they adjust their speeches, we might get them all in before I call the Front-Benchers to start winding up the debate at 10.40 am.
Mr Robert Syms (Poole) (Con)
I congratulate my hon. Friend the Member for South West Bedfordshire (Andrew Selous) on introducing an important debate that touches so many of our constituencies. A general frustration has been expressed this morning that giving special status to one category of people tends to trample on the rights of many of our ordinary, law-abiding, tax-paying constituents who, frankly, get very angry when they see their lives, their children’s lives and their grandchildren’s lives being blighted. In the Bournemouth and Poole area, particularly in the summer months, we face a number of groups that move down to find work. There is a good general argument for reviewing the law and the status of such groups.
I recently had a meeting with the Minister and other representatives from Dorset, and I will repeat what we discussed for the record. I thank him for meeting us. We have a particular problem in that we have one Dorset constabulary that covers Dorset, Bournemouth and Poole, but Bournemouth and Poole are unitary authorities. Under the Criminal Justice and Public Order Act 1994, the police cannot move a Traveller group over a unitary authority boundary, which puts pressure on both Bournemouth and Poole to find provision. Because we have very tightly drawn boroughs, and because we have green-belt and heath land, it is terribly difficult to identify sites within the conurbation that are not next to settled communities. That causes a lot of difficulty and trouble, and it would be much easier if the issue were managed over in Dorset, Bournemouth and Poole, with all three combining to do their best to manage the problem in the summer.
Poole has always tried to be as sensitive as possible, and the health authority has always tried to be as good as possible by knocking on the door and asking after the health of the mothers and children of the Traveller community, but law-abiding people—local residents who pay their council tax—get very frustrated that there seems to be a special status. Sometimes, neither the police nor the local authority seems able to take action to address the problem effectively and efficiently.
At the moment, Poole is trying to identify a temporary site, and it has considered some 90 sites. Poole is thinking of putting in for planning permission on a site at Marshes End in Creekmoor, which is causing a lot of controversy and trouble. Marshes End may not even be the best site because it is near a fast road, is next to a fire station and has few facilities. Leaving that aside, because the planning process will sort out whether it is the most appropriate site, the real frustration is that it is expensive. Poole is not a highly funded authority, and people, again, get frustrated that resources have to be put in to deal with what they consider to be a difficult problem.
Generally, I think there is a case for modest reform in a Bill in the next Session. We need to reform sections 61 and 62 of the 1994 Act, and the Government should consider whether people ought to be treated fairly and equally, rather than having a privilege for one specific group that tramples on the rights of others.
Tim Loughton (East Worthing and Shoreham) (Con)
I congratulate my hon. Friend the Member for South West Bedfordshire (Andrew Selous) on securing this debate.
As a quick disclaimer, when I raised the subject of a constituent and endorsed the local authority, which referred to him as “unkempt,” it later transpired that that person claims to be of Traveller origin and a six-month criminal investigation against me by Sussex police ensued. The investigation of course got nowhere. When the case was dropped, I raised the matter in the House, at which point the references to “Traveller” were registered as a hate incident by Sussex police, and six months later I was served with a police information notice that has subsequently been the subject of a Committee of Privileges investigation. I put it on record that I will not be sending a copy of Hansard to anyone, which is what sparked the complaint.
I have no argument with Travellers, but I do have an argument with illegal encampments, which cause such devastation, angst, pain and cost to my constituents. They disrupt the leisure, education and business activities of legitimate council tax-paying constituents who just want to go about their business. In my constituency, Adur and Worthing have been the destinations of choice for illegal encampments for many years. I take issue with the fact that the residents of such illegal encampments seem incapable of vacating without completely trashing the site and leaving a heck of a mess for local people to clear up. One of my parish councils, which has been the subject of multiple illegal encampments, had to raise council tax last year by 28% purely to pay the bill for clearing up and reinforcing some of its public sites.
Tim Loughton
I will not give way because there is very little time.
The problem is that illegal encampments seem to have no consideration for the communities in which they park themselves. As hon. Members have said, there is a perception among our constituents that there is one law for Travellers and illegal encampments and another law for law-abiding citizens, who would have to fund the clearing up if they undertook such activity. My concern is that our police, and certainly Sussex police, seem to be engendered with a feeling of political correctness, such that when one challenges the legitimacy of people calling themselves Travellers, or the legitimacy of what they are doing, one is put in the frame by the police. That is just not fair, and it creates great resentment among constituents who have to pay to clean up the mess.
The situation in my constituency has got better, and that is largely because of our new police commissioner, Katy Bourne, who has made illegal encampments one of her priorities. She has made the police take the problem much more seriously. Adur and Worthing councils have certainly improved their responses enormously and there has been a much better team effort in dealing with the problem. Rather than the police telling us what they cannot do, the police and crime commissioner has compelled them to issue rather more section 61 and section 62 notices, which have moved many of these illegal encampments swiftly on. Those notices work. In one case last summer, 50 caravans turned up on an open public area where a church festival was being held. Within an hour they had been moved on. They went to a football pitch, and within 24 hours they had been moved on from there, because the police were prepared to use section 61 and section 62 notices.
In West Sussex, all the local authorities have come together to co-fund a transit camp for the whole county, which will improve the problem. We welcome the Government money made available to help fund that transit camp. I strongly agree with my hon. Friends the Members for South West Bedfordshire and for Poole (Mr Syms) that we need to reform the Housing Act 2004. Everyone should be treated the same in housing assessment, and we overestimate the real need. A recent census found that more than two thirds of Travellers have brick and mortar homes in other parts of the country. We must look at the vulnerability of these communities to very poor education, qualification, health and employment outcomes, and a long-term policy that addresses that is needed. Just treating them differently in the planning system is not the solution.
We need to use smarter measures to deal with illegal encampments. In my constituency, I am urging the police to ensure they have a hotline for constituents who see these encampments appearing, so that that can be reported quickly and a fast response by the police and the local council to stop that encampment getting bigger can be expected and achieved. I can never understand why, when an illegal encampment starts, the police allow further caravans and vehicles to enter the site. During the day, people will often leave the caravans in their four-wheel drive cars to do business of various sorts, and I do not understand why they are allowed back on to an illegal encampment in the evening. Why are we not using more disruption techniques and saying, “If you are going to leave the site—as we hope you will if it is an illegal encampment—you can only go with your caravan, and you certainly cannot come back in again in the evening”? Those are the sort of disruption tactics we should be using for better enforcement.
The problem in my constituency is that the council has spent an awful lot of money reinforcing entrances and putting down bunding, only for a whole fence panel to be taken out to provide an entrance or for bollards to be ripped out by the tow bar of a car. Recently, the bunding on one site, which had been put in specifically to stop illegal encampments, was removed by a bulldozer. Why do we not use CCTV more, once an illegal encampment has been set up, to see what further offences might be committed? Why do we not better check the number plates of these vehicles to see where they are registered, and whether the Travellers have other accommodation or are without any alternatives?
All those things need to happen, but, recognising the problem and the particular vulnerabilities of the Traveller community, we also need far better long-term planning, and we need the Traveller community to sign up to that. We need clarification of the law, joined-up solutions and, above all, a level playing field that is hopefully used for playing and not illegal encampments.
Mr Philip Hollobone (Kettering) (Con)
It is a pleasure to serve under your chairmanship, Mrs Riordan. I join the chorus of praise for my hon. Friend the Member for South West Bedfordshire (Andrew Selous), not only for securing this important debate but also for the quality of his remarks and how he addressed this difficult issue.
We are fortunate to have a Minister at the Department for Communities and Local Government who knows what he is talking about. He has successfully done many things so far in his all too brief term of office, but three stand out. First, he has torn up 186 pages of equality and diversity Whitehall guff to do with Gypsies and Travellers and the planning system, which was produced by the then Office of the Deputy Prime Minister. Secondly, he has visited Kettering and Kettering borough council not once, but twice. The last time was specifically to discuss the problems caused by Gypsies and Travellers. The third thing, which I was pleased to hear but only heard today, was that on 17 January he published a consultation to tackle once and for all the issue of Gypsies and Travellers self-declaring themselves as Gypsies and Travellers when many of us know they are nothing of the sort.
The fourth thing he could do, which would crown his career so far, would be to accept my private Member’s Bill, the Planning Regulations (Removal of Provisions in Respect of Gypsies and Travellers) Bill. I wanted to call it the “Gypsies and Travellers (the Same Planning Rules as Everyone Else) Bill”, but I was told by the parliamentary authorities that that was not allowed. Basically, the Bill would do what we have all been asking for, which is to remove all special provisions for Gypsies and Travellers in the planning system so that everyone is on exactly the same level playing field when they make a planning application. Why should there be any special provisions for those calling themselves Gypsies and Travellers, especially when we have learned today that three quarters of those people live in houses like everyone else? I am not convinced that there are as many Gypsies and Travellers as everyone says there are.
Dr William McCrea (South Antrim) (DUP)
Recognising that everyone should be treated the same on housing need, I point out that when a small built housing site was provided for the travelling community in one constituency in Northern Ireland, a well-noted family in the travelling community moved in and the rest of the houses were to be occupied by another family. However, the first family would not allow the other family to move in, so the authority provided another built housing site at the other end of the town for the other family. Would that be accepted in any other housing list?
Mr Hollobone
No, it would not, and the hon. Gentleman is right to draw the House’s attention to that matter. This perversion of the planning system is reiterating itself through these absurd extra provisions that are bolted on. People in my constituency are being brought to tears worrying about the planning regulations on Gypsies and Travellers. It is not unfair to say that some parts of the rural and farming community are being terrorised by the threat of theft, crime, rubbish and antisocial behaviour from local Gypsy and Traveller groups.
In Kettering and other communities within my constituency, local people are understandably worried about where Kettering borough council, of which I have the privilege to be a member, will eventually decide to site up to 37 pitches by 2031. One area that is causing huge concern is the Scott road garages site right in the middle of Kettering, where there could be a number of pitches. A crucial council meeting is being held on 19 February, and local people will be paying close attention to its outcome. The issue is not Kettering borough council’s fault; it has to do what the Government are telling it to do. Government regulations say that the council has to provide sites for 37 pitches by 2031. Through my private Member’s Bill, I argue that that requirement should be abolished. There should not be pressure on local authorities to come up with a designated number of sites, and abolishing that requirement would allay a lot of fears in my community.
The village of Braybrooke has had particular challenges: 100% of the local school was occupied by Traveller children, and that school is now going to close. Braybrooke, which has 325 residents on the electoral roll, is being threatened with a growing number of unauthorised and authorised encampments that might eventually surround the village, including a greenfield site of 37 acres split into 60 plots, which Travellers are increasingly moving into. These important issues cause real concern to my constituents and, as we have heard today, to constituents around the country. I am only too pleased that we have a Minister in place who recognises those concerns, and I am confident he will do something about them.
Roberta Blackman-Woods (City of Durham) (Lab)
It is a pleasure, Mrs Riordan, to serve under your chairmanship. I congratulate the hon. Member for South West Bedfordshire (Andrew Selous) on securing this debate. It is clear that he and other hon. Members who have spoken care passionately about this matter and have sought to bring forward issues affecting their constituencies.
It has been suggested that primary legislation should be altered, but whatever is done, the needs of the Gypsy and Traveller community must be assessed and land must be allocated to meet their needs. The Minister may be surprised to hear me say that much of the March 2012 planning policy framework would address many of the issues that hon. Members have raised today if it were implemented for Gypsies and Travellers.
I thank my hon. Friend the Member for Inverclyde (Mr McKenzie) and the hon. Member for St Ives (Andrew George), who is no longer in his place, for their extremely measured and thoughtful contributions, which sought to balance the practical problems facing Gypsies and Travellers with the difficulty of securing enough sites to meet their needs.
I will briefly outline what the Labour Government did. I will not go as far back in history as the hon. Member for South West Bedfordshire did, but it is important to say where we are. As the Library briefing note outlines, the Labour Government pressured councils to make adequate provision for Gypsies and Travellers, partly through the Housing Act 2004 and partly through regional spatial strategies and local plans. That required local authorities, when reviewing housing needs in their area, to examine specifically the accommodation needs of Gypsies and Travellers residing in or resorting to their district. That was important because of the need to identify permanent and temporary sites.
Planning policy guidance circular 1/2006 put an obligation on local authorities to identify land in what are now local plans for three reasons: to enable Gypsies, Travellers and Irish Travellers to buy land and to develop sites; to enable registered council landlords to apply to the Housing Corporation for funds to develop sites; and for the Secretary of State to intervene, when necessary, to ensure that land is identified. The consensus seemed to be that that was making councils and communities find suitable land and that there were increasing opportunities for children to enter schooling. Some of the issues that have been addressed today were starting to be met.
Despite the coalition Government’s removal of regional spatial strategies, there is still an expectation that local authorities will make adequate provision for Gypsies and Travellers in their area. The March 2012 planning policy framework states that local planning authorities should make their own assessment of housing needs and sites for Travellers, and many hon. Members today made a powerful case for that need to be assessed objectively.
Local planning authorities should work collaboratively to develop fair and effective strategies and should be encouraged to plan for sites over a reasonable time scale, to protect the green belt, to encourage more private provision, to introduce measures to reduce unauthorised development and encampments, to have realistic and inclusive policies and to take action to reduce tension between settled and Gypsy and Traveller communities.
The policy raises several questions that I hope the Minister will answer today. What will happen if the local authority’s assessment of Gypsy and Traveller need is unsatisfactory and results in too little or too much land or too few or too many sites? How will he know that? What will happen if, as the hon. Member for Poole (Mr Syms) mentioned, local authorities do not work collaboratively to develop effective strategies to meet needs, and what mechanisms will enable them to do that? What sanctions will apply if they do not work together and, again, how will he know that?
What is a reasonable time scale? How will it be obvious and what will be the mechanisms if private Traveller site provision is not adequate, or is proving problematic in the range of ways that hon. Members outlined? How will the Department for Communities and Local Government monitor the number of unauthorised developments and encampments, and what action will be taken to address that? How many local authorities have developed realistic and inclusive policies, and how are they evaluated?
How many additional Gypsy and Traveller sites have been provided since the March 2012 planning policy framework? How is the Department supporting initiatives to reduce tension between the settled and the Gypsy and Traveller communities, which are important given some of the comments this morning? Is the Department monitoring the use of rural exception site policy and if not, given that it is specifically mentioned in the guidance, what action will the Minister take?
Hon. Members will realise that I have little quarrel with the policy in the 2012 planning policy framework and guidance. It is right that we should have a more localist approach to determining need for the Gypsy and Traveller community and try to get local communities and councils to be reasonable in meeting that need. However, I would like to know how the Government’s policy is working in practice, and how they can be assured that that need is being met.
Research published in The Independent in March 2012 stated:
“The Government is underestimating the demand for new Gypsy and Traveller sites, exacerbating the already dire shortage and making ‘a future Dale Farm inevitable’”.
In January 2013, the Homes and Communities Agency announced grants of £47 million for 170 improved pitches and 620 new ones in schemes throughout the country, but it seems that fewer than 300 new pitches are likely to be built before 2015, and that by then funding may not be available. Many identified sites simply do not get planning permission.
We seem to be concentrating on sites that are inappropriately located, sometimes in the green belt and sometimes where problems arise for local communities, but the Minister and his colleagues must tell us where sites will be and how to facilitate local authorities and communities to meet existing needs in their area and to do so within an inclusive framework. No one is saying that that is easy. The issues are difficult, as the hon. Member for South West Bedfordshire outlined. However, the complexity of the issues must be reflected not only in national guidance but in local strategies and actions. Monitoring is necessary so that we know what is and is not working and so that best practice can be shared. I do not see the Minister or his Department doing any of that at the moment.
There is a striking mismatch between need and where the money has gone, with few applications from London, the east, the south-east and the north-west. Essex, Kent, Cambridgeshire, Surrey and Hertfordshire had the most Gypsies and Travellers but were awarded only 4% of funding between them. The information we have suggests that the Minister should take action, and I would be grateful for answers to the specific points I have raised this morning.
The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
It is a pleasure to serve under your chairmanship, Mrs Riordan. I join others in congratulating my hon. Friend the Member for South West Bedfordshire (Andrew Selous) on securing this important debate about the general Gypsy and Traveller policy. It has been a high-quality, reasoned debate with many excellent contributions and suggestions.
I want to make it absolutely clear that, as hon. Members have said, Gypsies and Travellers are as much members of our communities as anyone else and deserve the same protection and the same rights. The key word is “same”. It has been suggested that there may be one law for settled communities and a separate law for Travellers, but we need to ensure that everybody is treated equally.
I gently suggest to the hon. Member for City of Durham (Roberta Blackman-Woods) that it is difficult for this Government to take lessons from the previous Labour Government, who left us with the farce of Dale farm, which was mainly down to top-down, regional strategy approaches; she tempts me to return to those by taking a centralist approach to assessing what people are doing. We will certainly not do that.
That leads me directly to the comment of my hon. Friend the Member for South West Bedfordshire about the 3% growth rate in Gypsy and Traveller household net formation. He believes the figure to be closer to 1.5% and will know from his research that the 3% figure originates in the Office of the Deputy Prime Minister’s 2003 report “Local Authority Gypsy/Traveller Sites in England”, which was probably written with the same pens that we still have many thousands of, paid for with taxpayers’ money back then. The figure was restated in the Department for Communities and Local Government’s 2007 report “Preparing Regional Spatial Strategy reviews on Gypsies and Travellers by regional planning bodies”. My hon. Friend makes a fair point, so, bearing in mind that we have moved away from regional spatial strategies, I will go away and examine whether we can reassess the guidance.
We want fair play in the planning system. We are committed to encouraging sustainable development, and it is important that local authorities plan for the needs of all in their communities, including Travellers. We should not, however, tolerate any abuse of the planning system. We have introduced a broad package of measures to ensure a fair deal for both Travellers and the settled community. Members have raised the different things that have happened in various areas and more work needs to be done to encourage councils and the police to use the powers that they already have. Good examples exist of where the police are now using the considerable powers that we have given them.
We have replaced the top-down planning policy with a new planning policy for Traveller sites, putting the provision of sites back into local authorities’ hands, in consultation with their communities. We abolished the undemocratic regional strategies and the top-down housing and Traveller pitch targets that they contained. We have limited opportunities for retrospective planning applications in relation to any form of development through the Localism Act 2011. We have provided stronger enforcement powers for local authorities to tackle breaches of planning control.
In addition, we have reminded council leaders of the strong powers already available to them to deal swiftly with illegal and unauthorised encampments. We are encouraging authorised site provision, as my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) mentioned in relation to Adur, with £60 million-worth of Traveller pitch funding on top of the new homes bonus, which applies to Traveller sites as it does to conventional housing. We have given residents of authorised local authority sites improved protection against eviction by applying the Mobile Homes Act 2013 to those sites. We have also set up a cross-Government, ministerial-level working group to address the inequalities experienced by Gypsies and Travellers, particularly in health and education.
Andrew Selous
Does the Minister have any sympathy with my point about it not being helpful to have a large concentration of people among whom joblessness is high, skills training is low and rates of absence are high? That could become the norm for that group, and if we really want to do the best for this community, I ask him to consider the matter.
Brandon Lewis
My hon. Friend makes a good point about ensuring that communities are mixed and balanced, and I encourage local authorities to be aware of that in their planning work.
We also revoked the legislation that limited the use of temporary stop notices against caravans used as a person’s main residence, which might well have stopped the farce at Dale farm that developed under the previous Government. We removed unnecessary national regulation and now allow local authorities to make their own decisions about temporary stop notices.
Our policy aims to increase the number of Traveller sites in appropriate locations. It seeks to address under-provision and to maintain an appropriate level of supply, which may help to reduce unauthorised sites. Our planning policy aligns more generally with that for standard housing. It expects local authorities to plan to meet their Traveller needs based on robust evidence developed locally and to identify and update their supply of specific sites.
Our policy strengthens protection of the green belt and the open countryside by making clear that Traveller sites are inappropriate for green-belt development and that local authorities should strictly limit the development of new Traveller sites in the open countryside. My hon. Friend the Member for York Outer (Julian Sturdy) made a point about the balance between unmet need and the green belt. I am concerned that decision makers do not always afford the green belt and other areas special to us the level of protection that our policies seek to deliver, and I see that concern in the correspondence that I receive and in this morning’s comments. That is why I announced to the House in July last year that the Secretary of State for Communities and Local Government considers that the single issue of unmet demand—whether for Traveller sites or for conventional housing—is unlikely to outweigh harm to the green belt and elsewhere and to constitute the exceptional circumstances that justify inappropriate development in the green belt.
I also announced that the Secretary of State would recover for decision himself a number of appeals against the refusal of planning permission in order to test the relevant policies at national level. Earlier this month, I announced that those recoveries would continue and re-emphasised our policy position on unmet need and the green belt. I hope that that provides some comfort to hon. Members.
Andrew Selous
May I ask the Minister and his officials to re-examine paragraph 15 on page 5 of the “Planning policy for traveller sites” document? Although I welcome what he and the Secretary of State have said, I am concerned that the wording of paragraph 15 runs against what the Minister has just stated.
Brandon Lewis
My hon. Friend highlights why it is important that we are calling cases in to make the Government’s position clear and to test the policy, but I will consider that specific issue.
My hon. Friend the Member for Witham (Priti Patel) will understand that I cannot comment on particular cases due to the quasi-judicial planning issues, but her point about persistent applications was well made. I enjoyed my visit to her constituency last week, and I am sure that the residents of Little Braxted will be looking forward to its afternoon outing on ITV’s “Britain’s Best Bakery” this week.
My hon. Friend the Member for Poole (Mr Syms) made reference to a meeting that we had and an idea that was put forward. We will be examining how we can take further that proposal, which may help to alleviate the problems that arise when things move back and forth in a small area.
My hon. Friend the Member for Kettering (Mr Hollobone) always tempts me into new ways of dealing with issues, but I will deal with his suggestions when we come to consider his private Member’s Bill.
We want to ensure fairness in the system, and I stress that we announced our intention to consult later this year on whether the planning definition of Travellers should refer only to those who actually travel and have a mobile or transitory lifestyle. If someone has ceased to travel, it is right to ask whether they should be treated as a Traveller for planning purposes, and we will be seeking answers to that question. In the meantime, however, I am keen to hear the views of hon. Friends, Opposition Members and others.
I am keen to hear views on how planning policy for Travellers could be further refined to ensure that the green belt and other areas that we value are given proper protection. This debate has provided a welcome opportunity to pursue that discussion, but I hope that it will develop in due course. We have undertaken a range of things to ensure that councils have the powers that they need to deal with illegal encampments swiftly. We published some guidance last summer, and I am happy to provide copies of it to interested Members.
In conclusion, I stress that our planning reforms seek to achieve three things: an adequate supply of authorised sites to meet Traveller needs; a level playing field for all; and the protection of our natural heritage and open spaces. We are determined to ensure that everyone has the ability and aspiration to prosper and that we break down the barriers to social mobility through a planning system that is fair and equal to all.
Free Schools and Academies
(10 years, 9 months ago)
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Mr Mark Hoban (Fareham) (Con)
It is a pleasure to serve under your chairmanship this morning, Mrs Riordan.
My interest in school choice is a long-standing one. On my bookshelf at home are pamphlets and books dating back to the ’80s and ’90s about the links between diversity, choice and standards. I helped to draft our education policy for the 2005 election, which had as one of its key tenets parents’ right to choose a school for their child. However, my interest is not purely political; it is personal, too—predating my interest in politics. My parents did not choose the nearest school to our home for me or my sisters. They chose state Catholic primary and secondary schools for us, which required a bus or car journey to get there. My nieces and nephew go to the same schools in Durham today.
I am proud of the Government’s work to expand the diversity of schools through the academy and free school programme, thereby creating choice for parents, but two things have been clear to me throughout. Choice is a reality only when there is diversity and capacity. It is real only when there are different types of school for parents to choose between; and there must be enough capacity in the system to enable parents to get their child into the school of their choice.
I want to highlight two barriers to choice: one that limits diversity and one that limits capacity. I am committed, as a matter of my political beliefs, to school choice, and I find it hard when a policy of the Government whom I support effectively prevents the next generation of Catholics from attending a Catholic school, in areas where there is neither a Catholic school nor adequate capacity. Our current policy encourages all new schools to be either academies or free schools, and that route should add to 243 existing Catholic academy schools. Unfortunately, there is a cap on faith-based admissions that inhibits the willingness of Catholics to sponsor a new academy or free school, and therefore limits the diversity of academies and free schools.
The current policy requires, in the interest of inclusion, that oversubscribed denominational schools be able to reserve only 50% of their places for children of the relevant faith. That flows from the coalition agreement:
“We will ensure that all new Academies follow an inclusive admissions policy. We will work with faith groups to enable more faith schools and facilitate inclusive admissions policies in as many of these schools as possible.”
That is a one-dimensional view of inclusivity; 34.5% of children in Catholic primaries are from an ethnic minority background, compared with 28.5 % nationally, and 17.3% of children in Catholic secondary schools live in deprived areas, compared with 12.2% nationally. Of course, Catholic schools are also popular with non-Catholics.
Why does the cap matter? A Catholic free school or academy is likely to open only in an area with a large Catholic community, where there is no—or limited—provision; given the popularity of Catholic schools with Catholics and non-Catholics alike, many will be forced, in practice, to turn away Catholic pupils to meet the 50% cap. The Church is concerned because, first, Bishops are required to ensure that where there is a demand for Catholic education it is satisfied; they feel that it would be a breach of canon law to support a school that turned away Catholic children. Secondly, there is a broader point about ethos. There is something different about a Catholic school and its values. There are aspects of school life that are bound up in the sacramental life of the school—participation in mass, a set of shared values, and reference points that relate to the Church and its teaching. It is hard to see how those shared values and ethos can be maintained if half the pupils cannot relate to the practice of the Catholic faith.
That is not to say that the schools in question should be exclusively Catholic. Indeed, three in 10 children in Catholic schools are non-Catholics. However, a point comes where the dilution of a school’s Catholicity means it loses its ethos, and it loses parental support. I will give two examples of that. In Oxford, St Augustine’s was a joint Catholic and Church of England school, but parents did not perceive it as Catholic from its admissions arrangements and therefore saw no discernible difference between it and other state schools in the area; they viewed them all as non-Catholic. Parents voted with their feet, and chose not to send their children to St. Augustine’s. The archdiocese closed the school owing to the lack of demand from local Catholics, and then founded a Catholic school called St Gregory the Great, with Catholic admissions arrangements, which remains successful and oversubscribed.
In Bromley, there is a gap in provision owing to the closure of an existing Catholic school, which Catholic parents did not recognise. St John Rigby was a small Catholic secondary school serving the local Catholic community. It became a grant-maintained school and, without the consent of the archdiocese, doubled in size, despite the fact that there was no additional demand for Catholic places. That meant that the percentage of Catholics in the school decreased massively and Catholic parents stopped sending their children there. Without support from the Catholic community the school entered special measures and was later closed by the local authority.
The faith-based admissions cap is a disincentive to the Catholic Church to set up faith schools, because it dilutes their ethos. I am sure the Minister will say that other faiths are less concerned about that. However, if a faith group establishes a school that is not oversubscribed by parents of the relevant faith or, indeed, other faiths, then the cap does not apply. Some people might be content with the working of the dilutive effect that I have described, but the experience of the Catholic Church has not been positive. The Minister might point out that the voluntary-aided route is still available, and he could give the example of the new Catholic school in Richmond, but councils are required to meet unmet demand through academies and free schools first, and funding is biased towards them. We would have a richer and more diverse set of free schools and academies if the cap were removed. It would give more parents the chance to give their children the education in values that they support.
As I said at the outset, to make choice real, we need some capacity in the system to accommodate parental demand; otherwise, we will need to turn children away. So, schools need to be able to expand. However, limited capital resources mean that only 142 of the 518 academies that applied for money from the Education Funding Agency to expand in the period June 2012 to October 2013 were accepted. In other words, almost 400 schools turned away children and their parents because of lack of capacity. I know we cannot write a blank cheque to fund the expansion of schools, but there must be something we can do to stop seven out of every 10 applications being turned down. I believe that the solution is to allow our best schools to build on their success and borrow to satisfy demand.
Schools used to be able to borrow. Cams Hill school in my constituency is a popular academy. It increased its intake last September from 210 to 240 and will take another 240 pupils this September, turning down applications from a further 30 pupils. However, in 2015, because of space constraints, it will have to revert to an intake of 210 pupils. Demand from parents will not diminish, but the school’s ability to meet that demand will. It has paid off its mortgage and in the past has borrowed money, to fund a new sports hall. It would like to do so again, so that it can permanently increase its intake to 240, but that route is now closed. The school cannot borrow.
However, things are actually not as clear-cut as that. In a written answer on 25 October 2013, the Under-Secretary of State for Education, my hon. Friend the Member for Crewe and Nantwich (Mr Timpson), said at columns 300W to 301W that, in the 12 months to 22 October 2013, 44 schools were given permission to borrow. Of those instances, 39 were for energy efficiency projects; none were to make it possible to expand. Schools can borrow, therefore—but not for expansion. Sixth-form colleges and further education colleges can and do borrow. The principal of one sixth-form college said to me that it was a vital freedom and that it enabled him to modernise and expand his provision to meet local needs.
Why, then, cannot academies and free schools borrow? According to parliamentary answers and correspondence I have had it is because the borrowing of academies and free schools would count towards Government debt and the deficit. The Secretary of State would therefore have to approve borrowing to fund expansion and, because he does not want to add to the debt, he will not do so. So how is it that sixth-form and FE colleges borrow? The explanation is that the Education Act 2011 scrapped the Secretary of State’s controls over their borrowing, and consequently the Office for National Statistics decided to take FE and sixth-form college debt off the Government balance sheet. There is a simple solution. If the Secretary of State scrapped his control over borrowing by academies and free schools, their borrowings would not count towards Government debt. Academies and free schools are already entrusted to make decisions about the terms and conditions of staff, curriculum delivery, term times and length of school day. The measure I suggest would give them another freedom: the freedom to borrow and to expand.
As the record of Cams Hill shows, schools can borrow and pay back without a problem. The record of sixth-form and FE colleges shows that they can manage their finances well. They do not fail due to financial pressures. They are subject to proper financial controls and scrutiny, as are academies and free schools. If we can trust our academies and free schools with our children’s future, why can we not trust them to borrow, so that choice becomes a reality for more parents?
I believe, as a Conservative, that we should support parents who have a clear vision of their children’s education. Parents who want to send their child to a particular school should not be held back when it is possible for their wishes to be accommodated. Popular schools should be allowed to expand, even if they have to borrow money to do so. Parents who want to send their child to a faith school should be permitted to do so, but our policy on faith-based admissions is a block on Catholics opening new schools to give parents that choice. Two simple changes could deepen the revolution in choice and standards that this Government have championed.
The Parliamentary Under-Secretary of State for Education (Elizabeth Truss)
I congratulate my hon. Friend the Member for Fareham (Mr Hoban) on securing the debate. I completely agree with him about the need for diversity and choice in our school system and how they lead to a raising of standards. Certainly, that was the outcome of a programme for international student assessment study, which shows that schools with a high degree of autonomy and accountability generally succeed in raising standards throughout the system.
As a Government, we recognise the important contribution made by Church and faith schools to the education system. Around a third of schools are Church or faith schools, and an increasing number are converting to academy status to take advantage of the freedoms offered by the academies programme. Church and faith schools are popular with parents—many are oversubscribed—and they are some of the highest-performing schools in the country.
The free schools programme represents a new approach to how schools are established and it is offering new opportunities, to groups of all faiths and none, to set up new schools in the community; 37 of the 182 open free schools are faith schools. Faith free schools and new-provision academies must be open and welcoming to the communities around them. Unlike voluntary aided schools or converted faith academies, they may only prioritise a maximum of 50% of places by reference to faith when the school is oversubscribed. Of course, if the school is not oversubscribed, more children of that faith may be admitted.
Catholic schools in particular have a long and proud history of championing high standards and extending opportunities. They consistently outperform other kinds of state schools. As my hon. Friend the Member for Fareham is aware, the Education Act 1944 brought many Church schools into the state education system, including from the Catholic sector, and we continue to benefit from that settlement today. The education landscape, however, has changed since 1944. Academies and free schools represent a new approach to creating new schools, including faith schools, and new faith free schools and new faith academies, when oversubscribed, may admit only up to 50% of their pupils according to faith.
If the Government fund new faith-school provision, it is right that a proportion of the places be available to the whole community, including those of other faiths and none. That does not mean that other places must be allocated to pupils who are not of the faith; as I mentioned earlier, they must rather be allocated according to other oversubscription criteria.
I acknowledge, as my hon. Friend pointed out, that the Catholic sector has objections to our policy on admissions to faith free schools. I know that the Catholic Education Service has been in discussion with Department officials. We remain committed to continuing our engagement with the CES, although I point out that we have no intention of changing or removing the 50% limit.
Elizabeth Truss
The quota was set so that we are able to ensure that a broad range of the community may attend those community-based schools.
On the point made by my hon. Friend about voluntary aided schools, I should say that local councils have an option, where there is oversubscription or high demand for faith schools, to set up new voluntary aided schools. The academy route does not have to be looked at first; if there is demand for faith-based education in a local area, a diocese, for example, may propose a new school outside the academy route. High demand for faith places therefore provides a diocese with the opportunity to propose a non-academy route. On funding, we ensure that funding to all schools is fair within each local area. Funding is not biased towards academies or free schools, as my hon. Friend suggested.
The point of the new academies and free schools is that they should have a broad base in the community, hence the limit of 50% on children from a particular faith when there is oversubscription. When there is strong demand for a faith school in a local area, however, the diocese can propose a new school not through the academy route; there is that option for such schools.
The second point made by my hon. Friend was about borrowing by academies and free schools. He made a good case and I acknowledge his point about further education, for example, and other types of public institution being able to borrow, but academies are restricted from borrowing without the express prior permission of the Secretary of State. The restriction is set out in the funding agreements and in the academies financial handbook.
The Department’s general position is that commercial borrowing is rarely considered to be good value for money, as the interest and finance charges are normally higher than rates available to the Government. I acknowledge, however, my hon. Friend’s point about the autonomy of schools and about the degree of freedom given to make such decisions. The result of that presumption by the Department is that permission to borrow is given only exceptionally, in part because academies are classified by the Office for National Statistics as public sector bodies. That is different from the classification of further education colleges. Any borrowing undertaken by academies therefore is also counted in measures used to calculate public sector debt.
Mr Hoban
FE colleges’ debt used to be on the Government balance sheet; once the Secretary of State scrapped his controls over their borrowing, their debt moved away from the Government balance sheet and did not count towards Government debt and the deficit. The Department can make a simple change to remove the debt from the Government balance sheet and put it into the private sector.
Elizabeth Truss
The issue is the way in which the Office for National Statistics carries out the classification, rather than the Department for Education.
Mr Hoban
I am sorry to be persistent, but having looked at the note from the ONS on the reclassification of FE colleges, it appears that one of the things that changed its view on whether the colleges’ debt should sit on the public sector balance sheet or a non-government sector balance sheet was control. When control in the FE sector was scrapped under the Education Act 2011, the ONS changed the classification and took that debt off the Government’s balance sheet.
Elizabeth Truss
My hon. Friend makes a good point, but that would require a change in our policy on academies and free schools, not specifically on borrowing, but more generally on autonomy. As I discussed earlier and as the PISA study demonstrates, there is always a balance to be struck between autonomy and accountability in the school system. The ONS says that the balance between autonomy and accountability dictates that academies are classified as public sector bodies, so any change would require amendment to the Department for Education’s legislation on the structure of academies.
The Government are committed to the careful control of public spending to bring down the national deficit and retain economic confidence. Under the status quo, in the 12 months to October 2013 five formal requests were received from academies, all of which were approved. Formal requests tend to follow an informal discussion with academies, which is the point at which most proposals are terminated.
We want good schools to have the flexibility to expand, and have taken big strides to allow academies greater financial freedoms—for example, the ability to carry forward surpluses—but we understand that academies would like to have more, particularly on borrowing. As my hon. Friend pointed out, the Office for National Statistics determines the classification of all bodies, and all academies are currently classified as central Government public sector bodies. The ONS makes decisions independent of Government, subject to international accounting standards.
My hon. Friend made the case that we should change the regulations for academies to give them more financial freedom. That debate is about the level of freedom and autonomy that academies are given and is separate from the question whether academies should be able to borrow.
This has been an extremely helpful debate. There are routes by which new faith schools can be set up with 100% admission from faith-based communities. However, new academies and free schools have a cap of 50% in cases where there is over-subscription, and we do not have any plans to change that at the moment. I am interested in my hon. Friend’s points about borrowing, and I will ask officials to look at the details of that, to see what would be required for the ONS to change the classification.
Elizabeth Truss
Obviously, we do not have schools based on social class. The question of gender is interesting. The cap is a specific measure to make sure that, as widely as possible, members of all the community are represented in new schools. There are routes by which faith-based schools can expand and new faith-based schools can be established, but the 100% route is not part of the academies and free schools programme.
Regional Arts and Culture
(10 years, 9 months ago)
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Paul Blomfield (Sheffield Central) (Lab)
It is a pleasure to open this debate, Mr Caton, particularly with you in the Chair. I am pleased to have secured it, not simply to highlight the disparity between arts funding for London and the regions, but to make the case for arts funding in general. I will argue not for regional versus national institutions, but that the whole country is strengthened by a more equitable distribution of funding.
We cannot consider the matter in isolation from wider economic trends. Last week, we saw reports that between 2010 and 2012, 217,000 new private sector jobs were created in London, whereas my city of Sheffield lost 7,500. We are clearly not alone: private sector jobs have been draining away from the north to London and the south-east. There is a direct relationship because arts funding is important not just for our social life throughout the country, but for our economic growth. The arts provide nearly 1 million jobs in the UK economy every year, and 67,000 cultural businesses contribute £28 billion a year. In addition to that direct contribution, the impact of a vibrant cultural offer has a decisive impact on those who are choosing where to invest, where to start businesses and where to study. It is hugely important.
The report, “Rebalancing Our Cultural Capital”, which was published just before Christmas, sadly contained figures showing what many of us already knew, but in much starker terms: that arts funding from the Department for Culture, Media and Sport and the Arts Council is massively tilted towards London, which received £68.99 a head compared with just £4.58 in the rest of England in 2012-13. The issue is not just about the Arts Council and the DCMS, though. Those funding imbalances form part of a bigger picture of disproportionate cuts to local authorities in the most deprived areas, and disproportionate private investment between London and the regions.
I am sure that those of us here today do not need reminding of the contribution made by the arts, but it is worth stressing that the arts shape places and communities, regenerate and energise, and invest in and develop future talent, so it is a problem if the benefits of the arts are not shared equally. “Rebalancing Our Cultural Capital” highlighted that, but the tension between funding in London and in the rest of England is not new. It was one reason behind the appointment of Jennie Lee, the country’s first arts Minister almost 50 years ago, and it was certainly behind her pioneering White Paper, “A Policy for the Arts”.
A great deal has been achieved. In Sheffield, we have some fantastic arts and cultural facilities. Last week, Sheffield Theatres was recognised as regional theatre of the year for the second year running. It welcomed audiences of almost 440,000 through its doors last year; produced 14 shows on three stages, including five world premieres; presented 72 productions by visiting companies; and transferred a new play to New York, as well as touring a large-scale play across the UK—but that success will be challenged if there are continual reductions in public funding. Public funding accounts for only 17% of the theatres’ turnover, but there is a tipping point. Further cuts would force price increases that would push our theatres beyond the reach of many local people for whom travelling to London theatres is already unthinkable. The problem is the same for our museums.
Mr Kevan Jones (North Durham) (Lab)
Does my hon. Friend agree that regional theatres are important as incubators for young talent? In the north-east, in Newcastle, Live Theatre has been a great incubator not just of acting talent, but writing talent.
Paul Blomfield
My hon. Friend makes an important point. I am well aware of the importance of the cultural offering in Newcastle, and I will return to the point about incubating young talent.
Sheffield can report great success for our museums. Museums Sheffield, which is one of our two successful museum trusts, welcomed 1 million visitors across three sites last year, 96% of whom rated the museums good or excellent—but Museums Sheffield has lost 40% of its staff since 2012. It becomes more and more of a challenge to maintain standards against that background, with a declining core grant year on year resulting from central Government cuts to local authorities.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I congratulate my hon. Friend on securing this debate. This morning, I had a meeting at the National Portrait Gallery to discuss, among other things, its work with Tyne and Wear museums which led to the excellent Trailblazers exhibition at the Discovery museum last year and the current Laura Knight exhibition at the Laing. Does he agree that, although it is great to see such working together between London and regional institutions, we need strong, regional institutions with continued funding to foster regional talent and create exhibitions that can perhaps travel to London?
Paul Blomfield
I agree with my hon. Friend, and I will return to the point she makes in the context of my experience of some of our institutions in Sheffield.
There is also under-investment in the visual arts sector in Sheffield. I am told that Sheffield has the largest number of practising artists per capita outside London, but we have limited provision for the exhibition of contemporary and visual art and do not have the resources to take advantage or to make the most of the opportunities they provide. We need to invest to reap the rewards. Our core cities provide a platform for artists on the way up: three of the four Turner prize nominees for 2013 had exhibited at Sheffield’s Site gallery in the past six years.
The Arts Council is at pains to point out that 70% of lottery funding is spent outside London, but that does not take us back even to the 2009-10 level of spend outside London, which was at 76%, and lottery funding is one-off funding. The lottery has supported some excellent capital developments, not least the stunning Persistence Works in Sheffield, but Arts Council funding has not matched that ambition with programme funding, which would enable us to animate these spaces to fulfil their potential.
Jesse Norman (Hereford and South Herefordshire) (Con)
I am grateful to the hon. Gentleman for this debate. I declare an interest as a director of the Hay festival. Does he agree that there is a difference between regional urban centres such as Sheffield, which have a distinct set of issues relating to the arts, and rural areas such as mine, where there is a need for an infrastructure to be maintained which would not exist without public support? I am thinking of Flicks in the Sticks in Herefordshire and the Monnow Valley arts centre—places that are very rural and do not have the advantages of an urban context.
Paul Blomfield
I would certainly not want to counterpoise the arts in rural communities against those in urban communities. We face different and distinctive issues. One that we face is the challenge for local authority funding, because we are facing a disproportionate hit from the reduction of local authority funding.
Richard Burden (Birmingham, Northfield) (Lab)
I congratulate my hon. Friend on securing this debate. Does he agree that one problem for regional arts is that we are being hit hard not just by a combination of local authority cuts, Arts Council cuts and so on, but by the sequencing of funding? The Arts Council operates on one set of criteria and time horizons, local authorities face another set, as does lottery funding, and the combination means we are hit by a multiple whammy. The sequencing needs to be sorted out as well as the quantum of available money.
Paul Blomfield
My hon. Friend makes an important point, and I will talk about private funding. The way in which different strands of public and private funding pose challenges for the arts is important, because it is often argued that we should look more actively for more private sponsorship of the arts. That is fine, but there too, the picture is weighted against the regions. Private sponsorship is exacerbating the problem, not solving it. In Sheffield, there are many deeply generous people, but we do not have major corporate sponsors. There is no private giving on any significant scale, not least because the London cultural organisations are hoovering it all up. In 2011-12, for example, 90% of all private giving to the arts by individual philanthropists was to London-based organisations. We need the Government and the Arts Council to redress the imbalance.
In its briefing for today’s debate, the Mayor of London’s office claimed that London needs the funds to compete with Paris, New York and Berlin, but Sheffield, too, is competing with European cities and beyond, and with decent investment, we can win. One of my constituents wrote to me with today’s debate in mind, saying:
“When friends and family visit they are always impressed by the quality of the performances in Sheffield. Often friends have never thought of Sheffield as a potential city break”—
quite wrongly—
“but after they visit they always want to come back.”—
quite rightly. It is not just London that needs tourism, and the point is that taxpayers from across the country are contributing to that London subsidy. To attract people to destinations outside London, we need action to rebalance our cultural capital. I recognise that the Arts Council is concerned with the issue, but what sort of message does it send out when the council’s 10-year strategy published in 2010 became the first public policy statement on the arts since 1965 to fail to acknowledge the scale of the imbalance in the distribution of resources?
The figures I mentioned at the start of the debate account for DCMS and Arts Council funding combined. Of DCMS direct funding to our national institutions, 90% goes to London. We can all accept the value of properly funding our national institutions—although they do not always have to be in London—but more can be done to ensure that national institutions, as my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) said, irrigate rather than drain the arts elsewhere in the country.
There are some great partnerships: Museums Sheffield has great links with the British Museum and the V&A, and there is really positive work between the British Library and our central library. I was at our Weston Park museum for the launch of the “China: Journey to the East” exhibition, which brought some of the best British Museum exhibits together with our own collection, inspirationally presented by our local team, but that was two years ago and it could not happen now in the same way, because many of the jobs have been lost.
Mr Kevan Jones
Does my hon. Friend also think that, although there are some good examples of collaborative working, there is a London snobbishness about the regions, in that there is a wish to retain certain artefacts in London? For example, the Lindisfarne gospels came to the north-east, to Durham, last year, which was a tremendous success. However, even though Durham university and Durham cathedral could adequately house them and have a permanent exhibition, there was the idea that it was somehow important that the gospels stay in London. Does he not think that moving some of our national treasures around the regions on permanent exhibition would be a way forward?
Paul Blomfield
My hon. Friend makes an important point. My suggestion, echoing that of “Rebalancing Our Cultural Capital”, that national institutions ought to do more to irrigate the system could be fulfilled through that sort of initiative.
I am conscious that other Members want to contribute to the debate, so let me turn finally to the significance of the decline in local council funding. Local authorities have borne a disproportionate burden of the cuts, and those in deprived areas more so. With less money available and increasing demands for social care and other vital services, where will money for the arts come from? Arts Council funding is rightly based on the principle of additionality, designed to add to the base provided by local authorities, but local authorities simply do not have the resources to maintain core funding at the level we need.
Angela Smith (Penistone and Stocksbridge) (Lab)
One of South Yorkshire’s great cultural assets is brass bands, as is the case in many parts of the country, but at the moment we are losing out to the strength of the brass band movement in Wales. There is certainly a discrepancy in funding for brass bands as far as the Arts Council is concerned, but local authorities, such as Sheffield, are also cutting grants to small village brass bands such as those in my constituency, because they no longer have the funds to give them. Is not our brass band movement one of the most important parts of our cultural heritage in this country and should we not do something to help it?
Paul Blomfield
I am grateful for that intervention from my hon. Friend, who is a fellow Sheffield and South Yorkshire MP. The culture of brass bands is tremendously important in our area. She describes the difficulty whereby relatively small amounts of funding are now beyond the reach of local authorities, which is pushing small cultural groups over the edge. That is a critical problem.
We are facing a real crisis in many of our big cities and in many other parts of England. I conclude with three questions for the Minister. What is he doing to convince others in Government of the threat posed to the arts by cuts in local government funding? What is the Government’s response to evidence of the cumulative impact of cuts hitting more deprived areas hardest, the lack of private investment in those areas, and the failure of public arts funding to redress that imbalance? Finally, what are the Government doing to rebalance the funding gap and ensure more equitable support for arts and culture across the whole country?
Martin Caton (in the Chair)
As Members can see, a great number of people want to contribute to the debate. I will not set a time limit at this stage, but I appeal for Members to show a bit of self-discipline. We will only get everybody in if we keep contributions from Back-Bench Members down to five minutes and I want to call the Front-Bench Members at 20 to four.
Sarah Newton (Truro and Falmouth) (Con)
It is a great pleasure to serve under your chairmanship, Mr Caton. I start by congratulating the hon. Member for Sheffield Central (Paul Blomfield) on securing the debate. It is always a pleasure to join colleagues from across the House in celebrating the huge contribution the arts make not only to our sense of well-being and pleasure, but to the economy, in the way that the hon. Gentleman laid out so well. Everyone in this Chamber and in the House will wholeheartedly recognise the huge contribution of the arts. I am delighted to have recently set up an all-party parliamentary group, along with Opposition colleagues, to recognise the huge and growing role the arts have in our health and well-being. I shall enjoy working with Members from both sides of the House on promoting a greater understanding.
I am here because I represent, in Cornwall, one of the most creative parts of the country. I am pleased to represent Falmouth, which has a wonderful arts university that this Government enabled to exist. The hon. Gentleman was right to highlight some of the statistics and on the face of it, they do not make very good reading. The south-west has 12% of the national population and contributes 20% of the gross value added, but Arts Council and lottery expenditure there is well below that. On the face of it, it looks like we are not getting a fair crack of the whip. Regions with remote, rural, sparsely populated communities such as the one I represent have to compete with great centres such as Plymouth and Bristol, so in percentage terms we probably get even a smaller share of the money. However, focusing only on those statistics does not really paint the whole picture.
Over the past year or so I have been pleased to meet our regional Arts Council representatives, who have developed a deep understanding of the challenges faced in enabling rural communities to access the arts in the broadest sense, and of the opportunities for places such as Cornwall. They have been enabling partnership working, which is key to the future, and such funding is enabling really positive changes in Cornwall.
I want to highlight two recent examples. Last year, the For Cornwall museum partnership scooped more than £250,000 from the Arts Council. It is a partnership between Falmouth art gallery, the National Maritime museum in Falmouth, Penlee House gallery and museum, and Porthcurno Telegraph museum. They have been joined by the Royal Cornwall museum, which got an additional £253,000 from the Arts Council strategic fund. In the words of the really excellent Alison Bevan, the director of Penlee House gallery and museum, who led the partnership:
“With support from Cornwall Council”—
so working with partners in Cornwall—
“we worked up a Museums Strategy for the county...The benefits of partnership working are obvious and we are trying to spread those benefits to other museums within the county. We have learned a lot from working together.”
Cornwall is well suited to such partnership working, which enables small and medium-sized organisations to work together.
Jesse Norman
I agree entirely with the powerful case my hon. Friend is making for partnership working. Our great institutions were founded on the basis of being universal—not just for this country but for the whole world. Despite the excellent work already being done by the Tate, the National Maritime Museum, the National Gallery and other places, is there not even more scope for the great collections to feed out more into rural areas? In Herefordshire, we would willingly and delightedly host a great work of art alongside the Mappa Mundi, for example, in Hereford cathedral. There is so much scope for partnership working to increase.
Sarah Newton
My hon. Friend makes an excellent case. I know from my conversations with the Arts Council that it very much has that in mind. There will be a lot more touring of exhibitions and theatre groups. As already mentioned, not only the London-based organisations will be touring the regions. We have fantastic theatre companies born and bred in Cornwall that are now touring the rest of the UK. Culture can be exported around the regions from anywhere that excellence is produced, and I understand that funds allocated by the Arts Council should make that possible. I am sure it will apply to works of art as well.
In January, we in Cornwall were lucky enough to benefit from a new sort of partnership working: the cultural destinations programme, which will make available sums of money for working with arts organisations in my constituency. We will receive more than £340,000 to build a new partnership that will add value, appeal to visitors coming into Cornwall and help us grow our local economy in a sustainable way. It will create a unique identity, promote the extraordinary cultural wealth we have in Cornwall and enable the people who live in Cornwall, as well as visitors, to benefit from increased access to the arts.
The organisation that secured the money, the Cornwall Art Centre Trust, is led by the excellent Ross Williams. He says that the huge investment in Cornwall will significantly increase the cultural engagement of visitors and those living there. As we can see from those two short examples, lots of small and medium-sized organisations are coming together, rather than competing as they have in the past. They are now collaborating and understand that by working together, they can leverage more funds into the area to the benefit of visitors and residents.
On 15 February I will be welcoming to Truro Sir Peter Bazalgette, who will accompany me to watch the English Touring Theatre’s acclaimed production of “Eternal Love”, and I will be lobbying hard for further investment in the excellent Hall for Cornwall and other arts organisations in Cornwall.
A lot more needs to be done to make sure that we attract investment into Cornwall, and we need to tackle the unfairness and some of the anomalies that have crept into our system. However, I am encouraged by the new approach taken by the Arts Council, as evidenced by the money we have received over the past two years. We will be able to grow and appreciate our arts even more in Cornwall.
Mr Ben Bradshaw (Exeter) (Lab)
Like other hon. Members, I do not want this debate to become a tit for tat between London and the regions. All of us who represent the English regions acknowledge the vital importance of London as a cultural hub and powerhouse for arts and culture. Other hon. Members have already described London institutions touring and going out to the regions, but many of our constituents in Cornwall and Devon enjoy the odd trip, if they are fortunate enough, to London to visit our wonderful museums and theatres.
The recent “Rebalancing our Cultural Capital” report revealed an imbalance in funding, and I am pleased that the Culture, Media and Sport Committee, of which I am a member, agreed to my request to hold an inquiry into this issue. We hope to do so and to report in the next few weeks. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) has made absolutely clear, it is not only Arts Council and lottery funding that are a problem. The imbalances combine with the much bigger challenge, which he pointed to, of raising private and philanthropic support in the English regions. Compared with London, where huge financial services companies and others are based—they get the kudos from supporting the Royal Opera House, for example—we in the regions do not get the same capital and funding support from the private sector, however hard we try. When we put that together with local authorities’ withdrawal of support for arts and culture, we have a really serious imbalance.
I am sure hon. Members are aware that unitary and upper-tier authorities are in the process of deciding their spending priorities for the next three years, following the announcement of their funding in the next comprehensive spending review period. Some are already issuing dire warnings about having to retrench and fund only services for which they are statutorily responsible. As we all know, that would mean great peril for the arts and culture in many parts of our country. I am sure we all acknowledge the difficult economic climate the Government face, having had to extend their austerity programme, but I am sure the Minister and his Secretary of State are aware of the invaluable contribution to the nation’s well-being and to our economy that a flourishing arts and cultural sector makes. They will doubtless be making those points forcefully over the next months to the Treasury and to Government colleagues.
The symbiotic relationship between arts and culture, and social and economic well-being, is extremely visible in my own constituency of Exeter. One of the reasons why Exeter has become such a desirable place to live and work, and for businesses to relocate to, is the rich, attractive and varied culture we can offer. From our national award-winning museum to the sharp, edgy and award-winning Bike Shed Theatre, we have built up in recent years a cultural capital that attracts and keeps young talent and thrills and entertains residents and visitors. That is recognised by my forward-looking local authority, Exeter city council, which, despite suffering big cuts in funding from central Government, has managed to sustain its support for arts and culture in Exeter. That is in stark contrast to nearby Somerset, for example, which ended all support for the arts after the Government’s first round of cuts.
That leads me to the two requests I want to make to the Minister. The first is that he and his Secretary of State should use their offices over the next days and weeks to remind local authorities, as they face tough spending choices, of the value and importance of arts and culture. The leader of Devon county council, for example, has recently issued a warning about having to pare council spending down to mere statutory requirements. We do not want any more councils going the way of Somerset. We want more to learn from the example of Exeter. A further round of savage cuts in local government support will tip a lot of excellent and valued cultural organisations over the edge.
