House of Commons

Wednesday 26th February 2014 Commons Chamber

Wednesday 26 February 2014

The House met at half-past Eleven o’clock

Prayers

Wednesday 26th February 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 26th February 2014 Commons Chamber

The Secretary of State was asked—

[Ann McKechin (Glasgow North) (Lab)]

1. What steps she is taking to engage with local political leaders on reaching agreement to enable the National Crime Agency to operate in Northern Ireland.

[Mr Iain McKenzie (Inverclyde) (Lab)]

4. What steps she is taking to engage with local political leaders on reaching agreement to enable the National Crime Agency to operate in Northern Ireland.

[The Secretary of State for Northern Ireland (Mrs Theresa Villiers)]

It is important for the security of people in Northern Ireland that the NCA should be fully operational there. I continue to raise this issue with the Northern Ireland parties, the Justice Minister and the Chief Constable of the Police Service of Northern Ireland.

[Ann McKechin]

I thank the Secretary of State for her reply, but she will be aware of the concerns about the issue of human trafficking, which is a problem across the United Kingdom, including trafficking from Northern Ireland into Scotland. Can she confirm that despite the fact that the National Crime Agency is not yet operating in Northern Ireland, the PSNI does have the full resources to enable it to tackle this heinous crime?

[Mrs Villiers]

I fully share the hon. Lady’s sentiments about the horrific nature of the crime of human trafficking. Because it raises immigration questions, the NCA does have power to act in this area within Northern Ireland, so I can give her the assurance that it is providing the PSNI with all the support that is required on those matters. It is on crimes within the devolved sphere that the NCA’s capacity is currently restricted.

[Mr McKenzie]

At the moment, the NCA cannot carry out police operations in Northern Ireland, and last year the Police Service of Northern Ireland had to draft in officers from around the UK. Will the Secretary of State confirm her intention to see a fully staffed Police Service of Northern Ireland above the minimum number identified by the Chief Constable, before the marching season and before other commemoration parades take place?

[Mrs Villiers]

The Government have provided significant extra funding for the PSNI—£200 million in the current spending review and £30 million in 2015-16. I continue to support and encourage the discussions between the Department of Finance and Personnel, the Department of Justice and the PSNI on the Executive’s contribution to police funding. It is also important that the NCA provide as much support as it can to the PSNI, within the constraints it is under because of the lack of a legislative consent motion.

[Neil Carmichael (Stroud) (Con)]

Will the Secretary of State assure the House that she will not entertain any ideas of amnesties for terrorists, unlike the last Labour Government?

[Mrs Villiers]

This Government do not support amnesties for terrorists, and we oppose the legislation put forward by the previous Government which would have amounted to an effective amnesty.

[Mr Robert Buckland (South Swindon) (Con)]

On the prevention and detection of crime, does my right hon. Friend share the shock of many of us that the Executive seem to have interfered in the Downey case and others and in the actions of the police and the prosecution? Will she assure me that it will not be the policy of this Government to blur the lines between the Executive and the judicial process in an unacceptable way?

[Mr Speaker]

Quite an ingenious effort, but I would remind the Secretary of State that the question is about the National Crime Agency.

[Mrs Villiers]

I can assure my hon. Friend that the Government recognise fully the importance of ensuring that prosecution decisions are made independently of the Executive.

[Mr Nigel Dodds (Belfast North) (DUP)]

Clearly, the failure to operate the National Crime Agency as a result of republican blocking of that is a disgrace and it is undermining policing and justice. But equally, the Downey decision has undermined confidence in policing and justice. Will the Secretary of State now publish the numbers of letters that have been sent to these people—the names, the contents of these letters; and would she now rescind this disgraceful and shameful back-door scheme?

[Mrs Villiers]

I fully understand the right hon. Gentleman’s concerns, and it was clearly a very difficult day for the families yesterday. As I published in my written ministerial statement, we believe that around 200 cases were processed through this scheme. The individuals were sent factual letters indicating whether or not they were wanted for terrorism offences. It was not an amnesty and it was never intended to be such. There was always the recognition that if further evidence of further offences was produced, a prosecution was then a possibility. The reason for the outcome of the Downey case was that unfortunately a grave mistake was made, when Mr Downey was sent a letter saying he was not wanted for offences when in fact he was.

[Mr Dodds]

The grief, the words of devastation from the families of the soldiers concerned in the Hyde park bombing are an indictment of what is going on. There is outrage, not just in Northern Ireland but right across the country, about this—how an official’s letter can trump due process of law in this country. Will the Secretary of State realise how serious this is, not just for the process of law and order, but for the very stability and continued existence of devolution in Northern Ireland, where the Assembly has full responsibility for policing and justice, but these facts were withheld from the Justice Minister and the First Minister? This has very, very serious implications for devolution.

[Mrs Villiers]

I am very much aware of the very serious implications this case has, and they have also been conveyed to me by the First Minister, whom I look forward to meeting this evening to discuss this matter with.

As I announced yesterday, the Northern Ireland Office, along with the PSNI, is undertaking an urgent check of all letters that were issued under the scheme to establish whether any further mistakes were made that could lead to the same outcome that was witnessed in relation to the Downey case. It is also vital that we get to the bottom of why such a very serious mistake was made within the PSNI and why the PSNI did not draw it to the attention of the Northern Ireland Office, and of course I will be discussing this matter with David Ford and the First Minister.

[Chris Evans (Islwyn) (Lab/Co-op)]

2. What assessment she has made of the effects of the reduction in public sector jobs in Northern Ireland.

[The Minister of State, Northern Ireland Office (Mr Andrew Robathan)]

The long-term sustainable answer for the Northern Ireland economy must be a private sector revival. There have been significant labour market improvements over the last year and private sector jobs are up by more than 10,000 from the beginning of 2012.

[Chris Evans]

I thank the Minister for that response. Ireland, like Wales, has traditionally been reliant on public sector jobs. It is estimated that 26,000 public sector jobs in Northern Ireland will be lost by 2017, so has the Secretary of State had a chance to study the active industrial policy of Wales, which in the last week has seen jobs attracted to Pinewood studios in Wentloog and to General Dynamics UK in Oakdale in my constituency?

[Mr Robathan]

Actually, I have not studied the experience of Wales, although, as the hon. Gentleman will know, my family comes from his constituency. However, through the Northern Ireland Executive, we have agreed the economic pact, which understands the need to rebalance the Northern Ireland economy further towards private sector involvement and less towards public sector employment. For instance, in terms of Pinewood studios we have got a rather interesting programme called—what is it called?

[Mr Speaker]

While the Minister is thinking about it, we will call a supplementary question. We are deeply obliged to the Minister.

[Mr Philip Hollobone (Kettering) (Con)]

12. What steps are being taken to encourage Northern Ireland to be plugged in to the digital economy?

[Mr Robathan]

May I just say that the programme a “Game of Thrones” is made in Belfast now? I do not recommend it personally, Mr Speaker, having watched the lot.

We are taking steps on the digital economy and indeed, throughout the United Kingdom, we are going for digital by default. We are very keen that more is done in Northern Ireland in terms of the use of internet and digital in general. We are very clear about that, but this matter is the responsibility of the Northern Ireland Executive and we help them with it through the economic pact.

[Ms Margaret Ritchie (South Down) (SDLP)]

Contrary to the views of the Minister, and given the importance of public sector jobs to the local economy, what further measures will be taken to protect and retain Driver and Vehicle Agency jobs in Northern Ireland as well as Her Majesty’s Revenue and Customs jobs in Newry?

[Mr Robathan]

The hon. Lady, for whom I have a great respect, has raised this matter with me before. What I would say about both public agencies is, first, they are not our responsibility: the DVA is, of course, the responsibility of the Department for Transport; and HMRC is the responsibility of HMRC. However, I would also say that we need to see in Northern Ireland and elsewhere—this refers to the last question—

[Stephen Pound (Ealing North) (Lab)]

DVLA.

[Mr Robathan]

It is the DVA in Northern Ireland.

In relation to the last question, those of us in the rest of the United Kingdom, for instance, register our vehicles online; I certainly do and I guess most other Members of the House do. People need to be able to do that in Northern Ireland as well. Changing working practices means that there will be changes in employment. We do not want to see anybody out of work, but we do need changes in working practices.

[Jim Shannon (Strangford) (DUP)]

To follow on from the question by the hon. Member for South Down (Ms Ritchie), the loss of the DVA jobs in Coleraine and the loss of HMRC jobs are very specific to Northern Ireland and will affect the economy. What discussions has the Minister had with Arlene Foster, the Minister of Enterprise, Trade and Investment, to ensure that private enterprise can create jobs for those who are losing jobs?

[Mr Robathan]

There is a real drive towards getting more private sector jobs. For instance, only this month EE, the mobile phone company, has said that it will create 250 jobs in Northern Ireland; my hon. Friend will know that Arlene Foster and Ministers from the UK Government have visited the Singapore air show, and they hope to bring back potential contracts worth £479 million with Bombardier; and 100 jobs are being created with a £32 million investment in County Antrim. We are keen to get private sector jobs up there. We are getting private investment—the Government are on to exactly that. The economic pact and the investment conference last year are driving this forward, and we very much hope that by working together with the Northern Ireland Executive we get better employment.

[Pat Glass (North West Durham) (Lab)]

3. What steps she is taking to ensure a positive outcome from the Haass talks; and if she will make a statement.

[Fiona O'Donnell (East Lothian) (Lab)]

8. What recent progress has been made on the Haass talks.

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

10. What steps she is taking to ensure a positive outcome from the Haass talks; and if she will make a statement.

[The Secretary of State for Northern Ireland (Mrs Theresa Villiers)]

The UK Government continue to support and encourage party leaders in Northern Ireland as they pursue the Haass issues. A cross-party agreement on flags, parading and the past would deliver significant benefits for Northern Ireland.

[Pat Glass]

Next month, the Prime Minister and the Taoiseach meet for their second annual review of progress on the joint agreement. Does the Secretary of State agree that that offers an opportunity for both leaders to send out a strong message to all the parties in Northern Ireland about their commitment to securing agreement and advances on all the issues covered by Haass and papers, including the past?

[Mrs Villiers]

Both the Irish and the UK Governments are strongly supportive of the efforts made by the Northern Ireland parties to reach agreement on those three matters, including the past. I cannot anticipate exactly what will be in the communiqué, but I am sure that the Prime Minister and the Taoiseach will continue to express their support for the process, and the Tanaiste, Eamon Gilmore, continues to be in close touch with me on these matters.

[Fiona O'Donnell]

Does the Secretary of State agree with Amnesty International that any mechanism for dealing with the past has to be fully human rights compliant, not a patchwork? What legislation and resources does she think will be required to achieve that?

[Mrs Villiers]

Of course, any new structures would have to be compliant with the UK’s obligations under the Human Rights Act. As for resources, as I have said on a number of occasions, the UK Government would primarily expect the block grant given to the Northern Ireland Executive to be the source of funding for new arrangements on the past. If there is a proposal for additional funding, that would be considered seriously.

[Mr Bain]

Does the Secretary of State agree that if Northern Ireland is to have a prosperous future, it needs to reach full accommodation with the events of its past? What steps will she personally take to ensure that the progress that was made in the Haass agreement is carried forward into full agreement in future?

[Mrs Villiers]

I continue to urge the parties to seek a way forward and to set out the benefits that an agreement on flags, parading and the past would bring to Northern Ireland. I continue to engage closely with the Irish Government on these matters, and I shall continue to do all those things.

[Patrick Mercer (Newark) (Ind)]

What impact does the Secretary of State believe the Downey decision will have on the Haass talks?

[Mrs Villiers]

As the House has already heard, the Downey case raises very serious issues. It is absolutely right that we all reflect on the consequences of that decision, and that there is a thorough investigation into the grave mistake by the PSNI which, I am afraid, led to the outcome in the case yesterday.

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

It has been suggested that a culture of trust needs to be developed. Will my right hon. Friend consider looking again at what are effectively the amnesties that were handed out? We need to look at that if Northern Ireland is to prosper in future.

[Mrs Villiers]

The scheme was created by the previous Government and, to be fair to them, it was never an amnesty, as I have explained to the House. These letters set out in a factual way whether individuals were believed to be wanted by the police in Northern Ireland or elsewhere in the UK. The current Government looked at the scheme in 2012 and decided that future inquiries should be sent to the devolved Administration in line with the devolution of policing and justice.

[Bob Blackman (Harrow East) (Con)]

Will my right hon. Friend report on whether there have been any proposals for a timetable to be put in place so that we can progress the Haass talks and reach a conclusion that will be satisfactory for all parties?

[Mrs Villiers]

There has been much discussion of deadlines and timetables. I certainly think that it would be very helpful if the parties felt able to put together a road map towards reaching a full agreement, but I fully appreciate how difficult these issues are. As we have heard this morning, they have probably been made more difficult to resolve by the events of the last 24 hours.

[Mr Peter Hain (Neath) (Lab)]

On the past and the Downey case, I agree with the Secretary of State that there was never any question of an amnesty. May I also say that I make no apology for being part of a process that brought Northern Ireland from the hideous horror and evil of the past to the position where old enemies have now governed together for seven years in a stable, devolved Government—no apology for that at all? Just as we had to do deals with my Democratic Unionist party friends sitting over there to get to this point, so we have had to do deals with Sinn Fein to get to this point, and that was necessary for the negotiations to succeed and for peace to be established.

[Mrs Villiers]

Clearly, many difficult decisions were made as a result of the peace process. Some aspects of the Good Friday agreement were hard to swallow for many in the House, but I think that it is important that we reflect on the implications of the John Downey case and how a very serious mistake came to be made. Of course, as I have said to the House, we are urgently checking to ensure that similar mistakes were not made in any other cases.

[Dr William McCrea (South Antrim) (DUP)]

It is rather disgraceful that any former Secretary of State could compare the DUP to terrorists. Has not the Downey revelation in reality made the Haass talks a farce and destroyed any process Haass has ever started? Does it not erode confidence among the general law-abiding community, and is this not indeed a dark day for justice as far as the United Kingdom is concerned?

[Mrs Villiers]

My primary thoughts are with the families of those who died on that terrible day in July 1982. This whole episode must have provoked very painful memories. I am sure that it is a source of sadness and regret for them, as it is for us, that no one has been brought to justice for the Hyde park bombing. Despite the long shadow that this case is likely to cast, I hope that the Northern Ireland parties will continue to work together to see whether a solution can be found to deal with the legacy of the past in Northern Ireland.

[Paul Murphy (Torfaen) (Lab)]

Can the Secretary of State convince the House that there is still momentum left in the talks started by Ambassador Haass?

[Mrs Villiers]

As I have said, these are hugely important matters. It would be of great benefit to Northern Ireland if an agreed way forward could be found. Some very important work has been going on in recent weeks between the party leaders, with real dedication to try to find a way forward. There is no doubt that finding a way forward will now be more difficult, given the events of the past 24 hours, but I continue to encourage the parties to do so.

[Mark Durkan (Foyle) (SDLP)]

Does the Secretary of State agree that a key reason why we must deal with the past is the need to assure people that we did not end the dirty war just to end up with a dirty peace? Is that not even more imperative after yesterday’s revelations, which prove that some of us were right when we warned the right hon. Member for Neath (Mr Hain) and others that they were blighting the peace process with their penchant for side deals, pseudo-deals, sub-deals, shabby deals and secret deals, which are now doing fundamental damage to the Haass process and to the process more widely?

[Mrs Villiers]

I know that the hon. Gentleman was one of the foremost opponents of Labour’s proposed legislation on an amnesty, which was also opposed by both coalition parties. I cannot agree with him on his characterisation of Northern Ireland’s troubles as a dirty war. I believe that the vast majority of members of the Royal Ulster Constabulary and the military served with great integrity, distinction, courage and bravery, and we owe them all a huge debt of gratitude for creating the conditions in which peace was eventually found.

[Mr Ivan Lewis (Bury South) (Lab)]

Does the Secretary of State agree that the issues raised by the judgment in the John Downey case underline the importance of the Government supporting the all-party talks to reach an agreement that puts truth and justice for victims at the heart of dealing with the past? Can she confirm that the current Government have sent out a number of letters to on-the-runs as part of the scheme covered by the Downey case? Today it is important that above all else we remember the soldiers who lost their lives in Hyde park on that dreadful day in July 1982 and the suffering that their families continue to endure. That act was heinous and, like all terrorist atrocities, totally unjustifiable. The PSNI is right to apologise to the families of the victims and commit to an investigation into how such a horrendous error could have occurred.

[Mrs Villiers]

I agree that a way forward on the past must put victims at its heart. I can give the hon. Gentleman an assurance that I remain very supportive of efforts through the Haass process to find a way forward. I can confirm that 38 cases were dealt with by the current Government under the OTR administrative scheme. That was reviewed by the current Government, who decided that it was better for any future cases to be referred to the devolved authorities, in line with the devolution of policing and justice, but we did process a number of cases supplied prior to the general election. I also believe that it is absolutely vital that the PSNI investigates thoroughly why things went so badly wrong in relation to this case and that all of us in this House convey our deep and grave sympathy to the victims of the terrible atrocity that took place in Hyde park.

[Mr Speaker]

Order. First, there are far too many noisy private conversations taking place in the Chamber. Secondly, I very politely ask the Secretary of State please to speak up a little. Mr Lewis, I am sure that the second question will be much shorter than the first.

[Mr Lewis]

At a time when the Haass talks are seeking to focus on truth and justice for victims and their families, will the Secretary of State give a commitment today that the Government will stop buck-passing between Departments and prevent the Survivors for Peace programme going to the wall? At the invitation of Labour’s excellent parliamentary candidate in Warrington, Nick Bent, I had the privilege of visiting the Warrington peace centre last week. The Tim Parry Johnathan Ball Foundation for Peace, under the inspirational leadership of Colin and Wendy Parry, does a tremendous job and deserves support from this Government.

[Mrs Villiers]

I, too, have had the pleasure of visiting the peace centre; Colin Parry has done a wonderful job there. I am keen to work with my excellent hon. Friend the Member for Warrington South (David Mowat) to see whether we can find a way forward on the victims’ support charity. I assure the House that the future of the peace centre is secure; I understand that it is separate from the victims’ support charity. However, I fully appreciate the importance of seeking to find a way forward to resolve the difficulties that Colin Parry’s charity faces.

[Valerie Vaz (Walsall South) (Lab)]

5. What recent discussions she has had with the family and representatives of Pat Finucane.

[The Minister of State, Northern Ireland Office (Mr Andrew Robathan)]

Neither my right hon. Friend the Secretary of State nor I have held any discussions with members of the Finucane family or their representatives recently.

[Valerie Vaz]

It is 25 years since the death of Patrick Finucane, and the Da Silva inquiry found shocking levels of state collusion. When will the Minister act on the growing calls for a public inquiry so that there can be justice for Patrick Finucane?

[Mr Robathan]

Today, when people have been speaking of the four soldiers murdered in Hyde park, one of whom I knew—and let us not forget the seven bandsmen murdered in Regent’s park at the same time—we should remember that the overwhelming majority of soldiers, RUC and Ulster Defence Regiment, served with distinction and with honour, as Desmond Da Silva said. Secondly, let me point out to the hon. Lady that the Prime Minister has already apologised twice for the collusion in the murder of Pat Finucane, which was of course disgraceful. The review by Desmond Da Silva found, I think, all the facts that needed to be known. The Secretary of State has indicated to the family that she will meet them should they wish to see her. However, there is a judicial review going on which queers this pitch slightly.

[Sir Tony Baldry (Banbury) (Con)]

Does my right hon. Friend agree that the House can have full confidence in the justice and objectiveness of Sir Desmond Da Silva’s report, Sir Desmond Da Silva being a very distinguished international lawyer who has prosecuted war crimes in Sierra Leone, with the rank of Under-Secretary-General of the United Nations, and recently led the inquiry into war crimes in Syria?

[Mr Robathan]

I think we can all agree with that. Sir Desmond is a very distinguished lawyer who found out the facts. As I understand it, Mr Ken Barrett has already been convicted of the murder of Pat Finucane. I do not think that a public inquiry like the Saville inquiry would reveal more than we know already.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The Government have belatedly taken a very forthright view on the inquiry on the Pat Finucane case. Does not the firestorm around the Downey case ensure that the Government should take a position, stick to the position, make it clear that they are not moving from the position, and allow everyone to know that?

[Mr Robathan]

I think the firestorm to which the hon. Gentleman refers is one on which we should all reflect. It is important that we move forward. An enormous amount has been achieved in terms of peace in Northern Ireland, and I am concerned about where such actions as took place yesterday may actually lead.

[Alex Cunningham (Stockton North) (Lab)]

6. What recent assessment she has made of the effect of the Government’s economic policies on youth unemployment in Northern Ireland.

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

7. What recent assessment she has made of the Government’s economic policies on youth unemployment in Northern Ireland.

[The Minister of State, Northern Ireland Office (Mr Andrew Robathan)]

Specific measures to address youth unemployment in Northern Ireland are the responsibility of the Executive there. The Government’s efforts to reduce the largest structural deficit in UK peacetime history are now bearing fruit. This, more than anything, will help deliver a sustainable economic recovery and so directly assist young people to find employment.

[Alex Cunningham]

But the fact remains that this Government continue to fail the young people of Northern Ireland even more than the young people of the rest of the country. Youth unemployment, at 23.8%, is a full 25% higher than the UK average, and that is bad enough. It is clear that special measures are required; does the Minister have anything specific in mind?

[Mr Robathan]

We are all concerned about youth unemployment; we must be. However, the hon. Gentleman should know that under the previous Government the number of under-25s in work dropped from 124,000 to 107,000. Under this Government, the number of under-25s in work has risen, and over 3,000 young people in Northern Ireland have come off benefits. It is a growing and improving economy across the United Kingdom that will deliver work to young people.

[Debbie Abrahams]

I am sorry, but that is just not good enough. We are in danger of seeing a lost generation. Nearly half of those who are unemployed have been unemployed for more than 12 months. What specifically are the Government doing so that we do not lose another generation of young people?

[Mr Robathan]

As I have, said, we are all concerned about youth unemployment, but this is a matter for the Northern Ireland Executive, not for us, because we have devolved that responsibility. It is a rising tide of economic recovery that will bring work to young people. The chief executive of the Prince’s Trust in Belfast has said:

“We’re quietly optimistic about the economy improving this year…it will take months if not years to filter through to…young people”.

That is what we want to see happening.

[Michael Fabricant (Lichfield) (Con)]

My right hon. Friend will be aware that next week is the beginning of national apprenticeship week. What steps is he taking to promote that in Northern Ireland to encourage the employment of young people?

[Mr Robathan]

As I have said, this is a devolved matter, but I am delighted to say that there are high-tech and excellent jobs coming forward from companies like Bombardier and Thales which will have apprenticeships, which we applaud.

[Stephen Pound (Ealing North) (Lab)]

The Secretary of State will be aware that my hon. Friend the Member for Bury South (Mr Lewis) recently visited the Secret Garden project, which employs young people with learning disabilities on the Hillsborough estate. They face redundancy. Will the Secretary of State reconsider her decision not to compensate the charity for the £400,000 investment it made in improving the site, and ask Historic Royal Palaces to consider retaining its involvement?

[Mr Robathan]

We all, of course, applaud any work with people with learning disabilities. However, that does not mean that this is the best way in which people can be served by a charity in Hillsborough, which would diminish the opportunity for Historic Royal Palaces to look after Hillsborough castle. I question the figure of £400,000 and think we should go back and look at the accounts more carefully.

The Prime Minister was asked—

[Graeme Morrice (Livingston) (Lab)]

Q1. If he will list his official engagements for Wednesday 26 February.

[The Prime Minister (Mr David Cameron)]

This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House I shall have further such meetings later today.

[Graeme Morrice]

I thank the Prime Minister for his answer, but I think we should congratulate Team GB on its tremendous success at the recent winter Olympics.

This week HSBC announced staff bonuses of £2.3 billion and a 140% pay rise to its chief executive. When ordinary British families face a cost of living crisis and too many people languish on the dole, is it not time for this Government to listen to Labour and to tax bank bonuses to get our young people back to work?

[The Prime Minister]

Let me join the hon. Gentleman in congratulating Team GB on its best medal performance at a winter games since 1924. It was a huge honour to welcome them to Downing street, where I had an explanation of the tasks of skeleton bobsleighing and, indeed, curling. Our congratulations go to everyone involved and all those who helped to train them.

Bank bonuses are well down from the appalling situation that was left by the previous Labour Government, but what we need to see is the proper control of all forms of pay and bonuses. What I do not want to see, and what I think we would get from the Labour party, is a focus only on bonuses, because, of course, you can claw back a bonus, but you cannot claw back pay. We do not want to go back to the days of Fred Goodwin, where you could be paid well for an appalling performance.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Q2. Does the Prime Minister recognise that it is part of the job of Church leaders to challenge Governments about poverty? Will he discuss with them measures that can help people out of poverty, like the pupil premium, cutting tax on low pay and measures to help troubled families? There is nothing particularly moral about pouring even more borrowed money into systems that can trap people in poverty and dependence on state benefits.

[The Prime Minister]

My right hon. Friend, who is himself a distinguished churchman, talks perfect sense. There is nothing moral about running up huge deficits and out-of-control welfare bills. If we do not deal with those problems the whole country will be poorer. We should listen to the words of George Carey, the former Archbishop of Canterbury, who said that

“the churches should beware of the dangers of blithely defending a gargantuan welfare budget that every serious politician would cut as a matter of economic common sense.”

I think that serious politicians have to engage with this, and that should go for everybody.

[Edward Miliband (Doncaster North) (Lab)]

I join my hon. Friend the Member for Livingston (Graeme Morrice) and the Prime Minister in congratulating Team GB on a brilliant performance at the winter Olympics.

As the immediate threat of floods passes, there are still thousands out of their homes; parts of the Somerset levels are still under water; and hundreds of businesses and farms are still struggling to recover. The Committee on Climate Change, the House of Commons Library and the UK Statistics Authority have all now said that Government investment in flood defences has fallen. In the light of this and of the events we have seen, does the Prime Minister think it is right to revisit the plans for investment in flood defences?

[The Prime Minister]

We will look very carefully at the plans for flood defences, but of course we have set out spending figures all the way to 2020, not all of which are fully committed, which are major investments in flood defences. As I said two weeks ago, as the waters recede and as the Environment Agency and others can look at what happened, we can review and see what new measures might be necessary. Let me just repeat the point that in this four-year period, and indeed in this Parliament, overall spending on flood defences has gone up.

[Edward Miliband]

I am afraid that the figures the Prime Minister is quoting are phoney, and I believe he knows it. This is what the UK Statistics Authority says—[Interruption.] I know that Government Members do not want to hear it, but it says:

“government funding for flood defences was lower in both nominal and real terms during the current spending period than during the last”.

The only way to claim otherwise is by ignoring inflation and claiming credit for the money that other organisations—other than Government—spend. Why does the Prime Minister not admit it? They have cut flood defence spending, and he has been caught out.

[The Prime Minister]

The fact is that in the period from 2010, when I became Prime Minister, to 2014, the spending has been £2.4 billion—more than the £2.2 billion in the previous four years. In the five-year period of this Parliament, during all of which I will be Prime Minister, the spending is higher than for the previous five years. Those are the facts.

I have to say to the right hon. Gentleman that I think having this debate is slightly pointless. The whole country should be coming together to deal with flood defences. The fact is that from the moment he turned up in a flooded village with the Labour candidate alongside him, he has completely misjudged the mood of the country.

[Edward Miliband]

First, let me say to the Prime Minister that if it is a simple choice between the UK Statistics Authority and him, people will believe the UK Statistics Authority on what has happened. The assessment of how much to invest in flood defence depends significantly on an assessment of the risks posed by man-made climate change. In opposition, he said this about climate change:

“It’s easy to do the softer things like ride your bike, visit glaciers and rebuild your house to make it green”—

it is he who said it—

“but it’s only clear you mean it when you do the tough things as well. Like telling the truth about climate change.”

So what is the truth about climate change?

[The Prime Minister]

The truth about climate change is that this Government have a programme to reduce carbon right across our economy. We started with the Government themselves: compared with the Government the right hon. Gentleman left in 2010, when he was Energy and Climate Change Secretary, the Government’s own carbon emissions are down 14%.

Let me just return to the issue of flood defence spending, because I think the people of this country will want to know this. The right hon. Gentleman is committed to a zero-based spending review. [Interruption.] “Yes, we are,” says the shadow Chancellor in an unusually helpful intervention. A zero-based spending review means that the Opposition cannot pledge to match the flood spending we are making in 2016, 2017, 2018 and all the way to 2020. The people of this country have absolutely no guarantee that they will take either climate change seriously or flood defences seriously.

[Edward Miliband]

What total nonsense, and the Prime Minister knows it. It is very interesting, because someone who in opposition wanted to talk as much as he could about climate change is now desperate to get off the subject. I asked him a question: will he just set out for his party and for the country his views on man-made climate change?

[The Prime Minister]

I believe that man-made climate change is one of the most serious threats that this country and this world face. That is why we have the world’s first green investment bank here in Britain. That is why, unlike in the 13 wasted years of Labour, we are building the first nuclear power station for 30 years in this country. That is why we have cut the carbon that is emitted by the Government by 14% since coming to office. That is why we have set out, year after year, carbon budgets for this country. The Opposition talk a good game, but it takes people to come in and govern effectively to deal with it.

[Edward Miliband]

Excellent; we are getting somewhere. I agree with what the Prime Minister said about the importance of climate change. The reason this matters is that people in the most important positions in his Government are going around questioning climate change. The Secretary of State for Environment, Food and Rural Affairs has said:

“People get very emotional about this subject and I think we should just accept that the climate has been changing for centuries,”

and he refuses to be briefed on climate change. The Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon), when asked about climate change, said:

“You are not going to draw me on that. I’ve not had time to get into the…climate change debate.”

That is the Energy Minister! Will the Prime Minister clarify his position? Is he happy to have climate change deniers in his Government?

[The Prime Minister]

This is obviously the new approach to Prime Minister’s questions: the right hon. Gentleman comes to the House and praises the Prime Minister for his commitment on climate change and the environment. I like the new style. I thought that I might miss Punch and Judy, but this is much more refreshing.

The Government have a solid track record of cutting carbon, negotiating internationally and investing in nuclear. We have the biggest renewable energy programme in our country’s history. For the first time in a long time, we are on track to meet our renewables targets. Perhaps the right hon. Gentleman would like to get up again and congratulate me on that excellent record on the environment.

[Edward Miliband]

The whole country will have heard that the Prime Minister cannot answer the question about whether people need to believe in man-made climate change to be part of his Government. He has gone from thinking that it was a basic part of his credo to thinking that it is a matter of individual conscience. He used to claim that it was his passion above all else. Here’s the thing: if we are properly to protect—[Interruption.]

[Mr Speaker]

Order. The questions and the answers will be heard, however long it takes. Those who are exercising their vocal cords in a rather excessive way really ought to calm down. There is quite a long way to go.

[Edward Miliband]

Here’s the thing: if we are properly to protect the British people against the threats that they face, we cannot have doubt and confusion in the Government on the issue of climate change. The Prime Minister needs to rediscover the courage of his past convictions and tell his party to get real on climate change.

[The Prime Minister]

People can measure the courage of my convictions by my acts in government: the green investment bank, the cuts in carbon, the investment in renewables and the investment in nuclear. The right hon. Gentleman talks a good game, but he did not achieve anything in office. The most serious form of denial in British politics today comes from the reality deniers of the Labour party. What is their plan for the deficit? Nothing. What is their plan for welfare reform? Nothing. What is their plan for long-term investment, because that is what is required in respect of climate change? It requires long-term investment like high-speed rail, long-term investment like nuclear power and long-term investment like fixing our economy. That is what this Government are doing. All he does is get up and deliver a lot of hot air.

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

Q3. Will my right hon. Friend seek advice on the report by the whistleblowing commission set up by Public Concern at Work, which was led by Sir Anthony Hooper and included Michael Woodford, the whistleblower at Olympus, and see whether he can bring together people in Government to consider its recommendations and how we can stop the persecution of people like Dr Kim Holt, who was the whistleblower before the baby P case, and others whom I will not mention now?

[The Prime Minister]

I am grateful for my hon. Friend’s question. As he knows, the Public Interest Disclosure Act 1998 protects most workers from being unfairly dismissed by their employer when they have reported a matter of concern—when they have blown the whistle. We strengthened those protections in the Enterprise and Regulatory Reform Act 2013. We will always back whistleblowers when they challenge poor standards, particularly in large organisations. I am happy to ensure that he discusses with the relevant Minister—probably the Minister for Government Policy—any further steps that we need to take in that direction.

[Mr Nigel Dodds (Belfast North) (DUP)]

Does the Prime Minister get the depth of the hurt among victims’ families, and the deep sense of public outrage right across the country as a result of the outcome of the Downey case? He needs to understand that for a letter signed by an official to trump due process and the courts of this land without any parliamentary, legislative or statutory underpinning, is deeply offensive to the public in this country. Will he now scrap these get-out-of-jail-free letters immediately, and will he do everything in his power to reverse the despicable decision in the Downey case, so that justice can be done for the families of the bereaved?

[The Prime Minister]

First, I completely understand the depth of anger and concern that people will feel right across the country about the appalling events that happened in 1982, and the fact that the person responsible is now not going to be appropriately tried. Of course that is absolutely shocking, and our first thought should be with those 11 soldiers and their families and friends. It may have happened 32 years ago, but anyone who has lost someone in a situation like that will mourn them today as if it happened yesterday. We should be absolutely clear: Downey should never have received the letter that he received. It was a dreadful mistake, and we now need to have a rapid factual review to make sure that this cannot happen again. Whatever happens, we have to stick to the principle that we are a country and a Government under the rule of law.

[Lorraine Fullbrook (South Ribble) (Con)]

Q4. My right hon. Friend has taken swift action to help flood-hit communities, and I welcome the £10 million relief fund for farmers. The grade 1 farmland in the Alt-Crossens basin is at risk from Environment Agency scaremongering to reduce land drainage and close pumping stations. In light of recent events, will my right hon. Friend reassure growers in my constituency that the necessary protections will be given to their land, and that as well as being able to react swiftly, the Government are planning for the long-term security of this profitable industry?

[The Prime Minister]

My hon. Friend makes an important point and I am glad that she is advertising to her farmers the availability of the £10 million fund, which I hope will be useful for those who have lost productive land because it has been under water for so long. The point she makes about farmers, landowners and others being nervous about dredging and draining their land because of EA rules is a good one. As I have said before, I think the pendulum swung too far against dredging, and that needs to change and that will change. It is not the only answer or the whole answer to the problems she discusses, but it does have a proper part in properly managing the landscape.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Q5. The tragic death on a Birmingham street of Sarah Child devastated her family and shocked the community. A much-loved sister and daughter, she was killed, and her sister Claire—who was pregnant—was severely injured by a speeding driver doing 64 mph, who got but four years in prison. Does the Prime Minister agree that the time has come to look again at the sentencing of those who kill with a car?

[The Prime Minister]

First, my heart goes out to the hon. Gentleman’s constituent who was tragically killed in this incident, and to her family. I do think it right to look again at motoring offences and the penalties that are given. I have discussed this issue with the Secretary of State for Justice, who has already made some proposals and changes in that area. I am sure he will be listening carefully to what the hon. Gentleman has said.

[Charlotte Leslie (Bristol North West) (Con)]

Q6. The response of NHS Wales to Sir Bruce Keogh’s e-mail recommending a Keogh-style investigation into Welsh hospitals of concern was that it would respond only to legitimate concerns. Is the Prime Minister as astounded as I am that NHS Wales thinks that the views of the chief medical director of England, and now the Royal College of Surgeons, are not legitimate, and will he work with the Leader of the Opposition and try to persuade him to get his party in Wales to reverse that terrible decision and carry out an investigation into Welsh hospitals that could save lives?

[The Prime Minister]

My hon. Friend makes a very important point and Sir Bruce Keogh’s views should be respected and listened to by the NHS in Wales. In particular, she makes a point about the Royal College of Surgeons and what it has said today, which is effectively that there are people on NHS waiting lists in Wales who are dying because waiting lists are too long and because the NHS is not being properly managed, properly funded and properly reformed in Wales. That is a matter for the Labour Welsh Assembly Government, and they need to get their act together.

[Dame Tessa Jowell (Dulwich and West Norwood) (Lab)]

Will the Prime Minister accept the overwhelming humanitarian case for guaranteeing long-term support to victims and survivors of terrorism? If so, will he agree to meet with me, Colin Parry and survivors of the 7/7 London bombings who have benefited from the services of the Survivors for Peace programme, which is now facing imminent closure? In doing so, will he remember his pledge that survivors of terrorism must know that they always have the support of the whole country?

[The Prime Minister]

First, may I commend the right hon. Lady for the extraordinary work she did in government and continues to do in opposition to help the survivors of terrorist attacks, particularly the dreadful attacks that took place in London? I have seen at first hand the experience and brilliant touch that she brings to this important work. I am very happy to have the meetings she discussed. The Foundation for Peace is a unique charity that does an extraordinary job in supporting victims and families. I will be discussing its future with my hon. Friend the Member for Warrington South (David Mowat) too. Obviously, we want to make sure that all these institutions can continue their excellent work. I am happy to hold those discussions with the right hon. Lady and, as I said, with my hon. Friend.

[Julian Smith (Skipton and Ripon) (Con)]

Q7. We all want to see a more balanced economy. Does the Prime Minister agree that today’s stonking upward rise in business investment of over 9% shows that British business and British entrepreneurs are really rising to this challenge?

[The Prime Minister]

My hon. Friend makes an important point. Right across this House, many experts have been saying that what we need is a balanced recovery—one that sees increases in exports as well as increases in consumption, and one that sees increases in investment from business. The uprating of the GDP figures showing an increase in exports, and, as he says, a very large increase in business investment, is hugely welcome for our country.

[Ms Margaret Ritchie (South Down) (SDLP)]

Q8. Given yesterday’s court revelations of a secret scheme, does the Prime Minister believe that, as well as the parties in Northern Ireland progressing the elements on dealing with the past from the Haass talks, there is a need for transparency from the two Governments regarding the confused and shabby ways in which they sought to deal with the past since the agreement, remembering that Downing street was involved in this matter?

[The Prime Minister]

I agree with the hon. Lady that the Haass talks made some good progress. They were trying to deal with some of the most difficult issues in Northern Ireland, in terms of flags and parades, and perhaps the most difficult issue of all, the past. It is going to take a lot of courage and bravery from people on all sides in order to make progress in this way. She wants to point the finger, apparently, particularly at Downing street. I would argue that, when it has come to dealing with things like the Bloody Sunday inquiry and the de Silva report, Downing street is very happy to play its role in helping to bring parties together to make sure that we continue with peace in Northern Ireland.

[Mr Richard Bacon (South Norfolk) (Con)]

Given what the Prime Minister has called the Leader of the Opposition’s new approach and Chancellor Angela Merkel’s forthcoming visit tomorrow, does he think that there is something we can learn from her about an even broader based approach to coalition building that would unite the whole country? While it is true that under such circumstances he would have to give some red meat to Labour and some red meat to us, it would have the huge advantage for all of us of leaving the Liberal Democrats where they belong.

[The Prime Minister]

My admiration for Angela Merkel is enormous and there are many things that she has achieved that I would like to copy, not least getting re-elected, but a grand coalition is one thing I do not want to copy. I think the idea of a grand coalition is a bit too much for me.

[Jim Shannon (Strangford) (DUP)]

Q9. What steps will the Prime Minister and the Government take to insist that the National Crime Agency co-operates with the Police Service of Northern Ireland under the legislation to tackle people trafficking in Northern Ireland? Will he give an assurance that those involved in criminality in Northern Ireland will not be in possession of a letter that is their passport to freedom, ever mindful that the NCA does not have free reign in Northern Ireland?

[The Prime Minister]

The hon. Gentleman makes an important point. I have been very impressed by the work the National Crime Agency is now doing. I think it is a huge improvement on its predecessor. It has got real strength, heft and numbers in terms of being able to tackle organised crime. It is bad for Northern Ireland that the NCA is not able to properly operate there. I hope that over time, with talks between the parties, it will be possible to make progress. That would be good for Northern Ireland and good for our fight against organised crime.

[Nadine Dorries (Mid Bedfordshire) (Con)]

May I take this opportunity to congratulate you, Mr Speaker, on your new role as chancellor of Bedfordshire university?

In the last three years, 99 brave soldiers have given their lives for this country in Afghanistan. In the same period, 264 British women have been murdered—murders perpetrated by men—and over three quarters of those women were stalked before they were murdered. Will the Prime Minister please give a guarantee that this Government will introduce legislation to protect women from that fate in the future, particularly given the ease with which stalkers can now begin their stalking activities via social media and the internet?

[The Prime Minister]

I am grateful to my hon. Friend for what she says. She is right that stalking is an appalling crime. It can destroy lives and we need to do as much as we can to crack down on it. We have, of course, introduced a new offence to make absolutely clear the view that we take of it. The new stalking laws are also equally applicable to online, cyber-stalking and harassment, and the Crown Prosecution Service has published guidelines for involving communications sent via social media, so we tackle this in the online world as well as the physical world. However, I am very happy to write to my hon. Friend with all the detail of all the things we are doing and to see whether there are further steps we can take.

[Helen Jones (Warrington North) (Lab)]

Q10. When the Prime Minister was asked about the bedroom tax last year, he said:“what we have done is to exempt disabled people who need an extra room.”—[Official Report, 27 November 2013; Vol. 571, c. 254.]Now that we know that people with terminal illness who cannot share a room, those who have to store equipment such as dialysis machines and families with severely disabled children who need occasional respite are all subject to this pernicious tax, would he like to revise that answer and to apologise to the disabled people to whom he gave false hope?

[The Prime Minister]

First, let me repeat—this is a basic issue of fairness—that people who are renting in the private sector do not get additional money for rooms that they do not use, so it is not fair to have a different set of rules for the social sector. But we also have a large discretionary payment system in order to help families such as the ones the hon. Lady mentions.

[Jessica Lee (Erewash) (Con)]

Q11. Does the Prime Minister agree that the increase in jobs—or, as has been said, the “stonking” increase—in the private sector is leading the UK’s economic recovery and is helped, if I may say so, by the range of engineers, manufacturers and retailers in Erewash, who are employing people and sending their exports round the world?

[The Prime Minister]

My hon. Friend is absolutely right. We now have 1.6 million new private sector jobs, meaning that there are 1.3 million more people employed in our country. We are seeing that growth in employment in every region of the country. Some are growing faster than others, and we need to keep up the work to make sure that this is a broadly balanced recovery, but one of the indicators of economic success is that week in, week out, the leader of the Labour party comes to the House of Commons and cannot mention employment. He cannot talk about the economy or about jobs, investment and growth, because all the things he said would never happen are happening in our economy.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Could the Prime Minister focus on the fact that Atos now wants to give up its contract for the work capability test? Is it not time to change the test back to one based on the medical evidence of the consultants of those who are applying? When 158,000 appeals are upheld, surely it is time for him also to rescind his decision to charge people for appeals.

[The Prime Minister]

First, I hope it is not too uncharitable to point out that the Atos contract was actually awarded by the last Labour Government. Of course we are now discussing and debating with the company how this should be taken forward, but the fact is that we do need in this country a way of determining whether people are fit for work. When it comes also to the issue of sanctions in our benefits system, frankly it is right that people who are offered a job and do not take it should now face a sanction. I think that will be the choice at the next election: one party in favour of hard-working people; another party obsessed by bigger and bigger benefits.

[Sir Bob Russell (Colchester) (LD)]

Q12. Britain’s armed forces are the best. They defend our interests at home and overseas and, as we are witnessing, are taking essential action in flooded areas. Prime Minister, please recognise the folly of reducing the size of Her Majesty’s armed forces and stop sacking full-time servicemen and women.

[The Prime Minister]

First, let me take this opportunity to praise the extraordinary role that armed forces personnel have played during the floods in our country over the past few weeks. It has been extraordinary to see their work.

What we have done, in terms of defence, is remove the £38 billion black hole that we were left. Of course, that meant making difficult decisions, including difficult decisions about the size of the Army, Navy and Air Force, but we now have one of the top five defence budgets in the world, in terms of spending. We are coming to the end of all the redundancy schemes, and we can now point loudly and proudly to the extraordinary investment that we shall be making in type 45 destroyers, new aircraft carriers, our hunter-killer submarines and our A400M aircraft—the best equipment that any armed forces could have anywhere in the world.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Q15. Yesterday I met Billy. He is 24 years old, and he had worked since the age of 15 until he lost his job a year ago. Billy told me that he had to resort to going through supermarket skips to find out-of-date food just so that he could eat. Billy is desperate to work. Why will the Prime Minister not offer him a job guarantee, rather than his having to scavenge for food in Iceland’s bins?

[The Prime Minister]

What we are doing for Billy, and for thousands like him, is offering jobs and hope that simply were not there under the last Labour Government. Opposition Members come here week after week to try to say that the country is somehow poorer or worse off under this Government, but let me remind the hon. Lady what it was like in 2009. In 2009, there were 1 million more people in poverty, 500,000 more children in poverty, 150,000 more unemployed people, and 750,000 more people claiming benefit than there are today. So yes, there is more to do, but we have a proud record of giving people jobs, because we are sticking to a long-term economic plan.

[Mark Pawsey (Rugby) (Con)]

Q13. Just over a week ago, I joined year 5 and 6 pupils at Revel primary school in Monks Kirby, in my constituency. I asked them what they would like to ask the Prime Minister. One of them said that he would like to know why the Government kept on making so many new laws. I wonder if the Prime Minister could tell my young constituent what his Administration is doing to reduce the burden of legislation.

[The Prime Minister]

I think that my hon. Friend’s constituent could have a promising future in this place, because that is the sort of attitude that we need. I would say to my hon. Friend’s constituent that this will be the first Government since the war to leave office at the end of their term with fewer regulations in place than were there at the beginning. That is because of the excellent work of the Department for Business, Innovation and Skills and of the Minister for Government Policy, my right hon. Friend the Member for West Dorset (Mr Letwin), who have done a brilliant job in taking regulation off business so that we can create the wealth and jobs that we need.

[Joan Walley (Stoke-on-Trent North) (Lab)]

The Prime Minister will know of the disappointment that there has been no oral statement to the House about the future of Stafford hospital. University Hospital of North Staffordshire is expected to take on the entire running of the combined sites for the people of north Staffordshire. Does the Prime Minister accept that at the last count there was a funding gap of £39 million in capital costs and £4 million in revenue costs? Will he ensure that whatever the new arrangements are, there will be an opportunity to question the Government, and that these changes will not proceed at the expense of the health of people in north Staffordshire?

[The Prime Minister]

What I can say to the hon. Lady is that a written statement is being made today about the future of Stafford hospital. It has been very difficult to try to deal with the appalling situation that we were in with that hospital. I am sure that there will be opportunities to debate the issue in the House, but I think the hon. Lady will see that what are being proposed are good steps to ensure that A and E continues at Stafford hospital, and hard work to establish whether it will be possible to continue consultant-led maternity services in the future so that people can go on having their babies delivered at the hospital. That is what I want to see. My right hon. Friend the Health Secretary will set out his proposals later, and I am sure that there will be many opportunities to debate them—and, indeed, to debate all the lessons that need to be learnt from the failure of Stafford hospital in the past.

[Bob Blackman (Harrow East) (Con)]

Q14. Earlier this month, millions of Londoners were inconvenienced by a pointless Underground strike which was supported by only 30% of union members. Will my right hon. Friend agree to conduct a review with the aim of increasing the threshold so that pointless strikes in our public services can be outlawed?

[The Prime Minister]

My hon. Friend has made a good point. When we see how many people rely on essential public services, we know that the time has come to consider what changes we can make, and whether it is possible for us to see fewer of these strikes in future.

Another problem is that, despite repeated requests, the Labour party has completely refused to condemn what was a totally unnecessary strike. However, I do not think that we should be surprised, because this week they are all going on a cosy weekend with their trade union masters. We were told that they were heading for divorce; I think that they are going to renew their vows.

Closure of Skerton Community High School (Lancaster)

Wednesday 26th February 2014 Commons Chamber

David Morris (Morecambe and Lunesdale) (Con)

- Hansard - - Excerpts

I rise to present a petition on behalf of my constituents in Skerton. Lancashire county council is closing Skerton community high school in my constituency against the wishes of the wider community and, most importantly, the best interests of the students who attend the school. In the first stage of the consultation, more than 99% of responses were against the closure of the school, but Lancashire county council still proceeded with the next stage of closing the school. This petition urges Lancashire county council to listen to the residents of Skerton and to put the children’s best interests at the heart of this decision. I urge the House to support the people of Skerton in my community.

Following is the full text of the petition:

[The Petition of the community surrounding Skerton Community High School,

Declares that the Petitioners believe that Lancashire County Council have not listened to their concerns for the schools closure in the initial round of consultation and that the County Council should not have perused the closure of the school any further.

The Petitioners therefore request that the House of Commons urges the Government to take steps to support the School in its bid to remain open.

And the Petitioners remain, etc.]

[P001320]

Fire Services in the Cleveland Fire Authority Area (Middlesbrough South and East Cleveland)

Wednesday 26th February 2014 Commons Chamber

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)

- Hansard - - Excerpts

The petitioners include my hon. Friends the Members for Hartlepool (Mr Wright), for Middlesbrough (Andy McDonald) and for Stockton North (Alex Cunningham), who are in their places.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners believe that it is unfair that the Department for Communities and Local Government have imposed large funding reductions on a high-risk area like Cleveland when lower-risk areas in the South of England have had their central funding increased; further that the Petitioners believe that funding reductions have contributed to the 54.1% increase in total fire calls in Cleveland between 2012/13 and 2013/14; further that the Petitioners believe that it is unacceptable that the Authority’s proposed Integrated Risk Management Plan recommends the closure of Marine Fire Station and the reduction by approximately 25% of the number of the whole-time firefighters; further that the Authority and Government should take steps to protect frontline services and further that a local Petition on this issue has received over 6,000 signatures across Redcar and Cleveland, Middlesbrough, Stockton-on-Tees and Hartlepool.

The Petitioners therefore request that the House of Commons urges the Department for Communities and Local Government to provide a fairer funding settlement that gives due consideration to deprivation and risk, further that the House of Commons urges the Government to encourage Cleveland Fire Authority to reallocate planned capital expenditure to the preservation of frontline services, and further that the House of Commons urges the Cabinet Office, Department for Communities and Local Government and Cleveland Fire Authority not to further expend on unwanted and high-risk proposals to spin out fire brigades as public service mutuals.

And the Petitioners remain, etc.

[P001321]

John Downey

Wednesday 26th February 2014 Commons Chamber

12:36

[Mr Laurence Robertson (Tewkesbury) (Con)]

(Urgent Question): To ask the Attorney-General to make a statement on the background to yesterday’s judgment on John Downey.

[The Attorney-General (Mr Dominic Grieve)]

I am grateful to my hon. Friend for his question. As I set out in a written statement to the House this morning, and further to yesterday’s written statement by my right hon. Friend the Secretary of State for Northern Ireland, the prosecution of John Anthony Downey on four charges of murder and one of causing an explosion with intent arising out of the Hyde park bombing in 1982 has been stayed. I apologise to hon. Members who have read my written statement because, of necessity, a large part of what I say will repeat it.

Hon Members will know that the alleged offences arose out of the notorious bombing carried out by the Provisional IRA in Hyde park on the morning of Tuesday 20 July 1982. As members of the Blues and Royals Regiment of the Household Cavalry rode along South Carriage drive on their way to Horse Guards for the changing of the guard, a car bomb exploded.

The effect was devastating. Four of the guard were murdered—Lieutenant Anthony Daly, who was aged 23, and Trooper Simon Tipper, who was aged 19, died at the scene; Lance Corporal Jeffrey Young, who was aged 19, died the following day; and Squadron Quartermaster Corporal Roy Bright, who was aged 36, died two days after that. A total of 31 other people were injured, a number of them seriously, and seven horses were destroyed.

Mr Downey was arrested on 19 May 2013 at Gatwick airport when he was en route to Greece. On his arrest, he produced a letter stating that he was free to enter the jurisdiction without fear of arrest. Despite that letter, he was charged by the Crown Prosecution Service with four counts of murder. Before he was charged, my consent was sought, as the law requires, for him to face a charge of causing an explosion, and I gave that consent. I believed that it was right to do so, and I remain of exactly the same view today.

As acknowledged by the judge, the allegations faced by Mr Downey were of the utmost seriousness. The bombing was an attempt by the Provisional IRA to bring its terrorist campaign to London and to attack armed forces personnel who were on ceremonial duties. Whatever the circumstances in which the letter had been sent, and it is now clear that its assurances were wrongly given, it was right that the matter should be tested in court. Neither I nor the CPS were prepared to accept that the letter and the circumstances in which it had been given were such as to automatically prevent Mr Downey’s prosecution. The prosecution of a very serious offence of that kind is plainly in the public interest.

The court heard full argument and considered a great deal of documentation. The judgment given is a detailed and careful assessment of the case and the circumstances in which Mr Downey received his letter. It is worthy of note that the defence offered four grounds on which they argued that the case should be stayed, and that on three of those grounds the judge found for the prosecution.

At no point did the judge suggest that it was inappropriate for the prosecution to be brought—indeed, he noted that

“the public interest in ensuring that those who are accused of serious crime should be tried is a very strong one”.

My own very strong view is that it was entirely appropriate and proper for this matter to be considered in a court of law.

Notwithstanding that, the judgment has now been given, and the CPS and I accept that judgment entirely. We do not consider that it gives rise to any prospect of a successful appeal, and we have therefore notified the court that we will not be appealing. My sympathies above all are with the families of those who died and with all those who were injured on that day.

[Mr Robertson]

I should like to thank you, Mr Speaker, for allowing this urgent question, and I thank the Attorney-General for his statement. May I explore some of the background to this matter? It has been clearly stated that the letter did not constitute an amnesty, but if that is the case, why did the judge take the decision that he took? In these circumstances, it would surely be appropriate for the Government to consider making an appeal.

May I also explore how we have arrived at this situation? I was a shadow Northern Ireland Minister when the Northern Ireland offenders Bill was withdrawn because it was obviously not going to get through Parliament. There was no mention at the time of any other deal being likely. Does the Attorney-General not consider what has happened since then to be a discourtesy to Parliament? Does he, like me, wonder who authorised the scheme that seems to have replaced the legislation? That must surely have been the then Prime Minister. Will the Attorney-General tell us who wrote the letters to the people who are often referred to as on-the-runs? What was in the letters? And I am afraid that I have to ask why the Police Service of Northern Ireland gave an assurance to Mr Downey that no other police force in the United Kingdom had any interest in him, when it knew that that was not the case.

May I also ask the Attorney-General how many people have received letters under the scheme? Will he tell me whether all those who have received such letters are from a republican background? At a time when the PSNI is advertising for Bloody Sunday witnesses to come forward, does he not think this situation risks undermining the entire criminal justice system of the United Kingdom?

[The Attorney-General]

May I first make the point that it is clear from the judgment and the supporting material that the administrative scheme was not, and never could be, an amnesty? That might have been what the previous Government sought at one time, but an amnesty could be achieved only through legislation, and no such legislation was put through the House. Parliament never approved an amnesty.

This was an administrative scheme that operated independently of the Government and was intended to identify those individuals who, although they might believe that they were unable to return to the jurisdiction without fear of arrest, would in fact face no prosecution or arrest if they were to return. The PSNI would check whether individuals were wanted for arrest or for questioning. If the individual had already been considered for prosecution, the Public Prosecution Service for Northern Ireland would make a careful assessment of its files to determine whether any prosecution would follow if the individual were to return. Many of the offences were historical, and in some cases, with the passage of time, essential witnesses might have died or forensic evidence might be no longer available.

The test applied by the Public Prosecution Service and approved by my predecessors in office was not simply whether the evidential test was no longer met, but whether it could no longer ever be met. Only in those circumstances would an individual be told that they were free to return. The position was also conditional on no further evidence subsequently coming to light of involvement in an offence. As to what happened in this case, it is quite plain that a serious error was made within the PSNI in relation to the information that it collated and provided to the Government. So far as the number of letters is concerned, I think that the better course would be for me to write to my hon. Friend, as I would not wish to give a figure that subsequently had to be adjusted, even very slightly.

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

I join the right hon. and learned Gentleman in paying tribute to the four soldiers from the Blues and Royals who were murdered in the Hyde park explosion and to the seven members of the Royal Green Jackets who were murdered on the same day in Regent’s park. Our thoughts are with their families, because they must be reliving their suffering all over again at this time.

I wish to make it clear that the Opposition completely understand and support the Attorney-General’s decision to proceed with the prosecution. We accept that the Downey judgment raises serious issues about how the scheme for dealing with on-the-runs, which, it must be and has been made clear, never offered immunity from prosecution to anyone, has been administered by successive Governments and agencies, and, in particular, about the role of the Police Service of Northern Ireland. Can we be assured that we will be told how this grave mistake occurred and how we can be sure that it will not happen again? Can the House be told how many letters to the so-called on-the-runs have been issued since this Government took office? I understand that the Attorney-General will write to the hon. Member for Tewkesbury (Mr Robertson), so perhaps he could copy me in on that letter.

Will the Attorney-General or the Secretary of State for Northern Ireland come to the House to make a statement once the investigations into this matter have been concluded? Perhaps the Attorney-General also shares my concern about the Prime Minister’s comments earlier this afternoon. I presume he has heard them. He may well agree with me that perhaps the Prime Minister misspoke and that it would be to the advantage of us all if the Prime Minister clarified exactly what he meant by them.

The sending of this letter was a terrible mistake, as was the failure to act when the mistake came to light. But this mistake, egregious though it was, does not discredit the Good Friday agreement and subsequent agreements. Very difficult decisions needed to be made, and very important leadership needed to be shown and was required on all sides. Northern Ireland has been delivered from a past of violence and sectarian hatred to a place where there is power sharing between old enemies, and that is what is happening at the moment. The people of Northern Ireland will not lose sight of that and our resolve to make sure that this peace process works must not be diminished.

[The Attorney-General]

I am grateful to the hon. Lady for her supportive comments about how the CPS and myself approached this case. I think that she knows that an inquiry will be held, and questions for that should be directed to my right hon. Friend the Secretary of State for Northern Ireland. That matter will be dealt with by the PSNI and the independent ombudsman. Clearly, answers will be needed as to what has happened. In addition, I entirely accept that the public will want to be reassured as to whether this is an isolated instance of a letter being sent mistakenly or whether there might be other such examples, in which case people will want to know what can be done about that. My understanding is that since the current Government came into office some 38 letters have been sent out. I hesitated to comment about what happened under the previous Administration, but once I have that information I will, of course, supply it. It is right to say that the person who had been charged, Mr Downey, denied responsibility for any role in this outrage.

The final comment I would simply make is this: the victims, including those who survived but were seriously injured, and their families are a matter that the House has constantly to keep in mind. The rule of law requires that those who are accused of grave crimes should be brought to justice, unless there is some overwhelming public interest to the contrary, and I have to say that in this case it was clear to me that the public interest was entirely in favour of seeking to bring this prosecution.

[Mr David Davis (Haltemprice and Howden) (Con)]

This country prides itself on its Government operating solely under the rule of law, so I hope that my right hon. and learned Friend will forgive a layman’s question about the law in this case. He describes an administrative system, but under what law is this administrative system created whereby a well-respected judge in this country accepted that this letter should, in effect, give this man an amnesty? Whether or not the Attorney-General describes it in those terms, that will be how it is seen both in this country, including in Northern Ireland, and abroad. So under what law is this constituted? Can he give the House an absolute assurance that he is sure that the criteria that he laid down—the administrative ones—have been followed in all cases?

[The Attorney-General]

My right hon. Friend is, of course, right that judges should interpret and implement the law, but I have to say that I have no reason to fault the judgment in this case. As well as the public interest in prosecuting, clear issues of fairness in the way in which prosecutions and investigations are conducted are involved, which are subject to the potential for abuse of process applications—that is what took place in this case.

The judge provided reasons, clearly set out, as to why, in respect of one of the four grounds advanced, which centred on the letter that had been sent, it would in his view be wrong and an abuse of process if the prosecution were allowed to continue. That centred on the fact that the person concerned, Mr Downey, had been misled by the letter. I do not think that I can say any more than that.

As to the principles underlying the other letters, this was an administrative process—one that was certainly lawful—in providing information solely to those who were not wanted. As I said earlier, it is quite clear from this instance that something went badly wrong. Whether it went badly wrong in other instances is not a matter about which I can, at the moment, help the House.

[Mr Peter Hain (Neath) (Lab)]

May I welcome the fact that the Attorney-General has described the process as lawful? Will he confirm that it was overseen by the Law Officers, including the Attorney-General? The fact of the matter is that the process was designed to address 200 or so individuals. The whole situation was an anomaly. To achieve and lock in the peace process following the 1998 Good Friday agreement, 400 prisoners were released, some of whom had committed terrible atrocities. That angered victims at the time, which I understand, but it was an essential part of getting to where we are now. Similarly, addressing the question of the 200—that anomaly—was part of that as well.

As for the idea that this was some secret thing out of the blue, I told the House on 11 January 2006 that, in withdrawing the legislative approach to addressing the anomaly,

“the Government still believe that the anomaly will need to be faced at some stage”—[Official Report, 11 January 2006; Vol. 441, c. 288.]

No one should have been surprised that we had to do that. It was necessary to get to a position in which Northern Ireland could escape its hideous past of evil and terrorism and enter into a period of almost universal peace and stability, with old enemies negotiating and governing together. That should be welcomed and our role as a Government in achieving that should be commended, and I hope that the Attorney-General will do so.

[The Attorney-General]

I am extremely mindful that the right hon. Gentleman and others on both sides of the House worked hard during the peace process. Indeed, they continue to do so, as this process is by no means complete. I am the first to pay tribute to him for the work that he did.

There is an important distinction between releasing prisoners under an exercise of the royal prerogative of mercy, as part of a peace settlement, and any suggestion of an amnesty. Those two things are rather different. As the right hon. Gentleman knows, there was no such amnesty. Indeed, any suggestion that we might move towards an amnesty was firmly rejected by widespread views expressed in Parliament.

[Mr Hain]

And by the Government.

[The Attorney-General]

And the Government accepted that. For those reasons, we have a system. The right hon. Gentleman says that he explained to the House—he certainly did—about looking at other methods. I think that it is best for him to explain what publicity or otherwise that may have attracted. He is quite right that the system of giving an assurance to an individual that they are not wanted because they are indeed not wanted and there is no current basis for wanting them is not an unlawful process in which to engage.

Finally, the right hon. Gentleman raised the oversight of the Law Officers. He is quite right that, during this process, the office of the Attorney-General operated as the co-ordinating point, because the Public Prosecution Service for Northern Ireland could not and would not communicate directly with Northern Ireland Office, and therefore collated the information that was supplied. In fairness to my predecessors, it is probably right to say that they would have had no independent means to verify whether or not someone was wanted, and reliance for that was placed on the PSNI and its links with other police forces in the other jurisdictions of this country.

[Dr Julian Huppert (Cambridge) (LD)]

This was a horrible and brutal murder, and the outcome is clearly grossly unsatisfactory. If the Attorney-General is sure that nothing further can be done in this case, I accept that, and I hope that he has exhausted all possibilities. Will he say more about how he will check that no other errors of this kind are waiting to come up later?

[The Attorney-General]

Those checks are now being conducted. They will not be conducted by me. My office might be involved in them, but I think that they are primarily for the Northern Ireland Office to carry out. I know from my right hon. Friend the Secretary of State that that is exactly what is happening.

As to my hon. Friend’s first point, if I had thought there were proper grounds on which this decision could be appealed, then of course the Crown Prosecution Service and I would have taken a different view. However, it is not in the public interest to pursue appeals that are pointless.

[Mr Nigel Dodds (Belfast North) (DUP)]

I too pay tribute to the families who have been left bereaved as a result of the Hyde park bombing and other such incidents. There are victims everywhere who are feeling very hurt today. The Attorney-General says that it was right to bring the prosecution. Does he still believe that it is right that no stone should be left unturned in the pursuit of justice in this case, and what further action will he now take, given that this case has only been stayed, to ensure that justice will be done, and be seen to be done by the victims?

In the light of the questions asked by the hon. Member for Tewkesbury (Mr Robertson), many of which were not answered—I thank him for raising them in the House today—does the Attorney-General also agree that there is a strong case for a full inquiry to bring out all the facts, such as under what authority the scheme was set up, who knew about it, who was informed, what the letters said and who they were sent to? That would mean that, for once, Parliament could examine the scheme. There has been no knowledge or even a hint of information about it, which is a scandalous abuse of Parliament and the people’s representatives.

[The Attorney-General]

I will, if I may, take the right hon. Gentleman’s final question first. Let me emphasise to him that of course this is a legitimate matter of debate, and he may wish to raise it, but it is not one that I, within my departmental responsibilities, could address. It would have to be looked at elsewhere. So far as the stay is concerned, yes it is indeed a stay, but lifting a stay requires specific grounds. I know of no basis for thinking at the moment that a stay is ever likely to be lifted in the future. Obviously, I am not for any reason pre-empting that. If something were to come to light that justified applying to have a stay lifted, then that is a matter that would be considered.

As for the other cases and whether they will be pursued, I would like to make the position absolutely clear. My responsibilities as far as criminal justice is concerned lie within England and Wales; Northern Ireland is now devolved. If cases are brought to the Crown Prosecution Service suggesting the commission of very serious crimes by individuals who can be apprehended and brought to justice, then what I said earlier must be the case. It would generally be in the public interest—it would be very rare to think of where it would not be in the public interest—for such a prosecution to be pursued. That is quite irrespective of the amnesty provisions of the Good Friday agreement, which may reduce, for example, the period of time somebody might spend in prison. It is always in the public interest that crime should be prosecuted.

[Mr Graham Brady (Altrincham and Sale West) (Con)]

Given that the letter was issued in error, can my right hon. and learned Friend confirm that it has now been rescinded and will have no effect on any future occasion?

[The Attorney-General]

No, I cannot give my hon. Friend that assurance. I understand his point, and I am happy to get back to him.

[Kate Hoey (Vauxhall) (Lab)]

Does the Attorney-General understand that all these fine words about errors and administration mistakes will not wash with the people of Northern Ireland who will see that this has been an amnesty under another name? It is an amnesty that has been put through without this Parliament’s permission when it specifically decided, when the Bill was withdrawn, that it did not want it to happen for on-the-runs. I want to know why we are blaming an individual in the police for writing or sending those letters; they did not write them without somebody at the very, very top of Government telling them to do so.

[The Attorney-General]

As for the hon. Lady’s views about how this would be viewed in Northern Ireland, I suspect that it would be viewed in the same way on this side of the Irish sea. I do not have any reason to differ with her analysis. Most right-thinking people will be shocked and profoundly troubled by what has happened.

I disagree with her characterisation of the letters being tantamount to an amnesty; I do not think that they were, if written as they should have been and sent to the recipients who should have received them. Unfortunately, in this case, as we know, somebody received a letter that they should not have received. I do not wish to comment further. The PSNI has indicated that it takes responsibility for the information that was supplied. The hon. Lady believes that fault might lie elsewhere; I am in no position to comment on that one way or the other. I can only say that the information I have at the moment does not suggest that the fault lies elsewhere.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

I hope, given these awful events, that the Government think long and hard about the perception that will be apparent if we are giving an amnesty to one group of people while actively pursuing others, like potentially the soldiers who were involved in the Bloody Sunday incident. Can my right hon. and learned Friend confirm that reconciliation and justice and forgiveness apply to both sides, not just one?

[The Attorney-General]

I understand my hon. Friend’s comment. As I have also tried to make clear, I do not believe an amnesty is in place. Ultimately, in relation to offences committed in Northern Ireland, now that justice and policing are both devolved, these are not matters for me.

[Dr Alasdair McDonnell (Belfast South) (SDLP)]

May I offer my sympathy and the sympathy of my party to the relatives of those who died in Hyde Park, and of the seven Royal Green Jackets who died the same day? There are a lot of unanswered questions and I thank the Attorney-General for his information so far. We are told that this was a mistake—an error—but people want to know what aspect of the deal was a mistake. Was the mistake just because this came out? Or was the mistake just one mistake—this one letter—or were there 187 mistakes?

People want to know about the trade-off. People have been asking me how many of the people receiving letters were British agents. Victims and survivors out there want answers—honest answers. All the victims and survivors deserve honesty, openness, straight answers and, ultimately, justice. They deserve to know why and how their loved ones died, and they deserve to know what was at the back of the deals that were done and the basis for the deals. As my hon. Friend the Member for Foyle (Mark Durkan) said, we had a dirty little war. Victims and survivors want to know that we are not going to be burdened with a peace contaminated by dirty little side deals.

[The Attorney-General]

As I understand the matter, and there may be others in the House who are better able to answer on the policy background, it arose out of a desire to provide reassurance to those who feared coming back into the jurisdiction that they could do so on the basis that there was no prospect of their being prosecuted on the evidence currently available to the authorities—the PSNI, as in this case, or other police forces. That was the basis of what happened. Of course, the hon. Gentleman is right: the wider way in which the peace process has been conducted is a legitimate matter for political debate, but in my role as the Attorney-General I endeavour to focus on what I see as the issues, and as I said earlier, there was nothing unlawful about the letters. There was no amnesty. But, as I accept, it is quite clear from the court judgment and the facts that emerged in the case of Mr Downey that Mr Downey should never have been sent the letter.

[Bob Stewart (Beckenham) (Con)]

My heart breaks for the families and the victims of this appalling atrocity. Five months after it happened, my soldiers were killed in Ballykelly. Seventeen people—11 soldiers and six civilians—were killed. I gave evidence against the five people who were charged with that crime—five people. Does that mean that others who were involved in this appalling atrocity are not being chased vigorously by the Police Service of Northern Ireland and brought to justice?

[The Attorney-General]

I have absolutely no evidence to suggest that cases are not being pursued simply because they might be old. That is not the case. Indeed, if that had been the case, Mr Downey would not have been picked up at Gatwick airport.

[Lady Hermon (North Down) (Ind)]

I have enormous regard for the Attorney-General, and this Attorney-General knows perfectly well that the European convention on human rights guarantees an effective remedy for every breach of the rights guaranteed in our convention. I am sure that the Attorney-General and others in the House would agree with me that the right to life is the most important right of all. I am absolutely disgusted, and extremely upset and angry, that we now discover that successive British Governments have secretly, wilfully and intentionally deprived families of an effective remedy when their loved ones have been murdered by the IRA. How this Government can hold their heads up and talk about respect for human rights and the right to life and the rule of law beats me, but I am sure the Attorney-General will assure me and the House with very nice words that in fact that is the case.

[The Attorney-General]

I am not sure whether I can use nice words, but I shall do my best to answer the hon. Lady’s question honestly. Had the scheme operated in the way that was intended, then I have to say that I do not think there was any prospect of anyone, relatives or otherwise, being denied justice in relation to anybody who received such a letter. But that is on the basis that the scheme operated properly. It is quite clear that in this case it did not operate properly because Mr Downey should not have been sent this letter. We will have to wait and see whether this is some wider failure, which applies elsewhere, but certainly from the information that I was given when I looked into this matter at the outset, there was a system in place to try to ensure that every nook and corner was looked at before such letters were sent.

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

However it is presented, the recipients of these letters are above the law. That is what this court decision has made clear. Will my right hon. and learned Friend confirm that a balanced approach will therefore be taken as regards former soldiers serving in Northern Ireland? We have heard that the authorities are already advertising for witnesses in the case of Bloody Sunday. Will he also answer one question that has not been answered so far? Who in the Government authorised these letters?

[The Attorney-General]

I disagree that the letters placed the recipients above the law.

[Mr Baron]

That is what the court has decided.

[The Attorney-General]

No; it has not decided that the letters placed people above the law. If the letters had been correctly sent to recipients against whom there was no evidence at the time on which criminal proceedings could be brought against them if they returned to the jurisdiction, they had no possibility of putting them above the law, and as I mentioned, the letters leave open the possibility that if evidence were to come to light implicating such individuals, they could still be prosecuted. The difficulty in the case of Mr Downey was that the evidence against him was already available at the time the letter was sent, which is why he should not have been sent the letter.

I am not in a position to comment on the position of former soldiers. I simply make the point that the general rules and principles of the rule of law apply, irrespective of who may or may not have committed an offence. But in any event, my own direct responsibilities do not extend to the Public Prosecution Service for Northern Ireland.

Those are the two points I would wish to make, but I reiterate that these letters did not amount to an amnesty.

[Sammy Wilson (East Antrim) (DUP)]

Regardless of how the Attorney-General tries to paint this issue, this shoddy, shabby, sleekit, behind-the-door deal is, in effect, seen as an amnesty, and in the case of Downey it has, in effect, been an amnesty. If the Attorney-General wishes to dispel any collusion in this by the current Government, given the fact that he has open to him appeal, judicial review and removal of the letter, will we not see one or all of those actions taken to give assurance to the public that this Government have got no part in the deal that the Labour Government undertook behind the back of this Parliament?

[The Attorney-General]

Our prosecutorial services are independent. If the Crown Prosecution Service thought that it was justified in appealing the decision that has led to the stay, it would be wholly within its discretion to decide to do so. It is right that I discussed the matter with the CPS. It was quite clear from that discussion, and indeed I concur with the view, that there was no basis for taking the matter further.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

Anthony Daly was one of those killed by this bomb. He was a friend of mine, a man I knew well and a great man, and he perished in the service of his Queen and his country. May I ask the Attorney-General, first, what steps have been taken to ensure that safeguards were put in place for these kinds of letters, and have remained in place or been strengthened? Secondly, what measures were taken to discipline the people responsible for issuing this letter, at any level of the chain of authority? Thirdly, what measures will now be taken to ensure that those people make some public apology for what has been done?

[The Attorney-General]

I should say first of all that the police have already apologised for what has happened through the Chief Constable of the PSNI, and as I indicated there will be an inquiry by the police ombudsman. I have no doubt that that inquiry will be wide-ranging as to how this problem emerged. I hope that it will be able to provide the best safeguards, linked with the other work that will be done by the Northern Ireland Office and others, to ensure that there is never a repetition of this.

[Naomi Long (Belfast East) (Alliance)]

I, too, extend my thoughts and my sympathies to those who suffered that day in Hyde park and have continued to suffer ever since, and who have suffered again as a result of this shabby and secretive side deal that was done as part of the peace process by Labour. I also want to disabuse Members of the idea that this deal bears any comparison with the early release scheme in the Good Friday agreement, which was voted on by the people of Northern Ireland and accepted by them, as opposed to this deal, which was shabbily driven through behind the backs of even the representatives in this Parliament.

The Attorney-General has confirmed that 38 letters have been sent since 2010. That is an important date, because it marks the devolution of policing and justice to the Northern Ireland Assembly. This process continued after devolution, yet had profound implications for the work of the Historical Enquiries Team and the Northern Ireland Policing Board, and it continued without the knowledge of the Minister of Justice for Northern Ireland or the Policing Board. Who administered the scheme? Who negotiated with devolved institutions behind the back of the Minister of Justice for Northern Ireland, so that this scheme could continue?

[The Attorney-General]

The hon. Lady raises a large number of highly pertinent questions, and I hope she will forgive me if I say that I do not think I am in a position to answer all of them at the Dispatch Box today, particularly because my remit and responsibility in this matter is confined to a number of very specific things.

The hon. Lady says that she considers the scheme to be a shabby side deal; I am sure that will be noted in this House by those who had cause to develop or operate it. I do not think I can comment further on it than that. She makes the point that it is quite different from the Good Friday agreement, and I have no reason to disagree with her about that; I commented on that myself and said that it is quite distinct. Nevertheless, I come back to the point that I raised before, that my understanding is that it was done with the intention of taking the peace process forward, and done in a way that was not intended to prejudice, first, the rule of law and, secondly, the right of victims and relatives of victims to see justice be done. That was the basis on which it was proceeded with and not on some other shabby basis, as she describes it. However, I have to accept, in the light of what has happened in this case, that while I suppose it might be argued that had the letter never been sent, Mr Downey would never have appeared at Gatwick airport, nevertheless the circumstances of what has happened are very unsatisfactory.

[Nigel Mills (Amber Valley) (Con)]

Will the Attorney-General confirm whether it would be effective for this Parliament to pass a resolution, or an amendment to a Bill, saying that these letters have no effect and should be ignored by the court in considering staying prosecutions?

[The Attorney-General]

The letters were statements of current fact. I do not think that, in themselves, they make any difference to the matter. It would be a matter of debate, on which we could engage, whether the letters could be rescinded, but that is a matter that would have to wait for another day.

[David Simpson (Upper Bann) (DUP)]

I also pay tribute to the families, who will again go through a lot of trauma. Yesterday was a very sad day for British justice. Let us remind ourselves that these on-the-runs were murdering scum who destroyed and ruined lives in Northern Ireland by shooting and bombing. When someone receives a letter saying that there is no longer an interest in them, or that no police force has an interest in them, what do they take from it? It is an amnesty in all but legislation. It is a disgrace and we need a full inquiry into it.

[The Attorney-General]

On the issue of a full inquiry, I am sure that my right hon. Friend the Secretary of State for Northern Ireland has noted the hon. Gentleman’s comments. I do not think that I can say more on that.

[Mr Robert Buckland (South Swindon) (Con)]

May I associate myself with remarks in support of the victims of this and other appalling crimes that go unpunished? I was not aware that the chief of staff to the then Prime Minister or officials in the Northern Ireland Office had any role in policing or prosecution, and I am amazed that letters are being sent from that part of Government relating to issues that are bound to be referred to in a court of law. Will my right hon. and learned Friend assure me that that manipulation—that misuse of the process—will not recur, and that those who are responsible for prosecution and policing send letters in their own name rather than through Government Departments?

[The Attorney-General]

My hon. Friend makes perhaps an important point. It is right to say that the letters were sent on the basis of decisions taken by both the Public Prosecution Service and the PSNI, in the context of Northern Ireland, and if domestic matters elsewhere in the UK were concerned, by their prosecutorial authorities. To that extent, it was an administrative system independently conducted of Ministers; I want to make that quite clear. However, it is also right that, at the end of the process, it was ministerial letters, or letters from officials, that constituted the giving of the information.

[Ian Paisley (North Antrim) (DUP)]

This is a sad and sorry affair, which unfortunately is written in the blood of our brave servicemen on the streets of this wonderful city. We should never lose sight of that. However, does the Attorney-General recognise that the case law now established by this case and its outworking has done grievous harm to the rule of law and how it is considered across the whole of the United Kingdom, and will continue to do so unless he takes specific steps to rescind all the letters to all the individuals, and does his best to find fresh factors or new evidence to prosecute—once again—Mr John Downey?

[The Attorney-General]

So far as rescinding of the letters is concerned, that is not a matter for me. [Interruption.] No, it is not a matter for me, acting in my capacity; I accept that it could be a matter for Government, but it is not a matter on which I can give such an assurance to the hon. Gentleman.

On the question of case law, let me make the position quite clear. There is very well-established case law about abuse of process, and cases being stopped on the basis of an abuse of process, particularly in relation to assurances given that an individual might not be prosecuted for something, has not just suddenly emerged. It is perfectly well established in our law and indeed is part of our rule of law, for the very good reason that assurances given by public administrations may be binding upon them if they lead somebody to do something to their detriment.

In this case, as I have made clear, we took the view that there were arguments that could properly be put forward to the court that, although there was an error, it did not amount to an abuse of process and was not justified. The court has taken a different view, but I do not think that one can draw general conclusions about other cases from this case, which falls on its own individual facts.

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

First, may I applaud the Attorney-General for the way in which he has handled this case by authorising prosecutions? My question relates to what he has just said. If there are other cases with similar circumstances and similar letters, will they still be prosecuted in the light of the judgment and the fact that the Crown Prosecution Service has not challenged that decision?

[The Attorney-General]

As I have indicated, all the background facts relating to each letter that has been sent will be checked, and that should disclose whether any error has been made. I want to reiterate the point that if it were to emerge that no other letters contained errors the suggestion that those letters in some way amounted to an amnesty simply cannot be right. They would be mere statements of fact, and of the position that existed at the time at which those letters were written.

[Ms Margaret Ritchie (South Down) (SDLP)]

Given yesterday’s announcement in the court system, what assurances can be given to families—who are awaiting justice in relation to the deaths of their loved ones and what happened surrounding those deaths—that they will not face similar revelations about side and shoddy deals?

[The Attorney-General]

I hope very much that no one will have to deal with side and shoddy deals. It is a matter of opinion as to whether the process of assurances to the on-the-runs was a proper one to pursue. It is a matter for political debate.

[Gareth Johnson (Dartford) (Con)]

The ending of criminal proceedings against John Downey is deeply disturbing, so will the Attorney-General confirm that while criminal proceedings are preferable and what we all want to see in the House, there should be no bar to civil proceedings against Mr Downey by the victims’ families?

[The Attorney-General]

Civil proceedings are for the individuals concerned but, no, the letters do not amount to any sort of bar on civil proceedings.

[Dr William McCrea (South Antrim) (DUP)]

No one can fully understand the hurt felt by families whose loved ones have been murdered, and sympathy from politicians for families of innocent victims will not be enough to heal that hurt. Indeed, at times, politicians’ actions can add to that hurt, as in this case. John Downey is believed to have participated in the cold-blooded murder of the innocent. Does a letter signed by a Government official abort the right to justice? Who else has received these letters? For example, have Gerry Adams and Martin McGuinness received similar letters? Have soldiers and police officers received similar letters to give them immunity from prosecution, or are these special letters simply for terrorists, gangsters, thugs and murderers? What other dirty deals have been done behind the backs of the people of Northern Ireland and their elected representatives?

[The Attorney-General]

I agree entirely with the hon. Gentleman that the hurt of the relatives of victims and, indeed, if they survived, of the victims themselves is a matter of which the House should be well aware. I suspect that it is right to say that there are very few Members who do not know people personally who have been affected by the violence in Northern Ireland. I certainly do.

As for the hon. Gentleman’s other points, the best course of action, if I may recommend it to him, rather than asking me questions which, in truth, within my responsibility, I cannot answer, is to initiate the things he wishes. There is a wider review as to what has happened, but first he may wish to see what the police ombudsman has to say in the internal inquiry report. Then, of course, the House is a Chamber in which these matters may be debated.

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

Who approved the letter en bloc or individually?

[The Attorney-General]

I choose my words to my hon. Friend with care because, over time, the letters may have been approved in slightly different ways. Let us be quite clear: these letters were ultimately the responsibility of the Governments in office at the time at which they were sent. I will not accept the suggestion that it was otherwise. That is a completely distinct issue from that of where mistakes may have been made in the factual analysis before the letter was sent.

[Mark Durkan (Foyle) (SDLP)]

This is not just about some unsatisfactory circumstances. This is traumatising victims, and it is scandalising the public. The court seems to have been misled into thinking that all parties agreed at Weston Park—that is implicit in the judgment. All parties did not agree at Weston Park, nor did they agree in the submissions that we made to Government papers after Weston Park, and certainly, all parties but Sinn Fein opposed the disgraceful Hain-Adams Bill that purported to give an amnesty through legislation.

