House of Commons

Wednesday 30th April 2014 Commons Chamber

Wednesday 30 April 2014

The House met at half-past Eleven o’clock

Prayers

Wednesday 30th April 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 30th April 2014 Commons Chamber

The Minister for the Cabinet Office was asked—

[Graham Jones (Hyndburn) (Lab)]

1. What progress the Government have made on implementing its big society policy.

[The Minister for Civil Society (Mr Nick Hurd)]

We have given communities more power through the Localism Act 2011. We have invested in volunteering, which has risen after years of decline. We have invested to support charitable giving, which has held up in difficult times. Some 70,000 young people have taken part in the National Citizen Service. I am very proud that this country leads the world in supporting social enterprise and investment.

[Graham Jones]

That is not a situation I recognise in Hyndburn, I have to say. Archbishop Vincent Nichols recently said:

“The Big Society hasn’t helped… Charity isn’t an alternative to public service… there are now families with nothing”.

Will the Minister finally admit that the big society project is in fact a big failure?

[Mr Hurd]

No, I will not. I think the cynics have got it entirely wrong. Some of the changes we have introduced are irreversible, not least in terms of giving communities more power and information, which they are not going to give back. We recognise that charities are going through a very difficult time, like lots of organisations, but this Government are actively supporting them to help them to adapt and improve their resilience, while Labour MPs continue to scaremonger.

[Pauline Latham (Mid Derbyshire) (Con)]

What plans does the Minister have for the National Citizen Service this summer?

[Mr Hurd]

I thank my hon. Friend for her long-standing support for the National Citizen Service and all initiatives to encourage young people to get involved in volunteering. We are enormously ambitious for the National Citizen Service this year. As I have said, to date over 70,000 young people have taken part, and we expect the same number to take part this year alone.

[Lisa Nandy (Wigan) (Lab)]

Will the Minister explain why the newly announced £40 million fund to help struggling charities will only come into force in 2015? Many charities are saying that they will not survive another six months because of this Government’s policies. Is this not a case of too little, too late?

[Mr Hurd]

No, I do not accept that. The hon. Lady ignores the fact that the Government have already provided almost £200 million in transition funding for front-line charities and infrastructure organisations to help them through difficult times. We have managed to secure some additional money in the 2015-16 Budget to support more transition work, particularly for middle-sized charities, which we think is needed. She is ignoring all the help we have given so far.

[Steve Baker (Wycombe) (Con)]

Our country once enjoyed a rich and vibrant tapestry of organisations between charity and the state, such as co-operatives, friendly societies and other mutuals. Does the Minister share my dismay that the left has abandoned its own traditions?

[Mr Hurd]

Those are not of course the only traditions that the left has abandoned over the years; it is very hard to see what is left. I am very proud that Government Members are leading the work to encourage more mutualisation, particularly in relation to encouraging people to spin out the services they currently offer inside the public sector, and to offer them and improve them as public sector mutuals.

[Paul Flynn (Newport West) (Lab)]

2. What his policy is on the outsourcing of civil service jobs.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

In common with the previous Government, which the hon. Gentleman supported from time to time, the current Government do not have a dogmatic view on outsourcing, either in favour of it or against it.

[Paul Flynn]

For the past 10 years, shared services has been one of the major job successes in providing more than 1,000 decent jobs in my constituency, at great value to the taxpayer. Why is the Minister trying to wreck a winning team?

[Mr Maude]

We are actually seeking to build on what is good. It is now 10 years since Sir Peter Gershon, under the previous Government, proposed a fast move towards genuinely shared services. That did not happen for eight years. Since 2012, we have made significant progress in genuinely creating a handful of shared service centres for Government. They are building on the shared service centre in Swansea and others. If we create genuinely successful, highly efficient organisations there, they have every opportunity of winning other business and therefore of creating new jobs and new prosperity in those areas.

[Stephen Mosley (City of Chester) (Con)]

My right hon. Friend will be aware of the revelations in the Liverpool Echo last week that Government computers were used to access and change Wikipedia pages relating to Hillsborough. What action is he taking to investigate those accusations and to prevent misuse of Government computers, whether they are outsourced or not?

[Mr Maude]

Everyone in the House will have been horrified and sickened by those edits on Wikipedia. I have been in close, daily contact with the right hon. Member for Leigh (Andy Burnham), who has a highly deserved reputation as a campaigner for the Hillsborough families, and the hon. Member for Wirral South (Alison McGovern), the chairman of the all-party parliamentary group on the Hillsborough disaster. We are undertaking a rapid investigation, which is being led by my excellent permanent secretary, Richard Heaton. The first stage is to establish the facts as best we can and we will then deal with the matter. If this horrible issue is prolonged and there is no closure, it will be very unsatisfactory and distressing for the families, particularly at this time, when the events are fresh in their minds.

[Paul Blomfield (Sheffield Central) (Lab)]

12. Some 239 civil service jobs that have been outsourced to Shared Services Connected Ltd are being lost in my constituency. The people who may lose their jobs were presented with a new staff structure just a week ago, were given only until today to decide on voluntary redundancy and are not being given proper opportunities for redeployment. Will the Minister press SSCL, which is part-owned by the Government, to extend the voluntary redundancy deadline, and will he ensure that all Departments offer opportunities for redeployment?

[Mr Maude]

I shall certainly look at the last point that the hon. Gentleman made. Nobody takes any pleasure in job losses. We have had to lose jobs in the public sector. The civil service is 17% smaller than in 2010 because, sadly, we inherited the biggest budget deficit in the developed world. We have to make economies and do things better. I hope that the new venture, SSCL, will emerge as a vibrant business in the private sector that can win more business and thereby create more jobs. However, it does need to restructure to begin with.

[Mr Philip Hollobone (Kettering) (Con)]

What proportion of civil service jobs was outsourced at the start of this Parliament in 2010 and what proportion will be outsourced at the end of it in 2015?

[Mr Maude]

That is a very good question. It is difficult to be precise because when business is outsourced to the private sector, it is hard to know which of the jobs in a business that provides services to Government and to other organisations relate to Government business. It is therefore hard to know what the baseline is. A larger number of activities will be carried out outside the public sector, many of them through the spin-outs of public service mutuals, which are a way of delivering much greater job satisfaction—

[Mr Speaker]

Order. I am much obliged to the right hon. Gentleman. He is plodding on to the best of his ability, but I say to him politely that perhaps he could write to his hon. Friend and place a copy of the letter in the Library of the House.

[Mr Maude]

rose—

[Mr Speaker]

No, there is nothing further to add. We are extremely grateful.

[Michael Dugher (Barnsley East) (Lab)]

Earlier this year, the Prime Minister boasted in a speech in Davos that under his Government

“there is a chance for Britain to become the ‘Re-Shore Nation’.”

However, the chief executive of Steria has said that offshoring jobs is “on the agenda” for outsourced civil servants working for Shared Services Connected Ltd, in which the Government retain a 25% stake. Does the Minister share my concern that up to 1,000 jobs might be offshored? Will the Government use their stake in the joint venture to argue that those jobs should be kept in the UK?

[Mr Maude]

We will take the same approach as the Government the hon. Gentleman supported—I think he was an adviser to the last Government—when they set up NHS Shared Business Services, which is also a joint venture with Steria. A number of jobs were offshored, but Britain has benefited because that entity has also created more jobs in the UK. We take the same approach as his Government took.

I will cheerfully take up your sensible suggestion, Mr Speaker, of writing to my hon. Friend the Member for Kettering (Mr Hollobone).

[Mr Graham Allen (Nottingham North) (Lab)]

3. What progress his Department has made on developing social finance.

[The Minister for Civil Society (Mr Nick Hurd)]

I am proud that Britain leads the world in developing social investment. The hon. Gentleman is a tireless champion of its power to support early intervention. A new tax relief has gone live this month. There are now 15 social impact bonds in operation. I hope that he will welcome our announcement today of two more funds to support social impact bonds, which we believe will generate better outcomes for young people who are at risk of not being in education, employment or training.

[Mr Allen]

There is an important judgment from the European Court of Justice today on the Robin Hood tax, which will have a big influence on civil society and the big society. However, that will be minuscule compared with the potential impact of a serious social impact bond market on early intervention, which the Minister mentioned, and on council projects. It is two years since Big Society Capital was established, so is it not time to review the working of the Act that set it up to see whether we can take it further?

[Mr Hurd]

I am very proud of Big Society Capital as an institution. I have seen the impact that its investments are having on the ground. It has committed £149 million and has done important work to build this important market. It is just two years in and is about to publish its second annual report. We are always looking to ensure that it succeeds. I am more than happy to pass that question on to the Big Society Trust, which is its governing body, and get its response.

[Mr Gary Streeter (South West Devon) (Con)]

Are not credit unions a great example of social finance, and is it good news that there are now 500 of them in this country, not least a new one in Plymstock in my constituency? More than 1 million Brits are now members of a credit union. Are the Government pleased about that?

[Mr Hurd]

Credit unions are an enormously important part of the landscape in communities around the country, and many do extraordinarily valuable work. We are looking at the degree to which we can support their capitalisation. They are fragmented and under-capitalised, and we are discussing with Big Society Capital, and others, what ideas are out there for using the power of social investment to strengthen the capitalisation of that important movement.

[Mr Jack Straw (Blackburn) (Lab)]

I was the Minister who got going the first social impact bond at Peterborough. Would the Minister like to say what the experience of that first experiment has been?

[Mr Hurd]

I wholly acknowledge the role that the right hon. Gentleman played in that groundbreaking social impact bond at Peterborough. Its early results are extremely encouraging, and reoffending among short-sentence prisoners who receive support through the bond has fallen by 11%, while nationally that figure has risen by 10%. It was the first ice-breaking social impact bond, and I think its impact on the wider movement and the work happening across the country, with at least 15 social impact bonds live, cannot be overestimated.

[Sir Tony Baldry (Banbury) (Con)]

Does my hon. Friend agree that we all need to do more to make voluntary organisations and charities aware of the benefits of the growing social investment market of Big Society Capital, and of the Public Services (Social Value) Act 2012?

[Mr Hurd]

I wholly agree and I am clear about what we are trying to do. Over time—it will take some time—we are trying to build a third pillar of funding for our social sector to sit alongside philanthropy and the public sector, and we lead the world in doing that. The Public Services (Social Value) Act was groundbreaking legislation that requires commissioners to think very seriously about how they can maximise the social and environmental benefit of every pound of public money they spend.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

4. What steps he is taking to tackle cybercrime.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

In 2011 we launched the national cyber-security programme, which was the first centrally co-ordinated programme of cyber-security funding by the Government. Up to 2016 we are investing some £860 million in overall cyber-security funding, as a tier 1 national security priority.

[Stella Creasy]

The Home Affairs Committee is concerned that there appears to be a black hole where low-level e-crime is committed with impunity, and we know that is costing businesses £800 million a year. What is the Minister’s assessment of whether the move to IPv6 will help, and what he is doing to make that happen?

[Mr Maude]

The majority of cyber-attacks and cybercrime can be prevented by basic internet hygiene, and by individuals and businesses ensuring that their cyber-security and internet protection is up to date and that all the latest patches are installed. We estimate that something like 80% of attacks can be prevented by that. The level of awareness is much higher than it was, but we have some way to go.

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

Given the amount of money that the Minister said is being and will be spent, what level of co-ordination across Departments is taking place to ensure that cybercrime is, if not eliminated, significantly reduced over the next year?

[Mr Maude]

We are doing much more to co-ordinate than has ever been done before, and last month I launched CERT UK, which includes the cyber-security information sharing partnership that some 400 companies now belong to. The sharing of information, which was very inhibited before, is now taking place to a much greater extent. There is more we need to do, but Britain overall is not in a bad place on that. However, we need to move fast because those who wish to undertake cybercrime and cyber-attacks are moving pretty fast too.

[Mr Dominic Raab (Esher and Walton) (Con)]

5. What steps he is taking to reduce waste in the civil service.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The Efficiency and Reform Group was set up after the 2010 general election to tackle wasteful expenditure in the public sector. We have supported Departments in achieving savings in 2010-11 of £3.75 billion, a further £5.5 billion the following year and more than £10 billion in 2012-13. In June we will announce the figures for the year just finished.

[Mr Raab]

I thank the Minister for that answer and welcome the progress to date. With the stronger language requirements for visas introduced by the Home Secretary to promote integration, what scope is there to reduce the high cost of translation across the public sector?

[Mr Maude]

There are some central contracts and some scope for us to do this much better, although we need to be confident about quality. Through the Crown Commercial Service we can now aggregate demand to a much greater extent, but what we do not want to do is exclude smaller translation companies from this market as they can often provide a much more cost-effective service. The issue is kept under constant review, and there is definitely scope for further savings.

[Mr Mark Harper (Forest of Dean) (Con)]

9. Will the Minister tell the House what progress has been made on commercial reform in the civil service to make it more savvy in its dealings with the private sector, to get a better deal for the taxpayer?

[Mr Maude]

We are reforming the way we do that. We identified a lack of commercial capability in Government and we are acting to remedy that, although there is still some way to go. The Government have been a very bad customer: we should be the best customer suppliers have, because we have scale and good credit and we pay quickly. We need to use that scale to get the best pricing, and we were not doing that. We have saved hundreds of millions of pounds by doing much better and by dealing with our biggest suppliers as a single customer, but there is much more that we still need to do.

[Dan Jarvis (Barnsley Central) (Lab)]

6. What steps he is taking to encourage volunteering.

[The Minister for Civil Society (Mr Nick Hurd)]

We have created hundreds of thousands of new volunteering opportunities, not least through the National Citizen Service. We have invested in the important infrastructure that supports volunteering and we have reformed barriers such as Criminal Records Bureau checks. I hope that the hon. Gentleman will welcome the fact that volunteering has risen after years of decline.

[Dan Jarvis]

Will the Minister join me in congratulating Margaret Hayes, who recently worked her final shift after 31 years of volunteering to support patients at Barnsley hospital? Volunteers such as Margaret make a much valued contribution to our society, and it is welcome that the number of volunteers is increasing. What more can the Minister do to encourage volunteering among people of all ages and backgrounds around the whole country?

[Mr Hurd]

I wholly support that vision. It is massively important to the country. I join the hon. Gentleman in recognising the work of that extraordinary individual and remind him that the Prime Minister has launched a new initiative that will announce daily the Points of Light awards to reward outstanding volunteers. I ask Members of Parliament on both sides of the House to think about nominating individuals in their constituencies for that award.

[Mr Brooks Newmark (Braintree) (Con)]

One way in which we can encourage volunteering is to thank those volunteers who work hard. Will the Minister join me in thanking the volunteers in my constituency at the play and resource centre PARC, Braintree Foyer, the Archer centre and Rethink Mencap? Does he agree that it is the volunteers who work for the various charities and community groups in all our constituencies who form the backbone of our society and deserve our collective thanks?

[Mr Hurd]

I wholly endorse that and join my hon. Friend in his recognition of and congratulations to his local volunteers. Few Governments have done more to actively encourage volunteering, and I reiterate my encouragement to colleagues to step forward and nominate individuals for the Points of Light awards.

[Philip Davies (Shipley) (Con)]

7. Whether he plans to transfer any civil service jobs overseas.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The Cabinet Office is not planning to transfer any civil service jobs overseas.

[Philip Davies]

I very much support the Minister’s efforts to reduce costs and increase efficiency in the civil service. Can I tempt him to go further on this particular issue and completely rule out the transfer overseas of any jobs currently undertaken by civil servants in the UK, which I believe would be a step too far?

[Mr Maude]

I hear what my hon. Friend says, but I reiterate what I said earlier. The approach we take is the same as the last Government: we need to be efficient and jobs should be undertaken in the place where they can best be done. Normally that will be in Britain, and the more efficient we are, the more jobs we will create in Britain.

[Andy McDonald (Middlesbrough) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

My responsibilities are for the public sector efficiency and reform group, civil service issues, industrial relations in the public sector, Government transparency, civil contingency, civil society and cyber-security.

[Andy McDonald]

Contrary to responses earlier, it was recently reported that the Cabinet Office has spent £30 million on staff redundancy packages and another £30 million to plug the gap created by hiring agency staff. Given that the Cabinet Office is supposed to be responsible for efficiency savings, why has the Minister wasted so much money?

[Mr Maude]

I think the hon. Gentleman may be a little confused. There is no correlation between jobs lost and jobs replaced. We need to have the skills in the civil service to do what needs to be done to serve Britain today so that we can win in a very competitive world. That means that some jobs become redundant, but some new capabilities are needed. No Government or organisation I have ever come across think that they sit in a steady state and never recruit new people. [Interruption.]

[Mr Speaker]

Order. I can scarcely hear the mellifluous tones of the Minister. There are far too many noisy private conversations taking place in the Chamber. I am sure that both the House and the nation will wish to hear Mr Philip Davies.

[Philip Davies (Shipley) (Con)]

T3. In 2011-12, the TaxPayers Alliance found that trade unions received a subsidy from taxpayers of £113 million a year through direct grants and facility time. Does the Minister agree that any part-time or full-time union work should be paid by the unions rather than the taxpayer? Will he update the House on the progress made to reduce that unnecessary cost to the taxpayer?

[Mr Maude]

We have made considerable progress. In the civil service alone, some £30 million of taxpayers’ money was being spent on subsidising union representation. That is perfectly proper if duties relate to employment, but this was going way, way beyond. We have reduced significantly the number of full-time representatives. There were 250 in central Government. That is now down by nearly 170.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Following the launch of Labour’s digital government review, which is focused on empowering people, and after four years of this “digital by default” Government, with 16 million UK citizens lacking basic digital skills, the Minister has finally announced a digital inclusion strategy. The digitally excluded are vulnerable to cybercrime, but are punished by this Government for not using their digital services. Will the Minister explain why his inclusion strategy excludes 7 million of our fellow citizens from the digital future?

[Mr Maude]

I am sorry that the hon. Lady takes that view. For one digital service that we provide—the lasting power of attorney—the assisted digital for those who are not online is provided by a number of groups that specifically help elderly people. Where there is a digital service, we are insistent that there is an assisted digital service for those who are not currently online. We want to do much more to increase digital inclusion, so that more people are online.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

T5. Will my right hon. Friend update the House on the progress that has been made in reducing the running costs of the Government estate?

[Mr Maude]

We have made very considerable reductions. No leases can be signed anywhere in Government, nor any break point passed, without my agreement. That has enabled us to reduce significantly the amount of property occupied by central Government. We also have a big programme that is making significant progress in co-locating all parts of the public sector in one place in more and more towns around the country.

[Fiona Mactaggart (Slough) (Lab)]

T2. As the Minister responsible for propriety in Government communications, was the Cabinet Secretary consulted on the Prime Minister’s recent letter to 2 million people, which used language borrowed directly from the Conservative party’s website? How much did that cost?

[Mr Maude]

It is perfectly proper for Government Ministers to use the same language in Government communications as they use in their political communications. Ministers do not suddenly not become politicians when they speak as Ministers. It is just possible that I may have used today some of the same language as I would use in a purely political environment.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

T6. Brilliant social enterprises such as the Oxford student hub propeller project can lead the way in finding innovative solutions to social problems, but they struggle to find sustainable funding. Can the Minister tell me what progress is being made on increasing the availability of social impact bonds, which could make all the difference?

[The Minister for Civil Society (Mr Nick Hurd)]

My hon. Friend is entirely right: we have fantastic social enterprises in this country and they need easier access to capital. This country leads the world in developing social investment. Today we are launching two new funds that will unlock more social impact bonds to deliver what we expect to be better results for thousands of young people at risk of becoming NEET.

The Prime Minister was asked—

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Q1. If he will list his official engagements for Wednesday 30 April.

[The Prime Minister (Mr David Cameron)]

I am sure the whole House will wish to join me in paying tribute to Captain Thomas Clarke of the Army Air Corps, Flight Lieutenant Rakesh Chauhan of Joint Helicopter Command, RAF Odiham, Acting Warrant Officer Class 2 Spencer Faulkner of the Army Air Corps, Corporal James Walters of the Army Air Corps, and Lance Corporal Oliver Thomas of the Intelligence Corps, a reservist who also worked as a research assistant to my hon. Friend the Member for Brecon and Radnorshire (Roger Williams). These tragic deaths remind us of the continued commitment and sacrifice of our armed forces, and I know that our deepest sympathies are with their families at this very difficult time.

I am sure that the whole House will also want to join me in paying tribute to Ann Maguire, who was stabbed to death in her Leeds classroom on Monday. It is clear from the tributes paid that she was a much-loved teacher who had worked at the school for over 40 years. She cared so much about her pupils that she would come in on her day off to help prepare them for exams. Our thoughts are with her family, her friends and the entire school community in Leeds, who have been left devastated by this truly shocking and appalling tragedy. A criminal investigation is under way, and everything that can be done to get to the bottom of what happened at the school will be done.

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

[Mr Thomas]

I very much associate myself with the Prime Minister’s tribute to the servicemen who lost their lives in Afghanistan last week, and to Ann Maguire who lost her life in the classroom.

May I ask him about something different? Last week, the Institute for Fiscal Studies revealed that the Government’s decision to treble tuition fees will cost taxpayers more than the system it replaced. Is this disastrous policy a symbol of the Government’s long-term economic plan?

[The Prime Minister]

What the policy has enabled is another expansion of higher education. That is what we are seeing under this Government. All the forecasts from the Labour party—that fewer people would apply to university, for example—were wrong. We were told that people from low-income backgrounds would not apply to university—those forecasts were wrong. Unlike other countries, we have put in place a system for tuition fees, which means that we can expand our universities and go on winning in the global race.

[Roger Williams (Brecon and Radnorshire) (LD)]

I would like to thank the Prime Minister—and, indeed, the whole House—for paying tribute to the five men who recently died in Afghanistan. In particular, I pay tribute to Lance Corporal Oliver Thomas, who worked for me in Westminster. He was an outstanding young man, who was well liked and held in such high regard by everyone who knew him and worked with him. The loss bears particularly heavily on his parents and family and, indeed, on his friends who grew up with him in Brecon and Kington. I am sure the Prime Minister will want to join me in praising all our reservists who, like Oliver, face all the risks that our armed forces experience—and sometimes, sadly, pay the ultimate price.

[The Prime Minister]

My hon. Friend is absolutely right to pay tribute to Lance Corporal Oliver Thomas. It is a reminder of the sacrifices we have borne in Afghanistan. This looks as if it was a tragic accident but we will get to the bottom of what happened. He is absolutely right, too, to mention how our reservists in all three forces serve alongside their regular colleagues and take all of the risks. In Afghanistan, the reservists have proved again and again that they are people of huge quality, ability and courage. As we go forward and expand our reserves, I hope that everyone in our country—particularly businesses, the public sector, local councils and others, including the civil service—will do everything they can to make sure that reservists are welcome in their businesses and supported in the vital work they do for our country.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Captain Thomas Clarke of the Army Air Corps, Flight Lieutenant Rakesh Chauhan of Joint Helicopter Command, RAF Odiham, Acting Warrant Officer Class 2 Spencer Faulkner of the Army Air Corps, Corporal James Walters of the Army Air Corps, and Lance Corporal Oliver Thomas of the Intelligence Corps, who were tragically killed. Those deaths are a tragic and poignant reminder of the sacrifices made by our armed forces, including reservists, in serving our country with bravery and distinction. All our thoughts go to the friends of those whom we lost, including the hon. Member for Brecon and Radnorshire (Roger Williams). We share his loss, and our deepest sympathy goes to the families of those who were killed.

Let me also join the Prime Minister in paying tribute to the teacher, Ann Maguire, who was murdered in her classroom on Monday. That was an appalling tragedy. It is clear from the testimonies of those who have spoken out since she died that she was an inspiration to those whom she taught. All our thoughts are with her family and friends, and with the teachers and pupils at the school.

Yesterday, for the first time, we learnt the names of some of the 16 investors, including hedge funds, which were given preferential access to Royal Mail shares and sold one third of them. How were those lucky few chosen?

[The Prime Minister]

What we are talking about is an exercise in privatising Royal Mail that has been a success for our country. A business that lost £1 billion under Labour has now paid money back to the taxpayer, and is making profits. The people whom we should be praising are the 140,000 employees of Royal Mail who are now, under this Government, shareholders in the business for which they work.

[Edward Miliband]

We have had no answer to the question, Mr Speaker. The Royal Mail share price is currently 50% above the level at which it was sold. Only the Prime Minister would want to be congratulated on losing the taxpayer £1 billion.

Each of those chosen few investors was given, on average, 18 times more shares than other bidders, on the basis that, in the words of the National Audit Office, they would provide

“a stable long-term… shareholder base”,

and would not be—in the words of the Business Secretary—“spivs and speculators”. Can the Prime Minister tell us what assurances, in return for their golden ticket, those investors gave us that they would hold the shares for the long term?

[The Prime Minister]

First, the right hon. Gentleman says that people were given shares. They paid for shares. Secondly, he again raises the issue that there was some sort of agreement. There was no agreement.

At the end of the day, the right hon. Gentleman should recognise that a business which lost money, and which he tried to privatise in government but failed, is now in the private sector, making money and succeeding for our country, and its employees are now shareholders. Is it not interesting that, given the growth in our economy, the fall in unemployment and the reduction in the deficit, he is reduced, like old Labour, to complaining about a successful privatisation?

[Edward Miliband]

No, Mr Speaker. I am raising an issue about a rip-off of the taxpayer, which the British people know when they see it. The reason this matters—[Interruption.] The reason this matters—[Interruption.]

[Mr Speaker]

Order. The orchestrated barracking is very predictable and also incredibly tedious, but it will not stop us getting through Prime Minister’s questions; it just means that it will take a bit longer. Members should calm down, and take a tablet if necessary.

[Edward Miliband]

The reason this matters is that the sale was grossly undervalued. Shares that were sold for £1.7 billion on privatisation are now worth £2.7 billion, and who cashed in? Twelve of the 16 so-called long-term investors made a killing worth hundreds of millions of pounds within weeks.

Yesterday, the representative of the bank that sold the shares said there was an “understanding” with those investors. [Interruption.] That is what it says on the record, Mr Speaker. He said that there was an understanding with those investors about their long-term commitment to Royal Mail. So why were they allowed to make a fast buck?

[The Prime Minister]

We are being given lectures on taxpayer value from the people who sold our nation’s gold at the bottom of the market. The right hon. Gentleman talks about ripping off the taxpayer, but it was he who left an 11% budget deficit after the biggest banking bail-out in Britain’s history.

These are exactly the arguments that Michael Foot made about the privatisation of the National Freight Corporation. They are exactly the same arguments as Neil Kinnock made about British Telecom and British Airways. It pleases the Back Benchers, it excites the trade unions, but it is utterly meaningless. Is the right hon. Gentleman recommitting to renationalising the Post Office? No, of course not. He is just playing to the gallery because he cannot talk about the success of our economy.

[Edward Miliband]

The Prime Minister should listen to Members on his own side. What did the hon. Member for Northampton South (Mr Binley) say yesterday? He said that this privatisation had “let people down”. He said:

“The interests of the taxpayer were not taken into account”.

He has also called it “unethical and immoral”.

[Mr Brian Binley (Northampton South) (Con)]

indicated assent.

[Edward Miliband]

He is nodding his head. That is what the Prime Minister’s own side think of it. He talks a lot about the postal workers, so this is very interesting: there were no conditions on the hedge funds, but there were conditions on other groups such as the postal workers. Can he explain why postal workers were told they could not sell their shares for three years but hedge funds were told they could cash in on day one?

[The Prime Minister]

The Post Office workers were given their shares, and it is right that they were given their shares—let us celebrate the popular capitalism. I thought the right hon. Gentleman believed in empowering workers. We now have 140,000 workers who have got those shares. On the risk to the taxpayer, he ought to reflect on this—[Interruption.]

[Mr Speaker]

Order. There is far too much noise in the Chamber. Ms Mactaggart, you are an illustrious product of the Cheltenham ladies’ college. I cannot believe they taught you there to behave like that.

[The Prime Minister]

You are right, Mr Speaker, that there is a lot of history in this shouting, because of course in the past with all these privatisations we had the shouting of the Kinnocks, the shouting of the Prescotts and the shouting of the Straws. Over Easter, I was looking at Labour’s candidates and I saw that son of Kinnock is coming here, son of Straw wants to get here and son of Prescott wants to come here. It is the same families with the same message—it is literally the same old Labour. That is what is happening.

The right hon. Gentleman asked about taxpayer value, and here is what the National Audit Office said:

“Privatisation has reduced taxpayer risk to support the universal postal service”.

This is a good deal for taxpayers because this business was losing £1 billion and it is now making money, paying taxes and gaining in value—this is good for our country but bad for Labour.

[Edward Miliband]

The Post Office was actually making a profit when the Government privatised it. What have we discovered today? It is one rule for the postal workers and another rule for the hedge funds. Who runs these hedge funds? The Government have been very coy about who runs these hedge funds. None other than the Chancellor’s best man runs one of them. It is one rule if you deliver the Chancellor’s best man’s speech and it is another rule if you deliver the Chancellor’s post.

[The Prime Minister]

What this shows is that the right hon. Gentleman cannot talk about the deficit, because it is falling; he cannot talk about the economy, because it is growing; and he cannot talk about jobs, because there are 1.5 million more people in work. So he is painting himself into the red corner by talking only about issues that are actually successes for the Government but which appeal to the trade unions, the left wingers behind him and the people who want to play the politics of envy. That is what is happening in British politics, and everyone can see it. He has nothing to say about the long-term economic plan which shows Britain is on the rise and Labour is on the slide.

[Edward Miliband]

What we know is there is a cost of living crisis in this country—[Interruption.] Oh, they do not think there is a cost of living crisis. Why not? Because they stand up for the wrong people. The more we know about this privatisation, the bigger the fiasco it is: a national asset sold at a knock-down price; a sweetheart deal for the City; and the Government totally bungled the sale. Everything about this privatisation stinks.

[The Prime Minister]

Six questions and not a mention of GDP; not a mention of what happened to employment figures while we were away; and not a mention of the fact that the deficit is getting better. We know that the right hon. Gentleman has a new adviser from America. It is Mr Axelrod, and this is what the right hon. Gentleman has been advised to say. Let me share it with the House as it is excellent advice. It is that

“there’s a better future ahead of us”—

but we must not—

“go backward to the policies that put us in this mess in the first place.”

I do not know what Labour are paying him--

[Mr Speaker]

Order.

[The Prime Minister]

I have not finished—[Interruption.]

[Mr Speaker]

In response to that question, the Prime Minister has finished, and he can take it from me that he has finished.

[Dr Liam Fox (North Somerset) (Con)]

From the cyber-attack on Estonia to the invasion of Georgia and the recent events in Crimea, we have seen a clear pattern of behaviour from the Kremlin, and the west has allowed wishful thinking to take the place of critical analysis. Given that defence exports from the EU to Russia have amounted to about €700 million in the past three years, not counting the €1.2 billion order for French warships, is it not about time that they were targeted for EU sanctions?

[The Prime Minister]

My right hon. Friend is absolutely right on that issue. We have set out a clear set of sanctions as a result of Russia’s behaviour towards Ukraine. We have taken a series of steps so far in terms of putting asset freezes and travel bans on named individuals. We have taken a series of diplomatic and other steps, and we have set out the so-called stage 3 sanctions that should be taken if further incursions and further destabilisation of south and eastern Ukraine are set out, and restrictions on arms sales should certainly be part of that.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Q2. The Prime Minister promised that by the end of this Parliament a third of his Cabinet would be women. We know that the former Culture Secretary had to go, but now only three of his 22 Departments are run by women. Does he agree with the new Culture Secretary that that is because Government appointments should always be made on merit?

[The Prime Minister]

What I said was that I wanted to see a third of my Front-Bench Ministers being women at the end of a Conservative Government. We have made some important progress on the numbers of people on the Front Bench. With respect to my coalition partner, I have to say that, in terms of Cabinet numbers, the Liberal Democrats need to do a bit more to pull their weight on that issue, but I hope to make further progress.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Reverting to the subject of Royal Mail, as the leader of the stockbroking team that brought British Gas to the market and as the author of the phrase “Ask Sid”, may I tell the Prime Minister that the Opposition’s questions about, and their criticisms of, the way in which the Royal Mail launch was handled show their total ignorance of City markets? The fact is that when one tries to make an immense sale, one has to take infinite trouble to find people to underwrite it, and they are not able to prophesy what stock markets will be like a week ahead. Therefore, the prudent way in which this sale was handled was very sensible—[Interruption.] Do stop waving. You are waving goodbye.

[Mr Speaker]

Order. People should not gesticulate at the right hon. Gentleman. I know that he is nearing his completion.

[Sir Peter Tapsell]

If an issue fails, those institutions responsible for its launch are ruined.

[The Prime Minister]

The Father of the House makes an important point: when state-owned industries are privatised, if they are sold for less than the price set out, that is written off as a failure, and if they are sold for anything more than the price, you are accused of undervaluing the business. That has always been the way and, as I said, that is what Labour said about British Airways, British Telecom and British Aerospace. Labour opposed every single move to build a strong, competitive private industrial sector in our country and that continues today.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Q3. Mr L from Mitcham would like to be a policeman, but he only works part time and cannot afford the £1,000 bobby tax he needs to pay to apply to join the Met. His mum and dad are foster carers and would give it to him if they had it. May I ask the Prime Minister why, if my constituent is capable of passing the academic, fitness and testing requirements of the police, his bank balance should stop him? When did becoming a Metropolitan police officer become an aspiration for the few rather than the many?

[The Prime Minister]

The hon. Lady has asked questions about what she calls the bobby tax. Let me make three points. First, it is not a tax; secondly, it is not a barrier to recruitment; and, thirdly, recruitment is taking place in the Metropolitan police. That is what is happening: we are seeing people being recruited. As is happening, people who want to join the Metropolitan police can get assistance with the qualification that they now require.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Q14. Last week, we marked the bard’s nativity, four hundred years and fifty ere the swan of Avon breathed his first. Stratfordians on Saturday processed through their town, bearing rosemary in memory of their immortal son, and here in your apartments last night, Mr Speaker, young Stratford scholars staged a scene from Shakespeare’s works—amazed a noble multitude with their art. Mr Speaker, could this right honourable man, the captain of our state, lend his help to make our national poet’s birth a national day? Could he too disclose before the House what Shakespeare means to him?

[The Prime Minister]

I thank my hon. Friend for that beautifully and brilliantly crafted question about the anniversary of Shakespeare’s birth. It is a moment of celebration not just here in Britain but across the world, where Shakespeare’s works are gaining a wider understanding and distribution. I will not attempt quotes such as those that my hon. Friend brought out in his question, but I would say to any politician that if they read Henry V’s speech before Agincourt and it does not inspire them and drive them on, I cannot think what will.

[Alex Cunningham (Stockton North) (Lab)]

Q4. When will the Prime Minister publish the regulations to introduce standard packaging for tobacco products and ban smoking in cars when children are present?

[The Prime Minister]

I cannot pre-judge the Queen’s Speech, but we have said that we want to take action on this front and we will.

[Jason McCartney (Colne Valley) (Con)]

Q13. Textile, engineering, and food and drink manufacturing is booming in Huddersfield and Colne Valley. For example, Camira Fabrics from Meltham is producing the upholstery for Boris’s Routemaster buses, which have been very busy this week. The company is creating jobs and apprenticeships. Will the Prime Minister praise Camira Fabrics and the other local firms that have agreed to attend my first ever jobs fair in Holmfirth on Friday 20 June?

[The Prime Minister]

I pay tribute to my hon. Friend for holding these job fairs. A number of Members of Parliament have taken that approach and have seen real benefits in their local areas as businesses come forward to pledge apprenticeships and to take people on, and are brought together with people who are looking for work. Since the recess, we have seen a series of figures on our economy: growth is now running at over 3%, 1.5 million of our fellow countrymen and women are in work since this Government came to power, inflation is at a five-year low and business confidence is at its highest level since the early 1970s. There is still a lot of work to do and there is absolutely no complacency. The long-term economic plan is not complete, but it is well on its way.

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

Q5. Before he was elected, the Prime Minister said that “if they’d let me” he would put a wind turbine on No. 10 Downing street, making use of the cheapest and most developed form of renewable energy. Last week, he announced that his party wants to end support for onshore wind even though the Government’s own survey this week showed that 70% of the public now support it. What changed his mind?

[The Prime Minister]

What is changed is that we have seen a massive increase in onshore wind generation in our country. We will achieve, through what is in the planning system and under construction, the provision of approaching 10% of our electricity demand through onshore wind. The question is then whether it is right to continue to overrule local planners and local people and whether it continues to be right to put taxpayers’ money in after we have built out that onshore wind provision. I do not believe that it is, and the Conservative manifesto will make that very clear for local communities. Other parties will have to make their own choices.

[Stephen Lloyd (Eastbourne) (LD)]

In the past few weeks in Eastbourne, over £160 million of private investment has been announced; we have had 3,000 new apprentices since the general election and unemployment is almost 20% down on this time last year. In short, in Eastbourne we are coming through tremendously successfully from the difficult economic downturn. Does the Prime Minister agree that where Eastbourne goes, the UK follows?

[The Prime Minister]

I am glad to hear that Eastbourne is leading the way, particularly on apprentices; 1.6 million apprentices have started under this Government. Our target is 2 million. We want to see a particular expansion of the higher-level apprenticeship schemes, but it is a major part of delivering our long-term economic plan.

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

Q6. I am sure that the Prime Minister has read last week’s excellent report by the all-party group on ticket abuse, which set out how consumers are getting a raw deal from the secondary market. The question is, whose side is the Prime Minister on—that of his new Culture Secretary, who praised ticket touts as “classic entrepreneurs”, or the millions of ordinary fans who are sick and tired of being ripped off?

[The Prime Minister]

I have not seen the report that the hon. Lady mentions. I will have a look at it and I will discuss it with the Culture Secretary, my hon. Friend the Member for Bromsgrove (Sajid Javid), who I welcome to the Cabinet. I noticed that Labour seemed to criticise his appointment—I am not quite sure on what basis. I think he will do an excellent job for our country and I am very happy to study the report that the hon. Lady mentions.

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

Q12. The number of unemployed jobseekers in Bristol North West has fallen by 25% in the past year, but there is obviously still much more to do. I am also hosting a jobs fair this Friday, to try to make that number even lower. In the light of the Chancellor’s welcome commitment to full employment, what else are the Government doing to make that ambitious aspiration a reality?

[The Prime Minister]

Already 1.7 million new private sector jobs have been created, far outstripping the loss of public sector jobs, so there are 1.5 million more people in work altogether. We have seen an increase in full-time work, which is very welcome because people often want to work more hours than they are currently able to work. In terms of driving further employment growth, the clear message to businesses is that they have the £2,000 off their national insurance bill, which can help people to take on new employees; there is the cut to business rates for many shops in our high streets, which is also very welcome; and from next year, businesses will not have to pay any national insurance contributions at all in respect of anyone under the age of 21. We want to see more people in work, and to raise even further that level of aspiration in our country.

[Mark Hendrick (Preston) (Lab/Co-op)]

Q7. Nuclear power is a very important component of the UK’s energy mix, because it produces large amounts of electricity with very little CO₂. This Government call themselves “the greenest government ever” but have ceded control of our nuclear energy policy to foreign companies. What will the right hon. Gentleman’s Government do to ensure that nuclear power stations such as Hinkley Point C, which is already five years behind schedule, are brought on line on time?

[The Prime Minister]

I am sure the hon. Gentleman has a constituency interest in this, because the north-west has very important energy assets for our country. The last Labour Government were in power for 13 years; they never built a nuclear power station, nor made any progress on moving towards doing so. Under this Government, we have got Hinkley Point going ahead. We have got the exciting developments at Wylfa in Anglesey. I believe there is the opportunity of more to come. That is what we are doing: putting our money where our mouth is and ensuring that we have nuclear power providing a high-quality base load power which is carbon-free.

[Mr Stewart Jackson (Peterborough) (Con)]

Q8. The Peterborough effect is back. Business confidence is returning, unemployment is falling and more new jobs are coming to my constituency. Much of that new prosperity relies on infrastructure spending financed by private pension funds. Does my right hon. Friend share my regret that Labour’s raid on company retirement funds, the brainchild of the shadow Chancellor, estimated last week by the Office for Budget Responsibility to have amounted to £118 billion, not only wrecked private pensions but hobbled vital private sector infrastructure investment in our country for a generation?

[The Prime Minister]

I am delighted to hear about the Peterborough effect—employment rising, unemployment falling, more people taking on apprenticeships, and businesses expanding. That is what we see across our country and it is fascinating that, 29 minutes into Prime Minister’s questions, not a single Labour Member of Parliament has mentioned GDP or unemployment, growth in our country or our economic plan. They do not want to talk about our economy because they can see it is getting better under this Government.

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

Q9. Will the Prime Minister make representations in relation to the cases of Princesses Sahar and Jawaher, who have been held under house arrest in Saudi Arabia for more than 10 years and have been refused access to food for more than 40 days as a result of speaking to the western media? Does he agree with me that human rights and women’s rights should be our priorities in our relationship with Saudi Arabia?

[The Prime Minister]

I read the report, as the hon. Lady did; I share her concern about the case and I will certainly look into it further. In our relations with all countries, we give proper priority to human rights and the rule of law, and we raise those issues with all countries we meet with.

[Lorely Burt (Solihull) (LD)]

Could I gently tell the Prime Minister that Liberal Democrat women not only pull their weight, but are perfectly ready and willing to punch above their weight?

I recently hosted the premiere of “The Honour Diaries”, a hard-hitting film about the honour culture and what can be done to girls and women in its name. I know that issues of female genital mutilation and early and forced marriage are hugely important to my right hon. Friend, so will he please consider viewing the film and showing it at the girls summit on those issues, which he is hosting in July?

[The Prime Minister]

First, I thank the hon. Lady for the work she does, particularly on women in enterprise with the Department for Business, Innovation and Skills, which is vital. The point I was making is merely that I know that all parties in this House want greater gender equality in terms of representation, presence in Government and the rest of it, and all parties have made progress. My party has made progress, but there is more that we want to do.

On the specific concerns about FGM and preventing sexual violence in conflict, we are taking huge steps this year in raising the profile of those issues, and I pay tribute to the leadership shown by the Foreign Secretary. As a country that has met the target of 0.7% of GDP going in aid, we are able to push this item right up the agenda, which we will do during the course of the year.

[Sheila Gilmore (Edinburgh East) (Lab)]

Q10. Yesterday, Ukrainians in Scotland wrote to Alex Salmond expressing disgust and astonishment at the First Minister’s statement that he admired President Putin. Will the Prime Minister support the Scottish Ukrainian community and Labour in condemning those statements in support of a regime that oppresses its own minority groups and silences its critics?

[The Prime Minister]

I agree wholeheartedly with the hon. Lady. I think that what Alex Salmond said was a major error of judgment and that all of us in this House should be supporting the Ukrainian desire to be a sovereign, independent country and to have the respect of the international community and party leaders for that ambition.

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

This morning, I met Joe’s Jumpstart, a charity campaigning for defibrillators in schools. It is excellent news that the Government are making progress on that. Will my right hon. Friend congratulate North Lincolnshire council, which has worked with my hon. Friend the Member for Cleethorpes (Martin Vickers) and me and is this year committing £75,000 to a programme of up to 50 community public access defibrillators, which will save lives?

[The Prime Minister]

That sounds like an excellent campaign. We have, as a country, taken a lot of steps forward in making sure that that sort of equipment is more readily available, because if people who have suffered a heart attack are found quickly, in the golden minutes or golden hour after it strikes, their lives can be saved. It sounds like an excellent idea and I join my hon. Friend in paying tribute to North Lincolnshire council.

[Mr George Howarth (Knowsley) (Lab)]

Q11. Over the past 12 months, the use of food banks in Knowsley has increased by 93%, and social landlords report that rent arrears have gone up by 8.4%. Does the Prime Minister accept that the Government’s own policies are driving up debt and poverty in places like Knowsley?

[The Prime Minister]

What I would say to the right hon. Gentleman is that the best route out of poverty is work, and we should welcome the fact that there are 1.5 million more people in work. Looking at the figures, of course, yes, he is right that food bank usage has gone up, not least because food banks are now properly advertised and promoted, not only by Jobcentre Plus but by local authorities.

