Westminster Hall

Tuesday 11th March 2014 Westminster Hall

Tuesday 11 March 2014

[Mr James Gray in the Chair]

Cancer Treatment and Prevention

Tuesday 11th March 2014 Westminster Hall

09:30

Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Lancaster.)

[Pauline Latham (Mid Derbyshire) (Con)]

It is a delight to serve under your chairmanship today, Mr Gray.

During the past few months, cancer has been something of a hot topic in this House, and the Government have committed themselves to reducing the number of people who die from cancer every year. That is an admirable goal and the provision of services to cancer patients has undoubtedly improved. However, the complicated licensing procedure for cancer drugs and the lack of knowledgeable doctors are preventing patients from receiving the life-saving treatment they need.

During my tenure as an MP, I have had the privilege of working with a cancer charity called Melanoma UK. Melanoma is a cancer that is particularly close to my heart, as my brother died from a malignant melanoma when he was only 54. What is most insidious about this cancer is that it is impossible to treat in its late stages, and it often results in a drawn-out and painful death for the sufferer.

Last week, I sat in on a meeting of the Melanoma Taskforce, which is attended by experts in skin cancer, patients and their families. The consistent theme of the complaints from these experts was that initial diagnosis and referrals of potential melanoma sufferers were taking too long, which often results in sufferers receiving treatment that comes too late to save their lives. In the case of my brother, he went to the doctor three times, but the doctor said, “There is absolutely nothing wrong with you.” Eventually, he told my brother, “All right, I will refer you to Addenbrooke’s and you can go and see somebody, but I’m sure it’s fine”, by which time more than a year had passed and it was far too late.

As I say, the consistent theme of the experts’ complaints was that initial diagnosis and referrals of potential melanoma sufferers take too long, which often results in sufferers receiving treatment that comes too late to save their lives. At that meeting, I learned that medical students receive only a week or less of teaching on dermatology, and that is on the whole of dermatology, not just melanomas. Even less time was spent on teaching them how to spot the signs and symptoms of melanoma. All that is shocking, given that malignant melanoma is the fifth most common cancer in the UK.

Another piece of feedback that I received from the dermatologists who were present at that meeting is that there are simply not enough consultants in this field and the few dermatologists that there are end up being completely inundated with patients. Sadly, the figures fully support that opinion: there are only 650 dermatology consultants practising nationwide. How can so few consultants effectively deal with the influx of potential melanoma referrals? Given this state of affairs, it is imperative that the Department of Health and the UK’s teaching hospitals encourage medical students to pursue a career in dermatology.

The other bar to the survival of late-stage melanoma patients is the difficulty in accessing effective cancer drugs. As some Members may know, about two weeks ago the National Institute for Health and Care Excellence published its response to the consultation on the use of the drug ipilimumab as the first-line treatment for late-stage melanoma. Currently, the drug that is prescribed in the first instance is dacarbazine, which is generally acknowledged to be ineffective in fighting the progression of the disease. On the other hand, ipilimumab has been proven to extend people’s lives and give them a better quality of life during treatment.

One case study to recommend ipilimumab as a first-line treatment is the story of Richard Jackson, who was told that he had only weeks to live when he was diagnosed with late-stage melanoma and was prescribed the drug straight away. As a consequence of the early prescription of ipilimumab, Richard is still alive seven years after being diagnosed with melanoma. When one considers that, when he was given the diagnosis, he was planning his funeral, because he was told that he had only weeks or months to live, that is remarkable.

Dacarbazine, which is a type of chemotherapy, often leaves patients sicker than before they began using it, and they are generally progressed on to ipilimumab anyway. NICE’s decision was based on a number of factors, including cost. If the majority of patients do not benefit from dacarbazine as a first-line treatment, NICE’s decision not to use ipilimumab initially both fails to provide value in the long term for the British taxpayer and shortens people’s lives.

With that in mind, I call upon the Department of Health to make melanoma a real priority. I know that everybody wants everything to be a “real priority”, so I understand the Department’s difficulties in that respect, but melanoma can be cured if it is detected early. The Department needs to start by motivating young doctors to study dermatology, and by working with universities so that the time devoted to teaching this important subject can be extended. Most urgent, however, is the need for the Department to put pressure on NICE to offer ipilimumab as a first-line treatment to extend the life expectancy of melanoma sufferers and—perhaps vitally—improve their quality of life, so that they can continue to contribute to society for longer as well as having a better quality of life.

Ongoing changes to the UK cancer infrastructure, such as downsizing and dismantling the cancer networks in April 2013 and the National Cancer Action Team being merged into NHS Improving Quality, risk creating a gap in the cancer expertise that is used to advise and shape the NHS and the Department of Health. NHS England is looking to broaden its work in other disease areas beyond cancer. The cancer policy team at the Department has been all but abolished, with just a handful of its staff remaining. This inevitably dilutes the cancer expertise in the Department.

The overall reduction in expertise and resource in oncology will limit the ability to identify and spread best practice and drive innovation in treatment and care. Although the diversion of resources and expertise away from cancer is worrying, it is positive to see a strong policy focus on preventing people from dying prematurely, through domain 1 of the NHS outcomes framework.

Each clinical commissioning group should have at least one member with an interest in cancer. Previously, GPs benefited from better liaison with specialists via the cancer networks, and they could use the lessons learned from that approach and build on them further to create informal communities of primary and secondary care colleagues interested in cancer, to influence what is happening in CCGs.

Multidisciplinary teams for cancer should work to feed into strategic clinical networks, in the way that they previously worked with the cancer networks, to promote collaboration, consistency and quality of care. National clinical advisory groups for the common cancers should be re-established to bolster the work of strategic clinical networks in sharing best practice, supporting intelligent commissioning and driving up standards of care.

The extension of the Cancer Drugs Fund is welcome, but there is now a need for long-term clarity that, after 2016, the new pricing and reimbursement scheme will offer patients an appropriate level of access to cancer drugs that have been proven to be effective. Furthermore, we must collect better data on what medicines cancer patients across the UK need. It is also essential that NICE offers flexibility in its appraisal of cancer medicines. It should consider looking at cancer treatments under its own separate criteria, in particular measures beyond overall survival.

The Government have done a lot of good work on cancer, but there is still more to do. I am particularly interested in melanomas and bowel cancer; they are the two cancers that I tend to specialise in. There is more work to do on those cancers, and success is about early diagnosis. If we can get early diagnosis and appropriate treatment, the Government will succeed in achieving the aim of giving people longer life and better quality of life.

09:39

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I congratulate my hon. Friend the Member for Mid Derbyshire (Pauline Latham) on securing this debate.

I apologise in advance because there will be some repetition as I had an Adjournment debate last week on pancreatic cancer and a new drug, which is fundamentally what I will speak about this morning. I think hon. Members will understand that there is a need for repetition, because we are right in the middle of the Cancer Drugs Fund’s making a decision about this drug, so anything extra we can add is useful. I am sure the Minister has heard this before, because she attended that Adjournment debate on Tuesday 4 March.

The Cancer Drugs Fund met on Thursday 6 March and I understand that the process is that it will take a week to consider, then it will inform the applicants and then, in two weeks’ time, its decision about Abraxane will be made public and we will know. Abraxane has been licensed for use in patients in the UK and Ireland with metastatic pancreatic cancer; it has been described as the biggest advance in pancreatic cancer treatment in almost two decades, for a disease where survival rates have barely changed in 40 years.

As Abraxane has not been approved by NICE, it is not yet available on the NHS as a standard treatment. Pancreatic Cancer UK, the biggest charity in this field, together with Pancreatic Cancer Action are both keen to ensure that patients are able to access Abraxane through the Cancer Drugs Fund. We should like to see the drug approved by the CDF then eventually by NICE, so that access to it is more readily available. We know that Abraxane is due to be reviewed by NICE soon, but this process takes a great deal of time, and time is something that most pancreatic cancer patients do not always have.

My comments relate to the treatment of cancer. As I have said, I hope that hon. Members will put up with some repetition, given the importance of these few weeks to the sufferers, survivors and friends and relatives connected to this cancer, because it is a highly charged moment.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate the hon. Member for Mid Derbyshire (Pauline Latham) on securing this debate. Does the hon. Gentleman agree with her that the key is early intervention and effective treatment? That is the key to getting it right with regard to melanoma, bowel cancer, pancreatic cancer and ovarian cancer, for example. The hon. Gentleman is making powerful points in this respect.

[Eric Ollerenshaw]

As per usual, I agree with the hon. Member for Scunthorpe (Nic Dakin). I pay tribute to his work on the all-party group on pancreatic cancer. He and my hon. Friend the Member for Mid Derbyshire hit the nail on the head. At the moment I am just talking about treatment, but early diagnosis is the key to all of this, particularly pancreatic cancer. More than 50% of people who are diagnosed with pancreatic cancer are diagnosed after emergency admission to hospital: it is that late and, too often, too late to be able to do much in terms of survival beyond a year. Only 4% of people diagnosed with pancreatic cancer survive for up to five years, so it is clear how dramatic an improvement in early diagnosis would be.

It is estimated, on average, that Abraxane will allow a further two months’ survival, which, in the great scheme of things, does not seem massive, but it could double the lifetime chances of the average pancreatic cancer sufferer. Pancreatic Cancer UK launched its campaign, “Two More Months”, to highlight that. I quoted examples in my other Adjournment debate, which hon. Members may read, of survivors describing what two more months could have done for them, in their situation. Survivors talk about the possibility of getting married, which was not available because the person died early. There are other heart-rending examples of what that time would have enabled them to do. To underline the point, in terms of pancreatic cancer, as I have said, two more months is a massive improvement on what is available, unfortunately, to far too many.

In my Adjournment debate, I expressed our fears—the all-party group’s, Pancreatic Cancer UK’s and Pancreatic Cancer Action’s—that the call for the drug to be made available would be dismissed by the Cancer Drugs Fund because it gives only two more months. It is interesting that there are no pancreatic specialists in the Cancer Drugs Fund. Our key concern last week was that the two months would not be considered sufficient, because in comparison with other cancers it does not seem a great deal of time. Yet more than 60 specialists treating patients with pancreatic cancer shared their names, via Dr Seb Cummins, supporting this submission and therefore hoping that they would be listened to.

Although I did not attend the meeting, apparently the panel did not acknowledge the unmet need in this disease area and did not allocate points to represent this, given its criteria. Individual panel members did not appear to accept, as we feared, the benefits of an additional two months, although I am told that there was some acceptance that, yes, the drug did prolong life. Obviously, the panel has to take into account—I am not a specialist in medicine, Mr Gray, as you well know—the quality of life in those two months.

I understand that the decision will have been made, but it will not be public until two weeks’ time. So where do we go from here? I have already expressed concern about the Cancer Drugs Fund, because, to my knowledge, last year not one new cancer drug was agreed, plus none, if I understand the system correctly—I admit that my understanding of it is a bit basic—has been passed down to standard NHS clinical use. Nothing has left its funding stream. I am told that it has overspent a certain amount of money, but again I do not know whether it is anecdotal or exactly correct; I hope that the Minister comments on that.

The Cancer Drugs Fund process has had enormous success, which I acknowledge. Thousands of people have benefited from this innovation. There is anecdotal evidence that, because this does not exist in Wales, people there are moving across into England to take advantage of it, and why would they not, if they or somebody in their family is in this situation? The hon. Member for Strangford (Jim Shannon), who is present, has commented previously on the situation in Northern Ireland. However, although I acknowledge its massive success, it seems to me, from the outside, that somehow we are stuck in respect of where we go with the Cancer Drugs Fund and its funding in future.

It almost appears as though the Cancer Drugs Fund has become a victim of its own success. We must not let that success become failure now, simply because we are going to get a blockage of applications for new drugs; I thought that dealing with those was the whole purpose of the Cancer Drugs Fund in the long run.

In terms of pancreatic cancer, too many hopes have been raised too many times and for too long it has remained the poor relation in all this. So when hope, such as this new drug, comes along, we want that hope tested, not against other cancers but against a past history of neglect. Pancreatic cancer already has the lowest survival rate of the 21 most common cancers. As I mentioned, five-year survival rates are less than 4%. This figure has barely changed in nearly 40 years. Pancreatic cancer five-year survival rates lag behind many other European Union countries and are almost half of what they are in the United States, Canada and Australia.

Hon. Members might now understand why we want the hope given by this new drug extended to the 7,900 of the soon-to-be diagnosed 8,500 patients this year, because these 7,900 will be diagnosed with cancer too late and will die within the year. They deserve that extra time that so many others were denied in the past because there was nothing like Abraxane available. They deserve some extra consideration, given our past neglect of this, the fifth biggest cancer killer in our country.

09:48

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw). His Adjournment debate last week is still fresh in the minds of all hon. Members here. I also thank the hon. Member for Mid Derbyshire (Pauline Latham) for bringing this matter to the Chamber for consideration. Many learned hon. Members will speak today and make a massive contribution to this debate. I look forward to their contributions.

By 2020, one in two people who hon. Members meet in the street will be affected by cancer. That is the magnitude of the issue. The hon. Gentleman passionately advanced the appeal on behalf of those with pancreatic cancer. I will not repeat what he said, but I will speak about pancreatic cancer because I know a number of people who have been affected. The hon. Lady referred to her brother, and my father had cancer on three occasions. The skill of the surgeon’s knife, the care of the GP and nurses, and the prayer of God’s people all contributed to his reaching 84 years of age, which is marvellous given that he had his first experience of cancer at the age of just over 60.

The shocking statistic of one in every two people hits home to each of us and gives us the impetus to contribute today and to plead for the cancer drugs and the help that we need. If we cannot see those changes today, when will we see them? Last Friday night I held a public meeting in my constituency on cancer services at the Ulster hospital in Dundonald, which is the closest hospital to me. We are seeking a modern cancer care centre. As an elected representative, I know so many people in my area who have passed away due to cancer, but I know so many more people who are being diagnosed with cancer. I am sure that the situation in Strangford is no different from the situation in any other constituency. Every day in Northern Ireland 25 new people are diagnosed with cancer, which equates to 1.3 people a day in my constituency of Strangford and 1.3 people in the neighbouring constituency of the hon. Member for North Down (Lady Hermon). The figures also reveal that in Northern Ireland the overall rate of cancer diagnosis climbed by a 10th between 1993 and 2011, which is a clear statistical indication of the problem. In 1993, some 370 people per 100,000 were diagnosed with the disease, which increased to almost 405 per 100,000 in 2011. Overall UK figures show that 331,487 people were diagnosed with cancer in 2011, rising from 329,547 in 2010.

The most common form of cancer in Northern Ireland is breast cancer, with some 1,300 cases in women and 340 deaths a year. There are 1,200 cases of bowel cancer and 410 deaths each year. The figures for lung cancer are horrific: 1,100 cases and 910 deaths each year. Lung cancer is almost a death sentence. There are 1,000 cases of prostate cancer and 230 deaths each year. Men are probably worse affected by cancer because we do not acknowledge that we are ill, so prostate cancer needs to be advertised to make men more conscious of it. There are 340 cases of non-Hodgkin’s lymphoma and 130 deaths each year. Those are the statistics only for Northern Ireland, which has a population of just under 1.84 million. That is not even a quarter of the population of London, which gives an idea of the magnitude of the cancer problem. I look forward to the contribution of the hon. Member for Basildon and Billericay (Mr Baron) as we have previously discussed the problem, which we both understand.

I recently attended an ovarian cancer awareness event at Stormont. The hon. Member for Scunthorpe referred to ovarian cancer in his intervention, and I am personally aware of the terrible statistics in Northern Ireland. Una Crudden, a wonderful, courageous lady from west Belfast, talked about her experiences at the debate in Stormont last Monday. She was one of five people diagnosed in her area. The other four are dead, and she is the last one to survive. We were all touched and shocked by the figures and by her presentation, which knocked it home to all of us that there is a desperate need to lift the profile of ovarian cancer.

As we all know, early detection saves lives. The fact is that, if there is an early diagnosis, up to 90% of women with ovarian cancer could survive for five years or more. The survival rate for ladies diagnosed with ovarian cancer in my Strangford constituency, and in the local Ards borough council area, is no more than 36%. Again, those figures are horrific and horrendous. Many women would never dream that if they had a swollen stomach or pain, or if they always felt full, it could be ovarian cancer. Each year, more than 7,000 women are diagnosed. If detected early, the survival rate can be as high as 70%, but sadly many people simply put the symptoms down to irritable bowel syndrome. Early detection makes a difference, and I stated at Stormont that we need an awareness scheme not unlike the scheme that I supported in a Westminster Hall debate in 2011. I cannot recall who the Minister was, but that debate led to an initiative in England to raise awareness of ovarian cancer. That scheme has undoubtedly saved lives, for which the then Minister and the Government should take credit. A lady with ovarian cancer was over at Stormont last week, and she was very grateful for what the Government have done.

As the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) said, it is important to re-emphasise the treatment and drugs that are available for pancreatic cancer. I was contacted by Pancreatic Cancer UK about its “Two More Months” campaign. Would we not all love to have another two months of life to interact with our family and put our affairs in order? Pancreatic cancer has the lowest survival rate of the 21 most common cancers. Five-year survival rates are less than 4%, and the figure has barely changed in nearly 40 years. Pancreatic cancer five-year survival rates lag behind those in many other EU countries and are almost half of the five-year survival rates in the US, Canada and Australia.

As the hon. Gentleman said, most pancreatic cancer drugs are expensive, but they are vital to those with pancreatic cancer. Will the Minister talk about ongoing drug trials and the drugs that are available? What steps have been taken to reduce the price of those drugs? The drugs range in price from £21,000 to £100,000 per year per person. I am the first to say that we should make those drugs available, and I am sure everyone here is of the same mind. At the same time, there have to be discussions with the pharmaceutical industry to see what it can do to reduce those prices, too.

Only 1% of the total research spend of National Cancer Research Institute partners is directed at pancreatic cancer, which underlines the dire need in that sector. Some £3,613 per death per year is spent on breast cancer—I am not saying that that money should not be spent on breast cancer—compared with £553 per death per year on pancreatic cancer. Some 50% of pancreatic cancer patients are diagnosed as a result of emergency admission, which is nearly twice the rate for all other cancers combined. Patients diagnosed as a result of emergency admission, compared with other routes to diagnosis such as routine GP referral, have significantly lower rates of survival.

Earlier this year, as the hon. Member for Lancaster and Fleetwood said, Abraxane, in combination with standard chemotherapy and Gemcitabine—my pronunciation is probably wrong, but I have a Northern Ireland accent, so I hope Members will excuse me—was licensed for use in patients in the UK and Ireland with metastatic pancreatic cancer. Abraxane has been described as the biggest advance in pancreatic cancer treatment in almost two decades, which is good news, given that survival rates have barely changed in 40 years. As Abraxane has not yet been approved by NICE, however, it is not yet available on the NHS. I repeat the hon. Gentleman’s question: when will Abraxane be available? If the tests show that the drug is effective, it should be made available as a standard treatment. Pancreatic Cancer UK is keen to ensure that patients are able to access Abraxane through the Cancer Drugs Fund, and I understand that a decision is due within the next couple of weeks. Will the Minister outline her thoughts on the drug?

I could mention many other cancer drugs, but in my last brief moments I ask the Minister to consider a UK-wide strategy. I suggested such a strategy in the Adjournment debate last week, and it is important that we do not consider such drugs regionally. We have expertise in the different regions of the United Kingdom of Great Britain and Northern Ireland, which includes Scotland, Wales, Northern Ireland and England, but it is time that we had a strategy that brings everything together across the whole UK on an equal basis so that we can make the drugs and treatment available. The strategy should include regional assemblies promoting awareness among the general public.

I suggest that we have refresher courses for GPs. One of the issues that has emerged recently—it is not a criticism, because I am not a person who likes to criticise; it is simply an idea for how we can make things better—is that GPs are not always totally aware of issues. The hon. Member for Mid Derbyshire said that her brother went to the GP three times, and we can all give similar examples from our own constituencies. The refresher courses would ensure that the latest criteria and pro forma for testing were entrenched in GP minds, so that they were clearly thinking about what the patient’s problem could be at its worst. Many cancers that are curable, such as melanoma, must be detected early. If they are not detected early, they are no longer curable but deadly. That is the reality. It is scary to think that in six years, half of the people in this room will get a form of cancer during their lifetime. Something must be done and today must be the first day of a new strategy and new moves to beat cancer.

10:00

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

I, too, congratulate my hon. Friend the Member for Mid Derbyshire (Pauline Latham) on securing this important debate.

I will focus my remarks on the importance of early diagnosis, but in many respects we have already won that debate. In recent years, there has been a general awareness of that issue’s importance, so I will also focus on the importance of accountability within the NHS in ensuring that the measures introduced to encourage early diagnosis are followed through by NHS England. I speak as chairman of the all-party group on cancer, which has long recognised the importance of early diagnosis—we call it cancer’s magic key. There are very few magic keys in life that open doors to untold riches, but that key exists for cancer with early diagnosis.