Will the Attorney-General address the implication of a judgment that basically says that even the wrong word of a Government official as part of a secret scheme should trump due process and the transparency of the rule of law? Is there not a danger in allowing that as the going rate for the future, if there is no appeal in this case? As for the status of the letters, could Parliament legislate to rescind or qualify the import of them?

[The Attorney-General]

Can I try to deal with both matters in turn? I disagree with the hon. Gentleman’s characterisation that the court’s decision is in some way an infringement of the rule of law. I recommend, if he wishes, that he read the judgment. Far from its being an undermining of the rule of law, I have to say, while it may be a result with which I am uncomfortable and would hope that it might have been otherwise, it is actually an upholding of the principles of the rule of law, even when it has an outcome that we may find extremely uncomfortable, because it emphasises the fairness at the heart of our criminal justice system. As for the other matters that the hon. Gentleman raised, it seems to me that they are matters, as I said earlier, for wider debate.

[Michael Ellis (Northampton North) (Con)]

Having worked in the criminal justice system for over 15 years, and having dealt with applications to stay prosecutions, this strikes me as an appalling travesty of justice. May I press my right hon. and learned Friend about the prospect for an appeal? Stays of prosecutions and stays of proceedings can be reversed by the Court of Appeal. These things are open to different interpretations by different judicial persons. The terminology in the letter might possibly be open to an alternative interpretation, and the source of the letter is questionable as not having come ostensibly from a prosecutorial authority. Will he not reconsider the possibility of an appeal to the Court of Appeal against this stay?

[The Attorney-General]

I have to say to my hon. Friend that, in any event, it is a decision that has been made by the Crown Prosecution Service and me. I have explained the reasoning behind it, and I believe that our decision is the correct one.

[Jim Shannon (Strangford) (DUP)]

There is palpable anger and concern about the decision to give John Downey freedom as a result of that letter, and it poses many questions. Four young Ulster Defence Regiment men were killed in Ballydugan in Downpatrick. Eight people were arrested and questioned, then freed. The three IRA men who killed Kenneth Smyth, a sergeant in the UDR, and his best friend, Danny McCormick, in December 1973 have never been tried. An IRA man killed Lexie Cummings in Strabane, and I secured an Adjournment debate on the matter in the Chamber, which was attended by my good friend, my right hon. Friend the Member for Belfast North (Mr Dodds). A former Minister of State replied to it, and referred to the HET inquiry. The question is whether the HET even knew that someone was on the run.

From Strabane to Ballywalter, for both Protestants and Roman Catholics, the anger is real and makes us all wonder just how many of those involved in these murder cases that I have mentioned and others wander around with a bit of paper, which is their passport to freedom, while families and loved ones grieve. Will the HET and the PSNI be given the details of 200 names for inquiries that they have yet to carry out?

[The Attorney-General]

The starting point, I think, will be the inquiry carried out by the PSNI and the ombudsman. I hope that that will enable the facts to be established, and will enable some reassurance to be provided—or not, as the case may be—as to whether there are other examples of errors that have been made in these cases. I come back to the point that, on the basis that there were no other errors made, it is quite clear to me that no individual has acquired any immunity from being proceeded against for crimes that they might have committed during the course of the troubles.

[Guy Opperman (Hexham) (Con)]

In my 15 years at the Bar I prosecuted or defended in well over 50 abuse of process claims, and I regret to have to inform the House that very occasionally such mistakes take place. Although my heart goes out to the victims and their families, and while that is clearly a travesty, it occasionally takes place. I entirely endorse the Attorney-General’s approach on that point, but does this case not show that a review by the United Kingdom Government of such sensitive cases is now required, whether in the Northern Ireland context or for other conflicts, by independent counsel, so that such a travesty does not occur again?

[The Attorney-General]

My hon. Friend makes a perfectly good point, and I would hope—obviously, I cannot predict exactly how the matter will unfold—that as a result of the PSNI’s inquiry there will be a wide-ranging review of not only how the letters were sent, but whether anything else needs to be done in that respect.

[Andrew Stephenson (Pendle) (Con)]

If issuing the letters was not part of any legislation that went through this House, what law gave the Government of the day, the current Government or any officials the right to issue them in the first place?

[The Attorney-General]

I certainly accept that what happened was unusual, but I do not think that there was anything unlawful—I have made this point repeatedly—in indicating to a person that they were not sought and that there was no evidence against them in respect of any offences. If my hon. Friend analyses the information, he will understand why that is the case.

Points of Order

Wednesday 26th February 2014 Commons Chamber

13:31

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

On a point of order, Mr Speaker. I do not often raise points of order, as you know, but I seek your guidance briefly. We have just had an urgent question in which the Attorney-General was asked directly who first authorised those letters, but we have not yet had an answer. How best could we go about gaining one?

[The Attorney-General (Mr Dominic Grieve)]

rose—

[Mr Speaker]

I am happy to offer the hon. Gentleman a response, but if the Attorney-General wishes to speak at this stage he is most welcome to do so.

[The Attorney-General]

Further to that point of order, Mr Speaker. I try to pick my words with care so that the House is in no way misled. I am sure that the information can be supplied to my hon. Friend. I indicated that the letters were the collective acts of Government. It may be that we can go even further and identify who sent the letters, if they were Ministers. That is the proper answer to give. It was not the intention to try to conceal that information from him in any way.

[Mr Speaker]

We are grateful to the Attorney-General. I was simply going to advise the hon. Member for Basildon and Billericay (Mr Baron) that these matters can of course always be the subject of further questioning. I know from experience that he is as tenacious in the Chamber as I have found him to be on the tennis court over the years, so I see no reason why he will not pursue these matters if he is so inclined.

[Sheila Gilmore (Edinburgh East) (Lab)]

On a point of order, Mr Speaker. Have you received any notice from the Secretary of State for Work and Pensions that he intends to come to the House to make a statement on his Department’s decision to suspend reassessments of employment and support allowance claimants because his assessors cannot cope with the volume? His Ministers made no mention of that during oral questions on Monday, despite knowing that it had happened. Many applicants are faced with unacceptable delays and want to know what is happening.

[Mr Speaker]

I am grateful to the hon. Lady for her point of order, but the short answer to her question is that I have received no notification of any intention on the part of the Secretary of State to make a statement. I made an observation a moment ago about tenacity in respect of the hon. Member for Basildon and Billericay (Mr Baron) and, from my experience, am sure that it applies with equal force to the hon. Lady.

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

On a point of order, Mr Speaker. On 20 November the Minister of State, Department for Work and Pensions, the hon. Member for Wirral West (Esther McVey), appeared before the Work and Pensions Committee. When I questioned her on inappropriate social security sanctions, she agreed to an independent review being undertaken “on how sanctions in the duration are working”. I subsequently wrote to her and received a letter on 1 February expanding on what she intended to do. However, I have received yet another letter that calls into question whether the independent review on sanctions will now take place. I am extremely concerned that she is reneging on her original commitment made to the Committee and to me in writing. I seek your guidance on how best to hold the Department and the Minister to account.

[Mr Speaker]

I am grateful to the hon. Lady for her attempted point of order. I think that it is fair to say that, on the strength of what I have heard, although the matter is of extreme concern to her, nothing disorderly has occurred. As the Minister is present, she is free to respond from the Dispatch Box if she so wishes, although she is under no obligation.

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

Further to that point of order, Mr Speaker. I did indeed reply to the hon. Lady. I know that she has tried to extend the commitment to an independent review. We said that we would monitor and review, and we currently have replies coming back in relation to a review by Matt Oakley. I know that that is the correct reply and that she has received several replies. I hope that that is the matter closed for the time being.

[Mr Speaker]

I thank the Minister for what she has said. The issue has been aired and I know that Members will accept that we cannot have a wider debate on it now.

Domestic Violence (Legal Framework)

Wednesday 26th February 2014 Commons Chamber

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

13:35

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

I beg to move,

That leave be given to bring in a Bill to make provision for the investigation of allegations of domestic violence, for duties on the police in respect of domestic violence, for risk assessment and training in connection with related criminal proceedings in England and Wales; and for connected purposes.

In March 2013, a new cross-government definition of domestic violence was adopted. It defines domestic violence as

“any incident or pattern of incidents of controlling, coercive, threatening behaviour, violence or abuse between those aged 16 or over who are, or have been, intimate partners or family members regardless of gender or sexuality. The abuse can encompass, but is not limited to: psychological; physical; sexual; financial; and emotional”

harm. At present, not all those behaviours are criminal offences, meaning that there are gaps in the current law that are failing victims of domestic violence. Perpetrators are thus able to abuse their partners without facing arrest for that behaviour.

The principal gap in current legislative provisions is that coercive control is not considered an offence in the law of England and Wales. In the Government’s definition, coercive control is defined as

“an act or a pattern of acts of assault, threats, humiliation and intimidation or other abuse that is used to harm, punish, or frighten their victim.”

That is not currently a legal definition. The Bill I am seeking to introduce today would therefore give the Government’s definition of domestic violence statutory underpinning, meaning that a perpetrator could be arrested for an incident or pattern of incidents of abusive behaviour encompassing, but not limited to, those provided for in the Government’s definition.

The Bill would also provide that a court should request a pre-sentence report prior to sentencing and would give the option for courts to rule that a perpetrator must attend a domestic violence programme when in prison. If found guilty, an offender would be liable, on summary conviction, to serve a community order or up to 12 months in prison, while an offender on conviction on indictment for more serious circumstances could face up to 14 years in prison.

Domestic violence is pervasive in our society. Every minute, police across the country will receive a domestic violence-related call. In 2011-12 there were 2 million victims of domestic abuse in the UK, with 7% of women reporting that they had suffered domestic abuse in the last year. Two out of every three incidents reported to the police are reported by victims who have suffered more than one incident of abuse. Women, on average, report abusive behaviour to the police only after they have suffered at least 30 incidents of abuse. Crime data released by the Office for National Statistics have revealed that reports of domestic violence increased by 2.5% in England and Wales last year, with 838,026 cases in 2012-13.

Those are not trivial incidents. However, according to Women’s Aid, in the five years up to 2011 only 6.5% of domestic violence incidents reported to the police resulted in a conviction. Every week, two women are killed by a partner or ex-partner. Keir Starmer, the former Director of Public Prosecutions, has said that each domestic violence homicide costs the state £1.3 million, quite apart from the obvious personal and family suffering. In 2008 the physical and mental health care of abused women cost the NHS a staggering £1.7 billion.

Anyone can become a victim of domestic violence, regardless of financial means or cultural background, and we therefore need to see a fundamental change in the way in which allegations of domestic violence are treated by the police. I certainly do not think that changing the law, by and of itself, will solve this, but it will go some way towards emphasising the prevalence of this behaviour and its impact on victims.

As I said, the absence of an offence of coercive control is a contributing factor to the low rates of reporting, arrests and convictions in domestic violence cases. At present, our criminal system is perhaps too focused on the physical evidence of violent crimes committed against a victim. Coercive control, on the other hand, does not leave scars or bruises, but is every bit as debilitating. That is why I am concerned with securing greater redress for the predominantly female victims of domestic violence; they can be male as well, of course. From 2011 to 2012, I had the privilege of chairing an independent parliamentary inquiry into reforming the law on stalking, which resulted in new offences of stalking being introduced in March 2012. Inasmuch as it focuses on the psychological impact of a non-physical crime on a victim, the new section 4A offence of stalking involves putting someone in serious alarm or distress. That was pioneering, and it has formed the basis of my recommendations in the Bill surrounding the criminalising of coercive control.

I would suggest that defining a crime in respect of its impact on its victim is the pattern that should be followed in this regard. However, anecdotal evidence suggests that several police forces are choosing not to make use of the more serious section 4A offence of stalking. Regrettably, the vast majority of police forces have yet to implement training in the new stalking laws for all officers. Having said that, I am pleased to note that the latest figures are more encouraging. In the year ending in December 2013, 566 alleged perpetrators reached the first stage in court, of whom 144 were charged with the more serious section 4A offence. Were any new offences relating to domestic violence introduced, it would of course be crucial that the police and the Crown Prosecution Service were made to undergo training in the realities of domestic violence cases and, crucially, the dynamics of abuse. That is why the Bill would place a duty on the Secretary of State to ensure that training is given to criminal justice professionals in any new legislation covering domestic violence. Police would also have a duty to develop and implement domestic violence policies that encouraged the arrest and charging of perpetrators and made investigation of complaints a priority.

In recent months, there has been a great deal of discussion about the need for a more victims-focused justice system, and that is right. Indeed, Keir Starmer has called for a victims’ law—a call that I and many others in this House, I am sure, wholeheartedly support. I believe that any new legislation would need to be informed by the experience of victims. Next week, a coalition of organisations in the domestic violence sector, including Paladin, Women’s Aid and the Sara Charlton Charitable Foundation, will launch, as part of a wider campaign, a sector survey and a victims’ survey, both of which seek to identify gaps in the current legislation surrounding domestic violence. I hope that in the coming months the Government will listen to the findings of those surveys and act on them accordingly.

My Bill is only a starting point for discussions on this topic. It is a working draft, if you will, which I hope will ignite a debate in this place—and beyond, of course—about the changes that need to occur to give greater protection to victims of domestic violence and to ensure that perpetrators of this offence are made to answer properly for their behaviour. I extend my thanks to the Justice Unions Parliamentary Group and to the National Association of Probation Officers for sponsoring the Bill in its current form. I also thank the Members from all parties who have lent their support to the Bill, several of whom are present in the Chamber today. The fact that the Bill has received such cross-party support is really indicative of the appetite for reform that exists in this place.

I end by emphasising that the views of victims must inform whatever changes take place. It is they, after all, whom we are trying to protect, and it is for them that these changes need to occur.

Question put and agreed to.

Ordered,

That Mr Elfyn Llwyd, Mr Robert Buckland, Sandra Osborne, Mrs Cheryl Gillan, Mr John Leech, Sir Bob Russell, John McDonnell, Sir Edward Garnier, Caroline Lucas, Ms Margaret Ritchie, Jeremy Corbyn and Hywel Williams present the Bill.

Mr Elfyn Llwyd accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 June and to be printed (Bill 176).

Opposition Day

Wednesday 26th February 2014 Commons Chamber

[Un-allotted day]

Housing Benefit

Wednesday 26th February 2014 Commons Chamber

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

We now come to the Opposition business, beginning with the prayer against the housing benefit regulations of 2014 in the name of the Leader of the official Opposition. The debate is limited to 90 minutes under Standing Order No. 16(1). I remind Back Benchers that there will be a six-minute time limit on their speeches.

13:46

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That an humble Address be presented to Her Majesty, praying that the Housing Benefit (Transitional Provisions) (Amendment) Regulations 2014 (S.I., 2014, No. 212), dated 4 February 2014, a copy of which was laid before this House on 5 February, be annulled.

The motion also stands in the names of my right hon. Friend the Member for Doncaster North (Edward Miliband), the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Carmarthen East and Dinefwr (Jonathan Edwards) and others.

Let me set out our reasons for calling this debate and forcing this vote today, and the circumstances that have brought us to this position. The matter before us takes us to the heart of this Government’s shabby and shameful record. By statutory instrument, the Government are trying to close a loophole in the bedroom tax legislation without even understanding how many people are affected by these changes. Instead of trying to close this loophole, the Government should finally try to do the right thing and scrap the bedroom tax altogether. This Government promised that they would not balance the books on the backs of the poorest and most vulnerable, but that is exactly what they are doing, and in such a careless, clumsy and cack-handed way that we see chaos, confusion and uncounted costs piling up around us as they compound the injustice of their policies with utter incompetence in their delivery.

This Government’s bedroom tax has been a fiasco from the very beginning. More than half a million households have been hit by this mean-minded measure. Two thirds of those affected are disabled and 60,000 are carers. More than 200,000 families with children are affected, many of whom are already below the poverty line and forced, as a result of this tax, to find an average £728 a year extra in rent—equivalent to losing all the child benefit for a second child. So much for the Prime Minister’s moral crusade.

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

In January, the hon. Lady said that she would place a cap on structural social security spending, so what other cuts in welfare would she make to cover this exemption?

[Rachel Reeves]

Specifically on the bedroom tax, we have said that we would cancel it by closing the loophole in the shares-for-rights scheme, the bogus self-employment in the construction sector, and the tax credit that the Chancellor gave to hedge funds in the Budget earlier this year. We have been very clear about how we would pay for this. In the hon. Gentleman’s local authority of Birmingham, 2,100 households are being affected; I wonder whether he might speak for them and their concerns.

The implementation of the bedroom tax has been a shambles. Ministers have been unable to explain whether the policy is supposed to reduce overcrowding or whether, as their costings assume, people are expected to remain in their properties. There has been uncertainty and inconsistency, with mixed messages about who is exempt, whether it be parents with children serving in the armed forces, disabled people or carers. The truth is that none of them is exempt. Courts and tribunals have had to devote days to debating the definition of a bedroom, and as the unintended consequences become clear, the uncalculated costs are mounting.

[Philip Davies (Shipley) (Con)]

If this is causing so many problems—the Labour party in Bradford seems to think it is, too—perhaps the hon. Lady could explain why the Labour-dominated social housing provider has continued to build three-bedroom house after three-bedroom house despite claiming that it is not able to rent them out, and why Bradford council, which received £1.2 million in discretionary housing payments, has spent only £350,000 of it in the first six months and has not even bid for any of the extra funding the Government made available. If this is causing so many problems, why has the Labour council abandoned all these people?

[Rachel Reeves]

Let us see where Bradford is by the end of the financial year, not just six months into it.

Many of those who are moving because of the bedroom tax are ending up in private rented accommodation which, though smaller, is more expensive. Analysis by the university of York suggests that this could mean the Government paying out £160 million more in housing benefit than had been budgeted for.

Ministers have also been forced to admit that 35,000 of the disabled people affected have had their homes specially adapted for them with, for example, wheelchair ramps, wider doors, stair lifts and accessible bathrooms. If they are forced to move, it has been estimated that the costs of repeating those adaptations in new properties could be as much as £234 million.

According to the latest numbers from the National Housing Federation, two thirds of the households hit by the bedroom tax have already fallen into arrears, hitting the finances of the very housing providers we need to be building more homes to deal with overcrowding, and a staggering one in seven of the tenants affected have already received eviction warning letters.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend share my concern that in Nottingham more than 2,000 City Homes tenants are falling into arrears totalling more than £286,000—money that should be spent on refurbishing existing homes and building new ones? The fact that they are in arrears means that even if there were somewhere for them to downsize to, tenancy restrictions would prevent them from doing so.

[Rachel Reeves]

In my hon. Friend’s local authority area—Nottingham city council—200 people have been wrongly paying the bedroom tax because of this Government’s mistakes. She is absolutely right to mention the number of people in her area who are in arrears and the difficulties they will have in moving.

The eviction warning letters that have gone to so many people raise the threat of millions more being wasted in eviction proceedings and the emergency accommodation that will be needed for those who are made homeless. What a shambles.

[Andrea Leadsom (South Northamptonshire) (Con)]

I have great regard for the hon. Lady, but as somebody who used to work at the Bank of England, she will know that this is not a bedroom tax. How does she calculate that saying in effect that people who have a spare bedroom should no longer have it paid for by taxpayers is somehow a tax?

[Rachel Reeves]

But as the hon. Lady well knows, the reality is that for many of these people it is not a spare bedroom. It is the bedroom that their sons and daughters who serve in the armed forces stay in when they come home; it is the bedroom that their sons and daughters stay in when they are home from university; it is the bedroom that is used to store the dialysis equipment; and it is the bedroom that the carer comes to stay in. These are not spare bedrooms; these are rooms that are needed by many people with disabilities or with children. We can debate whether it is a spare room subsidy or a bedroom tax, but what we do not have to debate is the impact it is having on people. In the hon. Lady’s constituency and mine, and in places across the country, people are suffering because of the decisions this Government are making. The Government should instead do the right thing and cancel the bedroom tax.

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

I was talking the other day to Tony Stacey, the chief executive of South Yorkshire housing association, which is a very well run local association in Sheffield and the surrounding areas. He pointed out not only that its arrears are going up, but that it is spending £200,000 more on helping to advise its tenants and on collection. The National Housing Federation says that when those extra costs of arrears and collection are added up nationally, £1.5 billion of development opportunities will be lost as a result of this Government’s welfare reforms.

[Rachel Reeves]

All that money could have been spent on building the houses we need to deal with the overcrowding crisis and other crises of which the Government speak; instead, house building is at its lowest level since the 1920s.

Let me turn to the loophole. Just when we thought that things could not get any worse, the latest shocking turn in this sad and sorry story was the revelation last month that because the Government could not even draft their own legislation and regulations correctly, many of the households that they had told local authorities should be made to pay the bedroom tax—those who had been in continual receipt of housing benefit for the same residence since 1996—were in fact not covered by the legislation.

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

The hon. Lady referred to the National Housing Federation report and claimed that it said there was cause and effect with regard to the implementation of this policy and arrears. May I quote something to her and then hear what she has to say about it? The report actually said that it is

“difficult…to attribute any observed rise in outstanding arrears since 31st March 2013 to the introduction”

of the spare room subsidy “alone” and that the situation needs to be monitored. Secondly, it said that the vast majority of housing associations reported no rise in evictions. Would the hon. Lady like to withdraw her previous comments?

[Rachel Reeves]

The facts speak for themselves: two thirds of the households hit by the bedroom tax have fallen into arrears and councils up and down the country are trying hard not to evict people, because they know it is the wrong thing to do. They are trying to help people and we should welcome that and applaud them for doing the right thing, unlike this Government, who are failing to do the right thing.

[Mr John Redwood (Wokingham) (Con)]

Could the hon. Lady explain why Labour in office supported a scheme just like this for private rented sector tenants?

[Rachel Reeves]

The right hon. Gentleman knows full well that this scheme is retrospective in a way that the scheme for the private sector was not. The people affected by this loophole have been living in their properties since 1996. They thought they had a secure and permanent tenancy, but it turns out that they do not, because they cannot afford to live in the home they have lived in for, in some cases, their whole lives.

[Mr Duncan Smith]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. You are both up at the same time. Is the hon. Lady giving way?

[Rachel Reeves]

I have already given way to the Secretary of State.

[Mr Duncan Smith]

On a point of clarification.

[Mr Deputy Speaker]

Order. There can be only one person on their feet at a time. It is up to Rachel Reeves whether she wants to give way to the Secretary of State. She has given way to him once already and it is for her to judge whether she will do so again.

[Rachel Reeves]

I shall not give way to the Secretary of State, because he will have a chance to respond in a few minutes and I look forward to hearing what he has to say.

Let us take a moment to reflect on what this means. The Government have been telling local authorities to take housing benefit away from people who were in fact legally entitled to it all along. Most of these people were already in vulnerable positions and will have been pushed even further into severe hardship as a result of this Government’s errors.

Let us look at a few examples. A widower in Staffordshire suffering from mental health problems told of the sacrifices he had to make to find the extra £14 a week he needed to stay in his home. A 56-year-old woman from Rotherham, who receives support for health-related problems, has had to pay more than £700 in extra rent, which we now know was unlawful. In Greater Manchester, a grandmother who looks after her granddaughter, has been diagnosed with depression and anxiety and who paid £200 in additional rent as a result of the bedroom tax fell into arrears and was threatened with eviction from the home she has lived in for 26 years. These people and many like them are now due a rebate, but nothing will compensate for the distress they have been caused or the time and money that the council will have to spend sorting out the mess this Government have caused. And now the Government want to apply the bedroom tax again to these people and thousands of others like them.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

How does my hon. Friend think people will feel when they have the relief of finding out that they are exempt from the bedroom tax, only to then be told that the Government are breaking their necks to close the loophole?

[Rachel Reeves]

Today is our only opportunity to stop the Government closing the loophole, and to urge them to cancel the bedroom tax altogether. We have a chance this afternoon to walk through the Lobbies and either to stand up for our constituents or to stand against them, as this Government have done repeatedly.

Many of the people who have wrongly paid the bedroom tax have already been forced to move and have fallen into arrears with their rent. Because many local authorities do not have electronic records back to 1996 to allow them easily to identify cases that meet the relevant criteria, they have been forced to spend time and money on manual trawls through paper files to begin to sort out this huge mess. What a waste of time and money, and what a mess caused by this Government’s incompetence. Councils up and down this country have been put in an impossible position, and people in need have been put through needless anxiety and uncertainty. As I have said, money that could have been spent on building houses has been spent on having to sort out this mess. It beggars belief that like universal credit—another of the Government’s flagship welfare reforms—this policy has become mired in chaos, confusion and spiralling costs.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

My hon. Friend is making a magnificent opening speech. Does she agree that we will find that the bedroom tax is costing rather than saving the Exchequer money?

[Rachel Reeves]

Closing the loophole will indeed cost a huge amount of money—borne by local authorities that will have to do the work to sort out this mess.

Even as they seek to close this loophole, the Government do not have any understanding of the number of people affected by it. We asked Ministers on the Floor of the House to tell us how many people have been unlawfully charged the bedroom tax as a result of the loophole. On 13 January, the Minister of State, Department for Work and Pensions, the hon. Member for Wirral West (Esther McVey), who has responsibility for employment, told us in a written answer:

“This information is not available.”—[Official Report, 13 January 2014; Vol. 573, c. 449W.]

On the very same day, the Secretary of State told us in this House that

“the number is likely to be between 3,000 and 5,000”.—[Official Report, 13 January 2014; Vol. 573, c. 577.]

The next day, Lord Freud, the Minister for welfare reform, said in another place that

“the numbers involved in this anomaly are small and the amounts are modest.”—[Official Report, House of Lords, 14 January 2014; Vol. 751, c. 106.]

At oral questions this week, the Secretary of State told me that

“some 5,000 people may be affected.”—[Official Report, 24 February 2014; Vol. 576, c. 19.]

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

If 5,000 people were affected across the UK, I would expect about 50 people to be affected in Edinburgh. So far, the council has identified at least 113, and others in housing associations may be affected as well. I am sure that the situation is even worse in other places. Does my hon. Friend accept that as well as the extra cost and waste of money caused by the bureaucratic chaos, many people will apply for and get discretionary housing payments, so the savings to the Government, if there are any, are ultimately likely to be minimal? Why do they not just drop the entire tax completely?

[Rachel Reeves]

That is what we are calling on the Government to do today—to scrap the bedroom tax altogether.

We had no idea of the numbers affected and the Government clearly did not have a clue, so we asked the question that they should have asked: we asked local authorities how many people have been affected. Of 378 local authorities, 197 have now responded, including Birmingham city council, where 2,100 households are affected, Cardiff with 220 and Glasgow with 913, as well as Tory local authorities, such as Cheshire West and Chester council, where 275 households are affected, Tory Peterborough with 200 and Tory Wandsworth with 234—the list goes on. In total, our replies so far suggest that 21,655 households have been affected. That is on the basis of responses from barely half the councils, while many of them have said that they cannot give complete answers that include housing association tenants. It is therefore already clear that not only have this Government made a complete mess of their own policy, but they do not even have a clue how many people are affected by the loophole.

The Government have responded to this fiasco by scrambling to cover up their own mistake. They introduced a statutory instrument to close a loophole in their own legislation, without even giving this House an opportunity to scrutinise and debate it; it is only through this Opposition day that we can have a vote, which is why we called this debate today.

The bedroom tax was misconceived from the start, and it has been incompetently executed every step of the way. The chaos, confusion and extra costs are mounting, with the heaviest price being paid by the poorest and most vulnerable. The Government should scrap the bedroom tax today, but instead they are making it apply to an extra 40,000 households. If this Government will not scrap the bedroom tax, the next Labour Government will do so.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Mr Peter Lilley to make a six-minute speech.

13:59

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

As the Secretary of State responsible for introducing the regulations in 1996, which interacted in an unforeseen way with the regulations last year, I must seek the House’s indulgence at not having recalled the detail of their text and drawn any possible problem to the attention of my successor. However, I assure the House that there was no intention of granting any long-term relief from a change of policy that I envisaged introducing if we had been re-elected and I had remained Secretary of State.

[Clive Efford (Eltham) (Lab)]

Will the right hon. Gentleman give way?

[Mr Lilley]

I will give way not at the moment.

The problem that we face is a huge shortage of housing. We have 1.85 million people on council waiting lists, up 800,000 since 1997. That should be no surprise, given that the previous Government allowed the population to increase by 3 million during that period, with virtually no addition to the housing stock.

The symptom of such a shortage is overcrowding—a word which did not pass the lips of the Opposition spokesman in her speech. During my period as a Member of Parliament, many people have come to my surgery to seek help about a change in social housing. Overwhelmingly, they have been people living in overcrowded accommodation who want a bigger property and seek to move out of a one or two-bedroom property. I have therefore been surprised by the general approach of Opposition Members and by some of the media in saying that no one wants to move out of small properties into big ones and that there are therefore no small properties to be moved into by those affected by the removal of the spare room subsidy.

By chance, I bumped into an old friend who is now the chairman of an organisation called HomeSwapper. Some 80% of local authorities belong to it, and hundreds of thousands of tenants have registered on it that they want to swap.

[Sheila Gilmore (Edinburgh East) (Lab)]

With all due respect to the right hon. Gentleman, the problem with his presentation is that the Government expect to make a fairly substantial saving of some £500,000—they will not actually make it—from people not being able to move. What is the real aim of the policy: is it about people moving, or about trying to extract money from them?

[Mr Lilley]

The policy is about making better use of a housing stock that is in very short supply.

My friend pointed out that hundreds of thousands of people are registered: last year, about 40,000 swaps were arranged; this year, the number arranged on the site has increased by 23%. I went to my local authority to find out its figures. Some 500 or more people registered as council tenants in St Albans are seeking to move, of whom 260 are seeking larger properties, while only 62 are seeking to downsize. I therefore ask Opposition Members to go to their local authorities and find out the actual figures.

[Chris Bryant (Rhondda) (Lab)]

We have.

[Mr Lilley]

Then the hon. Gentleman will know that nationwide, on HomeSwapper alone, 50,000 people with one-room properties are trying to move to larger properties that are available. It is simply untrue to pretend that such properties are not available.

I do not want to use up time unnecessarily in this important debate, so I will just draw the attention of the House again to the fact that we are dealing with a massive overcrowding problem resulting from a shortage of property. The Opposition are pretending that the reverse is the case and that we have a large surplus of rooms that we can allow people to have—it would be wonderful if we had an excess of cheaply available property, so that everyone who wanted an extra room could have it, subsidised and free, from the taxpayer—but we are not in that position. When will they wake up to reality, look at the facts and deal with the real social problem that most of us face, which is overcrowding in council and social properties?

14:09

[Rosie Cooper (West Lancashire) (Lab)]

I congratulate my hon. Friend the Member for Leeds West (Rachel Reeves) and the shadow team for giving hon. Members the opportunity to highlight what a farcical, ill-thought-through and shambolically implemented piece of legislation the bedroom tax has turned out to be. The identification of the technical error, to use the polite phrase, is another example of the fundamental failings of the legislation and of why the policy has been an abject failure from the beginning.

A year ago, I spoke in a Westminster Hall debate on this issue. In the past year, we have found out that the reforms do not encourage mobility in the social rented sector, that they have not strengthened work incentives and that we are not making better use of social housing. In February 2012, the impact assessment exposed the real motivation for the Government’s actions, stating that

“savings in Housing Benefit expenditure will only be realised in full if social tenants do not seek to move from the homes they are under-occupying”.

Fundamentally, the legislation has always been about the rhetoric of being tough on welfare spending. The Government want it to appear as though they are getting welfare spending under control. Sadly, it is just empty rhetoric.

In West Lancashire, only 33 working-age households have transferred to smaller properties and just three tenants have downsized through mutual exchanges, yet more than 1,000 tenants have the under-occupation indicator. Of those, 625 are in arrears, even though 401 of them were in credit or had a nil balance at the beginning of the financial year. In 81 cases, there has been a notice seeking possession against those who had been in credit or had a nil balance on their rents. Those figures are just for the first six months. That shows the speed with which families have been forced into financial turmoil and uncertainty by the bedroom tax.

West Lancashire borough council has identified 150 council tenants who have been affected by the technical error. That is 150 families who have been pushed to the financial edge unfairly and unnecessarily. We know that that is the case because, in trying to resolve the mess, the council has stated that the situation is complicated by those who have claimed discretionary housing payments. In avoiding duplication, the council will have to recover the payments and reconcile them against the tenants’ overpayments. That is what I call a bureaucratic mess, and a very costly one.

[Philip Davies]

Will the hon. Lady explain why she thinks that a single person on housing benefit, who perhaps does not go to work, should be able to live freely in a three-bedroom property, when a couple who are hard at work and cannot afford such a large property have to pay for that property for them? How can she say that it is fair that people who are working hard and who cannot afford such a large property are paying the costs of single people who do not work at all?

[Rosie Cooper]

Only a Government Member could begin to pose that question. The Government need to provide the means to make the change. Single people do not necessarily want to sit in a three-bedroom house. They need a property to go to. The Government need to provide the means to enable them to make that change. I will not be taught any lessons by the hon. Gentleman.

[Yvonne Fovargue (Makerfield) (Lab)]

Does my hon. Friend agree that housing benefit is an in-work benefit, not an out-of-work benefit? To talk about people sitting at home, out of work, on housing benefit is completely out of context.

[Rosie Cooper]

I absolutely agree with—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I know that you are enthused by the debate, Mr Davies, but it does not help if we have a separate debate going on while a Member is speaking. It would be helpful if we could get through all the speakers. I hope to get everyone in.

[Rosie Cooper]

I agree with my hon. Friend the Member for Makerfield (Yvonne Fovargue). I did not hear the hon. Member for Shipley (Philip Davies) say that those people were out of work.

The idea that welfare spending is coming under control is a myth. West Lancashire borough council has stated that its intention is to raise rents by 4.6% from April. That will increase housing benefit payments by £630,000 a year. We are seeing a significant and rapid increase in the council’s arrears. From being in the region of £375,000, they have shot up to nearly £500,000. How is that keeping welfare spending under control? Arrears are increasing across the sector. Social landlords have had to take on additional staff to collect rent and give budgeting advice.

Let us not forget that the Government have acknowledged that they have made a complete mess by rushing to prop up the housing benefit system using discretionary housing payments. Disabled people and people who need their own bedroom for medical reasons are going cap in hand to prove that they are poor, to get a discretionary housing payment handout. I understand that a large amount of discretionary housing payment is going unspent because the council’s means test is too stringent.

Some councils, believe it or not, are taking disability living allowance into account when determining whether someone should receive discretionary housing payment, even though the guidance from the Department for Work and Pensions states that councils should not do so because it inflates a disabled person’s income unfairly. Disability living allowance is meant to fund additional costs that are due to the claimant’s disability or health issue. It is not meant to fund the additional housing costs resulting from the spare bedroom tax.

Discretionary housing payments should be awarded for 26 weeks or 52 weeks, but some councils, including West Lancashire borough council, are offering them for only 13 weeks, which leads to more form-filling and bureaucracy.

There is no escaping the fact that welfare spending has to be addressed. However, the snapshot that I have given of West Lancashire—just one community—shows that the bedroom tax is not the way to do it. The abject failure of this policy is costing taxpayers more and more. Although Ministers are talking tough, they are, as ever, failing to deliver. In their case, talk is not cheap. The only transitional arrangement that we need to discuss is the transitioning of this legislation off the statute book.

14:17

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

This morning, I received an e-mail that says:

“Hi can you help me, I am in a council flat 1 bed room, I have 2 kids and a partner so that is 4 of us in a 1 bed room flat”.

I actually received two e-mails, but I have left the other one in my office. We must not forget the people who are in overcrowded accommodation.

The shadow Secretary of State said a couple of weeks ago that Labour would cap the structural social security budget. She used the word “structural” on the basis that, as unemployment goes up and down, it does not affect the structural deficit, and Labour has said that it will cut the deficit. We have to find the money from somewhere.

This policy encourages people to make better use of rooms. To give an example from my constituency, a lady who is in a three-bedroom house has arranged for her relatives to join her and give up their private rented accommodation, which was costing the taxpayer £5,000 a year through the welfare budget. Therefore, there is a saving of £5,000 a year and better use is being made of the property. They now have only one TV licence, one water bill, one gas bill and one electricity bill. Financially, it is a far better situation for everyone. We are not having to attack or cut any other benefits. We are able to maintain the value of benefits.

The shadow Secretary of State said—not in this debate but at the Institute for Public Policy Research—that the Opposition would cap the welfare budget. The difficulty with their position is that they would give an exemption just to those who have been out of work since 1996 and not to people with disabilities. There is no question but that there are people with disabilities who need a spare room. I have managed to get discretionary housing payments for such people. I am pleased that, due to the announcement on DHP for the next two financial years, we should be able to provide it for a longer period. Furthermore, I want the rules to be changed to provide an automatic exemption. I accept that it is difficult to do that. That is why the Department won the case in the Court of Appeal. The Department is working on the detailed regulations.

This policy encourages better use to be made of accommodation, saves money for the public purse and reduces overcrowding. It also means that we do not have to cut other parts of the welfare budget. The real challenge is how we manage the overall budget.

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

In Oldham, 2,048 households are affected by the bedroom tax, with 500 properties suitable for them to move into. Where does the hon. Gentleman suggest they go?

[John Hemming]

I can talk about Birmingham better than I can about Oldham. In Birmingham, by mid-January roughly a quarter of people in council properties had ceased paying extra rent for a spare room due to changed circumstances—they might have found family members to join them or have downsized. Some 521 households wanted to transfer, but sadly, 380 had arrears, and for some reason the council was blocking them from transferring. I think that that is appalling. Let us suppose somebody is happy to downsize to a flat such as the one I mentioned a moment ago. There may be a four-person family in a one-bedroom flat, and 380 people who want to downsize because of having to pay for the spare room, but the council is blocking that because of arrears. I am told that it is sorting that out, but I still see loads of people in overcrowded situations. I am sure that the situation is similar in Oldham, although I obviously do not have the same figures. I do, however, have figures for discretionary housing payments.

[Mrs Anne McGuire (Stirling) (Lab)]

Following the advice of the right hon. Member for Hitchin and Harpenden (Mr Lilley), I have checked HomeSwapper in the Birmingham area. I have got to page 20 and I found only five one-bedroom houses. Where are the places for people to downsize to in the hon. Gentleman’s constituency?

[John Hemming]

I got another one today. They may not be on that website, but they do exist—[Interruption.] They do exist; I have them in my casework files. I have three people living in a council bedsit, and quite a few cases of four people living in a one-bedroom flat. I have written about those cases to the council. I accept that they may not be on a website—I do not deny that—but they do exist. People really do have problems. They have shown me photographs of how they live in overcrowded situations.

[Ian Lavery (Wansbeck) (Lab)]

There is not enough smaller, one-bedroom accommodation for people to move into—that is a fact. The bedroom tax will increase housing benefit—that is a fact. Why does the hon. Gentleman not just admit that this is a merciless attack on the vulnerable, the disabled and those least able to speak up for themselves?

[John Hemming]

Because none of those things is a fact. Lots of people are living in overcrowded situations. I see them at my Saturday advice bureau, and two people wrote to me today. Those people are looking for accommodation.

The Opposition have said that they want to cap the structural welfare budget, but if they are going to spend more money on providing free rooms for people who do not need them, where will they get the money from? Will they cut disability benefits? Today, the Opposition propose to give a special exemption to people who have been on housing benefit since 1996. If they proposed a special exemption, with valid rules, for people with disabilities who needed a spare room and to transfer that money out of the DHP, that would be worth looking at. They are picking the wrong analysis for this.

I have always managed to succeed for my constituents who needed DHP because they have disabilities and need a spare room. I have never had a problem getting DHP. As of last week, having got extra money from the Government, Birmingham’s DHP budget still contained just over £600,000. Birmingham is managing to spend that money, look after people and protect those with disabilities, and not to exhaust the budget.

[Sheila Gilmore]

Did the hon. Gentleman—he may have done—support an amendment tabled in the House of Lords and in this place that would have meant at the very least that no one should have their housing benefit cut unless they had refused a reasonable offer of a house?

[John Hemming]

With the charges for a spare room, it has taken some time to identify those people who are willing to transfer. Discretionary housing payments have been made available to people. I have seen payments for DHP go through. People come and talk to me about their personal problems, and I work to get them resolved. I do not think I voted for that amendment, but I have not checked the records so I do not know. It is important to remember that the quantum of DHP is critical. The Government have recently announced DHP for the next two financial years, and that is how we protect people with disabilities who need a spare room for one reason or another. However, it is not possible to achieve that and give this exemption or that exemption.

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

The hon. Gentleman makes great play of saving money, but if it were a perfect world and there were properties to move into, according to the Government’s impact assessment that would not save any money. If people cannot move and they get DHP, that does not save money either. How will all the money be saved unless it is taken from those who have no choice?

[John Hemming]

I did explain that point, looking at examples of those who take in family members. Cases in Redcar have been cited where, because of the interplay between the non-dependent deduction in housing benefit and the spare room rent, it is now in parents’ financial interests to keep their adult children in the property, which it was not previously. That is a way to reduce the overall cost to the housing benefit budget without reducing quality of life.

14:25

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I do not know quite how to follow the hon. Member for Birmingham, Yardley (John Hemming), but I will do my best. I will try to be brief because others wish to speak.

Apparently the bedroom tax is officially known as the social sector size criterion. That says it all about this Government’s attitude to tenants in socially rented housing: they do not have the same right to a stable home environment as everyone else. I do not know whether the hon. Gentleman has, or has ever had, a spare room in his home, or stayed in one place for a length of time, regarded it as home, and then felt that he was being forced to move. It is not a pleasant feeling.

[John Hemming]

I have had spare rooms, and I have taken in refugees from Croatia and a refugee from Jersey.

[Sandra Osborne]

I am sure that is very kind. However, I am a mother and a grandmother. I love my family dearly, but I do not want them to live with me all the time.

As if by magic, the plan was that thousands of tenants throughout the land would move to mythical smaller properties—they do not exist—freeing up larger properties for overcrowded families, or find an average of £720 a year, which they do not possess. Not a cunning plan, but a cruel, uncaring and illusory plan that has seen more than 4,500 of my constituents suffer. Within months of the bedroom tax being introduced, 62% of my constituents in East Ayrshire council were in arrears, and the figures continue to rise.

[Bill Esterson (Sefton Central) (Lab)]

I wonder whether social landlords in my hon. Friend’s constituency are trying to help people in the same way as One Vision Housing does in Sefton. It states that

“we are helping tenants to downsize in order to avoid the bedroom tax, however with limited availability of one-bedroom properties it is becoming simply unavoidable.”

As of November, 4,963 people wanted a one-bedroom property, but just 10 were available. Does my hon. Friend have a similar situation in her constituency, which shows just how unworkable the policy is?

[Sandra Osborne]

I do indeed, and the policy is putting more pressure on the housing service, not taking it away. I also fear for those who have struggled to pay the bedroom tax, because I know fine well they cannot afford it. I worry about where they are getting the money from, and whether it is pushing them in other directions such as food banks or very high-interest loans. It is not possible for me to over emphasise the fear, concern and anger that the bedroom tax has caused, together with the Atos debacle and the fact that people are being suspended from benefits at the drop of a hat.

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

My hon. Friend’s constituency is similar to mine. Is it her experience that the people who come to see her about the bedroom tax are disproportionately the disabled and carers, and does she agree that it is particularly distressing for those groups?

[Sandra Osborne]

That is one thing that causes a great deal of anger among those affected, and also among the general public in my constituency, who happen to be very caring people. When she sums up the debate, will the Minister confirm whether the Government intend to retain the Scottish welfare fund?

We are here to talk about the sheer ineffectiveness and shambolic implementation of the bedroom tax. What kind of policy requires mitigation for more than half the people affected? Some 70% of applications have been approved for discretionary payment, with more applications all the time in one of my areas. The revised budget will be fully spent by the end of the year—there is no big surplus, as was inferred earlier.

[Mel Stride (Central Devon) (Con)]

What I am not clear about is this: what does the hon. Lady say to the 1.5 million people on the housing waiting list or to the 250,000 people living in overcrowded accommodation—perhaps having to sleep on the floor or on sofas—when her party is advocating a policy that uses taxpayers’ money to provide a surplus room for others?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Long interventions will not help us to get through this debate. There are too many interventions. People should not just come in and intervene; they should enter the debate.

[Sandra Osborne]

It is of course acceptable that where people wish to downsize they should be helped and incentivised to do so, but they should not be forced to do so. In any case, it is clear that the housing is not available, and that this policy is not working and is not practical.

It is of course very welcome that we in Scotland have benefited from the decision of the Scottish Government fully to mitigate the bedroom tax, in recognition that it is fundamentally unfair and that people, who are already finding it difficult to make ends meet, are struggling because of it. It will be important for Scottish Members to monitor the detail of how assistance will be given as the proposals in the Scottish Government’s budget are implemented. It is just a pity that it took so long to achieve, because many people have struggled and still are struggling. Some have already moved into private accommodation at exorbitant cost and have lost their long-term home. It is a good example of what devolution can achieve and I commend it to our friends in England.

Now that we have discovered this loophole, it has emerged that a number of people—those who had been in the same local authority house since January 1996 and been continuously entitled to housing benefit—should not have had their benefit reduced as a result of the bedroom tax. How could this have been allowed to happen with such a sensitive and controversial measure? I am currently in contact with the local authorities that cover my constituency to ensure that the people who qualify for this exemption from the bedroom tax are fully reimbursed. Sixty-eight cases have been identified so far in one council area, so that figure can be at least doubled when taking into account the whole of my constituency. The exemption will be backdated to 1 April 2013, but the Government will be taking steps to remedy the loophole “shortly”. The measure will be reinstated as soon as that happens—talk about raising hopes and then dashing them.

The whole policy is an absolute mess and a disgrace. It will do nothing to solve the housing problem and it should be abolished immediately.

14:32

[Heather Wheeler (South Derbyshire) (Con)]

I want to remind Opposition Members that the ethos behind the spare-room subsidy has been around for a very long time. I repeat what I said in an earlier debate: what have Opposition Members been doing to ensure that their councils talk to the Homes and Communities Agency and housing associations about the number of properties they need in their areas? My council, South Derbyshire district council, which I am very proud of, sorted out what the numbers would be; how many units we needed to swap; and what was going to be needed with the discretionary housing payments. We also opened up an early dialogue with all our tenants.

[Bill Esterson]

Perhaps the hon. Lady can tell me how, overnight, she could expect Sefton council, working with its social landlords, to provide 5,000 one-bedroom properties? That was the number of properties needed. How was that supposed to happen?

[Heather Wheeler]

That is the whole point: it was not overnight; there was at least two years’ notice. [Laughter.] Opposition Members may laugh, but in two years more than 140 one and two-bedroom units have been built in South Derbyshire. What, my friends, were Opposition Members doing to look after their so-called vulnerable people?

[Chris Bryant]

I presume that the hon. Lady is going to vote with the Government to close the loophole. I presume she will only do that—or else she would think herself to be cruel—if she knows how many people she will be adding to the list of those affected by the bedroom tax. Does she know that number for her own constituency? Does she know the number for the country? [Interruption.] I do know the number.

[Heather Wheeler]

I am very glad the hon. Gentleman knows the number for both; I am sure he is going to tell everybody. However, the most important thing today is that there is an anachronism. Opposition Members are living in the old days. When will Opposition Members wake up to see that there is massive overcrowding and that we need a massive new building programme? As ever, they are living in the old days and are doing nothing about looking after the most vulnerable people. The Opposition are living in fantasy land and that will not look after the most vulnerable people. They do not deal with the real problems in society: overcrowding; people who have been waiting and waiting to get decent housing; and people who have been on housing benefit for goodness knows how long because they have been brought up to stay in that sort of society. That is not good enough. That is not the society we want to have in the future. I see those on the Opposition Front Bench hanging their heads in shame. I hope the cameras can get that, because that is the truth of where we are.

[Katy Clark]

Does the hon. Lady agree that the real problem is that we do not have enough social housing?

[Heather Wheeler]

In the last two and a half years what conversations has the hon. Lady had with her council? My district council is now building council houses. My Conservative council is building one, two, three and four-bedroom council properties. What have Labour Members been doing?

[Mr Duncan Smith]

My hon. Friend is in full flow and I think she is magnificent. May I remind her that the answer to that question is that under the previous Government the building of social housing fell to its lowest level since the 1920s? Opposition Members talk a lot about it, but they did absolutely nothing for those living in overcrowded accommodation.

[Heather Wheeler]

That says it all. I know that this is meant to be a 90-minute debate, but I wonder whether the Opposition want to give up now because we are having the most ludicrous conversation. I feel so sorry for the voters and residents who are looked after by people who scream and shout and say that they look after the most vulnerable people in society, but physically do nothing about it.

[Sheila Gilmore]

rose—

[Mr Betts]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am just going to help a little bit. I am sure that the hon. Gentleman wants to catch my eye, in which case he will not get in at the moment because of how many interventions we have already had. That is how bad it is: we are cutting each other’s speaking times down. That will have to go down to four minutes shortly and some people will drop off the end.

[Heather Wheeler]

I thank the hon. Member for Sheffield South East (Mr Betts) for staying seated. I am sure he will make a magnificent speech in a while.

I finish by saying that can Opposition Members please have serious conversations with their local housing associations, the Homes and Communities Agency and the big providers—the Legal & Generals, the big insurance companies and the other people who want to invest in big infrastructure? If there is an absolute need for one and two-bedroom rented properties in their constituencies, they should open up those conversations. Legal & General, among other insurance companies, wants to take on long-term rented properties. Please do not have a whinge and a moan in this Chamber. Opposition Members should get out there, do their jobs and see what they are meant to be sorting out for the vulnerable people in their constituencies.

14:38

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

The speeches we have heard from the Government Benches demonstrate very clearly that there is a Liberal Democrat-Tory world and there is the real world. The issue we are debating is the most blatant example of this Government’s total inability to understand how people live. To them, a spare bedroom is simply an unused sleeping space that must not receive housing benefit, but the many constituency cases that I have needed to deal with show that it is by no means so simple.

One reason why this cruel tax does disproportionate damage to the disabled is that the so-called spare bedroom is very often used by a non-resident carer. They might not sleep in it every night, but its use is indispensible to the welfare of the disabled person. Arrangements of this and related kinds cannot be categorised by the over-simplistic language of parliamentary draftsmen, let alone the policies of this Government. There are all kinds of other reasons for those rooms, depending on individual, family-by-family arrangements, that outsiders cannot begin to understand and that this Government do not wish to try to understand.

The Government’s simple cure is: “Move to a smaller house.” They must be living in a dream world. Have they never heard of the housing shortage, made much worse by their policies? My constituency has 75,000 electors. In the three or four years that this lot have held office, there have been 340 housing starts in my constituency, which is only 60% of the low national average. In Manchester, under a Labour Government, the council used to build 3,000 new houses a year. Because of Tory cuts—Manchester has been hit harder by this Government’s cuts than any other local authority—Manchester city council can now build none. There is no new social housing at all in my constituency, and private landlords are too often predatory.

I had a woman come to see me on Saturday who was totally frantic. She lives in a shorthold tenancy, but has been given notice to move at the beginning of April. Not only can she not find any accommodation for herself and her two children, but the freehold owners have sent her the ground rent bill, which is the liability of the landlord, who is evicting her. That is real life in the Gorton constituency. When somebody does manage to get rehoused—such as a constituent who was a victim of the bedroom tax who came to see me the week before—the consequences are so confusing or even catastrophic that they lead to potential eviction from the new home.

This is real life, not the theorising of the Liberal Democrats—we remember them in Manchester, which is why this year there will be no Liberal Democrats left on the city council—or the Tories. What they are doing—and they are doing it with great calculation, because of its political implications—is transferring tax liability from the better-off, who they hope will vote for them, to the disabled, who will not vote for them. This Government build castles in the air. They do not build houses and they make life hell by causing tragic difficulties for people who are in houses. The Government create misery wherever they go, and the sooner they go, the better.

14:44

[Caroline Lucas (Brighton, Pavilion) (Green)]

I am pleased to be able to speak relatively soon after the hon. Member for South Derbyshire (Heather Wheeler), because there was a sense of breathlessness when we were listening to the complacency and, frankly, arrogance of her comments about the kinds of people I see in my surgeries day in, day out. Those people are suffering partly because there is not enough affordable housing. Nobody is saying that there is enough affordable housing, and all Governments in recent years should have done a lot more. However, the idea that pushing people out of their homes into properties that do not exist is in any way helpful, either in economic terms or for the housing crisis, is deeply misguided.

At the start of this month I tabled early-day motion 1057 to pray against the statutory instrument that we are opposing in today’s debate. When the Leader of the Opposition came and asked whether he could put his name at the top of the prayer to push the debate forward, I was of course happy to agree. I welcome his support and the continued strong opposition to the bedroom tax from colleagues across the smaller parties and, indeed, some senior Liberal Democrats. Many Members of the House are joined in opposition to the Government’s bedroom tax and their attempt to undo a drafting mistake they made when they pushed through this nasty legislation. We know that the legislation is cruel and counter-productive.

As others have said, the Government’s drafting mistake means that some people are exempt from the charge and should not be made to pay it, but now the Government want to ensure that from March all those people will finally be trapped by the bedroom tax. I hope that Ministers will listen today, because it is not just rhetoric. The strong cross-party opposition to the policy comes from our listening to the people we see in our surgeries. We are not talking about a “spare room subsidy”, or about the taxpayer subsidising the unnecessary luxury of an extra room. In case after case, we see that the rooms are not spare, but essential. As we have heard many times, DWP statistics show that more than two thirds of those affected are likely to be people with disabilities. The tax is pushing disabled people from adapted properties. It is sending people to alien places, away from the support networks they have relied on all their lives.

The effect of the policy is to turf out the person with severe mental health problems who has been settled for years and is deeply distressed by change, but who perhaps has a tiny box room in their home. They cannot take a lodger because of their unpredictable episodes and they cannot afford the rent because the box room means that their rent has gone up, yet there is no smaller property available locally. I asked Ministers a year ago what was supposed to happen to those people. They did not answer then and they are not answering now.

This is a policy that springs from a reactionary, anti-benefits narrative that takes no account of people’s real circumstances. In Brighton and Hove, the minority Green administration is doing everything it can with the tiny amount of money given to it to protect people from this Government’s pernicious policy but, as predicted, people are massively struggling. Without even counting housing association tenants, there are 286 council tenants newly in arrears because of the bedroom tax, 199 of whom have a disability.

As well as being callous and cruel, the bedroom tax is counter-productive. There are simply insufficient smaller properties for people to move to, as the Government have repeatedly been told. People are faced with poverty and debt or with moving into the expensive clutches of the private rented sector, where their housing benefit bills will be even higher. Pushing people from their homes is not saving money and it is not solving the housing crisis either.

The bottom line is that we have nowhere near enough affordable homes—I would certainly agree with the Government about that. Successive Governments have caused the housing crisis, not the poor people who are now struggling to cope with it. It is not the fault of people who cannot get a job, or of disabled people or people who need overnight care. The crucial problem—this is where the fault lies—is the epic failure of both this coalition and the previous new Labour Administration to build sufficient council housing. The Tories pushed the decimation of the stock with the right to buy, ignoring the right to rent; new Labour tweaked the enormous discounts but did not grasp the nettle and build council housing. In 2007-08, for example, only 350 new council homes were built across the country. However, it is deeply unjust to penalise people who are struggling at the bottom of a deeply distorted housing market, over which they have little or no control, for the omissions of previous Governments.

What do the Government say? Lord Freud called the exemption that we are trying to preserve today an “anomaly” and says that the number of people affected is “small”. That detached language shows how out of touch the Government are. We have heard already from the Opposition Front Bench that the figures are vastly higher than that—at least 20,000 and probably much more, because that figure is based on only council returns so far. What precisely will Ministers do to rectify the injustice done to individuals who have been denied their full benefit entitlement? What about the people who, as a result of the error, have newly fallen into rent arrears, which have negatively affected their credit rating, for example? What about those who have left their homes in response to the tax and given up their security of tenure, when they did not have to pay the tax in the first place? How will they be compensated? The mess made by this mistake is surely yet another reason to scrap this contemptible tax entirely.

In conclusion, the tax comes from an aloof Government, some of whose members are detached from reality, who simply do not know what is going on and moreover do not care. I hope the regulations are stopped today, because any hon. Member who walks through the Lobby to extend the reach of the bedroom tax will be harming even more people with disabilities, with even more people pushed into debt, forcing more people away from their communities. The only way to clean up this mess is to scrap the entire bedroom tax once and for all.

14:49

[Lilian Greenwood (Nottingham South) (Lab)]

Today we are hearing Government Members defend a bad policy that just gets worse: a policy that is hitting thousands of disabled people, causing arrears and debt, and leaving vulnerable families in despair.

Nearly 5,000 households in Nottingham are affected by the bedroom tax, and the vast majority are tenants of the city’s arm’s length management organisation, Nottingham City Homes. Since the introduction of the tax in April 2013, over 2,000 of those tenants have fallen into arrears totalling more than £250,000, and our ALMO has been forced to spend an additional £300,000 on staff and resources to deal with the extra demands on rent arrears teams. That adds up to more than £500,000 that could and should have been spent on refurbishing or building new homes.

As we have heard, two thirds of the households affected by the bedroom tax simply cannot find the money to pay their rent, and are accumulating ever-increasing arrears. We have heard heartbreaking stories about how the policy is wrecking lives, contributing to a growing affordable housing crisis, and wasting millions. It must be scrapped.

The Government pretend that people can downsize, but in reality that is nonsense. People who are in arrears often face tenancy restrictions that bar them from applying for new, smaller properties, and in any case there simply are not the homes for them to move to. In my constituency there are just 16 one-bedroom social homes available, and not a single two-bedroom home—in a city where 1,161 tenants are waiting to move to one-bedroom properties, and 1,083 are waiting for two-bedroom properties.

Most tenants are loth to give up secure social tenancies and downsize to smaller properties in the private sector, and the Government’s projected savings rely on their not doing so. The average social rent for a two-bedroom property in Nottingham is £64.02, but the average private rent for a one-bedroom property is £88.85. Do the maths! If tenants did move, the housing benefit bill would rise substantially.

The truth is that the Government know that most people cannot afford to pay the bedroom tax. Trapped with nowhere to go and facing an increasing cost of living, more and more poor and vulnerable families in Nottingham are turning to food banks and payday lenders simply to pay for basic essentials such as food, children’s clothing and fuel bills.

My local homelessness charity, Framework, has been recording the experiences of some of its service users who are affected by the Government’s policy. One of them, who lives in a two-bedroom property, has become disabled and cannot use the stairs, but she cannot move to a one-bedroom, single-floor property because she has rent arrears as a result of the bedroom tax. Another is a 60-year-old man who suffers from agoraphobia and panic attacks and finds new places and changes stressful. He is lucky enough to have a support network of family and friends in his neighbourhood, and, understandably, he does not want to move. Now he has arrears of hundreds of pounds, and could not move even if he wanted to.

Do Ministers really think that this is the way to treat vulnerable people with complex needs? It is clearly not the best way to tackle the shortage of larger council homes, or the problem of overcrowding. The latest loophole will add to the burden borne by hard-pressed local authorities, and it could affect as many as 40,000 households, but Ministers continue to claim that it will affect only a few. Ministers ignored social housing providers when they warned that the bedroom tax would be a disaster. How bad do things have to become before they actually start to listen?

The Government are in utter denial about the impact of their cruel and iniquitous policy. Tory and Liberal Democrat Members arrogantly dismiss those who dare to highlight the damage that it is doing to the lives of our constituents. Well, if they will not do the right thing and scrap it, the next Labour Government will.

14:53

[Andrea Leadsom (South Northamptonshire) (Con)]

I despair of Opposition Members who first insist on calling the spare room subsidy a tax, and secondly insist that it is utterly unfair to everyone. What they fail to accept is that the previous arrangements were totally unfair to taxpayers and to those in the private rented sector. Opposition Members wish to preserve an old system under which the maximum paid by the taxpayer for housing benefit reached £104,000 a year. They need to understand that that was completely untenable.

Between 2003 and 2012, overcrowding increased from 5% to 7%, leaving hundreds of thousands of people in overcrowded housing and 1.5 million on the housing list. How fair is it to allow people who have more bedrooms than they need to stay in that accommodation, leaving others facing bed-and-breakfast accommodation, homelessness or severe overcrowding?

Most of the constituents who talk to me about the spare room subsidy talk about their absolute need for more space, not less, for their families. The only person who has ever complained to me about having to move out of his or her home was a lady who said that she had raised three children there. It was a four-bedroom home, and she did not see why she should move out of it now that she was on her own in case they ever wanted to come home for the holidays. Can Opposition Members honestly, in all conscience, support someone remaining in those circumstances, against the 1.5 million people who are on the housing registers? They talk of fairness and of what is right and just, but they are talking nonsense to the people who are footing the bill and to those who have nothing.

In the 13 years of the last Labour Government, housing benefit rose from £11 billion to £21 billion a year. That is £900 for every household in the country. Is it fair on working families that they should be supporting housing benefit to the tune of £900 per household?

Let me end by asking Ministers some questions. What more can we, as a Government, do to make constituents aware of the enormous amount in generous discretionary payments that is widely available, and can we do more to promote house swap schemes? Many people talk about the unavailability of smaller properties, but they are talking about empty smaller properties rather than about house swaps. I think that swaps have huge potential, and a great deal of work is being done to promote them in my constituency.

Can Ministers confirm that discretionary payments will continue throughout 2014 and into 2015? Can they also confirm that the Government have made huge efforts to ensure that new houses are built? Are they still on target for the building of 170,000 new affordable homes by 2015? Finally, can Ministers explain why there was such a big underspend of discretionary payments last year, and what they can do to ensure that councils provide as much help as possible for those who need it?

14:57

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

I am pleased to be able to contribute to the debate. I pay tribute to the hon. Member for Brighton, Pavilion (Caroline Lucas) for all that she has done to bring this issue to public attention.

The loophole in the regulations that we are discussing exposes just how poorly thought through the bedroom tax legislation has been from the start, and affords us a timely opportunity to take stock of how the legislation has been working in practice since its introduction last year. Today’s debate has revealed that the policy was, from the start, nothing more than a cash grab from those on the lowest incomes who were already living in the cheapest houses.

In Scotland, 80% of the homes affected by the bedroom tax are the homes of people with recognised disabilities, who already have the least choice about where and how they live. There is a broad political consensus in Scotland that the tax is proving to be unworkable, and that it is only harming disadvantaged tenants but damaging councils and local housing associations, undermining social cohesion in our communities, and harming the social fabric as a whole. Under the terms of the Scotland Act 1998 this area of policy is reserved to Westminster, so we have been stuck with Ministers whom we did not elect, imposing a policy for which we did not vote. Nevertheless, Scottish local authorities, the Scottish Government, and our housing associations and advice bureaux have had to mop up the mess over the last 10 months.

There is now clear evidence that the bedroom tax is costing taxpayers more than it is saving. The Convention of Scottish Local Authorities has analysed the cost of implementing the policy in relation to its projected savings, and concluded that a policy that was supposed to save about £50 million a year in Scotland is actually costing about £60 million a year to implement. Detailed research undertaken by COSLA with six councils also revealed disturbing trends in the patterns of arrears accruing in the social rented sector. In the first six months of the policy, an additional 31% of tenants affected by the tax were in rent arrears, and many of them had never been in debt before. Squeezing the bedroom tax from people on very low incomes who just cannot afford it is causing huge distress and worry to tenants, including those who are managing to pay, but it also has serious implications for social landlords and for the solvency of housing associations in particular.

[Caroline Lucas]

The hon. Lady is making a powerful case but does she agree that this is about a lack of affordable housing and, until we address that, the things that we are talking about will not get solved?

[Dr Whiteford]

I agree that the lack of affordable housing is a core issue, but there is also a chronic mismatch between the needs of prospective social tenants and the available housing stock. I have made the point many times in the House that, across Scotland, over 60% of tenants need a one-bedroom property, yet only 23% of the housing stock is one-bedroom size. Even if everyone were to be allocated a home of the requisite size, there are just not enough smaller houses to go around.

There has been a lot of talk today about the shortage of housing. The Scottish Government have managed to deliver more social housing than any other Administration in the UK, even on a fixed budget—a diminishing budget. It is a matter of political priority. If we understand there is a housing shortage, we need to fix it. There is no excuse.

Local authorities, housing associations and the Scottish Government have all had to take action to minimise the unwanted side effects of the bedroom tax, not least by topping up the budgets for discretionary housing payments by £20 million in the last year, which is the maximum amount allowed under section 70 of the Child Support, Pensions and Social Security Act 2000, and by this year making available £35 million for discretionary housing payments, which would, in effect, enable councils to mitigate the entire impact of the bedroom tax for everyone affected. However, as I have said, this remains a reserved matter, and the Scottish Government have had to request permission from UK Ministers to increase the DHP budget. As far as I am aware, the Deputy First Minister is still awaiting a reply to her letter of January to Lord Freud making that request, so can I press Ministers today to listen to the Scottish Parliament’s view on this matter—a view supported by four parties, including their own coalition partners, the Liberal Democrats—and impress upon their ministerial colleague in the other place to crack on and signal his consent? Frankly, it is a travesty in the 21st century that a democratically elected Parliament has to ask permission from an unelected peer to spend its own people’s money. I hope that that is one anachronism that we can put right this September.

The money we are having to find to do that in Scotland must be found from budgets for other devolved policy areas, but given the substantial knock-on costs the policy is having for devolved institutions and housing associations, the democratic consensus around the issue and the distress it is causing to disadvantaged people, I do not think standing aside is an option. Although today we are debating a technicality, it is a technicality that exposes deeper flaws in the housing benefit legislation and exposes the warped values and misconceptions that have informed it.

From the start, the bedroom tax was unfair and ill conceived. Now, nearly a year on, it is not only failing to meet its own policy objectives, but creating needless bureaucracy and displacing large costs on to other parts of the public sector. A policy that costs the public purse more than it saves is a bad policy. A policy that harms our most disadvantaged citizens is a bad policy. A policy with big technical loopholes is a bad policy. I urge the Government to do the right thing and abandon the policy today.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Sheila Gilmore. If you could end your speech at five minutes past 3 so the Minister may begin her response then, that will be helpful.

15:02

[Sheila Gilmore (Edinburgh East) (Lab)]

There is a fundamental incoherence at the heart of this whole policy. We have heard impassioned pleas from some members on the Government Benches about how much they care for people in overcrowded housing and that this is a policy to help with that situation, but at the same time it is clear from the Government’s own financial projections that they expected to make savings from people not being able to move and having to pay the extra. That is the fundamental inconsistency. The savings are going to be outweighed not just by discretionary housing payments but by the cost of administering them, of giving people additional advice and support and of employing more staff to do so. All that is being shouldered by local authorities and housing associations, and it has to be taken into account when looking at overall public spending.

DHPs do not make up for the fact that many people are suffering. These are real people. A constituent of mine was a cancer sufferer; he is in recovery. He has three children whom he wants to have with him at weekends. One is autistic—where is he supposed to put that child in a one-bedroom property? Is he not allowed to have a life? He did not qualify for DHPs first time around because his DLA was taken into account, so it is not a straightforward case of saying “People will be all right, even those who are disabled.” Why should people be made to make repeated applications instead of being exempted? The Prime Minister at times seems to think that those people are already exempted, but he is clearly wrong.

I am sorry to tell the hon. Member for South Derbyshire (Heather Wheeler) that many of us are deeply concerned about housing in our areas. New houses have been built in my city, but this week only 23 one-bedroom properties are available, of which five are sheltered accommodation. They are not suitable for people in this position. The houses just are not there at the moment, so why should people pay a tax, which is what it is, until that is sorted out?

[Mr Lilley]

Will the hon. Lady clarify—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I think the hon. Lady has finished her speech, which is helpful because I am sure Members would like to hear from the Minister as well.

15:05

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

Thank you, Mr Deputy Speaker.

It may be helpful if I explain what the Opposition are seeking to annul. The instrument amends paragraph 4 of schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006, which provides for transitional protection for certain housing benefit claimants. The amendment removes the transitional protection from social sector tenants such that their housing benefit will be determined using regulation A13 of the Housing Benefit Regulations 2006, which sets out the maximum rent in the social sector.

The amendment is required to close a loophole that derives from a very narrow set of regulations that date back to 1996. Changes at that time introduced the local reference rent rules and those regulations were intended to provide transitional protection for existing claimants as the new rules came into force.

The local reference rent rules only applied to those renting in the private rented sector, so the transitional protection was only ever intended to support them—the vast majority of them pensioners—not social sector tenants who were unaffected. With hindsight, this protection could have been time limited. Because it was not, 17 years later the protection is now being applied in a way that was never intended but is possible, which is resulting in claimants being exempted from the spare room subsidy. Thankfully, my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley), who was the Secretary of State at the time, said earlier that that was never meant to be the case.

If the motion’s supporters have their way, they will maintain transitional protection that was put in place for something that no longer applies, in order to exempt a group of benefit claimants from a completely different policy 17 years later. At best that is misguided. When we were looking to exempt a set of people, why would we have chosen that set of people?

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

Will the Minister give way?

[Esther McVey]

Not just yet. I will finish what I am saying.

Why would that group have been exempted? Why would preferential treatment have been given to a set of people who had been on benefits for 17 years? When we have put protection in place, we have sought easement for four sets of people. Foster carers are eligible for an additional bedroom. Parents who have adult children in the armed forces who usually live with them and who could be away deployed on operations but come back to their room would be exempted. Disabled claimants or their partners who require a visiting overnight carer are eligible for an extra room. Severely disabled children who would ordinarily be expected to share a room but who could not would be exempted. We have therefore set out who would require easement. That should not be provided, through some loophole, for people who were never meant to be exempted. It was never intended that people who had been on benefits for 17 years should be exempted.

[John Healey]

The Minister has used the words “misguided” and “loophole”. She told me in answer to a parliamentary question in January that

“we estimate the numbers affected are likely to be fewer than 5,000”.—[Official Report, 14 January 2014; Vol. 573, c. 522W.]

In Rotherham and Barnsley, however, one in 14 of all housing benefit claimants has been wrongly hit by the bedroom tax. That suggests that there are nearly 50,000 such claimants across the country. Will she now admit that Ministers have massively underestimated the numbers who have been hit and massively underplayed the difficulties and distress that have been caused?

[Esther McVey]

I thank the right hon. Gentleman for giving me the opportunity to answer that question. I looked into the freedom of information request and the numbers that had been obtained, and I was assured categorically that there was no way the Opposition’s figures could add up regarding claimants who were continuously on benefits while remaining in the same accommodation. When I spoke to various housing associations and local authorities, they were somewhat surprised, because they had given the numbers of people who might be affected and the numbers of cases they were still investigating, but the Opposition had added them together to try to multiply the numbers. When we answered the question on the numbers, the figure we gave at that time—5,000—was the best we could do. It is incorrect to say that the Opposition have those numbers; that is not the case.

[Chris Bryant]

Will the Minister give way?

[Esther McVey]

I will indeed give way, to hear some more information sprung from nowhere. Go on!

[Chris Bryant]

No, this is not information sprung from nowhere; it is direct questions to local authorities under the freedom of information legislation. A classic instance of this is to be found in the Minister’s own backyard: there are 600 cases in the Wirral. If she does not know the numbers—which is effectively what she is saying—is she not simply seeking to change the law on the basis of cruelty?

[Esther McVey]

I shall let that last comment pass, because it is completely inaccurate and should not be responded to. Let me give the House some of the answers to the FOI request. Local authorities did have some cases, but the number that they were still investigating was nearly double that amount. Those two amounts have been added together for the purpose of this argument, however, and that is not correct. It is factually misleading—[Interruption.] That example was from St Helens.

Local authorities said that the numbers had not yet been verified. Some of the figures given by the Opposition were 130% higher than the number already affected, and some of the people involved might be pensioners, who would not be affected by the measure. Such cases have not been thoroughly investigated because there had been a computer system change and those numbers were not available straight away; they would have had to be manually checked throughout the country.

[Several hon. Members]

rose—

[Esther McVey]

I will carry on. More information has been handed out by the Opposition and, as always, they are not very good with their numbers—hence the problem that we now find ourselves with

. Why are we bringing forward this policy? We are looking at how to make the best use of social housing. We know that more than 400,000 people are living in overcrowded accommodation, and that 2 million people are on waiting lists. At the same time, there is overcapacity equating to approximately 1 million spare rooms in other houses. How do we deal with this? It is not an easy issue that we have been left with, and we are having to make difficult decisions in order to get it right. We know what we cannot do: we cannot have a housing bill that doubles over 10 years, and we cannot have more and more people on waiting lists and living in overcrowded accommodation.

I was intrigued by the fact that it was only Members on the Government Benches who talked about people in overcrowded accommodation. They included my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) and my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley). Only those on this side of the House seemed to care about the people who are struggling and are on a housing waiting list. The reason that we are putting these measures in place is that we want to ensure we make the best use of our social housing. At the same time, we are building more affordable housing: there will be 177,000 more affordable homes by 2015, with £4.5 billion being spent.

My right hon. Friend the Member for Hitchin and Harpenden talked about home exchanges. He said that there were 56,000 one-bedroom homes and 147,000 two-bedroom homes available on HomeSwapper, and that 66% of the 233,000 homes available for home exchange were one and two-bedroom properties. Of course we are not expecting homes to be vacant at the moment, waiting for people to move in We need to find out who wants to move, how they are going to move, and how we do the swaps.

What is most unfortunate is that when we knew this policy was coming into being—that was four years ago and it has been in place for a year—the Opposition did absolutely nothing. In the year between 2012 and 2013, £11 million was handed back to the Government. The Opposition should have been asking, “How can we help people to move? How can we use that money to reduce rent arrears? How can we use that money to help people move into other accommodation?” They did absolutely nothing, digging their heels in; they were not helping those who most needed their support and were ignoring what was coming through. That is shameful, but this is the Opposition who led this country into serious debt and made sure that private debt for individuals went up to £1.5 trillion. Rather than help people out of debt, and help them move to homes they could afford and live within their means, the Labour party allowed them—

15:16

One and a half hours having elapsed since the commencement of proceedings on the motion, the Deputy Speaker put the Question (Standing Order No. 16(1)).

15:16

Division 214

Ayes: 253

---

Labour: 234
Democratic Unionist Party: 7
Scottish National Party: 6
Social Democratic & Labour Party: 3
Plaid Cymru: 3
Independent: 1
Green Party: 1

Noes: 304

---

Conservative: 265
Liberal Democrat: 36
Independent: 2

[Mr Jamie Reed (Copeland) (Lab)]

On a point of order, Mr Deputy Speaker. The details of a written ministerial statement regarding a decision made by the Secretary of State for Health on the Mid Staffordshire NHS Foundation Trust was released to the media before that statement was laid before the House today. Will you tell us whether that grotesque discourtesy to the people of that area and to Members and colleagues in this House was in fact in order?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

As the hon. Gentleman knows, Mr Speaker deprecates the premature release of press and Government statements due to be made in this House. The Vote Office received the text of the written ministerial statement at 1.34 today. It was made available to Members as soon as possible. You have made your point, and I am sure that Mr Speaker will look into it.

Flooding

Wednesday 26th February 2014 Commons Chamber

15:33

[Maria Eagle (Garston and Halewood) (Lab)]

I beg to move,

That this House notes the recent severe weather which has caused widespread and distressing flooding of homes, businesses and farmland; praises the work of communities, the Environment Agency, the Armed Forces, the emergency services and local councils in assisting those affected; calls on the insurance industry to ensure pay-outs are made as quickly as possible; recognises that continued support will be needed for the communities and businesses affected in the months ahead as homes and infrastructure are repaired; acknowledges the clear scientific evidence that climate change is contributing to the increased frequency of severe weather and the consequent risk of flooding; notes the advice from the Committee on Climate Change that current and planned levels of investment are insufficient to manage future flood risk given the increased threat from climate change; calls for further reports on the implementation of the recommendations contained in Sir Michael Pitt’s report into the 2007 floods to be made to Parliament; and supports cross-party talks on the impact of climate change and the funding and policy decisions necessary to mitigate the consequences of more frequent severe weather on communities and the economy.

For two and a half months, Britain has faced some of the most extreme weather since records began. We have experienced the wettest start to a year, the biggest tidal surges and the highest waves ever recorded. As a consequence, 6,480 homes have been flooded, farms have disappeared under water and businesses have been forced to close. For those who have been forced from their homes or seen their houses stripped of ruined carpets, furniture and possessions, this has been an horrendous experience. The stress of finding alternative accommodation and ensuring that the kids can get to school and that jobs are held down, while cleaning up and battling with insurance companies, will have been the nightmare start to the year that has faced many families.

The whole House will want to pay tribute to the tireless and ongoing work, over recent weeks, of the armed forces, the fire and rescue services, the police, the Environment Agency and local authority staff. I have seen for myself in Somerset and Cornwall how our public services have done an incredible job in difficult circumstances. They have worked alongside local communities and with the help of many volunteers to keep people safe and minimise the damage to property.

Governments cannot control the weather, and what the country has experienced in recent weeks has been exceptional. However, communities expect their Government to be prepared for the consequences of severe weather, and when it occurs, they expect a rapid response from the Government and help to arrive swiftly. Sadly, this was not the experience of many communities over Christmas and new year. The Government’s initial response to the floods was too slow and unco-ordinated. For too long, there appeared to be a complete failure to understand the full scale of the situation that was unfolding. I am afraid that that was typified by the belated visit of the Secretary of State for Environment, Food and Rural Affairs to the Somerset levels at the end of January. More than a month after the waters rose and homes and farmland were flooded, he took the decisive step of ordering a report to be on his desk within six weeks.

[Sir Edward Garnier (Harborough) (Con)]

Will the hon. Lady praise the generosity of farmers and hunts, not just in Leicestershire but throughout other parts of England, who have been sending hay, haylage, straw and other types of animal fodder to affected farmers? That has been a huge volunteer effort, and I hope that she will acknowledge it.

[Maria Eagle]

I am happy to acknowledge the support that has been given in the manner that the right hon. and learned Gentleman sets out to the House.

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

The hon. Lady said that the Government, or the country, was not properly prepared for the incidents that we faced. If she had come to my constituency, she would have seen that only prompt action by the fire brigade, the Army, the emergency services and the Environment Agency stopped a disaster. It is unfair and unfounded to say that the plans that were put in place and implemented amounted to a lack of preparation.

[Maria Eagle]

I hear what the right hon. Gentleman says about his experience in his constituency. I did not say that there was no support or preparation, but the Government did not act in the requisite fashion to deal with the seriousness of the situation in many places.

[Mr Ben Bradshaw (Exeter) (Lab)]

My hon. Friend is right to talk about the slow and belated but ultimately welcome response. Is not the danger that, now that the national media circus has moved on and the visiting Ministers have gone away, the Somerset levels are still under water and both of our main rail connections from the south-west to the rest of the country are still severed, and likely to be so for several more weeks? We need sustained and comprehensive attention and policies to address flood risk and flood management in the long term.

[Maria Eagle]

I acknowledge the truth of what my right hon. Friend said. Of course, it is the job of Her Majesty’s Opposition to try to make sure that the Government realise that need as much as we do. I am sure that we will seek to do that.

[Richard Benyon (Newbury) (Con)]

Will the hon. Lady acknowledge that her right hon. Friend the Member for Leeds Central (Hilary Benn), who is sitting next to her, instigated the Pitt review, from which came the Flood and Water Management Act 2010, which this Government have implemented in large measure? Surely, there should be a much more cohesive view across the House that we put in place the gold command structures that the review required and carried out Exercise Watermark precisely for this scenario. Many houses in constituencies such as mine were protected precisely because we followed through those recommendations.

[Maria Eagle]

I acknowledge that good work was done in the Pitt review to set out what the country needed to do. However, I am not convinced that the Pitt review has been fully implemented. Indeed, the Government laid before the House in, I think, January 2012 what they called a final progress report on the Pitt review, whereas it acknowledges that 46 recommendations––that is half of them––have not yet been implemented. One of the things that I would like the Minister to deal with is whether we can have further updates, so that we can be clear about the Government’s view on whether the Pitt review has now been fully implemented.

[Chris Ruane (Vale of Clwyd) (Lab)]

I do not believe that the Pitt review has been properly answered. I have tabled 10 parliamentary questions on its recommendations and intend to table another 84 to flush the issue out. Here are a couple of the answers I have had already:

“I have made no assessment of local authority leaders’ or chief executives’ effectiveness”.—[Official Report, 13 February 2014; Vol. 575, c. 800W.]

That was recommended by Pitt, but not implemented.

“There have been no discussions with the Association of British Insurers or other relevant organisations”. —[Official Report, 12 February 2014; Vol. 575, c. 661W.]

That was recommended by Pitt, but not implemented. Those are just two of the recommendations that have not been implemented.

[Maria Eagle]

My hon. Friend makes a strong point and perhaps in due course—either during this debate or thereafter—we can have a better understanding and, I hope, a shared understanding across the House about what has and has not been completed in respect of Pitt.

For weeks after this crisis arose, Ministers refused to accept the need for additional funding; they refused to accept the serious situation facing many farmers, who had seen their land submerged and their livestock displaced; they refused to accept that the Government had a duty to act regardless of whether official requests from councils had been received; they refused to countenance the mobilisation of the armed forces; they refused to act on council tax, having changed the law to abolish automatic exemptions; and they refused to accept the need to act on insurance payouts. Instead, despite meeting after meeting of Cobra, very little action seemed to result.

It is clear that that situation was not helped by the confusion about who has been in charge of the Government’s response. It is hardly the Environment Secretary’s fault that he was forced to step back from the front line, and I know that the whole House wishes him well as he continues on his road to recovery. However, we then faced a period of chaos as the Communities Secretary took charge for a few slightly misjudged and disastrous hours, before he was banned from the airwaves. The Defence Secretary was then dispatched to repair all the damage caused by the Communities Secretary’s blundering, and then the Transport Secretary appeared to become the fourth member of the Cabinet to be put in charge of the Government’s response. Then, in the past few days, we have finally seen a blitz of public relations initiatives and some welcome extra money as the Prime Minister, having woken up late to the impact of the severe floods, decided that he had better take charge of the response himself.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

On that point, was my hon. Friend also confused, as I was, by the Prime Minister’s visit to Pembrokeshire, when it was not clear whether the funding that he announced there even applied to Wales? Also, will she join me in commending the work of the Welsh Labour Government in protecting flood defences, flood staff and flood funding?