If the right hon. Gentleman wants to deal in facts, the OECD has shown that the proportion of people struggling to buy food in the UK has actually fallen since before Labour’s great recession. I know that Opposition Members want to make this argument about poverty and inequality in Britain, but the statistics do not back them up. Inequality has fallen compared with when Labour was in office; there are fewer people in relative poverty, and fewer children in relative poverty. The picture Labour Members want to paint—because they cannot paint one of an economy that is not growing, or one of people who are not getting jobs—is wholly false.

[Mr Brooks Newmark (Braintree) (Con)]

With the service, manufacturing and construction sectors all growing at 3% plus, does the Prime Minister agree that the economy is well on the road to recovery and rebalancing as well?

[The Prime Minister]

I am grateful for my hon. Friend’s question. Recent figures showed that manufacturing was one of the faster-growing sectors of our economy, which I welcome, but what the Chancellor said so powerfully in his Budget is that we are not resting on our laurels or saying that the job is done. There is more work to address the fundamental long-term weaknesses of the British economy: we need to manufacture more; we need to export more; we need to save more; and we need to invest more. Unlike the Labour party, we have policies that promote all those things.

[Mr Speaker]

I will allow some injury time, because there has been so much noise.

Not on this occasion from her seat, but on her feet, I call Fiona Mactaggart to speak.

[Fiona Mactaggart (Slough) (Lab)]

Thank you very much, Mr Speaker. Has the Prime Minister seen the survey showing that two thirds of local councils are either dimming or cutting their streetlights at night? Does he think that women are feeling safe in their local communities at night under his Government?

[The Prime Minister]

I have, like all hon. Members who take part in election campaigns, been lobbied on this issue on both sides of the argument. It is an issue for local determination. I want to see good street lighting, but we should also listen to the arguments from the police and others about the effect that this has.

[Mrs Anne Main (St Albans) (Con)]

I congratulate my right hon. Friend and the Chancellor on the long-term economic prosperity that has come forward. In areas such as St Albans, barely one house is worth under £250,000. Can I make a plea through the Prime Minister that we consider stamp duty thresholds around that limit to help young people to get on the housing ladder?

[The Prime Minister]

We are very happy to look at the issues that my hon. Friend raises, but the weapon that we have used to try to help young people who do not have rich parents but who can afford mortgage payments is Help to Buy, because it helps them to get together a deposit of 5%, rather than a 15% or 20% deposit. Labour Members are shouting about this; they should be welcoming this scheme, which is expanding aspiration and growth in our country. That is what they should be promoting and that is the approach that we will take.

Pub Rent Prices (Derbyshire)

Wednesday 30th April 2014 Commons Chamber

Pauline Latham (Mid Derbyshire) (Con)

- Hansard - - Excerpts

The petition, which has been signed by more than 430 people, relates to Claire and Scott Muldoon, who face eviction from the Patternmakers Arms.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners believe that it is unfair that Claire and Scott face eviction from Patternmakers Arms, a well-attended and happy pub, as a result of unreasonable increases in rent prices and further that the Government have consulted on establishing a Statutory Code and an independent Adjudicator for the pub sector to govern the relationship between large pub companies and their tenants.

The Petitioners therefore request that the House of Commons urges the Government to establish a Code to govern the relationship between large pub companies and their tenants as a matter of urgency.

And the Petitioners remain, etc.

[P001343]

HS2 Proposals for High-Speed Rail

Wednesday 30th April 2014 Commons Chamber

Natascha Engel (North East Derbyshire) (Lab)

- Hansard - - Excerpts

I would like to present a very topical petition from the Killamarsh and Renishaw HS2 Action Group, on behalf of the residents of Killamarsh and Renishaw. It calls on the House of Commons to reject the High Speed Rail (London - West Midlands) Bill, and I agree.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners believe that the HS2 rail plan for high speed rail will bring little benefit to the UK and will cost upwards of £33 billion to begin with; further that the Petitioners believe that the plans are badly thought through and will reap permanent untold damage, have no environmental benefits, are little use to this country and are an unaffordable luxury at this time; and further that the Petitioners believe that there are many more beneficial, viable, economically and environmentally sound proposals which should be prioritised ahead of HS2.

The Petitioners therefore request that the House of Commons reject the High Speed Rail (London - West Midlands) Bill.

And the Petitioners remain, etc.

[P001345]

Speaker’s Statement

Wednesday 30th April 2014 Commons Chamber

12:37

[Mr Speaker]

I have to inform the House that I have received the following letter from the Clerk of the House:

“Dear Mr Speaker,

I write to inform you that I have indicated to Her Majesty The Queen that I wish to surrender my Patent as Clerk of the House at the end of August this year. I shall then have served the House for 42 years, over eleven Parliaments, and for the last decade at the Table.

As Clerk of the House I have been fortunate indeed to have the best job in the service of any Parliament—indeed one of the best jobs in the world.

I have been lucky enough to have been involved in most of the innovations in the procedure and business of the House over the last ten years. Whatever the vicissitudes of Parliamentary life, and whatever brickbats may be thrown at it, I can truly say that the House now is a more effective scrutineer of the executive, and more topical, relevant and independent-minded, than I have ever known it.

As Chief Executive of the House Service of some 2,000 staff I have had the great privilege of leading a remarkable group of talented people, deeply committed to the House and, whatever their role here, all rightly proud of being stewards of the central institution in our democracy.

That commitment and pride has been a feature of working life here for as long as I can remember; but in recent years it has been coupled with increasing levels of professionalism and teamwork and an ever clearer focus on delivering the services required by the House and its Members, as well as reaching out, through education and information, to the world beyond Westminster.

I am so grateful to have had, throughout my service, and especially over the last three years, the support and friendship of Members on all sides of the House, and especially of the occupants of the Chair, as well as the happy camaraderie, support and counsel of my colleagues at all levels.

I have spent much of my career seeking to make the House and its work, and the work of its Members, better understood by those whom it serves: the citizens of the United Kingdom. For I believe that with understanding comes valuing, and with valuing comes ownership. And our citizens should feel pride in the ownership of their Parliament.

The House of Commons, across the centuries, has never expected to be popular, and indeed it should not court popularity. But the work it does in calling governments to account, and its role as a crucible of ideas and challenge, deserves to be better known, better understood, and so properly valued. So too does the work of individual Members: not only working for the interests of their constituencies and constituents, but often as the last resort of the homeless and hopeless, the people whom society has let down. This is a worthy calling, and should be properly acknowledged and appreciated.

This House is the precious centre of our Parliamentary democracy; and with all my heart I wish it well.

Yours sincerely,

Robert Rogers”

[Applause.]

That spontaneous reaction—

[Chris Bryant (Rhondda) (Lab)]

Is unparliamentary.

[Mr Speaker]

It may be unparliamentary, but it bears eloquent testimony to the esteem in which Robert is held.

In myself acknowledging the wisdom and dedication that the Clerk and Chief Executive of the House has demonstrated, I know that colleagues will wish me to assure them that there will be an opportunity to pay the traditional tribute to the Clerk at a later date. I should also mention, for the convenience of the House, that I shall naturally put in place a competition for the appointment of the Clerk’s successor.

Stop-and-Search

Wednesday 30th April 2014 Commons Chamber

12:42

[The Secretary of State for the Home Department (Mrs Theresa May)]

With permission, Mr Speaker, I would like to make a statement on the use of stop-and-search powers by the police. As I have told the House before, I have long been concerned about the use of stop-and-search. Although it is undoubtedly an important police power, when misused it can be counter-productive. First, it can be an enormous waste of police time. Secondly, when innocent people are stopped and searched for no good reason, it is hugely damaging to the relationship between the police and the public. In those circumstances it is an unacceptable affront to justice.

That is why I commissioned Her Majesty’s inspectorate of constabulary to inspect every force in England and Wales to see how stop-and-search powers are used, and it is why last year I launched a consultation to ensure that members of the public, particularly young people and people from minority ethnic communities, could have their say.

Today I am publishing a summary of the responses to the consultation and placing a copy in the House Library. The consultation generated more than 5,000 responses, and it was striking that those on the receiving end of stop-and-search had very different attitudes from those who are not. While 76% of people aged between 55 and 74 thought that stop-and-search powers are effective, only 38% of people aged between 18 and 24 agreed. While 66% of white people thought that stop-and-search powers are effective, only 38% of black people agreed.

The findings of the HMIC inspection were deeply concerning. The inspectorate reported that 27% of the stop-and-search records it examined did not contain reasonable grounds to search people, even though many of these records had been endorsed by supervising officers. If the HMIC sample is accurate, more than a quarter of the 1 million or so stops carried out under the Police and Criminal Evidence Act 1984 last year could have been illegal. This is not the only worrying statistic. Official figures show that if someone is black or from a minority ethnic background, they are up to six times more likely to be stopped and searched by the police than if they are white, and only about 10% of stops result in an arrest.

In London, thanks to the leadership of Sir Bernard Hogan-Howe, changes to stop-and-search show that it is possible to reduce the number of stops, improve the stop-to-arrest ratio, and still cut crime. Since February 2012, the Metropolitan police have reduced their overall use of stop-and-search by 20%, and they have reduced no-suspicion stop-and-search by 90%. In the same period, stabbings have fallen by a third and shootings by 40%. Complaints against the police have gone down and the arrest ratio has improved.

I want to see further progress in London and across the whole of England and Wales. I can therefore tell the House that I intend to revise Police and Criminal Evidence Act code of practice A to make it clear what constitutes

“reasonable grounds for suspicion”—

the legal basis on which police officers carry out the vast majority of stops. The revised code will emphasise that where officers are not using their powers properly, they will be subject to formal performance or disciplinary proceedings.

HMIC’s study on the use of stop-and-search revealed that more than half the police forces in the country are ignoring the requirement set out in Police and Criminal Evidence Act code of practice A to make arrangements for public scrutiny of stop-and-search records. This is an important duty that should empower local communities to hold police forces to account, so I have written to all chief constables and police and crime commissioners to tell them to adhere to the code. I have told them that if they do not do so, the Government will bring forward legislation to make this a statutory requirement.

Earlier today, I commissioned Alex Marshall, chief executive of the College of Policing, to review the national training of stop-and-search with a view to developing robust professional standards for officers on probation, existing officers, supervisors, and police leaders. I have asked the college to include in this work unconscious bias awareness training to reduce the possibility of prejudice informing officers’ decisions. As part of that review, I have also asked the college to introduce an assessment of officers’ fitness to use stop-and-search powers. I want this to send the clearest possible message: if officers do not pass this assessment, if they do not understand the law, or if they do not show they know how to use stop-and-search powers appropriately, they will not be allowed to use them. In order to save as much time as possible, I have asked my officials in the Home Office to work with chief constables and police and crime commissioners to explore the possibility of recording information on the use of stop-and-search via the new emergency services network.

In addition to all these changes, I can tell the House that this summer the Home Office and the College of Policing will launch a new “best use of stop-and-search” scheme. This scheme already has the backing of the Metropolitan police—the biggest user of stop-and-search in the country—and today I have written to all other police forces in England and Wales inviting them to sign up. Forces participating in the scheme will record the outcome of stops in more detail to show the link, or the lack of a link, between the object of the search and its outcome. This will allow us to assess how well forces are interpreting the

“reasonable grounds for suspicion”

they are supposed to have in order to use their stop-and-search powers in accordance with law. The scheme will also require forces to record a broader range of outcomes, such as penalty notices for disorder and cautions. This will allow us better to understand how successful each stop and search really is.

In order to improve the public’s understanding of the police, forces participating in the scheme will introduce lay observation policies, which enable members of the local community to apply to accompany police officers on patrol. The scheme will also require forces to introduce a stop-and-search complaints “community trigger” whereby the police must explain to the public how stop-and-search powers are being used where there is a large volume of complaints.

Forces participating in the scheme will make it clear that they will respect the case law established in Roberts by using no-suspicion stop-and-search when it is “necessary to prevent incidents involving serious violence”, rather than just “expedient” to do so. They will raise the level of authorisation to a chief officer and that officer must reasonably believe that violence “will” take place, rather than “may”, as things stand now. This will bring no-suspicion stop-and-search more into line with the stop-and-search powers under section 47A of the Terrorism Act 2000, and I hope it will reduce the number of no-suspicion stops significantly. The scheme will also require forces to limit the application of no-suspicion stop-and-search to 15 hours. It will also require them to communicate with local communities in advance and afterwards, so residents can be kept informed of the purpose and success of the operation.

In addition to these changes, in order to improve transparency and accountability, we will add stop-and-search data to the Government’s hugely successful and popular crime maps at www.police.uk. I have also asked Her Majesty’s chief inspector of constabulary to include the use of stop-and-search in HMIC’s new annual general inspections, which begin towards the end of this year. I have commissioned HMIC to review all other police powers similar to stop-and-search, including section 163 of the Road Traffic Act 1988, with a view to eliminating any unfair or inappropriate use of those powers.

The proposals I have outlined today amount to a comprehensive package of reform. I believe they should contribute to a significant reduction in the overall use of stop-and-search, better and more intelligence-led stop-and-search, and improved stop-to-arrest ratios. But I want to make myself absolutely clear: if the numbers do not come down, if stop-and-search does not become more targeted, if those stop-to-arrest ratios do not improve considerably, the Government will return with primary legislation to make those things happen, because nobody wins when stop-and-search is misapplied. It is a waste of police time. It is unfair, especially to young, black men. It is bad for public confidence in the police. That is why these are the right reforms and why I commend this statement to the House.

12:52

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

I thank the Home Secretary for early sight of the statement.

It is four years since the Equality and Human Rights Commission report described serious problems with the way stop-and-search was being used, describing disproportionate and inefficient use of stop-and-search and raising concerns about racial discrimination, because we know that, as the Home Secretary herself said, young people from ethnic minorities are six times more likely to be stopped. Since then there has been strong support across the House for reform, and it is welcome that the Home Secretary has finally come forward with proposals, but these proposals are extremely limited. They do not match up to her previous promises and they do not go far enough.

We all agree that the police need to have powers to stop and search individuals suspected of crime or to prevent a serious threat. Officers have to deal with serious problems such as teenagers in gangs carrying knives and organised criminals carrying guns or stolen goods or dealing deadly drugs, and intelligence-led targeting of suspected criminals helps to cut knife crime and youth murders. The right hon. Lady and I agree that too many searches, however, have not been targeted at all. Last year there were a million stop-and-searches; of those, only 10% led to an arrest. That means hundreds of thousands of stops and searches led only to resentment.

The Home Secretary and I agree that resentment creates barriers between communities and the police, particularly in ethnic minority communities that are most affected. That is bad for the innocent people who are regularly and unfairly stopped, bad for the police because it is an expensive waste of time, and bad for community safety because it undermines the very relationships we rely on for policing by consent.

The Home Secretary has powerfully described the problem, but four years on her proposals are very limited. They are welcome but they do not match the scale of the problem that she herself has described. A new assessment for police officers using stop-and-search is sensible and welcome. Revising the code of practice is fine, but it is not clear why she could not have done that straight after the EHRC report four years ago. Commissioning the College of Policing to review training is sensible, but she could have done that last July. A new “best use of stop-and-search” scheme that sounds very sensible will be only voluntary.

What about the things that we called for? Why is the Home Secretary not banning the use of targets given to police officers to stop and search a certain number of people? Why will she not put the guidance on race discrimination on a statutory basis? Why will she not insist that all forces abide by case law, rather than some? That is what she called for five months ago. She wrote to the Prime Minister in December saying that she wanted to change the law on section 60 stop-and-search

“so that the test for the power’s use is ‘necessary’ and ‘expedient’”.

We agreed, but instead all she is introducing is a voluntary scheme. She said then that she would raise the authorisation to a senior officer and strengthen the test for using the powers. We agreed. Instead, she has a voluntary scheme that forces do not even have to sign up to. Her plans have been frisked of serious substance and we need to know why the Home Secretary has backed down.

The right hon. Lady’s advisers have blamed regressive attitudes in No. 10, but why has she listened to them? She was right and they were wrong. These proposals are too weak and the Home Secretary has given in. Why is the Prime Minister ignoring the voice of ethnic minority communities? Why is the Prime Minister ignoring the impact on good policing, and why is he blocking sensible reform? Why is the Prime Minister not listening to his Home Secretary?

[Mrs May]

That was a disappointing response from the shadow Home Secretary, but it was characteristic of her. She complains that we are not going far enough and seems to imply that Labour would like to go further on stop-and-search, but perhaps I could remind her of some of the facts.

When Labour was in power, overall stop-and-search powers were not curbed; they were extended. Perhaps she has forgotten the stop-and-search powers introduced by the Terrorism Act 2000—powers extended by her Government and limited by this Government. When Labour was in power, section 60 powers were not curbed; they were extended. Has she forgotten the decision to extend the reasons for the police to be able to use section 60, the extension of the time limits for section 60, or the decision to reduce the rank of the authorising officer from superintendent to inspector for authorising section 60—powers extended by her Government and now limited by this Government?

When Labour was in power the PACE codes of practice were not strengthened; they were weakened. Has the right hon. Lady forgotten the date when breaching the PACE codes ceased to be a disciplinary offence? That date was April 1999, when her party was in power. Checks and balances were weakened by her Government and strengthened by this Government. When Labour was in power, no-suspicion stop-and-search did not go down; it went up. Section 60 stops went from fewer than 8,000 in 1997-98 to 150,000 in 2008-09, but down to 5,000 last year. [Interruption.] Stops under the Terrorism Act went from 32,000 in 2002-03 to 210,000 in 2008-09, but down to zero last year. No-suspicion stop-and-search was up under her Government but down under this Government.

When Labour was in power the overall use of stop-and-search did not fall; it went up from just over 1 million in 1997-98 to more than 1.5 million in 2008-09 and down to 1 million last year, so overall stop-and-search under the right hon. Lady’s Government went up and it has gone down under this Government. The right hon. Member for Delyn (Mr Hanson), a former policing Minister, was commenting from a sedentary position earlier. Speaking in 2008, he boasted: “We have increased stop and search powers”.

In 2007, when the Home Affairs Committee recommended:

“Alternatives to stop and search that might help the police engage better with young people should be considered”,

Labour’s Home Office replied, “We disagree.” Let us not rewrite Labour’s history when it comes to stop-and-search.

This is a serious subject. It is about the relationship between the public and the police, and it is about police time. The right hon. Lady mentioned a few issues to which I will turn. She mentioned the EHRC report from four years ago and seemed to imply that there had been no Government action since then. In fact, I have been working with HMIC, the Association of Chief Police Officers, chief constables and, in particular, the Metropolitan police since I became Home Secretary. I refer to my earlier point that the powers were extended under the right hon. Lady’s Government and have been reduced and limited under ours.

The right hon. Lady asked about the issue of officers having targets to stop and search people. I am clear that that is entirely unacceptable, and in my letter to chief constables I have told them that any such targets should be abolished.

The right hon. Lady asked about section 60 and why I was not introducing legislation now. She commented on the need to change the law so that stops can be used only when they are necessary to prevent incidents involving serious violence, rather than expedient. She obviously did not hear what I said in my statement and she obviously does not appear to know that the case law established in Roberts effectively does precisely that. There is no longer any need to legislate in that respect. The right hon. Lady commented on legislation to bring in action, but what we are doing will bring in action this summer, whereas legislation, as she well knows, would take a considerable amount of time.

The right hon. Lady talked about some of this just being voluntary. The Metropolitan police has signed up to it. I say to her that if she wants to see these changes and the “best use of stop-and-search” scheme extended, she should be encouraging the Labour police and crime commissioners in metropolitan areas to adopt these exact proposals, and I hope she will do just that.

I am afraid the right hon. Lady has just shown a complete lack of credibility on this issue as she carries on complaining and playing party politics. Whenever I have raised this subject in the past, she has said nothing about it. She only got interested in it when it appeared in the newspapers and she thought she could play party politics with it. She can play party politics, but I am interested in the national interest. I am clear that stop-and-search should be used less. It should be targeted and it needs to be used fairly. If that does not happen, we will bring back primary legislation. The difference between her party’s record and that of mine and this coalition Government is clear: we are serious about stop-and-search reform and she is not.

[Angie Bray (Ealing Central and Acton) (Con)]

May I welcome these important reforms? I am well aware that many people in ethnic communities in my constituency have said that they would like to work more closely with local police, but that they have felt alienated by the current stop-and-search policies and powers. I think these important reforms will make a real difference to that relationship.

[Mrs May]

My hon. Friend makes a very important point. That is precisely one of the problems. When stop-and-search is misused, it leads to a lack of confidence between the police and the public. If the police are willing to work with local communities to target the use of stop-and-search much more clearly and to inform them about why they are using it and what is happening as a result of having used it, we will see precisely the confidence my hon. Friend talks about.

[Keith Vaz (Leicester East) (Lab)]

I welcome the Home Secretary’s statement and endorse her plan of action, which is in keeping with a number of the recommendations of the Home Affairs Committee. She is right to single out the Commissioner of the Metropolitan Police, who has made a huge difference to the way in which this has been accepted and adopted.

Two things, however, trouble me. First, did the police give a reason in the responses to the consultation as to why this disproportionality existed in the stopping and searching of black and Asian individuals? We have known about it the whole time we have been in Parliament—the Home Secretary is not saying anything new—but did the police advance a reason as to why it was happening? Secondly, I endorse what the Home Secretary said about getting a voluntary arrangement, but if it does not work, what is the timetable for legislation?

[Mrs May]

I thank the right hon. Gentleman for his tone and the approach he has taken to this matter. Once again, he has taken a very responsible approach, in contrast to that taken by those on his party’s Front Bench. The consultation responses have been placed in the Library. I think I am right in saying that it did not specifically ask the police that particular question, so it does not appear in the responses. The right hon. Gentleman will be aware of some of the issues that the police have raised previously, including in relation to when the EHRC cases were raised.

I am not able to give the right hon. Gentleman a timetable at the moment. He will appreciate that as we approach the last Session of this Parliament, it is harder to give timetables on such matters, but I am clear that if the voluntary code does not work we will introduce primary legislation.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

I thank the Home Secretary for her statement and welcome in particular her commitment to a wider legislative review. Police powers in the Road Traffic Act 1988 are also disproportionately used to target young black men in cars. Does the Secretary of State agree that reforming stop-and-search culture and restoring the faith of black and minority ethnic groups in the system will be a process and not a single legislative event?

[Mrs May]

I am grateful to my hon. Friend for welcoming the wider work I have commissioned from HMIC. She is absolutely right. I have announced a package of proposals today. Obviously, we have to see those being taken up by forces. This is about a process, and it is about changing attitudes in the way my hon. Friend has described as so necessary.

[Mr David Lammy (Tottenham) (Lab)]

The Secretary of State will be aware that after the riots, the victims panel set up by the Government targeted section 60 blanket notices as the root cause of stop-and-search. I was also grateful to be able to serve on the review set up by HMIC. I say to the Secretary of State that this will require legislation. I welcome the progress she has made, but section 60 came in through legislation and we need to change it through legislation.

[Mrs May]

I thank the right hon. Gentleman not only for the explicit work he has mentioned, but for raising the issue over the years during his time in this House. The Roberts case has established case law in relation to the interpretation of section 60, and that makes it clear that there must be necessity rather than just expediency.

[Dr Julian Huppert (Cambridge) (LD)]

I congratulate the Home Secretary on her statement and her work to control these important but overused and discriminatory powers. More than 500,000 stops are drugs-related, but 93% of those stopped did not have anything illegal on them. Does she agree with the Runnymede Trust and StopWatch that heavy-handed policing of the possession of small amounts of drugs for personal use is damaging community relations?

[Mrs May]

My hon. Friend and I have had discussions on these matters in the past and we take a slightly different approach to drugs and dealing with them. The Government have a very clear drugs strategy. Where he is right is that when there is a stop-and-search of somebody who is innocent and there are no reasonable grounds for suspicion or purpose behind it, it engenders exactly that distrust and lack of confidence. That is why targeting it more carefully, and changing and making absolutely clear what reasonable grounds for suspicion are, will help to address the issue.

[Mr David Winnick (Walsall North) (Lab)]

Is not the crux of the matter that a law-abiding white person is unlikely to feel that he will be subject to stop-and-search, but that that is not likely to be the position of a law-abiding black person? May I also tell the Home Secretary that in my first Parliament, which was a long time ago, Labour passed legislation to ban for the first time any form of racial discrimination? I was very proud to support that law.

[Mrs May]

The hon. Gentleman has more experience in this House than me in terms of the number of years served. The first issue he raised is absolutely one of the problems. I attended a public meeting held by the hon. Member for Hackney North and Stoke Newington (Ms Abbott) in the House of Commons, when she brought people from black and ethnic minority communities to the House to talk about their experience, and they very forcefully made clear to me what that experience was. I more recently met a group of young students from a school in Wandsworth who were very clear about the impact stop-and-search has on their attitude towards the police. Their assumption is that it will happen to them, whereas, as the hon. Member for Walsall North (Mr Winnick) says, the figures show that the assumption of a young white male is that it will not happen to him.

[Mr James Clappison (Hertsmere) (Con)]

I warmly welcome the package announced by my right hon. Friend. It is wide-ranging, long-needed and, as has been said, in line with what the Home Affairs Committee has been saying for a long time. Does she share my hope that it will take some of the controversy out of stop-and-search, and that in future there will be a consensus whereby stop-and-search is used effectively in the interests of protecting the public and that it will recognised in all quarters as such?

[Mrs May]

I absolutely agree. We need to restore the public’s confidence in stop-and-search, but all the evidence —as we are already seeing from the steps taken by the Metropolitan police and one or two other forces—is that when the power is targeted and used effectively and well, not only is it more effective in its purpose of protecting the public, but the public have greater confidence in it.

[Fiona Mactaggart (Slough) (Lab)]

For many people, the critical issue is that if I am stopped by a police officer, I am treated as a nice middle-class, middle-aged lady and our relationship is very positive, but young people very often do not have that experience. What will the Home Secretary do to make sure that police officers share the experience of the communities they police so that there is not the tension that very often exists between police officers and young men, particularly young black men on the street?

[Mrs May]

We intend to introduce policies at a local level that will enable members of the public to apply to go on patrol with the police, and to talk to the police about what they are doing and their experience. Crucially, training not just of new police officers coming through, but of existing officers is of course key to this, which is why what I am asking the College of Policing to do is so important. As I have said, it should be clear that if police officers do not know how to use the power properly, they should not use it.

[David T. C. Davies (Monmouth) (Con)]

With the utmost respect to the Home Secretary, may I put on the record my concerns about some of the proposals? I suggest that one thing that is lacking is a change to PACE that would allow officers who stop somebody with serial offences of carrying weapons or drugs to use that previous criminal record as grounds for a search. Those grounds are specifically banned under PACE at the moment. If the power is about targeting real criminals, we need to make sure that it helps police officers to go after the real criminals, as well as perhaps making it harder for them to go after those who are not committing crimes.

[Mrs May]

I recognise that my hon. Friend, as a special constable, has particular experience in these matters. I will reflect carefully on his comment. I want to reiterate that I accept that stop-and-search is a very important power. What is crucial is to make sure that it is used properly, because if it is not used properly but is misused, then it falls into disrepute.

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

No one can excuse the abuse of stop-and-search powers, but does the Home Secretary accept that the Security Service believes that it cannot move effectively against organised crime without the proper and appropriate use of stop-and-search? Will she therefore assure the House that her proposals will not undermine the safety and protection of the community?

[Mrs May]

Yes, I can. I am absolutely clear that this is an important power, but it is an important power that should be used properly and effectively. I can give the hon. Gentleman the assurance he asks for by again citing the experience that the Metropolitan police has already had: it has reduced its no-suspicion stop-and-searches by 90% and its overall stop-and-searches by 20%; yet stabbings and gunshot crimes have actually fallen over the same period. It is therefore possible to use this important power more effectively than it is being used at the moment.

[Mr Charles Walker (Broxbourne) (Con)]

I thank the Home Secretary for her announcement. She will recall that we recently met a young man who has been stopped 50 times in the past five years, from the ages of 13 to 18. That state of affairs just cannot continue. The last time he was stopped he was collecting some milk for his mum. I welcome the announcement, but I say to the Home Secretary that I thank God my children are not stopped regularly, because I would have a sense of total desolation and alienation if that happened to them.

[Mrs May]

My hon. Friend makes an important point. The testimony of that young man really brought home to me both the extent to which the misuse of stop-and-search can alienate people, and the problems that people from particular communities, such as that young black man, have experienced over the years. What was distressing was his assumption that, “It will happen to me because I am black.” That is appalling and must not be the case, which is why the reforms are so important.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

The Home Secretary will be aware that concern about stop-and-search in urban communities goes all the way back to the 1980s and the original Brixton riots. Given that successive Governments have failed to act, she gets some credit from some of us for taking things as far as she has, but there is no single issue that poisons relationships between urban communities and the police more than stop-and-search. We all heard her say that unless the ratio between stops and arrests gets better, there will need to be legislation. She must be aware that she will be held to that.

[Mrs May]

I have absolutely no doubt that the hon. Lady and others in this House will do just that.

[Alok Sharma (Reading West) (Con)]

The Home Secretary’s statement will be welcomed by everyone who believes in fairness, irrespective of the community they come from. She has taken a really common-sense approach. She mentioned community involvement in the “best use of stop-and-search” scheme. Will she outline in a little more detail the mechanism for formal engagement between the police and communities?

[Mrs May]

There are two elements of the extra community involvement that we are introducing. One is the requirement that forces will have policies at local level to enable members of the community to apply to go out on patrol with them, so that they can see what is happening and can comment on that. The other is the new community trigger in relation to complaints. We will work with forces to ensure that there is a process, such that if there has been a considerable number of complaints about the use of stop-and-search in an area, the police will need to engage with the community about it.

I want to see what is anyway supposed, under the code of practice, to be there, which is that police forces are working with their communities—talking to them about where particular powers are used, and explaining how those powers are targeted—so that police forces can get community buy-in from the very start.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Home Secretary’s comments are very welcome. One of the big issues in my constituency and around the country is not the number of stop-and-searches, but the manner in which officers conduct them. I hope that the training will take into account schemes such as a “changing places” scheme that has been pioneered in Hackney. She has talked about the proposals being taken up voluntarily, and I hear her argument about that being quicker in the short term, but will she tell us how many forces have said that they will sign up?

[Mrs May]

In response to the hon. Lady’s last point, as I said in my statement, the Metropolitan police has signed up and I have written to every other force asking them to sign up. The police and crime commissioners in the major metropolitan areas, where the power is likely to be used to a significant extent, are of course Labour police and crime commissioners, and I entirely trust that Labour Front Benchers will encourage them to adopt such processes.

[Mark Reckless (Rochester and Strood) (Con)]

Does the Home Secretary agree that, beyond the PACE codes and top-down guidance, another layer of protection for the individual is the entrenched discretion in the office of constable? Whatever the PACE codes say and whatever she or chief constables say, any search is illegal unless the individual officer suspects the individual they search.

[Mrs May]

My hon. Friend is absolutely right. The figure in the HMIC survey showing that 27% of stop-and-searches did not have reasonable grounds was shocking. That is precisely why we will change the code of conduct—code A—under the Police and Criminal Evidence Act to make absolutely clear what reasonable grounds of suspicion are.

[Mark Hendrick (Preston) (Lab/Co-op)]

In seeking to improve stop-to-arrest ratios, how will the Home Secretary measure success: by a reduction in the number of stops or an increase in the number of arrests—rightful or wrongful—which she may inadvertently encourage?

[Mrs May]

As I have made clear, I want the number of stops to come down. The Metropolitan police has already been able to do that through the changes it has made. I want the stop-to-arrest ratio to go up. We will ensure that the training of officers is such that, with the other measures that I am taking, I expect precisely such changes to come through as a result of our reforms.

[Michael Ellis (Northampton North) (Con)]

The figures given by my right hon. Friend on stop-and-search are frankly a stain on British policing. The vast majority of stop-and-search powers are exercised under the Police and Criminal Evidence Act, and police officers are required to have reasonable suspicion before exercising those powers. Do not the figures indicate that, sadly, in a large number of cases it is nothing but the colour of the skin of the person being stopped that has caused the stop-and-search to happen?

[Mrs May]

I am sorry to say that my hon. Friend is right. It is clear that in a large number of cases, there were no reasonable grounds for suspicion. Given that a black person is six times more likely to be stopped and searched than a white person, one can only assume that it is the fact that the person is black that leads to the stop-and-search taking place.

[Michael Ellis]

Disgraceful.

[Mrs May]

It is absolutely disgraceful. Sadly, as I indicated in response to another hon. Friend, the feeling has been passed through to young people in black and minority ethnic communities that this is what happens and is, if you like, a fact of life. I want to change that and ensure that it is not a fact of life.

[Paul Flynn (Newport West) (Lab)]

The charity Release published figures to show that the chance of being stopped and searched was seven in 1,000 for white people, 18 in 1,000 for Asian people and 45 in 1,000 for black people. One of the worst areas in the country for the stopping and searching of Asian people was Gwent, where they were six times more likely to be stopped and searched than white people. Will those disparities be obvious under her new plans, and will she identify and deal with them?

[Mrs May]

Absolutely. We will put the figures on stop-and-searches on the www.police.uk website, alongside the crime maps, which have proved to be successful and popular. The figures that the hon. Gentleman has given for Gwent show the problem of disproportionality in the stop-and-searches that are being undertaken. I hope that he will play his role by encouraging the police in Gwent to sign up to the “best use of stop-and-search” scheme so that we can change behaviour there, as in other places.

[Conor Burns (Bournemouth West) (Con)]

I grew up in Belfast in the early 1970s and, even in the context of a live terrorism situation, there was widespread resentment of the use of random stop-and-searches, which led to the alienation of some parts of the community. However, does my right hon. Friend agree that it is the abuse of the power, rather than the power itself, that needs to be dealt with? Will she comment further on what she said about holding officers to account for their use of the power? Will she confirm that it is not just police areas that will be held to account, but individual officers?

[Mrs May]

I am happy to confirm that to my hon. Friend. He is right to say that this is an important power and that it is its abuse that causes the problem. It is the abuse of the power that brings it into disrepute. The revised code will emphasise that when officers do not use their powers properly, they will be subject to formal performance or disciplinary proceedings. The individual officer has to ensure that they are using the powers properly. If they are not, action will be taken against them.

[Yasmin Qureshi (Bolton South East) (Lab)]

The Home Secretary will be aware that the main reason for the Brixton riots was the notorious sus laws. Lord Scarman’s inquiry confirmed that and led to the PACE legislation. I am pleased to hear the announcement this afternoon, although I would have preferred further legislation. Given that young people in particular have been affected by stop-and-search, will she reassure me that there will be continuous monitoring of the use of this power? Will she confirm, as has been said by other Members, that people who abuse the power should be held accountable?

[Mrs May]

The use of the power will be monitored in a number of ways. As I have said, the figures will be on the website. We are introducing the requirement for extra information to be recorded so that it will be possible to monitor the extent to which stop-and-searches lead to a disposal, arrest or other action. We will then be able to look even more closely at how the power is being used. Getting that information will be an important part of the process.

[Richard Fuller (Bedford) (Con)]

Like many other people, I thank the Home Secretary for addressing seriously the misuse of stop-and-search powers, which is probably the worst form of legal racial abuse in our country, and for demolishing so effectively the arguments of the shadow Home Secretary by confronting her with the fact that Labour did nothing in office to stop the abuse. May I point out that there are Conservative Members who feel that legislative changes may be required? Will my right hon. Friend assure us that if the changes are not made, she will have no hesitation in coming back to the House and asking for primary legislation?

[Mrs May]

I give my hon. Friend that absolute assurance. However, as I said earlier, the situation has changed because of the case law that was set by the determination in the Roberts case. I am very clear that if I do not see change, I will be back with primary legislation.

[Heidi Alexander (Lewisham East) (Lab)]

As someone who secured a Westminster Hall debate on stop-and-search two years ago, I welcome the Secretary of State’s comments in as far as they go. In my constituency, there is undoubtedly huge concern about the misuse of stop-and-search powers, but the number of complaints to the police does not necessarily reflect the concern in the community. What does she plan to do to raise awareness among the people who are most often on the receiving end of this policing tool of how to make complaints and of the standards that they should expect when they experience it?

[Mrs May]

We are exploring how we can best get that message across. As I have mentioned, part of the package that we are introducing in “best use of stop-and-search” is that a significant number of complaints on the use of stop-and-search in an area will trigger a response from the police. We are looking at how we can best use various means of communicating with people, particularly young people, about the extent to which they can complain. As the hon. Lady and others will know from their experience, the sad fact is that because so many people accept that this is just what happens, they do not complain. When the power is used improperly, we want complaints to come through. We are looking at what information we can put out about how stop-and-search should be conducted. The point that the hon. Member for Hackney South and Shoreditch (Meg Hillier) made earlier about the manner in which stop-and-search is undertaken is important and has been raised with me by young people. They say that if it is done with respect, they have less concern about it than if it is done in the usual way.

[Dr Phillip Lee (Bracknell) (Con)]

It is worth repeating that the number of people stopped and searched under the Terrorism Act 2000 was 32,000 in 2002-03 and 210,000 in 2008-09, and that last year the figure fell to zero. Does the Home Secretary agree that that makes the Conservative party, and not Labour, the real party of the reform of stop-and-search?

[Mrs May]

It is, indeed, a Conservative Home Secretary who is bringing these measures forward, but the Deputy Leader of the House, who is sitting next to me, points out that this is a coalition Government.

[Mark Durkan (Foyle) (SDLP)]

I welcome the Home Secretary’s statement for reasons that have already been expressed. She says that the community trigger hinges on a large volume of complaints. Will she ensure that that does not become a working quota that must be met before a public explanation by the police is needed? Who will set the threshold for the trigger, and will it be locality sensitive, rather than force-wide? Will a public explanation be given if the number of complaints is short of the threshold, but there is a suggestive pattern of concern?

[Mrs May]

The hon. Gentleman is right that the new power has to be used carefully and properly so that it does not become a mechanistic process or something that is abused in any way. I want to see a situation where it does not have to be used because police forces talk to the communities in their locality in advance and ensure that they are involved in and understand the use of stop-and-search. We will look into exactly the sorts of issues that he has raised, such as whether the process will be locality sensitive and how it will be put in place, to ensure that it is effective in the places where it is necessary.

[Jeremy Lefroy (Stafford) (Con)]

I welcome my right hon. Friend’s action today and her invitation to all police forces to sign up to the scheme. Does she share my expectation that if a police force does not sign up to the scheme, it will owe it to its community to explain why it has not done so?

[Mrs May]

My hon. Friend makes an interesting point and I absolutely agree. I think a police force would owe it to its communities to explain why it had not signed up.

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

May I press the Home Secretary on the number of police forces expected to sign up, and on the time frame over which she will be monitoring this measure to decide whether legislation is needed?

[Mrs May]

I want all forces in England and Wales to sign up to the code, and I hope that Members of the House will do what they can to encourage their local police and crime commissioners and chief constables to do just that. As I indicated earlier, I will not set a timetable for introducing legislation, partly for the reasons I set out in response to the Chair of the Home Affairs Committee.

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

I warmly welcome my right hon. Friend’s statement. I have long advocated intelligence-led policing, and this is a significant step along that road. Does she agree that the amendments to PACE code A—which are statutory because PACE code A is a statutory instrument—will represent real change for the vast majority of stop-and-searches, and that her approach on section 60 stop-and-searches replicates what has happened with stop-and-searches under the Terrorism Act 2000, where we have seen a reduction to nought without primary legislative change?

[Mrs May]

My hon. Friend is absolutely right and it is a pity that everybody seems to have ignored or missed the point about the importance of PACE code A and the impact that it has on forces. That is why it is so important that, as I said, we will be amending that code in a number of ways, particularly to make it absolutely clear what are reasonable grounds of suspicion.

[Mr Robin Walker (Worcester) (Con)]

Does the Home Secretary agree that one of the tragedies of the misuse of stop-and-search powers is that it puts up barriers between the police and communities that themselves are often the victims of crime? In the process of consulting on this—I know West Mercia police has been consulting widely in my area with ethnic minority communities—police forces should be trying as hard to ensure that they address the concerns of communities about crime as they do about stop-and-search.

[Mrs May]

My hon. Friend is right, and I also hope that by addressing concerns about stop-and-search, people will see it being used more effectively to help deal with crime that has taken place in those communities. As he says, the problem is that when there is that alienation, often information does not come to the police that could be helpful to them in stopping those crimes or dealing with those committing them.

[Bob Blackman (Harrow East) (Con)]

I welcome my right hon. Friend’s statement, and particularly her praise for the enlightened leadership of Sir Bernard Hogan-Howe. He has done a brilliant job in London in turning round a difficult situation. We are seeking to transform the culture of the police force. One way that could be done is if at the pre-shift roster meetings held every day, the police inspector or sergeant who is briefing the constables going on the streets repeatedly reminds officers of their duty and of what they need to do to ensure they gain the trust of the public.

[Mrs May]

My hon. Friend makes an interesting suggestion. That is an operational matter and it is for the police to decide how they undertake those briefings and the information they give to officers. However, he is right to commend Sir Bernard Hogan-Howe for the changes he has already put in place in the Metropolitan police, and I am pleased that the Met has signed up to the “best use of stop-and-search” scheme, so that we can see further changes still.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my right hon. Friend on her statement and on so clearly highlighting the difference between the records of this Government and the Labour Government. Does she agree that it is entirely unacceptable for anybody to be stopped and searched on the basis of the colour of their skin?

[Mrs May]

I absolutely agree and that is why the reforms we are bringing forward are so important.

[Mr Philip Hollobone (Kettering) (Con)]

As a serving special constable with the British Transport police, I warmly welcome the Home Secretary’s proposals. Which police force is best at stop-and-search, which has the best stop-to-arrest ratios, and how might they be involved in training other police forces? Following the question from my hon. Friend the Member for Broxbourne (Mr Walker) about the lad who was stopped 50 times, can we ensure that such individuals are involved in the College of Policing and in devising training programmes, so that police constables have real life examples of where things have gone wrong, which would then be in their minds when they go out on the streets?

[Mrs May]

The most improved force, certainly in relation to stop-and-search, is the Metropolitan police force with the work that Sir Bernard Hogan-Howe has been doing to change its approach to stop-and-searches. We have seen across the board that there is often good practice in pockets of forces. The first stage of the work that I have been doing with forces on stop-and-search was precisely to encourage the Association of Chief Police Officers—as the business leads were then under the aegis of ACPO—to spread good practice. However, it has been necessary to come forward with this wider package of reforms to ensure that best practice is spread. My hon. Friend makes an interesting suggestion, and the more we can alert police officers to the impact of what they are doing by talking to people who have been on the receiving end, the more they will come to understand the problem.

National Planning Policy Framework (Community Involvement)

Wednesday 30th April 2014 Commons Chamber

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

13:35

[Greg Mulholland (Leeds North West) (LD)]

I beg to move,

That leave be given to bring a Bill to make further provision for the National Planning Policy Framework; and for connected purposes.

The planning community involvement Bill seeks to build on the initiatives in the Localism Act 2011 to give communities more of a say in planning decisions, and to amend the national planning policy framework. Despite having much to commend it and despite it being a much-needed simplification of planning law, that framework has still not got the balance right between the rights of developers and those of local communities. It is also not being properly implemented by some local authorities.

In a June 2011 guide to the Localism Bill, the then planning Minister stated that the purpose of the Government’s localism agenda—one I warmly welcomed —was

“to help people and their locally elected representatives achieve their own ambitions”.

Although I am delighted that the coalition Government have taken many steps in the right direction, including the assets of community value scheme, neighbourhood development plans and a number of measures, in reality many of our constituents—including those of Members from both coalition parties, and around the House—know that unwanted development is still being imposed on them, often with little chance to do anything about it.

Developers are still cherry-picking greenfield sites and building expensive multi-bedroom houses in areas that do not want and cannot support significant development. That is not what the country needs; we need more affordable homes in key areas and more social housing. Reform is needed to ensure that building happens where it is wanted and needed by communities and regions, and on brownfield sites first, not simply where developers will make money building homes that are out of the reach of the pockets of ordinary people.