Initially, we may need to be reminded of the scale of the problem. Members have already alluded to some of the statistics. The Government’s figures and many independent studies suggest that if we matched European averages on survival rates, we could save 5,000 lives a year in this country. Only a month ago, the OECD published a further study, which showed that we could save up to 10,000 lives a year if we matched international averages. That is the scale of the issue.

My hon. Friend the Member for Strangford (Jim Shannon) rightly suggested that the figures, which I think are from Macmillan Cancer Support, show that within 10 years, one in two people will be diagnosed with cancer during their lifetime. Another shocking statistic that illustrates the scale of the problem is that one in four cancers in this country is first diagnosed as late as at A and E, when it is, in far too many cases, far too late to treat. Rarely can we define the scale of a problem as precisely as that. We are only talking about averages here, but thousands of lives depend on our ability to come together—not just Parliament, but the cancer community as a whole and the NHS—to drive forward initiatives to promote earlier diagnosis and thereby raise survival rates.

One or two colleagues will remember that the all-party group first looked at the issue back in 2009, when we produced a report looking into cancer inequalities. We found that the NHS stood as much chance as any other health care system of getting patients who made it to the one-year point to the five-year point. Where the system failed, however, was in getting them to the one-year point. That suggested that the NHS was as good at treating cancer patients as anyone else, but was poor at detecting and diagnosing cancer in the first instance, and that accounted for why we were behind on cancer survival rates and averages.

All the evidence clearly showed that the NHS treated patients as well as any other system after the one-year point, but we fell down in getting them to it, and we never made up that gap. There are always dangers and pitfalls with comparisons—in France, for example, we are comparing with four or five cancer centres of excellence—but by and large the figures are robust in suggesting that we have a major problem with our survival rates.

What is the remedy? It could have been to bombard the NHS with even more targets on this, that and the other, such as better training for GPs or other initiatives, but we thought that there were enough targets in the system. We came up with the idea of putting one-year and five-year survival rates up in lights, broken down by clinical commissioning group—or primary care trust, as they were then. That is important, because we all know that late diagnosis makes for poor survival. Showing those survival rates at a local level would clearly show which CCGs were failing on early diagnosis. As the report and all the evidence shows, early diagnosis makes for better survival rates, particularly at the one- year level.

We have campaigned long and hard on the issue, and I am pleased to say that the Government have listened. There have been two big reforms of the health care system. One was the reorganisation, which I will not go into, because not all of us were as supportive of that as some might have liked. The second was the focus on outcomes, which will have the longer lasting effect, to the benefit of patients. That focus put the one and five-year survival rates in the NHS outcomes framework, which sets the parameters at a national level.

The one-year survival rates are in at the local level in the CCG outcomes indicator set. That is good news, because if the managements of CCGs at the bottom of that list are worth their salt—their salaries run into six figures—they will introduce a range of initiatives to boost their one-year figures. That can mean everything from better uptake of screening, to better prevention and awareness, to more diagnostics and primary care, to better GP training. It can be a whole host of initiatives—not in isolation, but taken together.

The bottom line is that it is incumbent on the management of a CCG with one-year figures at the bottom of the pile to get their act together and to introduce initiatives to encourage early diagnosis. If those initiatives are right and that early diagnosis is pushed forward, the one-year figures will rise. The mathematicians in the room will appreciate that if the low-hanging fruit on averages—the low figures at the bottom of the table—is picked off and those managements raise their game, that will have a disproportionate effect when it comes to averages for the group as a whole.

If we as a country are seriously going to set ourselves the target of saving an extra 5,000 lives by 2015, which would bring us only up to the average, and of perhaps exceeding that thereafter, we have to focus on how we can drive forward early diagnosis at a local level. One hopes that it all then becomes self-fulfilling, in that once the poorer CCGs start raising their game, others will do likewise, because no one will want to be at the bottom of the pack. That is why we as an all-party group have been delighted with the Government’s putting the one and five-year survival rates in at the national level, and the one-year survival rates in at the local level.

I will not muddy the waters by reminding everyone that because the population sizes of CCGs are smaller than those of PCTs, we have had to introduce some proxy measures, such as staging and emergency presentations, to complement the one-year figure and add to the overall picture. The bottom line is that we are focusing on early diagnosis through those figures, particularly the one-year figure going in at the local level.

I want to ask the Minister one question about something that she knows we have focused on in the past. The all-party group, the wider cancer community and other all-party groups have worked together as a team and should be congratulated, but despite the one-year figures in the CCG outcomes indicator set, the lines of accountability are still unclear. Who will actually ensure that CCGs will be held accountable for the figures? We have the tools, but if we do not use them, there is no point in having them.

Will the Minister provide clarity on what will happen if CCGs are at the bottom of the table year after year? There is no point in having one-year figures that show poor one-year survival rates, and therefore late diagnoses, if nothing happens as a result. Where are the levers of change? Where are the mechanisms to ensure that local managers are brought to account for their poor performance? We need to focus on that. Early diagnosis is important not only because it raises survival rates, but because it, along with the figures, will reduce disparities between CCGs when it comes to cancer. Poorly performing CCGs will have to raise their game, which will also serve to reduce inequalities across the system. It is unfortunately still a fact, at least to a certain extent, that cancer care in this country comes down to a postcode lottery.

Will the Minister please address the central issue of the levers of change—if not in this debate, then subsequently? I appreciate that many such functions are now the responsibility of NHS England and that the Department of Health has taken a step back, but the Government still have a responsibility to the taxpayer to ask questions and to ensure that improvements are followed through. The Minister has been gracious in that she will be formally responding to the all-party group’s report, “Cancer across the Domains”, and a meeting will follow, but we cannot leave such a great opportunity as this debate without raising the issue. I hope she will forgive me for pursuing the matter again, but it helps to keep the focus on the issue in hand.

10:12

[Sir Paul Beresford (Mole Valley) (Con)]

I am delighted to be in a position to receive your advice once again, Mr Gray. I congratulate my hon. Friend the Member for Mid Derbyshire (Pauline Latham). She is pushing a subject that I would normally push myself as chairman of the all-party parliamentary group on skin, but I will not repeat what she said. I am delighted to see the Minister here, along with all the usual suspects, including me, who try to persuade her of various things. I am also chairman of the all-party parliamentary group for dentistry and a very part-time dentist. I will refer to and slightly repeat what I said in my Adjournment debate on oral cancer of 13 January and question the Minister’s response.

As I said during the January debate, some 6,000 new cases of oral cancer are reported annually in the UK, with 1,800 deaths each year. It is an appalling, disfiguring disease that affects sufferers’ quality of life. Early diagnosis, which everyone is pushing, can solve many cases, but it must be early. The total number of cases has been rising steadily over the past three decades, with 35% more new cases a year now than 30 years ago. The problem has become so acute that oropharyngeal cancer is the fastest growing cancer in Scotland—the only place for which I could find figures—but it is also a huge problem in the rest of the UK. The British Dental Association said:

“No other cancers have shown such a significant increase in their incidence. Furthermore, treatment of many cancers is showing impressive improvement in survival, but oral cancer continues to have high death rates.”

There are four factors that would help to restrict or perhaps even to defeat the disease. The first is early diagnosis through education of clinicians and increasing patient awareness, which greatly improves the opportunity for effective and positive treatment. The other three are purely preventative. Carcinogenic substances such as betel nut and, much more commonly, tobacco are major factors in oral and other cancers. Excessive alcohol, particularly combined with tobacco smoking, is a huge causative factor. We are all well-versed in and applaud the actions of various Governments to persuade people to reduce alcohol intake and to secure, hopefully and eventually, a collapse in tobacco usage.

I will concentrate on the human papillomavirus, which I touched on during the debate on 13 January. I want to refer to the two main ones—there is a huge family—that cause particularly unpleasant cancers throughout the body. We know about cervical cancer and the related penile cancer, but there is also oral cancer. The latest figures that I quickly managed to find on cases of HPV-related cancers for the UK are from 2009, when 7,538 females and 6,484 males were affected. It is not quite 50:50, but it is getting there.

In 2010, 2,016 males and 2,253 females died in the UK as a result of HPV-associated cancers, including cervical, penile, vaginal, vulval, laryngeal and oral. For males in the UK, the greatest proportion of new cases and deaths were as a result of oral cancer. In females, oral cancer is a relatively close second to cervical cancer. The number of annual cases of HPV-related cancers in men is rising significantly and it is not just oral cancer. Indeed, if recent trends continue, annual cases of HPV-positive oropharyngeal cancers may surpass annual cases of cervical cancers by 2020.

This country, along with several others, has an inoculation programme for HPV. A full inoculation programme would, in a manner not too dissimilar to that of polio, effectively reduce and then cut out transmission of the HPV virus. It would produce what is known as herd immunity, as has happened in Australia. Here, however, HPV inoculation is available only for girls and not for boys. The Minister correctly pointed out on 13 January that the Joint Committee on Vaccination and Immunisation, after considering the matter at two meetings in February, will be reporting later this month, hence my pre-emptive strike. She also stated that the JCVI agreed in October last year to set up a sub-committee on HPV vaccination to assess, among other things, extending the programme, as a priority, to men who have sex with men—I do not quite see the relevance of that—to adolescent boys or to both. Obviously, I hope that an inoculation programme for boys and girls should be made available and promoted.

In my area of Surrey, where parents take health and health protection seriously, only 60% of the girls who could and should be receiving the HPV vaccine do so. Assuming a 50:50 split of boys and girls at inoculation age, only 30% of the Surrey population that could and should be inoculated are being inoculated. A full spread of inoculation would, as with polio, bring herd immunity over time. It is irrelevant whether these kids grow up to pass on the HPV virus by heterosexual or homosexual sex. What is important is that, whether the JCVI agrees or not, the Government take early action, as Australia has done. I put it to the Minister that it is not fair, ethical or socially responsible to have a public health programme that leaves 50% of the population vulnerable to infection just because the vaccine is not made available to boys.

As I said, my speech is a pre-emptive strike, and I wait to hear what the JCVI and the Minister have to say.

10:19

[Grahame M. Morris (Easington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Mid Derbyshire (Pauline Latham) and apologise for the discourtesy of my being late for the start of the debate.

It is an important subject and I am grateful for a few moments to raise with the Minister an anomaly that affects sufferers of brain cancer and to highlight the dislocation caused by the reorganisation of the commissioning of cancer services. The hon. Member for Basildon and Billericay (Mr Baron) highlighted the tension between organisation and outcomes. That is relevant to the issue I am raising, because of the hiatus that resulted from the reorganisation of the commissioning of cancer services, which came out of the Health and Social Care Act 2012; and it follows the theme of the importance of early diagnosis and treatment set out by the hon. Members for Strangford (Jim Shannon) and for Lancaster and Fleetwood (Eric Ollerenshaw).

University college London’s national hospital for neurology and neurosurgery, in Queen square, is the UK’s largest dedicated neurosurgical hospital. It is not only a UK centre of excellence, but a centre of excellence within Europe. For more than 150 years it has provided treatment and care for conditions including cancer affecting the brain. It is globally recognised. In October 2012, the hospital enhanced its services to cancer patients by the acquisition of one of the new advanced radiotherapy systems that we know as the Gamma Knife radiosurgery machine. I have been to see one of them at St Bartholomew’s hospital, and if the Minister—or any other hon. Member—has not seen one, I recommend making such a visit. It is an incredible piece of kit.

Before April 2013, when the new NHS England took over responsibility for commissioning radiosurgery, the national hospital was using its Gamma Knife to treat NHS patients with brain cancer. On 1 April, however, NHS England informed the hospital that it could no longer treat NHS patients with its Gamma Knife and that all patients waiting for treatment should be transferred to other hospitals. The other hospitals that were identified were run by private health care companies—BUPA and the Hospital Corporation of America. Not surprisingly, the patients concerned—about 60 in total—refused to transfer to other centres, because they would have to engage with new conditions and go through pre-operative checks and scrutiny, and rejoin the waiting list.

That situation makes a mockery of the Health and Social Care Act 2012. When the Government pressed the Act through Parliament, they relied principally on the argument that it would return control of patient care to clinicians and reinforce and enshrine patient choice in the NHS. NHS England has poured scorn on that idea and is exercising control over where patients can be treated. There is no choice for patients and certainly no choice for brain cancer patients who need immediate treatment.

Fortunately for the patients I have mentioned, there is good news. The national hospital is not as callous and cold hearted as NHS England, and it decided to treat them anyway. Some 60 patients have been treated since April. However, that has not dealt with the basic problem. They were treated there because it was their choice, and their clinicians’ choice, and despite NHS England’s refusal to pay for them. I should be interested in the Minister’s response. Will she give me a guarantee in good faith that she will look into that appalling situation as a matter of urgency?

10:23

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

It is a pleasure to serve under your chairmanship again this morning, Mr Gray. I congratulate the hon. Member for Mid Derbyshire (Pauline Latham) on securing the debate, and thank her for sharing her personal connection with its subject.

Every two minutes someone in the UK is diagnosed with cancer, and more than one in three people in the UK will at some time develop some form of cancer. One in four of them, sadly, will die of it. Cancer touches every community, without exception. Its reach is wide and its impact devastating. We have won many important victories in our battle against cancer, but there is a long way to go to ensure we are diagnosing it earlier, treating it more effectively, and preventing it in the first place. Many hon. Members have focused on those things in the debate, and I want to discuss them.

Detecting cancer early can make a real difference. When cancer is diagnosed at an early stage, the treatment is often simpler and the outcome is more likely to be positive. The hon. Member for Strangford (Jim Shannon) shared some startling statistics about the impact of early detection on ovarian cancer survival. Developments in cancer screening and increasing efforts to promote public awareness, such as the Be Clear on Cancer campaigns, are welcome. On Saturday, I saw the great work being done by those campaigns when I joined a team at a shopping centre in Liverpool to raise awareness of ovarian cancer in women.

Encouraging people to visit their GP sooner rather than later if they have any symptoms of concern is a simple message that can make a big difference. However, we have further to go to ensure that GPs are getting the training and support that they need to help them identify cancer signs and symptoms. Several hon. Members have raised concerns this morning about the amount of training of that kind that GPs receive. I hope that the Minister will respond on that issue in particular. I share the alarm expressed by the hon. Member for Basildon and Billericay (Mr Baron) about the fact that too many cancers are detected in accident and emergency.

Improvements at the first point of contact are not enough if, once cancer is suspected, people are not seen quickly enough by a specialist. Before Christmas there was concern at the news that in as many as half of cases the Government are missing their target for 95% of people with suspected cancer to be seen by a specialist within two weeks. It was right that Labour introduced the two-week cancer guarantee. We also left plans in place to speed up diagnosis, but unfortunately it appears that focus has drifted a bit from that important part of the fight against cancer. I am keen to hear the Minister’s comments on what further steps the Government are taking to improve early diagnosis.

If cancer is diagnosed, people need to feel safe in the knowledge that they are going to receive the most effective treatment possible, as quickly as possible. Many hon. Members expressed concern about that this morning. The hon. Member for Basildon and Billericay said that if we reached the average European survival rates we would save an additional 5,000 lives. I think that we can do better than that. Despite improvements in survival and mortality in recent decades, cancer outcomes in England remain poor when compared with the best outcomes across Europe. The hon. Members for Mid Derbyshire and for Lancaster and Fleetwood (Eric Ollerenshaw) mentioned the Cancer Drugs Fund and raised the question of its future, and I share their concern.

In more than 90% of cases when cancers are cured, it is as a result of surgery or radiotherapy. That is where our focus and resources should be directed. I welcome the Government’s recent focus on radiotherapy, and, in particular, on access to intensity-modulated radiation therapy. Last week I visited the Clatterbridge cancer centre in Merseyside, which treats 26,000 new patients every year, and saw how cutting-edge treatments are positively affecting patients’ lives.

Last week, however, we heard that the Prime Minister’s pledge that, from April 2013, all cancer patients would receive the advanced radiotherapy treatment they need, where it is clinically appropriate and cost-effective, has not been met. A less than glowing report published by Cancer Research and NHS England last week said that

“more needs to be done”

to achieve the Prime Minister’s guarantee. The report describes how momentum has been lost during the transition resulting from the NHS reorganisation in England, and it identifies a number of challenges on which I hope the Minister will comment.

One concern is that ageing equipment is preventing centres from keeping pace with innovation and providing advanced techniques. Another key concern is about deficiencies in the numbers of staff in crucial positions such as physicists, therapeutic radiographers and clinical oncologists. When I visited Clatterbridge last week, I heard first hand from the management how they are struggling to get physicists in the hospital.

There is also concern about the shortfall in radiotherapy work force capacity across the services, which impinges on the ability to deliver advanced techniques and innovate. On the number of radiotherapy treatments administered per 1,000 patients, we are well off the pace compared with other parts of Europe. While advances are being made, the pace at which innovations have been adopted across the NHS has been inconsistent. In Liverpool, cancer mortality rates are twice that of parts of London. Clearly, we still need to do much more about inequalities in access and outcomes for cancer patents. I hope that the Minister, in her response, will share with the House the Government’s plans in that regard.

Our battle against cancer will not be won with treatment alone. As the title of the debate suggests, we also need to look at prevention. More than half of all cancers could be prevented if people adopted healthy lifestyle choices such as stopping smoking, eating a healthy diet and exercising. I will focus on each of those in turn.

On smoking, great progress has been made in the past decade, but a quarter of cancer deaths are still linked to tobacco and smoking is by some margin the largest single cause of cancer in the UK. About 20% of our population smoke. That is down from 27% in 2000, but that figure is still too high. For every 1% decline in smoking prevalence, we could prevent about 3,000 deaths. Last month, Parliament voted in favour of an amendment to make Labour’s proposal of a ban on smoking in cars with children in them a reality. That great step forward will protect children and, ultimately, create a shift in smokers’ behaviour.

We are glad that the Government have agreed to standardised packaging; we look forward to Sir Cyril Chantler’s review. We are also pleased that the Government adopted our proposal to ban proxy purchasing of cigarettes. However, we must maintain momentum and ensure that those three victories are not pursued in isolation, but are part of a much bigger ambition. I hope that the Minister will share what more her Department is doing to reduce the number of smokers and smoking-related deaths, specifically in relation to the cancers that we are discussing.

Obesity is the second area for prevention and some of my biggest concerns are about the Government’s approach to tackling that. The voluntary responsibility deal stands little chance of delivering the fundamental change needed to improve our national diet. We need action that will impact on the whole population rather than the current piecemeal scheme that works on a product-by-product basis.

I was concerned to hear in the press reports relating to the World Health Organisation’s position on reducing our consumption of sugar, which leads to obesity. If what we read was correct, the view was that the Government might ignore that expert guidance. I hope that the Minister will respond to that and outline specifically what her Department is doing to tackle the obesity crisis in order to reduce cancer prevalence, because so many cancers are connected to obesity. On physical activity, to secure significant improvements in tackling the main causes of cancer, we need to see a fundamental shift in our nation’s behaviour.

[Jim Shannon]

To step back one sentence to the hon. Lady’s comments on better diet, and the need to have that at an early stage, many education authorities across the United Kingdom—they are doing this in Northern Ireland—are trying in schools to address children’s diets and the relationship of that to their parents and their family budget. Does she feel that education and health can play a joint role to help get the diet right at an early stage, which would prepare children for adult life?

[Luciana Berger]

The hon. Gentleman makes an important point about the role of education. A real intergenerational role can be played in education. If we educate our students and young people, they can play a role in informing and educating their parents and grandparents too. Some work has been done on that, but more can be done. I am concerned that when children start school, about 10% are obese or overweight, yet when they get to year 6, about a third are obese or overweight. That is a shocking statistic that we need to address urgently. I am working with my colleagues who shadow education on that and I hope that the Government are looking at what more can be done to affect the lifestyle and food choices of our young people to give them the best chances in life. A child with obesity will live on average nine or 10 years less than a child who is not obese, which is of serious concern and I thank the hon. Gentleman for making his point.

Labour is putting physical activity at the core of its public health policy. The easiest lifestyle change to make is moving from inactivity to activity and, once achieved, people can begin to feel better about themselves and more in control, and can then make better choices on smoking, drinking and eating, yet more than two thirds of our population fail to meet the minimum recommended levels of physical activity a week. I am concerned about the Government’s cuts, which have led to a reduction in local leisure services, which I have seen locally. The end of free swimming, for example, serves only to create further barriers to participation in physical activity. I would be interested to hear from the Minister on what the Government plan to do about that.

On prevention, the hon. Member for Mole Valley (Sir Paul Beresford) raised some important questions on vaccinations, specifically the HPV vaccination. I hope that the Minister will respond to those points.

Undoubtedly our national fight against cancer is going in the right direction, but is that enough? I do not think that it is. We have had a thorough debate this morning, with interesting and varied contributions. Collectively, we have touched on what needs to happen. We need earlier diagnosis, swifter access to the most effective treatment and an even stronger focus on prevention. We need bold, ambitious and concerted action on all three counts to ensure that we win not just the battle, but the war. I look forward to the Minister’s reply.

10:36

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

It is a pleasure to serve under your chairmanship, Mr Gray. We have certainly had a wide-ranging debate. I think I would need another hour and a half to respond to all the points made, but I hope that hon. Members present know me well enough to realise that if I am not able to respond to their points in detail, I will get back to them after the debate. The shadow Minister and I have many opportunities to debate the wider public health issues, so I will devote most of my response to specific points, particularly those made by my hon. Friend the Member for Mid Derbyshire (Pauline Latham), who called for the debate. I will, however, try to touch on all points made in some way.