[Maria Eagle]

I will indeed join my hon. Friend in respect of the latter point. I must also say that I was a little concerned that, for once, the Prime Minister’s reputation for being an expert on PR and spin seemed to have gone a little bit wrong when he turned up in Wales to announce an initiative that did not apply to Wales. Perhaps that will give my hon. Friend a strong argument to go back to the Prime Minister to ask him whether that initiative will now apply to Wales.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I welcome the call in the motion for

“cross-party talks on the impact of climate change”,

and I very much hope that the smaller parties will be included in those cross-party talks. Does the hon. Lady agree that protecting UK citizens from the worst of climate change means that we need to leave the vast majority of fossil fuels in the ground and that the last thing we should be doing is exploring for yet more sources of oil and gas, whether or not that includes shale gas?

[Maria Eagle]

I will say a little about climate change later in my remarks, but the hon. Lady has certainly made her point.

After the Prime Minister became involved, one by one the measures that had been resisted for weeks have finally been announced: vital assistance from the armed forces; funding to help households, businesses and farms, although much of the detail needs to be clarified; council tax exemptions, after my right hon. Friend the Leader of the Opposition forced a welcome U-turn; and a hastily convened meeting with the insurance industry, although it is far from clear what that meeting has delivered in terms of faster payouts. Those measures should have been put in place when the water levels first rose, at the end of last year.

A great many questions still need to be answered about the assistance that is available. For example, the Business Secretary has suggested that VAT on flood repairs should be reduced. Perhaps the Communities Secretary can clarify matters and say whether that suggestion is now Government policy, or was it just being floated as part of the Liberal Democrats’ so-called differentiation strategy?

After the floods of 2007, half of those who were forced to leave their homes were back in them within six months, yet many of those people had to wait much longer for the money needed to sort out the damage. I hope that the Communities Secretary will update the House on what discussions with the insurance industry have led to. In particular, can he say whether the Government agree with the proposal by my right hon. Friend the Leader of the Opposition for a new industry standard, because taking 12 months to complete a claim seems far too long?

There is still a lack of clarity on the time scale for restoring the rail link between Exeter and Newton Abbot, following the collapse at Dawlish. Initially, it was claimed that the work could be completed within six weeks, but now we are told that the line may not reopen until mid-April. With up to £20 million a day being lost by businesses, I hope that the Communities Secretary will provide an update on efforts to achieve an earlier reopening of this vital transport link.

We have heard nothing from Ministers on what specific steps the Department for Environment, Food and Rural Affairs is taking to help our fishing fleets, particularly in the south-west. Many fishermen have been unable to work since Christmas and consequently now face a desperate financial crisis. After two months of no fishing, damaged boats and lost equipment, the Communities Secretary will, I hope, provide some clarity on what help will be available to that vital British industry.

There are growing concerns about the impact on the tourism industry, which is vital for the economy of the south-west in particular. It is reported that a quarter of all tourism operators have experienced cancellations, and 40% have seen fewer forward bookings during a vital period for organising summer breaks. I hope that the Secretary of State, or the Minister who is responding to the debate, can set out what the Government have done to ensure that people are aware that all parts of Britain are open for business.

Ministers continue to be silent about whether or not an application is to be made to the European Union solidarity fund. After the 2007 floods, the previous Government successfully secured £110 million as a contribution to the cost of recovery. After the UK special abatement mechanism, the net value is £31 million. Considering that that is more than the total extra money announced for this year, it is surprising that securing that funding does not appear to be a priority. I hope that the Secretary of State can assure the House that some kind of anti-EU political dogma is not standing in the way. We look forward to hearing what he can tell us about what is going on.

The Government were caught sleeping on the job when the severe weather first hit the country in December, but the roots of this failure go back to the ill-judged decision made by the Government after the 2010 election significantly to reduce the funding available for flood protection. The budget of the Department for Environment, Food and Rural Affairs had to be cut, but it is a question of what the priorities ought to be. A decision was made to target the flood defences budget, despite all the evidence that investing in flood defences saves more than it costs.

[Henry Smith (Crawley) (Con)]

rose—

[Maria Eagle]

I will not give way. I have given way on a number of occasions, and I want to make progress.

This reckless short-termism is set to cost the country more than the cuts were intended to save. The Pitt review commissioned by Labour after the 2007 floods made it clear that investment in flood protection needed to rise, and by time of the 2010-11 Budget set by Labour, funding had gone up from £500 million a year to £670.1 million, yet by 2011-12, in the first Budget set by the coalition Government, that had been cut to £573 million, which is a reduction of £97 million—a 17% real-terms cut.

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

Will the hon. Lady give way?

[Maria Eagle]

No, I want to make a little progress.

The budget has remained the same since then, meaning further significant real-terms cuts, year on year. Taking into account the extra funding announced this month, there will still be £64 million less available for flood protection this year than in 2010. The figure is £606 million now, compared with the £670 million available under the previous Government. The chief executive of the Institution of Civil Engineers, Nick Baveystock, said in the past day that this level of spending

“provided neither the level of investment nor long-term certainty required to improve resilience against flooding... This under-spend has been detrimental to communities, business and infrastructure”.

The Government’s decision to reduce the commitment to flood protection was a deliberate one. When the Secretary of State for Environment, Food and Rural Affairs rewrote his Department’s core list of priorities on taking office, he chose to remove the priority to

“prepare for and manage risk from flooding.”

He then stated in front of the Select Committee on Environment, Food and Rural Affairs that he had ordered civil servants to use his new priorities, which no longer included flood risk, when applying spending reductions within his Department. Ministers, including the Prime Minister, continue to claim that more is being spent on flood protection in this Parliament than in the previous one. In real terms, that is nonsense. Thanks to the complaint from my hon. Friend the Member for York Central (Hugh Bayley) to the UK Statistics Authority, we now have an independent view on the Government’s claims. Andrew Dilnot said:

“Our analysis...supports the conclusion that the statement ‘over the current spending review period, more is being spent than ever before’ is supported by the statistics if the comparison is made in nominal terms and includes external funding, but is not supported by the statistics if the comparison is made in real terms or if external funding is excluded.”

That is categorical, so I hope that the Communities Secretary will apologise on behalf of the Prime Minister and all those Ministers who have repeatedly sought to misrepresent the truth on spending on flood defences. As the UK Statistics Authority has stated, the Government like to include external funding in its figures, or “partnership funding” as it calls it.

The figure that Ministers quote is £148 million, yet thanks to a recent parliamentary answer from the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson), the Government have been forced to admit that there is an £80.4 million black hole in this total because they have failed to secure the contributions anticipated. I hope that the Communities Secretary can update the House on how that will be filled.

[Andrew Percy]

I thank the hon. Lady for giving way on that point. Match funding is important in this. Last night, North Lincolnshire council set its budget, in which the Conservative-led council added £5 million for flood defences along the Trent and the Humber. Can she tell me why Labour councillors voted against that budget and that funding?

[Maria Eagle]

I hope that if the Minister, whose parliamentary answer I am quoting from, has updated figures, he will provide them to the House when he replies to the debate.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

indicated assent.

[Maria Eagle]

The reductions to flood defence spending were not just numbers on a spreadsheet, but actual planned flood defence projects.

[Henry Smith]

Will the hon. Lady give way?

[Maria Eagle]

No, not at this time. [Interruption.] I have given way relatively generously, so I do not think I should be criticised for saying no on one occasion.

In total, 290 shovel-ready flood defence projects were cancelled and 966 delayed as a result of those decisions. Appallingly, these appear to have included 13 schemes along the Thames and 67 in the south-west. Does not that highlight the cost of the Government’s misguided approach? The Secretary of State for Environment, Food and Rural Affairs also cut more than 40% from his Department’s budget for domestic climate change initiatives last year. Therefore, just 0.7% or £17.2million of the Environment Department’s budget is now dedicated to preparing or adapting Britain for the impact of climate change, and his is the lead Department. Of course, we only know this thanks to an freedom of information request, because the Secretary of State sought to disguise the cut by lumping it in with the funding to meet our obligations to the international climate fund.

Before these floods hit, Ministers were about to make yet another ill thought through decision that would have reduced the country’s ability to cope with major flood incidents. In addition to the 600 Environment Agency staff lost since 2010, we know from leaked briefings that a further 557 flooding staff were due to be cut this year. The Prime Minister has said that

“those aren’t plans that are going to be put in place”.

Yet it is far from clear whether this means that there will be no further job losses in the agency, or whether the commitment relates only to those working directly on flood protection. Neither is it clear for how long this commitment remains valid. I hope that the Secretary of State will clarify the situation and give us some further information on this.

There have been some disgraceful attempts by Ministers to place the blame for some of these decisions at the door of the Environment Agency, not least by the Communities Secretary himself. Yet, as the chairman of the Environment Agency has made clear,

“a limit on the amount we can contribute to any individual scheme, determined by a benefit-to-cost rule imposed on us by the Treasury”

was placed on the agency.

I hope that the Communities Secretary will take the opportunity to confirm that the cost-benefit ratio rules imposed on flood defence schemes will be reviewed. I hope that he will also accept, in hindsight, that Ministers should not have sought to evade responsibility for their own decisions.

The Pitt review set out 92 separate recommendations, all but one for the Government, and significant progress on their implementation was being made at the time of the last election, yet when this Government came to office in 2010, some recommendations that had been implemented were reversed. The Cabinet committee on improving the country’s ability to deal with flooding and the national resilience forum were both abolished. Then in January 2012, the Government published what was entitled a “final progress report”, despite 46 recommendations not having been fully implemented. We urgently need clarity on the progress—or lack of it—that has been made since January 2012. I hope that the Secretary of State will reconsider his previous refusal to agree to our call for a new update to be brought before Parliament.

The Government have demonstrated a complete lack of urgency in securing the legal basis for the proposed flood reinsurance scheme. Thanks to three years of inaction from Ministers, this scheme will not be in place until 2015 at the earliest. As we have warned throughout the passage of the Water Bill, which is still being considered in another place, the scheme is deeply flawed. In Committee, Conservative and Liberal Democrat Members of this House voted down Labour amendments to improve the Bill. Those amendments included requiring Ministers to consult the Committee on Climate Change on the number of properties that might need to be added to the scheme in future; incentivising owners of at-risk properties to invest in flood protection measures; enabling people to search whether or not a property is included in the scheme; and establishing an appeal mechanism for those excluded—all measures opposed by the Government.

A balance has to be struck, of course, between the cost of the levy on other households and the scope of the scheme. However, the significant number of exemptions from the scheme continues to be of real concern and controversy, not least for tenants and leaseholders. In the light of the recent floods and the fact that the Water Bill has not completed its passage through both Houses, I hope that the Minister might consider agreeing to cross-party talks on those issues. It is vital that we ensure that the Flood Re insurance scheme is fit for purpose over the long term.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Will my hon. Friend give way?

[Maria Eagle]

If my hon. Friend will forgive me, I would like to conclude my remarks.

I hope that the Government will also consider the call by my right hon. Friend the Leader of the Opposition for the national consensus on climate change to be rebuilt. The events of the past few weeks have shown that that is now a matter of national security, with people’s homes, businesses and livelihoods under threat from extreme weather. All the evidence points to that happening more frequently in future.

Before the last election, we were edging towards that consensus. The Stern report set out clearly the catastrophic impact on our economy of a failure to act on climate change. The Committee on Climate Change and carbon budgets was established. Targets to reduce emission were set. Investment in flood protection was rising. The leader of the Conservative party was hugging huskies and pledging to lead the greenest Government ever.

Just three years later, however, the progress that was being made appears to have stalled and the Prime Minister is allegedly wandering around Downing street talking of his wish to be rid of all this “green crap”. Tellingly, he has appointed an Environment Secretary who talks up the alleged benefits of climate change and refuses to be briefed on the subject by the Government’s scientific advisers.

We urgently need to re-establish the consensus on the threat to the UK of climate change. The science is clear. The evidence is overwhelming. The Committee on Climate Change warns that current planned funding will

“result in around 250,000 more households becoming exposed to a significant risk of flooding by 2035”.

These floods must be a wake-up call: a wake-up call on whether dedicating just 0.7% of DEFRA’s budget to climate change mitigation and adaptation makes sense ; a wake-up call on the folly of ignoring the impact of climate change in the Food Re insurance scheme; and a wake-up call on the consequences of cutting investment in flood protection. For the communities that have suffered such appalling flooding in recent weeks, that is the very least they deserve.

15:57

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

I thank the hon. Member for Garston and Halewood (Maria Eagle) for sending her best wishes to my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, whom I spoke to a short time before the debate. He is making progress but, as Members will readily understand, is going through an extremely painful process. She has been extremely kind in sending him messages.

There were many things in the hon. Lady’s speech that were lacking in accuracy or were exaggerated, but let just one thing speak for everything: her criticism of our promise to open the railway line at Dawlish in six weeks. Let us be clear that the enormous gap in that line is being mended in the face of the most difficult storms. Containers filled with rocks were obtained to protect it, and without that, houses would have been lost, yet the storms continued. Despite that work, the gap increased by 70% over the weekend. The people repairing the line are working around the clock to deliver a railway. Frankly, being sneered at by the hon. Lady is not very helpful.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

Is not part of the problem with the Labour party’s argument that its Members talk in generalisations? In reality, a huge amount of good work has been going on across the country, not least in Godmanchester in my constituency, where tomorrow a £10 million new scheme will be opened to keep over 1,000 of my constituents safe from flooding.

[Mr Pickles]

My hon. Friend makes a very reasonable case. Indeed, we will be announcing a number of schemes that will help with that process. In fairness to the hon. Member for Garston and Halewood, she did pay tribute to the people who have done this work.

I welcome this debate. I think that despite the hon. Lady’s best endeavours, there is a lot of common ground between the Government and the Opposition on this motion. Unless the right hon. Member for Leeds Central (Hilary Benn), who will put the case for the Labour party towards the end of the debate, is particularly aggressive and provocative, it is certainly not the Government’s intention to oppose the motion. [Interruption.] As he says, perish the thought.

As the hon. Lady said, Britain has faced some of the worst flooding in decades. The wettest winter in two and half centuries has caused significant damage to homes, businesses, transport and farmland. Areas across the country—

[Chris Ruane]

rose—

[Mr Pickles]

Will the hon. Gentleman bear with me for a few moments? I would like to set out the case, and then of course he will get first dibs.

[Chris Ruane]

I am glad that the Secretary of State calls me the hon. Gentleman rather than the hon. Lady, as he referred to me last week.

[Mr Pickles]

I have upgraded my glasses since then. However, I have always regarded the hon. Gentleman as a particularly attractive Member of this House.

Areas across the country have suffered from flooding, power loss, damage to local infrastructure, and coastal erosion. In some of the worst affected areas, communities will continue to suffer the after-effects for months to come, long after the cameras and the Westminster politicians have disappeared. I commend the tireless work of local councils, firefighters, Environment Agency staff on the ground, local volunteers and our armed forces for the work they have done, and still do, around the clock.

[Sir Gerald Howarth (Aldershot) (Con)]

Will the Secretary of State give way?

[Mr Jeremy Browne (Taunton Deane) (LD)]

Will the Secretary of State give way?

[Mr Pickles]

No, the hon. Member for Vale of Clwyd (Chris Ruane) has first dibs, and then I will give way again.

[Chris Ruane]

I thank the right hon. Gentleman. What role does he think that climate change has played in the recent floods?

[Mr Pickles]

I will come to that point towards the end of my speech. If the hon. Gentleman is not happy with my remarks, I will give way to him again.

[Mr Jeremy Browne]

The Secretary of State talked about the long-term task of clearing up after the floods. Is he able to provide some reassurance to my constituents that the A361, which is the principal road from Taunton into the middle of Somerset, will be passable once the floodwater has receded? Many of my constituents are nervous that even when the water has dissipated, the state of the road will mean that they are not allowed to travel along it.

[Mr Pickles]

We have put in some additional money ready for those precise circumstances. One of our concerns was about the riverbanks. Having looked carefully at the situation, and having had people in from the Netherlands to look at it, it seems as though they are in a very good condition. As for the condition of the road, as the hon. Gentleman will recognise, when it has been submerged for some time, the problem is not just potholes but the surface rising. We will be looking at that, because it is clearly of national importance to see it back in operation as quickly as possible.

[Mr Andrew Smith (Oxford East) (Lab)]

Will the Government complete a proper assessment of the economic impact of the flooding as well as, of course, the awful impact on people? Only through such an assessment can proper evaluation be made of schemes such as the western relief channel for Oxford, which is the only practical means of reducing the flooding there, which the Secretary of State came to see for himself.

[Mr Pickles]

The right hon. Gentleman is right. I went to look at the possibilities there and was well and truly lobbied. I have reason to be very grateful to firefighters who came up with a way of keeping the roads open with a very inventive use of high-volume hoses.

[Sir Gerald Howarth]

The Secretary of State has mentioned the work of the agencies. May I put it on the record that, since Aldershot was badly hit by flooding in 2006, Rushmoor borough council, Thames Water and the Environment Agency have combined not only to clear some of the vegetation from Cove brook, but to undertake other work that has resulted in our being very lightly hit this time? It is very important that we have a balanced debate about flooding, so I say to my right hon. Friend that in Aldershot we are very grateful for the work that has been done. We know that more must be done, but let us put on the record what has been done.

[Mr Pickles]

I am very grateful to my hon. Friend, who makes some reasonable points and shows what can be done. In fairness, the weather was much worse for a more prolonged period than it was in 2007, and the number of dwellings affected is 7,000 or thereabouts, which is just a tiny proportion of the 55,000 or 56,000. That is a reflection of some very good protection work.

[Henry Smith]

Will my right hon. Friend also welcome the £11.7 million that has been spent on the upper River Mole flood alleviation scheme since 2010, which has protected hundreds of homes that otherwise may have been flooded during recent events?

[Mr Pickles]

My hon. Friend makes a reasonable point.

[Nadine Dorries (Mid Bedfordshire) (Con)]

rose—

[Mr Pickles]

It would seem mean not to let my hon. Friend in.

[Nadine Dorries]

I thank my right hon. Friend for giving way. Will he use his good offices to persuade the Environment Agency that our constituents who live close to the rivers and watch them day in, day out know them very well, and that when they make representations to the Environment Agency asking for the rivers to be dredged, they have good reason to do so? My constituents in Shefford watched the water mark rise and rise. They escaped flooding, but only just and despite having made repeated representations to the Environment Agency. Perhaps my right hon. Friend could use his offices to make sure that the Environment Agency pays attention to constituents.

[Mr Pickles]

I will raise that issue with the Environment Agency, which I found very responsive to individual schemes. If my hon. Friend would be kind enough to give me more precise details, I will try to get an answer for her.

[Chris Williamson (Derby North) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

I think not. I need to make some progress. I will give way later to the hon. Gentleman, who no doubt wants to say something about firefighters.

In response to the situation, this Government have taken and continue to take decisive action. The risk of river and coastal flooding is now diminishing, although groundwater remains—and will remain for some time—a problem.

Although the signs of spring may be appearing on the trees outside, for some the misery remains. The Government are in daily contact with gold commanders in all areas, continuing to offer Government support. As the weather patterns return to a more typical form for this time of year, coastal and river waters are likely to return to their normal flow. Gold commanders maintain a state of readiness to respond to future flooding should the risk increase again in the coming weeks.

Locally, the transition to recovery is under way and most areas have convened recovery meetings. For those that have not, a shadow organisation will be ready to respond at any given time. The ministerial recovery group is co-ordinating Government support to local areas and infrastructure owners and operators, to enable a return to normality as quickly as possible. That is complemented by a new Cabinet Committee on flooding, to learn the lessons for the future.

Although the floodwaters remain, I reiterate that every resource is available to local communities affected. We will keep providing whatever immediate practical support and assistance is needed, whether it be extra pumps and sandbags, military support on the ground or emergency funds for local councils.

Recognising the particular nature of the situation in Somerset, we have been working closely with all local agencies to develop a sustainable solution to the water management of that area. The Government have announced that the dredging of the Somerset levels will be ready to start by the end of March, provided that water levels drop. Dredging will take place on an 8 km section where the Tone and Parrett rivers meet. It is not a miracle cure, but it recognises that mistakes were made and policies needed to be changed. Sometimes the state should say sorry, and that is exactly what we have done.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

My right hon. Friend is absolutely right. The contracts are now out, and we start the work on the 28th. As he says, the important point is that we cannot pump north of Burrowbridge because of the capacity level of the river—it is 40% below capacity. We will only be able to pump in the Somerton and Frome and the Taunton Deane seats when that work takes place. Will he make sure that the Environment Agency and others stick to that timetable?

[Mr Pickles]

My hon. Friend is right. We have an enormous pumping capacity, but we need to be cautious in how it is used on the Parrett and the Tone and, of course, in the King’s Sedgemoor drain. Some of the larger pumps that we have brought across from Holland can take out an enormous amount of water, but we clearly have to ensure that their pattern of use does not lead to a degree of scouring that would threaten the banks’ stability. We are going about that in a very reasoned way: it may take weeks longer than is ideal, but it is important that it is done in a safe way.

[Rosie Cooper (West Lancashire) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

I will, but I hope that the House will forgive me if I then make some progress.

[Rosie Cooper]

Does the Secretary of State know whether any regulations are being used to stop dredging at this time? When farmers in my areas asked for dredging to take place, they were told that regulations say that it is the breeding season and that birds cannot be disturbed, so dredging has not occurred. Is there any way in which such regulations can be overruled?

[Mr Pickles]

Again, if the hon. Lady would be kind enough to give me precise details of that matter, I will certainly engage with it. I do not want to give the impression that dredging is the solution to everything. It might well be inappropriate; in particular, it might make the situation of a very fast flowing river worse. We need to be able to put together bespoke solutions for particular areas. Part of my area of Essex has been saved from flooding by the sensible use of water meadows, which is an idea that I very much support. We cannot replace one doctrinaire view with another ideological one.

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

Will the Secretary of State give way?

[Mr Pickles]

I want to make a little progress if that is convenient. I will give way, but I first want to make a little progress, because other hon. Members want to speak.

On financial support, we will continue to do whatever it takes nationwide to support local communities across the country that have been affected by flooding and to aid their transition to recovery. The Bellwin scheme is helping councils to meet exceptional and unexpected costs associated with protecting lives and properties. I have extended the scheme: raising the payments to 100%, rather than the normal 85%; making it easier for fire authorities to claim; lowering the threshold for counties and unitary authorities; and extending the scheme to the end of May. I want to make it clear that that is not written in concrete; if we need to extend the scheme again, I will consider doing so. We have already received 96 notifications from local authorities that they intend to make a claim under the scheme.

In addition to the Bellwin scheme, we have established a severe weather recovery scheme. It was started following the flooding just before Christmas. This fund will support communities and repair local highway infrastructure. Today, I can announce that we will extend the qualifying period for local authorities to claim under that scheme to the end of May, and that we will increase the amount of money to £40 million.

Flooding has an immense emotional impact on householders: like burglary, the effects and trauma linger for months. To do our bit, we have made £4 million available to councils to fund council tax rebates for people whose homes have been flooded. The rebate will be for at least three months, and it should cover everything for the period during which people cannot live in their property.

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

Will my right hon. Friend give way?

[Mr Pickles]

I did say that I would not give way, but I can never resist my hon. Friend’s charm.

[Dr Coffey]

My right hon. Friend’s announcement is really welcome news, as homes in Great Yarmouth and Suffolk Coastal in East Anglia were flooded at the beginning of December. Will he say more about accelerating the repairs in places where they are being done right now?

[Mr Pickles]

As my hon. Friend almost certainly knows, applications for the first phase of severe weather payments came in a couple of weeks ago. It is our intention to get the money out of the door as quickly as possible.

[Debbie Abrahams]

Given everything that the Secretary of State has said about the emotion and trauma that is caused to householders who are flooded, do the Government regret removing the priority to

“prepare for and manage risk from flood”?

That quotation is from the ninth report of the Environment, Food and Rural Affairs Committee on the departmental annual report.

[Mr Pickles]

The hon. Lady only has to look around to see how effective the new schemes have been. We have continued producing schemes. A number of Members have stood up and recognised what has happened. To be frank, I am pretty partisan and I am doing my best to be restrained. I point out politely that the last Labour Chancellor announced that if the Labour party won the last election, capital schemes would be cut by half. I do not believe for one moment that flood defences would have been exempt from that. After all, the hon. Member for Garston and Halewood, who has many fine qualities, has not been able to give a commitment that she would match the spending plans of the coalition Government.

[Chris Williamson]

Will the Secretary of State give way?

[Mr Pickles]

Oh no, I don’t think so—not for a while.

Councils have the discretion to extend the relief. Since April, they have had the ability to waive the council tax exemption on empty homes to get them back into use, and to use the money to support front-line services or keep council tax down. The Leader of the Opposition supports that policy. However, I believe that the right hon. Member for Leeds Central has his doubts about it. It would be helpful if, in his summation, he made those doubts clear or demonstrated that he is at one with his leader.

The Government have been clear that we can give councils local flexibility. Councils can continue to use their discretionary powers to offer council tax relief to people whose homes are empty through no fault of their own. If councils are raising extra funds by waiving the exemption, they have a moral obligation to fund council tax relief for flooded homes for as long as it takes for families to get back into them. It would be most unfortunate if councils were portrayed as making money from misery.

To support home owners and businesses, the Department for Environment, Food and Rural Affairs is providing a repair and renewal grant of up to £5,000 per household.

[Chris Williamson]

Will the Secretary of State give way?

[Mr Pickles]

In a moment.

The repair and renewal grant will top up any money that is received from insurers to ensure that flood resilience is built into homes and businesses as they are repaired. We are providing support for local businesses to give them the breathing space that they need to recover from the flooding. All affected businesses will get 100% business rate relief for three months.

[Sir Richard Ottaway]

Will the Secretary of State give way?

[Mr Pickles]

I will in a moment.

Businesses will have extra time to pay other business taxes that they owe to the taxman while they get back on their feet. We have announced a separate business support scheme that is worth up to £10 million for small and medium-sized firms in flood risk areas. We are helping farmers who have been affected by the flooding and severe weather to get their businesses back on track as soon as possible. A new £10 million farming recovery fund has been set up to help local farmers that have been directly affected and to meet the short-term costs as the flood waters recede.

We are building infrastructure resilience into our railways and roads, including through a £31 million scheme to deliver 10 rail projects that will improve resilience against flooding.

[Sir Richard Ottaway]

The Secretary of State will know from his visit to my constituency that a number of businesses that were not flooded were affected by the floods. Will he confirm that the compensation package that he has just announced will apply to those businesses, even though they were not flooded?

[Mr Pickles]

Certainly part of the amount that I have just announced with regard to businesses will be, although the rate rebate will not be available. This is perhaps a good opportunity for me to apologise to my right hon. Friend because I am afraid my office did not inform him of my visit to his constituency, which was made at short notice. I deeply regret that because he is a most diligent constituency MP, and I know he had been at the site the previous day. That was a good example of how adaptable firefighters have been: the use of the underpass as a balancing pool was a work of absolute genius, and it undoubtedly saved that important pumping station.

[Chris Williamson]

rose—

[Mr Pickles]

I will give way to the hon. Gentleman.

[Chris Williamson]

I am grateful to the Secretary of State for giving way. I indicated that I might mention firefighters, but I think I will save that for a little later. He spoke earlier about a moral obligation on local authorities, but are the Government not under a moral obligation to reinstate the significant cuts that they made to the flood defence scheme when they came to power, particularly in view of the Prime Minister’s statement at the press conference he called on 11 February, when he said that the Government

“will build a more resilient country for the future”?

What does that mean if not reinstating those cuts?

[Mr Pickles]

The hon. Gentleman must forgive me because I have had this conversation with him before. We were rather short of money when we arrived because of the poor way—[Interruption.] Let us be fair. The hon. Gentleman might have missed the point as he was probably getting ready for the intervention, but as I said in response to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), who has sadly left her customary place, the Chancellor of the Exchequer in the Labour Government made it absolutely clear that they would have reduced the capital programme by half. The Opposition are not even in a position to match the funding that we are offering now. I suggest that the hon. Gentleman speaks to the shadow Chancellor and urges him to reverse the position of refusing to offer help to flood victims.

Since the east coast surge in early December, more than 1.3 million properties have been protected by flood defences. The substantial flooding in the Somerset levels and elsewhere will take time to subside, and while immediate action is needed, we also need to look to the future. Fifty-five schemes starting this year will protect more than 43,000 households, and we are providing £130 million of assistance for the repair of sea and flood defences, including £10 million specifically set aside for Somerset. In total, the Government are spending £2.4 billion over four years, versus £2.2 billion over the last four years of the previous Government.

Looking further forward, we have made an unprecedented long-term six-year commitment to record levels of capital investment in improving defences, including £370 million by the end of this Parliament and the same in real terms each year, rising to £400 million by the end of the decade. These are capital spending plans that the Opposition have declined to match and the Labour party has refused to commit to. Our plans will improve protection for at least 465,000 households by the end of the decade.

[Ian Lavery (Wansbeck) (Lab)]

We have all seen what happened in the flood-risk areas, and my sympathy goes to everyone involved. However, will the Secretary of State look at the situation in the north-east and give a cast-iron guarantee that moneys already allocated for coastal erosion and other flood schemes will not be reduced or withdrawn to ensure that finances are made available for other schemes?

[Mr Pickles]

The hon. Gentleman will remember, as I do, that tidal surge before Christmas, which was one of the scariest things I have ever seen. We were remarkably lucky that the flood defences held for the most part. It would be an act of folly to say that one part can flood and another cannot. Who can say? We are just a few days away before the first spring tides start to occur. The weather looks relatively benign, but were spring tides ever to coincide with a tidal surge we would have some real problems. Sadly, the Somerset levels are again at risk of flooding this weekend.

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

The Secretary of State mentions tidal surges, which are exactly what affected the River Stour and the Iford park homes. I am grateful for the promised Government funding to support businesses and dwellings, but will he confirm that that will include mobile home parks that have been affected by flooding?

[Mr Pickles]

I am afraid I did not quite catch the last couple of words. What assurance was my hon. Friend seeking?

[Mr Ellwood]

The River Stour overflowed when it hit the incoming tide, flooding mobile home parks. My right hon. Friend referred to “dwellings” in relation to funding. Will mobile home parks be included?

[Mr Pickles]

Of course. Absolutely. A mobile home is entitled to the same protection as a dwelling that has foundations.

On the Pitt review, in which the hon. Member for Garston and Halewood (Maria Eagle) took such an interest, the vast majority of its recommendations have been implemented, with the majority of measures now in force. The Department for Environment, Food and Rural Affairs is committed to implementing the remaining five Pitt recommendations by the end of this year. We are making the necessary legislative changes in the Water Bill.

Rightly, attention should now turn to how councils plan for development and how they build. Decisions on whether to grant planning permission are, of course, a matter for local planning authorities.

[Andrew Percy]

On the issue of building on floodplains, may I bring to the attention of the Secretary of State the proposals going through North Lincolnshire council to build up to 10,000 homes on a floodplain between Burringham and Gunness in my constituency and Scunthorpe, a project created by the previous Labour council? I am deeply concerned about it, as is the leader of North Lincolnshire council. It is still going through the local development framework process, but may I just put it on his radar and urge him to support those of us who are concerned, after what we have just seen, about development on floodplains?

[Mr Pickles]

I will come on to the question of floodplains in a few moments, but the matter is on my radar. My colleague the Planning Minister will of course look at it with a completely open mind when the time comes.

Rightly, attention is now turning to how councils plan to develop and where they plan to build. Councils should take advice, where appropriate, from the Environment Agency and weigh up the different material considerations, from biodiversity to the need for more homes. Having said that, 99% of proposed new residential units that the EA objected to on floodplain grounds were decided in line with EA advice, where the decisions are known. I would say this, however: there is no monopoly on knowledge. Local elected councillors should decide and be held to account for their decisions.

Nevertheless, the estimated number of dwellings built in areas of high flood risk in England is now at its lowest rate since modern records began. That figure will change from year to year. It may rise and it may fall, but it will never be zero. A zero figure would mean a complete ban on any form of development in many existing towns and cities that happen to be flood-risk areas. Approximately 10% of England is high flood risk, such as large parts of Hull, Portsmouth and central London—indeed, this Chamber is in a high flood risk area. National planning policy clearly states that inappropriate development in areas at risk of flooding should be avoided. Councils should direct development away from areas at highest risk. Where development is unavoidable, it must be demonstrated that it is safe and will not increase flood risk elsewhere.

Councils have a robust power to reject unacceptable planning applications. Councils’ local plans should also shape where development should and should not take place. They should address the needs of associated infrastructure to accompany new building. National planning policy is clear that any new building that is needed in flood-risk areas should be appropriately flood-resistant and resilient. Mitigation measures such as land raising, landscaping, raised thresholds and rearranging the internal use of buildings can also make a development appropriate in such areas.

For example, London has long been at risk of tidal flooding, as evident from the North sea floods of 1953, which inflicted immense damage to the east end of London. However, since 1983 the Thames barrier has mitigated that risk. We did not have to ban all development in London; we overcame the challenge through science. We do not face a binary choice of economic growth versus flooding, town versus country or bailing out flood victims versus saving children in other parts of the world from being killed by contaminated drinking water. These are false comparisons and false choices. I want to be clear: we can and must do both. All that is required is political will, determination and innovation.

[Mr Laurence Robertson (Tewkesbury) (Con)]

The Secretary of State talks about development being directed away from flood-risk areas unless it is absolutely necessary. However, the question is: why is it absolutely necessary to build in certain areas that are at great risk of flooding, including in my constituency, which he has been kind enough to observe?

[Mr Pickles]

I vividly remember the visit to my hon. Friend’s constituency in 2007. There is rarely a time when I pass Tewkesbury that I do not think of that. He makes a very reasonable point. Historic Tewkesbury remained relatively dry, while the new bit has experienced a degree of flooding. Things have to be managed. Ten per cent of the country is a large area; London is a large area. We need to ensure that a degree of caution is exercised, but ultimately we have to ensure that our citizens are safe.

[Lilian Greenwood (Nottingham South) (Lab)]

rose—

[Diana Johnson]

rose—

[Mr Pickles]

If the hon. Ladies will bear with me, I want to talk about the challenge of climate change and then I will give way.

The same approach should apply to climate change. There are certainly man-made causes to the recent flooding and the main cause needs man-made management. Policies on dredging, development and even tree planting directly affect our landscape, but the weather is a factor in itself. The debate on climate is highly charged and polarised between sceptics and zealots, but the conclusions should not be. We know that Britain’s weather and climate is fickle. If Britain was to have a national symbol, it would undoubtedly be the umbrella. Any expectation that the Met Office could have predicted the amount and severity of that rain is simply unreasonable. It does not have a crystal ball, despite improvements in predictions.

The Met Office still does not definitively know whether climate change contributed to the recent weather patterns. This might be a short-term trend or a long-term one, but I would simply say this: the risk is there to our nation of a changing intensity in Britain’s weather. Given that risk, we should prepare. It would be irrational not to insure ourselves against that risk, and if there is a long-term trend, we should adapt to such change, as my noble Friend Lord Lawson has advocated.

“Just as science and technology has given us the evidence to measure the danger of climate change, so it can help us find safety from it.”

That seems a very reasonable statement and I commend it to the House. It is the view of a former Prime Minister, Tony Blair, and I think he spoke very wisely.

[Lilian Greenwood]

If the Government really understand the potential impacts of climate change and extreme weather, why does their draft national policy statement on roads and rail contain no reference to ensuring that our existing transport infrastructure is resilient?

[Mr Pickles]

The hon. Lady is pointing to various documents and looking for omissions, but the facts speak for themselves, and the schemes that we are operating speak for themselves. We have been able to protect 1.3 million households, and although these have been perhaps the worst storms that we have faced for two and a half centuries, the number of properties affected has been relatively small.

[Hon. Members]

Will the Secretary of State give way?

[Mr Pickles]

As the floodwaters recede and the dark skies clear, there will be lessons to be learnt about the role and policies of quangos, the influence of man-made interventions on our landscape and rivers, and the resilience of our nation as a whole in the 21st century.

[Hon. Members]

Will the Secretary of State give way?

[Mr Pickles]

However, the first and the primary role of Governments is the defence of the realm. This Government will take whatever action is necessary to defend our nation from the forces of nature—

[Hon. Members]

Will the Secretary of State give way?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Members must allow the Secretary of State to conclude his speech.

[Mr Pickles]

I am most grateful for your protection, Madam Deputy Speaker. As I was saying, this Government will take whatever action is necessary to defend our nation from the forces of nature, and will prepare for the threats that it faces in years to come.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. As the House will be aware, a great many Members wish to speak, and there is a limited amount of time. I must therefore impose a time limit of eight minutes on Back-Bench speeches.

16:36

[Paul Flynn (Newport West) (Lab)]

If we are able to answer one question, it will give us the key to what I believe are the long-term practical solutions to the problems of Somerset and elsewhere. Why did the Somerset levels flood and the Gwent levels not flood?

Having represented part of the Gwent levels continuously as an elected person since 1972, I know them well, and members of my family live in Somerset. The areas are almost identical. They share 2,000 years of history, and their topographies and geographies are identical. The Gwent levels were drained by the Romans, and the sea wall was built by the 20th Augustan legion 2,000 years ago. During that long period, the levels have been treated very much the same. Drainage has been put into both. They have recently shared exactly the same weather—they are only a short distance apart—and exactly the same tides. There is no dredging on either side. So why on earth was there flooding on one side of the Severn estuary and not on the other? I believe that the answer lies in farming techniques.

As has been said, dredging is not a panacea. In 1928 there was a flood here, on this spot. The terraced houses opposite, in Page street and Millbank, were flooded, and people died. That flood was caused by dredging, which was carried out in the lower reaches of the Thames to increase access for ships. Yes, water did flow out more quickly as a result, but it also flowed in more quickly. It was easy for the tide to come in. In the dredged areas, the tide came in and met the water coming down from the hills. If dredging is seen as the answer in Somerset and is proceeded with, the lower reaches of the Parrett will be exposed to the extraordinary characteristics of the Severn, which holds more sediment in suspension than almost any other river in the country.

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

I am sorry, but I think that the hon. Gentleman is completely mistaken. The River Parrett is tidal for 18.3 miles of its length from the Severn estuary. It is precisely because of the tidal surge from the Parrett that we cannot move the water away from the Mendips, the Quantocks and the other hills. That is not comparable to the situation in the Gwent levels, where the topography is different.

[Paul Flynn]

If the hon. Gentleman will bear with me, on the characteristics of the Severn we know that on both sides of the river we have the second highest rising and falling tides in the world, but the issue is the amount of sediment because of the length of the river. In the Severn estuary and on the beaches, sometimes the rocks are clean and nothing has been deposited, but on another tide 1 foot of mud may be deposited there. Given the 18 tidal miles of the Parrett, it will be easy for the sediment to come in. However, the sediment is not just coming in from the tidal reaches of the river; it is also coming down from the hills. That is key. Dredging would create an open door to allow the sediment to move in from the Severn in greater quantities, as it did with the Thames in 1928.

What is the difference between the two areas? The difference lies in the Quantocks, the Mendips, around the Welsh hills and the Wentwood. There is a difference in farming in the two areas. That is made clear in a report in Soil Use and Management. It contained a warning, six weeks before the floods moved into Somerset, that a disaster was brewing. It said that surface water run-off in the south-west of England, where the Somerset levels are, was reaching a critical point—it said that six weeks beforehand. It added that on 30% of the land that researchers investigated, instead of percolating into the ground the water was pouring off the fields.

One of the main reasons was the increase in the growth of maize. There are other reasons, but when I was first elected the maize grown in this country occupied 1,400 acres. It now occupies 160,000 acres. What are the characteristics of that? It breaks up the soil and allows the water to run off. Maize is being grown in Britain not for food for humans but for animal food and biodiesel. One could ask whether, in trying to solve the climate change problem in that direction, we are creating a bigger problem in the other.

There was another warning—a clear warning—in 2005, when a Government report published a devastating catalogue of the impact of the changes in land use. As well as warning of the loss of fertility from the land and the poisoning of water courses, it said that

“increased run-off and sediment deposition can also increase flood hazard in rivers”.

That point was made in 2005. That Government paper urged:

“Wherever possible, avoid growing forage maize on high and very high erosion risk areas.”

The Government of the time—this is crucial—made it a condition of receiving some £3 billion in subsidies that farmers took action against that. The Government argued that ground cover crops should be sown, as a condition of receiving the subsidies, under maize and the land should be ploughed, then resown with winter cover plants within 10 days of harvesting to prevent water from sheeting off. Why is that not happening in Somerset? The reason is that the current Government have dropped that condition. That is one of the main causes of the extent of the floods. They issued a specific exemption for maize cultivation from soil conservation measures. We are now in the position of looking for instant solutions. Dredging is the cry. It has some effect but it can be deleterious as well.

We have thrown money at the problem, which most people are asking for. That will help, but in the town that I represent, there were regular floods 20 or 30 years ago. Now there are areas where fields are designed to flood and to take the excess water, and they have not been flooded for decades. There are plans. If we go ahead with some of the instant solutions being suggested in Somerset, we will decrease the flood threat to farmlands but we will greatly increase the threat to urban areas. One field flooded is far less damaging than having 100 houses flooded. We have to look realistically at the changes that are taking place. Of course the weather was thoroughly exceptional, but there are whole areas of Somerset that have been flooding for centuries. The “ey” suffix on the names of many of the villages there means “island”, and historically they were islands—little mounds standing up among the flat areas.

I welcome the reasonable way in which the Secretary of State has put his case today. We are now looking for long-term solutions. We are not looking for solutions that merely address the immediate political problems; we need solutions that will last for decades and that will take into account the changes in farming on our hillsides. The land there is no longer retaining the water and allowing it to percolate through slowly; the water is now rushing rapidly down and causing these freak flooding incidents. Thank goodness we have also come back to the realisation of the seriousness of global warming, which the motion also mentions. For so long, we have heard Conservative Members saying that it is not serious. It is, and we must act against it.

16:46

[Mr Laurence Robertson (Tewkesbury) (Con)]

I am pleased to be able to make a brief speech in this important debate. My constituency did not flood immediately but the waters got there in the end, and the continuing rain made for a difficult couple of weeks. I was grateful to the Prime Minister for coming in person to see the effects and meet a number of people who told him what we needed to do—and to avoid doing—in our area. I will outline one or two of those things in a moment.

I was pleased with the Government’s response to the flooding, so far as my constituency was concerned. I was also pleased that the Army was called in to help certain vulnerable people, and I commend the good work done by the fire and rescue services, the police, the Environment Agency and a number of the local councillors, who responded very quickly to the flooding.

[Bob Stewart (Beckenham) (Con)]

I spank my hon. Friend—[Laughter.] I mean, I thank my hon. Friend for giving way. I am going red now. The Pitt review suggested that when the armed forces were used in these circumstances, they should be paid for at full cost. Does my hon. Friend agree that we ought to look into reducing the cost of the armed forces at times of national emergency? At the moment, they often seem too expensive to be used.

[Mr Robertson]

I am grateful to my hon. Friend for his intervention. I have to say that there is very little chance of his going red, as far as I know. He makes a good point, and he knows far more than I do about the financing of the Army.

The Government response in my area was certainly very good, and a number of the schemes that have been built there in the past few years have also been very successful. Nevertheless, three of the four roads that serve the town of Tewkesbury were closed, and the situation was becoming serious. Sadly, a number of houses were also flooded. I say “houses”, but I should rephrase that. They are people’s homes. Some homes in Sandhurst and Longford, which are villages just down the River Severn, were flooded for the third time in not very many years, and it was heartbreaking to visit them. The challenge, which I want to discuss with the Government, is how we can avoid such flooding in the future.

It has been acknowledged that the Government cannot control the weather, and we seem to have experienced rather different weather cycles over the past few years. Nobody will have forgotten the terrible floods of 2007, when my right hon. Friend the Member for Brentwood and Ongar (Mr Pickles) came to visit Tewkesbury and saw some of the problems that we were facing. Even people on the other side of the world heard about those floods. I have spoken to people in Australia who remember seeing the famous picture of the flooded land surrounding Tewkesbury abbey. The abbey itself did not flood, and neither did an even older church just down the way at Deerhurst—it was built in about the 8th century—even though the village does flood.

The important point, which I am going to have to take up with the Secretary of State, although I raised it in an intervention and he did mention the building, is how vital it is not to continue to build in flood-risk areas. I hear what he says about 10% of the country being at flood risk. I have only a simple education, but I suggest that we do not build in the 10% and concentrate building in the 90%. Surely there is enough room to build the houses that we need.

I want to take up the issue of house building, because of a number of sites in my area that have been given planning permission. One of them is absolutely covered in water—it is at Longford, in an area that floods badly. Permission was granted, on appeal, by the previous Government, but I do not know why that happened. That was six years ago, but the houses have not yet been built. Planning permission has been given for a lot of houses in both Bishop’s Cleeve and Brockworth, but those, too, have not yet been built. I say to my right hon. Friend, and to the Government, that I do not accept that there is this need for housing which is being expressed; this need is being overestimated by the Government. I have raised the issue before and we need to look at the point carefully.

[Mr Robin Walker (Worcester) (Con)]

I recognise many of the issues that my hon. Friend from down the River Severn is raising. I do believe that houses need to be built, but does he agree that councillors should play a key role by making sure that they keep a record of flooded sites where some form of planning permission might have been given and, where necessary, use the planning system to protect them better, so that they are protecting the floodplain in the future?

[Mr Robertson]

I agree with my hon. Friend and I am grateful to him for that intervention. However, the councils in my area are saying that the Government are putting so much pressure on them to build a given number of houses that they have no choice but to build them in green-belt and flood-risk areas. I am sorry to have to say it to the Secretary of State but that is what my local councils are telling me. They are saying that they cannot accommodate the number of houses that they will be required to build without impinging on the green belt and without putting them in flood-risk areas. That is open for debate, but that is what my local councils are clearly saying to me. I really need him to examine the situation carefully and as a matter of urgency, because it is causing a very big problem. That issue was raised with the Prime Minister when he came to my constituency a week or so ago.

I wish to raise one or two other points about building in flood-risk areas. First, this issue comes down to what we define as a “flood-risk area”. I understand that the Environment Agency will assess an area as being at flood risk only if it is at risk from river flooding and not if it is at risk of surface water flooding. I would be happy to be corrected on that, but that is the situation as I understand it. Someone whose home is flooded does not really care what kind of water it is or where it has come from, because the situation is bad and they do not want it to happen. Perhaps the Government need to give different advice to the Environment Agency on how it classifies flood-risk areas.

[Dan Rogerson]

I just want to confirm that the flooding maps published by the Environment Agency before Christmas include surface flooding. Such an updating of the maps was one of the recommended changes, so that information is there. In addition, local authorities have key responsibilities in respect of groundwater and surface water flooding.

[Mr Robertson]

I am grateful to the Minister for that and I will certainly take it up with the Environment Agency locally, but the map I saw just a couple of weeks ago was not coloured blue where there is surface water flooding. We need to take that up, but I will certainly take his words back to the local Environment Agency.

I am also concerned about what the Environment Agency has told me about the cost-benefit ratio of flood prevention schemes. I raised this in a written question and I was told, “As long as it is greater than a level ratio, that is okay. They can go ahead and carry out those schemes.” But that is not what the Environment Agency is saying to me when I raise these points with it. So, again, I have to take these points back to the Environment Agency to see what we can do to have even more schemes put into place.

I hear what has been said about dredging and desilting. They are not the entire answer to the problem, but in some areas, especially where there are pinch points, we must carry out that work. Although dredging and desilting are carried out in certain parts of the country, they used to be carried out an awful lot more. I am pleased that the Prime Minister has now weighed in on this and agreed that they should take place in certain areas, and that is what we are pressing the Environment Agency to do.

I welcome a number of the initiatives that have recently been taken to help compensate people who have been flooded and to provide for the repairs and replacements that they need. Will there be any help for people to provide their own flood defences so that they do not get flooded in the first place? People who are better off may be able to afford to do that, but those who are less well off cannot. It would be better if we could help people to prevent the flooding in the first place, as well as trying to help those who have been flooded.

On the issue of insurance, I am pleased that a lot of progress has been made on the Flood Re scheme, but what about the excess payments? An insurance company might provide the insurance, but if it puts an excess of £30,000 or £40,000, which I have come across, on a property it is effectively not covered, because an owner would have to pay so much to put it right that they would not be getting any insurance money back. I do not know whether the excesses will be covered in the Flood Re scheme.

[Mr Pickles]

indicated assent.

[Mr Robertson]

My right hon. Friend is nodding. I look forward to receiving more details on that. That is good news if that is to be the case.

Finally, I ask the Secretary of State to revisit the issue of housing numbers and to prevent houses being built in the wrong places, where they are likely to flood or cause other houses to flood.

16:56

[Chris Ruane (Vale of Clwyd) (Lab)]

It is my personal belief that global warming and climate change are occurring, that they had an effect on the recent flooding and that they will have a bigger effect on flooding in the future. That belief was the reason why I decided, eight years ago, to back npower’s proposals to put 30 wind turbines offshore off the coast of Rhyl. I switched on the turbines. The Prime Minister then came up to Llandudno for a Tory party conference and described those turbines as giant bird blenders. He then went back to London and stuck a mini bird blender on the top of his chimney.

According to statistics given to me on 17 December, which do not include figures from the recent flooding, 408 households in my constituency flooded in the two-year period from 2011 to 2013. That is the second highest number in the UK. The Prime Minister did not visit my constituency to speak to the flood victims. My constituency was again flooded on 23 December, and again, he did not visit. That is an insult to the people of the Vale of Clwyd.

[Hugh Bayley (York Central) (Lab)]

Like my hon. Friend, I represent a constituency that is at great risk of flooding. I know the human suffering when people lose personal possessions—photos of weddings and of deceased relatives—homes and businesses. Will he say a little bit about how people in his constituency are coping with those pressures?

[Chris Ruane]

I will come on to that in a moment when I describe the visits that I have made to my constituents in the Vale of Clwyd, in St Asaph, Rhyl and Prestatyn.

Progress has been made on flood defences in my constituency. Some £7 million has been spent on a harbour wall in Rhyl, £3 million on raising the banks of the River Clwyd and £4 million will be spent on extending the harbour wall. Having reviewed the two floods, my local authority has a list three pages long of the work that needs to be done in the Vale of Clwyd, and it can only be done if we get help from central Government. I spoke first hand to residents in St Asaph and in Rhyl when I visited them in December 2013.

[Mark Tami (Alyn and Deeside) (Lab)]

My hon. Friend will have heard the Prime Minister say that money was no object, but when it came to Wales, he was not quite so sure, nor so sure about where the money would come from.

[Chris Ruane]

I agree. The Prime Minister came to a constituency in west Wales to announce the UK––or rather English-only––increase in funding. Again, it was an insult to the people of Wales to treat them in such cavalier fashion.

I have visited the people of St Asaph and Rhyl whose homes were flooded, and I agree with my hon. Friend the Member for York Central (Hugh Bayley) that flooding has a massive impact on individuals. It is not just the flooding, or the six months after when their houses are drying out and being rebuilt, but the fact that it leads to stresses and strains. There was one direct death in St Asaph in the floods of 2012, but I believe that many more indirect deaths resulted from the stress caused to elderly people. I visited the people of the Rhyl East ward whose homes were up to 3 feet deep in murky brown water. They have been through hell and high water.

I congratulate the volunteers and residents of those towns and of Prestatyn, which was nearly flooded. I congratulate the charities that raised funds, materials and gifts in kind for the victims. I congratulate the statutory authorities on their response, and I congratulate the voluntary organisations. The floods have left a legacy in my constituency. Some of the homes in St Asaph are now uninsurable and valueless. A £340,000 home, representing a lifetime’s commitment, is now valueless because it is uninsurable and the work that needs to be done to prevent future flooding cannot be undertaken given the lack of funding. People are living in fear. They watch the news every night to see the latest weather forecast and they do not sleep easy if it is going to be a bad night.

The big issue is funding. I mentioned it in a question the other week to the Secretary of State, when he called me a lady. According to the Environment Agency, for every pound invested in flood defence, there is an £8 return. Which of us would not bet on a horse if we were getting £8 back for a pound down? The Government are not doing that. They are not putting the investment in place. I have tabled questions on this. The answer to parliamentary question 132249 revealed that in Labour’s last budget, the amount spent on flood defences overall was £664 million. The following year, it was cut to £573 million, then £560 million, then £574 million and then £612 million by 2015. Whichever way we look at it, those are cuts compared with the Labour years.

I believe that those figures have been manipulated. They do not include inflation, but they do include not just central Government funding, which was what was in place in 2010-11, but private funding and funding from other agencies. We are not comparing apples with apples. In the Vale of Clwyd, we are pleased with the flood defence work, but it is does not matter if we build £7 million of defences here, £4 million there and £3 million over there, it only takes a gap as tiny as a little boy’s finger in the dyke to spoil the whole investment and environment and to wreck thousands of homes. If the proper flood defences are not put in place, these are wasted investments.

The Pitt report made 94 recommendations, but many of them have not been taken up. I shall give examples. I have tabled 12 parliamentary questions on this. I tabled another 30 today, and there will be another 50 tomorrow, covering each of the recommendations. The answer to question 186940 stated:

“I have made no assessment of local authority leaders’ or chief executives’ effectiveness”.—[Official Report, 13 February 2014; Vol. 575, c. 800W.]

Why not? The answer to question 186945 stated:

“There have been no discussions with the Association of British Insurers or other relevant organisations on this matter.” —[Official Report, 12 February 2014; Vol. 575, c. 661W.]

Why not?

[Mr Pickles]

What matter?

[Chris Ruane]

On the matter of improving flood defences. Pitt recommends not building on flood plains, and in 2008-09 we had a 25% reduction in the number of houses built on flood plains. The figures are unavailable for 2012 and 2013. Why?

After dealing with funding, the issue I turn to now is one that was mentioned by my hon. Friend the Member for Newport West (Paul Flynn): the importance of not only putting in place these big £7 million concrete defences but looking at softer, more sustainable ways to improve flood defences. I point to an excellent recent article by George Monbiot in The Guardian. There is huffing and puffing in the Chamber, but he made many excellent points, and I flushed out the issues that he addressed with about 20 parliamentary questions. I will come on to some of the answers in a moment.

In the article, Monbiot referred to Pontbren in Wales, where farmers have engaged in linear contour planting of trees, to provide some shade and shelter for their sheep. What they noticed, after they had provided that shelter, is that flooding in the flood plain was down by 29%. Planting trees on just 5% of the hillside led to a 29% reduction in flooding in the flood plain; even if trees were planted on 100% of the hillside, there would only be a 50% reduction in flooding. We need specific targeted measures for such linear contour planting in the catchment areas of our big rivers, and even our little rivers. It would be a sound investment. A line of trees that has been planted is 67 times more effective in getting rainwater into the ground than grass alone.

The funding is there. The funding for the common agricultural policy needs to be looked at. We need to be a strong voice in Europe, arguing that CAP funding can be used for afforestation in upland areas. We are creaming off 10% in England for this purpose, and we should be allowed to use that money to say to farmers and relevant bodies, “Plant these trees in these catchment areas and stop this water coming down and wrecking lives and households.”

This is not just a Welsh Government issue—

[Dan Rogerson]

rose—

[Chris Ruane]

No, I will not give way. I have had meetings with Alun Davies, the Welsh Minister with responsibility for flooding, and I was really pleased with his response. I would like to have a meeting with the Minister, who has responsibility for flooding, and I hope that he will say yes in his winding-up speech to such a meeting. No assessment has been made by his Department of the impact that afforestation has on flooding. The Department for International Development is sending experts out to Nepal to tell people there how to deal with flooding, but it is not sending its advisers 500 yards down the road to DEFRA to tell the officials there how to do it.

This is a serious issue. It has big effects for seaside towns, because the water that is percolating through the Welsh hills is pure and when it ends up on the coast it is not infected with sheep faeces or whatever, and we get clear readings for our mandatory bathing water standards. It is a win-win situation.

17:07

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

I am grateful for the opportunity to highlight the issues that we on the Isle of Wight have experienced during the past few weeks. We have two main problems as a result of the terrible weather—flooding and land movement. Of course, the island has experienced flooding in the past, but the meeting that I called about three weeks ago, with representatives of the Isle of Wight council, the Environment Agency, Island Roads and Southern Water, was to discuss a totally different type and scale of flooding from that experienced in the past.

Flooding has occurred in rural areas of the island, in some cases fairly regularly, but, as in other parts of the country, it has been far more severe this year. There is no instant solution, but the rivers, such as the eastern Yar, have been neglected. There has been a lack of desilting—desilting, not dredging—and bushes and trees have been allowed to grow on the riverbanks. These mistakes must be corrected on an annual basis.

In urban areas, however, there have been quite new experiences. The unprecedented rainfall has led to more than 120 homes and businesses being flooded across many parts of the island, including along some main roads, such as in East Cowes and Binstead during the early hours of Christmas eve, and in places such as Cowes, Carisbrooke, Newport and Ryde.

In some cases, problems were exacerbated by narrow pipework, which was unable to cope with the extra volumes of water, and floodwater rushed through a densely populated area, reaching the height of windowsills inside people’s homes. In other cases, flooding was due to the extreme volume of water combining with a high tide, including in central Newport, in the street in which I live, Sea street.

Many local flood group meetings have taken place across the island. Would you join me, Madam Deputy Speaker, in paying tribute to the many islanders, as well our neighbours in the west country and the south of England, who have pulled together to help and support one another through these very difficult times?

[Bob Stewart]

I very much thank my hon. Friend for giving way. There has been a problem in my constituency in places such as Courtfield Rise and Sparrows Den, not with water on the surface, but with water underneath in the water table coming up and seeping through the ground. We cannot think of a way to stop that.

[Mr Turner]

It is difficult to stop—in fact, it is impossible. Occasionally, the Army was on the Isle of Wight, ready to act to tackle the problems that people were experiencing.

A more deep-seated issue from our point of view is the irreversible damage to land stability, which has caused significant problems across the island. To name just a few: the west Wight beauty spot, Headon Warren; the cliff fall and collapse of part of the road in Shanklin; and, in particular, the landslide along the Undercliff. I spoke on the telephone to a constituent, Barry Thwaites at his Undercliff home. He was concerned about subsidence. When I got there, part of his garden had fallen away, the next-door bungalow had partly collapsed and his neighbours were moving out.

To the west of Mr Thwaites’s home, the A3055 was closed, as it was under repair following a previous collapse. To the east, about a quarter of a mile away, all that remained of the road was a strip about 3 or 4 feet wide over a length of about 60 yards. The other side of the road had fallen to a depth of about 20 feet. Unsurprisingly, the neighbours were concerned, and there are fears that more properties may well follow.

Residents have now been advised to leave their homes for their own safety, and all but two of them have now moved. They face a worrying and uncertain future, not knowing when or even if they will be able to move back into their homes. For many of them, their home is everything they have worked for for their whole life.

Measures have quite rightly been announced to help householders and businesses protect homes and buildings against future damage from flood water. However, the insurance companies must make it an absolute priority to help householders and small businesses.

I should also like to mention the Totland sea wall. A specialist report from Mott Macdonald has identified the fact that the damage was caused by exceptionally heavy rainfall during the winter of 2012. Residents fear that with no effective protection from the sea their homes at the top of the cliff will be at risk. Those same residents will feel it unfair that damage caused by heavy rainfall in 2013 is dealt with by the Government, but not damage due to heavy rainfall in 2012. Will the Minister tell me and other islanders what will be done to address the long-term and deep-seated issues that arise as an indirect consequence of the unprecedented rainfall?

[Several hon. Members]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Before I call the next speaker, I must explain to the House that my arithmetic is not wrong, but when Members take interventions, the time limit for speeches increases. Speeches have been considerably in excess of eight minutes, so I have to reduce the time limit to seven minutes.

17:14

[Hugh Bayley (York Central) (Lab)]

It is right to begin with the human cost of flooding. My constituency is no stranger to flooding, and the devastation to home owners and businesses is incredible, which is why we need a clear policy, supported and understood by Members on both sides of the House, whichever party is in government, that gives the public confidence that the Government will provide the investment in flood protection that is necessary to minimise the risks.

In his speech the Secretary of State seemed to make the case that because a substantial number of Government Back Benchers got up to thank him for putting investment into flood protection measures, all was fine. [Interruption.] He says he did not mean that, but he certainly advanced the argument that many people were grateful for flood protection measures. So, too, am I. We had a hiatus with one particular scheme in York after the new Government came in, but it is now going ahead, thanks to funding from the Environment Agency and our local City of York council. But the budget for flood alleviation measures has fallen from the time this Government came to power in 2010 from something like £650 million a year to something like £550 million a year. There would be more Members getting to their feet to thank the Secretary of State, as I have done and as other Members have done, if that additional £100 million a year had been spent.

Back on 9 January at DEFRA questions the Secretary of State claimed falsely that the coalition Government were spending more on flood protection than the Labour Government had spent. I challenged him, quoting figures that his Department had given to me in answer to a parliamentary question in July last year, pointing out that spending was in fact down by £113 million from what it was at the time of the general election. The Secretary of State for Environment, Food and Rural Affairs gratuitously accused me of being a slow learner, because I had the cheek to challenge his slippery figures, and he repeated his bogus claim that

“this Government are providing more”—

for flood protection—

“than any previous Government in the current spending review.—[Official Report, 9 January 2014; Vol. 573, c. 440.]

I was appalled at this statement. I tabled a further parliamentary question which was answered by the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson). He gave me a different set of figures, but they confirmed a fall of about £100 million since the general election. I asked the House of Commons Library’s statisticians to comment on the figures that I had received, and they concluded:

“Departmental spending on flood defences in 2011-15 will be lower than it was in 2007-11 in both nominal and real terms”.

I therefore went to the UK Statistics Authority to ask whether it agreed with the House of Commons statisticians’ analysis or with DEFRA’s. I quote from the reply that I received last week from the chairman of the authority, Sir Andrew Dilnot. He said:

“The Statistics Authority’s own analysis of the available figures concurs with the conclusions of the note prepared for you by officials in the House of Commons, attached to your letter and subsequently reproduced in a published analytical article. We agree with their finding that, as at January 2014, Government funding for flood defences was expected to be lower in both nominal and real terms during the current spending period than during the last spending period.”

In order to justify his bogus and misleading claims, the Secretary of State did four things which no professional statistician would do: he selected particular time periods which favoured his case; he included estimates for future projected expenditure, when we do not know whether that will actually be spent or not; he added projected and unconfirmed estimates of private investments in flood protection, and showed them as Government expenditure; and he gave cash figures without showing that these were reduced when one took account of inflation.

The Secretary of State’s figures were unprofessional, massaged and spun. This is what Sir Andrew Dilnot had to say about them in his letter to me:

“Defra does not publish figures on flood defence spending as official statistics. There is therefore no obligation for Defra to comply with the Code of Practice for Official Statistics in relation to these figures. However, given the salience of these figures and the public interest in them, it is my view that it would better serve the public good if Defra were to consider publishing official statistics on expenditure by the relevant organisations on aspects of flooding and coastal erosion management”.

There is a solution to the problem of slippery figures changing from one parliamentary answer to another. It is clear that DEFRA cannot be trusted to provide truthful figures in-house. In future, figures on flood protection spending should be provided as official statistics, produced in a quality-assured way and issued by the independent and trustworthy UK Statistics Authority. It is clear that the Secretary of State for Environment, Food and Rural Affairs misled the public, this House and the Prime Minister, who has been repeating his figures—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. I am sure that the hon. Gentleman did not mean to accuse a Government Minister of misleading the House.

[Hugh Bayley]

Well, he gave figures that are being contested by the independent UK Statistics Authority. I wish him a speedy recover—

[Madam Deputy Speaker]

Order. I am sure that the hon. Gentleman can find a different way of phrasing the point he wishes to make.

[Hugh Bayley]

I just have found a different way of phrasing it.

I wish the Secretary of State a speedy recovery, but when he returns he should make a statement to the House to apologise for inadvertently misleading us and to confirm that figures issued on flood protection will in future be provided as official statistics from the UK Statistics Authority. [Interruption.] If he wants to apologise to me for his gratuitous insult, I will accept an apology at that time.

[Madam Deputy Speaker]

Order. I do not need advice from Members on the time limit—I can count.

17:21

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

Sadly, in Somerset we are used to flooding. After last year’s floods, which we thought were a one-in-100-year event, it is dismaying—that is an understatement—to see even worse flooding this year. We can cope with three feet of water for three weeks, but not 10 feet of water for 10 weeks. To put it in context, if we flooded the City of London, the City of Westminster, Kensington and Chelsea, Camden and Islington, that would still be smaller than the area currently flooded in my county. Although we have now managed to open Monks Leaze Clyse, the River Sowy is flowing and some of the biggest pumps we have ever seen in Somerset are working, it will nevertheless be weeks before we remove the floodwater.

I would like to offer my heartfelt thanks on behalf of my constituents to the people working for the Environment Agency, the internal drainage boards, the police and fire services, the Royal Marines and the local councils, who have been doing sterling work. I would also like to thank all the volunteers and the huge number of people who have donated to the Somerset Community Foundation to help those facing hardship as a result of the flooding. I thank the volunteers from the Flooding on the Levels Action Group for their sterling work in my constituency and the farmers from across the country who, as the hon. and learned Member for Harborough (Sir Edward Garnier) said, have been sending forage to our farmers. It is very much appreciated.

I would also like to thank DEFRA Ministers, the Secretary of State for Communities and Local Government, the Deputy Prime Minister and the Prime Minister for coming to Somerset, seeing the situation for themselves and then acting on the basis of what they saw. As a result, we have had not only a very much enhanced crisis reaction, but the £10 million fund for farmers, the fund for small businesses affected, the tax and business rate relief and so on. That is very good news.

We are less pleased with the number of myths that have been propounded about Somerset, often by armchair experts who suddenly know all about the hydrology of the levels. Some of those myths have been pernicious. Some have been made in contrary directions. For example, some people have said that everything will be all right if we dredge, but it will not, as the Secretary of State said earlier. Dredging will not suddenly empty the levels or prevent flooding in future. Equally, those who say that dredging makes no different are talking nonsense, in my view. The fact that our rivers—the Parrett and the Tone, in particular—are at 60% of capacity means that we cannot turn on the pumps in large parts of my constituency because there is nowhere for the water to go. It means that the flooding starts earlier, stays longer and covers a greater area.

Equally, some people said, “If you dredge the river, it will turn into an uncontrollable torrent.” Those people had clearly never seen the River Parrett. It is probably the slowest river in the whole of western Europe. It drops 1 foot every mile; it is not going to turn into an uncontrollable torrent. We have also heard that the silting problems on the Parrett come from upstream, when in fact most of the silt is deposited by the very large tidal flow on the 18 miles or so of the river that is tidal. Although there is a contribution from upstream, that is where the main problem lies.

Why are we in this position? It is not because of purposeful negligence on the part of the Environment Agency, but for 20 years now it has been pursuing a policy with which I profoundly disagree. It has been doing that for two reasons. The first reason, which is perfectly valid in Treasury terms, is the cost-benefit return on investment that favours the protection of big cities and towns. I understand that, but, as a Somerset man, I do not see why we should be left out. The other reason is the heresy that sees the rivers as the area of environmental focus rather than the very precious ecology of the levels between the rivers. The rivers are the way of getting the water away from areas that are of vital importance.

We have been sent away to produce a 10-year action plan, and we are very near to completing it. I do not want to pre-empt it, but I will be very surprised if it does not include the dredging for which we have already issued the licences. Just as important is the maintenance of that dredging year on year. In that regard, we will need some significant changes to the revenue stream for local authorities and the internal drainage boards to enable them to do the job. We also need to deal with whole-river catchment. We need upstream measures, for which I hope we will use pillar 2 money within the common agricultural policy in order to retain more water in upstream areas. We need reforestation, which was mentioned by the hon. Member for Vale of Clwyd (Chris Ruane); changes in cropping, because that will contribute as well; and sustainable urban drainage systems in our towns so as to prevent run-off. We must consider a barrage or a sluice on the River Parrett to prevent the tidal surge that deposits so much water and silt upstream.

We need to revisit our emergency responses so that they are quicker and more adept at dealing with the circumstances in which we find ourselves. We have been learning as we go, and communications are much better now than when this emergency started. However, I wonder whether we would have had the same attention in Somerset had the flooding of the Thames valley happened first. I was very pleased that we were able to make the rapid progress we did.

[Damian Collins (Folkestone and Hythe) (Con)]

Will my hon. Friend give way?

[Mr Heath]

Yes, because it will give me an extra minute.

[Damian Collins]

Does my hon. Friend agree that we also need to look at co-ordination between bodies such as UK Power Networks and the Environment Agency to make sure that when power goes down it is restored to pumping systems, in particular, as a priority so that we can keep the water moving?

[Mr Heath]

The hon. Gentleman is absolutely right. We need to revisit the whole issue of resilience in a big way.

The transport links to the south-west, which are tenuous at any time, have now been shown to be inadequate—not only the railway system but the roads system. The A303 is completely incapable of doing the job that we ask of it as a strategic route to the south-west. Where else in the country would the main road to the county town—the A361, which was mentioned by my hon. Friend the Member for Taunton Deane (Mr Browne)—be flooded and closed for months? For months we have not had access from central Somerset to the county town. The village of Muchelney—the name gives a clue, because “mucheln ey” means “big island”—has been cut off for a very long time. The bridge between Long Load and Long Sutton has been closed for a long time. These situations are hugely disruptive to people’s normal lives. Unless we can address some of those issues, we are not doing the job that is expected of us by our constituents.

Lastly, we need resilience at household level and at community level. Points were made earlier about equipping people individually to put in measures to prevent ingress of water into their houses and to make villages better able to deal with the problem. Of course, the planning issues that the hon. Member for Tewkesbury (Mr Robertson) mentioned are fundamental as well. It is quite extraordinary that in some of the flooded villages in Somerset one sees bungalows nestling under the level of the river next to them. One wonders why people would build bungalows below the water table, and yet they have done so and we need to address how to deal with that in a much more satisfactory way.

The fact is that the Somerset levels are a man-made environment. The area is not a floodplain, as some people call it; it is reclaimed inland sea. Every bit of water we remove from Somerset has to be pumped over the banks of the river to a river that is higher than the surrounding land in order to get it away. That means we need special measures to deal with our special circumstances. A one-size-fits-all policy from the Environment Agency is never going to work for us.

I am proud of the stoicism and practicality of my constituents in immensely damaging and difficult circumstances. I am glad that the Secretary of State indicated that he will not oppose the motion, because I would have voted for it.

17:30

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow the hon. Member for Somerton and Frome (Mr Heath).

The floods and scenes we have seen have been devastating and awful, as is the cost to individuals, families, homes and businesses. My first experience of really bad floods in my constituency was due to a burst pipe last October, which led to 14 homes on Ville road in the centre of Scunthorpe being very badly flooded. I visited those homes to see the devastation and they illustrated how bad floods are: they turn people’s homes upside down.

I pay tribute to the response of the Humberside fire authority, which came out in the middle of the night, got the situation fast under control and made a real difference, because there could have been much more damage. Anglian Water has responded well and is working hard with the people affected to try to ensure proper and appropriate support through these difficult times. Although there are still, even now, compensation issues, I believe they are being worked through properly. I am pleased that North Lincolnshire council and Anglian Water are working together, along with Severn Trent Water, to ensure that that is less likely to be a problem in future.

I have done a lot of work on the industrial river that runs through the heart of my constituency. Bottesford Beck might not sound like a river, but it is a big one and in recent years its levels have risen significantly and become a threat to farmland—it was not flooded previously, but has been consistently flooded over the past two years—and to households. As a result of an initiative by the Friends of Bottesford Beck to draw people together, Tata, the Environment Agency, North Lincolnshire council, Holme Hall golf club and local farmers are working together to bring pressure to bear. I am pleased that last month the Environment Agency agreed that there should be a pilot project to de-silt Bottesford Beck. That needs to happen in order to prevent some of the problems faced by the local community, particularly at the farm of Philip Marshall, which has been damaged. The situation has had a negative effect on his livelihood.

I was pleased to hear the Secretary of State, who is back in his place, say that he was determined to make sure that farmers affected by flooding will be helped and supported. I hope that help will be available to farmers wherever they may be in this country, including Philip Marshall, who has been affected by the flooding of Bottesford Beck.

It had been hoped that the pilot would go ahead shortly, but unfortunately it looks as if it might be delayed because processes need to be properly followed and there is a balance to be struck between environmental tensions. Given that the fish breeding season begins in the middle of March, the de-silting pilot might not be able to take place until the middle of June. That is causing frustration and exasperation locally, but I hope that will be worked through.

The recent flooding event that had the biggest impact on the community I represent was the tidal surge from the Humber and the Trent at the beginning of December. It affected communities from Barrow Haven in the north, which is represented by the hon. Member for Cleethorpes (Martin Vickers), to East Butterwick in my constituency of Scunthorpe. The hon. Member for Brigg and Goole (Andrew Percy) is in his place. Communities in his constituency were the worst affected, and he showed good leadership in relation to those difficulties at that time. Such communities do not work only within constituencies, and the impact on businesses such as Reeds country hotel or Cemex is felt by not only my constituents but those of other hon. Members.

I was delighted by the response of the local community to those difficulties. Individuals responded extremely well, as did businesses, such as the Wortley House hotel, which provided accommodation for the people affected, and local supermarkets, which provided food. There was a real community response to the challenge of the moment. The day after the floods, I visited the Pods—the sports and leisure complex in the heart of Scunthorpe—where the families affected, particularly those from the Burringham area, were seeking the support provided by North Lincolnshire council.

It is interesting that at times of difficulty or distress, the people affected do not look to Serco, A4e or Capita, but are pleased to see the Environment Agency, the local council, the firemen and, of course, the Army, which has recently been involved on certain occasions. That is a reminder of the value of public services and the role they play.

I was pleased to hear the Prime Minister say that money will be no object to the communities affected. I hope that the Minister will confirm in his response to the debate that that commitment applies to communities such as north Lincolnshire, as well as others up and down the country.

BBC “Question Time” was recently held in Scunthorpe. Interestingly, local people expressed the concern that when such things happen in our unfashionable area, they are not always noticed by the Westminster village, but when they happen closer to this place, they are front-page news. It is important that this House demonstrates that it is concerned to support the farmers affected.

[Martin Vickers (Cleethorpes) (Con)]

Will the hon. Gentleman give way?

[Nic Dakin]

I am very happy to give way to my honourable neighbour.

[Martin Vickers]

The hon. Gentleman is making a valuable speech, but will he acknowledge that on the Saturday following the 5 December surge, the Secretary of State for Environment, Food and Rural Affairs visited both my constituency and the north bank?

[Nic Dakin]

I absolutely recognise that fact, which was a good response by the Government at the time. I was just replaying people’s concerns, which remind us of the importance of our making a real effort in this place to demonstrate that we care about such things wherever they happen. In particular, many more dwellings or homes were affected in the north Lincolnshire area before Christmas than were later affected in some areas that have had much more public attention. It is important for all of us—as Team North Lincolnshire always does across the park—to bang the drum for the people and communities we represent.

17:38

[Steve Brine (Winchester) (Con)]

It is a pleasure to follow the hon. Member for Scunthorpe (Nic Dakin). There is a Team North Lincolnshire, which Team Hampshire on these Benches will do our best to follow.

I have to say that the situation on the ground in my constituency is improving, but the crisis is far from over. Everything we face there and everywhere I have been in the past few weeks has been described as and compared with the events of 2000, when we were last badly hit by flooding. People have been watching the water and river levels to see how these floods compare with those of that year.

I have not been on piste or on beach during the past few weeks; I have been in my constituency to help out where I could. The village of Kings Worthy has been hit particularly badly, with many road closures that have caused huge inconvenience to local people. In the village of Headbourne Worthy, huge groundwater issues have caused sewage problems and a huge loss of business for local pubs and the Good Life garden centre. In the village of Sutton Scotney, which I visited last weekend, several people have had to leave their homes, and will be looking for the help outlined earlier by the Secretary of State. The village of Hursley has suffered huge issues with rising groundwater and sewage levels; when I visited it, raw sewage was coming down the street. I have learned about the ruthlessness of water over the past few weeks. Water will find the quickest, most ruthless route to the bottom. It does not discriminate between the things that it goes through or across in getting to the bottom. I have seen the devastating impact of that in the village of Littleton over the past few weeks. I have also seen it in the centre of the great city of Winchester, which the River Itchen flows through.

Over the past few weeks in my constituency, I have seen an incredible example of what the Prime Minister would call the big society. Communities have come together and responded fantastically. I will name-check a few people because they deserve it. In the village of Twyford, a gentleman called David Sullivan gets up very early and does a water level reading, which he e-mails to me. He has done that every day for the past fortnight. David Sullivan, Angela Forder-Stent of the parish council and the rest of the team in Twyford have been phenomenal. Parish clerk Sue Hedges and Councillor Stephen Godfrey in Sutton Scotney have worked tirelessly. Harry Whorwood and Giles Vigor-Robertson in Headbourne Worthy have basically given up work over the past few weeks to protect their communities.

I am name-checking those people and talking about their community spirit because it shows how communities can respond to the devastation that flooding can bring, which many Members have described. The stoicism and pragmatism that I have seen have been remarkable. From the constituents I have met over recent days, I would say that the older they are, the greater their stoicism and pragmatism, because they have seen it all before.

The motion mentions the Pitt report, which I have of course read. It is true that some of the recommendations of the Pitt report have not been implemented. That is regrettable and we need to see to that. It stated in particular that multi-agency working must be better next time. In my constituency, the multi-agency approach has worked. The Environment Agency, Hampshire county council, Winchester city council, the parishes, Hampshire fire and rescue service and, of course, the Army have been involved. I was in Kings Worthy one morning during half term last week trying to move 1,000 sandbags, when 10 chaps from the Royal Signals at Bulford turned up to help. I can tell the House that, with my shoulders, they were very welcome.

The multi-agency working has been brilliant and responsive at all times. The Environment Agency has received a lot of criticism over the past few weeks. Some of it has been deserved in other parts of the country, but that is for other Members to touch on. In my area, the Environment Agency has more than risen to the challenge. Mike O’Neill deserves a mention. He even went door-to-door with me in parts of central Winchester to talk to and reassure residents. He deserves great credit for that. At one point, water was flowing down the appropriately named Water lane in Winchester, which the River Itchen runs past, at 12,000 litres per second—very fast—towards the ancient city mill. That was terrifying for residents. However, the multi-agency working and the good thinking of the Environment Agency prevented flooding in hundreds of homes. It deserves our thanks. The agencies have played a bad hand very well.

Upstream from Winchester, the Royal Engineers lowered several hundred 1-tonne bags of gravel into the River Itchen from the bridge of the M3 motorway to restrict its flow. That has not been done before. It slowed the Itchen and held it back. It flooded some farmland in the village of Easton in the Itchen valley, but farmers were happy to allow that to help save Winchester. It worked. That was a roll of the dice by the Environment Agency. When Chris Smith came to Winchester yesterday, he went to the River Itchen and saw the work that had been done. I know that he was impressed and I thank him and his team for their support in doing that work.

In closing, I am concerned about the bids that the Environment Agency has asked Hampshire county council, as the risk management authority in my area, to put together for the six-year plan for 2015-16 to 2020-21. It is good that a long-term plan is being put in place, but the process is incredibly rushed. The council is under incredible pressure to put it together. Just today, two parish councillors in my area have told me about meetings that they will have in the next few weeks to consider the response to the flooding crisis.

We need time to get this right. Of course we do not need to drag it out through the whole year until next winter comes around quickly and we are back in this situation again. However, my constituents want to know that proposals that miss the deadline because of proper consideration of what we need following the floods will not miss the boat, and that we will not be told that they have missed out as a result. I hope that the Minister—who is nodding—hears that point.

In conclusion, there is always more the Government can do, and of course if there were an endless pot of money we could do everything we want. However, the relief package that has been put in place and administered so efficiently by Councillor Humby and his colleagues at Winchester city council is welcome, and it will be made use of by me and my constituents.

17:45

[Chris Williamson (Derby North) (Lab)]

I start by concurring with everything said by my hon. Friend the Member for Newport West (Paul Flynn). He was entirely right when he drew a comparison between his constituency and what was happening in Somerset. As I think the hon. Member for Somerton and Frome (Mr Heath) acknowledged, to some extent farming practices are responsible for the extent of the flooding we have seen. In addition, however, the Government’s own ideological obsession with deregulation is responsible, and I will tell the House why. As hon. Members may know, maize cultivation is now a significant feature of the British countryside in many areas, and it is used for animal feed and—as my hon. Friend the Member for Newport West pointed out—for biofuel.

The problem with maize cultivation, however, is that it has a significant impact on land’s capacity to hold water. When Labour was in office we recognised that, and back in the mid-2000s, I think, we implemented soil conservation measures to take account of that, linking subsidies to farmers to that sort of conservation necessity. When this Government came to power, with their obsession with deregulation, they specifically exempted maize cultivation from all soil conservation measures. That seems absolutely crazy. That crop causes the most floods and does the most damage, yet it is completely unregulated—it is a crazy example of barmy deregulation. As well as investment in flood defences and dredging in certain circumstances, it is vital that the Government make clear the importance of that issue, and take the necessary steps to ensure that sustainable land use is a feature of ensuring—as the Prime Minister said—that the Government secure a sustainable country for the future.

Let me say a little about my constituency, which thankfully was spared the floods on this occasion. According to recent data, 3,372 homes in my constituency are at risk of flooding, and 1,370 are at significant risk. It was really just luck that the rain fell where it did, because had it fallen on the River Derwent catchment area, my constituents would be counting the cost of flooding to their homes. I remember back in the 1960s when around Christmas the homes at risk in my constituency sustained the sort of flooding that we are seeing in other parts of the country today.

We know that funding for the “Our City Our River” flood defence scheme in Derby was substantially cut by this Government when they came to office. That has caused considerable anxiety for my constituents, and made it difficult for many of them to obtain flood insurance. The Prime Minister said that money was no object and that the Government would invest in securing a sustainable country for the future, so I hope that the funds necessary for flood defences in my constituency will be made available. It is no good simply saying, “Well, they can be completed by relying on the private sector and using the funds that it will put in place”. We need to get the private sector to the table, and meanwhile the rain might fall and the floods may arrive.

We know that there are a number of climate change deniers on the Government Benches and in the Cabinet itself—indeed, the Secretary of State for Environment, Food and Rural Affairs is a climate change denier—but it seems obvious to me, from the events of the past few months, that climate change is happening. We are seeing more extreme weather events, and, as I have already pointed out, Derby has been lucky.

It is important to acknowledge the heroic and innovative work undertaken by our fire and rescue services. The Secretary of State for Communities and Local Government has referred to some of that excellent work and other hon. Members have mentioned it in their contributions too. Firefighters have been tireless in their efforts to rescue people and to protect certain areas from being inundated. Without their efforts, residents in areas afflicted by these awful floods would have experienced even more devastation. The Pitt review, which was published some time ago, called clearly for a statutory duty to be imposed on fire authorities to tackle flooding and to be the lead bodies in these circumstances. Recommendation 39 of the Pitt review states:

“The Government should urgently put in place a fully funded national capability for flood rescue, with Fire and Rescue Authorities playing a leading role, underpinned as necessary by a statutory duty.”