These are sensible measures; they are not radical and this is not nimbyism. I do not propose to try to stop development everywhere, and I am certainly not trying to discourage the housing we need. The measures in my Bill are supported by organisations such as the Campaign to Protect Rural England, which has suggested a number of measures, the Campaign for Real Ale and Civic Voice, and also by the Local Government Association and local councils. I hope that the Bill will start a debate about how we can reform the planning system to get it right as we approach the general election, which is now just a year away. In Leeds, many communities such as Cookridge, Bramhope, Pool-in-Wharfedale and Adel, are already facing huge increases in housing, including on green-belt land. That is at a time when many parts of the city and region are crying out for housing of the sort that we need, yet those sites are simply being land-banked and ignored.

There are also issues with housing targets. For example, Leeds city council is proposing to build 70,000 homes by 2028. That is the highest figure among all major UK cities, despite it having the lowest population increase of any major city since the 2001 census. It does not make sense. A local campaign group, Wharfedale and Airedale Review Development, has pointed out that if figures are calculated on the 2011 census, the figure should be only 48,000, yet a higher target is being imposed on local people. That is the situation in Leeds, but it is reflected around the country.

We also have permitted development rights for assets and local facilities that clearly involve a fundamental change of use, and the loss of that community facility. That can apply to community centres, local shops, post offices and pubs. It is great news that the Government have now responded on betting shops. It was clearly an absurdity to allow betting shops to go through without planning permission, and it is also absurd—and I speak in this regard as the chairman of the all-party save the pub group—that pubs can become supermarkets, solicitors’ offices or payday loan shops without having to go through the planning process and without any opportunity for the community to have a say.

The Department for Communities and Local Government says that that problem is solved by the assets of community value scheme and article 4 directions, but it is not. The ACV initiative is being undermined by the inadequacy of the planning system, and in many areas the Localism Act 2011 is being ignored. For example, recently in my constituency an application was made to build houses and a supermarket on a playing field, in an area where local schools do not have their own playing fields. Despite a campaign by the local Hyde Park Olympic legacy group and a pending asset of community value application, the application went through. That is scandalous, and my Bill would address that.

Some 350 pubs have been listed as ACVs, but how many have actually been saved? The answer is only a few. In London, the Campaign for Real Ale has pointed to several pubs—the Castle in Battersea is a heap of rubble, the George IV in Brixton is a Tesco store, and the Chesham Arms is an office with an unauthorised flat. The initiative is being undermined.

My Bill would abolish the right of developers to appeal. There has been an inequity between communities and developers for too long. A report by Savills estate agents shows that 75% of all planning appeals for large housing developments are allowed after local councils have originally voted them down. My Bill proposes the simplest and cheapest solution, which is to abolish the right to override local authority decisions by appealing to a distant planning inspector. That would be good news for the Treasury, because we could abolish the Planning Inspectorate, saving £50 million a year.

I acknowledge that we need new homes, but paragraph 49 of the national planning policy framework should be amended to demand that developers must still meet local policy objectives, such as where a local authority seeks to prioritise development on brownfield sites before greenfield sites, and sweep away the nonsense of councils being unable to demonstrate a five-year land supply.

My Bill would also drop the requirement in the NPPF that local authorities should allocate an additional 20% buffer of deliverable housing sites. Developers can cause a 20% buffer to be required, rather than a 5% buffer, by under-delivering housing, so they are manipulating the system.

My Bill would give councils the power to refuse applications on prematurity grounds. Local plans and neighbourhood development plans can often take a long while to develop. Developers know that and exploit it. With an increasingly transient population, we should stop focusing simply on local authority areas and having artificial targets set by the local authority—in the case of Leeds, they are wrong—and look at how local authorities can work together, rather than in isolation, to address the country’s housing needs and where we should be building homes.

We need an overhaul of the plans panels process, which is frankly a fig leaf. Plans panels are presented as a quasi-judicial process, but they break every norm of any fair or just process. In Leeds, they allow a lengthy presentation by the developer and then only three minutes for two individuals to speak against. We need a proper process, with an independent chair, that gives equal time to proposers and opponents of significant developments.

We need to do more to prioritise brownfield land, and my Bill would put a specific requirement on developers, as well as local authorities, to prioritise brownfield sites through controlling or phasing the order in which allocated sites become available for development. My Bill would also ensure that councils have the power to refuse applications on greenfield sites until such sites have actually been brought forward for development. Developers are deliberately not bringing such sites forward so that they cannot be considered, and then the developers can use the loophole to get planning permission.

The Government have had the common sense to deal with betting shops, and my Bill would do the same thing to stop the nonsensical conversion of assets of community value to uses that are clearly different, including those suggested by CAMRA. The ACV scheme was a good start, but our communities deserve more than simply a right to try to raise money to make a bid that can then be ignored. My Bill would do what the Localism Act 2011 should have done and bring in a genuine community right to buy. It would also tighten the legislation and guidance so that councils do not unreasonably deny communities the right to list local assets, as has recently and disgracefully happened in Leeds.

Ministers have made considerable improvements to make the planning system simpler and more accessible to the public—and to involve local communities—but they need to go further to achieve their ambitions. We need further reform as soon as possible.

Question put and agreed to.

Ordered,

That Greg Mulholland, Rosie Cooper, Mr Jim Cunningham, Jason McCartney, Stuart Andrew, Philip Davies, Martin Horwood, Chris White, Ian Swales, Mike Thornton and Dr Julian Huppert present the Bill.

Greg Mulholland accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 June, and to be printed (Bill 203).

Section 5 of the European Communities (Amendment) Act 1993

Wednesday 30th April 2014 Commons Chamber

13:47

[The Financial Secretary to the Treasury (Nicky Morgan)]

I beg to move,

That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in Budget 2014 and Autumn Statement 2013, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook (2014) and Fiscal Sustainability Report (2013), which forms the basis of the United Kingdom’s Convergence Programme.

I welcome this opportunity to listen to Members’ views on the information that will be provided to the Commission this year under section 5 of the European Communities (Amendment) Act 1993. As in previous years, the Government will inform the Commission of the UK’s economic and budgetary position in line with our commitments under the European Union’s stability and growth pact. The Government plan to submit their convergence programme today, with the approval of both Houses.

The convergence programme explains the Government’s medium-term fiscal policies, as set out in the 2013 autumn statement.

[Mr David Nuttall (Bury North) (Con)]

I am grateful to my hon. Friend for giving way so early in her speech. As she will know, today is the last day for the convergence programme to be submitted under the economic governance pact. As she said, it requires the approval of both Houses. The other place is not sitting today. Has its approval already been obtained and why have we waited until the last day?

[Nicky Morgan]

I know that my hon. Friend is an assiduous follower of these matters, and he is right. The other place had a short debate on the convergence programme on 9 April. He will know, and I am learning, about the vagaries of timetabling debates, which have meant that this was the earliest day that we could debate the convergence programme in the House. I am told that in previous years the convergence programme has been sent in draft to the Commission, but we were keen that we should debate and send the final document. The convergence programme document was put before both Houses in a written ministerial statement dated 3 April, and placed in the Libraries on the same date. Members have therefore had an opportunity to consider the draft document since that date, although I appreciate that the recess has intervened.

[Kelvin Hopkins (Luton North) (Lab)]

I have raised this matter before on similar occasions. First, there is constant talk about convergence, but the European Union’s economies have always exhibited divergence, not convergence. Secondly, do we want to converge with an economy that is failing and growing more slowly than we are?

[Nicky Morgan]

I have read previous debates and know that the hon. Gentleman is assiduous in attending such debates and in following these matters. The language used in titles of various EU programmes is not a matter of choice for this Government. Perhaps a better word could be used, but it has not been selected by the Government. I take his remarks on board. I think all of us know that the eurozone has not been as strong as even those of us outside the eurozone would like it to be—it is important for our businesses and our exporters—but I will come on to show that things are looking better. The recovery taking place in the rest of the European Union is slower and it is important that we are fully aware of, and the European Commission fully monitors, the economies of other eurozone countries, even though—let me make it clear again—the Government have no intention of joining the euro.

The convergence programme explains the Government’s medium-term fiscal policies as set out in the 2013 autumn statement and in Budget 2014, and also includes Office for Budget Responsibility forecasts. As such, it is drawn entirely from previously published documents that have been presented to Parliament. With the Budget on 19 March and Easter recess timings as they were, I appreciate, as I have already mentioned, that the timetable for this debate has been particularly tight. Against this backdrop, the Treasury has made every effort to provide early copies of the convergence programme document in advance of today’s debate. The document makes clear that this year’s Budget reinforces the Government’s determination to return the UK to growth, and reiterates the Government’s No. 1 priority: tackling the deficit. As we have already heard in interventions, there are differing views on the value of submitting stability or convergence programmes, especially for the UK, given that the Government have ruled out joining, or preparing to join, the single currency.

The document forms part of the European semester process, which provides a broad framework for the co-ordination of the monitoring and surveillance of member states’ fiscal and economic policies, including necessary structural reforms across the EU. The positive value of the European semester is that it is a useful means to encourage other member states to grip the urgent growth challenge across the EU.

Budget 2014 set out the Government’s assessment of the UK’s medium-term and budgetary position. The UK economy is still recovering from the most damaging financial crisis in generations. We had the biggest bank bail-out in the world, the biggest deficit since the second world war and suffered the deepest recession in modern times. In the face of such a daunting economic challenge, it is essential to have a clear and comprehensive plan.

In 2010, the Government set out clear, credible and specific medium-term consolidation plans to return the public finances to a sustainable path. Our plan makes clear that we will fix the economy and deal with the deficit, cut tax to encourage investment, back businesses, control welfare and invest in skills. We are putting that plan in place. We have adhered to it and we are delivering results with it. The Government’s fiscal strategy has restored fiscal credibility, allowing activist monetary policy and the automatic stabilisers to support the economy and ensure that the burden is shared fairly across society.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am extremely grateful to the Minister for outlining the excellent economic policy that Her Majesty’s Government have so successfully been following. I wonder whether she can give me the assurance that no part of that policy has been changed in any way to meet the requirements of European convergence.

[Nicky Morgan]

I am certainly not aware of any changes. In fact, I think it would be fair to say that we have led the way in Europe and the eurozone in showing exactly how important it is to return to growth and the actions that need to be taken. It is interesting to see other European countries watching what this country has done and following some of the policies that we have put in place so assiduously. It is, as I have said, very important that they return to growth for the sake of our businesses and exporters, too.

The long-term economic plan has protected the economy through a period of global uncertainty and provided the foundations for the UK’s economic recovery, which is now well established. Since last year, economic growth has exceeded forecasts and has been balanced across the main sectors of the economy. Inflation is below target and the deficit has been reduced year on year. More than 1.5 million private sector jobs have been created. Employment is at record levels and interest rates are near record lows, helping to keep costs down for families and businesses. The Government are also making significant progress in reversing the unprecedented rise in borrowing between 2007-08 and 2009-10. The deficit has been cut by a third, as a percentage of GDP, over three years, and is projected to have fallen by a half, as a percentage of GDP, by 2014-15. The OBR also forecasts public sector net borrowing to reach a small surplus in 2018-19. The independent OBR has judged that the Government remain on track to meet the fiscal mandate one year early.

The Government’s consolidation plans have been central to the reduction in the deficit, with £64 billion of the £80 billion spending reductions in spending review 2010 already implemented. The Government are continuing to take action to improve financial management and spending control. Departments remain ahead of their consolidation targets and are again forecast to underspend by £7 billion in 2013-14. The OBR judges that fiscal consolidation has not had a larger drag on the economy than it expected in June 2010, and the UK’s fiscal vulnerabilities argue strongly in favour of maintaining our commitment to deficit reduction. The OBR forecasts that the underlying structural deficit is falling, but it is falling no faster than previously forecast, despite higher growth.

The persistence of the structural challenge supports the Government’s argument that economic growth alone cannot be relied on to eliminate a structural deficit. As my right hon. Friend the Chancellor has said, the job is not yet done. More work will need to be done to tackle historic weaknesses, including low productivity, poor skills and inadequate infrastructure. The deficit is still one of the highest in the developed world and the UK needs to continue to deal with its debts. We are on the right track. The deficit has already been cut by one third. Budget 2014 is fiscally neutral, despite lower borrowing across the forecast period, with an overall reduction in tax funded by a reduction in spending. We have set out our fiscal consolidation plan and it is vital to stick to it in future years.

Budget 2014 announced that the Government are cutting income taxes and freezing fuel duty to help hard-working people to be more financially secure; creating more jobs by backing small business and enterprise with better infrastructure and lower job taxes; capping welfare and controlling immigration, so that the UK economy delivers for people who want to work hard and play by the rules; and delivering the best schools, skills and apprenticeships for our young people. The OBR has revised the UK’s growth forecast upwards and it is now among the highest in the EU.

As the Chancellor said, the job is not yet done and the same is true for the rest of the EU, which is the UK’s most important trading partner. Some 45% of our exports are destined for the EU, and seven of the UK’s top 10 trading partners are EU member states. Without sustainable economic growth, the EU will be unable to repay its debts, create jobs or maintain its standard of living. Much of the answers to these problems lie with national-level reforms, such as creating flexible labour markets. Clearly, the European semester has a key role to play in encouraging member states to make ambitious reform commitments. The UK has an interest in making sure those reforms happen. An ambitious EU-level reform agenda is also a key part of this equation and an essential counterpart to national-level reforms. While I can understand that some may be cautious about encouraging the UK to do more, an EU growth agenda would make a major contribution to growth across the EU as a whole and benefit the UK. Recent European Councils have underscored the strong commitment of Heads of State or Government to supporting growth and competitiveness. I know that the Prime Minister has been driving forward this agenda, along with leaders from a substantial group of like-minded member states.

Some would claim that we cannot have EU economic growth without EU spending growth. I disagree. While some areas of the EU budget, such as spending on innovation and research and development, have the potential to support growth, this in fact represents only 13% of the total EU budget. However, deploying EU-level policies in support of economic growth, such as the single market, regulatory reform and EU-level free trade agreements, can achieve maximum growth impact at the least cost.

[Ian Swales (Redcar) (LD)]

The Minister makes a point about EU spending. Does she join me in welcoming the fact that certain parts of the country have EU transitional status, which causes EU money to flow to areas such as the Tees valley?

[Nicky Morgan]

My hon. Friend is absolutely right. As we are a part of the EU and contribute, as a country, to the EU budget, it is absolutely right that some of that money comes back to this country—or to particular parts of this country—and we see the benefit of that financial contribution. He mentions his area of the country, and I know that EU funding in the midlands has been particularly valuable in supporting vital work on things such skills and apprenticeships.

[Jacob Rees-Mogg]

I wonder whether my hon. Friend should be a bit careful about welcoming EU spending in this country because it was our money in the first place and it is not necessarily being spent in the way that Her Majesty’s Government would wish to spend it because it has to meet the requirements of the European Union. Therefore there is the risk of getting inefficient spending out of our own net contributions. We risk wasting money and having a bigger deficit by dong this through a third party, rather than through the actions of our own Government.

[Nicky Morgan]

My hon. Friend is right, and he tempts me down a particular path—to say whether membership of the EU broadly benefits this country. I am sure that we could have a whole debate on that, and I know that he could go on for hours and hours on that particular subject. [Interruption.] We will not do that, Madam Deputy Speaker; I take your guidance. Of course, this Parliament is getting less money because the previous Government gave away at least a percentage, if not half, of our rebate. Over the course of this Parliament, this country will receive about £10 billion less from the EU than we would have done had we stuck to the rebate arrangements agreed by a previous Prime Minister—probably the best part of 30 years ago.

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

Is the Minister aware that this very morning, money was granted to the Isle of Wight and plenty of other parts of the country through the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon). Yet instead of that being done here and now, the money had to go all the way over to Europe for the EU to sort out some mad scheme.

[Nicky Morgan]

To respond briefly, I entirely understand my hon. Friend’s point. I suspect he will be pleased that the money has come to the Isle of Wight. I take his broader point about the benefits of membership and the amounts of money spent, which could be the subject for a different debate at a different time. In respect of the EU budget, it is also worth remembering that the Prime Minister went to Europe last year to negotiate a smaller future budget contribution over the course of the next seven years, which had never been achieved before. His determination to work with like-minded member states to achieve that is what enabled it to happen. I would have thought that all Members, and particularly Conservative Members, would hugely welcome that.

The need comprehensively to address Europe’s growth challenge, tackling overall low productivity and the lack of economic dynamism and flexibility, is more pressing than ever before, and it is in our interest to make urgent progress. That is why the UK will continue to push this agenda at the highest levels and encourage the new Commission to take structural reform seriously.

To conclude, the Government are committed to ensuring that, in line with section 5 of the European Communities (Amendment) Act 1993, this House approves the economic and budgetary assessment that forms the basis of the convergence programme. Following what I hope will be the House’s approval of that assessment, the Government will submit the convergence programme to the European Commission, which will make its recommendations to all EU member states in early June. These recommendations will then be considered by the ECOFIN Council on 20 June and agreed by Heads of State or Government at the European Council on 26 and 27 June.

To reiterate, the convergence programme contains no new information, but only information that has been presented previously to Parliament—information from the OBR’s economic and fiscal outlook and from the Budget, which sets out the Government’s strategy to return the UK to sustainable growth. For the reasons I have outlined, I ask the House to support the Government motion and I look forward to hearing the debate.

14:05

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I am grateful to the new Financial Secretary to the Treasury for her introduction to the debate, and I congratulate her on her promotion to her new post. I look forward to continuing the debate with her in the Finance Bill Committee, which got off to such a strong start yesterday.

When I first looked at the motion, I was mystified about the nature of the debate, which is why I have thanked the Financial Secretary for her introduction to it. The motion, as framed, does not exactly leap off the Order Paper. When Members go to the Vote Office, as I did to find the convergence documents, they will find that the motion still does not quite leap out at us in respect of what is going on in the House this afternoon. That situation is not a state of affairs that is alien to Members, given that we often have to debate issues that can sometimes seem impenetrable to those on the outside, and often to those on the inside too.

Let us turn to what could be described as “minus page 2” of the Red Book. I thought it quite telling that underneath a note about the Crown copyright and the ISBN number, are the words:

“Printed on paper containing 75% recycled fibre”,

and

“The Budget report, combined with the Office for Budget Responsibility’s Economic and fiscal outlook, constitutes the Government’s assessment under section 5 of the European Communities (Amendment) Act 1993”.

That is relevant to today’s debate, as the Minister helpfully outlined in her introduction. This is in a very small font and is easy to miss, and it is not immediately clear what it really means.

Looking at the 1993 Act, Members will have spotted that it refers to the Maastricht treaty, article 2 of which states:

“The Community shall have as its task...a harmonious and balanced development of economic activities, sustainable and non-inflationary growth”.

Article 103 is relevant, too, as it talks about economic policies being a “matter of common concern” that should be co-ordinated within the Council. For some Members of all parties, these are the sort of words that are difficult to stomach. That article continues:

“For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy”.

Once we break through the rather impenetrable language and the odd nature of this old treaty obligation, the emphasis of which has changed from when the obligation was made to the state of play within the EU today, what we get to is the fact that the House is essentially being asked to approve the Budget Red Book as a true and accurate reflection of what is happening in the UK economy. When we are finally able to frame the question in that way—asking whether the Red Book is in and of itself a true and accurate reflection of that—I would have to say, “Where shall I start?” It will probably not surprise Government Members to know that the Opposition do not consider it a true and accurate reflection of what is happening in the UK economy

Let me start with the top line of page 4 of the Red Book:

“The government’s long-term economic plan is underpinned by its commitment to fairness.”

I seem to remember that during the run-up to the last general election, before the Government began their life in the current Parliament, the right hon. Member for Tatton (Mr Osborne), who was to become Chancellor of the Exchequer, uttered his famous line about how they were not going to balance the books on the backs of the poor. There was also that other famous line about how we were all in it together. On the face of it, who could say that those sentiments were wrong? Certainly, if they had proved to be genuine, we should be in a very different place.

At the heart of those lines of rhetoric, however, is the implication of a deep commitment to fairness. My charge against the Government is that that commitment—and the “commitment to fairness” to which the Red Book refers—can only be seen as genuine if we accept that “fairness” can describe an economic plan that gives a huge tax cut to the wealthiest in our country. In the 2012 Budget, the Government announced a tax cut for millionaires that would be worth an average of £100,000 to each of them—a sum that is far out of the reach of millions of people in our country today. Meanwhile, the Government are presiding over what might be termed one of our more successful growth industries, which, unfortunately, happens to be the food bank industry. The number of people receiving three days of emergency food has grown from 67,000 four years ago to 913,000. How can it possibly be true that, as the Red Book states, the Government have a deep “commitment to fairness”, when the richest members of our society receive a huge tax cut while the poorest, in ever growing numbers, are being forced to use food banks?

[Ian Swales]

Perhaps the shadow Minister will quote another statement in the Red Book, namely the statement that net income inequality is at its lowest since 1986. The period following that year has included 13 years of her party in government.

[Shabana Mahmood]

Later in my speech, I shall deal directly with issues relating to household income and what is happening to the ability of families on low and middle incomes to make ends meet.

[Mr Simon Burns (Chelmsford) (Con)]

The hon. Lady has been making a big point about fairness. Would it not be fair to point out that, since coming to power, the Government have considerably increased the personal allowance—from just under £7,000 a year to £10,000—and that that has helped the poorest who are in work and paying taxes, as well as middle-income families?

[Shabana Mahmood]

I shall deal with precisely what has happened to the personal allowance later in my speech, but let me make this point to the right hon. Gentleman now. It is true that the personal allowance has risen, and the Opposition have supported those changes, including yesterday when we debated clause 2 of the Finance Bill in Committee. However, it is also true that ordinary working people continue to be worse off despite the changes, and will still be worse off in 2015 than they were in 2010. This is a classic case of the Government’s giving with one hand and taking away much more with the other, and it goes to the heart of the “fairness” charge that I am laying at their door.

I was very struck by the suggestion made by a welfare Minister, Lord Freud, that the reason for the massive increase in the number of people who are using food banks and having to rely on food parcels from them was that

“there is an almost infinite demand for a free good.”—[Official Report, House of Lords, 2 July 2013; Vol. 746, c. 1072.]

I had to read that comment several times, because I could not quite believe that such words could emerge from anyone’s mouth during a discussion about food poverty and the fact that people are going hungry in our country. When the story about the huge increase in the number of people using food banks hit the news a couple of weeks ago, I was also struck by the main attack line from those on the Government Benches: the claim that the increase had a lot to do with advertising and the fact that many more people are now aware of food banks.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The hon. Lady will be aware that this is a very narrow motion. I am sure that she is using the matter to which she is referring as an example, which is in order, but I expect that she will be very careful not to stray too far from the very narrow terms of the motion.

[Shabana Mahmood]

I will, of course, be careful, Madam Deputy Speaker. However, the point that I am making relates directly to what is in the Red Book, to the nature of the motion that we are being asked to support, and to whether we are being presented with a true and accurate reflection of what is happening in the United Kingdom economy. My view, and that of other Opposition Members, is that the Red Book implies that the “commitment to fairness” is being met. I do not believe that a situation in the United Kingdom economy in which more and more people are being forced to use food banks while the Government see fit to give a tax cut to the wealthiest in our country indicates a genuine commitment to fairness, and it is for that reason that I have rejected the thrust of the motion—which asks us to approve the Red Book as such an accurate reflection—and supported the amendment.

The Red Book paints a rosy picture of the goals that have been met and the targets that have been delivered, but, although I looked very carefully, I could not find any reference to the Government’s failure to meet the terms that they had set themselves for their so-called long-term economic plan. The Minister said earlier that the Government were “on track”, which is fair enough, but the track to which she referred is not the track that the right hon. Member for Tatton said that we would be on when he became Chancellor. At the beginning of this Parliament, the Government said that the deficit would be eliminated by 2015, but we now know that that is not the track they are on. The deficit will not be eliminated by 2015; indeed, the current forecast is that it will not be eliminated until 2017-18, when we shall be well into the next Parliament. That is not the test that the Government set themselves for their economic plan, which has failed on its own terms.

[Mr Andrew Turner]

Does the hon. Lady agree that one of the problems was Europe, and the fact that its the budget burst into flames in 2011 or 2012?

[Shabana Mahmood]

What we are being asked to do today is approve a document on the basis that it is an accurate reflection of what is happening in the UK economy. I am afraid that the document does not accept the fact that the Government are not on track to meet the challenge that they set themselves, and promised the electorate that they would deliver on at the last election. They suggested that, if the Chancellor’s programme of fiscal consolidation was pursued—which it was—the budget deficit would be eliminated by the end of this Parliament, and the fact that that is not going to happen goes to the heart of the motion.

However, the Government are not just off track in relation to the central promise that they made to the electorate at the beginning of this Parliament about the elimination of the deficit. The national debt is rising, and the Government are set not to meet their target of ensuring that it falls as a share of GDP by 2015-16, although anyone reading the Red Book in isolation would be forgiven for thinking that everything was going exactly according to their original plan.

[Jacob Rees-Mogg]

I am enjoying a good deal of the hon. Lady’s speech, but she ignores the crucial point: the Office for National Statistics substantially revised downwards the economic growth in 2008 and 2009, so the origins of this problem lie with the previous socialist Government, who ruined the economy. Blaming it on the marvellous work of this Government is entirely false.

[Shabana Mahmood]

I am grateful to the hon. Gentleman for his intervention, but he will not be surprised to learn that I wholly reject the point he makes. Government Members often try to lay the whole cause of the global financial crisis at the door of the previous Labour Government, but it was a global financial crisis that affected countries all over the world; the Labour Government were not responsible for the fall of Lehman Brothers in the United States. That is the first point I would make in response to him. The second point is that this Government have now been in power for four years and they cannot keep trying to get off the hook about their own record. The important point is that they set a target for themselves. Previous Red Books show what was supposed to happen with this programme of fiscal consolidation, but it has not proceeded at the pace the Government set for themselves. That is not spelt out clearly in the Red Book in open language that anybody could understand.

Anyone looking at the Red Book would be forgiven for thinking that these are halcyon days and everything is exactly as it was always planned to be, but that is not a true and accurate reflection of what is happening in the economy. On page 1 of the Red Book, in a section from which the Minister quoted, we see that

“GDP growth has exceeded forecasts”.

It also states that

“the deficit as a share of GDP is forecast to have fallen by a half by 2014-15 compared to 2009-10”.

Again, that implies, “Everything is okay. Move along. There is nothing to see here.”

Yesterday’s growth figures and the 0.8% growth we have seen in the first quarter are welcome, but they do not make up for the previous three years of flatlining in the economy. We have to remember that in quarter 2 of 2010, growth was at 1.2%, and in 2010 after coming into power the Chancellor said that the economy would have grown by 8.4% by now, whereas in fact it has grown by just 3.8%, which is less than half of what he forecast. Again, what has happened is not quite as rosy when compared with what was supposed to happen in terms of the challenge the Chancellor set himself. It is also not as rosy a picture as is painted in the Red Book.

Let me deal with the point about personal allowances raised by the right hon. Member for Chelmsford (Mr Burns). We see a similar flannelling about what is really going on in the economy when we look at the impact of tax and benefit changes on people on lower and middle incomes and, in particular, on the interplay with their living standards. The Red Book tells us that

“a typical basic rate taxpayer will pay £705 less income tax…in cash terms than they would have paid in 2010-11.”

Page 10 of the Red Book tells us that pressures on household budgets “have eased”, but that is simply not the experience of millions of people on lower and middle incomes in our country. I fail to see how that statement can be true at the same time as the OBR tells us that wages will be 5.6% down in 2015 compared with 2010.

Treasury Ministers have failed to admit that latter point; they have been asked a number of times to accept that the OBR has said that wages will be 5.6% down, but no Treasury Minister has ever answered yes or no to that question. I will happily give way to the Financial Secretary if she wants to confirm that that is the case, but she is looking at her papers and I think she is going to do what every other Treasury Minister and colleague of hers has done, which is duck the opportunity to confirm on the Floor of the House and for the benefit of the record that the OBR is right in saying that wages will be 5.6% down in 2015 on the 2010 level.

[Ian Swales]

I am listening to the hon. Lady’s arguments. Would she like to add that because the income tax cut is a flat-rate amount it has the biggest impact on the low-paid and that the low-paid, particularly those on the minimum wage, have had a real-terms increase in their net pay?

[Shabana Mahmood]

And yet people in our country are on average £1,600 a year worse off. Let us look at the combined impact of tax and benefit changes. The Institute for Fiscal Studies figures, analysed for us by the House of Commons Library, show that on average people will by next year be about £1,000 a year worse off. This comes back to the central point: the Government say in the Red Book that pressures on household budgets are easing, but people are worse off, and not by trifling amounts, such as a tenner or £20 quid—they are worse off by nearly £1,000. That is a huge sum and it has a huge impact on a family’s ability to make ends meet.

The Government talk a lot about the personal allowance, and when the charge is made that ordinary people are suffering a deep-seated cost of living crisis, they often say, “But of course we have taken a large number of people out of tax altogether because of the increase in the personal allowance.” Although the personal allowance increases have been welcomed and supported by everybody across the House, they do not in and of themselves give a family the ability to make ends meet. We still have people who are desperately struggling, and who have their head in their hands every time a bill comes through the door. The truth remains that people on lower and middle incomes are worse off, and they will be worse off at the end of this Parliament than they were at the beginning of it. The balm offered, by the increases in the personal allowance in particular, is not enough to heal the deep wound that has been inflicted by all the other changes this Government have implemented since they have been in power. As I say, the combined impact of tax and benefit changes means that by next year people on lower and middle incomes will be about £1,000 a year worse off.

The Red Book also talks a lot about the Government’s economic policy in relation to savers. The Chancellor famously said:

“If you are a maker, a doer or a saver, this Budget is for you.”—[Official Report, 19 March 2014; Vol. 577, c. 781.]

There was not much in the Budget and the Red Book to help those who are making do—the people struggling with the cost of living crisis. But for the savers, there is much in the Red Book: about retirement choices, individual savings accounts and other savings devices. The Red Book has twice as much about savers as about supporting households. Again, however, it is not a true and accurate reflection of what is going on in the economy, because the Red Book fails to recognise that for many people saving, particularly at the moment, is a luxury that is desperately out of reach. I can imagine the welfare Minister I described earlier as being baffled about why people go to food banks being equally baffled about why people cannot save. People go to food banks because they have no money and they are going hungry. People do not save because they do not have any money left once they have met their other costs of living.

Hidden away in the documents that accompanied the Budget we found that the OBR says that the savings ratio has fallen in recent months and is projected to fall every year until 2018. I put that point to the Chancellor yesterday when I asked him to confirm that, despite his Budget for savers, the savings ratio is forecast to go down. He ducked the question and refused to accept that that is what the OBR is saying is happening to the savings ratio.

In recent weeks, we have had a number of surveys, particularly an important one carried out by the Money Advice Service, which have shown that 16 million British people are living life on the edge with no savings at all. Just 27% of people say that they can save on a monthly basis, and 37% say they have fewer savings now than they had last year. The truth, which we do not see in the Red Book, is that savers withdrew money from their accounts last year at the fastest rate for nearly four decades, according to Bank of England figures. Britons ended up taking out £23 billion from long-term savings in 2015. The ability of ordinary people on lower and middle incomes to save and to have enough money left over after the working week to put aside even £1 a day is fairly limited. Again, that is something that has not been spelt out in the Red Book.

[Mr Philip Hollobone (Kettering) (Con)]

It has certainly been spelt out in the convergence document produced by Her Majesty’s Treasury. Page 12 makes it quite clear that falls in the rate of saving are to be expected in periods when confidence is increasing. It goes on to say that total household debt as a percentage of disposable income has fallen more than 30 percentage points since its pre-crisis peak under the previous Government.

[Shabana Mahmood]

I am afraid that that does not get the Government off the hook when it comes to the impact of their own record. The decisions that the Government have made, both in this and previous Budgets, have left ordinary people worse off. The rhetoric around savers and how much there is in the Red Book for savers in our country misses the point and does not spell it out in ordinary language for the ordinary person to understand that saving is a luxury today for millions of people struggling with a deep-seated cost of living crisis.

The Red Book gives a rosy picture of what is happening in the UK economy, but is just a good line in rhetoric that is rather removed from the reality of daily life for millions of people in our country. For that reason, I urge Members to reject the Government motion and to support our amendment, which, at the very least, introduces an element of reality into what is a surreal characterisation of today’s British economy.

14:32

[Jacob Rees-Mogg (North East Somerset) (Con)]

I welcome my hon. Friend the Member for Loughborough (Nicky Morgan) to her new post as Financial Secretary. It is an enormous pleasure to see her there and one of the great outcomes of the recent reshuffle. I also thank her for her courtesy to this House, which has not always been achieved by her predecessors, for holding this debate before the documents have been given to Brussels, which is an improvement. There was no suggestion on this occasion that the matter be debated in a Committee; it has come straight to the Floor of the House. I am grateful for that as it is important that this House has the ability to discuss such matters properly.

I apologise for the other members of the European Scrutiny Committee, who are meeting at this time. My hon. Friend the Member for Stone (Mr Cash), the Chairman of that Committee, can achieve many things, but unlike Padre Pio, that noted saint, he is unable to manage bilocation. No doubt, in a few years’ time, he will be able to achieve the ability to be in two places at once.

[Mr Hollobone]

Does my hon. Friend think that it is slightly cheeky or that it is just a matter of coincidence that the timetabling for this measure before the House should coincide exactly with when the European Scrutiny Committee is sitting?

[Jacob Rees-Mogg]

I think that it is an unfortunate concurrence of atoms. If we had not had a statement earlier, it would have been possible to fit in both, and that is how things go at the end of a Session. I am not so cynical as to think that this could possibly have been planned.

I want to answer immediately the point about savings made by the hon. Member for Birmingham, Ladywood (Shabana Mahmood). In all that she said on savings, she missed the reclassification of savings that the Office for National Statistics has just introduced. It has roughly doubled our savings rate, because it has reclassified the amounts that private companies put into pension funds as saving rather than as expenditure. That has transformed our savings rate, and therefore the UK economy has had a much higher savings rate than the figures have captured for many years. We should be rather pleased with the savings rate that we have and that we continue to have. Her point on savings, therefore, is, regrettably, fundamentally misfounded.

I want to come on to what underlies this whole debate. People with long memories will be aware that the Government—the British nation—had an opt-out of only stage 3 of monetary union. They did not have an opt-out from the earlier stages, and that included the convergence criteria to be ready to join the euro should that be the wish of the British people at any stage. These documents are part of the convergence criteria to show that we are making headway towards the requirements set out by the European Union under a number of agreements, the latest of which was in 2011, which basically ask for a deficit to be no more than 3% and for the national debt to be no more than 60%. It is about meeting those convergence criteria so that we could if we wished join the euro. It is important to bear that in mind. I am glad about the way the Government have approached this. Had they decided to prepare a whole new set of papers, devoting a great deal of energy and resources on the matter, as the previous Government did with their eurozone entry team, which cost millions of pounds and went on running for years, they would be buying into stages 1 and 2 of convergence for entering the euro. By simply sending the rather splendidly recycled—not just 75% but 100% of the fibre in this document has been recycled—to the European Union, it shows our deep suspicion of the whole process. In the reading of the documents, I could find only two references to performance against EU targets and convergence: on page 22, which runs to a mere three lines, and in the chapter headed “Excessive deficit procedure” on page 53.

I am pleased that the Government are taking an approach of saying, “This is what we understand is happening with the British economy. You, the European Commission, can have it, look at it and chew it over, but we are not running our economic policy in accordance with the convergence criteria.” I was reassured by the Minister’s comments that our policy is not determined by the requirements of convergence, and thank heavens for that. The convergence criteria have been at the heart of the ruination of European economies. There has been one crucial thing that the Government have been able to do since 2010, which the previous Government started, and that is to run a loose monetary policy with a tight fiscal policy. That has ensured that we have been able to get the deficit down without crunching the economy to pieces and without running the risk of a deflationary and elongated depression. That is possible only because we have not been aiming to meet the convergence criteria in the midst of a credit crunch/ depression. We have been able to set our own policy because we have had our own currency and therefore have not been trying to maintain the exchange rate at any particular level. It is notable that, throughout this process, the exchange rate has acted as one of the crucial automatic stabilisers for the economy. In 2009, the sterling-dollar rate bottomed at $1.35 and is now above $1.65, and that has acted as an automatic stabiliser on monetary policy during the process of this downturn—all of which has been dependent on our having our own currency, and has allowed both this Government and the previous one to be tighter on the fiscal side than would otherwise have been possible. It has avoided the absolute disaster affecting the eurozone countries, of having a tight monetary policy and a tight fiscal policy at the same point, which has led, in some countries, to riots.

I am broadly reassured, but there are inevitably some concerns. As I have mentioned, this is about meeting the convergence criteria that allow us to enter the euro. The European Union has no specific enforcement powers, but there are certain commitments that we have made. We are obliged, as are other EU member states not in the euro, to submit a convergence programme focused on the national fiscal policy. From 2011, EU legislation on economic governance introduced a new obligation on member states, including the United Kingdom, to take due account of EU guidance issued to them in the development of their economic, employment and budgetary policies before taking key decisions on their national budgets for the succeeding years, and progress will be monitored by the Commission.

[Ian Swales]

I thank the hon. Gentleman for giving way, and he is making a characteristically interesting speech. Presumably one of the enforcement options open to the EU if we do not meet the criteria is not to allow us to join the euro. Will he enlighten us on whether, through his studies, he has come across any other enforcement procedures that might be brought into play if we do not meet the convergence criteria?

[Jacob Rees-Mogg]

It is always difficult to know what action can be taken until action has been taken and until the European Court of Justice has adjudicated on whether that action is legitimate. Obviously, the hon. Gentleman’s point that we could be prevented from joining the euro is brilliant and I am impressed that the Liberal Democrats are so keen to prevent us from joining the euro that they would like legal action to be brought by the European Union to prevent that.

My warning is not so much that I can see a specific threat coming down the track, as the hon. Member for Birmingham, Ladywood said. There were a lot of tracks in the hon. Lady’s speech, and I wondered whether she was confused with Monday’s debate about the Government’s production of a lot of extra track in one direction or another. There is always a problem if Governments commit themselves to things that they have no intention of doing. At some later date a body comes back and says, “Actually, you agreed in 2011 that the European Commission would have the right to challenge you on how you were developing your fiscal and employment policies. That is not being done, so we want you to put your house in order.” Then we reach the question of what action can be taken to enforce that.

It is worth concluding on the glorious issue of convergence simply by saying that we are so lucky that we are not converging and that the Government have managed to make policy in this country so much more successfully than our continental friends. For example, the EUROSTAT figures—I shall cite a European body, not because I want to but for the sake of consistency, as similar figures are used across the areas covered—show that in 2013 the UK economy grew by 1.7% against 0.1% growth in the EU as a whole and 0.4% contraction in the eurozone. According to our own figures from the Office for National Statistics, we are now, according to the quarterly figures, growing almost as fast as China at an annualised rate, which is very encouraging. I never thought, even with my confidence in the Chancellor and his team in the Treasury, that we would manage to achieve near-Chinese rates of growth under this Government—emerging-market levels. We also have much lower unemployment than our continental cousins, and that applies not just to adult unemployment but, most importantly, to youth unemployment.

Let us hope that we do not converge but continue to diverge from the failures that the eurozone has inflicted on itself, to maintain our independent economic policy, to have an economic policy that thrives and succeeds because Her Majesty’s Government know what they are doing, unlike their predecessor, and can therefore boldly and with confidence send these statements to the European Commission and say to Señor Barroso and all the rest of them, “If only you had the sense to do what my right hon. Friend the Chancellor of the Exchequer is doing, you, too, might grow as well.”

14:43

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

It is always a pleasure to follow the hon. Member for North East Somerset (Jacob Rees-Mogg) in a debate on Europe. I tend to agree with his analysis of and almost everything he says on Europe, but, fortunately, I do not agree with his analysis of the British economy. It gives me an almost unique pleasure to be able to vote with my own party on a European resolution, which I have not done for some time, and I was surprised and pleased when the Opposition tabled the amendment.

First, it is also not unique for a Minister to come to this Chamber with almost nothing new to say, but it is unusual, to say the least, for the Minister to explain to the House that she has nothing new to say. There is a reason for that. The House is expected to report on the Budget and what we are doing financially to the European Union. In one sense one might take the rise out of that and have a little joke about it, as we are just sending the documents that we have already produced to the European Union and to Brussels, but we must remember that the European Union is a thin-end-of- the-wedge organisation. If it cannot get what it wants immediately, it will concede a little. It will say that as it cannot control our budgets, which it would like to do as it wants to create a much more centralised European Union, we should send it the details of them. Initially, that happened under the guise of looking for convergence since the euro was created just over 10 years ago. For a House that believes and should believe in its sovereignty, there is danger in that process even if nothing is being added to what is being given to the European Union.

My second point is the obverse of the point made by the hon. Member for North East Somerset. We certainly do not want to converge with the European Union, because the euro has been the biggest machine for destroying jobs in Europe since the 1930s. It has been a complete and total disaster. It is not just a matter of our not wanting to converge with the euro and the rest of the European Union. There is still an insistence within the eurozone on convergence and trying to converge is a disaster for the countries inside the zone and for the United Kingdom, because we want to trade with a thriving economy. While the euro is there, that economy cannot thrive. It is as simple as this. In Germany, the euro is simply an undervalued Deutschmark that is helping the German economy to trade around the world. That is hugely successful and Germany is building up huge trade surpluses. The rest of the eurozone, particularly the Mediterranean regions, is dealing with an overvalued euro that is depressing its economies.

Without the ability to change exchange rates, those countries are effectively in a competitive deflationary situation and it is very unlikely that they will ever be able to pay off their deficits and get into a better economic situation. The only way they could do that is if the German surplus was taken and spent in Portugal, Spain, Italy and Greece, where they have huge unemployment rates and where there is unemployment in what industry is left. It is very difficult—almost impossible—for the eurozone to converge, and that is bad for those countries and, because we want to trade with them, for this economy.

If the eurozone had done better since the banking crisis five or six years ago, this country would not have suffered as much as we have.

[Ian Swales]

I am carefully following the hon. Gentleman’s argument, with which I absolutely agree. I must admit that since I first became a candidate for the Liberal Democrats, the policy on the euro was the one policy on which I disagreed with my party for exactly the reasons that he is outlining. However, to be positive, does he agree that sending these documents to the EU might, in the spirit of learning, make it reconsider the errors of its ways?

[Graham Stringer]

The EU is not only a thin-end-of-the-wedge organisation but absolutely not a learning organisation. It is ideologically committed to ever-greater and closer union. It will not listen to arguments, however sensible they are, and however well this economy has or has not done over the past five or 10 years, and it will not take empirical lessons because its ideology is different from that. I will not repeat my previous points about starting the process of this sovereign Parliament’s reporting to the EU.

[Mr Hollobone]

I am listening to the hon. Gentleman with great interest, and he has evident expertise in matters European. Does he share my concern that one of the problems with our so-called convergence with Europe is the impact on our trade deficit with Europe, which, I understand, is large and growing? That might well be partly a consequence of the tremendous economic recovery in this country and competitive devaluation in Germany, but, given that we are meant to talk about convergence today, my concern is about the growing deficit in trade with our European partners.

[Graham Stringer]

Yes. The hon. Gentleman makes a pertinent point.

I had finished what I wanted to say about the EU, the eurozone and the process. I just want to make three quick points about the Minister’s statement and the points raised earlier in the debate. First, the Minister said that the Prime Minister had achieved a reduction in the European budget. If my memory is correct, the Prime Minister negotiated a reduction in an increased budget but with actually increased expenditure in European budgets. I should be grateful if the Minister checked and corrected that fault.

Secondly, to re-emphasise the points that a number of hon. Members made in their interventions on the Minister, this country would be a lot better off if we did not make our contribution to the European budget. On every project, we put twice as much money in as we get back. I might one day promote a private Member’s Bill to say that as an alternative to having the 12 EU stars on projects and saying, “What a wonderful project it is!” there should be a sign that says, “We could have had two of these projects if we had not contributed to the EU.”

Finally, I should be grateful if the Minister told the House how she intends to protect the rights of the House to decide on taxation if the European Court of Justice decides later that it wants to impose a trading tax on the City—a Tobin-type tax, 90% of which would be paid in this country and not in the rest of Europe.

14:52

[Mr David Nuttall (Bury North) (Con)]

It is a pleasure, as always, to follow my near neighbour from Greater Manchester, the hon. Member for Blackley and Broughton (Graham Stringer). As he and the House are aware, I agree with him on the issue of our membership of the European Union.