I congratulate my hon. Friend the Member for Mid Derbyshire on securing the debate. She always speaks movingly on this subject, not least as a result of her personal experience. She has been a tireless campaigner on behalf of her constituents and others, in particular with regard to melanoma. Before I respond to her specific points, I would like to restate the Government’s ambitions, as those apply across the debate. All Members have referred to this, but improving cancer outcomes is a major priority.

We aim to save an additional 5,000 lives a year by 2014-15 and halve the gap between cancer survival rates in England and the best in Europe. As my hon. Friend the Member for Basildon and Billericay (Mr Baron), who is the chair of the all-party group, said, we are not as good as we could be, so there is great effort and commitment to make us better. Our debate has been on how we do that, not why that is the right ambition. To achieve that, more than £750 million has been committed to deliver our cancer outcomes strategy, which includes £450 million to support earlier diagnosis of cancer by improving public awareness and GP access to key diagnostic tests.

Early diagnosis came up many times during the debate. It is worth making the point that most GPs will see relatively few cancers in a typical year. Because we all know someone affected, whether in our family or our group of friends, we imagine that GPs see cancer all the time, but they do not; certainly, they do not see many of the rare ones. The challenge of early diagnostic testing and training to get those tools into GPs’ hands is serious, because that is also a challenge for GPs, of whom we ask a great deal. That is why it is important that the Government are putting money and effort into those early diagnostic tests. That money also goes towards paying for extra testing and treatment in secondary care.

I want to touch on the architecture of the system. It has been mentioned a few times and hon. Members have expressed concerns about the changes to the system. The first general comment I would make is that the main thrust of the debate is that we can do a lot better on cancer, which would seem to lead to the conclusion that the old system was not necessarily delivering the outcomes we wanted. Although caution is understandable when major change has happened, Members are perhaps being unnecessarily gloomy about the changes that can be delivered under the new architecture for the NHS and the health system. Many of the criticisms that have been made this morning were made under the old structures as well.

Cancer is a priority for NHS England. Clinical expertise is at the heart of commissioning decisions and NHS England has established a range of clinical reference groups, and is leading on delivering clinical strategy. NHS Improving Quality is working with the strategic clinical networks and has played a key role in working with the NHS on early diagnosis, especially on awareness campaigns. NHS England has also created national service specifications for a wide range of cancers to ensure consistent, high-quality service across England.

[Grahame M. Morris]

I know that the Minister is trying systematically to get through all the points that were raised, but I challenge the point that there is no fundamental difference under the new arrangements. There really is a fundamental difference in the commissioning of specialist cancer services. Those were previously commissioned on a local basis, effectively, by primary care trusts coming together in London, but now it is done by NHS England. That has caused a huge hiatus for the patient cohort I identified. Will she agree to look at that and, if necessary, meet me and a group of clinicians to highlight the nature of the problem?

[Jane Ellison]

The point I was making was not that there has not been change—of course there has—but that it is far too early for hon. Members to be drawing the conclusions they have about the new system. The Government have put a great strategic priority on cancer and NHS England has been charged with delivering against a mandate and against that strategic priority. I take the hon. Gentleman’s point, but NHS England leads on this subject and is quite clear about the priority that the Government and Parliament put on it. I want to make that point. I understand why people have expressed concern.

[Grahame M. Morris]

Will the Minister give way?

[Jane Ellison]

No, I am going to press on, because I will have no chance of getting through all the specific points that were raised if I get into a debate with the hon. Gentleman.

I turn now to skin cancer. I should mention that NHS England has recently published a service specification—I mentioned that it has those across a number of cancers—on adult skin cancer services. That sets out what the NHS must have in place to offer high-quality skin cancer treatment, care and support. I am happy to send that to my hon. Friend the Member for Mid Derbyshire if it would be useful.

My hon. Friend and other hon. Members expressed great interest in what we are doing to ensure earlier diagnosis. It goes without saying that identifying cancers early has a huge benefit in terms of improving outcomes for individuals and for the whole health system. That is why we have committed over £450 million to improve diagnostic services. Later, I will consider in more detail prevention in the context of public health, but it is worth making the point that although diagnosis and treatment are vital, prevention is the biggest prize of all, because we can stop people even having to get to the point of being diagnosed. The more work on awareness and prevention that hon. Members and local councils—particularly given their new public health leadership role—can do, the more we will save the costs in money and in human misery.

Access to early diagnosis is most effective when people visit their GP early. That is why we are running a local Be Clear on Cancer campaign specifically on melanoma in the south-west in April and May, to raise awareness before the summer. We will evaluate the programme as part of our wider programme of Be Clear on Cancer campaigns, which, as the shadow Minister said, has done so much good work in so many areas.

We are also working with GPs to ensure they have the information they need. Cancer Research UK and the British Association of Dermatologists have developed a GP skin cancer toolkit. Evaluation shows that it has reached almost 10,000 GPs and helped to increase confidence in referring suspicious lesions.

My hon. Friend the Member for Mid Derbyshire spoke quite a bit about the NICE approval process, which was also mentioned by my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw). I know that my hon. Friend the Member for Mid Derbyshire is concerned about access to NICE’s approval of drugs for late-stage melanoma. As she knows, our priority has to be to get the best possible results for all NHS patients with the resources we have. NICE’s methodology is the best guide we have to the clinical value and cost effectiveness of different treatments.

We have asked NICE to look at the way drugs are assessed so that patients can get the treatments they need at the best value for the NHS, and the price the NHS pays is more closely linked to the value a medicine brings. NICE will carry out a full public consultation before implementing any changes to its methodology. I understand that NICE plans to launch its consultation later this month, and I urge all Members to contribute. I am sure they will, as many Members present take a significant leadership role in Parliament on cancer.

I turn now to the particular concerns my hon. Friend the Member for Mid Derbyshire raised about yervoy or ipilimumab. Although NICE has recommended yervoy as an option for treating advanced melanoma in people who have received prior therapy, I understand her concern that it should be approved as a first-line treatment. I have been advised that NICE is currently considering yervoy as a treatment for previously untreated stage three or stage four malignant melanoma. Although it is not appropriate for me to intervene in an appraisal, I have been advised that NICE’s initial draft guidance, issued on 25 February, recommends yervoy only in the context of clinical trials, as I outlined to my hon. Friend at Health questions recently.

That is not a refusal, however. Instead, it reflects NICE’s view that the technology is promising but there is insufficient clinical evidence for the appraisal committee to recommend its use as a first-line treatment at this stage. However, I hope I can reassure my hon. Friend that the manufacturer is currently conducting a further trial, which, along with other research, is due to complete in 2016. Once that research is available, I am sure NICE will wish to reconsider its guidance. NICE is currently running a consultation on its interim guidance. Again, I would also recommend that hon. Members, and particularly my hon. Friend the Member for Mid Derbyshire, make their views known to NICE. I always make a point of referring Parliament’s views, as expressed through debates such as this, to the relevant people making the decisions. I did so the morning after the debate on pancreatic cancer last week, when I sent a personal letter with a copy of Hansard to the decision makers concerned to make them aware of Parliament’s views. I always undertake to do that where relevant.

In the interim, I understand that NHS England’s national Cancer Drugs Fund panel has considered including yervoy for first-line treatment of advanced melanoma. The panel has decided to refer yervoy to NHS England’s chemotherapy clinical reference group for consideration for inclusion under baseline commissioning. If that is agreed, clinicians would be able to prescribe the drug for use in first-line advanced melanoma according to the commissioning policy that would be developed by NHS England. NHS England will make its decision known in due course.

I also want to reassure my hon. Friend the Member for Mid Derbyshire that NICE is currently developing a clinical guideline on melanoma. It expects to issue final guidance in July 2015. I hope that gives her some sense that a lot is going on this area. We will endeavour to make sure that we keep her updated.

I will have to canter through some of the other points, Mr Gray, but as so many were raised I hope you will be generous and give me a little time to do so. I turn first to the points made about the Cancer Drugs Fund and the concern that no new medicines are being accepted, which my hon. Friend the Member for Lancaster and Fleetwood raised. Just for the record, so far in 2014 the panel has added a number of drugs to the national list—I will probably stumble over pronouncing some of them, but I hope the House will forgive me. They include kadcyla for breast cancer, tafinlar for melanoma and radium-223 dichloride for prostate cancer.

I turn now to the topic of CCG accountability, which I have often discussed with my hon. Friend the Member for Basildon and Billericay, who chairs the all-party group on cancer with such vigour and passion. I entirely share his view that it is a critical point. He has articulated all the wins over the years in making sure that early outcome indicators are part of the CCG outcomes indicator set, and the importance that early outcome indicators have for early diagnosis and more information about survival rates, which we all want to see. It is important to remember that NHS England can intervene where a CCG is found to be failing in its duty to secure high-quality outcomes, although I accept that that is a high-level intervention. I think my hon. Friend is driving at what we will do with the information when we get it. NHS England is considering how it can better respond to the functions in the outcome indicator set and how all permissions and system structures work together to improve outcomes.

This is the first time we have had this indicator set and I know that my hon. Friend has talked to the national clinical director for cancer, Sean Duffy, about this, which is the right thing to do. I will also meet him to talk about it. It is helpful that Parliament returns to the issue regularly because it helps me to emphasise to NHS England how much store hon. Members set by local outcomes and how important it is for us to have a response throughout NHS England to indicators and outcomes that are not as good as they could be. I accept his challenge, which he knows that I am working on. I am having ongoing conversations about it, but it is always good that Parliament returns to the point and challenges the levers of change.

We have introduced GP inspection, and more and more data will be available to the inspectorate to ensure that it is asking questions not just about what GPs do, but about what they do not do and when we expect them to do more. There are all sorts of ways to challenge the system, and it is ongoing work.

I cannot respond to all the points made by the shadow Minister, but I will touch briefly on one. She referred to a report that highlighted the use of out-of-date equipment. To encourage NHS providers to update existing medical technology infrastructure, the Department established a £300 million fund in March 2012, which is operated by NHS Supply Chain to bulk purchase medical equipment to achieve better prices. In August 2013, NHS Supply Chain announced the signing of a deal with Varian Medical Systems to secure 20 new linear accelerators. More detail is available about that innovation fund and the radiotherapy innovation fund, but I do not have time to go into it now.

As ever, the hon. Member for Strangford (Jim Shannon) is present. He often attends debates and makes forceful points about the need for us to work together. The National Institute for Health Research is funded by my Department, so it is focused primarily on England, but I assure him, as I have tried to previously, that the published research is available to anyone. NICE guidance applies formally only to England, but it is available online to all who want to use it. It makes sense for all the Administrations to share that information and expertise, and to ensure that they make use of it when framing their own response.

We have previously discussed human papilloma virus in more detail in this Chamber and during an Adjournment debate on 13 January. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) made many good points about the wider take-up of vaccination to reduce the incidence in females of that and other cancers, and in males. The HPV vaccine was introduced to tackle cervical cancer, which is why the strategy started with girls. He makes a good point about the potential benefits, which are well recognised, of extending that to protection against other cancers, particularly oral cancers.

Since 2008, more than 6 million doses of vaccine have been given in the UK with 87% of the routine cohort of girls completing the three-dose course in the 2011-12 academic year. I was concerned to hear the figure my hon. Friend mentioned from his own area. Hon. Members rightly come here to challenge Ministers about what we are doing, but when there is local information, I urge them also to challenge their local systems and to ask what it being done to bring them up to the national rate. We know that there are challenges about some of hard-to-reach groups, but I am surprised to hear the statistic my hon. Friend mentioned. I urge all hon. Members to recognise that we cannot drive the change solely from Whitehall, and that it is good if they also ask questions about accountability locally.

My hon. Friend referred to the fact that work is continuing through the Joint Committee on Vaccination and Immunisation to look at the matter in more detail. He said that the JCVI is also looking at adolescent boys and men who have sex with men, and highlighted the problem that they do not benefit from herd immunity as HPV vaccination is more widespread among girls. The JCVI is considering whether it is cost-effective to extend the programme to both those groups. The issue is complicated, especially concerning adolescent boys. The evidence base, mathematical modelling and deliberations will take time, but the work is ongoing and it helpful that the House continually expresses its interest.

I recognise that I have not responded specifically to some of the points made by my hon. Friend the Member for Lancaster and Fleetwood about pancreatic cancer, but I responded in the House only last week. I hope he will accept that it is not discourteous to say that my response has not changed substantially since then, but I took the actions I promised last week. He has put on the record his concern about the need to value the additional months of life in a disease that sadly takes people so quickly. Early diagnosis and GP training in that is critical in pancreatic cancer, which is so hard to diagnose. That is well recognised, and I thank my hon. Friend for making his point.

In the remaining few minutes, I cannot respond to all the public health issues raised, but smoking is a factor in so many of the cancers that have been discussed, as the shadow Minister said. Smoking in this country is at an historic low, and has dipped to below 20% of the population for the first time. There is a significant legislative programme and the shadow Minister said she hopes we will keep up the momentum. I assure her that I have no option given the programme that we must deliver in the coming year. I look forward to her co-operation. I also look forward to support from hon. Members in the Chamber when we introduce those measures in the House.

It is always good to remind people why leadership on smoking cessation and legislation is so important. It plays a role in prevention, which is important in many areas that hon. Members have highlighted this morning. There is a big role for leadership at local council level because the figures on smoking cessation are extremely patchy throughout the country. We must drive change at local level.

The hon. Member for Easington (Grahame M. Morris) referred to Gamma Knife, and I will respond to him in more detail after the debate if that is acceptable to him. I am sure he did not mean to say that NHS England is callous and cold. Clinicians must make difficult decisions every day on behalf of all of us in balancing competing health priorities. He used those words, but I know he did not mean them in connection with the people who must make the difficult decisions. Many of our clinicians and health leaders must perform difficult balancing acts. Just the challenges made to me as the Minister in this debate this morning would have an enormous cost. We must make difficult decisions all the time about where we can best spend resources to bring the best results for the population. I know that that is at the heart of hon. Members’ concerns.

I thank hon. Members who are present. Many are long-standing champions of particular issues in Parliament and I urge them to continue their awareness-raising work. NHS England will continue to respond to that, as will Ministers. I thank hon. Members for attending the debate this morning.

Transport Infrastructure (Wellington, Somerset)

Tuesday 11th March 2014 Westminster Hall

10:58

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

Thank you, Mr Gray, for presiding over our debate this morning. It is narrowly focused and not necessarily of interest to many Members of Parliament, but is certainly of interest to the residents of Wellington, Somerset, which is in my constituency, and people in the surrounding communities. To put the matter into context for hon. Members who are less familiar with Somerset, I should say that the principal town in my constituency is Taunton, which has a population of around 60,000. It is the largest town in Somerset and the county town, and there have been some substantial infrastructure development projects there during the last decade or so.

A bridge was built on Silk Mills road—the Silk Mills bridge, which opened in 2005 and replaced a level crossing. That was important in allowing the traffic to flow around the edge of that side of Taunton and was introduced at the same time as a park and ride. More recently, a few years ago, the so-called Third Way bridge opened in Taunton. That alleviated some congestion in one part of town and provided a more direct route across the river.

As we speak, the northern inner distributor road is being built in Taunton, with a substantial contribution from the Department for Transport—central Government are spending in the region of £15 million, supplementing money that has been made available locally as well—to alleviate congestion in the northern part of Taunton. However, perhaps more importantly, the road will allow for the development of an extensive brownfield site near Taunton train station and provide an obvious opportunity for new jobs, new housing and new retail sites in Taunton. All that is conditional on the road that is currently being built and due to be finished next year.

There are always people who would like even more projects to be initiated and funded, but we recognise in Taunton that although the traffic congestion is a serious problem, there has been transport infrastructure investment. It is fair to recognise, of course, that central Government have limited funds and that demand always outstrips the money available.

During this short debate, I want to turn to the second town in Taunton Deane constituency, or borough. About two thirds of people in Taunton Deane live in Taunton, but if the Minister or any other Members were to travel further down the south-west peninsula on the M5, going one more junction beyond junction 25—the principal Taunton junction—and turning off at junction 26, they would come to the second town in Taunton Deane, which is called Wellington. It is well known for the Wellington monument, which overlooks the M5, and it has a population of approximately 10,000, depending on how one calculates some of the outlying parts of the town. It is a substantial community in its own right and has a very strong and proud identity.

The purpose of securing this morning’s debate is to talk about the infrastructure requirements of Wellington. There is a danger, because the town is smaller and is only six or seven miles away from Taunton, that Wellington’s transport infrastructure needs will otherwise be overlooked. I want to discuss two aspects of the transport infrastructure that I hope could be improved, if we think in terms of a five-year or 10-year project. We have a vision for improving the quality of life of Wellington residents by upgrading their transport infrastructure. The two elements are, in my view, the two core components of a transport infrastructure vision for Wellington.

The first one is the problem of traffic congestion in the town. I recognise that every Member of Parliament could stand up and identify a town in their constituency where traffic congestion was a problem, but it is becoming more of a problem in Wellington, in part because extra house building is going on in the town. The Cades Farm development has brought forward several hundred houses, which are now occupied, and the Longforth Farm development will have the space for about 500 houses when it is completed. It is only in its first phase at the moment. Obviously, that is adding a substantial percentage population increase to the town of Wellington.

If you were to come a mile or two into Wellington from junction 26 on the M5, Mr Gray—it is a very underused junction, so there is a lot of opportunity for development and it is attractive to people who can access the motorway quickly at that junction—and you were trying to get across to either the northern part of the town, coming in from approximately the east, or to places north of Wellington from the motorway, such as Milverton or Wiveliscombe, you would be hugely frustrated. You would have to go pretty much into the centre of the town, into the high street, and then turn right into a road called Longforth road.

That junction and the junction right in the centre of the town become hopelessly congested at peak times. You would almost certainly be stuck, Mr Gray, possibly for one or two phases of the traffic lights, and it would be even worse coming back, if you were coming back from Longforth road and looking to turn left and exit Wellington at that same junction. At peak times, the congestion is becoming intolerable and with the extra house building, the situation will become much worse.

What Wellington residents and I had hoped is that the Longforth Farm development would allow for a northern relief road for Wellington. At the moment, the traffic can flow round the southern part of the town without coming into it, but to get to the northern part of the town or north of it, traffic has to come into the town and out again, so Wellington needs a northern relief road. The Longforth Farm development, which is just getting under way, and will have, as I say, about 500 houses when it is complete, was widely thought to provide the opportunity for a northern relief road as part of the project. That seemed a very sensible trade-off, which would allow people to get around Wellington. I think that Wellington residents, even those who are perhaps uncomfortable with the scale of that development, would have seen that there was a quid pro quo and that there would be benefits for them in having the northern relief road.

Instead, I regret to say, the development of up to 500 houses has a road accessing the development, but it is a dead end—it is a road to nowhere. It means that if the people living in those 500 houses, when they are built, want to go to the northern part of Wellington, only 100 or 200 yards from their homes, they will have to drive out of their extended cul-de-sac into the middle of Wellington, exactly to the junction or junctions that, as I described, are already hopelessly congested at peak times. They will then have to drive back out to the north again. There is no northern relief road, just more scope for congestion.

The only beneficial caveat relates to Relyon, which is a major employer in Wellington that makes mattresses. Next time you are going along the motorway, Mr Gray, you may see a lorry with Relyon written on the side. When you are thinking of buying a mattress yourself, you may consider buying a Relyon mattress, and you would be very well advised to do so. It makes very high-quality mattresses and is one of the two big employers in Wellington, along with a company called Swallowfield, which makes aerosols and other cosmetics. We want to keep both those in Wellington. The one advantage of this new cul-de-sac is that it allows Relyon lorries to get out of Wellington without coming into the town centre, because it goes up to their factory. However, it does not allow any residents—any normal traffic—to bypass the town centre.

The first task of all is a northern relief road in Wellington, which we would very much benefit from. There are, essentially, two options—a modest option and an ambitious option. The modest option would be a road that goes into the new Longforth Farm development, but would then exit at Brendon road. It would not, in other words, try and cross the railway line, because as soon as a bridge is put over the railway line, it becomes more expensive and more complicated. It would not bypass as much of the town, but it would bypass the junction of the high street and Longforth road that I discussed a moment ago, which causes difficulties by Waitrose.

The more ambitious option would be a northern relief road that made a slightly broader sweep—there are different options as to where it could go on the map—crossed the main railway and came in at the end of either Wardleworth way, on the other side of the railway line, or possibly further along Station road, towards Milverton.

Either of those options would be an improvement on the current situation. The latter would be a sizeable improvement on the current situation and would set up Wellington for the next generation, because there would then be a southern relief road and a northern relief road. The northern relief road would not go all the way round to the north, but it would take out a substantial proportion of the traffic, and I think that it would allow Wellington’s extra development to be absorbed. It would be a long-term solution, not a sticking-plaster solution. It would stand Wellington in good stead for a considerable time.