My second plea, through the Minister to the Arts Council, is that it use its funding clout to encourage local government to do the right thing. The Arts Council inevitably comes under huge pressure to step in, in areas where local government is withdrawing support, to ensure the survival of at least some cultural footprint. But I am afraid that—if that is what happens everywhere—all that would do is give the green light to philistine local authorities that want to withdraw support, giving them the impression that the Arts Council will simply step in and replace the funding. A far more sensible approach would be for the Arts Council to base funding decisions, where possible, on continuing support from local government. That would reward good councils such as Exeter and deter bad ones such as Somerset.
Finally, like the hon. Member for Truro and Falmouth (Sarah Newton), I welcome the commitment by Sir Peter Bazalgette, the new chairman of the Arts Council, to look again at the regional imbalance identified in the “Rebalancing our Cultural Capital” report. I look forward to his visiting Exeter later this month and to showing him—perhaps on his way to Cornwall—how the combination of a visionary local authority and a strong arts scene can create a virtuous circle from which our whole community benefits, even in these straitened times.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
It is a great pleasure to contribute to this debate, and I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing it. Arts and culture add to our quality of life, and we all recognise their importance at a national and local level.
Arts and culture already have a vibrant presence in the regions, and some arts initiatives do not require any commercial support. I pay tribute to the investment made by TV companies such as ITV and Channel 4, and by the BBC, which continues to fund productions by independent companies. I might also mention Glyndebourne, which manages to be rather successful without a single penny of subsidy, or the extraordinary Melvin Benn, who brings the greatest of modern culture to places around the country—including my constituency, where he stages the wonderful Latitude festival. Of course, I recognise that much of the arts requires substantial support from the public purse, or from the pockets of the public via funding redirected from their purchase of lottery tickets. I value the contribution that the lottery makes to bringing a wide variety of culture to large parts of the country.
I want to recognise the extraordinary cultural legacy in my constituency of a gentleman called Benjamin Britten, the centenary of whose birth we celebrated last year. In my constituency, we have sustained his extraordinary legacy, which has involved children and world-class artists. On 22 November, the centenary of Benjamin Britten’s birth, we held an event called Friday Afternoons. It is estimated that 100,000 children from around the world contributed to that celebration of probably one of the greatest ever British composers. In that vein, I will give a quick plug for the director of Aldeburgh Music, Jonathan Reekie. He has served with great distinction, and I want to thank him. He was recognised in the Queen’s birthday honours last year and is moving to take up the leadership of Somerset House in London. That will be a great loss for our regional arts and culture.
Other institutions that have been recognised by the Arts Council include Red Rose Chain and Eastern Angles. If anyone wants to visit the east of England, I urge them to come and see an Eastern Angles production, because they will be blown away by the creativity achieved on budgets that are, to be blunt, not very large. The Arts Council has made more money available to the regions, although I recognise that it is nowhere near as much as is available in London.
I completely endorse the comments from the hon. Member for Sheffield Central and the right hon. Member for Exeter (Mr Bradshaw) about how much more challenging it is to get philanthropic donations outside London. I hope that the Government take that on board. I was particularly pleased to see the autumn statement building on the great work that has been done on tax credits for film and high-quality TV—that has, by the way, led to a great renaissance in Northern Ireland, with the production of “Game of Thrones” and the development of the film and television industry in Belfast—by committing to launching a consultation this spring on the introduction of a tax credit to support regional play writing, which would benefit theatres that commission new work.
I turn to local government. The right hon. Member for Exeter is right that we should support creative local governments and say, in a pantomime fashion, “yah-boo” to the baddies—the philistines of local government. I do not want to be too political about this, but when certain councils announced that they would cut every penny of funding to libraries or the arts, there was a risk of shroud-waving. Councils around the country have recognised that investing in the arts locally is as important as investing in new roundabouts. In Basingstoke, where I used to work, the council took a decision in the ’60s to do something about that to attract businesses. The council recognised that Basingstoke needed a cultural offering to encourage executives to locate there and to make the town feel good about itself. I commend councils that have continued to recognise the importance of arts and culture funding.
Returning to central Government, I applaud the work done to try to secure the status of European city of culture. I congratulate Hull on winning city of culture this year; we know how much good that designation has done for Derry/Londonderry during the past 12 months. I also want to say “well done” to Alan Davey from the Arts Council. I was on the Culture, Media and Sport Committee at the start of the Parliament, and there was a deep intake of breath when it became clear that things would not be done as they had been before. I think that the Arts Council has done extraordinarily well. By focusing on quality rather than simply spreading money around, it has improved the quality of the offering available around the regions.
I want to celebrate what is happening in the arts and culture outside London. I recognise that there will always be a case for national funding, but we must encourage Sir Peter Bazalgette and Alan Davey to continue to think about those of us outside the M25. Long may culture and the arts rule!
Alison Seabeck (Plymouth, Moor View) (Lab)
It is a pleasure to follow the hon. Member for Suffolk Coastal (Dr Coffey) and listen to her talking about the success of the Britten anniversary, which I think most people in this room appreciated. I thank my hon. Friend the Member for Sheffield Central (Paul Blomfield) for securing the debate, because clearly there is a great deal of concern, across parties and around the regions, about the matter that we are debating.
I want to talk particularly about Plymouth. The city is home to one of the nine largest independent theatres in the country, which puts on some amazing productions. It is extremely concerned about the ever-widening gap between London and the regions and the serious financial imbalance that exists; London is assigned 14 times as much taxpayer money per head as the rest of England. As a Londoner, I also acknowledge that there has been a skewing of funding from some of the bigger institutions in the centre of London to those in the outer areas.
Institutions such as the Queen’s theatre in Hornchurch or perhaps even Greenwich theatre might make a case for revisiting the way in which funding is distributed. Will the Minister tell me—I genuinely do not know the answer—whether any detailed work has been done recently to look at all the individual funding streams and investigate whether investment in those areas resulted in economic growth? I was pleased to hear from my right hon. Friend the Member for Exeter (Mr Bradshaw) that the Culture, Media and Sport Committee is going to do some detailed work on that. It is important that we understand better exactly where money is going in the regions and what the outcomes of such investment are.
Who is served by the arts and cultural events put on in Plymouth? Apart from Plymouthians, the evidence shows that the audiences who visit our theatres come from a vast rural hinterland that extends to Exeter, into Cornwall and beyond. Those visitors often stay overnight, which also helps our local economy. Audiences find that going to Plymouth is much better value for money than buying an expensive train ticket to London and a very expensive ticket to an event, for which they may almost need a bank loan. People in Plymouth simply cannot afford to do that. Cornwall is recognised by the EU as one of the most deprived regions in the UK, if not in Europe. It is unfair to isolate our region as the current arts funding set-up does, and I agree with all colleagues in the room that the matter really needs to be looked at again.
The transmission of live events on big screens and in cinemas has been a wonderful way of bringing live performances out to the regions and even into poorer parts of London. It has given people a way to see, for example, the Royal opera or the ballet. It is not the whole answer, however; it is something of a halfway house, and people would like to see the real thing.
As we have heard, the impact of cultural development on an economy is significant. We can see that by looking at what has happened in Gateshead or Glasgow, or with The Lowry in Salford. In Plymouth, we are looking at setting up a new cultural centre in the former civic centre, and a bid has been placed with the Arts Council for the necessary funding. That development would create international contemporary arts studios, independent film options, theatres of different sizes and outdoor festival performance space. That is a really exciting potential project that I hope the Arts Council will look at sympathetically, not least because 4 million tickets are sold for just those nine large regional theatres, as compared to 13 million in London. That is not an insignificant amount, but we could certainly do better. The regional theatres are faced with London’s getting 90% of philanthropic donations and 70% of business sponsorship. The match funding imbalance, which so many Members have already touched on, is significant.
I am afraid that I must come back to the cuts and the potential impact on Plymouth. I want the Theatre Royal, the Drum theatre, the Barbican theatre, the Plymouth arts centre and our museum to flourish. I want visitors to come, and to see our city as a real cultural treat. It was the home to Beryl Cook, Joshua Reynolds and Robert Lenkiewicz. We have a thriving college of art and design that is seeking to become a university—fingers crossed on that. We have production companies such as TwoFour productions, and a rehearsal space at TR2 used by west end productions. That is obviously one benefit of having links with London, which my right hon. Friend the Member for Exeter touched on.
Our city council is facing swingeing cuts. It took the bull by the horns and has not thus far dug into the arts and leisure budget as much as other councils have. Instead, it bid to be UK city of culture. I am delighted that my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) is here and I wish her city well for 2017. The leader of Plymouth council, Tudor Evans, felt that making our bid was the right thing to do. He said publicly that it would be an abdication of the council’s duty
“to readily accept its (Plymouth’s) cultural decline”
as a result of the cuts. That is absolutely right, but since he will have to find a further £60 million over the next few years, he will be pushed harder than ever simply to manage his core services.
The screws are being turned on Plymouth and on other local authorities, so I urge the Minister to consider fully the report, “Rebalancing Our Cultural Capital”, as well as the recommendations of the Select Committee.
Martin Caton (in the Chair)
Order. If we are to hear everyone speak, we need speeches to last less than three minutes, with no interventions.
Sir John Randall (Uxbridge and South Ruislip) (Con)
I am delighted to serve under your chairmanship, Mr Caton. I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing this debate. He introduced it well. I may not be the popular perception of a luvvie, but my great-grandfather trod the boards at Covent Garden and, as Members would have heard during the pre-debate banter, I have two sons—one an actor and the other in training, both at the Royal Central School of Speech and Drama. I have been to many small arts centres and theatres around the country, following my elder son, Peter, to see how things are going on, so I have a bit of perspective.
I agree with most of what has been said so far. I must say that some things that have been mentioned in relation to the cuts are not new. I can remember one of the first things I did when I came to Parliament was to go on an all-party delegation to the Arts Council—probably in 1998—to try to save the D’Oyly Carte theatre, which was about to go under. Luckily, Lord Bishop stepped in to save it, and I believe that it is still doing very well, which is a great delight for fans of Gilbert and Sullivan such as myself.
We have heard about how productions move out of London, and that applies to exhibitions and orchestras as well. It is also absolutely true that some very good performances by companies and orchestras outside London should appear in this city, and they do. I take the point made by the hon. Member for North Durham (Mr Jones), who I think has just departed, about the Lindisfarne gospels. If an area has a particular relic or artefact that relates to it, that will be treasured a little more than all the other riches we can find in museums. There is obviously a limit to that, because we want national collections, but some movement could take place.
Other things encourage the arts as well. We have lots of US film production companies over here because of the tax breaks. The locations are not just in London; they are filming all around the country. That inspires people. There is also a lot going on in the regions. It is not just about theatres in regional centres, or those in rural settings—there is a whole load. I have been to lots of small theatres and arts centres. Some of them are good; some are excellent. Some struggle with some of the performances; some do not.
It is most important that, to encourage people to go to such places, we ensure that our young people are interested at an early age. They must not see theatre, music, dance or whatever as being elitist. That is why I would recommend that the Minister speaks to some of his colleagues in the Department for Education and elsewhere to ensure that such arts are not forgotten. We have heard that the arts are often the first to suffer cuts because they are not at the front line. I would say the same about education. People must learn the value of these things. If we put money into them now, we might not have to subsidise them in future because they will be self-sustaining.
Finally, we must also remember that the arts are not just about pleasurable experience. I have found that some theatre productions, films and satire put across an argument much more strongly than what we say in this place with our brilliant oratory. I finally decided that I was going to vote against the Iraq war when I saw Rory Bremner on the television, because the satire made me realise how absurd the idea was. My current crusade on modern-day slavery is well served by audiences seeing the reality of things rather than simply reading bland things in newspapers.
Mr Gordon Marsden (Blackpool South) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate. He has really shone a light on the disparities in regional arts funding. My constituency, Blackpool, has attracted under £1 million from the Arts Council over the period covered by the report, compared with the £23 million granted to London. Seaside and coastal towns such as Blackpool are often on the periphery, but there can be a determined focus on funding issues, such as occurred in the mid-2000s. Along with other MPs from seaside and coastal towns, I put points very strongly to the Heritage Lottery Fund regarding seaside parks and public spaces.
How we define things such as arts and culture will vary enormously, but for me they are about performance, the visual, the oral, the written and heritage. The north-west is a rich crucible for each of those; one has only to think of art at Port Sunlight, Anthony Gormley’s men on the beach at Crosby, the Liverpool poets, L. S. Lowry, the Hallé orchestra and Carol Ann Duffy—I have made my point.
Blackpool, in the north-west, is a paradigm for how those things can be done not just locally but opened out to all sorts of people across the country. Over the past 15 to 20 years, Blackpool has reinvented itself for the 21st century. We have done so via regeneration; via the development of the seafront and the public realm; by promoting public art such as the glitter ball; through works of art featured in St John’s square; and through the reinvention of the town and the winter gardens. All that was done through funding from the last Labour Government, the regional development agencies and Europe, with the co-operation of the council.
We have created new headlands with European money, especially the tower headland, and we have had major new art exhibits such as the Comedy Carpet, which celebrates the theatrical and showbiz history of Blackpool. We have the Grundy art gallery and the Carnegie library, which have fantastic local history collections, including the Cyril Critchlow collection of playbills. That was part of a determined programme of physical and cultural renewal. Those Members who have not recently been to see how the winter gardens have been restored to splendour or the major renewals to the tower are welcome to do so.
Throughout the process, the local authority and local bodies have played a crucial role in the vigorous pursuit of collaboration with the Victoria and Albert museum and the exchange of ideas and initiatives with York, and they have contributed significantly to the injection of cultural elements into the regeneration programme. For example, FYCreatives, funded with money from the Government’s local enterprise growth initiative, has design and art, and gallery space. There are initiatives in the centre of the town and I pay tribute to council officers and to the cabinet member for tourism, Graham Cain, and the leader of the council, Simon Blackburn. He, in particular, has put the heritage issue on the front foot.
The Civic Trust has been a major force for highlighting heritage. We have had incredible community support for oral history, and there is a marvellous war memorial in the town, supported by the Royal British Legion and the Comrades Club. There is a range of different things, but we depend on good bids being made to unlock the available funds. That is the reason, in crude terms, why we have failed to draw funds into Blackpool. Others have pointed out the same thing. The good work done in the community includes Wordpool, a literary festival that reaches out as an alternative for children and young people, the Fylde coast dance initiative, and in the next couple of weeks the Showzam project in the centre of the town—a display of circus, magic and new variety—as well as the illuminations themselves. All those things are magnets to bring people into the town, but we need support to succeed, and to make a reality of Blackpool’s heritage plans, including the excellent suggestion for a new museum of popular culture and the seaside, which has gone to the Heritage Lottery Fund.
Places such as Blackpool do not need a handout; they need a leg up, from Arts Council England, from Departments, in recognition of the scale of the cuts, and from the Minister, whom we need to fight our corner.
Bob Blackman (Harrow East) (Con)
I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing the debate. I note what the right hon. Member for Exeter (Mr Bradshaw) said, and unfortunately much of the debate portrays the issue as a battle between London and the regions. In reality, there are two aspects of the matter to take into account when decisions are taken. First, the arts and the creative industries are part and parcel of people’s quality of life; secondly, there is the question of promoting growth and enterprise. The simple fact is that 63% of people who come to this country as tourists come to London first, so it is only right for there to be investment in London, to encourage growth and prosperity.
Bob Blackman
As I was saying before the Divisions, the key to economic growth is investment. Given that, what has been said about investment in London must be corrected. In “Rebalancing Our Cultural Capital”, the Mayor of London clearly states that the per capita spending in London for arts lottery funding in 2012-13 was £17.26, not the £86.40 that has been cited. We must have the correct facts and figures, so I look to the inquiry by the Culture, Media and Sport Committee to ensure that we have the right figures before we move forward. The subsidy in London is the lowest of any part of the country, and that needs to be understood.
I used to serve on the London assembly as deputy chairman of the Economic Development, Culture, Sport and Tourism Committee. In 2007, I commissioned a report on the state of theatres in London, and I am told that it is still the definitive report on the requirement for funding of theatres to encourage the creative industries in London and the creative culture that promotes so much of London’s tourism. Actually, very little spending is needed to enable many of London’s theatres to prosper, grow and bring in private sector funding. That needs to be addressed.
David Mowat (Warrington South) (Con)
Even if the Mayor of London’s figure is right—personally, I do not think that it is, so I too look forward to the Select Committee’s report—the funding level in London is four to five times more than that in the English regions. How can that possibly be defended?
Martin Caton (in the Chair)
Order. Before the hon. Gentleman replies, I remind Members that we need to keep our contributions down to something like three minutes and interventions will probably prevent us from doing that.
Bob Blackman
Thank you, Mr Caton.
In answer to my hon. Friend, the key is driving economic growth. The reality is that the creative industries in London account for one in 12 jobs in the UK and one in eight jobs in London. The point is that if we invest in London, we will create faster economic growth for the long-term benefit of the whole economy. The creative industries in this country are worth £71.4 billion, which is a huge amount of money. If we want to see investment, it must take place in that sector.
The Communities and Local Government Committee, on which I sit, is conducting an inquiry at the moment on devolution of funding, not only to London but to other cities and regions. With devolution comes responsibility, and I take the strong view that when the Arts Council or any other grant-awarding body is giving out money to invest in the creative industries—the arts, the culture or any other creative area—it should be done hand in hand with matched funding from local authorities, to ensure that we maximise the amount of money available. We talk about devolution to local authorities and beyond; with devolution comes the responsibility to invest in arts and culture, and not to say, “We’ll decimate the arts and culture, and we’ll invest in other areas.”
I think we have to be clear that this should not end up as a battle between London and the regions. The opportunity is there to invest in the creative industries in both London and the regions. We have to ensure that the facts and figures quoted by all hon. Members are correct.
Alex Cunningham (Stockton North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton.
A remarkable milestone in the cultural heritage of my Stockton North constituency will be reached this August, when Billingham international folklore festival marks its 50th anniversary. The festival started with an Irish dance troupe dancing in the town hall, run by the late Phil Conroy, and we now have an internationally renowned event with a rich blend of the traditional and the contemporary. I hope that hon. Members from all parties accept my invitation to join us between 8 and 16 August, but if they cannot, they can instead come to Stockton between 31 July and 3 August, when Stockton international riverside festival takes place, showcasing the best in small and large-scale street theatre.
I do not apologise for making a pitch for those two events, which with other arts groups, including our fabulous ARC centre and Tees Music Alliance, have taken the widest range of cultural experiences to the widest possible audience. Yes, we have had tremendous success in arts and culture. The last time I had a debate in this Chamber, the Minister mentioned the richness he had heard about. Of course, much more could have been done in the north-east if the region had a fair share of the massive pot that is available for arts and culture.
The north-east is more typically associated with shipbuilding and manufacturing than with the arts, but the people in the north-east have a real passion for the arts. Since the late 1990s, the region has had budding significance in the creative industries, spurred by the finances made available under Labour and the regional development agency, as well as from the European Union and national lottery funding. A clever combination of investment and foresight has resulted in the north-east, one of Britain’s poorest and most deprived areas on many measures, establishing some of the finest creative arts infrastructure in the country. For instance, we not only boast international attractions, such as the Baltic Centre for Contemporary Art and the Sage Gateshead concert hall, but national and regional establishments, such as ARC in Stockton and the Middlesbrough Institute of Modern Art.
Despite all that, ease of access to the arts remains far from fair for the regions. Some two thirds of the population live beyond the reach of the productions and collections of the so-called national cultural organisations, and three quarters of decisions on arts funding are taken centrally rather than regionally—a proportion that continues to climb. There is another aspect to this: the vast majority of money spent on the lottery tends to be spent in poorer areas, but they do not get their return from the national lottery. They have a higher proportion of spend and, as a bare minimum, they should be getting a return on that investment.
I shall talk in the few seconds I have left about arts for ordinary people. The ARC in Stockton is a multipurpose cultural venue with hundreds of events a year. In a single year, it hosted 230 professional performances and 80 community performances, engaging more than 110,000 visitors. A hundred artists are employed to provide 1,000 creative learning opportunities, enjoyed by more than 14,000 children, young people, adults and older people. That is what the arts are about—not just fancy museums and opera houses in London. but what is actually happening out in the regions. It is time that we had a fairer share of the money that is available.
Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)
It is a pleasure to follow my hon. Friend the Member for Stockton North (Alex Cunningham) in the debate. Let me quickly put a word for opera houses in London, of which I am very fond.
It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on the way he introduced this well attended debate, which has struck a chord with hon. Members from all parties. It is striking that every hon. Member who has taken part has made the good point, which I endorse, that this debate should not be about London versus the regions.
I was not surprised by the findings of the report, “Rebalancing our Cultural Capital”. It is right and proper that particular funding is provided to important institutions of national and international standing and it is logical that those will be located in the capital, but that point only goes so far. I was genuinely surprised by the extent of the funding and the ratio of £69 per head spent on the arts from all sources in London, compared to the £4.60 for the rest of the country, a ratio of 15:1, or 14:1, as my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) said.
I welcome the Select Committee inquiry. If these figures are contested by the Mayor of London or the hon. Member for Harrow East (Bob Blackman), or whoever, it is right that the facts are established, but I suspect that this report will not be far off the mark. Its authors have reflected carefully on the implications of their finding and have come up with a number of modest, sensible, workmanlike proposals. I hope that the Minister agrees at least to consider them and see if they are workable. The report recommends that, of the different funding streams administered by the Arts Council—the money from the Department, the Arts Council and the national lottery—the national lottery segment is hypothecated, at least in part, to a specific fund dedicated to the non-London part of England; in other words, to regional arts.
When one takes into account the private sector funding, 82% of which is spent in London, with the remaining 18% spent in the rest of the country, the thrust of the expenditure pattern is all too clear. The proposal in the report is modest and is all the more justified when we look at who is contributing into the lottery. Some 56% of households in the north-east region play the lottery. In London, the region with the lowest participation in percentage terms, 32% of households play the lottery. So it is possible to win the lottery without playing it: all you have to do is move to London. If the figures in the report are right, it is fair to find some way of altering the balance.
Let me make a plea for the north-east. We were able to get the Sage, one of the most wonderful concert halls—similar to the symphony hall that the people of Birmingham have—which is acoustically accurate and designed for the performance of great music, but it costs money to bring orchestras of worldwide distinction to venues of this kind and to the north-east of England. If we could have a little fund that would make up the difference between the amount of money that one can reasonably get from the sale of tickets and the cost of providing the orchestral concerts, that would go an enormous way to bringing the Sage building back to its original intended purpose and would boost the arts in the north-east of England.
Dame Tessa Jowell (Dulwich and West Norwood) (Lab)
It is a pleasure to follow my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown). He has laid down a powerful challenge, because this debate, and therefore its conclusions, falters on the uncertainty and ambiguity of the figures in two respects. He has made the point about the lottery, but when the claimed discrepancy between London and the rest of the country is interrogated, it does not take account of the postcode distribution of those figures. A cultural institution based in London but doing a lot of performance and so forth outside it will still count against the London tally.
I say to the Minister that there is a pressing need for figures that Members can have faith and confidence in. That would begin to deal with this sense that London is being set against the rest of country, when in fact its great cultural institutions are interdependent with those in other parts of the country.
I feel very proud of the previous Government, of which I was a member, for many reasons. One is the funding of regional arts and the restoration of funding for regional museums.
My second point, which the hon. Member for Hereford and South Herefordshire (Jesse Norman) also made—unfortunately, he is not in his place—is that the figures are misleading. He has a rural constituency and therefore has an interest from that perspective. The regional nature of the figures means that the allocation to rural areas is subsumed in an overall regional average that is heavily dominated by cities such as Manchester, Liverpool, Birmingham, Newcastle and Leeds.
Today’s debate, for which I thank my hon. Friend the Member for Sheffield Central (Paul Blomfield), is a welcome and important starting point, but we need an undertaking from the Minister that he will improve the quality of the data. To coin Jennie Lee’s phrase, the role of an arts Minister in relation to the arts community is money, policy and silence, but I think it should be money, policy and silence—but better figures.
Martin Caton (in the Chair)
I call Kerry McCarthy, but I have to ask her to resume her seat by five minutes past 4 so that the wind-ups can begin.
Kerry McCarthy (Bristol East) (Lab)
I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this debate. It is a great pleasure to follow not one but two former Labour Secretaries of State for Culture, Media and Sport, my right hon. Friends the Members for Exeter (Mr Bradshaw) and for Dulwich and West Norwood (Dame Tessa Jowell). It is very good that they have turned up to speak.
I will not spend a lot of time paying tribute to Bristol’s arts and cultural scene and creative industries, which are well known. Bristol has everything from the natural history unit to Aardman. We had the “Gromit Unleashed” exhibition, if I can call it that, in the city last year. There were some 80 Gromits dotted around the city centre, and more than 1 million visitors came. People came from Japan to take pictures of themselves with the Gromits, which shows that Bristol does not always do things in the established way. There is a big counter-cultural scene in Bristol, which for the most part operates outside the realm of Arts Council funding and is probably happy doing so. The Banksys of this world, for example, have no need for anyone’s money except their own these days.
As we have heard, arts in the regions have been disproportionately affected by cuts to arts and culture. The Bristol Old Vic’s artistic director Tom Morris described it as a “triple whammy” of national cuts, local cuts and the greater difficulties that places outside London have in getting philanthropic funding. We know from research published by the shadow Secretary of State for Communities and Local Government that the most deprived local authorities have suffered a disproportionately large share of funding cuts, which has a knock-on effect.
Yasmin Qureshi (Bolton South East) (Lab)
Does my hon. Friend agree that there is a similar situation in many constituencies? In Bolton, the crescent building, which has a museum, a library and an art gallery, has had to make 25 people redundant and sell 36 pieces of art so it can survive.
Kerry McCarthy
Cuts have a cumulative impact. Not just the Arts Council cuts but other cuts are having a real impact. The artistic director of the Nottingham Playhouse has said that cuts will particularly affect the theatre’s ability to commission new plays. He concluded that cuts are
“about centralisation....loss of identity and undermining of the regional voice”.
In the limited time that I have left, I will focus on the fact that not all parts of Bristol benefit evenly from Arts Council funding. We have talked about the discrepancy between London and the regions, but there is a discrepancy even within Bristol. None of the 15 national portfolio arts organisations in Bristol, which share the £4.3 million grant in aid that goes to the city, are based in my constituency of Bristol East. Of the 79 projects in Bristol supported by the Arts Council through its national lottery-funded grants for the arts, only four are based in Bristol East. That is partly because the city centre is home to historical and cultural buildings and activities, but we need to consider how we can use arts funding to take things out to the communities, and to bring the communities into the city centre, too. There is a divide, and many people do not feel that they share in the artistic spoils of Bristol in the way they should. I have been approached by the Arts Council’s south-west office on precisely that issue. We met a couple of weeks ago, and I am reassured that the Arts Council is committed to ensuring that Bristol’s imbalance is addressed.
Helen Goodman (Bishop Auckland) (Lab)
It is a pleasure to serve under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Sheffield Central (Paul Blomfield) on securing this very important debate, which has been attended by 16 Labour Members.
One of the pleasures of holding the arts portfolio is being reminded of the excellent quality of the arts across the country. My right hon. Friends the Members for Exeter (Mr Bradshaw), for Newcastle upon Tyne East (Mr Brown) and for Dulwich and West Norwood (Dame Tessa Jowell) and my hon. Friends the Members for Plymouth, Moor View (Alison Seabeck), for Blackpool South (Mr Marsden), for Stockton North (Alex Cunningham) and for Bristol East (Kerry McCarthy) have all attested to that fact. Nobody can doubt the quality of regional arts, the audience for regional arts or the talent that comes from regional arts, so we need to ask why there is such a funding disparity.
Much has been made of the independent report “Rebalancing Our Cultural Capital”, which found that Londoners get nearly £70 a head and the rest of the country gets £4.60 a head, a ratio of 14:1. The report’s figures do not include the spend on the Cultural Olympiad or the millennium dome, but they have been questioned this afternoon. Obviously one would expect more money to be spent on national institutions, which tend to be in capital cities. The National Gallery is bound to cost the taxpayer more than the Walker art gallery. Equally, it is true that some of the work undertaken by the national institutions directly benefits the regions, such as the National Theatre’s streaming of “Richard II” to cinemas across the country and the British Museum’s portable antiquities scheme. Given the questions, though, it is disappointing that, three months down the track, we have not had a clear analysis from Arts Council England showing the proportion of the benefits of spending that falls in London and the proportion that falls elsewhere, which would inform the discussion.
Even on the analysis that Arts Council England has provided, the picture shows a serious problem. Over the five years between 2010 and 2015, some £2 billion of public money will be spent on cultural institutions in London, excluding the British Library. The direct spend of the Department for Culture, Media and Sport is £447 million, of which 90% is in London. In a series of parliamentary answers to me, the Minister has not justified the rationale for that support. It is an accident of history that the Liverpool museums and the Geffrye museum are nationally supported while the Laing art gallery in Newcastle and the Dulwich picture gallery are not. When people learn that Arts Council England supports 77 performing arts organisations in London but only seven in the north-east, it is clear that the imbalance is not just about a handful of elite institutions.
Arts Council England says that grant in aid funding is £22 a head in London and £8 a head elsewhere. As hon. Members have said, how can it be right that people in the east midlands and the east of England get only a fifth of what Londoners get and that the east midlands, a region of 6 million people, has no major partner museum? The lottery spend under Arts Council England’s control tells a similar story: £12 per person in London compared with £2.99 per person in the west midlands and £2.78 per person in the north-west—in other words, less than a quarter.
Arts Council England seems to think that it is some sort of triumph that just 31% of the lottery funding that it distributes was awarded to London’s institutions. That seems less commendable when one discovers that London accounts for only 10% of lottery ticket sales, whereas people in the north-east get 3.6% of the spend but pay for 7.6% of lottery tickets. The authors of “Rebalancing Our Cultural Capital” suggest that the rebalancing should begin with the lottery money. We need a proper audit of what is going on, taking account of DCMS support, Arts Council England grants, Arts Council England-distributed lottery funding and the Heritage Lottery Fund.
It is notable that HLF’s distribution matches the population far more closely than Arts Council England-distributed lottery funding. London, with 15% of the population, gets 19% of the spend. The east of England, with 11% of the population, gets 10% of the spend. Yorkshire and Humber’s 10% of the population is perfectly matched with 10% of the spend. That proves that it can be done and suggests that there is a relationship with the institutional structures of the organisation. The Heritage Lottery Fund has a far more rooted, regional approach to decision making.
One thing I find worrying is this statement in the Arts Council briefing:
“The Arts Council cannot make up the shortfall and we want to work with local authorities who continue to value and invest in arts and culture”.
At first blush that seems reasonable, but then one takes account of the disparate and unfair funding settlements meted out by the Government to local authorities. Liverpool and Hackney, which are among the 10 most deprived local authorities, are seeing 27% reductions in spending power, while local authorities in Surrey, which has some of the 10 least deprived, are seeing 1% increases in spending power. In the real world, cash does not equate to commitment, whereas on the Arts Council model, despite having seven museums, a major orchestra and being the home of the Beatles and Daniel Defoe, Liverpool’s funding might fall and Surrey would become the most cultivated county in England.
Furthermore, the Arts Council proposed to take local authority investment into account in Manchester and Middlesbrough, but not in Kensington and Chelsea, which puts no money into the V and A, or in Westminster, home to the National Gallery and the National Portrait Gallery, which has just axed its entire arts budget, despite all the cultural and economic benefits that flow to local communities from being home to those magnificent institutions.
Normally, public subsidy goes where the market fails, but that cannot be said for the arts. London has the largest population of the well-heeled middle classes, the most tourists and the most philanthropists. I am delighted that the Minister, in partnership with the Wolfson Foundation, has spread money across the regions, and I am not cynical enough to think that the Bowes Museum in my constituency has had a particularly large grant because it is the seat of the shadow Minister—it is obviously because it has the best collection of European paintings between London and Edinburgh—but will the £4 million make up for the discrepancy in the philanthropic spend per head? I doubt it. In London, the spend per head was nearly £60, but in the midlands it was only £1.83.
I end with one simple question for the Minister. He cannot continue to hide behind the Arts Council’s skirts. He has totally failed to persuade the Secretary of State for Communities and Local Government of the need to take account of the value of the arts in local authority settlements. Can the Minister persuade the Arts Council to take radical steps to reverse that trend? If he does not, we will see an existential crisis outside the M25. In Somerset, the Brewhouse closed; in Darlington, the arts centre closed; and, in Richmond, the Georgian theatre is at risk. The losses will be felt not only now, but for many years ahead as young people across the country lose the stimulation and opportunities provided by the arts.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr Edward Vaizey)
I am grateful for the chance to respond to this important debate, and I congratulate the hon. Member for Sheffield Central (Paul Blomfield) on securing it. It was apposite that during the debate, an e-mail arrived in my inbox from Sheffield Theatres inviting me to the premiere of “The Full Monty” at the Noel Coward theatre on 25 February. “The Full Monty” began in Sheffield a year ago and has since successfully toured what we call “the regions”—that is, the rest of the country outside of London. That is a good example of how theatres outside London continue to produce high-quality productions for the enjoyment of people living outside London.
I think Members in all parts of the House can agree that we have had a good debate. The hon. Member for Stockton North (Alex Cunningham) pointed out that the last time we had a debate on the regional arts, hon. Members could not resist telling the House about the thriving arts organisations in their constituencies. The paradox in a debate such as this, when the message is that the arts and the arts outside London need more money, is that most of the messages we hear are about thriving arts communities outside London.
Mr Vaizey
Exactly. That is the theme: arts funding is doing very well, but it could be better. We have had some fantastic contributions. My hon. Friend the Member for Truro and Falmouth (Sarah Newton) talked about north Cornwall museums benefiting from the support of the National Maritime Museum. Two former Secretaries of State—the right hon. Members for Exeter (Mr Bradshaw) and for Dulwich and West Norwood (Dame Tessa Jowell)—spoke in the debate. The right hon. Lady said that the figures perhaps did not give the full picture of how London and the regions are interdependent. The right hon. Gentleman asked the current Secretary of State for Culture, Media and Sport to speak to local government. I am sure he will be pleased to know that my right hon. Friend will speak to the Local Government Association, and she will, no doubt, make it plain how important it is that local authorities continue to support the arts.
We have heard my hon. Friend the Member for Suffolk Coastal (Dr Coffey) talk about Aldeburgh, the hon. Member for Plymouth, Moor View (Alison Seabeck) talk about the Plymouth theatre and my right hon. Friend the Member for Uxbridge and South Ruislip (Sir John Randall) talk about the power of art to transform political debate. The hon. Member for Blackpool South (Mr Marsden) did not mention the £3 million that is coming to Blackpool and Wyre from the Arts Council’s creative people and places fund. My hon. Friend the Member for Harrow East (Bob Blackman) talked about the importance of the arts and the right hon. Member for Newcastle upon Tyne East (Mr Brown), perhaps the greatest culture Minister we never had, talked about the Sage Gateshead. The hon. Member for Bristol East (Kerry McCarthy), who won the seat that I contested in 1997—I turned a 5,000 Labour majority into a 17,000 Labour majority—does not need to tell me about the thriving arts scene in Bristol.
We can trade statistics back and forth, but it is my understanding that 70% of lottery funding goes outside London or to projects that benefit the whole nation. That percentage has increased from 60% before the coalition came into power. It is important to note that the first act of the coalition was to increase the proportion of lottery funding going each to the arts and to heritage from 16% to 20%.
Paul Blomfield
Simply to correct the Minister on his numbers, in 2009-10—the last year of the previous Government—the lottery spend outside London was 76.3%. It has fallen in 2012-13 to 68.4%.
Mr Vaizey
My briefing from the Arts Council says the opposite: that it is 70% now and was on average 60% under the previous Government. We can trade statistics, but lottery funding has increased and additional funds are available: £45 million for the strategic touring programme, which helps organisations tour outside of London; £37 million in the creative people and places fund, which was specifically set up by the Arts Council to support the arts where they are not well represented in certain regions; and £15 million to support 6,500 apprenticeship places, many of which will be outside London. There is also the £171 million that I secured with the Secretary of State for Education for music hubs. For 2015-16 alone, the Arts Council will have something like £570 million to invest in the arts up and down the country.
It is important, however, to understand why in the pure statistics it looks like London is getting a disproportionate share of the funding. The national museums are based in London, but the Victoria and Albert Museum is opening a multimillion pound extension in Dundee and it works with Sheffield galleries, as I know from my visits. The British Museum only this week sent me a wonderful publication detailing all the work it does across the country with other organisations. Plus Tate works with 26 contemporary art museums in the UK. The Science Museum has homes in York, Bradford and Manchester. The Royal Armouries is based in Leeds. The Imperial War Museum has bases in Duxford and Salford, as well as in London. There are also organisations that tour, such as the English National Ballet. I spoke to the director-designate of the National Theatre, Rufus Norris, about his ambitious plans to support theatre and produce productions outside London and bring them into the National Theatre. That will no doubt be helped by the Chancellor’s generous decision to create a tax break for theatre specifically to support productions outside London.
The list goes on and I could go on and on, but I want to list some of the places that I have visited as culture Minister. I went to Durham to view the Lindisfarne gospels and saw the huge impact the exhibition had on the city. I have visited the Turner Contemporary, which has already welcomed 1 million visitors, the Hepworth Wakefield, Nottingham Contemporary, Sage Gateshead and Bristol Old Vic, which is one of the foremost advocates of arts policy in the country.
David Mowat
I thank the Minister for giving way. I am listening hard to his catalogue of stuff going on in the regions. Based on that, is it his position that the current balance of spending per head between London and the regions is about right and that the report and its recommendations for rebalancing are not a useful contribution?
Mr Vaizey
I was going to go on to mention the Mary Rose museum in Portsmouth, Thinktank, which is the Birmingham science museum, Liverpool, which has been European capital of culture and contains one of our national museums, the Manchester international festival, Manchester’s plans for a new arts centre called HOME, Aldeburgh, which was mentioned by my hon. Friend the Member for Suffolk Coastal, Opera North, the Lowry and the Bowes museum. It is no coincidence that the shadow culture spokesperson holds the Bishop Auckland seat given the huge philanthropic act of Jonathan Ruffer, who saved the Zurbarán paintings and opened up Auckland castle, which I visited a few months ago.
Mr Bradshaw
Rather than continue reading out a lengthy list of excellent regional arts organisations, perhaps the Minister could answer the question posed by the hon. Member for Warrington South (David Mowat) and reassure us that when the Secretary of State goes to talk to the Local Government Association, she will come armed with good practice examples of where local government supports the arts and cultural community in the way that so many have outlined in today’s debate.
Mr Vaizey
It is important that the right hon. Gentleman has stopped me in my tracks, because I could go on until the end of the day about the superb regional arts centres found outside London. I could talk about the national impact of Cultural Olympiad or about world war one. I think the question put by my hon. Friend the Member for Warrington South (David Mowat) was well answered. We are doing brilliantly, but could always do better. That is what Sir Peter Bazalgette, chair of Arts Council England, said. He is confident that funding is available for our great arts organisations outside of the capital and that organisations in the capital work closely with those outside. He has, however, said “could do better” and “judge us in two years’ time,” which is right. To hon. Members who feel concerned, their message has been heard.
Yasmin Qureshi
I honestly do not mean to be facetious, but when the Minister has discussions with the chair of Arts Council England and other Ministers, will he please ask that the museum, library and art gallery on Le Mans crescent in Bolton is given extra funding, so that it does not have to sell any more artwork to survive?
Mr Vaizey
The hon. Lady is not being facetious in the slightest, but it is important to understand that Arts Council England is based on the arm’s length principle. The shadow culture Minister said that I cannot hide behind the Arts Council’s skirts, but what is her position? Will there be a fundamental change of policy by the Labour party? There have been rumours that Labour would cancel all funding for the big five, the Royal Opera House and the Royal Shakespeare Company and redistribute that money around the regions. Is that what Labour would do? It is all right to moan, but she really must come up with an alternative policy. Is it her position to direct Arts Council funding or to direct funding per head in the regions? What is the Labour party’s position? It is about to be explained.
Mr Nicholas Brown
It is. The Labour party’s position is most certainly not as set out by the Minister. I am enjoying his speech, but it is unfair to the hon. Member for Warrington South (David Mowat) not to give him the direct answer that he was hoping for.
Mr Vaizey
I feel that I did give him a direct answer. I explained that the chair of Arts Council England had said that things were going well, but could always do better, that the message has been heard loud and clear and that judgment should be made in two years’ time.
I will not support the recommendation from Patrick Diamond, the former adviser to the previous Labour Prime Minister, to close the British Museum and move it outside London, probably costing several billion pounds. I will also not support Labour’s proposals to stop funding the big five. [Interruption.] The shadow culture spokesperson is going to rule that out.
Helen Goodman
I certainly am going rule out that we are going to end all funding to what the Minister calls the “big five”. I have not said it and I do not think it.
Independent Retail
(10 years, 9 months ago)
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Bill Esterson (Sefton Central) (Lab)
The Waitrose website’s myWaitrose section states:
“A free cup of tea or coffee every day as a myWaitrose member.”
It goes on to say:
“Nothing says ‘welcome’ more than a lovely hot cup of tea or coffee, so let us treat you to a free regular tea or coffee every day! You can enjoy one cup a day—to drink in or takeaway. Simply present your myWaitrose card at the till and you won’t be charged a penny.”
In addition, Waitrose offers a free newspaper to customers who spend more than £5. The myWaitrose offer was drawn to my attention by Mr and Mrs Cairns, who run the village newsagent in Formby, which is near a Waitrose. They sell newspapers—or rather, they used to—but a few months ago people could suddenly get a free paper at Waitrose and no longer needed to visit the other shops in the village.
The impact on the newsagent has been disastrous, with a big drop in trade. Not only are newspaper sales down, but so too is their other trade. Neighbouring shops in the village have also lost out as customers of the newsagent no longer call in. As people drink their free coffee at Waitrose, they no longer buy from the range of independent coffee shops. Instead, they wait in long—sometimes very long—queues after doing their supermarket shopping. A similar point was made to me by a Mr Cant, a constituent of my hon. Friend the Member for Corby (Andy Sawford), who also has a Waitrose store near his shop. Colleagues from elsewhere around the country will have similar examples.
The proprietor of Formby Books, Tony Higginson, also tells me about the impact of supermarkets selling books at a much lower price than he can as an independent book shop owner. Speaking of bookshops, it is only fair that I mention Pritchard’s, which has bookshops in Formby and in Crosby. In addition to competition from the supermarkets, the bookshops face competition from online retailers such as Amazon.
We also have a Tesco in Formby, which recently opened a hand car wash which took most of the trade from the car wash on the industrial estate next door. Formby Tyres also operates on that industrial estate. National Tyres and Autocare recently set up nearby and can sell tyres for less than Formby Tyres can buy them. The ability of national chains to buy far more cheaply than small businesses is one of the many challenges facing independent retailers.
David Simpson (Upper Bann) (DUP)
I thank the hon. Gentleman for giving way and congratulate him on obtaining this debate. I cannot help but wonder whether he has taken up Waitrose’s offer.
On a more serious note, he will agree that small independent retailers have been the backbone of the United Kingdom’s high streets for many years and that we certainly need to do more for them. We welcome the 2% cap on rates, but we perhaps need to look at other issues. The hon. Gentleman mentioned major supermarkets; perhaps we need to consider the whole planning structure in the UK.
Bill Esterson
I am grateful to the hon. Gentleman for that intervention. I will come to his points later, but I agree with what he says. I hasten to add that I buy my coffee from local independent coffee shops.
The Local Data Company has reported that some 66% of retail outlets in town centres were independent in 2011. To put that into context, however, I should say that since 1980, the number of butchers has fallen from over 40,000 to around 10,000 and the number of fishmongers has fallen from 10,000 to 2,000. Since 2001, we have seen a 31% rise in the number of large chains and supermarkets.
Jim Shannon (Strangford) (DUP)
In Northern Ireland, there is a system of small business relief based on a net annual value of £15,000; in the UK mainland, the NAV is £12,000. Does the hon. Gentleman think that it might be a good idea for the Government to consider increasing the NAV cap on the mainland, thereby keeping shops open, rather than closing them, and creating employment, rather than unemployment?
Bill Esterson
I will let the Minister answer the hon. Gentleman’s question, but we should be taking the opportunity to look at all sorts of ways of supporting small independent retailers. I will be interested to hear the Minister’s answer.
Kerry McCarthy (Bristol East) (Lab)
Is my hon. Friend aware that in Bristol we have something called the Bristol pound, our own currency? More than 600 local shops and businesses now accept the Bristol pound; people can even pay their bus fares and council tax with it. It is an excellent way of supporting independent businesses and encouraging people to spend their Bristol pounds in independent shops, rather than the big stores. Perhaps Liverpool ought to do the same.
Bill Esterson
Liverpool no doubt should, but perhaps Sefton can do it first—
Bill Esterson
A Merseyside pound would be an even better idea.
I was aware of the Bristol pound. We need to look at innovative ideas that support small independent retailers and the local economy, and what happens in Bristol is an active example of that.
In addition to the buying power that I described earlier, the large chains have various other advantages, including the ability to buy or rent property in advantageous locations and access to enormous amounts of data on the behaviour of shoppers, enabling them to tune their offer towards what consumers want. Since the 1980s, out-of-town shopping centres have become more numerous. They offer large retailers more space than is available in traditional town centre locations, but retail units in such centres are often beyond the financial reach of small independent shops.
Caroline Dinenage (Gosport) (Con)
I thank the hon. Gentleman for giving way—he has been incredibly generous with all the interventions this afternoon. Does he agree that it takes some imagination from town centres to attract small businesses into empty units? In my constituency, we have a town team that runs an empty unit scheme, which has helped to fund small businesses to occupy such units. So far, the team has two new businesses in place, with another three coming on stream. Will he join me in welcoming the good work of the town teams up and down the country?
Bill Esterson
I have two town teams in my constituency, in Crosby and in Maghull. In Maghull, the town team and the town council were instrumental in opening pop-up shops in an empty unit, which is a similar approach to that described by the hon. Lady. What she says is important.
E-commerce is up from around 2% of sales in 2007 to around 10% in 2013. Internet shopping offers independent retailers the opportunity to compete on a more level playing field with larger retailers, because the cost of overheads is massively reduced, but recognised brands still have an advantage in the online environment. In addition, footfall in town centres is reduced by internet shopping, meaning that independent retailers with a physical presence see less through traffic and fewer potential customers.
Down the road from Formby is Crosby, where Tesco now has two convenience stores in addition to a medium-sized Sainsbury in the village centre. Plans are being made for a further convenience store in College road in Crosby, near the existing Tesco and next to an existing Co-op. Plans for a further convenience store from a national supermarket chain have caused concern among local shopkeepers.
The National Federation of Retail Newsagents represents 16,000 independent news and convenience stores. The NFRN tells me:
“One of the biggest threats to independent news and convenience retailers has been the rapid growth of the supermarket sector.”
Tesco has more than 1,500 small stores, while Sainsbury has 594, according to The Daily Telegraph. Such stores are close to independent retailers and a third of NFRN members have seen a local or metro-style shop open near them in the last year alone. Often, little consideration is given to the impact on existing retail outlets.
Crosby village centre is very run down, like many town centres and high streets around the country, and the Sainsbury store in the village centre is the biggest attraction for visitors. I am optimistic that in the coming years a master plan for Crosby will be produced, but Sainsbury has to be part of that plan. The village desperately needs a complete overhaul, but this needs to be in partnership with the independent retailers.
The No. 1 issue raised by independent retailers is business rates. One retailer from Crosby told me that small businesses need help with bigger rate relief, as they find their rates crippling. Business rates date from a time when retailers had to have a premises and when land and property values were easy to predict. It is a system from another time, for another time—a time before out-of-town shopping centres, dominant national chains and the internet. That is why so many people are calling for a reform of the system to reflect the reality of retailing and business in general.
Amazon can sell books online and pay no tax on the profits generated in this country, and large retailers can set up shop on low-rated land. Local shops need to be where people will go, which generally means high street sites that are often expensive in terms of rent and rates. A first step to be requested is a full revaluation of the rates. Big retailers have many advantages, because of economies of scale, however, so a reform of the rating system is one way in which smaller retailers could be given an advantage to balance their lack of economies of scale.
In the autumn statement, the Government announced business rates support for retailers, and my party is committed to a cut followed by a freeze in business rates. The reality, however, is that small retailers need us all to go further; as the NFRN points out, those are all short-term measures. In some countries, business taxes are collected using a local sales tax. That is only one possible option, although no doubt the Treasury has reasons for rejecting such an approach—it usually does.
How many local shop keepers have good advisers and mentors to help them set up and support them over the years? Who is there to advise independent bookshops on how to make the most of the internet? Where is the support for small shops setting up online trading to help them grow and compete with the big players, despite their not having much cash to invest in a website? It can be done, as I discovered when I visited my constituent Helen Flynn at her shop, Gentle Cosmetics. Helen has both a shop and an internet presence. More retailers could do both, but they need advice and support. National Government have a role to play through the taxation and planning systems. The Government claim that they have made life easier by changes in planning, but whether independent retailers have benefited or high streets have been revived is another matter.
Other issues include parking and bank lending. The out-of-town supermarkets can offer free parking, while many town centres have parking charges. Sefton council offers a free half hour in Crosby and two hours in Formby. Meanwhile, in Maghull, town centre parking is free for half an hour in the privately owned car park in the town centre. In the run-up to Christmas, parking in Sefton’s council-run car parks was free on Thursdays to support late-night opening.
A system of local banks that work closely with their business customers would also help, hence Labour’s proposal for a regional banking system. There is already good practice that could be adopted to address some of the challenges I have mentioned in the debate. In the case of relationship business banking, the Cumberland building society already operates in this way. It is the only building society, so far as I know, to offer a full business banking service.
We face a cost-of-living crisis, and it is no different for independent retailers. Fifty-five per cent. of retailers tell the Association of Convenience Stores that they earn less than the national minimum wage. One of my constituents runs the post offices in Formby and in Crosby, but after paying her staff and her other costs she is left with next to nothing to live on. That story is repeated by many retailers I meet.
The experience of many is that being self-employed is a tough way to try to survive—something I can confirm from personal experience, having run my own business for many years. Government can help by making sure that the economy grows and by recognising the importance of the independent retail sector in our cities, towns and villages. Independent retailers are a key part of our economy and are significant local employers as well. Research by the Association of Convenience Stores suggests that 76% of new retail space given planning consent is located outside town centres. Far more planning consents are given to out-of-town developments than to town centre developments.
This debate is about balance. Yes, the big chains are a big part of shopping, and they need to compete with each other, but small, independent retailers are at the heart of our local communities, providing valuable services to local people and an alternative to the standardised approach of the big chains. The issue is about having a level playing field, and about fairness between large and small businesses. If the big chains wipe out the independents, we will all lose as the identity of our communities will suffer. Competition will be reduced if there is no one to challenge the big players.
The question is, who is on the side of the independent retailers? The big chains can and do look after themselves. In Formby, Crosby, Maghull and Aintree, I am supporting the “Shop Local” campaign and encouraging people to support independent retailers. There is room for both large and small retailers. We need both—our town centres and high streets need both, and so do our communities. However, a fair balance between large and small is not going to happen without intervention by Government. The Government say that they want to support our high streets, and, by implication, our local shops. The time has come for them to make sure that their actions speak louder than their words.
The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)
I congratulate the hon. Member for Sefton Central (Bill Esterson) on securing a debate on this important subject. We certainly recognise the value of the whole of our retail sector to our local and national economies. It employs some 3 million people and contributes around £80 billion to gross value added—almost 6% of our economy. Retail is a significant contributor to self-employment and independent shops are themselves often crucibles of entrepreneurship and innovation.
Research by the Centre for Local Economic Strategies discovered that for every £1 spent locally, around 50p to 70p re-circulates back into the local economy. Local shops provide hundreds of thousands of flexible jobs, particularly for young people and those who juggle other commitments such as child care. They are important hubs of social interaction and can provide vital services to their communities. Many operate in the convenience sector, which has seen real growth—there are now nearly 50,000 convenience stores on the UK mainland. The convenience sector is worth some £35 billion in turnover, adding real social and economic value to communities. More than three quarters of shops in the sector are independent, and almost three quarters of owners, interestingly, are the first generation of their family to own and run a business in the UK.
The economy is now growing for the first time since the recession, and the retail sector is contributing enormously to that. Significantly, it is small stores that are driving much of that growth. Figures from the Office for National Statistics show that small stores are now seeing annual growth of some 8%. Figures released by the British Independent Retailers Association on 31 January show that more than half of independent retailers have had their best average growth since 2010. Nearly two thirds of respondents to BIRA are confident or very confident about the year ahead, and confidence levels are at their highest since 2009.
Our habits as consumers are changing. We are using local shops more—including independents—to top up our supermarket shopping. Independent shops make our high streets, town centres and local shops more diverse and vibrant. Shopping locally has a positive impact on the local economy.
As the hon. Gentleman said, the independent retail sector has faced challenges. It is simultaneously adapting to massive structural challenges driven by changes in consumer lifestyles and preferences, the impact of new and emerging technologies and the constant evolution in technology usage. Modern lifestyles demand a much more flexible and fragmented shopping style that combines physical with online retail, and leisure and convenience shopping. Furthermore, the shift to shopping online is reducing some retailers’ need for large and costly physical stores, as well as creating the need for new and different design roles such as web design. Technology is driving change—tablets and smartphones are making it easier for consumers to buy online and in any location, and new delivery options such as “click and collect” are reducing the problems customers face with home deliveries.
Verdict Research is predicting that as confidence in the economy grows and the population grows, consumer spending will increase. A bi-annual survey of 500 small businesses conducted by Aviva shows that they have a more positive outlook for the first six months of this year, compared with two years ago. Retailers that have a distinctive brand, focus on their customers and are well run are still managing to grow. That is true of independent retailers as well as larger ones, and there are many such examples from around the country. The hon. Gentleman referred to one such small business in his constituency to which he has given his support: Gentle Cosmetics, which has recently opened a store after successfully trading online.
We are seeing increases in local shopping because of consumer demand. Research by the Association of Convenience Stores shows that the fruit and vegetable sector has experienced considerable growth as people move away from doing one big weekly shop, and are instead increasingly using local stores and shopping more often.
I turn now to some of the issues the hon. Gentleman raised. If I cannot cover all of them, I hope he will allow me to write to him in more detail. I will first say what the Government are doing to help independent retailers. As he referred to, the autumn statement announced the biggest business rates support package for 20 years, including capping the retail prices index increase in business rates at 2% next year; doubling the small business rate relief for a further year, to 31 March 2015, which will benefit over half a million small businesses; a business rates discount of £1,000 for smaller retail premises for two years, benefiting around 300,000 shops, pubs and restaurants; a 50% discount for 18 months for new occupants of property that was previously vacant; and allowing businesses to pay their rates bills over 12 months, which will help every firm with their cash flow. In the spring we will publish a discussion paper on options for reform of business rates administration.