I want to bring the debate back to the motion, which states specifically:

“That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment”—

and so on. I will not read out the whole motion. It is purely for the purposes of complying with section 5 that we are being asked to approve the motion today—purely to comply with our obligations under European Union rules and regulations. I oppose the motion for that reason, as I have in previous years. I oppose it, but not because I oppose the Government’s financial policies—indeed, barely a week goes by without further evidence to prove that the policies are working. We could debate, as we have earlier this afternoon, whether things are going fast enough, and whether they are going as quickly as someone previously predicted, but I think all that is irrelevant. What is relevant is the fact that the economy, by any stretch of the imagination, is growing. Things are going in the right direction.

I welcome the fact that we have the opportunity to say that, but I regret the fact that we are having to do it in the context of submitting documents to the European Union. As has been said, this is the very last day for submission of the documents. I am not sure what would happen if—as I very much doubt would be the case—the House refused to support the Government’s motion. I will be voting against it and I would be interested to know what would happen. In last year’s debate, my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) mentioned that if the EU does not agree that we are carrying out the policies to its satisfaction, it can send a surveillance mission to the country, or even an enhanced surveillance mission. If so, I am sure that we would have great delight in meeting them, because they have a lot to learn from what this country is doing.

I do not agree that we, as a sovereign nation, should have to submit our economic policies to the bureaucrats in Brussels like some naughty schoolboy having to report to the headmaster with school work. There is no reason why we should have to go through this annual charade. It is an annual occasion when we have to approve, purely for the purposes of section 5, these documents. I see no reason why we cannot tag the motion on to the end of the Budget motions, for example, if we want to comply with this ridiculous law.

[Jacob Rees-Mogg]

For once, I disagree with my hon. Friend. I think it is of immeasurable importance that this debate remain a specific debate on the Floor of the House, because there may come a time when the House wants to refuse to report to Brussels and we need to preserve that right.

[Mr Nuttall]

I entirely agree on that point with my hon. Friend. If I had my way, we would disagree with Europe quite a bit more often than we do. I oppose the motion for that reason and no other, because I do not think we should send these documents to Europe. As I have said in previous years, and will probably repeat later in my speech, if the European officials are so interested in our documents, they are all available online. There is no reason why we need to produce this document.

For all that has been said about the fact that we have not spent any time on this subject, we do have before us a new document entitled “2013-14 Convergence Programme for the United Kingdom.” It is 247 pages long—slightly larger than last year’s document. It has been produced by Her Majesty’s Treasury specifically for this purpose and no other. So somewhere along the line the requirement to produce the document is costing the British taxpayer money.

We must be clear that the sole reason why the UK is making this submission—I quote from the treaty on the functioning of the European Union—is:

“In order to ensure closer coordination of economic policies and sustained convergence of the economic performances of the Member States”.

Why does the treaty require that? Simply because it is all part of their grand plan to forge together a single country called the European Union. That is what they want to see. That is why they want to have these documents sent in to them.

We are fortunate in this country that the UK electorate—the British people—had the good sense at the last general election to elect a Conservative-led Government with a Conservative Chancellor of the Exchequer, who was prepared to take the difficult decisions necessary to put our country back on the path of economic recovery, which means living within our means.

It is instructive to compare the progress that we have made, and continue to make, with that of the European Union. As my hon. Friend the Member for North East Somerset mentioned, the European Union’s own official statistics body—interestingly named EUROSTAT— reported that the United Kingdom economy grew by 1.7% last year, compared with a minuscule 0.1% in the rest of the European Union. Even worse, there was a 0.4% contraction in the economies of the countries within the eurozone. And even that performance figure is flattered by the fact that it includes the figures for Germany and France, whose economies, EUROSTAT reported, grew by 0.4% and 0.1% respectively.

The situation is the same for the respective unemployment rates. EUROSTAT reports that the unemployment rate for the European Union as a whole was 10.8% last year, and the latest figures show that unemployment in the UK for the three months to February was 6.9%. That is reflected in my constituency. The latest figures show that in Bury, Ramsbottom and Tottington there are 451 fewer unemployed people than there were a year ago, which means 451 more families have the security of a regular wage coming in each week. More new businesses are being started, business confidence is growing and all the signs indicate that the plan is working and we are on the road to recovery.

The rest of Europe ought to be looking at what the UK is doing and working out how they can adopt our Government’s policies and increase their growth rates. As the hon. Member for Blackley and Broughton said, we want our European neighbours’ economies to grow, because they are important trading nations, as I never fail to accept. The fact that I want us to leave the European Union does not mean that I do not want us to trade with it; I just do not think that we should have to pay a net contribution of £9 billion to have the privilege of doing so. It is simply unnecessary, because we trade with many other countries around the world without having to pay a membership fee to enable us to do so. Therefore, I do not believe that submitting a 247-page convergence programme document is necessary.

In conclusion, let me put two simple questions to my hon. Friend the Member for Loughborough (Nicky Morgan), whom I warmly welcome to her new role as Financial Secretary to the Treasury. First, what response has the Government received from the European Union on last year’s submission? Did we receive any acknowledgement from the bureaucrats in Brussels? Did they tell us that we were doing a good job and that they would use our document as a model for economic success? Did they say that they would encourage our partners to accept some of the policies set out in our convergence programme document?

Secondly, and perhaps more importantly—in view of the Prime Minister’s declared aim of putting an end to the commitment, which we are presently signed up to, to ever-closer union with the rest of Europe—will my hon. Friend confirm that, as part of any renegotiation of the United Kingdom’s obligations to the rest of Europe, the obligation to submit this annual convergence programme document will be removed? Does she agree that not removing that obligation will be seen as clear proof that those renegotiations have failed?

15:03

[Nicky Morgan]

I thank all hon. Members who have contributed to this extremely interesting debate. I will deal briefly with some of the points that have been raised. I hope to address all of them, but if I do not I will obviously be happy to discuss them afterwards and to try to answer any further questions.

I thank the shadow Minister for welcoming me to my new post. She is absolutely right that we will be seeing a lot of each other over the next few weeks as we deliberate the Finance Bill upstairs in the Committee Room. What I think was most interesting about her speech was that, rather like the Leader of the Opposition’s response to the Budget statement, it did not mention the EU very much at all. She went through the Opposition’s views on the Government’s economic policy, but I must say that I did not detect any signs of their own economic policy, which appears to be missing. That was interesting, given that the hon. Member for Blackley and Broughton (Graham Stringer) did mention the EU—I will mention his speech in a moment.

It is extraordinary that the Opposition, having previously claimed that there would be no recovery, that any recovery would be choked off and that we would have 1 million more unemployed people, are now saying that the recovery is too slow. No doubt they will move on to another form of criticism in due course. However, I am pleased that the hon. Lady did at least welcome yesterday’s figures on GDP growth, which are significant. As I said in my opening remarks, they show that the economy is growing and that we have momentum, but the job is not yet done.

[Mr Hollobone]

My hon. Friend is being far too modest —hiding her lamp under a bushel—because her own publication clearly states:

“Since early 2010, the pace of net employment creation has been 3 times as fast as over the same period in previous recessions and recoveries”

since 1973.

[Nicky Morgan]

I thank my hon. Friend for reading the document assiduously and quoting from it. Yesterday’s figures are a positive step, and the employment figures are very encouraging. As we know from the note left by the last Chief Secretary to the Treasury under the previous Government, there was no money left, because they had spent it all. This Government have had quite a task to rebalance our economy and fix the deficit.

The shadow Minister mentioned the Budget’s focus on savers. Let me tell her that millions of basic rate taxpayers are savers, because she somehow dismissed them by saying that we are not talking about households. I do not know where she thinks savers live, but they form their own households. As my right hon. Friend the Chancellor said, we are on the side of savers and hard-working people of all types. She also mentioned the savings ratio. The latest OBR forecast shows that the savings ratio will be around 4% over the next two years, which is still well above the pre-recession low of 0.2%. I honestly do not know how she has the nerve to criticise the ratio when people are still saving more in this country.

Let me move on to the characteristically eloquent speech from my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg), which showed his expert understanding. I was delighted not only that he could be here for the debate, but that he supports the Government’s approach. I have taken his comments on board, but I am glad that he can support the announcements my right hon. Friend the Chancellor made on recent fiscal events and this document. That is very important.

The hon. Member for Blackley and Broughton set out his unhappiness with the process. I understand what he was saying. He also mentioned the impact of the eurozone crisis on our economy over the past few years, which was important, and I am glad that he did so. He asked two specific questions. On the multi-annual financial framework, the Prime Minister agreed a real-terms cut in the payment ceiling to €908.4 billion, which is €80 billion lower than the Commission’s original proposal, €35 billion lower than the 2007-2013 multi-annual financial framework and €24 billion below a real-terms freeze on the last completed budget in 2012. That is why I could make my remarks about the Prime Minister’s achievements in negotiating a real-terms cut in the multi-annual financial framework.

The hon. Gentleman also mentioned the financial transaction tax, and we have heard the news today from the European Court of Justice. Let me set out that the UK will not be joining the enhanced co-operation financial transaction tax. Today’s judgment confirmed that the UK can challenge the final proposal for a financial transaction tax if it is not in our national interest and undermines the integrity of the single market. Today’s announcement also confirms that the UK can challenge the eventual implementation if necessary without running the risk of the challenge being too late. We needed to make an early challenge in order to set out our stall for later negotiations for a financial transaction tax should they prove to be disadvantageous to the UK.

My hon. Friend the Member for Bury North (Mr Nuttall) set out in his characteristically forthright style that he fundamentally disagrees with the whole process, which I fully respect. I am, however, sorry that he will not be joining us in the Lobby this afternoon. He will understand that we are currently part of a treaty that requires us to submit this convergence programme, and I explained to him following his earlier intervention why we wanted to submit a final document, rather than the draft that has been submitted in previous years.

My hon. Friend also asked about last year’s response from the EU. There was a response and I sent the European Scrutiny Committee an explanatory memorandum about that. He also asked about renegotiation, and I take note of what he said. We clearly will not be setting out a negotiating stance at present, but I draw his attention to the recent article written by my right hon. Friend the Prime Minister in The Sunday Telegraph—I do not have the exact date, but it was certainly within the past month or so—in which he set out some key areas for renegotiation. He talked about:

“Powers flowing away from Brussels, not always to it”,

and about

“National parliaments able to work together to block unwanted European legislation.”

I hope that all of that is music to the ears of my hon. Friend the Member for Bury North. As he would expect, further announcements will be made in due course.

Following this debate and Parliament’s approval, the Government will inform the European Commission of their assessment of the UK’s medium-term economic and budgetary position. The convergence programme will be submitted later today, which is a legal requirement under the EU’s stability and growth pact. The Government of course take legal requirements seriously. At the same time, however, I reiterate to hon. Members that, as in previous years, the document is based entirely on previously published documents that have already been presented to Parliament. The submission of convergence programmes by euro-outs and stability programmes by euro area member states provides a framework for co-ordinating fiscal policies. As I said, a degree of fiscal policy co-ordination across countries can be beneficial to ensure a stable global economy, which is in the UK’s national interest. It is important that we continue to use the European semester process to encourage member states to take national decisions on structural reform and growth that will help to support the European economy.

Budget 2014 set out the next steps in the Government’s long-term economic plan to secure the recovery and build a resilient economy, which requires tough decisions to put the public finances on a sustainable path. Budget 2014 supports businesses to invest, to export and to create jobs and cuts taxes for hard-working people. There is much still to do, however, and the Government are not complacent.

Ultimately, sustainable growth is the only way for both the UK and other EU member states to pay down their debts and to exit the current difficult economic times. The UK Government are leading the EU growth agenda and making the case for ambitious EU reform. On that basis, I am pleased to commend the motion to the House.

Question put.

15:13

Division 257

Ayes: 288

---

Conservative: 248
Liberal Democrat: 39

Noes: 235

---

Labour: 215
Democratic Unionist Party: 7
Conservative: 4
Scottish National Party: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 1
Independent: 1
Green Party: 1

Resolved,

That this House approves, for the purposes of Section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in Budget 2014 and Autumn Statement 2013, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook (2014) and Fiscal Sustainability Report (2013), which forms the basis of the United Kingdom’s Convergence Programme.

Wales Bill (Programme) (No. 2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the Order of 31 March 2014 (Wales Bill (Programme)) be varied as follows:

In the Table in paragraph (4) of the Order, in the column headed ‘Time for conclusion of proceedings’, for ‘The moment of interruption on the first day’ substitute ‘Ninety minutes after the moment of interruption on the first day’.—(Stephen Crabb.)

Question agreed to.

Wales Bill

Wednesday 30th April 2014 Commons Chamber

Considered in Committee

[1st Allocated Day]

[Dawn Primarolo) in the Chair]

Clause 1

Frequency of Assembly ordinary general elections

15:28

[Owen Smith (Pontypridd) (Lab)]

I beg to move amendment 9, page 1, line 5, leave out subsection (1) and insert—

‘(1) GOWA 2006 is amended as follows.

(2) Leave out subsection 3(1) and insert in substitution—

“( ) The poll at an election to the National Assembly for Wales is to be held on a Thursday on a date to be determined by a Resolution of the National Assembly for Wales.”.

( ) Subsection 3(2) is amended by—

(a) leaving out “If the poll is to be held on the first Thursday in May”; and

(b) in paragraph 2(a) by leaving out “that day” and inserting “polling day”.

( ) Leave out sections 4 and 5.

( ) Section 13 is amended by inserting after subsection (1)(c)—

“(1A) The order may not include provision about the date of an election to the Assembly.”.’.

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Amendment 30, page 1, line 6, at end insert ‘and after the words “order under”, insert ‘section 1A or’.

Amendment 10, page 1, line 8, at end add—

‘(3) A Resolution of the National Assembly for Wales under subsection (1) may not determine a date for the poll at an election to the Assembly that is the same as the date known or reasonably expected for a parliamentary general election as derived from the provisions of the Fixed-term Parliaments Act 2011.’.

Amendment 31, page 1, line 8, at end add—

‘(3) After section 3(1) of the GOWA 2006 insert—

(1A) A poll for an ordinary general election to the National Assembly for Wales may not be held within six months of the date of a general election to the United Kingdom Parliament.”.’.

Clause stand part.

[Owen Smith]

It is a pleasure to serve under your Bristolian and neighbourly chairmanship, Ms Primarolo.

Clause 1 relates to the timing of elections to the National Assembly for Wales. It is a response to the five-year term that has now been established for elections to this House. Our amendments 9 and 10 are probing amendments that seek to explore the Government’s willingness to concede the principle that the Assembly needs to have greater control and command over elections to it. That is what we are testing with our amendments.

[Mr Mark Harper (Forest of Dean) (Con)]

I am pleased the hon. Gentleman said that these were probing amendments, but I notice that he has not troubled the Committee with an explanatory note, which is disappointing. My reading of the amendment is that it removes any necessity for an election to be held to the National Assembly. It allows the National Assembly for Wales to have no more elections ever. It appears to be the “Labour doesn’t want to have an election ever again in Wales” amendment.

[Owen Smith]

I hoped that we would have a serious debate today and serious interventions from colleagues across the Chamber. Obviously it is not the intention or the effect of the amendment to get rid of elections to the National Assembly for Wales, not least because we want those elections not to coincide with the changes made in the House by the hon. Gentleman when he was pushing through the gerrymandering legislation relating to elections to the House and the five-year term that we now endure. “Endure” is the right word, given how little business is being brought forward by the Government and how little work we have to do in the House. Today we have an important and serious Bill before us and I hope the hon. Gentleman will engage with it in a serious manner.

[Mr Harper]

Will the hon. Gentleman give way?

[Owen Smith]

No. We all want to get on with the serious business before the Committee, not nonsensical point-scoring.

These are probing amendments. They explore the extent to which the Government agree with us that, in principle, it should be with the consent of the National Assembly that changes are made to elections that affect it.

[Mr Mark Williams (Ceredigion) (LD)]

I, too, am glad that these are probing amendments. I very much agree with the principle that the hon. Gentleman is establishing that these responsibilities should be devolved to the National Assembly, but what safeguards does he envisage operating there to ensure that gerrymandering, of which he has, sadly, accused the Government, could not occur in the National Assembly?

[Owen Smith]

The clear principle to which we are responding with these amendments was outlined by the Welsh Government in their response to the Green Paper produced two years ago. For the information of the Committee, that stated that

“no change to the Assembly’s current electoral arrangements should be made without the Assembly’s consent. This is the fundamental constitutional principle in issue. It is a necessary consequence of a constitution based upon the principle of devolution.”

That is a clear expression from the Welsh Government on the centrality of their view in any changes to legislation which affect the elections to their Chamber—to the Assembly in Wales. That is something we wish to explore today with the Government.

Clearly, the Bill arises from the shift to a five-year fixed-term Parliament for this place. Three separate pieces of legislation needed to be amended as a consequence—the Scotland Act 1998, the Northern Ireland (Miscellaneous Provisions) Act 2014, and now the Government of Wales Act 1998. Labour is not opposed to fixed-term Parliaments, as the hon. Member for Forest of Dean (Mr Harper) will recall. In previous manifestos, including the last manifesto, Labour has consistently pledged to shift to fixed-term Parliaments, but we have consistently said that a five-year fixed term for any institution was too long.

[Jonathan Evans (Cardiff North) (Con)]

I am grateful to the hon. Gentleman for the tone with which he started his speech. Will he explain the rationale for his sticking with a Thursday? Since he is aiming to give responsibility to the National Assembly and to let it decide the issue entirely, why does he say that the poll should be held on a Thursday? He will be aware of a growing body of opinion among those who undertake electoral research, who look to examples on the continent, where elections are held at weekends—traditionally on Sundays—or opportunities when people may be able to participate more in the electoral process. Perhaps he can help us to understand why, since he is putting the proposition that it is entirely a matter for the National Assembly, he has restricted polling day to a Thursday.

[Owen Smith]

It is a great pleasure to serve under your chairmanship, Dr McCrea. I had not spotted that you had arrived, for which I apologise.

The simple answer to the hon. Gentleman’s question is that this is, of course, the custom, practice and protocol in British elections for all institutions. I hear what he says about the interesting debate about whether, in an era of great cynicism towards and disinterest in and disengagement from politics, we ought to expand people’s opportunities to vote. Labour Members are looking seriously at that and have already suggested that it ought to be looked at, but for the purposes of this Bill and the principle under discussion, as opposed to the issue raised by the hon. Gentleman, it seemed simpler to stick to the customary practice of a Thursday. That is why we did not suggest a change.

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

Perhaps the hon. Member for Cardiff North (Jonathan Evans) will have an opportunity to table a probing amendment on that issue. Why does the Bill refer to five years? I understand that that is how this Parliament currently operates, but is there now an accepted body of wisdom that says that five years should be the default position of any democratic Assembly or Parliament?

[Owen Smith]

The reality is that the accepted, orthodox wisdom of electoral experts around the world, certainly in Britain, is that five years is probably too long and that four years would be more appropriate. Certainly in the history of this place, four years has been not the norm, but the exception. Ordinarily, over the long term, elections to this place have taken place rather more frequently than that. Our primary concern—this reflects the view of all parties in the National Assembly for Wales, particularly the Welsh Labour Government—was to ensure that the elections for this House and those for the National Assembly did not coincide on the same day, which would have been the case without the changes introduced by this Bill. Nevertheless, it struck us as important to probe the Government’s view of the degree of consent they ought to seek from the National Assembly and the respect they ought to show to devolution when making changes to an election that is not ours. I think that the view of most people—it is certainly the view of most experts—is that five years is too long.

[Mr Harper]

On Second Reading, the hon. Gentleman responded to a question asked by, I think, the hon. Member for Rhondda (Chris Bryant) by kind of giving the impression that Labour’s policy, if it were returned to power, would be to revert to a four-year term for this House and amend the Fixed-term Parliament Act 2011. Will the hon. Member for Pontypridd (Owen Smith), for the convenience of the Committee, confirm that?

[Owen Smith]

The hon. Gentleman claims that I implied that, but I do not think I have been explicit on the matter, either then or now. When we last debated the issue, we were clear that the majority opinion is that four years is better than five. Another orthodox opinion in Britain and elsewhere is that too many changes to constitutional matters are bad for the electorate and that constantly chopping and changing for partisan reasons—as the hon. Gentleman did when introducing the 2011 Act—is bad for democracy in Britain. In the light of that, and in a period in which people are disengaged from politics, we may choose not to be partisan and not to pursue that sort of strategy when we win the next election.

[Hywel Williams (Arfon) (PC)]

I want to refer to the point made by the hon. Member for Cardiff North (Jonathan Evans). There is a great deal of virtue in considering holding elections on days other than a Thursday. That is the practice in other countries. Perhaps the hon. Member for Pontypridd (Owen Smith) can help the Committee with his historical knowledge: have elections in the UK always been held on Thursdays? I seem to remember that at some point in our history they were not.

[Owen Smith]

I believe that the hon. Gentleman is right. Elections have not always been held on a Thursday. However, in recent memory and certainly in the last century, elections have mainly been held on a Thursday, which is why we are sticking to it in amendment 9. That is not the substantive point that we are trying to make; it is an interesting debating point, but not one that we need to bother the Committee with any longer.

With that, I conclude my remarks on our amendments to clause 1. We do not intend to put them to the vote, but we want to hear the Government’s views on the need for them to engage properly with, seek proper consent from and pay proper respect to the devolved Administration in Cardiff.

[Mr Harper]

It is a great pleasure to serve under your chairmanship, Dr McCrea.

I want to pick up the hon. Member for Pontypridd (Owen Smith) on his response to my intervention. I was deadly serious. If he wants to intervene, I will happily take his intervention, but I am afraid that his amendment would do exactly what I said it would do. It would amend section 3(1) of the Government of Wales Act 2006, which states that a poll

“at an ordinary general election is to be held on the first Thursday in May in the fourth calendar year following”

the previous one. In other words, the provision insists that there has to be an election every four years. His and his hon. Friends’ amendment would remove section 3(1) of Government of Wales Act and simply provide that the poll

“at an election to the National Assembly for Wales is to be held on a Thursday on a date to be determined by a Resolution of the National Assembly for Wales.”

That does not leave in the legislation any requirement for a periodic election. If the amendment were put into law and the National Assembly for Wales did not set a date for an election, there would never be such an election. An accurate characterisation of his amendment is that it is a “Labour party governs Wales for ever” amendment. Under his provision, if any party with a majority in the National Assembly for Wales simply does not set a date, there will be no election, and no back-stop in legislation would insist on an election. I absolutely accept that that may not have been the hon. Gentleman’s intention, but that is the effect of his amendment.

[Owen Smith]

As I have said, that effect was not our intention. I will not repeat myself, but I will say that were it our intention to stop more elections to the National Assembly for Wales, that would be a pretty peculiar thing for us to do because although we currently govern as a minority Government in Wales, we of course anticipate governing as a majority Government in Wales in the near future. I look forward to more elections in Wales, especially given the polls showing that both the hon. Gentleman’s party and the Liberal Democrats are failing badly.

[Mr Harper]

I am grateful to the hon. Gentleman for confirming that that effect was not the intention of his amendment. However, as I have said, that would be its effect, and the Committee obviously has to consider the amendment on the amendment paper—the one he drafted and tabled—not one that he probably now wishes he had drafted. As I have said, it is not sensible to give the National Assembly for Wales the power to do exactly what the amendment suggests, which is to have no back-stop at all.

I am now even more confused about the Labour party’s policy on term limits. The hon. Gentleman is quite right that, during the passage of the Fixed-term Parliaments Bill, his party did not disagree with the concept of fixed terms. It was very clear that it did not support five-year terms, but preferred four-year terms. On Second Reading just a few weeks ago, he made it clear in response to the hon. Member for Rhondda (Chris Bryant) that he wanted to move to four-year terms. I suggested that the hon. Member for Pontypridd ought perhaps to have a word with his party leader, and it sounds from his slightly more nuanced response that he has had such a conversation and been told that under no circumstances is he to pledge moving back to four-year terms. That probably also provides an answer to the hon. Member for Ogmore (Huw Irranca-Davies).

I will not say any more about the amendments of the hon. Member for Pontypridd, which he has confirmed are probing amendments, but I want to comment on Plaid Cymru’s amendments 30 and 31, specifically amendment 31. They highlight an important issue, which is one for the Committee to debate, about the coincidence of elections. We discussed that when we debated the Fixed-term Parliaments Bill, and it was one reason why I, as the then responsible Minister, decided to move the date of the National Assembly for Wales election.

15:45

There are two schools of thought on this matter. The first is that elections should be separated so that the debate on the issues that face the United Kingdom can take place and the British people can make a decision that is separate from the decisions that face the Welsh electorate. There is a perfectly sensible argument for that. The second view is that we should adopt the US model and have all the elections that we can possibly have on the same day. That means accepting that the public are perfectly able to distinguish between the elections.

Although I accept the latter point, we arrived at the conclusion that we did because of the point about media coverage and the ability for issues to be explored properly. I think that the public are perfectly capable of making decisions in different elections on the same day. The danger is that not all of the appropriate issues will be explored in the coverage, the debates in the media and the debates between party leaders.

[Hywel Williams]

This is a genuine inquiry. Does the hon. Gentleman recall the election day in Scotland when there were elections for various public offices using different electoral systems? I seem to remember that it was disastrous.

[Mr Harper]

The hon. Gentleman makes a good point. If we have elections on the same day, we certainly need to ensure that there is clarity about the electoral systems and in the design and printing of the ballot papers, so that it is clear for people not just which parties they might want to vote for, which is a decision for them, but the mechanism by which they can do so. A lot of lessons were learned from that process. We had that in mind when we held the referendum on the parliamentary voting system and we tried to ensure that there was not the level of confusion that there had been in the past.

Amendments 30 and 31 are hopeful amendments. Having considered all the evidence, I think that it makes sense to separate the big elections. I am not sure whether six months is long enough. We decided to shift the elections by an entire year to separate the media coverage and the debates so that people could focus on the important issues. The amendments raise some sensible issues. It makes sense to keep the elections to the primary legislative assemblies in the UK—the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly and this Parliament—apart. That was the provision that we made in the Fixed-term Parliaments Act 2011.

I am therefore pleased that the Bill presented by my right hon. Friend the Secretary of State permanently makes the terms of the Assembly the same length as those of this House, but offset by a year to keep the elections separate. That will enable a proper debate to take place before elections to this place and will enable Welsh voters to have a proper debate about the issues that the Welsh Assembly and Welsh Assembly Government will focus on.

Finally, if people’s decisions in Welsh elections are indeed made on issues for which the Welsh Assembly and the Welsh Assembly Government are responsible, my reading of the situation, based on how the Welsh Assembly Government are handling the national health service in Wales, which I will not talk about today, but which we will return to on the second day of Committee, is that the Welsh public might reach a different conclusion from that put forward by the hon. Member for Pontypridd. I look forward to their having the opportunity to do so and to the result, because I think that it might shock the hon. Gentleman. He should not be so complacent.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

It is a pleasure to serve under your chairmanship, Dr McCrea, and to speak to amendments 30 and 31, which appear in my name and those of my hon. Friend the Member for Arfon (Hywel Williams) and my right hon. Friend the Member for Dwyfor Meirionnydd (Mr Llwyd). They are both probing amendments and follow the spirit of the contributions by the hon. Members for Pontypridd (Owen Smith) and for Forest of Dean (Mr Harper).

We welcome the fact that we are discussing a piece of Wales-specific legislation. It is only three years since the remarkable referendum in 2011, when the people of Wales voted overwhelmingly in favour of full political sovereignty over the political fields that were devolved to the National Assembly. I have no hesitation in saying that that was one of the proudest days of my political career. The desktop on the computer in my Westminster office has a picture of the referendum count in Carmarthenshire, with the yes votes piled up proudly on the yes table, and a few bundles of no votes on the no table.

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

Get a life!

[Jonathan Edwards]

Well, apart from the Swans staying up this year—another great achievement, which I know the hon. Member for Pontypridd (Owen Smith) shares with me.

Most striking about the referendum result was that it was matched across every county in Wales—apart from Monmouthshire, which only just voted no. When the history of Wales is written, that result will be recorded very strongly when compared with the referendums of ’79 and ’97. It was an earthquake moment, and I remember the shell-shocked faces of many Unionists down in Westminster the week after that historic occasion.

The nature of the game has therefore changed, and subsequent opinion polling clearly indicates that the people of Wales want greater control over their lives. I think they are far ahead of the political class at the moment, and I even include Plaid Cymru in that context. Today we are discussing in historical terms a further milestone on the path towards Welsh self-government, with, for the first time, a national legislature being empowered to have an element of fiscal powers. Needless to say, the Bill does not go anywhere near as far as my party would want in terms of powers for Wales, but as an historian in a previous life I can safely say that when the history of Wales is written, this period will be seen as one of rapid political development for our nation.

As we celebrate the 20th anniversary of the great indie band from Manchester, Oasis, and its first studio album in ’94, I am reminded of one of its best songs, “Little by Little”. I hope sincerely that when we conclude our Committee deliberations we will not be “looking back in anger”—a reference to another of its great songs. Today is therefore another landmark in the political development of our country.

The context of the Bill is interesting in itself, and I get the impression that the Secretary of State would rather walk through fire than deal with the Bill today. I am sure he sees it as a hospital pass from his predecessor. The Bill results, of course, from the UK Government-sponsored Silk commission, in particular part I, and I pay tribute to Sir Paul and his fellow commissioners for their work on both stages of the report. As I said, as a party our evidence to both parts of the commission called for far greater progress than was finally agreed, but we were prepared to compromise to seek agreement and make progress. It is therefore disappointing that we find ourselves presenting amendments in Committee, and endeavouring to preserve the integrity of the Silk commission.

Unfortunately, the Wales Bill has torpedoed the recommendations of the Silk commission, particularly in relation to the lockstep on the income tax powers, which we will discuss later. Even more regrettably, it seems that Labour’s amendments to the Bill, rather than strengthening it as we seek to do, aim to place further roadblocks and move us even further from what the Silk commission proposed.

[Glyn Davies (Montgomeryshire) (Con)]

The hon. Gentleman is running through the parts of the Bill that he disagrees with, and it is entirely possible that people on both sides of the Committee may disagree because it is a wide-ranging Bill. Does he accept, however, that the Bill makes dramatic progress in that it provides the foundation stones for financial accountability to be vested in the National Assembly for Wales? That is a key step forward that makes the Bill hugely important for the interests of Wales.

[Jonathan Edwards]

As I said, I think the Bill will be viewed as an important milestone in the constitutional development of our country, but it will not surprise the hon. Gentleman to hear that my ambition for Wales is greater than what is set out in the Bill.

[Owen Smith]

A moment ago the hon. Gentleman said that Labour was in some way seeking to undermine the Bill, and I am aware from media reports that that is the line Plaid Cymru is taking in the media. I wish to place on record that that is the opposite of what we are seeking to do. We are probing the Bill today but we will support it. We are looking to strengthen the powers held by the Welsh Assembly in many regards, and we are seeking greater symmetry on tax powers with Scotland. Crucially, we will be tabling amendments to secure fair funding in advance of any of those changes, and looking to ensure that we move to a reserved powers model—all of which I am sure the hon. Gentleman would support.

[Jonathan Edwards]

If that is indeed the hon. Gentleman’s position, I am sure he will join us in the Lobby when we vote on the new clauses later.

The second major context in which this debate takes place is the seismic events happening in Scotland. As I said yesterday in the Welsh Affairs Committee, the second part of the Silk commission’s work will be superseded by the result of the independence referendum, one way or the other. Even the Bill could be superseded by events in Scotland, as its proceedings in the Lords are likely to happen after the people in Scotland have cast their vote in the independence referendum.

[Jonathan Evans]

Does that really hold good as an argument? The hon. Gentleman will have seen current opinion polls that show that support for independence—as opposed to support for devolution—in Wales is at an all-time low. He has rightly talked about the seminal change in Wales in which the Conservative party has joined other parties to support devolution, but the result of the Scottish debate so far is that support for Welsh independence is lower than ever before.

[Jonathan Edwards]

I do not want to get into a debate about independence, but the most detailed polling ever undertaken on devolutionary attitudes was by the Silk commission in the second part of its work. It suggested that 20% of people in Wales wanted devolved defence and foreign affairs, and those would be the two last powers that would ever be devolved.

Regardless of the result in Scotland, the constitutional landscape of the UK will change considerably. If Scotland votes yes, that will be the end of the British state as we know it. If it votes no, the likelihood is that it will get significantly more powers, with 90% approval ratings for a devolution-max settlement that would devolve everything apart from defence and foreign affairs. Is the hon. Gentleman seriously saying that the people of Wales would accept the settlement in the Bill if Scotland were to get significantly more powers, even in the event of a no vote?

[Chris Ruane]

If the vote in Scotland is close but ultimately a victory for no, does the hon. Gentleman anticipate that the SNP will come back for another vote, and another after that, and that it will not be so much a referendum as a neverendum?

[Jonathan Edwards]

As long the people of Scotland have those aspirations and vote for an SNP Government, I imagine that they would want to ask the question on subsequent occasions, but that is a debate for another time. Considering the way in which the opinion polls are moving, it seems that the question might be settled this time.

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

I remind the House that the Prime Minister said a few months ago to the people of Scotland that, whatever happens, devo-max is on offer to them. My hon. Friend is right to say that that means that the constitutional set-up of the UK will have to change, come what may.

[Jonathan Edwards]

As ever, I am very grateful to my right hon. Friend for his valid and expert intervention. Whatever happens in Scotland, it will completely change the political landscape and supersede Silk and even perhaps what we are discussing today.

With the Scottish question in mind, I believe that the UK Government have missed an opportunity to bring forward a settlement that would have helped them to develop a narrative in Scotland in which the Westminster elite recognised the national aspirations of the people of the nations of the state, and were happy to reform the relations between the nations of these isles to preserve the future of the state. One obvious measure would have been to devolve income tax powers to Wales in the Bill without the Scottish lockstep model. We will debate that issue in greater detail, but suffice it to say at this point that the unambitious nature of the Bill leaves the people of Scotland in little doubt that the referendum is a straight choice between more powers with yes and the status quo with no.

Amendments 30 and 31 would ensure that the poll for an ordinary general election to the National Assembly could not be held within six months of a general election for the UK Parliament. I am reassured by the discussion I had with the Minister before the debate. That, and the comments by the former constitutional Minister, the hon. Member for Forest of Dean, is why I am probing rather than pressing the amendments to a vote. When he took the Fixed-term Parliaments Bill through the House, he did a lot of work to ensure that there would be no coterminosity between the Assembly and the general election. That would have presented a great danger to our democracy in Wales.

16:00

This is important because we have to mitigate the damaging effect that media distortion can have on democratic debates in Wales. Plaid Cymru was excluded from the 2010 election TV debates, in which no mention was made of the fact that much of the discussion surrounding health, education and other devolved areas would not affect the people of Wales. Wales has a number of daily newspapers, notably the Western Mail and the Daily Post, but their readership is extremely small. Many fantastic local papers are under pressure, not least the Carmarthen Journal, South Wales Guardian, the Tivyside Advertiser and the South Wales Evening Post.

[Chris Ruane]

The Ryhl Journal.

[Jonathan Edwards]

And the Rhyl Journal, although I am not an avid reader, I must admit.

Most people get their political news from London papers. If we have a Westminster election and an Assembly election in close proximity, there is a great danger that the issues for which the national Assembly is responsible will be dropped completely. The Minister has indicated that there is no intention to bring the elections closer and that there are protections in the Bill to ensure that there will be a gap of at least a year between them, so I am happy not to press my two amendments.

On the Labour amendments, the Electoral Reform Society has lobbied extensively against amendment 9, arguing that

“good governance and greater stability is achieved through fixed terms and this should not be a power that is given to the Executive to decide.”

It points out that, as the electoral system for the Assembly makes coalitions more likely, fixed terms also provide stability and security for parties of government. Two of the four terms in the Assembly have seen coalition Governments, so I agree with that point.

Amendment 10 appears to have been drafted with the aim of ensuring that Assembly and Westminster elections are not held on the same day. I would have been happy to support that if it had been pressed to a vote.

[The Parliamentary Under-Secretary of State for Wales (Stephen Crabb)]

I, too, would like to start by welcoming you to the Chair, Dr McCrea. It is a pleasure to serve under your chairmanship. I thank hon. Members on both sides of the Committee for their contributions to this early part of the first day of our deliberations.

Amendment 9 would give the Assembly the power to decide, by resolution, when Assembly elections are held, and would remove the Secretary of State’s powers in relation to varying the date of Assembly elections and proposing a date for extraordinary Assembly elections. Amendment 10 would prevent the Assembly from setting a date for an election on a day on which it knows, or reasonably expects, a parliamentary general election to be held. The amendments would permit the Assembly to determine the date of Assembly elections and consequently the length of its own terms. That reflects a recommendation made by the Welsh Affairs Committee arising from its pre-legislative scrutiny of the draft Wales Bill.

It is worth pointing out that the Silk commission considered the matter of legislative competence for Assembly elections to be outside its terms of reference and made no recommendations in this regard in its second report. Nevertheless, the Government believe that the devolution of further powers to the Assembly should not be undertaken in a piecemeal fashion, and that the issue would best be considered in the wider context of possible changes to the Welsh devolution settlement arising from the recommendations made by the commission in its second report. The Government made clear, on publication of the report, that recommendations requiring primary legislative change should be a matter for the next Parliament and the next Government, and consequently that they should be for political parties to consider in preparing their election manifestos. We believe the same principle should apply when considering whether legislative competence for Assembly elections should be devolved to the Assembly. It is important that electors are clear on how long they are electing Assembly Members for when they vote in the 2016 Assembly election, and that five-year Assembly terms are in place by then to ensure that Westminster and Assembly elections do not coincide in 2020.

The Fixed-term Parliaments Act 2011 moved this House to a fixed five-year cycle and consequentially provided that the next ordinary general election to the National Assembly for Wales would be moved on a one-off basis by one year from 7 May 2015 to 5 May 2016. This responded to concerns raised by the Assembly that holding general elections to this House and to the Assembly on the same day could lead to the Assembly elections being overshadowed. I am encouraged that Members of all parties seem to be in agreement on the position that we do not want the two elections coinciding. I particularly welcome the Labour party’s support in seeking to minimise the risk of that, which is evident in amendment 10.

Similarly, amendments 30 and 31, tabled by right hon. and hon. Members from Plaid Cymru, are intended to ensure that an ordinary Assembly general election does not take place within six months of a UK general election. I am encouraged that the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) has been reassured by the debate so far and by our previous discussions, and that he is not going to press his amendments on that basis.

There is cross-party support for the principle that, as far as possible, we should seek to ensure that ordinary general elections to the Assembly and to this House should not coincide. With the next Assembly election scheduled for 2016, if the Assembly remains on a four-year cycle, the two sets of elections would coincide every 20 years, starting in 2020—something that all parties are clearly keen to avoid. Clause 1 makes it far less likely that Assembly elections and parliamentary elections will coincide in future. I therefore ask Opposition Members to support the clause, to consider the further devolution of powers to the Assembly in the context of preparing their own parties’ manifestos and consequently to withdraw or not press the amendments.

[Owen Smith]

I am grateful to the Minister for acknowledging that our amendments reflect the views of the Welsh Affairs Committee and, indeed, as I said earlier, those of the Welsh Government, and that they were tabled in good faith. I am equally pleased to hear that when it comes to looking at the Silk commission part I report or any legislation that might arise from it or be reflected in the manifestos before the next election, the Government will be open to considering whether the Assembly should be responsible for—or at least have the ability to consent to—when the elections should take place. In the light of the Minister’s remarks, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 ordered to stand part of the Bill.

Clause 2

Removal of restriction on standing for election for both constituency and electoral region

[Mr Harper]

I beg to move amendment 15, page 2, line 33, at end add—

‘(5) The Secretary of State shall make arrangements for an independent review of the—

(a) likely and possible impacts on the effectiveness of the Assembly of the removal of the restriction on standing for both constituency and electoral region. In particular, the review shall examine the implications for the desirable total number of Assembly members and the proportions elected by each route; and

(b) advantages and disadvantages of amalgamating the five Assembly electoral regions into one for the whole of Wales.

The Secretary of State shall lay a copy of the report of the review before each House of Parliament within nine months of this Act receiving Royal Assent.’.

The Temporary Chair (Dr McCrea): With this it will be convenient to discuss the following:

Clause stand part.

New clause 4—National Assembly to set number of AMs—

‘Her Majesty may by Order in Council provide for the transfer of responsibility for setting the number of Assembly Members to the National Assembly for Wales.’.

New clause 6—Transfer of responsibility for determining electoral system—

‘Her Majesty may by Order in Council provide for the transfer of responsibility for determining the system of election of members of the National Assembly for Wales to the Welsh Government.’.

[Mr Harper]

The Committee will be pleased to know, I hope, that I view this as a probing amendment—unless I am provoked. I thought it would be helpful to draw out some of the implications resulting from taking a wider look at the issues about clause 2 that were raised on Second Reading. I shall say a few words of support for clause 2 and its principles and also speak about new clauses 4 and 6.

Amendment 15 is designed to achieve a number of things. Members will remember that the Parliamentary Voting System and Constituencies Act 2011 effectively decoupled the linkage between the geographic constituencies of the Welsh Assembly and the Westminster ones. Although, after the amendment to the Electoral Registration and Administration Act 2013, this has not yet taken effect for the 2015 general election—sadly, in my view—it will of course kick in for the 2020 election unless the primary legislation is changed. It thus seems sensible to look separately at the number of geographic constituencies that we need for electing Members to the Welsh Assembly, to look at the number of regions to determine whether we should have a number of regions or a single region, and to look at the relative balance between constituency seats in the Welsh Assembly and those elected on a list system which obviously affect the proportional nature of the system.

The system that we have now is the one that was set up at the beginning of the process. I think that, following the experience of a number of sets of elections and a number of different Administrations, as well as a change in the powers and responsibilities of the National Assembly, it would be sensible for the total number of Assembly Members and the relative balance between the different election routes to be considered. The setting up of an independent review by the Secretary of State is one possible way of going about that, although obviously there are other possibilities.

[Albert Owen (Ynys Môn) (Lab)]

The hon. Gentleman wants a review because of the additional powers given to the Assembly, and because elections have produced either minority or coalition Governments in Cardiff Bay. Is it his personal opinion that there should be more Members of the National Assembly because of those additional powers? I fear that, rather than ending up with regional Members on the list system, we shall end up with parties choosing from the party list, and that, as a result, Members will come disproportionately from one area of Wales, and will not be representative. The additional Members have constituency work to do, and if the hon. Gentleman’s amendment were passed, that would be diminished.

[Mr Harper]

If the hon. Gentleman reads my amendment, he will see that it is very balanced. It simply calls for an independent review, the report of which would go to the Secretary of State, who would lay it before each House of Parliament so that it could be considered. [Interruption.] The hon. Gentleman says that I have an opinion, and I do, but let me explain what the amendment will do—because Members will want to think about what is on the amendment paper—before explaining my view and what I consider to be the appropriate direction of travel.

The amendment simply suggests that the review should

“examine the implications for the desirable total number of Assembly members”

of the changes that we are making in clause 2—and I think it very sensible to revert to the original position, which the Labour party altered—and also examine the

“advantages and disadvantages of amalgamating the five Assembly…regions into one for the whole of Wales.”

That is because if the number of constituency seats is changed, depending on the number of those seats, it can be difficult to come up with equally sized regions. Alternatively, the regions have to be changed every time the number of constituencies changes.

[Jonathan Evans]

I am seeking to reflect the tone of my hon. Friend’s remarks. I accept that he is only asking for a review. However, before he gives his own view to the Committee, perhaps I can ask him to comment on his experience of the change that took place when the European Parliament moved from a system of individual constituencies to a system of vast regions. I myself have experience of representing the whole of Wales under that system. It has been pretty universally regarded as very difficult for any Member to represent an area of that size, and my hon. Friend must have had the same experience in his own part of the world. Do we really need to review this matter? Perhaps, when he outlines his own view, he will reflect on what I have said.

[Mr Harper]

My hon. Friend has made a very sensible point. The south-west of England is certainly a large region. I think I am right in saying that my hon. Friend the Member for Tewkesbury (Mr Robertson) has put it on record that the distance between one end of the south-west region and the other is greater than the distance between his constituency and the Scottish border. Moreover, the south-west region now includes Gibraltar. It is a very significant region, and a difficult region to represent. I suspect that very few electors in that region could, hand on heart, name any of their MEPs, let alone all of them.