The second big infrastructure project in the vision for Wellington’s infrastructure is a train station, and this links to the first point that I was just making about the northern relief road. Wellington is on the main line from Paddington to Penzance—or the line that normally runs from Paddington to Penzance; it is not running there at the moment. It is the main line that comes through Reading and then through Wiltshire, Somerset, Exeter and Plymouth and goes through to Penzance. Wellington did have a station; historically, it was a town with a station, but it has not had a station for many decades. There has been a debate for an extended period—longer than I have been the MP, which is almost nine years—about the feasibility and desirability of Wellington’s having its own train station.

I recognise that Wellington could not be expected to have a train service that was as frequent as Taunton’s, because Taunton is a much bigger town and virtually all the inter-city trains stop at Taunton, but there are other stops on the line between London and Penzance that are comparable to or smaller places than Wellington. I travel frequently on that line—almost every week—and shall give some examples. The fast service from Taunton to Paddington stops only at Reading, but some of the slower services stop at Castle Cary in Somerset or at Pewsey in Wiltshire, and in Cornwall the service stops at many places that are much smaller still.

It would be possible for there to be a stopping inter-city train—the slower service—stopping at towns such as Wellington. That would not require a diversion—Wellington is on the line; the line runs through the northern part of Wellington. It would require a new station, and the expectation would be that some of the trains in-between the inter-city trains, perhaps those running between Bristol and Exeter or Bristol and Plymouth, would stop in a number of places, including Wellington, and a few—not many, but one or two—of the inter-city trains would also stop at Wellington.

Such a new station would be hugely advantageous, because at the moment people who live by the train line in Wellington have to drive—even though they see the trains going past their front door—either to Tiverton Parkway or to Taunton. If they do not have a car, it is hugely inconvenient for them to get to either of those locations. They would probably need to get a bus into the centre of Wellington. Then they would need to get another bus, from the centre of Wellington to the centre of Taunton, which is 6 or 7 miles away. Then they would either have to walk from the centre of Taunton to the train station in Taunton, which is not at the same place in Taunton as the bus depot, annoyingly, or have to get a third bus, from the bus depot in Taunton to the train station in Taunton. If they allow enough time for those three bus journeys—enough time for contingencies—it is possible that getting the 6, 7 or 8 miles from their home in Wellington to the train station in Taunton would not take much less time than getting the train 150 miles from Taunton to London. That is how much extra time and inconvenience is built in.

To have a few inter-city services a day—I would not expect it to be a service every hour or so—stopping at Wellington, as they do at Castle Cary or Pewsey, would be of transformational benefit to people in Wellington and surrounding areas such as Milverton and Wiveliscombe, which I have mentioned. What would potentially work so well and make this a coherent vision would be building that station as part of the same project that came with a bridge, which made the superior version of the northern relief road possible. In other words, when I was talking about the traffic congestion and northern relief road and about the station, I was talking about not two unrelated projects, but potentially related elements of a project that would transform Wellington.

The project would provide opportunities for some more development in the town. That development would obviously need to be proportional to the size of the town, but the project would allow some reasonable development to take place. It would be hugely beneficial to the residents of the town by alleviating congestion in the centre of town. It would be beneficial to the major employers in the town, who would be able to access the motorway better. It would be beneficial to people from nearby communities, who would be able to get through Wellington and out the other side; at the moment, they get stuck in Wellington when they do not even want to be in the town. It would also be beneficial to the people who were able to use the services from that train station.

I conclude by saying that I appreciate that money is a finite resource and we live in straitened times. I am very grateful to the Minister for being willing to respond to what I appreciate is a very limited debate about a very specific project, or two potentially related projects. I hope that the message that I am leaving him is that if we can put in place a vision for this Wellington development that includes those two projects and that is supported by the borough council, the county council, Wellington town council and me as the Member of Parliament, the Department of Transport could look at putting those projects in some sort of future funding plan.

We could look at moving from just talking about the projects in a broad, generic, hypothetical sense to hoping that in one, two, three, five or 10 years we will have a plan that we can put in place, with some funding—not all the funding, but perhaps some—from a central Government pot. That could be used to turn the current situation in Wellington, which is pretty intolerable and in need of improvement, into the vision for the town that would serve its residents so well.

11:17

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

It is a pleasure to see you in the Chair, Mr Gray. I congratulate my hon. Friend the Member for Taunton Deane (Mr Browne) on securing the debate, but it would be wrong of me not to start by saying how saddened I was to hear the news that Bob Crow died in the early hours of this morning. My thoughts are with his family, friends and colleagues. Like many, I will obviously remember him as a passionate advocate of safety on the railways and the well-being of people who work on the railways. Although it is probably clear to everyone that we may have had different opinions on how to run the railways, he was a man who led his organisation from the front and made an important contribution to the debate about how railway services are run in this country. My thoughts and, I am sure, the thoughts of everyone in the Chamber are with his family, friends and colleagues.

I commend my hon. Friend the Member for Taunton Deane for his eloquent and passionate speech. I listened to his opening remarks about the improvements in Taunton and clearly I welcome his support for the improvements that have been undertaken there. Of course, I also commend his realism in recognising that money is tight. That is a helpful prefacing remark.

The economic benefits of good transport are well understood and, in challenging times, transport investment is even more important. As my hon. Friend has pointed out, transport helps to support local communities by enabling businesses to move people and goods more quickly, easily and reliably, which helps them to grow and be competitive; by enabling people to get to work and creating more job opportunities; by supporting local projects and products such as Relyon mattresses, for which we heard an admirable advertisement; and by attracting inward investment to towns and cities to make them great places in which to live and do business.

It is useful to remind ourselves—this was implicit in my hon. Friend’s remarks—that the Government inherited not only a fiscal deficit but an infrastructure deficit. In the years leading up to 2010, there was a huge increase in demand on our transport network, but investment failed to keep up with that demand. As a result, nearly half of the respondents to a CBI survey at the time rated the UK’s transport network as well below average. It is to the Government’s credit that, at a time when we are trying to put the public finances in a sound place, we are investing record amounts in maintaining, upgrading and expanding the road and rail infrastructure in this country, investment that will, according to the International Monetary Fund, improve the long-run growth potential and boost demand.

Between 2011 and 2014, we invested £32 billion in roads, rail and local infrastructure, and between 2015 and 2021 we are committed to funding of £56 billion. We ensure that that money goes throughout the country. In the current two fiscal years, the Somerset block funding for road maintenance and highways maintenance will consist of more than £40 million. It is clear that the Government are committed to investing in reliable networks and providing the capacity that towns and cities across the country need.

The severe winter weather that we have suffered has made some parts of the network extremely vulnerable. As my hon. Friend knows, Somerset has had particular difficulties, so it is right that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs announced last week the publication of an action plan, which contains several transport recommendations. In addition to £10.5 million of funding from the Department for Environment, Food and Rural Affairs and the Department for Communities and Local Government, the Department for Transport is making £10 million of support available immediately to Somerset to enable it to start work on several short-term actions to help secure a sustainable future. As a result, I hope that Somerset will be able to begin to clear the roads of silt and debris, to deep clean the drainage system—that will help the road system—and to repair bridges and other structures. In addition, my right hon. Friend the Secretary of State for Transport has commissioned a review of the resilience of our transport networks. The challenge of the coming months is to get the network back to business as usual, to learn the lessons and to give the right support to the transport infrastructure in counties such as Somerset.

The Government clearly have a role to play in supporting communities through such extreme events and, as my hon. Friend the Member for Taunton Deane identified, in supporting communities with their priorities for transport. However, the days when Westminster decided and dictated to local communities what those priorities should be are over. Local priorities should be identified, and local decisions made, by local communities, local highways authorities and local enterprise partnerships. That is why the Government have committed £2 billion a year over the six years from 2015-16 to the local growth fund, which will be available to LEPs. Those growth deals can provide the resources required to facilitate local communities’ priorities, and such deals may well be appropriate for some of the targeted growth priorities that my hon. Friend described. The funding is not ring-fenced, but it will be available to support long-term planning infrastructure, including the transport priorities.

Many hon. Members will be aware that the growth deals are a competitive process, and moneys will be made available to the places that demonstrate the clearest-cut and most convincing arguments for delivering growth. It is important for local communities to engage with their local economic partnerships, and for local authorities and LEPs to work together to shape local priorities. I know that my hon. Friend has been involved in discussions with his LEP, Heart of the South West. I stress how important it is for the ambitions that he has described that the LEP is intimately involved in the discussions and that it recognises and supports his priorities.

I turn to the two interrelated schemes that my hon. Friend has described. He spoke about the congestion in Wellington and the need for a northern relief road to bypass the town centre by connecting roads to the east and the north, which has long been sought. The development that he mentioned will provide much of the road. It will provide access to some of the new residential development and to the factory, and it should reduce HGV traffic in the town centre. As he pointed out in an article last November, however, it will not be a

“proper northern relief road…we have the road to nowhere.”

I understand his concerns about the continuing congestion, delay and air pollution that are caused by the fact that the road is unconnected. He set out two aspirations for a northern relief road: one modest and one—a broader sweep that would cross the railway line—more ambitious. Both those ambitions are excellent examples of the solutions that the local growth fund has been established to support. As far as I am aware, and he may wish to correct me, they have not yet featured in the draft of the LEP’s strategic economic plan. I urge him to engage with the LEP and ensure that it recognises that ambition as a strategic priority. That is a route through which the scheme might be pursued.

[Mr Browne]

If we were able to bring forward a joint vision for those two projects, would there be any national impediment to Wellington having a railway station? Would the Department for Transport object to that on the basis that it might have implications for other traffic on that line? That might not be an entirely local point, but it would be beneficial to local people if there was not a national impediment.

[Stephen Hammond]

I will come on to discuss the railway station in a moment, so I will tackle that point shortly. Local pinch point funds, of which there have been two tranches under this Government, have helped with schemes such as the rail route that my hon. Friend mentions. Such problems are likely to be a priority for a future Government, and if such a scheme is re-established in future I hope that he might look at it as a potential way forward.

My hon. Friend is right to say that people in Wellington see the train services going past, but the station was closed in 1964. Wellington is thought to be the largest town on the Penzance to London line that does not have an operational station. I am aware that Mid Devon district council and Devon county council have spoken about how they might work together to re-establish local rail links between Exeter and Taunton. I understand that Somerset council has a long-term aspiration to reopen the rail line, but it has yet to identify a suitable service or adequate funding.

To come to my hon. Friend’s essential point, if Wellington station were to be re-established, the issue would be to ensure that a stopping service that called at Wellington did not interfere with the timings for some of the faster services, or with the ambition to provide accelerated services to some of the key markets such as Plymouth, Exeter and further into Cornwall. He is right to say that whatever happened, not all services would call at Wellington. The best way to achieve a semi-fast service that called at Wellington, fitted in with the timetable and allowed faster trains to pass would clearly be a discussion point. I do not see it as an impediment, but it would be a discussion point. I suggest that the next stage is to consider the proposal and to work up a business case, so that that work can be developed in partnership with the local transport body and the LEP. My officials will be happy to provide advice and guidance on how a viable case might be made.

As I have tried to convey in my short speech, I strongly believe that local priorities and local decisions should be made locally. My hon. Friend has made an eloquent case for his local priorities, and one of the main routes through which those priorities might be pursued is the local growth fund.

11:30

Sitting suspended.

Energy Company Obligation

Tuesday 11th March 2014 Westminster Hall

[Nadine Dorries in the Chair]

14:30

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Ms Dorries.

I am pleased to have secured this debate on an issue that is affecting literally thousands of my constituents and, I know, many more thousands of people in constituencies up and down the country. The debate is timely because last week the Government finally published their consultation document on the future of the energy company obligation.

I do not intend to focus on the Government’s impact assessment, because I want to speak about the effect that changes to the energy company obligation are having on my constituents in Nottingham South right now—constituents such as Ilona, one of the people in fuel poverty that the energy company obligation was designed to help.

14:31

Sitting suspended for Divisions in the House.

14:56

On resuming—

[Nadine Dorries (in the Chair)]

The debate will now finish at 4.26 pm. That means that we will start the wind-ups at 4.5 pm, if that is okay, which gives everyone else an indication of how long they have to speak.

I call Lilian Greenwood to speak.

[Lilian Greenwood]

Thank you, Ms Dorries for calling me to speak.

I was speaking about my constituent, Ilona. She lives on the Wollaton Park estate in one of the 500 “white bungalows”, or Crane Composite houses, that were built in the 1920s by the Nottingham Corporation as part of a bold experiment in new building techniques. The bungalows are specially constructed, with steel frames and pre-cast concrete walls. They are really distinctive and are now part of a conservation area. However, they are cold and hard to heat.

Ilona suffers from fibromyalgia and chronic sinusitis, and she desperately needs a warm house; what she has is a cold and damp house with terrible mould problems. Her landlord, Nottingham City Homes, says that the only way to make her house really warm is solid wall insulation. Since the changes to the energy company obligation, that possibility has become more distant.

Kate lives about a mile away from Ilona on the Lenton Abbey estate, which was built by the council in the late 1920s. The 900 houses on the estate are of conventional brick construction. However, as was normal practice at that time, they were built with solid walls, so there are no cavities that can be insulated. About 500 of the houses are now privately owned, with about one fifth rented out. Kate says that since NCH fitted new doors—front and back—to her house, it has been noticeably warmer. However, her house is still cold and difficult to heat, and she worries about her bills. Lenton Abbey is one of the neighbourhoods that NCH had prioritised for energy efficiency measures under its greener housing scheme. However, the changes to the ECO mean that acting on those plans may now be years away.

Ennis is in his 80s. He lives across the River Trent in Clifton. The local claim that the Clifton estate was once the largest council estate in the country may be open to question, but there is no doubt that Clifton is a large example of the post-war drive to build. It is said that the Wimpey “no-fines” construction method of concrete walls allowed for a construction rate of 30 homes per week. Unfortunately, despite the fact this design type was popular across the country, the resulting homes are poorly insulated. NCH manages more than 1,200 of these properties in Clifton, but there are more than 3,500 similar privately owned former council homes whose residents exercised their right to buy but now face the same problems as Ennis—cold, damp homes and high fuel bills.

Ennis has seen his neighbours on the Clifton estate benefit from solid wall insulation, thanks to Nottingham’s pilot greener housing scheme, which was launched in the north of the estate last September. He has heard what a difference insulation has made to his neighbours’ bills, and how warm and cosy their houses now feel. He has also seen how good the insulation looks, as hundreds of tenants and owner-occupiers alike have taken up the offer of solid wall insulation provided by the scheme during the past six months.

Sadly, for Ennis the future is uncertain, because he lives in the first street in the southern half of the Clifton estate. The scheme was due to launch there in January, until the changes to the ECO that were announced in December allowed the funder—British Gas—to pull out, leaving Ennis and thousands more Clifton South residents to look enviously at their neighbours’ homes when they walk down the street.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I commend my hon. Friend’s campaigning on this issue, which has clearly affected her constituents. My constituents in the Candle Meadow area have encountered similar stories, with some residents getting this insulation for free, but because of the Government’s changes, all of a sudden, other neighbours not getting it. This is incredible unfairness, which can be seen from house to house—those who have and have not benefited. I fully support my hon. Friend’s argument.

[Lilian Greenwood]

My hon. Friend is right. Clifton is the largest scheme in Nottingham, but Candle Meadow is equally important, albeit of a different property type.

Ilona, Kate and Ennis are just three of my constituents whose homes need to be made more energy efficient, but there are more than 20,000 solid wall, hard-to-treat properties in Nottingham and our city is not untypical of the position throughout the UK, which has more than 7.6 million uninsulated solid wall homes.

Nottingham council is committed to improving the quality of its housing stock and tackling the fuel poverty that affects more than one in seven households in our city. It has long understood that improving council homes has wider positive social impacts. I have spoken before in this Chamber about the council’s decent homes programme, known locally as Secure Warm Modern, which began in 2008 and which, when complete, will have delivered double-glazed windows, loft and cavity wall insulation and new boilers to more than 20,000 council properties.

A joint impact study by Nottingham City Homes and Nottingham Trent university’s business school found that improvements to the physical condition of properties led to improved outcomes for tenants and better security, health and comfort, and that it also impacted on the wider community, by reducing carbon emissions, providing employment opportunities and improving neighbourhoods. It was as a result of working with Nottingham City Homes to secure funding for the completion of decent homes that I began to understand the challenges involved in tackling our city’s hard-to-treat solid wall houses.

I first raised these issues with the Minister in July 2012, explaining that Nottingham City Homes could use the decent homes funding to lever in additional benefits from the green deal’s energy company obligation, if there was more certainty about funding.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a cogent, coherent case for her constituents. Is she aware that only 4% of the money spent until October last year, for the country as a whole, had gone on solid wall insulation and that the worst cases of fuel poverty and coldness often exist in homes with solid walls?

[Lilian Greenwood]

My hon. Friend is right. Solid wall homes are associated with fuel poverty. Of course, they are more difficult to deal with, which is specifically why measures were needed to help tackle those hard-to-treat homes, when many councils, my own included, had done the easier work on lofts and cavity walls.

[Huw Irranca-Davies (Ogmore) (Lab)]

I compliment my hon. Friend on the case that she is making on behalf of her constituents, but will she acknowledge that, although solid wall external insulation is critical for some of the older housing stock in our urban and peri-urban areas, it is also critically important for our rural areas, where there is a predominance of solid wall homes, and that often elderly and vulnerable individuals feel now that it is much more difficult to obtain solid wall external insulation?

[Lilian Greenwood]

My hon. Friend has probably, like me, received a briefing from Calor, which has expressed particular concern about the impact in rural, off-grid locations.

In the Minister’s reply in July 2012, he praised Nottingham for its “progressive agenda” and looked forward to visiting the city in the near future to drive that agenda forward. In the event he did not visit, but he did meet me, along with representatives from Nottingham City Homes, to discuss our ideas and experiences to date. Following those positive and challenging discussions, a joint approach was developed between the city council, Nottingham City Homes and local energy efficiency charity, Nottingham Energy Partnership. They drew up the Nottingham energy saving neighbourhoods proposal, a detailed plan to maximise the insulation work on hard-to-treat homes, promote the green deal and spread benefits to private homes as well as social housing, beginning on the Clifton estate, but with the aim of transforming energy efficiency across more than 20 Nottingham neighbourhoods with hard-to-treat houses.

We were delighted to welcome the Energy Secretary to Nottingham last spring to see how the neighbourhood model had been developed and the potential for future works. He visited the Bulwell Hall super warm zone, where solid wall insulation had been rolled out to 350 council and 352 private homes. That project helped identify the factors for success that were incorporated into the energy saving neighbourhoods proposal: a large-scale project attracting funding from an energy company; the role of NCH as a trusted intermediary for council tenants, overseeing resident liaison and ensuring quality; the key role of Nottingham Energy Partnership, a local trusted and independent organisation, in contacting every private owner and facilitating private resident engagement; and support from the city council’s planning department in developing an attractive insulation solution to suit the area. It also demonstrated the potential to support Nottingham’s local jobs plan, employing more than 200 people and supporting local employment and the development of the solid wall insulation industry.

Responding to Nottingham’s energy saving neighbourhoods proposal, the Minister wrote:

“I was delighted to see the ambitious proposals you have developed to deliver the Green Deal across Nottingham, in particular your plans for a neighbourhood wide approach fits our vision for the delivery of the Green Deal.”

Although we were unable to persuade the Minister to provide financial support for the energy saving neighbourhoods proposal, when the Department launched its green deal communities fund the following July, we were delighted to see the similarities to our plan. It seemed clear that in Nottingham we were already pursuing precisely the sort of innovative, cross-tenure, area-based approach Ministers were looking for.

The scheme was launched in Clifton in September last year under the branding, Nottingham Greener HousiNG, and was an immediate success. As I explained in last Monday’s estimates day debate, the scheme offered external wall insulation at an affordable fixed price based on property type, so private residents paid a contribution of between £1,000 and £1,300 depending on whether they lived in a bungalow, mid-terrace, end-terrace or semi-detached house. Most residents chose to fund their contribution using savings or via informal help from family and 10% took up the option of a loan from Nottingham Credit Union, which was low cost and could be repaid early without incurring a penalty. None chose to utilise green deal finance, even though the option was set out alongside others available.

The remainder of the cost—around 85%—was funded by British Gas as part of its energy company obligation. The insulation works were rolled out street by street across the Clifton housing estate, to council properties and privately owned homes alike. As residents saw their estate being transformed and heard neighbours describe their warm homes and lower bills, demand continued to grow. Within weeks, hundreds of residents had signed up and by the end of November more than 90% of council tenants had agreed to have the work done and there was 65% take-up in the private sector, with more than 1,000 private residents or landlords having signed up and paid their contribution towards getting the work done.

The feedback from residents was overwhelming. People told me that their homes were warm for the first time ever and that they were saving money and were excited about the improved appearance of the estate. Those signed up were impatient for work to start on their homes.

The Energy Secretary’s statement on 2 December prompted high anxiety in Clifton, and that anxiety turned to despair when British Gas used the opportunity of the Government’s policy change to pull out of the Clifton scheme. Last week, the other Energy Minister, the right hon. Member for Sevenoaks (Michael Fallon), responding to the debate, said that I had “suggested” that our Clifton scheme was

“a victim of the changes taking place in the ECO arrangements.”—[Official Report, 3 March 2014; Vol. 576, c. 722.]