We have been working with the Department for Communities and Local Government on the town centre support package, which was launched on 6 December. That package includes a number of initiatives on car parking, a review of business improvement districts, consultations on new permitted development rights and other planning reforms, and a call for evidence on the red tape that could be hindering high street revival.
Bill Esterson
Before the Minister moves away from business rates, does he recognise the calls from a significant number of business organisations and individual businesses for a complete overhaul of the business rates systems? Bearing in mind my comment about business rates being from another time, what are his views on that issue?
Michael Fallon
I recognise the calls, which I have heard from business organisations such as the British Retail Consortium and the Association of Convenience Stores, whose conference I addressed. They would like a complete overhaul of the system. I have invited them to put their thinking caps on and to come up with some thoughts on longer-term radical reform of the system. Meanwhile, we have supported the Portas pilots with some £2.3 million. We have supported towns with high vacancy rates through the high street innovation fund and we have supported the “Love your local market” campaign.
We were very pleased to support the first ever small business Saturday. Just under half of UK consumers were aware of small business Saturday and nearly £500 million was spent on that day, an average of £33 per person. Almost one person in five said they had spent at least 50% more than they usually would. The day was supported by more than 100 local authorities who waived parking charges, including that in the hon. Gentleman’s constituency, I am delighted to say. Many of my right hon. and hon. Friends visited small businesses on that day, as I did, and saw their commitment and energy. We were proud to help small business Saturday to be a success.
I know that many in the independent sector are concerned about what looks like unfair competition between large and small, between grocery and other subsectors, between online and offline. We believe that consumers are served by open competition between commercial interests, so Government intervention should never be taken lightly, and any action must be evidence-based, proportionate and reasonable. If the hon. Gentleman has evidence of that not being so, it is a matter for the independent competition authorities.
Retail has always been highly competitive. Retailers are swift to change what they sell, where and how they sell it, and how they operate as businesses if that is what they need to do to drive success. However it is not for the Government to intervene in these matters. Changes in technologies and consumer habits are not something the Government or the House can stop or try to reverse, nor should we. The dividing lines between different subsectors of retail—the hon. Gentleman gave some good examples—are blurring as more and more retailers are innovating to serve customers as best they can.
Small retailers are not immune from these commercial pressures. They must adapt and innovate if they are to survive, and the best of our local stores are doing exactly that by trading online with a high street presence, by offering new products and services to customers, and by simply being the best at what they do in terms of customer service—whatever it takes. If a retailer takes market share from another retailer by doing something new or offering something different, that is the nature of the sector. I assure the hon. Gentleman that many small retailers are doing that and thriving as a result. Of course there are things the Government can do to help. Business rates and the planning system are two of the most obvious areas where the Government have a genuine role to try to help cultivate the spirit of enterprise that runs throughout the sector.
I am grateful to the hon. Gentleman for raising these issues this afternoon, which I assure him are central to the commitment of the Government and the Department for Business, Innovation and Skills to the retail strategy, and to our refreshing of that strategy each successive year, working with the British Retail Consortium and the Association of Convenience Stores. I also assure him that the interests of smaller and local retailers are not being squeezed out.
Pavements
(10 years, 9 months ago)
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Dr Julian Huppert (Cambridge) (LD)
It is a pleasure, Mr Caton, to serve under your chairmanship in this debate, which someone I was talking to described as a quintessentially Liberal Democrat debate. That is why it is a great pleasure to welcome my colleague, the Under-Secretary of State for Communities and Local Government, my hon. Friend the hon. Member for Bristol West (Stephen Williams), to respond. I am sure that he shares in Bristol many of the problems we have in Cambridge. I know from talking to colleagues that the problem arises in many places. The Deputy Leader of the House of Commons, my right hon. Friend the Member for Carshalton and Wallington (Tom Brake), is campaigning to try to improve the pavements in his constituency.
The issue may not sound important, but it is for people and communities. Poor pavements can trap people in their homes, making them unable to participate in the wider world and the community and society of which they would like to be part. Kevin Golding-Williams from Living Streets, the national pedestrian charity, says that
“the pavement is the most democratic piece of infrastructure a government can provide. Whether you're a pedestrian, cyclist or motorist—you will use the pavement at some point during the day.”
He continues:
“High quality pavements are important for encouraging children to walk to school, and for making places better for walking—which can boost footfall and trading by up to 40%.”
My hon. Friend the Minister might like to talk to the Secretary of State, who has often said that the only way of advancing trading is not to encourage cars, but to promote cycling and walking, which do a huge amount to promote trading. I hope that he will encourage his right hon. Friend to change the focus.
Bad pavements cause problems for many people, particularly those in wheelchairs, those with pushchairs, the elderly, those with mobility problems, the visually impaired and many others. They all struggle with a pavement that others could cope with, but our pavements should be more than something we can all cope with. I have heard numerous complaints about the problems caused by poor pavements in Cambridge and throughout the country. Last year, I was contacted by an impressive resident of Cambridge, Claire Connon, who is a wheelchair user and is tipped to row for Britain in the 2016 Paralympics. I hope she will succeed in that and bring home a medal for us. If so, she would be the first intravenously-fed Paralympian. Claire told me that she often falls out of her wheelchair as she travels around Cambridge, although she is an experienced wheelchair user. When she contacted me, it was because she had fallen out twice in 10 days, on the second occasion landing on her wrists. That could have ended her rowing career before it had had a chance to get going.
I had been involved in such matters as a councillor and a Member of Parliament, so I knew that there was a problem with potholes and other large obstacles, but until I met Claire, I had not fully realised how a small problem on the pavement could be a huge problem for many people. Molehills can be mountains when they are in the way of wheels that cannot get over them. Claire said:
“It isn’t until you experience using a wheelchair around the streets of Cambridge you realise how uneven they are. There’s the obvious great big holes, but also small dips with slightly raised edges that, in my wheelchair I don’t notice until you’ve hit them and then the trouble and accidents start.”
She continued:
“'Many areas have five or six different pavement types in a small area making for an uneven and dangerous pathway not just for wheelchair users, but anyone with mobility difficulties.”
After talking to Claire, I thought I should find out more, so I arranged to spend a morning in a wheelchair with Claire and two of her colleagues, M.J. Black and Naomi Hook, and a range of interested city and county councillors. It was hard work—much harder than I had expected. I had had experience of wheelchairs—I used to be a volunteer with St John Ambulance and had helped out at a care home—but I had usually pushed a chair on flat, often carpeted, surfaces. Pushing my own wheelchair through the streets was incredibly energetic, and I struggled to understand how people manage to do so day in, day out. We did not choose particularly tough areas, but went around the city centre.
Petty Cury, which I had always considered to be a reasonably smoothly paved shopping street, was a nightmare. I had not realised that because of the camber, going in a straight line meant constantly pushing with one hand while the other hand had nothing to do. That was not due to my incompetence or lack of physical fitness, because I saw experienced wheelchair users such as Claire getting stuck as they tried to negotiate and deal with poorly designed kerbs and other problems. After a few corners, the pavement would suddenly stop and there would be no ramp to descend, which was a huge problem. Cars or trees may be in the way. A whole series of things make it impossible for people to get by.
Claire and I launched a campaign, “Fix Our Pavements”, which is online at fixourpavements.co.uk, asking people to identify particular places where there are problems and to sign a petition to get those pavements improved. A lot of people have got in touch through that and signed the petition online and offline. I have to say, it is the easiest petition I have ever tried to run. People care very much about the issue, whether from personal experience—a number have experienced being in a wheelchair for some time or had to use crutches—or from their family’s, when there are ageing parents in particular. Time after time, people would say, “Yes, my mother-in-law had a problem with that.” It is a huge issue.
We have support from organisations as well, such the Whizz-Kidz charity; I am hugely honoured to be one of its parliamentary champions. It provides powered and lightweight wheelchairs and training and support for disabled children, young people and their families. It says that it is passionate about young disabled people having the freedom, opportunities and skills to fulfil their potential, and we know that the ability to travel independently and safely is an enormous part of that. Providing people with a wheelchair does not make sense if there is no way of getting around with that wheelchair. I applaud the charity’s work, particularly in providing lightweight wheelchairs, because working with a full, heavyweight, normal, NHS standard wheelchair was far too much work for me.
This is not only a problem for wheelchair users. On a number of occasions I have been contacted by a visually impaired constituent who is involved with the Cambridge walk-in cycling liaison group and Cam Sight, a local group that works with people who are visually impaired, to talk about the issues that people with visual impairment face. I have tried to find out about some of the challenges for blind and visually impaired people trying to go around the streets of Cambridge. Back in August, I was blindfolded for about 30 minutes and I walked around the city with a guide dog. That gives one a very different sense of what it is like, what the challenges are and what people face. Small things such as cracks and lumps can cause a problem. They can trip people up and get in the way, but so too can big things. Bins left out in the path can simply block the pavement, as can cars parked on pavements. Cars and trucks, of course, are one of the very reasons why pavements are cracked in the first place, causing the problems initially. To quote a guide dog owner, because Guide Dogs has been very involved in the campaign:
“My main problem is parked cars etc. on pavements, and also on the road near junctions where I need to cross. In general, lack of safe crossing areas means I rarely go out on my own...I cannot cross safely.”
That is a serious alarm that we should care about.
Guide Dogs has proposed that the London law that bans parking on pavements except where explicitly allowed should be expanded to cover the rest of the country as well, and it should be enforced. Living Streets research found that cars parked on the pavement was the single biggest issue when people asked about clutter in the streets: 41% of people said that was an issue. We need to tackle that problem. It would help to clear the ways and help not to damage the pavements.
There are lots of other obstacles, such as A-boards left out in the path. We have even seen cases involving safety signs—even though they may be put up for sensible reasons, they can cause harm themselves, as in the case of Cambridge resident Dr Peter Lawrence. A road sign was put out to warn people that works were coming along. He did not see it in the dark, because it had been knocked over, and he ended up falling over, causing himself significant injury and harm. There are lots of obstacles, but most of us simply are not aware of them most of the time. When parking, most of us would not think about making sure that we are not blocking off access to a pavement, whether that is about somebody is getting on or off it. When leaving a bike by the side of the road, I now always try to ensure that there is space for people to get by, but not everybody thinks of that—whether it is with their bins or anything else. There is a clear problem and a large number of national organisations are keen to see action. Age UK and many others have commented on that.
What is the solution? It is not just money. I absolutely appreciate that times are tough, but money for repairs is needed. It is helpful that the Government have top-sliced £50 million a year to encourage maintenance of cycleways and footpaths. That will be worth a huge amount. In fact, better than that, it can help to avert the costs that are incurred otherwise. Research by Guide Dogs in 2011 asked a range of councils how much they spent on compensation claims to pedestrians who had injured themselves by tripping and falling on badly maintained streets between 2006 and 2010. From the people who responded, it found that well over £100 million was paid out in compensation. The estimate of the amount paid out in compensation, if we cover all councils and include ongoing cases, is to the order of £300 million. Surely it would be better to spend £300 million and more fixing the pavements than to pay it out to people after they have been injured.
The solution is not only about money—although if my hon. Friend the Minister announced extra money, that would be welcome—but about attitudes and ensuring that things are done correctly and properly the first time. I was told of one area, near where I happened to be door knocking last week, close to the local shops on Carlton way, where the pavements had been fixed seven times. The slabs were picked up seven times, sand was put underneath, they were relaid, and the sand was washed away again—and the cycle repeated. Time and again, people were unable to get past the blockage. The underlying problem, which I think is a blocked drain, was not being solved. A lot of effort was put into trying to fix the surface at great expense, instead of fixing the core problem.
We see that in other areas. Work is happening on Mill road in Cambridge—it is a wonderful area that I urge you to visit, Mr Caton—to try to repair the pavements that are very damaged, affecting an area with a huge range of successful independent shops. Piero D’Angelico, the chair of the Mill road traders association, has done a great job in getting that work to happen, but delivery lorries are still parking on the pavements, still blocking the road as they do so, and still cracking the pavements that have been freshly laid. We have to get out of that cycle. Slabs are laid on sand but that cannot resist the weight of those trucks. It will look very nice for a short time, but then it will start to break down again, I am afraid.
Similarly, when roadworks are done, reinstatement is rarely as good as it needs to be, which is one of the major causes of potholes on the roads, as well as on the pavements. I have been talking to the Local Government Association’s street works task force, which is doing a piece of work—I was involved at the launch, and it will report soon—as well as county experts to try to find ways of ensuring that that does not happen, because the constant cycle of fixing things is not an efficient use of money. We have to try to avoid those scars.
There are problems with trees, as their roots can really push up the pavement and make it impossible for people to get past. Nobody is suggesting cutting down all the trees, but new surfaces, which are much more flexible and rubberised, can be used, so that we do not get huge mountains where the tree has grown. That would be a nice way forward so that people can get by and we still get to keep our trees.
There are many other problems that we should try to deal with, and I encourage people to report them. My colleague, the mayor of Cambridge, Paul Saunders, has now reported more than 500 problems that he has observed around Cambridge through the wonderful FixMyStreet website. Not all those have been repaired yet, but that shows the sort of scale involved. It also shows the value of civil society in ensuring that those reports can be made, so that people are aware of them. I urge other MPs, councillors, highways engineers and even Ministers to do what I did with Claire and with the guide dogs: to experience what it is like to get around in a wheelchair or if unable to see. Anyone who tries that would soon see the new surfaces that they are responsible for with new eyes and with the sort of determination that I now have to ensure that they are sorted out and improved. That would make a huge difference.
One of the top priorities of the Department for Communities and Local Government is to bring people together in strong, united communities. One of the key priorities for Liberal Democrats—part of our constitution —is to champion the freedom, dignity and well-being of individuals. We cannot deliver on either of those priorities if people cannot get about, because the pavements will not let them do so.
The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)
I congratulate my hon. Friend the Member for Cambridge (Dr Huppert) on securing the debate this afternoon. He opened his remarks by saying that the issue is probably one that I am familiar with in Bristol. I listened carefully to what he was saying; many of his points resonated with me not only in connection with my almost nine years as the Member of Parliament for Bristol West, but more directly with when I was a county councillor for the city centre ward in the 1990s.
Such issues were raised constantly by constituents at that time, particularly the obstruction of pavements by shops’ and cafés’ A-boards. Indeed, we had annual, almost perverse debates when setting the county’s budget—later on, the unitary authority’s budget in Bristol—about the insurance premium that the council had to pay to deal with accidents on the highway and whether that could be mitigated by extra investment in pavements.
I commend my hon. Friend on his direct approach to researching the topic and on his work with Guide Dogs for the Blind and other charities, and on even sitting in a wheelchair. I also commend him on giving people a solution. I had a look at his website before coming into the debate, and I saw the link to the website that he mentioned in his speech: fixourpavements.co.uk. Officials have pointed out to me—I am not suggesting that he changes the domain name; I am sure he has gone to great trouble to secure it— that in highway engineering terms, the correct term is “footways”, because pavements are apparently classified as what we would normally call roads. Whatever he has chosen to call it, I hope his website is a great campaign success in Cambridge. It is perhaps a model that other constituency Members will be adopting around the country.
Walkable neighbourhoods are typically characterised by having a range of facilities available to all residents that can be accessed comfortably on foot. Making the local environment convenient and attractive to walk in can help enhance the vibrancy of a community and reduce reliance on motor transport. So it is important that local highway authorities, which are responsible for footways, recognise the importance of keeping them in good order.
The Highways Act 1980 states clearly that the footway is an integral part of the highway. I note with interest the various initiatives being undertaken by my hon. Friend and the 2016 Paralympics hopeful, Claire Connon, in respect of setting up the campaign that I referred to earlier. Local highway authorities—in his case, Cambridgeshire county council—are responsible for repairing their highway networks. That includes ensuring the repair and renewal of everything from major bridges to potholes. Of course, there will be a lot of that after the recent, and continuing, wet weather. As part of the service, they are also responsible for maintaining footways—from removing weeds to repairing or replacing broken or missing slabs. Central Government help in that process by providing funding. The Department for Transport leads by providing capital support to authorities through what is known as the highways maintenance capital block grant.
Between 2011 and 2015—the current spending round—the Department for Transport is providing more than £3.4 billion to local highway authorities for highway maintenance. The funding includes additional expenditure that has been provided to help assist authorities to deal with problems they have encountered on their transport networks, caused by extreme weather events that the country has encountered since 2010. So it is not just this year; it is the previous extreme weather events that we have experienced as well.
Over that four-year period, we are providing Cambridgeshire county council with more than £48 million. Perhaps my hon. Friend will interrogate county councillors and highways officers from the county council on how they are spending that £48 million. I am sure he will want to ensure that Cambridge gets its fair share.
Dr Huppert
The Minister is absolutely right. It is the county’s role. He may not be aware that there was a scrutiny review of work with pavements led by a Liberal Democrat councillor colleague, and I will be taking the matter up further with the county council.
Does the Minister accept that there is a question about priority? He is right to say that a lot of money goes into the maintenance. Does he think that people always put pavements—or footways, as he correctly calls them—in the same category as roads? There is always a lot of discussion about fixing roads or building new roads, but never quite as much attention to the footways, which seem to get neglected.
Stephen Williams
My hon. Friend makes an entirely reasonable point. As well as being the Minister for Communities, I am also responsible for the localism agenda. I know he will agree, as a good localist himself, that it is up to local authorities to decide what their priorities are. Indeed, the money that Cambridgeshire county council gets—£48 million—is not ring-fenced; it is up to democratically elected councillors on that authority to decide what priority they wish to give to certain issues and how to spend that particular budget. Of course, county councillors, just like Members of Parliament, can be responsive to constituents’ views, but that is an issue for Cambridgeshire rather than for my Department.
In June last year, the Government announced, as part of the 2013 spending review, that they were committed to providing a further £5.8 billion for local highways maintenance to local authorities in England, outside London, between 2015 and 2021. That equates to £976 million per annum and highlights the Government’s continuing commitment to help make sure our roads and footways are fit for the future.
The Department for Transport has recently published a document that seeks views from highways authorities such as Cambridgeshire and other key organisations on how best to distribute the £5.8 billion to ensure that we get the best value for money for the taxpayer. The document suggests a number of ideas on how the funding could be allocated to local highway authorities, including one that would set aside part of the funding from the £5.8 billion for the maintenance of cycling and walking facilities. I know that cycling is a huge passion of my hon. Friend’s, and I commend him for the work that he has done in promoting safe cycling.
The Government also work with sector organisations, including the UK Roads Liaison Group, to encourage authorities to help develop asset management plans. Such plans are vital if local authorities are to take proper care of their highway assets. That will help authorities ensure that the highway infrastructure, including footways, is maintained efficiently. Asset management plans should not be documents that engineers write and then put on a shelf, although I am sure a lot of that goes on; they should provide a clear statement of the local authority’s highway assets, their condition and the level of service that the council wants to deliver. Again, I suggest my hon. Friend takes that up with officers on the ground in Cambridgeshire.
My hon. Friend alluded to the many benefits of well-maintained footways and pedestrianisation in relation to the environment in Cambridge. I have seen such benefits in Bristol. Evidence certainly suggests that investment in walking and the wider public realm can increase economic value and economic activity in local areas. A United States study undertaken in 2012 suggests that well-planned improvements in the public realm can help to boost footfall and trading by up to 40%. In addition, people on foot also tend to linger longer in key shopping areas in towns and cities and spend more than those who travel by car.
People-friendly streets, including good cycling and walking networks, benefit everyone and provide benefits for our health, as well as boosting local economic growth. My hon. Friend mentioned the Olympics and Paralympics, and all of us still have different memories of those occasions that inspired us. One of the legacies that the Government definitely want to see from those events in London is that more children and adults should get active and become more healthy as a result.
That is a cross-Government aspiration. Last August, the Department of Health announced a £5 million initiative to encourage children and families to exercise more. As part of that funding, £1 million is being provided simply for walking initiatives, to help people get more active. I understand that Cambridge will benefit from the funding in the form of a new footway and cycleway route between the train station and Cambridge science park, to which I am sure my hon. Friend is a frequent visitor, as he is one of the few scientists in the House of Commons. The science park is also a major employment centre for the city economy.
The Department for Transport has also supported “walk to school” week, which is an excellent opportunity for schools to engage with children and parents and to encourage walking to school. In addition, the £600 million local sustainable transport fund includes a range of schemes designed to help improve local facilities for pedestrians, including better routes and signage, improved crossings and new footbridges.
My hon. Friend mentioned dropped kerbs and obstacles on the pavement. Under the Disability Discrimination Act 2005, public authorities have a general duty to promote equality, and those who design, manage and maintain buildings and public spaces have a specific obligation to ensure that people can play a full part in benefiting from and shaping an inclusive built environment. We encourage local authorities to consult representatives of various user groups to help inform the design of local streets.
Not all disability relates to difficulties with mobility, so it is important not to overlook the needs of those with sensory or cognitive impairment, the elderly and young parents with pushchairs. I find it helpful to think of people not simply as being disabled, which is the language often used, but as being disabled by the environment in which they must operate. Politicians at all levels must try mitigate those problems as far as possible.
The Department for Transport promotes guidance for practitioners involved in the planning, provision and approval of new residential streets and modifications to existing ones. The guidance highlights the importance of street design’s being inclusive to accommodate all people regardless of age or ability. It advises on a number of appropriate surface level crossings that might be provided, where practicable, to connect pedestrian networks to one another, particularly where those networks are separated by heavily trafficked roads.
The guidance also explains that street furniture, which is typically sited on footways, can be a hazard for users and suggests that it be minimised wherever possible. In Cambridge, Bristol and other places, I believe that the local authority might benefit from an audit of its street furniture—a highway engineers’ term for clutter, which denotes signage, railings and so on—to see what might be cleared away, with a particular focus on the supposedly temporary signs that linger for a long time after the events that they advertise have happened. People are keen to put things up but not always so keen to take them down.
I turn finally to parking on footways, which my hon. Friend mentioned several times. Cambridge has many narrow streets in which that will always be a factor. We fully appreciate that parking on a footway or verge can cause serious problems for pedestrians—particularly those in wheelchairs, those who have visual impairments and parents or grandparents pushing prams and pushchairs. Indiscriminate pavement parking may also damage the verge or footway, and the burden of repair costs normally falls on the local highway authority. In some streets, parking on footways may be inevitable to maintain free passage of traffic while meeting the needs of local residents and businesses, and traffic signs are prescribed for this purpose. It would not be possible to get a refuse wagon, let alone an emergency vehicle, down some of Bristol’s narrow streets if that were not the case. That is often left to the common sense of local residents.
Local authorities outside London have wide-ranging powers under sections 1 and 2 of the Road Traffic Regulation Act 1984 to make traffic regulation orders that prohibit pavement parking on designated lengths of highway or over a wide area. Such pavement parking bans outside London would need to be appropriately signed so that motorists were aware of the restriction. In areas where the local authority has obtained civil parking enforcement powers, civil enforcement officers can enforce pavement parking bans on designated highways by issuing penalty charge notices. In February 2011, the then Transport Minister, our hon. Friend the Member for Lewes (Norman Baker), wrote to all local authorities outside London prompting them to use their existing powers to prevent people from parking on the pavement where that was a problem.
In conclusion, the Government recognise the importance of ensuring that pavements are not obstructed by vehicles, street furniture or other privately-owned paraphernalia. It is not simply down to Government, however; I always say as a Liberal that Government and the state are not always the answer. It is up to all of us to encourage responsible behaviour, exercise common sense and show basic courtesy for the road needs of others.
Question put and agreed to.
Written Statements
(10 years, 9 months ago)
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Public Service Pensions Uprating 2014
(10 years, 9 months ago)
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The Chief Secretary to the Treasury (Danny Alexander)
Legislation governing public service pensions requires them to be increased annually by the same percentage as additional pensions—state earnings-related pension and state second pension. Public service pensions will therefore be increased from 7 April 2014 by 2.7%, in line with the annual increase in the consumer prices index up to September 2013, except for those public service pensions which have been in payment for less than a year, which will receive a pro rata increase.
Local Accountability and Council Tax
(10 years, 9 months ago)
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The Secretary of State for Communities and Local Government (Mr Eric Pickles)
Over the coming weeks, councils will be holding their annual budget meetings at which they will formally take decisions about their expenditure on local services and their council tax levels for the year ahead. These discussions will affect the lives and household budgets of all who live in the council’s area.
Local people should be able to see how those they have elected to represent them have voted on these critical decisions. However, such decisions could be clearer.
A survey by Conservative Way Forward in August 2013, based on Freedom of Information Act requests to 340 councils, found that 78% of councils could not or would not say how councillors had voted on setting that year’s council tax. Three-quarters of councils which chose not to freeze council tax had not recorded their votes.
The Local Audit and Accountability Act 2014 will lay the way for greater reporting of council meetings using digital and social media. To complement this, we believe that local accountability would be further enhanced by asking all councils to publish, as a matter of record, how each councillor votes on any budget decisions including council tax changes. Indeed, recorded votes are the norm for parliamentarians.
Accordingly, we have written to every council leader making clear our expectation that this year all councils will adopt at their budget meeting the practice of recording in the minutes of the meeting how each member has voted on the budget and amendments to the budget.
To facilitate this, we laid before Parliament the Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014 which make provision requiring councils to amend their Standing Orders (it is open to councils to waive them before they can be permanently amended) so as to make mandatory the practice of recorded votes at budget meetings.
This small but practical reform increases council transparency and accountability over council tax, and highlights the work that councillors do in championing their communities and representing local electors.
It is the latest step in a series of measures the coalition Government have taken to help address the cost of living for hard-working people. This Government have announced a further two years of council tax freeze funding, on top of the average 10% cut in council tax in real terms that this Government have helped deliver since May 2010.
We will be also publishing shortly the final local government finance settlement and the council tax referendum threshold for 2014-15.
Severe Weather Recovery Scheme
(10 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)
I wish to provide a further update for the House on the Department for Communities and Local Government’s work on flood recovery including the £7 million severe weather recovery scheme that I announced in my statement of 17 January, Official Report, column 33WS.
The severe weather recovery scheme will support and speed recovery in affected areas by helping to bridge the gaps between costs covered by the Bellwin scheme, insurance and existing central and local government obligations and programmes, including the £3.4 billion the Department for Transport is already providing to English local authorities—outside London—for highways maintenance from 2011-15. It is jointly funded by my Department and the Department for Transport.
Today, the full details of the severe weather recovery scheme have been published on the gov.uk website and the scheme is now open for local authorities to make an application. The deadline for submitting claims to this scheme is 19 February 2014.
I would like to provide the House with some further details of the scheme. We want to be able to give local authorities the flexibility to use the money as they see fit, so the funding will be distributed through a grant paid under section 31 of the Local Government Act 2003.
The Department for Communities and Local Government element of the scheme will provide additional support to local authorities where they have incurred, or will incur, costs on supporting their communities during the recovery phase following the east coast tidal surge and the more recent severe weather. Qualifying activities may include one or more of the following: offering council tax discounts; providing assistance for long-term displaced households; placing households in temporary accommodation; support payments to flood affected households; the purchase or provision of new household items for those affected; provision of temporary caravans; use of rest centres; and tourism impacts.
The Department for Transport element is a capital grant scheme and the funding will be distributed by formula to those local highway authorities who can clearly demonstrate that they have suffered damage to their local highway assets.
Full details of the scheme can be found at: https://www.gov.uk/government/publications/severe-weather-recovery-scheme
We are considering the response and recovery support needs for the Somerset local authorities separately.
Furthermore, I would like to inform the House that I am chairing a series of round-table discussions with local authority leaders from impacted authorities. To date I have met with leaders from East Anglia, Kent, Yorkshire, authorities in the south of England and the Thames valley and over the next few weeks I intend to meet with leaders from the north of England, the west country and Somerset. I will also be meeting with members of the voluntary community sector to understand the contribution they make to a multi-agency response in these circumstances. My Department will make further announcements in due course.
Advisory Group on Military Medicine (Triennial Review)
(10 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Defence (Anna Soubry)
On 5 December 2012, Official Report, columns 57-58WS, my predecessor the right hon. Member for Rayleigh and Wickford (Mr Francois) announced in Parliament through a written ministerial statement, the commencement of the triennial review of the Advisory Group on Military Medicine (AGoMM). I am now pleased to announce the completion of the review.
AGoMM plays an important role providing independent, specialist advice to Ministers and senior officials on the policy for medical issues within medical force protection, and for clinical treatments used on military operations.
The review concludes that the functions performed by AGoMM are still required; however, it should be delivered as a public sector working group rather than the current model of an advisory non-departmental public body (NDPB). The review also looked at the governance arrangements for the body in line with guidance on good corporate governance set out by the Cabinet Office. The report makes a couple of recommendations in this respect, mainly around the publication of unclassified information about the work of AGoMM and its membership; these recommendations will be implemented shortly.
The full report of the review of AGoMM can be found on the gov.uk website and copies have been placed in the Library of the House.
EU Readmission Agreement (Azerbaijan)
(10 years, 9 months ago)
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The Minister for Immigration (Mr Mark Harper)
The Government have decided not to opt in at this stage to the draft Council decisions concerning the signature and conclusion of the agreement between the European Union and the Republic of Azerbaijan on the readmission of persons residing without authorisation (European Union Document Nos. 15493/13, COM(2013) 745; 15494/13, COM(2013) 744).
There is little illegal migration from Azerbaijan to the UK and we have no operational problems with returns which an EURA would help to resolve. It would be possible for the UK to seek to participate in the agreement post adoption if these circumstances were to change.
Grand Committee
(10 years, 9 months ago)
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Arrangement of Business
(10 years, 9 months ago)
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The Deputy Chairman of Committees (Baroness Harris of Richmond) (LD)
My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.
Electoral Registration and Administration Act 2013 (Commencement No. 4 and Consequential Provision) Order 2013
(10 years, 9 months ago)
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Lord Wallace of Saltaire
That the Grand Committee do consider the Electoral Registration and Administration Act 2013 (Commencement No. 4 and Consequential Provision) Order 2013.
Relevant document: 13th Report from the Joint Committee on Statutory Instruments
Lord Wallace of Saltaire (LD)
My Lords, as noble Lords will know, there are a great many consequential orders in introducing individual electoral registration, and in changing some of our voting regulations and arrangements. There was a time when I knew almost nothing about this area; I am learning more and more.
There are three instruments for debate today. The Electoral Registration and Administration Act 2013 (Commencement No. 4 and Consequential Provision) Order 2013, brings into force, for parliamentary elections, provisions in the Electoral Registration and Administration Act 2013 concerning the ability of voters to cast a vote at close of poll. The two sets of regulations—the Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2014 and the Neighbourhood Planning (Referendums) (Amendment) Regulations 2014—update the rules for the conduct and administration of local mayoral elections in England and Wales and neighbourhood planning referendums in England. They do so by applying or copying provisions, including those on close of poll, in the Electoral Registration and Administration Act 2013 and associated secondary legislation, which made a number of changes to the rules for UK parliamentary elections.
In the main, the changes in all three of these instruments are intended to come into effect for polls held on or after 22 May 2014, which is the date of the European parliamentary elections and scheduled local elections in parts of England. The changes are designed to improve the accessibility and security of the voting process and to implement a number of recommendations which have been made by, amongst others, the Electoral Commission and the Association of Electoral Administrators. The regulations concerning neighbourhood planning referendums contain an additional provision on calculating the campaign expenditure limit for campaigners at a neighbourhood planning referendum. We intend that this should come into force on the day after the regulations are made. I will set out this change in more detail shortly. The instruments are part of a comprehensive package of statutory instruments which make various changes to the rules for conducting elections and referendums in the UK. The Government have consulted on the changes with the Electoral Commission and with others such as the Association of Electoral Administrators.
The close of poll order—the first order being considered today—brings into force Section 19 of the Electoral Registration and Administration Act 2013. That section provides for voters queuing at a polling station at close of poll to be issued with ballot papers and to vote, despite the time of close of poll having passed. This provision addresses the concern expressed during the passage through Parliament of the ERA Act about the need for a mechanism to deal with any queues which could, in some circumstances, form at polling stations at close of poll, given the isolated but highly publicised instances of queues at polling stations at the 2010 general election. Counting officers and returning officers will of course still be expected to carry out planning for polls, to the same high standards as now, to ensure that there are sufficient polling stations and adequate staffing levels to manage the volumes of electors likely to vote in person and to avoid such queues forming wherever possible. The order also makes provision for persons queuing at a polling station at close of poll in order to return a postal ballot paper or postal voting statement to return it despite the time of the close of poll having passed. This provision has effect in England, Wales and Scotland only.
I turn now to the provisions in the neighbourhood planning referendum regulations and the mayoral elections regulations. I will first discuss the measures that are specific to the neighbourhood planning referendum regulations before turning to the key measures that are common to both these regulations and to the local mayoral elections regulations. The neighbourhood planning referendum regulations change the basis on which the campaign expenditure limit is calculated at these referendums. The limit is currently calculated by reference to the number of electors on the register published after the annual canvass in the year preceding the referendum. However, under the transition to individual electoral registration, a post-canvass register was not produced in 2013. We are therefore providing that in future the limit will be calculated by reference to the register as it exists at the beginning of the referendum period. This period begins at least 28 working days before a residential poll and at least 56 working days before a business and a residential poll that happen together. We intend that this provision would take effect on the day after the regulations are made and affect any referendum where the referendum period begins on or after that date.
I turn to the measures that are common to both the neighbourhood planning referendum regulations and the local mayoral elections regulations. Where any variations exist, I will point these out. Provisions on these matters were included in amendments previously made to the European parliamentary election regulations and debated by Parliament, in order to apply the provisions to the European parliamentary elections this May. Both sets of regulations update the forms used by voters, such as poll cards and postal voting statements, that are intended to make the voting process more accessible. The changes continue the work carried out to modernise the appearance of forms used by voters at newly created polls, such as the police and crime commissioner elections and the 2011 referendum on the parliamentary voting system. The revised material has been produced following a programme of public user testing and consultation with the Electoral Commission, the Association of Electoral Administrators, Scope, SOLACE and territorial offices and following discussion with electoral services suppliers. The regulations also provide for police community support officers to enter polling stations and counting venues under the same conditions as police constables. This will allow police forces additional flexibility in deploying their resources on polling day, and will allow them to provide a greater visible reassurance to the public.
The regulations additionally make the same provisions as those to which the close of poll order relates—that is, they provide that voters waiting in a queue at the close of poll, at 10 pm on polling day, for the purpose of voting may be issued with ballot papers to enable them to vote or may return postal voting statements or postal ballot papers despite the close of poll. Members of the Committee may wish to note that relevant provisions in the Representation of the People (England and Wales) Regulations 2001 apply to mayoral elections and residential neighbourhood planning regulations, so amendments recently made to those regulations will also apply to these polls. These recent amendments include: a requirement for 100% of postal votes indicators to be checked, rather than the current minimum of 20%; the extension of emergency proxy provisions to those absent on grounds of business or military service; and the removal of the restriction on postal votes being despatched earlier than the 11th working day before the day of the poll. Where relevant and appropriate, the neighbourhood planning referendums regulations make similar changes for the purpose of business referendums.
Overall, these provisions make sensible and relevant changes for the conduct and administration of mayoral elections and neighbourhood planning referendums, in line with those that have been made already for UK parliamentary elections. They are designed to increase voter participation, further improve the integrity of our electoral system and ensure that the processes underpinning our elections are both more robust and more relevant to the needs of voters. I commend these instruments to the Committee.
Lord Kennedy of Southwark
My Lords, I shall deal with each of these regulations in turn. I intend to be fairly brief. The Electoral Registration and Administration Act 2013 (Commencement No. 4 and Consequential Provision) Order 2013 is welcome. It seeks to deal with the, frankly, appalling situation of voters turning up at polling stations and being denied a ballot paper. None of us will forget the scenes at the most recent general election of angry voters being denied their right to vote. That was wrong and reflected badly on us as a nation and as a mature democracy.
I note that the Electoral Commission has raised some concerns. As a former member of the Electoral Commission, though, I say that the Government are absolutely right on this. The concerns are slim and are a near impossible eventuality. It will, however, be important to get the guidance right across the piece. Unfortunately, when you are dealing with hundreds of returning officers, thousands of electoral staff and thousands of presiding officers on polling day, there is a risk of someone getting the application of the regulations wrong. I very much hope that the commission and the Government will seek the expertise to be found at the AEA, SOLACE and the political parties on getting the guidance right. It needs to be crisp, clear, straightforward and useful to implementing these regulations.
We also have to ensure that police officers or PCSOs are available as we get to the close of poll. I do not want to see disputes outside polling stations about who arrived at what time and who did not arrive on time. I am aware that we have already passed a previous SI in respect of the European elections, and these SIs refer to the UK parliamentary and local mayoral polls as well as neighbourhood planning referendums. Can the noble Lord confirm that we will pass SIs in respect of local authority and parish council elections in time for this year’s local election on 22 May? Can he also tell the Grand Committee when the SIs will be laid for the local mayoral referendums, council tax referendums and PCC elections?
It is important that all these rules that relate to elections are kept under review. I was first involved in fighting elections 35 years ago—which I am sure noble Lords will find it hard to believe—and the changes that I have seen in that time have been enormous. The Government have a duty to ensure that the law keeps pace with the changes we see all around us. I have responded to a number of these statutory instruments in this House, during my time as a member of the Electoral Commission and as an official of the Labour Party for over 20 years. If there was ever an area of the law that needed consolidating and bringing together under one Act of Parliament, it surely must be the law in respect of elections and electoral registration. There are so many different aspects of the law in force in numerous Acts of Parliament, going back to who knows when, frankly, that it is confusing for everyone involved, in particular for members of the public, let alone practitioners.
I noticed in the amendment regulations that there are no numbers for the people standing in mayoral elections. I understand that that has been in force for some time—it is not new—but it had completely passed me by. Can the noble Lord tell the Grand Committee how taking away the numbers from the candidates helps people understand which candidate they are voting for? Normally you would vote for Gardiner number 1, Kennedy number 2, or Wallace number 3, but you now cannot do that because the numbers are not there. I hope that that will not be a trend in further SIs for other elections, particularly in local elections and where there are multiple candidates, as it would cause complete confusion.
I also note that the noble Lord made no mention of political parties. In parties, you have to have practitioners to understand elections—that is how processes work. The Government should consult all parties on these issues, not just leave it to the Electoral Commission, the AEA and SOLACE, great bodies though they are. There are also important views to be had from practitioners on the other side of the fence. I hope that the noble Lord can respond to those points in his reply.
Lord Wallace of Saltaire
I thank the noble Lord for those helpful comments. As he was talking about his long experience in local elections, I calculated that my first election campaign was a mere 52 years ago. I say that with particular enthusiasm because, when I said during Questions this afternoon that I recalled debating the question of an English Parliament in 1968, the noble Baroness, Lady Warsi, was kind enough to turn to me and say, “You couldn’t have been old enough”. However, I was. The second election campaign I took part in was the Orpington by-election, which returned Eric Lubbock, now the noble Lord, Lord Avebury, to the British Parliament, which was a short while ago. So we have all struggled with election regulations and their proper consideration for some time.
I can recall as a young man talking to someone who had stood in a by-election during the Second World War, who told me just how many regulations had not been observed under those conditions and the efforts which some locals took to ensure that some votes were not counted. Nowadays we have some highly effective and dedicated EROs and others at local level with whom we have to co-operate in close partnership. The noble Lord is quite correct to say that perfection is not possible in every single polling station throughout Great Britain, but efforts are taken to make sure that, as far as is humanly possible, the same regulations are obeyed in the same way throughout the country.
Lord Kennedy of Southwark
The Minister may be correct about the effect of removing the numbers from the mayoral election ballot papers, but one of the big problems that such ballot papers cause is that many people go to vote and put a cross or mark by the second column and not the first, and are then disqualified. A huge number of people do that. It may make the ballot papers clearer to remove the numbers—I am not sure by how much—but the amount of votes discarded is a real problem. Can the Minister confirm that there is no intention to remove the numbers from ballot papers for local elections? As he will know, in the local elections in May, particularly in London but also elsewhere, there will be a number of candidates.
Lord Wallace of Saltaire
On that, I must write to the noble Lord. I am conscious that some extensive research has been done on the best design of all the papers used. What is coming back to us is information on what is felt to be most friendly and easy to understand for the local voter.
I can now tell the noble Lord, through the miraculous device of having officials behind me, that the Government recognise the concerns that have been raised by parties and electoral administrators about the proposal to remove numbers on ballot papers at local and parish elections and the impact that it would have in contests in multimember wards where the voter is electing more than one candidate. We will carefully consider the concerns that have been raised before we finalise the form of the ballot paper at these elections. I therefore look forward to further conversations off and on the Floor with the noble Lord and others on this question.
Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2014
(10 years, 9 months ago)
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Lord Wallace of Saltaire
That the Grand Committee do consider the Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2014.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments.
Neighbourhood Planning (Referendums) (Amendment) Regulations 2014
(10 years, 9 months ago)
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Lord Wallace of Saltaire
That the Grand Committee do consider the Neighbourhood Planning (Referendums) (Amendment) Regulations 2014.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments.
Legislative Reform (Overseas Registration of Births and Deaths) Order 2014
(10 years, 9 months ago)
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Lord Wallace of Saltaire
That the Grand Committee do consider the Legislative Reform (Overseas Registration of Births and Deaths) Order 2014.
Relevant document: 18th Report from the Delegated Powers and Regulatory Reform Committee
Lord Wallace of Saltaire (LD)
My Lords, this legislative reform order concerns a minor amendment to legislation that would allow the Foreign and Commonwealth Office to centralise and modernise one of the consular functions it offers to British nationals overseas. It would allow a minor change to Section 41 of the British Nationality Act 1981, which would in turn allow the FCO to amend its own regulations in order to centralise in the UK the registration of births and deaths of British nationals which occur abroad.
Consular birth and death registration is not a legal requirement. It is an optional service available to those born overseas who could have an entitlement to British nationality at birth and to British nationals who die overseas. There is no UK legal requirement for a consular birth or death registration. Consular birth or death registration does not confer British nationality.
To go into greater detail, Section 41 of the British Nationality Act limits the regulation-making power in such a way that, in nearly all cases, the registration must be done overseas. Once both the British Nationality Act and the FCO’s regulations have been amended, the FCO will be able to establish a central consular birth and death registration unit in the UK, responsible for registering all consular births and deaths for British nationals overseas.
The draft legislative reform order was laid on 5 December 2013 by the FCO. It is proposed to be made under Sections 1 and 2 of the Legislative and Regulatory Reform Act 2006. This allows a Minister to make provision by order for removing or reducing any burden resulting directly or indirectly from legislation, and for improving the delivery of a service.
The FCO conducted a 12-week public consultation, from July to October 2013, which was sent directly to 18 expatriate organisations around the world and was promoted both on the gov.uk website and on the FCO’s travel advice Twitter account, which has more than 47,000 followers. There were seven responses to the consultation; only three of these completed the survey’s online questionnaire, all responding that they supported the proposed centralisation of the service. Some respondents did ask practical questions about how the new system would operate. The low response rate reflects the fact that this is a relatively low-volume and non-essential service. Following the consultation, the FCO decided to proceed with its plans. It concluded that, although the change may mean that a few expatriates may incur slightly greater costs in the short term because of the need to post original documents to the UK, the majority will benefit from not having to travel to an embassy or a high commission to submit an application.
The FCO intends to reduce fees for this service once the new central unit is up and running. The unit will provide a more consistent customer service, be more effective in determining complicated nationality decisions and provide a more modern online application and payment system, in line with the Government’s digital by default strategy. Another determining factor is that centralisation will free up consular staff in the FCO’s overseas network, allowing them to focus more on their primary purpose of assisting British nationals in distress overseas, particularly the most vulnerable. This is completely in line with the FCO’s new consular strategy, which was launched in April 2013.
Following the laying of the LRO in December, the Delegated Powers and Regulatory Reform Committee confirmed its satisfaction that the order meets the tests set out in the 2006 Act. The committee was satisfied that the legislative reform order procedure is an appropriate way to amend the British Nationality Act 1981 and that the affirmative procedure is appropriate for the change proposed. The LRO is required to amend the British Nationality Act 1981 to allow the FCO to register in the UK births and deaths that occur overseas.
The current method of registration is inconvenient for many customers and inefficient for the FCO. This is partly because FCO staff are losing their nationality decision-making expertise overseas since the overseas passport service was transferred to Her Majesty’s Passport Office and centralised in the UK. The FCO plans to centralise this service into a new single-purpose unit by the end of 2014. Centralisation will allow the FCO to make efficiencies, pass on savings to customers through reducing fees once the service is up and running, reduce the risk of making wrong nationality determinations and give greater focus to its primary consular function of assisting vulnerable British nationals in distress overseas.
Consular birth and death registration is not, I repeat, a legal requirement. It is an optional service taken advantage of by a small number of people, but it is available to those born overseas who could have an entitlement to British nationality at birth and to British nationals who die overseas. Consular birth registration is a separate service from passports and immigration. It does not confer nationality and does not necessarily lead to the issuing of a British passport. It is solely an optional means of recording a local birth overseas with an official English-language document. To manage customer expectations of the value of a consular birth certificate, the FCO will include a disclaimer to explain that the registration is not a UK birth certificate, does not replace the original birth certificate issued by the authorities in the country where the birth took place, is not a certificate of identity and that the holder does not acquire British nationality through the registration.
Moving to an online system, with a common online application and payment procedure, will provide a more efficient and convenient procedure for customers. The IT will be ready and tested ahead of rolling-out centralisation from April. It will be a simple upgrade to the FCO’s existing Compass system, which has been in use for many years. The FCO aims to be fully centralised by the end of 2014. If a customer has no internet access then the application may be made at the appropriate overseas post. As registrations are optional and rarely time sensitive, the FCO anticipates providing this assistance in only a small number of cases. It may help if I remark that in 2012 the UK registered some 6,200 births and some 550 deaths overseas; this is a small number.
In conclusion, I stress once again that the proposed amendment to legislation is a minor one that will help the FCO to modernise and make more efficient the consular service that it offers to British nationals overseas. This will help the FCO to reach its major goal of streamlining non-essential services and helping our most vulnerable citizens in trouble overseas.
Lord Kennedy of Southwark (Lab)
My Lords, in respect of the legislative reform order, I have a few brief comments. The present regulations oblige the FCO to register births and deaths overseas of qualifying British nationals when asked. These procedures are different, depending on where the events took place. I accept that it is a complex process which needs trained and qualified staff to undertake this work.
I understand that the passport issuing service has been centralised from around the globe back to the UK some time ago. I can see the merits of setting up a similar procedure back in the UK, with a unit of trained staff which can develop real expertise in this area of work. Can the noble Lord assure me that this is genuinely seen as a sensible efficiency measure and not some sort of back-door reduction in services? Can he tell the Grand Committee that he is confident that, in all cases, this new system will be better and that at no point will a British citizen living abroad be disadvantaged by moving to this new system?
Whether it is the joyous occasion of a new life being brought into the world or the death of a loved one, the official processes that have to be gone through should be done as simply and quickly as possible. In the case of deaths overseas, there will also be conditions from the country in which the death occurred that will need to be complied with. From the points that the noble Lord made, he has assured us that in no case would getting a body back from abroad be more difficult with the adoption of the legislative reform order. In respect of births and death, is this purely an optional process that people and families can use, or not, as they decide? If that is the case, I have no further points to make on this order.
Lord Wallace of Saltaire
My Lords, the noble Lord touched on a number of wider issues. On British citizens resident abroad, we are in a different world from 50 or 100 years ago. That is part of why we need to adjust. After all, communications are now infinitely more rapid and easy than they were even 50 years ago. My wife spent five years working in Florence, and we spent some time talking to the British consul-general in Florence, who used to play a large role in the days when a relatively small number of rich British people lived in Italy, out of touch with Britain and needing the help of the local consul. Now that they fly whenever they like from Florence airport to Gatwick, there are instant communications and we are all within the European Union—and long may that last—we do not need consular services of that type.
Part of what has shifted has been that we are therefore operating on a different level. The numbers of British citizens living abroad and, even more, the number of British visitors abroad has mushroomed on an astonishing scale over the past 50 years. I find it quite surprising how small the number of registered births and deaths from abroad has been, given that I have this image—partly from my elderly parents’ stories of holidays in Spain and Portugal—that lots of elderly people go on holiday to those countries and do not quite make it back afterwards. Obviously, this is not a wide-scale activity.
I would argue that this is a sensible efficiency measure, which allows for careful checks of people’s backgrounds and allows the local staff to concentrate on those who are vulnerable—including, of course, those who fall ill while abroad—those who are charged with crimes or indeed imprisoned while abroad and the families of those who die while abroad.
Localism Act 2011 (Consequential Amendments) Order 2014
(10 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Stowell of Beeston
That the Grand Committee do consider the Localism Act 2011 (Consequential Amendments) Order 2014.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)
My Lords, the Localism Act 2011 introduced council tax referendums as a replacement for the previous capping regime. It did this by amending the Local Government Finance Act 1992, into which it inserted a new chapter—Chapter 4ZA—on council tax referendums and a new Section 31A, which changed the way local authorities in England determine their council tax. Other consequential amendments were made to legislation, including to the Greater London Authority Act 1999.
The order before the Grand Committee today updates the legislation to take account of changes that have taken place since the Act was passed. The order corrects several minor drafting errors, such as the incorrect classification of grant repayments as income rather than expenditure, and it provides a route for the GLA to recover from errors and oversights during the budget setting process. I do not propose to cover each of the amendments in detail, but I will just give a summary of what each article in the order does.
Article 2 details how local authorities should take account of any transfers from their general fund to their collection fund when determining their council tax requirement. Such transfers would be rare but theoretically possible, so it seems sensible to include a reference to them in legislation.
Article 3 makes it a requirement for major precepting authorities, such as county councils, when estimating their expenditure for the year, to take account of certain payments which may become due to billing authorities. This is again a minor amendment to ensure that legislation captures all the existing payments and transfers between authorities.
Article 5 corrects a drafting error in amendments made to the Greater London Authority Act 1999 by the Localism Act 2011. It requires repayment of grants by the GLA to be classed as expenditure rather than—as currently, and incorrectly, stated—as income.
Article 6 removes a redundant reference in the GLA Act to “relevant special grants”.
Article 7 also amends the GLA Act to address an unforeseen deficiency in the statutory timetable for the GLA when setting and revising its budget and council tax requirement. If the GLA were to set an excessive council tax increase, in common with the obligations on all local authorities it would be required to hold a binding referendum to seek local agreement to the increase. As part of this process, the authority would be required to draw up an alternative budget that did not require an excessive increase in council tax, which could be adopted if the referendum was lost. There are fixed statutory deadlines for these budgets to be set, revised and approved. Currently it is possible for the GLA, through error or oversight, to set an excessive council tax increase without leaving itself sufficient time to gain approval for an alternative, non-excessive budget. Article 7 provides the GLA with a way to recover from such a situation, by allowing the Assembly to approve a revised non-excessive budget at a later date.
A copy of the draft order was shared with the GLA and revised in the light of their comments. I commend the order to the Committee. I beg to move.
Lord McKenzie of Luton (Lab)
My Lords, I thank the noble Baroness, Lady Stowell, for introducing the order. I do not think we will detain her long in our consideration of the amendments that it makes, although this is one occasion—perhaps the first—when I found the Explanatory Note somewhat more impenetrable than the actual instrument.
As we have heard, the amendments focus on aspects of the calculations necessary as a result of the changes brought about by the Localism Act for so-called potentially excessive amounts of council tax. They amount to a capping regime and are driven by the determination of basic amounts of council tax for a financial year, rather than, as previously, budget requirements. Whatever our views on these arrangements, we accept that the detail of the calculations and the process should be logical.
Article 2 is said to be consequential and aimed, it seems, at ensuring symmetry by making sure that sums transferred from an authority’s general fund to its collection fund are excluded from the calculation of expenditure, just as funds transferred in the opposite direction are excluded from income. I think that that is the purpose, but I presume that this is not retrospective. Can the Minister say what the impact has been on any specific local authority situations of these provisions being absent? Is it possible that a preceding year has been done on the basis of the current rules, and can she therefore say what the implications of this change are?
Article 3 requires estimated expenditure as well as payments and receipts to be taken into account when calculating council tax requirements. Will the Minister assure us that there will be no double counting, whereby amounts estimated for one period are excluded from a later calculation when they are actually paid?
Article 5 is a consequential amendment to ensure that repayment of grants are taken into account on the expenditure side of the equation rather than netted as income. The Minister said that this corrected an error in the drafting. Can the Minister say a little more about the nature of the grants involved and the implications of the provision? How many authorities’ calculations have treated grant repayments as income to date, and how will matters be rationalised if they have? What is the impact of this? Does the new treatment affect the calculation of amounts of council tax in any circumstances?
So far as Article 6 is concerned, we accept that the provision is purely consequential.
On Article 7, the Explanatory Note was most difficult to fathom, but at the end of the day it seems to be essentially about a process issue. We understand that there is currently a range of circumstances in which the London Assembly has to initiate a substitute consolidated budget, or substitute council tax requirement, where the Mayor has failed to present one. However, currently these have to be made within statutory deadlines. Where a major precepting authority fails to notify an excessive increase to a billing authority, the precepting authority must issue a precept based on substitute calculations. However, until it does so, the billing authority cannot pass any funds back to the precepting authority, so it needs to have a process for making substitute calculations at a later date. Is our understanding of that correct? Is that all there is to this article?
Subject to any points the Minister may make, we certainly would not seek to resist the order.
Baroness Stowell of Beeston
My Lords, I am grateful to the noble Lord, Lord McKenzie, for his comments and his point that, while we may differ on the underlying principles associated with the order, he agrees with us on the need for accuracy and, therefore, the importance of making the order.
The noble Lord raised a few questions which I will seek to address. He asked whether the order was retrospective and I can confirm that it is not. On Articles 2 to 5, he asked whether there had been any problems related to these inaccuracies being in place. We are certainly not aware of any reported problems, losses or errors on the part of local government due to the issues addressed by these articles. These are things which we see are inaccurate and need to be changed, but we are not doing them because we have had things reported to us as problems which need to be taken care of. The noble Lord also asked about double counting. Based on the information that I have given, I can confirm that the concern that he raises would not arise from the changes we are making.
Let me add a few more points to reassure the noble Lord. We are making the amendment in Article 3 because payments made by billing authorities to precepting bodies are sometimes subject to revision during the year, which could involve the precepting body making a payment back to the billing authority. The article requires major precepting bodies to take into account any estimate they make of such payments.
The noble Lord asked whether Article 5 would affect the basic amount of council tax calculations. The answer is no. There was, as I said, a drafting error when the provisions were first produced, so it is right to make that change; it is clearly inappropriate for them to remain in place.