If we are to consider changing the number of Members of the Assembly in the geographic constituencies, we must then ask how the regions are to be grouped, and whether they should end up being equal in size. At present, there are five regions with four seats in each region. That works very well mathematically if there are 20 Assembly Members and half the Members are constituency Members, but if the number of constituencies is changed—and I shall explain in a moment why I think that that should happen—some choices will have to be made about regions.

We may end up with regions that are different in size. If the regions then become too small, with too few seats, the problem is that we do not get the proportionality in those regions that the list system is designed for. We may not want to consider using the whole of Wales and instead consider having just fewer, larger regions, but I accept that pushing against that is exactly the point my hon. Friend makes about the remoteness of elected Members from voters. Two things are pushing in different directions and we have to keep them in balance, which is why we need a review to examine both aspects so that a future Parliament can make a decision.

16:15

[Jonathan Evans]

My hon. Friend refers to people having difficulty knowing who their representative is, and I would not claim that everybody in Wales knew I was their MEP. A survey indicated that only two people could be identified as Wales MEPs. One was Glenys Kinnock and the other was Neil Kinnock—mistakenly, most people in Wales thought he was an MEP, too.

[Mr Harper]

My hon. Friend makes a sensible point. My reading of it, as an Englishman, is that there seems to be a surfeit of Kinnocks in Wales at the moment. Labour does not seem to like the hereditary principle at the other end of this building but is keen on importing it into this House and having hereditary MPs—not a practice that I suspect is welcome.

My amendment helpfully proposes an independent review, but there are other ways of examining these issues, and the Minister may have a better and more sensible one. I listened to his response to the debate on clause 1, and it may well be that waiting for part II of the Silk commission and the Government’s response to it is a way of addressing the issues I raise in amendment 15, in which case I will not need to trouble the House by testing its opinion.

[Chris Ruane]

Does the hon. Gentleman agree that many list Members in Wales will be licking their lips at his proposals? A list Member who wants to climb the greasy political pole in Wales and wants a constituency Assembly seat or a constituency parliamentary seat currently sets up their office in that constituency, works just that tiny patch and tries to get their own way. A list Member in north Wales now has a choice of 10 seats, but if the hon. Gentleman has his way they will have a choice of 40 seats. It might work for the individual list Member, but it does not work for democracy in Wales.

[Mr Harper]

The hon. Gentleman is putting words into my mouth, because I made it clear, in response to my hon. Friend the Member for Cardiff North (Jonathan Evans), that my amendment’s position on the regions is balanced. It asks us to look at the “advantages and disadvantages”. I will set out my view on the number of constituency Members and the direction of travel. I was saying that if there are a different number, that presents issues as to how we divide up the regions. It raises questions about whether all the regions can remain equal in size and whether, if we try to continue with the current number, some regions may end up being too small to deliver a proportional result. That is why the issue should be looked at. However, I also acknowledged in my response to him that there is an opposite pressure in respect of making sure that elected Members and their constituents feel close enough to each other. That pushes in the opposite direction and we need to look at all the issues so we can properly weigh them up.

[Hywel Williams]

I am sure the hon. Gentleman would also concede that we must consider the geographical problem of representing Wales from Llanfairynghornwy down to Llanelli or to Caldicot. Unfortunately, I have to do that journey fairly frequently and it is a nightmare just for the ordinary traveller, so trying to represent that entire geographical area is not something to be taken lightly.

[Mr Harper]

That is a good point. As I said, I am very familiar with it, because colleagues in the European Parliament tell me—this relates to a point my hon. Friend the Member for Cardiff North made—that it can take an extremely long time for someone to get from one end of the south-west of England to the other by road, or even by rail. That is why my amendment suggests that we need to look at the advantages and the disadvantages, so that a proper decision can be taken. We need to think about the regions. As Members will recall—I know this was not popular among those on the Labour Benches—I think we have too many elected Members at the moment. The provisions that I have suggested were to reduce the size of this place, and to ensure that electors in all parts of the United Kingdom were equally represented rather than over-represented as they are at the moment, with the average size of a seat in Wales—in terms of the number of electors—being smaller than the rest of the country.

[Huw Irranca-Davies]

I appreciate the way in which the hon. Gentleman is using his amendment to test and explore the efficacy of a review of the different scenarios that could arise. I am interested to hear his thoughts on another scenario, a wholly different trajectory towards, for example, increasing to 80 the number of Assembly Members who are bound to a constituency. We could have dual Member constituencies so that there was a direct link, but that is not in the review. I put it to him that better than the amendment would be to wait for part II of Silk and for the wider issues around that and to explore all the different options relating to both numbers and structures rather than accepting a slightly partial amendment looking at only a couple of scenarios.

[Mr Harper]

I think I indicated at the beginning of my remarks that this was a probing amendment. I said that I had listened to the Minister’s response to the debate on clause 1, and that that may well be an acceptable solution. The independent review looks at the impact of the removal of the restriction on standing for both constituency and electoral region, which is obviously the specific purpose of clause 2. In particular, it says that we should examine the implications for the desirable total number of Assembly Members and proportions elected by each route. I guess it implies that we will have at least some Members elected by region. I accept the hon. Gentleman’s point that we could move to a wholly constituency-based system. I shall listen to the Minister’s response first, but I am prepared to accept that waiting for part II of Silk and the response to that may well be a perfectly sensible way in which to proceed. I thought that we should have some discussion today rather than focusing narrowly on whether a person can stand for both constituency and electoral region. We discussed that at some length on Second Reading, but I felt that a slightly wider debate would be more helpful.

[Mr Llwyd]

The hon. Gentleman referred to the attempt by the Government to—as he put it—equalise the workload of Members of Parliament. I represent a constituency that runs 100 miles north to south and about the same across, with a population of only 55,000. Other Members may have a constituency of five miles across and a population of 75,000. I argue that that is already an equal situation. It takes me an hour and a half to two hours to get to surgeries, whereas other Members may have to travel only two minutes on the bus, so we are already equal. It is extremely difficult to make judgments without taking a ruler and making the mistakes of previous Governments in terms of dividing up Africa. I strongly believe that we are already equal. I am not being self-serving, because I am not standing again anyway.

[Mr Harper]

I am grateful to the right hon. Gentleman for his intervention. There is a clear principle in our system. Of course we represent localities in one sense, but we represent electors and not big empty spaces and fields full of sheep and other animals—[Interruption.] I ask Members to let me finish my point. I say that because I have a relatively large constituency. It is a pleasant environment with a number of farms. I live next to a farm that has cows and sheep, but the point is that I do not represent them in Parliament; I represent my electors. Even if a Member has a geographically small constituency with 100,000 electors, it is the 100,000 electors they are representing and not the space. Equally, I accept that if a Member has a significantly sized rural constituency, as I and the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) do, but they have only 50,000 electors and a distance to travel between them, it is the 50,000 electors whom they are representing. In the Parliamentary Voting System and Constituencies Act 2011, we made specific provision for two seats, Orkney and Shetland, but that was based on the fact that they were already recognised in statute as significantly different.

In general, it was accepted that a Member represents the people in a constituency and not the surrounding environment, but I accept the point. There are challenges for Members about how they look after their constituents and there are the burdens of travelling, which I know all too well. I think that I might have provoked the hon. Member for Vale of Clwyd (Chris Ruane), so I shall give way to him.

[Chris Ruane]

I thank the hon. Gentleman for giving way a second time. He says that he thinks there are too many elected Members, and he proposes to cut the number by 50. How does that square with the fact that since the coalition has been in power an extra 150 Lords have been appointed?

[Mr Harper]

I can square that fact very well, as I was also the Minister who introduced proposals in this House, which I supported then and support now, to reform the other place, dramatically reduce the number of Members and make it democratic. I am only sorry that the Opposition would not support the programme motion that would have enabled us to make such a provision and I am afraid that, as I said at the time, if we have a system of having peers who serve for life, as we do, the only way to bring the party balance more into line with the results of the previous election is to keep appointing more peers, which means that the other place continues to get bigger. If, God forbid, the Labour party—

[Chris Ruane]

One hundred and fifty.

[Mr Harper]

The hon. Gentleman says that there are 150, and I do not think that that is actually the number, but the point is that even with the number of appointments we have made, four years into this Parliament the number of Conservative peers has only just equalled the number of peers representing the Labour party, despite the fact that our commitment was to make the other place more accurately reflect the result of the general election. That reflects the enormous number of appointments made by his party when it was led by Tony Blair and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). That does not detract from my point, however. I wanted to reform the other place and to reduce the number of Members in both this place and the other place. I wanted to reduce the cost of politics and I am sorry that we were not able to do so, but I will not take any lectures from the hon. Gentleman, because he and his party did not support our legislation and they made sure that that reform could not happen—more’s the pity.

[Mr Mark Williams]

I want to return to the issue of the amount of space between electors that was mentioned earlier, not just in relation to our capacity—I have 600 family farms in Ceredigion, which covers a big rural area—but, critically, in relation to our constituents’ capacity to access us. That takes us back to the point about the hon. Gentleman’s amendment. Going down the route of having a list system with a list made up of anonymous people would, I think, be a retrograde step, as evidenced by what the hon. Member for Cardiff North (Jonathan Evans) said about anonymity, distance and how that will ultimately mean that we will fail our constituents.

[Mr Harper]

The hon. Gentleman makes some very good points, and I acknowledged them in response to my hon. Friend the Member for Cardiff North. I said that that was why I wanted the review to consider both the advantages and disadvantages. We need to consider them because the proposals I brought before the House to reduce and equalise the number of Members in this place clearly had an impact on the number of parliamentary Westminster seats in Wales, reducing the number from 40 to 30. We decided to decouple the number of constituency seats for this place from the number in the Welsh Assembly, but it seems to me that if we are going to consider the number of Members and if the trajectory of the number of Westminster Members is going down, we should at least consider how many constituency Members there should be in the Welsh Assembly. If that number moves downwards, as I think it probably ought to, consequences will clearly flow from that for the size of the regions and how we group them. We must also build in a process whereby we can change the number of seats as the population increases, decreases or moves to ensure that that equal representation continues.

Setting up the independent review enables all those issues to be considered properly. A report to the Secretary of State can then be produced and laid before both Houses of Parliament so that a proper decision can be taken. The Silk commission might well be able to consider all these issues in the further work it will undertake, and when I listen to the Minister’s response I might find that the amendment is effectively redundant. However, the issues are worthy of consideration.

[Susan Elan Jones (Clwyd South) (Lab)]

I am absolutely certain that the hon. Gentleman did not intend to raise any North Walean hackles, but he has. Regional representation is hugely important in Wales, because those of us who have always been pro-devolution have always argued that it is fundamental that the different parts of Wales are represented at a regional as well as at a constituency level. I would not want any possible scenario that would see those lists increasingly South Walean-dominated. That would not be right for the future of the devolution settlement.

[Mr Harper]

The hon. Lady makes a good point. I do not want to trespass into North Walean and South Walean rivalries, but I am well aware that, if for no other reason than the geography of Wales, the communication links between north Wales and south Wales are quite difficult, and journey times can be lengthy—as Members have pointed out to me. It is relevant to the health debate next week that there is a lot of east-west cross-border travel between England and Wales to access essential public services, partly for the reason that travelling north-south is not very easy. The hon. Lady makes some good points. My amendment was very balanced, looking at both the advantages and disadvantages of a larger list, so that a properly informed decision can be taken.

16:30

I have taken several interventions, so I intend to make progress. I want to say a word or two on clause 2, but I shall not dwell on it because we debated it fairly fully on Second Reading. It ought not to be very controversial. It simply returns the one—and indeed improves it slightly—to the one that the Labour party introduced when it set up the devolution arrangements, allowing candidates to stand both for a constituency and on the list. It seems to me that the subsequent change was a retrograde one, because effectively it reflected an attempt to disadvantage minority parties. It seemed to me, listening to the Second Reading debate, that the Labour party’s view is that minority parties in Wales means all other parties than itself; and there is some very good evidence from the Electoral Commission and others that that restriction—preventing candidates from standing in a constituency and on a list—particularly disadvantages smaller parties and disadvantages the Labour party less. It seemed to me, therefore, a particularly partisan change. Clause 2 simply restores the position to where it was, but with some sensible amendments to ensure that people cannot stand on a list that relates to the other end of Wales from the constituency that they are standing in.

[Owen Smith]

May I just check? The hon. Gentleman referred to the minority parties a moment ago. Is he referring to his own party, the Conservative party in Wales, as a minority party?

[Mr Harper]

No. I was referring to the Labour party’s view, which, when I listened carefully to the debate, seemed to be its definition—not mine; its definition—that a minority party was any party other than Labour. It seemed to me that the effect, and I think the intention, of the change that it made, which this Bill seeks largely to reverse, was a partisan one that was designed to favour Labour and disadvantage all others.

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

But does not the hon. Gentleman think it is a strange system where someone could lose their seat, only to get back in by being No. 1 on the list?

[Mr Harper]

Well, it might be a strange system, in the sense that I am not the greatest fan in the world of proportional representation. The hon. Gentleman knows that, because when I brought in the changes to allow the voters of Britain to choose between the status quo electoral system for this House and the alternative vote system, I made it very clear that although I was facilitating the referendum, I was a strong supporter of first past the post.

However, the decision was taken by the Labour party to have a mixed system in the Welsh Assembly, and we have supported that system. It is perhaps not where I would have started if I had been inventing the system from scratch, but it is what we have. It does have a range of consequences. It has the range of consequences that my hon. Friend the Member for Cardiff North alluded to. Some of the regions are quite large. It is therefore possible to have disconnect between voters and the elected. By the nature of list systems, people are elected because of the party that they represent, not based on any of their individual qualities. So, to take the specific point raised by the hon. Member for Alyn and Deeside (Mark Tami), I am not sure I buy the concept that when people are elected on a list system, if someone loses it has necessarily been a vote against them rather than a positive vote for one of their opponents. [Interruption.] Well, it is a positive vote for their opponent.

[Mrs Siân C. James (Swansea East) (Lab)]

Will the hon. Gentleman give way?

[Mr Harper]

I will in a minute, but I will answer the point made by the hon. Member for Alyn and Deeside first.

When one votes in an election—I had an exchange on this with the right hon. Member for Neath (Mr Hain)—one puts a cross in a box on the ballot for a candidate. Now, I accept that part of one’s motivation may be that one thinks that the candidate is a wonderful person, but it might be dislike for the incumbent, or that one is making a range of judgments on whom one wants to govern the United Kingdom or, in the case of the Welsh Assembly election, Wales. I accept there is a mix of motivations, but even if one accepts the hon. Gentleman’s contention that if an incumbent constituency Member loses their seat—assuming that people’s motivation was wholly negative; that is, they voted for the incumbent’s primary opponent because they did not like the incumbent—and that Member subsequently gets elected on the list, the list simply reflects the party choice that voters made. It is the nature of the list that the person is elected not based on any of their individual qualities—the voter is not able to do that—but based on the party they represent. The fact that they may or may not have won a constituency seat is not relevant to the debate.

I think the hon. Gentleman is just throwing up chaff to obscure the fact that the previous change was a partisan change made by the Labour party, and the clause simply restores the position not to one that we created, but one that Labour made when it invented devolution.

[Mark Tami]

Does the hon. Gentleman not accept that, in most cases, the odds are that the person who is No. 1 on that list, even if they lose their seat, will hold a seat in the Assembly? Why is that a particularly democratic system? How does it tell people out there that it is worth voting if, whether or not they like that person, he or she will almost certainly get back in?

[Mr Harper]

The hon. Gentleman is not making a case about clause 2. He is making a case about whether it is sensible to have proportional representation on list systems. In such a system, someone who is No. 1 on the list is very likely, regardless of what electors think about that person—their particular characteristics—but based on their party, to get elected. We face the same problem in the European elections. I have heard the qualities of individual candidates being debated, but of course voters are not able to pass judgment on a candidate. If I like the Conservative party—I do, of course—and I vote that way in south-west England, I have no ability to make any judgments about the candidates. I will vote for the Conservatives and they will win.

[Mark Tami]

That is a pure list system.

[Mr Harper]

The hon. Gentleman says that, but I do not see that having a mixed system in which someone may be elected on a list and not be elected for a constituency raises any more issues than having a list at all does. It may be that he does not like having a list system and he wishes we did not have one, but we do, so we should try to make it work as well as possible. I think that the changes in the Bill are sensible and I wholly support them. I promised to give way to the hon. Lady.

[Mrs James]

I am sure the hon. Gentleman agrees that the public are very confused by the system. Comments in my constituency range from, “It’s not fair,” through, “Well, it’s getting elected through the back door,” to “They shouldn’t be able to get in in this way.” What does he suggest that the clause is saying to the democratic voting public of Wales, if a person can have two bites of the cherry if they like?

[Mr Harper]

Those are all perfectly valid criticisms of list systems where voters are presented with a party choice, rather than list systems where votes have the ability to order the candidates. The hon. Lady’s point on whether people have proper choices is a valid criticism of every list system in which the voter can vote only for the party and has no ability to rank candidates, because in such systems whoever is at the top of the list will almost certainly get elected regardless of whether voters think highly of their personal qualities, but I do not think it is a valid criticism of the changes in the Bill we are considering today.

Finally—[Hon. Members: “Hear, hear.”] Opposition Members groan, but I have been generous in taking interventions. Had I simply spoken and taken no interventions, I would have been finished some time ago, but that would not have been the right nature of a debate in Committee on an important Bill, so perhaps we could have a little less chuntering from the Opposition parties.

I want to ask a question about new clauses 4 and 6, which were tabled by Plaid Cymru. I was a little confused, because new clause 4 states:

“Her Majesty may by Order in Council provide for the transfer of responsibility for setting the number of Assembly Members to the”

Assembly, which is consistent with the points made by the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) in his earlier remarks on clause 1 about giving the Assembly more control, but new clause 6 would give

“responsibility for determining the system of election of members”

not to the National Assembly but to the Welsh Government. It is almost certainly the case that that is not what was intended and that it was intended to give responsibility to the Welsh Assembly.

[Jonathan Edwards]

I am grateful to the hon. Gentleman for giving way and for giving me the opportunity to respond. We understood from the Clerks that, for drafting reasons, they would prefer to use “Welsh Government” in the Bill, but he is right that the intention is to devolve responsibility to the National Assembly.

[Mr Harper]

I am glad that the hon. Gentleman said that, because although it may be the case that a party with a majority is in effect the Government and can get the Assembly to do what it wants, there is a difference in giving Ministers executive powers to make changes to electoral systems. Systems of election should at least be determined by the Assembly. I have not made a decision on whether responsibility should lie with the Assembly or remain with Parliament, but it certainly should not become an executive decision of the Welsh Government. It was not the intention, but a combination of new clauses 4 and 6 and amendment 9, which was not moved, would have given the First Minister the power not to have any elections at all. If there were elections, he could have decided the system of election and put himself into a powerful position. I am glad that we have discovered that that is the intention neither of the Labour party nor of the hon. Gentleman.

In conclusion, I shall listen carefully to the Minister, but amendment 15 is probing. I strongly support clause 2 and will vote for it to remain part of the Bill. I am grateful for the clarification that the hon. Gentleman has provided on new clauses 4 and 6.

[Jonathan Edwards]

It is a pleasure to speak to new clauses 4 and 6, which are in my name and those of my hon. and right hon. Friends. We intend to press new clause 4 to a vote, but new clause 6 is probing.

If passed, new clause 4 would transfer responsibility for deciding the number of Assembly Members to the National Assembly, as explained by the hon. Member for Forest of Dean (Mr Harper) on my behalf. At present, the National Assembly has 60 Assembly Members, which is same as when it was established in 1999. The Scottish Parliament has well over 100 Members, and I am sure, Dr McCrea, that you could inform me that the number in that fine building in Stormont, which I have visited many times, in Northern Ireland is also above 100. Since 1999, the institution’s legislative competence has grown considerably, particularly after the 2011 referendum, which I referred to in my earlier contribution, resulting in full law-making powers in devolved areas being given to the National Assembly. Common sense would dictate that the Assembly, working with the Boundary Commission for Wales, should now determine the number of Members necessary to ensure its smooth running. I take the point made by the hon. Member for Ogmore (Huw Irranca-Davies) in his intervention on the hon. Member for Forest of Dean, but new clause 4’s intention is that, should the discussions be concluded, it would be a matter for the Assembly to determine rather than this House of Commons.

Increasing the number of Assembly Members has been endorsed by the Electoral Reform Society Cymru, as well as the 2004 Richard commission, which was commissioned by the Welsh Government of the time. The present Presiding Officer of the Assembly, Rosemary Butler AM, has also argued that the institution should have 80 members. The second report of the Silk commission, published in March, argued for the same and stated:

“The size of the National Assembly should be increased, and…most analysis suggests that it should comprise at least eighty Members.”

In October 2013, the Electoral Reform Society Cymru and the UK’s Changing Union project published a report, “Size Matters”, that went further by arguing for an increase in the number of AMs to 100. It based its findings on an evidence-based examination of legislatures across Europe and further afield. It concluded that, as the Assembly now controls a budget of nearly £15 billion and can pass laws on education, health and transport, a larger legislative body is needed to ensure that the law-making is done thoroughly and is not rushed.

16:45

The Assembly at present is arguably buckling under the weight of the new powers it has been granted. It would be in the best interests of full and open democracy to ensure that there is an adequate number of AMs to keep the Executive in check. After all, aside from the Welsh Government Members, there are only 42 Back Benchers in the Assembly, which by any standard is not enough. I read with interest the comments of Julie Morgan, the AM for Cardiff North—she served with distinction as a Member of this House for many years—in yesterday’s Senedd debate on the Silk commission. She made the case that the Assembly should immediately set up a Committee to determine how many Members it needs to perform its functions.

[Mr Harper]

I am listening carefully to the hon. Gentleman. One of his arguments for having a larger number of Assembly Members is that the Assembly will need more of them as its responsibilities grow and cover more areas. Given that those powers and responsibilities have effectively been transferred from the UK Government and therefore relate to policy areas that no longer need to be scrutinised in this House, does he think that it follows that increasing the size of the Assembly because of its increasing powers and work load means that there should be fewer Members in this House representing Wales to reflect the smaller work load and lower level of responsibility here?

[Jonathan Edwards]

That relates to some of the points the hon. Member for Ogmore made earlier. My position has always been that any reduction in the number of Members of Parliament must be complemented with the transfer of significant further fields of power to the National Assembly, as happened in Scotland. Perhaps a more interesting context is the Williams commission, which has been set up by the Welsh Government to consider public service governance and delivery across Wales and, in particular, the number of local authorities. There seems to be a move towards reducing the number of councils and, therefore, councillors. Perhaps that might provide a better context for the debate on the number of AMs in Wales, rather than the number of MPs.

[Mr Mark Williams]

Given the timing of the Williams commission’s discussions on local government reform, does the hon. Gentleman not think that the amendment would be better placed in our manifestos—my party has already signed up to the reforms recommended in part II of the Silk commission—and debated at that time, rather than now?

[Jonathan Edwards]

The Minister made that point to me before the debate, but this legislation provides an opportunity now. Rather than making the case either for more Assembly Members or for fewer, the new clause essentially states that when the time comes to make that decision, it should be made by the National Assembly, not the House of Commons. It is a point of principle about where power lies in these matters. Given the shadow Secretary of State’s comments when he intervened on me earlier, I look forward to the Labour party’s support when we vote later—[Interruption.] Well, that is exactly the point.

[Hywel Williams]

I am disappointed by that sedentary intervention from the Opposition Front Bench. In our view it is the Assembly that should decide, because we see the people of Wales as sovereign, not this place.

[Jonathan Edwards]

I am grateful to my hon. Friend for that intervention, which highlights the key political difference between Plaid Cymru and our Unionist opponents.

Assembly Members are expected to be members of more than one Select Committee. Indeed, the Committees have a dual role, as they perform scrutiny and legislative functions. That means Members are under tremendous pressure, especially if they serve on more than one Committee, as many do. If more AMs were elected, some would be able to specialise in certain areas, and the burgeoning expertise would ensure that democracy in Wales is better informed. In any case, surely it should be for the National Assembly to determine its membership, not the House of Commons. We will therefore be pushing new clause 4 to a vote. We look forward to the support of like-minded individuals, even those on the Government Benches.

The motivation behind new clause 6 is straightforward. As we have been instructed to draft it by the Clerks, it proposes that the Welsh Government, rather than the UK Government, should have responsibility for determining the system used for elections to the National Assembly. Transferring this responsibility would streamline the election process and bring decisions relating to the democratic make-up of the National Assembly closer to the people it serves. It could also, I hope, lead to a more proportional system being used by that institution. Plaid Cymru’s preference would be for a move towards a more proportional system that reflected the wishes of voters more fairly.

Even with the top-up, the current system is extremely biased towards the Labour party. In the last election, Labour polled 40% yet got 50% of the seats. In elections before then, it has had 50% of the seats, and more, on 30% of the vote. We therefore argue that proportional representation would provide a better reflection of how people vote in National Assembly elections.

[Jonathan Evans]

Does the hon. Gentleman accept that his new clause could produce the opposite outcome? He may wish for a proportional system, but his proposal might take us back to first past the post, under which, at the last election, the Labour party got 36% of the vote and 65% of the seats.

[Jonathan Edwards]

I am grateful for that intervention. I had been minded to include provisions whereby the Assembly would be allowed to determine its own system but not to move to a less proportional system such as that advocated by the Labour party with its double constituency system. That would be completely non-proportional, with Labour perhaps receiving 70% of the seats on 30% of the vote, as the hon. Gentleman suggested. However, as a democrat, I believe that these matters should be devolved to the National Assembly. Parties would then fight the Assembly elections on manifesto commitments, and if people decided to vote for a party that wanted an undemocratic political system and one-party rule, that would be a matter for them.

[Jonathan Evans]

Since the hon. Gentleman is a democrat, he will know that there was a democratic referendum. In that referendum, where I argued for a no vote, we lost the vote, but only by a tiny margin. The electoral system was part of what was voted on when the Assembly was set up. Therefore, surely, if we become less proportional, that should not be in circumstances where there is not at least referendum approval for the electoral system.

[Jonathan Edwards]

That is an interesting intervention. Clearly, it would be a matter for parties standing for the Assembly on manifesto commitments whether they determined to put their preference to a referendum. The hon. Gentleman makes a valid suggestion, and it could well be the case. However, the basic point of what we are trying to achieve is that that power should reside at National Assembly level rather than with this Parliament here in London.

The purpose of the new clause is not to change the electoral system in and of itself, but merely to transfer responsibility to the National Assembly so that it can change the system should it so wish. Who can forget—this goes back to the point made by the hon. Member for Cardiff North (Jonathan Evans)—the manner in which the Labour party used the Government of Wales Act 2006 to gerrymander the electoral system by banning dual candidacy and imposing on Wales an electoral system that is used only in Ukraine? I am glad that through this Bill, the UK Government will rectify that disgraceful decision made through the 2006 Act.

Any decision by this Parliament on the electoral system of the sovereign Welsh national legislature will always be met with concerns that the UK Government of the day are seeking political advantage. The simplest way to address those concerns would be to devolve responsibility to the National Assembly so that it is responsible for determining its own electoral system. The current situation is tantamount to the European Parliament legislating on the electoral system used to elect Members of this House. Surely, after a decade and a half, it should be a matter for the National Assembly to determine its own preferred electoral system. It does not need Big Brother Westminster determining these matters. London needs to let go and treat the National Assembly with some respect.

[Jonathan Evans]

I am grateful, Dr McCrea, for the opportunity to contribute to this debate. I know that a number of colleagues want to speak, so I will endeavour to limit my remarks to the matter that causes me most concern—new clause 6 and its proposition that the voting system for the Assembly might be changed by the Assembly itself.

Let me set out my rather unusual position as a Conservative speaking from the Government Benches. Many of my colleagues will know that for more than 30 years I have been a supporter of proportional representation, and that at almost every Conservative party conference that has been held, I have hosted the Electoral Reform Society discussion. Having been elected to the European Parliament on a proportional system, I have no compunction or concerns about such a system. During the passage of the legislation through the House, I was one of only 17 Members to go through the Lobby in support of the amendment to introduce proportional representation.

I remind the Opposition of the debate that took place at the time of the referendum that was held to create the Assembly. That referendum was held after a general election which left my party with no parliamentary representation at all in Wales. I had served as a Welsh Office Minister until 1997. As my election result was declared in the middle of the afternoon on the Friday, I probably had the distinction at that time of being the last Conservative MP to have lost his seat, but my party had 20% of the vote. We have heard a lot about minority parties, Dr McCrea. Between 1992 and 1997 we served together in this House. I suppose it might have been said that your party was a minority party. It would not be said in Northern Ireland nowadays that your party is a minority party, so a little caution on the part of the Opposition might be in order.

When the debate took place on whether the Assembly should be created, the complex system of individual constituencies, then regions in which people are elected on the proportional system, was designed to reassure the people of Wales that we were not going to end up with one-party government—that we would not have a situation whereby a fifth of the people in Wales could vote for a political party and end up with no representation at all. There should be no doubt about that.

I was appointed by my then party leader, the present Secretary of State for Foreign and Commonwealth Affairs, my right hon. Friend the Member for Richmond (Yorks) (Mr Hague), to speak for the Conservative party at the time those debates took place. I remember the debates I had at that time with the Labour Secretary of State for Wales. We discussed the voting system, and he said that proportional representation was an integral part of the settlement to be put before the people of Wales. Bearing in mind the outcome of the referendum at that stage, the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) made it clear that in the more recent referendum there was significant support—transformed support—but also, I would argue, support from across the political spectrum.

My party was identified in the past as arguing against devolution. From the time that the vote took place, my party accepted the outcome of that vote. I remember, as the chief Conservative spokesman for Wales, speaking at that time to the shadow Cabinet and making the point that it did not matter whether the votes were in the hundreds or the low thousands: we as democrats had to accept the outcome of the vote.

I also put that argument to those who now say they want to change the voting system. We know already that those propositions have been put forward. New clause 6 would permit that change to take place. I agree with the hon. Member for Carmarthen East and Dinefwr. I am a democrat. I might be against his clause, but the aspect of it to which I have the strongest objection is that there is no fail-safe to make it possible to go back to the voters of Wales and ask, “Do you want to have a less proportionate system?” Whether by accident or not, to say within the terms of the clause, “Let the Welsh Assembly Government propose something”, is an open invitation for an outcome that I believe is fundamentally anti-democratic. It is no less anti-democratic because it is a decision made in Cardiff, rather than here in Westminster.

I accept the outcome of the devolution vote. Throughout my political life since that vote, I have supported the National Assembly for Wales, but I remember as well what the basis of the settlement is. I am concerned that the terms of the clause present an opportunity to undermine that settlement. That, in my judgment, would let down the people of Wales.

16:59

[Owen Smith]

I intend to speak principally to clause 2 and not to amendment 2 or the new clauses. We tabled an amendment to delete the clause, but it has not been selected, so we will push the clause to a vote.

I fear that gerrymandering has been a hallmark of this Government’s legislation on the constitution. We saw it in the Parliamentary Voting System and Constituencies Act 2011 and the Fixed-term Parliaments Act 2011, and the hon. Member for Forest of Dean (Mr Harper) has today sought, in effect, to reintroduce, through the back door, his gerrymandering proposals to reduce the number of Members representing Wales, which would have a consequent effect on the number of Assembly Members. I fear that clause 2 in particular continues in that vein.

[Mr Harper]

I will resist, I hope, being provoked any further, but how can the principle of ensuring that Members of this House represent a broadly equal number of electors be called gerrymandering? Most people would think that it is a matter of basic fairness. We debated this issue at length when the Parliamentary Voting System and Constituencies Act was making its way through Parliament. I understand why Labour Members did not like it, because it had an effect on them, but it is about delivering equality of representation, which I would have thought they were in favour of.

[Owen Smith]

I am grateful to the hon. Gentleman for his intervention, but I think it was made in the same spirit as that with which he has repeatedly made other arguments, which is to cloak his party’s partisan intent in the Parliamentary Voting System and Constituencies Act, the Fixed-term Parliaments Act and, indeed, clause 2 of this Bill with the veneer of a principled objective. That is not true: the rationale for all of those measures was to benefit his party, which is a smaller party—a minority party—in Wales. I intend to demonstrate why that is the case.

[Hywel Williams]

The hon. Gentleman has used the magic word, “minority”. In what way is a party with 30 out of 60 seats and that does not command the support of more than 50% of the Welsh electorate who actually vote a majority?

[Owen Smith]

The point I was making is very simple and I do not need to embellish it, because I can rely on the evidence provided by the Government’s own impact assessment, which states extremely clearly that the proposal’s objective is to benefit the

“smaller parties in Wales who may have a smaller pool of high quality candidates to represent them in elections.”

Labour Members certainly would not for one moment contest the argument that the smaller parties in Wales—among which I would, unfortunately, count the Conservative party—may have a smaller pool of high-quality candidates to represent them in elections, but I do not believe that that is an adequate reason for seeking to amend legislation with regard to this country’s constitution and elections.

[The Secretary of State for Wales (Mr David Jones)]

The shadow Secretary of State will know that under the original Government of Wales Act 1998, there was no ban on dual candidacy. At what point did the damascene conversion of the Labour party against the concept of dual candidacy take place?

[Owen Smith]

I am very grateful to the Secretary of State for asking that question, because I think the date was 2 or 3 May 2003. The precise geographical location of that conversion was on a road not to Damascus, but to Ruthin. It was of course during the Clwyd West election—the election to the Assembly in his constituency in north Wales—when we witnessed the extraordinary state of affairs in which Labour quite clearly won the election and the Conservatives, the Liberal Democrats and Plaid Cymru lost it, but the Conservative, Liberal Democrat and Plaid Cymru representatives were all returned to the National Assembly for Wales in what any right-thinking individual would think was a complete denial of democracy and natural justice.

[Mr Jones]

Will the hon. Gentleman give way?

[Owen Smith]

I give way to the Secretary of State to put me right.

[Mr Jones]

I anticipated that the hon. Gentleman might mention the so-called Clwyd West question. Was it not always entirely foreseeable from the moment that devolution was instituted under this system that in some seats a number of representatives would be elected by first past the post, on the list, or both? It was always foreseeable and, frankly, the fact that it was not foreseen seems a large oversight by the Labour party.

[Owen Smith]

That may well have been foreseeable. Labour has acknowledged that it was a mistake to draft the legislation in such a fashion that it became possible for would-be Members of the Assembly to nest like cuckoos in individual constituencies for a period, anticipating their entry to the Assembly via the back door. However, we did not imagine that the measure would be used so shamelessly as it was by parties in the Secretary of State’s Clwyd West constituency.

[Mr Mark Williams]

Has there been the same acknowledgement that such a measure was a mistake for elections to the Scottish Parliament or the Greater London authority, in which dual candidacy is still permitted?

[Owen Smith]

The hon. Gentleman makes a good point, and we should consider this matter right across the piece. The evidence of elections in Wales that is before our eyes, particularly in Clwyd West, but in other seats as well—Llanelli springs to mind, where wannabe Assembly Members perched for a significant period, only to contest the seats under first past the post—suggests that the measure will be abused. It has not of course been abused elsewhere, but it has been abused in Wales. That is why we as representatives of Wales, who were then in government but are now in opposition, are seeking to prevent this Government from amending the law for Wales so that we guarantee that such sorts of abuses do not take place in future.

[Mr Williams]

If the principle runs so deep and the risk of abuse is so great, surely the hon. Gentleman should talk to his colleagues in Scotland and London about reforming the systems there, rather than picking—quite frankly—on the National Assembly for Wales and the people of Wales.

[Owen Smith]

As all hon. Members do, I talk regularly to colleagues in other parts of Britain, but we are now addressing legislation that relates to Wales. The evidence relating to Wales that is before our eyes—from recent history in the Secretary of State’s own seat—suggests that there is a problem there and that the measure has been abused. As best we understand it, public opinion also supports my contention that the system should be retained and that the proposed ban should not be lifted.

[Mr David Jones]

The hon. Gentleman has twice used the word “abused” in the context of Clwyd West. Will he please explain what he means by abuse in that context?

[Huw Irranca-Davies]

It is fairly straightforward.

[Owen Smith]

It is pretty straightforward. As I have said, there was an instance in Clwyd West of the abuse of natural justice and of what most people understand as democracy by a system that allowed people to enter the Assembly via the back door. That is supported by the evidence, and I want to enumerate some of the pieces of evidence, because they are extremely important.

[Mr Llwyd]

The hon. Gentleman has used the word “abused”, which is objectionable, and has referred to the back door. Why in 2003 did Rhodri Morgan, Lorraine Barrett, Sue Essex, Jane Davidson, Jane Hutt and Leighton Andrews all stand for a constituency and on a list if that was so obviously attempting an abuse?

[Owen Smith]

Because that was quite clearly the system in place at the time. However, as I have acknowledged—my right hon. Friend the Member for Neath (Mr Hain) of course acknowledged it when he amended the law in 2006—we admitted that it was a mistake to allow people to abuse the system in such a fashion.

I hesitate to steal the thunder of my right hon. Friend, who referred to this matter so eloquently on Second Reading, but if we want evidence of the potential abuse of the system whereby an Assembly Member nests in a constituency that they subsequently want to seek election to through first past the post, we need look no further than the leader of Plaid Cymru, Leanne Wood. She published a memo to her members in an e-mail which provided what can only be described as a route map for such abuse. I did not intend to quote extensively from it, but as I have been provoked, perhaps I ought to remind the Committee of the details. She instructed her party:

“We need to be thinking much more creatively as to how we better use staff budgets for furthering the aims of the party.”

She went on:

“Regional AMs are in a unique position. They are paid to work full-time in politics and have considerable budgets at their disposal.”

She said:

“Consideration should be given to the location of their office—where would it be best for the region? Are there any target seats…within the region?”

She went on:

“They need not be constrained by constituency casework and events, and can be more choosy about their engagements, only attending events which further the party’s cause. This can be achieved by following one simple golden rule: On receipt of every invitation, ask ‘How can my attendance at this event further the aims of Plaid Cymru?’ If the answer is ‘very little’ or ‘not at all’, then a pro forma letter of decline should be in order.”

I do not think that we need any further evidence of the potential abuse to which I am referring.

[Mr David Jones]

Is the hon. Gentleman’s criticism not of Leanne Wood, who I agree behaved wholly disgracefully? Is he not overlooking the many regional Members who were elected and behaved entirely properly? His criticism is not of the system, but of an individual who behaved reprehensibly.

[Owen Smith]

The Secretary of State might be right that some regional Members behaved perfectly appropriately. I agree with him that Leanne Wood did not behave appropriately in instructing her colleagues to respond in that way. The point that I am making is that the system as it was constituted, and as he proposes to reconstitute it, was open to such abuses. That is why we suggest that the current system, which we put in place when in office, should be retained.

[Mr Jones]

The hon. Gentleman is being extremely generous in giving way again. Surely these issues could be resolved by a change in the standing orders of the Assembly, rather than by changing the legislation. Does not the Assembly have the power to regulate itself? The hon. Gentleman looks puzzled. I would have thought that he would recognise that the Assembly is in a position to regulate the conduct of its Members through its standing orders.

[Owen Smith]

The Assembly can do that, but that issue strikes me as rather tangential to the one that we are debating, which is the nature of the electoral arrangements that this House lays down for the Assembly, which the Secretary of State is seeking to change.

I will return to the guts of the matter, which is the evidence of the need for the change. I think that the evidence supports our view that no such change is required. I return to the evidence provided in the impact assessment by the Government. Although they concede that a majority of respondents to the consultation—a “small majority”, admittedly—were

“in favour of retaining the ban”,

they state that

“the Government does not think that a strong enough case for this was made in the consultation responses.”

[Interruption.] The Under-Secretary of State for Wales suggests that those were Labour responses. He really ought to take his consultation seriously. If the Government want their policy to be supported by the public, they ought to reflect the evidence, rather than dismiss it out of hand when it happens to be counter to their narrow, partisan interests.

[Susan Elan Jones]

I am intrigued and surprised that none of the three Plaid Cymru Members have stood up to defend their leader. In the interest of their silence, may I suggest a possible tweet for at least one of them: “We cannot answer what the shadow Secretary of State is saying, so we are silent and looking sheepish #nationalistsconfused”?

[Owen Smith]

I look forward to reading it on Twitter later this afternoon. To return to the evidence, the Government concede that this measure is solely designed to benefit the smaller parties in Wales—the Conservatives, the Liberals and Plaid Cymru—and that a majority of people responding to their consultation did not agree with their proposals to change it.

17:15

[David T. C. Davies (Monmouth) (Con)]

The hon. Gentleman just said that this change would benefit the smaller parties. Does he therefore think that not changing it would be beneficial to the largest party, and is he not also conflicted by an interest in this issue?

[Owen Smith]

I am merely quoting from the Government’s own impact assessment, which clearly states that this is for the benefit of the smaller parties in Wales, among which we count the Conservative party.

Public attitudes to this issue are relatively clear and there have been several reports. Most importantly, the Bevan Foundation—which is non-aligned although splendidly named after my great hero—conducted an analysis and a large survey to consider all these issues. It found that

“dual candidacy was unfair compared with those who felt candidates should be free to stand in both.”

As a reference to the detail included in that survey, I quote a respondent from Llanelli who asked:

“How can it be right that you vote one way and then the person who loses can still find a way to get elected?”

Someone from Swansea East said:

“I think it is unfair … It’s like people can sneak in the back door.”

and another said:

“It does seem unfair in a way, surely if they weren’t popular enough they shouldn’t be able to get in.”

Another respondent said:

“I don’t think some should have the added advantage of standing in both—it seems unfair really.”

and someone else from Llanelli said:

“You don’t have two bites of the cherry.”

[Mr David Jones]

Will the hon. Gentleman clarify whether the survey he refers to is the one that was commissioned by his hon. Friend the Member for Caerphilly (Wayne David), and although he refers to a large number of respondents, is it the case that there were precisely 47?

[Owen Smith]

It was indeed commissioned by my dear and hon. Friend the Member for Caerphilly (Wayne David), but the Bevan Foundation, as the Secretary of State will know, is a non-aligned charitable foundation. It would surely contest quite vigorously the implication—which I am sure he does not mean to make—that it is in any way aligned to the Labour party.

Of course, it is not just evidence from the Bevan Foundation that is important. International evidence suggests that this form of gerrymandering is not supported by the public. In New Zealand, for example, public opinion research conducted by the independent review committee, which is part of its Parliament and appointed to examine the electoral system, found that one key criticism was that it was possible for MPs to be defeated in an electoral contest but returned to the House through their position on the list—clear evidence that it is not just in Wales that people are concerned about that.

In fact, it is not just in New Zealand that there are concerns. In New Brunswick in Canada, an independent commission endorsed the ban on dual candidacy stating:

“The Commission heard that in some jurisdictions where candidates are able to run simultaneously on both ballots, voters are displeased with the case where a candidate is not successful in a single member constituency, but is elected anyway by virtue of being placed on the top of a party’s list.”

Evidence from two notable democracies—Canada and New Zealand—shows that it is not just those in the Labour party and in Wales who are worried about that process.

Of course, it is not just Labour Members who have been concerned about this issue: it used to be a concern of Members on both sides of the House. For example, Lord Crickhowell, a former Conservative Secretary of State for Wales, has said that the arrangements were “really pretty indefensible”. I would have thought that was a clear statement, but the current Secretary of State clearly does not agree.

Perhaps Liberal Democrat Members agree with the Chief Secretary to the Treasury who said when we last debated this in 2006:

“I should also point out that the Secretary of State for Wales has said that if the Commission had considered what he called the systematic abuses carried out by list members in Wales”—

which I have described here today—

“he would have reached the same conclusion that we have”—

“we” in that case being of course the Liberal Democrats—

“namely that a ban on dual candidacy is the only effective solution.”

We therefore have many examples from across the world, from Wales and from across the House of people’s concerns about the way in which the system has been abused.

[Mr Mark Williams]

The hon. Gentleman mentioned New Zealand and the international precedents that he asserts back his case. Is he aware that the final report of the commission that looked into the system in New Zealand concluded:

“It is proper and desirable…that political parties can protect good candidates contesting marginable or unwinnable electorates by positioning themselves high enough on their list to be elected”?