I did not suggest it, I quoted the statement from British Gas in which it said,

“In light of the Government’s proposed changes to the ECO, it was necessary for us to review our current ECO contracts. These changes mean we can no longer fund some projects and unfortunately this is the case with our planned programme with VolkerLaser and Nottingham City Homes”.

It could not be clearer. The Minister’s Government’s ECO changes have led to the collapse of our energy efficiency scheme. As a direct result of his policy shift, hundreds of my constituents in Clifton who have paid for solid wall insulation do not know whether they will get it.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I will respond fully in my closing remarks, but I do not want the hon. Lady to scare or alarm her constituents unnecessarily. I spoke yesterday to the chief executive of Nottingham city council, and we are working closely with Nottingham on a new bid for our green deal communities. Although I cannot announce the result of that bid for our green deal communities fund, Nottingham has made a robust proposal that aims to deliver hundreds of measures, if not more than 1,000 measures, of the type the hon. Lady describes in south Clifton. Far from being dead and over, the south Clifton scheme has every reason to be optimistic.

[Lilian Greenwood]

I thank the Minister for his intervention. Unfortunately, my constituents are both scared and alarmed. They will, however, welcome his indication that there is hope for the scheme in south Clifton. There are many more people across Nottingham South who do not know if or when they will get the help they need with their fuel bills. They continue to live in cold homes that affect their health and the health of their children.

[Huw Irranca-Davies]

My hon. Friend is being generous in giving way. In answer to the Minister’s intervention, it is not only householders who are concerned. I have met companies in the midlands and elsewhere that have said that, because of the changes, they are rethinking where they invest and what they prioritise. Although the Minister’s announcement might be very welcome, there is now a hiatus, which is a classic symptom of the Government’s policies—they are having to rejig their thinking to catch up with a misfortune of their own making.

[Lilian Greenwood]

My hon. Friend is right. I will address the impact on employment and on businesses in due course. Nottingham will, unfortunately, continue to experience excess winter deaths and excess winter admissions to hospital as a result of cold housing. As he says, hundreds of people employed in our greener housing project are at risk of redundancy, and some have already lost their jobs. New apprentices who are looking forward to long careers installing insulation face, at best, uncertainty about their future. The young people who had completed their initial training and were due to start year-long apprenticeships leading to national vocational qualifications are now back in the dole queue.

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

My hon. Friend is making an important point. We all accept that programmes need to be fine-tuned from time to time, which is inevitable with any Government programme, but we have been told that more than 600,000 fewer properties will be dealt with under the hard-to-treat cavity wall insulation scheme. Apart from the impact on the people living in the houses concerned, taking away 609,000 properties will obviously have a major impact on businesses.

[Lilian Greenwood]

My hon. Friend is right. It gives me no pleasure to tell the Minister that those are the effects of his changes to the energy company obligation. Right now in Clifton, the contractor VolkerLaser is working at an incredible pace to try to complete work for all those residents who have signed up and paid their contribution, but the 9 April deadline, when British Gas funding ends, is fast approaching. The Minister knows that. He met me and colleagues from Nottingham on 22 January to discuss the crisis we face. He promised to raise the matter with the chairman of Centrica, British Gas’s parent company. Can he tell us today whether he has held those discussions? If so, what was the outcome?

I also wrote to British Gas following our meeting to ask it to consider a grace period for private customers who have suffered financially, thereby allowing their properties to be completed beyond the 90-day notice period. In his reply, Chris Weston, the managing director of British Gas, said

“we cannot commit to an extension of the termination period”.

Does the Minister agree that those residents who have signed up and paid should have their contracts honoured? If British Gas will not provide that funding, is he prepared to step in to honour that commitment and ensure that my constituents receive the work for which they have paid at the price they expected?

The Minister also said in our meeting that Nottingham city council should amend its bid to the green deal communities fund, which has been increased to £80 million, and we followed his advice. As I anticipated, we have not yet had success, but I remain hopeful after his earlier comments. Can he say when the next tranche of green deal communities funding is expected to be announced?

When the Minister met us, he also suggested that the Government’s announced increase in green deal cashback might help to fill the gap left by the reduction in ECO funding. A few weeks later we learned that green deal cashback could no longer be used alongside ECO. I simply ask the Minister how we can plan for the future and work with him to deliver the energy efficiency measures that our constituents need, and that we all want to see, without some certainty on the policy and funding framework within which we are operating.

The Clifton scheme, which we believe is the largest area-based approach so far, has enabled Nottingham city council to learn valuable lessons about what works. Councillor Alan Clark, the portfolio holder for energy and sustainability, has led the city’s work, and he concludes that, to be successful, a scheme needs to: address the issue on an area-by-area basis; apply to all tenures equally; pay for green deal assessments, avoiding risk and up-front costs for households; identify a fixed price for works to bring certainty to residents; engage specialist contractors of the highest quality; and engage local councils as a trusted broker. Above all, there must be a stable national policy and funding regime.

Phil Angus, the manager of Nottingham Energy Partnership, puts it more bluntly,

“the Government’s stop start approach to funding policy is sending businesses to the wall along with hard working families left in the lurch”.

He illustrates the point with reference to a typical Clifton property for which the funding support available has changed, or is due to change, every few months as a result of policy changes since last December.

Ahead of the green deal’s launch last year, the Minister described it as

“the most transformational energy efficiency programme that this country has ever seen—a programme that is built for the long term.”—[Official Report, 16 January 2013; Vol. 556, c. 983.]

Clearly, as my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) said, any scheme has to be reviewed and revised in light of experience but, as Phil Angus says:

“How is any small business connected to domestic energy efficiency services supposed to plan ahead and maintain consistency with customers, supplier and workforce…is this Government on the side of business?”

VolkerLaser, the contractor that has been delivering the solid wall insulation in Clifton, surely has to conclude that the answer to that question is no. Here is what managing director Mike Weaver had to say about the effect of changes to the energy company obligation:

“The recent events…and the uncertainty in the market have had, and will continue to have a devastating effect on the VolkerLaser business. We have had to suspend our forward apprenticeship scheme and staff recruitment programme, denying up to 50 young people the chance to get ‘a start’ in this industry.

The whole business has a cloud of insecurity hanging over it and for a Managing Director who started this business over 20 years ago this is particularly distressing. VolkerLaser prides itself on retaining good staff, with a large number of long serving employees enjoying their 20th year alongside me. It is now impossible to map out our employees’ future and it is inevitable that if current conditions persist, there will have to be redundancies.

Due to the collapse of the funding market it is now extremely difficult to plan a future order book. The proposed changes to ECO have swung the market so much in the favour of the energy retailers that even if funding becomes available, it will come with onerous conditions which will place enormous risk on contractors and clients alike.

No one in this industry believes they are owed a living, but it would be good for once to operate on a level playing field. Our staff and the residents of Clifton need some security and some reassurance that ECO is not just another flash in the pan. Or, to put it bluntly, yet another initiative the government asks thousands of people to spend millions of pounds gearing up for, only to see it decimated in one fell swoop.

The impact of the proposed changes to ECO, and in particular the 100,000 solid wall minima, will be significant and will undo all of the good work the partnership has achieved to date. 42% of the staff on the Clifton Greener HousiNG initiative are residents of Nottingham; ten apprentices have been inducted so far and are now working towards a nationally recognised qualification; and countless sustainable job opportunities have been created with local SMEs.

With a doubling of the minima to 200,000 measures (or 8 million tonnes equivalent) thousands more residents will be guaranteed a reduction in their fuel bills and be afforded the opportunity to live in warm and energy efficient homes. With the certainty of funding going forward, more and more employment opportunities and apprenticeships would be generated for the benefit of Clifton residents and the local economy.”

I do not doubt that the Minister wishes to see more energy efficient homes; what I doubt are the policies and funding support he has put in place to deliver on that aspiration. He says that the ECO will lead to insulation of at least 25,000 solid wall properties a year, but at that rate it will take 304 years to complete the task. Although he ramps up green deal cashback to persuade people that they want to take up energy efficiency measures, his funding changes are denying energy efficiency measures to my constituents who desperately want them. That simply is not good enough.

As Sally Longford, one of Ilona’s local councillors in Nottingham, says:

“Many of my elderly residents living in the Wollaton Park estate cannot keep warm without paying ridiculous amounts to the energy companies. Even then cold patches on the walls attract condensation and mould, they deserve better.”

She is right. What hope can the Minister give me that they will get it?

[Nadine Dorries (in the Chair)]

Order. At the moment there are about eight minutes each for those who want to speak.

15:20

[John Pugh (Southport) (LD)]

Thank you, Ms Dorries; that will be ample.

I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on her timely and effective presentation of the problems with the energy company obligation. I am increasingly in despair, and not just because of being a Liberal Democrat. I should like to be able to say that the green deal is great, and the ECO scheme is perfect, and that I support every detail of it without criticism or quibble; but I cannot. I should like to be able to say that the Government correctly understand the problems being experienced by people in the ECO scheme and that they are thoroughly engaged and are ironing out possible difficulties; but I cannot quite do that. I am grateful that the Minister responding to the debate is the right hon. Member for Bexhill and Battle (Gregory Barker), because if anyone can solve the problem he can.

I should love to be able to say that everything that is involved in managing a market composed of myriad private suppliers and big corporate giants, to environmental effect, is easy, but it is not. It is difficult, and I sympathise with the Minister. However, like him, I have lived through the solar panel trauma, when schemes hit the buffers and businesses crashed, projects were caught and there was boom and bust—white van man trying to cash in and good schemes being trashed or abandoned. I think that we all learned a lesson from that: in the green business, predictability helps an awful lot. We seem to have a similar problem now, although it is not necessarily the one that the hon. Member for Nottingham South touched on. I want to talk about the problem that the ECO scheme is creating for boiler suppliers—a topic that I have become familiar with simply because suppliers have brought it to my attention.

The phenomenon is similar to what happened with solar panels. There has been an increase in the number of suppliers and installers—I have looked at the Government stats—followed by what currently appears to be the sound of businesses collapsing and the stalling of installation.

[Gregory Barker]

If we could replicate for insulation what happened in the solar industry I should be extremely delighted. The fact is that since we took those difficult decisions in 2011 we have reached the point where nearly 3 GW of solar are installed; almost 500,000 roofs have solar, compared with 15,000 in 2010; and we have the highest growth prospects for solar, with the cheapest installations, anywhere in Europe. Solar in the UK is a huge success, because we cut costs, bore down on the expense to the consumer, and as a result are getting genuine commercial deployment.

[John Pugh]

I am delighted that the Minister can tell me that. I am a great enthusiast for solar panelling. If he can solve the problems with boilers I shall be even more in his debt.

It seems to me that the Government are not quite to blame for the problem I have outlined. It is almost an unintended consequence of the Labour fuel pledge, which led to a bit of a media panic about the green levy, which led to discussions between the energy companies and the Government. There may be some tacit agreements between the Government and the big six. I know not—it is above my pay grade. However, it is true at the moment that the big energy companies are substantially reducing their funding for boilers, from 25p per pound lifetime savings to something like 8p. The drop is sudden and dramatic.

There is some evidence that those companies do not want referrals, particularly in connection with fuel poverty. I am in possession of a letter from British Gas to Sefton, my local authority, which basically says “Don’t send us any more work at the moment. We are simply not going to commission it or progress it.” There is some evidence that some big companies have stopped commissioning altogether, and there is no doubt that the price has crashed. How should a small boiler supplier react to that? If he is severely exposed he goes bust; if he is very canny or unscrupulous he can start to fit boilers of substandard quality, which will not last, and will eventually need to be repaired and replaced. Another thing that he could do is target carbon savings rather than fuel poverty.

A large part of my constituency consists of Edwardian housing, with solid walls. We also have many old houses of the maisonette type, with old or no boilers. In those houses are many elderly people, including widows living alone, and the like. Companies in my constituency once did the jobs needed in such houses, but they no longer do them because they cannot be done without some financial support being offered; and customers in fuel poverty are precisely the ones who cannot do a deal of that kind. In rare cases that I know of, the company exercises a degree of charity and takes a hit on the job. I also have evidence that in some hard-to-treat large houses—we might call them mansions—where there is someone who meets the qualifying criteria in some way, the job will pay; obviously, putting a boiler into those places gives a substantial carbon saving and brings a better reward from the energy companies. A genuine case that was featured on “File on 4”—or it may have been “You and Yours”; I forget—involved a premier footballer profiting directly from the ECO scheme.

Clearly, something is wrong. I am not an expert—I know that there are experts present for the debate—but I know people who are. People in the trade tell me things and I am inclined to believe them. Deborah Judd, who runs a firm in Darlington, writes:

“It is so disheartening having to turn clients down who are exactly the sorts of people who need it. We’ve been going 20 years in June and now we just don’t see a future…In some cases, you can get paid £12,000 for fitting a boiler in a large house because the energy efficiency saving is so large. Realistically, that person can afford to replace their boiler themselves. We could fit 5 boilers in homes where people are in real need for that amount.”

I have similar evidence from a supplier in Blackpool, and from assessors and so on. People who appear to know tell me that there is a problem, and that it is analogous to the one that the Minister solved à propos of solar panelling.

Perhaps I can offer the Minister a solution rather than a problem. He needs to talk not to me, a relative ignoramus on the subject, but to the people who bring the problem to me, who are in earnest and have a genuine problem. Importantly—and this issue has come up previously—during the spring we must monitor how fuel poverty is addressed. Clearly, the targets might slip a long way before anyone notices. I suggest that because of the reduction applied by the gas and energy companies there is a perverse incentive to target big houses and big carbon savings, rather than people in fuel poverty.

My final point, and the point that will haunt the debate, was made by the hon. Member for Nottingham South when she summed up: we need stability in the market. If we are to get many small businesses working regularly to good effect with large corporates and funders—in this case the energy companies—and if we are to solve the problems of greenhouse emissions and fuel poverty, we shall need a strong element of stability and predictability in the market. I am concerned because at the moment the suppliers I know and talk to do not think we have that.

15:28

[Dr Alan Whitehead (Southampton, Test) (Lab)]

The starting point for the debate must be the notorious Prime Minister’s Question Time at the end of November, half way through which he announced that there would be a green levy review. Sure enough, there was one; only, because it appeared that the review was thought of about two minutes before Prime Minister’s Question Time, the green levies were not reviewed but stayed roughly as they were. ECO was reviewed instead, and the result is that we are where we are now.

The document put out by the Department said:

“One of the major challenges for the ECO and Green Deal is the changing nature of the types of measures that need to be delivered. CERT, by focusing on delivering low-cost measures, has been very successful at installing simple loft and cavity wall insulation. From 2012 Green Deal finance will offer a route to deliver the remaining low cost loft and cavity wall opportunities at no upfront cost and without need for subsidy. However to meet our carbon budgets cost effectively, we will need to go far beyond just lofts and cavity walls, and move towards the next most cost effective measures.

However, some 7 million of the most difficult to treat homes require some form of solid wall insulation. The Committee on Climate Change recommended in their 2009 Report, ‘Meeting Carbon Budgets – the need for a step change’ that 2.3 million solid wall homes will need to have taken up solid wall insulation by 2022 in order for the UK to be on track to achieve carbon budgets. ECO support for these properties will help drive this market, and the supply chain to fulfil it, enabling us to unlock the resulting carbon savings more cost effectively.”

That was the prospectus that people bought into when they started doing work on ECO. In that context, the process of the review has been interesting, because it effectively boiled down to ECO having to take the bullet. In quick order, it was announced on 2 December that there would be substantial changes in how ECO would work, without an impact assessment. Only now has a consultation paper been released. It says that a number of the proposals have already been announced or foreshadowed in the Government’s announcement on 2 December. I am reminded a little of the referendum in Crimea, where first the outcome is announced, then a consultation is held on what the announcement should be. The measures in the 2 December announcement, which essentially stretch out like a lump of pizza dough the annual overall commitment of some £1.3 billion from two years to four years—however it may be wrapped up in decisions to borrow from some parts of the ECO programme to maintain others—starve elements of ECO of resources, particularly the carbon emissions reduction obligation.

That announcement, however, was wrapped up in something of a complication, because ECO finances are predicated on the achievement by obligated energy companies of a carbon obligation—that is, the obligation is discharged by the amount of carbon saved by the measures undertaken—and the estimated overall finances relate essentially to what it will cost, collectively, for that overall obligation to be discharged. Treatment costs for each hard-to-treat property, for example, add up to a cost per tonne of carbon saved, and if the companies have to discharge that obligation within a set period—initially for ECO, that is 2015—the price paid for each tonne saved will logically be higher than if the same level of obligation was over a more extended period.

Another issue is the extent to which the programme admits of access to measures, which, by their nature, allow for savings to be made at a lower cost per tonne of carbon dioxide saved. Those measures, however are supposed by and large to be covered by the green deal, whereby the cost of loans for measures is recovered from bills. As the original Department of Energy and Climate Change document says, ECO should be concerned only about the measures that go beyond those treatments. However, if such measures are allowed to count for ECO’s purposes instead of green deal purposes, inevitably a carbon obligation can be discharged by concentrating on those measures, rather than on the hard-to-treat homes specified in the original DECC document on ECO.

Indeed, the consultative document published last week recognises that. On page 28, it states:

“Taken together, the proposals are likely to see a greater focus on cheaper, easier measures and a correspondingly diminished role for Solid Wall Insulation in ECO delivery.”

It continues:

“However, the Government is clear that SWI represents a major challenge for the nation’s housing stock, with nearly eight million households of solid wall construction, of which only 3% per cent have wall insulation.”

The Government set a sub-target for solid-wall insulation that is about half the estimated target in the original ECO plans.

Of course, no one told the dozens of local authorities, housing associations, and insulating companies that that was in store. Trusting the word of the Department, they did exactly the right thing in getting the best result possible from the areas that ECO was supposed to concentrate on, namely the uplifting, area by area, of those hard-to-treat homes, using their local skills and considerable efforts in developing partnerships to do so. After all, we know that area uplift worked well under the community energy saving programme and the carbon emissions reduction target. There were better results overall in value per treatment—a large chunk of the target was reached area by area—than by searching randomly for individual properties to uplift.

I will add our local programme in Southampton to the pot. In November 2013, the council announced a £30 million programme to make energy improvements to more than 2,000 council properties in Southampton over the next 18 months. It included cladding of high-rise buildings, cladding of system built non-cavity homes, and a district heating scheme alongside. That would, by the way, create between 600 and 900 jobs, as well as safeguarding 300 jobs locally. That was a partnership between the city council, a property services company and an obligated energy company. That was all very rosy, except that as soon as the Government announcement was made and it rapidly became apparent to energy companies that the obligations as previously constructed were being thrown out of the window, they drew back from progressing the scheme. It may be that some of the programme can be saved, but the prospects of thousands of residents of Southampton having possibly life-changing reductions in their energy bills in the near future, of some of the worst insulated properties in the city being transformed and of carbon efficiency in buildings in the city taking a leap forward are possibly wholly and at least largely off the agenda right now. It is the same in many other places across the country.

[David Mowat (Warrington South) (Con)]

I am listening carefully to what the hon. Gentleman is saying, and he is making some good points. He is talking as though the ECO—or the CERO part of the ECO, which I think is the thrust of his comments—has been totally revoked. What has happened, however, is that it has been extended by two years. The fact is that we were at 7% completion after 67% of the time period. In a sense, are the Government not just reflecting what is happening on the ground in a sensible way and allowing things to happen a little more slowly? That could be called a failure, but it is sensible, notwithstanding what we heard about Nottingham. I did not follow what was said on ECO versus the green deal. I also do not understand the thrust of the hon. Gentleman’s comments.

[Dr Whitehead]

The hon. Gentleman misses the point about the carbon content of ECO and how that is stretched out over the time period. Energy companies can therefore decide that they do not need to undertake the obligation in the way they did previously. That is the crux of the matter and that is why the target has gone down from having 180,000 solid-wall homes by 2015 to having 100,000 by 2017. Even with those changes, it would have been possible to keep that carbon content by not invading the green deal with the changes to the proposals and by having a front-loaded system, which the Department could have worked out.

[David Mowat]

I did understand that. The part of ECO that has been extended and strengthened is the part that looks at those in particular fuel poverty. The middle section, the carbon saving community obligation, has been strengthened. The hon. Gentleman is right that the CERO has been weakened, but that just reflects reality.

[Dr Whitehead]

The CSCO has not been strengthened. It has been stretched out at the same level over a longer time at the expense of the CERO, which has had to fund most of the money to enable the CSCO to remain even at its previous level. I do not understand whether the Department understood what it was doing when it made these changes. If it understood, stood by and did not put any remedial measures into the consultative document, it wilfully let a large section of ECO fly out the window, along with all the previous targets. If the Department did not understand what it was doing, that is possibly an even worse prospect. Either way, the programme could have been saved with a slightly different way of revising the ECO programme, but the Department allowed a large proportion of the work on solid-wall insulation and hard-to-treat cavity homes—we all know that they are an absolute imperative target for the country over the next period—simply to go to waste.