I hope the Minister will indicate whether the Government are considering implementing that recommendation.

In addition to adapting to the growing problem of severe weather events and increased flooding, I hope we will see investment in renewable energy. We need to find ways of generating energy in a more sustainable way. We also need to reduce demand for energy, as that would have the twin benefit of tackling fuel poverty. Investing in an energy efficiency regime to tackle fuel poverty would make an important contribution to reducing demand for energy. Finally, in addition to reducing development on floodplains, the Government ought to consider making developers responsible for any damage caused to flooded properties for, say, 20 years after homes have been built.

17:52

[Caroline Nokes (Romsey and Southampton North) (Con)]

Romsey is located on the banks of the River Test, a world-renowned chalk stream. Too many times in the past few months the river has been an unwelcome visitor in too many people’s homes. Our problem is not just the river, which is ground fed, but the springs that have popped up in many places; the ingress of groundwater into the foul drainage systems, causing the drains to fail and rivers of sewage to flow through the streets of villages like Chilbolton and Longparish; and surface water flooding, which we experienced in Romsey from Christmas eve until well into the new year. For householders along the Causeway in Romsey, there have been weeks of misery: homes being permanently pumped out, an access road undermined by the sheer weight of water, and the fear that access to the crucial pumping station for the town would not be maintained.

The situation has not all been negative, however. There have been phenomenal examples of community spirit and pulling together in a crisis. I have praised them before, but I will do so again: Romsey’s amazing retained firefighters gave up much of their Christmas and were among the first to be out there again when the February floods hit. They were indefatigably cheerful, even when their road closures signs were ignored and damaged. The Army and the Navy arrived in Romsey the week before last and designed the most amazing device—colloquially known as the “cat flap”—to divert water from Fishlake stream back into the main body of the River Test, and to lay 40,000 sandbags at strategic points around the town. They worked seamlessly with the borough and county councils, the Environment Agency and the emergency services, and were greeted with relief wherever they went.

However much I wax lyrical on how things were pulled together to aid Romsey and the surrounding villages in their hour of need, there are crucial lessons that we must learn. Little was known about the bank of the Fishlake stream until it was at crisis point, so work to identify at-risk areas has to happen and it has to happen now. There are some great local examples across Hampshire of communities with flood action plans and flood wardens where greater damage was averted. We now have to replicate that work everywhere.

People have spoken at length of the dangers of building on floodplains, and I agree. However, in many instances the houses are already there, so although we must avoid adding to that housing stock, we simply cannot abandon the houses already there. Protection is needed, and although I do not pretend to be an engineer or a drainage expert, when the water has subsided, we must work out what can best be done to avoid this happening again. Sadly, in many parts of my constituency the water is still rising, particularly the groundwater, unlike around the River Itchen where the water levels are falling.

When it comes to planning, we have to look at the existing infrastructure and the impact on surface water drainage from having additional roof tiles in previously open green spaces that acted as natural sponges to rainfall. I echo the comments of my hon. Friend the Member for Tewkesbury (Mr Robertson), who is no longer in his place, but we cannot look just at floodplains. We have to look at the catchment areas, which can also make a contribution. Where there has been development at Abbotswood on the edge of Romsey—a significant distance and uphill from the natural floodplain—there is a clear problem with surface water drainage flooding existing properties that are further down the hill. Over Christmas and new year there were huge problems in Winchester road in Romsey, with a combined drainage system simply overwhelmed by the amount of water, causing foul drainage flooding of homes. That might be regarded as totally separate to the subsequent flooding caused by the River Test, but the misery for residents is no less.

I spent last Saturday morning looking at the defences that the military and the Environment Agency have put in place to prevent further flooding in Romsey from the fragile bank of the Fishlake stream. I would like to put on record my thanks to Lieutenant Colonel Fossey and his team, who worked phenomenally hard to protect the town from further flooding. As one would expect, conversation inevitably turned to the future and what needs to be done to safeguard Romsey in the long term. I am the first to say that now is not the time for a knee-jerk reaction when deciding what would be best. The local authorities and the Environment Agency need to assemble experts and decide, not at a time of crisis but when the waters have abated somewhat, and they need reasonable time scales in which to do it.

There are certainly some thoughts already on whether land needs to be found that can be safely flooded without damage to housing. Attention needs to be turned to development and where new houses can best be placed away from floodplains in a way that will not impact on already creaking infrastructure. If necessary, we need to revisit housing numbers and perhaps take a view that some areas simply cannot accommodate more building. The water courses and drainage systems further up the Test valley from Romsey also need to be considered. I do not know whether extra capacity or deepening and widening the stream through King’s Somborne or the Wallop brook would help. Presumably that would run the risk of sending water further downstream to Romsey even faster and exacerbating the problems there.

Longparish, Chilbolton and King’s Somborne have all had 24/7 tankering operations to clear surface water from the drainage system, but it is a drop in the ocean. There are still people in Longparish and Chilbolton who cannot flush their loos, have a shower or wash their clothes, and this is Hampshire in the 21st century. I appreciate that the solution will be expensive and require careful planning, but if we are to experience longer, wetter winters in future and if this year is just a taste of what is to come, we have no choice.

16:34

[Lilian Greenwood (Nottingham South) (Lab)]

As many hon. Members have made clear in powerful speeches this afternoon, the floods have had a devastating impact on their communities. I am sure the whole House’s thoughts are with those who face personal loss and those who are now confronted with an uncertain wait and do not know when normality can return. Our thoughts are also with the workers who are straining to clear floodwater and repair our bridges, roads and railways. They have done an outstanding job under great pressure, and we owe them a debt of gratitude.

I would like to start by saying a few words about the enormous damage that has been done over the past two months to the rail network. Great Western services have been severed south of Exeter since Brunel’s sea wall at Dawlish was washed away. Flooding has disrupted services in Wales. Crewe station was evacuated after suffering damage, and landslips have led to cancellations and delays in the south of England. At Bridgwater, in the Somerset levels, the line from Taunton to Bristol is still under several feet of water. Almost 300 Network Rail sites have been flooded.

Even when the water has cleared, further damage can follow, as embankments collapse. Many such earthworks date from the Victorian era and not enough research has been done on their stability. There have been 50 landslips in Kent alone over recent weeks. My constituents in Nottingham have also experienced delays, following a landslip between Chesterfield and Sheffield, and in the south-west, embankments have given way outside Exeter, compounding the damage caused at Dawlish.

Ministers cannot always prevent disruption, but they can put more pressure on train operators to provide timely and accurate information to passengers and open up first-class seating to alleviate overcrowding. The railways are a vital economic artery for the south-west. While the immediate challenge is to reconnect those rail services, we must also question whether the south-west’s rail infrastructure can withstand future pressures. The Transport Secretary has given Network Rail the task of producing a report on the future of the Dawlish link, considering “all the options”, and we will hold him to his pledge. The report is due by July. Can the Minister assure us that it will be made publicly available?

Sadly, such reassurances need to be put on the record because of the lack of transparency on the Government’s part, particularly in regard to the funding provided. Following the extreme weather in late 2012 and early 2013, the Government announced that they would fund the greater part of a Network Rail package of improvements in the Exeter area: they would provide £26 million, and Network Rail £5 million. However, that funding disappeared in the autumn statement. The Peninsula Rail Task Force group of local authorities wrote to the Transport Secretary on 27 January, stating that the funding’s

“omission from the Autumn Statement has…become a cause for real and sustained concern.”

On 12 February, the £31 million was re-announced as new funding, although yesterday the Secretary of State seemed to suggest to the Transport Committee that it had been the same money all along.

At best, Ministers have failed to communicate their intentions to local authorities, causing anxiety to those who have to plan locally for improvements in the south-west’s flood resilience; but if this is indeed new funding, as we were told just two weeks ago, they must explain what will be cut, or how more money will be made from passengers, to make up the balance.

It is already clear that Network Rail has been left with an extensive bill. The south-west’s local authorities estimate that last winter’s weather caused about £140 million worth of damage; this year’s storms have cost Network Rail about £170 million, and that figure may yet rise. As Network Rail must find 20% efficiency savings over the next five years, it will not be easy for it to absorb a further loss of nearly £200 million—and that does not include the cost of the additional resilience studies that the Government have ordered or further resilience measures in Dawlish.

The Minister dodged my question in Westminster Hall this morning, but I am going to give him another chance. First, can he assure the House that projects will not be cancelled or pushed back beyond 2019 as a result of the additional expenditure? Secondly, if Network Rail concludes that a new line is needed, or that substantial improvement works should be carried out on the Dawlish sea wall, will those works be funded by central Government, or will they be paid for out of Network Rail’s already pressured budget?

Of course, local authorities whose budgets have already been severely cut have had to commit emergency funding, much of which is not reclaimable under the Bellwin scheme. We have been told by the Prime Minister that “money is no object” when it comes to meeting the cost of the floods, but two weeks after he made that statement, we are little closer to knowing what he meant. For all the claims that investment in flood defences has increased during the current Parliament, that is correct only if inflation and local authority funding are ignored, as was pointed out by my hon. Friend the Member for Vale of Clwyd (Chris Ruane). We need a different approach, based on long-term planning and proper regard for the scientific evidence. That is why Labour has set out proposals for a national infrastructure commission, with strategic flood defences at the heart of its remit.

We are living with the reality of climate change, and the flooding over the past two months has brought the scale of that challenge into sharp focus; but, as part of the Prime Minister’s accommodation with the radical right of his party, he has allowed the Department for Environment, Food and Rural Affairs to become a voice for scepticism within the Government. Preparing for and managing flood risk has been dropped as one of DEFRA’s priorities, and, as I mentioned earlier, the Government’s draft national policy statement on roads and railways contains no reference to ensuring that our transport network is resilient. Budgets have been slashed, staff cuts planned, and scientific advice ignored. Progress reports on the Pitt Review’s recommendations have been scrapped, and exaggerated claims have been made in Parliament about spending on flood defences.

All that amounts to a poor record for a Prime Minister who once said that he wanted to lead the greenest Government ever. The Prime Minister may have changed his colours, but Britain still needs action to protect its transport networks and communities that are at risk of flooding. With clearer leadership and carefully planned, long-term investment, we can be in a much stronger position when Britain next faces floods on this scale.

18:04

[Mr Robin Walker (Worcester) (Con)]

Like my hon. Friend the Member for Tewkesbury (Mr Robertson), my constituency has been very heavily affected by the flooding on the River Severn. Although that has not been going on for as long as the flooding in the Somerset levels, it has been spectacular and done much damage. To give an example of the scale of the flooding, this afternoon, the gauge at Worcester stands at 1.4 metres. Just a couple of weeks ago, it was 5.5 metres. The Environment Agency estimated that 518 cubic metres of water per second was trying, and often unfortunately failing, to pass under Worcester’s central bridge.

I welcome the debate and much of the motion, particularly the fact that it thanks the emergency and statutory services for the fantastic work that they did. My hon. Friend the Member for Winchester (Steve Brine) mentioned the Pitt review’s recommendation on co-ordination between statutory and emergency services. What I have seen in Worcester in the past couple of weeks in terms of co-ordination has been a model that others could learn from.

Two weeks ago on Monday, I was fortunate to attend a silver command meeting at Worcestershire county council and to witness at first hand all those organisations working together. I apologise if I miss out any of the people in the room at the time, but West Mercia police played a fantastic co-ordinating role. They arranged special patrols to areas that were cut off by the floods and oversaw that effort superbly. The Hereford and Worcester fire and rescue service also did a magnificent job. Incidentally, in contrast to some comments made by Opposition Members about fire services not being well placed to provide services, the Hereford and Worcester fire and rescue service told me that it was better equipped and trained for water rescue during these floods than in 2007, when floods hit Worcester severely.

We have also seen fantastic work by the West Midlands ambulance service and the Environment Agency. Like my hon. Friend the Member for Winchester, I acknowledge that in some areas the agency has been somewhat controversial. In Worcestershire, however, there has been universal acclaim for the agency’s round-the-clock work. Dafydd Evans has been very helpful in keeping me informed. Dave Throup has been upheld as some kind of superhero. He now has a Twitter following of about 1,800—the Dave Throup fan club. That is a celebration not just of his superhuman efforts, but of all those who have worked very hard during the floods. I salute them all.

Worcestershire county council put huge effort into keeping the city open for business and pushing to get the bridge reopened as soon as humanly possible. People were doing that in the silver command meeting that I attended. However, sadly, it had to be closed again as the river rose to record highs. Whereas in previous floods, when our bridge was closed, we had to call in aid from the military, who drove their vehicles through the floods to keep the city tied together, the council was able in this instance to run a successful bus service. The buses drove through the floods on New road, which cut off the main city bridge, and kept the two sides of the city tied together. That won great acclaim from city centre businesses. It helped loads of people to get to work, children to get to school and made a big difference. The staff worked almost around the clock and in appalling weather conditions as the rain came down. I pay tribute to them.

Keeping the city open for business was a key priority throughout, and I acclaim the work of the business improvement district in Worcester, which ran a successful open for business campaign. Indeed, I am willing to commend the Labour mayor in the city for her work in supporting that campaign. That was positive, although, as I will come to, Labour in Worcester has slightly shot itself in the foot in its efforts since to support the campaign.

I want to mention the military support that we had in Worcester, which arrived while I was in the city. I was pleased, particularly as the Parliamentary Private Secretary to the Minister of State, Northern Ireland Office, to be able to welcome the 1st Battalion the Royal Irish Regiment when it came to the city. The regiment showed fantastic professionalism and excellent co-ordination with the civil authorities. I was particularly pleased yesterday to receive a very impressive letter from the regiment’s commanding officer saying how impressed they had been by the overall efforts they had seen. It would also be remiss of me not to mention the local media, who did a fantastic job in keeping people informed in Worcester.

I welcome the fact that the Government are trying to help those people whose homes have been flooded. There are about 40 such homes in my constituency, and for those people, the floods are tragic and terrible. The number is much smaller than it was in 2007, however, and we should welcome the fact that the flood defences have made a significant difference, especially the £1 million defences on Hylton road, which have protected a large number of homes and businesses in Worcester.

Unfortunately, there have been reports of sewage in the flood water in residential areas of my constituency. When we think about resilience, we should also look at the sewerage systems, particularly in cities such as Worcester, to ensure that they have sufficient capacity and that we do not find sewage in river flood water in the future. We need to work with Severn Trent Water on that challenge.

We need to look at resilience in relation to transport. I have mentioned the fact that the Worcester bridge has been closed on several occasions. Our university will soon propose exciting plans for new pedestrian access across the River Severn using disused railway viaducts. They would be a lot cheaper than some of the alternative road plans, and I recommend that the Government look into funding them as part of the resilience programme.

I welcome the fact that the Government have given business rate rebates to many of the businesses affected by the floods. There is also an extra £10 million for businesses that were not flooded but that were otherwise affected. I am concerned that a lot of businesses will have been affected in that way, and I hope that that amount can be increased in the future.

Having praised all the statutory services and my local councils, I am very concerned that the Labour-led city council in Worcester voted last night to put up parking charges very substantially. This will hit the high street at a time when it really should be focusing on recovery. It is absolutely the wrong thing to do, and it will undermine so much of the good work that the council has done in recent weeks to show that the city is open for business. I hope that it will recognise the great cross-party work that has been done recently to keep things moving, and that it will rethink that decision.

18:11

[Diana Johnson (Kingston upon Hull North) (Lab)]

I am pleased that we have this opportunity to discuss flooding today, because 37,7000 homes in my constituency are at risk. I saw the pain, misery and damage caused by flooding when we were hit in Hull in June 2007. At that time, 8,600 households were affected, and 6,300 people had to move into temporary accommodation, including 1,400 who were accommodated in caravans for months afterwards as their homes were dried out, cleaned up and repaired, often after lengthy dealings with insurers.

I feel very sorry for all those people who are going through the trauma of flooding now. Until people go through it, they do not understand the awfulness of it, and the problems do not end when the floodwaters have receded. The anxiety, distress and depression will carry on for those families for months and years. I have met children who told me that they became anxious when they saw the heavy rain, because they thought that they might have to leave their homes again, or that they would not be able to get to school. I pay tribute to the National Flood Forum for the support that it offers to families after the floodwaters have receded.

We all recognise the importance of investment in flood defences. After the 2007 floods, I remember the Liberal Democrats, who were in control of the council in Hull, complaining that the Labour Government’s increased flood defence spending was not enough. However, it has now been confirmed that flood defence investment has fallen under this Lib Dem-Tory coalition. With estimates for the clear-up and repair costs from the recent flooding running at £1 billion, those cuts look like a classic example of a false economy.

In December 2013, an estimated 260 homes and businesses in Hull were flooded again following the east coast tidal surge. I want to ask the Government some questions about their response to the recent floods, and their provision of discretionary assistance to homes and businesses hit by that flooding. Initially, there seemed to be lots of Cobra meetings but very little action, whereas in June 2007, Hull heard about the extra flood aid in just two weeks and we had an early visit from the Prime Minister as well. After the December east coast tidal surge, it took two months, and the playing fields of Eton to be flooded, before Hull heard about the extra £5,000 help for homes and businesses.

Why does the current support for householders go only to home owners and not to tenants? As I understand it, the money has to be spent on flood resilience measures. Will the Minister explain how that will be checked? Will councils also be able to get money for the properties they own? Can every householder pool money to pay for more substantial flood resilience measures, where a local community wants to do that?

There seemed, again, to be confusion about whether Hull businesses would be covered by the business support scheme and about whether there is a cap on the business support that will be given. The guidance suggests that grants should be about £2,500 and that more than £5,000 should not be given out. Several large manufacturing firms in Hull were flooded, with expensive equipment destroyed. I understand that the council will be allocating the funds, so will it have discretion to offer more help, especially to those types of company that may easily be able to relocate internationally? In addition, why have the Government not applied for European Union assistance for flood-hit communities?

I have been raising and discussing the issue of flood insurance for many years. Last June, the Government finally announced the Flood Re scheme that is to replace the previous Government’s statement of principles. As we know, Flood Re excludes, retrospectively, homes completed since January 2009.

[Chris Ruane]

Does my hon. Friend know why it took three years for this Government to settle the Flood Re scheme?

[Diana Johnson]

I do not know why, but perhaps the Minister will be able to enlighten us. Obviously, the statement of principles ran out last summer and it has had to have a temporary extension until the new Flood Re scheme comes into place in 2015, even though this needed to be sorted out as quickly as possible.

Let me return to the issue of the exclusions. Leaseholders are excluded from the scheme, as are council tenants and small businesses, including people who run a bed and breakfast from their home. Landlords are not covered, even where there is a jointly owned freehold with each flat owner as a leaseholder. It is not clear whether tenants wanting contents insurance will be covered. There is no answer from the Government on the position of home owners or builders who acted in good faith, following all relevant planning guidelines and Environment Agency advice, but find themselves with homes that will now not attract home insurance cover under the Flood Re scheme because they have been built since 2009. Under Flood Re, a home built on 31 December 2008 will be covered whereas a house next door that was built on 1 January 2009 will not be. The scheme seems very arbitrary, and it is also not clear whether Flood Re covers the surface water flooding which we had a problem with in Hull in 2007.

Worse still, one part of the Government does not seem to know what the other part of the Government is doing. The Treasury and the Department for Communities and Local Government are promoting their Help to Buy scheme heavily in Kingswood in my constituency, an area hit by flooding in 2007; large Help to Buy posters are plastered everywhere. The problem is that the Treasury and the Department for Environment, Food and Rural Affairs are also signalling that those thousands of new homes being built and sold under their Help to Buy scheme should not have been built in the first place and will not be covered by Flood Re. The Government are getting themselves into real difficulty on this, and the people buying homes under the Help to Buy scheme at the moment will be shocked to know the position the Government are putting them in.

Clearly, there are some flood-risk areas where building should not happen—areas where there is coastal erosion and outlying areas that will not be helped by flood defence infrastructure.

[Dan Rogerson]

The hon. Lady has been consistent in raising the issue of the Help to Buy scheme. The scheme operates across the country, and the choice of where to buy a property and on what terms to do so is up to the person who buys it. Of course, the developer will also have gone through a process of developing it. The Government are not encouraging and actively pushing people into buying those particular homes; people are choosing to buy them and use that scheme. So perhaps she needs to give a little clarification on what she is accusing the Government of.

[Diana Johnson]

I do not know whether it is parliamentary to say this, but I am gobsmacked by that response. I thought the whole aim and purpose of the Government’s scheme was to encourage people to buy a home. It just so happens that 90% of my city is below sea level and on a floodplain, so someone who buys a property in Hull will probably be faced with it not being in the Flood Re scheme, yet the Government are still encouraging people to buy homes there. I am grateful for that at least—they have not abandoned Hull completely—but there is a problem with their Flood Re scheme.

The National Association of Home Builders estimates that 5 million homes around the country will not be covered by the Flood Re scheme, and the insurance firm Hiscox has in the past few weeks called for the deal to be made universal. As I have said, Hull, 90% of which is a flood risk, is currently protected, but it could be better protected still with more adequate investment and by ensuring access to affordable insurance cover. With that in place, Hull and other flood-risk areas have a viable economic future with a functioning property market and a strong business sector.

With climate change leading to rising water levels and more frequent volatile weather, the scientific advice is that flooding will occur more regularly in a larger proportion of the country. This small country cannot write off the major towns, cities and areas of farmland that are now at risk of more regular flooding. Yes, there are limits on what we can afford to do, but we need to think too about the limits on what we can afford not to do.

The free market and little England approach does not equip us to face these issues. Climate change deniers such as those in the UK Independence party also do not help. They want to wreck Hull’s hopes for wind turbine jobs and send them abroad. Some of its members even appear to hold the view that same-sex marriage is responsible for the flooding.

Let us turn a major problem into an opportunity for economic growth. We could invest in flood defence infrastructure and support renewable energy with a balanced energy policy so that we meet our future energy needs in a way that also combats climate change.

18:21

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

It is a pleasure to follow my near neighbour, the hon. Member for Kingston upon Hull North (Diana Johnson). We both have experience of the 2007 floods—she as a Member of Parliament and myself as a councillor—and a good understanding of flooding in our area.

It has been an interesting debate, and I have liked a number of contributions. However, some Opposition Members have been more interested in trying to make political points about flood funding rather than in dealing with the recovery in which we are engaged. If they were honest, the reality is that after the devastating flood in 2000, which affected a large part of my constituency, the Government at the time increased flood funding but not to the level that they should have done, although we saw another boost after 2007. If we look at the history of flood funding, we see that we tend to get a boost after a major incident, and then it starts to taper off over a number of years. Sadly, that has been the case for decades. If anything comes out of this, it is perhaps the need for us to take a more long-term sustained approach to flood funding.

It is also a little bit incredible for Opposition Members to talk about flood defence funding as if they would not have made the same reductions had they won the last general election given their own commitments to cutting the deficit. We just need a bit of honesty from all parts of the House on this.

[Chris Ruane]

rose—

[Andrew Percy]

No, I will not give way, because there are others who wish to speak. The flood defence funding issue in my constituency was not related to cancelled schemes. In fact, the improvements that were expected in my area were not scheduled until 2023, and 2028 in many cases. Our flooding was down to a significant tidal surge, which flooded 350 homes in my constituency. As I have said on numerous occasions, that incident coincided with the death of President Nelson Mandela, so it was not top of the six o’clock news. None the less, the Secretary of State for Environment, Food and Rural Affairs visited, as did the chairman of the Environment Agency. Eleven communities in my constituency were flooded. Some of them, such as Burringham and Keadby, received warnings, but others in South Ferriby and Reedness did not and many people found themselves in quite dangerous situations with water in some cases as high as their waists, and in one case up to their chests. A number of residents were stuck in their properties because they had not been provided with proper warnings.

We had a public meeting in South Ferriby last Monday night; a couple of hundred people turned out. It was a really well attended and good spirited meeting. One thing residents asked me to take back is the issue of flood warnings. A lot of people are elderly and not on the internet. Large parts of my constituency have internet speeds of about one megabit a fortnight, so it is not possible to get the updates. They did not know a warning had been issued in the morning. We did not have a severe warning, and people were not evacuated. The first thing people knew of the problems was when the Humber started pouring through their front doors, which was a frightening experience for elderly people living in bungalows. No one was there to help them, because the flooding was not expected in that community. Had it not been for the parish council and younger, fitter neighbours, a number of residents could have found themselves in an even more distressing situation.

Following that flooding I visited all the communities, but it took me three days to get round them all, given the scale of the flooding across east Yorkshire and north Lincolnshire. At that time I was struck by the response of the emergency services, and of the Environment Agency, which has come in for a lot of stick, but whose dedicated personnel were out there on the front line—maybe not at the time that some residents would have liked them, but in the days afterwards and since then, informing and protecting residents.

I pay a particular tribute to North Lincs council. The flooding happened on the Thursday evening. From the Friday and the Saturday, the council worked with me and my hon. Friend the Member for Cleethorpes (Martin Vickers) on a package of support, which was put in place that Monday morning, of £300 to every home that was flooded and a £1,000 interest-free loan to every resident who had been flooded, repayable over five years, starting six months from the date of the flooding. That package was available and was delivered to people by the end of that week. So within a week they knew the council was there to support them.

I want to say a little about the history of flooding in our area. We know we are likely to flood. I live next to one of our tidal rivers. On 5 December it was about 6 feet higher than my front room; fortunately it did not overtop, but only by an inch or two. We know we live in an area that was drained by Cornelius Vermuyden in the 17th century. It is former marshland. We know the risks we face. That does not mean that we should be written off.

[Martin Vickers]

Will my hon. Friend give way?

[Andrew Percy]

I give way to my honourable neighbour, my hon. Friend the Member for Cleethorpes, who did so much to support his communities.

[Martin Vickers]

Does my hon. Friend agree that local knowledge is particularly important in forecasting, and that it would be very useful if we brought the farmers and councillors who serve on drainage boards into the equation a little sooner?

[Andrew Percy]

That is absolutely correct. It ties in with the point I am making, which is that in 2007 the river catchment plans for the Trent, the Ouse and the Aire were all issued, and those plans at that time suggested reducing defences. That was at the time of the last Labour Government. I, as a local councillor and a prospective parliamentary candidate, did not go around saying that the Labour Government wanted to flood our areas, but the catchment flood plans that we faced at that time would have reduced our defences substantially. We fought them very hard. Largely because of the information and skill of the drainage boards and local farmers, we were able to disprove the Environment Agency’s argument for its proposal and to win a change in the policy, so now our defences will be maintained and improved in line with rising sea levels.

That is all now subsumed by the River Humber flood strategy. This is where we really need some action. That strategy was adopted in 2008 for the Humber. It highlights large parts of my constituency as in need of improved defences, but at some time in the future—15 years hence. That is not good enough, bearing in mind what we have seen in the past few weeks. We need the funding for that, and we need to know what that strategy actually means. At a public meeting in South Ferriby, and in the previous public meeting we held at Reedness, residents were saying, “It is fine for our areas to have been identified in 2008 as needing improvement, but it is not good enough for us not to know when that will happen.” That is why I am pleased that last night the Conservative group on North Lincs council passed a budget that is bringing forward £5 million of funding, which we hope will be unlock that other funding.

What we want from Ministers now is leadership. Where money has been made available to unlock that match funding, as it has from North Lincs council—voted against by the Labour group, it must be said—we want Ministers to ensure that that match funding is unlocked now, not at a time convenient to the EA. Two and a half million pounds of that funding is scheduled for this financial year, specifically for defences on the Humber and the Trent, and the remainder in the forthcoming years. My plea to Ministers would be to ensure that where that match funding is being offered, the EA’s hand is snapped off and we can bring forward this investment as quickly as possible. I will end there, because I understand that there is pressure on time.

[Several hon. Members]

rose—

[Mr Speaker]

The wind-up speeches are due to start from 6.40 pm.

18:29

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

I will try to take just five minutes, so that my “hon. Friend for Heathrow, South”—the hon. Member for Spelthorne (Kwasi Kwarteng)—can speak.

I will briefly make three points about constituency matters. I visited on a daily basis those areas of my constituency that were at risk in West Drayton; West Drayton came into my constituency at the last general election. We were very fortunate that no homes were flooded but it was a near-run thing, particularly in Frays avenue and Donkey lane, and down in Longford. I cannot pay enough tribute to the Environment Agency staff, who were superb, as were the local fire services. The local council was slow at first, but then really got in on the act. I am very grateful to all of them; I thank all the officers involved.

I would like to raise one issue with the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson); I would welcome a ministerial meeting, or a meeting with officials, about it. In 2010, there was a proposal for what was called the Arklyn Kennels scheme in West Drayton, for investment to build up concrete and earth-bank defences by 2014-15. Originally, that was a £2.8 million scheme, which subsequently, I am told, was reduced to a £1 million scheme and delayed until at least 2018-19. I hope that, in the light of the events of recent weeks, that scheme will be reviewed and we can look at it again. I would welcome a meeting with Ministers or officials to talk it through, and to bring in the relevant local authority representatives as well, because the area affected is one of those on the Thames floodplain that has demonstrated that we need to do much more.

The second constituency issue that I want to raise is about Heathrow. I am not trying to be opportunistic; I am just making a relevant point. At the terminal 5 inquiry, detailed submissions were put forward with regard to expanding Heathrow on what is, in effect, the Thames floodplain. The argument put forward in favour of Heathrow expansion then was that rivers would be diverted and culverted, which I do not think has been successful. The Howard Davies review is looking at the various options for runways across the south-east, including at Heathrow, and it is important that his attention is focused on the implications for flooding on the Thames floodplain. Any further expansion at Heathrow—any additional runway—will effectively build up a dam, which will cause flooding further on.

Finally, I will return to the issue about the Pitt review. Recommendation 39 of the review was that a statutory duty should be placed upon fire authorities with regard to flooding. In opposition, the Conservative party and the Liberal Democrats supported that recommendation, and a number of us went to see Labour Government Ministers to urge them to implement it. The Environment, Food and Rural Affairs Committee also recommended that it should be implemented; the Chair of the Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), raised the issue in debate after debate. There were delays and we were then told that there would be Operation Watermark, which would eventually determine whether that statutory responsibility would be given to fire authorities. That took place and there were recommendations that the issue should now be addressed. The chief fire officers have come out in favour of the proposal. The Government’s new system of an ideas bank, which I support, has also recommended that the Government act on this matter. I urge the Government to consider it seriously.

In the coalition agreement, there was an agreement that the recommendations of the Pitt review would be implemented. This recommendation is important, and I will say why. I think that it was the hon. Member for Worcester (Mr Walker) who said that there have been improvements in recent years in the supply of equipment and so on. Those improvements came as a result of learning the lessons of past disasters, when firefighters had turned up and there was inadequate equipment. We realised that for decades there had not been sufficient investment because no one took responsibility. Placing a statutory responsibility on fire authorities protects their budgets, ensures that someone takes responsibility, and in the long term cumulatively ensures that the lessons of past disasters are learned.

This matter must be addressed now. As I say, I hope there is virtual consensus on it, and it just requires political will to undertake it. Let us use this lesson this time round to ensure that this recommendation is implemented and that we do not delay further.

18:33

[Kwasi Kwarteng (Spelthorne) (Con)]

I am very grateful to you, Madam Deputy Speaker, for calling me to speak in this important debate. I am also very pleased to follow my neighbour, the hon. Member for Hayes and Harlington (John McDonnell), even though we have different views on airport expansion. We are not speaking about that issue today, so we can come together with a degree of comradeship and co-operation.

I am also pleased to speak on behalf of people who live by the River Thames. Pictures have been shown and seen around the world of massive flooding and a considerable amount of devastation in the Thames valley. I know that it is fashionable in this House to suggest that action was taken only when the Thames itself was flooding, but as a Member of Parliament representing a Thames-side seat I have to say that a considerable number of families and a large number of properties were materially affected by the flooding. It is absolutely right that attention should be given to the issue.

I am grateful to my right hon. Friend the Prime Minister, who came to Guildford street, and saw for himself the problems caused by flooding. In Shepperton, in the south of my constituency, there was a considerable amount of flooding. It is a testament to the people of Spelthorne, who have created a thriving community, that there was so much resilience. Time and again, I spoke to people who were not expecting massive amounts of aid or of intervention. They appreciated that the borough’s resources were stretched, and that the EA and other organisations were under a great deal of pressure. I was impressed by their sheer resilience in managing to deal with a lot of the problems that they faced.

As for Staines and other areas in my constituency, the problem was not so much—other Members have alluded to this—the rising river level but the problems associated with groundwater, drainage and sewerage. That had a material effect on the—

[Bob Stewart]

The water table.

[Kwasi Kwarteng]

Indeed. That really affected people’s lives, and down Guildford street, Garrick close and other places in Staines and beyond, people have had to put up with roads that are waterlogged and flooded with contaminated water. That is the situation that I want to bring to the attention of the Government and of the House. It is quite wrong that in 21st-century Britain people should have to put up with that for weeks. Even now, the chances are that it will be another couple of weeks before the groundwater is cleared. That is something that the Government should consider seriously in formulating policy in future.

People have tried in this debate to make political points about reduced Government expenditure. We all know that, according to the Darling plan of 2010, the DEFRA capital budget would be reduced by up to 50%. We all know that there are responsible people in the Labour party who realise that there was a deficit and, regardless of who won the general election, accept that there would have to be reductions in expenditure. I do not think that it is responsible of Opposition Members to blame the Government for the cuts because, according to the previous Chancellor’s own plan, there would be severe reductions in the budget.

[Hugh Bayley]

If it is right for the Government to cut the budget to below what it was when they came to office, why is it right for them to propose in two years’ time to increase the budget to more than it was when they came into office?

[Kwasi Kwarteng]

The hon. Gentleman knows full well that in 2010 we had a budget deficit that we had to reduce. That was clearly the plan on both sides of the House, and it is a cheap political point to blame the Government in that respect.

[Hugh Bayley]

rose—

[Kwasi Kwarteng]

No, I am not going to give way, as there is intense pressure on time. I want to conclude by saying that I think that the Government have responded quite effectively to what was an unprecedented situation that was not at all expected. I look forward to working more with members of the Government in future to try to alleviate the problem and see how we can deal with it more efficiently next time, if there should be a next time.

18:39

[Hilary Benn (Leeds Central) (Lab)]

May I begin by joining my hon. Friend the Member for Garston and Halewood (Maria Eagle) and the Secretary of State for Communities and Local Government in sending good wishes to the right hon. Member for North Shropshire (Mr Paterson) for a speedy recovery? We really do look forward to seeing him back in his place.

We have had an extremely important, well-informed and wide-ranging debate. I would like to express my condolences to the families of those who lost their lives in connection with the recent stormy weather. I also echo the thanks that have been expressed to all those who worked so hard during this extremely difficult time: the local communities, the farmers who supported one another, the council staff who delivered sandbags and provided rest centres where people go when they have to leave their homes, the police, the fire service—the fire service in particular has been praised by my hon. Friends the Members for Derby North (Chris Williamson) and for Scunthorpe (Nic Dakin) and the hon. Member for Romsey and Southampton North (Caroline Nokes)—the armed forces, the utility companies and the transport companies, all of them, which rescued people and tried to restore power and keep people moving where that was possible, and of course the staff of the Environment Agency.

I know from my own experience just how committed and dedicated the agency’s staff are and how difficult it must have been for them, at the very moment when they were working all hours, to hear their efforts insultingly and unfairly criticised by some. I do hope they will have taken some comfort from the praise that we have heard from many parts of the House today for their efforts, including praise for individual Environment Agency staff by name, including from the hon. Member for Winchester (Steve Brine). I do not know whether the great big bags were given a name, but the Itchen diversion would probably suffice. It was an example of imagination and innovation in the face of huge quantities of water.

[Steve Brine]

Will the right hon. Gentleman give way?

[Hilary Benn]

Very briefly, as time is short.

[Steve Brine]

It was a restriction of the River Itchen which took the heat out of the river and flooded some farmland to save Winchester.

[Hilary Benn]

It shows what can happen when people take advice from the experts, as happened in that case.

We heard powerful testimony from many hon. Members about the effect that flooding has on the lives of the people whom we all represent, and on the communities and the families involved. That has been experienced not just in the past two months, as we heard from my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) in recounting what happened in the terrible summer of 2007. The hon. Member for Tewkesbury (Mr Robertson) spoke about people’s homes. I remember visiting his constituency in 2007. There are few things worse than seeing one’s home invaded by dirty brown water full of sewage, seeing one’s possessions ruined, and in many cases having to flee one’s home with no idea when one will be able to return.

We live in an era in which, as human beings, we have come to think sometimes that whatever happens, whatever nature throws at us, somebody ought to be able to deal with it, and if it cannot be dealt with, someone must be to blame for what has happened. The truth is that we are confronting nature’s raw power and in the face of it, we human beings are small in comparison. It has enormous force. It can wreck a train line. It can, as the hon. Member for Isle of Wight (Mr Turner) said, reshape the land itself. Of course that does not mean there is nothing we can do; on the contrary, there is a great deal we can do, and that action should be informed by the lessons that we learn.

I hope that in replying the Minister will tell the House what the process for learning lessons is going to be on this occasion. I commend the approach taken by Sir Michael Pitt in carrying out his review in 2007. It was a widely praised report. I thought it was exemplary. It was clear, practical and full of recommendations, including the proposal, for example, that the Met Office and the Environment Agency should come together to issue a single flood warning. In 2009 we established the Flood Forecasting Centre and everybody recognises that it has led to an improvement in the information that has been made available.

The other lesson is that whatever the recommendations and however good they are, they need to be followed through. I saw the Secretary of State nodding when the point was made by my hon. Friend the Member for Garston and Halewood in her opening speech. I hope the Government will produce some further implementation reports on the Pitt report and that that of 2012 will not be the last, because we know that there are some recommendations that have not yet been completed.

We also heard in the debate many examples mentioned by right hon. and hon. Members where the arrangements have worked on the ground—where there has been effective co-operation, the right leadership and all the agencies co-operating. However, we also know from the experience of the past two months that there have been some places—Muchelney is one, Wraysbury is another, and there are others—where residents felt that help was very slow to arrive.

I think that there is a very fair question to be asked about that. What was the plan locally? If help did not arrive to ensure that elderly people got the assistance they needed, to help folk move furniture and valuables upstairs to stop them being wrecked by the water, and to evacuate people in a timely way, why did it not arrive, especially in places where there had been flooding previously? The Government have a responsibility nationally, but local government and the local community also have a responsibility. We need plans that are not only good on paper, but can be implemented when the time comes.

Given the number of families who have been forced out of their homes, I am grateful for the swift response—Downing street took about 20 minutes to respond—to my call for families not to have to worry about paying council tax on a home they cannot live in. I would be grateful if the Minister could be absolutely clear that what the Prime Minister said when he was in Wales—that local authorities will be fully funded for the cost of offering a council tax rebate—will happen. The Secretary of State said that the Government have talked about there being enough funding for at least three months, but we know from evidence from the insurance industry, in particular, and the experience in 2007 that people can be out of their homes for a lot longer, perhaps for six or nine months, and sadly in some cases for more than a year.

Will the Minister also indicate whether the Government are proposing to look again at the rules? To answer the Secretary of State, of course councils should be able to charge more council tax when properties are left empty deliberately, but there was previously an automatic exemption in cases of flooding, for example if someone could not live in their home because it needed repair to make it habitable. That was taken away in the 2012 changes and instead made subject to the discretion of councils. To provide reassurance in the years ahead, I think that it should be automatic in cases of flooding.

On transport, we all want to see the railway line at Dawlish repaired as soon as possible, because it is an economic lifeline—a point reinforced in my conversation with the leader of Plymouth city council, Tudor Evans. As that and other storm damage reminds us, the complex ecosystem of modern life and infrastructure can be very vulnerable, which is why we need to take it into account not just in repairing but in building for the future.

We must also learn to adapt. We need crossovers on motorways so that when they are flooded cars can turn around and go back the other way. As we heard from my hon. Friends the Members for Vale of Clwyd (Chris Ruane) and for Newport West (Paul Flynn), we need to plant trees near rivers and look at farming practice and land use helping the water soak away and slowing its rush. As the hon. Member for Somerton and Frome (Mr Heath) explained, we need to look at where dredging can and cannot help. We must ensure that when there are huge downpours in towns and cities, the water does not meet a wall of paving slabs, concrete and tarmac, because that is why Sheffield and Hull flooded in 2007. We also need to recognise that although sandbags can help in some cases, it is dedicated flood protection that makes the difference.

I hope that the Minister will agree to the cross-party talks referred to in the motion, because whoever is in government will have to continue to deal with this problem. There is no doubt that the world’s climate is changing and that humankind’s actions are causing it. The climate impact projections, based on the best science we have, suggest that in the years ahead we will see hotter and drier summers and wetter winters with more flooding.

Let us just reflect on the past decade. In 2003 a heat wave led to 2,000 excess deaths in this country, even though temperatures were just 2° higher than normal. In 2006 we had a severe drought. Around 8 million people in the south-east of Britain depend on rivers for their water supply. In 2007 we saw widespread flooding across the country, and Great Yarmouth came within 10 cm of being overcome. In 2009 the High street in Cockermouth turned into a raging torrent. This January was the wettest winter month for almost 250 years. The result—we have heard it powerfully expressed today—is that yet more communities in our country are coming face to face with the consequences of a changing climate, in this case as the waters invade their homes.

We know what happens when these events occur—the drama unfolds, the cameras arrive, the stories are told, the statements are made, and for a while the nation’s attention is focused on what we can see before our very eyes. But we also know that when the waters recede and the weeks and months pass, the long, slow, hard process of recovery continues away from the public gaze. We should come together for the families and communities so that we adapt to what we cannot change and protect what we can, and so that others people do not suffer what so many have experienced over the past two months.

18:50

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

I thank the right hon. Member for Leeds Central (Hilary Benn) for the spirit in which he closed the debate, and his reflective and thoughtful approach. I thank hon. Members for setting out how their constituents, or people near to them, have been affected. It is a devastating experience to go through flooding. I know that all of us in this House send our sympathies to all those who have been affected, whether in their homes or businesses or their communities more broadly. Once again, I should like to thank on the Floor of the House the many people who have worked tirelessly in response to these recent events, including staff of the fire, ambulance, police and other rescue services, local authorities, the Environment Agency in particular, the voluntary sector and local communities—neighbours who have helped each other.

As we have heard, we have had extreme events since early December with the east coast tidal surge. We experienced flooding over Christmas and it has been the wettest January since 1766 in England and Wales. Central and south-east England have received over 250% of their average rainfall. Recently, flooding has been confined mostly to the Thames valley, Wiltshire and the Somerset levels, with this last, in particular, seeing unprecedented water levels. Groundwater levels remain high across many southern counties. We need to remain vigilant to ensure that communities are protected, because that groundwater will take some time to recede.

Climate change is referred to in the motion and was mentioned by the hon. Member for Garston and Halewood (Maria Eagle) in her opening remarks. While it is not yet possible to attribute a single instance of extreme weather to climate change, the recent winter storminess is in line with what we expect to see under climate change scenarios. We expect an increase in the frequency and severity of these types of weather events. The UK’s first climate change risk assessment, published in 2012, assessed this trend and informed the report on the national adaptation programme that we published last year. This sets out a wide range of actions by Government, business, councils and civil society to address the most significant climate risks we face as a country.

Severe damage has affected our infrastructure—the railway at Dawlish, famously, but we have also seen roads cut off and communities swept away. There will be costs that we need to assess, along with local authorities, to ensure that things can be brought back to the condition that local communities need.

The response has been, and continues to be, a magnificent effort. In the face of such unprecedented weather, countless people and organisations have worked together around the clock to help those affected. The level of response, and the spirit of it, has been staggering. I appreciate how hard everyone has been working and just how hard it is for the people whose homes and businesses have been affected. All levels of Government and the emergency services are fully engaged in dealing with the floods and extreme weather. It has been particularly gratifying to hear Members talk about how that has been put into practice on the ground locally and how people have learnt the lessons of the past to work together on this.

Protecting our communities against flooding is a high priority for this Government. Existing defences and improvements to the way in which we respond to incidents meant that we were able to protect 1.3 million properties from flooding since December—over 270,000 in the latest flood event. During this Parliament the Government are spending more in cash terms—in real terms—than ever before. The Government are spending £2.4 billion on flood defence over the period 2010-14, compared with £2.2 billion in the previous four-year period.

[Hugh Bayley]

rose—

[Dan Rogerson]

I will come back to the hon. Gentleman later.

In addition to DEFRA funding, we are on course to bring in £148 million of additional funding over this spending review period compared with just £13 million in the previous period. This means that some schemes that perhaps would not meet the cost-benefit ratios that we want from national funding will now go forward because local funding has made that possible.

Looking further ahead, we have made an unprecedented long-term six-year commitment to record levels of capital investment in improving defences. Since the beginning of December, our defences have taken a terrible pounding. The extra £130 million that we have committed to pay for emergency repairs will ensure that our long-term improvement plans progress as planned. These future schemes will not lose funding that needs to go towards the repairs that we will make sure happen, and are happening immediately.

Many hon. and right hon. Members have spoken and I want to pick up on some of the points that have been made. The hon. Member for Newport West (Paul Flynn) has clearly volunteered to take a PowerPoint presentation to the Somerset levels on how people there could do a better job and how dredging will have no effect whatever. I wish him well with that. I will be there tomorrow and will extend his offer. If he would like to talk to them, I am sure they would welcome that.

I share the hon. Gentleman’s view, however, that we could do more in terms of land management and local solutions to problems. I think that hon. Members across the House would agree with that and it is something we will take forward in catchment management approaches.

The hon. Member for Tewkesbury (Mr Robertson) discussed planning and the need to ensure that it takes account of flood risk and floodplains. The Government’s message not to build on floodplains is very clear and we maintain it. Local authorities, which are of course key to responding to these events, also have an incentive to take account of that. Flood Re includes premiums and excesses, so I hope that reassures the hon. Gentleman.

The hon. Member for Vale of Clwyd (Chris Ruane), who, as we heard earlier, looks as radiant as ever, was keen to pick up on a number of issues that are, as he knows, devolved to Wales. I am pleased to hear that he is raising them with the Welsh Government. Flood Re is not devolved and I would be happy to talk to him about it if he wants to raise any further issues. I went to university in Aberystwyth and saw the effect on the west coast of Wales. I would very much have liked to have visited as a Minister, but this is a devolved issue and I respect the duties of Welsh Ministers and what they are doing.

The hon. Gentleman mentioned discussions with the Association of British Insurers and a response to a parliamentary question. I want to clarify that the response was not that we have had no discussions with the ABI on this issue. The question was about technological and process improvements to speed up drying out after flooding, and not about flooding generally. We continue to have regular discussions with the ABI. I did so over Christmas and have done so more recently since the recent flooding events.

The hon. Member for Isle of Wight (Mr Turner) spoke movingly of the impact on his constituency. In particular, I took into account his point about the importance of a timely response from the insurance industry. We have addressed that and I am pleased to say that the spirit in which it is approaching the situation is very reassuring. It knows that mistakes were made in previous years and a number of loss adjusters are getting on with work on the ground.

The hon. Member for York Central (Hugh Bayley) continued his discussion about funding figures. My right hon. Friend the Secretary of State has written to him and offered a meeting at which he would be happy to discuss the issues further. I have set out our position and will do so repeatedly, and I will of course answer any questions the hon. Gentleman puts to me in order to ensure that he has all the information he needs to inform his constituents of the actual picture.

My hon. Friend the Member for Somerton and Frome (Mr Heath) has been a doughty campaigner on behalf of his constituents, as have his colleagues from across Somerset, making sure that what is happening on the levels remains in the public eye and that we get the balance right on all the tools we can use.

[Tessa Munt (Wells) (LD)]

Will my hon. Friend give way?

[Dan Rogerson]

I am afraid I do not have time, although my hon. Friend has raised these issues consistently too.

The hon. Member for Winchester (Steve Brine) highlighted the great responsibility taken by the Environment Agency and, indeed, all the community action that took place to look after residents in his area and the innovative solutions they came up with.

The hon. Member for Derby North (Chris Williamson) was clear in saying that there are no simple answers and that it is worth exploring some of the issues relating to farming practices. They will not be appropriate in every area and we will need a range of tools to tackle this.

I particularly welcomed comments made by the hon. Member for Romsey and Southampton North (Caroline Nokes) on the role played by armed service personnel in what was delivered on the ground in her area. I recognise the urgency of some of the issues she continues to raise.

The hon. Member for Nottingham South (Lilian Greenwood) raised transport issues again—we debated them this morning as well. She will have plenty of opportunities during Transport questions and other debates to pursue my colleagues at the Department for Transport with some of her concerns.

Hon. Members from along the east coast, including the hon. Members for Kingston upon Hull North (Diana Johnson) and for Brigg and Goole (Andrew Percy), were absolutely right to say that the Government are taking into account the effects on the whole country and that all the measures being put in place to help the recovery will be available to them too.

I would be happy to meet the hon. Member for Hayes and Harlington (John McDonnell) to discuss the points he raised. The hon. Member for Spelthorne (Kwasi Kwarteng) focused on groundwater, which is a particular problem that will be with us for some time.

I reassure hon. Members that we are continuing the implementation of the Pitt review. The vast majority of recommendations have been implemented. I do not think, therefore, that the formal need to continue reporting is necessary, but we will continue to update the House on anything that still needs to be dealt with.

The Opposition have tabled a motion that we are happy to support in the main. We disagree with some issues, but the important thing today is consensus to tackle the problems and recognise the contributions that people have made on the ground.

[Mr Alan Campbell (Tynemouth) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main question accordingly put and agreed to.

Resolved,

That this House notes the recent severe weather which has caused widespread and distressing flooding of homes, businesses and farmland; praises the work of communities, the Environment Agency, the Armed Forces, the emergency services and local councils in assisting those affected; calls on the insurance industry to ensure pay-outs are made as quickly as possible; recognises that continued support will be needed for the communities and businesses affected in the months ahead as homes and infrastructure are repaired; acknowledges the clear scientific evidence that climate change is contributing to the increased frequency of severe weather and the consequent risk of flooding; notes the advice from the Committee on Climate Change that current and planned levels of investment are insufficient to manage future flood risk given the increased threat from climate change; calls for further reports on the implementation of the recommendations contained in Sir Michael Pitt’s report into the 2007 floods to be made to Parliament; and supports cross-party talks on the impact of climate change and the funding and policy decisions necessary to mitigate the consequences of more frequent severe weather on communities and the economy.

Business without Debate

Wednesday 26th February 2014 Commons Chamber

delegated legislation

Wednesday 26th February 2014 Commons Chamber

[Madam Deputy Speaker (Dawn Primarolo)]

There are motions to be taken, so it would be helpful if Members leaving the Chamber did so quickly and quietly.

With the leave of the House, we shall take motions 3 to 8 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Judgments

That the draft Marriage (Same Sex Couples) (Jurisdiction and Recognition of Judgments) Regulations 2014, which were laid before this House on 23 January, be approved.

Registration of Births, Deaths and Marriages etc

That the draft Marriage of Same Sex Couples (Registration of Shared Buildings) Regulations 2014, which were laid before this House on 23 January, be approved.

That the draft Marriage of Same Sex Couples (Use of Armed Forces’ Chapels) Regulations 2014, which were laid before this House on 23 January, be approved.

Marriage

That the draft Consular Marriages and Marriages under Foreign Law Order 2014, which was laid before this House on 23 January, be approved.

That the draft Marriage (Same Sex Couples) Act 2013 (Consequential and Contrary Provisions and Scotland) Order 2014, which was laid before this House on 23 January, be approved.

That the draft Overseas Marriage (Armed Forces) Order 2014, which was laid before this House on 24 January, be approved.—(Amber Rudd.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 5 March (Standing Order No. 41A).

[Madam Deputy Speaker]

With the leave of the House, we shall take motions 9 and 10 together.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Representation of the People

That the draft Electoral Registration and Administration Act 2013 (Transitional Provisions) (Amendment) Order 2014, which was laid before this House on 30 January, be approved.

That the draft Electoral Registration (Disclosure of Electoral Registers) (Amendment) Regulations 2014, which were laid before this House on 3 February, be approved.—(Amber Rudd.)

Question agreed to.

Petitions

Wednesday 26th February 2014 Commons Chamber

18:59

[David Morris (Morecambe and Lunesdale) (Con)]

I rise to present a petition on behalf of my constituents in Skerton. Lancashire county council is closing Skerton community high school in my constituency against the wishes of the wider community and, most importantly, the best interests of the students who attend the school. In the first stage of the consultation, more than 99% of responses were against the closure of the school, but Lancashire county council still proceeded with the next stage of closing the school. This petition urges Lancashire county council to listen to the residents of Skerton and to put the children’s best interests at the heart of this decision. I urge the House to support the people of Skerton in my community.

Following is the full text of the petition:

[The Petition of the community surrounding Skerton Community High School,

Declares that the Petitioners believe that Lancashire County Council have not listened to their concerns for the schools closure in the initial round of consultation and that the County Council should not have perused the closure of the school any further.

The Petitioners therefore request that the House of Commons urges the Government to take steps to support the School in its bid to remain open.

And the Petitioners remain, etc.]

[P001320]

19:02

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

The petitioners include my hon. Friends the Members for Hartlepool (Mr Wright), for Middlesbrough (Andy McDonald) and for Stockton North (Alex Cunningham), who are in their places.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners believe that it is unfair that the Department for Communities and Local Government have imposed large funding reductions on a high-risk area like Cleveland when lower-risk areas in the South of England have had their central funding increased; further that the Petitioners believe that funding reductions have contributed to the 54.1% increase in total fire calls in Cleveland between 2012/13 and 2013/14; further that the Petitioners believe that it is unacceptable that the Authority’s proposed Integrated Risk Management Plan recommends the closure of Marine Fire Station and the reduction by approximately 25% of the number of the whole-time firefighters; further that the Authority and Government should take steps to protect frontline services and further that a local Petition on this issue has received over 6,000 signatures across Redcar and Cleveland, Middlesbrough, Stockton-on-Tees and Hartlepool.

The Petitioners therefore request that the House of Commons urges the Department for Communities and Local Government to provide a fairer funding settlement that gives due consideration to deprivation and risk, further that the House of Commons urges the Government to encourage Cleveland Fire Authority to reallocate planned capital expenditure to the preservation of frontline services, and further that the House of Commons urges the Cabinet Office, Department for Communities and Local Government and Cleveland Fire Authority not to further expend on unwanted and high-risk proposals to spin out fire brigades as public service mutuals.

And the Petitioners remain, etc.

[P001321]

Young Drivers (Safety)

Wednesday 26th February 2014 Commons Chamber

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

19:04

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

I am grateful to have secured this important debate. I tried to do so having learned the tragic story of Emily Challen, a 17-year-old constituent of mine who was killed in a car accident this time last year. Her death has left a void in the lives of her parents and family that few of us can begin to imagine. I pay tribute to her parents, Keith and Jennifer, for their bravery and dignity in telling Emily’s story and in trying to ensure that some good comes of what their family have been through.

On 15 February 2013, Emily was travelling to school as one of three passengers in a car driven by an 18-year-old friend, when the car ran into the back of a stationary lorry on a slip road. Emily was pronounced dead at the scene. In a few short moments, her promising young life, and the happiness of many whose lives she touched and enriched, were extinguished.

We cannot, of course, undo what happened that day. What we can do, and what we should be doing, is to try to reduce the chances of what happened to the Challen family happening to anyone else. In short, how can driving be made safer for young drivers? What lessons can we learn from other jurisdictions where young drivers cannot simply pass their test and enjoy the same access to the road network as those who have been driving for years? How can we minimise the chance of other families having to suffer what the Challen family have been through?

Road crashes are one of the biggest unnatural causes of death for young people in the UK. The figures are appalling and they speak for themselves. Young drivers are involved in one in four fatal and serious crashes, despite making up only one in eight holders of driving licences. One in five new drivers has a crash within six months of passing their test, and we all know that young male drivers have much higher crash rates than young female drivers.

Why is that so? The reasons are not, perhaps, obscure, but they deserve restatement. As anyone who has been driving for a while knows, young people are more likely to take a number of the deadliest risks on our roads, including speeding, overtaking blind and not wearing a seat belt. Young drivers, especially young men, are more likely to seek thrills from driving fast and cornering at high speed than their older counterparts. Although young people quickly pick up the physical skills of driving and, as a result, feel they have mastered the art and are very confident about their abilities, that is simply an illusion. Young drivers drive unsafely, but they do so believing that they are in control.

Young drivers do all that when, as anyone who has been driving for years knows, although some hazards on the road are easy to identify, many are not. It often takes experience to notice the hidden hazards, and owing to inexperience, young people may be poor at noticing them and reacting in time to avoid them. The research indicates that, since driving is a new experience for young people, they tend to use most of their mental energy on the immediate tasks, such as gear-changing and steering, rather than on general observation of the potential hazards ahead. Inexperience means that they have a poorer ability to spot such hazards; youth means that they are particularly likely to take risks.

As hon. Members will know, that is not the end of the story. Perhaps most worryingly, young drivers are more likely to drive while under the influence of alcohol or drugs. So it is that drivers under the age of 25 have the highest incidence of failing a breath test after a crash. Any amount of alcohol in the bloodstream can affect a person’s ability to drive safely, as it impairs reaction times and affects the ability to judge speed and distance accurately. Alcohol or drugs, combined with a lack of experience on the roads, is therefore a particularly dangerous mixture.

Of particular concern to Mr and Mrs Challen, given the circumstances of Emily’s death, is the research that shows that having passengers in the car can cause even higher crash rates among young drivers. Peer pressure can encourage bad driving and result in drivers showing off to their passengers, as well as cause distraction. Research in the United States has shown that the already high crash rate for teenagers when driving alone is greatly increased when passengers are present. With two or more passengers, the fatal crash risk for 16 to 19-year-old drivers is more than five times greater than when they are driving alone.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. and learned Gentleman for bringing this important matter to the House for consideration. Is he aware that between the hours of 2 am and 5 am, accidents among young people increase by 17%? Does he feel that the Government should perhaps consider a restriction on young drivers between 2 am and 5 am, to reduce accidents and improve safety?

[Stephen Phillips]

I am grateful to the hon. Gentleman for his intervention. I was not aware of the specific figure that he has given, but I will certainly come on to what the Government might do, and what I—and indeed others—think they ought to do.

The Minister will, I suspect, know the figures I have given to the House, but neither this Government nor their predecessors have taken the action necessary to ensure the safety of young drivers on our roads, as well as that of those who travel with them and other road users. Why? I do not know. I want to hear tonight that the Minister and the Department for Transport will take a fresh look at the issue before more young lives are wiped out in an unnecessary and untimely fashion.

What can be done to make things safer? Although I accept there is a balance to be struck with social and work mobility for young people, the fact remains that we have to do something. I, and others such as the hon. Member for Strangford (Jim Shannon), have been extremely concerned that the Department has delayed its Green Paper on young driver safety, apparently indefinitely. Let me make it clear to my hon. Friend the Minister that not only is that not good enough, but he needs to tell the House why that decision has been taken and, frankly, either reverse it or face the consequences of not doing so, and what that will mean for death and serious injury to young drivers in the future.

Graduated driver licensing exists in many other countries, and at present I see no good reason for why it does not exist here. Exact requirements vary slightly, but the main aim, which any licensing system ought to share, remains the same: to build up the ability and experience of young drivers in stages on a structured basis, to minimise the risks that they face. That means limiting the exposure of new drivers to the dangerous situations I have mentioned. Novice drivers going through graduated driver licensing could be subjected to certain restrictions and conditions, including restrictions on the number of passengers they can carry, driving at night and alcohol consumption. A graduated licence system would also go hand in hand with road safety as a compulsory part of the national curriculum in schools, where we should be teaching young people about the risks that they face as novice drivers or young passengers and how to minimise them.

Presently, we allow eager young 17-year-olds to be out unsupervised on public roads exceptionally quickly. In the UK, drivers can go from never having driven at all to being fully licensed in months or even weeks. Each year, 50,000 17-year-olds pass their driving test with fewer than six months’ driving experience. That gives them very little time to develop experience while under the relative safety of some form of supervision.

[James Duddridge (Rochford and Southend East) (Con)]

Tragically, I have raised a similar case with the Minister. One of the solutions proposed by the family in that case was a probationary period, perhaps for three years after passing the test, where the P-plate, rather than the L-plate, would need to be displayed. Does my hon. and learned Friend think that would be a good idea as part of the package of solutions?

[Stephen Phillips]

That is certainly one of the options that the Department ought to consider, along with a number of other options from many other jurisdictions, some of which I will come on to, as part of a graduated licence system. Unless we do something, we will simply continue with this epidemic of death and serious injury to young drivers in this country.

One thing that could be introduced is a minimum learning period—for example, one year—before taking a theory or practical test. All learner drivers would therefore have time to develop experience under full supervision before being allowed out alone. However, because the Green Paper has been put on hold or delayed, that is apparently not something that the Government are prepared even to consider or consult on, which is more than regrettable.

Evidence from other countries that have introduced some form of graduated driver licensing system shows that a difference can be made. Analysis of such a system in New Zealand by the UK’s Transport Research Laboratory showed that, following the introduction of a graduated driving licence, there was a reduction in car crash injuries of 23% for 15 to 19-year-olds, and 12% for 20 to 24-year-olds.

In the great state of Michigan, home to the US auto industry, research has found that young people are 11% less likely to be killed or injured on roads than their parents, thanks to their reformed system of learner licensing. In Washington state, annual deaths and serious injuries among 16 and 17-year-old novice drivers reduced by 59% after the introduction of a driving curfew between 1 am and 5 am for the first year, a ban on carrying teenage passengers for the first six months and a licence suspension for under-18s of up to six months for committing two or more violations.

Why, oh why, are we not learning from those figures and experiences, and saving hundreds of young drivers in the UK from serious injury and death every year? It is not as though calls for something to be done are new. In 2007, the Transport Committee reviewed the evidence available and called for the introduction of a graduated driver licensing system, including a minimum 12-month learner period; raising the age of unaccompanied driving to 18; a maximum blood alcohol limit of 20 mg per 100 ml of blood for up to 12 months after passing the test; a ban on passengers aged 10 to 20 years between 11 pm and 5 am for a year; and a learning programme undertaken and examined by an approved driving instructor.

The House will not be surprised that the report, as with so many good and considered Select Committee reports, appears simply to have been ignored. It is not as though such changes would be unpopular. Again, we have the research to prove it. A survey by the road safety charity Brake and Direct Line found that 87% of drivers thought that learners should be required to achieve a minimum level of experience before taking their driving test and that 81% thought that there should be restrictions on drivers’ licences for a period of time after they first passed their test. If and when the Department publishes a Green Paper, those figures will no doubt be replicated in responses, so why on earth are we not getting on with it? How many families have to go through what the Challen family has been through before the Department for Transport gets the message?

The number of young people being killed or injured on our roads unnecessarily is too high, the present position is untenable, the attitude of the Department inexplicable, the persistence of the problem inevitable and the solution readily and easily apparent. Not only can something be done; something must be done. In the name of Emily Challen, for God’s sake let us do what we were sent here to do and act now.

19:17

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

I congratulate my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) on securing this debate on the safety of young drivers. I am always glad to have the opportunity to discuss an important subject such as improving the safety of our young drivers. I was extremely sorry to hear of the tragic death last year of his constituent, Emily Challen, and I am saddened by the continuing toll of fatal accidents on our roads. Every one of them is a tragedy.

There are very few of us who have not been touched by such a tragedy. In my locality, there was a recent road collision involving an 18-year-old friend of my son. His car crashed into a tree and, sadly, he was killed. That shocked the whole year group at Malton school. We cannot be complacent about our road safety record, and we must continue to seek improvements and identify the changes that can make our roads safer for all. This is why it is vital that the Government strike the right balance, so that young drivers remain safe on our roads, but, at the same time, their freedom is not restricted. We feel that it is important that all views are considered and the right decisions are made. We will issue a paper when we have considered the matter further.

Britain’s roads are among the safest in the world. We are proud of that record, but we know that there is more we can do to make our roads safer. The latest figures for 2012 show another drop in the number of people killed on our roads. In fact, it was the lowest figure since national records began in 1926. It is a testament to the hard work and dedication of road safety professionals that we are able to make consistent progress year on year. However, I suspect that, like me, all hon. Members feel a mixture of emotions whenever such statistics are published, because every single one of them is preventable.

[Mr Stewart Jackson (Peterborough) (Con)]

I congratulate my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) on his powerful speech. Does the Minister agree that it is imperative, not least for their own self-interest, that insurance companies are involved in the process of guiding behaviour, given that most young drivers will be driving legally and that fixing insurance premiums to guide behaviour is an important part of changing behaviour in the long run?

[Mr Goodwill]

Indeed; in fact, many young people cannot drive because they cannot afford the insurance. However, I will come to some exciting developments in the field of telematics, which insurance companies are engaged with.

It is knowing that deaths are preventable that gives us such a strong incentive to carry on trying to improve what we do. For me, as road safety Minister, that means providing support to road safety professionals such as the police, the fire service and many other road safety organisations. That support may come through funding, policy or raising awareness of important issues.

As we have heard, young people are involved in about a fifth of all road crashes, but only about 5% of all the miles driven in Britain each year are driven by them. That worries us, and we know it worries parents and young people too. We know that young men cause more crashes than young women and that more collisions occur at night, when young people have their friends in the car or are on roads in the countryside. We also know that drivers of all ages are most at risk of causing a collision in the first six months after they take their practical test.

We are also conscious that this unfortunate safety record gives our young people some of the highest insurance premiums. As budgets in many households are tight, we want to do what we can to bring those insurance costs down. Estimates provided by the insurance industry suggest that drivers could expect discounts on a telematics policy of between 25% to 33%, with the highest being 50%, and that some young drivers have saved over £1,000 by using such policies. Such policies are cheaper because the claims history of the drivers using them is so much better. It is also worth mentioning that some studies suggest that parental viewing of feedback from telematics devices can improve young people’s driving further.

For those who are not conversant with the concept of telematics, I would liken it to having the electronic equivalent of a glass of water on the dashboard. Every time the water spills because of severe braking or cornering, the policy cost is loaded up. Indeed, there are currently 296,000 live telematics policies from a number of companies in this country. Only recently I met the insurance industry to discuss how we might consider commissioning research into how telematics can change the behaviour and attitudes of learner drivers. Like many things in life, the more someone practises, the better they become. We know that more practice before taking a practical test improves hazard perception and understanding of risk, and results in a lower collision rate.

The driving test has been steadily refined since it was introduced in the 1930s. We have recently made changes to the theory test, so that it is harder to learn the answers by rote, and we have introduced an element of independent driving—driving without instruction or direction—during the test to help to prepare for the real-life driving environment. The Government recognise that there are many voices calling for a graduated driving licence to be considered or introduced in Britain. We recognise that there is a significant body of evidence to suggest that a GDL regime would have a beneficial effect on British road safety. However, against that we need to weigh carefully the implications for the freedom of our young people, as any such change to the law would result in some difficult cases—for instance, where a young person is stranded, unable to drive home legally—or would limit the ability of young people to offer each other lifts and thereby reduce transport costs.

Caution also needs to be exercised before making quick comparisons between Britain and other countries with GDL regimes. British roads are among the safest in the world and Britain’s road safety record is considerably better than all the countries that have already introduced GDLs, with the exception of Sweden, whose record is similar to ours.

We are in the process of undertaking some face-to-face research with parents and young people to get a better understanding of the issues from their perspective. As I hope the House can appreciate, this is a difficult topic, as I have mentioned, and it is important that we get this right. Once we are confident that we have struck the right balance between driver safety and restricting the freedom of our young people, we will come forward with our proposals. In the meantime, there are other things we can look to improve.

We want to improve the quality and accessibility of resources to support road safety. There is a range of resources to support the process involved in gaining a licence, but relatively little information targeted at parents, at those who accompany learner drivers or even at young people themselves on the risks faced by inexperienced drivers after they pass their driving test. There are also initiatives like Bikeability, which operates in the cycling sector, that could be used at an early age to instil road safety behaviours.

There are technologies that could potentially reduce the crash and casualty risk among novice drivers, and we want to provide incentives for their take-up. Because young and inexperienced drivers’ decisions about the vehicles that they buy are influenced by their overall budgets and by the cost of insurance, new vehicles, which are safer but more expensive, are less likely to be driven by the drivers who are most at risk and who would benefit most from the technology. I expect that that will change over time as today’s new cars become tomorrow’s cheap bangers.

We recognise that if we tighten the processes of learning to drive and licensing, an unintended consequence may be that more young people choose to ride motorbikes or mopeds. We also know that powered two-wheelers are involved in a significant number of crashes, many more than cars. We therefore think it important to consider ways of improving the process of compulsory basic training so that that, too, is as safe as we can make it.

We are worried about the safety of our young people. It is simply not right that a young woman in Britain today is most likely to be killed while being driven by her boyfriend. The safety record of our young and inexperienced drivers has long been a topic of discussion among the road safety and insurance communities. I hope that the examples that I have given illustrate our determination to work with my hon. and learned Friend the Member for Sleaford and North Hykeham to improve road safety throughout our country. In the months ahead, our objective will be to ensure that we contribute to the reduction in the number of accidents and fatalities on our roads.

Question put and agreed to.

19:26

House adjourned.

Ministerial Corrections

Wednesday 26th February 2014 Ministerial Corrections

Wednesday 26 February 2014

Health

Wednesday 26th February 2014 Ministerial Corrections

Procurement

[Chris Leslie]

To ask the Secretary of State for Health what his Department's 10 largest contracts let since the financial year 2010-11 are; what savings have been made in such contracts; what the level of overspend or underspend was in each such contract; and what steps his Department has taken to monitor the performance of each supplier of such contract following the contract award.

[Official Report, 21 January 2014, Vol. 574, c. 146-7W.]

Letter of correction from Dr Daniel Poulter:

An error has been identified in the written answer given to the hon. Member for Nottingham East (Chris Leslie) on 21 January 2014.

The full answer given was as follows:

[Dr Poulter]

The 10 largest contracts that have been let by the Department since the financial year 2010-11 are as follows:

[Dr Poulter]

The 10 largest contracts that have been let by the Department since the financial year 2010-11 are as follows:

Energy and Climate Change

Wednesday 26th February 2014 Ministerial Corrections

Wind and Solar Power: Planning Permission

[Julie Elliott]

To ask the Secretary of State for Energy and Climate Change (1) how much (a) onshore and (b) offshore wind capacity (i) received planning approval and (ii) was rejected in each year since 2009;

(2) how many planning applications for (a) onshore and (b) offshore wind farms were (i) approved and (ii) rejected in each year since 2009;

(3) how much large-scale solar capacity has had planning approval (a) accepted and (b) rejected in each year since 2009;

(4) how many planning applications for large-scale solar projects have been (a) approved and (b) rejected in each year since 2009.

[Official Report, 13 January 2014, Vol. 573, c. 341-2W.]

Letter of correction from Gregory Barker:

An error has been identified in the written answer given to the hon. Member for Sunderland Central (Julie Elliott) on 13 January 2014.

The full answer given was as follows:

[Gregory Barker]

The Renewable Energy Planning Database (REPD) tracks the progress of all projects over 0.01MW from submission of a planning application through to determination and generation:

https://restats.decc.gov.uk/app/reporting/decc/monthlyextract

As at the end of November 2013, the REPD shows:

[Gregory Barker]

The Renewable Energy Planning Database (REPD) tracks the progress of all projects over 0.01MW from submission of a planning application through to determination and generation:

https://restats.decc.gov.uk/app/reporting/decc/monthlyextract

As at the end of December 2013, the REPD shows:

Westminster Hall

Wednesday 26th February 2014 Westminster Hall

Wednesday 26 February 2014

[Mr Jim Hood in the Chair]

Weather Events (South West England)

Wednesday 26th February 2014 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Amber Rudd.)

09:30

[Mr Ben Bradshaw (Exeter) (Lab)]

I am delighted to see you in the Chair, Mr Hood. I am sure that my delight is shared by the hon. Member for South West Devon (Mr Streeter), who will be speaking in this debate rather than chairing it.

I would like to start by outlining the current situation, because although the national media and visiting politicians have moved on, we in the south-west are still feeling the impact of the recent storms and floods. The main and only railway route beyond Exeter to the rest of Devon, Plymouth and Cornwall is still severed at Dawlish; the main line providing cross-country services from our region to Bristol, south Wales, the midlands and the north is still under 18 inches of water for more than a mile of its stretch near Bridgwater in Somerset; and, of course, much of the Somerset levels still look as if they have been reclaimed by the sea.

We must also take note of the impact of the rail closures on our roads. First Great Western alone is running 166 coaches a day to replace rail services lost due to the flooding in the Somerset levels and Dawlish. The urgent priority is to get both important railway connections reopened as quickly as possible. I am sure that Network Rail is doing its best in Dawlish and on the Somerset levels, but I am also sure that both it and the Minister will be aware of the importance of the Easter holidays to our tourist industry. Everything possible must be done to ensure that both lines are reopened in time for the school holidays. We have heard encouraging words from Ministers and Network Rail about the need for an additional alternative route that avoids the vulnerable Dawlish section. We have had words in the past, but what the west country wants and expects now is action.

The Government have given the commitment that Network Rail will report back by the summer on its initial feasibility study into a Dawlish-avoiding route. Will the Minister reassure me that Network Rail will take advice from outside experts, including the Met Office, on the likely impact of rising sea levels and more extreme weather events due to climate change? When Network Rail reviewed the Dawlish line for the Labour Government in 2004, it deemed it viable for the foreseeable future and rejected the need for an alternative. That advice was hopelessly over-optimistic. In fact, Network Rail has been criticised in the past for opening its eyes too slowly to the resilience challenges posed by climate change. Will the Minister assure us that Network Rail has now opened its eyes and will not make the same mistake again?

As the four transport authorities in the south-west pointed out in a letter to the Secretary of State for Transport in January—before we lost the line at Dawlish—the re-announced £31.3 million for rail flood resilience in the south-west was actually promised a year ago, after last winter’s floods when we also lost our rail connection for several weeks. The money was not delivered then—will the Minister tell us whether it has been now? If not, why not, and when will it be paid?

On the wider issue of flood defence, the Minister will be aware that several important schemes in the south-west were abandoned or delayed after his Government cut investment in flood defences on taking office. The UK Statistics Authority confirmed again today that investment in flood defences has fallen by £250 million under this Government compared with the previous one. The Environment Agency’s flood maintenance budget has fallen from more than £100 million a year in 2010 to just £60 million this year. At the time when such changes were announced, many of us warned that they would be a false economy, because, as the Minister knows, for every pound invested in flood defences, at least eight are saved in the long run. Indeed, those are the Treasury rules—the EA is not allowed to spend money on new flood defences unless it can guarantee that level of return.

When the Government took office, there was also a very good argument for sustaining or even increasing capital investment in infrastructure. For the first three years under this Government, our economy flat-lined. Organisations such as the IMF and CBI argued repeatedly for more capital investment to boost jobs and growth, but that did not happen. The Government did not listen and we are now paying the price. Will the Minister assure us that the schemes that were in the pipeline in 2010 will now go ahead on a renewed, accelerated time scale?

Two weeks ago, in response to the floods, the Prime Minister said, “Money is no object”. He also kept repeating, in his now infamous press conference, the words “we are a wealthy country”, but I cannot see that any of the announcements made in the past few weeks represent any new money or increased investment. Indeed, there is still confusion about whether the Prime Minister was talking about resources to deal with the immediate crisis or long-term investment, in spite of the fact that he seemed to say quite clearly that we need to do everything we can to improve our resilience as a country.

What is the Minister’s understanding of what the Prime Minister was talking about? For example, there has still not been a firm pledge on the investment that would be needed for the Dawlish-avoiding route. Yet, whichever route is chosen, or even if the recommendation is somehow to maintain and better defend the current route, the cost will be a tiny fraction of the tens of billions of pounds that the Government have already committed to HS2. I am not against HS2, but why are the Government incapable of committing to ensuring that we in the south-west have a 20th-century railway that functions and does not leave us cut off on an annual basis, while remaining committed to HS2?

[Richard Drax (South Dorset) (Con)]

I congratulate the right hon. Gentleman on securing the debate. Does the current railway blip not draw attention to the fact that the dualling of the A303 and A30 is paramount so that if we get such appalling weather conditions in future, there will at least be access to the south-west? From my constituency, there is no access because the road infrastructure is terrible.

[Mr Bradshaw]

I have some sympathy with the hon. Gentleman’s argument, although he will be aware that the sort of dualling that some people would like would raise huge environmental challenges in the Blackdown hills. Nevertheless, he is right: we in the south-west are the poor relation when it comes to transport infrastructure. I will say a little more about that in a moment.

[David Simpson (Upper Bann) (DUP)]

I congratulate the right hon. Gentleman on securing the debate. We in Northern Ireland obviously did not suffer as much from the floods, but we sympathise with the agri-food sector, which has been badly hit. It will take tens of thousands of pounds to help the farmers in the right hon. Gentleman’s area, and flooding will have a devastating impact on future food prices.

[Mr Bradshaw]

The hon. Gentleman is probably right. The recent weather comes after droughts and floods in previous years. I am also going to say a little about the importance of land management, because I do not think that the current approach is holistic, as it should be.

I believe that the Government will not commit the money that we need to invest in the south-west because of the Chancellor’s addiction to austerity—so short-sighted when it comes to capital investment. As has been said, current Treasury figures show that expenditure per head on transport in the wider south-west is well below that of all other English regions and the devolved Administrations. The Minister is a Cornwall MP, so I am sure he is aware that it is politically difficult for any south-west MP to vote for any more funds for HS2 until we have a firm commitment to address our rail problems first.

Will the Minister tell us the latest position on job losses at the Environment Agency? As he will know, EA staff have been working around the clock during the recent flooding. In our region, it is the second year in a row that Christmas and New Year were effectively cancelled for them. I was pleased that, in response to the call from my own party leader, my right hon. Friend the Member for Doncaster North (Edward Miliband), the Government announced a temporary freeze in the EA redundancy programme. However, local staff in Devon tell me that they have already lost so many people that they not only do not have the staff to work on the new flood defence schemes that are under way, but they cannot adequately maintain current flood defences. It would be wholly irresponsible of the Government to press ahead with job cuts given what we have been through this year and last, and so soon after the even bigger floods of 2007.

When I visited the Environment Agency, with the Leader of the Opposition, in Exeter the week before last, we were told that this year is already categorised as a one-in-250-year weather event. Last year, 2000 and 2007 were categorised as one-in-100-year weather events. We seem to be having one-in-100-year or one-in-250-year weather events every other year, on average. That brings me to my next questions, which are about climate change.

It is well known that the Minister’s boss, the Secretary of State for Environment, Food and Rural Affairs, who sadly is still not with us, is the Government’s leading climate change denier—a position that many of us consider untenable, given his responsibilities. Will the Minister assure us as he sums up the debate, as Floods Minister, that he accepts the science on climate change? Has he, unlike his boss, met his own Department’s adviser on the issue and has he spoken to the world’s leading experts on the issue, who are based in Exeter? It is easy for him to do so on his way to and from his constituency.

I also appeal to the Minister to do what he can to ensure that his boss and some of the others who I fear are in denial understand the importance of overall land management in water management and flood avoidance. It is not all about dredging. As many have pointed out, including his Conservative predecessor in the job as Floods Minister, dredging can often make things worse.

In that context, let me draw the Minister’s attention to a study by Exeter university, in collaboration with his Department and South West Water, on land management and water management on Exmoor. That four-year project, led by Professor Richard Brazier, essentially involves blocking up ditches and other drainage courses over a 2,000-hectare area of the moor to help to restore the peatland that predates the drainage that has happened for grazing during the past 200 years or so.

The preliminary results, published last week, are dramatic. Because of the restored land’s improved ability to retain and absorb water, the project has reduced by one third the volume of water leaving Exmoor and entering the River Exe. That is the equivalent of nearly 7,000 Olympic-sized swimming pools. It has significantly reduced the volume of storm and therefore flood surges all along the Exe. It has had the added benefit of improving significantly the quality of the water arriving at South West Water’s treatment works, thereby reducing costs for that company and ultimately, it is hoped, for those of us who pay water rates. That work has very important lessons for land management across the uplands of south-west England and elsewhere, including, Professor Brazier believes, the high land surrounding the Somerset levels.

May I turn briefly to flood insurance? Many householders and businesses in Exeter have seen their flood insurance premiums rocket because of the combination of the cuts in investment in flood defences, the delay in the construction of upgraded flood defences for the city and the continuing failure of the Government to implement the long-awaited deal that they finally struck with the insurance industry on long-term insurance cover.

When the Leader of the Opposition was in Exeter, he met a couple whose insurance had rocketed in price from below £200 to nearly £800. He also met the chairman of Exeter chamber of commerce, who told him that businesses on Marsh Barton, one of the main industrial sites in my area and, as its name suggests, on a floodplain, had seen the excess on their flood insurance policies increase fivefold. They had also been told that they would have to move all their plant and equipment to the first floors of their buildings in the event of a flood warning, even though many of them are in single-storey buildings.

We were told that there is an ongoing disagreement between the Government and the insurance industry about whether to make it clear on everyone’s bills the premium that they are paying to help to cover people in higher-risk areas and that that is holding up the implementation of the deal. There is also the problem in relation to leaseholders, homes built since 2009 and small businesses, none of which are included in the current scheme. Is it not clear that, as it stands, Flood Re, as the scheme is called, is not adequate? Will the Minister assure us that the Government will deal with its inadequacies in the Water Bill?

In opposition, the Prime Minister famously rode huskies and said “Vote blue, go green.” People thought that he was serious about the environment and climate change, yet in recent years, intimidated by the growing band of climate change deniers in his party, he has seemed almost embarrassed to talk about the subject. He oversaw huge cuts in flood defences and the Environment Agency budgets, and work on implementing the recommendations of the Pitt report, commissioned after the major floods in 2007, stalled.

[Lilian Greenwood (Nottingham South) (Lab)]

My right hon. Friend is making a passionate speech on behalf of the south-west region. Does he share my concern that preparing for and managing flood risk has been dropped as one of the priorities of the Department for Environment, Food and Rural Affairs and that the Government’s national policy statement on roads and railways contains no reference to ensuring the resilience of our existing transport network?

[Mr Bradshaw]

I entirely agree with my hon. Friend. What she describes fits into the overall picture, which is that the joined-up, strategic, collaborative, comprehensive approach adopted following the Pitt review after the serious floods of 2007 has been picked apart. The Cabinet Committee on Flooding that was set up under the previous Government was scrapped. It has now been reintroduced, we hear.

I do not know whether the Committee has sat; I do not know whether the Minister serves on it. However, we have lost three and a half years of effective policy on flood defence, flood management and managing flood risk, and I still do not detect the “joined-up-ness” that we need. When the Prime Minister comes to the Somerset levels and repeats what he heard from the last people he spoke to about dredging, has he actually looked at the evidence? Has he looked at all the advice that is coming, including again today, from organisations that know much more about flooding than anyone in this room does? They say that we need a much more holistic and joined-up approach—in the end, an approach that would save us as a country not only a great deal of heartbreak, but a great deal of money.