The New Zealand experience resulted in the ban being thrown out.

[Owen Smith]

I am aware of that: the point that I was making is that concern is felt about this issue across the world. It is not a narrow, partisan point: it has been widely discussed in other jurisdictions where this or similar systems have been applied. It has been suggested that this only applies in Wales, but that is not true. There are similar election arrangements in several Asian countries, including South Korea and Taiwan, where they have a similar ban on such behaviour.

[Mr Williams]

The key point is that the New Zealand experience validated the approach that the Government are taking in clause 2.

[Owen Smith]

I understood the point that the hon. Gentleman was making: I was merely pointing out the significant concerns in New Zealand that remain.

[Jonathan Evans]

The hon. Gentleman has shared with us the research that he has done on the position in New Brunswick. In neighbouring Quebec they had the same debate and came to the same conclusion as the Secretary of State.

[Owen Smith]

That is as may be. I merely say once more that this is not a straightforward, open-and-shut case, as it has been presented by the Government. We know otherwise—from the evidence of Clwyd West and other seats in Wales, from public opinion and, frankly, from what our constituents tell us about their dissatisfaction, which extends to the broader issue of the list and first-past-the-post system. We know that the public do not understand candidates being rejected under first past the post and then sneaking into the Assembly by the back door.

[Jonathan Edwards]

The hon. Gentleman says that he has been inundated by representations from constituents on this matter. I have to be honest and say that I have never had any discussion with a constituent on this issue. How many of the good people of Pontypridd have been on the phone to him?

[Owen Smith]

I am tempted to say that very few of my constituents—or, I suspect, those from any constituency in Wales—ever want to talk to me about the constitution, which seems to exercise Plaid Cymru all the time. Most people in Wales do not want to talk about the constitution: they want to talk about the cost of living crisis and the other problems that we have in Britain.

In conclusion, the evidence of the recent past in Wales suggests that the previous system was being abused. We have made a clear, principled non-partisan argument that the current system should be retained as it is. In so doing, we are striking a chord with the views of the Welsh Affairs Committee, which did not come to a final conclusion but did say, as a point of principle:

“we consider it unadvisable for electoral systems to be changed frequently. Successive changes to electoral systems risk being perceived as partisan by the public.”

This is clearly a partisan change. The public will see it for what it is and I am sure they would support us when, later this evening, we vote against clause 2 standing part of the Bill.

[Mr Peter Hain (Neath) (Lab)]

I welcome your Celtic insight into this debate affecting a Celtic neighbour, Dr McCrea. I apologise to you, and to those on both Front Benches, if I have to be out of the Chamber for the winding-up speeches.

I wish to speak on clause 2 stand part, a clause that reverses the ban on dual candidature, which this House legislated for in 2006. On Second Reading I provided detailed evidence about the widespread abuses of the dual candidacy system in Wales that led to it being banned under the Government of Wales Act 2006, which I introduced. None of that evidence was disputed or rebutted by the Government or any of the parties. I readily confess to being one of the Wales Ministers who, prior to devolution, took the original 1998 Government of Wales Bill through Parliament that permitted dual candidature, but I never for one moment imagined the abuses that it would produce and the antipathy it would create. Voters never understood that it was widespread practice, from when the Assembly was established in 1999 up until 2007 when it was banned, for candidates rejected by a particular constituency to secure back-door election as Assembly Members through the regional list. They were then even able to claim to represent the very constituency that had rejected them.

After reading the Government’s proposals for repealing the ban on dual candidacy, I have searched in vain for substantial arguments beyond cries of political partisanship. The truth is that the ban has affected all candidates of all parties by preventing each one from having a two-way bet with voters. The ban simply puts the voters in charge by ensuring that, if a candidate is defeated in the constituency vote, that candidate does not get elected in defiance of the popular will. At a time when the political class—all of us—are held in lower repute than at any time in the history of British democracy, the very idea that the Government are proceeding to ensure election losers become winners is absolutely extraordinary. It holds the electorate in utter contempt.

Let us examine the case advanced by Ministers. First, the Government have used evidence borrowed heavily from the Scottish elections, which are similar to ours in Wales, and manipulated evidence from the Arbuthnott report to support their case. Ministers claimed in the Green Paper that the Arbuthnott report on the situation in Scotland found no justification for the argument that public dissatisfaction with dual candidacy had a negative impact on voter turnout. They also used evidence from the Electoral Commission’s 2006 “Poll Position” report, which focused on voting in the National Assembly elections. Clearly, however, the Government chose only to reflect the contents of those reports selectively.

In fact, the Arbuthnott report quoted the Scottish social attitudes survey 2003, which found a high degree of opposition to party control of candidates on their regional election lists. Moreover, opposition to party control of the lists was particularly acute—this is the important point—because of public confusion with the system, exacerbated when regional Members of the Scottish Parliament appeared to get in through the back door having been defeated as constituency candidates. In the 2003 Scottish election Arbuthnott report, the public was indeed concerned that 88% of regional MSPs elected had fought and lost in constituencies. The closed list system was seen to have undermined the election result in these scenarios, as it raised questions of legitimacy for regional MSPs in voters’ minds. The Electoral Commission’s 2006 “Poll Position” report on voting in Wales clearly demonstrated that more than half the Welsh population—56.7%, to be exact—opposed the closed list system, which is still in place, and that more than 60% of the electorate preferred to be represented by just one Assembly Member.

17:30

The Arbuthnott report confronted exactly the same problems that I faced as Secretary of State: the questions “How do we limit the tension between AMs and MSPs that is created by constituency and regional lists where losers become winners?” and “How do we reduce abuses of dual candidacy?” The report suggested two measures to remedy those problems in Scotland, the more significant being clear identification of the differences between regional and constituency Members in legislation, with a clear code of conduct for Members of the Scottish Parliament. That is not proposed in the Bill.

The report argued that regional MSPs should not make misrepresentations to specific constituencies, and there should be a tacit understanding between constituency and regional MSPs that a constituency matter was for the constituency MSP alone. That effectively created a quasi-second tier for regional MSPs, because they had no remit to meddle with constituency matters. We do not have that system in Wales, and the Bill does not propose such a system. The report’s recommendation was then reinforced throughout Scotland by means of an educational campaign to highlight the subtle and important differences between regional and constituency representatives.

The Government may refer to clause 36 of the Government of Wales Act 2006, which is designed to prevent the public from confusing constituency and regional Assembly Members. It states:

“The standing orders must include provision about (or for the making of a code or protocol about) the different roles and responsibilities of Assembly constituency members and Assembly regional members; and…Assembly constituency members must not describe themselves in a manner which suggests that they are Assembly regional members, and…Assembly regional members must not describe themselves in a manner which suggests that they are Assembly constituency members.”

I legislated for the introduction of those standing orders in 2006, but there is still an endemic problem. Time and again, the result has been cherry-picking by regional members with clearly partisan motives of the matters in which they wish to become involved, while constituency members must deal with either the leftovers or the vital but burdensome daily process of casework and individual representation which is their proper responsibility. There was a clear example of that recently in the South Wales West region. A regional Assembly Member tried to claim leadership of the campaign for the Visteon pensioners, although it was not a devolved issue, and was being addressed—and, indeed, was finally resolved—by a cross-party group of Members of the House of Commons.

In practice, the system means that a regional AM or MSP who has lost a constituency vote can work within a constituency, and can effectively run a four or five-year election campaign focusing on high-profile public campaigning and generating publicity, while never having to confront the tough issues of daily representation and passing the buck to the constituency Member.

In 2003, former Liberal party leader and Scottish Parliament Presiding Officer Baron Steel of Aikwood said:

“My second reason for having second thoughts about the list system is that it led to unnecessary tension between some list Members and constituency Members and others. Quite the most distasteful and irritating part of my job as Presiding Officer was dealing with complaints against list Members’ behaviour from constituency MSPs, Westminster MPs and local authorities. Most did their best to obey the code of conduct, but there were a few serial offenders whose behaviour was referred to the Standards Committee. I could not understand at first why we had such problems, until it dawned on me that what some were determined to do was misuse their position to run a permanent four-year campaign as candidate for a particular constituency. In most Parliaments you do not have Members sitting in the same chamber or in committees who are going to be election opponents, and it does not make for a good working atmosphere.

My third objection to the system as operated is that it has led to a confusing and expensive proliferation of ‘parliamentary’ offices throughout the country. In at least one town there are four. This arose because of an agreement between the parties that regional list Members as well as constituency ones should have publicly funded offices.”

Of course, that operates in Wales as well. Lord Steel continued:

“I registered my objection at the time because they have become a thinly disguised subsidy from the taxpayer for the local party machines and added to the tendency I have just described. In my view they are a serious waste of public money, and I do not exclude my own former regional office from that stricture.”

That is an independent observation by a former Speaker of the Scottish Parliament.

[Mr Harper]

Will the right hon. Gentleman give way?

[Mr Hain]

I would like to make a bit more progress, because although the hon. Gentleman was generous in taking interventions, his contribution lasted 40 minutes. I would prefer to be a bit briefer, and I normally am very generous.

The fact that, nevertheless, Scotland has retained dual candidature, in defiance of Lord Steel’s advice, is no reason for Wales to do the same. The Government simply will not acknowledge the fundamental democratic abuse of dual candidacy, which is that losers become winners, and that voters are second-guessed and contradicted by the system, their choices denied. The second significant measure the Scottish Parliament adopted after Arbuthnott tried to increase the accountability of regional MSPs to the electorate by changing the voting system and introducing an open list for regional candidates—not something this Bill provides—to give some measure of control for Scottish voters. That was done because the Scottish social attitudes survey 2003 found a high degree of opposition to the party control inherent in the list system. Voters in Wales enjoy no such privilege and the Government are not proposing to give it to us.

On the issue of dual candidacy, two different paths were followed: in Scotland it was through greater clarification of the roles of Members and by turning to open lists; and in Wales we felt that the ban was the right solution to dual candidacy abuse. Nearly a decade on from the Government of Wales Act 2006 I feel that we made the right choice, but much more must be done to give regional Assembly Members more accountability to the electorate. On candidacy, this Bill does nothing to further the evolution of Welsh democracy—indeed it puts it into reverse.

Over the past 15 years, the Scottish Parliament and Welsh Assembly have both evolved in different ways to better suit the needs of their individual electorates. As the Government’s proposal stands, we will return to some of the absurd anomalies we saw in 1999 and 2003. As has been mentioned, in Clwyd West in 2003 every one of the three losing party candidates nevertheless won. Let us also consider the following cases from the 1999 elections, when 17 out of the 20 regional Assembly Members elected lost constituency elections. Thus, more than three quarters of the regional AMs did not have a democratic mandate to represent people—voters had not voted for them—and 15 of these 20 had offices in the constituencies they failed to be elected in.

In the Conwy constituency the Lib Dem AM Christine Humphreys came fourth in the popular vote—she had less than 10% of the vote in Conwy—yet still became an AM for the North Wales region. In Wrexham the Plaid Cymru AM Janet Ryder came last in the constituency, with 2,659 votes—the constituency AM had 9,239 votes—and yet still became an AM through the back door. In Ynys Môn the Tory AM Peter Rogers won 6,031 votes, which put him third on the constituency list—the Plaid Cymru AM who won a majority had more than 16,000 votes—yet he still became an AM for the North Wales region. It is not a partisan argument but simply a truth to state that those results are fundamentally undemocratic.

In the 1999 election more than 215,000 Welsh men and women voted in the North Wales region. Were we to look at every individual who ran as a constituency candidate in that election and collate their votes, we would find that Christine Humphreys, Janet Ryder and Peter Rogers polled less than 6% of the total regional vote and yet still became AMs for that very same region. After two Assembly elections where this was a regular occurrence, and with almost half the population saying in 2006 that they did not understand how their electoral system worked, we sought to remedy confusion over how AMs could still get in through the back door. The ban on dual candidature was the right choice then and remains so now. We introduced the ban in 2006 to stop these anomalies and the confusion they produced in voters’ minds, but now the Government are proposing to start this all over again.

In 2006, Victoria Winckler, director of the Bevan Foundation, conducted a survey, which found broad support for the ban on dual candidacy. Her report also highlighted the need for greater education and understanding among the general public. This report qualified the findings of previous research into dual candidacy. It said that none of it had been sufficient to make a substantial case on whether or not the public were for or against it in elections, but that it did discover considerable public disquiet on the issue with broad support in favour of the ban.

[Jonathan Edwards]

If dual candidacy is so objectionable to the right hon. Gentleman’s party, will he explain why, when it was in power in Westminster in 2010, it did not ban it in Scotland or for the Assembly in London?

[Mr Hain]

I have already dealt with that matter, but I will, if I may, correct the hon. Gentleman. It is not objectionable to my party; it is objectionable to voters. That is the point about this, and we are representing the voters’ will.

Perhaps the great irony of the Government’s proposals is that when they released their Green Paper in 2011, they found what was described as a

“small majority of people opposed to the Government’s proposal to lift the ban”,

and yet they still carried on. The Government, who themselves have a small majority, now seek to overturn a small majority. A former Liberal Democrat leader and a Conservative Secretary of State backed my 2006 ban, as did the chairman of the Richard commission. The commission reported in 2004, recommending extra powers for the Assembly, which my 2006 Act delivered. Lord Richard told the Welsh Affairs Committee:

“There is something wrong in a situation in which five people can stand in Clwyd, none of them can be elected, and then they all get into the Assembly. On the face of it that does not make sense. I think a lot of people in Wales find that it does not.”

The eminent Welsh academic, Dr Denis Balsom, said in his evidence to the Richard commission:

“Candidates use the list as an insurance against failing to win a constituency contest. This dual candidacy can also confuse the electorate, who may wish to consciously reject a particular candidate only to find them elected via the list. It should remain a basic democratic right not to elect a particular candidate or to be able to vote a Member out.”

[Ian Lucas (Wrexham) (Lab)]

Does my right hon. Friend agree that the real objection to dual candidacy is that those individuals who are rejected are then let in by the parties through the back door, and not by the electorate?

[Mr Hain]

My hon. Friend expresses my argument well—indeed better in some respects. One motivation for reversing the 2006 ban expressed by Plaid Cymru was the loss of its unquestionably talented Assembly Member, Helen Mary Jones. On 9 January 2006, when I was Secretary of State for Wales and dual candidature was still permitted, Helen Mary Jones put out a press release in which she described herself as the “Llanelli-based Assembly Member”. In it, she complained about money spent on a hospital in Carmarthen instead of one in Llanelli. However, she should really have been supporting both hospitals. As a list Assembly Member for Mid and West Wales, she represented both towns. If she had really been discharging her list Member duties properly, she would not have discriminated between those two towns or their hospitals. Yet of all the parts of the list area which she represented, she targeted the one place where she had been narrowly defeated in 2003, invariably describing herself as the “Llanelli-based Assembly Member”. The 2006 Act stopped her describing herself as that, although in the meantime she had campaigned hard as the list Member and had won the seat back in 2007, only to lose it again in 2011. As the ban had kicked in by then, she no longer remained the list Member. That has made it much harder for her to win the seat back for the next elections in 2016.

Now I come to the pièce de résistance. If this Bill gets enacted unamended, the Plaid Cymru party leader, Leanne Wood, will be able to implement—indeed quite possibly is already implementing—the comprehensive strategy she laid out in a remarkably candid memorandum in August 2003 when she was a list Assembly Member. My hon. Friend the Member for Pontypridd (Owen Smith) has quoted from that document, so I will not do so—[Interruption.] I can if Members are disappointed.

17:45

The memorandum was issued privately to key party colleagues but, even before the era of WikiLeaks, it was happily revealed to the rest of the nation in a generous act of democratic service. If the Bill becomes law, Leanne Wood can put into practice her own painstakingly frank advice to her colleagues. She is, and has been since 2003, one of the four list members for the South Wales Central National Assembly for Wales electoral region, but on 15 March 2013 she announced plans to stand for the Rhondda constituency in the Assembly elections in May 2016. In her press releases—I have one with me dated 13 November 2013—she modestly describes herself as the “Rhondda-based Assembly Member Leanne Wood”. To be fair, she does live in the Rhondda but her office is in the town of Pontypridd, which is located in the Pontypridd rather than the Rhondda constituency. So she is not actually the “Rhondda-based Assembly Member Leanne Wood” but the “Pontypridd-based Assembly Member Leanne Wood.” Never mind, however; we will move on fast from that trifling matter of accuracy.

Leanne Wood could also have chosen to describe herself as Aberdare-based, Cardiff-based or Cowbridge-based, as those are all places in her South Wales Central regional constituency, but no, she is apparently uninterested in the concerns of the other parts of her regional constituency. By some amazing coincidence, she is interested only in the Rhondda, because she always and only describes herself as Rhondda-based.

When the leader of Plaid Cymru said that she would stand for the Rhondda, it sounded like a brave—some might say foolhardy—move, but then, of course, the Conservatives proposed to bring back dual candidacy and she said that it was likely that she would also stand to retain her regional Assembly Member position on the list. Not so brave after all. When she loses in the Rhondda constituency in 2016—I am afraid that I have to break the news to her that she will lose heavily to the sitting Labour Member, the admirable Leighton Andrews—Leanne Wood will have the lifeline of dual candidacy to fall back on.

[Mr Harper]

On the subject of bravery, will the right hon. Gentleman give way?

[Mr Hain]

No wonder Plaid Cymru is such an enthusiastic little helper to the Government on this clause. We should rename the Bill “Leanne’s lifeline”. I will give way.

[Mr Harper]

I have been listening carefully to the right hon. Gentleman’s argument and I do not understand this concept of the “back door”. I might be wrong— I am sure that Opposition Members will tell me if I am—but surely if party candidates are listed on the ballot paper and electors cast a vote in a regional ballot, which is a separate vote, they know the consequences of that vote. If someone on that list is elected based on the second vote that somebody casts, the voter will have known that that could happen. I do not know how the right hon. Gentleman can describe that as someone being elected by the back door.

[Mr Hain]

I realise that the hon. Gentleman is not a member for a Welsh seat, but the truth is that people in Wales feel that people are being elected by the back door when they turn down a particular individual as their constituency Member only to find that they are elected anyway. This description of such an election as “by the back door” seems to me to be valid.

[Mr David Hanson (Delyn) (Lab)]

Will my right hon. Friend give way?

[Mr Hain]

I want to make a little progress, if my right hon. Friend does not mind. I have a series of points to make in conclusion.

A Mrs Jones or Mr Davies living in Porth or Treherbert in the Rhondda constituency should be forewarned by Leanne Wood’s memorandum, which amounted to a charter for abusing their money as taxpayers. I would advise them not to bother to approach for help and to check first whether they fit into her game plan. That plan is not about helping either of them, but about helping her and her political party. She is extremely—some might say recklessly—honest about her real intentions.

In the memorandum, Leanne Wood urged Plaid Cymru Assembly list Members such as herself only to do casework not where it is needed—not where it might help Mrs Jones or Mr Davies—but where it might benefit Plaid Cymru in its target seats, now including the Rhondda. She advised her colleagues to attend civic and other events in the constituency only if they thought there were votes in it. I would say, “Those are your votes, Mrs Jones and Mr Davies. I would check it out first if I were you.” She urged Plaid Cymru Assembly list Members to concentrate tens of thousands of pounds on their local Assembly office budgets in their party’s target seats, such as Rhondda. Leanne Wood’s memorandum of August 2003 was entitled, “What should be the role of a Regional AM?” It made a perfect case for the ban on dual candidature in Wales, as my hon. Friend the Member for Pontypridd made clear by quoting in detail from it.

The Government are shamelessly proceeding to enshrine again in statute, in clause 2, the very practice that this Parliament banned eight years ago to prevent such abuses, of which there had been very many over the years.

[Jessica Morden (Newport East) (Lab)]

My right hon. Friend is making a brilliant and convincing argument against dual candidacy, as always, but does he agree that, as the Electoral Reform Society has said, at the very least changing the system back and forth risks undermining the stability of the electoral system? Should we not just stick with the system that we have?

[Mr Hain]

I completely agree. The change was made after evidence had been assembled for Parliament, and Parliament was convinced by that evidence.

There is a simple question that both supporters of the Bill and critics of this Parliament’s 2006 ban cannot answer. It is this: if candidates cannot persuade voters to vote for them, why should they nevertheless be forced on voters through the back door? The people of Wales are entitled to an answer, even if this Government cannot give it to them by ramming through this highly contentious, undemocratic and thoroughly objectionable clause in a Bill that otherwise, in its broad features, enjoys a fair degree of cross-party consensus.

The fundamental point is that the Government of Wales Act 2006, by introducing the ban, put the voters back in charge. If voters did not want to elect somebody, they did not have to do so. If they reject a candidate, that candidate should not end up representing them. We should keep the voters in charge by rejecting clause 2.

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Chope. I will not go over many of the issues that my right hon. Friend the Member for Neath (Mr Hain) raised, but he is absolutely right and I shall vote against clause 2 stand part because I believe that the restriction is right. The hon. Member for Forest of Dean (Mr Harper) has been trying to intervene repeatedly to say that people have a choice—they could vote for an individual on the constituency basis but then have some other choice on the list. That is not quite the case. The names are listed in order and the voter might like candidate No. 3 on the list, but they do not have the choice to vote for that person—they vote for a political party, and it is the political party that selects the people at the top of the list. Usually that is either to boost its vote in an area or to get a person in by the back door who has already failed. That is the simple fact of the process before the current restriction came in; it is a back-door one.

[Chris Bryant (Rhondda) (Lab)]

May I suggest to my hon. Friend that it is not so much a back door as a cat flap? You can not only go in through the cat flap but you can withdraw without the need for a by-election if you are on the list rather than being a constituency MP.

[Jonathan Evans]

It is your system.

[Albert Owen]

I thank my hon. Friend the Member for Rhondda (Chris Bryant) for his intervention. The hon. Member for Cardiff North (Jonathan Evans) is shouting across the Floor that that is our system. We have changed the system. He was not here in that Parliament, but we changed it, and we changed it on the basis—this is important and has not been mentioned thus far—that in our 2005 manifesto we said we would bring in the restriction. We won the most seats in that election in Wales, and we had the biggest share of the vote in that election in Wales. I do not see many people knocking on the doors of constituency Members of Parliament saying they want to reverse that ban.

[David T. C. Davies]

Does the hon. Gentleman accept that if his amendment stands tonight, his party will benefit electorally from it? How does he ensure that that is not the reason that he is making these points today?

[Albert Owen]

I do not believe there is an amendment, but we shall oppose clause stand part. The hon. Gentleman made the same point in an earlier intervention. As things stand, there will be no electoral benefit for the Labour party. The results and the evidence, and the psephology that comes with them, show that there has been no benefit to Labour since we introduced the restriction.

The question that the hon. Gentleman should be asking is why are we having this debate now? The Silk commission itself—we are having government by commissions—did not make this proposal. I am ready to be corrected by Ministers, but I do not think it was in their manifesto to reverse the ban. If I am wrong, I will take an intervention, but I do not think I am. [Interruption.] Someone says it was, but I do not know. Does the Secretary of State want to intervene to clarify the position? Was it in his party manifesto in 2010 to reverse the ban: yes or no?

[David T. C. Davies]

I will intervene. First, I apologise: obviously it is not an amendment, but the hon. Gentleman will take the point.

Secondly, no, it probably was not in our manifesto, but the point is that no one would have noticed whether it was or was not. The hon. Gentleman’s party has won a few elections and lost a few over the past 15 years, but nobody voted for or against the Labour party or any other on the basis of what they were going to do about the voting system for the Welsh Assembly.

[Albert Owen]

There is a serious point to make about manifestos. In 1999, we introduced a scheme that has seen some abuse by candidates who, when they faced the electorate, were rejected—comprehensively in many cases, coming third or fourth for the seat—but got in on the list. That is why we put the measure in our 2005 manifesto and implemented it. It was this Parliament—the hon. Gentleman might mock manifestos, but I am sure he does he does not mock the will of this Parliament—that said we should bring in the restriction, and there is no mandate to reverse that. That is my point: none of the parties put it in its manifesto, and when the Government went out to consultation on the question, the majority of those who bothered to respond wanted the ban to remain. There is absolutely no mandate for the clause at this time. The Committee should consider that point.

[Hywel Williams]

I think we were talking about evidence to the Welsh Affairs Committee. Professor Roger Scully told the Committee:

“It is impossible to take seriously the idea, suggested…by some…that dual candidacy in Wales is in any sense”

unusual. He is one of the pre-eminent political analysts in Wales.

[Albert Owen]

I know the hon. Gentleman had to leave the Chamber and was not here when my right hon. Friend the Member for Neath listed a number of people who hold the opposing view. My point is that the only time that this proposal has been put to the electorate in Wales, the people in Wales, whom we are here to represent, voted in support of the ban; and in the consultation, they supported that measure as well. That is why we should be voting against the clause.

There is no mandate for the clause, other than to support the smaller parties. If those who will vote for the clause tonight were really serious about helping smaller parties, why not change the system altogether to help independents, who do not have the party machinery?

[Mr Llwyd]

Will the hon. Gentleman give way?

[Albert Owen]

That would be a serious clause to have in the Bill—one designed to help the independents—but no: because the Government feel that they have somehow been done a disservice, they are helping themselves by creating the opportunity to put people in the lifeboat that is the list system.

I will give way one final time to the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd).

[Mr Llwyd]

No, it is okay. Carry on.

[Albert Owen]

I thought the right hon. Gentleman wanted to defend the leader of Plaid Cymru, so I would have been happy to let him intervene. The Plaid Cymru leader sent the letter we have heard about and also made a very bold statement that she intended to stand for a constituency seat. Now, however, she is changing her mind—she thinks she may lose. She provides great evidence that what the Government want to introduce is a lifeboat system.

[Mr Hanson]

Can my hon. Friend confirm that, if my constituents chose not to elect somebody for the constituency seat who happened to be No. 1 on the list and was therefore elected, the only way they could remove that person from the No. 1 position on the list would be by electing that person for the constituency in the first place, because of the way the electoral system works? Is not that the craziness of the situation?

[Albert Owen]

It is absolutely crazy.

I shall not detain the Committee on these arguments, which have already been set out extensively, but I have not heard one argument from the Government that there is a mandate for the clause and that the people of Wales think the ban, the restriction, is unfair. It is not. It is fair. It is fair that people should stand for a constituency seat and put their position before the electorate; if they are rejected, they should accept that they have been rejected by those people and not seek to represent them through some higher list system in the future.

I shall vote against clause stand part. I hope that hon. Members will realise that the people of Wales do not want the ban to be reversed and that they will vote in accordance with what the people of Wales want us to do, which is maintain the ban so that we have constituency Members people recognise and a more open system. I regret not tabling an amendment to create a more open list system, so that the people could choose whom they want to represent them, not just the political classes of the four—perhaps five—main parties in Wales.

18:00

[Paul Murphy (Torfaen) (Lab)]

I am delighted to follow my hon. Friend the Member for Ynys Môn (Albert Owen) not least because he put his finger on the point about the only recent mandate being the change that my right hon. Friend the Member for Neath (Mr Hain), who made an outstanding speech, made when he was Secretary of State in 2006, which was to do away with dual candidacy. I do not know whether the people of Wales looked in detail at the manifesto, but it was in front of them. There was no other way apart from a referendum to discover whether the people of Wales wanted it. Following their voting, in the majority, for the Labour Members of the Welsh Assembly, the mandate was put into operation by the Labour Government here some time later.

One of my biggest regrets from my time as a junior Minister in the early days of the previous Labour Government when I served on the Committee chaired by my right hon. and noble Friend Lord Irvine of Lairg to look at the devolution proposals for Scotland and Wales is that I did not object either to this particular part of the legislation or to the daft system of top-ups. We were persuaded—we were duped—by the then Secretary of State for Wales into believing that anybody wanted it. The argument put forward by the hon. Member for Cardiff North (Jonathan Evans) was that the system would prevent any one particular party from having an overall majority all the time. That was also the view put forward by Donald Dewar, the then Secretary of State for Scotland, but events have now overtaken that view. Scotland ended up with a Government with a substantial majority, based on the first-past-the-post seats, so the argument no longer stands.

I am not saying that there should not be some form of proportionality, but I do not like it myself and I do not think that the people of Britain like it either. The proposal was resolutely defeated in the recent referendum on the alternative vote. My view is that the system is bad because people do not understand it. First, people do not understand why their Assembly Member, who is elected by first past the post, is supposed to be the same as their regional Assembly Member, who is elected by a top-up system. Secondly, and more appropriately, they do not understand the bizarre results that occurred in regions such as mine in south-east Wales where there were overwhelming votes in favour of the Labour party, but people were elected to the Assembly on tiny votes. Thirdly, as described with great eloquence by my hon. Friend the Member for Pontypridd (Owen Smith) and my right hon. Friend the Member for Neath, people neither understand nor like how top-up AMs pretend to be constituency Assembly Members and use their base to try to get the constituency seat.

[Jonathan Evans]

The right hon. Gentleman knows the high regard that I have for him, but he seems to be presenting an argument that is against proportionality in this electoral system. Does he recognise that, irrespective of whether the same candidate is on both lists, the public do understand the system of top-up seats that comes through proportionality? Opinion polls in Wales regularly reveal that people intend to vote differently in relation to constituencies than in relation to regional Members, which indicates that they understand that their choices are different.

[Paul Murphy]

It can be argued that people vote differentially, as they do for the Assembly, and indeed for the House of Commons, but I see no evidence in my constituency that they vote differentially for the top-up Members and the constituency Members of the Assembly; they vote Labour—end of story. The same is true in seats that are not held by Labour, for example next door in Monmouthshire. I think that people do not understand the system. I am not arguing against the notion of proportionality, although I do not like it; I am arguing against this particular system.

Equally, with regard to clause stand part, people neither like nor understand the idea that candidates can stand and be defeated but then get in. It is a simple system that they just do not like. We used it when we were in power, of course, but that does not make it right. Ultimately, that is why people understand that the system is flawed and needs to be put right. I think that candidates should have to make up their minds and decide either to stand for the constituency and work hard at it, as everybody in the House of Commons does, or to stand for some other type of proportional system.

In my view there is a case for increasing the number of Assembly Members. The fact that there are new legislative powers in Cardiff means that the Assembly cannot go on with just 60 Members. It simply is not big enough. It is not a popular argument, but the place needs more Members if it is to work. However, I do not think that they should be elected using this system. My view, inevitably, as someone who believes in the first-past-the-post system, is that there should be two Assembly Members for each of the 40 constituencies in Wales. That could be modified with some sort of proportionality, of course, whether the alternative vote or some other system.

Ultimately, what matters is that people relate to their elected representatives, whether Members of Parliament, councillors or Members of the European Parliament. The hon. Member for Cardiff North is right about the daft system for electing MEPs—we brought it in, by the way, and ought to be ashamed of it—which means that no one knows who their local MEP is, but that is another issue. I am trying to emphasise the link between an elected Member and his or her constituency, whether two Members for the constituency or one, because people understand that. As soon as people fail to understand how their representatives are elected, the system is most certainly flawed.

[Susan Elan Jones]

It is a pleasure to serve under your chairmanship, Mr Chope, and to follow my right hon. Friend the Member for Torfaen (Paul Murphy) and other Members in this important debate. My mind is going back to the early hours of 2 May 1997, when a new day had dawned. There were not too many of us who had noticed that new day, because I am not talking about Labour gaining Monmouth, or Enfield, Southgate or Hove; I am talking about Surrey Heath, where the local party wanted a keen and—as was then the case—relatively young Labour candidate to fly the flag. It found one—me.

A new day really had dawned, because we had gained 11,511 votes, which was 21% of the vote. Never had that been achieved before, I thought. I felt an immense sense of victory. The campaign had had a few strange moments. There was the time I told people how important it was to have a new and reforming Labour Government who would bring in devolution. People looked at me and said, “Your campaign doesn’t belong in Surrey.” There was the time I told people that a new Labour Government would ban handguns, and they showed me their membership cards for Bisley gun club. Then there was the time I said that the Labour Government would introduce a national minimum wage. They used a few expletives and explained that they certainly did not intend to pay it to their employees.

It was not the greatest of campaigns. More to the point, after I had realised that I had won 21% of the vote, I realised that I had lost 79%. Let us, though, imagine the scenario if things had been different. Let us imagine that there had been a regional list on which I could have stood, and lo and behold, on that great heyday of the Labour party, much to the annoyance of the 79% of people who had not voted for me, suddenly, miraculously, I reappeared as No. 1 on the list in Surrey. I could have been the Member for Bisley or the Member for Chobham. The right hon. Member for Surrey Heath (Michael Gove) would no doubt have been quaking in his boots at the concept of this Welsh misfit down in the suburbs. That shows how ridiculous dual candidacy is.

[David T. C. Davies]

The hon. Lady is making a good point, which is basically that PR is not a good electoral system, and I agree. However, it was her and her colleagues who agreed to a PR system for the Welsh Assembly so that they could get the thing through with the support of the Liberal Democrats and Plaid Cymru, who would not have supported it if it was first past the post. They created this system and they are going to have to live with it. They cannot start wanting changes just because it does not suit them 10 or 15 years later.

[Susan Elan Jones]

If the hon. Gentleman looked back at the history, he would find that many people in the Labour party, including me, my hon. Friend the Member for Newport West (Paul Flynn) and many others, supported that pluralistic system, and I still do. People talk about this in terms of partisan analysis, but we have to remember that we too, as a party, have list Members in Mid Wales and West Wales.

I am pleased that people in constituencies who feel that every time they go out to vote in a Westminster election or a constituency election for the Assembly, their candidate is not going to get in, can now feel that, yes, their vote is going to matter. I appreciate that there has to be a balance in terms of constituency representation in a region, but this remains important. We could have put, say, the candidates who stood and lost in the Pembrokeshire seats on a list. There is no partisan advantage for us, but there is a basic issue of fairness. This cannot be a two-way bet.

[Paul Flynn (Newport West) (Lab)]

My hon. Friend may recall that the decision that many agreed to was taken on the grounds not of getting wider support but of its being good democracy. We have a system, as we still do, that cheats all but the two main parties. That is extraordinary. We had two elections where the Conservative party in Wales received 20% of the vote but had not a single MP in this House—a democratic outrage. The idea was that the Assembly was going to be set up not to have permanent one-party rule but to give all the other parties a fair chance of being represented.

[Susan Elan Jones]

That is right. It is important that on such constitutional issues we have this sort of open debate and are open to ideas, as my party certainly has been. It is possible to be progressive and pluralistic but to recognise that it would be nonsense to go back to the whole issue of dual candidacy in the Assembly. I am firmly of the view that someone should either stand for a constituency seat or be on the Assembly list. There is a very strong case—my hon. Friend the Member for Ynys Môn (Albert Owen) made it—for open lists. These are the sorts of things we should be looking at.

Yesterday evening, I came across a leaflet. It was nothing to do with politics; it was to do with recycling. I spotted on it a comment that I thought was so good that I wrote it down. It is not exactly clause 2 of this Bill, but it could be. It said:

“Within as little as 6 weeks, the empty can you put into your recycling bin could be back on the shelf as a new can of cola or a new tin of beans.”

That is why we think that the Government have got it wrong on this one.

[Huw Irranca-Davies]

It is very good to serve under your stewardship, Mr Chope.

This has been an interesting debate. After listening intently to lots of good argument by Members on both sides of the Committee, I have still failed to hear a convincing argument for once again reversing a fundamental part of the current devolution settlement, but there have been many convincing and compelling arguments for why we should stay exactly as we are. That is why, having heard the debate, I intend to support my Front-Bench colleagues.

There has not been a convincing argument to reverse the ban. As has been pointed out by my hon. Friend the Member for Ynys Môn (Albert Owen) and others, there was only one manifesto commitment in the last set of manifestos, and that was the Labour party’s. It was based on the experience we had of the first outcomes of Assembly elections, where 17 out of those 20 candidates were defeated and then popped up again. Lord Richards, the Richards commission and others reported that among the electorate, not among politicians, there was a gut feeling that that was not right.

18:15

I agree with the points just made. I support an element of proportionality. I apologise to my right hon. Friend the Member for Torfaen (Paul Murphy). Although there is no ideal version, I like the idea of an element of proportionality because it gives something of a fair crack of the whip to those who otherwise would not be represented. But the public are wise to that, and they feel it is unfair that people who have been openly defeated in a straight contest to be elected on their name as well as on their party then reappear—17 out of 20 in that first election. We have heard about the Clwyd West situation. It does not matter which party the candidates came from. It would not matter if all three of them were Labour. The three candidates who were defeated re-emerged.

We can have the arguments, although it is not in any of the amendments today, about open and closed lists. We could have the argument about a different system. There may in future be an increase in the numbers and a return to two candidates for each seat, but that is not what is in front of us. What is before us is a proposal that was not in the Silk commission proposals to revert to the situation where this anomaly, as we see it, which was flagged up in the first set of Assembly elections and was the reason we changed the procedure, is put back again, against the advice of the Electoral Commission, which says, as my hon. Friend the Member for Newport East (Jessica Morden) pointed out earlier, that we should not go chopping and changing as that adds to confusion and a feeling among the electorate that gamesmanship is involved.

[Jonathan Edwards]

As one of the more reasonable Members on the Labour Benches—

[Huw Irranca-Davies]

Stop!

[Jonathan Edwards]

—is it the hon. Gentleman’s view that if there were a decision in future to change the electoral system in its entirety rather than the minor change proposed in the Bill, it should be for the Assembly to make that decision, rather than the House of Commons?

[Huw Irranca-Davies]

That is a good discussion to have and it will flow from part II of the Silk commission, which we will debate in the Chamber. It is a worthwhile debate to have in the present situation, where Parliament still has sovereign powers and still in essence passes to the Assembly the ability to do certain things, bearing in mind the commitment from our Front Bench in principle that we look favourably upon the idea of reversing the current position, where it is only the delegated powers that the Assembly can legislate on. That debate is not for today, but the time will come.

The explanatory notes, which Ministers seek to use to justify the reversal, say in paragraph 12 that the concern expressed by many people

“has been refuted in studies by the Electoral Commission and others which have demonstrated that the prohibition”

that is currently in place—the ban—

“has a disproportionate impact on smaller parties who have a smaller pool of potential candidates to draw upon.”

I am genuinely bemused by that. In my own constituency, which is a strong Labour constituency, not only are there Tory voters, but there are Tory elected representatives, a Plaid Cymru representative, and others. I cannot believe that they do not have a sufficient number of alternative candidates to put on a regional list.

All we are talking about is a handful—four candidates—appearing on a regional rather than first-past-the-post list. If they do not have the numbers, that is a real signal of a lack of confidence in the capacity of what have today been termed “minority parties” in the regions. I simply do not believe it—there are people who will and should come forward. Equally, we would have to do the same in the regions. There is an onus on the party to bring people forward in the valleys, the vale, west Wales and elsewhere. The argument that each region would not have four candidates who can be put on the list just does not hold water.

[Chris Bryant]

Does not this give the lie to the accusation that the Labour party gains a partisan advantage from the present law? Given that everybody else has mentioned the Rhondda, I will too. Leanne Wood originally said that she would stand for the constituency seat, but if the law is changed she will probably stand on both lists, and I think that undermines Plaid Cymru. If the law is changed, it will hurt Plaid Cymru in the end. It will mean that she will get fewer votes in the Rhondda than she would have got in the first place. More importantly, it undermines, and makes people more cynical about, the whole concept of the Assembly itself.

[Huw Irranca-Davies]

I entirely agree. We all make personal calculations in our political lives: we decide where we should stand, where we have connections and where we should cast our lot and go for it. However, the proposed system—this is the exact situation in the Rhondda—amounts to, “Well, I’m really going to go for this, but if all else fails there’s something I can fall back on.” My gut instinct is that that is not right and it does not feel right to many voters either.

The Bevan Foundation has been criticised, but it is a left-of-centre think tank—that is what it does. It is scandalous to say that it is simply an arm of the Labour party. If Members look at the work it has done on welfare issues, unemployment and economic incapacity in the valleys, they will see that some of it has been critical of the Labour party as well. When my hon. Friend the Member for Caerphilly (Wayne David) was looking for someone to do a report, my guess is that the Institute of Economic Affairs and others were not available or did not have the knowledge of Wales to do it.

The majority of people canvassed were very concerned. I will not repeat the quotes, but people from across all parts of south and west Wales said that they could not understand how people who had clearly been defeated could then pop up. Of course, that was reiterated by the Government’s own impact assessment, to which I am sure the Secretary of Sate will refer when he explains why he is jettisoning its findings.

After the first set of Assembly elections, it is not just the Labour party that underwent a damascene conversion, as it has been called, but the Tories and Lib Dems. Lord Crickhowell, who has already been mentioned, is categorically opposed to dual candidacy and said back in 2005:

“The present arrangements are really pretty indefensible”.—[Official Report, House of Lords, 15 June 2005; Vol. 672, c. 1216.]

The current Chief Secretary to the Treasury made exactly the same point. It was not just us or members of the public who were saying it at the time; other politicians also said, “We made a genuine mistake.”

As I said at the beginning, we can have discussions about closed and open lists in terms of proportionality and whether there is a different way of doing it, but I say adamantly to the Secretary of State that to reverse the system again, for whatever reason, is not the way to go. It does not work and it has been proven that it does not hold the confidence of people on the ground in Wales. Let us have the wider debate on the way forward, but simply to chop and change, particularly against the recommendations of the Electoral Commission, is no way to make Acts of Parliament.

[Mr David Jones]

I, of course, share the general delight at serving under your chairmanship, Mr Chope.

This has been an interesting and very forthright debate. Clause 2—it seems unnecessary to say—will overturn the ban on dual candidacy introduced by the Government of Wales Act 2006. Under its provisions, candidates at an Assembly election cannot stand both in a constituency and on a regional list. Before 2006, candidates could of course stand in both.

Amendment 15, which was moved by my hon. Friend the Member for Forest of Dean (Mr Harper), would require the Secretary of State to commission an independent review of the possible effects of dual candidacy on the effectiveness of the National Assembly for Wales and to lay the findings before both Houses within nine months of Royal Assent. I fully understand his intention in tabling the amendment and to a certain extent I empathise with him. I welcome the opportunity to debate further the merits of removing the current unfair ban. My hon. Friend has highlighted the need for independent evidence on the effects of dual candidacy, which is of course important, but the fact is that ample evidence from independent bodies shows that dual candidacy is part and parcel of similar systems across the world.

The previous Labour Government justified imposing the ban on dual candidacy on the grounds that they said there was “considerable dissatisfaction” with the system, although they provided little evidence to support that position. Frankly, having listened to the debate, I have to say that I have heard little more evidence this afternoon. We have of course had the Bevan Foundation—

[Owen Smith]

Will the Secretary of State not confirm to the House that his own consultation for the Bill showed that the majority of respondents were in favour of retaining the current system?

[Mr Jones]

It is fair to say that there was a majority of one, but frankly most of the respondents were Labour Assembly Members. As I will mention later, the letters written by those Assembly Members bore a suspicious similarity to one another. It might almost have been that a template was provided for them.

The ban was introduced despite opposition from other parties in the House, academics and even the Electoral Commission. I know that several Labour Members served on the Welsh Affairs Committee before the passage of the 2006 Act, and I am sure that they recall the evidence of Dr Richard Wyn Jones, Dr Roger Scully and Glyn Mathias, the Electoral Commissioner for Wales, who all highlighted the potentially partisan nature of the changes. Professor Alan Trench of the constitution unit at University college London, who is currently a special adviser to the Select Committee, said in November 2011 that it was

“a pretty blatantly partisan manipulation of the electoral system”.

[Mr Hanson]

In 2005, 29 Labour MPs out of the 40 MPs in Wales were elected on a manifesto commitment to discard dual candidacy. In 2010, eight Conservative MPs out of the 40 MPs were elected with no mandate to introduce dual candidacy, but the Secretary of State is now introducing it. Will he help me with that contradiction?

[Mr Jones]

It is perfectly clear that the Conservative party’s position was amply stated in the debate in 2006. That position was supported by parties other than the Labour party. It is absolutely clear that we have justice on our side in overturning a fairly straightforward partisan measure introduced by the Labour party.

[Ian Lucas]

The Secretary of State is being generous in giving way. He keeps saying that it is a partisan measure, but will he explain how it applies to the Labour party differently from how it applies to any other party in Wales?