I hope that a number of these programmes can be retrieved in one way or another, but the fact is that we now have an ECO that is a shadow of its former self. In the process, it has left large numbers of people in hard-to-treat homes. Local authorities, housing associations, companies and people who thought they would get jobs are all bewildered as to what will happen. That cannot be a good outcome, when the review was supposed to ensure that affordable energy would be coupled with even more affordable energy through the insulation programmes. The final, savage irony is that a programme to save people a lot of money on their energy bills has been thrown out of the window by a green levies review that was supposed to save some people money on their energy bills. I hope we will not forget that when we debate this issue. I hope that the Minister can explain exactly what his Department was doing when it undertook the change and whether he will contemplate undoing some of these changes, so that the programmes can at least partly go ahead to do what they were originally intended to do.

15:39

[Graham Jones (Hyndburn) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate my hon. Friend the Member for Nottingham South (Lilian Greenwood) on her tenacity and on securing today’s debate.

In the brief time available to me, I want to concentrate on my constituency and the businesses in it. Hyndburn has some of the oldest, coldest housing stock in the country. Hyndburn council recently launched a warm homes energy company obligation scheme that is now under threat before it has even begun. The businesses in the green economy in my constituency that were innovating and creating jobs as result of the ECO are now concerned about their future and the ECO’s future funding.

The ECO is of particular help to places such as Haslingden and Hyndburn and cutting or even rolling back the scheme will have a disproportionate effect in a constituency such as mine. There is a perverse reality to the Government’s action in that the rolling back of the ECO will help my constituents not by insulating their hard-to-treat homes and saving them thousands on heating bills over decades, but through a comparatively small reduction in their heating bills.

Hyndburn has some of the poorest quality housing stock in the country, with 41.5% of total dwellings built prior to 1919—well above the English average of 23.6%. Some 60% is old, terraced stock and includes hard-to-insulate, Victorian, stone properties. The historic stone façade prohibits external insulation and insulating inside walls is difficult. How do people insulate the inside wall of a rear kitchen or a bathroom, let alone around bay windows and doors? The scale of the problem of cold homes in Hyndburn is chronic.

As a result of the age of the stock, 50.2% of category 1 hazards in Hyndburn are due to excess cold. Of category 2 hazards, the number of properties suffering from excess cold is a staggering 78.5%. Hyndburn borough council’s 2009 housing condition survey noted a 24.5% rate of thermal discomfort compared with the English average of 18.3%. As a result, fuel poverty, as one would expect, is at 20.4% compared with the English average of 13.9%.

The housing stock in my constituency is exactly the kind that is most in need of insulation and energy-efficiency measures. According to studies, nine out of 10 stone terraced properties of that age have hard-to-treat cavities that would benefit from the ECO. The prevalence of hard-to-treat cavities in Hyndburn is precisely why the ECO presented such an opportunity to my constituents and other local councils across east Lancashire to tackle insulation, fuel poverty and the UK’s climate change obligations. My constituency is a beneficiary of an ECO scheme, but the recently launched “Warm Homes Hyndburn” is now under significant threat.

Benefits come not only from insulating individual properties. Isothane Ltd—one of its directors is here today—is an innovative company located in Altham in my constituency and is a market leader in the insulation of hard-to-treat cavities. One of its products, a high thermal insulating foam with high bonding qualities, offers the insulation market a world-beating product. If supported, that type of company and product in the green economy can provide innovation and future green jobs.

The company is fully behind the National Energy Foundation’s opposition to the ECO reforms. The NEF believes that cuts to the ECO will mean not only poorer health conditions for people living in the uninsulated homes found in my constituency, but job losses in the energy efficiency industry. Isothane Ltd is engaged in several local authority projects that are in receipt of ECO funding and a reduction in such funding will clearly and directly impact on the company. The company and the industry are being hit not only by reductions in the ECO, but by how the ECO is funded, which is creating a huge disincentive. It is a double whammy. Mervyn Kirk at Isothane told me that

“Isothane has received no funding whatsoever for the work undertaken so far in preparation; publicity materials, canvassing and surveyors’ costs have all been paid direct”

by the company. He continued:

“All ECO funding is claimed retrospectively, so any work undertaken in schemes such as this is at considerable expense and risk to the installer.”

That is an important point.

The insulation industry had been given a clear incentive and direction of travel by the Government and had begun to invest and to create employment. By letting energy companies off the hook, however, the Government have created uncertainty and, according to the National Energy Foundation, have put thousands of jobs at risk. The Government took the decision on the questionable premise that it will lead to energy bill savings. Why have the Government injected uncertainty and then proceeded to hold a retrospective consultation? Are they considering abandoning the reductions and reversing the policy or is the consultation a simple rubber-stamping exercise? The situation is resulting in misery for those people living in hard-to-treat properties in Hyndburn and Haslingden. They will no longer get insulation and will continue to spend way above the national average on energy bills; they are effectively being punished for living in such properties.

Mervyn Kirk also said:

“In general, when ECO funding levels were around £85+ per carbon tonne, the majority of properties were able to have specialist insulation installed at no cost to the occupant as long as we were able to encourage neighbouring properties to sign up, i.e. blocks of 3 or 4 properties together…but as funding dropped to around £60 to £75 per carbon tonne, this became unworkable. The funding levels have since plummeted further and there is no confidence about levels of funding for ANY hard-to-treat cavities beyond the end of this month.”

For the record, the month in question is March 2014—this month.

I was told recently by Michael Morrall of Dyson Insulations, which was managing the ECO project in Hyndburn and installing insulation, that because the borough of Hyndburn is so densely stocked with properties of random stone cavity construction, the hard-to-treat carbon emissions reduction obligation of the ECO previously made insulating cavity walls a “fantastic opportunity” to make a change to people’s lives. Cuts to the CERO obligation have driven down the available funding, which has drastically changed the viability of installing the measures without a substantial contribution towards funding shortfalls from occupiers or local authorities. It is worth putting on the record that Hyndburn council has experienced some of the deepest cuts in the UK and is one of only seven authorities to be given a temporary rebate to cap the cuts at the maximum possible, so I do not know where local authority funding will come from.

Mervyn Kirk of Isothane Ltd also said to me:

“As the available funding levels have been gradually reduced by the energy companies, the ability for us to offer free specialist insulation to address fuel poverty and improve energy efficiency standards in traditional terraced, stone-built property has become less and less viable. Hence the current situation where homes have already had surveys undertaken, but we can only install where the gap between ECO funding and costs are met elsewhere. In the Burnley target area”—

Burnley is a neighbouring authority of Hyndburn—

“there are too many properties requiring additional funding to be able to stretch the limited resources available.”

In effect, that means that the scheme will be wound down before it has started. In a deprived area with a cash-strapped local authority and stone-built terraced properties, that could effectively kill off the scheme.

The situation stands in stark and embarrassing contrast with what the Government have said previously. In a letter that I received late last year, the Minister stated, particularly of the “Warm Homes Hyndburn” scheme:

“These are just the sort of projects that will be required to tackle the challenge of effectively insulating hard-to-treat properties.”

Fast forward just four months, however, and the Government are actively and knowingly taking steps that take us in the opposite direction and make it more difficult to achieve energy efficiency in my constituency’s housing stock. It has been a monumental shambles from the Government—the only things that have been injected are cynicism, confusion, disappointment and anger into those affected by the changes. Why has the Minister’s position changed in the short time between writing to me before Christmas, when he said that such a scheme was required in Hyndburn, and now, when he is overseeing its whole demise? Did he consider the effects that such changes would have on constituencies such as mine, or was that just an afterthought?

I must finish on this. Did the Minister see “Newsnight” two weeks ago? It showed some of the worst housing in Britain in Hyndburn. I am sure that all who saw that were shocked that such conditions could exist in this country. People on benefits were living in stone-built terraced properties with rising damp and cold in every single room. Every window and every door was mouldy. Will the Minister come to Hyndburn to understand why the old ECO scheme was so important to my constituency? Will he visit Isothane Ltd to see the opportunities that the green economy brings?

15:50

[Kerry McCarthy (Bristol East) (Lab)]

I congratulate my hon. Friend the Member for Nottingham South (Lilian Greenwood) on securing the debate. As other speakers have identified, unless problems relating to proposed changes to the energy company obligation are quickly addressed, there is a real danger that it will not help the households that it was set up to support. In the limited time I have available, I would like to mention concerns raised with my office by Toby Parker, the chief executive officer of Sustain, a successful Bristol-based small business that, as part of a range of services, delivers energy-efficiency programmes across the country under the energy company obligation.

Sustain was a leading provider under the previous energy supplier obligation regimes: the energy efficiency commitment, the carbon emissions reduction target and the community energy savings programme. When those came to an end, it invested in preparing for the ECO and the green deal. It recognised that getting those programmes up and running would take time, but, in the words of its chair, Julie Baddeley, in a letter to the Energy Minister last year, it took

“much longer, and was more complex, than any of us had envisaged”.

About 5,500 jobs were lost in the insulation industry nationally as a result of the poor transition from CERT and CESP to the green deal and the ECO, and a number of firms went to the wall. The constant chopping and changing causes considerable uncertainty in the sector. The Department of Energy and Climate Change has acknowledged that the recent proposed changes are creating uncertainty, which is affecting delivery on the ground and has resulted in a contraction in demand. That particularly affects areas outside London and the south-east, such as Bristol, where the market comprising small and medium-sized enterprises and sole traders is important for job creation and economic growth.

The energy companies are trying to reduce the costs of their obligations under the ECO, which the Government hope they will pass on to the consumer by reducing energy bills by between £30 and £35. Sustain, which is currently in contract negotiations with the energy companies, tells me that companies are stamping down on the price that they have to pay for carbon. Its chief executive says that the price is being pushed so low that it could have serious unintended consequences. First, it could reduce the quality of installations. He says that companies that work in a quality way will struggle to achieve results in that budget, which will, no doubt, lead to more complaints about poor quality work.

Secondly, the chief executive is concerned that, in all probability, customers benefiting from the carbon savings community obligation or the home heating cost reduction obligation will be expected to pay more towards the cost of those schemes, as the measures are not fully funded. He says:

“whether intentional or not, this will happen”.

Will the Minister provide assurances that that is not the Government’s intention and, if so, what steps he is taking to address that problem? Mr Parker says that, in an industry reeling from shocks, people are putting in suicide bids. In order to survive, companies are willing to deliver at those rates, but he doubts whether it is possible to have high-quality carbon reductions at rock-bottom prices.

Critically, Mr Parker has serious concerns about the effect of Government changes that have both reduced the CERO target for energy companies by 33% and also made it easier to achieve that target. That is pushing down both the volume and the price, with the result that many energy efficiency companies are questioning whether they can make the scheme work. He feels that either one or other of those changes would have resulted in a significant price reduction, but both taken together could pull the rug out from under the energy efficiency market. Has the Minister received similar representations from other companies? I am sure that Sustain is not alone in its concerns. What steps is he taking to resolve those concerns?

I would like to finish by making some wider points about the likely effect of the proposed changes to the ECO, which reflect some of the concerns raised by my colleagues. I am concerned that the problems derive from the Government’s decision to focus on reducing green levies on energy bills in response to the challenge set by Labour’s proposals for cutting energy bills. Essentially, the changes let energy companies off the hook as they do not need to spend a penny on delivering savings to the consumer. In fact, they place them in the driving seat in pressing for reductions to their obligations under the ECO, as it is for them to decide how much of any savings they make will be passed on to the consumer in reduced energy bills.

Changes to the ECO also fail to address one of the key reasons for energy prices, which is the fundamental lack of competitiveness in the energy market. We already know that the ECO is overly bureaucratic, poorly targeted and helping far too few homes. It is not sufficiently focused on those households that need it the most: less than half its funding actually goes to people in fuel poverty. The proposed changes will not improve that situation. The measures under review in the consultation suggest that the ECO will continue to favour those who can afford to part-fund measures, as well as those with larger properties.

The Government’s two flagship energy efficiency policies, the green deal and the ECO, are simply not strong enough devices for improving the energy efficiency of Britain’s housing stock and tackling fuel poverty. In the UK, we have some of the most draughty, poorly insulated housing stock in Europe. Statistics from the shadow DECC team show that a home in Dudley uses four to five times more energy than a typical house in Malmo, Sweden, where the temperature is 7° C colder on average. Figures from the Bristol-based Centre for Sustainable Energy show that there are 5,857 households living in fuel poverty in Bristol East alone.

Shamefully, 31,000 people died needlessly during the winter of 2012-13, 80% of whom were among the over-75s. That was a 29% increase on the previous year and it was estimated that a third of those deaths were caused by homes that were not warm enough. We have been lucky that this winter, although very wet, has been warmer so far.

As part of the recent cold homes campaign, I heard shocking stories from constituents. Some faced impossible choices between heating their homes and eating. I heard from one woman whose husband is extremely ill. Cold homes not only particularly affect people with a health condition, such as her husband, but deny people the most basic of comforts. In her e-mail, she said:

“all we would like is to be warm in our home”.

In this day and age, I do not think that that is too much to ask.

15:57

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship once again, Ms Dorries. I pay tribute to my hon. Friend the Member for Nottingham South (Lilian Greenwood) for securing this important debate. She is passionate about this issue and she was eloquent about what the Government’s changes to ECO have meant for her area. She was kind enough to invite me to visit the work in Clifton that she described today, which was a brilliant scheme. It was cross-tenure and cost-effective, it looked beautiful and it created local jobs. The only problem was that it was ending, owing to the decision the Government took before Christmas to cut back on ECO. At a time when so many people are concerned about rising energy bills, Minister, how can it make sense to cut back on insulation and energy-efficiency measures?

I welcomed the Minister’s earlier intervention. We should be clear that people who signed contracts in good faith but who have had those revoked owing to changes in Government policy should get that work done. Either the energy company should honour the obligation that it signed up to, or the Minister should step in to ensure that that work is done.

However, we know that the green deal for communities, or whichever funding pot the Government wish to use, simply cannot plug all the gaps created by the announced changes. A number of extremely good speeches today have highlighted the problem. I am sorry to hear that the hon. Member for Southport (John Pugh) is feeling depressed, although I note that there was a Liberal Democrat conference at the weekend that is almost certainly to blame for that. He raised a crucial issue: the functioning of the brokerage. That is slightly beyond the remit of the debate, but if the brokerage is providing prices to do a boiler job for less than £1,000 and, if at present, the rate is at 6p per £1 saved, that work cannot be done without either a contribution coming from the person receiving the work, or the work simply not being done to the requisite standard.

My hon. Friend the Member for Southampton, Test (Dr Whitehead), with his customary expertise, traced the fingerprints of blame to the notorious Prime Minister’s Question Time and the review of green levies. There is no doubt that this is one of the worst examples of policy being made on the hoof, with serious ramifications for people up and down the country.

My hon. Friend the Member for Hyndburn (Graham Jones) raised in particular some of the innovation in hard-to-treat cavities and the work of Isothane, a company with which I am also familiar. The Minister often says that he wants to create a market to end energy efficiency being generated simply by subsidy. I say to him that the innovation is taking place but will be undermined by the changes that are going through.

My hon. Friend the Member for Bristol East (Kerry McCarthy) talked about job losses and the impact of the changes on SMEs. She articulated well the genuine sense of desperation that now exists because of the changes. Following the autumn statement I was disappointed by how the Minister and others in Government defended the changes, which have undoubtedly caused thousands of people to miss out on work that they were promised, and many people to lose their jobs, as well as causing consternation to businesses that have taken investment decisions based on Government policy. I would like the Minister at least to acknowledge the hardship that has been created. Selling the changes as a simple extension of the policy or a way of offering greater certainty to industry is, frankly, an insult to those people who have been adversely affected.

The only people who seem happy about the changes are some of the energy companies—I say some, because there are some that have been extremely good on reaching their obligations under the scheme. In the main, however, the changes are poor and short-sighted. In the brief time available, I will use the Government’s own impact assessment to outline just how bad the changes are.

The biggest change the Government have announced is on solid-wall and hard-to-treat properties. I think this information will answer the questions raised by the hon. Member for Warrington South (David Mowat). The Government have not just reduced the CERO target, but have allowed cheaper measures to fulfil that obligation and added a permitted carry-over from over-delivery on previous schemes. The result is that ECO will not now deliver much at all for hard-to-treat homes.

I find it baffling that the Government have decided to make changes to the part of ECO that was beginning to show signs of progress, and that covered schemes such as the area-based scheme in Clifton, to which my hon. Friend the Member for Nottingham South introduced us. I ask the Minister to think back to our early exchanges on ECO. It was those sorts of schemes, surely, that he was citing in its defence. I know he is a fan of area-based schemes. There are obvious advantages in delivering energy efficiency on that scale—the costs are lower and more people take up schemes when they see the scaffolding go up. What is his assessment of how the changes will affect schemes such as those?

[Huw Irranca-Davies]

My hon. Friend makes an important point. There has been a great deal of talk about large-scale, area-wide schemes, but there are other aspects that the Government ought to be supporting, such as the co-operative approach. I recently visited south Staffordshire community energy scheme, which worked in concert with the Energy Saving Co-operative and Lichfield district council. It focused on four properties initially but had a plan to roll the work out. There was tremendous success for the initial four properties, but that group is waiting for the Minister to give clarification before it can do any more, and so has stopped. The stability has gone.

[Jonathan Reynolds]

I absolutely agree with my hon. Friend. I know that when the Minister responds he will say that the minimum target set for solid-wall insulation is just a minimum and could be exceeded, but, quite frankly, if we look at the cumulative impact of the changes, no more than that statutory minimum of solid-wall jobs will be done. I raised that point with him when we considered the Lords amendments to the Energy Bill and also at the most recent Energy questions. The impact of the changes means that the number of solid-wall jobs that are done will not be anywhere near what is needed.

As many Members have said today, that is a major problem for the UK, and no one will solve it for us. The Minister modestly suggested that he was responsible for the boom in the solar industry, and I agree that what has happened on domestic solar installations is absolutely brilliant—I am trying to get some solar photovoltaic panels on my own roof. He would surely admit, however, that part of that success has been the drop in unit costs that has come from other countries getting involved in manufacture, particularly China. That will not happen with solid-wall insulation or any hard-to-treat insulation. That is a problem for which we have to find a solution in the UK.

If the Committee on Climate Change wants us to do 200,000 solid-wall jobs a year, 25,000 a year is simply not good enough. My hon. Friend the Member for Southampton, Test hit the nail on the head when he said that if we look at the objectives, the key issue is that ECO was created to do that hard-to-treat work. The policy is constructed around starting to meet that challenge, yet mid-programme the Government have now changed the objectives, leaving us with a bit of a mess.

[David Mowat]

I cannot let the hon. Gentleman go much further after his comments on solar. We have heard so much today from the Opposition about fuel poverty yet every time there is a Division in the House on whether we should take an option to reduce or increase energy bills, Opposition Members always vote for higher bills. Solar PV was a great example of that: when the Minister tried to reduce the solar tariff from six times grid parity to four times grid parity—something we did two years ago—to a man and woman the Opposition voted against the measure. Yet now they stand up and talk about fuel poverty. It is not rational and it will not do.

[Jonathan Reynolds]

If we got into an extensive debate about the solar industry I am sure you would rule me out of order, Ms Dorries. If the hon. Gentleman is concerned about affordability of energy bills, one way that we can guarantee that bills will come down is if people use less energy. That objective is delivered through energy efficiency measures, insulation and the kind of work that was going on in Clifton until the Government made the changes. To withdraw from that work in order to deliver cheaper bills is surely illogical.

[David Mowat]

I completely agree that greater energy efficiency is the best way of reducing energy bills. We are an outlier in terms of the efficiency of our housing stock—although not in terms of our energy costs, which makes the Opposition’s freeze proposal even more opportunistic. The point I was making is that whenever we vote on energy costs the Opposition vote for them to be higher and as a result are not credible.

[Jonathan Reynolds]

I completely disagree. We could and should have a lengthy debate about energy companies overcharging as that issue is obviously there—people can see that and our policy is designed to rectify it. That makes the changes to ECO even more illogical. The Government have reacted to our policy, which is sensible and which a lot of people like a great deal, by trying to cut back on energy efficiency, to try to claim that energy bills will be cheaper. If the Government are serious about lowering bills, surely the obvious way to do that is to continue with energy efficiency measures. It is illogical for them to cut back on efficiency to claim that they are saving people money on their energy bills.

In the time available I will address two further points. My next point is about the impact the changes to ECO will have on jobs. The impact assessment predicts that there will be between 7,000 and 14,000 fewer jobs as a result of the changes. That has already begun to happen and a lot of companies have already contacted me about the measures they have had to take. In particular, apprenticeships have suffered a great deal—that is certainly the case in Nottingham. When I visited a scheme there, the apprentice I saw was working on his own property—a marvellous bit of PR from the scheme, but it was brilliant to see such work taking place. Those people should have lengthy careers ahead of them, given the amount of work we need done by the industry they have gone into. For them to miss out or lose their jobs because of Government changes to policy is extremely unfair. So far, the Government have not acknowledged the impact on jobs at all, despite the fact that the impact assessment does. I hope the Minister will comment on that.