The noble Lord also gave his assessment of what Article 7 meant, which is that it concerns a process issue, and asked whether his understanding of it was correct. He is absolutely correct. This is about process and about making sure that the Greater London Authority is acting in line with all local authorities in the way that it is required to set its council tax and consult its electorate. The order will make sure that, if it is necessary for the authority to hold a referendum because its budget is excessive, it can both do that and introduce a lower council tax rate should the referendum not support the excessive council tax increase. I assure the noble Lord that this is purely about process, and I hope that we will ensure that the situation that the GLA inadvertently found itself in is not repeated. I think that I have covered all the issues raised by the noble Lord.
Lord McKenzie of Luton
I am grateful for those further explanations. I do not propose to prolong this, but perhaps I might come back to Articles 2 and 5, which deal with drafting points. My question is: in respect of prior or current periods, were calculations done on the basis of the legislation as it is before the amendment, or did they anticipate the drafting errors and were therefore done on what we would now call the correct basis? If it was the latter, all well and good; if it was the former, I wonder what the implications of that are.
Baroness Stowell of Beeston
Yes, I can confirm that they were operating in line with these amendments: they have not been operating outside of the requirements of the Act.
Child Support Fees Regulations 2014
(10 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do consider the Child Support Fees Regulations 2014.
Relevant documents: 18th Report from the Joint Committee on Statutory Instruments, 23rd and 27th Reports from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)
My Lords, I will speak also to the draft Child Support (Ending Liability in Existing Cases and Transition to New Calculation Rules) Regulations 2014.
These regulations were laid before both Houses on 2 December 2013. They enable the department to charge application, collection and enforcement fees for the statutory child maintenance scheme introduced in 2012, which is delivered by the Child Maintenance Service. They also make provision for the department to close cases on the 1993 and 2003 schemes delivered by the CSA, and specify the means by which existing clients must exercise their choice to make an application to the 2012 statutory maintenance scheme. I am satisfied that these instruments are compatible with the European Convention on Human Rights.
Before addressing the regulations in detail, I should emphasise that the programme of reform began in 2006 when Sir David Henshaw delivered an independent report on the future of child maintenance. In his report, Sir David recommended stopping using the CSA as a default option for parents, and introducing charges to provide both parents with an incentive to collaborate. Since then, as part of our reform programme, we have ended compulsion on parents on benefits to apply to the CSA, secured the powers to introduce a new child maintenance system and introduced a full disregard of child maintenance for the purpose of assessing benefit entitlement from 2010.
All these actions have been about helping parents to collaborate in the best interests of their children and to reduce levels of conflict between parents after a separation. This is because evidence suggests that children do better when their parents work together. We are taking a twin approach to increasing the number of parents who work together after a separation to agree child maintenance rather than relying on state intervention. First, we are supporting them to work together on not only child maintenance but the whole range of issues faced following a separation. Secondly, we are incentivising them to think twice about whether they could set up a more collaborative family-based child maintenance arrangement without automatically turning to the statutory scheme.
We are therefore reforming the child maintenance landscape to put collaboration and family-based arrangements at the centre. We are investing £14 million in the Help and Support for Separated Families initiative, directing parents to the support they need during and after separation. For those unable to make family-based arrangements, the new, faster, more efficient 2012 statutory scheme, delivered by the Child Maintenance Service, will be there. The 2012 scheme has a built-in HMRC interface.
We opened the 2012 scheme using a pathfinder approach in December 2012 and, following assurance that the processes, procedures and client interfaces were working well, we opened the scheme to all applicants on 25 November 2013. Those making an application to the statutory scheme will be invited to enter into a discussion with the Child Maintenance Options service, which provides free, impartial information and support on the various ways to set up maintenance arrangements. This conversation gives parents the information they need to consider what is the best arrangement for them.
We propose to introduce fees for those wishing to apply to the 2012 scheme and for continuing to use it. Sir David Henshaw’s report recommended this as a balanced incentive. His argument was that people are more likely to consider whether a service is necessary for them if a charge is applied for it.
Evidence shows that more than half of parents with care using the Child Support Agency could reach their own family-based arrangements with the right support. We launched a consultation on the draft Child Support Fees Regulations 2013 and the draft Child Support (Ending Liability in Existing Cases and Transition to New Calculation Rules) Regulations 2013 to seek feedback on our proposals, and published the Government’s response in November 2013.
We listened carefully to the feedback and reduced the proposed application fee from £100 to £20. Vulnerable applicants who declare that they have experienced an incident of domestic violence or abuse and have reported it to one of the organisations named in the guidance referred to in the regulations will be exempt from paying the application fee. Those under 19 years of age will also be exempt.
We have reduced the parent with care collection fee from the proposed “7 to 12%” to 4%. By reducing the fee to 4%, we have shifted the balance in favour of the parent with care even further so that it stands in a one-to-five relationship with the 20% non-resident parent fee. It is also charged only on money actually collected. It is the non-resident parent who faces by far the highest charges, reflecting the fact that they have greater control over whether they use the collection service. We believe that both parents should make a financial contribution towards the cost of the service. The proposed fees will bring in revenue of £170 million per year. This is a financial contribution towards the cost of the service, which remains heavily subsidised by the taxpayer.
We wanted to ensure that there was provision to enable parents who need to use the statutory scheme to avoid ongoing collection fees. We have therefore introduced Direct Pay. Direct Pay is where the Child Maintenance Service calculates the amount payable and the non-resident parent makes payments directly to the parent with care. Direct Pay will provide a way for parents to access the statutory service in a way that can help rebuild trust between them. We are also proposing enforcement charges for non-resident parents to encourage them to comply with their commitments and to help to offset the cost of administrative action to enforce compliance. The current system offers no financial incentive for non-resident parents to pay in full and on time.
There are currently three statutory schemes in operation: the 1993 and 2003 schemes, delivered by the CSA, and the new 2012 scheme, delivered by the Child Maintenance Service. We propose that cases will close on the 1993 and 2003 statutory schemes. We considered the responses to the consultation on these regulations and have altered our initial approach.
The main change is the order in which cases are selected for closure. The details of this order are included in the scheme that accompanies these regulations. We will divide the caseload into five segments and close them sequentially. To summarise: the first cases to be closed are those where the non-resident parent is assessed to pay a nil amount, followed by those where the non-resident parent is non-compliant. The next cases to be closed will be those handled off the system, followed by the remaining compliant cases.
The final group of cases to be selected will be those where there is an enforced method of payment in place, or legal enforcement action ongoing. Non-resident parents in this category will be invited to undergo a positive test for compliance. They will be required to demonstrate their ability to pay voluntarily for a period of six months. This will inform the department’s decision as to whether they should be allowed to pay the parent with care directly, and avoid collection fees, if an application is made to the 2012 scheme.
This programme of reforms aims to promote collaboration between separated parents in order to ensure that their children achieve the best outcomes in life. We have consulted on both the fees and the case closure proposals, changing our initial proposals on fees and the sequence in which cases will close. I have held two briefing sessions in the House of Lords with the aim of keeping noble Lords fully informed on the reform programme.
I understand that introducing fees to encourage collaboration is a significant change, but emphasise that under Section 141 of the Welfare Reform Act 2012 we have committed to reviewing the effect of the fees regulations within 30 months of their coming into force, and to laying a report about the conclusions of that review before Parliament.
I spoke earlier of the careful way in which we introduced the 2012 scheme. We will continue with this approach, and will not introduce fees or begin the process of closing cases on the 1993 and 2003 schemes until we are confident that the 2012 scheme is working well. We anticipate that this will be in the summer. Those on existing child maintenance schemes will have already been told about case closure and the introduction of the charging of fees. We will not begin charging collection fees until six weeks after the regulations come into force, so anyone affected will have plenty of notice about when the collection changes will begin to affect them personally. I beg to move.
Lord Mackay of Clashfern (Con)
My Lords, I want to comment on Regulation 7(3) of the fees regulations and, incidentally, on Regulation 8(2). I have interests in children’s charities and care organisations, which may or may not be relevant to what I am going to say now but I declare them for caution.
It is rather remarkable that the Explanatory Memorandum comments on this provision and puts the point rather succinctly:
“The introduction of fees is politically significant. Child maintenance elements of the Welfare Reform Act 2012 had a difficult passage through the Upper House and charging persons with care, often single mothers of limited means”—
I do not know how many people are of unlimited means, but anyway it is quite clear that these are people of rather limited means—
“remains a controversial issue for stakeholder groups, service users and the wider public”.
I assume that I am included in the wider public.
I am entirely in favour of everything that can be done, and that this Government are doing, to try to help people who have had a relationship that has broken up. I am familiar from long ago with divorce cases; I did a lot of them but, as the Committee knows, that was a long time ago. However, the difficulties of interpersonal relationships were as formidable then as they are now, and I wish every success to the moves that have been made to try to help people by the Department for Work and Pensions, the Ministry of Justice and the Department for Education, which are involved in the Children and Families Bill, which is having its Third Reading tomorrow. I went to a meeting that Ministers organised in connection with that Bill, and I had to remind them that the DWP was also working in this area of trying to help people. Of course, they said that they work very closely together, so I am glad to hear that. The closer they get together, the more chance that their measures will be successful. As I say, I wish them every success in that. Unfortunately, so far those efforts have not produced universal success, and the regulations contemplate at least the possibility that they will not have universal success in future.
The point that I want to stress is that when it comes to the obligation to maintain a child, the parents’ obligation is absolute. It does not matter what sort of dispute they have had with the other party to the arrangements in the past. I accept immediately that there are many different types of squabble that can emerge, and it is by no means clear that the non-resident parent is always fully responsible. I entirely understand that for the question of the break-up of the arrangements, both parties usually have some degree of responsibility. When it comes to the payment of maintenance, though, that obligation is absolute and is not qualified by the fact that the other party to the arrangement has been terrible, difficult or whatever. That is what these fee regulations are concerned with.
The collection fee that I have referred to appears when the collection system comes into operation. That happens only when the Child Maintenance Service, not the other party, is satisfied that without the collection service, maintenance is unlikely to be paid. That is in Section 137 of the Welfare Reform Act 2012. The decision that the collection service comes into operation, with its charges, is entirely the responsibility of the Child Maintenance Service and has nothing whatever to do with any responsibility of the parent with care. In that situation, the imposition of the collection charge on the parent with care is unjustified in principle.
Of course, this is not by any means the first time that I have raised this issue, and I thank the departmental Ministers, who have changed over time, for the courtesy with which they have listened to the same thing being said again and again. That has not been an altogether unproductive process, because concessions have been made that I warmly welcome. The concessions are narrated in the Explanatory Memorandum; I will not weary the Committee by going over them but I agree that they are quite substantial. The most recent one was the reduction from the 7% to 12% charge that was originally thought of to 4% in the case of the parent with care. As I say, I welcome that very much and am glad that it has happened. However, as the Explanatory Memorandum says, this charge remains controversial, and I think it is unjustified in principle.
I did not feel inclined to table a Motion of Regret or a Motion to set aside the regulations, for pretty obvious reasons but primarily because the Government know what our House decided about this matter long ago. Of course, it was overcome by the financial protection of the House of Commons and therefore went through. But as the Explanatory Memorandum says, the passage through the upper House was not entirely easy. That vote is there and, as far as I know, opinion on that point remains.
I submit that the review that is to take place 30 months after the matter comes into force will take particular account of this point, which I am sure will remain controversial until the inquiry is completed, whether or not I am here to promote it—although that may be a matter of opinion. I do not intend to weary your Lordships further but I do wish to indicate the principled objection to this that remains.
Baroness Howe of Idlicote (CB)
My Lords, your Lordships may remember that I was one of those who supported the noble and learned Lord, Lord Mackay of Clashfern, in the very important amendment that he has just referred to. I, too, remain concerned that despite the concessions made by the Government in reducing the application fee for a child maintenance calculation to £20 and reducing the parent with care collection charge by 4% on every payment—on which I congratulate them—there is a real danger that the effect of the new charging regime will be that fewer children end up with fair and reliable child maintenance.
In this respect, I share the conclusion of the Secondary Legislation Scrutiny Committee, which found that,
“although the transfer scheme may make savings it may imperfectly achieve the overarching objective of providing financial support for children”.
I want to press the Minister for assurances that the Government will closely monitor what happens to maintenance for children whose CSA cases are closed during the next three years. After all, the department has details of the parents and children so can track what happens to them, case by case, in terms of future maintenance arrangements—or the lack of them.
It will not be enough for the Government to congratulate themselves if fewer parents apply to use the statutory maintenance service, unless they know for certain that the parents concerned have made private arrangements for maintenance that result in regular payments of realistic amounts for the children concerned. Similarly, it will not be enough to be satisfied that fewer parents are asking to use the collection service and have opted for a direct payment arrangement—again, unless they know for certain that those direct payment arrangements are resulting in regular payment of the liabilities that have been calculated by the Child Maintenance Service.
In the past, the department has said it can assume that every direct payment arrangement is paid in full and on time because, if not, parents with care would ask to use the collection service. Even if this assumption were true now, it will certainly not be true in the future, given that the collection charges are expressly intended to deter parents from asking to use the collection service, regardless of the circumstances. I therefore seek full assurances from the Minister that the department will track in detail how children fare as their CSA cases are closed down and charges are brought in.
Lord Kirkwood of Kirkhope (LD)
My Lords, it is a pleasure to follow my two colleagues in this important debate. My noble and learned friend Lord Mackay led the House in earlier stages of the Bill in a commanding and profoundly serious way. His weight being added to this question is something to which I hope that the Minister and department will pay careful attention; that is also true of the noble Baroness, Lady Howe.
I underscore what my noble and learned friend Lord Mackay emphasised at earlier stages of this discussion: the fee money that we are talking about is actually the child’s. My noble and learned friend is right to point to the clause in the memorandum that says that this is controversial; that is why it is controversial. This money which is being taken out of the system should be going to the assistance of, mainly but not exclusively, poorly paid families who are doing their best to struggle to bring up children in very difficult circumstances. That controversy is not going to go away. I pay tribute to my noble and learned friend Lord Mackay and the noble Baroness, Lady Howe, for the work that they have done in the past.
I also acknowledge that there have been concessions, and I do not think that my noble friend the Minister needs an alibi. He has other fish to fry; this is none of his business. It is a very bad change. I actually take a more fundamental view. I have been of the opinion since 1991, when I started on all of this, that charging was wrong in principle. I am long enough in the tooth to remember the period during 1993 and 1995 when we tried charging. I have said this before: it was a disaster. Why? Because nobody collected any money. They were not collecting fees or enforcing debts, so people were saying, “Why are we paying these fees when we are not getting any money?”. The scheme was quickly abandoned. We need to learn lessons about that. I do not believe that even the new, all-singing, all-dancing Child Maintenance Service—while the improvements are welcome—can offer guarantees that the enforcement will be effective.
Changing the balance of my concern, because I have always been really worried about the parents with care more than anything else, some of the charges which are going to be levelled at the non-resident parents are eye-wateringly high. There are a lot of non-resident parents out there who do not understand the difference that will be made with the combination of a recalculation and a collection fee. I wait with bated breath to see where this new co-operation which is going to break out all over the place is going to start. It is fantasy. A long time ago I was a divorce lawyer, and I know what people can do to one another when they separate. It is sometimes quite unbelievable. I am sure that my noble and learned friend Lord Mackay, with his previous distinguished legal career and all his work with children’s charities, would reinforce that. I object to fees in principle. I do not think that they will work. I hope that I am wrong, but that has always been my position and it is worth restating.
Secondly, this system that we have used for charging fees is flawed. Again, I agree with everything that my noble and learned friend Lord Mackay has said, but I want to add a point which has been drawn to my attention by Gingerbread, which is right in saying that if the Child Maintenance Service has the weight of decision in testing the question of “unlikely to pay or not”—to allow the parent with care to join or stay in the service—that is a contestable decision. It is an important decision for both parents. It is an administrative decision which is taken out of both their hands. I do not know what assurances have been given, or whether there is anything that I have missed in the regulations which makes it a requirement to explain in detail why that decision has been taken, but it seems to me contrary to natural justice. In any other area of public life where such an administrative decision is made an inbuilt independent appeal is automatically attached to it. That is entirely absent from this new system. I appeal to my noble friend to go away and look at the provisions in the Child Maintenance and Other Payments Act 2008, Section 6(5), where, I think, the Secretary of State is given discretion about introducing an appeal. As part of the undertaking that I hope my noble friend will give to the Committee to continue to monitor all this carefully there should be the possibility of the Secretary of State making that discretionary decision, so that we can have an appeal available, if it becomes obvious—as I believe it will—that it is necessary.
Baroness Sherlock (Lab)
My Lords, in speaking to these regulations I declare an historic interest as a former non-executive director of the Child Maintenance and Enforcement Commission until 2010, and a very historic interest as a former chief executive of the National Council for One Parent Families, which is now lost in the mists and merged with Gingerbread.
I thank the Minister for his explanation of these regulations, and I am grateful to other noble Lords who have spoken on this for the illumination they have added. Most of the time, when I face the Minister across the Dispatch Box, I would happily change places, but when he faces down the noble and learned Lord, Lord Mackay of Clashfern, he is welcome to that seat, at least for the duration of these proceedings. I wish him well in answering the points raised by the noble and learned Lord.
I thank all those organisations which sent in briefing, including Gingerbread and the Resolution Foundation and, indirectly, Families Need Fathers. We on this Committee are also indebted to the noble Lord, Lord Goodlad, and his Secondary Legislation Scrutiny Committee, which did an extraordinarily thorough job on these regulations. It identified gaps and question marks and pursued Ministers gently but persistently, drawing information from them bit by bit until it got answers. I put on record my appreciation of its intelligence, analysis and perseverance.
These are significant regulations, and despite the lengthy impact assessment, we all know that we do not really know what will happen as a result of both the new scheme and the charges being imposed on both parents. The Government’s aims for these reforms, which were set out clearly in the Green Paper, Strengthening Families, Promoting Parental Responsibility, were twofold: to achieve cost savings for the taxpayer and to create an incentive for parents to work collaboratively to make family-based arrangements rather than enter a statutory scheme.
The Secondary Legislation Scrutiny Committee’s excellent 23rd report of the current Session draws these instruments to the special attention of the House on the grounds that they may imperfectly achieve their policy objectives, so it is important for the Minister to reassure the Committee on this point. Specifically, the Select Committee says:
“we conclude that although the transfer scheme may make savings it may imperfectly achieve the overarching objective of providing financial support to children”.
The committee engaged in a correspondence with the relevant Minister in another place, which eventually drew more information out but in my view was not ultimately satisfactory in providing assurance on that point.
I shall ask the Minister to reassure the Committee on those broad points and then ask some specific questions. First, a number of noble Lords have raised behavioural issues. The impact assessment assumes that fewer cases will enter the statutory scheme as a result of the change, but also suggests that the proportion of arrangements affected will rise from the current 60% to 70%. The assumptions seem to be rather optimistic. The present pattern of compliance in family cases is one thing, but that is not necessarily a guide to what we may expect to see in future. As my honourable friend Kate Green put it in another place, at the moment we have parents who may be choosing positively to co-operate, but in future parents with family arrangements will be those who simply see it as the lesser of two evils. There will therefore be a different set of arrangements going on in family arrangements from those that prevail at the moment, so how confident is the Minister of those figures?
On the cost objective, the Government are clear that they expect to score substantial financial gains from the new scheme being introduced, especially as the result of charging fees. Fees both bring in income and reduce running costs, as parents are deterred from using the system. However, I looked in vain for a parallel level of ambition to increase the amount of child support that would actually reach children, a point made by the noble Lord, Lord Kirkwood. What are the Government’s ambitions in that connection? After all, the point of a child support scheme is not to be efficient. It should be efficient, but its point is in fact to get money from the non-resident parent to the parent with care. Presumably the Government have some ambitions for increasing the amount of maintenance that is going to be transferred to children as a result of the reforms. Could they help us on that point?
I also have some questions about the implementation of the new scheme, some of them touched on by the noble Lord, Lord Kirkwood, and some by the noble Baroness, Lady Howe. This is crucial as the Government always said that they would not introduce fees until phase one of the new system was working well. The Minister told us that the scheme started in November and that they aimed to move people on from next summer. Can he tell us a bit more, as the noble Lord, Lord Kirkwood, also asked, about how the new scheme has been performing so far? I will certainly be interested to hear the answer to the noble Lord’s question about how many cases have been paid in full.
How is the interface with HMRC working? I am particularly interested in self-employed non-resident parents. There is the issue of who is responsible for enforcement. I am assuming that that will lie with the CMS but it would be helpful if the Minister clarified that. A common complaint is when a self-employed NRP declares very low levels of profit on, for the sake of argument, his business but the parent with care believes, or has evidence based on his apparent lifestyle, that in fact a much higher level of income is coming in than might be suggested by the latest set of accounts made available to the taxman. At the moment, if she has that evidence she can go to the CSA and it can investigate that. If that should happen in future, does the CMS have the powers to investigate that or will it be left to HMRC? If the CMS has the powers, will it exercise them? If it is HMRC, what assurances has the Minister had that it will do this and prioritise it over the other workloads placed on its shoulders?
When does the Minister expect to be in a position to publish a full range of statistics on cases being dealt with by the CMS? Will these stats show how many cases transfer from direct pay to collect and pay? See—I have got the jargon. It would be helpful to know what was happening to cases going into the scheme.
By what precise criteria will the Government decide when to commence the full new regime? A Written Answer to my honourable friend Kate Green in another place on 23 January said that the Government will determine when the new scheme is operationally ready for the transfer of cases in accordance with the criteria of,
“the Department for Work and Pensions Project Change Lifecycle Framework”.—[Official Report, Commons, 23/01/14; col. 263W.]
I apologise that I am not immediately able to translate that for the Committee, but perhaps the Minister can do it for me. What does that mean and how will it be applied?
Lord Freud
I thank noble Lords for a set of very interesting contributions to this debate. It is clear that a lot of thought has gone into this area and it has provided a very constructive approach, not just today but over a considerable time. I therefore need to respond to as many of those issues as I can.
As I said initially, and as the statement read out by my noble and learned friend Lord Mackay confirmed, we have consulted on these two sets of regulations and taken views into account. We have changed our initial proposals on fees and on the sequence in which cases will close.
I want to reflect initially on the contributions that my noble and learned friend Lord Mackay has made to the development of these policies. He has made a series of suggestions, both publicly and privately to us, aimed at improving the scheme and helping children. We have listened very carefully to his representations and taken action to reduce the strain on the parent with care. Although my noble and learned friend has made clear his view that the balance is still tilted towards the taxpayer at the expense of the parent with care, I hope that there is agreement that this is a question of striking the right balance and that it is appropriate that we do that by considering actual behaviour.
First, as a result of the consultation, we have amended our proposals for case closure by putting back those cases where parents within the statutory service have most to lose. We have put to the end of the case closure process those cases where money is flowing, which often follows hard-fought compliance, and the flow is maintained only by enforced collections. We have done this to ensure that money keeps flowing and compliance continues. These cases are most likely to fall into the category that my noble and learned friend is most concerned about, where parents with care find themselves unable to establish workable direct payment arrangements regardless of their willingness to do so.
Secondly, the 30-month review allows us to consider actual behaviour, to check that the impact of the reforms is as expected and to provide an indication of whether there are any unintended consequences for clients or the taxpayer. We intend to evaluate the overall impact of the child maintenance reforms in wider society, including the impact on overall maintenance outcomes. Our approach to the review is to use existing survey and administrative data sources where possible, combining these with internally and externally commissioned quantitative and qualitative research where necessary.
Our aim is that the child maintenance system in Great Britain should work better. We are going to focus on the impact on children of these changes. A key criterion for success of our reforms, which will be tested in the 30-month review, would be to increase the number of children benefiting from maintenance. Our estimates suggest that this number should rise, and we look forward to having this confirmed by the review—a point that the noble Baroness, Lady Sherlock, was particularly interested in. If there are fewer children receiving child maintenance as a result of our charging regime, this will be made clear by the 30-month review and we could consider what changes might be required. By that time, we will know how people will behave and refinements to the system, along the lines that my noble and learned friend Lord Mackay has recommended to us in the past—in other words, segmenting the caseload into “can make direct pay arrangements” and “cannot make direct pay arrangements”—can be considered on a more informed basis. To introduce this complexity at this stage would add delay to bringing the benefits of the new system to parents and further complicate the Child Maintenance Service’s processes.
Pressing ahead with the reforms will mean that more children will be better off, as our estimates suggest that there will be an increase in the proportion of positive outcomes for clients on the statutory scheme. This is due to more availability of data and more updating of maintenance liabilities, together with a significant increase in the number of effective family-based arrangements. In the statutory scheme, the effect of the annual review coupled with direct interfaces with Jobcentre Plus and HMRC should mean that in future fewer cases are nil-assessed, meaning that more money could flow. We estimate that the percentage of nil-assessed cases will fall from the current 23% to around 6% of all arrangements in the longer term; I hope that this answers the questions asked by the noble Baroness, Lady Sherlock.
Over the 20-year period considered in the impact assessment published in 2013, including case closure, charging and the overall reform package, the assessment consistently gives a higher proportion of effective arrangements for parents who would have used or will use the statutory scheme than if the 2012 scheme was introduced on its own. As noble Lords have pointed out, we estimate that these reforms are likely to increase the proportion of effective arrangements from 60% to 70%.
There were a large number of questions, and I will try to go through as many as I possibly can. The noble Baroness, Lady Howe, asked how we will know if the arrangements are working for parents. We will be using data from the Understanding Society longitudinal study to assess progress on family-based arrangements across the whole population. She and the noble Baroness, Lady Sherlock, also mentioned the Secondary Legislation Scrutiny Committee. This was responded to by the Minister for Pensions subsequently and that response has now been published.
Baroness Sherlock
I thank the Minister for going through all those questions—I am very grateful. I still have a couple which perhaps he missed out.
The Minister has explained to us that the Government believe that there will be more children in receipt of maintenance and more effective arrangements. However, he did not pick up on the amount of money that will change hands. For example, it would be perfectly possible for someone who was currently getting the full statutory amount through the statutory system to have in future a family-based arrangement in which they agree to take half of that amount to keep each other happy. Will the Government also be monitoring, and set a target for, the amount of child maintenance that is changing hands, and will they monitor in particular whether the amounts for individual families go down? In other words, one could see a change in the mean—by, for example, people who are currently nil-assessed joining the system—but that might disguise a fall in other cases. How well would that be monitored?
I think that I asked a question about the media campaign that Steve Webb had promised in early 2014. Does the Minister have any information on that?
There is a piece of nuance for which I apologise from this side as a pedant. On the question of domestic violence, the Minister said that he is confident that a non-geographic option will be available. Could he reassure the Committee that where domestic violence is alleged or admitted, a parent with care will not be required to accept direct pay unless and until such a scheme is available to them?
Lastly, I want to be sure that I understood his question about enforcement and HMRC. I think that he is saying that it will become more difficult for a parent with care to raise the question of where they believe earnings have been underdeclared. HMRC may deal with the general question of whether enough tax has been paid but at the moment, as I understand it, and I would be grateful if he would tell me whether or not I am right, a parent with care can go to the CSA with evidence showing that the non-resident parent has higher income than has been declared to the CSA—for example, if the lifestyle in terms of a house, a car or money spent would not appear to tally with the relatively small amount of income declared—and it can investigate and address that. Is he saying that that will not happen unless HMRC decides in general terms to conduct a tax investigation?
Lord Freud
On the question of the amount of maintenance, our estimate at this stage is that more children will get maintenance. That is what I have said. How much that maintenance is in money terms is less clear at this stage. It is one of the things that we will find out. I need to remind noble Lords that assistance may take many forms to children—more shared care—so the question is not just about money. It is about the level of support. That is an area that we will be looking at closely.
On bank accounts, the parent with care will be able to dictate to which account the non-resident parent must pay. If that fails to happen, it will result in a return to the collection service, which I think in practice deals with the noble Baroness’s question.
At the moment, the CSA gets a complaint from the parent with care. The place where it goes to check is HMRC. That main checking area becomes irrelevant when there is a direct feed. Where she is suspicious—it is a suspicion—of, effectively, tax fraud, that is what we are talking about.
Baroness Sherlock
So the CSA does no investigating of its own? I am sorry; I must have misunderstood that point.
Lord Freud
No. Currently the CSA checks with HMRC. As now, it will be able to provide information to support its suspicions that all might not be well. This is a difficult issue more generally.
On the question about the campaign, we are planning a media campaign using social media and paid-for channels such as radio. We are still finalising those details. The intention is to raise awareness of case closure and to promote parental responsibility. We will get more details of that out in coming months.
With all the issues dealt with—perhaps not to everyone’s absolute satisfaction—I will commit to continuing to provide transparency in the delivery of this programme of reforms. We published a strategy for the publication of information about the 2012 scheme on 18 July last year. We plan to release official statistics once we are assured of the appropriate quality of the data; we expect this to be after April 2014, as I said. Ahead of this, we have used the management information that is available to release limited relevant data on a one-off experimental basis, published on 25 November last year. As I mentioned earlier, we will review the effects of the fees and regulations, and lay a report before Parliament following 30 months of operation. I commend the regulations to the Grand Committee.
Child Support (Ending Liability in Existing Cases and Transition to New Calculation Rules) Regulations 2014
(10 years, 9 months ago)
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Lord Freud
That the Grand Committee do consider the Child Support (Ending Liability in Existing Cases and Transition to New Calculation Rules) Regulations 2014.
Relevant documents: 16th Report from the Joint Committee on Statutory Instruments, 23rd and 27th Reports from the Secondary Legislation Scrutiny Committee
Consumer Credit Act 1974 (Green Deal) (Amendment) Order 2014
(10 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Verma
That the Grand Committee do consider the Consumer Credit Act 1974 (Green Deal) (Amendment) Order 2014.
Relevant document: 18th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)
My Lords, over the past year the Green Deal has been steadily growing in momentum. Around 130,000 Green Deal assessments have taken place. Nearly 500,000 energy-efficiency measures have been installed through ECO, cashback and the Green Deal. One company alone says that it has installed Green Deal measures in nearly 10,000 homes so far.
The financing mechanism, allowing customers to pay through their electricity bills, is only one way of paying for the Green Deal. We now have more than 1,600 Green Deal plans in the system. The Green Deal Finance Company is handling around 130 new plan applications a week, totalling nearly £6 million in funds offered. Forty Green Deal Providers are now able to offer Green Deal finance, and 19 of these are actively writing plans for consumers.
One area where we believe the Green Deal could be particularly effective is the rented sector. Action to improve the energy efficiency of private rented properties is, as we know, badly needed. This sector has a disproportionate number of fuel-poor households—21% overall—and a high number of F-rated and G-rated properties: 13% of the stock, almost twice the national average of 8%. To date, energy-efficiency investment in the rented sector has been constrained by split incentives. The landlord pays for the energy-efficiency measures but the tenant benefits. The Green Deal pay-as-you-save model helps to address this split incentive.
The electricity bill payer, who is normally the tenant, meets the cost of the measures through savings on their overall energy bill. The Green Deal repayments will appear on the tenant’s electricity bill and will be collected by their electricity supplier in exactly the same way as their charges for electricity consumption. However, the cost of these repayments should be matched by the savings in overall energy costs that a tenant is likely to benefit from as a result of the Green Deal energy-efficiency measures. A tenant will pay for the Green Deal instalments only while they occupy the property and are therefore benefiting from the measures. The result is that the tenant will live in a warmer, more comfortable home. When the tenant leaves, the responsibility for making the Green Deal repayments passes on to the new tenant, or to the landlord if there is a void period.
The only situation in which a tenant will have any liability to pay anything in relation to the Green Deal after they have left the property is if they have built up arrears, which include Green Deal instalments, on their electricity bill. When they move out, their electricity supplier will send them a final bill. If there are arrears on the bill for electricity consumption and Green Deal instalments, the supplier will seek the tenant to pay. This is exactly the same process as exists now for tenants.
When a Green Deal plan is first set up, the existing tenant will receive detailed information about the plan and must give their written consent. The Energy Act 2011 provides that they have 14 days in which they can withdraw their consent if they change their mind. The new tenant moving into the property will be made aware of the Green Deal through specific disclosure requirements. For example, the energy performance certificate, or EPC, which is already a legal requirement in the rented sector, will show the presence of a Green Deal plan at the property, the energy savings that will arise and the level of the repayments. A new tenant will therefore have all the information that they need before they decide to rent the property. They also have the right to request a full copy of the Green Deal plan from the landlord or the Green Deal provider.
We expect to see real demand for the Green Deal in the private rented sector, both from tenants who want to live in more energy-efficient and comfortable homes and from landlords who wish to improve their properties. This provides a real win-win. We expect this to increase as a result of the minimum energy efficiency standards that we are developing for landlords. The Green Deal provides a mechanism that did not exist previously for tenants to work with landlords to improve the energy efficiency of their homes. We want to make sure that tenants do not live in cold, damp and draughty houses for which they end up paying too much on their energy bills.
Among the reasons cited by landlords for their caution towards Green Deal finance was that they needed greater clarity about how consumer credit legislation worked with the Green Deal to have confidence to lend at scale. The amendment to the Consumer Credit Act, provided by the order we are debating today, will give that confidence. We have thoroughly reviewed the consumer credit legislation to ensure that it will work effectively with the Green Deal. Although this analysis has taken long than expected, the amendment will now allow the same Green Deal plan to be offered to all customers, irrespective of what type of property they live in.
I turn to the details of the order. The credit arrangement introduced by the Green Deal, otherwise known as a Green Deal plan, is a new form of unsecured credit. In owner-occupied properties the customer arranging the energy efficiency improvements will generally pay the repayments as they are paying the electricity bill. However, as I have mentioned previously, in the rented sector the landlord is likely to arrange for the improvements while the tenant makes the repayments. This has given rise to some uncertainty. When is a Green Deal plan regulated by the Consumer Credit Act, and who is entitled to the protection of the Consumer Credit Act for a Green Deal plan? Is it the tenant or the landlord?
To help to address these uncertainties, the order that we are debating today makes specific amendments to the Consumer Credit Act. The order does not change existing Green Deal policy or its legal framework. The amendments will, however, give Green Deal providers greater clarity and confidence when issuing Green Deal plans. In turn, that will encourage more people to take up the Green Deal.
In particular, these amendments resolve two key issues. First, to address concerns relating to the difficulty in determining whether or not a particular Green Deal plan is regulated, we have now provided that almost all domestic Green Deal plans will be regulated by the Consumer Credit Act, regardless of those who are making the improvements. Tenants moving into a domestic property can be reassured that they will receive the protections afforded by the Consumer Credit Act. Non-domestic Green Deal plans will be regulated only if the person arranging the improvements is an individual, not a business. This approach will greatly simplify the process for Green Deal providers and ensure that in all appropriate cases Green Deal plans are regulated under the Act—including, for example, where a Green Deal plan is set up by a corporate landlord during a void period.
Secondly, while our key policy concern has always been to ensure that consumer tenants receive all appropriate protections under the Consumer Credit Act, we received feedback that the landlord, or the person making the improvements, should be entitled to certain rights and protections, so we carefully analysed this Act to determine which protections would be relevant to them. Following this analysis and discussions with a wide range of stakeholders, our amendment provides that both the bill payer and the person making the improvements are given the protections of a debtor, but each for specified sections of the Act. This ensures that tenants and landlords receive the specific rights and protections that are relevant to their roles under a Green Deal plan.
To make it clear for Green Deal providers which sections of the Consumer Credit Act will apply to a particular person, our amendment sets out whether a reference to the debtor in the Act is to be read as a reference to the bill payer at the time when the plan is made, the current bill payer, any previous bill payers who have arrears outstanding or the person making the improvements. Our approach is that the bill payer, who has liability to pay instalments under a Green Deal plan, will receive all material and appropriate consumer protections. There will be no reduction in the level of customer protection that a tenant can expect. However, the person making the improvements, for as long as they are an owner or occupier of the property, will also receive a number of protections.
Our amendments will not alter the principles, provided for in the Energy Act 2011, that whoever is the bill payer at a given time is liable for making repayments under the Green Deal plan. As mentioned previously, a new bill payer automatically becomes liable for instalments from the time when they assume responsibility for the electricity bill—for example, when a new tenant moves into the property. Landlords will become liable for Green Deal instalments if they become the bill payer—for example, during a void period.
As the Committee may be aware, the regulatory regime for consumer credit is changing on 1 April. After that date, lenders will need to be authorised by the Financial Conduct Authority rather than the Office of Fair Trading. In the next couple of months, we therefore also intend to introduce some small amendments to the FCA’s legislation to reflect the approach set out in this order.
In conclusion, I firmly believe that the amendments to the Consumer Credit Act brought about by this order will ensure that consumers and tenants who pay money under a Green Deal plan receive all the appropriate protections. It will give the clarity that Green Deal providers are seeking and give them the confidence to offer plans to consumers across all property sectors. This will allow them to access the untapped demand and to press ahead with rolling out the Green Deal across the country at scale, delivering warmer homes for us all. I commend the order to the Committee.
Lord Teverson (LD)
My Lords, I thank the Minister for that excellent explanation of this rather technical document. I have to disappoint the Committee by saying that my comments will not be immensely profound today, except to say that I welcome the statutory instrument because it helps to clarify to a number of the parties involved in the Green Deal exactly what happens and when. That has to be a good thing, and I thank the Minister for updating us.
Although a number of us have been slightly frustrated at the rollout of the finance, what the Minister said about the stimulus that the Green Deal has given to a number of people to really investigate getting better insulation for their homes was very important. It is obviously one of the big challenges for our nation in terms of meeting carbon targets, let alone in terms of addressing fuel poverty, that we increase the thermal efficiency of our housing stock, and the programme is at least doing that.
One thing struck me as the Minister was speaking, but I am sure that the answer is that it is no problem at all. With the increased amount of switching that is now going on—much as the Government have encouraged and been quite successful in stimulating—I presume that there is still no difficulty in terms of where the liability goes, arises or follows through after a number of switches of accounts by tenants when they come in, because I hope that that will be an increasing feature of the market in terms of competition.
Baroness Worthington (Lab)
I thank the Minister for introducing this debate and for speaking to this statutory instrument. I also thank the noble Lord, Lord Teverson, for his comments and his quite pertinent question about switching; I had not thought of that and would be interested to hear the response.
If the Committee will bear with me, I want to make a few general comments about the Green Deal and then some specific comments about the statutory instrument. I agree that if the impetus behind the instrument is to create clarity about the protections that exist for tenants and owners under consumer protection legislation, it must be a good thing and we support it.
It is interesting to see how the Green Deal more generally is playing out. We have seen 130,000 assessments undertaken but, from those, fewer than 700 financial deals being taken out. The Minister in the other place has been keen to point out that what we want is measures undertaken, and that is a good thing, but the low take-up of the financial aspects points towards something about the scheme that may need to be reviewed. It is clear that it is not as popular as we might have hoped. We look forward to further announcements from the Government on how they are going to change that. A very low take-up of the financial package creates a very small pool of people carrying a liability with them that never becomes normalised or well understood in the wider populace. It can disadvantage those early adopters if it does not ever take off. They will carry liabilities on their properties that few people understand and may instinctively dislike. So the take-up of the financial package is important. It is good that measures are being taken on personal finance and other financial mechanisms, but the Government cannot simply point to the assessments and say, “Oh, it’s all fine”. The financing was always a key part of this and we have to assess why it is not being taken up with more vigour and enthusiasm.
The other question that arises is around monitoring. The assessment of the Minister in the other place was that 80% of people who undertake an assessment go on to fit measures. That sounds great, but I am afraid that I do not know how that number was calculated or where those numbers are recorded. Perhaps we could hear more about that number. If the numbers are to be a mechanism, but outside the financing mechanism, that tips or nudges other people into action, we perhaps need to think again about how we record and monitor what is actually happening. The figure should be not a guesstimate but a hard number that we can publish and have confidence in. Perhaps it is simply a matter of requiring the companies that undertake the measures to report to an agency. Perhaps the Landmark Group, which currently monitors the EPC, could be that group; it could keep a record. I would be interested in the Minister’s comments on that.
I turn to the rented sector, which is the focus of this new clarification. This is an important issue. The Minister has stated, and it is clear, that a disproportionately large number of people live in fuel poverty in this sector, and the housing stock, with 13% of properties rated F or G, is not being invested in. A lot of people in the private rented sector are living in cold, damp homes. We must address this.
I take the point about the split incentives: it is very difficult to get this right. If it is left on the landlord, they do not feel the benefit of the reduced bills. If the bill payer carries the entire burden, they do not get the same benefit as the landlord whose property has been improved and made more attractive. The Government might say, “Well, that’s the way the balance has to tip and we’ve now tipped it back in favour of the tenant”, which is probably a good thing, but it raises a few questions. One is that, while landlords will presumably get some protection under the Consumer Protection Act, what will happen to a property where the tenant leaves but it is then left vacant for a lengthy period? Is it simply that the financial deal is suspended? What happens during that period? There could be properties that are vacant for quite a long time. What then happens to the creditor who is expecting payments that are not being made? Is the time frame extended? What happens in those cases?
There may also be landlords—this will probably not happen frequently—who decide to stop renting and to sell their property for development or demolition. What happens in those circumstances? If it is sold on as a house or as a dwelling that can be lived in, I can understand that it would pass, but if it is demolished, who then makes good the debt owed to the energy finance company?
There are questions around the rented sector that need to be looked at. The Minister mentioned an existing legal requirement to produce an energy performance certificate if a property changes hands between tenants. This is, I believe, poorly enforced. In the publication Energy in Buildings & Industry of November-December 2013, it was revealed that DCLG is currently forced to pay compensation to Landmark, the body that collects the certificates and does the administration, to the tune of £6 million because too few people are complying with this legally binding requirement from the European Union. This seems crazy: taxpayers’ money is being spent to make good a contract signed with a private company because of a failure to enforce a legally binding requirement. That needs to be sorted out. If the uptake of energy efficiency in the rented sector is insufficient, we should look first at why we are not enforcing the use of legally required energy performance certificates. The statement that new tenants will have all the information necessary to decide whether they want to move into a property sounds slightly hollow when the evidence is that the uptake of the legally binding EPCs is not present. The bedrock of enforcement seems not to be in place. Could the Minister come back to me on what we are doing to enforce EPCs in the rented sector?
My final point is that it is good that this statutory instrument is addressing the issue of uncertainty and consumer protection. That is one uncertainty too many, and it is good that it is being resolved with this change in the law. However, this policy continues to be affected by a range of uncertainties. We know that the poor take-up of the financing package is going to lead to changes. We expect it to be continually updated and changed as we find out more about how people are taking it up. That is good if it finally leads to a successful scheme. However, it has been mentioned that the golden rule may change.
If the golden rule changes, and the payback necessary to comply with the golden rule changes, you may edge into the situation where a tenant takes on a lot of debt, knowing they are going to be moving on quite soon, and the incoming tenants are then facing something quite unattractive. In those situations, I suspect that landlords are left with potentially unrentable properties. That is something that no one wants to see. It could act as a disincentive for landlords to embrace this scheme, if they fear that there will be a low take-up, high risk and the potential for their properties to be priced out of the market through measures that do not comply with the golden rule. As this policy is being modified, we need to think carefully about the detailed implications. On that point, however, we support this clarification.
Baroness Verma
My Lords, I thank my noble friend for his warm and supportive welcome for the order. He asked a question on switching to which I will refer in a moment. I also thank the noble Baroness, Lady Worthington, for her comments and her general support of the order. She has raised a number of questions. I will try to answer as many of them as I can. Those that I fail to answer I will get into writing and see that the noble Baroness and my noble friend are copied into those responses.
Coming back to the noble Baroness’s opening comments about the take-up of the Green Deal, we tend to assume that everything has to be done through a particular type of finance scheme. We have found that the Green Deal finance is only one payment option for getting Green Deal measures in place. We have found that self-finance—people going out, taking on measures and paying for them themselves—has been a much more popular way of getting these measures in place. The noble Baroness mentioned the numbers. We know that 500,000 measures have already been put into around 400,000 homes, whether through ECO, self-finance or Green Deal finance. To reduce the issue to being seen only through the success of Green Deal finance distorts the real picture of the Green Deal, which is that it is a long-term programme to ensure that we get real energy-efficiency measures put into homes. Those measures may be financed in a variety of ways.
I say to the noble Baroness that we need to take heart. Feedback has come back from one company that has managed to install Green Deal measures into 10,000 homes. The picture is not always as clear cut as measuring it only against Green Deal financing, which slightly distorts the programme’s actual success. Yes, it is slow, but it is a slow-but-steady-progress programme; we would expect that, because it is a long-term programme.
My noble friend Lord Teverson asked whether switching would have an impact on the rights of the customer. The customer is able to switch suppliers exactly as he or she can currently do. What they cannot do it switch to smaller suppliers that do not service the Green Deal programme. That is obviously something of which consumers will be made aware.
The noble Baroness, Lady Worthington, asked what would happen when a property was demolished or ceased to exist. The owners would still be liable to pay because the Green Deal would still be in place. She also asked about the regulations for the private rented sector. We plan to consult shortly on new regulations to require landlords to improve their homes from 2018. From 2016, landlords should not really be able to refuse measures if the regulations make them put the measures in. We ultimately want housing stock with energy-efficiency measures, to reduce energy usage and ensure that tenants in those buildings do not end up paying over the odds for energy use.
Baroness Worthington
I thank the Minister for her response. Just before she sits down, I want to reiterate the point about the measurement of these measures. There is a danger here that we are seeking slightly to rewrite history. When the Green Deal was launched, it clearly was all about the finance package, and that was meant to be what was going to unlock it. My concern is that if we move the goalposts and now say, “Well, it was always about assessments; that’s the main thing”, or, “Self-financing is the important thing”, that creates a problem where early adopters are taking on a mechanism which, if it does not become well understood or commonplace, will mean that we see people not wanting those properties. That disadvantages people who implement the measures because the understanding of the package and the liabilities—this weird thing that never becomes mainstream—stays niche. That is the issue.
On the EPC, I am encouraged to hear that the Minister’s department is working with the DCLG. This is an important issue; after all, it is a legal requirement, so it is very basic. Before we make new requirements, could we perhaps look at thinking about more public information for tenants? That could include advertising, making sure that tenants are aware of their rights to request a new certificate, and maybe adverts that are being placed should carry EPC certificates, as they often do now when you buy a house. Perhaps tenants need the same. I am encouraged by that and I look forward to hearing more about it.
Baroness Verma
My Lords, I am extremely grateful for those comments. I go back to my point that, while it is important that Green Deal finance is an important part of the programme, we do not seek to make that the only method by which people can access measures. Overall, we have seen that people who want to go out and get these measures done are actually doing it through their own self-financing. The Green Deal finance is available, but if they choose to find an alternative way, it is their right to do so. The suppliers make it very clear, through their installers, what measures will work and how they will be reported. We are also working with the Council of Mortgage Lenders to ensure that we educate them on the Green Deal as well, to prevent it becoming a barrier to people wanting to access mortgages.
I am extremely grateful to the noble Baroness and my noble friend. I commend this amendment.
House of Lords
Introduction: The Lord Bishop of Peterborough
Electoral Registration: National Voter Registration Day
(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Roberts of Llandudno
To ask Her Majesty’s Government what steps they are taking to support National Voter Registration Day on Wednesday 5 February, which seeks to encourage new, especially young, people to register to vote.
Lord Wallace of Saltaire (LD)
My Lords, the Government are committed to doing all they can to maximise registration, including among young people. The innovation project, which the Cabinet Office announced today that it will support, reinforces the aim of National Voter Registration Day. For example, the funding awarded to the Scottish Youth Parliament will help it to develop peer education training and outreach programmes to increase democratic engagement and registering to vote. The Government also fund UK Youth, which will help to develop online tools for engaging young people in the democratic process, including registering to vote.
Lord Roberts of Llandudno (LD)
I thank the Minister for his Answer. I am sure that he will acknowledge, as I do, the dedication and the sometimes sacrificial commitment of a handful of youngsters, who are so concerned that only one in four young people votes in this country that they are having a National Voter Registration Day tomorrow, to try to encourage thousands more—hundreds of thousands, if possible—to register and become part of the democratic process here in the UK. Will the Minister consider evaluating whether what happens tomorrow, on the national registration day, could become an annual fixed event with full-scale government support?
Lord Wallace of Saltaire
My Lords, National Voter Registration Day is an independent initiative to which the Government give their full support, but it is not a governmental initiative. We are all aware, as we move towards individual elector registration and deal with the problems of underregistration, particularly among young people, that the Government cannot do it all on their own and do not have all the answers, so we enormously welcome the engagement of as many voluntary groups of this sort as possible.
Lord Wills (Lab)
My Lords, the Minister will be aware of the success of the schools programme in Northern Ireland in increasing the numbers of young people who are registered to vote. Will the Government consider introducing that programme more widely?
Lord Wallace of Saltaire
My Lords, the noble Lord will be aware that Bite the Ballot has developed a schools programme, Rock Enrol!, which is now also on the gov.uk website. We are encouraging schools to play that with 16 and 17 year-olds. We are also encouraging schools to continue the citizenship education programme; there will be a new element of that for the national curriculum this September. We are all conscious that PSHE has never been quite as good as we all wanted it to be. However, it is there and we very much hope that schools will be taking this further.
Lord Elton (Con)
My Lords, the Minister has just announced that there will be a substantial grant for this purpose through the Government of Scotland. How will he ensure that it is expended in a politically neutral way?
Lord Wallace of Saltaire
My Lords, once you support other bodies you can never be entirely sure that they will do exactly what it was that you wanted. There are five organisations for which the Government have today announced funding. In addition to those two which I have mentioned the Hansard Society, in partnership with Homeless Link, Gingerbread, which works with young people, single parents and social housing tenants, and Mencap, which works with people with learning disabilities, have also received grants.
The Lord Bishop of St Albans
My Lords, the Church of England is involved in the education of more than 1 million young people and we want to play our part in supporting this. Will Her Majesty’s Government talk with the department to see if, in future, they will write not only to schools but to the 43 statutory diocesan boards of education, many of which employ full-time schools workers, and to dioceses? My diocese has an average of 30 to 40 full-time paid youth workers and many volunteer ones. We would be delighted to use our communication resources to support this sort of initiative.
Lord Wallace of Saltaire
My Lords, the Government recognise that they alone cannot do everything in this regard. We welcome conversations with all other organisations. I wondered whether the right reverend Prelate was going to promise that the Church of England would give sermons on the subject. Once, when I was a parliamentary candidate, I was taken by a young woman called Liz Barker—the noble Baroness, Lady Barker, as she is now—to the Methodist church in which her father had been a minister. The sermon came as close as possible to suggesting that the congregation might like to vote for me.
Lord Howarth of Newport (Lab)
My Lords, the Prince’s Trust reported recently that more than three-quarters of a million young people in this country believe they have nothing to live for. How will the Minister seek to motivate those young people to engage with the formal processes of our democracy?
Lord Wallace of Saltaire
My Lords, that is a huge question which engages—or should engage—all of us in political parties and beyond. We recognise that alienation, of the younger generation in particular, from conventional politics is a problem which has developed over the last 25 years or more and it will take 25 years or more to reverse that trend. It will take a whole host of initiatives including, I suggest, some changes in our constitutional arrangements.
Lord Phillips of Sudbury (LD)
My Lords, in light of the regime coming into effect in September, what will my noble friend the Minister do vis-à-vis free schools and academies, which do not have to teach citizenship at all? What will the Government do about the decline in teacher training in citizenship and the take-up of citizenship exams, given that this flies in the face of the ambitions of all of us that young people should vote?
Lord Wallace of Saltaire
My Lords, we are very conscious of the problems of teaching citizenship in schools. According to the School Workforce Census, in January 2012 there were nearly 9,000 citizenship teachers in publicly funded schools in England and Wales. I am going to duck the question of how far the national curriculum should be extended to free schools and academies.
Lord Patel of Bradford (Lab)
My Lords, I welcome what the Minister said about grants to Mencap and Gingerbread because they target specific groups. However, what are the Government doing to target young people from ethnic minorities throughout the country?
Lord Wallace of Saltaire
My Lords, the noble Lord will know of Operation Black Vote, which has targeted people in that area. The statistics suggest that members of ethnic minorities are not as underregistered as some other target groups. However, young people of all groups are a problem and we all need to do as much as we can, locally and nationally, to cope with that.
Lord Geddes (Con)
Is my noble friend aware of the valuable work done by the Lord Speaker’s outreach programme in this context? I declare an interest as a member of that programme.
Lord Wallace of Saltaire
My Lords, I am well aware of that, and when I step down from this post I think that I might volunteer. I am not quite sure how people in our age group enthuse 16 year-olds to take part in the political process, but that is something that we will all have to deal with.
Georgia: Islamophobia
(10 years, 9 months ago)
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The Lord Bishop of Wakefield
To ask Her Majesty’s Government what representations they are making to the Government of Georgia regarding Islamophobia in that country; and what steps they are taking to ensure freedom of religion and the rights of minority groups there.
The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, the UK raises human rights issues on a regular basis with the Georgian Government, both bilaterally and through multilateral institutions such as the EU, the OSCE and the Council of Europe. We have not made any recent representations regarding Islamophobia, but we continue to follow minority rights closely, including through our embassy’s work in Tbilisi and its regional travel. We fund a local NGO to maintain an inter-religion working group, which involves a variety of faith groups, including Muslims.
The Lord Bishop of Wakefield
My Lords, last year, I was fortunate to spend a couple of nights with a Muslim family in Batumi, and the next morning I met the president of the semi-autonomous region there, Mr Archil Khabadze. I pressed the question to him of why there was only one mosque for something like 110,000 out of the 150,000 people, that being the number of Muslims in the city. He said that at that time they would take immediate steps to find more land made available for Muslims in that city. I said that I would be coming back in the next three months to open the mosque with other religious groups. Would Her Majesty’s Government please press the authorities to make sure that the local administration there is asked to fulfil the promise that they made; otherwise, these very open Muslims will soon become radicalised.
Baroness Warsi
The right reverend Prelate raises a really important issue. His Question prompted me to go away and do some research, and I was quite intrigued to find out that just over 10% of Georgia’s population are indeed Muslim—a much larger percentage than in our own communities. The right reverend Prelate will be aware that one of the challenges in Georgia is that the Muslim community is not particularly well engaged politically and therefore does not really put its head above the parapet. I have become aware of low-level discrimination and tensions towards the Muslim community there, but as Georgia moves towards closer EU integration part of its requirement is to fulfil its obligation to bring in anti-discrimination laws.
Baroness Berridge (Con)
My Lords, I declare an interest as the chair of the All-Party Parliamentary Group on International Religious Freedom. My noble friend the Minister also holds the brief for faith communities, so I would be grateful if she would outline whether the Government have actually had meetings with and made representations to the Georgian Orthodox Church, which seems to have aligned itself very much with national identity there and seems to have a privileged position that is not extended to the Muslim, Jewish or Jehovah’s Witness community there.
Baroness Warsi
I know that our embassy in Tbilisi is engaged with all religious organisations on the ground, but I am not sure whether it has had specific discussions on the rising concern about nationalism and Christianity being associated as the only form of Georgian identity. My noble friend makes an important point, and I shall certainly ensure that it is now put on the agenda.