[Mr Jones]

The position is absolutely clear: smaller parties in Wales, as we have said, have a smaller pool of first-class candidates.

[Ian Lucas]

That is nonsense.

[Mr Jones]

It is not nonsense—absolutely not. The measure was put in place to favour the Labour party.

[Owen Smith]

Will the Secretary of State give way?

[Mr Jones]

No, I will make some progress. [Interruption.] I will give way in a moment.

In its evidence to the Welsh Affairs Committee in 2005—I do not think the hon. Member for Wrexham (Ian Lucas) was a member of that Committee—the Electoral Commission stated that it did not believe that the case had been made and that it would

“caution against any change that is perceived to be partisan and could add to a prevailing distrust of politicians”.

The Electoral Commission saw no evidence in favour of the ban during the passage of the Government of Wales Act 2006. During the pre-legislative scrutiny of the draft Bill, it reaffirmed that position. Even the Arbuthnott commission, which the last Labour Government set up to consider the electoral arrangements in Scotland, made it clear that

“dual candidacy is a common feature of mixed member proportional systems across the world”.

18:30

In ignoring those concerns and introducing the ban, the last Labour Government made the electoral system in Wales anomalous. Nowhere else in the world is dual candidacy banned under this type of electoral system. As we have heard, the last Labour Government chose not to impose a similar ban for elections to the Scottish Parliament or the London assembly, both of which use the same system. Dual candidacy is not banned in countries with similar electoral systems, such as New Zealand. This was touched on by the shadow Secretary of State, but the 2012 review by the Electoral Commission of New Zealand came to the conclusion that dual candidacy should continue to be a feature of its electoral system.

[Owen Smith]

I will take the Secretary of State back to the remarks that he made a few moments ago. Will he confirm that when he referred to the smaller parties that would benefit from the change, he was talking about the Conservative party in Wales?

[Mr Jones]

It is quite clear that the Conservative party is smaller electorally than the Labour party. That is fairly straightforward. However, I was referring not just to the Conservative party, but to the Liberal Democrats and Plaid Cymru.

[Owen Smith]

I am grateful for that clarification. Is he therefore saying that the Conservative party in Wales struggles to field high quality candidates?

[Mr Jones]

I do not think that we have had that difficulty in the past.

The Opposition have pointed to the fact that a majority of respondents to the Government’s Green Paper consultation were in favour of retaining the ban as further evidence in support of it. However, if one takes away the many Labour Assembly Members, who responded in a strikingly similar way, that would no longer be the case. The simple fact is that the ban was introduced to benefit one party, the Labour party, in one part of the United Kingdom, Wales, and in not Scotland or London.

In his evidence to the Welsh Affairs Committee during its pre-legislative scrutiny of the draft Bill, Professor Scully said that the claims that are made about dual candidacy, which have been repeated again and again by Labour Members,

“remain wholly unsupported by solid evidence”.

I repeat that the simple fact is that the ban was introduced as a partisan act that affects smaller parties disproportionately and ensures that good quality candidates are lost to the Assembly.

[Huw Irranca-Davies]

Lord Bourne, who was my friend and fellow academic at Swansea Institute of Higher Education—that great factory of political candidates—is often cited as someone who lost out, did not have the list to fall back on and hence went into other occupations. However, does the Secretary of State accept that if a candidate who, for very good reasons, was wholly objectionable to the electorate—not a Lord Bourne, but somebody wholly objectionable—was No. 1 on a closed list because of the party selection, Conservative, Liberal or Plaid Cymru voters would have no choice but to vote for them? That is one of the big problems with the reversal that he is proposing.

[Mr Jones]

Absolutely not. Electors may cast their votes in any way they wish for whichever candidates they wish. That argument is wholly facile.

The right hon. Member for Torfaen (Paul Murphy) seemed to criticise the whole concept of a top-up list. As somebody who is far more supportive of the first-past-the-post system, I have considerable sympathy for that point of view on the basis that one lives by the sword or dies by the sword. However, every party in this House supports some form of proportional election to the Assembly, as he accepted. It seemed to me that his criticisms, and those of the right hon. Member for Neath (Mr Hain), were aimed more at the consequences of the proportional representation system than at dual candidacy. Therefore, we are now legislating to remove that unfair prohibition and to reintroduce the system that was in place and worked well between 1998 and 2006.

The amendment tabled by my hon. Friend the Member for Forest of Dean also proposes that his review would consider the implications of removing the prohibition on dual candidacy for the desirable total number of Assembly Members; the ratio of Assembly Members elected by constituency and from the regional list; and the merits of an all-Wales list, rather than lists in five separate regions.

On the implications for the desirable number of Assembly Members, we set out in the Green Paper on future electoral arrangements that we believe 60 Assembly Members is the right number, and we continue to hold that view. I note that the First Minister said in his oral evidence to the Welsh Affairs Committee during pre-legislative scrutiny of the Bill that the Assembly could “undoubtedly” cope with its new powers without changing the number of Assembly Members.

The Government also believe that under existing arrangements, the current ratio of constituency and regional Assembly Members is right. The Green Paper set out our belief that an all-Wales national list was not desirable as it would place more distance between regional Members and their constituents than the existing five regions—a view that I think is shared across the Committee —and again, our view has not changed.

New clause 4, tabled by right hon. and hon. Members from Plaid Cymru, seeks to establish a mechanism through an Order in Council by which competence could be devolved to the Assembly to determine its size. In a similar vein, new clause 6 would enable devolution to the Welsh Government—I think it actually means the Welsh Assembly—of the power to determine the system by which Members are elected.

Although the Silk commission made no recommendations about the electoral system, it did recommend that the size of the Assembly should be increased so that it might better fulfil its scrutiny role, and new clause 4 would pre-empt that. The commission also acknowledged the practical implications of its recommendation on the electoral system and the need for further consideration. The Government have made it clear in responding to publication of the commission’s report that any recommendation such as that requiring primary legislation should be for the next Parliament, and therefore for political parties to consider when preparing their manifestos for the 2015 general election. Of course, the commission also recommended that consideration be given to increasing capacity in the Assembly in the short term.

Earlier this year an Electoral Reform Society report found that 79% of Assembly Members surveyed believed that plenary time could be used more efficiently and effectively, and in the same survey, 90% of Assembly Members supported a comprehensive review of Assembly procedures. The Assembly and the Welsh Government have the power to change those things through Standing Orders, and I call on them to consider carefully how the Assembly could make better use of its time and the resources already available to it.

I thank my hon. Friend the Member for Forest of Dean for his amendment, which has enabled a full and extensive debate this afternoon on the merits of removing the ban on dual candidacy. I hope I have been able to reassure him, at least, and I ask him to withdraw his amendment accordingly. I also urge right hon. and hon. Members from Plaid Cymru not to press new clauses 4 and 6 to a vote.

[Mr Harper]

I am always glad to have facilitated a wide-ranging debate in Committee, as is proper, and to fully air these issues. My right hon. Friend’s explanation has been sufficient, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question put, That the clause stand part of the Bill.

18:39

Division 258

Ayes: 265

---

Conservative: 227
Liberal Democrat: 34
Plaid Cymru: 3

Noes: 191

---

Labour: 190
Green Party: 1

Clause 2 ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Clause 4

The Welsh Government

[Stephen Crabb]

I beg to move, That the clause stand part of the Bill.

[The Temporary Chairman (Mr Christopher Chope)]

With this we may take new clause 5—The National Assembly for Wales—

‘The Government of Wales Act 2006 is amended by adding at the end of section 1 (The Assembly)—

(a) The Assembly may change its name by means of a resolution agreed to by a simple majority;

(b) on the first occasion a resolution under subsection (6)(a) is passed, the expression “National Assembly for Wales” shall be replaced wherever it occurs in the GOWA 2006 by the name contained in that resolution;

(c) on any subsequent occasion, the name contained in a resolution under the terms of subsection (6)(a) shall replace the previous name in the same manner;

(d) unless the context requires otherwise, in any enactment, instrument of other document passed or made before this subsection comes into force any reference to the National Assembly for Wales is to be read as, or as including, a reference to the Assembly as renamed.”.’.

[Stephen Crabb]

Let me begin, Mr Chope, by welcoming you to the Chair. It is a pleasure to serve under your chairmanship.

Following the 2011 Assembly election, the First Minister of Wales announced that the Welsh Assembly Government wished to be known instead as the Welsh Government. That change was made in order to make clearer the respective roles of the Welsh Government and the National Assembly for Wales following the devolution of full law-making powers. Since then, the term “Welsh Government” has increasingly been used by people throughout Wales, and it is now the commonly used term for the Executive. However, “Welsh Government” remains an informal moniker, and “Welsh Assembly Government” is still the formal legal name in statute.

In recognition of the widespread use of “Welsh Government” as the generally accepted term, and following the request from the First Minister, clause 4 provides for the name of the Executive to be changed formally. That will mean that, for the first time, the new title can be used in formal legal documents, in keeping with common parlance. The clause provides that any reference to “Welsh Assembly Government” in existing legislation should be read as a reference to the “Welsh Government”, unless the specific context requires the former name to be used.

As usual, Plaid Cymru Members wish to go even further and have tabled new clause 5, which seeks to devolve to the National Assembly for Wales the power to change its name through a resolution passed by a simple majority. In renaming the Welsh Assembly Government we are simply reflecting what the Executive are now commonly known as. The same is not the case in respect of the National Assembly; people within and outside Wales know the legislature as the “National Assembly” or the “Welsh Assembly”, and I detect no popular clamour in my constituency or any other part of Wales I visit for a change in the name of Wales’s legislature.

[Jonathan Edwards]

Is the Minister aware that the leader of the Conservative party in the National Assembly has made a manifesto pledge to change the name of the Assembly and make it a Parliament?

[Stephen Crabb]

I am aware of all kinds of views from individuals across Wales on what the name of the legislature should or could be. I also recognise that the Silk commission recommended that if the Assembly wishes to change its name to the Welsh Parliament, that should be respected. However in tabling new clause 5 and other amendments Plaid Cymru seems to be doing exactly what it has wrongly accused this Government of doing: cherry-picking the Silk recommendations for implementation through this Bill.

The Secretary of State’s written statement on 3 March made the Government’s view clear: we do not regard this Bill as an appropriate vehicle for implementing Silk II recommendations, that those recommendations requiring primary legislation should be matters for the “next Government and Parliament” and, as such, they are for political parties to consider in preparing their election manifestos. That remains this Government’s approach, so I urge Plaid Cymru Members not to press their new clause to a vote.

[Jonathan Edwards]

It is a pleasure to serve under your chairmanship, Mr Chope.

I rise to speak in favour of new clause 5, which stands in my name and those of my right hon. and hon. Friends. We will not be pushing it to a vote, because we want to save time and to have a discussion on income tax powers, which is what we really want to discuss in detail. However, I say to the Minister that, regardless of his opening remarks, our new clause is in the spirit of clause 4, which he has just presented. I hope the Government will see sense in due course, either in the later stages of the Bill’s progress in this House or in the other place.

New clause 5 would give powers to the National Assembly to change its name to the “National Parliament” or to any other name should it so decide. I stress that the new clause does not call for the institution’s name to be changed in this Bill, but rather that the power to take this decision should be granted to the National Assembly, as proposed in the Silk II recommendations. The Minister was being somewhat mischievous in saying that we were cherry-picking from the Silk recommendations, because our new clause is in line with the Silk II recommendations, in that it is a matter for the National Assembly if it wishes to change the name of the legislature. The new clause would empower it to make that decision rather than having to make a request to the UK Government of the day, as it has done for the name of the Executive.

The new clause would mean that the National Assembly would be able to change its name by means of a resolution agreed by a simple majority. It is gratifying that clause 4 officially changes the name of the Executive to the “Welsh Government”, a title that has been used widely for practical purposes since the 2011 election. There was a Scottish precedent for this change of title in 2007, when the “Scottish Executive” were renamed the “Scottish Government”. There has been broad agreement that the term “Welsh Assembly Government”, which had been in use since 2002, had been confusing and anachronistic after the separation of the Executive and legislative functions of the Assembly in 2007. It also gave rise to the unfortunate acronym WAG—being given the same label as a premiership footballer’s better half has done little for the democracy of our country. I have never used the term since I was elected, instead always using “Welsh Government”, so I was delighted that following the 2011 election the First Minister made the case that the Executive would be known as the “Welsh Government” thereafter. So I fully support clause 4, which makes that name official in legislation.

Now that the National Assembly is able to pass its own laws, it should be called a Parliament. However, I appreciate that others hold a different view, and that in the European tradition, the meeting place of a legislature is generally termed an Assembly. In France, for instance, the national legislature is called the Assemblée Nationale—if my memory of international rugby trips to Paris serves me correctly. Surely it should be a matter for the democratically elected Members of the national legislature of Wales to determine the name of the legislature in which they serve. That is what we are trying to achieve in new clause 5, but I will not press the matter to a vote. I expect there to be greater deliberations on this topic when the Bill reaches the other place.

19:00

[Mr Harper]

I fully support clause 4, but I want to touch briefly on new clause 5, about which the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) has just been talking. I do not support new clause 5, and I am glad that he is not going to press it to a vote. Although he makes the point that the text of the new clause does not pick a particular name, there is a bit of a hint in the title about where he is going. It is, I think, a qualitative difference. The Minister, in setting out the Government’s position, made it clear that the renaming of the Welsh Assembly Government to the Welsh Government is following public opinion and public usage, and simply therefore reflecting the reality of the situation. What the hon. Gentleman and his party are trying to do is the opposite. They are trying to push for changing the name of the Assembly in order to change the nature of the Assembly. Calling it the National Parliament for Wales, which implies a single institution, is clearly part of their campaign to move to a position where Wales ceases to be part of the United Kingdom and becomes an independent country. That is not something I support, which is why I do not support the new clause and why I think it is qualitatively different from clause 4.

[Jonathan Edwards]

I was anxious not to get involved in a debate about the actual name, but the hon. Gentleman will be aware that, in the UK’s tradition, Scotland became a law-making Parliament and was named as such. That is why I make the case for using the term “Parliament”. However, there are individuals, including those in my own party, who would prefer to keep the term the National Assembly. We want to empower the National Assembly to make that decision rather than the House of Commons.

[Mr Harper]

I see that point, but the danger is that the name change becomes part of the campaign to change the nature not just of the institution but of the relationship between Wales and the United Kingdom. That is why I think that the approach the Government are taking in clause 4, which is effectively to reflect popular usage of the term Welsh Government for the Welsh Assembly Government, is perfectly straightforward and sensible. Moreover, that is done through primary legislation and therefore keeps that decision for this House. I do not support new clause 5, which would give that power to the National Assembly.

[Jonathan Edwards]

It would be wrong to describe this as some sort of partisan nationalist plot to change the name of the National Assembly. As I have already said to the Under-Secretary of State, the position of the Tory leader in the Assembly group is to change the name to a National Parliament. Indeed it is even the position of the Presiding Officer of the National Assembly who is, of course, a Labour party Member.

[Mr Harper]

I take that point. I would oppose new clause 5 whoever drafted it, because the whole concept of changing the name to achieve a political outcome is not something that I support. We can have a debate about independence and whether the Welsh Assembly should turn into a Parliament of an independent Wales, but we should have it openly. We should not use changing the name as a surreptitious way of moving along the debate and hope that nobody notices. The hon. Gentleman has cunningly designed the new clause so that it does not say anywhere what the National Assembly should be called, but, as I have said, it is given away in the title as a little hint about where he wants to go. It is whatever the parliamentary equivalent of a Freudian slip is, which gives it away.

[Geraint Davies (Swansea West) (Lab/Co-op)]

I think there may be some confusion here, because of course this Parliament enabled the Scottish Parliament to be so called, and there is no appetite for us to say to the Scottish Parliament that it can call itself what it likes—even the Scottish kingdom. Plaid Cymru is saying that the Welsh Assembly should be able to call itself what it likes, and there is, I understand, a strong case to call the National Assembly the National Parliament of Wales, but there is confusion here about what we are talking about. Scotland has no power to decide the name for itself.

[Mr Harper]

That is a good point. There are two separate arguments, one about what we should call the different institutions and another about which body is the right body to pass the legislation to enact those changes. I think that the Government’s approach in clause 4, which recognises the reality of what we call the Welsh Government and reflects that in primary legislation passed by this Parliament, is the right one, rather than the approach followed by those who have signed up to new clause 5. That is why I will oppose the new clause, but I am glad that the hon. Member for Carmarthen East and Dinefwr is not going to press it to a vote. I hope that the Committee will support clause 4.

[Owen Smith]

I, too, welcome you to the Chair, Mr Chope. It is a pleasure to serve under your chairmanship.

We support clause 4, which renames the Welsh Assembly Government. That is what the Welsh Assembly has long said that it would like to happen and it reflects normal custom and practice across Wales, so we are pleased that the Government have decided to change things and use the term Welsh Government in future.

On new clause 5, we accept that there is a debate to be had about the name. Silk part II refers to the prospect of a Welsh Parliament and it is ironic that the leader of the Conservative party in Wales holds that view. I admire the chutzpah with which the Under-Secretary glossed over that, as it is an irony that the Opposition see clearly. However, this is an area of debate that ought properly to be dealt with in any legislation that reflects Silk part II rather than under this Bill, which properly reflects the preponderance of Silk part I. For that reason, even if the new clause were pressed to a vote, we probably would not support it.

[Stephen Crabb]

I agree very much with the comments made by my hon. Friend the Member for Forest of Dean (Mr Harper). There are two elements to the debate. The first is about what we call the legislature and the second is about where the decision is taken. As for the first, there is an emerging debate in Wales about what we should call the National Assembly and whether it should have its name changed. The leader of my party’s group in the Assembly has a view that I fully respect. He is an excellent colleague and I am sorry if I gave the impression that I was glossing over his views, but I still maintain the position that the debate is emerging and has not yet engaged with the public consciousness. Until we get to that point, it is probably a debate that will not be resolved.

As for the second part of the debate, the Silk commission referred to the decision on where the decision should be made in part II of its recommendations. We have been clear and consistent all along that decisions about the Silk part II recommendations are not for this Bill but for a future Parliament and a future Government and for the parties to consider in their manifestos. I stand by my earlier remarks and ask the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) not to press his new clause to a vote.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clause 5 ordered to stand part of the Bill.

New Clause 4

National Assembly to set number of AMs

‘Her Majesty may by Order in Council provide for the transfer of responsibility for setting the number of Assembly Members to the National Assembly for Wales.’.—(Jonathan Edwards.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

19:08

Division 259

Ayes: 4

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Plaid Cymru: 3
Green Party: 1

Noes: 254

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Conservative: 219
Liberal Democrat: 34

Clause 8

Welsh rate of income tax

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

I beg to move amendment 21, page 8, leave out line 23 and insert—

‘(1) Part 4A of GOWA 2006 (as inserted by section 6) is amended as follows.

(2) In section 116A(1) (overview), after “Part” insert “—

(a) Chapter 2 confers on the Assembly power to set a rate of income tax to be paid by Welsh taxpayers, and

(b) ”.

(3) After Chapter 1 insert—’.

This amendment and amendment 19 ensure that the overview provision in new section 116A(1) of GOWA 2006 relating to the Assembly power to set a rate of income tax can only come into force, like the other provisions relating to that power, following a yes vote in a referendum.

[The Temporary Chair (Mr Christopher Chope)]

With this it will be convenient to discuss the following:

Amendment 2, page 8, line 36, leave out ‘only’ and insert ‘more than’.

Amendment 3, page 8, line 36, leave out ‘only one rate’ and insert ‘up to three rates’.

This amendment is proposed to implement the recommendations of the Silk Commission that the Welsh Government have the power to set different rates of tax for different income bands.

Government amendments 22 to 28.

Amendment 16, page 12, line 34, after ‘Assembly’, insert

‘and each House of Parliament’.

Amendment 6, page 12, line 37, at end add—

‘(2) The Secretary of State shall review the impact on the Exchequer effects of the provisions in this section on residents who live within 50 miles of the Wales/England border and the impact on the prospects for tax competition within the UK, and place a copy of the review in the Library of the House of Commons.’.

Clause stand part.

Amendment 41, in clause 9, page 13, line 8, leave out ‘10’ and insert ‘15’.

Clause 9 stand part.

Amendment 1, in clause 11, page 16, line 20, leave out from ‘Wales’ to end and add

‘where a Welsh rate resolution specifies more than one rate of income tax.’.

Government amendment 19.

Amendment 38, in clause 28, page 29, line 34, after ‘except’, insert

‘sections 8 and 9 and’.

Amendment 39, page 29, line 36, at end insert—

‘(2A) Sections 8 and 9 shall not come into force until a Welsh Government Minister has laid a report before the National Assembly for Wales containing a statement to the effect that the Welsh Government, with regard to the Statement of Funding Policy, is content with the fairness of the arrangements for allocating funding from the UK Government to Wales.

(2B) Sections 8 and 9 shall be suspended following any substantive reform, amendment or other alteration of the arrangements mentioned in subsection (2A), until the process under subsection (2A) has been repeated.’.

Amendment 4, in title, line 3, leave out ‘a rate’ and insert ‘rates’.

[Mr Gauke]

rose—

[Sir Greg Knight (East Yorkshire) (Con)]

On a point of order, Mr Chope. If the four people who voted in favour of new clause 4 want to express an opinion on one side of the argument or the other later this evening, is there not a case that you should weigh the voices?

[The Temporary Chair]

That could be considered. I have always been keen that we should allow the minority to express their opinion in the Chamber without having it suppressed.

[Mr Gauke]

It is a great pleasure to serve under your chairmanship this evening, Mr Chope, and to set out the Government’s position on clauses 8 and 9 and the Government amendments. I will also take the opportunity to comment on the amendments tabled by others and will have the chance to debate taxation powers with the shadow Secretary of State for Wales, which I am sure will bring back many happy memories for him of serving on Finance Bills.

Subject to the outcome of a referendum, clause 8 amends the Government of Wales Act 2006 to introduce a Welsh rate of income tax to be paid by those defined as Welsh taxpayers. Clause 9 amends the Income Tax Act 2007 to set out how the Welsh rate of income tax determines the Welsh basic, higher and additional rates of income tax. It also defines the income that will be taxed at those rates.

I shall start with Government amendments 19 and 21. The income tax provisions in clause 8 form part of a new part 4A of the 2006 Act, which is introduced by clause 6. Part 4A’s introductory section includes a reference to the income tax provisions in chapter 2. The provisions in clause 6 will come into force two months after this Bill receives Royal Assent. However, the income tax provisions in clause 8 and 9 can of course be brought into force only following a yes vote in a referendum. Amendment 19 therefore removes the reference to chapter 2 from clause 6, and amendment 21 reinserts the reference into clause 8, bringing the commencement of the reference into line with the rest of the income tax provisions. That will ensure that the amended Act accurately reflects the legislative competence of the Assembly at a given point.

The provisions in clause 9 concerning the Welsh rate have been revised since the draft Bill. That necessitated changes to the power to allow for further consequential changes to be made under secondary legislation introduced by clause 8 in new section 116I of the 2006 Act to ensure that it continued to work as intended. Government amendments 22, 27 and 28 make further technical changes to that power in order to clarify that proposed new section 11B does not impose a charge to income tax. Rather, the effect of the new section 11B is to apply the Welsh rates of income tax to a Welsh taxpayer’s non-savings income.

On Government amendments 23 to 26, the power in new section 116I also allows an order to be made to ensure that HMRC can continue to operate the PAYE system effectively in the event that the Assembly passes a Welsh rate resolution at a late stage in the preceding tax year. Such an order would require employers to continue to operate PAYE on the basis of the information issued by HMRC, rather than the correct tax position for a specified period. The tax position of employees would ultimately be correct over the course of the tax year.

The scenario I have set out would also apply if, for whatever reason, the Assembly did not pass a rate-setting resolution at all, assuming that that had not previously been announced by the Welsh Government. Although I accept that that is unlikely to arise in practice, it is important to recognise that the Assembly has the option not to pass a rate if it so chooses. Amendments 23 to 26 therefore extend the order-making power to cover that scenario. I hope that hon. Members will support those amendments and Government amendments 19, 21, 27 and 28.

In amendment 41, I was pleased to see an amendment from the hon. Members for Pontypridd (Owen Smith) and for Llanelli (Nia Griffith) that supports the principle of income tax devolution, although I note that their latest approach would not provide Wales with quite the same outcome that they have now proposed for Scotland. None the less, it is progress. Although I confess to not having previously studied the issue very closely, I was not sure whether the Labour party opposed income tax devolution or thought that there was not enough of it. No doubt we will receive an explanation later.

[Owen Smith]

rose—

[Mr Gauke]

Perhaps we will receive an explanation immediately. I will happily give the hon. Gentleman that opportunity.

[Owen Smith]

I am grateful to the Exchequer Secretary, and this of course brings back warm memories of time spent debating Finance Bills. He failed to mention our amendments 38 and 39—I presume he will do so in due course—which seek to give symmetry between Scotland and Wales in relation to tax powers. While I am on my feet, may I ask him to return to what he said earlier about Welsh taxpayers under this legislation? Will he confirm for the House that that would designate all MEPs in Wales as Welsh taxpayers, including Kay Swinburne, a Conservative, who does not live in Wales?

[Mr Gauke]

All Welsh MEPs will be Welsh taxpayers. I will deal with the amendments the hon. Gentleman mentions, although I do not think that they would achieve symmetry. I note that he was not very clear in responding to my point that only a little while ago he said that devolution of income tax to Wales was a Tory trap, or something of the sort. Now he proposes that devolving 10p is insufficient and that it should be 15p. I do not know whether he holds both views at the moment, or just one. I will certainly give way if he can provide some clarity on that point.

[Owen Smith]

Of course, they are entirely reconcilable, as I shall explain later. However, I did not hear an answer from the Exchequer Secretary on whether Kay Swinburne, the Conservative MEP for Wales, who still lives in Ledbury in England, would be designated as a Welsh taxpayer under the terms of the Bill. That strikes me as an extraordinary oversight by a Conservative Minister.

[Mr Gauke]

I will repeat what I said: Welsh MEPs will be Welsh taxpayers. I am not sure that I can be any clearer.

On the extent of income tax devolution, there is a careful judgment to be made. Devolving an element of income tax increases the financial accountability of the Assembly and the Welsh Government in three important ways. First, it will enable the Assembly to fund more of the spending for which it is responsible. Secondly, the Welsh Government will be able to vary the levels of tax and spending in Wales. Thirdly, while the Welsh Government currently control many key levers to generate economic growth in Wales such as education, skills, housing and planning, the resulting economic performance currently has no impact on their budget. Devolving an element of income tax will directly link the Welsh Government’s budget to their economic decisions.

19:30

[Mr Hanson]

What will happen to the people residing in England who, as the Minister’s hon. Friends have said, already use services in Wales such as the health service? Many people on the border who live in England use health and education services in Wales. Is it equitable that they do not pay the level of tax that might be levied by the Welsh Assembly in future?

[Mr Gauke]

As the right hon. Gentleman knows, the question of who is a Welsh taxpayer is dependent on who resides in Wales. I take it from what he says that he is opposed in principle to the devolution of income tax. He is nodding his head as if to say yes. He will be aware that his party has tabled an amendment suggesting that 15p, not 10p, should be devolved to the Welsh Government. I do not know how he reconciles his view with that of his Front Benchers.

[Mr Hanson]

I support my hon. Friends’ amendment to look at how this impacts across the board. The Exchequer Secretary must accept that there are people in Shrewsbury, Herefordshire and Worcestershire who use services in Wales. Would he support—I am not saying that I support this—a Welsh Assembly Government charging for services used in Wales and paid for by Welsh taxpayers but also used by English people who do not contribute to the Welsh tax burden for those services?

[Mr Gauke]

This is not about charging for public services. We have devolution of income tax in Scotland, where the issues that the right hon. Gentleman has mentioned may arise. I am surprised that, as a distinguished shadow Minister, he appears to be taking a position at odds with his own Front Benchers.

[Owen Smith]

rose—

[Mr Gauke]

Perhaps if I give way to the hon. Gentleman he will explain the apparent contradiction between his amendments and a statement that seems to involve opposition to the devolution of income tax altogether.

[Owen Smith]

There is absolutely no contradiction on our part. The Minister has come very late to the debate; I do not know why the Secretary of State does not feel able to answer these questions, but that is for him to respond to. We have said throughout that we have never thought that income tax devolution to Wales was a priority. We do not think there is a significant appetite for it in Wales, and we consider that it creates a Tory trap in two respects. The Conservative party is committed, in Wales and across the rest of the UK, to cutting taxes further for the wealthiest people. The Secretary of State has said that he wants to do that. He has further said that he favours tax competition, with Wales able to undercut England. We are not in favour of that. However, given that in the Bill the Secretary of State has drawn a clear line between the quantum of income tax that is nominally to be devolved to Wales and the amount of borrowing that will be afforded to the Welsh Government, and given that £1.7 billion has been cut out of the Welsh budget, particularly in capital, we are in favour of increasing the amount of money that they might borrow. Our 10p to 15p change would achieve that, if the Welsh people agreed to it in a referendum.

[Mr Gauke]

I am grateful for that lengthy speech. I may have come late to the debate, but it is perfectly clear that Labour has been all over the place on this matter. I come back to what I said about the advantages of devolving income tax. One of those, very significantly, is that there is much greater accountability for the Welsh Government, because if they are able effectively to use the powers that they currently have to get the Welsh economy to grow, they will benefit from that as a consequence of increased revenues.

[Mr Harper]

Perhaps I can help to answer the question asked by the right hon. Member for Delyn (Mr Hanson). First, my constituents who have to use the NHS in Wales do not want to, would love not to and would like to use the NHS in England. Working with the Secretary of State for Health, I hope we will be able to put that in place by the end of this year, as he has pledged in the House.

Secondly, all UK taxpayers make a contribution to the Exchequer, which supplies the block grant to Wales that, of course, part-funds public services. Given that we are talking about a partial devolution, there is still quite a lot of money coming from the block grant and any of my constituents who are using public services will, of course, have paid their fair share.

[Mr Gauke]

My hon. Friend makes two valuable points. I presume that his very good argument about the block grant would be weakened if the devolved amount was 15p rather than 10p.

[Geraint Davies]

The Minister has made the case that, if the Welsh economy expands relative to the English economy, the new regime—the Welsh Exchequer, as it were—would gain. However, the corollary of that, of course, is that if the English economy grows faster than the Welsh economy as a result of the current Government generating growth through a London housing bubble, Wales will lose out. Why is the Minister putting only one half of the argument when this could in fact be a hidden trap?

[Mr Gauke]

One of the attributes of devolving an element of income tax is that it will ensure that the Welsh Government have the incentives to grow the economy as strongly as possible. I am rather surprised that the hon. Gentleman has so little faith in the Welsh Government that he does not want to encourage this opportunity and that he does not have the confidence that, by pursuing the right policies, the Welsh economy can grow significantly. I would have thought that that is what he wanted.

[Geraint Davies]

The Minister knows that investment and economic development in Wales would deliver jobs and that that would reduce social security costs and increase income tax. There is no proposition for social security to be devolved, so a lot of the benefits will be in England. What is more, with this new manifestation of the policy—this half-cocked version—there is a real danger that, if a London-centric recovery occurs, Wales will lose out.

[Mr Gauke]

Again, I am not sure that a contribution from the Labour Back Benches is entirely aligned with the views of those on the Labour Front Bench.

[Geraint Davies]

We’ve got a democracy here!

[The Temporary Chair (Mr Christopher Chope)]

Order. Only one person can speak at a time.

[Mr Gauke]

I am sorry that I have clearly touched a nerve with the hon. Gentleman. [Interruption.]

[The Temporary Chair]

Order.

[Mr Gauke]

I continue to touch a nerve with the hon. Gentleman. If tax receipts grow in Wales as a consequence of greater economic growth—after all, the Welsh Government have powers over education, skills, housing and planning—it will be to the advantage of Wales and the Welsh Government. I have no doubt that it is the desire of the Welsh Government to do the best for the Welsh economy. This is an opportunity to benefit from growth and increased tax receipts.

[Owen Smith]

I am grateful to the Minister for giving way; he is being very generous with his time. This is like all our yesterdays, in that we are debating, by implication at least, the Laffer curve. He said a moment ago that if Wales were to pursue the right policies, it would see economic growth by deploying these new powers. Does he mean by that that taxes in Wales should be cut, as the Secretary of State has said he would do? If so, which taxes does the Exchequer Secretary propose to cut and by how much?

[Mr Gauke]

That is a matter for the Welsh Government. They might want to pursue tax policies, but I repeat that policies on education, skills, housing and planning all contribute towards economic growth. The situation at the moment is that the Welsh Government control many of the key levers to generate economic growth, but do not currently benefit from any resulting economic performance through the impact on its budget. This devolution of tax will address that situation. Equally, to go back to the point made by the hon. Member for Swansea West (Geraint Davies), it means that if bad policies are pursued and they damage growth, that will have a consequence for the Welsh economy. I am sure that he is not suggesting that the Welsh Government will pursue growth-damaging policies.

[Geraint Davies]

rose—

[Owen Smith]

rose—

[Mr Gauke]

I will give way one last time to each hon. Gentleman.

[Geraint Davies]

Does the Minister accept that although some powers to effect economic performance are in Wales, the mass of powers are in this place in terms of the Exchequer, our relationship with the Bank of England and macro-economic policies across the United Kingdom? With the budget that it has, Wales alone cannot determine its economic future. To say so is simply misleading, and he should withdraw it. It is a disgrace.

[Mr Gauke]

The hon. Gentleman may say that the mass of powers are here, but we are talking about a relative test involving Wales versus the rest of the United Kingdom. United Kingdom policies apply across the United Kingdom; the specific policy of the Welsh Government may result in changes in growth in the economy and the impact of that on the budget.

[Geraint Davies]

rose—

[Mr Gauke]

I will now give way to the hon. Member for Pontypridd. I think that I have—[Interruption.]

[The Temporary Chair (Mr Christopher Chope)]

Order. The Minister is not giving way to the hon. Member for Swansea West (Geraint Davies). We must have some order. There are not many Members in the Chamber, but they seem to be making a mockery of the rules of order. I think that the Minister is giving way to the hon. Member for Pontypridd (Owen Smith).

[Owen Smith]

I merely wanted to ask whether, while talking about good and bad policies, the Minister would care to congratulate the Welsh Government on the good policy of Jobs Growth Wales. The policy has been seven times more effective than the Work programme in Wales, and has resulted in Wales having higher growth and, indeed, better unemployment figures than anywhere else in the UK.

[Mr Gauke]

It is worth pointing out that 12,000 new jobs, as I understand it, have been created under the Work programme in Wales, but I think that I should make a little progress, Mr Chope.

The change involves creating incentives for the Welsh Government, which of course means transferring some risks to them. Specifically, the Welsh Government’s budget will benefit if the income tax base grows faster in Wales than the UK average, but it will be adversely affected if growth in Wales is slower. Crucially, the larger the proportion of income tax that we devolve, the greater the potential impact on the Welsh Government’s budget. Devolving 15p of income tax would increase the size of the impacts by 50% compared with devolving 10p. There is a balance to be found between risks and rewards, and at this stage we see no evidence to suggest that we should move away from the Silk commission’s assessment, which resulted in the recommendation to devolve 10p of income tax. That recommendation is now reflected in the Bill.

[Owen Smith]

Will the Minister give way a final time?

[Mr Gauke]

I remember debates on Finance Bills in which it was very difficult to speak for long without a contribution from the hon. Gentleman, and nothing has changed. I will give way again.

[Owen Smith]

I aim to entertain and to scrutinise legislation properly. Simply on the question of risk, will the Exchequer Secretary tell us what risk the Welsh Government will bear in relation to the potential costs of the change? We know that it will cost between £40 million and £42 million to do it in Scotland. Will it be more or less for Wales? How much will it be?

[Mr Gauke]

At this point, it is not possible to say what the cost will be. I must say that, with the gain in greater accountability and the greater devolution of powers, hon. Members should welcome the change. The hon. Gentleman is aware that the issue is one for a future referendum. Whether the Welsh people want to go down such a route is a question for them, and such matters will clearly be relevant to that debate. However, on having a 10p rate rather than a 15p rate, I hear the arguments in favour of essentially no devolution whatsoever and those for having a larger sum, but we believe that we have got the balance right. I hope that hon. Members will accept the balance achieved by the Silk commission recommendation, and that the hon. Gentleman will not persist with amendment 41.

19:45

[Mr Mark Williams]

I congratulate my hon. Friend and the Wales Office on their work on this matter. I endorse the principles behind the Silk commission and the legislation. Although my hon. Friend alluded to Silk, he has not yet mentioned the principles behind the lockstep and not giving the Welsh Government the capacity to vary rates between the bands. Some of us still have concerns about that.

[Mr Gauke]

I am grateful to my hon. Friend because he takes me neatly on to the next line of my speech.

Amendments 1 to 4, which were tabled by Plaid Cymru, relate to the single Welsh rate of income tax—the so-called lockstep system. Fundamentally, income tax devolution must work within the integrated UK-wide income tax system. It must work for Wales by increasing the accountability of the Assembly and the Welsh Government, and it must work for the UK by maintaining the stability of the tax system.

Following a thorough and robust assessment of the Silk commission recommendations, we have determined that that would be most effectively achieved through a single Welsh rate of income tax that applied to all bands. There are two main reasons for that. First, the pooling and redistribution of tax revenues is a key feature of our fiscal model and ensures that wealth is shared among the regions and countries of the UK. The income tax structure is a key mechanism for achieving wealth redistribution. It is surely right, therefore, that UK-wide redistribution is decided at the UK level. The lockstep ensures that that will continue to be the case.

Secondly, although there are many benefits of tax devolution, it is not without risk. Specifically, we need to minimise the potential for harmful tax competition, increased opportunities for tax avoidance and evasion, and higher administrative burdens. It is therefore crucial that when we devolve taxes, we do so in a way that minimises those risks. In particular, the Government have consistently been clear that tax devolution should not benefit one part of the UK to the detriment of another. Tax devolution is not about moving economic activity from one area to another, but about empowering the devolved Administrations to generate additional growth and increasing their accountability by linking their budgets to their decisions. That incentivises the devolved Administrations and increases their accountability to the people, in this case in Wales.

Without the lockstep, the Welsh Government could substantially lower the rates of tax for the upper bands in Wales without making any change to the basic rate. That would be a considerable incentive for high earners to move across the border, which would benefit Wales, but would be to the detriment of the UK as a whole. Instead, the lockstep system will enable the Welsh Government to vary the levels of tax and spending in Wales, but the size of any differences will be unlikely to lead to tax competition. For example, they would be similar to the existing differences between the levels of council tax in neighbouring local authorities in Wales.

Devolving an element of income tax is therefore best achieved using the lockstep system. That will enable us to deliver substantial benefits to Wales, while continuing to redistribute wealth throughout the income tax system and minimise the risk of tax competition. I hope that I have helped hon. Members to understand our rationale for the lockstep system. I therefore ask them not to press amendments 1 to 4.

[Jonathan Edwards]

rose—

[Mr Gauke]

Perhaps the hon. Gentleman will take this opportunity to say that he will not press those amendments.

[Jonathan Edwards]

Does the hon. Gentleman not understand that he has contradicted himself? Indeed, the whole Wales Bill is contradictory. He is arguing that the powers are needed to incentivise the Welsh Government to develop economic growth, but he is placing a lockstep on those powers, making it impossible to use them. It is essentially a handcuff on those powers. There is a huge contradiction in what he is saying.

[Mr Gauke]

I do not accept that the powers are impossible to use. One can debate whether the rates should be varied, but the fact that there will be greater accountability will benefit Wales as a whole. We must balance the improvement in accountability in Wales with the difficulties that might arise with tax competition in the higher rates, which would be likely to damage the tax base in the UK as a whole. That is why we proceeded with a lockstep.

On amendment 6, tabled by the hon. Member for Pontypridd, I assure the Committee that the Government always consider the impacts of potential policy options and keep policies under review. An assessment of the potential impacts of devolving elements of income tax to the Welsh Assembly is summarised in the documents accompanying the introduction of the Wales Bill, in particular the Command Paper and the impact assessment. That assessment explains how the proposed system of income tax devolution achieves the key benefits identified by the Silk commission, increasing the accountability of the Assembly and Welsh Government and providing flexibility over the levels of tax and spending in Wales, while also minimising the risks of tax competition in the UK whereby significantly different tax rates could affect the behaviour of people living close to the border.

The Government’s assessment of the Silk commission’s proposals look closely at the potential for harmful tax competition in the UK, particularly given the populous border between England and Wales. As a result of that work, the Government rejected a system of three independent Welsh rates of income tax, instead proposing the lockstep system. As I have previously explained, that system specifically helps to minimise the risk of harmful tax competition in the UK. I hope hon. Members agree that the assessment we have undertaken is suitably robust, and that they are reassured by our commitment to keep the policy under review. Clause 22 requires the Government to report annually on the implementation and operation of the finance provisions of the Bill, so we will keep Parliament informed in that regard. On that basis I hope that hon. Members will not press amendment 6.

Amendment 16 was tabled by my hon. Friend the Member for Forest of Dean (Mr Harper) as recommended in the Silk commission’s report of November 2012, and clause 8 provides for the Comptroller and Auditor General to report directly to the National Assembly for Wales on HMRC’s administration of the Welsh rate of income tax. That will provide independent assurance to the Assembly on HMRC’s performance in administering this tax. The Comptroller and Auditor General currently reports to Parliament on HMRC’s administration of its business, including the operation of the UK’s income tax system. Should the Welsh rate of income tax be introduced, it will be operated as part of the UK income tax system. The NAO would therefore be able to report to Parliament in relation to the Welsh rate as part of its existing remit, and clause 8 ensures that reporting to the Welsh Assembly on the Welsh rate will additionally fall within the NAO’s remit.

[Mr Harper]

My hon. Friend will know from Second Reading that my concern is about companies based in my constituency that employ people, some of whom are resident in England and some in Wales, because there would be an administrative burden on those companies should there be a Welsh rate of income tax. I think the Minister has addressed this point, but will he confirm whether that burden—to the extent that it exists—will effectively be reported not just to the Welsh Assembly but also to this House? Members who represent English residents have a legitimate interest in how that complexity will hit local firms. If the Minister could be absolutely clear on that, there will be no need to press the amendment to a vote.

[Mr Gauke]

I am grateful to my hon. Friend for that point and I hope I can reassure him. There already exist mechanisms for scrutiny in relation to the Welsh rate by Parliament through existing vires. HMRC’s accounts would contain specific information on the Welsh rate, and they will continue to be laid before Parliament. Hon. Members will be presented with the levels of spending incurred by HMRC in administering the Welsh rate and the amounts of revenue collected. I believe that those existing channels provide an appropriate level of scrutiny for hon. Members in relation to the Welsh rate, and I hope that addresses my hon. Friend’s point.

I also think it right for additional insurance to be provided to the Assembly via the Comptroller and Auditor General’s report, and we anticipate that that report would be produced to a timetable similar to that of the wider report to Parliament on HMRC’s accounts. No doubt my hon. Friend will shortly contribute to the debate, but I have set out the existing mechanisms for scrutiny that will be available to Members of this Parliament, and I hope he is reassured.

On amendments 38 and 39, we have been working closely with the Welsh Government on Welsh funding. In particular, the Government recognise there has been convergence between the levels of funding in Wales and England since devolution, and that this is a significant concern in Wales. As a result, in October 2012 we agreed to implement a joint process to review the levels of funding in Wales and England in advance of the spending review. If convergence is forecast to occur over the course of the spending review period, options will be discussed to address the issue in a fair and affordable manner, based on a shared understanding of all the available evidence.

In advance of the 2013 spending round, a joint review was therefore undertaken by the two Governments and the outcome set out in a written ministerial statement. The review determined that funding levels are not expected to converge during the period to 2015-16, and in fact an element of divergence is forecast to occur. The review also determined that relative funding levels in Wales are within the range recommended by the Holtham commission.

These arrangements assure that we have a shared understanding of funding levels in Wales and a process is in place to consider options should convergence be forecast to resume. In no way would the devolution of income tax have any impact on these arrangements, and it is certainly not the case that income tax devolution would lock in the current level of funding. These arrangements therefore provide a firm basis for proceeding with the new financial powers in the Bill, and I hope that hon. Members will therefore not press amendments 38 and 39. I hope that my comments have been of assistance to the Committee, and that clauses 8 and 9 and the Government amendments will be added to the Bill this evening.