The changes severely reduce the Government’s commitment to tackling fuel poverty. When CERO was predominantly concerned with delivering solid-wall and other hard-to-treat measures, the funding would naturally have gone to low-income areas, in particular social housing estates built at a certain time to certain construction standards. However, now that low-cost measures are to be included, will the Minister say what safeguards will be put in place to make sure that the funding does not go to households that could afford to pay? That would be incredibly disappointing, given that one of the already disappointing features of ECO was its modest ambitions for reducing fuel poverty.

The Government are simply not ambitious enough about energy efficiency. The energy companies know that the Government will not hold them to account for failing to meet their obligations. I note in particular that whereas before the changes a fine could be levied on energy companies for failing to meet their targets, they will now no longer face a fine, but simply a rule-based system for increasing targets. It seems that the energy companies will be let off the hook again.

The changes to ECO are poorly judged and fatally undermine much of the original purpose of the policy. I do not accept or understand the Government’s claim that they will lead to a bill reduction of £35. The changes will have severe ramifications for the green deal. The failure of the green deal and ECO to dovetail as they were intended to—their “limited blending”, as the impact assessment puts it—serves only to highlight that further. The Government have again caved in to the energy companies when instead they should be rectifying the serious problems in our energy market, and ensuring that we meet the challenge of improving the UK’s dreadfully insulated housing stock.

The people losing out from this decision by the Government, whether in Nottingham or Southampton, or the other examples given by hon. Members today, are often those who need help the most, and who have been told they were going to receive it, only to learn that the Government have let them down again. The figures are stark: 14,000 lost jobs, 440,000 fewer homes insulated and 2.2 million tonnes in carbon savings forgone. The ECO is this Government’s policy, the changes are this Government’s changes, and the consequences, be they in lost jobs, work that now will not take place or the decimation of the solid-wall supply chain, are also the responsibility of this Government. Ministers have got it badly wrong. They need to accept that and think again.

16:09

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

It is a pleasure, Ms Dorries, to serve under your chairmanship today. I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing this debate and creating an opportunity to discuss our policy on driving home energy efficiency in some of the most difficult to treat properties and some of our poorest and most vulnerable households. She and I may not always agree on the best mode of delivery, but I admire her tenacity on this issue.

I want to reiterate the point that I made in my earlier intervention. I am not in a position to offer guarantees or to spell out details today, but I had a positive conversation with the chief executive of Nottingham city council yesterday. I am pleased with the constructive way that they worked with my officials at the Department of Energy and Climate Change following the meetings that the hon. Lady helped to facilitate. The council is looking more positively at the green deal and working to submit a bid under the green deal for communities, and I look forward to announcing the result of those bids. I am glad to say that there has been a strong response from more than 80 local authorities. We have already announced the first tranche of street-by-street roll-out of the green deal and it is receiving a positive response.

I want to make a general point. The thorough retrofit of Britain’s housing stock is a challenge and is not easy. The hon. Member for Nottingham South and the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), who speaks from Labour’s Front Bench, are absolutely right. I am absolutely committed to the street-by-street roll-out. It is the engine for delivering whole-home retrofit in the most cost-effective way, but I am afraid that that was totally absent from the points raised by the Opposition. I commend them on their concern for the fuel-poor and the will to improve the housing stock of their constituents, but it is at best misinformed and at worst disingenuous to pretend that there is some bottomless pit of money when they represent the party that left us with the biggest peacetime deficit in our country’s history and brought us to the edge of financial ruin. What is more, during the last Parliament they drove up the number of fuel-poor people, which peaked in 2009—the last year of the Labour Government —at 5.5 million. Since then, on any measure, that number has fallen under the coalition Government and, according to the latest figures, it now stands at around 4.5 million.

It is wrong to suggest that energy efficiency is a universal panacea. I am a huge advocate of energy efficiency, but it is delivered at a cost, and it is not fair to deliver policy ambition on the backs of the fuel-poor. ECO is funded by consumers—every single customer. It is not funded by general taxation, and to some degree it is, like the CERT and carbon capture and storage programmes, which Labour introduced, regressive because it falls on the fuel-poor as much as the wealthy. It is unfair to disregard the cost of those programmes.

The coalition Government have acted clearly to reduce the cost of Labour’s levies on fuel bills to help to lighten the load of the fuel-poor and hard-pressed consumers. We removed from bills the cost of the £1 billion CCS programme, which the Leader of the Opposition introduced when he was Secretary of State for Energy and Climate Change, and now fund it more fairly and equitably from general taxation. We removed from domestic bills the cost of the renewable heat incentive, the final part of the domestic scheme, which will be launched in the spring, to the tune of hundreds of millions of pounds. Likewise, we responded to the escalating cost of ECO.

The Opposition must make a choice. Are they in favour of the £50 reduction in energy bills, or are they not? They owe it to their constituents and voters to make it very clear whether they will put those costs back on to energy bills. Are they saying that they would restore the ECO measures and in so doing drive up bills by at least £50 instead of freezing them? There are hard choices to make. Of course, we all want retrofit of the housing stock. I think we could all agree on the desirable measures, but they come at a cost and we must be fair to everyone and talk about how they will be funded.

It is true that it seems inequitable or unfair to cut the cost of ECO, which means that some people will wait longer for improvements to be installed, but bills will fall for millions of people. The improvements we are talking about will be installed in the homes of a few thousand people. We must be realistic. Progress was made under the last Labour Government, but they left millions of homes requiring substantial intervention to bring them up to what we would all regard as 21st century standards.

[Dr Whitehead]

Does the Minister accept that ECO is a carbon-saving obligation in the first instance, the funding of which follows? It would have been possible, even if the overall funding envelope had been kept as it was, to make changes in the carbon obligation in such a way that these programmes might have been saved. That is an entirely different point from the one he is making about whether one should abjure savings on energy bills as a result of trying to keep costs up overall.

[Gregory Barker]

I think we are talking slightly at cross purposes. Let me correct the idea that the ECO target has been obliterated, killed or put to bed, as anyone who listens to the Opposition could be forgiven for believing. The fact is that ECO has not reduced certainty; it has increased it. Labour’s CERT programme was year on year. It ran for 12 months, and was then extended for another 12 months. It was a hand-to-mouth programme. ECO now offers unprecedented transparency and long-term certainty for the insulation industry because we have extended it and guaranteed it up to 2017.

We have not simply stretched the target from 2015 to 2017. From 2013 to March 2015—27 months—we expect to deliver a saving through the scheme of around 14 megatonnes of carbon. In the period April 2015 to March 2017, to which we have extended the scheme, an additional 12.4 megatonnes will be saved, a cumulative total of 26.4 megatonnes, not 14 megatonnes. It is wrong to say that we have not extended ECO or that we are not offering long-term certainty against which companies in the supply chain can invest and set their business model.

We have given a clear message to companies in the supply chain that we cannot simply install the measures regardless of cost. We cannot reach our ambition to install solid-wall insulation at current prices, which is why we are trying to create a competitive market and to introduce new private sources of finance. We are trying to introduce greater competition and innovation to drive down the cost of the measures.

Although it is very early days for the green deal and ECO market, we are seeing real pressure on costs, not from the big energy companies but from the disruptive new entrants—the small and medium-sized enterprises, family business and entrepreneurs that are coming into the market. We should celebrate the fact that prices for solid-wall insulation are coming down. I have seen companies that are not only bringing down the cost of these measures but increasing the quality of the product, and the quality and choice of the offer to consumers. [Interruption.] The fact is that I have seen a lot of solid-wall insulation where what people end up with is homes that look like they have been airlifted from East Germany. The people who do it take out all the character and just put on some uniform fascia. In fact, what people increasingly want is choice. They do not want to see character obliterated from their home. They want to see improvements. I am glad to see that we are getting that sort of innovation into the scheme.

I understand where the Opposition are coming from in their desire to retrofit homes. I understand their ambition to improve the efficiency, warmth and comfort of homes, but unless they can cost that out and be honest with the electorate about how much it will cost and how much of the burden will fall on the fuel-poor and on hard-working families, they are just a pressure group; they are not worthy of being considered the Government. We are making those choices and laying out the whole picture for the electorate. We have to balance the costs to hard-working families with the benefits to the few that will receive ECO.

[Jonathan Reynolds]

The Minister is saying that solid-wall and hard-to-treat measures cannot be economically funded through this programme. Given that this policy is his own policy, when did he become aware that it was unworkable to try to deliver those kinds of measures under the scheme?

[Gregory Barker]

No; I obviously did not explain this properly. What I am saying is that we could not do the whole lot, the 7 million or so—I think that that is the figure, off the top of my head—properties that need to be done at this price, so what we are doing, as we work with other technologies, is getting the market going, using the green deal communities subsidy and the cashback that we have announced to jump-start the market and to fund the amount that we judge we can afford. That is in order to get the market working and to bring forward innovation; and as the market gets going, so we will see the price come down. We should use Government policy as a lever to drive down the cost, just as we have used Government policy in support of feed-in-tariff technologies as a means of driving down cost; and as costs come down, that should not be passed across in inflated profits to installers. It should come across in benefits to consumers, whether they are bill payers or people who are purchasing the technology. That is at the heart of the green deal.

We are trying to move away from the model that was used under Labour, in which there was 100% subsidy. Basically, what that meant was a glorified lottery. Millions of homes were substandard, and each year a lucky few thousand would win the lottery of insulation and get every single measure fully funded. I do not begrudge those home owners or people in the rented sector who had their homes upgraded, but that is not the fairest way of doing it. Yes, there are those who are fuel-poor who will never be able to make a meaningful contribution. We must accept that, but most people who fall into this category are capable of making a meaningful contribution to something that will add considerably to the value of their home.

[Lilian Greenwood]

My constituents back in Nottingham who are listening to these comments will probably be shouting at their radios and televisions. They will say to the Minister, “We are making a contribution to the cost of getting our homes insulated and we are precisely the sort of hard-working families that the Minister talks about.” They might feel somewhat let down by the sort of comments that he is making.

[Gregory Barker]

No. I refer back to my earlier comments: I think that there are grounds for optimism for the hon. Lady’s constituents. She is right: we have had to bear down on the cost of delivering ECO. However, we have put in place other measures, which will allow schemes such as that in Nottingham to go forward. We have already announced—

[Mr Jim Cunningham (Coventry South) (Lab)]

Will the Minister give way?

[Gregory Barker]

I will not now, as I have very little time left. We must ensure that we deliver value for money, but the hon. Lady is right: a number of her constituents are making a contribution. It is not easy to say exactly what the right level of contribution is, but I think that the principle is important and I salute the work that is going on in Nottingham, as I said. I am increasingly optimistic that schemes such as that and many others across the country will be able to be rolled out, as a result of our green deal communities fund and the increased cashback prices that we have put in place. Those have been warmly welcomed by the supply chain. We have seen a very substantial increase in the cashback offer. Up to £4,000 per household is now available for solid-wall insulation. That is up from £650. It is not a bottomless pit or a blank cheque. It comes from a pot that we judge we can afford in order to get the market moving. We will announce shortly a further tranche of long-term incentives that will encourage people to improve the energy efficiency of their home. That will show that the coalition Government are a genuine partner in that move and that we are trying to build a long-term, sustainable market for energy efficiency improvements.

However, part of that must be green deal finance working together with private finance, subsidy through the ECO and other pots. There is no silver bullet; there is no easy answer, but the situation is simply not as bleak as it is being painted by the Opposition. I understand that every time the Government change policy, that is a challenge for any business that depends on Government policy. We do look, wherever possible, to avoid unnecessary changes and to provide certainty, but the very fact that we have now extended the ECO scheme out to 2017 and put the cashback measures in place, together with the fuel poverty strategy—the first time that anyone—

[Nadine Dorries (in the Chair)]

Order. I call Mr Tom Blenkinsop. Will other hon. Members please leave the Chamber quietly?

Local Government Funding

Tuesday 11th March 2014 Westminster Hall

16:26

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

Good afternoon, Ms Dorries; it is a pleasure to be under your chairmanship for this important discussion. I appreciate that local government financing is a complex topic and one that I cannot do justice to in this short debate, but I am grateful to have been given the opportunity to highlight the gross disparities that regions face in the financing of local government.

When looking purely at settlement funding, it may appear that the differences are fairly small, with all regions besides London seeing their local authority funding cut by approximately 40% between 2010-11 and 2015-16. However, when we look at actual revenue spending power, we see that there is extremely large inter-regional variation. Revenue spending power takes into account a range of other sources of funding to local authorities and gives a more real—in this instance—sense of the disparities between regions.

The House of Commons Library has undertaken fantastic research that highlights my point. It has calculated the cumulative percentage cut in revenue spending power faced by each region between 2010-11 and 2015-16. Regions with high levels of deprivation and need face massive reductions, while regions with significantly lower levels of deprivation and need face much smaller reductions. The north-east faces an 18% cut, London and the north-west a 17% cut, Yorkshire and Humber a 16% cut, the west midlands a 16% cut and the east midlands a 12% cut. However, although they still face cuts, the south-west and the east of England face relatively small cuts of 9% and 8% respectively and the south-east faces a 6.6% cut.

In 2014-15, the 10 most deprived local authorities in England will lose six times more than the 10 least deprived compared with 2010-11, so while more deprived areas such as Liverpool, Hackney, Blackpool and my native Middlesbrough lose most, the Prime Minister’s own local authority, West Oxfordshire—one of the wealthiest—is seeing its spending power increase, as are other wealthier council areas.

Our constituents probably do not think much about the intricacies of local government funding formulae, but the consequences of the unfairness are real, significantly affecting our constituents and local communities. Both unitary authorities in my constituency, Middlesbrough and Redcar and Cleveland, have faced significant challenges and are set to face even more owing to the cuts imposed on them by the Department for Communities and Local Government.

Under a budget recently proposed by the independent mayor of Middlesbrough, Ray Mallon, 300 jobs are set to be axed and the Clairville stadium, the registry office, the TAD centre and the Middlesbrough teaching and learning centre are set to close. Elsewhere, services will be reduced, with the opening hours of leisure centres, for example, being slashed. That is not to mention the significant cuts and job losses that have already occurred in Middlesbrough.

The situation in Redcar and Cleveland is similarly bleak, with the council forced to reduce front-line services such as youth services and to make compulsory redundancies, as so many jobs have been lost that there are very few people left who are willing to take voluntary redundancy or early retirement.

[Mr Jim Cunningham (Coventry South) (Lab)]

I had a meeting last week with the leaders of the seven districts that make up the west midlands. It is becoming abundantly clear that over the next two or three years, those authorities will no longer be able to provide even the minimum services required. The situation goes back about 25 years to when Nicholas Ridley said that the ideal local authority would meet only once a year to give out contracts.

The Government, particularly the Tories, think in generations, and when they come back into power, they pick up where they left off. More importantly, Coventry will lose 1,000 jobs over the next two or three years, and it will have to find some £50 million on top of the £20-odd million that it has already found. Children’s services will suffer as much as education. Coventry and the west midlands local authorities are in a real bind.

[Tom Blenkinsop]

The picture is similar in the north-east. For example, the leader of Newcastle city council, Councillor Nick Forbes, has talked about his fear that local authorities are fast approaching a cliff edge in terms of their ability to perform even statutory duties. I also received some interesting information from the Local Government Authority about other anomalies relating to capping, which I will come to later.

Redcar and Cleveland borough council should be applauded for protecting and supporting a local company, SSI UK—an employer of fundamental importance for Redcar, Cleveland and the surrounding Tees valley area. The firm invested heavily in Teesside Cast Products’ blast furnace, coke ovens, basic oxygen steelmaking plant and continuous casting plant.

I know the company well, having been a union official on its site. Until recently, it was unable to pay its business rates, which mounted up to some £19 million. If Redcar and Cleveland borough council had not taken on board that burden, it would have been difficult for the company to keep functioning. Fortunately, a settlement is now on the table, but if that settlement had not been achieved, the local authority would have had to cut a further £9 million on top of the cuts imposed on it, without any central Government assistance. We must praise the borough council for managing its already tight budget in difficult circumstances.

Locally, some Tories and Liberal Democrats have accused councillors of relishing and delighting in cutting front-line services, and have claimed that they are seeking to score partisan political points. That is clearly not the case. Councils are making cuts because the political settlement forced on them necessitates their doing so. If anything is partisan, it is central Government’s agenda and message, because Conservative areas generally receive much smaller cuts or even budget increases. I highlight the example of the Lord Chancellor’s local authority, Epsom and Ewell, which is receiving a 3.51% increase in non-ring-fenced central Government finance provision between 2011-12 and 2015-16. In the same period, Middlesbrough and Redcar and Cleveland face a cut of approximately 30%.

A similar accusation is often levelled at local authorities that decide that freezing council tax would leave them in an even more precarious medium to long-term financial situation. That is clearly motivated not by partisan factors but by the fear, common to many local authorities, that accepting such a freeze will leave a black hole in their finances in years to come.

[Mr Jim Cunningham]

Freezing council tax might sound like a good idea at the time, but the council tax payer will pay the price two or three years down the road. My hon. Friend must also remember that in addition to local authority cuts as we know them, cuts have been made to the fire service, to the police and to neighbourhood policing, even though the Government want to cut crime.

[Tom Blenkinsop]

I agree with my hon. Friend. There are other factors, which I will not be able to go into today, and local people often expect local authorities to pick up the slack. That slack has totally gone, however. We have gone beyond cutting into flesh, and we are now cutting into bone, as local authorities increasingly recognise. Tory-controlled local authorities feel that the Government are forcing them into a position where they have to increase council tax to secure their financial future. I believe 18 councils are in that situation. Indeed, the Prime Minister’s council, Oxfordshire county council, is proposing a 1.99% increase, as is the Foreign Secretary’s council, North Yorkshire county council, which is local to me.

We have to look across the piece. I will quote from an LGA briefing that highlights issues that the Minister must take on board. For example, the LGA says:

“Councils that have frozen their council tax could still face having to organise referendums, whether or not the increase in total council tax was a direct result of their financial decisions.”

The reason for that is:

“The extension of council tax referendums to include levying bodies risks perverse outcomes that will put growth generating investment at risk.”

That may affect things such as internal drainage boards, flood defence, integrated transport plans and pension authorities. We cannot discuss this in any depth today, but Government policy is increasingly to use the private sector rather than the state for people’s pensions. The LGA states:

“Pension authorities in some Metropolitan Counties and London operate the legacy pension schemes of the Greater London Council and former Metropolitan Counties. As with the rest of the Local Government Pension Scheme, there is little control over the costs of these which are increasing with each successive valuation.”

There will be consequences for pension policy, transport policy and floods policy.

Efficiency savings will go only so far to plug the funding black hole that central Government have imposed on local government. The scale of cuts faced by councils in the north-east has led some, such as Newcastle city council, to warn that in a few years’ time they will be unable to afford to perform all their statutory duties. I imagine that the Minister will tell us, as he and his colleagues have done many times, that the reason why local authorities in regions such as the north-east face larger cuts is that they receive more funding from central Government than do those in other regions.

That is a false argument for two reasons. First, those disparities exist not only in absolute figures but in percentage terms. Secondly, and crucially, regions such as the north-east receive more funding than those such as the south-east because their need is greater. If we were to take to its logical conclusion the Secretary of State’s argument that cutting in the north-east is fine because the region receives more to begin with, we would end up with total uniformity in per capita central Government funding to local government, irrespective of an area’s deprivation and need. Does the Minister agree that it is absurd to ignore or underweight deprivation in funding formulae, as his local government financing policies do?

I am conscious that the Minister may also say that the north-east and other deprived regions are receiving punitive cuts because of the need to rebalance the public and private sectors in those regions. Although there is a need further to develop the private sector and private sector employment in regions such as mine, does he agree that the lack of regional economic resilience is caused by long-standing structural issues that date back to the ’70s and ’80s, if not before, and that there is a real risk that disproportionate cuts to local government and the consequent job losses will reduce the aggregate demand in the region? Would that not hamper, rather than help, the development of the region’s private sector?

I realise that the problem is not purely a north-south divide; it is more complex than that, and many factors are involved. Issues such as rural deprivation affect parts of the north-east such as my constituency, while deprived areas of London are also being penalised. For example, the Government’s figures show that Lewisham, which is 31st on the index of multiple deprivation, will lose 9.6% of its spending power, or approximately £2.93 million, between 2013-14 and 2015-16. Its neighbour, Bromley, which is 203rd most deprived and Tory, will receive an extra £3.4 million over the same period.

Furthermore, there is considerable intra-regional variation. Deprived parts of the south, such as Southampton, fare much worse than areas such as Poole. That said, northern regions are more deprived, in general, than southern ones. As the Tory-led Government have made the political decision that deprived areas should face more cuts and a greater reduction in revenue spending power than well-off ones, northern local authorities are generally being hit much harder than southern ones. Currently, we do not have a one-nation system to determine how much funding local government should receive. We need a one-nation system of local government financing, in which need and deprivation are properly considered and in which local government is given the resources it requires to thrive and to help local businesses grow.