Lord Harries of Pentregarth (CB)
I wonder whether the Minister would allow a slight extension of the Question on the grounds that freedom is indivisible. Not only has Georgia been disfigured recently by actual violent hostility towards Muslims in some areas, but a gay rights demonstration was violently broken up with some connivance from the authorities. Would the Government continue gently to press the Georgian Government, with whom we have such good, close relations, by saying that the Europe that they aspire to join finds both Islamophobia and homophobia totally out of place and unacceptable?
Baroness Warsi
The noble and right reverend Lord makes an important point. Indeed, we raised concerns about the violence at the IDAHO rally in May of last year, for example. LGBT rights, along with the rights of religious minorities, are a cause for concern. They stem from the concern in parts of the Georgian Orthodox Church about a conflict of values—a conflict between Georgian values, which are laid out in a very orthodox way, and what they see as European values, and the kind of anti sentiment towards them.
Baroness Hussein-Ece (LD)
My Lords, does my noble friend the Minister agree that this is part of a wider problem, not just in Georgia but in Moldova, Belarus and Russia, in that there is a lack of legislation that outlaws this type of inequality, and the ostracism of people from minority groups, which keeps them out of employment, education and political participation? The problem is not just in Georgia. Can my noble friend say what can be done to address it—and indeed homophobia—across the region in a more holistic way?
Baroness Warsi
This is one of the underlying themes of the Eastern Partnership. Georgia is one of six countries that are part of it. At the Vilnius conference at the end of last year there was a process of trying to encourage these countries to look towards Europe and go forward to signing association agreements, and deep and comprehensive fair trade agreements. This was all about trying to bring these countries to a place where the values that we hold dear become part of the norm. Our concern is that even where legislation is introduced it is not properly implemented. Sometimes legislation can have an alienating effect, as it had in Georgia when specific legislation passed in 2011 meant that Georgian Muslims were regulated by the Georgian Muslim department—which felt to the Muslim community there like a sad return to the Soviet era.
Lord Lea of Crondall (Lab)
My Lords, when the right reverend Prelate asked his original Question, he referred to a conversation in Batumi and mentioned nationalism in the same breath as Orthodox Christianity versus Islam. How far does the Minister think that we are talking about an aspect of nationalism in one respect? These three Transcaucasian ex-Soviet republics have been independent only since 1989-90. Might this not be looked at as much in terms of nationalism as religion?
Baroness Warsi
Yes, my Lords. Unfortunately, Georgia is being presented by many politicians as a Christian country, and the identity and nationality that flow from that are causing some of this underlying tension.
Lord Willoughby de Broke (UKIP)
This is an interesting question, but is not the brutal truth of the matter—
West Lothian Question
(10 years, 9 months ago)
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Baroness Miller of Hendon
To ask Her Majesty’s Government whether they intend to take steps to resolve the West Lothian Question in the light of the impending grant of further taxation powers to the National Assembly for Wales and the forthcoming Scottish referendum.
Lord Wallace of Saltaire (LD)
My Lords, the coalition’s programme for government included a commitment to establish a commission to consider the West Lothian question. In January 2012 the Government set up the commission on the consequences of further devolution for the House of Commons. This commission reported last spring and Ministers are currently giving the report the serious consideration that it deserves.
Baroness Miller of Hendon (Con)
I thank the Minister for his reply, but surely the SNP cannot be allowed to make a bet that it cannot lose if it fails to win the referendum. Why should Scottish MPs continue to have the right to vote on exclusively English affairs?
Lord Wallace of Saltaire
My Lords, this is not a new question. Some Members will remember Tam Dalyell very well. I do not think that there are many Members still in this Chamber who will remember the debates in the 1886 home rule Bill on whether Irish MPs should still have full rights once home rule had been granted for Ireland. This is a question that is not only to do with Scotland; Northern Ireland and Wales also come into it. The imbalance between the size of England and the other nations is important, but there is little support in England for the idea of a separate English Parliament.
Lord Wigley (PC)
My Lords, does the Minister accept that whatever the outcome of the referendum in Scotland, there is a pressing need for a more coherent, balanced and transparent settlement that is fair to England as well as the devolved nations? In the context of the report to which he referred, will he give a commitment that the Government will move forward rapidly, once the outcome of the Scottish referendum is known, to get changes made to resolve these difficulties?
Lord Wallace of Saltaire
My Lords, the noble Lord has not asked me about the Silk commission but he will be aware that we are still discussing the extent of devolution with the Welsh Government. He will also be aware that England is at the moment a highly centralised state. The Government are happily discussing with a number of cities devolution to major city areas within England. I remind the House that the population of the local authority area of Birmingham is slightly larger than the population of Northern Ireland, so this is an important question for England as well.
Lord Hughes of Woodside (Lab)
My Lords, I declare an interest as one who took part in these debates. It is 20 or so years ago since the question arose; is it not surprising that we have no new answers?
Lord Wallace of Saltaire
My Lords, some dilemmas never go away. We have an asymmetrical system of devolution in this country and we have to make it work. As someone who has spent most of his political career in the north of England, I have doubts about the imbalance of advantage within England itself, but that is another issue which we will debate another time.
Lord Cormack (Con)
My Lords, I do not have the advantage of my noble friend in remembering personally what happened in 1886, but I keep in close touch with Mr Tam Dalyell. I suggest that it would be very wise to take advice from Mr Dalyell on this issue. He still has the same vigorous intellect we all remember fondly and I am sure that he could bring some wise counsel to bear.
Lord Wallace of Saltaire
My Lords, I am sure that we all wish to send him our best wishes.
Lord Foulkes of Cumnock (Lab)
My Lords, I am very happy to pass on those best wishes to my good friend Tam Dalyell. However, is not the West Lothian question a misnomer? Should it not be called the English democratic deficit? Surely the way to deal with it is not to tinker with procedures in the House of Commons but to look at ways to resolve the democratic deficit within England, have more devolution within England and move towards some kind of federal, or quasi-federal, Britain?
Lord Wallace of Saltaire
My Lords, I think that I took part in my first debate on the question of an English Parliament at a conference in Edinburgh in 1968. It is not a new question for any of us here. The problem is that while you can begin to carve up parts of northern England into recognisable regions, once you get down to the south-west and the south-east there is not easy agreement within England about the sort of devolution you would have.
Lord Elystan-Morgan (CB)
My Lords, while it is undoubtedly the case that the West Lothian question in its many guises deserves consideration, does the Minister not agree that many other constitutional conundrums cry out for resolution? In particular, under the Barnett formula, the Welsh people are unjustly deprived of about £300 million per annum. Looking at it in the wider context, is there not an overwhelming case for setting up a royal commission to look comprehensively into the relationship of this House to the Commons and the Commons to this House, and of Westminster to the devolved Parliaments of Scotland, Wales and Northern Ireland?
Lord Wallace of Saltaire
My Lords, the noble Lord may be aware that the Political and Constitutional Reform Committee of the House of Commons has, indeed, recommended the idea of a constitutional convention in a recent report. As someone who used to study the British constitution, I have to say that, on the whole, we have preferred to patch it, make do and then put a bit more in rather than attempt a complete redesign.
Lord Purvis of Tweed (LD)
My Lords, does my noble friend agree that one of the very positive aspects of devolving further taxation and fiscal power to the National Assembly for Wales and the Scottish Parliament is greater fiscal accountability for those institutions? As a former Member of the Scottish Parliament, I agree with that entirely. Does my noble friend agree that the best answer to the old question of the West Lothian question is to address the issue that it is actually a Westminster question, and that the answer to the old question is perhaps the old solution of British federalism?
Lord Wallace of Saltaire
My Lords, that was exactly the question I was debating with Russell Johnston in Edinburgh in 1968. There is more appetite for fiscal devolution in England, which means restoring to the cities and local authorities a great deal more autonomy in collecting and spending money themselves.
Police: Private Prosecutions
(10 years, 9 months ago)
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Lord Beecham
To ask Her Majesty’s Government what is their response to the concerns expressed by the Lord Chief Justice in relation to the Metropolitan Police assisting a private prosecution in return for a share of the compensation recovered.
The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con)
My Lords, Section 93 of the Police Act 1996 explicitly allows the local policing bodies—for example, the Mayor’s Office for Policing and Crime and PCCs elsewhere—to receive payments in a range of circumstances. However, we understand the concern that this “slice of the cake” issue has raised and we will be revising the financial management code of practice as appropriate to take account of it.
Lord Beecham (Lab)
My Lords, the Met seems to have been persuaded by Virgin to embark on a novel extension of the concept of payment by results, and one that is fraught with potential conflicts of interests. Will the Home Secretary, therefore, issue guidance to the Met and other police forces on the impropriety of such arrangements? Will the Government confirm that they will meet the concerns of the Lord Chief Justice over the dangers of more private prosecutions, as funding for the police and Crown Prosecution Service is cut?
Lord Taylor of Holbeach
My Lords, perhaps I may reiterate what I said in my opening response. I understand the concerns raised about the police assisting in a private prosecution with a promise of a share of compensation. We expect high standards from the police; I think all noble Lords would accept that. In particular, in this case, the Met received only overtime costs, which is right and proper. As I said, we will be updating the guidance to PCCs and the Met to make it clear that such agreements should not be entered into.
Lord Clinton-Davis (Lab)
My Lords, did not the Lord Chief Justice urge police chiefs to give urgent—I stress that word—consideration to a practice that undermined the reputation of the police for independence? He was deeply concerned about it. Those are serious observations; they come from an impeccable source, do they not?
Lord Taylor of Holbeach
Yes, indeed—I hope I have given the House an assurance that we take those remarks seriously.
Baroness Hamwee (LD)
My Lords, I am sure that the Minister agrees that trust in the police is absolutely essential. To be trusted they need to be trustworthy, and to be trustworthy they need to be seen to be trustworthy.
Lord Taylor of Holbeach
My noble friend is right about this. The public expect the highest level of professionalism and integrity from the police. Next month will be the first anniversary of the Home Secretary’s Statement to Parliament on the College of Policing, which I repeated here. The College of Policing is setting out those measures to ensure that the integrity of the police force we share is of the highest standard. This year will see the publication for the first time of a code of ethics by the college.
Lord Richard (Lab)
My Lords, the noble Lord has told the House that the Government are taking this issue seriously and will consider it seriously. Can he tell us how long we will have to wait to see the results of that consideration?
Lord Taylor of Holbeach
No, I think I have given the House an assurance that the Government are seeking to act on the code of conduct of financial affairs for the police, and they will be doing so.
Road Safety (Financial Penalty Deposit) (Appropriate Amount) (Amendment) Order 2014
Lord Popat
That the draft order laid before the House on 16 December 2013 be approved.
Relevant document: 17th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 28 January.
Commons (Town and Village Greens) (Trigger and Terminating Events) Order 2014
Baroness Stowell of Beeston
That the draft order laid before the House on 9 December 2013 be approved.
Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 24th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 28 January.
India: 1984 Operation in Sri Harmandir Sahib
(10 years, 9 months ago)
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The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)
My Lords, with the leave of the House, I should like to repeat a Statement made by my right honourable friend the Foreign Secretary in another place. The Statement is as follows:
“With permission, Mr Speaker, I wish to make a Statement on the Cabinet Secretary’s report into the Indian operation at Sri Harmandir Sahib, also called the Golden Temple, in Amritsar in June 1984.
The House will recall that on 13 January concerns were raised regarding two documents released to the public in the National Archives. The documents relate to the painful events that followed the occupation of the temple site by Sikh dissidents in December 1983, which led to a six-month standoff with the Indian authorities.
In June 1984, a three-day military operation by Indian forces, known as Operation Blue Star, took place. Official Indian government figures estimate that 575 people died. Other reports suggest that as many as 3,000 people were killed, including pilgrims caught in the crossfire. This loss of life was an utter tragedy. Understandably, members of the Sikh community around the world still feel the pain and suffering caused by these events.
Given this, we fully understand the concerns raised by the two documents. They indicated that in February 1984, in the early stages of the crisis, the then British Government sent a military officer to give advice to the Indian Government about their contingency planning. Many in this House and the whole country rightly wished to know what connection, if any, there had been between this giving of advice and the tragic events at Amritsar over three months later.
Within hours of the documents coming to light, the Prime Minister instructed the Cabinet Secretary to carry out an urgent investigation in four critical areas: why advice was provided to the Indian authorities, what the nature of that advice was, what impact it had on Operation Blue Star, and whether Parliament was misled. The Cabinet Secretary was not asked to investigate Operation Blue Star itself, or the actions of the Indian Government, or other events relating to the Sikh community in India. While the Cabinet Secretary has investigated these specific matters, I can make clear that during his investigation no circumstantial evidence has been offered, or has surfaced, of UK involvement in any subsequent military operations in the Punjab.
This investigation has been rigorous and thorough. The Cabinet Secretary and officials have met Sikh organisations to ensure that their concerns informed the investigation. They have spoken to individuals associated with the two documents, although some officials are now deceased, they have examined Hansard records from 1984 to the present day, and they have carried out an extensive and thorough search of the files held by all relevant departments and agencies from December 1983 to June 1984. Their search through some 200 files and some 23,000 documents found a very limited number of documents relating to Operation Blue Star.
The report notes that some military files covering various operations were destroyed in November 2009 as part of a routine process undertaken by the Ministry of Defence at the 25-year review point. This included one file on the provision of military advice to the Indian authorities on their contingency plans for Sri Harmandir Sahib. However, copies of at least some of the documents in the destroyed files were also in other departmental files and, taken together, these files provide a consistent picture of what happened.
The Cabinet Secretary’s investigation is now complete. Copies of the report have been placed in the Libraries of both Houses, and it is now being published on the government website. The report includes the publication of the relevant sections of five extra documents that shed light on this period, but which would not normally have been published. We have taken this step because the whole investigation has been based on a commitment to the maximum possible transparency. We want to be as open as possible with the British public, in so far as that does not undermine the principle upheld by successive British Governments of not revealing any information relating to intelligence or Special Forces.
The main findings of the Cabinet Secretary’s report are as follows. First, on why the UK provided advice to the Indian Government, the Cabinet Secretary has established that in early February 1984, the then Government received an urgent request to provide operational advice on Indian contingency plans for action to regain control of the temple complex. The British high commission in India recommended that the Government respond positively to the request for bilateral assistance from a country with which we had an important relationship. This advice was accepted by the then Government.
Secondly, the Cabinet Secretary then examined the nature of the advice that was provided to India following that decision. He has established that a single British military adviser travelled to India between 8 and 17 February 1984 to advise the Indian intelligence services and special group on contingency plans they were drawing up for operations against armed dissidents in the temple complex, including ground reconnaissance of the site. The adviser’s assessment made clear that a military operation should be put into effect only as a last resort, when all attempts at negotiation had failed. It recommended including in any operation an element of surprise and the use of helicopter-borne forces, in the interests of reducing casualties and bringing about a swift resolution.
This giving of military advice was not repeated. The documents show that the decision to provide advice was based on an explicit recommendation to Ministers that the Government should not contemplate assistance beyond the visit of the military adviser, and this was reflected in his instructions. The Cabinet Secretary found no evidence in the files or from discussion with officials involved that any other form of UK military assistance—such as equipment or training—was given to the Indian authorities. The Cabinet Secretary’s report therefore concludes that the nature of the UK’s assistance was purely advisory, limited and provided to the Indian Government at an early stage in their planning.
Thirdly, the report examines what actual impact UK advice had on the Indian operation, which took place between 5 and 7 June 1984, over three months later. The report establishes that during that period the planning by the Indian authorities had changed significantly. The number of dissident forces was considerably larger by that time, and the fortifications inside the site were more extensive. The documents also record information provided by the Indian intelligence co-ordinator that after the UK military adviser’s visit in February, the Indian army took over lead responsibility for the operation and the main concept behind the operation changed.
The Cabinet Secretary’s report includes an analysis by current military staff of the extent to which the actual operation in June 1984 differed from the approach recommended in February by the UK military adviser. Operation Blue Star was a ground assault, without the element of surprise, and without a helicopter-borne element. The Cabinet Secretary’s report therefore concludes that the UK military officer’s advice had limited impact on Operation Blue Star. This is consistent with the public statement on 15 January 2014 by the operation commander, Lieutenant-General Brar, who said that,
“no one helped us in our planning or in the execution of the planning”.
It is also consistent with an exchange of letters between Mrs Gandhi and Mrs Thatcher on 14 and 29 June 1984 discussing the operation, which made no reference to any UK assistance. Those parts of the letter relevant to Operation Blue Star are published with the Cabinet Secretary’s report today.
The Cabinet Secretary has also examined two other concerns raised in this House and by the Sikh community; namely, that Parliament may have been misled, or that the decision to provide advice may have been linked to UK commercial interests. The report finds no evidence to substantiate either of these allegations. The investigation did not find any evidence in the files or from officials of the provision of UK military advice being linked to potential defence or helicopter sales, or to any other policy or commercial issue. There is no evidence that the UK, at any level, attempted to use the fact that military advice had been given on request to advance any commercial objective. The only UK request of the Indian Government, made following the visit, was for prior warning of any actual operation, so that UK authorities could make appropriate security arrangements in London. In the event, the UK received no warning from the Indian authorities before the operation was launched.
The Cabinet Secretary also concludes that there is no evidence of Parliament being misled. There is no record of a specific question to Ministers about practical British support for Operation Blue Star, and he concludes that the one instance of a Written Question to Ministers related to discussions with the Indian Government on behalf of the Sikh community after the operation.
In sum, the Cabinet Secretary’s report finds the nature of the UK’s assistance was purely advisory, limited and provided to the Indian Government at an early stage; that it had limited impact on the tragic events that unfolded at the temple months later; that there was no link between the provision of this advice and defence sales; and that there is no record of the Government receiving advance notice of the operation. Nonetheless, we are keen to discuss concerns raised by the Sikh community. The Minister responsible for relations with India, my right honourable friend the Member for East Devon, will discuss this with Sikh organisations when he meets them later today. This reflects the strong, positive relationship this Government have with the British Sikh community, which plays such a positive role in so many areas of our national life.
We are also determined to look at the wider issues raised by these events about the management and release of information held by Government. Under the Constitutional Reform and Governance Act 2010, the 30-year rule has been superseded by a 20-year rule, so that from 2022 all annual releases will be after 20 years. However, it is not clear at the moment that this change is being approached in a uniform fashion by all departments. The Prime Minister has therefore decided to commission a review to establish the position across government on the annual release of papers and the ability and readiness of departments to meet the requirements of moving from a 30 to a 20-year rule, including the processes for withholding information. This review will be carried out by the Prime Minister’s Independent Adviser on Ministerial Standards, Sir Alex Allan.
Nothing can undo the loss of life and the suffering caused by the tragic events at Sri Harmandir Sahib. It is quite right that the concerns that were raised about UK involvement have been investigated. It is a strength of our democracy that we are always prepared to take an unflinching look at the past. But I hope this investigation and the open manner in which it has been conducted will provide reassurance to the Sikh community, to this House, and to the public, and in that spirit I present it to the House”.
Lord Bach (Lab)
My Lords, I thank the Minister for repeating the Statement made in another place by her right honourable friend the Foreign Secretary. It is clearly a matter of considerable interest to this House—one can see that by just looking around on all sides—and there will be noble Lords here who were involved at the time, either in opposition, in government or in some other way. It is a matter of considerable interest to this House and we are grateful to the noble Baroness.
The raid in 1984 on the Golden Temple complex, called Operation Blue Star, resulted, as the noble Baroness has already told us, in hundreds of deaths, devastating damage to the temple and rising levels of sectarian violence. It also, ultimately, saw the assassination of Indira Gandhi, the Prime Minister of India, later that same year. We welcome what light the report sheds on the British Government’s alleged involvement with these events. We also welcome the fact that some of the key documents relating to this event and the British Government’s alleged involvement have now been published.
There are still some serious questions to be asked about the involvement, conduct and contribution of the British authorities—perhaps at the highest level—in the events that surrounded the storming of the Golden Temple, which cost so many innocent lives. I therefore wish to ask the Minister a few questions around that topic.
Have the Government made public all the documents they intend to make public about this incident? We are grateful, of course, for the documentation in the annexe to the Cabinet Secretary’s report, but if there are other relevant documents, why have they not been published, and is there any intention to publish them in the future? Given that the report cites officials interviewed over the course of the investigation, will the Government commit to publishing a list of those officials, and if not, why not? We know from exchanges in another place that Ministers at the time have been interviewed and spoken to about this matter by the Cabinet Secretary in compiling his report. Can the Minister confirm that that is the position and whether their testimony might be made public?
I move on to the terms of the investigation led by the Cabinet Secretary. We welcome the fact that, following representations by the Sikh community, the Cabinet Secretary published a letter which detailed the scope of his inquiry. Can the Minister explain to this House why there was over a three-week delay in publishing the terms of reference? Can she further clarify whether the terms of the inquiry changed while it was taking place? The terms of reference as published in a letter from the Cabinet Office on 1 February did not include specific reference to the time period covered by the investigation, yet the final report which we have seen today sets out a timeframe of December 1983 to June 1984. Why was this timeframe not made public earlier in the process?
Many—both inside and outside Parliament—have expressed regret that the investigation seems to cover only the first part of 1984, given the enormous significance of events in the weeks and then the months after June 1984 and their direct link to the storming of the Golden Temple. Will the Government ask the Cabinet Secretary to set out whether he believes there could be some grounds for a fuller inquiry covering a longer period?
I turn briefly to the substance of the findings in the report. There is, and I quote directly from the Cabinet Secretary’s review,
“no record of any assistance to the June 1984 operation (called ‘Blue Star’ by the Indian Government) other than the limited military advice provided in mid-February”.
Can the Minister set out whether the nature of that “limited military advice” provided earlier that year ruled out conclusively the possibility that the British Government offered support for Operation Blue Star in the form that it was eventually undertaken? I refer in particular to one document of those presented today, dated 23 February 1984, from the Private Secretary to the Foreign Secretary, to the Principal Private Secretary at No. 10. It says, talking about the military adviser in question:
“With his own experience and study of this kind of problem, he was able to advise the Indians of a realistic and workable plan which Mrs Gandhi approved on her return from Moscow on 16 February”.
I wonder if the Minister can comment on that point.
The report sets out that there has been a quick analysis in recent weeks by current UK military staff, which confirms that there were differences between the June operation and the advice from the UK military officer in February. Indeed, in repeating the Statement, the Minister mentioned some of those differences. Why was this analysis as quick as it was? Is there any point in perhaps having a rather longer analysis to see what the position is?
Noble Lords are of course aware of the continuing pain felt by the Sikh community around the world—not least in this country—at those events and the deaths and destruction that they caused, but also at the anti-Sikh violence following the assassination of Prime Minister Indira Gandhi and the emergency period that followed which saw arbitrary arrests and accusations of torture, rape and disappearances, some still unresolved today. While of course there are differences within the Sikh community over the issue of a separate Sikh state, there is unanimity in their horror at these events. For British Sikhs particularly perhaps over recent years, there has been the added burden that their own Government may—may—have been involved in these actions. We believe that the Government have a continuing responsibility to address the widespread concerns and fears that still exist. Do they agree? If they are able to provide answers to those concerns and questions, then we as Her Majesty’s loyal Opposition will of course support them in that effort.
Baroness Warsi
My Lords, I start by thanking those noble Lords who have discussed this matter with me over the past few weeks, and indeed the Opposition for making sure that they have played a part in the discussions that took place to make sure that all the concerns of the British Sikh community and the wider community were brought to bear when the report was being prepared. I urge noble Lords to read the report and the documentation attached to it because it goes into great detail. The Statement is in no way as good as the actual report and documentation, which I think sheds greater light on what happened at the time.
I hope that I have assured noble Lords on the basic questions that were asked as the report was being prepared about the UK’s involvement, the extent of the advice that was given and how material that advice was. I hope that noble Lords are assured by the amount of documentation which has been considered for the report. I can also confirm that all the documentation which we intend to make public has been made public, but of course we can never guarantee what documentation may come to light in future years as part of disclosure. I have, however, informed the House of the extent of the documentation that was considered in the preparation of this report.
During the course of the investigation the Cabinet Secretary and officials spoke to individuals who were associated with the two documents. However, as some of those officials are now deceased we have had to consider the documentation only. I am sure that noble Lords will accept that it is right to protect the anonymity of the officials at this stage, which is in line with standard government procedure. We do not intend to name the officials who were interviewed and nor do we intend to disclose the transcripts.
The noble Lord asked me about the terms of reference which applied to the investigation. The terms of reference were set out by the Prime Minister in the other place during PMQs on 15 January. He focused on establishing the facts about the UK’s involvement. They were: to look at why the Government provided advice to the Indian authorities, the nature of the UK assistance and the impact of that assistance. The terms of reference of the review were not narrowed in any way; indeed, they were widened to take account of some of the areas of concern that were raised. These included ensuring that all further concerns were addressed. There was no delay in publishing the terms of reference. We were not committed to publishing them from the outset, but decided to do so given the questions being asked about the point. I would say that the inquiry was thorough and quick in response to the important questions that were being asked. I am not sure whether noble Lords spend time watching the ethnic Sky media channels in the way that I do, but if anyone has seen those channels or Sangat TV they will know that this has been a topic of constant discussion within the British Sikh community for many weeks. It was why the Government felt it appropriate to deal with the matter as swiftly as possible.
On the point about a longer analysis, I think it is right to go back to what it is that the Cabinet Secretary was asked to look at—and that was in relation to the UK’s involvement. I have no doubt about the strength of feeling within the British Sikh community and indeed in the Sikh community across the wider world. These events are still raw and form part of a discussion among young Sikhs who were not even born at the time the tragedy occurred. Of course, as we approach the 30th anniversary, it is becoming even more of an issue. But it is not for the British Government to be involved in matters which I am sure noble Lords will accept were sovereign matters for the Indian state. This report was never about reopening Operation Blue Star, it was about looking at UK involvement. I hope that I have been able to assure noble Lords about our role in that.
Lord Dholakia (LD)
My Lords, I thank my noble friend for repeating the Statement, and I ask her to extend those thanks to the Cabinet Secretary for the open and transparent way in which he has carried out the investigation. No matter where we stood at the time of the attack on Sri Harmandir Sahib, the Golden Temple, it is clear that the revelations have been a shock to almost all the Sikh community, not only here but around the world.
The Golden Temple, the holiest temple, which many of us have visited, is a place of tranquillity and peace. It is of the deepest significance to the Sikh community, and as has rightly been pointed out, this matter is being discussed all over the world. The Prime Minister has visited the Golden Temple at Amritsar, and he then also visited the site of the Jallianwala Bagh where, as colleagues will recollect, the massacre of a large number of Indians was committed on the orders of General Dyer. The Prime Minister was good enough to offer an apology at that stage. Even at this late stage, should we not extend some regret about our involvement in this episode at that time?
My second point is that, even at this late stage and with the broad Statement before us, will the Minister undertake to discuss it in her meeting with colleagues from the Sikh community and make sure that it goes to every gurdwara in this country, so that they are aware of the depth to which this episode has been investigated and precisely what happened at that time in relation to the British Government’s involvement?
Baroness Warsi
I hear clearly what my noble friend says. I had the privilege of being the first Minister in this Government to visit Sri Harmandir Sahib and also Jallianwala Bagh, where the tragedy of 1919 is still of significance, certainly for someone like me with origins in those lands. Those visits were incredibly poignant and emotional moments.
However, I take us back to the subject of discussion here. The reason for what the Prime Minister said and did in relation to Jallianwala Bagh was, of course, that there was a terrible, tragic massacre in which the United Kingdom was completely involved. We are talking now about a situation which involved Indian forces. The question that I had to address at the Dispatch Box was the nature of the UK’s involvement. I hope that, through the Statement and the documentation that has been published, I have made clear the UK’s involvement. Apologies go with responsibility but in this particular case the responsibility does not lie with the British Government. I completely understand the sentiment in the British Sikh community, and indeed in the wider community, but I do not feel that, so far as the United Kingdom is concerned, this is the kind of case that could be compared to Jallianwala Bagh.
On the noble Lord’s wider point about engagement with the British Sikh community, I enjoy a good relationship with that community as a Minister both in the Foreign Office and in the Department for Communities and Local Government. We meet regularly, both through Sikh communities coming to the department and through visits. Only a few months ago I was at the Nishkam Centre in Birmingham. We place huge value on our relationship with the Sikh community. We also note the huge contribution that Sikh communities make in the economic and professional fields and also in volunteering, something that I hold very dear and is so apparent when visiting places like the Nishkam Centre and other temples.
The Minister with responsibility for India, my right honourable friend Hugo Swire, is meeting the Sikh community as we speak, I think. The noble Lord, Lord Singh, is probably not in his seat because he is at that meeting. I was hoping that this Statement would be taken at 5 pm so that I could also be present at that meeting, as I intended. However, I will certainly follow it up with a further meeting with the community.
Lord Alton of Liverpool (CB)
Indeed, my Lords, my noble friend Lord Singh has asked me to express his regrets to the Minister and to the House that he cannot be in his place, given that he has followed this issue with assiduousness and determination over a very long period, but he is at the meeting to which the Minister has just alluded.
The Minister will have seen the statement made by Bhai Amrik Singh, the chairman of the Sikh Federation, that he was “hugely disappointed” with the inquiry’s “narrow terms” and that his meeting with the Cabinet Secretary, Sir Jeremy Heywood had failed to assuage his concerns. Given that the Minister has done so much to build good relationships with the Sikh community, will she assure the House that she is willing to meet Mr Singh to discuss whether there are outstanding issues that could still be examined? Will she also comment briefly on the remarks she made about Britain’s commercial interests when she repeated the Foreign Secretary’s Statement earlier and said they had played no part at all in any of these events? Would she be willing to publish a list of any arms deals that were made during the period prior to and immediately after these events in 1984?
Baroness Warsi
The noble Lord makes an important point. I think Amrik Singh is part of the delegation of individual organisations and individuals who are meeting with Minister Swire, but if that is not the case and he is not part of that meeting, I will certainly see whether appropriate contact could be made. As I said, I will be making contact myself with members of the Sikh community in the coming weeks and months. There is a wide range of opinion. I had the opportunity to discuss the matter at some length with the noble Lord, Lord Singh, and my honourable friend Paul Uppal, who is the only Member of Parliament of Sikh origin in the House of Commons. Quite a breadth of opinion has come back from the Sikh community about how far the British Government are expected to go to satisfy certain elements of that community. I completely take on board how raw this issue is—and how raw Operation Blue Star is—and to what extent certain elements of the community wish there to be a truth and reconciliation process. However, going back to what I said at the beginning, that is a separate issue to the one that we are dealing with, which is what the UK’s involvement was.
I assure the noble Lord that the advice that was given was not linked in any way to commercial interests or to a particular defence contract or negotiation. That is certainly what the documentation shows. I am not sure how much further it would take the matter to start publishing any discussions that were happening in relation to any sort of commercial activity with the state over whatever period of time. I know from my own dealings with countries that we are engaged with through UKTI that these matters can sometimes take months and sometimes years. How far would that net have to be cast? I would like to be assured, and to reassure the House, on whether there was, in this particular case, a commercial connection to the decision. I can assure noble Lords that there was not.
Baroness Berridge (Con)
My Lords, my noble friend the Minister outlined that the processes regarding the non-disclosure of information are going to be the subject of a further inquiry. Looking at the Statement from the Government, it appears that it was fortuitous that certain documents were copied into other departmental files, as the whole file was destroyed at the Ministry of Defence’s 25-year review. We are grateful for what appears to be that fortuitous copying of documents, but is the correct inference that, without it, a comprehensive file would not have been retained for this inquiry to base its conclusions on? How is that going to be part of the ongoing inquiry when that review, presumably, will be done now by the Ministry of Defence at 15 years for a 20-year release of information? Could that be part of the ongoing process?
Baroness Warsi
I am sure that these matters will be looked at. My noble friend will be aware that this Government are hugely committed to the issue of transparency, which is why we brought in the 20-year rule, bringing the period down from 30 years. It is important that documentation—subject of course to national intelligence issues and national security interests— is put into the public domain. The documentation that was destroyed was part of a 25-year review. As my noble friend says, it was fortuitous that elements of that documentation were present in other departments. I am sure that lessons will be learnt from this incident.
Lord Desai (Lab)
My Lords, the noble Baroness was quite correct in saying that Operation Blue Star was the responsibility of the Indian Government. However, there have been reports in the press that the advice given by the military adviser to the Government in India was to not undertake Operation Blue Star but to wait out the people who were in the temple and settle the issue much less violently than was the case. Has any evidence been unearthed to confirm that? If so, would it not be to the advantage of all concerned to make it public?
Baroness Warsi
The noble Lord may have heard in my Statement that the advice given was that entering the temple should be seen as a last resort and that a negotiated settlement was the right and the first way to proceed in these matters. In any event, it is clear what advice was given by the British officer and it is also clear that that advice was not followed. That is also an important element of the Cabinet Secretary’s report.
Lord Butler of Brockwell (CB)
My Lords, I was the Prime Minister’s principal private secretary at the time of these events. One of the documents published today is the letter from the Foreign Secretary’s office seeking the Prime Minister’s assent on 3 February to the sending out of a military adviser. While it is clear from the extent of the underlinings made by the Prime Minister on that letter that she considered this proposal very carefully, will the Minister confirm that, beyond giving her assent and asking to be kept informed of subsequent developments, she took no initiative and no other action in relation to this matter between March and June, when the military action took place?
Baroness Warsi
That certainly appears to be the case and, of course, if the noble Lord’s reading and recollection is of that being the case, certainly I would take his word on that.
The Lord Bishop of Chester
My Lords, the noble Lord, Lord Desai, made the point that using force to resolve a situation is nearly always counterproductive and has results that you do not anticipate. Are there two additional lessons from this? First, the speed with which this report has been produced is commendable. I think of the Chilcot inquiry that we are still waiting for. This has been done in a few weeks and it seems to me to be a lesson for other situations in which a bit more speed can help the reconciliation process. Secondly, is one of the lessons that understanding religious sensitivities is something the modern world can find hard to do? One thinks of Ariel Sharon going to the Temple Mount and starting the second intifada, with all the consequences that have flowed from that. Is that a lesson that we should draw from these events?
Baroness Warsi
I thank the right reverend Prelate for his warm words in relation to the way in which this inquiry was conducted quickly. It was certainly part of the clear remit set by the Prime Minister at the outset.
The right reverend Prelate makes an important point. To understand the sentiment within the British Sikh community it is important to understand the significance of Sri Harmandir Sahib; the significance of the timing of Operation Blue Star; the implications in relation to the damage that was done to Sri Harmandir Sahib; and the basis of some of the concerns that were being raised by the dissidents. It is an important point. This is the challenge that I have in a sometimes aggressively secular world; some of these sensitivities are not properly explored and understood.
Lord Avebury (LD)
My Lords, does the Minister consider that the destruction of some of the principal documents in this matter, and the fortuitous recovery of the contents of some of the documents by reason of the fact that copies were made, indicates that a review should be conducted on the rules for the destruction of documents? These matters could have been lost to posterity if it had not been for the copies that were made.
Baroness Warsi
I alluded to that in my repeating of the Statement. I said that we were determined to look at the wider issues presented by these events about the management and release of information by government, and, of course, the management of how documentation is held and how it is destroyed. I will certainly make sure that the views of my noble friend are fed into that.
Lord Richard (Lab)
Will the noble Baroness help me? Has the advice given by the British military to the Indian Government been unearthed? Is that one of the documents that has been discovered fortuitously? If so, has it been published? Presumably the Indian Government might still have a copy of that advice. It might have been copied inside Whitehall to heaven knows how many departments. If the document exists, does she not think that perhaps it would be a good idea to publish it?
Baroness Warsi
As the noble Lord was speaking, I was going through the documentation that had been published. There was a note of the advice that was given. I am not sure whether that is part of the documentation that is published. I will certainly check that again. I suggest the noble Lord goes back, reads the report and looks at the documentation. It may well be that the information is in there. I have seen so much documentation in relation to this matter over the past three weeks that I am starting to lose track of exactly which bits of it I have seen where.
Lord Elystan-Morgan (CB)
My Lords, both the Minister and the noble Lord, Lord Dholakia, referred to the Amritsar massacre of 1919. Does the Minister accept that this House is very intimately and embarrassingly connected with that massacre, in that after it took place a resolution was passed in this House—I believe unanimously—congratulating Brigadier- General Dyer on his distinguished conduct? Of course, I appreciate the apology made very properly by the Prime Minister some time ago, but has the time not now come when that blot on the escutcheon of this noble and honourable House should be removed?
Baroness Warsi
My Lords, I think that particular discussion would go beyond the remit of the Statement today. I go back to what I said before; I had an opportunity to visit Jallianwala Bagh. In many ways, this is much more personal to me than it may be to other noble Lords in the House as I am deeply connected to it in terms of my own family connections back to the Punjab. What the Prime Minister did in both visiting Jallianwala Bagh and saying what he said meant a lot to people—and certainly to my grandmother, who is still alive. History always judges matters in a different way but the Prime Minister has certainly tried to put the record straight.
Water Bill
(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Whitty
“( ) Granting of an authorisation of a retail or restricted retail authorisation for supply to non domestic sector customers must be done in such a way and on such terms that it does not disadvantage domestic customers.”
Lord Whitty (Lab)
My Lords, compared with some of the amendments before us this afternoon, this one is pretty straightforward and also pretty fundamental. We on this side of the House support the principle of extending competition in the non-residential retail sector of water, partly because we have been impressed by the progress made and experience in Scotland. There, not only have businesses and public bodies benefited from competition within the sector but also there appears to be benefit for the household sector from improved efficiency driven by that competition. That is a good model but of course history does not always repeat itself. We have a very different structure here in England and Wales, and markets are funny things. You cannot predict how the knock-on effects of introducing competition will work out in either the short or medium term.
The Government have made it clear that they do not at this juncture wish to give powers to extend competition into the household sector directly. The logic of competition in the non-domestic sector may well lead to improved efficiency but could equally lead to much tighter margins in the incumbent companies. Ideally, there would be other ways of compensating for those tighter margins but there would be a temptation for companies to restore their margins effectively through higher costs or less good customer service to the household sector. We know that that is not the intention of the Government, nor of the Opposition in supporting the Government in the principle of the move in this respect. We also know that Ofwat will use codes and charging regimes to try to prevent such a thing happening to the disadvantage of the household sector. However, would it not be sensible for this essential principle to be embedded right up front in the Bill?
I am sure that the Government will argue that this is probably not the right place for it but, because of the way the Bill is constructed and the slightly obscure way that retail competition comes in the redraft of 20 year-old legislation, the introduction of retail competition does not exactly leap off the pages of the Bill. Therefore, it would be sensible to put the qualification in early.
Accepting Amendment 1 would ensure that there is no ambiguity and that the intention of the Bill is to introduce retail competition in the non-domestic sector, but with no disadvantage in either price or in kind to the domestic sector. In addition to Amendment 1, Amendment 121 in this group would require Ofwat to keep an eye on the relativity between non-household and household charges. Amendment 45 reflects the need not to disadvantage the household sector by either price or lower service in relation to setting charges and establishing codes, which Ofwat is required to do under the Bill.
Amendment 1 is the principal amendment and would amend Clause 1 so that there would be no ambiguity. I very much hope that the Government can accept such an amendment, or something very like it. I beg to move.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, I thank the noble Lord, Lord Whitty, for his Amendments 1, 45 and 121 on the important issue of protecting householders. It is a crucial issue and one that the Government take very seriously.
Before I go further, I ought to take the opportunity to reiterate disclosure of my interests. I have a tributary of the River Thames running through my farm; I have an abstraction licence and a borehole. I own a house that was flooded in 2007 and I own one-third of a commercially operated lake.
The noble Lord, Lord Whitty, introduced the Water Act 2003 to Parliament, which was intended to put the customer at the heart of the water sector. This Government have continued that work through the water White Paper. We have been very keen, throughout the reforms that the Bill makes to the non-household market, that the household customer remains fully protected, and I think that we have achieved that. Indeed, the Bill introduces reforms designed to help us manage future pressures as efficiently as possible, ensuring that customer bills are kept fair for the long term.
The Secretary of State, Ofwat and the Consumer Council for Water all have a shared duty to protect customers. They must have special regard to, among other people, rural customers and people who are unable to switch their suppliers when carrying out their statutory functions.
There are already mechanisms in place to prevent business customers’ bills being subsidised by household bills. Ofwat’s policy of setting different retail price caps for household and non-household in the current price review will ensure that households do not subsidise the competitive market. Let us be clear about what that means. We can be certain that household customers will not cross-subsidise retail competition because there are separate wholesale and retail price limits. The costs of implementation for upstream reforms will be shared, as will the benefits. It is not desirable to prevent that, as this would also isolate household customers from the benefits of this reform.
We expect that household customers will benefit from the improvements and innovations that competition will foster. Water companies will be incentivised to introduce efficiencies and invest in improved customer services in order to retain and attract non-household customers. There will be positive knock-on effects. Household customers are also likely to benefit from these improvements, as our impact assessment shows.
We will come to the issue of de-averaging in later debates, so I will not detain your Lordships by talking about it now.
I stress that the Bill puts in place a framework that enables household customers to be protected against any changes to their bills resulting from the expansion of the competitive market. To be explicit, our charging guidance will say that de-averaging must occur only where it is in the best interests of customers.
I started by saying that we take the protection of customers of customers seriously. I hope that I have been able to reassure the noble Lord that we have thought about these issues very carefully indeed, and I hope that he will agree to withdraw his amendment.
Lord Crickhowell (Con)
My Lords, perhaps I might take this opportunity right at the start of the Committee to make two general observations. First, I cannot think of any complicated Bill which has been so admirably handled as this one has, so far, by my noble friend Lord De Mauley. He has had a series of briefing meetings trying to explain the complexities of the Bill and has taken infinite trouble to write to those of us who expressed anxieties at Second Reading or on other occasions and give us reassurance.
Having said that, this is an extraordinarily complex Bill, as the noble Lord, Lord Whitty, indicated in moving his amendment. I am told that there are competitors but in my 43 years in both Houses, I do not believe that I have ever had to follow a more incomprehensible Bill. That is because it takes two major pieces of legislation, and one or two other less relevant pieces of it, and amends them in a series of complex ways. It then introduces a whole string of regulations, some of which are not yet defined and made. Simply finding your way through the Bill to find the clauses is extraordinarily difficult. When I thought that I might put down probing amendments to bring out one or two points, I abandoned the task as I could not begin to see where I could do it.
That leads me to make one other observation. When we are confronted with this kind of legislation, I wonder whether it would not be better simply to start with a clause which says, “This Bill cancels and replaces”—or whatever the word might be—“the following Bills”, so that it presents the legislation affecting the industry in one comprehensive new Bill which everyone can follow. What worries me is that once we have completed our proceedings in this House and the Bill becomes an Act, how on earth are the general public and those who have to operate it going to discover easily what the Bill’s contents mean for them? I wonder whether the Government have yet given any thought to having a clear way in which they could present things to the public, and indeed to the water authorities and the new people who we hope will be brought into the industry. Perhaps they could build on the kind of papers that my noble friend has so helpfully presented. There is a real problem and I hope that, as we go through these proceedings, the Government will give careful thought as to how we tell the British public and those who have to implement the proceedings what is actually in the Bill.
Lord De Mauley
Perhaps I might quickly respond to that. First, what I should have done when I spoke first was to thank those noble Lords who have come to discuss their concerns with the Bill with me. That has been an extremely informative and helpful process. I am grateful to my noble friend for his point; he is not the first to say it. As he kindly says, we have been doing our best to help noble Lords with the Bill and I will continue to do that. I also take his point about informing the wider public. If I may, I will take that point away and see what we can do.
Lord Whitty
My Lords, I thank the Minister and the noble Lord, Lord Crickhowell. I have to say that if the noble Lord, Lord Crickhowell, cannot understand this Bill, with not only his experience of the whole legislative programme and procedures in both Houses but his intimate knowledge of the water sector, there is precious little hope for the rest of us. As for the general public or even those people who are to operate it within the industry and its regulation, there are some serious difficulties.
The noble Lord, Lord Crickhowell, was absolutely right to say, as I mentioned at Second Reading, that the Minister and his officials have been extremely generous with their time and effort. A lot of those documents are extremely comprehensible. It is a pity that that is not reflected in the Bill but it is a huge improvement on some departments that we have at times known, under all Governments. So I congratulate Defra and the Minister on the information given to us.
However, given the Bill’s complexity and the difficulty of reflecting it in simple terms for those who are operating it, let alone the average consumer or small business at the far end of the water chain, would it not be simpler to put something quite straightforward, like my amendment, right at the beginning of the Bill, so that everybody could understand it? The Minister has not taken this point fully.
I can understand the Bill sufficiently to see that there are checks and balances in relation to the charging system. It is difficult to see how the domestic sector would, literally, come to subsidise the non-domestic sector as a result of competition being introduced in the latter. However, it is not just about pricing. If the incumbent is faced with squeezed margins it is not just a question of banging the price up a bit because that is, by and large, set for five years and Ofwat would be pretty stringent in ensuring that it stays. However, you can save money by diminution of service and this is why I use the word “disadvantage” rather than referring to cross-subsidy. The sector could suffer from non-price effects of this if it went wrong and competition, instead of driving efficiency across the board, as we are told it has done in Scotland, did not have that effect on the supply to the domestic sector.
I would like to see this at the front of the Bill but I am clearly not going to get that from the Minister today. However, I suspect that, as we go on, there will be other points where greater clarity and part of the Bill being written in large letters would help people to understand. I beg leave to withdraw the amendment.
Viscount Hanworth
“(8) The Secretary of State shall, following consultation, issue rules for the designation of the market operator for the retail non household market, setting out the procedures, responsibilities, status and governance of such market operator.”
Viscount Hanworth (Lab)
My Lords, I also thank the noble Lord, Lord De Mauley, for his very helpful approach in informing some of us of the intricacies of the Bill. This is a probing amendment, designed to throw some light on the arrangements regarding the so-called market operator. An electronic search of the Bill fails to reveal a single instance of the words “market operator”. We have been alerted to the intention to create this entity by an organisational flowchart entitled “How Will it All Work?”. This was provided by Defra officials in the course of a seminar that preceded the introduction of the Bill to this House. The words are to be found within a centrally located box that is connected to boxes labelled “the regulator”, “the retailers” and “the wholesalers”. I tend to view such charts from the perspective of the circuit diagrams of electrical engineering, hence I have anxieties about the dangers of short-circuiting or worse. This flowchart contravenes all the rules of electrical safety.
There was nothing in the document presented at the seminar to inform us of the role of the market operator. However, one noticed that the top left-hand corners of its pages were stamped with the logo of an organisation called Open Water. We have been told that Open Water is a programme created to support the Government’s vision for the future of water management in England and that it is to be steered by a high-level group consisting of representatives of Defra, the Scottish Government, the Welsh Government, customers, Ofwat, the Water Commission for Scotland and the water companies. Only Uncle Tom Cobbleigh is missing from the list.
An immediate question is whether this organisation is real or a mere fiction. One way of substantiating the existence of an organisation is to look for its website. The website of Open Water is readily accessible but an examination of what is there only adds to the doubts and confusion. One prominent item on the site is a question and answer file that purports to be an interview, in real time, with the programme director, Keith Fowler. It is clearly nothing of the sort and this assertion is notwithstanding the fact that the document ends by expressing thanks to Keith Fowler for “talking to us today”. I had not previously encountered this kind of bamboozlement.
A somewhat more informative document, available at this website, is titled Market Operator Target Operating Model. This purports to tell us what the market operator will and will not do. However, in places the document is curiously self-contradictory. Thus it is stated that the market operator,
“should carry out monitoring and reporting of market code compliance”,
and have delegated authority to issue,
“warnings and … financial and non-financial penalties”.
It is also stated, in a seeming contradiction, that:
“Enforcement of significant market issues should not be performed by the”,
market operator, and it is said, in an oddly confusing manner, that, if needs be, the market operator,
“should administer, but not arbitrate on, market disputes”.
Clearly, there is need for some clarification here, which is what the amendment seeks.
A further issue that needs to be clarified concerns the steering of a market operator, and its relationship to Open Water. We learn from the aforementioned document that the market operator,
“should be a company limited by guarantee”,
that will be owned and paid for by the water companies, that its set-up costs should be paid for by the wholesalers and that its running costs should be split between wholesalers,
“incumbent retailers, new entrant retailers and self-supply customers”.
A danger that may arise and that needs to be guarded against is that of regulatory capture, a process by which regulatory agencies eventually come to be dominated by the very industries that they have been charged with regulating. The terminology originated in the United States, where it has been used to describe how the intentions of the federal Government have been widely subverted. Aspersions of regulatory capture have already been made against Ofwat; we need assurances from the Minister that the Government are aware of such dangers and will take steps to avert them. I beg to move.
The Earl of Selborne (Con)
My Lords, I declare my interests, as I did at Second Reading, that, like the Minister, I am a farmer with an abstraction licence, although I have not been flooded—so to that extent, I do not claim the same interests.
The amendment would require Ministers to issue rules for the,
“designation of … procedures, responsibilities, status and governance”,
of a market operator. I cannot believe that such ministerial control would assist in the implementation of a successful market. In regulated utility industries, whether energy, communications or water and sewerage, the management and control of market operations is initially the responsibility of the regulator, working alongside the industry. Once the market is up and running, it becomes the responsibility of the industry, supported of course by the oversight of the regulator, which provides the framework. This approach helps to ensure that the regulator and the industry work together; the industry will need to adapt to innovation and new circumstances. We recognise that in this Bill we are promoting innovation and we have to ensure that the regulation adapts accordingly. The industry will need to adapt to innovation and these new circumstances, and it is for the regulator and industry to ensure that working practices are aligned in the regulatory framework that we are establishing in the Bill. I simply do not believe that it would be helpful to have a politician—the Minister of the day, of any party—fulfilling the role of controlling the market operator in this far-reaching way.
Baroness Parminter (LD)
My Amendment 95 is grouped with the amendment moved by the noble Viscount, Lord Hanworth. I wish to probe the issue to get a bit more information from the Minister on the shadowy role of the market operator. Before I do that, however, I take the opportunity on this first day in Committee to say that the truncated nature of the parliamentary process, with less than two weeks between Second Reading and going into Committee, has presented certain challenges to those of us who are trying to do our duty and give proper scrutiny to this complex Bill, as my noble friend Lord Crickhowell said. Like others, I thank my noble friend the Minister and the Bill team for the briefings and the clarity of the briefing papers, but that still leaves certain gaps in our knowledge. Noble Lords will be aware that the comments of the Delegated Powers and Regulatory Reform Committee on the Bill were published only on Friday, and we still await the Government’s response. Clearly, we have had to table our amendments before the Government have provided us with the response to important points that the Delegated Powers and Regulatory Reform Committee has made, and that is not particularly satisfactory or helpful.
Lord Whitty
My Lords, I thank my noble friend Lord Hanworth and the noble Baroness, Lady Parminter, for drawing our attention to this aspect of the reform. It is passing strange that, in one of the very nice charts that the department produced and on which we have been congratulating it, it is clear that this market operator is the key to how the situation will play out in practice. We are setting up a market that does not exist, and we are trying to create and sustain it in a way that on the one hand gives the Secretary of State certain powers and on the other Ofwat certain powers, building on its existing ones.
Nowhere in this legislation are there any specifics about this market operator. As my noble friend has found out—I did not know this and I am not sure if any other noble Lord knew—there is a 61-page document on Open Water’s website telling us what it is doing. Having tried to fight my way through that document I am not sure that I am any better informed. Nevertheless, it is clearly an important body. The noble Earl, Lord Selborne, may be right that the Secretary of State should not be laying down precisely how it operates.
The Minister owes it to the House at least to put on the record what the Government expect of this organisation. It has very wide functions. It is crucial to how the market is going to operate, and has fairly substantial powers in terms of dealing with relations between existing companies and with the regulator. This is absent from the legislation, in even the mildest form. That is a bit bizarre. Its objectives include registration and switching; financial settlements; market governance; slightly ambiguously, the enforcement of codes—certainly their operation and administration—and the operation of the industry database. It is owned not as a separate, independent stand-alone company, but by the operators in the industry, which are nine regional monopolies, or eight if Wales is not involved; I am not entirely sure about that. It will allow new entrants to come in, which is jolly good of it. It is not entirely sure whether potential new entrants also have a role in this in relation to the market operating well.
The organisation’s relationship with Ofwat is not clear. It is not owned by Ofwat, which it says explicitly. It is not a subdivision of Ofwat, but is it a contract from Ofwat? Is Ofwat giving these responsibilities to that organisation that is then run by the industry, in the way that the noble Earl, Lord Selborne, describes? If so, are that responsibility and contract ever contestable? There are a lot of questions here. In some ways, the powers and responsibilities that it has, and the governance that it appears to have, would have been familiar to 18th-century economists. They would probably have called it an institutionalised cartel. I am sure that is not what the Government intend, but the way it is described in these documents tends to suggest that it is a fixed market and not as open as the Government like to claim.
Leaving aside one’s anxiety about this issue not having even the slightest mention in the legislation, before we finish our consideration of the Bill the department and the Minister need to lay out a little more precisely how this body will be set up, how it will operate, to whom it is responsible and how its performance is to be judged. Therefore, although these are basically probing amendments, I support the intention behind them.
Baroness Northover (LD)
My Lords, I have no interests to declare except as a frequent user of water and sanitary facilities and, therefore, I am extremely grateful that we do, indeed, have both.
Amendment 2, moved by the noble Viscount, Lord Hanworth, seeks further clarification about the market operator. At his request, I will do my best to be clear and not add to the bamboozlement that he referred to. I say to my noble friend Lady Parminter that we are very grateful to the Delegated Powers and Regulatory Reform Committee for its careful consideration of the Bill. We will respond in due course and make sure that noble Lords receive a copy of the Government’s response.
I am most grateful to the noble Viscount, Lord Hanworth, and to my noble friend for tabling their respective amendments and thus for giving me the opportunity to discuss the market operator, clarify its role and purpose and, I hope, set their minds at rest about any concerns they may have. The market operator will be a company limited by guarantee that will initially be set up by Ofwat. Incumbent water companies and licensees that will operate in the competitive market will own and manage the market operator. As noble Lords will know, Ofwat is accountable to Parliament and has a primary statutory duty to protect customers as well as powers to take action against anti-competitive behaviour under the Competition Act. Ofwat will oversee the overall operation of the market and ensure that it is working in the interests of customers, with powers to intervene if the market operator were acting in any way that was anti-competitive. For example, Ofwat could take action against the market operator under the Competition Act 1998 if its activities were disadvantaging customers.
I should make it very clear that the market operator is solely a facilitator with an entirely administrative role. Despite what the noble Viscount, Lord Hanworth, said, it is not a regulator. The market operator will hold a register of premises eligible to switch. It will also facilitate switching and financial settlement between incumbent water companies and licensees. Ofwat will be involved in developing the licence conditions that will set out how licensees and incumbent water companies must interact with the market operator. Market codes may also be used to set out some aspects of these arrangements. The market operator does not in itself have any formal statutory roles.