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

The right hon. Gentleman is right to say that this is not just about dredging, but the problem with the Parrett and Tone is that the river channel is only about two thirds of the size it should be, so dredging is needed. The problem has been that dredging has not been put into the equation. The issue is about water management, but it is also about dredging.

[Mr Bradshaw]

I invite the hon. Gentleman, who serves on the Select Committee on Environment, Food and Rural Affairs, which sits this afternoon, to invite Professor Brazier from Exeter university to come and give evidence to the Committee. If the Committee is to publish a report on the lessons that could be learned from what has happened in the past few months, it is very important that it listens to the views of people who have conducted such important research.

[Jim Shannon (Strangford) (DUP)]

I appreciate that the concerns being discussed today are specifically about the south-west of England, but we have also had concerns in Strangford. Does the right hon. Gentleman believe that this issue should be addressed in any way? There seemed to be a delay in responding, which was a big issue for many of my constituents at home, but also in the south-west of England. Does the right hon. Gentleman believe that the Minister should set up a group to consider how the Government can react quickly when flooding starts, rather than providing a delayed response?

[Mr Bradshaw]

I did not want this debate to be about how the Government handled the immediate crisis, but about how we move forward and ensure that we have a joined-up approach to dealing with flood risk management. However, having been Minister for the South West in 2007, when we had what were more serious floods in many ways, I do have some experience of how to manage a crisis. I also dealt with bird flu at DEFRA. It is very important that when something such as this happens, it is gripped immediately from the top. When the Prime Minister finally did grip what had happened, things started moving and changed, but it is only really when the Prime Minister gets involved, starts chairing Cobra and takes control that all the agencies and Departments come together and work effectively.

However, what matters to people in the long term is not how Governments manage immediate crises—although that is important, not least for their reputation—but whether that collaboration, that “joined-up-ness”, that strategic approach is continued in the long term, because it is long-term and sustained policies and investment that will make it less likely that we will have constantly to fight these crises and fires in the future.

I hope that the recent floods and storms and their impact will have served as a wake-up call to the Government, because the long-suffering south-west of England will judge not on words, but on actions.

09:48

[Anne Marie Morris (Newton Abbot) (Con)]

I congratulate the right hon. Member for Exeter (Mr Bradshaw) on an extremely valuable introduction and on getting this debate on the table. Clearly, for all of us in the south-west, the impact of the storm in the weeks from 3 February onwards was more than significant. Certainly in Dawlish in my constituency, the damage was unprecedented. According to Network Rail, the breach in the sea wall was something the like of which had never been seen before.

Not only Dawlish was damaged—there was significant erosion damage in Dawlish Warren, which depends on tourism for its livelihood. Losing four metres of sand not only reduces the defence mechanisms, but the lack of sand on the beaches impacts on tourism, and there has been a delay in the recharge project to bring the beaches up to standard.

[Sheryll Murray (South East Cornwall) (Con)]

All along the coast, from Cornwall to my hon. Friend’s constituency, we have seen unprecedented coastal damage that will affect tourist businesses. Does she agree that the message must go out that the south-west is still very much open for business?

[Anne Marie Morris]

My hon. Friend makes absolutely the right point. It is clear to me from the conversations I have had with Network Rail that we will be open for business for Easter. It has been a challenging time, but from everything I have seen—I see the concrete lorries filling that wonderful hole—I am absolutely sure that we will see a successful result.

As for the damage, I will focus on Dawlish, which is where the most significant impact was. It would be wrong not to mention some of the other things that have happened, and the erosion is a part of it. We have also had significant flooding in some of our smaller villages. I have 40 villages in my constituency. I will not name each of them and list the damage that occurred, but Ringmoor and Stokeinteignhead were significantly damaged. However, Dawlish is where the most significant impact of the storm was felt.

Some 56 families had to be evacuated late at night. The police had to knock in windows to get residents out. Countless businesses lost trade and, although that was partly due to sodden buildings, it was also because the train was not running. The cafés that usually got the business from the tourist footfall simply did not do business. The district and county councils were brilliant in all that they did, doing much more than might otherwise have been expected. Volunteers were fantastic. There was a lot of action during the night. Tea was available 24 hours a day, served by a wonderful lady, and the Network Rail team, in their orange jackets, have now become almost iconic in Dawlish. The local community love them to bits and see them as local heroes. They are still giving them cups of tea and pats on the back, and whatever else it takes to keep them going.

During the crisis, First Great Western finally got up to speed and put in place the coaches that were needed, but it is fair to say—I am sure the right hon. Member for Exeter knows this—that there were severe challenges going south from Exeter, and I heard tales of queues of 200 people struggling to find places on coaches.

We need to remember that the impact of everything that has happened was not only physical, but emotional and economic. For my constituency, the impact has been devastating. That coastal railway line has stood the test of time since Brunel built it, although it has breached before. There are some wonderful pictures of previous breaches when passengers got off the train, walked over the rocks and got on another train on the other side. I am not sure we could do that today, but the pictures are interesting.

The coastal railway is an economic lifeline. The loss to the region is—conservatively—£2 million a day. It is crucial that the line is up and running for Easter. As the right hon. Member for Exeter mentioned, the line is particularly crucial in my area, not only because it is an economic lifeline, but because it is a flood defence. It protects 951 properties in Dawlish, Dawlish Warren, Starcross and Cockwood. It is absolutely mission critical for me as the Member of Parliament and for the constituents I represent that the railway line is made better and more resilient, and that it is there for the long term.

We must look seriously at what can be done to support the railway line. I hope the Minister addresses that in his remarks. There is new technology that will allow a secondary wall to be put on the external front, with wave-breaking technologies that will reduce any damage. There is also the potential for a breakwater to be put further out. I believe that has been done in Sidmouth and Plymouth. I see no reason why it should not be considered in Dawlish. Indeed, from conversations I had with Network Rail last year, I understand that it was already under review. However, I thought 2019 was too late and simply not an adequate answer.

The Dawlish station footfall, believe it or not, is 480,564 people per year. That is the 2012 figure, the most recent I could find. Over the past 10 years, the footfall through Dawlish has risen by 81%. The footfall for Teignmouth is 566,528 individuals a year—again, that is the 2012 figure—and that has seen growth of 98%. If we add the footfall in Newton Abbot, the number is similar to that in Exeter St Davids or Plymouth, so this is not a small rural area. It is a significant part of the south-west, with a significant local economy, much of which is driven by tourism, and it is absolutely crucial that the Government support it.

The Government’s help has been very welcome. The resilience review, which I gather the Army will be undertaking in five weeks, will make a big difference. My question is this: if the Army can do it in five weeks, why has it historically taken Governments years? Can we not make the process faster and have a real assessment of what can be done, with some proper open discussion about what money is needed and what money can be spent? Although the Prime Minister has said money is no object in relation to flood damage, given the budget left by the previous Government, there is not a lot of spare cash. However, this is a critical area for spending, and we must future-proof the railway.

[Lilian Greenwood]

On the best way to tackle resilience at Dawlish, it might be concluded that a new line is necessary or that substantial work is needed to strengthen the Dawlish sea wall. Is the hon. Lady concerned that the money could come from already squeezed Network Rail budgets and other projects in the south-west, rather than being funded with new money from central Government?

[Anne Marie Morris]

First, I do not think there is any question in anybody’s mind that any additional railway line or loop would be instead of the existing line—it must always be as well as the existing line, not least because any new building of railway will take a significant length of time, and whether someone lives in Plymouth, Exeter, Newton Abbot or Dawlish, they need the line and they need it for the long term. It is not a question of an alternative, but an addition.

[Mr Bradshaw]

Hear, hear.

[Anne Marie Morris]

I am grateful for the right hon. Gentleman’s support. As for the hon. Lady’s comments about squeezing other budgets, I would request, as I am sure she would, that additional money is found elsewhere in the Government’s coffers. They have some big issues to deal with, and I am afraid I am going to be a bit controversial here. Almost without exception, constituents have come up to me and said, “Why have we got so much money in the international aid budget?” In many ways, that budget is absolutely right, but what about our own people? Does not charity begin at home? I am conscious that that budget is not big and would not cover all the flood prevention work that is needed. Although it is laudable to have a fund for international aid, there must be a balance, and the time for reviewing that balance is now.

The help offered by the Government to date has been welcome. We have had a business rates holiday for businesses, and the changes to the Bellwin scheme, which gave us 100% cover and lowered the level that had to be reached before money was forthcoming, were welcome, but I have a concern for the Minister to pass on to his Cabinet colleagues. My concern is that the Bellwin formula money did not assist district councils, but most of the expenditure in my area was incurred by the district council, not the county council.

I am equally grateful to the Government for the business support fund, which is to provide support for businesses that have lost trade as a result of this weather event. There is considerable confusion about what “flooding” means. In my constituency, yes, we have flooding and water standing in properties, but we also have storm damage and erosion. It is far from clear what that support covers, because businesses clearly have lost trade from all those things. When my constituents and the council ring the Department for Business, Innovation and Skills hotline—and, indeed, when people speak to Devon county council—they find that they do not know either. We need some clarity about exactly what the business support fund covers.

I am grateful for the £22,500 that has been earmarked for my district council, Teignbridge, but I am saddened that, even as I speak this morning, it has still not been paid. I wonder whether the Minister could raise that matter with his colleagues.

Going forward, we need a proper strategy and proper flood prevention and advice. Villagers who have been flooded are concerned because they feel that they did not have any advice about what to do to shore up their properties. Could we not talk to the fire service to see whether it could provide advice? Otherwise it will be a free-for-all for individuals who might be giving the wrong advice. Villagers were also concerned that there was no early warning and said that a siren would have helped, because this weather event was in the middle of the night. Indeed, Network Rail only discovered it was a double black rather late in the day. Perhaps something could be done about warning and notification, not just of individuals and organisations that can do something, but of residents. That would be helpful.

As the right hon. Member for Exeter said, this is no time for complacency. There is much to be done and it must be done now. That railway line along the coast is vital to the whole south-west and action is needed now. I do not think any of us would condone delay until 2019. Now means 2014 or 2015 and, at the latest, 2016.

10:01

[Mr Gary Streeter (South West Devon) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hood. It is great that the Minister responding to this debate knows a great deal about the south-west of England, representing as he does North Cornwall, which is also feeling the impact of the issues that we are grappling with.

I congratulate the right hon. Member for Exeter (Mr Bradshaw) on securing this debate, and he made a characteristically passionate speech. However, I say gently to him that his analysis appears to be that everything was great before 2010 and disastrous since 2010. That is not the real world. Other than that, I appreciate the passion and power with which he put forward his argument. He is right to say that we have to do more, both on flood risk management and on upgrading and making our infrastructure more resilient.

The greatest challenge that we in the south-west face is peripherality. People think that, when they get to Bristol, they have arrived in the south-west, but they have not; they are in the south midlands or the west country, not in the south-west. Plymouth is 110 miles from Bristol. I often thought, as I got off the train in days gone by—it seems a long time ago that I got off the train at Plymouth—that I felt sorry for people going on to Penzance in Cornwall, which is another hour and a half on the train. We are a long way from anywhere. Of course, peripherality keeps us beautiful and it is one of the great things that keeps our region from being overwhelmed.

[Sheryll Murray]

Does my hon. Friend agree that the railway has become more important since Plymouth lost its airport? It is the main link to the south-west and Cornwall now.

[Mr Streeter]

I agree—it is the main link, although the M5 and A38 are pretty good in terms of bringing all the many hundreds of thousands of visitors who will come to us at Easter. I agree with my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who represents Dawlish so ably, that the south-west is certainly open for business.

If our big problem is peripherality, the solution to that is connectivity. This is where our rail link is so important. Yes, superfast broadband is important, as is the M5-A38 link, but as we have just heard, we do not have an airport at Plymouth any longer—there are airports at Newquay and Exeter, but not in Plymouth, which is the engine room of our sub-region—therefore our rail link is extremely important.

I remember a trip to India in 1990s with some Indian business people, just after the monsoon had struck, as it does every year in India. A frustrated Indian businessman said to me, “This is what is holding us back. Every year our physical infrastructure is overwhelmed by the weather and often is swept away and we have to start all over again.” We do not want to be in that position in the far south-west. We must have in place robust infrastructure that underpins our connectivity.

Let me mention the impact on Devon. There was, of course, flooding, which my hon. Friend the Member for Newton Abbot talked about. By the way, just after the Dawlish breach, iconic pictures, now on the BBC’s “Spotlight” archive, show my hon. Friend raging against the elements, overlooking this breach, almost trying to turn back the storm and doing her utmost for her constituents in fighting for urgent action, which, of course, has followed. Those pictures will live with me for a long time. King Lear has nothing on my hon. Friend the Member for Newton Abbot.

Of course, we have had flooding before, but the battering our coastline took was a new thing this year. In 2012, we had a lot more flooding inland, but it was the coastal attack that was so spectacular this time. There is a worthy scheme to compensate some businesses that have felt the impact of these storms and help has been announced for people in Somerset, Devon and Cornwall, but no help has been announced for the people of Torbay or Plymouth. This may be an oversight. Perhaps a civil servant thinks that Devon includes Plymouth and Torbay, which, of course, geographically, it does; but legally it does not. Will my hon. Friend the Minister please look into that to ensure that those businesses on the seafront in Plymouth that were swept away by the storms are compensated in the same way as those along the Cornish or Devon coastline? My hon. Friend the Member for Torbay (Mr Sanders) would make the same point for his constituency if he were here.

[Richard Drax]

Might I remind my hon. Friend about the Dorset coastline, too?

[Mr Streeter]

I beg my hon. Friend’s pardon. Of course, that is right. He will no doubt make that point in his speech, which we anticipate.

Although we are talking about weather, the main focus of our attention today is rail resilience. Network Rail has responded quickly and I pay tribute to it. On the very day of the Dawlish breach, it attended a meeting with the Secretary of State for Transport, here at Westminster, and it was obvious that it was going to grip the situation. It gave a six-week timetable, which has slightly slipped because of further storms, and is getting on with it. I understand that it has 100 people working 24/7 to fill up this wonderful hole, as my hon. Friend the Member for Newton Abbot described it. Congratulations to Network Rail on such a rapid response. The Secretary of State has also responded quickly, and it was good to see the Prime Minister coming down and taking personal control.

I, too, thank First Great Western. It gets hammered and gets a lot of criticism, but it has responded. Perhaps it took a couple of days, but it has now responded well. The service that it is putting on for many of my constituents is excellent.

[Sheryll Murray]

My hon. Friend might like to know that some constituents visited me yesterday and they were full of praise for First Great Western and asked me to mention it. Does he agree that this is now the trend, rather than people complaining about First Great Western?

[Mr Streeter]

I agree. It provides an increasingly impressive service to the far south-west. There is another debate to be had—it is not a matter for this Minister—about the future of the franchise and how, with only two and a half years to run, the company lacks the ability to invest in upgrading its rolling stock, and so on. That needs to be tackled, but that is for another day.

The real challenge will be not getting the Dawlish breach restored and the trains running again before Easter—I am confident that will happen—but, as my hon. Friend said, the report to the Government on alternative or additional routes that I understand will be made by July. That is when the fun will begin, because there will be myriad views on the right approach. Let me say, first, that I agree that the existing route has to be reinforced and kept open. We should consider alternative routes from Newton Abbot to Exeter that would be faster and straighter, because that would make the link from the far south-west to London much quicker and more acceptable, to business people in particular. That needs to be fully explored. However, I agree that the existing line must be kept open. All we may really need is an additional line to be used in extremis, but which can be used for freight and local traffic. Then if there should be another breach in years to come, traffic can be switched to that alternate route. It would be wise to wait until we see the report, but it will be important for those of us in the west country to try to reach a consensus on the right way forward. I am afraid that at the moment there are probably as many views as there are Members of Parliament in Devon and Cornwall, which is not helpful. We need to try to reach a consensus.

That issue is eclipsed by the far greater issue of funding. I agree with many of my constituents who ask me, “How on earth can you support HS2?” There is already tremendously impressive infrastructure from London to Birmingham and further north, while in the west country we have a Victorian line that is unfortunately looking more and more vulnerable. I have come to the conclusion that it is very difficult to answer that question, except by saying—as I have already said to Ministers—that it will be impossible for me to support the Government on the Second Reading of the hybrid High Speed Rail (London – West Midlands) Bill unless there is a firm commitment on the table for a fully funded package for an agreed alternative route. That has to be new money. There is a lot of money in the five-year budget, but a lot of things have to be done with it; it has to be new money. We are probably talking about hundreds of millions of pounds.

[Mr Bradshaw]

Does the hon. Gentleman agree that, were every Member of Parliament for Devon, Cornwall and Somerset of every political party to sign up to that position, it would send a powerful message not only to the Government but to my party on the future long-term commitment?

[Mr Streeter]

It is hard to get all Members of Parliament to sign up to something like that because different agendas are running, but I agree that, in theory, there are enough Members of Parliament for Devon, Cornwall, Somerset and further afield that we could make an impact if we were to act collectively. HS2 is a decision not just for this Government but for the next Government. This is not a party-political point, and I understand that HS2 has cross-party support on the Front Benches, so it is important that we send a message from the west country that, unless there is a commitment to fully fund an alternative or additional route, we will not support the Bill on Second Reading. Although we are talking about hundreds of millions of pounds, it is crumbs off the table compared with the money anticipated for the HS2 project. I am not against HS2, but now is the time for the far south-west to have a slice of the action. We have been putting up with a second-class rail service for far too long.

That is what I came here to say today. The next nine to 12 months will be challenging for west country Members of Parliament, but there is no higher priority than restoring our connectivity. In the meantime—I finish on the point that my hon. Friend the Member for Newton Abbot was so keen to make—as Easter approaches and despite the challenges, Devon and Cornwall are firmly open for business.

10:09

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

It is a great pleasure to serve under your chairmanship, Mr Hood. I also thank the right hon. Member for Exeter (Mr Bradshaw) for obtaining this important debate.

I echo the words of my hon. Friend the Member for Newton Abbot (Anne Marie Morris), who said that the Dawlish line needs to be restored. As well as connecting to Cornwall, the line is a great tourist attraction. It is a lovely railway line to travel along. Given that it is 150 years old, it is amazing that it is still there. The line is a remarkable achievement of Brunel, who was such a great engineer. Restoring it is important.

We also have to consider a complementary line that would potentially make it much faster to get from Plymouth and Cornwall up to London. We already have a second line that comes from Exeter up to Waterloo; it runs through my constituency. We have a loop at Axminster, but we need a loop at Honiton, which would help. We also ought to consider twin-tracking the railway all the way down from London to Exeter because that would give us a line to Exeter. Furthermore, we should consider whether we can go across from Exeter towards Okehampton and down to Plymouth. We could try to go across Dartmoor itself, but that might not be easy.

Those things have to be done, and I echo the words of my hon. Friend the Member for South West Devon (Mr Streeter), who pointed out that billions of pounds are to be spent on HS2. Every time I have been through the Lobby to vote for HS2, I have held my nose for the simple reason that I did not want to support it. If we do not see real and meaningful investment in the west country, it is our duty to speak up and stand up for our constituents, and I believe we will. I look forward to my hon. Friend the Member for South Dorset (Richard Drax) reinforcing that point in a minute.

We have to consider the current structure, but we also have to consider sea defences. After I said in Parliament the other day that we do not have to retreat from the sea, The Daily Telegraph poked fun at me slightly by saying that I am like King Canute. Of course King Canute actually stood in the sea to try to persuade his courtiers that he could not keep back the sea. On the Somerset levels there are now Dutch pumps. The people of the Netherlands do not retreat from the sea for the simple reason that, if they did, they would probably lose between a third and two thirds of their country, and they do not intend to do that.

We have to treat sea defences as an infrastructure project. People can rightly argue, as the Government have, that we inherited a huge £120 billion financial deficit in the day-to-day running of the country, and we are reducing that deficit, but there has never been a better time for investment in capital projects and infrastructure because we will never see lower interest rates. I lived through a period of interest rates of 12% and 15% when I was farming, and those rates were cruel and painful to say the least. We now have much better interest rates, so let us use them to our advantage. We need to protect our coastline.

The A30 and the A303 need to be dualled so that we do not only have the M5. The A30 down from Exeter is a good road, but the A30 that runs on the edge of Dorset into Wiltshire, Somerset and the south of my constituency needs to be dualled. We do not want to be held up entirely by Stonehenge. We have to sort out Stonehenge, but it should not be the sticking point against dualling the rest of the road.

On his visit to the west country, the Prime Minister said that 100% of the need will be provided under the Bellwin agreement. There are potholes all over Devon and Cornwall. The roads are horrendous, and a fortune has been spent on them. The roads have to be put right. I was driving through Seaton the other day, and I nearly drove into a pothole the size of half a car. The pothole was not quite that bad, but it was huge and would cause amazing damage.

[Sheryll Murray]

Does my hon. Friend agree that Bellwin should be extended to allow local authorities to repair potholes properly, rather than cold-filling potholes only for them to become deeper a couple of weeks down the road?

[Neil Parish]

My hon. Friend is right about the need for good repairs. The county councils naturally argue that a major repair is much more expensive than just filling a pothole, but she is right that it is a pointless exercise if all the tarmac comes out of the pothole five minutes later. An awful lot of money is available to be spent.

I also welcome the Prime Minister’s pledge of £5,000 grants to help businesses through the floods. Will the Minister give us more detail on how people can claim that money? It is always great when the Government offer money, but people would like to be able to claim and use it.

On the Somerset levels, it has been said that raising the railway line across the moors would cost £200 million. There is one solution to ensure that that railway line does not flood, and that is a sluice at the end of the river Parrett to stop the sea from coming in. At the moment, the sea comes in and drives the fresh water back, and that is what keeps the moors flooded. I cannot guarantee that the sluice would mean that the moors never flooded again, but a tidal sluice on the end of the Parrett, north of Bridgwater, could mean that the depth of water on the moors would not be enough to flood the railway line.

Doing the arithmetic, it would cost £200 million to raise the railway line and that will never happen. I reckon that a sluice across the Parrett would cost some £50 million and if hydroelectric power was put there as well, the project would start to show its worth. It would help farmers, properties and nature conservation. When there is water over the whole Somerset levels for six to eight weeks, there is nothing left when the water recedes. There will not be the lovely flora and fauna or reeds and rushes that everybody wants, because it will all have rotted. Then there is the farmland, what has happened to people’s property and the stock that has had to be moved across the moors. We have to look at the situation seriously.

The other great benefit of having a sluice across the River Parrett is that the water could be penned in during the summer and the area could be made like a mini Norfolk broads. That would bring the benefits of a huge tourist attraction. Devon and Cornwall need a railway line, but we have to cross Somerset to get there, and we need to consider that. I know that the right hon. Member for Exeter does not like dredging and all those things, but they must be part of the armoury. We can hold water in certain places and further upstream, but in the end rivers such as the Parrett and Tone silt up, and without dredging we will not get the water away fast enough.

The management of those waterways has to be much more local, and that is where inland drainage boards can do a lot more. We might need more drainage boards. Will the Minister consider that? We might, dare I say it, have to get people living in houses further up the catchment area to pay a small amount, because their water is flowing down and flooding the lowland areas. There are ways of raising money, which will help. Local management would be so much better.

[Mr Bradshaw]

I was interested in what the hon. Gentleman just said. He seems to agree with the research from Exeter university, which argued that if landowners and farmers in upland areas were paid to manage their land differently, the amount of money saved through reduced flood risk on the Somerset levels and elsewhere in low-lying areas would massively outweigh that expenditure. Is it not better to pay farmers to do that, rather than to graze the uplands intensively, which is sadly sometimes the case?

[Neil Parish]

The right hon. Gentleman raises an interesting point. It is part of the solution, and we have to look at how land is managed and how farmers are paid. At the moment, farmers are paid for loss of income. We should say, “If you are going to hold that water and that will reduce flooding, you should be paid to manage that water.” In the end, that would probably be a much cheaper option.

We must also remember—this is where I probably do not agree with the right hon. Gentleman—that we need land for food production; we should not take away too much land from food production for that type of process. It is about getting the balance right, an issue on which the right hon. Gentleman and I do not entirely agree. Land management is part of the solution.

Let us go forward and look at the infrastructure across the west country, including road and rail, and let us look at maintaining our coastline. Let us look at having, in the Somerset moors, the south-west and the country, pads and pipes where we could put in these massive mobile pumps that the Dutch have. We could have Dutch pumps in Sedgemoor and they could be moved around the country. Rather than having millions and millions of pounds invested in one pumping station, let us spend a few million pounds on portable pumps and the necessary infrastructure to connect those pumps wherever they are. We can import the pumps from Holland and have them ourselves. That is key.

We have to learn lessons. A lowland area has to be pumped fast. We should stop the tide from going up the Parrett so that we can fill it with fresh water. Then, when the tide goes down, we can let it out. There are lots of practical solutions. We have suffered and people still are suffering. We can never guarantee that flooding will never happen again, but we can reduce it. I will stop there, because I know that my hon. Friend the Member for South Dorset wants to speak.

10:25

[Richard Drax (South Dorset) (Con)]

I congratulate the right hon. Member for Exeter (Mr Bradshaw) on securing this debate, which is very appropriate at this time. I thank you, Mr Hood, for calling me.

As we have heard, the south-west has borne the brunt of the weather, and nowhere has that been more impressive than in South Dorset and, in particular, on the island of Portland. It is still there, I am glad to report, but there were moments when people considered abandoning some of the homes, because the sea had risen by some 60 feet, I would guess. If one goes to the Cove House inn—the pub faces the storm—and looks at the sea when it is benign, it is hard to imagine that it can come in through the pub’s top window. The two wonderful landladies, Jackie Breakspear and Amanda Broughton-South, withstood and held firm, despite the best that the sea could throw at them.

Before I briefly speak on behalf of the fishermen and the chartered crews, who have suffered badly, I pay tribute to all those who fought heroically, and not just recently. We seem to forget that this fight has been going on since Christmas. As the right hon. Gentleman said, these men and women have been working flat out for weeks, hour after hour, in the most appalling conditions.

I pay tribute to the Environment Agency and the local authorities, which did a wonderful job, but I pay particular tribute to the Royal Engineers. The sea came over the top of Chesil beach and deposited about 16 tonnes of pebbles by the Little Ship pub. The question that every MP dreads asking when we go into these situations is, “Can I help?” The landlady, Lynda Davis, said, “Yes, Richard, you can actually. You can remove 16 tonnes of pebbles.” I had this horrific image of spending the rest of my time before the general election with a bucket and spade trying to clear them.

Using my former-Army nous, I moved across and met a young lieutenant. I said to him, “You have got all this kit. I would be most grateful if you could just pop across to the Little Ship and remove 16 tonnes of pebbles.” I am still not used to being called sir, but he said, “Sir! No problem. We will get that done.” Within two days, 16 tonnes of pebbles had been removed. What was even more astonishing was that that young officer told me that his grandfather used to run the pub. What an extraordinary story!

I must also pay tribute to the volunteers, not least the appropriately named Storm Wallace, who became an overnight star. Yes, her name is Storm Wallace. The young lady went on the internet and within days she had 300 people on a beach clean of Chesil beach. It was very impressive, and we are all back there this Sunday, because the sea dumps all the rubbish on the beach.

The fishing fleet and the charter fleet have suffered gratuitously. The concentration has been to a large extent on people and their homes, and rightly so, as well as on the farmers who have lost acres and acres under the water. The fishing fleet and the charter fleet make their living at sea. I am indebted to Andy Alcock, who is the secretary of the Weymouth and Portland Licensed Fishermen’s and Boatmen’s Association. He has armed me with a lot of the information that I will impart. Mr Alcock is a fisherman himself, with two boats and six employees in the high season. He told me that many of our fishermen in South Dorset—that includes Swanage to the east of my constituency—have been unable to put to sea for 60 days. That is two whole months.

[Sheryll Murray]

Does my hon. Friend agree that the small boat fishermen do not have the luxury of migrating or working in unusually strong weather? They suffer a lot from the consequences of the storms, and they should get help.

[Richard Drax]

I concur entirely with my hon. Friend. Many of our local fishermen, particularly in constituencies such as ours, are small boat operators, and they simply cannot cope with the enormous seas that we have been facing day after day.

Normally, at this time of year, the milder conditions in Weymouth’s microclimate might allow bass fishing to continue throughout Christmas and even new year. Netting for sole, cod and plaice continues throughout the winter months. On average, a Weymouth fisherman can count on being able to put to sea for three in every 10 days in December, January and February. This winter, since December 14, they have been able to fish for only five days. On other occasions, after spending three and a half hours getting to the fishing grounds, the appalling conditions have forced them to return. The result: no fish and no income.

On a good day, a fisherman might earn between £100 and £150. On a bad day, the take is much lower, and of course on many of the days it is nil. However, it is extremely rare that two entire months should pass without any earnings at all. Inevitably, the consequent loss of earnings has eaten into fishermen’s savings and is causing great difficulties.

The loss and destruction of expensive equipment has made recovering from such a dip in income even more difficult. Static gear such as lobster pots, crab pots, whelk pots and fixed nets have been particularly vulnerable because owners have been unable to reach them. Last week, fishermen were finally able to go out and count their losses. Gary Chard, skipper and owner of the “Gordeano Star”, has spent the six days he has been to sea since December 18 finding and repairing his equipment. He told me that of the 36 strings that he fishes, only 21 have been found. Some have moved more than a mile, and finding them has necessitated huge sweeps of possible locations. Each string is valued at £2,000, making Mr Chard’s equipment losses alone about £30,000.

Mr Alcock told me of another of his members who makes a living by tending 18 strings of lobster pots, using a small 18-foot Plymouth pilot boat in the inshore waters around Weymouth. Following the recent storms, the lobsterman found only five of his strings in place. Two more are stuck under the Lulworth ledges and need a diver to retrieve. The rest have gone. Most will be found, eventually, but that could take months, and it is likely that many of the strings will be wound around other nets and lines. Most will be unusable.

Yet, in the interim, that man must earn a living. Self-employed, the fishermen are not covered by the usual welfare safety nets. Mr Chard told me that British fishermen will soon be an endangered group. He asked whether the Government could consider loan grants, using the valuable fishing licences attached to British registered fishing boats as security—a question I pose to the Minister.

Certainly, I would urge the Minister to look kindly on applications from fishermen to the business hardship funds, which I understand are to be administered by local authorities. However, it is not clear where the money is, who is going to dish it out physically, how someone gets it—do they write or telephone in?—and how much they are going to get. I think I saw in one press release that the average amount would be £2,500, which clearly will not cover the vast costs that the people in the charter and fishing business have incurred. I would be most grateful if the Minister clarified exactly what the situation is.

I know that money is tight, but £10 million is nothing—really nothing—to cover the vast costs that the businesses have incurred. When businesses are allowed to apply for the funds, exactly who will qualify? I can see that farmers will; they have been in all the press releases. The Liberal Democrat leader, having been down to the south-west, issued a press release that included fishermen, which I was relieved to see. I have not seen charter boat crews included, but I assume—perhaps the Minister will confirm this—that they will be, because they have to go out and make a living but have not been able to. Some clarity on that important point would be most appreciated.

Finally, Swanage beach is crucial for our town. The whole of our tourism industry is to a large extent based around the beach, because it attracts hundreds of thousands of people down to a beautiful part of the world. The town council has spent £2 million to recover the beach and prepare it for the summer. Will the Government consider helping us here? That is a vast sum of money, which the town council simply cannot afford, despite the low interest rates. I would be grateful if the Minister imparted some information today.

10:34

[Barry Gardiner (Brent North) (Lab)]

This debate has been absolutely excellent. I pay tribute to and congratulate my right hon. Friend the Member for Exeter (Mr Bradshaw) on securing it and on posing serious questions about the Government’s handling of the floods. I echo his remarks praising the officers of the Environment Agency and the emergency services for their work in assisting people throughout the crisis. I also echo the remarks of the hon. Member for South West Devon (Mr Streeter) about volunteers and the extraordinary generosity that they have shown, giving up their time and energy to help people out.

It is clear that the Government have failed to take the risk of flooding in the UK seriously—right from the moment they first came into office, when they cut the flood defence budget in 2010. The Labour Government had left a budget of £670 million. After the election, the coalition partners agreed to reduce the 2010-11 budget to just £573 million. The figures for each year since then have been £576 million for 2012-13 and £577 million for 2013-14. The Government have budgeted for £615 million for 2014-15. Over the four-year spending period, this Government will have spent just £2.34 billion on flood defences, compared with the £2.37 billion that the Labour Government spent in the previous spending period.

Those figures are not the ones that the Prime Minister used two weeks ago at Prime Minister’s Question Time, but they are the ones set out clearly by the independent Committee on Climate Change in its policy note. They are also the ones used by the House of Commons Library in its briefing on flood defence spending in England, and the ones set out just yesterday by the UK Statistics Authority, which says that the Government have cut £247 million in real terms from the floods budget. Those figures can be corroborated on the Department’s website in the correction that it had to put out under the Minister’s guidance after the Secretary of State and the Prime Minister both misspoke.

Of course, the Prime Minister has now said that he will spend whatever it takes, but the people of the south-west of England will think that it might have been better to spend whatever it took to prevent the tragedy, rather than to pay to mop up the mess afterwards. It is important to be clear that the additional funding is expected to be a temporary boost from the Department’s contingency reserves and will primarily be spent on repairing and reinstating defences damaged since the east coast surge in early December.

Funding allocated to emergency response and the repair and reinstatement of damaged defences will not protect more homes and businesses. Ministers must be clear on that. Those who have seen their homes and businesses flooded and cut off over the past few months deserve clarity from Ministers. It is right that additional funding should be spent on urgent repairs, but Ministers must not suggest that that alters the fact that the Government’s downgrading of flooding has created a crisis in the funding of our essential flood defences.

The shadow Secretary of State, my hon. Friend the Member for Garston and Halewood (Maria Eagle), has been clear in pointing out that it was a mistake for the Secretary of State to downgrade flooding as one of his Department’s key priorities when he came into office, which became all too evident as the flood waters arrived in people’s living rooms before sandbags arrived at their front doors.

The initial response to the floods was slow and disorganised. The Prime Minister remained disengaged from the worsening crisis for far too long, and finally took charge of Cobra only when two of his Secretaries of State had apparently clashed over the Government’s attempt to blame anyone and everyone but themselves.

The Leader of the Opposition, my right hon. Friend the Member for Doncaster North (Edward Miliband), challenged the Prime Minister at the last Prime Minister’s Question Time about the redundancy process currently under way at the Environment Agency. The Prime Minister said that we need to spend whatever it takes, but he was strangely reluctant to give any assurance that that included spending to save the 550 jobs that the EA has currently earmarked for redundancy in the area of flood management. Perhaps in his summing up, the Minister could update the House as to whether those redundancies will be going ahead. If he cannot, perhaps he can advise how he considers the EA may be able to give people the sort of assistance we have seen over the past two months in the future with 550 fewer staff.

What roles do the people in those posts currently perform? Are some of them the people who manage the flows of water in the waterways by monitoring and operating the sluice gates, weirs, locks and pumps? Do they include the people who survey and assess the condition of the flood defences or any of the people who have been helping with the clear-up operations? If the Minister cannot advise us in that much detail now, will he kindly agree to set out clearly to the House in a letter or a written statement precisely what skills and expertise may be lost with the redundancies and how it is proposed that there will be no corresponding loss of service and safety to the public in the future if they go ahead?

The Prime Minister also claimed that there would be a fund to pay affected home owners and businesses up to £5,000 to build in better flood protection as they repair their properties. The Minister will recall that one of the amendments that we tabled when the Water Bill was in Committee was to insert a resilient repair clause in the Government’s proposed flood reinsurance scheme, Flood Re. Given that the Prime Minister now believes that that is a good idea, is it proposed that a Government amendment similar to ours will be tabled, even at this late stage?

The House will recall that after the floods disaster of 2007, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), the then Prime Minister, set up the Pitt review. The report presents an astonishingly detailed and comprehensive series of 92 recommendations, which, taken together, represent a blueprint for the management of flood risk. However, less than 18 months after the coalition was formed in 2010, the Government stopped producing progress reports on the implementation of the recommendations, despite the fact that half of them were still not fully implemented. When challenged by my hon. Friend the Member for Garston and Halewood in her urgent question on 10 February, the Secretary of State for Communities and Local Government gave the extraordinary reply that she seemed to be “obsessed by process” and claimed that he was

“more concerned…to deal with the problem of flooding.”—[Official Report, 10 February 2014; Vol. 575, c. 565.]

Does the Minister accept that the best way to deal with the problem of flooding is to get on with the process of delivering on the 46 Pitt recommendations that are still outstanding?

My right hon. Friend the Member for Exeter has rightly asked for confirmation that a full assessment will be made of the resilience of transport networks against future flood risk, and the hon. Member for Newton Abbot (Anne Marie Morris), who spoke passionately about the needs of her constituency, was at one with him on those points. Everyone in the south-west who was affected by the severe travel disruption caused by the destruction of the Dawlish line will want to know that future Government plans have taken full account of the increased risk of flooding in the future.

My hon. Friend the Member for Wakefield (Mary Creagh), the shadow Transport Secretary, has questioned why the £31 million originally allocated for rail resilience against floods, first promised to the south-west in 2013, failed to materialise in the autumn statement. More importantly, why was it subsequently re-announced this year as if it were new funding? That seems to be another example of deliberate obfuscation by the Government, who again and again put rhetoric before reality. Will the Minister update the House on what consideration the Government have given to the Opposition proposals for easing overcrowding in the south-west and ensuring that more passengers reach their destination? The Government should require all train operators to declassify first-class carriages in the event of delays or cancellations due to severe weather. When will that be done?

Perhaps the most worrying thing of all is the Government’s apparent reluctance to accept and act on climate science. The Met Office has made it clear that such extreme weather events as there have been are likely only to become more severe and more frequent. Has the Secretary of State still refused to entertain a briefing from his chief scientific adviser on climate science?

Will the Minister, who is, I know, very good on such matters, at least put his own views on the record? Does he accept the climate change risk analysis prepared by his own officials, which estimates that 1 million properties may be at serious risk of flooding by 2020? That is an increase on the current figure of 370,000. The 1 million estimate includes 800,000 homes. If he accepts it, will he tell us whether his Department’s flood insurance proposals under Flood Re take account of the additional properties? The Committee on Climate Change adaptation sub-committee has warned that they do not.

What is the Minister doing to ensure that the Environment Agency is notified of the decisions made in all planning applications where it has lodged an objection on the grounds of flood risk? At the moment, he will be aware that in one third of all such cases the local authority fails to notify the EA of the outcome. The suspicion is that local authorities that refuse an application are happy to notify the agency that they have taken its advice, but are less keen to report back to it when they have ignored it. The Minister cannot expect the EA to prepare adequate flood defences if it is not notified when properties are built in a flood risk area against its express advice. It should be necessary for the local planning authority to give notification in every case where the Environment Agency has lodged an objection on flood risk grounds.

The hon. Member for South Dorset (Richard Drax) made detailed and pertinent remarks about the importance of the fishing industry, and what he said was appropriate. We often consider farmers’ and businesses’ needs after disruption of the kind that has happened recently, but hon. Members all too seldom speak in this Chamber about the needs of the fishing community. The hon. Gentleman spoke passionately and well.

Finally, what is the Minister doing with his colleagues in DEFRA to ensure that proper catchment management plans and shoreline management plans make better use of natural processes? Land management plays a vital role, and the retention of flood water upstream through woodland and ground cover in the uplands is every bit as important as dredging in the lower levels of the catchment. Landowners will always seek to dredge the river as it passes through their land. That is the quickest way to try to ensure that their own land is not flooded and the problem is passed downstream, but under a proper catchment management plan it may be considered better to flood agricultural land upstream than to endanger an entire village at lower levels. That integrated approach was recommended in the Pitt review under recommendation 27. When will that most important element of flood risk management be properly implemented?

I congratulate my right hon. Friend the Member for Exeter once again on introducing this important debate. I congratulate all the hon. Members who spoke. It was an exemplary debate, and I look to the Minister for some clear answers.

10:47

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

It is a pleasure to serve under your chairmanship, Mr Hood. I echo what other hon. Members have said in welcoming the debate. I congratulate the right hon. Member for Exeter (Mr Bradshaw) on securing it and on re-examining several issues that he has raised before, including the importance of connections to the south-west. The debate also ensures that we take account of recent events and reflect on them, so that we can do a better job after any subsequent similar event.

I represent a constituency in the south-west, which has experienced significant flooding in the past and been affected by the recent events, and I appreciate the severity of the impact of flooding and storms on communities in our part of the world. I sympathise with residents who face serious difficulties. As we have heard, businesses, farms and fishing have been severely affected, and so, crucially, have transport links. As the country starts to recover from a lengthy onslaught of stormy weather, I express my condolences to those who have lost family members in the extreme events, and to those who have been affected in other ways.

Since the start of December 2013, the UK has experienced a prolonged period of very bad weather. In England and Wales it was the wettest January since 1766. Met Office statistics suggest that for the south of England it has been one of the most exceptional periods for winter rainfall—if not the most exceptional—in at least 248 years. The latest estimates suggest that more than 6,800 properties have been flooded in England since the beginning of December 2013, including more than 2,000 since the most recent event began in early February. In addition, more than 48,000 hectares of farmland are thought to have been affected.

In the south-west, about 550 properties flooded and, in particular, there is continued flooding on the Somerset levels and significant damage to vital railway infrastructure. Investment by Government and improvements to the way in which we respond to incidents, however, mean that we have been able to protect about 1.3 million properties since the start of December, of which 93,000 are in the south-west. That reinforces the importance of continuing our investment in flood defence schemes and forecasting capability.

I want to pick up on some of the points made by the right hon. Member for Exeter in his introductory remarks. Network Rail’s review of options for improving resilience is taking into account advice from organisations such as the Flood Forecasting Centre and the Met Office. The review is a wide one. The money for the resilience projects to which he and the hon. Member for Brent North (Barry Gardiner) referred has been announced and confirmed by the Department.

Several hon. Members raised their concerns on maintenance.

[Mr Bradshaw]

The money may have been announced, but has it been delivered?

[Dan Rogerson]

The money is in place to make the urgent repairs, and that work is ongoing. We then need a scheme that we will fund. That could be smaller elements such as protection, or a bigger scheme if we want an alternative route. It is crucial to ensure that we get the repairs done and reopen the line to emphasise that the region is open for business.

The right hon. Gentleman made an important point on capital investment. As a Liberal Democrat, I am supportive of the coalition Government’s investment in infrastructure across a whole range of areas, including rail investment. I am a supporter of High Speed 2, as well as of the investment we are getting on the sleeper service in the south-west, among other things—I am always a fan of more investment of the south-west. The Government have invested huge amounts of capital in infrastructure. The right hon. Member for Edinburgh South West (Mr Darling), who led on such matters as Chancellor going into the previous general election, set out what would have happened if a Labour Government had been re-elected. He spoke of 50% reductions in capital investment in the following years. Therefore, as my hon. Friend the Member for South West Devon (Mr Streeter) said, we should not set against what this Government have done any idea that there would have been a huge increase in spending under Labour—there simply would not have been.

On maintenance, there is an idea that the efficiencies implemented by the Environment Agency might have affected the readiness of the defences. Those defences, in which we and all Governments have invested over many years, were in a condition that enabled them to defend those properties, but obviously we need to look at where further flood defences could provide protection on a cost-benefit basis so that we can get the best value for such investment. That is why I am pleased we could announce £344 million in the coming financial year in investment in new defences, as well as the £130 million announced to ensure that we get our existing defences back up to where they need to be following recent events.

[Lilian Greenwood]

I want to ask the Minister for some clarification on spending on repairs and resilience on the rail network in the south-west. Will the money for extra resilience at Dawlish, for example, come from existing budgets, or are we talking about new money from central Government?

[Dan Rogerson]

We need schemes before we can talk about how they will be funded. The £130 million was for flood defences and coastal defences that have been impacted by recent events.

I am happy to respond to the right hon. Member for Exeter and the hon. Member for Brent North with my own views on climate change, which are on the record. I am convinced that we are seeing changes in the weather. As parliamentarians, we have all had such advice. It is difficult to draw direct links as a result of particular events, but we can look at trends and the changes that are happening, the advice from the Met Office in recent weeks about weather patterns over the Atlantic and so on, and what has driven them. That gives us cause for concern and I am personally convinced that there is a man-made element to such events, which is why the Government continue to take forward at international and national level a number of measures to decarbonise the economy and make progress on mitigation, as well as on the adaptation works in which my Department is involved.

Several hon. Members made points about land management. That is crucial, but I agree with my hon. Friend the Member for Tiverton and Honiton (Neil Parish) that we need to strike the right balance with food security and a thriving farming sector in upland areas and throughout the country. We have heard the concerns of the National Farmers Union. We do not want to hear the message that we should flood the farmland and give up on it. We can undoubtedly make a contribution through land management practices.

I am aware of the project on Exmoor and I know that South West Water is proud of its contribution. The right hon. Member for Exeter was kind enough to mention that the Department had been involved as well. Were the hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, here, no doubt she would be talking about the slowing the flow project at Pickering—we have heard a great deal about that—in which the Department has also been involved.

We take seriously the huge potential to do more to retain water through land management, but, on dredging, the Somerset levels is a man-made environment. Those rivers do not function in the same way as many other catchments, because they have been raised above the level of the surrounding land, as well as redirected and rerouted. We are looking at maintenance and I am chairing the action group on the Somerset levels, which the Secretary of State has challenged to come up with the action plan. Some will be long-term issues, but others will be for the short term. We have already announced that dredging will take place this year to deal with this. The point about the barrier for the River Parrett is a good one. The barrier will allow better management for the Tone and the Parrett and that whole catchment. That work is under way.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris) was passionate in her defence of her constituents. She was right to say that that current rail link is crucial. There is a huge population along the south coast of Devon, so it is important to maintain those rail links. However, I represent North Cornwall, which does not have a single railway station. I am sure that if resilience could bring rail travel closer to my constituents, they and I would welcome it. We heard from my hon. Friend the Member for South West Devon on several of those possible outcomes as part of a resilience solution and I look forward to seeing the work on that.

I am grateful to my hon. Friend the Member for South Dorset (Richard Drax) for the way in which he gave up his time to take me around affected parts of his constituency. We visited the very pub—the Cove House inn—to which he referred. The points he made about fishing and coastal industries are important. I have had time to visit, with the Deputy Prime Minister, fishermen down at Porthleven in the St Ives constituency and also spent time last week at Padstow with fishermen from my part of the world, particularly those lobster and crab fishermen who have lost so much gear, as my hon. Friend described, or found that their gear, if recovered, is crushed and no longer useable.

The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Camborne and Redruth (George Eustice), is looking at those issues to see what can be done to support such fishermen. In the meantime, the fisheries local action groups—FLAGs—have European fisheries fund money. I have talked to the project in Cornwall and there may be help under existing schemes.

[Sheryll Murray]

Does my hon. Friend agree that FLAGs operate under strict European rules? Replacement of fishing gear would not be included in that funding.

[Dan Rogerson]

I am being tempted into a quite local issue, but the discussions I have had suggest that help may be possible. I also draw attention to the fact that a number of banks have said that they will make interest-free loans to affected businesses. That may be part of the solution to allow people to get back up and running to trade again, not only in fishing, but across a variety of trades.

The Government have set out business recovery schemes, as well as schemes to help people make their homes more resilient. I am working closely with my colleagues in the Department for Communities and Local Government on how people access those funds and we will make further announcements. The Department for Business, Innovation and Skills is making available an action line that businesses can contact for help and advice on how they take things forward.

This has been a terrible period of weather events throughout the country, from the east coast in early December to, as we have heard today, the south-west. The Government remain committed to spending the money we need on flood defences for the future. We will continue to monitor our response to improve on that. I very much welcome the huge efforts that all the agencies, volunteers and communities made to respond to those events. I know that right hon. and hon. Members will continue to discuss those issues with me over the coming weeks.

Motorsport Tyre Manufacturing

Wednesday 26th February 2014 Westminster Hall

11:00

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a privilege to serve under your chairmanship, Mr Hood.

Queen Victoria was on the throne when the Dunlop Motorsport factory first produced tyres. The factory has 125 years of remarkable history. To this day, it produces 250,000 tyres a year, including vintage tyres—it still has the technology to produce wooden wheels—race tyres and the latest, state-of-the-art tyres for motorsport. The factory also has a remarkable work force. They are highly skilled, and sons and daughters have followed their mothers and fathers there over the generations.

[Mr Jim Hood (in the Chair)]

Order. Will Members please leave the Chamber quietly instead of having a chat during the debate?

[Jack Dromey]

I met one particular constituent in Kingstanding. He spoke about how he had worked for the factory for 20 years, his father-in-law had worked there for 42 years and his grandfather for 40 years—more than 100 years of service, all told.

When I was elected, my first priority was the future of the Jaguar plant, which was doomed to close. I worked with Tata Motors and the new management, and six months later came the historic announcement by Tata of its commitment to Britain and to Birmingham. Subsequently, we have seen Jaguar Land Rover become a world-class success story, with the Jaguar plant in my constituency now secure for the future.

The plant needs to expand, so Jaguar bought the land on which the Dunlop factory is located. Dunlop could have bought that land but declined so to do. A year ago, therefore, we swung into action and engaged with the company, with Birmingham city council and with the Homes and Communities Agency. I thank Sir Albert Bore, the leader of the council, and the Homes and Communities Agency for the way they worked with the company to identify a site but three miles from the current site in Erdington, at Aston advanced manufacturing hub.

Indeed, on 24 July Sir Albert Bore wrote to Dunlop, saying that there was sufficient land available at a competitive price and that the council would assist with a package to aid relocation of the factory. There was no answer. In parallel, I met senior management of the company three times over a nine-month period, together with the unions representing the work force, the GMB and Unite. On each occasion I asked whether the company would agree to look at alternatives in Birmingham. There was no answer.

In November I wrote to the global chief executive of Goodyear, Rich Kramer, who is based in Ohio in the United States of America, and asked, “Would you look at alternatives for remaining in Birmingham?” There was no answer. I then approached Jaguar Land Rover, and asked whether it would be prepared to extend Dunlop’s lease to allow Dunlop time to build a new factory and relocate. Jaguar Land Rover said to me, “Jack, we can’t get an answer.” However, it agreed to extend the lease by a further three months. There was still no answer from Dunlop.

I then asked the Secretary of State for Business, Innovation and Skills to intervene, and he did so. I cannot praise him too highly for the steps that he took. He convened an urgent meeting with the chair of Goodyear Dunlop in Britain and Ireland, Erich Fric, on 30 January. Seven times I had to ask, “Will you look at options to remain in Birmingham?” The first six times, there was no answer. Eventually, on the seventh occasion, the chief executive said, “Yes, we will.” The Business Secretary pushed the button straight away for a meeting, which took place the following day, between civil servants from the Department for Business, Innovation and Skills, Birmingham city council, the Homes and Communities Agency and UK Trade & Investment. The people at that meeting identified three proposals for Dunlop to relocate in Birmingham, and said that they would put together a package to assist that relocation.

A meeting was scheduled with Dunlop for the following Friday. We thought that at last it was going to do the decent thing and look at alternatives. However, but four days after that meeting, on 3 February Goodyear Dunlop announced its intention to cease manufacturing in Birmingham. In my 40 years in the world of work, I cannot remember any employer acting with such cavalier contempt towards a loyal and long-standing work force. A decision had been made 3,600 miles away, in Ohio, when the factory could have moved but 3 miles and remained in Birmingham.

Dismay has been expressed throughout Birmingham. The city has a great industrial history and the Dunlop factory in Erdington has been a great part of that history. Dismay has also been expressed by the £9 billion motorsport industry. Dismay has been expressed at the highest levels, including by our Prime Minister—I thank the Prime Minister for his intervention, in which he urged Goodyear Dunlop to look seriously at alternatives so as to remain in Birmingham.

Dismay has also been expressed by the reputable Dunlop, Dunlop Aircraft Tyres. Its factory is also in my constituency, and is mercifully no longer owned by Goodyear. It has issued a press statement, and its chairman, Ian Edmondson, could not be clearer: whatever Goodyear does with the motorsport factory, Dunlop Aircraft Tyres is committed to Birmingham, will invest in Birmingham and will grow its business in Birmingham—what a contrast with Goodyear Dunlop motorsports. I thank him for what he has said and done. I also thank the Birmingham Post and the Birmingham Mail for their outstanding championing of the cause of the motorsport factory. They have stood up for Birmingham.

Dismay has been expressed in those ways, but what has been particularly heartbreaking is the dismay expressed by the work force. I will quote from one of the many e-mails I received shortly after the announcement was made. This particular individual has worked in the factory for nearly 30 years. He said:

“To be cast aside like a spare penny is heartbreaking and gut wrenching. I feel physically sick writing this, but feel our voices and our perspective of the situation have not been heard. I drove home today and pulled up on my driveway not even remembering how I got here. My brain is doing somersaults, not sure I’ll sleep tonight knowing I’ve got to get up at 5:00 and somehow drag myself back to the place that used to feed and clothe my family. A place I used to be proud to say I worked. A place that no longer needs my services after years of hard work and dedication, commitment and loyalty…the same company knows none of the above for me and my work mates.”

I have had so many other approaches of that kind, including one from a daughter who was absolutely distraught about her father. He is in his 50s and has worked at the factory for 25 years. He is not well, and his daughter said to me, “Jack, I fear for the future for him. I don’t know what he is going to do. He is in despair.”

It is not just dismay that has been caused: there is also the fear expressed by the work force. I have had e-mail after e-mail and approach after approach from people expressing their dismay but saying, “Please don’t identify me.” In the words of one:

“I’m a Dunlop motorsport employee and would really like you not disclose my contact with yourself as it will probably give good reason for them to dismiss myself”.

E-mail after e-mail, approach after approach, call after call has said exactly the same thing.

Birmingham and its workers will not be intimidated. Their message, our message, and the message of this House and of our Government—I pay tribute once again to the role the Government have played—is abundantly clear: Goodyear Dunlop has both a moral and a legal responsibility to look at the alternatives to closure that are on the table. My message to Goodyear Dunlop today is that even at this stage it should sit down, do the decent thing, engage, look at alternatives allowing it to remain in Birmingham, and not betray Birmingham and Britain.

[Richard Burden (Birmingham, Northfield) (Lab)]

rose—

[Mr Jim Hood (in the Chair)]

Order. I must have notice if hon. Members wish to speak and I have received no notice from the Minister or the hon. Member for Birmingham, Erdington (Jack Dromey) that the hon. Member for Birmingham, Northfield (Richard Burden) wishes to speak. Without that notice, the hon. Member for Birmingham, Northfield cannot speak, unless the Minister and the hon. Member for Birmingham, Erdington consent.

[The Minister for Skills and Enterprise (Matthew Hancock)]

I am content.

[Jack Dromey]

Likewise.

11:10

[Richard Burden (Birmingham, Northfield) (Lab)]

I apologise, Mr Hood. I notified the Speaker’s Office, the Minister and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) that I wanted to speak. I apologise that the message did not get through. I thank the Minister and my hon. Friend for allowing me to say a few words because the matter is very important to Birmingham, and I congratulate my hon. Friend on securing the debate.

I want to speak briefly about Dunlop’s relationship and importance to Britain’s motor sport industry. It is an industry in which we lead the world with eight of the 11 Formula 1 teams based in the UK, and Dunlop has been part of that industry. The premier motor racing championship in the UK is the British touring car championship, which is sponsored by Dunlop. It is a proud partner and we are proud to have it as a partner in that championship. However, although Formula 1 and the British touring car championship are at the top of the motor sport tree in the UK, no tree is healthy if its roots are not healthy. Dunlop has been and is important to the grass roots of motor sport because the specialist tyres that are produced in Birmingham are vital to that series continuing.

In a former life, I did some motor sport with the 750 motor club, which was typical of the grass-roots motor sport scene in the UK. Its championships often rely on Dunlop tyres. If Dunlop leaves the UK, will those specialist tyres that are manufactured on a small scale continue to be manufactured here? I hope they will, but there is doubt about that, and I am not the only one to have that doubt. Steve Neal, managing director of Rimstock plc, a winning team in the British touring car championship—the Honda works team—has voiced precisely those fears if Dunlop departs from Birmingham.

Echoing my hon. Friend, I too appeal to Dunlop and Goodyear. If they continue to support the motor sport industry, which has been good for their company and its profile, as well as its tyres being important to the industry, why are they leaving Birmingham? Alternative sites have been offered, and three have been developed in detail. There is even a site at Longbridge in my constituency if they prefer that. There are all sorts of options for Dunlop, so why leave the epicentre of the global motor sport industry, which is in the UK?

I add my thanks to Ministers for their support in this campaign, but the focus must be on Dunlop. The arguments against leaving are clear and the alternatives that have been offered are clear, but more can be explored if that is wanted. The question is: why is it doing what it is doing?

11:13

[The Minister for Skills and Enterprise (Matthew Hancock)]

Thank you, Mr Hood, for your flexibility and chairmanship. At this stage, the Minister normally congratulates the hon. Member who has secured the debate, and I do so wholeheartedly not only on that but on his approach to the issue. The campaign is truly cross-party work between local Members, the Government, the Secretary of State for Business, Innovation and Skills, the Prime Minister, local BIS officials in the west midlands and local authorities who are working to obtain a positive resolution in difficult circumstances.

The central argument that the UK is a leading player in motor sport is important. Around 4,500 companies are connected with motor sport and they employ more than 40,000 people, with around 40% of the world’s high performance motor sport engineers in the UK. As the hon. Member for Birmingham, Erdington (Jack Dromey) said, eight of the 11 Formula 1 teams are based here, and last year 17 of the 19 races were won by British-built cars. Britain has a cluster of motor sport expertise. Dunlop’s long and proud history on its Birmingham site goes back to 1902, and it sells some 300,000 bespoke tyres around the world. Those exports from Birmingham are important, and we do not want them or the skilled work force to be lost.

The hon. Gentleman said that the Prime Minister has written to Dunlop. We are urging it to look again at a UK option during this period of statutory consultation. We are working with the council and BIS locally in the west midlands, and with the company to try to persuade it to take up options. Possible new sites have been discussed and financial aid remains on the table—I stress that. The final decision is a commercial one for Dunlop, but we are working extremely hard to try to retain its presence here in the UK.

The hon. Gentleman referred to Goodyear Dunlop’s moral and legal responsibility. We are trying to ensure that its commercial decision will be to remain in the UK. This debate has demonstrated the full-throated support of the Government and local Members and it has been an opportunity for us all to reiterate that support.

If the company decides to proceed with the proposed closure, the Government will ensure that the people affected will receive the best possible support to help them to find new jobs. They will do so with Birmingham city council, which is engaged in case that happens. Goodyear Dunlop has confirmed that it remains committed to the UK through its Tyre Fort sales and distribution centre in Birmingham and the manufacturing plant in Wolverhampton, which together employ around 700 people We remain hopeful that we can work with the company to retain motor sport research and development in the west midlands.

Whatever the outcome, the situation with Dunlop motor sport should not be allowed to overshadow the wider success of the automotive industry, which the hon. Member for Birmingham, Erdington mentioned. The plant is next to the Jaguar Land Rover plant, which is a great symbol of the automotive industry’s renaissance. There has been striking growth in recent years with a sales increase of 19% in 2013 to more than 425,000 vehicles, and revenue up 17%. In September 2013, JLR announced plans to create 1,700 more jobs in Solihull as part of a £1.5 billion investment.

JLR, the supply chain and others tell a positive story, which reiterates that the UK, and particularly the west midlands, has a cluster of some of the most advanced automotive skills in the world. Development in most areas is positive and moving forward. The Government’s commitment at all levels—local and national—is very clear, and I hope that that message goes out from today’s debate, not least because ensuring that we have a high-productivity automotive sector is a big opportunity for a future with great potential. However, that does not make this specific decision any easier. We are playing our part to try to bring a positive solution, and both immediately and in the medium and longer term, we are absolutely committed to doing everything that we can.

The Secretary of State for Business, Innovation and Skills has put personal time and commitment into trying to bring a positive outcome. We are doing everything we can, and I hope that we can continue to work with the hon. Member for Birmingham, Erdington and colleagues from across the west midlands to try to make an offer that is as positive as possible, and communicate that to Goodyear Dunlop, while, with realism, ensuring that we are prepared should the proposal go ahead. I look forward to working with colleagues in Government and across the House to do all that we can to keep this great and historic production facility here in the UK.

11:21

Sitting suspended.

Iran (Joint Plan of Action)

Wednesday 26th February 2014 Westminster Hall

[Hywel Williams in the Chair]

14:29

[Dr Matthew Offord (Hendon) (Con)]

It is a pleasure to serve for the first time under your chairmanship of a Westminster Hall debate, Mr Williams. I am very grateful to have the opportunity. The issue of Iran and, indeed, of the whole middle east, is often shrouded in some secrecy, so, in the interest of transparency, I draw hon. Members’ attention to what I have submitted to the Register of Members’ Financial Interests in the past.

On 24 November last year, the world woke up to the news that a deal had been reached between the permanent five members of the UN Security Council plus one—the UK, the US, France, China, Russia and Germany—and Iran. A joint plan of action was the outcome of weeks of hard negotiation. The deal was revealed to be the fruit of years of US-Iran secret negotiations, alongside a decade of public Iranian diplomacy following the revelation of a wide-scale uranium enrichment programme. The P5 plus 1 countries and Iran concluded an interim six-month agreement, known as a joint plan of action, to restrain Iran’s nuclear programme, in exchange for limited sanctions relief. The deal is the interim first step towards a full agreement within six months to address comprehensively the international community’s long-held concerns that Iran’s nuclear programme is intended for military purposes. The agreement will be in effect for six months—it started on 20 January this year—during which time the P5 plus 1 powers will attempt to forge a conclusive, final-status agreement that will end the nuclear impasse.

We—or certainly I—have concerns about the agreement. I should start by saying that the interim nuclear agreement does not resolve international suspicions. It merely suspends some of the most immediately concerning aspects of Iran’s programme, pending a more comprehensive agreement. However, there are further serious concerns about the agreement. Some believe that it grants Iran exactly what it wanted—both a significant easing of sanctions and preservation of the most significant parts of its nuclear programme, including those with a military aspect. The agreement allows Iran to continue enriching uranium and retain all the centrifuges, and it is not required to dismantle the uncompleted heavy water research reactor at Arak, which has the potential to produce plutonium when completed. In effect, the agreement allows a plan B route for nuclear weapons in that country.

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

I congratulate my hon. Friend on obtaining the debate. Does he agree with me and share my concerns that Iran could use this as a way of increasing its military capability and increasing its alleged sponsorship of terrorism throughout the region?

[Dr Offord]

I thank my hon. Friend for that intervention. That is certainly one of my significant concerns, and I will ask my right hon. Friend the Minister to comment on it when he sums up the debate.

It is also of great concern to me that the P5 plus 1 have tacitly recognised Iran’s right to enrich uranium, something that has been rejected by the international community for many years. In essence, the deal eases the pressure on Iran’s economy in return for minimal concessions that fail to curb the nuclear ambitions of the country. The interim deal has unravelled an internationally imposed sanctions regime that took years to enforce and was having the desired effect.

The ultimate objective is to prevent, on behalf of many countries, a nuclear-armed Iran. The repercussions of that could be disastrous, not least because Iran has threatened to destroy the state of Israel, but also because it remains the world’s leading financier of terrorism, and has the potential to provoke a major regional power struggle and arms race.

For the rulers of Iran, this is just another chapter in a dangerous game. Iran has a long history of exploiting international talks to buy time and further advance its nuclear programme, and the fear remains that this agreement is yet another example.

On Monday, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs updated the House on the progress of the E3 plus 3 and Iran talks. He reminded the House that the challenges to the success of the talks remain considerable and that a

“comprehensive solution must address all proliferation concerns related to Iran’s nuclear programme.”—[Official Report, 24 February 2014; Vol. 576, c. 29.]

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

I congratulate my hon. Friend on securing the debate. Does he agree that the fact that Iran continues to support terrorist activity—Hezbollah and Hamas—and to support attacks on coalition forces in Afghanistan puts into perspective its so-called peaceful aspirations in the area?

[Dr Offord]

My hon. Friend, like my hon. Friend the Member for Ilford North (Mr Scott), has mentioned something that I hope to come on to in my speech. It remains a great concern that, while Iran is engaging in the process of reconciliation through the talks and the agreement, it is also engaging in activities not only in places such as Syria, Afghanistan and Iraq, but in places such as Lebanon, combining forces with Hezbollah and others.

[Mr James Clappison (Hertsmere) (Con)]

I, too, congratulate my hon. Friend on securing the debate. Does he share my concern at the reports coming out of the area that only in recent days Iran has been stepping up its military and material support, and the provision of personnel, for the Bashar al-Assad regime? Would it not be strange for us to be granting new favours to the Iranian regime and helping it economically when it is supplying that terrible regime, which is slaughtering its own citizens?

[Dr Offord]

I thank my hon. Friend for that intervention. That is another issue I intend to raise. The fact that we are seeking to allow a country greater economic freedoms that in turn allows it to support terror in others parts of the region is of great concern. That seems to act counter to the things that are being said by President Rouhani and others in that country.

[Martin Horwood (Cheltenham) (LD)]

I, too, congratulate the hon. Gentleman on securing the debate, which is very timely, but does he not accept that the purpose of a sanctions regime, most of which is still in place, is to incentivise a change in attitude? Have not we seen that change in attitude since the election of Hassan Rouhani as President of Iran, and should not that be encouraged, not least to encourage further negotiations and positive engagement on the subject of Syria?

[Dr Offord]

I genuinely thank the hon. Gentleman for his intervention. He demonstrates that the interventions so far today have not been planted questions, because he has challenged me on what I am saying. I have to disagree with him. I cite as evidence the fact that the number of executions in Tehran and Iran in January last year was actually lower than the number of executions since the election of President Rouhani, which seems to indicate a more hard-line stance towards opposition in the country. In fact, the talks are more likely to disguise what is really going on there.

[Martin Horwood]

I am grateful to the hon. Gentlemen for giving way a second time so quickly, but that does not relate to the nature of the joint plan of action, which is precisely related to the nuclear programme. The commitments that Iran gave and the announcements that it made in that were very important. Surely he recognises that that represents progress of a kind, which should be encouraged.

[Dr Offord]

If I have not convinced the hon. Gentleman so far, I hope to do so later in my speech. I am not entirely convinced by what he says.

Let me return to the Foreign Secretary’s statement on Monday. What concerned me most was what he did not say. I hope that the Minister, in summing up the debate, can answer at least three specific concerns, including, first, how Iran’s nuclear programme, which includes a military dimension, will be addressed, as the interim agreement fails to address it. Secondly, I would be interested to learn what reassurances he can give that the final agreement will address the technical aspects of Iran’s nuclear programme, including the dismantling of all existing advanced centrifuges that accelerate breakout time; whether the International Atomic Energy Agency inspectors will be granted unfettered access to all Iran’s nuclear facilities, including those that are being operated secretly; and what will happen to Iran’s existing stockpile of 3.5% enriched uranium.

Thirdly, what assurances can the Government give that the interim agreement will not simply unravel the international sanctions that have been imposed and that took years to be introduced, giving rise to a perception in the country that Iran is being rewarded for coming to the negotiating table while continuing to inflame tensions in the whole middle east, specifically in Lebanon, Syria and Israel, and while procrastinating on the fundamental issue of advances in its nuclear programme?

Before we get to that point, I want to take a few moments to outline Iran’s nuclear programme and the problems I anticipate. It is widely believed that Iran’s nuclear programme has significantly advanced in the past five years. Continuing to defy international pressure and binding UN Security Council resolutions, Iran has actively enriched uranium to 20% fissile purity—a level that has no credible civilian purpose. Without any additional sanctions being imposed, Iran has been able to continue producing uranium enriched to 90% purity, which brings it closer to weapons grade. The most difficult and time-consuming part of the nuclear process is, therefore, already complete. The IAEA estimates that Iran now has 9,000 kg of low-enriched uranium, an amount that experts say could be enough for four bombs if it was refined to 90% fissile concentration.

Iran also possesses as many as 18,000 centrifuges, including more than 1,000 new models—the IR2m—which are far more efficient and can provide bomb-grade uranium two and a half times faster than the previous model. A heavy water reactor has been constructed outside the city of Arak, which offers the possibility of a new pathway to a bomb using plutonium once it goes online. That is in addition to the Natanz uranium enrichment facility, which was built in secret and discovered in 2002; the Fordow enrichment facility, which was also built illegally and confirmed to be in existence by Iran in 2009; the Parchin facility, to which the IAEA is seeking access after evidence emerged that Iran has tested nuclear triggers and high explosives that could be used in nuclear weapons; the Bushehr nuclear power station, which is operated with external assistance; and the Isfahan nuclear research facility, which has the capability to process uranium yellowcake into a gas for enrichment.

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

I congratulate my hon. Friend on securing the debate. I heard the comments of the hon. Member for Cheltenham (Martin Horwood) regarding a change in behaviour. However, my hon. Friend has just mentioned the Arak heavy water facility, which is perfect for producing weapons-grade plutonium. On 6 February, I asked a question in the House, to which the Minister responded:

“we remain concerned that Iran intends to develop the facility to provide a plutonium route to a nuclear weapon. Iran has not clarified how it would use the plutonium produced”.—[Official Report, 6 February 2014; Vol. 575, c. 356W.]

Despite the interim deal, the fact remains that Ministers are concerned. We should adopt the position of the Canadian Foreign Affairs Minister, who has said that

“Iran has not earned the right to have the benefit of the doubt.”

[Dr Offord]

I thank my hon. Friend for that intervention. He has asked a question, as identified by the House of Commons Library, on the effect of the P5 plus 1, Iran and the joint plan of action, and the continuing manufacture of new centrifuge devices. We know that the technology, which has many applications, continues to be used, but we do not know for what purpose. That remains a great concern, and I do not believe the joint plan of action addresses it.

On Iran’s agreement to freeze the enrichment and halt the production of uranium, Iran has halted the installation of new enrichment centrifuges and has ceased the installation of new components at the Arak reactor. It has allowed the IAEA to make inspections at Natanz, Arak and Fordow. I acknowledge that the regime has granted the international community some concessions. We must be aware, however, that in return, the P5 plus 1 agreed to provide £6 billion to £7 billion in sanctions relief, of which roughly £4.2 billion would be oil revenue frozen in foreign banks. The P5 plus 1 allow temporary relief on some sanctions, including trade in gold, precious metals, petrochemicals, auto parts and aircraft parts. The P5 plus 1 have also agreed not to impose new nuclear-related sanctions for six months during the agreement.

Although the interim accord interrupts Iran’s nuclear progress for the first time in nearly a decade, it requires Iran to make only a modest draw-down payment on the central problem. Iran has benefited from disproportionate sanctions relief in exchange for cosmetic concessions that it can do away with in a matter of weeks. It has been rewarded with sanctions relief despite remaining unbowed in its demand to continue uranium enrichment, which is the root of the international community’s concern. Most importantly, the deal fails to dismantle many of the military aspects of Iran’s nuclear programme. Without the requirement to dismantle a single centrifuge, Iran will remain a threshold military nuclear power. It will retain the capability to break across that line at any time it chooses.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

Does my hon. Friend dispute the national intelligence estimates from the United States of 2007 and 2012, which directly contradict his proposition that Iran is on the verge of being able to break out in such a way? The United States national intelligence estimates are major pieces of work, and they are not done lightly. Does he dispute them?

[Dr Offord]

Yes, I dispute them. I am not a chemical engineer or a nuclear engineer, but on the basis of my research and the evidence I have read, I dispute those estimates and I maintain that Iran is on the verge of making a breakthrough. As the shadow Foreign Secretary, the right hon. Member for Paisley and Renfrewshire South (Mr Alexander), said in the House on Monday, with as many as 10,000 centrifuges in operation already, Iran retains the capability to break out and produce enough weapons-grade uranium for a nuclear weapon in as little as two months. The deal does not roll back the vast majority of the advances that Iran has made in the past five years, which have drastically shortened what nuclear experts call its “dash time” to a bomb—the minimum time that it would take to build a weapon if Iran’s Supreme Leader or military decided to pursue that path.

Most concerning of all, the world’s leading powers have tacitly recognised Iran’s right to enrichment, which has been the Islamic Republic’s key demand for many years. The interim agreement states that the permanent deal will involve

“a mutually defined enrichment program with mutually agreed parameters”,

but the deal abandons the demand made by the six United Nations resolutions that Iran must halt all enrichment. That may undermine confidence in global non-proliferation norms. Iranian state media carried boasts by, among others, President Hassan Rouhani and Foreign Affairs Minister Javad Zarif that the US had caved in on its long-standing position and recognised Iran’s right to enrich. President Rouhani said:

“No matter what interpretations are given, Iran's right to enrichment has been recognised.”

He went on to say:

“"Do you know what the Geneva agreement is? It means the superpowers’ surrender to the great Iranian nation. The Geneva agreement means that the world accepts [Iran’s] civil nuclear technology, which we achieved through the efforts and the sacrifice of our young scientists”.

The agreement does not stop Iran enriching uranium to a low level of 3.5% or compel it to dismantle any of its existing centrifuges, which can be used for military purposes. Iran can continue to enrich uranium with its 10,190 operational IR1 centrifuges. They are in addition to 8,000 machines that have been installed but are inactive. Iran can also continue to build new centrifuges to replace those that wear out.

The situation has not been lost on the Iranian rulers. In January this year, President Rouhani said that there would be no destruction of existing centrifuges “under any circumstances.” Iran’s Foreign Affairs Minister said in December last year:

“The structure of our nuclear program has been maintained and the 20 percent enrichment can be resumed in less than 24 hours”.

A month later, he said:

“We did not agree to dismantle anything”.

In January, Iran’s Parliament introduced a Bill to step up enrichment to the threshold of 60% fissile purity. That would put Iran on the technical verge of 90% fissile purity, which is enough for the core of a nuclear bomb. At least 218 of the Iranian Parliament’s 290 members have expressed support for the measure. The Bill’s supporters say that uranium refined to 60% concentration would be used to fuel nuclear-powered submarines. Some analysts have speculated that the Iranian Government might be using Parliament as a bargaining tool in nuclear talks with the P5 plus 1, because they would have no choice but to obey such a Bill if the Parliament passed it.

The deal also leaves untouched Iran’s portfolio of 1,008 installed advanced IR2m centrifuges, which can speed up break-out times using 3.5% enriched uranium. This month, Iran revealed that it had developed a new generation of centrifuges that are 15 times more powerful than those currently in use, and Iranian officials have stated that the centrifuges do not violate the joint plan of action. Although enrichment using those machines has not started, the vast majority of them are fully installed and under vacuum, which means that Iran could quickly begin feeding natural uranium into those cascades and more than double its enrichment capacity.

Centrifuges are not the only concern. Iran is in the process of constructing a 40 MW heavy water research reactor, for which there is limited peaceful civilian purpose. When it is operational, that facility at Arak will be able to produce plutonium, which is one of two substances that can form the core of a nuclear weapon. Iran is not required to dismantle the incomplete heavy water research reactor or convert the plant into a light water reactor, which would be less useful for military purposes.

Under the joint plan of action, Iran agreed to freeze progress on the Arak heavy water research reactor and not to commission it or transfer fuel or heavy water to the site. It also agreed not to produce or test additional fuel or install remaining components. The interim deal does not explicitly prevent Iran from manufacturing components offsite for Arak’s nuclear reactor that could then be installed later. Iran claims that its purpose is only to make medical isotopes and conduct research, but western countries believe that it could also produce plutonium, which is the plan B route to producing a full nuclear weapon.

The one mechanism we held over Iran was the sanctions, but the interim deal has unravelled the internationally imposed sanction regime that has taken years to enforce. Sanctions were having the desired effect, so why did we take a step back from a method that was working and put trust in a state that has given us no reason to assume that that trust will be guarded? However limited, the relaxation of sanctions will relieve the pressure that has brought Iran to seek an agreement, by giving direct financial relief and indirectly restoring confidence in the Iranian economy.

Many nations and companies—as well as the Iranians themselves—have interpreted the recent agreement as the beginning of the end of the sanctions regime. It is likely that a number of countries will apply pressure to resume trade with Iran, including its former key trade partners, such as South Korea, Japan, India and China. Within weeks of the interim deal, Iran’s petrochemical sector alone had appreciated by $9 billion—that is a capital gain of almost 40%, generated entirely by a new market psychology that bets on the end of sanctions. On top of that, Iran is already making efforts to recapture its dominant role in OPEC.

All of that goes to ensure that the agreement is rewarding Iran despite the fact that its long history of clandestine nuclear activities, support for international terrorism and repeat calls for the destruction of Israel are cause for legitimate trepidation and scepticism over its intentions. Although President Rouhani’s negotiating team has reportedly been more constructive in talks, supreme leader Ayatollah Khamenei has the final say on major issues, including national security and Iran’s nuclear programme. Most worryingly, Iran continues to support terrorism in the region. It is a leading sponsor of state terrorism, providing financial and material support to extremist Islamist terrorist groups across the middle east, including Hamas, Hezbollah and insurgencies against allied forces in Iraq and Afghanistan.

Iran agreed to the deal as part of a long history of exploiting international talks to buy time and further advance its nuclear programme. The six-month timetable to reach a final agreement could be extended by a further six months by mutual consent. President Rouhani has previously spoken of Iran buying time to advance its nuclear programme. In 2004, he gave a speech to the Supreme Cultural Revolution Council, in which he explained how he was playing for time during the nuclear talks he was conducting with the EU3. He said:

“While we were talking with the Europeans in Tehran, we were installing equipment in parts of the [nuclear conversion] facility in Isfahan. By creating a calm environment, we were able to complete the work there”.

Answers to the parliamentary questions I have asked provide little assurance that the IAEA will ensure that inspections take place. Iran has agreed to the IAEA conducting only limited inspections at the main enrichment facilities at Fordow and Natanz. Its history of deception about its nuclear projects requires higher levels of accountability. Iran is not required to provide unfettered access to its full portfolio of nuclear facilities, including many underground and undeclared sites where the USA, Europe and Israel believe that hidden enrichment facilities might exist. It is not possible to rule out the existence of secret nuclear sites in Iran without it agreeing to allow the IAEA to conduct snap inspections anywhere beyond declared atomic installations under the agency’s additional protocol regime.

Iran is still not required to grant IAEA inspectors access to the nuclear-related Parchin site, a suspected weapons-testing facility, but it is required to declare all facilities containing nuclear material under its comprehensive safeguards agreement with the IAEA. Under the joint statement on a framework for co-operation between Iran and the IAEA, Iran has agreed to give the IAEA information on the 16 sites designated for the construction of new nuclear power plants, clarification about its announcement about new enrichment facilities, and information about all new research reactors. Fully verifying and monitoring Iran’s nuclear activities will require a level of co-operation and information-sharing between the IAEA, the western powers and Iran that is probably unprecedented for one country’s nuclear programme.

The overt military actions of missile development are also of concern. The interim agreement does not include a promise by Iran to abstain from pursuing work on ballistic missiles or weaponisation. UN Security Council resolution 1929 requires Iran to cease activity related to ballistic missiles capable of delivering nuclear weapons.

[Mr Clappison]

My hon. Friend is touching on a key issue. Does he agree that if we are to treat Iran’s protestations seriously, we must see progress being made on the ballistic missile programme?

[Dr Offord]

I agree with my hon. Friend. I am concerned about the fact that the agreement does not touch upon ballistic missiles and remains an opportunity for Iran to continue its programme—as President Rouhani said—in a calm environment, and to focus on its work and experimentation on such weaponry.

I am sure that your knowledge of ballistic missiles is better than mine, Mr Williams, but I can tell the Chamber that a nuclear weapons programme has three main components: the fuel, the warhead and the delivery system. Iran is free, in the coming six-month period of the interim deal, to continue with the missile and warhead-development activities to which my hon. Friend just referred. It has successfully test-fired two new domestically made missiles, including a long-range ballistic missile with radar-evading capabilities and a fragmentation warhead. It also test fired a laser-guided air-to-surface and surface-to-surface missile known as a Bina. The country already has long-range surface-to-surface Shahab missiles with a range of about 1,250 miles that are capable of reaching Israel and—indeed—US military bases in the middle east. The recent deal does not grant IAEA inspectors access to Iran’s Parchin military facility, which is a long-suspected location for nuclear-related weapons testing.

In conclusion, it is worth reiterating the questions that I would like the Minister to answer. Does he share my concern that limited processes and structures appear to be in place should Iran walk away from negotiations with the P5 plus 1 before a permanent nuclear deal is reached within the six-month period? Given its history of duplicity and procrastination over its nuclear programme, would the Minister agree that it is only right that there will be a degree of concern that Iran might abuse the interim deal merely to pocket the concessions and walk away?

A more receptive Iranian negotiating team is being welcomed internationally. However, Iran has not tempered its anti-Israel rhetoric, recently labelling Israel as the

“sinister, unclean, rabid dog of the region.”

Does the Minister understand why many of us think Israel should be concerned about the agreement? There are also concerns that the joint plan of action has green-lighted Iran’s right to enrich, or at least that it has done so according to Iranian interpretations. Iranian state media carried boasts by President Rouhani and his Foreign Minister that the international community had caved in. What assessment has the Minister made of such statements by Iran? Iran’s latest actions do not suggest that it is complying fully with the spirit of the joint plan of action.

Does the Minister share my concern that domestic production of advanced centrifuges, which further reduce break-out times, raises questions as to Iranian intentions? Under the joint plan of action, Iran retains its full portfolio of centrifuges. Would the Minister agree that any final agreement must seek to dismantle the bulk of Iran’s nuclear infrastructure? The interim agreement is undoubtedly asymmetrical in structure, with Iran merely freezing its programme while the international community chips away at sanctions. Does the Minister agree that that might influence whether Iran decides to abandon negotiations for a comprehensive deal over the next six months? Finally, does the Minister share my concern that the joint plan of action will result in billions of pounds of financial relief for Iran, enabling its continued ability to arm, fund and train its global terror network?

As the hon. Member for Cheltenham (Martin Horwood) said, it is right that the P5 plus 1 strive for a deal that reduces the threat of a nuclear Iran, but we must not agree to measures that have the potential to expedite such a scenario. A bad deal is worse than no deal at all. I look forward to the Minister’s response.

14:59

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Hendon (Dr Offord) on bringing this matter before the House for consideration. In introducing the debate, he has outlined the case for his concerns, which I share.

It is essential that Iran continues to follow the joint plan of action. The hon. Member for Hendon referred to it and to how it will work, which seems to be his major concern. It is essential not simply for the White House’s agenda or for our own agenda as the United Kingdom of Great Britain and Northern Ireland, but for the safety and security of the entire world. That is an issue that the hon. Gentleman spoke clearly about, and it is not an overstatement in any way, shape or form.

I would like to thank all those who have been working hard. I know that the Foreign Secretary and the Prime Minister have been energetic in trying to ensure that the plan is adhered to. I am aware of the delicate balance that has been struck.