16:39

[The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)]

I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate and speaking up for his constituents—that is the duty of all MPs. I also congratulate him on getting the phrase “one nation” into his speech many times. He is an Opposition Whip, so I am sure it will be noted that he is working overtime to be on message.

The hon. Gentleman mentioned the economic resilience of the north-east, as well as the good work done by a particular steel company in Redcar.

[Tom Blenkinsop]

That would be SSI UK.

[Stephen Williams]

I wanted to point out that my hon. Friend the Member for Redcar (Ian Swales) has an enormously positive track record on securing the reinvestment in and reopening of the steelworks in Redcar. Bearing in mind the employment growth at Nissan as well, the north-east economy seems quite resilient. The private sector seems to be thriving and new investment is coming into the region, which I hope the hon. Gentleman would applaud.

Over recent years, the Government have worked to reform the funding system that we inherited in 2010 to incentivise local economic growth and house building and give councils more freedom in how to spend their money and achieve savings. More recently, we have focused on how funding can support transformation right across locally delivered public sector services.

The Government want councils to do more for less so that the taxpayer gets a better deal. We have decentralised power and given local communities a range of new freedoms and powers, but there is more to do in order to save taxpayers’ money through greater joint working between local and central Government—not through higher charges or council taxes, but through innovation.

We have had to rebalance the economy, which has meant reductions in local government finance. I acknowledge the fact that local government has not been protected overall in central Government spending reviews. Other areas—such as the NHS and funding for schools—have been protected, but because local government spends a huge proportion of central Government money, the cuts that are necessary to rebalance the nation’s books have perhaps been felt more keenly in that area. Nevertheless, I acknowledge the hon. Gentleman’s points on that front.

We have had to make some difficult and tough decisions about the public finances over the past three years, but it was right that we took them. Our budget deficit is now sharply reduced. We are no longer the European Union country that borrows the most as a share of our national income—Spain currently holds that record—but there is still much more to do before we get the nation’s finances back on course.

We are encouraging local councils to go for local growth. We believe that local leaders are best placed to understand their local economies and the needs of their areas, so we are promoting strong local economies across the country and giving local areas the tools and incentives to drive up growth in their areas. The previous system made councils dependent on central Government for their income, and that relates in part to the heart of the hon. Gentleman’s comments.

Colleagues have described the previous system as giving rise to a begging bowl mentality. I have described it as a supplicant relationship between local and central Government, with local authorities beholden to central Government for income and, often, for power. What pots of money were given to local authorities were frequently ring-fenced, with lots of strings attached, by the previous Government. We have tried to sweep that all away so that over time local government can, increasingly, stand on its own two feet.

[Tom Blenkinsop]

The Minister will be aware that the Government’s growth plan involves local enterprise partnerships, which they demand apply for funding from a central pot in Whitehall. Most of that pot has not yet been given to LEPs. That has led to the Tees Valley Unlimited LEP saying only today that a radical rethink of the growth strategy for the local area is required if we are to go forward.

[Stephen Williams]

I will shortly come on to the north-east local economy and mention some of the funds that have gone to the region from central Government.

As I mentioned, savings on the ground can be achieved through the transformation of services, continuing to provide them to the public at a more efficient cost. There are 325 shared service agreements reported in local government, which it is estimated could save £280 million per annum. Our system means that councils that are open to new business will see the benefits of growth and be rewarded for building new housing through the new homes bonus, which will be worth almost £1 billion next year. In 2014-15, Middlesbrough will receive more than £1.5 million in new homes bonus funding, bringing the total earned by Middlesbrough since the scheme began to more than £4 million.

The hon. Gentleman referred many times to the differences between different authorities’ spending power around the country, but, on average, councils will have spending power worth £2,089 per household from April. There is protection for more deprived areas of the country—such as the hon. Gentleman’s constituency—and for areas that are most dependent on central Government grants. Such councils will continue to receive significantly more Government grant in 2014-15—Middlesbrough will have a spending power of £2,550. That is around a third more than Poole, an authority that the hon. Gentleman mentioned, which will have a spending power of £1,678 per household.

[Tom Blenkinsop]

Of course, that is the case now, but, bearing in mind the funding calculations for recent years and going forward, at what point does the Minister forecast that spending per household will equalise for those two authorities?

[Stephen Williams]

The Government have published their settlement for 2014-15, which includes the figure I have just given. We have given indicative figures for the following year, but, of course, no Government are able to extrapolate that far for future local government settlements. That will be an issue for whatever Government are in place in the next Parliament, but I would be surprised if local government support to Poole and Middlesbrough was equalised any time soon.

The hon. Gentleman mentioned central Government funding for local economic growth. We have provided substantial support to regeneration in his local economic area, Teesside, which has received £24 million from the regional growth fund and £8.6 million from the growing places fund. That has funded, for example, the Teesside advanced manufacturing park, where I am sure some of his constituents are employed.

The Government want local authorities to protect council tax payers in their area. Council tax constitutes a significant bill for many of our constituents. I would guess that many of the hon. Gentleman’s constituents feel very keenly about the council tax they have to pay in comparison with their energy and other utility bills. Under the previous Government, council tax more than doubled, but this Government have done everything possible to protect families from further rises.

Since 2010, council tax bills across England have been cut by 10% in real terms. Over the past three years, we offered sufficient funding so that councils could freeze council tax without losing income. We will do the same again for the next two years, with a further £550 million available to councils.

[Tom Blenkinsop]

I thank the Minister for his information, but in terms of local history, when his party ran Redcar and Cleveland with the Conservatives between 2003 and 2007, council tax was increased by 25%. In addition to that, the chief executive officer’s salary went from £83,000 in 2003 to £143,000 in 2007. Although council tax went up under the Labour Government, it was largely down to councils run by the Minister’s party and that of his coalition partners.

[Stephen Williams]

I will deal with the second point first. The Government have said that although it is up to local authorities—rightly so for all us localists—to set local government salaries, they should be aware of value for money for local taxpayers when setting chief executive and other chief officer salaries. Making a comparison with perhaps what the Prime Minister earns might be a good starting point to benchmark such salaries.

The council tax increased over the lifetime of the previous Government both in cash terms per household and as a share of the national tax base over that period. Although we can look at what happened on the ground in individual local authorities, it is undoubtedly the case that, right across England, council tax as a proportion of the total tax collected increased over that period, putting more of the burden of what is quite a regressive tax on local households. That is why the Government have been encouraging local authorities to freeze the tax, providing freeze grants to incentivise them to do so.

With the new funding, the average bill payer could have saved up to £1,100 for an average band D property over the lifetime of this Parliament. I hope that as many councils as possible will take up this offer in the last year of this Parliament to help local residents with the cost of living.

Councils can do more to transform services. Many councils have taken steps to make savings through common sense measures, but there is still much more that could be done. It is estimated, for instance, that £2 billion a year is lost through local fraud. Councils have a procurement budget, collectively, of more than £60 billion. Clearly, there are possibilities for savings to be made that would not adversely affect local residents. We want to see councils tackling issues before they start putting up tax bills or cutting back on services.

Councils also have more than £19 billion in reserves, which could be there to cushion the changes that need to take place over the next few years. That is before we begin to consider the more fundamental transformation in services through models such as the troubled families programme, which the Secretary of State oversees with Louise Casey in our Department, or the whole place community budgets where the emphasis might be on innovative ways of working, such as early intervention and prevention, which I have been keen on for most of my political life.

Such programmes promise to be more effective and more efficient over time. We have set aside £200 million from capital receipts to support service transformation. We should remember that in 2014-15 there will be a further £330 million to continue this transformation, including a £200 million expansion of the troubled families programme.

Another big change in local government finance will come from the better care fund, which comes on stream in 2015-16. There will be £3.8 billion of pooled budgets at a local level to integrate health and social care—aggregating the money, but joining up services in a more seamless way. I am sure that we have all often had constituents coming to see us about the disjoint between the NHS and social services, and the better care fund will partially deal with that.

The hon. Member for Middlesbrough South and East Cleveland mentioned other comparisons and the differences between the authorities in his constituency and the Prime Minister’s constituency, and the Lord Chancellor’s local authority of Epsom and Ewell. They are, of course, district councils, so I do not think he was comparing like with like. I suspect that those relatively small district councils will have had lots of extra income through the new homes bonus, because new houses have been built in those areas. I think he is on safer ground when comparing unitary authorities and metropolitan districts, rather than small district councils in the south of England.

The hon. Gentleman also mentioned recognising poverty and need in the system. Of course, that is to some extent embedded in the system that we have now started to change. All those past settlements are embedded in the system. We are now expecting local government to grow their local economies. We have put in place a 50% retention of business rates. There was a time when the Treasury took 100% of local business rates away from local authorities and redistributed the money according to its own priorities. That system has now ended. There is a real incentive for Middlesbrough, Redcar and Teesside to grow their local economies, so that we can indeed become one nation.

I congratulate the hon. Member for Middlesbrough South and East Cleveland on raising the issues on behalf of his constituents. Councils across the country still have a great deal to do to transform their local services, but I am sure they are up to the challenge.

International Military Sales Ltd

Tuesday 11th March 2014 Westminster Hall

16:55

[Mr Ben Wallace (Wyre and Preston North) (Con)]

It is a delight to serve under your chairmanship, Ms Dorries. May I draw attention to my entry in the Register of Members’ Financial Interests? I have been the chairman of the all-party group on Iran for the past nine years, and I am a former overseas director for the aerospace company Qinetiq.

I want to highlight the relationship between International Military Services Ltd and the Ministry of Defence, and a specific case as it relates to Iran. It is a sorry passage in our history and the UK’s relationship with that country. It is not only a sorry story, but un-British in that the process that I will describe has been marred by double dealing and obfuscation. The Minister will be relieved to know that I am not talking about recent history; I am talking about way back in the 1960s and 1970s.

In the days of the nationalised defence industry, the British Government established a private limited company as its trading arm to sell weapons and aerospace equipment abroad and munitions to overseas buyers, mostly to other Governments. A lot has changed since then and the aerospace industry has been almost completely privatised. For that reason, in 1991 it was decided to wind up this little shell company that was wholly owned by the Government. It would have been wound up, but for one problem—a debt owed by that company to the Government of Iran, equivalent to between £400 million and £500 million.

The debt may explain why, 23 years later, the company still exists. What was the cause of the debt and what should we do to put it right? Between 1971 and 1976, the Shah of Iran paid up front—quite rare in those days, and even today—the equivalent of £650 million for 1,500 Chieftain tanks and armoured vehicles. When in 1979 the revolution deposed the Shah, Britain quite rightly ceased those exports until the country had settled down and we clearly knew its intentions.

However, we chose not to return the equivalent of the £450 million that Iran had paid us. Instead, we sold the tanks to Saddam Hussein, who then proceeded to use a number of those tanks against the people of Iran. I think it is widely accepted that the west’s support for Saddam Hussein was a catastrophic error. That period of history is well behind us, and I hope we will not make such mistakes again. However, since that time, and despite Iran’s attempts through the rule of law to access the funds owed, the UK has held on to them.

I am not here to urge the British Government to break the successful sanctions regime, but I am here to urge that we honour the debt once and for all.

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

I congratulate my hon. Friend on securing this debate. If the matter were to be resolved, what impact would it have on the sanctions that Iran has to adhere to, given what we know about some of their motivations and activities?

[Mr Wallace]

There would be no impact, because in this country we have the facility of the High Court. The funds are already held by the High Court on behalf of the Government, but should the High Court make a ruling, or a settlement be reached, they could be handed over within the parameter of the High Court and held until such time as they were unfrozen through the sanctions licensing scheme or made available as a result of a change to sanctions. This is not about releasing funds tomorrow morning to the Iranian Government, but about putting a wrong right, putting our relationship with Iran on a more open and just footing, and, hopefully, putting the matter right.

However, I am afraid that this matter does not quite end there, because Britain and Iran are signatories to the Permanent Court of Arbitration in the Hague, an international treaty whereby we effectively arbitrate over contracts. In 2001, the court ruled in favour of Iran to recover the debt. The onus is on the United Kingdom to honour its treaty obligations.

If we fast-forward to 2013, however, we find that Iranian officials, who had set out from Iran with UK visas issued by the Foreign Office, come to this country to access the services of the commercial court. On landing at Heathrow, their passports are removed from them, their visas are revoked and they are detained for a number of days in asylum centres. That was not a particularly British way to resolve an issue, especially given that we had only recently issued their visas. It was a worrying sign.

To date, the Home Office has not been willing to give me a full explanation of the reasons behind the officials’ detention. However, I am sure that the Home Office will be careful, because any court—any judge—would look very poorly on something that is done without a valid reason, as this case involves access to legitimate justice and our courts. Let me be clear: I am not seeking to change the sanctions regime and I am not seeking to hand this money over. However, in the current environment, in which we are trying to put UK-Iran relations on a better footing, I am seeking a swift settlement for all parties.

Across a range of areas, Iranian entities that are not under sanction and are not involved in any way with the Iranian Government are suffering as a result of the UK’s fear about extraterritorial US sanctions. That is because many of those sanctions, while they do not deal with US companies, have an extraterritorial reach that can unfortunately leave many British entities with a Hobson’s choice—trade with us or trade with Iran.

We are now in the rather perverse position in which the US Government are issuing letters of comfort to US banks to allow them to trade with Iran, and to allow them to have approved and licensed financial transactions with Iran, while our banks are receiving no such comfort or protection from the reach of Congress. American banks in the US are protected from Congress by the US Administration, but British banks are thrown to the lions.

As sanctions become a more common foreign policy tool—with some success; they have certainly helped to contribute to the process of Iran coming to the table—we in Britain should make it very clear that we will follow the rule of law, fill in the detail and ensure that sanctions are clearly adhered to. However, that does not discharge us from our outstanding obligations.

Previously, there have been numerous rulings in the UK, Germany and the US courts that clearly distinguish the difference between the discharge of an obligation by a party—in this case, the obligation of International Military Sales Ltd to the Iranians—and the payment of the funds to a designated entity. They are two separate issues and to conflate them, as people have tried to in the past, supposedly as a reason for not resolving this matter, is to put unnecessary and unreal barriers in the way.

I would like to hear from the Minister. I am grateful to him for coming to Westminster Hall today, because I am aware, as chairman of the all-party group on Iran, that Iran policy is way above my pay grade. It is made by the P5+1, and in No. 10 and the White House. However, I would be very grateful if the Minister at least recognised the importance of resolving this matter. We should wind up the company, which has existed in limbo for 35 years, and we should discharge the MOD’s obligation to a brass plate somewhere else in London. We can then put this sorry tale behind us.

17:03

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

It is a pleasure, Ms Dorries, to serve under your chairmanship at this later than anticipated hour; I am grateful to you for keeping Westminster Hall open. I thank my hon. Friend the Member for Wyre and Preston North (Mr Wallace) for securing this debate. It is important that we have this opportunity to put on the record the Government’s position on the subject that he has raised today.

I know that my hon. Friend, who is chairman of the all-party group on Iran, has taken a keen interest in this matter since he joined the House. It is entirely appropriate that he should have secured this debate . He has raised the issue of a dispute, and it is important to try to get a little clarity on the record as to the nature of that dispute. It relates to a number of contracts—not to a single contract—between the Iranian Ministry of Defence, which I shall refer to as MODSAF, and International Military Services Ltd, known as IMS. I am pleased to have this opportunity to outline the Government’s position regarding the dispute. As my hon. Friend has acknowledged, I am, of course, somewhat limited in what I can say, given pending litigation in the High Court between IMS and MODSAF. The UK Ministry of Defence itself is not a party to those proceedings.

I will make a number of key points in responding to this debate. First, I wish to make it clear that the Government would like the matter to be resolved as soon as practicably possible, which I think was the main challenge laid down by my hon. Friend. We share his determination in that respect, not least because, as he said, the dispute can be traced back to 1979 and the demise of the Shah’s regime in Iran. At that time, IMS, a company wholly owned by the MOD, had approximately 60 contracts to supply MODSAF with defence equipment and services. The change in regime in Iran saw the cancellation and termination of those contracts, resulting in a number of legal disputes.

The vast majority of the disputed contracts were settled on 22 October 1990, but four contracts were not. The two largest of those four contracts involved, as my hon. Friend said, the sale of more than 1,000 main battle tanks and armoured recovery vehicles. These contracts were referred to the International Chamber of Commerce for arbitration. The ICC ruled on 2 May 2001—more than 10 years later—in favour of MODSAF. By agreement between the parties, MODSAF agreed not to pursue payment of the awards until the outcome of a planned challenge to the awards by IMS. That was under the proviso that IMS paid, by way of security, a sum sufficient to meet the awards into the High Court. That payment was made in December 2002.

IMS subsequently challenged the ICC awards through the Dutch legal system, as the seat of the ICC arbitration, culminating in a final ruling on 24 April 2009 by the Dutch Supreme Court. The challenge by IMS was partially successful, in that the Dutch Supreme Court partially set the ICC awards aside.

The Government and IMS accept the ruling of the Dutch Supreme Court. However, there are legal issues that remain unresolved as to the precise amounts payable to MODSAF and crucially, as my hon. Friend said, as to how the sanctions regime that had been subsequently imposed impacts on the awards and the circumstances under which MODSAF is entitled to receive payment. These issues are subject to litigation, with a High Court hearing scheduled for June.

In addition, as I have already mentioned, there are other contracts under dispute. In relation to one of these, an infrastructure contract, the ICC tribunal ruled in favour of IMS on 28 January 2005. Prior to the Dutch Supreme Court ruling in 2009, international sanctions were imposed against the Iranian Government, in the context of their potential nuclear aspirations. In 2008, MODSAF itself was designated under the relevant sanctions regulations. Notwithstanding the recent sanctions relief included in the joint plan of action agreed with Iran, the bulk of the sanctions remain in place until a comprehensive settlement is reached on the nuclear programme. It would be inappropriate for the Government to comment any further on these issues, given the pending litigation.

However, the Government would like to see a final and appropriate resolution of these long-running disputes, and we hope that the recent progress in reaching an understanding on a variety of issues with the Iranian Government will facilitate that objective.

[Mr Wallace]

I am not referring specifically to this case. In general, given previous rulings, does the Minister not recognise that it is perfectly acceptable for a court to deal with the discharge of an obligation separately from how that obligation is then paid to an entity? They are not the same things.

[Mr Dunne]

My hon. Friend pre-empts the conclusions to my remarks, but I can confirm that we anticipate a resolution being possible, ideally without recourse to the High Court action in June. We would be happy to see the parties engage to reach a settlement on the outstanding issues before it gets to court. We think that can be done irrespective of the sanctions regime. Once a settlement has been reached to agree a final amount, the payment of that amount becomes a matter for the prevailing sanctions regime in place at that time. I agree that those are separate issues, but the ultimate payment cannot be made while the sanctions regime is in place.

I want to mention a couple of other factors that the House needs to be aware of. All the negotiations that have taken place on this matter have been conducted by employees of IMS on a confidential basis, in turn routinely channelled through legal representatives. Also, given the title of this debate, I should like to clarify the relationship between the Ministry of Defence and IMS. IMS is a wholly owned subsidiary of the Ministry of Defence; all but one of its 20 million shares are held by the Secretary of State for Defence and the other single share is held by the Treasury Solicitor. It is governed by the Companies Act, with accounts filed in Companies House. The company formally ceased trading in 2010 and now exists purely to resolve the disputes that I have already touched on.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

rose—

[Nadine Dorries (in the Chair)]

I am sorry, Ms Seabeck, but because you were not here at the beginning of the debate, it is not in order for you to intervene. [Interruption.]

[Mr Dunne]

I should have been happy to take the intervention. If the hon. Lady has a point, perhaps she can make it to me afterwards.

[Nadine Dorries (in the Chair)]

May I clarify that Ms Seabeck is not allowed to intervene in this half-hour debate because she is the Opposition spokesperson?

[Mr Dunne]

Thank you, Ms Dorries. We all learn something new every day.

IMS employs two part-time staff members and three directors. The position of the Ministry of Defence and the Treasury is that the company should be wound up once the final disputes have been settled. I think that that addresses a number of points raised by my hon. Friend.

My hon. Friend mentioned the incident that took place in January last year, in which three Iranian officials were detained and deported from Heathrow airport. The former Under-Secretary of State for Foreign and Commonwealth Affairs, my right hon. Friend the Member for North East Bedfordshire (Alistair Burt), wrote at the time to the UK legal representatives of those concerned, explaining that although it was not the intention of the Government to cause undue anxiety, since the attack on our embassy in Tehran in 2011, Iranian officials had not been allowed to visit the UK in their official capacity. The Government regret any distress caused to those involved. Following the softening of the sanctions regime, we think it would now be possible for Iranian officials to engage with IMS, either on neutral territory or, indeed, here again in the UK, if they were willing to return.

To sum up, the Government and IMS recognise and accept the rulings of the Dutch Supreme Court in this matter. A number of issues remain unresolved and are subject to potential litigation, but we hope that a final settlement can be agreed soon. The parties are not very far apart in financial terms, and we hope that they can come to a resolution without further recourse to the courts. I hope that I have explained the Government’s position on this matter.

Question put and agreed to.

17:13

Sitting adjourned.