Looking somewhat wider than the Bill—I see that the noble Viscount, Lord Hanworth, looks perplexed—I hope that the following remarks may be helpful. There are other examples of such companies set up in retail markets—for example, in the gas and electricity retail markets. Perhaps the noble Viscount needs to look at some other 60-page documents in relation to other utilities. The Metering Point Administration Service company administers switching in the UK electricity market and Xoserve does the same for gas. These are not exactly household names because they do not come into contact with the public. They are private companies set up for and by participants in regulated markets to operate silently in the background. None of these companies was established under statute and none has had its respective remit set out in legislation or by the Government.
The water industry and regulators have already set up a company limited by guarantee called Open Water Market Ltd. The noble Viscount has clearly done a lot of research on this matter. The company will initially be a vehicle to take forward the delivery of the Open Water programme, which is establishing the retail market on behalf of the Government, Ofwat and the industry. A decision will be made in the coming months on whether this company or another one will be established as the market operator for the retail market that goes live in April 2017.
The market operator will be governed by its articles of association and will be accountable to its members, which will be the incumbents and licensees that it serves. As a limited company, it will be subject to the provisions of the Companies Act 2006 and will have to prepare accounts and reports in accordance with that Act. Decisions will have to be made in the future on whether the retail market operator or another body should operate in the upstream market. If there were to be an upstream market operator it would not have roles around the inputting of water or withdrawals of sewage that would properly fall to the Drinking Water Inspectorate or the Environment Agency. The market operator’s role is likely to be limited to registering arrangements and verifying quantities of water input and consumed to facilitate financial settlement arrangements. An example of such a market operator in energy is Elexon, which facilitates settlements for the electricity generation market.
I shall comment on a point made by my noble friend Lady Parminter about market codes being subject to the affirmative procedure and explain that market codes will not be subject to any parliamentary procedure. The regulations under Clause 12 are subject to the affirmative procedure and these codes will be subject to consultation. If my noble friend needs further clarification we can provide that.
Coming back to the issue of what the market operator is, I conclude by saying that the market operator will not have any statutory roles, duties or responsibilities within the retail market of the sort that would need to be set out in regulations. I hope that I have clarified that. It will handle routine transactions and communications between incumbents and licensees to help them to meet their statutory and regulatory obligations, as prescribed by legislation, codes and their licences. The market operator will not take over any responsibilities that properly belong with the incumbents, licensees or regulators. I hope that I have provided some elucidation to noble Lords. Obviously we would be happy to provide any further elucidation that is required. In the mean time, I hope that the noble Viscount will be content to withdraw his amendment.
Viscount Hanworth
I thank the Minister for that explanation. She has told us that the market operator is intended to operate silently in the background but I am not sure that that justifies the complete silence of the documentation we have received about the market operator. This is a fundamental part of the architecture of the water industry as it is intended to evolve so the lack of any mention of it in the principal documents is extraordinary. I have made that point rather forcefully but I shall withdraw the amendment as it is a probing amendment. I hope that others will also voice an opinion about the extraordinary lacuna that we have in the documentation if not in the legislation. I beg leave to withdraw the amendment.
Lord Whitty
“(e) the Consumer Council for Water or other appropriate statutory consumer body”
Lord Whitty
Amendment 3 is the first of a number of amendments that we will propose from the Opposition Front Bench on engagement with the Consumer Council for Water. It is important to recognise that one of the main players in the water sector has been the Consumer Council for Water. The Minister referred to me bringing in the 2003 Bill, which was when we took the Consumer Council for Water out of Ofwat and made it an independent, self-standing, statutory consumer body. While there has been a lot of change in statutory consumer bodies over the years, the consumer council has played an important role. While it has supported the regulator’s focus on the consumer, it has also challenged it. There has been a reasonable relationship between Ofwat and the consumer council. In recent years, Ofwat has encouraged some greater sense of responsibility on the part of the water companies and set up consumer challenge groups, which have fed into the boards of those companies. The Consumer Council for Water has helped to facilitate that. It is therefore important that that relationship is fully institutionalised.
Baroness Northover
My Lords, I thank the noble Lord, Lord Whitty, for tabling these amendments. The Government recognise the significant role that CCWater plays in the industry by representing water and sewerage customers in England and Wales. The noble Lord made that case cogently.
However, these amendments concern the licence authorisations that relate to inputting water to the network, and the noble Lord is clearly well aware of that point. This means that they relate solely to the relationship between water supply licensees and the incumbent water companies, rather than that between licensees and customers. Before issuing a wholesale or supplementary authorisation, Ofwat must consult the Environment Agency, Natural Resources Wales and the Drinking Water Inspectorate. This is not least because they can provide intelligence on any prospective licensees that are trying to operate in this area. The purpose of this is to ensure that these parties are fit and proper persons for the purpose of operating in the new markets.
We would like CCWater to continue carrying out its valuable work of protecting customers and handling customer complaints. It is worth noting that Ofwat already publishes a notice on its website asking for comments from interested parties before it issues a licence with either a retail or restricted retail authorisation. CCWater therefore has the opportunity to respond on any issues that might affect customers at this point. I hope that any concerns, as identified by the noble Lord, Lord Whitty, can be addressed in that way. I hope that he is reassured by this and is willing to withdraw the amendment.
Lord Whitty
I thank the noble Baroness for those comments. She is right that these clauses deal with the relationship between new bulk suppliers and the incumbents, but that has a significant effect on the nature of the market beyond that. If the purpose of this consultation is to establish whether the newcomers negotiating a relationship with the incumbent are fit and proper persons, one issue is the effect on consumers down the line. I accept that Ofwat is open to people writing in, but why is the statutory consumer organisation not one of those listed to give a view in the first place? We are changing the market, and there should be a consumer view on how that market is changing and who is entering that market. I am looking not for a veto, but for an input. I hope that the Government will think slightly more. It would not cost them that much to add a new paragraph (e) to this subsection, and it would be consistent with what is done later in the Bill—admittedly on parts closer to the consumer—and with the established legislation and regulations. I withdraw the amendment for now, but I would hope that the Government could consider this further.
The Earl of Selborne
The Earl of Selborne
My Lords, I shall speak also to, I think, 32 amendments in this group. I am conscious of the fact that my noble friend Lord Crickhowell said that this Bill started hopelessly complicated, and I suspect that I stand charged by him with trying to make it ever more complicated—and I do so. This is because I am asking the Minister to ensure that the threat of moving towards de-averaging—something neither the Government nor any of us want—is not going to be advanced by the fundamental concept incorporated in the competition aspects of the Bill. That concept is the provision of a direct link between an upstream service provider, whether water or sewerage, and a retailer to non-household customers.
The position under the Bill is that the customer can contract directly with a resource provider. This may well bring lower charges to some customers, if, for example, a new entrant is able to offer a water supply at a price lower than the average price that the incumbent water company is able to charge. In a negotiated market, there will be a range of attributes that will favour one supplier over another. That is desirable and helpful. Price is one such key factor. If, as is possible here, large, non-household customers successfully negotiate on price alone—without respect to the other services that we are expecting to be provided in terms of environmentally friendly services, water savings and much else—that will favour one supplier over another. Eventually, this will result in a situation in which we will drift inexorably towards a two-tier market with the principle of average prices for all customers abandoned. It follows that smaller non-household customers and anyone located in remoter rural areas will face increased costs.
If we think that this is a remote possibility, we should bear in mind that it has actually happened already. In Wales, the Shotton case set a precedent that local costs were required to be used in a ruling in setting prices under bilateral deals. I am told that this was a one-off and that it will not happen anywhere else. However, when I hear that it has happened, and that there is a threat, I say that this is the opportunity to make sure that it does not happen again. I am sure that we shall look at other proposals as we go through the Bill to ward off the threat of de-averaging.
This is a fundamental proposal: it requires contracts to be made with the undertaker, with the other two parties participating. The purpose of the amendment, therefore, is to remove the direct link between the provider of resource services and the retailer. It would remove any opportunity for a large corporation to act in a way that was detrimental to all other customers.
Under the Bill as drafted, we could end up with non-household customers paying different prices for the same service within the same appointed area. As I have said, smaller businesses and non-household customers in rural areas are most likely to be affected. One of the charging principles that I accept in the Bill—I quote from the guidance—is the following:
“No category of customer should be unfairly disadvantaged by the way reform impacts on water charges. A fair and non discriminatory approach to sharing network costs will be critical”.
However, the guidance goes on to say:
“Ofwat has a number of tools to limit the effect of de-averaging on customer charges”,
and that it will ensure that,
“any marginal charges are introduced in a measured fashion and, above all, that they are in the overall interest of customers”.
So we are being assured that Ofwat, under the terms of the Bill—we will come to the codes and the rules later —can deal with this problem.
However, I am not entirely clear that this is the case, and I hope that the Minister can give some reassurance—remembering, of course, that already in Shotton we have seen an example of two-tier pricing that has impacted on other customers in the region. Can Ofwat really be expected to manage the impact of de-averaging to prevent any unfairness between customers, especially rural customers, when contracts for non-householders are made directly between retailers and potential upstream services?
Helpful progress was made in Committee in another place and a strong assurance was given that de-averaging would be prevented through ministerial charging guidance, which would explicitly rule it out. However, that is only a limited assurance when one recognises that if these contracts between the resource provider and the retailer were to be decided under European rather than United Kingdom competition law, the United Kingdom Government’s charging guidance would be overruled. So, much as one would take comfort from the ministerial guidance, frankly, it would not overrule European competition law.
I will say again that the purpose of the amendments is to require those with wholesale authorisation to interact with the incumbent water and sewage undertaker rather than with the retailers. I beg to move.
Lord Moynihan (Con)
My Lords, my name has been associated with the amendments tabled by my noble friend. He set out his eloquent and comprehensive assessment of the issue of de-averaging and said that he intends to speak further when moving his Amendment 32. There are further amendments. Your Lordships will have noticed that there is a 33rd, Amendment 61 to page 152, line 23—it is tucked away at the back—and will excuse the fact that it is not to the first part of the Bill. However, the amendment echoes the points that have been made so eloquently by my noble friend.
Of course, in many respects, these are probing amendments. However, they have at their heart the significant concern that if de-averaging were to take place some non-household customers, particularly smaller customers in rural areas, could see their charges increased markedly. This could have serious impacts on those non-householders and potential political consequences in some areas.
The prudent way through this would be to remove the direct link that exists in the Bill between the provider of the resource services and the retailer/customer, as my noble friend has pointed out.
What I would like to ask, however, is that the Minister clarify the extent of this issue. We have received advice from Scotland—the economics consultancy Oxera and Scottish Water undertook analysis into the impact on customers, were de-averaging to have taken place in Scotland. Under the Scottish Government’s rules, the policy is to rule it out. However, Oxera found that even on very conservative assumptions, many businesses could see their charges rising by at least 25% and, in a fully de-averaged scenario, some customers in Scotland could end up paying up to 10 times their current bill. That is evidence that we have received on one hand.
However, on the other hand, the Bill focuses on choice. Retail services account for something like 10% of the non-household bill—which accounts for something like 20% of the total bill—so approximately 2% of the amount would be in this sector. I would be grateful if the Minister could highlight the seriousness and impact of this issue in terms of its scale. Does he agree with the figures of Oxera put forward by our friends north of the border, who have done some outstanding work in generating competition in this sector? If so, and if that is to be borne out by the evidence, it underlines how important these amendments are.
Lord Crickhowell
My Lords, there is something to be said for learning from experience. The fact is, we have the experience of the Water Industry Commission for Scotland, which introduced highly successful arrangements from 2008. It is very clear in its recommendations on this particular point, and in the paper sent to some of us it has taken note of the debate that took place in the other place. It says specifically:
“In our view the prudent course of action would be to remove the direct link between the provider of resource services and the retailer/customer. This would remove any ambiguity that could be exploited by a large corporation to the detriment of all other customers. It would also allow a market to develop that could help in building resilience and improving our environment”.
On the front of the paper, it simply says:
“Some of these issues were raised and debated during the Committee stage in the House of Commons but as yet the Government has not been persuaded to accept amendments on the topics of substance we discuss in this note”.
Clearly, in the light of the good experience in Scotland and the very firm advice given to us, we need to know why the Government are not accepting the advice. I shall be very interested to hear what my noble friend has to say.
Lord Whitty
My Lords, I speak only because the noble Earl, Lord Selborne, and to some extent the noble Lord, Lord Moynihan, have rather pre-empted my speeches on the next group. Clearly we are on the same page. The reason I did not put my name to these amendments was that I was not entirely clear what they would do. I thought it would be better to establish a principle position on de-averaging and see what the Government thought. Clearly the Scottish experience is important. Given that experience, it is incumbent on the Government to tell us why they are not legislating in that way for England and Wales, and whether the precise amendments suggested by our Scottish colleagues would work under the Ofwat regime. Clearly the principle is an important one and it is one I will come back to on the next group.
Lord De Mauley
My Lords, these amendments, tabled by my noble friends Lord Selborne and Lord Moynihan, seek to introduce a fundamental change which would narrow the approach to upstream competition in this Bill by removing the link between upstream arrangements and retail arrangements with customers. They would mean that licensees would be able to make arrangements with incumbent water companies to provide water and sewerage services without needing to have a specific customer to consume the water or use the sewerage services through the retail market. The implication is therefore that the market might be established through incumbents tendering for new resources under a so-called single buyer model. This would be a significant change from the regime that has been in place since the Water Act 2003 and which we propose to extend through this Bill.
The current approach provides common carriage rights to licensees who want to provide their customers with water resources or sewerage treatment services using incumbents’ networks. Common carriage is the term used when new entrants are given rights to use incumbents’ networks to provide services to their customers. A single buyer approach is a very different model with decisions on tendering for water supplies or sewerage services resting with the incumbent. It provides fewer rights and less flexibility for new entrants.
The Water Act 2003 brought in a specific common carriage regime for new entrants to access the public supply system by making water supply a licensable activity. Under this regime, the same licensee that puts the water into the system must supply the retail services to the customer. The Bill reforms the existing regime by allowing different licensees to input water and provide retail services to eligible customers, but still requires there to be a specific customer. There is nothing in existing legislation that prevents incumbent water companies from making arrangements with third-party water suppliers or sewerage service providers to input water into the system or deal with sewerage disposal. Indeed, we are pleased to see that Thames Water has gone to the market to see which third parties could provide it with water in order for it to meet future water resource needs. Potential suppliers to Thames Water do not need a water supply licence to be able to make an input under this tendering process. There is no need to amend the Bill to make it possible for third-party suppliers to sell water to incumbents, should we feel this is the right way to go in the future. Clause 12 is designed to enable this. The Bill also provides for licensees to withdraw waste water and sludge from the sewerage system through the disposal authorisation in the sewerage licence. This could be used by Ofwat to introduce a similar model to a single buyer arrangement in the sewerage market if it feels that this would be appropriate.
Through the Bill, we are seeking to bring in new resources and introduce more innovation into the sector. My noble friends’ amendments would allow incumbents to dictate the future direction of upstream markets. This would reduce pressure on those incumbents to introduce efficiencies that will benefit customers and the environment because only those licensees that are able to bid for and win contracts would be able to enter the market. Incumbents rather than customers would therefore determine future upstream markets.
My noble friends have indicated that the main objective of the amendments is to remove risks connected with the de-averaging of water charges. As the noble Lord, Lord Whitty, said, that is something which we will come to in a little more detail in the next group of amendments, but I hope that your Lordships will allow me to say a few words on it now in response to the contributions that have been made. There is a crystal clear steer from the Government in our charging principles that Ofwat must not allow de-averaging that is harmful to customers. Ofwat has all the necessary regulatory tools to enable it to limit the effect of de-averaging on customer charges. Ofwat has clearly stated that it believes that these tools are sufficient. The Government’s charging principles make it plain that Ofwat must use these tools to ensure that any de-averaging or cost reflectivity is in the overall interests of customers. Two independent experts have reviewed the issue of de-averaging: Professor George Yarrow for Ofwat and Professor Martin Cave for the Consumer Council for Water. Both experts confirmed that Ofwat can facilitate upstream competition without any de-averaging. De-averaging has not happened in other regulated utility sectors, even though greater proportions of those markets are open to competition, and it is no more likely to happen in the water sector.
I stress again that the Bill puts in place a framework that enables household customers to be protected against any changes to their bills resulting from the expansion of the competitive market. Our charging guidance will explicitly say that de-averaging must occur only where it is in the best interests of customers.
My noble friend Lord Selborne raised the case of Shotton as a legal precedent to support the case that de-averaging is a real risk. It is a complex and long-running case, but I hope I can persuade him that it is a misunderstanding to describe it as a case of de-averaging. Shotton was a very unusual case and it is not appropriate to extrapolate from it more widely. For example, it concerned a discrete system that served only two customers, one of which was served by Albion Water. This is very rare. To give some context, the case only represented 0.01% of Welsh Water’s turnover. At the time of the dispute, this agreement was not subject to regulation by Ofwat. The Bill includes measures that will bring all such transfers within the scope of the regulatory regime. Ministerial guidance and Ofwat’s charging rules will therefore set out how charges between water companies and inset appointees such as Albion Water should be determined in future.
My noble friend raised the concern that EU competition law might require that indiscriminate de-averaging takes place, affecting both business and household customers. First and foremost, there is no general prohibition under competition law against the use of average pricing. In fact, it is common practice in both regulated and unregulated sectors. The obvious examples are the gas, electricity and telecoms sectors. In each of these regulated, networked sectors, regionally averaged prices have remained the norm. There is no suggestion that this approach is inconsistent with competition law.
My noble friends Lord Moynihan and Lord Crickhowell referred to parallels with the Scottish system where there is no upstream competition. In England, we have a very different market structure and a different set of resource challenges. We are learning from the example of Scotland where it is appropriate to do so but they are different systems and their regulation will accordingly be different. Perhaps we might discuss the Scottish situation in more detail in subsequent groups of amendments.
My noble friends’ amendments remove the direct risk of de-averaging but may not lead to a better outcome for customers. They could still see an increase in charges if incumbents introduced overly burdensome standards in tendering contracts or made poor decisions over which bids to accept. Ultimately, incumbents would not be incentivised to make their upstream services more efficient and would continue to be incentivised to make decisions that benefit themselves rather than customers.
Given that these amendments considerably narrow the scope of competition in the sector, I ask my noble friend to withdraw his amendment.
The Earl of Selborne
My Lords, I was not expecting a resounding round of applause from the Minister for these proposals, which are fairly fundamental in tackling the whole concept. Nevertheless, the Committee should look seriously at precedents, such as Shotton, which, the Minister assures me can be ignored because it is almost irrelevant. When we have an example of a court case which has determined that the price of the local supply of water should prevail, there is, I suggest, quite a threat that this could be rolled out on a larger scale. I think we should take note of that.
We are effectively being assured that Ofwat will have the ability to regulate contracts made between the wholesaler and the retailer. We will come later in other amendments to test the extent to which Ofwat has sufficient powers and codes to ensure that these contracts do not ultimately work to the disadvantage of, for example, rural communities and others. I am not entirely clear why my noble friend is so certain that this puts the incumbent in a stronger position than he might otherwise be, because you are effectively getting back to the same position, which is that Ofwat, under the Bill, has to determine any contract.
Lord Whitty
“( ) The rules must include provision for and in connection with ensuring that there are no variations between charges, or the amount of charges, imposed by a water undertaker under different section 66D agreements in consequence of the location at which the duty or duties to be performed by that undertaker under such agreements fall to be performed.”
Lord Whitty
My Lords, some of the issues covered by Amendment 9 have been discussed in the previous group. I do not entirely disagree with the Minister’s response on common carriage, in terms of how water gets delivered and having as broad a range of potential new retailers as possible. However, the outcome seems to be that if you have de-averaged prices, you have discrimination between users. Whether all the structural amendments—some in this group and some in the previous group with the amendment of the noble Earl, Lord Selborne—would be necessary to prevent that, the Bill ought to enunciate that principle. At the end of the day, we do not want a market where the easiest route leads to suppliers cherry picking and to a two- or three-tier market for the final delivery of water to businesses, public authorities and so forth—the non-domestic retail market.
In one sense, Scotland shows us what the benefit to business, and the knock-on effect to the domestic side, has been. It has been not in differentiated prices but in better service, in driving water efficiency both in the delivery and use of water, in better means of dealing with waste water, in better water treatment in specialist cases and in disposal of water and waste. If you put competition wholly on the price side, you will not get those advantages. It will be easy for a supplier, on the supply side, to have a more accessible or more cheaply accessible source of water at the upstream level to bring to its business consumers or, on the demand side, to have a group of businesses and other institutions taking advantage of its terms because they are all fairly close together and all have similar requirements, and therefore there are economies of scale in actually supplying that institution.
I do not think that the Government envisaged—and nor did we on this side—the increasing competition in the retail sector as being primarily about wholesale price. Reassuring noises have been made about Ofwat having the ability to ensure that de-averaging does not take place. The natural drive of the market, however, is likely to make it quite attractive. Unless Ofwat has a clear line, which this amendment would give them, that the wholesale price and therefore the retail price of wholesale water would not be differentiated by location, we will get some differentiation of outcome. We will get cherry picking and we will get distortion. It will hit particularly the more remote rural areas and rural businesses in those areas; it will hit particularly businesses in rundown parts of the inner city, where not many of them are inclined to negotiate deals with the company; and it will hit businesses where it is difficult to see how a new arrangement would work.
Unless there is an overall presumption that there should be no de-averaging then it is quite easy to see how the market would end up with that. It may be that Ofwat’s powers would be exerted to prevent that, but this Bill does not require Ofwat to do so. The terminology that de-averaging would exist only if there was an “overall benefit” to consumers makes it quite difficult to assess. You have an example of de-averaging which clearly might benefit the immediate consumers who are benefiting from that de-averaged price, but how do you then assess its effect in the short and medium term on consumers as a whole? It is quite a difficult judgment for Ofwat. If the outcome the Government want is that which has been delivered in other quasi-utility markets—largely it has been—why not actually tell Ofwat to deliver that? Surely it would be easier.
I hope that the Government take this slightly more seriously. It will not necessarily unravel their whole approach to competition in this Bill. It is simply giving Ofwat an explicit duty that will deliver an outcome the Government say they want. The Government should not fundamentally object to this amendment. It may require a bit of back-up along the lines the noble Earl, Lord Selborne, has suggested already, but it requires at least the principle to be reflected in the Bill. Otherwise, we will get cherry picking and we will get discrimination, which is unlikely to drive the kind of efficiencies that we have been praising the Scottish system for delivering. I beg to move.
Lord Cameron of Dillington (CB)
My Lords, as this is the first time I have intervened in Committee, I declare an interest as a farmer with abstraction licences. Even though I come from Somerset, my farmland is not yet flooded. However, if the current rains continue, it is unlikely that I will be able to say that on Report.
I want to back up the noble Baroness, Lady Parminter, who said that she could not understand why we had only a week between Second Reading and Committee. This is a very complicated Bill and I am not certain why that particular protocol has been broken on this occasion. I have never had an explanation of it. Maybe I have missed some explanation somewhere, but I think it is wrong. I hope it is not a precursor to a Commons-style approach to Bills, where arguments and the length of discussion are ridden over roughshod.
I strongly support Amendment 9 and the whole question it addresses. It is very important that de-averaging does not take place. I would have supported the noble Earl, Lord Selborne, in his amendments to ensure there are no detriments or de-averaging if I had understood that that was their intention. The noble Lord, Lord Whitty, said that he was not entirely clear what the amendments intended; personally, I could not understand them at all. Anyway, I would have supported the noble Earl had I known.
Water, like Royal Mail, should be covered by a universal service obligation that is amendable only with the permission of Parliament. Water should be a universal right—although clearly there can be exceptions, as with Royal Mail. For instance, I believe that a postman does not have to deliver to a household where he is permanently attacked by a savage dog. The water equivalent of that might be a blatant leak in a householder’s garden where the water was going to waste; there could be exceptions.
It is very important, particularly in rural areas, that de-averaging does not happen. I have heard the view expressed that de-averaging is bound to happen with the introduction of competition, especially if that competition eventually moves on to cover domestic premises. I personally hope that it will but obviously we should go softly, softly. I do not see competition as incompatible with de-averaging. It is possible to invest efficiently in the overall infrastructure and still charge your customers competitively, based on an average cost per litre, once the overall infrastructure is in place and the supply of water adequate for the demand. That obviously means we must manage the supply, the overall abstraction and the demand—preferably through universal metering but we have yet to come to those debates.
For the time being, I strongly support the thinking behind Amendment 9. Neither remote nor very remote properties should have to pay more per litre than their urban counterparts. I sincerely hope that the Minister was right, when replying to the previous debate, to say that Ofwat has the power to prevent de-averaging. I sincerely hope that it will use those powers.
Lord Moynihan
My Lords, I have a number of amendments in this group. Briefly, I am very supportive of the way the noble Lord, Lord Whitty, set out the principles and concerns on this. He echoed many of the points made by my noble friend on the previous group of amendments. My amendments focus less on the principles and more on the mechanisms of charging. To limit the amount of your Lordships’ time taken in Committee, I intend to pick that up in the context of Amendment 43, on restricted access, and of Amendments 99, 100 and 102, which fit more neatly into Clause 16 and the charges scheme—which I know my noble friend will address when he reaches his group of amendments, led by Amendment 44. I could discuss them here but I think it would assist the Committee to refer to the charges scheme at that point.
In closing, I urge the Minister to take very seriously the concerns on this issue raised across the Committee. As has been pointed out, he mentioned at the conclusion of the debate on the previous group of amendments that Ofwat has powers it can take to protect customers in this context. The Bill also gives Defra the option to issue charging guidance. Given the importance of this, as Members from all sides of the Committee have highlighted, I hope that due account will be taken of those views and that Defra will give serious consideration to the issuing of charging guidance in this context.
The Earl of Selborne
My Lords, I support this group of amendments and I have put my name to my noble friend Lord Moynihan’s amendments in the group. The noble Lord, Lord Whitty, is absolutely right to recognise that the more you put provisions in the Bill that help the Minister in his resolve to prevent de-averaging the better. It cannot do much harm. As you bring in competition, we see all sorts of snares and pitfalls in the way of Ofwat’s best intentions to prevent simple pricing determining the advantage. If Ofwat cannot do so—and we are still to test to what extent we find that Ofwat is capable of appropriate regulation of those individual contracts—provision such as that in Amendment 9 will clearly be helpful.
The real danger, after all, is that some retail providers could, for example, be providing excellent environmental and social services. They could be rolling out water butts, helping water harvesting and giving advice on water-saving gadgets. Those do not come free; they cost a bit. If they are competing against someone who is providing just a short, sharp service—the product in question at the cheapest price with none of those frills—we will eventually undermine those whom the Bill is intended to encourage, those with innovative practices that will lead to more sustainable use of water. Although I am all in favour of increasing the range of negotiation, we simply cannot allow the only differentiation to be on charges. That is why I think that the amendments are helpful.
Lord De Mauley
My Lords, before I address this group of amendments, perhaps I may answer the noble Lord, Lord Cameron, and my noble friend Lady Parminter, who asked about the truncated period between Committee and Report. I fear that these things are way above my pay grade and are decided through the usual channels. All I can do is apologise to noble Lords for any inconvenience that that may have caused and assure noble Lords that my door remains open. I will be there to answer questions between days in Committee and between Committee and Report; I hope that I can be helpful.
Turning to this group of amendments, I thank noble Lords for some articulate speeches about a complicated issue. It is one that we take very seriously. As noble Lords said in earlier debates, this is not an easy area to get one’s head around. Specifically on de-averaging, when we talk about averaging or de-averaging of costs, we are discussing how best to share the costs of sourcing and disposing of water between customers. Most providers of goods and services average their costs to some extent.
In my view, it makes sense to share the costs of maintaining the network on which all customers rely across all customers, regardless of their location. The network makes up about 90% of a water company’s assets, so when we discuss de-averaging in the context of the Bill, we are talking only about charges in the competitive part of the market, which accounts for about 10% of the companies’ activity. I think that many noble Lords agree that there could be real benefits from increasing the cost-reflectivity of charges for different sources of water to reflect the environmental costs of supply. That is especially important in water-stressed areas or for business users that use large volumes of water.
Strange as it may seem, at present, there are almost no economic incentives for businesses that use large volumes of water to seek out the least environmentally damaging source of water. Nor are there any economic incentives to encourage incumbent water companies or new entrants to the market to help businesses to identify the most environmentally efficient sources of water. The Bill is intended to change that. Our upstream reforms will encourage competition for business customers and incentivise more efficient use of resources. More efficient use of water resources must be good for customers and good for the environment.
I discussed earlier the measures in place to ensure that householders are protected. In regard to de-averaging, as I said in the debate on the previous group, we are clear in our charging principles that de-averaging must occur only where it is in the best interests of customers. In answer to my noble friend Lord Moynihan, when we issue the charging guidance we will make it clear that there must be robust boundaries on the scope of any de-averaging. In particular, Ofwat will be expected to exert control to prevent the de-averaging of network costs and any negative bill impacts that could arise from this. Any moves to enable greater cost reflectivity will be targeted squarely on water resource costs in the competitive parts of the market. This is where there may be social and environmental benefits from encouraging sharper price signals. The Government are completely committed to maintaining bill stability. Customers have made it clear repeatedly that stability is important to them. We will not permit anything that undermines that stability.
The charging rules that Ofwat makes, within the framework set by the Government’s charging guidance, will be flexible. As the situation changes over time, our guidance and the rules that Ofwat sets about charges will be able to respond to the way in which the market evolves. I mentioned earlier that it makes sense to provide a price signal that reflects important decisions about our precious water resources. Using the Bill to ban any kind of price signal would, I suggest, be disproportionate. At the same time, we want to ensure that customer bills remain stable and reasonable. The flexible framework of charging guidance and charging rules will achieve this.
The suggestion was made in the debate that customers could end up paying for stranded assets. This is a regulated sector and the important question of what costs should be borne by customers is one for the regulator. In fact, this point is less about de-averaging than about whether the investment made by incumbent water and sewerage companies is made efficiently and in the interests of customers. No one here, I suggest, would think it right that customers should have to foot the bill for inefficient investment. It must therefore be right that the regulator has the powers to protect customers from paying for inefficient investment.
My noble friend Lord Selborne asked how Ofwat can enforce rules on de-averaging. The charging rules produced by Ofwat will regulate the price relationship between the incumbent and the licensee. It will be able to set out how incumbents apportion the costs of the network and distribution. In making these decisions, it will need to take account of its duties, which include having regard to rural customers. It will also have to reflect the Government’s charging guidance. The Secretary of State can veto Ofwat’s charging rules if they do not reflect the guidance.
Noble Lords asked whether rural customers might lose out. Ofwat will continue to have a statutory duty to have particular regard to rural customers and the charging principles that the Government published recently reinforce the protections that will remain for rural customers. They require Ofwat to ensure that any greater cost reflectivity must provide benefits to customers. No customers should be unfairly disadvantaged by the way that reform impacts on water charges. The noble Lord, Lord Cameron, referred to water being a universal right and I strongly agree. Water companies are under a statutory duty to supply and the Bill will not change that fundamental requirement.
I mentioned earlier that both Professor George Yarrow and Professor Martin Cave confirmed that Ofwat has the tools to regulate the upstream market without any de-averaging. The Bill will impose a legally binding framework for the industry and the regulator regarding their approach to the averaging of prices. This view is supported by competition experts. For these reasons, I hope that the noble Lord will be reassured and be able to withdraw his amendment.
Lord Whitty
My Lords, I thank noble Lords who have spoken in support of this principle. On this occasion, I found the Minister’s reply slightly confusing. I thought that there were some novel parts and a few red herrings in there. He says he is in favour of robust boundaries to de-averaging then claims in aid Professor Cave and Professor Yarrow who say Ofwat have the powers. However, all the amendment asks is that we make those powers explicit and that we require Ofwat not to discriminate on the basis of location. There might be certain areas where they could discriminate but not in relation to location of either source or customer.
If the Minister is saying that that will happen because Ofwat already has all these duties to ensure everybody is treated fairly, including rural and remote consumers and so forth, why not stipulate what they are trying to do in the Bill, rather than through the interaction of several parts of different codes? The noble Lord’s argument about discouraging the use of the least environmentally efficient sources of water was a little unclear. Any individual source of water from a new provider is a very small part of the totality of the incumbent company’s activities. Discouraging environmentally inefficient or damaging sources of water will, and should, be tackled through the abstraction regime well before the Minister introduces upstream competition. The noble Baroness, Lady Parminter, and I have amendments to that effect later on. That is, surely, the direct way to discourage environmentally damaging and inefficient sourcing of water at the top end.
At the other end, the requirement of the noble Lord, Lord Cameron, that water should be universally delivered is not only a matter of delivering it but doing so at approximately the same cost wherever you live. That has happened, under various Acts of Parliament, with water regimes going way back to private and municipal companies, through nationalisation and every stage of privatisation. It would be a pity if this legislation, with all its benefits in improving efficiency at the far end of the water chain, were to move away from that basic principle. The Minister has not yet established that there is a good reason for moving away from that, nor that Ofwat’s existing powers, important though they are, would necessarily deliver that outcome. We shall probably return to this subject at a later point. For the moment, I withdraw the amendment.
Lord De Mauley
“(7A) For the purposes of this section and sections 66AA to 66C—
(a) premises which are outside a water undertaker’s area are to be treated as being within that area if they are supplied with water using the undertaker’s supply system, and(b) any pipes of the water undertaker which are used for the purpose of supplying premises as mentioned in paragraph (a) are to be treated as being part of the undertaker’s supply system (if they would not otherwise be part of it).”
Lord De Mauley
My Lords, I take this opportunity to draw the attention of noble Lords to government Amendments 12, 22, 23, 36, 37, 47, 53, 60, 64 to 73, 75, 77 to 94, 125, 127 to 129 and 147, tabled to Clauses 1 to 21. We have also grouped some linked amendments which appear later in the Bill. These are minor and technical amendments which provide clarity, ensure consistency and correct some drafting errors. I draw your Lordships’ attention to two areas which may be of particular interest.
Amendments 12, 53, 125 and 127 to 129 close a possible loophole that could have prevented some non-household customers from switching. Currently, the ability of a customer to switch is linked to its premises being connected to the supply system of the incumbent water supplier in whose area it is situated. In some instances it is possible for premises to be connected to the neighbouring incumbent water company because it is located nearer to the latter’s infrastructure. Where this is the case, and we do not want to discourage this, there is a risk that it may not be able to switch to a licensee. For that reason, these amendments ensure that these premises are able to secure the benefits of switching supplier.
The other area of interest is in relation to Ofwat’s market codes and in particular those regarding adoption of infrastructure in Clauses 10 and 11. Currently, Ofwat has a power to produce these market codes but, following concerns that water companies are not always consistent on the timing or content of the adoption agreements, we are changing this to a duty on Ofwat. This will help to ensure that development is not delayed by uncertainty around these agreements. I beg to move.
Lord Whitty
My Lords, to be honest I do not intend to challenge any of the Government’s amendments, even those that I understand. However, I would ask one question of the Minister. I had expected to see in this group of amendments, although maybe it will come later on Report, a response one way or the other to paragraph 12 of the report of the Delegated Powers and Regulatory Reform Committee, where the dehybridisation procedure—or the procedure to remove the hybridisation procedure—is adopted. It drew the House’s attention to that and to how it is being dealt with by the Government. If the Minister is saying that it may come up in a general reply to the committee, I am quite satisfied with that, but I thought that I would raise the matter here as it is in this part of the Bill.
Lord De Mauley
I assure noble Lords that we will deal with all the issues raised by the Delegated Powers and Regulatory Reform Committee, and I am sure that we will accept the vast majority. There are some quite complicated issues in there, which we are working through at the moment.
Lord De Mauley
Lord De Mauley
Lord Moynihan
Lord Moynihan
My Lords, in moving the amendment, I shall speak also to Amendments 40, 42, 56, 57 and 59, as well as indicating my support for Amendment 105 from the noble Lord, Lord Whitty, in this group.
The balance between regulation and negotiation in the water industry is crucial to this set of amendments. At the heart of the Bill is the intention to create a market where access is regulated—in other words, the rules of entry are set out very clearly, and must be adhered to by all market participants. I am concerned that in some places the Bill leaves too much too open; it appears to be based on the premise that the parties within the retail market should negotiate between themselves on service and price. In my view, that negotiation could substantially limit the effectiveness of the retail market. Allowing individual parties to negotiate in this way opens the door to current incumbents to discriminate against new retailers by offering them higher prices, less preferable terms or poorer service levels. Alternatively, and perhaps more worryingly, current incumbents could simply be slow in responding to requests for information or services from new entrants; this would be difficult to police.
As the noble Lord, Lord Whitty, suggested, in speaking to Amendment 1, some companies may change their allocations of retail costs to ensure that as little revenue as possible is at risk under the new market arrangements. The result of those changes is to reduce the amount of revenue that is open to competition and, potentially, to reduce the margin available to any new entrant. If allowed to stand, that move by the companies may reduce the level of entry into the new retail market. That would be a very serious issue indeed and, I hope, will not result from this legislation. This is an example of how companies might be expected to react when there is insufficient clarity in how the market will operate.
It is interesting to note the experience and views of the Water Industry Commission for Scotland, which opines that it could be difficult for Ofwat to put a framework in place that will allow the regulator to ensure that there is an effective level playing field for all market participants. It is likely to require relatively draconian rules to be drafted and policed. Notwithstanding those rules, some companies may choose to seek to frustrate the operation of the market or seek to get round the rules or even break them to maximise profit, which could be to the substantial detriment of all customers and, indeed, the environment. Having to negotiate on too many issues could also increase the upfront costs for new entrants, which may deter them from entering the market—or, if the new entrant does enter the market, will increase the costs that have to be passed on to customers. To be effective, a retail market, rather than relying on negotiation, needs all participants to have access to clear and accessible prices and to standard terms and conditions. In regulatory economics, I would describe this kind of access to the market as being regulated rather than negotiated.
In Scotland, the retail market is specifically designed to ensure that there is a level playing field. Scottish Water was required to separate its retail arm on a functional basis but chose to create an arm’s-length subsidiary. This has meant that the required governance code, the document that gives new entrants the confidence that they can compete on their merits with the incumbent retailer, could be less onerous than it would otherwise have been. However, the governance code still requires Business Stream to operate profitably as a standalone entity; the code also requires it to limit the access of Scottish Water’s management to its financial and operational information. Scottish Water is not allowed to know about Business Stream’s strategy for the competitive market in Scotland. Finally, under the terms of a licence condition, Business Stream is required to publish within 40 business days of offering a new tariff to any customer.
The market and operational codes are common to all market participants. The market operator, the Central Market Agency, handles all switches and aggregates supply information to determine amounts owing from retailers to Scottish Water, which is also required to seek the commission’s approval on its wholesale tariffs. All entrants have equal access to all tariffs, even those that are a result of legacy arrangements between Scottish Water or its predecessor organisations and larger businesses. The commission has taken further steps related to the reallocation of supply points from companies that exit the market to ensure that all market participants have the opportunity to compete on a level playing field.
To ensure that new entrants do not face increased barriers and costs when trying to access the retail market, I hope that the Bill can be amended so that it focuses on regulated access rather than negotiation. As such, it would require each wholesale company to publish a wholesale charging scheme; rules that support the level playing field between all market participants to be put in place; and the use of operational and market codes that are available to all participants in each area.
The Government’s response to the Defra Committee’s pre-legislative scrutiny states:
“Preventing discriminatory behaviour is critical to providing a level playing field in which new entrants can be confident that they will be treated fairly by incumbent water companies. However, the Government does not accept that a blanket requirement for incumbent companies to functionally separate their retail functions is the best solution to this”.
In the light of that, Clause 23 would impose a new general duty on Ofwat to exercise its powers and perform its duties in a way that helps to ensure that no undue preference or discrimination is shown by water and sewerage companies, including against water and sewerage supply licensees. As is usual in industry reform legislation, Clause 43 would also give Ofwat a time-limited power to drive changes to existing licences, including to companies’ conditions of appointment, when it considers that those changes are necessary or expedient in consequence of the new statutory provisions. Ofwat has published discussion papers that recognise the important role that such licence conditions play in ensuring a level playing field between existing and new entrant retailers. However, many believe that there is a deficiency in Clause 43 as currently drafted which could be exploited by companies seeking to resist any efforts by Ofwat to make changes to their conditions of appointment—for example, in order to introduce new governance codes.
There are also real risks in leaving such a vital part of a successful market to be developed and possibly challenged through secondary regulation. The burden on Ofwat could be lifted by imposing the non-preference, non-discrimination duty directly on to companies. While general competition law arguably already prohibits such discrimination, enforcing such competition law duties has been shown to be a costly and prolonged process. I am therefore suggesting amendments that, while not requiring functional separation, would make companies’ non-discrimination duties directly enforceable by Ofwat, using its existing powers under Section 18 of the Water Industry Act 1991. This would help reduce the cost of implementing the market reform and policing and of enforcing effective competition in the future.
The aim is competition; the aim is choice. The question is how we engage with a process that is clear and straightforward, while protecting consumers. The hurdle is incumbent companies. Many of them can use complex contracts with significant legal fees attached and delaying mechanisms. It is therefore very important that the aim moves towards regulated access with clarity and less emphasis on bilateral negotiations, and that that regulated access is for everybody. At that point, anyone entering the market can plug in and play. There should be no prohibitions put in place as a result of bilateral negotiation. It is for those reasons that I have tabled the amendments in my name. I beg to move.
Lord Grantchester (Lab)
I shall speak to Amendment 105 in this grouping and agree with many of the comments in its other amendments, in that they resonate with Amendment 105.
The proposed new clause in Amendment 105 is another technical amendment about how this market is to be made to work. We support the introduction of a market to non-household customers, but remain concerned that the market as currently drafted in this Bill is not up to the function as well as it could be. It is essential in a market to have a fair playing field, where each competitor has the same rules applying to it. I quote the Water Industry Commission for Scotland:
“To be effective a retail market needs all participants to have access to clear and accessible prices, clearly defined and common levels of service, and standard terms and conditions. Allowing parties to negotiate could open the door for a current incumbent to discriminate against new retailers by offering them less preferable terms, poorer service levels or simply by being slow to respond to requests. This would limit the effectiveness of the market and increase costs for new entrants (and customers)”.
Incumbent water companies have a very large advantage, having been in place for many years, and can offer more favourable terms to their own in-house companies than to new entrants. There are many barriers to entry that may become apparent and it is important that the new entrant has the protection with the ability to challenge any that may materialise, and not merely on pricing. This would not in any way cut across the Government’s view that a blanket requirement for incumbent companies to separate their operations by function is unnecessary.
The Minister may point out that Clause 23 may do what we are seeking. However, this clause requires Ofwat to secure merely that no undue preference, including for itself, is shown. There does not appear to be a definition of “undue preference” and it is important to show from the outset that all competitive pressures must be fair, and appear to be fair, to the new entrants. The Minister will no doubt point to the market codes that will be issued with the Bill, but evidence that has been provided to us during its passage, such as that from Business Stream, the Scottish water company, suggests that this is not enough.
I hope that the Minister is able to recognise the significance of this amendment that will ensure that the terms offered to existing licences are also offered to new licences and that the regulator is able to pay close attention to such deals. The new market situation in Scotland has highlighted this issue. Without correction, there are grounds to fear that when the market opens in 2017 it will not function as the Minister would hope. As a result fair competition may be impeded, and business will not get the kind of benefits and savings that we would like to see.
The Earl of Selborne
My Lords, I support my noble friend Lord Moynihan and welcome the tenor of the remarks of the noble Lord, Lord Grantchester.
I think that we are agreeing that common industry codes are critical. No one dissents from that. We come back to the question of the extent to which the existing codes, as written in the Bill, deliver these common codes and standards. New entrants simply cannot be allowed to be discriminated against by incumbents. Without a doubt, we have seen this in other utilities—in the rollout of broadband, for example. It is no coincidence that BT seems always to be on the inside track, so we should not be naive enough to think that the incumbent undertakers are not always going to try to ensure that they see off any competition. Later we will talk about discounts and special charges. These do happen. They need to be regulated and, in so far as these amendments help establish the principle that there should be common industry codes, I welcome them.
Lord De Mauley
My Lords, as noble Lords have explained, the purpose of these amendments is to ensure that access to the retail market is regulated to minimise burdens and make access to the market simpler. I agree that requiring all licensees to negotiate with each of the 21 incumbent water companies to enter the market would represent a considerable burden on the market participants and undermine what we are trying to achieve with our reforms.
Schedule 4 of the Water Act 2003 inserted current new Sections 66A(2) and 66D(2) into the Water Industry Act. These placed the incumbent water company under a duty to make a water supply agreement on certain terms agreed with the licensee or determined by Ofwat. This duty has been interpreted to mean that each individual agreement between an incumbent water company and licensee must be negotiated, or imposed by Ofwat where the parties are unable to agree. Ofwat has produced guidance to facilitate negotiations, but the parties to these agreements could ignore the guidance and come to their own agreement. This is clearly a considerable barrier to entry into the retail market in particular and one that provides unco-operative incumbents with an opportunity to delay the making of agreements, about which the noble Lord, Lord Grantchester, and my noble friend Lord Selborne have rightly expressed concerns.
New Sections 66A and 66D will be repealed by this Bill, and replaced with a requirement that agreements between incumbent water companies and licensees must be in accordance with new, enforceable charging rules and codes produced by Ofwat. This will reduce burdens and costs on all parties, and speed up customer switching when the market expands to include 1.2 million potential customers. Schedule 4 creates the same requirements for sewerage arrangements.
There has been some confusion as to the wording of some parts of Schedules 2 and 4 that might lead some to assume that a licensee will be able to enter the retail market only through a complex series of negotiations with every incumbent water company in England. For example, new Section 66DA states that codes may include provisions about procedures in connection with making a Section 66D agreement. This is not the case. We need some flexibility about allowing a certain level of negotiation in some cases, particularly for the upstream markets; negotiations might address water quality and environmental conditions specific to a locality in a water company’s area. We also want licensees to have some flexibility to negotiate innovative new ways of doing things. Market codes will be able to set out the circumstances when such negotiations would be appropriate or inappropriate. I draw noble Lords’ attention to new Section 66DA(2)(c) and (d) and new Section 117F(2)(c) and (d).
My noble friend Lord Moynihan referred to functional separation and we will discuss specific amendments on that matter in a little while, and perhaps I can address that at that point. He also referred to the regime in Scotland and the fact that it provides only for regulated access. Scottish legislation is silent on the need for WICS to produce codes to make the market work. WICS took the decision to regulate access to the retail market and Ofwat and the Open Water programme are taking the same approach. It is worth noting that there is no competition in Scotland for wholesale supplies of water. The two markets are therefore clearly not directly comparable.
I am happy to tell my noble friend that paragraph 5 of Schedule 2, which inserts new Section 66E into the Water Industry Act 1991, and new Section 117L, inserted by Schedule 4, already provide Ofwat with powers to regulate these charges between incumbents and licensees, and that Ofwat may make rules about their publication.
The Bill regulates licensees’ access to the supply and sewerage systems of the quasi-monopolistic incumbents only. We see no need to regulate arrangements between licensees themselves, as they all start on the same footing. That is competition and it will be left to market forces. I hope that my noble friend will therefore feel able to withdraw the amendment.
Lord Moynihan
My Lords, I am grateful to noble Lords for participating in this exchange of views. I particularly thank my noble friend Lord Selborne for his apposite comments. As he is aware, the Bill anticipates a relatively large number of codes. The experience of other industries, such as the electricity industry, shows the importance of keeping codes as simple as possible. For example, a single market code could help ensure that any central market system works by applying the same rules to all companies and retailers. Similarly, to help create a level playing field, I very much hope that retailers have a single point of contact with each water or sewerage company. Each company should have a code which every retailer must follow. To me that is an essential prerequisite for operating a successful market.
It is an appropriate moment to echo the comments that have been made on all sides of the House about how constructive, supportive and helpful my noble friend the Minister has been throughout the process since the publication of the Bill, through its early consideration and in the many meetings that he has hosted to provide clarity on this complex measure. I am grateful to him for his comments. I noted that he recognised that there was at least scope for misunderstanding on some aspects of the clauses that are relevant to the amendments that I have proposed. I agree with what he said about the codes which Ofwat may issue under the new Sections 66DA and 117F. They could be used but I am concerned that the current drafting does not adequately recognise the necessary scope that he has outlined. There will be merit in considering in detail what he has said this evening and reflecting on it before determining whether we revisit this subject at a later stage in our proceedings.
I very much appreciate the support of the noble Lord, Lord Grantchester. His comments echoed very clearly the concerns that I have tried to lay before your Lordships’ House. This is an important issue. If the Bill is to be enacted and then operate effectively in the market, this is a subject which needs to be absolutely clear. If we can help to improve the position by amending the legislation in order to achieve that clarity and efficiency of operation, we will add value to the Bill. I hope that we will be able to take this away and review whether or not we will come back with an improved amendment at a later stage of our proceedings. In the mean time, I beg leave to withdraw the amendment.
The Earl of Selborne
“(e) principles for determining the provisions that should or should not be incorporated into arrangements of the sort contemplated in paragraphs 5 and 8 of Schedule 2A together with a procedure for making and modifying such arrangements”
The Earl of Selborne
My Lords, in moving Amendment 41, I wish to speak also to Amendments 46, 58, 63 and 114.
We now come to Ofwat’s duties. Amendments 41, 46, 58 and 63 all seek to ensure that Ofwat does, indeed, have the powers and the authority under the Bill to deal with some of the issues we have already addressed. Amendment 114, which I will come to, seeks to ensure that no detriment is caused.
Amendment 41 seeks to amend Schedule 2 to the Bill by adding to the four subjects on which Ofwat may issue codes in regard to Section 66D agreements. I remind the Committee that the four provisions in the Bill allow a code to make provision about,
“procedures in connection with making a section 66D agreement … procedures in connection with varying or terminating a section 66D agreement … the terms and conditions of a section 66D agreement, including terms as to the duration of such an agreement … principles for determining the terms and conditions that should or should not be incorporated into a section 66D agreement”.
Thus the Bill sets out Ofwat’s responsibilities vis-à-vis these Section 66D agreements. Amendment 41 proposes a fifth subject for which a code should make provision and refers to the,
“principles for determining the provisions that should or should not be”,
in the Section 66D agreements.
Amendment 46 relates to the rules under new Section 66E on the reduction of charges payable under a Section 66D agreement. The amendment seeks to add the proviso that the case for reduced charges must be based on reduced costs—therefore, discounts would be allowed only where overall costs are reduced. In other words, the amendment seeks to keep the level playing field we have discussed on earlier amendments. Amendments 58 and 63 seek to introduce the same provisions for sewerage undertakers.
The thrust of these amendments is to ensure that Ofwat is under a clear obligation to set charging rules in a way that helps to incentivise water efficiency and the efficiency of other services of environmental, social and economic benefit. It is essential that Ofwat has sufficient powers to prevent discrimination against new entrants by incumbents offering them less profitable terms, poorer service levels or simply being slow to respond to their requests. There are many and insidious ways in which you can see off competition and Ofwat must have the powers to enable it to regulate and monitor these special agreements very carefully. I am confident that the Minister will say that this is already adequately covered in the Bill. However, in so far as these amendments would further strengthen the legislation and Ofwat’s hand—we have all agreed throughout our deliberations this afternoon that Ofwat is the key to this—surely they would be helpful in preventing any such discrimination.
Amendment 114 is the so-called no-detriment amendment. It seeks to put on Ofwat a specific duty to ensure that no detriment is caused to wholesale business as a result of retail activities. The amendment ensures that the wholesaler, for example, has no incentive to discriminate unfairly in favour of retailers who are less active in providing environmentally desirable services. I referred to that in an earlier amendment. We can see that if a retailer is actually managing to reduce the demand for water it might no longer necessarily be to the wholesaler’s advantage to give that particular retailer the same sort of service as somebody who was less assiduous in selling such services.
The no-detriment provision ensures that the wholesaler is indifferent to the efforts of retailers to improve water efficiency or provide other value-adding environmental services. The operation codes will go some way to setting out the rules of engagement between wholesalers and all retailers. The no-detriment provision will give added protection as it will remove all incentive to discriminate. Extending the duty of non-discrimination to Ofwat, which I accept is already there under the terms of the Bill, will ensure that no undue preference or discrimination takes place. It should help to establish that Ofwat indeed has all the duties that we would require to facilitate competition directly. I beg to move.
Lord Whitty
My Lords, my name is also on the amendment to which the noble Earl, Lord Selborne, has just referred. My reason for putting my name to it was very much the point he was underlining. Only by some form of no-detriment clause—some of the amendments go slightly wider—can we protect what is intended to be an outcome of retail competition, which is more focus on energy and environmental improvements at the retail-user end and final delivery. Historically, Ofwat has not been particularly good at being prepared to finance—if that is the word—through the price review, or to give priority in the price review to water efficiency schemes. I think that Ofwat improved a little in the previous price review and it shows intention to do so again in the next one, but the reality is that we have not done very well on that front. The introduction of upstream and, to some extent, retail competition could, if it is not contained, have an effect on improvements in water efficiency at the retail end, and the positive move by Ofwat in recent years to focus on water efficiency could be reversed. I strongly support what the noble Earl, Lord Selborne, has said on the amendment.
Lord De Mauley
My Lords, perhaps I may start by saying that our approach to retail competition is being developed jointly with the industry, along with the England and Scottish regulators, and others. This group is well placed to identify the conditions that will work best in England, capturing any lessons learnt and building on the Scottish experience.
I am not sure how a no-detriment duty would sit alongside the general duty for the Secretary of State and Ofwat to secure that licensees meet their statutory obligations and the conditions of their licences, given that these are set by the existing duties on Ofwat and Ministers. Ofwat is under a general duty to ensure that incumbents are able to finance their statutory functions. This duty enables Ofwat to create the right incentives to ensure that incumbents can benefit from investments that deliver improved water efficiency in their respective areas. It is suggested that incumbents may show preference to licensees that do not concentrate on water efficiency activities. This is addressed through Clause 23, which requires Ofwat to ensure that incumbent water companies do not discriminate in the provision of services. Ofwat is also able to address such issues through its Competition Act power, which incidentally is a power that WICS does not have in Scotland. In England and Wales, both incumbents and licensees are subject to a duty under the Water Industry Act 1991 to help their respective customers conserve water. I would not want to undermine the market for water efficiency services. I am sure that that was not an intended impact of the amendment.
Curbing the licensees’ water efficiency activities could also put them at a competitive disadvantage if a similar duty was not placed on the retail side of the incumbent’s business. Why should licensees be kept under a duty which potentially curbs their water efficiency activities, while an incumbent’s retail business is allowed to operate without this barrier? Amendments 46 and 53, in particular, may be a barrier to licensees working with customers to become more water-efficient because they impose a condition that any new arrangements designed to reduce pressure on networks must not impose any more costs on incumbent water companies. This same requirement is not being placed on the incumbents’ retail businesses through these amendments. A no-detriment clause works in Scotland due to its circumstances, having just one incumbent retailer and wholesaler. It simply will not work in the same way in England and Wales. For that reason, I ask my noble friend to withdraw his amendment.