I share the concern of the hon. Member for Hendon and further express my fear for the state of Israel in particular, which the hon. Gentleman mentioned a couple of times in both his introduction and conclusion. It is certainly my concern. One can understand why Israel feels threatened—because of the statements coming from Iran and because of the history and the build-up of people in that country. Also, Iran has supported terrorist groups, whether they are directly involved in Syria or elsewhere in the world.

The basis of the joint plan of action is that Iran will undertake and indeed not undertake certain measures and aspects, receiving help and support in return. Some of those measures ought to include human rights and how they treat minorities. That should also be part of the joint plan of action, and I wish to focus on that in the few minutes I have.

While some measures have been taken, such as a good-will gesture and the release from prison of some Christians, I have received reports from persecution.org that new arrests by the authorities could suggest in-fighting between the new president and Islamist hard-liners. There is still a power struggle in Iran, with people jostling for power and deciding who is going to be top dog.

Information provided to me, dated the beginning of February—just in the past few weeks—states that Hassan Rouhani began duties as President of Iran last August on a platform of pragmatic moderation. That was what he said he was going to do. At Christmas, frequently a season of fear and persecution, Rouhani sent good-will messages to Iranian Christians via Twitter and greetings to the Roman Catholic pope. However, those overtures came against reports of arrests, raids on Christians’ homes and the jailing of converts from Islam. While there was an outpouring of best wishes during Christmas, there were also the behind-the-door actions of the state police and some of those of Islamic belief.

While many observers see the contradiction as a lack of commitment to addressing western criticisms of Iran’s treatment of Christians, some religious freedom advocates say that it may also represent a power struggle as Rouhani slowly navigates Iranian political waters; he will need a good hand on the steering of that particular boat.

A senior analyst at Middle East Concern said that much of the good news coming out of Iran is the result of “token gestures” and that Christian leaders in Iran “remain sceptical” about the prospect of reform under Rouhani. Will the Minister indicate what feedback he is receiving? Can Rouhani deliver the change that he has said he will regarding human rights and equality in Iran? I would be keen to hear the Minister’s response. I know that the Minister has a deep interest in human rights and equality, so I look forward to his reply, which I am sure will have plenty of content.

The analyst also said:

“There are lots of conflicting signals…There’s been some positive rhetoric from Rouhani, and by and large it hasn’t been matched yet by his actions. Even if he wanted to pursue a more moderate agenda, he doesn’t necessarily have the power to do that”.

Perhaps that is the crux of the matter. We may have a gentleman who is perceived by the world as interested in bringing change, but can he bring change to the society that he lives in and tries to lead? I suspect that he does not have the power to do that. There could well be some power play involved between branches of the Iranian Government, and that power play taking place behind people’s backs is the one that concerns me most.

Even with the release of Christians, the Assemblies of God church in Ahvaz remains closed, and Iranian authorities have banned Pastor Farhad from conducting any church-related activities. Those are further indications from persecution.org of what is happening in Iran.

Other similar actions continue to raise warning flags with me, including Farsi-speaking attendees being told they would not be allowed in the church any longer due to fear of arrest. There is something fundamentally wrong when someone cannot go into their church for fear of arrest. We are fortunate; we can attend our churches on Sundays. We have the freedom of choice to go to any church we wish across the whole United Kingdom of Great Britain and Northern Ireland, which is not possible in Iran and other parts of the world.

Of all types of Christianity, believers from a Muslim background face the most persecution—I want to highlight them today—as well as Protestant evangelicals. There is relatively less pressure on the historical ethnic Armenian and Assyrian Christian minority, as long as they do not evangelise to Muslims. Therefore, if people just worship and do nothing else, they will be left alone, but if they want to tell others about the gospel, which is what it means to be evangelical and to be a Christian, they are threatened for that. Ethnic Persians are by definition Muslim, according to the state. Evangelism, Bible training and publishing the scriptures in Farsi are all illegal. What a contrast that is from our society and the freedom of religious individual thought that we have in this country.

Any Muslim who leaves Islam faces the death penalty. The regime’s focus is on those reaching out to converts, and even well established Christian denominations are not safe from harassment. Church activities are closely monitored, their members identified and taken note of. Often, action is taken as well. Again, the words that say, “Yes, you are safe. You can worship your God and go to church” have to be contrasted with the action that happens.

In conclusion, I would ask the Minister to do all in his power to encourage the Iranians to give freedom of religion to all in Iran, so that people of faith can meet without fear of recrimination. If that can be tied into the joint plan of action and obligations, making it even tighter than it currently is—as I sincerely believe that it can—I would ask the Minister to do his best to ensure that that happens, and to see it done as a matter of urgency.

15:07

[Mr James Clappison (Hertsmere) (Con)]

It is a pleasure to serve under your chairmanship, Mr Williams. I, too, congratulate my hon. Friend the Member for Hendon (Dr Offord) on securing this important debate. He also deserves congratulations for asking all the right questions in his well-informed and technical speech, which was a great contribution. He asked all the questions that have to be asked about the scientific and technical aspects of the negotiations with Iran, and I certainly back him in all his points.

I intend to speak only briefly. I want to make it clear that I support the actions being taken by our Government; the approach that has been outlined by my right hon. and hon. Friends; and the approach taken by my right hon. Friend the Foreign Secretary on the Floor of the House on Monday, with the realism with which he approached the issue, saying that there are many obstacles to be cleared. I support him in his ultimate intentions on the matter and in the way in which he is carrying them out. I also commend the Minister of State for the realism and hard-headedness that he has shown on the issue; he is absolutely right to do so.

In conducting the negotiations, if we really want to have any chance of bringing them to a successful conclusion, it is important not to get ahead of ourselves. It is fair to say, looking at the history of the matter, that we are dealing with a regime that has played for time; is extremely astute; and takes a long-term strategic view on prosecuting its interests. We need to be equally hard-headed in our approach.

Therefore, while I commend my right hon. and hon. Friends, I have concerns about what is happening in other quarters. I also fear that some people are getting a little ahead of themselves. I am concerned by press reports saying that Baroness Ashton is due to visit Iran next month. I suppose that Baroness Ashton, in a way, represents us all, as the European Union’s High Representative under the Treaty of Lisbon. I certainly have concerns about that, and I wonder whether that is sending the right signal at this stage of events.

I have three particular concerns. The first concerns the signal that the visit sends to the Iranian side about what they can get out of the talks and what they have to give up in return. I am keen on the principle, which should have been enunciated by the international community, that nothing is agreed until everything is agreed. I do not see how that principle is consistent with the actions of Baroness Ashton in going to Iran, and the message that that will send all around the world about the Iranian regime and the possibility of doing trade and opening up relations with it. I am worried about the signal that is being sent.

Secondly, I am worried about the signal it sends when Iran, as has been rightly said already by my hon. Friend the Member for Hendon, is so concerned in exporting terrorism and aggression throughout the region. It has a history of doing that in many parts of the region—most of all, at the moment, in the Syrian conflict. The Iranian regime is a key linchpin of Bashar al-Assad in his efforts to fight back against the Syrian opposition. The Iranian regime is the pillar for Bashar al-Assad as he goes into action and counter-attacks the Iranian opposition. We know that during the four years of the conflict, thousands of Iranian, Lebanese and Iraqi Shi’a militiamen have been sent into Syria to help Bashar al-Assad, and Iran has been helping to send them there. There is no doubt about it. It is widely believed that the Iranian regime has been responsible for the successes that Syria has had, resulting in the conflict coming to a stalemate.

It was reported at the weekend that Iran is stepping up its support for Bashar al-Assad, providing elite teams to gather intelligence and train troops. There have been other reports that Iran has been sending specialists in with the direct intention of helping the regime to survive. Analysts believe that this renewed support has meant that Assad feels no need to make concessions at the currently deadlocked talks in Geneva, because he thinks that things are going his way with the support that he is receiving from Iran. It therefore looks slightly strange for Baroness Ashton to be going to Iran to fly the flag when talks with Iran about its nuclear position are taking place in Vienna, and in Geneva roughly the same parties are taking part in talks about Syria, which are deadlocked because of the actions of the Iranians.

I do not think we should be sending a signal about the Iranian regime either directly or indirectly through our EU High Representative Baroness Ashton—not when that terrible conflict is still taking place, when civilians are still losing their lives, and when terrible means are being employed against them. I do not believe that we should be sending that signal at this time.

My third reason for not wanting to endorse the Iranian regime with a visit by the EU High Representative is because of the message it sends to people at home in Iran. I draw a careful distinction between the Iranian regime and the Iranian people, who are a constructive, creative people with a great culture and a great history. There is a big difference between them and their regime. I congratulate the hon. Member for Strangford (Jim Shannon) on his speech about the suppression of human rights in Iran. It is a cause that I have been particularly interested in, and I know there are grave concerns about human rights across the whole human rights piece in Iran.

Like the hon. Member for Strangford, I too have been interested in the persecution of Christians in Iran. What he said was absolutely right. People who try to change their faith or who try to promote their faith in any way in Iran are subject to terrible persecution. They are thrown into prison, their homes are raided and Bibles are confiscated. Hopes were expressed that the situation would change with the election of President Rouhani, but, for whatever reason—whether he is sending mixed messages or whether he is being undercut by conflict within the regime—there is no relaxation as far as the Christians are concerned. They are still languishing in prison for their faith, and in recent times we have heard terrible reports of four Christians being sentenced to 80 lashes for partaking of communion wine. That is since President Rouhani came to power.

I simply do not want the High Representative going to Iran to take part in discussions with the regime and endorsing it by visiting when human rights violations are taking place. We should take a much more hard-headed approach. We know that sanctions have been very effective against the regime. They have had a severe effect, and there must be concerns that a premature relaxation of sanctions would send the wrong message to the regime.

Not only is the EU High Representative Baroness Ashton getting ahead of herself, but others more widely seem to be getting ahead of themselves as well. We have seen reports of a French trade delegation of 100 leading businesses visiting Iran. Apparently, there is a German delegation in Iran this week. There are reports of a Greek delegation, led by the Greek Deputy Prime Minister, going to Iran. All that is going on when the talks have barely got going and we have no idea what the final settlement might be. One wonders what signal this sends to the Iranian side about what they need to do to get concessions in return. All the beneficial economic effects and the prosperity that flows to the regime as a result can be used by the regime, giving it more resources to support Bashar al-Assad and all the other activities taking place in the middle east.

I support hon. and right hon. Members in the course they have taken; they deserve our support. I simply ask them and everybody else—I know the hon. and right hon. Members have this in mind—to keep a tight hold on Iran and to keep in mind the objective of ensuring that it does not develop a nuclear capability. I have no doubt that Iran intends to develop such a capability. I am not remotely technically qualified to pass a judgment on how far it is on the road to acquiring one, but there can be little doubt that Iran is seeking to acquire such a capability. The rest of the international community think that. Why would Iran expose itself to sanctions if it did not have that intention in mind?

15:17

Sitting suspended for a Division in the House.

15:29

On resuming—

[Hywel Williams (in the Chair)]

Mr Clappison, had you finished your remarks?

[Mr Clappison]

As long as it is shown that I was saying that we must make every effort and use every endeavour to prevent Iran from acquiring nuclear weapons, I will conclude.

15:30

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I congratulate my hon. Friend the Member for Hendon (Dr Offord) on securing this debate. Iran is a topic that often needs a good airing. At this critical time, it is important that we give strong scrutiny to the Geneva accord agreed at the end of last year.

First, may I declare my entry in the Register of Members’ Financial Interests? I am chairman of the all-party group on Iran and have been for the past eight years. I have twice visited Iran—including recently, three or four weeks ago. I have also visited on a number of occasions the International Atomic Energy Agency in Vienna at the United Nations.

We always have to go back to the beginning on Iran. We have to remember that the nuclear programme for Iran did not start last Tuesday or last year; in fact, it started in the mid-1960s, when the Shah was in charge—funded by the United States, ironically. General Electric came to its aid, to develop the first reactor in the heart of Tehran. Iran has had nuclear ambitions, whether civil or military, for decades. They have been part of its psyche. It lives in a rough neighbourhood; it has rivalries that we can, perhaps, only understand as having similar aspects to those in the cold war and with the Soviet Union; and it is surrounded by ethnically and religiously different economic and military rivals. That has often driven some of its insecurities.

The history of the nuclear programme is long and sporadic and it has jumped, depending on which country has helped Iran. The Russians helped it build a reactor in the past, the United States has done so and I suspect that the North Koreans have, too. Certainly, other members of the international community have stuck their oars in. That is why there is a rather illogical, sporadic and often bizarre civil nuclear programme.

Iran is not the only country in that region to have a civil nuclear programme. The United Arab Emirates is developing one right now, as we speak. Many middle east countries have sought to acquire nuclear technology. The most striking examples are India and Pakistan, which developed in total secrecy a nuclear weapons programme that ended up in actual nuclear weapons. We in the west either chose not to know or did not seem to know.

The process goes on. It is not new. It has, unfortunately, become entwined with the Iranian psyche and its view of itself in the world. However, let us remember that middle east politics is often as much about rhetoric as about action. Throughout the 1980s, for example, at the height of Ayatollah Khomeini’s rhetoric against the country of Israel, Israel sold Iran nearly half a billion dollars’ worth of arms. In fact, Israel broke the UN sanctions on arms embargo to Iran and Iraq in that period. It suited Israel at that stage to ignore the rhetoric and to side with Iran against Iraq, while the west was unfortunately supporting Iraq, by supplying it with some pretty dubious methods.

We have to go forward. In 2001, Iran helped the west bring down the Taliban. We might remember the Lion of Panjshir, Ahmad Shah Massoud, who was the west’s favoured leader of the Northern Alliance—the man who was going to liberate Afghanistan on our behalf. The irony was that he was Iran’s man in Afghanistan. The Northern Alliance helped America and Britain in their targeting and intelligence gathering against the Taliban.

Throughout these processes, Iran has stepped forward, sometimes against its nature, but sometimes for its own self-interest, and it has often been rewarded by immediate rejection. The “axis of evil” phrase was used discended on Iran, despite its assistance to the British and Americans in getting rid of the Taliban.

Trust is the problem in much of this, whether in respect of the nuclear programme, human rights or exporting terrorism. The Iranians’ knowledge of Britain’s poor behaviour towards it in the last centuries is better than mine. The Iranians understand that we supported the constitutional revolution in 1906 and then undermined it, when we removed the democratic constitutional revolution, to put in a Shah, and then we moved that Shah when he became too friendly with the Nazis. Then we moved their Prime Minister in the ’50s and put in another Shah. They understand that we—the United Kingdom—play power games and that we are not to be trusted, in the same way that we, quite rightly, have every reason not to trust Iran in the near future.

We have not trusted Iran on its nuclear programme. It has hidden things and has certainly done its best. There is proof that, in 2003 and 2002, it acquired from the AQ Khan network—not funded by Iran, but by one of its regional rivals—military plans for a weapons programme.

Trust is failing on both sides. That has been the real issue. I do not argue with my hon. Friend the Member for Hendon that, really, at the heart of the Geneva accord, the issue is about trying to fix this trust and to see what steps we can take to build together. We will have to stick our neck out to build that trust. That is the problem. I understand; if I was living in Israel right now, I would be worried about that. It is not me under direct threat from Iran. In fact, British national interests and British security are not threatened by Shi’a Islam, but by Salafist Sunnis emanating from al-Qaeda. They are the people who will blow up our trains and tube stations. That is nothing to do with Iran; that is to do with other major players in the region, who are either tacit or have yet to deal with that problem.

If I was in Israel, of course I would be worried and rightly so. But I also recognise that, within Israel, there is a split about the extent to which the Iranians are rational or irrational and how much Iran really wants to do nuclear damage or blow up Israel. Meir Dagan, the ex-head of Mossad—not a boy scout organisation—said on the record that Iran is rational and that he does not think it intends to go to that next step.

Nevertheless, the situation is real and we should look at the facts and the evidence as they are presented. The first things that I look at are the national intelligence estimates of the United States, the first of which, in 2007, was made under George Bush. The estimates are put together by the National Security Council, the CIA and the Pentagon. President Bush was not known as a dove on any areas in the middle east, but the national intelligence estimate produced at the time said, “We do not believe—we believe they did previously—that they are now on the verge of a break-out”. That is an important document. It was dismissed at the time by the hawks, but in 2012, under President Obama, another one appeared that effectively reaffirmed that national intelligence estimate.

[Dr Offord]

I appreciate my hon. Friend’s counter-view on some of these issues. It is easy to talk about organisations presenting reports. I have found the 2012 Institute for Science and International Security report, containing information from former weapons inspectors, who disagreed with Binyamin Netanyahu at the UN General Assembly in 2012 and felt that Iran would have a nuclear capability within months. It is okay to say that certain organisations say that is not possible. Equally, it is valid to say that other organisations contradict that point of view.

[Mr Wallace]

I register the point, but these are not national institutes. This is the CIA and the Pentagon—okay, they do not have the best track record on intelligence, but they never gave the benefit of the doubt to the doves; they always gave it to the hawks. These are major national institutions—Government organisations—that share intelligence with Israel and all the other allies that we have, so they are certainly serious. It is important to look at that fact.

We should not pass over the grand bargain offered by Iran in 2003. The grand bargain was something that every hon. Member in this Chamber would have signed up to tomorrow. It was an offer by Iran to suspend enrichment; to join the additional protocol, with further and more intrusive inspection than even Britain has under the non-proliferation treaty; and to demilitarise Hezbollah. It was even to have gone as far as to recognise Israel, which many countries in the middle east, which may be against Iran but are not necessarily allies, still do not recognise. They may help Israel, but they still have not taken the next step. That grand bargain was rejected out of hand by the White House.

People sitting now in Iran would say, “Hang on, we offered all this and this was all thrown away”. That goes back to the heart of the matter. The trail of trust has been full of missed opportunities on both sides. We really need to try to rebuild it. I commend this Government, the Obama Administration and the P5 plus 1 for sticking their necks out.

I do not mind who visits Iran. I have been to Iran, but I do not approve of what the Iranians do to Christians, Baha’is or other minorities. I condemn that absolutely, but I believe that visiting Iran does not mean supporting Iran. If people criticise or propose policy against a country, it is a good idea for them to take time to visit that country. That is important. I do not sit around and get involved in debates on Israel because I have not been there. One day I might decide to do so, mainly because it affects other middle east policy that I might want to discuss. Going there is important.

[Jim Shannon]

I accept the hon. Gentleman’s logic. I might be reading it wrong, but is he saying that we need to go to a country to appreciate and understand it fully? I have never been to Israel, but I would say that I have a full appreciation and understanding of Israel and of how it feels threatened by many countries across the world. I have no less knowledge of Israel because I have not been there. Not going there does not lessen my enthusiasm for the state, which I feel is threatened. Does he accept that?

[Mr Wallace]

I accept that, but I would not support the hon. Gentleman if he criticised people who have visited Israel to find out. I do not think that can be a point of criticism. He is from Ulster, where I have spent a lot of time. In fact, I have sat down with members of the IRA. That does not mean per se that I supported the IRA when we were trying to negotiate a peace deal. People increase their knowledge by going somewhere and understanding it. They do not become a world expert, but they increase their knowledge. When we speak to normal Iranians or see at first hand the split between the Iranian Government, the different Ministries and the different politicians, we understand a bit more. We do not become an expert or an Iranian any more than we would become an Israeli if we went to Israel.

[Guy Opperman (Hexham) (Con)]

I apologise for not being present for the speech of my hon. Friend the Member for Hendon (Dr Offord), whom I congratulate on securing this debate. I am grateful to my hon. Friend the Member for Wyre and Preston North (Mr Wallace) for allowing me to intervene. I support the thrust of what he says. I have visited Israel with Conservative Friends of Israel, and going there benefits those who go. Any situation that establishes better relations between the west and Iran has to be the way forward if we are to have long-lasting peace in the middle east.

[Mr Wallace]

I totally agree. It is important that we understand that there is a prize to be had: stability, a resolution to the nuclear threat—if there is a nuclear threat—and a chance to build new alliances in the middle east. We cannot avoid the issues in Saudi Arabia, which seem to be ignored.

The hon. Member for Strangford (Jim Shannon) mentioned apostasy and the persecution of Christians. There are not many Muslim countries in the world that allow Christians to proselytise. Try taking a Bible to Saudi Arabia; Bibles can be taken to Iran. People might not be able to proselytise in Iran, but try going to a church in Saudi Arabia any time soon. We have to realise that there are opportunities.

I will finish so that there is time for the Minister and others. A battle is still going on in Iran between hard-liners and reformers. The reformers are trying to say to the population, “Look, Iran can be successful, but we need to concede certain things. We need to slow the nuclear programme”—or cancel it if there is a military aspect—“and we need to come into the international community. We will address human rights, too.” I met the President’s chief of staff, and I directly pressed him on the Baha’is. Iran needs to show that willingness.

The hard-liners and principlists like isolation and sanctions. The revolutionary guard profits from sanctions, because sanction-busting is very profitable. We have to say, “Here is a chance.” As of today, the Iranians are complying with their Geneva accord obligations. They are reducing the stocks of 20%-enriched uranium. Before the Geneva accord, the Iranians were diverting such uranium to fuel plates. Iran is starting that process, and it is increasing the number of inspections.

We need to judge Iran, day by day and week by week, on where it is going, but please remember that, if we decide to shut out that effort, we will bring in the hard- liners of Iran, who will not be interested in rapprochement or the international community and who will take refuge in a religious extremism that will not help the Iranian people, peace in the region or the countries of Britain and Israel.

[Several hon. Members]

rose—

[Hywel Williams (in the Chair)]

Order. The debate will conclude no later than 4.14 pm.

15:44

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Williams. I congratulate the hon. Member for Hendon (Dr Offord), my north London near neighbour, on securing the debate, which has been a useful opportunity to assess recent events in Iran including, among other important issues, the joint plan of action. He rightly said that the joint plan of action does not resolve international suspicions about Iran’s intentions and merely suspends some of those suspicions for some people. He is right to continue to be concerned about Iran’s sponsorship of terrorism and other harmful activity in the region. He, along with the hon. Member for Hertsmere (Mr Clappison), rightly underlines that the sense of threat from Iran is still felt particularly acutely in Israel.

As in previous debates on Iran, we have had a good range of contributions from hon. Members offering differing but strongly held views. The speech of the hon. Member for Wyre and Preston North (Mr Wallace) was interesting in highlighting some of the history of the relationship between the west and Iran. He noted some of the complexities and the need for nuance in our debates on future relations with Iran.

Such a range of views and the need for nuance is perhaps reflected in the region itself. I am struck that there is clearly an intense debate on the joint plan of action in Israel. In that context, it is worth noting the comments made yesterday by the Israeli Labour party leader Isaac Herzog, who challenged some of the comments by Israel’s Prime Minister, Mr Netanyahu, on the Iranian nuclear deal:

“This is an interim agreement; it isn’t Judgement Day…yet.”

He suggested in a slightly more partisan tone that Mr Netanyahu was encouraging a sense of panic on the joint plan of action that is not necessarily helpful.

The hon. Member for Hendon, in response to an intervention, alluded to Iran’s role in Syria and elsewhere in the region. Perhaps inevitably, it is always a critical time in the middle east, but it feels particularly so at the moment. Iran clearly plays an important role, and its activities in the region have implications for the wider relationship between Iran and the west. The international community, including the UK Government, must continue to do all it can to encourage all the parties in Syria to end the fighting and, in that context, to persuade Iran to influence the Assad regime at every opportunity to cease the use of violence against its own people.

Similarly, Iran’s dismal human rights record has rightly been raised by a couple of hon. Members. There are serious ongoing concerns. If the new regime in Iran takes steps to improve the country’s human rights record, it would send a strong signal on the importance that the Iranian Government attach to co-operation and engagement with the international community. Although President Rouhani has not openly expressed anti-gay rhetoric, unlike his predecessor, Iran’s Islamic penal code still lists homosexuality as an offence punishable by death.

The hon. Member for Strangford (Jim Shannon) rightly highlighted concerns about the attitude to other religions and ethnic minorities. It is far from clear, according to Iran’s Nobel laureate Shirin Ebadi, that political prisoners are being released in the way that the regime has previously claimed.

There has long been recognition in the House and across the international community that we need to grasp the serious opportunities that occasionally come along—they are certainly presenting themselves to us now—to improve relations between Iran and the UK and the west in general. The hon. Member for Wyre and Preston North highlighted a number of the missed opportunities to do just that. President Rouhani is offering the prospect of seriously improving the relationship between the UK and Iran. In recent months, his Administration’s new approach to negotiations suggests that we should be open to continuing serious engagement with his regime. I pay tribute to the EU’s High Representative, Cathy Ashton, not only for her role in the negotiations but for her willingness to continue to follow through on the prospects for better engagement.

On ensuring that Iran’s nuclear programme is and remains peaceful, Members will be aware that the first step agreement with Iran commenced on 20 January and continues to be implemented. We are between talks and the E3 plus 3 are meeting again in March for the next round. We should be encouraged that the previous talks were of a constructive nature.

The hon. Member for Hendon rightly raised concerns about Iran’s attitude to, for example, the critical issue of centrifuges. There has been concern that Iran has installed new centrifuges. As the shadow Foreign Secretary expressed in his response to the Foreign Secretary’s statement on Monday, there is concern that Iran is still operating more than 10,000 centrifuges when the interim deal set out a much lower target. What is the Minister’s view on that? There has also been concern about the Arak heavy water research centre. As he has previously said, under the joint plan of action Iran is supposed to fully resolve concerns about that reactor and confirm that no reprocessing will take place there. What is his view on progress in that area?

The deal that has been agreed is a necessary step precisely because Iran has developed an enrichment programme over recent years, despite calls by the international community to stop. That is why the existing substantial sanctions must be enforced and why the comprehensive solution must address all the proliferation concerns on Iran’s nuclear programme. Does the Minister believe that the IAEA has the necessary resources to be responsible for the verification of the nuclear-related measures to which Iran has committed? Will he explain more about the monitoring and validating processes that the IAEA will go through? Maintaining confidence in those processes will be important in helping address the suspicion about the Iranians’ activities. In that way, the necessary trust can be built to achieve the comprehensive solution that will ultimately be in everyone’s interest.

Will the Minister set out what the role of the joint commission of the E3 plus 3 and Iran will be? What stage are we at in the development of the joint commission? Will he set out, as the shadow Foreign Secretary asked the Foreign Secretary to do on Monday, the impact that the sanctions relief has had so far on the Iranian economy? Will the Minister set out the most recent estimate of the benefits that the limited sanctions relief has so far brought to the Iranian economy? Similarly, what impact has the limited sanctions relief had on Iran’s petrochemical exports and the imports of goods and services for its automotive manufacturing sector?

Finally, on a related but nevertheless separate issue, the UK and Iran brought protecting power arrangements to an end last week, which is an encouraging sign of increasing confidence that bilateral business can be conducted directly between capitals, rather than through intermediaries. Iran’s non-resident chargé d’affaires visited the UK this week. Can the Minister provide at least some update on the progress in those discussions? All of us wish the Government and the E3 plus 3 well in seeking to deliver on the comprehensive solution. I hope the Minister will continue to provide regular updates to the House to offer assurance on the progress of negotiations.

15:55

[The Minister of State, Foreign and Commonwealth Office (Hugh Robertson)]

I congratulate my hon. Friend the Member for Hendon (Dr Offord) on securing the debate and thank all hon. Members for their contributions. Given that this has been something of a question fest, I suspect that my best approach in summing up is not to read through the beautifully drafted piece of English that has been supplied to me, but to try to pick out the questions that have been asked and to go through them as swiftly as I can in the 10 minutes remaining.

In a sense, the debate has highlighted the issue. It would be a bit simplistic to call it a glass-half-full, glass-half-empty debate, but in a sense everyone is occupying the same piece of ground. My hon. Friend the Member for Wyre and Preston North (Mr Wallace) gave us a wonderful historical tour de force of relations with Iran. There are ample reasons to be extremely cautious and very suspicious. On the other hand, once every so often an opportunity comes around. The question is whether to make that leap of faith and test it, being well aware of all the past problems, the history and the dangers, in the hope of getting to a better place eventually. Alternatively, we can be extremely cautious at every stage to the extent that it impacts on the ability to conclude that final deal. Those are difficult and complex judgments, and there are no right or wrong answers.

The last time the international community had a go at this was when the right hon. Member for Blackburn (Mr Straw) was Foreign Secretary. It got to a stage where all the suspicions present in today’s debate were aired, and a combination of the hard-liners in Tehran and Washington derailed the deal. The consequence of that was that the steps towards nuclear production simply continued. Arguably, as a result of not being able to take those bold steps, the situation got worse, not better—I know it is difficult to second-guess these things now. It is absolutely right to be cautious and sensible and to have an eye to history, but we should see on this occasion whether we can test the feelings and sentiment in Iran.

I will try to answer the various questions that my hon. Friend the Member for Hendon asked. He is absolutely correct to say that the interim agreement does not resolve international suspicions. As he will have guessed from my opening remarks, I absolutely agree that it does not. It is merely a first step that buys us the time to move towards further discussions on the issues, of which he raised a great many. A comprehensive agreement will absolutely need to address the proliferation concerns that he set out. Let me be clear: we will not sign a deal if it does not address those concerns. Secondly, he made the point that, through the sanctions relief regime, we have eased the pressure on Iran’s economy for very limited concessions in return.

It is worth saying that the interim deal addresses some of the nuclear programme’s most concerning elements: the eradication of the stockpile of 20% enriched uranium; and Iran being forbidden from installing further centrifuges, which is different from developing them. It also eases the monitoring regime carried out by the IAEA. We and the US estimate the sanctions relief given to Iran to be about $7 billion over the six-month period. That is a relatively small fraction of the $60 billion to $100 billion of restricted Iranian oil funds held abroad and of the $60 billion to $70 billion it needs to finance its foreign imports. I understand my hon. Friend’s concerns, but there is a sense of proportion in that.

My hon. Friend asked about what are called in the parlance the PMDs—possible military dimensions—of Iran’s nuclear programme. That is very much a concern. He is right to say that they are not addressed in the interim agreement, but they are a key part of the final negotiations that will take place so they will be addressed. Indeed, the joint plan of action makes it clear that the joint commission, composed of the E3 plus 3 and Iran, will work with the IAEA to facilitate the resolution of all those issues.

Fourthly—if I have got the order right—my hon. Friend asked about the sanctions relief enabling the Iranians to fund terrorism, which touches on a point made by several other Members. There is no doubt that Iran’s support of terrorism throughout the region is a malignant force. As my hon. Friend the Member for Hertsmere (Mr Clappison) mentioned, were there need for evidence, considerable evidence is available—it is a statement of fact—that Iranian support for Hezbollah and directly through the Quds Force has played a considerable part in the conflict in Syria. That is not the only example by any means of Iran’s malign influence in the area; it has been seen recently in Bahrain, Saudi Arabia and right around the Arabian peninsula. That will have to be addressed if relations with Iran are to be normalised in any meaningful way.

I guess that the question about the granting of access to the IAEA was driven by the Parchin military facility issue. My hon. Friend the Member for Hendon is right that the interim agreement does not allow the IAEA access to Parchin. However, following Iran’s agreement with the IAEA on 8 February about the exploding bridgewire detonators, we hope that we can make progress. Indeed, that will have to be addressed as part of any final and comprehensive agreement.

My hon. Friend asked, perfectly reasonably, about our assessment of whether the Iranian actions at the moment are within the spirit of the JPA agreement. The hon. Member for Harrow West (Mr Thomas) asked in particular about the continued production of advanced centrifuges with reduced break-out times and whether that poses questions about Iranian intentions. There is no doubt that we would much rather that Iran had not done that. The IAEA, however, has looked at what it has done thus far and confirmed that it is currently complying with the JPA’s strict terms. As part of the 24 November agreement, Iran has committed not to install or bring into operation any new centrifuges in the main enrichment facilities.

That, however, does not help with confidence-building measures and, as we touched on earlier, there will be a real trust issue if the Iranian Government continue to act in this way. Again, that will have to be addressed as part of the comprehensive agreement.

Finally, my hon. Friend asked about the concerns that Iran could simply pocket the benefits and walk away from the negotiations. Indeed it could, but, if so, it has a great deal to lose. The Iranian economy is going through the floor and there is real hardship in Tehran. Anyone who looks at this—intelligence agency or otherwise —realises that the Iranian economy is in a very bad place indeed, and the key electoral promise of the Government was to restore the economy, so they have a considerable incentive. Without such an agreement, they can do absolutely nothing to bump-start their economy.

If the deal falls to pieces, no doubt international reaction will be tough and Iran will wear the blame for that. The full sanctions regime will simply be reinstated and it will move backwards very quickly. In an environment in which Iran had toyed with the international community and let it down, it would be difficult to restart talks for some time. My hon. Friend is right that, in theory, Iran could pocket what it has got at the moment and walk away, but that might not be wise on its part. There is no intention whatever to offer further sanctions relief over and above what it has got until it has delivered on the key terms of the agreement.

Let me turn to some of the other questions asked in various contributions. It is always a pleasure to hear from the hon. Member for Strangford (Jim Shannon). He talked about the power struggle in Iran and he is absolutely right. At the moment, the indication is that the supreme leader backs the regime in the talks being conducted: indeed, the substantive concessions made thus far would not have been possible without his support. However, as we all know, hard-liners who do not wish the process well are operating in the background. The hon. Gentleman asked a good question about whether Rouhani can deliver. Our assessment is that he can, but if we push him too hard, it probably will not take a great deal for that to change. If he cannot show real benefit from the process, that assessment must be called into doubt.

The hon. Gentleman asked about human rights abuses in the country and he is right to highlight them. I have the figures here and the situation is appalling—there are no two ways about it. There have been reports of at least 400 executions in 2013. Iran has the second highest number of journalists in prison in the world. Opposition leaders have been detained for more than two years. Arrests of human rights defenders and journalists continue, as does persecution of religious and ethnic minorities. The Government will continue to hold Iran to account. We are not being soft: more than 80 EU sanctions are designated on individual Iranians and entities responsible for human rights violations.

[Mr Clappison]

May I say how grateful I am to the Minister for his personal interest in and attention to the issue of persecution of Christians in Iran? He deserves tribute for his stand.

[Hugh Robertson]

I thank my hon. Friend. He is very kind. One of the curious things about my job is that I end up handling the majority of the correspondence that flows into the Foreign Office. In my first few months, it was noticeable that one of the subjects raised most regularly by Members throughout the House was the fate of Christians in the middle east. In the various visits I have made around the region, I have tried to make a specific point of seeking out Christian leaders to talk to them about what is happening. I had a fascinating couple of hours with the Copts in Egypt—there are between 10 million and 12 million of them—and I will continue to take a close interest as I make my various visits.

To finish my response to the hon. Member for Strangford, he is right that religious freedom is a key part of where Iran needs to get to. That is something that is largely lacking under the current regime.

[Jim Shannon]

I entirely agree with the comments made by the hon. Member for Hertsmere (Mr Clappison) about the Minister’s dedication and interest, which I appreciate as well. In my speech, I mentioned that Rouhani had indicated through Twitter his best wishes for Christians at Christmas time and at times of festival. That is an indication of a leader providing leadership. Has the Minister had any chance of gentle discussion with Rouhani and his Government?

[Hugh Robertson]

The honest answer is no. Contact at ministerial level with the Iranian regime has been restricted to the Prime Minister and the Foreign Secretary. I think it is appropriate to keep it at that level rather than open the door. There are all sorts of reasons—I was just about to come on to this matter—why we might proceed with some caution, so I have not had those conversations.

My hon. Friend the Member for Hertsmere made the very good point that it is important not to get ahead of ourselves. I agree absolutely. The Foreign Secretary put it well in the early autumn of last year when he came back from New York. He explained that there had been a change in the atmospherics, but that nothing substantive on the ground has changed at all. That is a good way of putting it and a good way of approaching what we are doing at the moment. There is a clear opportunity but it makes abundant good sense to move forward with caution, acting sensibly and testing the intentions. There is a great prize at the end if we can get there, but we should proceed with caution.

My hon. Friend correctly drew our attention to the lack of progress in Geneva. I sat through the whole of the first day of contributions there, and our assessment was that the key driver behind that lack of progress was the regime’s unwillingness to address the question of regime change. It is a red line that the regime will not cross, and at the moment it is the great barrier. The regime wants to talk only about terrorism, whereas the opposition wants to talk about transitional arrangements. Breaking that deadlock is proving extremely difficult.

I congratulate my hon. Friend the Member for Wyre and Preston North. As chair of the all-party group on Iran he is the resident House expert on these matters, and is certainly the only person here today who has been to Tehran recently. He speaks with great knowledge. He is absolutely right to observe that trust has failed on both sides and that there is a battle between the reformers and the hard-liners. I thank him for acknowledging the benefits of the joint plan of action.

The Opposition spokesman asked about the thousands of centrifuges that have been produced, so I will give him chapter and verse on that. He is absolutely right that the regime has produced a series of centrifuges. As part of the agreement the regime is not allowed to install new centrifuges. The IAEA knows the centrifuges are there and is monitoring what happens to them. I hope that matter is in hand.

The hon. Gentleman also asked about Arak. The interim deal has halted construction there and suspended fuel production for the heavy water facility but the final status of that plant is a matter for the final status negotiations and so is not yet resolved.

The hon. Gentleman asked about resources of the IAEA. Off the top of my head, I do not know exactly how many people it has on the case on the team of inspectors, and I am not sure that that information would be readily available, for obvious reasons. However, if it gives him reassurance, I have been working closely on this matter for the past three or four months and at no stage have I heard a suggestion that the IAEA is short of resources or is unable to conduct the monitoring it wants to carry out.

The hon. Gentleman asked about the impact of sanctions relief on the Iranian economy, and I have already given some relevant figures. I do not know what impact sanctions relief has had on the automotive sector, but we will send him a written reply on that matter.

The hon. Gentleman asked about the visit of the Iranian chargé, who was just here, from 18 to 25 February. That was his second visit to the UK, and there have been two visits in the opposite direction. When we have the Iranian assessment of what he has achieved and what the issues are, there will be a process in which we will sit down and work out what happens next. The Foreign Secretary has been scrupulous in making a statement to the House every month or six weeks and that is his intention should there be any additional information on that matter.

Broadband (South Northamptonshire)

Wednesday 26th February 2014 Westminster Hall

16:14

[Andrea Leadsom (South Northamptonshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Williams.

Good broadband coverage is not just important for those of us who want to download films and TV shows, do internet shopping or keep up to date with the latest news; it is truly vital for those who work from home and those who run their own businesses. Broadband is a superb investment, which is projected to boost local growth across the country, with a net return of £20 for every £1 spent by 2024.

Often, however, the emphasis is on getting good coverage for towns and cities. I want to make the case that good broadband coverage in rural areas is every bit as important. My constituency, South Northamptonshire, covers 92 parishes—many of them rural—two market towns and a decent chunk of Northampton, our county town. In 2012, Northamptonshire county council undertook an open market review to determine the level of broadband coverage in the district of South Northamptonshire. The council surveyed over 38,000 premises in the district; of those, it discovered that 27,000 were identified as unserved. In 2012, then, about 70% of all premises in the district of South Northamptonshire had no broadband coverage at all.

Overall, I am delighted with the steps that both the Government and Northamptonshire county council are taking. The Government are already investing £1.2 billion to supply people across the UK with access to superfast broadband. The target set is for 95% of the UK to have access to superfast broadband coverage by 2017. The Government have acknowledged the importance of good broadband infrastructure in creating more jobs and ensuring small businesses have they support they need. I am encouraged that 10,000 homes and businesses are getting superfast upgrades each week, with that figure set to rise to 40,000 premises a week by the summer. Finally, I was delighted by the announcement, made only yesterday by my right hon. Friend the Secretary of State for Culture, Media and Sport, of the allocation of an extra £250 million to ensure that all areas of the UK are able to hit the 2017 target. I certainly welcome the £3.64 million additional allocation for Northamptonshire.

The backing is there. Closer to home, I am glad that Northamptonshire county council has its own excellent plans for roll-out to deliver 90% coverage in the county by 2015. Over 50,000 premises will gain access as a result of the just over £4 million allocated by the county council, together with over £4 million from Broadband Delivery UK and an investment of £3.2 million from BT. The council reports that it now intends to go further than its initial 2015 target and is already talking to commercial providers to revisit the extent of commercial plans. The council has put aside an extra £2 million, and I am sure it will welcome the additional sum of just over £3.5 million allocated yesterday by the Secretary of State.

Northamptonshire county council has one of the most detailed “when and where” maps in the country. Although residents are aware that plans could change, that map provides the best information available on the extent of coverage, by when the coverage will be in place and how the council expects plans to come forward. Of the 27,000 properties in my constituency that were identified as unserved, the council expects that 18,500 will receive access to superfast broadband through its investment, and that of BDUK and BT. The Superfast Northamptonshire project will see another 4,175 premises in South Northamptonshire receive coverage. It is the council’s aim to secure full superfast coverage by the end of 2017.

For all that good news, full access is still a terribly long way off. I regularly receive reports from annoyed and frustrated residents in my constituency who are struggling to gain decent access, or any access at all, to broadband services. Although Northamptonshire county council has a clear and ambitious plan, it is held hostage slightly by private companies that may or may not stick to the commitments they have made.

Broadband should rightly be the domain of the private sector, so there are clear rules about how and where the public sector can intervene, but Grange Park in my constituency is a good example of an area where broadband is a major issue. The majority of the area falls within the commercial plans of BT’s provision. As it has declared a commercial interest, the county council cannot intervene with a solution as that would be in breach of state aid regulations. The county council, parish council and Grange Park residents are pressing BT to deliver on its commercial proposals and to set out a clear timetable. I understand that there will soon be a meeting with BT’s regional director for the east midlands, and I hope that they will be able to move things forward.

The problem in Grange Park is that it is a significant distance from the exchange and around a quarter of properties are served by telephony over passive optical networks—T-PON—which will not support superfast fibre-based services. A solution must be found, but it may not be simple and may be expensive. Residents believe that BT has an obligation, and that it must not step back from its proposed commercial response and transfer the problem back to the county council. A delay in securing good broadband coverage to the area and finding the additional funding, which would be needed if the problem were given back to the council, would be unacceptable.

One resident wrote to me recently explaining the issue. He fears that BT will conclude that it is not commercially viable to change T-PON to fibre to the cabinet—FTTC—which is the infrastructure that is so desperately needed. My constituent concludes that the problem is the lack of competition as BT is the only commercial provider. If Virgin, for example, had existing infrastructure in Grange Park, BT would be fighting to retain business instead of receiving the same revenue for line rental and current broadband services without having to provide any investment.

My constituent also explained that many residents have their own businesses and work from home, and that the problem is so serious for many that they may have no alternative other than to move away if it really will be 2017 or beyond before the problem is resolved. I hope that the Minister will assure my constituents that commercial companies will be strongly encouraged by any means possible to stick to their commitments.

I appreciate that BT is providing broadband speeds of up to 80 megabytes in Brackley, benefiting more than 6,500 properties, and a higher speed copper broadband speed of up to 20 megabytes, benefiting Middleton Cheney and Roade, to name just a couple of villages. By the end of 2014, its current plans will benefit communities in Paulerspury, Blisworth, Pattishall, Silverstone, Blakesley, Chipping Warden, Cogenhoe, Hackleton, Sulgrave and Yardley Hastings. That is great news and hugely welcomed, but it is of no comfort to my constituents in Grange Park, and I urge private providers to ensure they carry out their proposed investment plans.

Towcester is one of the largest market towns in my constituency, but until a couple of weeks ago, constituents were explaining to me that if they were lucky they could receive a connection speed of about 3.5 megabytes, and for some it was no more than 1 megabyte. I am pleased that because of county council investment, 10 new fibre cabinets went live on 3 February. I am delighted that the Minister was able to attend the celebration, and I hope that residents will soon experience the benefits. However, Towcester residents are still having problems with mobile phone signals, and if the Minister has five minutes to sort that out, they would be incredibly grateful.

I want to finish by mentioning the Tove valley community broadband project, which is a fantastic example of a community taking matters into its own hands. Last year, the community-based initiative celebrated its 10th anniversary of bringing an internet service to the Tove valley. Volunteers of the Abthorpe broadband association, led by Eric Malcomson, initially brought a satellite-based service to Abthorpe and later an ADSL system, but the villages now have a broadband service offering speeds of up to 30 megabytes, well above the national average, and an average of 20 megabytes even at the furthest reaches.

In the target area, 50% of households have signed up to the superfast service, well above the critical mass required to make the project financially viable. More than 225 of the 450 households have asked for the service and 208 are already connected. That was completed in less than six months since the service started in May 2013.

The communities of Abthorpe, Astwell, Bradden, Foscote, Lois Weedon, Slapton, Wappenham and Weston have benefited. I am delighted to be a resident of Slapton, so I am a beneficiary. Those connections have been completed and coverage is being extended to Helmdon. All the villages are delighted with the opportunities that connection provides, and what has been done there should be a model for future broadband initiatives in rural areas. It was an honour to be asked to open the project in Abthorpe in June 2013.

I was delighted to attend the 2013 TalkTalk digital heroes awards at the end of 2013 when Eric Malcomson, chairman of the Abthorpe broadband association, won the east midlands regional award. The award celebrates people who use digital technology to help their local communities, and Eric has worked tirelessly to deliver a fantastic service to a very rural area. I cannot overstate how beneficial the service had been to many communities. Tove valley community broadband project achieved a finalist’s position in the fixed rural networks category at the 2013 NextGen awards.

In conclusion, I congratulate the Government on the work and investment to ensure that even those in the hardest-to-reach places can access good broadband services. I also commend my own county council for its ambitious targets, and for recognising how important broadband is to rural areas. I am conscious that this must not be an attack on private providers. The investment that private commercial companies are providing is vital. However, I urge that that investment should continue and I hope that private companies will work with local councils to agree solutions and suitable timescales to deliver better services to areas such as Grange Park.

I would be grateful if the Minister explained what steps his Department can take to ensure that private companies cannot hold councils to ransom at the expense of good broadband coverage for communities in desperate need of it.

16:26

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

I am pleased to be speaking under your chairmanship, Mr Williams. I congratulate my hon. Friend the Member for South Northamptonshire (Andrea Leadsom) on securing this important debate. She is an assiduous champion of her constituents and their interests, and it does not surprise me that she seeks to draw my attention to the importance of broadband to her constituents.

Before responding to the specific issues that my hon. Friend raised, I will give a brief overview of the broadband project as it is developing. Having commissioned research, the Government know that investment in broadband pays enormous dividends in economic growth. A recent study that we commissioned showed that over the next decade every pound invested in broadband will deliver a £20 return investment. That sounds an unusually high return, but it is realistic because broadband is a general-purpose technology, which has an increasingly critical role in the day-to-day running of businesses large and small.

The bulk of that economic impact will come from improvements in business productivity and will safeguard employment in areas that might otherwise be at a disadvantage. There will be a time saving for people who will no longer have to commute, and opportunities for people to participate in the work force. The gross value added attributable to our current programme is about £6.3 billion a year by 2024, with about 20,000 jobs attributable to the programme. I have been told that increased teleworking will save around 10 million hours of leisure time every year, as well as reducing commuting costs.

We invested some £500 million in our original programme to bring superfast broadband to areas where it was not commercially viable, and that money was matched by local authorities. The total sum was around £1.2 billion. As my hon. Friend said, the Government gave Northamptonshire some £4 million, which was matched by the county council and topped up by the telecoms provider BT.

The programme in Northamptonshire, before we announced our superfast extension programme, was designed to achieve 89.2% fibre coverage, which meant that 87.4% of all premises in Northamptonshire county council’s area would receive speeds of 24 megabits and above. Some 228,000 premises in the Northamptonshire county council area will be covered by BT commercially and almost 50,000 premises—48,600-odd to be exact—will be covered by the intervention of the Government and the county council. As my hon. Friend pointed out, 18,500 premises in her constituency will benefit from the programme.

I am pleased to say that, according to my understanding, the programme in Northamptonshire is now two months ahead of schedule. It may or may not have escaped your notice, Mr Williams, that the Government were criticised some months back for the programme’s being delayed. In fact, the more one sees the programme getting under way, the more one sees that it is now beginning to exceed its targets. In my hon. Friend’s constituency, we have so far reached 3,300 premises through the scheme and we should have covered another 2,000 premises by the end of March.

The programme is very successful, not only in Northamptonshire, including South Northamptonshire, but across the country. We are covering more than 10,000 premises a week. We hope to get to a milestone of half a million premises reached some time towards the approach of summer. We hope then to be covering some 40,000 premises a week.

Let me echo the tribute paid by my hon. Friend to her county council—Northamptonshire county council. From the very beginning of the project, we wanted to partner with local councils and Northamptonshire county council has stood tall as an exemplar of a county council to partner with. Not only has it match-funded the Government money, but it has proved effective in ensuring that planning barriers were removed and in co-ordinating all the different elements that need to go into a smooth roll-out of superfast broadband. It does not surprise me at all that the programme is already ahead of schedule; a lot of the credit for that has to go to the county council.

My hon. Friend also mentioned the Tove valley community broadband project in the south of Northamptonshire. I echo her comments. That is a hugely successful project, as she said, with more than 50% of the households in its target area having signed up for the superfast service, making the project financially viable. I am pleased to say that Broadband Delivery UK and the Department for Environment, Food and Rural Affairs have, in principle, approved £118,000 for the project through the rural community broadband fund. It is good to see how the local communities have worked so closely to put together the project, which will bring superfast broadband to Tove valley.

I am delighted with the excellent progress that we have seen in Northamptonshire and I look forward to the continued success of the county roll-out, which will see a further 18,000 premises passed. I am pleased that we were able to find the additional money—£3.64 million —to go to Northamptonshire as part of the superfast extension programme.

Nothing is ever perfect and I take on board my hon. Friend’s points about some of the issues that she is having to deal with in her constituency. I have to say that I have found BT to be a very good partner in terms of broadband delivery roll-out, but I hear what her constituents in Grange Park say, which is that perhaps, in her words, they are being held to ransom by BT, as BT is the only supplier.

However, it is probably worth pointing out that BT often finds itself as the only supplier in areas where other commercial suppliers simply will not compete because it is not necessarily commercially viable. She will not find Virgin Media there because it may not be commercially viable for it to compete in Grange Park. Although one finds a plethora of commercial suppliers competing for the business market, the residential market is less competitive, because, to put it bluntly, it can be less profitable.

My understanding is that in Grange Park, some 650 premises already have superfast broadband as part of BT’s commercial roll-out. A further 193 premises will get it in 2014 as part of BT’s commercial roll-out, and 77 premises in Grange Park will get it as a result of the rural broadband initiative. That still leaves some 700 to 900 premises looking for a solution, so my hon. Friend is absolutely right to raise the issue, and to do so in this Chamber. I promise her now, in this forum, that I will get back to BT, BDUK, and the county council, and work with her to see whether we can make progress on a solution.

I was also pleased to hear my hon. Friend mention mobile coverage. She rightly expected me to solve a number of problems for her in the Chamber this afternoon, so let me see whether I can oblige. I am delighted that we are now seeing the roll-out of 4G—fourth-generation technology for mobile phones. It was a fraught process to get to a position in which we were ready to auction the spectrum, but the spectrum auction went very well and we are now seeing the roll-out of 4G nationwide. That roll-out itself is set to conclude some two years ahead of schedule; the licences require 98% coverage for one licensee by the end of 2017, and my understanding is that all four main operators plan to reach that figure by the end of 2015.

I have to say to my hon. Friend that, according to my understanding, from discussions with the operators when they give indications for specific areas or constituencies of the country, we will see a significant uplift in terms of mobile coverage. Not only will 4G coverage extend mobile coverage significantly, but the roll-out of 4G will also see, as a knock-on effect and knock-on benefit, a significant increase in coverage of 3G.

Mobile coverage, alongside fixed broadband coverage, is an issue of significant concern to the Government. We are actively looking at that to consider ways in which to improve it, because what sums up the whole debate, and why it is so appropriate for my hon. Friend to have secured it, is the recognition over the past few years that good, superfast, digital communication, whether mobile or fixed, is becoming an essential aspect for almost every business and an essential part of our leisure life as well. That is why I am so pleased that the fixed broadband project is going well.

I am pleased that we are delivering in my hon. Friend’s constituency. Nothing is ever perfect and she is right to point out where there are gaps in coverage. I repeat my pledge to work with her, the county council, BT and BDUK to deal with the issues that she has raised.

CE Marking (Structural Steelwork)

Wednesday 26th February 2014 Westminster Hall

16:38

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

It is a pleasure to serve under your chairmanship, Mr Williams. Most people will be familiar with CE marking. Some goods have had it for years, from kids’ toys to kitchen appliances, from bike helmets to our hot water boilers, among other things. CE marking was introduced as a means to create a level playing field in the internal European market, starting way back in 1988. It is, of course, a consumer protection device to ensure that manufactured goods are made to standards that are harmonised across the European Union.

Recognising the challenges involved in providing a standard certification mark on manufactured goods, it was decided to phase in the introduction over a long period. That has led to different dates set for various goods since 1988 and it is still continuing to this day. The most recent incarnation of the mark was in 1995 and it continues in most product areas without a major problem. However, there is a problem for the Government and steel fabrication industry with the requirement for CE marking on all fabricated steelwork and construction in civil engineering to be in place by 1 July 2014. I want today to draw the Government’s attention to the implications of that requirement.

Let me give some background. The Government have championed the idea that they are a friend of small business, and that is indeed a sensible approach. Just last month, for example, speaking to the Federation of Small Businesses, the Prime Minister announced a plan to scrap 3,000 rules affecting small businesses, saying that he wanted to

“get out of the way of small business success.”

We can all agree with that laudable aim, but the reality on the ground can be different.

It was in that context that I was first contacted by a firm local to my constituency, T&D Cruickshanks, based in Kirkintilloch. Cruickshanks, a third-generation family-run business established in 1948 with four employees, is exactly the kind of small manufacturing business that the Government hold up as an example of an enterprise that they are setting out to support and that we all need to succeed. It is in the spirit of cross-party support for small businesses of that kind and others that I bring this issue to Parliament. Mr Cruickshank is absolutely clear about the impact on his business. Businesses that do not comply with the new CE marking certification by 1 July 2014 will be trading illegally, and Mr Cruickshank is very clear that certifying products involves significant costs for a small business such as the one his family have run for generations.

That focus on the lack of awareness in the fabrication industry of the necessity of meeting the new certification standard has been echoed by another business in my constituency, Highland Galvanizers, based in Cumbernauld. Geoff Crowley, the managing director, is very clear that upwards of 700 companies just in Scotland are unlikely to be compliant by 1 July. Geoff has been at the forefront of efforts to warn of the impending introduction of CE marking on fabricated steelwork in construction and civil engineering, and to make firms and the Government aware of it—it is coming up very fast.

It appears that the steel fabricators, suppliers and manufacturing industry, especially at the small business end of the chain, are largely unaware of what comes into force on 1 July, and are therefore unprepared. The preparation to comply with the CE certification marking, according to my industry discussions, takes perhaps six months. Many have not started. There are notable exceptions, especially the members of the British Constructional Steelwork Association, which has made CE marking compliance a condition of membership and is training its members in becoming compliant with the EU regulation.

In advance of the debate, I asked the Minister a number of parliamentary questions. In his response, he directed me to a 2009 impact assessment. With help from those on the front line in the fabrication industry, I have identified a number of issues about the impact assessment, on which I am sure the Minister will be pleased to respond.

First, the 2009 report relates to the whole construction products directive, whereas today we are seeking to address specifically the subsection that relates to the steel fabrication industry. [Interruption.] Members of the press are looking increasingly fascinated as I proceed. Secondly, the consultation was with larger bodies—trade associations, large companies and the like—which were within easy reach of civil servants. That makes the results unreliable because it ignores the challenges faced by small companies, which are often not members of trade bodies.

The impact assessment estimates the number of businesses affected to be about 18,000 and a total cost to them of £66 million, with an annual cost for maintenance of £12 million. I wonder how those estimates stand now. Will the Minister provide more clarity on the cost of meeting those marking certification standards? Anecdotal evidence from Scottish steel fabricators who have already implemented CE marking is that implementation costs of £20,000 are not unusual for larger businesses, and that quotes from consultants to help smaller fabricators to meet the new standard range from £5,000 to £10,000.

Further to that, the impact assessment, at paragraph 29, removes half of those who might be affected by the new certification standard, because—this is the impact assessment’s own description—half of those who would be affected will have voluntarily become CE mark certified on the basis that they might want to do business abroad. We have to be aware of the impact assessment in that context. Does the fact that business might be certified for another reason mean that that cost should be removed from the impact assessment? Are those calculations accurate enough for hon. Members to make a judgment about the potential implications of the certification and ensuring that the industry across the board is compliant?

The impact assessment recognised that small businesses would be affected disproportionately. We are talking about small businesses that only sell locally and that are not exporters. There is little benefit for them in CE marking in itself. Of course, they are already at a disadvantage compared with larger suppliers in the industry, which can easily afford to absorb the costs of meeting the new standard. That creates obvious financial and compliance challenges for small steel fabricators such as Cruickshanks in Kirkintilloch.

There was clearly some recognition of the potential problems with the new CE standard—an impact assessment was undertaken in 2009—but, five years later, it appears that not much has happened to ensure that small steel fabricators are aware of the requirement, which has to be met by 1 July, and aware of any support that can be given to meet it.

In paragraph 61, the impact assessment asks those consulted how they think the certification standard will impact on competition. Larger companies thought that the impact would be positive, whereas small businesses saw it as negative and thought that the measure would reduce choice and drive smaller businesses out of the marketplace. Paragraph 65 recognised that smaller businesses, particularly those that are not members of trade bodies, would suffer from poorer communications—it is much more difficult to get the message out to small businesses. From the discussions I have had with the Scottish part of the steel fabrication industry in particular, but not exclusively, I think the problem is that many of the small fabricators are simply unaware that the requirement is coming. Some just do not believe it. Some have heard and are hoping they will be unaffected.

I say again that the British Constructional Steelwork Association is doing sterling work in trying to shed light on the requirement and has made compliance with CE standard marking a condition of membership. The Federation of Small Businesses is also alerting its members to the deadline. However, those few bodies in the UK that are authorised to assess and certify companies seeking CE accreditation, such as the Steel Construction Certification Scheme and the Welding Institute, are under-resourced and already booked up beyond the 1 July deadline. That is what I am told.

Since I secured the debate, I have been contacted by a number of small businesses—steel fabricators, welders and the like—across the UK. Organisations that procure large quantities of steel, such as those behind large-scale construction projects, are already beginning to demand that smaller suppliers be CE accredited. There is a real issue in that the vast majority of Scottish fabrication businesses will not be eligible to tender for that kind of work after 1 July, because they will not have met the certification deadline. Local authorities are starting to wake up to that, and I hope the Minister will tell us what action his Department is taking to ensure that local authorities are acting, and what Government guidance and help has been given.

Businesses that recognise that they need to act—that requires having some training and subsequent qualification, putting some administrative procedures in place and having an audit by a notified body—find that there seems to be a lack of available resource. There are few trainers and fewer assessors, and they are booked up beyond 1 July. My understanding is that trading standards has to be responsible for the enforcement of the CE marking standard. What action has trading standards taken to inform those in the industry that the standard must be met? Has trading standards taken it upon itself to offer advice?

I look forward to the Government grasping the matter. There is a significant problem for small businesses—smaller fabricators lack awareness of the requirement to meet the standard by 1 July. The Government have a role to play, and if they believe that small businesses are the engine room of the economy, I hope they engage in a positive and constructive spirit. I am sure the Minister will agree that it is a serious matter. Businesses may not be compliant by 1 July, and all hon. Members should be aware of the potential implications for those businesses and their staff. I look forward to the Minister informing me and those at the sharp end of the industry how the situation will be resolved before 1 July.

16:52

[The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)]

Diolch, Mr Williams. Prynhawn da—good afternoon to you. I congratulate the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) on securing the debate. We were not entirely sure what points he was going to raise. I gather from his introductory remarks that he was speaking on behalf of at least two construction steel producers in his constituency: T & D Cruickshanks from Kirkintilloch and Highland Galvanizers from Cumbernauld. We almost had the full set; we did not get a company from Kilsyth, but the fact that two of the three communities in the hon. Gentleman’s constituency contacted him about the matter demonstrates its importance to the firms that he represents.

I have a comprehensive brief to get through, and I believe that it anticipates all the points that the hon. Gentleman made. The area is complex, as I am sure that he realised when he briefed himself up on it. The construction products regulation is European Union legislation, which came into force across the European Union on 1 July 2013 except in the construction steel industry, which has until 1 July 2014. That legislation is applicable across all member states. It is a free trade measure that requires construction products covered by a harmonised product standard to carry the CE marking. The regulation also requires manufacturers to provide robust and reliable information in a consistent way, which benefits industry and reduces potential barriers to trade.

There are four main elements in the regime, which I will outline briefly. First, there is a suite of harmonised technical specifications that exist to establish a common approach across Europe to product standards. Industry is responsible for developing those standards, and business and the British Standards Institution play an active part in their development. Secondly, there is a requirement to affix CE marking and to provide a declaration of performance to accompany the product, setting out how it performs against the essential performance characteristics in the standard.

Thirdly, there are agreed systems to ensure the accuracy and reliability of the performance set out in the declaration of performance, which are called the assessment and verification of constancy of performance—I said that this was a complicated area. Those systems reflect the level of risk associated with the product and the potential for performance to vary. Finally, there is a framework of notified bodies, which are independent third-party organisations involved in the assessment and verification of performance. That package is designed to provide certainty for industry and remove barriers to trade while ensuring that proper safeguards are in place relating to safety.

There are more than 400 harmonised standards relating to construction products. All those, apart from in the area of construction steel, came into force on 1 July 2013. Some in the industry expressed concern about the introduction of those regulations last year. However, we have since discovered that there were significantly fewer practical problems than were feared in the other 399 areas last year.

The standard on structural steelwork is covered by BS EN 1090-1, which deals with products such as piles, columns, beams and stairs. Unlike most other construction products, the CE marking of fabricated structural steel products is not required until July 2014. That means that the industry will have had three and a half years since the publication of that standard to prepare for its implementation. The European Commission gave the industry that additional 12 months’ leeway because it recognised that there were a large number of small steelwork fabricators who would benefit from the extra time. It was anticipated that the sector might need a little more time to adapt and prepare.

The hon. Gentleman asked several questions about how prepared industry should be and whether the changes had been publicised. My Department, which leads across the UK for this area, has been working with a wide range of organisations to ensure that industry is aware and prepared. Both my Department and the Department for Business, Innovation and Skills have produced a range of information about what is required under the regulations, and there is further information and guidance on the planning portal.

However, industry is also responsible for raising awareness, and trade associations have been at the forefront of that work. I have with me the brochure produced by the British Constructional Steel Association, with assistance from Tata Steel, in July 2013—just as all the other construction standards were being introduced—to publicise further the changes that would be required this year. Larger firms in the industry, such as Tata, have played an active role in raising awareness right across their supply chain. I gather from the hon. Gentleman’s remarks that T & D Cruickshanks and Highland Galvanizers will be involved in the supply chain for larger users of their product.

Trading standards in England, Wales and Scotland will be responsible for providing advice at a local level to businesses, and they will police the regime once it is in place. In answer to a specific question asked by the hon. Gentleman, not only have officials from my Department arranged events for trading standards departments in English councils, but we have done the same for Scottish councils in general. An event was held in Motherwell in April last year to enable Scottish councils to prepare in plenty of time for the changes that will take place this year.

The hon. Gentleman also made some points about costings. I understand that the industry has expressed concerns about the costs of implementation, which principally result from the need to involve a third-party notified body to establish the performance of the product and ensure that systems are in place to maintain performance. The extent of the costs depends on the product type and generally reflects the fabricators’ existing quality systems, how involved the notified body is in establishing performance, and the ongoing monitoring of production.

For structural steelwork firms, the safety-critical nature of the product means that there is not only an initial inspection by the notified body, but subsequent routine checking of the factory production control. Many larger firms will already incur similar costs through their voluntary adoption of third-party quality control schemes. Nevertheless, we recognise that for small firms, such as those in the hon. Gentleman’s constituency, incurring such a cost could be a more significant additional burden. However, the costs arise as a result of the standards that have been developed by the industry itself and determined as proportionate to the level of risk involved. Of course, some costs may be offset against future efficiency savings resulting from quality improvement—for example, by avoiding mistakes because compliance processes are in place.

Small businesses have clearly made representations about assistance. I can speak for the situation in England, where BIS funds the manufacturing advisory service, which has been running workshops with small manufacturers. It has not only been raising awareness but providing financial assistance in the form of grants of up to £1,000 for consultancy support to help small manufacturers to comply. We understand from the Welsh Government that similar help is available in Wales—in fact, according to the figures I have found, it looks more generous. I believe that no such assistance has been provided by the Scottish Government, so I suggest that the hon. Gentleman raises the issue with his constituency counterpart in Scotland who will no doubt want to raise it in Holyrood.

The other key issue raised by the hon. Gentleman was about whether there is enough time for companies to comply with the new standard. As I have already mentioned, come July there will have been three and a half years for companies to prepare. I understand that there are also concerns about the number of bodies that can provide certification. Currently, six notified bodies are able to carry out the third-party tasks for checking the factory production control systems of structural steelwork fabricators. Officials in my Department are fast-tracking another notified body and will do the same for any other notified body that comes forward—provided, of course, that there is no risk of standards slipping as a result.

The hon. Gentleman said that Cruickshanks and Highland Galvanisers were worried that if they did not comply by 1 July 2014, business would effectively cease and operations would be suspended. There is nothing that any EU member state can do to change that date—that would be unfair to firms in the United Kingdom that have complied with it, and also to the other member states of the European Union single market. However, the policing of the regime from 1 July will be down to local authority trading standards bodies. If they discover that a firm has not complied by that date, or, indeed, if they have been notified already as a result of this debate that some firms anticipate not being able to comply, in the first instance we would expect trading standards to work with such firms and seek an explanation of the problems they are encountering.

At this point in the process, we can safely say that rumours that firms will be closed down are scaremongering. Perhaps this debate will give more publicity to the situation than would otherwise be the case. There is still plenty of time for conversations with trading standards to ensure that compliance problems and sanctions do not arise. Nevertheless, the important point that I want to get across is that all firms must get on with the process. There has been plenty of time for the rest of the construction products sector—the deadline passed last year, since when compliance problems have not been reported to us. We would urge structural steel manufacturers to adopt the same approach.

Regulations are part of an approach that seeks to promote trade and benefit business while ensuring that we have safe construction products. I am sure that the hon. Gentleman and I would be united on that, as well as on ensuring that small firms in his constituency and elsewhere in the United Kingdom do not find themselves unable to comply. There is still time for conversations with local authority trading standards officers, and with the British Constructional Steel Association itself, to find a clear way forward.

Question put and agreed to.

17:06

Sitting adjourned.

Written Statements

Wednesday 26th February 2014 Written Statements

Wednesday 26 February 2014

Prosecution Decision

Wednesday 26th February 2014 Written Statements

[The Attorney-General (Mr Dominic Grieve)]

Further to yesterday’s written statement made by my right hon. Friend the Secretary of State for Northern Ireland, and following lengthy legal argument and a 53-page judgment from the court, the prosecution of John Anthony Downey on four charges of murder and one of causing an explosion with intent arising out of the Hyde Park bombing in 1982, has been stayed.

The alleged offences arose out of the notorious bombing carried out by the Provisional Irish Republican Army in Hyde Park in the morning of Tuesday 20 July 1982. As members of the Blues and Royals Regiment of the Household Cavalry rode along South Carriage Drive on their way to Horse Guards for the Changing of the Guard, a car bomb exploded. The effect was devastating. Four of the Guard were murdered—Lieutenant Anthony Daly, who was aged 23, and Trooper Simon Tipper, who was aged 19, died at the scene; Lance Corporal Jeffrey Young, who was aged 19, died the following day; and Squadron Quartermaster Corporal Roy Bright, who was aged 36, died two days after that. A total of 31 other people were injured (a number of them seriously) and seven horses were destroyed.

John Anthony Downey was arrested on 19 May 2013 at Gatwick airport where he was en route to Greece. On his arrest he produced a letter stating that he was free to enter the jurisdiction without fear of arrest. Despite that letter he was charged by the Crown Prosecution Service (CPS) with four counts of murder. Before he was charged my consent was sought, as the law requires, for him to face a charge of causing an explosion. I gave that consent.

I believed then that it was right to do so and I remain of the same view today.

The allegations faced by Mr Downey were of the utmost seriousness. The bombing was an attempt by the Provisional IRA to bring their terrorist campaign to London and to attack armed forces personnel who were on ceremonial duties. Whatever the circumstances in which the letter had been sent, and it is now clear that its assurances were wrongly given, it was right that the matter should be tested in court. Neither I nor the CPS were prepared to accept that the letter and the circumstances in which it had been given were such as to automatically prevent Mr Downey’s prosecution.

The court has now heard full argument and has considered a great deal of documentation. The judgment given is a detailed and careful assessment of the case and the circumstances in which Mr Downey received his letter. The CPS and I do not consider it gives rise to any prospect of successful appeal, and I am therefore of the view that the matter cannot be pursued further.

My sympathies are with the families of those who died and with those who were injured.

European Environment Council

Wednesday 26th February 2014 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)]

My right hon. Friend the Secretary of State for Energy and Climate Change and I will represent the UK at the European Environment Council meeting in Brussels on 3 March. Paul Wheelhouse, Minister for Environment and Climate Change in the Scottish Government, and Alun Davies, Minister for Natural Resources and Food in the Welsh Government, will also attend.

Following the adoption of the agenda and approval of the list of “A” items, there will be a policy debate on a framework for climate and energy in the period from 2020 to 2030. Member states will be invited to discuss the framework and in particular consider two questions which have been posed by the Greek presidency. First, whether the framework provides the appropriate balance between ambition and flexibility. Secondly, what the next steps should be for the policy debate, taking into account the need to provide certainty for investors in the longer term and the forthcoming international climate negotiations. This is in the context of discussions on the 2030 framework due to take place in the March European Council.

After a series of AOB points relating to climate, Ministers will break for a working lunch. This will provide Ministers with the opportunity for a discussion on the withdrawal of the existing proposal for a soil framework directive and the means of tackling soil degradation in the future. The UK supports the objective of protecting soil but is concerned that the existing proposal lacks sufficient flexibility and could impose additional regulatory burdens. The UK therefore supports the withdrawal of the current dossier as proposed in the Commission’s communication on regulatory fitness (REFIT).

Following the lunchtime discussion, the Council will hold an exchange of views on the proposal that would allow member states to restrict or prohibit the cultivation of GMOs in their territory. Ministers will consider the presidency compromise proposal put forward after the recent General Affairs Council debate on the cultivation of a specific GM maize crop. During this debate, a significant number of member states expressed their willingness to revisit the EU legislative framework. Ministers will explore whether there is common ground to reopen the discussions on this legislative file and whether the compromise proposal offers a good basis for further technical work.

The Council will then turn to an exchange of views on non-legislative activities with regard to greening the European semester. In light of the annual growth survey 2014, Council has been asked to discuss the Europe 2020 resource efficiency and low-carbon objectives and the possible involvement of Environment Ministers in the European semester cycle. Ministers have also been asked to consider which measures are currently taken at national level in the areas of resource efficiency and climate action to achieve sustainable growth. The UK is already active in these areas and supports the objectives on sustainable growth. This discussion will be followed by a series of AOB points relating to the environment.

Over the course of the day, the following topics will be covered under “any other business”:

Information from the Commission on a clean air programme for Europe;

Information from the Czech delegation, supported by the Polish and Estonian delegations, on a review of the best available techniques reference document for large combustion plants;

Information from the Commission on the EU approach to wildlife trafficking;

Information from the Commission on the state of play of the Kyoto protocol’s second commitment period ratification;

Information from the Commission on a recommendation regarding the exploration and production of hydrocarbons using high-volume hydraulic fracturing.

Mid Staffordshire NHS Foundation Trust

Wednesday 26th February 2014 Written Statements

[The Secretary of State for Health (Mr Jeremy Hunt)]

I wish to inform the House that I have made a decision regarding the action recommended by the trust special administrators (TSAs) of Mid Staffordshire NHS Foundation Trust (Mid Staffs, or the trust), as I am required to do by section 65KB of the National Health Service Act 2006 (the 2006 Act).

A document setting out in more detail the reasons for my decision has been placed in the in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.

Local people suffered too much for too long under a system which ignored appalling failures of care in their local hospital. They now deserve to know that same system has learned the lessons and is guaranteeing high quality, safe services for local people. The proposals I am accepting today will provide just this.

The strength of public interest in the TSAs’ work, and the huge response to their consultation exercise, is a testimony to the great commitment local people have to the future of their hospitals.

I must also commend the trust’s staff, who have helped turn around the quality of care provided at Mid Staffs, and who in recent months have continued to provide quality services in the face of great uncertainty about the trust’s future. The interest, support and contributions of hon. Members have also been extremely valuable. In particular, the way in which the hon. Member for Stafford (Jeremy Lefroy) has championed the interests of local people at every stage of the process has been remarkable. I believe the proposals I am accepting today will bring about improvements for local people that reflect his continued concern for patient welfare and the future of Stafford hospital.

Today’s announcement secures a first-rate offer for local patients—something they were denied for too long. Great strides have been made towards improvement in recent years but the challenges remain stark. Without over £20 million in subsidy funding from the Department of Health in 2012 and 2013, the trust would have been unable to pay its staff and suppliers. At the same time, a number of services are being operated with consultant numbers below Royal College guidelines, and the trust has experienced ongoing challenges in recruiting and retaining staff. Patients deserve high-quality services, which are clinically sustainable.

Today’s announcement provides an assurance that the solution to the trust’s financial and clinical problems will deliver safe and high-quality services, now and into the future. I know that the TSAs and local stakeholders have worked hard to develop a set of recommendations which will achieve this.

Having considered the TSAs’ proposals in detail, I confirm I am satisfied on each of the points set out in section 65KB of the legislation, and therefore support the action recommended by the TSAs. I am also satisfied that, in accordance with my request, the TSAs have undertaken a thorough analysis and taken account appropriately of the issues regarding the four tests for reconfiguration. I am pleased that, after a long period of instability, we are able to offer the local population of Mid Staffordshire the certainty it so desperately needs.

Before turning to the detail of the proposals, I would like to remind the House of the background to the administration process at Mid Staffs. Monitor appointed an independent contingency planning team (CPT) to the trust in October 2012. In January 2013, the CPT concluded in a report for Monitor that Mid Staffs was neither clinically nor financially sustainable in its current form. In a subsequent report the CPT advised that neither the trust nor local commissioners would be able to deliver the changes required, and consequently recommended the appointment of administrators. On the basis of the CPT’s conclusions. Monitor appointed TSAs to Mid Staffs with effect from 16 April 2013. Since taking up their role, the TSAs have found no reason to dispute the CPT’s conclusions regarding the trust’s sustainability, and their analysis has only strengthened the case for change.



Since April the TSAs have been working with the trust, local commissioners and providers, and a wide range of other stakeholders, in order to develop a solution for the services at Mid Staffs. The TSAs’ final report, which has been approved by Monitor, was submitted to me on 16 January.

The TSAs’ report recommends that Mid Staffordshire NHS Foundation Trust is dissolved, and that Stafford and Cannock Chase hospitals are operated by other local providers. It is vital that this structural change is made as soon as possible to stabilise local health services. The TSAs have also proposed a clinical model for the services currently provided by the trust, which their independent clinical advisory group (made up of leading clinicians from the Royal Colleges) has confirmed will be clinically safe. I am pleased that under this model the majority of patient visits, approximately 90%, will continue to take place at Stafford and Cannock hospitals. I also welcome the enhancements proposed for a number of current services, for example, the inclusion of specialist frail and elderly support within the Medical Assessment Unit at Stafford. All of this will contribute to a much improved offer for local people.

However, to ensure this improved offer, it is clearly not possible for all of Mid Staffs’ services to go on as they are, and therefore the TSAs’ recommendations will mean moving a small minority of services away from Stafford hospital. Local people can be reassured that local commissioners would need to be satisfied that there is sufficient capacity available elsewhere before moving services. In parallel, I am asking NHS England to identify whether consultant-led obstetrics could be sustained at Mid Staffs in a safe way in the future. In doing this, NHS England will work with local commissioners as part of their wider review of the local health economy.



The TSAs’ report also identifies the funding required to support this model and I am satisfied that, in the light of intervention from the NHS Commissioning Board (also known as NHS England) in the form of time limited funding, and a commitment from commissioners to deliver further savings during and following implementation, the recommended clinical model is affordable in the medium term and, subject to the actions of local commissioners, can be a financially sustainable one. My right hon. Friend the Chief Secretary to the Treasury has expressed his support for my acceptance of the proposals.

On this basis, I am content for the proposals to proceed to implementation. I would like to emphasise the critical role commissioners have in this process, and in particular their commissioning freedom to build upon the TSAs’ recommendations, such as in maternity, where they consider this is to be sustainable and in the interests of patients. Local commissioners will also oversee and monitor local service changes as part of their ongoing commissioning responsibilities, including, where going beyond the recommendations, undertaking further public engagement where appropriate.

I therefore ask that local commissioners, local providers and all other local organisations work together during the coming months and years to implement the proposed changes, with appropriate involvement from NHS England and other national bodies, in order to secure the high-quality services that the people of Mid Staffordshire deserve.

Rail Review Update

Wednesday 26th February 2014 Written Statements

[The Secretary of State for Transport (Mr Patrick McLoughlin)]

As recommended by Richard Brown in his review into franchising and as part of June 2013’s national infrastructure plan “Investing in Britain’s Future”, my Department undertook to review Government rail functions in order to identify what actions were required to deliver those functions in the most effective and efficient way. The review has now submitted its recommendations to me. I have agreed its recommendations and implementation will begin shortly.

The review recognised that much has already been achieved since the Department’s rail functions were brought together into a single rail group in January 2013. A clear, professional franchise programme is underway, implementing Richard Brown’s review of franchising, along with the Government’s ambitious rail investment programme. Building on this progress, the review recommends further developing the Department’s rail functions as a new Rail Executive.

Creation of the Rail Executive will support the drive to strengthen our focus on passengers; build an enhanced culture of commercial expertise and innovation; and ensure greater co-ordination of improvements to track and trains. A single team will manage the interdependencies between rolling stock, track, stations, freight and passenger services; and between existing services and HS2. It will also develop an effective framework agreement for Network Rail, for September 2014, when it will be classified as public sector. A new approach to recruitment, reward and career development for commercial rail skills will allow the Rail Executive to increase capability at all levels and bolster commercial experience in the management team. This will reduce the Department’s dependency upon consultants and increase its ability to negotiate the best deal for passengers and the taxpayer.

The review recommended that there should be a clear focus on rail passenger services within the Rail Executive. This will be provided by a new Office of Rail Passenger Services, forming part of the Rail Executive, with responsibilities including delivery of the franchise programme and the management of existing franchises. It will be led by an externally recruited managing director and supported by non-executive board members.

The review has also recommended we consider a longer-term option of a new, more arm’s-length body with responsibility for rail delivery functions. The creation of the Rail Executive provides a strong foundation for such future evolution and the Government will consider moving to a more arm’s-length body in 2016.

House of Lords

Wednesday 26th February 2014 Lords Chamber

Wednesday, 26 February 2014.

15:00

Prayers—read by the Lord Bishop of Wakefield.

Death of a Member: Lord Bilston

Wednesday 26th February 2014 Lords Chamber

Announcement

15:07

[The Lord Speaker (Baroness D’Souza)]

My Lords, I regret to inform the House of the death of the noble Lord, Lord Bilston, on 25 February. On behalf of the House I extend our condolences to the noble Lord’s family and friends.

Sri Lanka

Wednesday 26th February 2014 Lords Chamber

Question

15:07

Asked by

[Lord Naseby]

To ask Her Majesty’s Government, further to the remarks by the Prime Minister on 16 November 2013 that the United Kingdom would allow Sri Lanka until March to begin credible investigations into allegations of war crimes before taking steps through the United Nations, why they are already working to influence the United Nations Human Rights Council to call for an international investigation.

[Lord Naseby (Con)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as chairman of the All-Party British-Sri Lanka Group.

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con)]

My Lords, the Prime Minister said that we will use our position on the UN Human Rights Council to call for an international investigation if credible domestic accountability processes have not begun properly by March. As with any resolution ahead of the March UNHRC, we are discussing the Sri Lanka resolution with members. The UN High Commissioner for Human Rights said this week that there were limited and piecemeal domestic steps towards accountability and recommended an international investigation.

[Lord Naseby]

I thank my noble friend but, as we are still in February, will she recognise that three things have happened recently? First, on war crimes, will the Foreign and Commonwealth Office study the evidence of the new Tamil film, “The Last Phase”? Secondly, will the Minister read Professor Moorcraft’s new book? Thirdly, on the book, Corrupted Journalism, there is now conclusive evidence that that film from Channel 4 features two key independent female witnesses, so alleged, who were in fact fully paid up members of the Tamil Tigers? Will my noble friend now publish the dispatches from our military attaché from Colombo, who witnessed the final stages of the war? Finally, will she encourage the work that South Africa and Sri Lanka are doing to construct a truth and reconciliation commission?

[Baroness Warsi]

My Lords, I note the further books and videos that have come to light in relation to these matters. Although my noble friend refers to progress that may have been made in the past two weeks, he will note that these matters have been ongoing for some five years. We have yet to see a meaningful, time-bound, independent, domestic-led political process with clear milestones in this matter. Of course, should a genuine and credible truth and reconciliation commission get under way, the UK would be prepared to support it.

[Lord Bach (Lab)]

My Lords, the Opposition support the Government’s response to this question. We ask only this: as close as we are to March now, can the Minister confirm to the House that the Prime Minister will be true to his word on this—as I am sure he will be—and that the Government will continue to work closely with the United States Administration and others at the forthcoming session of the United Nations Human Rights Council in Geneva, to which she has already referred, in order that an independent international inquiry can be set up at the earliest possible time?

[Baroness Warsi]

I thank the noble Lord for his comments. He will be aware that we co-sponsored the resolutions in 2012 and 2013. On this resolution, which goes further than those resolutions and calls for an independent investigation, we are working with like-minded members.

[Lord Avebury (LD)]

My Lords, as the Minister has reminded us, five years have elapsed since the end of hostilities and no progress has been made towards setting up a credible independent investigation into the killing of an estimated 40,000 civilians during the final weeks of the civil war. The Prime Minister is to be warmly congratulated on taking a leading role in setting the scene for the resolution at the Human Rights Council next month. Do we have confidence that we have the votes to get the resolution through, and how will the inquiry be constituted?

[Baroness Warsi]

I thank my noble friend for his support. It would be wrong for me to predict at this stage how the voting will turn out. My right honourable friend the Minister, Hugo Swire, plans to be at the Human Rights Council high-level session on Monday. We have been working with a number of countries that have indicated strong support for the resolution, but it would be wrong for me to predict at this stage what the outcome of the vote will be. We continue to work incredibly hard to make sure that we get the resolution.