[Jonathan Edwards]

I wish to speak to amendments 1, 2, 3 and 4, in my name and the names of my colleagues in Plaid Cymru. We intend to press amendment 1 to a Division at the appropriate time.

The lockstep income tax power that is on offer in this Bill is not the one recommended by the Silk commission. We see two ways forward to preserve the integrity of the original Silk proposals. Either the lockstep income tax power should proceed without a referendum, which amendment 1 would achieve, or the Bill should be amended as per the Silk commission recommendation on income tax, which amendments 2, 3 and 4 seek to do, thereby restoring the need for a referendum, as Silk envisaged, on an income tax sharing arrangement without a lockstep.

I remind hon. Members that their parties, through their representatives on the commission, agreed to the Silk recommendations. Indeed, the Labour party’s representative on the commission was the esteemed former Assembly Member, Sue Essex, who is of course a former Finance Minister in the Welsh Government. The purpose of amendment 1 is to ensure that the referendum is on the ability of Wales to vary each income tax band individually, rather than the lockstep that is proposed in the Bill.

I believe that we should not have a referendum on these powers. The borrowing powers that will accompany the income tax powers would be essential to move the economy forward. Capacity will increase with the income tax powers. However, I accept the position of my party that a referendum should be held on the original Silk recommendations. In my view, the principle of fiscal devolution has already been conceded in this Bill—we will discuss the minor taxes next week—so the case for a referendum is not very strong.

Amendments 2, 3 and 4 would alter the Bill so that the lockstep is removed from the income tax power, giving Wales the ability to vary income tax band rates independently of each other, subject to a referendum, as per the original recommendation of the Silk commission. As the Bill stands, the lockstep on the ability to vary income tax in Wales means that all three bands can be moved up or down only in tandem, as is the case in Scotland. I hesitate to point out that those powers have never been used in Scotland, even though they have been available since devolution in 1999. Of course, the Silk recommendation was for the power to vary income tax band rates independently of each other. In reality the lockstep kills the ability to vary income tax at all, which strengthens the argument that I put to the Minister in an intervention—the lockstep hinders what the Government claim to be trying to achieve in the Bill, which is to incentivise the Welsh Government to develop their economy. Without the ability to introduce innovative income tax policy, how are they meant to achieve that?

19:59

The Tory and Liberal Democrat UK coalition Government put narrow party interests before the Welsh national interest and added the lockstep to the income tax powers, riding roughshod over not only the people of Wales but the supposedly autonomous parties and colleagues in Wales. They ignored the fact that they had signed up to the Silk proposals via their own commissioner. Meanwhile, the Labour party, at its recent spring conference in Llandudno, said that it wanted for Wales what its devolution commission has settled on in Scotland. That goes beyond the Tory lockstep, with the added handicap that the band can be moved only one way—upwards. That is why I have labelled it “lockstep-plus”. This goes against everything that First Minister Carwyn Jones and Finance Minister Jane Hutt were saying for months prior to the Bill being introduced by the UK Government. They argued that the lockstep must be removed and Wales be given the ability to vary the bands individually, as recommended by the Silk commission. Having said that, we support amendment 41 from the Labour party, which would increase the fiscal responsibility of the Welsh Government up from 10p to 15p.

[Hywel Williams]

Does my hon. Friend find it peculiar that Labour’s position is to allow an increase in taxes in Wales, thereby handing a tax advantage to England? Its only policy on tax competition is to move it in favour of our friends in England.

[Jonathan Edwards]

That is an important intervention. The Labour party’s position is that it is worried about tax competition, yet, based on its tax policy, the only tax competition that could happen would favour England and other parts of the British state.

[Owen Smith]

Let us be absolutely clear: Labour has not argued, and is not arguing, for a tax increase in Wales. We know that the Conservative party is saying that it wants to cut taxes for the wealthiest in Wales. We are seeking to future-proof the legislation so that a Labour Government in Wales would be able to mitigate against further Tory tax cuts for the wealthiest, and introduce tax justice in Wales.

[Jonathan Edwards]

That is the crux of the argument, and the division between the Labour party and my party. My view is that we should empower the National Assembly and have a mature debate in Wales about what the level of taxation should be. I think the hon. Gentleman is aware of where my political conscience lies—I tabled an amendment to the Finance Bill to reinstate the top rate to 50p. Let us have the debate. Let us trust our Assembly Members to have the debate and let us see the National Assembly mature. The one thing that devolving responsibility for these powers will do is lead to the maturing of the Assembly. Hopefully, we will see the growth and development of our democracy in Wales.

When the Welsh Affairs Committee carried out the pre-legislative scrutiny of the Bill, we had independent witness after witness—I hasten to add that my hon. Friend the Member for Arfon (Hywel Williams) had taken over my role in the Committee for that period, as I was enjoying my paternity leave with my son Llywelyn—giving evidence, except of course the Secretary of State and Treasury Ministers, arguing that the lockstep should be removed. Those giving evidence included the leaders of all the parties in the Assembly, not least the leader of the Liberal Democrats and the Conservatives in Wales. Several distinguished economists, academics and experts, as well as the Chair of the Select Committee on Political and Constitutional Reform, also gave evidence. When the Welsh Affairs Committee visited Scotland following the initial Silk report, there was much excitement about its proposals. Academics, economists, civil servants, Ministers and Back Benchers in the Scottish Parliament were all in favour of Silk’s proposals for Wales, as opposed to what they have in the Scotland Act 2012.

I need not remind Labour Members present that the Labour First Minister, Carwyn Jones, said that the lockstep is a “Tory trap” and that it should be removed. He said the lockstep was “a long way short” of what was considered to be good for Wales, adding that

“binding the rates together is not right for Wales”.

That is a clear indication of the need to remove the lockstep on income tax varying powers.

We in Plaid Cymru are seeking, through amendment 21 and several other amendments, to maintain the integrity of the original cross-party Silk commission recommendations. We believe that the Welsh economy needs that sensible package of reforms in order to increase its ability to bring about economic growth and create jobs. We believe that it is a necessary tool, which will help us to begin to rebalance the economy of the British state by giving greater power to the nations and regions, and will help Wales to begin to lift itself from the bottom of the UK economic league table.

In its present form, the Bill requires Wales to hold a referendum on the lockstep model of income tax and win it in order to gain access to the higher limit applying to borrowing to fund investment. We believe that Wales needs access to that money in order to invest sensibly in infrastructure, secure a good return on its investment, and provide jobs that will have a beneficial effect on the state of the Welsh economy. We are all mindful of the huge cuts in its capital budget that the National Assembly has suffered under the coalition Government.

Given that the lockstep was not the compromise agreed by the parties during the Silk commission’s deliberations, it would surely make more sense to devolve the model without the need for a costly referendum. It is simply an income tax sharing model, with a 90-10 split between the United Kingdom and Welsh Governments. Giving the Welsh Government the ability to vary tax is a theoretical exercise that, as the Treasury well knows, cannot become reality with a lockstep—hence the strings that are attached in the Bill. The big prize of what we propose would be the increased borrowing capacity that I believe is required to help the Welsh economy to regenerate and renew itself.

It is clear that all the other parties are now putting narrow self-interest ahead of the Welsh economy by attaching conditions and caveats to Wales’s gaining of greater fiscal and financial powers. The Tories and Liberal Democrats have their condition of the lockstep, while Labour has its caveat in regard to reform of the Barnett formula, on which its members continue to contort and refuse to commit themselves despite citing it as a precondition for greater financial powers for Wales.

As for the debate in Wales, Andrew R. T. Davies and Kirsty Williams have announced some exciting tax policies that they wish to pursue in relation to the ability to vary taxes. Unfortunately, their colleagues down here in London are completely undermining what they have pledged to the people of Wales in various policy announcements. That is a big hit to their credibility, which may be why the Secretary of State introduced the lockstep: perhaps he wanted to undermine Andrew R. T. Davies.

There has already been much public debate in Welsh civil society about the issue of the lockstep and the power to vary income tax bands individually in Wales. There has been controversy as the lockstep row has engulfed the Conservatives. The Welsh Secretary has claimed that the mechanism would not prevent Welsh Ministers from using the powers—although they have not been used in Scotland since 1999—and has suggested that a 1p cut across all three bands would increase Wales’s competitiveness, a claim which, according to the Welsh Government, would cost £200 million a year. Meanwhile, the leader of the Conservatives in the Assembly rejected the lockstep in his submission to the Welsh Affairs Committee hearing on the powers, prompting a damaging fall-out with the Secretary of State. All the Tory Assembly Members were seconded down here to No. 10 Downing street to try to repair some of the damage.

We are often given the impression that it is the Treasury that does the overruling in all these matters. If Scotland does not have it, Wales surely cannot have it. However, the ability to vary income tax bands individually, as per Silk, would truly allow for the ability actually to vary income tax in Wales, and would be a significant step in the maturing of our democracy. As I said in our first debate this afternoon, it would provide a very positive narrative for the Westminster parties in relation to Scotland, demonstrating that they were serious about reforming the settlement of the UK and going beyond what Scotland has at present.

[Mr Mark Williams]

As the hon. Gentleman knows, I have a great deal of sympathy with him in regard to the lockstep, and, indeed, with one of his Select Committee colleagues who voted to remove it from the Bill. However, he is ending his speech—I think it is coming to an end: I think he has reached the last sheet—on an incredibly negative note. Does he accept that, in ensuring that our National Assembly has fiscal accountability, the Bill still represents a huge advance on the status quo? I sincerely hope that he will support it on Third Reading for that reason, whatever happens to his amendment this evening.

[Jonathan Edwards]

Of course the hon. Gentleman is right. We do support the Bill, but we want to use the opportunities provided by the Committee stage to strengthen and improve it. In my view, the lockstep is one provision that needs urgently to be removed. If the United Kingdom Government are determined to introduce it, let us devolve it in the Bill and then have a referendum on its removal. Why have a referendum on the lockstep mechanism?

The Secretary of State has spoken before of his belief that Wales needs the ability to vary income tax in order to be competitive—spoken as a true Conservative—but then does not offer a power that actually allows for any variation in income tax. That is the huge contradiction in the Bill as it stands. It is time for him and his Government to put their money where their mouth is and support our amendments—I am not holding out much hope—and for the Labour Members present to support what their party in Wales is saying by supporting us in the Lobby later.

[Glyn Davies]

This is a very important debate. The Bill is incredibly wide ranging and has lots of aspects to it, but the one issue that dominates it, as much the most important aspect, is the devolution of meaningful tax-raising powers to the National Assembly for Wales, and that involves a significant part of income tax. In doing that, the Bill will deliver financial accountability to the Welsh Government, which has been lacking since the National Assembly for Wales was established.

Let me give some context by saying something about my own background. In 1997, I was opposed to the establishment of the National Assembly for Wales, because I thought we were considering setting up a body that was not meaningful. I recall being at the count in Llandrindod Wells when the result for Carmarthenshire came through, and there were great celebrations because a yes vote had been snatched from defeat at the last minute. I recall driving home and thinking to myself that that was a key moment, and from then on I have taken the view that the National Assembly for Wales should have law-making powers and meaningful tax-raising powers. If we did not have those two powers, we were creating something that was simply not worth while. That is why this Bill is particularly important and we are dealing here with the key part.

It does not make any sense to have a Welsh Government who claim credit and say how good they are whenever they do something the people of Wales approve of but whenever something is done that the people of Wales do not approve of say, “We cannot do that because we do not have enough money from Westminster.” They transfer the blame, and they do not become a meaningful body until they are responsible for raising their own taxation. All of us know that from other things we might have done in our lives. When I was chair of Berriew community council, a very small village council, the biggest debate we had in the year was about whether we should levy 1p on the rates, just as a precept. It was much the biggest debate because it involved balancing what we wanted to spend with the demands on the ratepayers and it made us think clearly about the decisions we were taking. The same thing applied when I was the finance chairman of Montgomeryshire district council. We had an all-day debate every year about 1p on the rates, because again it was about balancing what the council wanted to spend against what we wanted to raise. That is what has always been lacking in the National Assembly.

I was a Member of the Assembly for eight years, at one stage being the finance spokesman, and I would never use the term “budget” as to my mind it was always an annual spending plan. It was not a genuine budget because it was not informing the people that it wanted money from them and that a balance was being struck between spending and demanding money from the ratepayers. So I am strongly in favour of the income tax proposal, because it is hugely important and it is why I really welcome the Bill. There are other parts of the Bill where my support is at varying levels, but the income tax proposal will be crucial.

My right hon. Friend the Secretary of State will know that I have always had some doubts about the need for a referendum. If we believe passionately that a body must have tax-raising powers to be a viable parliamentary body, we should commit ourselves in our manifestos to going forward with this proposal and then delivering it afterwards. I have come to accept that for two reasons, one of which is that there is a general expectation because of the referendum in Scotland that there will be a referendum on income tax-raising powers in Wales.

The second reason is that I want to stay as true as I can to the Silk commission report, which recommended a referendum, and all parties signed up to that. In pursuing this issue, I think I have to accept that there will be a referendum.

There has been a lot of discussion about the lockstep and the lack of freedom for the Welsh Government to vary individual rates. There will be different views on that, but I perfectly accept the rationale of the argument of the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). I must say though that it diverts us from the huge step forward that the Bill represents.

20:15

The Bill gives the National Assembly for Wales—the Welsh Government—financial accountability for what they do. We have two days of debate in Committee. By giving income tax powers to the National Assembly, we are trying to create the foundation stone on which we can build a proper body in Cardiff Bay, serving, and answerable to, the people of Wales with true financial accountability. For that reason this proposal and the Wales Bill itself deserve our full support.

[Owen Smith]

It is a pleasure, Mr Hoyle, to serve under your chairmanship, and to call you by your true name. This clause is one of the most important in the Bill, so it is a shame that we do not have a huge amount of time to discuss it. There are many important questions about how it will work in practice in Wales. The Exchequer Secretary attempted to answer some, but not all, of those questions, and there remains significant uncertainty as to how income tax varying powers would work in Wales and what the real risks would be to the Welsh Government’s budget and to the services on which the Welsh people rely through that budget.

I take some comfort from the Minister’s observation that there is probably a long time between today and these measures being deployed in anger in Wales. Crucially, from our perspective, we have been clear about the triple lock—about knowing that this would be good for Wales and for the Welsh budget, that fair funding was secured for Wales and that the Welsh people had assented at a referendum to these measures being employed in Wales. All of those three tests would have to be passed.

However, there remains on our part significant concerns about the motivation behind these proposals from the Conservative Government. We are suspicious that the true motivation is to cut taxes in Wales for the wealthiest, as the current Government have done across the rest of the UK. That suspicion is based on a very clear reading of the statement made by the leader of the Conservative party in the National Assembly, who, in a wide-ranging speech last year, explicitly called for cuts solely to the top rate of tax in Wales. This is not a fantasy on our part. The leader of the Tories says that he wants to cut just the top rate, and the Secretary of State wants tax competition through cutting across the board.

[Mr Gauke]

The hon. Gentleman will be aware that, under the provisions in this Bill, a tax cut for one rate of income tax will apply to every rate of income tax. Does he understand that point, because that is what a lockstep means?

[Owen Smith]

I entirely understand that point, absolutely, completely and utterly. I also understand that the leader of the Conservative party in Wales has placed on the record his desire to cut solely the top rate of tax—[Interruption.] The Secretary of State is muttering from a sedentary position. I presume that he is referring to his colleague, the leader of the Tory party in Wales, because it was he who called for a cut to the top rate of tax. We understand perfectly well how this legislation will work in Wales, but we are not in favour of any one part of Britain undercutting another through tax competition, which is unfortunately the position of the Secretary of State for Wales—[Interruption.] He keeps chuntering from a sedentary position that I do not understand it, but, dare I say, if he had greater faith in his own understanding of his own Bill, introduced in this House with amendments tabled in his name, he would stand at the Dispatch Box to explain the Treasury position and the tax amendments. Unfortunately, he clearly does not understand it sufficiently not to have to rely on his colleague the Exchequer Secretary. We are extremely grateful to the Exchequer Secretary for turning up to act as a human shield for the Secretary of State for Wales, but it is a crying shame that the Secretary of State and the Minister require his support.

[Mr Gauke]

There is no doubt that the Secretary of State understands the measure but, given what we have heard so far from the shadow Secretary of State, perhaps it would have been better if one of the shadow Treasury team had been making the speech instead. They might have understood it.

[Owen Smith]

The Exchequer Secretary can continue to attempt to suggest that I do not understand the Bill, but I understand it perfectly. I understand perfectly how lockstep works, but equally understand that this Government have cut taxes for the wealthiest in Britain. They have exclusively cut the additional 50p rate to 45p. I also know that his party in Wales has proposed that it would like to go further with Wales, so he will forgive us if we are suspicious of the “tax cuts for the wealthy” motives of the Conservative party. I think we will continue to be suspicious. Unless he would like to get to his feet and tell us that he does not intend that his colleagues in Wales should cut taxes for the wealthiest, I suspect that he will not wish to intervene further.

On the subject of the complexity and cost of the Bill, the Exchequer Secretary left us entirely without answers about how it will work. In order to illustrate its complexity, I highlighted that he has today moved a poorly drafted clause that will see a Welsh Tory Member of the European Parliament who does not live in Wales and who does not have a residence of any description in Wales, but who lives in England, designated as a Welsh taxpayer. The logic of that is entirely lost on me, but I should have thought that he would want to check who his European Members are in Wales and where they lived before he determined that they would get a tax break—in her case, a £700 tax break—were his Government to do what the Secretary of State for Wales has suggested and cut all the tax bands in lockstep by 1%. That is the tax cut that she would get in Wales, despite the fact that she does not actually live in Wales.

[Jonathan Edwards]

The hon. Gentleman’s point about Kay Swinburne is an interesting one. Based on that, where does he expect that Stephen Kinnock will pay taxes should he be successful in winning Aberavon? Would it be in Aberavon, in Copenhagen or where he pays tax at the moment, in a tax haven in Switzerland?

[Owen Smith]

rose—

[Hon. Members]

Just answer.

[Owen Smith]

I intend to answer. I fully anticipate that my friend, Mr Kinnock, were he to be so lucky as to win the forthcoming general election and be returned as the hon. Member for Aberavon, a great and noble seat in the Welsh Labour tradition, intends, as he has stated on the record, to live in Aberavon. The irony of this poorly drafted legislation that has been brought before us by those on the Treasury Bench today is that it would not matter where he lived. He could live in Copenhagen or in England and he would still, for the purposes of this half-cocked Bill, be considered a Welsh taxpayer. I do not think that the people of Aberavon would understand that and I suspect that the people of Wales will not understand why an English Tory MEP living in Ledbury will be deemed a Welsh taxpayer.

Let me return to the point about the complexity, if I may, and read a small section of the Bill to the Minister for the delectation of the House. It is entitled “Close connection with Wales or another part of the UK” and can be found in proposed new section 116G in clause 8. It says in subsections (3) and (4):

“T”—

the Welsh taxpayer—

“has a close connection with a part of the UK if in that year—

(a) T has 2 or more places of residence in the UK,

(b) for at least part of the year, T’s main place of residence in the UK is in that part of the UK,

(c) the times in the year when T’s main place of residence is in that part of the UK comprise (in aggregate) more of the year than the times when T’s main place of residence is in each other part of the UK (considered separately), and

(d) for at least part of the year, T lives at a place of residence in that part of the UK.

(4) In this section ‘place’ includes a place on board a vessel or other means of transport.”

I read those subsections for the enjoyment of the Leader of the House, who I am delighted to say has joined us, to point out what a ludicrously complex piece of drafting that is, and what a ludicrously complex Bill it is. We point that out because attending that complexity is cost—enormous cost.

The Secretary of State, or rather the Exchequer Secretary—the Secretary of State did not answer because he was not at the Dispatch Box—could not tell us how much it would cost to implement these measures in Wales. That is a surprise. He also talked about accountability. He might have been a little more accountable for his own Department, because it is today that the Government and his Department should have published the second annual report on the implementation of part 3 of the Scotland Act, inwhich we were anticipating, as outlined in the Secretary of State’s impact assessment to this Bill, a renewedand updated view on the costs associated with the implementation of these measures in Scotland. That has not been published today. It was not published in April as Ministers promised.

That is a dereliction of duty, not least because it leaves us in Wales with no idea as to how much these measures will cost. But we have reason to believe and to fear that it will be a significant amount of money, because we know from the first report on the implementation of the Scotland Act that it will cost more than £40 million to implement such measures in Scotland, and we know from the Government’s own impact assessment that it is likely to cost more in Wales. The reason is the porosity and populous nature of the border between England and Wales: 48% of the Welsh population and 10% of the English population live within 25 miles of that border, which means that fully 6.3 million people live along that border. In contrast, just 4% of the Scottish population and just 0.5% of the English population live within 25 miles of the border between England and Scotland, which means that just 450,000 people live along that border.

If it has taken so far, as the Government have conceded, £1.7 million to start the analysis of how these measures will work in Scotland, how Scottish taxpayers will be identified, how a pay-as-you-earn system will work, how employers will deal with it, and what the nature of the information to be provided to newly designated Scottish taxpayers will be—it is already £2 million-ish and counting, and soon to be £40 million for Scotland—do we not need to have some idea in Wales, as a part of prudent management of Treasury finances, and eventually Welsh Government—finances, of how much money it will cost the Welsh? If the Minister wants to offer us some indication, I should be grateful, but at the moment we are in the dark, and in the dark we remain concerned that the costs will be greater for Wales, and the disbenefits for Wales, therefore, potentially also greater.

In the light of the fact that there is such a long period before the measure comes into force, we will not press the amendments that we have tabled to the clause, but we will maintain our concerns about the motivations that lie behind it. We will continue to push for fair funding for Wales, not to the detriment of Scotland but in the interests of the people of Wales, and we will continue to ask the Minister to clarify what exactly this measure will mean for the Welsh people, and whether they will be better or worse off if the Bill were ever to be enacted.

[Mr Gauke]

After what is a relatively short speech from the hon. Member for Pontypridd (Owen Smith), I am still not entirely sure whether he is for or against it, but we are certainly for the devolution of income tax in the way set out in the clauses. I hope that the clauses and the Government amendments will have the support of the whole House, and that all other amendments will not be pressed.

Amendment 21 agreed to.

20:32

Proceedings interrupted (Programme Order, 31 March and this day).

The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Amendments made: 22, page 11, line 5, at end insert

‘at the rates provided for’.

This amendment, and amendments 27 and 28, make changes to reflect the fact that section 11B of the Income Tax Act 2007 (as inserted by clause 9) and section 13 of that Act provide for the rates at which income tax is charged rather than imposing the charge to income tax.

Amendment 23, page 11, line 14, at end insert—

‘(2A) If the Treasury consider it necessary or expedient to do so, they may by order provide that—

(a) the Welsh rate set by the Assembly for a tax year, or

(b) the fact that the Welsh rate has not been so set for a tax year,

does not require any change in the amounts repayable or deductible under PAYE regulations between the beginning of that year and such later date as may be specified in the order.’.

This amendment, and amendments 24 to 26, clarify and extend the power of the Treasury, previously in section 116I(4) of GOWA 2006 (as inserted by clause 8), by order to deal with the consequences for PAYE of a Welsh rate having been, or not been, set for a tax year.

Amendment 24, page 11, line 17, leave out ‘or (2)’ and insert ‘, (2) or (2A)’.

Amendment 25, page 11, leave out lines 18 to 26.

Amendment 26, page 11, line 33, leave out ‘(4)’ and insert ‘(2A)’.

Amendment 27, page 11, line 40, after ‘tax’, insert

‘at a rate provided for’.

Amendment 28, page 11, line 41, leave out ‘charged to income tax’ and insert

‘income which is charged to income tax at a rate provided for’.—(Mr Gauke.)

Clause 8, as amended, ordered to stand part of the Bill.

Clauses 9 and 10 ordered to stand part of the Bill.

Clause 11

Referendum about commencement of income tax provisions

Amendment proposed: 1, page 16, line 20, leave out from ‘Wales’ to end and add

‘where a Welsh rate resolution specifies more than one rate of income tax.’.—(Jonathan Edwards.)

Question put, That the amendment be made.

20:30

Division 260

Ayes: 5

---

Plaid Cymru: 3
Green Party: 1
Liberal Democrat: 1

Noes: 243

---

Conservative: 207
Liberal Democrat: 30
Democratic Unionist Party: 5

Clause 11 ordered to stand part of the Bill.

Clauses 12 and 13 ordered to stand part of the Bill.

Schedule 1 agreed to.

The occupant of the Chair left the Chair (Programme Order, this day).

The Deputy Speaker resumed the Chair.

Progress reported; Committee to sit again tomorrow.

Business without Debate

Wednesday 30th April 2014 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Licences and Licensing

That the draft Licensing Act 2003 (Mandatory Conditions) Order 2014, which was laid before this House on 9 April, be approved.—(Anne Milton.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 7 May (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Constitutional Law

That the draft Scotland Act 1998 (Modification of Schedule 5) Order 2014, which was laid before this House on 17 March, be approved.—(Anne Milton.)

Question agreed to.

Petitions

Wednesday 30th April 2014 Commons Chamber

20:43

[Pauline Latham (Mid Derbyshire) (Con)]

The petition, which has been signed by more than 430 people, relates to Claire and Scott Muldoon, who face eviction from the Patternmakers Arms.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners believe that it is unfair that Claire and Scott face eviction from Patternmakers Arms, a well-attended and happy pub, as a result of unreasonable increases in rent prices and further that the Government have consulted on establishing a Statutory Code and an independent Adjudicator for the pub sector to govern the relationship between large pub companies and their tenants.

The Petitioners therefore request that the House of Commons urges the Government to establish a Code to govern the relationship between large pub companies and their tenants as a matter of urgency.

And the Petitioners remain, etc.

[P001343]

20:44

[Natascha Engel (North East Derbyshire) (Lab)]

I would like to present a very topical petition from the Killamarsh and Renishaw HS2 Action Group, on behalf of the residents of Killamarsh and Renishaw. It calls on the House of Commons to reject the High Speed Rail (London - West Midlands) Bill, and I agree.

The petition states:

The Petition of residents of the UK,

Declares that the Petitioners believe that the HS2 rail plan for high speed rail will bring little benefit to the UK and will cost upwards of £33 billion to begin with; further that the Petitioners believe that the plans are badly thought through and will reap permanent untold damage, have no environmental benefits, are little use to this country and are an unaffordable luxury at this time; and further that the Petitioners believe that there are many more beneficial, viable, economically and environmentally sound proposals which should be prioritised ahead of HS2.

The Petitioners therefore request that the House of Commons reject the High Speed Rail (London - West Midlands) Bill.

And the Petitioners remain, etc.

[P001345]

Free Schools (Chapeltown, Sheffield)

Wednesday 30th April 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Anne Milton.)

20:45

[Angela Smith (Penistone and Stocksbridge) (Lab)]

It is a pleasure to have secured this Adjournment debate on a topic that is very important to the people of Chapeltown and the surrounding area.

Chapeltown, and Sheffield generally, is an area that enjoys a rich legacy when it comes to providing educational opportunities, whether for young or old. I emphasise that that legacy has always been very locally driven by pioneers such as Lady Mabel Smith, who was—believe it or not—the sister of the seventh Earl Fitzwilliam but was a Labour councillor who worked very hard over a number of years to provide education for local people in the 20th century. She was the driving force behind the establishment of Ecclesfield grammar school, which is now the local comprehensive serving the Chapeltown area. She was the chair of governors for 20 years until her death in 1951. Even now, Ecclesfield comprehensive, which is a very successful academy, has its assembly hall named after her—Lady Mabel hall. We are all very proud of the legacy that she has left us. The school goes from strength to strength under the inspired leadership of Joel Wirth, the head teacher.

That tradition—that legacy—has continued in recent years. We have seen the development of a sixth-form college in one of the most deprived parts of the city—Longley Park. We have seen Hillsborough college go from strength to strength. Only recently, it has enjoyed an £8.8 million investment from the Government because it is considered successful and has been judged by Ofsted to be a good college. Very recently, we have had a university technical college—a brand-new institution that is already going down very well in the city and which was driven absolutely by local employers and local educationists.

We have also seen the recent development of three new sixth forms, approved by the Secretary of State. They are all in the north of the city, as indeed is Chapeltown. They have already provided 188 additional places, and that number will grow to 460 by September 2014. However, one of those institutions—Parkwood—has had to postpone its recruitment of sixth formers because of a lack of demand for places. In addition, Bradfield school, which is just six miles from Chapeltown in the north of the city, has failed in its first year to meet its initial allocation of 50 places.

Bradfield is the most popular school in the north of the city. Places in its years 7 to 11 are oversubscribed every single year, and its reputation drives that popularity. I am confident that it will fill its sixth form in the end, but at the moment it is failing to do so. The underlying reason is the demographic decline, which is beginning to bite in Sheffield and, based on birth rates from years ago, is forecast to continue until 2020. In the seven-year period from last year to 2020, we will suffer a 12% decline in the post-16 population, and the cohort will not be restored to 2012 levels until after 2023. The fact that attainment levels are going up all the time should lead to greater demand for sixth-form places, but that demand will not sufficiently replace the lack of demand produced by the demographic decline.

That all calls into question the establishment of the new, post-16 free school—Chapeltown academy—which hopes to open this September. For a start, the academy is not locally driven: it was not initiated or suggested by local people, educationists or employers. Moreover, based on the demographic decline and the fact that our new sixth forms are not being filled, the demand just is not there, despite the assertions of the academy’s proposers to the contrary. My statistics are based on those provided by the local authority of Sheffield city council, which does all the measuring, and there is no evidence whatsoever that there is demand for these additional sixth-form places. The increasing demand that does exist in the city, in common with other boroughs in the area, such as Barnsley, is for primary school places.

We also need to continue the work of building the skill set of young people in the region, given that our city, and the Sheffield city region more generally, is still broadly an engineering-based economy. On top of that, we need to ensure that we develop more fully the whole range of post-16 opportunities, because we want to develop the talent of all our young people, not just those who want to be professionals or academics. That is important, but all the evidence shows that, if we need to provide extra post-16 opportunities, the emphasis has to be on further investment in vocational training and skills.

That point is underlined by the fact that 1,200 young people in Sheffield are not in education, employment or training—the awful acronym NEETs is overused nowadays and I prefer to use the full term. That is clearly where the city needs to place its emphasis. We need more provision to help meet the needs of those 1,200 young people, who have fallen behind and need extra support to get themselves work-ready and skilled for the workplace. Clearly, there is no statistical base for opening the new academy.

There are also problems with the proposed location of the new academy. I visited the site at the weekend—I knew where it was, but I just wanted to have a good look at it. It is in the middle of an industrial park. It is a big warehouse, with office space attached to it. It is not possible to enter the area at present, because it is gated by an electronic barrier, which has a gatehouse attached to it. It is surrounded by other businesses, including a repair garage that seems to specialise in repairing heavy goods vehicles. When we visited on Sunday, a host of container-type lorries were parked in the area around the garage, which is adjacent to the proposed academy building.

The local authority planners, who are professionals, have raised serious concerns about the site’s sustainability. They are also concerned about the highways implications of the proposed site and the associated safety of students. One of the problems is that the planning process is abandoned—it is not applied—when it comes to new free schools. That does not prevent Sheffield planners from having a view and their view is absolutely clear.

The site is approximately 2 acres. The academy’s proposers suggest that there will be very minor amendments in the office space part of the building for the first year 12 intake in September. During the first year of the new institution, phase 2 site development will take place, which be in the huge warehouse—the industrial unit—attached to the office space. The proposers claim on their website that the building works will not affect or disrupt existing classroom space, which I find very hard to believe, indeed.

The industrial park is off the road that takes traffic from junction 35a of the M1 down into Ecclesfield. It is a very busy road. The travel route for many students getting to the academy from Elsecar and the rest of Barnsley will involve going to Chapeltown railway station. The website for Chapeltown academy claims that Barnsley to Chapeltown on the Penistone line takes six minutes, which is great, but it does not say that there is a further 1.7 mile walk to get from Chapeltown railway station to the academy. That walk involves going up the busy road to which I have just referred, which is not safe. Alternatively, there is a slightly shorter route up Cowley lane in Chapeltown, but that is equally busy and will involve crossing the road twice as the footpath runs out on either side. I can absolutely understand why the planners in Sheffield have serious concerns about the safety of students in accessing the site, which is entirely unsuitable.

My final point about the location is that the site has no green space around it whatsoever. The website claims that there is recreational space in front of the building for students and staff alike. At the moment, that recreational space is a car park. Where recreational space and opportunities for sport will come from is absolutely unimaginable. I know that Ecclesfield park is down the hill in the centre of Ecclesfield village, which is what the academy claims on its website, but if that is the best it can do for green space, I am sorry to say that that is just not sufficient, and many local parents and young people will feel the same.

We have concerns about the transparency of Chapeltown Academy Ltd’s development of the proposal. Of course, the planning process does not apply in relation to getting planning permission for the site, but a consultation has to take place instead. The consultation, which was online, is now closed. There were a few questions asking for all people’s details and their e-mail address, but the consultation consisted of one question: “Do you agree with the premises chosen for Chapeltown academy—yes or no?” There was also a little box for additional comments. If the local authority tried to undertake a consultation as shabby and inadequate as that, it would rightly be pilloried by elected representatives, such as me, and by local media, parents, young people and the local community. It is absolutely astounding that the academy can think that that constitutes a proper consultation on a site as controversial as this one.

In addition, at the moment there is a shadow governing body, but the details of the permanent governing body have had to be extracted from the academy bit by bit. In the end, I had to write to the Minister to start to get any kind of detail at all. Even now, the detail of how the permanent governing body will look is not complete. We have the details of only four or five of the individuals involved, which is just not acceptable. On top of that, we have very few details about the staff. The names of just three members of staff and the principal-designate have been announced.

Yet we expect young people and their parents to put their faith in this venture. It is untried, untested and unknown—and it may never happen. I quote from a letter dated 25 March that I received from Lord Nash:

“I will carefully consider before entering into a funding agreement with the Chapeltown Academy Trust. Making certain that there is sufficient demand from students and that the institution will be financially viable are two of the factors that I will look at when making my decision.”

I come to the most important point of all. My understanding is that only 12 Sheffield students have accepted a place at Chapeltown academy as their first preference. Given that just 12 young people have taken a place at the academy, there is a strong possibility that the funding agreement will not go through. It is absolutely immoral to encourage young people to take up offers of places at an institution that might never open. What will happen if it does not open? Those young people will be left without a sixth-form place and will have limited choices from what is left. They will have the crumbs from the table when trying to find another sixth form to attend in September. Is that acceptable? I do not think so.

In summary, Chapeltown academy is not needed, it is not locally driven, it is in an inappropriate location, there is very little transparency in the development of the venture and it is risky. It threatens to let down the young people who have put their faith in the institution. Even though there are only 12 of them from the city of Sheffield, that is 12 too many as far as I am concerned. Chapeltown Academy Trust has no track record. It has come from nowhere. It is not a chain or a charity. It has no background whatever. It is untested, untried and unknown. I ask the Minister to make a commitment tonight seriously to consider backing out of the venture before it is too late and young people are left adrift in September, not knowing where to go to further their education.

21:02

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

I congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on securing what is an important debate not just for the students, but for the communities that she represents in Sheffield, and on ensuring that the proposed free school at Chapeltown in Sheffield is scrutinised properly. It is right to acknowledge that she has made a long and distinguished contribution to education in the House and in her constituency. I believe that she was also a teacher of English at Dearne Valley college until 2003, so she speaks with authority on this subject.

I will endeavour to respond to as many of the points she has raised as possible in the short time that we are allowed for this debate. If I do not manage to do so, I will ensure that she gets the answers in writing from either myself or the Minister who is responsible for this area of policy, my noble Friend Lord Nash.

I begin with a statement on which I hope we can all agree: every child and young person should have the opportunity and choice to go to an excellent local school. That is why we are committed to providing all parents with a diverse choice of high quality provision, including free schools. One hundred and seventy-four free schools have opened and another 120 are in the pre-opening phase and are due to open in 2014 and beyond. Once they are all approved, open and full, those free schools will offer 150,000 pupil places.

Before free schools are allowed to open, the free school proposers receive a significant period of support and challenge from the Department for Education. There is a rigorous application process that involves a paper assessment and an interview with the proposer group. Where required, there are specific conditions for the approval. There is then the pre-opening period when groups such as Chapeltown are supported by officials as they develop their proposal further, consult the local community and work towards signing a funding agreement with the Department.

Quite rightly, as they are brand new schools, there is greater oversight of open free schools than other academies, at least until their first successful Ofsted inspection. It is worth noting that most free schools are performing well. For example, recently in Yorkshire and the Humber, Dixons Trinity academy was rated outstanding by Ofsted, despite opening only 20 months ago.

There are already six free schools open in England that cater for 16 to 19-year-olds. The first of those to open was the London Academy of Excellence, which has been rated as good by Ofsted. The others, including Chapeltown academy, are looking to open in September 2014 and beyond. Chapeltown academy will be the first purely academic 16-to-19 free school—should it be accepted—for 300 students in the north of the city.

The trust’s vision as it is laid out is to provide young people in the area with the dedicated A-level provision and support that it believes is currently lacking in the north of Sheffield. That type of provision is needed by students who have aspirations to attend some of the top universities in the country. The academy aims to open in September this year with 150 students, and it will cater for a total of 300 students when running at full capacity.

[Angela Smith]

The Minister has just claimed that there is demand for high-quality sixth-form places in the north of the city, yet Bradfield school—one of the highest performing and most popular schools in the city—cannot fill its sixth form.

[Mr Timpson]

That is not my claim; that is the trust’s own vision that it has set out. I will come on to explain how we must take into consideration—along with a number of other factors—the demand in the city for this provision before deciding whether to go ahead with the project.

As the hon. Lady knows, the Department assesses the proposal for the Chapeltown academy, and it must approve it to proceed into the pre-opening phase, which it did in June last year. There has been significant progress throughout that phase, and we envisage that the Department will soon consider whether the Secretary of State for Education should enter into a funding agreement with Chapeltown Academy Trust. I emphasise that the Department places great importance on that decision, and it is also aware of the need to do it as soon as reasonably practicable if it does go forward, so as to provide increased certainty of a sixth-form place for potential students in the local area.

The hon. Lady alluded to the fact that she has already written to my colleagues, the Secretary of State for Education and the Schools Minister, on a number of occasions, to express her concerns about this academy, which she has also articulated extremely forcefully this evening. She has helpfully laid out some valid points before the House, and the Minister responsible for the decision will carefully consider such issues before entering into any funding agreement with the Chapeltown Academy Trust. I will also take this opportunity to address some of the specific points the hon. Lady has raised.

On evidence of demand, in its original proposal the Chapeltown academy had—as with all free school projects—to produce robust evidence of demand for its proposed provision from parents and prospective students, and make a strong case for its proposal, citing contextual factors including the breadth and quality of the local post-16 offer. The Chapeltown academy received more than 300 expressions of interest in spring last year from students who stated that they would choose to attend the academy were it to open in 2014. As I have said, the academy will have 150 places available in the first year, and even with the delays to the announcement of the site for the academy—I will come to that in due course—the trust has already made more than 130 offers, 81 of which have been accepted to date. That figure will obviously change in due course.

We are aware that some students may potentially hold a place at another post-16 establishment—a point raised by the hon. Lady—so it is difficult to predict precisely at this stage the number of students who will arrive should the Chapeltown academy open in September. However, the academy has a robust student retention plan in place that has been shared with the Department for Education, and it will continue to recruit students to ensure that sufficient numbers are achieved.

The hon. Lady also mentioned the decreasing demographic of the 16-to-19 cohort in Sheffield and the impact on existing providers. I understand that the 16-to-19 cohort in Sheffield overall may decrease in the coming years, and that all post-16 providers in the north of Sheffield will therefore be looking to attract potential students. Chapeltown academy will have a dedicated academic provision focus and will attract students who aspire to go on to attend some of the top universities in the country. Currently, if students in the local area wish to attend a purely academic education option they must either attend provision that provides both academic and vocational courses, or travel substantial distances across the city to seek it elsewhere.

Unfortunately, time does not allow me to elaborate on the various institutions available to students in the city, although the hon. Lady referred to some of them. Part of the whole ethos of the free schools programme is to provide competition for existing providers with the aim of driving education standards across the whole sector. That is something that the Chapeltown academy will want to be able to offer to the academic students in the area.

The hon. Lady also raised concerns about the capacity and experience of the proposer group for the Chapeltown academy. We are fully aware that the skills and attributes that are valuable in writing a proposal or successfully delivering a project are very different from the skill set required to govern an academy effectively. I totally agree that a strong and effective governing body is a crucial element in the success of any educational institution. As is the case with all free schools, we expect to see a strong governing body in which any conflicts of interest are identified and addressed. That is why we have asked the trust to consider its governance arrangements to ensure that its membership has both the skills and the experience to drive through any necessary improvements. That was reiterated to the hon. Lady in a letter from the Minister for Schools. To that end, the revised governing body now consists of two former head teachers—one being the chair of governors, who has post-16 leadership experience—a chief executive of a local charity, a senior human resources consultant, a former director of education and skills, and a chartered accountant. We are now satisfied that the governance structure has the capability to deliver an outstanding education to its students. I understand that full details of the governing body are available on the Chapeltown academy website.

[Angela Smith]

Will the Minister acknowledge that that is only five members of the permanent governing body? The rest of the governing body will not be announced until towards the end of the year.

[Mr Timpson]

I cannot contradict the hon. Lady’s comment, but I will look carefully at the point she has made. It will need to be considered as part of the process as it continues.

The Department is aware that some of the local post-16 providers in the north of Sheffield and across the city are not in favour of the proposed Chapeltown academy. Clearly, we would not necessarily expect that to be the case, for obvious reasons. We are also aware that some of those providers have liaised directly with the Chapeltown academy to request further information about its proposal. It is for the academy trust to determine what information or financial data it is appropriate to release at any given time. I understand that the Chapeltown academy has discussed its proposal with some existing colleges and has provided as much information as it feels is possible without releasing confidential information.

As for the financial viability of the Chapeltown academy, it has supplied financial plans as required at each stage of the project, along with a business model that further demonstrates the viability of the free school. The trust will produce revised financial plans again before we consider entering into a funding agreement. Rightly, those financial plans are rigorously assessed by the Department to ensure that they are viable both from a financial and educational perspective.

The hon. Lady raised concerns about the consultation carried out by the free school trust. That is something it has to do to establish whether it should enter into a funding agreement with the Department. The Department also consults local authorities in considering a free school proposal. The trust has worked to ensure that it consults as many stakeholders as possible, and I understand it wrote to the hon. Lady, inviting her to attend a consultation event, along with giving her a hard copy of the consultation document.

At the time of planning and launching the public consultation, the negotiations for the Chapeltown academy’s premises were commercially sensitive, so the trust was unable therefore to release the details of the proposed premises at that stage. Respondents to the consultation were informed that the trust would consult the public again regarding premises in due course. It has now run a separate public consultation regarding the premises, which opened on 12 March and closed on 2 April. The trustees are considering the responses received and will publish a supplementary report. I know that the hon. Lady will be interested in its contents.

Officials from the Department also sought the views of local authorities in Sheffield, Rotherham and Barnsley. As with all free school proposals, the responses from this consultation, along with the consultation undertaken by the trust, will be duly considered before we decide whether to enter into a funding agreement with the trust. The next steps are for officials to collate all the evidence in relation to the Chapeltown academy proposal, and for Ministers to consider whether to enter into a funding agreement with the academy trust.

I know that the Chapeltown academy has taken the approach of sharing as much information as it can publicly regarding the new academy. As the hon. Lady said, it is proposed that the free school will be located in an industrial unit on the Hydra business park. It is intended that temporary permitted development rights will shortly be applied for to enable the school to use part of the existing office space for one academic year. A full planning application for change of use and external alterations will also be submitted for the permanent building, so there will be some planning oversight of the facility.

As with all free schools, a wide range of factors is considered before entering into a funding agreement. We remain confident that the Chapeltown Academy Trust has produced the material necessary, but it remains for it to make its case.

Question put and agreed to.

21:15

House adjourned.