The Earl of Selborne
My Lords, I shall come to the no-detriment clause in a moment. The earlier four amendments deal with strengthening the codes for Ofwat, and I am fairly confident that the more robust the powers that Ofwat has to prevent discrimination the better.
I simply do not understand why, if the no-detriment clause works in Scotland, where there is one undertaker—one company—it would not work if there is more than one. I think that the case becomes stronger, not weaker. However, I will read with some care what the Minister said because I suspect that the whole area of a no-detriment clause is something that we will want to come back to at a later stage. I beg leave to withdraw the amendment.
The Earl of Selborne
The Earl of Selborne
My Lords, we now come to special charges, which I have to admit were a bit of a mystery to me. I did not even realise that they existed. Clause 33(2) on page 81 of the Bill amends Section 142 of the Water Industry Act 1999 so that there is a duty on incumbents to notify Ofwat if they make an individual charging agreement with a customer that is not covered by a charging scheme. In other words, they are special agreements. Ofwat already requires information provided by incumbents about those special charging agreements.
Special charging agreements have the potential to undermine just about everything we have been talking about. Once there is a special agreement, which by its nature is not a common agreement, it flies in the face of the excellent provisions in the Bill, not least to ensure that there is a level playing field and transparency. We need to establish just how many such special agreements are in place at the moment. Amendment 106 does that. It would amend Schedule 2 to require Ofwat to review existing special agreements and assess the charges payable under these agreements. The purpose of the amendment is to ensure that such agreements that depart from the charging schemes are appropriately regulated in future. I would have thought that that was pretty uncontroversial, and I hope that the Minister agrees.
Amendment 103 requires any future special agreement to be allowed only if a customer has done, or has agreed to do, something that reduces or increases the costs incurred by an undertaker. Such agreement would have to receive the consent of Ofwat. In other words, there cannot be a deal that is specific to that particular customer. We would lose the averaging principle that we hold so dear. New Section 66E(3) is the basis on which Ofwat establishes these special charges. I am keen to ensure that Ofwat first makes it absolutely clear how many special charges exist at the moment and, above all, does not allow any future special charges, unless there is a reason that is transparent, obvious and does not undermine the averaging principle. I beg to move.
Lord De Mauley
My Lords, my noble friend would introduce changes to the way in which incumbent water companies’ special charging arrangements for customers operate in the reformed market. Special charging arrangements come about when incumbent water companies depart from published charges schemes to allow discounts on the wholesale element of a water charge where a customer, for example, agrees to do something to reduce pressure on a network or has made a contribution to a capital project carried out by an incumbent.
Amendment 103 would require Ofwat to approve special charging arrangements for licensees before they are put in place. Amendments 44 and 48 remove powers for Ofwat to introduce charging rules under Schedules 2 and 4 that would allow customers who receive discounts to switch to a licensee without losing those discounts. Amendments 106, 131, 166 and 169 will initially require incumbents, within one month of Royal Assent, to notify Ofwat of all existing special charging arrangements that are in place. However, Ofwat already collects and publishes information on special charging arrangements on an annual basis, which means that it is not necessary for the Bill to be changed for Ofwat to obtain details of historical agreements. The amendments would also require Ofwat to make and publish a determination about the appropriateness of these historical charges, publish details of its determination, and control the charges between the incumbent and the licensee as well as the price that the licensee can charge the customer from then on.
As part of the review of price limits for 2015 to 2020, Ofwat requires incumbent water companies to separate out the retail and wholesale components of the charges. Ofwat will be able to assess the appropriateness of such charges during this process and introduce charging rules under Schedules 2 and 4 to ensure that licensees will be able to access wholesale charges at a competitive rate and compete with incumbents on the retail element of the special charges. For example, rules can ensure that costs are properly allocated between the retail and wholesale elements of the special charge. Ministers will also be able to give their views on the content of charging rules.
Importantly, the change introduced by Clause 33 will place incumbents under an enforceable duty to report new special charging arrangements to Ofwat as soon as they are made. Clause 33 comes into force two months after Royal Assent. This provision also requires Ofwat to publish details of these arrangements in its register, which is available on its website. Taken together, Clause 33 and Schedules 2 and 4 deliver most of what my noble friend wants to achieve through his amendments. Like my noble friend, we want to increase transparency around the setting of new special charges to enable the beneficiaries to be able to switch to a licensee and still retain their discounts on wholesale charges, if appropriate. As part of the price review process for April 2015, when new price limits are introduced, Ofwat will be able to assess the appropriateness of existing special charges ahead of the retail market opening. With these assurances, I hope that my noble friend will feel able to withdraw his amendment.
The Earl of Selborne
My Lords, I draw some comfort from my noble friend’s response. I think we all agree that special charges represent a potential Trojan horse and are not to be encouraged. In so far as they can be transparent, reduced or even eliminated, that would surely be helpful. I should like to think that Ofwat would trenchantly make it clear that it is not in favour of special agreements, and that any special agreements would be published in a transparent and open way annually, as I understand the Minister says Ofwat does and will do. Above all, Ofwat should make it clear to the industry that it does not expect special agreements to be common practice, and should be countenanced only under exceptional circumstances. With that assurance from the Minister, I am happy to beg leave to withdraw the amendment.
Lord De Mauley
(a) a retail authorisation (whether that retail authorisation is an authorisation of the licensee requesting the introduction of water or another water supply licensee’s authorisation), or(b) a restricted retail authorisation of the licensee requesting the introduction of water.””
Lord Whitty
“Separation of retail and wholesale activities
Any company granted a water supply licence under section 17A of the Water Industry Act 1991, prior to the passing of this Act, must establish separate legal identities for its—(a) retail activities, and(b) wholesale activities,within one year of the passing of this Act.”
Lord Whitty
My Lords, I shall speak also to Amendment 97. I am asking the Committee to consider a rather more radical approach to the structure of this industry. In earlier debates today, there was reference to unravelling some of the accounting structures of companies. Indeed, the Minister referred to the requirement on separate indication of charging by the retail and wholesale ends. We have to remember what was said by several of us at Second Reading. This is a very odd industry. In England, it consists, effectively, of eight regional monopolies, all of which are totally vertically integrated, with high profitability over the years since privatisation. There has also been high investment but there has nevertheless been high profitability for their owners and high dividends have been paid out. There has also been a high level of gearing in order to meet those investments by going to the money markets. Most of them are now owned by international investment funds although in many cases they have had a sequence of owners. However, they retain a close resemblance to the pre-privatisation water authorities.
Over the years, there has been some degree of breaking up of monopolies in other industries, including vertical splits, to encourage a more effective form of competition. The recent report by Martin Cave and Ofwat’s own assessment of the situation give rise to suggestions that Ofwat, too, ought to be able to require separation of the wholesale and retail ends of the currently vertically integrated water companies. When we move to retail competition, its major feature is likely to be that the retail arms of other incumbent companies will begin to compete in the areas that are dominated by the historic incumbent companies. To some extent, that has happened in Scotland, where English-based companies provide some of the competition in the non-domestic retail sector.
We would expect those companies to continue, one way or another, to dominate the scene, even if they are in more direct competition with each other. As other noble Lords have said, that means that we have to separate out how those companies operate on the retail side and consider what the relationship between the wholesale water undertaker operation and the retail operation will be. One can do some of that by ring-fencing, separate accounting, Chinese walling or whatever, but we need to consider separation as legal entities or even disinvestment from one company to another. That option is not available to Ofwat or, indeed, the CMA, whatever the performance of companies, the competitive flaws of the market or the outcome for consumers may be. This argument about where to separate quasi-monopolies has applied. We have had many debates over recent years about banking, we have had the situation of the railways and the issue arose at some length during the debates on the Energy Bill. It is horses for courses, but the fact that there is no power to require this, even in a situation which is still pretty well dominated by regional monopolies, seems to be an omission.
There are reasons why Ofwat and successive Governments have not gone down this road, one of the main ones being that it might well frighten off investment. This is a pretty good investment. It has provided a very substantial return to those people who have invested in the English water industry over the past 20 or so years. They have had a pretty good and reliable return. Over the past two price review periods some would say that, particularly because of the over-allowance by Ofwat for the costs of capital, they have had an exceptionally good return on prices which have been designated by the regulator. That is not to say that a change in the circumstances would not cause some hesitation on the part of investors, but the reality is that on whatever basis we operate it will continue to provide a good, safe, consistent return to international investors. For that reason we should discount some of the scare stories that surround the issue of enforced separation.
These two proposals give the Government an option. Amendment 49 would give Ofwat, and by extension the CMA in certain circumstances, the power to mandate separation either for one company, or, following a market review, for all companies operating in that sector. That is a pretty substantial increase in their powers, although it is not very different from what the CMA can do in most markets if it finds that there is a breach of general competition law. The rather softer alternative which I think the Government might well consider more is Amendment 97. That would allow for voluntary separation in certain circumstances or negotiated separation if Ofwat were to intervene in order to enforce better competition and better performance.
Amendment 97 therefore is a minimalist form of separation. Amendment 49 is more draconian. The Minister can probably guess which I should prefer, but in this context I would be happy to see the Government take up either. At some point down the line, the current structure of the water sector is going to have to be challenged more fundamentally than is done by the Bill. If we were to give the contingency power to Ofwat now, or make it easier for the companies themselves or for Ofwat to negotiate and suggest to companies that they should split, that would give us the ability to reshape the industry following the introduction of retail competition even to the degree provided for in the Bill.
I suspect that the Government are going to be deeply resistant to either option, but they are wrong. The structure of the industry is not one which can be sustained for very much longer. It is one that requires significant investment and we do not want to frighten the investors. On the other hand, we have to face up to the reality that proper competition, meeting both business and household consumer needs plus the very substantial environmental demands on the industry, may well require a more radical solution to the structure of the industry than is envisaged in this reform.
I hope that the Government will at least take this matter seriously. Giving Ofwat some powers in this area would be a significant move forward. I beg to move.
Lord De Mauley
My Lords, I am grateful to the noble Lord, Lord Whitty, for tabling Amendments 49 and 97, which are about an important subject, that of separation, whether legal or functional. Legal separation is what Amendment 49 deals with. The amendment would require the eight licensed water suppliers currently operating under the existing water supply licensing regime—so not the incumbent water companies—to set up legally separated entities for the retail and wholesale parts of their business. It is unnecessary to require these licensees to undergo legal separation. In the current market, such licensees can already choose to offer retail services only. In fact all of them do. In the new market, licensees will be able to offer both retail and upstream services separately.
As drafted, this amendment would not require the legal separation of incumbent water companies, but I understand that that is the intention behind it. Legal separation of the incumbent water companies is usually perceived as a way of preventing them from discriminating against new licensees entering the market in favour of their own retail businesses. This discrimination could be either through the prices they charge or by other non-price forms of anti-competitive behaviour. However, legal separation would not eliminate the risk of discrimination in competitive markets, nor is it the only way to deal with discrimination. Ofwat has a range of tools it could use, for example by making licence changes to govern the relationship between the retail and wholesale parts of the companies. These could go as far as requiring effective functional separation. The Bill also gives Ofwat stronger powers to ensure that it can take action to tackle discrimination and ensure a level playing field for all market participants.
The water White Paper made it clear that we would not drive fundamental structural change to the industry, such as forcing the legal separation of incumbent water companies. We were persuaded by the arguments of water companies and investors in the sector that doing so would reduce the regulatory stability of the sector and put future investment at risk, something to which the noble Lord, Lord Whitty, referred. We must not take risks with a successful model given the challenges we face in building the resilience of the sector and the importance of keeping customer bills affordable.
The Government expect Ofwat and other competition authorities to take firm action to prevent discriminatory pricing or behaviour. This could include requiring undertakings from market participants to address anti-competitive behaviour, for example by introducing functional separation. Furthermore, under Clause 23, the Government have also introduced a duty on the Secretary of State, Welsh Ministers and Ofwat to ensure that incumbent water companies do not exercise undue preference to their own retail businesses, associated licensees or other incumbent water companies on non-price matters. Ofwat therefore has sufficient powers to reduce discriminatory behaviour without there being legal separation of incumbent water companies.
As the noble Lord, Lord Whitty, explained, Amendment 97 would enable licensed water suppliers to choose to specialise in either retail or wholesale services. Clause 1 and Schedule 1 to the Bill already enable this by removing the requirements in existing legislation for suppliers of upstream services also to provide retail services. This amendment is therefore unnecessary to achieve the objective the noble Lord seeks.
Forcing separation would not simply be about costs to investors, it would impact on costs to customers. If the sector becomes less attractive, the cost of capital increases, and increases of as little as 1% can lead to £20 on a bill. We must remember the need to ensure that bills remain affordable. I therefore ask the noble Lord to withdraw his amendment.
Lord Whitty
My Lords, clearly I am going to withdraw my amendment because the noble Lord indicated in his opening paragraphs that it is in the wrong place to achieve what I thought it might achieve. However, the subject is worthy of further consideration. It is true that Ofwat has a power of functional separation in Schedule 1 but it is only one way round. The amendment would provide for it to be both ways round. It would give some flexibility to Ofwat, but only on functional separation.
On ownership separation, this is such an odd market that at some point some Government will have to consider this. The proposed clause, as drafted and as intended, did not say that we would do it, but it would give Ofwat reserve powers to do it in relation to either one company which was engaged in anti-competitive behaviour—which is wider than simply the relationship between its own wholesale and retail internal pricing system—or across the board.
The power exists and is used by both the European and British competition authorities in almost every other sector—we have required breweries to give up their pubs and banks to give up their retail branches—but water is more protected because it has a sector-specific structure of regulation which has built up, for understandable reasons, from the old nationalised structure into a regionally based oligopoly. It has attracted a serious amount of investment, but at a cost. Part of the cost is inflexible and the Bill seeks to introduce a greater degree of flexibility. I accept that, but, ultimately, you would not necessarily want the structure for all time.
Therefore, although I do not advocate wholesale intervention at this point, Ofwat, as the sector-specific competition authority, needs stronger powers than it currently has. My proposed new clause clearly would not give it those powers, and even if it did the Minister would not accept it. We have a problem with the nature of the industry. It has had some fairly bad publicity recently in terms of its levels of profitability, its method of gearing and the way that it treats its customers. There is considerable room for improvement. One potential stick for that would be to give Ofwat wider powers. Indeed, a future White Paper may well address this issue more radically than we are doing today. In the mean time, I shall withdraw my amendment.
Lord De Mauley
“(4A) For the purposes of this section and sections 117B and 117C—
(a) premises which are outside a sewerage undertaker’s area are to be treated as being within that area if they are provided with sewerage services using the undertaker’s sewerage system, and(b) any sewers or drains of the sewerage undertaker which are used for the purpose of serving premises as mentioned in paragraph (a) are to be treated as being part of the undertaker’s sewerage system (if they would not otherwise be part of it).”
Lord De Mauley
Lord De Mauley
Lord De Mauley
“2A In section 2B (strategic priorities and objectives: Wales) (as inserted by section 24 and amended by Schedule 7), in subsection (4)(d), after “water supply licensees” there is inserted “and sewerage licensees”.”
“(1A) Subsection (1A) is repealed.”
“26 In section 52 (the domestic supply duty) (as amended by Schedule 7), in subsection (4A)—
(a) after paragraph (a) there is inserted “and”;(b) paragraph (c) and the “and” preceding it are repealed.”
Lord De Mauley
“( ) In this section and sections 40A to 40I “bulk supply agreement” means an agreement with one or more water undertakers for the supply of water in bulk and includes—
(a) an order under subsection (3) which is deemed to be an agreement by virtue of subsection (5), and(b) any agreement which has been varied by order under section 40A(1).”
Baroness Parminter
“( ) In relation to any agreement for the supply of water in bulk between a water undertaker and a qualifying person—
(a) the Authority and any party to an agreement shall at any time if so requested provide such information as the Environment Agency or NRBW may require in relation to the volume and source of any water to be abstracted or supplied and the timing of such abstraction or supply under the agreement; (b) the Environment Agency or NRBW may at any time certify to the Authority that it is necessary or expedient for the purpose of—to vary or terminate an agreement, the Authority must seek a variation or termination of that agreement;(i) conserving, redistributing or otherwise augmenting water resources in England and Wales;(ii) securing the proper use of water resources in England and Wales; and(iii) securing the conservation of flora and fauna which are dependent on an aquatic environment;to vary or terminate an agreement, the Authority must seek a variation or termination of that agreement;(c) if the Authority is satisfied that the variation or termination cannot be achieved by agreement between the parties within a reasonable time it must by order vary or terminate that agreement accordingly.”
Baroness Parminter
My Lords, I shall speak also to Amendment 76. The amendments seek to give the strongest safeguards to the bulk transfer of water in advance of—and, indeed, in the absence of—reform proposals for the water abstraction regime, which we will discuss in subsequent amendments.
The Bill incentivises existing licence holders to sell their water to water companies even when the catchment is over-abstracted. It is welcome that the Commons amended the Bill to require applicants for new water supply licences to consult with the Environment Agency as well as with Ofwat. It is on the existing licences being traded as a result of the reforms making it easier for bulk transfers that I wish to focus with these amendments.
Clearly water companies have responsibilities about deterioration outlined in the water framework directive but, as the head of water resources at the Environment Agency said in evidence to the House of Commons, Clause 12 could even force bulk transfers of water between existing participants that could affect the use of abstraction licences.
To protect the scarce resources, the Environment Agency and NRBW need the strongest role at the beginning of the trading process. At present the Environment Agency can only intervene once damage has occurred. That is too late, and especially so for the controls that we are proposing for a new market. In the Commons, the Government gave statutory consultee roles to both the Environment Agency and NRBW when Ofwat makes an order for bulk supplies. My amendment would give those bodies the right to compel Ofwat to intervene in or terminate a bulk supply agreement which it deems would cause unsustainable abstraction.
The issue is whether the statutory consultee role for the Environment Agency and NRBW when Ofwat makes an order regarding a bulk supply agreement means that Ofwat has to act on what these bodies say, or whether it is just advice or input on whether the supply is necessary or expedient which Ofwat can choose to ignore. Surely we need the Environment Agency and NRBW to be able to require Ofwat to intervene to vary or terminate a bulk supply agreement before unsustainable abstraction takes place. That is what both these amendments seek to achieve. I beg to move.
Lord Crickhowell
My Lords, we come now to one of those probing amendments which, as I said earlier, I have refrained from tabling partly because I found the Bill so complex that I was not sure I was going to get it in the right place. I am not sure that the noble Baroness has got it in the right place, because here we are debating, I thought, Clause 8, and she has referred specifically and entirely to Clause 12. I can understand why the amendment she tabled was appropriate for Clause 12; I am not entirely sure it is right for Clause 8. However, it enables me to address some of the points about which I expressed concern at Second Reading.
Once again, I thank my noble friend Lord De Mauley for the extraordinarily thorough way in which he has dealt with anxieties expressed during the preparation and passage of the Bill. He wrote me a long letter even before Second Reading because I had raised the issues during one of his briefing meetings. He wrote me another letter after I had raised the issues again at Second Reading. This is the only part of the Bill that I had serious anxieties about. I think that these anxieties are almost certainly unfounded. My noble friend’s letter prompted me to pull down from the shelves of the Library the Water Resources Act 1991, which I suppose I should have known by heart from the days when I was chairman of the National Rivers Authority. That Act gives the authority the powers that are needed in this respect.
My noble friend also drew my attention to the debates in the Public Bill Committee in the other place, to which I think the noble Baroness referred. During those sessions, Trevor Bishop, head of water resources at the Environment Agency, was questioned on this issue. He was asked about the powers that the Environment Agency has and its relationship with Ofwat. Ofwat is required under the Bill as it is drafted to consult with the Environment Agency. Mr Bishop said:
“We operate a series of tests regarding an application for a licence. First, is there proof of legitimate need? If people apply for a licence on a speculative basis, they are locking up resources that could be used for economic growth or other aspects, so that is quite important. Is it efficient, in terms of the efficient and proper use of water, which is part of our duties under the Water Resources Act 1991? Would it have a negative effect on any other abstractor and is it sustainable with regard to environmental duties? Those are the three principal tests and we would object if it failed one of those”.
Then he was asked whether the Environment Agency would have the right to veto any current extraction licences. He said:
“We grant licences, so we have the power to grant or not grant licences subject to those tests. Ofwat is not looking for the power to grant licences; what Ofwat may do, with upstream competition and also, I think, with clause 12, is encourage or even force bulk transfers of water between participants, and that could affect the use of an abstraction licence. If it does so, we would need to be consulted, because a change of use in an abstraction licence could cause a problem for another abstractor downstream by using more water, or it could actually affect the water framework directive. It is important that we are able to protect against deterioration”.—[Official Report, Commons, Water Bill Committee, 3/12/13; col. 57.]
What I think the Environment Agency is saying is that, yes, it has to be consulted. It is not Ofwat which issues the extraction licences, it is the Environment Agency. Ofwat is obliged to consult the Environment Agency. I suspect the Minister may also refer to the role of the Secretary of State in giving guidance on the Bill. If there are any doubts about what the respective duties are, I suspect they could be covered in that way.
Partly as a result of the diligence of my noble friend on the Front Bench in trying to foresee all the difficulties I might raise in Committee, I have got to the point where I am almost entirely satisfied that the safeguards are there. However, I will listen carefully to what is said further in this debate. It may be that on later amendments I will have to keep my ears open, but, broadly speaking, I am satisfied. The only additional point on which I should keep my powder dry is the introduction later of the new abstraction licensing regime, and whether that will raise any issues that are not adequately covered here. We will come to that in later amendments anyway. For the time being, I am largely satisfied.
Lord Whitty
My Lords, I can accept quite a bit of what the noble Lord, Lord Crickhowell, has just said, but it does not deal with the totality of the noble Baroness’s amendment, which I broadly support. Amendment 74 deals with bulk transfers which may well be within the context of an existing abstraction licence—it is only change of use if it is used for some other purpose. The Environment Agency does not have a licence control except in terms of change of use. It is an Ofwat responsibility, in increasing upstream competition, to arrange for these bulk transfers. It is complicated but it seems to me that if there is a serious environmental problem, the Environment Agency and its Welsh counterpart need some powers over and above consultation—which already exists—to stop those transfers taking place. I think that is really where the noble Baroness’s amendment is aimed.
The consultation rights already exist and the noble Lord, Lord Crickhowell, has spelt this out. In most cases, under the previous regime, Ofwat and the Environment Agency have certainly in recent years reached an amicable agreement. However, there is the possibility of a clash under the new regime, and in those circumstances the noble Baroness’s Amendment 74 would be appropriate.
Lord Crickhowell
I am grateful to the noble Lord. I do not have the papers immediately to hand but I have it in mind that if there is a change of use, that prompts Ofwat to have to consult the Environment Agency. I may be wrong on that and no doubt my noble friend will be able to deal with it.
Lord Whitty
If there is a change of use—for example, if you are a landowner with an extraction licence who now, under the new regime, wants to put it into the water system—then the Environment Agency has to give a change of use certificate, and will judge that in the same way as if it was a new extraction licence. So that control is there. However, if it is simply a bulk transfer within existing use and with existing abstractors, then that break is not there. I think I am right in saying that.
Baroness Northover
My Lords, I thank my noble friend Lady Parminter for tabling these amendments. Clause 8 plays an important role in achieving a more resilient water industry by encouraging the bulk transfers of water, or bulk supply agreements, between incumbent water companies and between incumbent water companies and inset appointees. We recognise my noble friend’s concern that an increase in bulk supply agreements might lead to unsustainable abstraction, particularly in advance of broader reform of the abstraction regime. We are therefore grateful for the opportunity to explore these issues in further detail today.
We would like to assure the Committee that we are serious about reforming the current abstraction system so that it is fit to face future challenges, and noble Lords are quite right to focus on this point. We are committed to putting in place an effective system that better reflects available water resources and we published our proposals for consultation in December. My noble friend Lord De Mauley will talk about our approach to abstraction reform in more detail shortly, as my noble friend Lady Parminter noted; as my noble friend Lord Crickhowell noted, Clause 12 may also appear to be relevant here.
I shall focus on Clause 8, which introduces new provisions to regulate more effectively bulk water supply agreements by introducing codes and charging rules that will govern these agreements. By enabling incumbent water companies to use water resources more flexibly and efficiently, increased water trading can both build resilience and increase the sustainable use of water resources. It can be particularly useful for water stressed areas and in times of drought. My noble friend Lady Parminter is right that we need to avoid any damage from unsustainable abstraction happening in the first place. Tackling damage after it has occurred can be a slow, difficult and expensive process. We therefore want to ensure that adequate safeguards are in place in introducing this reform to the bulk supply regime. We believe that these safeguards are already in place.
The Environment Agency and Natural Resources Wales are the regulators responsible for protecting and improving the environment and they will continue to control the impacts of abstraction through abstraction licensing. As my noble friend Lady Parminter noted, it has been agreed that Ofwat must consult the appropriate environmental body before ordering, varying or terminating a bulk supply agreement. However, I note her current disquiet at this. My noble friend Lord Crickhowell was more encouraged by the arrangement and is, as he put it, almost entirely satisfied by the correspondence from my noble friend Lord De Mauley, and I trust that my noble friend Lady Parminter has also seen this correspondence. If she has not, we will make sure that she receives it. I note also that the noble Lord, Lord Whitty, is less reassured, and I am sure that this issue will be considered further in the later group, as I have indicated. We all share the concern to ensure that we have a resilient system which does not cause damage.
I remind noble Lords that water companies have statutory environmental duties as well, including a duty under Regulation 17 of the Water Environment (Water Framework Directive) (England and Wales) Regulations 2003 to have regard to river basin management plans when deciding whether to enter into bulk supply arrangements. River basin management plans set out the environmental objectives for the water bodies within a river basin district and how they will be achieved. Each water company also has a duty under Section 37A of the Water Industry Act 1991 to produce a water resource management plan every five years that sets out how it aims to balance demand and supply over the next 25 years.
As I say, my noble friend Lord De Mauley will be addressing abstraction in greater detail in the next group, and in the mean time, I hope that my noble friend will be content to withdraw her amendment.
Baroness Parminter
I thank the Minister for her comments and I thank my noble friend Lord Crickhowell and the noble Lord, Lord Whitty, for their contributions in exploring this debate. It has become clear that the focus is not the new licences, which are covered by effective safeguards, but the issue of bulk trading where the licences have already been issued. It is about whether the new safeguards that have been put in, which give statutory consultee status to the environmental bodies, are sufficient. Ofwat has to consult those bodies, but it is not obliged to act in accordance with what they say. In the absence of the aligned timetables for the abstraction reform proposals and the proposals for the upstream composition, I remain concerned that we need the strongest safeguards. If we are not given satisfactory responses to the issue that we will be discussing imminently, I reserve my right to come back to it. On that basis, I beg leave to withdraw the amendment.
Lord De Mauley
Lord De Mauley
““main connection agreement” means an agreement with one or more sewerage undertakers for that undertaker or each of them to permit a main connection into its sewerage system and includes—
(a) an order under subsection (3) which is deemed to be an agreement by virtue of subsection (5), and(b) any agreement which has been varied by order under section 110B(1).”
Lord De Mauley
Lord De Mauley
Baroness Parminter
“( ) Before laying a draft of an instrument in accordance with subsection (1), the Minister must publish and present to Parliament draft legislation for reforming the law in respect of water abstraction.”
Baroness Parminter
My Lords, we now touch on the issue of the absence in the Bill of any abstraction reform proposals. Amendment 96 seeks to address the issue of the non-alignment of the proposals for upstream competition, which are within the Bill, and those for abstraction reform, which are not. Without the proposals for abstraction reform running in parallel with those that create a market for trading water, there is a significant risk to our scarce water resources. I will not repeat what I said at Second Reading, but suffice it to say that the House of Lords EU Sub-Committee on Agriculture, Fisheries, Environment and Energy and the Environment Agency both concur with the Government’s own view that at present,
“significant volumes of water are licensed but unused”.
If this water is used as the result, for example, of increased trading in a reformed system, that could cause environmental deterioration.
The upstream competition briefing paper which the Government have helpfully provided for us states that they are aiming to legislate for abstraction reform early in the next Parliament. My amendment would merely give statutory backing to that commitment by this Government and would tie future Governments to abide by it. Requiring the Minister to draft public legislation to reform water abstraction will give clarity to parliamentarians about the shape of the abstraction reform proposals prior to their scrutiny of the regulations that will govern the new market in upstream competition, which the Government say could come into force by 2019. I hope that the Minister will agree that this amendment is one way—I accept that it is only one way—of reflecting the Government’s stated commitment to delivering reform in a timely and coherent way. That can be secured only by aligning the proposals for upstream reform, which are in the Bill, with those for reform of the abstraction regime, which are not. I beg to move.
Lord Cameron of Dillington
My Lords, it seems strange to be talking about possible water shortages and abstraction reform in one of the wettest Januarys since records began. I remind noble Lords that January is named after the Roman double-headed god, Janus. If one head is pointing to the climate change extreme of floods, the other is undoubtedly pointing to drought.
I am not certain that either this group of amendments or the previous group totally grip the issue of likely water shortages and the much needed reform of the abstraction regime, which should be put in place as soon as possible. One of the lessons of the disaster of the Somerset Levels is that we should not wait until disaster strikes before taking action and rushing through reforms. At one of the side meetings last week, which many noble Lords attended, we heard that improvements in water supply and demand take a long time. We heard, for instance, how the mere extension of a reservoir in Essex took 20 years to arrange—10 years to prove the case and 10 years to get the planning through. Equally, universal metering, on the demand side—which of course is worth several reservoirs and is not dependent on rain—would also take a very long time to achieve, particularly if we are to bring consumers along with us, which is very important.
To avoid the likely dire situation that we will have in the future, we should use the Water Bill to ensure that disaster does not strike some time in the future. The dire situations relate to population increases, more demand for energy—energy is a huge user of water, as I am sure many noble Lords know—and more droughts, which are very likely. All these factors require greater flexibility in the management of our abstraction regime.
There are parallels with the energy industry. Some of us were dealing with the Energy Bill at the end of last year and tried to ensure that in the next 10 or 20 years’ time there would be a sufficient balance of supply to demand within the energy industry. All the time, we were aware that 10 years ago no one had looked carefully at this balance of supply and demand. We are quite likely to face power cuts in the next couple of years—as many noble Lords are aware—because of this lack of forethought in the past decade.
During the passage of the Energy Bill, my noble friend Lord Oxburgh, who I am sorry to see has left his place, tabled an amendment to establish a council of wise men who would look at the energy industry in the long term, see what was needed and ensure that the right precautions were in place. If the water industry had a group of wise men now, they would be telling us to put a road map in the Bill to take us as speedily as possible towards overall abstraction reform in universal metering and not to wait until the next decade, which seems to be the form, to put this in place.
I agree that abstraction reform is a serious issue. There will undoubtedly be winners and losers in the process whose interests must be given voice in the democratic process. However, I am fearful that Amendment 104, which I am sure the noble Lord, Lord Whitty, will come to in a minute, might put an even greater brake on the introduction of reforms than the long drawn-out process seemingly currently envisaged by Defra. If I have misunderstood Amendment 104, I look forward to being corrected. In the mean time, I strongly support Amendment 96 in the name of the noble Baroness, Lady Parminter.
Lord Crickhowell
My Lords, the noble Lord, Lord Cameron, asked if it was right to discuss the possibility of drought in the middle of floods. I can assure him that it is absolutely right. My experience in the NRA was that, whenever we had a flood it was almost immediately followed by a drought, and whenever we had a drought it was almost immediately followed by a flood. It was an almost invariable rule, so I am sure that he is right that we should be addressing these issues.
When speaking to my noble friend’s previous amendment, I said that the one area to which I might want to return was reform of the abstraction licensing regime. I spoke about it in some detail at Second Reading and I do not want to repeat what I said then. It was one of the central problems that we had to deal with in my time in the NRA.
I disagree with the noble Lord who has just spoken when he says that the Government should get this issue into the Bill and that it is very urgent. My understanding is that the Government are getting on with the kind of review and detailed discussions with just the sort of people that he suggested they should be meeting. However, they have pointed out that the issue is extremely complicated and cannot be rushed. While I, perhaps on the basis of experience, have always been one of the first to criticise the timescale on which some government departments operate, I have a good deal of sympathy with the need to take adequate time on this. This view was reinforced by the fact that at one of the briefing meetings, the representative of—I think—Anglia Water told us that it was undertaking fairly basic research into the resources available in the region. It was suddenly brought home to me that we do not know a great deal about the availability of ground water resources in many of our regions. We know how much water is going down the rivers, but we still need quite a lot of information before we have the kind of policy that we all want to see.
While we must get on with it, I am not sure it is right to think that we can put into this Bill the requirements that will follow the result of this important inquiry and examination. However, my noble friend Lady Parminter is right in thinking that there should be safeguards in the Bill so that when the results of the review come through, we can be certain that the necessary steps and measures are taken. I am not sure how that should be drafted or whether the noble Baroness has got the drafting quite right, but I sympathise with her desire to write safeguards into the Bill so that we are not left with a great gaping hole when we get the results of the very important review that is under way. I will therefore listen with great care and interest to what the Minister says in reply to this debate.
Earl Cathcart (Con)
My Lords, I declare that I farm in Norfolk, I live in a band H property, I have a bore hole for domestic use and I have spent about 30 years working and underwriting in the London insurance market.
I want to talk about two aspects. One is bringing all abstraction licences in line with today’s rules, conditions and requirements, and the other is abstraction charges.
At Second Reading I said that,
“it is cackhanded to be bringing in upstream competition in water trading before the existing water abstraction system has been reformed, given that the Environment Agency says that many rivers are already overabstracted and overlicensed”.—[Official Report, 27/1/2014; col. 1025.]
Just about everybody agrees that reform is sorely needed. The question is when it should take place. Many are impatient for reform, and I include myself, but the Government, in their handout, Upstream Competition and Abstraction Reform, say:
“We should not rush this: if we get it wrong, there will be real consequences for a range of business and industry, including farmers, food manufacturers and the power sector, as well as the environment”.
Quite so—they do not want to throw the baby out with the bathwater. The handout goes on to say that any abstraction reform will take place “in the early 2020s”. That could be 10 years away, which, to say the least, is disappointing.
Is there anything that we can put into this Bill that will help improve the current system? I believe that there is. My noble friend Lord Crickhowell mentioned Trevor Bishop, who is head of water resources at the Environment Agency. When he gave evidence to the Commons Committee, he said:
“Most of the damage due to over-abstraction is because the licences were passed a long time ago”.—[Official Report, Commons, Water Bill Committee, 3/12/13; col. 63.]
The older licences are still allowed to abstract, regardless of whether water is abundant or scarce, but there are restrictions on newer licences. The hands-off flow condition allows the Environment Agency to reduce or stop abstraction altogether if river and ground water levels fall, but this does not apply to the older licence holders—the vast majority of total abstractions. This puts newer licence holders and, indeed, the environment at a disadvantage. Surely, the first step should be to bring all licences up to date with modern requirements, especially the hands-off flow condition and, indeed, any other condition deemed necessary. I would like to see a provision in the Bill similar to the proposed new paragraph (c) in Amendment 74 in the previous group, which says that if the variation,
“cannot be achieved by agreement”,
the authority can vary the licence by order or terminate it. This would bring all licences in line, protect the environment and give flexibility to vary all licences as and when necessary. It would also bring this in now rather than waiting for 10 years
The next thing is abstraction charges. I looked at the Environment Agency website, which lists eight charging regions in England and one in Wales. There are two charges: the standard charge and the environmental improvement charge. The environmental improvement charge is different for water companies and for non-water companies, which I presume includes energy companies. The standard charges are not standard at all—they vary region to region. Of the eight regions in England, the Anglian and Northumbrian regions are charged the most, at about £28 per 1,000 cubic metres of water, while the north-west region is only charged about £12.50 per 1,000 cubic metres of water—less than half. Why is there this variation when it is called a standard charge? The Minister might say that the Anglian region, being in an environmentally sensitive area, attracts the highest charge in the country to cover the costs of managing the resources available. However, here I got muddled, because that is surely an environmental issue, and any extra charge ought to be levied under the environmental improvement charge, not the standard charge. Can the Minister explain?
I move on to the environmental improvement charge for non-water companies. Again, the Anglian region pays the most, at £13.71 per cubic metre of water, which is what one might expect, given that it is an environmentally sensitive area. The lowest environmental charge is 62p, for the Yorkshire region, while two regions—the Midlands and Northumbrian regions—pay no environmental improvement charge at all. Why? I do not understand the logic behind the charging and would like the Minister to explain.
Lord Whitty
My Lords, I have Amendment 104 in this group, which touches on exactly the issue that the noble Earl referred to right at the beginning of his remarks. The essential problem here is that we have two issues: the introduction of upstream competition and the deficiencies in the present abstraction regime. Logically, it would be sensible to have accomplished, or at least set in train, the abstraction reform before we introduce upstream competition. In fact, the Bill gets it entirely the other way round.
The inadequacy of the abstraction regime has been fairly long-standing. I can remember having arguments within Defra when we brought in the 2003 Bill that we ought to have been more radical at that point. Indeed, ever since, the situation in several catchment areas has seriously deteriorated. Although the noble Lord, Lord Cameron, is right that it sounds odd for us to be talking about it in light of the recent inclement weather in most of the country, the reality in the long term is that a lot of our catchments are not in very good condition, either in terms of water resources or of their environmental flow. Abstraction levels and potential abstraction levels have had a serious effect on that.
The Government know this and have undertaken a review of the abstraction regime. It has been rather a long time coming, but they have nevertheless got to the point where they issued a very good consultation paper only last month, which gives two options as to how we could conduct the framework of reform. They could have gone a little further—issues such as charging, which the noble Earl also referred to, ought to be part of this. However, if we are unable to introduce that reform until into the 2020s, and meanwhile we have triggered upstream competition, we are aggravating the position. Once there are new suppliers, they will be looking at new sources. They will be looking at trading licences. In reality, it is not only the abstraction that is taking place that is damaging to a lot of our catchments, but the potential abstraction under existing licences. Many of these existing licences, which we talk about being introduced in the 1960s, are grandfathered rights, which probably existed centuries previously when the demand for water was less and the precipitation was probably even more than we recently experienced.
We have catchment areas that are subject to increased demand at the far end, to increased environmental deterioration and to climate change, and present potential problems for water quality as well as water supply. That problem needs addressing. If existing licences provide for twice the level that is actually abstracted—in other words, less than 50% of the potential abstraction actually occurs—and more people are trying to get their hands, figuratively speaking, on the water to put it back into the system and to enhance competition, then we have got a perfect storm. What, however, if we do it the other way around—if we speed up the introduction of abstraction reform and get the legislation we need? Some of it can be done without legislation, but probably not all of it. For example, the issue of compensation was a major inhibitor on the Environment Agency, as it comes out of the Environment Agency’s budget and the Treasury makes absolutely certain that it comes out of your budget. This inhibits the degree to which you can introduce modifications of termination of abstraction agreements. Probably, because it is a property right, that needs primary legislation. We need to move to primary legislation fast. We need to introduce it and you cannot introduce it all at once. It will take a bit of time to introduce it, but we need to start as rapidly as possible.
Once we have an abstraction regime that puts a cap, catchment by catchment, on the amount of water in aggregate that people can extract, and defines that in terms of the flow of the river, the demand on that river, and the potential environmental damage or benefit to which that river contributes, then we can relatively easily within that framework introduce competition, trading, sophisticated agreements of swapping water between one entrepreneur and another and indeed across boundaries of the water company areas. If you do it the other way around, however, you will affect the environment and the supply of water. You will make it much more difficult later to introduce rules in relation to the competition which affect the abstraction licences which exist, let alone new ones.
The Environment Agency is not without some powers in this respect. As we said in relation to the previous group of amendments, at the point of change of use, the Environment Agency can effectively introduce new provisions. However, not all of these will be change of use and if you have an abstraction licence currently, which would allow you to take out twice as much water as you actually need, then only part of that licence would be used for the public water supply system and the rest would remain. In effect, instead of taking 40% of the abstraction you would be taking 100% and only half of that would go into the public supply to provide for additional competition.
Although there are powers for the Environment Agency, they need to be strengthened. The sequence of events needs to be a rapid conclusion of the current consultation on abstraction, and introduction of the primary legislation and other regulations that we need as rapidly as possible over the next few years If we sped it up we could probably do that by 2020, which the department says is probably the earliest date that we could introduce upstream reform in any case. If we do not have that legislative sequence, we will get to 2020 without abstraction reform being properly implemented, and have all the problems of suddenly introducing upstream competition.
All we are asking in these amendments is to put the order right, put both elements in the Bill, and recognise that we will still need another Bill to do the abstraction reform in detail. I am suggesting that the division between the primary legislation for abstraction reform and the introduction triggering the provisions on upstream competition should be five years. The noble Lord, Lord Cameron, queries whether that actually made matters worse, but that is more or less the timescale the Government are working on for upstream competition in any case, so it does fit. If necessary we can alter that five years, but we need some clear sequence. At the moment the Government are dealing with only half of it in this Bill. The department have started the other half but we need to do them the other way around. I hope that the Government at least accept that principle, even if they are not prepared to accept the noble Baroness’s or my amendment tonight.
Lord De Mauley
My Lords, I thank my noble friend Lady Parminter for moving her amendment and other noble Lords for their contributions to this debate. This is, we all agree, a vital area. Amendment 96 would delay regulations under Clause 12 and the market for private water sales to water companies from coming into force until draft legislation is presented to Parliament on abstraction reform. Amendment 104 would introduce a new clause to prevent Clause 1 from coming into force until five years after the Royal Assent of future primary legislation on abstraction reform.
These amendments would delay both the upstream reforms and the retail market reforms in the Bill. We do not think they are necessary. I will explain why. We are fully committed to delivering abstraction reform and we share the views of noble Lords that just because we have had the wettest January on record does not mean that we will not imminently go into drought. We have seen that in recent years. We do not share the view, however, that there are risks in introducing upstream reform ahead of abstraction reform.
The Government and the Open Water programme—a partnership between the industry and regulators—are working towards retail market opening in 2017. Our retail reforms are widely supported by customers, who will benefit from improved customer service as a result of these changes. Non-household customers will be free to negotiate the best package to suit their needs. Customers with multiple sites will benefit hugely from being able to negotiate for a single bill from a single supplier. Improved customer services will have knock-on effects for household customers too.
Upstream reform will be introduced at a slower pace, as the noble Lord, Lord Whitty, acknowledged beyond the 2019 price review. This is because we recognise— and I thank my noble friend Lord Crickhowell, for his expert views which supported this—that upstream reforms will require careful planning and close working between the water industry, regulators and customer representatives. However, it is important to progress upstream reform because the current regulatory model is not delivering the kind of efficient resource use and innovation that we need. This reform will help to keep bills affordable and, vitally, to benefit the environment.
I assure noble Lords that there are sufficient safeguards in the existing regimes to prevent an unsustainable increase in abstraction being caused by the Bill. In order to sell water into public supply, abstractors will need to apply to the Environment Agency or Natural Resources Wales for a “change of use” for their abstraction licence. The Environment Agency can refuse such a request if it will lead to unsustainable abstraction. It can also refuse if it would cause deterioration in the catchment, or apply conditions to ensure that this does not happen.
In addition, Ofwat must ensure that anyone wishing to input to the public water supply system holds the appropriate abstraction licence, and informs the Environment Agency about any trades with other abstractors.
Through this Bill, in Clause 1, the Government will also require Ofwat to consult the Environment Agency or Natural Resources Wales before issuing a water supply licence. As my noble friend Lady Northover explained in the context of an earlier group of amendments, there are also safeguards in the existing regimes to prevent an unsustainable increase in abstraction by water companies for the purposes of water trading or “bulk supply” agreements. I also assure noble Lords that we are completely committed to abstraction reform and the introduction of a new system fit to face future challenges including changing climate and population growth.
Baroness Parminter
I thank my noble friend the Minister for his detailed comments and the numerous colleagues around the House who joined in this debate. We face an inadequate abstraction regime that will be reformed at some point in the future and a Bill here and now that will introduce upstream competition proposals that could exacerbate the problems of abstraction. While I thank the Minister for his comments, I do not feel he adequately answered why the Government are not prepared to put wording in the Bill reflecting our concern that there is insufficient clarity at the moment about the timetabling of this issue. My noble friend Lord Crickhowell was kind enough to say he had great sympathy with that point.
I accept that the wording I proposed might not be right. We certainly do not wish to put any barriers on the proposal for reforming the retail market. I am sure everyone in this House agrees that we want to press ahead with that now. However, in the relationship between the abstraction reform proposals and the upstream competition there needs to be clearer timetabling within the Bill. I say to the Minister that we will return to this issue on Report, and in the absence of a sequencing being put in the Bill we will look again at further safeguards that will be required to prevent more deterioration to the environment. Those safeguards will be along the lines mentioned in my previous proposed amendments, which my noble friend Lord Cathcart was kind enough to say that we should look at more seriously, particularly paragraph (c) in Amendment 74. As I said, we will come back to this matter but on that basis I beg leave to withdraw the amendment.
Standards in Public Life
(10 years, 9 months ago)
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Earl Attlee (Con)
My Lords, I understand that my noble friend Lord Phillips of Sudbury would like to speak in the gap. If all noble Lords adhered to three minutes we could accommodate my noble friend. When the Clock indicates “3”, a noble Lord’s time is up.
Lord Bew (CB)
My Lords, the Committee on Standards in Public Life is an independent committee that provides advice to the Prime Minister. Its remit is to promote high ethical standards across the public sphere, not just Parliament. Its first ever report, in 1994, recommended seven principles to guide the behaviour of those who serve the public in any way: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Those principles are popularly known, after the first chairman, as the Nolan principles.
The committee published its fifth general survey of public attitudes last autumn. The committee has conducted the survey every two years since 2004. It is a unique long-term, independent study and source of information about what the public think about standards in public life. The issue here is general probity. It is important to check our perception of the standards that the public expect of public servants and organisations, and the extent to which those are being met, against reality. We cannot afford to assume that we know what the public really think about these issues.
The survey was published at a time when a variety of research showed an increasing disengagement from the political system and some national institutions seemed to be engulfed in a series of scandals. The apparently—and I stress apparently—engulfing nature of scandals is a particular problem of the modern era. At least in some media discussion the impression exists not just of a few bad apples but that entire institutions lack probity: the BBC, Parliament, the police, et cetera.
The survey draws on all four previous surveys to chart changes in attitudes over the past 10 years. All surveys have consistently demonstrated what members of the public expect from people in public office. It is: to be committed to public rather than private ends; selflessness and integrity, as in the Nolan principles; to be honest and open in decision-making; to make decisions in the light of the best evidence; objectivity; to be held accountable; and for some senior public figures to lead in some respect exemplary lives—the principle of leadership.
Over the lifetime of the survey, there has been a continuous and substantial decline in the number of respondents rating standards as quite high or very high. In the latest survey, 28% of respondents rated conduct as either quite low or very low. There was also an increase in the proportion of people thinking that standards had got a lot worse. In relationship to Westminster MPs, the public broadly share a set of expectations that are in line with the seven principles of public life. However, they have consistently lower levels of confidence that MPs meet those standards. In the latest survey, pessimism was less marked than in 2010, when attitudes were sharply affected by the then recent events of the expenses scandal, but levels of confidence have not returned to their 2008 levels.
Although absolute levels of confidence are low in particular types of national public officeholders and professions—for example, Ministers, MPs and tabloid journalists—that should be contrasted with higher and rising confidence in institutions, processes and those administering the process. For example, as in most countries that have low and falling levels of confidence in politicians, there is, paradoxically, higher confidence in national institutions such as Parliament itself and much higher confidence in the legal system. For Parliament, it might be argued that there was something that looked like the possible beginnings of a crisis of legitimacy in the 1970s, but there is no sign of such a crisis today
Questions of trust are valuable tracking devices for changes, but there are dangers that we should be alert to in generalising about the public perception of probity. For example, we are sometimes a bit disappointed that only the broad, negative perceptions of MPs are reported in the media. There is a great deal of complex, sometimes counterintuitive material in the research which has messages for those working in public life. For instance, our survey showed a widespread belief that respondents would receive fair treatment from a wide range of front-line public services. Less than 15% of those surveyed expressed concern that they would be treated worse than others, and there are clear messages that the public expressed more confidence in the probity of those working in the public sector as against those working in private services.
The data also give us a picture of those groups who are most likely to feel sceptical and, to some degree, alienated. That is particularly the case for those lower social grades from white British or white Irish backgrounds, middle-aged or older, and who have little engagement with the political system. The growth in the size of that group presents a challenge to all of us involved in public life.
The Committee on Standards in Public Life recognises that it is important to place those findings in a wider context, and it is now doing further research and assessing the results from our British survey compared with those in other countries, to see if results are potentially affected by domestic factors or reflect citizens’ attitudes across western democracies in general. We also appreciate that perceptions of trust and public confidence can include a range of issues which have nothing to do with integrity and genuine trustworthiness and are much more to do with the policy process and the process of delivery.
It is important that the public have confidence in the integrity of public institutions and that those who work in them are alert to a certain level of public malaise and, where necessary, willing to challenge the status quo. At a recent committee meeting with academics, there was a wide-ranging discussion about some issues which might address some of those perceptions: whether or not a less adversarial style of politics might help; or whether or not a better level of political reporting would help. An interesting point was made that MPs in the Netherlands considered that they have a role as a public educator. It is not quite as clear that MPs in United Kingdom consider that to be an important part of their role. There were a number of other interesting ideas for discussion and debate.
The broad context is clear enough. Modern politics became less ideological when the era opened up by the Russian revolutions closed in 1989. Politics became, it is often said, more about values and individuals and ideologies, but we still have a gladiatorial style, seen most spectacularly at PMQs, inherited from a more ideological age. The result is a displacement of inevitable popular resentment, which used to have a more ideological form of expression, to individuals in a more modern version of Brecht’s socialism of fools.
My committee believes that there is scope to improve and maintain levels of public confidence and trust by public officeholders and institutions by improving their own trustworthiness; by consistently and reliably exemplifying high standards of ethical behaviour, openness and accountability, as our recent report, Strengthening Transparency Around Lobbying, discussed; being more attentive to and active in addressing emerging ethical standards issues as they arise, rather than waiting for pressure for reform; establishing and promulgating robust mechanisms to detect and deal with wrongdoing; and creating a culture where high standards are built into everything the organisation does and genuinely seen as everyone’s personal responsibility.
Following a recommendation of the committee’s recent triennial review and understandable budget cuts across the public sector, that was the last such survey produced by the committee. I must say that since my arrival in the chair in September, the importance of the survey has been borne in on me in a way that was not the case before, and I began to appreciate its value in a way that I had not before. To have that steady survey over a period of changes and transitions in public mood is, I think, of great value. We regret losing in-depth analysis of the public view, especially when there are signs of disconnect between the public and the political process.
The focus of my committee’s immediate work programme will be on working collaboratively with public sector officeholders and organisations to promote and reinforce ethics and practice. We need to increase our understanding of the factors at play in building and maintaining public confidence. I believe that the committee and its research has a role to play in trying to move the debate on from the position so often heard—“They don’t get it”—to a different and better position, which is, “What can we do about it?”.
Lord Patten (Con)
My Lords, I have long admired the noble Lord, Lord Bew, for his ability to tease out of sometimes very dense language extremely important points, and he has just done so in his speech. Indeed, it was he who inspired me to read the whole of the report, which is dense and curious, sometimes, in its language. The noble Lord referred to the phrase, “the lower social grades”—a slightly grating phrase. I think that Aldous Huxley would have recognised that phrase, with his standard gammas, unvarying deltas and the rest.
That said, as I ploughed through the report, which the noble Lord, Lord Bew, inspired me to read, I became surprised—so I searched the harder—to find no specific mentions of your Lordships’ House in a longitudinal study, which strikes me as a major lacuna. There are mentions of all sorts of people—police, judges, and those in the front line giving out advice—but no mention of your Lordships’ House. I think that that needs to be addressed in future reports of this sort if we are to have the full value that we should get from them.
I can only make assertions, because there is nothing in this report which will stand up what I am about to say, but does the Minister share the concern expressed by some people in my hearing that there are things wrong with this place which need to be addressed? For example, some people feel that it has got terribly large and therefore is not very effective in what it does. I think that, had questions been asked in the longitudinal survey, we would have got some very interesting answers.
Most importantly, I am convinced—anecdotally; perhaps I listen to the wrong kind of taxi drivers—that the impression of your Lordships’ House has gone down sharply in recent years. If there is one thing that has affected that perception it is that a revolving door is still possible between someone becoming a lawmaker, then becoming a lawbreaker and leaving the service of your Lordships’ House, and then, having served whatever sentence was given, coming back into your Lordships’ House, having been a lawbreaker, to be a lawmaker. You do not have to be a taxi driver to think that there is something a bit rum about that.
I end on the note that something should be done and be done quickly. It always used to be said that nothing could be done quickly about changing the laws of succession so that men and women could be in the right order of birth to become head of state in this country. The blessed Norman St John-Stevas used to stand up and say that it was quite impossible to do. Suddenly, the Zeitgeist changed and it was done. We need to make sure that as the Zeitgeist changes over this issue, the revolving door that goes between lawmaker, lawbreaker and lawmaker no longer exists.
Baroness Donaghy (Lab)
My Lords, I am grateful to the noble Lord, Lord Bew, for initiating this short debate. I was acting chair of the Committee on Standards in Public Life during most of 2007 and a member of the committee when Sir Nigel Wicks was in the chair and the public attitudes survey was inaugurated. I remember clearly how excited we were about the significance of the survey, particularly its long-term tracking of standards in public life.
The main thrust of my contribution is to ask the Government to think again about the withdrawal of funding for the public attitudes survey. I have been in contact with Sir Nigel Wicks and he has permitted me to communicate his “great disappointment” that the Government are withdrawing funding for future surveys. They provide an authoritative and transparently impartial method for tracking public perceptions and expectations of standards in public life. They give all concerned with standards in public life feedback on how the British people view a fundamental element in the working of our democracy. Sir Nigel is firm in the belief that the value of the public attitudes survey could not be replaced by a series of ad hoc surveys, conducted by bodies other than the committee. Such surveys would lack the authority derived from the committee’s own authority and knowledge, as well as the continuity provided by the regularity and consistency of the committee’s surveys. This would make it virtually impossible to identify trends and changing attitudes.
I can only echo Sir Nigel’s words and ask the Minister to consider the long-term implications of the Government’s decision to cease funding. The work of the Committee on Standards in Public Life is admired by the rest of the world for its independence and robust defence of standards. It will appear very strange for politicians, who admittedly are not too high on the popularity poll, to take the decision to weaken fundamentally the authority of these surveys.