[Lord Singh of Wimbledon (CB)]

My Lords, I, too, congratulate the Government on their single-minded pursuit of an international inquiry into the allegations of human rights abuse in Sri Lanka. In view of the recent disclosures about Mrs Thatcher’s Government giving support in 1984 to the Indian Government in their ruthless suppression of Sikhs, will the present Government make amends by backing growing calls, in India, here and other parts of the world, for a similar UN-backed international inquiry into the Indian Government-backed massacre of Sikhs in 1984? It is not generally known in this House or outside that in only three days more Sikhs were killed in India than the total number of those who were killed or disappeared in the 17 years of General Pinochet’s rule.

[Baroness Warsi]

The noble Lord’s question goes slightly beyond the remit of this Question. I spent an hour and a half with the noble Lord and members of the community yesterday discussing exactly this issue and what follow-up work could be done post that report. I will, of course, write to him in due course as a follow-up to that discussion.

[Lord Foulkes of Cumnock (Lab)]

I welcome what the Minister has said about the appalling human rights record in Sri Lanka. Is it not therefore rather strange that the President of Sri Lanka has been invited to participate in the ceremony in Glasgow Cathedral at the end of the Commonwealth Games to commemorate the start of the First World War? Would it not be wise to reconsider this invitation, as many organisations in Scotland are already asking?

[Baroness Warsi]

I am of the view that it is important for us maintain constructive engagement with the Government of Sri Lanka. I acknowledge that there has been some progress in relation to demining and resettlement, and that there has been some economic progress. I do not feel that completely disengaging from the Government is the right way in which to move them forward. I was not aware of that particular invitation but, at this stage, constructive engagement is the right way forward.

[Lord Howell of Guildford (Con)]

What consultations have we had with other Commonwealth Governments about the atrocities in Sri Lanka.

[Baroness Warsi]

I am not sure what specific consultations we have had with individual Commonwealth countries. It would be wrong for me to detail individually what discussions there have been. However, I can write to my noble friend and give him the details.

Succession to the Crown Act 2013

Wednesday 26th February 2014 Lords Chamber

Question

15:14

Asked by

[Lord Lexden]

To ask Her Majesty’s Government when the Succession to the Crown Act 2013 will be brought into effect.

[The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD)]

My Lords, the Succession to the Crown Act will be commenced when each Commonwealth realm has taken all steps necessary to give the changes effect in its jurisdiction.

[Lord Lexden (Con)]

I thank my noble and learned friend, who is the master of the intricacies of this legislation. Can he reaffirm that it is absolutely essential that this modernising constitutional change is implemented—and implemented fully—in all 16 realms of which Her Majesty is head of state to ensure that the Crown descends in exactly the same way in all of them. Does my noble and learned friend have any reason to anticipate that any of the realms might ultimately default on their obligations under the Perth agreement?

[Lord Wallace of Tankerness]

My Lords, I entirely agree with my noble friend that it is important that all 16 realms agree. Indeed, the intention is that when they all have put in place the necessary legislation there will be a simultaneous order to give effect in each of the realms. I make it clear that all realms that took the view that legislation is required have passed the requisite legislation, with the exception of Australia. As I informed your Lordships’ House at Third Reading, the Council of Australian Governments agreed that respective states would legislate first, requesting that the Commonwealth legislation be brought forward by the Canberra Government. To date, three states have enacted legislation; two have introduced legislation; and South Australia has yet to introduce legislation because it is in the middle of an election campaign.

[The Earl of Clancarty (CB)]

My Lords, although the new succession arrangements are to be welcomed, does the Minister not believe that it is wholly inconsistent not to similarly reform all hereditary titles so they are gender equal?

[Lord Wallace of Tankerness]

My Lords, this issue was raised during our debates. It was indicated that numerous issues would arise with regard to hereditary titles which did specifically arise with regard to the succession to the Crown—and indeed I think my noble friend Lord Lucas has a Private Member’s Bill which has had one day in Committee, where there was an opportunity to debate that issue.

[Lord Marks of Henley-on-Thames (LD)]

My Lords, with the birth of Prince George some of the urgency has gone out of the need to implement Section 1 of the Act. Does my noble and learned friend agree that it is still important, and indeed urgent, to bring Section 2 into force to start to implement the dismantling of the discrimination against Roman Catholics that has been embedded in our constitution and therefore in those of Her Majesty’s other realms for well over 300 years?

[Lord Wallace of Tankerness]

My Lords, I entirely agree with my noble friend. He is right to say that the birth of Prince George has taken away the immediacy of that particular matter, but he is also right to point out that the Act also allows someone in the line of succession to become sovereign to marry a Roman Catholic. It also removes the requirement of the heirs of George II to seek Her Majesty’s approval before they can marry—it will now be confined to first six in line to the throne.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, it is for exactly those reasons that the Opposition very much welcomed the Bill. If I understand it, it is only Australia for which we now wait. We just hope that before the Duke and Duchess of Cambridge get to Australia, it may have done the necessary. Although their first born is a son, were they to have a brace that come further, the order of succession may still be important for those subsequent children. Can the noble and learned Lord perhaps use his good endeavours to see this speedily enacted?

[Lord Wallace of Tankerness]

My Lords, it is fair to say that all the state premiers in Australia have indicated their support for this measure, and that the Commonwealth Government of Australia stand ready to put in place the necessary legislation once each of the states has enacted its legislation.

[Lord Lang of Monkton (Con)]

My Lords, does the Minister agree that this Bill, which was always a sensitive measure, becomes more sensitive with every day that passes without agreement? When the Bill passed through this House it was emphasised to us that the Bill was urgent and unamendable because all the other realms had agreed to all the principles underlying it—all the more reason, therefore, to urge my noble and learned friend to ensure that representations are made to ensure the speediest outcome in those realms that have not yet completed the process.

[Lord Wallace of Tankerness]

My Lords, as I indicated, there is only one realm that has still to legislate. Some realms took the view that, under their own laws, legislation was not required. I have indicated the position in Australia and have no reason to believe that anything other than good endeavours are being used to get the necessary legislation in place.

Travel to School: Rural Areas

Wednesday 26th February 2014 Lords Chamber

Question

15:19

Asked by

[Lord Storey]

To ask Her Majesty’s Government what support is given to young people living in rural areas to enable them to travel to school or college.

[Baroness Northover (LD)]

My Lords, all local authorities must provide free transport to children with special educational needs or a disability who are unable to walk to school, and to children aged five to 16 whose nearest suitable school is more than two miles away for children under eight and more than three miles for those aged eight to 16. There is additional support for children from lower-income families. Students over 16 can benefit from a range of discretionary or subsidised travel from the local authority and local operators and from the 16-19 Bursary Fund.

[Lord Storey (LD)]

My noble friend will be aware that young people have to stay in education or training to the age of 18 now. She will also be aware that 46% of local authorities have cut funding for bus transport. In rural areas, how does a young person who has to perhaps travel a bus journey of a couple of hours to their college, on an often infrequent service, afford these extra costs? Does she have any idea where this money could come from, as many of them now face crippling bills?

[Baroness Northover]

My Lords, it is clearly very important that young people attend college or school and we recognise that it can indeed be very costly for them to travel, especially in rural areas. Local authorities set out annually the arrangements for transport in their area. Typically, that is for young people to pay an annual fee—a fixed amount. I have a number of details of what is provided. It can be especially good value for those who live in rural areas and for particularly disadvantaged young people, as I mentioned, there is the bursary fund.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, is the noble Baroness aware that there are similar problems in cities, particularly for the young unemployed, who often have great difficulties finding the money to get to interviews that they have been required to attend to ensure they get their benefits? Given there is a possibility that benefits may be withdrawn from those over 18, is it not time to have a complete review of the way in which assistance with travel to work, to interviews, to college or to schools is given? There are many people in the country who are in receipt of benefits—I am thinking of people such as myself—who, quite frankly, do not need assistance with travel on public transport. We could have a fairer or more equitable distribution of the money, particularly for those who are unemployed or going to school or college.

[Baroness Northover]

We keep this whole area under close review. New guidance has just been issued to local authorities so that they work out with enormous care what is required in their area and assess the needs that the noble Lord has pointed to. He obviously points to an important area.

[The Lord Bishop of St Albans]

My Lords, the Church of England is deeply involved with hundreds of tiny rural schools in sparsely populated areas and is acutely aware of some of the financial difficulties that they face. When such a school has to close, what advice do Her Majesty’s Government give on the educational, financial and environmental issues—to do with sustainability—of transporting these pupils, sometimes very long distances, to the next nearest school?

[Baroness Northover]

I will write to the right reverend Prelate with details about what happens when these schools are closed. There is a special premium for rural schools of the type that he describes, which have fewer pupils than you might find elsewhere, but I will write with further details.

[Baroness Hughes of Stretford (Lab)]

My Lords, does the Minister accept that since the Government abolished the education maintenance allowance and the adult learning grant, the problems young people in the 16 to 19 age group face in getting to college, training and apprenticeships have become much worse? As she said, the role of the local authority in supporting travel costs in particular is discretionary. Although some fund significant subsidies, others do very little. In fact, in the past few weeks alone, Cumbria, North Yorkshire and Lancashire—all with extensive rural areas—have announced further cuts in their travel subsidies for young people. Why can the Government not ensure that all local authorities provide at least a minimum level of support for travel costs for young people, especially in rural areas, where costs are much higher, but also in urban areas, where there are also problems?

[Baroness Northover]

I do not accept what the noble Baroness said about the education maintenance allowance because the way that it is organised now focuses on the young people who are most at need and provides them with more generous support than was the case before. Therefore, a yearly bursary of up to £1,200 is available to young people from specific vulnerable groups. A number of these young people—roughly half—do indeed receive travel passes or tickets. The councils she mentioned still offer special discounts to students and young people even though in some instances they have increased the charges that they are making.

[Lord Bradshaw (LD)]

My Lords, I wonder whether the Minister might look at the supply side rather than the demand side of this equation. There are very strict rules about the operation of part-time buses and the collection of fares—all sorts of terrible regulations—which make it extremely difficult for communities to organise bus services to meet the needs which are quite obvious in rural areas.

[Baroness Northover]

My noble friend makes a good point. However, I would point him to the local authority guidance, which has just been reissued, because one of the things that local authorities need to do is to analyse what provision is there, what is needed and where the deficits might be.

[Baroness Farrington of Ribbleton (Lab)]

My Lords, I declare an interest as a former member of Lancashire County Council. The noble Lord, Lord Greaves, is in the Chamber: we introduced the first education maintenance allowances. Is the noble Baroness aware that I heard with some scepticism her reply that bursaries have replaced EMAs and that EMAs were too generous to young people who did not need it—none of which is true—and is she aware that in Lancashire the staying-on rate in areas such as Skelmersdale at the beginning of the 1980s shot up by 40% and those young people had to attend regularly and work hard?

[Baroness Northover]

The noble Baroness may have misunderstood or misheard what I said. What I emphasised was that the bursaries that are now given are more generous. They are targeted at those who are most vulnerable. She may very well feel that the others who do not now get the EMA may have a need that she identifies, but I am pointing out to her that the bursary is better targeted in that it is focusing on the most vulnerable and it is providing more to them, which I am sure noble Lords would support.

[Baroness Perry of Southwark (Con)]

Following on from the right reverend Prelate’s intervention, does my noble friend agree that rather than closing rural schools it might sometimes make sense to bus the children from an overcrowded city school and take them out to the pleasant air of a country school so that they could enjoy the very good teaching that one often finds in small rural schools?

[Baroness Northover]

That is a novel and interesting idea and I should think the children would welcome that. But as I said earlier, we have special funding to try to keep open some of these rural schools. In doing my research for this, one thing that I was encouraged by was the fact that 48% of primary schoolchildren in Britain walk to school, and I think that is excellent.

[Baroness Maddock (LD)]

My Lords, I wonder whether my noble friend, when looking at the review she talked about, could look at what has happened in north Northumberland. When the Liberal Democrats took over the council, they instigated free transport for those aged over 16. We have a very low level of take-up of further and higher education in this part of the country and I hope she will look at this because it increased the numbers of students who took up further education. I hope that, like me, she is rather concerned that now the council is being run by Labour, it is proposing to do away with this.

[Baroness Northover]

I will indeed take that example back. As I said at the beginning, it is extremely important to keep young people in education and training. Having just come back from India, I am well aware that we are part of a global situation, and we have to ensure that our children are as best educated and skilled as possible.

NHS: General Practitioners

Wednesday 26th February 2014 Lords Chamber

Question

15:29

Asked by

[Lord Hunt of Kings Heath]

To ask Her Majesty’s Government what action they are taking to ensure that patients can get an appointment with their general practitioner.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and refer noble Lords to my health interests in the register.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, the GP patient survey showed that the vast majority of patients are satisfied with their GP and rated their experience of making an appointment as good. To improve access further we have announced a £50 million fund to support GP practices in improving services and access for their patients. We have also reduced the quality and outcomes framework, the QOF, by more than a third. This will free up space for GPs to provide more personalised care. In addition, by March 2015, all practices will have the facilities to offer online appointment booking and repeat prescription services, increasing ease of access to GP services.

[Lord Hunt of Kings Heath]

My Lords, the noble Earl will know that the analysis by the Royal College of General Practitioners at the weekend showed, according to its work, that 10% of patients were finding it difficult to find an appointment with their general practitioner. Can the noble Earl tell the House what the Government are going to do about that? Does he agree that as hospitals are now moving to full seven-day working, the accessibility of primary care must be improved?

[Earl Howe]

I do agree with the noble Lord’s final comment in particular. We know that GPs are hard pressed. GP consultation rates have risen by 40% since 1995. We therefore need to take several steps to address that. One is in the medium to longer term: we need more GPs, and we have tasked Health Education England to ensure that at least 50% of medical students move to the GP specialty. In the immediate term, there are the measures that I mentioned relating to the GP contract and the £50 million fund, both of which are designed to make the use of GPs’ time a lot more productive than it is at present.

[Lord Forsyth of Drumlean (Con)]

Can my noble friend tell me whether the previous Labour Government’s negotiation of the GP contract, which resulted in GPs being less available but being considerably better paid, may have something to do with the difficulties that we are now experiencing?

[Earl Howe]

My Lords, the resources that have been devoted to GP practice and primary care have gone up by a third in real terms since 2002. A lot of that was due to the revised GP contract. Unfortunately, that contract also allowed GP practices to opt out of out-of-hours care which, over time, has meant that patients have found it more difficult to access their GPs at evenings and weekends.

[Baroness Meacher (CB)]

My Lords, very much respecting the point about out-of-hours care, I am aware of a number of practices that are finding it extremely difficult now to recruit GPs. Will the Minister undertake a review of the impact of the now falling GP pay on recruitment and therefore on the capacity of patients to obtain appointments?

[Earl Howe]

The noble Baroness raises a very important issue. I can tell her that the department and Health Education England have commissioned an in-depth review of the GP workforce looking towards a more sustainable solution for the longer term. The final report will be published in the summer. The preliminary report suggests that increasing the supply of practice nurses and greater collaboration with specialists may help to improve effective workforce supply.

[Baroness Wall of New Barnet (Lab)]

I follow on from the question of my noble friend Lord Hunt and the Minister’s acknowledgement that the effectiveness of primary care needs to be improved. I agree with what the Minister said about the improvement in some GP services, but still many individuals come to A&E at all times, whether the surgery is open or otherwise, which makes things very difficult. For instance, Barnet Hospital received 117 ambulances yesterday, which made it extremely difficult to deal with people who had walked in, who probably could have had their treatment somewhere else.

[Earl Howe]

The noble Baroness is quite right. The NHS is seeing an extra 1 million patients in A&E compared to three years ago. Despite the additional workload, it is generally coping very well although we know that departments are under strain. This is not just about A&E, as the noble Baroness will be aware, but about how the NHS works as a whole: how it works with other areas, such as social care, and how it deals with an ageing population and more people with long-term conditions. Dealing with all that means looking at the underlying causes, and that work is going on at the moment in NHS England.

[Lord McColl of Dulwich (Con)]

Does the Minister agree that it was very unfortunate indeed that certain politicians, who shall remain nameless, said to the general practitioners: “We know what you’re doing. You should have been working but you were on the golf course and, from now on, we’re going to pay you only for what you do”? The general practitioners thought this was a rather good idea, because it resulted in a substantial pay rise.

[Earl Howe]

My Lords, there is no doubt that the general practitioners bit the Government of the day’s hand off, 10 years ago, and they had every reason to do so with the money that was being offered to them. However, while a feature of that contract was the quality and outcomes framework, which was a good idea in itself, it has resulted in a lot of box-ticking for GPs and it is that element which we have drastically reduced in the contract for next year. That will be helpful in freeing up GPs’ time.

[Baroness Finlay of Llandaff (CB)]

My Lords—

[Lord Grocott (Lab)]

My Lords—

[The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford) (Con)]

My Lords, it is the turn of the Labour Party.

[Lord Grocott]

As the Minister was tempted, perhaps a little unwisely, to go down memory lane by way of explaining the current circumstances in the health service, perhaps I could tempt him to go a little further back down it by reminding him that it was the Labour Party which built the National Health Service in the teeth of Tory opposition. If you want to have the health service maintained in future, the secret is to get a Labour Government.

[Earl Howe]

My Lords, the current Government have maintained funding for the National Health Service; that is contrary to the Labour Party manifesto of 2010, which promised to cut funding to the National Health Service.

[Baroness Manzoor (LD)]

My Lords, I am fortunate that I am registered with an excellent GP practice which is well run, accessible and innovative. Over the last 30 years, I have seen significant improvements, and not only in the range of services that the practice provides. Who is responsible for ensuring that GPs are learning from other GPs the excellent practices which are available across the country?

[Earl Howe]

My Lords, there is a variety of means to ensure that GPs have continuous professional development. It is partly up to Health Education England to see that that happens and that there is peer-to-peer learning and review. Clinical commissioning groups also have an interest in ensuring that the quality of service provided by every member practice is of an equally high standard.

Public Bodies (Merger of the Director of Public Prosecutions and the Director of Revenue and Customs Prosecutions) Order 2014

Wednesday 26th February 2014 Lords Chamber

Motion to Approve

15:38

Moved by

[Lord Faulks]

That the draft order laid before the House on 16 December 2013 be approved.

Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 27th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 24 February.

Motion agreed.

Electoral Registration and Administration Act 2013 (Transitional Provisions) (Amendment) Order 2014

Wednesday 26th February 2014 Lords Chamber

Electoral Registration (Disclosure of Electoral Registers) (Amendment) Regulations 2014

Motions to Approve

15:38

Moved by

[Lord Wallace of Saltaire]

That the draft order and regulations laid before the House on 30 January and 3 February be approved.

Relevant document: 21st Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 24 February.

Motions agreed.

Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014

Wednesday 26th February 2014 Lords Chamber

National Minimum Wage (Amendment) Regulations 2014

National Minimum Wage (Variation of Financial Penalty) Regulations 2014

Motions to Approve

15:39

Moved by

[Viscount Younger of Leckie]

That the draft order and regulations laid before the House on 18 December 2013 and 14 January be approved.

Relevant document: 19th Report from the Joint Committee on Statutory Instruments. Considered in Grand Committee on 24 February.

Motions agreed.

Pensions Bill

Wednesday 26th February 2014 Lords Chamber

Report (2nd Day)

15:39

Clause 33: Automatic transfer of pension benefits etc

Amendment 23

Moved by

[Baroness Sherlock]

23: Clause 33, page 16, line 37, leave out “of which the person is an active member”

[Baroness Sherlock (Lab)]

My Lords, I remind the House of my registered interest as the senior independent director of the Financial Ombudsman Service. Amendment 23 stands in my name and in the names of my noble friends Lord Hutton and Lady Drake. In moving Amendment 23, I shall speak also to the other amendments in this group. These amendments may look lengthy but their aim is remarkably precise.

Amendment 23 is very simple. It would retain the power of the Secretary of State to put into place the consolidation of small pots but would remove the part of the sentence that limits this to the “pot follows member” form of consolidation. This sounds technical but really it is not; it is about fairness. As the state is enrolling people into a pension scheme without their explicit consent, surely it has a very high duty of care to them to ensure that the money they are putting aside is not lost through excessive charges or poor investment choices driven by inadequate governance.

“Pot follows member”, or PFM in the jargon, is the Government’s solution to a problem. I shall comment on the problem, demonstrate why I believe that the Government’s proposed solution is flawed and propose an alternative. The Government believe that action is needed to address the large number of dormant small pension pots that arise under auto-enrolment when employees move to new jobs, which they do on average 11 times in their career. We on these Benches agree that action is needed but we do not agree with the form of action proposed. The impact assessment confirms that the Government considered two default transfer options: first, pot follows member, where the small pension pot would follow the member to their new employer’s pension scheme; secondly, an aggregator scheme, where small pension pots would be transferred to an aggregator, such as NEST. The Government had two options but I believe that they chose the wrong one. However, I do not propose to substitute my judgment for that of the Government; rather, this amendment would simply increase the choice available to them. As it stands, Clause 32 allows only for pot follows member. Our amendments would enable the possibility of the Government using an alternative default aggregator model without the need for new primary legislation.

I would like to set out the context. The core issues of trust and confidence are still centre stage in getting people to start, and continue, saving for their retirement. This Bill, and auto-enrolment itself, should give people the confidence they need to save for their old age, but how can we demand that people save if they do not trust the savings vehicles and do not trust the pensions market as offering value for money? The pensions market is not a typical retail market where the consumer chooses the product. Under auto-enrolment, the consumer does not choose the product; the employer does. The only choice for the employee is either to stay in or to opt out and lose the employer’s contribution to their pension. There are also many intermediaries in the pension supply chain. Pensions are complex products, lacking transparency. While many large employers may have the resources to pay for good product advice or assessment of fund performance, SMEs may not. The demand side is weak.

15:45

The pensions market has some very big players that offer pension fund products but also asset management and annuities. The OFT says that the four largest players have 61% of the members, 68% of the assets and 76% of the schemes. The results are predictable. The combination of a concentrated supply side and a weak demand side is bad for savers and allows the conflicts between the two to go unresolved, against the interests of savers. These characteristics of the pensions market combine, as the OFT’s excellent report says, to make the market dysfunctional. The OFT concluded that,

“competition cannot be relied upon to ensure value for money for savers in the DC workplace pensions market”.

Later amendments deal with other criticisms raised by the OFT, but Amendment 23 and its associated amendments deal specifically with the challenges of small pension pots created by auto-enrolment. The Government themselves estimate that 50 million pension pots will be created by auto-enrolment by 2050, 12 million of them under £2,000. Already one person in six has lost track of their pension pots, and there are 1 million unclaimed pension pots with less than £3,000 in them. The Government estimate that pot follows member will result in 27% of the workforce having more than five pension pots. The evidence is clear that a default consolidation mechanism is needed for those people who do not make an active choice to transfer their pension at the point of movement. The point at issue is how best to do this. The Government have chosen pot follows member but, given the state of the market, so well captured in the OFT report, pot follows member carries some really significant risks. There are major challenges associated with setting up and administering it. There have also been some significant criticisms of the pot follows member model of consolidation, as my noble friend Lady Drake explained very cogently at Second Reading. The National Association of Pension Funds concluded that the pot follows member system,

“could harm members’ savings and would be disproportionately complex for the industry to implement. We estimate that savers could lose a sizeable proportion of their savings if they move from a good scheme, with low charges and good governance, into a bad scheme with high charges and poor governance. This approach also exposes individuals’ entire savings to market risk when they transfer”.

We need to find a solution that helps savers but does not expose them to unnecessary risks. I should be very grateful if the Minister would respond in detail to those criticisms of pot follows member when he replies today.

I also invite him to tell the House which organisations in the field of pensions are backing pot follows member as a solution to this problem. I believe that the Association of British Insurers is, but will he list the other organisations for us today? Will he also tell us why he does not seem to have given any weight to consumer opinion? The DWP’s survey showed that 61% of respondents would choose an aggregator. That is the alternative. By contrast, the National Association of Pension Funds, the Cass Pensions Institute, Which?, the CBI, the EEF, Age UK, the TUC and the Centre for Policy Studies all prefer an aggregator model of consolidating pension funds. That is a pretty broad church of employers, staff representatives, consumer interest groups, academics and independent experts. They all believe that aggregators will meet the needs of savers better and, I suggest, the needs of employers.

There are different ways to pursue aggregators. We know that the NEST model works well. Cass and the NAPF have other ideas about ways to do it. I have carefully not sought to prescribe an aggregator in detail in this amendment, although I think we should take the opportunity to hardwire into aggregators features that will inspire trust and confidence and reassure savers who are understandably sceptical of the pensions industry, including the certification of aggregators and a public service obligation which would require them to accept automatic transfers in from pension schemes. The NAPF advocates a robust regulatory framework for aggregators and suggests that quality standards could be set so high that it is likely that only a small number of aggregators would be accredited.

We all want the consolidation of small pension pots and we all want an automatic transfer system. Our preference is for an aggregator model, but all we are asking for in our amendments is to allow further work to be done and for the possibility of aggregators to be the choice rather than what the Government have done, which is to restrict the choice only to pot follows member. If our amendment were accepted, the Government would have the opportunity for further investigation without the need for additional primary legislation.

I think many in this field suspect that the Pensions Minister came to a fork in the road and chose the wrong fork. I understand that. I have done it myself in my time. I suspect the Minister realises now that he made a mistake, but he may just feel that he is too far down that road to turn back. We have the chance to build a bridge back to the main road where he can reflect further on the choices available to him. If he then decides he wants to stay with pot follows member, he may do so, but let us give him the chance to think again, not for our sake, but for the sake of all those workers who are doing the right thing and, despite cost of living pressures, are managing to put aside hard-earned money towards the cost of their retirement. I beg to move.

[Baroness Drake (Lab)]

My Lords, I speak to Amendment 23 and the associated amendments to Schedule 17. I declare my interests as a trustee of both the Santander and Telefónica pension schemes, and as a member of the NAPF pension quality mark board.

It is clear that the Government are right that a solution is needed for millions of dormant small pots arising under auto-enrolment because of the large number of workplace schemes and the frequency with which workers change employers. The Government are right that neither scheme members nor providers benefit from workers leaving behind small pots as they move from job to job. The Bill gives the Secretary of State the power to make regulations to transfer automatically small pots to form, and keep track of, bigger, more efficient pots. The contentious issue is what the default transfer solution should be.

The Government, as my noble friend has said, has chosen pot follows member, whereby a small pension pot automatically follows a member to their new employer’s pension scheme, rather than the alternative of small pots being transferred to an aggregator scheme which consolidates all the small pots accumulated by an individual each time they change their employer. The Association of British Insurers supports this view but, as my noble friend has pointed out, many others—the Confederation of British Industry, the NAPF, the Cass Pensions Institute, Which?, EEF, Age UK, the TUC, the centre for pension studies and others—believe that pot follows member has a number of inherent risks and weaknesses.

The amendment retains the power of the Secretary of State to make regulations to transfer small pots automatically, but not the requirement that this must be through PFM. It allows time for further consideration by the Government without excluding any particular solution, as the consequences of getting this wrong are absolutely huge. PFM cannot be implemented without raising quality standards, or the Government risk transferring the savings of millions of ordinary people into many thousands of different schemes over which they have very little quality control.

Confidence that quality standards would be raised sufficiently has also been dented by the decision to defer introducing a charges cap, increasing the risk of saver detriment. PFM also increases the risks of charges and transaction costs being incurred on the whole pension pot as it moves with each job change, rather than on the incremental amount saved with the previous employers. Savings would be switched out of investment assets into cash, then reinvested with every job change, exposing workers to repeated transaction costs, extra investment risk and the risk of being switched out of low-risk lifestyle funds as they approach retirement. The more frequent the change of job, the greater the risks—risks that an aggregator could reduce.

The impact assessment acknowledges that individuals may be better or worse off, depending on the charges or the performance of the investment fund into the scheme into which they are transferred. However, the DWP expects,

“the gains and losses from differences between scheme charges and investment performance to cancel out on average”.

However, there is no consolation for individuals if their higher charges on transfer are off-set by another’s lower charges. An automatic transfer solution, using a limited number of aggregators, can require them to deliver a low-charge, high-quality standard, so mitigating the risk of saver detriment overall on transfer.

All qualifying automatic enrolment schemes should meet minimum standards, but regulating for differences in quality between schemes is impossible. There will always be a wide range between minimum standards and best practice. PFM fails to work for everyone, as it only transfers a pension pot into a workplace scheme of which an individual is an active member. It fails those who leave the workforce or become self-employed, as they are no longer active in an employer’s scheme. Their small pots are left to flounder. Employers may even default their small pot into a poorer-quality personal pension because they simply do not allow ex-employees to remain in their existing scheme. By comparison, an aggregator does not require a worker to be an active member, so it can cater for more people. PFM increases administrative burdens on employers, obliging every workplace scheme to be capable of communicating with every other scheme. Aggregators reduce this burden as there would be only a few schemes in which to transfer. Auto-enrolment was intended to carry a lighter regulatory burden on employers, especially SMEs. However, PFM rows in the opposite direction.

DWP modelling suggests that for any pot size, the aggregator will achieve slightly less consolidation with PFM, and that irrespective of pot size limit, the aggregator model would achieve at best only half of the net present value of the economic benefit of the PFM approach. DWP modelled pot follows member and aggregator over a range of pot size transfer limits, initially setting a £2,000 pot limit for aggregators while modelling PFM up to £20,000. After protests, it issued an ad hoc release, modelling the limit for aggregators up to £20,000. The Government argue that an aggregator solution would require transfers to be restricted to pots of £2,000 or less rather than the £10,000 intended for pot follows member, a figure suggested by providers to ensure that aggregators did not dominate the market and upset competition. The whole analysis underpinning auto-enrolment, the building of NEST and the need to regulate value for money is based on massive market failure and the inability to rely on fair competition. A hypothesis that dominant aggregators might emerge is not a valid argument against aggregation at higher pot levels.

The assertion that the aggregator model would achieve only half of the net present value of the PFM approach assumes a one-off cost of £105 to transfer a pot and a PFM, and a saving of £20 each year from not having to administer annually a transferred pot. However, if that saving and assumption, an uncertainty in itself, turns out to be lower, the economic advantage of PFM also falls.

The DWP assumes that an aggregator cannot hold live pots, but if employers were also allowed to use a good-quality aggregator as their scheme, it could provide pension portability to many members, removing the need for transfers at all when they change jobs, and the costs that would go with it. The Government impact assessment accepts that it would be more efficient to use existing schemes as aggregators because,

“active members would be saving in the scheme that also holds their dormant pots”,

but they fail to reflect this concession in their own modelling.

As my noble friend said, there are significant delivery challenges with PFM. The Government believe that in the long term PFM will deliver low charges for savers due to efficiency savings made by the industry having to manage fewer small pots. However, those savings are by no means assured. The impact assessment acknowledges that,

“there is a risk that some providers will not experience the resource savings projected”,

that,

“trying to estimate the cost of administrative processes many years ahead is fraught with difficulties and is a key uncertainty over the estimated cost savings”,

and that the,

“wide range of estimates provided … in discussions with stakeholders suggests there may be some genuine variation across providers”.

To be successful and to be delivered, PFM requires pan-industry collaboration. There are significant technical challenges for it to be delivered. The DWP is working with providers to find an industry-led IT solution. However, what happens if the direction of travel gets too tough and they disagree with the Government or with each other—not an infrequent occurrence? Do we get another deferral?

The unresolved weaknesses in the pot follows member solution are apparent in the inherent risks, the uncertainties in key assumptions and the delivery challenges. The transfer solution chosen by the Government must give greater confidence to mitigating saver detriment. This amendment reflects the very real concerns that not only I but many others have expressed, but it retains the power of the Secretary of State to make regulations automatically to transfer small pots while allowing him to give more time to detailed consideration on the model of the solution.

16:00

[Lord Turner of Ecchinswell (CB)]

My Lords, we have before us this afternoon a series of interconnected issues —the one of aggregation versus pot follows members, the issue of charge caps and the issue of transparency of charges. They are all related, because they are all to do with the absolute importance of getting value for money for pensioners. When we did the work of the Pensions Commission some eight years ago, the commissioners had two main concerns about the existing system of private pension provision. The first was a low level of participation and savings, and the second was very poor value for money—the phenomenon of many people, particularly those working for small and medium-sized enterprises and on a lower income, who paid fees such that by the time they came to retirement 25%, 30% or even 40% of their entire pension pot had disappeared in the fees charged to them.

Auto-enrolment addresses the issue of participation and, to a degree, that of cost, because it has removed some of the selling costs involved. It is essential to address the other issues driving costs, of which one is the proliferation of pots and the administration cost that comes with it. Therefore, it is good that there is a strong consensus that we need some form of policy intervention to arrive at a better consolidation of pots. I would accept that it could be done either way—by pot follows member or by aggregators—but I have not been convinced by the arguments that pot follows member is the superior route.

Part of the logic originally put forward, as the noble Baroness, Lady Drake, has said, was I think completely false—the idea that, if we had aggregation, we had to limit the transfer of the pots to only £2,000 versus a much higher transfer amount that would be allowed for pot follows members. There was absolutely no logic to that assumption. Indeed, I stress the point that there is no logic in any limit on transfers at all. The logic put forward by the impact assessment is that we need to avoid too much concentration of provision in this industry, so that a cap on transfers makes sure that the business is shared around in a fair fashion for lots of different providers. But it is very clear from the OFT work that this is not a market in which market competition works well, and the aim is not to have competition for its own sake; having a large number of competitors for its own sake is not an end. Competition is a good thing if it produces better value for consumers. If it is the case that aggregation into a relatively small number of aggregators will result in lower costs to savers, that should be our preferred route—one that is best for customers, not one that tries to spread the business around as a form of fairness to those already providers in the market. As a very thoughtful paper produced by the Centre for Policy Studies put it:

“The proposed pot size limit on transfers serves no consumer purpose: it should be scrapped”.

If we accept the logic that we should be allowing full transfers of whatever amount people have to enable us to get to what the Secretary of State called one big fat pot, that highlights one of the real dangers in pot follows member and makes it even greater—the danger that people can see their funds transferred into a higher charge scheme. Suppose someone has been in a NEST-administered scheme with one employer, paying 50 basis points—0.5%—for a default fund investment and then changes jobs and moves to a new employer who has chosen a scheme with a higher charge rate—perhaps 75 or 100 basis points. They will have originally made a decision to accept auto-enrolment on the basis of one set of charges but now we decide, in an Act of Parliament, to transfer them to somewhere where they will face higher charges in a way which, as I highlighted earlier, has not just a marginal but a huge effect on the amount of money they pay in charges and, therefore, on their pension for the whole of their retirement.

If we were committed to having in place very robust rules on the charge cap—this is why the issues before us this afternoon are somewhat linked—so that, for instance, we were confident that, if you had pot follows member, you would be going from a 50 basis point fund in NEST to a 50 basis point fund in where you had been transferred to, I accept that the decision might be a bit more balanced, although I think the other arguments that the noble Baroness, Lady Drake, put forward would still apply. However, we do not have that robust commitment in relation to the principle of a charge cap, let alone that it should be set at something like 0.5%. In the absence of that, we should not preclude the option of aggregation, which may well prove a more effective route to get to the low costs that we require above all for savers.

[Lord Hutton of Furness (Lab)]

My Lords, I am happy to have the opportunity to make a brief contribution to the debate on this amendment. It is the first time that I have put my name to an amendment in this House. I have done so because I believe that this is a very important point in the progress of the Bill. Clause 33 is to be welcomed in principle. It is the first time that a Government have addressed the problem of the large number of small pension pots that are out there. We need a solution to that problem, so I absolutely welcome the Government’s attention to this policy. We all know that one of the by-products of auto-enrolment —it is a very good policy which clearly at this early stage is encouraging more people to save—is that we will see many more of these small pots created. It is certainly not in the interests of pension savers for these small pots simply to stay where they are.

I do not want to repeat the very able arguments put by my noble friend on the Front Bench, by my noble friend Lady Drake and, indeed, by my noble friend Lord Turner, but I will make a slightly different point. Your Lordships’ House has heard the technical arguments, which are complicated and difficult to digest. I come at this debate from a slightly different angle, having been a former Pensions Minister. There are many other former Ministers in this House and I hope that the international fraternity of former Ministers, who are represented so well in this House, will understand this point. There comes a moment in the gestation of any policy when it is necessary to take a step back to be sure about it and to satisfy yourself that the policy is the right one—particularly given the fact that, as my noble friend Lord Turner said, if we do not amend the Bill, we will make the transfer of these pension pots compulsory and run the risk that people could lose out. That is a real hazard of which we need to be aware. In my experience, the best time to take that pause is before you take that step; you should not to do so once you are committed to it, perhaps irrevocably, and when some people will lose out as a result.

I have been in this House and another place long enough to know the difference between a destructive amendment and a helpful one. I definitely would not have put my name to this amendment if I thought that it was in any way a torpedo below the waterline of the Government’s policy. It gives the Government the opportunity to take stock of the situation. There are serious concerns about the impact assessment undertaken to support the policy. Many others have spoken of their concerns about the impact assessment. It would be a misstep on the part of this House to take a decision on the basis of what we have been presented with. The impact assessment is simply not reliable enough.

All the amendment does is invite the Government to take another look at this policy. It does not rule out pot following member, if that is what the Government are committed to doing; it simply gives them the opportunity, without coming back to this place, to follow the path of aggregation. Many of us believe that the opportunities of aggregation have not been fairly and fully explored by the Government. We should look again at the issue of aggregation, but I do not want to mandate that as a policy for the Government. That would not be right, but it would be absolutely sensible and in the interests of millions of pension savers for us, at this very late hour, to take a step back—not to rule out the possibility that this might be the eventual path that we follow, but to allow us, and Ministers in particular, to take another look at the benefits of aggregation. I genuinely think that that would be the right course of action for Ministers to take at this moment, and I hope that the House agrees with that.

[Lord Stoneham of Droxford (LD)]

My Lords, it is a good thing that in this debate no one disputes the need to consolidate pension pots to ensure that savers keep track of their pension savings and get the best return with the lowest charges. Nor does anyone dispute that inertia is an accepted principle to encourage savings through auto-enrolment, and should now be followed to encourage consolidation of pension pots. Let us remind ourselves that this measure covers people who do not want to opt to do things according to their own decision. It deals with people who are not at the moment making a decision as to what to do with their pension pots and it runs the risk of leaving them stranded.

We have to make a choice between two options—pot follows member to their new employer or the aggregator system. Let us also remember that this amendment merely delays a decision in order to allow more consideration. I do not want to make a political point, but this issue should have been addressed earlier and the problem is mounting. We know that in Australia, for example, as a result of changes made 20 years ago, there are 30 million stranded pension pots. That demonstrates that the sooner we get a consolidation process in place the better.

I have spent the past couple of weeks since Committee looking at the alternatives. One thing I think that we have to challenge is the ongoing closed nature of the pension sector, which relies on passive, uninformed and, sadly, often uninterested consumers, while the providers have a self-interest in prolonging obscurity and lack of information, leading to higher charges and lower performance.

The aggregator model basically assumes that competition and greater accountability cannot open up this marketplace. However, there is no clear proposition of what the aggregator model will actually be like. Will it rely on a small number of large schemes dominating the market, or will there be an unlimited aggregator model in which any scheme that meets certain criteria on charges and governance can act as an aggregator? There is no clarity about who will be responsible for selecting the aggregator scheme for the individual’s pot as it is to be transferred on moving jobs. Would it be done by the individual’s old employer, the old scheme, the new employer, the new scheme or by some form of automatic allocation?

The aggregator model is promoted as a safe haven for accumulated pension savings, with the implication that higher governance standards and restricted charging will offer greater security than pot follows member. I have to say that there is a difference in outlook on the process of reform between the two sides of the House on this issue. The aggregator model, by breaking the link with the employer’s current live scheme, will make it more difficult for individuals to understand where their money is and to engage with their retirement savings. An aggregator model will be a further distortion of competition in the pensions sector. We know that the sector is overconcentrated at the moment; we will merely be making it worse. Size also promotes complacency and inefficiency, and could increase risk where competition is weaker. It does not seem logical to attack regulated cartels in the energy and banking sectors but promote them in the pensions sector. The aggregator model will exploit inertia, too. Once the aggregator has the worker’s first pot, it is likely to receive subsequent pots because the consumer will make no active choice and there will be no incentive to innovate or improve performance.

In the member follows pot proposal we are providing two countervailing forces. There will be greater transparency for the consumer, who will remain close to their pot and will have a greater opportunity to understand the pension provision they are making, as well as its return and its charges. The employer will also be motivated to make the best provision for their staff in order to motivate them and keep them. The pot follows member proposal would be a more natural evolution of the market. An aggregator would be an irreversible sea change, as so much money would be concentrated in aggregator schemes that you would not be able to change the consolidation model without breaking up the aggregators.

16:15

Are we also saying that we could accept two standards of regulation: one for the aggregators and minimum standards for the rest? I do not think that that would be acceptable. We need good, not minimum, standards throughout the sector, and employers and employees would be more interested in achieving this if they were both directly involved. Pot follows member is simpler to understand for the consumer, and surveys suggest that it is what the consumer wants. There is a dispute about the questions being asked but I think that simpler is always better than complexity.

Of course, we still need to see the regulation standards that will be set. We will need an economic and practical transfer system. We will need to cope with consumers leaving employment and going off into self-employment. We also need to deal with the current backlog of stranded pots. However, above all, we need to move forward on this before the problem gets greater and the advances of auto-enrolment are undermined by a vast number of lost and unaccountable pension pots.

[Lord Flight (Con)]

My Lords, the noble Lord, Lord Stoneham, has made some very good arguments in favour of pot follows member, but I want to start—and I want to be sure that there is absolute clarity here—on the question of individuals having a choice about where they consolidate their pension savings. We are talking about the default option in discussing pot follows member versus aggregator and no more than that. When an individual joins a company scheme on moving jobs, it is quite important that he is able to choose where to consolidate his pension.

In terms of the default option, first, I have always felt strongly that the argument against the aggregator arrangements is: who chooses? That point was made by the noble Lord, Lord Stoneham. I cannot really see who is in an appropriate position to choose if we go to aggregators. Secondly, aside from the cartel point, the larger the amounts of money, the more difficult it becomes to manage that money. A whole lot of potential investments almost get ruled out because the market capitalisation of firms is not sufficiently large. Therefore, I do not see there being a huge virtue in having a limited number of colossal managers. I might add that NEST’s charges do not seem to be particularly competitive, particularly for the earlier years of membership.

To a certain extent, I believe that there are arguments for keeping all doors open but I do not feel that the case for the aggregator has by any means been won. On balance, I think that pot follows member is a better solution, essentially for the reasons given by the noble Lord, Lord Stoneham, although I shall not repeat them.

[Lord German (LD)]

My Lords, I shall try not to repeat the remarks of my noble friends Lord Stoneham or Lord Flight, but my noble friend Lord Flight makes a very important point about the default choice which is before people. That is what this amendment must seek to address but I think that it fails to do so. Noble Lords will recognise that what we have before us is a debate about either pot follows member or the aggregator; it is not a debate about choice. Except for the noble Lord, Lord Turner, who said that under certain conditions, the balance might be right, it is clear that those on the Labour Benches want to see an aggregator policy.

I accept that that is the purpose behind the amendment but that is why it is important to examine these issues. I shall say a few words about why we must have some form of automatic transfers of pensions. The main beneficiaries of automatic transfers are those people who, for the first time, are saving for their retirement, following automatic enrolment into a workplace pension, and then move jobs, leaving behind a small pension pot. A system of automatic transfers is necessary to stop the proliferation of small pots that will ensue as a by-product of automatic enrolment. The average worker in this country will have 11 jobs in the course of their working life. Automatic enrolment by 2018 will probably have 9 million people within it, and maybe even 10 million by 2020 who are new savers, saving more for their retirement than their work-based pensions. These are people who are being automatically enrolled. If we took no action the projection is that there will be around 50 million dormant workplace defined contribution pension pots within the system by 2050.

A successful system must focus on the interests of the member, allowing them to consolidate their pension savings. I notice that the noble Lord, Lord Monks, is not in his place but he is a trustee of the NOW: Pensions fund. His fund conducted research of more than 2,000 21 year-old plus people with at least one workplace pension. The result was quite clear: 39% of the individuals surveyed said that pot follows member was their preferred option compared to just 6% for the aggregator model. It was suggested that the aggregator model is so difficult to understand that people chose the easier one because they recognised its simplicity. Is it not the case that we are looking for simplicity? People were asked, “Do you want your pension to follow you, or do you want it placed somewhere else, which will be some distance from you both in employment terms and in being able to influence what it does?” People in that survey, which is probably one of the most comprehensive that we have had, said, given the choice, they preferred to have their pot following them when they changed jobs.

That suggests that explaining an aggregator model to the public, who do not understand the pensions market well anyway, would be much more of a challenge. People will not understand what is being made of their pension, seeing it going away to a distant aggregator, compared to the idea that their pension moves with them to their new employer. I do not believe that there is evidence that the interests of individuals would be best served by the undefined aggregator system. It will be difficult to administer, as my noble friend Lord Stoneham said, and will lead to the market being dominated by a few large schemes and providers, and where everyone will be guaranteed to have two pensions rather than one.

The issue raised by the noble Lord, Lord Turner, and by the noble Baroness, Lady Drake, about quality is crucial. I recognise, as we all do, that the OFT in its report on DC pension schemes said clearly that competition was not driving good value for money for all savers. That is precisely why the Government intend to legislate, and we are seeing some of that today at Clause 43 and Schedule 18, which the Government are dealing with. The whole process of raising the standard is crucial—most importantly, perhaps on charges. Perhaps my noble friend can confirm that it is the Government’s intention to introduce matters in relation to charging before the end of this Parliament.

I believe, too, that we have to consider the choices that people will have to make. Who will decide where an aggregator policy for them will be placed? How would the allocation process work? Would it be by a random list, a computer allocation or perhaps names in a hat? These are all unknowns. What happens to people’s pensions which are forced on them when they move jobs under the aggregator system is very unsatisfactory. Far better that they should have a simple system in which they have one contract with one pension which they take through with them.

However, the crucial factor is the standards that each of these pensions schemes have applied to them. That is why I welcome the Government’s initiative. I know that by the end of this year they will introduce proposals to ensure that the standards are right. As my noble friend Lord Stoneham said, we are looking for high standards, not a minimum standard, in this process.

We have before us a choice. We already have 2 million new savers as a result of automatic enrolment, and waiting will mean that many of the people being enrolled will be denied this opportunity as another scheme would have to be worked up and compared with the one proposed. The pension funds are already working with government in order to work the scheme up and to get it ready and in place. Can my noble friend tell me what progress has been made already to ensure that pot follows member is in a fair and fit state to be introduced rapidly?

We have to make a choice. It seems to me that we should choose the pot-follows-member position and thereby give greater power and greater pension outcome to millions of new savers. We should not accept the amendment.

[Lord Turnbull (CB)]

My Lords, I have not previously intervened in this debate. I declare an interest as a director of a life insurance company, the Prudential, which is not a big player in this market, but the views I will express are my own.

My first point relates to the high rate of change in our economy and society, which was remarked upon by the noble Lord, Lord Hutton. People are increasingly likely to adopt more flexible employment patterns. Does a seasonal worker—let us say he is a county cricketer who is not good enough to have a central contract with the England team but plays cricket in the summer and works in a fitness centre in the winter or, like Alec Bedser, humps bricks and builds up his strength—alter his provider season by season? How would you make that kind of system work? The pension pot follows member would not necessarily work for those kinds of people.

Secondly, the life expectancy of employers is not as great as one might think. Only 18 of the original FTSE 100 members are still in the index—some of them have gone out of business or been taken over and broken up—and turnover is likely to be even greater at the SME level. So relating pensions to one’s employer is not necessarily the best thing to do.

The noble Lords, Lord Stoneham and Lord German, have tried to argue that the aggregator model will provide a comfortable ride for the existing incumbents and will create mega-providers. However, who are the providers of pot follows member? They are the existing pension providers. We should not make the easy assumption that one model is anti-competitive and will produce a concentrated market and the other will create a highly diverse and competitive market. They each have their own faults and we should not attribute a monopoly of virtue to pot follows member.

That is why this amendment, which provides a degree of choice, is valuable. It would give us a chance to rethink the circumstances in which aggregator is better and to answer the many questions that have been raised, and to rethink the circumstances in which pot follows member is the superior solution.

16:29

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

My Lords, I feel rather privileged to have been here this afternoon to hear a pantheon of some of the leading pension thinkers in the country concentrate on an issue. As a result it has been a very interesting debate. Clearly we all agree that this is a very important topic. We need to find a solution to the issue of small pots and I will make a case for why the Government believe that automatic transfer is the right solution and why we do not need any alternative provision.

We are clear that the pot-follows-member model, with small pension pots automatically moving and being combined with the individual’s current live workplace pension, will lead to increased consolidation of pension pots, better outcomes in retirement and better member engagement, as well as administrative savings for the industry. The pot-follows-member model builds on the essential foundation of automatic enrolment —the employer/employee relationship that is proving so successful in driving retirement saving, including among those who have never had a pension before. Employees identify with this relationship and with the idea of pots following them to their new employer.

My noble friend Lord German mentioned the research carried out by NOW: Pensions. It showed that 39% of individuals would like their pot to follow them automatically compared with 6% who wanted their pot sent to an aggregator scheme. For the purposes of that research, NOW: Pensions defined the aggregator model as a pot that is automatically moved to a central scheme that meets certain standards. This definition, although high level, is helpful because otherwise we have no clear sense of what an aggregator actually is. Indeed, these amendments do not help define what an aggregator is or how it would work. In fact, these amendments—which have been revised since we discussed them in Grand Committee—appear to be even less workable than before. For instance, they appear to give the decision about where to move the pot to the ceding scheme. By definition, the ceding scheme is the scheme with the least interest in the individual and their outcome in retirement because it is losing the pot.

This seems entirely counterintuitive when compared with the successful current account switching service—CASS—that helps customers move banks. This service puts the onus on the new bank to ensure that the switch happens, because it was recognised that the bank gaining the account will have more interest in making the move as smooth as possible than the old one. It is perhaps not unreasonable that when people move employers and join a new pension scheme they will expect the new scheme to do the work of transferring the pot for them, as happens when they switch their current account, but this would not be true under a push transfer model which these amendments would introduce.

I agree with my noble friend Lord Flight, who points out a real problem with the proposed aggregator model. It really is not clear who chooses where the pension is aggregated. There are other fundamental flaws, such as the lack of any provisions to ensure that the same scheme is used each time—someone could end up with pots in multiple aggregators, undermining the core aim of consolidation. Moreover, there is no definition of what an aggregator is, who could set one up and what the criteria for doing so would be. This lack of clarity will not help the industry in driving forward the development of the implementation model. Noble Lords may say that this detail can be worked out at a later date, but it is exactly this detail that needs to be resolved before any measure can be put on the statute book.

I have real concerns that the House is being asked to accept a theoretical concept, with all the details to be entirely devolved to secondary legislation, but I also have issues with the concept itself. The Government welcome the recent Office of Fair Trading report and accept its conclusions. The OFT was damning of the pensions market, saying that,

“the combination of a complex product and weaknesses in the buyer side of the market means that competition cannot be relied upon to drive value for money for all scheme members”.

We have heard the argument that the introduction of automatic transfers into aggregators will shake up the market and essentially skew it in favour of consumers by ensuring that all can save into large schemes that provide excellent value for money. However, I believe that the aggregator model would skew the market in favour of large providers and would reinforce the dominance of a few big players.

I believe the assumption is that aggregators would in some way be licensed and that schemes would have to meet certain standards to be able to act as aggregators. This would favour current large schemes that have the business model to enable them to accept large numbers of pots from individuals with employers they have previously had no contact with. Alternatively, if the large players in this market do not take the challenge, the Government would have to subsidise an aggregator scheme, which would raise state aid issues in Europe.

Aggregator schemes would enjoy a huge advantage over the rest of the market. They would be the default destination for almost all pots and, as the consumer would not be making an active choice, there would be no incentive to innovate. We have estimated that there will be three-quarters of a trillion pounds in lost pots by 2050, which is a lot of money—

[Lord Hutton of Furness]

I am very grateful to the Minister for giving way. Can he tell us what assumptions underpin the figure that he has just given to the House?

[Lord Freud]

Those figures are pretty detailed and I will write to the noble Lord with them if I do not get a detailed breakdown in the next minute or two—which I might. It is a huge amount of money, which the noble Lord will appreciate as well as anyone else, and it is a lot of money to have in a complacent and stagnant market. If, as the noble Baroness, Lady Drake, suggested, employers could choose the aggregators, and these aggregators were to become open to active members, this market dominance would be complete.

[Baroness Drake]

I do not think I said that the employer could choose the aggregator. I said that if the aggregator was able to have active members as well as aggregated members, that would enhance portability, particularly in some industries, which would reduce the need for transfers and the consequential costs. I do not think I actually said that the operating model would mean the employer chose the aggregator—I left that to the departmental assessment.

[Lord Freud]

Well, if they started moving to active members as well, whatever the route, it would give this group of organisations an enormous market position. I confirm to the noble Lord, Lord Hutton, that I will have to write to him.

It seems strange that, in response to the OFT’s conclusion that there is a lack of competition in the pensions market, the Opposition are calling for the creation of a market dominated by a few big master trusts. We need only to look at other industries, such as the energy market or banking sector, to see that dominance by a few powerful players can result in real concerns for consumers. If we were to press on regardless with enabling these large aggregators to come into being, we would need to be clear that there would be no turning back. It would be extremely difficult to reverse the process if we found that an aggregator model was not sustainable, and to tackle the vested interests if consumers were getting a poor deal.

We have heard—for example, from the noble Baroness, Lady Sherlock—that the Government are alone in supporting pot follows member. It is not true that few people support it but I agree that there is a powerful lobby supporting the aggregator model. It is hardly surprising that those who are shouting the loudest are those who are lobbying on behalf of master trusts that could come to dominate the market under an aggregator model.

The ABI itself supports pot follows member, as do many groups within it—Aviva, Fidelity, Friends Life, HSBC, Origo, Scottish Life and Scottish Widows—as well as non-members of the ABI such as Alexander Forbes, Altus, Buck, Foster Denovo, the Investment Management Association, JLT and the National Federation of Occupational Pensioners.

This Government’s starting point is the consumer—and it is the individual who wants to see their pension follow them to their new employer, as the research from NOW: Pensions, which we have already touched on, underlines. The ABI’s consumer research showed that 58% of individuals said that the pot should follow them automatically to the new job; 10% were in favour of a new central scheme, the aggregator; 15% said the pot should stay where it is and it is up to you to move it; and 17% said it should be visible with all other pension pots at a central place online. That is the sentiment among consumers.

I appreciate that some consumer groups have concerns. I say to them that we are listening to those concerns and that low charges and scheme quality are top of our agenda, not just for automatic transfers but for all schemes. We want these groups to work with us and the industry now to deliver pot follows member in the simplest, safest way for consumers.

The noble Baronesses, Lady Drake and Lady Sherlock, raised concerns about consumer detriment. I remind the House about the work the Government are doing to ensure that all schemes are good schemes. Uniformity is not good for consumers, but only if all aggregators had identical charges and standards would we completely remove the risk of an individual moving to a worse scheme. The noble Lord, Lord Turner, made the point about the interconnectedness of these issues. The Minister for Pensions has confirmed that he remains “strongly minded”—I think that is fairly parliamentary language —to introduce a charge cap. My noble friend asked about the DWP response to the OFT and the consultation on charges. That response is coming soon and we will be discussing that later this afternoon.

[Baroness Hollis of Heigham (Lab)]

Can the Minister tell us what the department has in mind as an appropriate charge cap?

16:44

[Lord Freud]

Various figures have been talked about, but I do not think I can pre-empt the answer to that question, which will be issued very soon.

In contrast to legislating radically to change the market, we see pot follows member as a way of building on the existing automatic enrolment structure quickly to reach a point where transferring pots is an integral part of the industry. Pot follows member does not prevent industry from innovating in future. Indeed, as individuals become more engaged in pension saving, they may want to be more involved in deciding where their pension pot is and in choosing a preferred scheme.

In response to the point made by the noble Lord, Lord Hutton, there is even scope to introduce an aggregator in future if there is demand for it, so we are not closing any doors by pursuing this route now.

[Lord Flight]

I think that the Minister just said it, but can he confirm what I view as a crucial point, which is that the individual is still free to choose where he might wish to place his consolidated pension savings and that we are talking only about the default option? Therefore, as people become more informed, some may choose not to consolidate in their employer’s scheme.

[Lord Freud]

I can confirm my noble friend’s question—or I can give the answer to confirm it.

At this point in time, when we are just starting out with automatic enrolment and successfully getting people saving for the first time, we need to make it as easy as possible for them to build their pension. We need to use inertia in the right way. That means moving a small pension pot to the current live pot where the individual can see it growing, rather than sending it off to a scheme with which the individual has no engagement and in which they have no interest.

Now is not the time to break the link between the individual and his or her employer. Automatic enrolment is going well, with 3 million individuals newly saving and less than 10% opting out. It is reinforcing the workplace pension as a key element of the benefit package that employers offer their staff after decades of decline in occupational pensions.

I have heard the argument that these amendments are designed to give the Government another option, which appears on the surface to be a generous approach. Providing the Government with greater flexibility is one thing, but listening to the debate today, I suspect that few on the Opposition Benches want the Government to have the flexibility to chose anything but the aggregator model.

In practice, the amendments will leave us in limbo and bring back uncertainty at a time when industry is beginning to get behind, and position itself to deliver, pot follows member. As my honourable friend in the other place announced on Monday, officials are currently exploring the feasibility of using HMRC’s PAYE data and system to help us to deliver a secure, efficient and straightforward pot-matching element to implement the process.

In response to the assertion of the noble Baroness, Lady Sherlock, that pot follows member would be hard to set up, we have recently had some very positive workshops with industry representatives and HMRC. The model is already inspiring some exciting and innovative approaches to transferring money with an employee as they move jobs. The cost of the transfer was specifically mentioned by the noble Baroness, Lady Drake. It will be the same for an aggregator as for pot follows member. Altus has challenged the claim that pension transfers are too hard and too expensive by stating that transfers for ISAs and funds cost £1 or less, and that this can be replicated for pension transfers.

After two years of discussion and debate on this issue, even if we cannot agree with the Opposition on the right delivery model, I hope that we can agree that we need to take a positive step forward. On the “pause to reflect” point made by the noble Lord, Lord Hutton, I do not believe that we are rushing into this measure. We first consulted more than two years ago and followed up with two policy papers. We also held extensive discussions with industry and consumer groups within that period. I urge the noble Lords to withdraw their amendment to allow us to work together, and work with industry, to make automatic transfers a reality.

[Baroness Sherlock]

My Lords, I thank all noble Lords who have contributed to what has been another classic House of Lords debate. I particularly thank my co-signatories to this amendment, my noble friends Lord Hutton and Lady Drake. The Minister referred at the outset to a pantheon of pensions expertise, and indeed it has been. The noble Lord, Lord Bates, joked in Grand Committee that the Pensions Commission was almost quorate since two of its three members were gathered there. I say to the Minister, as I said then to the noble Lord, Lord Bates, that if I were sitting where he was and this pantheon was sitting opposite me and telling me that I was wrong, I would be pausing, just as my noble friend Lord Hutton suggested.

A number of arguments have been made today. The Minister says that the Government have been discussing this for two years but this House has not. When we discussed it in Grand Committee, I do not recall hearing a single supportive speech for pot follows member. I am glad that the researchers of the noble Lord, Lord Stoneham, moved him from his position then to the position that he articulated so clearly today, but I do not think that anyone in this House has heard those arguments made until today. I am glad that we have heard them, and very glad that the Minister has been doing work with the industry to get it ready to deliver what will be this Act. However, it is still a Bill; it is not an Act and this House has every right to make its own decisions. Whatever decisions Parliament makes, I have no doubt that at that point the Minister and his colleagues will go out there to deliver.

What arguments have we heard today against our enabling amendment? First, we have heard that it is not clear what the choice is. Well, that is the point: the amendment says to the Government, “Go back and think again. We will work with you if necessary, but think again”. It is said that there will be a delay. Yes, there will be a delay, but the wrong thing would be to rush ahead and make a decision because you want it now, if the consequences would be very serious because it is the wrong decision. This is too serious to rush into. A lot of criticisms have been made so far. For example, the Minister says that the way in which this amendment is constructed would leave the choice of the aggregator with the outgoing employer. If the Minister looks again at Amendment 23J, he will find in fact that it says that regulations may do one of two things. There is a big “or” between the two; it is either push or pull. Everything about these amendments is constructed to say that we recognise there are choices to be made but think that the Government have not given enough thought to what should be the right way forward for consumers.

We have heard nothing to counter the arguments made across the Benches here. What about all those who leave employment? What about the self-employed, who make up the fastest-growing sector: where do their pension pots go? What happens to the pension pot of the seasonal cricketer mentioned by the noble Lord, Lord Turnbull? I am sorry, but I live in Durham and our cricketers are mostly in the England teams, so I cannot advise him there. However, I can tell him that that person would really struggle under pot follows member. What about all those people in mini-jobs who will find themselves in a position of not having a single employer? Much has been said about the relationship between employer and employee, but the truth is that every model of pension scheme struggles with employee engagement. As the noble Lord, Lord Flight, pointed out, the whole point of this is that it addresses only the position of those who make no active choice themselves, yet those are the people to whom the state owes the greatest responsibility. These are the people whose funds we are moving, without their explicit consent, from one employer to another.

Much has been made of the fact that we want all the schemes to be of the best quality, but let’s get real—the OFT has already said that the market is not working. The noble Lord, Lord Turner, has described the challenges they found: people are learning when they come to retire that between 25% and 40% of their pension pot has gone in charges. If the Government really are committed to tackling charges I would invite the Minister to intervene again and to give a proper answer to his noble friend, the noble Lord, Lord German, about when the Government will cap pension charges. If he will not tell us now, I have a very simple solution for him—he can vote for our amendment in the next group and cap the charges tomorrow.

[Lord Freud]

I really do need to take up the invitation. I think that we have made it clear that we will deal with this within this Parliament, which I think means by a date some time in May. I think that that is fairly clear.

[Baroness Sherlock]

It is interesting, my Lords. What has happened—without wishing to pre-empt the next debate—is that the Opposition pushed the Government to do this but the Government said that it was not necessary. The Minister then went out to consultation and suddenly seemed to get cold feet, and he put it on hold for a year. There is a very small window but I am delighted to hear it. But the Minister can vote for our amendment and need not wait. The Government are again being invited to do it, and my noble friend Lord Hutton has very powerfully made the case for why they should.

I have been careful to try not to put my personal preference in the proposals, but I would be happy to join the Minister in a proper cross-party, consensual discussion about the way forward. The Labour Party introduced auto-enrolment and I pay tribute to the Government for taking it forward. We all share a common objective: to get as many people as possible saving for retirement. They can do so only if they have trust and confidence in the pensions market and in the schemes they are investing in. If they do not have that confidence they will not save and we will all be the poorer. The best way to do it is to ensure that there are schemes in which people can have confidence. I believe this is the right way forward and I wish to test the opinion of the House.

16:56

Division 1

Ayes: 201

---

Labour: 152
Crossbench: 35
Independent: 4
Democratic Unionist Party: 2
Plaid Cymru: 1
Green Party: 1
Bishops: 1

Noes: 252

---

Conservative: 145
Liberal Democrat: 75
Crossbench: 24
Independent: 2
Bishops: 1

17:10

Schedule 17: Automatic transfer of pension benefits etc

Amendments 23A to 23P not moved.

Clause 38: Automatic enrolment: powers to create general exceptions

Amendment 24

Moved by

[Lord Freud]

24: Clause 38, page 19, line 12, at end insert—
“( ) But the regulations may not provide for an exception for employers of a particular size.”

[Lord Freud]

My Lords, it was Parliament’s original intention that everyone should be automatically enrolled, subject only to age and earnings criteria. This has the advantage of a very simple approach. It made it clear that all employers, whatever their size or the nature of their business, would be covered. It relied on individuals to opt out if pension saving was not right for them.

We can now see that automatic enrolment into a workplace pension is working and we are seeing reassuringly low opt-out rates. However, we also recognise that there are some very limited situations in which automatic enrolment simply does not make sense for the jobholder. Opt-out is effective but it does not take away the need for employers and pension schemes to go through the enrolment processes and for the individual then to opt out, even where it clearly makes no sense for that individual to be put into pension saving. This is a waste of employers’ time and frustrating for individuals.

We continue to receive evidence from stakeholders of instances in which it makes no sense automatically to enrol individuals. Our consultation of March 2013, Technical Changes to Automatic Enrolment, sought views on how the automatic enrolment process could be improved and invited views on whether there were certain categories of workers whom it might make sense to exclude from automatic enrolment. The responses strengthened our view that in certain circumstances automatic enrolment is not appropriate and that, for these individuals, the most suitable option is to give their employer the option not to enrol them in the first place.

On 12 February, we published a response to the consultation on how the power to make exceptions to the automatic enrolment duty might be used and identified four situations which merit further consideration: first, people who could face tax charges if they make further pension savings; secondly, people serving a period of notice; thirdly, people about to leave their employment on retirement; and, fourthly, people who have already left their pension scheme following contractual enrolment.

As noble Lords know, Clause 38 gives us the scope to provide broad exceptions to the employer duty, but we have made it clear on more than one occasion that we will not use it to exclude large numbers of employers based solely on size or the nature of the employer’s business. We do, however, acknowledge that the power could, in theory, be used to exclude small and medium-sized employers and we understand the concerns raised by the Opposition on this point. We are content to limit the power so that it cannot be used in this way. Amendment 24 therefore specifies that regulations cannot exclude an employer from their automatic enrolment duties on the basis of size. I beg to move.

17:14

[Lord McKenzie of Luton (Lab)]

My Lords, we should thank the noble Lord, Lord Freud, for bringing forward this government amendment, which as far as it goes is a restriction on the power to create exceptions to the employer automatic enrolment duty. It responds in part, as the noble Lord has acknowledged, to the amendment moved in Committee by my noble friend Lady Sherlock and by Gregg McClymont in another place. We are grateful for the Government’s movement on that.

As we have heard, this amendment narrows the circumstances in which regulations can be deployed, and precludes them being used to provide an exemption for employers of a particular size. This will therefore appear to deny the exemption, whether size is determined by numbers of employees, profitability, turnover, capitalisation or asset base, or some other size criteria. Perhaps the Minister can confirm that that is how he sees it. Nevertheless, the Bill would still leave scope to carve out exemptions on a fairly wide basis. That could be by reference to a description of worker, “particular circumstances”, or “in some other way”, as the Bill provides—for example, by sector.

We accept entirely the assurances of current Ministers that the purpose of the government amendment is to offer employers more flexibility in a limited number of specific situations that affect only a small number of workers. However, even as amended the Bill is not so tightly drawn and opens up the prospect in the future of a wider impairment of the employer duty, which is the foundation on which auto-enrolment is built.

We acknowledge that the Government have consulted widely on the issue and rejected a number of suggested easements to the employer duty. Other than for four specific circumstances, the Government in their response to the consultation have concluded:

“We remain confident that the right to opt out remains the most suitable option for all other workers who do not wish to remain in pension saving”.

We agree with that.

The question therefore arises as to whether the four circumstances identified—and remember that that was after a very extensive trawl, including the experience of live running—warrant the potentially broad amendment which will remain in this legislation. The four circumstances referred to by the Minister—those with tax-protected status for existing pension saving, those on the brink of leaving employment, those who have given notice of retirement, and those who have recently cancelled membership after being contract joined—might well justify an exemption on automatic enrolment rather than rely on workers opting out, especially given the potentially large tax penalties which might arise for those with tax-protected status. However, until the practical consequences of putting this into effect are fully considered—and we welcome the commitment to consult on a draft instrument, albeit still a negative one—we cannot be certain that the “cure” is better than the “ailment”.

On reflection, a better way forward might have been to identify these four specific circumstances in primary legislation together with the power to introduce regulations for the exemption of the employer duty in all or any of these situations. This would have removed concerns over the Bill retaining the still potentially wide powers of exemption. If it is too late to consider this approach, as it might be, I hope that the Minister can give as much assurance on the record as to the intended use of what will remain of this clause.

[Lord Freud]

Let me just deal with the first specific question raised by the noble Lord, on the issue of size and what we mean by that. Clearly, the Opposition were primarily concerned when we went through this in Grand Committee that a Government—this one or any other—should not be able to exclude small and medium-sized employers from their duties on automatic enrolment. The primary definition of size here is to prohibit an exception based on the number of workers, which is one central understanding of the size criteria, but it could also mean, as the noble Lord indicated, turnover, profit or VAT registration. We do not have the need to define it further in the Bill because whatever measure of size was used would be prohibited by the government amendment.

On whether there is a better way in which to limit the power, which is the thrust of the noble Lord’s question, we have identified these four circumstances. We are not confident that they are the only circumstances; more may come up. We have considered in legal terms that this is the best way to be able to respond in making sure that when other circumstances arise we can use this power. We believe that it is prudent to leave this Government and future Governments the flexibility to consider other criteria. However, I can say on the record that we have no particular situations in mind here; we are simply leaving ourselves the option to respond to new or changing circumstances.

On the four situations that have been identified, we will develop proposals for workable exceptions, and they may have to work in different ways in different circumstances. As the noble Lord said, we will consult with final proposals and draft regulations in due course, although of course regulations are contingent on Royal Assent.

I hope that with that set of explanations the noble Lord will greet with enthusiasm and delight this amendment in response to his concerns.

Amendment 24 agreed.

Clause 43: Work-based schemes: power to restrict charges or impose requirements

Amendment 25

Moved by

[Lord Freud]

25: Clause 43, page 24, line 2, leave out “work-based”

[Lord Freud]

My Lords, in moving Amendment 25, I shall speak also to government Amendments 26, 30, 31 and 26A.

As my honourable friend the Minister for Pensions announced in a Written Statement in the other place at the start of this week, the Government remain firmly committed to ensuring that consumers receive value for money from their pension savings and to seeing this through during the life of this Parliament—a point that I made earlier. Our response to the consultation on charges, and further proposals on quality and transparency in defined contribution workplace pension schemes, will be published soon. We are taking action to ensure that those who are defaulted into pension saving through automatic enrolment can be confident that their money is invested in well governed and transparently managed schemes.

Amendment 26A demonstrates our firm belief that transparency of costs and charges is fundamental for good scheme governance and to enabling comparison between schemes. On this we are in complete agreement with my noble friend Lord Lawson and the thrust of the amendments which he has tabled on this subject. I take this opportunity to thank him for the helpful discussions we have had on this issue thus far and I look forward to engaging with him further on the detail of these provisions. We have always been clear that disclosure of transaction costs should be improved; that is why we sought views on the best way of doing this in our consultation following on from the Office of Fair Trading study of the defined contribution workplace pension market. In the consultation, we suggested using our existing permissive powers in the Pension Schemes Act 1993 to require improved disclosure of information. However, I am pleased that our Amendment 26A goes further than this and, for the avoidance of any doubt about our intentions, requires the Secretary of State to make regulations requiring greater transparency around the transaction costs incurred by work-based defined contribution schemes. It would also allow the Secretary of State to disapply that duty in limited circumstances in which he is content that there is an alternative regulatory regime in place for specified schemes. The intention is for this to provide for a situation in which the Financial Conduct Authority has made its own rules for disclosure of information about transaction costs in relation to contract-based schemes, in which case the Secretary of State may need to make regulations only for trust-based schemes which are regulated by the Pensions Regulator.

This amendment would provide for the types of transaction costs covered to be specified in regulations. Here again, we are in agreement with my noble friend Lord Lawson that the full range of transaction costs that may be borne by scheme members should be disclosed. I would like to reassure the House that we do have the powers to ensure that this happens, but the Government need the flexibility to require disclosure of types of costs that might become apparent over time. Government Amendment 26A has therefore been drafted specifically to provide this flexibility and to future-proof the legislation. We will formally consult before making the regulations but, at this stage, and in the first instance we would expect them to include costs such as stamp duty and bid-offer spreads. We would be more than happy to involve my noble friend Lord Lawson, and other noble Lords with an interest in this matter, in the discussion of what the regulations will cover.

The amendments of my noble friend Lord Lawson also provide for making information about transaction costs publicly available on a common basis. This is, again, a suggestion with which we fully agree and thank my noble friend for highlighting this issue. Making such information publicly available will surely support consumers, employers and others in making comparisons and deciding between schemes. Public comparison of charges is something on which we sought views in the recent charges consultation and will publish further proposals soon in the forthcoming government response. Our existing disclosure powers would enable us to regulate for information on transaction costs to be made public, but given the importance of this issue, I am happy to consider between now and Third Reading whether any changes can be made to primary legislation to reinforce and make explicit this commitment to provide for information to be made publicly available.

To touch briefly on the scope of the disclosure requirements, the duty that is created by this amendment applies to money purchase, or defined contribution, pension schemes only. This is narrower than the provisions of the existing power, which will remain, under which regulations can apply to all occupational and personal pension schemes. The reason why the Government are focusing the new duty on the defined contribution market in their package of measures on charges, scheme quality and transparency is that in defined contribution it is members who bear the risk of their investment, and members whose pension savings may be diminished by high or unclear charges. It is also the defined contribution market that the Office of Fair Trading has investigated and recommended action to reform.

Members of defined benefit pension schemes already enjoy a level of protection from such risks. However, the power to require greater transparency of scheme costs and charges could cover all schemes, and we will continue to consider whether we should use that power to require transparency in defined benefit as well as defined contribution schemes.

The new duties to disclose transaction costs will form one part of a wider package of measures to set minimum quality standards for all workplace defined contribution schemes, including taking action to control charges in default funds used for automatic enrolment.

We have, as I said, consulted on these measures and I expect the Minister for Pensions to respond formally soon. The Minister has been clear that we are committed to seeing this policy through during the life of this Parliament which, under the Fixed-term Parliaments Act, means before May 2015. For that reason, I see no need for Amendment 29. We have the power in Schedule 18 to restrict charges. I can reassure noble Lords that we would not have placed this power in the Bill if we did not intend to use it as soon as practicable. With regard to the precise timing of when these regulations shall be laid, I refer noble Lords to the Minister’s strong steer and I fully expect more detail to be available when the formal response is published.

17:30

Before I conclude, I should like to explain to the House the purpose of Amendments 25, 26, 30 and 31. We have been clear that we want the ability to protect those in both trust-based and contract-based schemes and that this protection must extend to closed schemes, by which I mean schemes without any active members. However, the definition of “work-based” schemes currently used in Clause 43 and Schedule 18 does not extend to this group of schemes.

Members of the House may be aware that the Office of Fair Trading and Association of British Insurers have recently announced further details of the audit of high-cost and legacy schemes. This exercise will focus on those schemes that the Office of Fair Trading has identified as being at risk of offering poor value for money for members. Where the audit identifies changes that are needed to address shortcomings in these schemes, we expect these to be made on a voluntary basis. However, we think that it is important to have the ability to require improvements in these schemes, should this prove necessary. Government Amendments 25, 26, 30 and 31 therefore make technical changes to the definitions used in Clause 43 and Schedule 18, to ensure that this can be done.

This Government are committed to ensuring that consumers receive value for money from pension savings. I am pleased that, along with the existing powers in Clause 43 and Schedule 18, the amendments in my name will ensure that the Government have all the necessary powers to make this happen. I beg to move.

[Lord Lawson of Blaby (Con)]

My Lords, I begin by welcoming very warmly what my noble friend has said. The Government have done the right thing and moved a long way since we debated this issue in Committee. We see government Amendment 26A as part of that move, but I am glad to say that the Minister has at the Dispatch Box this afternoon said that he will, quite rightly, go even further. I should therefore like to go over the points, perhaps for clarity. The Minister does need to go further, some of the reasons for which he has mentioned. I will not therefore speak to any of the amendments in my name as such because they have been overtaken by events. It is the substance that matters.

There seem to me to be four ways in which further improvement is needed beyond Amendment 26A, the first of which my noble friend has agreed to. That amendment would open the door to disclosure but to a limited number of categories. It is essential that there should be full public disclosure. This is important. For example, all potential members of pension schemes and workers should know what is happening, given that every -one knows that the costs of pension schemes vary enormously, as the noble Lord, Lord Turner, mentioned. This is not in dispute. It is a fact. Studies have shown that that variation bears no relation to performance, and some of the costs are absolutely enormous. In money purchase schemes, that is a direct cost to the pension that the beneficiary will get at the end of the day.

Nobody has mentioned this so far but I do not think that we should forget the press. There are sections of the press that give excellent consumer advice on financial matters, and not just the press: there is the excellent Paul Lewis, with his “Money Box” programme on the wireless. All these people need the information. They need to be the beneficiaries of disclosure if they are to be as effective as they might be for the benefit of members of pension schemes. Therefore, there should be total disclosure, and I suggest in my amendment that perhaps the best way of achieving that is for there to be disclosure to the Pensions Regulator, who publishes a public register which anybody can look at. However, there may be another way which the Government prefer and which is equally good. I was very glad to hear my noble friend say that there will be full public disclosure, which goes beyond that set out in Amendment 26A. That is what is needed.

Another way in which Amendment 26A is inadequate is that it refers to “some or all” of the costs. My noble friend touched on that but it is of the first importance that it says “all costs” and that all the costs are itemised. It is obvious that if only some costs are disclosed, it will be easy for investment managers to load on to their costings costs which are not among those that need to be disclosed. That is a complete nonsense. It is absolutely essential that all costs are itemised and disclosed.

There is another thing that needs to be attended to and where further progress needs to be made, but again it seems that in the spirit of what my noble friend said he is prepared to go there. His amendment concerns disclosure of information about transaction costs. It refers exclusively to transaction costs and, again, that is not adequate; it has to be all costs. There are, for example, investment managers’ fees, performance fees and custody fees, all of which are not transaction costs. Indeed, the Investment Management Association has stated that it does not classify equity commissions as transaction costs. Therefore, clearly the limitation to transaction costs is an invitation to abuse. All costs that are incurred have to be included.

The final way in which the amendment needs to be improved is perhaps less important than the other three ways; none the less, it is still important. The present proposal—my noble friend made this clear—relates only to money purchase schemes. It does not apply to defined benefit schemes. Defined contribution schemes, money purchase schemes, or whatever one likes to call them, are more important because the proposal directly impacts on the benefit that the beneficiary of the fund or pension gets at the end of the day. If it is a defined benefit scheme, one could say, “Why does it matter?”, but I do not think that it is a matter of indifference. Investment managers can say, “We have to control our costs, and reveal our costs, on money purchase schemes and defined contribution schemes. We can get the money back by loading extra costs on to the defined benefit schemes”. That would be wholly unsatisfactory. Most defined benefit schemes may be closed to new members but they are still going on and are substantial. A further point is that on a number of occasions the Government have expressed concern about pension fund deficits. This proposal could have a direct effect on the size of pension fund deficits. Therefore, it is necessary to bring defined benefit schemes into this disclosure. Transparency should not be explicitly and exclusively confined to money purchase schemes.

Those are the four areas in which further progress needs to be made. My noble friend said that he would be happy to discuss how it will be done between now and Third Reading. I would be happy to take part with other interested parties in these discussions, following which we look forward to further proposals and amendments at Third Reading.

I have a further small point for clarification about something that is slightly obscure. I do not think that it has been mentioned yet—certainly not by the Minister. Subsection (6) of the proposed new clause in Amendment 26A states that,

“subsection (5) does not apply in relation to a scheme of a particular description if … as a result of another enactment, requirements are imposed relating to the disclosure of information about transaction costs of schemes of that description”.

The only thing that I can assume—I hope my noble friend will clarify it, as I cannot believe that he has some other Bill up his sleeve—is that there may a European Union directive in the offing that may cover this area. That may be what is being alluded to. It would be helpful to the whole House if he explained precisely what lies behind this curious subsection.

[Lord Browne of Ladyton (Lab)]

My Lords, it is a genuine pleasure to follow the noble Lord, Lord Lawson, and to engage in the debate on this group of amendments. The noble Lord has had an extremely distinguished career in both Houses of Parliament. I have seldom heard his name used with such strength by a Minister from the Front Bench—certainly not for a long time. It may be a lesson to others on the Benches behind the Minister on how to get that level of recognition.

Amendment 29 requires the Secretary of State to,

“lay before Parliament regulations to restrict such charges as soon as reasonably practicable and no later than 30th April 2015”.

We want to ensure that the promise to do so, and the commitment to see this through in this Parliament is not kicked further into the long grass, but is exercised,

“as soon as reasonably practicable”.

This may be redundant now, as the noble Lord, Lord Lawson, has indicated, but my noble friend Lady Sherlock and I support Amendments 27 and 28, which require full disclosure of management and transaction charges for each work-based pension scheme. Amendment 26B amends government Amendment 26A that is broadly to the same effect. Amendment 26B requires the information that the Government now belatedly agree should be disclosed to pension scheme members should also be disclosed to the pension scheme regulator who, in turn, must maintain a public register of all costs. Of course, I welcome Amendment 26A and I thank the Minister and congratulate him on having tabled it. I have the advantage of the Minister’s explanation about why, at this extremely late stage, the Government have—I will not say U-turned—but changed their position substantially by almost 180 degrees on the very issue of transparency and disclosure. I welcome the amendment. When the Minister was explaining this, his overconcentration on the amendments of the noble Lord, Lord Lawson, and his engagement with this process—airbrushing out the contribution of my honourable friend Gregg McClymont, who persistently raised this issue in amendments in the House of Commons—may have given some people the impression that the Government’s change of position is more to do with Conservative Party discipline than their commitment to disclosure and transparency in these issues in the interests of the saver.

17:45

That may be an inappropriate interpretation but the fact that the Government ignored various amendments in the House of Commons which were similar to the amendment tabled in Committee by the noble Lord, Lord Lawson of Blaby—I am not looking for any name check from the Minister but my noble friend Lady Sherlock and I tabled an amendment in Committee in similar terms—needs explanation. This is particularly important given that only a few months ago the Pensions Minister, Steve Webb, was reported to have said at an NAPF conference that transparency gets you virtually nowhere.

On the public register issue, which is now embraced, I commend to the Minister columns 389 and 390 of the 12th Sitting of the Pensions Bill Public Bill Committee on Thursday, 11 July 2013. They contain an excoriating criticism of public registration of this information by the Pensions Minister when it was suggested by my honourable friend Gregg McClymont and proposed as an amendment to Clause 35 in similar words to those used by the noble Lord, Lord Lawson, in his amendment.

Why do I make so much of this in the face of this significant concession by the coalition Government? It is because—I shall construct this argument carefully—the reason for Amendment 29, and our support for it, is that it is difficult to follow exactly why the Government were so reluctant to go down this path, and why they have accelerated down it in such a way in the face of the intervention of the noble Lord, Lord Lawson, if they really believe that the process of capping charges and its transparency is in the interests of the saver and are going to see it through against the commitments that we have all been given.