Lord Martin of Springburn (CB)
My Lords, I, too, am grateful to the noble Lord, Lord Bew, for securing this debate. Our national poet, Robert Burns, often spoke about seeing the good in people. Perhaps we can see the good in people in public life because there are so many who are all too ready to highlight those who do the wrong thing.
However, my thoughts go to the fact that we have thousands of men and women up and down the United Kingdom, including in Northern Ireland, who have chosen to serve in local government for very little reward. Those men and women hold down their jobs and go to meetings of the council. At night, they attend the public meetings that we have with the housing associations or the tenants’ associations. They also deal with what some people would consider to be the little things, such as repairs to the sinks or drainpipes, or cleaning up the play area. A Speaker in the United States, Tip O’Neill, once said that all politics is local. We might call what these men and women in local government do “the little things” but it is important to remember that those things are important to the elderly, the mothers who want a play area to be cleaned up and all the other people who are worried about their community. As those men and women are not here at Westminster, sometimes constituents come to their door and disturb them even when they are having a family meal.
Your Lordships should remember that we often tut-tut when we are in conversation about non-traditional housing: the corridor houses and multi-storey flats in our cities. Not all of those places are bad to live in but because of the climate we have in this country the local authority gets the blame. In the 1960s and 1970s, when those men and women who were in local government wanted to clear the slums away and give people decent homes, it was central government who said to them, “You will not get government funding unless you build non-traditional houses”. When the problems arose, the blame lay with local government and the Government distanced themselves from the difficulties.
What I can say about the other place is that there are those who have brought the Commons to shame. We should remember that there are 650 Members of Parliament and that they are excellent at working on an all-party basis. Although I do not have the time, I advise noble Lords to read the adjournment debate which Mr Chris Skidmore raised on dangerous driving, in which dozens of Members from all parties took part.
Lord Tyler (LD)
My Lords, in view of the time constraints I want to focus on just one part of this excellent report. Figure 4.1 on page 22 shows that 26% of the respondents to the survey feel that MPs can legitimately take into account what big donors to their parties want when they cast a vote in the Commons. The committee found in another of its surveys, in 2010, that 81% of the public thought that the most common reason for donating to a political party was either in the hope of receiving some special favours in return—perhaps appointment to your Lordships’ House—or gaining access to those taking decisions. This perception that influence and access may be auctioned to the highest bidder is corrosive of our politics and corrosive of public perceptions of standards in public life.
The CSPL rightly concluded in its November 2011 report on party political finance that,
“this situation is unsustainable, damaging to confidence in democracy and in serious need of reform”.
The then chairman of the committee, Sir Christopher Kelly, argued that the cost to the public purse of capping big donations to parties would be the equivalent of just one first-class stamp each year for each elector. There is the choice: between each person paying 50 pence for an equal, democratic share of influence over the political system or a few people paying £50,000 a year for a necessarily quite unequal share of that influence. Yes, the public are sceptical about politics and parties but we have a responsibility to make the arguments, rather than shy away from them.
Just a fortnight ago in your Lordships’ House, the noble Lord, Lord Campbell-Savours, invited us to show that leadership by proposing the minimum possible reform of the party funding system: the introduction of a very small amount of tax relief for individual donations to parties. He said that,
“the very credibility of this institution is at stake. We have had far too many scandals over the years; political scandals relating to money and politics”.—[Official Report, 15/1/14; col. 320.]
He was backed up across the House. I particularly want to draw attention to the words of my noble friend Lord Hamilton of Epsom, who said that,
“political parties in this country are financed by the trade unions and, to a very large extent on all sides of the House, by extremely rich men who are seen to exert influence … This does us no good at all and we should grasp this nettle and do something about it”.—[Official Report, 15/1/14; col. 321.]
I supported him, as did my noble friend Lord Hodgson, who said:
“Someone, sometime, somewhere has to be brave, and we need to give them a nod tonight to get on and be brave as soon as possible”.—[Official Report, 15/1/14; col. 325.]
I welcome the report of the committee of the noble Lord, Lord Bew, but I worry about the deepening public distrust in politics that is held by our fellow citizens. I endorse strongly what was so many noble Lords have said and I very much hope that we will soon make progress and that our leaders will be brave on party funding because without that, there will be further corrosion of trust in party politics.
Lord Hennessy of Nympsfield (CB)
My Lords, the committee chaired with distinction by my noble friend Lord Bew is the guardian of the seven principles of public life first promulgated by the standards committee in the mid-1990s, under its founding chairman Lord Nolan, as my noble friend reminded us. The most cheering finding in the committee’s 2012 survey, which we are debating today, is that the public continue to support those principles to an overwhelming degree.
Should the British people become so jaundiced with those in public and political life that, when asked about the behavioural lapses on the part of their Ministers, officials and legislators, they shrug disdainfully and reply, “Well that’s the way they are; what can you expect?”, then we would be in deep trouble as a country and a polity. Mercifully, we are still shockable.
However, the standards committee report makes for truly depressing reading on the low levels of trust in politicians. But, in my judgment, it is the findings on political engagement which leap most dramatically out of its pages. It is the level of alienation from all parties, big and small, across the spectrum that is searing. Place this finding alongside the Hansard Society’s 2013 Audit of Political Engagement and the picture is truly grim. The Hansard Society found that, in terms of general elections:
“The number of young people (18-24 year olds) certain to vote has declined 10 percentage points in a year (22% to 12%)”.
The reasons for such indifference and alienation are multiple and have accumulated over a decade of historically low general election turnouts.
I will finish by mentioning but one aspect that has long worried me: the language in which we conduct our national political conversation. George Orwell argued, in his classic 1946 essay, Politics and the English Language, that if the main instrument of political exchange and argument—language—became stale, clichéd and debased, we would be seriously impoverished. Nearly 70 years on, in our deeply sound-bitten political culture, we have much more to worry about than did Orwell. Between now and the general election of May 2015, can our political class raise its game? Can our politicians find the tone, the pitch and the vocabulary to break through the indifference, especially of those 18 to 24-year-olds? I live in hope.
I have one final thought for the noble Lord, Lord Bew, and his committee, the work of which I have always admired. How about a review of the quality and clarity of language used in government White Papers? That is a question of standards, too. Doing an Orwell on White Papers would be a service to us all.
Lord Harries of Pentregarth (CB)
My Lords, before turning to the survey in more detail, I would like to make some brief points of a more general nature about the seven principles of public life. First, these principles are absolutely fundamental to the healthy functioning of any society. Without them, a society can only be regarded as sick and it certainly would not function as it ought. Secondly they exist in their own right, valid in themselves, with a claim upon us. They cannot simply be read off or derived from any scientific or economic description of society. That is why, if I am honest, I think the word principle is a somewhat weak term. We could, for example, say things such as, “I am going to run the organisation along the following principles”, as though these were guidelines I had chosen, when I could have chosen others. However, the qualities that we need for public life are not items in a bag that we decide to choose. They are a sine qua non of any ordered society. For example, if a Minister lies in his private life, he will have to sort it out with his family as best he can but if he lies to Parliament, he rightly has to resign. Truthfulness, trustworthiness, integrity and a concern for the wider good are not principles that we just happen to choose. They are the fundamental values which make possible any ordered life together.
So it is very good to know, as the noble Lord, Lord Hennessy, emphasised, from the introduction of the report, that the public have consistently prioritised these principles across the five surveys. It is clear that the public have continuing high expectations of those in public office and that is very healthy. As the survey indicates, there is an overall decline in standards since the survey in 2008 and this stands in marked contrast to an overall continuous rise from 2004 to 2008. The report was correct to point out that the decline since 2008 had much to do with the financial sector, particularly the banks in bringing about the economic crisis, and the newspaper hacking scandal. So, as is pointed out, if trust can be lost, it can also be regained, as it rose in some areas in the years from 2004 to 2008. That is an important point and we must respond to it.
Nevertheless we cannot get away from the fact that the overall rating of standards has declined very sharply. In 2004, 46% rated them quite high or very high but by 2012 this has fallen to 35%. The noble Lord, Lord Bew, emphasised the importance of educating public office-holders. I suggest that the Government have a responsibility, both through the Department for Education—in citizenship education in schools in particular—and the Department for Communities and Local Government, through its cohesion programme, to try to educate religious communities and, not least, their leaders. Religious communities now have a key role in thickening the moral fabric of our society. Communities of all faiths have a particular opportunity to feed into and strengthen the moral bonds that hold us together and which enable public life to truly serve the common good.
Lord Norton of Louth (Con)
My Lords, I too congratulate the noble Lord, Lord Bew, on initiating this important debate. I wish to make three short points. The first is that maintaining standards, as embodied in the Code of Conduct, is necessary, but it is not sufficient to establish high levels of trust in our political system. As is clear from the survey, we have some way to go to meet the necessary standards. However, ensuring compliance with the code should be seen as only part of the solution. What flows from the survey, and the Hansard Society’s annual Audits of Political Engagement, is that we should be pursuing both a bottom-up and a top-down approach to restoring trust.
The bottom-up approach is captured by one of the final sentences of the survey, on page 51:
“It also seems likely that perceptions of standards would respond to better public information about how different institutions try to ensure that they live up to the principles in public life”.
One of the problems is lack of understanding of the political process. Like the noble and right reverend Lord, Lord Harries, I believe it is necessary to bolster citizenship education. It is in the national curriculum, but there are no incentives for head teachers to take it seriously. We need to be ensuring that there are incentives, and resources, for schools to deliver it effectively. It is essential to the health of our political system.
However, ensuring that people are more informed about the system is no guarantee that it will enhance support for it. That will come when people recognise that politicians are acting in good faith to deliver on their promises. There is thus a major challenge for politicians in terms of behaviour. We need political parties to move away from empty partisanship and to get out of the Downsian cycle of outbidding one another. We need politicians to show leadership—the top-down approach—to lead from the front and not follow focus groups or the latest passing bandwagon. Margaret Thatcher pursued policies that were contentious, but her leadership style resonated. We need to be addressing these issues. It is easy to advocate constitutional reform, but that is a form of displacement activity. It is to suggest that the structure, rather than those who occupy it, is the problem. The problem is the people who occupy it. Once we accept that we are part of the problem— indeed, a central part—we can then start to tackle it.
My question to the Minister is straightforward: do you agree?
The Earl of Lytton (CB)
My Lords, I too congratulate the noble Lord, Lord Bew, on securing this very timely debate. The attempt to yoke standards in public life with public engagement is commendable but it is no easy task. The noble Lord, Lord Norton of Louth, covered a point which I was going to make and I would like to reinforce it. There is a lack of knowledge about the systems on which interviewees are being asked to comment. It is not just about the political scene, it is about all manner of things. Things such as crime statistics, in which I am interested, or medical incompetence may be important to a few but are not often a wider consumer experience. This report shows there is no room to be complacent but it also show there is an endless need to try to dig a little deeper.
Since 2012, we have had several high-profile instances of things going wrong in both the public and semi-public sectors. The fact that the semi-public bit is not truly a public body does not mean that it does not have a public profile or impact on the public interest. Professor Barry Loveday of the University of Portsmouth wrote an excellent paper some years ago about performance management. He identified the target culture; at senior level, it is a culture for its own sake. Then there is collectivisation of risk and responsibility, so that there is no individual to blame and, with it, no real focused leadership. There is protection of the status quo—the system for its own sake. With the rank and file, not to be too segregationist here, there is a silo mentality. People say, “It’s not my job, not my responsibility”. There is a demarcation with other people’s roles and a philosophy of “Don’t grass on your mates”.
Within all this, some commonalities arise. There is the lack of ethical framework, referred to by the noble and right reverend Lord, Lord Harries. The rights and entitlements are not matched with the duties and responsibilities, a point made yesterday in “Thought for the Day” by Clifford Longley. There are no real consequences—everyone is doing it, so do not break ranks or make yourself conspicuous. These are the matters of concern.
We have heard about leadership and politicians. I am afraid to say that both rank exceedingly low on the OECD statistics, but there are obviously sociological aspects and there is this awful thing to do with victimless crimes—as if ever such a term could be invented. We should not have that; because the Home Office counting rules do not count them does not mean that there are no victims. So there has been a failure to exert rigorous investigations. I have in the past suggested that there should be senior criminal judge investigations in certain areas of our public life; there are victims who need to be recognised as there are malefactors to be brought to book.
I could go on, but my time is up. I wish the committee chaired by the noble Lord, Lord Bew, very well. Never was a role more worthy or necessary of further funding.
Viscount Colville of Culross (CB)
My Lords, I, too, thank my noble friend Lord Bew for putting together this report. I declare an interest as a producer at the BBC. As a journalist, I want to concentrate on what the report tells us about the public trust in the media and their ability to hold those in public office to account. In Chapter 5, the noble Lord, Lord Bew, reports on the decline in public confidence in the media to do this. It seems a small fall from 80% 10 years ago to 70% in 2012, but the decline reflects a public awareness of the ability of the media to investigate and check public figures.
Local media in particular have been devastated by the move of advertisers to alternative providers on the internet. My noble friend Lord Martin mentioned local authorities; across the country, the work of local authorities is being ignored by journalists and receives little public attention, as local newspapers close down or become freesheets. We see the same process in our national newspapers, as newsrooms are pared to the bone. Of course, there are still investigations, like the exposure by the Telegraph of the MPs’ expenses scandal, but increasingly news is filled with PR, as product placement and unchecked political spin become more prominent. The internet is an extraordinary source of news stories, as the new tools of social media make us all citizen journalists. But when there are so many voices out there and so many with hidden positions and private axes to grind, it is hard to know which voices to trust.
That brings me to the findings of Chapter 2 of the report, showing a surprising increase in trust in journalists across the board; I wonder whether that would still hold up, after the last year of phone-hacking revelations. As my noble friend Lady O’Neill of Bengarve pointed out in her TED talk, the generic question of whether we trust a particular group is flawed. We do not ask whether we trust fishmongers; we trust some fishmongers and not others. Likewise, we trust some politicians and not others, and some journalists and not others. There are some journalists and some media outlets, such as the BBC and ITN, which we do trust.
It has never been more important for us to have professional journalists whom we trust to sift through evidence, painstakingly check its reliability and present us with a report that we can believe. They need to be supported by editors, prepared to take on an investigation even when it might fail. I cite the sterling work of my former colleague, Michael Crick, on “Channel 4 News”, in getting to the bottom of the “Plebgate” scandal, as he tenaciously investigated the two competing versions of the truth offered by competing holders of public office. Eventually, he discovered the lies in the police story and the flaws in the Cabinet Office’s investigation of that story. Television, the internet and newspapers need to foster those journalists, so that audiences continue to have faith in their ability to hold those in public life to account. It is important to support the work of investigative journalists that is exercised with integrity, so that authorities can be held to account as part of a healthy democratic process.
Lord Phillips of Sudbury (LD)
My Lords, I, too, thank the noble Lord, Lord Bew, and want to concentrate on the issue of the ignorance of our young citizens of this place and its workings and the impact of that. The report says:
“One particular cause for concern from the research is the number of people, especially young people, who feel disconnected from the political system and political parties”.
It says that the growth in the size of that group represents a challenge to us all. The noble Lord, Lord Hennessy, the noble and right reverend Lord, Lord Harries, and the noble Lord, Lord Norton, all referred to that.
Yesterday, the EU produced its first anti-corruption report. If noble Lords want to feel really miserable, they should look at that, because it shows that 64% of the people of this country consider that there is widespread corruption, from the private sector to the public sector and back. If noble Lords want to feel more miserable still, they should concentrate on the statistic in the Bew report to the effect that 41% of those polled in the youngest group—and a great number of people were polled—have no connection or sense of belonging to any political entity or party and are certain not to vote.
It is not good enough for us just to say that it is down to the Government. We are the legislature and we produce more legislation every year than any country in the free world: roughly 10,000 pages of new statute law a year. Much of that is beyond our comprehension, let alone the public’s. I am not making a trite point. If we go on as we are, the chances of the British public catching up with us are frankly nil. It becomes an exercise in cynicism. If you do not understand the basics of your democratic society—and, my word, they grow in complication year by year—let alone the law, how can you expect young people to identify with the system, feel ownership of it and want to contribute to it as active citizens?
I must declare an interest as the founder and president of the Citizenship Foundation. It is the biggest civic educator in the country. The situation is critical. Half our secondary schools do not even have to teach citizenship education. The rest have scarcely been Ofsted-ed. The numbers taking citizenship GCSEs are falling. The number of those teaching citizenship is falling. This is a crisis and we must start at root with our young people and give them the chance to be citizens.
Lord Kennedy of Southwark (Lab)
My Lords, like other noble Lords I start by thanking the noble Lord, Lord Bew, for initiating this debate. I agree with many if not all of the points made. In three minutes, however, it is difficult to get across all the points that you want to make. I thank the Committee on Standards in Public Life for commissioning the preparation and publication of this report, which is one of a series that it has produced since 2004. Like my noble friend Lady Donaghy and the noble Lord, Lord Bew, I very much regret the withdrawal of funding for this survey in future years.
The report confirmed for me a number of things that I had suspected about public attitudes to standards in public life. While some of these perceptions might not always be fair, as politicians and people in public life we often do not do ourselves any favours. I noted that in 2012 MPs and Ministers were evaluated less favourably than all other categories, with the exception of tabloid journalists. The expenses scandal in 2010 certainly affected in a negative way public attitudes towards politicians, and levels of trust and confidence have not returned to the levels seen before then.
I am of the opinion that people who go into public life and who seek elected office, at whatever level, do so with the best intentions, and that in this House, in the other place, in other parliaments and assemblies, and, as my noble friend Lord Martin of Springburn said, in council chambers, good men and women are seeking to make things better. We can and should debate, discuss and even argue what that should be. That is what a healthy democracy does.
The report also highlighted how we need a strong media to hold people to account and showed that 70% of people believe that the media will generally uncover wrongdoing. It was pleasing to read that people generally felt they would be treated fairly by people providing public services. There are high standards in the public sector and we are well served by people who work there. We also have remedies to deal with issues when things go wrong. Being able to correct things and provide redress is part of the confidence in how you know that you will be treated.
Will the Minister tell the House what action the Government intend to take following the publication of this report? In particular, will he tell the House, as the noble Lord, Lord Hennessy, highlighted, what the Government intend to do to deal with people’s feeling of disconnection from the political system and political parties? This is one of the most worrying findings of the report and it is incumbent on the Government to ensure that we have conditions in place to allow healthy parties to thrive.
I again thank the noble Lord, Lord Bew, for enabling us to debate this important issue tonight.
Lord Wallace of Saltaire (LD)
My Lords, this has been an excellent debate and we could have spent a great deal longer on it.
I am struck by the level of public alienation from conventional politics, which we find most of all among the young. I find it deeply frustrating that we are in this situation, partly because I spent some time as a member of the Government’s World War One advisory board, reading political literature on the first 15 years of the previous century. I reflect that we have a much less corrupt political system than we had then. Standards of personal morality among our politicians are far higher than they were then, but respect and deference have gone down.
There are many reasons for that. We are in the middle of a media war with politicians. The Leveson inquiry has not settled things down into a new relationship yet. A major trial is under way that will impact on our perceptions of the media, as well as the relationship between the media and politicians. We have some real problems to face. When I read in the report where politicians stood, I was cheerfully reminded of a conversation at a party in Saltaire the winter before last. A friend of one of my wife’s cousins asked me what I did. I said that I didn’t think that she wanted to know. She said, “You’re not a banker, are you?”. I thought: good, there are people who rank below politicians in public respect.
However, we know that there is a crisis in our institutions and in confidence in our elites—not just our political elite. The standing of the police will no doubt be much lower in the next survey than it was in the latest one. This is a general problem for all of us; it is a problem of trust. The question of how we re-establish trust in our institutions is enormous. There is also a sense that people have lost local community. They have lost the church as part of local community and that gives them a sense of loss of control. They have lost local democracy. I am struck in our big cities, such as Bradford, Leeds and Birmingham, that there are wards of 12,000 to 15,000 people where you cannot have a sense of contact between elected politician and the community that he or she serves.
Globalisation—the extent to which multinational companies come and go, and a sense that international organisations, be they the European Union for us or the United Nations for Americans, are somehow interfering in our lives—gives a sense of popular alienation. The question of how we deal with this ought to be one of our major shared concerns. It cannot be dealt with by the Government or political parties alone; it has to be dealt with by all of us, including the media, judges, the police and others.
I liked the suggestion of the noble Lord, Lord Bew, that Dutch MPs see public education as part of their role. That is something we all ought to think about in more detail. I also liked his remark about the gladiatorial style of our party politics being a major part of the public’s switch-off. Lots of other politicians watch Prime Minister’s Questions because they think it is fun but not very constructive. The way that we approach political and constitutional reform is pretty awful. We ought to bear in mind that, unless we see the process of political and constitutional reform as a way of regaining the trust of the public, we are wasting our time.
The noble Lord, Lord Patten, asked about the House of Lords and how that fits in. I am not sure how people see the House of Lords—I think through a glass darkly on the whole. Yes, we are too large; so is the House of Commons, but that is partly because the Government are too large. We are the largest collection of government appointees of any advanced industrial democracy, and perhaps that is something else that we need to contemplate. However, I say to the noble Lord, Lord Patten, that the Private Member’s Bill—the Steel Bill mark 5, or whatever it now is—which is now called the Byles Bill, will begin to correct the problem of lawbreakers subsequently returning to the Lords.
The noble Baroness, Lady Donaghy, asked the Government to review the decision to end this survey and I will take that comment back. I, too, read the Hansard Society survey on attitudes to those in public life. Part of the reason for deciding to end the survey of the Committee on Standards in Public Life was that a number of other similar surveys reach the same worrying conclusions, and the Hansard Society survey is clearly very much part of that.
The noble Lord, Lord Martin, talked of the importance of politicians being seen as serving their communities. One of the things that we have to combat is the sense that everyone, whatever they do, is doing it for their own benefit. That is part of the attitude that has grown up in the past 20 years. Economists bear a certain amount of responsibility for that with the growth of public choice economics, which argues that everyone is self-interested and no one has any altruistic feelings, as do the spread of libertarianism across the Atlantic and the disciples of Ayn Rand, who forget that the concept of public service—contributing to the life of the community—does motivate people. We need to reward those who are motivated by that. That is very much part of what we need to reintroduce in our public life because the cynicism of those who say, “You’re all in it for what you can get out of it”, is part of what has eroded popular respect for all our elite institutions.
My noble friend Lord Tyler talked about the power of money in politics as being part of that erosion. The power of money has always been there; it was just that previously it was disguised by deference. The extent to which we had mass political parties meant that they could claim to be funded by a very large number of people. I was rather shaken when I discovered, about two years ago, that in the previous year there had been more individual donors to the Liberal Democrats than there had been individual small donors to the Labour Party. The Labour Party had retreated to a position where it depended very heavily on union donations. That is a problem for all of us, and is one we all share. Why has our membership shrunk? Why have political parties ceased to be able to persuade people to share in contributing to political life at all levels, which is what we attempt to do?
The noble Lord, Lord Hennessy, talked about the need to reconsider the language of politics. That is very much a problem for all our public educators, journalists and others. The war between the BBC and the written media is part of the problem that we currently face, as the noble Lord well knows. There is the sense that the BBC is trying to address public service broadcasting and is being attacked; that it is an inherently left-wing concept for the Daily Mail and the Telegraph is part of what has gone wrong. How we gain that sense of a shared discussion about limited issues is very much a part of what we have to do.
I suggest that part of it is that politicians have to explain to people the limits of what is possible. I come from a party that, much against my efforts within the party’s policy committee, attempted to persuade people that we could somehow abolish tuition fees. We could not; we needed to spend the money on early years and education. It was a mistake. Politicians in some parties are now trying to persuade people that we can tell the world that we want to get off and go back to national sovereignty. We cannot. There are things that people want that politicians cannot provide. We cannot put up pensions, provide everything free on the National Health Service and cut taxes at the same time. Anyone who suggests that that is possible is misleading the public dreadfully.
The importance of expanding citizenship education is an issue on which the noble Lords, Lord Norton, my noble friend Lord Phillips and others touched. Yes, it is vital. No, we have failed to do that, as have successive Governments over the past 20 to 30 years, and more. It is something that other institutions, such as the churches and local politics before local government was cut so badly, used to provide. We have to find a way of doing that and I thoroughly support the work of the Citizenship Foundation and my noble friend Lord Phillips in promoting it.
We all feel that good men and women are needed to hold political life and democracy together. We also recognise that to some extent the professionalisation of politics has undermined that. We have a problem with political recruitment and getting people into politics who will want to serve. In many ways it is sad that David Cameron’s efforts to bring a number of people from outside politics into the Commons through his A list has not been more successful. He was trying to find people from outside political life who would contribute to politics. We need a broad common effort by all political elites to rebuild public trust. That has to come from parties, Parliament the media and others—heaven knows, business and bankers. Until bankers begin to make their own proper efforts to reconstruct the trust of the common public in the financial system, there is a limit to what we can do to rebuild public trust as well. Most of all, we need to explain to and educate our public about what is possible and what is not, and to accept that we are not just politicians but, as the noble Lord, Lord Bew, said, we have to be public educators.
Water Bill
(10 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Whitty
“Retail exit
(1) The Secretary of State may by regulations make provision about the transfer of an undertaker’s assets and liabilities associated with its non-household retail business into a separate company.
(2) Regulations under this section are to be made by statutory instrument.
(3) Regulations under subsection (1) may, in particular, make provision for any such transfer to be subject to—
(a) approval by the Secretary of State; (b) any such safeguards as may be specified in the regulations;(c) the transferee company holding a licence containing a retail authorisation pursuant to section 17A of the Water Industry Act 1991;(d) the provision of any information or other such assistance from the relevant undertaker as may be required by the Secretary of State for the purposes of approving the transfer.”
Lord Whitty (Lab)
My Lords, at Second Reading there was bemusement on all sides of the House as to why the Government were being resistant to the concept of exit in the new retail market. I am not sure that the Minister’s words, either on that occasion or in any briefing since, have convinced me as to why, uniquely in this market—or almost uniquely—we should not allow exit.
It is a funny market in which we are trying to encourage new entrants by designating the area in which they should operate, and designating the terms and regulations under which they should operate. We envisage benefits to business and other non-domestic consumers within that market as a result of that competition, and we are assuming that it will bring benefits to a wider part of the whole water structure and water consumers. However, to maximise the effect of a market, there have to be winners and losers; and we are talking about competition and different companies with different forms of experience.
There is not only bemusement around the House about why the Government were resistant to the concept of exit. Out there, many bodies—including Ofwat itself, which I would have thought is fairly significant—are saying that we should allow exit. Although some of the incumbent companies are opposed to it—Water UK has said that, on balance, it is not really convinced by it—some of the major companies are in favour. I have not declared many interests so far, but my current interests are that I am a consumer of two water companies, Thames and Wessex, both of which have written to me and said that they are in favour of providing an exit clause.
Why would you allow a situation to continue in which somebody is supplying part of the non-household retail market but not doing well at it? Remember that there is an obligation on the regulator to ensure that everybody who wishes to be connected to the water supply will be connected to the water supply, so nobody is going to be stranded despite some of the things that have been said. Why should a supplier who is losing customers and presumably losing money, or certainly not making as much money as they had hoped, be prevented from leaving when Ofwat can arrange for somebody else to take over those assets and that market? I do not know of a serious precedent in any other field. We are trying to encourage a degree of churn, with new entrants, new competition and new drive for reducing costs, yet failing companies, or relatively failing companies, are not allowed to pull out.
This is odd, but even odder is what seems to be the Government’s main objection. The Government were kind enough to send us a further explanation, and although there are some other points in it that we do need to take seriously, the main point was that providing for exit would create uncertainty and put off investors. I tried to downplay investor panic when speaking to the last but one amendment, but there are arguments about that. Investors are getting a good return, but why would they want to persevere in an area in which they were not getting a good return, where they were failing, and where on their own internal economic analysis they were being advised to get out? Investors see the UK water market as a pretty good return, a steady return and one that will last a long time. However, there may be a part of that market they are supplying and where they are failing. Customers may be pulling away from them and going to rivals or they may be getting a high level of complaints—one way or another they are failing, and that will show up in their balance sheet eventually. Why would international investors say we absolutely will not invest in England unless we are forced to remain in an unprofitable market?
There seems a fair degree of absurdity in the explanation. That argument for the Government falls. Maybe some strange investor has told somebody in the department or a government adviser that that is the case, but logically, that cannot possibly be the reason. The problem is that the department has got stuck on this. The reality is that it was a bit untidy to allow for exit. New rules and procedures would have to be invented and safeguards built in, and that was not the priority. The priority was to get new people in, not to get people out.
Fair enough, but we have moved on, because a range of people have, as I have said, raised this issue. The Government now have to think again. There are some objections to providing for exit and some concerns about it, but those concerns are covered by the safeguards that are built into the amendment. The Government may want to elaborate on it, but it provides that for exit, Ofwat has to approve it, ensure that there is a substitute supply and make sure that there is no disruption as far the business consumer is concerned, and Secretary of State approval is also needed. That might appear a bit draconian to some investor who desperately wanted to get out. However, it provides a safeguard to counter for example the objection that comes—rather quietly, but nevertheless it does come—from the Consumer Council for Water, which is a bit worried that they would have people left literally high and dry. That could not happen under this system: Ofwat must supply. In a strange situation, the Secretary of State could block it if there was a real reason for thinking consumers might be in danger, whether they are consumers in a competitive market or other consumers affected by the knock-on effect.
Lord Moynihan (Con)
My Lords, I shall speak to Amendments 107 and 132 in my name. I also support Amendment 98 in the name of the noble Lord, Lord Whitty. I have listened to him over the past 10 minutes and there is now no doubt in my mind that his amendment—and, indeed, this group of amendments—is the jewel in the crown of all the amendments that have been tabled so far to the Bill, and that is for a very good reason.
The Bill provides for the opening up of water retail services to competition. That is welcomed by some of the leading water companies and by the regulator, and the concept of exit is welcomed by both. Exit is welcomed north of the border and it has been welcomed by the Defra Select Committee. That is a rare alliance indeed. However, as the noble Lord, Lord Whitty, has stated, it is also welcomed by the investor community. Brought together, they are powerful voices in support of exit in the retail services market.
I shall concentrate my remarks on a number of the points raised by the noble Lord, Lord Whitty, and then summarise, as I see them, the key areas of opposition to date that the Government have put forward and offer some reflections on them.
The first and most fundamental point is that for an effective market there needs to be an ability for new entrants to enter and for existing market players to exit. Customers benefit from more effective and efficient suppliers replacing poorer performing businesses. Allowing incumbent water and sewerage companies to exit from retail services would help ensure successful development of the new retail services market and thus benefit customers. Successful entrants could more quickly acquire critical mass by buying the customers of the less successful or committed incumbent retailers. There appears to be plenty of scope for customer benefit if high-performing companies were to take on the customers of other companies.
Ofwat data have suggested that one water and sewerage company can spend up to twice as much as another providing retail services to each domestic customer. Ofwat reports significant variations between companies’ customer service standards. Simon Less, the senior visiting fellow on regulatory policy, has done some outstanding work. He has clearly made the case at the Policy Exchange that where a company considers its strength is in wholesale water activities, allowing it to sell its retail business would enable its management to focus on wholesale. Water wholesaling and retailing have quite different sets of risks. Exiting retail services would reduce a wholesaling company’s risks from, for example, bad debt. The sector would, overall, be able to access investors with a wider range of risk appetites. Allowing exit from retail services would enable mergers between retail businesses, with benefits from increasing scale and scope.
Not only is the group that I have outlined in favour of exit; let us also reflect for a moment on the Bill. This Bill principally came from Martin Cave’s review—80% to 90% of the Bill was based on this review. He, too, is supportive of this principle. It does not go as far as separation, which does concern many noble Lords. It allows, as the noble Lord, Lord Whitty, has stated, no compulsion, simply an option to exit the retail market. I mentioned that the market itself is supportive of this proposal. It is interesting that Moody’s has come out in support of the proposal. Not only Moody’s, but Macquarie Equities Research has recently published a telling and impressive review of retail exit, in which it states:
“We … see a consolidation of retail functions as positive for both consumers and shareholders. Companies will be under no obligation to exit, but will hold the option to do so … Consumers benefit as ultimately all cost synergies are passed to consumers”.
In placing a value on this, Macquarie concluded that synergies through exit could be worth up to £40 million to just two companies alone. Let me quote its overall conclusion on this:
“Under retail competition, given the size of their bills and the services they require, non-households are the area where”,
you would,
“expect to see greatest activity in providing new, tailored services for customers. Figures from Scotland, where there has been non-household retail competition since 2008, show that customers have saved £35 million.
We estimate that NPV savings for customers in England and Wales could be c. 10x that in Scotland, or £350mn.
This estimate tallies with a cross reference estimate. Total annual costs in household retail is c.£800mn and that non-household is roughly 1/2 that of household: i.e. £400mn. With a 15-20% cost reduction through consolidation we would expect to see total annual savings of c.£60-80mn per annum. If we assume that half of this is shared between consumers and companies, then the benefits of consolidation could be c.£30-40mn per annum, or c.£400mn value. …
Under current proposals, water suppliers will need to hold a ‘licence of last resort’, meaning that if they exit their retail division, they are still potentially liable to provide retail services if the new owner of the retail customers goes into administration.
This means … that water companies are unlikely to exit their retail divisions if they need to maintain the capability of running the infrastructure systems needed in case their customers need to return.
This causes two problems … : firstly in the non-household retail division, the water companies that lose market share, will end up with rising costs relative to their revenues and could potentially see losses increase and continue, and secondly in the household retail area, there can be no cost synergies between the existing 18 water and water and sewerage companies”.
Macquarie’s is a powerful voice in this debate, but I would argue that Ofwat is an even stronger voice. Cathryn Ross, at the Water Bill Committee on 3 December, said:
“Our view is that retail exit for incumbents is a critically important element of a functioning, effective retail market. Particularly important is the fact that if we do not allow incumbents to exit, essentially we are mandating inefficient retailers’ remaining in the market. That will basically be baking in cost that customers will have to pay for, which we can easily avoid”.—[Official Report, Commons, Water Bill Committee, 3/12/13; col. 7.]
What would my amendments do? They would enable incumbent water and sewerage companies to transfer their retail businesses to third parties. They would also secure the benefits of such transfers by ensuring a level playing field and consequently maximising the benefits that could flow to non-household customers. It is important to repeat that this approach does not require or compel incumbents to transfer any or all of their non-household customers. It is an option and, as the noble Lord, Lord Whitty, said, it would be subject to the approval of the Secretary of State and a restriction on its use by the competition authorities, and nothing more.
I said that in closing I would try to answer the issues which, as I understand it, underpin the Government’s position at present. The first was referred to by the noble Lord, Lord Whitty: allowing retail exit could unsettle the investment climate. I hope that the noble Lord, Lord Whitty, and I have demonstrated from both sides of the Committee that that is not a strong argument when investors and companies are actively seeking this change, suggesting that they are far from unsettled by it. As I mentioned, the rating agency Moody’s had previously suggested that this would be a positive change, and the Australian bank Macquarie, as I have quoted, also supports the change. Similarly, a recent research study report entitled “Ready for Retail?” published in Utility Week, which I have gone back to—it was quite wrongly maligned by my noble friend the Minister in his summing up at Second Reading—is a good assessment and is worth looking at closely. It highlights that of those companies that were approached, 76% supported amending the Bill to allow retail exit, so I am not convinced that allowing retail exit is going to unsettle the investment climate.
The second point put forward by the Government is that allowing only non-households to exit the retail market would create a two-tier market where householders could be left stranded with a water company that has signalled a lack of interest in providing customer service. To the extent that there is a concern here, it would be addressed entirely by allowing retail exit for all customers rather than just the non-household element. However, even if only non-household retail exit was facilitated, again this appears to be a weak argument when companies have been forced to provide these services in any event since privatisation. Since companies have no choice but to provide retail services because the licence they signed up to at privatisation requires them to provide an end-to-end, source-to-tap service, we really have no idea about whether they are interested, or not, in providing them now—absent retail exit. Indeed, there is a wide variation in the quality of customer service provided by companies, with some of them improving but still some significant gaps at the moment. This argument is really an argument against the status quo. If we have been comfortable with the current arrangements for the past 20-plus years, it seems odd to start criticising it now.
The third point is that if the Government were to go further and allow retail exit for all customers, households could be passed to a new retailer about which they knew nothing and, unlike business customers, they would have no option to switch if they were unhappy with the quality of the service they received. This point, which has been made by the Government, is true on the face of it, but it is rather a xenophobic one. First, customers have never had any choice over who provides these services because they have simply inherited their local monopoly provider. Again, why is this a concern now? Secondly, while the local branding of companies—Thames Water, Severn Trent Water and so on—gives us a warm sense of local provision by local companies, of course they are not local at all. Most of the companies are owned by Canadian or Australian pension funds, and that ownership changes hands regularly with customers none the wiser about the process. Generally the process is very positive for customers because competition in capital markets brings new investment into the sector, and investors put pressure on the management of these companies to keep costs, and therefore bills, down for customers. Surely the key point is that customers want the lowest prices and the best service, and allowing retail exit provides that most effectively. Poor performers are moved out of the market and good performers can grow their market share, even if they are not the “local incumbent”.
The fourth point mentioned by the Government is that introducing retail exit would require a change or create problems with Ofwat’s price controls. I hesitate to say it, but I think that is a redundant argument. The current price control arrangements apply to regionally specific companies and licences. Ofwat is setting both household retail and non-household retail price control. Allowing this change would be easily accommodated within Ofwat’s price control arrangements; in fact they have been designed for that purpose.
The Earl of Selborne (Con)
My Lords, after those two speeches, there is not much more to be said. For 24 minutes, we have had a very powerful exposé of the astonishing contradictions of a Bill which is here to promote competition and which is trying to implement Professor Martin Cave’s recommendations. The OFT said of orderly exits in the report that successful markets require a right of exit.
In this specific market everyone, including the EFRA Select Committee, has taken a very firm view, which has been forcefully put by the noble Lord, Lord Whitty, and my noble friend Lord Moynihan. The only argument that I have read that puts the contrary view has been the Government’s response to the EFRA Select Committee. That response has been so efficiently demolished that I do not think I need to repeat the argument.
I drew a crumb of comfort from the Minister’s response at Second Reading. He slightly opened the door when he said that it was just possible that the Government might wish to think further on this. We need the ability in the Bill to allow exit at a future date, sooner rather than later. It needs to be in the Bill, because there will not be another water Bill for some time. I hope the Minister will look with approval on these amendments. I do not mind which of the two is accepted; it is the principle which needs to be accepted.
Lord Crickhowell (Con)
My Lords, this has been a remarkable brief debate. I thought that the noble Lord, Lord Whitty, introduced the amendment in a very low key, charitably commenting on the Government’s position. That powerful speech was followed by what I was going to say was a lecture, but certainly a speech, that ought to be read by every civil servant in the department, because it was one of the most impressive speeches—lectures—about market economics and their realities that I have heard for a very long time.
I know my noble friend on the Front Bench knows something about business and will have listened with care. I beg him on this occasion to listen to the realities of the market rather than the detached views of civil servants, who, by their training and nature, may not be as equipped to deal with market realities as my noble friend Lord Moynihan clearly is.
It was only really when I heard the speech of the noble Lord, Lord Whitty, and even more so when I heard my noble friend Lord Moynihan’s speech, that it seemed we were going to deal with this point about uncertainty. I simply cannot believe that people advance that as a serious argument. All the evidence suggests that if you want to have market confidence—the confidence of investors and of the people who advise them—you need to have a clause of this kind. Far from an uncertainty, it is an absolutely essential requirement in order to give the market confidence. On that ground alone, I believe that this amendment simply has to be taken seriously by the Government. I hope that, rather than advancing any arguments that have been put in his papers before the debate, my noble friend makes a very cautious response, takes away my noble friend Lord Moynihan’s speech and demands that his department consider it adequately and fully before we come back again on Report.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)
My Lords, I am very grateful to the noble Lord, Lord Whitty, for moving his amendment and to my noble friends for speaking to theirs, as well as for the debate as a whole on retail exits and for an understanding of the concerns of noble Lords.
Amendment 98, tabled by the noble Lord, Lord Whitty, and Amendments 107 and 132, tabled by my noble friends Lord Selborne and Lord Moynihan, take two different approaches to enabling incumbent water companies to exit the non-household water and sewerage retail markets. Amendment 98 would provide for such exits through regulations produced by the Secretary of State, and Amendments 107 and 132 through transfer schemes produced by incumbent water companies and approved by the Secretary of State.
For completeness, I should be clear from the outset that new entrant licensees may enter and exit both the retail and upstream markets whenever and however they wish. It could be as simple as surrendering their licences to Ofwat, and their customers could then be distributed to other licensees through the supplier of last resort regime introduced by Clauses 31 and 32. Alternatively, they could sell their customers or their infrastructure to other licensees ahead of surrendering their licences. These companies operate only in the competitive part of the market, serving non-household customers who will be able to switch to another retailer if they are unhappy with the service they receive.
However, these amendments deal with the thorny issue of retail exits by incumbent water companies, the quasi-monopolies appointed in each area of England and Wales. We have heard a range of arguments for retail exits at Second Reading, during the passage of the Bill in another place and now this evening. This is a complex issue with far-reaching ramifications for both customers and investors. It is clear that the intention, at least of Amendment 98, is to allow exit only from the non-household market, leaving household customers with the incumbent companies. However, this partial form of exit would leave many questions unanswered about the future relationship between the incumbent water companies and their customers in both the household and non-household sectors. We want our market reforms to lead to real improvements in services for all customers, including of course household customers, and we do not consider that making such a change at this time would be in the overall interest of customers. Before making potentially far-reaching changes to the relationship between all customers and their water companies, we would need to ensure that they were effectively engaged. The Consumer Council for Water, the independent organisation responsible for making sure that the customer voice is heard, supports the Government’s approach to retail exits.
We want to see a successful non-household retail market. The Bill sets a framework for new-entrant retailers to enter the market on an equal footing with the retailers of the incumbent water companies. We expect Ofwat to use its regulatory powers to make sure new entrants can be confident they are competing on a level playing field. Clause 23 introduces a shared obligation between the Secretary of State, Welsh Ministers and Ofwat to take steps to reduce the likelihood of incumbents discriminating in favour of their own retail businesses or associate licensees. However, retail exits are not about delivering a level playing field. They are about some incumbents wanting to exit because they do not want to participate in a competitive retail market and would prefer to stop offering services to any non-household customers in their area. While we might expect there to be a more active market in England from 2017, a scenario in which incumbent companies lose most or all of their customers is highly improbable. Incumbents sitting around while customers disappear is, in our view, an unlikely scenario.
The point we are making is that this is evolution not revolution. Many non-household customers may choose to stick with the incumbent supplier because the incumbent supplier improves its services as a result of these reforms. Where customers choose to switch, we anticipate a growth market where innovation and competition lead to benefits, both environmentally and in customers’ bills.
Incumbent water and sewerage companies are given clear responsibilities for a reason. Their unique status as virtual monopolies requires some commitments from them in return. This means that following a retail exit, the incumbent might still be required to provide retail services to any non-household customers that move into the area, or when new non-household developments are completed, or if the market failed. Incumbents are the default supplier of first and last resort regardless of whether they are able to hive off their existing non-household customers to a licensee. Allowing partial retail exits would also open the door to forced separation. We have already discussed the risks relating to separation.
It was incumbent water companies themselves and their investors that persuaded us of the risks to future investment should separation be forced onto the sector. They told us that forced separation would increase risk to investment and push up costs to customers if they had to renegotiate their finance packages as a result of restructuring their businesses. Neither companies nor their investors have told us that they have reversed their view on this.
Amendment 132 would prevent the new Competition and Markets Authority—but not Ofwat—using these provisions to force separation as a remedy to address issues to do with discrimination. We doubt that such a mechanism would be appropriate. More importantly, for the reasons I have explained, we believe integrated companies that are able to provide services to customers within their area of appointment are the right approach for the time being.
Let us be clear: any decision on separation should be made by Ministers and Parliament. We are not prepared to take the risk of any restructuring, or even the potential for it, destabilising investment or increasing costs or even supply risks to customers. While all these amendments envisage the Secretary of State permitting exits, this will also be open to challenge. I have already said that there are very good reasons for not allowing exits yet.
I hope that noble Lords will appreciate that there is more to this matter than simply allowing some incumbents to exit the market. We are not ruling this out for the future but we have a responsibility to consider all the impacts on household customers and on choice in the competitive markets before putting provisions into law.
The noble Lord, Lord Whitty, and my noble friend Lord Moynihan, suggested that we should allow failing companies to exit. The focus of many comments has been the exit of failing companies. Advocates for exit assume that the large players will swallow up the small. These are the companies, however, that customers value for the quality of their service and are often the most efficient suppliers of retail services. Do we really want to see consolidation that loses these efficient and valued companies?
My noble friend Lord Moynihan referred to Macquarie. I simply say to him that its figures need to be looked at with some care. It assumes complete exit, including from the household market, and that there would be no risk of separation. That is not the model proposed by these amendments and it raises some significant issues about the protection of household customers.
It has been suggested that an OFT report—Orderly Exit, published in December 2012—supported the case for allowing retail exits. That report is about designing continuity regimes to allow orderly exits from the provision of public-facing services without interrupting the delivery of services to customers when a business becomes insolvent or otherwise fails. It is not about allowing a company to decide whether it wants to continue with some of its statutory obligations and to get out of others because it no longer feels it wants to compete. The regulatory regime for incumbent water companies already provides for orderly exit in cases of insolvency and for enforcement purposes.
The deadline for the retail market opening in April 2017 is challenging but achievable under the conditions set out in the Bill at present. That would be put at risk if we were to legislate for further structural changes to the industry at this time. Given what I have said, I hope that the noble Lord will be prepared to withdraw his amendment.
Lord Whitty
My Lords, I am slightly baffled by the Minister’s reply, which seemed to repeat the main arguments that noble Lords all around the Committee have knocked down. I am very grateful for their interventions, particularly the forensic analysis by the noble Lord, Lord Moynihan, of why this is a misunderstanding of markets.
I tried to do a relatively simple thing. We are creating a market in the non-household retail sector and my amendment addresses only that. We are encouraging entry and improvements, and we surely have to recognise that that will drive some people out in normal circumstances. I cannot see what the creation of a market means if you cannot have that churn. The Government seem fairly stuck on this. Some of the things the Minister said really relate to wider considerations and there is nothing in these amendments—certainly not in my amendment—that means forced separation. This is voluntary withdrawal by incumbents from a relatively small part of the market. Their new rivals coming in already have that right so it is not a level playing field. Really, what does this market mean? I know it is small and that we are making changes that are quite new within the water sector, but surely we ought just to be bold enough to allow this. I hope the Minister will recognise that there is a lot of experience in this Committee and in the industry with a consensus for allowing this, subject to the kind of safeguards written into my amendment, which give Ofwat and the Secretary of State huge powers to prevent any catastrophic effect on consumers of any sort.
Just before I stood up, I tried to find the quote from Cathryn Ross of Ofwat that the noble Lord, Lord Moynihan, used. I will just end on that point. If we took the Government’s line—I have lost the quote again now—we would effectively provide for failing companies and bake in cost. The Government do not really want to do that, do they? I hope they will think again. Meanwhile, I will withdraw the amendment.
Lord Grantchester
“( ) The rules under this section will require water and sewerage undertakers to consult with the Council on their draft charges scheme.”
Lord Grantchester (Lab)
My Lords, this amendment would ensure that the Consumer Council for Water would have to be consulted by the water and sewerage undertakers when they drew up their draft charging schemes. The importance of this is that it would allow the CCW to play a role from an early stage and provide the ability for it to flag problems then, before the relevant bills start arriving on customers’ doorsteps and further problems occur.
One example where the Consumer Council for Water had previously challenged a charging plan concerned some companies’ plans to restrict half-yearly payment options for those on direct debit payments. Some customers prefer to pay in that way, as it better enables them to manage their money. The elderly, in particular, may want to retain that option, so it is important that attempts by those companies to stop it were successfully challenged by CCWater. That is just the kind of circumstance that the amendment is designed to pre-empt.
That gives rise to a whole series of problems surrounding direct debits and whether there should be any extra charge for non-direct debit payments, which can be disguised as a discount for direct debits. That may become part of the Consumer Rights Bill, shortly to come before your Lordships’ House. Another example of the benefit that the amendment would create was provided when CCWater negotiated with companies not to backdate charges if a company was at fault for initial error that resulted in substantial backdated charges. That can be as simple as misreading of a water meter by the water company’s employees. It is clear that in such an environment it is always useful, and sometimes essential, for CCWater to have such a say before charging schemes are finalised. It ties in with other steps that we hope to take to protect consumers during the passage of the Bill, such as providing for collective redress where a number of consumers have been subject to detriment.
The amendment is short and simple. I therefore hope that the Minister will find that it makes sense to include it in the Bill. I beg to move.
Baroness Northover (LD)
My Lords, the noble Lord, Lord Grantchester, has already highlighted the important work being done by the Consumer Council for Water, a view with which we very much concur. As he laid out, the purpose of his amendment is to require water and sewerage undertakers to consult the Consumer Council for Water on their draft charges schemes. That is clearly a reasonable objective. I therefore confirm that the Consumer Council for Water is in fact already routinely consulted by water companies on their charging schemes. That is in addition to the important work that CCWater undertakes to ensure that the consumer voice is heard during the price review process.
The noble Lord is right to say that the protection of consumers is essential, and never more so than in a sector with monopoly characteristics, such as water and the sewerage sector. CCWater plays a vital role in working with the water companies to ensure that their charges schemes do not have unintended consequences for hard-pressed customers, and we want that to continue.
I am therefore very happy to be able to reiterate the assurances already given in another place that the charging guidance produced by the Government will ensure that consumer groups such as CCWater continue to be properly consulted on company charges schemes in future. CCWater has identified its three top priorities in relation to the Bill. The third of those is that the charging guidance,
“should reflect that CCWater should be consulted by each company on its charges scheme and any changes to it before they are implemented”.
Once more, I confirm that the charging guidance produced by the Government will ensure that CCWater continues to be consulted on charges schemes. With that reassurance, I hope that the noble Lord will be content to withdraw his amendment.
Lord Grantchester
My Lords, I am very grateful to the Minister for that assurance. The provision should indeed, as a minimum, be included as statutory guidance. That is very well accepted by the Consumer Council for Water. However, we have received briefing from it that it is particularly keen that that should be written into the Bill. We will consult further and reflect on the Minister’s words but, in the mean time, I beg leave to withdraw the amendment.
The Earl of Selborne
“Right to discharge water
(1) A sewerage undertaker may discharge water from a relevant pipe or from a drainage system constructed pursuant to section 114A of the Water Industry Act 1991 into any inland waters, whether natural or artificial, or any tidal waters.
(2) In this section “relevant pipe” has the same meaning as in section 158 below.
(3) A sewerage undertaker shall pay compensation to the owner or occupier of any land who suffers damage by reason of the exercise by the authority of any right under subsection (1) above.
(4) This section is without prejudice to any enactment the purpose of which is to protect water against pollution.”
The Earl of Selborne
My Lords, Amendment 108 refers to the rights to discharge and its purpose is to support the installation of sustainable urban drainage systems, or SUDS. It is generally recognised that SUDS are part of the long-term solution towards the sustainable use and drainage of water. They improve surface water management and reduced the risk of flooding, and they may include rain gardens, permeable paving, swales and the like. They are designed to collect water and release it slowly back into the environment.
Clause 21, which we have just agreed, clarifies the function of a sewerage undertaker under the Water Industry Act 1991 to include the building and maintenance of SUDS features, so we are here to promote SUDS and the Bill does that. However, there is a problem. To install a SUDS scheme an undertaker, a water company or a drainage company has at present to negotiate the right of discharge. Without such a right or with the prospect of costly negotiations and litigation—there has been plenty of that—there is little incentive to deliver SUDS schemes as opposed to surface water sewers.
The amendment would remove this uncertainty, which has led to litigation and to a lack of incentive for the installation of SUDS. It helps sewerage undertakers to deliver SUDS schemes. We are of course awaiting secondary legislation, which is a separate issue, on the maintenance and the issues with local government on SUDS. That apart, this deals with a much more fundamental issue. It would resolve the legal uncertainty that has arisen since 1989, when a previous water Bill removed the right of sewerage undertakers to discharge. The amendment would therefore restore the legal position to where it was before 1989, when sewerage undertakers had a statutory right, as highway authorities still have, to discharge pure water into any watercourse. I emphasise that it has to be pure; no one is suggesting that there should be a licence to pollute in any shape or form.
At the moment traditional pipe discharges, which are inferior in many respects to SUDS, as I have explained, can be acquired by compulsory purchase powers. However, again, under the Bill we are not extending compulsory purchase powers to SUDS. I am not suggesting that they should be but that once you have the right to discharge, these powers will give an incentive for SUDS to be installed. That incentive is greatly needed, and I beg to move.
Lord De Mauley
My Lords, I am grateful to my noble friend for raising the importance of sustainable drainage systems and I agree with him on this. I can confirm—my noble friend referred briefly to this—that we plan to bring forward the secondary legislation needed to implement Schedule 3 of the Flood and Water Management Act 2010 by April this year, and to commence it at the earliest possible opportunity.
I appreciate, also, that the issue of the right to discharge water is important for sewerage undertakers. However, this is not, by any means, a straightforward issue and there are more interests which would need to be taken into consideration, including the impact on landowners and bill payers. The amendment would allow the discharge of water without express consent. It suggests that compensation should be paid if there is any damage but that no permission needs to be sought. Interference with third parties’ land rights would need careful and detailed consideration.
Current case law suggests that there is no general right to discharge without compensation under the Water Industry Act 1991, for sewerage undertakers or others. Private parties who wish to discharge water on to other parties’ land or into other parties’ assets such as lakes, canals or rivers have to negotiate an agreement to discharge water with the owners.
As my noble friend knows, a challenge to the existing case law on whether there is a right to discharge has been made and will go before the Supreme Court in May. I am sure noble Lords understand that it would not be appropriate to comment on that case. In the circumstances, I ask my noble friend to withdraw his amendment.
The Earl of Selborne
I am grateful to my noble friend. The fact that this has led to such protracted, expensive and time-consuming litigation demonstrates that the law was left in an ambiguous situation—to put it at its kindest—after 1989. The issue clearly has to be resolved but whether the Supreme Court is the right organisation to do so is another matter. I think it would be more appropriate for it to be done by an appropriate Act of Parliament. This is not asking for something particularly unusual. As I said, highways authorities have the right to discharge at the moment. Before 1989, sewerage undertakers had the right to discharge. If landowners found themselves inconvenienced, it would only be in the sense that they were reverting to a situation to which they had been quite accustomed.
I have heard what the Minister says and accept that, with a case in the Supreme Court, he is constrained from discussing the detail. I therefore beg leave to withdraw the amendment.