I shall construct my argument and the Minister can respond to it. It has always been Labour’s position that it supports broadly the reforms contained in both halves of the Pensions Bill. As my noble friend Lady Sherlock made clear in her excellent speech at Second Reading on 3 December 2013, simplifying the complexity of the present state pension system into a single-tier pension is supported for many reasons, which include that it provides a predictable platform on which the individual is then encouraged to build, principally through private pensions.

My noble friend went on to argue that the success of the complementary private pension savings model is dependent upon automatic enrolment of all workers into a workplace pension scheme—which is moving well—provided that every one of the 10 million being auto-enrolled between 2012 and 2017 can be sure of getting value for money from that pension scheme. This necessity has driven every single one of Labour’s amendments to the private pensions part of the Bill and is at the forefront of our arguments today.

We all agree that pension charges have to be reasonable for people to have the necessary confidence to invest their hard-earned money into pension schemes, but from the evidence available now it is difficult to exaggerate how obscure the charging structure for pensions is and how dysfunctional the market is. For reasons we have debated repeatedly in this Bill, the market alone cannot address this challenge. It is a regret that the Government have been slow to understand the depth of the problems in the pensions market and now appear reluctant to take on the industry to solve them.

A short reminder of how we got to this better place of a cap on charges and disclosure of the detail of them is necessary. In July 2012 my right honourable friend Ed Miliband first raised this issue, identifying pensions as the next big scandal and warning that savers must be protected from hidden pension fees that strip them of huge percentages of their savings. He called for a new regime imposing a clear charging structure on pension funds and warned that fees needed to be capped. Disgracefully—and I use this word advisedly—the Pensions Minister joined industry voices who were then accusing my right honourable friend of “scaremongering”. Indeed, the Pensions Minister accused him of being “irresponsible”. In the lexicon of parliamentary language, scaremongering and irresponsible are quite high up the scale.

There followed the publication of reports from independent bodies that corroborated the basis of Ed Miliband’s concerns and in September 2013 he announced at the party conference that Labour would support an OFT inquiry into the pensions industry, put a cap on pension charges and force pension firms to stop hiding their charges and the full impact of them. The Government’s resistance to this agenda was palpable. Even in January 2013 when the OFT inquiry was announced, the Pensions Minister, Steve Webb, was still maintaining his scepticism about capping pension charges. More investigations followed. The OFT reported and, in the words of the Minister in the pot-follows-member debate, its report showed that the pensions market was utterly “dysfunctional”. In October 2013, almost on the day of the Report stage of the Bill in the Commons, and forced to do so by the findings of the OFT report, the Government U-turned on setting a cap on the maximum charges that can be levied on savings in default funds and announced the launch of a consultation. Finally, Labour had won the argument on the issue.

It is staggering that it has taken the Government so long when their own figures show that individual savers could be losing as much as £230,000 from their lifetime savings. The noble Lord, Lord Turner, in his intervention in the pot-follows-member debate, described in a very telling way the scale of the charges that can be charged, particularly on small pension savings pots. At this point, the Pensions Minister, Steve Webb, said that every passing month of delaying the introduction of pension cap charges,

“means another bunch of people who might not get put into a decent-quality scheme”.

I agree with him. In announcing the consultation and the choices for capping he quite deliberately attracted headlines that created an expectation that a cap would be introduced shortly, probably by April of this year and at less than 1%. In October 2013 he said, “Enough is enough” and in October 2013 it was enough.

Shamefully, his resolve now appears to have collapsed in the face of lobbying by pension companies. Days after we debated these issues in Grand Committee, in his response to the consultation the noble Lord, Lord Bates, dangled in front of us the prospect of some positive response in the Grand Committee the next Thursday when the Minister would make a public speech. I remember the response of the noble Lord, Lord Lawson, to this. What did we get? He kicked the cap down the road for at least another year. Now insurance companies require at least a year’s notice of a potential cap during which—using the Minister’s own phraseology—countless bunches of people will not get into a decent-quality scheme. The effect of our Amendment 29 is simple. If the new expectation that this will be done by April 2015 means anything, the Government should accept that and commit to making the necessary regulations for the cap no later than the last day of that month.

I digress for a moment. There has been a most interesting engagement between the noble Lord, Lord Stoneham, and the Minister over this issue—I am sorry, I mean the noble Lord, Lord German. The noble Lord, Lord Stoneham, always causes difficulties. The noble Lord, Lord German, who effectively speaks for the Liberal Democrats on these issues and must be very close to the Pensions Minister, had an expectation in the earlier debate that he would get a very clear assurance from the Minister that the cap would be in place by April 2015. He asked for that assurance in the pot-follows-member debate. The Minister used a very telling phrase. He said that the Pensions Minister was “strongly minded” to impose a cap. Everybody outside thinks that the Pensions Minister has decided to impose a cap because that is the impression that has been created. Later, in trying to get more specific answers from the Minister, he used various phrases including seeing this through in the life of the Parliament. Many of us have been at that side of the Dispatch Box and know the restrictions on Ministers in the use of language but we also know that the use of this language is decided to give flexibility. However, on this issue very few Members of your Lordships’ House want to see any flexibility. There is an expectation that this cap will be in place before the end of this Parliament and that expectation has been created, even if reluctantly, by the behaviour of the Government’s own Ministers.

In summary, on one interpretation of this history it can appear that the Government, despite their constant reassurance, have been dragged kicking and screaming to this point, all the while apparently being prepared to put the industry’s interest before savers’ when push comes to shove. This is the last opportunity for your Lordships’ House to make it clear that Parliament has a different set of priorities which are in favour of the saver and not the industry. It can do so simply by creating a statutory deadline to compel the use of the power to cap, which the Government reluctantly put in this Bill by way of an amendment following the OFT report, on the date that the Government are creating the impression that it will be used by.

I probably do not need to say this but I hope that the Minister will accept this amendment and if he does not I intend to test the opinion of the House. I am hopeful that right-minded Members of your Lordships’ House will want to put a marker down to show which side of this commitment they are on—to do this before this Parliament comes to an end or just to see it through before it comes to an end. I know how I will be voting.

[Lord Turner of Ecchinswell]

My Lords, I will speak in favour both of transparency as per the amendment from the noble Lord, Lord Lawson, and the Government’s amendment and also in favour of a clear commitment to a clear cap on scheme charges in line with Amendment 29 which also bears my name.

As I have already said this afternoon, the issue of total charges is fundamental to what we are trying to achieve with this Bill. The Government’s paper on charges makes it clear how important they are. Figure 2 says that if you are a saver throughout your life and you pay a charge of 0.5% when you get to retirement you will have given up 13% of your pot in charges. If the charge is 1.5%—which to the ordinary person might not seem all that much higher—you give up 34%. The difference between paying charges of 0.5% and 1.5% is that you will be 20% worse off throughout the whole of your retirement. This is not minor, but absolutely fundamental to how we achieve good provision for people in retirement.

[Viscount Eccles (Con)]

Could the noble Lord be very kind and help me? Is he saying that the pot is a fixed figure and that therefore the percentage of charges has always to be related to the same end figure of the pot?

18:00

[Lord Turner of Ecchinswell]

Obviously, it is possible that with higher charges there might be a higher return, but many of the variations that we see in charges in the industry are for things that clearly will not produce a different return. One sees, for instance, a wide spread of charges for index funds, where one knows that there will be no difference. We also know that, on average, active management does not add a return above index funds: that is a very strong empirical result from a lot of analysis. While it is possible that with higher charges come higher return, in a great many cases that is not so. One thing pension savers would be wise to concentrate on is the charges they face, because that is one of the few things that they can definitively influence, whereas the gross return is a promise that may or may not be delivered.

Those are the reasons that led the Pensions Commission to focus very strongly on the issue of cost and the variation of cost. We noted, for instance, that many people employed in the UK are in large trust-based schemes and already enjoy, on defined contribution schemes, total fund management charges of 20 basis points, 0.2%, or less. For those 20 basis points, they get fund management at the gross level quite as good as people paying 1.5%. If you pay 0.2%, by the end of your savings life, you would have given up only around 4% or 5% of your savings in the charges, which is probably about as low as we can get it, given the fundamental things that have to be done. Again, that is confirmed in the Government’s own consultation paper on charging, which illustrates that 10% of trust-based firms have annual management charges of 0.19% or less. That is possible, provided we get economies of scale, without giving up a significant choice of range of funds. However, at the other end of the scale, we noticed many SMEs were paying 1.5% and therefore, as per the Government’s consultation paper, losing 34%; or 1%, at which point you lose 24%.

That is why, as I said earlier, the recommendations of the Pensions Commission covered not just auto-enrolment, to use the inertia power to get people to save, but the design of the scheme, to ensure that access at the sort of low costs already enjoyed by employees of large firms can be enjoyed by employees of small firms. That was the reason for the design of NEST, which was designed by looking at detailed cost analysis and working out at what level it ought to be possible to deliver a default fund and also at models from elsewhere, such as Sweden. We became convinced that it ought to be possible to deliver to all people the opportunity to invest in a default fund—probably an index fund—with all explicit end costs of 0.3%. A set of decisions were subsequently made that the cost would have to be 0.5%, which is what it went forward as in the NEST environment. That at least establishes a benchmark and means that people who invest in NEST are only giving up 13% of their end-of-life savings pot in charges.

It is important that that should be the benchmark and that we have a charge cap. We know from the OFT’s and other analysis that this is simply not a market where the operation of individual customer choice is effective in driving cost-efficient competition. If that were the case, we would never have had to have the recommendations of the Pensions Commission and the auto-enrolment to which we are now committed. If we do not impose a charge cap, we will leave many savers, in particular lower-income people working for SMEs, facing unnecessarily high costs. I think they are unnecessary if, for a default fund, we are above 50 basis points, or 0.5%. I am therefore concerned that the two options the Government were looking at in their consultation paper on charging were 0.75% and 1%. If we come forward with a cap of 1%, we are giving to the ordinary saver the extraordinary promise that, on their behalf, we have made sure that their loss of pot at the end of their life is only 24%. I do not think that is a very compelling promise to give to people. I therefore strongly believe that we should make a clear commitment, by a clear date, to get on with this and have a charge cap in place, and that 0.5% is the appropriate figure.

Although a price cap on explicit costs is important, it is not sufficient. That is why I strongly support the sentiment of the amendment of the noble Lord, Lord Lawson, which seeks to cover all the other costs which are not covered in explicit fund management charges. The issue of these other costs was also one with which the Pensions Commission was concerned. We were concerned that, beyond what you can see in an annual management charge for a fund, there are lots of other costs involved. These are precisely the sort of costs described in Amendment 28, in the name of the noble Lord, Lord Lawson, which inlcude,

“fees and performance fees paid to investment managers … commissions and bid-offer spreads paid … fees, revenue splits and bid-offer spreads paid to custodian banks”.

These are very significant but are not well understood.

On the Pensions Commission, we sought to see whether research had been done on how big these were. Interestingly, there was one piece of research, which was sponsored by the FSA back in 2000 and written, after a lot of research, by a man called Kevin James. It tried to work out just how large these other costs were in the UK and in the US. We called them implicit costs in addition to explicit costs. There is a box in the first Pensions Commission report which explains that piece of analysis and how big they are. His analysis, which we interpreted, suggested that some of these costs might be as high as 90 basis points, on top of the overt, explicit costs. We ended up, for the purposes of modelling, believing that if we were to try to understand what got lost between the gross return on equities that you see by looking at the FTSE All-Share Index every year and what the saver gets, we had to allow, in addition to the explicit asset management costs, for 65 basis points on average going in these implicit costs—more for actively managed funds, less for index funds.

It is possible that those costs have come down since that analysis was done and since we looked at it—there has, for instance, been some compression of bid-offer spreads—but they are sufficiently large that it is incredibly important to focus on them, pay attention to them and, as it were, bring the disinfectant of transparency to bear on this bit of the cost base. Let us suppose that they were 65 basis points. That means that if somebody thought that they were paying 0.85% on an explicit annual management charge, between the gross return on equities in the market and what they actually get, they would be paying 85 basis points plus 65 basis points, which takes us back to the 1.5% per annum, which is 34% of their pot disappearing.

The noble Lord, Lord Lawson, has put an immensely important issue on the table. I would encourage the Government to widen their focus even beyond pensions, because it is important not only in the pensions arena but for the other ways that people save, for instance with ISAs. When people save in ISAs, they are looking at an overt, explicit asset management charge, but sitting behind that is a set of other hidden costs. This is an issue where more information will help. It will not transform the situation—we are deluding ourselves if we believe that lots of individual savers are themselves, individually, going to pay attention to this—but as the noble Lord, Lord Lawson, has said, the press, including the specialist press, will pay attention to it and a wider debate about just how large these charges are is very important. It would, for instance, be very interesting to start seeing how much higher these hidden costs are for actively managed funds versus index-linked funds, because that is a piece of information that people ought to bear in mind when they make those decisions between different classes of assets.

I urge the Government, as they go forward with this idea, to look at whether that disclosure should in future apply not just to pensions but to a wider class of investments—to cast it, as the noble Lord, Lord Lawson, said, as widely as possible so that we capture all costs—and to see this as a start point of an extremely important debate in which we get a better handle on the total costs that are being imposed by the asset management and investment fund management industries.

I do not think that transparency is an alternative to a charge cap, which is why I have also put my name to Amendment 29, but it is a very valuable additional tool.

[Baroness Drake]

I do not intend to make my contribution because I do not think there is anything I can add to what the noble Lord, Lord Turner, has said. However, as I have never been a Minister I am not familiar with the dark art of crafting ministerial syntax, so perhaps I could take this opportunity to ask the Minister a question before he responds.

I have before me the Written Ministerial Statement, which says:

“Last year, we consulted on whether to cap charges in the default funds of schemes used for automatic enrolment, and the Government remains committed to seeing this policy through during the life of this Parliament”.—[Official Report, Commons, 24/2/14; col. 11WS.]

My simple question is: does the phrase,

“seeing this policy through during the life of this Parliament”,

mean that the Government will introduce a charge cap before the election in 2015? A simple yes or no answer would be helpful.

[Viscount Eccles]

My Lords, I had not really intended to intervene. I have not played any part in this Bill since Second Reading, but I just want to draw attention to the fact that there is a difference, in my opinion, between price control and transparency.

I am 100% in favour of transparency. Perhaps I should declare that I have a very complicated pension situation. I have been in defined benefit schemes and money purchase schemes and I have a SIPP. I have also been the trustee of probably half a dozen pension schemes. I have done transfers of people under TUPE in the Local Government Pension Scheme. So I have had a lot of reasons to worry about the amount of somebody’s pension fund that is absorbed by costs. I am totally on board with complete transparency on that issue.

However, that is a different matter from price control. The problems in this market, which I fully agree has very considerable aspects of dysfunctionality, are created, in part at least, by the incredibly complicated structure of pensions that we have created, in both the public and private sectors, over many years. It is a very complicated subject and of course there are people who take advantage of that complexity, I completely agree. There are also people who are so frightened by the complexity that they do not know when they are getting value for money and when they are not.

That is my point: there is a great difference between a market which by its transparency enables people to see whether or not they are getting value for money and a market in which there is price control. Picking a figure for the price control would be a very foolish thing for any Government to do.

18:15

[Lord Freud]

My Lords, this is a very substantial area and we are making very substantial moves. We are looking for transparency on all charges. We are looking to ensure that that is published. We are looking to make announcements on our capping plans soon. I enjoyed more than anything else the noble Lord, Lord Turner, teetering on the edge of giving investment advice, although I suspect he is privileged to do so here.

I will quickly recap some of the language in our Amendment 26A. It says “some or all” rather than “all” for drafting reasons. We need to set out, as far as we can, in regulations what costs should be included but our intention is to include all transaction costs, which incorporates not just the transaction costs that my noble friend Lord Lawson made the point about but all costs, because we have permissive powers in the Pension Schemes Act 1993 to get all costs, not just transaction costs.

As I said, before Third Reading we will look at whether to include the defined benefit schemes and we will come back to that.

[Lord Browne of Ladyton]

I am very grateful to the Minister for giving way. On this very point about the transparency of transaction costs, my understanding of the Government’s amendment is that they have given themselves the power to exempt from transparency where there are existing FCA rules in relation to transparency. The existing FCA rules on transparency exempt transaction costs, so how will the transaction costs in such cases be dealt with?

[Lord Freud]

I am putting it on the record that we will aim to capture all costs, including all transaction costs. As noble Lords know only too well, when you look into this legislation there are bits and pieces scattered all over the place, but I can summarise it in that very simple sentence. It is very similar to the point about proposed new subsection (6): it is just a drafting requirement that we do not overlay things and that we have a clear line. It is not to do with the EU.

I am sorry that the noble Lord, Lord Browne, was concerned about my overconcentration on my noble friend Lord Lawson. I did not mean to do any airbrushing but I did mean to concentrate on the fact that I believe that my noble friend Lord Lawson’s amendments in Grand Committee and at this stage have been especially helpful in pushing this whole debate forward.

Turning to Amendment 29 in the name of the noble Lord, Lord Browne, I would actually be very disappointed in the noble Lord if he was to decide to test the opinion of the House. I have been absolutely clear about the timing of government action. I do not understand why he would want to start stipulating in primary legislation the timing of when regulations would be brought, given the language that I am using to talk about what we are doing.

Even though I may not satisfy the noble Baroness, Lady Drake, with the clarity of my expression, I will go through what we are doing. Consultations have sought views on policy implementation. Employers made clear that they wanted sufficient notice of any new scheme requirements. The Minister remains strongly minded to cap charges and, as former Ministers know and can tell the noble Baroness, Lady Drake, significant policy decisions must go through due process, but the Government response is coming soon.

I hope that I have made it utterly, utterly clear what will happen. That is the reason that I do not want the noble Lord, Lord Browne, to test the opinion of the House, because that seems purely political, given what I have just said, and that is not in the spirit—

[Baroness Hollis of Heigham]

I thank to the Minister for giving way. Do the words of the Pensions Minister in the other place, “strongly minded”, have the full, unambiguous support of HMRC?

[Lord Freud]

Yes. I do not want to go into the Lobby on this. I do not think we should; that is not the way that we have conducted the Bill, which we have done by information, support and debating the issues. We should not reduce ourselves to having a debate when we are saying exactly the same thing across the House. That is my request of the noble Lord.

Amendment 25 agreed.

Amendment 26

Moved by

[Lord Freud]

26: Clause 43, page 24, line 4, leave out “work-based”

Amendment 26 agreed.

Amendment 26A

Moved by

[Lord Freud]

26A: After Clause 43, insert the following new Clause—
“Disclosure of information about transaction costs to members etc
In section 113 of the Pension Schemes Act 1993 (disclosure of information about schemes to members etc), after subsection (4) insert—“(5) The Secretary of State must make regulations under this section requiring information about some or all of the transaction costs of work-based money purchase schemes to be given to some or all of the persons mentioned in subsection (2).
(6) But subsection (5) does not apply in relation to a scheme of a particular description if—
(a) as a result of another enactment, requirements are imposed relating to the disclosure of information about transaction costs of schemes of that description, and(b) in the opinion of the Secretary of State, those requirements provide an adequate alternative to what is required by subsection (5).(7) In this section—
“work-based money purchase scheme” means a money purchase scheme that is—
(a) an occupational pension scheme,(b) a personal pension scheme where direct payment arrangements (within the meaning of section 111A) exist in respect of one or more members of the scheme who are workers, or(c) a personal pension scheme which is or has been registered under section 2 of the Welfare Reform and Pensions Act 1999 (stakeholder pension schemes);“worker” means a person—
(a) who is a worker for the purposes of Part 1 of the Pensions Act 2008, or(b) to whom a provision of Part 1 of that Act applies as if the person were a worker because of a provision of Chapter 8 of that Part;but for the purposes of paragraph (b), ignore section 92 of that Act.””

Amendment 26B (to Amendment 26A) not moved.

Amendment 26A agreed.

Amendments 27 and 28 not moved.

Schedule 18: Work-based schemes: power to restrict charges or impose requirements

Amendment 29

Moved by

[Lord Browne of Ladyton]

29: Schedule 18, page 103, line 40, at end insert—
“(1A) The Secretary of State must lay before Parliament regulations to restrict such charges as soon as reasonably practicable and no later than 30th April 2015.”

[Lord Browne of Ladyton]

I beg to move, and I wish to test the opinion of the House.

18:22

Division 2

Ayes: 165

---

Labour: 133
Crossbench: 22
Democratic Unionist Party: 2
Independent: 2
Green Party: 1

Noes: 225

---

Conservative: 142
Liberal Democrat: 60
Crossbench: 18
Ulster Unionist Party: 1
UK Independence Party: 1
Independent: 1

18:35

Amendments 30 and 31

Moved by

[Lord Freud]

30: Schedule 18, page 104, line 24, leave out “work-based”

31: Schedule 18, page 104, line 42, leave out “work-based”

Amendments 30 and 31 agreed.

Amendment 31A

Moved by

[Lord Browne of Ladyton]

31A: After Clause 47, insert the following new Clause—
“Decumulation
(1) Any qualifying money purchase scheme must direct its savers to an independent annuity brokerage service or offer such a brokerage service itself.
(2) Pension schemes shall ensure that any brokerage service selected or provided meets best practice in terms of providing its members with—
(a) an assisted path through the annuity process;(b) ensuring access to most annuity providers;(c) minimising costs; and(d) ensuring that information and support is available on alternative at-retirement products.(3) The standards meeting best practice on decumulation shall be defined by the Pensions Regulator after public consultation.
(4) The standards set out in subsection (3) shall be reviewed every three years and, if required, updated.”

[Lord Browne of Ladyton]

My Lords, Amendment 31A, which stands in my name and in the name of my noble friend Lady Sherlock, proposes the addition of a simple clause to the Bill. The clause would require the provision of an independent annuity brokerage service or the offer of such a service to all members pending retirement. The clause goes on in later provisions to set out how best practice should be defined and maintained in the brokerage service offered to the retiring member or to which he or she is directed. It calls for an independent brokerage service to assist people to annuitise at the point of retirement. This is hardly a radical proposal. It fits the description of best practice and is what many employers with DC pension schemes already offer.

The ABI code of practice says that providers should tell people decumulating that they can shop around and transfer the funds to another provider and advise them to seek advice before so doing. However, that is not enough. As Dan Hyde wrote in an article in the Telegraph in December:

“The process starts with a ‘wake-up’ pack sent to savers months before their named retirement age, in which pages of often unintelligible information, packaged in unhelpful ways, baffle even the well-informed”.

Of course, people can purchase their own independent financial advice but the majority do not retain or use independent financial advisers or accountants. A one-off appointment would be expensive—equivalent to a week’s take-home pay for workers on average wage—even if they knew where to go.

Undoubtedly, employers’ firms can negotiate a better rate but the scandal of annuities is well known and widespread. In one sense, how often do we need to be told? Only last week, in yet another report, the Financial Conduct Authority confirmed again that the annuities market is not working and that it is disorderly. The number of adjectives that can now be found to describe financial services markets is interesting. The Financial Conduct Authority has ordered a further review but we need immediate action. Each week, more than 1,000 people are buying annuities and those transactions are irreversible. Once bought, you cannot change your mind and getting the right one can be the equivalent of an extra £1,500 in savings. With respect to the FCA, it hardly needs another competition market study to find out why consumers do not shop around. The problem is that the pension companies which sell them are simply not doing enough to explain to people that they can shop around.

When this amendment was debated in Grand Committee the Minister used the same diversionary tactic as Steve Webb, the Pensions Minister, did in the Commons and as the Minister who responded to the Westminster Hall debate on annuities did too. Depressingly, I fear that the Minister can be expected to repeat that argument today. It is all very well to suggest that those reaching retirement age can do many other things—other than plan for an annuity—but it is insufficient, in the face of the continued mass selling of inappropriate annuities, to say to people that they have many different opportunities and need lots of different advice beyond annuities. The fact is that the variety in the annuities offered and the deals available is considerable. Those people—1,000 of them each week—need independent support and advice right now.

The need for independent advice at this point may be obvious but the reasons for it are worth repeating. First, on the complexity of choosing the right annuity option, annuities are a complex product and decumulation is a complex process. Comparison between the providers is difficult. Before we debated this in Committee, I saw a quote for an annuity pot of only £30,000. In one short e-mail the following terms were contained: single life, level escalation, anticipated bonus rates and required smooth return rates—every single one of which was without an explanation. It offered four choices to a “conventional lifetime quotation” annuity described as income-choice annuity or with-profit annuity, and out of nine total options the rates varied between £700 and £1,400, with most around the £1,200 mark. It is no wonder, with such complexity, that no one should exercise a choice without advice; and so it is no wonder that over 50% of people just go with their existing provider.

The first comparator website has been launched. This is a step in the right direction. However, the independent pensions consultant, Ros Altmann, who gave evidence to the Commons committee, did not think that it was simple. She said that it was disappointing and not easy to use. Annuities are complex products with multi-options and perhaps there never can be a simple comparison site.

At this point I intend to repeat questions that I posed to the Minister in Grand Committee. They demand answers from the Government, to explain their resistance to this amendment, and they were not answered when we were in Committee.

First, does the Minister accept that annuities are complex and that people need independent advice? Does he accept that purchasing that advice is beyond the grasp of most people, particularly those with no knowledge of investments? If he does so accept, how does he suggest that those who need this advice now can be guaranteed to get it?

Secondly, the variety in the kinds of annuities offered and the deals that people can get is bewildering. The NAPF and others have said that annuitising with the pension scheme provider pays on average 20% less than shopping around. In effect, inertia, or being overwhelmed by the complexity of making a choice, is exploited by pension providers. Insurers are making excessive profits from purchasers failing to shop around. On “Newsnight”, Ros Altmann said that if you had an annuity with the worst performers you would have to live until you were 100 to get back just what you had paid in.

Inertia, as I say, is a powerful force that results in excess profits for insurers. They penalise you, not reward you, for loyalty. Estimates suggest that £1 billion of retirement income is being lost to savers every year just by the force of inertia. The report of the FCA Consumer Panel—the FSCP—was published in December and made many points. I have drawn on these points before in debating this issue and I do so again because they are so powerful.

First, the tactics used by insurance companies and brokers were “tantamount to burglary” of old-age pensioners. The report said that it is nearly impossible for pensioners to know whether they are getting a good deal. Pensioners are hit by excessive profits and exploitative pricing. Insurance companies are making 20 times more profits on annuities than any other financial product. As for poor returns, on a pot of £100,000 Clerical Medical offers £4,664 per annum while Reliance Mutual offers £6,111. Over their expected lifetime people would be just over £36,000 worse off if they made the wrong choice.

As for opaque charges, brokers are incentivised to sell particular products; in some cases they make 6%, or £12,000, on a pot of £200,000. There are sharp practices with brokers shopping around, resulting in a referral fee from each. Many also have exploitative pricing; that is, they have sold a product for a fit person when they are not fit, or an adviser neglects to tell people of other products such as income drawdown because the profit margins are slimmer. Companies can make £35,000 profit over 25 years on a pot of £100,000. I have to say that that was the finding of the report, although the figure was denied by the ABI. The ABI has not, however, said what profit is made.

As your Lordships will be aware, the Pensions Minister, Steve Webb, commissioned a review of annuities from the FCA which reported last week. To no one’s surprise, the FCA concluded that the annuities market was not working. It was “disorderly”, according to the FCA’s chief executive, and the watchdog’s report suggested that four out of five consumers could get a higher income by just shopping around. To many people’s frustration and disappointment, after this extensive review the FCA said that it would launch a further review, a competition market study, to find out what we all already know. Consumers will now have to wait many more months for this second-stage investigation before regulatory action of some description can be started. In the face of 1,000 people a week still making this irreversible decision, that is not good enough.

People who have gone without, who have diligently saved throughout their working lives, are being systematically “burgled”, to use the FSCP’s word, by a profit-hungry industry and its associated sales force. Annuities are building up to be the next scandal and mis-selling crisis. The sector will not sort itself out. We need to strengthen the buyer side, and Parliament needs to take action on behalf of savers. If we do not sort out annuities we will undermine auto-enrolment. This proposed new clause, if accepted, will provide people with guaranteed access—or at least the offer of it—to an independent annuity brokerage service at the point of decision. It will strengthen the buyer side. Annuities are one area of pension policy where the buyer deals directly with the provider and makes choices. With independent support these choices will be better informed choices. Access to an independent service will protect savers from making poor choices that could reduce their income by up to 20%. This small step may help divert us away from the next financial mis-selling scandal—or at least protect Parliament from the criticism that it failed to act when presented with the evidence of the need to do so.

I think that the information I have laid before your Lordships makes the case for the need to provide an independent annuity brokerage service, or at least the offer of such a service, to pension scheme members who are approaching retirement to help the member make wise choices. There are already 400,000 people annuitising each year, and this number will escalate from 2020 onwards when the impact of auto-enrolment starts to kick in. I again urge the Minister to accept the need for it now and in the future. I beg to move.

[Lord Freud]

My Lords, this amendment is identical to the one that we debated in Committee. I will confirm the government position for the record, as well as respond to the new points made.

The Financial Conduct Authority has confirmed the Government’s concerns that the way the annuity market operates may be disadvantaging consumers. This may be—in the language of the noble Lord, Lord Browne of Ladyton—“tantamount to burglary”, and it clearly continues to be of great concern to the Government. We recognise that it is critical that individuals make the right decision about their retirement income, because some of these decisions are ultimately irreversible. However, the solution offered by this amendment is not the answer to a problem which I acknowledge.

What are the Government doing? First, we are supporting the consumer to make a decision that is right for them. We are leading on and supporting a wide range of initiatives aimed at driving up standards among providers, providing guidance to trustees and educating members. The ABI code of practice is designed to tackle the worst of the inertia selling practices—for example, removing the application form from the pack. It talks about the three decisions that the consumer needs to make: whether they should retire now; what type of income is appropriate—it may be annuities, but it may not be—and telling the consumer how to get a better deal on the open market.

Secondly, the new Pensions Regulator guidance sets out expectations for what trustees should provide for their members. Thirdly, the Money Advice Service is developing its services for people approaching retirement age. Fourthly, the National Association of Pension Funds has published a guide to trustees and employees about the benefits to scheme members of support at retirement and the range of options available to them on the open market.

Those are just some examples of the initiatives that have recently been delivered under this Government. In addition, the noble Lord mentioned the Financial Conduct Authority’s thematic review of annuities and the fact that it has launched a market study on the annuity market. He did not seem to welcome that wholeheartedly but we are very pleased that the FCA has decided to take this step; it is this Government’s changes to the FCA’s objectives that have enabled it do so. HMT and the DWP are currently reviewing the broad range of available research and statistics on at-retirement options, but with emerging findings from the FCA we will have the evidence to inform any further action required.

On the issue of independent advice, individuals already have access to free and independent information and guidance via the Money Advice Service and the Pensions Advisory Service. I need to pay tribute to the noble Baroness, Lady Hollis, who is a board member of the latter organisation.

I come to the core of why this amendment is not the right response. Indeed, it is rather funny that the noble Lord was quoting examples of sharp practice, with brokers shopping around and not informing their clients of the income drawdown. This is the point about, “While there is a problem, this is not the solution”. Making annuity brokers the first port of call for all would simply create a captive market for one part of the industry without effectively adding to consumer protections. Annuity brokers, unless they are also FCA-regulated advisers, are not required to ensure that the product is suitable for the consumer. I must be absolutely clear on this point: this measure would not provide the member with regulated advice. The Financial Services Consumer Panel recently published a report identifying a number of risks for the consumer in going down the non-advised route.

This measure would therefore push people down a brokerage route and could lead to the next mis-selling crisis, not help to avoid it, as the noble Lord suggested. The amendment as it stands would mean that people would be been pushed into receiving non-regulated advice and might end up locked into unsuitable products without recourse to the protections that regulated advice affords. Furthermore, the measure focuses almost exclusively on annuities; it makes reference to information on alternative at-retirement products, but it has to be recognised that annuity brokers are not necessarily impartial—they make their money if a member buys an annuity. Indeed, that is a point that the noble Lord made in his own speech.

This Government’s position is that it is essential for people to understand all their options, not just annuities, and to work with relevant bodies to ensure that appropriate help is available. Clearly, our work is not complete. However, we do not believe that this amendment, pushing people down a single product path, is the right solution. We are committed to ensuring that consumers have the information that they need to make good choices and that the annuities market works effectively for consumers. It is ongoing work but we will continue to challenge the industry if there is no significant improvement. The Financial Conduct Authority’s review findings will be vital in that assessment.

While I welcome the debate, which is clearly an important one, this amendment would not deliver what the Opposition actually want. It risks making things worse for the consumer. It would legislate to make annuities the foremost option for deriving a retirement income when this may actually not be the right route for many, especially those with small pots. It would put the responsibility for providing information to members solely in the hands of annuity brokers, leaving many without the protections afforded by regulated advice. As I said, if that is not a potential mis-selling scandal, I would like to know what is.

I would like the noble Lord not to test the opinion of the House on this because he should not, and he does not actually want to push it.

[Lord Browne of Ladyton]

My Lords, I am grateful to the Minister. He failed when he played that card last time; he should have learnt.

The use of the word “burglary”, which is not one that comes easily to a Scottish lawyer because we in Scotland have no such concept, is not mine but is from the FSCP’s report. The report which looked into this described such behaviour as tantamount to burglary. I deploy the word because it is evocative but also because it describes quite well what is going on.

I am grateful to the Minister for setting out the Government’s ambition in this regard, which is far-reaching, complicated and, I understand, ambitious, but the scandal continues. While we discuss the complexity of all this and indeed add further complexities to it, 1,000 people a week, most probably through inertia, are buying annuities, many of which are tantamount to burglary of their savings. We are suggesting with this amendment that we must do what we can to try to stem that process, while all the other complex things that need to be done—I accept the detail and the challenge of that—can be done. The scale of the scandal demands a deep and wide perspective of responses; I accept that. However, there is something we can do about this. Given that these people are going down this path without independent advice, the purpose of the amendment is to get them access to that information and that service so that they can make choices.

I now come, in just a few sentences, to the core issue that the Minister used as his principal push-back against this amendment. I suspect that he did not read all of the amendment carefully enough. Had he got as far as proposed new subsection (3), he would have seen that all this advice has to be best practice, defined by the Pensions Regulator after public consultation—a form of regulation—and that that process has to be subject to a continuing review. It was intended, in the flexible sort of way in which I have got used to this Government working, to provide a process of engagement, discussion and consultation that allowed best practice to develop in this area and to improve the performance of those people who provide independent annuity brokerage services. This is a model that I have learnt, in my time in your Lordships’ House, from the conduct of the coalition Government. I commend it to the Minister, I commend it to the House and I wish to test the House’s support for it.

18:58

Division 3

Ayes: 131

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Labour: 113
Crossbench: 10
Democratic Unionist Party: 2
Independent: 2

Noes: 197

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Conservative: 127
Liberal Democrat: 51
Crossbench: 15
Ulster Unionist Party: 1
Independent: 1

18:59

[The Deputy Speaker (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I need to announce a correction to the voting figures on the first Division this evening, which was on Amendment 23. The correct figures were Contents 210; Not Contents 251.

Schedule 20: Pension Protection Fund: increased compensation cap for long service

Amendment 32

Moved by

[Lord Freud]

32: Schedule 20, page 108, line 37, at end insert—
“( ) A person credited with a length of notional pensionable service because of pension credit rights is to be treated for the purposes of this paragraph as having pensionable service of that length (in addition to any pensionable service that the person is treated as having under sub-paragraph (8)).”

[Lord Freud]

My Lords, in moving government Amendment 32 I will speak also to government Amendments 33 to 41.

As noble Lords will be aware, we are proposing to change the compensation cap in the Pension Protection Fund to recognise long service in a scheme. The standard cap shall be increased by 3% for each year of pensionable service over 20 years. Schedule 20 contains most of the provisions needed to implement the long-service cap. However, some technical amendments are needed to reflect particular situations and I shall address them in groups.

Amendments 32 to 34 deal with the identification of pensionable service for certain individuals—obviously an important issue, given that the long-service cap kicks in once a person has 21 years of service. For example, a person who has been a member of a scheme for 10 years has that amount of pensionable service. However, they might also have transferred into that scheme a pension built up in a previous employment. Where the PPF has deemed service, say 15 years, in respect of this transfer, these amendments will permit the two periods to be added together so that the individual will be treated as if they had 25 years’ service in total.

Amendments 37 and 38 deal with a scheme in the process of assessment when the legislation commences, where the scheme applies for the decision not to transfer the scheme to the PPF to be reconsidered. While the application is being considered, the current cap will apply for the purposes of assessing the scheme’s protected liabilities.

Amendments 35, 36, 39 and 40 are needed to clarify the scope of the legislation dealing with those who are in receipt of compensation when the long-service cap becomes law, for people sharing compensation and with benefits entitlements arising at different times. Amendment 41 is a minor correction needed to the current legislation.

In Grand Committee, the Government tabled a new clause, now Clause 50, dealing with the compensation cap. As my noble friend Lord Bates explained at the time, the clause was needed to ensure that the legislation reflects the policy and current practice when applying the compensation cap separately to compensation based on benefits deriving from different sources which are payable on the same day—for example, where an individual has entitlement to a pension but also a pension credit deriving from a divorce settlement. Clause 50 has a retrospective effect so as to cover payments already made. However, it applies only to cases where the two benefits were payable on the same date.

Amendment 41 is needed to provide retrospective cover in cases where compensation derived from different sources is payable on different dates. It modifies the relevant provision of the Pensions Act 2004 to allow us to bring forward regulations that have a retrospective effect, so that such payments already made in accordance with the accepted policy and practice are covered.

Getting the long-service cap into legislation has been a long process, requiring amendments at various stages of the Bill, and I thank noble Lords for their patience. I beg to move.

[Lord Browne of Ladyton]

My Lords, on behalf of these Benches, I welcome these amendments. In doing so, I take the opportunity to ask for an assurance that entitlement to a pension credit secured by a spouse as part of a divorce settlement will not be weakened by any of these amendments. If the Minister is unable to respond immediately to that, I will be content for him to write in due course.

[Lord Freud]

My Lords, that position is not affected by these amendments.

Amendment 32 agreed.

Amendments 33 to 40

Moved by

[Lord Freud]

33: Schedule 20, page 109, line 6, at end insert—
“(9A) Where a person becomes entitled to relevant compensation in respect of benefits under two or more connected occupational pension schemes at the same time, this paragraph applies in relation to the relevant compensation in respect of each benefit as if—
(a) a reference to the length of the person’s pensionable service were a reference to the total length of the person’s pensionable service under all of the schemes (ignoring any period of overlap), and(b) sub-paragraphs (8) and (9) apply for the purposes of working out the length of the person’s pensionable service in respect of each scheme as if a reference to the admissible rules were to the admissible rules of that scheme.”

34: Schedule 20, page 109, line 6, at end insert—
“(9B) When applying this paragraph in relation to relevant compensation in respect of a benefit, ignore any pensionable service that relates to a benefit that is not from the same source.
(9C) For the purposes of sub-paragraph (9B)—
(a) benefits attributable to a person’s pensionable service under a scheme are from the same source as benefits attributable to the person’s pensionable service under that or a connected occupational pension scheme,(b) benefits under a scheme which are attributable to a pension credit from a transferor are from the same source as benefits under that or a connected occupational pension scheme which are attributable to a pension credit from the same transferor, and(c) benefits are not otherwise from the same source.”

35: Schedule 20, page 109, line 13, at end insert—
“( ) In paragraph 24(2), at the end insert “of the periodic compensation at that time”.”

36: Schedule 20, page 109, line 16, at end insert—
“In paragraph 18(2) of Schedule 5 to the Pensions Act 2008, for “the compensation cap” to the end substitute “a modified version of the compensation cap in paragraph 26A of Schedule 7 to the Pensions Act 2004”.”

37: Schedule 20, page 111, line 37, leave out “sections 127(2)(a) and 128(2)(a) of the Pensions Act 2004” and insert “the following”

38: Schedule 20, page 111, line 40, leave out “that Act.” and insert “the Pensions Act 2004—
(a) any provision in which the definition of “protected liabilities” in section 131 of that Act applies, and(b) any provision in which the definition of “protected benefits quotation” in section 151(8) of that Act applies.”

39: Schedule 20, page 113, line 3, at end insert—
(1) In relation to a case involving multiple benefits, transitional provision made by order under section 55(8) may, in particular—
(a) disapply or modify any provision of this Schedule;(b) make provision similar to any provision of this Schedule.(2) For these purposes, “a case involving multiple benefits” means a case mentioned in paragraph 26(9) of Schedule 7 to the Pensions Act 2004.”

40: Schedule 20, page 113, line 3, at end insert—
(1) Transitional provision made by order under section 55(8) may, in particular, make provision in relation to compensation payable under Chapter 1 of Part 3 of the Pensions Act 2008 (compensation sharing on divorce etc) that is similar to any provision of Part 3 of this Schedule.
(2) Regulations under paragraph 18 of Schedule 5 to the Pensions Act 2008 which restrict an amount payable to a person in any period by reference to a modified version of the compensation cap in paragraph 26A of Schedule 7 to the Pensions Act 2004 (inserted by Part 1 of this Schedule) may also make provision similar to any provision of Part 3 of this Schedule.”

Amendments 33 to 40 agreed.

Clause 50: Pension Protection Fund: compensation cap to apply separately to certain benefits

Amendment 41

Moved by

[Lord Freud]

41: Clause 50, page 27, line 16, at end insert—
“(8) Regulations under paragraph 26(9) of Schedule 7 to the Pensions Act 2004 (modifications for cases where compensation becomes payable on different occasions) made in consequence of this section may be made with retrospective effect.”

Amendment 41 agreed.

19:15

Amendment 41A

Moved by

[Baroness Sherlock]

41A: After Clause 51, insert the following new Clause—
“Review of provisions
Within one year from the date of enactment, the Secretary of State shall, following the completion of a public consultation, lay before both Houses of Parliament a report assessing the impact of the provisions contained within this Bill on the following—(a) current and future recipients of the state pension;(b) members of private pension schemes;(c) women born between 6 April 1951 and 5 April 1953;(d) the level of knowledge among young people of state pension entitlement and private pension provision; and(e) such other matters that the Secretary of State for Work and Pensions and the House of Commons Work and Pensions Committee deem relevant.”

[Baroness Sherlock]

My Lords, Amendment 41A in my name and that of my noble friend Lord Browne calls for the Secretary of State to review and report to Parliament on the impact of the Bill on specific groups. I recognise that the department undertakes research, but this amendment picks up on something slightly different: the impact on specific groups about which concern has been expressed during the passage of the Bill through Parliament, or where provision is in effect a work in progress.

This is a major Bill that will have a significant impact on the majority of our citizens—indeed, on pretty much all of those who have yet to reach state pension age. If the Bill proves to be even half as good as the 1948 Act, it may be in place for a long time. The amendment calls for reviews of provisions made in the Bill to check that we have got it right and to enable us to make any necessary adjustments for those who are unfairly disadvantaged, or where provisions seem not to be working as we might have hoped.

Paragraph (a) of the proposed new clause calls for a review of existing and future beneficiaries of the state pension scheme. When there are winners and losers we should review that to make sure that we have got the balance right. We should also include within the review an assessment of whether transitional arrangements are adequate and working.

Paragraph (b) relates to the operation of private pension schemes. Given the debates this evening, I hardly need detain the House further by sharing our views on whether the private pensions system is working well; I think that we all know that there are challenges. Some of the changes that are needed, such as to the annuity market, may well need primary legislation, but many will not. The review will take the opportunity to look at whether the various changes, legislative or not, which the Government have made and promised, are working effectively.

Paragraph (c) relates to the concerns expressed by many women born between 6 April 1951 and April 1953. I am sure that all noble Lords have had many communications from women in that category who are affected. In Grand Committee, the Minister was pressed by various noble Lords, including my noble friend Lady Hollis and the noble Lord, Lord Paddick, to be clear as to whether or not this cohort of women would be better or worse off under the new system. The assumption of the Government is that they will be better off, but I never got a satisfactory response to the question I posed in Committee as to why the Government think that women born between 1951 and 1953 are better off under existing arrangements, and yet also claim that women will mostly be better off under the new pension arrangements. I still do not quite understand how both can be right. The amendment asks the Government to report to Parliament on the actual impact of these provisions, rather than simply relying on analysis of what the impact is likely to be.

Paragraph (d) focuses on the need for a review of the knowledge of young people of the system. Young people currently face a challenging work environment with high youth unemployment, the potential for high debts if they go to university and astonishingly high rents. We may safely conclude that, for most of them, concern about living in poverty in their dotage is not chief among their concerns, so a call to start contributing to an auto-enrolled pension may not ring loud. Yet that is of course the very best time to address those concerns.

Better financial education is needed, coupled with information about the importance of providing in future for their retirement. We owe it to young people to encourage them to consider making pension provision as soon as they are able to do so. This amendment seeks to keep track of the Government’s strategy to ensure that our young people are armed with a greater understanding of the need to proactively engage with pension decisions.

This is a far-reaching Bill and we should therefore make sure that we have got it right. Paragraph (e) of the proposed new clause recognises that the Select Committee, and indeed the Government, may identify other matters that should be reviewed and reported to Parliament.

The principle underpinning the Bill is that people should have a state pension that is simple to understand and that they should take responsibility for saving for their old age through work-based pensions. We also need to have it acknowledged today that the state owes a duty of care to the large numbers coming under auto-enrolment. In light of the broad consensus that industry must improve its standards and reduce its charges, its progress towards that should be monitored by Parliament. The amendment sets out a method of parliamentary scrutiny to ensure that we have got it right and that the Pensions Bill will last us, as the Minister aspires, for decades to come. As there will be an election before enactment—and, of course, a change of Government, one hopes—the amendment is prudent. I recommend it to the House. I beg to move.

[Lord Freud]

My Lords, I do not think that anyone in the House can be under any misapprehension but that the Government value extremely highly the role of evidence, analysis, consultation and evaluation in policy-making. Our approach to designing this once-in-a-generation package of pension reforms has been heavily informed by a robust and wide-ranging evidence base. However, looking at the text of the amendment and its timing, I must make clear that the provisions on the new state pension, and many of the other provisions in the Bill, will simply not have been commenced by spring next year—the time used in this amendment. Therefore, all that would come out of such an amendment would be a rehash of the information that has already been provided to Parliament: there would be nothing to add. We have no particular objection to this amendment in terms of sentiment, but its timing is just not appropriate.

I will not spend a lot of time going through all the issues, which we have gone through in huge detail over the past weeks and months. However, I will touch on how we will monitor the impacts in the future and what the plans are. It is clearly imperative, as the noble Baroness said, that a set of reforms of this nature is accompanied by a strategic approach to monitoring at sensible intervals. I am not saying anything that noble Lords will disagree with when I state that pensions is a very long-term policy area, and that the impact of many measures will not be felt fully for decades.

As a society we are asking people to do more to think ahead and plan for their retirement. As a Government it is our duty to do the same in looking at the retirement outcomes of the population as a whole. Our retirement outcomes framework, published in September 2013, provides an overview of projected future retirement incomes, looking at the impacts of government pension reforms as a whole and across state and private systems.

[Baroness Hollis of Heigham]

Perhaps the noble Lord could write to me if he does not have the answer at his fingertips. I respect his concern for evidence and policy base, but, as he will know, that depends on longitudinal statistics and their consistency. There has been quite a lot of dispute about threats to discontinue some of the longitudinal statistics which show households below average income, recipients of benefits, what is happening with pension credit, and so on. My noble friend Lady Lister, who is not here at the moment, has been concerned about that. Can the noble Lord write to us and tell us what series of statistics will be kept from the implementation of this Act, so that we can track, for example, the groups that my noble friend has mentioned—the 1951 to 1953 group—and what is happening to people who will lose their derived rights as married women, widows, divorcees and so on? What assurances can he give us about how we can be sure that we are in a position, if we need to be, to adjust policy because we have the information to hand?

[Lord Freud]

That is clearly a relevant and central set of issues, and it is quite technical. As the noble Baroness invited me to write, I will make sure that we produce a comprehensive look at exactly what these series are and what they will contain. I will be happy to arrange that.

[Baroness Hollis of Heigham]

Also, what if any future surveys does the Minister expect the Government now to engage in as a result of this Act coming into force?

[Lord Freud]

I am happy to make sure that we itemise those in a way that will help noble Lords keep an eye on what they need to monitor as we go along.

We will update the modelling as evidence becomes available on the impact on work and saving of automatic enrolment, the single-tier state pension, and state pension age changes. As noble Lords will know, the department conducts a six-monthly tracking study of attitudes and behaviours in relation to pensions, later life and automatic enrolment. A similar exercise will start after Royal Assent, to monitor awareness and understanding of the reforms.

We are committed to the principle of post-legislative scrutiny, but such scrutiny must have scope to provide insights beyond the impact assessment and consultation practices to which we are already committed. I know that the noble Baroness accepts the point on timing, but the timing of this amendment would not add materially to the powers of the Work and Pensions Select Committee. Indeed, there is an awkwardness about the timing, because it straddles the next election. However, we look forward to continuing to develop pensions strategy with that committee’s input.

I know that the noble Lord does not appreciate my asking for the other side to withdraw this amendment and not press it to a vote, but that is the position I am in. Maybe there is more warmth to my request than there has been this evening.

[Baroness Sherlock]

My Lords, that would not be hard. I thank the Minister for that response, and I thank my noble friend Lady Hollis for pressing him for more detail on how this will be monitored in future.

I am very grateful to the Minister for setting out the Government’s commitment to post-legislative scrutiny and for setting out his commitment to making sure that the impacts of the Bill are analysed carefully, and with the use of evidence. I will press him to do two things. The first is to give particular attention to the two groups mentioned by my noble friend Lady Hollis. The women born from 1951 to 1953 feel very strongly that they have missed out on something important with this. If the Government turn out to be right, and they are better off under the current system, it is important not just that the Government find that out but that they share that knowledge as widely as possible. If that is the case, those women will be reassured—and, if not, they have a right to know anyway. Can the Minister also look at the position of those who would have been affected by, for example, the removal of derived rights, and whether the transitional protections are working well for them?

Secondly, as well as all the work that has been done to an appropriate timescale, will the Minister give some thought to how that might best be shared with the House? The proceedings have been very good as the Bill has moved through Parliament. A lot of issues have been raised—in this House in particular—and a lot of expertise has been brought to bear on this, and we have all learnt a lot from the process. Having done that, rather than have the results of it disappear into the department, marvellous as it is, it would be helpful if they could come back out so that we can all learn from that, both for the Bill and for future legislation. However, I will take his assent to those marvellous suggestions as read, and on the basis of that—and because he asked so nicely—I beg leave to withdraw this amendment.

Amendment 41A withdrawn.

Clause 53: Regulations and orders

Amendments 42 and 43 not moved.

Care: Financial Services Industry

Wednesday 26th February 2014 Lords Chamber

Question for Short Debate

19:28

Asked by

[Lord Lipsey]

To ask Her Majesty’s Government what plans they have for the role of the financial services industry in funding care provision in the light of the Dilnot commission reforms.

[Lord Lipsey (Lab)]

My Lords, I declare my interests as unremunerated president of the Society of Later Life Advisers and a member of the advisory committee of the Equity Release Council.

The request for a debate on this was sparked by the publication on 21 January, jointly by the Department of Health and the Association of British Insurers, of a document called Social Care Funding: Statement of Intent. To be more accurate, it was sparked by the reporting of that document the next day in the Financial Times, which said that the statement meant that,

“government hopes of early products covering the cost of long-term care for the elderly”,

had been dashed. That was based on one conclusion of the report: it was unlikely that prefunded products to pay for long-term care would emerge, at least in the immediate future—that is, products that people had paid for during their working life. I am myself a journalist, but I am afraid that that really was news only to the FT. There have been no such products for a very long time, and they are even less likely in the light of the Dilnot cap on care costs. The fundamental reasons are very simple: they are supply and demand. From the point of view of companies providing them, they are very difficult policies to produce, because they require you to assess many years in advance how long people will live for, how long they will claim off the policies for and how much the cost will be. That is on top of all the usual problems of moral hazard with any insurance product. To put it technically, they are virtually impossible to price.

Even if those products were on offer, who on earth will buy them? We know that people during their working lives do not much care to think about their last years of life. We know that roughly only one in three people goes into residential care and is therefore most likely to benefit from prefunded products, and we know from talking to independent financial advisers that if you try to raise this sort of product with people during their working lives, they are not interested. They are interested in their pensions, yes, but not in care products. So they have never been a possibility and nothing in the Government’s plans has ever assumed that they were a possibility or were going to happen. If I were an insurance salesman, which thank God I am not, I reckon that I would have a better chance at selling heating to the denizens of hell than I would of selling these products on earth, if they existed. They are unsuitable and unsaleable—what is to like?

The FT missed the real story in the account, which is that there are two classes of product that are saleable and suitable and would supplement the recommendations of Dilnot as interpreted by the Government. One is point-of-use products whereby, if I go into a home tomorrow, I can insure myself so that my care costs are covered, however long I live. The second product is the enhanced annuity—that is, I start off with one pension and then, as I develop greater care needs, that pension is enhanced. I want to say a word or two on each of those products, which are essential in complementing the Dilnot proposals.

Point-of-use policies already exist. It is a small and specialised market, with about 7,000 policies extant and about 1,000 sold a year with three firms providing them. However, very few elderly people know of their existence. That is a point that I shall return to later—not, I think, greatly to the Minister’s surprise. They have a very important part to play in the Dilnot settlement. Dilnot caps costs at £72,000, or at least that is the story. But in reality, for many of the better-off people who go into a residential home it does not cap costs at £72,000 at all. They have to pay £12,000 in living costs on top of the £72,000 but, more importantly, that is £72,000 at the rate that a local authority will pay for a home. To cite the example of someone whom I know and love, who is in a home in Oxford that costs roughly £1,000 a week, she is marvellously cared for but the local authority will not fund £500 so there will not be £500 to count towards the cap. If she wants to protect herself so that she can stay in that home for the rest of her life, as she would like, one way in which she can ensure that is by buying one of the private policies. But Ministers have spoken rather with forked tongues about this. I do not mean the Minister here in particular, but Ministers from the Prime Minister onwards who have tried to obfuscate the fact that the cap covers only the cost of a home at the rate provided by the local authority. Really, the Government have to come clean with the public about what the cap is so that they can protect themselves, and know that they need to protect themselves, if they wish to.

On care annuities, the Government have a bigger role to play. There are a lot of difficult issues here. For example, there could be tax difficulties. If you have an enhanced annuity that raises your income to a level where you are paying higher rate tax, that would be quite a difficulty. Indeed, the tax situation on these annuities is not altogether clear, partly because the Inland Revenue likes to ensure that annuities are taxed. Although they are allowed to rise in line with prices, they are not necessarily allowed to rise in line with needs. The Government have more work to do before those policies can be safely marketed, sold and developed as they should be to help people as their needs grow.

I conclude with two final sine qua nons—I am sorry, that is naughty. I have used two Latin tags in one speech, but your Lordships’ House will forgive me if nowhere else will. Those sine qua nons must be met if the financial services industry is to fulfil its potential as a complement to the post-Dilnot world and not as a substitute for the government cap or assuming that the Government will pay for everything, which is the world that we are, thank God, finally leaving.

My first point concerns regulation. I am afraid that I could speak for a long time on that but, fortunately, this is a time-limited debate. In particular, I am not convinced that the standards required of independent financial advisers operating in this field are sufficiently high. Too many advisers sell too much on the basis of too little knowledge. The standards are simply not high enough. I exempt, as of course I would, SOLLA-qualified advisers, who are very fully trained and equipped—but others are not.

There is also a worry that needs a good deal of thought, and I do not have the solution to this one yet. There is something about in the industry that I would call the fear of FOS—the Financial Ombudsman Service. Many advisers who could play a very useful role for society and themselves by getting into this business are frightened that, although they sell the policies reasonably honestly, they will be found to have mis-sold them by FOS and will be forced to pay huge amounts in compensation. That is something that the Government need to look at, to see if any reassurance can be provided if we are to have the advisers available to provide the advice that people need.

The second sine qua non is the provision of information from the Government about precisely what the scheme does and does not offer as well as what it remains for individuals to provide for themselves. Does that make three Latin tags? On the subject of information, we made very good progress during the passage of the care Bill, and I thank the Minister and his ministerial colleagues for being so open-minded about this. The Government are committed to a national information campaign and to monitoring progress in public understanding, as well as to obliging local authorities to play their part in what we hope will emerge as a holistic system of advice and information. But the devil lies in the detail. I think that it is on balance right that the detail is not in the Bill, but getting the rules absolutely right is essential and giving local authorities the resources that they need to fulfil their advice functions is also essential.

There are also in the advice field complexities entirely of the Government’s own making. It is absolutely crackers to have one date on which the deferred payment scheme is introduced, whereby people do not have to sell their house, and a quite separate date when the Dilnot scheme comes into effect. Can noble Lords imagine how in that intervening year a financial adviser is to explain, let alone provide sound advice, to a client? It is simply impossible. What happens if someone comes to him a few weeks before the new benefit rules come into effect? Does he tell them to take out a deferred payment or not, when that benefits scheme may pay a lot of those costs? This is simply mad. The Minister will be glad to hear that if he agrees to reconsider his policy on this—and I hope that he will discuss it with his colleagues—the Government would actually save a bit of money.

I conclude as I began. The private financial services market has an important role to play as a supplement to Dilnot and providing a holistic system of support, particularly in helping people who have saved hard all their lives to make sure that they protect the assets that they wish to leave to their children. However, although we have passed the Bill and it is passing through another place, there is still much work for the Government and the industry to do if it is truly to fulfil that potential.

19:39

[Baroness Gardner of Parkes (Con)]

My Lords, I am delighted to join in this discussion, particularly as the noble Lord, Lord Lipsey, has made many important points. I am glad to hear that he is on the Equity Release Council’s advisory board. Equity release is something people know very little about; they are suspicious of it and distrust it because they do not understand it. Equity release schemes will have to prove themselves if they are to satisfy people.

I first debated a cap in connection with care costs years ago and I think that the relevant figure at that time was less than £10,000, which shocked me a bit. Even now it is less than £24,000, so it is appropriate that Dilnot has proposed a much more realistic figure for our times. However, a great difficulty arises as regards financial products and older people. In earlier times, older people could get a bridging loan from their bank. Now it does not matter what your assets are, the banks will give nothing at all if you are over 75, and some banks will not give anything to people over 70. They do not want to know you if you are in that age group. They will give you a loan if you want to buy something to rent but, if you want to use the money to cover your own future needs, despite the fact that they can easily recoup it from the sale of the property when you die, they do not want to know.

In many parts of the country, particularly London, many elderly people are capital-rich but have only a very small income. If they wish to remain in their own home, they have to find a means to raise money. At the moment, equity release or insurance seem to be the only two available options. Kensington and Chelsea is cited as having more people who have lived in their home for more than 50 years than anywhere else in the UK. When I came to London, I rented a flat near Portobello Road. The porter of the block lived in a small house in Portobello Road. Those houses were selling in the 1950s for £750. As a sitting tenant, the porter was offered his for £450, which, sadly, he could not afford. Today, those same houses are selling for well over £2 million. If a mansion tax is introduced, the residents will be liable for that tax. Tremendous social upheaval would be caused if people who have been in their house for 50 years suddenly have to find ways to release cash in order to stay there. I have asked equity release organisations whether those people could use equity release for that purpose and was told that they could. However, if they do so, there will be less money available to pay for their care. Moreover, the relevant bodies are willing to provide only a certain amount given that risk is the big factor in all financial transactions now. Everyone wants to avoid risk and we want to be sure that the banks are sound. They are risk-averse, so the whole thing is very difficult.

As I say, the public do not know enough about equity release, and regulation is very important. I was interested to hear the comments of the noble Lord, Lord Lipsey, on regulation. There are good regulations in this field—for example, the regulated home reversion plans, sale and rent back plans and home purchase plans. The ombudsman scheme to which he is referred is, I am pleased to say, free for the complainant, which is important. People are still a bit rattled by what happened at the Co-op, which everyone had thought was so sound. However, the regulator regulates standards of behaviour, not of pricing. We need to be sure that equity release does not end up like the payday loan scheme and rip people off in a big way.

The Financial Services Authority was replaced in April last year by the Financial Conduct Authority and the Prudential Regulation Authority, so a lot of these matters are still regulated, but are the Government satisfied that the systems in place are sufficiently hands-on to cope not only with existing problems but those that might arise when the schemes to which I have referred get going?

I meet people who bought their flats years ago in what were then council blocks—some, indeed, who did so in the days of Mrs Thatcher. Obviously, the value of those flats has increased hugely over that time. However, when the right to buy council flats was introduced, purchasers had the right to sell their flats back to the council if they needed money. The councils were happy to buy those flats as it cost them less to do that than to build new ones. However, no such provision is available now. The flats have all been farmed off to housing associations and housing organisations that operate schemes for the local councils, which has made life much more complicated. I hear of people who are on a pension of £170 a week but are required to pay their share of roof repairs costing £12,000 or £13,000, which is more than their income, so these issues are difficult to assess. It is tremendously difficult for people to assess whether or not they can afford to meet the costs of their care, their daily living costs and the costs of staying in their own home. Furthermore, elderly people in particular know their way round their own property and are safer in their own property than when they move to another one. People do not fall down and break a hip in a place they have lived in for years; that happens in the new place they move to. Therefore, if people do not require full-time residential care, there is great merit in staying in their own home.

I suggest that we need a free, independent advice service. However, that is no good unless skilled staff run it. It is useless if people think that they are getting good advice only to find that the person to whom they are talking knows less about the issue than they do themselves. This issue is a huge project for the future. The Government cannot think that it is resolved, all sorts of problems will come up that we do not even envisage now. The financial services can, and should, do a lot more in this area and should adopt a positive approach. It is a difficult situation as anyone running a financial services organisation is torn between satisfying the Government that they are risk-free and have plenty of spare capital, and satisfying the people who would like to avail themselves of funds from a reliable source, who then find the whole issue is much more complicated than they thought.

I am told that there is far greater confidence in the equity release market at present. Recent figures indicate growth of 12% since last year, with £473 million of housing wealth unlocked in the first six months of last year. There is currently £251 billion tied up in home equity that could be released under equity release products. That is interesting and the release of that money makes sense, but only if it can be handled in a sound way that protects the consumer and helps people. I think that the Government support the Dilnot report, and I certainly strongly support it. We want to see it come into force and benefit people.

19:47

[Baroness Brinton (LD)]

My Lords, I congratulate the noble Lord, Lord Lipsey, on securing this important debate that joins together progress in health and social care for the elderly and how our financial services can help deliver this from 2016—two years’ time—in the wake of the Dilnot commission reforms.

The rising cost of care, however, has become an increasingly worrying issue. Two years ago, the commission estimated that the cost of the reforms was approximately £1.7 billion. Inevitably with an ageing society and limited resources, the state does not have sufficient funds to meet the increasing demand of social care for the ageing and disabled population. As Bruno Geiringer noted,

“with demand for older people’s social care expenditure currently touching £8 billion and actual spending sitting at around £7.25 billion, the gap between supply and demand is alarming”.

In 2011, the amount spent on care and support was 1.2% of GDP. However, in the same year, the figure was estimated to rise to 1.7% of GDP after the implementation of Dilnot.

As we have heard from other speakers, currently, individuals are meeting costs by drawing down equity from their housing assets, purchasing insurance, or taking from their pension funds. Where they do not have access to these sources, many have to sell their property, while still alive, to fund their nursing care, but, frankly, this is such a hard decision at a very difficult time in people’s lives as they face reducing their independence and losing their home. It is evident that there is, or will be, a market for the financial services to support the older generation. With a cap on the individual’s lifetime contribution, this can be much more clearly defined than under the present system.

The challenge is that the financial services industry must take greater initiative in funding these reforms. Several key financial products, some of which have been mentioned, are possible sources of funding. The disability linked annuity works by reducing the income of an otherwise flat annuity, but then doubles or trebles the income once care is required. In marketing this product, customers need to be aware of the tax treatment of annuities because they are treated as pay as you earn under current pension taxation rules. The second source of funding is products linked to housing assets. Many people fund their social care by utilising a portion of their housing equity to meet costs by either downsizing or taking out loans that are secured on their house, payable on death. The third source is linked to insurance. There is an opportunity for critical illness or life insurance policies to cover care costs. Similarly, top-up insurance can also assist individuals in the amount they spend on general living.

However, no providers currently offer pre-funded insurance, mainly because there is a lack of demand for it. This is why pre-funded insurance products have failed in the past, and consequently are no longer available on the market. However, such products could fit the new profile needed to fund social care in the future. I ask the Minister, if these insurance products are indeed beneficial in covering care costs, how can the Government help the industry stimulate demand for the products? A potential alternative to the previous options is a deferred payment scheme. Under this, people could pay insurance fees after they have died. This works by taking a portion of an individual’s life insurance and applying it towards paying for care fees.

Despite the potential of these products, there are many concerns that have been raised by both the Dilnot commission and the Government. As I have outlined, some products exist but face low take-up due to demand-side barriers, including reputational issues, a lack of public awareness, and the cost and complexity of the products. I am sorry to say that reputational issues have led to a loss of trust by many people in financial services. Research conducted by the Chartered Insurance Institute in late 2010,

“found that one in five respondents will never trust financial services again and 72% of people have not very much trust or no trust at all in financial advisers and life insurance providers”.

The most serious problem is the lack of awareness of social care costs. In several consumer surveys it was noted that most individuals do not know how much they will be paying for care in old age. The Local Government Association says that it found in a survey that,

“63% of individuals wrongly estimated the average cost of a care home as less than £25,000 per year”.

It is imperative, then, that we address issues related to engagement barriers in an effort to encourage people to seek private sector solutions. We must increase marketing for the products and raise awareness on the amount that people are likely to have to pay in future for their social care. This must start early. Worrying about it when you are 55 is, frankly, too late.

The Government have already established an expert working group that will involve the Government, the financial services sector, local authorities and the care sector. It is exploring ways in which individuals can best be directed to truly independent financial advisers, and will build links with pension benefits and other services. However, it is shocking that out of 53,000 self-funders in residential care only 7,000 received financial application advice in 2009. This may be a possible explanation as to why one in four self-funders ran out of money and sought help from the state. Clearly, there is a necessity for the support of financial industry in the form of products and advice. The Department of Health expects the financial services industry to respond by 2016. However, that is only two years away and most financial products take between five and 10 years to design before they come to market, let alone general take-up. I therefore ask the Minister, if this is the case, then where are these financial products and where is the early launch of information and advice to reassure the public on the adequacy of these financial options?

To conclude, there are too many individuals unaware of the social costs related to healthcare and the ability of financial services to help them finance costs. Although there is broad consensus that action needs to be taken, there is also a real fear that the commission’s recommendations could be left to rot because of the lack of products. This issue must be dealt with now because the financial services industry has the potential to minimise the full-scale effect of these costs on the lives of the ageing and disabled population. Equally importantly, it will remove the lottery of how much people have to pay for their social care, which has been a scandal for years.

19:55

[Baroness Greengross (CB)]

My Lords, I add my congratulations to the noble Lord, Lord Lipsey, on securing this debate and pointing out so much that still needs to be done to fulfil the potential of the Dilnot recommendations. While we all regret the fact that it does not seem that long-term care products will be available for some time—perhaps that was predictable and perhaps we all knew that—we have been encouraged by the Government’s decision in its Care Bill largely to accept the Dilnot commission recommendations for a cap to be created for an individual’s lifetime contributions towards their social care costs. That represents an important starting point from which new care funding solutions can begin to emerge.

An important outcome from those reforms for the industry would be the long-term stability and sustainability of the social care funding framework. A stable state framework should give consumers the confidence to invest in solutions to pay for their share of care costs. It will also have a positive impact on providers’ willingness to enter the market. However, much of the detail around the operation of the cap, in particular the modus operandi of the benefit eligibility criteria, as the noble Lord, Lord Lipsey pointed out, will be clear only when the promised guidance finally emerges from the Department of Health. It would be helpful if we had a better idea about the timetable for the appearance of that guidance.

The legislation itself will not deliver a new care funding option unless it first creates the right environment in which new markets for care funding products can develop. Accordingly, I warmly welcome the new statement of intent between the Association of British Insurers and the Government. That is an important step in the process of helping people to plan and prepare for the costs of long-term care. From my perspective, an important element of that statement is the declaration that there will be a joint initiative to raise public awareness of the reforms in advance of 2015. In the absence of such an effective information and education campaign, possibly run in conjunction with a campaign on pensions awareness, low consumer understanding about the realities of care funding—as the noble Baroness, Lady Brinton, pointed out—will continue to reduce the demand for new care funding options, which the financial services industry could potentially develop products to meet.

Currently, for those who can afford them, immediate needs annuities are the only products dedicated to care fees funding. These guarantee an income for life to fund care costs in return for a one-off premium. In the continued absence of any form of pre-funded long-term care insurance products, it is to be hoped that products such as disability-linked annuities and vehicles that combined care insurance with other protection insurance options—the so-called care conversion and hybrid protection products—will emerge. We should do all we can to encourage such innovations.

Unless local authorities, as part of their mandate to establish a competent local information service, have effective processes in place to refer future consumers—who are already emerging and may require appropriate regulated financial advice—perhaps to members of SOLLA, who are reliable and can give them the correct information, not only will the information programme be wasted but many consumers will not get the outcome their sensible considerations and planning merit. Some reassurance from the Minister on both the information programme and service would be helpful. I hope that he can give that assurance to us.

For people with property assets, one of the routes to funding care fees that emerges may be based on the current equity release products, as we have heard. For example, only yesterday the think tank Demos launched a research report which explored the possibility of helping customers to ring-fence a proportion of their housing equity to help them to meet their long-term care costs in later life. It is also important to remember that, while the proposed extension of local authority deferred payment schemes is positive, these are complex financial arrangements with long-term consequences. In many ways they are very similar to fully FCA-regulated equity release products but without the accompanying consumer protection and redress features.

Therefore, first, an information and advice campaign must be aligned with that on pensions; secondly, the guidelines should be consulted upon, and eligibility criteria and the level of need should be thought about again—it is really important that we build in some protection for people—and, thirdly, eligibility criteria should, I think, be national rather than local so that minimum standards are guaranteed and could be exceeded locally but not lowered.

The older population has within it people of all different shapes and sizes with different aspirations and needs, and a one-size-fits-all solution is inappropriate. I end by echoing the aspirations of the statement of intent, in that all of us must continue to work together to help people to better plan, better prepare and better save for care costs. We must spare no effort in seeking to identify the best care funding solutions for all our different people of all ages and backgrounds.

20:01

[Lord Hunt of Kings Heath (Lab)]

My Lords, I, too, thank my noble friend Lord Lipsey and the other noble Lords who have spoken in this highly informed debate. It takes us back to our debates on the Care Bill, which is still subject to deliberation in the other place.

My noble friend referred to the statement of intent and to the difficulties that the industry has encountered in producing policies, for the reasons that he set out. We have studied the statement of intent with care. I noted that the introduction refers to the following fact:

“In March 2013 the Department asked the major firms and trade associations in this field to undertake a review of how the market could develop. This reported back in July 2013 and is being published today”.

No one admires more than me the Department of Health but it does seem to have taken rather a long time for this to have been reported. I should have thought that it would have been more helpful to noble Lords if it had been reported when we were considering some aspects of the Care Bill.

The essential point of the review was that,

“there is currently a lack of demand for products and that new products might initially reach only a small market”.

Shock, horror in the Financial Times—but I do not think that my noble friend was surprised. As he said, he does not really hold out much hope that there will be a market in the future in the way that noble Lords have been talking about tonight: first, as he said, because of the difficulty of pricing products due to the uncertainties in the years ahead, and, secondly, because of the reluctance of most of us to buy those products even if the industry were certain of being able to put them on the market. I should be interested to know whether the noble Earl agrees with my noble friend’s analysis or whether he is more optimistic. If he is more optimistic, then why?

However, my noble friend pointed to what he described as two saleable products: first, point of use and, secondly, enhanced annuities. He felt that those were essential to underpin the Dilnot proposals. I do not want to go over old ground but I agree with my noble friend and other noble Lords that the real problem for us is that, while we obviously welcome the foundations laid in the Care Bill, the fact is that it does not really produce what we originally thought it would—a clear cap that people can understand. We have the £72,000 cap but, in reality, we know that it is much higher. There is the £12,000 per annum living cost and there is also the fact that the £72,000 cap is related to what the local authority will pay. We know that private funders pay more than that, and there are many suggestions that private funders are subsidising people funded by the local authority. Whether that will survive the transparency that will come in a few years’ time, I very much doubt. We argued and debated this when we discussed the Care Bill.

I know the nursing home that my noble friend referred to because my mother has instructed me that, if she has to go into a nursing home, that will be the one to which she goes. She sized it up and everyone in Oxford knows that it is a very good nursing home. However, £50,000 a year—£1,000 a week—is much higher than the local authority will be paying for the people for whom it will be responsible. Therefore, in essence, the cap will be much higher than £72,000. I agree with my noble friend that the Government need to come clean on this. We will not get the certainty that is required or achieve the required literacy among ourselves and other people unless it is clear what the likely liability is going to be for many of us and our relatives.

My noble friend raised two further points. The first concerned regulation. He is not convinced that the standards required of independent financial advisers are sufficient. This is worrying. Noble Lords will have received very interesting briefings for this debate from the Equity Release Council and the Just Retirement organisation. The Just Retirement briefing refers to polling that it commissioned, conducted by YouGov. It found that when individuals were asked where they would go for information or advice on how best to pay if they needed to organise professional care, one in five chose their local council, a similar number chose a CAB and almost a fifth said that they would go to the National Health Service—I am not sure whether that is advised, but there we go.

However, interestingly, the poll also revealed that when people were informed that they would face a large care bill before reaching the cap, almost two-thirds recognised the need for professional financial advice. That is encouraging as long as we can be sure that the independent professional advice is of a high order. I share my noble friend’s concerns that this is very variable, and I am not sure that the regulatory context in which those providing the advice operate will deliver the goods.

The second point that my noble friend raised comes back to being clear about what people are liable for. There are continuing concerns about the role of local authorities in this and their capacity to deliver. I am still concerned about their ability to undertake assessments when the new clock starts, and I have not been convinced that local authorities really do have the capacity to do the job effectively. However, that then raises the question of the nature of the very welcome campaign that the Government, as a result of our debates, have agreed to.

A national public awareness campaign is very important, but it has to be done with effectiveness and vigour. I wonder whether the noble Earl will be able to say a little more about how the campaign is going to be organised, what the budget will be, when it will be launched, how long it will run for and what partner organisations his department will work with. I refer him again to a poll by Just Retirement, which found that nearly one-third of those aged 55 and over believe that councils pay most of the cost, with individuals topping up the rest, while 40% believe that individuals pay most, with councils topping up the remainder. Many, many people do not understand the liabilities that they will face. We need to do everything that we can to ensure that people understand and can get proper advice, and we need to ensure that where the insurance market has a role to play, that role will be as effective as possible. This debate, although very short, is very important if we are to go forward with confidence in terms of Dilnot and the many liabilities that people are going to have to face in the future.

20:10

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, I begin by thanking the noble Lord, Lord Lipsey, for raising this very important issue. I thank equally all speakers for their contributions to the debate. The noble Lord, Lord Lipsey, and I have conversed many times of late on the Floor of the House about the provisions of the Care Bill, so I am in no doubt that he is very well acquainted—perhaps more than most of your Lordships—with the recommendations of the Dilnot commission on the funding of care and support. However, for the benefit of others who may not have been following as closely, I will take a moment or two to refresh our memories.

The commission found that the current system is simply unsustainable and not fit for purpose. We need to ensure that we have a system that is sustainable and that people do not face catastrophic care costs. This is what the reforms we are introducing will do. The commission defined a new model for funding care and support—a new partnership between the individual and the state. It suggested that where individuals can afford to contribute they should do so but that it was simply not fair to expect people to spend their lifetime savings meeting the cost of their care. To address this current imbalance we are putting in place a cap on care costs, as recommended by the commission, to provide people with an insurance against catastrophic costs and the fear and worry that these can bring. We are also extending the means test and, as a result, we will be giving 35,000 more people means-tested support with their care costs immediately when the system comes in.

These are all ways that the state will be providing additional protection. However, we must remember that what the commission described was a partnership, and there are at least two sides to every partnership. It recommended that where they can afford to do so, individuals should also contribute. It is just as important, perhaps even more so, to make sure that we are providing individuals with the support they need to meet their contribution. We as government are providing flexibility through the introduction of the universal deferred payment scheme and additional support through the new Clause 4 duty on local authorities to provide financial information and advice. I shall say more about that in a moment.

We cannot, however, do this alone. The financial services sector needs to provide some support, too. The noble Lord, Lord Lipsey, recommended Ministers to go away and think about a postponement of the deferred payment scheme. I am sure he would agree with me that the deferred payment agreements perform a very important function and are one of the ways in which people can pay for their care more flexibly. Local authorities, as he is aware, already offer deferred payments. That gives me grounds for believing, and indeed having confidence in believing, that they have the ability to implement the universal scheme in April of next year. Given the fundamental function that these deferred payment agreements will fulfil, I am very hesitant, if not reluctant, to consider delaying the universal scheme. However, I will convey the noble Lord’s views to my honourable friend Norman Lamb.

I should like to address the precise question placed before me by the noble Lord, Lord Lipsey. He asked what plans the Government have for the role of the financial services industry in funding care provision in the light of the Dilnot commission reforms. My straight answer to that question would need to be that we have no direct plans because the industry is independent of government and, as such, we have no control over what it does. We cannot compel it to play any role, however much we might like to. I cannot say what plans we have, but I can tell the noble Lord about the joint work that we have been doing with the industry, our shared ambitions and our commitment to continue this joint working—a commitment, incidentally, reinforced by the briefing issued by the ABI ahead of this debate.

In March 2013, the Department of Health invited companies from the financial services industry to conduct a review of financial products to fund care—the opportunities that the Care Bill would provide and the barriers that needed to be overcome for it to flourish. The review reports were published on 21 January this year, alongside a joint statement of intent between industry and government, where we both committed to working together on this agenda. The industry-led review told us that the introduction of the Care Bill reforms would largely give us the right conditions for a market of care products to emerge. I do not think we should overlook the importance of that finding. Further, the reports confirmed that industry saw itself as able to play an important role in helping people to plan for their care and support needs—again, a sentiment reinforced by the ABI in its briefing yesterday.

However, that does not mean that our job is done. We need to be realistic about what we might expect, and when. More work needs to be done and there are some barriers to overcome if we are to see this market take off. Again, I have no need to familiarise the noble Lord, Lord Lipsey, with some of those barriers. Indeed, he has spoken of them in the debate. Public awareness of how care is funded is woefully low. We need to build an understanding, a greater awareness of how the system works and the need for people to plan and prepare for future care needs—something that the Government have already committed to do. My noble friend Lady Brinton asked how demand for financial products could be stimulated. We need to make sure that there is good information and advice to support and enable people to make well informed decisions about the types of care they want to receive and how they can pay for it—something that we will ensure happens through the new information and advice duty on local authorities.

To be successful, an awareness campaign needs to be delivered in partnership—national and local government working alongside the wider care sector. We are already working with partners to develop the right approach. I can tell the noble Baroness, Lady Greengross, that we have already embarked on a joint programme with local government to implement the care and support reforms and that awareness raising will be an important part of this. The department will co-ordinate the messages to ensure that a simple, coherent campaign can be delivered nationally and locally. We are engaging with the voluntary sector, care providers and the financial services industry to make sure that we can all play an effective part in communicating these reforms. The noble Baroness, Lady Greengross, emphasised the need for stability in the sector in the way these reforms are implemented. If we combine our efforts and maintain cross-party support for these reforms—which I hope and believe we can—we can ensure that this happens.

We want to see products developed and in that process we need to consider whether this could be aided by regulatory change, which was also mentioned by the noble Lord, Lord Lipsey. The department has already opened up the lines of communication between industry, the Treasury and the Financial Conduct Authority to explore this issue further.

As to being realistic about what we should expect, I want to be clear that I do not expect a big bang moment where financial services companies across the country release hundreds of new products. I want to see a sustainable market develop, with products which are designed to meet the demands of customers. These developments will be incremental and are likely to take some time. That is emphasised in the ABI report, which states that it will take a much longer period of time before younger people are encouraged to purchase care products. It also identifies products that could be adapted and brought to market in the short term. It suggests that the first step, the quick wins, would be to adapt existing products such as pension annuities, health insurance and, as my noble friend Lady Gardner said, equity release, to name but a few. The recent announcements made in January by a number of leading firms confirm that the industry is beginning to develop its offer for the market. That is a positive development.

The noble Baroness, Lady Greengross, and the noble Lord, Lord Hunt, asked about the timetable for the guidance. We will consult on the draft regulations and guidance for the April 2015 reforms in the spring of this year. We intend to consult on the draft regulations and guidance for the April 2016 reforms—that is, the cap on care costs—in the autumn of this year. We have committed to do this to make sure that they get the scrutiny they require and to give local authorities enough lead-in time properly to prepare for implementation.

My noble friend Lady Brinton asked how people could obtain information and advice about the adequacy of the products they were being offered. There is a separation of roles here. It should be the role of government to raise the levels of awareness of how care funding works and encourage people to plan and prepare—I have already talked about that—but it should not be for government to recommend or give a gold seal to any financial product. Advice is regulated precisely because whether something works or is appropriate is down to individual circumstances. That is why the noble Lord, Lord Lipsey, emphasised the point around the expertise of SOLLA representatives, for example.

The noble Baroness, Lady Greengross, suggested that the eligibility criteria for deferred payments should be national. Eligibility criteria for deferred payments will be in national regulations to ensure that there is protection for those people who face having to sell their homes in their lifetime to pay for care—that is the minimum offer. Local authorities, however, will have discretion to be more generous than the minimum offer, and we will consult on all the draft regulations and guidance that are to come in next year, as I have mentioned, in the spring of this year.

The noble Lord, Lord Hunt, returned us to the issue of the cap on care costs and suggested that, in reality, people would find themselves paying more. I would not seek to argue with the points that he and the noble Lord, Lord Lipsey, made. It is a difficult issue. We want to extend state support for social care to tens of thousands of people who get little or nothing under the current system and the Care Bill establishes a legal framework to enable this. We would like to be able to set a lower cap, which may well be possible in the future, but we also need to live within the broader economic constraints on public spending that we currently face. It is a matter of finding that balance at the current time. We have committed to reviewing this question every five years to ensure that we continue to get that balance right.

I am optimistic that the financial services industry will step up to the plate and play a role in helping people to plan for their care costs. We will encourage it to do so. Our continuing work with the industry is a key pillar in our efforts to support individuals in the new partnership recommended by the Dilnot commission. There is still a long way to travel but the first stirrings of growth are beginning to show.

House adjourned at 8.23 pm.